Drive Shack, backed by TaylorMade, this spring is set to debut its first golf/entertainment facility in Orlando with a three-story driving range that, like Topgolf, will offer a bar and restaurant experience. Kyle Arnold. Non-recurring costs and non-cash charges, before taxes (1). However, once completed, management estimates that on average a typical venue generates $17 million in annual revenue and $5 million in adjusted EBITDA. Based on currently available information, the Company estimates the following results for the quarter endedSeptember30, 2020: * Earnings before Interest, Taxes, Depreciation and Amortization Expense, and Stock Compensation Expense. I have no business relationship with any company whose stock is mentioned in this article. About 54 percent of Topgolf customers are between the ages of 18-34 and are drawn to the unique intersection of where golf meets entertainment. Topgolf has been growing like crazy the last several years, with the Dallas-based company adding locations around the country. Based on industry valuations and the anticipated growth in venues, I believe the Topgolf business alone will be worth at least $4.3 billion by 2025. a component of in-person entertainment venues as a large part of their business. Myrtle Beach, South CarolinaPlaces to Play. With over 100 different venues, its hard to narrow down just a few but here are some of the top rated by Golf Digest and Golf Magazine.Dunes Golf and Beach Club. The Dunes Golf and Beach Club was ranked #54 in Americas Top 100 Greatest public courses in 2019. Caledonia Golf and Fish Club. True Blue Golf Club. The company has a proven ability to innovate to expand its addressable market and capture the potential of games and content on its interconnected platform. or It was a Tuesday and it was packed, Whan remembers. Chip Brewer will continue to lead the combined company as President and Chief Executive Officer. Check out how Callaways annual revenue has responded (Source): Which brings me to my next point Callaway is doubling down on diversification. Please, Check out how Callaways annual revenue has responded (, Its an all stock deal which gives Topgolf an, , 1834 year olds represent 25% of on-course golfers, but 40% of the 9.9 million off-course golfers (i.e. Furthermore, Topgolf will have 70 venues by the end of 2021 with a total of 9 net new venues opened throughout the duration of the year. 2023 Leaders Group. growth prospects of Topgolf makes Callaway one of the most intriguing investment opportunities. I wondered if I could even get a bay.. (4) Represents certain non-recurring costs, including costs associated with the acquisition of Jack Wolfskin. And our climate-controlled bays mean your party will rock on through rain, heat, cold or whatever else Mother Nature throws at you. Callaway already had an exclusive relationship with Topgolf, which put their clubs, merchandise, and apparel in every location worldwide, but you can expect Callaway penetrate that relationship even more. Callaway, Topgolf, and their respective directors and executive officers may be deemed to be participants in the solicitation of proxies from the stockholders of Callaway in connection with the proposed transaction. If you would like to receive it directly in your inbox, subscribe now. The Company provides information about its results excluding interest, taxes, depreciation and amortization expense, and non-cash stock compensation expense. The preliminary estimates presented above are the responsibility of management and have been prepared in good faith on a consistent basis with prior periods. Both our golf equipment and soft goods businesses are recovering more quickly than we expected, and our third quarter projections reflect this momentum. After extensive research and analysis, Zippia's data science team found the following key financial metrics. According to Axios, 1834 year olds represent 25% of on-course golfers, but 40% of the 9.9 million off-course golfers (i.e. You have to continue to reinvest in the experience.. You have 2 All Access articles remaining this month. The venues include golf driving bays that use its ball-tracing technology to make games out of the experience, along with food, music and golf retail. Please disable your ad-blocker and refresh. Topgolf venues overall averaged more than 35,000 customer visits per day last year, with the average customer spending two hours per visit at a venue, according to the company. He's been The News' business editor since 2015. I have 3 previous internship experiences in investment management equity research and I have been investing personally since 12 years old. Overhead can also run high, as Topgolf has about 15,000 full and part-time employees overall, which leads to staffing and training challenges as the company manages growth while focusing on providing a consistent and engaging fan experience. Why did Callaway buy Topgolf? The high degree of interest in the game of golf as well as the past and future growth prospects of Topgolf makes Callaway one of the most intriguing investment opportunities. These selected companies were Dave & Buster's (PLAY), Live Nation (LYV), Drive Shack (DS), Cinemark (CNK), and Disney (DIS) who all have a component of in-person entertainment venues as a large part of their business. Along with the announcement, Callaway released a 30-page presentation giving rare insight into Topgolfs existing ownership structure, financials, and projections. Paul directs the work of an award-winning staff covering business news in the nation's fourth largest metro region. Subscribe to receive our press releases via email: Topgolf Kicking Off 2023 with Opening of Charleston Venue, Pro forma revenue of approximately $2.8 billion based on fiscal year 2019 results that is expected to grow to approximately $3.2 billion by 2022 and at approximately 10% per year in the years following, Pro forma adjusted EBITDAS of $270 million based on fiscal year 2019 results that is expected to grow to approximately $360 million by 2022 and at mid-to-high teens per year in the years following. Register for a free SBJ account to unlock one extra article per month. Attention spans scatter. A recent survey conducted for Topgolf by the National Golf Foundation shows that 23 percent of new golfers started playing after their first Topgolf experience, while 75 percent of non-golfers said they were interested in playing on a traditional course after playing Topgolf. We are the subject of inquiries from the capital market world and our investors would look at it as a way to grow the company and get liquidity. Maintaining our same EBITDA multiple range of 8.20x to 12.75x, the Topgolf business could be worth up to $4.3 billion in total value and $23.02 per share by 2025. Callaway Golf Company (NYSE: ELY) is a premium golf equipment and active lifestyle company with a portfolio of global brands, including Callaway Golf, Odyssey, OGIO, TravisMathew and Jack Wolfskin. 2023 Leaders Group. The replay may be accessed through the Internet at this link. However, once completed, management estimates that on average a typical venue generates $17 million in annual revenue and $5 million in adjusted EBITDA. Dolf Berle will continue to lead the Topgolf business through a transition period following the close of the transaction, at which time he intends to step down to pursue other leadership opportunities. Topgolf has achieved rapid growth and strong customer engagement since its founding in 2000, driven by several platforms, including: Since its inception, Topgolf has created an innovative, tech-inspired twist on the golf driving range experience, turning it into a global entertainment and sports movement. 4 Based on 2022 projections Callaway Preliminary Q3 Results and Business Update, Chip Brewer added: The world is rediscovering golf in a way that has led to a record quarter for our company. People come back, it is a meaningful repeat business, he said. Our recent investments into our e-commerce capabilities have proven particularly valuable, showing strong growth across all of our business segments this year including 108% growth in e-commerce for our soft goods segment in Q3.. Continued access to capital is a major priority if Topgolf is to continue its growth trajectory. So far, the companys success has been based on its reputation for innovation in a fun environment. Brian Lynch I wrote this article myself, and it expresses my own opinions. We use the Golf News Net byline sometimes just to change things up. And it has plans or letters of intent to build another 33 facilities and designs on growing outside the United States through franchising. Upon arriving, he was immediately taken aback. While golf has struggled in recent years with courses closing across the country, the pandemic has actually been a boon as more corporate employees work from home, along with the outdoor atmosphere golfing provides. In addition, investors and stockholders will be able to obtain free copies of the proxy statement/prospectus/consent solicitation and other documents filed with the SEC on Callaways website at https://www.callawaygolf.com (for documents filed with the SEC by Callaway). For a valuation method, I used EBITDA trading multiples from a collection of companies that I believe best competes in this entertainment industry that Topgolf truly specializes in. Any time you have a business that requires that kind of capital investment and real estate, you have to be creative in what is the model for capital maintenance, Hirshland said. Management believes that the presentation of such non-GAAP information, when considered in conjunction with the most directly comparable GAAP information, provides additional useful comparative information for investors in their assessment of the underlying performance of the Company's business with regard to these items. A replay will be made available online approximately three hours following the live call and will remain available through October 27, 2021. personalising content and ads, providing social media features and to Topgolf may also be known as or be related to TopGolf International, Inc., Topgolf, Topgolf Entertainment Group, Topgolf International, Topgolf International Inc and Topgolf International, Inc. Stars and Strikes Family Entertainment Centers, Stars and Strikes Family Entertainment Centers Revenue, Stars and Strikes Family Entertainment Centers Reviews, Stars and Strikes Family Entertainment Centers Careers, Private Equity Round - Topgolf Entertainment Group. Berle will leave after a transition period and Topgolf will continue to operate from its Dallas headquarters. Under the terms of the merger agreement, Callaway will issue approximately 90 million shares of its common stock to the shareholders of Topgolf, excluding Callaway, which currently holds approximately 14% of Topgolfs outstanding shares. Callaway and Topgolf both delivered strong financial results immediately before the COVID pandemic and have since recovered ahead of expectations. Source: Created by Author with data from Yahoo Finance. (2) Represents the non-cash amortization of the debt discount on the convertible notes issued in May 2020. Just for fun, lets look at a potential valuation if management lives up to their expectation of 450 total venues worldwide over the next 20 years. For the full-year, same-venue sales were approximately 95 percent of 2019 levels. Calloway's stock is at the same price as it was in 1998. In addition, these preliminary estimates are not necessarily indicative of the results to be achieved in any future period. Although there were numerous assumptions and multiples involved in this research, I hope it was able to demonstrate the growth and valuation potential that Topgolf can reach as it expands to a global golf entertainment company. In addition, the Company has included in the schedules to this release a reconciliation of non-GAAP information to the most directly comparable GAAP information. For more information please visit www.callawaygolf.com, www.odysseygolf.com, www.OGIO.com, www.travismathew.com, and www.jack-wolfskin.com. Topgolf is expected to generate $1.06 billion in revenue and $158 million in EBITDA in 2021. For obvious reasons, 2020 was excluded when determining the industry average. Players can choose to compete in several Topgolf games in which players earn points based on how well they hit to specific targets. The employee data is based on information from people who have self-reported their past or current employments at Topgolf. Please. Being the good friend I am, I read it so you dont have to lets run through it. Founded in 2000, Topgolf has reinvented the concept of golfs antiquated driving range to attract both golf aficionados and novices alike, turning it into a destination venue for people to play technology-enabled golf games accompanied by music, food, and drinks. It is something that the game hasnt seen in a while.. We use Is this happening to you frequently? He previously worked as a business journalist for the Orlando Sentinel, Tulsa World and The Monitor in McAllen. It is time and circumstance specific.. Both CEOs said golf equipment and golf entertainment venues have a chance to excel in the COVID-19 environment while other forms of entertainment have been severely restricted. The golf industry as a whole has been on a Give them a try - use JOE25 for 25% off your first order at athleticbrewing.com. You may also opt to downgrade to Standard Digital, a robust journalistic offering that fulfils many users needs. Topgolf charges include: Venue closure costs, a regulatory settlement reserve, the remeasurement of a contingent earnout obligation, and the remeasurement of a stock-warrant liability. The expansion is boosting the number of Topgolf customers, but Anderson declined to comment on the specific customer return rate. Topgolfs adjusted EBITDA amount of $189.6 million for 2021 places a current market valuation on the business from $1.6 billion to $2.4 billion and a per share value of $8.36 to $13.00. In a statement, the House Ways and Means chair explained A lot of growth.. At Topgolf, you pay for time at a bay, which you should typically reserve well in advance of your visit if it's a weekend. If you havent seen it, check it out its worth the read. Our track record of creativity and diversity of offerings will only grow stronger as part of Callaway, a global leader in the industry, said Erik Anderson, executive chairman of Topgolf. The Callaway golf business, and the game of golf itself is experiencing unprecedented growth, Brewer said. Anderson would not disclose any company financial information or the cost of building Topgolf venues, but building between seven and 10 new venues annually would require a hefty dose of capital. Topgolf Athletic's got you covered. Over the course of the initial 20-year ground lease, once construction is completed and Topgolf is open for business, the county will receive more than $625,000 in annual revenue, benefiting the San Bernardino County Regional Parks system, https://parks.sbcounty.gov/, which includes nine regional parks throughout the county and On Tuesday, Callaway announced a definitive merger agreement which would see the Golf giant digest the remaining 86% of Topgolf they didnt already own at a ~$2 billion valuation. Each location featuring a three-tiered driving range to accommodate about 100 bays, along with a sleek restaurant and lounge, requires an average capital investment of about $15 million depending on the location, according to various reports. A free SBJ account to unlock one extra article per month data science team the... Unlock one extra article per month to build another 33 facilities topgolf annual revenue per location designs on growing outside the States. 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