Acushnet (US:GOLF)2025-05-07 20:53Financial Performance - Net sales for Q1 2025 were $703.372 million, a slight decrease of 0.3% compared to $707.554 million in Q1 2024[24] - Gross profit for Q1 2025 was $337.162 million, down from $342.352 million in Q1 2024, reflecting a gross margin of approximately 47.9%[24] - Net income attributable to Acushnet Holdings Corp. for Q1 2025 was $99.372 million, an increase of 13.1% from $87.762 million in Q1 2024[24] - Basic net income per share for Q1 2025 was $1.62, compared to $1.36 in Q1 2024, representing an increase of 19.1%[24] - The company reported a comprehensive income of $105.835 million for Q1 2025, compared to $76.632 million in Q1 2024[27] - Net income for the three months ended March 31, 2025, was $99,025,000, an increase of 17.1% compared to $84,559,000 in the same period of 2024[30] - Total net sales for the reportable segments reached $670.491 million for the three months ended March 31, 2025, with Titleist Golf Equipment contributing $421.092 million, FootJoy Golf Wear $178.436 million, and Golf Gear $70.963 million[103] - The total operating income for the consolidated segments was $114.547 million for the three months ended March 31, 2025, compared to $120,595 million before income tax[103] Assets and Liabilities - Total assets as of March 31, 2025, were $2.403 billion, up from $2.180 billion as of December 31, 2024[22] - Total liabilities increased to $1.618 billion as of March 31, 2025, compared to $1.383 billion at the end of 2024[22] - The total shareholders' equity as of March 31, 2025, was $780,284,000, a decrease from $903,087,000 as of December 31, 2023[32] - Cash and cash equivalents decreased to $40.599 million as of March 31, 2025, from $53.059 million at the end of 2024[22] - Accounts receivable decreased by $254,549,000 in Q1 2025, compared to a decrease of $267,847,000 in Q1 2024[30] - Total inventories decreased to $538.1 million as of March 31, 2025, from $575.9 million as of December 31, 2024[51] Cash Flow and Financing - Cash flows used in operating activities amounted to $(120,254,000) for Q1 2025, compared to $(109,516,000) in Q1 2024, reflecting a decrease in cash flow[30] - Cash flows provided by financing activities were $118,145,000 in Q1 2025, up from $101,571,000 in Q1 2024[30] - The company recorded a non-cash gain on deconsolidation of $20,887,000 related to Lionscore during the three months ended March 31, 2025[41] - The company had $597.6 million of outstanding indebtedness at variable interest rates, with a potential increase of $6.0 million in annual pre-tax interest expense for a one percentage point increase in interest rates[171] Research and Development - Research and development expenses rose to $18.859 million in Q1 2025, compared to $16.453 million in Q1 2024, indicating a focus on innovation[24] - Research and development expenses amounted to $16.0 million, indicating the company's investment in innovation[104] Shareholder Activities - The company declared a dividend of $0.235 per common share for the first quarter of 2025, totaling $14.576 million, compared to $0.215 per share in the previous year[78] - As of March 31, 2025, the company had $415.5 million remaining under its share repurchase authorization, having repurchased 540,944 shares at an average price of $67.73, totaling $36.637 million[84] - The company recognized a share repurchase liability of $99.1 million for 1,476,851 shares as of March 31, 2025, reflecting ongoing repurchase agreements with Magnus Holdings[82] Tax and Regulatory - The company's effective income tax rate decreased to 17.9% for the three months ended March 31, 2025, down from 21.7% for the same period in 2024, resulting in a tax expense of $21.6 million, a decrease of $1.8 million year-over-year[76][77] Risks and Challenges - Acushnet Holdings Corp. continues to face risks related to global economic conditions, competition, and supply chain disruptions, which may impact future performance[13] - The company is exposed to commodity price risks for materials used in manufacturing, including polybutadiene and titanium[177] - Inflationary pressures may adversely affect the company's operating results, particularly in raw materials and wage rates[178] Compensation and Employee Benefits - Share-based compensation expense was $6,941,000 in Q1 2025, slightly down from $7,424,000 in Q1 2024[30] - The total net periodic benefit cost for pension benefits was $2.243 million for the three months ended March 31, 2025, compared to $2.271 million in the same period of 2024[75] - The number of PSUs that vested during the three months ended March 31, 2025, was 151,848, resulting in the entitlement to receive 196,795 shares of common stock[91] - The cumulative undelivered shares of common stock as of March 31, 2025, were 517,542 for RSUs and 546,789 for PSUs[94] Foreign Exchange and Derivatives - The gross U.S. dollar equivalent notional amount of foreign exchange forward contracts was $206.2 million as of March 31, 2025[63] - For the three months ended March 31, 2025, the company reported total losses from foreign exchange forward contracts of $549,000 compared to gains of $3.461 million in the same period of 2024[67] - The company expects to reclassify a net gain of $4.6 million related to foreign exchange derivative instruments from accumulated other comprehensive loss into cost of goods sold within the next 12 months[66]