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June 11, 2001 New to the Callaway Golf Co. board are Ronald A. Drapeau and Ronald S. Beard. The pair fill seats that came vacant following the recent resignations of Charles J. Yash and Aulana L. Peters.
Yash resigned from the board effective May 31, when he also resigned as senior executive v.p. of Callaway’s Growth in Golf, to pursue other opportunities. Peters resigned effective June 6.
Drapeau was elected president and CEO of Callaway Golf on May 15 following the retirement of company founder and current chairman Ely Callaway.
He joined the company in 1996, and has served in a variety of positions since that time, including senior executive v.p., manufacturing. His new term as a director will run until the next annual meeting of shareholders or until replaced.
Beard is chairman of Gibson, Dunn & Crutcher, and has been general outside counsel to Callaway since 1998. He has more than 30 years of experience as a business lawyer advising corporate clients. As a director, Beard will no longer provide legal services to the company, although it is expected that his firm will continue to provide such services as requested.
His term as a director also will run until the next annual meeting of shareholders or until replaced.
"We are very pleased to make these fine additions to our board," says Callaway. "Both these gentlemen have extensive experience with the company that will be very useful and permit a smooth transition. I know that all of the other board members and the shareholders join me in supporting these appointments."
Drapeau also will serve on the board's finance committee, while Beard will serve on the board's audit, compensation and management succession, and finance committees.
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In other Callaway news, the company announced that a variety of market conditions are likely to result in a smaller than previously expected gain in revenues for the first six months of 2001.
The company’s revised guidance for the second quarter ending June 30, 2001, is for revenues of about $250 million, resulting in revenues of $511 million for the first six months of the year, or an increase of 5 percent over the first six months of 2000.
This is down from previous company guidance of $290 to $300 million in revenues for the quarter.
If this revenue target is achieved, the company currently expects to report earnings per diluted share of 35 cents to 38 cents for the second quarter and of 82 cents to 85 cents per share for the first six months of 2001, up from 78 cents a year ago.
"Our revenues in the second quarter are being affected by a variety of factors, most of which have been outside of our control," says Brad Holiday, executive v.p. and CFO. "Our ability to take orders in late 2000 and ship new products early in 2001 shifted some sales from the second and later quarters into the first quarter. In addition, there are some factors that have been negatively affecting the entire industry. They include unusually bad weather late into the season in the United States and in Europe, which has resulted in a decrease in rounds played, as well as significant economic concerns and uncertainty in all of our major markets, including the United States, which have affected retailer and consumer purchases. We are also seeing some heavy discounting and aggressive dating programs by major competitors on both current and close-out products, including both clubs and balls.
"In addition, our revenue expectations have been seriously impacted in a negative way by actions taken by the USGA and others in the United States against the ERC II Driver," Holiday continued. "The excellent early sales in the U.S. of our new ERC II Driver in late 2000 and early 2001 have slowed dramatically in the second quarter, and are now tracking well below previous levels. We think the USGA's actions, including its ban of the use of an ERC II or other non-conforming driver for handicap purposes and its erroneous position that such drivers are not of value to average golfers, have been the primary factors causing this drop in sales in the U.S. The USGA's handicapping ban has been adopted by most country clubs and golf associations in the U.S., and there are currently more than 1,200 on-course pro shops that have refused to stock the ERC II Driver even for recreational use.
“Outside the U.S., where the USGA's actions have not had the same effect because the Royal & Ancient Golf Club of St. Andrews, Scotland, has not agreed with the USGA's ban, the product's excellent performance capabilities have resulted in strong acceptance by golfers, both amateur and professional, and our sales have exceeded our expectations."
“We have been managing our expenses in light of this slower than expected growth in sales year over year," says Ron Drapeau, president and CEO. "Our inventories have been controlled to market conditions and reflect essentially all current line products. We believe that sell through on our core products at retail has been very good despite market conditions, and that our products at retailers — clubs and balls — are not overstocked.
“Some markets, such as Japan, remain very strong for us and our new products, although the economic environment in general around the world is soft.” Drapeau says. “Moreover, we remain strongly committed to serving the interests of average golfers and the recreational golf market, which puts us at odds with the USGA. In general, we plan to manage our business to achieve the best results this market will permit, while continuing to position our brand and our products as the best in the business for the future."
While it is not possible at this time to forecast results for the rest of the year with certainty, the company believes that the business factors listed above are likely to continue and there is no current expectation that the USGA's active and damaging opposition to the ERC II Driver will be dropped any time soon.
Thus, business should continue to fall below previous expectations and revenues and earnings per share for the year as a whole may be flat compared with 2000.
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Caimis Inc. of San Diego announced the availability of what it describes as the first-to-market traffic engineering software for monitoring and managing complex networks.
RouteReporter and Skitter are the first two products of the Caimis TE (traffic engineering) Manager suite and are available to manage the routing and path performance of networks.
"Caimis founders and staff are drawn from the provider and research sector and possess a detailed understanding of requirements for managing and optimizing complex networks," says Tracie Monk, CEO and co-founder of Caimis. "We are excited to announce these comprehensive routing and path performance products that address the rapidly evolving needs of advanced networks and fill a significant void in the market today."
RouteReporter, the flagship product, is a border gateway protocol routing monitor and analysis tool. It monitors BGP routing in real-time to analyze performance problems.
Generating detailed reports on specific network prefixes, BGP peers and autonomous systems, RouteReporter baselines routing performance, tracks routing stability trends as the network grows, identifies routing problems in real-time for corrective action and measures how well the provider is connected to the global Internet.
Metromedia Fiber Network, MCI Worldcom's UUNET and other large network and service providers have already chosen TE Manager products for their network management architecture.
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Miralani Corporate Center, a two-tenant, 81,400-square-foot R&D building at 8515 Miralani Drive in the Miramar area, has sold for $8.85 million.
The buyer was Miralani Windell, a Nevada LLC, with offices located in Costa Mesa. The seller was POP Miralani LP, a Delaware Limited Partnership head by Birtcher Realty LLC.
The property was 100 percent leased at the time of sale.
Tenants occupying the building at the time of sale were Q-tron Inc. and Acucorp Inc.
POP acquired the property from Shilder Group in a portfolio sale in 1999.
The buyer and seller in this most recent transaction were represented by Randy LaChance and Chris Loughridge of Voit Commercial Brokerage.
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For the second straight week, the price of regular unleaded gasoline fell across most of Southern California, Southern Nevada and Arizona, reports the Weekend Gas Watch, compiled by the Automobile Club of Southern California.
In the past week, motorists in the Los Angeles-Long Beach area saw the average price fall by 1.6 cents a gallon.
The Weekend Gas Watch monitors the average price of gasoline at popular destinations for motoring trips.
In the Los Angeles-Long Beach area, the average price of a gallon of unleaded regular gas was $2.013. The record price for the L.A.-Long Beach area is $2.036 set May 25.
In San Diego, the average price was $2.014 per gallon, 7/10 of a cent lower than last week's price. The record price for San Diego was $2.025, set May 29.
In Las Vegas the average price of $1.810 was 2.4 cents lower than last week's average price. The record for Las Vegas is $1.885 set March 27, 2000.
In the Phoenix-Mesa, Ariz., area the average price was $1.702, one-half cent lower than last week's average price. The record for Phoenix/Mesa of $1.720 was set May 30.
The downward trend in gasoline prices hopefully will continue, but it’s too soon to be sure," says Auto Club spokesman Jeffrey Spring. "Just this week, Chevron indicated it would reduce production if it cannot be exempted from rolling blackouts this summer."
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The SureBeam Corp. announced that Huisken Meats is introducing a new product line of SureBeam electronically pasteurized ground beef products in 22 states.
Last year, San Diego-based SureBeam and the Minnesota-based Huisken Meats launched the nation's first supermarket hamburger product to be electronically pasteurized with SureBeam's technology.
Since that introduction, the availability of SureBeam pasteurized ground beef products has expanded rapidly, reflecting growing consumer demand and Huisken's desire to increase the number of products it offers.
Huisken Meats' new rollout includes five ground beef products — four frozen beef patty packages having 75 percent and 90 percent leanness available in 2- and 4-pound sizes, as well as a two-pound ground beef package in 90 percent leanness.
Each ground beef package offers convenient, half-pound portions for ease of preparation.
"Let's not forget what’s at stake here," says Minnesota Health Commissioner Jan Malcolm. "Foodborne illness can be very serious. In some circumstances, it can be life-threatening — especially for young children. These products can drastically reduce the risk of getting a food-related disease. They represent the most important advance in food safety since the introduction of pasteurized milk in an earlier era."
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The local chapter of the National Multiple Sclerosis Society has named its 2001 mother and father of the year.
Harry Drogan, 52, a part-time drama teacher at La Jolla Country Day School, has been selected as father of the year, reports Allan Shaw, local chapter president and CEO.
Drogan, a San Diego native who graduated from Crawford High School (class of 1966), had a successful career with his family's real estate development firm when he was diagnosed with MS in 1986. Today, the University City resident needs a wheelchair and walker.
"Every day I thank God for my wonderful wife who is my caregiver and the efforts of the MS Society to find a cure," says Drogan, who has been married to his wife Debbie for 26 years.
Marian Colon, 44, has been honored as mother of the year.
Colon worked for nearly 20 years as a human resources manager before retiring last year because of MS. A San Diego resident since 1976, Colon is an active member of the Good Samaritan Church of God in Christ on Skyline Drive.
"I have good days and bad but I try to keep my spirits up," says Marian. "My mother who lives in Philadelphia is a great encourager for me."
On a daily basis, the MS Society's local office is constantly reaching out to identify and serve additional county residents who are not taking advantage of programs offered by the San Diego Area Chapter.
For information, phone (858) 974-8640.
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