Callaway 2002 Annual Report Download - page 13

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Ye ar Ended Decem be r 31,
(In thousands, except per share data) 2002(1) 2001(2) 2000(3) 1999 1998
Statement of Operations Data:
Net sales $ 792,064 $ 816,163 $ 837,627 $ 719,038 $ 703,060
Cost of sales 393,068 411,585 440,119 384,265 410,341
Gross profit 398,996 404,578 397,508 334,773 292,719
Selling, general and administrative expenses 256,733 259,364 240,874 221,043 241,775
Research and development expenses 32,182 32,697 34,579 34,002 36,848
Restructuring (credits) expenses — — — (5,894) 54,235
Sumitomo transition expenses — — — 5,713 —
Income (loss) from operations 110,081 112,517 122,055 79,909 (40,139)
Interest and other income, net 3,250 7,149 8,791 9,182 3,911
Interest expense (1,660) (1,552) (1,524) (3,594) (2,671)
Unrealized energy derivative losses — (19,922) — — —
Income (loss) before income taxes and
cumulative effect of accounting change 111,671 98,192 129,322 85,497 (38,899)
Income tax provision (benefit) 42,225 39,817 47,366 30,175 (12,335)
Income (loss) before cumulative effect of accounting change 69,446 58,375 81,956 55,322 (26,564)
Cumulative effect of accounting change — — (957) — —
Net income (loss) $ 69,446 $ 58,375 $ 80,999 $ 55,322 $ (26,564)
Earnings (loss) per common share:
Basic
Income (loss) before cumulative effect of accounting change $ 1.04 $ 0.84 $ 1.17 $ 0.79 $ (0.38)
Cumulative effect of accounting change — — (0.01) — —
Net income (loss) $ 1.04 $ 0.84 $ 1.16 $ 0.79 $ (0.38)
Diluted
Income (loss) before cumulative effect of accounting change $ 1.03 $ 0.82 $ 1.14 $ 0.78 $ (0.38)
Cumulative effect of accounting change — — (0.01) — —
Net income (loss) $ 1.03 $ 0.82 $ 1.13 $ 0.78 $ (0.38)
Dividends paid per share $ 0.28 $ 0.28 $ 0.28 $ 0.28 $ 0.28
De ce mber 31,
(In thousands) 2002 2001 2000 1999 1998
Balance Sheet Data:
Cash and cash equivalents $ 108,452 $ 84,263 $ 102,596 $ 112,602 $ 45,618
Marketable securities $ — $ 6,422 $ — $ — $ —
Working capital $ 259,866 $ 252,817 $ 233,163 $ 205,198 $ 139,598
Total assets $ 679,845 $ 647,602 $ 630,934 $ 616,783 $ 655,827
Long-term liabilities $ 27,297 $ 31,379 $ 9,884 $ 11,575 $ 18,723
Total shareholders’ equity $ 543,387 $ 514,349 $ 511,744 $ 499,934 $ 453,096
(1) For 2002, the Company’s gross profit, net income and earnings per common share include the effect of the change in accounting estimate for the Company’s warranty accrual. During the third
quarter of 2002, the Company reduced its warranty reserve by approximately $17.0 million, pre-tax (see Note 3 to the Consolidated Financial Statements).
(2) For 2001, the Company’s net income and earnings per common share include the recognition of unrealized energy contract losses due to changes in the estimated fair value of the energy contract
based on market rates. During the second and third quarters of 2001, the Company recorded $6.4 million and $7.8 million, respectively, of after-tax unrealized losses. During the fourth quarter of 2001,
the Company terminated the energy contract. As a result, the Company will continue to reflect the derivative valuation account on its balance sheet with no future valuation adjustments for changes
in market rates, subject to periodic review (see Notes 7 and 12 to the Consolidated Financial Statements).
(3) The Company adopted Staff Accounting Bulletin No. 101, “Revenue Recognition in Financial Statements” (“SAB No. 101”) in the fourth quarter of 2000 with an effective date of January 1, 2000. As a
result of the adoption of SAB No. 101, the Company recognized a cumulative effect adjustment of $1.0 million in the Consolidated Statement of Operations for the year ended December 31, 2000 to
reflect the change in the Company’s revenue recognition policy from shipping point to the time both legal and practical risk of loss transfers to the customer (see Note 2 to the Consolidated Financial
Statements).
10 CALLAWAY GOLF COMPANY
Selecte d Fina ncial Da ta
The following statements of operations data and balance sheet data for the five years ended December 31, 2002 were derived from the Company’s audited
consolidated financial statements. Consolidated balance sheets at December 31, 2002 and 2001 and the related consolidated statements of operations and
of cash flows for each of the three years in the period ended December 31, 2002 and notes thereto appear elsewhere in this report. The data should be
read in conjunction with the annual consolidated financial statements, related notes and other financial information appearing elsewhere in this report.