Acushnet Holdings Corp., the parent of Titleist and FootJoy, reduced its net loss in the third quarter to $6.2 million from $14 million a year ago. Revenues reached $332.4 million, up 3.9 percent.

The report marked Acushnet’s first earnings report since undergoing an initial public offering in early November.

Wally Uihlein, Acushnet’s president and CEO, said, “We are pleased with our third-quarter performance and especially our results so far this year. Net sales and adjusted EBITDA continued to grow over the first nine months as a result of solid execution by the Acushnet team. As the golf industry is undergoing a much needed and positive rationalization, our strategy continues to work well and resonates strongly with golfers and our partners. The focus on the dedicated golfer, a broad and deep product portfolio, market leading positions across multiple categories and a world class team provide a solid foundation for continued success going forward.”

Uihlein continued, “Having been with Acushnet for 40 years, it was incredibly rewarding to reach another major milestone with the recent completion of our initial public offering. I’m very excited to begin the next chapter in the company’s history.”

Summary of Third Quarter 2016 Financial Results
For the three months ended September 30, 2016, net sales were $332.4 million, a 3.9-percent increase from $319 million in the prior-year period (2.2 percent on a constant currency basis).

Additional net sales details include:

  • 7.5-percent increase in net sales (6.2 percent on a constant currency basis) in FootJoy golf wear across all categories
  • 10.4-percent increase in net sales (7.7 percent on a constant currency basis) of Titleist golf clubs as a result of continued strong demand for the new 2016 model 716 irons, Vokey wedges and Scotty Cameron putters
  • 5.5-percent decrease in net sales (6.5 percent on a constant currency basis) of Titleist golf balls as a result of the off-course U.S. retail channel disruption caused by the bankruptcy of Sports Authority and the reorganization efforts of Golfsmith, and the fact that Pro V1 and Pro V1x balls are in the second year of their two-year product cycle.

Consolidated net sales in the United States decreased by 0.7 percent, impacted by soft market conditions in the United States and the reorganization efforts of Golfsmith. Acushnet posted strong year-on-year gains in regions outside the United States, increasing net sales by 9.3 percent — on a constant currency basis, such net sales would have increased by 5.6 percent, with Korea up 10.8 percent, EMEA up 6.2 percent and Japan up 5.4 percent.

Net income (loss) attributable to Acushnet increased by $7.8 million to a loss of $6.2 million, primarily as a result of higher income from operations principally due to higher gross profit in FootJoy golf wear and Titleist golf clubs, offset by lower gross profit in Titleist golf balls and lower SG&A expenses.

Adjusted EBITDA increased by 9 percent primarily as a result of higher income from operations. Adjusted EBITDA margin increased to 8.1 percent for the third quarter from 7.7 percent for the prior-year period.

Summary Of First Nine Months 2016 Financial Results
Consolidated net sales increased by 4.4 percent, or 4.7 percent on a constant currency basis.

Additional net sales details include:

  • 9.3-percent increase in net sales (9 percent on a constant currency basis) of Titleist golf clubs, reflecting continued strong demand for the new 2016 model 716 irons, Vokey wedges and Scotty Cameron putters
  • 6.4-percent increase in net sales (6.8 percent on a constant currency basis) of FootJoy golf wear across all categories
  • 9.2-percent increase in net sales (9.7 percent on a constant currency basis) of Titleist golf gear driven by sales volume growth in all categories
  • 3.6-percent decrease on net sales (3.1 percent on a constant currency basis) of Titleist golf balls as a result of off-course U.S. retail channel disruption and the fact that Pro V1 and Pro V1x balls are in the second model year
  • 1.3-percent increase in net sales in the United States
  • 8.3-percent increase in net sales in regions outside of the United States — 8.8 percent on a constant currency basis, with Korea up 19.2 percent, EMEA up 10.1 percent and Japan up 5.1 percent.

Net income attributable to Acushnet increased by $26.4 million to $45.9 million. This increase was primarily as a result of higher income from operations principally due to higher gross profit in Titleist golf clubs, and lower SG&A expenses. Adjusted EBITDA increased by 3.4 percent primarily as a result of higher income from operations.

Adjusted EBITDA margin decreased to 15.5 percent for the nine months ended September 30, 2016 from 15.7 percent for the prior-year period.

Liquidity And Capital Resources
As of September 30, 2016, Acushnet had cash of $85.7 million ($81.1 million on a pro forma basis, after giving effect to the automatic conversion of convertible notes and convertible preferred stock and the payment of interest on the convertible notes at the closing of the initial public offering). Availability under the company’s revolving credit facility was $255 million, and availability under local credit facilities was $66 million.

Initial Public Offering
On November 2, 2016, Acushnet completed its initial public offering at $17 per share. A total of 22.2 million shares of common stock were sold to the underwriters, including 2.9 million shares sold pursuant to the full exercise of the underwriters’ option to purchase additional shares. All 22.2 million shares of common stock sold in the offering were sold by existing stockholders of Acushnet.

Photo courtesy Acushnet