Callaway Golf Company Releases Preliminary First Quarter 2007 Results

Callaway Golf Company (NYSE:ELY) today announced that, based on
current information, the Company estimates net sales for the first
quarter ended March 31, 2007 of $330 million to $335 million, an
estimated increase of approximately 10%, with a corresponding
estimated increase of approximately 42% in earnings per diluted share
that is estimated to range from $0.46 to $0.48 (on 68.3 million
shares), including long-term incentive compensation expense. These
results also include after-tax charges of approximately $0.01 per
share related to gross margin improvement initiatives announced in
November 2006.

For the first quarter of 2006, the Company reported net sales of
$302 million and fully diluted earnings per share of $0.33 (on 70.1
million shares), including long-term incentive compensation expense.
Those results included after-tax charges of approximately $0.01 per
share for the Top-Flite integration.

Business Update

"We are very pleased with our preliminary first quarter results,"
commented George Fellows, President and CEO of Callaway Golf. "As a
result of improved product development and supply chain processes, we
were able to ship more of our new products to retail than originally
anticipated. The earlier sales of these higher margin products,
together with the progress we have made on our gross margin
improvement initiatives, are estimated to result in a marked
improvement in gross margins for the quarter compared to last year."

"Initial acceptance of our new products has been encouraging thus
far," continued Mr. Fellows. "However it is still early in the year
and the first quarter should be viewed partly as a retail pipeline
fill rather than a total indicator of our full year performance. The
second quarter will be a better indicator in that regard as its
success is driven by consumer purchases of our products and resulting
retail reorders. Therefore, although we expect the second quarter to
be our highest revenue quarter for the year, we will be in a better
position, if necessary, to update our annual outlook at our May 3rd
earnings conference call."

Details of First Quarter Results

Sales

The estimated increase in sales for the first quarter is
attributable to several factors including:

-- increased driver sales associated with the early launch of the
FT-i and FT-5 fusion technology products

-- increased irons sales associated with the X-20 and X-20 tour
models as well as the new X-forged product line

-- increased accessories sales associated with footwear, bags,
and gloves

Gross Margins

The Company estimates its gross margins as a percentage of net
sales to be approximately 48% for the first quarter. Excluding charges
related to gross margin improvement initiatives, it is estimated that
pro forma gross margins as a percentage of net sales would also be
approximately 48%. In the first quarter of 2006, the Company's gross
margins were 43% and excluding integration and restructuring charges
were 44%. The four percentage point increase in pro forma gross
margins is primarily attributable to increased sales of higher margin
products such as fusion drivers, X-series irons, and accessories, as
well as manufacturing efficiencies and the successful implementation
of gross margin improvement initiatives.

Operating Expenses

The Company estimates that its operating expenses for the quarter
will be approximately $105 million, an increase of approximately $10
million when compared to last year's first quarter. The increase is
primarily due to an increase in marketing expense associated with the
first quarter launches of the Company's new products and higher
expenses associated with the year over year increase in net sales.

Conference Call

The Company will release actual first quarter financial results on
May 3, 2007. A conference call and webcast will also take place at
that time.

Disclaimer: Investors should be aware that the Company has not yet
finalized its results for the first quarter of 2007 and that the
Company's "preliminary" estimates of net sales, gross margins,
operating expenses and earnings for the first quarter reflect
management's estimates based upon the information available at the
time made. These estimates could differ materially from the Company's
actual results if the information on which the estimates were based
ultimately proves to be incorrect or incomplete. In addition,
statements used in this press release that relate to future plans,
events, financial results, performance or prospects, including
statements relating to estimated future sales, are forward-looking
statements as defined under the Private Securities Litigation Reform
Act of 1995. These estimates and statements are based upon current
information and expectations. Investors should understand that it is
very difficult to forecast sales of the Company's products as a
substantial portion of the Company's sales each year is derived from
the sale of new products. Accurately estimating the Company's sales
each year is therefore based upon various unknowns including consumer
acceptance of the Company's new products as well as consumer
discretionary purchasing behavior in the upcoming year. Actual results
may differ materially from those estimated or anticipated as a result
of these unknowns or as a result of certain risks and uncertainties,
including but not limited to, delays or difficulties associated with
the re-launch of the Top-Flite brand or the implementation of future
initiatives; market acceptance of current and future products; adverse
market and economic conditions; adverse weather conditions and
seasonality; any rule changes or other actions taken by the USGA or
other golf association that could have an adverse impact upon demand
or supply of the Company's products; a decrease in participation
levels in golf; and the effect of terrorist activity, armed conflict,
natural disasters or pandemic diseases on the economy generally, on
the level of demand for the Company's products or on the Company's
ability to manage its supply and delivery logistics in such an
environment. For additional information concerning these and other
risks and uncertainties that could affect these statements and the
Company's business, see Part I, Item 1A of the Company's Annual Report
on Form 10-K for the year ended December 31, 2006, as well as other
risks and uncertainties detailed from time to time in the Company's
reports on Forms 10-K, 10-Q and 8-K subsequently filed from time to
time with the Securities and Exchange Commission. Readers are
cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date hereof. The Company
undertakes no obligation to republish revised forward-looking
statements to reflect events or circumstances after the date hereof or
to reflect the occurrence of unanticipated events.

Regulation G: The financial results reported in this press release
have been prepared in accordance with accounting principles generally
accepted in the United States ("GAAP"). In addition to the GAAP
results, the Company has also provided additional information
concerning its results, which includes certain financial measures not
prepared in accordance with GAAP. The non-GAAP financial measures
included in this press release exclude charges associated with the
integration of the Callaway Golf Company and Top-Flite Golf Company
operations, charges related to the September 2005 restructuring
initiatives, and charges related to the Company's gross margin
initiatives. These non-GAAP financial measures should not be
considered a substitute for any measure derived in accordance with
GAAP. These non-GAAP financial measures may also be inconsistent with
the manner in which similar measures are derived or used by other
companies. Management believes that the presentation of such non-GAAP
financial measures, when considered in conjunction with the most
directly comparable GAAP financial measures, provides additional
useful information concerning the Company's operations without these
charges. The Company has provided reconciling information in the text
of this press release and for 2006 in the supplemental financial
information contained in the Company's April 26, 2006 press release,
which is available in the Investor Relations section of the Company's
website at www.callawaygolf.com.

About Callaway Golf

Through an unwavering commitment to innovation, Callaway Golf
Company creates products and services designed to make every golfer a
better golfer. Callaway Golf Company, which celebrates its 25th
Anniversary in 2007, manufactures and sells golf clubs and golf balls,
and sells golf accessories, under the Callaway Golf(R), Odyssey(R),
Top-Flite(R), and Ben Hogan(R) brands in more than 110 countries
worldwide. For more information please visit www.callawaygolf.com.