Callaway 2012 Annual Report Download - page 55

Download and view the complete annual report

Please find page 55 of the 2012 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 122

  • 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
  • 119
  • 120
  • 121
  • 122

Golf Clubs and Golf Balls Segments Results for the Years Ended December 31, 2011 and 2010
Golf Clubs Segment
Net sales information for the golf clubs segment by product category is summarized as follows (dollars in
millions):
Years Ended
December 31, Decline
2011(1) 2010 Dollars Percent
Net sales:
Woods .................................................... $211.2 $225.2 $(14.0) (6)%
Irons ..................................................... 206.8 223.9 (17.1) (8)%
Putters .................................................... 88.1 106.3 (18.2) (17)%
Accessories and other ........................................ 220.0 235.7 (15.7) (7)%
$726.1 $791.1 $(65.0) (8)%
(1) Certain prior period amounts have been reclassified to conform to the current year presentation.
The $14.0 million (6%) decrease in net sales of woods to $211.2 million for the year ended December 31,
2011 was primarily due to a decrease in sales volume partially offset by an increase in average selling prices. The
decrease in sales volume was primarily due to the earlier launch timing of the 2011 Diablo Octane drivers and
fairway woods, which were launched early in the fourth quarter of 2010 compared to the prior year launch of
Diablo Edge drivers and fairway woods during the first quarter of 2010. Additionally sales volumes were
negatively impacted by the natural disasters in Japan, Australia and South East Asia during 2011. The increase in
average selling prices was primarily due to a favorable shift in product mix from sales of moderately priced
drivers and fairway woods in 2010 to sales of more premium drivers in 2011 combined with less closeout activity
during the year ended December 31, 2011 compared to the prior year.
The $17.1 million (8%) decrease in net sales of irons to $206.8 million for the year ended December 31,
2011 was primarily attributable to a decline in sales volume partially offset by an increase in average selling
prices. The decline in sales volume was primarily due to fewer new irons models launched in 2011 compared to
the prior year. Additionally, sales volumes were negatively impacted by the natural disasters in Japan, Australia
and South East Asia during 2011 as well as a push in 2010 to sell irons and wedges which became
nonconforming in 2011. The increase in average selling prices primarily resulted from the current year launch of
the more premium Razr X irons compared to the prior year launch of the more moderately priced Big Bertha
Diablo irons and the value-priced X-24 Hot and X-20 NG irons.
The $18.2 million (17%) decrease in net sales of putters to $88.1 million for the year ended December 31,
2011 was primarily attributable to a decline in sales volume partially offset by an increase in average selling
prices. The decrease in sales volume resulted primarily from fewer new putter models offered during 2011
compared to the prior year as well as a general downturn in the putters category. The increase in average selling
prices was attributable to a decrease in closeout activity during 2011 compared to 2010.
The $15.7 million (7%) decrease in net sales of accessories and other products to $220.0 million for the year
ended December 31, 2011 was primarily attributable to a decline in sales of the Company’s GPS devices as well
as a decline in sales of packaged sets, gloves, headwear and accessories. These decreases were partially offset by
an increase in sales of the Company’s footwear and apparel primarily due to increased closeout activity with
certain retailers in 2011.
41