View Filing Data

Property, plant and equipment, net

4,014

4,170

Income taxes receivable

3,850

1,810

Other current assets

26,683

23,811

Assets held for sale

2,396

Total current assets

520,273

386,996

83,894

89,093

Intangible assets, net

88,964

89,189

Goodwill

28,412

29,034

Accounts payable and accrued expenses

1,792

1,910

Other assets

40,973

41,414

Total assets

764,308

637,636

Current liabilities:

139,939

129,021

Accrued employee compensation and benefits

23,269

20,649

Accrued warranty expense

7,887

7,539

Asset-based credit facility

926

927

Income tax liability

4,663

3,430

79,489

Total current liabilities

256,173

161,566

Long-term liabilities:

Income tax payable

6,805

6,565

Convertible notes, net (Note 3)

33,737

33,533

^[1]

107,302

107,133

Long-term incentive compensation and other

5,769

7,131

Commitments and contingencies (Note 13)

Shareholders' equity:

Preferred stock, $.01 par value, 3,000,000 shares authorized, 417,639 shares issued and outstanding at both March 31, 2013 and December 31, 2012

Common stock, $.01 par value, 240,000,000 shares authorized, 72,273,413 and 72,264,020 shares issued at March 31, 2013 and December 31, 2012, respectively

723

Additional paid-in capital

203,673

204,510

Retained earnings

153,980

113,831

Accumulated other comprehensive income

6,638

14,770

Less: Common stock held in treasury, at cost, 1,184,970 and 1,267,436 shares at March 31, 2013 and December 31, 2012, respectively

(13,595)

(14,848)

Total Callaway Golf Company shareholders' equity

351,423

318,990

Non-controlling interest in consolidated entity (Note 10)

3,099

2,718

Total shareholders' equity

354,522

321,708

Total liabilities and shareholders' equity

$ 764,308

$ 637,636

[1]

The carrying value of the convertible notes at March 31, 2013 and December 31, 2012, is net of the unamortized discount of $5,198,000 and $5,367,000 respectively (see Note 3). The fair value of the convertible notes was determined based on secondary quoted market prices, and as such is classified as Level 2 in the fair value hierarchy.

CONSOLIDATED CONDENSED BALANCE SHEETS (Parenthetical) - $ / shares	Mar. 31, 2013	Dec. 31, 2012
Preferred stock, par value	$ 0.01	$ 0.01
Preferred stock, shares authorized	3,000,000	3,000,000
Preferred stock, shares issued	417,639	417,639
Preferred stock, shares outstanding	417,639	417,639
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	240,000,000	240,000,000
Common stock, shares issued	72,273,413	72,264,020
Common Stock held in treasury, shares	1,184,970	1,267,436

CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Net sales	$ 287,756	$ 285,098
Cost of sales	157,320	160,727
Gross profit	130,436	124,371
Operating expenses:
Selling expense	68,308	76,838
General and administrative expense	14,587	12,234
Research and development expense	7,413	7,473
Total operating expenses	90,308	96,545
Income from operations	40,128	27,826
Other income, net	4,001	3,684
Income before income taxes	44,129	31,510
Income tax provision (benefit)	2,469	(292)
Net income	41,660	31,802
Dividends on convertible preferred stock	783	2,625
Net income allocable to common shareholders	$ 40,877	$ 29,177
Earnings per common share:
Basic	$ 0.58	$ 0.45
Diluted	$ 0.47	$ 0.37
Weighted-average common shares outstanding:
Basic	71,060	64,983
Diluted	92,197	84,930

CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Net income	$ 41,660	$ 31,802
Other comprehensive income, net of tax:
Foreign currency translation adjustments	(8,132)	293
Comprehensive income	$ 33,528	$ 32,095

The change in equity [net assets] of a business enterprise during a period from transactions and other events and circumstances from non-owner sources which are attributable to the reporting entity. It includes all changes in equity during a period except those resulting from investments by owners and distributions to owners, but excludes any and all transactions which are directly or indirectly attributable to that ownership interest in subsidiary equity which is not attributable to the parent.

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

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CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Cash flows from operating activities:
Net income	$ 41,660	$ 31,802
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation and amortization	6,956	8,745
Deferred taxes	332	(2,321)
Non-cash share-based compensation	757	788
Gain on disposal of long-lived assets	(247)	(559)
Gain on sale of intangible assets		(6,616)
Discount amortization on convertible notes	169
Change in assets and liabilities:
Accounts receivable, net	(166,914)	(140,786)
Inventories	3,602	(4,029)
Other assets	(5,948)	(2,010)
Accounts payable and accrued expenses	17,690	23,332
Accrued employee compensation and benefits	2,372	(977)
Accrued warranty expense	348	122
Income taxes receivable/payable	(381)	(13)
Other liabilities	(956)	116
Net cash used in operating activities	(100,560)	(92,406)
Cash flows from investing activities:
Capital expenditures	(3,145)	(8,687)
Proceeds from sales of property and equipment	3,651	50
Net proceeds from sales of intangible assets		26,861
Net cash provided by investing activities	506	18,224
Cash flows from financing activities:
Issuance of common stock		1
Dividends paid	(1,495)	(3,279)
Proceeds from credit facilities, net	79,489	85,900
Other financing activities		169
Net cash provided by financing activities	77,994	82,791
Effect of exchange rate changes on cash and cash equivalents	(1,871)	37
Net (decrease) increase in cash and cash equivalents	(23,931)	8,646
Cash and cash equivalents at beginning of period	52,003	43,023
Cash and cash equivalents at end of period	28,072	51,669
Supplemental disclosures:
Cash paid for income taxes, net	(2,527)	(1,982)
Cash (paid) received for interest and fees	(2,062)	673
Noncash investing and financing activities:
Dividends payable	131	438
Acquisition of treasury stock for minimum statutory withholding taxes	357	602
Accrued capital expenditures at period end	$ 564	$ 891

CONSOLIDATED CONDENSED STATEMENT OF SHAREHOLDERS' EQUITY - 3 months ended Mar. 31, 2013 - USD ($) shares in Thousands, $ in Thousands	Total	Preferred Stock	Common Stock	Paid-in Capital	Retained Earnings	Accumulated Other Comprehensive Income (Loss)	Treasury Stock	Non-controlling Interest
Beginning Balance at Dec. 31, 2012	$ 321,708	$ 4	$ 723	$ 204,510	$ 113,831	$ 14,770	$ (14,848)	$ 2,718
Beginning Balance (in shares) at Dec. 31, 2012		418	72,264				(1,267)
Acquisition of treasury stock (in shares)							(55)
Acquisition of treasury stock	(357)						$ (357)
Issuance of treasury stock (in shares)							137
Issuance of treasury stock				(1,610)			$ 1,610
Compensatory stock and stock options (in shares)			9
Compensatory stock and stock options	757			757
Stock dividends				16	(16)
Cash dividends	(1,495)				(1,495)
Equity adjustment from foreign currency translation	(8,132)					(8,132)
Net income	42,041				41,660			381
Ending Balance at Mar. 31, 2013	$ 354,522	$ 4	$ 723	$ 203,673	$ 153,980	$ 6,638	$ (13,595)	$ 3,099
Ending Balance (in shares) at Mar. 31, 2013		418	72,273				(1,185)

Basis of Presentation

3 Months Ended

Mar. 31, 2013

Basis of Presentation

Note 1. Basis of Presentation

The accompanying unaudited consolidated condensed financial statements have been prepared by Callaway Golf Company (the “Company” or “Callaway Golf”) pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, certain information and disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) have been condensed or omitted. These consolidated condensed financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012 filed with the SEC. These consolidated condensed financial statements, in the opinion of management, include all adjustments necessary for the fair presentation of the financial position, results of operations and cash flows for the periods and dates presented. Interim operating results are not necessarily indicative of operating results for the full year.

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from those estimates and assumptions.

Recent Accounting Standards

The Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2013-05, "Foreign Currency Matters (Topic 830): Parent’s Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity." This ASU provides guidance on releasing cumulative translation adjustments to net income when an entity ceases to have a controlling financial interest in a subsidiary or business within a foreign entity. The cumulative translation adjustments should be released only if the sale or transfer results in the complete or substantially complete liquidation of the foreign entity in which the subsidiary or group of assets resides. The amendment is effective on a prospective basis for fiscal years and interim reporting periods within those years, beginning after December 15, 2013. The adoption of this ASU is not expected to have a material impact on the Company's consolidated condensed financial statements.

In December 2011, the FASB issued ASU No. 2011-11, “Balance Sheet (Topic 210): Disclosures about Offsetting Assets and Liabilities.” This ASU requires an entity to disclose information about offsetting and related arrangements to enable users of its financial statements to understand the effect of those arrangements on its financial position. ASU No. 2011-11 is effective for annual and interim reporting periods beginning on or after January 1, 2013 on a retrospective basis. The adoption of this ASU did not have a material impact on the Company’s disclosures to the consolidated condensed financial statements.

The entire disclosure for organization, consolidation and basis of presentation of financial statements disclosure.

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Cost Reduction Initiatives

Cost Reduction Initiatives

3 Months Ended

Mar. 31, 2013

Note 2. Cost Reduction Initiatives

In July 2012, the Company implemented its cost-reduction initiatives (the “Cost Reduction Initiatives”) designed to streamline and simplify the Company’s organizational structure and change the manner in which the Company approaches and operates its business. In connection with these initiatives, the Company expects to incur total pre-tax charges of approximately $65,000,000, of which approximately two-thirds is expected to be non-cash charges. In the aggregate through March 31, 2013, the Company recognized total charges of $57,570,000 in connection with these initiatives. These initiatives are estimated to yield approximately $60,000,000 in annualized savings. The Company expects to incur estimated future charges of approximately $7,400,000 over the next nine months. These estimates are based upon current information and expectations; however, the amount, nature, or timing of these charges could vary as the Company further develops and implements these initiatives.

During the three months ended March 31, 2013, the Company recognized charges of $3,509,000 in connection with the Cost Reduction Initiatives. Amounts recognized in cost of sales and operating expenses totaled $2,282,000 and $1,227,000, respectively. See Note 17 for charges absorbed by the Company’s operating segments.

The table below depicts the total charges recognized during the three months ended March 31, 2013, the liability balances, and the current estimated future charges relating to the Cost Reduction Initiatives (in thousands). Amounts payable as of March 31, 2013 are included in accrued employee compensation and benefits and accounts payable and accrued expenses in the accompanying consolidated condensed balance sheets.


	Cost Reduction Initiatives

	Workforce Reductions	Transition Costs	Asset Write-offs	Total

Restructuring payable balance, December 31, 2012	$ 4,531	$ 591	$ —	$ 5,122
Charges to cost and expense	1,091	2,418	—	3,509
Non-cash items	—	(1,699 )	---	(1,699 )
Cash payments	(3,547 )	(717 )	—	(4,264 )

Restructuring payable balance, March 31, 2013	$ 2,075	$ 593	$ —	$ 2,668

Total future estimated charges as of March 31, 2013	$ 1,000	$ 6,400	$ —	$ 7,400

The entire disclosure for restructuring and related activities. Description of restructuring activities such as exit and disposal activities, include facts and circumstances leading to the plan, the expected plan completion date, the major types of costs associated with the plan activities, total expected costs, the accrual balance at the end of the period, and the periods over which the remaining accrual will be settled.

Earnings per Common Share

Financing Arrangements

3 Months Ended

Mar. 31, 2013

Financing Arrangements

Note 3. Financing Arrangements

In addition to cash on hand as well as cash generated from operations, the Company relies on its asset-based revolving credit facility to manage seasonal fluctuations in liquidity and to provide additional liquidity when the Company’s operating cash flows are not sufficient to fund the Company’s requirements. The Company’s ability to generate sufficient positive cash flows from operations is subject to many risks and uncertainties, including future economic trends and conditions, the success of the Company’s 2012 Cost Reduction Initiatives (Note 2), demand for the Company’s products, foreign currency exchange rates, and the other risks and uncertainties applicable to the Company and its business. If the Company is unable to generate sufficient cash flows to fund its business due to a decline in sales or otherwise, and is unable to reduce its manufacturing costs and operating expenses to offset such decline, the Company will need to increase its reliance on its credit facility for needed liquidity. If the Company’s current credit facility is not available or sufficient and the Company could not secure alternative financing arrangements, the Company’s future operations would be significantly, adversely affected. The Company believes that its current credit facility, along with its cash on hand and cash flows expected to be generated from operations is sufficient to meet the Company’s liquidity requirements for at least the next 12 months.

Asset-Based Revolving Credit Facility

The Company has a Loan and Security Agreement with Bank of America N.A. (as amended, the “ABL Facility”) which provides a senior secured asset-based revolving credit facility of up to $230,000,000, comprised of a $158,333,000 U.S. facility (of which $20,000,000 is available for letters of credit), a $31,667,000 Canadian facility (of which $5,000,000 is available for letters of credit) and a $40,000,000 United Kingdom facility (of which $2,000,000 is available for letters of credit), in each case subject to borrowing base availability under the applicable facility. The aggregate amount outstanding under the Company’s letters of credit was $2,709,000 at March 31, 2013. The amounts outstanding under the ABL Facility are secured by certain assets, including inventory and accounts receivable, of the Company’s U.S., Canadian and U.K. legal entities.

As of March 31, 2013, the Company had $79,489,000 borrowings outstanding under the ABL Facility and had $28,072,000 of cash and cash equivalents. As of March 31, 2013, the Company could borrow an additional $51,516,000 under the ABL Facility. The maximum availability under the ABL Facility fluctuates with the general seasonality of the business and increases and decreases with changes in the Company’s inventory and accounts receivable balances. The maximum availability is at its highest during the first half of the year when the Company’s inventory and accounts receivable balances are high and then decreases during the second half of the year when the Company’s accounts receivable balance is lower due to an increase in cash collections. Average outstanding borrowings during the three months ended March 31, 2013 was $38,975,000 and average available liquidity, defined as cash on hand combined with amounts available under the ABL Facility after outstanding borrowings was $91,072,000. Amounts borrowed under the ABL Facility may be repaid and borrowed as needed. The entire outstanding principal amount (if any) is due and payable at maturity on June 30, 2016.

The ABL Facility includes certain restrictions including, among other things, restrictions on incurrence of additional debt, liens, dividends and other restricted payments, asset sales, investments, mergers, acquisitions and affiliate transactions. As of March 31, 2013, the Company was in compliance with all covenants of the ABL Facility. Additionally, the Company is subject to compliance with a fixed charge coverage ratio covenant during, and continuing 30 days after, any period in which the Company’s borrowing base availability falls below $25,000,000. The Company would not have met the fixed charge coverage ratio as of March 31, 2013; however, the Company’s borrowing base availability was above $25,000,000 during the three months ended March 31, 2013, and as such the Company was not subject to compliance with the fixed charge coverage ratio.

The interest rate applicable to outstanding loans under the ABL Facility fluctuates depending on the Company’s trailing twelve month EBITDA (as defined by the ABL Facility) combined with the Company’s “availability ratio.” The Company’s “availability ratio” is expressed as a percentage of (a) the average daily availability under the ABL Facility to (b) the sum of the Canadian, the U.K. and the U.S. borrowing bases, as adjusted. All applicable margins may be permanently reduced by 0.25% if EBITDA meets or exceeds $25,000,000 over any trailing twelve month period, and may be permanently reduced by an additional 0.25% if EBITDA meets or exceeds $50,000,000 over any trailing twelve month period. At March 31, 2013, the Company’s interest rate applicable to its outstanding loans under the ABL Facility was 4.75%.

In addition, the ABL Facility provides for monthly fees ranging from 0.375% to 0.5% of the unused portion of the ABL Facility, depending on the prior month’s average daily balance of revolver loans and stated amount of letters of credit relative to lenders’ commitments.

The origination fees incurred in connection with the ABL Facility totaled $4,273,000, which are being amortized into interest expense over the term of the ABL Facility agreement. Unamortized origination fees as of March 31, 2013 and December 31, 2012 were $2,952,000 and $3,171,000, respectively, of which $908,000 and $906,000, respectively, were included in other current assets, and $2,044,000 and $2,265,000 were included in other assets, respectively, in the accompanying consolidated condensed balance sheets.

Convertible Senior Notes

In August 2012, the Company issued $112,500,000 of 3.75% Convertible Senior Notes (the “convertible notes”). The convertible notes pay interest of 3.75% per year on the principal amount, payable semiannually in arrears on February 15 and August 15 of each year. The first interest payment was made on February 15, 2013. The convertible notes mature on August 15, 2019.

The Company incurred transactional fees of $3,533,000, which are being amortized over the term of the convertible notes. Unamortized transaction fees as of March 31, 2013 and December 31, 2012 were $3,239,000 and $3,365,000, respectively, of which $505,000 was included in other current assets as of both March 31, 2013 and December 31, 2012 in the accompanying consolidated condensed balance sheets, and $2,734,000 and $2,860,000 was included in other assets as of March 31, 2013 and December 31, 2012, respectively, in the accompanying consolidated condensed balance sheets.

The net carrying amount of the convertible notes as of March 31, 2013 and December 31, 2012 was $107,302,000 and $107,133,000, respectively. The unamortized discount of $5,198,000 as of March 31, 2013 will be amortized over the remaining term of approximately 6.4 years. Total interest and amortization expense recognized during the three months ended March 31, 2013 was $1,209,000.

The convertible notes are convertible, at the option of the note holder, at any time on or prior to the close of business on the business day immediately preceding August 15, 2019, into shares of common stock at an initial conversion rate of 133.3333 shares per $1,000 principal amount of convertible notes, which is equal to 15,000,000 shares of common stock at a conversion price of approximately $7.50 per share, subject to customary anti-dilution adjustments. Upon the occurrence of certain change of control events of the Company, the Company will pay a premium on the convertible notes converted in connection with such change of control events by increasing the conversion rate on such convertible notes.

Under certain circumstances, the Company has the right to terminate the right of note holders to convert their convertible notes. If the Company exercises such termination right prior to August 15, 2015, each note holder who converts its convertible notes after receiving notice of such exercise will receive a make-whole payment in cash or common stock, as the Company may elect, with respect to the convertible notes converted.

Upon the occurrence of a change of control of the Company or a termination of trading of the common stock of the Company, note holders will have the option to require the Company to repurchase for cash all or any portion of such note holder’s convertible notes at a price equal to 100% of the principal amount of the repurchased convertible notes, plus accrued and unpaid interest thereon to the repurchase date.

The convertible notes are not redeemable by the Company prior to August 15, 2015. On or after August 15, 2015, the convertible notes are redeemable in whole or in part at the option of the Company at a redemption price equal to 100% of the principal amount of the convertible notes to be redeemed, plus accrued and unpaid interest thereon to the redemption date.

The convertible notes contain certain covenants including payment of principal, certain repurchase obligations and interest, obligation of the Company to convert the convertible notes, and other customary terms as defined in the Indenture. The Company was in compliance with these covenants as of March 31, 2013.

Preferred Stock Offering

3 Months Ended

Mar. 31, 2013

Preferred Stock

Note 4. Preferred Stock

The Company has 417,639 shares of 7.50 % Series B Cumulative Perpetual Convertible Preferred Stock, 0.01 par value, (the “preferred stock”) outstanding. The preferred stock is generally convertible at any time at the holder’s option into common stock of the Company at an initial conversion rate of 14.1844 shares of Callaway’s common stock per share of preferred stock, which is equivalent to an initial conversion price of approximately $7.05 per share. At March 31, 2013, based on the initial conversion rate, approximately 5,924,000 shares of common stock would be issuable upon conversion of all of the outstanding shares of preferred stock.

The terms of the preferred stock provide for a liquidation preference of $100 per share and cumulative unpaid dividends from the date of original issue at a rate of 7.50% per annum (equal to an annual rate of $7.50 per share), subject to adjustment in certain circumstances. As of March 31, 2013, the liquidation preference would have been $41,894,000. Dividends on the preferred stock are payable quarterly in arrears subject to declaration by the Board of Directors and compliance with the Company’s line of credit and applicable law.

The Company, at its option, may redeem the preferred stock subject to available liquidity and compliance with any applicable legal requirements and contractual obligations, in whole or in part, at a price equal to 100% of the liquidation preference, plus all accrued and unpaid dividends. The preferred stock has no maturity date and has no voting rights prior to conversion into the Company’s common stock, except in limited circumstances.

Earnings per Common Share

3 Months Ended

Mar. 31, 2013

Note 5. Earnings per Common Share

Earnings per common share, basic, is computed by dividing net income less preferred stock dividends (i.e., net income allocable to common shareholders) by the weighted-average number of common shares outstanding for the period.

Earnings per common share, diluted, is computed by dividing net income adjusted for the interest on the convertible notes by the weighted-average number of common shares – diluted. Dilutive securities are included in the calculation of diluted earnings per common share using the treasury stock method and the if-converted method in accordance with Accounting Standards Codification ("ASC") Topic 260, “Earnings per Share.” Dilutive securities include the common stock equivalents of convertible preferred stock and convertible notes, options granted pursuant to the Company’s stock option plans and outstanding restricted stock units granted to employees and non-employee directors (see Note 14).

Weighted-average common shares outstanding—diluted is the same as weighted-average common shares outstanding—basic in periods when a net loss is reported or in periods when diluted earnings per share is higher than basic earnings per share.

The following table summarizes the computation of basic and diluted earnings per share:


	Three Months Ended March 31,

	2013	2012

Earnings per common share—basic
Net income	$ 41,660	$ 31,802
Less: Preferred stock dividends	(783)	(2,625)

Net income allocable to common shareholders	$ 40,877	$ 29,177

Weighted-average common shares outstanding—basic	71,060	64,983

Basic earnings per common share	$ 0.58	$ 0.45

Earnings per common share—diluted
Net income	$ 41,660	$ 31,802
Interest on convertible debt, net of tax	1,209	—

Net income including assumed conversions	$ 42,869	$ 31,802

Weighted-average common shares outstanding—basic	71,060	64,983
Convertible notes weighted-average shares outstanding	15,000	—
Preferred stock weighted-average shares outstanding	5,924	19,858
Options, restricted stock and other dilutive securities	213	89

Weighted-average common shares outstanding—diluted	92,197	84,930

Dilutive earnings per common share	$ 0.47	$ 0.37

Options with an exercise price in excess of the average market value of the Company’s common stock during the period have been excluded from the calculation of earnings per common share—diluted, as their effect would be antidilutive. For the three months ended March 31, 2013 and 2012, dilutive securities outstanding totaling approximately 5,979,000 and 9,463,000, respectively, were excluded from the calculation as their effect would have been antidilutive.

Sale of Buildings

3 Months Ended

Mar. 31, 2013

Sale of Buildings

Note 6. Sale of Buildings

On February 28, 2013, the Company completed the sale of its manufacturing facility in Chicopee, Massachusetts for proceeds of $3,496,000, net of closing costs and commissions. The Company had marked the building down to its estimated selling price, net of commissions, fees and estimated environmental remediation costs in 2012 and recorded a loss on the sale of $31,000 during the first quarter of 2013. The Company has $1,243,000 accrued in accounts payable and accrued expenses as of March 31, 2013 and December 31, 2012 for certain environmental remediation costs that were incurred in connection with the sale of this facility. The Company has leased back a reduced portion of the square footage that it believes is adequate for ongoing golf ball operations.

The entire disclosure for sale leaseback transactions. Includes the elements of a transaction involving the sale of property to another party and the lease of the property back to the seller.

Goodwill and Intangible Assets

Inventories

3 Months Ended

Mar. 31, 2013

Inventories

Note 7. Inventories

Inventories are summarized below (in thousands):


	March 31, 2013	December 31, 2012

Inventories:
Raw materials	$ 50,716	$ 43,469
Work-in-process	783	619
Finished goods	150,452	167,646

	$ 201,951	$ 211,734

Goodwill and Intangible Assets

3 Months Ended

Mar. 31, 2013

Note 8. Goodwill and Intangible Assets

In accordance with ASC Topic 350, “Intangibles—Goodwill and Other,” the Company’s goodwill and certain intangible assets are not amortized, but are subject to an annual impairment test. The Company performs an impairment analysis on its goodwill and intangible assets at least annually and whenever events or changes in circumstances indicate that the carrying value of such assets may not be fully recoverable.

The following sets forth the intangible assets by major asset class (dollars in thousands):


	Useful Life (Years)	March 31, 2013			December 31, 2012

		Gross	Accumulated Amortization	Net Book Value	Gross	Accumulated Amortization	Net Book Value

Non-Amortizing:
Trade name, trademark and trade dress and other	NA	$ 88,590	$ —	$ 88,590	$ 88,590	$ —	$ 88,590
Amortizing:
Patents	2-16	31,581	31,241	340	31,581	31,022	559
Developed technology and other	1-9	7,961	7,927	34	7,961	7,921	40

Total intangible assets		$ 128,132	$ 39,168	$ 88,964	$ 128,132	$ 38,943	$ 89,189

Aggregate amortization expense on intangible assets was approximately $225,000 and $906,000 for the three months ended March 31, 2013 and 2012, respectively.

Amortization expense related to intangible assets at March 31, 2013 in each of the next five fiscal years and beyond is expected to be incurred as follows (in thousands):


Remainder of 2013	64
2014	68
2015	51
2016	51
2017	51
2018	51
Thereafter	38

	$ 374

Goodwill at March 31, 2013 and December 31, 2012 was $28,412,000 and $29,034,000, respectively. The decrease in goodwill during the three months ended March 31, 2013 of $622,000 was due to foreign currency fluctuations. Gross goodwill before impairments at March 31, 2013 and December 31, 2012 was $30,161,000 and $30,783,000, respectively.

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

Investments

3 Months Ended

Mar. 31, 2013

Investments

Note 9. Investments

Investment in TopGolf International, Inc.

The Company owns $23,967,000 of preferred shares of TopGolf International, Inc. (“TopGolf”), the owner and operator of TopGolf entertainment centers. In connection with this investment, the Company has a preferred partner agreement with TopGolf in which the Company has preferred signage rights, rights as the preferred supplier of golf products used or offered for use at TopGolf facilities at prices no less than those paid by the Company’s customers, preferred retail positioning in the TopGolf retail stores, access to consumer information obtained by TopGolf, and other rights incidental to those listed.

The Company’s ownership interest in TopGolf is less than 20%. In addition, the Company does not have the ability to significantly influence the operating and financing activities and policies of TopGolf. Accordingly, the Company’s investment in TopGolf is accounted for at cost in accordance with ASC Topic 325, “Investments—Other,” and is included in other assets in the accompanying consolidated condensed balance sheets as of March 31, 2013 and December 31, 2012.

Non-Controlling Interest

3 Months Ended

Mar. 31, 2013

Non-Controlling Interest

Note 10. Non-Controlling Interest

Investment in Qingdao Suntech Sporting Goods Limited Company

The Company has a Golf Ball Manufacturing and Supply Agreement with Qingdao Suntech Sporting Goods Limited Company (“Suntech”), in which Suntech manufactures and supplies certain golf balls solely for and to the Company. In connection with the agreement, the Company provides Suntech with golf ball raw materials, packing materials, molds, tooling, as well as manufacturing equipment in order to carry out the manufacturing and supply obligations set forth in the agreement. Suntech provides the personnel as well as the facilities to effectively perform these manufacturing and supply obligations. Due to the nature of the arrangement, as well as the controlling influence the Company has in the Suntech operations, the Company is required to consolidate the financial results of Suntech in its consolidated financial statements in accordance with ASC Topic 810, “Consolidations.” As of March 31, 2013 and December 31, 2012, non-controlling interest related to Suntech in the consolidated condensed statements of shareholders’ equity included net profits of $381,000 and $259,000, respectively.

Suntech is a wholly-owned subsidiary of Suntech Mauritius Limited Company (“Mauritius”). The Company has entered into a loan agreement with Mauritius in order to provide working capital for Suntech. In connection with this loan agreement, the Company loaned Mauritius a total of $3,200,000 of which $1,788,000 was outstanding as of March 31, 2013 and December 31, 2012. The Company recorded the loan in other assets in the accompanying consolidated condensed balance sheets.

The entire disclosure for noncontrolling interest in consolidated subsidiaries, which could include the name of the subsidiary, the ownership percentage held by the parent, the ownership percentage held by the noncontrolling owners, the amount of the noncontrolling interest, the location of this amount on the balance sheet (when not reported separately), an explanation of the increase or decrease in the amount of the noncontrolling interest, the noncontrolling interest share of the net Income or Loss of the subsidiary, the location of this amount on the income statement (when not reported separately), the nature of the noncontrolling interest such as background information and terms, the amount of the noncontrolling interest represented by preferred stock, a description of the preferred stock, and the dividend requirements of the preferred stock.

Product Warranty

3 Months Ended

Mar. 31, 2013

Product Warranty

Note 11. Product Warranty

The Company has a stated two-year warranty policy for its golf clubs, although the Company sometimes honors warranty claims after the two-year stated warranty period at the Company’s discretion. The Company’s policy is to accrue the estimated cost of satisfying future warranty claims at the time the sale is recorded. In estimating its future warranty obligations, the Company considers various relevant factors, including the Company’s stated warranty policies and practices, the historical frequency of claims, and the cost to replace or repair its products under warranty.

The following table provides a reconciliation of the activity related to the Company’s reserve for warranty expense (in thousands):


	Three Months Ended March 31,

	2013	2012

Beginning balance	$ 7,539	$ 8,140
Provision	1,835	1,854
Claims paid/costs incurred	(1,487)	(1,732 )

Ending balance	$ 7,887	$ 8,262

Income Taxes

3 Months Ended

Mar. 31, 2013

Income Taxes

Note 12. Income Taxes

The Company calculates its interim income tax provision in accordance with ASC 270, “Interim Reporting”, and ASC 740 “Accounting for Income Taxes” (together, “ASC 740”). In general, at the end of each interim period, the Company estimates the annual effective tax rate for foreign operations and applies that rate to its ordinary foreign quarterly earnings. For the three months ended March 31, 2013, the discrete method was used to calculate the Company’s U.S. interim tax expense as the annual effective rate was not considered a reliable estimate of year-to-date income tax expense. Under the discrete method, the Company determines its U.S. tax expense based upon actual results as if the interim period were an annual period. The Company’s full U.S. valuation allowance position and the seasonality of the Company’s business create results with significant variations in the customary relationship between income tax expense and pre-tax income for the interim periods. As a result, the use of the discrete method is more appropriate than the annual effective tax rate method.

The income tax expense for the first quarter of 2013 was $2,469,000 compared to a tax benefit of $292,000 for the same period in 2012. The difference is primarily due to the tax benefit recorded in 2012 resulting from the reversal of the deferred tax liabilities related to the Top-Flite and Ben Hogan indefinite lived assets sold in the first quarter of 2012.

The realization of deferred tax assets, including loss and credit carry forwards, is subject to the Company generating sufficient taxable income during the periods in which the temporary differences become realizable. Due to the Company’s taxable losses in the United States over the last few years, the Company has recorded a valuation allowance against its U.S. deferred tax assets. At each quarter end that a valuation allowance is maintained, as the U.S. deferred tax assets are adjusted upwards or downwards, the associated valuation allowance and income tax expense will be adjusted. If sufficient positive evidence arises in the future, such as a sustained return to profitability in the U.S. business, any existing valuation allowance could be reversed as appropriate, decreasing income tax expense in the period that such conclusion is reached.

As of March 31, 2013, the liability for income taxes associated with uncertain tax positions was $7,773,000 and could be reduced by $2,849,000 of offsetting tax benefits associated with the correlative effects of potential transfer pricing adjustments as well as $2,205,000 of deferred taxes. The net amount of $2,719,000, if recognized, would favorably affect the Company’s consolidated condensed financial statements and effective income tax rate. The Company does not expect that unrecognized tax benefit liabilities will significantly increase or decrease during the next 12 months.

The Company recognizes interest and/or penalties related to income tax matters in income tax expense. For the three months ended March 31, 2013 and 2012, the Company recognized approximately $263,000 and $62,000, respectively, of interest expense and penalties in the provision for income taxes. As of March 31, 2013 and December 31, 2012, the Company had accrued $1,508,000 and $1,245,000, respectively, before income tax benefit, for the payment of interest and penalties.

The Company or one of its subsidiaries files income tax returns in the U.S. federal jurisdiction and various states and foreign jurisdictions. The Company is generally no longer subject to income tax examinations by tax authorities in the following major jurisdictions:


Tax Jurisdiction		Years No Longer Subject to Audit

U.S. federal		2008 and prior
California (United States)		2007 and prior
Canada		2004 and prior
Japan		2006 and prior
South Korea		2008 and prior
United Kingdom		2008 and prior

Pursuant to Section 382 of the Internal Revenue Code, use of the Company’s NOL and credit carry-forwards may be limited significantly if the Company were to experience a cumulative change in ownership of the Company’s stock by “5-percent shareholders” that exceeds 50% over a rolling three-year period. The Company does not believe there has been a cumulative change in ownership in excess of 50% during that period. The Company continues to monitor changes in ownership. If such a cumulative change did occur in any three year period and the Company were limited in the amount of losses it could use to offset taxable income, the Company’s results of operations and cash flows would be adversely impacted.

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08.(h))
-URI http://asc.fasb.org/extlink&oid=6881521&loc=d3e23780-122690

Reference 2: http://www.xbrl.org/2003/role/presentationRef
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-Name Accounting Standards Codification
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Reference 5: http://www.xbrl.org/2003/role/presentationRef
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Reference 6: http://www.xbrl.org/2003/role/presentationRef
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-Number 109
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-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
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Reference 8: http://www.xbrl.org/2003/role/presentationRef
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-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Commitments and Contingencies

Commitments and Contingencies

3 Months Ended

Mar. 31, 2013

Note 13. Commitments and Contingencies

Legal Matters

The Company is subject to routine legal claims, proceedings, and investigations incident to its business activities, including claims, proceedings, and investigations relating to commercial disputes and employment matters. The Company also receives from time to time information claiming that products sold by the Company infringe or may infringe patent, trademark, or other intellectual property rights of third parties. One or more such claims of potential infringement could lead to litigation, the need to obtain licenses, the need to alter a product to avoid infringement, a settlement or judgment, or some other action or material loss by the Company, which also could adversely affect the Company’s overall ability to protect its product designs and ultimately limit its future success in the marketplace. In addition, the Company is occasionally subject to non-routine claims, proceedings, or investigations.

The Company regularly assesses such matters to determine the degree of probability that the Company will incur a material loss as a result of such matters as well as the range of possible loss. An estimated loss contingency is accrued in the Company’s financial statements if it is probable the Company will incur a loss and the amount of the loss can be reasonably estimated. The Company reviews all claims, proceedings, and investigations at least quarterly and establishes or adjusts any accruals for such matters to reflect the impact of negotiations, settlements, advice of legal counsel, and other information and events pertaining to a particular matter. All legal costs associated with such matters are expensed as incurred.

Historically, the claims, proceedings and investigations brought against the Company, individually, and in the aggregate, have not had a material adverse effect upon the consolidated results of operations, cash flows, or financial position of the Company. The Company believes that it has valid legal defenses to the matters currently pending against the Company. These matters are inherently unpredictable and the resolutions of these matters are subject to many uncertainties and the outcomes are not predictable with assurance. Consequently, management is unable to estimate the ultimate aggregate amount of monetary loss, amounts covered by insurance, or the financial impact that will result from such matters. Management believes that the final resolution of the current matters pending against the Company, individually and in the aggregate, will not have a material adverse effect upon the Company’s consolidated financial position. It is possible, however, that the Company’s results of operations or cash flows could be materially affected in any particular period by the unfavorable resolution of one or more of these contingencies.

Unconditional Purchase Obligations

During the normal course of its business, the Company enters into agreements to purchase goods and services, including purchase commitments for production materials, endorsement agreements with professional golfers and other endorsers, employment and consulting agreements, and intellectual property licensing agreements pursuant to which the Company is required to pay royalty fees. It is not possible to determine the amounts the Company will ultimately be required to pay under these agreements as they are subject to many variables including performance-based bonuses, reductions in payment obligations if designated minimum performance criteria are not achieved, and severance arrangements. As of March 31, 2013, the Company has entered into many of these contractual agreements with terms ranging from one to four years. The minimum obligation that the Company is required to pay under these agreements is $76,247,000 over the next four years. In addition, the Company also enters into unconditional purchase obligations with various vendors and suppliers of goods and services in the normal course of operations through purchase orders or other documentation or that are undocumented except for an invoice. Such unconditional purchase obligations are generally outstanding for periods less than a year and are settled by cash payments upon delivery of goods and services and are not reflected in this total.

Future purchase commitments as of March 31, 2013, are as follows (in thousands):


Remainder of 2013	$ 50,714
2014	21,308
2015	2,949
2016	970
2017	306
Thereafter	—

	$ 76,247

Other Contingent Contractual Obligations

During its normal course of business, the Company has made certain indemnities, commitments and guarantees under which it may be required to make payments in relation to certain transactions. These include (i) intellectual property indemnities to the Company’s customers and licensees in connection with the use, sale and/or license of Company product or trademarks, (ii) indemnities to various lessors in connection with facility leases for certain claims arising from such facilities or leases, (iii) indemnities to vendors and service providers pertaining to the goods and services provided to the Company or based on the negligence or willful misconduct of the Company and (iv) indemnities involving the accuracy of representations and warranties in certain contracts. In addition, the Company has consulting agreements that provide for payment of nominal fees upon the issuance of patents and/or the commercialization of research results. The Company has also issued guarantees in the form of a standby letter of credit as security for contingent liabilities under certain workers’ compensation insurance policies.

The duration of these indemnities, commitments and guarantees varies, and in certain cases, may be indefinite. The majority of these indemnities, commitments and guarantees do not provide for any limitation on the maximum amount of future payments the Company could be obligated to make. Historically, costs incurred to settle claims related to indemnities have not been material to the Company’s financial position, results of operations or cash flows. In addition, the Company believes the likelihood is remote that material payments under the commitments and guarantees described above will have a material effect on the Company’s financial condition. The fair value of indemnities, commitments and guarantees that the Company issued during the three months ended March 31, 2013 was not material to the Company’s financial position, results of operations or cash flows.

Employment Contracts

In addition, the Company has made contractual commitments to each of its officers and certain other employees providing for severance payments, including salary continuation, upon the termination of employment by the Company for convenience or by the officer for substantial cause. In addition, in order to assure that the officers would continue to provide independent leadership consistent with the Company’s best interest, the contracts also generally provide for certain protections in the event of an actual or threatened change in control of the Company. These protections include the payment of certain severance benefits, such as salary continuation, upon the termination of employment following a change in control.

The entire disclosure for commitments and contingencies.

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 20
-Section 50
-Paragraph 1
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Reference 5: http://www.xbrl.org/2003/role/presentationRef
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Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name FASB Interpretation (FIN)
-Number 14
-Paragraph 3
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 5
-Paragraph 9, 10, 11, 12
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Share-Based Employee Compensation

Share-Based Employee Compensation

3 Months Ended

Mar. 31, 2013

Note 14. Share-Based Employee Compensation

As of March 31, 2013, the Company had one shareholder approved stock plan under which shares were available for equity-based awards: the Callaway Golf Company Amended and Restated 2004 Incentive Plan. From time to time, the Company grants stock options, restricted stock units, phantom stock units, stock appreciation rights and other awards under this plan.

The table below summarizes the amounts recognized in the financial statements for the three months ended March 31, 2013 and 2012 for share-based compensation, including expense for phantom stock units and cash settled stock appreciation rights granted to employees (in thousands):


	Three Months Ended March 31,

	2013	2012

Cost of sales	$ 80	$ 80
Operating expenses	1,239	2,785

Total cost of employee share-based compensation included in income, before income tax	$ 1,319	$ 2,865

Stock Options

During the three months ended March 31, 2013, the Company granted 1,784,000 shares underlying stock options at a weighted average grant-date fair value of $2.46 per share. During the three months ended March 31, 2012, the number of shares underlying stock options granted was nominal. Total compensation expense recognized for stock options during the three months ended March 31, 2013 and 2012 was $379,000 and $435,000, respectively.

The Company records compensation expense for employee stock options based on the estimated fair value of the options on the date of grant using the Black-Scholes option-pricing model.

The table below summarizes the weighted average Black-Scholes fair value assumptions used in the valuation of stock options granted during the three months ended March 31, 2013 and 2012.


	Three Months Ended March 31,

	2013	2012

Dividend yield	0.6 %	1.2 %
Expected volatility	48.8 %	50.1 %
Risk free interest rate	0.6 %	0.8 %
Expected life	4.3 years	4.9 years

Restricted Stock Units

The Company granted 368,000 and 300,000 shares underlying restricted stock units during the three months ended March 31, 2013 and 2012, respectively, at a weighted average grant-date fair value of $6.52 and $6.48, respectively. Total compensation expense recognized for restricted stock units during the three months ended March 31, 2013 and 2012 was $379,000 and $352,000, respectively. At March 31, 2013, the Company had $4,331,000 of total unrecognized compensation expense related to non-vested restricted stock units under the Company’s share-based payment plans. The amount of unrecognized compensation expense noted above does not necessarily represent the amount that will ultimately be realized by the Company in its consolidated condensed statement of operations due to the application of forfeiture rates.

Phantom Stock Units

Phantom stock units (“PSUs”) awarded under the 2004 Plan are a form of share-based award that are indexed to the Company’s stock and are settled in cash. Because PSUs are settled in cash, compensation expense recognized over the vesting period will vary based on changes in fair value. Fair value is remeasured at the end of each interim reporting period based on the closing price of the Company’s stock. PSUs vest at the end of a three year period.

During the first quarter of 2012, the Company granted 284,000 shares of PSUs with a grant date fair value of $1,900,000. The Company did not grant PSUs in the first quarter of 2013. Compensation expense recognized for the three months ended March 31, 2013 and 2012 was $265,000 and $857,000, respectively. Accrued compensation expense for PSUs for the three months ended March 31, 2013 was $1,589,000, of which $924,000 and $665,000 was recorded in accrued employee compensation and benefits and long-term other liabilities, respectively, in the accompanying consolidated condensed balance sheets. At December 31, 2012, the Company accrued $1,324,000 in long-term other liabilities in the accompanying consolidated condensed balance sheet. There was no accrual in accrued employee compensation and benefits at December 31, 2012.

Stock Appreciation Rights

The Company records compensation expense for cash settled stock appreciation rights (“SARs”) based on the estimated fair value on the date of grant using the Black Scholes option-pricing model. SARs are subsequently remeasured at each interim reporting period based on a revised Black Scholes value until they are exercised. SARs vest over a three year period. During the three months ended March 31, 2012, the Company granted 3,100,000 SARs. The Company did not grant SARs in the first quarter of 2013. As of March 31, 2013 and 2012, the Company recognized $296,000 and $1,221,000 in compensation expense related to these awards. At March 31, 2013, the Company accrued compensation expense of $2,884,000, of which $2,489,000 and $395,000 was included in accrued employee compensation and benefits and long-term incentive compensation and other, respectively, in the accompanying consolidated condensed balance sheets. At December 31, 2012, the Company accrued compensation expense of $2,607,000, of which $1,819,000 and $788,000 was included in accrued employee compensation and benefits and long-term incentive compensation and other, respectively, in the accompanying consolidated condensed balance sheets.

The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details.

Reference 1: http://www.xbrl.org/2003/role/presentationRef
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Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Staff Accounting Bulletin (SAB)
-Number Topic 14

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 123R
-Paragraph 64, 65, A240
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Statement of Position (SOP)
-Number 93-6
-Paragraph 53
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Fair Value of Financial Instruments

Fair Value of Financial Instruments

3 Months Ended

Mar. 31, 2013

15. Fair Value of Financial Instruments

Certain of the Company’s financial assets and liabilities are measured at fair value on a recurring and nonrecurring basis. Fair value is defined as the price that would be received to sell an asset or the price paid to transfer a liability (the exit price) in the principle and most advantageous market for the asset or liability in an orderly transaction between market participants. Assets and liabilities carried at fair value are classified using the following three-tier hierarchy:

Level 1: Quoted market prices in active markets for identical assets or liabilities;

Level 2: Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which significant inputs and significant value drivers are observable in active markets; and

Level 3: Fair value measurements derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

The following table summarizes the valuation of the Company’s foreign currency exchange contracts (see Note 16) that are measured at fair value on a recurring basis by the above pricing levels at March 31, 2013 (in thousands):


	Fair Value	Level 1	Level 2	Level 3

Foreign currency derivative instruments—asset position	$ 6,234	$ —	$ 6,234	$ —
Foreign currency derivative instruments—liability position	(407 )	—	(407 )	—

	$ 5,827	$ —	$ 5,827	$ —

The fair value of the Company’s foreign currency exchange contracts is based on observable inputs that are corroborated by market data. Foreign currency derivatives on the balance sheet are recorded at fair value with changes in fair value recorded in the statements of operations.

Nonrecurring Fair Value Measurements

The Company measures certain assets at fair value on a nonrecurring basis at least annually or when certain indicators are present. These assets include long-lived assets, goodwill and non-amortizing intangible assets that are written down to fair value when they are determined to be impaired. During the three months ended March 31, 2013 and 2012, the Company did not have any significant assets or liabilities that were measured at fair value on a nonrecurring basis in periods subsequent to initial recognition.

Disclosures about the Fair Value of Financial Instruments

The carrying values of cash and cash equivalents, trade accounts receivable and trade accounts payable and accrued expenses at March 31, 2013 and December 31, 2012 are reasonable estimates of fair value due to the short-term nature of these balances. The table below illustrates information about fair value relating to the Company’s financial assets and liabilities that are recognized on the accompanying consolidated condensed balance sheets as of March 31, 2013 and December 31, 2012, as well as the fair value of contingent contracts that represent financial instruments (in thousands).


	March 31, 2013		December 31, 2012

	Carrying Value	Fair Value	Carrying Value	Fair Value

Convertible notes(1)	$ 107,302	$ 122,063	$ 107,133	$ 118,406
Standby letters of credit(2)	2,709	2,709	3,265	3,265

(1) The carrying value of the convertible notes at March 31, 2013 and December 31, 2012, is net of the unamortized discount of $5,198,000 and $5,367,000 respectively (see Note 3). The fair value of the convertible notes was determined based on secondary quoted market prices, and as such is classified as Level 2 in the fair value hierarchy.

(2) Amounts outstanding under standby letters of credit represent the Company’s contingent obligation to perform in accordance with the underlying contracts to which they pertain. The fair value of standby letters is classified as Level 1 as it approximates the carrying value due to the short term nature of these obligations.

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

Reference 1: http://www.xbrl.org/2003/role/presentationRef
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-Name Accounting Standards Codification
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Reference 7: http://www.xbrl.org/2003/role/presentationRef
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-Name Statement of Financial Accounting Standard (FAS)
-Number 107
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-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 133
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-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 159
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-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 10: http://www.xbrl.org/2003/role/presentationRef
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-Name Statement of Financial Accounting Standard (FAS)
-Number 107
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-Subparagraph a-d
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 11: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 107
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-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 12: http://www.xbrl.org/2003/role/presentationRef
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-Name Statement of Financial Accounting Standard (FAS)
-Number 157
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-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 13: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 107
-Paragraph 3, 10, 14, 15
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Derivatives and Hedging

3 Months Ended

Mar. 31, 2013

Derivatives and Hedging

16. Derivatives and Hedging

Foreign Currency Exchange Contracts

The Company accounts for its foreign currency exchange contracts in accordance with ASC Topic 815, “Derivatives and Hedging” (“ASC 815”). ASC 815 requires the recognition of all derivatives as either assets or liabilities on the balance sheet, the measurement of those instruments at fair value and the recognition of changes in the fair value of derivatives in earnings in the period of change, unless the derivative qualifies as an effective hedge that offsets certain exposures.

In the normal course of business, the Company is exposed to gains and losses resulting from fluctuations in foreign currency exchange rates relating to transactions of its international subsidiaries, including certain balance sheet exposures (payables and receivables denominated in foreign currencies). In addition, the Company is exposed to gains and losses resulting from the translation of the operating results of the Company’s international subsidiaries into U.S. dollars for financial reporting purposes. As part of its strategy to manage the level of exposure to the risk of fluctuations in foreign currency exchange rates, the Company uses derivative financial instruments in the form of foreign currency forward contracts and put and call option contracts (“foreign currency exchange contracts”) to hedge transactions that are denominated primarily in Japanese Yen, British Pounds, Euros, Canadian Dollars, Australian Dollars and Korean Won. Foreign currency exchange contracts are used only to meet the Company’s objectives of minimizing variability in the Company’s operating results arising from foreign exchange rate movements. The Company does not enter into foreign currency exchange contracts for speculative purposes. Foreign currency exchange contracts usually mature within twelve months from their inception.

The Company did not designate any foreign currency exchange contracts as derivatives that qualify for hedge accounting under ASC 815. At March 31, 2013 and December 31, 2012, the notional amounts of the Company’s foreign currency exchange contracts used to hedge the exposures discussed above were approximately $170,299,000 and $137,125,000, respectively. The Company estimates the fair values of foreign currency exchange contracts based on pricing models using current market rates, and records all derivatives on the balance sheet at fair value with changes in fair value recorded in the statements of operations.

The following table summarizes the fair value of derivative instruments by contract type as well as the location of the asset and/or liability on the consolidated condensed balance sheets at March 31, 2013 and December 31, 2012 (in thousands):


	Asset Derivatives

	March 31, 2013		December 31, 2012

Derivatives not designated as hedging instruments	Balance Sheet Location	Fair Value	Balance Sheet Location	Fair Value

Foreign currency exchange contracts	Other current assets	$ 6,234	Other current assets	$ 5,011


	Liability Derivatives

	March 31, 2013			December 31, 2012

Derivatives not designated as hedging instruments	Balance Sheet Location	Fair Value	Balance Sheet Location		Fair Value

Foreign currency exchange contracts	Accounts payable and accrued expenses	$ 407	Accounts payable and accrued expenses		$ 1,046

The following table summarizes the location of gains in the consolidated condensed statements of operations that were recognized during the three months ended March 31, 2013 and 2012, respectively, in addition to the derivative contract type (in thousands):


		Amount of Net Gain Recognized in Income on Derivative Instruments

Derivatives not designated as hedging instruments	Location of net gain recognized in income on derivative instruments	Three months ended March 31,

		2013	2012

Foreign currency exchange contracts	Other income, net	$ 7,848	$ 5,685

The net realized and unrealized net gains and losses noted in the table above for the three months ended March 31, 2013 and 2012 were used by the Company to offset actual foreign currency transactional net gains and losses associated with the translation of foreign currencies in operating results.

The entire disclosure for the entity's entire derivative instruments and hedging activities. Describes an entity's risk management strategies, derivatives in hedging activities and non-hedging derivative instruments, the assets, obligations, liabilities, revenues and expenses arising therefrom, and the amounts of and methodologies and assumptions used in determining the amounts of such items.

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-Publisher FASB
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Reference 22: http://www.xbrl.org/2003/role/presentationRef
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-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Segment Information

3 Months Ended

Mar. 31, 2013

Segment Information

17. Segment Information

The Company has two operating segments that are organized on the basis of products and include golf clubs and golf balls. The golf clubs segment consists primarily of Callaway Golf hybrids, irons, wedges and putters as well as Odyssey putters, pre-owned clubs, rangefinders, other golf-related accessories and royalties from licensing of the Company’s trademarks and service marks. The golf balls segment consists primarily of Callaway Golf balls that are designed, manufactured and sold by the Company. During the first quarter of 2012, the Company completed the sale of certain assets related to the Top-Flite brand as well as the sale of the Ben Hogan brand. In addition, during the third quarter of 2012, the Company announced the transition of its golf apparel, footwear and integrated device business to a third party based model. As such, the net sales and income before income taxes for the three months ended March 31, 2012 include sales of Top-Flite and Ben Hogan golf products as well as sales of golf apparel, footwear and uPro GPS on-course measurement devices. There are no significant intersegment transactions.

The table below contains information utilized by management to evaluate its operating segments for the interim periods presented (in thousands):


	Three Months Ended March 31,

	2013	2012

Net sales
Golf Clubs	$ 244,771	$ 242,552
Golf Balls	42,985	42,546

	$ 287,756	$ 285,098

Income before income taxes
Golf Clubs(1)	$ 43,989	$ 32,640
Golf Balls(1)	6,184	1,577
Reconciling items(2)	(6,044)	(2,707 )

	$ 44,129	$ 31,510

Additions to long-lived assets
Golf Clubs	$ 3,606	$ 7,506
Golf Balls	11	184

	$ 3,617	$ 7,690

(1) In connection with the Cost Reduction Initiatives (see Note 2), during the three months ended March 31, 2013, the Company’s golf clubs and golf balls segments absorbed $2,699,000 and $116,000, respectively, in pre-tax charges related to these initiatives.

(2) Reconciling items represent corporate general and administrative expenses and other income (expense) not included by management in determining segment profitability. For the first quarter of 2013, the reconciling items include pre-tax charges of $694,000 related to the Cost Reduction Initiatives, and for the first quarter of 2012, the reconciling items include a pre-tax gain of $6,616,000 in connection with the sale of Top-Flite and Ben Hogan brands.

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 34
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8981-108599

Reference 2: http://www.xbrl.org/2003/role/presentationRef
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Reference 7: http://www.xbrl.org/2003/role/presentationRef
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Reference 8: http://www.xbrl.org/2003/role/presentationRef
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Reference 10: http://www.xbrl.org/2003/role/presentationRef
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Reference 14: http://www.xbrl.org/2003/role/presentationRef
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Reference 15: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 131
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Recent Accounting Standards

Basis of Presentation (Policies)

3 Months Ended

Mar. 31, 2013

Cost Reduction Initiatives (Tables)

3 Months Ended

Mar. 31, 2013

Activity and Liability Balances Recorded as Part of Initiatives as well as Current Estimated Future Charges Relating Initiatives


	Cost Reduction Initiatives

	Workforce Reductions	Transition Costs	Asset Write-offs	Total

Restructuring payable balance, December 31, 2012	$ 4,531	$ 591	$ —	$ 5,122
Charges to cost and expense	1,091	2,418	—	3,509
Non-cash items	—	(1,699 )	---	(1,699 )
Cash payments	(3,547 )	(717 )	—	(4,264 )

Restructuring payable balance, March 31, 2013	$ 2,075	$ 593	$ —	$ 2,668

Total future estimated charges as of March 31, 2013	$ 1,000	$ 6,400	$ —	$ 7,400

Earnings per Common Share (Tables)

3 Months Ended

Mar. 31, 2013

Computation of Basic and Diluted Earnings Per Share

The following table summarizes the computation of basic and diluted earnings per share:


	Three Months Ended March 31,

	2013	2012

Earnings per common share—basic
Net income	$ 41,660	$ 31,802
Less: Preferred stock dividends	(783)	(2,625)

Net income allocable to common shareholders	$ 40,877	$ 29,177

Weighted-average common shares outstanding—basic	71,060	64,983

Basic earnings per common share	$ 0.58	$ 0.45

Earnings per common share—diluted
Net income	$ 41,660	$ 31,802
Interest on convertible debt, net of tax	1,209	—

Net income including assumed conversions	$ 42,869	$ 31,802

Weighted-average common shares outstanding—basic	71,060	64,983
Convertible notes weighted-average shares outstanding	15,000	—
Preferred stock weighted-average shares outstanding	5,924	19,858
Options, restricted stock and other dilutive securities	213	89

Weighted-average common shares outstanding—diluted	92,197	84,930

Dilutive earnings per common share	$ 0.47	$ 0.37

Inventories (Tables)

3 Months Ended

Mar. 31, 2013

Inventories

Inventories are summarized below (in thousands):


	March 31, 2013	December 31, 2012

Inventories:
Raw materials	$ 50,716	$ 43,469
Work-in-process	783	619
Finished goods	150,452	167,646

	$ 201,951	$ 211,734

Goodwill and Intangible Assets (Tables)

3 Months Ended

Mar. 31, 2013

Intangible Assets by Major Asset Class

The following sets forth the intangible assets by major asset class (dollars in thousands):


	Useful Life (Years)	March 31, 2013			December 31, 2012

		Gross	Accumulated Amortization	Net Book Value	Gross	Accumulated Amortization	Net Book Value

Non-Amortizing:
Trade name, trademark and trade dress and other	NA	$ 88,590	$ —	$ 88,590	$ 88,590	$ —	$ 88,590
Amortizing:
Patents	2-16	31,581	31,241	340	31,581	31,022	559
Developed technology and other	1-9	7,961	7,927	34	7,961	7,921	40

Total intangible assets		$ 128,132	$ 39,168	$ 88,964	$ 128,132	$ 38,943	$ 89,189

Amortization Expense Related to Intangible Assets

Amortization expense related to intangible assets at March 31, 2013 in each of the next five fiscal years and beyond is expected to be incurred as follows (in thousands):


Remainder of 2013	64
2014	68
2015	51
2016	51
2017	51
2018	51
Thereafter	38

	$ 374

Product Warranty (Tables)

3 Months Ended

Mar. 31, 2013

Reconciliation of Reserve for Warranty Expense

The following table provides a reconciliation of the activity related to the Company’s reserve for warranty expense (in thousands):


	Three Months Ended March 31,

	2013	2012

Beginning balance	$ 7,539	$ 8,140
Provision	1,835	1,854
Claims paid/costs incurred	(1,487)	(1,732 )

Ending balance	$ 7,887	$ 8,262

Income Taxes (Tables)

3 Months Ended

Mar. 31, 2013

Major Jurisdictions no Longer Subject to Income Tax Examinations by Tax Authorities


Tax Jurisdiction		Years No Longer Subject to Audit

U.S. federal		2008 and prior
California (United States)		2007 and prior
Canada		2004 and prior
Japan		2006 and prior
South Korea		2008 and prior
United Kingdom		2008 and prior

Tabular disclosure of income tax examinations that an enterprise is currently subject to or that have been completed in the current period typically including a description of the examination, the jurisdiction conducting the examination, the tax year(s) under examination, the likelihood of an unfavorable settlement, the range of possible losses, the liability recorded, the increase or decrease in the liability from the prior period, and any penalties and interest that have been recorded.

Future Purchase Commitments

Commitments and Contingencies (Tables)

3 Months Ended

Mar. 31, 2013

Future purchase commitments as of March 31, 2013, are as follows (in thousands):


Remainder of 2013	$ 50,714
2014	21,308
2015	2,949
2016	970
2017	306
Thereafter	—

	$ 76,247

Share-Based Employee Compensation (Tables)

3 Months Ended

Mar. 31, 2013

Share-Based Compensation Including Expense for Phantom Stock Units and Cash Settled Stock Appreciation Rights Granted to Employees


	Three Months Ended March 31,

	2013	2012

Cost of sales	$ 80	$ 80
Operating expenses	1,239	2,785

Total cost of employee share-based compensation included in income, before income tax	$ 1,319	$ 2,865

Weighted Average Black-Scholes Fair Value Assumptions used in Valuation of Stock Options Granted

The table below summarizes the weighted average Black-Scholes fair value assumptions used in the valuation of stock options granted during the three months ended March 31, 2013 and 2012.


	Three Months Ended March 31,

	2013	2012

Dividend yield	0.6 %	1.2 %
Expected volatility	48.8 %	50.1 %
Risk free interest rate	0.6 %	0.8 %
Expected life	4.3 years	4.9 years

Tabular disclosure of the allocation of equity-based compensation costs to a given line item on the balance sheet and income statement for the period. This may include the reporting line for the costs and the amount capitalized and expensed.

Valuation of Foreign Currency Exchange Contracts by Pricing Levels

Fair Value of Financial Instruments (Tables)

3 Months Ended

Mar. 31, 2013


	Fair Value	Level 1	Level 2	Level 3

Foreign currency derivative instruments—asset position	$ 6,234	$ —	$ 6,234	$ —
Foreign currency derivative instruments—liability position	(407 )	—	(407 )	—

	$ 5,827	$ —	$ 5,827	$ —

Fair Value Relating to Financial Assets and Liabilities


	March 31, 2013		December 31, 2012

	Carrying Value	Fair Value	Carrying Value	Fair Value

Convertible notes(1)	$ 107,302	$ 122,063	$ 107,133	$ 118,406
Standby letters of credit(2)	2,709	2,709	3,265	3,265

Derivatives and Hedging (Tables)

3 Months Ended

Mar. 31, 2013

Summary of Fair Value of Derivative Instruments by Contract Type and Location of Asset and/or Liability on Consolidated Condensed Balance Sheets


	Asset Derivatives

	March 31, 2013		December 31, 2012

Derivatives not designated as hedging instruments	Balance Sheet Location	Fair Value	Balance Sheet Location	Fair Value

Foreign currency exchange contracts	Other current assets	$ 6,234	Other current assets	$ 5,011


	Liability Derivatives

	March 31, 2013			December 31, 2012

Derivatives not designated as hedging instruments	Balance Sheet Location	Fair Value	Balance Sheet Location		Fair Value

Foreign currency exchange contracts	Accounts payable and accrued expenses	$ 407	Accounts payable and accrued expenses		$ 1,046

Location of Gains in Consolidated Condensed Statements of Operations that were Recognized and Derivative Contract Type


		Amount of Net Gain Recognized in Income on Derivative Instruments

Derivatives not designated as hedging instruments	Location of net gain recognized in income on derivative instruments	Three months ended March 31,

		2013	2012

Foreign currency exchange contracts	Other income, net	$ 7,848	$ 5,685

Tabular disclosure of the location and amount of gains and losses reported in the statement of financial performance, or when applicable, the statement of financial position. For example, (a) gains and losses recognized in the income statement on derivative instruments designated and qualifying as hedging instruments in fair value hedges and related hedged items designated and qualifying in fair value hedges and (b) gains and losses initially recognized in other comprehensive income on derivative instruments designated and qualifying as cash flow hedges.

Operating Segments (Tables)

3 Months Ended

Mar. 31, 2013

Operating Segments

The table below contains information utilized by management to evaluate its operating segments for the interim periods presented (in thousands):


	Three Months Ended March 31,

	2013	2012

Net sales
Golf Clubs	$ 244,771	$ 242,552
Golf Balls	42,985	42,546

	$ 287,756	$ 285,098

Income before income taxes
Golf Clubs(1)	$ 43,989	$ 32,640
Golf Balls(1)	6,184	1,577
Reconciling items(2)	(6,044)	(2,707 )

	$ 44,129	$ 31,510

Additions to long-lived assets
Golf Clubs	$ 3,606	$ 7,506
Golf Balls	11	184

	$ 3,617	$ 7,690

Tabular disclosure of the profit or loss and total assets for each reportable segment. An entity discloses certain information on each reportable segment if the amounts (a) are included in the measure of segment profit or loss reviewed by the chief operating decision maker or (b) are otherwise regularly provided to the chief operating decision maker, even if not included in that measure of segment profit or loss.

Activity and Liability Balances Recorded as Part of Initiatives as well as Current Estimated Future Charges Relating Initiatives (Detail) - USD ($)	1 Months Ended	3 Months Ended	9 Months Ended
	Jul. 31, 2012	Mar. 31, 2013	Mar. 31, 2013
Restructuring Cost And Reserve [Line Items]
Total future estimated charges, at end of period	$ 65,000,000	$ 7,400,000
Cost Reduction Initiative
Restructuring Cost And Reserve [Line Items]
Restructuring payable, Beginning balance		5,122,000
Charges to cost and expense		3,509,000	$ 57,570,000
Non-cash items		(1,699,000)
Cash payments		(4,264,000)
Restructuring payable, Ending balance		2,668,000	2,668,000
Total future estimated charges, at end of period		7,400,000
Cost Reduction Initiative \| Workforce Reductions
Restructuring Cost And Reserve [Line Items]
Restructuring payable, Beginning balance		4,531,000
Charges to cost and expense		1,091,000
Cash payments		(3,547,000)
Restructuring payable, Ending balance		2,075,000	2,075,000
Total future estimated charges, at end of period		1,000,000
Cost Reduction Initiative \| Transition Costs
Restructuring Cost And Reserve [Line Items]
Restructuring payable, Beginning balance		591,000
Charges to cost and expense		2,418,000
Non-cash items		(1,699,000)
Cash payments		(717,000)
Restructuring payable, Ending balance		593,000	593,000
Total future estimated charges, at end of period		6,400,000
Cost Reduction Initiative \| Asset Write-offs
Restructuring Cost And Reserve [Line Items]
Restructuring payable, Beginning balance
Charges to cost and expense
Non-cash items
Cash payments
Restructuring payable, Ending balance
Total future estimated charges, at end of period

Cost Reduction Initiatives - Additional Information (Detail) - USD ($)	1 Months Ended	3 Months Ended	9 Months Ended
	Jul. 31, 2012	Mar. 31, 2013	Mar. 31, 2013
Restructuring Cost And Reserve [Line Items]
Expected annualized pre-tax savings from restructuring plan		$ 60,000,000
Total future estimated charges, at end of period	$ 65,000,000	7,400,000
Cost of Sales
Restructuring Cost And Reserve [Line Items]
Pre-tax restructuring charges to cost and expense		2,282,000
Operating Expense
Restructuring Cost And Reserve [Line Items]
Pre-tax restructuring charges to cost and expense		1,227,000
Cost Reduction Initiatives
Restructuring Cost And Reserve [Line Items]
Pre-tax restructuring charges to cost and expense		3,509,000	$ 57,570,000
Total future estimated charges, at end of period		$ 7,400,000

Financing Arrangements (Asset Based Revolving Credit Facility) - Additional Information (Detail) - USD ($)

3 Months Ended

Mar. 31, 2013

Dec. 31, 2012

Mar. 31, 2012

Dec. 31, 2011

Asset-based credit facility, maximum borrowing capacity

$ 230,000,000

Amount outstanding under letters of credit

^[1]

2,709,000

$ 3,265,000

Cash and cash equivalents

$ 28,072,000

52,003,000

$ 51,669,000

$ 43,023,000

Asset-based credit facility, maturity date

Jun. 30, 2016

Maximum amount of consolidated funded indebtedness

$ 51,516,000

Average outstanding borrowing

38,975,000

Average Available Liquidity

91,072,000

Asset-backed credit facility

$ 79,489,000

Asset-based credit facility, interest rate

4.75%

Asset-based credit facility, origination fees

$ 4,273,000

Unamortized origination fees

2,952,000

3,171,000

Asset-based credit facility, origination fees included in other current assets

908,000

906,000

Asset-based credit facility, origination fees included in other long-term assets

$ 2,044,000

$ 2,265,000

Minimum

Asset-based credit facility, monthly fees

0.375%

Maximum

Asset-based credit facility, monthly fees

0.50%

Scenario 1

Applicable margin rate reduction

All applicable margins may be permanently reduced by 0.25 percent if EBITDA meets or exceeds $25,000,000 over any trailing twelve month period.

Scenario 1 | Minimum

Amount of EBITDA to reduce applicable margin

$ 25,000,000

Scenario 2

Applicable margin rate reduction

Reduced by an additional 0.25 percent if EBITDA meets or exceeds $50,000,000 over any trailing twelve month period.

Scenario 2 | Minimum

Amount of EBITDA to reduce applicable margin

$ 50,000,000

United States

Asset-based credit facility, maximum borrowing capacity

158,333,000

Asset-based credit facility, available for letter of credit

20,000,000

Canada

Asset-based credit facility, maximum borrowing capacity

31,667,000

Asset-based credit facility, available for letter of credit

5,000,000

United Kingdom

Asset-based credit facility, maximum borrowing capacity

40,000,000

Asset-based credit facility, available for letter of credit

$ 2,000,000

[1]

Amounts outstanding under standby letters of credit represent the Company’s contingent obligation to perform in accordance with the underlying contracts to which they pertain. The fair value of standby letters is classified as Level 1 as it approximates the carrying value due to the short term nature of these obligations.

Financing Arrangements (Convertible Senior Notes) - Additional Information (Detail)

1 Months Ended

3 Months Ended

Aug. 29, 2012

USD ($)

Mar. 31, 2013

USD ($)

$ / shares

Dec. 31, 2012

USD ($)

Convertible notes, net (Note 3)

^[1]

$ 107,302,000

$ 107,133,000

Convertible senior notes, unamortized discount

$ 5,198,000

5,367,000

Convertible senior notes, remaining amortization period

6 years 4 months 24 days

Convertible senior notes, total interest and amortization expense recognized

$ 1,209,000

Convertible senior notes convertible latest date

Aug. 15, 2019

Initial conversion rate, number of common stock issuable | shares

133.3333

Debt conversion principal amount

$ 1,000

Conversion price per share | $ / shares

$ 7.50

Debt Conversion, maximum number of common stock shares | shares

15,000,000

Repurchase price as percentage of principal amount of senior notes

100.00%

Price to redeem notes as percentage of principal

100.00%

Convertible senior notes

$ 112,500,000

Convertible senior notes interest rate

3.75%

Convertible senior notes due date

Aug. 15, 2019

Convertible senior notes, interest payment frequency

Payable semiannually in arrears on February 15 and August 15 of each year. The first interest payment was made on February 15, 2013.

Convertible senior notes, transactional fees

$ 3,533,000

Notes redemption earliest date

Aug. 15, 2015

Unamortized Debt Issuance Costs

Unamortized, transaction Fees

$ 3,239,000

3,365,000

Unamortized Debt Issuance Costs | Other Current Assets

Unamortized, transaction Fees

505,000

Unamortized Debt Issuance Costs | Other Long Term Assets

Unamortized, transaction Fees

$ 2,734,000

$ 2,860,000

[1]

Preferred Stock Offering - Additional Information (Detail) - USD ($)	3 Months Ended
	Mar. 31, 2013	Dec. 31, 2012
Class Of Stock [Line Items]
Preferred stock, liquidation preference, per share	$ 100
Preferred stock, cumulative dividend rate (in percent)	7.50%
Preferred stock, cumulative dividend rate per share	$ 7.50
Preferred stock, liquidation preference, value	$ 41,894,000
Redemption of preferred, term	The Company, at its option, may redeem the preferred stock subject to available liquidity and compliance with any applicable legal requirements and contractual obligations, in whole or in part, at a price equal to 100% of the liquidation preference, plus all accrued and unpaid dividends.
Percentage of per share price of liquidation preference for redemption	100.00%
Preferred stock, par value	$ 0.01	$ 0.01
Conversion price per share	$ 7.05
Preferred stock, shares outstanding	417,639	417,639
Conversion rate of the preferred stock to common stock	14.1844
Common stock issuable upon conversion, shares	5,924,000

Computation of Basic and Diluted Earnings Per Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Earnings per common share—basic
Net income	$ 41,660	$ 31,802
Less: Preferred stock dividends	(783)	(2,625)
Net income allocable to common shareholders	$ 40,877	$ 29,177
Weighted-average common shares outstanding—basic	71,060	64,983
Basic earnings per common share	$ 0.58	$ 0.45
Earnings per common share—diluted
Net income	$ 41,660	$ 31,802
Interest on convertible debt, net of tax	1,209
Net income including assumed conversions	$ 42,869	$ 31,802
Weighted-average common shares outstanding—basic	71,060	64,983
Convertible notes weighted-average shares outstanding	15,000
Preferred stock weighted-average shares outstanding	5,924	19,858
Options, restricted stock and other dilutive securities	213	89
Weighted-average common shares outstanding—diluted	92,197	84,930
Dilutive earnings per common share	$ 0.47	$ 0.37

Earnings per Common Share - Additional Information (Detail) - shares	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Earnings Per Share Disclosure [Line Items]
Antidilutive securities excluded from computation of earnings per share	5,979,000	9,463,000

Securities (including those issuable pursuant to contingent stock agreements) that could potentially dilute basic earnings per share (EPS) or earnings per unit (EPU) in the future that were not included in the computation of diluted EPS or EPU because to do so would increase EPS or EPU amounts or decrease loss per share or unit amounts for the period presented.

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Glossary Antidilution
-URI http://asc.fasb.org/extlink&oid=6505113

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Glossary Diluted Earnings Per Share
-URI http://asc.fasb.org/extlink&oid=6510752

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Glossary Contingent Stock Agreement
-URI http://asc.fasb.org/extlink&oid=6508534

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 260
-SubTopic 10
-Section 50
-Paragraph 1
-Subparagraph (c)
-URI http://asc.fasb.org/extlink&oid=6371337&loc=d3e3550-109257

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 128
-Paragraph 40
-Subparagraph c
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 128
-Paragraph 13, 14
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Emerging Issues Task Force (EITF)
-Number 07-4
-Paragraph 4
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 128
-Paragraph 171
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Sale of Buildings - Additional Information (Detail) - USD ($)	1 Months Ended	3 Months Ended
	Feb. 28, 2013	Mar. 31, 2013	Dec. 31, 2012
Sale Leaseback Transaction [Line Items]
Proceeds from sale of manufacturing facility	$ 3,496,000
Loss on sale of building net of commissions and fees		$ 31,000
Accrued in accounts payable and accrued expenses		$ 1,243,000	$ 1,243,000

The gross proceeds received from the asset(s) sold in connection with the transaction involving the sale of property to another party and the lease of the property back to the seller less the costs incurred in connection with the transaction, such as closing and deferred financing costs.

Inventories (Detail) - USD ($) $ in Thousands	Mar. 31, 2013	Dec. 31, 2012
Inventories:
Raw materials	$ 50,716	$ 43,469
Work-in-process	783	619
Finished goods	150,452	167,646
Inventories	$ 201,951	$ 211,734

Intangible Assets by Major Asset Class (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2013	Dec. 31, 2012
Intangible Assets By Major Class [Line Items]
Gross	$ 128,132	$ 128,132
Accumulated Amortization	39,168	38,943
Intangible assets, net	88,964	89,189
Trade name, trademark and trade dress and other
Intangible Assets By Major Class [Line Items]
Gross	88,590	88,590
Intangible assets, net	88,590	88,590
Patents
Intangible Assets By Major Class [Line Items]
Gross	31,581	31,581
Accumulated Amortization	31,241	31,022
Intangible assets, net	$ 340	559
Patents \| Minimum
Intangible Assets By Major Class [Line Items]
Useful Life (years)	2 years
Patents \| Maximum
Intangible Assets By Major Class [Line Items]
Useful Life (years)	16 years
Developed technology and other
Intangible Assets By Major Class [Line Items]
Gross	$ 7,961	7,961
Accumulated Amortization	7,927	7,921
Intangible assets, net	$ 34	$ 40
Developed technology and other \| Minimum
Intangible Assets By Major Class [Line Items]
Useful Life (years)	1 year
Developed technology and other \| Maximum
Intangible Assets By Major Class [Line Items]
Useful Life (years)	9 years

Amortization Expense Related to Intangible Assets (Detail) $ in Thousands	Mar. 31, 2013 USD ($)
Expected Amortization Expense [Line Items]
Remainder of 2013	$ 64
2014	68
2015	51
2016	51
2017	51
2018	51
Thereafter	38
Finite Lived Intangible Assets, Net, Total	$ 374

Goodwill and Intangible Assets - Additional Information (Detail) - USD ($)	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012	Dec. 31, 2012
Goodwill And Intangible Assets Disclosure [Line Items]
Aggregate amortization expense on intangible assets	$ 225,000	$ 906,000
Goodwill	28,412,000		$ 29,034,000
Decrease in goodwill offset amount due to foreign currency fluctuations	622,000
Gross goodwill before impairments	$ 30,161,000		$ 30,783,000

Carrying amount as of the balance sheet date, which is the cumulative amount paid and (if applicable) the fair value of any noncontrolling interest in the acquiree, adjusted for any amortization recognized prior to the adoption of any changes in generally accepted accounting principles (as applicable) and for any impairment charges, in excess of the fair value of net assets acquired in one or more business combination transactions.

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 350
-SubTopic 20
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=14024403&loc=d3e13816-109267

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 350
-SubTopic 20
-Section 45
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6388280&loc=d3e13770-109266

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 142
-Paragraph 45
-Subparagraph e
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 142
-Paragraph 43
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 141R
-Paragraph 72
-Subparagraph d
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 142
-Paragraph 45
-Subparagraph e
-Clause 1
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 141R
-Paragraph 68
-Subparagraph l
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 141R
-Paragraph 34
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Investments - Additional Information (Detail)	Mar. 31, 2012 USD ($)
Schedule Of Cost Method Investments [Line Items]
Investment in TopGolf International, Inc.	$ 23,967,000
Maximum
Schedule Of Cost Method Investments [Line Items]
Percentage of ownership interest in TopGolf International, Inc.	20.00%

This item represents the aggregate carrying amount of all cost-method investments as reported on or included in the balance sheet. The original cost of the investments may differ from the aggregate carrying amount disclosed due to various adjustments such as: (i) dividends received in excess of earnings after the date of investment that are considered a return of investment and therefore recorded as reductions to cost of the investment, or (ii) a series of operating losses of an investee or other factors which may indicate that a decrease in value of the investment has occurred which is other than temporary and accordingly such decrease in value has been recognized.

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 210
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02.12)
-URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 325
-SubTopic 20
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6872867&loc=d3e40691-111596

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 325
-SubTopic 20
-Section 35
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=6383889&loc=d3e40346-111594

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Accounting Principles Board Opinion (APB)
-Number 18
-Paragraph 6
-Subparagraph a
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name FASB Staff Position (FSP)
-Number FAS115-1/124-1
-Paragraph 18
-Subparagraph a
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Emerging Issues Task Force (EITF)
-Number 03-1
-Paragraph 22
-Subparagraph a
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Non-Controlling Interest - Additional Information (Detail) - USD ($)	3 Months Ended	12 Months Ended
	Mar. 31, 2013	Dec. 31, 2012
Investments In And Advances To Affiliates [Line Items]
Net profits related to non-controlling interest	$ 381,000	$ 259,000
Amount loaned to Mauritius	3,200,000
Loan to Mauritius, outstanding	$ 1,788,000	$ 1,788,000

Amount of Net Income (Loss) attributable to noncontrolling interest.

Reconciliation of Reserve for Warranty Expense (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Product Liability Contingency [Line Items]
Beginning balance	$ 7,539	$ 8,140
Provision	1,835	1,854
Claims paid/costs incurred	(1,487)	(1,732)
Ending balance	$ 7,887	$ 8,262

Carrying value as of the balance sheet date of obligations incurred through that date and payable for estimated claims under standard and extended warranty protection rights granted to customers. For classified balance sheets, represents the current portion of the liabilities (due within one year or within the normal operating cycle if longer).

Income Taxes - Additional Information (Detail) - USD ($)	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012	Dec. 31, 2012
Income Taxes [Line Items]
Income tax provision (benefit)	$ 2,469,000	$ (292,000)
Liability for income taxes associated with uncertain tax positions	7,773,000
Tax benefits associated with potential transfer pricing adjustments	2,849,000
Tax benefits associated with state income taxes	2,205,000
Net amount of unrecognized tax benefit related to uncertain tax positions that would impact, if recognized, effective income tax rate	2,719,000
Interest and penalties related to income tax matters	263,000	$ 62,000
Income tax accrued for payment of interest and penalties	$ 1,508,000		$ 1,245,000

Major Jurisdictions no Longer Subject to Income Tax Examinations by Tax Authorities (Detail)	3 Months Ended
	Mar. 31, 2013
U.S. federal
Income Tax Examination [Line Items]
Years No Longer Subject to Audit	2008 and prior
California (United States)
Income Tax Examination [Line Items]
Years No Longer Subject to Audit	2007 and prior
Canada
Income Tax Examination [Line Items]
Years No Longer Subject to Audit	2004 and prior
Japan
Income Tax Examination [Line Items]
Years No Longer Subject to Audit	2006 and prior
South Korea
Income Tax Examination [Line Items]
Years No Longer Subject to Audit	2008 and prior
United Kingdom
Income Tax Examination [Line Items]
Years No Longer Subject to Audit	2008 and prior

Commitments and Contingencies - Additional Information (Detail)	3 Months Ended
	Mar. 31, 2013 USD ($)
Long Term Purchase Commitment [Line Items]
Unconditional purchase obligations over next four years	$ 76,247,000
Minimum
Long Term Purchase Commitment [Line Items]
Unconditional purchase obligations, term	1 year
Maximum
Long Term Purchase Commitment [Line Items]
Unconditional purchase obligations, term	4 years

Future Purchase Commitments (Detail)	Mar. 31, 2013 USD ($)
Long Term Purchase Commitment [Line Items]
Remainder of 2013	$ 50,714,000
2014	21,308,000
2015	2,949,000
2016	970,000
2017	306,000
Thereafter
Unconditional purchase obligations over next four years	$ 76,247,000

Share-Based Compensation Including Expense for Phantom Stock Units and Cash Settled Stock Appreciation Rights Granted to Employees (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Cost of employee share-based compensation included in income, before income tax	$ 1,319	$ 2,865
Cost of Sales
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Cost of employee share-based compensation included in income, before income tax	80	80
Operating Expense
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Cost of employee share-based compensation included in income, before income tax	$ 1,239	$ 2,785

Represents the expense recognized during the period arising from equity-based compensation arrangements (for example, shares of stock, unit, stock options or other equity instruments) with employees, directors and certain consultants qualifying for treatment as employees.

Carrying Amounts And Fair Values Of Financial Instruments Or Liabilities [Line Items]

Weighted Average Black-Scholes Fair Value Assumptions used in Valuation of Stock Options Granted (Detail)	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Share Based Compensation Arrangement By Share Based Payment Award Fair Value Assumptions Method Used [Line Items]
Dividend yield	0.60%	1.20%
Expected volatility	48.80%	50.10%
Risk free interest rate	0.60%	0.80%
Expected life	4 years 3 months 18 days	4 years 10 months 24 days

Share Based Employee Compensation - Additional Information (Detail) - USD ($)	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012	Dec. 31, 2012
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Cost of employee share-based compensation included in income, before income tax	$ 1,319,000	$ 2,865,000
Accrued employee compensation and benefits	23,269,000		$ 20,649,000
Long-term incentive compensation and other	$ 5,769,000		7,131,000
Employee Stock Option
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock options, shares granted	1,784,000
Stock options granted during period, weighted average grant-date fair value	$ 2.46
Compensation expense related to stock options	$ 379,000	$ 435,000
Restricted Stock Units (RSUs)
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock units granted	368,000	300,000
Stock units, weighted average grant-date fair value	$ 6.52	$ 6.48
Total unrecognized compensation expense related to non-vested shares granted	$ 4,331,000
Compensation expense related to restricted stocks	$ 379,000	$ 352,000
Phantom Stock Units
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock units granted		284,000
Vesting period	3 years
Stock units granted, value		$ 1,900,000
Cost of employee share-based compensation included in income, before income tax	$ 265,000	$ 857,000
Accrued compensation expense	1,589,000		1,324,000
Accrued employee compensation and benefits	924,000		0
Long-term incentive compensation and other	$ 665,000		1,324,000
Stock Appreciation Rights (SARs)
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock units granted		3,100,000
Vesting period	3 years
Cost of employee share-based compensation included in income, before income tax	$ 296,000	$ 1,221,000
Accrued compensation expense	2,884,000		2,607,000
Accrued employee compensation and benefits	2,489,000		1,819,000
Long-term incentive compensation and other	$ 395,000		$ 788,000

Foreign Currency Exchange Contracts Measured at Fair Value on Recurring Basis (Detail) - Fair Value, Measurements, Recurring - Foreign Exchange Contract $ in Thousands	Mar. 31, 2013 USD ($)
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]
Foreign currency derivative instruments—asset position	$ 6,234
Foreign currency derivative instruments—liability position	(407)
Foreign Currency Derivatives at Fair Value, Net, Total	5,827
Observable market based inputs (Level 2)
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]
Foreign currency derivative instruments—asset position	6,234
Foreign currency derivative instruments—liability position	(407)
Foreign Currency Derivatives at Fair Value, Net, Total	$ 5,827

Fair Value Relating to Financial Assets and Liabilities (Detail) - USD ($)

Mar. 31, 2013

Dec. 31, 2012

Convertible notes, carrying Value

^[1]

$ 107,302,000

$ 107,133,000

Convertible notes, fair Value

^[1]

122,063,000

118,406,000

Standby letters of credit, carrying value

^[2]

2,709,000

3,265,000

Standby letters of credit, fair value

^[2]

$ 2,709,000

$ 3,265,000

[1]	The carrying value of the convertible notes at March 31, 2013 and December 31, 2012, is net of the unamortized discount of $5,198,000 and $5,367,000 respectively (see Note 3). The fair value of the convertible notes was determined based on secondary quoted market prices, and as such is classified as Level 2 in the fair value hierarchy.
[2]	Amounts outstanding under standby letters of credit represent the Company’s contingent obligation to perform in accordance with the underlying contracts to which they pertain. The fair value of standby letters is classified as Level 1 as it approximates the carrying value due to the short term nature of these obligations.

Fair Value Relating to Financial Assets and Liabilities (Parenthetical) (Detail) - USD ($)	Mar. 31, 2013	Dec. 31, 2012
Carrying Amounts And Fair Values Of Financial Instruments Or Liabilities [Line Items]
Convertible senior notes, unamortized discount	$ 5,198,000	$ 5,367,000

Derivatives and Hedging - Additional Information (Detail) - USD ($)	Mar. 31, 2013	Dec. 31, 2012
Derivative [Line Items]
Notional amount of foreign currency exchange contracts	$ 170,299,000	$ 137,125,000

Summary of Fair Value of Derivative Instruments by Contract Type and Location of Asset and/or Liability on Consolidated Condensed Balance Sheets (Detail) - USD ($) $ in Thousands	Mar. 31, 2013	Dec. 31, 2012
Other Current Assets
Derivatives Fair Value [Line Items]
Foreign currency exchange contracts, asset derivatives not designated as hedging instruments, fair value	$ 6,234	$ 5,011
Accounts payable and accrued expenses
Derivatives Fair Value [Line Items]
Foreign currency exchange contracts, liability derivatives not designated as hedging instruments, fair value	$ 407	$ 1,046

Location of Gains in Consolidated Condensed Statements of Operations that were Recognized and Derivative Contract Type (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Other income, Net
Derivative Instruments Gain Loss [Line Items]
Foreign currency exchange contracts, amount of net gain recognized in income on derivatives not designated as hedging instruments	$ 7,848	$ 5,685

Information Utilized by Management to Evaluate its Operating Segments (Detail) - USD ($)
$ in Thousands

3 Months Ended

Mar. 31, 2013

Mar. 31, 2012

Net sales

$ 287,756

$ 285,098

Additions to long-lived assets

44,129

31,510

3,617

7,690

Golf Clubs

Net sales

244,771

242,552

Additions to long-lived assets

^[1]

43,989

32,640

3,606

7,506

Golf Balls

Net sales

42,985

42,546

Additions to long-lived assets

^[1]

6,184

1,577

184

Reconciling Items