Callaway 2007 Annual Report Download - page 85

consolidation of the Callaway Golf, Odyssey, Top-Flite and Ben Hogan selling functions, as well as the
elimination or reduction of other operating expenses. The 2005 Restructuring Initiatives and estimated charges
for such initiatives are in addition to the previously reported integration of the Callaway Golf and Top-Flite
operations and the charges for such integration.
In connection with the 2005 Restructuring Initiatives, the Company committed to staff reductions that
involved the elimination of approximately 500 positions worldwide, including full-time and part-time employees,
temporary staffing and open positions. In the aggregate, the Company recorded charges to pre-tax earnings of
$12,243,000 in connection with the 2005 Restructuring Initiatives. Of this amount, approximately $896,000,
$3,023,000 and $8,324,000 were incurred in 2007, 2006 and 2005, respectively.
The activity and liability balances recorded as part of the 2005 Restructuring Initiatives were as follows (in
thousands):
Workforce
Reductions
Facility
and Other Total
Charges to cost and expense ........................................ $7,119 $ 1,205 $ 8,324
Non-cash items ................................................... — (1,024) (1,024)
Cash payments ................................................... (3,682) (181) (3,863)
Restructuring balance, December 31, 2005 ............................. 3,437 — 3,437
Charges to cost and expense ........................................ 2,507 516 3,023
Non-cash items ................................................... — (216) (216)
Cash payments ................................................... (3,798) (300) (4,098)
Restructuring balance, December 31, 2006 ............................. 2,146 — 2,146
Charges to cost and expense ........................................ 260 636 896
Non-cash items ................................................... — — —
Cash payments ................................................... (2,157) (636) (2,793)
Restructuring balance, December 31, 2007 ............................. $ 249 $ — $ 249
The Company has incurred in the aggregate approximately $69,032,000 of non-cash charges for the
acceleration of depreciation on certain golf ball manufacturing equipment and cash charges related to severance
and facility consolidations in connection with the Company’s full integration of the Callaway Golf ball
manufacturing with the Top-Flite golf ball manufacturing at the Chicopee, Massachusetts and Gloversville, New
York locations (the “Top-Flite Integration Initiatives”). The Company recorded charges to pre-tax earnings of
$4,039,000 and $12,413,000 during 2006 and 2005, respectively. There were no charges incurred during 2007.
The activity and liability balances recorded as part of the Top-Flite Integration Initiatives were as follows
(in thousands):
Workforce
Reductions
Facility
and
Other Total
Integration balance, December 31, 2004 ................................ $ 554 $ — $ 554
Charges to cost and expense ......................................... 1,241 11,172 12,413
Non-cash payments ................................................ — (7,011) (7,011)
Cash payments ................................................... (1,795) (2,572) (4,367)
Integration balance, December 31, 2005 ................................ — 1,589 1,589
Charges to cost and expense ......................................... — 4,039 4,039
Non-cash payments ................................................ — (1,456) (1,456)
Cash payments ................................................... — (2,583) (2,583)
Integration balance, December 31, 2006 ................................ $ — $ — $ —
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