Callaway Golf Company estimates net sales for the first quarter ended March 31, 2006 of approximately $300 million, with corresponding earnings per diluted share ranging from 31 cents to 33 cents.
Excluding after-tax charges for employee equity-based compensation of approximately two cents per diluted share associated with FAS 123R, and 1 penny per diluted share associated with the consolidation of the Top-Flite and Callaway Golf operations, pro forma earnings per diluted share are estimated to range from 34 cents to 36 cents. For 2005, the Company reported net sales of $300 million, fully diluted earnings per share of 27 cents and pro forma fully diluted earnings per share of 30 cents, which excludes after-tax Top-Flite integration charges of 3 cents for that period.
“We are pleased with our preliminary results for the first quarter, which exceeded our internal targets and achieved the second highest level of revenues for any first quarter in the Company's history. In terms of profitability, our pro forma earnings for the first quarter are estimated to be 13% – 20% higher than pro forma earnings last year,” commented George Fellows, President and CEO.
“We are particularly pleased with these results given the later timing of our 2006 new product introductions compared to last year, which along with previously announced additional new product introductions should positively impact second quarter growth,” continued Mr. Fellows. “Despite these timing differences, we were able to achieve significant pro forma earnings growth in the first quarter, primarily due to lower operating expenses that resulted from our third quarter 2005 expense reduction initiatives. Finally, although early in the season, we're seeing strong initial consumer acceptance and sell-through at retail, and combined with improved supply chain management, we are optimistic about significant improvements in 2006 earnings compared to last year and believe these preliminary results are a good start in achieving our longer-term targets.”
Callaway Golf Company
Supplemental Financial Information
(Unaudited)
Quarter Ended
March 31,
2006
--------------
Earnings per
share
--------------
Estimated $0.31 - $0.33
Employee equity based compensation 0.02
Consolidation of Top-Flite and Callaway Golf
operations 0.01
--------------
Pro forma $0.34 - $0.36
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Quarter Ended
March 31,
2005
--------------
Earnings per
share
--------------
As reported $0.27
Employee equity based compensation -
Consolidation of Top-Flite and Callaway Golf
operations 0.03
--------------
Pro forma $0.30
==============
