Callaway Golf Company announced that, based on current information, net sales for 2008 are expected to slip 0.7% to $1.117 billion from $1.125 billion in 2007. Consistent with recent earnings guidance, pro forma diluted earnings per share for 2008 are estimated to range from 93 cents to 95 cents a share (on 63.8 million shares outstanding), an increase of approximately 6% compared to pro forma diluted earnings per share of 89 cents in 2007 (on 67.5 million shares outstanding).
“Accounting rules have required that we maintain the energy derivative valuation account on our books until now,” said Brad Holiday, senior executive vice president and chief financial officer. “This is a one time, non-cash accounting benefit that does not relate to our operations during the period and was not included in our earnings guidance. We will provide pro forma results excluding this benefit, along with our reported results, to allow for a better comparison of our operational performance.”
Business Update
“We are pleased that we achieved year over year earnings growth in what was a very challenging 2008,” commented George Fellows, president and CEO of Callaway Golf. “These results reflect the efforts of everyone at Callaway Golf to control costs throughout the year, deliver our targeted gross margin savings, and leverage our supply chain to adjust to a rapid decline in worldwide economic conditions during the second half of the year.”
“As we begin 2009, we are anticipating continued adverse global economic conditions and are encountering significant headwinds from unfavorable foreign currency exchange rates which we expect will have a significant effect on our international results in 2009,” continued Fellows. “Despite these macroeconomic conditions, which are beyond our control, our brands and our operations remain strong. We have our strongest line-up of new products ever for 2009, we continue to benefit from the many gross margin and operational initiatives we have implemented over the past three years, and we will continue to drive incremental gross margin savings as we embark on our next round of initiatives in 2009. Additionally, as we demonstrated in 2008, we will carefully manage our costs and inventories throughout the year and will take the necessary actions to maximize our financial results for our shareholders in whatever economic conditions persist.”
