Callaway Golf Reports Record First Quarter Sales Of $261 Million; Net Income and Earnings Per Share More Than Double Previous Levels

Apr 25, 2001, 01:00 ET from Callaway Golf Company

    CARLSBAD, Calif., April 25 /PRNewswire/ -- Callaway Golf Company
 (NYSE:   ELY) today reported record sales for the first quarter ended March 31,
 2001.  Reported net sales increased 32% to $261.4 million from $197.4 million
 during the first quarter of 2000.  Net income increased 181% to $34.1 million
 in the first quarter of 2001 from $12.1 million in the first quarter of 2000.
 First quarter 2001 diluted earnings per share increased 181% to $0.47 from
 $0.17 in the same period last year.
     Excluding the impact of recently adopted accounting pronouncements
 (SAB 101 on Revenue Recognition and Emerging Issues Task Force 00-10 on
 Accounting for Shipping and Handling Revenues and Costs), first quarter net
 sales increased 25% to $258.9 million from $206.6 million last year.  Net
 income and diluted earnings per share increased 109% during the first quarter
 to $33.8 million and $0.47 per diluted share, respectively, as compared to
 $16.2 million and $0.22 per diluted share in the prior year.  Implementing
 SAB 101 effectively shifts revenue from one period into a subsequent period,
 while adopting EITF 00-10 does not change earnings for any period.
     "We are pleased with our overall first quarter results," stated Ely
 Callaway, Founder, Chairman, and CEO.  "Good momentum has continued from last
 year into the first quarter of 2001 due to the success of several of our new
 product introductions and key sales programs.  With the worldwide launch of
 the new Big Bertha(R) ERC(TM) II Drivers, Hawk Eye(R) VFT(TM) Drivers and
 Fairway Woods, and our Steelhead(TM) X-14(R) Pro Series Irons, we have
 continued to outpace the market and our brand is as strong as it's ever been."
     "Golf ball sales doubled in the first quarter of 2001 compared to the
 first quarter of 2000, reaching $12 million," continued Mr. Callaway.  "These
 growing golf ball sales are based upon the recognition that our 'Rule 35' golf
 balls incorporate technology that is the state of the art in modern golf ball
 design.  The 'Rule 35' has quietly become the #2 ball in use on the five major
 professional tours combined, #2 in tour earnings and in top ten finishes, and
 of course, it is the only ball used to score a 59 on tour this year -- one of
 only four balls in pro tour history to be used in such record-setting fashion.
 Annika Sorenstam has used the 'Rule 35' golf ball not only to shoot her record
 score of 59 during the Standard Register Ping in March, but she has also used
 it, along with our driver, fairway woods, irons and putter, to win a
 record-tying four straight LPGA tournaments.  On May 1, our 'Rule 35' golf
 balls will be joined by our new ball offering, the CB1(TM) Red and CB1 Blue
 golf balls.  We think these new two-piece high performance balls will be
 equally appealing representatives of the Callaway Golf brand."
     "The first quarter of 2001 was a very good quarter for our new Big Bertha
 ERC II and Big Bertha Hawk Eye VFT Drivers," added Mr. Callaway.  "The ERC II
 Forged Titanium Driver has already been selected as Driver of the Year for
 2001 by Choice Magazine -- the leading golf magazine in Japan.  The Hawk Eye
 VFT Driver appears to be well on its way to becoming the best selling premium
 driver in the U.S., just as others of the various Big Bertha driver models
 have every year since 1993."
     "In light of its success as the most used driver model on the European PGA
 Tour thus far in 2001 -- including its ranking as the #1 driver model in use
 at each of the last nine tournaments -- it should not surprise anyone to learn
 that the ERC II Driver has sold very well outside the U.S. where it fully
 conforms with the Rules of Golf as published by the Royal and Ancient Golf
 Club of St. Andrews," Mr. Callaway continued.  "But it may surprise some to
 know that we have already sold and delivered almost as many ERC II Drivers in
 the United States as we have outside the U.S. despite the fact that the sale
 and use of this club is strongly and aggressively opposed by the USGA.  This,
 in our opinion, is a strong testament to the performance benefits that the
 unique ERC II driver design technology can deliver to average and skilled
 golfers everywhere."
 
     First quarter net sales of $258.9 million (excluding the impact of the
 accounting pronouncements described above) by product category and region were
 as follows:
 
     --  Metal wood sales - $156.6 million (+55%) versus $100.8 million for Q1
         2000
     --  Iron sales - $65.5 million (-21%) versus $82.6 million for Q1 2000
     --  Ball sales - $12.1 million (101%) versus $6.0 million for Q1 2000
     --  Putters, accessories, and other sales - $24.7 million (+44%) versus
         $17.2 million for Q1 2000
     --  U.S. market sales - $142.5 million (+21%) versus $118.1 million for Q1
         2000
     --  International market sales - $116.4 million (+32%) versus
         $88.5 million for Q1 2000
 
     First quarter gross margin as a percent of net sales was 52% versus 45% in
 the comparable period last year.  This increase was primarily attributable to
 higher golf club margins resulting from manufacturing improvements, a product
 mix favoring higher margin metal woods, and improved golf ball margins.
     Selling and tour expenses for the first quarter were $53.2 million (20% of
 net sales), compared to $42.8 million (22% of net sales) in 2000.  The dollar
 increase was primarily due to increased advertising and promotional expenses
 related to the Company's new product launches.
     General and Administrative expenses for the first quarter of 2001 were
 $19.9 million (8% of net sales), compared to $17.5 million (9% of net sales)
 in 2000.  This dollar increase is primarily due to costs related to
 consolidating operating facilities, and an increase in the Company's provision
 for bad debt expense, partially offset by a decrease in depreciation expense.
     "We are encouraged with the results we saw in the first quarter from our
 manufacturing and operational initiatives," stated Brad Holiday, Executive
 Vice President and Chief Financial Officer.  "These initiatives contributed
 considerably to net income growth during the quarter.  Equally as important,
 our October 2000 retailer event enabled us to take orders and ship our
 products earlier in the selling season.  As a result, we were better able to
 meet market demand while improving our inventory management."
     In accordance with the Company's dividend practice for 2001, the dividend
 for the first quarter will be determined by the Board of Directors at its
 meeting in May 2001.
 
     BUSINESS OUTLOOK
 
         In light of recently adopted SEC Regulations, the Company has elected
         to provide certain forward-looking information in this press release.
         These statements are based on current information and expectations,
         and actual results may differ materially.  The Company undertakes no
         obligation to update this information.  See further disclaimer below.
 
     Full Year 2001
 
     The Company estimates:
     --  Revenue for the year will be approximately $906 million including the
         impact of both SAB 101 and EITF 00-10.
     --  Gross margins for the year will be approximately 51-52% of net
         revenues.
     --  Pre-tax profit for the year will be approximately 20-21% of net
         revenues.
     --  Earnings per share (fully diluted) for the year will be approximately
         $1.54 - $1.59.
 
     "While pleased with the strong results for the first quarter," commented
 Brad Holiday,  "we have not changed our full year forecast.  We factored in
 the potential impact on our business due to the unusually poor weather
 conditions in the U.S. and Europe, as well as growing economic concerns in
 both the U.S. and other countries."
 
     The Company will be holding a conference call at 2:00 p.m. PDT today,
 which will be hosted by Brad Holiday, Executive Vice President and Chief
 Financial Officer.  The call will be broadcast live over the Internet and can
 be accessed at http://www.callawaygolf.com.  To listen to the call, please go
 to the web site at least 15 minutes before the call to register and for
 instructions on how to access the broadcast.  Those wishing to listen via
 telephone should call (785) 749-3918 and ask to be connected to the Callaway
 Golf call.  A replay of the conference call will be available approximately
 one hour after the call ends through 5:00 p.m. PDT, April 27, by calling
 (877) 710-5298 or by accessing it via our home page at
 http://www.callawaygolf.com.
 
     Disclaimer: Statements used in this press release that relate to future
 plans, events, financial results or performance, including statements relating
 to the Company's future prospects, revenues and profitability, and the
 statements set forth in the business outlook section above, are
 forward-looking statements as defined under the Private Securities Litigation
 Reform Act of 1995.  These statements are based upon current information and
 expectations.  Actual results may differ materially from those anticipated as
 a result of certain risks and uncertainties, including but not limited to
 market acceptance of current and future products, including the Company's golf
 ball products and the Company's new golf club products (not all of which
 conform to USGA rules), adverse weather conditions and seasonality, adverse
 market and economic conditions, competitive pressures, delays, difficulties or
 increased costs in the manufacturing of the Company's golf club or ball
 products, or in the procurement of materials or resources needed to
 manufacture the Company's golf club or ball products (including business
 interruptions or increased costs resulting from power outages or shortages),
 and any actions taken by the USGA or other golf association that could have an
 adverse impact upon demand for the Company's products (such as the USGA's
 announcement that scores in rounds played with clubs that do not conform to
 USGA rules such as the Company's ERC(TM) II Forged Titanium Driver may not be
 posted for USGA handicap purposes).  For additional information concerning
 these and other risks and uncertainties, see Part I, Item 1 of the Company's
 Annual Report on Form 10-K for the year ended December 31, 2000, as well as
 other risks and uncertainties detailed from time to time in the Company's
 periodic reports on Forms 10-K, 10-Q and 8-K subsequently filed from time to
 time with the Securities and Exchange Commission.  Readers are cautioned not
 to place undue reliance on these forward-looking statements, which speak only
 as of the date hereof.  The Company undertakes no obligation to republish
 revised forward-looking statements to reflect events or circumstances after
 the date hereof or to reflect the occurrence of unanticipated events.
 
     Callaway Golf Company makes and sells Big Bertha(R) Metal Woods and Irons,
 including Big Bertha ERC(TM) II Forged Titanium Drivers, Big Bertha Hawk
 Eye(R) VFT(TM) and Big Bertha Hawk Eye VFT Pro Series Titanium Drivers and
 Fairway Woods, Big Bertha Steelhead Plus(TM) Stainless Steel Drivers and
 Fairway Woods, Hawk Eye Tungsten Injected(TM) Titanium Irons, Steelhead(TM)
 X-14(R) and Steelhead X-14 Pro Series Stainless Steel Irons.  Callaway Golf
 Company also makes and sells Odyssey(R) Putters, including White Hot(R),
 TriHot(TM), and Dual Force(R) Putters.  Callaway Golf Company makes and sells
 the Callaway Golf(R) "Rule 35(R)" Firmfeel(TM) and Softfeel(TM) golf balls,
 and the CB1(TM) Red and CB1 Blue golf balls.  For more information about
 Callaway Golf Company, please visit our Web sites at www.callawaygolf.com,
 www.callawaygolfball.com and www.odysseygolf.com.
 
     If you would like to receive Callaway Golf's press releases via e-mail in
 the future, please send your request to: newslist@callawaygolf.com.
 
 
                               Callaway Golf Company
                   Consolidated Condensed Statement of Operations
                       (In thousands, except per share data)
 
                                        First Quarter Ended
                                           (unaudited)
                                            March 31,
                                   2001                     2000
 
     Net sales                   $261,365      100%       $197,406      100%
     Cost of goods sold           124,458       48%        109,141       55%
     Gross profit                 136,907       52%         88,265       45%
 
     Operating expenses:
      Selling                      53,246       20%         42,750       22%
      General and
       administrative              19,850        8%         17,507        9%
      Research and
       development                  8,933        3%          8,217        4%
     Income from operations        54,878       21%         19,791       10%
 
     Other income, net                930                    1,585
 
     Income before income taxes
      and cumulative effect of
      accounting change            55,808       21%         21,376       11%
     Income tax provision          21,733                    8,278
 
     Income before cumulative
      effect of accounting
      change                       34,075       13%         13,098        7%
     Cumulative effect of
      accounting change                                       (957)
 
     Net income                   $34,075       13%        $12,141        6%
 
 
     Earnings per common share:
      Basic
       Income before cumulative
        effect of accounting
        change                      $0.49                    $0.18
       Cumulative effect of
        accounting change            0.00                   (0.01)
       Net income                   $0.49                    $0.17
 
      Diluted
       Income before cumulative
        effect of accounting
        change                      $0.47                    $0.18
       Cumulative effect of
        accounting change            0.00                   (0.01)
       Net income                   $0.47                    $0.17
 
     Common equivalent shares:
      Basic                        70,010                   71,199
      Diluted                      72,453                   72,482
 
 
                                                     March 31,   December 31,
                                                       2001          2000
     ASSETS                                         (unaudited)
     Current assets:
      Cash and cash equivalents                       $98,055       $102,596
      Accounts receivable, net                        159,520         58,836
      Inventories, net                                129,511        133,962
      Deferred taxes                                   27,535         29,354
      Other current assets                             26,611         17,721
       Total current assets                           441,232        342,469
 
     Property, plant and equipment, net               130,500        134,712
     Intangible assets, net                           115,308        112,824
     Other assets                                      36,681         40,929
                                                     $723,721       $630,934
 
     LIABILITIES AND SHAREHOLDERS' EQUITY
     Current liabilities:
      Accounts payable and accrued expenses           $65,434        $44,173
      Accrued employee compensation and benefits       20,478         22,574
      Accrued warranty expense                         39,630         39,363
      Income taxes payable                             10,242          3,196
       Total current liabilities                      135,784        109,306
 
     Long-term liabilities                              8,428          9,884
 
     Shareholders' equity                             579,509        511,744
                                                     $723,721       $630,934
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X11744869
 
 

SOURCE Callaway Golf Company
    CARLSBAD, Calif., April 25 /PRNewswire/ -- Callaway Golf Company
 (NYSE:   ELY) today reported record sales for the first quarter ended March 31,
 2001.  Reported net sales increased 32% to $261.4 million from $197.4 million
 during the first quarter of 2000.  Net income increased 181% to $34.1 million
 in the first quarter of 2001 from $12.1 million in the first quarter of 2000.
 First quarter 2001 diluted earnings per share increased 181% to $0.47 from
 $0.17 in the same period last year.
     Excluding the impact of recently adopted accounting pronouncements
 (SAB 101 on Revenue Recognition and Emerging Issues Task Force 00-10 on
 Accounting for Shipping and Handling Revenues and Costs), first quarter net
 sales increased 25% to $258.9 million from $206.6 million last year.  Net
 income and diluted earnings per share increased 109% during the first quarter
 to $33.8 million and $0.47 per diluted share, respectively, as compared to
 $16.2 million and $0.22 per diluted share in the prior year.  Implementing
 SAB 101 effectively shifts revenue from one period into a subsequent period,
 while adopting EITF 00-10 does not change earnings for any period.
     "We are pleased with our overall first quarter results," stated Ely
 Callaway, Founder, Chairman, and CEO.  "Good momentum has continued from last
 year into the first quarter of 2001 due to the success of several of our new
 product introductions and key sales programs.  With the worldwide launch of
 the new Big Bertha(R) ERC(TM) II Drivers, Hawk Eye(R) VFT(TM) Drivers and
 Fairway Woods, and our Steelhead(TM) X-14(R) Pro Series Irons, we have
 continued to outpace the market and our brand is as strong as it's ever been."
     "Golf ball sales doubled in the first quarter of 2001 compared to the
 first quarter of 2000, reaching $12 million," continued Mr. Callaway.  "These
 growing golf ball sales are based upon the recognition that our 'Rule 35' golf
 balls incorporate technology that is the state of the art in modern golf ball
 design.  The 'Rule 35' has quietly become the #2 ball in use on the five major
 professional tours combined, #2 in tour earnings and in top ten finishes, and
 of course, it is the only ball used to score a 59 on tour this year -- one of
 only four balls in pro tour history to be used in such record-setting fashion.
 Annika Sorenstam has used the 'Rule 35' golf ball not only to shoot her record
 score of 59 during the Standard Register Ping in March, but she has also used
 it, along with our driver, fairway woods, irons and putter, to win a
 record-tying four straight LPGA tournaments.  On May 1, our 'Rule 35' golf
 balls will be joined by our new ball offering, the CB1(TM) Red and CB1 Blue
 golf balls.  We think these new two-piece high performance balls will be
 equally appealing representatives of the Callaway Golf brand."
     "The first quarter of 2001 was a very good quarter for our new Big Bertha
 ERC II and Big Bertha Hawk Eye VFT Drivers," added Mr. Callaway.  "The ERC II
 Forged Titanium Driver has already been selected as Driver of the Year for
 2001 by Choice Magazine -- the leading golf magazine in Japan.  The Hawk Eye
 VFT Driver appears to be well on its way to becoming the best selling premium
 driver in the U.S., just as others of the various Big Bertha driver models
 have every year since 1993."
     "In light of its success as the most used driver model on the European PGA
 Tour thus far in 2001 -- including its ranking as the #1 driver model in use
 at each of the last nine tournaments -- it should not surprise anyone to learn
 that the ERC II Driver has sold very well outside the U.S. where it fully
 conforms with the Rules of Golf as published by the Royal and Ancient Golf
 Club of St. Andrews," Mr. Callaway continued.  "But it may surprise some to
 know that we have already sold and delivered almost as many ERC II Drivers in
 the United States as we have outside the U.S. despite the fact that the sale
 and use of this club is strongly and aggressively opposed by the USGA.  This,
 in our opinion, is a strong testament to the performance benefits that the
 unique ERC II driver design technology can deliver to average and skilled
 golfers everywhere."
 
     First quarter net sales of $258.9 million (excluding the impact of the
 accounting pronouncements described above) by product category and region were
 as follows:
 
     --  Metal wood sales - $156.6 million (+55%) versus $100.8 million for Q1
         2000
     --  Iron sales - $65.5 million (-21%) versus $82.6 million for Q1 2000
     --  Ball sales - $12.1 million (101%) versus $6.0 million for Q1 2000
     --  Putters, accessories, and other sales - $24.7 million (+44%) versus
         $17.2 million for Q1 2000
     --  U.S. market sales - $142.5 million (+21%) versus $118.1 million for Q1
         2000
     --  International market sales - $116.4 million (+32%) versus
         $88.5 million for Q1 2000
 
     First quarter gross margin as a percent of net sales was 52% versus 45% in
 the comparable period last year.  This increase was primarily attributable to
 higher golf club margins resulting from manufacturing improvements, a product
 mix favoring higher margin metal woods, and improved golf ball margins.
     Selling and tour expenses for the first quarter were $53.2 million (20% of
 net sales), compared to $42.8 million (22% of net sales) in 2000.  The dollar
 increase was primarily due to increased advertising and promotional expenses
 related to the Company's new product launches.
     General and Administrative expenses for the first quarter of 2001 were
 $19.9 million (8% of net sales), compared to $17.5 million (9% of net sales)
 in 2000.  This dollar increase is primarily due to costs related to
 consolidating operating facilities, and an increase in the Company's provision
 for bad debt expense, partially offset by a decrease in depreciation expense.
     "We are encouraged with the results we saw in the first quarter from our
 manufacturing and operational initiatives," stated Brad Holiday, Executive
 Vice President and Chief Financial Officer.  "These initiatives contributed
 considerably to net income growth during the quarter.  Equally as important,
 our October 2000 retailer event enabled us to take orders and ship our
 products earlier in the selling season.  As a result, we were better able to
 meet market demand while improving our inventory management."
     In accordance with the Company's dividend practice for 2001, the dividend
 for the first quarter will be determined by the Board of Directors at its
 meeting in May 2001.
 
     BUSINESS OUTLOOK
 
         In light of recently adopted SEC Regulations, the Company has elected
         to provide certain forward-looking information in this press release.
         These statements are based on current information and expectations,
         and actual results may differ materially.  The Company undertakes no
         obligation to update this information.  See further disclaimer below.
 
     Full Year 2001
 
     The Company estimates:
     --  Revenue for the year will be approximately $906 million including the
         impact of both SAB 101 and EITF 00-10.
     --  Gross margins for the year will be approximately 51-52% of net
         revenues.
     --  Pre-tax profit for the year will be approximately 20-21% of net
         revenues.
     --  Earnings per share (fully diluted) for the year will be approximately
         $1.54 - $1.59.
 
     "While pleased with the strong results for the first quarter," commented
 Brad Holiday,  "we have not changed our full year forecast.  We factored in
 the potential impact on our business due to the unusually poor weather
 conditions in the U.S. and Europe, as well as growing economic concerns in
 both the U.S. and other countries."
 
     The Company will be holding a conference call at 2:00 p.m. PDT today,
 which will be hosted by Brad Holiday, Executive Vice President and Chief
 Financial Officer.  The call will be broadcast live over the Internet and can
 be accessed at http://www.callawaygolf.com.  To listen to the call, please go
 to the web site at least 15 minutes before the call to register and for
 instructions on how to access the broadcast.  Those wishing to listen via
 telephone should call (785) 749-3918 and ask to be connected to the Callaway
 Golf call.  A replay of the conference call will be available approximately
 one hour after the call ends through 5:00 p.m. PDT, April 27, by calling
 (877) 710-5298 or by accessing it via our home page at
 http://www.callawaygolf.com.
 
     Disclaimer: Statements used in this press release that relate to future
 plans, events, financial results or performance, including statements relating
 to the Company's future prospects, revenues and profitability, and the
 statements set forth in the business outlook section above, are
 forward-looking statements as defined under the Private Securities Litigation
 Reform Act of 1995.  These statements are based upon current information and
 expectations.  Actual results may differ materially from those anticipated as
 a result of certain risks and uncertainties, including but not limited to
 market acceptance of current and future products, including the Company's golf
 ball products and the Company's new golf club products (not all of which
 conform to USGA rules), adverse weather conditions and seasonality, adverse
 market and economic conditions, competitive pressures, delays, difficulties or
 increased costs in the manufacturing of the Company's golf club or ball
 products, or in the procurement of materials or resources needed to
 manufacture the Company's golf club or ball products (including business
 interruptions or increased costs resulting from power outages or shortages),
 and any actions taken by the USGA or other golf association that could have an
 adverse impact upon demand for the Company's products (such as the USGA's
 announcement that scores in rounds played with clubs that do not conform to
 USGA rules such as the Company's ERC(TM) II Forged Titanium Driver may not be
 posted for USGA handicap purposes).  For additional information concerning
 these and other risks and uncertainties, see Part I, Item 1 of the Company's
 Annual Report on Form 10-K for the year ended December 31, 2000, as well as
 other risks and uncertainties detailed from time to time in the Company's
 periodic reports on Forms 10-K, 10-Q and 8-K subsequently filed from time to
 time with the Securities and Exchange Commission.  Readers are cautioned not
 to place undue reliance on these forward-looking statements, which speak only
 as of the date hereof.  The Company undertakes no obligation to republish
 revised forward-looking statements to reflect events or circumstances after
 the date hereof or to reflect the occurrence of unanticipated events.
 
     Callaway Golf Company makes and sells Big Bertha(R) Metal Woods and Irons,
 including Big Bertha ERC(TM) II Forged Titanium Drivers, Big Bertha Hawk
 Eye(R) VFT(TM) and Big Bertha Hawk Eye VFT Pro Series Titanium Drivers and
 Fairway Woods, Big Bertha Steelhead Plus(TM) Stainless Steel Drivers and
 Fairway Woods, Hawk Eye Tungsten Injected(TM) Titanium Irons, Steelhead(TM)
 X-14(R) and Steelhead X-14 Pro Series Stainless Steel Irons.  Callaway Golf
 Company also makes and sells Odyssey(R) Putters, including White Hot(R),
 TriHot(TM), and Dual Force(R) Putters.  Callaway Golf Company makes and sells
 the Callaway Golf(R) "Rule 35(R)" Firmfeel(TM) and Softfeel(TM) golf balls,
 and the CB1(TM) Red and CB1 Blue golf balls.  For more information about
 Callaway Golf Company, please visit our Web sites at www.callawaygolf.com,
 www.callawaygolfball.com and www.odysseygolf.com.
 
     If you would like to receive Callaway Golf's press releases via e-mail in
 the future, please send your request to: newslist@callawaygolf.com.
 
 
                               Callaway Golf Company
                   Consolidated Condensed Statement of Operations
                       (In thousands, except per share data)
 
                                        First Quarter Ended
                                           (unaudited)
                                            March 31,
                                   2001                     2000
 
     Net sales                   $261,365      100%       $197,406      100%
     Cost of goods sold           124,458       48%        109,141       55%
     Gross profit                 136,907       52%         88,265       45%
 
     Operating expenses:
      Selling                      53,246       20%         42,750       22%
      General and
       administrative              19,850        8%         17,507        9%
      Research and
       development                  8,933        3%          8,217        4%
     Income from operations        54,878       21%         19,791       10%
 
     Other income, net                930                    1,585
 
     Income before income taxes
      and cumulative effect of
      accounting change            55,808       21%         21,376       11%
     Income tax provision          21,733                    8,278
 
     Income before cumulative
      effect of accounting
      change                       34,075       13%         13,098        7%
     Cumulative effect of
      accounting change                                       (957)
 
     Net income                   $34,075       13%        $12,141        6%
 
 
     Earnings per common share:
      Basic
       Income before cumulative
        effect of accounting
        change                      $0.49                    $0.18
       Cumulative effect of
        accounting change            0.00                   (0.01)
       Net income                   $0.49                    $0.17
 
      Diluted
       Income before cumulative
        effect of accounting
        change                      $0.47                    $0.18
       Cumulative effect of
        accounting change            0.00                   (0.01)
       Net income                   $0.47                    $0.17
 
     Common equivalent shares:
      Basic                        70,010                   71,199
      Diluted                      72,453                   72,482
 
 
                                                     March 31,   December 31,
                                                       2001          2000
     ASSETS                                         (unaudited)
     Current assets:
      Cash and cash equivalents                       $98,055       $102,596
      Accounts receivable, net                        159,520         58,836
      Inventories, net                                129,511        133,962
      Deferred taxes                                   27,535         29,354
      Other current assets                             26,611         17,721
       Total current assets                           441,232        342,469
 
     Property, plant and equipment, net               130,500        134,712
     Intangible assets, net                           115,308        112,824
     Other assets                                      36,681         40,929
                                                     $723,721       $630,934
 
     LIABILITIES AND SHAREHOLDERS' EQUITY
     Current liabilities:
      Accounts payable and accrued expenses           $65,434        $44,173
      Accrued employee compensation and benefits       20,478         22,574
      Accrued warranty expense                         39,630         39,363
      Income taxes payable                             10,242          3,196
       Total current liabilities                      135,784        109,306
 
     Long-term liabilities                              8,428          9,884
 
     Shareholders' equity                             579,509        511,744
                                                     $723,721       $630,934
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X11744869
 
 SOURCE  Callaway Golf Company

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