CARLSBAD, Calif., April 23, 2014 /PRNewswire/ -- Callaway Golf
Company (NYSE:ELY) today announced its first quarter 2014 financial
results, including a 22% increase in sales driven by double digit
growth in woods (+33%), irons (+29%), and golf balls (+24%).
Additionally, income from operations increased 54% to $62 million and fully diluted earnings per share
increased 30% to $0.61, both driven
by the increased sales and improvements in gross margins of 160
basis points, which more than offset an increase of $13 million in operating expenses and a
$9 million decrease in other income.
The 2014 results benefitted from a $4
million decrease in pre-tax charges related to the cost
reduction initiatives that were completed in 2013. The
Company was able to achieve these significantly improved financial
results despite adverse changes in foreign currency rates, which
negatively impacted 2014 sales by $6
million, a $9 million dollar
decrease in other income/expense resulting primarily from adverse
changes in foreign currency contract values, and a $4 million increase in stock compensation expense
as a result of increases in the Company's stock price.
GAAP RESULTS
For the first quarter of 2014, the Company reported the
following results, as compared to the same period in 2013:
Dollars in
millions except per share amounts
|
First
Quarter
2014
|
% of
Sales
|
First
Quarter
2013
|
% of
Sales
|
Improvement/
(Decline)
|
Net Sales
|
$352
|
-
|
$288
|
-
|
$64
|
Gross
Profit
|
$165
|
47%
|
$130
|
45%
|
$35
|
Operating
Expenses
|
$103
|
29%
|
$90
|
31%
|
($13)
|
Operating
Income
|
$62
|
18%
|
$40
|
14%
|
$22
|
Pre-Tax
Income
|
$57
|
16%
|
$44
|
15%
|
$13
|
Income Tax
Provision
|
$1
|
-
|
$2
|
1%
|
$1
|
Net Income
|
$55
|
16%
|
$42
|
15%
|
$13
|
Earnings per share
(Diluted)
|
$0.61
|
-
|
$0.47
|
-
|
$0.14
|
The Company's net sales for the first quarter of 2014 increased
to $352 million or up 22%, as
compared to $288 million for the same
period in 2013. The strength of the Company's 2014 product
line more than offset the negative impact of foreign currency
movements. As compared to 2013, the Company's first quarter 2014
net sales were negatively impacted by $6
million due to adverse changes in foreign currency exchange
rates.
In addition to the increase in sales, gross margins improved 160
basis points compared to last year due to improved pricing and
sales mix, the completion of the cost-reduction initiatives in
2013, and productivity improvements resulting from several
initiatives implemented last year, all of which more than offset
the negative impact of foreign currency exchange rates and
increased product costs associated with additional technology in
several new products.
Operating expenses increased $13
million due to increases in marketing support for new
products launched during the quarter, an increase in stock
compensation expense associated with a 54% increase in the stock
price compared to March 31, 2013, and
planned incremental tour investment.
Other income/expense decreased by $9
million to other expense of $5
million in the first quarter of 2014 compared to other
income of $4 million in the first
quarter of 2013. This decrease is primarily attributable to
changes in foreign currency contract valuations. These contracts,
which are used to hedge the Company's exposure to changes in
foreign currency exchange rates, are required to be marked to
market at the end of each quarter and changes in the contract
values are reported in other income/expense. The Company recorded
contract valuation losses of $3
million in the first quarter of 2014 compared to
$8 million of contract valuation
gains in the first quarter of 2013.
As a result of the increase in net sales and improved gross
margins, which more than offset the increase in operating expenses
and foreign currency contract losses, earnings per share for the
first quarter of 2014 increased 30% to $0.61 compared to $0.47 in 2013.
"We are pleased with our results for the first quarter,"
commented Chip Brewer, President and
Chief Executive Officer. "These results reflect our continued brand
momentum and the success of the first stage of our multi-year
turnaround plan. In particular, our renewed focus on
more consumer-oriented products has resulted in double digit sales
increases in our woods, irons and golf ball product categories,
resulting in a 22% increase in net sales for the quarter and market
share gains in each of our key markets around the world."
"As evidenced by our recent results, we are now clearly seeing
the benefits of the many changes we have made at the Company as
part of our turnaround plan," continued Mr. Brewer. "We
believe that our turnaround plan is firmly on track and that we are
laying the proper foundation for a sustained recovery over the
long-term. With that said, in the short term, we are anticipating
very challenging market conditions for the second quarter and
possibly the balance of the year. The golf market has been
slow to open in many regions where we conduct business, including
our largest region, the United
States, which continues to have unfavorable weather in many
parts of the country. In addition, overall retail inventory
levels are high and we anticipate a heavy promotional environment
while the industry works through the excess inventory. We are
maintaining our full year guidance, but if the golf market does not
open shortly or the promotional activity is heavier than we
anticipate, we would expect to be at the low end of our earnings
guidance."
Business Outlook for 2014
Second Quarter
The Company has reported that it expects challenging market
conditions in the second quarter because of a late start to the
2014 golf season as well as high retail inventory levels and
anticipated promotional activity. Due to these conditions, as well
as the successful retail sell-in during the first quarter, the
Company estimates for the second quarter of 2014 (compared to the
second quarter of 2013) that its sales will be flat to down 5%
percent and that its earnings per share will be breakeven to
slightly profitable.
Full Year
The Company is maintaining its financial guidance for the full
year 2014, but notes that if the golf market does not open shortly
or if promotional activity is heavier than anticipated the Company
would expect to be at the low end of the earnings guidance.
The guidance previously provided is as follows:
- Net sales for the full year 2014 are estimated to range from
$880 to $900 million, compared to
$843 million in 2013. The Company
believes this growth rate will exceed the overall market and be
driven by brand momentum and market share gains.
- Gross margins are estimated to improve to approximately 41.7%,
compared to 37.3% in 2013. This improvement is expected to result
from the positive full year impact of the many supply chain
initiatives implemented as part of the turnaround strategy as well
as an estimated improved mix of full price product sales. Heavier
than anticipated promotional activity in the marketplace could
cause gross margins to be less than 41.7%.
- Operating expenses are estimated to be approximately
$345 million, compared to
$326 million in 2013. The increase in
operating expenses is due to a planned increase in investments in
tour and marketing, higher variable sales related expenses, and
modest cost of living increases.
- Pre-tax income is estimated to range from $15 to $19 million, with a corresponding tax
provision of approximately $6.5
million. Pre-tax income in 2013 was a loss of $13.3 million with a corresponding tax provision
of $5.6 million.
- Fully diluted earnings per share is estimated to range from
$0.12 to $0.16 per share on a base of
78.0 million shares, compared to a 2013 loss per share of
$0.31 on 72.8 million shares. If the
Company is successful in achieving these results, it would be the
Company's first net profit since 2008 and would represent a
significant milestone in the Company's turnaround story.
Conference Call and Webcast
The Company will be holding a conference call at 2:00 p.m. PDT today to discuss the Company's
financial results, outlook and business. 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. PDT on Wednesday, April 30, 2014. The replay may
be accessed through the Internet at www.callawaygolf.com.
Non-GAAP Information
The GAAP results contained in this press release and the
financial statement schedules attached to this press release have
been prepared in accordance with accounting principles generally
accepted in the United States
("GAAP"). To supplement the GAAP results, the Company has
provided certain non-GAAP financial information as follows:
Constant Currency Basis. The Company provided
certain information regarding the Company's net sales or projected
net sales on a "constant currency basis." This information
estimates the impact of changes in foreign currency rates on the
translation of the Company's current or projected future period net
sales as compared to the applicable comparable prior period.
This impact is derived by taking the current or projected local
currency results and translating them into U.S. Dollars based upon
the foreign currency exchange rates for the applicable comparable
prior period. It does not include any other effect of changes in
foreign currency rates on the Company's results or
business.
Excluded Items. The Company presented certain of
the Company's financial results excluding sales related to the
Top-Flite and Ben Hogan brands or the products that were
transitioned to a third party model, including apparel and footwear
in certain regions.
Adjusted EBITDA. The Company provided information about
its results, excluding interest, taxes, depreciation and
amortization expenses, and impairment charges ("Adjusted
EBITDA").
In addition, because the Company previously reported its 2013
results on a GAAP and Non-GAAP basis, the Company has included in
the schedules to this release a reconciliation of such information
for 2013. The non-GAAP information presented in this release and
related schedules should not be considered in isolation or as a
substitute for any measure derived in accordance with GAAP. The
non-GAAP information may also be inconsistent with the manner in
which similar measures are derived or used by other
companies. Management uses such non-GAAP information for
financial and operational decision-making purposes and as a means
to evaluate period over period comparisons and in forecasting the
Company's business going forward. Management believes that
the presentation of such non-GAAP information, when considered in
conjunction with the most directly comparable GAAP information,
provides additional useful comparative information for investors in
their assessment of the underlying performance of the Company's
business without regard to these items. The Company has provided
reconciling information in the attached schedules.
Forward-Looking Statements: Statements used in this press
release that relate to future plans, events, financial results,
performance or prospects, including statements relating to the
estimated 2014 second quarter or full year sales, sales growth,
gross margins, operating expenses, pre-tax income, and earnings per
share, as well as the Company's recovery, the creation of
shareholder value, future market share gains, market conditions,
improved financial performance and the level of promotional
activity in the marketplace, are forward-looking statements as
defined under the Private Securities Litigation Reform Act of
1995. These statements are based upon current information and
expectations. Accurately estimating the forward-looking
statements is based upon various risks and unknowns including
delays, difficulties, or increased costs in implementing the
Company's turnaround strategy; consumer acceptance of and demand
for the Company's products; the level of promotional activity in
the marketplace; unfavorable weather conditions, future consumer
discretionary purchasing activity, which can be significantly
adversely affected by unfavorable economic or market conditions;
and future changes in foreign currency exchange rates and the
degree of effectiveness of the Company's hedging programs. Actual
results may differ materially from those estimated or anticipated
as a result of these risks and unknowns or other risks and
uncertainties, including continued compliance with the terms of the
Company's credit facility; delays, difficulties or increased costs
in the supply of components needed to manufacture the Company's
products or in manufacturing the Company's products; 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,
the golf industry, and the Company's business, see the Company's
Annual Report on Form 10-K for the year ended December 31, 2013 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 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.
About Callaway Golf
Through an unwavering commitment to innovation, Callaway Golf
Company (NYSE:ELY) creates products 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® and Odyssey® brands worldwide. For more information
please visit www.callawaygolf.com.
Contacts:
|
Brad
Holiday
|
|
Patrick
Burke
|
|
(760)
931-1771
|
Logo - http://photos.prnewswire.com/prnh/20091203/CGLOGO
|
Callaway Golf
Company
|
Consolidated
Condensed Balance Sheets
|
(In
thousands)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31,
|
|
December
31,
|
|
|
|
2014
|
|
2013
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
Cash and cash
equivalents
|
$
23,557
|
|
$
36,793
|
|
|
Accounts receivable,
net
|
289,222
|
|
92,203
|
|
|
Inventories
|
246,197
|
|
263,492
|
|
|
Other current
assets
|
29,671
|
|
29,115
|
|
|
Total current assets
|
588,647
|
|
421,603
|
|
|
|
|
|
|
|
Property, plant and
equipment, net
|
68,735
|
|
71,341
|
|
Intangible assets,
net
|
118,030
|
|
118,113
|
|
Other
assets
|
52,117
|
|
52,806
|
|
|
Total assets
|
$ 827,529
|
|
$
663,863
|
|
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
Accounts payable and
accrued expenses
|
$ 153,600
|
|
$
157,120
|
|
|
Asset-based credit
facility
|
140,587
|
|
25,660
|
|
|
Accrued employee
compensation and benefits
|
29,633
|
|
31,585
|
|
|
Accrued warranty
expense
|
7,945
|
|
6,406
|
|
|
Income tax
liability
|
3,639
|
|
5,425
|
|
|
Total current liabilities
|
335,404
|
|
226,196
|
|
|
|
|
|
|
|
Long-term
liabilities
|
150,036
|
|
153,048
|
|
Shareholders'
equity
|
342,089
|
|
284,619
|
|
|
Total liabilities and shareholders' equity
|
$ 827,529
|
|
$
663,863
|
|
|
Callaway Golf
Company
|
Statements of
Operations
|
(In thousands, except
per share data)
|
(Unaudited)
|
|
|
|
|
|
Quarter
Ended
|
|
March 31,
|
|
2014
|
|
2013
|
|
|
|
|
Net sales
|
$351,874
|
|
$ 287,756
|
Cost of
sales
|
186,977
|
|
157,320
|
Gross
profit
|
164,897
|
|
130,436
|
Operating
expenses:
|
|
|
|
|
Selling
|
77,311
|
|
68,308
|
|
General and
administrative
|
17,996
|
|
14,587
|
|
Research and
development
|
7,913
|
|
7,413
|
|
|
Total operating
expenses
|
103,220
|
|
90,308
|
Income from
operations
|
61,677
|
|
40,128
|
Other (expense)
income, net
|
(4,891)
|
|
4,001
|
Income before income
taxes
|
56,786
|
|
44,129
|
Income tax
provision
|
1,474
|
|
2,469
|
Net
income
|
55,312
|
|
41,660
|
Dividends on
convertible preferred stock
|
-
|
|
783
|
Net income allocable
to common shareholders
|
$
55,312
|
|
$
40,877
|
|
|
|
|
Earnings per common
share:
|
|
|
|
|
Basic
|
$0.71
|
|
$0.58
|
|
Diluted
|
$0.61
|
|
$0.47
|
Weighted-average
common shares outstanding:
|
|
|
|
|
Basic
|
77,370
|
|
71,060
|
|
Diluted
|
93,172
|
|
92,197
|
|
Callaway Golf
Company
|
Consolidated
Condensed Statements of Cash Flows
|
(In
thousands)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter
Ended
|
|
|
|
|
March 31,
|
|
|
|
|
2014
|
|
2013
|
|
Cash flows from
operating activities:
|
|
|
|
|
|
Net income
|
$
55,312
|
|
$
41,660
|
|
|
Adjustments to
reconcile net income to net cash used in operating
activities:
|
|
|
|
|
|
|
Depreciation and
amortization
|
5,697
|
|
6,956
|
|
|
|
Deferred taxes,
net
|
14
|
|
332
|
|
|
|
Non-cash share-based
compensation
|
1,163
|
|
757
|
|
|
|
Gain on disposal of
long-lived assets
|
(282)
|
|
(247)
|
|
|
|
Discount amortization
on convertible notes
|
182
|
|
169
|
|
|
|
Changes in assets and
liabilities
|
(186,884)
|
|
(150,187)
|
|
|
Net cash used in
operating activities
|
(124,798)
|
|
(100,560)
|
|
|
|
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
Capital
expenditures
|
(4,048)
|
|
(3,145)
|
|
|
Proceeds from sale of
property, plant and equipment
|
44
|
|
3,651
|
|
|
Net cash (used in)
provided by investing activities
|
(4,004)
|
|
506
|
|
|
|
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
Proceeds from credit
facilities, net
|
114,927
|
|
79,489
|
|
|
Exercise of stock
options
|
1,591
|
|
-
|
|
|
Equity issuance
cost
|
5
|
|
-
|
|
|
Dividends paid,
net
|
(774)
|
|
(1,495)
|
|
|
Net cash provided by
financing activities
|
115,749
|
|
77,994
|
|
|
|
|
|
|
|
|
Effect of exchange
rate changes on cash
|
(183)
|
|
(1,871)
|
|
Net decrease in cash
and cash equivalents
|
(13,236)
|
|
(23,931)
|
|
Cash and cash
equivalents at beginning of period
|
36,793
|
|
52,003
|
|
Cash and cash
equivalents at end of period
|
$
23,557
|
|
$
28,072
|
|
|
|
|
|
|
|
|
Callaway Golf
Company
|
Consolidated Net
Sales and Operating Segment Information and Non-GAAP
Reconciliation
|
(In
thousands)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Sales by Product
Category
|
|
|
|
|
|
|
Quarter
Ended
|
|
|
|
|
|
|
|
|
|
|
March 31,
|
|
Growth/(Decline)
|
|
|
|
|
|
|
|
|
2014
|
|
2013
|
|
Dollars
|
|
Percent
|
|
|
|
|
|
|
|
|
|
Net sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Woods
|
$ 129,714
|
|
$
97,866
|
|
$ 31,848
|
|
33%
|
|
|
|
|
|
|
|
|
|
|
Irons
|
73,246
|
|
56,646
|
|
16,600
|
|
29%
|
|
|
|
|
|
|
|
|
|
|
Putters
|
31,835
|
|
32,127
|
|
(292)
|
|
-1%
|
|
|
|
|
|
|
|
|
|
|
Accessories and
other
|
64,369
|
|
58,731
|
|
5,638
|
|
10%
|
|
|
|
|
|
|
|
|
|
|
Golf balls
|
52,710
|
|
42,386
|
|
10,324
|
|
24%
|
|
|
|
|
|
|
|
|
|
|
|
$ 351,874
|
|
$ 287,756
|
|
$ 64,118
|
|
22%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Sales by
Region
|
|
|
|
|
|
|
|
Quarter
Ended
March 31,
|
|
Growth
|
|
Constant Currency
Growth vs.
2013(1)
|
|
Constant Currency
Excluding
Businesses
Sold or
Transitioned
Growth vs. 2013
(2)
|
|
|
|
|
|
|
2014
|
|
2013
|
|
Dollars
|
|
Percent
|
|
Percent
|
|
Percent
|
|
|
|
|
|
Net sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
United
States
|
$ 184,691
|
|
$ 159,782
|
|
$ 24,909
|
|
16%
|
|
16%
|
|
16%
|
|
|
|
|
|
|
Europe
|
51,173
|
|
38,296
|
|
12,877
|
|
34%
|
|
25%
|
|
30%
|
|
|
|
|
|
|
Japan
|
60,001
|
|
44,126
|
|
15,875
|
|
36%
|
|
51%
|
|
51%
|
|
|
|
|
|
|
Rest of
Asia
|
26,997
|
|
20,098
|
|
6,899
|
|
34%
|
|
34%
|
|
36%
|
|
|
|
|
|
|
Other foreign
countries
|
29,012
|
|
25,454
|
|
3,558
|
|
14%
|
|
26%
|
|
26%
|
|
|
|
|
|
|
|
$ 351,874
|
|
$ 287,756
|
|
$ 64,118
|
|
22%
|
|
25%
|
|
26%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)Calculated by applying 2013 exchange
rates to 2014 reported sales in regions outside the U.S.
|
(2)Calculated by applying 2013 exchange
rates to 2014 reported sales in regions outside the U.S. and
excludes sales related to businesses sold or licensed.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Segment
Information
|
|
|
|
|
|
Quarter
Ended
March 31,
|
|
Growth/(Decline)
|
|
|
|
|
|
2014
|
|
2013
(1)
|
|
Dollars
|
|
Percent
|
|
|
|
|
|
|
|
|
|
Net sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Golf
clubs
|
$ 299,164
|
|
$ 245,369
|
|
$ 53,795
|
|
22%
|
|
|
|
|
|
|
|
|
|
|
Golf
balls
|
52,710
|
|
42,387
|
|
10,323
|
|
24%
|
|
|
|
|
|
|
|
|
|
|
|
$ 351,874
|
|
$ 287,756
|
|
$ 64,118
|
|
22%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income
taxes:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Golf clubs
(2)
|
$
62,737
|
|
$
44,757
|
|
$ 17,980
|
|
40%
|
|
|
|
|
|
|
|
|
|
|
Golf balls
(2)
|
11,729
|
|
5,417
|
|
6,312
|
|
117%
|
|
|
|
|
|
|
|
|
|
|
Reconciling items
(3)
|
(17,680)
|
|
(6,045)
|
|
(11,635)
|
|
-192%
|
|
|
|
|
|
|
|
|
|
|
|
$
56,786
|
|
$
44,129
|
|
$ 12,657
|
|
29%
|
|
|
|
|
|
|
|
|
|
(1)The
prior year amounts have been restated to reflect the company's
current year allocation methodology related to freight revenue and
costs, certain discounts and other reserves not specific to a
product type.
|
(2)In
connection with the 2012 Cost Reduction Initiatives, the Company's
golf club and golf ball operating segments absorbed pre-tax charges
of $2.7 million and $0.1 million, respectively, during the quarter
ended March 31, 2013. There were no costs associated with the 2012
Cost Reduction Initiatives recorded in the quarter ended March 31,
2014.
|
(3)Represents corporate general and
administrative expenses and other income (expense) not utilized by
management in determining segment profitability.
|
|
Callaway Golf
Company
|
Supplemental
Financial Information - Non-GAAP Information and
Reconciliation
|
(In thousands, except
per share data)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP
Reconciliation to GAAP Reported Results:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended March
31,
|
|
|
|
|
|
|
|
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Callaway
Golf (1)
|
|
Cost Reduction
Initiatives(1) (3)
|
|
Non-Cash Tax
Adjustment(2)
|
|
Total as
Reported
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
|
$
287,756
|
|
$
-
|
|
$
-
|
|
$
287,756
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
|
|
132,718
|
|
(2,282)
|
|
-
|
|
130,436
|
|
|
|
|
|
|
|
|
|
|
|
|
% of sales
|
|
|
46%
|
|
1%
|
|
n/a
|
|
45%
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses
|
|
|
89,081
|
|
1,227
|
|
-
|
|
90,308
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (expense) from
operations
|
|
|
43,637
|
|
(3,509)
|
|
-
|
|
40,128
|
|
|
|
|
|
|
|
|
|
|
|
|
Other (expense)
income, net
|
|
|
4,001
|
|
-
|
|
-
|
|
4,001
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before
income taxes
|
|
|
47,638
|
|
(3,509)
|
|
-
|
|
44,129
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax provision
(benefit)
|
|
|
18,341
|
|
(1,351)
|
|
(14,521)
|
|
2,469
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
|
29,297
|
|
(2,158)
|
|
14,521
|
|
41,660
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends on
convertible preferred stock
|
|
|
783
|
|
-
|
|
-
|
|
783
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
allocable to common shareholders
|
|
$
28,514
|
|
$
(2,158)
|
|
$
14,521
|
|
$
40,877
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted loss per
share:
|
|
|
$
0.33
|
|
$
(0.02)
|
|
$
0.16
|
|
$
0.47
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average
shares
outstanding:
|
|
92,197
|
|
92,197
|
|
92,197
|
|
92,197
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)For
comparative purposes, the Company applied an annualized statutory
tax rate of 38.5% to derive non-GAAP results.
|
|
|
|
|
|
|
|
(2)Impact
of applying statutory tax rate of 38.5% to non-GAAP
results.
|
|
|
|
|
|
|
|
|
|
|
|
|
(3)Includes costs associated with the
reorganization of the Company's golf ball manufacturing supply
chain, Canada warehouse/office move, workforce reductions and costs
related to transitioning to a third party model for the European
apparel business.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2014 Trailing Twelve
Month Adjusted EBITDA
|
|
|
|
2013 Trailing Twelve
Month Adjusted EBITDA
|
Adjusted
EBITDA:
|
Quarter
Ended
|
|
|
|
Quarter
Ended
|
|
June 30,
|
|
September
30,
|
|
December
31,
|
|
March 31,
|
|
|
|
|
|
June 30,
|
|
September
30,
|
|
December
31,
|
|
March 31,
|
|
|
|
2013
|
|
2013
|
|
2013
|
|
2014
|
|
Total
|
|
|
|
2012
|
|
2012
|
|
2012
|
|
2013
|
|
Total
|
Net income
(loss)
|
$
10,071
|
|
$
(21,153)
|
|
$
(49,499)
|
|
$
55,312
|
|
$
(5,269)
|
|
|
|
$
2,799
|
|
$
(86,798)
|
|
$
(70,749)
|
|
$
41,660
|
|
$
(113,088)
|
Interest expense,
net
|
2,470
|
|
1,975
|
|
1,963
|
|
2,648
|
|
9,056
|
|
|
|
884
|
|
1,343
|
|
1,919
|
|
2,157
|
|
6,303
|
Income tax
provision
|
1,435
|
|
1,037
|
|
658
|
|
1,474
|
|
4,604
|
|
|
|
2,196
|
|
750
|
|
2,246
|
|
2,469
|
|
7,661
|
Depreciation and
amortization expense
|
6,472
|
|
6,265
|
|
5,850
|
|
5,697
|
|
24,284
|
|
|
|
9,489
|
|
8,342
|
|
7,835
|
|
6,956
|
|
32,622
|
Impairment
charges
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
|
-
|
|
17,056
|
|
4,877
|
|
-
|
|
21,933
|
Adjusted
EBITDA
|
$
20,448
|
|
$
(11,876)
|
|
$
(41,028)
|
|
$
65,131
|
|
$
32,675
|
|
|
|
$
15,368
|
|
$
(59,307)
|
|
$
(53,872)
|
|
$
53,242
|
|
$
(44,569)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SOURCE Callaway Golf Company