Callaway Golf Company (NYSE: ELY) today announced that it has
successfully completed its offering of 1,250,000 shares of 7.50% Series
B Cumulative Perpetual Convertible Preferred Stock, $0.01 par value,
with a liquidation preference of $100 per share. In addition, the
Company announced that the initial purchasers exercised the option to
purchase an additional 150,000 shares of preferred stock to cover
over-allotments in full, bringing the total amount of the preferred
stock sold to $140 million. The Company will pay cumulative dividends on
the preferred stock from the date of original issue at a rate of 7.50%
per annum of the $100 liquidation preference per share, subject to
adjustment in certain circumstances. Lazard Capital Markets LLC acted as
the sole book-running manager of the offering, and Raymond James &
Associates, Inc. and Stifel, Nicolaus & Company, Inc. acted as
co-managers. Callaway intends to use the net proceeds of approximately
$134 million to pay down a portion of its revolving line of credit,
which the Company believes will enable it to retain the credit
facility’s currently favorable terms and avoid the need for an amendment
of such terms.
"We are very pleased with the strong response that the market gave this
offering and believe it reflects our investors’ confidence in Callaway’s
long-term growth prospects,” said George Fellows, President and CEO of
Callaway Golf Company. "Callaway has continued to maintain or grow
market share in a challenging environment and with a strengthened
balance sheet, the Company is well positioned to quickly take advantage
of opportunities as the economy recovers. We enjoy worldwide brand
equity and have a proven history of innovation, which is reflected by
Callaway’s dedicated followers in more than 100 countries. This global
reach and geographic diversity allows the Company to find opportunities
in regions throughout the world.”
The preferred stock will be convertible, at the holder’s option, in
certain circumstances, into common stock of Callaway at an initial
conversion rate of 14.1844 shares of Callaway’s common stock per share
of preferred stock, which is equivalent to an initial conversion price
of approximately $7.05 per share.
The Company may also elect, on or prior to June 15, 2012, to mandatorily
convert some or all of the preferred stock into shares of Callaway’s
common stock if the closing price of the Company’s common stock has
exceeded 150% of the conversion price for at least 20 of the 30
consecutive trading days ending the day before the Company sends the
notice of mandatory conversion. If the Company elects to mandatorily
convert any preferred stock, it will make an additional payment on the
preferred stock equal to the aggregate amount of dividends that would
have accrued and become payable through and including June 15, 2012,
less any dividends already paid on the preferred stock.
This press release does not constitute an offer to sell or the
solicitation of an offer to buy any securities (including the shares of
common stock into which the securities are convertible) and shall not
constitute an offer, solicitation or sale in any jurisdiction in which
such offer, solicitation or sale is unlawful. The preferred stock and
the underlying common stock issuable upon conversion have not been
registered under the Securities Act or any applicable state securities
laws and may not be offered or sold in the United States, absent
registration or an applicable exemption from such registration
requirements.
About Callaway Golf
Through an unwavering commitment to innovation, Callaway Golf Company
(NYSE: ELY) creates products and services designed to make every golfer
a better golfer. Callaway Golf Company manufactures and sells golf clubs
and golf balls, and sells golf accessories, under the Callaway Golf®,
Odyssey®, Top-Flite®, Ben Hogan® and uPro™ brands in more than 100
countries worldwide. For more information please visit www.callawaygolf.com
or Shop.CallawayGolf.com.
Important Notice Regarding Forward-Looking Statements
The statements in this press release regarding the proposed use of
proceeds and the line of credit are forward-looking statements that
involve risks and uncertainties, including, but not limited to, market
conditions, a significant decline in revenues or further weakening of
economic conditions and foreign currency exchange rates and the
Company’s ability to comply with the financial covenants of its line of
credit. The forward-looking statements are made pursuant to the safe
harbor provisions of the Private Securities Litigation Reform Act of
1995. Actual results may differ materially from those stated in any
forward-looking statements based on a number of factors. For additional
information concerning these and other risks and uncertainties that
could affect these statements and the Company’s business, see the
Company’s Current Report on Form 8-K, filed on June 8, 2009, as well as
other risks and uncertainties detailed from time to time in the
Company’s reports on Forms 10-K, 10-Q and 8-K subsequently filed from
time to time with the Securities and Exchange Commission. Readers are
cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date hereof. The Company
undertakes no obligation to republish revised forward-looking statements
to reflect events or circumstances after the date hereof or to reflect
the occurrence of unanticipated events.
