In a conference call last week with Wall Street analysts, Topgolf Callaway Brands (MODG: NYSE) President/CEO played his cards to his vest in regards to the separation of the two companies, basically saying only that “all options are still on the table and we’re making steady progress.’’ The company announced plans to separate the companies this past September.
But the company’s 2024 Annual Report, which dropped today, was a bit more forthcoming, while at the same time saying that nothing is set in stone.
The Report, for example, stated that the company a spinoff of Topgolf into a stand-alone public company “is the most likely’’ separation path.
“We will continue to evaluate other options for separation in order to maximize shareholder value,’’ the Report said. “We expect to complete the spin-off of Topgolf in the second half of 2025, but there can be no assurance regarding the ultimate timing, terms, or form of the separation, or that the separation will ultimately occur.’’
In addition, the Report said, the separation “will allow each company to more effectively pursue its distinct operating priorities and strategies and enable management of both companies to focus on unique opportunities for long-term growth and profitability. The companies’ separate management teams will also be able to focus on executing each company’s differing strategic plans without diverting attention from the other businesses.”
Callaway Golf closed on a nearly $2 billion merger with Topgolf in March 2021 and has watched its stock price fall from the mid-30s at the time of the merger to last week’s 52-week low of $6.11. The stock today was trading as low as $6.23.
Topgolf Callaway Brands in Q4 of 2024 took a $1.45 billion loss, primarily because in Q4, of a non cash accounting charge related to the impairment of the Topgolf goodwill and intangible assets.
Topgolf Callaway Brands announced plans to separate the companies this past September.