FOOL CONFERENCE CALL SYNOPSIS*
By Debora Tidwell (TMF Debit)

Family Golf Centers, Inc.
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225 Broadhollow Road
Melville, NY 11747
(516) 694-1666

UNION CITY, CA (May 20, 1997)/FOOLWIRE/ --- Family Golf Centers, Inc. reported their first quarter 1997 results on May 5th. They thought they had a wonderful quarter. Currently they are operating 44 centers across the country. They have continued to pursue their expansion strategy to add centers to their portfolio. They have not seen much competition so they will continue their growth strategy.

REVENUES/INCOME. Family Golf Centers reported net income of $562,000 for the first quarter or $0.05 per share on 12,084,000 shares outstanding. This is compared against the first quarter last year where they had net income of $69,000 or $0.01 per share on 8,648,000 shares outstanding. Total revenues were $9.015 million which represents an increase of 168% over the first quarter of last year when they reported $3.362 million. Operating revenues, which is the range revenues, lessons, miniature golf, etc. amounted to $6.522 million or a 142% increase over the same quarter last year. Merchandise sales amounted to $2.493 million which is a 271% increase over the $671,000 of merchandise sales (pro shop) last year in the first quarter.

COMP STORE SALES. As they reported, the comparable store sales for the fourteen centers that were in operation for all of the first quarter of last year and this year was up 50% due to the favorable weather we have had as well as the tremendous increases in pro shop merchandise sales. Pro shop revenues as a percentage of total revenues was in the range of 27% compared to 20-22% analyst model. The company indicated that pro shop sales going forward would probably be in the range of 24% of total sales. The other 3% or so, they felt, was weather related. As far as name-brand versus custom merchandise, the pro shop sales of custom Family Golf merchandise was around 15%. Their goal is to grow that to 35%. They generally start with a higher mix of brand name merchandise in newer locations to build traffic and interest and gradually increase the mix of custom merchandise. As people try out and use the custom merchandise, they find it comparable to the brand name merchandise and sales increase, but it takes time and exposure. The company cautioned that their same store sales are heavily impacted by bad weather. The weather during the first quarter was mild in many areas of the country. April had a lot of rain for many parts of the country, the Northeast and Southeast in particular, and that should be taken into account for future expectations.

EXPENSES. Operating expenses were $5.618 million or 150% over the $2.162 million last year. Operating expenses as a percent of operating revenues was 86% which was a couple percentage points higher than what had been expected. The primary reason for that is the number of new locations. They acquired about 9 of them in the first quarter and they were leased locations, so they had expenses associated with them with revenues not really kicking in yet. That was part of the contribution towards operating expenses being higher. They don't see the need at this point to project that it is going to be significantly higher than estimated for the second quarter. Cost of merchandise sales was $1.679 million or 67% of merchandise sales and compares against $457,000 for the first quarter last year where cost of merchandise was 68% of merchandise sales. SG&A expenses was $1.085 million, a 68.7% increase over the $643,000 last year. Interest expenses were $191,000 this year versus $100,000 last year. Interest expenses will go up as the year goes on and they acquire new sites. Income tax expense this year was at 38%, totalling $345,000 compared to $38,000 last year.

INCOME. Income from operations was $632,000 this year compared to $10,000 for last year's first quarter. Other income, which is primarily interest income, was $466,000 this year versus $197,000 for the first quarter last year. Income before taxes was $907,000 this year versus $107,000 last year. Net income was $562,000 this year versus $69,000 last year.

PREPAID EXPENSES, EQUITY. Prepaid expenses and other current assets was about $5.7 million. Stockholders equity is over $135 million and that is what they will use this year to grow.

CONSTRUCTION PERMIT/DELAYS IMPACT. They have all the building permits they need and will start construction on a site in Seattle. The speed with which they can get a rennovation or building permit can have an impact on both their numbers and progress on their growth strategy. As they become a bigger company, the impact will be less. Seattle took them 17 months to get everything cleared. While Seattle was extreme, it is an indication of the type of delays that can happen. They do everything they can to get building/construction permits cleared in a timely manner.

PLANNED EXPANSIONS. In the first quarter they ended the quarter with 44 locations and an average of 36 centers open because most of the acquisitions took place in March. The average number of new centers opening for the first time during the quarter was around 5. For the second quarter, they expect to end the quarter with approximately 50 locations. They expect to end the third quarter with about 56 locations and the fourth quarter with about 60 locations. The timing on these can vary. Again, too, many of these locations will need to undergo rennovation and construction. So, they may acquire locations by a particular time period, but they may not be operational or revenue generating.

REVENUE RAMP UP ON NEW OPENINGS. They were asked what percentage of annualized revenues they think will typically come from the first quarter in a mature location. They answered about 17-18% and that is typically in the Northeast. In warmer climates it will be a higher percentage. As they expand in the Southeast and Southwest, the percentage will be higher. For the first quarter this year, they were at or above plan at pretty much all of their sites. April was somewhat rainy in the Northeast and Southeast, so they would say they are pretty close to plan, but some of their golf courses because of the rain are behind plan. Generally, the pro shop takes about a year for those numbers to really start getting a big boost from their operations, but the range numbers once they are done with their rennovations are quickest to ramp up to expectations.

TIGER WOODS IMPACT ON BUSINESS. They were asked about the "Tiger Woods effect" in terms of finding locations to acquire or has it increased the cost of acquiring locations. They responded that they have not seen it. During the last several quarters they have seen a couple companies go public in their industry. The country is large and the opportunity is still abundant out there. They have not seen any increases in competition. They are happy to report that the only time they ran across one of their competitors was in a bidding situations in Los Angeles where one of the community colleges had excess land. Family Golf survived the bidding process and was awarded the contract. Competition has not increased at all. Tiger Woods in general has impacted the golf industry in terms of awareness. The impact is on non-golfers. It will hopefully generate a lot more interest from people who currently don't play golf. Specifically, this year they have increased their presence above and beyond last year in terms of junior golf. At every one of their golf centers now they have 3 junior programs for children 4-6, 8-10, and 12-14 age groups. They have just gotten junior sets of golf clubs in and they are selling well. They have seen an increasing number of parents bringing their kids into ranges as young as 3 and 4 years old. They certainly hope the phenomena will continue and they think it will.

INCREASED INVENTORY LEVELS. They were asked about increased inventory levels. They responded that the pro shops are stocking more inventory because of the sales increases. They are also, as they grow larger, able to benefit from volume discounts on merchandise more and are doing that.

* A Fool conference call synopsis represents an effort to highlight the salient points of a conference call and should not be taken as an authoritative accounting or transcription of the entire event. Note: Statements made by a company other than historical information may constitute forward-looking statements for which the company can claim protection under the Safe Harbor Act. Please consult the company's filings with the SEC for information on risk factors which might cause actual results to differ materially from the information contained in these forward-looking statements.