Acushnet Holdings Corp.

Previous wording

Geopolitical Developments and Macroeconomic Factors: The global economy continues to experience elevated levels of volatility and uncertainty, including within the commodity markets, driven by a combination of geopolitical developments and macroeconomic factors. Increased U.S. tariffs have led and may continue to lead to the imposition of retaliatory tariffs by foreign jurisdictions, which have further contributed to disruptions in global capital markets and global supply chains. As a result, we have incurred and may continue to incur incremental costs in connection with importing raw materials, component parts and finished goods. We have implemented various strategies to mitigate the effect of these incremental costs on our gross profit and gross margin.

Current wording

Geopolitical Developments and Macroeconomic Factors: The global economy continues to experience elevated levels of volatility and uncertainty, including within commodity and energy markets, driven by a combination of geopolitical developments and macroeconomic factors. Increased U.S. tariffs have led and may continue to lead to the imposition of retaliatory tariffs by foreign jurisdictions, which have further contributed to disruptions in global capital markets and global supply chains. As a result, we have incurred and may continue to incur incremental costs in connection with importing raw materials, component parts and finished goods. In addition, geopolitical developments, inflationary pressures and other macroeconomic factors have resulted and may continue to result in increased energy, freight, and distribution costs. We have implemented various strategies to mitigate the effect of these incremental costs on our gross profit and gross margin.

Previous wording

In February 2026, the U.S. Supreme Court ruled that certain tariffs under the International Emergency Economic Powers Act (“IEEPA”) were invalid, and in March 2026, the U.S. Court of International Trade issued an order directing U.S. Customs and Border Protection (“CBP”) to refund duties imposed under IEEPA. In April 2026, CBP established a refund portal, allowing importers of record and authorized customs brokers to submit refund requests. The situation continues to evolve, and further legislative, regulatory, or judicial developments may affect the ultimate outcome and the availability or timing of any refunds. Our results of operations for the three months ended March 31, 2026 do not include the impact of any potential refunds that we may receive.

Current wording

In February 2026, the U.S. Supreme Court ruled that certain tariffs imposed under IEEPA were invalid, and in March 2026, the U.S. Court of International Trade issued an order directing CBP to refund duties collected under IEEPA. In April 2026, CBP established a refund portal, allowing importers of record and authorized customs brokers to submit refund requests. We have submitted refund requests through this portal for duties paid on qualifying imports. During the three and six months ended June 30, 2026, we recognized benefits related to IEEPA tariff refunds of $44.5 million in costs of goods sold, $0.6 million in selling, general and administrative expenses, and $1.5 million in interest expense, net. These benefits were partially offset by a resulting increase in incentive compensation expense of approximately $7 million. While we continue to evaluate opportunities for additional tariff refunds, we do not expect any future recoveries to have a significant impact on our results of operations. See “Notes to Unaudited Condensed Consolidated Financial Statements – Note 15 – Commitments and Contingencies,” Item 1 of Part I to this report.

Previous wording

Current uncertainties around geopolitical developments and macroeconomic factors and their effects on trading relationships may further affect the costs of our imported raw materials, components parts and finished goods, as well as increase market volatility and currency exchange rate fluctuations, which may influence our hedging strategy. In addition, these factors, and any changes to these factors, could have a material adverse effect on consumer behavior and on our future revenues and overall profitability. We continue to monitor the economic effects of these developments and evaluate opportunities to mitigate their related impacts.

Current wording

Current uncertainties around geopolitical developments and macroeconomic factors and their effects on trading relationships may further affect the costs of our imported raw materials, components parts and finished goods, as well as energy, freight, and distribution costs. In addition, increased market volatility and currency exchange rate fluctuations may influence our hedging strategy. These factors, and any changes to these factors, could have a material adverse effect on consumer behavior and on our future revenues and overall profitability. We continue to monitor the economic effects of these developments and evaluate opportunities to mitigate their related impacts.

Previous wording

Information Technology Optimization: During 2024, we began a multi-year implementation of a new global cloud-based enterprise resource planning ("ERP") platform as part of our plans to integrate our operations and enhance our supply chain and finance capabilities. We expect that the new global ERP platform will enable further operating efficiencies and support the Company’s digital transformation. Additional implementation activities are expected to continue in phases by geographic region over the next several years. The global ERP platform implementation spending comprises both capitalized costs and operating expenses. The operating expenses represent costs directly related to the deployment of the global ERP platform above the normal ongoing level of spending on information technology to support our operations. In connection with this strategic initiative, during the three months ended March 31, 2026 and 2025, we incurred expenses of $3.0 million and $2.6 million, respectively. In addition, we invested $5.7 million and $8.0 million for capitalized implementation costs associated with the integration, configuration and customization of this new global ERP platform during the three months ended March 31, 2026 and 2025, respectively. We anticipate spending approximately $30 million to $35 million in total for the full year related to the deployment of the new global ERP platform.

Current wording

Information Technology Optimization: During 2024, we began a multi-year implementation of a new global cloud-based enterprise resource planning ("ERP") platform as part of our plans to integrate our operations and enhance our supply chain and finance capabilities. We expect that the new global ERP platform will enable further operating efficiencies and support the Company’s digital transformation. Additional implementation activities are expected to continue in phases by geographic region over the next several years. The global ERP platform implementation spending comprises both capitalized costs and operating expenses. The operating expenses represent costs directly related to the deployment of the global ERP platform above the normal ongoing level of spending on information technology to support our operations. In connection with this strategic initiative, we incurred expenses of $6.9 million and $3.4 million, during the three months ended June 30, 2026 and 2025, respectively, and $9.9 million and $6.0 million, during the six months ended June 30, 2026 and 2025, respectively. In addition, we invested $13.3 million and $21.2 million for capitalized implementation costs associated with the integration, configuration and customization of this new global ERP platform during the six months ended June 30, 2026 and 2025, respectively. We anticipate spending approximately $35 million to $40 million in total for the full year related to the deployment of the new global ERP platform.

Previous wording

(1) For the three months ended March 31, 2026 and 2025, includes $3.0 million and $2.6 million, respectively, related to our information technology optimization.

Current wording

(2) For the three and six months ended June 30, 2026, includes $6.9 million and $9.9 million, respectively, related to our information technology optimization. For the three and six months ended June 30, 2025, includes $3.4 million and $6.0 million, respectively, related to our information technology optimization.

Previous wording

(2) For the three months ended March 31, 2026 and 2025, includes $0.5 million and $0.8 million, respectively, related to the amortization of capitalized implementation costs for cloud computing arrangements. For the three months ended March 31, 2025, includes a non-cash gain of $20.9 million related to the deconsolidation of Lionscore. The three months ended March 31, 2026 and 2025 also include other gains, losses or costs added back for purposes of calculating Adjusted EBITDA as defined in our credit agreement.

Current wording

(3) For the six months ended June 30, 2025, includes a non-cash gain of $20.9 million related to the deconsolidation of Lionscore. The three and six months ended June 30, 2026 and 2025 also include other gains, losses or costs added back for purposes of calculating Adjusted EBITDA as defined in our credit agreement.

Previous wording

For the three months ended March 31, 2026, net sales increased 7.1%, or 4.8% on a constant currency basis, compared to the three months ended March 31, 2025. The increase was driven by higher net sales in Titleist golf equipment, primarily due to higher sales volumes in golf clubs and golf balls, and higher average selling prices in golf balls, as well as higher net sales in Golf gear, primarily due to higher average selling prices across all product categories. These increases were partially offset by lower net sales, on a constant currency basis, in FootJoy golf wear, primarily due to lower sales volumes in footwear, partially offset by higher average selling prices across all product categories.

Current wording

For the three months ended June 30, 2026, net sales increased 13.8%, or 14.2% on a constant currency basis, compared to the three months ended June 30, 2025. The increase was driven by higher net sales in Titleist golf equipment, primarily due to higher sales volumes in golf clubs and higher average selling prices in golf balls, as well as higher net sales in FootJoy golf wear and Golf gear, due to higher average selling prices across all product categories in both segments.

Previous wording

Net sales in regions outside the United States increased 10.2%, or 4.5% on a constant currency basis, driven by increases in EMEA, Rest of World and Japan, partially offset by a decrease in Korea. In EMEA and Rest of World, the increases were primarily driven by higher net sales across all reportable segments. In Japan, the increase was driven by higher net sales in Titleist golf equipment, mainly golf clubs. In Korea, the decrease was primarily due to lower net sales in all reportable segments, as well as products that are not allocated to one of our three reportable segments.

Current wording

Net sales in regions outside the United States increased 12.4%, or 13.3% on a constant currency basis, due to increases across all regions. In EMEA, the increase was primarily due to higher net sales in Titleist golf equipment, driven by golf clubs. In Rest of World, the increase was driven by higher net sales across all reportable segments. In Japan, the increase was due to higher net sales in Titleist golf equipment, mainly golf clubs, partially offset by lower net sales of products that are not allocated to one of our three reportable segments. In Korea, the increase, on a constant currency basis, was primarily due to higher net sales in Titleist golf equipment, mainly golf clubs.

Previous wording

Income tax expense increased $2.5 million for the three months ended March 31, 2026 compared to the three months ended March 31, 2025. Our ETR was 22.9% for the three months ended March 31, 2026 compared to 17.9% for the three months ended March 31, 2025. The change in ETR was primarily driven by changes in our jurisdictional mix of earnings, as well as a reduced income tax benefit related to the U.S. deduction of foreign-derived intangible income.

Current wording

Income tax expense increased $20.1 million for the three months ended June 30, 2026 compared to the three months ended June 30, 2025. Our ETR was 23.6% for the three months ended June 30, 2026 compared to 19.9% for the three months ended June 30, 2025. The change in ETR was primarily driven by changes in our jurisdictional mix of earnings, as well as a reduced income tax benefit related to the U.S. deduction of foreign derived intangible income.

Previous wording

Net sales in our Golf gear segment increased 10.8%, or 8.3% on a constant currency basis, for the three months ended March 31, 2026 compared to the three months ended March 31, 2025, primarily driven by higher average selling prices across all product categories, as well as higher sales volumes in golf bags, partially offset by lower sales volumes in the travel product category.

Current wording

Net sales in our Golf gear segment increased 3.8%, or 3.9% on a constant currency basis, for the three months ended June 30, 2026 compared to the three months ended June 30, 2025, primarily driven by higher average selling prices across all product categories, partially offset by lower sales volumes in the travel product category and golf bags.

Previous wording

The increase in net sales in the United States was primarily driven by increases in Titleist golf equipment of $17.9 million and in Golf gear of $4.7 million, partially offset by a decrease in FootJoy golf wear of $2.4 million. The increase in Titleist golf equipment was primarily driven by higher average selling prices of our Pro V1 golf ball models, as well as higher sales volumes of our newly introduced SM11 wedges, latest generation T-Series irons, and performance model golf balls, partially offset by lower sales volumes of our second model year hybrids, drivers, fairways, and Scotty Cameron putters. The increase in Golf gear was primarily driven by higher average selling prices across all product categories and higher sales volumes in golf bags. The decrease in FootJoy golf wear was primarily due to lower sales volumes, partially offset by higher average selling prices in apparel.

Current wording

The increase in net sales in the United States was primarily driven by an increase in Titleist golf equipment of $76.9 million. The increase in Titleist golf equipment was primarily driven by higher sales volumes of our newly introduced GTS drivers and fairways, SM11 Vokey wedges and latest generation T-Series irons, and higher average selling prices of our Pro V1 golf ball models, partially offset by lower sales volumes of our second model year hybrids.

Previous wording

SG&A expenses increased $13.4 million for the three months ended March 31, 2026 compared to the three months ended March 31, 2025. This increase was primarily the result of increases of $4.7 million in selling expense, $4.1 million in administrative expense, and $3.4 million in advertising and promotion expenses. The increase in selling expense was primarily due to higher employee related expenses incurred in connection with the sales volume increases discussed previously, and investments to expand our product fitting networks and to enhance consumer engagement. The increase in administrative expense was primarily due to higher information technology-related expenses. The increase in advertising and promotion expenses was primarily in Titleist golf equipment to support new product launches. SG&A expenses also include a $3.2 million increase in foreign currency transaction losses, offset in part by a $1.8 million increase in gains on foreign exchange forward contracts.

Current wording

SG&A expenses increased $37.6 million for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. This increase was primarily the result of increases of $13.4 million in advertising and promotion expenses, $11.9 million in administrative expense and $11.1 million in selling expense. The increase in advertising and promotion expenses was primarily in Titleist golf equipment to support new product launches. The increase in administrative expense was primarily due to the higher incentive compensation expenses discussed above and higher information technology-related expenses. The increase in selling expense was primarily due to the higher incentive compensation expenses discussed above, and investments to expand our product fitting networks. SG&A expenses also include a $3.9 million increase in expense related to our information technology optimization, as well as a $6.9 million increase in foreign currency transaction losses, offset in part by a $4.2 million increase in gains on foreign exchange forward contracts. In addition, during the six months ended June 30, 2025, SG&A expenses include restructuring costs of $6.4 million related to the VBR program.

Previous wording

Other expense, net increased $21.7 million for the three months ended March 31, 2026 compared to other income, net of $19.9 million for the three months ended March 31, 2025, primarily due to a non-cash gain of $20.9 million recognized in the prior year period related to the deconsolidation of Lionscore.

Current wording

Other expense, net increased $21.0 million for the six months ended June 30, 2026 compared to other income, net of $18.9 million for the six months ended June 30, 2025, primarily due to a non-cash gain of $20.9 million recognized in the prior year period related to the deconsolidation of Lionscore.

Previous wording

Net sales in our Titleist golf equipment segment increased 8.9%, or 7.1% on a constant currency basis, for the three months ended March 31, 2026 compared to the three months ended March 31, 2025, primarily driven by higher sales volumes of our recently launched SM11 wedges and latest generation T-Series irons, higher average selling prices of our Pro V1 golf ball models and higher sales volumes of our recently launched AVX, Tour Soft and Velocity performance golf ball models, partially offset by lower sales volumes of our second model year hybrids, drivers, fairways, and Scotty Cameron putters.

Current wording

Net sales in our Titleist golf equipment segment increased 14.8%, or 14.1% on a constant currency basis, for the six months ended June 30, 2026 compared to the six months ended June 30, 2025, primarily driven by higher sales volumes of our recently launched SM11 Vokey wedges, newly introduced GTS drivers and fairways and latest generation T-Series irons, higher average selling prices of our Pro V1 golf ball models, partially offset by lower sales volumes of our second model year hybrids.

Previous wording

Operating income in our Titleist golf equipment segment increased $8.4 million, or 11.1% compared to the prior year period. The increase in operating income resulted from higher gross profit of $17.7 million, partially offset by higher operating expenses of $9.4 million. The increase in gross profit was primarily driven by the higher sales volumes and higher average selling prices as discussed previously, partially offset by higher tariff costs. Higher operating expenses were a result of increases of $3.8 million in advertising and promotion expenses, $3.3 million in selling expense, and $3.1 million in administrative expense. These increases were partially offset by a decrease of $1.2 million in amortization expense, as discussed previously.

Current wording

Operating income in our Titleist golf equipment segment increased $64.5 million, or 39.9% compared to the prior year period. The increase in operating income resulted from higher gross profit of $93.3 million, partially offset by higher operating expenses of $28.9 million. The increase in gross profit was primarily driven by the higher sales volumes and higher average selling prices discussed previously and IEEPA tariff refunds, partially offset by higher tariff costs. Higher operating expenses were a result of increases of $12.0 million in advertising and promotion expenses, $8.9 million in selling expense, and $8.8 million in administrative expense. These increases were partially offset by a decrease of $2.5 million in amortization expense, as discussed previously.

Previous wording

As of March 31, 2026, we had $50.4 million of unrestricted cash and cash equivalents (including $0.9 million attributable to ACL FootJoy, a VIE). As of March 31, 2026, 94.7% of our total unrestricted cash and cash equivalents was held by subsidiaries in regions outside of the United States, including ACL FootJoy. We manage our worldwide cash requirements by monitoring the funds available among our subsidiaries and determining the extent to which we can access those funds on a cost-effective basis. We are not aware of any restrictions on repatriation of these funds and, subject to foreign withholding taxes, those funds could be repatriated, if necessary. 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.

Current wording

As of June 30, 2026, we had $66.6 million of unrestricted cash and cash equivalents (including $2.8 million attributable to ACL FootJoy, a VIE). As of June 30, 2026, 95.4% of our total unrestricted cash and cash equivalents was held by subsidiaries in regions outside of the United States, including ACL FootJoy. We manage our worldwide cash requirements by monitoring the funds available among our subsidiaries and determining the extent to which we can access those funds on a cost-effective basis. We are not aware of any restrictions on repatriation of these funds and, subject to foreign withholding taxes, those funds could be repatriated, if necessary. 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.

Previous wording

As of March 31, 2026, we had $318.4 million of available borrowing capacity under our multi-currency revolving credit facility after giving effect to $4.0 million of outstanding letters of credit. Additionally, we had $24.8 million available borrowing capacity under certain local credit facilities of our subsidiaries.

Current wording

As of June 30, 2026, we had $504.4 million of available borrowing capacity under the Revolving Credit Facility after giving effect to $4.0 million of outstanding letters of credit. Additionally, we had $28.9 million available borrowing capacity under certain local credit facilities of our subsidiaries.

Previous wording

The credit agreement governing our multi-currency revolving credit facility contains customary affirmative and restrictive covenants, including, among others, financial covenants based on our leverage and interest coverage ratios. 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 March 31, 2026, we were in compliance with all covenants under our credit agreement.

Current wording

The Credit Agreement governing the Revolving Credit Facility contains customary affirmative and restrictive covenants, including, among others, financial covenants based on our leverage and interest coverage ratios. The 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 June 30, 2026, we were in compliance with all covenants under the Credit Agreement.

Previous wording

The indenture that governs the Notes (the "Indenture") contains covenants that, among other things, limit the ability of the Company and its subsidiaries to incur liens securing indebtedness for borrowed money, enter into sale and leaseback transactions, and consolidate or merge with or into other companies. As of March 31, 2026, we were in compliance with all covenants under the Indenture.

Current wording

The Indenture that governs the Notes contains covenants that, among other things, limit the ability of the Company and its subsidiaries to incur liens securing indebtedness for borrowed money, enter into sale and leaseback transactions, and consolidate or merge with or into other companies. As of June 30, 2026, we were in compliance with all covenants under the Indenture.

Previous wording

During the three months ended March 31, 2026, we paid dividends on our common stock of $15.9 million to our shareholders. During the second quarter of 2026, our board of directors declared a dividend of $0.255 per share of common stock to shareholders of record as of June 5, 2026 and payable on June 22, 2026.

Current wording

During the six months ended June 30, 2026, we paid dividends on our common stock of $30.8 million to our shareholders. During the third quarter of 2026, our board of directors declared a dividend of $0.255 per share of common stock to shareholders of record as of September 4, 2026 and payable on September 18, 2026.

Previous wording

As of March 31, 2026, our board of directors had authorized us to repurchase up to an aggregate of $1.25 billion of our issued and outstanding common stock since the share repurchase program was established in 2018. During the three months ended March 31, 2026, we repurchased 106,008 shares of our common stock at an average price of $94.12 for an aggregate of $10.0 million. As of March 31, 2026, we had $230.7 million remaining under the current share repurchase authorization.

Current wording

As of June 30, 2026, our board of directors had authorized us to repurchase up to an aggregate of $1.25 billion of our issued and outstanding common stock since the share repurchase program was established in 2018. During the six months ended June 30, 2026, we repurchased 288,239 shares of our common stock at an average price of $90.21 for an aggregate of $26.0 million.

Previous wording

See “Notes to Unaudited Condensed Consolidated Financial Statements – Note 10 – Common Stock,” Item 1 of Part I to this report for a description of our share repurchase program.

Current wording

See “Notes to Unaudited Condensed Consolidated Financial Statements – Note 10 – Common Stock,” Item 1 of Part I to this report for a description of our share repurchase program and Magnus share repurchase agreements.

Previous wording

During the three months ended March 31, 2026, we invested $19.2 million in capital expenditures. We expect to invest approximately $95.0 million in capital expenditures for the full year, although actual amounts may vary depending upon a variety of factors, including the timing of certain capital project implementations and receipt of capital purchases. 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.

Current wording

During the six months ended June 30, 2026, we invested $37.3 million in capital expenditures. We expect to invest approximately $95.0 million in capital expenditures for the full year, although actual amounts may vary depending upon a variety of factors, including the timing of certain capital project implementations and receipt of capital purchases. 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.

Previous wording

In addition, during the three months ended March 31, 2026, we invested $5.7 million in capitalized implementation costs associated with the implementation of a new global cloud-based ERP platform as part of our plans to integrate our operations and enhance our supply chain and finance capabilities. We expect to invest approximately $25.0 million in capitalized implementation costs associated with this global ERP platform for the full year.

Current wording

In addition, during the six months ended June 30, 2026, we invested $13.3 million in capitalized implementation costs associated with the implementation of a new global cloud-based ERP platform as part of our plans to integrate our operations and enhance our supply chain and finance capabilities. We expect to invest approximately $25.0 million in capitalized implementation costs associated with this global ERP platform for the full year.

Previous wording

The increase in cash used in operating activities was primarily driven by an increase in cash used to fund working capital requirements. At any specific point in time, working capital 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.

Current wording

The increase in cash provided by operating activities was primarily driven by growth in operating income, including IEEPA tariff refunds recognized, offset in part by an increase in cash used to fund working capital requirements. At any specific point in time, working capital 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.

Previous wording

The increase in cash provided by financing activities was primarily driven by an increase in net proceeds from credit facilities, as well as a decrease in purchases of common stock, offset in part by an increase in payments of employee restricted stock tax withholdings.

Current wording

The increase in cash used in financing activities was primarily driven by a decrease in net proceeds from credit facilities, offset in part by a decrease in purchases of common stock.