Callaway Golf Company · NYSE:CALY
Callaway Golf — Topgolf Callaway Brands — Q2 2024 Earnings Presentation
26 slides from Callaway Golf's earnings presentation, Aug 7, 2024
Slide 1: Second Quarter 2024 Earnings Conference Call
Second Quarter 2024 Earnings Conference Call August 7, 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: Q2 2024 Highlights
Q2 Net Income of $62 million, Non-GAAP Net Income of $83 million, and Adjusted EBITDA of $206 million were all ahead of expectations. Q2 Consolidated Revenues were down 1.9% year-over-year and full year Revenue and Adjusted EBITDA outlook lowered to a range of Q2 2024 $4,200 - $4,260 million and $57
Slide 4: Q2 Segment Highlights
Q2 SEGMENT HIGHLIGHTS Toptracer partnered with TOPGOLF Adjusted EBITDA PIE now in U.S. all golfvenues the R&A for The Open consumerexceptU.S. rounds played in 2023 Signed multiyear margins increased and +4% AIG year-over-year Women’s Open strategic agreement remains strong Las Vegas and 260bps YoY 1
Slide 5: Recent Brand Highlights
RECENT BRAND HIGHLIGHTS TOPGOLF GOLF EQUIPMENT ACTIVE LIFESTYLE TRAVISMATHEW’S WOMEN’S LAUNCHED “THE SURE THING” XANDER SCHAUFFELE WON THE XXXXXX COLLECTION APPROACHING 10% GOLF CLUB OPEN AND PGA CHAMPIONSHIPS OF TRAVISMATHEW REVENUES 5
Slide 6: Q2 2024 Financial Results
Q2 2024 FINANCIAL RESULTS Q2 2024 GAAP RESULTS Q2 2024 NON-GAAP RESULTS1 ($ in millions, except per share data) ($ in millions, except per share data) Q2 2024 Q2 2023 Change (%) Q2 2024 Q2 2023 Change (%) Net Revenues $1,157.8 $1,179.7 (1.9)% Net Income $83.1 $75.6 9.9% Net Income $62.1 $117.4 (47.1
Slide 7: Same Venue Sales
SAME VENUE SALES1 Q1 Q2 Total 1-2 Bay (Walk-In, ’24 vs ’23 -7% -8% Reservations & Events)2 ’23 vs ’22 11% 1% Total Stacked 4% -7% ’24 vs ’19 6% 0% Q2 decline driven by lower traffic, partially offset by 1-2 Bay higher spend per visit ’24 vs ’23 -5% -8% ’23 vs ’22 9% 7% Total Stacked 5% -1% 3+ Bay Ev
Slide 8: 2023 Same Venue Sales
2023 SAME VENUE SALES1 Q1 Q2 Q3 Q4 FY23 Total ’23 vs ’22 11% 1% -3% -3% 1% 1-2 Bay2 ’23 vs ’22 9% 7% 0% 0% 4% 3+ Bay3 ’23 vs ’22 23% -18% -17% -12% -10% Note: Numbers may not foot due to rounding. 1. Same venue sales (SVS) represents sales for the comparable venue base, which is defined as the numbe
Slide 9: 2024 Total Company Outlook
2024 TOTAL COMPANY OUTLOOK FULL YEAR 20241 Q3 20241 Current FY 2024 Previous FY 2024 FY 2023 Q3 2024 Q3 2023 ($ in millions, except per share data) Guidance Guidance Results ($ in millions) Guidance Results Consolidated Net Revenue $4,200 - $4,260 $4,435 - $4,475 $4,285 Net Revenue $970 - $990 $1,04
Slide 10: Full Year Key Metrics & Outlook
FULL YEAR KEY METRICS & OUTLOOK ($ in millions, except for EPS)1 Topgolf Non-Topgolf5 Total Prev. Guide Adjusted EBITDA $310 $270 ~$5804 ~$6304 Non-GAAP Depreciation & Amortization ~$260 ~$260 Non-GAAP Topgolf D&A $200 ~$200 ~$205 Non-GAAP Non-Topgolf D&A $60 ~$60 ~$55 Non-GAAP Interest Expense2 ~$2
Slide 11: Q2 Key Metrics
Q2 KEY METRICS ($ in millions)1 Topgolf Non-Topgolf Total Non-GAAP Operating Income $56 $66 $122 Non-GAAP Depreciation and Amortization $49 $14 $63 Non-Cash Lease Amortization Expense2 $4 $0 $4 Non-Cash Stock Comp Expense $1 $6 $7 Other Income $0 $10 $10 Adjusted Segment EBITDA $110 $96 $206 Less: V
Slide 12: Continue to Drive Significant Cash Flow Generation
CONTINUE TO DRIVE SIGNIFICANT CASH FLOW GENERATION 2024 2024 Previous 2023 2024 Total ($ in millions)1 Topgolf Non-Topgolf 2024 Results Outlook Outlook Outlook4 Outlook Adjusted EBITDA $597 $310 $270 $580 $630 Less: Venue Financing Cash Interest2 $72 $100 $100 $100 Adj. EBITDA less Venue Financing C
Slide 13: Key Balance Sheet and Liquidity Metrics
KEY BALANCE SHEET AND LIQUIDITY METRICS Six Months Six Months Metric1 As of June 30, As of June 30, Metric1 Ended June 30, Ended June 30, ($ in millions) 2024 2023 ($ in millions) 2024 2023 Cash and Cash Equivalents $312 $192 Gross Capital Expenditures2 $149 $263 Inventory $647 $840 Net Capital Expe
Slide 14: Appendix
APPENDIX
Slide 15: Venue Performance Proven Over Time
Venue Performance Proven Over Time ($ 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 0.2 0.7 0.7 1.1 1.7 2.3 2.3 2.7 2.8 3.1 12.5% 2007 2008 2009 2010 2011 2012 2013 2014 201
Slide 16: 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 17: Net Debt Leverage, Adjusted for REIT Financing
NET DEBT LEVERAGE, ADJUSTED FOR REIT FINANCING ($ in millions) June 30, 2024 June 30, 2023 Total Principal – Long term debt & ABL credit facilities $1,550.6 $1,674.0 Notes on DLF obligations Topgolf Venue Financing Liabilities $285.0 $247.3 • Similar to rent, but treated Deemed Landlord Financing Ob
Slide 18: Definitions of Certain Financial Measures
DEFINITIONS OF CERTAIN FINANCIAL MEASURES Adjusted EBITDA Less Venue Financing Cash Interest - a Non-GAAP measure calculated as Adjusted EBITDA less Venue Financing Cash Interest obligations. Adjusted Free Cash Flow - a non-GAAP measure calculated as cash from operations, less capital expenditures n
Slide 19: Segment Operating Income
SEGMENT OPERATING INCOME Supplemental Financial Information ($ in millions, except percentages) (Unaudited) Three Months Ended June 30, Twelve Months Ended December 31, 2024 2023 Change 2023 2022 Change Topgolf $ 56.1 $ 44.0 27.5 % $ 108.8 $ 76.8 41.7 % % of segment revenue 11.3 % 9.3 % 200 bps 6.2
Slide 20: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION Supplemental Financial Information ($ in millions, except percentages) (Unaudited) Three Months Ended June 30, 2024 2023 Non-Cash Non-Cash Acquisition Non- Tax Acquisition Non- Tax related Recurring Valuation Non- related Recurring Valuation Non- GAAP amortization(1) Items(2)
Slide 21: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION Supplemental Financial Information ($ in millions, except percentages) (Unaudited) Six Months Ended June 30, 2024 2023 Non-Cash Acquisition Non- Non-Cash Non- related Recurring Tax Valuation Non- Acquisition related Recurring Tax Valuation Non- GAAP amortization(1) Items(2) A
Slide 22: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION Supplemental Financial Information ($ in millions, except percentages) (Unaudited) Twelve Months Ended December 31, 2023 Non-Cash acquisition Tax Valuation Non- GAAP related Amortization(1) Non-Recurring Items(2) Allowance(3) GAAP Income from operations $ 237.7 $ (14.0) $ (37
Slide 23: 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 September 30, December 31, March 31, June 30, September 30, December 31,
Slide 24: Topgolf Adjusted EBITDA Reconciliation
TOPGOLF ADJUSTED EBITDA RECONCILIATION Supplemental Financial Information ($ in millions, except percentages) (Unaudited) Three Months Ended June 30, Six Months Ended June 30, Twelve Months Ended December 31, 2024 2023 2024 2023 2023 2022 Topgolf Segment operating income(1): $ 56.1 $ 44.0 $ 59.0 $ 4
Slide 25: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION Supplemental Financial Information ($ in millions, except percentages) (Unaudited) Twelve Months Ended Reconciliation of Consolidated Non-GAAP Adjusted Free Cash Flow December 31, 2023 GAAP cash flows provided by (used in) operations (1) $ 364.7 Less: capital expenditures (1)
Slide 26: Thank You
THANK YOU 26
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