HIGHLIGHTS
- Q4 consolidated Net Revenue growth of 3% and strong Adjusted
EBITDA growth both outperformed guidance.
- Total Company operating cash flow increased 5% to $382 million and Adjusted Free Cash Flow
increased 27% to $203 million.
- Topgolf's same venue sales, Adjusted EBITDA, Adjusted Free Cash
Flow and venue margins all exceeded expectations in Q4.
- In 2024 the Callaway brand maintained its #1 position in U.S.
market share in total golf clubs for the third consecutive year -
and 9th time in the last 10 years - and achieved record U.S. market
share in golf ball.
CARLSBAD, Calif., Feb. 24,
2025 /PRNewswire/ -- Topgolf Callaway Brands Corp.
(the "Company" or "Topgolf Callaway Brands", "we", "our", "us")
(NYSE: MODG) announced its financial results for the fourth quarter
and full year ended December 31,
2024. As discussed below, the Company's fourth quarter GAAP
results included 3% revenue growth and a $1,452.0 million noncash impairment charge
related to Topgolf's goodwill and intangible assets resulting in a
GAAP net loss of $1,512.7 million; whereas the Company's
Adjusted EBITDA increased by 45% to $101.4 million.
"We are pleased with our strong finish to the year with fourth
quarter revenue, adjusted EBITDA and adjusted free cash flow
exceeding expectations," commented Chip
Brewer, President and CEO. "These results reflect continued
strength in our Golf Equipment business, including our leading
market share position in golf clubs and record market share in golf
balls in 2024, as well as continued strong operating performance at
TravisMathew and the successful reorganization at Jack Wolfskin. In
addition, Topgolf had a strong finish to the year with same venue
sales, venue margins and adjusted free cash flow all outpacing
expectations. Looking forward to 2025, improving same venue
sales at Topgolf is a top priority for us and we are actively
implementing initiatives to address same venue sales. We also
remain focused on executing our strategic initiatives, bringing
exciting new products and programs to market, and driving continued
operating efficiencies. However, we are also navigating some
short-term headwinds, which are impacting this year's outlook,
including foreign currency exchange rates and year-over-year cost
pressures. Given the strength of our brands and their market
positions, our operational capabilities, and our financial
position, we are confident we will work through these short-term
headwinds and return to growth. And, as we execute on our
strategy, we believe we will be able to deliver significant
shareholder value."
CONSOLIDATED RESULTS
The Company announced the following GAAP and non-GAAP financial
results for the three and twelve months ended December 31, 2024 and 2023:
|
GAAP
RESULTS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in millions, except
percentages and per share data)
|
Three Months Ended
December 31,
|
|
Twelve Months Ended
December 31,
|
|
2024
|
|
2023
|
|
$
Change
|
|
%
Change
|
|
2024
|
|
2023
|
|
$
Change
|
|
%
Change
|
|
Net revenues
|
$ 924.4
|
|
$ 897.1
|
|
$
27.3
|
|
3.0 %
|
|
$
4,239.3
|
|
$
4,284.8
|
|
$ (45.5)
|
|
(1.1) %
|
|
Goodwill and intangible
assets impairment
|
1,452.0
|
|
—
|
|
1,452.0
|
|
n/m
|
|
1,452.0
|
|
—
|
|
1,452.0
|
|
n/m
|
|
(Loss) income from
operations
|
(1,460.8)
|
|
(32.6)
|
|
(1,428.2)
|
|
n/m
|
|
(1,257.2)
|
|
237.7
|
|
(1,494.9)
|
|
n/m
|
|
Other expense,
net
|
(53.3)
|
|
(51.7)
|
|
(1.6)
|
|
3.1 %
|
|
(216.0)
|
|
(202.9)
|
|
(13.1)
|
|
6.5 %
|
|
(Loss) income before
taxes
|
(1,514.1)
|
|
(84.3)
|
|
(1,429.8)
|
|
n/m
|
|
(1,473.2)
|
|
34.8
|
|
(1,508.0)
|
|
n/m
|
|
Income tax
benefit
|
(1.4)
|
|
(7.2)
|
|
5.8
|
|
(80.6) %
|
|
(25.5)
|
|
(60.2)
|
|
34.7
|
|
(57.6) %
|
|
Net (loss)
income
|
$ (1,512.7)
|
|
$ (77.1)
|
|
$
(1,435.6)
|
|
n/m
|
|
$ (1,447.7)
|
|
$ 95.0
|
|
$ (1,542.7)
|
|
n/m
|
|
(Loss) earnings per
share - diluted
|
$ (8.23)
|
|
$ (0.42)
|
|
$
(7.81)
|
|
n/m
|
|
$ (7.88)
|
|
$ 0.50
|
|
$ (8.38)
|
|
n/m
|
|
Weighted-average common
shares outstanding - diluted
|
183.7
|
|
184.4
|
|
(0.7)
|
|
(0.4) %
|
|
183.7
|
|
201.1
|
|
(17.4)
|
|
(8.7) %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NON-GAAP RESULTS
Non-GAAP results exclude certain non-cash and non-recurring
adjustments, including the $1,452.0
million non-cash Topgolf goodwill and intangible assets
impairment, 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 tables to this release.
|
(in millions,
except
percentages and per
share data)
|
Three Months Ended
December 31,
|
|
Twelve Months Ended
December 31,
|
|
2024
|
|
2023
|
|
$
Change
|
|
%
Change
|
|
Constant
Currency
vs. 2023(1)
|
|
2024
|
|
2023
|
|
$
Change
|
|
%
Change
|
|
Constant
Currency
vs. 2023(1)
|
|
Net revenues
|
$
924.4
|
|
$
897.1
|
|
$ 27.3
|
|
3.0 %
|
|
3.2 %
|
|
$ 4,239.3
|
|
$ 4,284.8
|
|
$
(45.5)
|
|
(1.1) %
|
|
(0.6) %
|
|
Non-GAAP Income (loss)
from operations
|
$ 18.5
|
|
$
(8.7)
|
|
$ 27.2
|
|
n/m
|
|
n/m
|
|
$
255.9
|
|
$
289.2
|
|
$
(33.3)
|
|
(11.5) %
|
|
(8.0) %
|
|
Non-GAAP Net (Loss)
income
|
$
(59.8)
|
|
$
(57.9)
|
|
$
(1.9)
|
|
3.3 %
|
|
|
|
$
42.0
|
|
$
83.9
|
|
$
(41.9)
|
|
(49.9) %
|
|
|
|
Non-GAAP (Loss)
earnings per share - diluted
|
$
(0.33)
|
|
$
(0.31)
|
|
$
(0.02)
|
|
6.5 %
|
|
|
|
$
0.23
|
|
$
0.45
|
|
$
(0.22)
|
|
(48.9) %
|
|
|
|
Non-GAAP Adjusted
EBITDA
|
$
101.4
|
|
$ 69.8
|
|
$ 31.6
|
|
45.3 %
|
|
|
|
$
587.7
|
|
$
596.6
|
|
$ (8.9)
|
|
(1.5) %
|
|
|
|
|
(1) See
"Additional Information and Disclosures—Non-GAAP Information" for
the calculation methodology of constant currency
measures.
|
|
FOURTH 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 $924.4
million increased 3.0% year-over-year, primarily driven by
increases in Golf Equipment.
On a GAAP basis, loss from operations increased $1,428.2 million to $1,460.8 million primarily due to a non-cash
$1,452.0 million impairment of the
Topgolf goodwill and intangible assets. On a non-GAAP basis, income
from operations increased $27.2
million to $18.5 million,
driven by a $24.4 million increase in
total segment operating income, reflecting improvements in all
three operating segments and led by the Golf Equipment segment
which delivered the largest improvement.
Adjusted EBITDA of $101.4 million increased 45.3% vs. the prior
year driven by increased profitability in the Topgolf and Golf
Equipment segments.
FULL YEAR 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 $4,239.3
million decreased 1.1% year-over-year, primarily due to
decreases in the Korea business and the Jack Wolfskin Europe
business as a result of soft market conditions in those
markets.
On a GAAP basis, loss from operations was $1,257.2 million compared to income from
operations of $237.7 million in 2023.
This decrease is primarily attributable to the non-cash
$1,452.0 million impairment of
Topgolf goodwill and intangible assets. On a non-GAAP basis, income
from operations decreased $33.3
million to $255.9 million
primarily due to a decrease in Active Lifestyle segment operating
income, partially offset by an increase in Topgolf operating
income.
Adjusted EBITDA decreased 1.5% to $587.7
million as a result of the decrease in the Active Lifestyle
segment operating income, partially offset by the increase in
Topgolf Adjusted EBITDA.
SEGMENT RESULTS
SEGMENT NET REVENUES
The table below provides net revenues by segment for the periods
presented:
|
|
|
|
|
|
|
|
|
(in millions, except
percentages)
|
Three Months Ended
December 31,
|
|
Constant
Currency
vs. 2023(1)
|
|
Twelve Months Ended
December 31,
|
|
Constant
Currency
vs. 2023(1)
|
|
2024
|
|
2023
|
|
%
Change
|
|
%
Change
|
|
2024
|
|
2023
|
|
%
Change
|
|
%
Change
|
|
Topgolf
|
$
439.0
|
|
$
439.0
|
|
— %
|
|
(0.1) %
|
|
$
1,809.4
|
|
$
1,761.0
|
|
2.7 %
|
|
2.6 %
|
|
Golf
Equipment
|
224.8
|
|
199.4
|
|
12.7 %
|
|
13.3 %
|
|
1,382.0
|
|
1,387.5
|
|
(0.4) %
|
|
0.6 %
|
|
Active
Lifestyle
|
260.6
|
|
258.7
|
|
0.7 %
|
|
1.1 %
|
|
1,047.9
|
|
1,136.3
|
|
(7.8) %
|
|
(7.2) %
|
|
Net Revenues
|
$
924.4
|
|
$
897.1
|
|
3.0 %
|
|
3.2 %
|
|
$
4,239.3
|
|
$
4,284.8
|
|
(1.1) %
|
|
(0.6) %
|
|
|
(1) See
"Additional Information and Disclosures—Non-GAAP Information" for
the calculation methodology of constant currency
measures.
|
|
SEGMENT OPERATING INCOME (LOSS)
The table below provides operating income (loss) by segment for
the periods presented:
|
|
|
|
|
(in millions, except
percentages)
|
Three Months Ended
December 31,
|
|
Twelve Months Ended
December 31,
|
|
2024
|
|
2023
|
|
Change
|
|
2024
|
|
2023
|
|
Change
|
|
Topgolf
|
$ 26.9
|
|
$ 23.1
|
|
16.5 %
|
|
$ 114.2
|
|
$ 108.8
|
|
5.0 %
|
|
% of segment
revenue
|
6.1 %
|
|
5.3 %
|
|
80
bps
|
|
6.3 %
|
|
6.2 %
|
|
10
bps
|
|
Golf
Equipment
|
(2.7)
|
|
(19.9)
|
|
(86.4) %
|
|
183.6
|
|
193.3
|
|
(5.0) %
|
|
% of segment
revenue
|
(1.2) %
|
|
(10.0) %
|
|
880
bps
|
|
13.3 %
|
|
13.9 %
|
|
(60)
bps
|
|
Active
Lifestyle
|
23.6
|
|
20.2
|
|
16.8 %
|
|
82.4
|
|
117.0
|
|
(29.6) %
|
|
% of segment
revenue
|
9.1 %
|
|
7.8 %
|
|
130
bps
|
|
7.9 %
|
|
10.3 %
|
|
(240) bps
|
|
Total Segment Operating
Income
|
$ 47.8
|
|
$ 23.4
|
|
104.3 %
|
|
$ 380.2
|
|
$ 419.1
|
|
(9.3) %
|
|
% of total segment
revenue
|
5.2 %
|
|
2.6 %
|
|
260
bps
|
|
9.0 %
|
|
9.8 %
|
|
(80)
bps
|
|
Constant
Currency
Total Segment Operating
Income
|
|
|
|
|
104.6 %
|
|
|
|
|
|
(6.8) %
|
|
FOURTH QUARTER 2024 SEGMENT COMMENTARY
(All comparisons to prior periods are calculated on a
year-over-year basis, unless otherwise noted)
Topgolf
- Revenue remained flat at $439.0
million, with a decline in same venue sales offset by
revenue from new venues.
- Same venue sales were -8%, slightly better than expectations
due to improving traffic trends.
- Segment operating income increased $3.8
million, or 16.5%, to $26.9
million and Adjusted EBITDA increased $10.3 million, or 14.1%, to $83.5 million driven primarily by revenue from
additional venues, and record Q4 venue-level margins.
- Topgolf opened two new venues in Q4 2024, compared to nine
venues in Q4 2023.
Golf Equipment
- Revenue increased $25.4 million
to $224.8 million. This increase was
driven by increased revenue in both golf clubs and golf balls due
to the continued success of our clubs business and Chrome family of
balls as well as the successful launch of our new Ai-One Square 2 Square Odyssey putters in
Q4.
- The typical seasonal operating loss in Q4 improved by
$17.2 million to $(2.7) million, driven by increased sales volume
and improved gross margins.
Active Lifestyle
- Revenue increased $1.9 million or
0.7% to $260.6 million, driven by
TravisMathew.
- Operating income increased $3.4
million primarily driven by the increased revenue as well as
cost savings initiatives at Jack Wolfskin resulting from the recent
right-sizing of that business.
FULL YEAR 2024 SEGMENT COMMENTARY
(All comparisons to prior periods are calculated on a
year-over-year basis, unless otherwise noted)
Topgolf
- Revenue increased $48.4 million
to $1,809.4 million, with increases
driven primarily by new venues partially offset by a decrease in
same venue sales.
- Same venue sales were -9%.
- Operating income increased $5.4
million, or 5.0%, to $114.2
million and Adjusted EBITDA increased $32.9 million, or 10.8%, to $337.2 million driven primarily by the new
venues, strong venue-level margins and cost savings
initiatives.
- Topgolf ended 2024 with 100 owned and operated venues, an
increase of 7, including one acquired from BigShots.
Golf Equipment
- Revenue decreased slightly to $1,382.0
million, which was a $5.5
million or 0.4% decrease. The decline was due to negative
foreign currency exchange rates as revenue increased slightly on a
constant currency basis.
- Operating income decreased by $9.7
million, primarily due to higher freight rates and
unfavorable changes in foreign exchange rates.
Active Lifestyle
- Revenue decreased $88.4 million
or 7.8% to $1,047.9 million. The
decrease was primarily driven by lower European wholesale revenue
at Jack Wolfskin, as well as lower corporate channel revenue at
TravisMathew resulting from a channel fill-in which occurred in
2023 and did not repeat in 2024. The decrease in revenue was
partially offset by growth in the Jack Wolfskin China business and
TravisMathew direct-to-consumer and wholesale businesses.
- Operating income decreased $34.6
million primarily as a result of the lower revenue.
The following is a reconciliation of total segment operating
income to (loss)/income before income taxes for the periods
presented:
|
Three Months Ended
December 31,
|
|
Twelve Months Ended
December 31,
|
|
(in
millions)
|
2024
|
|
2023
|
|
$
Change
|
|
2024
|
|
2023
|
|
$
Change
|
|
Total segment operating
income:
|
$
47.8
|
|
$
23.4
|
|
$
24.4
|
|
$
380.2
|
|
$
419.1
|
|
$
(38.9)
|
|
Reconciling
items(1)
|
(1,508.6)
|
|
(56.0)
|
|
(1,452.6)
|
|
(1,637.4)
|
|
(181.4)
|
|
(1,456.0)
|
|
(Loss) income from
operations
|
(1,460.8)
|
|
(32.6)
|
|
(1,428.2)
|
|
(1,257.2)
|
|
237.7
|
|
(1,494.9)
|
|
Interest expense,
net
|
(57.7)
|
|
(56.6)
|
|
(1.1)
|
|
(231.2)
|
|
(210.2)
|
|
(21.0)
|
|
Other income,
net
|
4.4
|
|
4.9
|
|
(0.5)
|
|
15.2
|
|
7.3
|
|
7.9
|
|
(Loss) income before
income taxes
|
$
(1,514.1)
|
|
$
(84.3)
|
|
$
(1,429.8)
|
|
$
(1,473.2)
|
|
$
34.8
|
|
$
(1,508.0)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Includes
corporate overhead and certain non-recurring and non-cash items as
described in the schedules to this release.
|
|
2024 BALANCE SHEET AND CASH FLOW HIGHLIGHTS
- Cash flow from operating activities was $382.0 million, and Adjusted Free Cash Flow was
$203.1 million, driven by operating
efficiencies at Topgolf, improved working capital in the Core
business and lower capital expenditures.
- Inventory decreased $37.1 million
year-over-year to $757.3 million,
driven by decreases in the Active Lifestyle segment primarily
resulting from recent right-sizing initiatives at Jack
Wolfskin.
- Available liquidity, which is comprised of cash on hand and
availability under the Company's credit facilities, increased
$54.3 million to $796.9 million compared to December 31, 2023.
BUSINESS OUTLOOK
The Company's 2025 outlook assumes a consumer environment
similar to 2024 and headwinds of approximately $105 million in revenue and approximately
$120 million in Adjusted EBITDA
compared to 2024 as described below.
The revenue headwinds include approximately $60 million in the Core business from unfavorable
changes in foreign currency exchange rates, and approximately
$45 million in total headwinds from
the sale of the Topgolf World Golf Tour ("WGT") mobile gaming
business in 2024, a transition to a retail calendar for reporting
purposes in 2025 which will cause Topgolf to lose three reporting
days of financial results in 2025, as well as one less day due to
last year's leap year. Excluding those headwinds, the organic
revenue would be approximately the same in 2025 as in
2024.
Our Adjusted EBITDA outlook includes approximately $75 million in headwinds in the Core business
relating primarily to the estimated impact of changes in foreign
currency and an expected increase in tariffs, but also a reset of
incentive compensation that was not paid out in 2024. Topgolf's
outlook includes approximately $45
million in Adjusted EBITDA headwinds related to 2025
calendar changes, the sale of WGT, the incurrence of public company
standalone costs, as well as the impact of the reset of incentive
compensation. Excluding these headwinds, Total Company organic
Adjusted EBITDA would be down slightly year-over-year at the
mid-point, including approximately 6% organic growth in Core
business EBITDA.
Expected Topgolf separation costs:
- The Company continues to expect approximately $50 million in one-time separation costs.
- The guidance below includes an estimated incremental
$15 million in operating expense at
Topgolf for standalone public company costs in 2025.
The Company's full year outlook is as follows:
|
2025 FULL YEAR
OUTLOOK
|
|
(in millions, except
where noted otherwise and for percentages)
|
|
|
|
|
2025
Estimate(1)
|
2024
As
Reported
|
|
Consolidated Net
Revenues
|
$4.0 -
$4.185B
|
$4.24B
|
|
Core Business
Revenue
|
$2.275 -
2.35B
|
$2.43B
|
|
Topgolf
Revenue(3)
|
$1.725 -
1.835B
|
$1.81B
|
|
Topgolf Same Venue
Sales Growth
|
Down Mid-single
Digits
|
(9) %
|
|
Consolidated Adjusted
EBITDA(2)
|
$415 - $505
|
$588
|
|
Core Business Adjusted
EBITDA(2)
|
$175 - $205
|
$251
|
|
Topgolf Adjusted
EBITDA(2)(3)
|
$240 - $300
|
$337
|
|
|
|
|
(1) 2025
includes an estimated $60 million unfavorable year-over-year
foreign currency translation impact on Core business
revenue
|
|
(2) 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.
|
|
(3)
Topgolf guidance includes Toptracer
|
|
2025 FIRST QUARTER
OUTLOOK
|
|
(in millions, except
where noted otherwise)
|
|
|
Q1
2025
Estimate(1)
|
|
Q1
2024
As
Reported
|
|
Consolidated Net
Revenues
|
$1.045 -
$1.085B
|
|
$1.14B
|
|
Consolidated Adjusted
EBITDA
|
$125 - $145
|
|
$161
|
|
|
|
|
|
(1) 2025
estimates include approximately $18 million of unfavorable foreign
currency impact on Core business revenue.
|
|
ADDITIONAL INFORMATION AND DISCLOSURES
Conference Call and Webcast
The Company will be holding a conference call at 2:00 p.m. Pacific time today, February 24,
2025, 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.
An earnings presentation including additional details will be
available ahead of our call. 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 certain non-cash amortization of
acquired intangible assets, including customer and distributor
relationships, reacquired distribution rights and acquired
developed technology related to the Company's merger with Topgolf,
acquisitions of Jack Wolfskin, TravisMathew and OGIO, and
reacquisition of distribution rights in the Korea apparel market.
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 costs in the Active Lifestyle and Golf Equipment
segment, costs incurred related to the planned separation of
Topgolf, currency translation adjustments for the dissolution of a
foreign subsidiary, the 2024 debt repricing, a 2023 cybersecurity
incident, additional impairment and abandonment of the Shankstars
media game, and IT integration costs stemming primarily from the
merger with Topgolf. For 2023, non-recurring items include
charges related to the impairment and abandonment of the Shankstars
media game, costs incurred for the 2023 debt refinancing, IT
integration and implementation costs stemming from acquisitions,
restructuring and reorganization charges in our Topgolf and Active
Lifestyle segments and costs related to a cybersecurity
incident.
Non-Cash Goodwill and Intangible Assets Impairment. The
Company provided information excluding goodwill and intangible
assets impairment charges related to its Topgolf operating segment.
The non-cash impairment charges were taken as part of the Company's
annual assessment of fair value. Given the decline in same
venue sales in 2024, the company determined that the carrying value
of the Topgolf assets exceeded their fair value and therefore
recognized the impairment charge.
Adjusted EBITDA. The Company provided 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
adjustments referenced above.
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, Core business Adjusted EBITDA 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') first quarter and full year 2025 guidance (including
net revenues, Core business revenues, Topgolf revenues, Adjusted
EBITDA, Core business adjusted EBITDA, Topgolf Adjusted EBITDA,
non-GAAP diluted earnings per share, same venue sales growth, cash
generation and diluted shares outstanding), our plans to pursue a
separation of the Topgolf business, the timing and method of the
separation, the anticipated benefits, expenses, dis-synergies and
other effects of the separation, the expected financial and
operational performance of, and future opportunities for, each of
the two independent companies following the separation, the tax
treatment of the separation, the leadership of the two independent
companies following the separation, cost reduction activities,
effects of Topgolf switching to retail calendar reporting in 2025,
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 and tariff 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 grow same venue sales; 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; 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, 2024
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 and Jack Wolfskin. "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)
|
|
|
December 31,
2024
|
|
December 31,
2023
|
|
ASSETS
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
$
445.0
|
|
$
393.5
|
|
Restricted
cash
|
0.7
|
|
0.8
|
|
Accounts receivable,
net
|
175.7
|
|
200.5
|
|
Inventories
|
757.3
|
|
794.4
|
|
Other current
assets
|
222.0
|
|
238.9
|
|
Total current
assets
|
1,600.7
|
|
1,628.1
|
|
Property, plant and
equipment, net
|
2,219.0
|
|
2,156.5
|
|
Operating lease
right-of-use assets, net
|
1,339.2
|
|
1,410.1
|
|
Goodwill and intangible
assets, net
|
1,992.8
|
|
3,494.2
|
|
Other assets,
net
|
484.4
|
|
431.7
|
|
Total
assets
|
$
7,636.1
|
|
$
9,120.6
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts payable and
accrued expenses
|
$
451.3
|
|
$
480.5
|
|
Accrued employee
compensation and benefits
|
113.4
|
|
113.1
|
|
Asset-based credit
facilities
|
25.4
|
|
54.7
|
|
Operating lease
liabilities, short-term
|
89.3
|
|
86.4
|
|
Construction
advances
|
6.0
|
|
59.3
|
|
Deferred
revenue
|
96.0
|
|
110.9
|
|
Other current
liabilities
|
44.5
|
|
42.7
|
|
Total current
liabilities
|
825.9
|
|
947.6
|
|
Long-term debt,
net
|
1,457.9
|
|
1,518.2
|
|
Operating lease
liabilities, long-term
|
1,377.1
|
|
1,433.4
|
|
Deemed landlord
financing obligations
|
1,194.8
|
|
980.0
|
|
Deferred taxes,
net
|
24.9
|
|
36.7
|
|
Other long-term
liabilities
|
347.8
|
|
326.5
|
|
Total shareholders'
equity
|
2,407.7
|
|
3,878.2
|
|
Total liabilities and
shareholders' equity
|
$
7,636.1
|
|
$
9,120.6
|
|
TOPGOLF CALLAWAY
BRANDS CORP.
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
(In millions, except
per share data)
|
|
(Unaudited)
|
|
|
Three Months Ended
December 31,
|
|
Twelve Months Ended
December 31,
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
|
Net
revenues:
|
|
|
|
|
|
|
|
|
Products
|
$
489.1
|
|
$
461.9
|
|
$
2,447.8
|
|
$
2,540.1
|
|
Services
|
435.3
|
|
435.2
|
|
1,791.5
|
|
1,744.7
|
|
Total net
revenues
|
924.4
|
|
897.1
|
|
4,239.3
|
|
4,284.8
|
|
Costs and
expenses:
|
|
|
|
|
|
|
|
|
Cost of
products
|
284.9
|
|
276.9
|
|
1,401.7
|
|
1,443.9
|
|
Cost of services,
excluding depreciation and amortization
|
45.8
|
|
45.4
|
|
186.7
|
|
186.8
|
|
Other venue
expense
|
315.1
|
|
317.6
|
|
1,303.5
|
|
1,252.3
|
|
Selling, general and
administrative expense
|
262.6
|
|
246.0
|
|
1,045.7
|
|
1,036.6
|
|
Research and
development expense
|
19.9
|
|
34.2
|
|
92.1
|
|
101.6
|
|
Goodwill and
intangible assets impairment
|
1,452.0
|
|
—
|
|
1,452.0
|
|
—
|
|
Venue pre-opening
costs
|
4.9
|
|
9.6
|
|
14.8
|
|
25.9
|
|
Total costs and
expenses
|
2,385.2
|
|
929.7
|
|
5,496.5
|
|
4,047.1
|
|
(Loss) income from
operations
|
(1,460.8)
|
|
(32.6)
|
|
(1,257.2)
|
|
237.7
|
|
Interest expense,
net
|
(57.7)
|
|
(56.6)
|
|
(231.2)
|
|
(210.2)
|
|
Other income,
net
|
4.4
|
|
4.9
|
|
15.2
|
|
7.3
|
|
(Loss) income before
taxes
|
(1,514.1)
|
|
(84.3)
|
|
(1,473.2)
|
|
34.8
|
|
Income tax
benefit
|
(1.4)
|
|
(7.2)
|
|
(25.5)
|
|
(60.2)
|
|
Net (loss)
income
|
$
(1,512.7)
|
|
$
(77.1)
|
|
$
(1,447.7)
|
|
$
95.0
|
|
|
|
|
|
|
|
|
|
(Loss) earnings per
common share:
|
|
|
|
|
|
|
|
|
Basic
|
$
(8.23)
|
|
$
(0.42)
|
|
$
(7.88)
|
|
$
0.51
|
|
Diluted
|
$
(8.23)
|
|
$
(0.42)
|
|
$
(7.88)
|
|
$
0.50
|
|
Weighted-average common
shares outstanding:
|
|
|
|
|
|
|
|
|
Basic
|
183.7
|
|
184.4
|
|
183.7
|
|
185.0
|
|
Diluted
|
183.7
|
|
184.4
|
|
183.7
|
|
201.1
|
|
TOPGOLF CALLAWAY
BRANDS CORP.
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOW
|
|
(In
millions)
|
|
(Unaudited)
|
|
|
Twelve Months
Ended
December
31,
|
|
2024
|
|
2023
|
|
Cash flows from
operating activities:
|
|
|
|
|
Net (loss)
income
|
$
(1,447.7)
|
|
$
95.0
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
Depreciation and amortization
|
268.4
|
|
239.7
|
|
Non-cash
interest on financing and deemed landlord financed
leases
|
29.6
|
|
22.8
|
|
Amortization of debt discount and issuance costs
|
5.7
|
|
6.5
|
|
Goodwill and
intangible assets impairment
|
1,452.0
|
|
—
|
|
Impairment on
long-lived assets
|
7.4
|
|
11.7
|
|
Deferred
taxes, net
|
(48.2)
|
|
(88.9)
|
|
Share-based
compensation
|
37.0
|
|
46.7
|
|
Loss on debt
modification
|
4.7
|
|
10.5
|
|
Loss on disposal and
the dissolution of long-lived assets
|
7.6
|
|
—
|
|
Loss on sale of
business lines
|
9.6
|
|
—
|
|
Unrealized net losses
on hedging instruments and foreign currency
|
7.5
|
|
8.7
|
|
Other
|
1.7
|
|
1.4
|
|
Changes in assets and
liabilities, net of impacts from business combinations
|
46.7
|
|
10.6
|
|
Net cash provided by
operating activities
|
382.0
|
|
364.7
|
|
|
|
|
|
Cash flows from
investing activities, net of impacts of business
combinations:
|
|
|
|
|
Capital
expenditures
|
(295.4)
|
|
(482.0)
|
|
Asset acquisitions,
net of cash acquired
|
—
|
|
(31.2)
|
|
Business combinations,
net of cash acquired
|
(23.3)
|
|
(29.7)
|
|
Proceeds from
government grants
|
1.0
|
|
3.0
|
|
Investment in
golf-related ventures
|
(4.3)
|
|
(2.5)
|
|
Acquisition of
intangible assets
|
(3.2)
|
|
(0.8)
|
|
Proceeds from sale of
property and equipment
|
0.6
|
|
0.3
|
|
Proceeds from sale of
business lines
|
27.3
|
|
—
|
|
Net cash used in
investing activities
|
(297.3)
|
|
(542.9)
|
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
|
Repayments of
long-term debt and DLF obligations
|
(78.9)
|
|
(794.5)
|
|
Proceeds from
borrowings on long-term debt
|
—
|
|
1,224.8
|
|
Repayments of credit
facilities, net
|
(25.5)
|
|
(272.4)
|
|
Debt issuance
costs
|
(0.2)
|
|
(1.8)
|
|
Repayments of
financing leases
|
(3.2)
|
|
(2.8)
|
|
Proceeds from lease
financing
|
115.5
|
|
274.3
|
|
Exercise of stock
options
|
0.1
|
|
4.2
|
|
Acquisition of
treasury stock
|
(31.4)
|
|
(56.0)
|
|
Net cash (used in)
provided by financing activities
|
(23.6)
|
|
375.8
|
|
Effect of exchange rate
changes on cash, cash equivalents and restricted cash
|
(9.6)
|
|
(2.2)
|
|
Net increase in cash,
cash equivalents and restricted cash
|
51.5
|
|
195.4
|
|
Cash, cash equivalents
and restricted cash at beginning of period
|
398.8
|
|
203.4
|
|
Cash, cash equivalents
and restricted cash at end of period
|
450.3
|
|
398.8
|
|
Less: restricted
cash(1)
|
(5.3)
|
|
(5.3)
|
|
Cash and cash
equivalents at end of period
|
$
445.0
|
|
$
393.5
|
|
|
|
|
|
(1) Includes
$0.7 million and $0.8 million of short-term restricted cash and
$4.6 million and $4.5 million of long-term restricted
cash included in other assets for the periods ended December 31,
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
December
31,
|
|
Growth/(Decline)
|
|
Constant
Currency
vs.
2023(1)
|
|
2024
|
|
2023
|
|
Dollars
|
|
Percent
|
|
Percent
|
|
Net
revenues:
|
|
|
|
|
|
|
|
|
|
|
Venues
|
$
420.0
|
|
$
422.2
|
|
$
(2.2)
|
|
(0.5 %)
|
|
(0.6 %)
|
|
Topgolf other business
lines
|
19.0
|
|
16.8
|
|
2.2
|
|
13.1 %
|
|
13.1 %
|
|
Golf Clubs
|
178.8
|
|
160.2
|
|
18.6
|
|
11.6 %
|
|
12.3 %
|
|
Golf Balls
|
46.0
|
|
39.2
|
|
6.8
|
|
17.3 %
|
|
17.6 %
|
|
Apparel
|
191.3
|
|
181.9
|
|
9.4
|
|
5.2 %
|
|
5.5 %
|
|
Gear, Accessories
& Other
|
69.3
|
|
76.8
|
|
(7.5)
|
|
(9.8 %)
|
|
(9.4 %)
|
|
Total net
revenues
|
$
924.4
|
|
$
897.1
|
|
$
27.3
|
|
3.0 %
|
|
3.2 %
|
|
|
|
|
|
|
|
|
|
|
|
(1) See
"Additional Information and Disclosures—Non-GAAP Information" for
the calculation methodology of constant currency
measures.
|
|
|
|
|
|
|
|
|
|
|
|
Net Revenues by
Region
|
|
Three Months
Ended
December
31,
|
|
Growth/(Decline)
|
|
Constant
Currency
vs. 2023(1)
|
|
2024
|
|
2023
|
|
Dollars
|
|
Percent
|
|
Percent
|
|
Net
revenues:
|
|
|
|
|
|
|
|
|
|
|
United
States
|
$
657.6
|
|
$
646.3
|
|
$
11.3
|
|
1.7 %
|
|
1.7 %
|
|
Europe
|
119.0
|
|
117.3
|
|
1.7
|
|
1.4 %
|
|
0.6 %
|
|
Asia
|
123.9
|
|
112.8
|
|
11.1
|
|
9.8 %
|
|
12.1 %
|
|
Rest of
world
|
23.9
|
|
20.7
|
|
3.2
|
|
15.5 %
|
|
16.4 %
|
|
Total net
revenues
|
$
924.4
|
|
$
897.1
|
|
$
27.3
|
|
3.0 %
|
|
3.2 %
|
|
|
|
|
|
|
|
|
|
|
|
(1) See
"Additional Information and Disclosures—Non-GAAP Information" for
the calculation methodology of constant currency
measures.
|
|
|
|
|
|
|
|
|
|
|
|
Operating Segment
Information
|
|
Three Months
Ended
December
31,
|
|
Growth/(Decline)
|
|
Constant
Currency
vs. 2023(1)
|
|
2024
|
|
2023
|
|
Dollars
|
|
Percent
|
|
Percent
|
|
Net
revenues:
|
|
|
|
|
|
|
|
|
|
|
Topgolf
|
$
439.0
|
|
$
439.0
|
|
$
—
|
|
— %
|
|
(0.1 %)
|
|
Golf
Equipment
|
224.8
|
|
199.4
|
|
25.4
|
|
12.7 %
|
|
13.3 %
|
|
Active
Lifestyle
|
260.6
|
|
258.7
|
|
1.9
|
|
0.7 %
|
|
1.1 %
|
|
Total net
revenues
|
$
924.4
|
|
$
897.1
|
|
$
27.3
|
|
3.0 %
|
|
3.2 %
|
|
|
|
|
|
|
|
|
|
|
|
Segment operating
income:
|
|
|
|
|
|
|
|
|
|
|
Topgolf
|
$
26.9
|
|
$
23.1
|
|
$
3.8
|
|
16.5 %
|
|
|
|
Golf
Equipment
|
(2.7)
|
|
(19.9)
|
|
17.2
|
|
(86.4 %)
|
|
|
|
Active
Lifestyle
|
23.6
|
|
20.2
|
|
3.4
|
|
16.8 %
|
|
|
|
Total segment operating
income
|
47.8
|
|
23.4
|
|
24.4
|
|
104.3 %
|
|
|
|
Corporate G&A and
other(2)
|
(1,508.6)
|
|
(56.0)
|
|
(1,452.6)
|
|
n/m
|
|
|
|
Total operating
loss
|
(1,460.8)
|
|
(32.6)
|
|
(1,428.2)
|
|
n/m
|
|
|
|
Interest expense,
net
|
(57.7)
|
|
(56.6)
|
|
(1.1)
|
|
1.9 %
|
|
|
|
Other income,
net
|
4.4
|
|
4.9
|
|
(0.5)
|
|
(10.2 %)
|
|
|
|
Total loss before
income taxes
|
$ (1,514.1)
|
|
$
(84.3)
|
|
$
(1,429.8)
|
|
n/m
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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
|
|
Twelve Months
Ended
December
31,
|
|
Growth/(Decline)
|
|
Constant
Currency
vs. 2023(1)
|
|
2024
|
|
2023
|
|
Dollars
|
|
Percent
|
|
Percent
|
|
Net
revenues:
|
|
|
|
|
|
|
|
|
|
|
Venues
|
$
1,728.3
|
|
$
1,692.6
|
|
$
35.7
|
|
2.1 %
|
|
2.0 %
|
|
Topgolf other business
lines
|
81.1
|
|
68.4
|
|
12.7
|
|
18.6 %
|
|
17.7 %
|
|
Golf Clubs
|
1,060.9
|
|
1,073.5
|
|
(12.6)
|
|
(1.2 %)
|
|
— %
|
|
Golf Balls
|
321.1
|
|
314.0
|
|
7.1
|
|
2.3 %
|
|
2.7 %
|
|
Apparel
|
676.5
|
|
713.2
|
|
(36.7)
|
|
(5.1 %)
|
|
(4.5 %)
|
|
Gear, Accessories
& Other
|
371.4
|
|
423.1
|
|
(51.7)
|
|
(12.2 %)
|
|
(11.8 %)
|
|
Total net
revenues
|
$
4,239.3
|
|
$
4,284.8
|
|
$
(45.5)
|
|
(1.1 %)
|
|
(0.6 %)
|
|
|
|
|
|
|
|
|
|
|
|
(1) See
"Additional Information and Disclosures—Non-GAAP Information" for
the calculation methodology of constant currency
measures.
|
|
|
|
|
|
|
|
|
|
|
|
Net Revenues by
Region
|
|
Twelve Months
Ended
December
31,
|
|
Growth/(Decline)
|
|
Constant
Currency
vs. 2023(1)
|
|
2024
|
|
2023
|
|
Dollars
|
|
Percent
|
|
Percent
|
|
Net
revenues:
|
|
|
|
|
|
|
|
|
|
|
United
States
|
$
3,102.5
|
|
$
3,081.4
|
|
$
21.1
|
|
0.7 %
|
|
0.7 %
|
|
Europe
|
511.1
|
|
540.6
|
|
(29.5)
|
|
(5.5 %)
|
|
(6.7 %)
|
|
Asia
|
487.6
|
|
531.9
|
|
(44.3)
|
|
(8.3 %)
|
|
(3.9 %)
|
|
Rest of
world
|
138.1
|
|
130.9
|
|
7.2
|
|
5.5 %
|
|
6.4 %
|
|
Total net
revenues
|
$
4,239.3
|
|
$
4,284.8
|
|
$
(45.5)
|
|
(1.1 %)
|
|
(0.6 %)
|
|
|
|
|
|
|
|
|
|
|
|
(1) See
"Additional Information and Disclosures—Non-GAAP Information" for
the calculation methodology of constant currency
measures.
|
|
|
|
|
|
|
|
|
|
|
|
Operating Segment
Information
|
|
Twelve Months
Ended
December
31,
|
|
Growth/(Decline)
|
|
Constant
Currency
vs. 2023(1)
|
|
2024
|
|
2023
|
|
Dollars
|
|
Percent
|
|
Percent
|
|
Net
revenues:
|
|
|
|
|
|
|
|
|
|
|
Topgolf
|
$
1,809.4
|
|
$
1,761.0
|
|
$
48.4
|
|
2.7 %
|
|
2.6 %
|
|
Golf
Equipment
|
1,382.0
|
|
1,387.5
|
|
(5.5)
|
|
(0.4 %)
|
|
0.6 %
|
|
Active
Lifestyle
|
1,047.9
|
|
1,136.3
|
|
(88.4)
|
|
(7.8 %)
|
|
(7.2 %)
|
|
Total net
revenues
|
$
4,239.3
|
|
$
4,284.8
|
|
$
(45.5)
|
|
(1.1 %)
|
|
(0.6 %)
|
|
|
|
|
|
|
|
|
|
|
|
Segment operating
income:
|
|
|
|
|
|
|
|
|
|
|
Topgolf
|
$
114.2
|
|
$
108.8
|
|
$
5.4
|
|
5.0 %
|
|
|
|
Golf
Equipment
|
183.6
|
|
193.3
|
|
(9.7)
|
|
(5.0) %
|
|
|
|
Active
Lifestyle
|
82.4
|
|
117.0
|
|
(34.6)
|
|
(29.6) %
|
|
|
|
Total segment operating
income
|
380.2
|
|
419.1
|
|
(38.9)
|
|
(9.3) %
|
|
|
|
Corporate costs and
expenses(2)
|
(1,637.4)
|
|
(181.4)
|
|
(1,456.0)
|
|
n/m
|
|
|
|
Total operating (loss)
income
|
(1,257.2)
|
|
237.7
|
|
(1,494.9)
|
|
n/m
|
|
|
|
Interest expense,
net
|
(231.2)
|
|
(210.2)
|
|
(21.0)
|
|
10.0 %
|
|
|
|
Other income,
net
|
15.2
|
|
7.3
|
|
7.9
|
|
108.2 %
|
|
|
|
Total (loss) income
before income taxes
|
$ (1,473.2)
|
|
$
34.8
|
|
$
(1,508.0)
|
|
n/m
|
|
|
|
|
(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.
|
|
SUPPLEMENTAL
FINANCIAL INFORMATION AND NON-GAAP RECONCILIATION
|
|
(In millions, except
per share data)
|
|
(Unaudited)
|
|
|
Three Months Ended
December 31,
|
|
2024
|
|
2023
|
|
GAAP
|
|
Non-Cash
Acquisition-
related
Amortization(1)
|
|
Non-Cash
Goodwill and
Intangible
Assets
Impairment (2)
|
|
Non-
Recurring
Items(3)
|
|
Tax Valuation
Allowance
|
|
Non-
GAAP
|
|
GAAP
|
|
Non-Cash
Acquisition-
related
Amortization(1)
|
|
Non-Cash
Goodwill and
Intangible
Assets
Impairment (2)
|
|
Non-
Recurring
Items(4)
|
|
Tax Valuation
Allowance(5)
|
|
Non-
GAAP
|
|
(Loss) income from
operations
|
$
(1,460.8)
|
|
$
(2.8)
|
|
$
(1,452.0)
|
|
$
(24.5)
|
|
$
—
|
|
$
18.5
|
|
$
(32.6)
|
|
$
(2.8)
|
|
$
—
|
|
$
(21.1)
|
|
$
—
|
|
$
(8.7)
|
|
Net (loss)
income
|
$
(1,512.7)
|
|
$
(2.3)
|
|
$
(1,424.6)
|
|
$
(26.0)
|
|
$
—
|
|
$
(59.8)
|
|
$
(77.1)
|
|
$
(2.1)
|
|
$
—
|
|
$
(16.0)
|
|
$
(1.1)
|
|
$
(57.9)
|
|
(Loss) earnings per
share - diluted (5)
|
$
(8.23)
|
|
$
(0.01)
|
|
$
(7.76)
|
|
$
(0.14)
|
|
$
—
|
|
$
(0.33)
|
|
$
(0.42)
|
|
$
(0.01)
|
|
$
—
|
|
$
(0.09)
|
|
$
(0.01)
|
|
$
(0.31)
|
|
|
(1) Includes
the amortization of acquired intangible assets, including customer
and distributor relationships, reacquired distribution rights and
acquired developed technology related to our merger with Topgolf,
acquisitions of Jack Wolfskin, TravisMathew and OGIO, and
reacquisition of distribution rights in the Korea apparel market
(collectively, the "Acquisitions"). While the amortization of
acquired intangible assets is excluded from our calculation of
non-GAAP net income, the revenue, operating costs and associated
acquired assets that contribute to the revenue generation
associated with these acquired companies is reflected in our
calculation of non-GAAP net income. Starting in the second quarter
of 2024, the depreciation and amortization associated with purchase
accounting adjustments stemming from these acquisitions is 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 December 31, 2024 and
2023, non-cash depreciation and amortization related to these
purchase accounting adjustments was $1.3 million and $2.1 million,
respectively.
|
|
(2) Represents non-cash
goodwill and intangible assets impairment recognized during the
fourth quarter of 2024 in our Topgolf operating segment.
|
|
(3)
Primarily includes a $9.6 million loss related to the sale of
the WGT business, $8.3 million of restructuring and reorganization
charges, and $5.5 million of costs incurred related to the planned
separation of Topgolf.
|
|
(4) Primarily includes $12.7
million in total charges related to the impairment and abandonment
of the Shankstars media game in the Topgolf operating segment, $6.5
million of reorganization costs in the Topgolf and Active Lifestyle
segments, and $0.9 million in IT costs related to a cybersecurity
incident.
|
|
(5)
Release of tax valuation allowances recorded in connection with the
merger with Topgolf.
|
|
(6)
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.
|
|
Twelve months ended
December 31,
|
|
2024
|
|
2023
|
|
GAAP
|
|
Non-Cash
Acquisition-
related
Amortization(1)
|
|
Non-Cash
Goodwill and
Intangible
Assets
Impairment (2)
|
|
Non-
Recurring
Items(3)
|
|
Tax Valuation
Allowance(5)
|
|
Non-
GAAP
|
|
GAAP
|
|
Non-Cash
Acquisition-
related
Amortization(1)
|
|
Non-Cash
Goodwill and
Intangible
Assets
Impairment (2)
|
|
Non-
Recurring
Items(4)
|
|
Tax Valuation
Allowance(5)
|
|
Non-
GAAP
|
|
(Loss) income from
operations
|
$
(1,257.2)
|
|
$
(11.5)
|
|
$
(1,452.0)
|
|
$
(49.6)
|
|
$
—
|
|
$
255.9
|
|
$
237.7
|
|
$
(14.0)
|
|
$
—
|
|
$
(37.5)
|
|
$
—
|
|
$
289.2
|
|
Net (loss)
income
|
$
(1,447.7)
|
|
$
(9.6)
|
|
$
(1,424.6)
|
|
$
(55.5)
|
|
$
—
|
|
$
42.0
|
|
$
95.0
|
|
$
(10.6)
|
|
$
—
|
|
$
(36.6)
|
|
$
58.3
|
|
$
83.9
|
|
(Loss) earnings per
share - diluted (5)
|
$
(7.88)
|
|
$
(0.05)
|
|
$
(7.72)
|
|
$
(0.30)
|
|
$
—
|
|
$
0.23
|
|
$
0.50
|
|
$
(0.05)
|
|
$
—
|
|
$
(0.18)
|
|
$
0.29
|
|
$
0.45
|
|
|
(1) Includes
the amortization of acquired intangible assets, including customer
and distributor relationships, reacquired distribution rights and
acquired developed technology related to our merger with Topgolf,
acquisitions of Jack Wolfskin, TravisMathew and OGIO, and
reacquisition of distribution rights in the Korea apparel market
(collectively, the "Acquisitions"). While the amortization of
acquired intangible assets is excluded from our calculation of
non-GAAP net income, the revenue, operating costs and associated
acquired assets that contribute to the revenue generation
associated with these acquired companies is reflected in our
calculation of non-GAAP net income. Starting in the second quarter
of 2024, the depreciation and amortization associated with purchase
accounting adjustments stemming from these acquisitions is 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 twelve months ended December 31, 2024 and
2023, non-cash depreciation and amortization related to these
purchase accounting adjustments was $6.0 million and $11.8 million,
respectively.
|
|
(2)
Represents non-cash goodwill and intangible assets impairment
recognized during the fourth quarter of 2024 in our Topgolf
operating segment.
|
|
(3)
Primarily includes $22.9 million of restructuring and
reorganization charges, a $9.6 million loss related to the sale of
the WGT business, $8.0 million of costs incurred related to the
planned separation of Topgolf, $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, $2.1 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.
|
|
(4) Primarily includes $12.7
million in total charges related to the impairment and abandonment
of the Shankstars media game in the Topgolf segment, $12.3 million
of total reorganization costs in the Topgolf and Active Lifestyle
segments, $13.7 million in total charges related to our 2023 debt
modification, $4.2 million in IT integration costs primarily
related to the Topgolf merger, and $2.4 million in costs related to
a cybersecurity incident.
|
|
(5)
Related to the release of tax valuation allowances recorded in
connection with the merger with Topgolf.
|
|
(6)
For 2024, on an as reported 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.
|
|
2024 Trailing Twelve Month Adjusted
EBITDA
|
|
2023 Trailing Twelve Month Adjusted
EBITDA
|
|
Quarter
Ended
|
|
Quarter
Ended
|
|
March
31,
|
|
June
30,
|
|
September
30,
|
|
December
31,
|
|
|
|
March
31,
|
|
June
30,
|
|
September
30,
|
|
December
31,
|
|
|
|
2024
|
|
2024
|
|
2024
|
|
2024
|
|
Total
|
|
2023
|
|
2023
|
|
2023
|
|
2023
|
|
Total
|
|
Net income
(loss)
|
$
6.5
|
|
$
62.1
|
|
$
(3.6)
|
|
$
(1,512.7)
|
|
$
(1,447.7)
|
|
$
25.0
|
|
$
117.4
|
|
$
29.7
|
|
$
(77.1)
|
|
$
95.0
|
|
Interest expense,
net
|
58.8
|
|
57.0
|
|
57.7
|
|
57.7
|
|
231.2
|
|
49.6
|
|
51.7
|
|
52.3
|
|
56.6
|
|
210.2
|
|
Income tax provision
(benefit)
|
5.0
|
|
(9.7)
|
|
(19.4)
|
|
(1.4)
|
|
(25.5)
|
|
(4.2)
|
|
(45.8)
|
|
(3.0)
|
|
(7.2)
|
|
(60.2)
|
|
Non-cash depreciation
and amortization expense
|
65.4
|
|
65.8
|
|
68.1
|
|
69.1
|
|
268.4
|
|
56.1
|
|
58.6
|
|
61.0
|
|
64.0
|
|
239.7
|
|
Non-cash stock
compensation and stock warrant expense, net
|
14.2
|
|
7.0
|
|
7.8
|
|
9.0
|
|
38.0
|
|
12.5
|
|
12.3
|
|
13.2
|
|
8.4
|
|
46.4
|
|
Non-cash lease
amortization expense
|
3.5
|
|
3.6
|
|
2.8
|
|
3.2
|
|
13.1
|
|
4.6
|
|
4.4
|
|
4.5
|
|
4.4
|
|
17.9
|
|
Non-cash goodwill &
intangible assets impairment
|
—
|
|
—
|
|
—
|
|
1,452.0
|
|
1,452.0
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Non-recurring items,
before taxes(1)
|
7.5
|
|
19.8
|
|
6.4
|
|
24.5
|
|
58.2
|
|
13.7
|
|
7.6
|
|
5.6
|
|
20.7
|
|
47.6
|
|
Adjusted
EBITDA
|
$
160.9
|
|
$
205.6
|
|
$
119.8
|
|
$
101.4
|
|
$ 587.7
|
|
$
157.3
|
|
$
206.2
|
|
$
163.3
|
|
$
69.8
|
|
$ 596.6
|
|
|
(1) In 2024,
amounts include restructuring and reorganization charges, costs
incurred related to the planned separation of Topgolf, 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, a loss on disposal on
the sale on the WGT business, IT integration costs associated with
the implementation of a new cloud based HRM system, and IT costs
related to a 2023 cybersecurity incident. 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.
|
|
Reconciliation of
Consolidated Non-GAAP Adjusted Free Cash Flow
|
Twelve Months Ended
December 31,
|
|
2024
|
|
2023
|
|
GAAP cash flows
provided by operations (1)
|
$
382.0
|
|
$
364.7
|
|
Less: capital
expenditures (1)
|
(295.4)
|
|
(482.0)
|
|
Add: proceeds from
lease financing and government grants (1)
|
116.5
|
|
277.3
|
|
Consolidated
Non-GAAP Adjusted Free Cash Flow
|
$
203.1
|
|
$
160.0
|
|
(1) Source:
Consolidated statement of cash flows within the Company's annual
report on Form 10-K.
|
|
Reconciliation of
Topgolf Adjusted Segment EBITDA
|
Three Months Ended
December 31,
|
|
Twelve Months Ended
December 31,
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
|
|
|
|
|
|
|
|
|
Topgolf Segment
operating income(1):
|
$
26.9
|
|
$
23.1
|
|
$
114.2
|
|
$
108.8
|
|
Non-GAAP depreciation
and amortization expense
|
51.5
|
|
45.4
|
|
199.9
|
|
164.9
|
|
Non-cash stock
compensation expense
|
1.9
|
|
0.5
|
|
10.3
|
|
12.9
|
|
Non-cash lease
amortization expense
|
3.3
|
|
3.9
|
|
12.4
|
|
17.1
|
|
Other (income) expense,
net
|
(0.1)
|
|
0.3
|
|
0.4
|
|
0.6
|
|
Topgolf Adjusted
Segment EBITDA
|
$
83.5
|
|
$
73.2
|
|
$
337.2
|
|
$
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.
