Callaway Golf Company (ELY, Financial) filed Quarterly Report for the period ended 2009-03-31.
Callaway Golf Company is designs develops manufactures and markets high quality innovative golf clubs. The Company's golf clubs are sold at premium prices to both average and skilled golfers on the basis of performance ease of use and appearance. Callaway Golf Company has a market cap of $544.05 million; its shares were traded at around $8.44 with a P/E ratio of 20.1 and P/S ratio of 0.49. The dividend yield of Callaway Golf Company stocks is 3.32%.
For the first quarter of 2009, gross profit decreased $59.3 million to $116.2 million from $175.5 million in the first quarter of 2008. Gross profit as a percentage of net sales (gross margin) decreased to 43% in the first quarter of 2009 compared to 48% in the first quarter of 2008. This decline in gross margin is primarily attributable to the unfavorable economic conditions and the resulting reduction in sales volume as well as the impact of unfavorable changes in foreign currency rates. In addition, gross margin was affected by price reductions taken during the first quarter in 2009 on older golf clubs products combined with a shift in product mix within the golf club operating segment as a result of sales of lower priced golf club products during the first quarter of 2009 compared to the first quarter of 2008. This decline in gross margin was partially offset by cost reductions on golf club component costs as well as an overall improvement in manufacturing efficiencies as a result of the Companys gross margin improvement initiatives. See Segment Profitability below for further discussion of gross margins. Gross profit for the first quarter of 2009 was negatively affected by charges of $1.6 million related to the Companys gross margin improvement initiatives compared to $1.1 million for the comparable period in 2008.
Selling expenses decreased $5.5 million (7%) to $74.7 million in the first quarter of 2009 compared to $80.2 million in the same period of 2008. As a percentage of net sales, selling expenses increased to 27% in the first quarter of 2009 compared to 22% in the first quarter of 2008. The dollar decrease in selling expenses was primarily due a decrease of $1.7 million in employee incentive compensation expense as well as cost reductions taken by the Company during the first quarter in 2009, which included decreases of $0.9 million in employee costs, $1.3 million in travel and entertainment and $0.9 million in advertising and promotional activities. In addition, sales commissions decreased by $0.9 million as a result of the decline in net sales during the first three months in 2009 compared to the same time period in the prior year.
General and administrative expenses decreased $2.5 million (11%) to $20.0 million in the first quarter of 2009 compared to $22.5 million in the same period of 2008. As a percentage of net sales, general and administrative expenses increased to 7% in the first quarter of 2009 compared to 6% in the first quarter of 2008. The dollar decrease was primarily due to a decrease of $1.9 million in employee incentive compensation expense as well as cost reductions taken by the Company during the first quarter of 2009, including $0.7 million in employee costs.
The Companys cash and cash equivalents decreased $18.8 million (49%) to $19.5 million at March 31, 2009, from $38.3 million at December 31, 2008. Most of this decrease is due to the general seasonality of the Companys business. Generally, during the first quarter, the Company will rely more heavily on its credit facilities to fund operations as cash inflows from operations begin to increase during the second quarter as a result of cash collections from customers. During the three months ended March 31, 2009, the Company used its cash and cash equivalents as well as proceeds from its credit facilities of $57.1 million to fund cash used in operating activities of $65.7 million as well as approximately $10.0 million in capital expenditures. Management expects to fund the Companys future operations from cash provided by its operating activities combined with borrowings from its credit facilities, as deemed necessary (see further information on the Companys credit line below).
The Companys accounts receivable balance fluctuates throughout the year as a result of the general seasonality of the Companys business. The Companys accounts receivable balance will generally be at its highest during the first and second quarters and decline significantly during the third and fourth quarters as a result of an increase in cash collections and lower sales. As of March 31, 2009, the Companys net accounts receivable increased $119.1 million to $239.2 million from $120.1 million as of December 31, 2008. The increase in accounts receivable is primarily attributable to net sales of $271.9 million during the first quarter of 2009 compared to net sales of $171.3 million during the fourth quarter of 2008. The Companys net accounts receivable decreased $61.3 million as of March 31, 2009 compared to the Companys net accounts receivable as of March 31, 2008. This decrease was primarily attributable to a $94.6 million decrease in net sales during the first quarter of 2009 compared to the same period in the prior year.
Read the The complete ReportELY is in the portfolios of Kenneth Fisher of Fisher Asset Management, LLC, Kenneth Fisher of Fisher Asset Management, LLC.
Callaway Golf Company is designs develops manufactures and markets high quality innovative golf clubs. The Company's golf clubs are sold at premium prices to both average and skilled golfers on the basis of performance ease of use and appearance. Callaway Golf Company has a market cap of $544.05 million; its shares were traded at around $8.44 with a P/E ratio of 20.1 and P/S ratio of 0.49. The dividend yield of Callaway Golf Company stocks is 3.32%.
Highlight of Business Operations:
As a result of the weak economic conditions and unfavorable foreign currency exchange rates discussed above (collectively, the unfavorable economic conditions), net sales decreased $94.5 million (26%) to $271.9 million for the three months ended March 31, 2009 as compared to $366.4 million for the comparable period in the prior year. This decrease reflects a $83.5 million decline in net sales of the Companys golf clubs segment and a $11.0 million decline in net sales of the Companys golf balls segment as set forth below (dollars in millions):For the first quarter of 2009, gross profit decreased $59.3 million to $116.2 million from $175.5 million in the first quarter of 2008. Gross profit as a percentage of net sales (gross margin) decreased to 43% in the first quarter of 2009 compared to 48% in the first quarter of 2008. This decline in gross margin is primarily attributable to the unfavorable economic conditions and the resulting reduction in sales volume as well as the impact of unfavorable changes in foreign currency rates. In addition, gross margin was affected by price reductions taken during the first quarter in 2009 on older golf clubs products combined with a shift in product mix within the golf club operating segment as a result of sales of lower priced golf club products during the first quarter of 2009 compared to the first quarter of 2008. This decline in gross margin was partially offset by cost reductions on golf club component costs as well as an overall improvement in manufacturing efficiencies as a result of the Companys gross margin improvement initiatives. See Segment Profitability below for further discussion of gross margins. Gross profit for the first quarter of 2009 was negatively affected by charges of $1.6 million related to the Companys gross margin improvement initiatives compared to $1.1 million for the comparable period in 2008.
Selling expenses decreased $5.5 million (7%) to $74.7 million in the first quarter of 2009 compared to $80.2 million in the same period of 2008. As a percentage of net sales, selling expenses increased to 27% in the first quarter of 2009 compared to 22% in the first quarter of 2008. The dollar decrease in selling expenses was primarily due a decrease of $1.7 million in employee incentive compensation expense as well as cost reductions taken by the Company during the first quarter in 2009, which included decreases of $0.9 million in employee costs, $1.3 million in travel and entertainment and $0.9 million in advertising and promotional activities. In addition, sales commissions decreased by $0.9 million as a result of the decline in net sales during the first three months in 2009 compared to the same time period in the prior year.
General and administrative expenses decreased $2.5 million (11%) to $20.0 million in the first quarter of 2009 compared to $22.5 million in the same period of 2008. As a percentage of net sales, general and administrative expenses increased to 7% in the first quarter of 2009 compared to 6% in the first quarter of 2008. The dollar decrease was primarily due to a decrease of $1.9 million in employee incentive compensation expense as well as cost reductions taken by the Company during the first quarter of 2009, including $0.7 million in employee costs.
The Companys cash and cash equivalents decreased $18.8 million (49%) to $19.5 million at March 31, 2009, from $38.3 million at December 31, 2008. Most of this decrease is due to the general seasonality of the Companys business. Generally, during the first quarter, the Company will rely more heavily on its credit facilities to fund operations as cash inflows from operations begin to increase during the second quarter as a result of cash collections from customers. During the three months ended March 31, 2009, the Company used its cash and cash equivalents as well as proceeds from its credit facilities of $57.1 million to fund cash used in operating activities of $65.7 million as well as approximately $10.0 million in capital expenditures. Management expects to fund the Companys future operations from cash provided by its operating activities combined with borrowings from its credit facilities, as deemed necessary (see further information on the Companys credit line below).
The Companys accounts receivable balance fluctuates throughout the year as a result of the general seasonality of the Companys business. The Companys accounts receivable balance will generally be at its highest during the first and second quarters and decline significantly during the third and fourth quarters as a result of an increase in cash collections and lower sales. As of March 31, 2009, the Companys net accounts receivable increased $119.1 million to $239.2 million from $120.1 million as of December 31, 2008. The increase in accounts receivable is primarily attributable to net sales of $271.9 million during the first quarter of 2009 compared to net sales of $171.3 million during the fourth quarter of 2008. The Companys net accounts receivable decreased $61.3 million as of March 31, 2009 compared to the Companys net accounts receivable as of March 31, 2008. This decrease was primarily attributable to a $94.6 million decrease in net sales during the first quarter of 2009 compared to the same period in the prior year.
Read the The complete ReportELY is in the portfolios of Kenneth Fisher of Fisher Asset Management, LLC, Kenneth Fisher of Fisher Asset Management, LLC.
