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F-17
During the year ended December 31, 2013, the Company recognized total cash and non-cash charges of $16,556,000 in
connection with these initiatives. Amounts recognized in cost of sales, operating expenses and other income (expense) totaled
$11,149,000, $4,719,000 and $688,000, respectively, during the year ended December 31, 2013. Non-cash charges recognized
during 2013 included lower of cost or market adjustments to inventory as well as inventory write-offs related to the Company's
golf apparel, golf footwear and GPS device businesses. The Company did not recognize any charges in connection with the
Cost Reduction Initiatives during the year ended December 31, 2014. See Note 19 for charges absorbed by the Company’s
operating segments.
The table below depicts the activity and liability balances recorded relating to the Cost Reduction Initiatives during the
years ended December 31, 2014, 2013 and 2012. Amounts payable as of December 31, 2013 and 2012 are included in accrued
employee compensation and benefits and accounts payable and accrued expenses in the accompanying consolidated balance
sheets. There were no amounts payable as of December 31, 2014.
Cost Reduction Initiatives
(In thousands)
Workforce
Reductions
Transition
Costs
Asset
Write-offs Total
Charges to cost and expense(1) ................................................................. $ 14,506 $ 6,719 $ 32,836 $ 54,061
Non-cash items......................................................................................... (448)(4,311)(32,836)(37,595)
Cash payments ......................................................................................... (9,527)(1,817)—
(11,344)
Restructuring payable balance, December 31, 2012 .................................. $ 4,531 $ 591 $ — $ 5,122
Charges to cost and expense(2) ................................................................. 2,977 8,777 4,802 16,556
Non-cash items......................................................................................... — (5,130)(4,802)(9,932)
Cash payments ......................................................................................... (6,702)(1,737)—
(8,439)
Restructuring payable balance, December 31, 2013 .................................. $ 806 $ 2,501 $ — $ 3,307
Cash payments ......................................................................................... $ (806)$
(2,501)$ — $
(3,307)
Restructuring payable balance, December 31, 2014 .................................. $ — $ — $ — $ —
(1) The pre-tax charges for the year ended December 31, 2012 included the following:
• $14,506,000 in workforce reductions, in addition to $2,965,000 in other transition costs;
• $5,810,000 primarily related to the write-off of inventory and long-lived assets in connection with the Company's
decision to transition its golf apparel and golf footwear businesses in the United States to a third-party licensing
arrangement;
• $6,976,000 to write-off inventory related to the Company's decision to transition its integrated device business to a
third-party based model, $4,345,000 to write-off property, plant and equipment related to uPro devices, and an
impairment charge of $5,156,000 related to intangible assets and goodwill related to the uPlay, LLC acquisition (see
Note 8); and
• $14,303,000 related to the reorganization of the Company’s golf ball manufacturing supply chain.
(2) The pre-tax charges for the year ended December 31, 2013 included the following:
• $2,977,000 in continued costs associated with workforce reductions, in addition to $4,459,000 in other transition
costs;
• $5,579,000 for the write-off of assets and exit costs associated with the reorganization of golf ball manufacturing
(see Note 10); and
• $3,541,000 associated with the transition of the Company's golf apparel, golf footwear and integrated device
businesses in the United States and Europe to a third-party licensing arrangement.
Note 4. Financing Arrangements
In addition to cash on hand, as well as cash generated from operations, the Company relies on its asset-based revolving
credit facilities to manage seasonal fluctuations in liquidity and to provide additional liquidity when the Company’s operating
cash flows are not sufficient to fund the Company’s requirements. The Company’s ability to generate sufficient positive cash
flows from operations is subject to many risks and uncertainties, including future economic trends and conditions, the success
of the Company’s multi-year turnaround, demand for the Company’s products, foreign currency exchange rates, and the other
risks and uncertainties applicable to the Company and its business. If the Company is unable to generate sufficient cash flows
to fund its business and is unable to reduce its manufacturing costs and operating expenses to offset such shortfall, the Company