Callaway 2004 Annual Report Download - page 16

Download and view the complete annual report

Please find page 16 of the 2004 Callaway annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 106

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106

Licensing
The Company from time to time licenses its trademarks and service marks to third parties for use on
products such as golf apparel, golf shoes, watches, luggage and other golf related products, such as headwear,
travel bags, golf towels and golf umbrellas. The Company has a current licensing arrangement with Ashworth,
Inc. for a complete line of Callaway Golf men's and women's apparel for distribution in the United States,
Canada, Europe, Australia, New Zealand and South Africa. The Ñrst full year in which the Company received
royalty revenue under this licensing arrangement was 2003. The Company also has a current licensing
arrangement with Sanei International Co., Ltd. (""Sanei'') for a complete line of Callaway Golf men's and
women's apparel for distribution in Asian PaciÑc countries including Japan, Korea, Hong Kong, Taiwan,
Singapore, Indonesia, Malaysia, Thailand, Vietnam, the Philippines, Brunei, Myanmar and China.
In addition to apparel, the Company has also entered into licensing arrangements with (i) Tour Golf
Group, Inc. for a Callaway Golf footwear collection, (ii) Fossil, Inc. for a line of Callaway Golf watches and
clocks, (iii) TRG Accessories, LLC for a collection consisting of luggage, personal leather products and skin
protection products and (iv) Global Wireless Entertainment, Inc. for the creation of golf-related software and
applications for wireless handheld devices and platforms. In 2003, as part of the Top-Flite Acquisition, the
Company assumed certain license agreements Top-Flite had previously entered into with third parties to
license, among other things, the use of its Top-Flite and Ben Hogan marks on apparel, souvenirs and gifts.
Employees
As of December 31, 2004, the Company and its subsidiaries had approximately 3,000 full-time
employees. In addition, the Company employs temporary personnel to manage the seasonal Öuctuations of its
business.
Historically, Callaway Golf employees have not been represented by unions. The Top-Flite manufactur-
ing employees in Chicopee, Massachusetts, however, are unionized. Shortly after the Top-Flite Acquisition
was consummated the Company negotiated a new collective bargaining agreement with the union in Chicopee
which is not scheduled to expire until September 30, 2008. In addition, the Company's production employees
in Canada and Australia are also unionized. The Company considers its employee relations to be good.
Access to SEC Filings through Company Website
Interested readers can access the Company's annual reports on Form 10-K, quarterly reports on
Form 10-Q, current reports on Form 8-K, and any amendments to those reports Ñled or furnished pursuant to
Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (the ""Exchange Act'') through the Investor
Relations section of the Company's website at www.callawaygolf.com. These reports can be accessed free of
charge from the Company's website as soon as reasonably practicable after the Company electronically Ñles
such materials with, or furnishes them to, the Securities and Exchange Commission. In addition, the
Company's Corporate Governance Guidelines, Code of Conduct and the written charters of the committees of
the Board of Directors are available in the Corporate Governance portion of the Investor Relations section of
the Company's website and are available in print to any shareholder who requests a copy. The information
contained on the Company's website shall not be deemed to be incorporated into this report.
Additional Factors AÅecting the Company's Business
The Ñnancial statements contained in this report and the related discussion describe and analyze the
Company's Ñnancial performance and condition for the periods indicated. For the most part, this information
is historical. The Company's prior results are not necessarily indicative of the Company's future performance
or Ñnancial condition. The Company therefore has included in this report at Part II Item 7 ""Management's
Discussion and Analysis of Financial Condition and Results of Operations Ì Certain Factors AÅecting
Callaway Golf Company'' a discussion of certain factors which could aÅect the Company's future perform-
ance or Ñnancial condition. These factors could cause the Company's future performance or Ñnancial
condition to diÅer materially from its prior performance or Ñnancial condition or from management's
expectations or estimates of the Company's future performance or Ñnancial condition. These factors, among
7