Callaway Golf Co. (NYSE:ELY) Q4 2014 Earnings Conference Call - Final Transcript

Jan 29, 2015 • 05:00 pm ET


Callaway Golf Co. (NYSE:ELY) Q4 2014 Earnings Conference Call - Final Transcript


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My Name is Ian, and I would like to welcome to the Q4 2014 Callaway Golf Earnings Conference call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks there will be a question and answer session. (Operator Instructions) Brad Holiday, CFO you may now begin.

Bradley Holiday

Thanks for joining our fourth quarter 2014 earnings conference call. Joining me today is Chip Brewer, our President and CEO. During today's call Chip will provide some opening remarks, I will provide an overview of the company's financial results for 2014 full year and fourth quarter, and we will then open the call for questions.

(Forward-Looking and Cautionary Statements)

Bradley Holiday

I would now like to turn the call over Chip.

Oliver Brewer

2014 was an excellent year for Calloway Golf despite the well-publicized headwinds from both foreign exchange and market conditions. Highlight include improvements in market share, brand rating, and our first full year net profit since 2008. Each of these are important milestones in our turnaround process. I'd like to start by thanking the Calloway Golf team for their hard work and commitment to turning this business around. The team has done a remarkable job changing this business for the better and I want them to know how much we appreciate their efforts.

For the full year, our revenues were up 5% on a GAAP basis and 8% on a constant currency continuing business basis. We grew in almost all markets with especially strong performance in the US, Europe, Japan, Australia and Korea. In concert with this revenue growth we grew our market shares across the globe. In the US our 2014 hard goods dollar market share was 18.5% up 340 basis points year-over-year. In Japan, for the full year we finished at 14.4% up 50 basis points year-over-year and making us the number on American brand in that market.

In the UK our most recent shared data has us at 18.3% up 370 basis points year-over-year, and in Europe we were 20.3% up 340 basis points and placing us as the number ones selling brand for the last eight consecutive months. This global market share growth was driven by significant gains in woods, irons, and wedges.

In addition to growing our business and improving our financial performance, we continue to make the required investments and changes necessary to succeed for the long term. On the investment front we continue to increase our tour presence. On the US PGA Tour we now have 32 full staff players versus 15 when I joined the company in 2012. In the world of R&D we have strategically added resources for enhancing both advanced research and the efficiency of our product development process.

On the operations front, we made further improvements in our supply chain during the year. Some excellent examples here are custom fitting where the supply chain has supported a 32% increase in our custom club business and in our golf ball business where the operations team delivered a $19 million improvement in