Callaway 2014 Annual Report Download - page 47

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31
The $21.4 million (12%) increase in net sales of irons to $200.2 million for the year ended December 31, 2014 was
primarily attributable to an increase in average selling prices due to a favorable shift in product mix due to the success of the
more premium APEX and Big Bertha irons during 2014.
The $6.7 million (8%) decrease in net sales of putters to $81.1 million for the year December 31, 2014 was primarily
attributable to a decline in sales volume partially offset by an increase in average selling prices. The decline in sales volume
was due to a shift in product launches to more premium models launched in 2014 compared to core (higher volume) putter
models launched in 2013. The increase in average selling prices was primarily due to a favorable shift in product mix due to
increased sales of the Company's new counterbalanced technology putters (Tank and Tank Cruiser) as well as the introduction
of the Company's new elite Metal X Milled putter during 2014, with no comparable elite putter launch in 2013.
The $3.8 million (2%) increase in net sales of accessories and other products to $199.1 million for the year ended
December 31, 2014 was primarily due to an increase in net sales of packaged sets and headwear. These increases were partially
offset by a decline in apparel and footwear sales primarily due to the transition of the Company's European apparel business
to a licensing model at the beginning of 2014.
Golf Balls Segment
Net sales information for the golf balls segment is summarized as follows (dollars in millions):
Years Ended
December 31, Growth
2014 2013(1) Dollars Percent
Net sales:
Golf balls............................................................................................. $ 137.0 $ 131.1 $ 5.9 5%
(1) The prior year amounts have been reclassified to reflect the Company's current year allocation methodology related to
freight revenue and costs, certain discounts and other reserves not specific to a product type. This resulted in a decrease
of net sales of $1.0 million in the golf balls segment and a corresponding increase in net sales in the golf clubs segment.
The $5.9 million (5%) increase in net sales of golf balls to $137.0 million for the year ended December 31, 2014 was
primarily due to an increase in average selling prices with flat sales volume. The increase in average selling prices resulted
from a favorable shift in product mix to sales of higher priced Speed Regime golf balls with no comparable premium ball
launch in the prior year.
Segment Profitability
Profitability by operating segment is summarized as follows (dollars in millions):
Years Ended
December 31, Growth/(Decline)
2014 2013(1) Dollars Percent
Income (loss) before income taxes:
Golf clubs(2) ........................................................................................ $ 50.9 $ 32.7 $ 18.2 56%
Golf balls(2) ......................................................................................... 15.2 (3.4) 18.6 N/M
Reconciling items(3) ............................................................................ (44.5)(42.6)(1.9)4%
$ 21.6 $ (13.3) $ 34.9 N/M
(1) The prior year amounts have been reclassified to reflect the Company's current year allocation methodology related to
freight revenue and costs, certain discounts and other reserves not specific to a product type. This resulted in an increase
to income before income taxes of $5.0 million in the golf club segment and a corresponding decrease in income before
income taxes in the golf balls segment.
(2) Included in the Company’s golf clubs and golf balls segments are pre-tax charges of $6.4 million and $7.0 million,
respectively, for the year ended December 31, 2013, in connection with the Company's Cost Reduction Initiatives (see