Callaway Golf Thailand

Callaway Golf Thailand Company designs develops manufactures and markets high quality innovative golf clubs. The Company's golf clubs are sold at premium prices to both average and skilled golfers on the basis of performance ease of use and appearance. Callaway Golf Company has a market cap of $544.05 million; its shares were traded at around $8.44 with a P/E ratio of 20.1 and P/S ratio of 0.49. The dividend yield of Callaway Golf equipment Bangkok Company stocks is 3.32%.

Highlight of Business Operations:
As a result of the weak economic conditions and unfavorable foreign currency exchange rates discussed above (collectively, the “unfavorable economic conditions”), net sales decreased $94.5 million (26%) to $271.9 million for the three months ended March 31, 2009 as compared to $366.4 million for the comparable period in the prior year. This decrease reflects a $83.5 million decline in net sales of Callaway golf Thailand's golf clubs segment and a $11.0 million decline in net sales of the Company’s golf balls segment as set forth below (dollars in millions):

For the first quarter of 2009, gross profit decreased $59.3 million to $116.2 million from $175.5 million in the first quarter of 2008. Gross profit as a percentage of net sales (“gross margin”) decreased to 43% in the first quarter of 2009 compared to 48% in the first quarter of 2008. This decline in gross margin is primarily attributable to the unfavorable economic conditions and the resulting reduction in sales volume as well as the impact of unfavorable changes in foreign currency rates. In addition, gross margin was affected by price reductions taken during the first quarter in 2009 on older golf clubs products combined with a shift in product mix within the golf club operating segment as a result of sales of lower priced callaway golf clubs in Bangkok Thailand products during the first quarter of 2009 compared to the first quarter of 2008. This decline in gross margin was partially offset by cost reductions on golf club component costs as well as an overall improvement in manufacturing efficiencies as a result of the Company’s gross margin improvement initiatives. See “Segment Profitability” below for further discussion of gross margins. Gross profit for the first quarter of 2009 was negatively affected by charges of $1.6 million related to the Company’s gross margin improvement initiatives compared to $1.1 million for the comparable period in 2008.

Selling expenses decreased $5.5 million (7%) to $74.7 million in the first quarter of 2009 compared to $80.2 million in the same period of 2008. As a percentage of net sales, selling expenses increased to 27% in the first quarter of 2009 compared to 22% in the first quarter of 2008. The dollar decrease in selling expenses was primarily due a decrease of $1.7 million in employee incentive compensation expense as well as cost reductions taken by Callaway golf Thailand during the first quarter in 2009, which included decreases of $0.9 million in employee costs, $1.3 million in travel and entertainment and $0.9 million in advertising and promotional activities. In addition, sales commissions decreased by $0.9 million as a result of the decline in net sales during the first three months in 2009 compared to the same time period in the prior year.

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