837465--3/1/2007--CALLAWAY_GOLF_CO

related topics

{customer, product, revenue}

{property, intellectual, protect}

{operation, natural, condition}

{operation, international, foreign}

{product, market, service}

{condition, economic, financial}

{system, service, information}

{regulation, government, change}

{competitive, industry, competition}

{stock, price, operating}

{loan, real, estate}

Certain Factors Affecting Callaway Golf Company The Company s products may not achieve or maintain market acceptance. If the Company is unable to successfully introduce new products, its sales and profits would be adversely affected. The Company s products generally have relatively short product life cycles and the Company s operating results may fluctuate based on the mix of products sold. A reduction in the number of rounds of golf played or in the number of golf participants could adversely affect the Company s sales. The Company may have limited opportunities for future growth in sales of golf clubs and golf balls. If the Company inaccurately forecasts demand for its products, it may manufacture insufficient or excess quantities, which, in either case, could adversely affect its financial performance. The Company depends on single-source or a limited number of suppliers for some of its products, and the loss of any of these suppliers could harm its business. If the Company is unable to obtain at reasonable costs materials or electricity necessary for the manufacture of its products its business would be adversely affected. A disruption in the service or a significant increase in the cost of the Company s primary delivery services for its products and component parts could have a material adverse effect on the Company s business. The Company faces intense competition in each of its markets. The Company s golf ball business has a concentrated customer base. The loss of one or more of these significant customers could have a significant negative impact on this business. A reduction in discretionary consumer spending could reduce sales of the Company s products. International political instability and terrorist activities may decrease demand for the Company s products and disrupt its business. The Company s business could be harmed by the occurrence of natural disasters or pandemic diseases. The Company has significant international sales and is exposed to currency exchange rate fluctuations. The Company s business and therefore operating results are subject to seasonal fluctuations. The seasonality of the Company s business could exacerbate the adverse effects of unusual or severe weather conditions on the Company s business. Changes in equipment standards under applicable Rules of Golf could adversely affect the Company s business. The Company s sales could decline if professional golfers do not endorse or use the Company s products. If the Company is unable to enforce its intellectual property rights, its sales could be adversely affected. The Company may become subject to intellectual property suits that could cause it to incur significant costs or pay significant damages or that could prohibit it from selling its products. The Company s policies and procedures may be inadequate to fully protect its confidential information or to prevent misappropriation of trade secrets or confidential information of third parties. The Company s brands may be damaged by the actions of its licensees. Sales of the Company s products by unauthorized retailers or distributors could adversely affect the Company s authorized distribution channels and harm the Company s reputation. The Company has significant international operations and is exposed to risks associated with doing business globally. If the Company s customers and distributors do not pay for their purchases in a timely manner, the Company s financial results would be harmed. The Company relies on its information systems for management of its manufacturing, distribution, sales and other functions. If the Company s information systems fail to perform these functions adequately or if the Company experiences an interruption in their operation, its business and results of operations could suffer.

Full 10-K form ▸

837465--3/1/2007--CALLAWAY_GOLF_CO_/CA