Exhibit 99.1
Callaway Golf Company Releases
Preliminary First Quarter 2006 Net Sales and Earnings
CARLSBAD, Calif.--(BUSINESS WIRE)--April 11, 2006--Callaway Golf
Company (NYSE:ELY) today announced that, based on current information,
the Company estimates net sales for the first quarter ended March 31,
2006 of approximately $300 million, with corresponding earnings per
diluted share ranging from $0.31 to $0.33. Excluding after-tax charges
for employee equity-based compensation of approximately $0.02 per
diluted share associated with FAS 123R, and $0.01 per diluted share
associated with the consolidation of the Top-Flite and Callaway Golf
operations, pro forma earnings per diluted share are estimated to
range from $0.34 to $0.36. For 2005, the Company reported net sales of
$300 million, fully diluted earnings per share of $0.27 and pro forma
fully diluted earnings per share of $0.30, which excludes after-tax
Top-Flite integration charges of $0.03 for that period.
"We are pleased with our preliminary results for the first
quarter, which exceeded our internal targets and achieved the second
highest level of revenues for any first quarter in the Company's
history. In terms of profitability, our pro forma earnings for the
first quarter are estimated to be 13% - 20% higher than pro forma
earnings last year," commented George Fellows, President and CEO. "We
are particularly pleased with these results given the later timing of
our 2006 new product introductions compared to last year, which along
with previously announced additional new product introductions should
positively impact second quarter growth," continued Mr. Fellows.
"Despite these timing differences, we were able to achieve significant
pro forma earnings growth in the first quarter, primarily due to lower
operating expenses that resulted from our third quarter 2005 expense
reduction initiatives. Finally, although early in the season, we're
seeing strong initial consumer acceptance and sell-through at retail,
and combined with improved supply chain management, we are optimistic
about significant improvements in 2006 earnings compared to last year
and believe these preliminary results are a good start in achieving
our longer-term targets."
The Company will release actual first quarter financial results on
April 26, 2006. A conference call and webcast will also take place at
that time.
Disclaimer: Investors should be aware that the Company has not yet
finalized its results for the first quarter and that the Company's
"preliminary" estimates of net sales and earnings for the first
quarter reflect management's estimates based upon the information
available at the time made. These estimates could differ materially
from the Company's actual results if the information on which the
estimates were based ultimately proves to be incorrect or incomplete.
In addition, statements used in this press release that relate to
future plans, events, financial results, performance or prospects,
including statements relating to anticipated second quarter growth,
the Company's optimism about improvements in 2006 earnings and
achievement of longer-term targets, are forward-looking statements as
defined under the Private Securities Litigation Reform Act of 1995.
These estimates and statements are based upon current information and
expectations. Actual results may differ materially from those
anticipated as a result of certain risks and uncertainties, including
but not limited to, market acceptance of current and future products,
adverse market and economic conditions, adverse weather conditions and
seasonality, any rule changes or other actions taken by the USGA or
other golf association that could have an adverse impact upon demand
for the Company's products, a decrease in participation levels in golf
and the effect of terrorist activity, armed conflict, natural
disasters or pandemic diseases on the economy generally, on the level
of demand for the Company's products or on the Company's ability to
manage its supply and delivery logistics in such an environment. For
additional information concerning these and other risks and
uncertainties that could affect these statements and the Company's
business, see Part I, Item 1A of the Company's Annual Report on Form
10-K for the year ended December 31, 2005, as well as other risks and
uncertainties detailed from time to time in the Company's reports on
Forms 10-K, 10-Q and 8-K subsequently filed from time to time with the
Securities and Exchange Commission. Readers are cautioned not to place
undue reliance on these forward-looking statements, which speak only
as of the date hereof. The Company undertakes no obligation to
republish revised forward-looking statements to reflect events or
circumstances after the date hereof or to reflect the occurrence of
unanticipated events.
Regulation G: The preliminary financial results reported in this
press release have been prepared in accordance with accounting
principles generally accepted in the United States ("GAAP"). In
addition to the GAAP results, the Company has also provided additional
information concerning its preliminary results, which includes certain
financial measures not prepared in accordance with GAAP. The non-GAAP
financial measures included in this press release exclude charges
associated with employee equity based compensation and the integration
of the Callaway Golf Company and Top-Flite Golf Company operations.
These non-GAAP financial measures should not be considered a
substitute for any measure derived in accordance with GAAP. These
non-GAAP financial measures may also be inconsistent with the manner
in which similar measures are derived or used by other companies.
Management believes that the presentation of such non-GAAP financial
measures, when considered in conjunction with the most directly
comparable GAAP financial measures, provides additional useful
information concerning the Company's operations without these charges.
The Company has provided reconciling information in the text of this
press release and in the attachment to this release.
Through an unwavering commitment to innovation, Callaway Golf
Company creates products and services designed to make every golfer a
better golfer. Callaway Golf Company manufactures and sells golf clubs
and golf balls, and sells golf accessories, under the Callaway
Golf(R), Top-Flite(R), Odyssey(R) and Ben Hogan(R) brands. For more
information visit www.callawaygolf.com.
Callaway Golf Company
Supplemental Financial Information
(Unaudited)
Quarter Ended
March 31,
2006
--------------
Earnings per
share
--------------
Estimated $0.31 - $0.33
Employee equity based compensation 0.02
Consolidation of Top-Flite and Callaway Golf
operations 0.01
--------------
Pro forma $0.34 - $0.36
==============
Quarter Ended
March 31,
2005
--------------
Earnings per
share
--------------
As reported $0.27
Employee equity based compensation -
Consolidation of Top-Flite and Callaway Golf
operations 0.03
--------------
Pro forma $0.30
==============
CONTACT: Callaway Golf Company
Brad Holiday/Patrick Burke/Larry Dorman, 760-931-1771