Callaway 1999 Annual Report Download - page 4

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2 C ALLAWAY GOLF COMPANY
his letter is easier and more fun to write than was my letter to you a year
ago. Compared to 1998, the 1999 year just ending was a fine and encourag-
ing one for all of us – shareholders, all employees and customers alike.
Your Board of Directors’ and Management’s goals are to return the Company to reasonable growth in
revenue and to its profit levels similar to those achieved in the past. We plan to work very hard to
achieve those goals, and I am pretty sure that the operating results I will report to you this time next
year probably will look good to most of you and will be encouraging to all except our competitors.
At that time – one year from now – I will write my last annual report letter to you as your CEO. By
then we will have completed the last full year of start-up costs for our new golf ball business, and we
should be facing much smoother sailing in that new and promising area. I also think our golf club
business will have completely and successfully turned around from the 1998 condition. Our potential
at that time will most likely look very good when compared to that of our competition.
Before I say more about the future, I want to summarize some of the good things we saw in 1999:
■We manufactured and sold about 5.6 million premium golf clubs, bringing us total revenue of
$714,471,000. I think this was at least as much revenue as our next three largest golf club competi-
tors combined, and we greatly strengthened the unique power of the Callaway Golf® brand around
the world.
■From 1999 revenue, we earned $85,497,000 before taxes, and $55,322,000 net, after taxes.
■We made those 1999 profits after deducting a pre-tax start-up loss of $38,425,000 on the process
of creating a totally integrated golf ball business from scratch.
■We put in place an excellent plan for leadership succession. Last year I reported to you that the
Board had promoted Chuck Yash, the President and CEO of our golf ball subsidiary, to the position of
Senior Executive Vice President, Golf Balls, for the parent Company. During 1999 the Board and I
became increasingly convinced that we were very fortunate to have someone as capable, experi-
enced and dedicated as Chuck already working on the management team. We quickly concluded that
we need search no farther for my successor when the time comes for me to retire. In August of 1999
DEAR SHAREHOLDERS AND FRIENDS
T