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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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| |
☒ | Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
For the quarterly period ended September 30, 2020
OR
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☐ | Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
For the transition period to Commission file number 001-10962
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| | |
Callaway Golf Company |
(Exact name of registrant as specified in its charter) |
| | |
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| | |
Delaware | | 95-3797580 |
(State or other jurisdiction of incorporation or organization) | | (I.R.S. Employer Identification No.) |
2180 Rutherford Road, Carlsbad, CA 92008
(760) 931-1771
(Address, including zip code, and telephone number, including area code, of principal executive offices)
Securities registered pursuant to Section 12(b) of the Act:
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| | |
Title of Each Class | Trading Symbol(s) | Name of Each Exchange on which Registered |
Common Stock, $0.01 par value per share | ELY | The New York Stock Exchange |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ý No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
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| | | |
Large accelerated filer | ☒ | Accelerated filer | ☐ |
Non-accelerated filer | ☐ | Smaller reporting company | ☐ |
| | Emerging growth company | ☐ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ý
As of September 30, 2020, the number of shares outstanding of the Registrant’s common stock was 94,179,547.
Important Notice to Investors Regarding Forward-Looking Statements: This report contains "forward-looking statements" as defined under the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as: "may," "should," "will," "could," "would," "anticipate," "plan," "believe," "project," "estimate," "expect," "strategy," "future," "likely," and similar references to future periods. Forward-looking statements include, among others, statements that relate to future plans, events, liquidity, financial results, performance, prospects or growth and scale opportunities including, but not limited to, statements relating to future industry and market conditions, the impact of the COVID-19 pandemic on the Company’s business, results of operations and financial condition and the impact of any measures taken to mitigate the effect of the pandemic, the strength of the Company’s brands, product lines and e-commerce business, geographic diversity, market recovery, availability of capital under the Company’s credit facilities, the capital markets or other sources, the Company’s conservation and cost reduction efforts, future stock repurchases, cash flows and liquidity, compliance with debt covenants, estimated unrecognized stock compensation expense, projected capital expenditures and depreciation and amortization expense, future contractual obligations, the realization of deferred tax assets, including loss and credit carryforwards, future income tax expense, the future impact of new accounting standards, the expected timing and completion of, and the integration of, the recently announced acquisition of Topgolf International, Inc. ("Topgolf"), the JW Stargazer Holding GmbH ("Jack Wolfskin") acquisition, the related financial impact of the future business and prospects of the Company, TravisMathew, LLC ("TravisMathew"), OGIO International, Inc. ("OGIO"), Jack Wolfskin and Topgolf. These statements are based upon current information and the Company's current beliefs, expectations and assumptions regarding the future of the Company's business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of the Company's control. As a result of these uncertainties and because the information on which these forward-looking statements is based may ultimately prove to be incorrect, actual results may differ materially from those anticipated. Important factors that could cause actual results to differ include, among others, the following:
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• | certain risks and uncertainties, including changes in capital market or economic conditions, particularly the uncertainty related to the duration and impact of the COVID-19 pandemic, and related decreases in consumer demand and spending; |
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• | the impact of the COVID-19 pandemic and other potential future outbreaks of infectious diseases or other health concerns, and measures taken to limit their impact, which could adversely affect the Company’s business, consumer demand and supply chain, and the global economy; |
| |
• | disruptions to business operations whether from COVID-19-related travel restrictions, mandated quarantines or voluntary “social distancing” that affects employees, customers and suppliers, production delays, closures of manufacturing facilities, retail locations, warehouses and supply and distribution chains, and staffing shortages as a result of remote working requirements or otherwise; |
| |
• | risks and uncertainties related to the Company’s pending merger with Topgolf, including the failure to obtain, or delays in obtaining, required regulatory approval, the risk that such approval may result in the imposition of conditions that could adversely affect the Company or the expected benefits of the proposed transaction, any termination fee that may be payable by Callaway pursuant to the terms of the merger agreement, or the failure to satisfy any of the closing conditions to the proposed transaction on a timely basis or at all; |
| |
• | costs, expenses or difficulties related to the merger with Topgolf, including the integration of the Topgolf business, or the failure to realize the expected benefits and synergies of the proposed transaction in the expected timeframes or at all; |
| |
• | the potential impact of the announcement, pendency or consummation of the proposed transaction on relationships with the Company’s and/or Topgolf’s employees, customers, suppliers and other business partners; |
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• | consumer acceptance of and demand for the Company’s products; |
| |
• | future retailer purchasing activity, which can be significantly affected by adverse industry conditions and overall retail inventory levels; |
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• | any unfavorable changes in U.S. trade, tax or other policies, including restrictions on imports or an increase in import tariffs; |
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• | the level of promotional activity in the marketplace; |
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• | future consumer discretionary purchasing activity, which can be significantly adversely affected by unfavorable economic or market conditions; |
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• | future changes in foreign currency exchange rates and the degree of effectiveness of the Company’s hedging programs; |
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• | the ability of the Company to manage international business risks; |
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• | the Company's ability to recognize operational synergies and scale opportunities across its supply chain and global business platform; |
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• | the costs and disruption associated with activist investors; |
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• | significant developments stemming from the U.K.’s withdrawal from the European Union, which could have a material adverse effect on the Company; |
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• | adverse changes in the credit markets or continued compliance with the terms of the Company’s credit facilities; |
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• | the Company's ability to monetize its investments; |
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• | the Company's ability to successfully integrate, operate and expand the retail stores of the acquired TravisMathew and Jack Wolfskin businesses; |
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• | delays, difficulties or increased costs in the supply of components needed to manufacture the Company’s products or in manufacturing the Company’s products, including the Company's dependence on a limited number of suppliers for some of its products; |
| |
• | 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 or supply of the Company’s products; |
| |
• | the ability of the Company to protect its intellectual property rights; |
| |
• | a decrease in participation levels in golf; |
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• | the effect of terrorist activity, armed conflict, natural disasters or pandemic diseases, including without limitation the COVID-19 pandemic, 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; and |
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• | the general risks and uncertainties applicable to the Company and its business. |
Investors should not place undue reliance on these forward-looking statements, which are based on current information and speak only as of the date hereof. The Company undertakes no obligation to update any forward-looking statements to reflect new information or events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. Additionally, the risks, uncertainties and other factors set forth above or otherwise referred to in the reports that the Company has filed with the Securities and Exchange Commission may be further amplified by the global impact of the COVID-19 pandemic. Investors should also be aware that while the Company from time to time does communicate with securities analysts, it is against the Company’s policy to disclose to them any material non-public information or other confidential commercial information. Furthermore, the Company has a policy against distributing or confirming financial forecasts or projections issued by analysts and any reports issued by such analysts are not the responsibility of the Company. Investors should not assume that the Company agrees with any report issued by any analyst or with any statements, projections, forecasts or opinions contained in any such report. For details concerning these and other risks and uncertainties, see Part I, Item IA, “Risk Factors” contained in the Company's most recent Annual Report on Form 10-K, as well as the Company’s quarterly reports on Form 10-Q and current reports on Form 8-K subsequently filed with the Securities and Exchange Commission from time to time.
Callaway Golf Company Trademarks: The following marks and phrases, among others, are trademarks of the Company: Alpha Convoy, Apex, Apex Tour, APW, Arm Lock, Backstryke, Big Bertha, Big T, Bird of Prey, Black Series, Bounty Hunter, C Grind, Callaway, Callaway Capital, Callaway Golf, Callaway Media Productions, Callaway Super Hybrid, Callaway X, Capital, Chev, Chev 18, Chevron Device, Chrome Soft, Cirrus, Comfort Tech, CUATER, Cuater C logo, Cup 360, CXR, 360 Face Cup, Dawn Patrol, Demonstrably Superior And Pleasingly Different, Divine, Double Wide, Eagle, Engage, Epic, Epic Flash, ERC, ERC Soft, Exo, Cage, Fast Tech Mantle, Flash Face Technology, FT Optiforce, FT Performance, FT Tour, Fusion, Fusion Zero, GBB, GBB Epic, Gems, Gravity Core, Great Big Bertha, Great Big Bertha Epic, Grom, Groove, In, Groove Technology, Heavenwood, Hersatility, Hex Aerodynamics, Hex Chrome, HX, Hyper Dry, Hyper-Lite, Hyper Speed Face, Jack Wolfskin, Jailbird, Jailbreak, Kings of Distance, Legacy, Life On Tour, Longer From Everywhere, Luxe, Mack Daddy, Magna, Majestic, MarXman, Mavrik, MD3 Milled, MD4 Tactical, MD5, MD 5 Jaws, Metal-X, Microhinge Face Insert, Microhinge Star, Nanuk, NipIt, Number One Putter in Golf, O OGIO, O Works, Odyssey, Odyssey Works, Ogio, OGIO ALPHA, OGIO ARORA, OGIO CLUB, OGIO FORGE, OGIO ME, OGIO RENEGADE, OGIO SAVAGE, Opti Flex, Opti Grip, Opti Shield, OptiFit, Opti Vent, ORG 14, ORG 15, Paw Print, PRESTIGE 7, ProType, ∙R∙, Red Ball, R-Moto, Renegade, Rig 9800, Rossie, RSX, S2H2, Sabertooth, Shredder, Silencer, SLED, SoftFast, Solaire,
Speed Regime, Speed Step, Steelhead XR, Steelhead, Strata, Stroke Lab, Stronomic, Sub Zero, Superhot, Supersoft, SureOut, TM, Tank, Tank Cruiser, Tech Series, Teron, Texapore, Toe Up, Toulon, Toulon Garage, Tour Authentic, Tour Tested, Trade In! Trade Up!, TRAVISMATHEW, TravisMathew TM logo, Trionomer Cover, Truvis, Truvis Pattern, Tyro, udesign, Versa, VFT, W Grind, Warbird, Weather Series, Wedgeducation, White Hot, White Hot Tour, White Ice, World's Friendliest, X-12, X-14, X-16, X-18, X-20, X-22, X-24, X-ACT, X Face VFT, X Hot, X Hot Pro, X² Hot, X Series, XR, XR 16, XSPANN, Xtra Traction Technology, XTT, 2-Ball.
CALLAWAY GOLF COMPANY
INDEX
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Item 1. | | |
| | |
| | |
| | |
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| | |
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Item 2. | | |
Item 3. | | |
Item 4. | | |
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Item 1. | | |
Item 1A. | | |
Item 2. | | |
Item 3. | | |
Item 4. | | |
Item 5. | | |
Item 6. | | |
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
CALLAWAY GOLF COMPANY
CONSOLIDATED CONDENSED BALANCE SHEETS
(Unaudited)
(In thousands, except share data) |
| | | | | | | |
| September 30, 2020 | | December 31, 2019 |
ASSETS | | | |
Current assets: | | | |
Cash and cash equivalents | $ | 286,656 |
| | $ | 106,666 |
|
Accounts receivable, net | 239,650 |
| | 140,455 |
|
Inventories | 324,852 |
| | 456,639 |
|
Income taxes receivable | 7,321 |
| | 9,919 |
|
Other current assets | 66,667 |
| | 75,671 |
|
Total current assets | 925,146 |
| | 789,350 |
|
Property, plant and equipment, net | 145,758 |
| | 132,760 |
|
Operating lease right-of-use assets, net | 186,721 |
| | 160,098 |
|
Intangible assets, net | 474,973 |
| | 493,423 |
|
Goodwill | 56,041 |
| | 203,743 |
|
Deferred taxes, net | 51,872 |
| | 73,948 |
|
Investment in golf-related venture | 111,442 |
| | 90,134 |
|
Other assets | 14,355 |
| | 17,092 |
|
Total assets | $ | 1,966,308 |
| | $ | 1,960,548 |
|
LIABILITIES AND SHAREHOLDERS’ EQUITY | | | |
Current liabilities: | | | |
Accounts payable and accrued expenses | $ | 245,053 |
| | $ | 276,300 |
|
Accrued employee compensation and benefits | 33,522 |
| | 46,891 |
|
Asset-based credit facilities | 30,235 |
| | 144,580 |
|
Accrued warranty expense | 9,640 |
| | 9,636 |
|
Operating lease liabilities, short-term | 28,011 |
| | 26,418 |
|
Current portion of long-term debt | 14,623 |
| | 7,317 |
|
Income taxes payable | 10,326 |
| | 12,104 |
|
Total current liabilities | 371,410 |
| | 523,246 |
|
Long-term liabilities: | | | |
Operating lease liabilities, long-term | 170,732 |
| | 137,696 |
|
Long-term debt (Note 6) | 651,011 |
| | 443,259 |
|
Income tax liability | 7,456 |
| | 7,264 |
|
Deferred taxes, net | 60,636 |
| | 73,483 |
|
Other long-term liabilities | 16,529 |
| | 8,247 |
|
Commitments and contingencies (Note 14) |
| |
|
Shareholders’ equity: | | | |
Preferred stock, $0.01 par value, 3,000,000 shares authorized, none issued and outstanding at September 30, 2020 and December 31, 2019 | — |
| | — |
|
Common stock, $0.01 par value, 240,000,000 shares authorized, 95,648,648 shares issued at both September 30, 2020 and December 31, 2019, respectively | 956 |
| | 956 |
|
Additional paid-in capital | 344,425 |
| | 323,600 |
|
Retained earnings | 400,805 |
| | 489,382 |
|
Accumulated other comprehensive loss | (31,323 | ) | | (22,422 | ) |
Less: Common stock held in treasury, at cost, 1,469,101 and 1,450,875 shares at September 30, 2020 and December 31, 2019, respectively | (26,329 | ) | | (24,163 | ) |
Total shareholders’ equity | 688,534 |
| | 767,353 |
|
Total liabilities and shareholders’ equity | $ | 1,966,308 |
| | $ | 1,960,548 |
|
The accompanying notes are an integral part of these financial statements.
CALLAWAY GOLF COMPANY
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share data)
|
| | | | | | | | | | | | | | | |
| Three Months Ended September 30, | | Nine Months Ended September 30, |
| 2020 | | 2019 | | 2020 | | 2019 |
Net sales | $ | 475,559 |
| | $ | 426,217 |
| | $ | 1,214,831 |
| | $ | 1,389,122 |
|
Cost of sales | 274,826 |
| | 234,828 |
| | 696,369 |
| | 752,483 |
|
Gross profit | 200,733 |
| | 191,389 |
| | 518,462 |
| | 636,639 |
|
Operating expenses: | | | | | | | |
Selling expense | 93,855 |
| | 101,984 |
| | 285,082 |
| | 334,418 |
|
General and administrative expense | 33,230 |
| | 36,378 |
| | 98,972 |
| | 108,739 |
|
Research and development expense | 10,139 |
| | 12,538 |
| | 33,399 |
| | 38,158 |
|
Goodwill and trade name impairment | — |
| | — |
| | 174,269 |
| | — |
|
Total operating expenses | 137,224 |
| | 150,900 |
| | 591,722 |
| | 481,315 |
|
Income (loss) from operations | 63,509 |
| | 40,489 |
| | (73,260 | ) | | 155,324 |
|
Interest income | 178 |
| | 94 |
| | 396 |
| | 759 |
|
Interest expense | (12,905 | ) | | (9,639 | ) | | (34,401 | ) | | (30,203 | ) |
Other income, net | 7,010 |
| | 2,232 |
| | 27,487 |
| | 1,459 |
|
Income (loss) before income taxes | 57,792 |
| | 33,176 |
| | (79,778 | ) | | 127,339 |
|
Income tax provision | 5,360 |
| | 2,128 |
| | 6,580 |
| | 18,892 |
|
Net income (loss) | 52,432 |
| | 31,048 |
| | (86,358 | ) | | 108,447 |
|
Less: Net loss attributable to non-controlling interest | — |
| | — |
| | — |
| | (179 | ) |
Net income (loss) attributable to Callaway Golf Company | $ | 52,432 |
| | $ | 31,048 |
| | $ | (86,358 | ) | | $ | 108,626 |
|
| | | | | | | |
Earnings (loss) per common share: | | | | | | | |
Basic | $ | 0.56 |
| | $ | 0.33 |
| | $ | (0.92 | ) | | $ | 1.15 |
|
Diluted | $ | 0.54 |
| | $ | 0.32 |
| | $ | (0.92 | ) | | $ | 1.13 |
|
Weighted-average common shares outstanding: | | | | | | | |
Basic | 94,171 |
| | 94,100 |
| | 94,207 |
| | 94,284 |
|
Diluted | 96,612 |
| | 96,287 |
| | 94,207 |
| | 96,197 |
|
The accompanying notes are an integral part of these financial statements.
CALLAWAY GOLF COMPANY
CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Unaudited)
(In thousands)
|
| | | | | | | | | | | | | | | |
| Three Months Ended September 30, | | Nine Months Ended September 30, |
| 2020 | | 2019 | | 2020 | | 2019 |
Net income (loss) | $ | 52,432 |
| | $ | 31,048 |
| | $ | (86,358 | ) | | $ | 108,447 |
|
Other comprehensive income: | | | | | | | |
Change in derivative instruments | (593 | ) | | 661 |
| | (14,635 | ) | | (8,080 | ) |
Foreign currency translation adjustments | 9,128 |
| | (17,083 | ) | | 2,347 |
| | (18,740 | ) |
Comprehensive income (loss), before income tax on other comprehensive income items | 60,967 |
| | 14,626 |
| | (98,646 | ) | | 81,627 |
|
Income tax (provision) benefit on derivative instruments | (66 | ) | | (666 | ) | | 3,387 |
| | 822 |
|
Comprehensive income (loss) | 60,901 |
| | 13,960 |
| | (95,259 | ) | | 82,449 |
|
Less: Comprehensive loss attributable to non-controlling interests | — |
| | — |
| | — |
| | (339 | ) |
Comprehensive income (loss) attributable to Callaway Golf Company | $ | 60,901 |
| | $ | 13,960 |
| | $ | (95,259 | ) | | $ | 82,788 |
|
The accompanying notes are an integral part of these financial statements.
CALLAWAY GOLF COMPANY
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands) |
| | | | | | | |
| Nine Months Ended September 30, |
| 2020 | | 2019 |
Cash flows from operating activities: | | | |
Net income (loss) | $ | (86,358 | ) | | $ | 108,447 |
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | | | |
Depreciation and amortization | 28,668 |
| | 25,471 |
|
Lease amortization expense | 24,293 |
| | 23,615 |
|
Amortization of debt issuance costs | 3,024 |
| | 2,428 |
|
Debt discount amortization | 3,857 |
| | — |
|
Inventory step-up on acquisition | — |
| | 10,703 |
|
Impairment loss | 174,269 |
| | — |
|
Deferred taxes, net | (117 | ) | | 8,407 |
|
Non-cash share-based compensation | 8,066 |
| | 9,476 |
|
Loss on disposal of long-lived assets | 297 |
| | 649 |
|
Gain on conversion of note receivable | (1,252 | ) | | — |
|
Unrealized net (gains) losses on hedging instruments | (8,899 | ) | | 999 |
|
Change in assets and liabilities, net of effect from acquisitions: | | | |
Accounts receivable, net | (96,344 | ) | | (123,560 | ) |
Inventories | 135,976 |
| | 71,246 |
|
Other assets | 11,097 |
| | 3,547 |
|
Accounts payable and accrued expenses | (40,042 | ) | | (37,392 | ) |
Accrued employee compensation and benefits | (13,252 | ) | | (5,558 | ) |
Accrued warranty expense | 4 |
| | 412 |
|
Change in operating leases, net | (21,181 | ) | | (22,463 | ) |
Income taxes receivable/payable, net | 43 |
| | (11,573 | ) |
Other liabilities | 402 |
| | (1,001 | ) |
Net cash provided by operating activities | 122,551 |
| | 63,853 |
|
Cash flows from investing activities: | | | |
Capital expenditures | (30,911 | ) | | (36,843 | ) |
Investments in golf related ventures | (19,999 | ) | | — |
|
Acquisitions, net of cash acquired | — |
| | (463,105 | ) |
Proceeds from sales of property and equipment | 8 |
| | 43 |
|
Net cash used in investing activities | (50,902 | ) | | (499,905 | ) |
Cash flows from financing activities: | | | |
Proceeds from issuance of convertible notes | 258,750 |
| | — |
|
Proceeds from issuance of long-term debt | 37,728 |
| | 493,167 |
|
Premium paid for capped call confirmations | (31,775 | ) | | — |
|
Debt issuance cost | (9,143 | ) | | (19,088 | ) |
(Repayments of) proceeds from credit facilities, net | (114,345 | ) | | 70,411 |
|
Repayments of long-term debt | (8,203 | ) | | (34,298 | ) |
Repayments of financing leases | (530 | ) | | (583 | ) |
Exercise of stock options | 130 |
| | — |
|
Dividends paid, net | (1,891 | ) | | (2,834 | ) |
Acquisition of treasury stock | (22,143 | ) | | (27,505 | ) |
Purchase of non-controlling interest | — |
| | (18,538 | ) |
Net cash provided by financing activities | 108,578 |
| | 460,732 |
|
Effect of exchange rate changes on cash and cash equivalents | (237 | ) | | (445 | ) |
Net increase in cash and cash equivalents | 179,990 |
| | 24,235 |
|
Cash and cash equivalents at beginning of period | 106,666 |
| | 63,981 |
|
Cash and cash equivalents at end of period | $ | 286,656 |
| | $ | 88,216 |
|
Supplemental disclosures: | | | |
Cash paid for income taxes, net | $ | 2,935 |
| | $ | 14,874 |
|
Cash paid for interest and fees | $ | 23,704 |
| | $ | 25,184 |
|
Non-cash investing and financing activities: | | | |
Issuance of treasury stock and common stock for compensatory stock awards released from restriction | $ | 19,609 |
| | $ | 19,613 |
|
Accrued capital expenditures at period-end | $ | 777 |
| | $ | 2,283 |
|
The accompanying notes are an integral part of these financial statements.
CALLAWAY GOLF COMPANY
CONSOLIDATED CONDENSED STATEMENTS OF SHAREHOLDERS’ EQUITY
(Unaudited)
(In thousands)
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
| Shareholders' Equity Callaway Golf Company |
| Common Stock | | Additional Paid-in Capital | | Retained Earnings | | Accumulated Other Comprehensive Loss | | Treasury Stock | | Total Callaway Golf Company Shareholders' Equity |
| Shares | | Amount | | | | | Shares | | Amount | |
Balance at June 30, 2020 | 95,649 |
| | $ | 956 |
| | $ | 341,615 |
| | $ | 348,376 |
| | | $ | (39,792 | ) | | | (1,485 | ) | | $ | (26,607 | ) | | | $ | 624,548 |
| |
Acquisition of treasury stock | — |
| | — |
| | — |
| | — |
| | | — |
| | | (10 | ) | | (190 | ) | | | (190 | ) | |
Compensatory awards released from restriction | — |
| | — |
| | (466 | ) | | — |
| | | — |
| | | 26 |
| | 466 |
| | | — |
| |
Share-based compensation | — |
| | — |
| | 3,272 |
| | — |
| | | — |
| | | — |
| | — |
| | | 3,272 |
| |
Stock dividends | — |
| | — |
| | 1 |
| | (3 | ) | | | — |
| | | — |
| | 2 |
| | | — |
| |
Equity adjustment from foreign currency translation | — |
| | — |
| | — |
| | — |
| | | 9,128 |
| | | — |
| | — |
| | | 9,128 |
| |
Change in fair value of derivative instruments, net of tax | — |
| | — |
| | — |
| | — |
| | | (659 | ) | | | — |
| | — |
| | | (659 | ) | |
Equity component of convertible notes, net of issuance costs and tax | — |
| | — |
| | 3 |
| | — |
| | | — |
| | | — |
| | — |
| | | 3 |
| |
Net income | — |
| | — |
| | — |
| | 52,432 |
| | | — |
| | | — |
| | — |
| | | 52,432 |
| |
Balance at September 30, 2020 | 95,649 |
| | $ | 956 |
| | $ | 344,425 |
| | $ | 400,805 |
| | | $ | (31,323 | ) | | | (1,469 | ) | | $ | (26,329 | ) | | | $ | 688,534 |
| |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Shareholders' Equity Callaway Golf Company |
| Common Stock | | Additional Paid-in Capital | | Retained Earnings | | Accumulated Other Comprehensive Loss | | Treasury Stock | | Total Callaway Golf Company Shareholders' Equity |
| Shares | | Amount | | | | | Shares | | Amount | |
Balance at December 31, 2019 | 95,649 |
| | $ | 956 |
| | $ | 323,600 |
| | $ | 489,382 |
| | | $ | (22,422 | ) | | | (1,451 | ) | | $ | (24,163 | ) | | | $ | 767,353 |
| |
Adoption of accounting standard | — |
| | — |
| | — |
| | (289 | ) | | | — |
| | | — |
| | — |
| | | (289 | ) | |
Acquisition of treasury stock | — |
| | — |
| | — |
| | — |
| | | — |
| | | (1,178 | ) | | (22,143 | ) | | | (22,143 | ) | |
Exercise of stock options | — |
| | — |
| | (203 | ) | | — |
| | | — |
| | | 20 |
| | 333 |
| | | 130 |
| |
Compensatory awards released from restriction | — |
| | — |
| | (19,609 | ) | | — |
| | | — |
| | | 1,138 |
| | 19,609 |
| | | — |
| |
Share-based compensation | — |
| | — |
| | 8,066 |
| | — |
| | | — |
| | | — |
| | — |
| | | 8,066 |
| |
Stock dividends | — |
| | — |
| | 4 |
| | (39 | ) | | | — |
| | | 2 |
| | 35 |
| | | — |
| |
Cash dividends ($0.01 per share) | — |
| | — |
| | — |
| | (1,891 | ) | | | — |
| | | — |
| | — |
| | | (1,891 | ) | |
Equity adjustment from foreign currency translation | — |
| | — |
| | — |
| | — |
| | | 2,347 |
| | | — |
| | — |
| | | 2,347 |
| |
Change in fair value of derivative instruments, net of tax | — |
| | — |
| | — |
| | — |
| | | (11,248 | ) | | | — |
| | — |
| | | (11,248 | ) | |
Equity component of convertible notes, net of issuance costs and tax | — |
| | — |
| | 57,080 |
| | — |
| | | — |
| | | — |
| | — |
| | | 57,080 |
| |
Premiums paid for capped call transactions, net of tax | — |
| | — |
| | (24,513 | ) | | — |
| | | — |
| | | — |
| | — |
| | | (24,513 | ) | |
Net loss | — |
| | — |
| | — |
| | (86,358 | ) | | | — |
| | | — |
| | — |
| | | (86,358 | ) | |
Balance at September 30, 2020 | 95,649 |
| | $ | 956 |
| | $ | 344,425 |
| | $ | 400,805 |
| | | $ | (31,323 | ) | | | (1,469 | ) | | $ | (26,329 | ) | | | $ | 688,534 |
| |
The accompanying notes are an integral part of these financial statements.
CALLAWAY GOLF COMPANY
CONSOLIDATED CONDENSED STATEMENTS OF SHAREHOLDERS’ EQUITY
(Unaudited)
(In thousands)
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
| Shareholders' Equity Callaway Golf Company |
| Common Stock | | Additional Paid-in Capital | | Retained Earnings | | Accumulated Other Comprehensive Loss | | Treasury Stock | | Total Callaway Golf Company Shareholders' Equity |
| Shares | | Amount | | | | | Shares | | Amount | |
Balance at June 30, 2019 | 95,649 |
| | $ | 956 |
| | $ | 319,579 |
| | $ | 489,445 |
| | | $ | (22,271 | ) | | | (1,555 | ) | | $ | (25,773 | ) | | | $ | 761,936 |
| |
Acquisition of treasury stock | — |
| | — |
| | — |
| | — |
| | | — |
| | | (7 | ) | | (111 | ) | | | (111 | ) | |
Compensatory awards released from restriction | — |
| | — |
| | (309 | ) | | — |
| | | — |
| | | 19 |
| | 309 |
| | | — |
| |
Share-based compensation | — |
| | — |
| | 2,512 |
| | — |
| | | — |
| | | — |
| | — |
| | | 2,512 |
| |
Stock dividends | — |
| | — |
| | — |
| | (1 | ) | | | — |
| | | — |
| | 1 |
| | | — |
| |
Cash dividends ($0.01 per share) | — |
| | — |
| | — |
| | (941 | ) | | | — |
| | | — |
| | — |
| | | (941 | ) | |
Equity adjustment from foreign currency translation | — |
| | — |
| | — |
| | — |
| | | (17,083 | ) | | | — |
| | — |
| | | (17,083 | ) | |
Change in fair value of derivative instruments | — |
| | — |
| | — |
| | — |
| | | (5 | ) | | | — |
| | — |
| | | (5 | ) | |
Net Income | — |
| | — |
| | — |
| | 31,048 |
| | | — |
| | | — |
| | — |
| | | 31,048 |
| |
Balance at September 30, 2019 | 95,649 |
| | $ | 956 |
| | $ | 321,782 |
| | $ | 519,551 |
| | | $ | (39,359 | ) | | | (1,543 | ) | | $ | (25,574 | ) | | | $ | 777,356 |
| |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Shareholders' Equity Callaway Golf Company |
| Common Stock | | Additional Paid-in Capital | | Retained Earnings | | Accumulated Other Comprehensive Loss | | Treasury Stock | | Total Callaway Golf Company Shareholders' Equity | | Non- Controlling Interest | | |
|
| Shares | | Amount | | | | | Shares | | Amount | | | | Total |
Balance at December 31, 2018 | 95,649 |
| | $ | 956 |
| | $ | 341,241 |
| | $ | 413,799 |
| | | $ | (13,700 | ) | | | (1,138 | ) | | $ | (17,722 | ) | | | $ | 724,574 |
| | | $ | 9,734 |
| | $ | 734,308 |
|
Acquisition of treasury stock | — |
| | — |
| | — |
| | — |
| | | — |
| | | (1,662 | ) | | (27,505 | ) | | | (27,505 | ) | | | — |
| | (27,505 | ) |
Compensatory awards released from restriction | — |
| | — |
| | (19,613 | ) | | — |
| | | — |
| | | 872 |
| | 19,613 |
| | | — |
| | | — |
| | — |
|
Share-based compensation | — |
| | — |
| | 9,476 |
| |
|