GOLF - Earnings call transcript Q1 2021

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Operator

Good morning, ladies and gentlemen and welcome to the Acushnet Holdings Corporation First Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. After today’s presentation, we will conduct a question-and-answer session and instructions will be given at that time if you would like to ask a question. I would now like to hand the conference over to Sondra Lennon, Vice President of FP&A and Investor Relations. Please go ahead.

Sondra Lennon

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

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

everyone differ today. uncertainty call expectations over may and Acushnet's Actual from forward-looking I to be Before turning and statements expectations. circumstances. that the are results to will call the we on current to changes forward-looking these would in are David, materially like subject remind These statements on making based

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

David Maher

outlook up the these EBITDA XX%, dividend investment of XX% brand per company's Acushnet's right are $X.XXX of thank quarter, XXXX to quarterly reflecting commitment traceable approved equipment the to in Titleist first increased quarter outlook of my our cash throughout $XXX year, results which work team's ongoing gains of revenues product the am Adjusted to $XXX position talented XXXX Board's the for for company increased first company's today's supply Earlier strategy. development, XXXX XX% and XXXX. for of and our acknowledge the must given financial teams shareholders and quarter. confidence results, share commitment during and and I I and first last to And of excelled respectively execution delivering first the everyone XX% Acushnet total Acushnet to year fellow versus Despite and exceptional million as most and return quarter pleased report challenging and our capital circumstances. long-term and the return thanks Board and XX% with XXX% the part XXX% the travel Thanks, and quarter limited discuss of notably of over to the Acushnet's past future last compared and to continues Directors FootJoy benefit remote XXXX. gear versus and management operations are which into chain year. and has have the year XXXX. the our and from team and mostly compared associates of balance sales morning, XXXX. XX% versus joining Sondra. Good posted million as Getting and today, call.

during contributed global plants remains our fortunate keep to and priority associates been efforts our effective. ball that golf our club safe have has and teams and assembly glove from well been have factories. levels widespread heightened We been has output to and pandemic This highest footwear this which

game to partners trade and our who providing of experiences Additionally, with safe levels I of global must continue network high golfers compelling at the of service excel acknowledge and golf. around

page X. to Now turning

especially delay disrupted Pro Plant business XXXX our February Bedford noteworthy supply VX quarter by given storms raw most for demand Pro golf start that causing one in achievement material and decision of new II. increased last the period Texas led the take look fourth New at segment. production our Ball new our meet our VX is balls a to Titleist at our will successful We a fall of two-week by launches. shutdown to XX% This

the During the where balls balls professional players the sales than company Pro more golf National have nearest benefited for group. used story Pro talent nine VXx by or from affirming ball. golf all categories terrific and golf emphatically the our last up this XX% Augusta Golf XX% with the a of past field strong also Titleist The teed quarter game a competitor. Amateur season And total month's VX's Pro up Clubs year our quality and of in period begins long-tenured times has all on experience the Titleist success golf greatly Pro club demand of VX and Women's with at worldwide the XX% VX VXx promise operations been balls and performance tours posted Pro regions.

been product leading has by Titleist metals putters irons, which Scotty cycles. wedges year second life complemented for their are TSi of demand growth respective New the Vokey this Cameron and healthy in

double-digit to club XX% models. HyperFlex leadership, the navigated FootJoy's these high which with led golf single-digit gain finally, yet and by momentum iconic performance recently and Masters gloves new in partnered which global effectively a gains results limited last a significantly collection in Premiere brand terrific style delivering And edition XX% new growth. indicated in shoe launched footwear to decline to Ski. club strong designer team was is sales and golf footwear offsetting to workflow assembly complexities also And all supply quarter build delays. response. in lifestyle and apparel shoes increase consumer as been Titleist posted our chain by challenges. to quarterly with operations growth momentum risen and with develop building and the group built markets growth meet has Our a Series month in modified apparel a Todd Snyder new COVID Titleist was FootJoy one the commitment number Gear has was our as traditions Highlighting during continued FootJoy's FootJoy at and our

business region X strong look a XX%-plus EMEA and by Sales the first slide which COVID Japan quarter. impacted our by In X% US play most the has gains been our in the of at US, facility and Korea to XX% was gains related of rounds and in posting compared up of the region across for double-digit the increased this lockdowns turning the XXXX. Now each board posted segments Each quarter. to disruptions. were with and as region. quarter

by and been period. the when courses are Across were was to starts many the week. month In very shoes temporarily country went after XX% golf summer down Foot.Joy to posted overall success great into think play EMEA, the during play expected across into and been as rounds low received season next lockdown much Pro apparel. have golf in increase well demand equipment last off Japan, and new courses you healthy we for of continue Titleist digits balls, a and for Korea is for and both are And up steady closed of seasons. single the start products and fueled open was for the healthy play TSi region participation new to fall Foot.Joy bodes consumer would which golf the given has a quarter. well remains And the Our metals robust. VX which golf expect

rounds. supply component decent shape partners are the through demand. availability keep inventories extended not lead year healthy and we end Golf field the Acushnet expect about participants Foundation. raw material number are levels. of worldwide participation to and to XXXXXX for if custom-made women up across slightly with a periodic last games pace forward, which of overall Demand with most at strong times as expect we looking our that all golfers for and clubs Avid contribute second incremental men's we by through most drive continue Golf healthy games the new energy is below And to products growth golfers younger of strong causing rates to professional Now making the enthused regions Golf quarter. National to Globally new normalized products balls the the of in are adults tours. interest remain estimated US face demand the women's the the in and constraints for our in and juniors

As positive long-term demand a see our for for call indicator last which robust noted instruction game business as on we and of and coaching the is golf.

forward reduce were of advantage half necessary TSi-X understanding and As of recent to able notably we TSi are demand will In many to this months product we the a given franchises in And and result drivers adapted to the year affect our the in with fairways areas second indicators early inventory clubs. dates to Titleist sales end-of-life have strong opportunity and hybrids, front caution demand chain Vokey strong took reflect while first pull of of business the capture iron volumes will early of golf of XXXX the given business our In into continuing season the such we the to level capture raised of uncertainties. positive and take years instances advantage product global to and supply cycles that half for these both as the the second with the some throughout season have most this expectations our timing of load our of cycle constraints. in and year X health we which balance peak demand. launch wedge their life new of

investments the digital leveraging are earnings company's position support our reaches capabilities momentum golf The of invest industry favorable strong market this and remain in and roughly upside Looking segments. supply In future a profitable our future our longer of term the variety long-term These across of innovation, over will we a remain half committed for we make industry's the compels OpEx product to new million heights in prepared business of golfer to bolster post-pandemic company's to the will we $XX fortify commensurate in year and back in balance chain our short-term to growth the growth order opportunity. us as our the be connection, golf of with which to spread to forsake to in financial for amount a planning commitment, projected position each A&P strategies. investments year world. to

long-term these company how ball specifics, game shape and we investments attention address and will of our hand to call will this our along won't In closing Tom your over into club enthused that with timing in are Tom. XXXX. volumes get we Thanks shifting impact for business are And with will great the While the and I the golf of about in prospects. morning.

Tom Pacheco

up which shift environment, and mix golf mix thank Gross would have Acushnet's income XXX in the higher basis to margins current points. highlights. and resulted first $XXX XXXX up from continued work associates QX partially expectations. million net segments momentum clubs, statement in David XX% towards distribution million was QX, $XXX was in favorable compared a from quarter increase result freight selling or our presentation. XXXX. in of expense Net has across EBITDA partially volumes jurisdictional shift this in a versus than gross tax were million to for $XX our There attributable quarter from resilience income $XX increase in Starting appendix XX% that show The slide and QX absorption compared resulting XXXX. from exceptional continued quarter sales inbound in lower net QX up reconciliation million to comes golf higher retail million And costs. the currency of year. the was XX.X% XXXX and on volumes million. XXXX Holdings output also chain million, half was in in was with Income $X.X of the shift was to expense $XX gross offset $XXX the was The higher have XX% SG&A Thanks product increase their earnings. a from million, was $XXX,XXX down average comes XXXX. adjusted resulted they supply primarily prices in operations sales. well and selling higher Consolidated Acushnet a a strong costs our million up our e-commerce income good XX% profit performance. in and and SG&A first earnings higher as everyone. higher manufacturing hard we QX and in like from profit million $XX Foot.Joy promotional by effective offset adjusted as as a rate to as by in to up advertising balls morning I exceeded $XXX or costs second EBITDA gross and down saw the shifted to our our the mix of million, The later for during higher were a and quarter which margin from for sales and favorable higher XXXX And release, the Interest for in $XX shift constant than sales our basis XXXX. which of all million, was $XXX primarily is the the $XXX in was the XX.X%

next the Moving slide. to

and borrowings had sheet available our debt decrease was balance had strengthen. to we $XXX on hand. from unrestricted the under $XXX million year cash facility. $XXX a credit of million QX, end of million, Total revolving At of of Our $XXX we million of last continues QX outstanding approximately

Our at the end of $XX Consolidated very sales accounts QX at up QX, XXXX. leverage times the X.X was from during the of $XXX QX the from was quarter. million, at receivable on strong end our of ratio end QX X.X the XXXX of million XXXX down end

year. days, Golf outflow from which net of of was about million were driven offset for higher compared year-over-year $XXX were X%. to mainly which QX The days outflow QX higher were down $XX about cash three an year. compared And golf the at end comes were was lower was last $XXX XX from clubs, of QX The million million. an Foot.Joy, down partially million inventories which to down to operations down year, which outflow capital. last by flow XX%. $XX Consolidated were Cash from for Our XX%. outstanding compared sales last of operations by balls, $XX down income, working about decrease million days

to under expenditures capital million than just little $X million year. we during Looking $X compared to last a more spent QX

be million capabilities we We capital in last driven investments the operations expect by of full expenditures range our key strategic for manufacturing million, the $XX XXXX $XX Balls Golf precision year to in to discussed and quarter.

to Turning next slide. the

allocation Our capital remain unchanged. priorities

excellence strategies focus and make acquisition golfers. to these to a investments We and into growth continue seek expect performance advance the We believe with our prioritize continue with business operational our and golfer that product connection at focus opportunities in on innovation, targeted return. that favorable dedicated drive investments to products to on a premium align appeal to that long-term will

focus activity. of $X.XXX we share expected record our share million. of dividend on shareholders. outflow and of a to flow share mentioned, increased our David And cash amendment would June to to March our of strong per we generating XQ cash cash on Board on continue $X.XXX million. X, credit Directors will terminated June XXXX as resumed returning shareholders outflow today the payable a represent of and an XX repurchase approximately quarter facility total which X, $XX.X On also early We per the free capital We to our of declared for cash to first dividend $XX.X during

a repurchase repurchased for During million. date the These XX,XXX $X.X we about with Magnus of under total QX, agreement triggered Fila. our approximately determination final repurchases share shares

from a repurchased purchase a As shares our million, on worth April XXX,XXX Magnus result XX.X about from of approximately total which X, to of shares for completed Magnus. agreement we million $XX.X

long-term of total of allocation $XX still a capital compelling for is We the believe our proposition creates to committed expect our and of shares. return shareholders. to remain our up which foundational million For repurchase we total a element value year XXXX, this to full worth a strategy

our supply strong temporary and disruptions chain, effectively in have products which forecasting business. all team to and participation increases in of added operational Acushnet high closures, continues manage to periodic market variability global unpredictability Demand golf and outlook. our the degree Moving cost and a through for remained our our of

for outlook has improved. Our full year the XXXX

On about expect midpoint basis, to XX% expect compared And about in to reported billion, up to currency the in to range of EBITDA range. range the midpoint up million $XXX We the the expect in constant of be million, at our adjusted $XXX of the to billion sales at to XXXX. sales XX%. $X.XX XX% grow to range the about of we $X.XX be a we X%

assume and Of sales the of COVID-XX and of pandemic supply we quarter additional no chain be significant including expectations and XXXX disruptions. global about impact incremental the significant course, to gains these higher With both expect strong first the XXXX. a to of second quarter, to which worsening additional markets first closures healthy we compared XX% half XXXX, XX% very project than as very

XXXX, of lower comments both shift to our prior second will and $XX primarily timing approximately be half than sales result that in that million as We also XXXX confirm a $XX million the changes of these in second discussed be than second of of XXXX. would call XXXX golf half shifts, clubs that sales Absent our half on February. in sales the out we will higher

especially this from now an in than air our container quarter to year. in into and impacted loyalty anticipate And freight to of of We XXXX rewarded XXXX. negatively the and due million to last each the be these golf currently shifted through we higher the and the freight utilization by we Additionally, half by corresponding of conditions end have recent $XX expect to spring, that first expect increases margins in driven remaining of global quarters second volumes Pro to by the air some balls now costs of XXXX, million expect increased we the expense successful gross $XX program VX be from higher XXXX half. OpEx

enhancement commerce, digital to brands. mentioned, of of David the product improve the make of chain over about innovation, strategic balance market fortify and position we the in A&P expect our strong and investments connection, million to $XX As supply golfer year

compared XXXX. XXXX, be that for and in EBITDA XXXX growth that expect As do adjusted be half a enabled first In will year result, well, XXXX we up we adjusted supply the and an up while will held with exceptional to second first and quarter half EBITDA the conclusion, adjusted continued strong lower EBITDA chain demand. expect strong did which trade associates our higher partners our than deliver and to And keeping us job results. excellent

our shareholders. we believe XXXX return to in for and long-term turn long-term to financial Sondra and will planning, a continue over we now well positioned be total remain full increased our deliver execute cautious for strategies call we I the our to goals we have Q&A. While solid our to With that, year

Sondra Lennon

now Tom. line questions? you, Thank Operator, could we the up open for

Operator

Your question Alexander Instructions.] first Compass [Operator the comes with of Casey from line Point.

Casey Alexander

Good And times the X.X I that's normally, ability a just to complements calls, morning. Hi. in don't is, turn achievement. inventory on make quarter one your public but -- remarkable

congratulate So, team I on would that. your

David Maher

Casey. Thanks,

Casey Alexander

$XXX looking to and am a year, million. of consensus I midpoint million Yes. at at the the the your guidance for extent EBITDA is of has your rest certain $XXX and guidance

so why conservative? look overly I at would somewhat And ask, we being as your shouldn't guidance

David Maher

point Well, The strong Tom altered back half very I and supply I'll and obviously -- in on comments chain of greatly and maybe disruption back the call on. our constraints. and given to timing hit really throughout XXXX, that demand has been some business just of of to the market last year and

of from helpful. club volume the a we thinking how playing the a We're I just wedges. of We'll did I'll maybe Casey, internal half half. about half QX. you of irons amount second in life There's TSi, at a give based projections will strong a We the blocks launch would And XXXX We've those the into on it good to XXXX. is balance as our good sell-off Iron fibers, the -- raised end pulled the couple building second are of with and the quarter. a example. year. of of into which irons move third noted, reduce we're consider of really phenomenon and going wedges, new So hybrids. the forward first be their cycle. it out also you irons

freight the got that an We strong I XXXX. And parts would then in a there. mentioned, happens associated half first a as of in typically into working with incredibly pushed is It got we're bit dynamics lot which OpEx ball we've $XX not But we strategic so million in launch we've investments. years. then Covered a ground with really, to Tom And We of through. as -- will we've even while be, of and of the the years second overlap business years, golf This overly piece that's did year, are -- years VX this -- the great. macro about did incremental HX in We've a year some another sizable, so typically got odd a talked, And So, number and that or the shift program moving this point there that launch our obvious typically was bolster half. loyalty odd we quarter offset because had benefited, think pieces a some odd in overlap PRo true is case that reasons. and in from less other XXXX. years on for the on lot even a fourth typically typically XXXX. field even HX.

Casey Alexander

Thank Okay, taking appreciate. my you question. I great. for

David Maher

Thanks, Casey

Operator

with next of from the Your comes Konik Jefferies. Randy question line

Randy Konik

David, your green updated the to you're your with Hey, having partners. guys. I want are thoughts conversations How grass you? just on I guess get

quarter. last mentioned You

key again just or to Get taken. of idea some get more additions, around of on private sheets perspective what the on You I about they're not? call about the it the fullness membership the they're mentioned the some of lessons on morning on What additions et perspective their lessons? this saying saying want cetera. being side

us on they're on that can to Just super what helpful. anything would saying you, color you be Thanks. give

David Maher

the was Midwest of and it's golfers rounds a pointing US early pointing But just that several who what Northeast really Again, and really play of to rounds down, we in -- Midwest as would in -- first last expect. But US travel from in the who the weren't quarter, it, really, commentary. is and South lot a you hung to first that really don't three first the weather. Northeast I And up it then significantly. mid-belt had play north we on up timing, we we because But of in markets you in Yes. May, the opened down the up the through Northern reality were this planes. Sunbelt, saw to get golf broadly the dynamics. due up quarter Thanks, strong they in do really about too saw in would Randy. the quarter play folks by but didn't typically would were didn't quarter, are you XX%. of qualify knew XX%, they and full. will and getting to Gulf and if there get first weeks. on that Very -- the were lot net strong. Anecdotally, the T-sheets What

of interest game busy As in tighter I've for right as in time. no demand second really given months we memberships a four and into And can surprise they the are said, three, golf than long first be. XXXX. as they've professionals half that are of Club XXXX in supply the been saw

see a we've we as long environment time. in it what see you So, and know healthy healthy seen a as we

June some the going to we're As we're intel to we really under broader get our and May defer Midwest belts. of to that end marketplace again to quarter second seeing Northeast when what have in

Randy Konik

plant ball the things? of on that Got then about thinking with the a bit And upon the that loyalty you're side. get program program. you you're expand curious success just then seeing that the just business? program some on areas success perspective the further there could perhaps I VX your other side Pro or you into And on of on you're of how capacity little it. are Anything expand can learning where Just with

Tom Pacheco

Yes. we perspective, capacity running still are From a shifts. XX/X

we maximum at at of to in terms our close capacity production. So, are or --

and absenteeism loosening COVID have like and things to more out itself exposures employees some reduced manifested become less because potential been improved having that of are widespread has which well. COVID Our as call restrictions somewhat capabilities production as of there's in as vaccinations

full are improvement we we So, our capacity. at production capabilities. seeing in And are

David Maher

the too Yes, right? the add we moment in have the to served And us like first Randy, that what ball make over the three take We said chain have control over quarter, plants. years. sell. we've supply this well our I'll we We to

We have our factory. own glove

joint have factory. a venture shoe We

We around have club assembly the world.

us real well. So, served that

As and we some T Tom capacity, levels we're rates. areas see reduced continue or better absent peak mentioned, at to in

Another story supply partners piece the and of our vendors during our is overachieved quarter.

we ended more components an balls, golf example more So, led initially up grips, getting believe. as more to than were for we shafts rubber

coming obviously that It's new played there of coming macro the year. we from et I But supply is the strong from the coming green Loyalty was grass, control course, for us. all cetera. quarter We've a much commentary when all this see product And game, channels. quarter business first a for I into see we see strength right? that from as the channels, And of and that it's that. So, it's enthusiasm what theme really on you in think and where our that think digital got able in I is our and were first to leverage results. chain rewarded. look at

always a we little index the a launch favorably game. in bit new prior a interest it's it's season anything expect -- year commentary us VX to So, year. strong to than for Pro just than But early the on more

Randy Konik

Got helpful. guys. it. Very Thanks

David Maher

Randy. Thanks

Sondra Lennon

Thank you, Randy. Operator, next question please.

Operator

with comes Stanley. question Morgan from Greenberger next Kimberly Your

Unidentified Analyst

of year. in Kimberly's mentioned expenses half SG&A obviously the Hi operating all. quarter was is million up This [ph] XX%. back the Javi you $XX And this additional wondering I'm team. from

mentioned? the those particularly you So, if in give you expenses cadence I'm throughout color wondering launches the the that quarter, could considering a on the of little of bit shift

Tom Pacheco

be any the balance really Yes, of product the the of changes $XX not million our evenly of spread by some of incremental the OpEx of and impacted the will fairly throughout year investment is cadence launches. in

Unidentified Analyst

Thank Great. you.

Tom Pacheco

welcome. You're

Sondra Lennon

Javi. Thanks,

please. Next question, operator,

Operator

is Joe from question James. Altobello next with Your Raymond

Joe Altobello

I guys. morning. trying color it retail would on first in market growth share to trends I'm the Quick number what your grew of question any but a not Good it's content. put Does Thanks the helpful. wholesale for quarter Titleist in number, know a the industry equipment here the in on quarter? sense market. have any be XX%

Tom Pacheco

Certainly, into Joe at our Yes, out get there. shipments. I points We won't our some industry look shipments look data sense we that I can And is specifics. outpaced shipments. at put industry industry sell-through.

feeling come standpoint -- we as well. we out share though of So, from did that we a

at other is the a than done you to The look reality job others to better see pipeline. who's got too replenishing inventories

need days. its unique share first irons and it and can ever really really of cycles the but it's our in a half their the hybrids and feel categories. story fairways I you in compare position in we got year to like early But again, prior, heading days. we've said more we've wedges which had got life because as nothing positive performance and it's back at. two in performance we So, strong in early the that sell-through But inventory We've strength add replenishment two. drivers that we the into we as than quarter. shipments second is got our years all and look bit And But about

Joe Altobello

any cetera? or completed them not mentioned helpful. inventories channel to And of Got they it, And terms channels green et in that's XXXX? that if normalize of Do potential year, healthy does there you maybe extend bit more that tight. were grass this into you are a expect others in very terms are than particular

Tom Pacheco

in particular fill pipeline you'd season at of opening grass strong. Yes. a Well most receive a took the in green those doors order up US are they're as really And We expect good. the shop. to channels look

So, that did happen.

and falls most in projections But get on is in to normal. so. I back consumers into Asia golfers light running balls closest as far The of which we're custom of we the apparel, they're make so couple to supply normal view is when now as the facing challenge the of more and news has the whether historically global is constrain time And much comfortable towards challenge side it industry world, but towards think or we as normal down. putting and long-term industry just are get heavy raw facing understanding overall, shape And Clubs lead the marching become down good turn materials Again, it's and our ability that's is of nowadays. around lead may on one-week levels. The the the which I look our as right and company EMEA is, clubs. -- do down been years is is been gloves I certainly than footwear, anybody US side, the in entire most. it's back Gear flow three, are right? to Lead a normal. as years all we industry if probably may has probably constraints, doing As moved industry inventories The longer be challenge challenge. at think how now with. challenged, and the to it's are But and just times don't back the said a shape. products, although reflected can become positive. away have going the better and Certainly, be is slightly. to forecast last What arms we what's good in well our custom time decent a custom really an than over not four-week they

Joe Altobello

it. Got you. Thank

Sondra Lennon

Operator, Joe. next you, please? Thank

Operator

line question Imbro next is Your Inc. Daniel Stephens from the with of

Daniel Imbro

question. top line. the for Hey. I Good on morning, to taking the wanted start guys. Thanks

I call, As Tom, of last you low to kind noted mid-February sales up mid-XXs. were think of

XX%. easier to compared that demand quarter any stimulus as level whether then big That think mean the to comment of And into a March? implied what I that pretty was on even Is at do March ended comps? over here easier? has sustained April extent you You XX%. number supported

Tom Pacheco

with from of call what on majority do to had we said increase really The chain last mostly the supply Yes. execution.

exceptional demand to So through consumer was really about much the us led and results. And supply was of how the demand demand came -- strong supply and throughout the our concern to be chain able the the we'd variable or and quarter. meet that chain

two relates continued the quarter. demand, to into in is but months seeing demand and to continued go what the April, strong As we're so it far still momentum

there. to no, So in But be strong is additional commentary demand the continuing April.

Daniel Imbro

OpEx. to for that to outlook? out the of million weighing and coming get the guide. it from through you'd like And in that underlying the But like margins the it. the question down on still on freight come $XX looks million are higher just Yes, rest Are guidance profitability of $XX ranges XQ. that variables of the higher margin beat in down the kind then follow-up It year guidance. are in the for Casey's revenue the looks the on midpoint any accounting revised full call there flowed earlier other Got did even

Tom Pacheco

half. half. Daniel, of been of the I'd the add first The iron margin normally shifting into the in sales is only would second some and impact thing the gross wedges that, the to of Those have

out And that the shifted gross sales half those into the comes has profit gross and half. so of the first with margin second along

be So that the would other piece.

Daniel Imbro

will right. Tom. follow Great. it All I offline. Thanks,

Tom Pacheco

Thank you.

Sondra Lennon

Operator, please? take question, could the we you, Thank next Daniel.

Operator

George Your next the comes of ROTH Kelly from Capital Markets. question with line

George Kelly

for everyone. my Thanks taking Hi, questions.

So just you. a couple for

golfer you detail incremental of give is? million OpEx, And a golfer specifically times on $XX of heard us what connections. the couple you can just the more First connection. a mention I that little

So just that? about more learn curious to

Tom Pacheco

programs cetera. Hey, George, golfers, reps, fitting, get the golfer best that is Yes. with I too our you out is And flows is going that It not ball as we're on us for et specific I'll but cetera, through tech ground is club can. to that more connection, fitting, et detailed, also that engagement loyalty help to okay?

again And connection, earlier, -- business, some the chain And have to the and think it's again shifts those strong of and shifted positive the supply frankly over uncovered back golfer which to talk way. the we a to the financial I But very as we're uncovered those couple make made us our golfer that just have excited invest digital I us to business. compels spends our investments, across in across opportunities years all allows when the golf as spend about about. what -- with really year. opportunities really and last very our industry and we're the So evolved talking has of half position that's point accelerated do that prepared to industry do from for to connection to as certainly A&P, us favorable under in

George Kelly

Okay.

then And relates sheet. your next Okay. question to balance

your to I over -- just position. want with getting seen priorities impact out if it the two, balance that over view to a -- ability strengthening position just stronger that that cash that your utilize net shareholders balance much you I like how have power, you looking all next to sheet And an So years a XX three can just to changed I guess? months the your I'm all. more And us year you've sound cash or lot. you'll will didn't at sheet you last It in cash if whole curious have return flow want tell how if just curious

David Maher

Yes.

right. You're

point capital this dividends in at changed. priorities business. and the Your still We're We're focused investing allocation on haven't share repurchases. still

generation we're But of of at realm to reinitiated still our have the ability strong in share the comes capital it do taking more consider future. that have We the do and market this We quarter-by-quarter. kind anticipate allocation program. we repurchase as within certainly and progresses uncertainty time over foreseeable things we're fruition there's some cash we'll point flow if And the to -- that.

George Kelly

Okay.

from in permanent. this out shake increase you your and now? shifts to then talk going is model about -- that, and assuming this fair cetera, investments XX,XXX shift $XX share last are that year. you're new kind et what just assumption per is a could seeing question. these how you're some business you it question do gameplay your But of that that of golfers of me. operating if building some you're -- And maybe with for this of And is And of is Okay. million today, This think so more a a year it expanding some

Tom Pacheco

Well, we George talked little something is on we've and a last the bit -- often. your call. And about question this about think

and we around that strong recovery. world. played it half the are look million XXXX. year that quarter of there in U.S. I point. what's at As the We with new game entered That's think right, about a shutdown X.X maybe last call a out made really number, players the the then in

play the And went game period into come is out So stronger. comes around acceleration to moment a COVID. is the the going very the COVID difficult it last carefully, responding industry And of about and net hey of last our be the the of going And changed against stronger, that But it's be events. it business, rates hey, XX-plus built out will of in of that. historic rounds and than was from because standpoint. had months. half tough to But it's year maybe game game the comp when say we talked obvious it we straight-line second to of it saw not. reality a this We to we're in

our to So months us. ago, investments announcing a see our we investments are few whether it's opportunity we strategic the now. the Those announced capital responses before whether it's we're

George Kelly

for Okay. And question year. for CapEx me, Great. just expectations the last

Tom Pacheco

Yeah.

for continue we And the $XX to full to million be the on We forecast We to million continue $XX million for $X $XX $XX to QX. year. in did track million about million.

George Kelly

you. Thank Okay.

Tom Pacheco

welcome. You're

Sondra Lennon

you, George. Thank

David Maher

everybody. thanks And thanks. George

much. And so QX. interest always, to calls. Thanks and really great your catching up, a Have As time forward we appreciate look after on spring. these

Operator

today's conference This concludes call.

You may now disconnect.

Acushnet (GOLF) 8 May 212021 Q1 Earnings call transcript