From the Callaway Golf 2Q2011 earnings press release:
The Company’s restructuring plan is expected to result in annualized gross pre-tax savings of approximately $50 million. The Company will reinvest up to half of the savings in incremental brand and demand creation initiatives. Although there will be some incremental investment in these initiatives in 2011, the bulk of the incremental investment will occur in 2012. Pre-tax charges related to the restructuring plan are estimated to be approximately $15-$20 million, including the $5 million recognized in the second quarter of 2011. A majority of the remaining restructuring charges are expected to be recognized in the second half of 2011.
The Company’s restructuring plan involves (1) streamlining the organization to reduce costs, simplify internal processes, and increase the focus on the Company’s consumer and retail partners, (2) realigning the organization to place greater emphasis on global brand management and to drive the Company’s key global initiatives, and (3) incremental investment in the brand and demand creation initiatives to drive sales growth. The Company has already begun its restructuring plan, including the elimination last week of approximately 7% of its positions globally across all levels of the Company, and has taken other actions to lower costs going forward. The Company also began its structural realignment with the consolidation of the Company’s various sales and marketing organizations into four sales and marketing regions and with the creation of a separate global brand group to oversee global brand development and more coordinated messaging across all regions.
“The financial results this year are disappointing, and we wanted to waste no time in beginning the process of reversing that trend,” stated Mr. Thornley. “I am pleased with how quickly we have been able to develop and begin implementing our restructuring plan.”