strategic-management

276 AMIT J. SHAH
EXHIBIT 4 Sales Information by Region
Year Ended December 31
2008 2007 Percent change 2006 Percent change
Net sales: (in thousands)
United States $ 554,029 $ 597,569 -7% $ 566,600 5%
Europe 191,089 193,336 -1% 159,886 21%
Japan 166,476 120,148 39% 105,705 14%
Rest of Asia 80,011 86,133 -7% 75,569 14%
Other foreign countries 125,599 127,405 -1% 110,147 16%
Total 1,117,204 1,124,591 -1% 1,017,907 10%
Source: Callaway Golf Company, Form 10K (2008).
regions with the strongest growth in number of rounds played include the West North
Central, East North Central, and New England.
In 2008, approximately 50 percent of the CGC’s net sales were generated within the
United States, and 50 percent were generated elsewhere. The company does business in
more than 100 countries around the world. The majority of the company’s international
sales are made through its wholly owned subsidiaries located in Europe, Japan, Canada,
Korea, and Australia. Exhibit 4 provides sales information for CGC based on international
regions. From 2006 to 2007, no region incurred a loss in sales; however, between 2007 and
2008, three regions incurred losses, which were Europe (1 percent loss), the rest of Asia
(7 percent loss), and other foreign countries (1 percent loss).
Business Ethics and Environmental Matters
CGC adopted a corporate Code of Conduct and Ethics Policy in 1997 applicable to all
employees and directors, including senior financial officers. CGC previously permitted
loans to employees, including executive officers, in restricted amounts (up to $150,000)
and for limited purposes (purchase of a primary residence). There are currently no
outstanding loans to executive officers under this program and only two loans outstanding
to nonexecutive officers.
CEO/CFO certification procedures pursuant to Section 302 of Sarbanes-Oxley,
established in November 2002, have been implemented at CGC. The company also has an
insider trading policy that is written, distributed to all employees, and accompanied by
training. Officers and key employees are subject to “gatekeeper” review and approval by
the CGC’s legal department.
CGC operations are subject to federal, state, and local environmental laws. During
the ordinary course of its manufacturing process, CGC creates toxic waste through the use
of special materials and production processes. The waste is regularly transported off site
by registered waste haulers. As a standard procedure, a comprehensive audit of the treatment,
storage, and disposal facilities with which the company contracts for the disposal of
hazardous waste are performed annually by CGC. The company employs two full-time
environmental engineers at its Carlsbad, California, facility and a director of environmental,
health, and safety matters at its Chicopee, Massachusetts, facility to manage the
program. It is also a charter member of the U.S. Environmental Protection Agency’s
National Performance Track program, which recognizes facilities that have demonstrated a
commitment to superior environmental performance and compliance.
Business Operations
CGC has subsidiaries all over the world; those wholly owned by CGC include Callaway
Golf Sales Company, Callaway Golf Ball Operations, Inc. (formerly known as The Top-
Flite Golf Company), Callaway Golf Interactive, Inc., Callaway Golf Europe Ltd., Callaway
Golf K.K., Callaway Golf Korea Ltd., Callaway Golf Canada Ltd., Callaway Golf South