HIGHLIGHTS
- Q3 Consolidated Revenues and Adjusted EBITDA were ahead of
expectations.
- The Callaway brand maintained its #1 position in U.S. market
share in total golf clubs and achieved record U.S. market share in
golf ball.
- The Company further strengthened its available liquidity
position to $863 million, increasing
$129 million year-over-year.
- The Company reaffirmed its expectation for full year positive
Adjusted Free Cash Flow for the total Company and Topgolf.
- The Company lowered full year 2024 revenue guidance to
approximately $4.2 billion and
Adjusted EBITDA to a range of $560 to
$570 million. The Company maintained
prior Topgolf revenue guidance of approximately $1.79 billion and increased Topgolf Adjusted
EBITDA guidance to approximately $315
million.
- The Company continues to believe that separating Topgolf from
the core business will create shareholder value and is fully
engaged in this work.
CARLSBAD, Calif., Nov. 12,
2024 /PRNewswire/ -- Topgolf Callaway Brands Corp.
(the "Company" or "Topgolf Callaway Brands", "we", "our", "us")
(NYSE: MODG) announced its financial results for the third quarter
ended September 30, 2024.
"We are pleased to announce results that exceeded our
expectations for Q3 amid a challenging macroeconomic backdrop,"
commented Chip Brewer, President and
Chief Executive Officer of Topgolf Callaway Brands. "Topgolf
performed consistent with our revenue expectations and continued to
show strong venue profitability despite the challenging sales
environment. This allows us to maintain Topgolf's prior revenue
guidance and raise its EBITDA outlook for the year. In our
Golf Equipment segment, Callaway continues to lead, maintaining its
overall #1 share in golf clubs and with 2024 trending to be the
third consecutive year that Callaway has earned this top position.
In our ball business, our strategic investments in this category
and the rebranding of our premium golf ball line are delivering
steady gains in both market share and manufacturing yield. Our U.S.
golf ball market share established a new record level for the
quarter. Meanwhile in Active Lifestyle both TravisMathew and Jack
Wolfskin made progress towards their long-term business strategies.
Furthermore, on the strategic front, we continue to believe that
separating Topgolf from the core business will create shareholder
value and we are fully engaged in this work."
CONSOLIDATED RESULTS
The Company announced the following GAAP and non-GAAP financial
results for the three and nine months ended September 30, 2024 and 2023:
|
GAAP
RESULTS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in millions, except
percentages
and per share data)
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
2024
|
|
2023
|
|
$
Change
|
|
%
Change
|
|
2024
|
|
2023
|
|
$
Change
|
|
%
Change
|
|
Net revenues
|
$
1,012.9
|
|
$
1,040.6
|
|
$
(27.7)
|
|
(2.7) %
|
|
$
3,314.9
|
|
$
3,387.7
|
|
$ (72.8)
|
|
(2.1) %
|
|
Income from
operations
|
33.7
|
|
73.8
|
|
(40.1)
|
|
(54.3) %
|
|
203.6
|
|
270.3
|
|
(66.7)
|
|
(24.7) %
|
|
Other expense,
net
|
(56.7)
|
|
(47.1)
|
|
(9.6)
|
|
20.4 %
|
|
(162.7)
|
|
(151.2)
|
|
(11.5)
|
|
7.6 %
|
|
(Loss) income before
taxes
|
(23.0)
|
|
26.7
|
|
(49.7)
|
|
(186.1) %
|
|
40.9
|
|
119.1
|
|
(78.2)
|
|
(65.7) %
|
|
Income tax
benefit
|
(19.4)
|
|
(3.0)
|
|
(16.4)
|
|
n/m
|
|
(24.1)
|
|
(53.0)
|
|
28.9
|
|
(54.5) %
|
|
Net (loss)
income
|
$
(3.6)
|
|
$ 29.7
|
|
$
(33.3)
|
|
(112.1) %
|
|
$ 65.0
|
|
$ 172.1
|
|
$
(107.1)
|
|
(62.2) %
|
|
(Loss) earnings per
share - diluted
|
$ (0.02)
|
|
$ 0.16
|
|
$
(0.18)
|
|
(112.5) %
|
|
$ 0.35
|
|
$ 0.88
|
|
$ (0.53)
|
|
(60.2) %
|
|
Weighted-average common
shares outstanding - diluted
|
183.8
|
|
201.2
|
|
(17.4)
|
|
(8.6) %
|
|
199.3
|
|
201.3
|
|
(2.0)
|
|
(1.0) %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NON-GAAP RESULTS
Non-GAAP results exclude certain non-cash and non-recurring
adjustments as defined in the Additional Information and
Disclosures section of this release. The Company has also provided
a reconciliation of the non-GAAP information to the most directly
comparable GAAP information in the schedules to this release.
|
(in millions,
except
percentages and per
share data)
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
2024
|
|
2023
|
|
$
Change
|
|
%
Change
|
|
Constant
Currency
vs. 2023(1)
|
|
2024
|
|
2023
|
|
$
Change
|
|
%
Change
|
|
Constant
Currency
vs. 2023(1)
|
|
Net revenues
|
$ 1,012.9
|
|
$ 1,040.6
|
|
$
(27.7)
|
|
(2.7) %
|
|
(2.9) %
|
|
$ 3,314.9
|
|
$ 3,387.7
|
|
$
(72.8)
|
|
(2.1) %
|
|
(1.7) %
|
|
Non-GAAP Income from
operations
|
$ 43.0
|
|
$ 82.2
|
|
$
(39.2)
|
|
(47.7) %
|
|
(48.6) %
|
|
$
237.4
|
|
$
297.9
|
|
$
(60.5)
|
|
(20.3) %
|
|
(16.9) %
|
|
Non-GAAP Net
income
|
$ 4.3
|
|
$ 35.8
|
|
$
(31.5)
|
|
(88.0) %
|
|
|
|
$
101.8
|
|
$
141.8
|
|
$
(40.0)
|
|
(28.2) %
|
|
|
|
Non-GAAP Earnings per
share - diluted
|
$ 0.02
|
|
$ 0.19
|
|
$
(0.17)
|
|
(87.7) %
|
|
|
|
$ 0.54
|
|
$ 0.73
|
|
$
(0.19)
|
|
(26.0) %
|
|
|
|
Non-GAAP Adjusted
EBITDA
|
$
119.8
|
|
$
163.3
|
|
$
(43.5)
|
|
(26.6) %
|
|
|
|
$
486.3
|
|
$
526.8
|
|
$
(40.5)
|
|
(7.7) %
|
|
|
|
|
(1) See
"Additional Information and Disclosures—Non-GAAP Information" for
the calculation methodology of constant currency
measures.
|
|
THIRD QUARTER 2024 CONSOLIDATED RESULTS
COMMENTARY
(All comparisons to prior periods are calculated on a
year-over-year basis, unless otherwise noted)
The Company's net revenue of $1,012.9
million decreased 2.7% year-over-year, primarily driven by
an (11.1)% decrease in Active Lifestyle, as expected, which was
partially offset by revenue growth at Topgolf of 1.2%. These
results exceeded the Company's guidance range, primarily due to the
timing of shipments in its products businesses.
Net income decreased $33.3 million to a net loss of $3.6 million on a GAAP basis. Net income
decreased $31.5 million to
$4.3 million on a non-GAAP basis
compared to the same period in the prior year. This result was due
to a decrease in segment operating income as discussed below.
Adjusted EBITDA of $119.8 million for the third quarter
decreased 26.6% compared to the prior year, and was ahead of
expectations due to better than expected revenue in the third
quarter as well as strong venue profitability at Topgolf.
SEGMENT RESULTS
SEGMENT NET REVENUES
The table below provides net revenues by segment for the periods
presented:
|
|
|
|
|
|
|
|
|
(in millions,
except percentages)
|
Three Months Ended
September 30,
|
|
Constant
Currency
vs. 2023(1)
|
|
Nine Months Ended
September 30,
|
|
Constant
Currency
vs. 2023(1)
|
|
2024
|
|
2023
|
|
%
Change
|
|
%
Change
|
|
2024
|
|
2023
|
|
%
Change
|
|
%
Change
|
|
Topgolf
|
$
453.2
|
|
$
447.7
|
|
1.2 %
|
|
1.0 %
|
|
$
1,370.4
|
|
$
1,322.0
|
|
3.7 %
|
|
3.5 %
|
|
Golf
Equipment
|
293.5
|
|
293.4
|
|
— %
|
|
0.1 %
|
|
1,157.2
|
|
1,188.1
|
|
(2.6) %
|
|
(1.5) %
|
|
Active
Lifestyle
|
266.2
|
|
299.5
|
|
(11.1) %
|
|
(11.6) %
|
|
787.3
|
|
877.6
|
|
(10.3) %
|
|
(9.7) %
|
|
Net Revenues
|
$
1,012.9
|
|
$
1,040.6
|
|
(2.7) %
|
|
(2.9) %
|
|
$
3,314.9
|
|
$
3,387.7
|
|
(2.1) %
|
|
(1.7) %
|
|
|
(1) See
"Additional Information and Disclosures—Non-GAAP Information" for
the calculation methodology of constant currency
measures.
|
|
SEGMENT OPERATING INCOME
The table below provides operating income by segment for the
periods presented:
|
|
|
|
|
(in millions, except
percentages)
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
2024
|
|
2023
|
|
Change
|
|
2024
|
|
2023
|
|
Change
|
|
Topgolf
|
$ 28.3
|
|
$ 38.9
|
|
(27.2) %
|
|
$ 87.3
|
|
$ 85.7
|
|
1.9 %
|
|
% of segment
revenue
|
6.2 %
|
|
8.7 %
|
|
(250) bps
|
|
6.4 %
|
|
6.5 %
|
|
(10)
bps
|
|
Golf
Equipment
|
26.8
|
|
35.2
|
|
(23.9) %
|
|
186.3
|
|
213.2
|
|
(12.6) %
|
|
% of segment
revenue
|
9.1 %
|
|
12.0 %
|
|
(290) bps
|
|
16.1 %
|
|
17.9 %
|
|
(180) bps
|
|
Active
Lifestyle
|
19.4
|
|
40.0
|
|
(51.5) %
|
|
58.8
|
|
96.8
|
|
(39.3) %
|
|
% of segment
revenue
|
7.3 %
|
|
13.4 %
|
|
(610) bps
|
|
7.5 %
|
|
11.0 %
|
|
(350) bps
|
|
Total Segment Operating
Income
|
$ 74.5
|
|
$ 114.1
|
|
(34.7) %
|
|
$ 332.4
|
|
$ 395.7
|
|
(16.0) %
|
|
% of total segment
revenue
|
7.4 %
|
|
11.0 %
|
|
(360) bps
|
|
10.0 %
|
|
11.7 %
|
|
(170) bps
|
|
Constant
Currency
Total Segment Operating
Income
|
|
|
|
|
(35.4) %
|
|
|
|
|
|
(13.4) %
|
|
|
|
|
THIRD QUARTER 2024 SEGMENT COMMENTARY
(All comparisons to prior periods are calculated on a
year-over-year basis, unless otherwise noted)
Topgolf
- Segment revenue increased $5.5
million or 1.2%, to $453.2
million, driven primarily by new venues.
- Same venue sales declined 11%, which was roughly consistent
with expectations.
- Segment operating income decreased $10.6
million, or (27.2)%, to $28.3
million due to increased depreciation related to new venues
and lower same venue sales.
- Segment Adjusted EBITDA decreased $6.5
million, or (7.2)%, to $84.4
million, primarily due to lower same venue sales.
Golf Equipment
- Segment revenue increased $0.1
million to $293.5 million,
slightly ahead of expectations primarily due to the timing of
shipments in the products businesses.
- Segment operating income decreased $8.4
million, which was in line with our expectations and
primarily due to increased freight costs.
Active Lifestyle
- Segment revenue decreased $33.3
million or 11.1% to $266.2
million, resulting primarily from lower European wholesale
revenue at Jack Wolfskin, as expected.
- Segment operating income decreased $20.6
million due to the lower revenue and increased freight
costs.
The following is a reconciliation of total segment operating
income to income before income taxes for the periods presented:
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
(in
millions)
|
2024
|
|
2023
|
|
$
Change
|
|
2024
|
|
2023
|
|
$
Change
|
|
Total segment operating
income:
|
$
74.5
|
|
$
114.1
|
|
$
(39.6)
|
|
$
332.4
|
|
$
395.7
|
|
$
(63.3)
|
|
Reconciling
items(1)
|
(40.8)
|
|
(40.3)
|
|
(0.5)
|
|
(128.8)
|
|
(125.4)
|
|
(3.4)
|
|
Income from
operations
|
33.7
|
|
73.8
|
|
(40.1)
|
|
203.6
|
|
270.3
|
|
(66.7)
|
|
Interest expense,
net
|
(57.7)
|
|
(52.3)
|
|
(5.4)
|
|
(173.5)
|
|
(153.6)
|
|
(19.9)
|
|
Other income,
net
|
1.0
|
|
5.2
|
|
(4.2)
|
|
10.8
|
|
2.4
|
|
8.4
|
|
(Loss) income before
income taxes
|
$
(23.0)
|
|
$
26.7
|
|
$
(49.7)
|
|
$
40.9
|
|
$
119.1
|
|
$
(78.2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Includes
corporate overhead and certain non-recurring and non-cash items as
described in the schedules to this release.
|
|
2024 BALANCE SHEET HIGHLIGHTS
- Inventory decreased $70.1 million
year-over-year to $666 million,
driven by decreases in both the Active Lifestyle and Golf Equipment
segments.
- Available liquidity, which is comprised of cash on hand plus
availability under the Company's credit facilities, increased
$129.0 million, or approximately 18%,
to $863 million compared to
September 30, 2023.
BUSINESS OUTLOOK
|
2024 FULL YEAR
OUTLOOK
|
|
(in millions, except
where noted otherwise and for percentages and per share
data)
|
|
|
|
|
|
2024
Current
Estimate
|
2024
Previous
Estimate
|
2023
As
Reported
|
|
Consolidated Net
Revenues
|
Approx.
$4.20B
|
$4.20B -
$4.26B
|
$4.28B
|
|
Topgolf
Revenue
|
Approx.
$1.79B
|
Approx.
$1.79B
|
$1.76B
|
|
Topgolf Same Venue
Sales Growth
|
Down very high
single
digits to low double digits
|
Down very high
single
digits to low double digits
|
1 %
|
|
Consolidated Adjusted
EBITDA(1)
|
$560 - $570
|
$570 - $590
|
$597
|
|
Topgolf Adjusted
EBITDA(1)
|
Approx. $315
|
Approx. $310
|
$304
|
|
Non-GAAP Diluted
Earnings per Share(1)
|
$0.08 -
$0.13
|
$0.11 -
$0.21
|
$0.45
|
|
Diluted Shares
Outstanding
|
Approx. 185
|
Approx. 185
|
201
|
|
|
(1) Non-GAAP
measure. See "Additional Information and Disclosures—Non-GAAP
Information" for more information and the schedules to this press
release for reconciliations to the most directly comparable GAAP
measure.
|
|
2024 FOURTH QUARTER
OUTLOOK
|
|
(in
millions)
|
|
|
|
|
Q4
2024
Estimate
|
|
Q4
2023
As
Reported
|
|
Consolidated Net
Revenues
|
Approx. $885
|
|
$897
|
|
Consolidated Adjusted
EBITDA
|
$74 - $84
|
|
$70
|
|
|
|
|
ADDITIONAL INFORMATION AND DISCLOSURES
Conference Call and Webcast
The Company will be holding a conference call at 2:00 p.m. Pacific time today, November 12, 2024, to discuss the Company's
financial results, outlook and business. The call will be webcast
live on our investor relations website at
https://www.topgolfcallawaybrands.com/news-and-events/presentations.
A replay of the conference call will be available approximately two
hours after the call ends. The replay may be accessed through the
Investor Relations section of the Company's website at
https://www.topgolfcallawaybrands.com.
Non-GAAP Information
The GAAP results contained in this press release and the
financial statement schedules attached to this press release have
been prepared in accordance with accounting principles generally
accepted in the United States of
America ("GAAP"). To supplement the GAAP results, the
Company has provided certain non-GAAP financial information as
follows:
Constant Currency Basis. The Company provided
certain information regarding the Company's financial results or
projected financial results on a "constant currency basis" or as
"constant currency" results. This information estimates the impact
of changes in foreign currency exchange rates on the translation of
the Company's current or projected future period financial results
as compared to the applicable comparable period. This impact is
derived by taking the current or projected local currency results
and translating them into U.S. dollars based upon the foreign
currency exchange rates for the applicable comparable period. It
does not include any other effect of changes in foreign currency
rates on the Company's results or business.
Non-Recurring and Non-cash Adjustments. The Company
provided information excluding the non-cash amortization of
purchase accounting adjustments associated with acquired intangible
assets, including acquired customer and distributor relationships
and acquired developed technology related to the Company's merger
with Topgolf, acquisitions of Jack Wolfskin, TravisMathew and OGIO,
and distribution rights in the Korea apparel market (collectively,
the "Acquisitions"). While the amortization of acquired intangible
assets is excluded from the calculation of non-GAAP net income, the
revenue and operating costs associated with these acquired
companies is reflected in non-GAAP net income calculations, as well
as the acquired assets that contribute to revenue generation. For
2024, non-recurring items include charges related to restructuring
and reorganization in the Active Lifestyle segment, currency
translation adjustments for the dissolution of a foreign
subsidiary, the 2024 debt repricing, a 2023 cybersecurity incident,
impairment and abandonment of the Shankstars media game, costs
incurred related to the separation of Topgolf, and IT integration
and implementation costs stemming primarily from the merger with
Topgolf. For 2023, non-recurring items include legal costs, credit
agency fees, and losses associated with our 2023 debt modification,
combined with IT integration and implementation costs stemming
primarily from the merger with Topgolf, charges related to the
impairment and abandonment of the Shankstars media game, costs
related to a 2023 cybersecurity incident and restructuring and
reorganization charges in our Topgolf and Active Lifestyle
segments.
Adjusted EBITDA. The Company provides information about
its results excluding interest, taxes, depreciation and
amortization expenses, stock compensation expense, non-cash lease
amortization expense, and the non-recurring and non-cash items
referenced above.
Adjusted Free Cash Flow. The Company defines Adjusted
Free Cash Flow as cash flows from operating activities, less
capital expenditures net of proceeds from lease financing and net
of proceeds from government grants.
In addition, the Company has included in the schedules attached
to this release a reconciliation of certain non-GAAP information to
the most directly comparable GAAP information. The non-GAAP
information presented in this release and related schedules should
not be considered in isolation or as a substitute for any measure
derived in accordance with GAAP. The non-GAAP information may also
be inconsistent with the manner in which similar measures are
derived or used by other companies. Management uses such non-GAAP
information for financial and operational decision-making purposes
and as a means to evaluate period-over-period comparisons and in
forecasting the Company's business going forward. Management
believes that the presentation of such non-GAAP information, when
considered in conjunction with the most directly comparable GAAP
information, provides additional useful comparative information for
investors in their assessment of the underlying performance, and,
in some cases, financial condition, of the Company's business with
regard to these items.
For forward-looking Adjusted EBITDA, non-GAAP diluted earnings
per share, and Topgolf Adjusted EBITDA (together, the "Projected
Non-GAAP Measures") information provided in this release,
reconciliation of such Projected Non-GAAP Measures to the most
closely comparable GAAP financial measures are not provided because
the Company is unable to provide such reconciliation without
unreasonable efforts. The inability to provide a reconciliation is
because the Company is currently unable to predict with a
reasonable degree of certainty the type and extent of certain items
that would be expected to impact net income in the future but would
not impact the Projected Non-GAAP measures. These items may include
certain non-cash depreciation, which will fluctuate based on the
Company's level of capital expenditures, non-cash amortization of
intangibles related to the Company's acquisitions, income taxes,
which can fluctuate based on changes in the other items noted
and/or future forecasts, and other non-recurring costs and non-cash
adjustments. Historically, the Company has excluded these items
from the Projected Non-GAAP Measures. The Company currently expects
to continue to exclude these items in future disclosures of the
Projected Non-GAAP Measures and may also exclude other items that
may arise. The events that typically lead to the recognition of
such adjustments are inherently unpredictable as to if or when they
may occur, and therefore actual results may differ materially. This
unavailable information could have a significant impact on GAAP
financial measures.
Definitions
Same venue sales. The Company
defines same venue sales for its Topgolf business as sales for the
comparable venue base, which is defined as the number of
Company-operated venues with at least 24 full fiscal months of
operations in the year of comparison.
Forward-Looking Statements
Statements used in this press release that relate to future
plans, events, financial results, performance, prospects, or growth
opportunities, including statements relating to the Company's (and
its segments') fourth quarter and full year 2024 guidance
(including net revenues, Topgolf revenues, Adjusted EBITDA,
Topgolf Adjusted EBITDA, non-GAAP diluted earnings per share, same
venue sales growth, cash generation, Adjusted Free Cash Flow and
diluted shares outstanding), our plans to pursue a separation of
our Topgolf business, the timing and method of the separation,
strength and demand of the Company's products and services,
continued brand momentum, demand for golf and outdoor activities
and apparel, continued investments in the business, consumer trends
and behavior, future industry and market conditions, foreign
currency effects and their impacts, tax rates, the completion of
any strategic transaction, and statements of belief and any
statement of assumptions underlying any of the foregoing, are
forward-looking statements as defined under the Private Securities
Litigation Reform Act of 1995. The words "believe," "expect,"
"estimate," "could," "would," "should," "intend," "may," "plan,"
"seek," "anticipate," "project" and similar expressions, among
others, generally identify forward-looking statements, which speak
only as of the date the statements were made and are not guarantees
of future performance. These statements are based upon current
information and expectations. Accurately estimating the
forward-looking statements is based upon various risks and
unknowns, including uncertainty regarding global economic
conditions, including relating to inflation, decreases in consumer
demand and spending, and any severe or prolonged economic downturn;
our ability to successfully execute planned and potential
transactions, including our planned separation of Topgolf, and the
potential to realize the expected benefits of such transactions in
the expected timeframes or at all; our ability to satisfy the
closing conditions to complete the separation on a timely basis or
at all; our ability to satisfy the closing conditions to complete
the separation on a timely basis, or at all; the Company's level of
indebtedness; continued availability of credit facilities and
liquidity and ability to comply with applicable debt covenants;
effectiveness of capital allocation and cost/expense reduction
efforts; continued brand momentum and product success; growth in
the direct-to-consumer and e-commerce channels; ability to realize
the benefits of the continued investments in the Company's
business; consumer acceptance of and demand for the Company's and
its subsidiaries' products and services; any changes in U.S. trade,
tax or other policies, including restrictions on imports or an
increase in import tariffs; future retailer purchasing activity,
which can be significantly negatively affected by adverse industry
conditions and overall retail inventory levels; the level of
promotional activity in the marketplace; and future changes in
foreign currency exchange rates and the degree of effectiveness of
the Company's hedging programs. Actual results may differ
materially from those estimated or anticipated as a result of these
risks and unknowns or other risks and uncertainties, including the
effect of terrorist activity, armed conflict, natural disasters or
pandemic diseases on the economy generally, on the level of demand
for the Company's and its subsidiaries' products and services or on
the Company's ability to manage its operations, supply chain and
delivery logistics in such an environment; delays, difficulties or
increased costs in the supply of components or commodities needed
to manufacture the Company's products or in manufacturing the
Company's products; and a decrease in participation levels in golf
generally. For additional information concerning these and other
risks and uncertainties that could affect these statements and the
Company's business, see the Company's Annual Report on Form 10-K
for the year ended December 31, 2023
as well as other risks and uncertainties detailed from time to time
in the Company's reports on Forms 10-K, 10-Q and 8-K subsequently
filed 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.
About Topgolf Callaway Brands
Topgolf Callaway Brands Corp. (NYSE: MODG) is an unrivaled
tech-enabled Modern Golf and active lifestyle company delivering
leading golf equipment, apparel, and entertainment, with a
portfolio of global brands including Topgolf, Callaway Golf,
TravisMathew, Toptracer, Odyssey, OGIO, Jack Wolfskin, and World
Golf Tour ("WGT"). "Modern Golf" is the dynamic and inclusive
ecosystem that includes both on-course and off-course golf. For
more information, please visit
https://www.topgolfcallawaybrands.com.
Investor Contact
Katina
Metzidakis
invrelations@tcbrands.com
|
TOPGOLF CALLAWAY
BRANDS CORP.
|
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
|
(In
millions)
|
|
(Unaudited)
|
|
|
September
30,
2024
|
|
December 31,
2023
|
|
ASSETS
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
$
441.9
|
|
$
393.5
|
|
Restricted
cash
|
0.7
|
|
0.8
|
|
Accounts receivable,
net
|
286.4
|
|
200.5
|
|
Inventories
|
666.4
|
|
794.4
|
|
Other current
assets
|
228.5
|
|
238.9
|
|
Total current
assets
|
1,623.9
|
|
1,628.1
|
|
Property, plant and
equipment, net
|
2,215.5
|
|
2,156.5
|
|
Operating lease
right-of-use assets, net
|
1,367.4
|
|
1,410.1
|
|
Goodwill and intangible
assets, net
|
3,499.8
|
|
3,494.2
|
|
Other assets,
net
|
451.5
|
|
431.7
|
|
Total
assets
|
$
9,158.1
|
|
$
9,120.6
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts payable and
accrued expenses
|
$
453.4
|
|
$
480.5
|
|
Accrued employee
compensation and benefits
|
120.3
|
|
113.1
|
|
Asset-based credit
facilities
|
41.0
|
|
54.7
|
|
Operating lease
liabilities, short-term
|
88.9
|
|
86.4
|
|
Construction
advances
|
8.0
|
|
59.3
|
|
Deferred
revenue
|
96.1
|
|
110.9
|
|
Other current
liabilities
|
34.8
|
|
42.7
|
|
Total current
liabilities
|
842.5
|
|
947.6
|
|
Long-term debt,
net
|
1,461.2
|
|
1,518.2
|
|
Operating lease
liabilities, long-term
|
1,402.0
|
|
1,433.4
|
|
Deemed landlord
financing obligations
|
1,147.3
|
|
980.0
|
|
Deferred taxes,
net
|
32.3
|
|
36.7
|
|
Other long-term
liabilities
|
337.2
|
|
326.5
|
|
Total shareholders'
equity
|
3,935.6
|
|
3,878.2
|
|
Total liabilities and
shareholders' equity
|
$
9,158.1
|
|
$
9,120.6
|
|
TOPGOLF CALLAWAY
BRANDS CORP.
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
(In millions, except
per share data)
|
|
(Unaudited)
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
|
Net
revenues:
|
|
|
|
|
|
|
|
|
Products
|
$
564.1
|
|
$
597.1
|
|
$
1,958.7
|
|
$
2,078.2
|
|
Services
|
448.8
|
|
443.5
|
|
1,356.2
|
|
1,309.5
|
|
Total net
revenues
|
1,012.9
|
|
1,040.6
|
|
3,314.9
|
|
3,387.7
|
|
Costs and
expenses:
|
|
|
|
|
|
|
|
|
Cost of
products
|
328.5
|
|
337.1
|
|
1,116.8
|
|
1,167.0
|
|
Cost of services,
excluding depreciation and amortization
|
48.6
|
|
45.6
|
|
140.9
|
|
141.4
|
|
Other venue
expense
|
325.6
|
|
312.1
|
|
988.4
|
|
934.7
|
|
Selling, general and
administrative expense
|
250.6
|
|
242.5
|
|
783.1
|
|
790.6
|
|
Research and
development expense
|
22.0
|
|
22.6
|
|
72.2
|
|
67.4
|
|
Venue pre-opening
costs
|
3.9
|
|
6.9
|
|
9.9
|
|
16.3
|
|
Total costs and
expenses
|
979.2
|
|
966.8
|
|
3,111.3
|
|
3,117.4
|
|
Income from
operations
|
33.7
|
|
73.8
|
|
203.6
|
|
270.3
|
|
Interest expense,
net
|
(57.7)
|
|
(52.3)
|
|
(173.5)
|
|
(153.6)
|
|
Other income,
net
|
1.0
|
|
5.2
|
|
10.8
|
|
2.4
|
|
(Loss) income before
taxes
|
(23.0)
|
|
26.7
|
|
40.9
|
|
119.1
|
|
Income tax
benefit
|
(19.4)
|
|
(3.0)
|
|
(24.1)
|
|
(53.0)
|
|
Net (loss)
income
|
$
(3.6)
|
|
$
29.7
|
|
$
65.0
|
|
$
172.1
|
|
|
|
|
|
|
|
|
|
(Loss) earnings per
common share:
|
|
|
|
|
|
|
|
|
Basic
|
$
(0.02)
|
|
$
0.16
|
|
$
0.35
|
|
$
0.93
|
|
Diluted
|
$
(0.02)
|
|
$
0.16
|
|
$
0.35
|
|
$
0.88
|
|
Weighted-average common
shares outstanding:
|
|
|
|
|
|
|
|
|
Basic
|
183.8
|
|
185.2
|
|
183.7
|
|
185.2
|
|
Diluted
|
183.8
|
|
201.2
|
|
199.3
|
|
201.3
|
|
TOPGOLF CALLAWAY
BRANDS CORP.
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOW
|
|
(In
millions)
|
|
(Unaudited)
|
|
|
Nine Months
Ended
September
30,
|
|
2024
|
|
2023
|
|
Cash flows from
operating activities:
|
|
|
|
|
Net income
|
$
65.0
|
|
$
172.1
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
Depreciation and amortization
|
199.3
|
|
175.7
|
|
Non-cash
interest on financing and deemed landlord financed
leases
|
23.7
|
|
17.1
|
|
Loss on disposal of
long-lived assets and other
|
6.7
|
|
—
|
|
Amortization of debt discount and issuance costs
|
4.3
|
|
4.9
|
|
Impairment
loss
|
6.3
|
|
—
|
|
Deferred
taxes, net
|
(23.3)
|
|
(54.4)
|
|
Share-based
compensation
|
27.9
|
|
38.4
|
|
Unrealized net (gains)
losses on hedging instruments and foreign currency
|
(4.2)
|
|
7.2
|
|
Loss on
debt modification
|
4.7
|
|
10.5
|
|
Other
|
0.7
|
|
1.5
|
|
Changes in assets and
liabilities, net of impacts from business combinations
|
27.6
|
|
(145.3)
|
|
Net cash provided by
operating activities
|
338.7
|
|
227.7
|
|
|
|
|
|
Cash flows from
investing activities, net of impacts of business
combinations:
|
|
|
|
|
Capital
expenditures
|
(227.1)
|
|
(388.7)
|
|
Asset acquisitions,
net of cash acquired
|
—
|
|
(31.2)
|
|
Business combinations,
net of cash acquired
|
(23.3)
|
|
—
|
|
Proceeds from
government grants
|
1.0
|
|
3.0
|
|
Investment in
golf-related ventures
|
(2.4)
|
|
(2.5)
|
|
Acquisition of
intangible assets
|
(3.1)
|
|
(0.8)
|
|
Proceeds from sale of
property and equipment
|
0.3
|
|
0.3
|
|
Net cash used in
investing activities
|
(254.6)
|
|
(419.9)
|
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
|
Repayments of
long-term debt and DLF obligations
|
(74.5)
|
|
(788.2)
|
|
Proceeds from
borrowings on long-term debt
|
—
|
|
1,224.8
|
|
Repayments of credit
facilities, net
|
(13.0)
|
|
(245.4)
|
|
Debt issuance
costs
|
(0.2)
|
|
(1.8)
|
|
Repayments of
financing leases
|
(3.0)
|
|
(2.2)
|
|
Proceeds from lease
financing
|
87.6
|
|
184.3
|
|
Exercise of stock
options
|
0.1
|
|
3.9
|
|
Acquisition of
treasury stock
|
(31.4)
|
|
(44.0)
|
|
Net cash (used in)
provided by financing activities
|
(34.4)
|
|
331.4
|
|
Effect of exchange rate
changes on cash, cash equivalents and restricted cash
|
(1.0)
|
|
(7.3)
|
|
Net increase in cash,
cash equivalents and restricted cash
|
48.7
|
|
131.9
|
|
Cash, cash equivalents
and restricted cash at beginning of period
|
398.8
|
|
203.4
|
|
Cash, cash equivalents
and restricted cash at end of period
|
447.5
|
|
335.3
|
|
Less: restricted
cash(1)
|
(5.6)
|
|
(5.0)
|
|
Cash and cash
equivalents at end of period
|
$
441.9
|
|
$
330.3
|
|
|
|
|
|
(1) Includes
$0.7 million and $0.7 million of short-term restricted cash and
$4.9 million and $4.3 million of long-term restricted
cash included in other assets for the periods ended September 30,
2024 and 2023, respectively.
|
|
TOPGOLF CALLAWAY
BRANDS CORP.
|
|
CONSOLIDATED NET
REVENUES AND OPERATING SEGMENT INFORMATION
|
|
(In
millions)
|
|
(Unaudited)
|
|
|
Net Revenues by
Category
|
|
Three Months
Ended
September
30,
|
|
Growth/(Decline)
|
|
Constant
Currency
vs.
2023(1)
|
|
2024
|
|
2023
|
|
Dollars
|
|
Percent
|
|
Percent
|
|
Net
revenues:
|
|
|
|
|
|
|
|
|
|
|
Venues
|
$
428.9
|
|
$
430.5
|
|
$
(1.6)
|
|
(0.4 %)
|
|
(0.4 %)
|
|
Topgolf other business
lines
|
24.3
|
|
17.2
|
|
7.1
|
|
41.3 %
|
|
38.4 %
|
|
Golf Clubs
|
226.0
|
|
222.2
|
|
3.8
|
|
1.7 %
|
|
1.7 %
|
|
Golf Balls
|
67.5
|
|
71.2
|
|
(3.7)
|
|
(5.2 %)
|
|
(5.1 %)
|
|
Apparel
|
180.6
|
|
211.7
|
|
(31.1)
|
|
(14.7 %)
|
|
(15.2 %)
|
|
Gear, Accessories
& Other
|
85.6
|
|
87.8
|
|
(2.2)
|
|
(2.5 %)
|
|
(2.8 %)
|
|
Total net
revenues
|
$
1,012.9
|
|
$
1,040.6
|
|
$
(27.7)
|
|
(2.7 %)
|
|
(2.9 %)
|
|
|
|
|
|
|
|
|
|
|
|
(1) See
"Additional Information and Disclosures—Non-GAAP Information" for
the calculation methodology of constant currency
measures.
|
|
|
|
|
|
|
|
|
|
|
|
Net Revenues by
Region
|
|
Three Months
Ended
September
30,
|
|
Growth/(Decline)
|
|
Constant
Currency
vs. 2023(1)
|
|
2024
|
|
2023
|
|
Dollars
|
|
Percent
|
|
Percent
|
|
Net
revenues:
|
|
|
|
|
|
|
|
|
|
|
United
States
|
$
724.6
|
|
$
737.3
|
|
$
(12.7)
|
|
(1.7 %)
|
|
(1.7 %)
|
|
Europe
|
136.6
|
|
149.5
|
|
(12.9)
|
|
(8.6 %)
|
|
(10.4 %)
|
|
Asia
|
127.0
|
|
130.7
|
|
(3.7)
|
|
(2.8 %)
|
|
(2.2 %)
|
|
Rest of
world
|
24.7
|
|
23.1
|
|
1.6
|
|
6.9 %
|
|
6.1 %
|
|
Total net
revenues
|
$
1,012.9
|
|
$
1,040.6
|
|
$
(27.7)
|
|
(2.7 %)
|
|
(2.9 %)
|
|
|
|
|
|
|
|
|
|
|
|
(1) See
"Additional Information and Disclosures—Non-GAAP Information" for
the calculation methodology of constant currency
measures.
|
|
|
|
|
|
|
|
|
|
|
|
Operating Segment
Information
|
|
Three Months
Ended
September
30,
|
|
Growth/(Decline)
|
|
Constant
Currency
vs. 2023(1)
|
|
2024
|
|
2023
|
|
Dollars
|
|
Percent
|
|
Percent
|
|
Net
revenues:
|
|
|
|
|
|
|
|
|
|
|
Topgolf
|
$
453.2
|
|
$
447.7
|
|
$
5.5
|
|
1.2 %
|
|
1.0 %
|
|
Golf
Equipment
|
293.5
|
|
293.4
|
|
0.1
|
|
— %
|
|
0.1 %
|
|
Active
Lifestyle
|
266.2
|
|
299.5
|
|
(33.3)
|
|
(11.1 %)
|
|
(11.6 %)
|
|
Total net
revenues
|
$
1,012.9
|
|
$
1,040.6
|
|
$
(27.7)
|
|
(2.7 %)
|
|
(2.9 %)
|
|
|
|
|
|
|
|
|
|
|
|
Segment operating
income:
|
|
|
|
|
|
|
|
|
|
|
Topgolf
|
$
28.3
|
|
$
38.9
|
|
$
(10.6)
|
|
(27.2 %)
|
|
|
|
Golf
Equipment
|
26.8
|
|
35.2
|
|
(8.4)
|
|
(23.9 %)
|
|
|
|
Active
Lifestyle
|
19.4
|
|
40.0
|
|
(20.6)
|
|
(51.5 %)
|
|
|
|
Total segment operating
income
|
74.5
|
|
114.1
|
|
(39.6)
|
|
(34.7 %)
|
|
|
|
Corporate G&A and
other(2)
|
(40.8)
|
|
(40.3)
|
|
(0.5)
|
|
1.2 %
|
|
|
|
Total operating
income
|
33.7
|
|
73.8
|
|
(40.1)
|
|
(54.3 %)
|
|
|
|
Interest expense,
net
|
(57.7)
|
|
(52.3)
|
|
(5.4)
|
|
10.3 %
|
|
|
|
Other income,
net
|
1.0
|
|
5.2
|
|
(4.2)
|
|
(80.8 %)
|
|
|
|
Total (loss) income
before income taxes
|
$
(23.0)
|
|
$
26.7
|
|
$
(49.7)
|
|
(186.1 %)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) See
"Additional Information and Disclosures—Non-GAAP Information" for
the calculation methodology of constant currency
measures.
|
|
(2) Amount
includes corporate general and administrative expenses not utilized
by management in determining segment profitability, in addition to
certain non-cash and non-recurring items described in the
Supplemental Financial Information and Non-GAAP Reconciliation
table below.
|
|
TOPGOLF CALLAWAY
BRANDS CORP.
|
|
CONSOLIDATED NET
REVENUES AND OPERATING SEGMENT INFORMATION
|
|
(In
millions)
|
|
(Unaudited)
|
|
|
Net Revenues by
Category
|
|
Nine Months
Ended
September
30,
|
|
Growth/(Decline)
|
|
Constant
Currency
vs. 2023(1)
|
|
2024
|
|
2023
|
|
Dollars
|
|
Percent
|
|
Percent
|
|
Net
revenues:
|
|
|
|
|
|
|
|
|
|
|
Venues
|
$
1,308.3
|
|
$
1,270.4
|
|
$
37.9
|
|
3.0 %
|
|
2.9 %
|
|
Topgolf other business
lines
|
62.1
|
|
51.6
|
|
10.5
|
|
20.3 %
|
|
19.2 %
|
|
Golf Clubs
|
882.1
|
|
913.3
|
|
(31.2)
|
|
(3.4 %)
|
|
(2.1 %)
|
|
Golf Balls
|
275.1
|
|
274.8
|
|
0.3
|
|
0.1 %
|
|
0.5 %
|
|
Apparel
|
485.2
|
|
531.3
|
|
(46.1)
|
|
(8.7 %)
|
|
(8.0 %)
|
|
Gear, Accessories
& Other
|
302.1
|
|
346.3
|
|
(44.2)
|
|
(12.8 %)
|
|
(12.3 %)
|
|
Total net
revenues
|
$
3,314.9
|
|
$
3,387.7
|
|
$
(72.8)
|
|
(2.1 %)
|
|
(1.7 %)
|
|
|
|
|
|
|
|
|
|
|
|
(1) See
"Additional Information and Disclosures—Non-GAAP Information" for
the calculation methodology of constant currency
measures.
|
|
|
|
|
|
|
|
|
|
|
|
Net Revenues by
Region
|
|
Nine Months
Ended
September
30,
|
|
Growth/(Decline)
|
|
Constant
Currency
vs. 2023(1)
|
|
2024
|
|
2023
|
|
Dollars
|
|
Percent
|
|
Percent
|
|
Net
revenues:
|
|
|
|
|
|
|
|
|
|
|
United
States
|
$
2,444.9
|
|
$
2,435.1
|
|
$
9.8
|
|
0.4 %
|
|
0.4 %
|
|
Europe
|
392.1
|
|
423.3
|
|
(31.2)
|
|
(7.4 %)
|
|
(8.7 %)
|
|
Asia
|
363.7
|
|
419.1
|
|
(55.4)
|
|
(13.2 %)
|
|
(8.1 %)
|
|
Rest of
world
|
114.2
|
|
110.2
|
|
4.0
|
|
3.6 %
|
|
4.5 %
|
|
Total net
revenues
|
$
3,314.9
|
|
$
3,387.7
|
|
$
(72.8)
|
|
(2.1 %)
|
|
(1.7 %)
|
|
|
|
|
|
|
|
|
|
|
|
(1) See
"Additional Information and Disclosures—Non-GAAP Information" for
the calculation methodology of constant currency
measures.
|
|
|
|
|
|
|
|
|
|
|
|
Operating Segment
Information
|
|
Nine Months
Ended
September
30,
|
|
Growth/(Decline)
|
|
Constant
Currency
vs. 2023(1)
|
|
2024
|
|
2023
|
|
Dollars
|
|
Percent
|
|
Percent
|
|
Net
revenues:
|
|
|
|
|
|
|
|
|
|
|
Topgolf
|
$
1,370.4
|
|
$
1,322.0
|
|
$
48.4
|
|
3.7 %
|
|
3.5 %
|
|
Golf
Equipment
|
1,157.2
|
|
1,188.1
|
|
(30.9)
|
|
(2.6 %)
|
|
(1.5 %)
|
|
Active
Lifestyle
|
787.3
|
|
877.6
|
|
(90.3)
|
|
(10.3 %)
|
|
(9.7 %)
|
|
Total net
revenues
|
$
3,314.9
|
|
$
3,387.7
|
|
$
(72.8)
|
|
(2.1 %)
|
|
(1.7 %)
|
|
|
|
|
|
|
|
|
|
|
|
Segment operating
income:
|
|
|
|
|
|
|
|
|
|
|
Topgolf
|
$
87.3
|
|
$
85.7
|
|
$
1.6
|
|
1.9 %
|
|
|
|
Golf
Equipment
|
186.3
|
|
213.2
|
|
(26.9)
|
|
(12.6) %
|
|
|
|
Active
Lifestyle
|
58.8
|
|
96.8
|
|
(38.0)
|
|
(39.3) %
|
|
|
|
Total segment operating
income
|
332.4
|
|
395.7
|
|
(63.3)
|
|
(16.0) %
|
|
|
|
Corporate costs and
expenses(2)
|
(128.8)
|
|
(125.4)
|
|
(3.4)
|
|
2.7 %
|
|
|
|
Total operating
income
|
203.6
|
|
270.3
|
|
(66.7)
|
|
(24.7) %
|
|
|
|
Interest expense,
net
|
(173.5)
|
|
(153.6)
|
|
(19.9)
|
|
13.0 %
|
|
|
|
Other income,
net
|
10.8
|
|
2.4
|
|
8.4
|
|
n/m
|
|
|
|
Total income before
income taxes
|
$
40.9
|
|
$
119.1
|
|
$
(78.2)
|
|
(65.7) %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) See
"Additional Information and Disclosures—Non-GAAP Information" for
the calculation methodology of constant currency
measures.
|
|
(2) Amount
includes corporate general and administrative expenses not utilized
by management in determining segment profitability, in addition to
certain non-cash and non-recurring items described in the
Supplemental Financial Information and Non-GAAP Reconciliation
table below.
|
|
Three Months Ended
September 30,
|
|
2024
|
|
2023
|
|
GAAP
|
|
Non-Cash
Acquisition-
related
Amortization(1)
|
|
Non-
Recurring
Items(2)
|
|
Tax
Valuation
Allowance
|
|
Non-
GAAP
|
|
GAAP
|
|
Non-Cash
Acquisition-
related
Amortization(1)
|
|
Non-
Recurring
Items(3)
|
|
Tax
Valuation
Allowance(4)
|
|
Non-
GAAP
|
|
Income from
operations
|
$
33.7
|
|
$
(2.9)
|
|
$
(6.4)
|
|
$
—
|
|
$
43.0
|
|
$
73.8
|
|
$
(2.8)
|
|
$
(5.6)
|
|
$
—
|
|
$
82.2
|
|
Net (loss)
income
|
$
(3.6)
|
|
$
(2.9)
|
|
$
(5.0)
|
|
$
—
|
|
$
4.3
|
|
$
29.7
|
|
$
(2.1)
|
|
$
(4.3)
|
|
$
0.3
|
|
$
35.8
|
|
(Loss) earnings per
share - diluted (5) (6)
|
$
(0.02)
|
|
$
(0.02)
|
|
$
(0.03)
|
|
$
—
|
|
$
0.02
|
|
$
0.16
|
|
$
(0.01)
|
|
$
(0.02)
|
|
$
—
|
|
$
0.19
|
|
|
(1) Includes
the non-cash amortization of purchase accounting adjustments
associated with acquired intangible assets stemming from our
Acquisitions, including acquired customer and distributor
relationships and acquired developed technology. See "Non-GAAP
Information" above for further information. Starting in the second
quarter of 2024, the depreciation and amortization of all other
purchase accounting adjustments associated with our Acquisitions
will be excluded from our non-GAAP adjustments. As such, prior
period amounts have been recast in order to conform with the
current period presentation. For the three months ended September
30, 2024 and 2023, non-cash depreciation and amortization related
to these excluded purchase accounting adjustments was $0.9 million
and $3.0 million, respectively.
|
|
(2) Primarily includes
$2.8 million in restructuring and reorganization charges in our
Active Lifestyle segment, $2.6 million of costs incurred related to
the planned separation of Topgolf, and $0.3 million in IT
integration charges including costs associated with the
implementation of a new cloud based HRM system.
|
|
(3) Primarily includes
$2.7 million in restructuring and reorganization charges in our
Active Lifestyle segment and $1.5 million in IT costs related to a
cybersecurity incident.
|
|
(4)
Release of tax valuation allowances recorded in connection with the
merger with Topgolf.
|
|
(5)
For 2024, on a GAAP basis, Diluted loss per share and Diluted
weighted average common shares outstanding are the same as Basic
loss per share and Basic weighted average common shares outstanding
due to a net loss position. For 2024, on a Non-GAAP basis, Diluted
earnings per share and Diluted weighted average common shares
outstanding exclude the impact of the 2020 convertible notes due to
the notes being anti-dilutive. For 2023, the impact of the 2020
convertible notes is included in the calculation of Diluted
earnings per share using the if-converted method.
|
|
(6) When
aggregated, earnings per share amounts may not add across due to
rounding.
|
|
Nine months ended
September 30,
|
|
2024
|
|
2023
|
|
GAAP
|
|
Non-Cash
Acquisition-
related
Amortization(1)
|
|
Non-
Recurring
Items(2)
|
|
Tax
Valuation
Allowance(3)
|
|
Non-
GAAP
|
|
GAAP
|
|
Non-Cash
Acquisition-
related
Amortization(1)
|
|
Non-
Recurring
Items(4)
|
|
Tax
Valuation
Allowance(3)
|
|
Non-
GAAP
|
|
Income from
operations
|
$
203.6
|
|
$
(8.7)
|
|
$
(25.1)
|
|
$
—
|
|
$
237.4
|
|
$
270.3
|
|
$
(11.2)
|
|
$
(16.4)
|
|
$
—
|
|
$
297.9
|
|
Net income
|
$
65.0
|
|
$
(7.3)
|
|
$
(29.5)
|
|
$
—
|
|
$
101.8
|
|
$
172.1
|
|
$
(8.5)
|
|
$
(20.6)
|
|
$
59.4
|
|
$
141.8
|
|
Earnings per share -
diluted (5) (6)
|
$
0.35
|
|
$
(0.04)
|
|
$
(0.15)
|
|
$
—
|
|
$
0.54
|
|
$
0.88
|
|
$
(0.04)
|
|
$
(0.10)
|
|
$
0.29
|
|
$
0.73
|
|
|
(1) Includes
the non-cash amortization of purchase accounting adjustments
associated with acquired intangible assets stemming from our
Acquisitions, including acquired customer and distributor
relationships and acquired developed technology. See "Non-GAAP
Information" above for further information. Starting in the second
quarter of 2024, the depreciation and amortization of all other
purchase accounting adjustments associated with our Acquisitions
will be excluded from our non-GAAP adjustments. As such, prior
period amounts have been recast in order to conform with the
current period presentation. For the nine months ended September
30, 2024 and 2023, non-cash depreciation and amortization related
to these excluded purchase accounting adjustments was $4.2 million
and $9.7 million, respectively.
|
|
(2) Primarily includes
$14.6 million in restructuring and reorganization charges in our
Active Lifestyle segment, $4.7 million in charges related to our
2024 debt repricing, $3.4 million in currency translation
adjustments reclassified into earnings due to the dissolution of
the Jack Wolfskin Russia entity, $3.4 million of additional charges
related to the impairment and abandonment of the Shankstars media
game in the Topgolf segment, $2.6 million of costs incurred related
to the planned separation of Topgolf, $2.1 million in IT
integration charges including costs associated with the
implementation of a new cloud based HRM system, and $1.4 million in
IT costs related to a 2023 cybersecurity incident.
|
|
(3)
Related to the release of tax valuation allowances recorded in
connection with the merger with Topgolf.
|
|
(4)
Primarily includes $13.6 million in total charges related to our
2023 debt modification, $5.8 million in restructuring and
reorganization charges in our Active Lifestyle segment, $3.7
million in IT integration and implementation costs primarily
related to the Topgolf merger, and $1.5 million in costs related to
a cybersecurity incident.
|
|
(5)
The impact of 2020 convertible notes is included in the
calculation of Diluted earnings per share using the if-converted
method.
|
|
(6) When
aggregated, earnings per share amounts may not add across due to
rounding.
|
|
2024 Trailing Twelve Month Adjusted
EBITDA
|
|
2023 Trailing Twelve Month Adjusted
EBITDA
|
|
Quarter
Ended
|
|
Quarter
Ended
|
|
December
31,
|
|
March
31,
|
|
June
30,
|
|
September
30,
|
|
|
|
December
31,
|
|
March
31,
|
|
June
30,
|
|
September
30,
|
|
|
|
2023
|
|
2024
|
|
2024
|
|
2024
|
|
Total
|
|
2022
|
|
2023
|
|
2023
|
|
2023
|
|
Total
|
|
Net (loss)
income
|
$
(77.1)
|
|
$
6.5
|
|
$
62.1
|
|
$
(3.6)
|
|
$ (12.1)
|
|
$
(72.7)
|
|
$
25.0
|
|
$
117.4
|
|
$
29.7
|
|
$
99.4
|
|
Interest expense,
net
|
56.6
|
|
58.8
|
|
57.0
|
|
57.7
|
|
230.1
|
|
42.5
|
|
49.6
|
|
51.7
|
|
52.3
|
|
196.1
|
|
Income tax (benefit)
provision
|
(7.2)
|
|
5.0
|
|
(9.7)
|
|
(19.4)
|
|
(31.3)
|
|
(3.5)
|
|
(4.2)
|
|
(45.8)
|
|
(3.0)
|
|
(56.5)
|
|
Non-cash depreciation
and amortization expense
|
64.0
|
|
65.4
|
|
65.8
|
|
68.1
|
|
263.3
|
|
53.0
|
|
56.1
|
|
58.6
|
|
61.0
|
|
228.7
|
|
Non-cash stock
compensation and stock warrant expense, net
|
8.4
|
|
14.2
|
|
7.0
|
|
7.8
|
|
37.4
|
|
9.7
|
|
12.5
|
|
12.3
|
|
13.2
|
|
47.7
|
|
Non-cash lease
amortization expense
|
4.4
|
|
3.5
|
|
3.6
|
|
2.8
|
|
14.3
|
|
4.5
|
|
4.6
|
|
4.4
|
|
4.5
|
|
18.0
|
|
Non-recurring items,
before taxes(1)
|
20.7
|
|
7.5
|
|
19.8
|
|
6.4
|
|
54.4
|
|
3.1
|
|
13.7
|
|
7.6
|
|
5.6
|
|
30.0
|
|
Adjusted
EBITDA
|
$
69.8
|
|
$
160.9
|
|
$
205.6
|
|
$
119.8
|
|
$ 556.1
|
|
$
36.6
|
|
$
157.3
|
|
$
206.2
|
|
$
163.3
|
|
$ 563.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) In 2024,
amounts include restructuring and reorganization charges in our
Active Lifestyle segment, charges related to the 2024 debt
repricing, currency translation adjustments reclassified into
earnings due to the dissolution of the Jack Wolfskin Russia entity,
charges related to the impairment and abandonment of the Shankstars
media game, costs incurred related to the separation of Topgolf, IT
costs related to a 2023 cybersecurity incident, and IT integration
and implementation costs associated with the implementation of a
new cloud based HRM system. In 2023, amounts include charges
related to the impairment and abandonment of the Shankstars media
game, charges in connection with the 2023 debt modification, IT
integration and implementation costs stemming primarily from the
merger with Topgolf, restructuring and reorganization charges in
our Topgolf and Active Lifestyle segments, and costs related to a
cybersecurity incident. In 2022, amounts include costs associated
with the implementation of new IT systems for Topgolf, and legal
costs and credit agency fees related to a postponed debt
refinancing.
|
|
Reconciliation of
Consolidated Non-GAAP Adjusted Free Cash Flow
|
Nine Months Ended
September 30,
|
|
2024
|
|
2023
|
|
GAAP cash flows
provided by operations (1)
|
$
338.7
|
|
$
227.7
|
|
Less: capital
expenditures (1)
|
(227.1)
|
|
(388.7)
|
|
Add: proceeds from
lease financing & government grants(1)
|
88.6
|
|
187.3
|
|
Consolidated
Non-GAAP Adjusted Free Cash Flow
|
$
200.2
|
|
$
26.3
|
|
|
(1) Source:
Condensed consolidated statement of cash flows within the Company's
quarterly report on Form 10-Q.
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Topgolf Adjusted Segment EBITDA
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
|
|
|
|
|
|
|
|
|
Topgolf Segment
operating income(1):
|
$
28.3
|
|
$
38.9
|
|
$
87.3
|
|
$
85.7
|
|
Non-GAAP depreciation
and amortization expense
|
50.8
|
|
43.2
|
|
148.4
|
|
119.5
|
|
Non-cash stock
compensation expense
|
2.0
|
|
4.1
|
|
8.4
|
|
12.4
|
|
Non-cash lease
amortization expense
|
2.8
|
|
4.3
|
|
9.1
|
|
13.1
|
|
Other expense,
net
|
0.5
|
|
0.4
|
|
0.5
|
|
0.4
|
|
Topgolf Adjusted
Segment EBITDA
|
$
84.4
|
|
$
90.9
|
|
$
253.7
|
|
$
231.1
|
|
|
|
|
|
|
|
|
|
|
(1) We do
not calculate GAAP net income at the operating segment level, but
have provided Topgolf's segment income from operations as a
relevant measurement of profitability. Segment income from
operations does not include interest expense and taxes as well as
other non-cash and non-recurring items. Segment operating income is
reconciled to the Company's consolidated pre-tax income in the
Segment Results section of this release.
|
|
Reconciliation of
Topgolf Adjusted Segment EBITDA
|
Twelve
Months Ended
December 31,
|
|
2023
|
|
|
|
Topgolf Segment
operating income(1):
|
$
108.8
|
|
Non-GAAP depreciation
and amortization expense
|
164.9
|
|
Non-cash stock
compensation expense
|
12.9
|
|
Non-cash lease
amortization expense
|
17.1
|
|
Other expense,
net
|
0.6
|
|
Topgolf Adjusted
Segment EBITDA
|
$
304.3
|
|
|
|
|
(1) We do
not calculate GAAP net income at the operating segment level, but
have provided Topgolf's segment income from operations as a
relevant measurement of profitability. Segment income from
operations does not include interest expense and taxes as well as
other non-cash and non-recurring items. Segment operating income is
reconciled to the Company's consolidated pre-tax income in the
Segment Results section of this release.
|
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SOURCE Topgolf Callaway Brands Corp.