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Business Combinations (Notes) | 12 Months Ended
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Dec. 31, 2018
Business Combinations [Abstract] |
Business Combination Disclosure [Text Block] | Note 4. Business Combinations During 2017, the Company completed the acquisitions of OGIO and TravisMathew. The purchase price of each acquisition was allocated to the underlying assets acquired and liabilities assumed based upon their estimated fair values as of the date of acquisition in accordance with ASC Topic 820. The excess between the purchase price and the fair value of the net identifiable tangible and intangible assets acquired and liabilities assumed was allocated to goodwill. The Company determined the estimated fair values after review and consideration of relevant information, including discounted cash flows, quoted market prices and estimates made by management. The Company may retrospectively adjust the fair value of the identifiable assets acquired and the liabilities assumed, as necessary, during the measurement period of up to one year from the acquisition date, to reflect new information about circumstances existing at the acquisition date affecting the measurement of those amounts at that date, and any additional assets or liabilities existing at that date. Valuations of acquired intangible assets and inventory are subject to fair value measurements that were based primarily on significant inputs not observable in the market and thus represent Level 3 measurements (see Note 16). Both acquisitions were treated as asset purchases for income tax purposes and, as such, the Company expects to deduct all of the intangible assets, including goodwill, from taxable income over time. Acquisition of OGIO International, Inc. In January 2017, the Company acquired all of the outstanding shares of capital stock of OGIO, a leading manufacturer of high quality bags, accessories and apparel in the golf and lifestyle categories, in a cash transaction pursuant to the terms of a Share Purchase Agreement, by and among the Company, OGIO, and each of the shareholders and option holders of OGIO. The acquired furniture, fixtures, office equipment, leasehold improvements, computer equipment and warehouse equipment were all valued at their estimated replacement cost, which the Company determined approximated the net book value of the assets on the date of the acquisition. Inventory was valued using the net realizable value approach, which was based on the estimated selling price in the ordinary course of business less reasonable disposal costs and profit on the disposal effort. The customer and distributor relationships were valued under the income approach based on the present value of future earnings. The trade name was valued under the royalty savings income approach method, which is equal to the present value of the after-tax royalty savings attributable to owning the trade name as opposed to paying a third party for its use. For this valuation, the Company used a royalty rate of 7.5%, which is reflective of royalty rates paid in market transactions, and a discount rate of 14.0% on the future cash flows generated by the net after-tax savings. Goodwill arising from the acquisition consists largely of the synergies expected from combining the operations of the Company and OGIO. For segment reporting purposes, goodwill is reported in the Gear, Accessories and Other operating segment. The total purchase price was valued at $65,951,000. The Company incurred transaction costs of approximately $3,052,000, of which $1,805,000 was recognized in general and administrative expenses during the year ended December 31, 2017. The remainder was recognized in 2016. The following table summarizes the fair values of the assets acquired and liabilities assumed as of the acquisition date based on the purchase price allocation (in thousands):
| At January 11, 2017
Assets Acquired |  |
Cash |  | $ | 8,061 |
Accounts receivable |  | 7,696 |
Inventory |  | 7,092 |
Other current assets |  | 328 |
Property and equipment |  | 2,369 |
Intangibles - trade name |  | 49,700 |
Intangibles - customer & distributor relationships |  | 1,500 |
Intangibles - non-compete agreements |  | 150 |
Goodwill |  | 5,885 |
Total assets acquired |  | 82,781 |
Liabilities Assumed |  |
Accounts Payable and accrued liabilities |  | 16,830 |
Net assets acquired |  | $ | 65,951 |
Acquisition of TravisMathew, LLC In August 2017, the Company acquired TravisMathew, a golf and lifestyle apparel company in an all-cash transaction pursuant to the terms of an Agreement and Plan of Merger, by and among the Company, TravisMathew, OTP LLC, a California limited liability company and wholly-owned subsidiary of the Company (“Merger Sub”), and a representative of the equity holders of TravisMathew. The Company acquired TravisMathew by way of a merger of Merger Sub with and into TravisMathew, with TravisMathew surviving as a wholly-owned subsidiary of the Company. The primary reason for this acquisition was to enhance the Company's presence in golf while also providing a platform for future growth in the lifestyle category. The acquired furniture, fixtures, office equipment, leasehold improvements, computer equipment and warehouse equipment were all valued at their estimated replacement cost, which the Company determined approximated the net book value of the assets on the date of the acquisition. Inventory was valued using the net realizable value approach, which was based on the estimated selling price in the ordinary course of business less reasonable disposal costs and profit on the disposal effort. The licensing agreement was valued under the income approach based on the projected royalty income from the distributors. The customer and distributor relationships were valued under the income approach based on the present value of future earnings. The trade name was valued under the royalty savings income approach method, which is equal to the present value of the after-tax royalty savings attributable to owning the trade name as opposed to paying a third party for its use. For this valuation, the Company used a royalty rate of 8.0%, which is reflective of royalty rates paid in market transactions, and a discount rate of 11.0% on the future cash flows generated by the net after-tax savings. Goodwill associated with this acquisition is related to the operational synergies the Company expects to realize in future periods. For segment reporting purposes, goodwill is reported in the Gear, Accessories and Other operating segment. The total purchase price was valued at $124,578,000. In connection with the acquisition, during the year ended December 31, 2017, the Company recognized transaction costs of approximately $2,521,000 in general and administrative expenses. The following table summarizes the preliminary estimated fair values of the assets acquired and liabilities assumed as of the acquisition date based on the purchase price allocation (in thousands):
| At August 17, 2017
Assets Acquired |  |
Cash |  | $ | 663 |
Accounts receivable |  | 9,715 |
Inventory |  | 11,909 |
Other current assets |  | 549 |
Property and equipment |  | 4,327 |
Other assets |  | 117 |
Intangibles - trade name |  | 78,400 |
Intangibles - licensing agreement |  | 1,100 |
Intangibles - customer & distributor relationships |  | 4,450 |
Intangibles - non-compete agreements |  | 600 |
Goodwill |  | 23,748 |
Total assets acquired |  | 135,578 |
Liabilities Assumed |  |
Accounts Payable and accrued liabilities |  | 11,000 |
Net assets acquired |  | $ | 124,578 |
Supplemental Pro-Forma Information (Unaudited) The following table presents supplemental pro-forma net sales and net income for the years ended December 31, 2017 and 2016 for the OGIO and TravisMathew acquisitions as if they had occurred on January 1, 2016 and were consolidated with the Company as of January 1, 2016. These amounts were calculated after applying the Company's accounting policies and were based upon available information at the time. For this analysis, the Company assumed that costs associated with the acquisitions, including the amortization of intangible assets and the step-up of inventory, as well as the tax effect on those costs, were recognized as of January 1, 2016. Pre-acquisition net sales and net income amounts for OGIO and TravisMathew were derived from the books and records of OGIO and TravisMathew prepared prior to the respective acquisition and are presented for informational purposes only and do not purport to be indicative of the results of future operations or of the results that would have occurred had the acquisition taken place as of the dates noted below. The Company's net sales and net income for the year ended December 31, 2018 include a full year of results for both OGIO and TravisMathew and are therefore not presented in the pro-forma information below.
| Years Ended December 31,
| 2017 |  | 2016
(in thousands) |  |  |
Net sales | $ | 1,086,593 |  |  | $ | 964,514 |
Net income attributable to Callaway Golf Company | $ | 52,514 |  |  | $ | 188,117 |
For the year ended December 31, 2017, the Company's consolidated net sales included $66,670,000 attributable to OGIO and TravisMathew, and the Company's consolidated net income included a net loss of $1,721,000 related to TravisMathew. The Company integrated the OGIO brand into its consolidated operations as of December 31, 2017, therefore net income information related to OGIO could not be determined. Acquisition of JW Stargazer Holding GmbH In January 2019, the Company completed the acquisition of JW Stargazer Holding GmbH, the owner of the international, premium outdoor apparel, footwear and equipment brand, Jack Wolfskin for €460,000,000 or approximately $525,000,000, subject to working capital adjustments. The Company financed the acquisition with a Term Loan B facility in the aggregate principal amount of $480,000,000 (see Note 5). Jack Wolfskin is an international, premium outdoor apparel, footwear and equipment brand. Jack Wolfskin designs premium products targeted at the active outdoor and urban outdoor customer categories. This acquisition is expected to further enhance the Company's lifestyle category and provide a platform for future growth in the active outdoor and urban outdoor categories, which the Company believes are complimentary to its portfolio of brands and product capabilities. In connection with the acquisition, during the year ended December 31, 2018, the Company recognized transaction costs of approximately $3,661,000 in general and administrative expenses, and an unrealized gain of $4,409,000 in other income (expense) from the re-measurement of a foreign currency forward contract that was put in place to mitigate the risk of foreign currency fluctuations on the purchase price, which was denominated in Euros. In January 2019, the Company realized a $3,215,000 net loss upon the settlement of this contract. Due to the timing of this acquisition, it was impracticable for the Company to compile pro-forma financial information and preliminary purchase accounting estimates in accordance with ASC 805 "Business Combinations."

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- Definition The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable). + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -URI http://asc.fasb.org/topic&trid=2303972 + Details
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