Callaway Investment Thesis and Business Transformation Overview
2022 TOPGOLF OUTLOOK: KEY METRICS
($ in millions)
Net Revenue
Segment Adjusted EBITDA²
Depreciation & Amortization
Capital Expenditures³
Venue Financing Liability4
2022 Guidance
FY 2021 Reported
(10 months)
$1,500
$1,088
$210-220
$177
$179
$120
$93
$111
$230
$173
$185
$989
$593
$593
Callaway
FY 2021 Pro Forma¹
(12 months)
$1,231
Callaway
៣
travis Mathew
Outlook Assumptions & Commentary
Open least 10 new Topgolf domestic venues in 2022, with 5 expected to open in the fourth quarter 2022
(potential to open one additional venue in late Q4)
Install 8,000+ Toptracer range bays
Same venue sales expected to be down slightly in Q1 2022 and up low-single digits for full year 2022
compared to 20195
Capital expenditures are higher than normal because REIT reimbursement for the several venues opened in
2022 are occurring in 2023
Jack
Wolfskin
1.
Due to the timing of the Topgolf acquisition on March 8, 2021, Callaway's reported full year financial results will only include 10 months of Topgolf results in 2021. The pro forma YTD results detailed on this slide include
Topgolf financials for January and February.
2. Segment Adjusted EBITDA is segment income from operations plus depreciation & amortization, non-cash rent and non-cash compensation expense. Additionally, segment Adjusted EBITDA excludes these same line items
from forecasted net income. A long-term forecast of each of these line items is not available without unreasonable efforts due to the variability of these items and the inability to predict them with certainty. Accordingly, we
have not provided a further reconciliation of Segment Adjusted EBITDA to GAAP net income.
3. Capital expenditures are net of expected REIT reimbursement.
5.
Venue Financing Liability combines Venue Finance Lease Obligations and Deemed Landlord Financing, which are expected to be $264 million and $725 million, respectively, at December 31, 2022. As of December 31, 2021,
Venue Finance Lease Obligations and Deemed Landlord Financing were $132 million and $461 million, respectively. In Q4 2021, the Company remeasured Topgolf's leases in accordance with relevant purchase accounting
guidance as well as reclassified certain ground leases to DLF. Across all of our lease-related liabilities (operating, DLF, venue finance) over $350M of the Q4 2021 increase was related to purchase accounting valuations.
Same venue sales represents sales for the comparable venue base, which is defined as the number of company-operated venues with at least 24 full fiscal months of operations.
TOPGOLF
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