Callaway Golf Announces Results for Fourth Quarter and Full Year 2006.CARLSBAD, Calif. -- Callaway Golf Company Callaway Golf Company is an American golf company based in Carlsbad, California. They manufacture woods, irons, wedges, putters and golf balls and license its name for apparel, footwear, timepieces and accessories. (NYSE NYSE See: New York Stock Exchange :ELY) today announced its financial results for the fourth quarter and full year ended December 31, 2006. Highlights for the fourth quarter include: * Net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight of $179.9 million, as compared to $154.5 million for the same period in 2005. * Loss per share of $0.15 on 67.0 million shares, as compared to a loss per share of $0.27 on 69.3 million shares in the fourth quarter of 2005. * The 2006 fourth quarter loss per share includes $0.02 of after-tax charges for employee equity-based compensation associated with FAS 123R, $0.01 for charges related to the restructuring initiatives announced in September 2005, and $0.01 for gross margin improvement initiatives announced in November 2006. The fourth quarter of 2005 includes after-tax charges of $0.03 for the integration of Top-Flite and $0.02 for the restructuring charges restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. . Excluding these charges, the Company's pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma loss per share for the fourth quarter of 2006 would have been $0.11, as compared to pro forma loss per share of $0.22 for the fourth quarter of 2005. * Gross profit for the fourth quarter of 2006 was $58.8 million (or 33% of net sales) compared to $48.2 million (or 31% of net sales) for the fourth quarter of 2005. * Operating Expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. for the fourth quarter of 2006 were $79.9 million compared to $80.8 million for the same period in 2005. Highlights for the full year of 2006 include: * Net sales of $1.018 billion, as compared to $998.1 million for the same period in 2005. * Fully diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of of $0.34 on 68.5 million shares, as compared to fully diluted earnings per share of $0.19 on 69.2 million shares in 2005. * The 2006 fully diluted earnings per share includes after-tax charges of $0.08 for employee equity-based compensation associated with FAS 123R, $0.04 for the integration of Top-Flite, $0.03 for the restructuring initiatives, and $0.02 for the gross margin improvement initiatives. The full year of 2005 includes after-tax charges of $0.11 for integration of Top-Flite, $0.07 for the restructuring, and $0.01 for employee equity-based compensation. Excluding these charges, the Company's pro forma fully diluted earnings per share for 2006 would have been $0.51 compared to $0.38 for 2005. * Gross profit for 2006 was $398.1 million (or 39% of net sales) compared to $414.4 million (or 42% of net sales) for 2005. The decline in gross profit is primarily the result of a lower mix of higher margin irons, as well as lower Top-Flite and Ben Hogan Noun 1. Ben Hogan - United States golfer who won many major golf tournaments (1912-1997) Hogan, William Benjamin Hogan gross margins due to the initiatives to clear older inventory. * Operating Expenses for 2006 were $361.0 million, a decrease of $36.2 million compared to $397.2 million in 2005. A majority of the decrease is due to the restructuring initiatives announced in September 2005. "We have made significant progress this year in improving operations and profitability," announced George Fellows, President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. . "Specifically, we were able to reduce our pro forma operating expenses in 2006 by approximately $35 million, which is in addition to the $8 million saved in the fourth quarter of 2005. We are also pleased with our fourth quarter results which reflect stronger sales and gross margins and significantly improved earnings compared to the fourth quarter last year." "While pleased with our progress so far, we recognize that there is more we must do to further improve our operations and profitability," continued Mr. Fellows. "We have therefore begun implementing our previously announced gross margin initiatives, which are targeted at saving $50 to $60 million over the next two years. We also began the relaunch Relaunch can refer to several things:
(2) (Programmable Gate Array) See gate array and FPGA. Show in Orlando at the end of January and are encouraged by the reception the new Top-Flite D2 ball technology has received. With these projects underway, along with the 5 out of 11 'Editor Choice' awards we received for our new 2007 products in Golf Digest's 'Hot List' equipment review, we are optimistic op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op as we begin the new golf season." Business Outlook The Company estimates that its full year 2007 net sales will be in the range of $1.035 to $1.055 billion. The Company also estimates that its 2007 full year pro forma fully diluted earnings per share will be in the range of $0.75 to $0.85, which represents an estimated increase of over 45% as compared to the Company's pro forma fully diluted earnings per share in 2006 of $0.51 as discussed above. Estimated pro forma earnings pro forma earnings Income not necessarily calculated in accordance with generally accepted accounting principles. For example, a company might report pro forma earnings that exclude depreciation expense and nonrecurring expenses such as restructuring costs. for 2007 exclude charges related to employee long-term incentive compensation as well as charges related to the Company's gross margin initiatives. Going forward, the Company's pro forma results will include charges for employee long-term incentive compensation, which are estimated to be $0.09 per share in 2007 as compared to $0.08 in 2006. As a result, the Company's pro forma fully diluted earnings per share for 2007 including these charges are estimated to be in the range of $0.66 to $0.76, as compared to $0.43 in 2006. The Company's earnings estimates assume a base of 68.0 million shares. The Company will be holding a conference call at 2:00 p.m. PST PST Paroxysmal supraventricular tachycardia, see there today. 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 15, 2007. The replay may be accessed through the Internet at www.callawaygolf.com or by telephone by calling 1-800-475-6701 toll free for calls originating within the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. or 320-365-3844 for International calls. The replay pass code is 862285. Disclaimer: Statements used in this press release that relate to future plans, events, financial results, performance or prospects, including statements relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc estimated sales and earnings for 2007, the relaunch of the Top-Flite brand, and the implementation of, or cost savings to result from, the Company's gross margin initiatives, are forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. as defined under the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. These estimates and statements are based upon current information and expectations. Investors should understand that it is very difficult to forecast sales of the Company's products as a substantial portion of the Company's sales each year is derived from the sale of new products. Accurately estimating the Company's sales each year is therefore based upon various unknowns including consumer acceptance of the Company's new products as well as consumer discretionary purchasing behavior in the upcoming year. Actual results may differ materially from those estimated or anticipated as a result of these unknowns or as a result of certain risks and uncertainties, including but not limited to, delays, difficulties or increased costs associated with the implementation of the Company's planned gross margin initiatives, the re-launch of the Top-Flite brand or the implementation of future initiatives; market acceptance of current and future products; adverse market and economic conditions; adverse weather conditions and seasonality; any rule changes or other actions taken by the USGA USGA United States Golf Association USGA Uhren & Schmuck Gassner (Germany) USGA US Global Nanospace Inc. (stock symbol) USGA Undergraduate Student Government Association or other golf association that could have an adverse impact upon demand for the Company's products; a decrease in participation levels in golf; and the effect of terrorist activity, armed conflict, natural disasters or pandemic pandemic /pan·dem·ic/ (pan-dem´ik) 1. a widespread epidemic of a disease. 2. widely epidemic. pan·dem·ic adj. Epidemic over a wide geographic area. n. 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 and the Company's business, see Part I, Item 1A of the Company's Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year ended December 31, 2005, 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 from time to time 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 here·of adv. Of this. hereof Adverb Formal or law of or concerning this Adv. 1. hereof - of or concerning this; "the twigs hereof are physic" . The Company undertakes no obligation to republish re·pub·lish tr.v. re·pub·lished, re·pub·lish·ing, re·pub·lish·es 1. To publish again. 2. Law To revive (a libel or a canceled will). revised forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. Regulation G: The financial results reported in this press release have been prepared in accordance with accounting principles generally accepted in the United States ("GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). "). In addition to the GAAP results, the Company has also provided additional information concerning its results, which includes certain financial measures not prepared in accordance with GAAP. The non-GAAP financial measures included in this press release exclude charges associated with employee equity-based compensation, charges related to the integration of the Callaway Golf Company and Top-Flite Golf Company operations, charges related to the September 2005 restructuring initiatives, and charges related to the gross margin initiatives. These non-GAAP financial measures should not be considered a substitute for any measure derived in accordance with GAAP. These non-GAAP financial measures may also be inconsistent with the manner in which similar measures are derived or used by other companies. Management believes that the presentation of such non-GAAP financial measures, when considered in conjunction with the most directly comparable GAAP financial measures, provides additional useful information concerning the Company's operations without these charges. The Company has provided reconciling information in the text of this press release and in the supplemental financial information attached to this release. About Callaway Golf Through an unwavering commitment to innovation, Callaway Golf Company creates products and services designed to make every golfer a better golfer. Callaway Golf Company, which celebrates its 25(th) Anniversary in 2007, manufactures and sells golf clubs and golf balls, and sells golf accessories, under the Callaway Golf[R], Odyssey Odyssey (ŏd`ĭsē): see Homer. Odyssey Homer’s long, narrative poem centered on Odysseus. [Gk. Lit.: Odyssey] See : Epic Odyssey [R], Top-Flite[R], and Ben Hogan[R] brands in more than 110 countries worldwide. For more information please visit www.callawaygolf.com. [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] |
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