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
SOURCE Callaway Golf Company
Related Links
http://www.callawaygolf.com
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