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Form 10-Q
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ý
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Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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o
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Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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Callaway Golf Company
(Exact name of registrant as specified in its charter)
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Delaware
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95-3797580
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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Large accelerated filer
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o
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Accelerated filer
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ý
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Non-accelerated filer
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o
(Do not check if a smaller reporting company)
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Smaller reporting company
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o
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Item 1.
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Item 2.
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Item 3.
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Item 4.
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Item 1.
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Item 1A.
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Item 2.
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Item 3.
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Item 4.
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Item 5.
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Item 6.
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September 30,
2013 |
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December 31,
2012 |
||||
ASSETS
|
|
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|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
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$
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37,399
|
|
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$
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52,003
|
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Accounts receivable, net
|
157,371
|
|
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91,072
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||
Inventories
|
190,870
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|
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211,734
|
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Other current assets
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24,465
|
|
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29,791
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Assets held for sale
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—
|
|
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2,396
|
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||
Total current assets
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410,105
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|
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386,996
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Property, plant and equipment, net
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73,957
|
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89,093
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Intangible assets, net
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88,922
|
|
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89,189
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Goodwill
|
29,060
|
|
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29,034
|
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Other assets
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48,865
|
|
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43,324
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||
Total assets
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$
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650,909
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$
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637,636
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LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
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||||
Current liabilities:
|
|
|
|
||||
Accounts payable and accrued expenses
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$
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123,672
|
|
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$
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129,021
|
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Accrued employee compensation and benefits
|
26,759
|
|
|
20,649
|
|
||
Accrued warranty expense
|
6,766
|
|
|
7,539
|
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||
Other current liabilities
|
5,810
|
|
|
4,357
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||
Total current liabilities
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163,007
|
|
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161,566
|
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||
Long-term liabilities:
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|
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||||
Income tax payable
|
6,192
|
|
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6,565
|
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||
Deferred taxes, net
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33,849
|
|
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33,533
|
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||
Convertible notes, net (Note 3)
|
107,656
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|
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107,133
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|
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Long-term incentive compensation and other
|
5,451
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|
7,131
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Commitments and contingencies (Note 13)
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|
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Shareholders’ equity:
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Preferred stock, $0.01 par value, 3,000,000 shares authorized, 183,796 and 417,639 shares issued and outstanding at September 30, 2013 and December 31, 2012, respectively
|
2
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4
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Common stock, $0.01 par value, 240,000,000 shares authorized, 75,712,132 and 72,264,020 shares issued at September 30, 2013 and December 31, 2012, respectively
|
757
|
|
|
723
|
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Additional paid-in capital
|
205,714
|
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204,510
|
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||
Retained earnings
|
138,960
|
|
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113,831
|
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Accumulated other comprehensive income
|
2,884
|
|
|
14,770
|
|
||
Less: Common stock held in treasury, at cost, 1,182,670 and 1,267,436 shares at September 30, 2013 and December 31, 2012, respectively
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(13,563
|
)
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(14,848
|
)
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||
Total Callaway Golf Company shareholders’ equity
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334,754
|
|
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318,990
|
|
||
Non-controlling interest in consolidated entity (Note 10)
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—
|
|
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2,718
|
|
||
Total shareholders’ equity
|
334,754
|
|
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321,708
|
|
||
Total liabilities and shareholders’ equity
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$
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650,909
|
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$
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637,636
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Three Months Ended
September 30, |
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Nine Months Ended
September 30, |
||||||||||||
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2013
|
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2012
|
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2013
|
|
2012
|
||||||||
Net sales
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$
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178,229
|
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$
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147,906
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$
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715,631
|
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$
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714,127
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Cost of sales
|
118,820
|
|
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144,106
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|
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430,134
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475,303
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|
||||
Gross profit
|
59,409
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3,800
|
|
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285,497
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|
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238,824
|
|
||||
Operating expenses:
|
|
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|
|
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||||||||
Selling expense
|
49,871
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60,273
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179,851
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212,822
|
|
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General and administrative expense
|
18,870
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18,238
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|
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48,626
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|
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48,918
|
|
||||
Research and development expense
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7,689
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7,978
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22,435
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22,381
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||||
Total operating expenses
|
76,430
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86,489
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250,912
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284,121
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Income (loss) from operations
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(17,021
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)
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(82,689
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)
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34,585
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(45,297
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)
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||||
Other income (expense), net
|
(3,095
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)
|
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(3,359
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)
|
|
934
|
|
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(4,246
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)
|
||||
Income (loss) before income taxes
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(20,116
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)
|
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(86,048
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)
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35,519
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(49,543
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)
|
||||
Income tax provision
|
1,037
|
|
|
750
|
|
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4,941
|
|
|
2,654
|
|
||||
Net income (loss)
|
(21,153
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)
|
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(86,798
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)
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30,578
|
|
|
(52,197
|
)
|
||||
Dividends on convertible preferred stock
|
1,766
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|
|
2,414
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3,332
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|
|
7,664
|
|
||||
Net income (loss) allocable to common shareholders
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$
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(22,919
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)
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$
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(89,212
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)
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$
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27,246
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$
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(59,861
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)
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Earnings (loss) per common share:
|
|
|
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|
|
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||||||||
Basic
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$
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(0.32
|
)
|
|
$
|
(1.33
|
)
|
|
$
|
0.38
|
|
|
$
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(0.91
|
)
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Diluted
|
$
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(0.32
|
)
|
|
$
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(1.33
|
)
|
|
$
|
0.36
|
|
|
$
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(0.91
|
)
|
Weighted-average common shares outstanding:
|
|
|
|
|
|
|
|
||||||||
Basic
|
72,649
|
|
|
67,162
|
|
|
71,613
|
|
|
65,740
|
|
||||
Diluted
|
72,649
|
|
|
67,162
|
|
|
86,870
|
|
|
65,740
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
Net income (loss)
|
$
|
(21,153
|
)
|
|
$
|
(86,798
|
)
|
|
$
|
30,578
|
|
|
$
|
(52,197
|
)
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation adjustments
|
1,948
|
|
|
4,168
|
|
|
(11,886
|
)
|
|
3,100
|
|
||||
Comprehensive income (loss)
|
$
|
(19,205
|
)
|
|
$
|
(82,630
|
)
|
|
$
|
18,692
|
|
|
$
|
(49,097
|
)
|
|
Nine Months Ended
September 30, |
||||||
|
2013
|
|
2012
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net income (loss)
|
$
|
30,578
|
|
|
$
|
(52,197
|
)
|
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
|
|
|
|
||||
Depreciation and amortization
|
19,693
|
|
|
26,576
|
|
||
Impairment charges
|
—
|
|
|
17,056
|
|
||
Deferred taxes
|
303
|
|
|
(1,397
|
)
|
||
Non-cash share-based compensation
|
2,592
|
|
|
2,482
|
|
||
Loss (gain) on disposal of long-lived assets
|
2,428
|
|
|
(1,521
|
)
|
||
Gain on sale of intangible assets
|
—
|
|
|
(6,602
|
)
|
||
Discount amortization on convertible notes
|
523
|
|
|
27
|
|
||
Change in assets and liabilities:
|
|
|
|
||||
Accounts receivable, net
|
(69,122
|
)
|
|
(27,093
|
)
|
||
Inventories
|
14,132
|
|
|
46,984
|
|
||
Other assets
|
2,013
|
|
|
1,835
|
|
||
Accounts payable and accrued expenses
|
(151
|
)
|
|
(32,310
|
)
|
||
Accrued employee compensation and benefits
|
6,614
|
|
|
(3,367
|
)
|
||
Accrued warranty expense
|
(773
|
)
|
|
(7
|
)
|
||
Other liabilities
|
(1,272
|
)
|
|
283
|
|
||
Net cash provided by (used in) operating activities
|
7,558
|
|
|
(29,251
|
)
|
||
Cash flows from investing activities:
|
|
|
|
||||
Capital expenditures
|
(8,920
|
)
|
|
(16,001
|
)
|
||
Proceeds from sales of property and equipment
|
4,025
|
|
|
324
|
|
||
Net proceeds from sales of intangible assets
|
—
|
|
|
26,861
|
|
||
Investment in golf related ventures
|
(7,189
|
)
|
|
—
|
|
||
Net cash (used in) provided by investing activities
|
(12,084
|
)
|
|
11,184
|
|
||
Cash flows from financing activities:
|
|
|
|
||||
Dividends paid
|
(4,882
|
)
|
|
(9,526
|
)
|
||
Equity issuance costs
|
(274
|
)
|
|
—
|
|
||
Proceeds from issuance of convertible notes
|
—
|
|
|
46,819
|
|
||
Debt issuance costs
|
—
|
|
|
(3,534
|
)
|
||
Other financing activities
|
—
|
|
|
40
|
|
||
Net cash (used in) provided by financing activities
|
(5,156
|
)
|
|
33,799
|
|
||
Effect of exchange rate changes on cash and cash equivalents
|
(4,922
|
)
|
|
384
|
|
||
Net (decrease) increase in cash and cash equivalents
|
(14,604
|
)
|
|
16,116
|
|
||
Cash and cash equivalents at beginning of period
|
52,003
|
|
|
43,023
|
|
||
Cash and cash equivalents at end of period
|
$
|
37,399
|
|
|
$
|
59,139
|
|
Supplemental disclosures:
|
|
|
|
||||
Cash paid for income taxes, net
|
$
|
4,401
|
|
|
$
|
1,709
|
|
Cash paid for interest and fees
|
$
|
4,336
|
|
|
$
|
7,148
|
|
Noncash investing and financing activities:
|
|
|
|
||||
Dividends payable
|
$
|
57
|
|
|
$
|
131
|
|
Issuance of convertible notes in exchange for preferred stock
|
$
|
—
|
|
|
$
|
60,078
|
|
Issuance of treasury stock from the settlement of compensatory stock awards
|
$
|
1,649
|
|
|
$
|
3,641
|
|
Acquisition of treasury stock for minimum statutory withholding taxes
|
$
|
(364
|
)
|
|
$
|
(771
|
)
|
Accrued capital expenditures at period end
|
$
|
1,936
|
|
|
$
|
76
|
|
Stock dividends issued in preferred stock exchange
|
$
|
544
|
|
|
$
|
—
|
|
|
Callaway Golf Shareholders
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||||
|
Preferred Stock
|
|
Common Stock
|
|
Additional
Paid-in
Capital
|
|
Retained
Earnings
|
|
Accumulated
Other
Comprehensive
Income
|
|
Treasury Stock
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
|
|
|
Shares
|
|
Amount
|
|
Non-Controlling Interest
|
|
Total
|
||||||||||||||||||||||||||
Balance at December 31, 2012
|
418
|
|
|
$
|
4
|
|
|
72,264
|
|
|
$
|
723
|
|
|
$
|
204,510
|
|
|
$
|
113,831
|
|
|
|
$
|
14,770
|
|
|
|
(1,267
|
)
|
|
$
|
(14,848
|
)
|
|
|
$
|
2,718
|
|
|
|
$
|
321,708
|
|
Acquisition of treasury stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
|
(56
|
)
|
|
(364
|
)
|
|
|
—
|
|
|
|
(364
|
)
|
||||||||
Issuance of treasury stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,649
|
)
|
|
—
|
|
|
|
—
|
|
|
|
140
|
|
|
1,649
|
|
|
|
—
|
|
|
|
—
|
|
||||||||
Preferred stock to common stock exchange
|
(234)
|
|
|
(2
|
)
|
|
3,317
|
|
|
33
|
|
|
(31
|
)
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
||||||||
Equity issuance costs
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(274
|
)
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
|
(274
|
)
|
||||||||
Compensatory stock and stock options
|
—
|
|
|
—
|
|
|
56
|
|
|
—
|
|
|
2,592
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
|
2,592
|
|
||||||||
Stock dividends
|
—
|
|
|
—
|
|
|
75
|
|
|
1
|
|
|
566
|
|
|
(567
|
)
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
||||||||
Cash dividends
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,882
|
)
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
|
(4,882
|
)
|
||||||||
Equity adjustment from foreign currency translation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
(11,886
|
)
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
|
(11,886
|
)
|
||||||||
Changes in non-controlling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
|
(2,718
|
)
|
|
|
(2,718
|
)
|
||||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
30,578
|
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
|
30,578
|
|
||||||||
Balance at September 30, 2013
|
184
|
|
|
$
|
2
|
|
|
75,712
|
|
|
$
|
757
|
|
|
$
|
205,714
|
|
|
$
|
138,960
|
|
|
|
$
|
2,884
|
|
|
|
(1,183
|
)
|
|
$
|
(13,563
|
)
|
|
|
$
|
—
|
|
|
|
$
|
334,754
|
|
|
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
|
|
Charges to cost and expense
|
677
|
|
|
997
|
|
|
3,324
|
|
|
4,998
|
|
||||
Non-cash items
|
—
|
|
|
(412
|
)
|
|
(3,324
|
)
|
|
(3,736
|
)
|
||||
Cash payments
|
(1,652
|
)
|
|
(1,071
|
)
|
|
—
|
|
|
(2,723
|
)
|
||||
Restructuring payable balance, June 30, 2013
|
$
|
1,100
|
|
|
$
|
107
|
|
|
$
|
—
|
|
|
$
|
1,207
|
|
Charges to cost and expense
|
602
|
|
|
1,256
|
|
|
—
|
|
|
1,858
|
|
||||
Non-cash items
|
—
|
|
|
(675
|
)
|
|
—
|
|
|
(675
|
)
|
||||
Cash payments
|
(669
|
)
|
|
(45
|
)
|
|
—
|
|
|
(714
|
)
|
||||
Restructuring payable balance, September 30, 2013
|
$
|
1,033
|
|
|
$
|
643
|
|
|
$
|
—
|
|
|
$
|
1,676
|
|
Total future estimated charges as of September 30, 2013
|
$
|
700
|
|
|
$
|
2,300
|
|
|
$
|
—
|
|
|
$
|
3,000
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
Earnings (loss) per common share—basic
|
|
|
|
|
|
|
|
||||||||
Net income (loss)
|
$
|
(21,153
|
)
|
|
$
|
(86,798
|
)
|
|
$
|
30,578
|
|
|
$
|
(52,197
|
)
|
Less: Preferred stock dividends
|
1,766
|
|
|
2,414
|
|
|
3,332
|
|
|
7,664
|
|
||||
Net income (loss) allocable to common shareholders
|
$
|
(22,919
|
)
|
|
$
|
(89,212
|
)
|
|
$
|
27,246
|
|
|
$
|
(59,861
|
)
|
Weighted-average common shares outstanding—basic
|
72,649
|
|
|
67,162
|
|
|
71,613
|
|
|
65,740
|
|
||||
Basic earnings (loss) per common share
|
$
|
(0.32
|
)
|
|
$
|
(1.33
|
)
|
|
$
|
0.38
|
|
|
$
|
(0.91
|
)
|
Earnings (loss) per common share—diluted
|
|
|
|
|
|
|
|
||||||||
Net income (loss)
|
(21,153
|
)
|
|
$
|
(86,798
|
)
|
|
$
|
30,578
|
|
|
$
|
(52,197
|
)
|
|
Less: Preferred stock dividends
|
1,766
|
|
|
2,414
|
|
|
3,332
|
|
|
7,664
|
|
||||
Add: Interest on convertible debt, net of tax
|
—
|
|
|
—
|
|
|
3,673
|
|
|
—
|
|
||||
Net income (loss) including assumed conversions
|
$
|
(22,919
|
)
|
|
$
|
(89,212
|
)
|
|
$
|
30,919
|
|
|
$
|
(59,861
|
)
|
Weighted-average common shares outstanding—basic
|
72,649
|
|
|
67,162
|
|
|
71,613
|
|
|
65,740
|
|
||||
Convertible notes weighted-average shares outstanding
|
—
|
|
|
—
|
|
|
15,000
|
|
|
—
|
|
||||
Options and restricted stock
|
—
|
|
|
—
|
|
|
257
|
|
|
—
|
|
||||
Weighted-average common shares outstanding—diluted
|
72,649
|
|
|
67,162
|
|
|
86,870
|
|
|
65,740
|
|
||||
Dilutive earnings (loss) per common share
|
$
|
(0.32
|
)
|
|
$
|
(1.33
|
)
|
|
$
|
0.36
|
|
|
$
|
(0.91
|
)
|
|
September 30,
2013 |
|
December 31,
2012
|
||||
Inventories:
|
|
|
|
||||
Raw materials
|
$
|
41,600
|
|
|
$
|
43,469
|
|
Work-in-process
|
478
|
|
|
619
|
|
||
Finished goods
|
148,792
|
|
|
167,646
|
|
||
|
$
|
190,870
|
|
|
$
|
211,734
|
|
|
Useful
Life
(Years)
|
|
September 30, 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
|
|
|
|
31,272
|
|
|
|
309
|
|
|
31,581
|
|
|
|
31,022
|
|
|
|
559
|
|
||||||
Developed technology and other
|
1-9
|
|
7,961
|
|
|
|
7,938
|
|
|
|
23
|
|
|
7,961
|
|
|
|
7,921
|
|
|
|
40
|
|
||||||
Total intangible assets
|
|
|
$
|
128,132
|
|
|
|
$
|
39,210
|
|
|
|
$
|
88,922
|
|
|
$
|
128,132
|
|
|
|
$
|
38,943
|
|
|
|
$
|
89,189
|
|
Remainder of 2013
|
$
|
21
|
|
2014
|
68
|
|
|
2015
|
51
|
|
|
2016
|
51
|
|
|
2017
|
51
|
|
|
2018
|
51
|
|
|
Thereafter
|
39
|
|
|
|
$
|
332
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
Beginning balance
|
$
|
8,241
|
|
|
$
|
7,863
|
|
|
$
|
7,539
|
|
|
$
|
8,140
|
|
Provision
|
190
|
|
|
2,832
|
|
|
4,335
|
|
|
6,605
|
|
||||
Claims paid/costs incurred
|
(1,665
|
)
|
|
(2,562
|
)
|
|
(5,108
|
)
|
|
(6,612
|
)
|
||||
Ending balance
|
$
|
6,766
|
|
|
$
|
8,133
|
|
|
$
|
6,766
|
|
|
$
|
8,133
|
|
Tax Jurisdiction
|
Years No Longer Subject to Audit
|
U.S. federal
|
2008 and prior
|
California (United States)
|
2007 and prior
|
Canada
|
2005 and prior
|
Japan
|
2006 and prior
|
South Korea
|
2008 and prior
|
United Kingdom
|
2008 and prior
|
Remainder of 2013
|
$
|
43,781
|
|
2014
|
13,298
|
|
|
2015
|
2,327
|
|
|
2016
|
839
|
|
|
2017
|
321
|
|
|
|
$
|
60,566
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
Cost of sales
|
$
|
84
|
|
|
$
|
28
|
|
|
$
|
229
|
|
|
$
|
175
|
|
Operating expenses
|
1,804
|
|
|
1,182
|
|
|
4,028
|
|
|
4,911
|
|
||||
Total cost of share-based compensation included in income,
before income tax
|
$
|
1,888
|
|
|
$
|
1,210
|
|
|
$
|
4,257
|
|
|
$
|
5,086
|
|
|
Nine Months Ended
September 30, |
||||
|
2013
|
|
2012
|
||
Dividend yield
|
0.6
|
%
|
|
1.2
|
%
|
Expected volatility
|
48.8
|
%
|
|
50.6
|
%
|
Risk free interest rate
|
0.7
|
%
|
|
0.8
|
%
|
Expected life
|
4.3 years
|
|
|
4.9 years
|
|
|
Fair
Value
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
Foreign currency derivative instruments—asset position
|
$
|
536
|
|
|
$
|
—
|
|
|
$
|
536
|
|
|
$
|
—
|
|
Foreign currency derivative instruments—liability position
|
(3,286
|
)
|
|
—
|
|
|
(3,286
|
)
|
|
—
|
|
||||
|
$
|
(2,750
|
)
|
|
$
|
—
|
|
|
$
|
(2,750
|
)
|
|
$
|
—
|
|
|
September 30, 2013
|
|
December 31, 2012
|
||||||||||||
|
Carrying
Value
|
|
Fair
Value
|
|
Carrying
Value
|
|
Fair
Value
|
||||||||
Convertible notes
(1)
|
$
|
107,656
|
|
|
$
|
126,000
|
|
|
$
|
107,133
|
|
|
$
|
118,406
|
|
Standby letters of credit
(2)
|
$
|
1,278
|
|
|
$
|
1,278
|
|
|
$
|
3,265
|
|
|
$
|
3,265
|
|
(1)
|
The carrying value of the convertible notes at
September 30, 2013
and December 31, 2012, is net of the unamortized discount of
$4,844,000
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.
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 property, plant and equipment, goodwill and non-amortizing intangible assets that are written down to fair value when they are held for sale or determined to be impaired. During the three and nine months ended September 30, 2012, in connection with the Cost Reduction Initiatives (Note 2), the Company committed to a plan to sell its golf ball manufacturing facility in Chicopee, Massachusetts and lease back a reduced portion of the square footage to accommodate lower ball inventory volumes manufactured at that location. In connection with designating this building as available for sale, the Company recorded a charge of
$7,939,000
to write the building down to its estimated selling price, net of estimated commissions and fees. This implied fair market value was based on significant unobservable inputs, and as a result, the fair value measurement was classified as Level 3. There were no nonrecurring fair value measurements during the three and nine months ended September 30, 2013
|
Derivatives not designated as hedging instruments
|
Asset Derivatives
|
||||||||||
September 30, 2013
|
|
December 31, 2012
|
|||||||||
Balance Sheet Location
|
|
Fair Value
|
|
Balance Sheet Location
|
|
Fair Value
|
|||||
Foreign currency exchange contracts
|
Other current assets
|
|
$
|
536
|
|
|
Other current assets
|
|
$
|
5,011
|
|
Derivatives not designated as hedging instruments
|
Liability Derivatives
|
||||||||||
September 30, 2013
|
|
December 31, 2012
|
|||||||||
Balance Sheet Location
|
|
Fair Value
|
|
Balance Sheet Location
|
|
Fair Value
|
|||||
Foreign currency exchange contracts
|
Accounts payable and
accrued expenses
|
|
$
|
3,286
|
|
|
Accounts payable and
accrued expenses
|
|
$
|
1,046
|
|
|
Location of net gain (loss) recognized in income on
derivative instruments
|
|
Amount of Net Gain (Loss) Recognized in
Income on Derivative Instruments
|
||||||||||||||
Derivatives not designated as hedging instruments
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||||
2013
|
|
2012
|
|
2013
|
|
2012
|
|||||||||||
Foreign currency exchange contracts
|
Other income (expense), net
|
|
$
|
(5,565
|
)
|
|
$
|
(4,884
|
)
|
|
$
|
7,238
|
|
|
$
|
(1,399
|
)
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
Net sales:
|
|
|
|
|
|
|
|
||||||||
Golf Clubs
|
$
|
152,610
|
|
|
$
|
121,286
|
|
|
$
|
603,599
|
|
|
$
|
595,123
|
|
Golf Balls
|
25,619
|
|
|
26,620
|
|
|
112,032
|
|
|
119,004
|
|
||||
|
$
|
178,229
|
|
|
$
|
147,906
|
|
|
$
|
715,631
|
|
|
$
|
714,127
|
|
Income (loss) before income taxes:
|
|
|
|
|
|
|
|
||||||||
Golf Clubs
(1)
|
$
|
(4,410
|
)
|
|
$
|
(57,840
|
)
|
|
$
|
60,410
|
|
|
$
|
(7,247
|
)
|
Golf Balls
(1)
|
(3,420
|
)
|
|
(13,789
|
)
|
|
3,474
|
|
|
(8,047
|
)
|
||||
Reconciling items
(2)
|
(12,286
|
)
|
|
(14,419
|
)
|
|
(28,365
|
)
|
|
(34,249
|
)
|
||||
|
$
|
(20,116
|
)
|
|
$
|
(86,048
|
)
|
|
$
|
35,519
|
|
|
$
|
(49,543
|
)
|
Additions to long-lived assets:
|
|
|
|
|
|
|
|
||||||||
Golf Clubs
|
$
|
4,236
|
|
|
$
|
2,242
|
|
|
$
|
10,669
|
|
|
$
|
14,956
|
|
Golf Balls
|
66
|
|
|
83
|
|
|
95
|
|
|
323
|
|
||||
|
$
|
4,302
|
|
|
$
|
2,325
|
|
|
$
|
10,764
|
|
|
$
|
15,279
|
|
(1)
|
In connection with the Cost Reduction Initiatives (see
Note 2
), the Company’s golf clubs and golf balls segments recognized pre-tax charges of
$990,000
and
$454,000
, respectively, during the three months ended
September 30, 2013
, and
$23,603,000
and
$9,317,000
, respectively, during the three months ended
September 30, 2012
. The Company's golf clubs and golf balls segments recognized pre-tax charges of
$4,261,000
and
$4,682,000
, respectively, during the
nine
months
|
(2)
|
Reconciling items represent corporate general and administrative expenses and other income (expense) not included by management in determining segment profitability. During the
three and nine months ended
September 30, 2013
, the reconciling items include pre-tax charges of
$414,000
and
$1,423,000
, respectively, related to the Cost Reduction Initiatives. During the
three and nine months ended
September 30, 2012
, the reconciling items include pre-tax charges of
$2,164,000
and
$4,815,000
, respectively, in connection with these initiatives. In addition, reconciling items for the
nine
months ended
September 30, 2012
, include a pre-tax gain of
$6,602,000
in connection with the sale of Top-Flite and Ben Hogan brands.
|
|
Three Months Ended
September 30, |
||||||
|
2013
|
|
2012
|
||||
Pre-tax charges related to the Cost Reduction Initiatives
|
$
|
(1.9
|
)
|
|
$
|
(35.1
|
)
|
Income tax provision
(1)
|
(1.0
|
)
|
|
(0.8
|
)
|
||
Total charges
|
$
|
(2.9
|
)
|
|
$
|
(35.9
|
)
|
(1)
|
The Company’s income tax provision for 2013 and 2012 is affected by the establishment of a valuation allowance against the Company’s U.S. deferred tax assets and is therefore not directly correlated to the amount of its pretax income. See Note 12 “Income Taxes” to the Notes to Consolidated Condensed Financial Statements included in this Form 10-Q.
|
|
Three Months Ended
September 30, |
|
Growth/(Decline)
|
|||||||||||
|
2013
|
|
2012
|
|
Dollars
|
|
Percent
|
|
||||||
Net sales:
|
|
|
|
|
|
|
|
|||||||
Woods
|
$
|
56.5
|
|
|
$
|
31.2
|
|
|
$
|
25.3
|
|
|
81
|
%
|
Irons
|
39.5
|
|
|
31.0
|
|
|
8.5
|
|
|
27
|
%
|
|||
Putters
|
20.4
|
|
|
15.7
|
|
|
4.7
|
|
|
30
|
%
|
|||
Accessories and other
|
36.2
|
|
|
43.4
|
|
|
(7.2
|
)
|
|
(16
|
)%
|
|||
|
$
|
152.6
|
|
|
$
|
121.3
|
|
|
$
|
31.3
|
|
|
26
|
%
|
|
Three Months Ended
September 30, |
|
Growth
|
|||||||||||
|
2013
|
|
2012
|
|
Dollars
|
|
Percent
|
|||||||
Loss before income taxes:
|
|
|
|
|
|
|
|
|||||||
Golf clubs
(1)
|
$
|
(4.4
|
)
|
|
$
|
(57.8
|
)
|
|
$
|
53.4
|
|
|
92
|
%
|
Golf balls
(1)
|
(3.4
|
)
|
|
(13.8
|
)
|
|
10.4
|
|
|
75
|
%
|
|||
Reconciling items
(2)
|
(12.3
|
)
|
|
(14.4
|
)
|
|
2.1
|
|
|
15
|
%
|
|||
|
$
|
(20.1
|
)
|
|
$
|
(86.0
|
)
|
|
$
|
65.9
|
|
|
77
|
%
|
(1)
|
In connection with the Cost Reduction Initiatives (see Note 2 "Cost Reduction Initiatives" to the Notes to Consolidated Condensed Financial Statements), during the three months ended
September 30, 2013
and
2012
, the Company’s golf clubs segment recognized pre-tax charges of $1.0 million and $23.6 million, respectively, and the golf balls segment recognized pre-tax charges of $0.5 million and $9.3 million, respectively, 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
third
quarter of 2013 and 2012, the reconciling items include pre-tax charges of $0.4 million and $2.2 million, respectively, related to the Cost Reduction Initiatives.
|
|
Nine Months Ended
September 30, |
||||||
|
2013
|
|
2012
|
||||
Pre-tax charges related to the Cost Reduction Initiatives
|
$
|
(10.4
|
)
|
|
$
|
(39.8
|
)
|
Pre-tax gain on the sale of brands
|
—
|
|
|
6.6
|
|
||
Income tax provision
(1)
|
(4.9
|
)
|
|
(2.7
|
)
|
||
Total charges
|
$
|
(15.3
|
)
|
|
$
|
(35.9
|
)
|
(1)
|
The Company’s income tax provision for 2013 and 2012 is affected by the establishment of a valuation allowance against the Company’s U.S. deferred tax assets and is therefore not directly correlated to the amount of its pretax income. See Note 12 “Income Taxes” to the Notes to Consolidated Condensed Financial Statements included in this Form 10-Q.
|
|
Nine Months Ended
September 30, |
|
Growth/(Decline)
|
|||||||||||
|
2013
|
|
2012
|
|
Dollars
|
|
Percent
|
|||||||
Net sales:
|
|
|
|
|
|
|
|
|||||||
Woods
|
$
|
228.0
|
|
|
$
|
180.4
|
|
|
$
|
47.6
|
|
|
26
|
%
|
Irons
|
152.5
|
|
|
147.2
|
|
|
5.3
|
|
|
4
|
%
|
|||
Putters
|
75.8
|
|
|
78.7
|
|
|
(2.9
|
)
|
|
(4
|
)%
|
|||
Accessories and other
|
147.3
|
|
|
188.8
|
|
|
(41.5
|
)
|
|
(22
|
)%
|
|||
|
$
|
603.6
|
|
|
$
|
595.1
|
|
|
$
|
8.5
|
|
|
1
|
%
|
|
Nine Months Ended
September 30, |
|
Decline
|
|||||||||||
|
2013
|
|
2012
|
|
Dollars
|
|
Percent
|
|||||||
Net sales:
|
|
|
|
|
|
|
|
|||||||
Golf balls
|
$
|
112.0
|
|
|
$
|
119.0
|
|
|
$
|
(7.0
|
)
|
|
(6
|
)%
|
|
Nine Months Ended
September 30, |
|
Growth
|
|||||||||||
|
2013
|
|
2012
|
|
Dollars
|
|
Percent
|
|||||||
Income (loss) before income taxes:
|
|
|
|
|
|
|
|
|||||||
Golf clubs
(1)
|
$
|
60.4
|
|
|
$
|
(7.2
|
)
|
|
$
|
67.6
|
|
|
933
|
%
|
Golf balls
(1)
|
3.5
|
|
|
(8.0
|
)
|
|
11.5
|
|
|
143
|
%
|
|||
Reconciling items
(2)
|
(28.4
|
)
|
|
(34.3
|
)
|
|
5.9
|
|
|
17
|
%
|
|||
|
$
|
35.5
|
|
|
$
|
(49.5
|
)
|
|
$
|
85.0
|
|
|
172
|
%
|
(1)
|
In connection with the Cost Reduction Initiatives (see Note 2 "Cost Reduction Initiatives" to the Notes to Consolidated Condensed Financial Statements), during the
nine months ended September 30, 2013
and
2012
, the Company’s golf clubs segment recognized $4.3 million and $25.3 million, respectively, and the golf balls segment recognized $4.7 million and $9.7 million, 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
nine months ended September 30, 2013
and
2012
, the reconciling items include pre-tax charges of $1.4 million and $4.8 million, respectively, related to the Cost Reduction Initiatives, and for the nine months ended September 30, 2012, the reconciling items include a pre-tax gain of $6.6 million in connection with the sale of the Top-Flite and Ben Hogan brands.
|
|
Payments Due By Period
|
||||||||||||||||||
|
Total
|
|
Less than
1 Year
|
|
1-3 Years
|
|
4-5 Years
|
|
More than
5 Years
|
||||||||||
Convertible notes
(1)
|
$
|
112.5
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
112.5
|
|
Interest on convertible notes
(1)
|
24.9
|
|
|
4.2
|
|
|
8.6
|
|
|
8.4
|
|
|
3.7
|
|
|||||
Unconditional purchase obligations
(2)
|
60.5
|
|
|
43.8
|
|
|
16.4
|
|
|
0.3
|
|
|
—
|
|
|||||
Operating leases
(3)
|
32.8
|
|
|
12.5
|
|
|
13.8
|
|
|
5.1
|
|
|
1.4
|
|
|||||
Uncertain tax contingencies
(4)
|
8.5
|
|
|
1.9
|
|
|
0.8
|
|
|
2.2
|
|
|
3.6
|
|
|||||
Total
|
$
|
239.2
|
|
|
$
|
62.4
|
|
|
$
|
39.6
|
|
|
$
|
16.0
|
|
|
$
|
121.2
|
|
(1)
|
In August 2012, the Company issued $112.5 million of convertible notes due August 15, 2019. Interest of 3.75% per year on the principal amount is payable semiannually in arrears on February 15 and August 15 of each year.
|
(2)
|
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
|
(3)
|
The Company leases certain warehouse, distribution and office facilities, vehicles and office equipment under operating leases. The amounts presented in this line item represent commitments for minimum lease payments under non-cancelable operating leases.
|
(4)
|
Amount represents total uncertain income tax positions. For further discussion see Note 12 “Income Taxes” to the Consolidated Condensed Financial Statements in this Form 10-Q.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(†)
|
Included with this Report.
|
*
|
The XBRL information is being furnished and not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and is not incorporated by reference into any registration statement under the Securities Act of 1933, as amended.
|
CALLAWAY GOLF COMPANY
|
||
|
|
|
By:
|
|
/s/ Jennifer Thomas
|
|
|
Jennifer Thomas
|
|
|
Vice President and
Chief Accounting Officer
|
*
|
The XBRL information is being furnished and not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and is not incorporated by reference into any registration statement under the Securities Act of 1933, as amended.
|
Date: August 29, 2013
|
WILMINGTON TRUST, NATIONAL
ASSOCIATION, as Trustee |
Date
|
Principal Amount of this Global Note
|
Notation Explaining Change in Principal Amount
|
Authorized Signature of Trustee
|
August 29, 2013
|
$112,500,000
|
N/A
|
|
(a)
|
The following definitions are hereby added to Section 1.1 of the Loan Agreement in their proper alphabetical order:
|
(b)
|
The definition of “2012 Debt Reserve” in Section 1.1 of the Loan Agreement is hereby deleted in its entirety.
|
(c)
|
The definition of “Canadian Borrowing Base” in Section 1.1 of the Loan Agreement is hereby amended and restated in its entirety as follows:
|
(d)
|
The definition of “Trigger Event Excess Availability” in Section 1.1 of the Loan Agreement is hereby amended and restated in its entirety as follows:
|
(e)
|
The definition of “U.K. Borrowing Base” in Section 1.1 of the Loan Agreement is hereby amended and restated in its entirety as follows:
|
(f)
|
The definition of “U.S. Borrowing Base” in Section 1.1 of the Loan Agreement is hereby amended and restated in its entirety as follows:
|
(g)
|
Clause (b)(i) of the definition of “U.S. Inventory Formula Amount” in Section 1.1 of the Loan Agreement is hereby amended and restated in its entirety as follows:
|
(h)
|
Section 10.2.6(h) of the Loan Agreement is hereby amended and restated in its entirety as follows:
|
2.
|
Effectiveness of this Amendment
. The following shall have occurred before this Amendment is effective:
|
(a)
|
Amendment. Agent shall have received this Amendment, executed by Agent, each Obligor and the Lenders in a sufficient number of counterparts for distribution to all parties.
|
(b)
|
Resolutions. Agent shall have received a certificate of a duly authorized officer of the U.K. Borrower certifying that an attached copy of resolutions authorizing execution and delivery of this Amendment is true and complete, and that such resolutions are in full force and effect, were duly adopted, have not been amended, modified or revoked, and constitute all resolutions adopted with respect to this Amendment.
|
(c)
|
Representations and Warranties. The representations and warranties set forth herein must be true and correct.
|
(d)
|
No Default. No event has occurred and is continuing that constitutes an Event of Default.
|
(e)
|
Other Required Documentation. All other documents and legal matters in connection with the transactions contemplated by this Amendment shall have been delivered or executed or recorded and shall be in form and substance satisfactory to Agent.
|
(a)
|
Authority. Each Obligor has the requisite corporate power and authority to execute and deliver this Amendment, and to perform its obligations hereunder and under the Loan Documents (as amended or modified hereby) to which it is a party. The execution, delivery and performance by each Obligor of this Amendment have been duly approved by all necessary corporate action and no other corporate proceedings are necessary to consummate such transactions.
|
(b)
|
Enforceability. This Amendment has been duly executed and delivered by each Obligor. This Amendment and each Loan Document to which any Obligor is a party (as amended or modified hereby) is the legal, valid and binding obligation of such Obligor, enforceable against such Obligor in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency or similar laws affecting the enforcement of creditors' rights generally or by equitable principles relating to enforceability, and is in full force and effect.
|
(c)
|
Representations and Warranties. The representations and warranties contained in each Loan Document to which any Obligor is a party (other than any such representations or warranties that, by their terms, are specifically made as of a date other than the date hereof) are correct on and as of the date hereof as though made on and as of the date hereof.
|
(d)
|
Due Execution. The execution, delivery and performance of this Amendment are within the power of each Obligor, have been duly authorized by all necessary
|
(e)
|
No Default. No event has occurred and is continuing that constitutes an Event of Default.
|
4.
|
Choice of Law
. The validity of this Amendment, its construction, interpretation and enforcement, the rights of the parties hereunder, shall be determined under, governed by, and construed in accordance with the internal laws of the State of New York, without giving effect to any conflict of law principles (but giving effect to Section 5-1401 of the New York General Obligation Law and Federal laws relating to national banks). The consent to forum and judicial reference provisions set forth in Section 14.15 of the Loan Agreement are hereby incorporated in this Amendment by reference.
|
5.
|
Counterparts
. This Amendment may be executed in any number of counterparts and by different parties and separate counterparts, each of which when so executed and delivered, shall be deemed an original, and all of which, when taken together, shall constitute one and the same instrument. Delivery of an executed counterpart of a signature page to this Amendment by telefacsimile or a substantially similar electronic transmission shall have the same force and effect as the delivery of an original executed counterpart of this Amendment. Any party delivering an executed counterpart of this Amendment by telefacsimile or a substantially similar electronic transmission shall also deliver an original executed counterpart, but the failure to do so shall not affect the validity, enforceability or binding effect of such agreement.
|
(a)
|
Upon and after the effectiveness of this Amendment, each reference in the Loan Agreement to “this Agreement”, “hereunder”, “hereof” or words of like import referring to the Loan Agreement, and each reference in the other Loan Documents to “the Loan Agreement”, “thereof” or words of like import referring to the Loan Agreement, shall mean and be a reference to the Loan Agreement as modified and amended hereby.
|
(b)
|
Except as specifically amended above, the Loan Agreement and all other Loan Documents are and shall continue to be in full force and effect and are hereby in all respects ratified and confirmed and shall constitute the legal, valid, binding and enforceable obligations of Obligors to Agent and the Lenders.
|
(c)
|
The execution, delivery and effectiveness of this Amendment shall not, except as expressly provided herein, operate as a waiver of any right, power or remedy of Agent or any Lender under any of the Loan Documents, nor constitute a waiver of any provision of any of the Loan Documents.
|
(d)
|
To the extent that any terms and conditions in any of the Loan Documents shall contradict or be in conflict with any terms or conditions of the Loan Agreement, after giving effect to this Amendment, such terms and conditions are hereby deemed modified or amended accordingly to reflect the terms and conditions of the Loan Agreement as modified or amended hereby.
|
7.
|
Ratification
. Each Obligor hereby restates, ratifies and reaffirms each and every term and condition set forth in the Loan Agreement, as amended hereby, and the Loan Documents effective as of the date hereof.
|
8.
|
Estoppel
. To induce Lenders to enter into this Amendment and to continue to make advances to Borrowers under the Loan Agreement, each Obligor hereby acknowledges and agrees that, as of the date hereof, there exists no right of offset, defense, counterclaim or objection in favor of any Obligor as against Agent or any Lender with respect to the Obligations.
|
9.
|
Integration
. This Amendment, together with the other Loan Documents, incorporates all negotiations of the parties hereto with respect to the subject matter hereof and is the final expression and agreement of the parties hereto with respect to the subject matter hereof.
|
10.
|
Severability
. In case any provision in this Amendment shall be invalid, illegal or unenforceable, such provision shall be severable from the remainder of this Amendment and the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.
|
OBLIGORS
:
CALLAWAY GOLF COMPANY
,
a Delaware corporation
By: /s/ Bradley J. Holiday
Name: Bradley J. Holiday
Title: Executive SVP, Chief Financial Officer
CALLAWAY GOLF SALES COMPANY
,
a California corporation
By: /s/ Patrick S. Burke
Name: Patrick S. Burke
Title: Director
CALLAWAY GOLF BALL OPERATIONS, INC.
,
a Delaware corporation
By: /s/ Patrick S. Burke
Name: Patrick S. Burke
Title: Director
CALLAWAY GOLF CANADA LTD.
,
a Canada corporation
By: /s/ Patrick S. Burke
Name: Patrick S. Burke
Title: Director
CALLAWAY GOLF EUROPE LTD.
,
a company organized under the laws of England and Wales
By: /s/ Bradley J. Holiday
Name: Bradley J. Holiday
Title: Executive SVP, Chief Financial Officer
CALLAWAY GOLF INTERACTIVE, INC.
a Texas corporation
By: /s/ Patrick S. Burke
Name: Patrick S. Burke
Title: Director
CALLAWAY GOLF INTERNATIONAL SALES COMPANY
,
a California corporation
By: /s/ Patrick S. Burke
Name: Patrick S. Burke
Title: Director
CALLAWAY GOLF EUROPEAN HOLDING COMPANY LIMITED
,
a company limited by shares incorporated under the laws of England and Wales
By: /s/ Neil Howie
Name: Neil Howie
Title: Director
|
AGENT AND LENDERS
|
|
BANK OF AMERICA, N.A.
, as Agent and as a Lender
|
|
By: /s/ Monirah J. Masud
Name: Monirah J. Masud
Title: Senior Vice President
|
|
BANK OF AMERICA, N.A.
(acting through its Canada branch), as a Canadian Lender
By: /s/ Medina Sales De Andrade
Name: Medina Sales De Andrade
Title: Vice President
|
|
BANK OF AMERICA, N.A.
(acting through its London branch), as a U.K. Lender
By: /s/ Medina Sales De Andrade
Name: Medina Sales De Andrade
Title: Senior Vice President
|
|
UBS LOAN FINANCE LLC,
as a U.S. Lender and a U.K. Lender
By: /s/ Joselin Fernandes
Name: Joselin Fernandes
Title: Associate Director
By: /s/ Darlene Arias
Name: Darlene Arias
Title:
Director
|
|
UBS AG CANADA BRANCH,
as a Canadian Lender
By: /s/ Joselin Fernandes
Name: Joselin Fernandes
Title: Associate Director
By: /s/ James Morgan
Name:
James Morgan
Title:
Executive Director, Regional Functional Head
|
|
WELLS FARGO BANK, N.A.,
as a U.S. Lender
By: /s/ David Klages
Name: David Klages
Title: Portfolio Manager
|
|
WELLS FARGO CAPITAL FINANCE CORPORATION CANADA,
as a Canadian Lender
By: /s/ Domenic Cosentino
Name: Domenic Cosentino
Title: Vice President
|
|
WELLS FARGO BANK, N.A.
(London Branch), as a U.K. Lender
By: /s/ Tania Saldanha
Name: Tania Saldanha
Title: Associate Director
|
|
SUNTRUST BANK,
as a U.S. Lender and as a Canadian Lender
By: /s/ Stephen D. Metts
Name: Stephen D. Metts
Title: Director
|
|
/
S
/ O
LIVER
G. B
REWER
III
|
Oliver G. Brewer III
President and Chief Executive Officer
|
/
S
/ B
RADLEY
J. H
OLIDAY
|
Bradley J. Holiday
Senior Executive Vice President and
Chief Financial Officer
|
/
S
/ O
LIVER
G. B
REWER
III
|
Oliver G. Brewer III
President and Chief Executive Officer
|
/
S
/ B
RADLEY
J. H
OLIDAY
|
Bradley J. Holiday
Senior Executive Vice President and
Chief Financial Officer
|