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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Form
10-Q

☒    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2022
or
☐    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from  to    
Commission file number: 001-37935
Acushnet Holdings Corp.
(Exact name of registrant as specified in its charter)
Delaware 45-2644353
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
333 Bridge Street Fairhaven, Massachusetts 02719
(Address of principal executive offices) (Zip Code)
 
(800) 225-8500
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Exchange Act:
Title of each class Trading Symbol(s) Name of each exchange on which registered
Common Stock - $0.001 par value per share GOLF New York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒  No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒  No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
☒

 Accelerated filer ☐
Non-accelerated filer
☐

 Smaller reporting company ☐
Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐  No ☒
The registrant had 70,209,026 shares of common stock outstanding as of October 28, 2022.
ACUSHNET HOLDINGS CORP.
FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2022
TABLE OF CONTENTS
 
 
1
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which are subject to the “safe harbor” created by that section. These forward-looking statements are included throughout this report, including in the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and relate to matters such as our industry, business strategy, goals and expectations concerning our market position, future operations, margins, profitability, capital expenditures, liquidity and capital resources and other financial and operating information. The forward-looking statements also reflect our current views with respect to the impact of the novel coronavirus (“COVID-19”) pandemic on our business, results of operations, financial position and cash flows. We have used the words “anticipate,” “assume,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “future,” “will,” “seek,” “foreseeable” and similar terms and phrases to identify forward-looking statements in this report, although not all forward-looking statements use these identifying words.
The forward-looking statements contained in this report are based on management’s current expectations and are subject to uncertainty and changes in circumstances. We cannot assure you that future developments affecting us will be those that we have anticipated. Actual results may differ materially from these expectations due to changes in global, regional or local economic, business, competitive, market, regulatory and other factors, many of which are beyond our control. We believe that these factors include:
•the duration and impact of the COVID-19 pandemic, which may precipitate or exacerbate one or more of the following risks and uncertainties;
•a reduction in the number of rounds of golf played or in the number of golf participants;
•unfavorable weather conditions may impact the number of playable days and rounds played in a given year;
•consumer spending habits and macroeconomic factors may affect the number of rounds of golf played and related spending on golf products;
•demographic factors may affect the number of golf participants and related spending on our products;
•changes to the Rules of Golf with respect to equipment;
•a significant disruption in the operations of our manufacturing, assembly or distribution facilities;
•our ability to procure raw materials or components of our products;
•a disruption in the operations of our suppliers;
•the cost of raw materials and components;
•currency transaction and translation risk;
•our ability to successfully manage the frequent introduction of new products or satisfy changing consumer preferences, quality and regulatory standards;
•our reliance on technical innovation and high-quality products;
•our ability to adequately enforce and protect our intellectual property rights;
•involvement in lawsuits to protect, defend or enforce our intellectual property rights;
•our ability to prevent infringement of intellectual property rights by others;
•changes to patent laws;
•intense competition and our ability to maintain a competitive advantage in each of our markets;
•limited opportunities for future growth in sales of certain of our products, including golf balls, golf shoes and golf gloves;
•our customers’ financial condition, their levels of business activity and their ability to pay trade obligations;
•a decrease in corporate spending on our custom logo golf balls;
•our ability to maintain and further develop our sales channels;
•consolidation of retailers or concentration of retail market share;
•our ability to maintain and enhance our brands;
•seasonal fluctuations of our business;
•fluctuations of our business based on the timing of new product introductions;
•risks associated with doing business globally;
•compliance with laws, regulations and policies, including the U.S. Foreign Corrupt Practices Act or other applicable anti-corruption legislation, as well as federal, state and local policies and executive orders regarding the COVID-19 pandemic;
•our ability to secure professional golfers to endorse or use our products;
•negative publicity relating to us or the golfers who use our products or the golf industry in general;
•our ability to accurately forecast demand for our products;
•a disruption in the service, or a significant increase in the cost, of our primary delivery and shipping services or a significant disruption at shipping ports;
2
•our ability to maintain our information systems to adequately perform their functions;
•cybersecurity risks;
•our ability to comply with data privacy and security laws;
•the ability of our eCommerce systems to function effectively;
•impairment of goodwill and identifiable intangible assets;
•our ability to attract and/or retain management and other key employees and hire qualified management, technical and manufacturing personnel;
•our ability to prohibit sales of our products by unauthorized retailers or distributors;
•our ability to grow our presence in existing international markets and expand into additional international markets;
•tax uncertainties, including potential changes in tax laws, unanticipated tax liabilities and limitations on utilization of tax attributes after any change of control;
•adequate levels of coverage of our insurance policies;
•product liability, warranty and recall claims;
•litigation and other regulatory proceedings;
•compliance with environmental, health and safety laws and regulations;
•our ability to secure additional capital at all or on terms acceptable to us and potential dilution of holders of our common stock;
•lack of assurance of positive returns on capital investments;
•risks associated with acquisitions and investments;
•our estimates or judgments relating to our critical accounting estimates;
•terrorist activities and international political instability;
•occurrence of natural disasters or pandemic diseases, including the COVID-19 pandemic;
•a high degree of leverage, ability to service our indebtedness, ability to incur more indebtedness and restrictions in the agreements governing our indebtedness;
•our use of derivative financial instruments;
•the ability of our controlling shareholder to control significant corporate activities, and that our controlling shareholder’s interests may conflict with yours;
•our status as a controlled company;
•the market price of shares of our common stock;
•share repurchase program execution and effects thereof;
•our ability to maintain effective internal controls over financial reporting;
•our ability to pay dividends;
•our status as a holding company;
•dilution from future issuances or sales of our common stock;
•anti-takeover provisions in our organizational documents and Delaware law;
•reports from securities analysts; and
•other factors discussed under the heading "Risk Factors" in our most recent Annual Report on Form 10-K and in any other reports we file with the Securities and Exchange Commission (“SEC”), including this Quarterly Report on Form 10-Q.
These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this report. Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, our actual results may vary in material respects from those projected in these forward-looking statements.
Any forward-looking statement made by us in this report speaks only as of the date of this report. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements and you should not place undue reliance on our forward-looking statements. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures, investments or other strategic transactions we may make. We undertake no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by any applicable securities laws.
3
Website Disclosure
We use our website (www.acushnetholdingscorp.com) as a channel of distribution of company information. The information we post through this channel may be material. Accordingly, investors should monitor this channel, in addition to following our press releases, SEC filings and public conference calls and webcasts. In addition, you may automatically receive e-mail alerts and other information about Acushnet Holdings Corp. when you enroll your e-mail address by visiting the “Resources” section of our website at https://www.acushnetholdingscorp.com/investors/resources. On our website, we post the following filings free of charge as soon as reasonably practicable after they are electronically filed with or furnished to the SEC: our annual reports on Form 10-K, our proxy statements, our quarterly reports on Form 10-Q, our current reports on Form 8-K, and any amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act. The contents of our website are not, however, a part of this report.
4
PART I.       FINANCIAL INFORMATION

ITEM 1.      FINANCIAL STATEMENTS
INDEX TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

5
ACUSHNET HOLDINGS CORP.
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
 
September 30, December 31,
(in thousands, except share and per share amounts) 2022 2021
Assets
Current assets
Cash, cash equivalents and restricted cash ($20,602 and $15,612 attributable to the variable interest entity ("VIE"))
 $ 108,457  $ 281,677 
Accounts receivable, net 324,096  174,435 
Inventories ($19,174 and $19,385 attributable to the VIE)
 536,742  413,314 
Prepaid and other assets 113,728  99,750 
Total current assets 1,083,023  969,176 
Property, plant and equipment, net ($10,167 and $10,466 attributable to the VIE)
 236,240  231,761 
Goodwill ($32,312 and $32,312 attributable to the VIE)
 199,744  210,431 
Intangible assets, net 458,824  465,341 
Deferred income taxes 46,973  60,814 
Other assets ($2,088 and $2,166 attributable to the VIE)
 76,557  68,313 
Total assets $ 2,101,361  $ 2,005,836 
Liabilities, Redeemable Noncontrolling Interest and Shareholders' Equity
Current liabilities
Short-term debt $ 27,532  $ 116 
Current portion of long-term debt —  17,500 
Accounts payable ($17,063 and $13,275 attributable to the VIE)
 178,015  163,607 
Accrued taxes 45,117  57,307 
Accrued compensation and benefits ($1,062 and $1,511 attributable to the VIE)
 84,645  113,453 
Accrued expenses and other liabilities ($3,911 and $4,677 attributable to the VIE)
 163,504  131,041 
Total current liabilities 498,813  483,024 
Long-term debt 406,728  297,354 
Deferred income taxes 5,222  4,950 
Accrued pension and other postretirement benefits 93,107  93,705 
Other noncurrent liabilities ($2,115 and $2,218 attributable to the VIE)
 46,916  43,237 
Total liabilities 1,050,786  922,270 
Commitments and contingencies (Note 15)
Redeemable noncontrolling interest 4,322  3,299 
Shareholders' equity
Common stock, $0.001 par value, 500,000,000 shares authorized; 76,321,523 and 75,855,036 shares issued
 76  76 
Additional paid-in capital 954,926  948,423 
Accumulated other comprehensive loss, net of tax (145,079) (99,582)
Retained earnings 483,237  324,966 
Treasury stock, at cost; 6,629,483 and 3,314,562 shares (including 869,368 and 537,839 of accrued share repurchases) (Note 10)
 (283,155) (131,039)
Total equity attributable to Acushnet Holdings Corp. 1,010,005  1,042,844 
Noncontrolling interests 36,248  37,423 
Total shareholders' equity 1,046,253  1,080,267 
Total liabilities, redeemable noncontrolling interest and shareholders' equity $ 2,101,361  $ 2,005,836 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

6
ACUSHNET HOLDINGS CORP.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
 
  Three months ended September 30, Nine months ended September 30,
(in thousands, except share and per share amounts) 2022 2021 2022 2021
Net sales $ 558,246  $ 521,629  $ 1,822,932  $ 1,727,364 
Cost of goods sold 263,251  252,792  867,332  813,362 
Gross profit 294,995  268,837  955,600  914,002 
Operating expenses:        
Selling, general and administrative 202,418  199,787  637,276  586,411 
Research and development 14,619  14,597  42,533  39,947 
Intangible amortization 1,948  1,967  5,865  5,909 
Income from operations 76,010  52,486  269,926  281,735 
Interest expense, net 4,534  1,147  7,902  6,611 
Other expense, net 2,355  939  5,828  3,170 
Income before income taxes 69,121  50,400  256,196  271,954 
Income tax expense 15,797  10,475  52,786  62,882 
Net income 53,324  39,925  203,410  209,072 
Less: Net income attributable to noncontrolling interests (1,487) (661) (4,074) (3,765)
Net income attributable to Acushnet Holdings Corp. $ 51,837  $ 39,264  $ 199,336  $ 205,307 
Net income per common share attributable to Acushnet Holdings Corp.:        
Basic $ 0.72  $ 0.53  $ 2.74  $ 2.75 
Diluted 0.72  0.52  2.72  2.73 
Weighted average number of common shares:        
Basic 71,706,824  74,533,652  72,701,647  74,656,837 
Diluted 72,334,398  75,301,431  73,209,719  75,292,647 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

7
ACUSHNET HOLDINGS CORP.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)
 
  Three months ended September 30, Nine months ended September 30,
(in thousands) 2022 2021 2022 2021
Net income $ 53,324  $ 39,925  $ 203,410  $ 209,072 
Other comprehensive loss:
Foreign currency translation adjustments (26,527) (8,768) (58,592) (16,810)
Cash flow derivative instruments:
Unrealized holding gains (losses) arising during period 6,106  (144) 18,155  4,900 
Reclassification adjustments included in net income (2,535) 1,877  (5,476) 4,960 
Tax expense (1,099) (298) (3,977) (2,879)
Cash flow derivative instruments, net 2,472  1,435  8,702  6,981 
Pension and other postretirement benefits:        
Pension and other postretirement benefits adjustments 2,252  1,581  5,788  4,937 
Tax expense (576) (368) (1,395) (1,291)
Pension and other postretirement benefits adjustments, net 1,676  1,213  4,393  3,646 
Total other comprehensive loss (22,379) (6,120) (45,497) (6,183)
Comprehensive income 30,945  33,805  157,913  202,889 
Less: Comprehensive income attributable to noncontrolling interests (1,446) (641) (3,862) (3,637)
Comprehensive income attributable to Acushnet Holdings Corp. $ 29,499  $ 33,164  $ 154,051  $ 199,252 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

8
ACUSHNET HOLDINGS CORP.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
 
  Nine months ended September 30,
(in thousands) 2022 2021
Cash flows from operating activities    
Net income $ 203,410  $ 209,072 
Adjustments to reconcile net income to cash flows (used in) provided by operating activities
Depreciation and amortization 30,894  30,816 
Unrealized foreign exchange loss (gain) 12,531  (1,721)
Amortization of debt issuance costs 1,835  1,337 
Share-based compensation 18,159  20,822 
(Gain) loss on disposals of property, plant and equipment (3,257) 146 
Deferred income taxes 6,928  16,633 
Changes in operating assets and liabilities
Accounts receivable (176,531) (105,707)
Inventories (156,065) 26,242 
Accounts payable 21,437  26,627 
Accrued taxes (3,419) 24,366 
Other assets and liabilities (14,964) 31,458 
Cash flows (used in) provided by operating activities (59,042) 280,091 
Cash flows from investing activities    
Additions to property, plant and equipment (33,638) (19,210)
Other, net 4,542  — 
Cash flows used in investing activities (29,096) (19,210)
Cash flows from financing activities
Proceeds from (repayments of) short-term borrowings, net (Note 5)
 31,056  (2,177)
Proceeds from revolving credit facility 483,000  — 
Repayments of revolving credit facility (77,400) — 
Repayments of term loan facility (Note 5)
 (315,000) (13,125)
Purchases of common stock (138,158) (30,146)
Payment of debt issuance costs (2,583) — 
Dividends paid on common stock (39,672) (37,058)
Dividends paid to noncontrolling interests (1,601) (1,360)
Payment of employee restricted stock tax withholdings (10,661) (3,946)
Other, net (3,600) — 
Cash flows used in financing activities (74,619) (87,812)
Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash (10,463) (4,015)
Net (decrease) increase in cash, cash equivalents and restricted cash (173,220) 169,054 
Cash, cash equivalents and restricted cash, beginning of year 281,677  151,452 
Cash, cash equivalents and restricted cash, end of period $ 108,457  $ 320,506 
Supplemental non-cash information    
Additions to property, plant and equipment $ 6,757  $ 3,105 
Additions to right-of-use assets obtained in exchange for operating lease obligations 17,919  7,341 
Additions to right-of-use assets obtained in exchange for finance lease obligations 335  150 
Additions to treasury stock 1,595  — 
Dividend equivalents rights ("DERs") declared not paid 1,323  1,537 
Contingent consideration (Note 1)
 1,400  — 
Magnus share repurchase liability (Note 10)
 41,577  — 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

9
ACUSHNET HOLDINGS CORP.
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (UNAUDITED)
  Common Stock Additional
Paid-in
Capital		 Accumulated
Other
Comprehensive
Loss,
Net of Tax		 Retained
Earnings		 Treasury Stock Total
Shareholders'
Equity
Attributable
to Acushnet
Holdings Corp.		 Noncontrolling
Interests		 Total
Shareholders'
Equity
(in thousands) Shares Amount
Balances as of June 30, 2021 75,855  $ 76  $ 934,919  $ (96,245) $ 338,633  $ (54,213) $ 1,123,170  $ 36,882  $ 1,160,052 
Net income —  —  —  —  39,264  —  39,264  832  40,096 
Other comprehensive loss —  —  —  (6,120) —  —  (6,120) —  (6,120)
Share-based compensation —  —  6,852  —  —  —  6,852  —  6,852 
Purchases of common stock (Note 10)
 —  —  —  —  —  (12,261) (12,261) —  (12,261)
Dividends and dividend equivalents declared —  —  —  —  (12,692) —  (12,692) —  (12,692)
Dividends declared to noncontrolling interests
 —  —  —  —  —  —  —  (1,249) (1,249)
Balances as of September 30, 2021 75,855  $ 76  $ 941,771  $ (102,365) $ 365,205  $ (66,474) $ 1,138,213  $ 36,465  $ 1,174,678 
Balances as of June 30, 2022 76,289  $ 76  $ 949,206  $ (122,700) $ 444,592  $ (200,001) $ 1,071,173  $ 34,654  $ 1,105,827 
Net income —  —  —  —  51,837  —  51,837  1,594  53,431 
Other comprehensive loss —  —  —  (22,379) —  —  (22,379) —  (22,379)
Share-based compensation —  —  5,673  —  —  —  5,673  —  5,673 
Vesting of restricted common stock, including impact of DERs,
net of shares withheld for employee taxes (Note 11)
 33  —  47  —  —  —  47  —  47 
Purchases of common stock (Note 10) —  —  —  —  —  (41,577) (41,577) —  (41,577)
Share repurchase liability (Note 10) —  —  —  —  —  (41,577) (41,577) —  (41,577)
Dividends and dividend equivalents declared —  —  —  —  (13,192) —  (13,192) —  (13,192)
Balances as of September 30, 2022 76,322  $ 76  $ 954,926  $ (145,079) $ 483,237  $ (283,155) $ 1,010,005  $ 36,248  $ 1,046,253 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
10
ACUSHNET HOLDINGS CORP.
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (UNAUDITED)
  Common Stock Additional
Paid-in
Capital		 Accumulated
Other
Comprehensive
Loss,
Net of Tax		 Retained
Earnings		 Treasury Stock Total
Shareholders'
Equity
Attributable
to Acushnet
Holdings Corp.		 Noncontrolling
Interests		 Total
Shareholders'
Equity
(in thousands) Shares Amount
Balances as of December 31, 2020 75,666  $ 76  $ 925,385  $ (96,182) $ 199,776  $ (45,106) $ 983,949  $ 33,304  $ 1,017,253 
Net income —  —  —  —  205,307  —  205,307  4,521  209,828 
Other comprehensive loss —  —  —  (6,183) —  —  (6,183) —  (6,183)
Share-based compensation —  —  20,331  —  —  —  20,331  —  20,331 
Vesting of restricted common stock, including impact of DERs,
net of shares withheld for employee taxes (Note 11)
 189  —  (3,945) —  —  —  (3,945) —  (3,945)
Purchases of common stock (Note 10)
 —  —  —  —  —  (21,368) (21,368) —  (21,368)
Dividends and dividend equivalents declared —  —  —  —  (38,227) —  (38,227) —  (38,227)
Dividends declared to noncontrolling interests
 —  —  —  —  —  —  —  (1,360) (1,360)
Redemption value adjustment (Note 1) —  —  —  —  (1,651) —  (1,651) —  (1,651)
Balances as of September 30, 2021 75,855  $ 76  $ 941,771  $ (102,365) $ 365,205  $ (66,474) $ 1,138,213  $ 36,465  $ 1,174,678 
Balances as of December 31, 2021 75,855  $ 76  $ 948,423  $ (99,582) $ 324,966  $ (131,039) $ 1,042,844  $ 37,423  $ 1,080,267 
Purchase of equity from noncontrolling interests (Note 1) —  —  (838) —  —  —  (838) (3,905) (4,743)
Net income —  —  —  —  199,336  —  199,336  4,331  203,667 
Other comprehensive loss —  —  —  (45,497) —  —  (45,497) —  (45,497)
Share-based compensation —  —  17,667  —  —  —  17,667  —  17,667 
Vesting of restricted common stock, including impact of DERs,
net of shares withheld for employee taxes (Note 11)
 467  —  (10,326) —  —  —  (10,326) —  (10,326)
Purchases of common stock (Note 10)
 —  —  —  —  —  (110,539) (110,539) —  (110,539)
Share repurchase liability (Note 10)
 —  —  —  —  —  (41,577) (41,577) —  (41,577)
Dividends and dividend equivalents declared —  —  —  —  (40,065) —  (40,065) —  (40,065)
Dividends declared to noncontrolling interests
 —  —  —  —  —  —  —  (1,601) (1,601)
Redemption value adjustment (Note 1)
 —  —  —  —  (1,000) —  (1,000) —  (1,000)
Balances as of September 30, 2022 76,322  $ 76  $ 954,926  $ (145,079) $ 483,237  $ (283,155) $ 1,010,005  $ 36,248  $ 1,046,253 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

11
ACUSHNET HOLDINGS CORP.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. Summary of Significant Accounting Policies
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”) and include the accounts of Acushnet Holdings Corp. (the “Company”), its wholly-owned subsidiaries and less than wholly-owned subsidiaries, including a variable interest entity (“VIE”) in which the Company is the primary beneficiary. All intercompany balances and transactions have been eliminated in consolidation.
Certain information in footnote disclosures normally included in annual financial statements has been condensed or omitted for the interim periods presented in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”) and U.S. GAAP. The year-end balance sheet data was derived from audited financial statements; however, the accompanying interim notes to the unaudited condensed consolidated financial statements do not include all disclosures required by U.S. GAAP. In the opinion of management, the financial statements contain all normal and recurring adjustments necessary to state fairly the financial position and results of operations of the Company. The results of operations for the three and nine months ended September 30, 2022 are not necessarily indicative of results to be expected for the full year ending December 31, 2022, nor were those of the comparable 2021 periods representative of those actually experienced for the full year ended December 31, 2021. These unaudited interim condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and related notes for the fiscal year ended December 31, 2021 included in its Annual Report on Form 10-K filed with the SEC on March 1, 2022.
Use of Estimates
The preparation of the Company’s unaudited condensed consolidated financial statements in accordance with U.S. GAAP requires management to make estimates and judgments that affect reported amounts of assets and liabilities and related disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates.
The Company has evaluated, and continues to evaluate, the potential impact of the COVID-19 pandemic on its consolidated financial statements. The impact of the COVID-19 pandemic continues to evolve, and both the full impact and duration of the COVID-19 pandemic remain highly uncertain. Accordingly, the Company's business, results of operations, financial position and cash flows could be materially impacted in ways that the Company cannot currently predict.
Variable Interest Entities
VIEs are entities that, by design, either (i) lack sufficient equity to permit the entity to finance its activities independently, or (ii) have equity holders that do not have the power to direct the activities of the entity that most significantly impact its economic performance, the obligation to absorb the entity’s expected losses, or the right to receive the entity’s expected residual returns. The Company consolidates a VIE when it is the primary beneficiary, which is the party that has both (i) the power to direct the activities that most significantly impact the VIE’s economic performance and (ii) through its interests in the VIE, the obligation to absorb expected losses or the right to receive expected benefits from the VIE that could potentially be significant to the VIE.
The Company consolidates the accounts of Acushnet Lionscore Limited, a VIE which is 40% owned by the Company. The sole purpose of the VIE is to manufacture the Company’s golf footwear and as such, the Company is deemed to be the primary beneficiary. The Company has presented separately on its unaudited condensed consolidated balance sheets, to the extent material, the assets of its consolidated VIE that can only be used to settle specific obligations of its consolidated VIE and the liabilities of its consolidated VIE for which creditors do not have recourse to its general credit. The general creditors of the VIE do not have recourse to the Company. Certain directors of the VIE have guaranteed the credit lines of the VIE, for which there were no outstanding borrowings as of September 30, 2022 and December 31, 2021. In addition, pursuant to the terms of the agreement governing the VIE, the Company is not required to provide financial support to the VIE.
12
Noncontrolling Interests and Redeemable Noncontrolling Interest
The ownership interests held by owners other than the Company in less than wholly-owned subsidiaries are classified as noncontrolling interests. The financial results and position of noncontrolling interests are included in the Company’s unaudited condensed consolidated financial statements. The value attributable to the noncontrolling interests is presented on the unaudited condensed consolidated balance sheets, separately from the equity attributable to the Company. Net income (loss) and comprehensive income (loss) attributable to noncontrolling interests are presented separately on the unaudited condensed consolidated statements of operations and unaudited condensed consolidated statements of comprehensive income, respectively.
On April 1, 2022, the Company acquired the outstanding equity interest in PG Golf LLC for $5.0 million, including cash consideration of $3.6 million and contingent consideration of $1.4 million, which was included in other noncurrent liabilities on the unaudited condensed consolidated balance sheet as of September 30, 2022.
Redeemable noncontrolling interests are those noncontrolling interests which are or may become redeemable at a fixed or determinable price on a fixed or determinable date, at the option of the holder, or upon occurrence of an event. The Company initially recorded the redeemable noncontrolling interest at its acquisition date fair value. The carrying amount of the redeemable noncontrolling interest is subsequently adjusted to the greater amount of either the initial carrying amount, increased or decreased for the redeemable noncontrolling interest's share of comprehensive income (loss) or the redemption value, assuming the noncontrolling interest is redeemable at the balance sheet date. This adjustment is recognized through retained earnings and is not reflected in net income (loss) or comprehensive income (loss). During the nine months ended September 30, 2022 and 2021, the Company recorded a redemption value adjustment of $1.0 million and $1.7 million, respectively. The value attributable to the redeemable noncontrolling interest and the related loan to minority shareholders, which is recorded as a reduction to redeemable noncontrolling interest, is presented in the unaudited condensed consolidated balance sheets as temporary equity between liabilities and shareholders’ equity. The amount of the loan to minority shareholders was $4.4 million as of both September 30, 2022 and December 31, 2021.
Cash, Cash Equivalents and Restricted Cash
Cash held in Company checking accounts is included in cash. Cash equivalents consist of short-term highly liquid investments with original maturities of three months or less which are readily convertible into cash. The Company classifies as restricted certain cash that is not available for use in its operations. As of September 30, 2022 and December 31, 2021, the amount of restricted cash included in cash, cash equivalents and restricted cash on the unaudited condensed consolidated balance sheets was $1.7 million and $1.9 million, respectively.
Foreign Currency Transactions
Foreign currency transaction losses included in selling, general and administrative expenses were $6.2 million and $0.7 million for the three months ended September 30, 2022 and 2021, respectively. Foreign currency transaction losses included in selling, general and administrative expenses were $15.0 million and $1.9 million for the nine months ended September 30, 2022 and 2021, respectively.
Recently Adopted Accounting Standards
The Company considers the applicability and impact of all Accounting Standards Updates ("ASUs"). Management determined that recently issued ASUs are not expected to have a material impact on the Company's consolidated financial statements.

13
2. Allowance for Doubtful Accounts
The Company estimates expected credit losses using a number of factors, including customer credit ratings, age of receivables, historical credit loss information and current and forecasted economic conditions (including the impact of the COVID-19 pandemic) which could affect the collectability of the reported amounts. All of these factors have been considered in the estimate of expected credit losses.
The activity related to the allowance for doubtful accounts was as follows:
Three months ended September 30, Nine months ended September 30,
(in thousands) 2022 2021 2022 2021
Balance at beginning of period $ 7,918  $ 7,334  $ 5,980  $ 7,698 
Bad debt expense 193  626  2,648  324 
Amount of receivables written off (203) (224) (472) (268)
Foreign currency translation (227) (74) (475) (92)
Balance at end of period $ 7,681  $ 7,662  $ 7,681  $ 7,662 
3. Inventories
The components of inventories were as follows: 
September 30, December 31,
(in thousands) 2022 2021
Raw materials and supplies $ 139,282  $ 105,784 
Work-in-process 28,650  21,259 
Finished goods 368,810  286,271 
Inventories $ 536,742  $ 413,314 
4. Product Warranty
The Company has defined warranties generally ranging from one to two years. Products covered by the defined warranty policies primarily include all Titleist golf products, FootJoy golf shoes and FootJoy golf outerwear. These product warranties generally obligate the Company to pay for the cost of replacement products, including the cost of shipping replacement products to its customers. The estimated cost of satisfying future warranty claims is accrued at the time the sale is recorded. In estimating future warranty obligations, the Company considers various factors, including its warranty policies and practices, the historical frequency of claims and the cost to replace or repair products under warranty.
The activity related to the Company’s warranty obligation for accrued warranty expense was as follows:
  Three months ended September 30, Nine months ended September 30,
(in thousands) 2022 2021 2022 2021
Balance at beginning of period $ 4,077  $ 4,333  $ 4,177  $ 3,831 
Provision 1,286  1,414  3,497  4,099 
Claims paid (1,333) (1,406) (3,489) (3,553)
Foreign currency translation and other (150) (65) (305) (101)
Balance at end of period $ 3,880  $ 4,276  $ 3,880  $ 4,276 
14
5. Debt and Financing Arrangements
Credit Facility
On August 2, 2022, the Company entered into a second amendment and agency resignation, appointment and assumption (the “Second Amendment”) to its Amended and Restated Credit Agreement, dated as of December 23, 2019 (as subsequently amended on July 3, 2020 (the “First Amended Credit Agreement”), and the First Amended Credit Agreement, as amended pursuant to the Second Amendment (the “Second Amended Credit Agreement”), with Acushnet Company, Acushnet Canada Inc. and Acushnet Europe Limited, as borrowers, certain subsidiaries of Acushnet Company, together with the Company, as guarantors, the lenders party thereto, Wells Fargo Bank, National Association, as resigning administrative agent, and JPMorgan Chase Bank, N.A., as successor administrative agent (the “Administrative Agent”). The Second Amended Credit Agreement, together with related security, guarantee and other agreements, is referred to as the “Second Amended Credit Facility.” The First Amended Credit Agreement, together with related security, guarantee and other agreements, is referred to as the “First Amended Credit Facility.”
The Second Amended Credit Facility provides a $950.0 million multi‑currency revolving credit facility, including a $50.0 million letter of credit sublimit, a $75.0 million swing line sublimit, a C$50.0 million sublimit for borrowings by Acushnet Canada, Inc., a £45.0 million sublimit for borrowings by Acushnet Europe Limited and an alternative currency sublimit of $200.0 million for borrowings in Canadian dollars, euros, pounds sterling, Japanese yen and other currencies agreed to by the lenders and the Administrative Agent. The Second Amended Credit Facility matures on August 2, 2027, and as a result, the related borrowings have been classified as long term debt.
On August 2, 2022, borrowings under the Second Amended Credit Facility, were used to prepay in full the outstanding term loans under the First Amended Credit Facility, refinance outstanding revolving credit facility borrowings under the First Amended Credit Facility and pay accrued interest and closing fees. Immediately prior to payment, the aggregate amounts outstanding related to the term loans and revolving credit facility were approximately $306.3 million and $72.6 million, respectively. In connection with amending its credit facility, the Company incurred debt issuance costs of approximately $2.6 million, which were included in other assets on the unaudited condensed consolidated balance sheet and will be amortized to interest expense, net over the term of the Second Amended Credit Facility. In addition, the prepayment of the First Amended Credit Facility resulted in additional interest expense of approximately $1.3 million for the three and nine months ended September 30, 2022.

Acushnet Company has the right under the Second Amended Credit Facility to request term loans and/or increases in the revolving commitments in an aggregate principal amount not to exceed (i) the greater of $325.0 million and 100% of the last four quarters' EBITDA plus (ii) an unlimited amount, so long as the Net Average Secured Leverage Ratio (as defined in the Second Amended Credit Agreement) does not exceed 2.50:1.00 on a pro forma basis. The lenders under the Second Amended Credit Facility will not be under any obligation to provide any such term loans or increases to the revolving commitments, and the incurrence of any term loans or increases to the revolving credit commitments is subject to customary conditions precedent.
Borrowings under the Second Amended Credit Facility bear interest at a rate per annum equal to, at the applicable Borrower’s option, (i) for loans denominated in U.S. dollars, either (A) a base rate, which is the greatest of (1) the prime rate last published in the Wall Street Journal, (2) the greater of the federal funds effective rate as determined by the Federal Reserve Bank of New York and the overnight bank funding rate as determined by the Federal Reserve Bank of New York, in either case, plus 0.50% and (3) the one-month Term SOFR Rate, plus 0.10% per annum, plus 1.00%, or (B) the greater of the Term SOFR Rate for the applicable interest period, plus 0.10% per annum, and zero; (ii) for loans denominated in Sterling, the greater of an Adjusted Daily Simple RFR determined based on SONIA and zero; (iii) for loans denominated in Euros, the greater of an Adjusted EURIBOR Rate for the applicable interest period and zero; (iv) for loans denominated in Canadian Dollars, the greater of an Adjusted Canadian Dollar Offered Rate for the applicable interest period and zero; and (v) for loans denominated in Japanese Yen, the greater of an Adjusted TIBOR Rate for the applicable interest period and zero, in the case of sub-clauses (i) through (v) above, plus an applicable margin. Under the Second Amended Credit Agreement, the applicable margin is 0.00% to 0.75% for base rate borrowings and 1.00% to 1.75% for Adjusted Term SOFR borrowings, Adjusted Daily Simple RFR borrowings, Adjusted EURIBOR Rate borrowings, Adjusted Canadian Dollar Offered Rate borrowings and Adjusted TIBOR Rate borrowings, in each case, depending on the Net Average Total Leverage Ratio (as defined in the Second Amended Credit Agreement). In addition, the Second Amended Credit Facility requires a commitment fee rate payable in respect of unused portions of the revolving credit facility of 0.125% to 0.275% per annum, depending on the Net Average Total Leverage Ratio.
The Second Amended Credit Agreement contains customary affirmative and restrictive covenants, including, among others, financial covenants based on the Company's leverage and interest coverage ratios. The quarterly-tested maximum Net
15
Average Total Leverage Ratio covenant in the Second Amended Credit Agreement is 3.75:1.00, which is subject to increase to 4.25:1.00 for the four fiscal quarters immediately following certain acquisitions. The quarterly-tested Consolidated Interest Coverage Ratio covenant in the Second Amended Credit Agreement shall be less than 3.00:1.00. It 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 September 30, 2022, the Company was in compliance with all covenants under the Second Amended Credit Agreement.
As of September 30, 2022, there were $405.6 million in outstanding borrowings under the Company's revolving credit facility with a weighted average interest rate of 4.28%. As of September 30, 2022, the Company had available borrowings under its revolving credit facility of $537.3 million after giving effect to $7.1 million of outstanding letters of credit.
Other Short-Term Borrowings
The Company has certain unsecured local credit facilities available through its subsidiaries. There were $27.5 million and $0.1 million in outstanding borrowings under the Company's local credit facilities as of September 30, 2022 and December 31, 2021, respectively. The weighted average interest rate applicable to the outstanding borrowings was 0.49% and 2.57% as of September 30, 2022 and December 31, 2021, respectively. As of September 30, 2022, the Company had available borrowings remaining under these local credit facilities of $32.1 million.
Letters of Credit
As of September 30, 2022 and December 31, 2021, there were outstanding letters of credit related to agreements, including the Company's Second Amended Credit Facility, totaling $9.9 million and $17.3 million, respectively, of which $7.5 million and $14.3 million, respectively, was secured. These agreements provided a maximum commitment for letters of credit of $57.5 million as of September 30, 2022.
6. Derivative Financial Instruments
The Company principally uses derivative financial instruments to reduce the impact of foreign currency fluctuations and interest rate variability on the Company's results of operations. The principal derivative financial instruments the Company enters into are foreign exchange forward contracts and interest rate swaps. The Company does not enter into derivative financial instrument contracts for trading or speculative purposes.
Foreign Exchange Derivative Instruments
Foreign exchange forward contracts are foreign exchange derivative instruments primarily used to reduce foreign currency risk related to transactions denominated in a currency other than functional currency. These instruments are designated as cash flow hedges. The periods of the foreign exchange forward contracts correspond to the periods of the hedged forecasted transactions, which do not exceed 24 months subsequent to the latest balance sheet date. The primary foreign exchange forward contracts pertain to the U.S. dollar, the Japanese yen, the British pound sterling, the Canadian dollar, the Korean won and the euro. The gross U.S. dollar equivalent notional amount outstanding of all foreign exchange forward contracts designated under hedge accounting as of September 30, 2022 and December 31, 2021 was $220.8 million and $228.8 million, respectively.
The Company also enters into foreign exchange forward contracts, which either do not qualify as hedging instruments or have not been designated as such, to reduce foreign currency transaction risk related to certain intercompany assets and liabilities denominated in a currency other than functional currency. These undesignated instruments are recorded at fair value as a derivative asset or liability with the corresponding change in fair value recognized in selling, general and administrative expenses. There were no outstanding foreign exchange forward contracts not designated under hedge accounting as of September 30, 2022 and December 31, 2021. Selling, general and administrative expenses during the nine months ended September 30, 2022 included a gain of $1.2 million related to undesignated foreign exchange forward derivative instruments.
Interest Rate Derivative Instruments
The Company enters into interest rate swap contracts to reduce interest rate risk related to floating rate debt. Under the contracts, the Company pays fixed and receives variable rate interest, in effect converting a portion of its floating rate debt to fixed rate debt. Interest rate swap contracts are accounted for as cash flow hedges. As of September 30, 2022 and December 31, 2021, there were no interest rate swap contracts outstanding.
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Impact on Financial Statements
The fair value of hedge instruments recognized on the unaudited condensed consolidated balance sheets was as follows:
(in thousands) September 30, December 31,
Balance Sheet Location Hedge Instrument Type 2022 2021
Prepaid and other assets Foreign exchange forward $ 15,990  $ 6,320 
Other assets Foreign exchange forward 4,184  1,491 
Accrued expenses and other liabilities Foreign exchange forward 2,006  488 
The hedge instrument gain (loss) recognized in accumulated other comprehensive loss, net of tax was as follows:
  Three months ended Nine months ended
  September 30, September 30,
(in thousands) 2022 2021 2022 2021
Type of hedge        
Foreign exchange forward $ 6,106  $ (144) $ 18,155  $ 4,908 
Interest rate swap —  —  —  (8)
 Total $ 6,106  $ (144) $ 18,155  $ 4,900 
Gains and losses on derivative instruments designated as cash flow hedges are reclassified from accumulated other comprehensive loss, net of tax at the time the forecasted hedged transaction impacts the statements of operations or at the time the hedge is determined to be ineffective. Based on the current valuation, during the next 12 months the Company expects to reclassify a net gain of $14.2 million related to foreign exchange derivative instruments from accumulated other comprehensive loss, net of tax, into cost of goods sold. For further information related to amounts recognized in accumulated other comprehensive loss, net of tax, see Note 12.
The hedge instrument gain (loss) recognized on the unaudited condensed consolidated statements of operations was as follows:
  Three months ended Nine months ended
  September 30, September 30,
(in thousands) 2022 2021 2022 2021
Location of gain (loss) in statements of operations        
Foreign exchange forward:
Cost of goods sold $ 2,535  $ (1,877) $ 5,476  $ (3,391)
Selling, general and administrative (1)
 1,779  430  4,737  1,063 
Total $ 4,314  $ (1,447) $ 10,213  $ (2,328)
Interest Rate Swap:
Interest expense, net $ —  $ —  $ —  $ (1,569)
Total $ —  $ —  $ —  $ (1,569)
_______________________________________________________________________________
(1)    Relates to net gains on foreign exchange forward contracts derived from previously designated cash flow hedges.
Credit Risk
The Company enters into derivative contracts with major financial institutions with investment grade credit ratings and is exposed to credit losses in the event of non-performance by these financial institutions. This credit risk is generally limited to the unrealized gains in the derivative contracts. However, the Company monitors the credit quality of these financial institutions, as well as its own credit quality, and considers the risk of counterparty default to be minimal.

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7. Fair Value Measurements
Certain assets and liabilities are carried at fair value under U.S. GAAP. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs.
Assets and liabilities measured at fair value on a recurring basis as of September 30, 2022 were as follows:
  Fair Value Measurements as of  
  September 30, 2022 using:  
(in thousands) Level 1 Level 2 Level 3 Balance Sheet Location
Assets        
Rabbi trust $ 3,769  $ —  $ —  Prepaid and other assets
Foreign exchange derivative instruments —  15,990  —  Prepaid and other assets
Deferred compensation program assets 599  —  —  Other assets
Foreign exchange derivative instruments —  4,184  —  Other assets
Total assets $ 4,368  $ 20,174  $ —   
Liabilities        
Foreign exchange derivative instruments $ —  $ 2,006  $ —  Accrued expenses and other liabilities
Deferred compensation program liabilities 599  —  —  Other noncurrent liabilities
Total liabilities $ 599  $ 2,006  $ —   
Assets and liabilities measured at fair value on a recurring basis as of December 31, 2021 were as follows:
  Fair Value Measurements as of  
  December 31, 2021 using:  
(in thousands) Level 1 Level 2 Level 3 Balance Sheet Location
Assets        
Rabbi trust $ 5,364  $ —  $ —  Prepaid and other assets
Foreign exchange derivative instruments —  6,320  —  Prepaid and other assets
Deferred compensation program assets 842  —  —  Other assets
Foreign exchange derivative instruments —  1,491  —  Other assets
Total assets $ 6,206  $ 7,811  $ —   
Liabilities        
Foreign exchange derivative instruments $ —  $ 488  $ —  Accrued expenses and other liabilities
Deferred compensation program liabilities 842  —  —  Other noncurrent liabilities
Total liabilities $ 842  $ 488  $ —   
Rabbi trust assets are used to fund certain retirement obligations of the Company. The assets underlying the Rabbi trust are equity and fixed income exchange-traded funds.
Deferred compensation program assets and liabilities represent a program where select employees could defer compensation until termination of employment. Effective July 29, 2011, this program was amended to cease all employee compensation deferrals and provided for the distribution of all previously deferred employee compensation. The program remains in effect with respect to the value attributable to the employer match contributed prior to July 29, 2011.
Foreign exchange derivative instruments are foreign exchange forward contracts primarily used to limit currency risk that would otherwise result from changes in foreign exchange rates (Note 6). The Company uses the mid-price of foreign exchange forward rates as of the close of business on the valuation date to value each foreign exchange forward contract at each reporting period.

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8. Pension and Other Postretirement Benefits
Components of net periodic benefit cost were as follows: 
  Pension Benefits Postretirement Benefits
  Three months ended September 30,
(in thousands) 2022 2021 2022 2021
Components of net periodic benefit cost        
Service cost $ 1,954  $ 2,039  $ 141  $ 168 
Interest cost 2,204  2,016  89  75 
Expected return on plan assets (1,882) (2,463) —  — 
Settlement expense 685  531  —  — 
Amortization of net loss (gain) 989  845  (120) (80)
Amortization of prior service cost (credit) 66  69  (35) (35)
Net periodic benefit cost $ 4,016  $ 3,037  $ 75  $ 128 
Components of net periodic benefit cost were as follows: 
  Pension Benefits Postretirement Benefits
  Nine months ended September 30,
(in thousands) 2022 2021 2022 2021
Components of net periodic benefit cost        
Service cost $ 5,953  $ 6,166  $ 422  $ 503 
Interest cost 6,655  6,161  265  226 
Expected return on plan assets (5,644) (7,409) —  — 
Settlement expense 685  2,068  —  — 
Amortization of net loss (gain) 2,966  2,961  (351) (240)
Amortization of prior service cost (credit) 203  210  (103) (103)
Net periodic benefit cost $ 10,818  $ 10,157  $ 233  $ 386 
The non-service cost components of net periodic benefit cost are included in other expense, net in the unaudited condensed consolidated statements of operations.
9. Income Taxes
Income tax expense increased $5.3 million to $15.8 million for the three months ended September 30, 2022 compared to $10.5 million for the three months ended September 30, 2021. The Company’s effective tax rate ("ETR") was 22.9% for the three months ended September 30, 2022 compared to 20.8% for the three months ended September 30, 2021. Income tax expense decreased $10.1 million to $52.8 million for the nine months ended September 30, 2022 compared to $62.9 million for the nine months ended September 30, 2021. The Company’s ETR was 20.6% for the nine months ended September 30, 2022 compared to 23.1% for the nine months ended September 30, 2021.
The ETR for the three and nine months ended September 30, 2022 differed from the U.S. statutory tax rate primarily due to the impact of the U.S. deduction for foreign derived intangible income and federal and state tax credits, as well as the U.S. taxation of foreign income and the Company's geographic mix of income. The ETR for the three and nine months ended September 30, 2021 differed from the U.S. statutory tax rate primarily due to the U.S. taxation of foreign income and the Company's geographic mix of income, as well as the impact of the U.S. deduction for foreign derived intangible income and federal and state tax credits.
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10. Common Stock
Dividends
The Company declared dividends per common share, including DERs (Note 11), during the periods presented as follows:
Dividends per Common Share
Amount
(in thousands)
2022:
Third Quarter $ 0.180  $ 13,192 
Second Quarter 0.180  13,400 
First Quarter 0.180  13,473 
Total dividends declared in 2022 $ 0.540  $ 40,065 
2021:
Fourth Quarter $ 0.165  $ 12,619 
Third Quarter 0.165  12,692 
Second Quarter 0.165  12,768 
First Quarter 0.165  12,767 
Total dividends declared in 2021 $ 0.660  $ 50,846 
During the fourth quarter of 2022, the Company's Board of Directors declared a dividend of $0.180 per share of common stock to shareholders of record as of December 2, 2022 and payable on December 16, 2022.
Share Repurchase Program
On July 26, 2022, the Board of Directors authorized the Company to repurchase up to an additional $100.0 million of its issued and outstanding common stock, bringing the total authorization up to $450.0 million as of September 30, 2022. Share repurchases may be effected from time to time in open market or privately negotiated transactions, including transactions with affiliates, with the timing of purchases and the amount of stock purchased generally determined at the discretion of the Company consistent with the Company's general working capital needs and within the constraints of the Company’s credit agreement.
On May 10, 2019, in connection with this share repurchase program, the Company entered into an agreement with Magnus Holdings Co., Ltd. (“Magnus”), a wholly-owned subsidiary of Fila Holdings Corp., to purchase from Magnus an equal amount of its common stock as it purchases on the open market, up to an aggregate of $24.9 million, at the same weighted average per share price (the "2019 Agreement"). As the Company purchased a cumulative total of $24.9 million of its common stock through open market purchases, the determination date, as defined in the 2019 Agreement, was automatically triggered on March 18, 2021. As a result, on April 2, 2021, the Company purchased 355,341 shares of its common stock for an aggregate of $11.1 million from Magnus, in satisfaction of its obligations under the 2019 Agreement.
On November 8, 2021, the Company entered into a new agreement with Magnus to purchase from Magnus an equal amount of its common stock as it purchases on the open market, up to an aggregate of $37.5 million, at the same weighted average per share price (the "2021 Agreement"). In relation to the 2021 Agreement, the Company recorded a share repurchase liability of $29.2 million for 537,839 shares of its common stock, which was included in accrued expenses and other liabilities and treasury stock on the consolidated balance sheet as of December 31, 2021. Between January 1, 2022 and January 14, 2022, the Company purchased an additional 161,980 shares of its common stock on the open market for an aggregate of $8.3 million, bringing the cumulative total open market purchases to $37.5 million. As a result, on January 24, 2022, the Company purchased 699,819 shares of its common stock for an aggregate of $37.5 million from Magnus, in satisfaction of its obligations under the 2021 Agreement.
On June 16, 2022, the Company entered into a new agreement with Magnus to purchase from Magnus an equal amount of its common stock as it purchases on the open market over the period of time from July 1, 2022 through January 13, 2023, up to an aggregate of $75.0 million, at the same weighted average per share price (the "2022 Agreement"). On August 30, 2022, the Company amended and restated the 2022 Agreement to increase the aggregate dollar amount of shares of its common stock that it will purchase from Magnus from $75.0 million to $100.0 million, (the "Amended and Restated 2022 Agreement"). In relation to this agreement, the Company recorded a share repurchase liability of $41.6 million for 869,368 shares of common stock, which was included in accrued expenses and other liabilities and treasury stock on the unaudited condensed consolidated balance sheet as of September 30, 2022.
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The Company's share repurchase activity for the periods presented was as follows:
Three months ended September 30, Nine months ended September 30,
(in thousands, except share and per share amounts) 2022 2021 2022 2021
Shares repurchased in the open market:
Shares repurchased 869,368  242,420  2,283,573  387,076 
Average price $ 47.82  $ 50.58  $ 44.78  $ 49.14 
Aggregate value $ 41,577  $ 12,261  $ 102,252  $ 19,021 
Shares repurchased from Magnus:
Shares repurchased —  —  699,819  355,341 
Average price (1)
 $ —  $ —  $ 53.59  $ 31.31 
Aggregate value $ —  $ —  $ 37,501  $ 11,125 
Total shares repurchased:
Shares repurchased 869,368  242,420  2,983,392  742,417 
Average price $ 47.82  $ 50.58  $ 46.84  $ 40.61 
Aggregate value $ 41,577  $ 12,261  $ 139,753  $ 30,146 
___________________________________
(1)    In accordance with the share repurchase agreements, shares purchased from Magnus are accrued for at the same weighted average price as those purchased on the open market, as if the purchase from Magnus had occurred on the same day. As such, the average price of Magnus repurchases during the current period will differ from open market repurchases due to the settlement of the previously recorded share repurchase liability, as well as, open market purchases made after the completion of the Magnus Share repurchase agreements.
As of September 30, 2022, the Company had $208.4 million remaining under the current share repurchase authorization, including $100.0 million related to the Amended and Restated 2022 Agreement. This program will remain in effect until completed or until terminated by the Board of Directors.
11. Equity Incentive Plans
Under the Acushnet Holdings Corp. 2015 Omnibus Incentive Plan (“2015 Plan”), the Company may grant stock options, stock appreciation rights, restricted shares of common stock, restricted stock units ("RSUs"), performance stock units ("PSUs") and other share-based and cash-based awards to members of the Board of Directors, officers, employees, consultants and advisors of the Company. As of September 30, 2022, the only awards granted under the 2015 Plan were RSUs and PSUs.
Restricted Stock and Performance Stock Units
RSUs granted to members of the Board of Directors vest immediately into shares of common stock. RSUs granted to Company officers generally vest over three years, with one-third of each grant vesting annually, subject to the recipient's continued employment with the Company. RSUs granted to other employees, consultants and advisors of the Company vest in accordance with the terms of the grants, generally either over three years or, beginning in 2022, with one-third of each grant vesting annually, subject to the recipient’s continued service to the Company. PSUs granted to Company officers and other employees vest based upon the Company's performance against specified metrics, generally over a three-year performance period, subject to the recipient's continued service to the Company. At the end of the performance period, the number of shares of common stock that could be issued is determined based upon the Company's performance against these metrics. The number of shares that could be issued can range from 0% to 200% of the recipient's target award. Recipients of the awards granted under the 2015 Plan may elect to defer receipt of all or any portion of any shares of common stock issuable upon vesting to a future date elected by the recipient.
All RSUs and PSUs granted under the 2015 Plan have DERs, which entitle holders of RSUs and PSUs to the same dividend value per share as holders of common stock and can be paid in either cash or common stock. DERs are subject to the same vesting and other terms and conditions as the corresponding unvested RSUs and PSUs. DERs are paid when the underlying shares of common stock are delivered.
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A summary of the Company’s RSUs and PSUs as of September 30, 2022 and changes during the nine months then ended is presented below: 
  Weighted- Weighted-
  Number Average Number Average
  of RSUs Fair Value RSUs of PSUs Fair Value PSUs
Outstanding as of December 31, 2021 691,373  $ 33.66  367,067  $ 32.84 
Granted 371,445  43.90  167,611  43.96 
Vested (1)
 (91,641) 35.39  —  — 
Forfeited (21,470) 36.02  (3,518) 37.08 
Outstanding as of September 30, 2022 949,707  $ 37.44  531,160  $ 36.32 

_______________________________________________________________________________
(1) Includes 52,849 shares of common stock related to RSUs that were not delivered as of September 30, 2022.
Compensation expense recorded related to RSUs and PSUs in the unaudited condensed consolidated statements of operations was as follows:
  Three months ended Nine months ended
September 30, September 30,
(in thousands) 2022 2021 2022 2021
RSUs $ 3,149  $ 2,843  $ 10,101  $ 9,153 
PSUs 2,524  4,009  7,566  11,178 
The remaining unrecognized compensation expense related to unvested RSUs and unvested PSUs was $19.0 million and $12.9 million, respectively, as of September 30, 2022 and are expected to be recognized over the related weighted average period of 1.4 years and 1.7 years, respectively.
A summary of shares of common stock issued related to the 2015 Plan, including the impact of any DERs issued in common stock, is presented below:
Nine months ended Nine months ended
  September 30, 2022 September 30, 2021
RSUs PSUs RSUs PSUs
Shares of common stock issued 525,029  188,527  278,607  — 
Shares of common stock withheld by the Company as payment by employees in lieu of cash to satisfy tax withholding obligations
 (159,854) (87,215) (89,938) — 
Net shares of common stock issued 365,175  101,312  188,669  — 
Cumulative undelivered shares of common stock 407,173  191,242  405,334  — 
Compensation Expense
The allocation of share-based compensation expense in the unaudited condensed consolidated statements of operations was as follows:
  Three months ended Nine months ended
September 30, September 30,
(in thousands) 2022 2021 2022 2021
Cost of goods sold $ 342  $ 315  $ 984  $ 567 
Selling, general and administrative 5,085  6,299  15,998  19,207 
Research and development 410  398  1,177  1,048 
Total compensation expense before income tax 5,837  7,012  18,159  20,822 
Income tax benefit 1,219  1,610  3,744  4,722 
Total compensation expense, net of income tax $ 4,618  $ 5,402  $ 14,415  $ 16,100 
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12. Accumulated Other Comprehensive Loss, Net of Tax
Accumulated other comprehensive loss, net of tax consists of foreign currency translation adjustments, unrealized gains and losses from derivative instruments designated as cash flow hedges (Note 6) and pension and other postretirement adjustments (Note 8).
The components of and adjustments to accumulated other comprehensive loss, net of tax, were as follows:
  Foreign Accumulated
  Foreign Exchange Pension and Other
Currency Derivative Other Comprehensive
(in thousands) Translation Instruments Postretirement Loss, Net of Tax
Balance as of December 31, 2021 $ (66,915) $ 5,167  $ (37,834) $ (99,582)
Other comprehensive (loss) income before reclassifications (58,592) 18,155  2,388  (38,049)
Amounts reclassified from accumulated other comprehensive loss, net of tax —  (5,476) 3,400  (2,076)
Tax expense —  (3,977) (1,395) (5,372)
Balance as of September 30, 2022 $ (125,507) $ 13,869  $ (33,441) $ (145,079)
13. Net Income per Common Share
The following is a computation of basic and diluted net income per common share attributable to Acushnet Holdings Corp.:
  Three months ended Nine months ended
  September 30, September 30,
(in thousands, except share and per share amounts) 2022 2021 2022 2021
Net income attributable to Acushnet Holdings Corp. $ 51,837  $ 39,264  $ 199,336  $ 205,307 
Weighted average number of common shares:
Basic 71,706,824  74,533,652  72,701,647  74,656,837 
RSUs 390,826  589,891  336,486  535,521 
PSUs 236,748  177,888  171,586  100,289 
Diluted 72,334,398  75,301,431  73,209,719  75,292,647 
Net income per common share attributable to Acushnet Holdings Corp.:
Basic $ 0.72  $ 0.53  $ 2.74  $ 2.75 
Diluted $ 0.72  $ 0.52  $ 2.72  $ 2.73 
Net income per common share attributable to Acushnet Holdings Corp. was calculated using the treasury stock method.
The Company’s potential dilutive securities for the three and nine months ended September 30, 2022 and 2021 include RSUs and PSUs. PSUs vest based upon achievement of performance targets and are excluded from the diluted shares outstanding unless the performance targets have been met as of the end of the applicable reporting period regardless of whether such performance targets are probable of achievement. During both 2022 and 2021, the minimum performance target was achieved relating to certain PSUs and as a result, these PSUs have been included in diluted shares outstanding for the three and nine months ended September 30, 2022 and 2021.
The following securities have been excluded from the calculation of diluted weighted-average common shares outstanding as their impact was determined to be anti-dilutive:
  Three months ended Nine months ended
  September 30, September 30,
  2022 2021 2022 2021
RSUs 852  —  126,262  97,161 
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14. Segment Information
The Company’s operating segments are based on how the Chief Operating Decision Maker (“CODM”) makes decisions about assessing performance and allocating resources. The Company has four reportable segments that are organized on the basis of product categories. These segments include Titleist golf balls, Titleist golf clubs, Titleist golf gear and FootJoy golf wear.
The CODM primarily evaluates performance using segment operating income (loss). Segment operating income (loss) includes directly attributable expenses and certain shared costs of corporate administration that are allocated to the reportable segments, but excludes interest expense, net, restructuring charges, the non-service cost component of net periodic benefit cost, transaction fees and other non-operating gains and losses as the Company does not allocate these to the reportable segments. The CODM does not evaluate a measure of assets when assessing performance.
Results shown for the three and nine months ended September 30, 2022 and 2021 are not necessarily those which would be achieved if each segment was an unaffiliated business enterprise. There are no intersegment transactions.
Information by reportable segment and a reconciliation to reported amounts are as follows:
Three months ended September 30, Nine months ended September 30,
(in thousands) 2022 2021 2022 2021
Net sales    
Titleist golf balls $ 181,243  $ 167,204  $ 546,374  $ 543,106 
Titleist golf clubs 153,877  135,605  478,880  444,253 
Titleist golf gear 59,194  46,618  172,473  164,713 
FootJoy golf wear 131,694  137,908  507,133  461,978 
Other 32,238  34,294  118,072  113,314 
Total net sales $ 558,246  $ 521,629  $ 1,822,932  $ 1,727,364 
Segment operating income    
Titleist golf balls $ 38,281  $ 31,977  $ 100,920  $ 106,788 
Titleist golf clubs 26,949  13,482  88,236  84,660 
Titleist golf gear 6,430  559  20,276  22,686 
FootJoy golf wear 1,919  4,446  45,256  53,574 
Other 3,618  3,234  21,212  16,253 
Total segment operating income 77,197  53,698  275,900  283,961 
Reconciling items:    
Interest expense, net (4,534) (1,147) (7,902) (6,611)
Non-service cost component of net periodic benefit cost (1,996) (958) (4,676) (3,874)
Other (1,546) (1,193) (7,126) (1,522)
Total income before income tax $ 69,121  $ 50,400  $ 256,196  $ 271,954 
Information as to the Company’s operations in different geographical areas is presented below. Net sales are categorized based on the location in which the sale originates.
Three months ended September 30, Nine months ended September 30,
(in thousands) 2022 2021 2022 2021
United States $ 327,639  $ 282,649  $ 974,187  $ 906,608 
EMEA (1)
 70,614  68,930  274,840  246,879 
Japan 34,364  47,919  118,554  149,884 
Korea 69,919  75,783  254,089  251,834 
Rest of world 55,710  46,348  201,262  172,159 
Total net sales $ 558,246  $ 521,629  $ 1,822,932  $ 1,727,364 
_______________________________________________________________________________
(1) Europe, the Middle East and Africa ("EMEA")
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15. Commitments and Contingencies
Purchase Obligations
During the normal course of its business, the Company enters into agreements to purchase goods and services, including purchase commitments for advertising (including media placement and production costs), finished goods inventory, capital expenditures and endorsement arrangements with professional golfers.
The Company's purchase obligations as of September 30, 2022 were as follows:
  Payments Due by Period
  Remainder of