Third Quarter and Year-to-Date 2017 Financial Results
- Third quarter net sales of $347.3 million, up 2.3% year over year, or up 2.9% in constant currency
- Year-to-date net sales of $1,208.9 million, down 2.7% year over year, or down 2.0% in constant currency
- Third quarter net income attributable to Acushnet Holdings Corp. of $9.3 million, up $14.8 million year over year
- Year-to-date net income attributable to Acushnet Holdings Corp. of $80.4 million, up $35.2 million year over year
- Third quarter Adjusted EBITDA of $32.2 million, up 15.0% year over year
- Year-to-date Adjusted EBITDA of $182.5 million, down 4.1% year over year
Quarterly Cash Dividend
- Declares quarterly cash dividend of $0.12 per share; $8.9 million on an aggregate quarterly basis
Fairhaven, Massachusetts – November 8, 2017 – Acushnet Holdings Corp. (NYSE: GOLF) (“Acushnet”), a global leader in the design, development, manufacture and distribution of performance-driven golf products, today reported financial results for the three and nine months ended September 30, 2017.
Wally Uihlein, Acushnet President and CEO said, “We are encouraged to see that the global golf industry continues to structurally improve through the first nine months of 2017. While near-term, US demand trends have been impacted as the focus shifted to important life priorities in areas hit by the recent hurricanes, it is good to see many areas are recovering well as a sense of normalcy returns. We are confident that our proven strategy, dedicated associates and valued trade partners will enable us to leverage a stronger industry and extend our success over the long term.”
David Maher, Acushnet COO said, “Acushnet delivered a solid third quarter with global growth driven by the United States and South Korea. We are particularly pleased with the recent launch of the Titleist 818 hybrids and the 718 irons including the new AP3. Tour adoption was strong at introduction, the global roll-out with our trade partners was well executed, and initial golfer response to these new golf clubs has been terrific. New Titleist DT TruSoft golf balls and FootJoy’s DNA Helix golf shoes were also launched successfully in the quarter. Looking forward, the Acushnet innovation engine is in high gear and we are excited about the many new product offerings coming from Titleist and FootJoy in 2018.”
Summary of Third Quarter 2017 Financial Results
Consolidated net sales for the quarter increased by 2.3%, or by 2.9% on a constant currency basis, driven primarily by the launch of the Titleist 718 irons and 818 hybrids.
On a geographic basis, consolidated net sales in the United States increased by 4.6% in the quarter. Net sales in regions outside the United States were down 0.1%, and up 1.1% on a constant currency basis, with Korea up 6.4% and Rest of World up 6.3%, offset by Japan down 6.9%.
- 3.5% decrease in net sales (3.1% decrease on a constant currency basis) of Titleist golf balls driven by sales volume declines in both Pro V1 and performance models. In the United States, sales volumes were impacted by unfavorable weather conditions as well as increased competitive promotional activity in the marketplace.
- 9.5% increase in net sales (10.3% increase on a constant currency basis) of Titleist golf clubs due to higher sales volumes, primarily due to product launches in our iron series and hybrids.
- 1.3% increase in net sales (2.1% increase on a constant currency basis) of Titleist golf gear. This increase was primarily due to sales volume growth in our travel gear category.
- 3.3% increase in net sales (3.7% increase on a constant currency basis) in FootJoy golf wear primarily due to higher average selling prices and a sales volume increase in our apparel category.
Net income attributable to Acushnet improved by $14.8 million to $9.3 million, primarily as a result of lower interest expense and higher income from operations, partially offset by higher income tax expense.
Adjusted EBITDA was $32.2 million, up 15.0% year over year. Adjusted EBITDA margin was 9.3% for the third quarter versus 8.3% for the prior year period.
Summary of First Nine Months 2017 Financial Results
Consolidated net sales for the first nine months of 2017 decreased by 2.7%, or by 2.0% on a constant currency basis.
On a geographic basis, consolidated net sales in the United States decreased by 3.0% in the nine-month period. Net sales in the United States were impacted by a reduced store count as a result of the retail channel disruptions in 2016 as well as unfavorable weather conditions which negatively impacted both rounds of play and golf club fitting and trial activities. Acushnet posted a year-on-year decline in net sales in regions outside the United States of 2.4%, down 0.8% on a constant currency basis, with Korea up 11.9%, offset by Japan down 10.4%.
- 2.7% decrease in net sales (2.1% decrease on a constant currency basis) of Titleist golf balls. This decrease was primarily driven by a sales volume decline of our performance golf ball models which were in their second year of the two-year product life cycle and was partially offset by a sales volume increase of our newly introduced Pro V1 and Pro V1x golf balls. In the United States, sales volumes were impacted by a reduced store count as a result of the retail channel disruptions in 2016, unfavorable weather conditions which negatively impacted rounds of play, as well as increased competitive promotional activity in the marketplace.
- 10.0% decrease in net sales (9.2% decrease on a constant currency basis) of Titleist golf clubs. This decrease was primarily driven by lower sales volumes of Vokey Design wedges, which were in their second model year, and prior generation irons. In the United States, sales volumes were impacted by a reduced store count as a result of the retail channel disruptions in 2016 as well as unfavorable weather conditions which negatively impacted golf club fitting and trial activities. This decrease was partially offset by an increase in average selling prices, in particular for the new 917 model drivers and fairways.
- 5.0% increase in net sales (5.4% increase on a constant currency basis) of Titleist golf gear. This increase was primarily due to higher average selling prices in all categories and higher sales volume growth in the travel category.
- 1.7% decrease in net sales (0.5% decrease on a constant currency basis) in FootJoy golf wear primarily due to a sales volume decline in footwear, partially offset by a sales volume increase in apparel.
Net income attributable to Acushnet improved by $35.2 million to $80.4 million, primarily as a result of lower interest expense and higher income from operations.
Adjusted EBITDA was $182.5 million, down 4.1% year over year. Adjusted EBITDA margin was 15.1% versus 15.3% for the prior year period.
Declares Quarterly Cash Dividend
Acushnet Holdings board of directors today declared a quarterly cash dividend in an amount of
$0.12 per share of common stock. The dividend will be payable on December 15, 2017, to stockholders of record on December 1, 2017. The number of shares outstanding as of September 30, 2017 was 74,451,977.
Updated 2017 Outlook
- Consolidated net sales are expected to be approximately $1,545 to 1,555 million in 2017.
- Consolidated net sales on a constant currency basis are expected to be in the range of a decrease of 1% to a decrease of 0.4% in 2017.
- Adjusted EBITDA is expected to be approximately $220 to 225 million in 2017.
Investor Conference Call
- Acushnet will hold a conference call at 8:30 am (Eastern Time) on November 8, 2017, to discuss the financial results and host a question and answer session. A live webcast of the conference call will be accessible at www.AcushnetHoldingsCorp.com/ir. A replay archive of the webcast will be available shortly after the call concludes.
About Acushnet Holdings Corp.
- We are the global leader in the design, development, manufacture and distribution of performance-driven golf products, which are widely recognized for their quality excellence. Driven by our focus on dedicated and discerning golfers and the golf shops that serve them, we believe we are the most authentic and enduring company in the golf industry. Our mission – to be the performance and quality leader in every golf product category in which we compete – has remained consistent since we entered the golf ball business in 1932. Today, we are the steward of two of the most revered brands in golf – Titleist, one of golf’s leading performance equipment brands, and FootJoy, one of golf’s leading performance wear brands. Additional information can be found at www.acushnetholdingscorp.com.
This release includes forward-looking statements that reflect our current views with respect to, among other things, our operations and financial performance. These forward-looking statements are included throughout this release and relate to matters such as our industry, business strategy, goals and expectations concerning our market position, future operations, margins, profitability, capital expenditures, liquidity and capital resources and other financial and operating information such as our anticipated consolidated net sales, consolidated net sales on a constant currency basis and adjusted EBITDA. We use words like “guidance,” “outlook,” “anticipate,” “assume,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “future,” “will,” “seek,” “foreseeable” and similar terms and phrases to identify forward-looking statements in this release.
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