CARLSBAD, Calif., Oct. 21, 2015 /PRNewswire/ -- Callaway Golf
Company (NYSE: ELY) today announced its third quarter financial
results and revised its full year financial outlook, including
increasing its earnings guidance.
For the third quarter of 2015, despite significant headwinds
from unfavorable changes in foreign currency exchange rates, the
Company improved both its net sales and gross profit.
Specifically, the Company achieved third quarter net sales growth
of 4% over 2014. On a constant currency basis, the Company
grew net sales 12%. The Company's gross margins improved by 540
basis points to 44.1%, resulting in a $13
million (19%) increase in gross profit for the third quarter
of 2015 compared to the third quarter of 2014. On a constant
currency basis, gross margins improved by 900 basis points and
gross profit increased by $25 million
(38%) over the same period. Third quarter 2015 loss per share
increased to ($0.04), compared to
($0.01) for the third quarter of
2014, as improved gross margins were offset by planned investments
in the Company's marketing and tour programs as well as
non-recurring expenses related to the exchange transactions to
retire the majority of the Company's convertible debt, most of
which were non-cash expenses.
The Company has continued to gain market share and drive
improved operational efficiencies. As a result, the Company revised
its full year net sales estimates to $835 -
$840 million (as compared to its prior estimate of
$830 - $840 million) and increased
its earnings outlook to $0.12 - $0.15
earnings per share (as compared to its prior estimate of
$0.01 - $0.06 earnings per
share).
"Overall, we are very pleased with our performance in the third
quarter and the progress we have made in 2015," commented
Chip Brewer, President and Chief
Executive Officer of Callaway Golf Company. "Our new products
continue to perform well in the marketplace. We have further
strengthened our balance sheet, regained leadership in key product
categories and markets, and our brand is sustaining its positive
momentum. We also continue to be excited about our product pipeline
as we move through 2015 and into 2016."
"Additionally, from an overall market perspective we continue to
be encouraged by what we believe are improved industry
fundamentals," continued Mr. Brewer. "This includes increased
excitement around the world's professional game as well as
increased average selling prices and less promotional activity in
key markets. Looking forward, we believe that our improved market
shares and brand momentum will allow us to maximize current global
industry conditions and capitalize on any future improvements in
market conditions or foreign currency exchange rates."
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. 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.
Summary of Third Quarter 2015 Financial Results
For the third 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
|
$176
|
$169
|
$7
|
|
$189
|
$169
|
$20
|
Gross
Profit/
% of Sales
|
$78
44.1%
|
$65
38.7%
|
$13
540 b.p.
|
|
$90
47.7%
|
$65
38.7%
|
$25
900 b.p.
|
Operating
Expenses
|
$77
|
$68
|
$9
|
|
$80
|
$68
|
$12
|
Pre-Tax Income
(loss)
|
($2)
|
($1)
|
($1)
|
|
$7
|
($1)
|
$8
|
EPS
|
($0.04)
|
($0.01)
|
($0.03)
|
|
$0.07
|
($0.01)
|
$0.08
|
The Company's $176 million in net
sales for the third quarter of 2015 were up 4% versus the third
quarter last year despite unfavorable changes in foreign currency
rates and softer market conditions in Asia. Unfavorable
changes in foreign currency exchange rates negatively impacted 2015
third quarter net sales by $13
million. On a constant currency basis, net sales for
the third quarter of 2015 grew by approximately 12% compared to
2014.
The Company's loss per share for the third quarter of 2015
increased to ($0.04) compared to
($0.01) for the same period in
2014. The Company was able to significantly improve its gross
profit as a result of a 540 basis point improvement in gross
margins due to more favorable product pricing, less closeouts, less
promotional activity as well as improved operational efficiencies.
This significant improvement in gross margins was offset by
increased investment in marketing and tour programs as well as
expenses recorded during the quarter related to the convertible
debt exchange transactions. On a constant currency basis, the
Company's earnings per share would have been $0.07. Compared to 2014, the Company's earnings
per share for the third quarter of 2015 was also affected by an
increase of over 5 million common equivalent shares in the earnings
per share calculation as a result of the convertible debt exchange
transactions.
Summary of First Nine Months of 2015 Financial
Results
For the first nine months 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
|
$690
|
$752
|
($62)
|
|
$737
|
$752
|
($15)
|
Gross Profit/
% of Sales
|
$307
44.4%
|
$321
42.7%
|
($14)
170 b.p.
|
|
$351
47.6%
|
$321
42.7%
|
$30
490 b.p.
|
Operating
Expenses
|
$250
|
$251
|
($1)
|
|
$259
|
$251
|
$8
|
Pre-Tax
Income
|
$50
|
$61
|
($11)
|
|
$85
|
$61
|
$24
|
EPS
|
$0.53
|
$0.66
|
($0.13)
|
|
$0.89
|
$0.66
|
$0.23
|
For the first nine months of 2015, the Company's net sales
decreased 8% (or 2% 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
decision on launch timing which negatively impacted revenues in the
first quarter of this year, less closeouts and softer than expected
market conditions in Asia.
The Company's earnings per share for the first nine months of
2015 decreased $0.13 compared to the
first nine months of 2014 primarily due to unfavorable changes in
foreign currency exchange rates, which adversely affected 2015
first nine months earnings per share by $0.36. On a constant currency basis, the
Company's first nine months earnings per share increased 35% to
$0.89 due to a 490 basis point
constant currency improvement in gross margins driven by increased
pricing, less closeouts, a lower promotional environment and
increased operational efficiencies.
Business Outlook for 2015
Given the Company's continuing market share performance and its
significantly improved gross margins, the Company is narrowing 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 manner in which this
constant currency information is derived is discussed in more
detail toward the end of this release. Future changes in the
applicable foreign currency exchange rates will affect the
Company's GAAP guidance.
Full Year
The Company currently estimates the following full year results
for 2015:
|
2015 GAAP
Estimate
|
2015 Constant
Currency Estimate
|
2014
Actual
|
Net Sales
|
$835 - $840
million
|
$885 - $890
million
|
$887
million
|
The increase in the low end of the Company's estimates for full
year net sales from its previous GAAP guidance of $830 - $840 million is due to continued
improvement in market share partially offset by weakening foreign
currencies. If the U.S. Dollar were to strengthen during the
balance of the year, the Company's GAAP sales estimates
would be adversely affected.
|
2015 GAAP
Estimate
|
2015 Constant
Currency Estimate
|
2014
Actual
|
Gross
Margins
|
42.8%
|
45.8%
|
40.0%
|
The Company estimates that its 2015 GAAP gross margins as a
percent of sales will improve approximately 80 basis points from
its previous guidance of 42.0% due to a stronger sales mix and less
promotional activity as well as continued operational
improvements.
|
2015 GAAP
Estimate
|
2015 Constant
Currency Estimate
|
2014
Actual
|
Operating
Expenses
|
$333
million
|
$343
million
|
$327
million
|
The Company estimates that its 2015 GAAP operating expenses will
be slightly lower than its previous guidance of $335 million driven by cost management
activities. The Company expects to continue to support the second
half product launches and to support the successful launch of its
soft-fast core golf ball.
|
2015 GAAP
Estimate
|
2015 Constant
Currency Estimate
|
2014
Actual
|
Pre-Tax
Income
|
$16 - $19
million
|
$54 - $57
million
|
$22
million
|
The Company estimates that its 2015 pre-tax income will increase
from its previous guidance of $7 - $12
million due to improved gross margins and slightly better
net sales.
|
2015 GAAP
Estimate
|
2015 Constant
Currency Estimate
|
2014
Actual
|
Earnings Per
Share
|
$0.12 -
$0.15
|
$0.56 -
$0.59
|
$0.20
|
The Company estimates that its fully diluted earnings per share
will increase from its previous guidance of $0.01 - $0.06 due to improved gross margins and
better than expected market share gains. The Company's 2015
earnings per share estimates assume a base of 83 million shares as
compared to 78 million shares in 2014. The increased share count in
2015 is primarily the result of the retirement of the Company's
convertible debt.
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, October 28, 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 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 period. This calculation also excludes
foreign currency net gains and losses recognized in other
income/expense from the translation of transactions denominated in
foreign currencies and foreign currency gains and losses recognized
from the Company's hedging contracts. It does not include any other
effect of changes in foreign currency rates on the Company's
results or business.
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 sales, gross margins, operating expenses, pre-tax
income, and earnings per share (or related share count), as well as
the Company's recovery, momentum, future products, 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; 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 or commodities 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)
|
|
|
September 30,
2015
|
|
December 31,
2014
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
41,592
|
|
|
|
$
|
37,635
|
|
Accounts receivable,
net
|
|
153,040
|
|
|
|
109,848
|
|
Inventories
|
|
184,845
|
|
|
|
207,229
|
|
Other current
assets
|
|
26,001
|
|
|
|
29,321
|
|
Total current
assets
|
|
405,478
|
|
|
|
384,033
|
|
|
|
|
|
|
|
Property, plant and
equipment, net
|
|
53,810
|
|
|
|
58,093
|
|
Intangible assets,
net
|
|
115,663
|
|
|
|
116,654
|
|
Investment in
golf-related ventures
|
|
52,376
|
|
|
|
50,677
|
|
Other
assets
|
|
11,263
|
|
|
|
15,354
|
|
Total
assets
|
|
$
|
638,590
|
|
|
|
$
|
624,811
|
|
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
Accounts payable and
accrued expenses
|
|
$
|
117,080
|
|
|
|
$
|
123,251
|
|
Accrued employee
compensation and benefits
|
|
29,630
|
|
|
|
37,386
|
|
Asset-based credit
facility
|
|
—
|
|
|
|
15,235
|
|
Accrued warranty
expense
|
|
6,015
|
|
|
|
5,607
|
|
Income tax
liability
|
|
3,097
|
|
|
|
2,623
|
|
Deferred taxes,
net
|
|
25
|
|
|
|
26
|
|
Total current
liabilities
|
|
155,847
|
|
|
|
184,128
|
|
|
|
|
|
|
|
Long-term
liabilities:
|
|
66,609
|
|
|
|
149,149
|
|
Total shareholders'
equity
|
|
416,134
|
|
|
|
291,534
|
|
Total liabilities and
shareholders' equity
|
|
$
|
638,590
|
|
|
|
$
|
624,811
|
|
CALLAWAY GOLF
COMPANY
CONSOLIDATED
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands,
except per share data)
|
|
|
Three Months
Ended
September 30,
|
|
2015
|
|
2014
|
Net sales
|
$
|
175,780
|
|
|
$
|
168,572
|
|
Cost of
sales
|
98,178
|
|
|
103,265
|
|
Gross
profit
|
77,602
|
|
|
65,307
|
|
Operating
expenses:
|
|
|
|
Selling
|
52,390
|
|
|
46,871
|
|
General and
administrative
|
15,772
|
|
|
12,918
|
|
Research and
development
|
8,673
|
|
|
8,144
|
|
Total operating
expenses
|
76,835
|
|
|
67,933
|
|
Income (loss) from
operations
|
767
|
|
|
(2,626)
|
|
Other income
(expense), net
|
(2,837)
|
|
|
1,796
|
|
Loss before income
taxes
|
(2,070)
|
|
|
(830)
|
|
Income tax
provision
|
1,547
|
|
|
304
|
|
Net loss
|
$
|
(3,617)
|
|
|
$
|
(1,134)
|
|
|
|
|
|
Loss per common
share:
|
|
|
|
Basic
|
$
|
(0.04)
|
|
|
$
|
(0.01)
|
|
Diluted
|
$
|
(0.04)
|
|
|
$
|
(0.01)
|
|
Weighted-average
common shares outstanding:
|
|
|
|
Basic
|
83,875
|
|
|
77,646
|
|
Diluted
|
83,875
|
|
|
77,646
|
|
|
|
|
|
|
Nine Months
Ended
September 30,
|
|
2015
|
|
2014
|
Net sales
|
$
|
690,463
|
|
|
$
|
752,339
|
|
Cost of
sales
|
383,898
|
|
|
431,329
|
|
Gross
profit
|
306,565
|
|
|
321,010
|
|
Operating
expenses:
|
|
|
|
Selling
|
178,675
|
|
|
184,786
|
|
General and
administrative
|
47,407
|
|
|
43,459
|
|
Research and
development
|
24,192
|
|
|
22,903
|
|
Total operating
expenses
|
250,274
|
|
|
251,148
|
|
Income from
operations
|
56,291
|
|
|
69,862
|
|
Other income
(expense), net
|
(6,269)
|
|
|
(8,664)
|
|
Income before income
taxes
|
50,022
|
|
|
61,198
|
|
Income tax
provision
|
5,002
|
|
|
3,651
|
|
Net income
|
$
|
45,020
|
|
|
$
|
57,547
|
|
|
|
|
|
Earnings per common
share:
|
|
|
|
Basic
|
$
|
0.56
|
|
|
$
|
0.74
|
|
Diluted
|
$
|
0.53
|
|
|
$
|
0.66
|
|
Weighted-average
common shares outstanding:
|
|
|
|
Basic
|
80,030
|
|
|
77,551
|
|
Diluted
|
94,614
|
|
|
93,384
|
|
CALLAWAY GOLF
COMPANY
CONSOLIDATED
CONDENSED STATEMENTS OF CASH FLOW
(Unaudited)
(In
thousands)
|
|
|
Nine Months
Ended
September 30,
|
|
2015
|
|
2014
|
Cash flows from
operating activities:
|
|
|
|
Net income
|
$
|
45,020
|
|
|
$
|
57,547
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
Depreciation and
amortization
|
13,350
|
|
|
16,379
|
|
Deferred taxes,
net
|
(184)
|
|
|
(179)
|
|
Share-based
compensation
|
5,535
|
|
|
3,979
|
|
Gain on disposal of
long-lived assets and deferred gain amortization
|
(772)
|
|
|
(1,097)
|
|
Debt discount
amortization on convertible notes
|
515
|
|
|
551
|
|
Changes in assets and
liabilities
|
(35,074)
|
|
|
(38,838)
|
|
Net cash provided by
operating activities
|
28,390
|
|
|
38,342
|
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
Capital
expenditures
|
(8,513)
|
|
|
(8,803)
|
|
Proceeds from sale of
property, plant and equipment
|
2
|
|
|
458
|
|
Investment in
golf-related ventures
|
—
|
|
|
(4,712)
|
|
Net cash used in
investing activities
|
(8,511)
|
|
|
(13,057)
|
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
Repayment of
asset-based credit facilities, net
|
(15,235)
|
|
|
(25,660)
|
|
Exercise of stock
options
|
5,330
|
|
|
2,222
|
|
Dividends
paid
|
(2,454)
|
|
|
(2,330)
|
|
Acquisition of
treasury stock
|
(1,942)
|
|
|
(1,006)
|
|
Credit facility
amendment costs
|
—
|
|
|
(608)
|
|
Equity issuance
costs
|
—
|
|
|
(7)
|
|
Net cash used in
financing activities
|
(14,301)
|
|
|
(27,389)
|
|
|
|
|
|
Effect of exchange
rate changes on cash and cash equivalents
|
(1,621)
|
|
|
(1,227)
|
|
Net increase
(decrease) in cash and cash equivalents
|
3,957
|
|
|
(3,331)
|
|
Cash and cash
equivalents at beginning of period
|
37,635
|
|
|
36,793
|
|
Cash and cash
equivalents at end of period
|
$
|
41,592
|
|
|
$
|
33,462
|
|
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
September 30,
|
|
Growth/(Decline)
|
|
Non-GAAP Constant
Currency
vs.
2014(2)
|
|
Nine Months
Ended
September 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
|
$
|
48,408
|
|
|
$
|
51,382
|
|
|
$
|
(2,974)
|
|
|
(6)%
|
|
|
1%
|
|
$
|
187,278
|
|
|
$
|
232,874
|
|
|
$
|
(45,596)
|
|
|
(20)%
|
|
|
(14)%
|
Irons
|
42,459
|
|
|
36,328
|
|
|
6,131
|
|
|
17%
|
|
|
26%
|
|
163,272
|
|
|
161,847
|
|
|
1,425
|
|
|
1%
|
|
|
8%
|
Putters
|
17,221
|
|
|
13,516
|
|
|
3,705
|
|
|
27%
|
|
|
40%
|
|
72,586
|
|
|
72,141
|
|
|
445
|
|
|
1%
|
|
|
8%
|
Gear/Accessories/Other
|
38,434
|
|
|
42,127
|
|
|
(3,693)
|
|
|
(9)%
|
|
|
(2)%
|
|
154,158
|
|
|
168,959
|
|
|
(14,801)
|
|
|
(9)%
|
|
|
(2)%
|
Golf balls
|
29,258
|
|
|
25,219
|
|
|
4,039
|
|
|
16%
|
|
|
24%
|
|
113,169
|
|
|
116,518
|
|
|
(3,349)
|
|
|
(3)%
|
|
|
2%
|
|
$
|
175,780
|
|
|
$
|
168,572
|
|
|
$
|
7,208
|
|
|
4%
|
|
|
12%
|
|
$
|
690,463
|
|
|
$
|
752,339
|
|
|
$
|
(61,876)
|
|
|
(8)%
|
|
|
(2)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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
September 30,
|
|
Growth/(Decline)
|
|
Non-GAAP Constant
Currency
vs.
2014(1)
|
|
Nine Months
Ended
September 30,
|
|
Growth/(Decline)
|
|
Non-GAAP Constant
Currency
vs.
2014(1)
|
|
2015
|
|
2014
|
|
Dollars
|
|
Percent
|
|
Percent
|
|
2015
|
|
2014
|
|
Dollars
|
|
Percent
|
|
Percent
|
Net Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
United
States
|
$
|
86,980
|
|
|
$
|
74,532
|
|
|
$
|
12,448
|
|
|
17%
|
|
|
17%
|
|
$
|
377,577
|
|
|
$
|
371,749
|
|
|
$
|
5,828
|
|
|
2%
|
|
|
2%
|
Europe
|
26,699
|
|
|
24,567
|
|
|
2,132
|
|
|
9%
|
|
|
24%
|
|
103,637
|
|
|
115,049
|
|
|
(11,412)
|
|
|
(10)%
|
|
|
5%
|
Japan
|
33,623
|
|
|
35,090
|
|
|
(1,467)
|
|
|
(4)%
|
|
|
11%
|
|
103,250
|
|
|
127,607
|
|
|
(24,357)
|
|
|
(19)%
|
|
|
(5)%
|
Rest of
Asia
|
16,855
|
|
|
21,736
|
|
|
(4,881)
|
|
|
(22)%
|
|
|
(15)%
|
|
52,340
|
|
|
73,852
|
|
|
(21,512)
|
|
|
(29)%
|
|
|
(25)%
|
Other foreign
countries
|
11,623
|
|
|
12,647
|
|
|
(1,024)
|
|
|
(8)%
|
|
|
12%
|
|
53,659
|
|
|
64,082
|
|
|
(10,423)
|
|
|
(16)%
|
|
|
(4)%
|
|
$
|
175,780
|
|
|
$
|
168,572
|
|
|
$
|
7,208
|
|
|
4%
|
|
|
12%
|
|
$
|
690,463
|
|
|
$
|
752,339
|
|
|
$
|
(61,876)
|
|
|
(8)%
|
|
|
(2)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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
September 30,
|
|
Growth/(Decline)
|
|
|
|
Nine Months
Ended
September 30,
|
|
Growth/(Decline)
|
|
|
|
2015
|
|
2014
|
|
Dollars
|
|
Percent
|
|
|
|
2015
|
|
2014
|
|
Dollars
|
|
Percent
|
|
|
Net Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Golf Club
|
$
|
146,522
|
|
|
$
|
143,353
|
|
|
$
|
3,169
|
|
|
2%
|
|
|
|
|
$
|
577,294
|
|
|
$
|
635,821
|
|
|
$
|
(58,527)
|
|
|
(9)%
|
|
|
|
Golf Ball
|
29,258
|
|
|
25,219
|
|
|
4,039
|
|
|
16%
|
|
|
|
|
113,169
|
|
|
116,518
|
|
|
(3,349)
|
|
|
(3)%
|
|
|
|
|
$
|
175,780
|
|
|
$
|
168,572
|
|
|
$
|
7,208
|
|
|
4%
|
|
|
|
|
$
|
690,463
|
|
|
$
|
752,339
|
|
|
$
|
(61,876)
|
|
|
(8)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income
taxes:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Golf clubs
|
$
|
6,564
|
|
|
$
|
3,760
|
|
|
$
|
2,804
|
|
|
75%
|
|
|
|
|
$
|
69,555
|
|
|
$
|
77,922
|
|
|
$
|
(8,367)
|
|
|
(11)%
|
|
|
|
Golf balls
|
3,511
|
|
|
543
|
|
|
2,968
|
|
|
547%
|
|
|
|
|
17,559
|
|
|
17,350
|
|
|
209
|
|
|
1%
|
|
|
|
Reconciling
items(1)
|
(12,145)
|
|
|
(5,133)
|
|
|
(7,012)
|
|
|
137%
|
|
|
|
|
(37,092)
|
|
|
(34,074)
|
|
|
(3,018)
|
|
|
9%
|
|
|
|
|
$
|
(2,070)
|
|
|
$
|
(830)
|
|
|
$
|
(1,240)
|
|
|
149%
|
|
|
|
|
$
|
50,022
|
|
|
$
|
61,198
|
|
|
$
|
(11,176)
|
|
|
(18)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) 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
September 30,
|
|
|
|
Nine Months Ended
September 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
|
$
|
175,780
|
|
|
$
|
13,506
|
|
|
$
|
189,286
|
|
|
$
|
168,572
|
|
|
|
|
$
|
690,463
|
|
|
$
|
46,659
|
|
|
$
|
737,122
|
|
|
$
|
752,339
|
|
|
|
Gross
profit
|
77,602
|
|
|
12,741
|
|
|
90,343
|
|
|
65,307
|
|
|
|
|
306,565
|
|
|
44,521
|
|
|
351,086
|
|
|
321,010
|
|
|
|
% of sales
|
44.1%
|
|
|
n/a
|
|
|
47.7%
|
|
|
38.7%
|
|
|
|
|
44.4%
|
|
|
n/a
|
|
|
47.6%
|
|
|
42.7%
|
|
|
|
Operating
expenses
|
76,835
|
|
|
3,068
|
|
|
79,903
|
|
|
67,933
|
|
|
|
|
250,274
|
|
|
9,153
|
|
|
259,427
|
|
|
251,148
|
|
|
|
Income (loss) from
operations
|
767
|
|
|
9,673
|
|
|
10,440
|
|
|
(2,626)
|
|
|
|
|
56,291
|
|
|
35,368
|
|
|
91,659
|
|
|
69,862
|
|
|
|
Other income
(expense), net
|
(2,837)
|
|
|
(693)
|
|
|
(3,530)
|
|
|
1,796
|
|
|
|
|
(6,269)
|
|
|
(929)
|
|
|
(7,198)
|
|
|
(8,664)
|
|
|
|
Income (loss) before
income taxes
|
(2,070)
|
|
|
8,980
|
|
|
6,910
|
|
|
(830)
|
|
|
|
|
50,022
|
|
|
34,439
|
|
|
84,461
|
|
|
61,198
|
|
|
|
Income tax
provision
|
1,547
|
|
|
(109)
|
|
|
1,438
|
|
|
304
|
|
|
|
|
5,002
|
|
|
302
|
|
|
5,304
|
|
|
3,651
|
|
|
|
Net income
(loss)
|
$
|
(3,617)
|
|
|
$
|
9,089
|
|
|
$
|
5,472
|
|
|
$
|
(1,134)
|
|
|
|
|
$
|
45,020
|
|
|
$
|
34,137
|
|
|
$
|
79,157
|
|
|
$
|
57,547
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings
(loss) per share:
|
$
|
(0.04)
|
|
|
$
|
0.11
|
|
|
$
|
0.07
|
|
|
$
|
(0.01)
|
|
|
|
|
$
|
0.53
|
|
|
$
|
0.36
|
|
|
$
|
0.89
|
|
|
$
|
0.66
|
|
|
|
Weighted-average
shares outstanding:
|
83,875
|
|
|
83,875
|
|
|
83,875
|
|
|
77,646
|
|
|
|
|
94,614
|
|
|
94,614
|
|
|
94,614
|
|
|
93,384
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Calculated by
applying 2014 exchange rates to 2015 reported results in regions
outside the U.S.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
|
2015 Trailing
Twelve Month EBITDA
|
|
2014 Trailing
Twelve Month EBITDA
|
|
Quarter
Ended
|
|
Quarter
Ended
|
|
December
31,
|
|
March
31,
|
|
June
30,
|
|
September
30,
|
|
|
|
December
31,
|
|
March
31,
|
|
June
30,
|
|
September
30,
|
|
|
|
2014
|
|
2015
|
|
2015
|
|
2015
|
|
Total
|
|
2013
|
|
2014
|
|
2014
|
|
2014
|
|
Total
|
Net income
(loss)
|
$
|
(41,539)
|
|
|
$
|
35,819
|
|
|
$
|
12,818
|
|
|
$
|
(3,617)
|
|
|
$
|
3,481
|
|
|
$
|
(49,499)
|
|
|
$
|
55,312
|
|
|
$
|
3,369
|
|
|
$
|
(1,134)
|
|
|
$
|
8,048
|
|
Interest expense,
net
|
1,764
|
|
|
2,021
|
|
|
1,936
|
|
|
3,520
|
|
|
9,241
|
|
|
1,963
|
|
|
2,648
|
|
|
2,612
|
|
|
2,037
|
|
|
9,260
|
|
Income tax
provision
|
1,980
|
|
|
1,638
|
|
|
1,817
|
|
|
1,547
|
|
|
6,982
|
|
|
658
|
|
|
1,474
|
|
|
1,873
|
|
|
304
|
|
|
4,309
|
|
Depreciation and
amortization expense
|
4,857
|
|
|
4,703
|
|
|
4,454
|
|
|
4,193
|
|
|
18,207
|
|
|
5,850
|
|
|
5,697
|
|
|
5,460
|
|
|
5,222
|
|
|
22,229
|
|
EBITDA
|
$
|
(32,938)
|
|
|
$
|
44,181
|
|
|
$
|
21,025
|
|
|
$
|
5,643
|
|
|
$
|
37,911
|
|
|
$
|
(41,028)
|
|
|
$
|
65,131
|
|
|
$
|
13,314
|
|
|
$
|
6,429
|
|
|
$
|
43,846
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Logo - http://photos.prnewswire.com/prnh/20091203/CGLOGO
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/callaway-golf-company-announces-third-quarter-2015-financial-results-profitability-and-market-share-exceed-companys-expectations-and-the-company-increases-full-year-earnings-guidance-300164083.html
SOURCE Callaway Golf Company