Callaway Golf Company Announces Second Quarter 2020 Financial Results; The Company's Business Is Recovering From COVID-19 More Quickly Than Expected
"The second quarter began as an extremely challenging operating environment in all of our global markets as we saw the height of worldwide regulatory restrictions related to COVID-19," commented
"Looking ahead, the impact of the COVID-19 pandemic on our businesses through 2021 remains unclear,"
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 certain non-cash purchase accounting adjustments and amortization of intangibles related to the Company's acquisitions, non-recurring transaction and transition costs related to acquisitions, and other non-recurring costs, including costs related to the transition to the Company's new North American Distribution Center, implementation of a new IT system for Jack Wolfskin, severance costs related to the Company's cost-reduction initiatives, the
Summary of Second Quarter 2020 Financial Results
The Company announced the following GAAP and non-GAAP financial results for the second quarter of 2020 (in millions, except EPS):
GAAP RESULTS |
NON-GAAP PRESENTATION |
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Q2 2020 |
Q2 2019 |
Change |
Q2 2020 Non-GAAP |
Q2 2019 Non-GAAP |
Change |
||
|
|
|
( |
|
|
( |
|
Gross Profit % of Sales |
41.1% |
46.3% |
( (520) bps |
42.2% |
47.5% |
( (530) bps |
|
Operating Expenses |
|
|
|
|
|
( |
|
Pre-Tax Income/(Loss) |
( |
|
( |
|
|
( |
|
Income Tax Provision/(Benefit) |
( |
|
( |
|
|
( |
|
Net Income/(Loss) |
( |
|
( |
|
|
( |
|
Earnings/(Loss) Per Share |
( |
|
( |
|
|
( |
Q2 2020 |
Q2 2019 |
Change |
|
Adjusted EBITDAS |
|
|
( |
For the second quarter of 2020, the Company's net sales decreased
For the second quarter of 2020, the Company's gross margin decreased 520 basis points to 41.1% compared to 46.3% for the second quarter of 2019. Non-GAAP gross margin decreased 530 basis points to 42.2% compared to 47.5% for the second quarter of 2019. The decrease in gross margin is primarily attributable to the decrease in sales related to the COVID-19 pandemic, costs associated with idle facilities during the government mandated shut-down, a decrease in higher margin Company owned retail sales due to temporary store closures, an increase in lower margin sales of packaged sets, entry level golf balls, and pre-owned product in the golf equipment business, as well as increased tariffs on imports from
Operating expenses increased
Second quarter 2020 loss per share was
Summary of First Half 2020 Financial Results
The Company announced the following GAAP and non-GAAP financial results for the first half of 2020 (in millions, except EPS):
GAAP RESULTS |
NON-GAAP PRESENTATION |
||||||
1H 2020 |
1H 2019 |
Change |
1H 2020 Non-GAAP |
1H 2019 Non-GAAP |
Change |
||
|
|
|
( |
|
|
( |
|
Gross Profit % of Sales |
43.0% |
46.2% |
( (320) bps |
43.6% |
47.4% |
( (380) bps |
|
Operating Expenses |
|
|
|
|
|
( |
|
Pre-Tax Income/(Loss) |
( |
|
( |
|
|
( |
|
Income Tax Provision |
|
|
( |
|
|
( |
|
Net Income/(Loss) |
( |
|
( |
|
|
( |
|
Earnings/(Loss) Per Share |
( |
|
( |
|
|
( |
Q2 2020 |
Q2 2019 |
Change |
|
Adjusted EBITDAS |
|
|
( |
For the first half of 2020, the Company's net sales decreased
For the first half of 2020, the Company's gross margin decreased 320 basis points to 43.0% compared to 46.2% for the same period in 2019. Non-GAAP gross margin decreased 380 basis points to 43.6% compared to 47.4% for the first half of 2019. The decrease in gross margin is primarily attributable to the decrease in sales related to the COVID-19 pandemic, costs associated with idle facilities during the government mandated shut-down, a decrease in higher margin Company owned retail sales due to temporary store closures, an increase in lower margin sales of packaged sets, entry level golf balls, and pre-owned product in the golf equipment business, as well as increased tariffs on imports from
Operating expenses increased
First half 2020 loss per share was
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
Non-Recurring and Non-cash Adjustments. The Company provided information excluding certain non-cash purchase accounting adjustments and amortization of intangibles related to the Company's acquisitions, non-recurring transaction and transition costs related to acquisitions, and other non-recurring costs, including costs related to the transition to the Company's new North American Distribution Center, implementation of a new IT system for Jack Wolfskin, severance costs related to the Company's cost-reduction initiatives, the
Adjusted EBITDAS. The Company provides information about its results excluding interest, taxes, depreciation and amortization expenses, non-cash stock compensation expense, and the non-recurring and non-cash items referenced above.
In addition, the Company has included in the schedules to this release a reconciliation of certain non-GAAP information to the most directly comparable 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 with 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, prospects, or growth opportunities, including statements relating to the Company's sales, future industry and market conditions, strength of the Company's brands, scale and global reach of the Company's products, expertise in the apparel sector, the continued impact of the COVID-19 pandemic on the Company's business, results of operations and financial condition and the impact of any measures taken to mitigate the effect of the pandemic, the Company's efforts to effectively manage its cost/expense reduction, capital allocation and liquidity, the Company's continued ability to improve and recover from the impact of the COVID-19 pandemic, and the creation of shareholder value are forward-looking statements as defined under the Private Securities Litigation Reform Act of 1995. The words "believe," "expect," "estimate," "could," "should," "intend," "may," "plan," "seek," "anticipate," "project" and similar expressions, among others, generally identify forward-looking statements, which speak only as of the date the statements were made and are not guarantees of future performance. These statements are based upon current information and expectations. Accurately estimating the forward-looking statements is based upon various risks and unknowns, including disruptions to business operations from additional regulatory restrictions in response to COVID-19 pandemic (such as travel restrictions, government-mandated shut-down orders or quarantines) or voluntary "social distancing" that affects employees, customers and suppliers; production delays, closures of manufacturing facilities, retail locations, warehouses and supply and distribution chains; staffing shortages as a result of remote working requirements or otherwise; uncertainty regarding global economic conditions, particularly the uncertainty related to the duration and impact of the COVID-19 pandemic, and related decreases in customer demand and spending; our level of indebtedness; continued availability of credit facilities and liquidity and ability to comply with applicable debt covenants; effectiveness of capital allocation and cost/expense reduction efforts, including the suspension of the quarterly dividend; continued brand momentum and product success; growth in the direct-to-consumer and e-commerce channels; consumer acceptance of and demand for the Company's and its subsidiaries' products; competitive pressures; any changes in
About
Contacts: |
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(760) 931-1771 |
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CONSOLIDATED CONDENSED BALANCE SHEETS |
|||||||||
(Unaudited) |
|||||||||
(In thousands) |
|||||||||
|
|
||||||||
ASSETS |
|||||||||
Current assets: |
|||||||||
Cash and cash equivalents |
$ |
164,416 |
$ |
106,666 |
|||||
Accounts receivable, net |
214,004 |
140,455 |
|||||||
Inventories |
379,169 |
456,639 |
|||||||
Other current assets |
82,972 |
85,590 |
|||||||
Total current assets |
840,561 |
789,350 |
|||||||
Property, plant and equipment, net |
149,618 |
132,760 |
|||||||
Operating lease right-of-use assets, net |
189,381 |
160,098 |
|||||||
Intangible assets, net |
521,275 |
697,166 |
|||||||
Deferred taxes, net |
48,746 |
73,948 |
|||||||
Investment in golf-related ventures |
90,134 |
90,134 |
|||||||
Other assets |
19,941 |
17,092 |
|||||||
Total assets |
$ |
1,859,656 |
$ |
1,960,548 |
|||||
LIABILITIES AND SHAREHOLDERS' EQUITY |
|||||||||
Current liabilities: |
|||||||||
Accounts payable and accrued expenses |
$ |
204,980 |
$ |
276,300 |
|||||
Accrued employee compensation and benefits |
29,455 |
46,891 |
|||||||
Asset-based credit facilities |
55,551 |
144,580 |
|||||||
Accrued warranty expense |
9,779 |
9,636 |
|||||||
Current operating lease liabilities |
28,772 |
26,418 |
|||||||
Long-term debt, current portion |
8,653 |
7,317 |
|||||||
Income tax liability |
6,430 |
12,104 |
|||||||
Total current liabilities |
343,620 |
523,246 |
|||||||
Long-term debt |
628,851 |
443,259 |
|||||||
Long-term operating lease liabilities |
172,093 |
137,696 |
|||||||
Long-term liabilities |
90,544 |
88,994 |
|||||||
|
624,548 |
767,353 |
|||||||
Total liabilities and shareholders' equity |
$ |
1,859,656 |
$ |
1,960,548 |
|
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CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS |
|||||||
(Unaudited) |
|||||||
(In thousands, except per share data) |
|||||||
Three Months Ended |
|||||||
2020 |
2019 |
||||||
Net sales |
$ |
296,996 |
$ |
446,708 |
|||
Cost of sales |
174,941 |
239,891 |
|||||
Gross profit |
122,055 |
206,817 |
|||||
Operating expenses: |
|||||||
Selling |
80,166 |
113,113 |
|||||
General and administrative |
35,049 |
35,423 |
|||||
Research and development |
10,020 |
13,082 |
|||||
|
174,269 |
— |
|||||
Total operating expenses |
299,504 |
161,618 |
|||||
Income/(loss) from operations |
(177,449) |
45,199 |
|||||
Other income (expense), net |
1,834 |
(9,093) |
|||||
Income/(loss) before income taxes |
(175,615) |
36,106 |
|||||
Income tax provision (benefit) |
(7,931) |
7,208 |
|||||
Net income/(loss) |
(167,684) |
28,898 |
|||||
Less: Net loss attributable to non-controlling interest |
— |
(33) |
|||||
Net income (loss) attributable to |
$ |
(167,684) |
$ |
28,931 |
|||
Earnings (loss) per common share: |
|||||||
Basic |
( |
|
|||||
Diluted |
( |
|
|||||
Weighted-average common shares outstanding: |
|||||||
Basic |
94,141 |
94,074 |
|||||
Diluted |
94,141 |
95,891 |
|||||
Six Months Ended |
|||||||
2020 |
2019 |
||||||
Net sales |
$ |
739,272 |
$ |
962,905 |
|||
Cost of sales |
421,543 |
517,655 |
|||||
Gross profit |
317,729 |
445,250 |
|||||
Operating expenses: |
|||||||
Selling |
191,227 |
232,434 |
|||||
General and administrative |
65,742 |
72,361 |
|||||
Research and development |
23,260 |
25,620 |
|||||
|
174,269 |
— |
|||||
Total operating expenses |
454,498 |
330,415 |
|||||
Income/(loss) from operations |
(136,769) |
114,835 |
|||||
Other income (expense), net |
(801) |
(20,672) |
|||||
Income/(loss) before income taxes |
(137,570) |
94,163 |
|||||
Income tax provision (benefit) |
1,220 |
16,764 |
|||||
Net Income/(loss) |
(138,790) |
77,399 |
|||||
Less: Net loss attributable to non-controlling interest |
— |
(179) |
|||||
Net Income/(loss) attributable to |
$ |
(138,790) |
$ |
77,578 |
|||
Earnings (loss) per common share: |
|||||||
Basic |
( |
|
|||||
Diluted |
( |
|
|||||
Weighted-average common shares outstanding: |
|||||||
Basic |
94,225 |
94,377 |
|||||
Diluted |
94,225 |
96,153 |
|
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CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOW |
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(Unaudited) |
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(In thousands) |
|||||||
Six Months Ended |
|||||||
2020 |
2019 |
||||||
Cash flows from operating activities: |
|||||||
Net income (loss) |
$ |
(138,790) |
$ |
77,399 |
|||
Adjustments to reconcile net income (loss) to net cash used in operating activities: |
|||||||
Depreciation and amortization |
18,357 |
16,999 |
|||||
Lease amortization expense |
16,313 |
15,279 |
|||||
Amortization of debt issuance costs |
1,823 |
1,295 |
|||||
Debt discount amortization |
1,483 |
— |
|||||
Inventory step-up on acquisition |
— |
10,703 |
|||||
Impairment loss |
174,269 |
— |
|||||
Deferred taxes, net |
8,684 |
10,514 |
|||||
Non-cash share-based compensation |
4,794 |
6,964 |
|||||
Loss on disposal of long-lived assets |
123 |
657 |
|||||
Unrealized net (gains) losses on hedging instruments |
(14,059) |
2,677 |
|||||
Changes in assets and liabilities |
(93,318) |
(193,246) |
|||||
Net cash used in operating activities |
(20,321) |
(50,759) |
|||||
Cash flows from investing activities: |
|||||||
Capital expenditures |
(25,097) |
(23,403) |
|||||
Note receivable, net of discount |
(5,234) |
— |
|||||
Acquisitions, net of cash acquired |
— |
(463,105) |
|||||
Proceeds from sales of property and equipment |
— |
15 |
|||||
Net cash used in investing activities |
(30,331) |
(486,493) |
|||||
Cash flows from financing activities: |
|||||||
Proceeds from issuance of convertible notes |
258,750 |
— |
|||||
Proceeds from issuance of long-term debt |
9,766 |
480,000 |
|||||
Premium paid for capped call confirmations |
(31,775) |
— |
|||||
Debt issuance cost |
(9,119) |
(18,971) |
|||||
(Repayments of) proceeds from credit facilities, net |
(89,029) |
125,167 |
|||||
Repayments of long-term debt |
(5,504) |
(2,325) |
|||||
Repayments of financing leases |
(206) |
(232) |
|||||
Exercise of stock options |
130 |
— |
|||||
Dividends paid, net |
(1,891) |
(1,893) |
|||||
Acquisition of treasury stock |
(21,953) |
(27,394) |
|||||
Net cash provided by financing activities |
109,169 |
554,352 |
|||||
Effect of exchange rate changes on cash and cash equivalents |
(767) |
409 |
|||||
Net increase in cash and cash equivalents |
57,750 |
17,509 |
|||||
Cash and cash equivalents at beginning of period |
106,666 |
63,981 |
|||||
Cash and cash equivalents at end of period |
$ |
164,416 |
$ |
81,490 |
|
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Consolidated |
|||||||||||||||||||||||||||||||
(Unaudited) |
|||||||||||||||||||||||||||||||
(In thousands) |
|||||||||||||||||||||||||||||||
|
|
||||||||||||||||||||||||||||||
Three Months Ended |
Decline |
Non-GAAP |
Six Months Ended |
Decline |
Non-GAAP |
||||||||||||||||||||||||||
2020 |
2019 |
Dollars |
Percent |
Percent |
2020 |
2019 |
Dollars |
Percent |
Percent |
||||||||||||||||||||||
Net sales: |
|||||||||||||||||||||||||||||||
|
$ |
156,040 |
$ |
223,741 |
$ |
(67,701) |
-30.3% |
-29.8% |
$ |
407,264 |
$ |
485,526 |
$ |
(78,262) |
-16.1% |
-15.6% |
|||||||||||||||
Golf Balls |
53,903 |
68,612 |
(14,709) |
-21.4% |
-21.0% |
94,340 |
130,446 |
(36,106) |
-27.7% |
-27.2% |
|||||||||||||||||||||
Apparel |
36,302 |
73,195 |
(36,893) |
-50.4% |
-49.8% |
113,592 |
169,441 |
(55,849) |
-33.0% |
-32.0% |
|||||||||||||||||||||
Gear and Other |
50,751 |
81,160 |
(30,409) |
-37.5% |
-36.8% |
124,076 |
177,492 |
(53,416) |
-30.1% |
-29.3% |
|||||||||||||||||||||
$ |
296,996 |
$ |
446,708 |
$ |
(149,712) |
-33.5% |
-33.0% |
$ |
739,272 |
$ |
962,905 |
$ |
(223,633) |
-23.2% |
-22.6% |
||||||||||||||||
(1) Calculated by applying 2019 exchange rates to 2020 reported sales in regions outside the |
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|
|
||||||||||||||||||||||||||||||
Three Months Ended |
Decline |
Non-GAAP |
Six Months Ended |
Decline |
Non-GAAP |
||||||||||||||||||||||||||
2020 |
2019 |
Dollars |
Percent |
Percent |
2020 |
2019 |
Dollars |
Percent |
Percent |
||||||||||||||||||||||
|
|||||||||||||||||||||||||||||||
|
$ |
171,714 |
$ |
247,419 |
$ |
(75,705) |
-30.6% |
-30.6% |
$ |
389,217 |
$ |
496,420 |
$ |
(107,203) |
-21.6% |
-21.6% |
|||||||||||||||
|
50,074 |
81,630 |
(31,556) |
-38.7% |
-37.5% |
146,793 |
208,243 |
(61,450) |
-29.5% |
-27.8% |
|||||||||||||||||||||
|
24,640 |
55,676 |
(31,036) |
-55.7% |
-56.8% |
101,987 |
128,904 |
(26,917) |
-20.9% |
-22.0% |
|||||||||||||||||||||
Rest of World |
50,568 |
61,983 |
(11,415) |
-18.4% |
-15.3% |
101,275 |
129,338 |
(28,063) |
-21.7% |
-18.6% |
|||||||||||||||||||||
$ |
296,996 |
$ |
446,708 |
$ |
(149,712) |
-33.5% |
-33.0% |
$ |
739,272 |
$ |
962,905 |
$ |
(223,633) |
-23.2% |
-22.6% |
||||||||||||||||
(1) Calculated by applying 2019 exchange rates to 2020 reported sales in regions outside the |
|||||||||||||||||||||||||||||||
Operating Segment Information |
Operating Segment Information |
||||||||||||||||||||||||||||||
Three Months Ended |
Decline |
Non-GAAP |
Six Months Ended |
Decline |
Non-GAAP |
||||||||||||||||||||||||||
2020 |
2019 |
Dollars |
Percent |
Percent |
2020 |
2019 |
Dollars |
Percent |
Percent |
||||||||||||||||||||||
|
|||||||||||||||||||||||||||||||
Golf Equipment |
$ |
209,943 |
$ |
292,353 |
$ |
(82,410) |
-28.2% |
-27.7% |
$ |
501,604 |
$ |
615,972 |
$ |
(114,368) |
-18.6% |
-18.1% |
|||||||||||||||
Apparel, Gear and Other |
87,053 |
154,355 |
(67,302) |
-43.6% |
-43.0% |
237,668 |
346,933 |
(109,265) |
-31.5% |
-30.6% |
|||||||||||||||||||||
$ |
296,996 |
$ |
446,708 |
$ |
(149,712) |
-33.5% |
-33.0% |
$ |
739,272 |
$ |
962,905 |
$ |
(223,633) |
-23.2% |
-22.6% |
||||||||||||||||
Income (loss) before income taxes: |
|||||||||||||||||||||||||||||||
Golf Equipment |
$ |
29,181 |
$ |
55,665 |
$ |
(26,484) |
-47.6% |
$ |
87,801 |
$ |
125,658 |
$ |
(37,857) |
-30.1% |
|||||||||||||||||
Apparel, Gear and Other |
(11,711) |
11,314 |
(23,025) |
-203.5% |
(15,510) |
34,033 |
(49,543) |
-145.6% |
|||||||||||||||||||||||
Reconciling items(2) |
(193,085) |
(30,873) |
(162,212) |
525.4% |
(209,861) |
(65,528) |
(144,333) |
220.3% |
|||||||||||||||||||||||
$ |
(175,615) |
$ |
36,106 |
$ |
(211,721) |
-586.4% |
$ |
(137,570) |
$ |
94,163 |
$ |
(231,733) |
-246.1% |
||||||||||||||||||
(1) Calculated by applying 2019 exchange rates to 2020 reported sales in regions outside the |
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(2) Amount includes corporate general and administrative expenses and other income (expense) not utilized by management in determining segment profitability, as well as amortization expense of intangible assets from the acquisitions of OGIO,TravisMathew and Jack Wolfskin. In addition, the reconciling items for 2020 include (i) an impairment charge of |
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Supplemental Financial Information and Non-GAAP Reconciliation |
||||||||||||||||||||||||||||||||||||
(Unaudited) |
||||||||||||||||||||||||||||||||||||
(In thousands) |
||||||||||||||||||||||||||||||||||||
Three Months Ended |
||||||||||||||||||||||||||||||||||||
2020 |
2019 |
|||||||||||||||||||||||||||||||||||
GAAP |
Non-Cash Intangible Amortization and Impairment Charges(1) |
Non-Cash Amortization of Discount on Convertible Notes(2) |
Other Non-Recurring Charges(3) |
Non-GAAP |
GAAP |
Non-Cash Acquisition Amortization(1) |
Acquisition & Other Non-Recurring Expenses(4) |
Non-GAAP |
||||||||||||||||||||||||||||
Gross profit |
$ |
122,055 |
$ |
— |
$ |
— |
$ |
(3,314) |
$ |
125,369 |
$ |
206,817 |
$ |
(5,336) |
$ |
— |
$ |
212,153 |
||||||||||||||||||
Operating expenses, net |
299,504 |
175,447 |
— |
2,575 |
121,482 |
161,618 |
1,208 |
1,603 |
158,807 |
|||||||||||||||||||||||||||
Other income (expense), net |
1,834 |
— |
(1,499) |
— |
3,333 |
(9,093) |
— |
— |
(9,093) |
|||||||||||||||||||||||||||
Income tax provision (benefit) |
(7,931) |
(8,195) |
(345) |
(1,355) |
1,964 |
7,208 |
(1,505) |
(369) |
9,082 |
|||||||||||||||||||||||||||
Net income (loss) attributable to |
$ |
(167,684) |
$ |
(167,252) |
$ |
(1,154) |
$ |
(4,534) |
$ |
5,256 |
$ |
28,931 |
$ |
(5,039) |
$ |
(1,234) |
$ |
35,204 |
||||||||||||||||||
Diluted earnings (loss) per share: |
$ |
(1.78) |
$ |
(1.78) |
$ |
(0.01) |
$ |
(0.05) |
$ |
0.06 |
$ |
0.30 |
$ |
(0.05) |
$ |
(0.02) |
$ |
0.37 |
||||||||||||||||||
(1) Represents amortization expense of intangible assets from the acquisitions of OGIO, TravisMathew and Jack Wolfskin. In addition, 2020 includes an impairment charge of |
||||||||||||||||||||||||||||||||||||
(2) Represents the non-cash amortization of the debt discount on the convertible notes issued in |
||||||||||||||||||||||||||||||||||||
(3) Represents certain non-recurring costs, including costs associated with the Company's transition to its new North America Distribution Center and the implementation of new IT systems for Jack Wolfskin, as well as |
||||||||||||||||||||||||||||||||||||
(4) Represents certain non-recurring and non-cash costs, including costs associated with the acquisition of Jack Wolfskin |
|
||||||||||||||||||||||||||||||||||||
Supplemental Financial Information and Non-GAAP Reconciliation |
||||||||||||||||||||||||||||||||||||
(Unaudited) |
||||||||||||||||||||||||||||||||||||
(In thousands) |
||||||||||||||||||||||||||||||||||||
Six Months Ended |
||||||||||||||||||||||||||||||||||||
2020 |
2019 |
|||||||||||||||||||||||||||||||||||
GAAP |
Non-Cash Intangible Amortization and Impairment Charges(1) |
Non-Cash Amortization of Discount on Convertible Notes(2) |
Other Non-Recurring Charges(3) |
Non-GAAP |
GAAP |
Non-Cash Acquisition Amortization(1) |
Acquisition and Other Non-Recurring Expenses(4) |
Non-GAAP |
||||||||||||||||||||||||||||
Gross profit |
$ |
317,729 |
$ |
— |
$ |
— |
$ |
(4,622) |
$ |
322,351 |
$ |
445,250 |
$ |
(10,703) |
$ |
— |
$ |
455,953 |
||||||||||||||||||
Operating expenses |
454,498 |
176,626 |
— |
2,816 |
275,056 |
330,415 |
2,416 |
6,326 |
321,673 |
|||||||||||||||||||||||||||
Other income (expense), net |
(801) |
— |
(1,499) |
— |
698 |
(20,672) |
— |
(3,896) |
(16,776) |
|||||||||||||||||||||||||||
Income tax provision (benefit) |
1,220 |
(8,466) |
(345) |
(1,711) |
11,742 |
16,764 |
(3,017) |
(2,351) |
22,132 |
|||||||||||||||||||||||||||
Net income (loss) attributable to |
$ |
(138,790) |
$ |
(168,160) |
$ |
(1,154) |
$ |
(5,727) |
$ |
36,251 |
$ |
77,578 |
$ |
(10,102) |
$ |
(7,871) |
$ |
95,551 |
||||||||||||||||||
Diluted earnings (loss) per share: |
$ |
(1.47) |
$ |
(1.78) |
$ |
(0.01) |
$ |
(0.06) |
$ |
0.38 |
$ |
0.81 |
$ |
(0.10) |
$ |
(0.08) |
$ |
0.99 |
||||||||||||||||||
(1) Represents amortization expense of intangible assets from the acquisitions of OGIO, TravisMathew and Jack Wolfskin. In addition, 2020 includes an impairment charge of |
||||||||||||||||||||||||||||||||||||
(2) Represents the non-cash amortization of the debt discount on the convertible notes issued in |
||||||||||||||||||||||||||||||||||||
(3) Represents certain non-recurring costs, including costs associated with the Company's transition to its new North America Distribution Center and the implementation of new IT systems for Jack Wolfskin, as well as |
||||||||||||||||||||||||||||||||||||
(4) Represents certain non-recurring and non-cash costs, including costs associated with the acquisition of Jack Wolfskin |
|
|||||||||||||||||||||||||||||||||||||||
Non-GAAP Reconciliation and Supplemental Financial Information |
|||||||||||||||||||||||||||||||||||||||
(Unaudited) |
|||||||||||||||||||||||||||||||||||||||
(In thousands) |
|||||||||||||||||||||||||||||||||||||||
2020 Trailing Twelve Month Adjusted EBITDAS |
2019 Trailing Twelve Month Adjusted EBITDAS |
||||||||||||||||||||||||||||||||||||||
Quarter Ended |
Quarter Ended |
||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||
2019 |
2019 |
2020 |
2020 |
Total |
2018 |
2018 |
2019 |
2019 |
Total |
||||||||||||||||||||||||||||||
Net income (loss) |
$ |
31,048 |
$ |
(29,218) |
$ |
28,894 |
$ |
(167,684) |
$ |
(136,960) |
$ |
9,517 |
$ |
(28,499) |
$ |
48,647 |
$ |
28,931 |
$ |
58,596 |
|||||||||||||||||||
Interest expense, net |
9,545 |
9,049 |
9,115 |
12,163 |
39,872 |
1,056 |
704 |
9,639 |
10,260 |
21,659 |
|||||||||||||||||||||||||||||
Income tax provision (benefit) |
2,128 |
(2,352) |
9,151 |
(7,931) |
996 |
1,335 |
(9,783) |
9,556 |
7,208 |
8,316 |
|||||||||||||||||||||||||||||
Depreciation and amortization expense |
8,472 |
9,480 |
8,997 |
9,360 |
36,309 |
4,996 |
5,186 |
7,977 |
9,022 |
27,181 |
|||||||||||||||||||||||||||||
JW goodwill and trade name impairment |
— |
— |
— |
174,269 |
174,269 |
— |
— |
— |
— |
— |
|||||||||||||||||||||||||||||
Non-cash stock compensation expense |
2,513 |
3,418 |
1,861 |
2,942 |
10,734 |
3,511 |
3,555 |
3,435 |
3,530 |
14,031 |
|||||||||||||||||||||||||||||
EBITDAS |
$ |
53,706 |
$ |
(9,623) |
$ |
58,018 |
$ |
23,119 |
$ |
125,220 |
$ |
20,415 |
$ |
(28,837) |
$ |
79,254 |
$ |
58,951 |
$ |
129,783 |
|||||||||||||||||||
Acquisitions & other non-recurring costs, before taxes(1) |
3,009 |
4,090 |
1,516 |
5,856 |
14,471 |
1,521 |
(2,269) |
13,986 |
6,939 |
20,177 |
|||||||||||||||||||||||||||||
Adjusted EBITDAS |
$ |
56,715 |
$ |
(5,533) |
$ |
59,534 |
$ |
28,975 |
$ |
139,691 |
$ |
21,936 |
$ |
(31,106) |
$ |
93,240 |
$ |
65,890 |
$ |
149,960 |
|||||||||||||||||||
(1) In 2020, amounts represent certain non-recurring costs, including costs associated with the Company's transition to its new North America Distribution Center and the implementation of new IT systems for Jack Wolfskin, as well as |
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