Acushnet (US:GOLF)2021-11-06 15:43Financial Data and Key Metrics Changes - Third quarter revenues reached $522 million, an increase of 8% year-over-year and up 25% compared to 2019 [9][10] - Year-to-date sales exceeded $1.7 billion, up 45% compared to the previous year and well ahead of 2019 levels [10][28] - Adjusted EBITDA for Q3 was $70 million, reflecting incremental supply chain costs and investments [9][27] - Year-to-date adjusted EBITDA was $333 million, up 80% [10][30] - Gross profit for Q3 was $269 million, up 7% year-over-year, but gross margin decreased to 51.5%, down 70 basis points [25][27] Business Line Data and Key Metrics Changes - Titleist Golf Ball sales were down 3% in Q3 but up 37% year-to-date [11][28] - Titleist Golf Clubs saw a 12% increase in sales for Q3 and a 52% increase year-to-date [13][28] - FootJoy year-to-date sales reached $462 million, up 42% on the year [15][28] - Titleist Gear sales increased by 4% in Q3 and 33% year-to-date [14][28] Market Data and Key Metrics Changes - All regions reported strong year-on-year gains, with Japan showing almost 50% year-to-date growth [16] - The U.S. market, representing about half of the global golf market, was up 45% year-to-date [16][18] - Rounds of play increased in major markets, with the U.S., Japan, and Korea up between 8% and 15% through September [17] Company Strategy and Development Direction - The company is focused on product innovation, golfer connection, and operational excellence as top priorities [34] - A $125 million capital investment is underway to support golf ball manufacturing and innovation [20] - The transition to a centralized U.S. distribution center aims to provide faster and more cost-effective fulfillment [19] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the health of the golf market and strong demand for products [18][21] - Supply chain challenges, including raw material shortages and increased freight costs, are expected to persist [18][37] - The company raised its full-year sales forecast to a range of $2.08 billion to $2.11 billion, reflecting a 30% increase at the midpoint compared to 2020 [37] Other Important Information - The company had approximately $319 million in unrestricted cash at the end of Q3, with total debt outstanding around $320 million [31] - The leverage ratio improved to 0.7x, down from 1.8x a year prior [32] - The Board of Directors declared a $0.165 per share dividend, payable in December [35][36] Q&A Session Summary Question: Insights on sustained sales growth and unit availability - Management noted that all categories are constrained in availability, with the biggest constraints in golf balls due to raw material shortages and production transitions [46] Question: Impact of supply chain on guidance - Management confirmed that supply chain constraints are affecting their ability to meet demand, leading to a flat sales outlook for Q4 compared to 2019 [57] Question: Market share and supply chain dynamics - Management indicated that while supply chain issues are prevalent, they believe they are managing well and expect to take advantage of available supply [65] Question: Trends in rounds played - Management reported that rounds are up 8% over 2020 and about 18% over 2019, with participation coming from various sources including returning golfers and new entrants [73][74]