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Five analysts and top management from sixteen sector firms examine the Leisure Goods & Services sector in this special 89-page issue from The Wall Street Transcript, available at (212/952-7433) or http://www.twst.com/info/info384.htm

TWST: What’s your outlook for the long-term growth of motor sports?

Mr. Conder: In the US we think these companies have entered a more mature stage of their life cycle. You continue to have opportunity related to NASCAR from ancillary rights, that being Internet, international broadcast, and other related type of rights separate from the already signed and in place television agreement. So there’s some opportunity there. There’s opportunity, as always, to add additional seats. But I think we’ve seen the peak in that because you’re starting to hit some price resistance from the consumer. We started to see this exhibited last year with the increasing resistance related to the ticket prices that consumers are willing to pay to attend an event. We believe from an overall NASCAR, Winston Cup perspective, you have limited pricing power for the seats. Therefore, it boils down to the ancillary broadcast rights and garnering additional sponsors (both are more of a cyclical nature) and the ability to add non-NASCAR events at a facility (whether that be additional racing events or non-racing types of shows to run more people through the turnstiles) to drive additional revenue.

TWST: Is Callaway Golf (NYSE:ELY) being impacted by the slowdown in the economy?

Mr. Conder: There has been somewhat of a slowdown in the golf industry as it has been impacted by the economy. But as a whole, what you have seen is more of a weather influence this year. In 2000 we had a very early spring across a large portion of the country and people were able to get out and play golf early. That positively helped rounds played, helped ball sales, helped people buy clubs early. This year it’s sort of a mixed bag. Again, weather influences, but there also are some economic influences in there. Callaway’s reorders have been hurt. They preannounced recently that their reorders have been hurt, related to competitors being aggressive with price on clubs and closing out obsolete ball inventory. This has hurt Callaway in their second year in the ball market. Also, the USGA ban on Callaway’s non-conforming driver (ERC II) has hurt sales at some country clubs, and that has negatively influenced results. But over the long-term, we continue to be attracted to the Callaway story, even though we have a Maintain rating at this point in time, due to the company’s strong brand, cash generation ability, no debt, and what we believe is the best product pipeline in the industry.

TWST: What will it take for you to become more positive about Callaway Golf?

Mr. Condor: From what we hear, Callaway’s products and retail inventories are in relatively good shape. They are adjusting their production schedules to limit build-up of inventory at the company level. We would like to see how the current golf season wraps up at retail not only for Callaway, but also for the industry. Also, we would like to see what products Callaway introduces for 2002 at their fall meeting for retailers and analysts. We will take a look at it again. As I said, we remain attracted to several features of the company on a long-term basis, including its cash generation ability, R&D pipeline, and strong management team, and we’ll look for an opportunity to revisit the shares.

This special issue includes:

1) Leisure Goods & Services - In an in-depth (4,100 words) Analyst Interview, Timothy Conder, Vice President at A.G. Edwards & Sons, Inc., examines the outlook for the sector and shares specific stock recommendations.

2) Leisure Industry Overview - In an in-depth (3,700 words) Analyst Interview, Hayley Kissel, Director of Merrill Lynch's Global Securities Research and Economics Division, examines the outlook for the sector and shares specific stock recommendations.

3) Outlook for Leisure Stocks - In an in-depth (3,900 words) Analyst Interview, Scott Barry, Director in Credit Suisse First Boston's Equity Research group, examines the outlook for the sector and shares specific stock recommendations.

4) Cruise Lines & Motor Sports - In an in-depth (2,600 words) Analyst Interview, Joseph Hovorka, Senior Analyst at Raymond James & Associates, examines the outlook for the sector and shares specific stock recommendations.

5) Outlook for Cruise Lines - In an in-depth (4,100 words) Analyst Interview, Robin Farley, Executive Director in the equity research division of UBS Warburg, examines the outlook for the sector and shares specific stock recommendations.

6) CEO interviews (average 2,500 words). Top management of sixteen sector firms examine the outlook for their firm and the sector.