CARLSBAD, Calif., Aug. 21, 2017 /PRNewswire/ -- Callaway Golf
Company (NYSE:ELY) announced today it has completed the previously
announced acquisition of TravisMathew, LLC, a high-growth golf and
lifestyle apparel company, for $125.5
million in an all-cash transaction, subject to a working
capital adjustment.
TravisMathew is a dynamic apparel business with a distinct
Southern California vibe. It has a
golf heritage but also has quickly grown to include other lifestyle
apparel and accessories. Net sales for full year 2017 are
estimated to be $55-60 million.
Post-acquisition, TravisMathew will continue to operate out of its
Huntington Beach, California
headquarters.
"We are excited to have completed this acquisition," commented
Chip Brewer, President and Chief
Executive Officer of Callaway Golf Company. "We believe
TravisMathew fits well with our business, brand and culture and
aligns with our strategy of developing growth in areas tangential
to the golf equipment business. We have identified potential
synergies in operations and distribution, as well as growth
opportunities in the golf channels and international regions.
We look forward to partnering with the TravisMathew management team
to realize these synergies and capture these growth
opportunities."
The Company expects that TravisMathew sales will contribute
approximately $15 million to its
second half 2017 financial results. Including approximately
$5 million of non-recurring
transaction expenses and incremental non-cash expense resulting
from the acquisition purchase accounting adjustments, TravisMathew
is expected to be approximately $0.04
dilutive to Callaway's 2017 earnings per share. On a non-GAAP
basis, which excludes the $5 million
of non-recurring and non-cash expenses, TravisMathew is expected to
be approximately $0.01 dilutive to
Callaway's 2017 earnings per share. In 2018, after taking
into account anticipated financing costs and incremental investment
in the business to support future growth, TravisMathew is expected
to be slightly accretive to Callaway's 2018 earnings per
share.
Latham & Watkins LLP acted as legal counsel and Lazard acted
as financial advisor to Callaway. Baker & Hostetler LLP acted
as legal counsel and Moss Adams Capital LLC and Optivest IB acted
as financial advisor to TravisMathew.
Forward-Looking Statements
Statements used in this press release that relate to future
plans, events, financial results, performance or prospects, and
statements relating to the expected benefits of the TravisMathew
transaction, including future synergies and growth opportunities,
and the estimated sales and earnings contribution from
TravisMathew, 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 unanticipated difficulties or
expenditures relating to the transaction or the realization of the
anticipated synergies and growth opportunities; the response of
customers, suppliers and others to the announcement of the
transaction; potential difficulties in employee retention as a
result of the transaction; 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. For additional information
concerning these and other risks and uncertainties that could
affect these statements, see Callaway's Annual Report on Form 10-K
for the year ended December 31, 2016
as well as other risks and uncertainties detailed from time to time
in Callaway'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. Callaway
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.
Non-GAAP Information
The Company provided in this release certain projected financial
results which were calculated in accordance with accounting
principles generally accepted in the
United States ("GAAP"). To supplement the GAAP
projections, the Company has also provided certain non-GAAP
projected financial results. The non-GAAP projected financial
results exclude non-recurring transaction expenses and incremental
non-cash expense resulting from the acquisition purchase accounting
adjustments. The Company has included in the release a
reconciliation of the non-GAAP projections to the most directly
comparable GAAP projections. The non-GAAP information
presented in this release 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.
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 bags, accessories and apparel in the golf and lifestyle
categories, under the Callaway Golf®, Odyssey®, and OGIO brands
worldwide. For more information please visit
www.callawaygolf.com, www.odysseygolf.com and
www.ogio.com.
About TravisMathew
Founded in 2007, TravisMathew is
an iconic men's sportswear brand with premium domestic distribution
in better department stores, high-end country clubs, resorts and
TravisMathew's experiential retail stores. TravisMathew draws its
inspiration from all aspects of Southern
California culture and lifestyle. With a focus on constant
innovation and extraordinary quality, TravisMathew designs and
sells premium men's apparel for work and play. TravisMathew is
throwing a party, and you're invited. For more information please
visit www.travismathew.com.
CONTACT:
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Brian
Lynch
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Patrick
Burke
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(760)
931-1771
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SOURCE Callaway Golf Company