Group 1 - The importance of maintaining objectivity as an investor to avoid biases towards favored stocks or industries [1] - Crude Value Insights provides an investment service focused on oil and natural gas, emphasizing cash flow and growth potential [1] - The service includes a model account with over 50 stocks, detailed cash flow analyses of exploration and production firms, and live sector discussions [2] Group 2 - A promotional offer for a two-week free trial to engage with the oil and gas investment community [3]

Indebtedness and Interest Rate Risk - The company reported outstanding indebtedness at variable interest rates of $317.6 million as of December 31, 2024, with a sensitivity analysis indicating a potential increase of $3.2 million in annual pre-tax interest expense for a one percentage point increase in interest rates [407]. - As of December 31, 2023, the company had $255.6 million of outstanding indebtedness at variable interest rates, with a similar sensitivity analysis indicating a potential increase of $2.6 million in annual pre-tax interest expense for a one percentage point increase in interest rates [408]. - The company utilizes interest rate swap contracts with a notional value of $100.0 million to manage interest rate risk, maturing on February 28, 2025 [405]. - The company does not enter into derivatives for trading or speculative purposes, focusing instead on hedging to mitigate financial risks [410]. Foreign Exchange Risk - The gross U.S. dollar equivalent notional amount of all foreign exchange forward contracts outstanding was $192.2 million as of December 31, 2024, with a net settlement asset of $7.9 million [412]. - If the U.S. dollar weakened by 10% against all currencies covered by the foreign exchange forward contracts as of December 31, 2024, the net settlement asset would decrease by $14.3 million, resulting in a net settlement liability of $6.4 million [412]. - The company monitors the credit quality of counterparties to derivative contracts, which are major financial institutions with investment grade credit ratings [415]. Commodity Price and Inflation Risks - The company is exposed to commodity price and availability risks for materials such as polybutadiene, titanium, and leather, which are essential for manufacturing its products [416]. - Inflation in raw materials and input costs has historically impacted the company's business, and future higher inflationary environments could materially affect its financial position and cash flows [417]. Forward-Looking Statements - The company acknowledges that actual results may differ materially from forward-looking statements due to various market and economic factors beyond its control [14].

Full Year and Fourth Quarter 2024 Earnings Call February 27, 2025 DISCLAIMERS FORWARD-LOOKING STATEMENTS This presentation includes forward-looking statements that reflect our current views with respect to, among other things, our 2025 outlook, our operations and our financial performance. These forward-looking statements are included throughout this presentation and relate to matters such as our industry, business strategy, goals and expectations concerning our market position, future operations, strategic ...

Financial Data and Key Metrics Changes - The company reported fourth quarter sales of $445 million, an 8% increase compared to the previous year, with adjusted EBITDA of $12.4 million [7][9] - For the full year 2024, sales reached $2.46 billion, a 4% constant currency gain, and adjusted EBITDA increased by 7.5% to $404 million [9][10] - Gross profit for the fourth quarter was $208 million, up 15.2% year-over-year, with a gross margin of 46.7%, reflecting a 300 basis point increase [36] - Full year gross profit was $1.2 billion, a 6% increase, with gross margin growing to 48.3%, up 130 basis points from the previous year [37] Business Line Data and Key Metrics Changes - Titleist Golf Equipment sales increased by 7% for the year, with golf ball sales growing by 4% [10][34] - The Gear segment posted a 5% growth for the year, driven by gains in the travel category [12] - FootJoy sales declined by 2% for the year, with U.S. gains offset by international declines [13] - The Other category, which includes Titleist apparel and shoes, saw growth in the U.S. and U.K. but softness in Asia [14] Market Data and Key Metrics Changes - In the U.S. market, golf rounds increased by 2% in 2024, reaching a record 543 million rounds played [17] - The golfer base in the U.S. grew by 6% to 28.1 million, marking the largest single-year increase since 2000 [17] - Japan experienced a 3.5% decline in sales, while other regions showed growth, particularly the U.S. which was up 7.2% [35] Company Strategy and Development Direction - The company plans to invest in expanding its global fitting network and digital commerce capabilities [47][48] - Strategic investments will focus on enhancing innovation, product development, and golfer connection capabilities [24] - The company is optimistic about the structural health of the golf industry and aims to strengthen its position in the Titleist Golf equipment segment [26] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to execute against priorities despite macroeconomic challenges [19] - The outlook for 2025 includes projected net sales growth of 2.6% to 4.6% on a constant currency basis [44] - Management noted that while golf participation remains resilient, the macroeconomic backdrop in key regions is challenging [19] Other Important Information - The company returned approximately $227 million to shareholders in 2024 through dividends and share repurchases [14][42] - A 9% increase in the quarterly dividend payout to $0.235 per share was announced for 2025 [15] - The company completed the transition of footwear manufacturing from China to Vietnam, enhancing product development capabilities [25] Q&A Session Summary Question: What drove the other half of the gross margin improvement year-over-year? - Management attributed the improvement to continued performance in the Golf Equipment segment and a more normalized supply chain [55] Question: How much of the investments will hit in '25 and will they continue going forward? - Management indicated that some investments will be outsized in '25 but will normalize in subsequent years [57][60] Question: Should growth in the Golf Equipment segment be expected to be consistent throughout the year? - Management expects growth in the Golf Equipment segment, particularly in the first half due to the Pro V1 launch [64][68] Question: What is the current health of the golf industry? - Management noted strong participation rates in the U.S. and a healthy golfer base, but macroeconomic conditions outside the U.S. remain challenging [72][76] Question: How does the company view the competitive environment for 2025? - Management sees the market as competitive but believes their focused approach on dedicated golfers provides a buffer against broader market pressures [118][120] Question: What is the outlook for the Korean market? - Management expressed optimism about equipment sales in Korea but noted challenges in the apparel segment due to macroeconomic pressures [125][126]

Group 1 - Acushnet reported $445.17 million in revenue for Q4 2024, a year-over-year increase of 7.8% [1] - The EPS for the quarter was -$0.02, improving from -$0.41 a year ago, with a surprise of +93.75% compared to the consensus estimate of -$0.32 [1] - The reported revenue fell short of the Zacks Consensus Estimate of $455.13 million, resulting in a surprise of -2.19% [1] Group 2 - Key metrics indicate Acushnet's performance, with shares returning +0.4% over the past month, while the Zacks S&P 500 composite declined by -2.2% [3] - Acushnet currently holds a Zacks Rank 4 (Sell), suggesting potential underperformance against the broader market [3] Group 3 - Net Sales for Titleist golf balls reached $140.50 million, exceeding the average estimate of $136.56 million, with a year-over-year change of +0.6% [4] - Net Sales for FootJoy golf wear were $97.40 million, slightly above the average estimate of $97.01 million, reflecting a +1.3% year-over-year change [4] - Titleist golf gear reported net sales of $37.90 million, surpassing the average estimate of $33.39 million, with a significant year-over-year increase of +19.9% [4] - Net Sales for Titleist golf clubs were $126 million, below the average estimate of $137.19 million, but still showing a +15.8% change compared to the previous year [4]

Group 1 - Acushnet reported a quarterly loss of $0.02 per share, significantly better than the Zacks Consensus Estimate of a loss of $0.32, and an improvement from a loss of $0.41 per share a year ago, resulting in an earnings surprise of 93.75% [1] - The company posted revenues of $445.17 million for the quarter ended December 2024, missing the Zacks Consensus Estimate by 2.19%, but showing an increase from year-ago revenues of $412.96 million [2] - Acushnet has surpassed consensus EPS estimates three times over the last four quarters, but has only topped consensus revenue estimates once in the same period [2] Group 2 - The stock has underperformed, losing about 6.9% since the beginning of the year, while the S&P 500 has gained 1.3% [3] - The current consensus EPS estimate for the upcoming quarter is $1.47 on revenues of $733.21 million, and for the current fiscal year, it is $3.35 on revenues of $2.55 billion [7] - The Leisure and Recreation Products industry, to which Acushnet belongs, is currently ranked in the bottom 38% of over 250 Zacks industries, indicating potential challenges for stock performance [8]

Financial Performance - Full year net sales reached $2.46 billion, an increase of 3.2% year over year, and 3.9% in constant currency[3] - Full year gross margin improved to 48.3%, up 130 basis points year over year[3] - Full year net income attributable to Acushnet Holdings Corp. was $214.3 million, up $15.9 million or 8.0% year over year[4] - Adjusted EBITDA for the full year was $404.4 million, reflecting a 7.5% increase year over year[9] - Fourth quarter net sales were $445.2 million, up 7.8% year over year, and 7.9% in constant currency[10] - Net income for 2024 was $201.8 million, a slight increase from $198.6 million in 2023, representing a growth of 1.2%[36] - Total net sales for 2024 reached $2.46 billion, up by $75.1 million or 3.2% compared to $2.38 billion in 2023[39] - The company reported a gross profit of $377.9 million for the three months ended December 31, 2024, compared to $371.8 million in the same period of 2023[43] Market Segments - Titleist golf equipment net sales increased by 6.2% year over year, driven by higher sales volumes of SM10 wedges and GT drivers[7] - FootJoy golf wear experienced a 2.6% decrease in net sales, primarily due to lower sales volumes across all product categories[7] - Golf clubs segment saw a significant increase in sales, rising by $62.6 million or 9.5% to $721.3 million in 2024[38] - The FootJoy golf wear segment experienced a decline in sales, decreasing by $15.4 million or 2.6% to $574.6 million in 2024[38] - The United States market contributed $1.45 billion in sales, reflecting a $96.8 million increase or 7.2% from the previous year[39] Cash Flow and Assets - Cash flows provided by operating activities decreased to $245.1 million in 2024 from $371.8 million in 2023, a decline of 34%[36] - Total assets as of December 31, 2024, were $2,180.2 million, slightly down from $2,196.7 million in 2023[33] - Cash and cash equivalents decreased to $53.1 million in 2024 from $65.4 million in 2023[33] - Cash, cash equivalents, and restricted cash at the end of 2024 were $53.1 million, down from $65.4 million at the end of 2023[36] Expenses and Liabilities - Operating expenses for Q4 2024 were $209.9 million, compared to $201.5 million in Q4 2023, reflecting a 4.0% increase[32] - Total liabilities increased to $1,383.0 million in 2024 from $1,283.8 million in 2023, representing a 7.8% rise[33] - Research and development expenses for the year were $67.8 million, up from $64.8 million in 2023, indicating a 4.5% increase[32] - Interest expense for the year ended December 31, 2024, increased to $52.6 million from $41.3 million in 2023, representing a rise of 27.5%[54] Shareholder Returns - The company declared a quarterly cash dividend increase of 9.3% to $0.235 per share[15] - The company repurchased 442,867 shares at an average price of $67.69, totaling $30 million during the quarter[16] Future Outlook - The 2025 outlook projects net sales between $2,485 million and $2,535 million, with an expected adjusted EBITDA of $405 to $420 million[18] - Acushnet Holdings Corp. anticipates continued growth in consolidated net sales and Adjusted EBITDA for 2025[27] - The company plans to continue focusing on product innovation and market expansion strategies to drive future growth[47] Adjusted EBITDA - Adjusted EBITDA for the year ended December 31, 2024, was $404.4 million, an increase from $376.1 million in 2023, reflecting a growth of 7.7%[54] - Adjusted EBITDA margin for the year ended December 31, 2024, was 16.5%, compared to 15.8% in 2023, indicating an improvement of 0.7 percentage points[54] - Adjusted EBITDA for the three months ended December 31, 2024, was $12.4 million, compared to a negative $1.5 million in the same period of 2023[54] Losses and Costs - The company reported a basic net loss per share of $0.02 for Q4 2024, compared to a loss of $0.41 in Q4 2023[32] - For the three months ended December 31, 2024, the company reported a net loss of $1.1 million, a significant improvement from a net loss of $26.8 million in the same period of 2023[54] - Restructuring costs associated with the closure of footwear manufacturing lines amounted to $11.0 million for the three months ended December 31, 2024[54] - The company incurred $3.0 million in transformation costs related to IT system optimization for the three months ended December 31, 2024[54] - The net (loss) income attributable to noncontrolling interests for the year ended December 31, 2024, was a loss of $12.5 million, compared to a gain of $0.2 million in 2023[54] - The company reported a net (loss) income attributable to Acushnet Holdings Corp. of $214.3 million for the year ended December 31, 2024, up from $198.4 million in 2023, marking an increase of 8.9%[54] Variability in Results - The company anticipates ongoing variability in future GAAP results due to potential extraordinary items, making forward-looking reconciliations challenging[54]

Company Overview - Acushnet Holdings Corp. is a leading player in the global golf industry, known for manufacturing and distributing a wide range of golf products including golf balls, clubs, wedges, putters, and various golf gear [1] Brand Portfolio - The company operates several well-known brands such as Titleist, FootJoy, Scotty Cameron, Vokey Design, and Pinnacle, which contribute to its strong market presence [1]

Company Overview - Acushnet (GOLF) is anticipated to report a year-over-year increase in earnings driven by higher revenues for the quarter ended December 2024, with a consensus outlook suggesting a quarterly loss of $0.32 per share, reflecting a +22% change from the previous year [1][3] - Revenues are expected to reach $455.13 million, marking a 10.2% increase compared to the same quarter last year [3] Earnings Expectations - The earnings report is scheduled for release on February 27, 2025, and could influence the stock price significantly depending on whether the actual results exceed or fall short of expectations [2] - The consensus EPS estimate has been revised 1.34% lower in the last 30 days, indicating a bearish sentiment among analysts regarding the company's earnings prospects [4][10] Earnings Surprise Prediction - The Zacks Earnings ESP model indicates that Acushnet has a negative Earnings ESP of -14.20%, suggesting a lower likelihood of beating the consensus EPS estimate [10][11] - The stock currently holds a Zacks Rank of 4, which further complicates the prediction of an earnings beat [11] Historical Performance - In the last reported quarter, Acushnet exceeded the consensus EPS estimate by +12.66%, with actual earnings of $0.89 per share compared to an expected $0.79 [12] - Over the past four quarters, Acushnet has beaten consensus EPS estimates two times [13] Industry Comparison - Amer Sports, Inc. (AS), a competitor in the same industry, is expected to report earnings of $0.17 per share for the quarter ended December 2024, reflecting a year-over-year change of +254.6% [17] - Amer Sports is projected to achieve revenues of $1.6 billion, up 21.6% from the previous year, and has a positive Earnings ESP of 17.10% along with a Zacks Rank of 2, indicating a strong likelihood of beating the consensus EPS estimate [18]

Core Points - Acushnet Holdings Corp. will replace Retail Opportunity Investments Corp. in the S&P SmallCap 600 effective February 13, 2025 [1] - Blackstone Inc. is acquiring Retail Opportunity Investments, with the deal expected to close soon [1] Summary by Category Company Changes - Acushnet Holdings Corp. will be added to the S&P SmallCap 600 under the ticker GOLF in the Consumer Discretionary sector [1] - Retail Opportunity Investments Corp. will be removed from the S&P SmallCap 600 under the ticker ROIC in the Real Estate sector [1] Index Information - The changes will take effect prior to the opening of trading on the specified date [1]