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THE SOLHEIM CUP


September 18, 2002


Doug Hawken

John Solheim

Allen Solheim

Karsten Louis Solheim


EDINA, MINNESOTA

BOB CANTIN: Good morning and welcome. We just hit the first tee shot and it's 11:34, and we are in the middle of the first fairway, so if we don't get started right now we are going to get disqualified. We can't do that.

I'm Bob Cantin, the communications director for PING, and the project director for the Solheim Cup, and it is a pleasure to be here at wonderful Interlachen Country Club. I have today a very friendly foursome, I will call them. I have had lots of fun with these gentlemen over the years with the 23 years with PING golf equipment. I would like to introduce Allan Solheim and Louis Solheim, both executive vice presidents of Karsten Manufacturing.

This gentleman right here outranks me in many ways, but he has been with the company 32 years, so if I get dyslexic and say 23, or 32, you will remember. He is 32 and I am 23.

Doug Hawken is the president of PING golf equipment, president and COO, and it's a pleasure to introduce John Solheim, the chairman and CEO of PING, where just three weeks ago we made our largest product announcement in the history of the company, and it's been a very successful product announcement, and John is here to tell you about that and whatever else he would like to tell us about today.

John, thank you very much.

JOHN SOLHEIM: Thank you, Bob. It's an exciting time for us in a lot of ways, and the Solheim Cup is going to be exceptional, and the fact that we have got the Junior Solheim Cup going on right now is awfully good, too. It's a little heavy on the US side right at the moment, and we will see how it comes out, but it's something that I think will grow and be a very strong part of the Solheim Cup, as well. And to be at a facility like we are at here at Interlachen for this event is just really great.

With PING, we made introductions a few weeks ago of an exciting new line of product, and almost completely revamping our line. On the putter side we -- my son, John, actually headed it up and took Karsten's wonderful designs on putters and decided to try to see if he could improve the weighting of what Karsten did with some of the technologies that are available today just purely in the casting and keeping the price under control.

And he has done a wonderful job with a bunch of those models at increasing -- the inertia is about 150 percent in those clubs. But then there is two even more exciting models coming on, the Specify, which is kind of what I think of the club of the future, or, as I put it, a Nintendo club, something you may be able to add, in the future, other things to.

But it has a very clean top line to it, so the squaring up is extremely good for lining up your putt, but what complements that is the dark backside. So the Optic 7 is just wonderful at setting up.

Now, the way this works is you have a choice of different types of hozzles to fit your swing, and this goes into our fitting type of system. And you can -- this happens to be the center balance hozzle so the club will be balanced. The -- there is an Anser type of hozzle and then one -- some Zing type of hozzle, which are a little bit more towards the center, so depending on your stroke, whether you are square to square or open to close, you can find the right offset for you.

Then, with that, there are three different designs of backs, an Anser, an Alloy, or a Zing, some of our most popular clubs. But then you can take each one of those and get them in three different weights, so absolute fitting for a putter like this has never been done, and there is actually going to be an Internet site where an individual can go and make his own putter.

And kind of the cream of the crop, is what I call it, is I took Karsten's ideas, and then how can we get them to the most extreme? And we developed a putter that actually is a forged titanium body -- nobody has used titanium on putters before. Then we took tungsten, but we didn't just take average everyday tungsten that's available in a little bit of alloys, we took as pure as what we could get, which has a specific gravity of nearly -- or right at 18.

We forged the titanium, we pre-machined it, pre-machined the weight, braised them into place, but there is a factor that you are not supposed to be able to braise tungsten when it's in that pure of form, but we were able to achieve doing that.

Then the entire club is machined and it's machined to a much higher level than what anybody else has machined putter, because most companies will take and break the radiuses by hand, and these are all broken by machine.

We have upped the inertias about 40 percent more than whatever, and when we look at high speed photography on normal putters and how when the grip is being held by a mechanical device, the torque and the shaft is actually torquing a few degrees on an offset hit. This one hardly moves.

So it's got a different reaction. And some of the tour players are realizing you have to think different with it because they are used to missing a putt a little bit, and with this one they don't miss it as much, so they may not have to quite hit it as hard to get it where they have to be.

And then the other major introduction was an I3+ iron. Okay. The I3+ iron, we took what was the best selling iron in the marketplace today, and we didn't try to come out with a new model, we tried to take that and do it Karsten's way, which was improve it. So we went about, how can we make small improvements and make the club better?

Well, the biggest thing that we did is we changed the leading edge, but the lower half of the leading edge we left the same because it was working so well in the turf. The upper half we made much sharper so it allowed us to drop the face lower to the ground so you could get under the ball easier.

This -- on the more lofted irons actually gives nearly two groove widths more facedown to the bottom of the ground still reacting the same on the turf. But the interesting thing is, when you swing the club, it goes through the grass and kind of -- much easier, you can actually feel the difference, anybody can, going -- taking a swing through the grass.

And with that, we worked an awful lot to clean up the lead edges so that it progresses very well into the hozzle, just as clean as absolutely we can.

Also, the blade model, we adjusted the offsets and put a little more offset in the more lofted irons and just did a lot of little tweaking to make them even better.

There is a couple other little things we -- the port in the back is absolutely larger, we modified the type of the hozzle. The other key thing is we brought a new shaft out, and it's brand new to the golf marketplace, as well. And this is what we call a triple wall shaft and most shafts, like a dynamic shaft, are two different thicknesses, and we have had some shafts that had three different thicknesses, but the top and bottom started out the same, and the middle was smaller. This one you have a thicker thickness on the tip, a medium thickness in the butt, and a thinner part in the middle.

And in doing this, we are controlling the thicknesses all through the shaft. We also made very small steps of less than half of what steps we were doing before, and we also stretched these steps so that they are longer. We maintained a dynamic flex pattern, but took 10 grams out of the shaft, and it has a wonderful feel to it, but as I put it, it feels soft, but it plays stiff, so it's kind of an ideal situation.

The tip is different, as well, because we have always used a taper tip shaft, and this one actually has a double taper, it's got two tapers to do it. And this is all to achieve that ultimate flex and feel.

It's been very exciting, as well, with the new wedge line that we put in, which has been extremely well-accepted, both by our players and by other players on the tour. And you are going to see a lot of these in the bags. This is more taking a traditional iron shank that was developed by people like Bobby Jones and Gene Sarazen and applying some of Karsten's weighting to it, and -- but we also put a port in the back which gives us that heel/toe weighting, but it allows us to vary the weight to custom-fit better.

So this -- it's a piece of plastic -- it's not plastic, it's a urethane loaded with tungsten. And we can -- normally it's about half the weight of the metal that's around it, but we can actually make it much lighter than that or we can actually make it the same weight as the metal that's around it.

It just gives us great versatility. The sole of this is different than ever has been done before because the balance continues underneath the axis of the shaft, and that just makes it so we can make a lot more different type of shots, and it performs extremely well. And the way that it's been accepted is showing that that's happening.

This is a little bit -- in the -- we are what we have done here is taken a very popular design, shape-wise, and added features. One of the JAS putters, we kind of did that, too. We took a traditional blade putter, which has not -- has weighting that isn't there -- in other words, it doesn't perform good. The only thing it has good on it is a little flange to help move the center of gravity down.

What we did is made this out of forged titanium, put the very heavy tungsten weights in it, and we lowered the center of gravity of the club even more, put the heel and toe weighting, so you have the old traditional blade-looking putter, like a Wilson 8802, but with the -- with weighting like Karsten never believed in having before, was possible before.

We will just -- there is a lot happening in golf bags, as well. There is a -- we have completely revamped that line, and kind of the fun bag is called a Frontier, which is made for going on a golf cart, but, again, very traditional-looking, but with the modern features of everything. It's more of a traditional-looking bag, but all of the pockets are accessible from the front. There is a very large area in here that will actually -- you can put a set of shoes in, or whatever. Just absolutely a functional bag, easy to put on the cart, it's just designed for cart-type use.

And then we -- oh, there is a ladies version as well, it's slightly smaller and an inch shorter.

And the fact is, on our most popular bag, the Hoover, has been completely revamped and just improved in lots of little ways, but something we also are doing in that is we have made a left-handed version where the pockets are reversed so a left-handed person could carry it on the other side easily. Now, that's available in black only, unless it just goes bananas and then we will add some more to it.

Q. That's the first time in the golf history?

DOUG HAWKEN: And that comes from listening to our customers. I would like to quickly say, also, this is probably the most prolific -- it is the most prolific product launch we have had in the history of PING, and John, and his oldest son, John K., Were instrumental in making that happen, but there is something else that we are doing of significance.

I just met this morning -- that's why I am a little overdressed -- with some of our larger accounts and talked about our custom-fitting project, and talked about how we are going to elevate it. We are completely revamping our manufacturing processes into cells which accommodate lean manufacturing so that we can continue to move the bar as far as immediate delivery of custom-built golf clubs, and that's a very significant change to the industry that we are trying to communicate with the consumer the importance of custom-fitting, and the value that it adds to the enjoyment of the product.

JOHN SOLHEIM: Allan, do you have any comments?

ALLAN SOLHEIM: Well, I think what I am most excited about is the JAS putter because back when my father first started playing golf and wanted to get that little round ball into that cup, and having trouble, he felt it wasn't all his fault, and he came up with that heel and toe weighting where he spread the weight out from the center, and he made a putter for himself that he putted for years, and I know that he would get pros on the tour by having an aluminum putter that had weights that were movable, and it had a felt marking pen on the back, and they would put on white paper, and it would show how the ball -- the face opens or closes while it hits.

And put the weight out on the heel and toe, it's not as much.

Q. Allan, could we have Bill Fields come up on stage for a second? Just for a second. I think Allan knows why. Here is two putters. It's much more visible this way.

JOHN SOLHEIM: This is something my dad used to do.

ALLAN SOLHEIM: Let me have you just hold these two putters, put one that way and let's put it so this is going to represent the face of the club and hold it just like that, so this is the face and this would be kind of like evenly weighted, and if you hit the ball right in the center, it deflects back straight. Okay? But if you hit off center, do you see how much it's turning?

Okay. Now let's take and pull these two putters to get the weight way out, and now when we are hitting it in the center, it's the same, but when we hit off center see how much stronger, it doesn't deflect as much.

And with this JAS putter we have just changed that by 40 percent, and it's actually not a one for one. You move the weight from the center farther out, it's four to one that it moves the amount it deflects.

But I know golfers like Helen Alfredsson, she told me she used our putter for years because Karsten had taken that aluminum putter with the weights and moved it, and when she saw how much difference that heel and toe weighting, that she changed. Well, now it's like everybody out there has got that, but now we have gone a step farther.

JOHN SOLHEIM: And remember, length always helps. People aren't willing to accept length sometimes, but probably the best putter in the line is one that's called the Alloy Max, and it's a little longer putter, so you get some maximum inertia, but we grew it proportionately, so it really doesn't look as large as what it is.

And we have done a lot of work on that. And it's available two ways, both in a standard length putters and then we have one with even bigger weights in it that's more made for the belly type putter, more like this one. Okay? So that it will handle that extra length.

And, I mean, the inertias on that putter are just out of this world. I mean, it's -- there is nothing been anything like that unless it was really, really long. And Doug was talking about some of the manufacturing ideas that we are putting in. A lot of those ideas came a few years ago from my brother, Karsten Louis, and, you know, how to set up the plant so it would be as efficient as possible to -- for the product to move through and for the people to be able to work on the product and not get in their way, and that's -- so flow -- people don't get in the way of flow and vice versa.

So it's some of the ideas that he had a few years back that we are able to work out today. Do you have any comments, Lou?

KARSTEN LOUIS SOLHEIM: I would like to add a few comments from the family perspective. My younger brother is doing a fine job in designing new clubs, but what he has announced recently brings back memories of the earlier days of my father when he was a shoemaker back in Seattle and the competition on the other two corners where he had his shoe shop lowered their prices for heels to 15 cents and put signs out in front, and after a couple customers came in and said is the quality the same, he decided to not go their way and he put out signs for 35 cents and emphasized quality; he was always interested in quality.

And then he got led into sales and then into engineering and ended up with a challenge to build a better golf club for himself. When he built that better golf club he used all those ideas. He was interested in performance because it was himself that was putting. He wanted a club that would perform.

He was never interested in selling clubs by a lot of hype. He always listened to people and the comments they made, just like with the heels. When this customer said is the quality the same, he heard the message.

Well, he listens to the pros when they make comments about the putters. He has always been interested in selling by performance. What you have heard announced today is a continuation of that, improving the performance of the club in so many different ways that you have heard.

My father was an innovator doing things uniquely. Everybody was jumping on the bandwagon and trying to get the leading men professionals behind their clubs, and he says, no, I am going to do it differently, we are going to support the ladies.

The end result is that we started the Solheim Cup, which has been, I think, an exciting thing in the way that it's grown, done things in the golfing industry that other people wouldn't have, so it from a family perspective, I see what's going on in PING continuing the things that my father started years ago.

BOB CANTIN: Questions from the audience? You got a microphone there, Lisa.

Q. John, a few years ago you -- I guess it was about two years ago you launched the women's iron. It was the first time that you had a specific women's iron.

What did you learn from that launch and, you know, where are you now with that?

JOHN SOLHEIM: Okay. You are saying on a women's iron? Well, there is two marketplaces in the women's market: One, there is the player like these ladies out here are achieving, the ultimate, and, really, they need very close to men's specs.

Then there is another marketplace that really needs a custom set built for them with different lofts and, actually, different numbering scale, and, you know, we are working on how to figure that out even better than what we are and to build the ideal club for that marketplace.

And, really, it's not just purely a ladies' marketplace, it's a slow swing speed marketplace, so it actually engulfs a certain part of the market, and we are working on something that will be even better in the next few years on that.

Q. John, you mentioned -- you have shown us the improvements, nonspecific, on the JAS series, but you haven't mentioned really to any extent the type of shaft, shafts, different shafts, that can be utilized in this.

And I might add one other thing, the one thing that I have been a proponent of and I am proud to have found out how to hit the ball straight down the middle off the tee is with that great titanium driver. You might talk a little bit about that because that, to my book, is the best.

JOHN SOLHEIM: The -- in the shafts on the JAS and the -- excuse me. On the G2 and the Specify line there is a new stepless shaft that my sons developed to get the right feel into the head. And then in the JAS there is a step shaft and it's a new shaft that's been developed to maximize the feel.

Part of the reason that we are working -- there is a lot of changes in the whole line is the weights are a little bit heavier, the shafts are more matched to the golf balls of today rather than the Balata balls of the past, so that's important to the feel of things, and we have been doing a lot of research on that to make that happen right. So they are matched to today's golf balls, not to the past golf balls.

And there has been changes in the putting stroke and how people putt, as well.

Q. John, talk a little bit about the acceptance of the tour players of the wedges and the putters.

JOHN SOLHEIM: Okay. You know, it's been very exciting, the -- kind of the most successful with the wedges has been Bob Gilder. Since he put the wedges in play, he has won four tournaments, and that's in a matter of eight weeks' time on the senior tour.

But just Mark Calcaveccia, just unreal number of players, and most recently, the ones that put the wedges into play was Lee Westwood over in Europe, along with the first person to putt with the JAS putter, and probably one of the first JAS's out there, because they haven't been available until just right now.

The -- also, it was interesting, Carl Montgomery put them in play this last week.

Q. You might want to let the group know what the retail price of the JAS putter is.

JOHN SOLHEIM: Yeah, the retail price of the JAS, and the thing about this, this is a bargain for what's there, because.

Q. Remember, you heard it here first, he just said it's a bargain.

JOHN SOLHEIM: For what's in it and what its costs are, it's a bargain at 425, and we priced it there so that it's low enough to get established in the marketplace. Later on it will have to move up because we won't be making much money on it.

DOUG HAWKEN: To add to what John is saying, to go back to your question, because I think it's very important that we don't miss it, that this is the quickest any new product that we have put out has been accepted on the tour, and we are going to see the same results in the collegiate program, but not just the PING players, the nonPING players are also accepting these wedges very, very quickly.

So we think we are onto something here, and we have worked very, very hard and it's why it's taken as long as is it has for us to bring it out. We are not a marketing company, we are a manufacturing, engineering-driven company and we take our time to develop products and bring them to the market.

I am about as excited as I have been about any product as this new line of putters and these wedges and this new iron that John spoke about earlier. The catch line has been that we had the number 1 iron for a couple of years with the I3, and so our engineers went out and did what they normally do to celebrate, they made it better, and that's the example that we have up here on the table.

Q. John, after you described the metals that went into the JAS series I am sitting in the back of the room and I am thinking, gee, I have never heard of those metals being used in a putter before. Are you going to be taking some of these secrets to the defense department before it's all over?

JOHN SOLHEIM: You know, we are going to push the line and keep pushing the line to make the best product, and a little bit like the JAS putter, the way I put that, it's like what the Viper did for Dodge; in other words, it's a lead product that has to be out there.

You really don't -- you know, you may not make the money on it, but it gets your name out there and it's the product that is going to go out and win the races or win the tournaments.

Q. You said the wedges have a more traditional shape. Did you remove some of the offset?

JOHN SOLHEIM: Yeah, there is -- the offset is very much like those traditional clubs. Now, in the I3+ set they have their own wedges on the standard PING I3+ has the normal offset that PING clubs have. Okay? The blade is more similar to what these wedges are. We actually increased the offset on those clubs from last year. But when I say "increase it," about the thickness of a dime.

DOUG HAWKEN: I wanted to make another point about a contribution that originally was conceptualized by Karsten Louis of bringing the international standard for quality, the ISO 9 now and ISO 14,000, and we were certified last year for both of them, and that's an international standard used in aerospace and automotive industry to guarantee quality, and it's something from the recreational industry that we are the first, specifically for golf, in the continental United States, and we are very proud about that, but that's our ongoing commitment, again, to improving quality and constantly moving the bar. And that's really accredited originally to Karsten Louis.

Q. What a difference a few years make. I can go by the calendar about 10 years, 12 years ago, sat down with your dad and he showed me -- he showed me an example of how you and he had put together that first putter, just a block of metal at the end of a handle. It's amazing how engineering and shaft developing can bring clubs along, and you have certainly done that.

JOHN SOLHEIM: No question. But the funny thing is, I have even been working on that first putter of Karsten's with the two blades and the block to make a modern version of that, because that was a beautiful design with the torsion bar and the sole and, you know, it's just -- there is an awful lot been done in the past, but the things that modern technology allow you to do and trim down is just -- it's exciting and a lot of fun.

Q. There is a gentleman who has just walked into the room and we consider him to be part of the PING family. He is going to be embarrassed because he didn't know I was going to say this. His company created the Solheim Cup, and I would like you to see him and recognize him, Mel Morgan with Waterford Crystal. Mel, would you please stand up.

Thank you very much. Are there any other questions? Well, I want to thank you all very much for attending this morning. Obviously, the Solheims will stay here for as long as you want to speak with them, and the book Karsten's Way, will be on sale down at Mr. Olson's Encore Pro Shops, and there will be personal signings by the Solheim family all week. Again, thank you for attending.

End of FastScripts....

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