Callaway 2002 Annual Report Download - page 70

(In thousands) Sales Long-Lived Assets
2002
United States $ 438,692 $ 263,706
Japan 102,624 3,791
Europe 136,941 16,477
Rest of Asia 58,040 1,000
Other foreign countries 55,767 3,683
$ 792,064 $ 288,657
2001
United States $ 444,091 $ 234,281
Japan 130,706 3,415
Europe 118,417 13,261
Rest of Asia 63,928 729
Other foreign countries 59,021 2,877
$ 816,163 $ 254,563
2000
United States $ 451,264 $ 228,920
Japan 122,003 3,229
Europe 125,511 11,229
Rest of Asia 82,371 994
Other foreign countries 56,478 3,164
$ 837,627 $ 247,536
Note 14. Lic e n sing Arra ng e m e nts
In 2001, the Company and Nordstrom, Inc. mutually terminated
their prior licensing arrangement, which included men’s and
women’s golf apparel, men’s footwear and sun and skin care
products. Also in 2001, the Company entered into an exclusive
licensing arrangement with Ashworth, Inc. for the creation of a
complete line of men’s and women’s apparel for distribution in
the United States, Canada, Europe, Australia, New Zealand and
South Africa. In addition, the Company also entered into a
long-term licensing agreement with Sanei International Co.,
Ltd. to create and sell Callaway Golf apparel in Japan. The
Company’s golf apparel products were available at retail begin-
ning in 2002. The first full year for which the Company will receive
royalty revenue under these licensing arrangements is 2003.
In 2002, the Company extended its apparel licensing arrangement
within the Asian markets by entering into another long-term
licensing agreement with Sanei International Co., Ltd. to create
and sell Callaway Golf apparel in South Korea beginning in
2003. Also in 2002, the Company entered into an exclusive
licensing arrangement with Tour Golf Group, Inc. for the
creation of a golf footwear collection for initial distribution in
the United States and Canada beginning in March 2003 and
entered into an exclusive licensing arrangement with TRG
Accessories, LLC for the creation of a collection consisting of
luggage, personal leather products and skin protection products
for distribution in the United States, Canada, Europe and Asia
beginning in late 2003.
Note 15. Tran s actions w ith Re la t ed Partie s
A director of the Company is also a retired partner of a law firm
which performs legal services for the Company. Legal fees
incurred with this law firm totaled $1,095,000, $351,000 and
$469,000 in 2002, 2001 and 2000, respectively. Another director
of the Company is also a senior managing director of an
investment bank which performed services for the Company.
There were no investment banking fees incurred with this
investment bank in 2002 and 2000; however, fees paid in 2001
totaled $557,000.
The Callaway Golf Company Foundation (the “Foundation”)
oversees and administers charitable giving for the Company
and makes grants to carefully selected organizations. Directors
and executive officers of the Company also serve as directors
of the Foundation and the Company’s employees provide
accounting and administrative services for the Foundation. In
2002, the Company recognized a charitable contribution
expense of $1,165,000 as a result of its unconditional promise
to contribute such amount to the Foundation. As of December
31, 2002, the Company had paid $364,000 of the contribution.
The remaining $801,000 was paid in 2003. In 2001 and 2000,
the Company donated $1,000,000 and $288,000, respectively, to
the Foundation.
CALLAWAY GOLF COMPANY 67
The Company markets its products in the United States and
internationally, with its principal international markets being
Japan and Europe. The tables below contain information about
the geographical areas in which the Company operates.
Revenues are attributed to the location to which the product was
shipped. Long-lived assets are based on location of domicile.