Paul directs the work of an award-winning staff covering business news in the nation's fourth largest metro region. Based on currently available information, the Company estimates the following results for the quarter endedSeptember30, 2020: * Earnings before Interest, Taxes, Depreciation and Amortization Expense, and Stock Compensation Expense. However, once completed, management estimates that on average a typical venue generates $17 million in annual revenue and $5 million in adjusted EBITDA. 2023 Leaders Group. With the deal, Callaway shareholders will own a 51.5% stake in the company with the rest owned by Topgolfs investors. It's a driving range where players of all skill levels can hit balls, each with an RFID chip in them, to different targets up and down the range. It expects that to grow to $3.2 billion by 2022 and at a 10% rate after that. Although there were numerous assumptions and multiples involved in this research, I hope it was able to demonstrate the growth and valuation potential that Topgolf can reach as it expands to a global golf entertainment company. NW Atlanta, GA 30318, N Meacham Rd and E Algonquin Rd., Schaumburg, IL 60173, 10611 Nall Avenue, Overland Park, KS 66207, 10955 N. Mall Drive, Baton Rouge, LA 70809, 20101 Century Blvd., Germantown, MD 20874, 500 Great Lakes Crossing Dr., Auburn Hills, MI 48326, 6420 N. Camden Ave., Brooklyn Center, MN 55430, 16851 N. Outer 40 Rd., Chesterfield, MO 63005, 104 Centerton Rd., Mount Laurel, NJ 08054, 1600 Desert Surf Circle NE, Albuquerque, NM 87107, 8024 Savoy Corporate Dr., Charlotte, NC 28273, 5700 Brecksville Rd., Independence, OH 44131, 9568 Water Front Drive, West Chester Township, OH 45069, 13313 Pawnee Dr., Oklahoma City, OK 73114, 2850 Robert Grissom Pkwy., Myrtle Beach, SC 29577, 490 Camp Jordan Pkwy., East Ridge, TN 37412, 2700 Esperanza Crossing, Austin, TX 78758, 3760 Blair Oaks Drive, The Colony, TX 75056, 1030 Memorial Brook Blvd., Houston, TX 77084, 5539 North Loop 1604 W, San Antonio, TX 78249, 560 Spring Park Center Blvd., Spring, TX 77373, 920 Jordan River Blvd., Midvale, UT 84047, 20356 Commonwealth Center Dr. Ashburn, VA 20147, 5444 Greenwich Road, Virginia Beach, VA 23462. Get the latest business insights from Dun & Bradstreet. Supplemental Financial Information and Non-GAAP Reconciliation, Non-Cash Amortization of Discount on Convertible Notes(2), Acquisition & Other Non-Recurring Expenses(4). Apart from Callaways previous 14% share in the golf-entertainment business, Topgolf also had major ownership stakes from Providence Equity Partners, WestRiver Group and Dundon Capital Partners, the Dallas-based investment arm of Carolina Hurricanes owner Tom Dundon. Callaway is issuing about 90M shares to facilitate the merger stock is down about 20% in response. If youd like to retain your premium access and save 20%, you can opt to pay annually at the end of the trial. Topgolf peak revenue was $220.0M in 2021. organisation Just for fun, lets look at a potential valuation if management lives up to their expectation of 450 total venues worldwide over the next 20 years. Based on industry valuations and the anticipated growth in venues, I believe the Topgolf business alone will be worth at least $4.3 billion by 2025. We support credit card, debit card and PayPal payments. Please. During today's conversation IEG's Vice President of Strategy and Churchill Downs Vice President of Marketing, Brand and Partnerships Casey Ramage give us some insight on their analytical approach to sponsorship strategy. For additional information concerning these and other risks and uncertainties that could affect these statements, the golf industry, and Callaways business, see Callaways Annual Report on Form 10-K for the year ended December 31, 2019 as well as other risks and uncertainties detailed from time to time in Callaways reports on Forms 10-Q and 8-K subsequently filed with the SEC, including the proxy statement/prospectus/consent solicitation that will be included in the registration statement on Form S-4 that will be filed with the SEC in connection with the proposed transaction. About 54 percent of Topgolf customers are between the ages of 18-34 and are drawn to the unique intersection of where golf meets entertainment. In addition, the Company has included in the schedules to this release a reconciliation of non-GAAP information to the most directly comparable GAAP information. (2) Represents the non-cash amortization of the debt discount on the convertible notes issued in May 2020. Before that, he was editor-in-chief at the Dallas Business Journal and business editor at the Cleveland Plain Dealer. The acquisition of Topgolf for $2.6 billion redefined Callaway (ELY) as a golf entertainment company. Paul O'Donnell, Business Editor. Using management guidance, modest growth assumptions, and industry EBITDA multiples, the Topgolf business could be worth up to $4.3 billion by 2025. 5 Excludes Deemed Landlord Financing In a statement, the House Ways and Means chair explained Other lead investors include Callaway, which took a stake in the company in 2006; Carolina Hurricanes owner Thomas Dundon, who bought a stake in 2011; and Providence Equity, which took an undisclosed stake in 2016. Chip Brewer will continue to lead the combined company as President and Chief Executive Officer. A live webcast of the conference call and downloadable slides will be available online at: https://ir.callawaygolf.com. These risks, uncertainties and other factors relate to, among others: risks and uncertainties related to our pending merger with Topgolf, including the failure to obtain, or delays in obtaining, required regulatory approval, the risk that such approval may result in the imposition of conditions that could adversely affect Callaway or the expected benefits of the proposed transaction, any termination fee that may be payable by Callaway pursuant to the terms of the merger agreement, or the failure to satisfy any of the closing conditions to the proposed transaction on a timely basis or at all; costs, expenses or difficulties related to the merger with Topgolf, including the integration of the Topgolf business; failure to realize the expected benefits and synergies of the proposed transaction in the expected timeframes or at all; the potential impact of the announcement, pendency or consummation of the proposed transaction on relationships with Callaways and/or Topgolfs employees, customers, suppliers and other business partners; the risk of litigation or regulatory actions to Callaway and/or Topgolf; inability to retain key personnel; changes in legislation or government regulations affecting Callaway and/or Topgolf; uncertainty of the duration, scope and impact of COVID-19; a further spread or worsening of COVID-19; any further regulatory actions taken in response to COVID-19, including the future shutdown of or restrictions on Callaways or Topgolfs retail locations, venues, distribution centers, manufacturing plants or other facilities; the effectiveness of Callaways or Topgolfs protective gear, social distancing guidelines, and other preventive or safety measures; disruptions to business operations of Callaway and Topgolf as a result of COVID-19, including disruptions to business operations from travel restrictions, government-mandated or voluntary shut-down orders or quarantines, or voluntary social distancing that affects employees, customers and suppliers; continued growth, momentum and opportunities in the golf industry; production delays, closures of manufacturing facilities, retail locations, warehouses and supply and distribution chains; staffing shortages as a result of remote working requirements or otherwise; uncertainty regarding global economic conditions, particularly the uncertainty related to the duration and impact of the COVID-19 pandemic, and related decreases in customer demand and spending; and economic, financial, social or political conditions that could adversely affect Callaway, Topgolf or the proposed transaction. (760) 931-1771 2 National Golf Foundation, August Rounds Play, Published September 2020 Click below to sign in. Callaways strong financial profile will enable the combined company to accelerate innovation, develop exciting new products and experiences, and create compelling value for shareholders, while providing the dedicated teams of both companies more opportunities to showcase their talents and complementary capabilities., We are excited to join the Callaway family and strengthen the experiences we create at the intersection of sports and tech-driven entertainment, said Dolf Berle, Chief Executive Officer of Topgolf. I have no business relationship with any company whose stock is mentioned in this article. The non-GAAP information may also be inconsistent with the manner in which similar measures are derived or used by other companies. MEMBERSHIP TERMS: If you choose a Lifetime Membership, you will pay a one-time charge of $5.00 where applicable, and you will be subject to the Terms and Conditions contained in this Agreement. Secondly, can Topgolf look up your membership? Information regarding Callaways directors and executive officers is contained in Callaways Annual Report on Form 10-K for the year ended December 31, 2019 and its Revised Definitive Proxy Statement on Schedule 14A, dated March 27, 2020, which are filed with the SEC and can be obtained free of charge from the sources indicated above. Topgolf revenue is $220.0M annually. If you would like to participate in the call, please dial 1-877-879-1183 or 1-412-902-6703, if calling internationally, approximately 15 minutes prior to the start of the call (access code: 5543896). Topgolf currently has 28 open locations in the United States, with another dozen opening soon all over the place. The early data is encouraging about participants going from Topgolf to the course. The high degree of interest in the game of golf as well as the past and future growth prospects of Topgolf makes Callaway one of the most intriguing investment opportunities. The GAAP results contained in this press release have been prepared in accordance with accounting principles generally accepted in the United States ("GAAP"). Last year, Topgolf had a massive 13 million customer visits and that number is expected to continue growing rapidly through an aggressive expansion strategy that includes plans to open between seven and 10 new venues annually for the foreseeable future both in the U.S. and overseas. Topgolfs chairman, Erik Anderson, will take a spot on Callaways board of directors as vice chairman, joined by two other Topgolf directors. Compare Standard and Premium Digital here. At Topgolf, you pay for time at a bay, which you should typically reserve well in advance of your visit if it's a weekend. Callaway has invested in Topgolf twice already, in 2006 and 2018, amounting to an existing ownership stake of about 14%. Accordingly, we have not provided a further reconciliation of EBITDAS to GAAP net income. Based on industry valuations and the anticipated growth in venues, I believe the Topgolf business alone will be worth at least $4.3 billion by 2025. a component of in-person entertainment venues as a large part of their business. Attention spans scatter. Call 1-800-GAMBLER (NJ/WV/PA/IL) or 1-800-9-WITH-IT (IN only) or 1-800-BETS-OFF (IA only) or 1-800-522-4700 (CO Only) or TN REDLINE: 800-889-9789. Dont sacrifice your ability to be healthy, active, and at your best to enjoy a great beer - Athletic Brewing has created an innovative lineup of refreshing, non-alcoholic craft beers. Gambling problem? From a financial perspective, Topgolf did $1.1 billion in revenue last year and is growing at a 30% CAGR since 2017. More About TEG , Highly Complementary Businesses with Reach Across the Entire $80 Billion Global Golf Industry, Compelling Family of Brands Well Positioned to Capitalize on Outdoor Consumer Trends, Combined Businesses Create Clear Line of Sight to More Than $1 Billion of Adjusted EBITDAS, Callaway Announces Record Preliminary Results for the Third Quarter 2020. In 2019, amounts represent certain non-recurring transition costs associated with the acquisition of Jack Wolfskin, including consulting costs, audit fees and travel expenses, in addition to other non-recurring advisory fees. Goldman Sachs & Co. LLC served as the financial advisor to Callaway and Latham & Watkins LLP served as legal counsel. Calloway's stock is at the same price as it was in 1998. Patrick Burke These selected companies were Dave & Buster's (PLAY), Live Nation (LYV), Drive Shack (DS), Cinemark (CNK), and Disney (DIS) who all have a component of in-person entertainment venues as a large part of their business. Each Topgolf facility, depending on location, costs between $10M and $40M to build and is expected to bring in an average annual revenue of $17M. Callaway will assume Topgolfs net debt, which is estimated to be $555 million at closing7, resulting in an estimated enterprise value for Topgolf of approximately $2.5 billion. John Lundgren will continue as Chairman of the Board of the combined company, while Erik Anderson will serve as Vice Chairman. Management stated in the Q3 earnings call they will have 10 additional venues opening next year which will bring total operating venues for 2023 to 80. Callaway undertakes no obligation to republish revised forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. Using the same EBITDA margin and revenue per venue, we are able to project out Topgolfs future performance and add additional assumptions regarding new venues from managements guidance. Using management guidance, modest growth assumptions, and Non-GAAP Reconciliation and Supplemental Financial Information, Non-recurring and non-cash charges, before taxes(1). Over the course of the initial 20-year ground lease, once construction is completed and Topgolf is open for business, the county will receive more than $625,000 in annual revenue, benefiting the San Bernardino County Regional Parks system, https://parks.sbcounty.gov/, which includes nine regional parks throughout the county and Get the latest headlines delivered to your inbox every weekday. Carlsbad, Calif.-based Callaway also said its $630 million in cash and liquidity could help Topgolf grow in coming years after being financed in its early years through private equity investment. Topgolf revenue is $220.0M annually. The Dallas company has grown at a 30 percent compound annual rate since 2017 and recorded $1.06 billion in sales last year with a net loss of $114.9 million. The player data is immensely attractive. 2 separate analysts have estimated the current value of the Topgolf investment at $2-$3 per Callaway share. We are not nave to say we would never look at it. Dr Pepper flavored Peeps arrive in Texas soon. personalising content and ads, providing social media features and to Additionally, EBITDA margin and average revenue per venue must stay constant with 2021's figures for these valuations to become realized. The Company has provided reconciling information in the attached schedules. Players can choose to compete in several Topgolf games in which players earn points based on how well they hit to specific targets. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. In revenue last year and is growing at a 10 % rate after.! 90M shares to facilitate the merger stock is down about 20 % response... Webcast of the conference call and downloadable slides will be available online at: https //ir.callawaygolf.com. Callaway shareholders will own a 51.5 % stake in the company has provided reconciling in! Price as it was in 1998 say we would never look at it down 20! In several Topgolf games in which similar measures are derived or used by other companies company as President Chief. 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