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What changed in Acushnet Holdings Corp.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Acushnet Holdings Corp.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+580 added−585 removedSource: 10-K (2025-02-27) vs 10-K (2024-02-29)

Top changes in Acushnet Holdings Corp.'s 2024 10-K

580 paragraphs added · 585 removed · 472 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

107 edited+18 added−23 removed72 unchanged
Biggest changeWith an exclusive focus on golf, FootJoy shoes are designed, developed and manufactured for all golfers across multiple golf shoe categories, including modern classics, technical performance, casual and athletic. 7 Table of Contents The golf shoe category is one of the most demanding of all wearables, as golf shoes must perform in all weather conditions, including extreme temperature and moisture exposure; be resistant to pesticides and fungicides; withstand frequent usage and extensive rounds of play; and provide consistent comfort, support and protection to the golfer in an average of over five miles in a walked round.
Biggest changeGolf shoes must perform in all weather conditions, including extreme temperature and moisture exposure, be resistant to pesticides and fungicides, withstand frequent usage and extensive rounds of play, and provide consistent comfort, support and protection to the golfer for over five miles in 6 Table of Contents an average walked round.
Our Growth Strategies We plan to continue to pursue organic growth initiatives across all product categories, brands, geographies and marketing channels. Introduce New Products and Extend Market Share Leadership in Equipment Categories. We expect to sustain our strong performance in our core categories of golf balls, golf clubs and golf shoes through several targeted strategies: • Titleist Golf Balls .
Our Growth Strategies We plan to continue to pursue organic growth initiatives across all product categories, brands, geographies and marketing channels. Introduce New Products and Extend Market Share Leadership in Core Categories. We expect to sustain our strong performance in our core categories of golf balls, golf clubs and golf shoes through several targeted strategies: • Titleist Golf Balls .
We also evaluate acquisition opportunities that generally feature premium performance products that appeal to the dedicated golfer and can benefit from our global distribution and supply chain capabilities. We expect to continue to drive growth across these categories by employing the following initiatives: • Titleist Golf Gear .
We also evaluate acquisition opportunities that generally feature premium performance products that appeal to the dedicated golfer and can benefit from our global distribution and supply chain capabilities. We expect to continue to drive growth across these categories by employing the following initiatives: • Golf Gear .
Financial information for our segments, including sales by geographic area, is included in “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” Item 7 of Part II, included elsewhere in this report and in “Notes to Consolidated Financial Statements – Note 21 – Segment Information,” Item 8 of Part II, included elsewhere in this report.
Financial information for our segments, including sales by geographic area, is included in “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” Item 7 of Part II to this report and in “Notes to Consolidated Financial Statements – Note 21 – Segment Information,” Item 8 of Part II to this report.
(at the time known as Alexandria Holdings Corp.), an entity owned by Fila Holdings Corp. (“Fila”) and certain financial investors, acquired Acushnet Company from Beam. We completed an initial public offering of our common stock in November 2016.
(at the time known as Alexandria Holdings Corp.), an entity owned by Fila Holdings Corp. and certain financial investors, acquired Acushnet Company from Beam. We completed an initial public offering of our common stock in November 2016.
FootJoy is the leader in sales for all sub‑categories of the glove business, including leather construction, synthetic, leather/synthetic combinations and all specialty gloves, including rain and winter specific offerings. FootJoy Outerwear and Apparel FootJoy is also a leader in the golf outerwear and men's and women's golf apparel markets.
FootJoy is the leader in sales for all sub‑categories of the glove business, including leather construction, synthetic, leather/synthetic combinations and all specialty gloves, including rain and winter specific offerings. FootJoy Outerwear and Apparel FootJoy is a leader in the golf outerwear and men’s and women’s golf apparel markets.
In other countries in which we sell our products, we rely on select distributors in order to deepen our reach into those markets. Each country administers its own in‑country channel of distribution strategy given the unique characteristics of each market.
In other countries in which we sell our products, we rely on select distributors to deepen our reach into those markets. Given the unique characteristics of each market, each country administers its own in‑country channel of distribution strategy.
As a result, we have built an industry leading platform across all performance product categories, driving a market‑differentiating mix of consumable products, which we consider to be golf balls and golf gloves, which collectively represented nearly 40% of our net sales in 2023, and more durable products, which we consider to be golf clubs, golf shoes, golf apparel and golf gear, which collectively represented over 60% of our net sales in 2023.
As a result, we have built an industry leading platform across all performance product categories, driving a market‑differentiating mix of consumable products, which we consider to be golf balls and golf gloves, which collectively represented nearly 40% of our net sales in 2024, and more durable products, which we consider to be golf clubs, golf shoes, golf apparel and golf gear, which collectively represented over 60% of our net sales in 2024.
We continue to invest in design and innovation to bring golf-specific performance advancements to the footwear category. We launched several new models in 2023, and we plan to continue to enrich our consumer connection initiatives with digital content, product trial and fit experiences in key global markets. Increase Penetration in Golf Gear and Wear Categories.
We continue to invest in design and innovation to bring golf-specific performance advancements to the footwear category. We launched several new models in 2024, and we plan to continue to enrich our consumer connection initiatives with digital content, product trial and fit experiences in key global markets. Increase Penetration in Golf Gear and Wear Categories.
Hence, golf shoes require extensive knowledge and expertise in foot morphology, walking and swing biomechanics, material science and application and sophisticated manufacturing and construction techniques. Golf shoes are also a style and fashion driven category. FootJoy offers a large assortment of styles to suit the needs and tastes of all golfers.
Golf shoes therefore require extensive knowledge and expertise in foot morphology, walking and swing biomechanics, material science and application, and sophisticated manufacturing and construction techniques. Golf shoes are also a style and fashion driven category. FootJoy offers a large assortment of styles to suit the needs and tastes of all golfers.
We protect our trademarks by obtaining registrations where appropriate and opposing or cancelling material infringements. We also have rights in several common law marks. Competition There are unique aspects to the competitive dynamic in each of our product categories. The golf ball business is highly competitive.
We protect our trademarks by obtaining registrations where appropriate and opposing or cancelling material infringements. We also have rights in several common law marks. Competition There are unique aspects to the competitive dynamic in each of our product categories. The golf equipment business is highly competitive.
Our fourth‑quarter sales are generally less than the other quarters due to the end of the golf season in many of our key markets, but can also be affected by key product launches, particularly golf clubs.
Our fourth‑quarter sales are generally lower than other quarters due to the end of the golf season in many of our key markets, but can also be affected by key product launches, particularly golf clubs.
As a result, we are able to manage our product transitions and inventory from one generation to the next more efficiently and effectively, both internally and with our trade partners. Product introductions generally stimulate net sales as the golf retail channel takes on inventory of new products. Reorders of these new products then depend on the rate of sell‑through.
As a result, we can manage our product transitions and inventory from one generation to the next more efficiently and effectively, both internally and with our trade partners. Product introductions generally stimulate net sales as the golf retail channel takes on inventory of new products. Reorders of these new products then depend on the rate of sell‑through.
In addition to our seasonal apparel collections, we plan to launch new outerwear products to meet the performance expectations of the most demanding players and "make every day playable." We plan to continue to work with select players on the worldwide professional golf tours who trust the FootJoy brand to perform at the highest levels. • Titleist Apparel.
In addition to our seasonal apparel collections, we plan to launch new outerwear products to meet the performance expectations of the most demanding players and “make every day playable.” We plan to continue to work with select players on the worldwide professional golf tours who trust the FootJoy brand to perform at the highest levels. • Titleist Apparel.
On December 6, 2023, the Governing Bodies issued a Notice proposing to modify the Rules of Golf conformance testing process for drivers, which may result in an enhanced testing protocol for drivers (the “Driver Notice”). The Driver Notice also states that the Governing Bodies will continue to explore possible options related to distance and the driver.
On December 6, 2023, the Governing Bodies issued a Notice proposing to modify the Rules of Golf conformance testing process for drivers, which may result in an enhanced testing protocol for drivers (the “Driver Notice”). The Driver Notice also states that the Governing Bodies will 11 Table of Contents continue to explore possible options related to distance and the driver.
See “Notes to Consolidated Financial Statements – Note 2 – Summary of Significant Accounting Policies – Variable Interest Entities,” Item 8 of Part II included elsewhere in this report, for a discussion of our FootJoy golf shoe joint venture and the material terms of the agreement which governs such joint venture arrangement.
See “Notes to Consolidated Financial Statements – Note 2 – Summary of Significant Accounting Policies – Variable Interest Entities,” Item 8 of Part II to this report, for a discussion of our FootJoy golf shoe joint venture and the material terms of the agreement which governs such joint venture arrangement.
Our sales and distribution takes a “category management” approach that encompasses all aspects of customer service and fulfillment, including product selection; space and display planning; sales staff training; and inventory control and replenishment.
Our sales and distribution follows a “category management” approach that encompasses all aspects of customer service and fulfillment, including product selection, space and display planning, sales staff training and inventory control and replenishment.
Product Launch Cycles We maintain differentiated and disciplined product launch cycles across our portfolio, which we believe has contributed to stable and resilient growth over the long‑run. This approach gives our R&D teams a period of time we believe is necessary to develop superior performing products versus prior generation models.
Product Launch Cycles We maintain differentiated and disciplined product launch cycles across our portfolio, which we believe has contributed to stable and resilient growth over the long run. This approach gives our R&D teams the time we believe is necessary to develop superior performing products versus prior generation models.
See “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Key Factors Affecting our Results of Operations – Product Life Cycles,” Item 7 of Part II to this report, for further information surrounding our product launch cycles. 8 Table of Contents Manufacturing Our manufacturing processes and management of supply chain operations ensure consistency of product performance and quality.
See “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Key Factors Affecting our Results of Operations – Product Life Cycles,” Item 7 of Part II to this report, for further information surrounding our product launch cycles. Manufacturing Our manufacturing processes and management of supply chain operations ensure consistency of product performance and quality.
Titleist Golf Balls Titleist is the #1 ball in golf. The Titleist golf ball was founded with the purpose of designing and manufacturing a golf ball that was performance superior and quality superior to all other balls available in the market.
The Titleist golf ball was founded with the purpose of designing and manufacturing a golf ball that was performance superior and quality superior to all other balls available in the market.
Today, we are the steward of two of the most revered brands in golf—Titleist, one of golf’s leading performance equipment brands, and FootJoy, one of golf’s leading performance wearable brands. Titleist has been the #1 ball in professional golf for over 75 years and FootJoy has been the #1 shoe on the PGA Tour for over seven decades.
Today, we are the steward of two of the most revered brands in golf—Titleist, one of golf’s leading performance equipment brands, and FootJoy, one of golf’s leading performance wearable brands. Titleist has been the #1 ball in professional golf for over 75 years and FootJoy has been the #1 shoe on the PGA Tour for nearly eight decades.
See “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” Item 7 of Part II, included elsewhere in this report, for a reconciliation of Adjusted EBITDA to net income attributable to Acushnet Holdings Corp., the most directly comparable GAAP financial measure.
See “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” Item 7 of Part II to this report, for a reconciliation of Adjusted EBITDA to net income attributable to Acushnet Holdings Corp., the most directly comparable GAAP financial measure.
The Rules of Golf as published by the Governing Bodies are virtually the same and are intended to be so pursuant to a Joint Statement of Principles issued in 2001. 11 Table of Contents The Rules of Golf set testing standards and establish limitations for the design and performance of golf balls and golf clubs.
The Rules of Golf as published by the Governing Bodies are virtually the same and are intended to be so pursuant to a Joint Statement of Principles issued in 2001. The Rules of Golf set testing standards and establish limitations for the design and performance of golf balls and golf clubs.
Scotty Cameron encourages a selection process that identifies the putter length, toe flow and appearance to deliver proper balance, shaft flex and feel to golfers and to encourage proper technique. Scotty Cameron putters consist of a range of products for each of these key selection criteria.
Scotty Cameron encourages a selection process that identifies the putter length, toe flow and appearance to deliver proper balance, shaft flex and feel to golfers and to encourage proper technique. Scotty Cameron offers a range of putters for each of these key selection criteria.
Local leaders around the world are empowered to determine the best flexibility approach for their geography based on the type of work and culture they lead .
Local leaders around the world are empowered to determine the best flexibility approach for their geography based on the type of work and local culture.
Further, we also believe that the percentage of women golfers will continue to grow, as a higher percentage of new golfers in recent years have been women.
We believe that the percentage of women golfers will continue to grow, as a higher percentage of new golfers in recent years have been women.
Dedicated golfers are largely older millennials, gen‑xers and baby boomers who have demonstrated the propensity to pay a premium for products that help them perform better. We believe dedicated golfers, who comprise our target market, will continue to be a key driver for the global golf industry. Weather Conditions.
Dedicated golfers are largely millennials, gen x-ers and baby boomers who have demonstrated the propensity to pay a premium for products that help them perform better. We believe dedicated golfers, who comprise our target market, will continue to be a key driver for the global golf industry. Weather Conditions.
We also intend to continue to develop and offer limited edition products to showcase advanced technologies and we intend to continue to dedicate the resources necessary to ensure that Titleist drivers, fairways, hybrids and irons, Vokey Design wedges and Scotty Cameron putters remain golf's leaders in performance, technology, craftsmanship and selection. • FootJoy Footwear .
We also intend to continue to develop and offer limited edition products to showcase advanced technologies and to dedicate the resources necessary to ensure that Titleist drivers, fairways, hybrids and irons, Vokey Design wedges and Scotty Cameron putters remain golf’s leaders in performance, technology, craftsmanship and selection. 3 Table of Contents • FootJoy Footwear .
Our Position In response to this active regulatory dynamic, our senior management and R&D teams spend significant time and effort in developing and maintaining relationships with the Governing Bodies and we are an active participant with them and other stakeholders in discussions regarding potential new rules and the rule making process.
Our Position In response to this active regulatory dynamic, our senior management and R&D teams spend significant time and effort to develop and maintain relationships with the Governing Bodies, and we are an active participant with them and other stakeholders in discussions regarding potential new rules and the rule making process.
We continue to hire local talent across all functions in order to better position Titleist and FootJoy products in those markets where participation and popularity of the sport are expected to increase. 4 Table of Contents Our Products We design, manufacture and market a broad range of products under the Titleist, FootJoy and KJUS brands.
We continue to hire local talent across all functions in order to better position our products in those markets where participation and popularity of the sport are expected to increase. Our Products We design, manufacture and market a broad range of products under the Titleist, FootJoy, KJUS and other brands.
As a result, we have strong patent positions across our product categories and innovation spaces in which we operate, and have become the leader in obtaining golf ball and golf club patents worldwide. In addition, we believe we have more 10 Table of Contents combined golf shoe and golf glove utility patents than all competitors combined.
As a result, we have strong patent positions across our product categories and innovation spaces in which we operate, and have become the leader in obtaining golf ball and golf club patents worldwide. In addition, we believe we have more combined golf shoe and golf glove utility patents than all competitors combined.
The eCommerce initiative is expected to yield incremental sales and profitability and enriched data on golfers' preferences and trends, as well as to foster a deeper and more real time connection with dedicated golfers.
The eCommerce initiative is expected to yield incremental sales and profitability and enriched data on golfers’ preferences and trends, as well as to foster deeper and more real-time connections with dedicated golfers.
Our golf club team employs the primary materials of steel, titanium and aluminum and has six custom manufacturing locations around the globe, with each being responsible for supply chain execution, allowing each region to respond to market specific needs or trends.
Our golf club team employs the primary materials of steel, 9 Table of Contents titanium and aluminum and has six custom manufacturing locations around the globe, with each responsible for supply chain execution, allowing each region to respond to market specific needs or trends.
Innovation Leadership We believe innovation is critical to dedicated golfers, as they depend on the ability of new and innovative products to drive improved performance. We currently employ a research and development ("R&D") team of approximately 200 scientists, chemists, engineers and technicians.
Innovation Leadership We believe innovation is critical to dedicated golfers, as they depend on the ability of new and innovative products to drive improved performance. We currently employ a research and development (“R&D”) team of approximately 200 scientists, chemists, engineers and technicians.
The highly cultivated and long-standing associate experience at Acushnet remains a competitive advantage driving our performance as the leader in performance products in the golf industry. 13 Table of Contents
The highly cultivated and long-standing associate experience at Acushnet remains a competitive advantage driving our success as the leader in performance products in the golf industry. 12 Table of Contents
We also offer custom imprinting for country clubs, tournaments, corporate logos and personalization. 3 Table of Contents • Titleist Clubs, Wedges and Putters . We intend to continue to launch innovative, high performance golf clubs by further leveraging Titleist R&D excellence in all club categories.
We also offer custom imprinting for country clubs, tournaments, corporate logos and personalization. • Titleist Clubs, Wedges and Putters . We intend to continue to launch innovative, high performance golf clubs by further leveraging Titleist R&D excellence in all club categories.
This seasonality affects sales in each of our reportable segments differently. In general, however, because of this seasonality, a larger portion of our sales and profitability generally occurs during the first half of the year.
This seasonality affects sales in each of our reportable segments differently. In general, however, due to seasonality, a larger portion of our sales and profitability generally occurs during the first half of the year.
We are committed to continuous improvement and each R&D team is tasked with developing technology that will deliver better quality and performance products in each generation. For the years ended December 31, 2023, 2022 and 2021 we invested $64.8 million, $56.4 million and $55.3 million, respectively, in R&D.
We are committed to continuous improvement, and each R&D team is tasked with developing technology that will deliver better quality and performance products in each generation. For the years ended December 31, 2024, 2023 and 2022, we invested $67.8 million, $64.8 million and $56.4 million, respectively, in R&D.
Golf equipment, including clubs, shoes, balls and accessories, is recreational in nature and is therefore a discretionary purchase for consumers. Consumers are generally more willing to make discretionary purchases of golf products when economic conditions are favorable and when consumers are feeling confident and prosperous.
Golf products, including clubs, shoes, balls and accessories, are recreational in nature and are therefore discretionary purchases for consumers. Consumers are generally more willing to make discretionary purchases of golf products when economic conditions are favorable and when consumers are feeling confident and prosperous.
As a leader in performance and product quality, we drive high performance standards and excellence, including by continually developing and encouraging our associates to challenge the status quo, and rewarding them with competitive compensation and benefits packages.
As a leader in performance and product quality, we drive standards of performance and excellence by continually developing and encouraging our associates to challenge the status quo while rewarding them with competitive compensation and benefits packages.
The breadth and scope of the FootJoy product line is commensurate with its leading sales position. To maintain and grow this leadership position in the category, new product launches and new styles comprise approximately 50% of its offerings each year in all significant markets around the world.
The breadth and scope of the FootJoy product line is commensurate with its leading sales position. To maintain and grow FootJoy’s leadership position in the category, new product launches and new styles comprise approximately 50% of our golf shoe offerings each year in all significant markets around the world.
We are committed to providing dedicated golfers with golf gear—including golf bags, headwear, gloves, travel gear and other accessories—of performance and quality excellence that is faithful to the Titleist brand promise. We continue to make investments in design and engineering resources and leverage dedicated player insights to drive product excellence in these product categories. • FootJoy Apparel .
We are committed to providing Titleist gear—including golf bags, headwear, gloves, travel gear and other accessories—of performance and quality excellence that is faithful to the Titleist brand promise. Titleist gear continues to make investments in design and engineering resources and to leverage dedicated player insights to drive product excellence in these product categories.
Approximately fifty-six percent (56%) of our associates are in manufacturing roles across our global manufacturing footprint and approximately fifty percent (50%) of our global associates are women. We strive to cultivate the skills, knowledge and experiences in our associates that enable Acushnet to continue its leadership in performance and product quality.
Approximately 55% of our associates are in manufacturing roles across our global manufacturing footprint and approximately 50% of our global associates are women. We strive to cultivate the skills, knowledge and experiences in our associates that enable Acushnet to continue its leadership in performance and product quality.
Strategically Pursue Global Growth. While our brands are global, we believe that near‑term growth will be primarily driven by more established golf markets, such as the United States, Japan, Korea and EMEA. However, less mature golf markets also represent longer‑term growth opportunities.
Strategically Pursue Global Growth. While our brands are global, we believe that near‑term growth will be primarily driven by more established golf markets, such as the United States, Japan, Korea and Europe, Middle East and Asia (“EMEA”). However, less mature golf markets also represent longer‑term growth opportunities.
Beyond the gen‑x and baby boomer generation, promising developments in golf include the generational shift with millennial golfers making their marks at both professional and amateur levels, and the increase in the number of juniors (ages 6-17) who play golf in recent years. Dedicated Golfers.
Beyond the gen x and baby boomer generations, promising developments in golf include the generational shift resulting from millennial and gen z golfers making their marks at both professional and amateur levels, and the increase in the number of juniors (ages 6-17) who play golf in recent years. Dedicated Golfers.
Andrews (the "R&A" and, together with the USGA, the "Governing Bodies"), because these rules are generally followed by golfers, both professional and amateur, within their respective jurisdictions. The USGA publishes rules that are generally followed in the United States and Mexico, and the R&A publishes rules that are generally followed in most other countries around the world.
Andrews (the “R&A” and, together with the USGA, the “Governing Bodies”), because these rules are generally followed by golfers, both professional and amateur, within their respective jurisdictions. The USGA publishes rules that are generally followed in the United States and Mexico, and the R&A publishes rules that are generally followed in most other countries around the world.
See "Risk Factors - We are subject to environmental, health and safety laws and regulations, which could subject us to liabilities, increase our costs or restrict our operations in the future." Regulation The Rules of Golf We seek to have our new golf ball and golf club products conform with the Rules of Golf published by the United States Golf Association (the "USGA") and The Royal and Ancient Golf Club of St.
See the risk factor in Item 1A entitled “ We are subject to environmental, health and safety laws and regulations, which could subject us to liabilities, increase our costs or restrict our operations in the future .” Regulation The Rules of Golf We seek to have our new golf ball and golf club products conform with the Rules of Golf published by the United States Golf Association (the “USGA”) and The Royal and Ancient Golf Club of St.
Titleist golf gear products are designed and engineered using premium materials, with a focus on delivering quality and performance excellence with function and style. We seek to provide and continually evolve our customization and personalization opportunities across the product portfolio of Titleist golf gear in order to meet the needs of the dedicated players.
All products are designed and engineered using premium materials, with a focus on delivering quality and performance excellence with function and style. We seek to provide and continually evolve our customization and personalization opportunities across our product portfolio to meet the needs of dedicated golfers.
In addition to its stock offerings, FootJoy is a leader in the customization of golf shoe styles and designs. FootJoy’s MyJoys custom golf shoe microsite provides individual choices for style, color, personal IDs and team logos that are produced to order for golfers around the world.
In addition to its stock offerings, FootJoy is a leader in the customization of golf shoe styles and designs. FootJoy’s MyJoys custom golf shoe microsite offers individual choices for style, color, personal IDs and team logos on made-to-order products for golfers around the world.
Titleist Golf Bags Titleist Golf Bags have an array of models across price points with designs ranging from those to be carried to those designed for golf carts, each with an array of functional differences and a variety of materials and colors.
We offer a range of Titleist golf bag models across price points with designs ranging from those to be carried to those designed for golf carts, each with an array of functional differences and a variety of materials and colors. • Golf Headwear .
KJUS designs premium technical golf, ski and lifestyle apparel with distinctive, clean designs. KJUS entered the golf outerwear and apparel markets less than a decade ago with a focus on freedom of movement, temperature regulation and all-weather protection to enhance performance.
KJUS designs premium technical golf, ski and lifestyle apparel with distinctive, clean designs. KJUS entered the golf outerwear and apparel markets less than a decade ago with a focus on freedom of movement, temperature regulation and all-weather protection to enhance performance. We intend to continue to invest in design and innovation to deliver advancements in KJUS outerwear and apparel.
In total, we offer 25 unique loft, sole grind and bounce combinations and four unique finishes to create golf’s most complete wedge product performance range. In addition, Vokey’s online Wedgeworks program promotes limited edition models and allows golfers to customize and personalize their wedges.
In total, we offer 27 unique loft, sole grind and bounce combinations and four unique finishes to create golf’s most complete wedge product performance range. In addition, Vokey’s online Wedgeworks program promotes limited edition models and allows golfers to customize and personalize their wedges. Vokey Design wedges are the most played wedges by tour professionals.
Acushnet aspires to be a high achieving workforce by providing a workplace that inspires connection, innovation and excellence in performance. As a result, we utilize a hybrid flexibility model, designed to balance the needs of the role with the flexibility associates desire.
Acushnet aspires to be a high achieving workforce by providing a workplace that inspires connection, innovation and excellence in performance. As a result, we utilize a hybrid flexibility model, grounded in the needs of the business and the work of each role, while offering the flexibility associates desire.
We believe the golf gear business represents a sizable and highly fragmented opportunity with numerous competitors in each product category and geographical market. Net sales of Titleist golf gear for the years ended December 31, 2023, 2022 and 2021 were $216.2 million, $204.9 million and $192.6 million, respectively, in each case representing approximately 9% of our total net sales.
We believe the golf gear business represents a sizable and highly fragmented opportunity with numerous competitors in each product category and geographical market. Net sales of Golf gear for the years ended December 31, 2024, 2023 and 2022 were $232.1 million, $222.6 million and $211.9 million, respectively, representing approximately 9% of our total net sales in 2024.
As of December 31, 2023, we employed approximately 7,300 associates worldwide. Reflecting our truly global organization, approximately 3,100 of our associates are located in the Americas, over 600 are located in EMEA and approximately 3,500 are located in Asia Pacific.
As of December 31, 2024, we employed approximately 7,300 associates worldwide. Reflecting our truly global organization, approximately 3,400 of our associates are located in the Americas, over 700 are located in EMEA and approximately 3,200 are located in Asia Pacific.
These brands are recognized as industry leaders in performance, quality, innovation and design. Our products include golf balls, golf clubs, wedges and putters, golf shoes, golf gloves, golf gear and golf and ski outerwear and apparel. Titleist We design, manufacture and sell golf balls, golf clubs, wedges and putters and golf gear under the Titleist brand.
These brands are recognized as industry leaders in performance, quality, innovation and design. Our products include golf balls, golf clubs, wedges and putters, golf shoes, golf gloves, golf gear and golf and ski outerwear and apparel. Titleist Golf Equipment We design, manufacture and sell a full line of performance-driven golf equipment under the Titleist, Vokey Design and Scotty Cameron brands.
In its first four months, the Pro V1 golf ball became the best-selling golf ball and holds that position to this day. In 2003, the first Pro V1x golf ball was brought to market and with its four-piece, dual core design, produced higher launch characteristics and a different spin profile than Pro V1.
In 2003, the first Pro V1x golf ball was brought to market, and with its four-piece, dual core design, produced higher launch characteristics and a different spin profile than the three-piece, solid core Pro V1.
We believe it is the largest choice offering in the golf shoe category and provides a service and personal expression capability that creates brand loyalty and repeat purchases. FootJoy Gloves FootJoy is the #1 glove in golf.
We believe this provides the largest offering of choices within the golf shoe category, along with service levels and personal expression capability that creates brand loyalty and repeat purchases. FootJoy Gloves FootJoy is the #1 glove in golf.
The majority of our FootJoy golf shoes are manufactured in a 525,000 square foot facility in Fuzhou, China, owned by a joint venture in which we have a 40% interest with the remaining 60% owned by our long‑standing Taiwan supply partners.
Until 2024, the majority of our FootJoy footwear was manufactured in a facility in Fuzhou, China, owned by a joint venture in which we have a 40% interest, with the remaining 60% owned by our long‑standing Taiwan-based supply partners.
We employ approximately 400 sales representatives worldwide, who are compensated through a combination of salary and a performance bonus, and in some instances, commissions. We currently service over 27,000 direct accounts worldwide.
We employ approximately 450 sales representatives worldwide, who are compensated through a combination of salary and a performance bonus, and in some instances, commissions. We currently service over 27,000 direct accounts worldwide. In both our direct sales and distributor markets, our trade partners are subject to our redistribution policy.
We own or control the design, sourcing, manufacturing, packaging and distribution of the majority of our products. In doing so, we are able to exercise control over every step of the manufacturing process and supply chain operations, thereby setting the standard for quality and consistency.
We own or control the design, sourcing, manufacturing, packaging and distribution of the majority of our products. In doing so, we can exercise control over every step of the manufacturing process and supply chain operations, thereby setting the standard for quality and consistency. We have developed and refined distinct and independently managed supply chains for each of our product categories.
Titleist, FootJoy, KJUS, Links & Kings and PG Golf have established eCommerce websites accessible around the globe and we plan to further expand eCommerce initiatives in the coming years.
Supplementing our core field sales partnerships are Internet‑based initiatives and eCommerce websites. Titleist, FootJoy, KJUS, Links & Kings, Club Glove and PG Golf have established eCommerce websites accessible around the globe, and we plan to further expand eCommerce initiatives in the coming years.
We own or license a large portfolio of trademarks, including for Titleist, Pro V1, Pro V1x, AVX, Pinnacle, AP1, AP2, TSR, T Series, CNCPT, Vokey Design, Scotty Cameron, the Circle T Design, FootJoy, FJ, DryJoys, HyperFlex, StaSof, ProDry, MyJoys, MyTPI, TPI, Titleist Performance Institute, Club Glove and KJUS.
We own or license a large portfolio of trademarks, including, but not limited to, Titleist, Pro V1, Pro V1x, ProV1x Left Dash, AVX, Pinnacle, GT, TSR, T Series, CNCPT, Vokey Design, Scotty Cameron, Studio Style, Phantom, the Circle T Design, Scotty Dog logo, FootJoy, FJ, DryJoys, HyperFlex, StaSof, ProDry, MyJoys, MyTPI, TPI, Titleist Performance Institute, Links & Kings, Linkslegend, Club Glove and KJUS.
Golf is a recreational activity that requires time and money. The golf industry has been principally driven by the age cohort of 30 years and above, primarily “gen‑xers,” “baby boomers” and, increasingly, "millennials" who have the time and money to engage in the sport.
The golf industry has been principally driven by the age cohort of 30 years and above, primarily “gen x-ers,” “baby boomers,” “millennials” and, increasingly, “gen z” who have the time and money to engage in the sport.
We believe the golf ball is the most important piece of equipment in the game, as it is the only piece of equipment used by every player for each shot in the round. The golf ball category also generates the largest portion of our sales and profits.
We believe the golf ball is the 4 Table of Contents most important piece of equipment in the game, as it is the only piece of equipment used by every player for each shot in the round.
On October 12, 2021, the Governing Bodies announced that a new Model Local Rule would be available beginning on January 1, 2022 to provide those running professional or elite amateur golf competitions the option of limiting the maximum length of a golf club (excluding putters) to 46 inches.
On January 1, 2022, the Governing Bodies adopted a Model Local Rule that allows those running professional or elite amateur golf competitions to limit the maximum length of a golf club (excluding putters) to 46 inches.
We have over 850 active U.S. utility patents in golf balls, over 500 active U.S. utility patents in golf clubs, wedges and putters and over 425 worldwide patents in golf shoes and gloves. In 2023, we filed nearly 250 U.S. patent applications and nearly 400 worldwide.
We have over 830 active U.S. utility patents in golf balls, nearly 750 active U.S. patents in golf clubs, wedges and putters and over 180 U.S. patents in golf shoes and gloves. In 2024, we filed more than 270 U.S. patent applications and over 425 worldwide.
Complementing Pro V1 and Pro V1x is another high performance golf ball, Pro V1x Left Dash. Introduced in 2019, Pro V1x Left Dash meets the performance needs of a select group of players seeking high flight with even lower long game spin than both Pro V1 and Pro V1x.
Pro V1x has a fast, high flight and delivers spin where and when a golfer wants it. Complementing Pro V1 and Pro V1x is Pro V1x Left Dash, which meets the performance needs of a select group of players seeking high flight with even lower long game spin than both Pro V1 and Pro V1x.
For the year ended December 31, 2023, we recorded net sales of $2,382.0 million, net income attributable to Acushnet Holdings Corp. of $198.4 million and Adjusted EBITDA of $376.1 million.
For the year ended December 31, 2024, we recorded net sales of $2,457.1 million, net income attributable to Acushnet Holdings Corp. of $214.3 million and Adjusted EBITDA (as defined below) of $404.4 million.
To retain talent and recruit new associates, we utilize a dual approach, leveraging a long-standing “build-from-within” talent development model coupled with recruiting top talent from the external market.
To retain talent and recruit new associates, we utilize a dual approach, leveraging a long-standing “build-from-within” talent development model coupled with recruiting top talent from the external market in partnership with universities, community organizations and professional groups. We conduct annual talent reviews focused on performance, potential and succession.
FootJoy’s goal for outerwear is to “make every day playable” and extend the golf season by providing products for rain, wind and cold conditions. FootJoy entered the outerwear category in 1996 with innovative designs and materials, became the leader in net sales in the United States by 2005 and still holds this position today.
FootJoy’s goal for outerwear is to “make every day playable” and extend the golf season by providing products for rain, wind and cold conditions. FootJoy has been the leader in net sales of golf outerwear in the United States since 2005.
Managers share open feedback and work closely with associates to create individual, experiential development plans balancing deep functional expertise with broad leadership capabilities. Essential to our recruitment and retention of top talent is our commitment to ensuring we benefit from a workplace built on our core values, including diversity, inclusion, belonging and respect.
Managers share open feedback and work closely with associates to create individual, experience-based development plans balancing deep functional expertise with broad leadership capabilities. Essential to our recruitment and retention of top talent is our commitment to creating a collaborative and inclusive workplace.
It also helps to support the thousands of golf shops that choose to exclusively stock Titleist and Pinnacle golf balls and offer golf balls in each market segment to their golfers. We are also a leader in custom imprinted golf balls.
Competing in the price segment, the Pinnacle brand allows the Titleist brand to focus on the premium performance and performance segments of the market. It also helps to support the thousands of golf shops that choose to exclusively stock Titleist and Pinnacle golf balls and offer golf balls in each market segment to their golfers.
Titleist golf clubs, Vokey Design wedges and Scotty Cameron putters are widely used by professional and competitive amateur players, which validates the products’ performance and quality excellence. We are also committed to a leading club fitting and trial platform to maximize dedicated golfers’ performance experience.
Titleist golf clubs, Vokey Design wedges and Scotty Cameron putters are widely used by both professional and competitive amateur players, which validates the products’ performance and quality excellence.
Pro V1 offers the greatest combination of speed, spin and feel in the game and is the best fit for the majority of golfers. Pro V1 flies lower than Pro V1x with a more penetrating trajectory and has a softer feel. Pro V1x has a fast, high flight and delivers spin where and when a golfer wants it.
All of this is accomplished for both models while maintaining their differences in flight, spin and feel. Pro V1 offers the greatest combination of speed, spin and feel in the game and is the best fit for most golfers. Pro V1 flies lower than Pro V1x with a more penetrating trajectory and has a softer feel.
The 2024 AVX features improved high gradient core chemistry, a new high flex casing layer, and a thicker, softer, urethane cover. Tour Soft features our largest two piece ionomer core, reformulated for more speed and scoring shot performance. Tour Soft is available in white, yellow and gloss green colors.
AVX complements the Pro V1 family, offering a lower flight, lower spin option with even softer feel. The 2024 AVX features improved high gradient core chemistry, a high flex casing layer and a thicker, softer, urethane cover. The 2024 Tour Soft features our largest two-piece ionomer core, reformulated for more speed and scoring shot performance.
The design inspiration for the Scotty Cameron brand begins with studying the best players in the world and working with them to identify the consistent strengths and attributes of their putting.
Scotty Cameron Putters Scotty Cameron Fine Milled Putters are developed through a specialized and iterative process that blends art and science to create high performance putters. The design inspiration for the Scotty Cameron brand begins with studying the best players in the world and working with them to identify the consistent strengths and attributes of their putting.
We also operate the Scotty Cameron Gallery in Encinitas, California, a premium retail boutique which offers consumers the ability to experience our tour fitting process as well as purchase unique accessory items. Titleist Golf Gear Titleist Golf Gear is a matrix of distinct categories across golf bags, headwear, golf gloves, travel products and other golf accessories.
We also operate the Scotty Cameron Gallery in Encinitas, California, a premium retail boutique which offers consumers the ability to experience our tour fitting process as well as purchase unique accessory items. FootJoy FootJoy is one of golf’s leading performance wearable brands, which consists collectively of golf shoes, gloves, outerwear and apparel.
Our 620 MB and CB irons are classic, fully forged blade type irons largely preferred by highly skilled golfers. Vokey Design Wedges Bob Vokey and his team of design and fitting experts create high performance wedges to meet the demands of dedicated golfers and the best players in the world.
Vokey Design Wedges Bob Vokey and his team of design and fitting experts create high performance wedges to meet the demands of dedicated golfers and the best players in the world.
Titleist Golf Clubs, Wedges and Putters We design, assemble and sell golf clubs (drivers, fairways, hybrids and irons) under the Titleist brand, wedges under the Vokey Design brand and putters under the Scotty Cameron brand. The mission of our golf club business is to design and develop the best performing golf clubs in the world for dedicated golfers.
Golf Clubs, Wedges and Putters We design, assemble and sell golf clubs (drivers, fairways, hybrids and irons) under the Titleist brand, wedges under the Vokey Design brand and putters under the Scotty Cameron brand.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeRISK FACTORS Summary Risk Factors Below is a summary of some of the principal risks that could adversely affect our business, operations and financial results: Risks Related to Our Business and Industry • A reduction in the number of rounds of golf played or in the number of golf participants could materially adversely affect our business, financial condition and results of operations. • Unfavorable weather conditions may impact the number of playable days and rounds played in a given year. • Changes to the Rules of Golf with respect to equipment could materially adversely affect our business, financial condition and results of operations. • A significant disruption in the operations of our manufacturing, assembly or distribution facilities could materially adversely affect our business, financial condition and results of operations. • Many of our raw materials or components of our products are provided by a sole or limited number of third-party suppliers and manufacturers. • A disruption in the operations of our suppliers could materially adversely affect our business, financial condition and results of operations. • We may not successfully manage the frequent introduction of new products or satisfy changing consumer preferences, quality and regulatory standards. • Failure to successfully innovate and offer high-quality products may adversely affect our ability to compete in the market for our products. • We may be involved in lawsuits to protect, defend or enforce our intellectual property rights, which could be expensive, time consuming and unsuccessful. • Our products may infringe the intellectual property rights of others, which may cause us to incur unexpected costs or prevent us from selling our products. • We face intense competition in each of our markets and if we are unable to maintain a competitive advantage, loss of market share, sales or profitability may result. • A severe or prolonged economic downturn could adversely affect our customers' financial condition, their levels of business activity and their ability to pay trade obligations. • We depend on retailers and distributors to market and sell our products, and our failure to maintain and further develop our sales channels could materially adversely affect our business, financial condition and results of operations. • Our business operations are subject to seasonal fluctuations, which could result in fluctuations in our operating results and stock price. • Our business and results of operations are subject to fluctuations based on the timing of new product introductions. • We have significant international operations and are exposed to risks associated with doing business globally. • We rely on complex information systems for management of our manufacturing, distribution, sales and other functions.
Biggest changeRISK FACTORS Summary Risk Factors Below is a summary of some of the principal risks that could adversely affect our business, operations and financial results: Risks Related to Our Business and Industry • A reduction in the number of rounds of golf played or in the number of golf participants could materially adversely affect our business, financial condition and results of operations. • Unfavorable weather conditions may impact the number of playable days and rounds played in a given year. • Consumer spending habits and macroeconomic and demographic factors may affect the number of rounds of golf played, the number of golf participants and related spending on our products. • Changes to the Rules of Golf with respect to equipment could materially adversely affect our business, financial condition and results of operations. • We may not successfully manage the frequent introduction of new products or satisfy changing consumer preferences and quality and regulatory standards. • Failure to successfully innovate and offer high-quality products may adversely affect our ability to compete in the market for our products. • A significant disruption in the operations of our manufacturing, assembly or distribution facilities could materially adversely affect our business, financial condition and results of operations. • Many of our raw materials and product components are provided by a sole or limited number of third-party suppliers and manufacturers. • A disruption in the operations of our suppliers could materially adversely affect our business, financial condition and results of operations. • We may be involved in lawsuits to protect, defend or enforce our intellectual property rights, which could be expensive, time-consuming and unsuccessful. • Our products may infringe the intellectual property rights of others, which may cause us to incur unexpected costs or prevent us from selling our products. • We face intense competition in each of our markets and if we are unable to maintain a competitive advantage, loss of market share, sales or profitability may result. • We may have limited opportunities for future growth in sales of certain of our products. • A severe or prolonged economic downturn could adversely affect our customers’ financial conditions, levels of business activity and ability to pay their trade obligations. • We depend on retailers and distributors to market and sell our products, and our failure to maintain and further develop our sales channels could materially adversely affect our business, financial condition and results of operations. • Our business and results of operations are subject to seasonality and product launch cycles, which could result in fluctuations in our operating results and stock price. • We have significant international operations and are exposed to risks associated with doing business globally. • We rely on complex information systems to manage our manufacturing, distribution, sales and other functions.
Adverse weather conditions may have a greater impact on us than other golf equipment companies as we have a large percentage of consumable products in our product portfolio, and the purchase of consumable products is generally more dependent on the number of rounds played in a given year.
Adverse weather conditions may have a greater impact on us than on other golf equipment companies as we have a large percentage of consumable products in our product portfolio, and the purchase of consumable products is generally more dependent on the number of rounds played in a given year.
We may not successfully manage the frequent introduction of new products or satisfy changing consumer preferences, quality and regulatory standards. The golf equipment and golf wear industries are subject to constantly and rapidly changing consumer demands based, in large part, on performance benefits.
We may not successfully manage the frequent introduction of new products or satisfy changing consumer preferences and quality and regulatory standards. The golf equipment and golf wear industries are subject to constantly and rapidly changing consumer demands based, in large part, on performance benefits.
Accordingly, we devote substantial resources to the establishment and protection of our trademarks, patents and trade secrets or know‑how, and we continuously evaluate the utility of our existing intellectual property and the new registration of additional trademarks and patents, as appropriate.
Accordingly, we devote substantial resources to the establishment and protection of our patents, trademarks and trade secrets or know‑how, and we continuously evaluate the utility of our existing intellectual property and the new registration of additional trademarks and patents, as appropriate.
Pricing pressures, reduced profit margins or loss of market share or failure to grow in any of our markets, due to competition or otherwise, could materially adversely affect our business, financial condition and results of operations.
Pricing pressures, reduced profit margins, loss of market share or failure to grow in any of our markets, due to competition or otherwise, could materially adversely affect our business, financial condition and results of operations.
We anticipate that as our business continues to grow our presence in existing and expand into new markets, maintaining and enhancing our brands may become increasingly difficult and expensive. If we are unable to maintain or enhance the image of our brands, it could materially adversely affect our business, financial condition and results of operations.
We anticipate that as our business continues to grow our presence in existing markets and expand into new markets, maintaining and enhancing our brands may become increasingly difficult and expensive. If we are unable to maintain or enhance the image of our brands, it could materially adversely affect our business, financial condition and results of operations.
For example, in our golf shoe business, we offer a large variety of models as well as different styles and sizes for each model. The nature of our business makes it difficult to adjust quickly our manufacturing capacity if actual demand for our products exceeds or is less than forecasted demand.
For example, in our golf shoe business, we offer a large variety of models as well as different styles and sizes for each model. The nature of our business makes it difficult to quickly adjust our manufacturing capacity if actual demand for our products exceeds or is less than forecasted demand.
A high degree of leverage could have important consequences for us, including: • requiring us to utilize a substantial portion of our cash flows from operations to make payments on our indebtedness, reducing the availability of our cash flows to fund working capital, capital expenditures, product development, acquisitions, general corporate and other purposes; • increasing our vulnerability to adverse economic, industry, or competitive developments; • exposing us to the risk of increased interest rates because many of our borrowings are at variable rates of interest; • making it more difficult for us to satisfy our obligations with respect to our indebtedness and any failure to comply with the obligations of any of our debt instruments, including financial maintenance covenants and restrictive covenants, could result in an event of default under the agreements governing our other indebtedness (if not cured or waived); • restricting us from making strategic acquisitions or causing us to make non‑strategic divestitures; • limiting our ability to obtain additional financing for working capital, capital expenditures, product development, debt service requirements, acquisitions, and general corporate or other purposes; and • limiting our flexibility in planning for, or reacting to, changes in our business or market conditions and placing us at a competitive disadvantage compared to our competitors who are less highly leveraged and who, therefore, may be able to take advantage of opportunities that our leverage prevents us from exploiting.
A high degree of leverage could have important consequences for us, including: • requiring us to utilize a substantial portion of our cash flows from operations to service our indebtedness, reducing the availability of our cash flows to fund working capital, capital expenditures, product development, acquisitions, general corporate and other purposes; • increasing our vulnerability to adverse economic, industry or competitive developments; • exposing us to the risk of increased interest rates because many of our borrowings are at variable rates of interest; • making it more difficult for us to satisfy our obligations with respect to our indebtedness and any failure to comply with the obligations of any of our debt instruments, including financial maintenance covenants and restrictive covenants, could result in an event of default under the agreements governing our other indebtedness (if not cured or waived); • restricting us from making strategic acquisitions or causing us to make non‑strategic divestitures; • limiting our ability to obtain additional financing for working capital, capital expenditures, product development, debt service requirements, acquisitions and general corporate or other purposes; and • limiting our flexibility in planning for, or reacting to, changes in our business or market conditions and placing us at a competitive disadvantage compared to our competitors who are less highly leveraged and who, therefore, may be able to take advantage of opportunities that our leverage prevents us from exploiting.
Any damage or significant disruption in the operation of such systems, disruptions, delays or deficiencies in the design or implementation of new systems, or the failure of our information systems to perform as expected would disrupt our business, which may result in decreased sales, increased overhead costs, excess inventory or product shortages which could materially adversely affect our business, financial condition and results of operations.
Any damage or significant disruption in the operation of our systems, disruptions, delays or deficiencies in the design or implementation of new systems, or the failure of our information systems to perform as expected would disrupt our business, which may result in decreased sales, increased overhead costs, excess inventory or product shortages which could materially adversely affect our business, financial condition and results of operations.
Our success depends in part on our ability to protect our trademarks, patents and trade secrets from unauthorized use by others. To counter infringement or unauthorized use, we may be required to file infringement or misappropriation claims, which can be expensive and time‑consuming and could materially adversely affect our business, financial condition and results of operations, even if successful.
Our success depends in part on our ability to protect our patents, trademarks and trade secrets from unauthorized use by others. To counter infringement or unauthorized use, we may file infringement or misappropriation claims, which can be expensive and time‑consuming and could materially adversely affect our business, financial condition and results of operations, even if successful.
Fila is able to control the election and removal of our directors and thereby effectively determine, among other things, the payment of dividends, our corporate and management policies, including potential mergers or acquisitions or asset sales, amendment of our amended and restated certificate of incorporation or amended and restated bylaws, and other significant corporate transactions for so long as Magnus retains significant ownership of us.
Magnus is able to control the election and removal of our directors and thereby effectively determine, among other things, the payment of dividends, our corporate and management policies, including potential mergers or acquisitions or asset sales, amendment of our amended and restated certificate of incorporation or amended and restated bylaws, and other significant corporate transactions for so long as Magnus retains significant ownership of us.
For example, several U.S. territories and all 50 states now have data breach notification laws that require timely notification to impacted individuals, and at times regulators, if a company has experienced the unauthorized access or acquisition of personal data. In addition, state comprehensive privacy laws are also expanding in the U.S.
For example, several U.S. territories and all 50 states now have data breach notification laws that require timely notification to impacted individuals, and at times regulators, if a company has experienced the unauthorized access to or acquisition of personal data. In addition, comprehensive state privacy laws are expanding in the U.S.
If we are unable in the future to secure prominent golfers and arrange golfer endorsements of our products on terms we deem to be reasonable, we may be required to modify our marketing platform and to rely more heavily on other forms of marketing and promotion, which may not prove to be as effective or may result in additional costs.
If we are unable in the future to secure prominent golfers and arrange golfer endorsements of our products on terms that we deem to be reasonable, we may be required to modify our marketing platform and to rely more heavily on other forms of marketing and promotion, which may not prove to be as effective or may result in additional costs.
Such events can negatively impact tourism, which could adversely affect our sales to retailers at resorts and other vacation destinations. In addition, the occurrence of political instability and/or terrorist activities generally restricts travel to and from the affected areas, making it more difficult in general to manage our global operations.
Such events can negatively impact tourism, which could adversely affect our sales to retailers at resorts and other vacation destinations. In addition, the occurrence of political instability and/or terrorist activities generally restricts travel to and from the affected areas, making it more difficult to manage our global operations.
While we do not control our suppliers or their labor practices, negative publicity regarding the management of facilities, production methods of or materials used by any of our suppliers could adversely affect our reputation, which could materially adversely affect our business, financial condition and results of operations and may force us to locate alternative suppliers.
While we do not control our suppliers or their labor practices, negative publicity regarding the management of facilities, production methods employed or materials used by any of our suppliers could adversely affect our reputation, which could materially adversely affect our business, financial condition and results of operations and may force us to locate alternative suppliers.
If we encounter problems with our manufacturing, assembly and distribution facilities, our ability to meet customer expectations, manage inventory, avoid errors, complete sales and achieve objectives for operating efficiencies could be harmed, which could materially adversely affect our business, financial condition and results of operations.
If we encounter problems with our manufacturing, assembly and distribution facilities and networks, our ability to meet customer expectations, manage inventory, avoid errors, complete sales and achieve objectives for operating efficiencies could be harmed, which could materially adversely affect our business, financial condition and results of operations.
By controlling the election and removal of our directors, Fila is able to effectively determine the payment of dividends on our common stock. Magnus may cause us to pay dividends on our common stock at times or in amounts that may not be in the best interest of us or other holders of our common stock.
By controlling the election and removal of our directors, Magnus is able to effectively determine the payment of dividends on our common stock. Magnus may cause us to pay dividends on our common stock at times or in amounts that may not be in the best interest of us or other holders of our common stock.
Substantially all of these net sales from regions outside of the United States were generated in the applicable local currency, which include, but are not limited to, the Japanese yen, the Korean won, the British pound sterling, the euro and the Canadian dollar.
Substantially all net sales from regions outside of the United States were generated in the applicable local currency, which include, but are not limited to, the Japanese yen, the Korean won, the British pound sterling, the euro and the Canadian dollar.
Any material delays, interruption or increased costs in the supply of raw materials or components of our products could impact our ability to meet customer demand for our products, which could materially adversely affect our business, financial condition and results of operations.
Any material delays, interruption or increased costs in the supply of raw materials or components of our products could impact our ability to meet customer demand, which could materially adversely affect our business, financial condition and results of operations.
Net sales by region are included in “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” Item 7 of Part II and “Notes to Consolidated Financial Statements – Note 21 – Segment Information,” Item 8 of Part II, included elsewhere in this report.
Net sales by region are included in “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” Item 7 of Part II to this report and “Notes to Consolidated Financial Statements – Note 21 – Segment Information,” Item 8 of Part II to this report.
Any claims that we assert against perceived infringers could also provoke these parties to assert counterclaims against us alleging that we infringe or misappropriate their intellectual property rights or that we have engaged in anti‑competitive conduct.
Any claims that we assert against perceived infringers could also provoke these parties to assert counterclaims alleging that we infringe or misappropriate their intellectual property rights or that we have engaged in anti‑competitive conduct.
The Indenture that governs the Notes and the credit agreement governing our Second Amended Credit Facility contain restrictions that limit our flexibility in operating our business. The Indenture that governs the Notes and the credit agreement governing our Second Amended Credit Facility each contain various covenants that limit our ability to engage in specified types of transactions.
The indenture that governs the Notes and the credit agreement that governs our Second Amended Credit Facility contain restrictions that limit our flexibility in operating our business. The indenture that governs the Notes and the credit agreement that governs our Second Amended Credit Facility each contain various covenants that limit our ability to engage in specified types of transactions.
In addition, the occurrence of a natural disaster or the outbreak of a pandemic disease generally restricts travel to and from the affected areas, making it more difficult in general to manage our global operations.
In addition, the occurrence of a natural disaster or the outbreak of a pandemic disease generally restricts travel to and from the affected areas, making it more difficult to manage our global operations.
A future significant or prolonged decline in general economic conditions or uncertainties regarding future economic prospects that adversely affects consumer discretionary spending, whether in the United States or in our international markets, could result in reduced sales of our products, which could materially adversely affect our business, financial condition and results of operations. 15 Table of Contents Demographic factors may affect the number of golf participants and related spending on our products.
A future significant or prolonged decline in general economic conditions or uncertainties regarding future economic prospects that adversely affects consumer discretionary spending, whether in the United States or in our international markets, could result in reduced sales of our products, which could materially adversely affect our business, financial condition and results of operations. 14 Table of Contents Demographic factors may affect the number of golf participants and related spending on our products.
Although we expect to pay dividends according to our dividend policy, we may not pay dividends according to our policy, or at all, if, among other things, we do not have the cash necessary to pay our intended dividends.
Although we expect to pay dividends according to our dividend policy, we may determine not to pay dividends according to our policy, or at all, if, among other things, we do not have the cash necessary to pay our intended dividends.
Foreign Corrupt Practices Act (the "FCPA"), and similar anti‑bribery and anti‑corruption laws, local and international environmental, health and safety laws, and increasingly complex regulations relating to data privacy and the conduct of international commerce; • increased difficulty in controlling and monitoring foreign operations from the United States, including increased difficulty in identifying and recruiting qualified personnel for its foreign operations; and • increased exposure to interruptions in air carrier or ship services.
Foreign Corrupt Practices Act (the “FCPA”), and similar anti‑bribery and anti‑corruption laws, local and international environmental, health and safety laws, and increasingly complex regulations relating to data privacy and the conduct of international commerce; • increased difficulty in controlling and monitoring foreign operations from the United States, including increased difficulty in identifying and recruiting qualified personnel for its foreign operations; and • increased exposure to interruptions in air carrier or ship services.
Any perceived or actual unauthorized or inadvertent disclosure of personal or other confidential information, cyberattack or other breach or theft of the information we control, whether through a breach of our network by an unauthorized party, employee theft, misuse or error or otherwise, could harm our reputation, impair our ability to attract customers, result in substantial remediation costs, subject us to claims or litigation (including class claims), regulatory enforcement, liability under 27 Table of Contents data protection laws, and additional reporting requirements, result in higher insurance premiums and materially adversely affect our business, financial condition and results of operations.
Any perceived or actual unauthorized or inadvertent disclosure of personal or other confidential information, cyberattack or other breach or theft of the information we control, whether through a breach of our network by an unauthorized party, employee theft, misuse or error or otherwise, could harm our reputation, impair our ability to attract customers, result in substantial remediation costs, subject us to claims or litigation (including class claims), regulatory enforcement, liability under data protection laws, and additional reporting requirements, result in higher insurance premiums and materially adversely affect our business, financial condition and results of operations.
Our effective tax rates in the future could be adversely affected by a number of factors, including changes in the expected geographic mix of earnings in countries with differing statutory tax rates, changes in the valuation and realizability of deferred tax assets and liabilities, changes to or issuance of new tax laws, interpretive regulations, notices or other administrative practices, principles, or guidance, changes to or issuance of new accounting guidance, changes in foreign currency exchange rates, entry into new businesses and geographies, changes to our existing businesses and operations, acquisitions (including integrations) and investments and how they are financed, changes in our stock price, and the outcome of income tax audits in various jurisdictions around the world.
Our effective tax rates in the future could be adversely affected by a number of factors, including changes in the expected geographic mix of earnings in countries with differing statutory tax rates, changes in the valuation and realizability of deferred tax assets and liabilities, changes to or issuance of new tax laws, interpretive regulations, notices or other administrative practices, principles, or guidance, changes to or issuance of new accounting guidance, changes in foreign currency exchange rates, entry into new businesses and geographies, changes to our existing businesses and operations, 28 Table of Contents acquisitions (including integrations) and investments and how they are financed, changes in our stock price, and the outcome of income tax audits in various jurisdictions around the world.
An adverse result in any litigation or defense proceedings, including proceedings at the patent and trademark offices, could put one or more of our patents or trademarks at risk of being invalidated, held unenforceable or interpreted narrowly, and could put any of our patent or trademark applications at risk of not being issued as a registered patent or trademark, any of which could materially adversely affect our business, financial condition and results of operations.
An adverse result in any litigation or defense proceedings, including proceedings at the patent and trademark offices, could put one or more of our patents, trademarks or trade secrets at risk of being invalidated, held unenforceable or interpreted narrowly, and could put any of our patent or trademark applications at risk of not being issued as a registered patent or trademark, any of which could materially adversely affect our business, financial condition and results of operations.
Our repurchase program does not have an expiration date and does not obligate us to repurchase any specific dollar amount or to acquire any specific number of shares.
Our share repurchase program does not have an expiration date and does not obligate us to repurchase any specific dollar amount or to acquire any specific number of shares.
Future sales, or the perception of future sales, by us or our existing shareholders in the public market could cause the market price for our common stock to decline.
Future equity sales, or the perception of future equity sales, by us or our existing shareholders in the public market could cause the market price for our common stock to decline.
For example, we must properly anticipate consumer preferences and design products that meet those preferences, while also complying with significant restrictions imposed by the Rules of Golf, or our new products will not achieve sufficient market success to compensate for the usual decline in sales experienced by products already in the market.
For example, we must properly anticipate consumer preferences and design products that meet those preferences, while also complying with significant restrictions imposed by the Rules of Golf, or our new products may not achieve sufficient market success to compensate for the usual decline in sales experienced by products already in the market.
We selectively and strategically pursue patent and trademark protection in our core geographic markets, but our strategy has been to not perfect certain patent and trademark rights in some countries. For example, we focus primarily on securing patent protection in those countries where the majority of our golf ball and golf club industry production takes place.
We selectively and strategically pursue patent, trademark and trade secret protection in our core geographic markets, but our strategy has been to not perfect certain patent and trademark rights in some countries. For example, we focus primarily on securing patent protection in those countries where the majority of our golf ball and golf club industry production takes place.
See “- We cannot assure you that we will pay dividends on our common stock, and our indebtedness and other factors could limit our ability to pay dividends on our common stock.” In the ordinary course of its business activities, Fila and its affiliates may engage in activities where their interests conflict with our interests or those of our shareholders.
See “—We cannot assure you that we will pay dividends on our common stock, and our indebtedness and other factors could limit our ability to pay dividends on our common stock.” In the ordinary course of its business activities, Magnus and its affiliates may engage in activities where their interests conflict with our interests or those of our other shareholders.
The materials and components used by us, our suppliers and our manufacturers involve raw materials, including polybutadiene, urethane and ionomers for the manufacturing of our golf balls, titanium and steel for the manufacture of our golf clubs, leather and synthetic fabrics for the manufacturing of our golf shoes, golf gloves, golf gear and golf apparel, and resin and other petroleum‑based materials for a number of our products.
The materials and components used by us, our suppliers and our manufacturers involve raw materials, including polybutadiene, zinc diacrylate, urethane and ionomers for the manufacturing of our golf balls, titanium and steel for the manufacture of our golf clubs, leather and synthetic fabrics for the manufacturing of our golf shoes, golf gloves, golf gear and golf apparel, and resin and other petroleum‑based materials for a number of our products.
Except as may be limited by applicable law, Fila and its affiliates do not have any duty to refrain from competing directly with us or engaging, directly or indirectly, in the same business activities or similar business activities or lines of business in which we operate.
Except as may be limited by applicable law, Magnus and its affiliates do not have any duty to refrain from competing directly with us or engaging, directly or indirectly, in the same business activities or similar business activities or lines of business in which we operate.
Our brands have worldwide recognition and our success depends on our ability to maintain and enhance our brand image and reputation. In particular, we believe that maintaining and enhancing the Titleist, Scotty Cameron, Vokey Design, FootJoy and KJUS brands is critical to maintaining and expanding our customer base.
Our brands have worldwide recognition, and our success depends on our ability to maintain and enhance our brand image and reputation. In particular, we believe that maintaining and enhancing the Titleist, Scotty Cameron, Vokey Design, FootJoy, KJUS and Club Glove brands is critical to maintaining and expanding our customer base.
If we are unable to generate sufficient cash flows to service our debt 34 Table of Contents and meet our other commitments, we may need to restructure or refinance all or a portion of our debt, sell material assets or operations, or raise additional debt or equity capital.
If we are unable to generate sufficient cash flows to service our debt 32 Table of Contents and meet our other commitments, we may need to restructure or refinance all or a portion of our debt, sell material assets or operations, or raise additional debt or equity capital.
Our business could be harmed by the occurrence of natural disasters or pandemic diseases. The occurrence of a natural disaster, such as an earthquake, tsunami, fire, flood or hurricane, or the outbreak of a pandemic disease, such as the COVID-19 pandemic, could materially adversely affect our business, financial condition and results of operations.
Our business could be harmed by the occurrence of natural disasters or pandemic diseases. The occurrence of a natural disaster, such as an earthquake, tsunami, fire, flood or hurricane, or the outbreak of a pandemic disease could materially adversely affect our business, financial condition and results of operations.
If we experience significantly increased demand, or if, for any reason, we need to replace an existing manufacturer or supplier, there can be no assurance that additional supplies of raw materials or additional manufacturing capacity will be available when required on terms that are 17 Table of Contents acceptable to us, or at all, or that any new supplier or manufacturer would allocate sufficient capacity to us in order to meet our requirements.
If we experience significantly increased demand, or if, for any reason, we need to replace an existing manufacturer or supplier, there can be no assurance that additional supplies of raw materials or additional manufacturing capacity will be available when required on terms that are acceptable to us, or at all, or that any new supplier or manufacturer would allocate sufficient capacity to us in order to meet our requirements.
In general, an “ownership change” generally occurs if there is a cumulative change in our ownership by “5‑percent shareholders” that exceeds 50 percentage points over a rolling three‑year period. Similar rules apply under state tax laws. We may experience an ownership change from future transactions in our stock, some of which may be outside our 30 Table of Contents control.
In general, an “ownership change” generally occurs if there is a cumulative change in our ownership by “5‑percent shareholders” that exceeds 50 percentage points over a rolling three‑year period. Similar rules apply under state tax laws. We may experience an ownership change from future transactions in our stock, some of which may be outside our control.
If our information systems fail to perform these functions adequately or if we experience an interruption in our operations, including a breach in cybersecurity, our business, financial condition and results of operations could be materially adversely affected. • Our current senior management team and other key employees are critical to our success and if we are unable to attract and/or retain key employees and hire qualified management, technical and manufacturing personnel, our ability to compete could be harmed. • Our business could be materially adversely affected as a result of the risks associated with acquisitions and investments.
If our information systems fail to perform these functions adequately or if we experience an interruption in our operations, including a breach in cybersecurity, our business, financial condition and results of operations could be materially adversely affected. • Cybersecurity risks could disrupt our operations and negatively impact our reputation. • Our current senior management team and other key employees are critical to our success and if we are unable to attract and/or retain key employees and hire qualified management, technical and manufacturing personnel, our ability to compete could be harmed. • Our business could be materially adversely affected as a result of the risks associated with acquisitions and investments.
Under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended (the "Code"), if a corporation undergoes an “ownership change,” the corporation’s ability to use its pre‑change net operating loss ("NOL") carryforwards and other pre‑change tax attributes, such as foreign tax credits and research tax credits, to offset its post‑change income and taxes may be limited.
Under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended (the “Code”), if a corporation undergoes an “ownership change,” the corporation’s ability to use its pre‑change net operating loss (“NOL”) carryforwards and other pre‑change tax attributes, such as foreign tax credits and research tax credits, to offset its post‑change income and taxes may be limited.
These sales, or the possibility that these sales may occur, also might make it more difficult for us to sell equity securities in the future at a time and at a price that we deem appropriate.
These sales, or the possibility that these sales may occur, also might make it more difficult for us to sell newly issued equity securities in the future at a time and at a price that we deem appropriate.
We also use specialized sources for certain of the raw materials used to make our golf gloves and other products, and these sources are limited to certain geographical locations. Many of these materials are customized for us and some of our products require specially developed manufacturing techniques and processes which make it difficult to identify and utilize alternative suppliers quickly.
We also use specialized and geographically limited sources for certain of the raw materials used to make our golf gloves and other products. Many of these materials are customized for us and some of our products require specially developed manufacturing techniques and processes which make it difficult to identify and utilize alternative suppliers quickly.
Many of our competitors have significant competitive strengths, including long operating histories, a large and broad consumer base, established relationships with a broad set of suppliers and customers, an established regional or local presence, strong brand recognition and greater financial, R&D, marketing, distribution and other resources than we do.
Many of our competitors have significant competitive strengths, including long operating histories, large and broad consumer bases, established relationships with a broad set of suppliers and customers, established regional or local presence, strong brand recognition and greater financial, R&D, marketing, distribution and other resources than we do.
We compete against large‑scale global sports equipment and apparel players, Japanese industrials, and more specialized golf equipment and golf wear players, including Callaway, TaylorMade, Ping, SRI Sports Limited, Bridgestone, Nike, Adidas and Under Armour.
We compete against large‑scale global sports equipment and apparel companies, Japanese industrials, and more specialized golf equipment and golf wear companies, including Callaway, TaylorMade, Ping, SRI Sports Limited, Bridgestone, Nike, Adidas and Under Armour.
Certain of our existing agreements governing indebtedness, including our credit agreement, restrict our ability to pay dividends on our common stock. We expect that any future agreements governing indebtedness will contain similar restrictions.
Certain of our existing agreements governing indebtedness, including our credit agreement, under certain conditions restrict our ability to pay dividends on our common stock. We expect that any future agreements governing indebtedness will contain similar restrictions.
See also “—We may be involved in lawsuits to protect, defend or enforce our intellectual property rights, which could be expensive, time consuming and unsuccessful.” Any of the foregoing could cause us to incur significant costs and prevent us from manufacturing or selling certain of our products.
See also “—We may be involved in lawsuits to protect, defend or 19 Table of Contents enforce our intellectual property rights, which could be expensive, time consuming and unsuccessful.” Any of the foregoing could cause us to incur significant costs and prevent us from manufacturing or selling certain of our products.
Our varying product introduction cycles, which are described under “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Key Factors Affecting Our Results of Operations – Cyclicality,” Item 7 of Part II to this report, may cause our results of operations to fluctuate as each product line has different volumes, prices and margins.
Our varying product introduction cycles, which are described under “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Key Factors Affecting Our Results of Operations – Cyclicality” and “–Product Life Cycles,” Item 7 of Part II to this report, may cause our results of operations to fluctuate as each product line has different volumes, prices and margins.
Since the hedging activities are designed to reduce volatility, they not only reduce the negative impact of a stronger U.S. dollar but could also reduce the positive impact of a weaker U.S. dollar. We are also exposed to credit risk from the counterparties to our hedging activities and market conditions could cause such counterparties to experience financial difficulties.
Because these hedging activities are designed to reduce volatility, they not only reduce the negative impact of a stronger U.S. dollar but could also reduce the positive impact of a weaker U.S. dollar. We are also exposed to credit risk from the counterparties to our hedging activities and market conditions could cause such counterparties to experience financial difficulties.
The determination of our worldwide provision for income taxes and other tax liabilities requires complex computations and significant judgments, and there are many transactions and calculations where the ultimate tax determination is uncertain.
The determination of our worldwide provision for income taxes and other tax liabilities requires complex computations and significant judgments, and there are many transactions and calculations for which the ultimate tax determination is uncertain.
Discretionary spending on golf and the golf products we sell is affected by consumer spending habits as well as by many macroeconomic factors, including general business conditions, stock market prices and volatility, corporate spending, housing prices, rate of inflation, interest rates, the availability of consumer credit, taxes and consumer confidence in future economic conditions.
Discretionary spending on golf and the golf products we sell is affected by consumer spending habits and many macroeconomic factors, including general business conditions, stock market prices and volatility, corporate spending, housing prices, inflation, interest rates, the availability of consumer credit, taxes and consumer confidence in future economic conditions.
We face intense competition in each of our markets and if we are unable to maintain a competitive advantage, loss of market share, sales or profitability may result. The markets for golf balls, clubs, gear and wear are highly competitive and there may be low barriers to entry in many of our markets.
We face intense competition in each of our markets and if we are unable to maintain a competitive advantage, loss of market share, sales or profitability may result. The markets for golf equipment, wear and gear are highly competitive and there may be low barriers to entry in many of our markets.
Our financial condition and results of operations may be adversely affected if our assumptions change or if 33 Table of Contents actual circumstances differ from those in our assumptions, which could cause our results of operations to fall below the expectations of securities analysts and investors, resulting in a decline in the price of our common stock.
Our financial condition and results of operations may be adversely affected if our assumptions change or if actual circumstances differ from those in our assumptions, which could cause our results of operations to fall below the expectations of securities analysts and investors, resulting in a decline in the price of our common stock.
Our ability to continue to select reliable suppliers who provide timely deliveries of quality materials and components will impact our success in meeting customer demand for timely delivery of quality products.
Our ability to continue selecting reliable suppliers who provide timely deliveries of quality materials and components will impact our success in meeting customer demand for timely delivery of quality products.
You should carefully consider each of the following risk factors, as well as the other information in this Annual Report, including our consolidated financial statements and the related notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” Item 7 of Part II, included elsewhere in this report.
You should carefully consider each of the following risk factors, as well as the other information in this Annual Report, including our consolidated financial statements and the related notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” Item 7 of Part II to this report.
Liability in many situations may be imposed not only without regard to fault, but may also be joint and 32 Table of Contents several, so that we may be held responsible for more than our share of the contamination or other damages, or even for the entire amount.
Liability in many situations may be imposed not only without regard to fault, but may also be joint and several, so that we may be held responsible for more than our share of the contamination or other damages, or even for the entire amount.
Supply chain disruptions or shortages in raw materials could materially adversely affect our business, financial condition and results of operations. A disruption in the operations of our suppliers could materially adversely affect our business, financial condition and results of operations.
Any significant supply chain disruptions or shortages in raw materials could materially adversely affect our business, financial condition and results of operations. A disruption in the operations of our suppliers could materially adversely affect our business, financial condition and results of operations.
However, these efforts may be expensive, time‑consuming, divert management’s attention, and ultimately may not be successful in reducing sales of golf products by these infringers. The failure to prevent or limit such infringers or imitators could adversely affect our reputation and sales.
However, these efforts may be expensive, time‑consuming, divert management’s attention, and ultimately may not be successful in reducing sales of golf products by these infringers. The 18 Table of Contents failure to prevent or limit such infringers or imitators could adversely affect our reputation and sales.
While we have taken some lawful steps to limit commerce of our products in the “gray market” in both the United States and abroad, we have not been successful in halting such commerce. We may not be successful in our efforts to grow our presence in existing international markets and expand into additional international markets.
While we have taken some lawful steps to limit commerce of our products in the “gray market” in both the United States and abroad, we have not been successful in halting such commerce. We may fail to grow our presence in existing international markets and expand into additional international markets.
Our products expose us to warranty claims and product liability claims if products we manufacture, sell or design actually or allegedly fail to perform as expected, or the use of those products results, or is alleged to result, in personal injury, 31 Table of Contents death or property damage.
Our products expose us to warranty claims and product liability claims if products we manufacture, sell or design actually or allegedly fail to perform as expected, or the use of those products results, or is alleged to result, in personal injury, death or property damage.
If we have insufficient sales or are unable to realize the full potential of our capital investments, we may not realize a positive return on our investment, which could impact our margins and have a significant adverse effect on our results of operations, financial condition and cash flows.
If we have insufficient sales or are unable to realize the full potential of our capital investments, we may not realize a positive return on our investment, which could impact our margins and have a significant adverse effect on our business, financial condition and results of operations.
We would also likely suffer indirect harms such as reputational damage and reticence among other companies to do business with us. For further information, see “ We rely on complex information systems for management of our manufacturing, distribution, sales and other functions.
We would also likely suffer indirect harms such as reputational damage and reticence among other companies to do business with us. For further information, see “—We rely on complex information systems to manage our manufacturing, distribution, sales and other functions.
In the future, the overall dollar volume of worldwide sales of golf equipment, wear and gear may not grow or may decline which could materially adversely affect our business, financial condition and results of operations. A severe or prolonged economic downturn could adversely affect our customers’ financial condition, their levels of business activity and their ability to pay trade obligations.
In the future, the overall dollar volume of worldwide sales of golf equipment, wear and gear may not grow or may decline which could materially adversely affect our business, financial condition and results of operations. 20 Table of Contents A severe or prolonged economic downturn could adversely affect our customers’ financial conditions, levels of business activity and ability to pay their trade obligations.
A breach of any of these covenants, among others, could result in a default under one or more of these agreements, including as a result of cross default provisions, which, if not cured or waived, could result in our being required to repay these borrowings before their maturity.
A breach of any of these covenants, among others, could result in a default under one or more of these agreements, including cross defaults, which, if not cured or waived, could result in our being required to repay these borrowings before their maturity.
If we are unable to repay outstanding borrowings when due, the lenders under our Second Amended Credit Facility have the right to proceed against the collateral granted to them to secure the debt. If lenders under the Second Amended Credit Facility accelerate the debt thereunder, then the obligations under the Notes could be accelerated.
If we are unable to repay outstanding borrowings when due, the lenders under our Second Amended Credit Facility may proceed against the collateral granted to them to secure the debt. If lenders under the Second Amended Credit Facility accelerate the debt thereunder, then the obligations under the Notes could be accelerated.
So long as Fila owns Magnus and Magnus continues to own a significant amount of our voting power, even if such amount is less than 50%, Fila will continue to be able to strongly influence or effectively control our decisions. The interests of Fila and Magnus may not coincide with the interests of other holders of our common stock.
So long as Magnus continues to own a significant amount of our voting power, even if such amount is less than 50%, Magnus will continue to be able to strongly influence or effectively control our decisions. The interests of Magnus and its affiliates may not coincide with the interests of other holders of our common stock.
Fila and its affiliates also may pursue acquisition opportunities that may be complementary to our business and, as a result, those acquisition opportunities may not be available to us.
Magnus and its affiliates also may pursue acquisition opportunities that may be complementary to our business and, as a result, those acquisition opportunities may not be available to us.
Because substantially all of our products are manufactured and assembled in and distributed from a few locations, our operations could be interrupted by events beyond our control, including: • power loss or network connectivity or telecommunications failure or downtime; • equipment failure; • human error or accidents; • sabotage or vandalism; • physical or electronic security breaches; • floods, fires, earthquakes, hurricanes, tornadoes, tsunamis or other natural disasters; • political unrest; • labor difficulties, including work stoppages, slowdowns, labor shortages or excessive turnover; • water damage or water shortage; • government orders and regulations; • pandemics and other health and safety issues (including, for example, the COVID-19 pandemic); and • terrorism.
Because substantially all of our products are manufactured, assembled in and distributed from a few locations, our operations could be interrupted by events beyond our control, including: • power loss or network connectivity or telecommunications failure or downtime; • equipment failure; • human error or accidents; • sabotage or vandalism; • physical or electronic security breaches; • floods, fires, earthquakes, hurricanes, tornadoes, tsunamis or other natural disasters; • political or socioeconomic unrest; • labor difficulties, including work stoppages, slowdowns, labor shortages or excessive turnover; • water damage or water shortage; • government orders and regulations; • pandemics and other health and safety issues; and • terrorism.
Many of our raw materials or components of our products are provided by a sole or limited number of third‑party suppliers and manufacturers. We rely on a sole or limited number of third‑party suppliers and manufacturers for many of our raw materials and the components in our golf balls, golf clubs, golf gloves and certain of our other products.
Many of our raw materials and product components are provided by a sole or limited number of third‑party suppliers and manufacturers. We rely on a sole or limited number of third‑party suppliers and manufacturers for many of our raw materials and components in our golf balls, golf clubs, golf gloves, golf shoes and certain of our other products.
Moreover, even if the applications will be registered during the registration process, third parties may seek to oppose, limit, or otherwise challenge these applications or registrations. 20 Table of Contents We may be involved in lawsuits to protect, defend or enforce our intellectual property rights, which could be expensive, time consuming and unsuccessful.
Moreover, even if the applications will be registered during the registration process, third parties may seek to oppose, limit, or otherwise challenge these applications or registrations. We may be involved in lawsuits to protect, defend or enforce our intellectual property rights, which could be expensive, time consuming and unsuccessful.
If we inaccurately forecast demand for our products, we may manufacture insufficient or excess quantities, which could materially adversely affect our business, financial condition and results of operations. To reduce purchasing costs and ensure supply, we place orders with our suppliers in advance of the time period we expect to deliver our products.
If we inaccurately forecast demand for our products, we may manufacture insufficient or excess quantities, which could materially adversely affect our business, financial condition and results of operations. To reduce purchasing costs and ensure supply, we place orders with our suppliers in advance of when we expect to deliver our products.
For example, it may be in the interest of Magnus and Fila to cause the payment of dividends on our common stock in order to satisfy obligations under loan agreements they may enter into from time to time.
For example, it may be in the interest of Magnus and its affiliates to cause the payment of dividends on our common stock in order to satisfy obligations under loan agreements they may enter into from time to time.
We continue to be exposed to price increases and availability risks with respect to certain materials and components used by us, our suppliers and our manufacturers, including polybutadiene, urethane and ionomers for the manufacturing of our golf balls, titanium and steel for our golf clubs, leather and synthetic fabrics for our golf shoes, golf gloves, golf gear and golf apparel, and resin and other petroleum‑based materials for a number of our products.
We continue to be exposed to price increases and availability risks with respect to certain materials and components used by us, our suppliers and our manufacturers, including polybutadiene, zinc diacrylate, urethane and ionomers for the manufacturing of our golf balls, titanium and steel for our golf clubs, leather and synthetic fabrics for our golf shoes, 16 Table of Contents golf gloves, golf gear and golf apparel, and resin and other petroleum‑based materials for a number of our products.
Court of Appeals for the Federal Circuit have made, and may in the future make, changes in 21 Table of Contents how the patent laws of the United States are interpreted. Similarly, foreign courts have made, and may in the future make, changes in how the patent laws in their respective jurisdictions are interpreted.
Court of Appeals for the Federal Circuit have made, and may in the future make, changes in how the patent laws of the United States are interpreted. Similarly, foreign courts have made, and may in the future make, changes in how the patent laws in their respective jurisdictions are interpreted.
A decline in the level of professional usage of our products, or a significant increase in the cost to attract or retain endorsers, could materially adversely affect our business, financial condition and results of operations.
A decline in the level of professional usage of our 23 Table of Contents products, or a significant increase in the cost to attract or retain endorsers, could materially adversely affect our business, financial condition and results of operations.
We already have a significant share of worldwide sales of golf balls, golf shoes and golf gloves and the golf industry is very competitive. As such, our ability to gain incremental market share quickly or at all may be limited given the competitive nature of the golf industry and other challenges to the golf industry.
The golf industry is highly competitive, and we already have a significant share of worldwide sales of golf balls, golf shoes and golf gloves. As such, our ability to gain incremental market share quickly or at all may be limited given the competitive nature of and other challenges associated with the golf industry.
Any decline in the ratings of our corporate credit or the Notes or any indications from the rating agencies that their ratings on our corporate credit or the Notes are under surveillance or review with possible negative implications could increase our cost of financing and limit our ability to access the capital markets to meet liquidity needs.
Any downgrade in our corporate credit ratings or the credit ratings of the Notes, or any indications from the rating agencies that our ratings are under surveillance or under review with possible negative implications could increase our cost of financing and limit our ability to access the capital markets to meet liquidity needs.
Unfavorable weather conditions in our major markets, such as a particularly long winter, a cold and wet spring, or an extremely hot summer, would impact the number of playable days and rounds played in a given year, which would result in a decrease in the amount spent by golfers and golf retailers on our products, particularly with respect to consumable products such as golf balls and golf gloves.
Unfavorable weather conditions in our major markets, such as a particularly long winter, a cold and wet spring, or an extremely hot summer, would impact the number of playable days and rounds played in a given year and decrease the amount spent by golfers and golf retailers on our products, particularly consumable products such as golf balls and golf gloves.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThis training is mandatory for all relevant employees globally on a periodic basis, and it is supplemented by firmwide testing initiatives, 40 Table of Contents including quarterly phishing tests. We provide specialized security training for certain employees such as application developers, human resources and finance teams.
Biggest changeThis training is mandatory for all relevant employees globally on a periodic basis, and it is supplemented by firmwide testing initiatives, including quarterly phishing tests. We provide specialized security training for certain employees such as application developers, human resources and finance teams. Finally, our Global Privacy Program requires all relevant employees to take periodic awareness training on data privacy.
Our risk management program is supervised by a dedicated Senior Director of Cyber & Information Security (the “SDCIS”), who has more than 30 years of experience in cybersecurity and information technology in both private industry and the United States Air Force. The SDCIS is responsible for leading an enterprise-wide cyber security strategy, policy, standards, architecture and processes.
Our cybersecurity risk management program is supervised by a dedicated Senior Director of Cyber & Information Security (the “SDCIS”), who has more than 30 years of experience in cybersecurity and information technology in both private industry and the United States Air Force. The SDCIS is responsible for leading an enterprise-wide cyber security strategy, policy, standards, architecture and processes.
If our information systems fail to perform these functions adequately or if we experience an interruption in our operations, including a breach in cybersecurity, our business, financial condition and results of operations could be materially adversely affected. " 41 Table of Contents
If our information systems fail to perform these functions adequately or if we experience an interruption in our operations, including a breach in cybersecurity, our business, financial condition and results of operations could be materially adversely affected. ” 38 Table of Contents
The SDCIS reports directly to our Executive Vice President and Chief Technology and Digital Officer (the “CTDO”). For information regarding the relevant expertise and qualifications of our CTDO, see "Information About Our Executive Officers" included in Part I of this report.
The SDCIS reports directly to our Executive Vice President and Chief Technology and Digital Officer (the “CTDO”). For information regarding the relevant expertise and qualifications of our CTDO, see “Information About Our Executive Officers” included in Part I of this report.
We annually engage third parties (as well as our own internal audit department) to audit our cyber and information security programs, processes and controls, and the findings of these parties are reported to the Audit Committee and the full Board.
We annually engage third parties (as well as our own internal audit department) to audit our cyber and information security programs, processes and controls, and the findings of these parties are reported to the Audit Committee and the full 37 Table of Contents Board.
For more information about the cybersecurity risks we face, see the risk factor in Item 1A entitled " We rely on complex information systems for management of our manufacturing, distribution, sales and other functions.
For more information about the cybersecurity risks we face, see the risk factor in Item 1A entitled “ We rely on complex information systems to manage our manufacturing, distribution, sales and other functions.
As of the date of this report, we have not experienced a cybersecurity incident that resulted in a material effect on our business strategy, results of operations or financial condition.
As of the date of this report, we have not experienced any current or past cybersecurity incidents that resulted in a material effect on our business strategy, results of operations or financial condition.
ITEM 1C. CYBERSECURITY To more effectively prevent, detect and respond to cyber and information security threats, we maintain a global cyber security risk management program designed to identify, assess, and manage material risks from cybersecurity threats.
ITEM 1C. CYBERSECURITY To more effectively prevent, detect and respond to cyber and information security threats, we maintain a global cyber security risk management program designed to identify, assess, and manage material risks from cybersecurity threats and to protect the security, confidentiality, integrity and availability of our critical information technology systems and information.
Finally, our Global Privacy Program requires all relevant employees to take periodic awareness training on data privacy. This privacy-focused training includes information about the relevant laws, confidentiality and security, as well as how to effectively report and respond to unauthorized access to or use of personal information.
This privacy-focused training includes information about the relevant laws, confidentiality and security, as well as how to effectively report and respond to unauthorized access to or use of personal information.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeWe have additional sales offices and facilities in Colorado, Hawaii, Utah, New Zealand, Malaysia, Singapore, Hong Kong, Taiwan, Japan, Korea, Thailand, Scotland, Sweden, France, Germany and Switzerland. In the opinion of our management, our properties are adequate and suitable for our business as presently conducted and are adequately maintained. 42 Table of Contents
Biggest changeIn the opinion of our management, our properties are adequate and suitable for our business as presently conducted and are adequately maintained. 40 Table of Contents
Location Type Facility Size (1) Leased/Owned Fairhaven, Massachusetts Headquarters and golf ball R&D 222,720 Owned Golf Balls North Dartmouth, Massachusetts Golf ball manufacturing 179,602 Owned New Bedford, Massachusetts Golf ball manufacturing 244,091 Owned Amphur Pluakdaeng Rayong, Thailand Golf ball manufacturing 230,003 Owned New Bedford, Massachusetts Golf ball customization and distribution center 438,007 Owned Fairhaven, Massachusetts Golf ball packaging 49,580 Owned New Bedford, Massachusetts Golf ball advanced engineering and ball cavity manufacturing 34,000 Leased Sugarland, Texas Golf ball recycling and distribution center 87,214 Leased Golf Clubs, Wedges and Putters Carlsbad, California Golf club assembly 165,485 Leased Carlsbad, California Tour testing and golf club R&D 50,000 Leased Oceanside, California Digital media studio 10,433 Leased San Marcos, California Putter research 19,200 Leased Encinitas, California Putter fitting and sales 3,754 Leased Tokyo, Japan Golf club assembly 45,274 Leased FootJoy Fuzhou, Fujian, China (40% owned joint venture) Golf shoe manufacturing and distribution center 525,031 Building Owned/Land Leased Brockton, Massachusetts Golf shoe R&D 146,000 Leased Sriracha Chonburi, Thailand Golf glove manufacturing 112,847 Building Owned/Land Leased Sales Offices and Distribution Centers (used by multiple reportable segments) Fairhaven, Massachusetts East Coast customization and distribution center 185,370 Owned Vista, California West Coast distribution center and golf bag embroidery 102,319 Leased Lakeville, Massachusetts East Coast customization and distribution center 555,695 Leased Cambridgeshire, United Kingdom Sales office and distribution center, as well as golf club assembly and golf ball customization 156,326 Owned Helmond, The Netherlands Sales office and distribution center 69,965 Leased Victoria, Australia Sales office and distribution center, as well as golf club assembly 37,027 Leased Ontario, Canada Sales office and distribution center 102,057 Leased Randburg, South Africa Sales office and distribution center, as well as golf club assembly 25,060 Leased Yongin-shi, Korea Distribution center, golf ball customization and golf club assembly 174,982 Leased Product Testing and Fitting Centers (Golf Balls and Golf Clubs) Acushnet, Massachusetts East Coast product testing and fitting for golf balls and golf clubs 22 acres total, including 7,662 square foot building Owned Oceanside, California West Coast product testing and fitting for golf balls and golf clubs (Titleist Performance Institute) 30 acres total, including 20,539 square foot building Owned (1) Facility size represents square footage of the building, unless otherwise noted.
Location Type Facility Size (1) Leased/Owned Fairhaven, Massachusetts Headquarters and golf ball R&D 222,720 Owned Golf Balls North Dartmouth, Massachusetts Golf ball manufacturing 179,602 Owned New Bedford, Massachusetts Golf ball manufacturing 244,091 Owned Amphur Pluakdaeng Rayong, Thailand Golf ball manufacturing 230,003 Owned New Bedford, Massachusetts Golf ball customization and distribution center 438,007 Owned Fairhaven, Massachusetts Golf ball packaging 49,580 Owned New Bedford, Massachusetts Golf ball advanced engineering and ball cavity manufacturing 34,000 Owned Sugarland, Texas Golf ball recycling and distribution center 87,214 Leased Golf Clubs, Wedges and Putters Carlsbad, California Golf club assembly 165,485 Leased Carlsbad, California Tour testing and golf club R&D 50,000 Leased Oceanside, California Digital media studio 40,515 Leased San Marcos, California Putter research 19,200 Leased Encinitas, California Putter fitting and sales 3,754 Leased Tokyo, Japan Golf club assembly 45,274 Leased FootJoy Fuzhou, Fujian, China (40% owned joint venture) (2) Golf shoe manufacturing and distribution center 525,031 Building Owned/Land Leased Brockton, Massachusetts Golf shoe R&D 98,428 Leased Sriracha Chonburi, Thailand Golf glove manufacturing 112,847 Building Owned/Land Leased Sales Offices and Distribution Centers (used by multiple reportable segments) Fairhaven, Massachusetts East Coast customization and distribution center 185,370 Owned Vista, California West Coast distribution center and golf bag embroidery 102,319 Leased Lakeville, Massachusetts East Coast customization and distribution center 555,395 Leased Cambridgeshire, United Kingdom Sales office and distribution center, as well as golf club assembly and golf ball customization 156,326 Owned Helmond, The Netherlands Sales office and distribution center 69,965 Leased Victoria, Australia Sales office and distribution center, as well as golf club assembly 37,027 Leased Ontario, Canada Sales office and distribution center 102,057 Leased Randburg, South Africa Sales office and distribution center, as well as golf club assembly 25,060 Leased Yongin-shi, Korea Distribution center, golf ball customization and golf club assembly 174,982 Leased Product Testing and Fitting Centers (Golf Balls and Golf Clubs) Acushnet, Massachusetts East Coast product testing and fitting for golf balls and golf clubs 22 acres total, including multiple buildings that total 19,492 square feet Owned Oceanside, California West Coast product testing and fitting for golf balls and golf clubs (Titleist Performance Institute) 30 acres total, including multiple buildings that total 40,600 square feet Owned (1) Facility size represents square footage of the building, unless otherwise noted.
Added
(2) The joint venture ceased production at this facility in January 2025.
Added
FootJoy currently contracts to manufacture substantially all of its footwear at a third-party owned manufacturing facility in Long An Province, Vietnam. 39 Table of Contents We have additional sales offices and facilities in Colorado, Utah, New Zealand, Malaysia, Singapore, Hong Kong, Taiwan, Japan, Korea, Thailand, Scotland, Sweden, France, Germany and Switzerland.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeMaher holds a B.S. in Finance from Babson College. Sean Sullivan, 56, joined the Company and was appointed Executive Vice President and Chief Financial Officer in June 2023. Prior to joining the Company, Mr. Sullivan served as the Executive Vice President and Chief Financial Officer of SiriusXM Holdings, Inc., a position he held since October 2020.
Biggest changeSean Sullivan, 57, joined the Company and was appointed Executive Vice President and Chief Financial Officer in June 2023. Prior to joining the Company, Mr. Sullivan served as the Executive Vice President and Chief Financial Officer of SiriusXM Holdings, Inc., a position he held since October 2020. Prior to joining SiriusXM Holdings, Inc., Mr.
Duke also spent time earlier in his career working for Morgan Stanley’s Investment Banking Division and in general management positions with Reebok International Ltd. Mr. Duke holds a B.A. in Economics and History from Boston College and an M.B.A. from Duke University. Christopher Lindner, 55, joined the Company and was appointed President, FootJoy in 2016.
Duke also spent time earlier in his career working for Morgan Stanley’s Investment Banking Division and in general management positions with Reebok International Ltd. Mr. Duke holds a B.A. in Economics and History from Boston College and an M.B.A. from Duke University. Christopher Lindner, 56, joined the Company and was appointed President, FootJoy in 2016.
From October 2016 to June 2023, Mr. Sullivan served on the Company's Board of Directors. Mr. Sullivan holds an M.B.A. from Columbia Business School and a B.B.A. in Accounting from the University of Notre Dame. Mary Lou Bohn, 63, joined the Company in 1987 and was appointed President, Titleist Golf Balls in 2016. Prior to that, Ms.
From October 2016 to June 2023, Mr. Sullivan served on the Company’s board of directors. Mr. Sullivan holds an M.B.A. from Columbia Business School and a B.B.A. in Accounting from the University of Notre Dame. Mary Lou Bohn, 64, joined the Company in 1987 and was appointed President, Titleist Golf Balls in 2016. Prior to that, Ms.
Prior to that, Mr. Mohamed served as Senior Finance Executive of Media General, Inc. in 2015, as Vice President, Controller of LIN Media LLC from 2009 to 2014 and as Director, Finance Mergers and Acquisitions at Sensata Technologies, Inc. from 2007 to 2008. Mr. Mohamed holds a B.S. in Accounting from Georgetown University. 44 Table of Contents PART II
Prior to that, Mr. Mohamed served as Senior Finance Executive of Media General, Inc. in 2015, as Vice President, Controller of LIN Media LLC from 2009 to 2014 and as Director, Finance Mergers and Acquisitions at Sensata Technologies, Inc. from 2007 to 2008. Mr. Mohamed holds a B.S. in Accounting from Georgetown University. 42 Table of Contents PART II
Pelisek has held both Marketing and Field Sales positions with the Company and with Lynx Golf. Mr. Pelisek holds a B.S. in Engineering and an M.S. in Civil Engineering, both from the University of Maryland. John (Jay) Duke, Jr., 55, joined the Company and was appointed President, Titleist Golf Gear in 2014. Prior to joining the Company, Mr.
Pelisek has held both Marketing and Field Sales positions with the Company and with Lynx Golf. Mr. Pelisek holds a B.S. in Engineering and an M.S. in Civil Engineering, both from the University of Maryland. John (Jay) Duke, Jr., 56, joined the Company and was appointed President, Titleist Golf Gear in 2014. Prior to joining the Company, Mr.
Roland Giroux, 63, joined the Company in 2000 and was appointed Executive Vice President, Chief Legal Officer and Corporate Secretary in July 2021. Prior to that, Mr. Giroux held a number of positions with the Company, most recently as Vice President and Associate General Counsel beginning in 2017. Prior to joining the Company, Mr.
Roland Giroux, 64, joined the Company in 2000 and was appointed Executive Vice President, Chief Legal Officer and Corporate Secretary in July 2021. Prior to that, Mr. Giroux held a number of positions with the Company, most recently as Vice President and Associate General Counsel beginning in 2017. Prior to joining the Company, Mr.
Duke was Vice President and Global Franchise Leader for Hasbro - Transformers Global Brand from 2012-2014, President of Karhu Holdings BV from 2008-2012, and held senior general management and strategy positions with 43 Table of Contents Converse Inc. (a subsidiary of Nike, Inc.). Mr.
Duke was Vice President and Global Franchise Leader for Hasbro - Transformers Global Brand from 2012-2014, President of Karhu Holdings BV from 2008-2012, and held senior general management and strategy positions with 41 Table of Contents Converse Inc. (a subsidiary of Nike, Inc.). Mr.
Nicholas Mohamed , 48, joined the Company in April 2023 and was appointed Vice President, Controller and Principal Accounting Officer in June 2023. Prior to joining the Company, Mr. Mohamed served as the Global Controller of Converse, Inc. from February 2021 to April 2023. From 2016 through February 2021, Mr. Mohamed was Converse, Inc.'s Global Accounting Director.
Nicholas Mohamed , 49, joined the Company in April 2023 and was appointed Vice President, Controller and Principal Accounting Officer in June 2023. Prior to joining the Company, Mr. Mohamed served as the Global Controller of Converse, Inc. from February 2021 to April 2023. From 2016 through February 2021, Mr. Mohamed was Converse, Inc.’s Global Accounting Director.
Steven Pelisek, 63, joined the Company in 1993 and was appointed President, Titleist Golf Clubs in 2016. Prior to that, Mr. Pelisek held positions at the Company of General Manager, Titleist Golf Clubs and Vice President, Club Sales for both the Titleist and Cobra golf club brands. In addition, Mr.
Steven Pelisek, 64, joined the Company in 1993 and was appointed President, Titleist Golf Clubs in 2016. Prior to that, Mr. Pelisek held positions at the Company of General Manager, Titleist Golf Clubs and Vice President, Club Sales for both the Titleist and Cobra golf club brands. In addition, Mr.
Brendan Reidy, 46, joined the Company in January 2019 and was appointed Executive Vice President, Chief People Officer in February 2021. Prior to that, Mr. Reidy was the Company’s Senior Vice President, Chief Human Resources Officer from January 2019 to February 2021.
Brendan Reidy, 47, joined the Company in January 2019 and was appointed Executive Vice President, Chief People Officer in February 2021. Prior to that, Mr. Reidy was the Company’s Senior Vice President, Chief Human Resources Officer from January 2019 to February 2021.
Roger Czuchra, 54, joined the Company in November 2022 and was appointed Executive Vice President, Chief Technology and Digital Officer. Prior to joining the Company, Mr.
Roger Czuchra, 55, joined the Company in November 2022 and was appointed Executive Vice President, Chief Technology and Digital Officer. Prior to joining the Company, Mr.
Name Age Position David Maher 56 President and Chief Executive Officer Sean Sullivan 56 Executive Vice President and Chief Financial Officer Mary Lou Bohn 63 President, Titleist Golf Balls Steven Pelisek 63 President, Titleist Golf Clubs John (Jay) Duke, Jr. 55 President, Titleist Golf Gear Christopher Lindner 55 President, FootJoy Roland Giroux 63 Executive Vice President, Chief Legal Officer and Corporate Secretary Brendan Reidy 46 Executive Vice President, Chief People Officer Roger Czuchra 54 Executive Vice President, Chief Technology and Digital Officer Nicholas Mohamed 48 Vice President, Corporate Controller and Principal Accounting Officer David Maher , 56, joined the Company in 1991 and was appointed President and Chief Executive Officer in January 2018.
Name Age Position David Maher 57 President and Chief Executive Officer Sean Sullivan 57 Executive Vice President and Chief Financial Officer Mary Lou Bohn 64 President, Titleist Golf Balls Steven Pelisek 64 President, Titleist Golf Clubs John (Jay) Duke, Jr. 56 President, Titleist Golf Gear Christopher Lindner 56 President, FootJoy Roland Giroux 64 Executive Vice President, Chief Legal Officer and Corporate Secretary Brendan Reidy 47 Executive Vice President, Chief People Officer Roger Czuchra 55 Executive Vice President, Chief Technology and Digital Officer Nicholas Mohamed 49 Vice President, Corporate Controller and Principal Accounting Officer David Maher , 57, joined the Company in 1991 and was appointed President and Chief Executive Officer in January 2018.
ITEM 4. MINE SAFETY DISCLOSURES Not applicable. INFORMATION ABOUT OUR EXECUTIVE OFFICERS Executive Officers Set forth below is information concerning the Company’s executive officers as of February 29, 2024.
ITEM 4. MINE SAFETY DISCLOSURES Not applicable. INFORMATION ABOUT OUR EXECUTIVE OFFICERS Executive Officers Set forth below is information concerning the Company’s executive officers as of February 27, 2025.
Maher spent several years in Northern California as a Titleist Sales Representative and Northwest Regional Sales Manager, and previously gained valuable experience in the Company’s professional development program, working at the Company’s golf ball operations in Massachusetts, the FootJoy factory in Brockton, Massachusetts and in the Company’s Southern California golf club operations. Mr.
Maher spent several years in Northern California as a Titleist Sales Representative and Northwest Regional Director, and previously gained valuable experience in the Company’s professional development program, working in golf ball operations in Massachusetts, the FootJoy factory in Brockton, Massachusetts and in the Company’s Southern California golf club operations. Mr. Maher holds a B.S. in Finance from Babson College.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

12 edited+1 added−4 removed2 unchanged
Biggest changeThe following table provides information relating to the Company’s purchase of common stock for the fourth quarter of 2023: Period Total number of shares purchased Average price paid per share Total number of shares purchased as part of publicly announced plans or programs Approximate dollar value of shares that may yet be purchased under the plans or programs (2) (in thousands) October 1, 2023 - October 31, 2023 393,594 $ 52.45 393,594 $ 181,742 November 1, 2023 - November 30, 2023 (1) 1,889,994 54.83 1,889,994 78,107 December 1, 2023 - December 31, 2023 52,000 60.19 52,000 74,977 Total 2,335,588 $ 54.55 2,335,588 _____________________________________________________________________________ (1) In connection with our share repurchase program, we have entered into certain share repurchase agreements with Magnus Holdings Co., Ltd.
Biggest changeThe following table provides information relating to the Company’s purchase of common stock for the fourth quarter of 2024: Period Total number of shares purchased Average price paid per share Total number of shares purchased as part of publicly announced plans or programs Approximate dollar value of shares that may yet be purchased under the plans or programs (1) (in thousands) October 1, 2024 - October 31, 2024 172,500 $ 62.40 172,500 $ 221,391 November 1, 2024 - November 30, 2024 134,337 69.28 134,337 212,084 December 1, 2024 - December 31, 2024 136,030 72.83 136,030 202,177 Total 442,867 $ 67.69 442,867 _____________________________________________________________________________ (1) On June 14, 2024, in connection with our share repurchase program, we entered into an agreement with Magnus to purchase from Magnus an equal amount of our common stock as we purchase on the open market over the period of time from July 1, 2024 through December 31, 2024, up to an aggregate of $62.5 million, at the same weighted average per share price.
The graph assumes that $100 was invested on December 31, 2018 in each of our common stock, the S&P 500 Index, and the S&P 500 Consumer Durables & Apparel Index and that all dividends were reinvested.
The graph assumes that $100 was invested on December 31, 2019 in each of our common stock, the S&P 500 Index, and the S&P 500 Consumer Durables & Apparel Index and that all dividends were reinvested.
Performance Graph Set forth below is a graph comparing the cumulative total stockholder return on our common stock against the cumulative total return of the S&P 500 Index and the S&P 500 Consumer Durables & Apparel Index for the period commencing December 31, 2018 through December 31, 2023. Index data was furnished by FactSet.
Performance Graph Set forth below is a graph comparing the cumulative total stockholder return on our common stock against the cumulative total return of the S&P 500 Index and the S&P 500 Consumer Durables & Apparel Index for the period commencing December 31, 2019 through December 31, 2024. Index data was furnished by FactSet.
See “Notes to Consolidated Financial Statements-Note 16-Common Stock,” Item 8 of Part II, included elsewhere in this report, for a description of our Magnus share repurchase agreements.
See “Notes to Consolidated Financial Statements – Note 16 – Common Stock,” Item 8 of Part II to this report, for a description of our Magnus share repurchase agreements.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our common stock has been listed on the New York Stock Exchange (the “NYSE”) under the symbol “GOLF” since October 28, 2016.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our common stock has been listed on the NYSE under the symbol “GOLF” since October 28, 2016.
Dividend Policy We paid a total of $52.5 million, $52.2 million and $49.2 million in dividends on our common stock during the years ended December 31, 2023, 2022 and 2021, respectively.
Dividend Policy We paid a total of $54.3 million, $52.5 million and $52.2 million in dividends on our common stock during the years ended December 31, 2024, 2023 and 2022, respectively.
The repurchase program will remain in effect until completed or until terminated by the Board of Directors.
Our share repurchase program will remain in effect until completed or until terminated by our board of directors.
(2 ) On February 15, 2024, the Board of Directors authorized us to repurchase up to an additional $300.0 million of our issued and outstanding common stock, bringing the total authorization up to $1.0 billion since the share repurchase program was established in 2018.
On February 13, 2025, our board of directors authorized us to repurchase up to an additional $250.0 million of our issued and outstanding common stock under our share repurchase program, bringing the total authorization up to $1.25 billion since the program was established in June 2018.
On February 23, 2024, the last reported sales price of our common stock on the NYSE was $69.46 per share and there were ten record holders of our common stock.
On February 21, 2025, the last reported sales price of our common stock on the NYSE was 65.82 per share and there were ten record holders of our common stock.
For a description of the restrictions on our ability to pay dividends under our debt agreements, see “Item 7. - Management’s Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources” and “Notes to Consolidated Financial Statements – Note 11 – Debt and Financing Arrangements.” 45 Table of Contents Issuer Purchases of Equity Securities On June 7, 2018, our Board of Directors authorized us to repurchase up to an aggregate of $20.0 million of our issued and outstanding common stock from time to time.
For a description of the restrictions on our ability to pay dividends under our debt agreements, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources,” Item 7 of Part II to this report, and “Notes to Consolidated Financial Statements – Note 11 – Debt and Financing Arrangements,” Item 8 of Part II to this report. 43 Table of Contents Issuer Purchases of Equity Securities On February 15, 2024, our board of directors authorized us to repurchase up to an additional $300.0 million of our issued and outstanding common stock under our previously disclosed share repurchase program.
("Magnus"), a wholly-owned subsidiary of Fila Holdings Corp., to purchase from Magnus an equal amount of our common stock as we purchase on the open market at the same weighted average per share price.
In addition, on December 17, 2024, we entered into a new agreement with Magnus to purchase from Magnus an equal amount of our common stock as we purchase on the open market over the period of time from January 2, 2025 through June 30, 2025, up to an aggregate of $62.5 million, at the same weighted average per share price.
Comparison of Cumulative Total Returns 31-Dec-18 31-Dec-19 31-Dec-20 31-Dec-21 31-Dec-22 31-Dec-23 Acushnet Holdings Corp. $100.00 $157.83 $200.73 $266.35 $216.51 $326.94 S&P 500 $100.00 $132.62 $157.02 $202.09 $165.49 $209.00 S&P 500 Consumer Durables & Apparel $100.00 $135.42 $162.76 $199.15 $140.69 $166.87 Recent Sales of Unregistered Securities None.
Comparison of Cumulative Total Returns 31-Dec-19 31-Dec-20 31-Dec-21 31-Dec-22 31-Dec-23 31-Dec-24 Acushnet Holdings Corp. $100.00 $127.18 $168.75 $137.18 $207.15 $236.09 S&P 500 $100.00 $118.40 $152.39 $124.79 $157.59 $197.02 S&P 500 Consumer Durables & Apparel $100.00 $120.19 $147.06 $103.89 $123.22 $115.95 Recent Sales of Unregistered Securities None.
Removed
On February 14, 2019, our Board of Directors authorized us to repurchase up to an additional $30.0 million of our issued and outstanding common stock. On February 11, 2020, our Board of Directors authorized us to repurchase up to an additional $50.0 million of our issued and outstanding common stock.
Added
In relation to this agreement, the Company recorded a share repurchase liability of $62.5 million to purchase an additional 935,907 shares of common stock from Magnus as of December 31, 2024.
Removed
On October 20, 2021, our Board of Directors authorized us to repurchase up to an additional $100.0 million of our issued and outstanding common stock. On April 28, 2022, our Board of Directors authorized us to repurchase up to an additional $150.0 million of our issued and outstanding common stock.
Removed
On July 26, 2022, our Board of Directors authorized us to repurchase up to an additional $100.0 million of our issued and outstanding common stock. On February 9, 2023, the Board of Directors authorized us to repurchase up to an additional $250.0 million of our issued and outstanding common stock, bringing the total authorization up to $700.0 million.
Removed
In relation to certain of these agreements, we purchased 1,824,994 shares of our common stock from Magnus for an aggregate of $100.0 million on November 3, 2023, in satisfaction of our obligations under our share repurchase agreements with Magnus.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

105 edited+48 added−18 removed47 unchanged
Biggest change(2) The year ended December 31, 2021 includes pension settlement costs of $2.1 million related to lump-sum distributions to participants in our defined benefit plans as a result of the voluntary retirement program as part of management’s approved restructuring program, as well as $2.4 million of severance and other costs associated with management's program to refine our business model and improve operational efficiencies. 52 Table of Contents Year Ended December 31, 2023 Compared to the Year Ended December 31, 2022 Net sales by reportable segment is summarized as follows: Year ended Constant Currency December 31, Increase/(Decrease) Increase/(Decrease) (in millions) 2023 2022 $ change % change $ change % change Titleist golf balls $ 761.7 $ 678.8 $ 82.9 12.2 % $ 91.3 13.5 % Titleist golf clubs 658.6 609.6 49.0 8.0 % 58.2 9.5 % Titleist golf gear 216.2 204.9 11.3 5.5 % 14.3 7.0 % FootJoy golf wear 596.4 618.0 (21.6) (3.5) % (12.7) (2.1) % Net sales information by region is summarized as follows: Year ended Constant Currency December 31, Increase/(Decrease) Increase/(Decrease) (in millions) 2023 2022 $ change % change $ change % change United States $ 1,350.0 $ 1,227.8 $ 122.2 10.0 % $ 122.2 10.0 % EMEA (1) 314.7 321.5 (6.8) (2.1) % (4.6) (1.4) % Japan 149.4 161.0 (11.6) (7.2) % 0.2 0.1 % Korea 301.8 312.7 (10.9) (3.5) % (5.2) (1.7) % Rest of World 266.1 247.3 18.8 7.6 % 29.0 11.7 % Total net sales $ 2,382.0 $ 2,270.3 $ 111.7 4.9 % $ 141.6 6.2 % _______________________________________________________________________________ (1) Europe, the Middle East and Africa ("EMEA") Segment operating income by reportable segment is summarized as follows: Year ended December 31, Increase/(Decrease) (in millions) 2023 2022 $ change % change Titleist golf balls $ 144.3 $ 112.7 $ 31.6 28.0 % Titleist golf clubs 106.5 100.9 5.6 5.6 % Titleist golf gear 21.2 11.7 9.5 81.2 % FootJoy golf wear 16.1 37.0 (20.9) (56.5) % 53 Table of Contents Net Sales For the year ended December 31, 2023, net sales increased 4.9%, or 6.2% on a constant currency basis, compared to the year ended December 31, 2022.
Biggest changeHigher operating expenses were primarily a result of an increase of $1.3 million in selling expense, as well as increases of $1.2 million in both administrative expense and advertising and promotional expenses. 53 Table of Contents Year Ended December 31, 2023 Compared to the Year Ended December 31, 2022 Net sales by reportable segment is summarized as follows: Year ended Constant Currency December 31, Increase/(Decrease) Increase/(Decrease) (in millions) 2023 2022 $ change % change $ change % change Golf balls $ 761.7 $ 678.8 $ 82.9 12.2 % $ 91.3 13.5 % Golf clubs 658.7 609.6 49.1 8.1 % 58.2 9.5 % Titleist golf equipment 1,420.4 1,288.4 132.0 10.2 % 149.5 11.6 % FootJoy golf wear 590.0 611.0 (21.0) (3.4) % (12.2) (2.0) % Golf gear 222.6 211.9 10.7 5.0 % 13.7 6.5 % Net sales information by region is summarized as follows: Year ended Constant Currency December 31, Increase/(Decrease) Increase/(Decrease) (in millions) 2023 2022 $ change % change $ change % change United States $ 1,350.0 $ 1,227.8 $ 122.2 10.0 % $ 122.2 10.0 % EMEA 314.7 321.5 (6.8) (2.1) % (4.6) (1.4) % Japan 149.4 161.0 (11.6) (7.2) % 0.2 0.1 % Korea 301.8 312.7 (10.9) (3.5) % (5.2) (1.7) % Rest of World 266.1 247.3 18.8 7.6 % 29.0 11.7 % Total net sales $ 2,382.0 $ 2,270.3 $ 111.7 4.9 % $ 141.6 6.2 % Segment operating income by reportable segment is summarized as follows: Year ended December 31, Increase/(Decrease) (in millions) 2023 2022 $ change % change Titleist golf equipment $ 250.8 $ 213.7 $ 37.1 17.4 % FootJoy golf wear 17.8 39.7 (21.9) (55.2) % Golf gear 19.5 9.0 10.5 116.7 % Net Sales For the year ended December 31, 2023, net sales increased 4.9%, or 6.2% on a constant currency basis, compared to the year ended December 31, 2022.
We primarily use Adjusted EBITDA on a consolidated basis to evaluate the effectiveness of our business strategies, assess our consolidated operating performance and make decisions regarding pricing of our products, go to market execution and costs to incur across our business.
We primarily use Adjusted EBITDA on a consolidated basis to evaluate the effectiveness of our business strategies, assess our consolidated operating performance and make decisions regarding the pricing of our products, go-to-market execution and costs to incur across our business.
Liquidity and Capital Resources Our primary cash needs relate to working capital, capital expenditures, servicing our debt, paying dividends, repurchasing shares of our common stock and pension contributions. Additionally, f rom time to time, we may make strategic acquisitions and investments to complement our products, technologies or businesses, which could impact our liquidity needs.
Liquidity and Capital Resources Our primary cash needs relate to working capital, repurchasing shares of our common stock, capital expenditures, paying dividends, servicing our debt and pension contributions. Additionally, f rom time to time, we may make strategic acquisitions and investments to complement our products, technologies or businesses, which could impact our liquidity needs.
Adjusted EBITDA represents net income (loss) attributable to Acushnet Holdings Corp. plus interest expense, net, income tax expense (benefit), depreciation and amortization and other items defined in our agreement, including: share-based compensation expense; restructuring and transformation costs; certain transaction fees; extraordinary, unusual or non-recurring losses or charges; indemnification expense (income); certain pension settlement costs; certain other non-cash (gains) losses, net and the net income (loss) relating to noncontrolling interests.
Adjusted EBITDA represents net income (loss) attributable to Acushnet Holdings Corp. plus interest expense, net, income tax expense (benefit), depreciation and amortization and other items defined in our credit agreement, including: share-based compensation expense; restructuring and transformation costs; certain transaction fees; extraordinary, unusual or non-recurring losses or charges; indemnification expense (income); certain pension settlement costs; certain other non-cash (gains) losses, net and the net income (loss) relating to noncontrolling interests.
We believe our differentiated focus on performance and quality excellence, enduring connections with dedicated golfers, and favorable and market-differentiating mix of consumable and durable products have been the key drivers of our financial performance. Basis of Presentation The accompanying results have been prepared in conformity with accounting principles generally accepted in the United States (“U.S.
We believe our differentiated focus on performance and quality excellence, enduring connections with dedicated golfers and favorable and market-differentiating mix of consumable and durable products have been the key drivers of our financial performance. Basis of Presentation The accompanying results have been prepared in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”).
Constant currency information allows us to estimate what our sales performance would have been without changes in foreign currency exchange rates. This information is calculated by taking the current period local currency sales and translating them into U.S. dollars based upon the foreign currency exchange rates for the applicable comparable prior period.
Constant currency information allows us to estimate what our sales performance would have been without changes in foreign currency exchange rates. This information is calculated by taking the current period local currency net sales and translating them into U.S. dollars based upon the foreign currency exchange rates for the applicable comparable prior period.
We present Adjusted EBITDA as a supplemental measure of our operating performance because it excludes the impact of certain items that we do not consider indicative of our ongoing operating performance. We define Adjusted EBITDA in a manner consistent with the term “Consolidated EBITDA” as it is defined in our credit agreement.
We present Adjusted EBITDA as a supplemental measure of our operating performance because it excludes the impact of certain items that we do not consider indicative of our ongoing operating performance. We define “Adjusted EBITDA” in a manner consistent with the term “Consolidated EBITDA” as it is defined in our credit agreement.
Gross profit decreased primarily as a result of the sales volume decrease and unfavorable manufacturing absorption and increased promotional activity in footwear, partially offset by increased sales volumes in apparel and lower inbound freight costs. Operating expenses were largely flat as increased advertising and promotional expenses were offset by lower selling expenses.
Gross profit decreased primarily as a result of the sales volume decrease, unfavorable manufacturing overhead absorption and increased promotional activity in footwear, partially offset by increased sales volumes in apparel and lower inbound freight costs. Operating expenses were largely flat as increased advertising and promotional expenses were offset by lower selling expenses.
Titleist Golf Gear and FootJoy Golf Wear Segments Our Titleist golf gear and FootJoy golf wear businesses are not subject to the same degree of cyclical fluctuation as our golf ball and golf club businesses as new product offerings and styles are generally introduced each year and at different times during the year.
FootJoy Golf Wear and Golf Gear Segments Our FootJoy golf wear and Golf gear businesses are not subject to the same degree of cyclical fluctuation as our golf ball and golf club businesses as new product offerings and styles are generally introduced each year and at different times during the year.
The increase in FootJoy golf wear was primarily driven by higher sales volumes of apparel and higher average selling prices of apparel and footwear, largely offset by lower sales volumes of footwear. The increase in Titleist golf gear was primarily driven by higher sales volumes of golf bags and higher average selling prices in travel.
The increase in FootJoy golf wear was primarily driven by higher sales volumes of apparel and higher average selling prices of apparel and footwear, largely offset by lower sales volumes of footwear. The increase in Golf gear was primarily driven by higher sales volumes of golf bags and higher average selling prices in travel.
Unfavorable weather conditions in our major markets, such as a particularly long winter, a cold and wet spring, or an extremely hot summer, would reduce the number of playable days and rounds played in a given year, which would result in a decrease in the amount spent by golfers and golf retailers on our products, particularly with respect to consumable products such as golf balls and golf gloves.
Unfavorable weather conditions in our major markets, such as a particularly long winter, a cold and wet spring, or an extremely hot summer, would reduce the number of playable days and rounds played in a given year and decrease the amount spent by golfers and golf retailers on our products, particularly with respect to consumable products such as golf balls and golf gloves.
Recently Issued Accounting Standards We have reviewed all recently issued accounting standards and have determined that, other than as disclosed in “Notes to Consolidated Financial Statements – Note 2 – Summary of Significant Accounting Policies”, Item 8 of Part II, included elsewhere in this report, such accounting standards will not have a significant impact on our consolidated financial statements or otherwise do not apply to our operations. 60 Table of Contents
Recently Issued Accounting Standards We have reviewed all recently issued accounting standards and have determined that, other than as disclosed in “Notes to Consolidated Financial Statements – Note 2 – Summary of Significant Accounting Policies”, Item 8 of Part II to this report, such accounting standards will not have a significant impact on our consolidated financial statements or otherwise do not apply to our operations. 60 Table of Contents
In general, however, because of this seasonality, a larger portion of our sales and profitability generally occurs during the first half of the year. 48 Table of Contents Cyclicality Our sales can also be affected by the launch timing of new products. Product introductions generally stimulate sales as the golf retail channel takes on inventory of new products.
In general, however, because of this seasonality, a larger portion of our sales and profitability generally occurs during the first half of the year. 46 Table of Contents Cyclicality Our sales can also be affected by the launch timing of new products. Product introductions generally stimulate sales as the golf retail channel takes on inventory of new products.
Nonetheless, we believe that cash expected to be provided by operating activities, together with our cash on hand and the availability of borrowings under our revolving credit facility and our local credit facilities (subject to customary borrowing conditions) will be sufficient to meet our liquidity requirements for at least the next 12 months.
Nonetheless, we believe that cash expected to be provided by operating activities, together with our cash on hand and the availability of borrowings under our multi-currency revolving credit facility and our local credit facilities (subject to customary borrowing conditions) will be sufficient to meet our liquidity requirements for at least the next 12 months.
For new golf ball models, sales occur at a higher rate in the year of the initial launch than in the second year. Given the Pro V1 franchise is our highest volume and our highest priced product in this product category, we typically have higher net sales in our Titleist golf ball segment in odd-numbered years.
For new golf ball models, sales occur at a higher rate in the year of the initial launch than in the second year. Given the Pro V1 franchise is our highest volume and our highest priced product in this product category, we typically have higher net sales of Titleist golf balls in odd-numbered years.
This increase in gross profit was primarily due to the higher sales volumes and higher average selling prices discussed above, lower inbound freight costs across all reportable segments and lower royalty expense in Titleist golf clubs. These increases were partially offset by the decline in FootJoy golf wear sales volumes discussed above.
This increase in gross profit was primarily due to the higher sales volumes and higher average selling prices discussed above, lower inbound freight costs across all reportable segments and lower royalty expense in Titleist golf equipment. These increases were partially offset by the decline in FootJoy golf wear sales volumes discussed above.
Product Life Cycles Titleist Golf Balls Segment We generally launch new Titleist golf ball models on a two-year cycle. In general, in odd-numbered years, we launch our premium performance models, Pro V1 and Pro V1x, in the first quarter and in even-numbered years, we launch our premium performance AVX model and most performance models in the first and second quarters.
Product Life Cycles Titleist Golf Equipment Segment We generally launch new Titleist golf ball models on a two-year cycle. In general, in odd-numbered years, we launch our premium performance models, Pro V1 and Pro V1x, in the first quarter and in even-numbered years, we launch our premium performance AVX model and most performance models in the first and second quarters.
Titleist Golf Clubs Segment We generally launch new Titleist golf club models on a two‑year cycle using the following product launch cycle. At present, we anticipate continuing to use this product launch cycle going forward because we believe it aligns our launches with the purchase habits of dedicated golfers.
We generally launch new Titleist golf club models on a two‑year cycle using the following product launch cycle. At present, we anticipate continuing to use this product launch cycle going forward because we believe it aligns our launches with the purchase habits of dedicated golfers.
We expect to rely on cash flows from operations and borrowings under our revolving credit facility and local credit facilities as our primary sources of liquidity. Our liquidity is impacted by our level of working capital, which is cyclical as a result of the general seasonality of our business.
We expect to rely on cash flows from operations and borrowings under our multi-currency revolving credit facility and local credit facilities as our primary sources of liquidity. Our liquidity is impacted by our level of working capital, which is cyclical as a result of the general seasonality of our business.
Off‑Balance Sheet Arrangements As of December 31, 2023, other than as discussed above, we did not have any off-balance sheet arrangements that have, or are reasonably likely to have, a current or future effect on our financial condition, results of operations, liquidity, capital expenditures or capital resources.
Off‑Balance Sheet Arrangements As of December 31, 2024, other than as discussed above, we did not have any off-balance sheet arrangements that have, or are reasonably likely to have, a current or future effect on our financial condition, results of operations, liquidity, capital expenditures or capital resources.
As of December 31, 2023, we had a valuation allowance on certain net operating loss and tax credit carryforwards based on our assessment that it is more likely than not that the deferred tax assets will not be recognized.
As of December 31, 2024, we had a valuation allowance on certain net operating loss and tax credit carryforwards based on our assessment that it is more likely than not that the deferred tax assets will not be recognized.
In Korea, the decrease was due to lower sales volumes of products that are not allocated to one of our four reportable segments and lower sales volumes in FootJoy golf wear, partially offset by net sales increases in all other reportable segments.
In Korea, the decrease was due to lower sales volumes of products that are not allocated to one of our three reportable segments and lower sales volumes in FootJoy golf wear, partially offset by net sales increases in all other reportable segments.
In EMEA, the decrease was due to lower sales volumes in FootJoy golf wear and lower sales volumes of products that are not allocated to one of our four reportable segments, partially offset by increases in all other reportable segments.
In EMEA, the decrease was due to lower sales volumes in FootJoy golf wear and lower sales volumes of products that are not allocated to one of our three reportable segments, partially offset by increases in all other reportable segments.
As a result of our active approach to currency hedging, we are able to take a longer term view and more flexible approach towards pricing our products and making cost‑related decisions.
As a result of our active approach to currency hedging, we are able to take a more long-term view and more flexible approach towards pricing our products and making cost‑related decisions.
The remaining change in gross profit was due to lower sales volumes of products not allocated to one of our four reportable segments. The increase in gross margin was primarily due to the lower inbound freight costs.
The remaining change in gross profit was due to lower sales volumes of products not allocated to one of our three reportable segments. The increase in gross margin was primarily due to the lower inbound freight costs.
It should not be considered an alternative to any measure of performance derived in accordance with U.S. GAAP. In addition, Adjusted EBITDA margin should not be construed as an inference that our future results will be unaffected by unusual or non‑recurring items, or affected by similar non‑recurring items.
It should not be considered an alternative to any measure of performance derived in accordance with U.S. GAAP. In addition, Adjusted EBITDA margin should not be construed as an inference that our future results will be unaffected by unusual or nonrecurring items, or affected by similar nonrecurring items.
As a result of this product launch cycle, we generally expect to have higher net sales in our Titleist golf clubs segment in even‑numbered years.
As a result of this product launch cycle, we generally expect to have higher net sales of Titleist golf clubs in even‑numbered years.
We have repatriated, and intend to repatriate, funds to the United States from time to time to satisfy domestic liquidity needs arising in the ordinary course of business. Macroeconomic factors could impact our results of operations in ways we cannot currently predict.
We have repatriated, and intend to repatriate, funds to the United States from time to time to satisfy domestic liquidity needs arising in the ordinary course of business. 56 Table of Contents Macroeconomic factors could impact our results of operations in ways we cannot currently predict.
We present Adjusted EBITDA margin as a supplemental measure of our operating performance because it excludes the impact of certain items that we do not consider indicative of our ongoing operating performance. 50 Table of Contents Adjusted EBITDA margin is not a measurement of financial performance under U.S. GAAP.
We present Adjusted EBITDA margin as a supplemental measure of our operating performance because it excludes the impact of certain items that we do not consider indicative of our ongoing operating performance. Adjusted EBITDA margin is not a measurement of financial performance under U.S. GAAP.
Further, we also believe that the percentage of women golfers will continue to grow, as a higher percentage of new golfers in recent years have been women.
We believe that the percentage of women golfers will continue to grow, as a higher percentage of new golfers in recent years have been women.
Since a significant percentage of our net sales are generated outside of the United States, we use net sales on a constant currency basis to evaluate the sales performance of our business in period over period comparisons and for forecasting our business going forward.
Since a significant percentage of our net sales are generated outside of the United States, we use net sales on a constant currency basis to evaluate the sales performance of our business in period over period comparisons and to forecast our business going forward.
This increase was primarily due to an increase of $19.6 million in advertising and promotional expenses, an increase of $20.0 million in selling expense, $10.4 million of costs related to the optimization of our distribution and custom fulfillment capabilities, as well as an increase of $4.1 million in administrative expense and includes the favorable impact of changes in foreign currency exchange rates.
This increase was primarily due to an increase of $19.6 million in advertising and promotional expenses, an increase of $18.1 million in selling expense, $10.3 million of costs related to the optimization of our distribution and custom fulfillment capabilities, as well as an increase of $4.1 million in administrative expense and includes the favorable impact of changes in foreign currency exchange rates.
FootJoy Golf Wear Segment Net sales in our FootJoy golf wear segment decreased 3.5%, or 2.1% on a constant currency basis, for the year ended December 31, 2023 compared to the year ended December 31, 2022. The decrease was primarily due to a sales volume decrease in footwear partially offset by sales volume increase in apparel.
FootJoy Golf Wear Segment Net sales in our FootJoy golf wear segment decreased 3.4%, or 2.0% on a constant currency basis, for the year ended December 31, 2023 compared to the year ended December 31, 2022. The decrease was primarily due to a sales volume decrease in footwear partially offset by sales volume increase in apparel.
This seasonality, and therefore quarter to quarter fluctuations, can be affected by many factors, including weather conditions as discussed previously under “-Weather Conditions” and the timing of new product introductions as discussed below under “-Cyclicality.” This seasonality affects sales in each of our reportable segments differently.
This seasonality, and therefore quarter-to-quarter fluctuations, can be affected by many factors, including weather conditions as discussed previously under “ – Weather Conditions” and the timing of new product introductions as discussed below under “ – Cyclicality” and “ – Product Life Cycles . ” This seasonality affects sales in each of our reportable segments differently.
As of December 31, 2023, we were in compliance with all covenants under the Indenture. See "Notes to Consolidated Financial Statements- Note 11- Debt and Financing Arrangements," Item 8 of Part II included elsewhere in this report, for a description of our debt and financing arrangements.
As of December 31, 2024, we were in compliance with all covenants under the indenture. See "Notes to Consolidated Financial Statements- Note 11- Debt and Financing Arrangements," Item 8 of Part II to this report, for a description of our debt and financing arrangements.
As of December 31, 2023 and 2022, the cumulative valuation allowance against deferred tax assets was $34.0 million and $34.1 million, respectively. We are subject to income taxes in the U.S. and foreign jurisdictions. We account for uncertain tax positions using a more likely than not threshold for recognizing and resolving uncertain tax matters.
As of December 31, 2024 and 2023, the cumulative valuation allowance against deferred tax assets was $40.8 million and $34.0 million, respectively. We are subject to income taxes in the U.S. and foreign jurisdictions. We account for uncertain tax positions using a more likely than not threshold for recognizing and resolving uncertain tax matters.
Year Ended December 31, 2022 Compared to the Year Ended December 31, 2021 A review of our cash flow activities for the year ended December 31, 2022 as compared to the year ended December 31, 2021 can be found in "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Part II, Item 7 of the Annual Report for the year ended December 31, 2022, which was filed with the SEC on March 1, 2023, and is incorporated herein by reference.
Year Ended December 31, 2023 Compared to the Year Ended December 31, 2022 A review of our cash flow activities for the year ended December 31, 2023 as compared to the year ended December 31, 2022 can be found in "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Part II, Item 7 of the Annual Report for the year ended December 31, 2023, which was filed with the SEC on February 29, 2024, and is incorporated herein by reference.
The future amount of interest expense payments are expected to vary as discussed in "Interest Rate Risk," Item 7A of Part II, included elsewhere in this Annual Report.
The future amount of interest expense payments are expected to vary as discussed in "Interest Rate Risk," Item 7A of Part II, to this report.
For each of the three years ended December 31, 2023, approximately 85% of our cost of goods sold incurred by our subsidiaries in regions outside of the United States were denominated in U.S. dollars.
For each of the three years ended December 31, 2024, approximately 80% of our cost of goods sold incurred by our subsidiaries in regions outside of the United States were denominated in U.S. dollars.
Discretionary spending on golf and the golf products we sell is affected by consumer spending habits, as well as by many macroeconomic factors, including general business conditions, stock market prices and volatility, corporate spending, housing prices, the rate of inflation, interest rates, 47 Table of Contents the availability of consumer credit, taxes and consumer confidence in future economic conditions.
Discretionary spending on golf and the golf products we sell is affected by consumer spending habits and many macroeconomic factors, including general business conditions, stock market prices and volatility, corporate spending, housing prices, inflation, interest rates, the availability of consumer credit, taxes and consumer confidence in future economic conditions.
Our credit agreements also include customary events of default, the occurrence of which, following any applicable cure period, would permit the lenders to, among other things, declare the principal, accrued interest and other obligations to be immediately due and payable. As of December 31, 2023, we were in compliance with all covenants under our credit agreements.
This credit agreement also includes customary events of default, the occurrence of which, following any applicable cure period, would permit the lenders to, among other things, declare the principal, accrued interest and other obligations to be immediately due and payable. As of December 31, 2024, we were in compliance with all covenants under our credit agreement.
Beyond the gen‑x and baby boomer generation, promising developments in golf include the generational shift with millennial golfers making their marks at both professional and amateur levels and the increase in the number of juniors (ages 6-17) who play golf in recent years.
Beyond the gen x and baby boomer generations, promising developments in golf include the generational shift resulting from millennial and gen z golfers making their marks at both professional and amateur levels and the increase in the number of juniors (ages 6-17) who play golf in recent years.
Selling, General and Administrative Expenses Selling, general and administrative ("SG&A") expenses increased $54.7 million for the year ended December 31, 2023 compared to the year ended December 31, 2022.
Selling, General and Administrative Expenses SG&A expenses increased $52.8 million for the year ended December 31, 2023 compared to the year ended December 31, 2022.
Additionally, see "Risk Factors - Risks Related to Our Indebtedness", Item 1A of Part I included elsewhere in this report, for further discussion surrounding the risks and uncertainties related to our debt and financing arrangements. Dividends and Share Repurchase Program During the year ended December 31, 2023, we paid dividends on our common stock of $52.5 million to our shareholders.
Additionally, see "Risk Factors - Risks Related to Our Indebtedness", Item 1A of Part I to this report, for further discussion surrounding the risks and uncertainties related to our debt and financing arrangements. Dividends and Share Repurchase Program During the year ended December 31, 2024, we paid dividends on our common stock of $54.3 million to our shareholders.
The increase in Titleist golf clubs was primarily driven by higher sales volumes and higher average selling prices associated with the launches of our T-Series irons and Scotty Cameron Super Select putters, as well as higher sales volumes associated with the launch of our TSR hybrids, partially offset by lower sales volumes of second model year SM9 wedges.
The increase in Titleist golf equipment was primarily driven by higher sales volumes and higher average selling prices of our latest generation Pro V1 and Pro V1x golf balls, T-Series irons and Scotty Cameron Super Select putters, as well as higher sales volumes associated with the launch of our TSR hybrids, partially offset by lower sales volumes of second model year SM9 wedges.
Operating expenses increased primarily due to an increase of $2.1 million in selling expense. Intangible amortization expense increased due to the acquisition of trademarks in the first quarter of 2023.
Operating expenses increased primarily due to an increase of $3.4 million in selling expense and higher intangible amortization expense of $2.3 million due to the acquisition of trademarks in the first quarter of 2023.
Capital expenditures generally relate to investments to support the manufacturing and distribution of products, our go to market activities and continued investments in information technology and facilities to support our global strategic initiatives.
Capital expenditures generally relate to investments to support the manufacturing and distribution of products, our go to market activities, as well as investments in facilities to support our global strategic initiatives.
Golf participation among younger generations and certain socioeconomic and ethnic groups may not prove to be as popular as it is among older "millennials" and the current gen‑x and baby boomer generations. In such case, sales of our products could be negatively impacted.
Golf participation among younger generations and certain socioeconomic and ethnic groups may not prove to be as popular as it is among older generations. In such case, sales of our products could be negatively impacted.
Cash Flows from Financing Activities The increase in cash used in financing activities for the year ended December 31, 2023 as compared to the year ended December 31, 2022 was primarily driven by an increase in purchases of common stock, as well as a decrease in net proceeds from borrowings.
Cash Flows from Financing Activities The decrease in cash used in financing activities for the year ended December 31, 2024 as compared to the year ended December 31, 2023 was primarily driven by a decrease in purchases of common stock, offset in part by as a decrease in net proceeds from borrowings.
The golf industry has been principally driven by the age cohort of 30 years and above, primarily “gen‑xers,” “baby boomers” and, increasingly, "millennials" who have the time and money to engage in the sport.
The golf industry has been principally driven by the age cohort of 30 years and above, primarily “gen x-ers,” “baby boomers,” “millennials” and, increasingly, “gen z” who have the time and money to engage in the sport.
Decreasing the discount rate by 100 basis points would increase net periodic pension cost by less than $0.1 million and increase other postretirement benefit cost by approximately $0.3 million for the year ended December 31, 2023.
Decreasing the discount rate by 100 basis points would increase net periodic pension cost by approximately $0.8 million and increase other postretirement benefit cost by approximately $0.2 million for the year ended December 31, 2024.
Cash Flows from Investing Activities The decrease in cash used in investing activities for the year ended December 31, 2023 as compared to the year ended December 31, 2022 was primarily driven by cash paid during the year ended December 31, 2022 for the acquisitions of trademarks related to our putter business, as well as cash paid for business acquisitions during the same period.
Cash Flows from Investing Activities The decrease in cash used in investing activities for the year ended December 31, 2024 as compared to the year ended December 31, 2023 was primarily driven by cash paid for the acquisition of trademarks related to our gear business during the year ended December 31, 2023.
In each of the three years ended December 31, 2023, nearly one-half of our net sales and one-third of our total operating expenses (which amounts represent substantially all of the operating expenses incurred by our subsidiaries in regions outside of the United States) were denominated in foreign currencies.
In each of the three years ended December 31, 2024, over 40% of our net sales and approximately 30% of our total operating expenses (which amounts represent substantially all of the operating expenses incurred by our subsidiaries in regions outside of the United States) were denominated in foreign currencies.
Operating income in our FootJoy golf wear segment decreased $20.9 million, or 56.5% compared to the prior year period. The decrease in operating income resulted from lower gross profit of $20.3 million.
Operating income in our FootJoy golf wear segment decreased $21.9 million, or 55.2% compared to the prior year period. The decrease in operating income resulted from lower gross profit of $21.4 million.
During the first quarter of 2024, our Board of Directors declared a dividend of $0.215 per share of common stock to shareholders of record as of March 8, 2024, which is payable on March 22, 2024.
During the first quarter of 2025, our board of directors declared a dividend of $0.235 per share of common stock to shareholders of record as of March 7, 2025, which is payable on March 21, 2025.
Our projected benefit obligations related to our pension and other postretirement benefit plans are valued using a weighted‑average discount rates of 4.93% and 4.92%, respectively, for the year ended December 31, 2023.
Our projected benefit obligations related to our pension and other postretirement benefit plans are valued using weighted‑average discount rates of 5.57% and 5.54%, respectively, for the year ended December 31, 2024.
Foreign Currency Net sales generated in regions outside of the United States represented nearly half of our net sales in each of the three years ended December 31, 2023.
Foreign Currency Net sales generated in regions outside of the United States represented approximately 40-50% of our net sales in each of the three years ended December 31, 2024.
Segment operating income includes directly attributable expenses and certain shared costs of corporate administration that are allocated to the reportable segments, but excludes certain other costs, such as interest expense, net; restructuring costs; the non-service cost component of net periodic benefit cost; transaction fees; as well as other non-operating gains and losses that are not allocated to the reportable segments.
Segment operating income includes directly attributable expenses and certain shared costs of corporate administration that are allocated to the reportable segments, but excludes certain other costs, such as interest expense, net; restructuring costs; the non-service cost component of net periodic benefit cost; transaction fees; as well as other items that are not allocated to the reportable segments. 49 Table of Contents Results of Operations The following table sets forth, for the periods indicated, our results of operations.
As of December 31, 2023, our Board of Directors had authorized us to repurchase up to an aggregate of $700.0 million of our issued and outstanding common stock. On June 9, 2023, we entered into a new agreement with Magnus Holdings Co., Ltd.
As of December 31, 2024, our board of directors had authorized us to repurchase up to an aggregate of $1.0 billion of our issued and outstanding common stock. On March 14, 2024, we entered into an agreement with Magnus Holdings Co., Ltd.
Titleist Golf Clubs Segment Net sales in our Titleist golf clubs segment increased 8.0%, or 9.5% on a constant currency basis, for the year ended December 31, 2023 compared to the year ended December 31, 2022.
Segment Results Titleist Golf Equipment Segment Net sales in our Titleist golf equipment segment increased 6.2%, or 6.9% on a constant currency basis, for the year ended December 31, 2024 compared to the year ended December 31, 2023.
These inventory changes were driven by improvements in our supply chain and overall year-end inventory position. Working capital at any specific point in time is subject to many variables, including seasonality and inventory management, the timing of cash receipts and payments, vendor payment terms and fluctuations in foreign exchange rates.
Working capital at any specific point in time is subject to many variables, including seasonality and inventory management, the timing of cash receipts and payments, vendor payment terms and fluctuations in foreign exchange rates.
Capital expenditures in 2024 are expected to be approximately $85.0 million, although the actual amount may vary depending upon a variety of factors, including the timing of certain capital project implementations and receipt of capital purchases due to supply chain challenges.
Capital Expenditures and Other Investments During the year ended December 31, 2024, we invested $74.6 million for capital expenditures. Capital expenditures in 2025 are expected to be approximately $85.0 million, although actual amounts may vary depending upon a variety of factors, including the timing of certain capital project implementations and receipt of capital purchases due to supply chain challenges.
Research and Development R&D expenses increased $8.4 million for the year ended December 31, 2023 compared to the year ended December 31, 2022 primarily as a result of increases to support new product introductions and employee-related expenses. 54 Table of Contents Intangible Amortization Intangible amortization expense increased $6.3 million for the year ended December 31, 2023 compared to the year ended December 31, 2022 primarily as a result of the acquisition of trademarks related to our Titleist golf club and Titleist golf gear businesses in the fourth quarter of 2022 and the first quarter of 2023, respectively.
Intangible Amortization Intangible amortization expense increased $6.3 million for the year ended December 31, 2023 compared to the year ended December 31, 2022 primarily as a result of the acquisition of trademarks related to our Titleist golf club and Golf gear businesses in the fourth quarter of 2022 and the first quarter of 2023, respectively.
The increase in net sales in the United States was primarily as a result of increases of $62.0 million in Titleist golf balls, $41.0 million in Titleist golf clubs, $7.7 million in FootJoy golf wear and $7.3 million in Titleist golf gear.
The increase in net sales in the United States was primarily as a result of increases of $103.0 million in Titleist golf equipment, $8.2 million in FootJoy golf wear and $6.7 million in Golf gear.
See "Notes to Consolidated Financial Statements-Note 11-Debt and Financing Arrangements", "Note 4-Leases", "Note 22-Commitments and Contingencies" and "Note 14-Pension and Other Postretirement Benefits" in Item 8 of Part II of this 58 Table of Contents Annual Report for more information on the nature and timing of obligations for debt, leases, purchase obligations and pension and postretirement benefit plans, respectively.
Contractual Obligations Our principal contractual obligations and commitments consist of long term debt obligations, interest on debt obligations (including unused commitment fees related to our multi-currency revolving credit facility), operating and finance lease obligations, purchase obligations and pension and other postretirement benefit obligations. 58 Table of Contents See "Notes to Consolidated Financial Statements-Note 11-Debt and Financing Arrangements", "Note 4-Leases", "Note 22-Commitments and Contingencies" and "Note 14-Pension and Other Postretirement Benefits" in Item 8 of Part II of this Annual Report for more information on the nature and timing of obligations for debt, leases, purchase obligations and pension and postretirement benefit plans, respectively.
Net sales in regions outside of the United States decreased 1.0%, or increased 1.9% on a constant currency basis. Net sales increased in Rest of World, partially offset by decreases in Korea and EMEA, on a constant currency basis.
Net sales in regions outside of the United States decreased 1.0%, or increased 1.9% on a constant currency basis. Net sales increased in Rest of World, partially offset by decreases in Korea and EMEA, on a constant currency basis. The increase in Rest of World was due to net sales increases across all reportable segments, primarily in Titleist golf equipment.
In Japan, net sales were flat with increases in Titleist golf balls and Titleist golf gear offset by net sales decreases in Titleist golf clubs and FootJoy golf wear. Gross Profit Gross profit increased $73.3 million for the year ended December 31, 2023 compared to the year ended December 31, 2022.
In Japan, net sales were flat as 54 Table of Contents increases in Golf gear and Titleist golf equipment, were offset by a net sales decrease in FootJoy golf wear. Gross Profit Gross profit increased $71.3 million for the year ended December 31, 2023 compared to the year ended December 31, 2022.
The increase was primarily driven by higher sales volumes across all product categories, except gloves, and higher average selling prices across all product categories. Operating income in our Titleist golf gear segment increased $9.5 million, or 81.2%, compared to the prior year period.
The increase was primarily driven by higher sales volumes in travel product categories and higher average selling prices across all product categories, partially offset by lower sales volumes in golf bags. Operating income in our Golf gear segment increased $6.3 million, or 32.3%, compared to the prior year period.
Cash Flows The following table presents the major components of net cash flows from operating, investing and financing activities for the periods indicated: Year ended December 31, (in thousands) 2023 2022 2021 Cash flows from: Operating activities $ 371,827 $ (67,787) $ 314,122 Investing activities (101,486) (140,222) (37,597) Financing activities (264,725) (8,584) (140,326) Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash 915 (6,180) (5,974) Net increase (decrease) in cash, cash equivalents and restricted cash $ 6,531 $ (222,773) $ 130,225 Cash Flows from Operating Activities The increase in cash provided by operating activities for the year ended December 31, 2023 as compared to the year ended December 31, 2022 was primarily related to changes in working capital, largely driven by inventory.
Cash Flows The following table presents the major components of net cash flows from operating, investing and financing activities for the periods indicated: Year ended December 31, (in thousands) 2024 2023 2022 Cash flows from: Operating activities $ 245,108 $ 371,827 $ (67,787) Investing activities (74,624) (101,486) (140,222) Financing activities (179,683) (264,725) (8,584) Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash (3,177) 915 (6,180) Net (decrease) increase in cash, cash equivalents and restricted cash $ (12,376) $ 6,531 $ (222,773) Cash Flows from Operating Activities The decrease in cash provided by operating activities for the year ended December 31, 2024 as compared to the year ended December 31, 2023 was primarily related to changes in working capital, as well as a decrease in deferred income tax expense.
Income Tax Expense Income tax expense decreased $11.4 million for the year ended December 31, 2023 compared to the year ended December 31, 2022. Our effective tax rate ("ETR") was 17.8% for the year ended December 31, 2023 compared to 20.9% for the year ended December 31, 2022.
Income Tax Expense Income tax expense decreased $11.4 million for the year ended December 31, 2023 compared to the year ended December 31, 2022. Our ETR was 17.8% for the year ended December 31, 2023 compared to 20.9% for the year ended December 31, 2022. The decrease in ETR was primarily driven by changes in our jurisdictional mix of earnings.
The increase in operating income resulted from higher gross profit of $52.7 million, partially offset by higher operating expenses of $20.8 million. The increase in gross profit was primarily driven by higher sales volumes and higher average selling prices as discussed above and lower inbound freight costs.
The increase in gross profit was primarily driven by higher sales volumes and higher average selling prices as discussed above, lower inbound freight costs and lower royalty expenses.
Additionally, our net periodic benefit cost related to our pension plans is calculated using an expected return on plan assets of 3.91% for the year ended December 31, 2023. Decreasing the expected return on plan assets by 100 basis points would increase net periodic pension benefit cost by approximately $2.0 million for the year ended December 31, 2023.
Additionally, our net periodic benefit cost related to our pension plans is calculated using an expected return on plan assets of 3.75% for the year ended December 31, 2024.
Our ability to generate sufficient cash flows from operations is, however, subject to many risks and uncertainties, including current and future economic trends and conditions, demand for our products, availability and cost of our raw materials and components, foreign currency exchange rates and other risks and uncertainties applicable to our business, as described in "Risk Factors," Item 1A of Part I included elsewhere in this report. 56 Table of Contents Debt and Financing Arrangements As of December 31, 2023, we had $616.7 million of availability under our multi-currency revolving credit facility after giving effect to $8.1 million of outstanding letters of credit.
Our ability to generate sufficient cash flows from operations is, however, subject to many risks and uncertainties, including current and future economic trends and conditions, demand for our products, availability and cost of our raw materials and components, foreign currency exchange rates and other risks and uncertainties applicable to our business, as described in "Risk Factors," Item 1A of Part I to this report.
Economic Conditions Our products are recreational in nature and are therefore discretionary purchases for consumers. Consumers are generally more willing to spend their time and money to play golf and make discretionary purchases of golf products when economic conditions are favorable and when consumers feel confident and prosperous.
Consumers are generally more willing to spend their time and money on golf and golf products when economic conditions are favorable and when consumers feel confident and prosperous.
Income Taxes Deferred tax assets represent amounts available to reduce income taxes payable on taxable income in future years. Such assets arise because of temporary differences between the financial reporting and tax basis of assets and liabilities, as well as from net operating losses and tax credit carryforwards.
Such assets arise because of temporary differences between the financial reporting and tax basis of assets and liabilities, as well as from net operating losses and tax credit carryforwards.
Key Performance Measures We use various financial metrics to measure and evaluate our business, including, among others: (i) net sales on a constant currency basis, (ii) Adjusted EBITDA on a consolidated basis, (iii) Adjusted EBITDA margin on a consolidated basis and (iv) segment operating income (loss).
As a result of this change, we recognized a non-cash benefit of $17.7 million during the year ended December 31, 2024. 48 Table of Contents Key Performance Measures We use various financial metrics to measure and evaluate our business, including, among others: (i) net sales on a constant currency basis, (ii) Adjusted EBITDA on a consolidated basis, (iii) Adjusted EBITDA margin on a consolidated basis and (iv) segment operating income (loss).
As of December 31, 2023, we had $63.7 million of unrestricted cash and cash equivalents (including $11.8 million attributable to our FootJoy golf shoe variable interest entity). As of December 31, 2023, 97.3% of our total unrestricted cash and cash equivalents was held by subsidiaries in regions outside of the United States, including our FootJoy golf shoe variable interest entity.
As of December 31, 2024, we had $51.4 million of unrestricted cash and cash equivalents (including $9.9 million attributable to our FootJoy golf shoe VIE). As of December 31, 2024, approximately 95.0% of our total unrestricted cash and cash equivalents was held by subsidiaries in regions outside of the United States, including our FootJoy golf shoe VIE.
(“Magnus”), a wholly-owned subsidiary of Fila Holdings Corp., to purchase from Magnus an equal amount of our common stock as we purchase on the open market, over the period of time from June 12, 2023 through October 27, 2023, up to an aggregate of $100.0 million at the same weighted average per share price (the "2023 Agreement").
("Magnus") to purchase from Magnus an equal amount of our common stock as we purchase on the open market over the period of time from April 1, 2024 through June 28, 2024, up to an aggregate of $37.5 million, at the same weighted average per share price (the "March 2024 Agreement").
In an effort to protect against adverse fluctuations in foreign exchange rates and minimize foreign currency transaction risk, we take an active approach to currency hedging, which includes among other things, entering into various foreign exchange forward contracts, with the primary goal of providing earnings and cash flow stability.
Because these subsidiaries incur substantially all of their cost of goods sold in currencies that are different from the currencies in which they generate substantially all of their sales, we are exposed to transaction risk attributable to fluctuations in such exchange rates, which can impact the gross profit of these subsidiaries. 47 Table of Contents In an effort to protect against adverse fluctuations in foreign exchange rates and minimize foreign currency transaction risk, we take an active approach to currency hedging, which includes among other things, entering into various foreign exchange forward contracts, with the primary goal of providing earnings and cash flow stability.
In addition, unfavorable weather conditions and natural disasters can adversely affect the number of custom club fitting and trial events that we can perform during the key selling period.
In addition, unfavorable weather conditions and natural disasters can adversely affect the number of custom club fitting and trial events that we can perform during the key selling period. Unusual or severe weather events throughout the year, such as storms or droughts or other water shortages, can negatively affect golf rounds played both during such events and afterward.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeThe same sensitivity analysis for changes in the fair value of our foreign exchange forward contracts as of December 31, 2022, indicated that if the U.S. dollar uniformly weakened by 10% against all currencies covered by our contracts, the net settlement asset of $3.6 million would decrease by $17.9 million resulting in a net settlement liability of $14.3 million.
Biggest changeThe sensitivity analysis of changes in the fair value of our foreign exchange forward contracts outstanding as of December 31, 2024, while not predictive in nature, indicated that the net settlement asset of $7.9 million would decrease by $14.3 million resulting in a net settlement liability of $6.4 million if the U.S. dollar uniformly weakened by 10% against all currencies covered by our contracts.
Sustained and higher inflationary environments, including increased raw material and other input costs, could materially impact our business, results of operations, financial position and cash flows in the future. ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA See the Index to Consolidated Financial Statements and financial statements commencing on page F‑1, which are incorporated herein by reference. ITEM 9.
In the future, higher inflationary environments, including increased raw material and other input costs, could materially impact our business, results of operations, financial position and cash flows. ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA See the Index to Consolidated Financial Statements and financial statements commencing on page F‑1, which are incorporated herein by reference. ITEM 9.
Commodity Risk We are exposed to commodity price and availability risks with respect to certain materials and components used by us, our suppliers and our manufacturers, including polybutadiene, urethane and ionomers for the manufacturing of our golf balls, titanium and steel for our golf clubs, leather and synthetic fabrics for our golf shoes, golf gloves, golf gear and golf apparel, and resin and other petroleum‑based materials for a number of our products.
Commodity Risk We are exposed to commodity price and availability risks with respect to certain materials and components used by us, our suppliers and our manufacturers, including polybutadiene, zinc diacrylate, urethane and ionomers for the manufacturing of our golf balls, titanium and steel for our golf clubs, leather and synthetic fabrics for our golf shoes, golf gloves, golf gear and golf apparel, and resin and other petroleum‑based materials for a number of our products.
See "Notes to Consolidated Financial Statement – Note 12 - Derivative Financial Instruments," Item 8 of Part II, included elsewhere in this report, for further discussion of our interest rate swap contracts. We performed a sensitivity analysis to assess the potential effect of a hypothetical movement in interest rates on our annual pre-tax interest expense.
See "Notes to Consolidated Financial Statement – Note 12 - Derivative Financial Instruments," Item 8 of Part II to this report, for further discussion of our interest rate swap contracts. We performed a sensitivity analysis to assess the potential effect of a hypothetical movement in interest rates on our annual pre-tax interest expense.
We use financial instruments to reduce the earnings and shareholders' equity volatility relating to transaction risk. The principal financial instruments we enter into on a routine basis are foreign exchange forward contracts, primarily pertaining to the U.S. dollar, the Japanese yen, the British pound sterling, the Canadian dollar, the Korean won and the euro.
We use financial instruments to reduce the earnings and shareholders' equity volatility relating to transaction risk. The principal financial instruments we enter into on a routine basis are foreign exchange forward contracts, pertaining to the U.S. dollar, the Japanese yen, the British pound sterling, the Canadian dollar, the Korean won, the Australian dollar and the euro.
Interest Rate Risk We are exposed to interest rate risk under our various credit facilities which accrue interest at variable rates, as described in “Notes to Consolidated Financial Statements – Note 11 - Debt and Financing Arrangements,” Item 8 of Part II, included elsewhere in this report.
Interest Rate Risk We are exposed to interest rate risk under our various credit facilities which accrue interest at variable rates, as described in “Notes to Consolidated Financial Statements – Note 11 - Debt and Financing Arrangements,” Item 8 of Part II to this report.
This sensitivity analysis disregards fluctuations in balances of our outstanding variable rate indebtedness due to borrowings and repayments throughout the year. As of December 31, 2023, we had $255.6 million of outstanding indebtedness at variable interest rates after giving effect to $100.0 million of hedged floating rate indebtedness.
This sensitivity analysis disregards fluctuations in balances of our outstanding variable rate indebtedness due to borrowings and repayments throughout the year. As of December 31, 2024, we had $317.6 million of outstanding indebtedness at variable interest rates after giving effect to $100.0 million of hedged floating rate indebtedness.
The sensitivity analysis, while not predictive in nature, indicated that a one percentage point increase in the interest rate applied to these borrowings as of December 31, 2023 would have resulted in an increase of $2.6 million in our annual pre-tax interest expense. As of December 31, 2022, we had $566.6 million of outstanding indebtedness at variable interest rates.
The sensitivity analysis, while not predictive in nature, indicated that a one percentage point increase in the interest rate applied to these borrowings as of December 31, 2024 would have resulted in an increase of $3.2 million in our annual pre-tax interest expense. As of December 31, 2023, we had $255.6 million of outstanding indebtedness at variable interest rates.
The sensitivity analysis of changes in the fair value of our foreign exchange forward contracts outstanding as of December 31, 2023, while not predictive in nature, indicated that the net settlement asset of $2.4 million would decrease by $15.2 million resulting in a net settlement liability of $12.8 million if the U.S. dollar uniformly weakened by 10% against all currencies covered by our contracts.
The same sensitivity analysis for changes in the fair value of our foreign exchange forward contracts as of December 31, 2023, indicated that if the U.S. dollar uniformly weakened by 10% against all currencies covered by our contracts, the net settlement asset of $2.4 million would decrease by $15.2 million resulting in a net settlement liability of $12.8 million.
The same sensitivity analysis for movement in variable interest rates as of December 31, 2022, indicated that a one percentage point increase in the interest rate applied to these borrowings as of December 31, 2022 would have resulted in an increase of $5.7 million in our annual pre‑tax interest expense.
The same sensitivity analysis for movement in variable interest rates as of December 31, 2023, indicated that a one percentage point increase in the interest rate applied to these borrowings as of December 31, 2023 would have resulted in an increase of $2.6 million in our annual pre-tax interest expense.
While it is difficult to accurately measure the impact of inflation due to the imprecise nature of the estimates required, we believe that inflation in the form of increased raw materials and other input costs, including inbound freight and wage rates, has impacted our business, results of operations, financial position and cash flows during the year ended December 31, 2023 and 2022.
While it is difficult to accurately measure the impact of inflation due to the imprecise nature of the estimates required, we believe that inflation in the form of increased raw materials and other input costs, including inbound freight and wage rates, has at times impacted our business, results of operations, financial position and cash flows.
Under these contracts, we pay fixed and receive variable rate interest, in effect converting a portion of our floating rate debt to fixed rate debt. As of December 31, 2023, the notional value of our outstanding interest rate swap contracts was $100.0 million. As of December 31, 2022, there were no interest rate swap contracts outstanding.
Under these contracts, we pay fixed and receive variable rate interest, in effect converting a portion of our floating rate debt to fixed rate debt. As of December 31, 2024 and 2023, the notional value of our outstanding interest rate swap contracts was $100.0 million. Our outstanding interest rate swap contracts are due to mature on February 28, 2025.
The gross U.S. dollar equivalent notional amount of all foreign exchange forward contracts outstanding at December 31, 2022 was $246.4 million, representing a net settlement asset of $3.6 million.
The gross U.S. dollar equivalent notional amount of all foreign exchange forward contracts outstanding at December 31, 2024 was $192.2 million, representing a net settlement asset of $7.9 million.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES There were no changes in or disagreements with our accountants on accounting and financial disclosure matters. ITEM 9A. CONTROLS AND PROCEDURES The required certifications of our chief executive officer and our principal financial officer are included as Exhibit 31.1 and 31.2 to this Annual Report.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES There were no changes in or disagreements with our accountants on accounting and financial disclosure matters.
Removed
The disclosures set forth in this Item 9A contain information concerning the evaluation of our disclosure controls and procedures, management's report on internal control over financial reporting and changes in internal control over financial reporting referred to in those certifications.
Removed
These certifications should be read in conjunction with this Item 9A for a more complete understanding of the matters covered by the certifications. 62 Table of Contents Evaluation of Disclosure Controls and Procedures We maintain disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Securities Exchange Act of 1934, as amended, (the “ Exchange Act”) is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms; and that such information is accumulated and communicated to management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.
Removed
Our management, with the participation of our principal executive officer and principal financial officer, evaluated the effectiveness of our disclosure controls and procedures as of December 31, 2023, the last day of the period covered by this Annual Report.
Removed
Based on this evaluation, our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures were effective as of December 31, 2023. Management’s Report on Internal Control over Financial Reporting Management is responsible for establishing and maintaining adequate internal control over financial reporting.
Removed
Internal control over financial reporting is defined in Rule 13a-15(f) and 15d-15(f) promulgated under the Exchange Act as a process designed by, or under the supervision of, our principal executive and principal financial officers and effected by our board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that: • Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the company; • Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and • Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company’s assets that could have a material effect on the financial statements.
Removed
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Removed
Our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2023. In making this assessment, our management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in “Internal Control – Integrated Framework (2013)”.
Removed
Based on our assessment, our management determined that, as of December 31, 2023, our internal control over financial reporting is effective. PricewaterhouseCoopers LLP, an independent registered public accounting firm, has audited the effectiveness of our internal control over financial reporting as stated in their report which appears on page F-2 of this Annual Report.
Removed
Changes in Internal Control over Financial Reporting There have been no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the quarter ended December 31, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. ITEM 9B.

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