Callaway Golf Company · NYSE:CALY
Callaway Golf — Topgolf Callaway Brands — Q1 2024 Earnings Presentation
23 slides from Callaway Golf's earnings presentation, May 8, 2024
Slide 1: First Quarter 2024 Earnings Conference Call
First Quarter 2024 Earnings Conference Call May 8, 2024
Slide 2: Important Notices
IMPORTANT NOTICES Forward-looking Statements. During the presentation, any comments made about future plans, events, financial results, performance, prospects, or growth opportunities, including statements relating to the Company’s financial outlook (including, among others, revenues, same venue sal
Slide 3: Q1 2024 Highlights
Q1 Revenue of $1.144 billion and Topgolf same venue sales of -7% – both in line with expectations. Non-GAAP Net Income of $16 million and Adjusted EBITDA of $161 million – both ahead of expectations. Q1 2024 Company reaffirmed full year Adjusted EBITDA guidance and Highlights increased full year ear
Slide 4: Q1 Segment Highlights
Q1 SEGMENT HIGHLIGHTS TOPGOLF Venue-level Adjusted New Block Party Acquired Bryan, TX PIE now in all U.S. EBITDAR margins exceptU.S. golfvenues consumer gamerounds playedininall available 2023 remains strong and +4% year-over-year venues – first new BigShots Venue in Las Vegas increased ~180bps Janu
Slide 5: Recent Brand Highlights
RECENT BRAND HIGHLIGHTS TOPGOLF GOLF EQUIPMENT ACTIVE LIFESTYLE AKSHAY BHATIA WON THE VALERO L.A. LAKER AUSTIN REAVES IS LAUNCHED BLOCKPARTY, OUR TEXAS XXXXXX OPEN WITH CALLAWAY’S XXXXXX TRAVISMATHEW NEWEST FIRST NEW GAME SINCE 2020 CHROME TOUR BALL AMBASSADOR
Slide 6: Q1 2024 Financial Results
Q1 2024 FINANCIAL RESULTS Q1 2024 GAAP RESULTS Q1 2024 NON-GAAP RESULTS1 ($ in millions, except per share data) ($ in millions, except per share data) Q1 2024 Q1 2023 Change (%) Q1 2024 Q1 2023 Change (%) Net Revenues $1,144.2 $1,167.4 (2)% Net Revenues $1,144.2 $1,167.4 (2)% Net Income $6.5 $25.0 (
Slide 7: Same Venue Sales
SAME VENUE SALES TOPGOLF 2-YEAR STACKED SVS1 Q1 Total 1-2 Bay (Walk-In, Reservations & Q1 Q2 Q3 Q4 FY23 ’23 vs ’22 11% Events)2 ’24 vs ’23 -7% Total Total Stacked 4% Q1 decline driven by extreme weather ’23 vs ’22 11% 1% -3% -3% 1% during the first half of January – trends 1-2 Bay ’23 vs ’22 9% have
Slide 8: 2024 Total Company Outlook
2024 TOTAL COMPANY OUTLOOK FULL YEAR 20241 Q2 20241 Current FY 2024 Previous FY 2024 FY 2023 Q2 2024 Q2 2023 ($ in millions, except per share data) Guidance Guidance Results ($ in millions) Guidance Results Net Revenue $4,435 - $4,475 $4,515 - $4,555 $4,285 Net Revenue $1,180 - $1,200 $1,180 Adjuste
Slide 9: Q1 Key Metrics
Q1 KEY METRICS ($ in millions)1 Topgolf Non-Topgolf Total Non-GAAP Operating Income $3 $71 $74 Non-GAAP Depreciation and Amortization $49 $12 $61 Non-Cash Lease Amortization Expense2 $3 $1 $4 Non-Cash Stock Comp Expense6 $5 $9 $14 Other Income (Expense) $0 $8 $8 Adjusted Segment EBITDA $60 $101 $161
Slide 10: Full Year Key Metrics & Outlook
FULL YEAR KEY METRICS & OUTLOOK ($ in millions, except for EPS)1 Topgolf Non-Topgolf5 Total Prev. Total Adjusted EBITDA ~$350 ~$280 ~$6304 $6304 Non-GAAP Depreciation & Amortization ~$260 ~$265 Non-GAAP Topgolf D&A ~$205 ~$205 ~$210 Non-GAAP Non-Topgolf D&A ~$55 ~$55 ~$55 Non-GAAP Interest Expense2
Slide 11: Key Balance Sheet and Liquidity Metrics
KEY BALANCE SHEET AND LIQUIDITY METRICS Metric1 As of Mar 31, As of Mar 31, Metric1 As of Mar 31, As of Mar 31, ($ in millions) 2024 2023 ($ in millions) 2024 2023 Cash and Cash Equivalents $234 $181 Gross Capital Expenditures2 $65 $121 Inventory $703 $930 Net Capital Expenditures $38 $70 Non-GAAP D
Slide 12: Appendix
APPENDIX
Slide 13: Venue Performance Proven Over Time
Venue Performance Proven Over Time ($ in millions) Average EBITDAR Average Revenue Average EBITDAR2 $ $ CAGR3 7.5 8.3 7.9 8.5 9.0 9.4 10.4 10.9 UK venues1 3.6 4.4 5.4 6.2 4.1 3.7 4.1 2.6 2.8 2.9 2.9 0.6 0.4 0.4 0.7 0.7 1.1 1.7 2.3 2.3 2.7 2.8 3.1 12.5% 0.2 2007 2008 2009 2010 2011 2012 2013 2014 201
Slide 14: Venue Performance Proven Over Time
Venue Performance Proven Over Time ($ in millions) Average EBITDAR Average Revenue Average EBITDAR2 $ $ CAGR3 22.4 23.4 19.4 19.6 19.3 2016 vintage1 5.7 5.5 6.7 7.5 8.5 8.1% US venues 2018 2019 2021 2022 2023 2018 2019 2021 2022 2023 19.1 16.8 18.3 19.4 2017 vintage 5.6 5.8 5.9 6.8 5.0% US venues 20
Slide 15: Net Debt Leverage, Adjusted for REIT Financing
NET DEBT LEVERAGE, Adjusted FOR REIT FINANCING ($ in millions) Notes on DLF obligations March 31, 2024 March 31, 2023 • Similar to rent, but treated Net Debt (1) $2,425.6 $2,209.7 like debt due to GAAP rules Trailing twelve month Adjusted EBITDA (2) $600.2 $545.6 Total Net Debt Leverage Ratio $4.0X
Slide 16: Important Notices
IMPORTANT NOTICES Adjusted EBITDA Less Venue Financing Cash Interest is a non-GAAP measure calculated as Adjusted EBITDA, minus Venue Financing Cash Interest obligations. Adjusted Free Cash Flow is a non-GAAP measure calculated as cash from operations, less capital expenditures net of proceeds from
Slide 17: Definitions of Certain Financial Measures
DEFINITIONS OF CERTAIN FINANCIAL MEASURES Non-Growth Capital Expenditures are capital expenditures other than Growth Capital Expenditures and excludes proceeds from lease financing and proceeds from government grants. REIT Adjusted Net Debt is a non-GAAP measure calculated as Net Debt less DLF & Ven
Slide 18: Segment Operating Income
SEGMENT OPERATING INCOME Supplemental Financial Information ($ in millions, except percentages) (Unaudited) Three Months Ended March 31, Twelve Months Ended December 31, 2024 2023 Change 2023 2022 Change Topgolf $ 2.9 $ 2.8 3.6 % Topgolf $ 108.8 $ 76.8 41.7 % % of segment revenue 0.7 % 0.7 % — bps %
Slide 19: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION Supplemental Financial Information ($ in millions, except percentages) (Unaudited) Three Months Ended March 31, 2024 2023 Non-Cash Non- Non-Cash Non- Amortization and Recurring Tax Valuation Non- Amortization, Recurring Tax Valuation Non- GAAP Depreciation(1) Items(2) Allowan
Slide 20: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION Supplemental Financial Information ($ in millions, except percentages) (Unaudited) Twelve Months Ended December 31, 2023 Non-Cash Amortization and Non- GAAP Depreciation(1) Non-Recurring Items(2) Tax Valuation Allowance(3) GAAP Net revenues $ 4,284.8 $ — $ — $ — $ 4,284.8 Tot
Slide 21: Adjusted EBITDA Reconciliation
ADJUSTED EBITDA RECONCILIATION Supplemental Financial Information ($ in millions, except percentages) (Unaudited) 2024 Trailing Twelve Month Adjusted EBITDA 2023 Trailing Twelve Month Adjusted EBITDA Quarter Ended Quarter Ended June 30, September 30, December 31, March 31, June 30, September 30, Dec
Slide 22: Topgolf Adjusted EBITDA Reconciliation
TOPGOLF ADJUSTED EBITDA RECONCILIATION Supplemental Financial Information ($ in millions, except percentages) (Unaudited) Three Months Ended March 31, Twelve Months Ended December 31, 2024 2023 2023 2022 Topgolf Segment operating income(1): $ 2.9 $ 2.8 $ 108.8 $ 76.8 Non-GAAP Depreciation and amorti
Slide 23: Thank You
THANK YOU
Topgolf Callaway Brands — Q1 2024 Earnings Presentation on 6ix