CARLSBAD, Calif., July 29, 2015 /PRNewswire/ -- Callaway Golf
Company (NYSE:ELY) today announced its second quarter financial
results and revised its full year financial outlook. For the second
quarter, despite headwinds from unfavorable changes in foreign
currency exchange rates and softer than anticipated international
market conditions (particularly in Asia), the Company achieved second quarter net
sales essentially flat with 2014 but growing over 6% on a constant
currency basis. Due to significantly improved gross margins, the
Company also increased second quarter 2015 operating income by 72%
compared to the same period in 2014 and increased earnings per
share by $0.11 to $0.15. As a result
of the more challenging international market conditions and the
higher than anticipated profitability, the Company revised its full
year net sales estimates to $830 - $840
million (as compared to its prior estimate of $840 - $860 million) and increased its earnings
outlook to $0.01 - $0.06 earnings per
share (as compared to its prior estimate of a loss of ($0.03) to earnings of $0.04 per share).
"Overall, we are pleased with our performance in the second
quarter and the progress we have made turning our business around,"
commented Chip Brewer, President and
Chief Executive Officer of Callaway Golf Company. "Foreign currency
exchange rates and softer than expected market conditions in
Asia have proved challenging this
year; however, our brand momentum and market shares have continued
to increase, we have made substantial progress improving our
profitability, and our product pipeline remains robust. Looking
forward, despite a continued rebalancing of retail inventory in
Asia, we are encouraged by the
overall fundamentals of the golf industry with less overall
promotional activity, more reasonable production and inventory
levels, and a general stabilization of participation in golf."
Summary of Second Quarter 2015 Financial Results
GAAP and Constant Currency Results
In addition to the Company's results prepared in accordance
with generally accepted accounting principles in the United States ("GAAP"), the Company also
provided additional information concerning its results on a
non-GAAP basis. This non-GAAP information presents the Company's
financial results on a constant currency basis, which is calculated
by excluding the offsetting hedging gains and losses recorded
during the period and applying the prior period exchange rates to
the adjusted current period local currency results. The manner in
which this constant currency information is derived is discussed in
more detail toward the end of this release, and the Company has
provided in the tables to this release a reconciliation of the
non-GAAP information to the most directly comparable GAAP
information.
For the second quarter of 2015, the Company announced the
following GAAP and constant currency financial results, as compared
to the same period in 2014 (in millions, except eps):
|
GAAP RESULTS
|
|
NON-GAAP
INFORMATION
|
|
2015 GAAP
|
2014 GAAP
|
Change
|
|
2015 Constant
Currency
|
2014 GAAP
|
Change
|
|
Net Sales
|
$231
|
$232
|
($1)
|
|
$247
|
$232
|
$15
|
|
Gross
Profit/
|
$102
|
$91
|
$11
|
|
$117
|
$91
|
$26
|
|
% of Sales
|
44%
|
39%
|
500 b.p.
|
|
48%
|
39%
|
900 b.p.
|
|
Operating
Expenses
|
$83
|
$80
|
$3
|
|
$86
|
$80
|
$6
|
|
Pre-Tax
Income
|
$15
|
$5
|
$10
|
|
$29
|
$5
|
$24
|
|
EPS
|
$0.15
|
$0.04
|
$0.11
|
|
$0.30
|
$0.04
|
$0.26
|
The Company's $231 million in net
sales for the second quarter of 2015 were essentially flat with net
sales of $232 million for the same
period in 2014 despite unfavorable changes in foreign currency
rates and softer than anticipated market conditions in the
international markets, particularly Asia. Unfavorable changes
in foreign currency exchange rates negatively affected 2015 second
quarter net sales by approximately $16
million. On a constant currency basis, net sales for
the second quarter of 2015 grew by over 6% compared to 2014.
The Company's earnings per share for the second quarter of 2015
increased by $0.11 per share to
$0.15 compared to $0.04 for the same period in 2014. Despite
flat sales, the Company was able to significantly improve its
earnings as a result of a 500 basis point improvement in gross
margins due to more favorable product pricing and mix of higher
margin products as well as improved operational efficiencies. This
significant improvement in gross margins more than offset a slight
increase in operating expenses. On a constant currency basis, the
Company's earnings per share would have been $0.30. Compared to 2014, the Company's earnings
per share for the second quarter of 2015 were also adversely
affected by an increase of over 16 million common equivalent shares
in the earnings per share calculation.
Summary of First Half 2015 Financial Results
GAAP and Constant Currency Results
As noted above, in addition to the Company's results prepared
in accordance with GAAP, the Company also provided additional
information concerning its results on a non-GAAP basis. This
non-GAAP information presents the Company's financial results on a
constant currency basis, which is calculated by excluding the
offsetting hedging gains and losses recorded during the period and
applying the prior period exchange rates to the adjusted current
period local currency results. The manner in which this constant
currency information is derived is discussed in more detail toward
the end of this release and the Company has provided in the tables
to this release a reconciliation of the non-GAAP information to the
most directly comparable GAAP information.
For the first half of 2015, the Company announced the following
GAAP and constant currency financial results, as compared to the
same period in 2014 (in millions, except eps):
|
GAAP
RESULTS
|
|
NON-GAAP
INFORMATION
|
|
2015 GAAP
|
2014 GAAP
|
Change
|
|
2015 Constant
Currency
|
2014 GAAP
|
Change
|
|
Net Sales
|
$515
|
$584
|
($69)
|
|
$548
|
$584
|
($36)
|
|
Gross
Profit/
|
$229
|
$256
|
($27)
|
|
$260
|
$256
|
$4
|
|
% of Sales
|
44%
|
44%
|
----
|
|
48%
|
44%
|
400 b.p.
|
|
Operating
Expenses
|
$173
|
$183
|
($10)
|
|
$180
|
$183
|
($3)
|
|
Pre-Tax
Income
|
$52
|
$62
|
($10)
|
|
$77
|
$62
|
$15
|
|
EPS
|
$0.54
|
$0.66
|
($0.12)
|
|
$0.80
|
$0.66
|
$0.14
|
For the first half of 2015, the Company's net sales decreased
12% (or 6% on a constant currency basis), compared to the same
period in 2014. The decrease was largely the result of
unfavorable changes in foreign currency exchange rates, a strategic
shift in product launch timing which adversely affected first
quarter net sales, and softer than expected market conditions in
the Company's international markets, particularly in Asia.
The effects of the strategic shift in launch timing should smooth
out as the year progresses.
The Company's earnings per share for the first half of 2015
decreased $0.12 compared to the first
half of 2014 primarily due to unfavorable changes in foreign
currency exchange rates, which adversely affected 2015 first half
earnings per share by $0.26. On
a constant currency basis, the Company's first half earnings per
share increased 21% to $0.80 due to a
400 basis point constant currency improvement in gross margins and
a decrease in operating expenses.
Business Outlook for 2015
Given the softer than anticipated market conditions in the
Company's international markets and the Company's significantly
improved gross margins, the Company is revising its full year sales
estimates and increasing its full year earnings estimates. Given
the significant effects that foreign currencies will have on the
Company's GAAP results in 2015, the Company has provided guidance
on both a GAAP and constant currency basis. The GAAP guidance is
generally based upon a blend of current foreign currency exchange
rates and the exchange rates at which the Company entered into
hedging transactions. The Company's hedging program will mitigate
but not eliminate the effects of future foreign currency rate
changes and therefore any such future changes will affect the
Company's GAAP guidance. The constant currency estimates are
derived by taking the estimated 2015 local currency results and
translating them into U.S. Dollars based upon the foreign currency
exchange rates for the comparable period in 2014.
Full Year
The Company currently estimates the following full year results
for 2015:
|
2015 GAAP
Estimate
|
2015 Constant
Currency Estimate
|
2014
Actual
|
|
Net Sales
|
$830 - $840
million
|
$880 - $890
million
|
$887
million
|
The decline in the Company's estimates for full year net sales
from its previous GAAP guidance of $840 -
$860 million is due to softer than anticipated international
market conditions. A further strengthening of the U.S. Dollar for
the balance of the year would also negatively affect the Company's
GAAP sales estimates.
|
2015 GAAP
Estimate
|
2015 Constant
Currency Estimate
|
2014
Actual
|
|
Gross
Margins
|
42.0%
|
45.0%
|
40%
|
The Company estimates that its 2015 GAAP gross margins as a
percent of sales will improve approximately 100 basis points from
its previous guidance of 41.0% due to a stronger sales mix and
continued operational improvements.
|
2015 GAAP
Estimate
|
2015 Constant
Currency Estimate
|
2014
Actual
|
|
Operating
Expenses
|
$335
million
|
$345
million
|
$327
million
|
The Company estimates that its 2015 GAAP operating expenses will
remain consistent with its previous guidance, despite the decrease
in first half operating expenses. Much of the first half decrease
reflects a timing shift of marketing expense to support second half
product launches and incremental marketing support for the Chrome
Soft golf balls.
|
2015 GAAP
Estimate
|
2015 Constant
Currency Estimate
|
2014
Actual
|
|
Pre-Tax
Income
|
$7 - $12
million
|
$45 - $50
million
|
$22
million
|
The Company estimates that its 2015 Pre-tax income will increase
from its previous guidance of $4 - $11
million due to improved gross margins more than offsetting
the lower net sales estimates.
|
2015 GAAP
Estimate
|
2015 Constant
Currency Estimate
|
2014
Actual
|
|
Earnings Per
Share
|
$0.01 -
$0.06
|
$0.45 -
$0.50
|
$0.20
|
The Company estimates that its fully diluted earnings per share
will increase from its previous guidance of ($0.03) - $0.04 due to improved gross margins
more than offsetting the softer than expected international market
conditions. The Company's 2015 earnings per share estimates assume
a base of 80 million shares as compared to 78 million shares in
2014.
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, August 5, 2015. 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 financial results or projected
financial results 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 financial results as compared to the applicable
comparable period. This impact is derived by excluding the
offsetting hedging gains and losses recorded during the applicable
period and taking the adjusted current or projected local currency
results and translating them into U.S. Dollars based upon the
foreign currency exchange rates for the applicable comparable
period. It does not include any other effect of changes in foreign
currency rates on the Company's results or
business.
Adjusted EBITDA. The Company provided information about
its results, excluding interest, taxes, depreciation and
amortization expenses ("EBITDA").
In addition, the Company has included in the schedules to this
release a reconciliation of certain non-GAAP information to the
most directly correlated GAAP information. 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 2015 net sales, gross margins, operating expenses,
pre-tax income, and earnings per share (or related share count), as
well as the Company's recovery, and ability to maximize current
conditions or to leverage and capitalize on improved conditions,
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; future consumer
discretionary purchasing activity, which can be significantly
adversely affected by unfavorable economic or market conditions;
future retailer purchasing activity, which can be significantly
negatively affected by adverse industry conditions and overall
retail inventory levels; unfavorable weather conditions and
seasonality; the ability to manage international business risks;
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, 2014 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:
|
Robert
Julian
|
|
Patrick
Burke
|
|
(760)
931-1771
|
|
CALLAWAY GOLF
COMPANY
|
|
CONSOLIDATED
CONDENSED BALANCE SHEETS
|
|
(Unaudited)
|
|
(In
thousands)
|
|
|
|
|
|
June 30,
|
|
December
31,
|
|
2015
|
|
2014
|
|
ASSETS
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
$ 26,714
|
|
$ 37,635
|
|
Accounts receivable,
net
|
220,401
|
|
109,848
|
|
Inventories
|
171,396
|
|
207,229
|
|
Other current
assets
|
28,271
|
|
29,321
|
|
Total current
assets
|
446,782
|
|
384,033
|
|
|
|
|
|
Property, plant and
equipment, net
|
54,701
|
|
58,093
|
|
Intangible assets,
net
|
116,018
|
|
116,654
|
|
Investment in
golf-related ventures
|
52,376
|
|
50,677
|
|
Other
assets
|
12,679
|
|
15,354
|
|
Total
assets
|
$ 682,556
|
|
$ 624,811
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts payable and
accrued expenses
|
$ 112,064
|
|
$ 123,251
|
|
Accrued employee
compensation and benefits
|
27,259
|
|
37,386
|
|
Asset-based credit
facility
|
42,599
|
|
15,235
|
|
Accrued warranty
expense
|
6,447
|
|
5,607
|
|
Income tax
liability
|
1,913
|
|
2,623
|
|
Deferred taxes,
net
|
25
|
|
26
|
|
Total current
liabilities
|
190,307
|
|
184,128
|
|
|
|
|
|
Long-term
liabilities:
|
148,909
|
|
149,149
|
|
Total shareholders'
equity
|
343,340
|
|
291,534
|
|
Total liabilities and
shareholders' equity
|
$ 682,556
|
|
$ 624,811
|
|
CALLAWAY GOLF
COMPANY
|
|
CONSOLIDATED
CONDENSED STATEMENTS OF OPERATIONS
|
|
(Unaudited)
|
|
(In thousands, except
per share data)
|
|
|
|
|
|
Three Months
Ended
June 30,
|
|
2015
|
|
2014
|
|
Net sales
|
$ 230,504
|
|
$ 231,893
|
|
Cost of
sales
|
128,807
|
|
141,087
|
|
Gross
profit
|
101,697
|
|
90,806
|
|
Operating
expenses:
|
|
|
|
|
Selling
|
59,966
|
|
60,604
|
|
General and
administrative
|
15,536
|
|
12,545
|
|
Research and
development
|
7,603
|
|
6,846
|
|
Total operating
expenses
|
83,105
|
|
79,995
|
|
Income from
operations
|
18,592
|
|
10,811
|
|
Other income
(expense), net
|
(3,957)
|
|
(5,569)
|
|
Income before income
taxes
|
14,635
|
|
5,242
|
|
Income tax
provision
|
1,817
|
|
1,873
|
|
Net income
|
$ 12,818
|
|
$ 3,369
|
|
|
|
|
|
Earnings per common
share:
|
|
|
|
|
Basic
|
$ 0.16
|
|
$ 0.04
|
|
Diluted
|
$ 0.15
|
|
$ 0.04
|
|
|
|
|
|
Weighted-average
common shares outstanding:
|
|
|
|
|
Basic
|
78,395
|
|
77,633
|
|
Diluted
|
94,913
|
|
78,560
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months
Ended
June 30,
|
|
2015
|
|
2014
|
|
Net sales
|
$ 514,683
|
|
$ 583,767
|
|
Cost of
sales
|
285,720
|
|
328,064
|
|
Gross
profit
|
228,963
|
|
255,703
|
|
Operating
expenses:
|
|
|
|
|
Selling
|
126,285
|
|
137,915
|
|
General and
administrative
|
31,635
|
|
30,541
|
|
Research and
development
|
15,519
|
|
14,759
|
|
Total operating
expenses
|
173,439
|
|
183,215
|
|
Income from
operations
|
55,524
|
|
72,488
|
|
Other income
(expense), net
|
(3,432)
|
|
(10,460)
|
|
Income before income
taxes
|
52,092
|
|
62,028
|
|
Income tax
provision
|
3,455
|
|
3,347
|
|
Net income
|
$ 48,637
|
|
$ 58,681
|
|
|
|
|
|
Earnings per common
share:
|
|
|
|
|
Basic
|
$ 0.62
|
|
$ 0.76
|
|
Diluted
|
$ 0.54
|
|
$ 0.66
|
|
|
|
|
|
Weighted-average
common shares outstanding:
|
|
|
|
|
Basic
|
78,076
|
|
77,502
|
|
Diluted
|
94,406
|
|
93,367
|
|
CALLAWAY GOLF
COMPANY
|
|
CONSOLIDATED
CONDENSED STATEMENTS OF CASH FLOWS
|
|
(Unaudited)
|
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
Six Months
Ended
June 30,
|
|
2015
|
|
2014
|
|
Cash flows from
operating activities:
|
|
|
|
|
Net income
|
$ 48,637
|
|
$ 58,681
|
|
Adjustments to
reconcile net income to net cash used in operating
activities:
|
|
|
|
Depreciation and
amortization
|
9,157
|
|
11,157
|
|
Deferred taxes,
net
|
145
|
|
172
|
|
Share-based
compensation
|
3,561
|
|
2,539
|
|
|
|
|
|
Gain on disposal of
long-lived assets and deferred gain amortization
|
(510)
|
|
(644)
|
|
Debt discount
amortization on convertible notes
|
395
|
|
365
|
|
Changes in assets and
liabilities
|
(94,052)
|
|
(103,605)
|
|
Net cash used in
operating activities
|
(32,667)
|
|
(31,335)
|
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
|
Capital
expenditures
|
(5,912)
|
|
(6,238)
|
|
Proceeds from sale of
property, plant and equipment
|
2
|
|
177
|
|
Investment in
golf-related ventures
|
-
|
|
(4,522)
|
|
Net cash used in
investing activities
|
(5,910)
|
|
(10,583)
|
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
|
Proceeds from credit
facilities, net
|
27,364
|
|
34,536
|
|
Exercise of stock
options
|
5,330
|
|
2,005
|
|
Dividends
paid
|
(1,565)
|
|
(1,551)
|
|
Acquisition of
treasury stock
|
(1,915)
|
|
-
|
|
Credit facility
amendment costs
|
-
|
|
(584)
|
|
Equity issuance
costs
|
-
|
|
(10)
|
|
Net cash provided by
financing activities
|
29,214
|
|
34,396
|
|
|
|
|
|
Effect of exchange
rate changes on cash and cash equivalents
|
(1,558)
|
|
(286)
|
|
Net decrease in cash
and cash equivalents
|
(10,921)
|
|
(7,808)
|
|
Cash and cash
equivalents at beginning of period
|
37,635
|
|
36,793
|
|
Cash and cash
equivalents at end of period
|
$ 26,714
|
|
$ 28,985
|
|
CALLAWAY GOLF
COMPANY
|
|
Consolidated Net
Sales and Operating Segment Information and Non-GAAP
Reconciliation
|
|
(Unaudited)
|
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Sales by Product
Category
|
|
Net Sales by Product
Category
|
|
Three Months
Ended
June 30,
|
|
Growth/(Decline)
|
|
Non-GAAP
Constant Currency
vs. 2014(2)
|
|
Six Months
Ended
June 30,
|
|
Growth/(Decline)
|
|
Non-GAAP
Constant Currency
vs. 2014(2)
|
|
2015
|
|
2014(1)
|
|
Dollars
|
|
Percent
|
|
Percent
|
|
2015
|
|
2014(1)
|
|
Dollars
|
|
Percent
|
|
Percent
|
|
Net sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Woods
|
$ 49,387
|
|
$ 53,059
|
|
$ (3,672)
|
|
(7)%
|
|
1 %
|
|
$138,870
|
|
$181,492
|
|
$(42,622)
|
|
(23)%
|
|
(18)%
|
|
Irons
|
59,268
|
|
52,877
|
|
6,391
|
|
12 %
|
|
20 %
|
|
120,813
|
|
125,519
|
|
(4,706)
|
|
(4)%
|
|
2 %
|
|
Putters
|
24,421
|
|
27,063
|
|
(2,642)
|
|
(10)%
|
|
(2)%
|
|
55,366
|
|
58,625
|
|
(3,259)
|
|
(6)%
|
|
1 %
|
|
Gear/Accessories/Other
|
56,540
|
|
59,931
|
|
(3,391)
|
|
(6)%
|
|
1 %
|
|
115,723
|
|
126,833
|
|
(11,110)
|
|
(9)%
|
|
(3)%
|
|
Golf
balls
|
40,888
|
|
38,963
|
|
1,925
|
|
5 %
|
|
11 %
|
|
83,911
|
|
91,298
|
|
(7,387)
|
|
(8)%
|
|
(4)%
|
|
$230,504
|
|
$231,893
|
|
$ (1,389)
|
|
(1)%
|
|
7 %
|
|
$514,683
|
|
$583,767
|
|
$(69,084)
|
|
(12)%
|
|
(6)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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) Calculated by
applying 2014 exchange rates to 2015 reported sales in regions
outside the U.S.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Sales by
Region
|
|
Net Sales by
Region
|
|
Three Months
Ended
June 30,
|
|
Growth/(Decline)
|
|
Non-GAAP
Constant Currency
vs. 2014(1)
|
|
Six Months
Ended
June 30,
|
|
Decline
|
|
Non-GAAP
Constant Currency
vs. 2014(1)
|
|
2015
|
|
2014
|
|
Dollars
|
|
Percent
|
|
Percent
|
|
2015
|
|
2014
|
|
Dollars
|
|
Percent
|
|
Percent
|
|
Net Sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
United
States
|
$121,974
|
|
$112,527
|
|
$ 9,447
|
|
8 %
|
|
8 %
|
|
$290,597
|
|
$297,218
|
|
$ (6,621)
|
|
(2)%
|
|
(2)%
|
|
Europe
|
35,181
|
|
39,309
|
|
(4,128)
|
|
(11)%
|
|
5 %
|
|
76,938
|
|
90,482
|
|
(13,544)
|
|
(15)%
|
|
(0)%
|
|
Japan
|
32,439
|
|
32,517
|
|
(78)
|
|
0%
|
|
19 %
|
|
69,627
|
|
92,518
|
|
(22,891)
|
|
(25)%
|
|
(11)%
|
|
Rest of
Asia
|
19,011
|
|
25,119
|
|
(6,108)
|
|
(24)%
|
|
(20)%
|
|
35,484
|
|
52,116
|
|
(16,632)
|
|
(32)%
|
|
(29)%
|
|
Other foreign
countries
|
21,899
|
|
22,421
|
|
(522)
|
|
(2)%
|
|
11 %
|
|
42,037
|
|
51,433
|
|
(9,396)
|
|
(18)%
|
|
(8)%
|
|
$230,504
|
|
$231,893
|
|
$ (1,389)
|
|
(1)%
|
|
7 %
|
|
$514,683
|
|
$583,767
|
|
$(69,084)
|
|
(12)%
|
|
(6)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Calculated by
applying 2014 exchange rates to 2015 reported sales in regions
outside the U.S.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Segment
Information
|
|
|
|
Operating Segment
Information
|
|
|
|
Three Months
Ended
June 30,
|
|
Growth/(Decline)
|
|
|
|
Six Months
Ended
June 30,
|
|
Decline
|
|
|
|
2015
|
|
2014(1)
|
|
Dollars
|
|
Percent
|
|
|
|
2015
|
|
2014(1)
|
|
Dollars
|
|
Percent
|
|
|
|
Net Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Golf
Club
|
$189,616
|
|
$192,931
|
|
$ (3,315)
|
|
(2)%
|
|
|
|
$430,772
|
|
$492,469
|
|
$(61,697)
|
|
(13)%
|
|
|
|
Golf
Ball
|
40,888
|
|
38,962
|
|
1,926
|
|
5 %
|
|
|
|
83,911
|
|
91,298
|
|
(7,387)
|
|
(8)%
|
|
|
|
$230,504
|
|
$231,893
|
|
$ (1,389)
|
|
(1)%
|
|
|
|
$514,683
|
|
$583,767
|
|
$(69,084)
|
|
(12)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income
taxes:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Golf
clubs
|
$ 22,051
|
|
$ 11,052
|
|
$10,999
|
|
100 %
|
|
|
|
$ 62,990
|
|
$ 74,163
|
|
$(11,173)
|
|
(15)%
|
|
|
|
Golf
balls
|
6,639
|
|
5,451
|
|
1,188
|
|
22 %
|
|
|
|
14,047
|
|
16,806
|
|
(2,759)
|
|
(16)%
|
|
|
|
Reconciling
items(2)
|
(14,055)
|
|
(11,261)
|
|
(2,794)
|
|
(25)%
|
|
|
|
(24,945)
|
|
(28,941)
|
|
3,996
|
|
14 %
|
|
|
|
$ 14,635
|
|
$ 5,242
|
|
$ 9,393
|
|
179 %
|
|
|
|
$ 52,092
|
|
$ 62,028
|
|
$ (9,936)
|
|
(16)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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) 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
|
|
(Unaudited)
|
|
(In thousands, except
per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended June 30,
|
|
|
|
|
|
Six Months
Ended June 30,
|
|
|
|
|
|
2015
|
|
2015
|
|
2015(1)
|
|
2014
|
|
|
|
|
|
2015
|
|
2015
|
|
2015(1)
|
|
2014
|
|
|
|
|
|
Callaway
Golf
|
|
Foreign
Currency
|
|
Non-GAAP
|
|
Callaway
Golf
|
|
|
|
|
|
Callaway
Golf
|
|
Foreign
Currency
|
|
Non-GAAP
|
|
Callaway
Golf
|
|
|
|
|
|
As
Reported
|
|
Impact
|
|
Constant
Currency
|
|
As
Reported
|
|
|
|
|
|
As
Reported
|
|
Impact
|
|
Constant
Currency
|
|
As
Reported
|
|
|
|
|
|
Net sales
|
$
230,504
|
|
$
16,534
|
|
$
247,038
|
|
$
231,893
|
|
|
|
|
|
$
514,683
|
|
$
32,844
|
|
$
547,527
|
|
$
583,767
|
|
|
|
|
|
Gross
profit
|
101,697
|
|
15,771
|
|
117,468
|
|
90,806
|
|
|
|
|
|
228,963
|
|
31,491
|
|
260,454
|
|
255,703
|
|
|
|
|
|
% of sales
|
44.1 %
|
|
n/a
|
|
47.6 %
|
|
39.2 %
|
|
|
|
|
|
44.5 %
|
|
n/a
|
|
47.6 %
|
|
43.8 %
|
|
|
|
|
|
Operating
expenses
|
83,105
|
|
3,318
|
|
86,423
|
|
79,995
|
|
|
|
|
|
173,439
|
|
6,385
|
|
179,824
|
|
183,215
|
|
|
|
|
|
Income from
operations
|
18,592
|
|
12,453
|
|
31,045
|
|
10,811
|
|
|
|
|
|
55,524
|
|
25,106
|
|
80,630
|
|
72,488
|
|
|
|
|
|
Other income
(expense), net
|
(3,957)
|
|
2,082
|
|
(1,875)
|
|
(5,569)
|
|
|
|
|
|
(3,432)
|
|
(236)
|
|
(3,668)
|
|
(10,460)
|
|
|
|
|
|
Income before income
taxes
|
14,635
|
|
14,535
|
|
29,170
|
|
5,242
|
|
|
|
|
|
52,092
|
|
24,870
|
|
76,962
|
|
62,028
|
|
|
|
|
|
Income tax
provision
|
1,817
|
|
255
|
|
2,072
|
|
1,873
|
|
|
|
|
|
3,455
|
|
411
|
|
3,866
|
|
3,347
|
|
|
|
|
|
Net income
|
$
12,818
|
|
$
14,280
|
|
$
27,098
|
|
$
3,369
|
|
|
|
|
|
$
48,637
|
|
$
24,459
|
|
$
73,096
|
|
$
58,681
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
share:
|
$
0.15
|
|
$
0.15
|
|
$
0.30
|
|
$
0.04
|
|
|
|
|
|
$
0.54
|
|
$
0.26
|
|
$
0.80
|
|
$
0.66
|
|
|
|
|
|
Weighted-average
shares outstanding:
|
94,913
|
|
94,913
|
|
94,913
|
|
78,560
|
|
|
|
|
|
94,406
|
|
94,406
|
|
94,406
|
|
93,367
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Calculated by
excluding the Company's offsetting hedging gains/losses and
applying 2014 exchange rates to the adjusted 2015 international
results.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
|
2015 Trailing Twelve
Month EBITDA
|
|
|
|
2014 Trailing Twelve
Month EBITDA
|
|
|
|
Quarter
Ended
|
|
|
|
Quarter
Ended
|
|
|
|
September
30,
|
|
December
31,
|
|
March 31,
|
|
June 30,
|
|
|
|
|
|
September
30,
|
|
December
31,
|
|
March 31,
|
|
June 30,
|
|
|
|
|
|
2014
|
|
2014
|
|
2015
|
|
2015
|
|
Total
|
|
|
|
2013
|
|
2013
|
|
2014
|
|
2014
|
|
Total
|
|
|
|
Net income
(loss)
|
$
(1,134)
|
|
$
(41,539)
|
|
$
35,819
|
|
$
12,818
|
|
$ 5,964
|
|
|
|
$
(21,153)
|
|
$
(49,499)
|
|
$
55,312
|
|
$
3,369
|
|
$ (11,971)
|
|
|
|
Interest expense,
net
|
2,037
|
|
1,764
|
|
2,021
|
|
1,936
|
|
7,758
|
|
|
|
1,975
|
|
1,963
|
|
2,648
|
|
2,612
|
|
9,198
|
|
|
|
Income tax
provision
|
304
|
|
1,980
|
|
1,638
|
|
1,817
|
|
5,739
|
|
|
|
1,037
|
|
658
|
|
1,474
|
|
1,873
|
|
5,042
|
|
|
|
Depreciation and
amortization expense
|
5,222
|
|
4,857
|
|
4,703
|
|
4,454
|
|
19,236
|
|
|
|
6,265
|
|
5,850
|
|
5,697
|
|
5,460
|
|
23,272
|
|
|
|
EBITDA
|
$
6,429
|
|
$
(32,938)
|
|
$
44,181
|
|
$
21,025
|
|
$ 38,697
|
|
|
|
$
(11,876)
|
|
$
(41,028)
|
|
$
65,131
|
|
$
13,314
|
|
$ 25,541
|
|
|
Logo -
http://photos.prnewswire.com/prnh/20091203/CGLOGO
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SOURCE Callaway Golf Company