ACUSHNET HOLDINGS CORP., 10-Q filed on 8/5/2021
Quarterly Report
v3.21.2
Cover Page - shares
6 Months Ended
Jun. 30, 2021
Jul. 30, 2021
Cover [Abstract]    
Document Type 10-Q  
Document Quarterly Report true  
Document Period End Date Jun. 30, 2021  
Document Transition Report false  
Entity File Number 001-37935  
Entity Registrant Name Acushnet Holdings Corp.  
Entity Incorporation, State or Country Code DE  
Entity Tax Identification Number 45-2644353  
Entity Address, Address Line One 333 Bridge Street  
Entity Address, City or Town Fairhaven,  
Entity Address, State or Province MA  
Entity Address, Postal Zip Code 02719  
City Area Code 800  
Local Phone Number 225-8500  
Title of 12(b) Security Common Stock - $0.001 par value per share  
Trading Symbol GOLF  
Security Exchange Name NYSE  
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
Entity Filer Category Large Accelerated Filer  
Entity Small Business false  
Entity Emerging Growth Company false  
Entity Shell Company false  
Entity Common Stock, Shares Outstanding   73,905,679
Entity Central Index Key 0001672013  
Amendment Flag false  
Current Fiscal Year End Date --12-31  
Document Fiscal Year Focus 2021  
Document Fiscal Period Focus Q2  
v3.21.2
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($)
$ in Thousands
Jun. 30, 2021
Dec. 31, 2020
Current assets    
Cash, cash equivalents and restricted cash ($11,600 and $6,843 attributable to the variable interest entity ("VIE")) $ 253,251 $ 151,452
Accounts receivable, net 377,922 201,518
Inventories ($10,123 and $13,830 attributable to the VIE) 300,324 357,682
Prepaid and other assets 102,063 89,155
Total current assets 1,033,560 799,807
Property, plant and equipment, net ($10,392 and $10,538 attributable to the VIE) 219,379 222,811
Goodwill ($32,312 and $32,312 attributable to the VIE) 213,541 215,186
Intangible assets, net 469,438 473,533
Deferred income taxes 56,649 80,060
Other assets ($2,196 and $2,239 attributable to the VIE) 74,125 75,158
Total assets 2,066,692 1,866,555
Current liabilities    
Short-term debt 21,485 2,810
Current portion of long-term debt 17,500 17,500
Accounts payable ($8,966 and $8,702 attributable to the VIE) 126,644 112,867
Accrued taxes 59,179 40,952
Accrued compensation and benefits ($1,011 and $1,454 attributable to the VIE) 78,669 82,290
Accrued expenses and other liabilities ($3,615 and $3,699 attributable to the VIE) 119,336 101,260
Total current liabilities 422,813 357,679
Long-term debt 305,346 313,619
Deferred income taxes 3,751 3,821
Accrued pension and other postretirement benefits 122,651 121,929
Other noncurrent liabilities ($2,282 and $2,261 attributable to the VIE) 50,558 52,128
Total liabilities 905,119 849,176
Commitments and contingencies (Note 15)
Redeemable noncontrolling interest 1,521 126
Shareholders' equity    
Common stock, $0.001 par value, 500,000,000 shares authorized; 75,855,036 and 75,666,367 shares issued 76 76
Additional paid-in capital 934,919 925,385
Accumulated other comprehensive loss, net of tax (96,245) (96,182)
Retained earnings 338,633 199,776
Treasury stock, at cost; 1,871,857 and 1,671,754 shares (including 299,894 of accrued share repurchases as of December 31, 2020) (Note 10) (54,213) (45,106)
Total equity attributable to Acushnet Holdings Corp. 1,123,170 983,949
Noncontrolling interests 36,882 33,304
Total shareholders' equity 1,160,052 1,017,253
Total liabilities, redeemable noncontrolling interest and shareholders' equity $ 2,066,692 $ 1,866,555
v3.21.2
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Parenthetical) - USD ($)
$ in Thousands
Jun. 30, 2021
Dec. 31, 2020
Cash and restricted cash $ 253,251 $ 151,452
Inventories 300,324 357,682
Property, plant and equipment, net 219,379 222,811
Goodwill 213,541 215,186
Other assets 74,125 75,158
Accounts payable 126,644 112,867
Accrued compensation and benefits 78,669 82,290
Accrued expenses and other liabilities 119,336 101,260
Other noncurrent liabilities $ 50,558 $ 52,128
Common stock, par value (in dollars per share) $ 0.001 $ 0.001
Common stock, shares authorized (in shares) 500,000,000 500,000,000
Common stock, shares issued (in shares) 75,855,036 75,666,367
Treasury stock, at cost (in shares) 1,871,857 1,671,754
Accrued share repurchase (in shares)   299,894
VIE    
Cash and restricted cash $ 11,600 $ 6,843
Inventories 10,123 13,830
Property, plant and equipment, net 10,392 10,538
Goodwill 32,312 32,312
Other assets 2,196 2,239
Accounts payable 8,966 8,702
Accrued compensation and benefits 1,011 1,454
Accrued expenses and other liabilities 3,615 3,699
Other noncurrent liabilities $ 2,282 $ 2,261
v3.21.2
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($)
$ in Thousands
3 Months Ended 6 Months Ended
Jun. 30, 2021
Jun. 30, 2020
Jun. 30, 2021
Jun. 30, 2020
Income Statement [Abstract]        
Net sales $ 624,850 $ 300,002 $ 1,205,735 $ 708,743
Cost of goods sold 290,424 143,545 560,570 351,331
Gross profit 334,426 156,457 645,165 357,412
Operating expenses:        
Selling, general and administrative 210,255 130,535 386,624 283,258
Research and development 13,021 11,132 25,350 24,352
Intangible amortization 1,970 1,955 3,942 3,911
Restructuring charges 0 1,104 0 12,732
Income from operations 109,180 11,731 229,249 33,159
Interest expense, net 1,848 4,402 5,464 8,525
Other expense, net 239 4,174 2,231 4,864
Income before income taxes 107,093 3,155 221,554 19,770
Income tax expense (benefit) 24,573 (598) 52,407 7,042
Net income 82,520 3,753 169,147 12,728
Less: Net income attributable to noncontrolling interests (1,435) (1,440) (3,104) (1,538)
Net income attributable to Acushnet Holdings Corp. $ 81,085 $ 2,313 $ 166,043 $ 11,190
Net income per common share attributable to Acushnet Holdings Corp.:        
Basic (in dollars per share) $ 1.09 $ 0.03 $ 2.22 $ 0.15
Diluted (in dollars per share) $ 1.08 $ 0.03 $ 2.21 $ 0.15
Weighted average number of common shares:        
Basic (in shares) 74,661,356 74,252,981 74,719,450 74,394,967
Diluted (in shares) 75,200,906 74,875,219 75,227,787 74,983,411
v3.21.2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) - USD ($)
$ in Thousands
3 Months Ended 6 Months Ended
Jun. 30, 2021
Jun. 30, 2020
Jun. 30, 2021
Jun. 30, 2020
Statement of Comprehensive Income [Abstract]        
Net income $ 82,520 $ 3,753 $ 169,147 $ 12,728
Other comprehensive income:        
Foreign currency translation adjustments (962) 18,043 (8,042) (4,740)
Cash flow derivative instruments:        
Unrealized holding gains (losses) arising during period 677 (5,794) 5,044 1,608
Reclassification adjustments included in net income 2,520 881 3,083 (843)
Tax (expense) benefit (917) 1,663 (2,581) (185)
Cash flow derivative instruments, net 2,280 (3,250) 5,546 580
Pension and other postretirement benefits:        
Pension and other postretirement benefits adjustments 781 4,376 3,356 6,066
Tax expense (184) (1,083) (923) (1,451)
Pension and other postretirement benefits adjustments, net 597 3,293 2,433 4,615
Total other comprehensive income (loss) 1,915 18,086 (63) 455
Comprehensive income 84,435 21,839 169,084 13,183
Less: Comprehensive income attributable to noncontrolling interests (1,467) (1,537) (2,996) (1,655)
Comprehensive income attributable to Acushnet Holdings Corp. $ 82,968 $ 20,302 $ 166,088 $ 11,528
v3.21.2
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($)
$ in Thousands
6 Months Ended
Jun. 30, 2021
Jun. 30, 2020
Cash flows from operating activities    
Net income $ 169,147 $ 12,728
Adjustments to reconcile net income to cash flows provided by (used in) operating activities    
Depreciation and amortization 20,638 20,571
Unrealized foreign exchange (gains) losses (3,824) 2,184
Amortization of debt issuance costs 1,131 425
Share-based compensation 13,810 6,403
Loss (gain) on disposals of property, plant and equipment 127 (53)
Deferred income taxes 19,121 (4,244)
Changes in operating assets and liabilities    
Accounts receivable (180,474) (56,640)
Inventories 54,744 30,066
Accounts payable 13,925 (23,187)
Accrued taxes 19,776 (1,626)
Other assets and liabilities 24,290 12,534
Cash flows provided by (used in) operating activities 152,411 (839)
Cash flows from investing activities    
Additions to property, plant and equipment (12,401) (10,355)
Cash flows used in investing activities (12,401) (10,355)
Cash flows from financing activities    
Proceeds from short-term borrowings, net 18,543 127,616
Repayments of term loan facility (8,750) (8,750)
Purchases of common stock (17,885) (6,976)
Debt issuance costs 0 (14)
Dividends paid on common stock (24,872) (23,034)
Dividends paid to noncontrolling interests (111) 0
Payment of employee restricted stock tax withholdings (3,946) (496)
Cash flows (used in) provided by financing activities (37,021) 88,346
Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash (1,190) (307)
Net increase in cash, cash equivalents and restricted cash 101,799 76,845
Cash, cash equivalents and restricted cash, beginning of year 151,452 34,184
Cash, cash equivalents and restricted cash, end of period 253,251 111,029
Supplemental information    
Non-cash additions to property, plant and equipment 2,782 1,014
Non-cash additions to right-of-use assets obtained in exchange for operating lease obligations 6,302 3,237
Non-cash additions to right-of-use assets obtained in exchange for finance lease obligations 150 427
Dividend equivalents rights ("DERs") declared not paid 1,031 477
Share repurchase liability (Note 10) $ 0 $ 6,976
v3.21.2
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (UNAUDITED) - USD ($)
shares in Thousands, $ in Thousands
Total
Total Shareholders' Equity Attributable to Acushnet Holdings Corp.
Common Stock
Additional Paid-in Capital
Accumulated Other Comprehensive Loss, Net of Tax
Retained Earnings
Treasury Stock
Noncontrolling Interests
Beginning balance (in shares) at Dec. 31, 2019     75,620          
Beginning balance at Dec. 31, 2019 $ 950,826 $ 918,440 $ 76 $ 910,507 $ (112,028) $ 151,039 $ (31,154) $ 32,386
Changes in stockholders' equity                
Dividends and dividend equivalents declared (11,735)              
Ending balance (in shares) at Mar. 31, 2020     75,649          
Ending balance at Mar. 31, 2020 918,564 885,654 $ 76 912,162 (129,659) 148,181 (45,106) 32,910
Beginning balance (in shares) at Dec. 31, 2019     75,620          
Beginning balance at Dec. 31, 2019 950,826 918,440 $ 76 910,507 (112,028) 151,039 (31,154) 32,386
Changes in stockholders' equity                
Net income 13,548 11,190       11,190   2,358
Other comprehensive income (loss) 455 455     455      
Share-based compensation 6,075 6,075   6,075        
Vesting of restricted common stock, including impact of DERs, net of shares withheld for employee taxes (Note 11) (in shares)     36          
Vesting of restricted common stock, including impact of DERs, net of shares withheld for employee taxes (Note 11) (485) (485)   (485)        
Purchases of common stock (Note 10) (6,976) (6,976)         (6,976)  
Share repurchase liability (Note 10) (6,976) (6,976)         (6,976)  
Dividends and dividend equivalents declared (23,496) (23,496)       (23,496)    
Ending balance (in shares) at Jun. 30, 2020     75,656          
Ending balance at Jun. 30, 2020 932,971 898,227 $ 76 916,097 (111,573) 138,733 (45,106) 34,744
Beginning balance (in shares) at Dec. 31, 2019     75,620          
Beginning balance at Dec. 31, 2019 950,826 918,440 $ 76 910,507 (112,028) 151,039 (31,154) 32,386
Changes in stockholders' equity                
Dividends and dividend equivalents declared (47,269)              
Ending balance (in shares) at Dec. 31, 2020     75,666          
Ending balance at Dec. 31, 2020 1,017,253 983,949 $ 76 925,385 (96,182) 199,776 (45,106) 33,304
Beginning balance (in shares) at Mar. 31, 2020     75,649          
Beginning balance at Mar. 31, 2020 918,564 885,654 $ 76 912,162 (129,659) 148,181 (45,106) 32,910
Changes in stockholders' equity                
Net income 4,147 2,313       2,313   1,834
Other comprehensive income (loss) 18,086 18,086     18,086      
Share-based compensation 4,052 4,052   4,052        
Vesting of restricted common stock, including impact of DERs, net of shares withheld for employee taxes (Note 11) (in shares)     7          
Vesting of restricted common stock, including impact of DERs, net of shares withheld for employee taxes (Note 11) (117) (117)   (117)        
Dividends and dividend equivalents declared (11,761) (11,761)       (11,761)    
Ending balance (in shares) at Jun. 30, 2020     75,656          
Ending balance at Jun. 30, 2020 932,971 898,227 $ 76 916,097 (111,573) 138,733 (45,106) 34,744
Beginning balance (in shares) at Dec. 31, 2020     75,666          
Beginning balance at Dec. 31, 2020 1,017,253 983,949 $ 76 925,385 (96,182) 199,776 (45,106) 33,304
Changes in stockholders' equity                
Dividends and dividend equivalents declared (12,767)              
Ending balance (in shares) at Mar. 31, 2021     75,847          
Ending balance at Mar. 31, 2021 1,085,980 1,050,862 $ 76 926,809 (98,160) 271,967 (49,830) 35,118
Beginning balance (in shares) at Dec. 31, 2020     75,666          
Beginning balance at Dec. 31, 2020 1,017,253 983,949 $ 76 925,385 (96,182) 199,776 (45,106) 33,304
Changes in stockholders' equity                
Net income 169,732 166,043       166,043   3,689
Other comprehensive income (loss) (63) (63)     (63)      
Share-based compensation 13,479 13,479   13,479        
Vesting of restricted common stock, including impact of DERs, net of shares withheld for employee taxes (Note 11) (in shares)     189          
Vesting of restricted common stock, including impact of DERs, net of shares withheld for employee taxes (Note 11) (3,945) (3,945)   (3,945)        
Purchases of common stock (Note 10) (9,107) (9,107)         (9,107)  
Share repurchase liability (Note 10) 0              
Dividends and dividend equivalents declared (25,535) (25,535)       (25,535)    
Dividends declared to noncontrolling interests (111)             (111)
Redemption value adjustment (Note 1) (1,651) (1,651)       (1,651)    
Ending balance (in shares) at Jun. 30, 2021     75,855          
Ending balance at Jun. 30, 2021 1,160,052 1,123,170 $ 76 934,919 (96,245) 338,633 (54,213) 36,882
Beginning balance (in shares) at Mar. 31, 2021     75,847          
Beginning balance at Mar. 31, 2021 1,085,980 1,050,862 $ 76 926,809 (98,160) 271,967 (49,830) 35,118
Changes in stockholders' equity                
Net income 82,912 81,085       81,085   1,827
Other comprehensive income (loss) 1,915 1,915     1,915      
Share-based compensation 8,110 8,110   8,110        
Vesting of restricted common stock, including impact of DERs, net of shares withheld for employee taxes (Note 11) (in shares)     8          
Vesting of restricted common stock, including impact of DERs, net of shares withheld for employee taxes (Note 11) 0              
Purchases of common stock (Note 10) (4,383) (4,383)         (4,383)  
Dividends and dividend equivalents declared (12,768) (12,768)       (12,768)    
Dividends declared to noncontrolling interests (63)             (63)
Redemption value adjustment (Note 1) (1,651) (1,651)       (1,651)    
Ending balance (in shares) at Jun. 30, 2021     75,855          
Ending balance at Jun. 30, 2021 $ 1,160,052 $ 1,123,170 $ 76 $ 934,919 $ (96,245) $ 338,633 $ (54,213) $ 36,882
v3.21.2
Summary of Significant Accounting Policies
6 Months Ended
Jun. 30, 2021
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 and six months ended June 30, 2021 are not necessarily indicative of results to be expected for the full year ending December 31, 2021, nor were those of the comparable 2020 period representative of those actually experienced for the full year ended December 31, 2020. 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, 2020 included in its Annual Report on Form 10-K filed with the SEC on February 25, 2021.
Risks and Uncertainties
In March 2020, the World Health Organization declared a pandemic related to the novel coronavirus (“COVID-19”), which led to government-ordered shutdowns of non-essential businesses, travel restrictions and restrictions on public gatherings. As restrictions were eased, the game of golf experienced a surge in rounds of play around the world, which resulted in increased demand for the Company's products. The Company quickly began to experience demand pressures across all brands and product categories, which challenged, and continue to challenge, our supply chain and our ability to service our trade partners and golfers.
While government-ordered shutdowns and restrictions have eased in most regions and mass vaccination programs are underway, the emergence of virus variants and resurgences of positive cases has led to a return to tighter restrictions in some regions and could prompt tighter restrictions in other regions which could further disrupt the Company's supply chain. Although the Company has seen increased rounds of play and demand for golf-related products, over the course of the pandemic, this could change as mass vaccination programs continue to advance and restrictions are further eased on other activities.
The Company has evaluated and continues to evaluate the potential impact of the COVID-19 pandemic on its consolidated financial statements. The impact of the COVID-19 pandemic continues to evolve, and both the full impact and duration of the COVID-19 pandemic remain highly uncertain. Accordingly, the Company's business, results of operations, financial position and cash flows could be materially impacted in ways that the Company cannot currently predict.
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 related to the impact of the COVID-19 pandemic 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 June 30, 2021 and December 31, 2020. 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. The financial results and position of noncontrolling interests are included in the Company’s unaudited condensed consolidated financial statements. The value attributable to the noncontrolling interests is presented on the unaudited condensed consolidated balance sheets, separately from the equity attributable to the Company. 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, respectively.
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 Company initially recorded the redeemable noncontrolling interest at its acquisition date fair value. The carrying amount of the redeemable noncontrolling interest is subsequently adjusted to the greater amount of either the initial carrying amount, increased or decreased for the redeemable noncontrolling interest's share of net income (loss) or the redemption value, assuming the noncontrolling interest is redeemable at the balance sheet date. During the three and six months ended June 30, 2021, the Company recorded a $1.7 million redemption value adjustment. This adjustment was recognized through retained earnings and was not reflected in net income (loss) or comprehensive income (loss). 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 sheets was $4.4 million as of both June 30, 2021 and December 31, 2020.
Cash, Cash Equivalents and Restricted Cash
Cash held in Company checking accounts is included in cash. Cash equivalents consist of short-term highly liquid investments with original maturities of three months or less which are readily convertible into cash. The Company classifies as restricted certain cash that is not available for use in its operations. As of both June 30, 2021 and December 31, 2020, the amount of restricted cash included in cash, cash equivalents and restricted cash on the unaudited condensed consolidated balance sheets was $2.0 million.
Foreign Currency Translation and Transactions
Foreign currency transaction gains (losses) included in selling, general and administrative expense were losses of $0.2 million and gains of $2.6 million for the three months ended June 30, 2021 and 2020, respectively. Foreign currency transaction gains (losses) included in selling, general and administrative expense were losses of $1.2 million and gains of $1.6 million for the six months ended June 30, 2021 and 2020, respectively.
Recently Adopted Accounting Standards
Income Taxes
On January 1, 2021, the Company adopted Accounting Standards Update ("ASU") 2019-12, "Income Taxes (Topic 740) - Simplifying the Accounting for Income Taxes" ("ASU 2019-12"). The amendments in this update simplified the accounting for income taxes by removing certain exceptions to general principles in Topic 740. The amendments also improved consistent application and simplified U.S. GAAP for other areas of Topic 740 by clarifying and amending existing guidance. The adoption of this standard did not have a material impact on the consolidated financial statements.
v3.21.2
Accounts Receivable
6 Months Ended
Jun. 30, 2021
Receivables [Abstract]  
Accounts Receivable Accounts Receivable
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 (including the impact of the COVID-19 pandemic) which could affect the collectability of the reported amounts. All of these factors have been considered in the estimate of expected credit losses.
The activity related to the allowance for doubtful accounts for the periods presented was as follows:
Three months ended June 30,Six months ended June 30,
(in thousands)2021202020212020
Balance at beginning of period$7,077 $5,782 $7,698 $5,338 
Bad debt expense (recovery) 143 1,792 (302)2,708 
Amount of receivables recovered (written off)100 12 (44)(274)
Foreign currency translation and other14 157 (18)(29)
Balance at end of period$7,334 $7,743 $7,334 $7,743 
v3.21.2
Inventories
6 Months Ended
Jun. 30, 2021
Inventory Disclosure [Abstract]  
Inventories Inventories
The components of inventories were as follows: 
June 30,December 31,
(in thousands)20212020
Raw materials and supplies$82,146 $74,302 
Work-in-process23,915 22,913 
Finished goods194,263 260,467 
Inventories$300,324 $357,682 
v3.21.2
Product Warranty
6 Months Ended
Jun. 30, 2021
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:
 Three months ended June 30,Six months ended June 30,
(in thousands)2021202020212020
Balance at beginning of period$3,899 $4,149 $3,831 $4,048 
Provision1,656 121 2,685 1,330 
Claims paid/costs incurred(1,229)(786)(2,147)(1,730)
Foreign currency translation and other110 (36)(54)
Balance at end of period$4,333 $3,594 $4,333 $3,594 
v3.21.2
Debt and Financing Arrangements
6 Months Ended
Jun. 30, 2021
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 $21.5 million as of June 30, 2021. The weighted average interest rate applicable to these outstanding borrowings was 1.12% as of June 30, 2021. There were no outstanding borrowings under the revolving credit facility as of December 31, 2020. As of June 30, 2021, the Company had available borrowings under its revolving credit facility of $366.6 million after giving effect to $11.9 million of outstanding letters of credit.
On July 3, 2020, the Company amended its credit agreement dated December 23, 2019 (the “First Amendment”) to, among other things, modify the maximum net average total leverage ratio, the interest rate margins, commitment fee and covenant baskets for each of the fiscal quarters ending after June 30, 2020 and on or before September 30, 2021 (the “Covenant Relief Period”). On March 5, 2021, the Company issued a notice exercising its right to an early termination of the Covenant Relief Period and as such is now required to comply with the previous maximum net average total leverage ratio, and the interest rate margins, commitment fee and covenant baskets reverted to the levels in effect prior to the First Amendment as discussed below. During the six months ended June 30, 2021, the Company recorded additional interest expense of approximately $0.7 million related to the acceleration of unamortized debt issuance costs in connection with terminating the Covenant Relief Period, none of which was recorded during the three months ended June 30, 2021.
Borrowings under the credit facility bear interest at a rate per annum equal to, at the applicable Borrower’s option, either (a) a base rate determined by reference to the highest of (1) the prime rate of Wells Fargo, (2) the federal funds effective rate plus 0.50% and (3) a Eurodollar Rate, subject to certain adjustments, plus 1.00% or (b) a Eurodollar Rate (or, in the case of Canadian borrowings, a Canadian Dollar Offered Rate), subject to certain adjustments, in each case, plus an applicable margin. Under the credit agreement, the applicable margin is 0% to 0.75% for base rate borrowings and 1.00% to 1.75% for Eurodollar rate or Canadian Dollar Offered Rate borrowings, in each case, depending on the Net Average Total Leverage Ratio (as defined in the credit agreement). In addition, the Company is required to pay a commitment fee on any unutilized commitments under the revolving credit facility. The commitment fee rate payable in respect of unused portions of the revolving credit facility is 0.15% to 0.30% per annum, depending on the Net Average Total Leverage Ratio. The maximum net average total leverage ratio under the credit facility is 3.50 to 1.00, which is subject to increase to 3.75 to 1.00 in connection with certain acquisitions, and the minimum consolidated interest coverage ratio (as defined in the credit agreement) is 3.00 to 1.00.
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 also 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 June 30, 2021, the Company was in compliance with all covenants under the credit agreement.
Other Short-Term Borrowings
The Company has certain unsecured local credit facilities available through its subsidiaries. There were no outstanding borrowings under the Company's local credit facilities as of June 30, 2021. There were outstanding borrowings under the Company's local credit facilities of $2.8 million as of December 31, 2020. The weighted average interest rate applicable to the outstanding borrowings was 2.00% as of December 31, 2020. As of June 30, 2021, the Company had available borrowings remaining under these local credit facilities of $58.5 million.
Letters of Credit
As of June 30, 2021 and December 31, 2020, there were outstanding letters of credit related to agreements, including the Company's credit facility, totaling $15.6 million and $11.7 million, respectively, of which $12.4 million and $8.3 million, respectively, was secured. These agreements provided a maximum commitment for letters of credit of $57.5 million as of June 30, 2021.
v3.21.2
Derivative Financial Instruments
6 Months Ended
Jun. 30, 2021
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative Financial Instruments Derivative Financial InstrumentsThe 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 June 30, 2021 and December 31, 2020 was $203.7 million and $248.1 million, respectively.
As a result of the impact of the COVID-19 pandemic, during the six months ended June 30, 2020, the Company de-designated certain foreign exchange cash flow hedges deemed ineffective, none of which were outstanding as of June 30, 2021 or December 31, 2020.
The Company also enters into foreign exchange forward contracts, which do not qualify as hedging instruments, 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 June 30, 2021 and December 31, 2020.
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. Interest rate swap contracts are accounted for as cash flow hedges. As of June 30, 2021, there were no interest rate swap contracts outstanding. As of December 31, 2020, the notional value of the Company's outstanding interest rate swap contracts was $140.0 million.
Impact on Financial Statements
The fair value of hedge instruments recognized on the unaudited condensed consolidated balance sheets was as follows:
(in thousands)June 30,December 31,
Balance Sheet LocationHedge Instrument Type20212020
Prepaid and other assetsForeign exchange forward$3,720 $1,166 
Other assetsForeign exchange forward1,569 30 
Accrued expenses and other liabilitiesForeign exchange forward2,332 6,400 
Interest rate swap— 1,571 
Other noncurrent liabilitiesForeign exchange forward— 985 

The hedge instrument gain (loss) recognized in accumulated other comprehensive loss, net of tax was as follows:
 Three months endedSix months ended
 June 30,June 30,
(in thousands)2021202020212020
Type of hedge    
Foreign exchange forward$676 $(5,637)$5,052 $3,830 
Interest rate swap (157)(8)(2,222)
 Total$677 $(5,794)$5,044 $1,608 
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 statements 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 loss of $1.2 million related to foreign exchange derivative instruments from accumulated other comprehensive loss, net of tax, into cost of goods sold. For further information related to amounts recognized in accumulated other comprehensive loss, net of tax, see Note 12.
The hedge instrument gain (loss) recognized on the unaudited condensed consolidated statements of operations was as follows:
 Three months endedSix months ended
 June 30,June 30,
(in thousands)2021202020212020
Location of gain (loss) in statement of operations    
Foreign exchange forward:
Cost of goods sold$(1,910)$232 $(1,514)$1,774 
Selling, general and administrative (1)(2)
(7)(2,063)633 (529)
Total $(1,917)$(1,831)$(881)$1,245 
Interest Rate Swap:
Interest expense, net$(610)$(902)$(1,569)$(1,380)
Total$(610)$(902)$(1,569)$(1,380)
_______________________________________________________________________________
(1)    Relates to net gains (losses) on foreign exchange forward contracts derived from previously designated cash flow hedges.
(2)    Selling, general and administrative expense excludes net losses of $0.2 million and net gains of $0.4 million reclassified out of accumulated other comprehensive loss, net of tax related to hedges deemed ineffective for the three and six months ended June 30, 2020, respectively.
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.
v3.21.2
Fair Value Measurements
6 Months Ended
Jun. 30, 2021
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 June 30, 2021 were as follows:
 Fair Value Measurements as of 
 June 30, 2021 using: 
(in thousands)Level 1Level 2Level 3Balance Sheet Location
Assets    
Rabbi trust$5,188 $— $— Prepaid and other assets
Foreign exchange derivative instruments— 3,720 — Prepaid and other assets
Deferred compensation program assets827 — — Other assets
Foreign exchange derivative instruments— 1,569 — Other assets
Total assets$6,015 $5,289 $—  
Liabilities    
Foreign exchange derivative instruments$— $2,332 $— Accrued expenses and other liabilities
Deferred compensation program liabilities827 — — Other noncurrent liabilities
Total liabilities$827 $2,332 $—  
Assets and liabilities measured at fair value on a recurring basis as of December 31, 2020 were as follows:
 Fair Value Measurements as of 
 December 31, 2020 using: 
(in thousands)Level 1Level 2Level 3Balance Sheet Location
Assets    
Rabbi trust$5,160 $— $— Prepaid and other assets
Foreign exchange derivative instruments— 1,166 — Prepaid and other assets
Deferred compensation program assets802 — — Other assets
Foreign exchange derivative instruments— 30 — Other assets
Total assets$5,962 $1,196 $—  
Liabilities    
Foreign exchange derivative instruments$— $6,400 $— Accrued expenses and other liabilities
Interest rate derivative instruments— 1,571 — Accrued expenses and other liabilities
Deferred compensation program liabilities802 — — Other noncurrent liabilities
Foreign exchange derivative instruments— 985 — Other noncurrent liabilities
Total liabilities$802 $8,956 $—  
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 6). 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 reduce interest rate risk related to the Company's floating rate debt (Note 6). Prior to maturing in May 2021, the valuation for the interest rate swap contracts was 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 were used to create the forward curve for floating legs and discount curve.
v3.21.2
Pension and Other Postretirement Benefits
6 Months Ended
Jun. 30, 2021
Retirement Benefits [Abstract]  
Pension and Other Postretirement Benefits Pension and Other Postretirement Benefits
Components of net periodic benefit cost (income) were as follows: 
 Pension BenefitsPostretirement Benefits
 Three months ended June 30,
(in thousands)2021202020212020
Components of net periodic benefit cost (income)    
Service cost$1,992 $2,462 $173 $129 
Interest cost2,194 2,538 76 104 
Expected return on plan assets(2,399)(2,902)— — 
Settlement expense118 3,850 — — 
Amortization of net loss (gain)695 1,343 (95)(270)
Amortization of prior service cost (credit)70 69 (34)(34)
Net periodic benefit cost (income)$2,670 $7,360 $120 $(71)
Components of net periodic benefit cost (income) were as follows: 
 Pension BenefitsPostretirement Benefits
 Six months ended June 30,
(in thousands)2021202020212020
Components of net periodic benefit cost (income)    
Service cost$4,127 $4,778 $335 $300 
Interest cost4,145 5,050 151 216 
Expected return on plan assets(4,946)(5,805)— — 
Settlement expense1,537 3,850 — — 
Amortization of net loss (gain)2,116 2,307 (160)(484)
Amortization of prior service cost (credit)141 139 (68)(68)
Net periodic benefit cost (income)$7,120 $10,319 $258 $(36)
The non-service cost components of net periodic benefit cost (income) are included in other expense, net in the unaudited condensed consolidated statements of operations.
v3.21.2
Income Taxes
6 Months Ended
Jun. 30, 2021
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
Income tax expense increased by $25.2 million to $24.6 million for the three months ended June 30, 2021 compared to an income tax benefit of $0.6 million for the three months ended June 30, 2020. The Company’s effective tax rate ("ETR") was 22.9% for the three months ended June 30, 2021 compared to (19.0)% for the three months ended June 30, 2020. Income tax expense increased by $45.4 million to $52.4 million for the six months ended June 30, 2021 compared to $7.0 million for the six months ended June 30, 2020. The Company’s ETR was 23.7% for the six months ended June 30, 2021 compared to 35.6% for the six months ended June 30, 2020.
The ETR for the three and six months ended June 30, 2021 differed from the U.S. statutory tax rate primarily due to the U.S. taxation of foreign income and the geographic mix of income earned by the Company's international subsidiaries, partially offset by the impact of the U.S. deduction for foreign derived intangible income and federal and state tax credits. The ETR for the three and six months ended June 30, 2020 differed from the U.S. statutory tax rate primarily due to the U.S. taxation of foreign income and the geographic mix of income earned by the Company's international subsidiaries, as well as a discrete tax benefit related to a reduction of foreign withholding taxes.
v3.21.2
Common Stock
6 Months Ended
Jun. 30, 2021
Equity [Abstract]  
Common Stock Common Stock
Dividends
The Company declared dividends per common share, including DERs (Note 11), during the periods presented as follows:
Dividends per Common Share
Amount
(in thousands)
2021:
Second Quarter$0.165 $12,768 
First Quarter0.165 12,767 
Total dividends declared in 2021$0.330 $25,535 
2020:
Fourth Quarter$0.155 $11,983 
Third Quarter0.155 11,790 
Second Quarter0.155 11,761 
First Quarter0.155 11,735 
Total dividends declared in 2020$0.620 $47,269 
During the third quarter of 2021, the Company's Board of Directors declared a dividend of $0.165 per share of common stock to shareholders of record as of September 3, 2021 and payable on September 17, 2021.
Share Repurchase Program
As of June 30, 2021, the Board of Directors had authorized the Company to repurchase up to an aggregate of $100.0 million of its issued and outstanding common stock. In April 2020, the Company temporarily suspended stock repurchases under its share repurchase program in light of the COVID-19 pandemic. In March 2021, the Company resumed share repurchases under its share repurchase program.
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 Holdings Co., Ltd. (“Magnus”), a wholly-owned subsidiary of Fila Holdings Corp., 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.
As the Company repurchased a cumulative total of $24.9 million of common stock through open market purchases, the determination date, as defined in the Magnus share repurchase agreement, was automatically triggered on March 18, 2021. As a result, on April 2, 2021, the Company repurchased from Magnus 355,341 shares of common stock for an aggregate of $11.1 million, in completion of the Company's previously discussed share repurchase obligations. In relation to the Magnus share repurchase agreement, the Company had recorded a share repurchase liability of $8.8 million for 299,894 shares of common stock to be repurchased from Magnus related to shares repurchased in the open market from the initial determination date up through the time that the Company temporarily suspended its share repurchase program, which was included in accrued expenses and other liabilities and treasury stock on the unaudited condensed consolidated balance sheet as of December 31, 2020.
The Company's share repurchase activity was as follows:
Three months ended June 30,Six months ended June 30,
(in thousands, except share and per share amounts)2021202020212020
Shares repurchased in the open market:
Shares repurchased 88,500 — 144,656 243,894 
Average price$49.51 $— $46.73 $28.60 
Aggregate value $4,383 $— $6,760 $6,976 
Shares repurchased from Magnus:
Shares repurchased355,341 — 355,341 — 
Average price$31.31 $— $31.31 $— 
Aggregate value$11,125 $— $11,125 $— 
Total shares repurchased:
Shares repurchased443,841 — 499,997 243,894 
Average price$34.94 $— $35.77 $28.60 
Aggregate value$15,508 $— $17,885 $6,976 
As of June 30, 2021, the Company had $45.8 million remaining under the current share repurchase authorization.
v3.21.2
Equity Incentive Plans
6 Months Ended
Jun. 30, 2021
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"), performance stock units ("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 June 30, 2021, 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 determined based upon the Company's 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 June 30, 2021 and changes during the six months then ended is presented below: 
 Weighted-Weighted-
 NumberAverageNumberAverage
 of RSUsFair Value RSUsof PSUsFair Value PSUs
Outstanding as of December 31, 20201,253,173 $24.33 457,576 $24.55 
Granted309,066 45.72 145,882 45.36 
Vested (1)
(380,097)25.39 — — 
Forfeited(34,271)25.53 (2,631)25.45 
Outstanding as of June 30, 20211,147,871 $29.70 600,827 $29.60 

_______________________________________________________________________________
(1) Includes 120,178 shares of common stock related to RSUs and no shares of common stock related to PSUs that were not delivered as of June 30, 2021.
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:
Six months endedSix months ended
 June 30, 2021June 30, 2020
RSUsPSUsRSUsPSUs
Shares of common stock issued278,607 — 52,512 789 
Shares of common stock withheld by the Company as payment by employees in lieu of cash to satisfy tax withholding obligations
(89,938)— (16,973)(269)
Net shares of common stock issued188,669 — 35,539 520 
Cumulative undelivered shares of common stock405,334 — 262,568 — 
Compensation expense recorded related to RSUs and PSUs in the unaudited condensed consolidated statements of operations was as follows:
 Three months endedSix months ended
June 30,June 30,
(in thousands)2021202020212020
RSUs$3,951 $3,787 $6,310 $6,265 
PSUs4,159 265 7,169 (190)
During the three and six months ended June 30, 2020, the Company adjusted the estimate of its performance against metrics for certain PSUs downward, resulting in a reversal of previously recognized share-based compensation expense. During the three and six months ended June 30, 2021, based on updated forecast information, the Company increased the estimate of its performance against metrics for these PSUs and recognized additional cumulative share-based compensation expense in both periods.
The remaining unrecognized compensation expense related to unvested RSUs and unvested PSUs was $20.1 million and $15.9 million, respectively, as of June 30, 2021 and both are expected to be recognized over the related weighted average period of 2.1 years.
Compensation Expense
The allocation of share-based compensation expense in the unaudited condensed consolidated statements of operations was as follows:
 Three months endedSix months ended
June 30,June 30,
(in thousands)2021202020212020
Cost of goods sold$259 $403 $252 $628 
Selling, general and administrative7,527 3,575 12,908 5,289 
Research and development491 238 650 486 
Total compensation expense before income tax8,277 4,216 13,810 6,403 
Income tax benefit1,845 849 3,112 1,312 
Total compensation expense, net of income tax$6,432 $3,367 $10,698 $5,091 
v3.21.2
Accumulated Other Comprehensive Loss, Net of Tax
6 Months Ended
Jun. 30, 2021
Equity [Abstract]  
Accumulated Other Comprehensive Loss, Net of Tax Accumulated Other Comprehensive Loss, Net of Tax
Accumulated other comprehensive loss, net of tax consists of foreign currency translation adjustments, unrealized gains and losses from derivative instruments designated as cash flow hedges (Note 6) and pension and other postretirement adjustments (Note 8).
The components of and changes in accumulated other comprehensive loss, net of tax, were as follows:
 ForeignGains (Losses) onGains (Losses) onPension andAccumulated
 CurrencyForeign ExchangeInterest Rate OtherOther
 TranslationDerivativeSwap DerivativePostretirementComprehensive
(in thousands)AdjustmentsInstrumentsInstrumentsAdjustmentsLoss, Net of Tax
Balance as of December 31, 2020$(43,906)$(4,471)$(1,179)$(46,626)$(96,182)
Other comprehensive income (loss) before reclassifications(8,042)5,052 (8)(210)(3,208)
Amounts reclassified from accumulated other comprehensive loss, net of tax— 1,514 1,569 3,566 6,649 
Tax expense— (2,199)(382)(923)(3,504)
Balance as of June 30, 2021$(51,948)$(104)$— $(44,193)$(96,245)
v3.21.2
Net Income per Common Share
6 Months Ended
Jun. 30, 2021
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.:
 Three months endedSix months ended
 June 30,June 30,
(in thousands, except share and per share amounts)2021202020212020
Net income attributable to Acushnet Holdings Corp.$81,085 $2,313 $166,043 $11,190 
Weighted average number of common shares:
Basic74,661,356 74,252,981 74,719,450 74,394,967 
Diluted75,200,906 74,875,219 75,227,787 74,983,411 
Net income per common share attributable to Acushnet Holdings Corp.:
Basic$1.09 $0.03 $2.22 $0.15 
Diluted$1.08 $0.03 $2.21 $0.15 
Net income per common share attributable to Acushnet Holdings Corp. for the three and six months ended June 30, 2021 and 2020 was calculated using the treasury stock method.
The Company’s potential dilutive securities for the three and six months ended June 30, 2021 and 2020 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 and six months ended June 30, 2021 and 2020, 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:
 Three months endedSix months ended
 June 30,June 30,
 2021202020212020
RSUs— — 145,742 — 
v3.21.2
Segment Information
6 Months Ended
Jun. 30, 2021
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 and six months ended June 30, 2021 and 2020 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:
Three months ended June 30,Six months ended June 30,
(in thousands)2021202020212020
Net sales  
Titleist golf balls$202,265 $102,139 $375,902 $218,378 
Titleist golf clubs152,821 72,396 308,648 165,610 
Titleist golf gear64,975 32,369 118,095 75,894 
FootJoy golf wear164,636 68,336 324,070 198,723 
Other40,153 24,762 79,020 50,138 
Total net sales$624,850 $300,002 $1,205,735 $708,743 
Segment operating income (loss)  
Titleist golf balls$40,494 $10,048 $74,811 $13,291 
Titleist golf clubs29,379 (2,361)71,178 2,142 
Titleist golf gear12,399 4,659 22,127 13,524 
FootJoy golf wear21,011 (1,855)49,128 12,442 
Other6,548 2,667 13,019 3,747 
Total segment operating income109,831 13,158 230,263 45,146 
Reconciling items:  
Interest expense, net(1,848)(4,402)(5,464)(8,525)
Restructuring charges— (1,104)— (12,732)
Non-service cost component of net periodic benefit cost