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 7, 2024 | 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, | |||||||||||||||||||||||||||||||||||||||||||||
2024 | 2023 | $ Change | % Change | 2024 | 2023 | $ Change | % Change | ||||||||||||||||||||||||||||||||||||||||
Net revenues | $ | 1,157.8 | $ | 1,179.7 | $ | (21.9) | (1.9) | % | $ | 2,302.0 | $ | 2,347.1 | $ | (45.1) | (1.9) | % | |||||||||||||||||||||||||||||||
Income from operations | 103.0 | 116.0 | (13.0) | (11.2) | % | 169.9 | 196.5 | (26.6) | (13.5) | % | |||||||||||||||||||||||||||||||||||||
Other expense, net | (50.6) | (44.4) | (6.2) | 14.0 | % | (106.0) | (104.1) | (1.9) | 1.8 | % | |||||||||||||||||||||||||||||||||||||
Income before taxes | 52.4 | 71.6 | (19.2) | (26.8) | % | 63.9 | 92.4 | (28.5) | (30.8) | % | |||||||||||||||||||||||||||||||||||||
Income tax benefit | (9.7) | (45.8) | 36.1 | (78.8) | % | (4.7) | (50.0) | 45.3 | (90.6) | % | |||||||||||||||||||||||||||||||||||||
Net income | $ | 62.1 | $ | 117.4 | $ | (55.3) | (47.1) | % | $ | 68.6 | $ | 142.4 | $ | (73.8) | (51.8) | % | |||||||||||||||||||||||||||||||
Earnings per share - diluted | $ | 0.32 | $ | 0.59 | $ | (0.27) | (45.8) | % | $ | 0.36 | $ | 0.72 | $ | (0.36) | (50.0) | % | |||||||||||||||||||||||||||||||
Weighted-average common shares outstanding - diluted | 199.6 | 201.3 | (1.7) | (0.8) | % | 199.4 | 201.4 | (2.0) | (1.0) | % |
(in millions, except percentages and per share data) | Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2024 | 2023 | $ Change | % Change | Constant Currency vs. 2023(1) | 2024 | 2023 | $ Change | % Change | Constant Currency vs. 2023(1) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Net revenues | $ | 1,157.8 | $ | 1,179.7 | $ | (21.9) | (1.9) | % | (0.9) | % | $ | 2,302.0 | $ | 2,347.1 | $ | (45.1) | (1.9) | % | (1.1) | % | |||||||||||||||||||||||||||||||||||||||
Non-GAAP Income from operations | $ | 121.8 | $ | 127.7 | $ | (5.9) | (4.6) | % | 0.2 | % | $ | 194.4 | $ | 215.7 | $ | (21.3) | (9.9) | % | (4.8) | % | |||||||||||||||||||||||||||||||||||||||
Non-GAAP Net income | $ | 83.1 | $ | 75.6 | $ | 7.5 | 9.9 | % | $ | 97.5 | $ | 106.0 | $ | (8.5) | (8.0) | % | |||||||||||||||||||||||||||||||||||||||||||
Non-GAAP Earnings per share - diluted | $ | 0.42 | $ | 0.38 | $ | 0.04 | 11.8 | % | $ | 0.51 | $ | 0.54 | $ | (0.03) | (5.6) | % | |||||||||||||||||||||||||||||||||||||||||||
Non-GAAP Adjusted EBITDA | $ | 205.6 | $ | 206.2 | $ | (0.6) | (0.3) | % | $ | 366.5 | $ | 363.5 | $ | 3.0 | 0.8 | % | |||||||||||||||||||||||||||||||||||||||||||
(1) See “Additional Information and Disclosures—Non-GAAP Information” for the calculation methodology of constant currency measures. |
(in millions, except percentages) | Three Months Ended June 30, | Constant Currency vs. 2023(1) | Six Months Ended June 30, | Constant Currency vs. 2023(1) | |||||||||||||||||||||||||||||||||||||||||||
2024 | 2023 | % Change | % Change | 2024 | 2023 | % Change | % Change | ||||||||||||||||||||||||||||||||||||||||
Topgolf | $ | 494.4 | $ | 470.8 | 5.0 | % | 5.0 | % | $ | 917.2 | $ | 874.3 | 4.9 | % | 4.8 | % | |||||||||||||||||||||||||||||||
Golf Equipment | 413.8 | 451.0 | (8.2) | % | (6.7) | % | 863.7 | 894.7 | (3.5) | % | (2.0) | % | |||||||||||||||||||||||||||||||||||
Active Lifestyle | 249.6 | 257.9 | (3.2) | % | (1.7) | % | 521.1 | 578.1 | (9.9) | % | (8.7) | % | |||||||||||||||||||||||||||||||||||
Net Revenues | $ | 1,157.8 | $ | 1,179.7 | (1.9) | % | (0.9) | % | $ | 2,302.0 | $ | 2,347.1 | (1.9) | % | (1.1) | % | |||||||||||||||||||||||||||||||
(1) See “Additional Information and Disclosures—Non-GAAP Information” for the calculation methodology of constant currency measures. | |||||||||||||||||||||||||||||||||||||||||||||||
(in millions, except percentages) | Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||||||||||
2024 | 2023 | Change | 2024 | 2023 | Change | ||||||||||||||||||||||||||||||
Topgolf | $ | 56.1 | $ | 44.0 | 27.5% | $ | 59.0 | $ | 46.8 | 26.1% | |||||||||||||||||||||||||
% of segment revenue | 11.3 | % | 9.3 | % | 200 | bps | 6.4 | % | 5.4 | % | 100 | bps | |||||||||||||||||||||||
Golf Equipment | 77.4 | 96.4 | (19.7)% | 159.5 | 178.0 | (10.4)% | |||||||||||||||||||||||||||||
% of segment revenue | 18.7 | % | 21.4 | % | (270) | bps | 18.5 | % | 19.9 | % | (140) | bps | |||||||||||||||||||||||
Active Lifestyle | 14.7 | 19.5 | (24.6)% | 39.4 | 56.8 | (30.6)% | |||||||||||||||||||||||||||||
% of segment revenue | 5.9 | % | 7.6 | % | (170) | bps | 7.6 | % | 9.8 | % | (220) | bps | |||||||||||||||||||||||
Total Segment Operating Income | $ | 148.2 | $ | 159.9 | (7.3)% | $ | 257.9 | $ | 281.6 | (8.4)% | |||||||||||||||||||||||||
% of total segment revenue | 12.8 | % | 13.6 | % | (80) | bps | 11.2 | % | 12.0 | % | (80) | bps | |||||||||||||||||||||||
Constant Currency Total Segment Operating Income | (3.5) | % | (4.5) | % |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||
(in millions) | 2024 | 2023 | $ Change | 2024 | 2023 | $ Change | |||||||||||||||||||||||||||||
Total segment operating income: | $ | 148.2 | $ | 159.9 | $ | (11.7) | $ | 257.9 | $ | 281.6 | $ | (23.7) | |||||||||||||||||||||||
Reconciling items(1) | (45.2) | (43.9) | (1.3) | (88.0) | (85.1) | (2.9) | |||||||||||||||||||||||||||||
Income from operations | 103.0 | 116.0 | (13.0) | 169.9 | 196.5 | (26.6) | |||||||||||||||||||||||||||||
Interest expense, net | (57.0) | (51.7) | (5.3) | (115.8) | (101.3) | (14.5) | |||||||||||||||||||||||||||||
Other income (expense), net | 6.4 | 7.3 | (0.9) | 9.8 | (2.8) | 12.6 | |||||||||||||||||||||||||||||
Income before income taxes | $ | 52.4 | $ | 71.6 | $ | (19.2) | $ | 63.9 | $ | 92.4 | $ | (28.5) | |||||||||||||||||||||||
(1) Includes corporate overhead and certain non-recurring and non-cash items as described in the schedules to this release. |
2024 FULL YEAR OUTLOOK | |||||||||||
(in millions, except where noted otherwise and for percentages and per share data) | |||||||||||
2024 Current Estimate(1) | 2024 Previous Estimate | 2023 As Reported(1) | |||||||||
Consolidated Net Revenues | $4,200 - $4,260 | $4,435 - $4,475 | $4,285 | ||||||||
Topgolf Revenue | Approx. $1,790 | Approx. $1,960 | $1,761 | ||||||||
Topgolf Same Venue Sales Growth | Down very high single digits to low double digits | Slightly positive to down low single digits | 1% | ||||||||
Consolidated Adjusted EBITDA(2) | $570 - $590 | $620 - $640 | $597 | ||||||||
Topgolf Adjusted EBITDA(2) | Approx. $310 | Approx. $350 | $304 | ||||||||
Non-GAAP Diluted Earnings per Share(2) | $0.11 - $0.21 | $0.31 - $0.39 | $0.45 | ||||||||
Diluted Shares Outstanding | Approx. 185 | Approx. 200 | 201 | ||||||||
(1) 2024 includes an estimated $35 million unfavorable year-over-year foreign currency translation impact on revenue | |||||||||||
(2) Non-GAAP measure. See “Additional Information and Disclosures—Non-GAAP Information” for more information and the schedules to this press release for reconciliations to the most directly comparable GAAP measure. |
2024 THIRD QUARTER OUTLOOK | |||||||||||
(in millions) | |||||||||||
Q3 2024 Estimate(1) | Q3 2023 As Reported(1) | ||||||||||
Consolidated Net Revenues | $970 - $990 | $1,041 | |||||||||
Consolidated Adjusted EBITDA | $95 - $105 | $163 | |||||||||
(1) 2024 estimates include approximately $10 million of unfavorable foreign currency impact on revenue. |
June 30, 2024 | December 31, 2023 | ||||||||||
ASSETS | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | 311.8 | $ | 393.5 | |||||||
Restricted cash | 0.7 | 0.8 | |||||||||
Accounts receivable, net | 390.4 | 200.5 | |||||||||
Inventories | 647.1 | 794.4 | |||||||||
Other current assets | 263.1 | 238.9 | |||||||||
Total current assets | 1,613.1 | 1,628.1 | |||||||||
Property, plant and equipment, net | 2,185.0 | 2,156.5 | |||||||||
Operating lease right-of-use assets, net | 1,380.1 | 1,410.1 | |||||||||
Goodwill and intangible assets, net | 3,490.1 | 3,494.2 | |||||||||
Other assets, net | 432.1 | 431.7 | |||||||||
Total assets | $ | 9,100.4 | $ | 9,120.6 | |||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||||||
Current liabilities: | |||||||||||
Accounts payable and accrued expenses | $ | 437.8 | $ | 480.5 | |||||||
Accrued employee compensation and benefits | 114.7 | 113.1 | |||||||||
Asset-based credit facilities | 45.1 | 54.7 | |||||||||
Operating lease liabilities, short-term | 87.3 | 86.4 | |||||||||
Construction advances | 15.6 | 59.3 | |||||||||
Deferred revenue | 97.4 | 110.9 | |||||||||
Other current liabilities | 39.3 | 42.7 | |||||||||
Total current liabilities | 837.2 | 947.6 | |||||||||
Long-term debt, net | 1,464.5 | 1,518.2 | |||||||||
Operating lease liabilities, long-term | 1,414.4 | 1,433.4 | |||||||||
Deemed landlord financing obligations | 1,095.7 | 980.0 | |||||||||
Deferred taxes, net | 31.3 | 36.7 | |||||||||
Other long-term liabilities | 323.8 | 326.5 | |||||||||
Total shareholders’ equity | 3,933.5 | 3,878.2 | |||||||||
Total liabilities and shareholders’ equity | $ | 9,100.4 | $ | 9,120.6 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
Net revenues: | |||||||||||||||||||||||
Products | $ | 668.5 | $ | 713.5 | $ | 1,394.6 | $ | 1,481.1 | |||||||||||||||
Services | 489.3 | 466.2 | 907.4 | 866.0 | |||||||||||||||||||
Total net revenues | 1,157.8 | 1,179.7 | 2,302.0 | 2,347.1 | |||||||||||||||||||
Costs and expenses: | |||||||||||||||||||||||
Cost of products | 375.4 | 387.9 | 788.3 | 829.9 | |||||||||||||||||||
Cost of services, excluding depreciation and amortization | 50.7 | 51.4 | 92.3 | 95.8 | |||||||||||||||||||
Other venue expense | 339.4 | 317.1 | 662.8 | 622.6 | |||||||||||||||||||
Selling, general and administrative expense | 259.5 | 279.6 | 532.5 | 548.1 | |||||||||||||||||||
Research and development expense | 27.0 | 22.0 | 50.2 | 44.8 | |||||||||||||||||||
Venue pre-opening costs | 2.8 | 5.7 | 6.0 | 9.4 | |||||||||||||||||||
Total costs and expenses | 1,054.8 | 1,063.7 | 2,132.1 | 2,150.6 | |||||||||||||||||||
Income from operations | 103.0 | 116.0 | 169.9 | 196.5 | |||||||||||||||||||
Interest expense, net | (57.0) | (51.7) | (115.8) | (101.3) | |||||||||||||||||||
Other income (expense), net | 6.4 | 7.3 | 9.8 | (2.8) | |||||||||||||||||||
Income before taxes | 52.4 | 71.6 | 63.9 | 92.4 | |||||||||||||||||||
Income tax benefit | (9.7) | (45.8) | (4.7) | (50.0) | |||||||||||||||||||
Net income | $ | 62.1 | $ | 117.4 | $ | 68.6 | $ | 142.4 | |||||||||||||||
Earnings per common share: | |||||||||||||||||||||||
Basic | $ | 0.34 | $ | 0.63 | $ | 0.37 | $ | 0.77 | |||||||||||||||
Diluted | $ | 0.32 | $ | 0.59 | $ | 0.36 | $ | 0.72 | |||||||||||||||
Weighted-average common shares outstanding: | |||||||||||||||||||||||
Basic | 183.5 | 185.2 | 183.6 | 185.2 | |||||||||||||||||||
Diluted | 199.6 | 201.3 | 199.4 | 201.4 | |||||||||||||||||||
Six Months Ended June 30, | |||||||||||
2024 | 2023 | ||||||||||
Cash flows from operating activities: | |||||||||||
Net income | $ | 68.6 | $ | 142.4 | |||||||
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | |||||||||||
Depreciation and amortization | 131.2 | 114.7 | |||||||||
Non-cash interest on financing and deemed landlord financed leases | 18.4 | 13.6 | |||||||||
Loss on disposal of long-lived assets and other | 4.9 | — | |||||||||
Amortization of debt discount and issuance costs | 2.9 | 3.4 | |||||||||
Impairment loss | 6.3 | — | |||||||||
Deferred taxes, net | (4.9) | (47.2) | |||||||||
Share-based compensation | 20.1 | 24.8 | |||||||||
Unrealized net losses on hedging instruments and foreign currency | 2.2 | 3.5 | |||||||||
Loss on debt modification | 4.7 | 10.5 | |||||||||
Other | 1.2 | 1.1 | |||||||||
Changes in assets and liabilities, net of impacts from business combinations | (104.2) | (288.6) | |||||||||
Net cash provided by (used in) operating activities | 151.4 | (21.8) | |||||||||
Cash flows from investing activities, net of impacts of business combinations: | |||||||||||
Capital expenditures | (149.3) | (262.6) | |||||||||
Asset acquisitions, net of cash acquired | — | (18.7) | |||||||||
Business combinations, net of cash acquired | (23.3) | — | |||||||||
Proceeds from government grants | — | 3.0 | |||||||||
Investment in golf-related ventures | (0.3) | (2.1) | |||||||||
Acquisition of intangible assets | (1.3) | (0.7) | |||||||||
Proceeds from sale of property and equipment | 0.2 | 0.4 | |||||||||
Net cash used in investing activities | (174.0) | (280.7) | |||||||||
Cash flows from financing activities: | |||||||||||
Repayments of long-term debt and DLF obligations | (68.1) | (782.0) | |||||||||
Proceeds from borrowings on long-term debt | — | 1,224.8 | |||||||||
Repayments of credit facilities, net | (5.4) | (229.8) | |||||||||
Debt issuance costs | (0.2) | (1.3) | |||||||||
Repayments of financing leases | (1.9) | (1.7) | |||||||||
Proceeds from lease financing | 54.6 | 111.3 | |||||||||
Exercise of stock options | — | 3.7 | |||||||||
Acquisition of treasury stock | (31.3) | (27.3) | |||||||||
Net cash (used in) provided by financing activities | (52.3) | 297.7 | |||||||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (6.8) | (2.1) | |||||||||
Net decrease in cash, cash equivalents and restricted cash | (81.7) | (6.9) | |||||||||
Cash, cash equivalents and restricted cash at beginning of period | 398.8 | 203.4 | |||||||||
Cash, cash equivalents and restricted cash at end of period | 317.1 | 196.5 | |||||||||
Less: restricted cash(1) | (5.3) | (4.7) | |||||||||
Cash and cash equivalents at end of period | $ | 311.8 | $ | 191.8 | |||||||
(1) Includes $0.7 million and $0.5 million of short-term restricted cash and $4.6 million and $4.2 million of long-term restricted cash included in other assets for the periods ended June 30, 2024 and 2023, respectively. |
Net Revenues by Category | |||||||||||||||||||||||||||||
Three Months Ended June 30, | Growth/(Decline) | Constant Currency vs. 2023(1) | |||||||||||||||||||||||||||
2024 | 2023 | Dollars | Percent | Percent | |||||||||||||||||||||||||
Net revenues: | |||||||||||||||||||||||||||||
Venues | $ | 473.7 | $ | 453.2 | $ | 20.5 | 4.5% | 4.5% | |||||||||||||||||||||
Topgolf other business lines | 20.7 | 17.6 | 3.1 | 17.6% | 17.6% | ||||||||||||||||||||||||
Golf Clubs | 310.2 | 340.3 | (30.1) | (8.8%) | (7.0%) | ||||||||||||||||||||||||
Golf Balls | 103.6 | 110.7 | (7.1) | (6.4%) | (5.8%) | ||||||||||||||||||||||||
Apparel | 145.0 | 143.5 | 1.5 | 1.0% | 2.9% | ||||||||||||||||||||||||
Gear, Accessories & Other | 104.6 | 114.4 | (9.8) | (8.6%) | (7.4%) | ||||||||||||||||||||||||
Total net revenues | $ | 1,157.8 | $ | 1,179.7 | $ | (21.9) | (1.9%) | (0.9%) | |||||||||||||||||||||
(1) See “Additional Information and Disclosures—Non-GAAP Information” for the calculation methodology of constant currency measures. | |||||||||||||||||||||||||||||
Net Revenues by Region | |||||||||||||||||||||||||||||
Three Months Ended June 30, | Growth/(Decline) | Constant Currency vs. 2023(1) | |||||||||||||||||||||||||||
2024 | 2023 | Dollars | Percent | Percent | |||||||||||||||||||||||||
Net revenues: | |||||||||||||||||||||||||||||
United States | $ | 891.3 | $ | 886.7 | $ | 4.6 | 0.5% | 0.5% | |||||||||||||||||||||
Europe | 114.1 | 120.2 | (6.1) | (5.1%) | (4.7%) | ||||||||||||||||||||||||
Asia | 109.1 | 128.2 | (19.1) | (14.9%) | (7.3%) | ||||||||||||||||||||||||
Rest of world | 43.3 | 44.6 | (1.3) | (2.9%) | (1.3%) | ||||||||||||||||||||||||
Total net revenues | $ | 1,157.8 | $ | 1,179.7 | $ | (21.9) | (1.9%) | (0.9%) | |||||||||||||||||||||
(1) See “Additional Information and Disclosures—Non-GAAP Information” for the calculation methodology of constant currency measures. | |||||||||||||||||||||||||||||
Operating Segment Information | |||||||||||||||||||||||||||||
Three Months Ended June 30, | Growth/(Decline) | Constant Currency vs. 2023(1) | |||||||||||||||||||||||||||
2024 | 2023 | Dollars | Percent | Percent | |||||||||||||||||||||||||
Net revenues: | |||||||||||||||||||||||||||||
Topgolf | $ | 494.4 | $ | 470.8 | $ | 23.6 | 5.0% | 5.0% | |||||||||||||||||||||
Golf Equipment | 413.8 | 451.0 | (37.2) | (8.2%) | (6.7%) | ||||||||||||||||||||||||
Active Lifestyle | 249.6 | 257.9 | (8.3) | (3.2%) | (1.7%) | ||||||||||||||||||||||||
Total net revenues | $ | 1,157.8 | $ | 1,179.7 | $ | (21.9) | (1.9%) | (0.9%) | |||||||||||||||||||||
Segment operating income: | |||||||||||||||||||||||||||||
Topgolf | $ | 56.1 | $ | 44.0 | $ | 12.1 | 27.5% | ||||||||||||||||||||||
Golf Equipment | 77.4 | 96.4 | (19.0) | (19.7%) | |||||||||||||||||||||||||
Active Lifestyle | 14.7 | 19.5 | (4.8) | (24.6%) | |||||||||||||||||||||||||
Total segment operating income | 148.2 | 159.9 | (11.7) | (7.3%) | |||||||||||||||||||||||||
Corporate G&A and other(2) | (45.2) | (43.9) | (1.3) | 3.0% | |||||||||||||||||||||||||
Total operating income | 103.0 | 116.0 | (13.0) | (11.2%) | |||||||||||||||||||||||||
Interest expense, net | (57.0) | (51.7) | (5.3) | 10.3% | |||||||||||||||||||||||||
Other income, net | 6.4 | 7.3 | (0.9) | (12.3%) | |||||||||||||||||||||||||
Total income before income taxes | $ | 52.4 | $ | 71.6 | $ | (19.2) | (26.8%) | ||||||||||||||||||||||
(1) See “Additional Information and Disclosures—Non-GAAP Information” for the calculation methodology of constant currency measures. | |||||||||||||||||||||||||||||
(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) | Constant Currency vs. 2023(1) | |||||||||||||||||||||||||||
2024 | 2023 | Dollars | Percent | Percent | |||||||||||||||||||||||||
Net revenues: | |||||||||||||||||||||||||||||
Venues | $ | 879.4 | $ | 839.9 | $ | 39.5 | 4.7% | 4.6% | |||||||||||||||||||||
Topgolf other business lines | 37.8 | 34.4 | 3.4 | 9.9% | 9.6% | ||||||||||||||||||||||||
Golf Clubs | 656.1 | 691.1 | (35.0) | (5.1%) | (3.4%) | ||||||||||||||||||||||||
Golf Balls | 207.6 | 203.6 | 4.0 | 2.0% | 2.5% | ||||||||||||||||||||||||
Apparel | 304.6 | 319.6 | (15.0) | (4.7%) | (3.2%) | ||||||||||||||||||||||||
Gear, Accessories & Other | 216.5 | 258.5 | (42.0) | (16.2%) | (15.6%) | ||||||||||||||||||||||||
Total net revenues | $ | 2,302.0 | $ | 2,347.1 | $ | (45.1) | (1.9%) | (1.1%) | |||||||||||||||||||||
(1) Calculated by applying 2023 exchange rates to 2024 reported sales in regions outside the U.S. | |||||||||||||||||||||||||||||
Net Revenues by Region | |||||||||||||||||||||||||||||
Six Months Ended June 30, | Growth/(Decline) | Constant Currency vs. 2023(1) | |||||||||||||||||||||||||||
2024 | 2023 | Dollars | Percent | Percent | |||||||||||||||||||||||||
Net revenues: | |||||||||||||||||||||||||||||
United States | $ | 1,720.3 | $ | 1,697.8 | $ | 22.5 | 1.3% | 1.3% | |||||||||||||||||||||
Europe | 255.5 | 273.8 | (18.3) | (6.7%) | (7.8%) | ||||||||||||||||||||||||
Asia | 236.7 | 288.4 | (51.7) | (17.9%) | (10.8%) | ||||||||||||||||||||||||
Rest of world | 89.5 | 87.1 | 2.4 | 2.8% | 4.1% | ||||||||||||||||||||||||
Total net revenues | $ | 2,302.0 | $ | 2,347.1 | $ | (45.1) | (1.9%) | (1.1%) | |||||||||||||||||||||
(1) Calculated by applying 2023 exchange rates to 2024 reported sales in regions outside the U.S. | |||||||||||||||||||||||||||||
Operating Segment Information | |||||||||||||||||||||||||||||
Six Months Ended June 30, | Growth/(Decline) | Constant Currency vs. 2023(1) | |||||||||||||||||||||||||||
2024 | 2023 | Dollars | Percent | Percent | |||||||||||||||||||||||||
Net revenues: | |||||||||||||||||||||||||||||
Topgolf | $ | 917.2 | $ | 874.3 | $ | 42.9 | 4.9% | 4.8% | |||||||||||||||||||||
Golf Equipment | 863.7 | 894.7 | (31.0) | (3.5%) | (2.0%) | ||||||||||||||||||||||||
Active Lifestyle | 521.1 | 578.1 | (57.0) | (9.9%) | (8.7%) | ||||||||||||||||||||||||
Total net revenues | $ | 2,302.0 | $ | 2,347.1 | $ | (45.1) | (1.9%) | (1.1%) | |||||||||||||||||||||
Segment operating income: | |||||||||||||||||||||||||||||
Topgolf | $ | 59.0 | $ | 46.8 | $ | 12.2 | 26.1% | ||||||||||||||||||||||
Golf Equipment | 159.5 | 178.0 | (18.5) | (10.4%) | |||||||||||||||||||||||||
Active Lifestyle | 39.4 | 56.8 | (17.4) | (30.6%) | |||||||||||||||||||||||||
Total segment operating income | 257.9 | 281.6 | (23.7) | (8.4%) | |||||||||||||||||||||||||
Corporate costs and expenses(2) | (88.0) | (85.1) | (2.9) | 3.4% | |||||||||||||||||||||||||
Total operating income | 169.9 | 196.5 | (26.6) | (13.5%) | |||||||||||||||||||||||||
Interest expense, net | (115.8) | (101.3) | (14.5) | 14.3% | |||||||||||||||||||||||||
Other income (expense), net | 9.8 | (2.8) | 12.6 | (450.0%) | |||||||||||||||||||||||||
Total income before income taxes | $ | 63.9 | $ | 92.4 | $ | (28.5) | (30.8%) | ||||||||||||||||||||||
(1) Calculated by applying 2023 exchange rates to 2024 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, | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2024 | 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
GAAP | Non-Cash Amortization(1) | Non-Recurring Items(2) | Tax Valuation Allowance | Non- GAAP | GAAP | Non-Cash Amortization(1) | Non-Recurring Items(3) | Tax Valuation Allowance(4) | Non- GAAP | ||||||||||||||||||||||||||||||||||||||||||||||||||
Income from operations | $ | 103.0 | $ | (2.9) | $ | (15.9) | $ | — | $ | 121.8 | $ | 116.0 | $ | (4.1) | $ | (7.6) | $ | — | $ | 127.7 | |||||||||||||||||||||||||||||||||||||||
Net income | $ | 62.1 | $ | (2.2) | $ | (18.8) | $ | — | $ | 83.1 | $ | 117.4 | $ | (3.1) | $ | (5.9) | $ | 50.8 | $ | 75.6 | |||||||||||||||||||||||||||||||||||||||
Earnings per share - diluted (5) | $ | 0.32 | $ | (0.01) | $ | (0.09) | $ | — | $ | 0.42 | $ | 0.59 | $ | (0.01) | $ | (0.03) | $ | 0.25 | $ | 0.38 | |||||||||||||||||||||||||||||||||||||||
(1) Includes the amortization of acquired intangible assets, including customer and distributor relationships, reacquired distribution rights and acquired developed technology related to our merger with Topgolf, acquisitions of Jack Wolfskin, TravisMathew and OGIO, and reacquisition of distribution rights in the Korea apparel market (collectively, the “Acquisitions”) . While the amortization of acquired intangible assets is excluded from our calculation of non-GAAP net income, the revenue, operating costs and acquired assets that contribute to the revenue generation for these acquired companies is reflected in our calculation of non-GAAP net income. Starting in the second quarter of 2024, the depreciation and amortization associated with purchase accounting adjustments stemming from these acquisitions is excluded from our non-GAAP adjustments. As such, prior period amounts have been recast in order to conform with the current period presentation. For the three months ended June 30, 2024 and 2023, non-cash depreciation and amortization related to these purchase accounting adjustments was $1.4 million and $2.9 million, respectively. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(2) Primarily includes $11.7 million of restructuring and reorganization charges, $3.4 million in currency translation adjustments reclassified into earnings due to the dissolution of the Jack Wolfskin Russia entity, $3.4 million of charges related to the impairment and abandonment of the Shankstars media game in the Topgolf segment, and $1.1 million in IT integration charges including costs associated with the implementation of a new cloud based HRM system. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(3) Primarily includes $3.1 million in restructuring and reorganization charges in our Active Lifestyle operating segment and $2.2 million in IT integration and implementation costs stemming from acquisitions. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(4) Release of tax valuation allowances recorded in connection with the merger with Topgolf. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(5) Diluted earnings per share calculated using the if-converted method, which excludes periodic interest expense related to the 2020 convertible notes from the calculation of net income for the purpose of calculating diluted earnings per share. |
Six months ended June 30, | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2024 | 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
GAAP | Non-Cash Amortization(1) | Non-Recurring Items(2) | Tax Valuation Allowance(3) | Non- GAAP | GAAP | Non-Cash Amortization(1) | Non-Recurring Items(4) | Tax Valuation Allowance(3) | Non- GAAP | ||||||||||||||||||||||||||||||||||||||||||||||||||
Income from operations | $ | 169.9 | $ | (5.8) | $ | (18.7) | $ | — | $ | 194.4 | $ | 196.5 | $ | (8.4) | $ | (10.8) | $ | — | $ | 215.7 | |||||||||||||||||||||||||||||||||||||||
Net income | $ | 68.6 | $ | (4.4) | $ | (24.5) | $ | — | $ | 97.5 | $ | 142.4 | $ | (6.4) | $ | (16.3) | $ | 59.1 | $ | 106.0 | |||||||||||||||||||||||||||||||||||||||
Earnings per share - diluted (5) | $ | 0.36 | $ | (0.02) | $ | (0.12) | $ | — | $ | 0.51 | $ | 0.72 | $ | (0.03) | $ | (0.08) | $ | 0.29 | $ | 0.54 | |||||||||||||||||||||||||||||||||||||||
(1) Includes the amortization of acquired intangible assets, including customer and distributor relationships, reacquired distribution rights and acquired developed technology related to our merger with Topgolf, acquisitions of Jack Wolfskin, TravisMathew and OGIO, and reacquisition of distribution rights in the Korea apparel market (collectively, the “Acquisitions”). While the amortization of acquired intangible assets is excluded from our calculation of non-GAAP net income, the revenue, operating costs and associated acquired assets that contribute to the revenue generation associated with these acquired companies is reflected in our calculation of non-GAAP net income. Starting in the second quarter of 2024, the depreciation and amortization associated with purchase accounting adjustments stemming from these acquisitions is excluded from our non-GAAP adjustments. As such, prior period amounts have been recast in order to conform with the current period presentation. For the six months ended June 30, 2024 and 2023, non-cash depreciation and amortization related to these purchase accounting adjustments was $3.2 million and $6.7 million, respectively. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(2) Primarily includes $11.8 million of restructuring and reorganization charges, $4.7 million in charges related to our 2024 debt repricing, $3.4 million in currency translation adjustments reclassified into earnings due to the dissolution of the Jack Wolfskin Russia entity, $3.4 million of charges related to the impairment and abandonment of the Shankstars media game in the Topgolf segment, $1.2 million in IT costs related to a 2023 cybersecurity incident, and $1.8 million in IT integration charges including costs associated with the implementation of a new cloud based HRM system. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(3) Related to the release of tax valuation allowances recorded in connection with the merger with Topgolf. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(4) 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 the acquisitions of Jack Wolfskin, TravisMathew and Topgolf, and $3.1 million in restructuring and reorganization charges in our Active Lifestyle operating segment. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(5) Diluted earnings per share calculated using the if-converted method, which excludes periodic interest expense related to the 2020 convertible notes from the calculation of net income for the purpose of calculating diluted earnings per share. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2024 Trailing Twelve Month Adjusted EBITDA | 2023 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, | ||||||||||||||||||||||||||||||||||||||||||||||||||||
2023 | 2023 | 2024 | 2024 | Total | 2022 | 2022 | 2023 | 2023 | Total | ||||||||||||||||||||||||||||||||||||||||||||||||||
Net income (loss) | $ | 29.7 | $ | (77.1) | $ | 6.5 | $ | 62.1 | $ | 21.2 | $ | 38.5 | $ | (72.7) | $ | 25.0 | $ | 117.4 | $ | 108.2 | |||||||||||||||||||||||||||||||||||||||
Interest expense, net | 52.3 | 56.6 | 58.8 | 57.0 | 224.7 | 36.4 | 42.5 | 49.6 | 51.7 | 180.2 | |||||||||||||||||||||||||||||||||||||||||||||||||
Income tax (benefit) provision | (3.0) | (7.2) | 5.0 | (9.7) | (14.9) | 0.3 | (3.5) | (4.2) | (45.8) | (53.2) | |||||||||||||||||||||||||||||||||||||||||||||||||
Non-cash depreciation and amortization expense | 61.0 | 64.0 | 65.4 | 65.8 | 256.2 | 48.4 | 53.0 | 56.1 | 58.6 | 216.1 | |||||||||||||||||||||||||||||||||||||||||||||||||
Non-cash stock compensation and stock warrant expense, net | 13.2 | 8.4 | 14.2 | 7.0 | 42.8 | 10.3 | 9.7 | 12.5 | 12.3 | 44.8 | |||||||||||||||||||||||||||||||||||||||||||||||||
Non-cash lease amortization expense | 4.5 | 4.4 | 3.5 | 3.6 | 16.0 | 4.4 | 4.5 | 4.6 | 4.4 | 17.9 | |||||||||||||||||||||||||||||||||||||||||||||||||
Non-recurring items, before taxes(1) | 5.6 | 20.7 | 7.5 | 19.8 | 53.6 | 6.1 | 3.1 | 13.7 | 7.6 | 30.5 | |||||||||||||||||||||||||||||||||||||||||||||||||
Adjusted EBITDA | $ | 163.3 | $ | 69.8 | $ | 160.9 | $ | 205.6 | $ | 599.6 | $ | 144.4 | $ | 36.6 | $ | 157.3 | $ | 206.2 | $ | 544.5 | |||||||||||||||||||||||||||||||||||||||
(1) In 2024, amounts include restructuring and reorganization charges in our Active Lifestyle segment, charges related to the 2024 debt repricing, currency translation adjustments reclassified into earnings due to the dissolution of the Jack Wolfskin Russia entity, charges related to the impairment and abandonment of the Shankstars media game, IT costs related to a 2023 cybersecurity incident, and IT integration and implementation costs associated with the implementation of a new cloud based HRM system. In 2023, amounts include charges related to the impairment and abandonment of the Shankstars media game, charges in connection with the 2023 debt modification, IT integration and implementation costs stemming primarily from the merger with Topgolf, restructuring and reorganization charges in our Topgolf and Active Lifestyle segments, and costs related to a cybersecurity incident. In 2022, amounts include non-cash asset write-downs associated with the Jack Wolfskin retail operations in Russia and the closure of a pre-merger Topgolf concept location, both due to business decisions to exit those businesses, costs associated with the implementation of new IT systems for Topgolf, and legal costs and credit agency fees related to a postponed debt refinancing. |
Reconciliation of Consolidated Non-GAAP Adjusted Free Cash Flow | Six Months Ended June 30, | ||||||||||
2024 | 2023 | ||||||||||
GAAP cash flows provided by (used in) operations (1) | $ | 151.4 | $ | (21.8) | |||||||
Less: capital expenditures (1) | (149.3) | (262.6) | |||||||||
Add: proceeds from lease financing(1) | 54.6 | 111.3 | |||||||||
Consolidated Non-GAAP Adjusted Free Cash Flow | $ | 56.7 | $ | (173.1) | |||||||
(1) Source: Condensed consolidated statement of cash flows within the Company’s quarterly report on Form 10-Q. | |||||||||||
Reconciliation of Topgolf Adjusted Segment EBITDA | Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
Topgolf Segment operating income(1): | $ | 56.1 | $ | 44.0 | $ | 59.0 | $ | 46.8 | |||||||||||||||
Non-GAAP depreciation and amortization expense | 49.1 | 39.6 | 97.6 | 76.3 | |||||||||||||||||||
Non-Cash stock compensation expense | 1.2 | 4.2 | 6.4 | 8.3 | |||||||||||||||||||
Non-cash lease amortization expense | 3.1 | 4.3 | 6.3 | 8.8 | |||||||||||||||||||
Topgolf Adjusted Segment EBITDA | $ | 109.5 | $ | 92.1 | $ | 169.3 | $ | 140.2 | |||||||||||||||
(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. |
Reconciliation of Topgolf Adjusted Segment EBITDA | Twelve Months Ended December 31, | ||||
2023 | |||||
Topgolf Segment operating income(1): | $ | 108.8 | |||
Non-GAAP depreciation and amortization expense | 164.9 | ||||
Non-cash stock compensation expense | 12.9 | ||||
Non-cash lease amortization expense | 17.1 | ||||
Other expense, net | 0.6 | ||||
Topgolf Adjusted Segment EBITDA | $ | 304.3 | |||
(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. |