Acushnet (GOLF) - 2025 Q2 - Quarterly Report

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 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) 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) 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) 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) 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) 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 These notes provide detailed explanations and disclosures supporting the unaudited condensed consolidated financial statements 1. Summary of Significant Accounting Policies 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][42] - A non-cash gain on deconsolidation of $20.9 million was recorded for the six months ended June 30, 2025[42] - 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] - 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][50][51] 2. Allowance for Credit Losses 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 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 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 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] - 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][62] - 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][61] 6. Derivative Financial Instruments 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] - 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] - 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] 7. Fair Value Measurements 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 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 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] - 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] 10. Common Stock 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][182] - 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][182] 11. Equity Incentive Plans 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] - As of June 30, 2025, 3,199,282 shares remained available for future grants under the Amended and Restated 2015 Plan[92] - 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] 12. Accumulated Other Comprehensive Loss, Net of Tax 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 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] 14. Segment Information 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] 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 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] 16. Restructuring Costs 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] - 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][120] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management analyzes financial condition, results of operations, liquidity, and market risks, including recent developments and segment performance 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] - The target market is 'dedicated golfers' who prioritize performance and quality, with a strategy to leverage professional player endorsements[123] - 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] Recent Developments 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] - 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][128] - 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] - 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] Key Performance Measures 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] 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 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 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][142] - 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] - 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] - 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][151][152] - 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][153][154] - 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][155][156] Six Months Ended June 30, 2025 Compared to the Six Months Ended June 30, 2024 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][158] - Gross profit increased by $15.7 million, with gross margin remaining flat at 48.6%[161] - 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] - 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] - 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][167][168] - 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][169][170] - 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][171][172] Liquidity and Capital Resources This section discusses the Company's ability to generate and manage cash, including debt, dividends, share repurchases, and capital expenditures Debt and Financing Arrangements 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] - 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][179] Dividends and Share Repurchase Program 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] - During the six months ended June 30, 2025, the Company repurchased 1,889,313 shares of common stock for $125.0 million[182] - As of June 30, 2025, $327.2 million remained under the share repurchase authorization, with $62.5 million utilized on July 10, 2025[182] Capital Expenditures and Other Investments 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] - 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] Cash Flows 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] - 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] Contractual Obligations and Off-Balance Sheet Arrangements 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] - No material off-balance sheet arrangements as of June 30, 2025[191] Critical Accounting Estimates 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] Recently Issued Accounting Standards 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] Item 3. Quantitative and Qualitative Disclosures About Market Risk This section details the Company's exposure to interest rate, foreign exchange, commodity, and inflation risks, and mitigation strategies Interest Rate Risk 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] - 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] - No interest rate swap contracts were outstanding as of June 30, 2025, which are typically used to reduce interest rate risk[197] Foreign Exchange Risk 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] - Foreign exchange forward contracts are used to reduce foreign currency risk, primarily for USD, JPY, GBP, CAD, KRW, AUD, and EUR[200] - 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] - 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] Commodity Risk 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] Impact of Inflation 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] Item 4. Controls and Procedures 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] - There were no material changes in internal control over financial reporting during the fiscal quarter ended June 30, 2025[207] PART II. OTHER INFORMATION This section includes legal proceedings, risk factors, equity sales, defaults, safety disclosures, and exhibits Item 1. Legal Proceedings 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] - It is not possible to predict the outcome of pending actions, and no liability has been recorded related to potential losses[208] Item 1A. Risk Factors 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] - 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] - Uncertainty about tariffs may increase market volatility and currency exchange rate fluctuations, and hedging activities may not fully offset adverse financial impacts[211] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 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] - This includes 935,907 shares repurchased from Magnus on April 10, 2025, for $62.5 million[213] - 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] Item 3. Defaults Upon Senior Securities No defaults upon senior securities were reported - No defaults upon senior securities were reported[214] Item 4. Mine Safety Disclosures No mine safety disclosures were reported - No mine safety disclosures were reported[215] Item 5. Other Information No other information was reported - No other information was reported[216] Item 6. Exhibits 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] - 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] - Includes Inline XBRL documents for financial data (Exhibits 101.INS, 101.SCH, 101.CAL, 101.DEF, 101.LAB, 101.PRE, 104)[217] 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]