Callaway 2001 Annual Report Download - page 49

Callaway Golf Company
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Recent Accounting Pronouncements In June 2001, the FASB issued SFAS No.
141, “Business Combinations,” and SFAS No. 142, “Goodwill and Other
Intangible Assets.” SFAS No. 141 requires all business combinations initiated
after June 30, 2001 to be accounted for using the purchase method. SFAS No.
142 requires the use of a non-amortization approach to account for goodwill
and other intangible assets with indefinite lives. In addition, SFAS No. 142
requires that acquired intangible assets be separately identified and amortized
over their individual useful lives. The Company was required to adopt these
statements beginning January 1, 2002. In accordance with SFAS No. 142, good-
will and other intangible assets with indefinite lives that were being amortized
over periods ranging from five to 40 years follow the non-amortization approach
effective January 1, 2002. Other intangible assets with indefinite lives include
trademark, trade name and trade dress. At December 31, 2001, the carrying
value of unamortized goodwill and other intangible assets with indefinite lives
was $16,846,000 and $88,590,000, respectively. For the year ended December
31, 2001, amortization expense of $3,588,000 and $2,487,000 was recorded for
goodwill and other intangible assets with indefinite lives, respectively.
In August 2001, the FASB issued SFAS No. 144,“Accounting for the Impairment
or Disposal of Long-Lived Assets.” SFAS No. 144 addresses the financial
accounting and reporting for the impairment or disposal of long-lived assets.
SFAS No. 144 supersedes SFAS No. 121 but retains SFAS No. 121's fundamental
provisions for (a) recognition/measurement of impairment of long-lived assets
to be held and used and (b) measurement of long-lived assets to be disposed of
by sale. SFAS No. 144 also supersedes the accounting/reporting provisions of
Accounting Principles Board (“APB”) Opinion No. 30 for segments of a busi-
ness to be disposed of but retains APB Opinion No. 30's requirement to report
discontinued operations separately from continuing operations and extends
that reporting to a component of an entity that either has been disposed of or is
classified as held for sale. SFAS No. 144 became effective for the Company begin-
ning January 1, 2002. Adoption of SFAS No. 144 as of January 1, 2002 did not have
a material impact on the Company’s results of operations and financial position.
Reclassifications Certain prior period amounts have been reclassified to
conform with the current period presentation.
NOTE 3
Selected Financial Statement Information
(in thousands) December 31,
2001 2000
Accounts receivable, net:
Trade accounts receivable $ 53,810 $ 65,063
Allowance for doubtful accounts (5,157) (6,227)
$ 48,653 $ 58,836
Inventories, net:
Raw materials $ 67,336 $ 56,936
Work-in-process 2,179 1,293
Finished goods 105,381 83,453
174,896 141,682
Reserve for excess and obsolescence (7,136) (7,720)
$ 167,760 $ 133,962
Property, plant and equipment, net:
Land $ 10,533 $ 12,358
Buildings and improvements 84,687 90,301
Machinery and equipment 67,329 60,399
Furniture, computers and equipment 65,300 65,140
Production molds 31,371 25,610
Construction-in-process 7,025 5,766
266,245 259,574
Accumulated depreciation (132,995) (124,862)
$ 133,250 $ 134,712
Intangible assets, net:
Trade name $ 69,629 $ 69,629
Trademark and trade dress 29,841 29,841
Goodwill 29,313 24,761
Patents and other 22,067 10,970
150,850 135,201
Accumulated amortization (29,537) (21,441)
$ 121,313 $ 113,760
Accounts payable and accrued expenses:
Accounts payable $ 7,892 $ 5,552
Accrued expenses 30,369 38,621
$ 38,261 $ 44,173
Accrued employee compensation and benefits:
Accrued payroll and taxes $ 19,313 $ 16,178
Accrued vacation and sick pay 5,068 5,111
Accrued commissions 920 1,285
$ 25,301 $ 22,574