Back In Black!

Ryan Herrington reports that after two years of losses, the United States Golf Association is profitable again.

The report shows that the USGA and USGA Foundation had a net income of $1.21 million on revenues of nearly $137 million for the year ending Nov. 30, 2007. Net assets at year's end were $253.3 million.

The 2007 figure is modest compared to the USGA's reported net income $8.4 million in 2002, $4.4 million in 2004 and $2.3 million in 2005. However, a year ago, the governing body had a deficit of $6.12 million on revenue of $126.6 million, so things are moving in a positive direction.

Analysts reacted differently to the news.

Terry Tasselloafer at Gorge, Selle and Hatchet and author of the golf stock newsletter Give The Doglegs A Bone, has upgraded USGA stock from "dump it" to "eh" thanks to a positive outlook for 2008, which includes major profits at the U.S. Open thanks to a lopsided lease agreement with the City of San Diego.

"They really did a nice job ensuring the profit is privatized and the risk was spread evenly among all public agencies down there," Tasselloafer said. "Plus I love all of the initiatives geared toward the 18-34 year olds. It's shows they are looking out for the needs of their most important constituency: advertisers."

However, Steve Acluistic of Hunkerdown and Goldbricker has downgraded USGA stock to "unload faster than Blockbuster" on the lower than expected net income. He says rising fuel costs combined with the USGA's private jet use mean flat net income for several years.

"And until they can get David Fay's bloated salary off the books, I'm afraid the stock price is going to be flat," said Acluistic, who won't issue a positive evaluation "until we see naming rights sold on championships to boost revenues."