strategic-management

274 AMIT J. SHAH
During the second half of 2008, the deteriorating economic conditions in the United
States spread to most of the Callaway’s international markets and resulted in an overall
decrease in net sales for 2008 from 2007. In spite of the economic struggles, CGC’s
financial position remains strong because the company has little long-term debt and high
liquidity. Exhibit 2 presents the consolidated balance sheet of Callaway.
EXHIBIT 2 Callaway Golf Company Consolidated Balance Sheets (in thousands, except share
and per share data)
December 31
2008 2007
ASSETS
Current assets:
Cash and cash equivalents $ 38,337 $ 49,875
Accounts receivable, net 120,067 163,515
Inventories, net 257,191 253,001
Deferred taxes 27,046 42,219
Income taxes receivable 15,549 9,232
Other current assets 31,813 30,190
Total current assets 490,003 496,581
Property, plant and equipment, net 142,145 128,036
Intangible assets, net 146,945 140,985
Goodwill 29,744 32,060
Deferred taxes 6,299 —
Other assets 40,202 40,416
TOTAL $ 855,338 $ 838,078
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued expenses $ 126,167 $ 130,410
Accrued employee compensation and benefits 25,630 44,245
Accrued warranty expense 11,614 12,386
Credit Facilities 90,000 36,507
Total current liabilities 253,411 223,548
Long-term liabilities:
Deferred taxes, net — 2,367
Deferred compensation 6,566 8,200
Energy derivative valuation account — 19,922
Income taxes payable 14,993 13,833
Commitments and contingencies (Note 15)
Shareholders’ equity:
Preferred Stock, $.01 par value, 3,000,000 shares
authorized, none issued and outstanding at December 31, 2008
and 2007 — —
Common Stock, $.01 par value, 240,000,000 shares
authorized, 66,276,236 shares and 66,281,693 shares
issued at December 31, 2008 and 2007, respectively 663 663
Additional paid-in capital 102,329 111,953
continued