Originally created 07/01/03

Top-Flite Golf files for bankruptcy, plans sale to club maker Callaway



SPRINGFIELD, Mass. -- The Top-Flite Golf Co., the world's largest golf ball producer, is filing for bankruptcy and plans to sell its assets to club maker Callaway Golf.

Top-Flite CEO Jim Craigie said Monday the company's $250 million in sales in 2002 were being crushed by its $530 million debt in a market that was too competitive. Under the deal, which needs government approval, Callaway would buy Top-Flite for $125 million, free and clear of debt.

"You have a great marriage between the companies," Craigie said. "We're a top golf ball company, they're a top golf club company. We've got technology that they could benefit from in the golf ball industry, and we can benefit from the financial strength they can bring to our company."

Top-Flite, a private company, was formerly Spalding Sports Worldwide. The name was changed after the company sold the Spalding brand and its entire line of inflatable balls to athletic wear maker Russell Corp. in April.

Craigie said he doesn't expect any interruption in supply, production or distribution of Top-Flite golf products. He said Callaway plans to continue making Top-Flite, Ben Hogan and Strata golf products, which account for about 70 percent of Top-Flite's sales.

He said Callaway, which is headquartered in Carlsbad, Calif., intends to keep the Chicopee-based company in the greater Springfield area. He said no decisions about layoffs will be made until the sale is finalized, probably within the next three months.

"It's too early to speculate on the operational specifics," said Callaway vice president Larry Dorman.

Callaway, which reported earnings of $792 million in 2002, is the world's largest producer of golf clubs, Dorman said. He said 90 percent of the company's total sales are in its high-end golf clubs; the balance comes from golf balls.

Dorman said Callaway will continue producing Top-Flite clubs, allowing the company to offer a more affordable line of products.

Callaway's stock dropped 12 cents Monday, to close at $13.22 per share on the New York Stock Exchange.