Callaway 2002 Annual Report Download - page 7

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Despite having some great new products and some opportunities
to further improve our business practices, I think we must be guarded
in our expectations for 2003.
Why the caution? While we believe things could turn around, we
cannot count on improvement in the economies in the United States
and Japan. We do not know what the long-term impact of the war in
Iraq will be. We do not fully understand the implications of the
nuclear activity in North Korea, but we do know they will not
positively impact consumer behavior. And we do not know what
new actions might be taken by the ruling bodies in golf, although
limitations on both clubs and balls have been areas of focus recently.
In this environment, we cannot plan for growth in rounds played or
for changes in the short-term pricing and close-out strategies of
some of our competitors. We will continue to fight for improvements
in a tough marketplace and continue working on all aspects of our
operations while making prudent investments in our brand. In short,
we will be weathering the storm as better days lie ahead, though we
do not see them in the short term.
As part of our efforts to achieve successes in 2003 despite tough
conditions, we will continue to invest in Six Sigma practices through-
out the Company. This commitment to Six Sigma implementation is
helping us control our costs and make ourselves more efficient.
We are taking our new “Trade In / Trade Up” program, which we
tested in 2002, and rolling it out broadly in 2003. Under this program,
retailers give consumers a credit on used Callaway Golf clubs that
can be applied toward the purchase of new Callaway Golf products.
The retailer can then either sell the used clubs to another consumer
or to a third party operating the callawaygolfpre-owned.com website.
We have a very strong new line up of products that includes our
new Great Big Bertha II Titanium Driver and Fairway Woods, new
Steelhead X-16 Irons (replacing the X-14 Irons) in both regular
(offset) and Pro Series (less offset) models, new models of White Hot
Putters that incorporate the features of the highly successful 2-Ball
Putter, and new line of Odyssey DFX Putters (replacing Odyssey
Dual Force Putters) that incorporate a new generation of Stronomic
inserts in various models.
However, one thing we will not do in 2003 is chase revenues
or market share at any cost. We believe you employ us to earn
profits, and we take pride in our results as measured against
Th e Odyssey White Hot
2-Ba ll Pu tt er
4 CALLAWAY GOLF COMPANY