Third quarter net sales of $173 million, compared to $176 million last year – Third quarter non-GAAP loss per share of ($0.37)/GAAP loss per share of ($1.01) Restructuring actions on target to achieve approximately $50 million in gross annualized savings and reinvesting approximately 50% of the savings into brand and demand creation initiatives
Callaway Golf Company has announced its third quarter and year to date 2011 financial results. The Company also announced that its restructuring plan is on pace to deliver gross annualized savings of approximately $50 million. The Company has developed plans to invest approximately half of the savings in brand and demand creation initiatives.
“Our third quarter results are in line with our lowered expectations and continue to reflect the impact of a challenging golf equipment market and the mistakes we have made in executing a coordinated product and marketing plan based on golf consumers’ preferences,” commented Tony Thornley, who was appointed interim President and Chief Executive Officer in June 2011.
“We are on target with our recovery plan announced last quarter and have made significant progress in setting the foundation to return to profitability. We have focused the organization on the different elements of our business with the intent to achieve sustained profitability in each of these segments. Growth in sales is an essential part of this strategy, particularly in our core products. We remain committed to reinvesting approximately half of the $50 million in savings towards brand and demand creation initiatives to drive sales growth in 2012 and beyond.”
“We believe the actions we are taking to reduce costs and strengthen our brand are critical steps toward our return to profitability,” continued Mr. Thornley. “And while our full recovery will take more than just one year, we are taking actions in 2011 to ensure that our operating results will be profitable in 2012.
“Furthermore, as we look forward to next year, we are encouraged by the continued strength of our brands in the marketplace; we are very excited about the new technology embedded in our 2012 products; we look forward to the benefits from the increased efficiency in our supply and distribution operations following the completion of our global operations strategy initiatives this year; and we expect to begin realizing benefits in 2012 from additional investment in our brand and demand creation initiatives. We believe that all these factors together should result in a much improved 2012 for our business.”
The Company estimates that full year 2011 net sales will range from $880 to $890 million compared to $968 million in 2010. Non-GAAP pre-tax loss is estimated to range from $43 to $48 million. Assuming a pro forma statutory tax rate of 38.5%, non-GAAP net loss is estimated to range from $27 to $30 million. These non-GAAP results exclude charges associated with the Company’s final phase of its global operations strategy, restructuring costs announced last quarter, non-cash impairment charges, non-cash tax adjustments, and gain on the sale of buildings.
Callaway Golf Company www.callawaygolf.com