Callaway 2007 Annual Report Download - page 15

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Products
The Company designs, manufactures and sells high quality golf clubs and golf balls and also sells golf
footwear and accessories. The Company designs its products to be technologically-advanced and in this regard
invests a considerable amount in research and development each year. The Company’s products are designed for
golfers of all skill levels, both amateur and professional.
The following table sets forth the contribution to net sales attributable to the principal product groups for the
periods indicated:
Year Ended December 31,
2007 2006 2005
(In millions)
Drivers and fairway woods ...................... $ 305.9 27% $ 266.5 26% $241.3 24%
Irons ........................................ 309.6 28% 288.0 28% 316.5 32%
Putters ...................................... 109.1 10% 102.7 10% 109.3 11%
Golf balls .................................... 213.1 19% 214.8 21% 214.7 22%
Accessories and other .......................... 186.9 17% 145.9 15% 116.3 12%
Net sales ..................................... $1,124.6 100% $1,017.9 100% $998.1 100%
For a discussion regarding the changes in net sales for each product group from 2007 to 2006 and from 2006
to 2005, see below, “Management’s Discussion and Analysis of Financial Condition and Results of Operations—
Results of Operations” contained in Item 7.
The Company’s current principal products by product group are described below:
Drivers and Fairway Woods. This product category includes sales of the Company’s drivers, fairway woods
and hybrid products, which are sold under the Callaway Golf, Top-Flite and Ben Hogan brands. These products
are generally made of metal (either titanium or steel) or a combination of metal and a composite material. The
Company’s products compete at various price levels in the drivers and fairway woods category. In general,
composite/metal drivers, fairway woods and hybrids sell at higher price points than titanium drivers and fairway
woods, and titanium products sell at higher price points than steel products. The Company’s drivers, fairway
woods and hybrid products are available in a variety of lofts, shafts and other specifications to accommodate the
preferences and skill levels of all golfers. All of the Company’s current drivers, fairway woods and hybrid
products conform to the current rules of the United States Golf Association (the “USGA”) or the Royal and
Ancient Golf Club of St. Andrews (the “R&A”), as applicable to the markets in which the products are intended
to be sold.
Irons. This product category includes sales of the Company’s irons and wedges, which are sold under the
Callaway Golf, Top-Flite and Ben Hogan brands. The Company’s irons are generally made of metal (either
titanium, steel or special alloy) or a composite material (a combination of metal and polymer materials). The
Company’s products compete at various price levels in the irons category. In general, the Company’s composite
metal irons and titanium irons sell at higher price points than its steel irons. The Company’s irons are available in
a variety of lofts, shafts and other specifications to accommodate the preferences and skill levels of all golfers.
All of the Company’s current iron products conform to the current rules of the USGA and the R&A.
Putters. This product category includes sales of the Company’s putters, which are sold under the Odyssey,
Callaway Golf, Top-Flite and Ben Hogan brands. The Company’s products compete at multiple price levels in
the putters category. The Company’s putters are available in a variety of styles, shafts and other specifications to
accommodate the preferences and skill levels of all golfers. All of the Company’s current putter products
conform to the current rules of the USGA and the R&A.
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