Callaway 1998 Annual Report Download - page 38

CALLAWAY GOLF COMPANY
36
The 1996 results for the Company’s Golf Ball and
All Other segments were not material.
The Company markets its products domestically
and internationally, with its principal international mar-
kets being Asia and Europe. The table below contains
information about the geographical areas in which the
Company operates. Revenues are attributed to countries
based on location in which the sale originated, except as
indicated below. Long-lived assets are based on the
country of domicile.
The Company, through a distribution agreement,
appointed Sumitomo Rubber Industries, Ltd.
(“Sumitomo”) as the sole distributor of Callaway®golf
clubs in Japan. Odyssey®brand products are sold
through the Company’s wholly-owned Japanese sub-
sidiary, ERC International Company. The distribution
agreement requires Sumitomo to purchase specified
minimum quantities. The current distribution agree-
ment began in February 1993 and ends on December
31, 1999. In 1998, 1997, and 1996, sales to Sumitomo
accounted for 8%, 10% and 9%, respectively, of the
Company’s net sales.
(in thousands)
1998 Sales Long-Lived Assets
United States (excluding exports) $ 437,628 $ 277,611
Japan* 61,460 857
United Kingdom 64,077 3,998
Other foreign countries 134,456 18,107
Total $ 697,621 $ 300,573
1997 Sales Long-Lived Assets
United States (excluding exports) $ 547,256 $ 250,548
Japan* 84,634 61
United Kingdom 56,194 478
Other foreign countries 154,843 3,557
Total $ 842,927 $ 254,644
 Sales Long-Lived Assets
United States (excluding exports) $ 460,611 $ 90,840
Japan (includes direct U.S. shipments) 58,156
United Kingdom 37,668 324
Other foreign countries 122,077 4,459
Total $ 678,512 $ 95,623
*Includes both sales from the Company’s wholly-owned Japanese subsidiary,
ERC International, and direct U.S. shipments to Japan.
(in thousands)
1998 Golf Clubs Golf Balls All Other Consolidated
Net sales $697,621 $697,621
Income (loss) before tax 9,182 $(22,426) $(25,655) (38,899)
Interest income 1,564 7 1,571
Interest expense (2,252) (419) (2,671)
Depreciation and amortization 34,121 1,072 692 35,885
Additions to long-lived assets 39,854 47,721 1,408 88,983
1997 Golf Clubs Golf Balls All Other Consolidated
Net sales $842,927 $842,927
Income (loss) before tax 222,771 $(9,013) 7 213,765
Interest income 4,703 4,703
Interest expense (10) (10)
Depreciation and amortization 19,219 84 105 19,408
Additions to long-lived assets 166,461 10,263 823 177,547
NOTE 14
SEGMENT INFORMATION
The Company’s operating segments are organized on the basis of products and include golf clubs and golf balls. The golf clubs
segment consists of Callaway®titanium and steel metal woods and irons, Callaway®and Odyssey®putters and wedges, and
sales of related accessories. The golf balls segment consists of golf balls that are to be designed, manufactured, marketed and
distributed by the Company’s wholly-owned subsidiary, Callaway Golf Ball Company. All Other segments, including inter-
active golf sites, golf book publishing, new player development and a driving range venture, are aggregated as they do not
meet requirements for separate disclosure as set forth in SFAS No. 131. In accordance with its restructuring plan, the
Company is no longer pursuing these initiatives (Note 11). There are no significant intersegment transactions. The table
below contains information utilized by management to evaluate its operating segments.