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The moment in time has arrived yet again, that represents a cross roads of sorts. The conversation is temporarily centered on the year that was. But it quickly transitions to the year that is in progress and what it might or could be. Part of the clues are supposed to be in the trailing results. However, the world is a different place for many consumers and businesses already in 2009. While 2008 fades in the rearview mirror, clearly the focal point for all centers on visibility for what lays ahead.
Callaway Golf (ELY:NYSE) reported its fourth quarter and year end numbers for the 2008 campaign. What appeared to be promising, as the year began, underscored with record sell in to retail accounts domestically and internationally has quickly changed course due to the economy as well as foreign exchange rates. Net sales last year were $1.117 billion, which generated a net income of $66.2 million for Big Bertha. Drilling down a little into the product categories show Callaway’s metal woods business in 2008 was down 12% or $37.6 million. Its irons business was down $1 million over 2007, while putter sales were lower by $7 million or 7%. Golf balls were up $10 million in 2008 or 5% and the segment that delivered the most came from none other than accessories which was up 15% or $28.6 million over 2007. The net, net was drop is revenues of $7.4 million or 1% of Callaway’s top line sales
"Looking forward," said George Fellows, President and CEO, "we expect more challenges as a result of continued unfavorable global economic conditions. In addition, given the recent overall strengthening of the US dollar, we anticipate that foreign currency exchange rates will have a significant adverse impact upon the translation of our international results in 2009 and therefore on our consolidated results. Because it is too difficult to predict what consumer spending or foreign currency rates will be in this environment, we are not providing specific financial guidance for 2009 at this time.”