Boosted by sales of its new Great Big Bertha II driver and the strength of its putter and glove businesses, Callaway posted a narrower fourth quarter net loss with revenues jumping 16.2% to $122.5 million.
ELYs quarterly loss shrunk to $5.6 million from $9.2 million in 2001. Callaway lost 8 cents per share, improvement over last years Q4 loss of 14 cents and easily beating analysts forecast of 17 cents loss per share.
While the bottom line was positively impacted by the successful intro of the new Great Big Bertha II Titanium Driver and currency fluctuations, the quarter was also favorably impacted by the movement of certain charges to the third quarter that would have otherwise been reported in Q4. As previously reported, those charges had a net negative impact on Q3.
Net sales for full year 2002 decreased 3.0% to $792.1 million. Net income increased 19% to $69.4 million, up from $58.4 million last year. Fully diluted EPS grew 26% to $1.03, versus 82 cents a year ago.
The company is struggling to develop a profitable business in its Golf Ball unit, and continues to take operating losses for the division offsetting gains in other areas. The company told analysts it is looking at all options to eliminate losses in the golf ball business by 2004, including possibly exiting that market.
Nike has put tremendous energy into their nascent ball business and TaylorMade-adidas Golf announced last month that it had exercised its option to acquire the Maxfli ball operation. It aint gonna get any easier anytime soon.
Callaway re-affirmed its Q1 sales forecast of about $270 million, with 2003 sales expected to be essentially flat to 2002, and earnings estimated at 54 cents per share in the first quarter and 88 cents for the full year. Analysts expect first-quarter EPS of 54 cents per share and full-year 2003 earnings per share of 96 cents.
ELY told analysts that improved driver sales, eliminating losses in its golf ball unit and a better economy in Japan, would be critical for its financial performance this year.
KEY METRICS: Q4 2002 Category Sales --------------- Woods + 54% - 21% Irons - 27% - 2% Golf Balls - 20% + 20% Putters/Access + 48% + 44% Region Sales -------------- U.S. + 17% - 1% International + 11% - 5%
