Callaway Golf Company (NYSE:ELY) today announced its financial results for the fourth quarter and full year ended December 31, 2007. Highlights for the full year of 2007 included:
- Net sales increased 10% to a record $1.125 billion, compared to $1.018 billion for the same period in 2006.
- Fully diluted earnings per share of $0.81 on 67.5 million shares, an increase of 138% compared to fully diluted earnings per share of $0.34 on 68.5 million shares in 2006.
- Fully diluted earnings per share for 2007 included after-tax charges of $0.08 for gross margin improvement initiatives. Similarly, full year 2006 included after-tax charges of $0.04 for the integration of Top-Flite, $0.03 for restructuring, and $0.02 for gross margin improvement initiatives. Excluding these charges, the Company’s pro forma fully diluted earnings per share for 2007 would have been $0.89, an increase of 107% compared to $0.43 for 2006.
- Gross profit for 2007 was $493.2 million or 44% of net sales compared to $398.1 million or 39% of net sales a year ago. The increase was primarily the result of gross margin improvement initiatives announced in 2006 as well as an increased mix of higher margin drivers and X-20 irons.
- Operating expenses for 2007 were $403.0 million or 36% of net sales compared to $361.0 million or 35% of net sales in 2006. The increase was due primarily to higher employee annual incentive compensation expense related to the Company’s significantly improved financial performance as well as an increase in marketing expense to support the Top-Flite re-launch.
Highlights for the fourth quarter included:
- Net sales were $174.4 million, a 3% decrease compared to $179.9 million for the same period in 2006, which included significantly more sales from new product launches.
- Loss per share of $0.25 on 63.8 million shares, compared to a loss per share of $0.15 on 67.0 million shares in the fourth quarter of 2006.
- The 2007 fourth quarter loss per share included an after-tax charge of $0.01 related to gross margin improvement initiatives announced in November 2006. The fourth quarter of 2006 also included after-tax charges of $0.01 for gross margin improvement initiatives and $0.01 for the restructuring charges announced in 2005. Excluding these charges, the Company’s pro forma loss per share for the fourth quarter of 2007 would have been $0.24, as compared to pro forma loss per share of $0.13 in the prior period.
- Gross profit for the fourth quarter of 2007 was $63.4 million or 36% of net sales compared to $58.8 million or 33% of net sales for the fourth quarter of 2006.
- Operating expenses for the fourth quarter of 2007 were $92.0 million compared to $79.9 million for the same period in 2006.
“We have made significant progress improving operations and profitability in 2007,” announced George Fellows, President and CEO. “Specifically, we were able to re-gain woods market share, re-launch the Top-Flite Brand with the successful introduction of the D2 golf ball, and grow our accessories business. In addition, we made significant progress in improving profitability, increasing our gross margins by five percentage points, which contributed to a $135 million increase in cash from operations.”
“While pleased with our progress so far, we continue to focus on improvement,” continued Mr. Fellows. “We have a strong line-up of 2008 products including our recently announced I-Mix driver with its state of the art technology aimed at providing the best and most flexible performance possible for our consumers. Another area we are targeting is supply chain management, where we’ve made tremendous progress in 2007 but believe there is still room to drive efficiencies. With this strong portfolio of products along with improved operations, we feel well positioned to sustain the momentum we enjoyed in 2007.”
Business Outlook
The Company estimates that its full year 2008 net sales will be in the range of $1.145 to $1.165 billion. The Company also estimates that its 2008 full year pro forma fully diluted earnings per share will be in the range of $1.08 to $1.18, which represents an estimated increase of 21% to 33% as compared to the Company’s pro forma fully diluted earnings per share in 2007 of $0.89 as discussed above. Estimated pro forma earnings for 2008 exclude estimated charges of approximately $0.08 per share related to the Company’s gross margin initiatives.
The Company’s earnings per share estimates for 2008 assume a base of 67.0 million shares.
The Company will be holding a conference call at 2:00 p.m. PST today. The call will be broadcast live over the Internet and can be accessed at www.callawaygolf.com. To listen to the call, please go to the website at least 15 minutes before the call to register and for instructions on how to access the broadcast. A replay of the conference call will be available approximately three hours after the call ends, and will remain available through 9:00 p.m. PST on Thursday, February 7, 2008. The replay may be accessed through the Internet at www.callawaygolf.com or by telephone by calling 1-800-475-6701 toll free for calls originating within the United States or 320-365-3844 for International calls. The replay pass code is 908304.
Disclaimer: Statements used in this press release that relate to future plans, events, financial results, performance or prospects, including statements relating to estimated sales and earnings for 2008, and the estimated charges for the Company’s gross margin initiatives, are forward-looking statements as defined under the Private Securities Litigation Reform Act of 1995. These estimates and statements are based upon current information and expectations. Accurately estimating the Company’s future financial performance is based upon various unknowns including consumer acceptance and demand for the Company’s current or new products as well as future consumer discretionary purchasing behavior, which can be significantly adversely affected by unfavorable economic or market conditions. Actual results may differ materially from those estimated or anticipated as a result of these unknowns or other risks and uncertainties, including delays, difficulties or increased costs in the supply of components needed to manufacture the Company’s products, in manufacturing the Company’s products, or in connection with the implementation of the Company’s planned gross margin initiatives or the implementation of future initiatives; adverse weather conditions and seasonality; any rule changes or other actions taken by the USGA or other golf association that could have an adverse impact upon demand or supply of the Company’s products; a decrease in participation levels in golf; and the effect of terrorist activity, armed conflict, natural disasters or pandemic diseases on the economy generally, on the level of demand for the Company’s products or on the Company’s ability to manage its supply and delivery logistics in such an environment. For additional information concerning these and other risks and uncertainties that could affect these statements and the Company’s business, see Part I, Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2006, as well as other risks and uncertainties detailed from time to time in the Company’s reports on Forms 10-K, 10-Q and 8-K subsequently filed from time to time with the Securities and Exchange Commission. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. The Company undertakes no obligation to republish revised forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.
Regulation G: The financial results reported in this press release have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). In addition to the GAAP results, the Company has also provided additional information concerning its results, which includes certain financial measures not prepared in accordance with GAAP. The non-GAAP financial measures included in this press release exclude charges associated with the integration of the Callaway Golf Company and Top-Flite Golf Company operations, charges related to the September 2005 restructuring initiatives, and charges related to the Company’s gross margin initiatives. These non-GAAP financial measures should not be considered a substitute for any measure derived in accordance with GAAP. These non-GAAP financial measures may also be inconsistent with the manner in which similar measures are derived or used by other companies. Management believes that the presentation of such non-GAAP financial measures, when considered in conjunction with the most directly comparable GAAP financial measures, provides additional useful information concerning the Company’s operations without these charges. The Company has provided reconciling information in the text of this press release and in the accompanying schedules.
About Callaway Golf
Through an unwavering commitment to innovation, Callaway Golf Company (NYSE:ELY) creates products and services designed to make every golfer a better golfer. Callaway Golf Company manufactures and sells golf clubs and golf balls, and sells golf accessories, under the Callaway Golf®, Odyssey®, Top-Flite®, and Ben Hogan® brands in more than 110 countries worldwide. For more information please visit www.callawaygolf.com or www.shop.callawaygolf.com.
| Callaway Golf Company | |||||||
| Consolidated Condensed Balance Sheets | |||||||
| (In thousands) | |||||||
| (Unaudited) | |||||||
| December 31, | |||||||
| 2007 | 2006 | ||||||
| ASSETS | |||||||
| Current assets: | |||||||
| Cash and cash equivalents | $ | 49,875 | $ | 46,362 | |||
| Accounts receivable, net | 112,064 | 118,133 | |||||
| Inventories, net | 253,001 | 265,110 | |||||
| Deferred taxes | 42,219 | 32,813 | |||||
| Income taxes receivable | 9,232 | 9,094 | |||||
| Other current assets | 30,190 | 21,688 | |||||
| Total current assets | 496,581 | 493,200 | |||||
| Property, plant and equipment, net | 128,036 | 131,224 | |||||
| Intangible assets, net | 173,045 | 175,159 | |||||
| Deferred taxes | 27,028 | 18,821 | |||||
| Other assets | 32,273 | 27,543 | |||||
| $ | 856,963 | $ | 845,947 | ||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||
| Current liabilities: | |||||||
| Accounts payable and accrued expenses | $ | 130,410 | $ | 111,360 | |||
| Accrued employee compensation and benefits | 44,245 | 18,731 | |||||
| Accrued warranty expense | 12,386 | 13,364 | |||||
| Credit facilities | 36,507 | 80,000 | |||||
| Total current liabilities | 223,548 | 223,455 | |||||
| Long-term liabilities | 63,207 | 43,388 | |||||
| Minority interest | 1,978 | 1,987 | |||||
| Shareholders' equity | 568,230 | 577,117 | |||||
| $ | 856,963 | $ | 845,947 | ||||
| Callaway Golf Company | ||||||||||||||||
| Statements of Operations | ||||||||||||||||
| (In thousands, except per share data) | ||||||||||||||||
| (Unaudited) | ||||||||||||||||
| Quarter Ended December 31, | ||||||||||||||||
| 2007 | 2006 | |||||||||||||||
| Net sales | $ | 174,418 | 100 | % | $ | 179,884 | 100 | % | ||||||||
| Cost of sales | 111,047 | 64 | % | 121,112 | 67 | % | ||||||||||
| Gross profit | 63,371 | 36 | % | 58,772 | 33 | % | ||||||||||
| Operating expenses: | ||||||||||||||||
| Selling | 59,951 | 34 | % | 52,404 | 29 | % | ||||||||||
| General and administrative | 23,921 | 14 | % | 20,483 | 11 | % | ||||||||||
| Research and development | 8,169 | 5 | % | 6,999 | 4 | % | ||||||||||
| Total operating expenses | 92,041 | 53 | % | 79,886 | 44 | % | ||||||||||
| Loss from operations | (28,670 | ) | -16 | % | (21,114 | ) | -12 | % | ||||||||
| Other income (expense), net | 98 | (28 | ) | |||||||||||||
| Loss before income taxes | (28,572 | ) | -16 | % | (21,142 | ) | -12 | % | ||||||||
| Income tax benefit | (12,415 | ) | (10,948 | ) | ||||||||||||
| Net loss | $ | (16,157 | ) | -9 | % | $ | (10,194 | ) | -6 | % | ||||||
| Loss per common share: | ||||||||||||||||
| Basic | ($0.25 | ) | ($0.15 | ) | ||||||||||||
| Diluted | ($0.25 | ) | ($0.15 | ) | ||||||||||||
| Weighted-average shares outstanding: | ||||||||||||||||
| Basic | 63,765 | 66,993 | ||||||||||||||
| Diluted | 63,765 | 66,993 | ||||||||||||||
| Year Ended December 31, | ||||||||||||||||
| 2007 | 2006 | |||||||||||||||
| Net sales | $ | 1,124,591 | 100 | % | $ | 1,017,907 | 100 | % | ||||||||
| Cost of sales | 631,368 | 56 | % | 619,832 | 61 | % | ||||||||||
| Gross profit | 493,223 | 44 | % | 398,075 | 39 | % | ||||||||||
| Operating expenses: | ||||||||||||||||
| Selling | 281,960 | 25 | % | 254,526 | 25 | % | ||||||||||
| General and administrative | 89,060 | 8 | % | 79,709 | 8 | % | ||||||||||
| Research and development | 32,020 | 3 | % | 26,785 | 3 | % | ||||||||||
| Total operating expenses | 403,040 | 36 | % | 361,020 | 35 | % | ||||||||||
| Income from operations | 90,183 | 8 | % | 37,055 | 4 | % | ||||||||||
| Other expense, net | (1,908 | ) | (2,057 | ) | ||||||||||||
| Income before income taxes | 88,275 | 8 | % | 34,998 | 3 | % | ||||||||||
| Income tax provision | 33,688 | 3 | % | 11,708 | ||||||||||||
| Net income | $ | 54,587 | 5 | % | $ | 23,290 | 2 | % | ||||||||
| Earnings per common share: | ||||||||||||||||
| Basic | $ | 0.82 | $ | 0.34 | ||||||||||||
| Diluted | $ | 0.81 | $ | 0.34 | ||||||||||||
| Weighted-average shares outstanding: | ||||||||||||||||
| Basic | 66,371 | 67,732 | ||||||||||||||
| Diluted | 67,484 | 68,503 | ||||||||||||||
| Callaway Golf Company | ||||||||||
| Consolidated Condensed Statements of Cash Flows | ||||||||||
| (In thousands) | ||||||||||
| (Unaudited) | ||||||||||
| Year Ended December 31, | ||||||||||
| 2007 | 2006 | |||||||||
| Cash flows from operating activities: | ||||||||||
| Net income | $ | 54,587 | $ | 23,290 | ||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||
| Depreciation and amortization | 35,326 | 32,274 | ||||||||
| Non-cash share-based compensation | 10,851 | 11,921 | ||||||||
| Deferred taxes | 904 | 673 | ||||||||
| Loss (gain) on disposal of assets | (4,731 | ) | 1,135 | |||||||
| Changes in assets and liabilities, net of effects from acquisitions | 55,045 | (52,312 | ) | |||||||
| Net cash provided by operating activities | 151,982 | 16,981 | ||||||||
| Cash flows from investing activities: | ||||||||||
| Capital expenditures | (32,930 | ) | (32,453 | ) | ||||||
| Proceeds from sale of capital assets | 11,460 | 469 | ||||||||
| Investment in golf related ventures | (3,698 | ) | (10,008 | ) | ||||||
| Business acquisitions, net of cash acquired | - | 374 | ||||||||
| Net cash used in investing activities | (25,168 | ) | (41,618 | ) | ||||||
| Cash flows from financing activities: | ||||||||||
| Issuance of common stock | 48,035 | 9,606 | ||||||||
| Dividends paid, net | (18,755 | ) | (19,212 | ) | ||||||
| Acquisition of treasury stock | (114,795 | ) | (52,872 | ) | ||||||
| Tax benefit from exercise of stock option | 6,031 | 884 | ||||||||
| Proceeds from (payments on) credit facilities, net | (43,493 | ) | 80,000 | |||||||
| Other financing activities | (9 | ) | 1,971 | |||||||
| Net cash (used in) provided by financing activities | (122,986 | ) | 20,377 | |||||||
| Effect of exchange rate changes on cash and cash equivalents | (315 | ) | 1,141 | |||||||
| Net increase (decrease) in cash and cash equivalents | 3,513 | (3,119 | ) | |||||||
| Cash and cash equivalents at beginning of period | 46,362 | 49,481 | ||||||||
| Cash and cash equivalents at end of period | $ | 49,875 | $ | 46,362 | ||||||
| Callaway Golf Company | |||||||||||||||||||||||||||||||||
| Consolidated Net Sales and Operating Segment Information | |||||||||||||||||||||||||||||||||
| (In thousands) | |||||||||||||||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||||||||||||||
| Net Sales by Product Category | |||||||||||||||||||||||||||||||||
| Quarter Ended | Year Ended | ||||||||||||||||||||||||||||||||
| December 31, | Growth/(Decline) | December 31, | Growth/(Decline) | ||||||||||||||||||||||||||||||
| 2007 | 2006 | Dollars | Percent | 2007 | 2006 | Dollars | Percent | ||||||||||||||||||||||||||
| Net sales: | Net sales: | ||||||||||||||||||||||||||||||||
| Woods | $ | 32,291 | $ | 39,321 | $ | (7,030 | ) | -18 | % | Woods | $ | 305,880 | $ | 266,478 | $ | 39,402 | 15 | % | |||||||||||||||
| Irons (1) | 45,811 | 45,286 | 525 | 1 | % | Irons | 309,594 | 287,960 | 21,634 | 8 | % | ||||||||||||||||||||||
| Putters | 20,542 | 17,569 | 2,973 | 17 | % | Putters | 109,068 | 102,714 | 6,354 | 6 | % | ||||||||||||||||||||||
| Golf balls | 37,724 | 47,250 | (9,526 | ) | -20 | % | Golf balls | 213,064 | 214,783 | (1,719 | ) | -1 | % | ||||||||||||||||||||
| Accessories and other (1) | 38,050 | 30,458 | 7,592 | 25 | % | Accessories and other | 186,985 | 145,972 | 41,013 | 28 | % | ||||||||||||||||||||||
| $ | 174,418 | $ | 179,884 | $ | (5,466 | ) | -3 | % | $ | 1,124,591 | $ | 1,017,907 | $ | 106,684 | 10 | % | |||||||||||||||||
| (1) Prior periods have been restated to reflect current period classification. | |||||||||||||||||||||||||||||||||
| Net Sales by Region | ||||||||||||||||||||||||||||||||
| Quarter Ended | Year Ended | |||||||||||||||||||||||||||||||
| December 31, | Growth/(Decline) | December 31, | Growth/(Decline) | |||||||||||||||||||||||||||||
| 2007 | 2006 | Dollars | Percent | 2007 | 2006 | Dollars | Percent | |||||||||||||||||||||||||
| Net sales: | Net sales: | |||||||||||||||||||||||||||||||
| United States | $ | 85,053 | $ | 95,772 | $ | (10,719 | ) | -11 | % | United States | $ | 597,569 | $ | 566,600 | $ | 30,969 | 5 | % | ||||||||||||||
| Europe | 26,046 | 26,264 | (218 | ) | -1 | % | Europe | 193,336 | 159,886 | 33,450 | 21 | % | ||||||||||||||||||||
| Japan | 23,207 | 22,313 | 894 | 4 | % | Japan | 120,148 | 105,705 | 14,443 | 14 | % | |||||||||||||||||||||
| Rest of Asia | 17,127 | 14,741 | 2,386 | 16 | % | Rest of Asia | 86,133 | 75,569 | 10,564 | 14 | % | |||||||||||||||||||||
| Other foreign countries | 22,985 | 20,794 | 2,191 | 11 | % | Other foreign countries | 127,405 | 110,147 | 17,258 | 16 | % | |||||||||||||||||||||
| $ | 174,418 | $ | 179,884 | $ | (5,466 | ) | -3 | % | $ | 1,124,591 | $ | 1,017,907 | $ | 106,684 | 10 | % | ||||||||||||||||
| Operating Segment Information | |||||||||||||||||||||||||||||||||||||||
| Quarter Ended | Year Ended | ||||||||||||||||||||||||||||||||||||||
| December 31, | Growth/(Decline) | December 31, | Growth/(Decline) | ||||||||||||||||||||||||||||||||||||
| 2007 | 2006 | Dollars | Percent | 2007 | 2006 | Dollars | Percent | ||||||||||||||||||||||||||||||||
| Net sales: | Net sales: | ||||||||||||||||||||||||||||||||||||||
| Golf clubs | $ | 136,694 | $ | 132,634 | $ | 4,060 | 3 | % | Golf clubs | $ | 911,527 | $ | 803,124 | $ | 108,403 | 13 | % | ||||||||||||||||||||||
| Golf balls | 37,724 | 47,250 | (9,526 | ) | -20 | % | Golf balls | 213,064 | 214,783 | (1,719 | ) | -1 | % | ||||||||||||||||||||||||||
| $ | 174,418 | $ | 179,884 | $ | (5,466 | ) | -3 | % | $ | 1,124,591 | $ | 1,017,907 | $ | 106,684 | 10 | % | |||||||||||||||||||||||
| Income before provision for income taxes: | |||||||||||||||||||||||||||||||||||||||
| Golf clubs | $ | (4,096 | ) | $ | (94 | ) | $ | (4,002 | ) | -4257 | % | Golf clubs | $ | 151,759 | $ | 101,837 | $ | 49,922 | 49 | % | |||||||||||||||||||
| Golf balls | (7,699 | ) | (4,615 | ) | (3,084 | ) | -67 | % | Golf balls | 902 | (6,396 | ) | 7,298 | 114 | % | ||||||||||||||||||||||||
| Reconciling items (2) | (16,777 | ) | (16,433 | ) | (344 | ) | -2 | % | Reconciling items (2) | (64,386 | ) | (60,443 | ) | (3,943 | ) | -7 | % | ||||||||||||||||||||||
| $ | (28,572 | ) | $ | (21,142 | ) | $ | (7,430 | ) | -35 | % | $ | 88,275 | $ | 34,998 | $ | 53,277 | 152 | % | |||||||||||||||||||||
| (2) Represents corporate general and administrative expenses and other income (expense) not utilized by management in determining segment profitability. | |||||||||||||||||||||||||||||||||||||||
| Callaway Golf Company | ||||||||||||||||||||||||||||||||
| Supplemental Financial Information | ||||||||||||||||||||||||||||||||
| (In thousands, except per share data) | ||||||||||||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||||||||||
| Quarter Ended December 31, | Quarter Ended December 31, | |||||||||||||||||||||||||||||||
| 2007 | 2006 | |||||||||||||||||||||||||||||||
| Pro Forma Callaway Golf | Gross Margin Improvement Initiatives | Total as Reported | Pro Forma Callaway Golf | Gross Margin Initiatives | Integration Charges |
Restructur- | Total as Reported | |||||||||||||||||||||||||
| Net sales | $ | 174,418 | $ | - | $ | 174,418 | $ | 179,884 | $ | - | $ | - | $ | - | $ | 179,884 | ||||||||||||||||
| Gross profit | 64,797 | (1,426 | ) | 63,371 | 60,496 | (1,504 | ) | (85 | ) | (135 | ) | 58,772 | ||||||||||||||||||||
| % of sales | 37 | % | n/a | 36 | % | 34 | % | n/a | n/a | n/a | 33 | % | ||||||||||||||||||||
| Operating expenses | 92,041 | - | 92,041 | 78,683 | - | (84 | ) | 1,287 | 79,886 | |||||||||||||||||||||||
| Loss from operations | (27,244 | ) | (1,426 | ) | (28,670 | ) | (18,187 | ) | (1,504 | ) | (1 | ) | (1,422 | ) | (21,114 | ) | ||||||||||||||||
| Other income (expense), net | 98 | - | 98 | (28 | ) | - | - | - | (28 | ) | ||||||||||||||||||||||
| Loss before income taxes | (27,146 | ) | (1,426 | ) | (28,572 | ) | (18,215 | ) | (1,504 | ) | (1 | ) | (1,422 | ) | (21,142 | ) | ||||||||||||||||
| Income tax benefit | (11,900 | ) | (515 | ) | (12,415 | ) | (9,685 | ) | (595 | ) | (64 | ) | (604 | ) | (10,948 | ) | ||||||||||||||||
| Net income (loss) | $ | (15,246 | ) | $ | (911 | ) | $ | (16,157 | ) | $ | (8,530 | ) | $ | (909 | ) | $ | 63 | $ | (818 | ) | $ | (10,194 | ) | |||||||||
| Diluted earnings (loss) per share: | $ | (0.24 | ) | $ | (0.01 | ) | $ | (0.25 | ) | $ | (0.13 | ) | $ | (0.01 | ) | $ | 0.00 | $ | (0.01 | ) | $ | (0.15 | ) | |||||||||
Weighted-average shares outstanding: | 63,765 | 63,765 | 63,765 | 66,993 | 66,993 | 66,993 | 66,993 | 66,993 | ||||||||||||||||||||||||
| Year Ended December 31, | Year Ended December 31, | |||||||||||||||||||||||||||||||
| 2007 | 2006 | |||||||||||||||||||||||||||||||
| Pro Forma Callaway Golf | Gross Margin Improvement Initiatives | Total as Reported | Pro Forma Callaway Golf |
Gross Margin Initia- |
Integra- |
Restructur- | Total as Reported | |||||||||||||||||||||||||
| Net sales | $ | 1,124,591 | $ | - | $ | 1,124,591 | $ | 1,017,907 | $ | - | $ | - | $ | - | $ | 1,017,907 | ||||||||||||||||
| Gross profit | 502,124 | (8,901 | ) | 493,223 | 403,670 | (1,853 | ) | (3,451 | ) | (291 | ) | 398,075 | ||||||||||||||||||||
| % of sales | 45 | % | n/a | 44 | % | 40 | % | n/a | n/a | n/a | 39 | % | ||||||||||||||||||||
| Operating expenses | 403,040 | - | 403,040 | 357,700 | - | 588 | 2,732 | 361,020 | ||||||||||||||||||||||||
| Income (loss) from operations | 99,084 | (8,901 | ) | 90,183 | 45,970 | (1,853 | ) | (4,039 | ) | (3,023 | ) | 37,055 | ||||||||||||||||||||
| Other expense, net | (1,908 | ) | - | (1,908 | ) | (2,057 | ) | - | - | - | (2,057 | ) | ||||||||||||||||||||
| Income (loss) before income taxes | 97,176 | (8,901 | ) | 88,275 | 43,913 | (1,853 | ) | (4,039 | ) | (3,023 | ) | 34,998 | ||||||||||||||||||||
| Income tax provision | 37,115 | (3,427 | ) | 33,688 | 15,140 | (713 | ) | (1,555 | ) | (1,164 | ) | 11,708 | ||||||||||||||||||||
| Net income (loss) | $ | 60,061 | $ | (5,474 | ) | $ | 54,587 | $ | 28,773 | $ | (1,140 | ) | $ | (2,484 | ) | $ | (1,859 | ) | $ | 23,290 | ||||||||||||
| Diluted earnings (loss) per share: | $ | 0.89 | $ | (0.08 | ) | $ | 0.81 | $ | 0.43 | $ | (0.02 | ) | $ | (0.04 | ) | $ | (0.03 | ) | $ | 0.34 | ||||||||||||
Weighted-average shares outstanding: | 67,484 | 67,484 | 67,484 | 68,503 | 68,503 | 68,503 | 68,503 | 68,503 | ||||||||||||||||||||||||
| Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA): | |||||||||||||||||||||||||||||||||
| 2007 Trailing Twelve Months EBITDA | 2006 Trailing Twelve Months EBITDA | ||||||||||||||||||||||||||||||||
| Quarter Ended | Quarter Ended | ||||||||||||||||||||||||||||||||
| March 31, | June 30, | September 30, | December 31, | March 31, | June 30, | September 30, | December 31, | ||||||||||||||||||||||||||
| 2007 | 2007 | 2007 | 2007 | Total | 2006 | 2006 | 2006 | 2006 | Total | ||||||||||||||||||||||||
| Net income (loss) | $ | 32,836 | $ | 36,639 | $ | 1,269 | $ | (16,157 | ) | $ | 54,587 | $ | 22,861 | $ | 22,539 | $ | (11,916 | ) | $ | (10,194 | ) | $ | 23,290 | ||||||||||
| Interest expense (income), net | 1,677 | 1,672 | 29 | (216 | ) | 3,162 | 533 | 1,522 | 1,132 | 905 | 4,092 | ||||||||||||||||||||||
| Income tax provision (benefit) | 21,682 | 23,591 | 830 | (12,415 | ) | 33,688 | 13,797 | 14,934 | (6,075 | ) | (10,948 | ) | 11,708 | ||||||||||||||||||||
| Depreciation and amortization expense | 9,009 | 8,591 | 9,864 | 7,862 | 35,326 | 7,290 | 7,935 | 8,736 | 8,313 | 32,274 | |||||||||||||||||||||||
| EBITDA | $ | 65,204 | $ | 70,493 | $ | 11,992 | $ | (20,926 | ) | $ | 126,763 | $ | 44,481 | $ | 46,930 | $ | (8,123 | ) | $ | (11,924 | ) | $ | 71,364 | ||||||||||
| Callaway Golf Product Launch Schedule | ||||||
| 2007 | 2008 | |||||
| Major First Half Launches: | ||||||
| Drivers: | Drivers: | |||||
| • Big Bertha 460 Drivers | Feb-2007 | • Hyper X Drivers | Jan-2008 | |||
| • FT-5 Drivers | Feb-2007 (Phased sell-in early Q2) | • Big Bertha Womens Drivers | Jan-2008 | |||
| • FT-I Drivers | Feb-2007 (Phased sell-in early Q2) | • FT-I (Low Trajectory) | Feb-2008 | |||
| • Hyper ERC Drivers (Japan Only) | Feb-2007 | • Legacy Driver (Asia Only) | Feb-2008 | |||
| • IMIX Drivers | Mar-2008 | |||||
| Fairway Woods: | Fairway Woods: | |||||
• X Hot Fwy Woods | Jan-2007 | • Big Bertha Womens Fwy Woods | Jan-2008 | |||
| • Big Bertha Fwy Woods | Feb-2007 | • Hyper X Fwy Woods | Jan-2008 | |||
| • Fusion Fwy Woods | Jan-2008 | |||||
| • FT-I Fwy Woods | Mar-2008 | |||||
| Hybrids: | Hybrids: | |||||
• X Hybrids | Jan-2007 | • FT Hybrids | Feb-2008 | |||
| Irons/Wedges: | Irons/Wedges: | |||||
• X-20 Irons | Jan-2007 | • Big Bertha Irons | Jan-2008 | |||
| • X Forged Irons | Mar-2007 | • Fusion Irons | Jan-2008 | |||
| • Big Bertha Womens Irons | Jan-2008 | |||||
| • X Forged Wedges | Jan-2008 | |||||
| • FI i-brid Irons | Apr-2008 | |||||
| Putters: | Putters: | |||||
| • Whitehot XG TwoBall SRT Putters | Feb-2007 | • Black Series Insert Putters | Jan-2008 | |||
| • Black Series Putters | Mar-2007 | • Sabertooth Putters | Mar-2008 | |||
| • Whitehot XG Marksman Putters | Apr-2007 | • Whitehot Tour Putters | Apr-2008 | |||
| Balls: | Balls: | |||||
| • Top-Flite D2 Balls | Jan-2007 | • Top-Flite Gamer Balls | Jan-2008 | |||
| • HX Hot Balls | Jan-2007 | • Top-Flite Freak Balls | Jan-2008 | |||
| • Big Bertha Balls | Jan-2007 | • Top-Flite XL '08 Balls | Jan-2008 | |||
| • Warbird Balls | Jan-2007 | • Top-Flite XL 5000 Balls | Jan-2008 | |||
| • Tour ix Balls | Feb-2008 | |||||
| • HX Hot Bite Balls | Feb-2008 | |||||
| • Legacy Balls (Asia Only) | Mar-2008 | |||||
| Other: | Other: | |||||
| • None | • GEM Sets | Jan-2008 | ||||
| Callaway Golf Product Launch Schedule | ||||||
| 2007 | 2008 | |||||
| Major Second Half Launches: | ||||||
| Drivers: | Drivers: | |||||
| • None | • No public information available | |||||
| Fairway Woods: | Fairway Woods: | |||||
| • None | • No public information available | |||||
| Hybrids: | Hybrids: | |||||
| • None | • No public information available | |||||
| Irons/Wedges: | Irons/Wedges: | |||||
| • Marxman Chipper | Oct-2007 | • No public information available | ||||
| Putters: | Putters: | |||||
| • Divine Line | Nov-2007 | • No public information available | ||||
| • Black Series Insert | Nov-2007 | |||||
| Balls: | Balls: | |||||
| • None | • Tour i Balls | Jul-2008 | ||||
| Other: | Other: | |||||
| • TF Packaged Sets | Dec-2007 | • No public information available | ||||
Contacts:
Brad Holiday
Patrick Burke
Michele
Szynal
(760) 931-1771
