Callaway 2009 Annual Report Download - page 15

Financial Information about Segments and Geographic Areas
Information regarding the Company’s segments and geographic areas in which the Company operates is
contained in Note 18 to the Company’s Consolidated Financial Statements for the years ended December 31,
2009, 2008 and 2007 (“Consolidated Financial Statements”), which note is incorporated herein by this reference
and is included as part of Item 8—“Financial Statements and Supplementary Data.”
Products
The Company designs, manufactures and sells high quality golf clubs and golf balls, and designs and sells
golf 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,
2009 2008 2007
(Dollars in millions)
Drivers and fairway woods ...................... $223.6 24% $ 268.3 24% $ 305.9 27%
Irons ........................................ 234.0 25% 308.5 28% 309.6 27%
Putters ....................................... 98.1 10% 101.7 9% 109.1 10%
Golf balls .................................... 180.9 19% 223.1 20% 213.1 19%
Accessories and other ........................... 214.2 22% 215.6 19% 186.9 17%
Net sales ..................................... $950.8 100% $1,117.2 100% $1,124.6 100%
For a discussion regarding the changes in net sales for each product group from 2009 to 2008 and from 2008
to 2007, 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, metal
drivers, fairway woods and hybrids that incorporate composite materials 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, titanium and special alloy 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.
The USGA and the R&A recently changed the Rules of Golf to gradually eliminate the use of certain groove
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