Callaway Golf has announced cost-reduction initiatives that include a 12 per cent reduction in the company’s workforce that will include all regions and levels of the organization.
These initiatives are expected to generate $52-million in gross annualized savings, according to the company, in its efforts to streamline operations and sharpen its focus on core brands Callaway and Odyssey.
“As I mentioned last quarter, the company’s business has not recovered at a satisfactory pace and we are taking actions to accelerate the recovery,” said company president and CEO Chip Brewer.
“The cost reduction initiatives we announced (Wednesday) are part of those actions and are consistent with the significant changes we are making in streamlining and simplifying our organization and in how we approach and operate our business,” he said.
“These changes, however, will have a greater impact on our financial results in 2013 and 2014 than on 2012,” said Brewer.
“As a result, and given the slower than anticipated pace of recovery, we no longer expect that 2012 full year financial results will be significantly better than last year,” he added.
“At this point, we expect for full year 2012, a pro forma loss per share of $0.55-$0.75,” he said.
The company estimates net sales for the second quarter that ended June 30 of $280 million, an increase of three per cent compared to the second quarter of 2011.
First half 2012 net sales are estimated at $565 million, a one per cent increase compared to the same period in 2011.
“I am pleased with the progress on the changes we are making to our business,” said Brewer.
“In the last few months, we have sold the Top-Flite and Ben Hogan brands, licensed our North American apparel business, licensed our footwear business to our current footwear partner and have made significant changes in senior management,” he said.
“Furthermore, the actions we are announcing will better align our cost structure with our current business and the changes we are making to our sales and marketing strategy will position us for sales growth in 2013 and beyond,” he added.