Callaway 2012 Annual Report Download - page 96

The Company, at its option, may redeem the preferred stock subject to available liquidity and compliance
with any applicable legal requirements and contractual obligations, in whole or in part, at a price equal to 100%
of the liquidation preference, plus all accrued and unpaid dividends. The preferred stock has no maturity date and
has no voting rights prior to conversion into the Company’s common stock, except in limited circumstances.
Note 6. Loss per Common Share
Loss per common share, basic and diluted, are computed by dividing net loss allocable to common
shareholders by the weighted-average number of common shares outstanding for the period. Weighted-average
common shares outstanding—diluted is the same as weighted-average common shares outstanding—basic in
periods when a net loss is reported. Dividends on cumulative preferred stock are added to net loss to calculate net
loss allocable to common shareholders in the basic loss per share calculation, and in the diluted loss per share
calculation in periods when a net loss is reported.
Dilutive securities include the common stock equivalents of convertible preferred stock and convertible
notes, options granted pursuant to the Company’s stock option plans and outstanding restricted stock units
granted to employees and non-employees (see Note 15). Dilutive securities are included in the calculation of
diluted earnings per common share using the treasury stock method and the if-converted method in accordance
with ASC Topic 260, “Earnings per Share”.
The following table summarizes the computation of basic and diluted loss per share:
Year Ended December 31,
2012 2011 2010
(In thousands, except per share data)
Basic and diluted loss per common share
Net loss ....................................................... $(122,946) $(171,820) $(18,804)
Less: Preferred stock dividends .................................... (8,447) (10,500) (10,500)
Net loss allocable to common shareholders ........................... $(131,393) $(182,320) $(29,304)
Weighted-average common shares outstanding—basic and diluted ........ 67,061 64,601 63,902
Basic and diluted loss per common share ............................ $ (1.96) $ (2.82) $ (0.46)
Options with an exercise price in excess of the average market value of the Company’s common stock
during the period have been excluded from the calculation as their effect would be antidilutive. Additionally,
potentially dilutive securities were excluded from the computation in periods in which a net loss is reported as
their effect would be antidilutive. For the year ended December 31, 2012, dilutive securities outstanding totaling
approximately 27,844,000 (including preferred stock of 15,124,000, and shares underlying convertible notes of
5,100,000) were excluded from the calculations as their effect would have been antidilutive. For the years ended
December 31, 2011 and 2010 dilutive securities outstanding totaling approximately 30,676,000 and 30,267,000
shares, respectively, (including preferred stock of 19,858,000) were excluded from the calculations as their effect
would have been antidilutive.
Note 7. Sale of Buildings
In connection with the Company’s Cost Reduction Initiatives, during the third quarter of 2012, the Company
reached an agreement in principle to sell its golf ball manufacturing facility in Chicopee, Massachusetts and lease
back a reduced portion of the square footage to eliminate unused space at the facility. In connection with this
agreement, the Company designated this building as assets available for sale, and recorded a pre-tax charge of
$7,939,000 in cost of sales during the year ended December 31, 2012 to mark the building down to its estimated
selling price, net of estimated commissions and fees.
On February 28, 2013, the Company completed the sale of its manufacturing facility in Chicopee,
Massachusetts for proceeds of $2,253,000, net of closing costs, commissions and estimated environmental
remediation costs.
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