Callaway Golf Company told its employees Aug. 10 it will reorganize its golf ball manufacturing and distribution facilities located in Chicopee, MA over the next 18 months as part of a global restructuring plan unveiled July 27. 

According to the plan, limited manufacturing and distribution operations would be maintained in Chicopee during and after the reorganization, but a majority of the operations currently conducted at the site would be moved to other locations. The company's adoption of a final plan regarding this phase is subject to satisfaction of any legal obligations and final determination of transition support to be provided to Chicopee employees affected by the proposed changes.

Set forth below are the current estimated charges (or estimated range of charges) that are expected to be incurred over the next 18 months in connection with the Chicopee Reorganization (in thousands):

                                               Cash       Non-Cash      Total
         Termination benefits   $850 – 2,350   $       –        $850 – 2,350
         Asset write-offs                     –         1,600                  1,600
         Transition costs1                 2,850           –                   2,850
         Total                  $3,700 – 5,200       $1,600      $5,300 – 6,800

Transition costs consist primarily of costs associated with the transfer of inventory and equipment, information technology start-up costs, costs associated with redundancies during the start-up and training phase at new locations and consulting expenses.

The above enumerated charges reflect the Company's best estimate as of the filing of this report based upon the Company's current plans. Any change in the Company's plans during implementation, or any delays, difficulties, or increased costs associated with the implementation of these initiatives, could affect the estimated amounts or timing of the charges.

The announcement follows the company's July 27, 2010 announcement that it would reorganize its manufacturing and distribution centers located in Carlsbad, California and Toronto, Canada, create third-party logistics sites in Dallas, Texas and Toronto, Canada, and establish a new production facility in Monterrey, Mexico.