Cost Reduction Initiatives

3 Months Ended

Mar. 31, 2014

Restructuring and Related Activities [Abstract]

Note 2. Cost Reduction Initiatives

In December 2013, the Company completed its cost reduction initiatives (the “Cost Reduction Initiatives”), which streamlined and simplified the Company’s organizational structure and changed the manner in which the Company approaches and operates its business. These initiatives included (i) a reduction in workforce that impacted all regions and levels of the organization in addition to other transition costs; (ii) greater focus on the Company’s core product lines including licensing to third parties the rights to develop, manufacture and distribute certain non-core product lines in the U.S. (e.g. apparel and footwear); (iii) transitioning the Company’s GPS device business to a third-party based model; and (iv) the reorganization of the Company’s golf ball manufacturing supply chain, including the sale and lease-back of the Company’s ball manufacturing facility in Chicopee, Massachusetts (Note 6).

These initiatives resulted in annualized pre-tax savings of approximately $60,000,000. In the aggregate through December 31, 2013, the Company recognized total charges of $70,600,000 in connection with these initiatives, of which approximately two-thirds resulted in non-cash charges.

During the three months ended March 31, 2013, the Company recognized total cash and non-cash charges of $3,509,000 in connection with these initiatives, of which $2,282,000 and $1,227,000 were recognized in cost of sales and operating expenses, respectively. Non-cash charges recognized during the first quarter of 2013 included lower of cost or market adjustments to inventory as well as inventory write-offs related to the Company's golf apparel, golf footwear and GPS device businesses. The Company did not recognize any charges in connection with the Cost Reduction Initiatives during the three months ended March 31, 2014. Amounts payable as of March 31, 2014 included ongoing severance payments and transition costs in connection with the restructuring of the Company's distribution facility in Canada. See Note 16 for charges recognized by the Company’s operating segments.

The table below depicts the activity and liability balances recorded as part of the Cost Reduction Initiatives (in thousands) as of March 31, 2014 and 2013. Amounts payable as of March 31, 2014 and December 31, 2013 are included in accrued employee compensation and benefits and accounts payable and accrued expenses in the accompanying consolidated condensed balance sheets.



	Cost Reduction Initiatives
	Workforce Reductions			Transition Costs			Asset Write-offs		Total
Three months ended March 31, 2013
Restructuring payable balance, December 31, 2012	$	4,531		$	591		$	—	$	5,122
Charges to cost and expense	1,091			2,418			—		3,509
Non-cash items	—			(1,699		)	—		(1,699		)
Cash payments	(3,547		)	(717		)	—		(4,264		)
Restructuring payable balance, March 31, 2013	$	2,075		$	593		$	—	$	2,668

Three months ended March 31, 2014
Restructuring payable balance, December 31, 2013	$	806		$	2,501		$	—	$	3,307
Cash payments	(476		)	(1,355		)	—		(1,831		)
Restructuring payable balance, March 31, 2014	$	330		$	1,146		$	—	$	1,476

- Definition

The entire disclosure for restructuring and related activities. Description of restructuring activities such as exit and disposal activities, include facts and circumstances leading to the plan, the expected plan completion date, the major types of costs associated with the plan activities, total expected costs, the accrual balance at the end of the period, and the periods over which the remaining accrual will be settled.

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