Callaway (ELY) Sid Muralidhar and Rahul Rachapudi

Company Background ●Founded by Ely Callaway ●Based in Carlsbad, California ●Sells high quality golf gear and apparel in over 70 countries ●Largest marketer of golf clubs ●Have an “eBay” for their own clubs ●Chip Brewer, CEO ○82% Approval Rating by Motley Fool

●Callaway beats projected EPS ($0.28) by $0.11 ●Viewership of 2015 Masters tourney +26% ●Predicted strong market share gains and margin improvements ●Minority owner in TopGolf International ○Fast-growing; microchip technology-based gamel; aggressive expansion; Could potentially be $3-5 of ELY share alone ●On the verge of a “powerful and sustainable comeback” ●New Chrome soft balls and XR clubs should drive market gain in near future ●Course activity shows that rounds played per day has increased while participation rates have started stabilizing - For the full year, sales rose 5% to $$887 million driven by growth in most major product categories (woods +8%; irons +12%; golf balls +4%; and accessories and other +2%) and growth in all geographic segments (United States +5%; Japan +3%; Europe +11%; Rest of Asia +7%; and Other foreign countries +1%). Income from operations improved significantly to $31 million verses a loss of $11 million in 2013 while fully diluted earnings per share increased to $0.20 verses a loss of $0.31 in The turnaround was driven by the increases in sales, improvements in gross margins of 310 basis points and flat operating expenses that more than offset an approximately $6 million increase in other expense due to a decrease in foreign currency contract gains. There was also a $17 million decrease in pre-tax charges related to the cost reduction initiatives that were completed in ( MYCC/s/via/21051/article/view/p/mid/1/id/836/) - In the News

Outsider Opinions (Stock) ●M●Mar 23, Imperial Capital upgraded from In-line to Outperform ●A●April 20, Jefferies initiated a Buy transaction ○J○Jefferies analyst publishes a 42-page research article on why to buy Callaway ●A●Analysts at KeyBanc increased projection to $16 and gave ELY an “overweight” rating

Outsider Opinions (Product) ●4 yr. Langley Varsity starter, 2x Captain, State Champ., 1st Team All-Conference, 1st Team All-Region - “I like their new 3 wood.” ●TJ Varsity player freshman year, Multiple AJGA Golf Tourney titles, Long Drive Champion at Congressional Country Club (#1 Golf course/club in the U.S.) - “The clubs have a range from very forgiving clubs for beginners, to very stiff complex clubs for professionals. Top 3 brands for drivers as it has a 460cc head and fully adjustable loft for its driver and woods.”

Icons/Endorsements ●J●Justin Timberlake ●A●Arnold Palmer ●P●Phil Mickelson ●N●Nintendo

3 Month Graph

1 Year Graph

Numbers

Competition ●Ping golf ●Taylormade Golf Company ●Acushnet Company ●ALL competitors are privately held

Community Service ●Each month since 1992, Callaway Golf employees and their family members have volunteered with a local non- profit organization ●The Callaway Golf Company Employee Community Giving Program - donates to events for certain U.S. nonprofit organizations ●Military donations

Why to Buy ●Golf industry is bouncing back ●Golf players gaining popularity ○ i.e. Tiger Woods, Jordan Spieth ●Little competition with a premium brand ●Topped 1Q Forecast, Growth in Net Income and Revenue ●Phil Mickelson Approved

Recommendation