Topgolf Callaway Brands Corp. (CALY) Earnings Call Transcript & Summary

Hello, and welcome. Before we begin, I must remind you that members of the media and the press are not authorized to participate in this event. If you are from the media or the press, please disconnect from the call now. The content presented on this conference call is proprietary to and/or subject to the rights -- the copyrights of Jefferies or third parties. You may not externally record, transcribe, publish or otherwise publicly disclose any portion of this call, including, but not limited to, the name or other identifiers of the speakers unless Jefferies permits it in writing. Please note, this call is being recorded. By attending this event, you agree to all of these restrictions.

Thanks, Katie. Hey, everybody. Good afternoon or good morning on the West Coast. It's Randy Konik, lifestyle and growth platforms analyst at Jefferies. Ahead of time, we want to wish everybody a future happy Thanksgiving, but we thought we'd give you an early present for Thanksgiving by having Topgolf Callaway Brands leadership with us today to talk about the story. And I want to thank Chip Brewer, CEO, for taking some time out of his busy day to have this chat with us. And then also really want to thank Katina Metzidakis and Andrius Ellner for helping set this up. So in terms of logistics, we want to make this interactive. We're going to have Chip give some perspective on the business and this actual transaction. He'll go over that and has a few slides to talk to. After that, I want to ask Chip some questions. And then after that, we want to make it as interactive as possible and allow people to ask questions. You can either, I think, raise your hand. But if you don't want to raise your hand and you want to just ask a question through me, just give me an e-mail, rkonik, that's [email protected]. And with that, we'll turn it over to Chip. Chip?

Thanks, Randy, and nice to be with you today and everybody else. As everybody knows at this point, we announced last week a definitive agreement to sell 60% of Topgolf to Leonard Green and a transaction that's expected to close in early Q1 of next year. This is a culmination of a long process that goes back to at least mid-2024 and was announced in September of '24. There are 3 key takeaways that I want to share with investors regarding this transaction. And first is it's a transition back to being a leading pure-play golf company for Callaway Golf. And with that, we're retaining strong and iconic brands with Callaway and Odyssey and a promising and profitable brand in TravisMathew that is also rooted in golf. It obviously increases our operational focus and simplifies our org structure as well as our investor story. We expect to have low leverage profile and strong and stable free cash flows that should grow over time and be a pure play that investors favor and could more easily value. We have a proven track record in this space. The #1 golf club brand in the U.S. for 9 out of the last 11 years, #2 in golf ball with that share growing steadily over time, a leader in technology and innovation. And the space benefits from strong golf market dynamics. Rounds played are up again this year, 1.4%. It's going to be another record year of rounds played. There's been 40% growth in golf participation since 2019, and that number continues to move forward with new entrants continuing to come into the sport and the market itself is strong this year, up mid-single digits based on Datatech results. Going to the second point, with this transaction, the company will receive approximately $770 million in cash, and that is a net number. So it's net of any deal fees and working capital adjustments that we're forecasting at this point in time. And that will result in the company having approximately zero net debt. With that, we'll work with our Board to determine the long-term capital structure, one that I'd expect to be fairly conservative and which will also include a significant repayment of that debt, along with a meaningful program to return capital to shareholders. And then by way of example, if we had a long-term net leverage ratio of 1 to 2 net debt to EBITDA, we would be in the position to return somewhere in the neighborhood of $200 million to $400 million of capital to shareholders, along with a significant repayment of debt. And we'll provide more specifics on this in the new year, but we're obviously excited about it, and it positions the company very strongly. And then lastly, on the transaction and its structure, we're partnering with Leonard Green, which is, we think, an ideal partner. They have a lot of expertise in the space. They will have 60% share. Callaway will retain 40% minority interest. But what I think is important for people to understand with this, and it obviously fits with that first point where we talked about going back to being a pure play, we will have no operational role in Topgolf post close of the transaction. All of the DLF and VLF obligations, essentially venue debt, if you would, will go with Topgolf. Most of the finance leases and operating leases that show up on our balance sheet are associated with Topgolf as well. That will go with Topgolf. And there's no recourse or liability back to Callaway nor will it show up on our balance sheet. There are no capital call obligations. We will have some streamlined financial reporting, but this is truly a separate business, both businesses independent. Callaway will have a preferred marketing agreement, though, that allow us to remain the exclusive golf equipment partner for Topgolf. And as I think people know, Topgolf is a dominant player in off-course golf. It reaches more than 2/3 of all golfers annually, and it provides a massive new on-ramp for new golfers. So there will be a branding long-term benefit for the Callaway business that will be sustained post the transaction. It's a minority investment. It does provide Callaway with just potential future upside. So we -- and we do anticipate holding that for probably 4 to 5 years. That is the normal type of holding period that private equity would expect. We do have the right to sell after 2 years, but the probably best thinking would be a 4- to 5-year time line. The right way to think about this is upside potential without any operating responsibility or recourse or liability on the obligations or debt of Topgolf. And Randy, we think it's an exciting and terrific transaction and sets up next phase for both companies, both of which I believe strongly in. And I'll turn it back to you to see if you have any questions.

Yes, it's great. No, Chip, I think that was very helpful and very clear. Maybe what would be helpful is just give us some perspective of how you want us -- your vision now for the corporation, right? You've obviously made some changes to Topgolf, Jack Wolfskin. Where do you see -- what's the vision for the corporation kind of going forward? And if we're -- you guys -- investors on the line here listening to this or watching this, what are the KPIs you want them to consider or be most focused on as we go forward throughout the next few years?

Well, this Randy puts us back as a pure-play golf equipment company and one that has traditionally been the leader in the space or a leader in the space. Again, we talk about 9 out of the last 11 years, #1 market share position in clubs, strong #2 position in ball and growing, an area where we have a strong track record, an area with excellent market fundamentals right now. And it's energizing to be getting back to being able to focus completely on that business. Clearly, the last 1.5 years has been a complicated period of time for the combined entity as we were evaluating strategic options as we had some operational challenges at Topgolf that we had to fix, and we've made some great progress on that. But the ability to focus all of our time, attention and resources back on the golf business is exciting, and I think will unlock further potential. In addition to the strong market fundamentals, I continue to see excellent opportunity for the business and market share in margin improvement. And we have some opportunity on the corporate spend side as our corporate spend was scaled to accommodate the larger and more complicated business, as we simplify that, we'll have opportunity there as well. It's going to be a low leverage business that has strong, stable free cash flow that should grow over time. And I think investors can look forward to the benefit of that added focus and us delivering on the potential of this business to be the leader in the space that it has been for a long time and to take advantage of it.

Great. And back on Topgolf, we've gotten this question and you answered it partly here and also on your earnings call. But we keep getting the question, why not sell -- why didn't you sell the entire Topgolf business? Just kind of any additional color or repeat what you kind of talked on the earnings call?

Yes, we got that a lot, especially there was a leak that normally not unusual that came out a couple of days before we announced and it talked about a sale of the business and implication is that there might have been a full sale of the business. And we evaluated all options over time, Randy. And we were open for whatever was deemed to be the best interest of shareholders. And so at the time that we made this decision, we didn't have an actionable opportunity to sell the business at a comparable value. And so when we made this decision, we essentially had to make the decision on this transaction versus we knew we had an actionable spin or we believe we had an actionable spin, but that it could occur mid next year at the most likely earliest opportunity. And this transaction had advantages over that relative to speed and certainty. And it achieved our 2 primary objectives very elegantly. Our 2 primary objectives were to get back to being a pure-play golf equipment company, separate the businesses as both were well positioned for future because we believe in both businesses. And make sure that both businesses are well capitalized. But on the Callaway Golf side, we obviously are benefiting from a significant infusion of cash with this transaction that gets us to approximately zero net debt. So outstanding financial position that is a benefit of this. And speed, certainty, all of those functions plus the potential upside option with the retained stake led us to make the decision at this point to take this specific opportunity, which we do think is an excellent one for shareholders, and we couldn't be more excited about it.

That's very clear. Look, you've been leading the business, I think, for 13 years now. And if you think about all the presentations, the earnings calls, the investor conversations you've had over the years, what do you think is the most underappreciated aspect about your business that investors need to be focused on?

Yes. There's 2 that come to mind, Randy, on that. And one is just how strong this brand is. I mean I remember when I got here and some time ago now, 2012. And at that time, we had about half the market share we have now. We were losing money, and candidly, I joke if it was a fight, they'd have to stop it because we were going to die. And yet I was telling people on planes and everything about my new opportunity, and they're like, wow, you're going to Callaway. That's awesome. They're amazing, right? The brand is just that strong and has been for a long time. And now we've invested over the last 10-plus years significantly in that. Our R&D capabilities are even stronger, our supply chain, distribution strength, lots of different elements. So a great brand that's been well attended to now. And the second key point that's I think, underappreciated is how different the golf industry and business is today than it was 10 years ago. Golf has never been more relevant and significant across our society. It has significantly changed over the last 10 years. The business and industry is bigger. It's reaching more people. It has structural growth associated with off-course, which is providing a new on-ramp. It's larger than on-course golf. It's adding new venues and new sites continuously. Back when I grew up, Randy, I played golf, but the cool kids didn't. And now all of the athletes play. LeBron James is playing, Steph Curry, Jaylin Hertz, the musicians play. Our kids think golf is cool. I mean these are fundamental changes that are going on in and around the sport. And just in scale, it's 40% to 45% bigger business now with higher structural growth. So those were the 2 things that jump to mind.

So maybe double-click on that a little bit. When I think about the last 10 to 20 years and the next 10 to 20 years, kind of maybe give us some more perspective on where do you think things have changed because we used to have too much -- too many courses, too many equipment vendors. You came from, I believe, Adams back in the day?

Yes.

So maybe kind of give us that teaching lesson because there's probably a lot of people on this call that aren't familiar with what has changed beyond the sport is in the mainstream, I guess, you'd say, is what you just commented on and just bigger. Just give us that -- more of that flavor of what happened then, where we are today and then kind of where are we going over the next 10 to 20 years, in your opinion?

Sure. In the golf for -- golf had a Tiger boom when Tiger entered it. But that was a short-lived boom, and it was almost a boom bust. It went up quickly and then retreated quickly. And there wasn't any structural change around it that supported it. And although Tiger amazing and created a ton of interest around the game, it wasn't yet where we had the cultural relevance and breadth of it that we have now. During that time period, the golf business was a low growth or no growth business, candidly. We had to round up to get to flat. And so it was essentially a market share game. Over -- in that time period, there were a bunch of second-tier manufacturers that had significant share. And as you mentioned, prior to Callaway, I was -- I ran one of those, Adams Golf, and we had a nice small but successful business. Over the last 15 years or so, those second-tier companies have all but gone away. And the larger companies have consolidated share. Now almost a little over 80% of the market share is controlled by the big 4. And it kind of makes sense because some of the changes that have happened have made it more challenging and difficult to continue to innovate, to continue to distribute your product. It really takes scale and skill and complexity. As we look forward, Randy, I see tons of opportunity continuing. Obviously, we've mentioned how much the game, the sport has changed, how significantly stronger the current position is of golf in general. But it's going to continue to take scale, complexity of resources to take advantage of that. To make product that is truly differentiated is harder and harder. We are using AI and software engineers. We're leveraging global supply chains. The frequency of interruptions in those supply changes and change is higher and more acute than ever. And I assume that's going to continue. We're constantly dealing with unforeseen changes, swings in foreign exchange, et cetera, and you just have to have the skill and resources to do that and continue to innovate. And it's not going to be easy to innovate. But we see lots of opportunity there as well, but it's going to require a lot of skill and resources to take advantage.

Super helpful. You've made some changes with getting rid of Jack Wolfskin, obviously, get rid of a majority stake in Topgolf. When you look at the portfolio today, what do you -- how do you think about that? Are you rightsized for where you want to be? Do you have any other considerations of potentially changing the portfolio further? Kind of give us some thoughts on just how you think about the business high level.

Well, Randy, if we haven't -- if we've proven nothing else over the last year, I think we've proven that we are open to looking at our portfolio and making the changes that make sense to drive shareholder value in a stronger, more focused business going forward. So proud of that track record, and we've put action where our words are. If we look at our portfolio today, we've got our iconic -- it's pure golf, and it is, I think, in a really strong position. The portfolio provides both scale and synergy across it. And it fits with the makeup of what successful scaled golf equipment companies need. We'll have just over -- on a trailing 12 basis, a little over $2 billion in revenue and brands that fit together well, feed off each other. So we feel really good about where we are right now.

Got it. And on the earnings call, I guess a question was asked about pricing. And in a world where people really kind of focused on what is in different subsectors of consumer and just general industry, where do you see pricing? I know you have this mantra about the product needs to be different, special. Just give us your thoughts on just what is -- what do you see out there for not just your products, but the industry? Just any kind of thoughts on pricing would be helpful.

Yes. I've kind of got a little bit of a PhD in that over the last couple of years as well, Randy, as I've had such a diversified portfolio and I've watched the need for value and the segmentation of consumers, you really talk about this barbell economy and these different things going on out there. And boy, can you see it? The moderate income consumer is stretched. But in the higher income demographics and particularly in an area like golf where it's a passion play, it's just less price sensitive. And you've seen that -- I've seen that over time with the golf space. If you look at just even mild recessions back through time, you can't even see them in the data on golf. It doesn't really have an impact. What has an impact is weather and how you differentiate the product and strengthen the brand. So I do think that there is more room in price within golf, but you have to have the product differentiated. I've watched driver pricing go from $300 a club to, last year, our driver was $600. And I've seen the consumer accept that, particularly when you deliver what we call a DSPD or a pleasingly different demonstrably superior product. We just launched a new putter, Tri-Hot. It's a really cool putter. Randy, it's $550 at retail. And that seems like a lot for putter. It's selling beautifully because the product is just gorgeous and it has a unique selling proposition with how we designed it. So within our space, we think that there is room for pricing provided that we deliver the product with enough differentiation.

Sounds like a great putter. I got to get it past my wife, the Sheriff. We'll see what happens.

I understand. Well, Christmas is coming, right? buddy, shop.

We'll see. We'll see. How about the idea of we've seen over the years the move towards customization. Maybe give us a flavor of where are we right now as an industry or perhaps your company in particular, as a percent of total volume? And where does that go? And what can that do to help potentially on margin, working capital? Just what are your thoughts there on that customization angle of the industry and your company?

Customization has been a long-term trend, and I think it's absolutely going to continue, Randy, that we're going to move towards more customizable product, new approaches, techniques. We're investing further in that. We just started a new role in our company where we've got a Senior Director of Product customization and fitting techniques. This individual has a PhD in biomechanics as well, came out of our Advance Research group, but it gives you an idea of how complicated and more wholesome the approach has to be to innovate going forward. And custom fitting, customization is going to be part of that. We believe it will be positive for gross margins because it will have more opportunity to differentiate and also less risk of field inventories that could get out of whack, probably neutral for working capital. But most importantly, it's a benefit for the consumer and for our ability to innovate over time. So it's something we're investing in and absolutely going to be a trend we see going forward.

Probably helps pricing power as well.

It certainly will. If you can go in there and make it specific for that individual, it's all that more exciting.

Great. Well, those are the questions I had. I have -- I guess what we want to do is have the audience, if you have a question, please, I guess, raise your hand and we'll get your question through. In the meantime, we did have a question come in. And if you don't want to ask a question on the web, send me an e-mail. Again, it's [email protected]. So we have one question here. Person asks, in a Pro V1 launch year, it seems like Callaway and TaylorMade held their ground on, I guess, balls. So give us your perspective of how -- what that means for your market share and your thoughts on market share as you head into 2026.

Sure. Yes, that is accurate, first of all. We did hold our own on share this year, which in a Pro V1 launch year is good performance. And if you look at our share over time, and I think we've published some of this data in golf ball, it's a little bit of a sawtooth, but it's a sawtooth that is up and to the right. So we have steadily grown market share in golf ball over an extended period now, probably 8 years and the #2 position. And that's what I think is the right approach and the right opportunity in golf ball. It's going to be a little bit of ground at a time and the fact that we were able to hold our share this year was a strong sign for our brand, our performance. I know in both August and September, I believe we had record shares in those 2 months, which is another good sign. So you get away from the launch period of a competitor brand, get into the late in the season, August being kind of heat of the summer and where we're resonating and having that stronger share position, excellent sign for the brand.

Any little sneak peeks on the ball for next year? Do you want to give us a little color?

Well, next year is our premium ball launch. So stay tuned, and we're excited about it. We've invested over $100 million in our Chicopee Ball Facility over the last decade. Randy, it is a world-class facility. We think we'll have an advantage in our ability to drive innovation and performance coming out of that facility. And obviously, having a scaled facility like that in the U.S. in today's supply chain environment, also an advantage.

It sounds like you're going to have to allow us to host people there, too.

Yes, that one is fun. That is a very cool plan.

All right. We have another question that came in on e-mail. And again, everyone, if you want to send the e-mails in. So the person asks, MODG laid off 300 people in, I guess, November. Could Chip talk more about potential OpEx cost savings for the base business ex Topgolf because MODG's guidance implies 10% adjusted EBITDA margins versus Acushnet at 16% adjusted EBITDA margin. Can they close this gap?

Yes. First of all, it is true, and we did discuss that we did some cutbacks. Obviously, we hate having to do that. But in today's environment, right, we looked forward and with the tariff impact on the business, we have to do some cost reductions and get ahead of this game. So we took action in Q3 associated with that. And that will certainly help us mitigate the tariff impact should what's currently on the books be the final answer, which we don't know for a fact, but we're playing as if this is the final answer. And we're optimistic that, yes, we will be able to continue to drive margin improvement. If you look at our margin improvement this year-to-date, excluding the tariff impact, we've had significant success in driving improved margin. Now that's been offset in many regards with the tariff. But we're going to continue on that journey, and we think we have some upside there.

And I guess another question came in and said, has management talked about the pro forma EBITDA target for the stand-alone golf business post the Topgolf transaction?

No, not yet, Randy. We're -- I'm obviously giving you some flavor of the direction, but not the specific at this point. This is all brand new for us. We're energized. We're confident that it's going to be a good occurrence for all stakeholders and both of these businesses have got bright futures, but no specific targets yet.

Got it. Okay. But I guess the trend is your friend. It sounds like it's going higher.

Yes.

Got it. Okay. Katie, are there questions on the raise hand function or anywhere that we -- I can't see. Just want to check in on that. I guess that's a no. Another question came in around driver trends. You talked about $300 to $600 in price point change. Just what do you see ahead for your driver business? Where do you think share can go? What do you see out there versus the other players?

This year, we had a year where all 4 big OEMs launched drivers at the same time. That doesn't happen every year. But Titleist, Ping, TaylorMade and Callaway all had major launches coming into this year. As we normally do, we competed very effectively. Our driver share remains quite strong. Our driver Elyte was named MyGolfSpy's most wanted driver this year. It recently won Golf Digest Award for spin robustness, just an outstanding product, and we got strength there. Next year should be a more favorable year in terms of launch cadence. And we're also excited about what we're bringing, which we always are, but we won't spoil the surprise on that one. But we've been investing in the R&D front and looking forward to what we have coming next year.

Got it. Great. Another one here is you've talked about in the past on how you use AI to help with your different products. How have you specifically been doing this with your drivers, your irons and your ball business? Can you elaborate?

Sure. Yes. We're -- Randy, I think it's not an exaggeration at all to say we're the leader in this. We were first to use AI. And to the best of my knowledge, we use AI in a more meaningful manner in the design of golf equipment than anybody else on the planet. And in the -- it's a simulation exercise where we use the machine learning to model and we're able to run these iterations in the hundreds of thousands as opposed to in the hundreds. It allows us to come up with new approaches such as these AI face designs that cause micro deflections. And if you look at -- I mentioned an advantage that Golf Digest says we have and our internal testing supports in spin robustness on the driver. Well, that comes from these micro deflections and that comes from AI. And there is just no other way to come at some of the innovation and approaches. That's how the world keeps changing. I've been around long enough where I've watched innovation be as simple as, "Hey, we have a room full of mechanical engineers, to then metallurgists, to aerodynamicists, to software engineers and AI experts now." And it's going to continue to evolve. And we have to have that type of skill set globally.

Got it. Another one here. Earlier in the call and one of the slides referenced $200 million of adjusted EBITDA for pro forma Callaway to calculate the leverage and excess capital. Is that just for the 2025 guidance?

Yes, that's the 2025 guidance we're referencing.

Got it. And then the person follows up and asks, if so, which you said yes, if we add another $35 million to $40 million of tariff headwinds, then that would imply $160 million to $165 million of run rate adjusted EBITDA. So should we view that as the base level for the company to grow off of? Or is there a significant amount of corporate costs that can be cut or go with Topgolf. What is the $125 million related to because that seems really high for a company that will only have $2 billion in revenue.

Okay. There's a lot there. And I think we're really looking for our 2026 guide there, and we're probably going to table most of that until 2026. So we're -- stay tuned to February, and we're going to give you a full guide or at least we anticipate giving a full guide at that point. I don't think it's reasonable just to do the subtraction. We've said we're going to mitigate some portion of the tariff impact. We've also been direct that we are unlikely to be able to mitigate all of the tariff impact in the first year or in the short term. But we're also working on the corporate spend. So we'll see how all these things come together. Tariffs are really the one headwind that the golf equipment has right now, the whole space with everything else feeling really strong. And we're going to kind of add this up and look at the pluses and minuses and get back to you early next year with how that all adds up. Beyond that one headwind, we feel really good about the direction.

Got it. And then a separate person had a follow-up and said, is their corporate, I guess, costs in that $200 million EBITDA number?

Yes. All of the "TCB corporate costs are in there." So in essence, probably over-allocated relative to the long run because when we scaled from the pure-play business that we're returning to, in fact, we're returning to even a more simplified pure-play because it doesn't include Jack Wolfskin. We -- the way we ran our financials, we separated Topgolf and then the residual business is what is in that $200 million, and it had all of the corporate expense.

Great. Another one was asked on a follow-up from the ball conversation. The question is, what has led to your view of gaining that massive market share to 23% from 15% about a decade ago or 5 years ago. How do you keep growing that share?

It's a lot of little things. Obviously, terrific brand. We started with a differentiated product. We gained share when we launched Chrome Soft. So a SoftFast Core and a ball that felt and behaved differently. And we started that journey. Then we invested in the manufacturing facility to make sure we could make world-class product and now candidly, I think, product that is best-in-class. We have invested and grown our distribution capabilities. We are a very strong player in the green grass channel. It's actually our biggest channel, and that's incredibly important for golf ball. We've invested in our brand. And you see these things kind of culminate over time in that golf ball market share, and we think there's future potential still.

The Advent calendar looks pretty good, too.

That is -- I've obviously put that there, but those are the kind of other cool things that we've done. So we did Truvis. We did Triple Track. We do lots of one-off drops. We have Shark golf balls. We have Dinosaur golf balls. I mean that stuff is just fun, Randy. And it's added -- we also have Xander winning major championships and Jeeno Thitikul, the #1 player in the world as a women's player, winning all of her events, including setting a new scoring record. So we're both purist, world's best and also just fun. And that's all part of our brand and how we approach this market. And this Advent calendar, which is both goofy and totally fun selling like hot cakes. Every golf ball you open has a different message on it, and it's just a great gift idea for the holidays.

I'll have to put my order after the call. It's a good idea.

Yes, you have to call -- I think you might have to call Katina because I think they're selling out.

All right, Katina. Let me -- let my order go...

Yes, hook them up.

All right. That's great. Question here is on, I guess, LIV and PGA, what happens there? And then can you give us some update on regulations or pending regulations? And what does that mean for the industry ahead?

Sure. LIV and PGA, Lord knows. So I don't have any great insight on that. Both are apparently ongoing. And are finding their own lane, I guess. PGA Tour had a great year this year. Ratings were up, fits with the overall theme of golf. LIV is finding its own space and carving out its own niche. And I do -- I have no idea if those 2 will ever get together or they will coexist. So we're watching that one as well, and it's just -- one of the things that we've seen over the last several years, 6 or 7 years, Randy, that is a mega trend is more money coming into golf, whether it's your local golf course, whether it's TGL, whether it's Topgolf venues or Five Iron locations or LIV, is the game is attracting a lot of capital and investment. And obviously, that's supporting its overall fundamental growth. The next question was on...

On the regulations.

Yes, regulations. So that is the R&A and the USGA have announced a definitive decision to change the golf ball basically, for lack of a more elegant way of saying it, to roll back the golf ball, which would be effective for elite players or tournament players in '28 and the general public in '30. And there's still a little bit of debate within the industry on that. And so we'll stay tuned. But we're assuming that's going to happen. They worked with us. We've been collaborative with them on that process. We already have prototypes under development that would fit that. And we're going to take it as an opportunity. There's -- we are one of the obviously major ball manufacturers, and we spend a fair amount on R&D. So as they make these changes, it creates an opportunity for us to further differentiate. And so that's how we're approaching it.

Got it. We've reached kind of time here. So maybe it would be helpful is just kind of give us -- are there any topics that we didn't kind of cover or the clients asked that you think is important for us to kind of think through?

Randy, I think we're pretty comprehensive right now. We couldn't be more excited about the future of both of these businesses going forward. I'm personally excited about going back to running the pure-play Callaway golf company. The industry, the world has changed so much. But this is a great brand, a great company with a terrific future, and we're excited for this next chapter.

Yes. And look, I think it's personally exciting to see the company get back to the pure-play considering what you did for the company when you first got there. You mentioned they were losing money, off track. So kudos to you for really kind of driving that business to what it is today. And I think everyone is really excited about what's ahead for the pure-play of Callaway.

I know we are, Randy.

Great. Well, Chip, really appreciate it. Everybody, I appreciate it for listening in. Katina, Andrius, thank you for setting this up with us. We appreciate the opportunity. And with everyone -- I hope everyone has a great and happy and healthy Thanksgiving holiday, and we'll be back to talk soon. Give us a call, we'll happily talk about Callaway. Bye, everybody.

Thanks. Happy Thanksgiving.

Happy Thanksgiving.