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CALLAWAY GOLF COMPANY REPORTS SEPTEMBER QUARTER SALES AND EARNINGS UP 100 PERCENT AND 138 PERCENT, RESPECTIVELY

 CARLSBAD, Calif., Oct. 21 /PRNewswire/ -- Callaway Golf Company (NYSE: ELY) today announced results for its third quarter ended Sept. 30, 1993. Net income increased 138 percent to $12.7 million ($.72 per share fully diluted) from $5.3 million ($.31 per share fully diluted) for the same period in 1992. Net sales increased 100 percent to $71.8 million, compared to $35.9 million for the same period in the prior year, according to Ely Callaway, chairman and chief executive officer, and Donald H. Dye, president and chief operating officer.
 For the nine months ended Sept. 30, 1993, income (before the cumulative effect of accounting change) increased 118 percent to $30.9 million ($1.76 per share fully diluted) from $14.1 million ($.84 per share fully diluted) for the nine months ended Sept. 30, 1992. Net sales increased 96 percent to $186.4 million from $95.3 million for the same period in 1992.
 "Demand for the company's products continues strong," Dye said. "However, we do not expect our growth in sales to continue at the current rate in the December quarter because of the high sales base established in the fourth quarter of 1992."
 The gross margin for the September 1993 quarter was 55 percent compared to the 51 percent reported in the year-ago period. The increase is due, in part, to reduced provision requirements for obsolete inventory and warranty expense. The gross margin was also positively affected by an increase in the sale of Big Bertha(R) metal woods which provide a higher margin, offset partially by increased material costs.
 It was also announced that the board of directors has approved a fourth consecutive quarterly dividend of $.025 per share payable Nov. 22, 1993, to shareholders of record as of Nov. 2, 1993.
 Callaway Golf designs, manufactures and markets high-quality, relatively high-priced, innovative golf clubs under the design concept known as "S2H2(R)." One of these unique products is the Big Bertha(R) line of metal woods.
 CALLAWAY GOLF COMPANY
 Summary of Operations
 (In thousands, except per share data)
 Third Quarter Ended Sept. 30,
 1993 pct 1992 pct
 (Unaudited)
 Condensed Income Statement
 Net sales $71,758 100 $35,896 100
 Cost of goods sold 32,296 45 17,662 49
 Gross profit 39,462 55 18,234 51
 Operating expenses:
 Selling expense 8,761 12 5,090 14
 General and administrative 8,329 12 3,500 10
 Research and development 1,080 2 541 2
 Income from operations 21,292 30 9,103 25
 Other income, net 358 --- 187 ---
 Income before income taxes
 and cumulative effect of
 accounting change 21,650 30 9,290 26
 Provision for income taxes 8,913 --- 3,945 ---
 Income before cumulative
 effect of accounting change 12,737 18 5,345 15
 Net income $12,737 18 $5,345 15
 Primary earnings per
 common share:
 Income before cumulative effect
 of accounting change $.72 $.34
 Net income $.72 $.34
 Fully diluted earnings per
 common share:
 Income before cumulative
 effect of accounting change $.72 $.31
 Net income $.72 $.31
 Common equivalent shares:
 Primary 17,723 15,556
 Fully diluted 17,762 17,428
 Nine Months Ended Sept. 30,
 1993 pct 1992 pct
 (Unaudited)
 Condensed Income Statement
 Net sales $186,398 100 $95,331 100
 Cost of goods sold 83,153 45 45,132 47
 Gross profit 103,245 55 50,199 53
 Operating expenses:
 Selling expense 28,938 16 15,045 16
 General and administrative 20,855 11 9,927 10
 Research and development 2,767 1 1,157 1
 Income from operations 50,685 27 24,070 25
 Other income, net 751 330
 Income before income taxes
 and cumulative effect of
 accounting change 51,436 28 24,400 26
 Provision for income taxes 20,566 --- 10,262 ---
 Income before cumulative
 effect of accounting change 30,870 17 14,138 15
 Cumulative effect of
 accounting change 1,658 --- --- ---
 Net income $32,528 17 $14,138 15
 Primary earnings per
 common share:
 Income before cumulative
 effect of accounting change $1.81 $.95
 Cumulative effect of
 accounting change .10
 Net income $1.91 $.95
 Fully diluted earnings per
 common share:
 Income before cumulative
 effect of accounting change $1.76 $.84
 Cumulative effect of
 accounting change .09 ---
 Net income $1.85 $.84
 Common equivalent shares:
 Primary 17,073 14,904
 Fully diluted 17,644 16,931
 CALLAWAY GOLF COMPANY
 Condensed Balance Sheet
 (In thousands)
 Sept. 30, Dec. 31,
 1993 1992
 (Unaudited)
 Assets
 Current assets:
 Cash and cash equivalents $42,653 $20,019
 Accounts receivable, net 22,111 11,302
 Inventories, net 25,559 15,285
 Current deferred taxes 12,700 7,315
 Other current assets 791 1,263
 Total current assets 103,814 55,184
 Property and other assets 26,156 13,753
 Total $129,970 $68,937
 Liabilities and shareholders' equity
 Current liabilities:
 Accounts payable and
 accrued expenses $13,349 $6,915
 Accrued employee compensation
 and benefits 10,367 2,344
 Accrued warranty expense 8,151 4,617
 Income taxes payable 4,764 1,945
 Total current liabilities 36,631 15,821
 Long-term debt --- 3,366
 Commitments
 Shareholders' equity:
 Common stock 163 70
 Paid-in capital 44,504 31,948
 Retained earnings 48,672 17,732
 Total shareholders' equity 93,339 49,750
 Total $129,970 $68,937
 -0- 10/21/93
 /CONTACT: Ely Callaway, CEO, or David Rane, investor relations, of Callaway Golf, 619-931-1771/
 (ELY)


CO: Callaway Golf Co. ST: California IN: SU: ERN DIV

JL-MF -- SD003 -- 4950 10/21/93 08:09 EDT
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Publication:PR Newswire
Date:Oct 21, 1993
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