Acushnet Holdings Corp., the parent of Titleist, FootJoy and KJUS, said in a regulatory statement it has withdrawn its guidance for 2020 and increased borrowings under its credit facility due to the “unprecedented uncertainty” caused by the coronavirus pandemic.
Acushnet said it has drawn down $200 million under the revolving credit facility. Following the draw down, the company had $377.2 million outstanding under its revolving credit facility. Acushnet said, “The company elected to draw down these amounts on April 1, 2020 to further bolster its liquidity position and to provide additional financial flexibility in light of the current uncertainty surrounding the impact of COVID-19.”
Acushnet stated in the filing on an update on results, “As a result of the spread of COVID-19, the company has been faced with disruptions to our business to varying degrees across many regions. While our businesses in Korea and Japan have started to recover following an initial period of disruption, and while our joint venture FootJoy golf shoe facility in China is fully operational, our businesses in the United States and Europe have more recently been impacted by government-ordered shutdowns. These recent shutdowns have impacted facilities in the U.S. and Europe and negatively impacted overall retail demand. As a result of these shutdowns, we have had to suspend operations at our Massachusetts ball manufacturing facilities and our California club assembly facility. We are currently maintaining limited receiving and fulfillment capabilities at our distribution centers in both Massachusetts and California. Currently, in the U.S. and Europe, sales in the golf industry and in our own business have slowed considerably, with many golf courses, golf shops, and retailers temporarily closed. As a result of the earlier disruptions in Asia, the recent events in the U.S. and Europe, and the overall uncertainty related to potential impacts of COVID-19, the company’s financial results will be materially impacted. Given the unprecedented uncertainty, the company has decided to withdraw the previously announced guidance for 2020. The company expects that disruptions in demand and production will continue to negatively impact results. The company will provide an update regarding the impacts of COVID-19 on our first quarter 2020 earnings call. The company is also announcing that it is suspending stock repurchases in light of the COVID-19 pandemic. The company’s management believes the suspension is prudent given uncertainty regarding the length and severity of the pandemic. The company has the ability to reinstate repurchases as circumstances warrant.”
Logo courtesy Acushnet