Callaway 2015 Annual Report Download - page 111

Download and view the complete annual report

Please find page 111 of the 2015 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

F-41
Note 18. Segment Information
The Company has two operating segments that are organized on the basis of products, namely the golf clubs segment
and golf balls segment. The golf clubs segment consists of Callaway Golf woods, hybrids, irons and wedges and Odyssey
putters. This segment also includes golf apparel and footwear, golf bags, golf gloves, travel gear, headwear and other golf-
related accessories, in addition to royalties from licensing of the Company’s trademarks and service marks and sales of pre-
owned golf clubs. The golf balls segment consists of Callaway Golf and Strata balls that are designed, manufactured and sold
by the Company. There are no significant intersegment transactions.
The table below contains information utilized by management to evaluate its operating segments.
Years Ended December 31,
2015 2014 2013
(In thousands)
Net sales:
Golf Clubs............................................................................................................ $ 700,649 $ 749,956 $ 711,697
Golf Balls............................................................................................................. 143,145 136,989 131,104
$ 843,794 $ 886,945 $ 842,801
Income (loss) before income tax:
Golf Clubs(1) ................................................................................................................................... $ 52,999 $ 50,891 $ 32,738
Golf Balls(1) .................................................................................................................................... 17,724 15,222 (3,472)
Reconciling items(2)..................................................................................................................... (50,660)(44,474)(42,588)
$ 20,063 $ 21,639 $ (13,322)
Identifiable assets:(3)
Golf Clubs............................................................................................................ $ 316,079 $ 316,710 $ 374,473
Golf Balls ............................................................................................................ 37,394 37,445 49,261
Reconciling items(3)..................................................................................................................... 277,751 270,656 240,129
$ 631,224 $ 624,811 $ 663,863
Additions to long-lived assets:
Golf Clubs............................................................................................................ $ 14,111 $ 9,425 $ 13,250
Golf Balls............................................................................................................. 2,154 327 1,163
$ 16,265 $ 9,752 $ 14,413
Goodwill:
Golf Clubs............................................................................................................ $ 26,500 $ 27,821 $ 29,212
Golf Balls............................................................................................................. — — —
$ 26,500 $ 27,821 $ 29,212
Depreciation and amortization:
Golf Clubs............................................................................................................ $ 13,084 $ 18,505 $ 21,019
Golf Balls............................................................................................................. 4,295 2,731 4,524
$ 17,379 $ 21,236 $ 25,543
(1) The table below includes total charges absorbed by the Company’s operating segments from the Cost Reduction Initiatives
discussed in Note 17 (in thousands):
Year Ended December 31, 2013
Golf Clubs Golf Balls Corporate G&A Total
Cost Reduction Initiatives ..................................................... $ 6,395 $ 6,973 $ 3,188 $ 16,556
(2) Reconciling items represent the deduction of corporate general and administration expenses and other income (expenses),
which are not utilized by management in determining segment profitability. The $6,186,000 increase in reconciling items
in 2015 compared to 2014 includes increases in employee costs and professional fees, partially offset by a decrease in
legal expenses combined with an increase in net foreign currency gains.