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): May 3, 2018
 
Acushnet Holdings Corp.
(Exact Name of Registrant as Specified in its Charter)

	
			
Delaware	001-37935	45-2644353	
(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 May 3, 2018 , Acushnet Holdings Corp. (the “Company”) issued a press release announcing the Company’s results of operations for its first quarter ended March 31, 2018 . 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 May 3, 2018, announcing results for the quarter ended March 31, 2018.	

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: May 3, 2018

Exhibit 99.1

Acushnet Holdings Corp. Announces
First -Quarter 2018 Financial Results,
Declares Quarterly Cash Dividend
First -Quarter 2018 Financial Results

•	First -quarter net sales of $441.8 million , up 1.9% year over year, down 2.2% in constant currency	

•	First -quarter net income attributable to Acushnet Holdings Corp. of $41.5 million , up 8.9% year over year	

•	First -quarter Adjusted EBITDA of $77.1 million , down 1.8% year over year	
Quarterly Cash Dividend

•	Quarterly cash dividend of $0.13 per share; $9.7 million on an aggregate basis for the quarter	
FAIRHAVEN, MA – May 3, 2018 – 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 months ended March 31, 2018 .
"As the golf season opens up around the globe, the industry is structurally in a good place and generally optimistic in what has been an exciting start to the season across the worldwide tours," said David Maher, Acushnet's President and Chief Executive Officer. "While weather patterns have been a factor early this year, Acushnet is off to a solid start as we continue to execute on our long-term strategy with good momentum across our various product categories."

"Innovation, the measured introduction of new products, and the breadth and depth of our business are key factors in our on-going success and this quarter our Associates and trade partners continued to deliver," continued Maher. "While the Titleist ball business was comping against the successful 2017 launch of the new Pro V1 and Pro V1x, our recently introduced Tour Soft and Velocity models grew nicely. Club results were driven by continued strength in Titleist 718 irons and the new Vokey SM7 wedges and Cameron Select putters released in March. Titleist gear continued its steady growth and the new FootJoy Tour-S shoe is off to a great start. We have also recently rolled out the new Titleist AVX golf ball in North America and we look forward to fully activating our golf ball and club fitting efforts as the season unfolds."

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Summary of First -Quarter 2018 Financial Results

																							
 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Three months ended March 31,	 	Increase/(Decrease)	 	Constant Currency Increase/(Decrease)	
(in millions)	 	2018	 	2017	 	$ change	 	% change	 	$ change	 	% change	
Net sales	 	$	441.8		 	$	433.6		 	$	8.2		 	1.9	 %	 	$	(9.5	)	 	(2.2	)%	
Net income (loss) attributable to Acushnet Holdings Corp	 	$	41.5		 	$	38.1		 	$	3.4		 	8.9	 %	 	 	 	 	
Adjusted EBITDA	 	$	77.1		 	$	78.5		 	$	(1.4	)	 	(1.8	)%	 	 	 	 	

Consolidated net sales for the quarter increased by 1.9% , down 2.2% on a constant currency basis, primarily as a result of a sales volume decline in Pro V1 and Pro V1x golf balls which were launched in the first quarter of 2017.
On a geographic basis, consolidated net sales in the United States decreased by 1.7% in the quarter. Net sales in regions outside the United States were up 5.7% , down 2.7% on a constant currency basis. On a constant currency basis, EMEA was down 5.2% , Japan down 1.4% and Korea down 2.3% .
Segment specifics:

•	6.9% decrease in net sales ( 9.8% decrease on a constant currency basis) of Titleist golf balls as a result of a sales volume decline in Pro V1 and Pro V1x golf balls which were in their second year of the two year product life cycle and partially offset by a sales volume increase of our newly introduced performance models. In the U.S., sales volumes were impacted by unfavorable weather conditions.	

•	14.7% increase in net sales ( 10.4% increase on a constant currency basis) of Titleist golf clubs driven by higher sales volumes, primarily due to our wedges launched in the quarter and our iron series introduced in the third quarter of 2017, partially offset by lower sales volumes of drivers and fairways which were in their second year of the two-year product life cycle.	

•	4.6% increase in net sales ( 0.4% increase on a constant currency basis) of Titleist golf gear. This increase was driven primarily by higher average selling prices across all categories of the gear business.	

•	1.1% decrease in net sales ( 5.7% decrease on a constant currency basis) in FootJoy golf wear primarily due to a sales volume decline in footwear as a result of the timing of new product launches compared to prior year and unfavorable weather conditions, partially offset by higher average selling prices across all FootJoy categories and a sales volume increase in apparel.	
Net income attributable to Acushnet improved by $3.4 million to $41.5 million , up 8.9% year over year, primarily as a result of lower tax expense, partially offset by higher interest expense and lower income from operations.

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Adjusted EBITDA was $77.1 million , down 1.8% year over year. Adjusted EBITDA margin was 17.4% for the first quarter versus 18.1% for the prior year period.

Declares Quarterly Cash Dividend
Acushnet's board of directors today declared a quarterly cash dividend in an amount of $0.13 per share of common stock. The dividend will be payable on June 15, 2018 , to stockholders of record on June 1, 2018 . The number of shares outstanding as of April 27, 2018 was 74,744,536 .

2018 Outlook

•	Consolidated net sales are expected to be approximately $1,590 to 1,620 million.	

•	Consolidated net sales on a constant currency basis are expected to be in the range of up 1.3% to 3.2%.	

•	Adjusted EBITDA is expected to be approximately $225 to 235 million.	

Investor Conference Call
Acushnet will hold a conference call at 8:30 am (Eastern Time) on May 3, 2018 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.

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Forward-Looking Statements
This press release includes forward-looking statements that reflect our current views with respect to, among other things, our 2018 outlook, our operations and our financial performance. These forward-looking statements are included throughout this press 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 press release.

The forward-looking statements contained in this press 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. Important factors that could cause or contribute to such differences include: a reduction in the number of rounds of golf played or in the number of golf participants; unfavorable weather conditions may impact the number of playable days and rounds played in a given year; macroeconomic factors may affect the number of rounds of golf played and related spending on golf products; demographic factors may affect the number of golf participants and related spending on our products; a significant disruption in the operations of our manufacturing, assembly or distribution facilities; our ability to procure raw materials or components of our products; a disruption in the operations of our suppliers; cost of raw materials and components; currency transaction and translation risk; our ability to successfully manage the frequent introduction of new products; our reliance on technical innovation and high-quality products; changes of the Rules of Golf with respect to equipment; our ability to adequately enforce and protect our intellectual property rights; involvement in lawsuits to protect, defend or enforce our intellectual property rights; our ability to prevent infringement of intellectual property rights by others; recent changes to U.S. patent laws and proposed changes to the rules of the U.S. Patent and Trademark Office; intense competition and our ability to maintain a competitive advantage in each of our markets; limited opportunities for future growth in sales of golf balls, golf shoes and golf gloves; our customers’ financial condition, their levels of business activity and their ability to pay trade obligations; a decrease in corporate spending on our custom logo golf balls; our ability to maintain and further develop our sales channels; consolidation of retailers or concentration of retail market share; our ability to maintain and enhance our brands; seasonal fluctuations of our business; fluctuations of our business based on the timing of new product introductions; risks associated with doing business globally; compliance with laws, regulations and policies, including the U.S. Foreign Corrupt Practices Act or other applicable anti-corruption legislation; our ability to secure professional golfers to endorse or use our products; negative publicity relating to us or the golfers who use our products or the golf industry in general; our ability to accurately forecast demand for our products; a disruption in the service or increase in cost, of our primary delivery and shipping services or a significant disruption at shipping ports; our ability to maintain our information systems to adequately perform their functions; cybersecurity risks; the ability of our eCommerce systems to function effectively; impairment of goodwill and

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identifiable intangible assets; our ability to attract and/or retain management and other key employees and hire qualified management, technical and manufacturing personnel; our ability to prohibit sales of our products by unauthorized retailers or distributors; our ability to grow our presence in existing international markets and expand into additional international markets; tax uncertainties, including potential changes in tax laws, unanticipated tax liabilities and limitations on utilization of tax attributes after any change of control; adequate levels of coverage of our insurance policies; product liability, warranty and recall claims; litigation and other regulatory proceedings; compliance with environmental, health and safety laws and regulations; our ability to secure additional capital on terms acceptable to us; our estimates or judgments relating to our critical accounting policies; our substantial leverage, ability to service our indebtedness, ability to incur more indebtedness and restrictions in the agreements governing our indebtedness; our exposure to market risks from changes in interest rates on our variable rate indebtedness and risks related to counterparty credit worthiness or non-performance of derivative financial instruments; our ability to pay dividends; and the other factors set forth in the section entitled “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2017 filed with the SEC on March 7, 2018 as it may be 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 press release speaks only as of the date of this press 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

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ACUSHNET HOLDINGS CORP.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

	
									
 	 	Three months ended March 31,	
(in thousands)	 	2018	 	2017	
Net sales	 	$	441,801		 	$	433,615		
Cost of goods sold	 	214,127		 	207,200		
Gross profit	 	227,674		 	226,415		
Operating expenses:	 	 	 	 	
Selling, general and administrative	 	151,368		 	147,812		
Research and development	 	12,392		 	12,507		
Intangible amortization	 	1,630		 	1,622		
Income from operations	 	62,284		 	64,474		
Interest expense, net	 	4,408		 	2,922		
Other (income) expense, net	 	(434	)	 	(563	)	
Income before income taxes	 	58,310		 	62,115		
Income tax expense	 	15,220		 	22,485		
Net income	 	43,090		 	39,630		
Less:  Net income attributable to noncontrolling interests	 	(1,606	)	 	(1,516	)	
Net income attributable to Acushnet Holdings Corp.	 	$	41,484		 	$	38,114		

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ACUSHNET HOLDINGS CORP.

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

	
									
 	 	March 31,	 	December 31,	
(in thousands, except share and per share amounts)	 	2018	 	2017	
Assets	 	 	 	 	
Current assets	 	 	 	 	
Cash and restricted cash ($16,031 and $13,086 attributable to the FootJoy golf shoe joint venture ("JV"))	 	$	48,370		 	$	47,722		
Accounts receivable, net	 	348,516		 	190,851		
Inventories ($10,841 and $13,692 attributable to the FootJoy JV)	 	363,328		 	363,962		
Other assets	 	86,922		 	84,541		
Total current assets	 	847,136		 	687,076		
Property, plant and equipment, net ($10,010 and $10,240 attributable to the FootJoy JV)	 	225,257		 	228,922		
Goodwill ($32,312 and $32,312 attributable to the FootJoy JV)	 	188,750		 	185,941		
Intangible assets, net	 	480,043		 	481,234		
Deferred income taxes	 	106,573		 	110,318		
Other assets ($2,740 and $2,738 attributable to the FootJoy JV)	 	35,129		 	33,833		
Total assets	 	$	1,882,888		 	$	1,727,324		
Liabilities and Shareholders' Equity	 	 	 	 	
Current liabilities	 	 	 	 	
Short-term debt	 	$	135,249		 	$	20,364		
Current portion of long-term debt	 	29,688		 	26,719		
Accounts payable ($7,276 and $10,587 attributable to the FootJoy JV)	 	91,447		 	92,759		
Accrued income taxes	 	37,291		 	34,310		
Accrued compensation and benefits	 	65,389		 	80,189		
Accrued expenses and other liabilities ($4,925 and $2,719 attributable to the FootJoy JV)	 	71,105		 	52,442		
Total current liabilities	 	430,169		 	306,783		
Long-term debt and capital lease obligations	 	408,259		 	416,970		
Deferred income taxes	 	9,288		 	9,318		
Accrued pension and other postretirement benefits ($1,691 and $1,908 attributable to the FootJoy JV)	 	130,660		 	130,160		
Other noncurrent liabilities ($4,903 and $4,689 attributable to the FootJoy JV)	 	18,443		 	16,701		
Total liabilities	 	996,819		 	879,932		
Shareholders' equity	 	 	 	 	
Common stock, $0.001 par value, 500,000,000 shares authorized; 74,744,536 and 74,479,319 shares issued and outstanding	 	75		 	74		
Additional paid-in capital	 	896,450		 	894,727		
Accumulated other comprehensive loss, net of tax	 	(80,142	)	 	(81,691	)	
Retained earnings	 	37,816		 	1,618		
Total equity attributable to Acushnet Holdings Corp.	 	854,199		 	814,728		
Noncontrolling interests	 	31,870		 	32,664		
Total shareholders' equity	 	886,069		 	847,392		
Total liabilities and shareholders' equity	 	$	1,882,888		 	$	1,727,324		

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ACUSHNET HOLDINGS CORP.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

	
								
 	Three months ended March 31,	
(in thousands)	2018	 	2017	
Cash flows from operating activities	 	 	 	
Net income	$	43,090		 	$	39,630		
Adjustments to reconcile net income to cash provided by (used in) operating activities	 	 	 	
Depreciation and amortization	10,325		 	10,161		
Unrealized foreign exchange (gain) loss	(1,681	)	 	37		
Amortization of debt issuance costs	331		 	330		
Share-based compensation	4,126		 	3,847		
Loss on disposals of property, plant and equipment	—		 	319		
Deferred income taxes	6,369		 	13,499		
Changes in operating assets and liabilities	(149,392	)	 	(291,311	)	
Cash flows used in operating activities	(86,832	)	 	(223,488	)	
Cash flows from investing activities	 	 	 	
Additions to property, plant and equipment	(5,887	)	 	(3,676	)	
Other investing activity	(2,496	)	 	—		
Cash flows used in investing activities	(8,383	)	 	(3,676	)	
Cash flows from financing activities	 	 	 	
Proceeds from short-term borrowings, net	113,293		 	125,982		
Proceeds from delayed draw term loan A facility	—		 	100,000		
Repayments of delayed draw term loan A facility	(1,250	)	 	(1,250	)	
Repayment of term loan facilities	(4,688	)	 	(4,688	)	
Dividends paid on common stock	(9,898	)	 	—		
Payment of employee restricted stock tax withholdings	(2,634	)	 	(903	)	
Cash flows provided by financing activities	94,823		 	219,141		
Effect of foreign exchange rate changes on cash	1,040		 	1,621		
Net increase (decrease) in cash	648		 	(6,402	)	
Cash and restricted cash, beginning of year	47,722		 	79,140		
Cash and restricted cash, end of period	$	48,370		 	$	72,738		

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

																							
 	 	Three months ended	 	 	 	 	 	Constant Currency	
 	 	March 31,	 	Increase/(Decrease)	 	Increase/(Decrease)	
(in thousands)	 	2018	 	2017	 	$ change	 	% change	 	$ change	 	% change	
Titleist golf balls	 	$	124,906		 	$	134,192		 	$	(9,286	)	 	(6.9	)%	 	$	(13,213	)	 	(9.8	)%	
Titleist golf clubs	 	116,893		 	101,942		 	14,951		 	14.7	 %	 	10,627		 	10.4	 %	
Titleist golf gear	 	44,345		 	42,390		 	1,955		 	4.6	 %	 	170		 	0.4	 %	
FootJoy golf wear	 	140,706		 	142,241		 	(1,535	)	 	(1.1	)%	 	(8,077	)	 	(5.7	)%	

First Quarter Net Sales by Region

	
																							
 	 	Three months ended March 31,	 	Increase/(Decrease)	 	Constant Currency Increase/(Decrease)	
(in thousands)	 	2018	 	2017	 	$ change	 	% change	 	$ change	 	% change	
United States	 	$	219,289		 	$	223,115		 	$	(3,826	)	 	(1.7	)%	 	$	(3,826	)	 	(1.7	)%	
EMEA	 	73,042		 	68,009		 	5,033		 	7.4	 %	 	(3,527	)	 	(5.2	)%	
Japan	 	52,129		 	50,053		 	2,076		 	4.1	 %	 	(717	)	 	(1.4	)%	
Korea	 	52,675		 	49,882		 	2,793		 	5.6	 %	 	(1,165	)	 	(2.3	)%	
Rest of world	 	44,666		 	42,556		 	2,110		 	5.0	 %	 	(227	)	 	(0.5	)%	
Total net sales	 	$	441,801		 	$	433,615		 	$	8,186		 	1.9	 %	 	$	(9,462	)	 	(2.2	)%	

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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, Adjusted EBITDA and Adjusted EBITDA margin. 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, share-based compensation expense, certain transaction fees, indemnification expense (income) from our former owner Beam Suntory, Inc. (formerly known as Fortune Brands, Inc.) (“Beam”), 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 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

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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.
We also use Adjusted EBITDA margin on a consolidated basis, which measures our Adjusted EBITDA as a percentage of net sales, because our management uses it to evaluate the 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. We present Adjusted EBITDA margin as a supplemental measure of our operating performance because it excludes the impact of certain items that we do not consider indicative of our ongoing operating performance. Adjusted EBITDA margin is not a measurement of financial performance under GAAP. It should not be considered an alternative to any measure of performance derived in accordance with GAAP.

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The following table presents reconciliations of net income attributable to Acushnet Holdings Corp. to Adjusted EBITDA for the periods presented (dollars in thousands):

									
 	 	Three months ended March 31,	
 	 	2018	 	2017	
Net income attributable to Acushnet Holdings Corp.	 	$	41,484		 	$	38,114		
Income tax expense	 	15,220		 	22,485		
Interest expense, net	 	4,408		 	2,922		
Depreciation and amortization	 	10,325		 	10,161		
Shared-based compensation(a)	 	4,126		 	3,847		
Transaction fees(b)	 	—		 	94		
Beam indemnification expense (income)(c)	 	54		 	(93	)	
Other non-cash gains, net	 	(151	)	 	(584	)	
Net income attributable to noncontrolling interests(d)	 	1,606		 	1,516		
Adjusted EBITDA	 	$	77,072		 	$	78,462		
Adjusted EBITDA margin	 	17.4	%	 	18.1	%	
(a) Reflects compensation expense with respect to equity-based grants under the Acushnet Holdings Corp. 2015 Omnibus Incentive Plan.
(b) Reflects legal fees incurred relating to a dispute arising from the indemnification obligations owed to us by Beam Suntory, Inc ("Beam").
(c) 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 Acushnet Holdings Corp.
(d) 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 2018 , 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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