Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
(d) Exhibits | |||||||||||
99.1 | |||||||||||
104 | Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document |
TOPGOLF CALLAWAY BRANDS CORP. | ||||||||
Date: August 8, 2023 | By: | /s/ Heather D. McAllister | ||||||
Name: | Heather D. McAllister | |||||||
Title: | Senior Vice President, General Counsel and Corporate Secretary |
GAAP RESULTS | |||||||||||||||||||||||||||||||||||||||||||||||
(in millions, except percentages and per share data) | Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||||||||||||||||||||||
2023 | 2022 | $ Change | % Change | 2023 | 2022 | $ Change | % Change | ||||||||||||||||||||||||||||||||||||||||
Net revenues | $ | 1,179.7 | $ | 1,115.7 | $ | 64.0 | 5.7 | % | $ | 2,347.1 | $ | 2,155.9 | $ | 191.2 | 8.9 | % | |||||||||||||||||||||||||||||||
Income from operations | 116.0 | 129.0 | (13.0) | (10.1) | % | 196.5 | 223.3 | (26.8) | (12.0) | % | |||||||||||||||||||||||||||||||||||||
Other expense, net | (44.4) | (20.7) | (23.7) | 114.5 | % | (104.1) | (44.0) | (60.1) | 136.6 | % | |||||||||||||||||||||||||||||||||||||
Income before income taxes | 71.6 | 108.3 | (36.7) | (33.9) | % | 92.4 | 179.3 | (86.9) | (48.5) | % | |||||||||||||||||||||||||||||||||||||
Income tax (benefit) provision | (45.8) | 2.9 | (48.7) | n/m | (50.0) | (12.8) | (37.2) | n/m | |||||||||||||||||||||||||||||||||||||||
Net income | $ | 117.4 | $ | 105.4 | $ | 12.0 | 11.4 | % | $ | 142.4 | $ | 192.1 | $ | (49.7) | (25.9) | % | |||||||||||||||||||||||||||||||
Earnings per share - diluted | $ | 0.59 | $ | 0.53 | $ | 0.06 | 11.3 | % | $ | 0.72 | $ | 0.97 | $ | (0.25) | (25.8) | % | |||||||||||||||||||||||||||||||
(in millions, except percentages and per share data) | Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2023 | 2022 | $ Change | % Change | Non-GAAP Constant Currency vs. 2022 | 2023 | 2022 | $ Change | % Change | Non-GAAP Constant Currency vs. 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Net revenues | $ | 1,179.7 | $ | 1,115.7 | $ | 64.0 | 5.7 | % | 6.5 | % | $ | 2,347.1 | $ | 2,155.9 | $ | 191.2 | 8.9 | % | 10.6 | % | |||||||||||||||||||||||||||||||||||||||
Income from operations | 130.5 | 135.1 | (4.6) | (3.4) | % | — | % | 221.5 | 241.1 | (19.6) | (8.1) | % | 1.0 | % | |||||||||||||||||||||||||||||||||||||||||||||
Other expense, net | (44.3) | (19.5) | (24.8) | 127.2 | % | (92.7) | (41.6) | (51.1) | 122.8 | % | |||||||||||||||||||||||||||||||||||||||||||||||||
Income before income taxes | 86.2 | 115.6 | (29.4) | (25.4) | % | 128.8 | 199.5 | (70.7) | (35.4) | % | |||||||||||||||||||||||||||||||||||||||||||||||||
Income tax provision | 8.4 | 22.1 | (13.7) | (62.0) | % | 17.8 | 35.1 | (17.3) | (49.3) | % | |||||||||||||||||||||||||||||||||||||||||||||||||
Net income | $ | 77.8 | $ | 93.5 | $ | (15.7) | (16.8) | % | $ | 111.0 | $ | 164.4 | $ | (53.4) | (32.5) | % | |||||||||||||||||||||||||||||||||||||||||||
Earnings per share - diluted | $ | 0.39 | $ | 0.47 | $ | (0.08) | (17.0) | % | $ | 0.57 | $ | 0.84 | $ | (0.27) | (32.1) | % | |||||||||||||||||||||||||||||||||||||||||||
Adjusted EBITDA | $ | 206.2 | $ | 207.3 | $ | (1.1) | (0.5) | % | 1.7 | % | $ | 363.5 | $ | 377.1 | $ | (13.6) | (3.6) | % | 2.2 | % | |||||||||||||||||||||||||||||||||||||||
(in millions, except percentages) | Three Months Ended June 30, | Non-GAAP Constant Currency vs. 2022(1) | Six Months Ended June 30, | Non-GAAP Constant Currency vs. 2022(1) | |||||||||||||||||||||||||||||||||||||||||||
2023 | 2022 | % Change | % Change | 2023 | 2022 | % Change | % Change | ||||||||||||||||||||||||||||||||||||||||
Topgolf | $ | 470.8 | $ | 403.7 | 16.6 | % | 16.7 | % | $ | 874.3 | $ | 725.7 | 20.5 | % | 20.8 | % | |||||||||||||||||||||||||||||||
Golf Equipment | 451.0 | 451.9 | (0.2) | % | 1.0 | % | 894.7 | 919.9 | (2.7) | % | (0.3) | % | |||||||||||||||||||||||||||||||||||
Active Lifestyle | 257.9 | 260.1 | (0.8) | % | — | % | 578.1 | 510.3 | 13.3 | % | 15.9 | % | |||||||||||||||||||||||||||||||||||
Net Revenues | $ | 1,179.7 | $ | 1,115.7 | 5.7 | % | 6.5 | % | $ | 2,347.1 | $ | 2,155.9 | 8.9 | % | 10.6 | % | |||||||||||||||||||||||||||||||
(1) Calculated by applying 2022 exchange rates to 2023 reported sales in regions outside the U.S. | |||||||||||||||||||||||||||||||||||||||||||||||
(in millions, except percentages) | Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||||||||||
2023 | 2022 | Change | 2023 | 2022 | Change | ||||||||||||||||||||||||||||||
Topgolf | $ | 44.0 | $ | 44.2 | (0.5)% | $ | 46.8 | $ | 50.7 | (7.7)% | |||||||||||||||||||||||||
% of segment revenue | 9.3 | % | 10.9 | % | (160) | bps | 5.4 | % | 7.0 | % | (160) | bps | |||||||||||||||||||||||
Golf Equipment | 96.4 | 100.3 | (3.9)% | 178.0 | 201.1 | (11.5)% | |||||||||||||||||||||||||||||
% of segment revenue | 21.4 | % | 22.2 | % | (80) | bps | 19.9 | % | 21.9 | % | (200) | bps | |||||||||||||||||||||||
Active Lifestyle | 19.5 | 22.5 | (13.3)% | 56.8 | 49.2 | 15.4% | |||||||||||||||||||||||||||||
% of segment revenue | 7.6 | % | 8.7 | % | (110) | bps | 9.8 | % | 9.6 | % | 20 | bps | |||||||||||||||||||||||
Total Segment Operating Income | $ | 159.9 | $ | 167.0 | (4.3)% | $ | 281.6 | $ | 301.0 | (6.4)% | |||||||||||||||||||||||||
% of segment revenue | 13.6 | % | 15.0 | % | (140) | bps | 12.0 | % | 14.0 | % | (200) | bps | |||||||||||||||||||||||
Constant Currency Total Segment Operating Income | (1.5)% | 0.9% |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||
(in millions) | 2023 | 2022 | $ Change | 2023 | 2022 | $ Change | |||||||||||||||||||||||||||||
Total segment operating income: | $ | 159.9 | $ | 167.0 | $ | (7.1) | $ | 281.6 | $ | 301.0 | $ | (19.4) | |||||||||||||||||||||||
Reconciling items(1) | (43.9) | (38.0) | (5.9) | (85.1) | (77.7) | (7.4) | |||||||||||||||||||||||||||||
Income from operations | 116.0 | 129.0 | (13.0) | 196.5 | 223.3 | (26.8) | |||||||||||||||||||||||||||||
Interest expense | (51.7) | (32.5) | (19.2) | (101.3) | (63.9) | (37.4) | |||||||||||||||||||||||||||||
Other income (expense), net | 7.3 | 11.8 | (4.5) | (2.8) | 19.9 | (22.7) | |||||||||||||||||||||||||||||
Income before income taxes | $ | 71.6 | $ | 108.3 | $ | (36.7) | $ | 92.4 | $ | 179.3 | $ | (86.9) | |||||||||||||||||||||||
(1) Includes corporate overhead and certain non-recurring and non-cash items as described in the schedules to this release. |
FULL YEAR 2023 OUTLOOK | ||||||||||||||
(in millions, except where noted otherwise and for percentages and per share data) | ||||||||||||||
2023 Current Estimate | 2022 Reported Results | |||||||||||||
Consolidated Net Revenues | $4.42 - $4.47 billion | $3,996 | ||||||||||||
Topgolf Revenue | Approx. $1.9 billion | $1,549 | ||||||||||||
Topgolf Same Venue Sales Growth(1) | Mid-to-High Single Digit % | 7% | ||||||||||||
Consolidated Adjusted EBITDA | $625 - $640 | $558 | ||||||||||||
Topgolf Adjusted EBITDA | $315 - $325 | $235 | ||||||||||||
Non-GAAP Diluted Earnings per Share | $0.63 - $0.69 | $0.82 | ||||||||||||
Shares Outstanding | Approx. 200 | 201 | ||||||||||||
(1) Same venue sales growth for 2022 was measured in comparison to 2019, given the pandemic impacts in 2020. For 2023, same venue sales growth is measured in comparison to the prior year, 2022. |
THIRD QUARTER 2023 OUTLOOK | ||||||||||||||
(in millions) | ||||||||||||||
Q3 2023 Estimate | Q3 2022 Reported Results | |||||||||||||
Consolidated Net Revenues | $1,050 - $1,075 | $989 | ||||||||||||
Consolidated Adjusted EBITDA | $141 - $154 | $144 | ||||||||||||
Topgolf expected to deliver same venue sales growth of 1% to 3% year-over-year, which would represent 12% to 14% same venue sales growth on a two-year stack basis (1). | ||||||||||||||
(1) Stacked same-venue-sales represent the summation of quarter over quarter growth for Q3 2022 vs. Q3 2019 and Q3 2023 vs. Q3 2022. We measure same venue sales growth for 2022 in comparison to 2019 due to the impacts of the pandemic which occurred during 2020 and 2021. For 2023, we measure same venue sales growth against 2022. |
June 30, 2023 | December 31, 2022 | ||||||||||
ASSETS | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | 191.8 | $ | 180.2 | |||||||
Restricted cash | 0.5 | 19.1 | |||||||||
Accounts receivable, net | 397.2 | 167.3 | |||||||||
Inventories | 839.8 | 959.2 | |||||||||
Other current assets | 228.6 | 193.1 | |||||||||
Total current assets | 1,657.9 | 1,518.9 | |||||||||
Property, plant and equipment, net | 2,003.1 | 1,809.6 | |||||||||
Operating lease right-of-use assets, net | 1,427.6 | 1,419.1 | |||||||||
Goodwill and intangible assets, net | 3,484.6 | 3,487.4 | |||||||||
Other assets, net | 391.2 | 355.4 | |||||||||
Total assets | $ | 8,964.4 | $ | 8,590.4 | |||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||||||
Current liabilities: | |||||||||||
Accounts payable and accrued expenses | $ | 444.6 | $ | 580.0 | |||||||
Accrued employee compensation and benefits | 104.8 | 135.2 | |||||||||
Asset-based credit facilities | 96.5 | 219.3 | |||||||||
Operating lease liabilities, short-term | 80.4 | 76.4 | |||||||||
Construction advances | 72.0 | 35.4 | |||||||||
Deferred revenue | 98.5 | 94.9 | |||||||||
Other current liabilities | 35.8 | 35.0 | |||||||||
Total current liabilities | 932.6 | 1,176.2 | |||||||||
Long-term debt, net | 1,525.4 | 1,176.3 | |||||||||
Long-term operating leases | 1,451.5 | 1,437.5 | |||||||||
Deemed landlord financing obligations, long-term | 765.8 | 658.0 | |||||||||
Deferred taxes, net | 77.7 | 117.5 | |||||||||
Other long-term liabilities | 278.7 | 250.6 | |||||||||
Total shareholders’ equity | 3,932.7 | 3,774.3 | |||||||||
Total liabilities and shareholders’ equity | $ | 8,964.4 | $ | 8,590.4 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Net revenues: | |||||||||||||||||||||||
Products | $ | 713.5 | $ | 716.6 | $ | 1,481.1 | $ | 1,439.0 | |||||||||||||||
Services | 466.2 | 399.1 | 866.0 | 716.9 | |||||||||||||||||||
Total net revenues | 1,179.7 | 1,115.7 | 2,347.1 | 2,155.9 | |||||||||||||||||||
Costs and expenses: | |||||||||||||||||||||||
Cost of products | 387.9 | 400.0 | 829.9 | 811.8 | |||||||||||||||||||
Cost of services, excluding depreciation and amortization | 51.4 | 49.1 | 95.8 | 88.1 | |||||||||||||||||||
Other venue expenses | 317.1 | 262.2 | 622.6 | 492.6 | |||||||||||||||||||
Selling, general and administrative expense | 279.6 | 252.6 | 548.1 | 495.7 | |||||||||||||||||||
Research and development expense | 22.0 | 18.7 | 44.8 | 36.2 | |||||||||||||||||||
Venue pre-opening costs | 5.7 | 4.1 | 9.4 | 8.2 | |||||||||||||||||||
Total costs and expenses | 1,063.7 | 986.7 | 2,150.6 | 1,932.6 | |||||||||||||||||||
Income from operations | 116.0 | 129.0 | 196.5 | 223.3 | |||||||||||||||||||
Interest expense, net | (51.7) | (32.5) | (101.3) | (63.9) | |||||||||||||||||||
Other income (expense), net | 7.3 | 11.8 | (2.8) | 19.9 | |||||||||||||||||||
Income before income taxes | 71.6 | 108.3 | 92.4 | 179.3 | |||||||||||||||||||
Income tax (benefit) provision | (45.8) | 2.9 | (50.0) | (12.8) | |||||||||||||||||||
Net Income | $ | 117.4 | $ | 105.4 | $ | 142.4 | $ | 192.1 | |||||||||||||||
Earnings per common share: | |||||||||||||||||||||||
Basic | $0.63 | $0.57 | $0.77 | $1.04 | |||||||||||||||||||
Diluted | $0.59 | $0.53 | $0.72 | $0.97 | |||||||||||||||||||
Weighted-average common shares outstanding: | |||||||||||||||||||||||
Basic | 185.2 | 184.7 | 185.2 | 184.9 | |||||||||||||||||||
Diluted | 201.3 | 200.6 | 201.4 | 200.7 | |||||||||||||||||||
Six Months Ended June 30, | |||||||||||
2023 | 2022 | ||||||||||
Cash flows from operating activities: | |||||||||||
Net income | $ | 142.4 | $ | 192.1 | |||||||
Adjustments to reconcile net income to net cash used in operating activities: | |||||||||||
Depreciation and amortization | 114.7 | 91.4 | |||||||||
Lease amortization expense | 48.3 | 42.2 | |||||||||
Non-cash interest on financing and deemed landlord financed leases | 13.6 | 6.2 | |||||||||
Amortization of debt discount and issuance costs | 3.4 | 4.9 | |||||||||
Deferred taxes, net | (47.2) | (11.3) | |||||||||
Non-cash share-based compensation | 24.8 | 27.0 | |||||||||
Unrealized net gains (losses) on hedging instruments and foreign currency | 3.5 | (1.1) | |||||||||
Loss on debt modification | 10.5 | — | |||||||||
Other | 1.1 | — | |||||||||
Changes in assets and liabilities, net | (336.9) | (399.5) | |||||||||
Net cash used in operating activities | (21.8) | (48.1) | |||||||||
Cash flows from investing activities: | |||||||||||
Capital expenditures | (262.6) | (243.0) | |||||||||
Asset acquisitions, net of cash acquired | (18.7) | — | |||||||||
Proceeds from government grants | 3.0 | — | |||||||||
Investment in golf-related ventures | (2.1) | — | |||||||||
Acquisition of intangible assets | (0.7) | — | |||||||||
Proceeds from sale of property and equipment | 0.4 | — | |||||||||
Net cash used in investing activities | (280.7) | (243.0) | |||||||||
Cash flows from financing activities: | |||||||||||
Repayments of long-term debt | (782.0) | (82.3) | |||||||||
Proceeds from borrowings on long-term debt | 1,224.8 | 60.0 | |||||||||
(Repayments of) proceeds from credit facilities, net | (229.8) | 95.4 | |||||||||
Debt issuance costs | (1.3) | — | |||||||||
Payment on contingent earn-out obligation | — | (5.6) | |||||||||
Repayments of financing leases | (1.7) | (0.2) | |||||||||
Proceeds from lease financing | 111.3 | 88.9 | |||||||||
Exercise of stock options | 3.7 | 0.1 | |||||||||
Acquisition of treasury stock | (27.3) | (34.5) | |||||||||
Net cash provided by financing activities | 297.7 | 121.8 | |||||||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (2.1) | (5.5) | |||||||||
Net decrease in cash, cash equivalents and restricted cash | (6.9) | (174.8) | |||||||||
Cash, cash equivalents and restricted cash at beginning of period | 203.4 | 357.7 | |||||||||
Cash, cash equivalents and restricted cash at end of period | $ | 196.5 | $ | 182.9 | |||||||
Less: restricted cash | (4.7) | (4.6) | |||||||||
Cash and cash equivalents at end of period | $ | 191.8 | $ | 178.3 |
Net Revenues by Category | |||||||||||||||||||||||||||||
Three Months Ended June 30, | Growth/(Decline) | Non-GAAP Constant Currency vs. 2022(1) | |||||||||||||||||||||||||||
2023 | 2022 | Dollars | Percent | Percent | |||||||||||||||||||||||||
Net revenues: | |||||||||||||||||||||||||||||
Venues | $ | 453.2 | $ | 383.4 | $ | 69.8 | 18.2% | 18.2% | |||||||||||||||||||||
Topgolf other business lines | 17.6 | 20.3 | (2.7) | (13.3%) | (11.8%) | ||||||||||||||||||||||||
Golf Clubs | 340.3 | 367.8 | (27.5) | (7.5%) | (6.2%) | ||||||||||||||||||||||||
Golf Balls | 110.7 | 84.1 | 26.6 | 31.6% | 32.7% | ||||||||||||||||||||||||
Apparel | 143.5 | 136.9 | 6.6 | 4.8% | 5.9% | ||||||||||||||||||||||||
Gear, Accessories & Other | 114.4 | 123.2 | (8.8) | (7.1%) | (6.6%) | ||||||||||||||||||||||||
Total net revenues | $ | 1,179.7 | $ | 1,115.7 | $ | 64.0 | 5.7% | 6.5% | |||||||||||||||||||||
(1) Calculated by applying 2022 exchange rates to 2023 reported sales in regions outside the U.S. | |||||||||||||||||||||||||||||
Net Revenues by Region | |||||||||||||||||||||||||||||
Three Months Ended June 30, | Growth/(Decline) | Non-GAAP Constant Currency vs. 2022(1) | |||||||||||||||||||||||||||
2023 | 2022 | Dollars | Percent | Percent | |||||||||||||||||||||||||
Net revenues: | |||||||||||||||||||||||||||||
United States | $ | 886.7 | $ | 800.5 | $ | 86.2 | 10.8% | 10.8% | |||||||||||||||||||||
Europe | 120.2 | 141.0 | (20.8) | (14.8%) | (15.5%) | ||||||||||||||||||||||||
Asia | 128.2 | 135.2 | (7.0) | (5.2%) | (0.2%) | ||||||||||||||||||||||||
Rest of world | 44.6 | 39.0 | 5.6 | 14.4% | 20.5% | ||||||||||||||||||||||||
Total net revenues | $ | 1,179.7 | $ | 1,115.7 | $ | 64.0 | 5.7% | 6.5% | |||||||||||||||||||||
(1) Calculated by applying 2022 exchange rates to 2023 reported sales in regions outside the U.S. | |||||||||||||||||||||||||||||
Operating Segment Information | |||||||||||||||||||||||||||||
Three Months Ended June 30, | Growth/(Decline) | Non-GAAP Constant Currency vs. 2022(1) | |||||||||||||||||||||||||||
2023 | 2022 | Dollars | Percent | Percent | |||||||||||||||||||||||||
Net revenues: | |||||||||||||||||||||||||||||
Topgolf | $ | 470.8 | $ | 403.7 | $ | 67.1 | 16.6% | 16.7% | |||||||||||||||||||||
Golf Equipment | 451.0 | 451.9 | (0.9) | (0.2%) | 1.0% | ||||||||||||||||||||||||
Active Lifestyle | 257.9 | 260.1 | (2.2) | (0.8%) | —% | ||||||||||||||||||||||||
Total net revenues | $ | 1,179.7 | $ | 1,115.7 | $ | 64.0 | 5.7% | 6.5% | |||||||||||||||||||||
Segment operating income: | |||||||||||||||||||||||||||||
Topgolf | $ | 44.0 | $ | 44.2 | $ | (0.2) | (0.5%) | ||||||||||||||||||||||
Golf Equipment | 96.4 | 100.3 | (3.9) | (3.9%) | |||||||||||||||||||||||||
Active Lifestyle | 19.5 | 22.5 | (3.0) | (13.3%) | |||||||||||||||||||||||||
Total segment operating income | 159.9 | 167.0 | (7.1) | (4.3%) | |||||||||||||||||||||||||
Corporate G&A and other(2) | (43.9) | (38.0) | (5.9) | 15.5% | |||||||||||||||||||||||||
Total operating Income | 116.0 | 129.0 | (13.0) | (10.1%) | |||||||||||||||||||||||||
Interest expense, net | (51.7) | (32.5) | (19.2) | 59.1% | |||||||||||||||||||||||||
Other (expense) income, net | 7.3 | 11.8 | (4.5) | (38.1%) | |||||||||||||||||||||||||
Total Income before income taxes | $ | 71.6 | $ | 108.3 | $ | (36.7) | (33.9%) | ||||||||||||||||||||||
(1) Calculated by applying 2022 exchange rates to 2023 reported sales in regions outside the U.S. | |||||||||||||||||||||||||||||
(2) Amount includes corporate general and administrative expenses not utilized by management in determining segment profitability, in addition to certain non-cash and non-recurring items described in the Supplemental Financial Information and Non-GAAP Reconciliation table below. | |||||||||||||||||||||||||||||
Net Revenues by Category | |||||||||||||||||||||||||||||
Six Months Ended June 30, | Growth/(Decline) | Non-GAAP Constant Currency vs. 2022(1) | |||||||||||||||||||||||||||
2023 | 2022 | Dollars | Percent | Percent | |||||||||||||||||||||||||
Net revenues: | |||||||||||||||||||||||||||||
Venues | $ | 839.9 | $ | 689.9 | $ | 150.0 | 21.7% | 21.9% | |||||||||||||||||||||
Topgolf other business lines | 34.4 | 35.8 | (1.4) | (3.9%) | (1.4%) | ||||||||||||||||||||||||
Golf Clubs | 691.1 | 738.2 | (47.1) | (6.4%) | (3.8%) | ||||||||||||||||||||||||
Golf Balls | 203.6 | 181.7 | 21.9 | 12.1% | 13.8% | ||||||||||||||||||||||||
Apparel | 319.6 | 275.3 | 44.3 | 16.1% | 19.1% | ||||||||||||||||||||||||
Gear, Accessories & Other | 258.5 | 235.0 | 23.5 | 10.0% | 12.0% | ||||||||||||||||||||||||
Total net revenues | $ | 2,347.1 | $ | 2,155.9 | $ | 191.2 | 8.9% | 10.6% | |||||||||||||||||||||
(1) Calculated by applying 2022 exchange rates to 2023 reported sales in regions outside the U.S. | |||||||||||||||||||||||||||||
Net Revenues by Region | |||||||||||||||||||||||||||||
Six Months Ended June 30, | Growth/(Decline) | Non-GAAP Constant Currency vs. 2022(1) | |||||||||||||||||||||||||||
2023 | 2022 | Dollars | Percent | Percent | |||||||||||||||||||||||||
Net revenues: | |||||||||||||||||||||||||||||
United States | $ | 1,697.8 | $ | 1,509.9 | $ | 187.9 | 12.4% | 12.4% | |||||||||||||||||||||
Europe | 273.8 | 275.8 | (2.0) | (0.7%) | 2.5% | ||||||||||||||||||||||||
Asia | 288.4 | 293.9 | (5.5) | (1.9%) | 6.1% | ||||||||||||||||||||||||
Rest of world | 87.1 | 76.3 | 10.8 | 14.2% | 20.7% | ||||||||||||||||||||||||
Total net revenues | $ | 2,347.1 | $ | 2,155.9 | $ | 191.2 | 8.9% | 10.6% | |||||||||||||||||||||
(1) Calculated by applying 2022 exchange rates to 2023 reported sales in regions outside the U.S. | |||||||||||||||||||||||||||||
Operating Segment Information | |||||||||||||||||||||||||||||
Six Months Ended June 30, | Growth/(Decline) | Non-GAAP Constant Currency vs. 2022(1) | |||||||||||||||||||||||||||
2023 | 2022 | Dollars | Percent | Percent | |||||||||||||||||||||||||
Net revenues: | |||||||||||||||||||||||||||||
Topgolf | $ | 874.3 | $ | 725.7 | $ | 148.6 | 20.5% | 20.8% | |||||||||||||||||||||
Golf Equipment | 894.7 | 919.9 | (25.2) | (2.7%) | (0.3%) | ||||||||||||||||||||||||
Active Lifestyle | 578.1 | 510.3 | 67.8 | 13.3% | 15.9% | ||||||||||||||||||||||||
Total net revenues | $ | 2,347.1 | $ | 2,155.9 | $ | 191.2 | 8.9% | 10.6% | |||||||||||||||||||||
Segment operating income: | |||||||||||||||||||||||||||||
Topgolf | $ | 46.8 | $ | 50.7 | $ | (3.9) | (7.7%) | ||||||||||||||||||||||
Golf Equipment | 178.0 | 201.1 | (23.1) | (11.5%) | |||||||||||||||||||||||||
Active Lifestyle | 56.8 | 49.2 | 7.6 | 15.4% | |||||||||||||||||||||||||
Total segment operating income | 281.6 | 301.0 | (19.4) | (6.4%) | |||||||||||||||||||||||||
Corporate costs and expenses(2) | (85.1) | (77.7) | (7.4) | 9.5% | |||||||||||||||||||||||||
Total operating income | 196.5 | 223.3 | (26.8) | (12.0%) | |||||||||||||||||||||||||
Interest expense, net | (101.3) | (63.9) | (37.4) | 58.5% | |||||||||||||||||||||||||
Other income, net | (2.8) | 19.9 | (22.7) | (114.1%) | |||||||||||||||||||||||||
Total income before income taxes | $ | 92.4 | $ | 179.3 | $ | (86.9) | (48.5%) | ||||||||||||||||||||||
(1) Calculated by applying 2022 exchange rates to 2023 reported sales in regions outside the U.S. | |||||||||||||||||||||||||||||
(2) Amount includes corporate general and administrative expenses not utilized by management in determining segment profitability, in addition to certain non-cash and non-recurring items described in the Supplemental Financial Information and Non-GAAP Reconciliation table below. | |||||||||||||||||||||||||||||
Three Months Ended June 30, | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2023 | 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
GAAP | Non-Cash Amortization and Depreciation(1) | Non-Recurring Items(2) | Tax Valuation Allowance(3) | Non- GAAP | GAAP | Non-Cash Amortization and Depreciation(1) | Non-Recurring Items(4) | Tax Valuation Allowance(3) | Non- GAAP | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Net revenues | $ | 1,179.7 | $ | — | $ | — | $ | — | $ | 1,179.7 | $ | 1,115.7 | $ | — | $ | — | $ | — | $ | 1,115.7 | ||||||||||||||||||||||||||||||||||||||||||
Total costs and expenses | 1,063.7 | 6.9 | 7.6 | — | 1,049.2 | 986.7 | 6.7 | (0.6) | — | 980.6 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Income (loss) from operations | 116.0 | (6.9) | (7.6) | — | 130.5 | 129.0 | (6.7) | 0.6 | — | 135.1 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Other expense, net | (44.4) | — | (0.1) | — | (44.3) | (20.7) | (0.9) | (0.3) | — | (19.5) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Income (loss) before income taxes | 71.6 | (6.9) | (7.7) | — | 86.2 | 108.3 | (7.6) | 0.3 | — | 115.6 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Income tax (benefit) provision | (45.8) | (1.7) | (1.7) | (50.8) | 8.4 | 2.9 | (1.8) | (0.5) | (16.9) | 22.1 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Net income (loss) | $ | 117.4 | $ | (5.2) | $ | (6.0) | $ | 50.8 | $ | 77.8 | $ | 105.4 | $ | (5.8) | $ | 0.8 | $ | 16.9 | $ | 93.5 | ||||||||||||||||||||||||||||||||||||||||||
Earnings (loss) per share - diluted (5) | $ | 0.59 | $ | (0.02) | $ | (0.03) | $ | 0.25 | $ | 0.39 | $ | 0.53 | $ | (0.03) | $ | 0.01 | $ | 0.08 | $ | 0.47 | ||||||||||||||||||||||||||||||||||||||||||
Weighted-average shares outstanding - diluted | 201.3 | 201.3 | 201.3 | 201.3 | 201.3 | 200.6 | 200.6 | 200.6 | 200.6 | 200.6 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
(1) Includes amortization and depreciation of acquired intangible assets and purchase accounting adjustments. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(2) Primarily includes $3.1 million in restructuring and reorganization charges and $2.2 million in IT integration and implementation costs stemming from acquisitions. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(3) Release of tax valuation allowances recorded in connection with the merger with Topgolf. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(4) Primarily includes $2.3 million in charges related to the suspension of our Jack Wolfskin retail operations in Russia and $1.8 million in IT integration and implementation costs stemming from acquisitions. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(5) Periodic interest expense of $1.6 million related to the 2020 Convertible Notes is excluded from the calculation of net income for the purpose of calculating diluted earnings per share for both of the periods ending June 30, 2023 and 2022. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended June 30, | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2023 | 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
GAAP | Non-Cash Amortization and Depreciation(1) | Non-Recurring Items(2) | Tax Valuation Allowance(3) | Non- GAAP | GAAP | Non-Cash Amortization and Depreciation(1) | Non-Recurring Items(4) | Tax Valuation Allowance(3) | Non- GAAP | ||||||||||||||||||||||||||||||||||||||||||||||||||
Net revenues | $ | 2,347.1 | $ | — | $ | — | $ | — | $ | 2,347.1 | $ | 2,155.9 | $ | — | $ | — | $ | — | $ | 2,155.9 | |||||||||||||||||||||||||||||||||||||||
Total costs and expenses | 2,150.6 | 14.2 | 10.8 | — | 2,125.6 | 1,932.6 | 11.5 | 6.3 | — | 1,914.8 | |||||||||||||||||||||||||||||||||||||||||||||||||
Income (loss) from operations | 196.5 | (14.2) | (10.8) | — | 221.5 | 223.3 | (11.5) | (6.3) | — | 241.1 | |||||||||||||||||||||||||||||||||||||||||||||||||
Other expense, net | (104.1) | (0.6) | (10.8) | — | (92.7) | (44.0) | (1.8) | (0.6) | — | (41.6) | |||||||||||||||||||||||||||||||||||||||||||||||||
Income (loss) before income taxes | 92.4 | (14.8) | (21.6) | — | 128.8 | 179.3 | (13.3) | (6.9) | — | 199.5 | |||||||||||||||||||||||||||||||||||||||||||||||||
Income tax (benefit) provision | (50.0) | (3.6) | (5.1) | (59.1) | 17.8 | (12.8) | (3.2) | (1.3) | (43.4) | 35.1 | |||||||||||||||||||||||||||||||||||||||||||||||||
Net income (loss) | $ | 142.4 | $ | (11.2) | $ | (16.5) | $ | 59.1 | $ | 111.0 | $ | 192.1 | $ | (10.1) | $ | (5.6) | $ | 43.4 | $ | 164.4 | |||||||||||||||||||||||||||||||||||||||
Earnings (loss) per share - diluted(5) | $ | 0.72 | $ | (0.06) | $ | (0.08) | $ | 0.29 | $ | 0.57 | $ | 0.97 | $ | (0.05) | $ | (0.03) | $ | 0.21 | $ | 0.84 | |||||||||||||||||||||||||||||||||||||||
Weighted-average shares outstanding - diluted | 201.4 | 201.4 | 201.4 | 201.4 | 201.4 | 200.7 | 200.7 | 200.7 | 200.7 | 200.7 | |||||||||||||||||||||||||||||||||||||||||||||||||
(1) Includes amortization and depreciation of acquired intangible assets and purchase accounting adjustments. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(2) Primarily includes $13.1 million in total charges related to our 2023 debt modification, $3.4 million in IT integration and implementation related costs stemming from acquisitions, and $3.1 million in restructuring and reorganization charges. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(3) Related to the release of tax valuation allowances recorded in connection with the merger with Topgolf. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(4) Primarily includes $2.9 million in legal and credit agency fees related to a postponed debt refinancing, $2.2 million in IT integration and implementation related costs stemming from acquisitions, and $1.5 million in non-cash asset write-downs related to the suspension of our Jack Wolfskin retail operations in Russia. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(5) Periodic interest expense of $3.2 million related to the 2020 Convertible Notes is excluded from the calculation of net income for the purpose of calculating diluted earnings per share for both of the periods ending June 30, 2023 and 2022. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2023 Trailing Twelve Month Adjusted EBITDA | 2022 Trailing Twelve Month Adjusted EBITDA | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Quarter Ended | Quarter Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
September 30, | December 31, | March 31, | June 30, | September 30, | December 31, | March 31, | June 30, | ||||||||||||||||||||||||||||||||||||||||||||||||||||
2022 | 2022 | 2023 | 2023 | Total | 2021 | 2021 | 2022 | 2022 | Total | ||||||||||||||||||||||||||||||||||||||||||||||||||
Net income (loss) | $ | 38.5 | $ | (72.7) | $ | 25.0 | $ | 117.4 | $ | 108.2 | $ | (16.0) | $ | (26.2) | $ | 86.7 | $ | 105.4 | $ | 149.9 | |||||||||||||||||||||||||||||||||||||||
Interest expense, net | 36.4 | 42.5 | 49.6 | 51.7 | 180.2 | 28.7 | 40.5 | 31.4 | 32.5 | 133.1 | |||||||||||||||||||||||||||||||||||||||||||||||||
Income tax provision (benefit) | 0.3 | (3.5) | (4.2) | (45.8) | (53.2) | 66.2 | (69.5) | (15.7) | 2.9 | (16.1) | |||||||||||||||||||||||||||||||||||||||||||||||||
Non-cash depreciation and amortization expense | 48.4 | 53.0 | 56.1 | 58.6 | 216.1 | 44.4 | 47.9 | 42.5 | 48.9 | 183.7 | |||||||||||||||||||||||||||||||||||||||||||||||||
Non-cash stock compensation and stock warrant expense, net | 10.3 | 9.7 | 12.5 | 12.3 | 44.8 | 10.8 | 12.0 | 14.5 | 11.6 | 48.9 | |||||||||||||||||||||||||||||||||||||||||||||||||
Non-cash lease amortization expense | 4.4 | 4.5 | 4.6 | 4.4 | 17.9 | 2.8 | 7.7 | 3.5 | 6.6 | 20.6 | |||||||||||||||||||||||||||||||||||||||||||||||||
Acquisitions & non-recurring items, before taxes(1) | 6.1 | 3.1 | 13.7 | 7.6 | 30.5 | 1.9 | 1.9 | 6.9 | (0.6) | 10.1 | |||||||||||||||||||||||||||||||||||||||||||||||||
Adjusted EBITDA | $ | 144.4 | $ | 36.6 | $ | 157.3 | $ | 206.2 | $ | 544.5 | $ | 138.8 | $ | 14.3 | $ | 169.8 | $ | 207.3 | $ | 530.2 | |||||||||||||||||||||||||||||||||||||||
(1) In 2023, amounts include $13.1 million in total charges in connection with the 2023 debt modification, $3.4 million in IT integration and implementation costs stemming from acquisitions, and $3.1 million in charges related to a reorganization. In 2022, amounts include $5.9 of implementation costs associated with new ERP systems stemming from acquisitions, $3.6 million for legal costs and credit agency fees related to a postponed debt refinancing, and $0.9 in reorganization costs. In 2021, amounts include $1.9 million in transaction, transition, and other non-recurring costs associated with the merger with Topgolf, and $1.9 million in expenses related to the implementation of new IT systems for Jack Wolfskin. |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Topgolf Segment operating income(1): | $ | 44.0 | $ | 44.2 | $ | 46.8 | $ | 50.7 | |||||||||||||||
Depreciation and amortization expense | 39.6 | 32.0 | 76.3 | 60.1 | |||||||||||||||||||
Non-cash stock compensation expense | 4.2 | 4.5 | 8.3 | 8.2 | |||||||||||||||||||
Non-cash lease amortization expense | 4.3 | 6.6 | 8.8 | 9.8 | |||||||||||||||||||
Other expense, net | — | (1.0) | — | (1.0) | |||||||||||||||||||
Topgolf Adjusted Segment EBITDA | $ | 92.1 | $ | 86.3 | $ | 140.2 | $ | 127.8 | |||||||||||||||
(1) We do not calculate GAAP net income at the operating segment level, but have provided Topgolf’s segment income from operations as a relevant measurement of profitability. Segment income from operations does not include interest expense and taxes as well as other non-cash and non-recurring items. Segment operating income is reconciled to the Company’s consolidated pre-tax income in the Segment Results section of this release. |
Twelve Months Ended, December 31, 2022 | ||||||||||||||
Topgolf Segment operating income(1): | $ | 76.8 | ||||||||||||
Depreciation and amortization expense | 125.2 | |||||||||||||
Non-cash stock compensation expense | 15.2 | |||||||||||||
Non-cash lease amortization expense | 19.6 | |||||||||||||
Other expense, net | (1.4) | |||||||||||||
Topgolf Adjusted Segment EBITDA | 235.4 | |||||||||||||
(1) We do not calculate GAAP net income at the operating segment level, but have provided Topgolf’s segment income from operations as a relevant measurement of profitability. Segment income from operations does not include interest expense and taxes as well as other non-cash and non-recurring items. Segment operating income is reconciled to the Company’s consolidated pre-tax income in the Segment Results section of this release. |