Global Edition

 

Revised results from Callaway

12.30pm 20th March 2001 - Corporate

Callaway Golf Company has announced that it has retroactively implemented the Securities and Exchange Commission’s Staff Accounting Bulletin No. 101 (“SAB 101”). As a result, the Company is revising its previously announced 2000 fourth quarter and full year results to reflect the implementation of SAB 101, effective January 1, 2000. The net effect of this action is to increase the revenues and EPS results reported for the fourth quarter of 2000 as well as EPS expectations for the full year 2001, while reducing the revenues and EPS reported for the full year 2000.

SAB 101 provides expanded guidelines on revenue recognition. Prior to the implementation of SAB 101, the Company recognised revenue when it shipped products to its customers. Current interpretations of SAB 101 specify that revenue should be recognised upon delivery, rather than upon shipment, if the seller, either legally or through its practice, bears a portion of the risk of loss or damage during transit.

“After further review of Callaway Golf’s current shipping practices, we felt it was appropriate to revise our 2000 fourth quarter and full year results in compliance with SAB 101,” commented Brad Holiday, executive vice president and chief financial officer. “This effectively shifts revenue from one period into the subsequent period with no impact to our business. Demand for the Company’s products has remained solid during the first quarter, and this accounting change does not affect the amount of products shipped during 2000 or estimated to be shipped in 2001. We expect the net sales and associated earnings that were shifted from fiscal 2000 to be additive to fiscal 2001 and are increasing our EPS guidance for fiscal 2001 by $0.03 to a range of $1.54 to $1.59.”

As a result of implementing SAB 101, the Company realised fourth quarter net sales of $142.2 million, a 22% increase from the same period in 1999. The revised fourth quarter net sales includes a $12.4 million shift from third quarter 2000 and $5.9 million shift from fourth quarter to the first quarter of 2001. As a result of this shift in net sales, revised fourth quarter net income was $4.6 million or $0.07 per diluted share, as compared to $157,000 and less than $0.01 per diluted share for the fourth quarter 1999, respectively.

For the year ended December 31, 2000, revised net sales were $837.6 million, a 16% increase from net sales of $719.0 million during 1999. The revised full year net sales includes a $3.0 million shift from 1999 and a $5.9 million shift into 2001. As a result, the revised full year 2000 net income and diluted earnings per share were $81.0 million and $1.13, as compared to $55.3 million and $0.78 for the full year 1999, respectively. The change in net income and EPS also includes the cumulative effect of implementing SAB 101.

Callaway Golf www.callawaygolf.com

 

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