Callaway 1999 Annual Report Download - page 11

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9C ALLAWAY GOLF COMPANY
This last point brings me to tell you about something that happened over the last couple of years
that we don’t feel good about – the decline in the price of our stock on the NYSE. It began 1999 at
$10.25 and closed the year at $17.69 per share, but it has taken another big drop in early 2000.
In my book we are a far stronger company than ever before in comparison to our competition and in
all the “basics” that count for future growth and profitability. So I am a bit perplexed by our current
stock price. And I don’t think that I am alone, for this is a dilemma faced by many of America’s best
companies these days. It is my belief, and the belief of many, that we are on the right course for the
long term – that our shareholders will be reasonably rewarded if management continues to consider-
ably outperform our competition as we have done in the golf club business, and as I believe we will
do in the golf ball business.
But what else can we do about the price of our stock?
Some have suggested that we should be buying back our stock in the open market, going so far as to
argue that we should be willing to borrow hundreds of millions of dollars to do so. Now that we have
again achieved a level of success where we have a significant amount of cash in the bank and essen-
tially no debt, your Board of Directors and I are closely studying the possibility of again buying our
stock in the open market. However, the issue is not an easy one. In today’s changing environment, it
is no longer guaranteed, and perhaps not even likely, that a significant stock buy back will result in
increased share prices. Your Board of Directors and I will continue to review these issues because we
know they are important to all of you – as they are to us.
One thing is certain, however. We will not change our core philosophy that the best thing for the
stock price is to work hard to design, make and sell superior golf clubs and golf balls at prices that
generate reasonable growth and good profits.
I look forward to 2000 with great anticipation, excitement and optimism, and I hope you do as well.
May we all have good health and some good luck, and may our hard work and talent pay off for
all shareholders, our families, friends, employees and customers. We are glad you continue to be
interested in our Company.
Ely Callaway
Founder, Chairman and CEO
Callaway Golf Company