Acushnet Holdings Corp. — 2021 Form 10-K
Reporting period: Fiscal year ended December 31, 2021. This is an annual filing, not a standalone fourth-quarter report; the filing text does not provide a clear value for separate Q4 revenue or earnings. Acushnet sells golf equipment and apparel, primarily under Titleist and FootJoy, through four reportable segments.
Financial performance
| Metric | 2021 | 2020 | Change |
|---|---|---|---|
| Net sales | $2,147.9 million | $1,612.2 million | +33.2%; +30.6% at constant currency |
| Gross profit / margin | $1,118.4 million / 52.1% | $829.8 million / 51.5% | Margin +0.6 percentage points |
| Income from operations | $259.8 million | $145.5 million | +$114.4 million |
| Net income attributable to Acushnet | $178.9 million | $96.0 million | +$82.9 million |
| Diluted EPS | $2.38 | $1.28 | +$1.10 |
| Adjusted EBITDA / margin | $328.3 million / 15.3% | $233.2 million / 14.5% | Margin +0.8 percentage points |
| Cash provided by operations | $314.1 million | $264.4 million | +$49.7 million |
Net sales rose across all segments and regions, supported by higher golf participation and product demand, new Pro V1/Pro V1x launches, and comparison with 2020 shutdowns. Higher average selling prices and favorable product mix helped gross margin; higher inbound freight costs were a partial offset. SG&A increased $184.8 million, reflecting the lower 2020 expense base and increased selling, marketing, and support spending in 2021.
Income tax expense was $63.6 million, with a 25.7% effective rate, versus $13.0 million and 11.5% in 2020. The comparison reflects 2020 tax benefits and differences in geographic earnings mix. Interest expense fell to $7.7 million from $15.6 million.
Segment results
| Segment | 2021 sales | Sales change | 2021 operating income | Operating income change |
|---|---|---|---|---|
| Titleist golf balls | $667.6 million | +31.5% | $106.2 million | +47.9% |
| Titleist golf clubs | $551.5 million | +31.8% | $75.4 million | +88.5% |
| Titleist golf gear | $192.6 million | +28.9% | $14.7 million | −26.5% |
| FootJoy golf wear | $580.6 million | +39.8% | $44.2 million | +141.5% |
Titleist golf gear was the exception to broad operating-income growth: higher operating expenses and freight costs more than offset increased gross profit. Sales outside the United States were $1,022.9 million, about 48% of total sales.
Cash, debt and capital allocation
- Year-end cash, cash equivalents and restricted cash were $281.7 million; unrestricted cash was $279.8 million.
- Reported indebtedness was approximately $316.2 million. The term loan principal was $315.0 million, with $17.5 million due in 2022 and maturity in 2024. The term loan rate was 1.10% at year-end; borrowings are substantially variable-rate.
- Available borrowing capacity was $386.2 million under the revolving facility after letters of credit, plus $51.0 million under local facilities. The company reported covenant compliance.
- Operating cash flow was $314.1 million; capital expenditures were $37.6 million. Inventory increased by $64.2 million during the year.
- Dividends paid were $49.2 million. The company repurchased $65.5 million of shares in 2021 and had $98.2 million remaining under its authorization at year-end, including a $37.5 million agreement with controlling shareholder Magnus.
Outlook, risks and unusual items
- Management expected 2022 capital expenditures of approximately $60 million and said cash, operating cash flow and available facilities should cover liquidity needs for at least 12 months, subject to pandemic and business risks. No specific 2022 revenue or earnings guidance is provided in the filing text.
- Supply-chain constraints and raw-material/component shortages reduced fourth-quarter 2021 sales volumes across segments and hurt gross profit; management expected these pressures, along with higher freight costs, to continue in 2022. Golf ball production was limited by shortages during 2021.
- Management cited elevated golf rounds and demand, but cautioned that participation and spending could normalize as pandemic restrictions ease. Weather, seasonality, product-launch timing, discretionary spending, foreign exchange, and competition could also affect results.
- Potential golf-equipment rule changes were under review by the governing bodies; outcomes and impacts were uncertain. The company also highlighted reliance on a limited number of suppliers and manufacturing locations, variable-rate debt, and international currency exposure.
- Other notable items: 2020 included a $3.8 million KJUS goodwill impairment, restructuring costs and COVID-related expenses; 2021 included $2.1 million of pension settlement costs within Adjusted EBITDA adjustments. Adjusted EBITDA is a non-GAAP measure.
- The company reported ordinary-course litigation but could not estimate aggregate potential losses and recorded no related liability. PwC issued unqualified opinions on the financial statements and internal control; management reported controls effective.
- Magnus, wholly owned by Fila, held approximately 51.7% of the common stock. Acushnet qualifies as a controlled company and may rely on NYSE governance exemptions.
Important facts for investors to verify
- Whether demand and elevated golf rounds persist, and how results compare once pandemic-related comparisons normalize.
- Whether shortages, freight expense and production constraints ease in 2022, and their effects on volumes, margins and inventory.
- Whether Titleist golf gear can recover operating income after its 2021 decline despite sales growth.
- How cash generation, capital spending, dividends and repurchases affect liquidity and debt reduction.
- Whether the effective tax rate, valuation allowance and expiring tax attributes materially affect future earnings or cash taxes.
- Potential effects of rule changes, foreign-exchange movements, variable interest rates, and the controlling shareholder’s influence.