CARLSBAD, Calif., Jan. 29, 2015 /PRNewswire/ -- Callaway Golf
Company (NYSE:ELY) today announced its 2014 full year and fourth
quarter financial results. For the full year, despite
challenging conditions that beset the golf industry for much of
2014, including unfavorable weather and changes in foreign currency
exchange rates, Callaway returned to profitability for the first
time since 2008.
Callaway reported full year sales growth of 5% for 2014 driven
by growth in most major product categories (woods +8%; irons +12%;
golf balls +4%; and accessories and other +2%) and growth in all
geographic segments (United States
+5%; Japan +3%; Europe +11%; Rest of Asia +7%; and Other foreign countries
+1%). Additionally, income from operations improved
significantly to $31 million compared
to a loss of ($11) million in 2013
and fully diluted earnings per share increased to $0.20 compared to a loss of ($0.31) in 2013. This positive turnaround was
driven by the increase in sales, improvements in gross margins of
310 basis points, and flat operating expenses, all of which more
than offset an approximately $6
million increase in other expense due to a decrease in
foreign currency contract gains. The 2014 results also benefitted
from a $17 million decrease in
pre-tax charges related to the cost reduction initiatives that were
completed in 2013.
For the fourth quarter, 2014 sales were $135 million, an increase of 6% compared to last
year due primarily to increased sales of woods (+21%), irons (+27%)
and golf balls (+3%). The increase in woods and irons was led
by a strategic change in product launch timing resulting in the
fourth quarter release of the Big Bertha 815 family of woods and
Big Bertha Beta Irons and Hybrids compared to no similar product
launches in 2013. Although the Company generally reports a loss
during the fourth quarter due to the seasonality of its business,
this increase in sales, together with a 440 basis point improvement
in gross margins, allowed the Company to reduce its net loss per
share to ($0.54) compared to a net
loss per share of ($0.65) last year.
The 2014 results also benefitted from a $6 million decrease in pre-tax charges related to
the cost reduction initiatives that were completed in 2013.
GAAP RESULTS
For the fourth quarter of 2014, the Company reported the
following results, as compared to the same period in 2013:
Dollars in
millions except per share amounts
|
2014
|
% of Sales
|
2013
|
% of Sales
|
Improvement/
(Decline)
|
Net Sales
|
$135
|
-
|
$127
|
-
|
$8
|
Gross
Profit
|
$37
|
27%
|
$29
|
23%
|
$8
|
Operating
Expenses
|
$76
|
57%
|
$75
|
59%
|
($1)
|
Operating
Income/(Loss)
|
($39)
|
(29%)
|
($45)
|
(36%)
|
$6
|
Other
Income/(Expense)
|
-
|
-
|
($3)
|
(3%)
|
$3
|
Net
Income/(Loss)
|
($42)
|
(31%)
|
($49)
|
(39%)
|
$7
|
Earnings/(Loss) per
share (Diluted)
|
($0.54)
|
-
|
($0.65)
|
-
|
$0.11
|
For the full year of 2014, the Company reported the following
results, as compared to the same period in 2013:
Dollars in
millions except per share amounts
|
2014
|
% of Sales
|
2013
|
% of Sales
|
Improvement/
(Decline)
|
Net Sales
|
$887
|
-
|
$843
|
-
|
$44
|
Gross
Profit
|
$358
|
40%
|
$315
|
37%
|
$43
|
Operating
Expenses
|
$327
|
37%
|
$326
|
39%
|
($1)
|
Operating
Income/(Loss)
|
$31
|
4%
|
($11)
|
(1%)
|
$42
|
Other
Income/(Expense)
|
($9)
|
(1%)
|
($3)
|
-
|
($6)
|
Net
Income/(Loss)
|
$16
|
2%
|
($19)
|
(2%)
|
$35
|
Earnings/(Loss) per
share (Diluted)
|
$0.20
|
-
|
($0.31)
|
-
|
$0.51
|
"We are pleased with our results for 2014," commented
Chip Brewer, President and Chief
Executive Officer of Callaway Golf Company. "Notwithstanding
challenging market conditions for the golf industry as a whole, we
were able to grow sales, increase our market share and return to
profitability for the first time since 2008 - a significant
milestone for us in our turnaround. Our return to
profitability has clearly benefitted from the many actions we have
taken during the last few years to improve our operating
efficiencies, as evidenced in part by our 300+ basis point
improvement in gross margins in 2014. Also, our continued emphasis
on cost management has allowed us to increase our investments in
tour and marketing and still hold our operating expenses
essentially flat with 2013. All in all, we are pleased with how our
turnaround has progressed thus far."
"Looking forward, while the recent weakening of foreign
currencies will adversely impact our 2015 GAAP results, we expect
our underlying operational performance to continue to improve in
2015," continued Mr. Brewer. "Given the strength of our
product line for 2015, which was well received at the recent PGA
show in Orlando, and anticipated
additional improvements in our operations, we expect for 2015 on a
constant currency basis not only sales growth and market share
gains, but also further improvements in gross margins and
profitability. Golf is a momentum business and fortunately momentum
is now on our side."
Business Outlook for 2015
Given the significant effects that the recent weakening of
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 hedge 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 Company
provided the following estimated full year results for 2015:
|
2015 GAAP
Estimate
|
2015 Constant
Currency Estimate
|
2014
Actual
|
Net Sales
|
$855 - $880
million
|
$895 - $920
million
|
$887
million
|
The Company estimates that its 2015 net sales will decline 1% -
4% due to significant changes in foreign currency rates compared to
2014. On a constant currency basis, net sales are estimated
to increase by approximately 1% - 4%. This growth is being
driven by an estimated 5% - 6% growth in the Company's core channel
business, partially offset by a change in product launch timing and
a reduction in closeout sales compared to 2014.
|
2015 GAAP
Estimate
|
2015 Constant
Currency Estimate
|
2014
Actual
|
Gross
Margins
|
40.0%
|
42.5%
|
40.4%
|
The Company estimates that its 2015 gross margins as a percent
of sales will be about the same as in 2014. On a constant
currency basis, the Company estimates that gross margins will
improve by 210 basis points as compared to 2014. This improvement
is expected to result from continued supply chain improvements and
a more favorable sales mix.
|
2015 GAAP
Estimate
|
2015 Constant
Currency Estimate
|
2014
Actual
|
Operating
Expenses
|
$335
million
|
$345
million
|
$327
million
|
The Company estimates that 2015 operating expenses will increase
by 2% on a GAAP basis and by 6% on a constant currency basis.
This anticipated increase, on a currency neutral basis, is
primarily due to planned additional investment in marketing and
tour as well as other normal annual cost increases, partially
offset by the Company's continued focus on cost
management.
|
2015 GAAP
Estimate
|
2015 Constant
Currency Estimate
|
2014
Actual
|
Pre-tax
income
|
($1) - $8
million
|
$29 - $38
million
|
$22
million
|
Due to the effects of changes in foreign currency rates, the
Company estimates that its GAAP Pre-tax income will decrease
despite anticipated improvement in operational performance. On a
constant currency basis, the Company estimates that its pre-tax
income will increase by 32% - 73% as compared to 2014. The
Company estimates that its 2015 income tax provision will be
approximately $7 million on both a
GAAP and constant currency basis.
|
2015 GAAP
Estimate
|
2015 Constant
Currency Estimate
|
2014
Actual
|
Earnings/(Loss)
Per
Share
|
($0.09) -
$0.01
|
$0.28 -
$0.38
|
$0.20
|
The Company estimates that its fully diluted earnings/loss per
share will decline significantly - solely as a result of adverse
changes in foreign currency exchange rates as compared to
2014. On a constant currency basis, the Company estimates
that its earnings per share would increase by 40% - 90% due to the
strength of its 2015 product line and the many operational
improvements implemented over the last couple of years. The
Company's 2015 earnings per share estimates assume a base of 79
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. PST 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. PST on Thursday,
February 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 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. For additional information concerning the
effect of changes in foreign currency rates on the Company's 2015
forecast, see attached schedules.
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").
2013 Non-GAAP Information. 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 2015 sales, sales growth, gross margins, operating
expenses, pre-tax income, and earnings/loss per share (or related
share count), as well as the Company's recovery and future gross
margins or profitability, the creation of shareholder value, future
market share gains, market conditions, brand momentum, and improved
operations or performance, 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;
future retailer purchasing activity, which can be significantly
negatively affected by adverse industry conditions and overall
retail inventory levels; 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
|
Callaway Golf
Company
|
Consolidated
Condensed Balance Sheets
|
(In
thousands)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December
31,
|
|
|
|
2014
|
|
2013
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
Cash and cash
equivalents
|
$ 37,635
|
|
$ 36,793
|
|
|
Accounts receivable,
net
|
109,848
|
|
92,203
|
|
|
Inventories
|
207,229
|
|
263,492
|
|
|
Other current
assets
|
29,321
|
|
29,115
|
|
|
Total current assets
|
384,033
|
|
421,603
|
|
|
|
|
|
|
|
Property, plant and
equipment, net
|
58,093
|
|
71,341
|
|
Intangible assets,
net
|
116,654
|
|
118,113
|
|
Other
assets
|
66,031
|
|
52,806
|
|
|
Total assets
|
$ 624,811
|
|
$ 663,863
|
|
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
Accounts payable and
accrued expenses
|
$ 123,251
|
|
$ 157,120
|
|
|
Accrued employee
compensation and benefits
|
37,386
|
|
31,585
|
|
|
Asset-based credit
facility
|
15,235
|
|
25,660
|
|
|
Accrued warranty
expense
|
5,607
|
|
6,406
|
|
|
Deferred
taxes
|
26
|
|
-
|
|
|
Income tax
liability
|
2,623
|
|
5,425
|
|
|
Total current liabilities
|
184,128
|
|
226,196
|
|
|
|
|
|
|
|
Long-term
liabilities
|
149,149
|
|
153,048
|
|
Shareholders'
equity
|
291,534
|
|
284,619
|
|
|
Total liabilities and shareholders' equity
|
$ 624,811
|
|
$ 663,863
|
|
Callaway Golf
Company
|
Statements of
Operations
|
(In thousands, except
per share data)
|
(Unaudited)
|
|
|
|
|
|
Quarter
Ended
|
|
December
31,
|
|
2014
|
|
2013
|
|
|
|
|
Net sales
|
$ 134,606
|
|
$ 127,170
|
Cost of
sales
|
97,690
|
|
97,909
|
Gross
profit
|
36,916
|
|
29,261
|
Operating
expenses:
|
|
|
|
|
Selling
|
49,445
|
|
46,645
|
|
General and
administrative
|
18,203
|
|
19,461
|
|
Research and
development
|
8,382
|
|
8,502
|
|
|
Total operating
expenses
|
76,030
|
|
74,608
|
Loss from
operations
|
(39,114)
|
|
(45,347)
|
Other expense,
net
|
(445)
|
|
(3,494)
|
Loss before income
taxes
|
(39,559)
|
|
(48,841)
|
Income tax
provision
|
1,980
|
|
658
|
Net
loss
|
$ (41,539)
|
|
$ (49,499)
|
|
|
|
|
|
|
Loss per common
share:
|
|
|
|
|
Basic
|
($0.54)
|
|
($0.65)
|
|
Diluted
|
($0.54)
|
|
($0.65)
|
Weighted-average
common shares outstanding:
|
|
|
|
|
Basic
|
77,582
|
|
76,358
|
|
Diluted
|
77,582
|
|
76,358
|
|
|
|
|
|
|
|
|
|
Year Ended
|
|
|
|
December
31,
|
|
|
|
2014
|
|
2013
|
|
|
|
|
|
|
Net sales
|
$ 886,945
|
|
$ 842,801
|
Cost of
sales
|
529,019
|
|
528,043
|
Gross
profit
|
357,926
|
|
314,758
|
Operating
expenses:
|
|
|
|
|
Selling
|
234,231
|
|
226,496
|
|
General and
administrative
|
61,662
|
|
68,087
|
|
Research and
development
|
31,285
|
|
30,937
|
|
|
Total operating
expenses
|
327,178
|
|
325,520
|
Income (loss) from
operations
|
30,748
|
|
(10,762)
|
Other expense,
net
|
(9,109)
|
|
(2,560)
|
Income (loss) before
income taxes
|
21,639
|
|
(13,322)
|
Income tax
provision
|
5,631
|
|
5,599
|
Net income
(loss)
|
16,008
|
|
(18,921)
|
Dividends on
convertible preferred stock
|
-
|
|
3,332
|
Net income (loss)
allocable to common shareholders
|
$ 16,008
|
|
$ (22,253)
|
|
|
|
|
Earnings (loss) per
common share:
|
|
|
|
|
Basic
|
$0.21
|
|
($0.31)
|
|
Diluted
|
$0.20
|
|
($0.31)
|
Weighted-average
common shares outstanding:
|
|
|
|
|
Basic
|
77,559
|
|
72,809
|
|
Diluted
|
78,385
|
|
72,809
|
|
|
|
|
|
Callaway Golf
Company
|
Consolidated
Condensed Statements of Cash Flows
|
(In
thousands)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended
|
|
|
|
|
December
31,
|
|
|
|
|
2014
|
|
2013
|
|
Cash flows from
operating activities:
|
|
|
|
|
|
Net income
(loss)
|
$ 16,008
|
|
$ (18,921)
|
|
|
Adjustments to
reconcile net income (loss) to net cash provided by (used in)
operating activities:
|
|
|
|
|
|
|
Depreciation and
amortization
|
21,236
|
|
25,543
|
|
|
|
Deferred taxes,
net
|
604
|
|
(2,309)
|
|
|
|
Non-cash share-based
compensation
|
5,740
|
|
3,533
|
|
|
|
(Gain) loss on
disposal of long-lived assets
|
(1,331)
|
|
2,242
|
|
|
|
Discount amortization
on convertible notes
|
739
|
|
702
|
|
|
|
Changes in assets and
liabilities
|
(6,116)
|
|
(19,739)
|
|
|
Net cash provided by
(used in) operating activities
|
36,880
|
|
(8,949)
|
|
|
|
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
Capital
expenditures
|
(10,753)
|
|
(13,038)
|
|
|
Proceeds from sale of
property, plant and equipment
|
458
|
|
4,148
|
|
|
Investment in
golf-related ventures
|
(13,072)
|
|
(13,637)
|
|
|
Other investing
activities
|
(1,699)
|
|
-
|
|
|
Net cash used in
investing activities
|
(25,066)
|
|
(22,527)
|
|
|
|
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
(Repayment of)
proceeds from credit facilities, net
|
(10,425)
|
|
25,660
|
|
|
Exercise of stock
options
|
2,291
|
|
1,652
|
|
|
Dividends
paid
|
(3,105)
|
|
(5,599)
|
|
|
Acquisition of
treasury stock
|
(1,006)
|
|
-
|
|
|
Credit facility
amendment costs
|
(608)
|
|
-
|
|
|
Equity issuance
costs
|
(7)
|
|
(341)
|
|
|
Other financing
activities
|
(26)
|
|
(32)
|
|
|
Net cash (used in)
provided by financing activities
|
(12,886)
|
|
21,340
|
|
|
|
|
|
|
|
|
Effect of exchange
rate changes on cash
|
1,914
|
|
(5,074)
|
|
Net increase
(decrease) in cash and cash equivalents
|
842
|
|
(15,210)
|
|
Cash and cash
equivalents at beginning of period
|
36,793
|
|
52,003
|
|
Cash and cash
equivalents at end of period
|
$ 37,635
|
|
$ 36,793
|
|
Callaway Golf
Company
|
Consolidated Net
Sales and Operating Segment Information and Non-GAAP
Reconciliation
|
(In
thousands)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Sales by Product
Category
|
|
|
|
Net Sales by Product
Category
|
|
|
Quarter
Ended
|
|
|
|
|
|
|
|
Year Ended
|
|
|
|
|
|
|
December
31,
|
|
Growth/(Decline)
|
|
|
|
December
31,
|
|
Growth/(Decline)
|
|
|
2014
|
|
2013
(1)
|
|
Dollars
|
|
Percent
|
|
|
|
2014
|
|
2013
(1)
|
|
Dollars
|
|
Percent
|
Net sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Woods
|
$ 36,594
|
|
$ 30,361
|
|
$ 6,233
|
|
21%
|
|
|
|
$
269,468
|
|
$ 249,809
|
|
$ 19,659
|
|
8%
|
|
Irons
|
38,327
|
|
30,078
|
|
8,249
|
|
27%
|
|
|
|
200,174
|
|
178,771
|
|
21,403
|
|
12%
|
|
Putters
|
9,021
|
|
14,324
|
|
(5,303)
|
|
-37%
|
|
|
|
81,161
|
|
87,787
|
|
(6,626)
|
|
-8%
|
|
Accessories and
other
|
30,193
|
|
32,501
|
|
(2,308)
|
|
-7%
|
|
|
|
199,153
|
|
195,330
|
|
3,823
|
|
2%
|
|
Golf balls
|
20,471
|
|
19,906
|
|
565
|
|
3%
|
|
|
|
136,989
|
|
131,104
|
|
5,885
|
|
4%
|
|
|
$ 134,606
|
|
$ 127,170
|
|
$ 7,436
|
|
6%
|
|
|
|
$
886,945
|
|
$ 842,801
|
|
$ 44,144
|
|
5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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.
|
|
|
Net Sales by
Region
|
|
|
|
Net Sales by
Region
|
|
|
|
|
|
|
|
|
|
|
|
|
Constant
Currency
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Constant
Currency
|
|
|
|
|
|
|
|
|
|
|
Constant
Currency
|
|
Excluding
Businesses
|
|
|
|
|
|
|
|
|
|
Excluding
Businesses
|
|
|
Quarter
Ended
|
|
Growth
(Decline)
|
|
Sold or
Transitioned
|
|
|
|
Year Ended
|
|
Constant
Currency
|
|
Sold or
Transitioned
|
|
|
December
31,
|
|
Growth
(Decline)
|
|
vs.
2013(1)
|
|
Growth (Decline) vs.
2013 (2)
|
|
|
|
December
31,
|
|
Growth
|
|
Growth vs.
2013(1)
|
|
Growth vs. 2013
(2)
|
|
|
2014
|
|
2013
|
|
Dollars
|
|
Percent
|
|
Percent
|
|
Percent
|
|
|
|
2014
|
|
2013
|
|
Dollars
|
|
Percent
|
|
Percent
|
|
Percent
|
Net sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
United
States
|
$ 50,026
|
|
$ 50,335
|
|
$ (309)
|
|
-1%
|
|
-1%
|
|
-1%
|
|
|
|
$ 421,773
|
|
$ 401,478
|
|
$ 20,295
|
|
5%
|
|
5%
|
|
6%
|
|
Europe
|
19,352
|
|
16,535
|
|
2,817
|
|
17%
|
|
19%
|
|
31%
|
|
|
|
134,401
|
|
121,477
|
|
12,924
|
|
11%
|
|
4%
|
|
10%
|
|
Japan
|
38,555
|
|
32,177
|
|
6,378
|
|
20%
|
|
36%
|
|
36%
|
|
|
|
166,162
|
|
161,598
|
|
4,564
|
|
3%
|
|
12%
|
|
12%
|
|
Rest of
Asia
|
15,749
|
|
17,363
|
|
(1,614)
|
|
-9%
|
|
-8%
|
|
-7%
|
|
|
|
89,602
|
|
84,073
|
|
5,529
|
|
7%
|
|
5%
|
|
5%
|
|
Other foreign
countries
|
10,924
|
|
10,760
|
|
164
|
|
2%
|
|
9%
|
|
9%
|
|
|
|
75,007
|
|
74,175
|
|
832
|
|
1%
|
|
8%
|
|
9%
|
|
|
$ 134,606
|
|
$ 127,170
|
|
$ 7,436
|
|
6%
|
|
11%
|
|
13%
|
|
|
|
$ 886,945
|
|
$ 842,801
|
|
$ 44,144
|
|
5%
|
|
7%
|
|
8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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
|
|
|
Operating Segment
Information
|
|
|
Quarter
Ended
|
|
|
|
|
|
|
|
Year Ended
|
|
|
|
|
|
|
December
31,
|
|
Growth
|
|
|
|
December
31,
|
|
Growth/(Decline)
|
|
|
2014
|
|
2013
(1)
|
|
Dollars
|
|
Percent
|
|
|
|
2014
|
|
2013
(1)
|
|
Dollars
|
|
Percent
|
Net sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Golf
clubs
|
$ 114,135
|
|
$ 107,264
|
|
$ 6,871
|
|
6%
|
|
|
|
$
749,956
|
|
$ 711,697
|
|
$ 38,259
|
|
5%
|
|
Golf
balls
|
20,471
|
|
19,906
|
|
565
|
|
3%
|
|
|
|
136,989
|
|
131,104
|
|
5,885
|
|
4%
|
|
|
$ 134,606
|
|
$ 127,170
|
|
$ 7,436
|
|
6%
|
|
|
|
$
886,945
|
|
$ 842,801
|
|
$ 44,144
|
|
5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income
taxes:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Golf clubs
(2)
|
$ (27,032)
|
|
$ (31,231)
|
|
$ 4,199
|
|
13%
|
|
|
|
$
50,891
|
|
$ 32,738
|
|
$ 18,153
|
|
55%
|
|
Golf balls
(2)
|
(2,127)
|
|
(3,387)
|
|
1,260
|
|
37%
|
|
|
|
15,222
|
|
(3,472)
|
|
18,694
|
|
538%
|
|
Reconciling items
(3)
|
(10,400)
|
|
(14,223)
|
|
3,823
|
|
27%
|
|
|
|
(44,474)
|
|
(42,588)
|
|
(1,886)
|
|
-4%
|
|
|
$ (39,559)
|
|
$ (48,841)
|
|
$ 9,282
|
|
19%
|
|
|
|
$
21,639
|
|
$ (13,322)
|
|
$ 34,961
|
|
262%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)The
prior year amounts have been reclassed 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 clubs and golf balls segments recognized pre-tax
charges of $2.1 million and $2.3 million, respectively, during the
quarter ended December 31, 2013, and $6.4 million and $7.0 million,
respectively, during the year ended December 31, 2013. There
were no charges related to these initiatives in
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)
|
|
|
|
|
|
|
|
|
|
|
2013 Non-GAAP
Reconciliation to GAAP Reported Results:
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended
December 31,
|
|
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Callaway
Golf (1)
|
|
Cost Reduction
Initiatives(1) (3)
|
|
Non-Cash Tax
Adjustment(2)
|
|
Total as
Reported
|
Net sales
|
|
|
$
127,170
|
|
$
-
|
|
$
-
|
|
$
127,170
|
Gross
profit
|
|
|
33,036
|
|
(3,775)
|
|
-
|
|
29,261
|
% of sales
|
|
|
26%
|
|
-3%
|
|
n/a
|
|
23%
|
Operating
expenses
|
|
|
72,880
|
|
1,728
|
|
-
|
|
74,608
|
Loss from
operations
|
|
|
(39,844)
|
|
(5,503)
|
|
-
|
|
(45,347)
|
Other expense,
net
|
|
|
(2,806)
|
|
(688)
|
|
-
|
|
(3,494)
|
Loss before income
taxes
|
|
|
(42,650)
|
|
(6,191)
|
|
-
|
|
(48,841)
|
Income tax provision
(benefit)
|
|
|
(16,420)
|
|
(2,383)
|
|
19,461
|
|
658
|
Net loss
|
|
|
(26,230)
|
|
(3,808)
|
|
(19,461)
|
|
(49,499)
|
Net loss allocable to
common shareholders
|
|
|
$
(26,230)
|
|
$
(3,808)
|
|
$
(19,461)
|
|
$
(49,499)
|
|
|
|
|
|
|
|
|
|
|
Diluted loss per
share:
|
|
|
$
(0.34)
|
|
$
(0.05)
|
|
$
(0.26)
|
|
$
(0.65)
|
Weighted-average
shares
outstanding:
|
|
|
76,358
|
|
76,358
|
|
76,358
|
|
76,358
|
|
(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)
Primarily includes costs associated with the reorganization of the
Company's golf ball manufacturing supply chain and costs related to
transitioning the Company's European apparel business to a third
party model.
|
|
|
|
Year Ended December
31,
|
|
|
|
2013
|
|
|
|
Non-GAAP Callaway
Golf (1)
|
|
Cost Reduction
Initiatives(1) (3)
|
|
Non-Cash Tax
Adjustment (2)
|
|
Total as
Reported
|
Net sales
|
|
|
$
842,801
|
|
$
-
|
|
$
-
|
|
$
842,801
|
Gross
profit
|
|
|
325,907
|
|
(11,149)
|
|
-
|
|
314,758
|
% of sales
|
|
|
39%
|
|
-1%
|
|
n/a
|
|
37%
|
Operating
expenses
|
|
|
320,801
|
|
4,719
|
|
-
|
|
325,520
|
Income from
operations
|
|
|
5,106
|
|
(15,868)
|
|
-
|
|
(10,762)
|
Other expense,
net
|
|
|
(1,872)
|
|
(688)
|
|
-
|
|
(2,560)
|
Income (loss) before
income taxes
|
|
|
3,234
|
|
(16,556)
|
|
-
|
|
(13,322)
|
Income tax provision
(benefit)
|
|
|
1,245
|
|
(6,374)
|
|
10,728
|
|
5,599
|
Net income
(loss)
|
|
|
1,989
|
|
(10,182)
|
|
(10,728)
|
|
(18,921)
|
Dividends on
convertible preferred stock
|
|
|
3,332
|
|
-
|
|
-
|
|
3,332
|
Net loss allocable to
common shareholders
|
|
|
$
(1,343)
|
|
$
(10,182)
|
|
$
(10,728)
|
|
$
(22,253)
|
|
|
|
|
|
|
|
|
|
|
Diluted loss per
share:
|
|
|
$
(0.02)
|
|
$
(0.14)
|
|
$
(0.15)
|
|
$
(0.31)
|
Weighted-average
shares
outstanding:
|
|
|
72,809
|
|
72,809
|
|
72,809
|
|
72,809
|
|
(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, workforce reductions and
costs related to transitioning the Company's European apparel
business to a third party model.
|
|
2014 Trailing Twelve
Month EBITDA
|
|
|
|
2013 Trailing Twelve
Month EBITDA
|
EBITDA:
|
Quarter
Ended
|
|
|
|
Quarter
Ended
|
|
March 31,
|
|
June 30,
|
|
September
30,
|
|
December
31,
|
|
|
|
|
|
March 31,
|
|
June 30,
|
|
September
30,
|
|
December
31,
|
|
|
|
2014
|
|
2014
|
|
2014
|
|
2014
|
|
Total
|
|
|
|
2013
|
|
2013
|
|
2013
|
|
2013
|
|
Total
|
Net income
(loss)
|
$
55,312
|
|
$
3,369
|
|
$
(1,134)
|
|
$
(41,539)
|
|
$
16,008
|
|
|
|
$
41,660
|
|
$
10,071
|
|
$
(21,153)
|
|
$
(49,499)
|
|
$
(18,921)
|
Interest expense,
net
|
2,648
|
|
2,612
|
|
2,037
|
|
1,764
|
|
9,061
|
|
|
|
2,157
|
|
2,470
|
|
1,975
|
|
1,963
|
|
8,565
|
Income tax
provision
|
1,474
|
|
1,873
|
|
304
|
|
1,980
|
|
5,631
|
|
|
|
2,469
|
|
1,435
|
|
1,037
|
|
658
|
|
5,599
|
Depreciation and
amortization expense
|
5,697
|
|
5,460
|
|
5,222
|
|
4,857
|
|
21,236
|
|
|
|
6,956
|
|
6,472
|
|
6,265
|
|
5,850
|
|
25,543
|
EBITDA
|
$
65,131
|
|
$
13,314
|
|
$
6,429
|
|
$
(32,938)
|
|
$
51,936
|
|
|
|
$
53,242
|
|
$
20,448
|
|
$
(11,876)
|
|
$
(41,028)
|
|
$
20,786
|
Photo -
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To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/callaway-golf-company-announces-significant-improvements-in-2014-fourth-quarter-and-full-year-results-callaways-turnaround-and-momentum-continue-callaway-provides-2015-guidance-300028175.html
SOURCE Callaway Golf Company