Typically, my meetings with equipment companies are rather product-centric. Tuesday's summit with Callaway, in that regard, was atypical. Led by Chip Brewer, president and CEO, the Callaway senior management team set up shop in a conference room on the fourth floor of the Waldorf-Astoria hotel in New York City. His team presented the company's financial story to 90 or so Wall Street analysts (plus very few of us media folks.) Good timing, too, since Q1 2014 is Callaway's strongest quarter in terms of market share in many years.
Brewer opened the show with a few words about where Callaway's been, the "new Callaway" with a lower cost structure and renewed focus on its core business (hard goods), and highlighted a few accomplishments during the past year. In short, he positioned 2014 as "Year Two of the turnaround" as far as improved profitability and growth.
Next up was Dr. Alan Hocknell, SVP R&D. Doc Hocknell touched on several changes in R&D since Brewer's arrival in 2012. Hint: With the team focused on hard goods, it's able to react more quickly to changes in the market, and now possesses the mindset that it's okay not to be first with a new concept or idea as long as its product leapfrogs what's out there. He also described some product development tools at his disposal including CAD design, simulation modeling, advanced rapid prototyping and sophisticated measuring devices that can determine the amount of backspin on a putt or the edge radius on a groove, for instance. I doubt the analysts enjoyed that portion of the presentation as much as I did.
On to Mark Leposky, SVP Global Operations, who walked us through several updates and enhancements to the company's supply chains since he came on board in April 2012. Harry Arnett, SVP Global Marketing, used his 15 minutes in the sun to inject some levity to the proceedings with a few quick-witted one-liners. Arnett spoke of golf's new "sphere of influence" (in contrast to the game's traditional "pyramid of influence"). He's all in as far as accepting the challenge to change the way golf consumers perceive the Callaway brand. Positioning the company as more accessible, yet authentic, takes time, effort and creativity. His commitment to the social space certainly engages golfers. Clever multi-media experiences around new product launches don't hurt, either.
The assembled masses certainly took note when Brad Holliday, SeVP CFO, hit the stage. The 14-year Callaway veteran went through all the company's financials, which included its 19% ownership stake ($37.8 million investment) in Top Golf, which are newfangled driving range facilities that combine golf, entertainment, and friendly competitions all in one.
A Q&A session included inquiries about the Top Golf investment, the state of the game, earnings, golf balls, distribution channels, and more. All in all, the management team accredited themselves well, and demonstrated that Callaway is back on solid ground, which was not the case just a couple of years ago. BUY Callaway golf clubs in our online store CLICK HERE for Equipment news, photos, ClubTest reviews, custom clubs, more For more news that golfers everywhere are talking about, follow @si_golf on Twitter, like us on Facebook, and subscribe to our YouTube video channel.