Callaway 1999 Annual Report Download - page 48

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46 CALLAWAY GOLF COMPANY
(In thousands)
1999 Sales Long-Lived Assets
United States $414,136 $241,241
Europe 115,673 14,027
Japan 55,928 2,634
Rest of Asia 73,121 974
Other foreign countries 55,613 3,481
Total $714,471 $262,357
1998 Sales Long-Lived Assets
United States $437,627 $277,611
Europe 116,354 17,789
Japan 61,460 857
Rest of Asia 34,189 1,194
Other foreign countries 47,991 3,122
Total $697,621 $300,573
1997 Sales Long-Lived Assets
United States $547,256 $250,548
Europe 108,659 4,035
Japan 84,634 61
Rest of Asia 54,029
Other foreign countries 48,349
Total $842,927 $254,644
NOTE 16
TRANSACTIONS WITH RELATED PARTIES
During 1998, the Company entered into an agreement with
Callaway Editions, Inc. to form CGMV, a limited liability com-
pany that was owned 80% by the Company and 20% by
Callaway Editions, Inc. (“Callaway Editions”). Callaway
Editions is a publishing and media company which is owned
9% by Ely Callaway, Chairman and Chief Executive Officer of
the Company, and 81% by his son, Nicholas Callaway. CGMV
was formed to produce print and other media products that
relate to the game of golf. Pursuant to the agreement, the
Company agreed to loan CGMV up to $20,000,000 for working
capital, subject to CGMV’s achievement of certain milestones
to the satisfaction of the Company in its sole discretion. Also
pursuant to the agreement, CGMV was obligated to pay an
annual management fee of $450,000 to Callaway Editions. In
conjunction with the Company’s restructuring plan, the
Company committed to sell or assign its interest in CGMV to
Callaway Editions. Accordingly, the Company recorded a
charge in operations to December 1998 based on the
December 31, 1998 book value of CGMV (Note 12).
During 1999, the Company forgave the existing loan bal-
ance from CGMV of approximately $2,142,000, sold its interest
to Callaway Editions for a nominal amount and paid
$1,000,000 as consideration for release from its obligation to
loan CGMV up to $20,000,000. These transactions did not
result in a charge in 1999, as they were adequately accrued in
the 1998 restructuring reserve (Note 12).
In December 1998, the Company purchased the remain-
ing 20% interest in Callaway Golf Trading GmbH, the
Company’s former German distributor, for $6,766,000. The
purchase price was in the form of a note payable bearing inter-
est at 7%, due in June 1999 to the seller, who is an officer of a
wholly-owned subsidiary of Company. The note payable was
included in accounts payable and accrued expenses at
December 31, 1998 and was paid in February 1999.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS