Callaway 2011 Annual Report Download - page 51

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procurement of golf balls, partially offset by favorable changes in foreign currency rates in 2011. In addition, in
2011, the golf balls operating segment absorbed $1.3 million in charges related to the Company’s Reorganization
and Reinvestment Initiatives, most of which was recognized in operating expenses.
Years Ended December 31, 2010 and 2009
Net sales in 2010 increased by $16.9 million (2%) to $967.7 million compared to $950.8 million in 2009.
Global economic conditions continued to be challenging during the current year and the golf industry overall did
not recover in 2010 as the Company’s management had anticipated at the beginning of the year. Although the
unfavorable economic and industry conditions significantly affected sales volumes in 2010, favorable foreign
currency rates and an overall increase in average selling prices, as a result of less promotional activity, were able
to offset the volume decline. Net sales were favorably impacted by $29.0 million due to changes in foreign
currency rates used to translate sales in foreign currencies into U.S. dollars. This increase in net sales consists of
a $19.0 million increase in net sales of the Company’s golf clubs segment partially offset by a $2.1 million
decrease in net sales of the Company’s golf balls segment as presented below (dollars in millions):
Years Ended
December 31, Growth (Decline)
2010(1) 2009(1) Dollars Percent
Net sales
Golf clubs .................................................... $791.1 $772.1 $19.0 2%
Golf balls ..................................................... 176.6 178.7 (2.1) (1)%
$967.7 $950.8 $16.9 2%
(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)
2010 2009 Dollars Percent
Net sales:
United States .................................................. $468.2 $475.4 $ (7.2) (2)%
Europe ....................................................... 130.1 134.5 (4.4) (3)%
Japan ........................................................ 164.8 162.7 2.1 1%
Rest of Asia ................................................... 89.5 77.0 12.5 16%
Other foreign countries .......................................... 115.1 101.2 13.9 14%
$967.7 $950.8 $16.9 2%
Net sales in the United States decreased $7.2 million (2%) to $468.2 million for the year ended
December 31, 2010 compared to the year ended December 31, 2009. The Company’s sales in regions outside of
the United States increased $24.1 million (5%) to $499.5 million for the year ended December 31, 2010
compared to the same period in 2009. The Company’s reported net sales in regions outside the United States in
2010 were favorably affected by the translation of foreign currency sales into U.S. dollars based upon 2010
exchange rates. If 2009 exchange rates were applied to 2010 reported sales in regions outside the United States
and all other factors were held constant, net sales in such regions would have been $29.0 million less than the net
sales reported during the twelve months ended December 31, 2010.
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