Global Edition

Second Quarter 2008 results from Callaway Golf

8.49am 22nd July 2008 - Corporate

Callaway Golf Company (NYSE:ELY) has announced that, based on current information, the Company’s second quarter diluted earnings per share are expected to range from $0.56 to $0.58, an increase of approximately 8% compared to $0.53 in the second quarter of 2007.

These results include after-tax charges of $0.05 per share in 2008 and $0.02 per share in 2007 associated with the gross margin initiatives announced in November 2006. Net sales for the second quarter of 2008 are estimated to be $366 million compared to $380 million in 2007.

Diluted earnings per share for the first half of 2008 are estimated to range from $1.17 to $1.19, an increase of approximately 17% versus $1.01 in the first half of 2007. These results include after-tax charges associated with the gross margin improvement initiatives of $0.06 and $0.03 per share for 2008 and 2007, respectively. Net sales for the period are estimated at $732 million, an increase of 2% over 2007 sales of $715 million.

Business Update
“In spite of a very challenging economic environment in the U.S. through the first half of 2008, we are very pleased to deliver results consistent with the guidance we communicated earlier this year,” commented George Fellows, president and CEO of Callaway Golf. “Our international business has been strong throughout the first half of the year and remains a key driver of our top and bottom line growth offsetting a softer than expected U.S. business. Furthermore, our efforts surrounding our gross margin initiatives are on track.

“During the quarter we consolidated our golf ball production operations into other existing locations and closed our Gloversville, NY golf ball facility as part of our longer term strategy targeted at our 2009 and 2010 gross margin initiatives commitments. This action resulted in the majority of our one-time charge of $0.05 per share during the quarter. Additionally, the strong spending controls we initiated earlier this year in anticipation of challenging economic conditions have contributed to these positive earnings results.”

Business Outlook
The Company reiterates its full year guidance of $1.145 to $1.165 billion in revenue and pro forma fully diluted earnings per share of $1.08 to $1.18 per share, excluding estimated charges of approximately $0.08 per share for the Company’s gross margin initiatives, again noting that it expects full year earnings will be at the lower end of the estimated range. Additional details will be provided at the upcoming 30th July earnings conference call and webcast

Callaway Golf

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