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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form
10-Q
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
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  
 
 
 
Callaway Golf Company
(Exact name of registrant as specified in its charter)
 
 
 
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:
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.
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:
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;
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;
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;
any unfavorable changes in U.S. trade, tax or other policies, including restrictions on imports or an increase in import tariffs;
the level of promotional activity in the marketplace;
future consumer discretionary purchasing activity, which can be significantly adversely affected by unfavorable economic or market conditions;
future changes in foreign currency exchange rates and the degree of effectiveness of the Company’s hedging programs;
the ability of the Company to manage international business risks;


2



the Company's ability to recognize operational synergies and scale opportunities across its supply chain and global business platform;
the costs and disruption associated with activist investors;
significant developments stemming from the U.K.’s withdrawal from the European Union, which could have a material adverse effect on the Company;
adverse changes in the credit markets or continued compliance with the terms of the Company’s credit facilities;
the Company's ability to monetize its investments;
the Company's ability to successfully integrate, operate and expand the retail stores of the acquired TravisMathew and Jack Wolfskin businesses;
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;
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
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,


3



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.


4



CALLAWAY GOLF COMPANY
INDEX

 
 
 
Item 1.
 
 
 
 
 
 
Item 2.
Item 3.
Item 4.
 
 
 
 
Item 1.
Item 1A.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.


5



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.


6



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.


7



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.


8



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.


9



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.


10



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