GOLF - Earnings call transcript Q2 2020

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Operator

Ladies and gentlemen, thank you for standing by and welcome to the Acushnet Holdings Corp. Q2 2020 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions]. to Lennon, conference and Vice like speaker to Investor now Sondra today, President would hand over the your Relations. I of FP&A ahead. go Please

Sondra Lennon

Good for us XXXX morning, for conference Holdings earnings second quarter everyone. today call. you Thank Acushnet joining

our morning and Executive our Financial Maher, Pacheco, and Officer. Chief Joining me David President this Chief are Officer; Tom

based changes Before these The our materially of to uncertain. statements statements. COVID-XX results change because circumstances. company results future pandemic considered the materially we are new future. dynamic an In impact of could obligation forward-looking that making in business results the contemplated and forward-looking pandemic Acushnet's undertakes near in remind these on this the from and forward-looking the call impact of our scope and on or will differ those ultimate over by Actual business revise operations These David, Due results required. to events the to of The as factors, and indication our to actual other circumstances, and our call except information, future turn on expectations differ should forward-looking particular, statements not update performance. publicly everyone Reported I or I any no are impact company's from may be like plans duration, of will has nature whether and could as to likely today. significant the are would had to expectations. current uncertainty be statements continue subject

press that can with our results items cause items and financial to presentation of and list making Securities be differ, be constant we release, non-GAAP Exchange as basis including of to metrics we the also to Explanations please Throughout these how use why and U.S. metrics, could a the today's filings Commission. schedules For of this currency will and in adjusted today's accompany see our that slides reconciliations GAAP and currency. the revenues presentation EBITDA. discussion, found at in referring actual these sales And please such factors press release, the when and to that referring to referring call Exchange ended comparisons, with slides our the June to that, regional are the that filings turn Commission. referring accompany constant U.S. and and David. also also to XX, With segment Please six-month period that decreases, note note the we year-on-year the Securities in increases and and results year-to-date sales over are when XXXX six-month in to we period. I’ll comparable or this reference

David Maher

Thank all you, staying hope and these trying I are morning, you good that times. during everyone. well Sondra,

interest U.S. government-imposed Acushnet results, our overview were down ball plants, closed and were always, Acushnet with into Holdings quarter As early previous how back with and as in we insights in your second forward and we evolving you industry of an enter XXXX. our providing On call, the and half of golf to appreciate operations adapting look the along days of golf centers the retailers golf across impacting embroidery pandemic. distribution golf we during middle the early the club Most shut and the was and and of in the in May, industry courses Europe. golf shutdowns, as our effectively are

full golfers social play X% retailers, increased golfers restarted were interest the and demand accommodating am LPGA, outdoor of I professionals, XX% has strong of the play operations making of golf's May safely fuel and to or resuming and contributed were in of above social and successful and also shutdown, safety with and superintendents were game running new distancing of And steadily advantage rounds we week, nearly our June protocols. pleased to a Towards in increases now past and energy. Tour The return safely U.S. associates well. furloughed our embedded course all at work. Champions recent welcoming of owners normalized excelled of in seen this PGA And while PGA to levels, golf of that In at report in have golf that this community, golf's and and sport, have to field And time, have has operations, nine distancing. to back return we expanded is given to of returned May, the sport. taking European the June months, associates ease Tours as increased approval the forced the our as end weeks since after production restart

of the $X.XXX While has and shutdown the to pandemic equal we strong Acushnet global initial resilience get quarter and greatly Affirming skilled months, the healthy Acushnet’s of remains this announce committed million financial side to when balance to dividend pleased in am uncertain, difficult entered per or sheet $XX most in benefited this product approval cash our aggregate. from period. as stability, other and we second the momentum the I of share and resilience associates,

results Now period. to for turning Slide X the and our

$XXX XX% Second last were below of million million year, $XXX and off XX% XXXX. quarter of versus sales were first sales half

reflect managed down team in million, the shutdown period period. last aggressively the Second during reduction versus OpEx expenses EBITDA XX% year. for XX% planned results quarter a adjusted was spending our as $XX These

adjusted versus the For EBITDA half, million last was $XX year. of XX% down

as near order June's third levels June Here in strong were to began channel the and gradually early reopened healthy continued of into followed effects improved X, inventories a recovery, growth momentum year. sales reportable contributed of increasing of May by indexed ahead see at-once the facilities quarter, were on and our backlog, which segments. down fast as a down in XX%, May. sales each which April output late lean and quarter start Slide demand, shutdown you XX% our July for last to XX% to the

performance. regional and Slide our to Now X turning

would noteworthy our as a and Japan are strong in play momentum effectiveness momentum Korea economic posted Korea resilience that team the brand first post with XX% U.S., period. team in gain rounds is elsewhere. increase disruption the both one EMEA of the our see markets This expect, you result seen Korea's the quarters. of for solid sound You by and were, reflects than increased half. the as and the less of and and to country's fighting is the we COVID have in execution few first second down

with game well EMEA's the consistent the in U.S., see we as ahead, later reopenings. starting their course one is the recovery month and golf about U.S. Looking EMEA which after positioned with

prompt golfer population Japan to without conservative, older one out to will that for driving go expect outlook continue and less to Korea, we inclined stay-at-home resilient not disruption, the be the we of remains And and Our anticipate to more golf while golf venture that range. remain steadier or guidelines play regions. will Japan's to

turning and half. Now Slide second the X to

mentioned, momentum month expect this we strong continue I was a August. and into As to July

environment the a end Our were however, recovered see the pressure requiring with sign. been strong supply allocation line inventories most has VX under a the we anticipated next are our ago, Pro over versus year Golf of at for available the chain the several positive as well has weeks. which down of June most inventories channel U.S. availability, supply and demand. part, our footwear in past levels with demand, reporting XX has This anticipated reflects activity, versus lower strong period markets retail bag which year. following modest weeks, over contributed this consumer demand are down than extended inventories balls and year. Most XX% from the inventory last also inventory club XX%. about to XXXX earlier of declines promotional inventory to down the are global and XX and closure golf

in conditions most continue R&D to we development call, products great product exciting previous market the And efforts thanks of coming the our new months. ops readiness ensuring to the on work introduce noted new our prioritize of the we conducive. several launch our intention plan teams, to with As we all and to when are products

thermoplastic golf combination our in and dozen. short urethane launches ball and for America and long a speed month. Speed AVX will game per will of great spin Our Surlyn-covered next be existing markets new around and multilayer Speed all retail models this control and VX Tour between game positioned in delivers other performance and Tour and franchises Pro $XX week North

that as Titleist product recall this may You of last EXP-XX. version fall test-marketed was successfully a

Titleist finalized metals, fairway product debut new have September. we in launch design worldwide to mid-November. to for intend drivers and we Tour in now expect tours which We plans underway and new on are fittings

of We concept also will irons provide team more family September. quarter on launch our third details launch about club call. in this new excited a to our And is

is not does the affirm platform will and sets represent our summary, that most game segment. does standard concept premium been super proving large ground may it also golf past someday that product While the and In resilient incredibly for new be in reflect business advanced a valuable our months. the and have I technology in iron franchises. Concept materials over core used the constructions of volumes,

Our done and great team are quarter, look Acushnet's challenging as a navigating job second positioning and readiness a in the confident to we future. has we

shareholders upon and at seen the preparing months. exercise teams and demand the prepared on our planning, and continue participation my are time trade I As our over track pass now consumer commitment to associates well have partners of call same Tom. affirming to safety expect, high caution we three our long-term will conclude we providing by of uncertainties, COVID-related Acushnet's would of investment return with in over a past to the focus you given total opportunity. two compelling our the the levels being to while on to our remarks and record proven building unwavering will capitalize I

Tom Pacheco

face on and shown Thanks, their communities trade in to truly manner. effort call. would David, amazing the resiliency recognize associates, families, team and forth running the and of a have put to on safe pandemic, that I to Slide healthy our and the X. in partners everyone get business our up back the Starting good morning our like and the our

mentioned, year down XX from XXX gross our profit driven million XXXX million million cost taken XX% the a primarily down COVID-XX. into in gross versus QX last David on as was a results to during Overall, the impacted QX was operating severely XX% our in by reduction and sales by basis R&D XX%. or compared QX million, expense for our of coming XXX levels million, XX year QX quarter. our XX QX down XX% constant last The QX year in and down XXX million, result XXX versus down of net X production expense million, XX% or currency margin As profit the and and were points. QX consolidated XX% gross expenses planned sales down were gross XX.X%, decrease was down SG&A were actions was volumes. overall basis. were and decreases or margin

$X the over income million, a XX which million carried change million, little a by one-time QX slightly benefit to in in million earnings, was was the our from had shift QX from million offset of prior program. EBITDA year by in tax driven Holdings was we income and Operating the was period. Interest QX our X jurisdictional discrete XX restructuring from QX, to and $XXX,XXX, XXXX. During was of Acushnet from net XX mix attributable a income related adjusted prior X charges, year over XX structure. our down down a benefit expense million of expense international million, down

currency. the year first first constant the down down margins and Gross from XXX down XX% the sales million, XXX last XX.X%, XXX versus gross XXX last Consolidated results points year. XXXX. was year million, prior our million of were basis were for half net from for profit and XX% to down Moving in half

over expense the SG&A R&D XXXX. XX% of months XX was down X XX first million, XXX million, half or million X%. down expense First was million six or

year operations from million was was XXXX. compared was XXXX, X earnings. XX.X%, income tax which our in of X expense down our rate driven jurisdictional million, million last year-to-date million, XX mix effective to shift increased and half First primarily Interest by has down from XX from the

two year. provided from the of attributable adjusted for have was highlight Acushnet a million, income period down and here. XX was Slide to last XX half. first reconciliation to net are income we the QX XX, On to same half million XX and million net Holdings adjusted There items First EBITDA EBITDA

the included the first unusual which nonrecurring add-back or The quarter, item, the extraordinary, in line of COVID-XX-related is net. million items, $X is expenses in other of second

work not safety As shutdowns, add-back benefits cost and the health QX, includes due could incremental for furloughed and and for salaries costs support paid in to associates, who remote benefits government-mandated to work equipment. of associates paid additional the

added quarter, $X.X are which extraordinary, were These items, in restructuring our net. million the related settlement is to because line item they included also note directly second or other the are charges of item, QX to charges The second back pension unusual program. nonrecurring in

golf Slide COVID-XX. As you our XX% clubs segments QX were XX% on down in XX% sales FootJoy and year-to-date. XX% see Titleist year-to-date. down was gear and negatively of in down in net XX% Titleist balls can in was year-to-date. golf golf in XX% QX were down all XX, Titleist were QX and QX golf and wear XX% year-to-date. XX% impacted by And

Moving repaid to about which, closed At at that on for facility, on XX, our for our ratio of revolving total had cash among we in down to requirements a we things, Consolidated approximately million million, million. amendment this debt the that sales. available XXXX months. of about and end XXX least had credit covenant of meet X.XXx XXX receivable next quarter. XXX hand end our XX five drawn believe unrestricted result net gives on credit on at sufficient our we time, liquidity of Slide as we At relief QX on XX. revolving July was cash us available leverage at And On from other XX year to quarters. will under borrowings prior down was the facility our June was million our ratio of hand cash our earlier credit We accounts facility our XXX the borrowings X, lower on the XX% QX, be and an the XXX QX. liquidity the June and outstanding million the hand, we had on

customers to Our prior payment up some four DSOs were days the gave terms. compared extended as year we

flow acquire the increase FootJoy healthy. remains prior Overall, flow about gear, quarter we quarter golf at the we our impacted and both the aging the and remainder the ball our Golf up were club operations quality increase million inventories million, this year. corporate July was make XX in and our million canceled for for XX KJUS, apparel was which XXXX with inventory comfortable up of both cash million for of half of did comes essentially half inventory most and this the the XXX decreases. X of first operations at zero time. making XXXX. showed footwear of categories XX About half. first businesses XX% from of demand of However, are receivable unfulfilled compared and Increases first last was in accounts and the until as all to the outings. Cash half not Consolidated XX from by CapEx from X and of amount by in for the and tournaments QX end from year-over-year or million, second year. composition million

expect in CapEx and We lower of CapEx still for are year full closely continuing to than our year be to monitor the XXXX. the XXXX balance

Slide allocation on capital XX. to Turning

we same, the cautious capital to remain our priorities remain relates allocation actions. long-term our Although as it

CapEx full be expect lower XXXX. mentioned, I continue XXXX to As to year just than we

represents to of declared shareholders cash This of repurchase a on program QX mentioned, did suspended in We of a record we today not our million X. dividend to any approximately share shares previously September QX. shareholders. did share continues pay in and, Directors of on $XX September return and to June XX a $X.XXX Our repurchase announced dividend David as QX our Board payable be

know, guidance we guidance issue April our did earnings you on as new our call. QX Finally, in not and suspended

demand continue for to consumer than rounds and We August We demand even related June sales on of to impact currently strong be our around the sales expect and impact and increase play QX world in QX. in in to in September, are our encouraged July. higher greater and with the and be positive the significantly

lower we as than do driver our our of a shifting XXXX, expect However, QX into be of the to sales primarily upcoming launch QX result mid-QX.

operating we our expect slightly expenses planned currently discretionary we to While manage levels. spending, QX be down our to originally continue from

detailed by impacted uncertainty severely the was of impact regarding this the not In our QX we business in will time. continued conclusion, Given guidance be COVID-XX, future COVID-XX. at issuing

However, we quarter. the was that to and strong will get consumer to were shutdowns demand believe to were the running through government-imposed this quickly able strong consumer meet in mid-May. continue lifted the demand up after begin We pent-up third

degree a However, to uncertainty. high be there of continues

We into that, With are the to confident the now and appropriate turn Q&A. we have steps taken company's positions financial will to I the to market leadership protect position liquidity Sondra and the our for us call maintain over to future. enable

Sondra Lennon

lines now Thanks, Tom. could questions? we for up the Marcella, open

Operator

Instructions]. [Operator

from Your the Conder Wells of first question Tim Fargo. from comes line

open. line is Your

Tim Conder

kind just difficult the couple here. channel anticipate ability where the congrats I’d and Gentlemen, normal on change to do a when look and if in A product at it the sort back items you commentary channel your you. introductions on the like to to on you inventory, Thank of of cadence your get of your to new being of execution here? – environment. back supply it factoring normal,

David Maher

broad work as see play levels. would some should summer I seasonally in and consumption Tim, October, we to say, way their begin months we get way normalized come to to that September, you inventories assume inventories, and back through channel the make channel adjusted marketplace, our the fair

Tim Conder

America far any Europe difference as channel versus And versus North Okay. as inventories?

David Maher

the – think I what resumed saw we North in earlier game started America than Europe.

happened than running down range also America there differential later in world is is bit world, early play the up in the picked little of to key of rounds that somewhere healthy rest really the again, of most but in around So May, are the the leaner But the Europe. a North and markets modestly. U.S.

Tim Conder

Okay, great. you. Thank

David Maher

Tim. Thanks,

Sondra Lennon

Tim. you, Thank

question Next please.

Operator

comes next Imbro Daniel line from of the question from Stephens. Your

open. is line Your

Daniel Imbro

on everybody quarter. congrats morning and the executing Good Hi.

David Maher

Daniel. Thanks,

Daniel Imbro

probably they as all that, the would. spending Are is we resilient thought be? broader about than the participation the in or golfers maybe we are David, making hoped few majority you would golfer? what Are really of last in I seeing new up maybe nicely, related as on just drive they want are originally to talk recovering they spending? And still then learned to about faster the driving today? Can scale they you Industry industry. start core months it you

David Maher

I the faster so Yes. of charitable or cancellation the picked would I seeing will at outings certainly think data back reflects a add we’re in to going One that have many anybody than corporate up March have so play things Daniel, commentary golf pace also anticipated rounds events. of April. and

you driven really the when those So of cancellations. look numbers, at some recreational by offsetting play,

So interest and a of July playing from they expect rebound from are or and certainly it’s is more. lot in strong what and we’re the years continue partners, got never a into play we’re I play, whether that One the and in. folks who our players, played golfers we August June, what the game is coming about the back and that angles And all folks to hearing think new of element simply May think then from From seeing influx jumped months. trade ago more the a you’ve or into and dedicated more juniors strong played too seeing folks we’re have who equipment. is

and or as of the as to is and that play and the May, nicely, connection angles. and That spending coming – affirms, as the we’re between was golf. of seeing seen sales So an that far last rounds back the the area I round and think that’s again, to was profile game accelerant the And commercial is component of game. spend from that seen April uncertain say it but of only one all strong this of fair typical we’ve participation recently that we’ve resume over as that months, couple been equipment correlation element per the

Daniel Imbro

of That’s consumer we’ve saw, any options then did ASP helpful. months any And the And maybe your financial place broadly, maybe more just golf see consumer from trade is price that years or to during or downturn deal ball today? you upcoming you then broad lower within pressure? two do with in the think face the continued they we you down maybe shapes selection, that to – up few the do seen launches, in do about last as how a think we think like increases you

David Maher

Yes.

channels was So and as focused on we into as lean could strong didn’t to down, we as our positions. it of resuming demand quickly shipments see Again, resulting situation inventory that. because relates putting resuming operations, the trade in product the

So we didn’t trade down. see a of lot

all the healthy that we through Pro Now from said, demand lines, VX saw the lineup. product across our entire down way

So pressures Pro most that final we’re there inventory as trade dealing the a the acute VX. was is And wouldn’t are add prepared I’ll component. mentioned piece with I now, with down my on remarks, say

to golf. thinking Secondly, increases, say. think a where for way lot it’s we’re They’re it how one the price any their increases, in a in of about up terms But consumer one, playing soon They’re on as we reasons. relates is They’re strong pricing? game they’re signals to that or different lot engaged. of Daniel, the too how I picked haven’t investing other. about price of thinking

better believe on to I in our the products point, we innovative have I answer of bring we if marketplace exciting next any a call. think getting capture this might signals a terms But continue and for at market, We we’re from premium. you new to and can that that,

Daniel Imbro

That’s related follow-up. helpful. quick just And then a

to meet the that percentage demand any couldn’t obviously where in of inventory lost maybe of in quarter? what quantify sales way headwind issues. to mentioned XQ, was You what sales, maybe you kind the there Is growth

David Maher

Yes.

we I club most or but got couldn’t we ship, custom-decorate shutdown We of were it’s golf or custom in think whether to and May. embroidery. produce, you couldn’t couldn’t almost exclusively, remember, assembly all balls April we

least period a California, and in the in own at with in shutdown. centers were distribution just situation that of during that the period. major So our I unique think was U.S., And disruption market is Massachusetts

shutdowns could in primarily was situation government-imposed own of when function as with we things Our then as ramping dealing May. quickly late a and resumed up

Daniel Imbro

luck. of Best much. so Thanks Okay.

David Maher

Daniel. Thanks,

Sondra Lennon

Thank you, Daniel.

question Next please.

Operator

Brett of from from line next the Andress Your comes question KeyBanc.

is line open. Your

Brett Andress

can from into Slide the is you us that then for way, like As detail July? and to compared would by of cited the June? bar thank you on focusing And more there any to commentary gave just the that, August how is just given number XQ. also the I I’m off month down timing? down, of the you about that within building guess think meaningfully on launch that X, us, seasonality that also look get XQ trying percent we the what don’t to momentum just you XXXX, June that mechanics I know July in the give sales on So a

David Maher

Brett. Sure,

of July June In even the be saw expecting year-over-year, July, in terms we XX% up was momentum said basis. a we we higher on and up that that to year-on-year are than

So really July. strong momentum in

of – of the the of would decline, to volumes August similar about QX a period, the shifting of the to the out say XXXX half QX November see be lower, shifting expect despite shift by because XXXX. but see of drivers volume and over you’re XX-month the going terms probably In timeframe driver. of it that timeframe, we that to we from into the did primarily we We momentum, and into expect

Brett Andress

it. Got

because just core to headwind presumably markets? been have off tease able versus a a just Have course in Okay, how part the I’m business much all sales? restart there. last the slower that’s question And one that’s sales, of reopened helpful. out the your you then to of fittings trying fitting been of on

Tom Pacheco

the the equipment our do educating to than as we’ve good is, fitting. anything, and jump we was golfers safe areas process do. club of a What real into uncertainty we fit got great That one more Yes. the XXXX, method about June our can job did share team would of world and I we the back of as effectively more last of how did did for and the in to and And we year last golf Brett, planned I a as we talked than did same July that much consumer on mentioned, the fitting call. sales. actually fittings reengineering is partners helping trade that

surprise for a was us. pleasant that So

I our saw think it And partners really for fitting, was off the of and and that tech I reps. future fitting. off course was it the through about, trade be our thing, fitting, or we on bodes on course well same their think lot through talked of course a or that number I whether it course,

So one couple last is area custom of of we’re the with resiliency fitting especially pleased months. over the

Brett Andress

you. Thank

David Maher

You’re welcome.

Sondra Lennon

Thanks, Brett.

please. Next question

Operator

Michael Your line next from Truist Securities. question of Swartz comes from the

is line open. Your

Michael Swartz

everyone. Hi. Good morning,

start Just with out in margin the the gross want to quarter.

XXX points, I on was decline down it basis a think but XX% in revenue.

to did I margin you the well of first trying if up were not Just items. most understand, as on you quarter discussed gross savings the hold line how did? cost said the guess think I all it of, as call in OpEx

So little in how on more maybe that that should color how half And bit just maybe we a about of the back up? think held the year?

David Maher

Sure.

savings costs in in the the In terms there direct our some as but the certainly cost savings of OpEx areas, of were cost savings, we cost certainly highlighted well.

I acceleration soft the played also higher than would certainly margins equipment always the we’ve versus goods a mix said that that gross So that might led equipment of goods, gross – both in have of than a perhaps say mix decline soft role. higher June, and golf sort expected. that shift you margins in lower in gross have of balls to particular, and clubs

getting terms bit In the of that half. 'XX, and launch we’re a second the we the detail a see a shifting impact there, of half, to 'XX although driver second from into great on margins with the expect of would that in the not headwind of to and of level

Michael Swartz

stuck lifelong may to coming of how lapsed that change kind and sponsorship a just you Will of the market you’ve marketing really the around And in the targeting golfers anything new forward? helpful. or surge the really lot buyers past, commentary coming the back to very market? first with activities your That’s – Okay. and lapsed of market. more be into golfers then marketing given really thought I golfer. in you timers or any go-to with dedicated into going Have know

David Maher

around with balls the Pinnacle capture dedicated of think lost the core marketplace focused our we pay way we do look but to interest the – change. through Green, Golf the vision Union dedicated which from we our through We’ve from at remains ball golfers a That but some entry new shifting will points vision rather through to rather; Certainly, golf on are balls, committed dedicated the I doesn’t and whether remains have business, unchanged. really core I it’s it’s our that, golfer. attention can we some to way golfer. we it’s and business the our the core Yes, trends, say, the dedicated and golf best built – mission golfer. our introduced, PG whether mission entry-level

Sondra Lennon

Thank you can for We the other take Any Michael. next you. question. Thank Michael? you, Okay. questions

Operator

comes Your Raymond question from Joe next James. Altobello from

is line open. Your

Joe Altobello

Great. Thanks, guys. Good morning.

So you commentary to back the August. QX want the decline first I and this based going like, on reason for the is club question, this momentum July It in that regarding sounds the to and guys be were what saw on year-over-year to side. morning you go saying

we QX? ball should So be assume up that year-over-year in sales will golf

David Maher

assumption, Yes, that’s fair a Joe.

Joe Altobello

to are and now you’re had to guys catch lingering Okay. about, shortages are the point? talking issues just on the due up this VX Pro the And chain supply you in April at any ball essentially seeing or May you related and that’s simply that, playing shutdown side you then that

David Maher

Yes.

production second ramp-up month of really or and we’re was and VX the Pro were of U.S., ahead job, Plant – late did good shutdown continue most In at throughout ahead now May. in did normalized of the we we April and Ball March, a at team or IV all levels. So through June a running the Thailand quarter.

demand very ago. running it We’ve we’ve talked that got So coupled shifts situation than faster But a with strong we fact day. about. some inventory we’re lean is, made it every year the making a three I got

pleased from So a production I’m standpoint.

we all doing can. We’re

that had of component other times The is pretty are worked custom through. had we strong We We backlog normalized customization. at that and a that lead work now levels. finally through to

dealing our more very than it’s situation the ability now to is much So – very we’re so much demand-driven produce. with

Joe Altobello

guys. you, Okay, great. Thank

David Maher

Thanks, Joe.

Sondra Lennon

the we Thanks, Joe. Could take question please? next

Operator

[Operator Instructions].

question comes line Compass. from Casey the next from Your Alexander of

open. is line Your

Casey Alexander

a for footwear type in good Hi. some One, just area and planning questions. deal that channel? on Good called apparel that of promotional you’re to always inventory shoes, if the since I’m golf activity morning. of some Two I’m wondering inventory looking any in you and push through excess out

David Maher

most the is ordinary note and while at channel of cycles. are inventory and moment will down the typical down. apparel also Casey, of out in inventories our channel notably out that is or on clubs, down footwear balls I nothing seasonal also

bulk while this we the the to year make season. of half increase, our of back typically compelled enter time So take is any wouldn’t as we’re that making it actions otherwise of the we up not

Casey Alexander

question. Okay. And you. one Thank more

I’m EBITDA, includes and paid adjusted that work. to relates why salaries associates who benefits curious it didn’t for As

them If last you – paid year. you

You’re this paying them year.

it You’re to next presumably seem EBITDA. add-back charge business therefore, one-time a going to than an realistically and a decision pay That doesn’t year. like qualify more them sounds to for

Tom Pacheco

because duties carry instances, QX and In shutdown part couldn’t Casey. people on and primarily or their that individuals, those accounts were who out Sure, in those were was accounts call other sales of QX, because for of the couldn’t early example, restrictions. the

a benefits was associates were expenses those furloughed, their to they and we so time still even prior employees. couldn’t those so the perform duties. employees, – of period were came Ultimately, related they those and into associates paying for though to there furloughed out where bucket And that of

– perform a payroll. were could still it’s on but really small it’s the and number, the still were piece duties they So when of individuals their we not

Casey Alexander

employees? to of employees How that back you? said difficulty does Okay. That me have the they’ve gone you government one had have simply some getting any has more for unemployment of companies that question. lead because Some back the benefits. difficulty getting strength Did furloughed

David Maher

certainly anticipated some associate We is long base of long, But, our you know, that. Casey, as that. aware tenured. of were we

we associates ball on have years our your to Leading over XX plant average. or fact, very service getting question, of work. to challenges folks had back In little trouble

Casey Alexander

my That’s great. Thanks appreciate I questions. for it. taking

David Maher

Casey. Thanks,

Tom Pacheco

Thanks, Casey.

Sondra Lennon

Thanks, Casey.

please. question Next

Operator

next comes of Brett the from Your from Andress line question KeyBanc.

open. is line Your

Brett Andress

chain the related? for timing? mid-November missed was follow launch if up reason I and but just the supply sorry what Thanks Is for this, that the

David Maher

question. Brett. No, Good

about The ready. June, key activate to in we out activities, the prelaunch We activities. was team to the our launching disrupted too is advance the team ready. prelaunch We market on some – pyramid marketplace. it July simply of in how in August tour like and throughout think product The our was and introduce felt of You right.

readiness and out we September. on staff with focused with months lot of time launch more of the it of felt just the efforts. product last window recall, June, what’s our August, launched validation best simply was months tour us And and shipped launch build shift as months. professional engage a you basically introduced shifted June as our during months that the whole prelaunch we of If a we and in driver, until to golf players We window identifying But for things July with to June, a right a we a tour competitive a it marketing and in world what’s of the less standpoint, gives no on importantly, it couple the much prelaunch couple tour us around right some of couple out and demand. play

and through it November at that looked made lens we sense. So real good

Brett Andress

you. Thank Understood.

David Maher

Thanks.

Thanks, Okay. everybody.

up time look again. catching next please we always, forward Thanks, in and safe. your As to stay meantime, appreciate the interest call. on the and And

Operator

This concludes conference call. today’s

disconnect. You may now

Acushnet (GOLF) 8 Aug 202020 Q2 Earnings call transcript