Callaway Investment Thesis and Business Transformation Overview
TOPGOLF ADJUSTED EBITDA RECONCILIATION (2019 and 2020)
Callaway
TOPGOLF
Non-GAAP Reconciliation and Supplemental Financial Information
(Unaudited)
(In thousands)
Net income (loss)
Interest expense, net
Income tax provision (benefit)
Depreciation and amortization expense
Non-cash stock compensation and stock warrant expense, net
Non-cash lease amortization expense (1)
Closure costs (2)
Remeasurement of contingent earn-out obligation (3)
Impairment of Long-Lived Assets
Other one-time expenses (4)
Adjusted EBITDA
Twelve Months Ended December 31,
2020
2019
$
(346,307)
$
(114,866)
51,899
40,865
1,027
(199)
112,279
98,018
7,906
7,414
10,020
16,910
1,038
9,591
(1,744)
(302)
62,555
33,083
1,750
$
(66,245)
$
59,181
1. Consists of the non-cash portion of rent, including non-cash rent related to pre-opening costs, which reflects the extent to which Topgolf's operating lease straight-line rent expense recognized exceeds or is less than its cash rent payments. The operating lease
straight-line rent expense adjustment can vary depending on the average age of Topgolf's lease portfolio, which has been impacted by its significant growth. For newer leases, Topgolf's rent expense recognized typically exceeds its cash rent payments while for
more mature leases, rent expense recognized is typically less than its cash rent payments.
2.
3.
Closure costs include lease related charges, severance costs, impairment of long-lived assets and other exit costs associated with permanent venue closures. In the fourth quarter of fiscal year 2019, Topgolf announced the closure of two legacy company-
operated venues located in Wood Dale, Illinois and Alexandria, Virginia. The Wood Dale, Illinois venue closed in the fourth quarter of fiscal year 2019 and the Alexandria, Virginia venue closed in the first quarter of fiscal year 2020.
Represents fair market value adjustments of the contingent earn-out obligation that expires in December 2021 in connection with Topgolf's acquisition of Topgolf Sweden in May 2016.
4. Represents non-recurring consulting and advisory costs with respect to Topgolf financing transactions and well as legal settlement reserves.
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