UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 
FORM 8-K
 
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
 
Date of Report (Date of Earliest Event Reported): November 8, 2017
 
Acushnet Holdings Corp.
(Exact Name of Registrant as Specified in its Charter)
 
Delaware	001-37935	45-5644353	
(State or Other Jurisdiction
of Incorporation)	(Commission
File Number)	(IRS Employer
Identification No.)	
 
333 Bridge Street
Fairhaven, Massachusetts 02719
(Address of Principal Executive Offices) (Zip Code)
 
(800) 225‑8500
(Registrant’s Telephone Number, Including Area Code)
 
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
☐    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
 
Emerging growth company   ☐
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.   ☐

 

Item 2.02   Results of Operations and Financial Condition.
 
On November 8, 2017, Acushnet Holdings Corp. (the “Company”) issued a press release announcing the Company’s results of operations for its third quarter ended September 30, 2017. A copy of the press release is attached to this Current Report on Form 8-K as Exhibit 99.1.
 
The information contained in this Current Report on Form 8-K and Exhibit 99.1 shall not be deemed “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
 
Item 9.01   Financial Statements and Exhibits.
 
(d) Exhibits.
 
Exhibit
No.	    	Description	
 	 	 	
99.1  	 	Press release of Acushnet Holdings Corp. dated November 8, 2017, announcing results for the quarter ended September 30, 2017.	

2

SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 	ACUSHNET HOLDINGS CORP.	
 	 	
 	By:	/s/ William Burke	
 	Name:	William Burke	
 	Title:	Executive Vice President, Chief Financial Officer and Treasurer	
 
Date: November 8, 2017

3

Exhibit 99.1
 
Acushnet Holdings Corp. Announces
Third Quarter and Year-to-Date 2017 Financial Results,
Declares Quarterly Cash Dividend
Third Quarter and Year-to-Date 2017 Financial Results

	·		Third quarter net sales of $347.3 million, up 2.3% year over year, or up 2.9% in constant currency	
	·		Year-to-date net sales of $1,208.9 million, down 2.7% year over year, or down 2.0% in constant currency	
	·		Third quarter net income attributable to Acushnet Holdings Corp. of $9.3 million, up $14.8 million year over year	
	·		Year-to-date net income attributable to Acushnet Holdings Corp. of $80.4 million, up $35.2 million year over year	
	·		Third quarter Adjusted EBITDA of $32.2 million, up 15.0% year over year	
	·		Year-to-date Adjusted EBITDA of $182.5 million, down 4.1% year over year	
Quarterly Cash Dividend

	·		Declares quarterly cash dividend of $0.12 per share; $8.9 million on an aggregate quarterly basis	
FAIRHAVEN, MA – November 8, 2017 –  Acushnet Holdings Corp. (NYSE: GOLF) ("Acushnet"), a global leader in the design, development, manufacture and distribution of performance-driven golf products, today reported financial results for the three and nine months ended September 30, 2017.
Wally Uihlein, Acushnet President and CEO said, "We are encouraged to see that the global golf industry continues to structurally improve through the first nine months of 2017.  While near term, US demand trends have been impacted as the focus shifted to important life priorities in areas hit by the recent hurricanes, it is good to see many areas are recovering well as a sense of normalcy returns. We are confident that our proven strategy, dedicated associates and valued trade partners will enable us to leverage a stronger industry and extend our success over the long term."      
 
David Maher, Acushnet COO said, "Acushnet delivered a solid third quarter with global growth driven by the United States and South Korea. We are particularly pleased with the recent launch of the Titleist 818 hybrids and the 718 irons including the new AP3. Tour adoption was strong at introduction, the global roll-out with our trade partners was well executed, and initial golfer response to these new golf clubs has been terrific. New Titleist DT TruSoft golf balls, and FootJoy's DNA Helix golf shoes were also launched successfully in the quarter. Looking forward, the Acushnet innovation engine is in high gear and we are excited about the many new product offerings coming from Titleist and FootJoy in 2018."

1

Summary of Third Quarter 2017 Financial Results

 	 	Three months ended	 	 	 	 	 	 	 	Constant Currency	
 	 	September 30, 	 	Increase/(Decrease)	 	Increase/(Decrease)	
 	    	2017	    	2016	    	$ change	    	% change	 	$ change	    	% change	
(in millions)	 	 	  	 	 	  	 	 	  	 	  	 	 	 	  	 	  	 	
Net sales	 	$	
347.3	 	$	
339.3	 	$	8.0	 	2.3	%  	 	$	9.8	 	2.9	%	
Net income (loss) attributable to Acushnet Holdings Corp	 	$	
9.3	 	$	(5.5)	 	$	14.8	 	269.1	%  	 	 	  	 	  	 	
Adjusted EBITDA	 	$	
32.2	 	$	
28.0	 	$	4.2	 	15.0	%  	 	 	  	 	  	 	
 
Consolidated net sales for the quarter increased by 2.3%, or by 2.9% on a constant currency basis, driven primarily by the launch of the Titleist 718 irons and 818 hybrids. 
On a geographic basis, consolidated net sales in the United States increased by 4.6% in the quarter. Net sales in regions outside the United States were down 0.1%, and up 1.1% on a constant currency basis, with Korea up 6.4% and Rest of World up 6.3%, offset by Japan down 6.9%. 
Segment specifics:

	·		3.5% decrease in net sales (3.1% decrease on a constant currency basis) of Titleist golf balls driven by sales volume declines in both Pro V1 and performance models.  In the United States, sales volumes were impacted by unfavorable weather conditions as well as increased competitive promotional activity in the marketplace.	
	·		9.5% increase in net sales (10.3% increase on a constant currency basis) of Titleist golf clubs due to higher sales volumes, primarily due to product launches in our iron series and hybrids.	
	·		1.3% increase in net sales (2.1% increase on a constant currency basis) of Titleist golf gear.  This increase was primarily due to sales volume growth in our travel gear category.	
	·		3.3% increase in net sales (3.7% increase on a constant currency basis) in FootJoy golf wear primarily due to higher average selling prices and a sales volume increase in our apparel category.	
Net income attributable to Acushnet improved by $14.8 million to $9.3 million, primarily as a result of lower interest expense and higher income from operations, partially offset by higher income tax expense.
Adjusted EBITDA was $32.2 million, up 15.0% year over year.  Adjusted EBITDA margin was 9.3% for the third quarter versus 8.3% for the prior year period.

2

Summary of First Nine Months 2017 Financial Results

 	 	Nine months ended	 	 	 	 	 	 	 	Constant Currency	
 	 	September 30, 	 	Increase/(Decrease)	 	Increase/(Decrease)	
 	    	2017	    	2016	    	$ change	    	% change	 	$ change	    	% change	
(in millions)	 	 	  	 	 	  	 	 	  	 	  	 	 	 	  	 	  	 	
Net sales	 	$	
1,208.9	 	$	
1,242.5	 	$	(33.6)	 	(2.7)	%	 	$	(24.3)	 	(2.0)	%	
Net income attributable to Acushnet Holdings Corp	 	$	
80.4	 	$	
45.2	 	$	35.2	 	77.9	%	 	 	  	 	  	 	
Adjusted EBITDA	 	$	
182.5	 	$	
190.3	 	$	(7.8)	 	(4.1)	%	 	 	  	 	  	 	
 
Consolidated net sales for the first nine months of 2017 decreased by 2.7%, or by 2.0% on a constant currency basis. 
On a geographic basis, consolidated net sales in the United States decreased by 3.0% in the nine month period.  Net sales in the United States were impacted by a reduced store count as a result of the retail channel disruptions in 2016 as well as unfavorable weather conditions which negatively impacted both rounds of play and golf club fitting and trial activities.  Acushnet posted a year-on-year decline in net sales in regions outside the United States of 2.4%, down 0.8% on a constant currency basis, with Korea up 11.9%, offset by Japan down 10.4%.
Segment specifics:

	·		2.7% decrease in net sales (2.1% decrease on a constant currency basis) of Titleist golf balls.  This decrease was primarily driven by a sales volume decline of our performance golf ball models which were in their second year of the two-year product life cycle and was partially offset by a sales volume increase of our newly introduced Pro V1 and Pro V1x golf balls.  In the United States, sales volumes were impacted by a reduced store count as a result of the retail channel disruptions in 2016, unfavorable weather conditions which negatively impacted rounds of play, as well as increased competitive promotional activity in the marketplace.	
	·		10.0% decrease in net sales (9.2% decrease on a constant currency basis) of Titleist golf clubs.  This decrease was primarily driven by lower sales volumes of Vokey Design wedges, which were in their second model year, and prior generation irons.  In the United States, sales volumes were impacted by a reduced store count as a result of the retail channel disruptions in 2016 as well as unfavorable weather conditions which negatively impacted golf club fitting and trial activities.  This decrease was partially offset by an increase in average selling prices, in particular for the new 917 model drivers and fairways.	
	·		5.0% increase in net sales (5.4% increase on a constant currency basis) of Titleist golf gear.  This increase was primarily due to higher average selling prices in all categories and higher sales volume growth in the travel category.	
	·		1.7% decrease in net sales (0.5% decrease on a constant currency basis) in FootJoy golf wear primarily due to a sales volume decline in footwear, partially offset by a sales volume increase in apparel. 	
Net income attributable to Acushnet improved by $35.2 million to $80.4 million, primarily as a result of lower interest expense and higher income from operations. 

3

Adjusted EBITDA was $182.5 million, down 4.1% year over year.  Adjusted EBITDA margin was 15.1% versus 15.3% for the prior year period.
 
Declares Quarterly Cash Dividend
Acushnet Holdings board of directors today declared a quarterly cash dividend in an amount of $0.12 per share of common stock. The dividend will be payable on December 15, 2017, to stockholders of record on December 1, 2017.  The number of shares outstanding as of September 30, 2017 was 74,451,977.
 
Updated 2017 Outlook

	·		Consolidated net sales are expected to be approximately $1,545 to 1,555 million in 2017.	
	·		Consolidated net sales on a constant currency basis are expected to be in the range of a decrease of 1% to a decrease of 0.4% in 2017.	
	·		Adjusted EBITDA is expected to be approximately $220 to 225 million in 2017.	
 
Investor Conference Call
Acushnet will hold a conference call at 8:30 am (Eastern Time) on November 8, 2017 to discuss the financial results and host a question and answer session.  A live webcast of the conference call will be accessible at www.AcushnetHoldingsCorp.com/ir.  A replay archive of the webcast will be available shortly after the call concludes.
 
About Acushnet Holdings Corp.
We are the global leader in the design, development, manufacture and distribution of performance-driven golf products, which are widely recognized for their quality excellence. Driven by our focus on dedicated and discerning golfers and the golf shops that serve them, we believe we are the most authentic and enduring company in the golf industry. Our mission - to be the performance and quality leader in every golf product category in which we compete - has remained consistent since we entered the golf ball business in 1932.  Today, we are the steward of two of the most revered brands in golf – Titleist, one of golf’s leading performance equipment brands, and FootJoy, one of golf’s leading performance wear brands.  Additional information can be found at www.acushnetholdingscorp.com.

4

Forward-Looking Statements
This release includes forward-looking statements that reflect our current views with respect to, among other things, our operations and financial performance. These forward-looking statements are included throughout this release and relate to matters such as our industry, business strategy, goals and expectations concerning our market position, future operations, margins, profitability, capital expenditures, liquidity and capital resources and other financial and operating information such as our anticipated consolidated net sales, consolidated net sales on a constant currency basis and adjusted EBITDA. We use words like “guidance,” “outlook,” “anticipate,” “assume,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “future,” “will,” “seek,” “foreseeable” and similar terms and phrases to identify forward-looking statements in this release.
The forward-looking statements contained in this release are based on management’s current expectations and are subject to uncertainty and changes in circumstances. We cannot assure you that future developments affecting us will be those that we have anticipated. Actual results may differ materially from these expectations due to changes in global, regional or local economic, business, competitive, market, regulatory and other factors, many of which are beyond our control. Certain of these factors and other cautionary statements are included in this release or in the sections entitled “Risk Factors” and “Management’s Discussion and Analysis” in our Annual Report on Form 10-K for the year ended December 31, 2016 filed with the SEC  on March 30, 2017 as updated by our periodic reports subsequently filed with the SEC. Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, our actual results may vary in material respects from those projected in these forward-looking statements.
Any forward-looking statement made by us in this release speaks only as of the date of this release. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements and you should not place undue reliance on our forward-looking statements. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures, investments or other strategic transactions we may make. We undertake no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by any applicable securities laws.
Media Contact:                     
AcushnetPR@icrinc.com  
Investor Contact:
IR@AcushnetGolf.com  

5

ACUSHNET HOLDINGS CORP.
 
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Three months ended  September 30, 	 	Nine months ended  September 30, 	
(in thousands)	    	2017	    	2016	    	2017	 	2016	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Net sales	 	$	347,263	 	$	339,318	 	$	1,208,866	 	$	1,242,514	
Cost of goods sold	 	 	174,295	 	 	172,416	 	 	586,574	 	 	611,783	
Gross profit	 	 	172,968	 	 	166,902	 	 	622,292	 	 	630,731	
Operating expenses:	 	 	 	 	 	 	 	 	 	 	 	 	
Selling, general and administrative	 	 	142,017	 	 	142,995	 	 	441,823	 	 	456,434	
Research and development	 	 	11,060	 	 	12,473	 	 	35,659	 	 	35,296	
Intangible amortization	 	 	1,626	 	 	1,654	 	 	4,872	 	 	4,957	
Restructuring charges	 	 	 -	 	 	174	 	 	 -	 	 	816	
Income from operations	 	 	18,265	 	 	9,606	 	 	139,938	 	 	133,228	
Interest expense, net	 	 	4,040	 	 	15,672	 	 	11,863	 	 	44,076	
Other (income) expense, net	 	 	103	 	 	(2,449)	 	 	(407)	 	 	1,389	
Income (loss) before income taxes	 	 	14,122	 	 	(3,617)	 	 	128,482	 	 	87,763	
Income tax expense	 	 	3,488	 	 	785	 	 	44,180	 	 	39,495	
Net income (loss)	 	 	10,634	 	 	(4,402)	 	 	84,302	 	 	48,268	
Less:  Net income attributable to noncontrolling interests	 	 	(1,316)	 	 	(1,124)	 	 	(3,854)	 	 	(3,077)	
Net income (loss) attributable to Acushnet Holdings Corp.	 	$	9,318	 	$	(5,526)	 	$	80,448	 	$	45,191	

 

 

 

 

 

 

 

 

6

 
ACUSHNET HOLDINGS CORP.
 
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

 	 	September 30, 	 	December 31, 	
(in thousands, except share and per share amounts)	    	2017	    	2016	
 	 	 	 	 	 	 	
Assets	 	 	 	 	 	 	
Current assets	 	 	 	 	 	 	
Cash and restricted cash ($15,738 and $13,811 attributable to the FootJoy golf shoe joint venture ("JV"))	 	$	73,191	 	$	79,140	
Accounts receivable, net	 	 	209,437	 	 	177,506	
Inventories ($12,922 and $14,633 attributable to the FootJoy JV)	 	 	320,974	 	 	323,289	
Other assets	 	 	70,064	 	 	84,596	
Total current assets	 	 	673,666	 	 	664,531	
Property, plant and equipment, net ($10,093 and $10,709 attributable to the FootJoy JV)	 	 	228,381	 	 	239,748	
Goodwill ($32,312 and $32,312 attributable to the FootJoy JV)	 	 	185,092	 	 	179,241	
Intangible assets, net	 	 	483,511	 	 	489,988	
Deferred income taxes	 	 	104,248	 	 	130,416	
Other assets ($2,674 and $2,642 attributable to the FootJoy JV)	 	 	30,662	 	 	32,247	
Total assets	 	$	1,705,560	 	$	1,736,171	
Liabilities and Equity	 	 	 	 	 	 	
Current liabilities	 	 	 	 	 	 	
Short-term debt	 	$	14,327	 	$	42,495	
Current portion of long-term debt	 	 	23,750	 	 	18,750	
Accounts payable ($7,428 and $10,397 attributable to the FootJoy JV)	 	 	91,085	 	 	87,608	
Accrued taxes	 	 	21,623	 	 	41,962	
Accrued compensation and benefits ($540 and $780 attributable to the FootJoy JV)	 	 	68,434	 	 	224,230	
Accrued expenses and other liabilities ($5,980 and $4,121 attributable to the FootJoy JV)	 	 	72,131	 	 	47,063	
Total current liabilities	 	 	291,350	 	 	462,108	
Long-term debt and capital lease obligations	 	 	425,719	 	 	348,348	
Deferred income taxes	 	 	5,893	 	 	7,452	
Accrued pension and other postretirement benefits ($1,743 and $1,946 attributable to the FootJoy JV)	 	 	123,401	 	 	135,339	
Other noncurrent liabilities ($4,065 and $3,368 attributable to the FootJoy JV)	 	 	16,529	 	 	14,101	
Total liabilities	 	 	862,892	 	 	967,348	
 	 	 	 	 	 	 	
Shareholders' Equity	 	 	 	 	 	 	
Common stock, $0.001 par value, 500,000,000 shares authorized; 74,451,977 and 74,093,598 shares issued and outstanding	 	 	74	 	 	74	
Additional paid-in capital	 	 	891,249	 	 	880,576	
Accumulated other comprehensive loss, net of tax	 	 	(79,717)	 	 	(90,834)	
Retained deficit	 	 	(950)	 	 	(53,951)	
Total equity attributable to Acushnet Holdings Corp.	 	 	810,656	 	 	735,865	
Noncontrolling interests	 	 	32,012	 	 	32,958	
Total shareholders' equity	 	 	842,668	 	 	768,823	
Total liabilities and shareholders' equity	 	$	1,705,560	 	$	1,736,171	

7

ACUSHNET HOLDINGS CORP.
 
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

 	 	Nine months ended  September 30, 	
(in thousands)	    	2017	    	2016	
Cash flows from operating activities	 	 	 	 	 	 	
Net income	 	$	84,302	 	$	48,268	
Adjustments to reconcile net income to cash provided by (used in) operating activities	 	 	 -	 	 	 -	
Depreciation and amortization	 	 	30,667	 	 	30,553	
Unrealized foreign exchange gain	 	 	(2,885)	 	 	(1,069)	
Amortization of debt issuance costs	 	 	990	 	 	3,036	
Amortization of discount on bonds payable	 	 	 -	 	 	3,963	
Change in fair value of common stock warrants	 	 	 -	 	 	6,112	
Share-based compensation	 	 	11,576	 	 	7,123	
Loss on disposals of property, plant and equipment	 	 	466	 	 	82	
Deferred income taxes	 	 	28,415	 	 	25,575	
Changes in operating assets and liabilities	 	 	(171,415)	 	 	(1,615)	
Cash flows provided by (used in) operating activities	 	 	(17,884)	 	 	122,028	
Cash flows from investing activities	 	 	 	 	 	 	
Additions to property, plant and equipment	 	 	(12,781)	 	 	(13,502)	
Cash flows used in investing activities	 	 	(12,781)	 	 	(13,502)	
Cash flows from financing activities	 	 	 	 	 	 	
Decrease in short-term borrowings, net	 	 	(31,719)	 	 	(28,163)	
Proceeds from delayed draw term loan A facility	 	 	100,000	 	 	 -	
Repayment of term loan facilities	 	 	(17,814)	 	 	 -	
Repayment of senior term loan facility	 	 	 -	 	 	(30,000)	
Proceeds from senior term loan facility	 	 	 -	 	 	375,000	
Repayment of secured floating rate notes	 	 	 -	 	 	(375,000)	
Proceeds from exercise of common stock warrants	 	 	 -	 	 	34,503	
Repayment of bonds	 	 	 -	 	 	(34,503)	
Debt issuance costs	 	 	 -	 	 	(6,469)	
Dividends paid on common stock	 	 	(26,802)	 	 	 -	
Dividends paid on Series A redeemable convertible preferred stock	 	 	 -	 	 	(13,861)	
Dividends paid to noncontrolling interests	 	 	(2,400)	 	 	(3,000)	
Payment of employee restricted stock tax withholdings	 	 	(903)	 	 	 -	
Cash flows provided by (used in) financing activities	 	 	20,362	 	 	(81,493)	
Effect of foreign exchange rate changes on cash	 	 	4,354	 	 	2,701	
Net increase (decrease) in cash	 	 	(5,949)	 	 	29,734	
Cash and restricted cash, beginning of year	 	 	79,140	 	 	59,134	
Cash and restricted cash, end of period	 	$	73,191	 	$	88,868	

8

ACUSHNET HOLDINGS CORP.
Supplemental Net Sales Information (Unaudited)
Third Quarter Net Sales by Segment

 	 	Three months ended	 	 	 	 	 	 	 	Constant Currency	 	
 	 	September 30, 	 	Increase/(Decrease)	 	Increase/(Decrease)	
 	    	2017	    	2016	    	$ change	    	% change	 	$ change	    	% change	
(in thousands)	 	 	 	
Titleist golf balls	 	$	114,950	 	$	119,079	 	$	(4,129)	 	(3.5)	%	 	$	(3,723)	 	(3.1)	%	
Titleist golf clubs	 	 	84,676	 	 	77,316	 	 	7,360	 	9.5	%	 	 	7,949	 	10.3	%	
Titleist golf gear	 	 	30,895	 	 	30,499	 	 	396	 	1.3	%	 	 	626	 	2.1	%	
FootJoy golf wear	 	 	101,010	 	 	97,758	 	 	3,252	 	3.3	%	 	 	3,618	 	3.7	%	

Third Quarter Net Sales by Region

 	 	Three months ended	 	 	 	Constant Currency	
 	 	September 30, 	 	Increase/(Decrease)	 	Increase/(Decrease)	
 	    	2017	    	2016	    	$ change	    	% change	 	$ change	    	% change	
(in thousands)	 	 	 	
United States	 	$	183,495	 	$	175,448	 	$	8,047	 	4.6	%	 	$	8,047	 	4.6	%	
EMEA	 	 	40,646	 	 	39,565	 	 	1,081	 	2.7	%	 	 	186	 	0.5	%	
Japan	 	 	41,130	 	 	47,659	 	 	(6,529)	 	(13.7)	%	 	 	(3,288)	 	(6.9)	%	
Korea	 	 	47,502	 	 	44,846	 	 	2,656	 	5.9	%	 	 	2,871	 	6.4	%	
Rest of world	 	 	34,490	 	 	31,800	 	 	2,690	 	8.5	%	 	 	2,009	 	6.3	%	
Total sales	 	$	347,263	 	$	339,318	 	$	7,945	 	2.3	%	 	$	9,825	 	2.9	%	

Nine Months Net Sales by Segment  

 	 	Nine months ended	 	 	 	 	 	 	 	Constant Currency	 	
 	 	September 30, 	 	Increase/(Decrease)	 	Increase/(Decrease)	
 	    	2017	    	2016	    	$ change	    	% change	 	$ change	    	% change	
(in thousands)	 	 	 	
Titleist golf balls	 	$	404,101	 	$	415,328	 	$	(11,227)	 	(2.7)	%	 	$	(8,865)	 	(2.1)	%	
Titleist golf clubs	 	 	279,955	 	 	311,145	 	 	(31,190)	 	(10.0)	%	 	 	(28,590)	 	(9.2)	%	
Titleist golf gear	 	 	120,585	 	 	114,833	 	 	5,752	 	5.0	%	 	 	6,241	 	5.4	%	
FootJoy golf wear	 	 	355,750	 	 	361,788	 	 	(6,038)	 	(1.7)	%	 	 	(1,740)	 	(0.5)	%	

Nine Months Net Sales by Region  

 	 	Nine months ended	 	 	 	Constant Currency	
 	 	September 30, 	 	Increase/(Decrease)	 	Increase/(Decrease)	
 	    	2017	 	2016	    	$ change	 	% change	 	$ change	 	% change	
(in thousands)	 	 	 	
United States	 	$	630,784	 	$	650,394	 	$	(19,610)	 	(3.0)	%	 	$	(19,610)	 	(3.0)	%	
EMEA	 	 	166,533	 	 	177,221	 	 	(10,688)	 	(6.0)	%	 	 	(1,431)	 	(0.8)	%	
Japan	 	 	135,607	 	 	155,233	 	 	(19,626)	 	(12.6)	%	 	 	(16,182)	 	(10.4)	%	
Korea	 	 	153,354	 	 	133,958	 	 	19,396	 	14.5	%	 	 	15,963	 	11.9	%	
Rest of world	 	 	122,588	 	 	125,708	 	 	(3,120)	 	(2.5)	%	 	 	(3,082)	 	(2.5)	%	
Total sales	 	$	1,208,866	 	$	1,242,514	 	$	(33,648)	 	(2.7)	%	 	$	(24,342)	 	(2.0)	%	

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ACUSHNET HOLDINGS CORP.
Reconciliation of GAAP to Non-GAAP Measures
(Unaudited)
 
Use of Non-GAAP Financial Measures
The Company reports its financial results in accordance with generally accepted accounting principles in the United States (“GAAP”).  However, this release includes the non-GAAP financial measures of net sales in constant currency and Adjusted EBITDA. These non-GAAP financial measures are not measures of financial performance in accordance with GAAP and may exclude items that are significant to understanding and assessing the Company’s financial results. Therefore, these measures should not be considered in isolation or as an alternative to net sales, net income or other measures of profitability or performance under GAAP. You should be aware that the Company’s presentation of these measures may not be comparable to similarly-titled measures used by other companies.
We use net sales on a constant currency basis to evaluate the sales performance of our business in period over period comparisons and for forecasting our business going forward. Constant currency information allows us to estimate what our sales performance would have been without changes in foreign currency exchange rates. This information is calculated by taking the current period local currency sales and translating them into U.S. dollars based upon the foreign currency exchange rates for the applicable comparable prior period. This constant currency information should not be considered in isolation or as a substitute for any measure derived in accordance with GAAP. Our presentation of constant currency information may not be consistent with the manner in which similar measures are derived or used by other companies.
Adjusted EBITDA represents net income attributable to Acushnet Holdings Corp. adjusted for income tax expense, interest expense, depreciation and amortization, the expenses relating to the Acushnet Company Equity Appreciation Rights Plan, as amended (the “EAR Plan”), share-based compensation expense, a one-time executive bonus, restructuring charges, certain transaction fees, indemnification expense (income) from our former owner Beam Suntory, Inc. (formerly known as Fortune Brands, Inc.) (“Beam”), gains (losses) on the fair value of our common stock warrants, certain other non-cash (gains) losses, net and the net income relating to non-controlling interests in our FootJoy golf shoe joint venture. We define Adjusted EBITDA in a manner consistent with the term “Consolidated EBITDA” as it is defined in our credit agreement. Consolidated EBITDA is used in our credit agreement at the Acushnet Company level for purposes of certain material terms, including (i) determining the applicable margin used to determine the interest rate per annum of outstanding borrowings and commitment fees for revolving commitments, (ii) calculating certain financial ratios used in financial maintenance covenants that require compliance on a quarterly basis, (iii) determining our ability to incur additional term loans or increases to our new revolving credit facility and (iv) determining the availability of certain baskets and the ability to enter into certain transactions.
We present Adjusted EBITDA as a supplemental measure because it excludes the impact of certain items that (i) we do not consider indicative of our ongoing operating performance, (ii) that relate to our acquisition of Acushnet Company, our operating subsidiary, from Beam on July 29, 2011 (the “Acquisition”) or (iii) that relate to our historical capital structure that are no longer relevant after the closing of our initial public offering. Management uses Adjusted EBITDA to evaluate the

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effectiveness of our business strategies, assess our consolidated operating performance and make decisions regarding pricing of our products, go to market execution and costs to incur across our business. Adjusted EBITDA is also used as a financial performance measure for purposes of determining the vesting of equity awards that were granted under our Acushnet Holdings Corp. 2015 Omnibus Incentive Plan.
We believe Adjusted EBITDA provides useful information to investors regarding our consolidated operating performance. By presenting Adjusted EBITDA, we provide a basis for comparison of our business operations between different periods by excluding items that we do not believe are indicative of our core operating performance.
Adjusted EBITDA is not a measurement of financial performance under GAAP. It should not be considered an alternative to net income attributable to Acushnet Holdings Corp. as a measure of our operating performance or any other measure of performance derived in accordance with GAAP. In addition, Adjusted EBITDA should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items, or affected by similar non-recurring items. Adjusted EBITDA has limitations as an analytical tool, and you should not consider such measure either in isolation or as a substitute for analyzing our results as reported under GAAP. Our definition and calculation of Adjusted EBITDA is not necessarily comparable to other similarly titled measures used by other companies due to different methods of calculation.
The following table presents reconciliations of net income (loss) attributable to Acushnet Holdings Corp. to Adjusted EBITDA for the periods presented (dollars in thousands):

 	 	Three months ended	 	 	Nine months ended	 	
 	 	September 30, 	 	 	September 30, 	 	
 	    	2017	    	2016	 	    	2017	 	2016	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income (loss) attributable to Acushnet Holdings Corp.	 	$	9,318	 	$	(5,526)	 	$	80,448	 	$	45,191	 	
Income tax expense	 	 	3,488	 	 	785	 	 	44,180	 	 	39,495	 	
Interest expense, net	 	 	4,040	 	 	15,672	 	 	11,863	 	 	44,076	 	
Depreciation and amortization	 	 	10,214	 	 	10,003	 	 	30,667	 	 	30,553	 	
EAR Plan(a)	 	 	 —	 	 	(940)	 	 	 —	 	 	(940)	 	
Shared-based compensation(b)	 	 	3,674	 	 	6,159	 	 	11,576	 	 	7,123	 	
One-time executive bonus(c)	 	 	 —	 	 	 —	 	 	 —	 	 	7,500	 	
Restructuring charges(d)	 	 	 —	 	 	174	 	 	 —	 	 	816	 	
Transaction fees(e)	 	 	 —	 	 	2,947	 	 	146	 	 	11,912	 	
Beam indemnification expense (income)(f)	 	 	145	 	 	(2,156)	 	 	342	 	 	(2,641)	 	
Losses on the fair value of our common stock warrants(g)	 	 	 —	 	 	 —	 	 	 —	 	 	6,112	 	
Other non-cash gains, net	 	 	(17)	 	 	(236)	 	 	(613)	 	 	(531)	 	
Nonrecurring  income(h)	 	 	 —	 	 	 —	 	 	 —	 	 	(1,467)	 	
Net income attributable to noncontrolling interests(i)	 	 	1,316	 	 	1,124	 	 	3,854	 	 	3,077	 	
Adjusted EBITDA	 	$	32,178	 	$	28,006	 	$	182,463	 	$	190,276	 	
Adjusted EBITDA margin	 	 	
9.3%	 	 	
8.3%	 	 	
15.1%	 	 	
15.3%	 	

	(a)		Reflects expenses related to the Equity Appreciation Rights (“EARs”) granted under our EAR Plan and the remeasurement of the liability at each reporting period based on the then-current projection of our common stock equivalent value (as defined in the EAR Plan). See “—Critical Accounting Policies and Estimates—Share-Based Compensation” in our Annual Report on Form 10-K for the year ended December 31, 2016.  The EAR Plan expired on December 31, 2016.	

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	(b)		Reflects compensation expense with respect to equity-based grants under the Acushnet Holdings Corp. 2015 Omnibus Incentive Plan.	
	(c)		In the first quarter of 2016, our President and Chief Executive Officer was awarded a cash bonus in the amount of $7.5 million as consideration for past performance.	
	(d)		Reflects restructuring charges incurred in connection with the reorganization of certain of our operations in 2016.	
	(e)		For the nine months ended September 30, 2017, reflects legal fees incurred relating to a dispute arising from the indemnification obligations owed to us by Beam in connection with the Acquisition.  For the three and nine months ended September 30, 2016, reflects certain fees and expenses we incurred in connection with our initial public offering as well as legal fees incurred relating to a dispute arising from the indemnification obligations owed to us by Beam in connection with the Acquisition.	
	(f)		Reflects the non-cash charges related to the indemnification obligations owed to us by Beam that are included when calculating net income (loss) attributable to the Company.	
	(g)		Fila Korea exercised all of our outstanding common stock warrants in July 2016 and we used the proceeds from such exercise to redeem all of our outstanding 7.5% bonds due 2021.	
	(h)		Reflects legal judgment in favor of us associated with the Beam value-added tax dispute in other (income) expense.	
	(i)		Reflects the net income attributable to the interest that we do not own in our FootJoy golf shoe joint venture.	
A reconciliation of non-GAAP Adjusted EBITDA, as forecasted for 2017, to the closest corresponding GAAP measure, net income (loss), is not available without unreasonable efforts on a forward-looking basis due to the high variability and low visibility of certain charges that may impact our GAAP results on a forward-looking basis, such as the measures and effects of share- based compensation and adjustments related to the indemnification obligations owed to us by Beam.

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