CALLAWAY GOLF REPORTS FIRST QUARTER SALES AND EARNINGS

28 April 1999: Callaway Golf Company today reported net sales of $185.7 million for the first quarter ended 31 March 1999, an increase of five percent over net sales for $176.9 million reported in the first quarter of 1998, accordingly to Ely Callaway, Founder, Chairman and Chief Executive Officer. Net income increased 15 percent to $12.8 million in the first quarter of 1999 from the first quarter of 1998 and diluted earnings per share increased to $0.18 in 1999 from $0.16 in the first quarter of 1998.

Net sales of $185.7 million were comprised of: $81.6 million of Great Big Bertha Hawk Eye and other titanium metal woods; $39.6 million of Big Bertha Steelhead and other stainless steel metal woods; $48.1 million of Big Bertha X-12 and other irons; $10.8 million Odyssey product sales and $5.7 million of other sales.

The 15 percent increase in net income was primarily attributable to lower operating costs during the first quarter of 1999. Reductions in selling and research and development costs were largely attributed to the company's 1998 restructuring, including the consolidation and/or elimination of certain operations. Higher general and administrative costs relate to the ramp-up of golf ball operations, along with increases associated with certain of the Company's foreign subsidiaries. The company's lower gross margin related primarily to golf clubs sold during the first quarter, but which were manufactured in the fourth quarter of 1998 at higher labour and overhead rates, costs associated with consolidating manufacturing operations and the ongoing sale and disposal of non-current product, partially offset by a favorable shift in product and regional sales mix.

According to Mr Callaway: "The golf club market is still a bit weak in the US and internationally, but management feels good and encouraged by our sale and productivity - and by our profitability - in the first quarter. Our first quarter revenues for Hawk Eye and Steelhead Metal Woods alone were $110 million. These excellent sales numbers on our two newest products were in part the result of our planning, started months ago, to have sufficient production and inventory by the time of launch to make substantial early shipments of the full complement of these new drivers and fairway woods. In addition to these strong sales of our metal woods we also sold and delivered $45 million worth of Big Bertha X-12 Irons and had encouraging results with our Odyssey putter line. Overall, we believe we remained strongly in the number one position in dollar sales in premium woods, irons and putters in the US and worldwide".

In accordance with the company's dividend practice for 1999, which was adopted by the Board of Directors at its February 1999 meeting, the dividend for the first quarter will be determined by the Board of Directors at its meeting in early May 1999, payable in early June.