Callaway 1999 Annual Report Download - page 46

44 CALLAWAY GOLF COMPANY
obligations of $10,373,000. The excess of the purchase price
over net assets acquired of $20,935,000 was allocated to
goodwill and is being amortized over estimated useful lives of
three to 10 years. These acquisitions, along with the acquisi-
tion of the remaining 80% interest in All-American (discussed
below) are not considered significant business combinations.
Accordingly, pro forma financial information is not presented.
In May 1998, the Company acquired for $4,526,000 the
remaining 80% interest in All-American, which operates a
nine-hole golf course, performance center, training facility and
driving range located in Las Vegas, Nevada. On December 30,
1998, as part of its business plan to discontinue certain non-
core business activities, the Company sold the business of
All-American in exchange for barter trade credits, which were
recorded at the fair market value of the asset exchanged. The
Company recorded a loss on the disposition of this business of
$10,341,000 in December 1998 (Note 12).
On August 8, 1997, the Company consummated its acqui-
sition of substantially all of the assets and certain liabilities of
Odyssey Sports, Inc., by its wholly-owned subsidiary, Odyssey,
subject to certain adjustments as of the time of closing.
Odyssey’s results of operations have been included in the
Company’s consolidated results of operations since August 8,
1997. Odyssey manufactured and marketed the Odyssey®line
of putters and wedges with Stronomic®and Lyconite®face
inserts. During 1998, as part of its restructuring plan, the oper-
ations of Odyssey were consolidated into that of the Company,
while maintaining the distinct and separate Odyssey®brand.
In 1999, Odyssey was dissolved as a corporate entity and as a
subsidiary.
The cost to acquire substantially all of the assets and cer-
tain liabilities of Odyssey Sports, Inc., including professional
fees directly related to the acquisition, was approximately
$129,256,000 and has been accounted for using the purchase
method of accounting. Amounts allocated to trade name,
trademark, trade dress and goodwill are being amortized on
the straight-line basis over 40 years. The amounts allocated to
the process patent and covenant not to compete are being
amortized on the straight-line basis over 16 and three years,
respectively.
The following unaudited pro forma net sales, net income
and earnings per share data for the year ended December 31,
1997 are based on the respective historical financial state-
ments of the Company and Odyssey Sports, Inc. The pro forma
data presented for the year ended December 31, 1997 com-
bines the results of operations of the Company for the year
ended December 31, 1997 with the results of operations of
Odyssey Sports, Inc. for the ten months ended August 7, 1997
and the results of Odyssey for the two months ended
September 30, 1997 and assumes that the acquisition of sub-
stantially all of the assets and certain liabilities of Odyssey
Sports, Inc. occurred on January 1, 1997.
The pro forma financial data presented are not necessar-
ily indicative of the Company’s results of operations that might
have occurred had the transaction been completed at the
beginning of the period specified, and do not purport to repre-
sent what the Company’s consolidated results of operations
might be for any future period.
(in thousands, except per share data) Year Ended
December 31,
1997
(unaudited)
Net sales $884,840
Net income $134,512
Earnings per common share:
Basic $1.97
Diluted $1.88
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS