Callaway Investment Thesis and Business Transformation Overview
STRONG BALANCE SHEET & CLEAR CAPITAL ALLOCATION PRIORITIES
Callaway
CAPITAL ALLOCATION PRIORITIES
($ in millions)
1
Reinvest in the business to unlock high ROI
embedded growth
2
Maintain favorable leverage levels
Opportunistically and thoughtfully explore
3
investments in complementary areas
4
STRONG LIQUIDITY TO FUND GROWTH
As of
December 31,
2021
As of
December 31,
% Change
2020
Available Liquidity¹
$753
$632
+19%
Net Debt²
$1,378
$407
+239%
Net Debt²
$1,119
$148
+656%
(Excluding Convertible Note³)
Leverage Ratio4
3.1x
2.5x
+60 basis
points
Return capital to shareholders through buybacks
and dividends
Topgolf funding needed from Callaway now $200M better than original
$325M estimate, with less than $70M remaining to be funded
STRONG TRACK RECORD OF DEPLOYING CAPITAL TO CREATE VALUE FOR SHAREHOLDERS
1. Available Liquidity defined as cash on hand + availability under credit facilities.
2. Net Debt is calculated as debt, including Deemed Landlord Financing related to the Topgolf venues, less unrestricted cash. See appendix for a detailed calculation of Net Debt.
3. In accordance with FASB, beginning on January 1, 2022, the Company's fully diluted share count assumes the conversion of the Company's $259 million of 2.75% Convertible Senior Notes, increasing the share count to approximately 204 million shares. If using this fully diluted
share count to calculate the Company's enterprise value, the corresponding total net debt figure should also exclude the convertible note.
4. Net debt leverage ratio is calculated as debt, including Deemed Landlord Financing related to the Topgolf venues, less unrestricted cash, divided by the Company's trailing twelve-month Adjusted EBITDA.
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