Profits at Acushnet Holdings Corp., the parent of Titleist, FootJoy and KJUS, rose 20.7 percent in the fourth quarter ended December 31 on a 14.2 percent revenue gain.

Fourth Quarter And Full Year 2020 Financial Results

  • Fourth-quarter net sales of $420.5 million, up 14.2 percent year-over-year, up 11.9 percent in constant currency;
  • Full-year net sales of $1,612.2 million, down 4.1 percent year-over-year, down 4.2 percent in constant currency;
  • Fourth-quarter net income is attributable to Acushnet Holdings Corp. of $21.6 million, up 20.7 percent year-over-year;
  • Full-year net income attributable to Acushnet Holdings Corp. of $96.0 million, down 20.7 percent year-over-
    year;
  • Fourth-quarter Adjusted EBITDA of $48.1 million, up 8.1 percent year-over-year;
  • Full-year Adjusted EBITDA of $233.2 million, down 2.9 percent year-over-year; and
  • Increased quarterly cash dividend by 6.5 percent to $0.165 per share, or $12.3 million in aggregate.

“I am extremely appreciative of Acushnet’s team of dedicated associates for their great work in navigating a year filled with challenges and uncertainty. Our commitment to associate safety, product quality and customer care has guided the company throughout 2020, and we look forward to building upon our momentum in the new year,” said David Maher, Acushnet’s president and chief executive officer. “Acushnet has held up well in these uncertain times, and I am confident our associates and trade partners will continue to adapt and excel as we move forward.”

Maher continued, “Golf participation remains strong, and Acushnet’s momentum continued to build through the fourth quarter, resulting in reported sales gains across all segments and regions. We look forward to introducing a full lineup of exciting new products for the upcoming 2021 golf season. Titleist golf balls continue to be trusted by approximately 75 percent of players across worldwide tours, and our new Pro V1 and Pro V1x models represent our next chapter of performance, quality and innovation. Titleist TSi metals are off to a great start in the market and have been the most played driver on the PGA Tour since their debut in the fall. FootJoy’s new Premiere series was the #1 Shoe at the Masters, and the new HyperFlex is our latest entry in the athletic golf footwear category.”

Summary Of Fourth Quarter 2020 Financial Results
Consolidated net sales for the quarter increased 14.2 percent, or 11.9 percent on a constant-currency basis, to $420.5 million due to increased sales across all reportable segments. Titleist golf clubs increased $20.1 million driven by Titleist’s newly introduced TSi drivers and TSi fairways, FootJoy golf wear increased $14.3 million, Titleist golf gear increased $5.3 million and Titleist golf balls increased $1.6 million.

On a geographic basis, consolidated net sales in the United States increased 16.1 percent in the quarter. The increase in net sales in the United States was due to an increase of $14.0 million in Titleist golf clubs, an increase of $8.8 million in FootJoy golf wear, an increase of $5.3 million in Titleist golf gear and an increase of $1.5 million in Titleist golf balls all driven by a significant increase in rounds of play and related demand for golf-related products.

Net sales in regions outside the United States increased 12.3 percent, up 7.9 percent on a constant-currency basis. In Korea, the increase in net sales was primarily driven by increased sales in products not allocated to one of its reportable segments and FootJoy golf wear, partially offset by a decrease in Titleist golf clubs. In the Rest of the World, the increase in net sales was driven by increased sales across all segments. In EMEA, the decrease in net sales was primarily due to decreased sales in KJUS. Net sales in Japan were relatively flat, with an increase in Titleist golf clubs offset by decreases in Titleist golf balls and products not allocated to one of its reportable segments.

Segment Specifics

  • 3.1 percent increase in net sales (1.4 percent increase on a constant-currency basis) of Titleist golf balls, primarily driven by higher sales volumes of its performance models and sales from PG Golf, offset by lower sales volumes of Titleist’s Pro V1, Pro V1x and AVX golf balls which, despite continued strong demand, were constrained by availability largely as a result of lost production from the more than the two-month shutdown of the United States-based golf ball manufacturing facilities in the second quarter.
  • 20.8 percent increase in net sales (18.4 percent increase on a constant-currency basis) of Titleist golf clubs primarily driven by higher sales volumes of metals resulting from Titleist’s TSi drivers and TSi fairways launched in the fourth quarter, partially offset by lower sales volumes of irons which were in its second model year.
  • 24.8 percent increase in net sales (22.6 percent increase on a constant-currency basis) of Titleist golf gear primarily driven by sales volume increases in golf bags, golf gloves and headwear and higher average selling prices in golf bags.
  • 19.3 percent increase in net sales (17.0 percent increase on a constant-currency basis) in FootJoy golf wear primarily driven by higher average selling prices in apparel and sales volume increases in gloves and in footwear in the United States.

Net income attributable to Acushnet increased $3.7 million to $21.6 million, up 20.7 percent year-over-year, primarily as a result of a decrease in income tax expense which was partially offset by an increase in other expenses, net. Adjusted EBITDA was $48.1 million, up 8.1 percent year-over-year. Adjusted EBITDA margin was 11.4 percent for the fourth quarter versus 12.1 percent for the prior year period.

Summary Of Full Year 2020 Financial Results
Consolidated net sales for the full year decreased 4.1 percent, or 4.2 percent on a constant-currency basis, due to decreases across all reportable segments primarily as a result of the impact of the COVID-19 pandemic and related government-ordered shutdowns primarily during the first and second quarters of 2020. Partially offsetting this was higher demand around golf and golf-related products in the third and fourth quarters as golf courses and on and off-course retail partner locations re-opened, and a full year of sales from KJUS which Acushnet acquired in the third quarter of 2019.

On a geographic basis, consolidated net sales in the United States decreased 5.1 percent for the year. The decrease in net sales in the United States resulted from a decrease of $27.3 million in Titleist golf balls, a decrease of $15.3 million in FootJoy golf wear and a decrease of $10.6 million in Titleist golf clubs sales. The decrease in net sales was partially offset by an increase of $3.0 million in Titleist golf gear and a full year of sales from KJUS. Net sales in regions outside of the United States were down 3.0 percent and down 3.1 percent on a constant-currency basis. This decrease in net sales was due to decreases in sales volumes across all reportable segments, primarily as a result of the impact of the COVID-19 pandemic in all regions except Korea, which saw net sales increases across all reportable segments except Titleist golf clubs. A full year of sales from KJUS partially offset declines in EMEA.

Segment Specifics

  • 7.9 percent decrease in net sales (8.0 percent decrease on a constant-currency basis) of Titleist golf balls, primarily resulting from the impact of the COVID-19 pandemic on sales volumes across all models and regions, with the exception of Korea;
  • 3.7 percent decrease in net sales (4.0 percent decrease on a constant-currency basis) of Titleist golf clubs. This decrease primarily resulted from the impact of the COVID-19 pandemic on sales volumes across all models, partially offset by Titleist’s SM8 wedges introduced in the first quarter of 2020 and its TSi metals introduced in the fourth quarter of 2020;
  • 0.4 percent decrease in net sales (unchanged on a constant-currency basis) of Titleist golf gear. Sales volumes were impacted by the COVID-19 pandemic as discussed above primarily in Titleist’s headwear and travel product categories, offset by higher average selling prices across all product categories; and
  • 6.0 percent decrease in net sales (6.1 percent decrease on a constant-currency basis) in FootJoy golf wear. This decrease resulted from the impact of the COVID-19 pandemic on sales volumes as discussed above primarily in its footwear and apparel product categories and all regions, with the exception of Korea.

Net income attributable to Acushnet decreased by $25.1 million to $96.0 million, down 20.7 percent year-over-year, primarily as a result of a decrease in income from operations, offset in part by a decrease in income tax expense. Adjusted EBITDA was $233.2 million, down 2.9 percent year-over-year. Adjusted EBITDA margin was 14.5 percent versus 14.3 percent for the prior-year period.

Cash Dividend
Acushnet’s Board of Directors today declared a quarterly cash dividend of $0.165 per share of common stock. The dividend will be payable on March 26, 2021 to shareholders of record as of March 12, 2021. The number of shares outstanding as of February 19, 2021 was 74,294,813.

Impact Of COVID-19 
Through the end of December 2020, the Acushnet business was significantly impacted by the COVID-19 pandemic. The negative impact was primarily experienced in the first and second quarters when its manufacturing and distribution operations were shut down and most on-course retail pro shops and off-course retail partner locations were closed for varying lengths of time due to government-ordered shutdowns in the United States and Europe. By the end of June 2020, Acushnet’s manufacturing and distribution operations and substantially all of the golf courses, on-course retail pro shops and off-course retail partner locations in the United States and Europe had re-opened. Rounds of play have been strong since golf courses have reopened, which resulted in increased demand for Acushnet’s products during June 2020 and even greater demand for its products during the second half of 2020 in the United States and Europe. Rounds of play and demand for golf products in Korea remained strong through the end of 2020; however, Japan continued to be negatively impacted by COVID-19 with decreased rounds of play and lower demand for golf-related products.

At the beginning of the third quarter of 2020, Acushnet amended its credit agreement to, among other things, provide debt covenant relief for each of the fiscal quarters ending between September 30, 2020 and September 30, 2021. As of December 31, 2020, Acushnet had approximately $149.4 million of unrestricted cash and $392.2 million of availability under Acushnet’s revolving credit facility.

The impact of the COVID-19 pandemic continues to evolve and remains highly uncertain including the duration and severity of the pandemic, additional government-related shutdowns and a significant decrease in the current level of rounds of play and the related demand for golf-related products.

2021 Outlook
The full impact of the COVID-19 pandemic continues to be uncertain. Given this, the company will not provide fiscal 2021 guidance at this time.

Photo courtesy Acushnet