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To: caly who wrote (27)	1/16/2008 9:02:40 PM
From: caly	Read Replies (1) \| Respond to of 178

Nice results from Callaway it seems. Callaway Golf Company Releases Preliminary Full Year 2007 Results Wednesday January 16, 8:31 pm ET CARLSBAD, Calif.--(BUSINESS WIRE)--Callaway Golf Company (NYSE:ELY - News) today announced that, based on current information, the Company estimates net sales for the year ended December 31, 2007 to increase approximately 10% to a record $1.125 billion with corresponding earnings per diluted share of $0.79 to $0.81, including non-cash employee equity-based compensation charges associated with FAS 123R. These results are based on an estimated 67.5 million diluted shares outstanding and also include after-tax charges of approximately $0.08 per diluted share related to the gross margin improvement initiatives announced in November 2006. Excluding charges for these gross margin initiatives, pro forma earnings per diluted share are estimated at $0.87 to $0.89. ADVERTISEMENT For the full year 2006, the Company reported net sales of $1.018 billion and fully diluted earnings per share of $0.34 (on 68.5 million shares), including non-cash FAS 123R charges. Those results also included after-tax charges of $0.04 for the Top-Flite integration, $0.03 for restructuring initiatives announced in September 2005, and $0.02 for gross margin improvement initiatives. Excluding these charges, pro forma fully diluted earnings per share was $0.43. Business Update “We are very pleased with our strong financial performance for the year,” commented George Fellows, President and CEO of Callaway Golf. “We delivered on our stated objectives for the year, including an improved product development process, the addition of key management talent, increased market share in woods, improved gross margins and inventory management, and the successful re-launch of the Top-Flite brand.” “Looking forward,” continued Mr. Fellows, “we are optimistic that we can build on this momentum. In fact, we have several new and exciting products for 2008, and in combination with our focus on business processes and cost controls, we believe we’ll be positioned to drive shareholder value. We look forward to our upcoming earnings call and will provide additional detail on our expectations for 2008 at that time.” Details of Full Year Results Sales The estimated increase in sales for the year of approximately 10% is attributable to increases in the woods category driven by the success of the FT-5 and FT-i Fusion drivers, increased sales in the accessories category, strong irons sales due to the success of the X-20 line of irons, as well as increased putter sales. Gross Margins Gross margins as a percentage of net sales for 2007 are estimated to be approximately 44%. Excluding pre-tax charges of $9 million related to gross margin initiatives, it is estimated that pro forma gross margins for 2007 will be approximately 45%. For the full year 2006, reported gross margins were 39%. Excluding pre-tax charges of $4 million related to the Top-Flite integration and $2 million for gross margin initiatives, pro-forma gross margins for 2006 were 40%. Operating Expenses The Company estimates that its operating expenses for 2007 will be approximately $402 million compared to $361 million in 2006. Excluding pre-tax charges of $3 million related to the September 2005 restructuring initiatives and Top-Flite integration, 2006 pro forma operating expenses were $358 million. The year over year increase is in line with the Company’s most recent estimate and includes increases related to employee incentive compensation, additional marketing to support brand initiatives, the impact of foreign currency, and additional legal expense associated with enforcing the Company’s golf ball patent rights. Conference Call The Company will release actual fourth quarter and full year 2007 financial results on January 31, 2008. A conference call and webcast will also take place at that time. During the call, the Company will provide guidance for full year 2008 and additional information on fourth quarter and full year 2007 financial results.