Global Edition

 

Callaway Golf Company Announces 2011 Results

12.26am 27th January 2012 - Corporate

Callaway Golf Company (NYSE:ELY) has announced its fourth quarter and full year 2011 financial results, which were in-line with the guidance the Company provided during its last earnings call.

  •  2011 full year net sales of $887 million, compared to $968 million last year
  • 2011 pro forma net loss of ($30) million/GAAP loss of ($172) million – in line with previous guidance
  • 2011 full year pro forma loss per share of ($0.63)/GAAP loss per share of ($2.82)
  • Completion of $50 million of expense reduction initiatives; reinvestment in brand and demand creation initiatives underway
  • Company’s 2012 products receive most medals in Golf Digest’s equipment review; Razr Fit driver named Editor’s Choice

“While 2011 was a very challenging year for Callaway, I am pleased with the significant progress we have made over the last six months with our restructuring and reinvestment initiatives,” commented Tony Thornley, President and Chief Executive Officer.  “We have achieved our $50 million annual savings target we began last June, implemented a flatter/more streamlined organization structure, and have begun investing a significant portion of those savings in our newly developed 2012 globally integrated brand and marketing initiatives.  Critical to improving results in 2012 is a product offering that appeals to golf consumers, and we are very happy with the results of the Golf Digest’s equipment review in which we netted the most medals for new products of any manufacturer and received the Editor’s Choice for our new Razr Fit driver. We expect to be profitable in 2012 as the first step towards returning to industry leading returns in the coming years.”

Business Outlook

Overall for 2012, as compared to 2011, the Company expects to generate higher sales, improved gross profit margins, flat to improved operating expenses after incremental demand creation investment, and a return to overall profitability.

The Company also provided more detailed guidance for the first half of 2012 as follows:

Net sales are projected at $610 – $630 million compared to $559 million in 2011.

Second quarter sales are estimated to be higher than the first depending on the timing of shipments of products.

Gross margins are projected to be approximately 44%, an increase of 140 bps compared to non-GAAP gross margins of 42.6% in 2011 and should also be higher in the second quarter compared to the first quarter.

Operating expenses are projected to be $214 million compared to non-GAAP operating expenses of $210 million in 2011.  The slight increase is due to a higher investment in marketing, which is skewed more to the first half of the year, and higher variable costs associated with increased sales, partially offset by savings from the cost reduction initiatives taken in 2011.  Operating expense is estimated to be evenly split between the first and second quarter.

Callaway Golf www.callawaygolf.com

 

       

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