Callaway 2015 Annual Report Download - page 47

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31
The Company’s provision for income taxes decreased slightly to $5.5 million for the year ended December 31, 2015,
compared to $5.6 million in the comparable period of 2014. Due to the effects of the Company’s valuation allowance against
its U.S. deferred tax assets, the Company’s income tax provision for 2015 and 2014 is primarily attributable to earnings
generated by its foreign subsidiaries.
Net income for the year ended December 31, 2015 decreased to $14.6 million compared to $16.0 million in the comparable
period of 2014. Diluted earnings per share decreased to $0.17 on 84.6 million diluted shares outstanding in 2015 from $0.20
on 78.4 million diluted shares outstanding in 2014.
Golf Clubs Segment
Golf club sales decreased $49.2 million (7%) to $700.7 million in 2015 compared to $749.9 million in 2014. This decline
was due to unfavorable changes in foreign currency exchange rates, a strategic shift in product launch timing, which adversely
affected first quarter sales, and softer than expected market conditions in the Company's international markets, particularly
in Asia. On a constant currency basis, net golf club sales would have decreased by $3.3 million (0.4%) compared to the net
sales reported in 2014.
Net sales information for the golf clubs segment by product category is summarized as follows (dollars in millions):
Years Ended
December 31, Growth/(Decline)
Constant Currency
Growth (Decline)
vs. 2014
2015 2014 Dollars Percent Percent
Net sales:
Woods................................................................................. $ 222.2 $ 269.5 $ (47.3) (18)% (12)%
Irons.................................................................................... 205.5 200.2 5.3 3 % 9 %
Putters................................................................................. 86.3 81.1 5.2 6 % 14 %
Accessories and other......................................................... 186.7 199.1 (12.4)(6)% —%
$ 700.7 $ 749.9 $ (49.2)(7)% —%
Net sales of woods decreased $47.3 million (18%) to $222.2 million for the year ended December 31, 2015 compared
to the prior year. On a constant currency basis, net sales of woods would have decreased by 12% compared to the reported
net sales in 2014. This decrease resulted from a decline in sales volume primarily due to a shift in product launch timing
resulting in fewer woods product launches during 2015 compared to the prior year. This was partially offset by price increases
on certain current year products compared to their predecessors in 2014.
Net sales of irons increased $5.3 million (3%) to $205.5 million for the year ended December 31, 2015 compared to the
prior year. On a constant currency basis, net sales of irons would have increased 9% compared to the net sales reported in
2014. This increase was primarily attributable to the success of the Company's new Mac Daddy 3 wedges and XR irons
launched in 2015 combined with an increase in average selling prices. The increase in average selling prices is due to less
closeout and promotional activity in the current year.
Net sales of putters increased $5.2 million (6%) to $86.3 million for the year December 31, 2015 compared to the prior
year. On a constant currency basis, net sales of putters would have increased by 14% compared to the net sales reported in
2014. This increase was primarily due to an increase in average selling prices and sales volumes due to the success of the
current year Odyssey Works line of putters.
Net sales of accessories and other products decreased $12.4 million (6%) to $186.7 million for the year ended
December 31, 2015 compared to the prior year due to unfavorable changes in foreign currency rates. On a constant currency
basis, net sales of accessories and other would have been relatively flat compared to the net sales reported in 2014.