Acushnet : Announces Third Quarter 2022 Financial Results

Acushnet Holdings Corp. Announces

Third Quarter and Year-to-Date 2022 Financial Results

Third Quarter and Year-to-Date 2022 Financial Results

• Third quarter net sales of $558.2 million, up 7.0% year over year, up 13.5% in constant currency
• Year-to-datenet sales of $1,822.9 million, up 5.5% year over year, up 10.5% in constant currency
• Third quarter net income attributable to Acushnet Holdings Corp. of $51.8 million, up 31.8% year over year
• Year-to-datenet income attributable to Acushnet Holdings Corp. of $199.3 million, down 2.9% year over year
• Third quarter Adjusted EBITDA of $86.5 million, up 23.0% year over year
• Year-to-dateAdjusted EBITDA of $313.0 million, down 6.1% year over year

FAIRHAVEN, MA - November 3, 2022 - Acushnet Holdings Corp. (NYSE: GOLF) ("Acushnet" or, the "Company"), the 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, 2022.

"Acushnet delivered strong third quarter results, with constant currency sales up over 13% and growth in all segments," said David Maher, Acushnet's President and Chief Executive Officer. "These results reflect the strength and momentum of our Titleist, FootJoy and KJUS brands and growing capacity within our supply chain to meet healthy levels of demand. Rounds of play are outpacing our expectations for the year, as golfers across all regions are showing resiliency in both participation and purchasing following record 2021 levels.

Mr. Maher continued, "As we look ahead, we are encouraged by the early success of our fall product launches and especially new TSR drivers and fairways, and are enthused about our full lineup of new products scheduled for the first half of 2023. The entire Acushnet team is focused on delivering best in class products and services to dedicated golfers around the world.

While our business is not immune to currency headwinds and input cost increases, we are confident that our ongoing investments in product development, supply chain excellence and innovation will help us to deliver long- term value for our shareholders."

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Summary of Third Quarter 2022 Financial Results

		Three months ended	Increase/(Decrease)		Constant Currency
		September 30,		Increase/(Decrease)
(in millions)		2022			2021		$	change		% change		$	change		% change
Net sales	$	558.2		$	521.6		$	36.6		7.0 %		$	70.3		13.5 %
Net income attributable to Acushnet Holdings Corp.	$	51.8	$	39.3		$	12.5	31.8 %
Adjusted EBITDA	$	86.5		$	70.3		$	16.2		23.0 %

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Consolidated net sales for the quarter increased 7.0%, or 13.5% on a constant currency basis. The increase on a constant currency basis was driven primarily by higher sales volumes across all reportable segments.

On a geographic basis, net sales in the United States were higher primarily driven by increases of 27.6% in Titleist golf clubs, 16.2% in Titleist golf balls and 39.7% in Titleist golf gear. The increase in Titleist golf clubs was driven by higher sales volumes of our newly introduced TSR drivers and fairways, Phantom X putters and SM9 wedges. The increase in Titleist golf balls was primarily driven by increased sales volumes of our premium performance models. The increase in Titleist golf gear was driven by higher sales volumes of headwear and golf gloves and higher average selling prices across all categories. These increases were partially offset by a decrease of 5.1% in FootJoy golf wear primarily as a result of lower sales volumes in footwear.

Net sales in regions outside the United States decreased 3.5%, or increased 10.6% on a constant currency basis. In EMEA and Rest of world, net sales increased across all reportable segments. In Korea, net sales increased primarily due to increases in all reportable segments except FootJoy golf wear. In Japan, net sales decreased primarily due to lower sales volumes in Titleist golf clubs due to lower sales volumes of irons and changes in the launch timing of TSR drivers and fairways in this region.

Segment specifics:

• 8.4% increase in net sales (13.3% increase on a constant currency basis) of Titleist golf balls. The increase was primarily due to increased sales volumes of our premium performance models reflecting improvement in certain raw material availability.
• 13.5% increase in net sales (19.8% increase on a constant currency basis) of Titleist golf clubs largely due to higher sales volumes of our newly introduced TSR drivers and fairways launched in the third quarter of 2022, as well as Phantom X putters and SM9 wedges launched earlier in 2022. This increase was partially offset by lower sales volumes of second model year irons and hybrids.
• 27.0% increase in net sales (35.0% increase on a constant currency basis) of Titleist golf gear largely due to higher sales volumes in headwear, golf bag and golf glove product categories and higher average selling prices across all product categories.
• 4.5% decrease in net sales (2.5% increase on a constant currency basis) in FootJoy golf wear. The increase in constant currency was primarily due to higher sales volumes in the apparel product category, partially offset by decreases in footwear.

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Net income attributable to Acushnet Holdings Corp. increased 31.8% to $51.8 million, year over year, primarily as a result of an increase in income from operations, partially offset by increases in interest expense and income tax expense.

Adjusted EBITDA was $86.5 million, up 23.0% year over year. Adjusted EBITDA margin was 15.5% for the third quarter versus 13.5% for the prior year period.

Summary of First Nine Months 2022 Financial Results

		Nine months ended	Increase/(Decrease)		Constant Currency
		September 30,		Increase/(Decrease)
(in millions)		2022			2021		$	change		% change		$	change		% change
Net sales	$	1,822.9		$	1,727.4		$	95.5		5.5 %		$	180.6		10.5 %
Net income attributable to Acushnet Holdings Corp.	$	199.3	$	205.3		$	(6.0)	(2.9)%
Adjusted EBITDA	$	313.0		$	333.3		$	(20.3)		(6.1)%

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Consolidated net sales for the first nine months increased 5.5%, or 10.5% on a constant currency basis. The increase on a constant currency basis was driven by growth across all reportable segments.

On a geographic basis, net sales increased in the United States across all reportable segments as a result of increases of 13.9% in Titleist golf clubs, 5.2% in FootJoy golf wear, 2.7% in Titleist golf balls and 9.4% in Titleist golf gear. The increase in Titleist golf clubs was primarily driven by higher sales volumes of SM9 wedges, T- Series irons and Phantom X putters. The increase in FootJoy golf wear was primarily driven by higher average selling prices across all product categories except apparel. The increase in Titleist golf balls was primarily due to higher average selling prices. The increase in Titleist golf gear was primarily driven by higher average selling prices across all product categories.

Net sales in regions outside the United States were up 3.4%, or 13.8% on a constant currency basis. In EMEA, net sales increased across all reportable segments, primarily due to the adverse impact of government-ordered shutdowns in this region in the first quarter of 2021. In Korea and Rest of world, net sales increased across all reportable segments. In Japan, net sales decreased primarily due to lower sales volumes in Titleist golf clubs due to changes in the launch timing of TSR drivers and fairways in this region.

Segment specifics:

• 0.6% increase in net sales (4.2% increase on a constant currency basis) of Titleist golf balls. The increase was primarily driven by higher average selling prices.
• 7.8% increase in net sales (12.4% increase on a constant currency basis) of Titleist golf clubs largely due to higher sales volumes of our SM9 wedges launched in the first quarter of 2022, T-Series irons launched in the third quarter of 2021 and Phantom X putters launched in the second quarter of 2022. This increase was partially offset by lower sales volumes of second model year drivers, fairways and hybrids.

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• 4.7% increase in net sales (10.2% increase on a constant currency basis) of Titleist golf gear primarily due to higher average selling prices across all product categories, partially offset by a sales volume decrease in golf bags due to supply chain and fulfillment constraints.
• 9.8% increase in net sales (15.3% increase on a constant currency basis) in FootJoy golf wear primarily due to increased sales volumes across all product categories and higher average selling prices in footwear.

Net income attributable to Acushnet Holdings Corp. decreased 2.9% to $199.3 million, year over year, primarily as a result of a decrease in income from operations, partially offset by a decrease in income tax expense.

Adjusted EBITDA was $313.0 million, down 6.1% year over year. Adjusted EBITDA margin was 17.2% for the first nine months versus 19.3% for the prior year period.

Cash Dividend and Share Repurchase

Acushnet's Board of Directors today declared a quarterly cash dividend of $0.18 per share of common stock. The dividend will be payable on December 16, 2022 to shareholders of record on December 2, 2022. The number of shares outstanding as of October 28, 2022 was 70,209,026.

During the quarter, the Company repurchased 869,368 shares of common stock on the open market at an average price of $47.82 for an aggregate of $41.6 million. On August 30, 2022, the Company amended and restated its agreement with Magnus Holdings Co., Ltd. ("Magnus"), a wholly owned subsidiary of Fila Holdings Corp., to increase the aggregate dollar amount of shares of its common stock that it will purchase from Magnus from $75.0 million to $100.0 million.

2022 Outlook

The Company has narrowed the ranges of its full-year 2022 Outlook. The Company now expects full-year consolidated net sales to be approximately $2,225 to $2,250 million, compared to its previous range of $2,200 to $2,250 million. On a constant currency basis, consolidated net sales are now expected to increase 9.0% to 10.2%, up from the previous range of 6.8% to 9.1%. The Company now expects full-year 2022 Adjusted EBITDA to be approximately $325 to $335 million, compared to $325 to $345 million. The Company's outlook assumes no significant worsening of the COVID-19 pandemic, additional supply chain disruptions or changes in the impact of foreign currency. The Company plans to share additional details of the 2022 Outlook during its investor conference call.

Investor Conference Call

Acushnet will hold a conference call at 8:30 am (Eastern Time) on November 3, 2022 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

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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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