Callaway Golf Company Announces First Quarter 2017 Financial Results, With Double-Digit Sales Growth, And A Significant Increase In Full Year Sales And Earnings Guidance
- First quarter 2017 net sales of
$309 million , a 13% increase compared to the first quarter of 2016. - First quarter 2017 non-GAAP pre-tax income (which excludes non-recurring OGIO transaction and transition expenses) of
$43 million , an increase of 8% compared to the first quarter of 2016. On a GAAP basis, pre-tax income was$39 million for the first quarter of 2017. - Full year 2017 sales guidance increased by
$45 - $50 million to$960 - $980 million , compared to prior guidance of$910 - $935 million . - Full year 2017 non-GAAP earnings per share guidance increased
$0.10 per share to$0.31 - $0.37 , compared to prior guidance of$0.21 - $0.27 . The non-GAAP guidance excludes the non-recurring OGIO expenses.
In the first quarter of 2017, as compared to the same period in 2016, the Company's net sales increased
"It has been a very strong start to 2017," commented
GAAP and Non-GAAP Results
In addition to the Company's results prepared in accordance with GAAP, the Company provided information on a non-GAAP basis. The purpose of this non-GAAP presentation is to provide additional information to investors regarding the underlying performance of the Company's business without these non-recurring items and on a more comparable tax basis.
This non-GAAP information presents the Company's financial results for the first quarter of 2017 excluding the non-recurring transaction and transition expenses related to the OGIO acquisition. In addition, because of the Company's prior deferred tax valuation allowance, the Company did not recognize U.S. income tax during the first quarter of 2016 and its income tax provision and after-tax income and earnings are therefore not calculated on the same basis as in the first quarter of 2017. In order to make 2016 more comparable to 2017, the Company has presented 2016 results on a non-GAAP basis by applying an assumed statutory income tax rate of 38.5% as compared to the actual first quarter 2016 effective tax rate of 3.5%. The valuation allowance was reversed in the fourth quarter of 2016. Excluding the reversal, the Company's full year 2016 effective tax rate was 41.1%.
The manner in which this non-GAAP information is derived is discussed in more detail toward the end of this release, and the Company has provided in the tables to this release a reconciliation of the non-GAAP information to the most directly comparable GAAP information.
Summary of First Quarter 2017 Financial Results
The Company announced the following GAAP and non-GAAP financial results for the first quarter of 2017 (in millions, except eps):
2017 RESULTS (GAAP) |
NON-GAAP PRESENTATION |
||||||
Q1 |
Q1 2016 |
Change |
Q1 2017 non-GAAP |
Q1 2016 |
Change |
||
Net Sales |
$309 |
$274 |
$35 |
$309 |
$274 |
$35 |
|
Gross Profit/ |
$148 47.8% |
$132 48.3% |
$16 (50) b.p. |
$148 47.8% |
$132 48.3% |
$16 (50) b.p. |
|
Operating |
$104 |
$87 |
$17 |
$100 |
$87 |
$13 |
|
Pre-Tax |
$39 |
$40 |
($1) |
$43 |
$40 |
$3 |
|
Income Tax |
$13 |
$1 |
$12 |
$15 |
$15 |
$0 |
|
Net Income |
$26 |
$38 |
($12) |
$28 |
$24 |
$4 |
|
EPS |
$0.27 |
$0.40 |
($0.13) |
$0.30 |
$0.26 |
$0.04 |
For the first quarter of 2017, the Company's net sales increased
For the first quarter of 2017, the Company's gross margin of 47.8% was better than the Company expected as a result of better pricing and mix of products sold. The 50 basis point decrease compared to 2016 gross margins of 48.3% reflects the different economics of the apparel joint venture and the OGIO business, which have lower gross margins and lower relative operating expenses (with overall higher operating margins) as compared to the Company's golf equipment business.
Operating expenses increased
First quarter 2017 earnings per share was
Business Outlook for 2017
Basis for 2017 Non-GAAP Estimates. The Company's 2017 non-GAAP estimates exclude non-recurring transaction and transition expenses related to the OGIO acquisition, which are estimated to be approximately
Basis for 2016 Pro Forma Results. In order to make the 2017 guidance more comparable to 2016, as discussed above, the Company has presented 2016 results on a pro forma basis by excluding from 2016 the prior
Full Year 2017
Given the Company's financial performance during the first quarter of 2017, the Company is increasing its full year financial guidance as follows:
Revised 2017 GAAP Estimate |
Revised 2017 Non-GAAP Estimate |
Previous 2017 Non-GAAP |
2016 Pro Forma |
|
Net Sales |
$960 - $980 million |
$960 - $980 million |
$910 - $935 million |
$871 million |
Gross Margins |
45.2% |
45.2% |
44.2% |
44.2% |
Operating |
$390 million |
$383 million |
$367 million |
$341 million |
Earnings Per |
$0.27 - $0.33 |
$0.31 - $0.37 |
$0.21 - $0.27 |
$0.24 |
The Company's revised 2017 net sales estimate of
The Company currently estimates that its 2017 non-GAAP gross margin will improve 100 basis points from the prior estimate. This increase is expected to be driven by continued favorable pricing, mix and operational efficiencies.
The Company estimates that its 2017 non-GAAP operating expenses will increase
The Company increased its non-GAAP earnings per share guidance by
Second Quarter 2017
The Company currently estimates the following results for the second quarter of 2017:
Q2 2017 GAAP Estimate |
Q2 2017 Non-GAAP Estimate |
Q2 2016 Non-GAAP Results |
|
Net Sales
|
$290 - $300 million |
$290 - 300 million |
$246 million |
Earnings Per Share |
$0.27 - $0.30 |
$0.28 - $0.31 |
$0.12 |
The Company expects sales growth of 18% - 22% in the second quarter of 2017 compared to the same period in 2016. This projected sales growth reflects anticipated growth in the core business as well as growth from the
The Company's non-GAAP earnings per share for the second quarter of 2017 is estimated to increase
Conference Call and Webcast
The Company will be holding a conference call at
Non-GAAP Information
The GAAP results contained in this press release and the financial statement schedules attached to this press release have been prepared in accordance with accounting principles generally accepted in
Constant Currency Basis. The Company provided certain information regarding the Company's financial results or projected financial results on a "constant currency basis." This information estimates the impact of changes in foreign currency rates on the translation of the Company's current or projected future period financial results as compared to the applicable comparable period. This impact is derived by taking the current or projected local currency results and translating them into U.S. Dollars based upon the foreign currency exchange rates for the applicable comparable period. It does not include any other effect of changes in foreign currency rates on the Company's results or business.
Adjusted EBITDA. The Company provides information about its results excluding interest, taxes, and depreciation and amortization expenses, as well as non-recurring Ogio transaction and transition expenses and the second quarter 2016 gain realized from the sale of a small portion of the Company's Topgolf investment.
Other Adjustments. The Company presents certain of its financial results (i) excluding tax benefits received from the reversal of a significant portion of its deferred tax valuation allowance, (ii) excluding gains from the sale of a small portion of its Topgolf investment, (iii) excluding the non-recurring Ogio expenses or (iv) by applying an assumed estimated statutory tax rate of 38.5%.
In addition, the Company has included in the schedules to this release a reconciliation of certain non-GAAP information to the most directly correlated GAAP information. The non-GAAP information presented in this release and related schedules should not be considered in isolation or as a substitute for any measure derived in accordance with GAAP. The non-GAAP information may also be inconsistent with the manner in which similar measures are derived or used by other companies. Management uses such non-GAAP information for financial and operational decision-making purposes and as a means to evaluate period-over-period comparisons and in forecasting the Company's business going forward. Management believes that the presentation of such non-GAAP information, when considered in conjunction with the most directly comparable GAAP information, provides additional useful comparative information for investors in their assessment of the underlying performance of the Company's business without regard to these items. The Company has provided reconciling information in the attached schedules.
Forward-Looking Statements
Statements used in this press release that relate to future plans, events, financial results, performance or prospects, including statements relating to the Company's estimated 2017 sales, gross margins, operating expenses, and earnings per share (or related tax rate and share count), the estimated impact from changes in foreign currency rates, and the expected timing and amount of expenses related to the integration of the OGIO acquisition, are forward-looking statements as defined under the Private Securities Litigation Reform Act of 1995. These statements are based upon current information and expectations. Accurately estimating the forward-looking statements is based upon various risks and unknowns including any unfavorable changes in U.S. trade, tax or other policies, including restrictions on imports or an increase in import tariffs; delays, difficulties, or increased costs in integrating the acquired OGIO business or implementing the Company's growth strategy generally; consumer acceptance of and demand for the Company's products; the level of promotional activity in the marketplace; unfavorable weather conditions; future consumer discretionary purchasing activity, which can be significantly adversely affected by unfavorable economic or market conditions; future retailer purchasing activity, which can be significantly negatively affected by adverse industry conditions and overall retail inventory levels; and future changes in foreign currency exchange rates and the degree of effectiveness of the Company's hedging programs. Actual results may differ materially from those estimated or anticipated as a result of these risks and unknowns or other risks and uncertainties, including continued compliance with the terms of the Company's credit facilities; delays, difficulties or increased costs in the supply of components or commodities needed to manufacture the Company's products or in manufacturing the Company's products; the ability to secure professional tour player endorsements at reasonable costs; any rule changes or other actions taken by the
About
Through an unwavering commitment to innovation,
Contacts: |
Brian Lynch |
Patrick Burke |
|
(760) 931-1771 |
CALLAWAY GOLF COMPANY |
|||||||||
CONSOLIDATED CONDENSED BALANCE SHEETS |
|||||||||
(Unaudited) |
|||||||||
(In thousands) |
|||||||||
March 31, |
December 31, |
||||||||
ASSETS |
|||||||||
Current assets: |
|||||||||
Cash and cash equivalents |
$ |
47,989 |
$ |
125,975 |
|||||
Accounts receivable, net |
245,144 |
127,863 |
|||||||
Inventories |
179,020 |
189,400 |
|||||||
Other current assets |
19,353 |
17,187 |
|||||||
Total current assets |
491,506 |
460,425 |
|||||||
Property, plant and equipment, net |
59,847 |
54,475 |
|||||||
Intangible assets, net |
171,336 |
114,324 |
|||||||
Deferred taxes, net |
99,741 |
114,707 |
|||||||
Investment in golf-related ventures |
48,997 |
48,997 |
|||||||
Other assets |
8,519 |
8,354 |
|||||||
Total assets |
$ |
879,946 |
$ |
801,282 |
|||||
LIABILITIES AND SHAREHOLDERS' EQUITY |
|||||||||
Current liabilities: |
|||||||||
Accounts payable and accrued expenses |
$ |
138,266 |
$ |
132,521 |
|||||
Accrued employee compensation and benefits |
24,939 |
32,568 |
|||||||
Asset-based credit facilities |
76,954 |
11,966 |
|||||||
Accrued warranty expense |
5,945 |
5,395 |
|||||||
Income tax liability |
2,788 |
4,404 |
|||||||
Total current liabilities |
248,892 |
186,854 |
|||||||
Long-term liabilities |
5,914 |
5,828 |
|||||||
Total Callaway Golf Company shareholders' equity |
614,986 |
598,906 |
|||||||
Non-controlling interest in consolidated entity |
10,154 |
9,694 |
|||||||
Total liabilities and shareholders' equity |
$ |
879,946 |
$ |
801,282 |
CALLAWAY GOLF COMPANY |
|||||||
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS |
|||||||
(Unaudited) |
|||||||
(In thousands, except per share data) |
|||||||
Three Months Ended |
|||||||
2017 |
2016 |
||||||
Net sales |
$ |
308,927 |
$ |
274,053 |
|||
Cost of sales |
161,212 |
141,661 |
|||||
Gross profit |
147,715 |
132,392 |
|||||
Operating expenses: |
|||||||
Selling |
71,762 |
63,286 |
|||||
General and administrative |
22,864 |
15,544 |
|||||
Research and development |
8,882 |
8,234 |
|||||
Total operating expenses |
103,508 |
87,064 |
|||||
Income from operations |
44,207 |
45,328 |
|||||
Other expense, net |
(5,121) |
(5,537) |
|||||
Income before income taxes |
39,086 |
39,791 |
|||||
Income tax provision |
13,206 |
1,401 |
|||||
Net income |
25,880 |
38,390 |
|||||
Less: Net income attributable to non-controlling interests |
191 |
— |
|||||
Net income attributable to Callaway Golf Company |
$ |
25,689 |
$ |
38,390 |
|||
Earnings per common share: |
|||||||
Basic |
$ |
0.27 |
$ |
0.41 |
|||
Diluted |
$ |
0.27 |
$ |
0.40 |
|||
Weighted-average common shares outstanding: |
|||||||
Basic |
94,070 |
93,952 |
|||||
Diluted |
95,948 |
95,424 |
|||||
CALLAWAY GOLF COMPANY |
|||||||
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOW |
|||||||
(Unaudited) |
|||||||
(In thousands) |
|||||||
Three Months Ended |
|||||||
2017 |
2016 |
||||||
Cash flows from operating activities: |
|||||||
Net income |
$ |
25,880 |
$ |
38,390 |
|||
Adjustments to reconcile net income to net cash used in operating activities: |
|||||||
Depreciation and amortization |
4,319 |
4,157 |
|||||
Deferred taxes, net |
15,630 |
— |
|||||
Share-based compensation |
3,218 |
2,194 |
|||||
Gain on disposal of long-lived assets and deferred gain amortization |
(34) |
(270) |
|||||
Unrealized loss on foreign currency forward contracts |
3,111 |
— |
|||||
Changes in assets and liabilities |
(114,929) |
(115,930) |
|||||
Net cash used in operating activities |
(62,805) |
(71,459) |
|||||
Cash flows from investing activities: |
|||||||
Acquisitions, net of cash acquired |
(58,629) |
— |
|||||
Capital expenditures |
(6,301) |
(4,963) |
|||||
Proceeds from sale of property, plant and equipment |
38 |
6 |
|||||
Proceeds from note receivable |
— |
3,104 |
|||||
Investment in golf-related ventures |
— |
(1,260) |
|||||
Net cash used in investing activities |
(64,892) |
(3,113) |
|||||
Cash flows from financing activities: |
|||||||
Proceeds from asset-based credit facilities, net |
64,988 |
64,000 |
|||||
Acquisition of treasury stock |
(15,369) |
(2,878) |
|||||
Dividends paid |
(939) |
(941) |
|||||
Exercise of stock options |
484 |
384 |
|||||
Net cash provided by financing activities |
49,164 |
60,565 |
|||||
Effect of exchange rate changes on cash and cash equivalents |
547 |
(658) |
|||||
Net decrease in cash and cash equivalents |
(77,986) |
(14,665) |
|||||
Cash and cash equivalents at beginning of period |
125,975 |
49,801 |
|||||
Cash and cash equivalents at end of period |
$ |
47,989 |
$ |
35,136 |
CALLAWAY GOLF COMPANY |
|||||||||||||||||
Consolidated Net Sales and Operating Segment Information |
|||||||||||||||||
(Unaudited) |
|||||||||||||||||
(In thousands) |
|||||||||||||||||
Net Sales by Product Category |
|||||||||||||||||
Three Months Ended |
Growth/(Decline) |
Non-GAAP Constant Currency vs. 2016(2) |
|||||||||||||||
2017 |
2016(1) |
Dollars |
Percent |
Percent |
|||||||||||||
Net sales: |
|||||||||||||||||
Woods |
$ |
107,575 |
$ |
89,248 |
$ |
18,327 |
20.5 |
% |
21.1 |
% |
|||||||
Irons |
59,011 |
75,600 |
(16,589) |
(21.9) |
% |
(21.2) |
% |
||||||||||
Putters |
27,005 |
30,213 |
(3,208) |
(10.6) |
% |
(10.2) |
% |
||||||||||
Golf balls |
48,224 |
41,416 |
6,808 |
16.4 |
% |
16.8 |
% |
||||||||||
Gear/Accessories/Other |
67,112 |
37,576 |
29,536 |
78.6 |
% |
79.2 |
% |
||||||||||
$ |
308,927 |
$ |
274,053 |
$ |
34,874 |
12.7 |
% |
13.3 |
% |
||||||||
(1) The Company changed its operating segments as of January 1, 2017. Accordingly, prior period amounts have been restated to conform with the current period presentation. |
|||||||||||||||||
(2) Calculated by applying 2016 exchange rates to 2017 reported sales in regions outside the U.S. |
|||||||||||||||||
Net Sales by Region |
|||||||||||||||||
Three Months Ended |
Growth |
Non-GAAP Constant Currency vs. 2016(1) |
|||||||||||||||
2017 |
2016 |
Dollars |
Percent |
Percent |
|||||||||||||
Net Sales |
|||||||||||||||||
United States |
$ |
179,822 |
$ |
160,048 |
$ |
19,774 |
12.4 |
% |
12.4 |
% |
|||||||
Europe |
43,119 |
37,901 |
5,218 |
13.8 |
% |
22.2 |
% |
||||||||||
Japan |
46,500 |
39,278 |
7,222 |
18.4 |
% |
17.2 |
% |
||||||||||
Rest of Asia |
18,322 |
15,808 |
2,514 |
15.9 |
% |
12.3 |
% |
||||||||||
Other foreign countries |
21,164 |
21,018 |
146 |
0.7 |
% |
(1.9) |
% |
||||||||||
$ |
308,927 |
$ |
274,053 |
$ |
34,874 |
12.7 |
% |
13.3 |
% |
||||||||
(1) Calculated by applying 2016 exchange rates to 2017 reported sales in regions outside the U.S. |
|||||||||||||||||
Operating Segment Information |
|||||||||||||||||
Three Months Ended |
Growth/(Decline) |
||||||||||||||||
2017 |
2016(1) |
Dollars |
Percent |
||||||||||||||
Net Sales |
|||||||||||||||||
Golf Club |
$ |
193,591 |
$ |
195,061 |
$ |
(1,470) |
(0.8) |
% |
|||||||||
Golf Ball |
48,224 |
41,416 |
6,808 |
16.4 |
% |
||||||||||||
Gear/Accessories/Other |
67,112 |
37,576 |
29,536 |
78.6 |
% |
||||||||||||
$ |
308,927 |
$ |
274,053 |
$ |
34,874 |
12.7 |
% |
||||||||||
Income (loss) before income taxes: |
|||||||||||||||||
Golf clubs |
$ |
34,953 |
$ |
35,441 |
$ |
(488) |
(1.4) |
% |
|||||||||
Golf balls |
11,521 |
10,606 |
915 |
8.6 |
% |
||||||||||||
Gear/Accessories/Other |
9,619 |
9,462 |
157 |
1.7 |
% |
||||||||||||
Reconciling items(2) |
(17,007) |
(15,718) |
(1,289) |
(8.2) |
% |
||||||||||||
$ |
39,086 |
$ |
39,791 |
$ |
(705) |
(1.8) |
% |
||||||||||
(1) The Company changed its operating segments as of January 1, 2017. Accordingly, prior period amounts have been restated to conform with the current period presentation. |
|||||||||||||||||
(2) Represents corporate general and administrative expenses and other income (expense) not utilized by management in determining segment profitability. |
CALLAWAY GOLF COMPANY |
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Supplemental Financial Information and Non-GAAP Reconciliation |
||||||||||||||||||||||||||
(Unaudited) |
||||||||||||||||||||||||||
(In thousands) |
||||||||||||||||||||||||||
Three months ended March 31, 2017 |
Three months ended March 31, 2016 |
|||||||||||||||||||||||||
As Reported |
Ogio |
Non-GAAP |
As Reported |
Non-Cash Tax |
Non-GAAP |
|||||||||||||||||||||
Net sales |
$ |
308,927 |
$ |
— |
$ |
308,927 |
$ |
274,053 |
$ |
— |
$ |
274,053 |
||||||||||||||
Gross profit |
147,715 |
— |
147,715 |
132,392 |
— |
132,392 |
||||||||||||||||||||
% of sales |
47.8 |
% |
NA |
47.8 |
% |
48.3 |
% |
NA |
48.3 |
% |
||||||||||||||||
Operating expenses |
103,508 |
3,956 |
99,552 |
87,064 |
— |
87,064 |
||||||||||||||||||||
Income (loss) from operations |
44,207 |
(3,956) |
48,163 |
45,328 |
— |
45,328 |
||||||||||||||||||||
Other expense, net |
(5,121) |
— |
(5,121) |
(5,537) |
— |
(5,537) |
||||||||||||||||||||
Income (loss) before income taxes |
39,086 |
(3,956) |
43,042 |
39,791 |
— |
39,791 |
||||||||||||||||||||
Income tax provision (benefit) |
13,206 |
(1,337) |
14,543 |
1,401 |
13,919 |
15,320 |
||||||||||||||||||||
Net income (loss) |
25,880 |
(2,619) |
28,499 |
38,390 |
(13,919) |
24,471 |
||||||||||||||||||||
Less: Net income attributable to non-controlling interests |
191 |
— |
191 |
— |
— |
— |
||||||||||||||||||||
Net income (loss) attributable to Callaway Golf Company |
$ |
25,689 |
$ |
(2,619) |
$ |
28,308 |
$ |
38,390 |
$ |
(13,919) |
$ |
24,471 |
||||||||||||||
Diluted earnings (loss) per share: |
$ |
0.27 |
$ |
(0.03) |
$ |
0.30 |
$ |
0.40 |
$ |
(0.14) |
$ |
0.26 |
||||||||||||||
Weighted-average shares outstanding: |
95,948 |
95,948 |
95,948 |
95,424 |
95,424 |
95,424 |
||||||||||||||||||||
(1) Represents transaction costs as well as one-time transition costs associated with the acquisition of Ogio International, Inc in January 2017. |
||||||||||||||||||||||||||
(2) The Company had a valuation allowance on its U.S. deferred tax assets in the first quarter of 2016, which resulted in minimal U.S. tax expense for the quarter. In the fourth quarter of 2016, the Company reversed a significant portion of the valuation allowance. For comparability to the first quarter of 2017, the Company applied an estimated statutory tax rate of 38.5% to calculate pro-forma results for the first quarter of 2016. |
2017 Trailing Twelve Month Adjusted EBITDA |
2016 Trailing Twelve Month Adjusted EBITDA |
||||||||||||||||||||||||||||||||||||||
Quarter Ended |
Quarter Ended |
||||||||||||||||||||||||||||||||||||||
June 30, |
September 30, |
December 31, |
March 31, |
June 30, |
September 30, |
December 31, |
March 31, |
||||||||||||||||||||||||||||||||
2016 |
2016 |
2016 |
2017 |
Total |
2015 |
2015 |
2015 |
2016 |
Total |
||||||||||||||||||||||||||||||
Net income (loss) |
$ |
34,105 |
$ |
(5,866) |
$ |
123,271 |
$ |
25,689 |
$ |
177,199 |
$ |
12,818 |
$ |
(3,617) |
$ |
(30,452) |
$ |
38,390 |
$ |
17,139 |
|||||||||||||||||||
Interest expense, net |
347 |
431 |
348 |
715 |
1,841 |
1,936 |
3,520 |
868 |
621 |
6,945 |
|||||||||||||||||||||||||||||
Income tax provision |
1,937 |
1,294 |
(137,193) |
13,206 |
(120,756) |
1,817 |
1,547 |
493 |
1,401 |
5,258 |
|||||||||||||||||||||||||||||
Depreciation and amortization expense |
4,180 |
4,204 |
4,045 |
4,319 |
16,748 |
4,454 |
4,193 |
4,029 |
4,157 |
16,833 |
|||||||||||||||||||||||||||||
EBITDA |
$ |
40,569 |
$ |
63 |
$ |
(9,529) |
$ |
43,929 |
$ |
75,032 |
$ |
21,025 |
$ |
5,643 |
$ |
(25,062) |
$ |
44,569 |
$ |
46,175 |
|||||||||||||||||||
Gain on sale of Topgolf investments |
(17,662) |
— |
— |
— |
(17,662) |
— |
— |
— |
— |
— |
|||||||||||||||||||||||||||||
Ogio acquisition costs |
— |
— |
— |
3,956 |
3,956 |
— |
— |
— |
— |
— |
|||||||||||||||||||||||||||||
Adjusted EBITDA |
$ |
22,907 |
$ |
63 |
$ |
(9,529) |
$ |
47,885 |
$ |
61,326 |
$ |
21,025 |
$ |
5,643 |
$ |
(25,062) |
$ |
44,569 |
$ |
46,175 |
CALLAWAY GOLF COMPANY |
|||||||||||||||
Reconciliation of Non-GAAP 2016 Results |
|||||||||||||||
(Unaudited) |
|||||||||||||||
(In thousands) |
|||||||||||||||
Three Months Ended June 30, 2016 |
|||||||||||||||
As |
Topgolf |
Non-Cash |
Pro-Forma(3) |
||||||||||||
Net sales |
$ |
245,594 |
$ |
— |
$ |
— |
$ |
245,594 |
|||||||
Gross profit |
110,633 |
— |
— |
110,633 |
|||||||||||
% of sales |
45.0 |
% |
— |
— |
45.0 |
% |
|||||||||
Operating expenses |
89,765 |
— |
— |
89,765 |
|||||||||||
Income from operations |
20,868 |
— |
— |
20,868 |
|||||||||||
Other income (expense), net |
15,174 |
17,662 |
— |
(2,488) |
|||||||||||
Income before income taxes |
36,042 |
17,662 |
— |
18,380 |
|||||||||||
Income tax provision (benefit) |
1,937 |
7,188 |
(12,327) |
7,076 |
|||||||||||
Net income |
$ |
34,105 |
$ |
10,474 |
$ |
12,327 |
$ |
11,304 |
|||||||
Diluted earnings per share: |
$ |
0.36 |
$ |
0.11 |
$ |
0.13 |
$ |
0.12 |
|||||||
Weighted-average shares outstanding: |
95,893 |
95,893 |
95,893 |
95,893 |
|||||||||||
(1) Represents a gain on the sale of a small portion of the Company's Topgolf investment as well as the income tax impact on the gain due to the reversal of the Company's deferred tax valuation allowance in Q4 of 2016. |
|||||||||||||||
(2) Effect of applying a 38.5% statutory tax rate to derive Non-GAAP Results. |
|||||||||||||||
(3) The Company had a valuation allowance on its U.S. deferred tax assets in the second quarter of 2016, which resulted in minimal U.S. tax expense for the quarter. In the fourth quarter of 2016, the Company reversed a significant portion of the valuation allowance. For comparability to the second quarter business outlook for 2017, the Company applied an estimated statutory tax rate of 38.5% to calculate Non-GAAP Results for the second quarter of 2016. |
Year Ended December 31, 2016 |
|||||||||||||||
As |
Release of |
Topgolf |
Pro-Forma(3) |
||||||||||||
Net sales |
$ |
871,192 |
$ |
— |
$ |
— |
$ |
871,192 |
|||||||
Gross profit |
385,011 |
— |
— |
385,011 |
|||||||||||
% of sales |
44.2 |
% |
— |
— |
44.2 |
% |
|||||||||
Operating expenses |
340,843 |
— |
— |
340,843 |
|||||||||||
Income from operations |
44,168 |
— |
— |
44,168 |
|||||||||||
Other income (expense), net |
14,225 |
17,662 |
(3,437) |
||||||||||||
Income before income taxes |
58,393 |
— |
17,662 |
40,731 |
|||||||||||
Income tax provision (benefit) |
(132,561) |
(156,588) |
7,188 |
16,839 |
|||||||||||
Net income |
190,954 |
156,588 |
10,474 |
23,892 |
|||||||||||
Less: Net income attributable to non-controlling interests |
1,054 |
— |
— |
1,054 |
|||||||||||
Net income attributable to Callaway Golf Company |
$ |
189,900 |
$ |
156,588 |
$ |
10,474 |
$ |
22,838 |
|||||||
Diluted earnings per share: |
$ |
1.98 |
1.63 |
$ |
0.11 |
$ |
0.24 |
||||||||
Weighted-average shares outstanding: |
95,845 |
95,845 |
95,845 |
95,845 |
|||||||||||
(1) Non-cash tax benefit due to the reversal of a significant portion of the Company's deferred tax valuation allowance. |
|||||||||||||||
(2) Represents a gain on the sale of a small portion of the Company's Topgolf investment as well as the income tax impact on the gain due to the reversal of the Company's deferred tax valuation allowance in Q4 of 2016. |
|||||||||||||||
(3) In order to make the 2017 guidance more comparable to 2016 with regard to the underlying performance of the Company's business, the Company has recast its 2016 results on a pro-forma basis. The 2016 Non-GAAP Results exclude (i) the $156.6 million ($1.63 per share) benefit from the reversal of the deferred tax valuation allowance, and (ii) the $10.5 million ($0.11 per share) after-tax Topgolf gain. |
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/callaway-golf-company-announces-first-quarter-2017-financial-results-with-double-digit-sales-growth-and-a-significant-increase-in-full-year-sales-and-earnings-guidance-300451865.html
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