PART I. FINANCIAL INFORMATION This section presents the Company's financial information, including statements, notes, management's discussion, and market risk disclosures [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents the Company's unaudited condensed consolidated financial statements, including balance sheets, statements of operations, comprehensive income, cash flows, and shareholders' equity, along with detailed notes explaining significant accounting policies, financial instruments, debt, equity, and segment performance for the periods ended June 30, 2025 and 2024 [Condensed Consolidated Balance Sheets (Unaudited)](index=7&type=section&id=Condensed%20Consolidated%20Balance%20Sheets%20(Unaudited)) This statement provides a snapshot of the Company's assets, liabilities, and equity at specific points in time Condensed Consolidated Balance Sheets (Unaudited) | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | Change (2025 vs 2024) (in thousands) | | :-------------------------------- | :----------------------------- | :----------------------------- | :-------------------- | | Total Assets | $2,395,571 | $2,180,206 | +$215,365 | | Total Liabilities | $1,582,210 | $1,383,042 | +$199,168 | | Total Shareholders' Equity | $808,519 | $793,136 | +$15,383 | | Cash, cash equivalents and restricted cash | $60,055 | $53,059 | +$6,996 | | Accounts receivable, net | $429,421 | $218,368 | +$211,053 | | Inventories | $533,709 | $575,964 | -$42,255 | | Long-term debt | $911,001 | $753,081 | +$157,920 | [Condensed Consolidated Statements of Operations (Unaudited)](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20(Unaudited)) This statement details the Company's revenues, expenses, and net income over specific reporting periods Condensed Consolidated Statements of Operations (Unaudited) | Metric | Three months ended June 30, 2025 (in thousands) | Three months ended June 30, 2024 (in thousands) | Six months ended June 30, 2025 (in thousands) | Six months ended June 30, 2024 (in thousands) | | :------------------------------------- | :------------------------------------------ | :------------------------------------------ | :----------------------------------------- | :----------------------------------------- | | Net sales | $720,476 | $683,867 | $1,423,848 | $1,391,421 | | Gross profit | $354,316 | $333,460 | $691,478 | $675,812 | | Income from operations | $109,868 | $106,023 | $224,415 | $227,404 | | Net income attributable to Acushnet Holdings Corp. | $75,563 | $71,428 | $174,935 | $159,190 | | Basic EPS | $1.26 | $1.12 | $2.88 | $2.48 | | Diluted EPS | $1.25 | $1.11 | $2.87 | $2.47 | [Condensed Consolidated Statements of Comprehensive Income (Unaudited)](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20(Unaudited)) This statement presents net income and other comprehensive income components, reflecting total changes in equity from non-owner sources Condensed Consolidated Statements of Comprehensive Income (Unaudited) | Metric | Three months ended June 30, 2025 (in thousands) | Three months ended June 30, 2024 (in thousands) | Six months ended June 30, 2025 (in thousands) | Six months ended June 30, 2024 (in thousands) | | :------------------------------------------------ | :------------------------------------------ | :------------------------------------------ | :----------------------------------------- | :----------------------------------------- | | Net income | $75,079 | $70,164 | $174,104 | $154,723 | | Total other comprehensive income (loss) | $13,009 | $(7,534) | $19,550 | $(18,955) | | Comprehensive income attributable to Acushnet Holdings Corp. | $88,210 | $63,869 | $194,045 | $140,501 | [Condensed Consolidated Statements of Cash Flows (Unaudited)](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20(Unaudited)) This statement summarizes cash inflows and outflows from operating, investing, and financing activities Condensed Consolidated Statements of Cash Flows (Unaudited) | Metric | Six months ended June 30, 2025 (in thousands) | Six months ended June 30, 2024 (in thousands) | | :------------------------------------------ | :----------------------------------------- | :----------------------------------------- | | Cash flows provided by operating activities | $31,608 | $102,117 | | Cash flows used in investing activities | $(25,792) | $(22,110) | | Cash flows used in financing activities | $(2,132) | $(63,019) | | Net increase in cash, cash equivalents and restricted cash | $6,996 | $14,851 | [Condensed Consolidated Statements of Shareholders' Equity (Unaudited)](index=11&type=section&id=Condensed%20Consolidated%20Statements%20of%20Shareholders'%20Equity%20(Unaudited)) This statement details changes in the Company's equity accounts, including retained earnings and treasury stock Condensed Consolidated Statements of Shareholders' Equity (Unaudited) | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :------------------------------------- | :----------------------------- | :----------------------------- | | Total equity attributable to Acushnet Holdings Corp. | $808,519 | $765,247 | | Retained earnings | $224,228 | $180,276 | | Treasury stock, at cost | $(62,508) | $(62,500) | [Notes to Unaudited Condensed Consolidated Financial Statements](index=13&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) These notes provide detailed explanations and disclosures supporting the unaudited condensed consolidated financial statements [1. Summary of Significant Accounting Policies](index=13&type=section&id=1.%20Summary%20of%20Significant%20Accounting%20Policies) This section outlines the key accounting principles and methods used in preparing the financial statements - The Company deconsolidated Acushnet Lionscore Limited (a VIE, 40% owned) effective January 31, 2025, after shifting footwear production to a third-party supplier, and now accounts for its equity interest using the equity method[41](index=41&type=chunk)[42](index=42&type=chunk) - A non-cash gain on deconsolidation of **$20.9 million** was recorded for the six months ended June 30, 2025[42](index=42&type=chunk) - Foreign currency transaction gains were **$2.9 million** for the three months ended June 30, 2025 (vs. losses of $0.9 million in 2024) and **$4.3 million** for the six months ended June 30, 2025 (vs. losses of $1.0 million in 2024)[48](index=48&type=chunk) - The Company is evaluating the impact of recently issued FASB ASUs 2023-09 (Income Taxes), 2024-03 (Expense Disaggregation), and 2025-03 (Business Combinations/Consolidation)[49](index=49&type=chunk)[50](index=50&type=chunk)[51](index=51&type=chunk) [2. Allowance for Credit Losses](index=17&type=section&id=2.%20Allowance%20for%20Credit%20Losses) This note details the allowance for credit losses, reflecting changes in expected uncollectible accounts receivable Allowance for Credit Losses (in thousands) | Metric | June 30, 2025 (in thousands) | June 30, 2024 (in thousands) | | :--------------------------------------- | :----------------------------- | :----------------------------- | | Balance at beginning of period (YTD) | $7,238 | $8,840 | | Increase (decrease) in provision (YTD) | $(482) | $651 | | Amount of receivables written off (YTD) | $(293) | $(245) | | Balance at end of period | $6,803 | $9,123 | [3. Inventories](index=17&type=section&id=3.%20Inventories) This note provides a breakdown of inventory components, including raw materials, work-in-process, and finished goods Inventories (in thousands) | Component | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :---------------------- | :----------------------------- | :----------------------------- | | Raw materials and supplies | $135,636 | $137,150 | | Work-in-process | $26,498 | $33,549 | | Finished goods | $371,575 | $405,265 | | Total Inventories | $533,709 | $575,964 | [4. Product Warranty](index=17&type=section&id=4.%20Product%20Warranty) This note outlines the Company's product warranty obligations and related provisions and claims Product Warranty (in thousands) | Metric | Six months ended June 30, 2025 (in thousands) | Six months ended June 30, 2024 (in thousands) | | :-------------------------- | :----------------------------------------- | :----------------------------------------- | | Balance at beginning of period | $4,980 | $4,997 | | Provision | $3,307 | $3,798 | | Claims paid/costs incurred | $(2,997) | $(3,197) | | Balance at end of period | $5,475 | $5,511 | [5. Debt and Financing Arrangements](index=18&type=section&id=5.%20Debt%20and%20Financing%20Arrangements) This note details the Company's debt obligations, credit facilities, and compliance with financial covenants - Outstanding borrowings under the multi-currency revolving credit facility increased to **$562.5 million** as of June 30, 2025, from **$404.7 million** as of December 31, 2024, with a weighted average interest rate of **5.69%**[58](index=58&type=chunk) - The Company had **$383.3 million** in available borrowings under its multi-currency revolving credit facility and **$35.4 million** under local credit facilities as of June 30, 2025[58](index=58&type=chunk)[62](index=62&type=chunk) - The Company was in compliance with all covenants under its Amended Credit Agreement and the indenture governing its **$350.0 million** senior unsecured notes as of June 30, 2025[57](index=57&type=chunk)[61](index=61&type=chunk) [6. Derivative Financial Instruments](index=19&type=section&id=6.%20Derivative%20Financial%20Instruments) This note describes the Company's use of derivative instruments to manage foreign exchange and interest rate risks - The gross notional amount of foreign exchange forward contracts outstanding increased to **$213.0 million** as of June 30, 2025, from **$192.2 million** as of December 31, 2024[65](index=65&type=chunk) - No interest rate swap contracts were outstanding as of June 30, 2025, compared to a notional value of **$100.0 million** as of December 31, 2024[66](index=66&type=chunk) - The Company expects to reclassify a net loss of **$3.0 million** related to foreign exchange derivative instruments from accumulated other comprehensive loss into cost of goods sold within the next 12 months[67](index=67&type=chunk) [7. Fair Value Measurements](index=20&type=section&id=7.%20Fair%20Value%20Measurements) This note provides fair value measurements for financial assets and liabilities, categorized by valuation input levels Fair Value Measurements (in thousands) | Asset/Liability | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | Level | | :-------------------------------- | :----------------------------- | :----------------------------- | :---- | | Rabbi trust assets | $2,716 | $3,150 | Level 1 | | Foreign exchange derivative instruments (assets) | $806 | $8,135 | Level 2 | | Interest rate derivative instruments (assets) | $0 | $4 | Level 2 | | Deferred compensation program assets | $664 | $633 | Level 1 | | Foreign exchange derivative instruments (liabilities) | $4,894 | $251 | Level 2 | | Interest rate derivative instruments (liabilities) | $0 | $1 | Level 2 | | Deferred compensation program liabilities | $664 | $633 | Level 1 | [8. Pension and Other Postretirement Benefits](index=22&type=section&id=8.%20Pension%20and%20Other%20Postretirement%20Benefits) This note details the net periodic costs and credits associated with the Company's pension and postretirement benefit plans Pension and Other Postretirement Benefits (in thousands) | Metric | Six months ended June 30, 2025 (in thousands) | Six months ended June 30, 2024 (in thousands) | | :------------------------------------ | :----------------------------------------- | :----------------------------------------- | | Net periodic pension benefit cost | $4,415 | $4,510 | | Net periodic postretirement benefit credit | $(83) | $(150) | [9. Income Taxes](index=22&type=section&id=9.%20Income%20Taxes) This note presents income tax expense, effective tax rates, and the impact of recent tax legislation Income Taxes (in thousands) | Metric | Three months ended June 30, 2025 (in thousands) | Three months ended June 30, 2024 (in thousands) | Six months ended June 30, 2025 (in thousands) | Six months ended June 30, 2024 (in thousands) | | :-------------------- | :------------------------------------------ | :------------------------------------------ | :----------------------------------------- | :----------------------------------------- | | Income tax expense | $18,603 | $21,212 | $40,173 | $44,619 | | Effective tax rate (ETR) | 19.9% | 23.2% | 18.7% | 22.4% | - The decrease in the effective tax rate for both the three and six months ended June 30, 2025, was primarily driven by changes in the Company's jurisdictional mix of earnings[81](index=81&type=chunk) - The U.S. government enacted the One Big Beautiful Bill Act on July 4, 2025, which includes changes to the U.S. corporate income tax system, such as immediate expensing of R&D; the Company is currently assessing its impact[82](index=82&type=chunk) [10. Common Stock](index=23&type=section&id=10.%20Common%20Stock) This note provides information on common stock, including dividends declared and share repurchase activities Common Stock Dividends Declared (in thousands) | Metric | Total dividends declared in 2025 (in thousands) | Total dividends declared in 2024 (in thousands) | | :-------------------------------- | :---------------------------------------- | :---------------------------------------- | | Dividends per Common Share | $0.470 | $0.860 | | Amount | $28,874 | $55,291 | - The Company repurchased **1,889,313 shares** of common stock for an aggregate of **$125.0 million** at an average price of **$66.17** during the six months ended June 30, 2025[88](index=88&type=chunk)[182](index=182&type=chunk) - As of June 30, 2025, **$327.2 million** remained under the current share repurchase authorization, with **$62.5 million** utilized on July 10, 2025, to repurchase **953,406 shares** from Magnus[88](index=88&type=chunk)[182](index=182&type=chunk) [11. Equity Incentive Plans](index=24&type=section&id=11.%20Equity%20Incentive%20Plans) This note details the Company's equity incentive plans, including available shares and unrecognized compensation expense - Stockholders approved the Amended and Restated 2015 Omnibus Incentive Plan on June 2, 2025, increasing available shares by **1,266,000** and extending the term to June 2, 2035[91](index=91&type=chunk) - As of June 30, 2025, **3,199,282 shares** remained available for future grants under the Amended and Restated 2015 Plan[92](index=92&type=chunk) - Unrecognized compensation expense for unvested RSUs and PSUs was **$31.8 million** and **$17.8 million**, respectively, as of June 30, 2025, expected to be recognized over **1.5 and 2.0 years**[97](index=97&type=chunk) [12. Accumulated Other Comprehensive Loss, Net of Tax](index=27&type=section&id=12.%20Accumulated%20Other%20Comprehensive%20Loss%2C%20Net%20of%20Tax) This note presents changes in accumulated other comprehensive loss, including foreign currency translation and derivative instruments Accumulated Other Comprehensive Loss, Net of Tax (in thousands) | Component | Balance as of Dec 31, 2024 (in thousands) | Other comprehensive income (loss) before reclassifications (in thousands) | Amounts reclassified from AOCI, net of tax (in thousands) | Tax benefit (in thousands) | Balance as of June 30, 2025 (in thousands) | | :-------------------------------- | :---------------------------------------- | :------------------------------------------------------ | :------------------------------------------------------- | :------------------------- | :---------------------------------------- | | Foreign Currency Translation | $(123,497) | $27,708 | $0 | $0 | $(95,789) | | Foreign Exchange Derivative Instruments | $4,772 | $(7,333) | $(3,115) | $2,829 | $(2,847) | | Interest Rate Swap Derivative Instruments | $2 | $0 | $(3) | $1 | $0 | | Pension and Other Postretirement | $(21,592) | $(904) | $(334) | $261 | $(22,569) | | Total | $(140,315) | $19,471 | $(3,452) | $3,091 | $(121,205) | [13. Net Income per Common Share](index=27&type=section&id=13.%20Net%20Income%20per%20Common%20Share) This note provides basic and diluted net income per common share calculations and weighted average shares outstanding Net Income per Common Share | Metric | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :------------------------------------------------ | :------------------------------- | :------------------------------- | :------------------------------ | :------------------------------ | | Basic EPS (in dollars) | $1.26 | $1.12 | $2.88 | $2.48 | | Diluted EPS (in dollars) | $1.25 | $1.11 | $2.87 | $2.47 | | Basic Weighted Average Shares (shares) | 60,156,224 | 63,935,451 | 60,737,693 | 64,278,286 | | Diluted Weighted Average Shares (shares) | 60,333,409 | 64,160,688 | 60,905,869 | 64,524,931 | - **234,260 RSUs** and **241,534 RSUs** were excluded from the diluted EPS calculation for the three and six months ended June 30, 2025, respectively, as their impact was anti-dilutive[104](index=104&type=chunk) [14. Segment Information](index=28&type=section&id=14.%20Segment%20Information) This note provides financial data for the Company's reportable segments and net sales by geographic region - The Company operates with three reportable segments: Titleist golf equipment, FootJoy golf wear, and Golf gear[105](index=105&type=chunk) Segment Performance (Three Months Ended June 30, 2025) | Segment | Net Sales (in thousands) | Operating Income (in thousands) | | :---------------------- | :----------------------- | :-------------------------- | | Titleist Golf Equipment | $453,797 | $85,895 | | FootJoy Golf Wear | $152,975 | $11,589 | | Golf Gear | $76,652 | $17,177 | | Total Reportable Segments | $683,424 | $114,661 | Segment Performance (Six Months Ended June 30, 2025) | Segment | Net Sales (in thousands) | Operating Income (in thousands) | | :---------------------- | :----------------------- | :-------------------------- | | Titleist Golf Equipment | $874,889 | $161,743 | | FootJoy Golf Wear | $331,411 | $36,104 | | Golf Gear | $147,615 | $30,943 | | Total Reportable Segments | $1,353,915 | $228,790 | Net Sales by Geography (Six Months Ended June 30, 2025) | Region | Net Sales (in thousands) | | :-------------- | :----------------------- | | United States | $858,713 | | EMEA | $202,503 | | Japan | $65,404 | | Korea | $146,292 | | Rest of World | $150,936 | | Total | $1,423,848 | [15. Commitments and Contingencies](index=30&type=section&id=15.%20Commitments%20and%20Contingencies) This note discloses the Company's legal proceedings, purchase commitments, and off-balance sheet arrangements - The Company is involved in lawsuits associated with the normal conduct of its businesses but cannot predict the outcome or estimate the ultimate monetary loss, and has not recorded a liability for potential losses[115](index=115&type=chunk) [16. Restructuring Costs](index=31&type=section&id=16.%20Restructuring%20Costs) This note details costs associated with restructuring initiatives, including the VBR program and factory cessation - The Company initiated a Voluntary Bridge to Retirement (VBR) program in Q2 2025, incurring **$6.4 million** in restructuring costs for the three and six months ended June 30, 2025, with an additional **$7.0 million** expected in Q3 and Q4 2025[117](index=117&type=chunk) - Lionscore ceased manufacturing at its FDL factory in Q1 2025, resulting in total employee termination costs of **$18.0 million** related to restructuring plans[119](index=119&type=chunk)[120](index=120&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=32&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management analyzes financial condition, results of operations, liquidity, and market risks, including recent developments and segment performance [Overview](index=32&type=section&id=Overview) This section provides a general description of the Company's business, target market, and product portfolio - The Company is a global leader in the design, development, manufacture, and distribution of performance-driven golf products, with Titleist and FootJoy as its core brands[122](index=122&type=chunk) - The target market is 'dedicated golfers' who prioritize performance and quality, with a strategy to leverage professional player endorsements[123](index=123&type=chunk) - The product portfolio includes a favorable mix of consumable products (golf balls, golf gloves) and more durable products (golf clubs, golf shoes, golf gear, golf outerwear and apparel)[125](index=125&type=chunk) [Recent Developments](index=32&type=section&id=Recent%20Developments) This section highlights significant events impacting the Company, including restructuring, deconsolidation, tariffs, and tax law changes - The Company initiated a Voluntary Bridge to Retirement (VBR) program in Q2 2025, incurring **$6.4 million** in restructuring costs, with an additional **$7.0 million** expected in Q3-Q4 2025[126](index=126&type=chunk) - The FootJoy footwear joint venture (Lionscore) was deconsolidated in January 2025 after shifting production to Vietnam, resulting in a non-cash gain of **$20.9 million** for the six months ended June 30, 2025[127](index=127&type=chunk)[128](index=128&type=chunk) - Significant U.S. tariffs (including a **10% baseline universal tariff** and individualized tariffs) are impacting import costs and creating uncertainty, potentially leading to retaliatory tariffs and currency fluctuations[129](index=129&type=chunk) - The 'One Big Beautiful Bill Act,' enacted July 4, 2025, includes changes to U.S. corporate income tax, such as immediate expensing of R&D; the Company is assessing its impact[130](index=130&type=chunk) [Key Performance Measures](index=33&type=section&id=Key%20Performance%20Measures) This section defines and presents the key financial metrics used by management to evaluate business performance - The Company uses net sales on a constant currency basis, Adjusted EBITDA, Adjusted EBITDA margin, and segment operating income (loss) to evaluate its business performance[131](index=131&type=chunk) Adjusted EBITDA and Margin (in thousands) | Metric | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :------------------ | :------------------------------- | :------------------------------- | :------------------------------ | :------------------------------ | | Adjusted EBITDA | $143,145 (in thousands) | $131,013 (in thousands) | $282,001 (in thousands) | $284,704 (in thousands) | | Adjusted EBITDA margin | 19.9% | 19.2% | 19.8% | 20.5% | [Results of Operations](index=35&type=section&id=Results%20of%20Operations) This section analyzes the Company's financial results, comparing performance across different periods and segments [Three Months Ended June 30, 2025 Compared to the Three Months Ended June 30, 2024](index=36&type=section&id=Three%20Months%20Ended%20June%2030%2C%202025%20Compared%20to%20the%20Three%20Months%20Ended%20June%2030%2C%202024) This section compares the Company's financial performance for the three-month periods, highlighting changes in sales, gross profit, and expenses - Net sales increased **5.4%** (**4.7%** on a constant currency basis) to **$720.5 million**, driven by Titleist golf equipment and Golf gear, partially offset by FootJoy golf wear[141](index=141&type=chunk)[142](index=142&type=chunk) - Gross profit increased by **$20.8 million**, with gross margin rising to **49.2%** from **48.8%**, primarily due to increases in Titleist golf equipment, Golf gear, and FootJoy golf wear[146](index=146&type=chunk) - Selling, general and administrative (SG&A) expenses increased by **$14.2 million**, primarily due to higher selling, administrative, and advertising/promotion expenses, including **$6.4 million** in VBR restructuring costs[147](index=147&type=chunk) - Titleist Golf Equipment net sales increased **6.8%** (**6.1%** constant currency) to **$453.8 million**, driven by higher golf club average selling prices and 2025 Pro V1 golf ball sales volumes, while operating income slightly decreased by **$0.3 million**[141](index=141&type=chunk)[151](index=151&type=chunk)[152](index=152&type=chunk) - FootJoy Golf Wear net sales decreased **1.3%** (**2.0%** constant currency) to **$153.0 million** due to lower footwear sales volumes, but operating income increased by **$3.8 million** (**48.7%**) due to lower manufacturing costs and a favorable product mix[141](index=141&type=chunk)[153](index=153&type=chunk)[154](index=154&type=chunk) - Golf Gear net sales increased **7.9%** (**7.2%** constant currency) to **$76.7 million**, driven by higher sales volumes in golf bags and golf gloves, and operating income increased by **$3.2 million** (**22.9%**)[141](index=141&type=chunk)[155](index=155&type=chunk)[156](index=156&type=chunk) [Six Months Ended June 30, 2025 Compared to the Six Months Ended June 30, 2024](index=38&type=section&id=Six%20Months%20Ended%20June%2030%2C%202025%20Compared%20to%20the%20Six%20Months%20Ended%20June%2030%2C%202024) This section compares the Company's financial performance for the six-month periods, detailing changes in sales, gross profit, and other income - Net sales increased **2.3%** (**2.9%** on a constant currency basis) to **$1,423.8 million**, driven by Titleist golf equipment and Golf gear, partially offset by FootJoy golf wear[157](index=157&type=chunk)[158](index=158&type=chunk) - Gross profit increased by **$15.7 million**, with gross margin remaining flat at **48.6%**[161](index=161&type=chunk) - SG&A expenses increased by **$13.5 million**, primarily due to higher advertising/promotion, selling, and administrative expenses, including **$6.4 million** in VBR costs (vs. $7.0 million for supply chain optimization in prior year)[162](index=162&type=chunk) - Other income, net, increased by **$19.8 million**, primarily due to a **$20.9 million** non-cash gain from the FootJoy footwear joint venture deconsolidation[165](index=165&type=chunk) - Titleist Golf Equipment net sales increased **4.5%** (**4.9%** constant currency) to **$874.9 million**, driven by higher 2025 Pro V1 golf ball sales volumes and golf club ASPs, but operating income decreased by **$16.2 million** (**9.1%**) due to higher operating expenses[157](index=157&type=chunk)[167](index=167&type=chunk)[168](index=168&type=chunk) - FootJoy Golf Wear net sales decreased **4.2%** (**3.6%** constant currency) to **$331.4 million** due to lower footwear and apparel sales volumes, while operating income increased by **$1.4 million** (**4.0%**) due to lower operating expenses[157](index=157&type=chunk)[169](index=169&type=chunk)[170](index=170&type=chunk) - Golf Gear net sales increased **5.0%** (**5.5%** constant currency) to **$147.6 million**, driven by higher ASPs and sales volumes in golf gloves and bags, and operating income increased by **$7.3 million** (**30.9%**)[157](index=157&type=chunk)[171](index=171&type=chunk)[172](index=172&type=chunk) [Liquidity and Capital Resources](index=40&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the Company's ability to generate and manage cash, including debt, dividends, share repurchases, and capital expenditures [Debt and Financing Arrangements](index=42&type=section&id=Debt%20and%20Financing%20Arrangements) This section details available credit, outstanding borrowings, and compliance with debt covenants - As of June 30, 2025, the Company had **$383.3 million** of availability under its multi-currency revolving credit facility and **$35.4 million** available under local credit facilities[177](index=177&type=chunk) - The Company was in compliance with all covenants under its credit agreement and the indenture governing its senior unsecured notes as of June 30, 2025[178](index=178&type=chunk)[179](index=179&type=chunk) [Dividends and Share Repurchase Program](index=42&type=section&id=Dividends%20and%20Share%20Repurchase%20Program) This section outlines dividend payments and common stock repurchase activities, including remaining authorization - The Company paid **$28.6 million** in dividends during the six months ended June 30, 2025, and declared a Q3 2025 dividend of **$0.235 per share**[181](index=181&type=chunk) - During the six months ended June 30, 2025, the Company repurchased **1,889,313 shares** of common stock for **$125.0 million**[182](index=182&type=chunk) - As of June 30, 2025, **$327.2 million** remained under the share repurchase authorization, with **$62.5 million** utilized on July 10, 2025[182](index=182&type=chunk) [Capital Expenditures and Other Investments](index=43&type=section&id=Capital%20Expenditures%20and%20Other%20Investments) This section details investments in capital expenditures and the new global cloud-based ERP platform - Invested **$25.1 million** in capital expenditures during the six months ended June 30, 2025, with full-year capital expenditures expected to be approximately **$70.0 million**[184](index=184&type=chunk) - Invested **$21.2 million** in capitalized implementation costs for a new global cloud-based ERP platform during the six months ended June 30, 2025, with full-year costs expected to be **$30.0 to $35.0 million**[185](index=185&type=chunk) [Cash Flows](index=43&type=section&id=Cash%20Flows) This section analyzes cash flows from operating, investing, and financing activities and their drivers Cash Flows (in thousands) | Metric | Six months ended June 30, 2025 (in thousands) | Six months ended June 30, 2024 (in thousands) | | :------------------------------------------ | :----------------------------------------- | :----------------------------------------- | | Operating activities | $31,608 | $102,117 | | Investing activities | $(25,792) | $(22,110) | | Financing activities | $(2,132) | $(63,019) | | Net increase in cash, cash equivalents and restricted cash | $6,996 | $14,851 | - The decrease in cash provided by operating activities was primarily driven by an increase in cash used to fund working capital[187](index=187&type=chunk) - The decrease in cash used in financing activities was primarily driven by an increase in net proceeds from credit facilities, partially offset by an increase in purchases of common stock[189](index=189&type=chunk) [Contractual Obligations and Off-Balance Sheet Arrangements](index=43&type=section&id=Contractual%20Obligations%20and%20Off-Balance%20Sheet%20Arrangements) This section confirms no material changes to purchase commitments or off-balance sheet arrangements - No material changes to purchase commitments (advertising, finished goods, capital expenditures, endorsement arrangements) since December 31, 2024[190](index=190&type=chunk) - No material off-balance sheet arrangements as of June 30, 2025[191](index=191&type=chunk) [Critical Accounting Estimates](index=44&type=section&id=Critical%20Accounting%20Estimates) This section confirms no material changes to critical accounting estimates from the prior annual report - There have been no material changes to the Company's critical accounting estimates from the information provided in its Annual Report on Form 10-K for the year ended December 31, 2024[192](index=192&type=chunk) [Recently Issued Accounting Standards](index=44&type=section&id=Recently%20Issued%20Accounting%20Standards) This section addresses the impact of recently issued accounting standards on the financial statements - Other than as disclosed in Note 1, recently issued accounting standards are not expected to have a significant impact on the Company's consolidated financial statements[193](index=193&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=44&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section details the Company's exposure to interest rate, foreign exchange, commodity, and inflation risks, and mitigation strategies [Interest Rate Risk](index=44&type=section&id=Interest%20Rate%20Risk) This section discusses the Company's exposure to interest rate fluctuations on variable-rate debt and hedging strategies - The Company is exposed to interest rate risk from its variable-rate credit facilities[196](index=196&type=chunk) - A hypothetical **one percentage point increase** in interest rates on **$585.9 million** of variable-rate debt would increase annual pre-tax interest expense by **$5.9 million**[198](index=198&type=chunk) - No interest rate swap contracts were outstanding as of June 30, 2025, which are typically used to reduce interest rate risk[197](index=197&type=chunk) [Foreign Exchange Risk](index=44&type=section&id=Foreign%20Exchange%20Risk) This section describes the Company's exposure to foreign currency fluctuations and its use of forward contracts for hedging - The Company is exposed to foreign currency transaction risk and currency translation risk[199](index=199&type=chunk) - Foreign exchange forward contracts are used to reduce foreign currency risk, primarily for USD, JPY, GBP, CAD, KRW, AUD, and EUR[200](index=200&type=chunk) - As of June 30, 2025, the gross notional amount of foreign exchange forward contracts was **$213.0 million**, with a net settlement liability of **$4.1 million**[201](index=201&type=chunk) - A hypothetical **10% weakening** of the U.S. dollar against all covered currencies would increase the net settlement liability by **$18.4 million** to **$22.5 million**[201](index=201&type=chunk) [Commodity Risk](index=45&type=section&id=Commodity%20Risk) This section identifies the Company's exposure to price and availability risks for key raw materials - The Company is exposed to commodity price and availability risks for key materials such as polybutadiene, zinc diacrylate, urethane, ionomers (golf balls), titanium, steel (golf clubs), leather, synthetic fabrics (golf wear/gear), and petroleum-based materials[204](index=204&type=chunk) [Impact of Inflation](index=45&type=section&id=Impact%20of%20Inflation) This section discusses the potential material impact of inflation on raw materials, input costs, and wage rates - Inflation in raw materials, other input costs (including inbound freight), and wage rates has impacted and could continue to materially affect the Company's business, results of operations, financial position, and cash flows[205](index=205&type=chunk) [Item 4. Controls and Procedures](index=45&type=section&id=Item%204.%20Controls%20and%20Procedures) Management evaluated and confirmed the effectiveness of disclosure controls and procedures, with no material changes to internal control over financial reporting - The Company's disclosure controls and procedures were evaluated and deemed effective as of June 30, 2025[206](index=206&type=chunk) - There were no material changes in internal control over financial reporting during the fiscal quarter ended June 30, 2025[207](index=207&type=chunk) PART II. OTHER INFORMATION This section includes legal proceedings, risk factors, equity sales, defaults, safety disclosures, and exhibits [Item 1. Legal Proceedings](index=46&type=section&id=Item%201.%20Legal%20Proceedings) The Company is involved in routine lawsuits, with outcomes and potential losses currently unpredictable and no liability recorded - The Company is party to lawsuits associated with the normal conduct of its businesses and operations[208](index=208&type=chunk) - It is not possible to predict the outcome of pending actions, and no liability has been recorded related to potential losses[208](index=208&type=chunk) [Item 1A. Risk Factors](index=46&type=section&id=Item%201A.%20Risk%20Factors) This section updates risk factors from the 10-K, focusing on material adverse effects of U.S. and foreign trade policies, tariffs, and currency fluctuations - No material changes to risk factors from the 2024 Annual Report on Form 10-K, except for updates on trade policies[209](index=209&type=chunk) - U.S. and foreign trade policies, including a **baseline universal tariff of 10%** and additional individualized tariffs, may have a material adverse effect on the Company's business, financial condition, and results of operations[210](index=210&type=chunk) - Uncertainty about tariffs may increase market volatility and currency exchange rate fluctuations, and hedging activities may not fully offset adverse financial impacts[211](index=211&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=46&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details common stock repurchase activities for Q2 2025, including open market and Magnus Holdings transactions - Total shares repurchased in Q2 2025 were **1,348,369** at an average price of **$65.54**, for an aggregate value of **$88.4 million**[213](index=213&type=chunk) - This includes **935,907 shares** repurchased from Magnus on April 10, 2025, for **$62.5 million**[213](index=213&type=chunk) - As of June 30, 2025, a liability of **$62.5 million** was recognized to purchase an additional **953,406 shares** of common stock from Magnus[212](index=212&type=chunk) [Item 3. Defaults Upon Senior Securities](index=48&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) No defaults upon senior securities were reported - No defaults upon senior securities were reported[214](index=214&type=chunk) [Item 4. Mine Safety Disclosures](index=48&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) No mine safety disclosures were reported - No mine safety disclosures were reported[215](index=215&type=chunk) [Item 5. Other Information](index=48&type=section&id=Item%205.%20Other%20Information) No other information was reported - No other information was reported[216](index=216&type=chunk) [Item 6. Exhibits](index=49&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the 10-Q report, including incentive plans, certifications, and XBRL documents - Includes the Acushnet Holdings Corp. Amended and Restated 2015 Omnibus Incentive Plan (Exhibit 10.1)[217](index=217&type=chunk) - Includes certifications by the CEO and CFO under Sections 302 and 906 of the Sarbanes-Oxley Act of 2002 (Exhibits 31.1, 31.2, 32.1, 32.2)[217](index=217&type=chunk) - Includes Inline XBRL documents for financial data (Exhibits 101.INS, 101.SCH, 101.CAL, 101.DEF, 101.LAB, 101.PRE, 104)[217](index=217&type=chunk) [Signatures](index=50&type=section&id=Signatures) The report was signed by the President and CEO, David Maher, and EVP and CFO, Sean Sullivan, on August 7, 2025 - The report was signed by David Maher (President and Chief Executive Officer) and Sean Sullivan (Executive Vice President and Chief Financial Officer) on August 7, 2025[222](index=222&type=chunk)

Core Insights - Acushnet reported revenue of $720.48 million for the quarter ended June 2025, reflecting a year-over-year increase of 5.4% [1] - The company's EPS was $1.25, up from $1.11 in the same quarter last year, but fell short of the consensus estimate of $1.33, resulting in an EPS surprise of -6.02% [1] - The revenue exceeded the Zacks Consensus Estimate of $713.47 million, leading to a revenue surprise of +0.98% [1] Key Metrics - Titleist golf balls generated net sales of $262.2 million, which was below the average estimate of $267.94 million, but showed a year-over-year increase of 5.9% [4] - FootJoy golf wear reported net sales of $153 million, slightly below the average estimate of $154.05 million, representing a year-over-year decline of 2.7% [4] - Titleist golf gear achieved net sales of $76.7 million, surpassing the average estimate of $72 million, with a year-over-year increase of 11.3% [4] - Titleist golf clubs had net sales of $191.6 million, which was below the estimated $195.72 million, but still reflected a year-over-year growth of 7.9% [4] Stock Performance - Acushnet's shares have returned +2.6% over the past month, outperforming the Zacks S&P 500 composite's +1.2% change [3] - The stock currently holds a Zacks Rank 2 (Buy), indicating potential for outperformance in the near term [3]

Financial Data and Key Metrics Changes - Acushnet reported worldwide net sales of $720 million for the second quarter, a 5% increase year-over-year, driven by strong performance in golf equipment and gear segments [6][14] - Adjusted EBITDA for the second quarter was $143 million, reflecting a 9% year-over-year increase, while first half adjusted EBITDA was $282 million, down 1% [6][14] - Gross profit for the second quarter was $354 million, up $21 million compared to the previous year, with a gross margin of 49.2%, an increase of 40 basis points [15][16] Business Line Data and Key Metrics Changes - Golf equipment sales increased mid-single digits in both the quarter and first half, with Titleist golf equipment revenues up 10% compared to 2023 [8][10] - Golf gear sales rose 7% in the second quarter and 6% for the first half, while FootJoy sales decreased by 2% in the quarter and 4% for the half [9][10] - Products not allocated to a reportable segment, including shoes, outerwear, and apparel, experienced double-digit growth in the first half [11] Market Data and Key Metrics Changes - The US market saw 1.5 million new golfers in 2024, contributing to a 2% increase in worldwide rounds of play in the first half [5][12] - EMEA revenues increased by 6% in the first half, with significant growth in the UK where rounds of play rose by 20% [11][12] - Revenues in Japan and Korea increased by 43% in the first half, although the apparel, footwear, and gear markets in these regions have been relatively soft [12] Company Strategy and Development Direction - Acushnet is focused on long-term investments in golf equipment innovation and technology to enhance golfer connections [7][20] - The company aims to mitigate tariff impacts through supply chain optimization, vendor sharing programs, and selective pricing actions [21] - Acushnet is committed to returning capital to shareholders while investing in business growth [18][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the golf industry's fundamentals and the company's product pipeline despite macroeconomic uncertainties [12][13] - The company anticipates low single-digit net sales growth for the second half of 2025, with a full-year FX headwind of approximately $5 million [20] - Management is closely monitoring the dynamic tariff landscape and its potential impact on consumer spending [20][21] Other Important Information - Acushnet initiated a voluntary bridge to retirement program, resulting in restructuring costs of $6.4 million included in SG&A expenses [16] - The company returned approximately $154 million to shareholders in the first half, including $125 million in share repurchases and $29 million in cash dividends [19] Q&A Session Summary Question: Impact of inflation and pricing on the industry - Management noted that price increases have been observed in gear, footwear, and apparel, with some resilience in the ball business due to US manufacturing [24][25] Question: Demand and sell-through commentary - Management expressed satisfaction with sell-in results and indicated that inventory levels are normalized, linking this to healthy sell-through trends [35][36] Question: Customer response to new product launches - Management reported positive sell-through trends for new product launches, including the Pro V1 golf balls and new T-series irons, indicating strong market reception [44][46]

Financial Data and Key Metrics Changes - Acushnet reported worldwide net sales of $720 million for Q2 2025, a 5% increase year-over-year, driven by strong performance in golf equipment and gear segments [6][13] - For the first half of 2025, net sales reached $1.42 billion, up 3%, while adjusted EBITDA was $282 million, down 1% [6][13] - Gross profit for Q2 was $354 million, an increase of $21 million compared to Q2 2024, with a gross margin of 49.2%, up 40 basis points year-over-year [14][15] Business Line Data and Key Metrics Changes - Golf equipment sales increased mid-single digits in both the quarter and first half, led by new Pro V1 golf ball models and strong performance in GT metals and hybrid franchises [7][8] - Titleist golf equipment sales were up 10% compared to 2023, with growth in all regions, particularly in the US and EMEA [7][10] - Gear sales increased 7% in Q2 and 6% for the first half, with core Titleist categories growing mid-single digits [8][9] - FootJoy sales were down 2% in Q2 and 4% for the first half, aligning with expectations as the company shifts focus to premium performance footwear [9][10] Market Data and Key Metrics Changes - The US market saw 1.5 million new golfers in 2024, marking the seventh consecutive year of growth, contributing to a 2% increase in worldwide rounds of play [5][6] - EMEA revenues increased by 6% in the first half, driven by gains in Titleist golf equipment, particularly golf balls [10][11] - Revenues in Japan and Korea rose by 43% in the first half, although apparel, footwear, and gear markets remained soft [11] Company Strategy and Development Direction - Acushnet is focused on long-term growth through investments in golf equipment innovation and technology [6][12] - The company aims to manage macro uncertainties while delivering high-quality products and services to dedicated golfers [12][20] - Strategic initiatives include optimizing supply chain footprint and selective pricing actions to mitigate tariff impacts [21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the golf industry's fundamentals and the company's product pipeline despite macroeconomic uncertainties [11][12] - The company anticipates low single-digit net sales growth for the second half of 2025, with a full-year FX headwind of approximately $5 million [20] - Management is closely monitoring tariff developments and their potential impact on consumer spending [20][21] Other Important Information - Acushnet returned approximately $154 million to shareholders through share repurchases and cash dividends [19] - The company initiated a voluntary retirement program, resulting in restructuring costs of $6.4 million in Q2 [15][16] Q&A Session Summary Question: Impact of inflation and pricing on the industry - Management noted that price increases have been observed in gear, footwear, and apparel, with some immunity in the ball business due to US manufacturing [23][25] Question: Demand and sell-through commentary - Management expressed satisfaction with sell-in results and indicated that inventory levels are normalized, linking this to healthy sell-through trends [35][36] Question: Customer response to new product launches - Management reported positive sell-through trends for new launches, including the Pro V1 and T series irons, with confidence in the back half of the year [44][46]

Financial Performance - Q2 2025 - Net sales reached $720.5 million, a 5.4% year-over-year increase, or 4.7% on a constant currency basis[9] - Golf Balls net sales were $262.2 million, up 5.9% year-over-year, or 5.4% on a constant currency basis[9] - Golf Clubs net sales increased to $191.6 million, a 7.9% year-over-year increase, or 7.0% on a constant currency basis[9] - Adjusted EBITDA was $143.1 million, a 9.2% increase compared to the previous year[9] - Adjusted EBITDA margin was 19.9% compared to 19.2% in the prior year[19] Financial Performance - H1 2025 - Net sales totaled $1,423.8 million, a 2.3% year-over-year increase, or 2.9% on a constant currency basis[9] - Golf Balls net sales were $475.5 million, up 4.4% year-over-year, or 4.7% on a constant currency basis[9] - Golf Clubs net sales increased to $399.4 million, a 4.7% year-over-year increase, or 5.2% on a constant currency basis[9] - Adjusted EBITDA was $282.0 million, a decrease of 0.9% compared to the previous year[9] - Adjusted EBITDA margin was 19.8% compared to 20.5% in the prior year[19] Regional Performance - Q2 2025 - United States net sales were $434.5 million, up 6.4% year-over-year[10] - EMEA net sales were $98.6 million, up 13.7% year-over-year, or 8.0% on a constant currency basis[10] Outlook - The company expects 2025 second half sales to increase low-single digits when compared to 2024[21]

Group 1: Earnings Performance - Acushnet reported quarterly earnings of $1.25 per share, missing the Zacks Consensus Estimate of $1.33 per share, but showing an increase from $1.11 per share a year ago, resulting in an earnings surprise of -6.02% [1] - The company posted revenues of $720.48 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 0.98% and increasing from $683.87 million year-over-year [2] - Over the last four quarters, Acushnet has surpassed consensus EPS estimates three times and topped consensus revenue estimates two times [2] Group 2: Stock Performance and Outlook - Acushnet shares have gained approximately 12.1% since the beginning of the year, outperforming the S&P 500's gain of 7.9% [3] - The company's earnings outlook, including current consensus earnings expectations for upcoming quarters, will be crucial for investors [4] - The current consensus EPS estimate for the upcoming quarter is $0.86 on revenues of $636.17 million, and for the current fiscal year, it is $3.54 on revenues of $2.51 billion [7] Group 3: Industry Context - The Leisure and Recreation Products industry, to which Acushnet belongs, is currently ranked in the bottom 26% of over 250 Zacks industries, indicating potential challenges [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact Acushnet's stock performance [5][6]

[Financial Highlights and Management Commentary](index=1&type=section&id=Financial%20Highlights%20and%20Management%20Commentary) Acushnet Holdings Corp. achieved strong Q2 and year-to-date 2025 financial results, driven by growth in Titleist golf equipment and Golf gear [Overall Performance Summary](index=1&type=section&id=Overall%20Performance%20Summary) Acushnet Holdings Corp. reported strong Q2 and year-to-date 2025 net sales and income growth, primarily from Titleist golf equipment and Golf gear | Metric | Q2 2025 | Q2 YoY Change | YTD 2025 | YTD YoY Change | | :--- | :--- | :--- | :--- | :--- | | Net Sales | $720.5M | +5.4% | $1,423.8M | +2.3% | | Net Sales (Constant Currency) | - | +4.7% | - | +2.9% | | Net Income | $75.6M | +5.9% | $174.9M | +9.9% | | Adjusted EBITDA | $143.1M | +9.2% | $282.0M | -0.9% | - Year-to-date constant currency net sales increased by **3%**, driven by growth in Titleist golf equipment and Golf gear. The company noted a positive response to new Pro V1 models and continued growth in Titleist GT drivers and fairways[4](index=4&type=chunk) [Management Commentary](index=1&type=section&id=Management%20Commentary) CEO David Maher highlighted the company's strong performance despite a dynamic environment and poor spring weather, with positive golf industry fundamentals - The U.S. golfer base continued its growth for the **seventh straight year in 2024**, and global participation is described as healthy and resilient[5](index=5&type=chunk) - Upcoming product launches for the second half of 2025 include new Titleist T-series irons, Scotty Cameron putters, and extensions to the FJ Hyperflex and Quantum golf shoe lines[5](index=5&type=chunk) [Detailed Financial Performance](index=2&type=section&id=Detailed%20Financial%20Performance) This section details Acushnet's financial performance for Q2 and the first six months of 2025, analyzing results by segment and geography [Second Quarter 2025 Financial Results](index=2&type=section&id=Second%20Quarter%202025%20Financial%20Results) In Q2 2025, consolidated net sales grew 5.4% to $720.5 million, driven by Titleist golf equipment and Golf gear, with net income increasing 5.9% to $75.6 million [Q2 Performance Overview](index=2&type=section&id=Q2%20Performance%20Overview) A summary of Acushnet's key financial metrics for the second quarter of 2025, including net sales, net income, and Adjusted EBITDA | Financial Metric | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Net Sales | $720.5M | $683.9M | +5.4% | | Net Income | $75.6M | $71.4M | +5.9% | | Adjusted EBITDA | $143.1M | $131.0M | +9.2% | - The increase in net sales was primarily driven by higher average selling prices in golf clubs and higher sales volumes in golf balls within the Titleist segment, along with growth in Golf gear[7](index=7&type=chunk) - Adjusted EBITDA margin improved to **19.9%** from 19.2% in the prior year period[13](index=13&type=chunk) [Q2 Performance by Segment](index=2&type=section&id=Q2%20Performance%20by%20Segment) An overview of Acushnet's second-quarter 2025 net sales performance across its Titleist, FootJoy, and Golf gear segments | Segment | Net Sales Change (YoY) | Constant Currency Change (YoY) | Key Drivers | | :--- | :--- | :--- | :--- | | Titleist golf equipment | +6.8% | +6.1% | Higher ASP in clubs, higher volume in 2025 Pro V1 balls | | FootJoy golf wear | -1.3% | -2.0% | Lower sales volumes in footwear | | Golf gear | +7.9% | +7.2% | Higher sales volumes in bags and gloves, higher ASP | [Q2 Performance by Geography](index=2&type=section&id=Q2%20Performance%20by%20Geography) A geographical breakdown of Acushnet's second-quarter 2025 net sales, highlighting performance in the U.S. and international markets - Net sales in the United States grew, driven by Titleist golf equipment (+$20.7M) and Golf gear (+$4.8M), partially offset by a decrease in FootJoy golf wear (-$1.6M)[8](index=8&type=chunk) - Net sales in regions outside the U.S. increased by **3.8%** (**2.3% constant currency**), with growth in EMEA and Rest of World, offset by declines in Korea and Japan[9](index=9&type=chunk) [Year-to-Date (First Six Months) 2025 Financial Results](index=4&type=section&id=Year-to-Date%20(First%20Six%20Months)%202025%20Financial%20Results) For the first six months of 2025, net sales increased 2.3% to $1,423.8 million, with net income growing 9.9% to $174.9 million due to a one-time gain [YTD Performance Overview](index=4&type=section&id=YTD%20Performance%20Overview) A summary of Acushnet's key financial metrics for the first six months of 2025, including net sales, net income, and Adjusted EBITDA | Financial Metric | YTD 2025 | YTD 2024 | % Change | | :--- | :--- | :--- | :--- | | Net Sales | $1,423.8M | $1,391.4M | +2.3% | | Net Income | $174.9M | $159.2M | +9.9% | | Adjusted EBITDA | $282.0M | $284.7M | -0.9% | - The **9.9% increase in net income** was primarily due to a non-cash pre-tax gain of **$20.9 million** related to the deconsolidation of the FootJoy golf shoe joint venture and lower income tax expense[19](index=19&type=chunk) - Adjusted EBITDA margin for the first six months was **19.8%**, compared to 20.5% in the prior year period[20](index=20&type=chunk) [YTD Performance by Segment](index=4&type=section&id=YTD%20Performance%20by%20Segment) An overview of Acushnet's year-to-date 2025 net sales performance across its Titleist, FootJoy, and Golf gear segments | Segment | Net Sales Change (YoY) | Constant Currency Change (YoY) | Key Drivers | | :--- | :--- | :--- | :--- | | Titleist golf equipment | +4.5% | +4.9% | Higher volume in 2025 Pro V1 balls, higher ASP in clubs | | FootJoy golf wear | -4.2% | -3.6% | Lower sales volumes in footwear and apparel | | Golf gear | +5.0% | +5.5% | Higher ASP and higher volumes in gloves and bags | [YTD Performance by Geography](index=4&type=section&id=YTD%20Performance%20by%20Geography) A geographical breakdown of Acushnet's year-to-date 2025 net sales, highlighting performance in the U.S. and international markets - Net sales in the United States grew, driven by Titleist golf equipment (+$31.0M) and Golf gear (+$5.4M), partially offset by a decrease in FootJoy golf wear (-$7.3M)[15](index=15&type=chunk) - Net sales in regions outside the U.S. increased by **0.1%** (**1.5% constant currency**), with growth in EMEA and Rest of World offset by declines in Korea and Japan[16](index=16&type=chunk) [Shareholder Returns and Outlook](index=6&type=section&id=Shareholder%20Returns%20and%20Outlook) This section outlines Acushnet's capital allocation strategies, including dividends and share repurchases, and provides an update on the 2025 financial outlook [Cash Dividend and Share Repurchase](index=6&type=section&id=Cash%20Dividend%20and%20Share%20Repurchase) The company demonstrated its commitment to shareholder returns by declaring a quarterly cash dividend of $0.235 per share and repurchasing 1.35 million shares for $88.4 million during the second quarter - The Board of Directors declared a quarterly cash dividend of **$0.235 per share**, payable on September 19, 2025[21](index=21&type=chunk) - During Q2, the Company repurchased **1,348,369 shares** of common stock for an aggregate of **$88.4 million**, including repurchases from Magnus Holdings Co., Ltd[22](index=22&type=chunk) [2025 Outlook](index=6&type=section&id=2025%20Outlook) Acushnet will provide its financial outlook for the second half of 2025 during its upcoming second-quarter earnings conference call - Information regarding the outlook for the second half of 2025 will be shared during the upcoming Q2 2025 earnings conference call and webcast[23](index=23&type=chunk) [Consolidated Financial Statements (Unaudited)](index=9&type=section&id=Consolidated%20Financial%20Statements%20(Unaudited)) This section presents Acushnet's unaudited condensed consolidated financial statements, including statements of operations, balance sheets, and cash flows [Condensed Consolidated Statements of Operations](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) The income statement shows year-over-year growth in net sales and gross profit for both the second quarter and first six months of 2025, with diluted EPS of $1.25 and $2.87 respectively | (in thousands) | Three months ended June 30, 2025 | Six months ended June 30, 2025 | | :--- | :--- | :--- | | Net sales | $720,476 | $1,423,848 | | Gross profit | $354,316 | $691,478 | | Income from operations | $109,868 | $224,415 | | Net income attributable to Acushnet | $75,563 | $174,935 | | Diluted EPS | $1.25 | $2.87 | [Condensed Consolidated Balance Sheets](index=10&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets increased to $2.40 billion, driven by higher accounts receivable, while total liabilities rose to $1.58 billion due to increased long-term debt | (in thousands) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total current assets | $1,157,838 | $973,873 | | Total assets | $2,395,571 | $2,180,206 | | Total current liabilities | $515,262 | $472,707 | | Long-term debt | $911,001 | $753,081 | | Total liabilities | $1,582,210 | $1,383,042 | | Total shareholders' equity | $808,519 | $793,136 | [Condensed Consolidated Statements of Cash Flows](index=11&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended June 30, 2025, cash provided by operating activities decreased to $31.6 million, resulting in a net increase in cash of $7.0 million for the period | (in thousands) | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :--- | :--- | :--- | | Cash flows provided by operating activities | $31,608 | $102,117 | | Cash flows used in investing activities | ($25,792) | ($22,110) | | Cash flows used in financing activities | ($2,132) | ($63,019) | | Net increase in cash | $6,996 | $14,851 | [Supplemental and Non-GAAP Information](index=12&type=section&id=Supplemental%20and%20Non-GAAP%20Information) This section provides additional details on net sales by segment and geography, along with a reconciliation of GAAP to non-GAAP financial measures [Supplemental Net Sales Information](index=12&type=section&id=Supplemental%20Net%20Sales%20Information) This section provides a detailed breakdown of net sales by product segment and geographic region for Q2 and the first six months of 2025, showing Titleist golf equipment and the United States as largest contributors Q2 2025 Net Sales by Segment (in millions) | Segment | Q2 2025 Net Sales | % Change (YoY) | | :--- | :--- | :--- | | Titleist golf equipment | $453.8 | +6.8% | | FootJoy golf wear | $153.0 | -1.3% | | Golf gear | $76.7 | +7.9% | YTD 2025 Net Sales by Segment (in millions) | Segment | YTD 2025 Net Sales | % Change (YoY) | | :--- | :--- | :--- | | Titleist golf equipment | $874.9 | +4.5% | | FootJoy golf wear | $331.4 | -4.2% | | Golf gear | $147.6 | +5.0% | Q2 2025 Net Sales by Region (in millions) | Region | Q2 2025 Net Sales | % Change (YoY) | | :--- | :--- | :--- | | United States | $434.5 | +6.4% | | EMEA | $98.6 | +13.7% | | Japan | $30.2 | +1.3% | | Korea | $80.1 | -4.4% | | Rest of World | $77.1 | +2.7% | [Reconciliation of GAAP to Non-GAAP Measures](index=13&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Measures) The company provides a reconciliation from GAAP Net Income to Adjusted EBITDA, adjusting for items not indicative of ongoing operating performance - The company uses non-GAAP measures such as net sales on a constant currency basis and Adjusted EBITDA to evaluate business performance, as management believes they exclude items not indicative of ongoing operating performance[40](index=40&type=chunk)[43](index=43&type=chunk) Reconciliation of Net Income to Adjusted EBITDA (in thousands) | | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | Net income attributable to Acushnet | $75,563 | $71,428 | $174,935 | $159,190 | | Adjustments (Interest, Taxes, D&A, etc.) | $67,582 | $59,585 | $107,066 | $125,514 | | **Adjusted EBITDA** | **$143,145** | **$131,013** | **$282,001** | **$284,704** | | **Adjusted EBITDA margin** | **19.9%** | **19.2%** | **19.8%** | **20.5%** |

Core Insights - Acushnet (GOLF) is expected to report quarterly earnings of $1.33 per share, reflecting a year-over-year increase of 19.8% [1] - Revenues are anticipated to reach $713.47 million, which is a 4.3% increase from the same quarter last year [1] - There have been no revisions in the consensus EPS estimate over the last 30 days, indicating stability in analysts' forecasts [1] Revenue Estimates - Analysts predict 'Net Sales- Titleist golf balls' to be $267.94 million, representing an 8.3% increase year-over-year [4] - 'Net Sales- Titleist golf clubs' are expected to reach $195.72 million, indicating a 10.3% increase from the prior-year quarter [4] - 'Net Sales- FootJoy golf wear' is forecasted to be $154.05 million, suggesting a 2% decline year-over-year [4] - 'Net Sales- Titleist golf gear' is estimated at $72.00 million, reflecting a 4.5% increase from the previous year [5] Market Performance - Over the past month, Acushnet shares have returned +6.1%, outperforming the Zacks S&P 500 composite, which saw a +0.5% change [5] - Acushnet currently holds a Zacks Rank 2 (Buy), indicating potential for outperformance in the near future [5]

Group 1 - Acushnet (GOLF) is currently ranked 2 (Buy) in the Zacks Rank, indicating a positive earnings outlook and potential for outperforming the market in the next one to three months [3] - Year-to-date, Acushnet has gained approximately 15.8%, outperforming the Consumer Discretionary sector average return of 10.1% [4] - Acushnet is part of the Leisure and Recreation Products industry, which has seen a year-to-date gain of about 22.9%, indicating that GOLF is slightly underperforming its industry [5] Group 2 - The Consumer Discretionary group consists of 254 companies and is currently ranked 9 within the Zacks Sector Rank [2] - GoPro (GPRO), another stock in the Consumer Discretionary sector, has significantly outperformed with a year-to-date return of 38.5% [4] - The Audio Video Production industry, to which GoPro belongs, is ranked 58 and has moved up by 15.5% year to date [6]

Core Insights - The article emphasizes the importance of efficiency ratios as indicators of a company's financial health and operational efficiency [1][2][3][4][5]. Efficiency Ratios - **Receivables Turnover**: This ratio measures a company's ability to extend credit and collect debts, with a higher ratio indicating better performance [2]. - **Asset Utilization**: This ratio assesses how effectively a company converts its assets into sales, with higher values suggesting greater efficiency [3]. - **Inventory Turnover**: This ratio indicates a company's ability to manage inventory relative to its cost of goods sold, with higher values reflecting better inventory management [4]. - **Operating Margin**: This ratio measures the efficiency of a company in controlling operating expenses relative to sales, with higher values indicating better expense management [5]. Screening Process - A screening process was applied using the aforementioned efficiency ratios along with a favorable Zacks Rank (Zacks Rank 1) to identify potential investment opportunities [6]. - The screening narrowed down over 7,906 stocks to 10, focusing on those with efficiency ratios above industry averages [7]. Selected Companies - **Vital Farms (VITL)**: Offers pasture-raised foods and has a four-quarter average positive earnings surprise of 45.3% [8][7]. - **Acushnet (GOLF)**: Designs and distributes golf products, also reporting a four-quarter average positive earnings surprise of 45.3% [9][8]. - **Texas Capital Bancshares (TCBI)**: Focuses on local business ties in Texas and has a four-quarter average positive earnings surprise of 30.2% [10][8]. - **Commerce Bancshares (CBSH)**: Engages in general banking services with a four-quarter average positive earnings surprise of 7.9% [11][8].