Callaway 1999 Annual Report Download - page 8

6 C ALLAWAY GOLF COMPANY
■We spent over $27,000,000 for continuing golf club R&D activities – a worthwhile investment in
the future stability and growth of our Company. We believe this is more than any other golf club man-
ufacturer invested on R&D, by far.
■We spent approximately $55,000,000 for advertising and promotion. That includes all expenses
for our professional tour promotional programs on the five major tours around the world.
■All of the above allowed us to maintain the #1sales position in the U.S. and all other major golf
club markets in the world. Our total exports to markets outside the U.S. amounted to approximately
$300,335,000 through our International Sales Division.
■We built a brand new business in Japan by establishing a wholly-owned sales company to distrib-
ute our golf clubs and golf balls directly to retailers in Japan beginning in 2000. This will be an entire-
ly new and different sales activity for we had previously enjoyed a successful relationship with
Sumitomo Rubber Industries, Ltd., our distributor in Japan for the previous 12 years.
■We completely revamped our golf club manufacturing policies, practices and procedures at our
Carlsbad headquarters. The result was that we produced more golf clubs per employee than ever, at
considerably lower cost, and with no sacrifice in quality. All of this was done in far less space than
ever before.
■We created a new product introduction policy which should help our sales, encourage retailer sup-
port for our products, and assure that consumers receive the proper level of support both before and
after their purchase of our equipment.
■We settled three lawsuits which we had brought against Spalding, Orlimar and a former employee
who joined a competitor. We think we made our points in each case – to the long-term benefit of the
Company.
■We continued our dialogues with the USGA and with the Royal & Ancient Golf Club of St. Andrews,
Scotland. Our purpose is to convince rulemaking bodies such as these that extra distance off the tee,
so long as only human power is used, is good for the game of golf. We understand that a few mem-
bers on the Executive Committee of the USGA still insist that extra distance – even for juniors, women
and men as old as I am – is bad for the game. We will continue to oppose that strange concept.
■We came close to returning our balance sheet to what I consider to be almost pristine condition.
We are old-fashioned in this respect – it makes us feel more comfortable in dealing with the ups and
downs we are sure to face in the future.