Callaway’s Q3 Sales Down 10%

Third quarter results include after-tax charges for gross margin improvement initiatives of 4 cents per share in both 2008 and 2007. Excluding the impact of the gross margin improvement charges, pro forma loss per share was 8 cents in 2008 as compared to pro forma diluted earnings per share of 6 cents in 2007.

Gross profit for Callaway for the quarter was $80.1 million, down 15%  tp $94 million for the year ago period. Excluding the impact of the gross margin improvement charges, pro forma gross profit percentages for the quarter would have been 39% compared to 42% in last year’s third quarter.

Operating expenses for 2008 were $92.6 million compared to $93.1 million for 2007 which included a $3.8 million gain associated with the sale of a building.

 

 

Callaway Golf Company
Statements of Operations
(In thousands, except per share data)
(Unaudited)
		Quarter Ended
		September 30,
		2008						2007
Net sales		$	213,451		100	%		$	235,549		100	%
Cost of sales			133,320		62	%			141,543		60	%
Gross profit			80,131		38	%			94,006		40	%
Operating expenses:
Selling			65,730		31	%			65,808		28	%
General and administrative			20,201		9	%			19,394		8	%
Research and development			6,650		3	%			7,928		3	%
Total operating expenses			92,581		43	%			93,130		40	%
Income (loss) from operations			(12,450	)	-6	%			876		0	%
Other income (expense), net			(1,669	)					1,223
Income (loss) before income taxes			(14,119	)	-7	%			2,099		1	%
Income tax provision (benefit)			(6,676	)					830
Net income (loss)		$	(7,443	)	-3	%		$	1,269		1	%
Earnings (loss) per common share:
Basic			($0.12	)				$	0.02
Diluted			($0.12	)				$	0.02
Weighted-average shares outstanding:
Basic			62,494						66,516
Diluted			62,494						67,639