Callaway Golf Company recorded an 11% increase in net sales for the first quarter to $334.6 million from $302.4 million for the same period in 2006.

Fully diluted earnings per share were 48 cents on 68.3 million shares as compared to 33 cents on 70.1 million shares in 2006. This represents a 45% increase in diluted earnings per share.

Fully diluted earnings per share for the first quarter of 2007 include a penny of after-tax charges for gross margin improvement initiatives announced in November, 2006. Also, the first quarter of 2006 includes a peny of after-tax charges 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 2007 would have increased 44% to 49 cents, as compared to pro forma fully diluted earnings per share of 34 cents for the first quarter of 2006.

“We are pleased with our results for the first quarter and the initial consumer acceptance of our new products this year,” commented George Fellows, president and CEO. “Our efforts to improve our product development process and supply chain along with gross margin improvement initiatives are beginning to deliver positive operating results.”

“While cautiously optimistic given our first quarter results,” continued Mr. Fellows, “it is important to remember that it is very early in the year. In fact, the second quarter is the real start of the golf season in many regions, and when consumer purchases hit their peak. Accordingly, our focus is to support our retailers during the peak season and deliver products to them and our consumers as quickly as possible. Having said this, we are raising our full year estimates to reflect the positive results of the first quarter, balanced with the fact that a majority of the year still remains.”

Business Outlook

The company estimates that its full year 2007 net sales will be in the range of $1.05 to $1.07 billion compared to the previous estimate of $1.04 to $1.06 billion and that its 2007 full year pro forma fully diluted earnings per share will be in the range of 72 cents to 82 cents on an estimated 70 million shares compared to 66 cents to 76 cents on 68 million shares. Pro forma earnings exclude charges related to the company's gross margin improvement initiatives, currently estimated at 8 cents per share for 2007, but include charges related to employee equity-based compensation under FAS 123R.

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

                                              Quarter Ended
                                                March 31,
                                           2007           2006
                                         ---------      ---------

Net sales                                $334,607  100% $302,445  100%
Cost of sales                             173,886   52%  170,933   57%
                                         ---------      ---------
Gross profit                              160,721   48%  131,512   43%
Operating expenses:
 Selling                                   75,291   23%   68,128   23%
 General and administrative                21,558    6%   20,224    7%
 Research and development                   8,016    2%    6,804    2%
                                         ---------      ---------
Total operating expenses                  104,865   31%   95,156   31%
Income from operations                     55,856   17%   36,356   12%
Other income (expense), net                (1,338)           302
                                         ---------      ---------
Income before income taxes                 54,518   16%   36,658   12%
Income tax provision                       21,682         13,797
                                         ---------      ---------
Net income                                $32,836   10%  $22,861    8%
                                         =========      =========

Earnings per common share:
 Basic                                      $0.49          $0.33
 Diluted                                    $0.48          $0.33
Weighted-average shares outstanding:
 Basic                                     67,272         69,166
 Diluted                                   68,318         70,143