Callaway Golf (ELY)
Q4 2009 Earnings Conference Call Transcript
January 26, 2010, 5:00 pm ET
Bradley Holiday - CFO and SEVP
George Fellows - President and CEO
Tom Shaw - Stifel Nicolaus
Dan Wewer - Raymond James
Rick Nelson - Stevens Incorporated
Todd Slater - Lazard Capital Management
Kristine Koerber - JMP Securities
Jeff Blaeser - Morgan Joseph & Company
Derek Leckow - Barrington Research
Previous Statements by ELY
» Callaway Golf Company Q2 2009 Earnings Call Transcript
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» Callaway Golf Company Q4 2008 Earnings Call Transcript
After the speakers remark, there will be a question and answer session. (Operator Instructions) Thank you. I will now turn the call over to Mr. Brad Holiday Chief Financial Officer. Mr. Holiday you may begin.
Thank you and good afternoon everyone welcome to Callaway Golf Company fourth quarter 2009 earnings conference call. Joining me today is George Fellows, President and CEO of Callaway Golf. During today's conference call, George will provide some opening remarks and I will provide an overview of the company's financial results and we will then open the call for questions.
I would like to point out that any comments made about future performance events or circumstances including statements relating to future growth, estimated sales, gross margins, operating expenses earnings per share, estimated charges and benefits related to the company's gross margin initiatives, the company's estimated 2010 tax rate foreign currency rate, capital expenditures and depreciation and amortization expenses are forward-looking statements subject to safe harbor protection under the federal securities law.
Such statements reflect our best judgment today based on current market trends and conditions. Actual results could differ materially from those projected in the forward-looking statements as a result of certain risks and uncertainties applicable to the company and its business. For details concerning these and other risks and uncertainties you should consult our earnings release issued today as well as part two, item 1A of our most recent Form 10-Q for the quarter ended June 30th, 2009, filed with the SEC together with the company's other reports subsequently filed with the SEC from time-to-time.
In addition during the call in order to assist interested parties with period over period comparisons on consistent and comparable basis, we will provide certain pro-forma information after the company's performance for 2009 and 2008 excluding charges associated with the company's gross margin initiatives and for 2008 again associated with the company's prior and reversal of energy derivative valuation account.
We will also provide information after the company's operating results on a currency neutral basis. In order to evaluate the company's core operating performance from the cash generation perspective we will also provide information concerning the company's earnings before interest, taxes, depreciation and amortization. This pro-forma information may include non-GAAP financial measures within the meaning of regulation G.
The information provided on the call today in the earnings release we issued today include a reconciliation of such non-GAAP financial measures to the most directly comparable financial measures prepared in accordance with GAAP. The earnings release is available on the investor relations section of the company's website at www.callawaygolf.com.
I would now like to turn the call over to George for a few opening remarks.
Thanks Brad and thank you all for joining us, the worldwide economy in general and the golf industry specifically have weathered the most severe downturn since the great depression and certainly in most of our collected professional careers. That fact has been certainly proclaimed quite prominently ad nauseum by most economic pundits. What is more important to note now however is that we come through this most trying period in a very solid condition and important way to our cautiously optimistic about prospects for significantly improved 2010.
While we would be naive to think that all bad influences are fully behind us, it would be far too negative not to recognize the many improvement signs pointing towards recovery in significant parts if not in total during the 2010 season. Going to more detail, to just highlight some of the indicators that give us optimism. Leading economic indicator has been pointing up for nine consecutive months supporting some of you that the recession has been ended, and we are in our recovery mode about not necessarily a rapid one.
Asia and South Pacific are clearly on the upswing and have been for more than one quarter. These ways appears to be leading the U.S. and Europe in their economic recovery and represent a important and profitable part of our business. As that head winds are reversed and are likely to restore meaningful portion of what was taken in 2009.
The trade outlook while cautious is generally quite positive with the pre-books of the new products in line with our expectations. Overall, retail inventories are in very healthy shape and may represent an opportunity as the season progresses. While we do not believe inventories will return to previous session levels some build backs of major brands could occur in 2010. We have received strong positive response to our new offerings not only from the trade but from the golf media as well receiving 15 medals, 10 of which were gold in golf size annual product preview more than any other manufacturer.
Our strength in competitive position going into the New Year reflects weakened secondary brands and our shared growth in most equipment categories in 2009 versus 2008. And this represents a stronger platform from which to grow as the season opens. This is true for both the U.S. and most international markets as well. And early sunbelt data appears positive despite weather issues encountered early on.