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CALLAWAY GOLF REPORTS JUNE QUARTER SALES AND EARNINGS UP 82 PERCENT AND 95 PERCENT, RESPECTIVELY; EXCEPTIONAL DEMAND FOR ITS PRODUCTS CONTINUES

 CARLSBAD, Calif., July 22 /PRNewswire/ -- Callaway Golf Company (NYSE: ELY) today announced record results for its second quarter ended June 30, 1993. Net income increased 91 percent to $11.4 million ($.65 per share fully diluted) from $6.0 million ($.35 per share fully diluted) for the same period in 1992. Net sales increased 82 percent to $66.6 million compared to $36.5 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 six months ended June 30, 1993, income (before the cumulative effect of accounting change) increased 106 percent to $18.1 million ($1.04 per share fully diluted) from $8.8 million ($.53 per share fully diluted) for the six months ended June 30, 1992. Net sales increased 93 percent to $114.6 million from $59.4 million for the same period in 1992.
 Dye stated, "Worldwide demand for Callaway brand golf clubs continues very strong."
 The gross margin for the June 1993 quarter was 57 percent compared to the 53 percent reported in the year-ago period. The increase is because of the fact that the company did not record a provision for obsolete inventory during the three months ended June 30, 1993, as compared to approximately a 3 percent of net sales provision being recorded during the same period in the prior year. 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. The company's reserve for obsolete inventory at June 30, 1993, was $5.2 million, representing 21 percent of the gross inventory of $24.7 million. Management considers this reserve to be adequate.
 It was also announced that the board of directors has approved a third consecutive quarterly dividend of $.025 per share payable Aug. 23, 1993, for shareholders of record as of Aug. 2, 1993.
 The Aug. 9, 1993, issue of Fortune magazine ranks Callaway overall No. 14 on its list of America's 100 Fastest Growing Companies. Within this Fortune ranking system, Callaway is listed No. 61 in sales, but No. 1 for per share annual growth rate for earnings, and No. 34 in net profit for the four quarters ended March 31, 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)
 Second Quarter Ended June 30,
 1993 pct 1992 pct
 Condensed Income Statement
 (Unaudited)
 Net sales $66,572 100 $36,526 100
 Cost of goods sold 28,827 43 17,222 47
 Gross profit 37,745 57 19,304 53
 Operating expenses:
 Selling expense 10,931 16 5,408 15
 General and administrative 7,597 11 3,460 9
 Research and development 902 1 370 1
 Income from operations 18,315 28 10,066 28
 Other income, net 214 -- 128 --
 Income before income taxes and
 cumulative effect of
 accounting change 18,529 28 10,194 28
 Provision for income taxes 7,141 -- 4,227 --
 Income before cumulative
 effect of accounting change 11,388 17 5,967 16
 Cumulative effect of
 accounting change --- -- --- --
 Net income $11,388 17 $5,967 16
 Primary Earnings Per Common Share:
 Income before cumulative
 effect of accounting change $.65 $.38
 Cumulative effect of
 accounting change --- ---
 Net income $.65 $.38
 Fully Diluted Earnings
 Per Common Share:
 Income before cumulative
 effect of accounting change $.65 $.35
 Cumulative effect of
 accounting change --- ---
 Net income $.65 $.35
 Common equivalent shares:
 Primary 17,433 15,579
 Fully diluted 17,552 17,307
 Six Months Ended June 30,
 1993 pct 1992 pct
 Condensed Income Statement
 (Unaudited)
 Net sales $114,640 100 $59,435 100
 Cost of goods sold 50,857 44 27,470 46
 Gross profit 63,783 56 31,965 54
 Operating expenses:
 Selling expense 20,177 18 9,954 17
 General and administrative 12,526 11 6,427 11
 Research and development 1,688 1 616 1
 Income from operations 29,392 26 14,968 25
 Other income, net 394 -- 142 --
 Income before income taxes
 and cumulative effect of
 accounting change 29,786 26 15,110 25
 Provision for income taxes 11,653 -- 6,316 --
 Income before cumulative
 effect of accounting change 18,133 16 8,794 15
 Cumulative effect of
 accounting change 1,658 -- --- --
 Net income $19,791 17 $8,794 15
 Primary Earnings Per Common Share:
 Income before cumulative
 effect of accounting change $1.09 $.59
 Cumulative effect of
 accounting change $.10 ---
 Net income $1.19 $.59
 Fully Diluted Earnings Per
 Common Share:
 Income before cumulative
 effect of accounting change $1.04 $.53
 Cumulative effect of
 accounting change .09 ---
 Net income $1.13 $.53
 Common equivalent shares:
 Primary 16,682 14,787
 Fully diluted 17,481 16,706
 June 30, Dec. 31,
 1993 1992
 (Unaudited)
 Condensed Balance Sheet
 (In thousands)
 Assets
 Current assets:
 Cash and cash equivalents $40,436 $20,019
 Accounts receivable, net 22,645 11,302
 Inventories, net 19,466 15,285
 Current deferred taxes 11,074 7,315
 Other current assets 732 1,263
 Total current assets 94,353 55,184
 Property and other assets 15,670 13,753
 Total $110,023 $68,937
 Liabilities and Shareholders'
 Equity
 Current liabilities:
 Accounts payable and
 accrued expenses $14,511 $6,915
 Accrued employee compensation
 and benefits 8,611 2,344
 Accrued warranty expense 7,003 4,617
 Income taxes payable 2,433 1,945
 Total current liabilities 32,558 15,821
 Long-term debt --- 3,366
 Commitments
 Shareholders' equity:
 Common stock 162 70
 Paid-in capital 40,616 31,948
 Retained earnings 36,687 17,732
 Total shareholders' equity 77,465 49,750
 Total $110,023 $68,937
 -0- 7/22/93 R
 /CONTACT: Ely Callaway, chairman and CEO, or Dave Rane, investor relations of Callaway Golf, 619-931-1771/
 (ELY)


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

JB-MF -- SD004R -- 4536 07/22/93 12:22 EDT
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Date:Jul 22, 1993
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