Summary of Significant Accounting Policies |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”) and include the accounts of Acushnet Holdings Corp. (the “Company”), its wholly-owned subsidiaries and less than wholly-owned subsidiaries, including a variable interest entity (“VIE”) in which the Company is the primary beneficiary. All intercompany balances and transactions have been eliminated in consolidation. Certain information in footnote disclosures normally included in annual financial statements has been condensed or omitted for the interim periods presented in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”) and U.S. GAAP. The year-end balance sheet data was derived from audited financial statements; however, the accompanying interim notes to the unaudited condensed consolidated financial statements do not include all disclosures required by U.S. GAAP. In the opinion of management, the financial statements contain all normal and recurring adjustments necessary to state fairly the financial position and results of operations of the Company. The results of operations for the three months ended March 31, 2020 are not necessarily indicative of results to be expected for the full year ending December 31, 2020, nor were those of the comparable 2019 period representative of those actually experienced for the full year ended December 31, 2019. These unaudited interim condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and related notes for the fiscal year ended December 31, 2019 included in its Annual Report on Form 10-K filed with the SEC on February 27, 2020. Risks and Uncertainties In March 2020, the World Health Organization declared a pandemic related to the novel coronavirus (“COVID-19”) resulting in government-ordered shutdowns of non-essential businesses, travel restrictions and restrictions on public gatherings. This has led to reduced consumer demand for golf-related products, the temporary closure of golf courses, including on-course retail pro shops, the temporary closure of off-course retail partner locations and the cancellation of professional golf tour events. In response to the outbreak and to mitigate the spread of the COVID-19 pandemic, the Company has, consistent with related orders from federal, state and local governments, temporarily closed or limited operations in its North American manufacturing facilities, distribution centers and its corporate offices, with associates working remotely where possible. Outside of the U.S., many distribution centers, including those in Europe, are operating on a limited basis. The Company continues to monitor developments, including government requirements and recommendations at the national, state, and local level to evaluate possible extensions to all or part of such closures. The Company has evaluated and continues to evaluate the potential impact of the COVID-19 pandemic on its consolidated financial statements, including: impairment of goodwill and indefinite-lived intangible assets; impairment of long lived assets, including property, plant and equipment; the fair value and collectability of receivables and other financial assets; the valuation of inventory; the effectiveness of foreign exchange forward contracts designated as cash flow hedges and the credit quality of the financial institutions with which the Company enters into derivative contracts; continuing compliance with debt covenants related to the Company's credit facility; and the probability of achievement of the performance metrics related to the Company's performance stock units (“PSUs”). The primary impacts to the Company’s consolidated financial statements as of March 31, 2020 include the hedge de-designation of certain foreign exchange forward contracts deemed ineffective (Note 5) and a decrease in share-based compensation expense related to the Company's PSUs (Note 10). In addition, the Company has taken several steps to strengthen its financial position and balance sheet, bolster its liquidity position and to provide additional financial flexibility, including reducing payroll costs through associate furloughs and a temporary reduction in senior management compensation, reducing discretionary spending, reducing capital expenditures, suspending its share repurchase program, temporarily suspending cash retainers of its Board of Directors and drawing down $200.0 million on its revolving credit facility on April 1, 2020 (Note 4). As the COVID-19 pandemic is complex and continues to evolve, the Company's plans as described above may change. At this point, the Company cannot reasonably estimate the duration and severity of this pandemic, which it expects will have a material impact on its business, results of operations, financial position and cash flows. Use of Estimates The preparation of the Company’s unaudited condensed consolidated financial statements in accordance with U.S. GAAP requires management to make estimates and judgments that affect reported amounts of assets and liabilities and related disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company has also made estimates of the impact of COVID-19 within its unaudited condensed consolidated financial statements and there may be changes to those estimates in future periods. Actual results could differ from these estimates. Variable Interest Entities VIEs are entities that, by design, either (i) lack sufficient equity to permit the entity to finance its activities independently, or (ii) have equity holders that do not have the power to direct the activities of the entity that most significantly impact its economic performance, the obligation to absorb the entity’s expected losses, or the right to receive the entity’s expected residual returns. The Company consolidates a VIE when it is the primary beneficiary, which is the party that has both (i) the power to direct the activities that most significantly impact the VIE’s economic performance and (ii) through its interests in the VIE, the obligation to absorb expected losses or the right to receive expected benefits from the VIE that could potentially be significant to the VIE. The Company consolidates the accounts of Acushnet Lionscore Limited, a VIE, which is 40% owned by the Company. The sole purpose of the VIE is to manufacture the Company’s golf footwear and as such, the Company is deemed to be the primary beneficiary. The Company has presented separately on its consolidated balance sheets, to the extent material, the assets of its consolidated VIE that can only be used to settle specific obligations of its consolidated VIE and the liabilities of its consolidated VIE for which creditors do not have recourse to its general credit. The general creditors of the VIE do not have recourse to the Company. Certain directors of the VIE have guaranteed the credit lines of the VIE, for which there were no outstanding borrowings as of March 31, 2020 and December 31, 2019. In addition, pursuant to the terms of the agreement governing the VIE, the Company is not required to provide financial support to the VIE. Noncontrolling Interests and Redeemable Noncontrolling Interest The ownership interests held by owners other than the Company in less than wholly-owned subsidiaries are classified as noncontrolling interests. Redeemable noncontrolling interests are those noncontrolling interests which are or may become redeemable at a fixed or determinable price on a fixed or determinable date, at the option of the holder, or upon occurrence of an event. The financial results and position of the noncontrolling interests are included in their entirety in the Company’s unaudited condensed consolidated statements of operations and unaudited condensed consolidated balance sheets. The value attributable to the noncontrolling interests is presented on the unaudited condensed consolidated balance sheets, separately from the equity attributable to the Company. The value attributable to the redeemable noncontrolling interest and the related loan to the minority shareholders, which is recorded as a reduction to redeemable noncontrolling interest, is presented in the unaudited condensed consolidated balance sheets as temporary equity between liabilities and shareholders’ equity. The amount of the loan to minority shareholders included in temporary equity on the unaudited condensed consolidated balance sheet was $4.4 million as of both March 31, 2020 and December 31, 2019. Net income (loss) and comprehensive income (loss) attributable to noncontrolling interests are presented separately on the unaudited condensed consolidated statements of operations and unaudited condensed consolidated statements of comprehensive income (loss), respectively. Cash and Restricted Cash Cash held in Company checking accounts is included in cash. Book overdrafts not subject to offset with other accounts with the same financial institution are classified as accounts payable. The Company classifies as restricted certain cash that is not available for use in its operations. As of both March 31, 2020 and December 31, 2019, the amount of restricted cash included in cash and restricted cash on the unaudited condensed consolidated balance sheets was $2.0 million. Accounts Receivable On January 1, 2020, the Company adopted Accounting Standards Update (“ASU”) 2016-13, "Financial Instruments -Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments" ("ASU 2016-13"), which replaces the incurred loss methodology with an expected loss methodology that is referred to as the current expected credit loss ("CECL") methodology. The CECL methodology requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. The measurement of expected credit losses under the CECL methodology is applicable to financial assets measured at amortized cost, including trade receivables. The only financial assets held by the Company which are subject to evaluation under the CECL model are trade receivables. The Company adopted ASU 2016-13 using the modified retrospective method. The adoption of this standard did not have an impact on the carrying value of trade receivables. Results for reporting periods beginning after January 1, 2020 are presented under ASU 2016-13 while prior period amounts continue to be reported in accordance with previously applicable GAAP. The Company estimates expected credit losses using a number of factors, including customer credit ratings, age of receivables, historical credit loss information and current and forecasted economic conditions which affect the collectability of the reported amounts. The Company continues to monitor the impact of the COVID-19 pandemic on its expected credit losses, which has been considered in the estimate of expected credit losses as of March 31, 2020. The activity related to the allowance for doubtful accounts was as follows:
Foreign Currency Translation and Transactions Foreign currency transaction gains (losses) included in selling, general and administrative expense were losses of $1.0 million and gains of $0.5 million for the three months ended March 31, 2020 and 2019, respectively. Recently Adopted Accounting Standards Intangibles —Goodwill and Other —Internal-Use Software On January 1, 2020, the Company adopted ASU 2018-15, "Intangibles -Goodwill and Other -Internal-Use Software (Subtopic 350-40): Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract" ("ASU 2018-15"). The amendments in this update aligned the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). The adoption of this standard did not have a material impact on the consolidated financial statements. Recently Issued Accounting Standards Income Taxes In December 2019, the Financial Accounting Standards Board ("FASB") issued ASU 2019-12, "Income Taxes (Topic 740) -Simplifying the Accounting for Income Taxes ("ASU 2019-12"). The amendments in this update simplify the accounting for income taxes by removing certain exceptions to general principles in Topic 740. The amendments also improve consistent application and simplify U.S. GAAP for other areas of Topic 740 by clarifying and amending existing guidance. ASU 2019-12 is effective for fiscal years beginning after December 15, 2020. Early adoption is permitted. The Company is currently evaluating the impact this standard will have on its consolidated financial statements. Defined Benefit Plans—Changes to the Disclosure Requirements for Defined Benefit Plans In August 2018, the FASB issued ASU 2018-14, "Compensation —Retirement Benefits —Defined Benefit Plans —General (Subtopic 715-20) —Disclosure Framework —Changes to the Disclosure Requirements for Defined Benefit Plans" ("ASU 2018-14"). The amendments in this update remove defined benefit plan disclosures that are no longer considered cost-beneficial, clarify the specific requirements of disclosures, and add disclosure requirements identified as relevant. ASU 2018-14 is effective for fiscal years ending after December 15, 2020. Early adoption is permitted. The adoption of this standard should be applied to all periods presented. The adoption of this standard will not have a material impact on the consolidated financial statements.
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Inventories |
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Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventories | Inventories The components of inventories were as follows:
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Product Warranty |
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Product Warranties Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Product Warranty | Product Warranty The Company has defined warranties generally ranging from one to two years. Products covered by the defined warranty policies primarily include all Titleist golf products, FootJoy golf shoes and FootJoy golf outerwear. These product warranties generally obligate the Company to pay for the cost of replacement products, including the cost of shipping replacement products to its customers. The estimated cost of satisfying future warranty claims is accrued at the time the sale is recorded. In estimating future warranty obligations, the Company considers various factors, including its warranty policies and practices, the historical frequency of claims and the cost to replace or repair products under warranty. The activity related to the Company’s warranty obligation for accrued warranty expense was as follows:
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Debt and Financing Arrangements |
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Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Debt and Financing Arrangements | Debt and Financing Arrangements Credit Facility The credit facility includes a revolving credit facility and a term loan facility. There were outstanding borrowings under the revolving credit facility of $165.0 million and $50.3 million as of March 31, 2020 and December 31, 2019, respectively. The weighted average interest rate applicable to these outstanding borrowings was 2.25% and 3.54% as of March 31, 2020 and December 31, 2019, respectively. The credit agreement contains customary affirmative and restrictive covenants, including, among others, financial covenants based on the Company's leverage and interest coverage ratios. The credit agreement includes customary events of default, the occurrence of which, following any applicable cure period, would permit the lenders to, among other things, declare the principal, accrued interest and other obligations to be immediately due and payable. As of March 31, 2020, the Company was in compliance with all covenants under the credit agreement. As of March 31, 2020, the Company had available borrowings under its revolving credit facility of $225.3 million after giving effect to $9.7 million of outstanding letters of credit. On April 1, 2020, the Company drew down $200.0 million under its revolving credit facility. Following the draw down, on April 1, 2020, the Company had approximately $367.5 million outstanding and $22.4 million of available borrowings under its revolving credit facility, after giving effect to $10.1 million of outstanding letters of credit. See Note 1 for further discussion on the Company's evaluation and response to the COVID-19 pandemic. Other Short-Term Borrowings The Company has certain unsecured local credit facilities available through its subsidiaries. There were outstanding borrowings under the Company's local credit facilities of $9.8 million and $3.8 million as of March 31, 2020 and December 31, 2019, respectively. The weighted average interest rate applicable to the outstanding borrowings was 2.09% and 2.29% as of March 31, 2020 and December 31, 2019, respectively. As of March 31, 2020, the Company had available borrowings remaining under these local credit facilities of $52.8 million. Letters of Credit As of March 31, 2020 and December 31, 2019, there were outstanding letters of credit related to agreements, including the Company's credit facility, totaling $13.3 million and $14.8 million, respectively, of which $10.2 million and $11.6 million, respectively, was secured. These agreements provided a maximum commitment for letters of credit of $59.7 million and $59.8 million as of March 31, 2020 and December 31, 2019, respectively.
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Derivative Financial Instruments |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Financial Instruments | Derivative Financial Instruments The Company principally uses derivative financial instruments to reduce the impact of foreign currency fluctuations and interest rate variability on the Company's results of operations. The principal derivative financial instruments the Company enters into are foreign exchange forward contracts and interest rate swaps. The Company does not enter into derivative financial instrument contracts for trading or speculative purposes. Foreign Exchange Derivative Instruments Foreign exchange forward contracts are foreign exchange derivative instruments primarily used to reduce foreign currency risk related to transactions denominated in a currency other than functional currency. These instruments are designated as cash flow hedges. The periods of the foreign exchange forward contracts correspond to the periods of the hedged forecasted transactions, which do not exceed 24 months subsequent to the latest balance sheet date. The primary foreign exchange forward contracts pertain to the U.S. dollar, the Japanese yen, the British pound sterling, the Canadian dollar, the Korean won and the euro. The gross U.S. dollar equivalent notional amount outstanding of all foreign exchange forward contracts designated under hedge accounting as of March 31, 2020 and December 31, 2019 was $276.4 million and $287.9 million, respectively. As a result of the impact of the COVID-19 pandemic, the Company de-designated certain foreign exchange cash flow hedges deemed ineffective. The gross outstanding U.S. dollar equivalent notional amount of these foreign exchange forward contracts as of March 31, 2020 was $17.2 million, which is not included in the amounts above. See Note 1 for further discussion on the Company's evaluation and response to the COVID-19 pandemic. The Company also enters into foreign exchange forward contracts, which do not qualify as hedging instruments under U.S. GAAP, to reduce foreign currency transaction risk related to certain intercompany assets and liabilities denominated in a currency other than functional currency. These undesignated instruments are recorded at fair value as a derivative asset or liability with the corresponding change in fair value recognized in selling, general and administrative expense. There were no outstanding foreign exchange forward contracts not designated under hedge accounting as of March 31, 2020 and December 31, 2019. Interest Rate Derivative Instruments The Company enters into interest rate swap contracts to reduce interest rate risk related to floating rate debt. Under the contracts, the Company pays fixed and receives variable rate interest, in effect converting a portion of its floating rate debt to fixed rate debt. The interest rate swap contracts are accounted for as cash flow hedges. As of both March 31, 2020 and December 31, 2019, the notional value of the Company's outstanding interest rate swap contracts was $160.0 million. Impact on Financial Statements The fair value of hedge instruments recognized on the unaudited condensed consolidated balance sheets was as follows:
(1) Excludes $0.7 million related to hedges deemed ineffective as of March 31, 2020. (2) Excludes $0.1 million related to hedges deemed ineffective as of March 31, 2020. The hedge instrument gain (loss) recognized in accumulated other comprehensive loss, net of tax was as follows:
Gains and losses on derivative instruments designated as cash flow hedges are reclassified from accumulated other comprehensive loss, net of tax at the time the forecasted hedged transaction impacts the statement of operations or at the time the hedge is determined to be ineffective. Based on the current valuation, during the next 12 months the Company expects to reclassify a net gain of $7.2 million related to foreign exchange derivative instruments from accumulated other comprehensive loss, net of tax, into cost of goods sold and a net loss of $3.6 million related to interest rate derivative instruments from accumulated other comprehensive loss, net of tax into interest expense, net. For further information related to amounts recognized in accumulated other comprehensive loss, net of tax, see Note 11. The hedge instrument gain (loss) recognized on the unaudited condensed consolidated statements of operations was as follows:
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Credit Risk The Company enters into derivative contracts with major financial institutions with investment grade credit ratings and is exposed to credit losses in the event of non-performance by these financial institutions. This credit risk is generally limited to the unrealized gains in the derivative contracts. However, the Company monitors the credit quality of these financial institutions, as well as its own credit quality, and considers the risk of counterparty default to be minimal.
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Fair Value Measurements |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | Fair Value Measurements Certain assets and liabilities are carried at fair value under U.S. GAAP. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Assets and liabilities measured at fair value on a recurring basis as of March 31, 2020 were as follows:
Assets and liabilities measured at fair value on a recurring basis as of December 31, 2019 were as follows:
Rabbi trust assets are used to fund certain retirement obligations of the Company. The assets underlying the Rabbi trust are equity and fixed income exchange‑traded funds. Deferred compensation program assets and liabilities represent a program where select employees could defer compensation until termination of employment. Effective July 29, 2011, this program was amended to cease all employee compensation deferrals and provided for the distribution of all previously deferred employee compensation. The program remains in effect with respect to the value attributable to the employer match contributed prior to July 29, 2011. Foreign exchange derivative instruments are foreign exchange forward contracts primarily used to limit currency risk that would otherwise result from changes in foreign exchange rates (Note 5). The Company uses the mid‑price of foreign exchange forward rates as of the close of business on the valuation date to value each foreign exchange forward contract at each reporting period. Interest rate derivative instruments are interest rate swap contracts used to hedge the interest rate fluctuations of the Company's floating rate debt (Note 5). The valuation for the interest rate swap is calculated as the net of the discounted future cash flows of the pay and receive legs of the swap. Mid-market interest rates on the valuation date are used to create the forward curve for floating legs and discount curve.
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Pension and Other Postretirement Benefits |
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Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pension and Other Postretirement Benefits | Pension and Other Postretirement Benefits Components of net periodic benefit cost (income) were as follows:
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Income Taxes |
3 Months Ended |
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Mar. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Income tax expense decreased by $4.7 million to $7.6 million for the three months ended March 31, 2020 compared to $12.3 million for the three months ended March 31, 2019. The Company’s effective tax rate ("ETR") was 46.0% for the three months ended March 31, 2020 compared to 25.4% for the three months ended March 31, 2019. The increase in the ETR was primarily driven by the impact of the COVID-19 pandemic on the Company's jurisdictional mix of earnings and the effect of foreign currency losses incurred in the quarter that cannot be benefited, as well as, a reduction in discrete tax benefits related to share-based compensation expense.
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Common Stock |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common Stock | Common Stock Dividends The Company declared dividends per common share, including DERs (Note 10), during the periods presented as follows:
During the second quarter of 2020, the Company's Board of Directors declared a dividend of $0.155 per common share to shareholders of record as of June 5, 2020 and payable on June 19, 2020. Share Repurchase Program As of March 31, 2020, the Board of Directors had authorized the Company to repurchase up to an aggregate $100.0 million of its issued and outstanding common stock. Share repurchases may be effected from time to time in open market or privately negotiated transactions, including transactions with affiliates, with the timing of purchases and the amount of stock purchased generally determined at the discretion of the Company consistent with the Company's general working capital needs and within the constraints of the Company’s credit agreement. As previously disclosed, in connection with this share repurchase program, the Company entered into an agreement with Magnus to purchase from Magnus an equal amount of its common stock as it purchases on the open market, up to an aggregate of $24.9 million, at the same weighted average per share price. The Company's share repurchase activity was as follows:
_______________________________________________________________________________ (1) There were no shares repurchased from Magnus during the three months ended March 31, 2020 related to the Magnus share repurchase agreement. In relation to the Magnus share repurchase agreement, the Company recorded a liability to repurchase additional shares of common stock from Magnus of $8.8 million (299,894 shares) and $1.8 million (56,000 shares), which was included in accrued expenses and other liabilities and treasury stock on the unaudited condensed consolidated balance sheets as of March 31, 2020 and December 31, 2019, respectively. Excluding the impact of the share repurchase liability, as of March 31, 2020 the Company had $63.7 million remaining under the current share repurchase authorization, including $11.1 million related to the Magnus share repurchase agreement. In April 2020, the Company announced that it was suspending stock repurchases in light of the COVID-19 pandemic. The Company has the ability to resume repurchases if it deems circumstances warrant. See Note 1 for further discussion on the Company's evaluation and response to the COVID-19 pandemic.
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Equity Incentive Plans |
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Share-based Payment Arrangement [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity Incentive Plans | Equity Incentive Plans Under the Acushnet Holdings Corp. 2015 Omnibus Incentive Plan (“2015 Plan”), the Company may grant stock options, stock appreciation rights, restricted shares of common stock, restricted stock units ("RSUs"), PSUs and other share-based and cash-based awards to members of the Board of Directors, officers, employees, consultants and advisors of the Company. As of March 31, 2020, the only awards granted under the 2015 Plan were RSUs and PSUs. Restricted Stock and Performance Stock Units RSUs granted to members of the Board of Directors vest immediately into shares of common stock. RSUs granted to Company officers generally vest over three years, with one-third of each grant vesting annually, subject to the recipient's continued employment with the Company. RSUs granted to other employees, consultants and advisors of the Company vest in accordance with the terms of the grants, generally over three years, subject to the recipient’s continued service to the Company. PSUs vest, subject to the recipient's continued employment with the Company, based upon the Company's performance against specified metrics which are generally over a three year performance period. At the end of the performance period, the number of shares of common stock that could be issued is fixed based upon the level of performance against these metrics. The number of shares that could be issued can range from 0% to 200% of the recipient's target award. Recipients of the awards granted under the 2015 Plan may elect to defer receipt of all or any portion of any shares of common stock issuable upon vesting to a future date elected by the recipient. All RSUs and PSUs granted under the 2015 Plan have DERs, which entitle holders of RSUs and PSUs to the same dividend value per share as holders of common stock and can be paid in either cash or common stock. DERs are subject to the same vesting and other terms and conditions as the corresponding unvested RSUs and PSUs. DERs are paid when the underlying shares of common stock are delivered. A summary of the Company’s RSUs and PSUs as of March 31, 2020 and changes during the three months then ended is presented below:
_______________________________________________________________________________ (1) Included 52,386 shares of common stock related to RSUs and no shares of common stock related to PSUs that were not delivered as of March 31, 2020. A summary of shares of common stock issued related to the 2015 Plan, including the impact of any DERs issued in common stock, is presented below:
______________________________________________________________________________ (1) Shares of common stock issued related to PSUs represents PSUs that vested in 2018 but were delivered in common stock during the three months ended March 31, 2019. Compensation expense recorded related to RSUs and PSUs in the consolidated statement of operations was as follows:
The remaining unrecognized compensation expense related to unvested RSUs and unvested PSUs was $23.5 million and $4.6 million, respectively, as of March 31, 2020 and is expected to be recognized over the related weighted average period of 2.2 years and 2.5 years, respectively. Compensation Expense The allocation of share-based compensation expense in the unaudited condensed consolidated statements of operations was as follows:
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Accumulated Other Comprehensive Loss, Net of Tax |
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Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Loss, Net of Tax | Accumulated Other Comprehensive Loss, Net of Tax Accumulated other comprehensive loss, net of tax consists of foreign currency translation adjustments, unrealized gains and losses from derivative instruments designated as cash flow hedges (Note 5) and pension and other postretirement adjustments (Note 7). The components of and changes in accumulated other comprehensive loss, net of tax, were as follows:
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Net Income per Common Share |
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Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Income per Common Share | Net Income per Common Share The following is a computation of basic and diluted net income per common share attributable to Acushnet Holdings Corp.:
Net income per common share attributable to Acushnet Holdings Corp. for the three months ended March 31, 2020 and 2019 was calculated using the treasury stock method. The Company’s potential dilutive securities for the three months ended March 31, 2020 and 2019 include RSUs and PSUs. PSUs vest based upon achievement of performance targets and are excluded from the diluted shares outstanding unless the performance targets have been met as of the end of the applicable reporting period regardless of whether such performance targets are probable of achievement. For the three months ended March 31, 2020 and 2019, the following securities have been excluded from the calculation of diluted weighted‑average common shares outstanding as their impact was determined to be anti‑dilutive:
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Segment Information |
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Segment Reporting [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Information | Segment Information The Company’s operating segments are based on how the Chief Operating Decision Maker (“CODM”) makes decisions about assessing performance and allocating resources. The Company has four reportable segments that are organized on the basis of product categories. These segments include Titleist golf balls, Titleist golf clubs, Titleist golf gear and FootJoy golf wear. The CODM primarily evaluates performance using segment operating income (loss). Segment operating income (loss) includes directly attributable expenses and certain shared costs of corporate administration that are allocated to the reportable segments, but excludes interest expense, net, restructuring charges, the non-service cost component of net periodic benefit cost, transaction fees and other non‑operating gains and losses as the Company does not allocate these to the reportable segments. The CODM does not evaluate a measure of assets when assessing performance. Results shown for the three months ended March 31, 2020 and 2019 are not necessarily those which would be achieved if each segment was an unaffiliated business enterprise. There are no intersegment transactions. Information by reportable segment and a reconciliation to reported amounts are as follows:
Information as to the Company’s operations in different geographical areas is presented below. Net sales are categorized based on the location in which the sale originates.
_______________________________________________________________________________ (1) Europe, the Middle East and Africa ("EMEA")
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Commitments and Contingencies |
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Commitments and Contingencies | Commitments and Contingencies Purchase Obligations During the normal course of its business, the Company enters into agreements to purchase goods and services, including purchase commitments for production materials, finished goods inventory, capital expenditures and endorsement arrangements with professional golfers. The Company's purchase obligations as of March 31, 2020 were as follows:
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Contingencies In connection with the Company’s acquisition of Acushnet Company, Beam Suntory, Inc. indemnified the Company for certain tax related obligations that relate to periods during which Fortune Brands, Inc. owned Acushnet Company. As of March 31, 2020 and December 31, 2019, the Company’s estimate of its receivable for these indemnifications was $9.6 million and $9.5 million, respectively, which was recorded in other assets on the unaudited condensed consolidated balance sheets. Litigation The Company and its subsidiaries are defendants in lawsuits associated with the normal conduct of their businesses and operations. It is not possible to predict the outcome of the pending actions, and, as with any litigation, it is possible that some of these actions could be decided unfavorably. Consequently, the Company is unable to estimate the ultimate aggregate amount of monetary loss, amounts covered by insurance or the financial impact that will result from such matters and has not recorded a liability related to potential losses.
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Restructuring Charges |
3 Months Ended |
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Mar. 31, 2020 | |
Restructuring and Related Activities [Abstract] | |
Restructuring Charges | Restructuring Charges During the first quarter of 2020, management approved a restructuring program to refine its business model and improve operational efficiencies. This program included both a voluntary retirement program and involuntary headcount reductions, which are discussed further below. During the three months ended March 31, 2020, the Company announced a voluntary bridge to retirement ("VBR") program for certain eligible employees. The program is part of the Company's long-term strategic planning process and is designed to bridge eligible employees to retirement. As part of this program, employees were offered severance in the form of salary continuation, including benefits, as well as accrued bonus incentives. During the three months ended March 31, 2020, the Company recorded $11.2 million in severance and other benefits related to the VBR program, of which $7.5 million was included in accrued compensation and benefits and $3.7 million was included in other noncurrent liabilities on the unaudited condensed consolidated balance sheet as of March 31, 2020. There are no further costs expected to be incurred with this voluntary program. During the three months ended March 31, 2020, the Company began involuntary headcount reductions and recorded $0.4 million in severance and other benefits. Subject to the length and severity of the COVID-19 pandemic, the Company may implement additional restructuring programs in the future.
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Summary of Significant Accounting Policies (Policies) |
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Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”) and include the accounts of Acushnet Holdings Corp. (the “Company”), its wholly-owned subsidiaries and less than wholly-owned subsidiaries, including a variable interest entity (“VIE”) in which the Company is the primary beneficiary. All intercompany balances and transactions have been eliminated in consolidation. Certain information in footnote disclosures normally included in annual financial statements has been condensed or omitted for the interim periods presented in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”) and U.S. GAAP. The year-end balance sheet data was derived from audited financial statements; however, the accompanying interim notes to the unaudited condensed consolidated financial statements do not include all disclosures required by U.S. GAAP. In the opinion of management, the financial statements contain all normal and recurring adjustments necessary to state fairly the financial position and results of operations of the Company. The results of operations for the three months ended March 31, 2020 are not necessarily indicative of results to be expected for the full year ending December 31, 2020, nor were those of the comparable 2019 period representative of those actually experienced for the full year ended December 31, 2019. These unaudited interim condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and related notes for the fiscal year ended December 31, 2019 included in its Annual Report on Form 10-K filed with the SEC on February 27, 2020.
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Use of Estimates | Use of Estimates The preparation of the Company’s unaudited condensed consolidated financial statements in accordance with U.S. GAAP requires management to make estimates and judgments that affect reported amounts of assets and liabilities and related disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company has also made estimates of the impact of COVID-19 within its unaudited condensed consolidated financial statements and there may be changes to those estimates in future periods. Actual results could differ from these estimates.
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Variable Interest Entities | Variable Interest Entities VIEs are entities that, by design, either (i) lack sufficient equity to permit the entity to finance its activities independently, or (ii) have equity holders that do not have the power to direct the activities of the entity that most significantly impact its economic performance, the obligation to absorb the entity’s expected losses, or the right to receive the entity’s expected residual returns. The Company consolidates a VIE when it is the primary beneficiary, which is the party that has both (i) the power to direct the activities that most significantly impact the VIE’s economic performance and (ii) through its interests in the VIE, the obligation to absorb expected losses or the right to receive expected benefits from the VIE that could potentially be significant to the VIE. The Company consolidates the accounts of Acushnet Lionscore Limited, a VIE, which is 40% owned by the Company. The sole purpose of the VIE is to manufacture the Company’s golf footwear and as such, the Company is deemed to be the primary beneficiary. The Company has presented separately on its consolidated balance sheets, to the extent material, the assets of its consolidated VIE that can only be used to settle specific obligations of its consolidated VIE and the liabilities of its consolidated VIE for which creditors do not have recourse to its general credit. The general creditors of the VIE do not have recourse to the Company. Certain directors of the VIE have guaranteed the credit lines of the VIE, for which there were no outstanding borrowings as of March 31, 2020 and December 31, 2019. In addition, pursuant to the terms of the agreement governing the VIE, the Company is not required to provide financial support to the VIE.
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Noncontrolling Interests and Redeemable Noncontrolling Interest | Noncontrolling Interests and Redeemable Noncontrolling Interest The ownership interests held by owners other than the Company in less than wholly-owned subsidiaries are classified as noncontrolling interests. Redeemable noncontrolling interests are those noncontrolling interests which are or may become redeemable at a fixed or determinable price on a fixed or determinable date, at the option of the holder, or upon occurrence of an event. The financial results and position of the noncontrolling interests are included in their entirety in the Company’s unaudited condensed consolidated statements of operations and unaudited condensed consolidated balance sheets. The value attributable to the noncontrolling interests is presented on the unaudited condensed consolidated balance sheets, separately from the equity attributable to the Company. The value attributable to the redeemable noncontrolling interest and the related loan to the minority shareholders, which is recorded as a reduction to redeemable noncontrolling interest, is presented in the unaudited condensed consolidated balance sheets as temporary equity between liabilities and shareholders’ equity. The amount of the loan to minority shareholders included in temporary equity on the unaudited condensed consolidated balance sheet was $4.4 million as of both March 31, 2020 and December 31, 2019. Net income (loss) and comprehensive income (loss) attributable to noncontrolling interests are presented separately on the unaudited condensed consolidated statements of operations and unaudited condensed consolidated statements of comprehensive income (loss), respectively.
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Cash and Restricted Cash | Cash and Restricted Cash Cash held in Company checking accounts is included in cash. Book overdrafts not subject to offset with other accounts with the same financial institution are classified as accounts payable. The Company classifies as restricted certain cash that is not available for use in its operations.
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Accounts Receivable | Accounts Receivable On January 1, 2020, the Company adopted Accounting Standards Update (“ASU”) 2016-13, "Financial Instruments -Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments" ("ASU 2016-13"), which replaces the incurred loss methodology with an expected loss methodology that is referred to as the current expected credit loss ("CECL") methodology. The CECL methodology requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. The measurement of expected credit losses under the CECL methodology is applicable to financial assets measured at amortized cost, including trade receivables. The only financial assets held by the Company which are subject to evaluation under the CECL model are trade receivables. The Company adopted ASU 2016-13 using the modified retrospective method. The adoption of this standard did not have an impact on the carrying value of trade receivables. Results for reporting periods beginning after January 1, 2020 are presented under ASU 2016-13 while prior period amounts continue to be reported in accordance with previously applicable GAAP. The Company estimates expected credit losses using a number of factors, including customer credit ratings, age of receivables, historical credit loss information and current and forecasted economic conditions which affect the collectability of the reported amounts. The Company continues to monitor the impact of the COVID-19 pandemic on its expected credit losses, which has been considered in the estimate of expected credit losses as of March 31, 2020.
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Foreign Currency Translation and Transactions | Foreign Currency Translation and Transactions Foreign currency transaction gains (losses) included in selling, general and administrative expense were losses of $1.0 million and gains of $0.5 million for the three months ended March 31, 2020 and 2019, respectively.
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Recently Adopted Accounting Standards and Recently Issued Accounting Standards | Recently Adopted Accounting Standards Intangibles —Goodwill and Other —Internal-Use Software On January 1, 2020, the Company adopted ASU 2018-15, "Intangibles -Goodwill and Other -Internal-Use Software (Subtopic 350-40): Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract" ("ASU 2018-15"). The amendments in this update aligned the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). The adoption of this standard did not have a material impact on the consolidated financial statements. Recently Issued Accounting Standards Income Taxes In December 2019, the Financial Accounting Standards Board ("FASB") issued ASU 2019-12, "Income Taxes (Topic 740) -Simplifying the Accounting for Income Taxes ("ASU 2019-12"). The amendments in this update simplify the accounting for income taxes by removing certain exceptions to general principles in Topic 740. The amendments also improve consistent application and simplify U.S. GAAP for other areas of Topic 740 by clarifying and amending existing guidance. ASU 2019-12 is effective for fiscal years beginning after December 15, 2020. Early adoption is permitted. The Company is currently evaluating the impact this standard will have on its consolidated financial statements. Defined Benefit Plans—Changes to the Disclosure Requirements for Defined Benefit Plans In August 2018, the FASB issued ASU 2018-14, "Compensation —Retirement Benefits —Defined Benefit Plans —General (Subtopic 715-20) —Disclosure Framework —Changes to the Disclosure Requirements for Defined Benefit Plans" ("ASU 2018-14"). The amendments in this update remove defined benefit plan disclosures that are no longer considered cost-beneficial, clarify the specific requirements of disclosures, and add disclosure requirements identified as relevant. ASU 2018-14 is effective for fiscal years ending after December 15, 2020. Early adoption is permitted. The adoption of this standard should be applied to all periods presented. The adoption of this standard will not have a material impact on the consolidated financial statements.
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Summary of Significant Accounting Policies (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||
Activity related to the allowance for doubtful accounts | The activity related to the allowance for doubtful accounts was as follows:
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Inventories (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of inventory | The components of inventories were as follows:
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Product Warranty (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Product Warranties Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of warranty obligation for accrued warranty expense | The activity related to the Company’s warranty obligation for accrued warranty expense was as follows:
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Derivative Financial Instruments (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of fair values of hedge instruments on the unaudited condensed consolidated balance sheets | The fair value of hedge instruments recognized on the unaudited condensed consolidated balance sheets was as follows:
(1) Excludes $0.7 million related to hedges deemed ineffective as of March 31, 2020. (2) Excludes $0.1 million related to hedges deemed ineffective as of March 31, 2020.
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Effect of hedge instruments on accumulated other comprehensive loss, net of tax | The hedge instrument gain (loss) recognized in accumulated other comprehensive loss, net of tax was as follows:
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Effect of hedge instrument in the unaudited condensed consolidated statement of operations | The hedge instrument gain (loss) recognized on the unaudited condensed consolidated statements of operations was as follows:
_______________________________________________________________________________
(2) Excludes net gains of $0.7 million reclassified out of accumulated other comprehensive loss, net of tax related to hedges deemed ineffective during the three months ended March 31, 2020.
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Fair Value Measurements (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of assets and liabilities measured at fair value on a recurring basis | Assets and liabilities measured at fair value on a recurring basis as of March 31, 2020 were as follows:
Assets and liabilities measured at fair value on a recurring basis as of December 31, 2019 were as follows:
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Pension and Other Postretirement Benefits (Tables) |
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Mar. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of components of net periodic benefit cost (income) | Components of net periodic benefit cost (income) were as follows:
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Common Stock (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of declared dividends per share | The Company declared dividends per common share, including DERs (Note 10), during the periods presented as follows:
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Schedule of Share Repurchase Activity | The Company's share repurchase activity was as follows:
_______________________________________________________________________________ (1) There were no shares repurchased from Magnus during the three months ended March 31, 2020 related to the Magnus share repurchase agreement.
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Equity Incentive Plans (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Payment Arrangement [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of restricted and performance stock units | A summary of the Company’s RSUs and PSUs as of March 31, 2020 and changes during the three months then ended is presented below:
_______________________________________________________________________________ (1) Included 52,386 shares of common stock related to RSUs and no shares of common stock related to PSUs that were not delivered as of March 31, 2020.
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Summary of shares of common stock issued | A summary of shares of common stock issued related to the 2015 Plan, including the impact of any DERs issued in common stock, is presented below:
______________________________________________________________________________ (1) Shares of common stock issued related to PSUs represents PSUs that vested in 2018 but were delivered in common stock during the three months ended March 31, 2019.
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Compensation expense recorded in the consolidated statement of operations | Compensation expense recorded related to RSUs and PSUs in the consolidated statement of operations was as follows:
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Schedule of compensation expense related to equity incentive plans | The allocation of share-based compensation expense in the unaudited condensed consolidated statements of operations was as follows:
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Accumulated Other Comprehensive Loss, Net of Tax (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of changes in each component of accumulated comprehensive loss, net of tax effects | The components of and changes in accumulated other comprehensive loss, net of tax, were as follows:
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Net Income per Common Share (Tables) |
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Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of computation of basic and diluted net income per common share | The following is a computation of basic and diluted net income per common share attributable to Acushnet Holdings Corp.:
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Schedule of securities excluded from the calculation of diluted weighted average common shares. | For the three months ended March 31, 2020 and 2019, the following securities have been excluded from the calculation of diluted weighted‑average common shares outstanding as their impact was determined to be anti‑dilutive:
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Segment Information (Tables) |
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Segment Reporting [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of information by reportable segment and a reconciliation to reported amounts | Information by reportable segment and a reconciliation to reported amounts are as follows:
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Schedule of net sales by geographical area | Information as to the Company’s operations in different geographical areas is presented below. Net sales are categorized based on the location in which the sale originates.
_______________________________________________________________________________ (1) Europe, the Middle East and Africa ("EMEA")
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Commitments and Contingencies (Tables) |
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of purchase obligations | The Company's purchase obligations as of March 31, 2020 were as follows:
_______________________________________________________________________________ (1) The reported amounts exclude those liabilities included in accounts payable or accrued liabilities on the unaudited condensed consolidated balance sheet as of March 31, 2020.
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Summary of Significant Accounting Policies - Narrative (Details) - USD ($) |
3 Months Ended | |||
---|---|---|---|---|
Apr. 01, 2020 |
Mar. 31, 2020 |
Mar. 31, 2019 |
Dec. 31, 2019 |
|
Variable Interest Entity [Line Items] | ||||
Loan to minority shareholders included in temporary equity | $ 4,400,000 | $ 4,400,000 | ||
Restricted cash | 2,000,000.0 | 2,000,000 | ||
Transaction gains (losses) included in selling, general and administrative expense | $ (1,000,000.0) | $ 500,000 | ||
VIE | ||||
Variable Interest Entity [Line Items] | ||||
Ownership percentage | 40.00% | |||
Outstanding borrowings | $ 0 | $ 0 | ||
Subsequent Event | ||||
Variable Interest Entity [Line Items] | ||||
Proceeds from revolving credit facility | $ 200,000,000.0 | |||
Outstanding borrowings | $ 367,500,000 |
Summary of Significant Accounting Policies - Activity Related to the Allowance for Doubtful Accounts (Details) $ in Thousands |
3 Months Ended |
---|---|
Mar. 31, 2020
USD ($)
| |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | |
Balance at beginning of period | $ 5,338 |
Bad debt expense | 916 |
Amount of receivables written off | (286) |
Foreign currency translation and other | (186) |
Balance at end of period | $ 5,782 |
Inventories (Details) - USD ($) $ in Thousands |
Mar. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Inventory Disclosure [Abstract] | ||
Raw materials and supplies | $ 73,642 | $ 87,675 |
Work-in-process | 27,848 | 22,024 |
Finished goods | 263,445 | 288,669 |
Inventories | $ 364,935 | $ 398,368 |
Product Warranty (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2020 |
Mar. 31, 2019 |
|
Activity for accrued warranty expense | ||
Balance at beginning of period | $ 4,048 | $ 3,331 |
Provision | 1,209 | 1,074 |
Claims paid/costs incurred | (944) | (876) |
Foreign currency translation and other | (164) | 19 |
Balance at end of period | $ 4,149 | $ 3,548 |
Minimum | ||
Product Warranty Liability [Line Items] | ||
Product warranty period | 1 year | |
Maximum | ||
Product Warranty Liability [Line Items] | ||
Product warranty period | 2 years |
Debt and Financing Arrangements (Details) - USD ($) $ in Millions |
Apr. 01, 2020 |
Mar. 31, 2020 |
Dec. 31, 2019 |
---|---|---|---|
Subsequent Event | |||
Line of Credit Facility [Line Items] | |||
Outstanding borrowings | $ 367.5 | ||
Available borrowings | 22.4 | ||
Proceeds from revolving credit facility | 200.0 | ||
Outstanding letters of credit | $ 10.1 | ||
Unsecured Local Credit Facilities | |||
Line of Credit Facility [Line Items] | |||
Weighted average interest rate | 2.09% | 2.29% | |
Available borrowings | $ 52.8 | ||
Other short-term borrowings, outstanding borrowings | 9.8 | $ 3.8 | |
Revolving credit facility | |||
Line of Credit Facility [Line Items] | |||
Outstanding borrowings | $ 165.0 | $ 50.3 | |
Weighted average interest rate | 2.25% | 3.54% | |
Available borrowings | $ 225.3 | ||
Revolving credit facility | Letters of credit | |||
Line of Credit Facility [Line Items] | |||
Outstanding borrowings | 9.7 | ||
Letters of credit | |||
Line of Credit Facility [Line Items] | |||
Outstanding borrowings | 13.3 | $ 14.8 | |
Line of credit secured | 10.2 | 11.6 | |
Maximum commitment | $ 59.7 | $ 59.8 |
Pension and Other Postretirement Benefits (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2020 |
Mar. 31, 2019 |
|
Pension Benefits | ||
Components of net periodic benefit cost (income) | ||
Service cost | $ 2,316 | $ 2,242 |
Interest cost | 2,512 | 2,980 |
Expected return on plan assets | (2,903) | (3,299) |
Amortization of net loss (gain) | 964 | 272 |
Amortization of prior service cost (credit) | 70 | 44 |
Net periodic benefit cost (income) | 2,959 | 2,239 |
Postretirement Benefits | ||
Components of net periodic benefit cost (income) | ||
Service cost | 171 | 161 |
Interest cost | 112 | 138 |
Expected return on plan assets | 0 | 0 |
Amortization of net loss (gain) | (214) | (363) |
Amortization of prior service cost (credit) | (34) | (34) |
Net periodic benefit cost (income) | $ 35 | $ (98) |
Income Taxes (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2020 |
Mar. 31, 2019 |
|
Income Tax Disclosure [Abstract] | ||
Decrease in income tax expense | $ 4,700 | |
Income tax expense | $ 7,640 | $ 12,275 |
Effective tax rate | 46.00% | 25.40% |
Common Stock - Schedule of Share Repurchase Activity (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2020 |
Mar. 31, 2019 |
|
Equity [Abstract] | ||
Shares repurchased (in shares) | 243,894 | 0 |
Average price (in dollars per share) | $ 28.60 | $ 0 |
Aggregate value | $ 6,976 | $ 0 |
Equity Incentive Plans - Compensation Expense Recorded in the Consolidated Statement of Operations (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2020 |
Mar. 31, 2019 |
|
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Compensation expense | $ 2,187 | $ 1,785 |
RSUs | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Compensation expense | 2,478 | 1,570 |
PSUs | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Compensation expense | $ (455) | $ 215 |
Equity Incentive Plans - Allocation of Compensation Expense (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2020 |
Mar. 31, 2019 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total compensation expense before income tax | $ 2,187 | $ 1,785 |
Income tax benefit | 463 | 390 |
Total compensation expense, net of income tax | 1,724 | 1,395 |
Cost of goods sold | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total compensation expense before income tax | 225 | 167 |
Selling, general and administrative | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total compensation expense before income tax | 1,714 | 1,467 |
Research and development | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total compensation expense before income tax | $ 248 | $ 151 |
Net Income per Common Share - Computation of Basic and Diluted Net Income Per Common Share (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2020 |
Mar. 31, 2019 |
|
Earnings Per Share [Abstract] | ||
Net income attributable to Acushnet Holdings Corp. | $ 8,877 | $ 34,926 |
Weighted average number of common shares: | ||
Basic (in shares) | 74,545,280 | 76,006,989 |
Diluted (in shares) | 75,099,930 | 76,264,038 |
Net income per common share attributable to Acushnet Holdings Corp.: | ||
Basic (in dollars per share) | $ 0.12 | $ 0.46 |
Diluted (in dollars per share) | $ 0.12 | $ 0.46 |
Net Income per Common Share - Calculation of Diluted Weighted Average Common Shares Outstanding (Details) - shares |
3 Months Ended | |
---|---|---|
Mar. 31, 2020 |
Mar. 31, 2019 |
|
RSUs | ||
Securities excluded from calculation of diluted weighted-average common shares outstanding as their impact was anti-dilutive (in shares) | 0 | 4,050 |
Segment Information - Geographical Areas (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2020 |
Mar. 31, 2019 |
|
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total net sales | $ 408,741 | $ 433,702 |
United States | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total net sales | 211,008 | 230,383 |
EMEA | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total net sales | 74,671 | 71,078 |
Japan | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total net sales | 37,556 | 40,735 |
Korea | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total net sales | 50,449 | 49,042 |
Rest of world | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total net sales | $ 35,057 | $ 42,464 |
Commitments and Contingencies - Purchase Commitments (Details) $ in Thousands |
Mar. 31, 2020
USD ($)
|
---|---|
Payments Due by Period | |
Remainder of 2020 | $ 139,355 |
2021 | 17,955 |
2022 | 4,065 |
2023 | 649 |
2024 | 467 |
Thereafter | $ 1,603 |
Commitments and Contingencies - Narrative (Details) - USD ($) $ in Millions |
Mar. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Commitments and Contingencies Disclosure [Abstract] | ||
Estimated receivable for indemnifications | $ 9.6 | $ 9.5 |
Restructuring Charges (Details) - VBR $ in Millions |
3 Months Ended |
---|---|
Mar. 31, 2020
USD ($)
| |
Restructuring Cost and Reserve [Line Items] | |
Accrued compensation and benefits | $ 7.5 |
Retirement Benefits | |
Restructuring Cost and Reserve [Line Items] | |
Severance and other benefits | 11.2 |
Other noncurrent liabilities | 3.7 |
Severance | |
Restructuring Cost and Reserve [Line Items] | |
Severance and other benefits | $ 0.4 |