Callaway Golf Company reported that consolidated net sales for the first quarter were $363.8 million, which included $297.3 million from core Callaway Golf and Odyssey branded products, an increase of 9.4% for these products over the first quarter of 2003. Reported net sales also included $66.5 million from newly acquired Top-Flite and Ben Hogan branded products.
Net income for the quarter declined 4.5% to $40.5 million, or 59 cents per diluted share. Reported net income and earnings per share were affected by $3.2 million, or five cents a share from charges associated with the integration of the Top-Flite operations. Excluding these charges, the company's pro forma net income was $43.8 million, an increase of 3% compared to the first quarter in 2003 and a record first quarter for the Company, and pro forma fully diluted earnings per share were 64 cents, the same as the prior year.
Reported net income of $40.5 million included $43.2 million from Callaway Golf and Odyssey branded products, an increase of 1.7% over the prior year. Reported net income also included $551,000 from Top-Flite and Ben Hogan branded products and $3.2 million in integration charges. Reported fully diluted earnings per share of 59 cents included 63 cents from Callaway Golf and Odyssey branded products as compared to 64 cents for the comparable period in the prior year. Reported fully diluted earnings per share also included a penny from Top-Flite and Ben Hogan branded products and five cents in integration charges.
“I am very pleased with our results for the first quarter, with record net sales and net income in our core Callaway Golf business,” said Ron Drapeau, Chairman and CEO. “In turn, we increased our investment in programs directed at achieving our operational objectives of eliminating the losses from the Callaway Golf ball business, growing our woods business and restructuring the Top-Flite Golf operations. We made progress on all fronts. In our consolidated results you would find that Callaway Golf branded golf ball sales increased $14 million, or 100%, over the prior year and delivered a profit for the quarter; sales of Callaway Golf branded woods increased $30 million dollars, or 32%, over the prior year; and Top-Flite, excluding integration charges, was profitable. We are very pleased to be hitting our major goals so early in the year; and remain on track to hit our overall growth targets for 2004.”
Callaway Golf Company
Supplemental Financial Information
(In thousands)
(Unaudited)
Quarter Ended
March 31,
-------------------------------------------------
2004 2003(a)
-------------------------------------- ---------
Callaway Top- Integration Total Total
Golf Flite Charges
Golf
-------------------------------------- ---------
Net sales $297,284 $66,502 $- $363,786 $271,719
Gross profit 146,061 23,600 (3,470) 166,191 137,837
% of sales 49% 35% n/a 46% 51%
Operating expenses 77,703 22,824 1,638 102,165 69,414
-------------------------------------- ---------
Income from
operations 68,358 776 (5,108) 64,026 68,423
Other income
(expense), net 173 98 - 271 (1,184)
-------------------------------------- ---------
Income before income
taxes 68,531 874 (5,108) 64,297 67,239
Income tax provision 25,316 323 (1,887) 23,752 24,762
-------------------------------------- ---------
Net income $43,215 $551 $(3,221) $40,545 $42,477
======================================= =========
Diluted earnings per
share $0.63 $0.01 $(0.05) $0.59 $0.64
Sales by Product
First Quarter - 2004
---------------------
$'s in millions Net Sales % Change
vs. 2003
---------- ---------
Woods $124 33%
Irons 96 (4%)
Putters 37 (18%)
Golf balls 72 427%
Accessories, other 35 77%
-----------
Total $364 34%
