CARLSBAD, Calif.–(BUSINESS WIRE)–Callaway Golf Company (NYSE:ELY) today announced that, based on current
information, the Company estimates net sales for the first quarter ended
March 31, 2008 of approximately $366 million, an estimated increase of
approximately 10% as compared to the first quarter of 2007, with a
corresponding estimated increase of approximately 25% in earnings per
diluted share that is estimated to range from $0.59 to $0.61 (on 64.8
million shares). These results also include after-tax charges of
approximately $0.01 per share related to gross margin improvement
initiatives announced in November 2006.
For the first quarter of 2007, the Company reported net sales of $335
million and fully diluted earnings per share of $0.48 (on 68.3 million
shares). Those results included after-tax charges of approximately $0.01
per share related to the gross margin improvement initiatives.
Business Update
“We are very pleased with our preliminary
first quarter results,” commented George
Fellows, President and CEO of Callaway Golf. “We
continue to build upon the momentum we gained in 2007, including
additional improvements in our supply chain and product development
processes. The strong sell-in to the retail channel during the first
quarter reflects the strength of our brands and the quality of our 2008
product line.”
“While sell-in of our new products has been
encouraging thus far,” continued Mr. Fellows, “the
second quarter will be a better indicator of how successful our year
will be as it is driven by consumer purchases of our products and
resulting retail reorders. Additionally, we continue to monitor
macroeconomic and competitive conditions globally. Contingency plans we
have developed this year, along with business process improvements
implemented over the past two years, provide us with greater flexibility
to adjust to unforeseen circumstances that might impact our business. At
this point, we remain optimistic that our full year financial results
for 2008 will be significantly higher than in 2007 and will be within
our original guidance.”
Business Outlook
Earlier this year, the Company estimated that for 2008 net sales would
be in the range of $1.145 to $1.165 billion and that pro forma fully
diluted earnings per share would be in the range of $1.08 to $1.18 per
share, excluding estimated charges of approximately $0.08 per share for
the Company’s gross margin initiatives. In
light of the many uncertainties surrounding the economy, second quarter
consumer sell-through, and competitor actions, the Company reaffirms
this estimate with the additional refinement that it is prudent at this
time to expect that sales and earnings likely will be at the lower end
of this range.
Conference Call
The Company will release actual first quarter financial results on May
1, 2008. A conference call and webcast will also take place at that time.
Disclaimer: Investors should be
aware that the Company has not yet finalized its results for the first
quarter of 2008 and that the Company’s “preliminary”
estimates of net sales and earnings contained in this press release
reflect management’s estimates based upon the
information available at the time made. These estimates could differ
materially from the Company’s actual results
if the information on which the estimates were based ultimately proves
to be incorrect or incomplete. In addition, statements used in this
press release that relate to future plans, events, financial results,
performance or prospects, including statements relating to estimated
sales and earnings for 2008, and the estimated charges for the Company’s
gross margin initiatives, are forward-looking statements as defined
under the Private Securities Litigation Reform Act of 1995. These
estimates and statements are based upon current information and
expectations. Accurately estimating the Company’s
future financial performance is based upon various unknowns including
consumer acceptance and demand for the Company’s
products as well as future consumer discretionary purchasing activity,
which can be significantly adversely affected by unfavorable economic or
market conditions. Actual results may differ materially from those
estimated or anticipated as a result of these unknowns or other risks
and uncertainties, including delays, difficulties or increased costs in
the supply of components needed to manufacture the Company’s
products, in manufacturing the Company’s
products, or in connection with the implementation of the Company’s
planned gross margin initiatives or the implementation of future
initiatives; 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; a decrease in participation levels in golf; and the effect of
terrorist activity, armed conflict, natural disasters or pandemic
diseases on the economy generally, on the level of demand for the
Company’s products or on the Company’s ability to manage its supply and
delivery logistics in such an environment. For additional information
concerning these and other risks and uncertainties that could affect
these statements and the Company’s business,
see Part I, Item 1A of the Company’s Annual
Report on Form 10-K for the year ended December 31, 2007, as well as
other risks and uncertainties detailed from time to time in the Company’s
reports on Forms 10-Q and 8-K subsequently filed from time to time with
the Securities and Exchange Commission. Readers are cautioned not to
place undue reliance on these forward-looking statements, which speak
only as of the date hereof. The Company undertakes no obligation to
republish revised forward-looking statements to reflect events or
circumstances after the date hereof or to reflect the occurrence of
unanticipated events.
About Callaway Golf
Through an unwavering commitment to innovation, Callaway Golf Company
(NYSE:ELY) creates products and services designed to make every golfer a
better golfer. Callaway Golf Company manufactures and sells golf clubs
and golf balls, and sells golf accessories, under the Callaway Golf®,
Odyssey®, Top-Flite®,
and Ben Hogan® brands in more than 110
countries worldwide. For more information please visit www.callawaygolf.com
or www.shop.callawaygolf.com.
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