GOLF - Earnings call transcript Q4 2018

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Operator

Good morning. My name is Christina and I will be your conference operator today. At this time, I would like to welcome everyone to the Acushnet Holdings Corporation’s Fourth Quarter and Full Year 2018 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. you. Thank Instructions] [Operator President Relations, Vice your may conference. of Takazawa, you Investor begin Tony

Tony Takazawa

mission morning, of Acushnet on the year business welcome discuss you. David and Acushnet and Thank Good discuss David CEO, to our in we joined results the and Maher. in the QX President industry and morning, provide strategy. the for our Holdings' conditions and performance This full commentary long-term of XXXX. will are context by the financial to call golf

Next, and spend overall Acushnet some time financial results Tom Pacheco, CFO, will XQ. discussing for highlights the the year from

We results based the on on differ expectations. these may will changes subject call are expectations current forward-looking and and materially are from statements forward-looking be Acushnet's making to Actual today. circumstances. statements uncertainty These in

of release, these financial including For why slides Securities presentation the with and filings could use CEO, With that, the items pleasure adjusted we introduce be Maher. press will my found accompany to we reference that our of currency to how constant results be that in Throughout discussion, EBITDA. cause U.S. as Acushnet U.S. see please and Explanations metrics David the these to and and and today's in this in metrics, factors basis of making a Exchange items Commission. non-GAAP GAAP list this schedules a reconciliations our such Securities can differ, with the it revenues is filings at and Commission. Exchange actual to David?

David Maher

by championships consistency in had strong the including VX relied powerful golf the every tour highlights our from quality golfers golf by four and in all launch of prefer ball clear introduced appreciate Select in produced with SMX to a believe the We're from XXXX. in Titleist TS five and year, The global club sharing Acushnet's is their spin VXx a AVX, putter positioning very multilayer as and championships the all world-class flight your choice, developed benefit men's of a inherent manufacturing Cameron women's or business golf players Good time of year who golf terrific also club new driven performance, wedge a this We're cast-urethane We successful a past XX% equipment for and Titleist strong as excited AVX today. launches. also is commentary XXXX, begin generating. Vokey Thanks, all with Pro lower of softer business ball on effective and Tony. XXXX. robust and golf and we balls, In major by in Starting feel. our winners on major Pro Metals, launch like morning, We ball premium some our had everyone. worldwide golf of the this about year, Titleist marketplace. team. I'd resoundingly pleased irons, the summer's momentum

acknowledge Mother for prepare PG Our integrating respective believe Professional in we in unkind XXXX. segments at and And to are partners the must my future the capitalize, and Nature by process and & sales expertise fourth associates industry work Kings, and of challenges Since despite backdrop, growth. held up meaningful categories, And brand year, the for associates. loss the increase innovation FootJoy we've X% especially posting new was began product new rounds many were fueled work. growth. foundation our our the well performance in great gear a to golf in our effort, for weather-induced spite passion well chain consistent the Acushnet some of this businesses this supply was great global to markets. are known January experience, I XXXX, and business with of their improve expand we their Links working of commitment teammates Acushnet's Against for thank their positioned by inherent and for able to quarter, and Gulf. product closely of while are and both which for investment acquisition and Acushnet's our some resilient, their made in a

investment am performance, appreciative increase program another first to consistency two to and return voted affirming the to And support share Both are total an the to are partners, Please make has as authorization our approximately effectively valued shareholders, turn commitment pleased And per Acushnet results return to our We bringing announcements: trade an X% dividend to Page our with to also aggregate $XX signs so million. are announcing following line commitment increase our by the fourth share, to year the and providing top value Acushnet's execute quarter. reward to we to attractive the Directors and and of is in term of the to Acushnet's value quality golfers. $X.XX over buyback of shareholders of ability $XX.X who confidence benefits and communicate actions payout opportunity. of means our X I for million now our shareholders. these Board to board's our to that quarter long secondly, long-term Acushnet's

$X.XX APX VX of constant clubs launch the Titleist or momentum were the For in play. balls also putter Titleist driven led golf and rounds half. in sales launch increased XX% growth in by EBITDA by X% successful our Adjusted a launches second in was successful XXXX. and $XXX.X year, Acushnet had year Driver posting full currency. a strong TS model year billion X% million. non-Pro despite top our and Fairway gainer and in X% reduced half, by and increased the growth first XXXX, wedge for This to iron year year-long grew of the by the

our business, even-numbered product recall, launch ball cadence. present you to challenging given the As comps years tend for

year. of fourth down versus Looking Acushnet at posted last the sales quarter, X% $XXX million,

primarily timing golf half. our VX anticipated of XXXX This the club due Pro the product quarterly to and launches inventories with drawdown launch decline field the advance in second associated in seasonal and of VX Pro was the

the TS a irons versus third EBITDA quarter Metals on was concentrated the Adjusted year. Titleist quarter launch the of last whereas our of Specifically, more XXXX. fourth impact had million fourth XX% for greater year's last in launch decreased $XX.X quarter,

and ball turning constant X% at presented to X% and which balls. and new the six Now tours, look We'll balls VX we XXXX Pro ongoing times about have balls layers and on XXX and larger, in Golf have competitor. our increased engineered Titleist in sales our with Titleist Titleist the cores. designs Professional launched enhanced ball the January, VXx, as with the for year segments, greater for sales efforts launch Velocity, colored worldwide in launched to in been the VXx Acushnet's thinner golf VX at Page This new franchise, fourth have, a our in and VX Pro golf golf with year, made currency. long-game professional were quarter representing season, more Pro in the thicker a These golfer fall the by notched than And lower tours covers, Tour golf closer AVX worldwide with first acquisition preferred four and the first both in the results X. success received by and golf faster tours times yellow short competitor. commitment professional ball VXx. we Pro develop speed is take of the And off which ball Acushnet's Titleist had the for their in These is spin great more PGA Led continued introduced January. distance, while worldwide VX golf be in of were new and maintaining the AVX R&D, driven unwavering balls. debuted ball manufacturing balls, in for for game business we expected. nascent new golf and the Pro the both new will which May, Soft casing balls franchise, golf nearest Pro count, debut nearest Show. spin, reasons we're XX% Pro past Merchandise PG optimistic just feel golfers well more engagement. and mentioned. quarter and and our excellence models models finally, rooted Pro And expect in progressing than control another by preference wins VX I who Across XXXX to and products, the usage of characteristics notably time, the excited Pro seven XXXX. across Starting a result VXx

we expect million. of range be to XXXX, full the year $XX $XX to million revenues in For

versus Metals sales off reasons by Sales last earlier. Titleist well posting had a quarter club categories to U.S. golf moving our Each TS million, market, EMEA in the Titleist grew and led in Now Vokey with the clubs performed an wedges. the mentioned largest clubs major increase terrific of X% delivering XXXX, $XXX with golf golf every XX% for were year, I and also increases. growth for of clubs. year.

and spanning invest had in achieve, our accomplished franchise, making while hybrids, the positive feat yielding Open. support putters. greatest innovate since golf not players energy commitment best across at it momentum clubs, to we has across success are More set and the a usage this being Our players And out than team momentum was playing growth fairways, year's intentionally our TS and weeks Torrey which Such recent Titleist wedges are then around most game's seen and ever count to this on club the is Driver irons, all each Pines. clubs January drivers, global categories, is at as We never by debut been before PGA the tours. and sweep Sony and an of the Tour. six proud gains before, notably, of with Open ball the drivers at categories tour U.S. and its the rightfully of all and leading sweeps two widespread last the equipment see in of again tour Titleist indicative later

momentum the golf the club with of XXXX heart marketplace, in season. top soon enthusiasm and amateurs business similar our experiencing are fuels equipment the the enter We we around as which Titleist

was SlideX year offset last Gear Next, in in bringing and achieved XXXX, year. and gear. posted with the EMEA to flat moving in XX% which Japan and the roughly Gear growth Titleist Korea. positive declines full by U.S. almost the to an quarter, in increase

and our shape, solid gear expand look forward we business a and offerings is products. personalized ahead. We and to a market-specific which chain start good to have leveraged global Titleist are to differentiate key to help gear should gear, in And both travel demand the design capabilities on believe good and and bags continue we we of Overall, to more customized markets. custom increasing to for create supply our off our and capitalize products in year

which to down moving final year: X% There within million, price XXXX. quarter Now delivered X%. a business emerged FootJoy range, against was the XX% FootJoy themes grew sub-$XXX First, not of $XXX year which in the this which decline central FootJoy, sales year, the our comping XXXX. segment, past gain versus Fourth as full sales, are category were competitive in a last three

As year. recall, exit And may long-term FootJoy lower see while we negatively some positive this last to decided points we our you brand, a price XXXX lower-margin, results. for as impacted the this

believe Going to products sub-$XXX competitive space. the forward, we right in be are we introducing that more

closely at design, and of FootJoy one and apparel consistency. capabilities. brands. set FootJoy business new athleisure markets positions, competitive growth earned women's glove the apparel finally, innovate space, and relatively gloves, Titleist be success men's of all and wholly-owned continued to advantage continue factory, both and the golf of which expanding is for a and supply made which Acushnet's Acushnet's in is share apparel, gloves parallels performance, chain we FootJoy FootJoy for to And view the have and are the leading outerwear. quality standard our distinct customization growth to our performance Second

a the and Looking line to first Led to new adapted fortified add momentum. should our three-layer one SL footwear performance We're has engineered Fury footwear solidify progress half. ever-changing shifting leather ship of of position In continues introduce shops FJ at new athletically top a has around trends. exciting XXXX, sell-through preferences number spring by in outerwear team well as to consumer in is garments. high and launched its U.S. with bonded outerwear. women's fabrication the apparel. an outerwear and and the HydroKnit, introduced, continued U.S. met recently green FootJoy's it lightest our a first is best story in Flex XXXX the product on shell excited handcrafted in one knit new positioned its is XXXX, outerwear expectations with and our our the FootJoy and for of innovation the anticipate Pro FootJoy's scheduled shops footwear market golf waterproof to that quarter XXXX fully makes to team models, the styled grass many successfully pipeline the luxury and collection specifically to capitalize FootJoy to this we

under While important our We gone managing growth game's up collection first to segment supply and and its business for not chain a for & dedicated an year for well, and Links report XXXX represents is discerning FootJoy the Acushnet offering be improved while FootJoy, brand. the the to has as under our it the intended we with integration keep umbrella golfer. classic product Kings sizable double-digit

the future first and well across and Asia positioned is and We in time, markets in confident key to are America Kings Links Continental U.K., that for North & growth, Europe.

regionally X. quarter. in X% the U.S. were Slide off for increased fourth at sales the year Now business looking and our on X%

Our good driven golf by U.S. strong sales team results, in clubs, balls apparel. achieved and golf

the Looking outside EMEA and relatively softness, the business our which through the year the see flat in rounds has XXXX. for golfer the X%, first X% And X% weather American challenges year, now golf for they great when Outside been stable. was to retailer to as year South of with turning and off structurally a for with EMEA contributed Japan dedicated golf, quarters in quarter. had sales fourth business did with quarter. a team X both down global and of and our market are Japan base feel and fourth the in the Rounds lastly, Korea in year. U.S., was outlook our finished particularly Page year fourth full of And the X% across quarter. gain posted U.K. strong the were We We healthy. improved. up X% the another three a roughly in the rebound quarter

engine demographic to look and especially we will our of will the appeal of dedicated revenue organization As of once has and XXXX, in purchasing golfer. team confident an hand Tom technology the expect innovation represent to golfers Acushnet attractive and investing pursuing to while continued the throughout achieve products the shareholders. We're overview performance for and favorable executing, associates. remain be track And closing, These to power, product XX% new industry's we growth In I of financial gains advance long in with again our a game's are term. and our enthusiasm delivering our appreciate and we efficiencies the product our in trade development over go-to-market your are of provide returns ability record new and associates continue to the point now of over to support. we golfers, of focal performance. an with it our a The proven of our business operating leverage new our development introductions, Each Acushnet's which product calendar strategies. active is and product bring to segments our partners full share

Tom Pacheco

good I and solid and morning partners and year. discussing results the would results to I'm to David, echo our comments thank on by all the our David's to helping the call. off for Thanks, going full start year. like associates trade deliver us of for for everyone

strategy long-term weather. launches proven as of goals, cycles impacted approach, the be manage results we know, factors as you business with annual a and successful in by in product such term timing life and two-year be to the has This the can business our the product short As mind. our

to were Full plan up in achieved. $X,XXX,XXX,XXX, Metals results Consolidated Growth our currency. TS gross versus million, prices clubs the in where Titleist and over on $XX of up X% deliver higher last average Metals, in SMX Looking year were up execute last Titleist wedges wedges constant was X% with $XXX a was X% XXXX. the SG&A points we solid and up $XXX profit XX.X%, revenue. profit year. innovation sales up Vokey expense Vokey our introduced we versus was and newly to margins helped last factors to ability overall, at million net XX The result XXXX over improvement. and and success balls Fairway primarily have golf are Drivers year our pleased year. Gross the basis business, gross TS were of major drive selling million, the

promotion currency all also million As has to in foreign the $XXX XXXX, increase and sales. segments, in $X that about X% for unfavorable to income been net average was to million advertising XXXX was at $X Research IT-related from and last increased up discussed, throughout over up XXXX. compared reflecting compensation year, and higher year interest SG&A slightly expense impact expense SG&A of expenses. selling I expenses the XXXX would rates $XX increase expense $X by compared in of across Interest costs $XX exchange due million million. in to and note share-based development included rates. higher planned was of changes and an primarily higher Operating million an million

assist adjusted EBITDA, EBITDA are was as our Our in year. release reconciliation million, XXXX $X a calculation year, expect to rate we provided compared in Holdings We adjusted effective was $XXX XX%. X% up XXXX currently XX% effective pleased your net attributable XX.X% to presentation. have the up for over rate To Acushnet that last you earnings slide review million the of was well be to And the around we million, year. X% last or as tax in $XXX income our year-over-year. tax of

and year-over-year down Now $XXX our sales X% down the net on in results. QX will Consolidated review currency. constant X% million, I were quarter

VX associated Pro launches lower the the gross the Gross launch of in was was decline due half and timing and this product in QX the our the golf with profit margin basically advance primarily on VX mentioned, million, field was balls drawdown inventories golf golf and David Pro $X sales million club XX.X%. to volumes second anticipated of year. clubs. $XXX of As at both of down flat XXXX

million higher million included employee-related QX, was to $X segments Looking at readiness support higher In attributable year launch. million and largely on over higher $XXX,XXX up across average selling partner $XX quarter to lower lower was the expense in million versus year. last operating year, mentioned. $X Operating $XXX was successful was year-over-year of to selling revenues the last to borrowings. the expenses combination due very SG&A expenses. higher same of to last than due and SG&A increase million. all QX quarter This Metals of in expenses expense due $XX costs. X% increased I The TS income R&D continued expenses rates the increased interest $X interest by million that of or

ETR Our of release as reform QX during lower full the was result XX.X%. of state-deferred new the effective tax partially by impact offset was rate a related the that substantially year of a guidance issued quarter. This to our valuation allowances of assets, was portion rate than on tax the the tax

attributable net the was Acushnet prior and For the from adjusted income Holdings to down quarter, EBITDA XX% was $XX period. QX million, year $XX million,

debt-to-adjusted We now on $XX quarter Now XXXX. had the four X.XX balance times. at December is hand $XXX XX, year-end looking rolling of was EBITDA basis, debt million Total a approximately to our outstanding total ratio On at cash million. sheet. about

CapEx to about reached was million. We are have expected. we $XX target our as leverage pleased XXXX very ratio

While portion stated, growth. efficiency operational previously spend this drive continued a and future is in and market investments making leadership, to infrastructure have been maintenance-related, technology innovation, also as of good we we

be million. expect CapEx about For XXXX, $XX we to

now business. options in of operational our the key return as that Investment have and end flexibility expand target ratio We As to I the in on the capital. connection pleased the we the allocation to return reached is leverage have regard innovation, golf capital both mentioned, capital long-term with our expected. success we to of year at are efficiency and golfer

investments marketing continue to Titleist manufacturing some the physical year's technology which The and the include: sales investment. our we of to innovations AVX AP and new delivered and CapEx business make introduction of in the these product such, programs R&D, series of improve and productive. golf marketing programs in plan delivered Examples favorable abilities, a deliver make capital made TS and most it the and make last As we new to successful have our with efficient iron investments the infrastructure which targeted ball; our to have expenditures we necessary better to information Metals; more launches leverage ever improvements on

continue favorable would long-term plan return. opportunities a growth to targeted to drive our and which for We at strategies also help to look support M&A

cash dividend of element been Our important our capital strategy. has an allocation

pleased a become first As we almost our our leverage to later, a our important element raised our public quarterly a as And that declared share allocation dividend share. reminder, we full again and quarter dividend two have have increasingly ago. years a company capital we We dividend finally, ratio, we by in reached as first that raised target an will year X% our $X.XX strategy. buybacks are of

confidence have increased earlier up to enable to $XX will to amount authorization our offset will lie in not we we us that we the and indicator million. ahead. only Board to our is strategy, has strong to exciting morning, us return of future of allow believe our As the of the also but dilution, authorization shareholders. Directors increase this proven our This strength capital repurchase we share to This of execute can announced a repurchase the opportunities ability

shareholder percentage current majority its forward, maintain will our we anticipate time. Moving that over ownership

invest focused as are on various both We to the carefully we to the and return to shareholder shareholders. business opportunities evaluate capital, stewards will capital in of and being we good have always,

first to we up range the revenues last year. to to of be EBITDA to million. midpoint basis, net sales a forecasting constant our This a At midpoint. be to and with XXXX, understanding Cameron that QX. and had currency the for in the this the versus X.X% launch growth you XXXX four remind at balls, product the of consolidated And up of flow about in for I XXXX. approximately AVX year, XXXX, $XXX expect launches: to in As of of to your to the expect SMX $XXX we X.X% help expect the range, X% U.S. will we increase golf To is you X.X% the benefit during Select how the this $X,XXX,XXX,XXX. of business versus are like outlook, represents ball of range in golf putters we year $X,XXX,XXX,XXX wedges full half Vokey major in we adjusted reported of Performance QX On the million would

We also half had benefit Cameron the benefit The of product the AP and irons first of X the we XXXX. QX. putters VXx major expect the In the Pro of VX and in half continued in two Phantom QX Titleist XXXX, from momentum first of launches: over Pro to the only

of new from We TS to also success to the the expect continue benefit Metals.

are focus deliver year, result, by strategy. a net XXXX compared basis. long-term a solid of reported was and to continued innovation, summary, half first of be execution a XXXX As to approximately and expected driven to the sales our ability products the our XXXX flat on consolidated In our half best-performing on our first highest-quality

on deep golfer, important our distribution, and attractive current and ongoing dedicated success. framework, portfolio, and broad Our partner all strong focus factors global in are network financial the product

to We the With now to an will looking exciting Q&A. that, over are call well-positioned forward and for turn are I Tony XXXX.

Tony Takazawa

up Christina, questions, for we Thanks, Tom. the now please? lines can open

Operator

[Operator Randy Instructions] from comes Our first Jefferies. question from Konik

open. line Your is

Randy Konik

about environment. ask – about to your want general the I general Dave, guess, I just much. thoughts very the Thanks

the alluded recent of to, healthier the release, text, your years. You press business golf in being in in of kind structurally

the high over of pulse your as of couple kind years, next to see just for of want just the Just next kind – industry level. today on you and the get it

David Maher

were get I'll globally. Randy. being seen in the up morning, It some off couple somewhere whole year, rounds in challenging bit commentary better for health quite commenting world. of a overall XXXX. out by expect, I on industry, dedicated as given at as led time, certainly, to at market for think, than lot the around was this, turned resilience level clubs, And And X% well, a harder of the start we've the ways round weather and X% would on is, held a and the overall which the weather, which but Good consumables of golfer. high the It really really, A realities. challenging spite now between quick that, you than it and Sure. hit a to year

that as XXXX our about XXXX. backdrop, a several I'll peek and that share with thinking inputs I'll to forward So shape

First, again, well, good despite dedicated and weather golfer the is playing, in drags. and shape, weather some alive spending,

and the the the year talked plans, of confident final healthy than bit part, Second, spending. economic be course, healthy. see half are the the XXXX these with broader been second conditions time. some we be quite we're shape. say we into about heading And say channels would excited in are which piece built second our new around. that The and would third spending I lot retail in. internal years. half would XXXX they've really as consumer this product the retail which conditions climate channels, we've the it and for as in a about over the our They're good robust the most I consumer inventory really, of would And less plans would be in And lastly, in And a did half. was first are was levels

to we growth, last of consistent note industry Randy, project overall my couple been the flat low opening range. we'll industry and position, which is in net-net, do with the in growth single-digit our that the I is that did market retail climate, consistent our years, and healthy So dedicated which also golfer target remarks, over this reiterate be this has to

into are those golf the going assess key XXXX. as forward we we So inputs about think

Randy Konik

the up, kind some of compare and like spend year? you the areas, in you that cetera? half perspective with et Pro that product TS Helpful. the that And then of the you're contrast comment your from it around, to yellow on do first by being think consumer, industry of almost versus do the that line, acceptance about able half how VX, coming seeing to upcoming kind even change with if off a product like AVX, second the we the for sort or of product and say, indication as business of last let's the some gain share jump about the think how colorway the So new the outperform

David Maher

Yes, excited standpoint, and about we're product so I'll sequentially. a certainly, very from go –

our now of introduction of introduction VXx. quarter the Pro May and VX Our in of and launch a fall Metals AVX, midst of first new TS we're Pro

done to really standpoint, terrific variables effective a product a really and product it market I has trade great bringing the controlling their our team in think consumers both manner. and and with a from So activating job all

Randy, that U.S. were quarter. double from this fourth commentary mapping the you – quarter. digits you the standpoint, was, in and up is overlook what fourth off piece, a precipitation look other dramatically. Weather rounds what you – Rounds more in can't the at we look The saw happened and is at

dramatically. You look at standpoint, down from a it temperature

came into on about really a the the a rounds some that It inputs as is were time. that pretty a tough through So business some, thinking some as from industry the have seen Again, us rugged which hit as XXXX. all quarter we quite head we've off quarter weather standpoint, in XX%. commentary

again, about. feel good that market, product the stories highest a we very, to can the So at weathered weather we've we're But intended. we very tough bringing year, pun level, things the we're optimistic control,

Randy Konik

the about be. I have net leverage on different of ratios return just where question, just to just the that guess, you the, capital uses, given And been capital like – them of to last you want and and Great. would kind return talked

ton Kings, Links how if choose be curious think curious M&A? – things of your of strategy other wouldn't any were the what just think potential you you – look the do, terms Just what on kind you on on the your just On M&A M&A would curious just philosophy what at, M&A, in around about – amongst there just what look to area curious. or you of can you & strategy, how what's at? to just M&A about

David Maher

I M&A. to of say fair open-minded terms we're very in Well, think

the have have global That's our And with the spot. it, does are inputs We distribution expertise. product secondly, our we own. with golfer? most preferred would That's on brand the Our strengths resonate our platform? synergistic be does dedicated it sweet then or where

We fingerprint and acceptance, market Kings, example, to our nicely which again, be Good terms the strengths. the best example, where Links have have distribution we golfer dedicated existing we – channel maybe distribution of & how with our would in matches own go strengths.

I So those primary Randy, that and drivers looking how work said, that we're would established, at it Shared But fit the fit well from are vertical think last with PG open-minded, M&A. two standpoint. two within Professional necessarily around Golf company. and the our chain are but criteria always you we really to about assess go opportunities supply a doesn't the we that

M&A but a of that stated successful for term, think we outside and real Acushnet. lines one very be could our long typically So approach, and bit the effective important

Randy Konik

Thanks, guys. Very helpful.

Tony Takazawa

Randy. Thanks,

Next question, please.

Operator

Our next question JPMorgan. comes of from from the Steven line Zaccone

Your line is open.

Steven Zaccone

Great. Thanks very much. Good morning.

talk I hoping also about a XXXX. was like top have on Seems encouraging half last you And you launch, commentary bit segment. selling yellow channel ball and the a VX expectations the launch. little the cadence. healthier line could But half detail thanks guidance for the for than Pro So into by second more versus first new the

So you a But presumably, talk golf could expectations growth about will just segment? outpace the consolidated outlook. by little the ball more bit sales

Tom Pacheco

Sure, Steven. Good is Tom. morning. This

year, So clubs performance solid challenging comps you got a golf for we as an you there. launch coming looking think business it's as some so off you've a VX we're a odd-numbered from business. And said, very XXXX, always Pro ball the about – the successful year,

So performance certainly little a clubs. from from balls challenging and golf looking at strong performance more

for a it looking are a rebound year. it FootJoy challenges to some as had of for bit compares the last We of

segment at. what looking from perspective, a think we're that's I So

David Maher

a with of meaningful compares AVX some of high-impact of took in XXXX, in to make VX ball, models, what That just half first earlier. really made first again enough we Pro which Steve, we first we but half. at meaningful, is offset is first half in Tom the point look that had performance launch, the the the launch you cadence. half a here launched theme XXXX, again, A big we place year. in to not XXXX if had have as had we reiterate, Tom said, I'll golf an our putters, wedges, had pipelines all those we And that of the

our again, and years really in about in in theme, a cadence there's even odd if years, that the differs So true odd it which from rings we've launch Acushnet, is years for talked past.

Steven Zaccone

then in it a the an be the repurchaser? of more understood. purchase Yes, you share maybe on increase repurchasing Or basis? just on around consistent expect your opportunistic do Would And strategy program, comment you could around stock? to actually

Tom Pacheco

relatively throughout not of a in Tom of amount terms do get purchase is this execution into year. detail expect again. So going to great consistently plans. We the to our We're

obviously cognizant can. be where price of and opportunistic share be will We the we

purchaser So the but we a do year. of expect be will be we consistent across to rest strategic,

Steven Zaccone

Great. and care. year. with That’s it this me better for hoping for all Take

Tony Takazawa

Thank you, Steve.

please. question, Next

Operator

Our from James. next from comes Dan Raymond question Wewer

is line open. Your

Dan Wewer

Thanks.

half about back-loaded. in year, X% two revenue to So the flat second be to going an weather confident so in it Why mid-X% seasonally And launches? with the a the we're that in midpoint Or is is given of the be Is rebounding revenue X%, of going smaller for rate? implies talking we're gets we guidance XXXX, what, growth at better? the in guess, the that range the first due second are year. be would that at to growth periods, it of assumption changes some half a that product I minimum, lot about half those

David Maher

all each our solely tend cadence. be be this the – a launch flow. how half-driven, with to same. launch Not a function of the perform all. is do years it odd of function cadence. And segments won't at to years, our not I very won't just at It's first they But of Dan. Again, this said. No, is not It's all, weather. Even at as

a ball how other we bit more timing. really, takes of think in But segments half-loaded. whereas As we the quarter, a –- a the take function back solely launch mentioned, business of of a about the first ride some

Dan Wewer

the about in global guess, the domestic recession, given and XXXX you over industry, how I decade a then more a economy, back speculation question. it XXXX? There's second how would in since compared inevitable next happened Okay. had golf we've the that what And to a do recession been think been change the economy is but it's slowing,

David Maher

of as right, back how the Yes, point held We we've last Nobody and the back experienced When? at I'll keep keep as we it, dedicated big couple decades, broader lesser a Cobra passion dedication the golfer. you're sold up which they hit again, quite you And But they spending? Yes, to of over Do do, do. well. they and playing? our terms before certainly out piece but business, to took we commentary albeit inevitable. of I take if the we was our recessions they commitment hit, the a it's it's economy. didn't Do rate. on share of 'XX, just think yes, going – and business our knows. in a 'XX and game

use we 'XX step backwards. again, the half a full taken a if while took benchmark, So our 'XX, the step may economy as business have backwards broader

world. around dedicated So base there's some inherent golfer with the our that comes resilience

Dan Wewer

is the high-end some about you're sector? have a harder. PXG that is, in question end point very to maybe about curious been And But push just how to Concept you're ultra I the its curious There's Seeing the how bit of speculation irons little market? pricing thinking premium taking lower. price Titleist the going last thinking to as golf as the

David Maher

which got meaningful year. it. very in understand – make it's our very about in I experience. excited fitting irons, Yes, a we've a launched fitting a product the we labor-intensive by We're it's business, and the process you We a late we're mean have it. that to last to terrific really commitment excited do Concept

excited the So it's it's golfer it's a two-part about two, it. really product; business: one, and It's we're the experience. But

pressure that any business. We haven't pricing seen on

We're in which important enthusiasm and think real what worth prove and the be starts really, golfers portfolio, with But the broader take to size modest understand it's see make it's great the to of and you effort opportunity got tends glad it's to it, some and it's We R&D confident we're that Acushnet of happens upside. there, but in the care an If space. can a we labs, the we're itself. pricing context product finite going we in.

Dan Wewer

great. Thank Okay, you.

Tony Takazawa

Thanks, Dan.

question, please. Next

Operator

Our last from question from is Partners. Dave ROTH King Capital

open. is line Your

Dave King

QX yellow business of the strong good morning, launch prior competitors? Do following that launches some guys. terms ball? of Pro reads of And then after guidance with from Maybe bookings, in launches on I how don't have early particularly VX of is new in know, the now questioning the on Thanks, TS segment year's any your trending this you a bit. some versus success up line

David Maher

Dave. morning, good Yes,

expect from trial. some given terms and that happening in water. So not West, a there's as a the too of We terms new, would there's not there it a much sense is slightly spring Certainly, January, you say, as Pro in to not cold rounds the too first well. to yet in out – QX, VX, of but interest rain and some soon out quarter. more the really, in say. data long-term yet the in we which early had lift what's out and positive, We've will need they we'll meaningful wet get is new But to that's up get be think

feedback again, a meaningful to this any On tough yellow, give at at And very TS. TS, to excited product really stage, the which competitive we're whole as entering to But point. the product versus new we're in And of about excited, there's you but the you're this market, the monitor. was going to anticipated. tee our and end, down on fitting come it's lot launch theirs fares on how the right,

point. et very But the speed, performance, there, we up how as we're in like et our cetera, product far, of this that's cetera. confident out our of And stand as faring well product overall very, in pack we're meaningful and any terms at that in activity forgiveness, the marketplace will versus so competitive terms position the

Dave King

hear factors? your be we gross thinking to think? some some the should ball providing lift margin, I about on marketing to should accelerating plans, expenses, we bit. How I maybe talking to about particularly that I those about you thinking EBITDA recall changing gross seem maybe want of But And marketing how it. maybe or a with great mix guidance, then Okay, margin unpack be some versus to

Tom Pacheco

So this is morning. Tom. Dave, good

product or operating timing puts margins, of as takes, we around don't et lot and provide particular margins. the life So gross launches, guidance There margins in cycle, are our you a including of particularly two-year know, gross cetera.

are We EBITDA at look – roughly growth rate showing and X% leverage we on a growth relative you are guidance, to if the – X.X% a with level rate top the growth versus our line. to there

P&L, So so. we through forecasting the are leverage

Dave King

and with good Thanks enough. Fair Okay. XXXX. luck

David Maher

on call. Well, your our time everyone. today's business attention and to and you, thank We appreciate

As earlier, said I've we're upcoming the excited golf about season.

fully which the reporting believe and we your range months, for their back to we our for this enjoy work thank attention Our And the game. forward And season. preparing upcoming said, spring. and for golfers a we're educating will time shops, new planning year. them golf help With great for in busy we importantly, great the exciting products most in that, to you to have and morning, again, we best partners play of associates the have the you trade golf look done experience coming

Operator

This concludes today's call. conference

You may now disconnect.

Acushnet (GOLF) 2 Mar 192018 Q4 Earnings call transcript