Article

Golf kiosk set to play a great round

Dedicated golfers have another way to pore over their statistics, from tee to green, using TeeMAX, a pro shop golf kiosk. The kiosk, its backers say, should also help increase pro shop sales.

March 24, 2002

Golfers love statistics. Recording the day's golf score and checking it against previous efforts is a routine part of the game for regulars all over the world. EarlyRain Inc.'s (CDNX - ERN),
golf

EarlyRain Inc. HQ: Calgary, Alberta Traded: CDNX - ERN Revenues: $179,507 (as of June 30, 2001) Founded: 2000 Employees: 9 Employees at t2t: 3 Products: smart cards, Affia loyalty program, TeeMAX kiosks. Web site: www.earlyrain.com

kiosk, called TeeMAX, is designed to drive statistics to a higher level, and add revenue to courses.

The TeeMAX kiosk was created by EarlyRain's subsidiary Tee2Tee Scoring Systems Inc.

Hal Walker, chief executive officer of EarlyRain, said, "We've already scored over half a million rounds of golf on the system."

Though the kiosk has been used on selected courses for four years, EarlyRain introduced the system to a wider audience in January at the PGA Merchandise Show in Orlando, Fla., golf's largest trade show.

TeeMAX is no duffer

After a round of golf is completed, the player takes his or her scorecard to the pro shop, where TeeMAX scans the card, analyzes the data and prints out the player's results.

"It gives you a summary of your game and also includes a comparison to your last 20 rounds of golf. It enables golfers to keep track of their scores, but it also keeps track of all

TeeMAX gives pro shops--and their customers--an edge.

their statistics, whether it be drives in regulation, greens in regulation, sand saves, penalty strokes, number of putts--all of the other statistics that you hear when you watch a PGA tournament and that you'd like to know about yourself," Walker said.

TeeMAX also helps pros instruct players and allows tournament directors to effectively gauge courses by evaluating, through the statistics, the way each hole plays.

"The summary containing all of that information about your golf game is very valuable to a pro when giving you lessons," Walker said. "He can know if you usually hit your ball to the right, or if you have trouble chipping or trouble putting."

Services are not limited to the kiosk. Those who wish to check their data from home can do so over the Internet.

The TeeMAX kiosks are network-capable and run on Windows 2000. They feature an interactive touchscreen, keyboard and mouse. The interface uses large icons and is designed for quick ballot entry.

New owner teeing off

TeeMAX will soon get a boost when Go Golf takes ownership of t2t in September.

EarlyRain announced at the end of June that it will sell t2t to Go Golf Holdings Ltd., of

Go Golf Holdings Ltd. HQ: Bedfordshire, UK Traded: No Financing: $6 million Founded: 1999 Employees: 17 Products: Golf-related companies, with an emphasis on hardware and software. Web site: none

Bedfordshire, United Kingdom, for $2.8 million (U.S.). The deal, still subject to regulatory approvals, is scheduled to close September 30.

Funding from the sale will help EarlyRain roll out its Affia smart-card loyalty program in Canada and the U.S. EarlyRain launched Affia in Edmonton, Alberta earlier this year. In addition, EarlyRain will stay involved in the TeeMAX product by providing Go Golf with smart card technology for the kiosks. Smart cards are EarlyRain's core business.

Go Golf president John Cobb said that the company was formed in 1999 to buy businesses making golf-related hardware and software.

"Golf is a very fragmented industry in terms of software and hardware," Cobb said.

His goal is to bring the fragmented industry together under one corporate image and offer new services to clubs.  The purchase of t2t will spend about half of the company's $6 million in venture capital, Cobb said.

Cobb said his company was attracted to the TeeMAX because it was the first system on the market that encompasses the golf pro, the pro shop and the player.

This is the fifth purchase for Go Golf. The three t2t employees are expected to make the move to Go Golf, though that is still being negotiated, Cobb said.

A wee bit pricey

When Go Golf rolls out the revamped TeeMAX in September, Cobb admitted the machine will be pricey. For that reason, he expects most clients to lease the kiosk as opposed to shelling out the $19,700 purchase price.

"I think there are very few pros that can afford to buy the machine outright," he said. "If they want to, they can, but we'll actually do it over a lease purchase of three to five years."

Cobb said a lease on the unit will cost about $492 per month.

"It's quite expensive to lease it over here, but the revenue streams the pro can actually take from it are far greater," he said.

Golf networking

Soon the system's versatility will reach new heights, Cobb said.

"Every single machine that we put into every pro shop will be networked by a satellite to a communication channel," he said. "We'll actually be able to feed video and PowerPoint presentations directly to the golf clubs via this machine. We're just taking it to the next degree and basically enhancing its overall value."

With the satellite networking, users will be able to connect with other golf courses that have TeeMAX installed.

Driving sales extra yards

Though TeeMAX offers many features for golfers, its main purposes are to increase traffic in the pro shop and drive sales.

"It brings every golfer back into the clubhouse and into the pro shop after their round of golf, because they go in to put their card through the kiosk to see their stats," said Walker. "So that's valuable to the golf course."

Wade Hudyma, director of golf at The Willows Golf and Country Club in Saskatoon, Saskatchewan, said that the kiosk, which he has used for four years, lives up to its billing.

"About 80 percent of our membership uses it," he said. "We use it with our men's league and award prizes each week based on certain stats. It's just a system that I use for them to get a little more information on what they're doing out there. Everybody's happy with it."

That user satisfaction results in more cash flow for the golf club, Cobb said, because it creates community.

"The statistics are a talking point, and once you get a talking point people sit down with a pint and talk about things in the clubhouse. Then, in the pro shop itself, you've got people wanting to explore more and more statistics. They tend to play more and more games, and that can only help the club and the pros."

Walker added that advertising, which appears via streaming video, can boost sales in the pro shop or increase revenue as outside companies look to attract the attention of end users.

"The advertising revenue that can be generated off of that is very large," he said. "And that's something that we've not even taken into consideration in our financial modeling."

Adding links

Go Golf plans to sell or lease about 5,000 TeeMAX kiosks. Besides the United Kingdom and North America, Go Golf is negotiating deals to place the TeeMAX in France, Portugal and Japan.

"We have 3,000 clubs here in the U.K.," Cobb said. "Looking to the next five years, we would like to get one into every single golf club that we can."
 
Go Golf is also targeting U.S. courses.

"We are in talks with a very, very large company in America to actually reposition this back into the American market to over 2,000 golf clubs," Cobb said. Cobb didn't disclose the name of the American company, but noted it was a high profile company in the golf world. He hopes to close the deal by September.

As for the total number of kiosks expected to hit the U.S. and Canada, Cobb said it depended upon what joint ventures the company could put together with companies in North America.

Cobb's ambitious plans include a major announcement in the near future for Go Golf's TeeMAX initiative, and an initial public offering of stock by 2004.