Callaway 2014 Annual Report Download - page 50

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34
Other income (expense), improved by $2.8 million to income of $6.0 million for the year ended December 31, 2013
compared to income of $3.2 million in the comparable period of 2012. This increase in income was primarily attributable to
an increase in net foreign currency gains.
The Company’s provision for income taxes increased to $5.6 million for the year ended December 31, 2013, compared
to $4.9 million in the comparable period of 2012. The $0.7 million increase resulted from the sale of indefinite lived assets
relating to the Top-Flite and Ben Hogan brands in the first quarter of 2012. Due to the effects of the Company's valuation
allowance against its U.S. deferred tax assets, the Company’s effective tax rate for the year ended December 31, 2013 is not
comparable to its effective tax rate for the year ended December 31, 2012, as the Company’s provision for income taxes is
not directly correlated to the amount of its pretax losses.
Net loss for the year ended December 31, 2013 decreased to $18.9 million compared to $122.9 million in the comparable
period of 2012. Diluted loss per share improved to $0.31 in 2013 compared to $1.96 in 2012. The Company’s net loss for the
years ended December 31, 2013 and 2012 include the following charges (in millions):
2013 2012
Pre-tax charges related to the Cost Reduction Initiatives ................................................................... $ (16.6)$ (32.2)
Pre-tax impairment charges................................................................................................................. — (21.9)
Pre-tax charges related to the reorganization and reinvestment initiatives......................................... — (1.0)
Pre-tax gain on the sale of Top-Flite and Ben Hogan brands.............................................................. — 6.6
Total..................................................................................................................................................... $ (16.6)$ (48.5)
Golf Clubs Segment
Net sales information for the golf clubs segment by product category is summarized as follows (dollars in millions):
Years Ended
December 31, Growth/(Decline)
2013(1) 2012(1) Dollars Percent
Net sales:
Woods.................................................................................................. $ 249.8 $ 198.1 $ 51.7 26 %
Irons .................................................................................................... 178.8 169.2 9.6 6 %
Putters.................................................................................................. 87.8 92.6 (4.8)(5)%
Accessories and other.......................................................................... 195.3 235.6 (40.3) (17)%
$ 711.7 $ 695.5 $ 16.2 2 %
(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. In each of the years ended
December 31, 2013 and 2012, this resulted in an increase in net sales of $1.0 million in the golf clubs segment and a
corresponding decrease in net sales in the golf balls segment.
The $51.7 million (26%) increase in net sales of woods to $249.8 million for the year ended December 31, 2013 resulted
from an increase in both sales volume and average selling prices. The increase in sales volume was primarily due to the
successful launch of the X Hot family of woods, which performed better at retail than the prior year Razr X family of woods.
The increase in average selling prices was due to the introduction of the X Hot and Razr Fit Xtreme woods at higher average
selling prices than their predecessors, the Razr X and Razr Fit woods sold in the prior year.
The $9.6 million (6%) increase in net sales of irons to $178.8 million for the year ended December 31, 2013 was primarily
attributable to the strong performance of the current year X Hot irons and Mack Daddy 2 wedges combined with an increase
in average selling prices resulting from less promotional activity in the current year as a result of more optimal inventory
levels at retail.
The $4.8 million (5%) decrease in net sales of putters to $87.8 million for the year December 31, 2013 was primarily
attributable to a decline in both sales volume and average selling prices due to an overall decline in the putter category in
2013. Despite this decline in sales, the Company's Odyssey brand of putters increased its year to date U.S. market share by
approximately 200 basis points in 2013.