Callaway 1997 Annual Report Download
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Please find the complete 1997 Callaway annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.-
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Callaway Golf Company, through the use of tech-
nology, designs and manufactures premium, innova-
tive golf clubs that are demonstrably superior to,
and pleasingly different from, its competition.
Callaway Go l f’s primary products, which incorporate
the S2H2®design concept, currently include the Big
Bertha®War Bird®Stainless Steel Metal Woods,
Great Big Bertha®Titanium Metal Woods, Biggest
Big Bertha™Titanium Drivers, Big Bertha®X-12™
Irons and Great Big Bertha®Tungsten•
Titanium™
Irons. Callaway Golf ’s wholly-owned subsidiary,
Odyssey Go l f, Inc., makes and sells Od y s s e y®p u t t e r s
and wedges with Stronomic®and Lyconite™inserts.
Stat ement s used in t his r epor t that r elat e to f utur e plans,
event s, f inancial r esults or per f or mance ar e f or w ar d- looking
st atements as defined under the Pr ivat e Secur ities Litigat ion
Ref or m Act of 1995. Such st atements ar e subj ect to cer tain
r isks and uncer taint ies w hich could cause act ual r esults to dif -
fer mater ially fr om t hose ant icipat ed. Reader s ar e cautioned
not to place undue r eliance on these f or w ar d- looking stat e-
ment s which speak only as of t he date her eof. The Company
under takes no obligation t o r epublish r ev ised f or war d- looking
st atements t o r eflect ev ents or cir cumst ances aft er the dat e
her eof or to r eflect t he occur r ence of unant icipat ed ev ents.
Reader s ar e also ur ged to car efully r eview and consider t he
var ious disclosur es made by the Company w hich descr ibe cer -
tain f act or s w hich aff ect the Company’ s business, including
the disclosur es made under the capt ion “ Cer tain Factor s
Aff ect ing Callaw ay Golf Company” in the “ Management’ s
Discussion and Analy sis of Financial Condit ion and Results of
Table of contents
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Page 1
... Callaway Golf 's primary products, which incorporate the S 2 H 2 ® design concept, currently include the Big Bertha® War Bird® Stainless Steel Metal Woods, Great Big Bertha® Titanium Metal Woods, Biggest Big Bertha™ Titanium Drivers, Big Bertha® X-12 ™ Irons and Great Big Bertha® Tungsten... -
Page 2
...1997 Net sales Pretax income Estimated U.S. ranking within industry-$ sales** Pretax income as a percent of sales Net income Net income as percent of sales... of an accounting change of $1,658 Estimated by Golf Pro Magazine *** Adjusted for all stock splits ** Net Sa les ( in millions) Net In c ... -
Page 3
... products - the Biggest Big Bertha™ Titanium Driver and the Great Big Bertha® Tungsten •Titanium™ Irons - represented more than 20% of 1997's sales. Use of Big Bertha® Drivers by professional tour players on the five major tours (PGA, Senior PGA, LPGA, NIKE, and PGA European Tours) in 1997... -
Page 4
... third Callaway Golf Performance Center opened in October, 1997, in Las Vegas, Nevada. T hese three new sites, along with the original Performance Center at our headquarters in Carlsbad, California, provide golfers with the information to evaluate which model of Callaway Golf club will work best for... -
Page 5
... ANALYSIS OF FINANCIAL C ONDIT ION AND RESULTS OF O PERAT IONS ... C ONSOLIDAT ED B ALANCE SHEET C ONSOLIDAT ED STAT EMENT C ONSOLIDAT ED STAT EMENT C ONSOLIDAT ED STAT EMENT NOT ES TO OF ... INCOME ... OF C ASH FLOWS ... OF SHAREHOLDERS' E QUIT Y ... C ONSOLIDAT ED F INANCIAL... -
Page 6
SE L E C T E D F I N AN C I AL D ATA (in thousands, except per share data) 1997 1996 Year ended December 31, 1995 1994 1993 Statement of Income Data: Net sales Cost of goods sold Gross profit Selling, general and administrative expenses Research and development costs Litigation settlement ... -
Page 7
... Titanium Drivers, and Great Big Bertha® Fairway Woods which were introduced in January 1996, combined with increased sales of Big Bertha® Irons. T hese sales increases were offset by a decrease in net sales of Big Bertha® War Bird® Metal Woods. For the year ended December 31, 1996, gross profit... -
Page 8
...operations and the new line of credit. current operations of Odyssey have lower margins than the Company has experienced historically. If sales of irons in general, or Great Big Bertha® Tungsten•T itaniumT M Irons in particular, as a percentage of the Company's total sales remain at these levels... -
Page 9
... any breakage or warranty problems are deemed significant to the Company, the incidence of clubs returned as a result of cracked clubheads, broken graphite shafts, loose medallions and other product problems to date has not been material in relation to the volume of Callaway Golf clubs which have... -
Page 10
... sales and financial performance. Professional Endorsement s The Company also establishes relationships with professional golfers in order to promote the Callaway Golf brand among both professional and amateur golfers. The Company has entered into endorsement arrangements with members of the Senior... -
Page 11
... adverse effect on the Company's operations and financial performance. Golf Ball Development In June 1996, the Company formed Callaway Golf Ball Company, a wholly-owned subsidiary of the Company, for the purpose of designing, manufacturing and selling golf balls. T he Company has previously licensed... -
Page 12
... liabilities: Accounts payable and accrued expenses Accrued employee compensation and benefits Accrued warranty expense Income...Stock, $.01 par value, 3,000,000 shares authorized, none issued and outstanding at December 31, 1997 and 1996 Common Stock, $.01 par value, 240,000,000 shares authorized... -
Page 13
...O M E (in thousands, except per share data) 1997 Year ended December 31, 1996 1995 Net sales Cost of goods sold Gross profit Selling expenses General and administrative expenses Research and development costs Litigation...,641 69,855 See accompanying notes to consolidated financial statements. 14 -
Page 14
...-cash compensation Tax benefit from exercise of stock options Deferred taxes Increase (decrease) in cash resulting from changes in: Accounts receivable, net Inventories, net Other assets Accounts payable and accrued expenses Accrued employee compensation and benefits Accrued warranty expense Income... -
Page 15
... from foreign currency Adjustment of GST shares to market value Net income Balance, December 31, 1996 Exercise of stock options Tax benefit from exercise of stock options Compensatory stock options Employee stock purchase plan Stock retirement Cash dividends Dividends on shares held by GST Equity... -
Page 16
...innovative golf clubs. Callaway Golf 's primary products include Big Bertha® Metal Woods with the War Bird® soleplate, Great Big Bertha® Titanium Metal Woods, Biggest Big BerthaT M Titanium Drivers, Big Bertha® Irons, Great Big Bertha® Tungsten•T itaniumT M Irons, Odyssey® putters and wedges... -
Page 17
... related to the Employee Stock Purchase Plan are calculated by dividing the average withholdings during the period by 85% of the lower of the offering period price or the market value at the end of the period. T he dilutive effect of rights to purchase preferred shares under the Callaway Golf... -
Page 18
... advantage of trends in yields and interest rates. T he Company operates in the golf equipment industry and primarily sells its products to golf equipment retailers. The Company performs ongoing credit evaluations of its customers' financial condition and generally requires no collateral from its... -
Page 19
...T he sale of these shares had no net impact on shareholders' equity. During the term of the GST , shares in the GST may be used to fund the Company's obligations with respect to one or more of the C ompany's non-qualified or qualified employee benefit plans. Shares owned by the GST are accounted for... -
Page 20
... market value of the stock at the date of grant. During 1996 and 1995, the Company granted options to purchase 600,000 and 500,000 shares, respectively, to two key officers, under sepa- rate plans, in conjunction with terms of their initial employment. At December 31, 1997, no shares were available... -
Page 21
...certain circumstances, to purchase Common Stock of Callaway Golf Company or of the acquiring company at a substantially discounted price ten days after a person or group publicly announces it has acquired or has tendered an offer for 15% or more of the Company's outstanding Common Stock. T he Rights... -
Page 22
... input assumptions can materially affect the fair value estimates, in management's opinion, the existing models do not necessarily provide a reliable single measure of the fair value of grants under the Company's employee stock-based compensation plans. NOT E 8 INCOME TAXES Income before income... -
Page 23
... all graphite shafts required in the manufacture of its golf clubs through May 199 8 . The Company has committed to purchase titanium golf clubheads costing approximately $73,714,000 from one of its vendors. T hese clubheads are to be shipped to the Company in accord with a production schedule that... -
Page 24
...T he Company is engaged in domestic and international sales through retail customers and distributors located within the following geographic areas: (in thousands) 1997 Year ended D ecember 31, 1996 1995 Note 14 SUBSEQUENT EVENTS United St at es Japan All others - individually less than 10% of net... -
Page 25
..., the accompanying consolidated balance sheet and the related consolidated statements of income, of cash flows and of shareholders' equity present fairly, in all material respects, the financial position of Callaway Golf Company and its subsidiaries at December 31, 1997 and 1996, and the results of... -
Page 26
... data) 1 st 2 nd Fiscal Year 1997 Q uart ers 3 rd 4 th Tot al Net Sales Gross Profit Net Income Earnings per common share* Basic Diluted...RELAT ED SHAREHOLDER M AT T ERS The Company's Common Shares are traded on the New York Stock Exchange (NYSE). The Company's symbol for its Common Shares is "ELY... -
Page 27
... Callaway Golf Company: Callaway Golf - Callaway - Big Bertha - Great Big Bertha - HeavenWood - Divine Nine - Ely Would - T he Tuttle - S2H2 - War Bird - You Can't Argue With Physics - Tru Bore - No Neck - T he Most Solid Feel in Golf - World's Friendliest Golf Clubs - H ow Golf Should Feel - Tuttle...