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CALLAWAY GOLF CP (ELY)

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Callaway Golf Company manufactures and sells golf clubs and golf balls, and sells golf accessories, under the Callaway Golf, Odyssey, Ben Hogan and Top-Flite brands. [1]

Contents

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Funds w/ ELY: 8
Rank: 344 / 351



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Company Analysis

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Profile and History [2]

Carlsbad, CA based Callaway Golf Company designs, manufactures and markets golf clubs (drivers, fairway woods, irons, wedges and putters), golf balls and golf accessories, such as golf bags, golf gloves, golf headwear, travel covers and bags, golf towels and golf umbrellas. The Company generally sells its products to golf retailers, sporting goods retailers and mass merchants, directly and through wholly owned subsidiaries and to third-party distributors. The Company also sells pre-owned golf products through its Website, www.callawaygolfpreowned.com. Its products are sold in the United States and in over 100 countries around the world. The Company currently has the following wholly-owned operating subsidiaries: Callaway Golf Sales Company, The Top-Flite Golf Company, Callaway Golf Interactive, Inc., Callaway Golf Europe Ltd., Callaway Golf K.K., Callaway Golf Korea Ltd., Callaway Golf Canada Ltd., Callaway Golf South Pacific PTY Ltd., and Callaway Golf (Shanghai) Trading Company, Ltd.

Approximately 56% of the Company’s net sales were derived from sales within the United States in both 2006 and 2005 and 58% in 2004. The Company primarily sells to both on- and off-course golf retailers and sporting goods retailers. Approximately 44% of the Company’s net sales were derived from sales for distribution outside of the United States in both 2006 and 2005 and 42% in 2004. The Company does business (either directly or through its subsidiaries and distributors) in more than 100 countries around the world. In Fiscal year 2006, sales in Japan and rest of Asia has been growing the most rapidly with rates of 47% and 29 % respectively from FY 2005. While US and European sales growth were 3% and -2% respectively.

The company reports its sales grouped into the following segments.


Summary Callaway Golf Net Sales by Segement [2]
Enlarge
Summary Callaway Golf Net Sales by Segement [2]
  • Drivers and Fairway Woods. This product category includes sales of the Company’s drivers, fairway woods and hybrid products, which are sold under the Callaway Golf, Ben Hogan and Top-Flite brands. The Company’s drivers, fairway woods and hybrid products are available in a variety of lofts, shafts and other specifications to accommodate the preferences and skill levels of all golfers. All of the Company’s current drivers, fairway woods and hybrid products conform to the current rules of the United States Golf Association (the “USGA”) or the Royal and Ancient Golf Club of St. Andrews (the “R&A”), as applicable to the markets in which the products are intended to be sold.
  • Irons. This product category includes sales of the Company’s irons and wedges, which are sold under the Callaway Golf, Ben Hogan and Top-Flite brands. The Company’s products compete at all price levels in the irons category.
  • Putters. This product category includes sales of the Company’s putters, which are sold under the Odyssey, Callaway Golf, Ben Hogan and Top-Flite brands. The Company’s products compete at all price levels in the putters category.
  • Golf Balls. This product category includes sales of the Company’s golf balls, which are sold under the Callaway Golf, Ben Hogan and Top-Flite brands. The Company’s products compete at all price levels in the golf ball category.
  • Accessories and Other. This product category includes sales of golf bags, golf gloves, golf headwear, golf footwear, golf towels, golf umbrellas and other golf accessories, as well as sales of pre-owned products through Callaway Golf Interactive, Inc., which was acquired in May 2004. Additionally, this product category includes royalties from licensing of the Company’s trademarks and service marks on products such as golf apparel, watches, travel gear and eyewear.
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News Feed

10/05/08 11:10 pm Power Point: Focus on what will move the lever (at Fortune)
09/18/08 11:09 am Callaway Golf: Raising Rating from Hold to Buy (at Seeking Alpha)
09/10/08 9:09 am Ryder Cup: Azinger Talks Golf With TSC (TheStreet.com TV)
09/09/08 10:09 am Callaway Golf Introduces the World's Smartest Driver: FT-iQ(TM) (Business Wire)
09/09/08 6:09 am [video] Ryder Cup: Azinger Talks Golf With TSC (at TheStreet.com)
09/08/08 6:09 am TSC Ratings' Updates: Callaway Golf (at TheStreet.com)
09/05/08 5:09 am CALLAWAY GOLF CO Files SEC form 8-K, Change in Directors or Principal Officers, Other Events, Financial Statements an (EDGAR Online)
09/04/08 5:09 pm Callaway Golf President and CEO Signs New Agreement (Business Wire)
09/04/08 9:09 am Callaway Golf sets regular dividend of 7 cents (AP)
09/03/08 6:09 pm Callaway Golf Company Declares Dividend (Business Wire)
More News...
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Risks

  • Golf products in general have short life cycle (generally less than 2 years)[2], especially in the woods and drivers category. It is difficult to predict changes in trends and customer preference, making it hard to forecast demand. Ultimately combination of these factors results in the high variability of the firm's profitability.
  • Tim Conder, an analyst from AG Edwards noted "Given the mature nature of the U.S. and European golf markets, static participation and stagnant/declining rounds played, one has to question the ability of major manufacturers in the industry to consistently and meaningfully grow earnings going forward." [3]
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Research Links

CALLAWAY GOLF CP Snapshot
CALLAWAY GOLF CP Leadership
CALLAWAY GOLF CP Fundamentals
CALLAWAY GOLF CP Technical Analysis
CALLAWAY GOLF CP Message Boards
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Options

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Notes

  1. ↑ Corporate Profile from Callaway Corp. Investor relations website. Accessed March 8, 2007
  2. ↑ 2.0 2.1 2.2 Callaway Golf Company Form 10-K for the year ended in December 31, 2006, Filed on March 1, 2007. Accessed on march 9, 2007.
  3. ↑ Callaway falls after analyst downgrade," Reuters, Feb. 9, 2007. Accessed on March 14, 2007.
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