Acushnet Holdings Corp., the parent of Titleist, reported net income rose 57.0 percent in the fourth quarter on a 7.3 percent sales gain. Net earnings rose 21.2 percent in the year on a 2.9 percent sales increase.

“We are pleased with the company’s 2019 results, which were fueled by several successful product launches that drove growth in sales and earnings,” said David Maher, Acushnet’s president and chief executive officer. “Our golf ball segment, in particular, showed great momentum in all major regions, driven by new Pro V1 and Pro V1x, and the Titleist ball count across professional tours came in at 73 percent, more than 8 times our nearest competitor. We also saw growth in our Titleist gear and FootJoy golf wear segments, and Titleist clubs performed well and as expected within our two-year product launch cycle. The success of our 2019 product launches affirms the commitment and great work of our associates and trade partners.

“For 2020, we have a number of exciting new initiatives in place across all product categories. We are committed to sustaining our Pro V1 momentum and launching new AVX, Tour Soft and Velocity models. We are poised to launch new Vokey SM8 wedges and Cameron Special Select Putters in the first quarter and new Titleist metals later in the year. We also look forward to several new Titleist gear and FootJoy products and the continued growth and development of KJUS throughout 2020.

“Our thoughts are with all those affected by the coronavirus, and we are working with our local teams to ensure their health and safety as we closely monitor the potential impacts on our business from this crisis.”

Summary of Full Year 2019 Financial Results
Consolidated net sales for the full year increased 2.9 percent, or 4.8 percent on a constant currency basis, due to an increase of $36.4 million in Titleist golf balls driven by our latest generation Pro V1 and Pro V1x golf balls launched in the first quarter of 2019 and sales from PG Golf which we acquired in the fourth quarter of 2018, an increase of $11.0 million in FootJoy golf wear primarily due to sales volume increases in apparel, an increase of $7.2 million in Titleist golf gear on sales increases across all product categories, partially offset by a decrease of $5.6 million in Titleist golf clubs. The remaining change in net sales was primarily due to the acquisition of KJUS during the third quarter of 2019. The results of KJUS have not been allocated to any of our reportable segments.

On a geographic basis, consolidated net sales in the United States increased 7.1 percent in the twelve-month period. The increase in net sales in the United States resulted from an increase of $24.8 million in net sales of Titleist golf balls primarily driven by higher sales volumes of our latest generation Pro V1 and Pro V1x golf balls launched in the first quarter of 2019 and sales from PG
Golf which we acquired in the fourth quarter of 2018, an increase of $12.2 million in net sales of FootJoy golf wear, an increase of $7.8 million in Titleist golf clubs and an increase of $5.2 million in Titleist golf gear. The remaining change in net sales was primarily due to the acquisition of KJUS.

Net sales in regions outside the United States were down 1.4 percent and up 2.4 percent on a constant currency basis. In EMEA, the increase in net sales was primarily due to the acquisition of KJUS and higher sales volumes of Titleist golf balls. In Korea, the increase in net sales was driven by increased sales across all product categories. In Japan, the decrease in net sales was primarily due to a decrease in sales of Titleist golf clubs and FootJoy golf wear.

Segment specifics:

  • 5.3 percent increase in net sales (6.9 percent increase on a constant currency basis) of Titleist golf balls, primarily driven by higher sales volumes of our latest generation Pro V1 and Pro V1x golf balls launched in the first quarter of 2019 and sales from PG Golf which we acquired in the fourth quarter of 2018, partially offset by a sales volume decline in our performance golf balls.
  • 2.4 percent decrease in net sales (1.3 percent decrease on a constant currency basis) of Titleist golf clubs. Sales volumes of our T-Series irons, U-Series utility irons, TS hybrids and putters launched during 2019 were offset by lower sales volumes of our wedges, TS fairways and TS drivers which were in their second model year.
  • 2.7 percent increase in net sales (4.9 percent increase on a constant currency basis) of Titleist golf gear, primarily driven by higher sales volumes in our golf bags, travel gear and golf gloves categories.
  • 0.5 percent increase in net sales (2.5 percent increase on a constant currency basis) in FootJoy golf wear. The increase in constant currency was primarily driven by a sales volume increase and higher average selling prices in apparel, partially offset by lower average selling prices in the footwear category.

Net income attributable to Acushnet improved by $21.2 million to $121.1 million, up 21.2 percent year over year, primarily as a result of an increase in income from operations and a decrease in income tax expense.

Adjusted EBITDA was $240.1 million, up 4.0 percent year over year. Adjusted EBITDA margin was 14.3 percent versus 14.1 percent for the prior-year period.

Summary Of Fourth Quarter 2019 Financial Results
Consolidated net sales for the quarter increased 7.3 percent, or 7.9 percent on a constant currency basis, due to an increase of $11.2 million in Titleist golf balls driven by our latest generation Pro V1 and Pro V1x golf balls and our TruFeel performance golf balls, an increase of $5.4 million in FootJoy golf wear primarily due to sales volume increases in apparel, partially offset by a decrease of $2.1 million in Titleist golf clubs and by a decrease of $1.8 million in Titleist golf gear. The remaining change in net sales was primarily due to the acquisition of KJUS.

On a geographic basis, consolidated net sales in the United States increased 20.9 percent in the quarter. The increase in net sales in the United States was driven by an increase of $11.3 million in net sales of Titleist golf clubs driven by our T-Series irons, U-Series utility irons and TS hybrids, an increase of $8.1 million in net sales of Titleist golf balls primarily driven by higher sales volumes of our latest generation Pro V1 and Pro V1x golf balls launched in the first quarter of 2019 and our TruFeel performance golf balls launched in the third quarter of 2019, and an increase of $5.8 million in net sales of FootJoy golf wear. The remaining change in net sales was primarily due to the acquisition of KJUS.

Net sales in regions outside the United States were down 3.5 percent, down 2.3 percent on a constant currency basis. In Japan, the decrease in net sales was primarily due to a decrease in sales of Titleist golf clubs and FootJoy golf wear, partially offset by an increase in sales of Titleist golf balls. In EMEA, the increase in net sales was primarily due to the acquisition of KJUS. In Korea, the increase in net sales was driven by increases in sales of FootJoy golf wear and Titleist golf clubs, partially offset by a decrease in Titleist golf gear.

Segment specifics:

  •  10.1 percent increase in net sales (10.7 percent increase on a constant currency basis) of Titleist golf balls, primarily driven by higher sales volumes of our latest generation Pro V1 and Pro V1x golf balls and our new TruFeel performance golf balls.
  • 2.0 percent decrease in net sales (1.9 percent decrease on a constant currency basis) of Titleist golf clubs as sales volumes of our new T-Series irons, U-Series utility irons and TS hybrids were offset by lower sales volumes of our TS drivers and TS fairways which were in their second model year.
  • 7.9 percent decrease in net sales (7.1 percent decrease on a constant currency basis) of Titleist golf gear. This decrease primarily resulted from lower sales volumes in golf bags and headwear.
  • 6.3 percent increase in net sales (6.8 percent increase on a constant currency basis) in FootJoy golf wear.  The increase in constant currency was primarily driven by a sales volume increase and higher average selling prices in apparel.

Net income attributable to Acushnet increased $6.5 million to $17.9 million, up 57.0 percent year over year primarily as a result of an increase in income from operations.

Adjusted EBITDA was $44.5 million, up 23.3 percent year over year. Adjusted EBITDA margin was 12.1 percent for the fourth quarter versus 10.5 percent for the prior-year period.

2020 Outlook
Acushnet’s 2020 outlook includes an estimated negative impact of the coronavirus of approximately $40 million in consolidated net sales and $18 million in Adjusted EBITDA and an estimated negative impact of unmitigated tariffs of approximately $5 million in Adjusted EBITDA.

  • Consolidated net sales are expected to be approximately $1,665 to 1,705 million.
  • Consolidated net sales on a constant currency basis are expected to be in the range of down 0.5 percent to up 1.9 percent.
  • Adjusted EBITDA is expected to be approximately $220 to $240 million

Photo courtesy Titleist