Callaway Investment Thesis and Business Transformation Overview
SEGMENT RECONCILIATION
CALLAWAY GOLF COMPANY
Consolidated Net Sales and Operating Segment Information
(Unaudited)
(In thousands)
Operating Segment Information
Callaway
Operating Segment Information
Three Months Ended
December 31,
Growth
Non-GAAP
Constant
Currency
vs. 2020(1)
Twelve Months Ended
December 31,
Non-GAAP
Constant
Currency
Growth
2021
2020
Dollars
Percent
Percent
2021
2020
Dollars
Percent
vs. 2020(1)
Percent
Net revenues:
Net revenues:
Topgolf
$
335,798
$
Golf Equipment
161,419
Apparel, Gear and Other
214,507
213,794
160,835
$ 335,798
(52,375)
n/m
(24.5%)
n/m
(23.4%)
Topgolf
$
1,087,671 $
-
$
Golf Equipment
1,229,175
982,675
1,087,671
246,500
n/m
n/m
25.1%
23.2%
53,672
33.4%
35.8%
Apparel, Gear and Other
Total net revenues
$
711,724
$
374,629 $ 337,095
90.0%
91.6%
Total net revenues
$
816,601
3,133,447 $
606,785
1,589,460 $ 1,543,987
209,816
34.6%
32.8%
97.1%
95.1%
Segment operating income (loss):
Segment operating income (loss):
Topgolf
$
Golf Equipment
6,139
(24,979)
$
-
$
6,139
n/m
Topgolf
$
3,993
(28,972)
(725.6%)
Golf Equipment
58,225
203,846
$
$
58,225
n/m
Apparel, Gear and Other
(2,281)
(9,720)
Total segment operating income
(21,121)
(5,727)
7,439
(15,394)
(76.5%)
Apparel, Gear and Other
68,511
268.8%
Total segment operating income
330,582
Corporate G&A and other (2)
(33,542)
(26,528)
Total operating income (loss)
(54,663)
(32,255)
(40,502)
(12,927)
(7,014) 26.4%
(22,408) 69.5%
(27,575) 213.3%
Corporate G&A and other (2)
(125,867)
148,578
679
149,257
(80,503)
55,268
37.2%
67,832
9990.0%
181,325
121.5%
(45,364)
56.4%
Goodwill and tradename impairment (3)
-
(174,269)
174,269 (100.0%)
Total operating income (loss)
204,715
(105,515)
(526)
(2,518)
1,992
$
(95,691)
$
(47,700) $ (47,991)
(79.1%)
100.6%
Gain on Topgolf investment (4)
252,531
Interest expense, net
(115,565)
Other income, net
8,961
(46,932)
24,969
310,230 294.0%
252,531
n/m
(68,633) 146.2%
(16,008) (64.1%)
Total income (loss) before income taxes
$
350,642 $
(127,478) $
478,120
375.1%
Interest expense, net
Other income (expense), net
Total income (loss) before income taxes
(1) Calculated by applying 2020 exchange rates to 2021 reported sales in regions outside the U.S.
(2) Amount includes corporate general and administrative expenses not utilized by management in determining segment profitability, including non-cash
amortization expense for intangible assets acquired in connection with the Jack Wolfskin, Travis Mathew and OGIO acquisitions. In addition, the amount
for 2021 includes (i) $8.5 million of non-cash amortization expense for intangible assets acquired in connection with the merger with Topgolf, combined
with depreciation expense from the fair value step-up of Topgolf property, plant and equipment and amortization expense related to the fair value
adjustments to Topgolf leases; (ii) $1.1 million of transaction, transition and other non-recurring costs associated with the merger with Topgolf completed
on March 8, 2021; and (iii) $0.8 million of costs related to the implementation of new IT systems for Jack Wolfskin. The amount for the fourth quarter of
2020 includes (i) $8.0 million of professional fees, legal fees, employee costs and other fees associated with the acquisition of Topgolf; and (ii) $0.7 million
of costs related to the implementation of new IT systems for Jack Wolfskin.
(1) Calculated by applying 2020 exchange rates to 2021 reported sales in regions outside the U.S.
(2) Amount includes corporate general and administrative expenses not utilized by management in determining segment profitability, including non-cash
amortization expense for intangible assets acquired in connection with the Jack Wolfskin, Travis Mathew and OGIO acquisitions. In addition, the amount for
2021 includes (i) $22.3 million of non-cash amortization expense for intangible assets acquired in connection with the merger with Topgolf, combined with
depreciation expense from the fair value step-up of Topgolf property, plant and equipment and amortization expense related to the fair value adjustments
to Topgolf leases, (ii)$21.2 million of transaction, transition and other non-recurring costs associated with the merger with Topgolf completed on March 8,
2021, and (iii) $2.8 million of costs related to the implementation of new IT systems for Jack Wolfskin. The amount for 2020 also includes certain non-
recurring costs, including (i) $8.5 million in transaction, transition, and other non-recurring costs associated with the Topgolf Merger Agreement, (ii) $4.8
million of non-cash amortization of the debt discount on the convertible notes issued in May 2020, (iii) $3.7 million of costs associated with the Company's
transition to its new North America Distribution Center; (iv) $3.8 million related to cost-reduction initiatives, including severance charges associated with
workforce reductions due to the COVID-19 pandemic, and (v) $1.5 million related to the implementation of new IT systems for Jack Wolfskin.
(3) Represents an impairment charge related to Jack Wolfskin recognized in the second quarter of 2020.
(4) Amount represents a gain recorded to write-up the Company's former investment in Topgolf to its fair value in connection with the merger.
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