Acushnet Holdings Corp, which owns Titleist and FootJoy, reported earnings in the six months rose 82.6 percent, to $25.7 million from $14.1 million, according to an updated regulatory filing to support its initial public offering.
As reported, the company, which is owned by Fila Korea, filed for an initial public offering in June to raise up to $100 million. More detailed terms of the initial public offering, such as price estimates or listing stock exchange, have not yet been disclosed.
Sales in the half increased 4.6 percent, to $903.0 million. On a constant currency basis, net sales would have increased 5.6 percent, to $911.6 million. The increase in net sales on a constant currency basis was due to an increase of $20.8 million in net sales of Titleist golf clubs driven by the new wedges and irons introduced in the first quarter of 2016 and fourth quarter of 2015, respectively, an increase of $17.4 million in net sales of FootJoy golf wear driven by sales volume growth in apparel and gloves, and an increase of $9.3 million in net sales of Titleist golf gear driven by sales volume growth in all categories.
These net sales increases were offset partially by a decrease of $5.3 million in net sales of Titleist golf balls.
Gross profit increased by $6.3 million to $459.2 million for the six months. Gross margin decreased to 50.9 percent compared to 52.5 percent in the same period a year ago. The increase in gross profit was largely driven by a $10.7 million increase in gross profit in Titleist golf clubs due to increases in average selling prices of newly introduced wedges and irons and higher golf club sales volumes. The decrease in gross margin was primarily due to lower gains on foreign currency exchange contracts versus the year-ago period.
Selling, general and administrative (SG&A) expenses decreased $6.2 million to $306.8 million for the half Excluding the expense associated with its EAR Plan recorded in 2015, SG&A expenses would have increased $14.7 million to $306.8 million. This increase was due to a $17.2 million aggregate increase primarily attributable to $9.0 million in transaction costs related to this offering, a $7.5 million one-time executive bonus, $3.8 million in additional marketing and promotional costs related to new golf club product launches, FootJoy e-commerce and women’s golf apparel initiatives, $1.5 million in additional legal and professional fees. Those expenses were partially offset by a decrease of $2.5 million in associate incentive compensation accruals. The SG&A increase was also offset by a $2.5 million favorable impact of changes in foreign currency exchange rates.
R&D expenses increased by $0.2 million to $22.8 million. Excluding the expense associated with its EAR Plan recorded in 2015, R&D expenses would have increased by $1.6 million to $22.8 million. As a percentage of consolidated net sales, R&D expenses excluding expenses associated with its EAR Plan were 2.5 percent, unchanged from the six months ended June 30, 2015.
Adjusted EBITDA increased 2.5 percent to $164.4 million for the latest six months.
