第99.1展示文本
TOPGOLF CALLAWAY品牌宣佈2024年第二季度業績
宣佈對Topgolf進行正式戰略審查，包括有機和非有機部分。
替代方案
亮點
•淨利潤爲6200萬美元，Non-GAAP淨利潤爲8300萬美元，調整後的EBITDA爲20600萬美元，均超出預期。
•Q2綜合收入同比下降1.9%，全年營業收入和調整後EBITDA展望下調至4200 - 426000萬美元和570 - 59000萬美元的區間。
•在Driver、Fairway Woods和Irons三個領域，憑藉人工智能Smoke系列球杆，保持了美國模特市場的份額第一，並繼續通過新的Chrome Tour高爾夫球系列推動高爾夫球市場份額增長。
•成功完成自願支付5000萬美元的優先償還長期貸款。
•與去年相比，運營活動產生的現金流量淨額提高了17300萬美元。
2024年6月30日結束的第二季度，紐交所上的Topgolf Callaway Brands Corp.（以下簡稱「公司」或「Topgolf Callaway Brands」，「我們」）（股票代碼：MODG）宣佈其財務業績。
儘管宏觀風險包括負面外匯趨勢的累積影響、持續高通貨膨脹以及最近對我們的Topgolf場館流量的軟下滑，但我對我們團隊在產品業務中推動市場份額增長以及Topgolf數字能力和基本場所盈利能力持續增強感到非常自豪。 Topgolf Callaway Brands總裁兼首席執行官Chip Brewer評論道：“TravisMathew持續獲得市場份額，在今年開業的10家門店中發展其高利潤直銷消費業務。Jack Wolfskin成功調整了營運策略，聚焦中歐和中國等關鍵市場。我們的高爾夫裝備業績依舊強勁，尤其是在美國市場，我們的球杆市場份額持續領先於行業，我們的球類市場份額也在不斷增長。成功重塑和重新設計我們優質的Chrome Tour系列高爾夫球突顯了我們在研發上的卓越及對創新的承諾。
布魯爾先生繼續說：「展望未來，我們仍然相信Topgolf是一個質量高、未來機遇巨大的業務。」 它正在改變高爾夫球運動，我們相信隨着時間的推移，它將帶來可觀的增長和財務回報。 與此同時，我們對股票表現以及最近的同店銷售業績感到失望。 因此，我們正在進行Topgolf的全面戰略審查。這個審查包括評估使Topgolf恢復盈利的同店銷售增長的有機戰略，以及考慮無機替代方案，包括潛在的Topgolf分拆。 我們正在外部顧問的協助下進行Topgolf的戰略審查，並專注於最大化長期股東價值。我們目前在積極開展這項工作，預計將迅速完成對Topgolf的戰略審查。 在這項工作完成後，我們將彙報情況。”
1
合併業績
公司宣佈截至2024年6月30日和2023年的三個月和六個月的按照美國通用會計準則（GAAP）和非美國通用會計準則（非GAAP）的財務業績如下：
| GAAP 結果 | |||||||||||||||||||||||||||||||||||||||||||||||
| （以百萬計，百分比和每股數據除外） | 截至6月30日的三個月 | 截至6月30日的六個月 | |||||||||||||||||||||||||||||||||||||||||||||
| 2024 | 2023 | $ Change | % 變化 | 2024 | 2023 | $ Change | % 變化 | ||||||||||||||||||||||||||||||||||||||||
| 淨收入 | $ | 1,157.8 | $ | 1,179.7 | $ | (21.9) | (1.9) | % | $ | 2,302.0 | $ | 2,347.1 | $ | (45.1) | (1.9) | % | |||||||||||||||||||||||||||||||
| 運營收入 | 103.0 | 116.0 | (13.0) | (11.2) | % | 169.9 | 196.5 | (26.6) | (13.5) | % | |||||||||||||||||||||||||||||||||||||
| 其他費用，淨額 | (50.6) | (44.4) | (6.2) | 14.0 | % | (106.0) | (104.1) | (1.9) | 1.8 | % | |||||||||||||||||||||||||||||||||||||
| 稅前收入 | 52.4 | 71.6 | (19.2) | (26.8) | % | 63.9 | 92.4 | (28.5) | (30.8) | % | |||||||||||||||||||||||||||||||||||||
所得稅優惠 | (9.7) | (45.8) | 36.1 | (78.8) | % | (4.7) | (50.0) | 45.3 | (90.6) | % | |||||||||||||||||||||||||||||||||||||
| 淨收入 | $ | 62.1 | $ | 117.4 | $ | (55.3) | (47.1) | % | $ | 68.6 | $ | 142.4 | $ | (73.8) | (51.8) | % | |||||||||||||||||||||||||||||||
| 每股收益——攤薄 | $ | 0.32 | $ | 0.59 | $ | (0.27) | (45.8) | % | $ | 0.36 | $ | 0.72 | $ | (0.36) | (50.0) | % | |||||||||||||||||||||||||||||||
| 已發行普通股的加權平均值——攤薄 | 199.6 | 201.3 | (1.7) | (0.8) | % | 199.4 | 201.4 | (2.0) | (1.0) | % | |||||||||||||||||||||||||||||||||||||
非GAAP業績
非通用會計準則結果不包括在本報告的附加信息和披露部分中定義的某些非現金和非經常性調整項。公司還在本報告的表格中提供了非通用會計準則信息與最直接可比的通用會計準則信息的調和。
| (以百萬計，除百分比和每股數據外) | 截至6月30日的三個月 | 截至6月30日的六個月 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2024 | 2023 | $ 變化 | 百分比變動 | 持續不變 貨幣 與2023年相比(1) | 2024 | 2023 | $ 變化 | 百分比變動 | 持續不變 貨幣 與2023年相比(1) | ||||||||||||||||||||||||||||||||||||||||||||||||||
| 淨收入 | $ | 1,157.8 | $ | 1,179.7 | $ | (21.9) | (1.9) | % | (0.9) | % | $ | 2,302.0 | $ | 2,347.1 | $ | (45.1) | (1.9) | % | (1.1) | % | |||||||||||||||||||||||||||||||||||||||
| Non-GAAP經營收益 | $ | 121.8 | $ | 127.7 | $ | (5.9) | (4.6) | % | 0.2 | % | $ | 194.4 | $ | 215.7 | $ | (21.3) | (9.9) | % | (4.8) | % | |||||||||||||||||||||||||||||||||||||||
| 淨利潤 | $ | 83.1 | $ | 75.6 | $ | 7.5 | 9.9 | % | $ | 97.5 | $ | 106.0 | $ | (8.5) | (8.0) | % | |||||||||||||||||||||||||||||||||||||||||||
| 每股非通用會計淨利潤-攤薄 | $ | 0.42 | $ | 0.38 | $ | 0.04 | 11.8 | % | $ | 0.51 | $ | 0.54 | $ | (0.03) | (5.6) | % | |||||||||||||||||||||||||||||||||||||||||||
| 非通用會計原則調整後的稅息折舊及攤銷前利潤 | $ | 205.6 | $ | 206.2 | $ | (0.6) | (0.3) | % | $ | 366.5 | $ | 363.5 | $ | 3.0 | 0.8 | % | |||||||||||||||||||||||||||||||||||||||||||
(1) 有關恒定貨幣計量方法的計算方法，請參閱「附加信息和披露-非GAAP信息」 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2024年第二季度合併業績評論
（所有與之前時期的比較均按年同比計算，除非另有說明）
公司的淨營業收入爲115,780萬美元，同比下降1.9%，主要是由於高爾夫設備減少了8.2%，這是由於與去年相比計劃推出設備時間的調整。活躍生活方式收入下降了3.2%，主要是由於Jack Wolfskin的預期銷售額減少。Topgolf部門的收入同比增長5.0%，主要受到來自額外場館的收入驅動。
經營收入以財務會計準則減少1300萬美元，以非通用會計準則減少590萬美元，主要是由於外幣不利變動。
淨利潤按照通用會計準則下減少了5,530萬美元，按照非通用會計準則上增加了750萬美元，與去年同期相比。淨利潤在通用會計準則下的減少主要歸因於所得稅益的減少，前述營業利潤的減少以及與新場館有關的更高利息支出。根據非通用會計準則，淨利潤的增加主要是由於所得稅支出下降，以及由於我們的負債再融資導致利息支出降低。
2
調整後的EBITDA爲2.056億美元，與去年相比基本持平（-0.3%），超過了我們2024年第二季度指導區間的高端，這主要得益於成本降低和強勁的運營效率。
業務板塊業績
分段淨收入
下表顯示了所述期間各部門的淨收入：
| （以百萬爲單位，除百分比外） | 截至6月30日的三個月 | 持續不變 貨幣 與2023年相比(1) | 截至6月30日的六個月 | 持續不變 貨幣 與2023年相比(1) | |||||||||||||||||||||||||||||||||||||||||||
| 2024 | 2023 | 百分比變動 | 百分比變動 | 2024 | 2023 | 百分比變動 | 百分比變動 | ||||||||||||||||||||||||||||||||||||||||
| Topgolf | $ | 494.4 | $ | 470.8 | 5.0 | % | 5.0 | % | $ | 917.2 | $ | 874.3 | 4.9 | % | 4.8 | % | |||||||||||||||||||||||||||||||
| 高爾夫裝備 | 413.8 | 451.0 | (8.2) | % | (6.7) | % | 863.7 | 894.7 | (3.5) | % | (2.0) | % | |||||||||||||||||||||||||||||||||||
| 積極的生活方式 | 249.6 | 257.9 | (3.2) | % | (1.7) | % | 521.1 | 578.1 | (9.9) | % | (8.7) | % | |||||||||||||||||||||||||||||||||||
| 淨收入 | $ | 1,157.8 | $ | 1,179.7 | (1.9) | % | (0.9) | % | $ | 2,302.0 | $ | 2,347.1 | (1.9) | % | (1.1) | % | |||||||||||||||||||||||||||||||
(1) 有關恒定貨幣計量方法的計算方法，請參閱「附加信息和披露-非GAAP信息」 | |||||||||||||||||||||||||||||||||||||||||||||||
SEGMENT OPERATING INCOME
The table below provides the breakout of segment operating income for the periods presented:
| (in millions, except percentages) | Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||||||||||
| 2024 | 2023 | Change | 2024 | 2023 | Change | ||||||||||||||||||||||||||||||
| Topgolf | $ | 56.1 | $ | 44.0 | 27.5% | $ | 59.0 | $ | 46.8 | 26.1% | |||||||||||||||||||||||||
| % of segment revenue | 11.3 | % | 9.3 | % | 200 | bps | 6.4 | % | 5.4 | % | 100 | bps | |||||||||||||||||||||||
| Golf Equipment | 77.4 | 96.4 | (19.7)% | 159.5 | 178.0 | (10.4)% | |||||||||||||||||||||||||||||
| % of segment revenue | 18.7 | % | 21.4 | % | (270) | bps | 18.5 | % | 19.9 | % | (140) | bps | |||||||||||||||||||||||
| Active Lifestyle | 14.7 | 19.5 | (24.6)% | 39.4 | 56.8 | (30.6)% | |||||||||||||||||||||||||||||
| % of segment revenue | 5.9 | % | 7.6 | % | (170) | bps | 7.6 | % | 9.8 | % | (220) | bps | |||||||||||||||||||||||
| Total Segment Operating Income | $ | 148.2 | $ | 159.9 | (7.3)% | $ | 257.9 | $ | 281.6 | (8.4)% | |||||||||||||||||||||||||
| % of total segment revenue | 12.8 | % | 13.6 | % | (80) | bps | 11.2 | % | 12.0 | % | (80) | bps | |||||||||||||||||||||||
| Constant Currency Total Segment Operating Income | (3.5) | % | (4.5) | % | |||||||||||||||||||||||||||||||
SECOND QUARTER 2024 SEGMENT COMMENTARY
(All comparisons to prior periods are calculated on a year-over-year basis, unless otherwise noted)
Topgolf
•Segment revenue increased $23.6 million or 5.0%, to $494.4 million, driven primarily by new venues.
•Same venue sales of -8% were below expectations driven by softer-than-expected traffic as the business navigates the current cyclical macro challenges.
•Segment operating income increased $12.1 million, or 27.5%, to $56.1 million and Segment Adjusted EBITDA increased $17.4 million, or 18.9%, to $109.5 million primarily due to increased revenue from new venues and strong operating efficiencies.
Golf Equipment
•Segment revenue decreased $37.2 million or 8.2% to $413.8 million, in line with expectations. The decline was primarily due to the lapping effect of last year’s Big Bertha woods and irons launch, as well as changes in foreign exchange rates.
3
•Segment operating income decreased $19.0 million, primarily due to lower revenue, higher air freight costs and changes in foreign exchange rates, partially offset by management of operating expenses.
Active Lifestyle
•Segment revenue decreased $8.3 million or 3.2% to $249.6 million resulting primarily from previously expected lower wholesale revenue at Jack Wolfskin.
•Segment operating income decreased $4.8 million due to the decrease in revenue previously mentioned.
The following is a reconciliation of total segment operating income to income before income taxes for the periods presented:
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||
| (in millions) | 2024 | 2023 | $ Change | 2024 | 2023 | $ Change | |||||||||||||||||||||||||||||
| Total segment operating income: | $ | 148.2 | $ | 159.9 | $ | (11.7) | $ | 257.9 | $ | 281.6 | $ | (23.7) | |||||||||||||||||||||||
Reconciling items(1) | (45.2) | (43.9) | (1.3) | (88.0) | (85.1) | (2.9) | |||||||||||||||||||||||||||||
Income from operations | 103.0 | 116.0 | (13.0) | 169.9 | 196.5 | (26.6) | |||||||||||||||||||||||||||||
| Interest expense, net | (57.0) | (51.7) | (5.3) | (115.8) | (101.3) | (14.5) | |||||||||||||||||||||||||||||
| Other income (expense), net | 6.4 | 7.3 | (0.9) | 9.8 | (2.8) | 12.6 | |||||||||||||||||||||||||||||
Income before income taxes | $ | 52.4 | $ | 71.6 | $ | (19.2) | $ | 63.9 | $ | 92.4 | $ | (28.5) | |||||||||||||||||||||||
(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 $192.7 million year-over-year to $647.1 million, across all three segments.
•The Company made a $50 million discretionary payment against the outstanding principal of its term loan debt at the end of May.
•Available liquidity, which is comprised of cash on hand plus availability under the Company’s credit facilities, increased $136 million compared to June 30, 2023.
4
BUSINESS OUTLOOK
| 2024 FULL YEAR OUTLOOK | |||||||||||
| (in millions, except where noted otherwise and for percentages and per share data) | |||||||||||
2024 Current Estimate(1) | 2024 Previous Estimate | 2023 As Reported(1) | |||||||||
| Consolidated Net Revenues | $4,200 - $4,260 | $4,435 - $4,475 | $4,285 | ||||||||
| Topgolf Revenue | Approx. $1,790 | Approx. $1,960 | $1,761 | ||||||||
| Topgolf Same Venue Sales Growth | Down very high single digits to low double digits | Slightly positive to down low single digits | 1% | ||||||||
Consolidated Adjusted EBITDA(2) | $570 - $590 | $620 - $640 | $597 | ||||||||
Topgolf Adjusted EBITDA(2) | Approx. $310 | Approx. $350 | $304 | ||||||||
Non-GAAP Diluted Earnings per Share(2) | $0.11 - $0.21 | $0.31 - $0.39 | $0.45 | ||||||||
| Diluted Shares Outstanding | Approx. 185 | Approx. 200 | 201 | ||||||||
(1) 2024 includes an estimated $35 million unfavorable year-over-year foreign currency translation impact on 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. | |||||||||||
2024 THIRD QUARTER OUTLOOK | |||||||||||
| (in millions) | |||||||||||
Q3 2024 Estimate(1) | Q3 2023 As Reported(1) | ||||||||||
| Consolidated Net Revenues | $970 - $990 | $1,041 | |||||||||
| Consolidated Adjusted EBITDA | $95 - $105 | $163 | |||||||||
(1) 2024 estimates include approximately $10 million of unfavorable foreign currency impact on 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, August 7, 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.
5
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 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, 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, 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.
6
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’) third 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 and diluted shares outstanding), 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; costs, expenses or difficulties related to the merger with Topgolf, including the integration of the Topgolf business; failure to realize the expected benefits and synergies of the Topgolf merger in the expected timeframes 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
7
TOPGOLF CALLAWAY BRANDS CORP.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions)
(Unaudited)
| June 30, 2024 | December 31, 2023 | ||||||||||
| ASSETS | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | 311.8 | $ | 393.5 | |||||||
| Restricted cash | 0.7 | 0.8 | |||||||||
| Accounts receivable, net | 390.4 | 200.5 | |||||||||
| Inventories | 647.1 | 794.4 | |||||||||
| Other current assets | 263.1 | 238.9 | |||||||||
| Total current assets | 1,613.1 | 1,628.1 | |||||||||
| Property, plant and equipment, net | 2,185.0 | 2,156.5 | |||||||||
| Operating lease right-of-use assets, net | 1,380.1 | 1,410.1 | |||||||||
| Goodwill and intangible assets, net | 3,490.1 | 3,494.2 | |||||||||
| Other assets, net | 432.1 | 431.7 | |||||||||
| Total assets | $ | 9,100.4 | $ | 9,120.6 | |||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||||||
| Current liabilities: | |||||||||||
| Accounts payable and accrued expenses | $ | 437.8 | $ | 480.5 | |||||||
| Accrued employee compensation and benefits | 114.7 | 113.1 | |||||||||
| Asset-based credit facilities | 45.1 | 54.7 | |||||||||
| Operating lease liabilities, short-term | 87.3 | 86.4 | |||||||||
| Construction advances | 15.6 | 59.3 | |||||||||
| Deferred revenue | 97.4 | 110.9 | |||||||||
| Other current liabilities | 39.3 | 42.7 | |||||||||
| Total current liabilities | 837.2 | 947.6 | |||||||||
| Long-term debt, net | 1,464.5 | 1,518.2 | |||||||||
Operating lease liabilities, long-term | 1,414.4 | 1,433.4 | |||||||||
Deemed landlord financing obligations | 1,095.7 | 980.0 | |||||||||
| Deferred taxes, net | 31.3 | 36.7 | |||||||||
| Other long-term liabilities | 323.8 | 326.5 | |||||||||
| Total shareholders’ equity | 3,933.5 | 3,878.2 | |||||||||
| Total liabilities and shareholders’ equity | $ | 9,100.4 | $ | 9,120.6 | |||||||
8
TOPGOLF CALLAWAY BRANDS CORP.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except per share data)
(Unaudited)
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
| Net revenues: | |||||||||||||||||||||||
| Products | $ | 668.5 | $ | 713.5 | $ | 1,394.6 | $ | 1,481.1 | |||||||||||||||
| Services | 489.3 | 466.2 | 907.4 | 866.0 | |||||||||||||||||||
| Total net revenues | 1,157.8 | 1,179.7 | 2,302.0 | 2,347.1 | |||||||||||||||||||
| Costs and expenses: | |||||||||||||||||||||||
| Cost of products | 375.4 | 387.9 | 788.3 | 829.9 | |||||||||||||||||||
| Cost of services, excluding depreciation and amortization | 50.7 | 51.4 | 92.3 | 95.8 | |||||||||||||||||||
| Other venue expense | 339.4 | 317.1 | 662.8 | 622.6 | |||||||||||||||||||
| Selling, general and administrative expense | 259.5 | 279.6 | 532.5 | 548.1 | |||||||||||||||||||
| Research and development expense | 27.0 | 22.0 | 50.2 | 44.8 | |||||||||||||||||||
| Venue pre-opening costs | 2.8 | 5.7 | 6.0 | 9.4 | |||||||||||||||||||
| Total costs and expenses | 1,054.8 | 1,063.7 | 2,132.1 | 2,150.6 | |||||||||||||||||||
| Income from operations | 103.0 | 116.0 | 169.9 | 196.5 | |||||||||||||||||||
| Interest expense, net | (57.0) | (51.7) | (115.8) | (101.3) | |||||||||||||||||||
Other income (expense), net | 6.4 | 7.3 | 9.8 | (2.8) | |||||||||||||||||||
| Income before taxes | 52.4 | 71.6 | 63.9 | 92.4 | |||||||||||||||||||
Income tax benefit | (9.7) | (45.8) | (4.7) | (50.0) | |||||||||||||||||||
| Net income | $ | 62.1 | $ | 117.4 | $ | 68.6 | $ | 142.4 | |||||||||||||||
| Earnings per common share: | |||||||||||||||||||||||
| Basic | $ | 0.34 | $ | 0.63 | $ | 0.37 | $ | 0.77 | |||||||||||||||
| Diluted | $ | 0.32 | $ | 0.59 | $ | 0.36 | $ | 0.72 | |||||||||||||||
| Weighted-average common shares outstanding: | |||||||||||||||||||||||
| Basic | 183.5 | 185.2 | 183.6 | 185.2 | |||||||||||||||||||
| Diluted | 199.6 | 201.3 | 199.4 | 201.4 | |||||||||||||||||||
9
TOPGOLF CALLAWAY BRANDS CORP.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
(In millions)
(Unaudited)
| Six Months Ended June 30, | |||||||||||
| 2024 | 2023 | ||||||||||
| Cash flows from operating activities: | |||||||||||
| Net income | $ | 68.6 | $ | 142.4 | |||||||
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | |||||||||||
| Depreciation and amortization | 131.2 | 114.7 | |||||||||
| Non-cash interest on financing and deemed landlord financed leases | 18.4 | 13.6 | |||||||||
Loss on disposal of long-lived assets and other | 4.9 | — | |||||||||
| Amortization of debt discount and issuance costs | 2.9 | 3.4 | |||||||||
| Impairment loss | 6.3 | — | |||||||||
| Deferred taxes, net | (4.9) | (47.2) | |||||||||
Share-based compensation | 20.1 | 24.8 | |||||||||
Unrealized net losses on hedging instruments and foreign currency | 2.2 | 3.5 | |||||||||
| Loss on debt modification | 4.7 | 10.5 | |||||||||
| Other | 1.2 | 1.1 | |||||||||
Changes in assets and liabilities, net of impacts from business combinations | (104.2) | (288.6) | |||||||||
Net cash provided by (used in) operating activities | 151.4 | (21.8) | |||||||||
| Cash flows from investing activities, net of impacts of business combinations: | |||||||||||
| Capital expenditures | (149.3) | (262.6) | |||||||||
| Asset acquisitions, net of cash acquired | — | (18.7) | |||||||||
Business combinations, net of cash acquired | (23.3) | — | |||||||||
| Proceeds from government grants | — | 3.0 | |||||||||
| Investment in golf-related ventures | (0.3) | (2.1) | |||||||||
| Acquisition of intangible assets | (1.3) | (0.7) | |||||||||
| Proceeds from sale of property and equipment | 0.2 | 0.4 | |||||||||
| Net cash used in investing activities | (174.0) | (280.7) | |||||||||
| Cash flows from financing activities: | |||||||||||
Repayments of long-term debt and DLF obligations | (68.1) | (782.0) | |||||||||
| Proceeds from borrowings on long-term debt | — | 1,224.8 | |||||||||
Repayments of credit facilities, net | (5.4) | (229.8) | |||||||||
| Debt issuance costs | (0.2) | (1.3) | |||||||||
| Repayments of financing leases | (1.9) | (1.7) | |||||||||
| Proceeds from lease financing | 54.6 | 111.3 | |||||||||
| Exercise of stock options | — | 3.7 | |||||||||
| Acquisition of treasury stock | (31.3) | (27.3) | |||||||||
Net cash (used in) provided by financing activities | (52.3) | 297.7 | |||||||||
| Effect of exchange rate changes on cash, cash equivalents and restricted cash | (6.8) | (2.1) | |||||||||
Net decrease in cash, cash equivalents and restricted cash | (81.7) | (6.9) | |||||||||
| Cash, cash equivalents and restricted cash at beginning of period | 398.8 | 203.4 | |||||||||
| Cash, cash equivalents and restricted cash at end of period | 317.1 | 196.5 | |||||||||
Less: restricted cash(1) | (5.3) | (4.7) | |||||||||
| Cash and cash equivalents at end of period | $ | 311.8 | $ | 191.8 | |||||||
(1) Includes $0.7 million and $0.5 million of short-term restricted cash and $4.6 million and $4.2 million of long-term restricted cash included in other assets for the periods ended June 30, 2024 and 2023, respectively. | |||||||||||
10
TOPGOLF CALLAWAY BRANDS CORP.
CONSOLIDATED NET REVENUES AND OPERATING SEGMENT INFORMATION
(In millions)
(Unaudited)
| Net Revenues by Category | |||||||||||||||||||||||||||||
| Three Months Ended June 30, | Growth/(Decline) | Constant Currency vs. 2023(1) | |||||||||||||||||||||||||||
| 2024 | 2023 | Dollars | Percent | Percent | |||||||||||||||||||||||||
| Net revenues: | |||||||||||||||||||||||||||||
| Venues | $ | 473.7 | $ | 453.2 | $ | 20.5 | 4.5% | 4.5% | |||||||||||||||||||||
| Topgolf other business lines | 20.7 | 17.6 | 3.1 | 17.6% | 17.6% | ||||||||||||||||||||||||
| Golf Clubs | 310.2 | 340.3 | (30.1) | (8.8%) | (7.0%) | ||||||||||||||||||||||||
| Golf Balls | 103.6 | 110.7 | (7.1) | (6.4%) | (5.8%) | ||||||||||||||||||||||||
| Apparel | 145.0 | 143.5 | 1.5 | 1.0% | 2.9% | ||||||||||||||||||||||||
| Gear, Accessories & Other | 104.6 | 114.4 | (9.8) | (8.6%) | (7.4%) | ||||||||||||||||||||||||
| Total net revenues | $ | 1,157.8 | $ | 1,179.7 | $ | (21.9) | (1.9%) | (0.9%) | |||||||||||||||||||||
(1) See “Additional Information and Disclosures—Non-GAAP Information” for the calculation methodology of constant currency measures. | |||||||||||||||||||||||||||||
| Net Revenues by Region | |||||||||||||||||||||||||||||
| Three Months Ended June 30, | Growth/(Decline) | Constant Currency vs. 2023(1) | |||||||||||||||||||||||||||
| 2024 | 2023 | Dollars | Percent | Percent | |||||||||||||||||||||||||
| Net revenues: | |||||||||||||||||||||||||||||
| United States | $ | 891.3 | $ | 886.7 | $ | 4.6 | 0.5% | 0.5% | |||||||||||||||||||||
| Europe | 114.1 | 120.2 | (6.1) | (5.1%) | (4.7%) | ||||||||||||||||||||||||
| Asia | 109.1 | 128.2 | (19.1) | (14.9%) | (7.3%) | ||||||||||||||||||||||||
| Rest of world | 43.3 | 44.6 | (1.3) | (2.9%) | (1.3%) | ||||||||||||||||||||||||
| Total net revenues | $ | 1,157.8 | $ | 1,179.7 | $ | (21.9) | (1.9%) | (0.9%) | |||||||||||||||||||||
(1) See “Additional Information and Disclosures—Non-GAAP Information” for the calculation methodology of constant currency measures. | |||||||||||||||||||||||||||||
| Operating Segment Information | |||||||||||||||||||||||||||||
| Three Months Ended June 30, | Growth/(Decline) | Constant Currency vs. 2023(1) | |||||||||||||||||||||||||||
| 2024 | 2023 | Dollars | Percent | Percent | |||||||||||||||||||||||||
| Net revenues: | |||||||||||||||||||||||||||||
| Topgolf | $ | 494.4 | $ | 470.8 | $ | 23.6 | 5.0% | 5.0% | |||||||||||||||||||||
| Golf Equipment | 413.8 | 451.0 | (37.2) | (8.2%) | (6.7%) | ||||||||||||||||||||||||
| Active Lifestyle | 249.6 | 257.9 | (8.3) | (3.2%) | (1.7%) | ||||||||||||||||||||||||
| Total net revenues | $ | 1,157.8 | $ | 1,179.7 | $ | (21.9) | (1.9%) | (0.9%) | |||||||||||||||||||||
| Segment operating income: | |||||||||||||||||||||||||||||
| Topgolf | $ | 56.1 | $ | 44.0 | $ | 12.1 | 27.5% | ||||||||||||||||||||||
| Golf Equipment | 77.4 | 96.4 | (19.0) | (19.7%) | |||||||||||||||||||||||||
| Active Lifestyle | 14.7 | 19.5 | (4.8) | (24.6%) | |||||||||||||||||||||||||
| Total segment operating income | 148.2 | 159.9 | (11.7) | (7.3%) | |||||||||||||||||||||||||
Corporate G&A and other(2) | (45.2) | (43.9) | (1.3) | 3.0% | |||||||||||||||||||||||||
Total operating income | 103.0 | 116.0 | (13.0) | (11.2%) | |||||||||||||||||||||||||
| Interest expense, net | (57.0) | (51.7) | (5.3) | 10.3% | |||||||||||||||||||||||||
Other income, net | 6.4 | 7.3 | (0.9) | (12.3%) | |||||||||||||||||||||||||
Total income before income taxes | $ | 52.4 | $ | 71.6 | $ | (19.2) | (26.8%) | ||||||||||||||||||||||
(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. | |||||||||||||||||||||||||||||
11
TOPGOLF CALLAWAY BRANDS CORP.
CONSOLIDATED NET REVENUES AND OPERATING SEGMENT INFORMATION
(In millions)
(Unaudited)
| Net Revenues by Category | |||||||||||||||||||||||||||||
| Six Months Ended June 30, | Growth/(Decline) | Constant Currency vs. 2023(1) | |||||||||||||||||||||||||||
| 2024 | 2023 | Dollars | Percent | Percent | |||||||||||||||||||||||||
| Net revenues: | |||||||||||||||||||||||||||||
| Venues | $ | 879.4 | $ | 839.9 | $ | 39.5 | 4.7% | 4.6% | |||||||||||||||||||||
| Topgolf other business lines | 37.8 | 34.4 | 3.4 | 9.9% | 9.6% | ||||||||||||||||||||||||
| Golf Clubs | 656.1 | 691.1 | (35.0) | (5.1%) | (3.4%) | ||||||||||||||||||||||||
| Golf Balls | 207.6 | 203.6 | 4.0 | 2.0% | 2.5% | ||||||||||||||||||||||||
| Apparel | 304.6 | 319.6 | (15.0) | (4.7%) | (3.2%) | ||||||||||||||||||||||||
| Gear, Accessories & Other | 216.5 | 258.5 | (42.0) | (16.2%) | (15.6%) | ||||||||||||||||||||||||
| Total net revenues | $ | 2,302.0 | $ | 2,347.1 | $ | (45.1) | (1.9%) | (1.1%) | |||||||||||||||||||||
(1) Calculated by applying 2023 exchange rates to 2024 reported sales in regions outside the U.S. | |||||||||||||||||||||||||||||
| Net Revenues by Region | |||||||||||||||||||||||||||||
| Six Months Ended June 30, | Growth/(Decline) | Constant Currency vs. 2023(1) | |||||||||||||||||||||||||||
| 2024 | 2023 | Dollars | Percent | Percent | |||||||||||||||||||||||||
| Net revenues: | |||||||||||||||||||||||||||||
| United States | $ | 1,720.3 | $ | 1,697.8 | $ | 22.5 | 1.3% | 1.3% | |||||||||||||||||||||
| Europe | 255.5 | 273.8 | (18.3) | (6.7%) | (7.8%) | ||||||||||||||||||||||||
| Asia | 236.7 | 288.4 | (51.7) | (17.9%) | (10.8%) | ||||||||||||||||||||||||
| Rest of world | 89.5 | 87.1 | 2.4 | 2.8% | 4.1% | ||||||||||||||||||||||||
| Total net revenues | $ | 2,302.0 | $ | 2,347.1 | $ | (45.1) | (1.9%) | (1.1%) | |||||||||||||||||||||
(1) Calculated by applying 2023 exchange rates to 2024 reported sales in regions outside the U.S. | |||||||||||||||||||||||||||||
| Operating Segment Information | |||||||||||||||||||||||||||||
| Six Months Ended June 30, | Growth/(Decline) | Constant Currency vs. 2023(1) | |||||||||||||||||||||||||||
| 2024 | 2023 | Dollars | Percent | Percent | |||||||||||||||||||||||||
| Net revenues: | |||||||||||||||||||||||||||||
| Topgolf | $ | 917.2 | $ | 874.3 | $ | 42.9 | 4.9% | 4.8% | |||||||||||||||||||||
| Golf Equipment | 863.7 | 894.7 | (31.0) | (3.5%) | (2.0%) | ||||||||||||||||||||||||
| Active Lifestyle | 521.1 | 578.1 | (57.0) | (9.9%) | (8.7%) | ||||||||||||||||||||||||
| Total net revenues | $ | 2,302.0 | $ | 2,347.1 | $ | (45.1) | (1.9%) | (1.1%) | |||||||||||||||||||||
| Segment operating income: | |||||||||||||||||||||||||||||
| Topgolf | $ | 59.0 | $ | 46.8 | $ | 12.2 | 26.1% | ||||||||||||||||||||||
| Golf Equipment | 159.5 | 178.0 | (18.5) | (10.4%) | |||||||||||||||||||||||||
| Active Lifestyle | 39.4 | 56.8 | (17.4) | (30.6%) | |||||||||||||||||||||||||
| Total segment operating income | 257.9 | 281.6 | (23.7) | (8.4%) | |||||||||||||||||||||||||
Corporate costs and expenses(2) | (88.0) | (85.1) | (2.9) | 3.4% | |||||||||||||||||||||||||
| Total operating income | 169.9 | 196.5 | (26.6) | (13.5%) | |||||||||||||||||||||||||
| Interest expense, net | (115.8) | (101.3) | (14.5) | 14.3% | |||||||||||||||||||||||||
Other income (expense), net | 9.8 | (2.8) | 12.6 | (450.0%) | |||||||||||||||||||||||||
| Total income before income taxes | $ | 63.9 | $ | 92.4 | $ | (28.5) | (30.8%) | ||||||||||||||||||||||
(1) Calculated by applying 2023 exchange rates to 2024 reported sales in regions outside the U.S. | |||||||||||||||||||||||||||||
(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. | |||||||||||||||||||||||||||||
12
TOPGOLF CALLAWAY BRANDS CORP.
SUPPLEMENTAL FINANCIAL INFORMATION AND NON-GAAP RECONCILIATION
(In millions, except per share data)
(Unaudited)
| Three Months Ended June 30, | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2024 | 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| GAAP | Non-Cash Amortization(1) | Non-Recurring Items(2) | Tax Valuation Allowance | Non- GAAP | GAAP | Non-Cash Amortization(1) | Non-Recurring Items(3) | Tax Valuation Allowance(4) | Non- GAAP | ||||||||||||||||||||||||||||||||||||||||||||||||||
Income from operations | $ | 103.0 | $ | (2.9) | $ | (15.9) | $ | — | $ | 121.8 | $ | 116.0 | $ | (4.1) | $ | (7.6) | $ | — | $ | 127.7 | |||||||||||||||||||||||||||||||||||||||
Net income | $ | 62.1 | $ | (2.2) | $ | (18.8) | $ | — | $ | 83.1 | $ | 117.4 | $ | (3.1) | $ | (5.9) | $ | 50.8 | $ | 75.6 | |||||||||||||||||||||||||||||||||||||||
Earnings per share - diluted (5) | $ | 0.32 | $ | (0.01) | $ | (0.09) | $ | — | $ | 0.42 | $ | 0.59 | $ | (0.01) | $ | (0.03) | $ | 0.25 | $ | 0.38 | |||||||||||||||||||||||||||||||||||||||
(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 acquired assets that contribute to the revenue generation for 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 June 30, 2024 and 2023, non-cash depreciation and amortization related to these purchase accounting adjustments was $1.4 million and $2.9 million, respectively. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(2) Primarily includes $11.7 million of restructuring and reorganization charges, $3.4 million in currency translation adjustments reclassified into earnings due to the dissolution of the Jack Wolfskin Russia entity, $3.4 million of charges related to the impairment and abandonment of the Shankstars media game in the Topgolf segment, and $1.1 million in IT integration charges including costs associated with the implementation of a new cloud based HRM system. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(3) Primarily includes $3.1 million in restructuring and reorganization charges in our Active Lifestyle operating segment and $2.2 million in IT integration and implementation costs stemming from acquisitions. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(4) Release of tax valuation allowances recorded in connection with the merger with Topgolf. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(5) Diluted earnings per share calculated using the if-converted method, which excludes periodic interest expense related to the 2020 convertible notes from the calculation of net income for the purpose of calculating diluted earnings per share. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Six months ended June 30, | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2024 | 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| GAAP | Non-Cash Amortization(1) | Non-Recurring Items(2) | Tax Valuation Allowance(3) | Non- GAAP | GAAP | Non-Cash Amortization(1) | Non-Recurring Items(4) | Tax Valuation Allowance(3) | Non- GAAP | ||||||||||||||||||||||||||||||||||||||||||||||||||
Income from operations | $ | 169.9 | $ | (5.8) | $ | (18.7) | $ | — | $ | 194.4 | $ | 196.5 | $ | (8.4) | $ | (10.8) | $ | — | $ | 215.7 | |||||||||||||||||||||||||||||||||||||||
Net income | $ | 68.6 | $ | (4.4) | $ | (24.5) | $ | — | $ | 97.5 | $ | 142.4 | $ | (6.4) | $ | (16.3) | $ | 59.1 | $ | 106.0 | |||||||||||||||||||||||||||||||||||||||
Earnings per share - diluted (5) | $ | 0.36 | $ | (0.02) | $ | (0.12) | $ | — | $ | 0.51 | $ | 0.72 | $ | (0.03) | $ | (0.08) | $ | 0.29 | $ | 0.54 | |||||||||||||||||||||||||||||||||||||||
(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 six months ended June 30, 2024 and 2023, non-cash depreciation and amortization related to these purchase accounting adjustments was $3.2 million and $6.7 million, respectively. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(2) Primarily includes $11.8 million of restructuring and reorganization charges, $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 charges related to the impairment and abandonment of the Shankstars media game in the Topgolf segment, $1.2 million in IT costs related to a 2023 cybersecurity incident, and $1.8 million in IT integration charges including costs associated with the implementation of a new cloud based HRM system. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(3) Related to the release of tax valuation allowances recorded in connection with the merger with Topgolf. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(4) Primarily includes $13.1 million in total charges related to our 2023 debt modification, $3.4 million in IT integration and implementation related costs stemming from the acquisitions of Jack Wolfskin, TravisMathew and Topgolf, and $3.1 million in restructuring and reorganization charges in our Active Lifestyle operating segment. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(5) Diluted earnings per share calculated using the if-converted method, which excludes periodic interest expense related to the 2020 convertible notes from the calculation of net income for the purpose of calculating diluted earnings per share. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
13
2024 Trailing Twelve Month Adjusted EBITDA | 2023 Trailing Twelve Month Adjusted EBITDA | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Quarter Ended | Quarter Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| September 30, | December 31, | March 31, | June 30, | September 30, | December 31, | March 31, | June 30, | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2023 | 2023 | 2024 | 2024 | Total | 2022 | 2022 | 2023 | 2023 | Total | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Net income (loss) | $ | 29.7 | $ | (77.1) | $ | 6.5 | $ | 62.1 | $ | 21.2 | $ | 38.5 | $ | (72.7) | $ | 25.0 | $ | 117.4 | $ | 108.2 | |||||||||||||||||||||||||||||||||||||||
| Interest expense, net | 52.3 | 56.6 | 58.8 | 57.0 | 224.7 | 36.4 | 42.5 | 49.6 | 51.7 | 180.2 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Income tax (benefit) provision | (3.0) | (7.2) | 5.0 | (9.7) | (14.9) | 0.3 | (3.5) | (4.2) | (45.8) | (53.2) | |||||||||||||||||||||||||||||||||||||||||||||||||
| Non-cash depreciation and amortization expense | 61.0 | 64.0 | 65.4 | 65.8 | 256.2 | 48.4 | 53.0 | 56.1 | 58.6 | 216.1 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Non-cash stock compensation and stock warrant expense, net | 13.2 | 8.4 | 14.2 | 7.0 | 42.8 | 10.3 | 9.7 | 12.5 | 12.3 | 44.8 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Non-cash lease amortization expense | 4.5 | 4.4 | 3.5 | 3.6 | 16.0 | 4.4 | 4.5 | 4.6 | 4.4 | 17.9 | |||||||||||||||||||||||||||||||||||||||||||||||||
Non-recurring items, before taxes(1) | 5.6 | 20.7 | 7.5 | 19.8 | 53.6 | 6.1 | 3.1 | 13.7 | 7.6 | 30.5 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Adjusted EBITDA | $ | 163.3 | $ | 69.8 | $ | 160.9 | $ | 205.6 | $ | 599.6 | $ | 144.4 | $ | 36.6 | $ | 157.3 | $ | 206.2 | $ | 544.5 | |||||||||||||||||||||||||||||||||||||||
(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, 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 non-cash asset write-downs associated with the Jack Wolfskin retail operations in Russia and the closure of a pre-merger Topgolf concept location, both due to business decisions to exit those businesses, 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 | Six Months Ended June 30, | ||||||||||
| 2024 | 2023 | ||||||||||
GAAP cash flows provided by (used in) operations (1) | $ | 151.4 | $ | (21.8) | |||||||
Less: capital expenditures (1) | (149.3) | (262.6) | |||||||||
Add: proceeds from lease financing(1) | 54.6 | 111.3 | |||||||||
| Consolidated Non-GAAP Adjusted Free Cash Flow | $ | 56.7 | $ | (173.1) | |||||||
(1) Source: Condensed consolidated statement of cash flows within the Company’s quarterly report on Form 10-Q. | |||||||||||
14
| Reconciliation of Topgolf Adjusted Segment EBITDA | Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
Topgolf Segment operating income(1): | $ | 56.1 | $ | 44.0 | $ | 59.0 | $ | 46.8 | |||||||||||||||
| Non-GAAP depreciation and amortization expense | 49.1 | 39.6 | 97.6 | 76.3 | |||||||||||||||||||
| Non-Cash stock compensation expense | 1.2 | 4.2 | 6.4 | 8.3 | |||||||||||||||||||
| Non-cash lease amortization expense | 3.1 | 4.3 | 6.3 | 8.8 | |||||||||||||||||||
| Topgolf Adjusted Segment EBITDA | $ | 109.5 | $ | 92.1 | $ | 169.3 | $ | 140.2 | |||||||||||||||
(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. | |||||
15