Callaway 2010 Annual Report Download - page 120

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(2) The Company has been actively implementing certain initiatives targeted at improving gross margins (see
Note 3). In connection with these initiatives, for the years ended December 31, 2010, 2009 and 2008, the
Company incurred total pre-tax charges of $14,816,000, $6,156,000 and 12,710,000, respectively. Of these
total charges, the Company’s golf clubs segment absorbed $12,065,000, $4,644,000 and $5,996,000,
respectively, and the Company’s golf balls segment absorbed $762,000, $1,512,000 and $6,538,000,
respectively.
(3) In connection with certain workforce reductions completed during the years ended December 31, 2010 and
2009, the Company’s golf clubs segment absorbed pre-tax charges of $1,261,000 and $3,104,000,
respectively, and the Company’s golf balls segment absorbed pre-tax charges of $243,000 and $894,000,
respectively.
(4) Represents corporate general and administrative expenses and other income (expense) not utilized by
management in determining segment profitability. In 2010, the reconciling items include a pre-tax
impairment charge of $7,547,000 in connection with certain trademarks and trade names (see Note 9). In
2008, the reconciling items include a one-time pre-tax reversal of $19,922,000 in connection with the
Company’s termination of a long-term energy supply contract (see Note 11).
(5) Identifiable assets are comprised of net inventory, certain property, plant and equipment, intangible assets
and goodwill. Reconciling items represent unallocated corporate assets not segregated between the two
segments.
(6) Includes property classified as available for sale in the amount of $1,500,000 in 2010, and $1,890,000 in
both 2009 and 2008, respectively. Property held for sale represents the net book value of the golf ball
manufacturing facility in Gloversville, New York as a result of the Company’s announcement in May 2008
to close this facility (see Note 3).
The Company’s net sales by product category are as follows:
Year Ended December 31,
2010 2009(1) 2008
(In thousands)
Net sales
Drivers and Fairway Woods .................................. $225,438 $222,590 $ 268,286
Irons ..................................................... 223,773 232,935 308,556
Putters ................................................... 106,178 98,134 101,676
Golf Balls ................................................ 176,475 178,450 223,075
Accessories and Other ....................................... 235,792 218,690 215,611
$967,656 $950,799 $1,117,204
(1) Certain costs associated with gift card promotions have been reclassified from accessories and other into the
applicable product categories to conform with the current period presentation. The Company’s gift card
promotions during 2008 did not have a material impact to the Company’s results of operations and
therefore, the amounts presented for 2008 were not impacted by this reclassification.
F-42