Callaway Golf Company reported first quarter net sales increased 0.8% to $302.4 million from $299.9 million for the same period in 2005. Net income jumped 24.5% to $22.8 million from $18.4 million during the year-ago quarter. Fully diluted earnings per share were 33 cents on 70.1 million shares, up 22%, as compared to 27 cents on 68.6 million shares in 2005.

Fully diluted earnings per share include 2 cents of after-tax charges for employee equity-based compensation associated with FAS 123R as well as a penny for the integration of Top-Flite operations. The first quarter of 2005 included after-tax charges of 3 cents for the integration of Top-Flite operations. Excluding these charges, the company's pro forma fully diluted earnings per share for the first quarter of 2006 would have increased 20% to 36 cents, as compared to pro forma fully diluted earnings per share of 30 cents for the first quarter of 2005.

“We are pleased with the initial consumer acceptance of our new products this year and the fact that we achieved the second highest first quarter sales level in the history of the Company,” commented George Fellows, President and CEO. “Achieving this level of sales was significant because product launches in the first quarter of 2006 were timed later in the quarter as compared with product launches last year. We are even more pleased that we were able to leverage 1% growth in revenue to achieve 22% growth in fully diluted earnings per share,” continued Mr. Fellows. “Our cost reduction and other initiatives permitted us to bring this substantial increase to our bottom line despite an additional 1.5 million shares in our base.

“Although we were particularly pleased with our results this quarter and remain optimistic about significant improvement in 2006 earnings compared to last year, our focus is on our longer term goals. We are right on track with those targets and we look forward to Callaway Golf's long term prospects and our continued leadership in the golf industry.”

                        Callaway Golf Company
                       Statements of Operations
                (In thousands, except per share data)
                             (Unaudited)

                                              Quarter Ended
                                                March 31,
                                         ------------------------
                                           2006           2005
                                         ---------      ---------

Net sales                                $302,445  100% $299,857  100%
Cost of sales                             170,933   57%  167,251   56%
                                         ---------      ---------
Gross profit                              131,512   43%  132,606   44%
Operating expenses:
   Selling                                 68,128   23%   75,745   25%
   General and administrative              20,224    7%   19,085    6%
   Research and development                 6,804    2%    6,240    2%
                                         ---------      ---------
Total operating expenses                   95,156   31%  101,070   34%
Income from operations                     36,356   12%   31,536   11%
Other income (expense), net                   302         (1,181)
                                         ---------      ---------
Income before income taxes                 36,658   12%   30,355   10%
Income tax provision                       13,797         11,995
                                         ---------      ---------
Net Income                                $22,861    8%  $18,360    6%
                                         =========      =========

Earnings per common share:
   Basic                                    $0.33          $0.27
   Diluted                                  $0.33          $0.27
Weighted-average shares outstanding:
   Basic                                   69,166         68,181
   Diluted                                 70,143         68,624