Topgolf Callaway Brands Corp (NYSE:MODG) Q3 2024 Earnings Conference Call November 12, 2024 5:00 PM ET Company Participants Katina Metzidakis - Vice President of Investor Relations and Corporate Communications Chip Brewer - President and Chief Executive Officer Brian Lynch - Chief Financial Officer and Chief Legal Officer Conference Call Participants Matthew Boss - J.P. Morgan Michael Swartz - Truist Securities Joe Altobello - Raymond James Eric Wold - B. Riley Securities Megan Clark - Morgan Stanley Casey ...

For the quarter ended September 2024, Topgolf Callaway Brands (MODG) reported revenue of $1.01 billion, down 2.7% over the same period last year. EPS came in at $0.02, compared to $0.20 in the year-ago quarter.The reported revenue represents a surprise of +3.22% over the Zacks Consensus Estimate of $981.29 million. With the consensus EPS estimate being -$0.18, the EPS surprise was +111.11%.While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they compar ...

Topgolf Callaway Brands (MODG) came out with quarterly earnings of $0.02 per share, beating the Zacks Consensus Estimate of a loss of $0.18 per share. This compares to earnings of $0.20 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 111.11%. A quarter ago, it was expected that this maker of golf equipment and accessories would post earnings of $0.28 per share when it actually produced earnings of $0.42, delivering a surprise ...

| --- | --- | --- | --- | --- | --- | --- | --- | --- | |-------|-------|-----------------------------|-------|-------------------------------------|-------|-------|-------|-------| | | | | | | | | | | | | | | | | | | | | | | | Third Quarter 2024 Earnings | | | | | | | | | | | | Conference Call November 12, 2024 | | | | | | | | | | | | | | | | | | | | | | | | | IMPORTANT NOTICES Forward-looking Statements. During the presentation, any comments made about future plans, events, financial results, performance, ...

Revenue Performance - Topgolf net revenues increased by $5.5 million (1.2%) for the three months and $48.4 million (3.7%) for the nine months ended September 30, 2024, driven by new venue openings and Toptracer bay installations, partially offset by lower same venue sales[118] - Golf Equipment net revenues remained flat with a $0.1 million increase for the three months ended September 30, 2024, but decreased by $30.9 million (2.6%) for the nine months, primarily due to softer market conditions in Korea and unfavorable foreign currency impacts in Asia[119] - Active Lifestyle net revenues declined by $33.3 million (11.1%) for the three months and $90.3 million (10.3%) for the nine months ended September 30, 2024, due to soft market conditions in Europe and Asia, and a decline in wholesale sales at TravisMathew[120] - Total net revenues decreased by $27.7 million (2.7%) for the three months and $72.8 million (2.1%) for the nine months ended September 30, 2024, primarily due to declines in Active Lifestyle and Golf Equipment segments[117] - Net revenues in the United States decreased by $12.7 million (1.7%) for the three months ended September 30, 2024, primarily due to a decline in wholesale sales at TravisMathew[123] - Net revenues in Europe decreased by $12.9 million (8.6%) for the three months ended September 30, 2024, primarily due to declines in wholesale sales at Jack Wolfskin[124] - Net revenues in Asia decreased by $3.7 million (2.8%) for the three months ended September 30, 2024, primarily due to soft market conditions in Korea and unfavorable foreign currency impacts in Japan and Korea[125] - Net revenues in Rest of World increased by $1.6 million (6.9%) for the three months ended September 30, 2024, primarily due to increased Golf Equipment and Active Lifestyle sales in Canada and Australia[126] - Total net revenues decreased by $27.7 million (2.7%) for the three months ended September 30, 2024, compared to the same period in 2023[122] - Topgolf net revenues increased by $5.5 million (1.2%) for the three months and $48.4 million (3.7%) for the nine months ended September 30, 2024, driven by new venue openings but offset by declines in same venue sales[148] - Total net revenues decreased by $27.7 million (2.7%) for the three months and $72.8 million (2.1%) for the nine months ended September 30, 2024, reflecting declines across multiple segments[147] Foreign Currency Impact - Foreign currency fluctuations had a favorable impact of $2.1 million on net revenues for the three months but an unfavorable impact of $16.5 million for the nine months ended September 30, 2024[115][120] - Other income, net decreased by $4.2 million (80.8%) for the three months ended September 30, 2024, due to higher foreign currency losses[140] - Other income, net increased by $8.4 million (350.0%) for the nine months ended September 30, 2024, driven by reduced foreign currency transaction losses and dividend income[140] - The company's sensitivity analysis model estimates a potential loss of $27.9 million from foreign currency forward contracts due to a 10% unfavorable movement in foreign currencies[164] Operating Expenses and Costs - Cost of products decreased by $8.6 million (2.6%) for the three months ended September 30, 2024, primarily due to decreased sales in the Active Lifestyle operating segment[130] - Other venue expenses increased by $13.5 million (4.3%) for the three months ended September 30, 2024, primarily due to the addition of new Company-operated Topgolf venues[133] - Selling, general and administrative expenses increased by $8.1 million (3.3%) for the three months ended September 30, 2024, primarily due to higher employee benefits and payroll-related costs[135] - Research and development expenses decreased by $0.6 million (2.7%) for the three months ended September 30, 2024, primarily due to reduced employee costs[136] - Venue pre-opening costs decreased by $3.0 million (43.5%) for the three months ended September 30, 2024, due to fewer planned venue openings in 2024[137] - Net interest expense increased by $5.4 million (10.3%) for the three months and $19.9 million (13.0%) for the nine months ended September 30, 2024, primarily due to new Topgolf venue financing[140] - A 10% increase in interest rates would result in an incremental expense of $4.6 million over the 12-month period ended September 30, 2024[166] Operating Income - Topgolf operating income decreased by $10.6 million (27.2%) for the three months but increased by $1.6 million (1.9%) for the nine months ended September 30, 2024, due to improved operational efficiencies and cost management[148] - Golf Equipment operating income decreased by $8.4 million (23.9%) for the three months and $26.9 million (12.6%) for the nine months ended September 30, 2024, due to higher freight costs and unfavorable foreign currency impacts[150] - Active Lifestyle operating income decreased by $20.6 million (51.5%) for the three months and $38.0 million (39.3%) for the nine months ended September 30, 2024, due to revenue declines and operating expense deleverage[151] - Total operating income decreased by $40.1 million (54.3%) for the three months and $66.7 million (24.7%) for the nine months ended September 30, 2024, primarily due to lower segment operating income[147] Net Income and Earnings - GAAP net loss for the three months ended September 30, 2024, was $3.6 million, compared to net income of $29.7 million in 2023, with diluted loss per share of $(0.02)[143] - Non-GAAP net income for the three months ended September 30, 2024, was $4.3 million, compared to $35.8 million in 2023, with diluted earnings per share of $0.02[143] - GAAP net income for the nine months ended September 30, 2024, decreased to $65.0 million from $172.1 million in 2023, with diluted earnings per share of $0.35[145] - Non-GAAP net income for the nine months ended September 30, 2024, was $101.8 million, compared to $141.8 million in 2023, with diluted earnings per share of $0.54[145] Cash and Financial Position - Cash and cash equivalents increased by $48.7 million to $447.5 million at September 30, 2024, driven by lease financings and used for operations, capital expenditures, and acquisitions[152] - Inventory decreased by $128.0 million to $666.4 million at September 30, 2024, reflecting seasonality and inventory reduction initiatives[154] - Cash and cash equivalents increased by $129.0 million to $863.0 million as of September 30, 2024, compared to September 30, 2023[155] - 38% of the company's cash is held in regions outside the United States as of September 30, 2024[155] - Total significant cash obligations as of September 30, 2024 amount to $10,740.7 million, including long-term debt of $1,500.3 million and interest payments of $594.5 million[158] - Estimated capital expenditures for the year ending December 31, 2024 are $190.0 million, with $130.0 million allocated to the Topgolf business[161] Strategic Initiatives - The company announced a strategic plan to separate into two independent companies: Callaway and Topgolf, with the spin-off expected to be completed in the second half of 2025[107] Key Performance Indicators - Same venue sales, a key performance indicator, declined due to slower walk-in traffic and a softer corporate events business[118] - The company uses non-GAAP measures, including constant currency adjustments and same venue sales, to evaluate business performance and provide additional insights to investors[108] Segment Performance - The Active Lifestyle segment includes brands like Callaway Golf, TravisMathew, Jack Wolfskin, and OGIO, with sales impacted by seasonal trends and market conditions[113] - The company operates 98 Company-operated venues, including 92 Topgolf venues and 2 BigShots venues in the U.S., and 4 venues in the U.K. as of September 30, 2024[110] Tax Impact - Income tax benefit for the three months ended September 30, 2024, was $19.4 million, compared to $3.0 million in the same period of 2023, with an effective tax rate of 84.3%[141] - Income tax benefit for the nine months ended September 30, 2024, was $24.1 million, compared to $53.0 million in 2023, with an effective tax rate of (58.9%)[141]

Exhibit 99.1 TOPGOL TOPGOLF CALLAWAY BRANDS ANNOUNCES THIRD QUARTER 2024 RESULTS 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. • The Company further strengthened its available liquidity position to $863 million, increasing $129 million year-over-year. • The Company reaffirmed its expectation for full year positive Adjusted Free C ...

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. The Company further strengthened its available liquidity position to $863 million, increasing $129 million year-over-year. The Company reaffirmed its expectation for full year positive Adjusted Free Cash Flow for the total Company and Topgolf. The Company lowered full year 2024 revenue gu ...

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Topgolf Callaway Brands Corp. (MODG) is scheduled to report results for the third quarter of 2024 on Nov. 12, after market close. In the last reported quarter, earnings topped the Zacks Consensus Estimate by 50% and increased 7.7% on a year-over-year basis,Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.Notably, the company’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with an average surprise of 235.9%.Trend in Estimate Revision of MODGThe Zack ...

CARLSBAD, Calif., Nov. 5, 2024 /PRNewswire/ -- Topgolf Callaway Brands Corp. (the "Company" or "Topgolf Callaway Brands") (NYSE: MODG) announced today that it intends to release its third quarter 2024 financial results on Tuesday, November 12, 2024, after the market closes. Following the release, the Company's management team will hold a conference call to review the results and discuss the Company's business and outlook beginning at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time). A live webcast and presen ...