Callaway 2011 Annual Report Download - page 46

Download and view the complete annual report

Please find page 46 of the 2011 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 118

  • 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
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118

Management believes it is making the changes that are necessary to take the Company back to a strong
leadership position in the golf equipment industry and that the increased investment in brand and demand
creation initiatives will generate higher sales which together with savings from its Reorganization and
Reinvestment Initiatives, the continued strength of the Company’s brands in the marketplace, the new technology
embedded in the Company’s 2012 products, and anticipated increased efficiency in its supply and distribution
operations resulting from the completion of the Company’s Global Operations Strategy Initiatives (the “GOS
Initiatives”) this year should result in much improved 2012 financial performance for the Company.
Years Ended December 31, 2011 and 2010
Net sales for the year ended December 31, 2011 decreased $81.2 million (8%) to $886.5 million compared
to $967.7 million for the year ended December 31, 2010. This decrease was due to a decline in sales in the golf
clubs and golf balls segments, as noted below (dollars in millions):
Years Ended
December 31, Decline
2011 2010(1) Dollars Percent
Net sales
Golf clubs ..................................................... $726.1 $791.1 $(65.0) (8)%
Golf balls ..................................................... 160.4 176.6 (16.2) (9)%
$886.5 $967.7 $(81.2) (8)%
(1) Certain prior period amounts have been reclassified to conform to the current year presentation.
For further discussion of each operating segment’s results, see “Golf Club and Golf Ball Segments Results”
below.
Net sales information by region is summarized as follows (dollars in millions):
Years Ended
December 31,
Growth
(Decline)
2011 2010 Dollars Percent
Net sales:
United States ................................................... $419.4 $468.2 $(48.8) (10)%
Europe ........................................................ 133.6 130.1 3.5 3%
Japan ......................................................... 149.8 164.8 (15.0) (9)%
Rest of Asia ................................................... 82.7 89.5 (6.8) (8)%
Other foreign countries ........................................... 101.0 115.1 (14.1) (12)%
$886.5 $967.7 $(81.2) (8)%
Net sales in the United States decreased $48.8 million (10%) to $419.4 million during 2011 compared to
2010. This decrease was primarily due to the timing of planned product launches as well as an unfavorable shift
in the competitive landscape driven by the success of certain competitor products launched in 2011. The
Company’s sales in regions outside of the United States decreased $32.4 million (6%) to $467.1 million during
2011 compared to the prior year. This decrease was largely caused by an unfavorable shift in the competitive
landscape combined with the natural disasters in Japan, Australia and in South East Asia in 2011. These
decreases were partially offset by increases in sales in Europe and in some of the Company’s emerging markets
(China and India). The Company’s reported net sales in regions outside the United States during 2011 were
favorably affected by the translation of foreign currency sales into U.S. dollars based upon 2011 exchange rates.
32