Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Mar. 02, 2018 | Jun. 30, 2017 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | Acushnet Holdings Corp. | ||
Entity Central Index Key | 1,672,013 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2017 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Public Float | $ 667.6 | ||
Document Fiscal Year Focus | 2,017 | ||
Document Fiscal Period Focus | FY | ||
Common stock outstanding | 74,744,536 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Current assets | ||
Cash and restricted cash ($13,086 and $13,811 attributable to the variable interest entity ("VIE")) | $ 47,722 | $ 79,140 |
Accounts receivable, net | 190,851 | 177,506 |
Inventories ($13,692 and $14,633 attributable to the VIE) | 363,962 | 323,289 |
Other assets | 84,541 | 84,596 |
Total current assets | 687,076 | 664,531 |
Property, plant and equipment, net ($10,240 and $10,709 attributable to the VIE) | 228,922 | 239,748 |
Goodwill ($32,312 and $32,312 attributable to the VIE) | 185,941 | 179,241 |
Intangible assets, net | 481,234 | 489,988 |
Deferred income taxes | 110,318 | 130,416 |
Other assets ($2,738 and $2,642 attributable to the VIE) | 33,833 | 32,247 |
Total assets | 1,727,324 | 1,736,171 |
Current liabilities | ||
Short-term debt | 20,364 | 42,495 |
Current portion of long-term debt | 26,719 | 18,750 |
Accounts payable ($10,587 and $10,397 attributable to the VIE) | 92,759 | 87,608 |
Accrued taxes | 34,310 | 41,962 |
Accrued compensation and benefits ($780 and $780 attributable to the VIE) | 80,189 | 224,230 |
Accrued expenses and other liabilities ($2,719 and $4,121 attributable to the VIE) | 52,442 | 47,063 |
Total current liabilities | 306,783 | 462,108 |
Long-term debt and capital lease obligations | 416,970 | 348,348 |
Deferred income taxes | 9,318 | 7,452 |
Accrued pension and other postretirement benefits ($1,908 and $1,946 attributable to the VIE) | 130,160 | 135,339 |
Other noncurrent liabilities ($4,689 and $3,368 attributable to the VIE) | 16,701 | 14,101 |
Total liabilities | 879,932 | 967,348 |
Shareholders' Equity | ||
Common stock, $0.001 par value, 500,000,000 shares authorized; 74,479,319 and 74,093,598 shares issued and outstanding | 74 | 74 |
Additional paid-in capital | 894,727 | 880,576 |
Accumulated other comprehensive loss, net of tax | (81,691) | (90,834) |
Retained earnings (deficit) | 1,618 | (53,951) |
Total equity attributable to Acushnet Holdings Corp. | 814,728 | 735,865 |
Noncontrolling interests | 32,664 | 32,958 |
Total shareholders' equity | 847,392 | 768,823 |
Total liabilities and shareholders' equity | $ 1,727,324 | $ 1,736,171 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parentheticals) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Cash and restricted cash | $ 47,722 | $ 79,140 |
Inventories | 363,962 | 323,289 |
Property, plant and equipment, net | 228,922 | 239,748 |
Goodwill | 185,941 | 179,241 |
Other assets | 33,833 | 32,247 |
Accounts payable | 92,759 | 87,608 |
Accrued compensation and benefits | 80,189 | 224,230 |
Accrued expenses and other liabilities | 52,442 | 47,063 |
Accrued pension and other postretirement benefits | 130,160 | 135,339 |
Other noncurrent liabilities | $ 16,701 | $ 14,101 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, shares issued | 74,479,319 | 74,093,598 |
Common stock, shares outstanding | 74,479,319 | 74,093,598 |
VIE | ||
Cash and restricted cash | $ 13,086 | $ 13,811 |
Inventories | 13,692 | 14,633 |
Property, plant and equipment, net | 10,240 | 10,709 |
Goodwill | 32,312 | 32,312 |
Other assets | 2,738 | 2,642 |
Accounts payable | 10,587 | 10,397 |
Accrued compensation and benefits | 780 | 780 |
Accrued expenses and other liabilities | 2,719 | 4,121 |
Accrued pension and other postretirement benefits | 1,908 | 1,946 |
Other noncurrent liabilities | $ 4,689 | $ 3,368 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
CONSOLIDATED STATEMENTS OF OPERATIONS | |||
Net sales | $ 1,560,258 | $ 1,572,275 | $ 1,502,958 |
Cost of goods sold | 759,466 | 773,550 | 727,120 |
Gross profit | 800,792 | 798,725 | 775,838 |
Operating expenses: | |||
Selling, general and administrative | 579,837 | 600,804 | 604,018 |
Research and development | 48,148 | 48,804 | 45,977 |
Intangible amortization | 6,499 | 6,608 | 6,617 |
Restructuring charges | 1,673 | 1,643 | |
Income from operations | 166,308 | 140,836 | 117,583 |
Interest expense, net (Note 14) | 15,709 | 49,908 | 60,294 |
Other (income) expense, net | (1,077) | 1,706 | 25,139 |
Income before income taxes | 151,676 | 89,222 | 32,150 |
Income tax expense | 55,056 | 39,707 | 27,994 |
Net income | 96,620 | 49,515 | 4,156 |
Less: Net income attributable to noncontrolling interests | (4,506) | (4,503) | (5,122) |
Net income (loss) attributable to Acushnet Holdings Corp. | 92,114 | 45,012 | (966) |
Dividends earned by preferred shareholders | (11,576) | (13,785) | |
Allocation of undistributed earnings to preferred shareholders | (10,247) | ||
Net income (loss) attributable to common stockholders - basic | 92,114 | 23,189 | (14,751) |
Adjustments to net income for dilutive securities | 16,475 | ||
Net income (loss) attributable to common stockholders - diluted | $ 92,114 | $ 39,664 | $ (14,751) |
Net income (loss) per common share attributable to Acushnet Holdings Corp.: | |||
Basic | $ 1.24 | $ 0.74 | $ (0.74) |
Net income (loss) per common share attributable to Acushnet Holdings Corp. - diluted | |||
Diluted | 1.23 | $ 0.62 | $ (0.74) |
Cash dividends declared per common share: | $ 0.48 | ||
Weighted average number of common shares: | |||
Basic | 74,399,836 | 31,247,643 | 19,939,293 |
Diluted | 74,590,999 | 64,323,742 | 19,939,293 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) | |||
Net income | $ 96,620 | $ 49,515 | $ 4,156 |
Other comprehensive income (loss) | |||
Foreign currency translation adjustments | 26,964 | (14,656) | (19,042) |
Foreign exchange derivative instruments | |||
Unrealized holding gains (losses) arising during period | (15,558) | 7,014 | 14,964 |
Reclassification adjustments included in net income | (1,329) | (5,194) | (26,805) |
Tax benefit (expense) | 4,072 | (451) | 3,836 |
Foreign exchange derivative instruments, net | (12,815) | 1,369 | (8,005) |
Available-for-sale securities | |||
Unrealized holding gains (losses) arising during period | 150 | 51 | (673) |
Tax benefit (expense) | 35 | (19) | 160 |
Available-for-sale securities, net | 185 | 32 | (513) |
Pension and other postretirement benefits | |||
Pension and other postretirement benefits adjustments | (6,889) | (16,072) | 3,068 |
Tax benefit (expense) | 1,698 | 5,727 | (1,684) |
Pension and other postretirement benefits adjustments, net | (5,191) | (10,345) | 1,384 |
Total other comprehensive income (loss) | 9,143 | (23,600) | (26,176) |
Comprehensive income (loss) | 105,763 | 25,915 | (22,020) |
Less: Comprehensive income attributable to noncontrolling interests | (4,524) | (4,563) | (5,017) |
Comprehensive income (loss) attributable to Acushnet Holdings Corp. | $ 101,239 | $ 21,352 | $ (27,037) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Cash flows from operating activities | |||
Net income | $ 96,620 | $ 49,515 | $ 4,156 |
Adjustments to reconcile net income to cash provided by (used in) operating activities | |||
Depreciation and amortization | 40,871 | 40,834 | 41,702 |
Unrealized foreign exchange (gain) loss | (4,028) | (2,347) | 2,933 |
Amortization of debt issuance costs | 1,321 | 3,378 | 5,157 |
Amortization of discount on bonds payable | 3,963 | 4,142 | |
Change in fair value of common stock warrants | 6,112 | 28,364 | |
Share-based compensation | 15,285 | 14,494 | 2,033 |
Loss on disposals of property, plant and equipment | 912 | 170 | 401 |
Deferred income taxes | 27,853 | 7,849 | 2,188 |
Changes in operating assets and liabilities | |||
Accounts receivable | (2,592) | 12,630 | (174) |
Inventories | (28,372) | (2,377) | (45,415) |
Accounts payable | 974 | 1,968 | (1,998) |
Accrued taxes | (10,283) | 14,666 | 540 |
Accrued expenses and other liabilities | (145,837) | 113,042 | 35,364 |
Other assets | (8,477) | (6,960) | 1,165 |
Other noncurrent liabilities | (11,284) | (140,098) | 12,278 |
Interest due to related parties | (12,570) | (1,006) | |
Cash flows provided by (used in) operating activities | (27,037) | 104,269 | 91,830 |
Cash flows from investing activities | |||
Additions to property, plant and equipment | (18,845) | (19,175) | (23,201) |
Cash flows used in investing activities | (18,845) | (19,175) | (23,201) |
Cash flows from financing activities | |||
Increase (decrease) in short-term borrowings, net | (25,548) | 747 | 7,890 |
Proceeds from delayed draw term loan A facility | 100,000 | ||
Repayment of delayed draw term loan A facility | (5,000) | ||
Repayment of term loan facilities | (18,750) | (4,688) | |
Repayment of senior term loan facility | (30,000) | ||
Proceeds from term loan facility | 375,000 | ||
Repayment of secured floating rate notes | (375,000) | (50,000) | |
Proceeds from exercise of common stock warrants | 34,503 | 34,503 | |
Repayment of bonds | (34,503) | (34,503) | |
Debt issuance costs | (6,606) | ||
Dividends paid on common stock | (35,744) | ||
Dividends paid on Series A redeemable convertible preferred stock | (17,316) | (13,747) | |
Dividends paid to noncontrolling interests | (4,800) | (4,800) | (4,200) |
Payment of employee restricted stock tax withholdings | (903) | ||
Cash flows provided by (used in) financing activities | 9,255 | (62,663) | (60,057) |
Effect of foreign exchange rate changes on cash | 5,209 | (2,425) | (3,205) |
Net increase (decrease) in cash | (31,418) | 20,006 | 5,367 |
Cash and restricted cash, beginning of year | 79,140 | 59,134 | 53,767 |
Cash and restricted cash, end of period | 47,722 | 79,140 | 59,134 |
Supplemental information | |||
Cash paid for interest to related parties | 36,753 | 32,274 | |
Cash paid for interest to third parties | 15,488 | 27,165 | 20,571 |
Cash paid for income taxes | 35,949 | 16,589 | 19,724 |
Non-cash additions to property, plant and equipment | 2,876 | 1,170 | 1,913 |
Dividend equivalents declared not paid | $ 801 | ||
Non-cash conversion of Series A redeemable convertible preferred stock | 131,036 | ||
Non-cash conversion of convertible notes | 362,489 | ||
Non-cash conversion of common stock warrants | $ 28,996 | 7,298 | |
Non-cash exercise of stock options | $ 2,752 |
CONSOLIDATED STATEMENT OF REEDE
CONSOLIDATED STATEMENT OF REEDEMABLE CONVERTIBLE PREFERRED STOCK AND EQUITY - USD ($) $ in Thousands | Parent | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Loss | Retained Earnings (Deficit) | Noncontrolling Interest | Redeemable Convertible Preferred Stock | Total |
Beginning balance at Dec. 31, 2014 | $ 156,587 | $ 18 | $ 264,561 | $ (41,058) | $ (66,934) | $ 32,333 | $ 131,036 | $ 188,920 |
Beginning balance (in shares) at Dec. 31, 2014 | 18,552 | 1,838 | ||||||
Changes in stockholders' equity | ||||||||
Net income | (966) | (966) | 5,122 | 4,156 | ||||
Issuance of common stock (in shares) | 3,105 | |||||||
Issuance of common stock | 41,801 | $ 3 | 41,798 | 41,801 | ||||
Exercise of common stock options (in shares) | 164 | |||||||
Exercise of common stock options (in value) | 2,752 | $ 1 | 2,751 | 2,752 | ||||
Other comprehensive income (loss) | (26,176) | (26,176) | (26,176) | |||||
Dividends paid on Series A redeemable convertible preferred stock | (13,747) | (13,747) | (13,747) | |||||
Dividends declared to noncontrolling interests | (4,200) | (4,200) | ||||||
Ending balance at Dec. 31, 2015 | 160,251 | $ 22 | 309,110 | (67,234) | (81,647) | 33,255 | $ 131,036 | 193,506 |
Ending balance (in shares) at Dec. 31, 2015 | 21,821 | 1,838 | ||||||
Changes in stockholders' equity | ||||||||
Net income | 45,012 | 45,012 | 4,503 | 49,515 | ||||
Issuance of common stock (in shares) | 3,105 | |||||||
Issuance of common stock | 63,499 | $ 3 | 63,496 | 63,499 | ||||
Conversion of redeemable convertible preferred stock (in shares) | 16,542 | (1,838) | ||||||
Conversion of redeemable convertible preferred stock (in Value) | 131,036 | $ 16 | 131,020 | $ (131,036) | 131,036 | |||
Conversion of convertible notes | 362,489 | $ 33 | 362,456 | 362,489 | ||||
Conversion of convertible notes (in shares) | 32,626 | |||||||
Other comprehensive income (loss) | (23,600) | (23,600) | (23,600) | |||||
Share-based compensation | 14,494 | 14,494 | 14,494 | |||||
Dividends paid on Series A redeemable convertible preferred stock | (17,316) | (17,316) | (13,700) | (17,316) | ||||
Dividends declared to noncontrolling interests | (4,800) | (4,800) | ||||||
Ending balance at Dec. 31, 2016 | 735,865 | $ 74 | 880,576 | (90,834) | (53,951) | 32,958 | 768,823 | |
Ending balance (in shares) at Dec. 31, 2016 | 74,094 | |||||||
Changes in stockholders' equity | ||||||||
Net income | 92,114 | 92,114 | 4,506 | 96,620 | ||||
Other comprehensive income (loss) | 9,143 | 9,143 | 9,143 | |||||
Share-based compensation | 15,054 | 15,054 | 15,054 | |||||
Vesting of restricted common stock, net of shares withheld for employee taxes (in shares) | 385 | |||||||
Vesting of restricted common stock, net of shares withheld for employee taxes (in value) | (903) | (903) | (903) | |||||
Dividends and dividend equivalents declared | (36,545) | (36,545) | (36,545) | |||||
Dividends paid on Series A redeemable convertible preferred stock | $ (17,300) | |||||||
Dividends declared to noncontrolling interests | (4,800) | (4,800) | ||||||
Ending balance at Dec. 31, 2017 | $ 814,728 | $ 74 | $ 894,727 | $ (81,691) | $ 1,618 | $ 32,664 | $ 847,392 | |
Ending balance (in shares) at Dec. 31, 2017 | 74,479 |
Description of Business
Description of Business | 12 Months Ended |
Dec. 31, 2017 | |
Description of Business | |
Description of Business | 1. Description of Business Acushnet Holdings Corp. (the “Company”), headquartered in Fairhaven, Massachusetts, is the global leader in the design, development, manufacture and distribution of performance-driven golf products. The Company has established positions across all major golf equipment and golf wear categories under its globally recognized brands of Titleist, FootJoy, Scotty Cameron and Vokey Design. Acushnet products are sold primarily to on-course golf pro shops and selected off-course golf specialty stores, sporting goods stores and other qualified retailers. The Company sells products primarily in the United States, Europe (primarily the United Kingdom, Germany, France and Sweden), Asia (primarily Japan, Korea, China and Singapore), Canada and Australia. Acushnet manufactures and sources its products principally in the United States, China, Thailand, the United Kingdom and Japan. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2017 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Basis of Presentation The accompanying 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 the Company, its wholly- owned subsidiaries and a variable interest entity (“VIE”) in which the Company is the primary beneficiary. All intercompany balances and transactions have been eliminated in consolidation. Certain prior period amounts have been reclassified to conform to current year presentation. Use of Estimates The preparation of the Company’s consolidated financial statements in accordance with U.S. GAAP requires management to make estimates and judgments that affect reported amounts of assets, liabilities, stockholders’ equity, net sales and expenses, and the disclosure of contingent assets and liabilities in its consolidated financial statements. Actual results could differ from those estimates. Acquisition Acushnet Holdings Corp. was incorporated in Delaware on May 9, 2011 as Alexandria Holdings Corp., an entity owned by Fila Korea Co., Ltd. (“Fila Korea”), a leading sport and leisure apparel and footwear company which is a public company listed on the Korea Exchange, and a consortium of investors (the “Financial Investors”) led by Mirae Asset Global Investments, a global investment management firm. Acushnet Holdings Corp. acquired Acushnet Company, our operating subsidiary, from Beam Suntory, Inc. (at the time known as Fortune Brands, Inc.) (“Beam”) on July 29, 2011 (the “Acquisition”). Initial Public Offering On November 2, 2016, the Company completed an initial public offering of 19,333,333 shares of its common stock sold by selling stockholders at a public offering price of $17.00 per share. Upon the closing of the Company’s initial public offering, all remaining outstanding shares of the Company’s Series A redeemable convertible preferred stock (“Series A preferred stock”) were automatically converted into 11,556,495 shares of the Company’s common stock and the Company’s 7.5% convertible notes due 2021 (“convertible notes”) were automatically converted into 22,791,852 shares of the Company’s common stock. The underwriters of the Company’s initial public offering exercised their over-allotment option to purchase an additional 2,899,999 shares of common stock from the selling stockholders at the initial public offering price of $17.00 per share. Following the pricing of the initial public offering, Magnus Holdings Co., Ltd. (“Magnus”), a wholly-owned subsidiary of Fila Korea, purchased from the Financial Investors on a pro rata basis 14,818,720 shares of the Company’s common stock, resulting in Magnus holding a controlling ownership interest in the Company’s outstanding common stock. The 14,818,720 shares of the Company’s common stock sold by the Financial Investors were received upon the automatic conversion of certain of the Company’s outstanding convertible notes (Note 9) and Series A preferred stock (Note 15). The remaining outstanding convertible notes and Series A preferred stock automatically converted into shares of the Company’s common stock prior to the closing of the initial public offering. On October 14, 2016, the Company effected a nine-for-one stock split of its issued and outstanding shares of common stock and a proportional adjustment to the existing conversion ratios for its convertible notes, Series A preferred stock, and the exercise price for the common stock warrants and the strike price of stock-based compensation. Accordingly, all share and per share amounts for all periods presented in the accompanying consolidated financial statements and notes thereto have been adjusted retroactively, where applicable, to reflect this stock split and adjustment of the common stock warrant exercise price, and convertible notes and redeemable convertible preferred stock conversion ratios. 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 noncontrolling entities have guaranteed the credit lines of the VIE, for which there were no outstanding borrowings as of December 31, 2017 and 2016. In addition, pursuant to the terms of the agreement governing the VIE, the Company is not required to provide financial support to the VIE. Cash and Restricted Cash Cash held in Company checking accounts is included in cash. Book overdrafts not subject to offset with other accounts with the same financial institution are classified as accounts payable. As of December 31, 2017 and 2016, book overdrafts in the amount of $2.9 million and $3.6 million, respectively, were recorded in accounts payable. The Company classifies as restricted certain cash that is not available for use in its operations. As of December 31, 2017 and 2016, the amount of restricted cash included in cash and restricted cash on the consolidated balance sheet was $2.3 million and $3.1 million, respectively. Accounts Receivable Accounts receivable are presented net of an allowance for doubtful accounts. The allowance for doubtful accounts is assessed each reporting period by the Company for estimated losses resulting from the inability or unwillingness of its customers to make required payments. The allowance is based on various factors, including credit risk assessments, length of time the receivables are past due, historical experience, customer specific information available to the Company and existing economic conditions. Allowance for Sales Returns A sales returns allowance is recorded for anticipated returns through a reduction of sales and cost of goods sold in the period that the related sales are recorded. Sales returns are estimated based upon historical rates of product returns, current economic trends and changes in customer demands as well as specific identification of outstanding returns. In accordance with this policy, the allowance for sales returns was $ 13.5 million and $9.8 million as of December 31, 2017 and 2016, respectively. Concentration of Credit Risk and of Significant Customers Financial instruments that potentially expose the Company to concentration of credit risk are cash and accounts receivable. Substantially all of the Company's cash deposits are maintained at large, creditworthy financial institutions. The Company's deposits, at times, may exceed federally insured limits. The Company does not believe that it is subject to unusual credit risk beyond the normal credit risk associated with commercial banking relationships. As part of its ongoing procedures, the Company monitors its concentration of deposits with various financial institutions in order to avoid any undue exposure. As of December 31, 2017 and 2016, the Company had $ 44.7 million and $75.6 million, respectively, in banks located outside the United States. The risk with respect to the Company's accounts receivable is managed by the Company through its policy of monitoring the creditworthiness of its customers to which it grants credit terms in the normal course of business. Inventories Inventories are valued at the lower of cost and net realizable value. Cost is determined using the first-in, first-out inventory method. The inventory balance, which includes material, labor and manufacturing overhead costs, is recorded net of an allowance for obsolete or slow moving inventory. The Company's allowance for obsolete or slow moving inventory contains estimates regarding uncertainties. Such estimates are updated each reporting period and require the Company to make assumptions and to apply judgment regarding a number of factors, including market conditions, selling environment, historical results and current inventory trends. Property, Plant and Equipment Property, plant and equipment are recorded at cost less accumulated depreciation and amortization. Depreciation is provided on a straight-line basis over the estimated useful lives of the assets. Gains or losses resulting from disposals are included in income from operations. Betterments and renewals, which improve and extend the life of an asset, are capitalized. Maintenance and repair costs are expensed as incurred. Estimated useful lives of property, plant and equipment asset categories were as follows: Buildings and improvements – 40 years Machinery and equipment – 10 years Furniture, fixtures and computer hardware – 10 years Computer software – 10 years Leasehold and tenant improvements are amortized over the shorter of the lease term or the estimated useful lives of the assets. Certain costs incurred in connection with the development of the Company's internal-use software are capitalized. Software development costs are primarily related to the Company's enterprise resource planning system. Costs incurred in the preliminary stages of development are expensed as incurred. Internal and external costs incurred in the application development phase, if direct and incremental, are capitalized until the software is substantially complete and ready for its intended use. Capitalization ceases upon completion of all substantial testing performed to ensure the product is ready for its intended use. Costs such as maintenance and training are expensed as incurred. The capitalized internal-use software costs are included in property, plant and equipment and once the software is placed into service are amortized over the estimated useful life which ranges from three to ten years. Long-Lived Assets A long-lived asset (including amortizable identifiable intangible assets) or asset group is tested for recoverability whenever events or changes in circumstances indicate that its carrying amount may not be recoverable. When such events occur, the Company compares the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset or asset group to the carrying amount of the long-lived asset or asset group. The cash flows are based on the best estimate of future cash flows derived from the most recent business projections. If the carrying value exceeds the sum of the undiscounted cash flows, an impairment loss is recognized based on the excess of the asset's or asset group's carrying value over its fair value. Fair value is determined based on discounted expected future cash flows on a market participant basis. Any impairment charge would be recognized within operating expenses as a selling, general and administrative expense. The Company continually evaluates whether events and circumstances have occurred that indicate the remaining estimated useful life of long-lived assets may warrant revision or that the remaining balance may not be recoverable. These factors may include a significant deterioration of operating results, changes in business plans, or changes in anticipated cash flows. Goodwill and Indefinite-Lived Intangible Assets Goodwill and indefinite-lived intangible assets are not amortized but instead are measured for impairment at least annually, or more frequently when events or changes in circumstances indicate that the carrying amount of the asset may be impaired. Goodwill is assigned to reporting units for purposes of impairment testing. A reporting unit may be the same as an operating segment or one level below an operating segment. For purposes of assessing potential impairment, the Company may assess qualitative factors to determine if it is more likely than not that the fair value of a reporting unit is less than its carrying amount, including goodwill. If the Company determines based on the qualitative factors that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, no further testing is necessary. If, however, the Company determines that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, the Company performs the first step of a two-step quantitative goodwill impairment test. In the first step, the Company compares the fair value of the reporting unit to its carrying value. If the fair value of the reporting unit exceeds the carrying value of the net assets assigned to that unit, goodwill is considered not impaired and the Company is not required to perform further testing. If the carrying value of the net assets assigned to the reporting unit exceeds the fair value of the reporting unit, then the Company must perform the second step of the impairment test in order to determine the implied fair value of the reporting unit's goodwill. If the carrying value of a reporting unit's goodwill exceeds its implied fair value, then the Company would record an impairment loss equal to the difference. The fair value of the reporting units is determined using the income approach. The income approach uses a discounted cash flow analysis which involves applying appropriate discount rates to estimated future cash flows based on forecasts of sales, costs and capital requirements. The Company performs its annual impairment tests in the fourth quarter of each fiscal year. As of December 31, 2017, no impairment of goodwill was identified and the fair value of each reporting unit exceeded its carrying value. Purchased intangible assets other than goodwill are amortized over their useful lives unless those lives are determined to be indefinite. The Company's trademarks have been assigned an indefinite life as the Company currently anticipates that these trademarks will contribute to its cash flows indefinitely. Trademarks are reviewed for impairment annually and may be reviewed more frequently if indicators of impairment are present. Impairment losses are recorded to the extent that the carrying value of the indefinite-lived intangible asset exceeds its fair value. The Company measures the fair value of its trademarks using the relief-from-royalty method, which estimates the present value of royalty income that could be hypothetically earned by licensing the brand name to a third party over the remaining useful life. As of December 31, 2017, no impairment of trademarks was identified. Deferred Financing Costs The Company defers costs directly associated with acquiring third-party financing. These deferred costs are amortized as interest expense over the term of the related indebtedness. Deferred financing costs associated with the revolving credit facilities are included in other current and noncurrent assets and deferred financing costs associated with all other indebtedness are netted against debt on the consolidated balance sheet. 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 maximize the use of observable inputs and minimize the use of unobservable inputs. Financial assets and liabilities carried at fair value are to be classified and disclosed in one of the following three levels of the fair value hierarchy, of which the first two are considered observable and the last is considered unobservable: · Level 1—Quoted prices in active markets for identical assets or liabilities. · Level 2—Observable inputs (other than Level 1 quoted prices), such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data. · Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques. The Company’s foreign exchange derivative assets and liabilities are carried at fair value determined according to the fair value hierarchy described above (Note 11). The carrying value of accounts receivable, accounts payable and accrued expenses approximates fair value due to the short-term nature of these assets and liabilities. The Company adopted the fair value measurement disclosures for nonfinancial assets and liabilities, such as goodwill and indefinite-lived intangible assets. In some instances where a market price is available, but the instrument is in an inactive or over-the-counter market, the Company consistently applies the dealer (market maker) pricing estimate and uses a midpoint approach on bid and ask prices from financial institutions to determine the reasonableness of these estimates. Assets and liabilities subject to this fair value valuation approach are typically classified as Level 2. Pension and Other Postretirement Benefit Plans The Company provides U.S. and foreign defined benefit and defined contribution plans to eligible employees and postretirement benefits to certain retirees, including pensions, postretirement healthcare benefits and other postretirement benefits. Plan assets and obligations are measured using various actuarial assumptions, such as discount rates, rate of compensation increase, mortality rates, turnover rates and health care cost trend rates, as determined at each year end measurement date. The measurement of net periodic benefit cost is based on various actuarial assumptions, including discount rates, expected return on plan assets and rate of compensation increase, which are determined as of the prior year measurement date. The determination of the discount rate is generally based on an index created from a hypothetical bond portfolio consisting of high-quality fixed income securities with durations that match the timing of expected benefit payments. The expected return on plan assets is determined based on several factors, including adjusted historical returns, historical risk premiums for various asset classes and target asset allocations within the portfolio. Adjustments made to the historical returns are based on recent return experience in the equity and fixed income markets and the belief that deviations from historical returns are likely over the relevant investment horizon. Actual cost is also dependent on various other factors related to the employees covered by these plans. The effects of actuarial deviations from assumptions are generally accumulated and, if over a specified corridor, amortized over the remaining service period of the employees. The cost or benefit of plan changes, such as increasing or decreasing benefits for prior employee service (prior service cost), is deferred and included in expense on a straight-line basis over the average remaining service period of the related employees. The Company's actuarial assumptions are reviewed on an annual basis and modified when appropriate. To calculate the U.S. pension and postretirement benefit plan expense in 2017, the Company applied the individual spot rates along the yield curve that correspond with the timing of each future cash outflow for the benefit payments in order to calculate interest cost and service cost. Prior to 2017, the service cost and interest cost components were determined using a single weighted-average discount rate. The change does not affect the measurement of the total benefit plan obligations, as the change in the service cost and interest cost offsets in the actuarial gains and losses recorded in other comprehensive income. The Company changed to the new method to provide a more precise measure of service and interest cost by improving the correlation between the projected benefit cash flows and the discrete spot yield curve rates. The Company accounted for this change as a change in estimate prospectively beginning in 2017. Income Taxes The Company accounts for income taxes using the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between consolidated financial statement carrying amounts and tax basis amounts enacted tax rates expected to be in effect when the temporary differences reverse. A valuation allowance is recorded to reduce deferred income tax assets when it is more-likely-than-not that such assets will not be realized. Potential for recovery of deferred tax assets is evaluated by estimating the future taxable profits expected and considering prudent and feasible tax planning strategies. The Company records liabilities for uncertain income tax positions based on the two step process. The first step is recognition, where an individual tax position is evaluated as to whether it has a likelihood of greater than 50% of being sustained upon examination based on the technical merits of the position, including resolution of any related appeals or litigation processes. For tax positions that are currently estimated to have a less than 50% likelihood of being sustained, no tax benefit is recorded. For tax positions that have met the recognition threshold in the first step, the Company performs the second step of measuring the benefit to be recorded. The amount of the benefit that may be recognized is the largest amount that has a greater than 50% likelihood of being realized on ultimate settlement. The actual benefits ultimately realized may differ from the estimates. In future periods, changes in facts, circumstances, and new information may require the Company to change the recognition and measurement estimates with regard to individual tax positions. Changes in recognition and measurement estimates are recorded in income tax expense and liability in the period in which such changes occur. The Company recognizes accrued interest and penalties related to unrecognized tax benefits in the provision for income taxes on the consolidated statements of income. Beam has indemnified certain tax obligations that relate to periods during which Fortune Brands, Inc. owned Acushnet Company (Note 13). These estimated tax obligations are recorded in accrued taxes and other noncurrent liabilities, and the related indemnification receivable is recorded in other current and noncurrent assets on the consolidated balance sheet. Any changes in the value of these specifically identified tax obligations are recorded in the period identified in income tax expense and the related change in the indemnification asset is recorded in other (income) expense, net on the consolidated statement of operations. Revenue Recognition Revenue is recognized upon shipment or upon receipt by the customer depending on the country of the sale and the agreement with the customer, net of allowances for discounts, sales returns, customer sales incentives and cooperative advertising. The criteria for recognition of revenue is met when persuasive evidence that an arrangement exists, both title and risk of loss have passed to the customer, the price is fixed or determinable and collectability is reasonably assured. In circumstances where either title or risk of loss pass upon receipt by the customer, revenue is deferred until such event occurs based on an estimate of the shipping time from the Company's distribution centers to the customer using historical and expected delivery times by geographic location. Amounts billed to customers for shipping and handling are included in net sales. Customer Sales Incentives The Company offers customer sales incentives, including off-invoice discounts and sales-based rebate programs, to its customers which are primarily accounted for as a reduction in sales at the time the revenue is recognized. Sales-based rebates are estimated using assumptions related to the percentage of customers who will achieve qualifying purchase goals and the level of achievement. These assumptions are based on historical experience, current year program design, current marketplace conditions and sales forecasts, including considerations of product life cycles. Cost of Goods Sold Cost of goods sold includes all costs to make products saleable, such as inbound freight, purchasing and receiving costs, inspection costs and transfer costs. In addition, all depreciation expense associated with assets used to manufacture products and make them saleable is included in cost of goods sold. Product Warranty The Company has defined warranties ranging from one to two years. Products covered by the defined warranty policies 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. Advertising and Promotion Advertising and promotional costs are included in selling, general and administrative expense on the consolidated statement of operations and include product endorsement arrangements with members of the various professional golf tours, media placement and production costs (television, print and internet), tour support expenses and point-of-sale materials. Advertising production costs are expensed as incurred. Media placement costs are expensed in the month the advertising appears. Product endorsement arrangements are expensed based upon the specific provisions of player contracts. Advertising and promotional expense was $192.7 million, $196.0 million and $203.3 million for the years ended December 31, 2017, 2016 and 2015, respectively. Selling Selling expenses including field sales, sales administration and shipping and handling costs are included in selling, general and administrative expense on the consolidated statement of operations. Shipping and handling costs included in selling expenses were $32.5 million, $32. 4 million and $3 2.6 million for the years ended December 31, 2017, 2016 and 2015, respectively. Research and Development Research and development expenses include product development, product improvement, product engineering, and process improvement costs and are expensed as incurred. Foreign Currency Translation and Transactions Assets and liabilities denominated in foreign currency are translated into U.S. dollars at the actual rates of exchange at the balance sheet date. Revenues and expenses are translated at the average rates of exchange for the reporting period. The related translation adjustments are recorded as a component of accumulated other comprehensive income (loss). Transactions denominated in a currency other than the functional currency are re-measured into functional currency with resulting transaction gains or losses recorded as selling, general and administrative expense on the consolidated statement of operations. Foreign currency transaction gain (loss) included in selling, general and administrative expense was a gain of $ 4.1 million, a gain of $ 1.2 million and a loss of $4.7 million for the years ended December 31, 2017, 2016 and 2015, respectively. Derivative Financial Instruments All derivatives are recognized as either assets or liabilities on the consolidated balance sheet and measurement of these instruments is at fair value. If the derivative is designated as a fair value hedge, the changes in the fair value of the derivative and of the hedged item attributable to the hedged risk are recognized in earnings in the same period. If the derivative is designated as a cash flow hedge, the effective portions of changes in the fair value of the derivative are recorded as a component of accumulated other comprehensive income (loss) and are recognized in the consolidated statement of operations when the hedged item affects earnings. Any portion of the change in fair value that is determined to be ineffective is immediately recognized in earnings as cost of goods sold. The Company may elect to enter into foreign exchange forwards to mitigate the change in fair value of specific assets and liabilities which do not qualify as hedging instruments under U.S. GAAP. Accordingly, 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, together with the re-measurement gain or loss from the hedged asset or liability. There were no outstanding foreign exchange forward contracts not designated under hedge accounting as of December 31, 2017 and 2016. Share-based Compensation The Company has a share-based compensation plan for employees and non-employee members of the Company's Board of Directors. All awards granted under the plan are measured at fair value at the date of the grant and amortized as expense over the requisite service period of the award, which is generally the vesting period of the respective award. The Company accounts for forfeitures in compensation expense when they occur. The Company issues share-based awards with service-based vesting conditions and performance-based vesting conditions. For awards with performance-based vesting conditions, the measurement of the expense is based on the Company’s level of achievement of the applicable cumulative Adjusted EBITDA performance metrics. Equity Appreciation Rights Plan Awards granted under the Company's Equity Appreciation Rights (“EAR”) plan were accounted for as liability-classified awards because it was a cash settled plan. The Company elected the intrinsic value method to measure its liability-classified awards and amortized share-based compensation expense for those awards expected to vest on a straight-line basis over the requisite service period. The Company re-measured the intrinsic value of the awards at the end of each reporting period. Net Income (Loss) Per Common Share Net income (loss ) per common share attributable to Acushnet Holdings Corp. is calculated under the treasury stock method. Prior to the conversion of the redeemable convertible preferred shares to common stock in connection with the Company’s initial public offering in 2016, the Company applied the two-class method to calculate its basic and diluted net income (loss) per common share attributable to Acushnet Holdings Corp., as its redeemable convertible preferred shares were participating securities. The two-class method is an earnings allocation formula that treats a participating security as having rights to earnings that otherwise would have been available to common stockholders. Net income (loss) per common share available to Acushnet Holdings Corp. was determined by allocating undistributed earnings between holders of common shares and redeemable convertible preferred shares, based on the participation rights of the preferred shares. Basic net income (loss) per share attributable to Acushnet Holdings Corp. was computed by dividing the net income (loss) available to Acushnet Holdings Corp. by the weighted-average number of common shares outstanding during the period. Diluted net income (loss) per common sh |
Allowance for Doubtful Accounts
Allowance for Doubtful Accounts | 12 Months Ended |
Dec. 31, 2017 | |
Allowance for Doubtful Accounts | |
Allowance for Doubtful Accounts | 3. Allowance for Doubtful Accounts The change to the allowance for doubtful accounts was as follows: (in thousands) 2017 2016 2015 Balance at beginning of year $ 12,255 $ 12,363 $ 8,528 Bad debt expense 337 6,507 4,771 Amount of receivables written off (3,300) (6,315) (634) Foreign currency translation 683 (300) (302) Balance at end of year $ 9,975 $ 12,255 $ 12,363 On September 14, 2016 Golfsmith International Holdings LP, one of the Company’s largest customers in the years ended December 31, 2016 and 2015, announced that its U.S.‑based business, Golfsmith International Holdings, Inc., (Golfsmith) commenced a Chapter 11 case under Title 11 of the United States Code in the United States Bankruptcy Court for the District of Delaware, and its Canada‑based business, Golf Town Canada Inc., (Golf Town) commenced creditor protection proceedings under the Companies’ Creditors Arrangement Act in the Ontario Superior Court of Justice (Commercial List). The Company’s outstanding receivable related to Golfsmith and Golf Town was reserved for in full by the time of the bankruptcy filing and as of December 31, 2016 the portion related to Golfsmith had been written off. |
Inventories
Inventories | 12 Months Ended |
Dec. 31, 2017 | |
Inventories | |
Inventories | 4. Inventories The components of inventories were as follows: (in thousands) December 31, December 31, 2017 2016 Raw materials and supplies $ 72,342 $ 55,424 Work-in-process 23,956 21,558 Finished goods 267,664 246,307 Inventories $ 363,962 $ 323,289 |
Property, Plant and Equipment,
Property, Plant and Equipment, Net | 12 Months Ended |
Dec. 31, 2017 | |
Property, Plant and Equipment, Net | |
Property, Plant and Equipment, Net | 5. Property, Plant and Equipment, Net The components of property, plant and equipment, net were as follows: December 31, December 31, (in thousands) 2017 2016 Land $ 14,618 $ 14,500 Buildings and improvements 138,570 133,844 Machinery and equipment 148,999 143,784 Furniture, computers and equipment 32,783 29,326 Computer software 60,736 58,462 Construction in progress 13,586 11,196 Property, plant and equipment, gross 409,292 391,112 Accumulated depreciation and amortization (180,370) (151,364) Property, plant and equipment, net $ 228,922 $ 239,748 During the years ended December 31, 2017, 2016 and 2015, software development costs of $ 3.1 million, $ 8.2 million and $43.0 million were capitalized, consisting of software placed into service of $2.4 million, $ 7.4 million and $40.6 million and amounts recorded in construction in progress of $ 0.7 million, $ 0.8 million and $2.4 million, respectively. Amortization expense on capitalized software development costs was $ 6.4 million, $5.8 million and $ 5.5 million for the years ended December 31, 2017, 2016 and 2015, respectively. Total depreciation and amortization expense related to property, plant and equipment was $31. 6 million, $31.5 million and $3 2.5 million for the years ended December 31, 2017, 2016 and 2015, respectively. |
Goodwill and Identifiable Intan
Goodwill and Identifiable Intangible Assets, Net | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill and Identifiable Intangible Assets, Net | |
Goodwill and Identifiable Intangible Assets, Net | 6. Goodwill and Identifiable Intangible Assets, Net Goodwill allocated to the Company's reportable segments and changes in the carrying amount of goodwill were as follows: Titleist Titleist FootJoy Titleist (in thousands) Golf Balls Golf Clubs Golf Wear Golf Gear Other Total Balances at December 31, 2015 $ 106,561 51,753 2,303 12,549 8,013 181,179 Foreign currency translation (1,139) (554) (25) (134) (86) (1,938) Balances at December 31, 2016 105,422 51,199 2,278 12,415 7,927 179,241 Foreign currency translation 3,941 1,914 85 464 296 6,700 Balances at December 31, 2017 $ 109,363 $ 53,113 $ 2,363 $ 12,879 $ 8,223 $ 185,941 The net carrying value by class of identifiable intangible assets was as follows: Weighted December 31, 2017 December 31, 2016 Average Useful Accumulated Net Book Accumulated Net Book (in thousands) Life (Years) Gross Amortization Value Gross Amortization Value Indefinite-lived: Trademarks N/A $ $ - $ $ $ - $ Amortizing: Completed Technology 13 Customer Relationships 20 Licensing Fees and Other 7 Total intangible assets $ $ $ $ $ $ During the years ended December 31, 2017, 2016 and 2015, no impairment charges were recorded to goodwill or indefinite-lived intangible assets. Amortization expense on identifiable intangible assets was $9. 3 million, $9.3 million and $9.3 million for the years ended December 31, 2017, 2016 and 2015, respectively, of which $2.7 million associated with certain licensing fees was included in cost of goods sold in each year. Amortization expense related to intangible assets as of December 31, 2017 for each of the next five fiscal years and beyond is expected to be as follows: (in thousands) Year ending December 31, 2018 $ 7,878 2019 6,269 2020 5,926 2021 2022 Thereafter Total $ 53,134 |
Product Warranty
Product Warranty | 12 Months Ended |
Dec. 31, 2017 | |
Product Warranty | |
Product Warranty | 7. Product Warranty The activity related to the Company’s warranty obligation for accrued warranty expense was as follows: Year ended December 31, (in thousands) 2017 2016 2015 Balance at beginning of period $ 3,526 $ 3,345 $ 2,989 Provision 5,801 6,200 5,399 Claims paid/costs incurred (5,653) (5,940) (4,929) Foreign currency translation 149 (79) (114) Balance at end of period $ 3,823 $ 3,526 $ 3,345 |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2017 | |
Related Party Transactions | |
Related Party Transactions | 8. Related Party Transactions Other current assets includes receivables from related parties of $0.5 million and $0.9 million as of December 31, 2017 and 2016, respectively. Prior to its initial public offering, the Company incurred interest expense payable to related parties on its outstanding convertible notes (Note 9) and bonds with common stock warrants (Note 10). The related party interest expense totaled $28.1 million and $35.4 million for the years ended December 31, 2016 and 2015, respectively. |
Debt and Financing Arrangements
Debt and Financing Arrangements | 12 Months Ended |
Dec. 31, 2017 | |
Debt and Financing Arrangements | |
Debt and Financing Arrangements | 9. Debt and Financing Arrangements The Company’s debt and capital lease obligations were as follows: December 31, December 31, (in thousands) 2017 2016 Term loan $ 351,563 $ 370,313 Delayed draw term loan A facility 95,000 - Revolving credit facility 10,066 42,495 Other short-term borrowings 10,298 - Capital lease obligations 22 491 Debt issuance costs (2,896) (3,706) Total 464,053 409,593 Less: short-term debt and current portion of long-term debt Total long-term debt and capital lease obligations $ $ The debt issuance costs of $2.9 million and $3.7 million as of December 31, 2017 and 2016, respectively relate to the term loan and delayed draw term loan A facility. Senior Secured Credit Facility On April 27, 2016, the Company entered into a senior secured credit facilities agreement arranged by Wells Fargo Bank, National Association which provides for (i) a $275.0 million multi‑currency revolving credit facility, initially including a $20.0 million letter of credit sublimit, a $25.0 million swing line sublimit, a C$25.0 million sublimit for Acushnet Canada, Inc., a £20.0 million sublimit for Acushnet Europe Limited and an alternative currency sublimit of $100.0 million for borrowings in Canadian dollars, euros, pounds sterling and Japanese yen (“revolving credit facility”), (ii) a $375.0 million term loan A facility and (iii) a $100.0 million delayed draw term loan A facility. The revolving and term loan facilities mature on July 28, 2021. On August 9, 2017, the senior secured credit facilities agreement was amended to increase the letter of credit sublimit to $25.0 million, to increase the sublimit for Acushnet Canada Inc. to C$35.0 million and to increase the sublimit for Acushnet Europe Limited to £30.0 million. The credit agreement allows for the incurrence of additional term loans or increases in the revolving credit facility in an aggregate principal amount not to exceed (i) $200.0 million plus (ii) an unlimited amount so long as the net average secured leverage ratio (as defined in the credit agreement) does not exceed 2.00:1.00 on a pro forma basis. The applicable interest rate for the Canadian borrowings under the senior secured credit facility is based on the Canadian Dollar Offered Rate (“CDOR”) plus a margin ranging from 1.25% to 2.00% depending on the Net Average Total Leverage Ratio as defined in the credit agreement. The applicable interest for the swing line sublimit is the highest of (a) Federal Funds Rate plus 0.50%, (b) the Prime Rate and (c) the one-month London Interbank Offered Rate (“LIBOR”) rate plus 1.00% plus a margin ranging from 0.25% to 1.00% depending on the Net Average Total Leverage Ratio as defined in the credit agreement. The applicable interest rate for all remaining borrowings under the senior secured credit facilities is LIBOR plus a margin ranging from 1.25% to 2.00% depending on the Net Average Total Leverage Ratio as defined in the credit agreement or the highest of (a) the Federal Funds Rate plus 0.50%, (b) the Prime Rate and (c) the one month LIBOR rate plus 1.00% plus a margin ranging from 0.25% to 1.00% depending on the Net Average Total Leverage Ratio as defined in the credit agreement. The senior secured credit facilities are secured by certain assets, including inventory, accounts receivable, fixed assets and intangible assets of the Company. Interest on borrowings under the credit agreement is payable (1) on the last day of any interest period with respect to Eurodollar borrowings with an applicable interest period of three months or less, (2) every three months with respect to Eurodollar borrowings with an interest period of greater than three months or (3) on the last business day of each March, June, September and December with respect to base rate borrowings and swing line borrowings. In addition, beginning with the date of the initial funding under the credit agreement, the Company is required to pay a commitment fee on any unutilized commitments under the revolving credit facility and the new delayed draw term loan A facility. The initial commitment fee rate is 0.30% per annum and ranges from 0.20% to 0.35% based upon a leverage‑based pricing grid. The Company is also required to pay customary letter of credit fees. The credit agreement requires the Company to prepay outstanding term loans, subject to certain exceptions, with: · 100% of the net cash proceeds of all non‑ordinary course asset sales or other dispositions of property by the Company and its restricted subsidiaries (including insurance and condemnation proceeds, subject to de minimis thresholds), (1) if the Company does not reinvest those net cash proceeds in assets to be used in its business or to make certain other permitted investments, within 12 months of the receipt of such net cash proceeds or (2) if the Company commits to reinvest such net cash proceeds within 12 months of the receipt thereof, but does not reinvest such net cash proceeds within 18 months of the receipt thereof; and · 100% of the net proceeds of any issuance or incurrence of debt by the Company or any of its restricted subsidiaries, other than debt permitted under the credit agreement. The foregoing mandatory prepayments are used to reduce the installments of principal in such order: first, to prepay outstanding loans under the term loan A facility, the delayed draw term loan A facility and any incremental term loans on a pro rata basis in direct order of maturity and second, to prepay outstanding loans under the revolving credit facility. The Company may voluntarily repay outstanding loans under the credit agreement at any time without premium or penalty, other than customary “breakage” costs with respect to Eurodollar loans. Any optional prepayment of term loans will be applied as directed by the Company. The Company is required to make principal payments on the loans under the term loan facilities in quarterly installments in aggregate annual amounts equal to (i) 5.00% of the original principal amount for the first and second year after July 28, 2016, (ii) 7.50% of the original principal amount for the third and fourth year after July 28, 2016 and (iii) 10.0% of the original principal amount for the fifth year after July 28, 2016. The remaining outstanding amount is payable on July 28, 2021, the maturity date for the term loan facilities. Principal amounts outstanding under the revolving credit facility will be due and payable in full on July 28, 2021, the maturity date for the revolving credit facility. The Company’s credit agreement was signed and became effective on April 27, 2016 and initial funding under the credit agreement occurred on July 28, 2016. The proceeds of the $375.0 million term loan A facility, borrowings of C$4.0 million (equivalent to approximately $3.0 million) under the revolving credit facility and cash on hand of $23.6 million were used to repay all amounts outstanding under the secured floating rate notes and certain former working credit facilities. The secured floating rate notes, certain former working credit facilities and the former senior revolving credit facility were terminated. During the first quarter of 2017, the Company drew down $100.0 million on the delayed draw term loan A facility and $47.8 million under the revolving credit facility to substantially fund the equity appreciation rights plan (“EAR Plan”) payout (Note 17). The interest rate applicable to the term loan and delayed draw term loan A facility as of December 31, 2017 was 3.32% and the interest rate applicable to the term loan as of December 31, 2016 was 2.27 %. There were outstanding borrowings under the revolving credit facility of $10.1 million and $42.5 million as of December 31, 2017 and 2016, respectively. The weighted average interest rate applicable to the outstanding borrowings was 4.44% and 2.48 % as of December 31, 2017 and 2016, respectively. A change of control is an event of default under the credit agreement which could result in the acceleration of all outstanding indebtedness and the termination of all commitments under the credit agreement and would allow the lenders under the credit agreement to enforce their rights with respect to the collateral granted. A change of control occurs if any person (other than certain permitted parties, including Fila Korea) becomes the beneficial owner of 35% or more of the outstanding common stock of the Company. On September 22, 2017, Magnus entered into a loan agreement (the “New Magnus Loan Agreement”) with certain Korean financial institutions (the “New Magnus Lenders”) which provides for (i) three year term loans in an aggregate amount of Korean Won 399.2 billion (equivalent to approximately $373.7 million, using an exchange rate of $1.00 = Korean Won 1,068.27 as of December 31, 2017) (the “New Magnus Term Loans”) and (ii) a revolving credit loan of Korean Won 10.0 billion (equivalent to approximately $9.4 million, using an exchange rate of $1.00 = Korean Won 1,068.27 as of December 31, 2017) (the “New Magnus Revolving Loan” and, together with the New Magnus Term Loans, the “New Magnus Loans”). The New Magnus Loans are secured by a pledge on all of our common stock owned by Magnus, which consists of 39,345,151 shares (the “Magnus Shares”), or 52.6% of our outstanding common stock. Under the New Magnus Loan Agreement, Magnus is required to maintain a specified Loan-to-Value ratio (“LTV Ratio”). If the LTV Ratio exceeds 75%, Magnus will be in breach of the New Magnus Loan agreement. If Magnus does not cure the breach in 60 days, the lenders will have a right to accelerate the maturity of the New Magnus Loan. If Magnus fails to pay the amount due on the New Magnus Loan at maturity or upon acceleration, the lenders can foreclose on the pledged shares of the Company’s common stock, which may result in the sale of up to 52.6% of the Company’s common stock. The credit agreement contains a number of covenants that, among other things, restrict the ability of the U.S. Borrower and its restricted subsidiaries to (subject to certain exceptions), incur, assume, or permit to exist additional indebtedness or guarantees; incur liens; make investments and loans; pay dividends, make payments, or redeem or repurchase capital stock or make prepayments, repurchases or redemptions of certain indebtedness; engage in mergers, liquidations, dissolutions, asset sales, and other dispositions (including sale leaseback transactions); amend or otherwise alter terms of certain indebtedness or certain other agreements; enter into agreements limiting subsidiary distributions or containing negative pledge clauses; engage in certain transactions with affiliates; alter the nature of the business that we conduct or change our fiscal year or accounting practices. Certain exceptions to these covenants are determined based on ratios that are calculated in part using the calculation of Adjusted EBITDA. The credit agreement covenants also restrict the ability of Acushnet Holdings Corp. to engage in certain mergers or consolidations or engage in any activities other than permitted activities. The Company’s credit agreement contains certain customary affirmative and restrictive covenants, including, among others, financial covenants based on the Company’s leverage and interest coverage ratios. The credit agreement includes customary events of default, the occurrence of which, following any applicable cure period, would permit the lenders to, among other things, declare the principal, accrued interest and other obligations to be immediately due and payable. As of December 31, 2017, the Company was in compliance with all covenants under the credit agreement. As of December 31, 2017, the Company had available borrowings under its revolving credit facility of $254.8 million after giving effect to $10.2 million of outstanding letters of credit. Convertible Notes Prior to the initial public offering, the Company had outstanding convertible notes with an aggregate principal amount of $362.5 million. All outstanding convertible notes were converted into common stock in conjunction with the Company’s initial public offering (Note 2). Upon conversion, all accrued but unpaid interest on the principal of the convertible notes was paid to each holder of the convertible notes. The Company recorded interest expense related to the convertible notes of $22.6 million and $27.2 million during the year ended December 31, 2016 and 2015, respectively. Secured Floating Rate Notes On July 28, 2016, outstanding borrowings under the secured floating rate notes of $375.0 million were repaid in full using the proceeds from the senior secured credit facility and the secured floating rate notes were terminated. Senior Revolving and Term Loan Facilities As of June 30, 2016, the Company had repaid all amounts outstanding under the senior revolving and term loan facilities and the facilities were terminated. Other Short-Term Borrowings The Company has certain unsecured facilities available through its subsidiary locations. As of December 31, 2017, the Company had available borrowings under its unsecured facilities of $53.8 million after giving effect to $10.3 million of outstanding borrowings. The weighted average interest rate applicable to the outstanding borrowings was 0.73%. Letters of Credit As of December 31, 2017 and 2016, there were outstanding letters of credit totaling $ 14.3 million and $11.6 million, respectively, of which $11.2 million and $8.6 million was secured, respectively, related to agreements which provided a maximum commitment for letters of credit of $29.2 million and $24.0 million, respectively. Payments of Debt Obligations due by Period As of December 31, 2017, principal payments due on outstanding long-term debt obligations, excluding capital leases, were as follows: (in thousands) Year ending December 31, 2018 $ 2019 2020 2021 2022 - Thereafter - Total $ |
Derivative Financial Instrument
Derivative Financial Instruments | 12 Months Ended |
Dec. 31, 2017 | |
Derivative Financial Instruments | |
Derivative Financial Instruments | 10. Derivative Financial Instruments Bonds with Common Stock Warrants Prior to the exercise of the final annual call option by Fila Korea in July 2016, the Company had outstanding bonds with common stock warrants for the purchase of the Company’s common stock at an exercise price of $11.11 per share. The Company classified the warrants to purchase common stock as a liability on its consolidated balance sheet as the warrants were free‑standing financial instruments that could result in the issuance of a variable number of the Company’s common shares. The warrants were initially recorded at fair value on grant date, and were subsequently re‑measured to fair value at each reporting date (Note 11). Changes in the fair value of the common stock warrants were recognized as other (income) expense, net on the consolidated statement of operations (Note 14). In July 2016 and 2015, Fila Korea exercised its annual call option to purchase common stock warrants held by the holders of the bonds and exercised such warrants at the exercise price of $11.11 per share, or $34.5 million in the aggregate in each year. The Company used the proceeds received from Fila Korea’s exercise of the common stock warrants to redeem the outstanding bonds payable. Foreign Exchange Derivative Instruments The Company principally uses financial instruments to reduce the impact of changes in foreign currency exchange rates. The principal derivative financial instruments the Company enters into are foreign exchange forward contracts. The Company does not enter into foreign exchange forward contracts for trading or speculative purposes. Foreign exchange forward contracts are primarily used to hedge purchases denominated in select foreign currencies, thereby limiting currency risk that would otherwise result from changes in exchange rates. The periods of the foreign exchange forward contracts correspond to the periods of the 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 December 31, 2017 and 2016 was $278.9 million and $371.2 million, respectively. The counterparties to derivative contracts are major financial institutions. The credit risk of counterparties does not have a significant impact on the valuation of the Company’s derivative instruments. The fair values of foreign exchange hedges on the consolidated balance sheets were as follows: Balance Sheet December 31, December 31, (in thousands) Location 2017 2016 Asset derivatives Other current assets $ 4,675 $ 11,357 Other noncurrent assets 562 5,286 Liability derivatives Other current liabilities Other noncurrent liabilities The effect of foreign exchange hedges on accumulated other comprehensive income (loss) and the consolidated statements of operations was as follows: Gain (Loss) Recognized in Other Comprehensive Income (Loss) Year ended December 31, (in thousands) 2017 2016 2015 Type of hedge Cash flow $ (15,558) $ 7,014 $ 14,964 $ (15,558) $ 7,014 $ 14,964 Gain (Loss) Recognized in Statement of Operations Year ended December 31, (in thousands) 2017 2016 2015 Location of gain (loss) in statement of operations Cost of goods sold $ 1,329 $ 5,194 $ 26,805 Selling, general and administrative expense (2,732) (917) 3,733 $ (1,403) $ 4,277 $ 30,538 Gains and losses on derivatives designated as cash flow hedges are reclassified from other comprehensive income (loss) to cost of goods sold at the time that the forecasted transaction impacts the income statement. Based on the current valuation, the Company expects to reclassify a net loss of $2.1 million from accumulated other comprehensive income (loss) into cost of goods sold during the next 12 months . |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Measurements | |
Fair Value Measurements | 11. Fair Value Measurements Assets and liabilities measured at fair value on a recurring basis were as follows: Fair Value Measurements as of December 31, 2017 using: (in thousands) Level 1 Level 2 Level 3 Balance Sheet Location Assets Rabbi trust $ $ - $ - Other current assets Foreign exchange derivative instruments - - Other current assets Deferred compensation program assets - - Other noncurrent assets Foreign exchange derivative instruments - - Other noncurrent assets Total assets $ $ $ - Liabilities Foreign exchange derivative instruments $ - $ $ - Other current liabilities Deferred compensation program liabilities - - Other noncurrent liabilities Foreign exchange derivative instruments - - Other noncurrent liabilities Total liabilities $ $ $ - Fair Value Measurements as of December 31, 2016 using: (in thousands) Level 1 Level 2 Level 3 Balance Sheet Location Assets Rabbi trust $ $ - $ - Other current assets Foreign exchange derivative instruments - - Other current assets Rabbi trust - - Other noncurrent assets Deferred compensation program assets - - Other noncurrent assets Foreign exchange derivative instruments - - Other noncurrent assets Total assets $ $ $ - Liabilities Foreign exchange derivative instruments $ - $ $ - Other current liabilities Deferred compensation program liabilities - - Other noncurrent liabilities Foreign exchange derivative instruments - - Other noncurrent liabilities Total liabilities $ $ $ - During the years ended December 31, 2017 and 2016, there were no transfers between Level 1, Level 2 and Level 3. 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 can 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 forward exchange forward contracts primarily used to hedge currency fluctuations for transactions denominated in a foreign currency (Note 10). 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. Prior to the exercise of the final tranche of common stock warrants in 2016, the Company categorized the related derivative liability as Level 3 as there were significant unobservable inputs used in the underlying valuations. The common stock warrants were valued using the contingent claims methodology. The change in the Level 3 fair value measurements was as follows: December 31, (in thousands) 2016 Balance at beginning of year $ Common stock warrant exercise Total losses included in earnings Balance at end of year $ - |
Pension and Other Postretiremen
Pension and Other Postretirement Benefits | 12 Months Ended |
Dec. 31, 2017 | |
Pension and Other Postretirement Benefits | |
Pension and Other Postretirement Benefits | 12. Pension and Other Postretirement Benefits The Company has various pension and post-employment plans which provide for payment of retirement benefits, mainly commencing between the ages of 50 and 65, and for payment of certain disability benefits. After meeting certain qualifications, an employee acquires a vested right to future benefits. The benefits payable under the plans are generally determined on the basis of an employee's length of service and/or earnings. Employer contributions to the plans are made, as necessary, to ensure legal funding requirements are satisfied. The Company may make contributions in excess of the legal funding requirements. On November 13, 2015, the Company amended the US pension plan and supplemental executive retirement plan (“SERP”) by closing the plans to newly-hired full-time employees who had not yet satisfied the one year service requirement as of January 1, 2016, freezing the accrual of additional benefits on participants who have not attained age 50 with at least 10 years of vesting service, or whose age plus vesting service is less than 70, and shifting benefits for participants who have continued to accrue benefits from the pension plan to the SERP once a cap of $150,000 has been reached. The plans were re-measured in accordance with ASC 715 resulting in a curtailment gain of $2.4 million during the year ended December 31, 2015. The Company provides postretirement healthcare benefits to certain retirees. Many employees and retirees outside of the United States are covered by government sponsored healthcare programs. The following tables present the change in benefit obligation, change in plan assets, and funded status for the Company's defined benefit and postretirement benefit plans for the years ended December 31, 2017 and 2016: Pension Pension Benefits Benefits Postretirement (in thousands) (Underfunded) (Overfunded) Benefits Change in projected benefit obligation ("PBO") Benefit obligation at December 31, 2016 $ 284,104 $ 39,735 $ 20,264 Service cost - 955 Interest cost 1,049 713 Actuarial (gain) loss (2,000) (5,075) Settlements (5,172) - Participants’ contributions - - 355 Benefit payments (2,719) (635) (1,160) Foreign currency translation 2,659 - Adjustment for movement from underfunded to overfunded (168) - Projected benefit obligation at December 31, 2017 35,468 16,052 Accumulated benefit obligation at December 31, 2017 34,190 16,052 Change in plan assets Fair value of plan assets at December 31, 2016 45,342 - Return on plan assets 6,254 - Employer contributions 1,697 805 Participants’ contributions - - 355 Settlements (20,663) (5,172) - Benefit payments (2,719) (635) (1,160) Adjustment for movement from underfunded to overfunded (194) - Foreign currency translation 3,475 - Fair value of plan assets at December 31, 2017 50,767 - Funded status (fair value of plan assets less PBO) $ $ 15,299 $ (16,052) Pension Pension Benefits Benefits Postretirement (in thousands) (Underfunded) (Overfunded) Benefits Change in projected benefit obligation Benefit obligation at December 31, 2015 $ $ $ Service cost Interest cost Actuarial (gain) loss Settlements - - Plan amendments - - Participants’ contributions - - Benefit payments Foreign currency translation (6,932) - Adjustment for movement from underfunded to overfunded 210 - Projected benefit obligation at December 31, 2016 Accumulated benefit obligation at December 31, 2016 Change in plan assets Fair value of plan assets at December 31, 2015 - Return on plan assets - Employer contributions Participants’ contributions - - Settlements - - Benefit payments Foreign currency translation - Fair value of plan assets at December 31, 2016 - Funded status (fair value of plan assets less PBO) $ $ $ The amount of pension and postretirement assets and liabilities recognized on the consolidated balance sheets were as follows: Pension Benefits Postretirement Benefits (in thousands) 2017 2016 2017 2016 Other noncurrent assets $ $ $ - $ - Accrued compensation and benefits Accrued pension and postretirement benefits Net amount recognized $ $ $ $ The amounts in accumulated other comprehensive income (loss) on the consolidated balance sheets that have not yet been recognized as components of net periodic benefit cost were as follows: Pension Benefits Postretirement Benefits Year ended December 31, Year ended December 31, (in thousands) 2017 2016 2015 2017 2016 2015 Net actuarial (gain) loss at beginning of year $ $ $ $ $ $ Current year actuarial (gain) loss Amortization of actuarial (gain) loss Curtailment impact - - - - - Settlement impact - - - - Prior service cost - - - - Amortization of prior service cost (credit) Foreign currency translation - - - Net actuarial (gain) loss at end of year $ $ $ $ $ $ The expected prior service cost (credit) that will be amortized from accumulated other comprehensive income (loss) into net periodic benefit cost in the next fiscal year is a cost of $0.2 million for the pension plans and a credit of $0.1 million for the postretirement plans. The expected actuarial (gain) loss that will be amortized from accumulated other comprehensive income (loss) into net periodic benefit cost in the next fiscal year is a loss of $2.1 million for the pension plans and a gain of $1. 4 million for the postretirement plans. Components of net periodic benefit cost were as follows: Pension Benefits Postretirement Benefits Year ended December 31, (in thousands) 2017 2016 2015 2017 2016 2015 Components of net periodic benefit cost Service cost $ $ $ $ $ $ Interest cost Expected return on plan assets - - - Curtailment income - - - - - Settlement expense - - - - Amortization of net (gain) loss Amortization of prior service cost (credit) Net periodic benefit cost $ $ $ $ $ $ The weighted average assumptions used to determine benefit obligations at December 31, 2017 and 2016 were as follows: Pension Benefits Postretirement Benefits 2017 2016 2017 2016 Discount rate Rate of compensation increase N/A N/A The weighted average assumptions used to determine net periodic benefit cost for the years ended December 31, 2017, 2016 and 2015 were as follows: Pension Benefits Postretirement Benefits 2017 2016 2015 2017 2016 2015 Discount rate Expected long-term rate of return on plan assets N/A N/A N/A Rate of compensation increase N/A N/A N/A The assumed healthcare cost trend rates used to determine benefit obligations and net periodic benefit cost as of and for the years ended December 31 2017, 2016 and 2015 were as follows: Postretirement Benefits Medical and Prescription Drug 2017 2016 2015 Healthcare cost trend rate assumed for next year 5.5%/8.5% 5.50%/9.00% 5.75/10.00% Rate that the cost trend rate is assumed to decline Year that the rate reaches the ultimate trend rate Assumed healthcare cost trend rates have a significant effect on the amounts reported for the healthcare plans. A one-percentage-point change in assumed healthcare cost trend rates would have the following effects: 2017 2016 One-Percentage One-Percentage One-Percentage One-Percentage (in thousands) Point Increase Point Decrease Point Increase Point Decrease Effect on total of service and interest cost $ 73 $ (65) $ 104 $ (91) Effect on postretirement benefit obligation 665 (598) 894 (796) Plan Assets Pension assets by major category of plan assets and the type of fair value measurement as of December 31, 2017 were as follows: Pension Benefits – Plan Assets Quoted Prices in Significant Significant Active Markets for Observable Unobservable Identical Assets Inputs Inputs (in thousands) Total (Level 1) (Level 2) (Level 3) Asset category Individual securities Fixed income $ $ - $ $ - Commingled funds Measured at net asset value - - - $ $ - $ $ - Pension assets by major category of plan assets and the type of fair value measurement as of December 31, 2016 were as follows: Pension Benefits – Plan Assets Quoted Prices in Significant Significant Active Markets for Observable Unobservable Identical Assets Inputs Inputs (in thousands) Total (Level 1) (Level 2) (Level 3) Asset category Individual securities Fixed income $ $ - $ $ - Commingled funds Measured at net asset value - - - $ $ - $ $ - Pension assets include fixed income securities and commingled funds. Fixed income securities are valued at daily closing prices or institutional mid-evaluation prices provided by independent industry-recognized pricing sources. Commingled funds are not traded in active markets with quoted prices and as a result, are valued using the net asset values provided by the administrator of the fund. The investments underlying the net asset values are based on quoted prices traded in active markets. In accordance with ASU 2015-07, “Fair Value Measurement: Disclosures for Investments in Certain Entities that Calculate Net Asset Value per Share (or Its Equivalent)”, the Company has elected the practical expedient to exclude assets measured at net asset value from the fair value hierarchy. The Company's investment strategy is to optimize investment returns through a diversified portfolio of investments, taking into consideration underlying plan liabilities and asset volatility. Asset allocations are based on the underlying liability structure and local regulations. All retirement asset allocations are reviewed periodically to ensure the allocation meets the needs of the liability structure. Master trusts were established to hold the assets of the Company's U.S. defined benefit plans. During the years ended December 31, 2017 and 2016, the U.S. defined benefit plan asset allocation of these trusts targeted a return-seeking investment allocation of 64% to 76% and a liability-hedging investment allocation of 24% to 36%. Return-seeking investments include equities, real estate, high yield bonds and other instruments. Liability-hedging investments include assets such as corporate and government fixed income securities. The Company's future expected blended long-term rate of return on plan assets of 5.77% is determined based on long-term historical performance of plan assets, current asset allocation, and projected long-term rates of return. Estimated Contributions The Company expects to make pension contributions of approximately $40.9 million during 2018 based on current assumptions as of December 31, 2017. Estimated Future Retirement Benefit Payments The following retirement benefit payments, which reflect expected future service, are expected to be paid as follows: Pension Postretirement (in thousands) Benefits Benefits Year ending December 31, 2018 $ 36,506 $ 748 2019 20,544 828 2020 22,103 943 2021 23,751 1,078 2022 24,511 1,214 Thereafter 138,204 7,096 $ 265,619 $ 11,907 The estimated future retirement benefit payments noted above are estimates and could change significantly based on differences between actuarial assumptions and actual events and decisions related to lump sum distribution options that are available to participants in certain plans. International Plans Pension coverage for employees of the Company's international subsidiaries is provided, to the extent deemed appropriate, through separate defined benefit plans. The international pension plans are included in the tables above. As of December 31, 2017 and 2016, the defined benefit plans had total projected benefit obligations of $53.6 million and $54.4 million, respectively, and fair values of plan assets of $53.6 million and $47.6 million, respectively. The majority of the plan assets are invested in equity securities. The pension expense related to these plans was $0.9 million, $1.0 million and $0.9 million for the years ended December 31, 2017, 2016 and 2015, respectively. The expected actuarial loss that will be amortized from accumulated other comprehensive income (loss) into net periodic benefit cost in the next fiscal year is less than $0.1 million. Defined Contribution Plans The Company sponsors a number of defined contribution plans. Contributions are determined under various formulas. Cash contributions related to these plans amounted to $13.8 million, $13 .0 million and $9.4 million for the years ended December 31, 2017, 2016 and 2015, respectively. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2017 | |
Income Taxes | |
Income Taxes | 13. Income Taxes On December 22, 2017, the U.S. enacted tax reform legislation, commonly referred to as the U.S. Tax Cuts and Jobs Act of 2017 (the “2017 Tax Act”). The 2017 Tax Act reduces the U.S. federal corporate tax rate from 35% to 21%, requires companies to pay a one-time transition tax on earnings of certain foreign subsidiaries that were previously tax deferred, and creates new taxes on certain foreign sourced earnings. On December 22, 2017, the Securities and Exchange Commission issued guidance under Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act (“SAB 118”) directing taxpayers to consider the impact of the U.S. legislation as “provisional” when it does not have the necessary information available, prepared or analyzed (including computations) in reasonable detail to complete its accounting for the change in tax law. At December 31, 2017, the Company has not finalized the accounting for the Federal and State tax effects of enactment of the Act; however, as described below, the Company has made a reasonable estimate of the effects on its existing deferred tax balances and the one-time transition tax. The Company recognized a provisional amount of $14.0 million as a reasonable estimate of the impact of the provisions of the 2017 Tax Act, which is included as a component of income tax expense from continuing operations. In all cases, the Company will continue to make and refine its calculations as additional analysis is completed. In addition, the estimates may also be affected as the Company gains a more thorough understanding of the new tax law as incremental guidance becomes available. Provisional amounts Deferred tax assets and liabilities : The Company remeasured its U.S. deferred tax assets and liabilities based upon the rates at which they are expected to reverse in the future, which is generally 21%. However, the Company is still analyzing certain aspects of the 2017 Tax Act and refining its calculations, which could potentially affect the measurement of these balances or potentially give rise to changes in deferred tax amounts. As the Company continues to analyze the 2017 Tax Act and refine its calculations it could give rise to changes in the assessment of the realizability of certain deferred tax assets, including foreign tax credit carryforwards. The provisional tax expense amount recorded related to the remeasurement of the Company’s deferred tax balances was $10.2 million. Foreign tax effects : The one-time transition tax is based on the Company’s total unremitted post-1986 earnings and profits (E&P). The Company recorded a provisional increase to income tax expense of $8.6 million for the one-time transition tax liability for its foreign subsidiaries. This increase included tax on foreign income of $23.8 million, partially offset by a related benefit of foreign tax credits of $15.2 million. As the Company has sufficient existing tax attributes available to fully offset the transition tax liability there will be no cash tax impact to the Company. The Company has not yet completed its calculation of the total post-1986 E&P for its foreign subsidiaries or the tax pools of the foreign subsidiaries. Further, the transition tax is based in part on the amount of those earnings held in cash and other specified assets. This amount may change when the Company finalizes the calculation of post-1986 foreign E&P and finalizes the amounts held in cash or other specified assets. The Company has determined that its undistributed earnings for most of its foreign subsidiaries are not permanently reinvested. The change in the tax law impacted the Company’s deferred taxes provided on unremitted earnings. The Company had previously recorded a $4.8 million deferred tax liability on those unremitted foreign earnings, which were taxed in the current year as part of the transition tax. The Company does not believe that any additional outside basis differences exist as of December 31, 2017, however, determining the amount of unrecognized deferred tax liability related to any remaining undistributed foreign earnings not subject to the transition tax (i.e., basis difference in excess of that subject to the one-time transition tax) is not currently estimable. The Company has provided for withholding taxes on all unremitted earnings, as required. The components of income before income taxes were as follows: Year ended December 31, (in thousands) 2017 2016 2015 Domestic operations $ 61,158 $ (3,995) $ (48,544) Foreign operations 90,518 93,217 80,694 Income before income taxes $ 151,676 $ 89,222 $ 32,150 Amounts reflected for 2016 and 2015 have been reclassified for consistency of presentation with 2017 amounts. The following table represents a reconciliation of income taxes at the 35% federal statutory income tax rate to income tax expense as reported: Year ended December 31, (in thousands) 2017 2016 2015 Income tax expense computed at federal statutory income tax rate $ 53,086 $ 31,229 $ 11,252 Foreign taxes, net of credits (15,545) (1,804) 418 Transition tax (net of federal tax credits generated) 8,593 - - US rate change related to the 2017 Tax Act 10,198 - - Net adjustments for uncertain tax positions 508 706 4,731 State and local taxes 2,031 (525) (1,108) Equity appreciation rights (765) 372 693 Transaction costs 189 3,078 414 Indemnified taxes (115) 1,594 (1,106) Fair value adjustment for common stock warrants — 3,029 10,853 Valuation allowance (219) 955 7,872 Deferred charge (1,295) 1,009 807 Tax credits (3,240) (704) (7,003) Miscellaneous other, net 1,630 768 171 Income tax expense as reported $ 55,056 $ 39,707 $ Effective income tax rate 36.3 % 44.5 % 87.1 % The Company's unrecognized tax benefits represent tax positions for which reserves have been established. The following table represents a reconciliation of the activity related to the unrecognized tax benefits, excluding accrued interest and penalties: (in thousands) 2017 2016 2015 Unrecognized tax benefits at beginning of year $ $ $ Gross additions - prior year tax positions - Gross additions - current year tax positions Gross reductions - prior year tax positions Gross reductions - Acquired tax positions settled with tax authorities - - Impact of change in foreign exchange rates Unrecognized tax benefits at end of year $ $ $ As of December 31, 2017, 2016 and 2015, the unrecognized tax benefits of $ 11.0 million, $11.3 million and $ 13.1 million, respectively, would affect the Company's future effective tax rate if recognized. The Company does not anticipate a material change in unrecognized tax benefits within the next 12 months. As of December 31, 2017, 2016 and 2015, the Company had unrecognized tax benefits included in the amounts above of $4.9 million, $5.9 million and $4.2 million, respectively, related to periods prior to the Company's acquisition of Acushnet Company and as such, are indemnified by Beam. As of December 31, 2017, 2016 and 2015, the Company recognized a liability of $2.7 million, $2.3 million and $1.9 million, respectively for interest and penalties, of which $2.7 million, $1. 8 million and $1.6 million is indemnified by Beam. Prior to the Company's acquisition of Acushnet Company, Acushnet Company or its subsidiaries filed certain combined tax returns with Beam. Those and other subsidiaries' income tax returns are periodically examined by various tax authorities. Beam is responsible for managing United States tax audits related to periods prior to July 29, 2011. Acushnet Company is obligated to support these audits and is responsible for managing all non-U.S. audits. The Company and certain subsidiaries have tax years that remain open and are subject to examination by tax authorities in the following major taxing jurisdictions: United States for years after July 29, 2011, Canada for years after 2012, Japan for years after 2011, Korea for years after 2016, and the United Kingdom for years after 2015. The Company files income tax returns on a combined, unitary, or stand-alone basis in multiple state and local jurisdictions, which generally have statute of limitations from three to four years. Various states and local income tax returns are currently in the process of examination. These examinations are unlikely to result in any significant changes to the amounts of unrecognized tax benefits on the consolidated balance sheet as of December 31, 2017. The Company's income tax expense includes tax expense of $0.2 million, $2.2 million and $3.0 million for the years ended December 31, 2017, 2016 and 2015, respectively, related to the tax obligations indemnified by Beam. There is an offsetting amount included in other (income) expense, net for the related adjustment to the Beam indemnification asset, resulting in no effect on net income. Income tax expense was as follows: Year ended December 31, (in thousands) 2017 2016 2015 Current expense (benefit) United States $ (906) $ 3,702 $ 5,455 Foreign 28,109 28,156 20,351 Current income tax expense (benefit) 27,203 31,858 25,806 Deferred expense (benefit) United States 27,770 9,489 (152) Foreign 83 (1,640) 2,340 Deferred income tax expense (benefit) 27,853 7,849 2,188 Total income tax expense $ 55,056 $ 39,707 $ 27,994 The components of net deferred tax assets (liabilities) were as follows: December 31, (in thousands) 2017 2016 Deferred tax assets Compensation and benefits $ 14,060 $ 22,053 Share-based compensation Equity appreciation rights - 57,146 Pension and other postretirement benefits 30,564 45,926 Inventories 10,843 9,120 Accounts receivable 2,016 2,942 Customer sales incentives 2,255 3,254 Transaction costs 1,804 3,157 Other reserves 3,255 5,764 Interest 562 2,260 Miscellaneous 1,224 1,076 Foreign exchange derivative instruments - Net operating loss and other tax carryforwards 103,455 55,936 Gross deferred tax assets 175,853 214,108 Valuation allowance (25,887) (21,726) Total deferred tax assets 149,966 192,382 Deferred tax liabilities Property, plant and equipment (11,325) (17,496) Identifiable intangible assets (36,687) (46,701) Foreign exchange derivative instruments - (4,076) Miscellaneous (954) (1,145) Total deferred tax liabilities Net deferred tax asset $ $ Under U.S. tax law and regulations, certain changes in the ownership of the Company’s shares can limit the annual utilization of tax attributes (tax loss and tax credit carryforwards) that were generated prior to such ownership changes. The annual limitation could affect the realizability of the Company’s deferred tax assets recorded in the financial statement for its tax credit carryforwards because the carryforward periods have a finite duration. The 2016 Initial Public Offering, and associated share transfers, resulted in significant changes in the composition of the ownership of the Company’s shares. Based on its analysis of the change of ownership tax rules in conjunction with the estimated amount and source of its future earnings and related tax profile, the Company believes its existing tax attributes will be utilized prior to their expiration. As of December 31, 2017 and 2016, the Company had state net operating loss (“NOL”) carryforwards of $192.0 million and $117.2 million, respectively. These NOL carryforwards expire between 2018 and 2035. As of December 31, 2017 the Company had US Federal net operating loss (“NOL”) carryforwards of $26.4 million which will expire in 2037. As of December 31, 2017 and 2016, the Company had foreign tax credit carryforwards of $72.8 million and $46.0 million, respectively. These foreign tax credits will begin to expire in 2022. Changes in the valuation allowance for deferred tax assets were as follows: Year ended December 31, (in thousands) 2017 2016 2015 Valuation allowance at beginning of year $ $ $ Increases (decreases) recorded to income tax provision Valuation allowance at end of year $ $ $ The changes in the valuation allowance were related to the increase in the U.S. state deferred tax assets and deferred tax assets in the Company’s Hong Kong subsidiary that the Company has determined are not more-likely-than-not realizable. In assessing the realizability of these assets, the Company considered numerous factors including historical profitability, the character and estimated future taxable income, prudent and feasible tax planning strategies, and the industry in which it operates. The utilization of the Company's net U.S. state and Hong Kong deferred tax assets is dependent on future taxable earnings, which cannot be projected with certainty at this time. |
Interest Expense and Other (Inc
Interest Expense and Other (Income) Expense, Net | 12 Months Ended |
Dec. 31, 2017 | |
Interest Expense and Other (Income) Expense, Net | |
Interest Expense and Other (Income) Expense, Net | 14. Interest Expense and Other (Income) Expense, Net The components of interest expense, net were as follows: Year ended December 31, (in thousands) 2017 2016 2015 Interest expense - related party $ — $ 28,146 $ 35,420 Interest expense - third party 16,907 23,113 26,567 Interest income - third party Total interest expense, net $ $ $ The components of other (income) expense, net were as follows: Year ended December 31, (in thousands) 2017 2016 2015 Loss on fair value of common stock warrants $ — $ 6,112 $ 28,364 Indemnification (gains) losses 177 (2,174) (3,007) Other gains (1,254) (2,232) (218) Total other (income) expense, net $ (1,077) $ 1,706 $ 25,139 |
Redeemable Convertible Preferre
Redeemable Convertible Preferred Stock | 12 Months Ended |
Dec. 31, 2017 | |
Redeemable Convertible Preferred Stock [Abstract] | |
Redeemable Convertible Preferred Stock | 15. Redeemable Convertible Preferred Stock Prior to the initial public offering, the Company had outstanding 1,838,027 shares of $0.001 par value Series A preferred stock. Given that certain redemption features of the Series A preferred stock were not solely within the control of the Company, the Series A preferred stock was classified outside of stockholders' equity. All outstanding Series A preferred stock were converted into common stock in conjunction with the Company’s initial public offering (Note 2). Upon conversion, all accrued but unpaid dividends on the shares of the Series A preferred stock were paid to each holder of the shares of the Series A preferred stock. The Company declared and paid dividends to the holders of the Series A preferred stock of $17.3 million and $13.7 million during the years ended December 31, 2016 and 2015, respectively. Shares of Series A preferred stock that are redeemed or converted were canceled and retired and cannot be reissued by the Company. |
Common Stock
Common Stock | 12 Months Ended |
Dec. 31, 2017 | |
Common Stock. | |
Common Stock | 16. Common Stock As of December 31, 2017 and 2016, the Company's certificate of incorporation, as amended and restated, authorized the Company to issue 500,000,000 shares of $0.001 par value common stock. Each share of common stock entitles the holder to one vote on all matters submitted to a vote of the Company's shareholders. Common shareholders are entitled to receive dividends whenever funds are legally available and when declared by the board of directors, subject to the prior rights of holders of all classes of stock outstanding. The Company declared dividends per share during the periods presented as follows: Dividends per Share Amounts 2017: Fourth Quarter $ 0.12 $ 9,098 Third Quarter 0.12 9,146 Second Quarter 0.12 9,149 First Quarter 0.12 9,152 Total dividends declared $ 0.48 $ 36,545 During the first quarter of 2018, the board of directors declared a dividend of $0.13 per share to shareholders on record as of March 19, 2018 and payable on March 29, 2018 . |
Equity Incentive Plans
Equity Incentive Plans | 12 Months Ended |
Dec. 31, 2017 | |
Equity Incentive Plans | |
Equity Incentive Plans | 17. Equity Incentive Plans Restricted Stock and Performance Stock Units On January 22, 2016, the Company’s board of directors adopted the Acushnet Holdings Corp. 2015 Omnibus Incentive Plan (“2015 Plan”) pursuant to which the Company may grant stock options, stock appreciation rights, restricted shares of common stock, 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. The 2015 Plan is administered by the compensation committee (the “Administrator”). The Administrator has the authority to establish the terms and conditions of any award issued or granted under the 2015 Plan. Each share issued with respect to RSUs and PSUs granted under the 2015 Plan reduces the number of shares available for grant. RSUs and PSUs forfeited and shares withheld to satisfy tax withholding obligations increase the number of shares available for grant. All RSUs and PSUs granted under the 2015 Plan have dividend equivalent rights (“DERs”), which entitle holders of RSUs and PSUs to the same dividend value per share as holders of 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 vest. As of December 31, 2017, there were 7,804,279 remaining shares of common stock reserved for issuance under the 2015 Plan of which 4,557,513 remain available for future grants. A summary of the Company’s RSUs and PSUs as of December 31, 2017 and 2016 and changes during the years then ended is presented below: Weighted- Number Average of Fair RSUs and PSUs Value Outstanding at December 31, 2015 — $ — Granted 2,459,166 20.40 Outstanding at December 31, 2016 $ 20.40 Granted 18.82 Vested (437,188) 20.33 Forfeited (199,320) 20.45 Outstanding at December 31, 2017 2,060,854 $ 20.23 During 2017, RSUs settled resulting in the issuance of 437,188 shares of common stock, of which 51,467 shares of common stock were delivered to the Company as payment by employees in lieu of cash to satisfy tax withholding obligations. As of December 31, 2017 no PSUs have vested. The aggregate fair value of RSUs vesting during the year ended December 31, 2017 was $7.7 million. The Company’s board of directors in accordance with the 2015 Plan have granted RSUs and PSUs to certain key members of management. RSUs vest in accordance with the terms of the grant subject to the employee’s continued employment with the Company. The PSUs cliff‑vest on December 31, 2018, subject to the employee’s continued employment with the Company and the Company’s level of achievement of the applicable cumulative Adjusted EBITDA performance metrics (as defined in the applicable award agreements) measured over the three-year performance period. Each PSU reflects the right to receive between 0% and 200% of the target number of shares based on the actual three-year cumulative Adjusted EBITDA. The determination of the target value gave consideration to executive performance, potential future contributions and peer group analysis. The Company’s board of directors in accordance with the 2015 Plan have approved grants of RSUs to members of the board of directors. The remaining grants vest on the earlier of June 12, 2018 or the next annual stockholders’ meeting, subject to continued service on the board of directors through the vesting date. In September of 2017, the Company announced its Chief Operating Officer (“COO”) would succeed the current President and Chief Executive Officer effective January 1, 2018, and in conjunction with this succession, the current COO received an equity grant. The equity grant has a grant date fair value of $3.0 million, which will vest one third on each of the first three anniversaries of the grant date. The expense associated with this equity grant is being recorded over the vesting period commencing on the date the grant was announced. Until the equity grant is awarded and the terms of the equity grant are known, the related liability has been recorded to other non-current liabilities. The compensation expense recorded for the year ended December 31, 2017 related to the PSUs was based on the Company’s best estimate of the three-year cumulative Adjusted EBITDA forecast as of December 31, 2017. The Company reassesses the estimate of the three‑year cumulative Adjusted EBITDA forecast at the end of each reporting period. The Company recorded compensation expense for the RSUs and PSUs of $9.3 million and $6.0 million, respectively, during the year ended December 31, 2017. The Company recorded compensation expense for the RSUs and PSUs of $8.4 million and $6.1 million, respectively, during the year ended December 31, 2016. The remaining unrecognized compensation expense related to non‑vested RSUs and non‑vested PSUs granted was $11.8 million and $6.1 million, respectively, as of December 31, 2017 and is expected to be recognized over the related weighted average period of 1.4 years. Equity Appreciation Rights Effective January 1, 2012, the Company's board of directors adopted the equity appreciation rights plan (“EAR Plan”) in order to compensate certain key employees. During the first quarter of 2017, the Company’s outstanding equity appreciation rights (“EAR”) liability was settled in full by a cash payment to the participants. The Company’s liability related to the EAR Plan was $151.5 million as of December 31, 2016 and was recorded within accrued compensation and benefits on the consolidated balance sheet. Prior to settlement, the EAR awards were re-measured using the intrinsic value method at each reporting period based on a projection of the Company's future common stock equivalent value. The common stock equivalent value was based on an estimate of the Company's EBITDA multiplied by a defined multiple, and divided by the expected number of common shares outstanding. The intrinsic value was the calculated common stock equivalent value per share compared to the per share exercise price. Effective October 17, 2014, the Company amended the EAR Plan such that (i) payments for vested awards resulting from a qualified termination of the award recipient are generally determined based on the Company's EBITDA for the fiscal year prior to such termination and (ii) payments for vested awards resulting from an expiration of the award are determined based on the greater of the Company's EBITDA for the year ended December 31, 2015, the Company's EBITDA for the year ending December 31, 2016, or the value of the Company's publicly-traded common stock for the three trading days following the initial public offering. The following table summarizes the Company's EAR activity since December 31, 2015: Weighted- Weighted- Number Average Average Aggregate of Exercise Remaining Intrinsic (in thousands, except share and per share amounts) Awards Price Contractual Term Value Outstanding at December 31, 2015 $ 11.40 1 year $ 171,712 Settled 11.12 — Outstanding at December 31, 2016 7,614,000 19.90 151,511 Settled (7,614,000) (19.90) — Outstanding at December 31, 2017 — — — For the years ended December 31, 2016 and 2015, the Company recorded compensation expense of $6.0 million and $45.8 million, respectively, related to outstanding EARs. Compensation Expense The allocation of compensation expense related to equity incentive plans in the consolidated statement of operations was as follows: Year ended December 31, (in thousands) 2017 2016 2015 Cost of goods sold $ 408 $ 434 $ 670 Selling, general and administrative expense 13,687 18,622 48,377 Research and development 1,190 1,485 2,556 Total compensation expense before income tax 15,285 20,541 51,603 Income tax benefit 3,158 6,481 17,821 Total compensation expense, net of tax $ 12,127 $ 14,060 $ 33,782 |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss), Net of Tax | 12 Months Ended |
Dec. 31, 2017 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax | |
Accumulated Other Comprehensive Income (Loss), Net of Tax | 18. Accumulated Other Comprehensive Income (Loss), Net of Tax Accumulated other comprehensive income (loss), net of tax consists of foreign currency translation adjustments, unrealized gains and losses from foreign exchange derivative instruments designated as cash flow hedges (Note 10), unrealized gains and losses from available‑for‑sale securities and pension and other postretirement adjustments (Note 12). The components of and changes in accumulated other comprehensive income (loss), net of tax, were as follows: Foreign Gains (Losses) on Gains (Losses) Pension and Accumulated Currency Foreign Exchange on Available- Other Other Translation Derivative for-Sale Postretirement Comprehensive (in thousands) Adjustments Instruments Securities Adjustments Loss Balances at December 31, 2015 $ $ $ $ $ Other comprehensive income (loss) before reclassifications Amounts reclassified from accumulated other comprehensive loss - - Tax benefit (expense) - Balances at December 31, 2016 $ $ $ $ $ Other comprehensive income (loss) before reclassifications Amounts reclassified from accumulated other comprehensive loss - - Tax benefit - Balances at December 31, 2017 $ $ $ $ $ |
Net Income per Common Share
Net Income per Common Share | 12 Months Ended |
Dec. 31, 2017 | |
Net Income per Common Share | |
Net Income per Common Share | 19. Net Income per Common Share The following is a computation of basic and diluted net income per common share attributable to Acushnet Holdings Corp.: Year ended December 31, (in thousands, except share and per share amounts) 2017 2016 2015 Net income (loss) attributable to Acushnet Holdings Corp. $ $ $ Less: dividends earned by preferred shareholders - Less: allocation of undistributed earnings to preferred shareholders - - Net income (loss) attributable to common stockholders - basic Adjustments to net income (loss) for dilutive securities - - Net income (loss) attributable to common stockholders - diluted $ $ $ Weighted average number of common shares: Basic Diluted Net income (loss) per common share attributable to Acushnet Holdings Corp.: Basic $ 1.24 $ 0.74 $ (0.74) Diluted $ 1.23 $ 0.62 $ (0.74) For the year ended December 31, 2017, net income per common share attributable to Acushnet Holdings Corp. was calculated under the treasury stock method. Net income per common share attributable to Acushnet Holdings Corp. for the years ended December 31, 2016 and 2015 was calculated under the two-class method. The Company’s potential dilutive securities for the year ended December 31, 2017 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 year ended December 31, 2016 the Company’s potential dilutive securities include RSUs, PSUs, Series A preferred stock, warrants to purchase common stock and convertible notes. For the year ended December 31, 2015 the Company’s potential dilutive securities include Series A preferred stock, stock options, warrants to purchase common stock and convertible notes. 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: Year ended December 31, 2017 2016 2015 Series A preferred stock - Stock options - - Warrants to purchase common stock - Convertible notes - - RSUs - - |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 2017 | |
Segment Information | |
Segment Information | 20. 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. Segment operating income includes directly attributable expenses and certain shared costs of corporate administration that are allocated to the reportable segments, but excludes interest expense, net; EAR expense; losses on the fair value of common stock warrants 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 years ended December 31, 2017, 2016 and 2015 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: (in thousands) Year ended December 31, 2017 2016 2015 Net sales Titleist golf balls $ 512,041 $ 513,899 $ 535,465 Titleist golf clubs 397,987 430,966 388,304 Titleist golf gear 142,911 136,208 129,408 FootJoy golf wear 437,455 433,061 418,852 Other 69,864 58,141 30,929 Total net sales $ 1,560,258 $ 1,572,275 $ 1,502,958 Segment operating income Titleist golf balls $ 76,870 $ 76,236 $ 92,507 Titleist golf clubs 31,031 50,500 33,593 Titleist golf gear 16,584 12,119 12,170 FootJoy golf wear 26,380 18,979 26,056 Other 14,863 7,299 4,056 Total segment operating income 165,728 165,133 168,382 Reconciling items: Interest expense, net (15,709) (49,908) (60,294) EAR expense - (6,047) (45,814) Loss on fair value of common stock warrants - (6,112) (28,364) Transaction fees (686) (16,817) (2,141) Other 2,343 2,973 381 Total income before income tax $ 151,676 $ 89,222 $ 32,150 Depreciation and amortization Titleist golf balls $ 25,545 $ 26,104 $ 26,962 Titleist golf clubs 7,233 7,021 7,060 Titleist golf gear 1,425 1,250 1,368 FootJoy golf wear 6,058 5,759 5,540 Other 610 700 772 Total depreciation and amortization $ 40,871 $ 40,834 $ 41,702 Information as to the Company’s operations in different geographical areas is presented below. Net sales are categorized based on the location in which the sale originates. Year ended December 31, (in thousands) 2017 2016 2015 Net sales United States $ 789,879 $ 804,516 $ 805,470 EMEA (1) 205,200 210,088 201,106 Japan 201,264 219,021 182,163 Korea 200,394 175,956 144,956 Rest of world 163,521 162,694 169,263 Total net sales $ 1,560,258 $ 1,572,275 $ 1,502,958 (1) Europe, the Middle East and Africa (“EMEA”) Long-lived assets (property, plant and equipment) are categorized based on their location of domicile. Year ended December 31, (in thousands) 2017 2016 Long-lived assets United States $ 148,678 $ 157,884 EMEA 9,669 8,619 Japan 770 628 Korea 3,782 1,811 Rest of world (2) 66,023 70,806 Total long-lived assets $ 228,922 $ 239,748 (2) Includes manufacturing facilities in Thailand with long lived assets of $53.8 million and $57.8 million as of December 31, 2017 and 2016, respectively. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies | |
Commitments and Contingencies | 21. Commitments and Contingencies Purchase Obligations During the normal course of its business, the Company enters into agreements to purchase goods and services, including purchase commitments for production materials, finished goods inventory, capital expenditures and endorsement arrangements with professional golfers. The reported amounts exclude those liabilities included in accounts payable or accrued liabilities on the consolidated balance sheet as of December 31, 2017. Purchase obligations by the Company as of December 31, 2017 were as follows: Payments Due by Period (in thousands) 2018 2019 2020 2021 2022 Thereafter Purchase obligations $ 141,278 $ 10,188 $ 3,737 $ 405 $ 2 $ — Lease Commitments The Company leases certain warehouses, distribution and office facilities, vehicles and office equipment under operating leases. The Company has an operating lease for certain vehicles that provides for a residual value guarantee. The lease has a noncancelable lease term of one year and may be renewed annually over the subsequent five years. The Company has the option to terminate the lease at the annual renewal date. Termination of the lease results in the sale of the vehicles and the determination of the residual value. The residual value is calculated by comparing the net proceeds of the vehicles sold to the depreciated value at the end of the renewal period. The Company is not responsible for any deficiency resulting from the net proceeds being less than 20% of the original cost in the first year and 20% of the depreciated value for all subsequent years. The Company believes that this guarantee will not have a significant impact on the consolidated financial statements. Future minimum rental payments under noncancelable operating leases as of December 31, 2017 were as follows: (in thousands) Year ending December 31, 2018 $ 12,119 2019 10,286 2020 8,447 2021 6,247 2022 4,228 Thereafter 14,418 Total minimum rental payments $ 55,745 The Company leases certain warehouses, distribution and office facilities, vehicles and office equipment under operating leases. Most lease arrangements provide the Company with the option to renew leases at defined terms. The future operating lease obligations would change if the Company were to exercise these options or if it were to enter into additional operating leases. Total rental expense for all operating leases amounted to $16.3 million, $16.5 million and $15.8 million for the years ended December 31, 2017, 2016 and 2015, respectively. Contingencies In connection with the Company’s acquisition of Acushnet Company, Beam indemnified the Company for certain tax related obligations that relate to periods during which Fortune Brands, Inc. owned Acushnet Company. As of December 31, 2017, the Company’s estimate of its receivable for these indemnifications is $8.7 million, which is recorded in other noncurrent assets on the consolidated balance sheet. Litigation Beam A dispute recently concluded between Acushnet Company and Beam with respect to approximately $16.6 million of value-added tax (“VAT”) trade receivables. These receivables were reflected on Acushnet Company’s consolidated balance sheet at the time of the Company’s acquisition of Acushnet Company. Acushnet Company believed that these VAT trade receivables were assets of the Company; Beam claimed that these are tax credits or refunds from the period prior to the acquisition of Acushnet Company which were payable to Beam, pursuant to the terms of the Stock Purchase Agreement that covers the sale of the stock of Acushnet Company. Beam has withheld payments in this amount which the Company believed were payable to Acushnet Company in reimbursement of certain other tax liabilities which existed prior to the acquisition of Acushnet Company. On March 27, 2012, Acushnet Company filed a complaint seeking reimbursement of these funds in the Commonwealth of Massachusetts Superior Court Department, Business Litigation Section. Each party filed Motions for Summary Judgment, which motions were denied by the Court on July 29, 2015. Trial was conducted in early June, 2016. On June 21, 2016, the Court ruled that Beam had a contractual right to the VAT trade receivables actually collected from Acushnet Company's customers prior to the closing of the Company's acquisition of Acushnet Company, but that Beam should pay $972,288 plus pre-judgment interest of $494,859 to the Company to compensate for amounts Beam withheld, but which were not collected from Acushnet Company's customers. The Company recorded the total value of the judgment as other (income) expense, net on the consolidated statement of operations for the year ended December 31, 2016. Acushnet filed a Notice of Appeal on July 20, 2016. On February 2, 2018, the Appeals Court issued its decision affirming the lower Court's decision. The Company did not appeal the Appeals Court ruling. Other Litigation In addition to the lawsuit described above, the Company and its subsidiaries are defendants in lawsuits associated with the normal conduct of their businesses and operations. It is not possible to predict the outcome of the pending actions, and, as with any litigation, it is possible that some of these actions could be decided unfavorably. Consequently, the Company is unable to estimate the ultimate aggregate amount of monetary loss, amounts covered by insurance or the financial impact that will result from such matters and has not recorded a liability related to potential losses. The Company believes that there are meritorious defenses to these actions and that these actions will not have a material adverse effect on the consolidated financial statements. |
Unaudited Quarterly Financial D
Unaudited Quarterly Financial Data | 12 Months Ended |
Dec. 31, 2017 | |
Unaudited Quarterly Financial Data | |
Unaudited Quarterly Financial Data | 22. Unaudited Quarterly Financial Data The tables below summarize quarterly results for fiscal 2017 and 2016: Quarter ended (unaudited) (in thousands) December 31, September 30, June 30, March 31, 2017 Net sales $ 351,392 $ 347,263 $ 427,988 $ 433,615 Gross profit 178,500 172,968 222,909 226,415 Income from operations 26,370 18,265 57,385 64,288 Net income 12,318 10,634 34,038 39,630 Net income attributable to Acushnet Holdings Corp. 11,666 9,318 33,016 38,114 Net income per common share attributable to Acushnet Holdings Corp.: Basic $ 0.16 $ 0.13 $ 0.44 $ 0.51 Diluted $ 0.16 $ 0.12 $ 0.44 $ 0.51 Quarter ended (unaudited) (in thousands) December 31, September 30, June 30, March 31, 2016 Net sales $ 329,761 $ 339,318 $ 463,261 $ 439,935 Gross profit 167,994 166,902 237,960 225,869 Income from operations 7,608 9,606 66,437 57,185 Net income (loss) 1,247 (4,402) 27,478 25,192 Net income (loss) attributable to Acushnet Holdings Corp. (179) (5,526) 27,055 23,662 Net income (loss) per common share attributable to Acushnet Holdings Corp.: Basic $ (0.02) $ (0.38) $ 0.62 $ 0.53 Diluted $ (0.02) $ (0.38) $ 0.39 $ 0.35 |
Summary of Significant Accoun30
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Summary of Significant Accounting Policies | |
Basis of Presentation | Basis of Presentation The accompanying 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 the Company, its wholly- owned subsidiaries and a variable interest entity (“VIE”) in which the Company is the primary beneficiary. All intercompany balances and transactions have been eliminated in consolidation. Certain prior period amounts have been reclassified to conform to current year presentation. |
Use of Estimates | Use of Estimates The preparation of the Company’s consolidated financial statements in accordance with U.S. GAAP requires management to make estimates and judgments that affect reported amounts of assets, liabilities, stockholders’ equity, net sales and expenses, and the disclosure of contingent assets and liabilities in its consolidated financial statements. Actual results could differ from those estimates. |
Acquisition | Acquisition Acushnet Holdings Corp. was incorporated in Delaware on May 9, 2011 as Alexandria Holdings Corp., an entity owned by Fila Korea Co., Ltd. (“Fila Korea”), a leading sport and leisure apparel and footwear company which is a public company listed on the Korea Exchange, and a consortium of investors (the “Financial Investors”) led by Mirae Asset Global Investments, a global investment management firm. Acushnet Holdings Corp. acquired Acushnet Company, our operating subsidiary, from Beam Suntory, Inc. (at the time known as Fortune Brands, Inc.) (“Beam”) on July 29, 2011 (the “Acquisition”). |
Initial Public Offering | Initial Public Offering On November 2, 2016, the Company completed an initial public offering of 19,333,333 shares of its common stock sold by selling stockholders at a public offering price of $17.00 per share. Upon the closing of the Company’s initial public offering, all remaining outstanding shares of the Company’s Series A redeemable convertible preferred stock (“Series A preferred stock”) were automatically converted into 11,556,495 shares of the Company’s common stock and the Company’s 7.5% convertible notes due 2021 (“convertible notes”) were automatically converted into 22,791,852 shares of the Company’s common stock. The underwriters of the Company’s initial public offering exercised their over-allotment option to purchase an additional 2,899,999 shares of common stock from the selling stockholders at the initial public offering price of $17.00 per share. Following the pricing of the initial public offering, Magnus Holdings Co., Ltd. (“Magnus”), a wholly-owned subsidiary of Fila Korea, purchased from the Financial Investors on a pro rata basis 14,818,720 shares of the Company’s common stock, resulting in Magnus holding a controlling ownership interest in the Company’s outstanding common stock. The 14,818,720 shares of the Company’s common stock sold by the Financial Investors were received upon the automatic conversion of certain of the Company’s outstanding convertible notes (Note 9) and Series A preferred stock (Note 15). The remaining outstanding convertible notes and Series A preferred stock automatically converted into shares of the Company’s common stock prior to the closing of the initial public offering. On October 14, 2016, the Company effected a nine-for-one stock split of its issued and outstanding shares of common stock and a proportional adjustment to the existing conversion ratios for its convertible notes, Series A preferred stock, and the exercise price for the common stock warrants and the strike price of stock-based compensation. Accordingly, all share and per share amounts for all periods presented in the accompanying consolidated financial statements and notes thereto have been adjusted retroactively, where applicable, to reflect this stock split and adjustment of the common stock warrant exercise price, and convertible notes and redeemable convertible preferred stock conversion ratios. |
Variable Interest Entities | Variable Interest Entities VIEs are entities that, by design, either (i) lack sufficient equity to permit the entity to finance its activities independently, or (ii) have equity holders that do not have the power to direct the activities of the entity that most significantly impact its economic performance, the obligation to absorb the entity’s expected losses, or the right to receive the entity’s expected residual returns. The Company consolidates a VIE when it is the primary beneficiary, which is the party that has both (i) the power to direct the activities that most significantly impact the VIE’s economic performance and (ii) through its interests in the VIE, the obligation to absorb expected losses or the right to receive expected benefits from the VIE that could potentially be significant to the VIE. The Company consolidates the accounts of Acushnet Lionscore Limited, a VIE which is 40% owned by the Company. The sole purpose of the VIE is to manufacture the Company’s golf footwear and as such, the Company is deemed to be the primary beneficiary. The Company has presented separately on its consolidated balance sheets, to the extent material, the assets of its consolidated VIE that can only be used to settle specific obligations of its consolidated VIE and the liabilities of its consolidated VIE for which creditors do not have recourse to its general credit. The general creditors of the VIE do not have recourse to the Company. Certain directors of the noncontrolling entities have guaranteed the credit lines of the VIE, for which there were no outstanding borrowings as of December 31, 2017 and 2016. In addition, pursuant to the terms of the agreement governing the VIE, the Company is not required to provide financial support to the VIE. |
Cash and Restricted Cash | Cash and Restricted Cash Cash held in Company checking accounts is included in cash. Book overdrafts not subject to offset with other accounts with the same financial institution are classified as accounts payable. As of December 31, 2017 and 2016, book overdrafts in the amount of $2.9 million and $3.6 million, respectively, were recorded in accounts payable. The Company classifies as restricted certain cash that is not available for use in its operations. As of December 31, 2017 and 2016, the amount of restricted cash included in cash and restricted cash on the consolidated balance sheet was $2.3 million and $3.1 million, respectively. |
Accounts Receivable | Accounts Receivable Accounts receivable are presented net of an allowance for doubtful accounts. The allowance for doubtful accounts is assessed each reporting period by the Company for estimated losses resulting from the inability or unwillingness of its customers to make required payments. The allowance is based on various factors, including credit risk assessments, length of time the receivables are past due, historical experience, customer specific information available to the Company and existing economic conditions. |
Allowance for Sales Returns | Allowance for Sales Returns A sales returns allowance is recorded for anticipated returns through a reduction of sales and cost of goods sold in the period that the related sales are recorded. Sales returns are estimated based upon historical rates of product returns, current economic trends and changes in customer demands as well as specific identification of outstanding returns. In accordance with this policy, the allowance for sales returns was $ 13.5 million and $9.8 million as of December 31, 2017 and 2016, respectively. |
Concentration of Credit Risk and of Significant Customers | Concentration of Credit Risk and of Significant Customers Financial instruments that potentially expose the Company to concentration of credit risk are cash and accounts receivable. Substantially all of the Company's cash deposits are maintained at large, creditworthy financial institutions. The Company's deposits, at times, may exceed federally insured limits. The Company does not believe that it is subject to unusual credit risk beyond the normal credit risk associated with commercial banking relationships. As part of its ongoing procedures, the Company monitors its concentration of deposits with various financial institutions in order to avoid any undue exposure. As of December 31, 2017 and 2016, the Company had $ 44.7 million and $75.6 million, respectively, in banks located outside the United States. The risk with respect to the Company's accounts receivable is managed by the Company through its policy of monitoring the creditworthiness of its customers to which it grants credit terms in the normal course of business. |
Inventories | Inventories Inventories are valued at the lower of cost and net realizable value. Cost is determined using the first-in, first-out inventory method. The inventory balance, which includes material, labor and manufacturing overhead costs, is recorded net of an allowance for obsolete or slow moving inventory. The Company's allowance for obsolete or slow moving inventory contains estimates regarding uncertainties. Such estimates are updated each reporting period and require the Company to make assumptions and to apply judgment regarding a number of factors, including market conditions, selling environment, historical results and current inventory trends. |
Property, Plant and Equipment | Property, Plant and Equipment Property, plant and equipment are recorded at cost less accumulated depreciation and amortization. Depreciation is provided on a straight-line basis over the estimated useful lives of the assets. Gains or losses resulting from disposals are included in income from operations. Betterments and renewals, which improve and extend the life of an asset, are capitalized. Maintenance and repair costs are expensed as incurred. Estimated useful lives of property, plant and equipment asset categories were as follows: Buildings and improvements – 40 years Machinery and equipment – 10 years Furniture, fixtures and computer hardware – 10 years Computer software – 10 years Leasehold and tenant improvements are amortized over the shorter of the lease term or the estimated useful lives of the assets. Certain costs incurred in connection with the development of the Company's internal-use software are capitalized. Software development costs are primarily related to the Company's enterprise resource planning system. Costs incurred in the preliminary stages of development are expensed as incurred. Internal and external costs incurred in the application development phase, if direct and incremental, are capitalized until the software is substantially complete and ready for its intended use. Capitalization ceases upon completion of all substantial testing performed to ensure the product is ready for its intended use. Costs such as maintenance and training are expensed as incurred. The capitalized internal-use software costs are included in property, plant and equipment and once the software is placed into service are amortized over the estimated useful life which ranges from three to ten years. |
Long-Lived Assets | Long-Lived Assets A long-lived asset (including amortizable identifiable intangible assets) or asset group is tested for recoverability whenever events or changes in circumstances indicate that its carrying amount may not be recoverable. When such events occur, the Company compares the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset or asset group to the carrying amount of the long-lived asset or asset group. The cash flows are based on the best estimate of future cash flows derived from the most recent business projections. If the carrying value exceeds the sum of the undiscounted cash flows, an impairment loss is recognized based on the excess of the asset's or asset group's carrying value over its fair value. Fair value is determined based on discounted expected future cash flows on a market participant basis. Any impairment charge would be recognized within operating expenses as a selling, general and administrative expense. The Company continually evaluates whether events and circumstances have occurred that indicate the remaining estimated useful life of long-lived assets may warrant revision or that the remaining balance may not be recoverable. These factors may include a significant deterioration of operating results, changes in business plans, or changes in anticipated cash flows. |
Goodwill and Indefinite-Lived Intangible Assets | Goodwill and Indefinite-Lived Intangible Assets Goodwill and indefinite-lived intangible assets are not amortized but instead are measured for impairment at least annually, or more frequently when events or changes in circumstances indicate that the carrying amount of the asset may be impaired. Goodwill is assigned to reporting units for purposes of impairment testing. A reporting unit may be the same as an operating segment or one level below an operating segment. For purposes of assessing potential impairment, the Company may assess qualitative factors to determine if it is more likely than not that the fair value of a reporting unit is less than its carrying amount, including goodwill. If the Company determines based on the qualitative factors that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, no further testing is necessary. If, however, the Company determines that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, the Company performs the first step of a two-step quantitative goodwill impairment test. In the first step, the Company compares the fair value of the reporting unit to its carrying value. If the fair value of the reporting unit exceeds the carrying value of the net assets assigned to that unit, goodwill is considered not impaired and the Company is not required to perform further testing. If the carrying value of the net assets assigned to the reporting unit exceeds the fair value of the reporting unit, then the Company must perform the second step of the impairment test in order to determine the implied fair value of the reporting unit's goodwill. If the carrying value of a reporting unit's goodwill exceeds its implied fair value, then the Company would record an impairment loss equal to the difference. The fair value of the reporting units is determined using the income approach. The income approach uses a discounted cash flow analysis which involves applying appropriate discount rates to estimated future cash flows based on forecasts of sales, costs and capital requirements. The Company performs its annual impairment tests in the fourth quarter of each fiscal year. As of December 31, 2017, no impairment of goodwill was identified and the fair value of each reporting unit exceeded its carrying value. Purchased intangible assets other than goodwill are amortized over their useful lives unless those lives are determined to be indefinite. The Company's trademarks have been assigned an indefinite life as the Company currently anticipates that these trademarks will contribute to its cash flows indefinitely. Trademarks are reviewed for impairment annually and may be reviewed more frequently if indicators of impairment are present. Impairment losses are recorded to the extent that the carrying value of the indefinite-lived intangible asset exceeds its fair value. The Company measures the fair value of its trademarks using the relief-from-royalty method, which estimates the present value of royalty income that could be hypothetically earned by licensing the brand name to a third party over the remaining useful life. As of December 31, 2017, no impairment of trademarks was identified. |
Deferred Financing Costs | Deferred Financing Costs The Company defers costs directly associated with acquiring third-party financing. These deferred costs are amortized as interest expense over the term of the related indebtedness. Deferred financing costs associated with the revolving credit facilities are included in other current and noncurrent assets and deferred financing costs associated with all other indebtedness are netted against debt on the consolidated balance sheet. |
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 maximize the use of observable inputs and minimize the use of unobservable inputs. Financial assets and liabilities carried at fair value are to be classified and disclosed in one of the following three levels of the fair value hierarchy, of which the first two are considered observable and the last is considered unobservable: · Level 1—Quoted prices in active markets for identical assets or liabilities. · Level 2—Observable inputs (other than Level 1 quoted prices), such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data. · Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques. The Company’s foreign exchange derivative assets and liabilities are carried at fair value determined according to the fair value hierarchy described above (Note 11). The carrying value of accounts receivable, accounts payable and accrued expenses approximates fair value due to the short-term nature of these assets and liabilities. The Company adopted the fair value measurement disclosures for nonfinancial assets and liabilities, such as goodwill and indefinite-lived intangible assets. In some instances where a market price is available, but the instrument is in an inactive or over-the-counter market, the Company consistently applies the dealer (market maker) pricing estimate and uses a midpoint approach on bid and ask prices from financial institutions to determine the reasonableness of these estimates. Assets and liabilities subject to this fair value valuation approach are typically classified as Level 2. |
Pension and Other Postretirement Benefit Plans | Pension and Other Postretirement Benefit Plans The Company provides U.S. and foreign defined benefit and defined contribution plans to eligible employees and postretirement benefits to certain retirees, including pensions, postretirement healthcare benefits and other postretirement benefits. Plan assets and obligations are measured using various actuarial assumptions, such as discount rates, rate of compensation increase, mortality rates, turnover rates and health care cost trend rates, as determined at each year end measurement date. The measurement of net periodic benefit cost is based on various actuarial assumptions, including discount rates, expected return on plan assets and rate of compensation increase, which are determined as of the prior year measurement date. The determination of the discount rate is generally based on an index created from a hypothetical bond portfolio consisting of high-quality fixed income securities with durations that match the timing of expected benefit payments. The expected return on plan assets is determined based on several factors, including adjusted historical returns, historical risk premiums for various asset classes and target asset allocations within the portfolio. Adjustments made to the historical returns are based on recent return experience in the equity and fixed income markets and the belief that deviations from historical returns are likely over the relevant investment horizon. Actual cost is also dependent on various other factors related to the employees covered by these plans. The effects of actuarial deviations from assumptions are generally accumulated and, if over a specified corridor, amortized over the remaining service period of the employees. The cost or benefit of plan changes, such as increasing or decreasing benefits for prior employee service (prior service cost), is deferred and included in expense on a straight-line basis over the average remaining service period of the related employees. The Company's actuarial assumptions are reviewed on an annual basis and modified when appropriate. To calculate the U.S. pension and postretirement benefit plan expense in 2017, the Company applied the individual spot rates along the yield curve that correspond with the timing of each future cash outflow for the benefit payments in order to calculate interest cost and service cost. Prior to 2017, the service cost and interest cost components were determined using a single weighted-average discount rate. The change does not affect the measurement of the total benefit plan obligations, as the change in the service cost and interest cost offsets in the actuarial gains and losses recorded in other comprehensive income. The Company changed to the new method to provide a more precise measure of service and interest cost by improving the correlation between the projected benefit cash flows and the discrete spot yield curve rates. The Company accounted for this change as a change in estimate prospectively beginning in 2017. |
Income Taxes | Income Taxes The Company accounts for income taxes using the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between consolidated financial statement carrying amounts and tax basis amounts enacted tax rates expected to be in effect when the temporary differences reverse. A valuation allowance is recorded to reduce deferred income tax assets when it is more-likely-than-not that such assets will not be realized. Potential for recovery of deferred tax assets is evaluated by estimating the future taxable profits expected and considering prudent and feasible tax planning strategies. The Company records liabilities for uncertain income tax positions based on the two step process. The first step is recognition, where an individual tax position is evaluated as to whether it has a likelihood of greater than 50% of being sustained upon examination based on the technical merits of the position, including resolution of any related appeals or litigation processes. For tax positions that are currently estimated to have a less than 50% likelihood of being sustained, no tax benefit is recorded. For tax positions that have met the recognition threshold in the first step, the Company performs the second step of measuring the benefit to be recorded. The amount of the benefit that may be recognized is the largest amount that has a greater than 50% likelihood of being realized on ultimate settlement. The actual benefits ultimately realized may differ from the estimates. In future periods, changes in facts, circumstances, and new information may require the Company to change the recognition and measurement estimates with regard to individual tax positions. Changes in recognition and measurement estimates are recorded in income tax expense and liability in the period in which such changes occur. The Company recognizes accrued interest and penalties related to unrecognized tax benefits in the provision for income taxes on the consolidated statements of income. Beam has indemnified certain tax obligations that relate to periods during which Fortune Brands, Inc. owned Acushnet Company (Note 13). These estimated tax obligations are recorded in accrued taxes and other noncurrent liabilities, and the related indemnification receivable is recorded in other current and noncurrent assets on the consolidated balance sheet. Any changes in the value of these specifically identified tax obligations are recorded in the period identified in income tax expense and the related change in the indemnification asset is recorded in other (income) expense, net on the consolidated statement of operations. |
Revenue Recognition | Revenue Recognition Revenue is recognized upon shipment or upon receipt by the customer depending on the country of the sale and the agreement with the customer, net of allowances for discounts, sales returns, customer sales incentives and cooperative advertising. The criteria for recognition of revenue is met when persuasive evidence that an arrangement exists, both title and risk of loss have passed to the customer, the price is fixed or determinable and collectability is reasonably assured. In circumstances where either title or risk of loss pass upon receipt by the customer, revenue is deferred until such event occurs based on an estimate of the shipping time from the Company's distribution centers to the customer using historical and expected delivery times by geographic location. Amounts billed to customers for shipping and handling are included in net sales. |
Customer Sales Incentives | Customer Sales Incentives The Company offers customer sales incentives, including off-invoice discounts and sales-based rebate programs, to its customers which are primarily accounted for as a reduction in sales at the time the revenue is recognized. Sales-based rebates are estimated using assumptions related to the percentage of customers who will achieve qualifying purchase goals and the level of achievement. These assumptions are based on historical experience, current year program design, current marketplace conditions and sales forecasts, including considerations of product life cycles. |
Cost of Goods Sold | Cost of Goods Sold Cost of goods sold includes all costs to make products saleable, such as inbound freight, purchasing and receiving costs, inspection costs and transfer costs. In addition, all depreciation expense associated with assets used to manufacture products and make them saleable is included in cost of goods sold. |
Product Warranty | Product Warranty The Company has defined warranties ranging from one to two years. Products covered by the defined warranty policies 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. |
Advertising and Promotion | Advertising and Promotion Advertising and promotional costs are included in selling, general and administrative expense on the consolidated statement of operations and include product endorsement arrangements with members of the various professional golf tours, media placement and production costs (television, print and internet), tour support expenses and point-of-sale materials. Advertising production costs are expensed as incurred. Media placement costs are expensed in the month the advertising appears. Product endorsement arrangements are expensed based upon the specific provisions of player contracts. Advertising and promotional expense was $192.7 million, $196.0 million and $203.3 million for the years ended December 31, 2017, 2016 and 2015, respectively. |
Selling | Selling Selling expenses including field sales, sales administration and shipping and handling costs are included in selling, general and administrative expense on the consolidated statement of operations. Shipping and handling costs included in selling expenses were $32.5 million, $32. 4 million and $3 2.6 million for the years ended December 31, 2017, 2016 and 2015, respectively. |
Research and Development | Research and Development Research and development expenses include product development, product improvement, product engineering, and process improvement costs and are expensed as incurred. |
Foreign Currency Translation and Transactions | Foreign Currency Translation and Transactions Assets and liabilities denominated in foreign currency are translated into U.S. dollars at the actual rates of exchange at the balance sheet date. Revenues and expenses are translated at the average rates of exchange for the reporting period. The related translation adjustments are recorded as a component of accumulated other comprehensive income (loss). Transactions denominated in a currency other than the functional currency are re-measured into functional currency with resulting transaction gains or losses recorded as selling, general and administrative expense on the consolidated statement of operations. Foreign currency transaction gain (loss) included in selling, general and administrative expense was a gain of $ 4.1 million, a gain of $ 1.2 million and a loss of $4.7 million for the years ended December 31, 2017, 2016 and 2015, respectively. |
Derivative Financial Instruments | Derivative Financial Instruments All derivatives are recognized as either assets or liabilities on the consolidated balance sheet and measurement of these instruments is at fair value. If the derivative is designated as a fair value hedge, the changes in the fair value of the derivative and of the hedged item attributable to the hedged risk are recognized in earnings in the same period. If the derivative is designated as a cash flow hedge, the effective portions of changes in the fair value of the derivative are recorded as a component of accumulated other comprehensive income (loss) and are recognized in the consolidated statement of operations when the hedged item affects earnings. Any portion of the change in fair value that is determined to be ineffective is immediately recognized in earnings as cost of goods sold. The Company may elect to enter into foreign exchange forwards to mitigate the change in fair value of specific assets and liabilities which do not qualify as hedging instruments under U.S. GAAP. Accordingly, 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, together with the re-measurement gain or loss from the hedged asset or liability. There were no outstanding foreign exchange forward contracts not designated under hedge accounting as of December 31, 2017 and 2016. |
Share-based Compensation | Share-based Compensation The Company has a share-based compensation plan for employees and non-employee members of the Company's Board of Directors. All awards granted under the plan are measured at fair value at the date of the grant and amortized as expense over the requisite service period of the award, which is generally the vesting period of the respective award. The Company accounts for forfeitures in compensation expense when they occur. The Company issues share-based awards with service-based vesting conditions and performance-based vesting conditions. For awards with performance-based vesting conditions, the measurement of the expense is based on the Company’s level of achievement of the applicable cumulative Adjusted EBITDA performance metrics. |
Equity Appreciation Rights Plan | Equity Appreciation Rights Plan Awards granted under the Company's Equity Appreciation Rights (“EAR”) plan were accounted for as liability-classified awards because it was a cash settled plan. The Company elected the intrinsic value method to measure its liability-classified awards and amortized share-based compensation expense for those awards expected to vest on a straight-line basis over the requisite service period. The Company re-measured the intrinsic value of the awards at the end of each reporting period. |
Net Income (Loss) Per Common Share | Net Income (Loss) Per Common Share Net income (loss ) per common share attributable to Acushnet Holdings Corp. is calculated under the treasury stock method. Prior to the conversion of the redeemable convertible preferred shares to common stock in connection with the Company’s initial public offering in 2016, the Company applied the two-class method to calculate its basic and diluted net income (loss) per common share attributable to Acushnet Holdings Corp., as its redeemable convertible preferred shares were participating securities. The two-class method is an earnings allocation formula that treats a participating security as having rights to earnings that otherwise would have been available to common stockholders. Net income (loss) per common share available to Acushnet Holdings Corp. was determined by allocating undistributed earnings between holders of common shares and redeemable convertible preferred shares, based on the participation rights of the preferred shares. Basic net income (loss) per share attributable to Acushnet Holdings Corp. was computed by dividing the net income (loss) available to Acushnet Holdings Corp. by the weighted-average number of common shares outstanding during the period. Diluted net income (loss) per common share attributable to Acushnet Holdings Corp. was computed by dividing the net income (loss) available to Acushnet Holdings Corp. after giving effect to the diluted securities by the weighted-average number of dilutive shares outstanding during the period. Diluted net income (loss) per common share attributable to Acushnet Holdings Corp. for the years ended December 31, 2017 and 2016 reflects the potential dilution that would occur if the Restricted Stock Units (“RSUs”) were converted into common shares. The restricted stock units are included as potential dilutive securities to the extent they are dilutive under the treasury stock method for the applicable periods. Diluted net income (loss) per common share attributable to Acushnet Holdings Corp. for the year ended December 31, 2015 reflects the potential dilution that would occur if common stock warrants, convertible notes, redeemable convertible preferred stock, stock options or any other dilutive equity instruments were exercised or converted into common shares. The common stock warrants and stock options are included as potential dilutive securities to the extent they are dilutive under the treasury stock method for the applicable periods. The convertible notes and redeemable convertible preferred stock are included as potential dilutive securities to the extent they are dilutive under the if-converted method for the applicable periods. |
Recently Adopted Accounting Standards and Recently Issued Accounting Standards | Recently Adopted Accounting Standards Consolidation— Interests Held Through Related Parties In October 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016‑17, “ Consolidation: Interests Held through Related Parties that are under Common Control. ” ASU 2016‑17 changes the evaluation of whether a reporting entity is the primary beneficiary of a VIE by changing how a reporting entity that is a single decision maker of a VIE treats indirect interests in the entity held through related parties that are under common control with the reporting entity. The Company adopted the provisions of this standard during the three months ended March 31, 2017. The adoption of this standard did not have an impact on the consolidated financial statements. Compensation—Stock Compensation In March 2016, the FASB issued ASU 2016‑09, “ Compensation—Stock Compensation: Improvements to Employee Share‑Based Payment Accounting” to simplify accounting for employee share‑based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities and classification on the statement of cash flows. The Company adopted the provisions of this standard prospectively during the three months ended March 31, 2017. The adoption of this standard did not have a material impact on the consolidated financial statements. Recently Issued Accounting Standards Income Statement—Reporting Comprehensive Income In February 2018, the FASB issued ASU 2018‑02, “Income Statement—Reporting Comprehensive Income (Topic 220) —Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income.” The amendments in this update allow a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act of 2017. ASU 2018‑02 is effective for annual periods beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted. The Company is still analyzing the complete impact this standard will have on its consolidated financial statements. Derivatives and Hedging (Topic 815) —Targeted Improvements to Accounting for Hedging Activities In August 2017, the FASB issued ASU 2017‑12, “Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities .” The amendments in this update expand and refine hedge accounting guidance and align the recognition and presentation of the effects of the hedging instrument and the hedged item in the financial statements. ASU 2017-12 also simplifies the application of hedge accounting guidance, hedge documentation requirements and the assessment of hedge effectiveness. ASU 2017‑12 is effective for annual periods beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted. The effect of adoption should be reflected as of the beginning of the fiscal year of adoption. The adoption of this standard is not expected to have a material impact on the consolidated financial statements. Compensation—Stock Compensation—Scope of Modification Accounting In May 2017, the FASB issued ASU 2017‑09, “Compensation—Stock Compensation: Scope of Modification Accounting .” The amendments in this update provide guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718, Compensation — Stock Compensation. ASU 2017‑09 is effective for annual periods beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted. The adoption of this standard is not expected to have a material impact on the consolidated financial statements. Compensation—Retirement Benefits In March 2017, the FASB issued ASU 2017‑07, “ Compensation — Retirement Benefits: Improving the Presentation of Net Periodic Pension Cost and Net Periodic Post Retirement Benefit Cost. ” ASU 2017‑07 requires that an employer report the service cost component of net periodic pension and net periodic post retirement cost in the same line item as other compensation costs arising from services rendered by the employees during the period. It also requires the other components of net periodic pension and net periodic postretirement benefit cost to be presented in the income statement separately from the service cost component and outside a subtotal of income from operations. Additionally, only the service cost component is eligible for capitalization. ASU 2017‑07 is effective for annual periods beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted as of the beginning of an annual period for which financial statements have not been issued or made available for issuance. The adoption of this standard is not expected to have a material impact on the consolidated financial statements. Intangibles—Goodwill and Other — Simplifying the Test for Goodwill Impairment In January 2017, the FASB issued ASU 2017‑04, “ Intangibles—Goodwill and Other: Simplifying the Test for Goodwill Impairment. ” ASU 2017‑04 removes the second step of the goodwill impairment test. Instead an entity will perform a one-step quantitative test and record the amount of goodwill impairment as the excess of a reporting unit’s carrying amount over its fair value, not to exceed the total amount of goodwill allocated to the reporting unit. ASU 2017‑04 is effective for annual periods beginning after December 15, 2019, and interim periods within those fiscal years. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The adoption of this standard is not expected to have a material impact on the consolidated financial statements. Business Combination—Clarifying the Definition of a Business In January 2017, the FASB issued ASU 2017‑01, “ Business Combinations: Clarifying the Definition of a Business. ” ASU 2017‑01 clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of businesses. ASU 2017‑01 is effective for annual periods beginning after December 15, 2017, and interim periods within those fiscal years. Early application is permitted for transactions for which the acquisition date occurs before the issuance date or effective date of the amendments, only when the transaction has not been reported in financial statements that have been issued or made available for issuance. The adoption of this standard is not expected to have a material impact on the consolidated financial statements. Income Taxes In October 2016, the FASB issued ASU 2016‑16, “ Income Taxes: Intra-Entity Transfers of Assets other than Inventory. ” ASU 2016-16 requires that entities recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. The guidance is effective for financial statements issued for annual periods beginning after December 15, 2017, including interim periods within those fiscal years. The adoption of this standard is not expected to have a material impact on the consolidated financial statements. Statement of Cash Flows In August 2016, the FASB issued ASU 2016‑15, “ Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments ” to address diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The guidance is effective for financial statements issued for annual periods beginning after December 15, 2017, including interim periods within those fiscal years. The adoption of this standard is not expected to have a material impact on the consolidated financial statements. Revenue from Contracts with Customers In May 2014, the FASB issued ASU 2014‑09, “ Revenue from Contracts with Customers.” ASU 2014‑09 amends revenue recognition guidance and requires more detailed disclosures to enable users of financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. In March 2016, the FASB issued ASU 2016‑08, “ Revenue from Contracts with Customers: Principal versus Agent Considerations ” clarifying the implementation guidance on principal versus agent considerations. In August 2015, the FASB issued ASU 2015‑14, “ Revenue from Contracts with Customers: Deferral of the Effective Date .” deferring the adoption of previously issued guidance published. In May 2016, the FASB issued ASU 2016‑12, “ Revenue from Contracts with Customers: Narrow‑Scope Improvements and Practical Expedients.” ASU 2016‑12 addresses narrow‑scope improvements to the guidance on collectability, noncash consideration and completed contracts at transition and provides a practical expedient for contract modifications and an accounting policy election related to the presentation of sales taxes and other similar taxes collected from customers. ASU 2016‑08 and 2015‑14 are effective for reporting periods beginning after December 15, 2017, including interim periods within those fiscal years. The new standard permits the use of either the retrospective or modified retrospective approach on adoption. The Company has adopted the standard on January 1, 2018 using a modified retrospective approach with the cumulative effect of initially applying the new standard recognized in retained earnings at the date of adoption. The Company has identified customer incentives and expanded disclosures as the primary areas that will be affected by the new guidance. Based upon the terms of the Company’s agreements and the materiality of the transactions related to customer incentives, the Company does not expect the effect of adoption to have a material impact on the Company’s consolidated financial statements. Leases In February 2016, the FASB issued ASU 2016‑02, “ Leases, ” which will require lessees to recognize right‑of‑use assets and lease liabilities for leases which were formerly classified as operating leases. The guidance is effective for financial statements issued for annual periods beginning after December 15, 2018, including interim periods within those fiscal years. While the Company is still analyzing the complete impact this ASU will have on its consolidated financial statements and related disclosures, it does expect the adoption of this standard will have a material impact on its consolidated financial statements. |
Summary of Significant Accoun31
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Summary of Significant Accounting Policies | |
Schedule of estimated useful lives of property, plant and equipment | Buildings and improvements – 40 years Machinery and equipment – 10 years Furniture, fixtures and computer hardware – 10 years Computer software – 10 years |
Allowance for Doubtful Accoun32
Allowance for Doubtful Accounts (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Allowance for Doubtful Accounts | |
Schedule of change to the allowance for doubtful accounts | (in thousands) 2017 2016 2015 Balance at beginning of year $ 12,255 $ 12,363 $ 8,528 Bad debt expense 337 6,507 4,771 Amount of receivables written off (3,300) (6,315) (634) Foreign currency translation 683 (300) (302) Balance at end of year $ 9,975 $ 12,255 $ 12,363 |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Inventories | |
Schedule of inventory | (in thousands) December 31, December 31, 2017 2016 Raw materials and supplies $ 72,342 $ 55,424 Work-in-process 23,956 21,558 Finished goods 267,664 246,307 Inventories $ 363,962 $ 323,289 |
Property, Plant and Equipment34
Property, Plant and Equipment, Net (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Property, Plant and Equipment, Net | |
Schedule of property, plant and equipment, net | December 31, December 31, (in thousands) 2017 2016 Land $ 14,618 $ 14,500 Buildings and improvements 138,570 133,844 Machinery and equipment 148,999 143,784 Furniture, computers and equipment 32,783 29,326 Computer software 60,736 58,462 Construction in progress 13,586 11,196 Property, plant and equipment, gross 409,292 391,112 Accumulated depreciation and amortization (180,370) (151,364) Property, plant and equipment, net $ 228,922 $ 239,748 |
Goodwill and Identifiable Int35
Goodwill and Identifiable Intangible Assets, Net (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill and Identifiable Intangible Assets, Net | |
Schedule of goodwill allocated to the Company's reportable segments and changes in the carrying amount of goodwill | Goodwill allocated to the Company's reportable segments and changes in the carrying amount of goodwill were as follows: Titleist Titleist FootJoy Titleist (in thousands) Golf Balls Golf Clubs Golf Wear Golf Gear Other Total Balances at December 31, 2015 $ 106,561 51,753 2,303 12,549 8,013 181,179 Foreign currency translation (1,139) (554) (25) (134) (86) (1,938) Balances at December 31, 2016 105,422 51,199 2,278 12,415 7,927 179,241 Foreign currency translation 3,941 1,914 85 464 296 6,700 Balances at December 31, 2017 $ 109,363 $ 53,113 $ 2,363 $ 12,879 $ 8,223 $ 185,941 |
Schedule of net carrying value by class of identifiable intangible assets | Weighted December 31, 2017 December 31, 2016 Average Useful Accumulated Net Book Accumulated Net Book (in thousands) Life (Years) Gross Amortization Value Gross Amortization Value Indefinite-lived: Trademarks N/A $ $ - $ $ $ - $ Amortizing: Completed Technology 13 Customer Relationships 20 Licensing Fees and Other 7 Total intangible assets $ $ $ $ $ $ |
Schedule of amortization expense related to intangible assets | (in thousands) Year ending December 31, 2018 $ 7,878 2019 6,269 2020 5,926 2021 2022 Thereafter Total $ 53,134 |
Product Warranty (Tables)
Product Warranty (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Product Warranty | |
Schedule of warranty obligation for accrued warranty expense | Year ended December 31, (in thousands) 2017 2016 2015 Balance at beginning of period $ 3,526 $ 3,345 $ 2,989 Provision 5,801 6,200 5,399 Claims paid/costs incurred (5,653) (5,940) (4,929) Foreign currency translation 149 (79) (114) Balance at end of period $ 3,823 $ 3,526 $ 3,345 |
Debt and Financing Arrangemen37
Debt and Financing Arrangements (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Debt and Financing Arrangements | |
Schedule of debt and capital lease obligations | December 31, December 31, (in thousands) 2017 2016 Term loan $ 351,563 $ 370,313 Delayed draw term loan A facility 95,000 - Revolving credit facility 10,066 42,495 Other short-term borrowings 10,298 - Capital lease obligations 22 491 Debt issuance costs (2,896) (3,706) Total 464,053 409,593 Less: short-term debt and current portion of long-term debt Total long-term debt and capital lease obligations $ $ |
Schedule of principal payments on outstanding long-term debt obligations | (in thousands) Year ending December 31, 2018 $ 2019 2020 2021 2022 - Thereafter - Total $ |
Derivative Financial Instrume38
Derivative Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Derivative Financial Instruments | |
Schedule of fair values in foreign exchange derivative instruments on the consolidated balance sheets | Balance Sheet December 31, December 31, (in thousands) Location 2017 2016 Asset derivatives Other current assets $ 4,675 $ 11,357 Other noncurrent assets 562 5,286 Liability derivatives Other current liabilities Other noncurrent liabilities |
Schedule of foreign exchange derivative instruments included in accumulated other comprehensive income (loss) | Gain (Loss) Recognized in Other Comprehensive Income (Loss) Year ended December 31, (in thousands) 2017 2016 2015 Type of hedge Cash flow $ (15,558) $ 7,014 $ 14,964 $ (15,558) $ 7,014 $ 14,964 |
Effect of foreign exchange hedges in the consolidated statement of operations | Gain (Loss) Recognized in Statement of Operations Year ended December 31, (in thousands) 2017 2016 2015 Location of gain (loss) in statement of operations Cost of goods sold $ 1,329 $ 5,194 $ 26,805 Selling, general and administrative expense (2,732) (917) 3,733 $ (1,403) $ 4,277 $ 30,538 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Measurements | |
Schedule of assets and liabilities measured at fair value on a recurring basis | Fair Value Measurements as of December 31, 2017 using: (in thousands) Level 1 Level 2 Level 3 Balance Sheet Location Assets Rabbi trust $ $ - $ - Other current assets Foreign exchange derivative instruments - - Other current assets Deferred compensation program assets - - Other noncurrent assets Foreign exchange derivative instruments - - Other noncurrent assets Total assets $ $ $ - Liabilities Foreign exchange derivative instruments $ - $ $ - Other current liabilities Deferred compensation program liabilities - - Other noncurrent liabilities Foreign exchange derivative instruments - - Other noncurrent liabilities Total liabilities $ $ $ - Fair Value Measurements as of December 31, 2016 using: (in thousands) Level 1 Level 2 Level 3 Balance Sheet Location Assets Rabbi trust $ $ - $ - Other current assets Foreign exchange derivative instruments - - Other current assets Rabbi trust - - Other noncurrent assets Deferred compensation program assets - - Other noncurrent assets Foreign exchange derivative instruments - - Other noncurrent assets Total assets $ $ $ - Liabilities Foreign exchange derivative instruments $ - $ $ - Other current liabilities Deferred compensation program liabilities - - Other noncurrent liabilities Foreign exchange derivative instruments - - Other noncurrent liabilities Total liabilities $ $ $ - |
Schedule of changes in Level 3 fair value measurements | December 31, (in thousands) 2016 Balance at beginning of year $ Common stock warrant exercise Total losses included in earnings Balance at end of year $ - |
Pension and Other Postretirem40
Pension and Other Postretirement Benefits (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Pension and Other Postretirement Benefits | |
Schedule of change in benefit obligation, change in plan assets and funded status | Pension Pension Benefits Benefits Postretirement (in thousands) (Underfunded) (Overfunded) Benefits Change in projected benefit obligation ("PBO") Benefit obligation at December 31, 2016 $ 284,104 $ 39,735 $ 20,264 Service cost - 955 Interest cost 1,049 713 Actuarial (gain) loss (2,000) (5,075) Settlements (5,172) - Participants’ contributions - - 355 Benefit payments (2,719) (635) (1,160) Foreign currency translation 2,659 - Adjustment for movement from underfunded to overfunded (168) - Projected benefit obligation at December 31, 2017 35,468 16,052 Accumulated benefit obligation at December 31, 2017 34,190 16,052 Change in plan assets Fair value of plan assets at December 31, 2016 45,342 - Return on plan assets 6,254 - Employer contributions 1,697 805 Participants’ contributions - - 355 Settlements (20,663) (5,172) - Benefit payments (2,719) (635) (1,160) Adjustment for movement from underfunded to overfunded (194) - Foreign currency translation 3,475 - Fair value of plan assets at December 31, 2017 50,767 - Funded status (fair value of plan assets less PBO) $ $ 15,299 $ (16,052) Pension Pension Benefits Benefits Postretirement (in thousands) (Underfunded) (Overfunded) Benefits Change in projected benefit obligation Benefit obligation at December 31, 2015 $ $ $ Service cost Interest cost Actuarial (gain) loss Settlements - - Plan amendments - - Participants’ contributions - - Benefit payments Foreign currency translation (6,932) - Adjustment for movement from underfunded to overfunded 210 - Projected benefit obligation at December 31, 2016 Accumulated benefit obligation at December 31, 2016 Change in plan assets Fair value of plan assets at December 31, 2015 - Return on plan assets - Employer contributions Participants’ contributions - - Settlements - - Benefit payments Foreign currency translation - Fair value of plan assets at December 31, 2016 - Funded status (fair value of plan assets less PBO) $ $ $ |
Schedule of amount of pension and postretirement assets and liabilities recognized on consolidated balance sheets | Pension Benefits Postretirement Benefits (in thousands) 2017 2016 2017 2016 Other noncurrent assets $ $ $ - $ - Accrued compensation and benefits Accrued pension and postretirement benefits Net amount recognized $ $ $ $ |
Schedule of amount in accumulated other comprehensive income (loss) on consolidated balance sheets that have not yet been recognized as components of net periodic benefit cost | Pension Benefits Postretirement Benefits Year ended December 31, Year ended December 31, (in thousands) 2017 2016 2015 2017 2016 2015 Net actuarial (gain) loss at beginning of year $ $ $ $ $ $ Current year actuarial (gain) loss Amortization of actuarial (gain) loss Curtailment impact - - - - - Settlement impact - - - - Prior service cost - - - - Amortization of prior service cost (credit) Foreign currency translation - - - Net actuarial (gain) loss at end of year $ $ $ $ $ $ |
Schedule of components of net periodic benefit cost | Pension Benefits Postretirement Benefits Year ended December 31, (in thousands) 2017 2016 2015 2017 2016 2015 Components of net periodic benefit cost Service cost $ $ $ $ $ $ Interest cost Expected return on plan assets - - - Curtailment income - - - - - Settlement expense - - - - Amortization of net (gain) loss Amortization of prior service cost (credit) Net periodic benefit cost $ $ $ $ $ $ |
Schedule of weighted average assumptions used to determine future benefit obligations and net periodic benefit cost | The weighted average assumptions used to determine benefit obligations at December 31, 2017 and 2016 were as follows: Pension Benefits Postretirement Benefits 2017 2016 2017 2016 Discount rate Rate of compensation increase N/A N/A The weighted average assumptions used to determine net periodic benefit cost for the years ended December 31, 2017, 2016 and 2015 were as follows: Pension Benefits Postretirement Benefits 2017 2016 2015 2017 2016 2015 Discount rate Expected long-term rate of return on plan assets N/A N/A N/A Rate of compensation increase N/A N/A N/A |
Schedule of assumed healthcare cost trend rates used to determine benefit obligations and net cost | Postretirement Benefits Medical and Prescription Drug 2017 2016 2015 Healthcare cost trend rate assumed for next year 5.5%/8.5% 5.50%/9.00% 5.75/10.00% Rate that the cost trend rate is assumed to decline Year that the rate reaches the ultimate trend rate |
Schedule of one-percentage-point change in assumed healthcare cost trend rates | 2017 2016 One-Percentage One-Percentage One-Percentage One-Percentage (in thousands) Point Increase Point Decrease Point Increase Point Decrease Effect on total of service and interest cost $ 73 $ (65) $ 104 $ (91) Effect on postretirement benefit obligation 665 (598) 894 (796) |
Schedule of pension assets by major category of plan assets and type of fair value measurement | Pension assets by major category of plan assets and the type of fair value measurement as of December 31, 2017 were as follows: Pension Benefits – Plan Assets Quoted Prices in Significant Significant Active Markets for Observable Unobservable Identical Assets Inputs Inputs (in thousands) Total (Level 1) (Level 2) (Level 3) Asset category Individual securities Fixed income $ $ - $ $ - Commingled funds Measured at net asset value - - - $ $ - $ $ - Pension assets by major category of plan assets and the type of fair value measurement as of December 31, 2016 were as follows: Pension Benefits – Plan Assets Quoted Prices in Significant Significant Active Markets for Observable Unobservable Identical Assets Inputs Inputs (in thousands) Total (Level 1) (Level 2) (Level 3) Asset category Individual securities Fixed income $ $ - $ $ - Commingled funds Measured at net asset value - - - $ $ - $ $ - |
Schedule of estimated future retirement benefit payments | Pension Postretirement (in thousands) Benefits Benefits Year ending December 31, 2018 $ 36,506 $ 748 2019 20,544 828 2020 22,103 943 2021 23,751 1,078 2022 24,511 1,214 Thereafter 138,204 7,096 $ 265,619 $ 11,907 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Income Taxes | |
Schedule of components of income before income taxes | Year ended December 31, (in thousands) 2017 2016 2015 Domestic operations $ 61,158 $ (3,995) $ (48,544) Foreign operations 90,518 93,217 80,694 Income before income taxes $ 151,676 $ 89,222 $ 32,150 |
Schedule of reconciliation of income taxes | Year ended December 31, (in thousands) 2017 2016 2015 Income tax expense computed at federal statutory income tax rate $ 53,086 $ 31,229 $ 11,252 Foreign taxes, net of credits (15,545) (1,804) 418 Transition tax (net of federal tax credits generated) 8,593 - - US rate change related to the 2017 Tax Act 10,198 - - Net adjustments for uncertain tax positions 508 706 4,731 State and local taxes 2,031 (525) (1,108) Equity appreciation rights (765) 372 693 Transaction costs 189 3,078 414 Indemnified taxes (115) 1,594 (1,106) Fair value adjustment for common stock warrants — 3,029 10,853 Valuation allowance (219) 955 7,872 Deferred charge (1,295) 1,009 807 Tax credits (3,240) (704) (7,003) Miscellaneous other, net 1,630 768 171 Income tax expense as reported $ 55,056 $ 39,707 $ Effective income tax rate 36.3 % 44.5 % 87.1 % |
Schedule of reconciliation of activity related to unrecognized tax benefits, excluding accrued interest and penalties | (in thousands) 2017 2016 2015 Unrecognized tax benefits at beginning of year $ $ $ Gross additions - prior year tax positions - Gross additions - current year tax positions Gross reductions - prior year tax positions Gross reductions - Acquired tax positions settled with tax authorities - - Impact of change in foreign exchange rates Unrecognized tax benefits at end of year $ $ $ |
Schedule of income tax expense | Year ended December 31, (in thousands) 2017 2016 2015 Current expense (benefit) United States $ (906) $ 3,702 $ 5,455 Foreign 28,109 28,156 20,351 Current income tax expense (benefit) 27,203 31,858 25,806 Deferred expense (benefit) United States 27,770 9,489 (152) Foreign 83 (1,640) 2,340 Deferred income tax expense (benefit) 27,853 7,849 2,188 Total income tax expense $ 55,056 $ 39,707 $ 27,994 |
Schedule of components of net deferred tax assets (liabilities) | December 31, (in thousands) 2017 2016 Deferred tax assets Compensation and benefits $ 14,060 $ 22,053 Share-based compensation Equity appreciation rights - 57,146 Pension and other postretirement benefits 30,564 45,926 Inventories 10,843 9,120 Accounts receivable 2,016 2,942 Customer sales incentives 2,255 3,254 Transaction costs 1,804 3,157 Other reserves 3,255 5,764 Interest 562 2,260 Miscellaneous 1,224 1,076 Foreign exchange derivative instruments - Net operating loss and other tax carryforwards 103,455 55,936 Gross deferred tax assets 175,853 214,108 Valuation allowance (25,887) (21,726) Total deferred tax assets 149,966 192,382 Deferred tax liabilities Property, plant and equipment (11,325) (17,496) Identifiable intangible assets (36,687) (46,701) Foreign exchange derivative instruments - (4,076) Miscellaneous (954) (1,145) Total deferred tax liabilities Net deferred tax asset $ $ |
Schedule of changes in valuation allowance for deferred tax assets | Year ended December 31, (in thousands) 2017 2016 2015 Valuation allowance at beginning of year $ $ $ Increases (decreases) recorded to income tax provision Valuation allowance at end of year $ $ $ |
Interest Expense and Other (I42
Interest Expense and Other (Income) Expense, Net (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Interest Expense and Other (Income) Expense, Net | |
Schedule of components of interest expense, net | Year ended December 31, (in thousands) 2017 2016 2015 Interest expense - related party $ — $ 28,146 $ 35,420 Interest expense - third party 16,907 23,113 26,567 Interest income - third party Total interest expense, net $ $ $ |
Schedule of Other Nonoperating Income (Expense) [Table Text Block] | Year ended December 31, (in thousands) 2017 2016 2015 Loss on fair value of common stock warrants $ — $ 6,112 $ 28,364 Indemnification (gains) losses 177 (2,174) (3,007) Other gains (1,254) (2,232) (218) Total other (income) expense, net $ (1,077) $ 1,706 $ 25,139 |
Common Stock (Tables)
Common Stock (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Common Stock. | |
Schedule of declared dividends per share | Dividends per Share Amounts 2017: Fourth Quarter $ 0.12 $ 9,098 Third Quarter 0.12 9,146 Second Quarter 0.12 9,149 First Quarter 0.12 9,152 Total dividends declared $ 0.48 $ 36,545 |
Equity Incentive Plans (Tables)
Equity Incentive Plans (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Equity Incentive Plans | |
Schedule of summary of the Company’s restricted and performance stock units | Weighted- Number Average of Fair RSUs and PSUs Value Outstanding at December 31, 2015 — $ — Granted 2,459,166 20.40 Outstanding at December 31, 2016 $ 20.40 Granted 18.82 Vested (437,188) 20.33 Forfeited (199,320) 20.45 Outstanding at December 31, 2017 2,060,854 $ 20.23 |
Schedule of the company's EAR activity | Weighted- Weighted- Number Average Average Aggregate of Exercise Remaining Intrinsic (in thousands, except share and per share amounts) Awards Price Contractual Term Value Outstanding at December 31, 2015 $ 11.40 1 year $ 171,712 Settled 11.12 — Outstanding at December 31, 2016 7,614,000 19.90 151,511 Settled (7,614,000) (19.90) — Outstanding at December 31, 2017 — — — |
Schedule of the allocation of share-based compensation expense attributed to RSUs, PSUs, EARs and stock options in the consolidated statement of operations | Year ended December 31, (in thousands) 2017 2016 2015 Cost of goods sold $ 408 $ 434 $ 670 Selling, general and administrative expense 13,687 18,622 48,377 Research and development 1,190 1,485 2,556 Total compensation expense before income tax 15,285 20,541 51,603 Income tax benefit 3,158 6,481 17,821 Total compensation expense, net of tax $ 12,127 $ 14,060 $ 33,782 |
Accumulated Other Comprehensi45
Accumulated Other Comprehensive Income (Loss), Net of Tax (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax | |
Schedule of changes in each component of accumulated comprehensive income (loss), net of tax effects | Foreign Gains (Losses) on Gains (Losses) Pension and Accumulated Currency Foreign Exchange on Available- Other Other Translation Derivative for-Sale Postretirement Comprehensive (in thousands) Adjustments Instruments Securities Adjustments Loss Balances at December 31, 2015 $ $ $ $ $ Other comprehensive income (loss) before reclassifications Amounts reclassified from accumulated other comprehensive loss - - Tax benefit (expense) - Balances at December 31, 2016 $ $ $ $ $ Other comprehensive income (loss) before reclassifications Amounts reclassified from accumulated other comprehensive loss - - Tax benefit - Balances at December 31, 2017 $ $ $ $ $ |
Net Income per Common Share (Ta
Net Income per Common Share (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Net Income per Common Share | |
Schedule of computation of basic and diluted net income per common share | Year ended December 31, (in thousands, except share and per share amounts) 2017 2016 2015 Net income (loss) attributable to Acushnet Holdings Corp. $ $ $ Less: dividends earned by preferred shareholders - Less: allocation of undistributed earnings to preferred shareholders - - Net income (loss) attributable to common stockholders - basic Adjustments to net income (loss) for dilutive securities - - Net income (loss) attributable to common stockholders - diluted $ $ $ Weighted average number of common shares: Basic Diluted Net income (loss) per common share attributable to Acushnet Holdings Corp.: Basic $ 1.24 $ 0.74 $ (0.74) Diluted $ 1.23 $ 0.62 $ (0.74) |
Schedule of securities excluded from the calculation of diluted weighted average common shares. | Year ended December 31, 2017 2016 2015 Series A preferred stock - Stock options - - Warrants to purchase common stock - Convertible notes - - RSUs - - |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Segment Information | |
Schedule of information by reportable segment and a reconciliation to reported amounts | (in thousands) Year ended December 31, 2017 2016 2015 Net sales Titleist golf balls $ 512,041 $ 513,899 $ 535,465 Titleist golf clubs 397,987 430,966 388,304 Titleist golf gear 142,911 136,208 129,408 FootJoy golf wear 437,455 433,061 418,852 Other 69,864 58,141 30,929 Total net sales $ 1,560,258 $ 1,572,275 $ 1,502,958 Segment operating income Titleist golf balls $ 76,870 $ 76,236 $ 92,507 Titleist golf clubs 31,031 50,500 33,593 Titleist golf gear 16,584 12,119 12,170 FootJoy golf wear 26,380 18,979 26,056 Other 14,863 7,299 4,056 Total segment operating income 165,728 165,133 168,382 Reconciling items: Interest expense, net (15,709) (49,908) (60,294) EAR expense - (6,047) (45,814) Loss on fair value of common stock warrants - (6,112) (28,364) Transaction fees (686) (16,817) (2,141) Other 2,343 2,973 381 Total income before income tax $ 151,676 $ 89,222 $ 32,150 Depreciation and amortization Titleist golf balls $ 25,545 $ 26,104 $ 26,962 Titleist golf clubs 7,233 7,021 7,060 Titleist golf gear 1,425 1,250 1,368 FootJoy golf wear 6,058 5,759 5,540 Other 610 700 772 Total depreciation and amortization $ 40,871 $ 40,834 $ 41,702 |
Schedule of information as to the Company's operations in different geographical areas. Net sales are categorized based on the location in which the sale originates. Long-lived assets (property, plant and equipment) are categorized based on their location of domicile. | Year ended December 31, (in thousands) 2017 2016 2015 Net sales United States $ 789,879 $ 804,516 $ 805,470 EMEA (1) 205,200 210,088 201,106 Japan 201,264 219,021 182,163 Korea 200,394 175,956 144,956 Rest of world 163,521 162,694 169,263 Total net sales $ 1,560,258 $ 1,572,275 $ 1,502,958 (1) Europe, the Middle East and Africa (“EMEA”) Long-lived assets (property, plant and equipment) are categorized based on their location of domicile. Year ended December 31, (in thousands) 2017 2016 Long-lived assets United States $ 148,678 $ 157,884 EMEA 9,669 8,619 Japan 770 628 Korea 3,782 1,811 Rest of world (2) 66,023 70,806 Total long-lived assets $ 228,922 $ 239,748 (2) Includes manufacturing facilities in Thailand with long lived assets of $53.8 million and $57.8 million as of December 31, 2017 and 2016, respectively. |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies | |
Schedule of purchase obligations | Payments Due by Period (in thousands) 2018 2019 2020 2021 2022 Thereafter Purchase obligations $ 141,278 $ 10,188 $ 3,737 $ 405 $ 2 $ — |
Schedule of future minimum rental payments under noncancelable operating leases | (in thousands) Year ending December 31, 2018 $ 12,119 2019 10,286 2020 8,447 2021 6,247 2022 4,228 Thereafter 14,418 Total minimum rental payments $ 55,745 |
Unaudited Quarterly Financial49
Unaudited Quarterly Financial Data (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Unaudited Quarterly Financial Data | |
Tabular disclosures of summary of quarterly results | Quarter ended (unaudited) (in thousands) December 31, September 30, June 30, March 31, 2017 Net sales $ 351,392 $ 347,263 $ 427,988 $ 433,615 Gross profit 178,500 172,968 222,909 226,415 Income from operations 26,370 18,265 57,385 64,288 Net income 12,318 10,634 34,038 39,630 Net income attributable to Acushnet Holdings Corp. 11,666 9,318 33,016 38,114 Net income per common share attributable to Acushnet Holdings Corp.: Basic $ 0.16 $ 0.13 $ 0.44 $ 0.51 Diluted $ 0.16 $ 0.12 $ 0.44 $ 0.51 Quarter ended (unaudited) (in thousands) December 31, September 30, June 30, March 31, 2016 Net sales $ 329,761 $ 339,318 $ 463,261 $ 439,935 Gross profit 167,994 166,902 237,960 225,869 Income from operations 7,608 9,606 66,437 57,185 Net income (loss) 1,247 (4,402) 27,478 25,192 Net income (loss) attributable to Acushnet Holdings Corp. (179) (5,526) 27,055 23,662 Net income (loss) per common share attributable to Acushnet Holdings Corp.: Basic $ (0.02) $ (0.38) $ 0.62 $ 0.53 Diluted $ (0.02) $ (0.38) $ 0.39 $ 0.35 |
Summary of Significant Accoun50
Summary of Significant Accounting Policies (Details) $ / shares in Units, $ in Millions | Nov. 02, 2016$ / sharesshares | Oct. 14, 2016 | Dec. 31, 2017USD ($)$ / shares | Sep. 30, 2017$ / shares | Jun. 30, 2017$ / shares | Mar. 31, 2017$ / shares | Dec. 31, 2017USD ($)$ / shares | Dec. 31, 2016USD ($) | Oct. 02, 2016 |
Cash and Restricted Cash | |||||||||
Restricted cash | $ | $ 2.3 | $ 2.3 | $ 3.1 | ||||||
Allowance for Sales Returns | |||||||||
Allowance for sales returns | $ | $ 13.5 | 9.8 | |||||||
Dividend declarations | |||||||||
Dividends per Share | $ / shares | $ 0.12 | $ 0.12 | $ 0.12 | $ 0.12 | $ 0.48 | ||||
VIE | |||||||||
Variable interest entities | |||||||||
Ownership percentage | 40.00% | 40.00% | |||||||
Outstanding Balance | $ | $ 0 | $ 0 | 0 | ||||||
Class of Stock, Common | |||||||||
Initial public offering | |||||||||
Shares converted | shares | 11,556,495 | ||||||||
Debt converted | shares | 22,791,852 | ||||||||
Stock split | 9 | ||||||||
Class of Stock, Common | Initial public offering | |||||||||
Initial public offering | |||||||||
Shares issued | shares | 19,333,333 | ||||||||
Share price (in dollars per share) | $ / shares | $ 17 | ||||||||
Class of Stock, Common | Over-allotment option | |||||||||
Initial public offering | |||||||||
Shares issued | shares | 2,899,999 | ||||||||
Share price (in dollars per share) | $ / shares | $ 17 | ||||||||
Magnus | Class of Stock, Common | |||||||||
Initial public offering | |||||||||
Shares purchased by Magnus | shares | 14,818,720 | ||||||||
Convertible debt | |||||||||
Initial public offering | |||||||||
Interest rate (as a percent) | 7.50% | ||||||||
Accounts payable | |||||||||
Cash and Restricted Cash | |||||||||
Book Overdrafts | $ | 2.9 | 2.9 | 3.6 | ||||||
Deposits | |||||||||
Allowance for Sales Returns | |||||||||
Concentration risk | $ | $ 44.7 | $ 44.7 | $ 75.6 |
Summary of Significant Accoun51
Summary of Significant Accounting Policies - Property, Plant, and Equipment (Details) | 12 Months Ended |
Dec. 31, 2017 | |
Maximum | |
Property, Plant and Equipment | |
Weighted average useful life | 10 years |
Minimum | |
Property, Plant and Equipment | |
Weighted average useful life | 3 years |
Buildings and improvements | Maximum | |
Property, Plant and Equipment | |
Estimated useful lives of property, plant and equipment | 40 years |
Buildings and improvements | Minimum | |
Property, Plant and Equipment | |
Estimated useful lives of property, plant and equipment | 15 years |
Machinery and equipment | Maximum | |
Property, Plant and Equipment | |
Estimated useful lives of property, plant and equipment | 10 years |
Machinery and equipment | Minimum | |
Property, Plant and Equipment | |
Estimated useful lives of property, plant and equipment | 3 years |
Furniture, fixtures and computer hardware | Maximum | |
Property, Plant and Equipment | |
Estimated useful lives of property, plant and equipment | 10 years |
Furniture, fixtures and computer hardware | Minimum | |
Property, Plant and Equipment | |
Estimated useful lives of property, plant and equipment | 3 years |
Computer software | Maximum | |
Property, Plant and Equipment | |
Estimated useful lives of property, plant and equipment | 10 years |
Computer software | Minimum | |
Property, Plant and Equipment | |
Estimated useful lives of property, plant and equipment | 1 year |
Summary of Significant Accoun52
Summary of Significant Accounting Policies - Additional Policies (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Goodwill and Indefinite-Lived Intangible Assets | |||
Impairment of goodwill | $ 0 | $ 0 | $ 0 |
impairment of trademarks | 0 | ||
Advertising and Promotion | |||
Shipping and handling costs included in selling expenses | 32,500 | 32,400 | 32,600 |
Selling, general and administrative | |||
Advertising and Promotion | |||
Advertising and promotional expense | 192,700 | 196,000 | 203,300 |
Foreign currency translation and transactions | |||
Transaction gain (loss) included in selling, general and administrative expense | $ 4,100 | $ 1,200 | $ 4,700 |
Maximum | |||
Product Warranty | |||
Product warranty duration | 2 years | ||
Minimum | |||
Product Warranty | |||
Product warranty duration | 1 year |
Allowance for Doubtful Accoun53
Allowance for Doubtful Accounts (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Financing Receivable, Allowance for Credit Losses [Roll Forward] | |||
Balance at beginning of year | $ 12,255 | $ 12,363 | $ 8,528 |
Bad debt expense | 337 | 6,507 | 4,771 |
Amount of receivables written off | (3,300) | (6,315) | (634) |
Foreign currency translation | 683 | (300) | (302) |
Balance at end of year | $ 9,975 | $ 12,255 | $ 12,363 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Inventories | ||
Raw materials and supplies | $ 72,342 | $ 55,424 |
Work-in-process | 23,956 | 21,558 |
Finished goods | 267,664 | 246,307 |
Inventories | $ 363,962 | $ 323,289 |
Property, Plant and Equipment55
Property, Plant and Equipment, Net (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Property, Plant and Equipment, Net | |||
Property, plant and equipment, gross | $ 409,292 | $ 391,112 | |
Accumulated depreciation and amortization | (180,370) | (151,364) | |
Property, plant and equipment, net | 228,922 | 239,748 | |
Software development cost capitalized | |||
Software development cost capitalized | 3,100 | 8,200 | $ 43,000 |
Depreciation and amortization | |||
Amortization expense, capitalized software and development | 6,400 | 5,800 | 5,500 |
Total depreciation and amortization expense | 40,871 | 40,834 | 41,702 |
Property, plant and equipment | |||
Depreciation and amortization | |||
Total depreciation and amortization expense | 31,600 | 31,500 | 32,500 |
Land | |||
Property, Plant and Equipment, Net | |||
Property, plant and equipment, gross | 14,618 | 14,500 | |
Buildings and improvements | |||
Property, Plant and Equipment, Net | |||
Property, plant and equipment, gross | 138,570 | 133,844 | |
Machinery and equipment | |||
Property, Plant and Equipment, Net | |||
Property, plant and equipment, gross | 148,999 | 143,784 | |
Furniture, fixtures and computer hardware | |||
Property, Plant and Equipment, Net | |||
Property, plant and equipment, gross | 32,783 | 29,326 | |
Computer software | |||
Property, Plant and Equipment, Net | |||
Property, plant and equipment, gross | 60,736 | 58,462 | |
Construction in progress | |||
Property, Plant and Equipment, Net | |||
Property, plant and equipment, gross | 13,586 | 11,196 | |
Software development cost capitalized | |||
Software development cost capitalized | 700 | 800 | 2,400 |
Software placed into service | |||
Software development cost capitalized | |||
Software development cost capitalized | $ 2,400 | $ 7,400 | $ 40,600 |
Goodwill and Identifiable Int56
Goodwill and Identifiable Intangible Assets, Net - Net carrying value & reportable segments (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Net carrying value of goodwill | ||
Balances at beginning of year | $ 179,241 | $ 181,179 |
Foreign currency translation | 6,700 | (1,938) |
Balances at end of year | 185,941 | 179,241 |
Titleist golf balls | ||
Net carrying value of goodwill | ||
Balances at beginning of year | 105,422 | 106,561 |
Foreign currency translation | 3,941 | (1,139) |
Balances at end of year | 109,363 | 105,422 |
Titleist golf clubs | ||
Net carrying value of goodwill | ||
Balances at beginning of year | 51,199 | 51,753 |
Foreign currency translation | 1,914 | (554) |
Balances at end of year | 53,113 | 51,199 |
Titleist golf gear | ||
Net carrying value of goodwill | ||
Balances at beginning of year | 12,415 | 12,549 |
Foreign currency translation | 464 | (134) |
Balances at end of year | 12,879 | 12,415 |
FootJoy golf wear | ||
Net carrying value of goodwill | ||
Balances at beginning of year | 2,278 | 2,303 |
Foreign currency translation | 85 | (25) |
Balances at end of year | 2,363 | 2,278 |
Other | ||
Net carrying value of goodwill | ||
Balances at beginning of year | 7,927 | 8,013 |
Foreign currency translation | 296 | (86) |
Balances at end of year | $ 8,223 | $ 7,927 |
Goodwill and Identifiable Int57
Goodwill and Identifiable Intangible Assets, Net - Amortization expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Finite Lived And Indefinite Lived Intangible Assets By Major Class[Line Items] | |||
Accumulated amortization | $ (72,971) | $ (63,434) | |
Finite lived intangible assets, Net book value | 53,134 | ||
Intangible assets, Gross | 554,205 | 553,422 | |
Intangible assets, Net book value | 481,234 | 489,988 | |
Impairment of goodwill | 0 | 0 | $ 0 |
Impairment charges to indefinite-lived intangible assets | 0 | 0 | 0 |
Amortization of intangible assets | $ 9,300 | 9,300 | 9,300 |
Completed Technology | |||
Finite Lived And Indefinite Lived Intangible Assets By Major Class[Line Items] | |||
Weighted average useful life | 13 years | ||
Finite lived intangible assets, Gross | $ 73,900 | 73,900 | |
Accumulated amortization | (35,486) | (29,956) | |
Finite lived intangible assets, Net book value | $ 38,414 | 43,944 | |
Customer Relationships | |||
Finite Lived And Indefinite Lived Intangible Assets By Major Class[Line Items] | |||
Weighted average useful life | 20 years | ||
Finite lived intangible assets, Gross | $ 19,666 | 18,999 | |
Accumulated amortization | (6,309) | (5,146) | |
Finite lived intangible assets, Net book value | $ 13,357 | 13,853 | |
Licensing Fees and Other | |||
Finite Lived And Indefinite Lived Intangible Assets By Major Class[Line Items] | |||
Weighted average useful life | 7 years | ||
Finite lived intangible assets, Gross | $ 32,539 | 32,423 | |
Accumulated amortization | (31,176) | (28,332) | |
Finite lived intangible assets, Net book value | 1,363 | 4,091 | |
Licensing Fees and Other | Cost of goods sold | |||
Finite Lived And Indefinite Lived Intangible Assets By Major Class[Line Items] | |||
Amortization of intangible assets | 2,700 | 2,700 | $ 2,700 |
Trademarks | |||
Finite Lived And Indefinite Lived Intangible Assets By Major Class[Line Items] | |||
Indefinite lived intangible assets | $ 428,100 | $ 428,100 |
Goodwill and Identifiable Int58
Goodwill and Identifiable Intangible Assets, Net - Class of identifiable intangible assets (Details) $ in Thousands | Dec. 31, 2017USD ($) |
Amortization expense related to intangible assets | |
2,018 | $ 7,878 |
2,019 | 6,269 |
2,020 | 5,926 |
2,021 | 5,926 |
2,022 | 5,926 |
Thereafter | 21,209 |
Total | $ 53,134 |
Product Warranty (Details)
Product Warranty (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Activity for accrued warranty expense | |||
Balance at beginning of period | $ 3,526 | $ 3,345 | $ 2,989 |
Provision | 5,801 | 6,200 | 5,399 |
Claims paid/costs incurred | (5,653) | (5,940) | (4,929) |
Foreign currency translation | 149 | (79) | (114) |
Balance at end of period | $ 3,823 | $ 3,526 | $ 3,345 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2017 | |
Related Party Transaction [Line Items] | |||
Related party interest expense | $ 28,146 | $ 35,420 | |
Other current assets | |||
Related Party Transaction [Line Items] | |||
Receivables from related party | $ 900 | $ 500 |
Debt and Financing Arrangemen61
Debt and Financing Arrangements - Schedule of debt and financing arrangements (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Debt and financing arrangements | ||
Long-term debt | $ 446,563 | |
Other short-term borrowings | 10,298 | |
Capital lease obligations | 22 | $ 491 |
Debt issuance costs | (2,896) | (3,706) |
Total | 464,053 | 409,593 |
Less : short term debt and current portion of long term debt | 47,083 | 61,245 |
Long-term debt and capital lease obligations | 416,970 | 348,348 |
Delayed Draw Term Loan A Facility | ||
Debt and financing arrangements | ||
Long-term debt, gross | 95,000 | |
Revolving credit facility | ||
Debt and financing arrangements | ||
Long-term debt | 10,066 | 42,495 |
Term Loan | ||
Debt and financing arrangements | ||
Long-term debt | $ 351,563 | $ 370,313 |
Debt and Financing Arrangemen62
Debt and Financing Arrangements - Senior Secured Credit Facility (Details) $ in Thousands, ₩ in Millions, £ in Millions, CAD in Millions | Sep. 22, 2017KRW (₩)shares | Aug. 09, 2017USD ($) | Jul. 28, 2016CAD | Jul. 28, 2016USD ($) | Mar. 31, 2017USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Sep. 22, 2017USD ($) | Aug. 09, 2017GBP (£) | Aug. 09, 2017CAD | Aug. 09, 2017USD ($) | Apr. 27, 2016GBP (£) | Apr. 27, 2016CAD | Apr. 27, 2016USD ($) |
Line of Credit Facility [Line Items] | ||||||||||||||
Cash on hand | $ 23,600 | |||||||||||||
Proceeds from delayed draw term loan A facility | $ 100,000 | |||||||||||||
Available borrowing capacity | $ 254,800 | |||||||||||||
Minimum | ||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||
Beneficial Ownership percentage for change of control | 35.00% | |||||||||||||
Letters of credit | ||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||
Revolving credit facility | $ 10,200 | |||||||||||||
Senior Secured Credit Facility | ||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||
Contingent maximum increase to Borrowing Capacity | $ 200,000 | |||||||||||||
Secured leverage ratio | 2 | 2 | 2 | |||||||||||
Senior Secured Credit Facility | One month LIBOR | Minimum | ||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||
Variable rate of interest | 1.25% | |||||||||||||
Senior Secured Credit Facility | One month LIBOR | Maximum | ||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||
Variable rate of interest | 2.00% | |||||||||||||
Senior Secured Credit Facility | Letters of credit | ||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||
Maximum borrowing capacity | $ 25,000 | $ 20,000 | ||||||||||||
Revolving credit facility | ||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||
Maximum borrowing capacity | 275,000 | |||||||||||||
Proceeds from revolver loan facility | CAD 4 | 3,000 | ||||||||||||
Weighted average interest rate | 4.44% | 2.48% | ||||||||||||
Swing line | ||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||
Maximum borrowing capacity | 25,000 | |||||||||||||
Swing line | Federal funds rate | ||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||
Variable rate of interest | 0.50% | |||||||||||||
Swing line | One Month LIBOR | ||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||
Floor rate | 1.00% | |||||||||||||
Swing line | One Month LIBOR | Minimum | ||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||
Leverage ratio basis spread | 0.25% | |||||||||||||
Swing line | One Month LIBOR | Maximum | ||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||
Leverage ratio basis spread | 1.00% | |||||||||||||
Alternative Currency Sublimit | ||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||
Maximum borrowing capacity | 100,000 | |||||||||||||
Letters of credit | ||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||
Maximum borrowing capacity | $ 29,200 | $ 24,000 | ||||||||||||
Revolving credit facility | $ 14,300 | $ 11,600 | ||||||||||||
Term Loan A Facility | ||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||
Maximum borrowing capacity | 375,000 | |||||||||||||
Proceeds from revolver loan facility | $ 375,000 | |||||||||||||
Delayed Draw Term Loan A Facility | ||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||
Maximum borrowing capacity | $ 100,000 | $ 100,000 | ||||||||||||
Acushnet Canada | Senior Secured Credit Facility | CDOR | Minimum | ||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||
Variable rate of interest | 1.25% | |||||||||||||
Acushnet Canada | Senior Secured Credit Facility | CDOR | Maximum | ||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||
Variable rate of interest | 2.00% | |||||||||||||
Acushnet Canada | Senior Secured Credit Facility | Letters of credit | ||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||
Maximum borrowing capacity | CAD | CAD 35 | |||||||||||||
Acushnet Canada | Revolving credit facility | ||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||
Maximum borrowing capacity | CAD | CAD 25 | |||||||||||||
Acushnet Europe | Senior Secured Credit Facility | Letters of credit | ||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||
Maximum borrowing capacity | £ | £ 30 | |||||||||||||
Acushnet Europe | Revolving credit facility | ||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||
Maximum borrowing capacity | £ | £ 20 | |||||||||||||
Equity Appreciation Rights | Revolving credit facility | ||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||
Proceeds from revolver loan facility | $ 47,800 | |||||||||||||
Magnus | ||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||
Number of shares pledged | shares | 39,345,151 | |||||||||||||
Percentage of shares pledged | 52.60% | |||||||||||||
Loan to Value ratio (as a percent) | 75.00% | |||||||||||||
Number of grace days to cure breach | 60 years | |||||||||||||
Magnus | Revolving credit facility | ||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||
Maximum borrowing capacity | ₩ 10 | $ 9,400 | ||||||||||||
Exchange rate | 1,068.27 | 1,068.27 | ||||||||||||
Term Loan | Senior Secured Credit Facility | ||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||
Commitment fee of unused portion (as a percent) | 0.30% | |||||||||||||
Percentage of net cash proceeds of all non ordinary course asset sales | 100.00% | |||||||||||||
Percentage of net proceeds of issuance or incurrence of debt | 100.00% | |||||||||||||
Period of reinvest net cash proceeds from day of receipt | 12 months | |||||||||||||
Term Loan | Senior Secured Credit Facility | First and Second Year After July 28, 2016 | ||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||
Percentage of original principal amount payable | 5.00% | |||||||||||||
Term Loan | Senior Secured Credit Facility | Third And Fourth Year After July 28, 2016 | ||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||
Percentage of original principal amount payable | 7.50% | |||||||||||||
Term Loan | Senior Secured Credit Facility | Fifth Year After July 28, 2016 | ||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||
Percentage of original principal amount payable | 10.00% | |||||||||||||
Term Loan | Senior Secured Credit Facility | Minimum | ||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||
Commitment fee of unused portion (as a percent) | 0.20% | |||||||||||||
Term Loan | Senior Secured Credit Facility | Maximum | ||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||
Commitment fee of unused portion (as a percent) | 0.35% | |||||||||||||
Period of reinvest net cash proceeds from day of receipt | 18 months | |||||||||||||
Term Loan | Delayed Draw Term Loan A Facility | ||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||
Variable rate of interest | 3.32% | 2.27% | ||||||||||||
Term Loan | Magnus | ||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||
Maximum borrowing capacity | ₩ 399.2 | $ 373,700 | ||||||||||||
Term of the loan | 3 years | |||||||||||||
Exchange rate | 1,068.27 | 1,068.27 |
Debt and Financing Arrangemen63
Debt and Financing Arrangements - Convertible Notes (Details) - Convertible notes - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Nov. 01, 2016 | |
Convertible Notes | |||
Aggregate principal amount | $ 362.5 | ||
Interest expense, excluding amortization of debt issuance costs | $ 22.6 | $ 27.2 |
Debt and Financing Arrangemen64
Debt and Financing Arrangements - Secured Floating Rate Notes (Details) $ in Millions | Jul. 28, 2016USD ($) |
Secured Floating Rate Notes | |
Debt Instrument [Line Items] | |
Aggregate principal amount | $ 375 |
Debt and Financing Arrangemen65
Debt and Financing Arrangements - Other Short-Term Borrowings (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Short-term Debt [Line Items] | |
Other short-term borrowings | $ 10,298 |
Unsecured Debt [Member] | |
Short-term Debt [Line Items] | |
Other short-term borrowings | 53,800 |
Outstanding borrowings | $ 10,300 |
Weighted average interest rate | 0.73% |
Debt and Financing Arrangemen66
Debt and Financing Arrangements - Letters of Credit (Details) - Letters of credit - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Revolving credit facility | $ 14.3 | $ 11.6 |
Line of credit secured | 11.2 | 8.6 |
Maximum borrowing capacity | $ 29.2 | $ 24 |
Debt and Financing Arrangemen67
Debt and Financing Arrangements - Payments of Debt Obligations due by Period (Details) $ in Thousands | Dec. 31, 2017USD ($) |
Payments of Debt Obligations due by Period | |
2,018 | $ 26,719 |
2,019 | 35,625 |
2,020 | 38,594 |
2,021 | 345,625 |
Total | $ 446,563 |
Derivative Financial Instrume68
Derivative Financial Instruments - Bonds with Common Stock Warrants (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Jul. 31, 2016 | Jul. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | |
Derivative [Line Items] | ||||
Amount of warrants exercised | $ 34,503 | $ 34,503 | ||
Fila Korea Ltd | Common Stock Warrants | ||||
Derivative [Line Items] | ||||
Exercise price (in dollars per share) | $ 11.11 | $ 11.11 | ||
Amount of warrants exercised | $ 34,500 | $ 34,500 |
Derivative Financial Instrume69
Derivative Financial Instruments - Fair value of foreign exchange derivative instruments in consolidated balance sheets (Details) - Foreign exchange forward contracts - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Derivatives, Fair Value [Line Items] | ||
Notional amount | $ 278,900 | $ 371,200 |
Maximum | ||
Derivatives, Fair Value [Line Items] | ||
Term of derivative contract | 24 months | |
Derivative designated as hedging | Other current assets | ||
Derivatives, Fair Value [Line Items] | ||
Asset derivatives | $ 4,675 | 11,357 |
Derivative designated as hedging | Other noncurrent assets | ||
Derivatives, Fair Value [Line Items] | ||
Asset derivatives | 562 | 5,286 |
Derivative designated as hedging | Other current liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Liability derivatives | 6,360 | 1,106 |
Derivative designated as hedging | Other noncurrent liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Liability derivatives | $ 276 | $ 32 |
Derivative Financial Instrume70
Derivative Financial Instruments - Effect of foreign exchange derivative instruments in comprehensive income (loss) and statement of operations (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Derivative Instruments, Gain (Loss) [Line Items] | |||
Expected reclassification of loss recorded in accumulated other comprehensive loss into earnings during next twelve months | $ 2,100 | ||
Derivative designated as hedging | Foreign exchange forward contracts | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gain (Loss) Recognized in OCI | (15,558) | $ 7,014 | $ 14,964 |
Gain (Loss) Recognized in Statement of Operations | (1,403) | 4,277 | 30,538 |
Derivative designated as hedging | Foreign exchange forward contracts | Cash flow | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gain (Loss) Recognized in OCI | (15,558) | 7,014 | 14,964 |
Derivative designated as hedging | Cost of goods sold | Foreign exchange forward contracts | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gain (Loss) Recognized in Statement of Operations | 1,329 | 5,194 | 26,805 |
Derivative designated as hedging | Selling, general and administrative | Foreign exchange forward contracts | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gain (Loss) Recognized in Statement of Operations | $ (2,732) | $ (917) | $ 3,733 |
Fair Value Measurements - Asset
Fair Value Measurements - Assets and liabilities at fair value (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Liabilities | ||
Fair value asset, Transfer between Level 1 to Level 2 | $ 0 | $ 0 |
Fair value asset, Transfer between Level 2 to Level 1 | 0 | 0 |
Fair value Liabilities, Transfer between Level 1 to Level 2 | 0 | 0 |
Fair value Liabilities, Transfer between Level 2 to Level 1 | 0 | 0 |
Level 1 | ||
Assets | ||
Total assets | 12,503 | 14,088 |
Liabilities | ||
Total liabilities | 1,866 | 1,846 |
Level 2 | ||
Assets | ||
Total assets | 5,237 | 16,643 |
Liabilities | ||
Total liabilities | 6,636 | 1,138 |
Other current assets | Rabbi trust | Level 1 | ||
Assets | ||
Total assets | 10,637 | 6,994 |
Other current assets | Foreign exchange derivative instruments | Level 2 | ||
Assets | ||
Total assets | 4,675 | 11,357 |
Other noncurrent assets | Rabbi trust | Level 1 | ||
Assets | ||
Total assets | 5,248 | |
Other noncurrent assets | Foreign exchange derivative instruments | Level 2 | ||
Assets | ||
Total assets | 562 | 5,286 |
Other noncurrent assets | Deferred compensation program assets | Level 1 | ||
Assets | ||
Total assets | 1,866 | 1,846 |
Other current liabilities | Foreign exchange derivative instruments | Level 2 | ||
Liabilities | ||
Total liabilities | 6,360 | 1,106 |
Other noncurrent liabilities | Foreign exchange derivative instruments | Level 2 | ||
Liabilities | ||
Total liabilities | 276 | 32 |
Other noncurrent liabilities | Deferred compensation program liabilities | Level 1 | ||
Liabilities | ||
Total liabilities | $ 1,866 | $ 1,846 |
Fair Value Measurements - Recon
Fair Value Measurements - Reconciliation for liabilities measure at fair value using level 3 (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Reconciliation of Liabilities Measured at Fair Value on a Recurring Basis Using Significant Unobservable Inputs (Level 3) | |
Balance at beginning of period | $ 22,884 |
Common stock warrant exercise | (28,996) |
Total losses included in earnings | $ 6,112 |
Pension and Other Postretirem73
Pension and Other Postretirement Benefits - (Details) - USD ($) $ in Thousands | Nov. 13, 2015 | Dec. 31, 2017 | Dec. 31, 2015 |
Pension and Other Postretirement Benefits | |||
Service period | 1 year | ||
Vesting service period | 10 years | ||
Age plus vesting period | 70 years | ||
Cap amount | $ 150,000 | ||
Curtailment gain | $ 2,400 | ||
Minimum | |||
Pension and Other Postretirement Benefits | |||
Age limit | 50 years | ||
Maximum | |||
Pension and Other Postretirement Benefits | |||
Age limit | 65 years |
Pension and Other Postretirem74
Pension and Other Postretirement Benefits - Plan assets and funded status (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Change in projected benefit obligation (PBO) | |||
Curtailment gain | $ 2,400 | ||
Pension Benefits (Underfunded) | |||
Change in projected benefit obligation (PBO) | |||
Projected benefit obligation at beginning of year | $ 284,104 | $ 271,462 | |
Service cost | 9,217 | 9,787 | |
Interest cost | 10,783 | 11,077 | |
Actuarial (gain) loss | 34,557 | 14,095 | |
Settlements | (20,663) | (6,714) | |
Curtailment gain | (6,714) | ||
Benefit payments | (2,719) | (15,515) | |
Foreign currency translation | 1,435 | 122 | |
Adjustment for movement from underfunded to overfunded | 168 | (210) | |
Projected benefit obligation at end of year | 316,882 | 284,104 | 271,462 |
Accumulated benefit obligation at end of year | 277,067 | 247,009 | |
Change in plan assets | |||
Fair value of plan assets at beginning of year | 161,088 | 157,729 | |
Return on plan assets | 23,757 | 7,203 | |
Employer contributions | 21,280 | 18,335 | |
Settlements | (20,663) | ||
Benefit payments | (2,719) | (15,515) | |
Adjustment for movement from underfunded to overfunded | 194 | ||
Foreign currency translation | 156 | 50 | |
Fair value of plan assets at end of year | 183,093 | 161,088 | 157,729 |
Funded status (fair value of plan assets less PBO) | (133,789) | (123,016) | |
Pension Benefits (Overfunded) | |||
Change in projected benefit obligation (PBO) | |||
Projected benefit obligation at beginning of year | 39,735 | 38,287 | |
Service cost (negative) | (24) | ||
Interest cost | 1,049 | 1,279 | |
Actuarial (gain) loss | (2,000) | 7,711 | |
Settlements | (5,172) | ||
Benefit payments | (635) | (796) | |
Foreign currency translation | 2,659 | (6,932) | |
Adjustment for movement from underfunded to overfunded | (168) | 210 | |
Projected benefit obligation at end of year | 35,468 | 39,735 | 38,287 |
Accumulated benefit obligation at end of year | 34,190 | 37,289 | |
Change in plan assets | |||
Fair value of plan assets at beginning of year | 45,342 | 43,768 | |
Return on plan assets | 6,254 | 8,280 | |
Employer contributions | 1,697 | 2,012 | |
Settlements | (5,172) | ||
Benefit payments | (635) | (796) | |
Adjustment for movement from underfunded to overfunded | (194) | ||
Foreign currency translation | 3,475 | (7,922) | |
Fair value of plan assets at end of year | 50,767 | 45,342 | 43,768 |
Funded status (fair value of plan assets less PBO) | 15,299 | 5,607 | |
Postretirement Benefits | |||
Change in projected benefit obligation (PBO) | |||
Projected benefit obligation at beginning of year | 20,264 | 20,079 | |
Service cost | 955 | 888 | 1,060 |
Interest cost | 713 | 779 | 787 |
Actuarial (gain) loss | (5,075) | (572) | |
Plan amendments | 283 | ||
Participants' contributions | 355 | 921 | |
Benefit payments | (1,160) | (2,114) | |
Projected benefit obligation at end of year | 16,052 | 20,264 | $ 20,079 |
Accumulated benefit obligation at end of year | 16,052 | 20,264 | |
Change in plan assets | |||
Employer contributions | 805 | 1,193 | |
Participants' contributions | 355 | 921 | |
Benefit payments | (1,160) | (2,114) | |
Funded status (fair value of plan assets less PBO) | $ (16,052) | $ (20,264) |
Pension and Other Postretirem75
Pension and Other Postretirement Benefits - Recognized on consolidated balance sheets (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Assets and liabilities recognized on consolidated balance sheets: | |||
Accrued pension and postretirement benefits | $ (130,160) | $ (135,339) | |
Expected prior service cost (credit) and actuarial (gain) loss will be amortized in next fiscal year | |||
Expected actuarial (gain) loss will be amortized from accumulated other comprehensive income (loss) into net periodic benefit cost in the next fiscal year | 100 | ||
Pension Benefits | |||
Assets and liabilities recognized on consolidated balance sheets: | |||
Other noncurrent assets | 15,299 | 5,607 | |
Accrued compensation and benefits | (18,933) | (7,149) | |
Accrued pension and postretirement benefits | (114,856) | (115,867) | |
Net amount recognized | (118,490) | (117,409) | |
Accumulated other comprehensive income (loss) on consolidated balance sheets that have not yet been recognized as components of net periodic benefit cost: | |||
Net actuarial (gain) loss at beginning of year | 33,736 | 18,374 | $ 19,878 |
Current year actuarial (gain) loss | 14,554 | 18,425 | 17,835 |
Amortization of actuarial (gain) loss | (804) | (485) | (1,152) |
Curtailment impact | (19,146) | ||
Settlement impact | (2,740) | (1,124) | |
Prior service cost | 1,331 | ||
Amortization of prior service cost (credit) | (175) | (175) | (22) |
Foreign currency translation | 321 | (1,279) | (350) |
Net actuarial (gain) loss at end of year | 44,892 | 33,736 | 18,374 |
Expected prior service cost (credit) and actuarial (gain) loss will be amortized in next fiscal year | |||
Expected prior service cost (credit) will be amortized from accumulated other comprehensive income (loss) into net periodic benefit cost in the next fiscal year | 200 | ||
Expected actuarial (gain) loss will be amortized from accumulated other comprehensive income (loss) into net periodic benefit cost in the next fiscal year | 2,100 | ||
Postretirement Benefits | |||
Assets and liabilities recognized on consolidated balance sheets: | |||
Accrued compensation and benefits | (748) | (784) | |
Accrued pension and postretirement benefits | (15,304) | (19,480) | |
Net amount recognized | (16,052) | (20,264) | |
Accumulated other comprehensive income (loss) on consolidated balance sheets that have not yet been recognized as components of net periodic benefit cost: | |||
Net actuarial (gain) loss at beginning of year | (8,055) | (8,840) | (7,270) |
Current year actuarial (gain) loss | (5,075) | (573) | (2,228) |
Amortization of actuarial (gain) loss | 601 | 912 | 490 |
Prior service cost | 283 | ||
Amortization of prior service cost (credit) | 137 | 163 | 168 |
Net actuarial (gain) loss at end of year | (12,392) | $ (8,055) | $ (8,840) |
Expected prior service cost (credit) and actuarial (gain) loss will be amortized in next fiscal year | |||
Expected prior service cost (credit) will be amortized from accumulated other comprehensive income (loss) into net periodic benefit cost in the next fiscal year | 100 | ||
Expected actuarial (gain) loss will be amortized from accumulated other comprehensive income (loss) into net periodic benefit cost in the next fiscal year | $ 1,400 |
Pension and Other Postretirem76
Pension and Other Postretirement Benefits - Periodic benefit cost (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Pension Benefits | |||
Components of net periodic benefit cost | |||
Service cost | $ 9,217 | $ 9,763 | $ 15,683 |
Interest cost | 11,832 | 12,356 | 12,338 |
Expected return on plan assets | (12,006) | (12,189) | (11,372) |
Curtailment Expense (Income) | (2,421) | ||
Settlement expense | 2,740 | 1,148 | |
Amortization of net (gain) loss | 804 | 471 | 1,152 |
Amortization of prior service cost (credit) | 175 | 175 | 22 |
Net periodic benefit cost | 12,762 | 11,724 | 15,402 |
Postretirement Benefits | |||
Components of net periodic benefit cost | |||
Service cost | 955 | 888 | 1,060 |
Interest cost | 713 | 779 | 787 |
Amortization of net (gain) loss | (601) | (912) | (490) |
Amortization of prior service cost (credit) | (137) | (163) | (168) |
Net periodic benefit cost | $ 930 | $ 592 | $ 1,189 |
Pension and Other Postretirem77
Pension and Other Postretirement Benefits - Weighted average assumptions (Details) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Weighted average assumptions used to determine net cost for years ended December 31 | |||
Expected long-term rate of return on plan assets | 5.77% | ||
Pension Benefits | |||
Weighted average assumptions used to determine benefit obligations at December 31 | |||
Discount rate | 3.62% | 4.17% | |
Rate of compensation increase | 4.01% | 4.02% | |
Weighted average assumptions used to determine net cost for years ended December 31 | |||
Discount rate | 4.17% | 4.16% | 3.92% |
Expected long-term rate of return on plan assets | 5.77% | 6.23% | 6.15% |
Rate of compensation increase | 4.02% | 4.07% | 4.05% |
Postretirement Benefits | |||
Weighted average assumptions used to determine benefit obligations at December 31 | |||
Discount rate | 3.61% | 4.08% | |
Weighted average assumptions used to determine net cost for years ended December 31 | |||
Discount rate | 4.08% | 4.30% | 3.90% |
Pension and Other Postretirem78
Pension and Other Postretirement Benefits - Healthcare cost trend rates (Details) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Minimum | |||
Assumed healthcare cost trend rates used to determine benefit obligations and net cost: | |||
Healthcare cost trend rate assumed for next year | 5.50% | 5.50% | 5.75% |
Maximum | |||
Assumed healthcare cost trend rates used to determine benefit obligations and net cost: | |||
Healthcare cost trend rate assumed for next year | 8.50% | 9.00% | 10.00% |
Postretirement Benefits Medical and Prescription Drug | |||
Assumed healthcare cost trend rates used to determine benefit obligations and net cost: | |||
Rate that the cost trend rate is assumed to decline (the ultimate trend rate) | 4.50% | 4.50% | 4.50% |
Year that the rate reaches the ultimate trend rate | 2,024 | 2,024 | 2,024 |
Pension and Other Postretirem79
Pension and Other Postretirement Benefits - One-percentage-point (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
One-percentage-point change in assumed healthcare cost trend rates: | ||
Effect on total of service and interest cost, one-percentage point increase | $ 73 | $ 104 |
Effect on total of service and interest cost, one-percentage point decrease | (65) | (91) |
Effect on postretirement benefit obligation, one-percentage point increase | 665 | 894 |
Effect on postretirement benefit obligation, one-percentage point decrease | $ (598) | $ (796) |
Pension and Other Postretirem80
Pension and Other Postretirement Benefits - Plan assets and type of fair value measurement (Details) - Pension Benefits - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Pension and Other Postretirement Benefits | ||
Fair Value of plan Assets | $ 233,860 | $ 206,429 |
Level 2 | ||
Pension and Other Postretirement Benefits | ||
Fair Value of plan Assets | 1,794 | 1,628 |
Fixed income | ||
Pension and Other Postretirement Benefits | ||
Fair Value of plan Assets | 1,794 | 1,628 |
Fixed income | Level 2 | ||
Pension and Other Postretirement Benefits | ||
Fair Value of plan Assets | 1,794 | 1,628 |
Commingled funds | ||
Pension and Other Postretirement Benefits | ||
Fair Value of plan Assets | $ 232,066 | $ 204,801 |
Pension and Other Postretirem81
Pension and Other Postretirement Benefits - U.S. defined benefit plan (Details) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Pension and Other Postretirement Benefits | ||
Future expected blended long-term rate of return on plan assets (as a percent) | 5.77% | |
U.S. defined benefit plan | Return-seeking investment | ||
Pension and Other Postretirement Benefits | ||
Asset allocation (as a percent) | 64.00% | 76.00% |
U.S. defined benefit plan | Liability-hedging investment | ||
Pension and Other Postretirement Benefits | ||
Asset allocation (as a percent) | 24.00% | 36.00% |
Pension and Other Postretirem82
Pension and Other Postretirement Benefits - Estimated Contributions and Estimated Future Retirement Benefit Payments (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Estimated contribution | |
Estimated contribution | $ 40,900 |
Pension Benefits | |
Estimated Future Retirement Benefit Payments, Year ending December 31, | |
2,018 | 36,506 |
2,019 | 20,544 |
2,020 | 22,103 |
2,021 | 23,751 |
2,022 | 24,511 |
Thereafter | 138,204 |
Total | 265,619 |
Postretirement Benefits | |
Estimated Future Retirement Benefit Payments, Year ending December 31, | |
2,018 | 748 |
2,019 | 828 |
2,020 | 943 |
2,021 | 1,078 |
2,022 | 1,214 |
Thereafter | 7,096 |
Total | $ 11,907 |
Pension and Other Postretirem83
Pension and Other Postretirement Benefits - International Plans (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Pension and Other Postretirement Benefits | |||
Pension expense | $ 0.9 | $ 1 | $ 0.9 |
Expected actuarial loss that will be amortized from accumulated other comprehensive income (loss) into net periodic benefit cost in next fiscal year | 0.1 | ||
International Plans | |||
Pension and Other Postretirement Benefits | |||
Total projected benefit obligations | 53.6 | 54.4 | |
Fair Value of plan Assets | $ 53.6 | $ 47.6 |
Pension and Other Postretirem84
Pension and Other Postretirement Benefits - Defined Contribution Plans (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Pension and Other Postretirement Benefits | |||
Cash contributions | $ 13.8 | $ 13 | $ 9.4 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Federal statutory income tax rate (as a percent) | 35.00% | |
Provisional income tax | $ 14 | |
Provisional tax rate effect on remeasurement | 10.2 | |
Provisional increase of one-time transition tax liability of foreign subsidiaries | 8.6 | |
Tax on foreign income | 23.8 | |
Foreign tax credit | 15.2 | |
unremitted foreign earnings | $ 4.8 | |
Forecast | ||
Federal statutory income tax rate (as a percent) | 21.00% |
Income Taxes - Components of in
Income Taxes - Components of income before income taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Components of income before income taxes: | |||
Domestic operations | $ 61,158 | $ (3,995) | $ (48,544) |
Foreign operations | 90,518 | 93,217 | 80,694 |
Income before income taxes | $ 151,676 | $ 89,222 | $ 32,150 |
Income Taxes - Reconciliation (
Income Taxes - Reconciliation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Taxes | |||
Federal statutory income tax rate (as a percent) | 35.00% | ||
Reconciliation of income taxes: | |||
Income tax expense computed at federal statutory income tax rate | $ 53,086 | $ 31,229 | $ 11,252 |
Foreign taxes, net of credits | (15,545) | (1,804) | 418 |
Transition tax ( net of federal tax credits generated) | 8,593 | ||
U.S. rate change related to the 2017 Tax Act | 10,198 | ||
Net adjustments for uncertain tax positions | 508 | 706 | 4,731 |
State and local taxes | 2,031 | (525) | (1,108) |
Equity appreciation rights | (765) | 372 | 693 |
Transaction costs | 189 | 3,078 | 414 |
Indemnified taxes | (115) | 1,594 | (1,106) |
Fair value adjustment for common stock warrants | 3,029 | 10,853 | |
Valuation allowance | (219) | 955 | 7,872 |
Deferred charge | (1,295) | 1,009 | 807 |
Tax credits | (3,240) | (704) | (7,003) |
Miscellaneous other, net | 1,630 | 768 | 171 |
Tax benefit (expense) | $ 55,056 | $ 39,707 | $ 27,994 |
Effective income tax rate (as a percent) | 36.30% | 44.50% | 87.10% |
Income Taxes - Unrecognized tax
Income Taxes - Unrecognized tax benefit (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Reconciliation of activity related to unrecognized tax benefits, excluding interest and penalties: | |||
Unrecognized tax benefits at beginning of year | $ 11,347 | $ 13,120 | $ 8,845 |
Gross reductions - prior year tax positions | (348) | (4,457) | (333) |
Gross additions - prior year tax positions | 1,960 | 3,045 | |
Gross additions - current year tax positions | 1,159 | 747 | 1,605 |
Gross reductions - Acquired tax positions settled with tax authorities | (1,241) | ||
Impact of change in foreign exchange rates | 132 | ||
Impact of change in foreign exchange rates | (23) | (42) | |
Unrecognized tax benefits at end of year | 11,049 | 11,347 | 13,120 |
Liability of interest and penalties | 2,700 | 2,300 | 1,900 |
Income Tax Expense (Benefit) | 55,056 | 39,707 | 27,994 |
Beam Suntory Inc [Member] | |||
Reconciliation of activity related to unrecognized tax benefits, excluding interest and penalties: | |||
Unrecognized tax benefits, would affect the company's future effective tax rate if recognized next 12 months | 4,900 | 5,900 | 4,200 |
Liability of interest and penalties | 2,700 | 1,800 | 1,600 |
Income Tax Expense (Benefit) | $ 200 | $ 2,200 | $ 3,000 |
Income Taxes - Income Tax Expen
Income Taxes - Income Tax Expenses (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Current expense (benefit) | |||
United States | $ (906) | $ 3,702 | $ 5,455 |
Foreign | 28,109 | 28,156 | 20,351 |
Current income tax expense (benefit) | 27,203 | 31,858 | 25,806 |
Deferred expense (benefit) | |||
United States | 27,770 | 9,489 | (152) |
Foreign | 83 | (1,640) | 2,340 |
Deferred Income Tax Expense (Benefit), Total | 27,853 | 7,849 | 2,188 |
Income tax expense as reported | $ 55,056 | $ 39,707 | $ 27,994 |
Income Taxes - Net deferred tax
Income Taxes - Net deferred tax assets (liabilities) (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Deferred tax assets | ||||
Compensation and benefits | $ 14,060 | $ 22,053 | ||
Share-based compensation | 5,085 | 5,474 | ||
Equity appreciation rights | 57,146 | |||
Pension and other postretirement benefits | 30,564 | 45,926 | ||
Inventories | 10,843 | 9,120 | ||
Accounts receivables | 2,016 | 2,942 | ||
Customer sales incentives | 2,255 | 3,254 | ||
Transaction costs | 1,804 | 3,157 | ||
Other reserves | 3,255 | 5,764 | ||
Interest | 562 | 2,260 | ||
Miscellaneous | 1,224 | 1,076 | ||
Foreign exchange derivative instruments | 730 | |||
Net operating loss and other tax carryforwards | 103,455 | 55,936 | ||
Gross deferred tax assets | 175,853 | 214,108 | ||
Valuation allowance | (25,887) | (21,726) | $ (20,771) | $ (13,850) |
Net deferred tax asset | 149,966 | 192,382 | ||
Deferred tax liabilities | ||||
Property, plant and equipment | (11,325) | (17,496) | ||
Identifiable intangible assets | (36,687) | (46,701) | ||
Foreign exchange derivative instruments | (4,076) | |||
Miscellaneous | (954) | (1,145) | ||
Total deferred tax liabilities | (48,966) | (69,418) | ||
Net deferred tax asset | $ 101,000 | $ 122,964 |
Income Taxes - NOL and Tax cred
Income Taxes - NOL and Tax credit carryforwards (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
State | ||
NOL and Tax credit carryfowards | ||
Net operating loss carryforwards | $ 192 | $ 117.2 |
Foreign | ||
NOL and Tax credit carryfowards | ||
Tax credit carryforwards | 72.8 | $ 46 |
Federal | ||
NOL and Tax credit carryfowards | ||
Net operating loss carryforwards | $ 26.4 |
Income Taxes - Changes in valua
Income Taxes - Changes in valuation allowance (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Changes in valuation allowance for deferred tax assets: | |||
Valuation allowance at beginning of year | $ 21,726 | $ 20,771 | $ 13,850 |
Increases (decreases) recorded to income tax provision | 4,161 | 955 | 6,921 |
Valuation allowance at end of year | $ 25,887 | $ 21,726 | $ 20,771 |
Interest Expense and Other (I93
Interest Expense and Other (Income) Expense, Net (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Interest Expense and Other (Income) Expense, Net | |||
Interest expense - related party | $ 28,146 | $ 35,420 | |
Interest expense - third party | $ 16,907 | 23,113 | 26,567 |
Interest income - third party | (1,198) | (1,351) | (1,693) |
Total interest expense, net | 15,709 | 49,908 | 60,294 |
Other Nonoperating Income (Expense) [Abstract] | |||
Loss on fair value of common stock warrants | 6,112 | 28,364 | |
Indemnification (gains) losses | 177 | (2,174) | (3,007) |
Other gains | (1,254) | (2,232) | (218) |
Other (income) expense, net | $ (1,077) | $ 1,706 | $ 25,139 |
Redeemable Convertible Prefer94
Redeemable Convertible Preferred Stock (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Nov. 01, 2016 | |
Temporary Equity [Line Items] | ||||
Dividend declared | $ 17,316 | $ 13,747 | ||
Dividend paid | 17,316 | $ 13,747 | ||
Redeemable Convertible Preferred Stock | ||||
Temporary Equity [Line Items] | ||||
Outstanding redeemable convertible preferred stock | 1,838,027 | |||
Par value | $ 0.001 | |||
Dividend declared | $ 17,300 | $ 13,700 |
Common Stock (Details)
Common Stock (Details) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||
Dec. 31, 2017USD ($)$ / sharesshares | Sep. 30, 2017USD ($)$ / shares | Jun. 30, 2017USD ($)$ / shares | Mar. 31, 2017USD ($)$ / shares | Dec. 31, 2017USD ($)Vote$ / sharesshares | Dec. 31, 2016Vote$ / sharesshares | Mar. 31, 2018$ / shares | |
Common stock, shares authorized | shares | 500,000,000 | 500,000,000 | 500,000,000 | ||||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 | ||||
Number of vote entitled | Vote | 1 | 1 | |||||
Total dividends declared | $ | $ 9,098 | $ 9,146 | $ 9,149 | $ 9,152 | $ 36,545 | ||
Dividends per Share | $ 0.12 | $ 0.12 | $ 0.12 | $ 0.12 | $ 0.48 | ||
Subsequent event | |||||||
Dividends declared | $ 0.13 |
Equity Incentive Plans - Restri
Equity Incentive Plans - Restricted Stock and Restricted Stock Units (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Sep. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Equity Incentive Plans | ||||
Share reserved for issuance | 7,804,279 | |||
Weighted - Average Fair Value | ||||
Weighted average period | 1 year 4 months 24 days | |||
Share-based compensation | $ 15,285 | $ 14,494 | $ 2,033 | |
Chief Operating Officer | ||||
Weighted - Average Fair Value | ||||
Fair Value of grant | $ 3,000 | |||
Performance period | 3 years | |||
Percentage of vesting | 33.33% | |||
PSUs | ||||
Number of RSUs and PSUs | ||||
Vested (in shares) | 0 | |||
Weighted - Average Fair Value | ||||
Unrecognized compensation expense | $ 6,100 | |||
Share-based compensation | 6,000 | 6,100 | ||
RSUs | ||||
Weighted - Average Fair Value | ||||
Vested at end of the period | 7,700 | |||
Unrecognized compensation expense | 11,800 | |||
Share-based compensation | $ 9,300 | $ 8,400 | ||
Common stock issued, restricted stock awards | 437,188 | |||
Shares issued to satisfy tax withholding obligations | 51,467 | |||
Omnibus Incentive 2015 Plan | ||||
Equity Incentive Plans | ||||
Share reserved for issuance | 4,557,513 | |||
Omnibus Incentive 2015 Plan | PSUs | ||||
Weighted - Average Fair Value | ||||
Term of award | P3Y | |||
Omnibus Incentive 2015 Plan | PSUs | Minimum | ||||
Weighted - Average Fair Value | ||||
Awards earned as percentage of specified compensation | 0.00% | |||
Omnibus Incentive 2015 Plan | PSUs | Maximum | ||||
Weighted - Average Fair Value | ||||
Awards earned as percentage of specified compensation | 200.00% | |||
Omnibus Incentive 2015 Plan | RSUs and PSUs | ||||
Number of RSUs and PSUs | ||||
Outstanding at beginning of the period | 2,459,166 | |||
Granted (in shares) | 238,196 | 2,459,166 | ||
Vested (in shares) | (437,188) | |||
Forfeited (in shares) | (199,320) | |||
Outstanding at end of the period | 2,060,854 | 2,459,166 | ||
Weighted - Average Fair Value | ||||
Outstanding at beginning of the period | $ 20.40 | |||
Granted | 18.82 | $ 20.40 | ||
Vested | 20.33 | |||
Forfeited | 20.45 | |||
Outstanding at end of the period | $ 20.23 | $ 20.40 |
Equity Incentive Plans - Equity
Equity Incentive Plans - Equity Appreciation Rights (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Aggregate Intrinsic Value | |||
Share-based compensation | $ 15,285 | $ 14,494 | $ 2,033 |
Equity Appreciation Rights | |||
Equity Incentive Plans | |||
Accrued compensation and benefits | $ 151,500 | ||
Number of Awards | |||
Outstanding at beginning of the period | 7,614,000 | 9,180,000 | |
Settled (in shares) | (7,614,000) | (1,566,000) | |
Outstanding at end of the period | 7,614,000 | 9,180,000 | |
Weighted Average Exercise Price | |||
Outstanding at beginning of the period | $ 19.90 | $ 11.40 | |
Settled | $ (19.90) | 11.12 | |
Outstanding at end of the period | $ 19.90 | $ 11.40 | |
Additional Information | |||
Weighted-Average Remaining Contractual Term | 1 year | ||
Aggregate Intrinsic Value | |||
Outstanding at beginning of the period | $ 151,511 | $ 171,712 | |
Outstanding at end of the period | 151,511 | $ 171,712 | |
Share-based compensation | $ 6,000 | $ 45,800 |
Equity Incentive Plans - Compen
Equity Incentive Plans - Compensation Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Equity Incentive Plans | |||
Share based compensation expense | $ 15,285 | $ 20,541 | $ 51,603 |
Income tax benefit | 3,158 | 6,481 | 17,821 |
Total compensation expense, net of tax | 12,127 | 14,060 | 33,782 |
Cost of goods sold | |||
Equity Incentive Plans | |||
Share based compensation expense | 408 | 434 | 670 |
Selling, general and administrative | |||
Equity Incentive Plans | |||
Share based compensation expense | 13,687 | 18,622 | 48,377 |
Research and development | |||
Equity Incentive Plans | |||
Share based compensation expense | $ 1,190 | $ 1,485 | $ 2,556 |
Accumulated Other Comprehensi99
Accumulated Other Comprehensive Income (Loss), Net of Tax (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Balance at the beginning of the period | $ (90,834) | |
Balance at the end of the period | (81,691) | $ (90,834) |
Foreign Currency Translation Adjustments | ||
Balance at the beginning of the period | (84,675) | (70,019) |
Other comprehensive income (loss) before reclassifications | 26,964 | (14,656) |
Balance at the end of the period | (57,711) | (84,675) |
Gains (Losses) on Foreign Exchange Derivative Instruments | ||
Balance at the beginning of the period | 10,535 | 9,166 |
Other comprehensive income (loss) before reclassifications | (15,558) | 7,014 |
Amounts reclassified from accumulated other comprehensive loss | (1,329) | (5,194) |
Amounts reclassified from accumulated other comprehensive loss | (451) | |
Tax benefit (expense) | 4,072 | |
Balance at the end of the period | (2,280) | 10,535 |
Gains (Losses) on Available- for-Sale Securities | ||
Balance at the beginning of the period | 1,536 | 1,504 |
Other comprehensive income (loss) before reclassifications | 150 | 51 |
Amounts reclassified from accumulated other comprehensive loss | (19) | |
Tax benefit (expense) | 35 | |
Balance at the end of the period | 1,721 | 1,536 |
Pension and Other Postretirement Adjustments | ||
Balance at the beginning of the period | (18,230) | (7,885) |
Other comprehensive income (loss) before reclassifications | (9,870) | (16,781) |
Amounts reclassified from accumulated other comprehensive loss | 2,981 | 709 |
Amounts reclassified from accumulated other comprehensive loss | 5,727 | |
Tax benefit (expense) | 1,698 | |
Balance at the end of the period | (23,421) | (18,230) |
Accumulated Other Comprehensive Loss | ||
Balance at the beginning of the period | (90,834) | (67,234) |
Other comprehensive income (loss) before reclassifications | 1,686 | (24,372) |
Amounts reclassified from accumulated other comprehensive loss | 1,652 | (4,485) |
Amounts reclassified from accumulated other comprehensive loss | 5,257 | |
Tax benefit (expense) | 5,805 | |
Balance at the end of the period | $ (81,691) | $ (90,834) |
Nets Income per Common Share -
Nets Income per Common Share - Computation of basic and diluted net income per common share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Net Income per Common Share | |||||||||||
Net income (loss) attributable to Acushnet Holdings Corp | $ 11,666 | $ 9,318 | $ 33,016 | $ 38,114 | $ (179) | $ (5,526) | $ 27,055 | $ 23,662 | $ 92,114 | $ 45,012 | $ (966) |
Less: dividends earned by preferred shareholders | (11,576) | (13,785) | |||||||||
Allocation of undistributed earnings to preferred shareholders | (10,247) | ||||||||||
Net income (loss) attributable to common stockholders - basic | 92,114 | 23,189 | (14,751) | ||||||||
Adjustments to net income for dilutive securities | 16,475 | ||||||||||
Net income (loss) attributable to common stockholders - diluted | $ 92,114 | $ 39,664 | $ (14,751) | ||||||||
Weighted average number of common shares: | |||||||||||
Basic | 74,399,836 | 31,247,643 | 19,939,293 | ||||||||
Diluted | 74,590,999 | 64,323,742 | 19,939,293 | ||||||||
Net income (loss) per common share attributable to Acushnet Holdings Corp.: | |||||||||||
Basic | $ 0.16 | $ 0.13 | $ 0.44 | $ 0.51 | $ (0.02) | $ (0.38) | $ 0.62 | $ 0.53 | $ 1.24 | $ 0.74 | $ (0.74) |
Diluted | $ 0.16 | $ 0.12 | $ 0.44 | $ 0.51 | $ (0.02) | $ (0.38) | $ 0.39 | $ 0.35 | $ 1.23 | $ 0.62 | $ (0.74) |
Net Income per Common Share - C
Net Income per Common Share - Calculation of diluted weighted average common shares outstanding (Details) - shares | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Series A preferred stock | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 13,807,486 | 16,542,243 | |
Stock options | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 1,089 | ||
Warrants to purchase common stock | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 1,807,171 | 4,891,887 | |
Convertible notes | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 32,624,820 | ||
RSUs | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 360,659 |
Segment Information - Reconcili
Segment Information - Reconciliation (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017USD ($) | Sep. 30, 2017USD ($) | Jun. 30, 2017USD ($) | Mar. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Sep. 30, 2016USD ($) | Jun. 30, 2016USD ($) | Mar. 31, 2016USD ($) | Dec. 31, 2017USD ($)item | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | |
Segment Reporting Information [Line Items] | |||||||||||
Number of reportable segments | item | 4 | ||||||||||
Income from operations | $ 26,370 | $ 18,265 | $ 57,385 | $ 64,288 | $ 7,608 | $ 9,606 | $ 66,437 | $ 57,185 | $ 166,308 | $ 140,836 | $ 117,583 |
Depreciation and amortization | 40,871 | 40,834 | 41,702 | ||||||||
Reconciling items: | |||||||||||
Interest expense, net | (15,709) | (49,908) | (60,294) | ||||||||
EAR expense | (6,047) | (45,814) | |||||||||
Loss on fair value of common stock warrants | (6,112) | (28,364) | |||||||||
Transaction fees | 686 | 16,817 | 2,141 | ||||||||
Income before income taxes | 151,676 | 89,222 | 32,150 | ||||||||
Operating segments | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total net sales | 1,560,258 | 1,572,275 | 1,502,958 | ||||||||
Income from operations | 165,728 | 165,133 | 168,382 | ||||||||
Titleist golf balls | Operating segments | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total net sales | 512,041 | 513,899 | 535,465 | ||||||||
Income from operations | 76,870 | 76,236 | 92,507 | ||||||||
Depreciation and amortization | 25,545 | 26,104 | 26,962 | ||||||||
Titleist golf clubs | Operating segments | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total net sales | 397,987 | 430,966 | 388,304 | ||||||||
Income from operations | 31,031 | 50,500 | 33,593 | ||||||||
Depreciation and amortization | 7,233 | 7,021 | 7,060 | ||||||||
Titleist golf gear | Operating segments | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total net sales | 142,911 | 136,208 | 129,408 | ||||||||
Income from operations | 16,584 | 12,119 | 12,170 | ||||||||
Depreciation and amortization | 1,425 | 1,250 | 1,368 | ||||||||
FootJoy golf wear | Operating segments | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total net sales | 437,455 | 433,061 | 418,852 | ||||||||
Income from operations | 26,380 | 18,979 | 26,056 | ||||||||
Depreciation and amortization | 6,058 | 5,759 | 5,540 | ||||||||
Other | |||||||||||
Reconciling items: | |||||||||||
Other | 2,343 | 2,973 | 381 | ||||||||
Other | Operating segments | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total net sales | 69,864 | 58,141 | 30,929 | ||||||||
Income from operations | 14,863 | 7,299 | 4,056 | ||||||||
Depreciation and amortization | $ 610 | $ 700 | $ 772 |
Segment Information - Geographi
Segment Information - Geographical areas (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Total net sales | $ 1,560,258 | $ 1,572,275 | $ 1,502,958 |
Total long-lived assets | 228,922 | 239,748 | |
United States | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Total net sales | 789,879 | 804,516 | 805,470 |
Total long-lived assets | 148,678 | 157,884 | |
EMEA | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Total net sales | 205,200 | 210,088 | 201,106 |
Total long-lived assets | 9,669 | 8,619 | |
Japan | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Total net sales | 201,264 | 219,021 | 182,163 |
Total long-lived assets | 770 | 628 | |
Korea | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Total net sales | 200,394 | 175,956 | 144,956 |
Total long-lived assets | 3,782 | 1,811 | |
Rest of world | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Total net sales | 163,521 | 162,694 | $ 169,263 |
Total long-lived assets | 66,023 | 70,806 | |
Thailand | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Total long-lived assets | $ 53,800 | $ 57,800 |
Commitments and Contingencies -
Commitments and Contingencies - Purchase Commitments (Details) $ in Thousands | Dec. 31, 2017USD ($) |
Commitments and Contingencies | |
2,018 | $ 141,278 |
2,019 | 10,188 |
2,020 | 3,737 |
2,021 | 405 |
2,022 | $ 2 |
Commitments and Contingencie105
Commitments and Contingencies - Lease Commitments (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Commitments and Contingencies | |||
Lessor Leasing Arrangements, Operating Leases, Term of Contract | 1 year | ||
Lessor Leasing Arrangements, Operating Leases, Renewal Term | 5 years | ||
Cost (in percentage) | 20.00% | ||
Deprecated Value (in percentage) | 20.00% | ||
Future minimum rental payments under noncancelable operating lease | |||
2,018 | $ 12,119 | ||
2,019 | 10,286 | ||
2,020 | 8,447 | ||
2,021 | 6,247 | ||
2,022 | 4,228 | ||
Thereafter | 14,418 | ||
Total minimum rental payments | 55,745 | ||
Total rental expense for all operating leases | $ 16,300 | $ 16,500 | $ 15,800 |
Commitments and Contingencie106
Commitments and Contingencies - Contingencies and Litigation (Details) - USD ($) | Jun. 21, 2016 | Dec. 31, 2017 |
Commitments and Contingencies | ||
Loss Contingency, Receivable | $ 8,700,000 | |
Litigation | ||
Litigation Settlement, Amount | $ 972,288 | |
Litigation Settlement Interest | $ 494,859 | |
Collectability of receivables | ||
Commitments and Contingencies | ||
Loss Contingency, Receivable | $ 16,600,000 |
Unaudited Quarterly Financia107
Unaudited Quarterly Financial Data (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Unaudited Quarterly Financial Data | |||||||||||
Net sales | $ 351,392 | $ 347,263 | $ 427,988 | $ 433,615 | $ 329,761 | $ 339,318 | $ 463,261 | $ 439,935 | $ 1,560,258 | $ 1,572,275 | $ 1,502,958 |
Gross profit | 178,500 | 172,968 | 222,909 | 226,415 | 167,994 | 166,902 | 237,960 | 225,869 | 800,792 | 798,725 | 775,838 |
Income from operations | 26,370 | 18,265 | 57,385 | 64,288 | 7,608 | 9,606 | 66,437 | 57,185 | 166,308 | 140,836 | 117,583 |
Net income | 12,318 | 10,634 | 34,038 | 39,630 | 1,247 | (4,402) | 27,478 | 25,192 | 96,620 | 49,515 | 4,156 |
Net income (loss) attributable to Acushnet Holdings Corp | $ 11,666 | $ 9,318 | $ 33,016 | $ 38,114 | $ (179) | $ (5,526) | $ 27,055 | $ 23,662 | $ 92,114 | $ 45,012 | $ (966) |
Net income (loss) per common share attributable to Acushnet Holdings Corp.: | |||||||||||
Basic | $ 0.16 | $ 0.13 | $ 0.44 | $ 0.51 | $ (0.02) | $ (0.38) | $ 0.62 | $ 0.53 | $ 1.24 | $ 0.74 | $ (0.74) |
Diluted | $ 0.16 | $ 0.12 | $ 0.44 | $ 0.51 | $ (0.02) | $ (0.38) | $ 0.39 | $ 0.35 | $ 1.23 | $ 0.62 | $ (0.74) |