Callaway Golf Company · NYSE:CALY
Callaway Golf — Topgolf Callaway Brands — Q3 2024 Earnings Presentation
27 slides from Callaway Golf's earnings presentation, Nov 12, 2024
Slide 1: Third Quarter 2024 Earnings Conference Call
Third Quarter 2024 Earnings Conference Call November 12, 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: Q3 2024 Highlights
Q3 Consolidated Revenues and Adjusted EBITDA were ahead of expectations. The Callaway brand maintained its #1 position in U.S. market share in total golf clubs and achieved record U.S. market share in golf ball.1 The Company further strengthened its available liquidity position to $863 Q3 2024 milli
Slide 4: Q3 Segment Highlights
Q3 SEGMENT HIGHLIGHTS Launched Topgolf TOPGOLF PIE nowNew Sonic the in all U.S. consumerexceptU.S.Shop golfvenues roundsproviding played ina 2023 2024 venue level margins are on track Hedgehog game will simple +4% way to year-over-year remains strong and Laslaunch Vegas to be up nearly 500 mid-Novem
Slide 5: Recent Brand Highlights
RECENT BRAND HIGHLIGHTS Topgolf GOLF EQUIPMENT ACTIVE LIFESTYLE Announced new Sonic the Hedgehog Successfully launched our TravisMathew expanded game to be released in mid-November new lineup of Apex Irons outerwear line 5
Slide 6: Q3 2024 Financial Results
Q3 2024 FINANCIAL RESULTS Q3 2024 GAAP RESULTS Q3 2024 NON-GAAP RESULTS1 ($ in millions, except per share data) ($ in millions, except per share data) Q3 2024 Q3 2023 Change (%) Q3 2024 Q3 2023 Change (%) Net Revenues $ 1,012.9 $ 1,040.6 (3)% Net Income $ 4.3 $ 35.8 (88)% Net (Loss) Income $ (3.6) $
Slide 7: Same Venue Sales
SAME VENUE SALES1 Q1 Q2 Q3 Total ’24 vs ’23 -7% -8% -11% ’23 vs ’22 11% 1% -3% Total Stacked 4% -7% -14% ’24 vs ’19 6% 0% -4% 1-2 Bay2 ’24 vs ’23 -5% -8% -9% ’23 vs ’22 9% 7% 0% Total Stacked 5% -1% -9% ’24 vs ’19 9% 2% -2% 3+ Bay3 ’24 vs ’23 -16% -9% -19% ’23 vs ’22 23% -18% -17% Total Stacked 7% -
Slide 8: 2024 Total Company Outlook
2024 TOTAL COMPANY OUTLOOK FULL YEAR 20241 Q4 20241 ($ in millions, except where noted Current FY 2024 Previous FY 2024 FY 2023 Q4 2024 Q4 2023 otherwise and per share data) Guidance Guidance Results ($ in millions) Guidance Results Consolidated Net Revenue Approx. $4.20B $4.20B - $4.26B $4.28B Net
Slide 9: Full Year Key Metrics & Outlook
FULL YEAR KEY METRICS & OUTLOOK ($ in millions, except for EPS)1 Topgolf Non-Topgolf5 Total Prev. Guide Adjusted EBITDA $315 $250 ~$5654 ~$5804 Non-GAAP Depreciation & Amortization ~$258 ~$260 Non-GAAP Topgolf D&A $200 ~$200 ~$200 Non-GAAP Non-Topgolf D&A $58 ~$58 ~$60 Non-GAAP Interest Expense2 ~$2
Slide 10: Q3 Key Metrics
Q3 KEY METRICS ($ in millions)1 Topgolf Non-Topgolf Total Non-GAAP Operating Income $28 $15 $43 Non-GAAP Depreciation and Amortization $51 $14 $65 Non-Cash Lease Amortization Expense2 $3 $0 $3 Non-Cash Stock Comp Expense $2 $6 $8 Other expense, net $0 $1 $1 Adjusted Segment EBITDA $84 $36 $120 Less:
Slide 11: Continue to Drive Significant Cash Flow Generation
CONTINUE TO DRIVE SIGNIFICANT CASH FLOW GENERATION 2024 Previous 2023 2024 Topgolf 2024 Total ($ in millions)1 Non-Topgolf 2024 Results Outlook Outlook Outlook4 Outlook Adjusted EBITDA $597 $315 $250 $565 $580 Less: Venue Financing Cash Interest2 $72 $100 $100 $100 Adj. EBITDA less Venue Financing C
Slide 12: Key Balance Sheet and Liquidity Metrics
KEY BALANCE SHEET AND LIQUIDITY METRICS Nine Months Nine Months Metric1 As of September As of September Metric1 Ended September Ended September ($ in millions) 30, 2024 30, 2023 ($ in millions) 30, 2024 30, 2023 Cash and Cash Equivalents $442 $330 Gross Capital Expenditures2 $227 $389 Inventory $666
Slide 13: Appendix
APPENDIX
Slide 14: Venue Cohort Performance Proven Over Time
Venue Cohort Performance Proven Over Time 1. For purposes of estimating Adjusted EBITDAR by venue, management has estimated the amounts of depreciation, amortization, tax, interest and certain other expenses allocable to each venue, as the Company does not record such expenses at that level of detai
Slide 15: Venue Cohort Performance Proven Over Time
Venue Cohort Performance Proven Over Time Average EBITDAR ($ in millions) Average Revenue Average EBITDAR2 $ $ CAGR3 UK venues1 12.5% Pre-2014 vintage US 3.4% Venues 2014 vintage 3.4% US venues 2015 vintage 5.5% US venues 1. Excludes Glasgow venue 2. For purposes of estimating Adjusted EBITDAR by ve
Slide 16: Venue Cohort Performance Proven Over Time
Venue Cohort Performance Proven Over Time Average EBITDAR ($ in millions) Average Revenue Average EBITDAR2 $ $ CAGR3 2016 vintage1 8.1% US venues 2017 vintage 5.0% US venues a 2018 vintage 4.3% US venues 2019 vintage 2.7% US venues 1. Excludes Vegas venue 2. For purposes of estimating Adjusted EBITD
Slide 17: Net Debt Leverage, Adjusted for REIT Financing
NET DEBT LEVERAGE, ADJUSTED FOR REIT FINANCING ($ in millions) September 30, 2024 September 30, 2023 Total Principal – Long term debt & ABL credit facilities $1,541.3 $1,650.1 Topgolf Venue Financing Liabilities $291.2 $247.0 Deemed Landlord Financing Obligations $1,148.3 $809.7 Equipment Financing
Slide 18: 2023 Same Venue Sales
2023 SAME VENUE SALES1 Q1 Q2 Q3 Q4 FY23 Total ’23 vs ’22 11% 1% -3% -3% 1% 1-2 Bay2 ’23 vs ’22 9% 7% 0% 0% 4% 3+ Bay3 ’23 vs ’22 23% -18% -17% -12% -10% Note: Numbers may not foot due to rounding. 1. Same venue sales (SVS) represents sales for the comparable venue base, which is defined as the numbe
Slide 19: Definitions of Certain Financial Measures
DEFINITIONS OF CERTAIN FINANCIAL MEASURES Adjusted EBITDA Less Venue Financing Cash Interest - a Non-GAAP measure calculated as Adjusted EBITDA less Venue Financing Cash Interest obligations. Adjusted Free Cash Flow - a non-GAAP measure calculated as cash from operations, less capital expenditures n
Slide 20: Segment Operating Income
SEGMENT OPERATING INCOME Supplemental Financial Information ($ in millions, except percentages) (Unaudited) Three Months Ended September 30, Twelve Months Ended December 31, 2024 2023 Change 2023 2022 Change Topgolf $ 28.3 $ 38.9 (27.2) % $ 108.8 $ 76.8 41.7 % % of segment revenue 6.2 % 8.7 % (250)
Slide 21: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION Supplemental Financial Information ($ in millions, except percentages) (Unaudited) Three Months Ended September 30, 2024 2023 Non-Cash Non-Cash Acquisition Non- Acquisition Non- Related Recurring Tax Valuation Non- Related Recurring Tax Valuation Non- GAAP Amortization(1) Ite
Slide 22: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION Supplemental Financial Information ($ in millions, except percentages) (Unaudited) Nine Months Ended September 30, 2024 2023 Non-Cash Non-Cash Acquisition Non- Tax Acquisition Non- Tax Related Recurring Valuation Non- Related Recurring Valuation Non- GAAP Amortization(1) Item
Slide 23: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION Supplemental Financial Information ($ in millions, except percentages) (Unaudited) Twelve Months Ended December 31, 2023 Non-Cash Acquisition Related Non-Recurring Tax Valuation Non- GAAP Amortization(1) Items(2) Allowance(3) GAAP Income from operations $ 237.7 $ (14.0) $ (37
Slide 24: 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 December December 31, March 31, June 30, September 30, 31, March 31, Jun
Slide 25: Topgolf Adjusted EBITDA Reconciliation
TOPGOLF ADJUSTED EBITDA RECONCILIATION Supplemental Financial Information ($ in millions, except percentages) (Unaudited) Three Months Ended September 30, Nine Months Ended September 30, Twelve Months Ended December 31, 2024 2023 2024 2023 2023 2022 Topgolf Segment operating income(1): $ 28.3 $ 38.9
Slide 26: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION Supplemental Financial Information ($ in millions, except percentages) (Unaudited) Reconciliation of Consolidated Non-GAAP Adjusted Free Cash Flow Twelve Months Ended December 31, 2023 GAAP cash flows provided by operations (1) $ 364.7 Less: capital expenditures (1) (482.0) A
Slide 27: Thank You
THANK YOU 27
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