Acushnet Holdings Corp. (GOLF) Files An 8-K Results of Operations and Financial Condition
Item 2.02 Results of Operations and Financial Condition.
The following is a presentation of certain financial information
for Acushnet Holdings Corp. (Acushnet) as of and for the
nine months ended September30, 2016 which was provided to Fila
Korea Co.,Ltd. (Fila Korea) for purposes of the financial
statements issued by Fila Korea on November14, 2016 in accordance
with its obligations under Korean law. Fila Koreas financial
statements are reported in accordance with International
Financial Reporting Standards (IFRS) and therefore the
information Acushnet provides to Fila Korea is also presented in
accordance with IFRS. The following table provides a
reconciliation of Acushnets financial information presented in
accordance with generally accepted accounting principles in the
United States (U.S. GAAP) to the financial information
provided to Fila Korea in accordance with IFRS.
Acushnet plans to issue a press release later this month
providing details with respect to the timing of its complete
financial results for the three and nine months ended
September30, 2016 as well as the details for its first quarterly
earnings conference call.
|
|
Netsales |
|
Netincome(loss) attributableto AcushnetHoldings |
|
Totalassets |
|
Totalliabilities |
|
|||||
|
|
(inthousands) |
|
|||||||||||
|
U.S. GAAP basis |
$ |
1,235,348 |
$ |
45,903 |
$ |
1,738,640 |
$ |
1,317,124 |
|||||
|
IFRS adjustments: |
|||||||||||||
|
Customer program expense |
|
|
|
|
|||||||||
|
Pension items(a) |
|
(3,466 |
) |
|
(1,083 |
) |
|||||||
|
Bifurcation of the conversion feature of the Convertible |
|
(5,625 |
) |
|
(48,745 |
) |
|||||||
|
Fair value of the conversion feature of the Convertible |
|
(95,531 |
) |
|
341,827 |
||||||||
|
Interest expense on the 7.5% Bonds(d) |
|
1,092 |
|
|
|||||||||
|
Interest expense on the Convertible Preferred Stock(e) |
|
(13,861 |
) |
|
|
||||||||
|
Fair value of the Convertible Preferred Stock(f) |
|
(48,450 |
) |
|
353,356 |
||||||||
|
Reversal of impairment loss on trademark value |
|
|
|
|
|||||||||
|
Advertising expense |
|
|
(1,292 |
) |
|
||||||||
|
Capital lease expense |
|
|
|
|
|||||||||
|
Income tax expense on intercompany transactions |
|
4,199 |
12,146 |
|
|||||||||
|
IFRS basis |
$ |
1,235,850 |
$ |
(115,137 |
) |
$ |
1,750,378 |
$ |
1,962,900 |
(a)Pension expense was higher under IFRS than U.S. GAAP due to
the different discount rates used for calculating the present
value of pension obligations and the estimated return on pension
plan assets.
(b)Under IFRS, Acushnets 7.5% convertible notes due 2021 (the
Convertible Notes) were required to be bifurcated into a debt
component and a separate conversion feature component. At
issuance of the Convertible Notes, the debt component was
recorded at a discount (OID) and as a result the amount of the
liability related to the debt component under IFRS was lower than
the amount of the liability under U.S. GAAP. The fair value of
the conversion feature was recorded as a separate liability, as
discussed in footnote (c)below.
The OID on the Convertible Notes was amortized and included in
interest expense over the term of the Convertible Notes.
All of the Convertible Notes automatically converted into common
stock prior to the closing of Acushnets initial public offering
and such Convertible Notes are no longer outstanding.
(c)Under IFRS, the conversion feature in the Convertible Notes
was classified as a derivative and re-measured to fair value at
each reporting date, with any changes in such fair value
impacting net income (loss) attributable to Acushnet Holdings
Corp. In addition, the fair value of the conversion feature in
the Convertible Notes was treated as a liability and increased
the Companys total liabilities under IFRS.
Under U.S. GAAP, the conversion feature in the Convertible Notes
was not classified as a derivative and was not re-measured to
fair value at each reporting date.
(d)The OID on the 7.5% bonds due 2021 (the 7.5% Bonds) was
calculated differently under U.S. GAAP and IFRS, resulting in a
difference in OID amortization expense.
In July 2016, Fila Korea exercised all of Acushnets outstanding
common stock warrants and Acushnet used the proceeds from such
exercise to redeem all of the outstanding 7.5% Bonds.
(e)Under U.S. GAAP, the SeriesA redeemable convertible
preferred stock (the Convertible Preferred Stock) was
classified as equity. Under IFRS, the Convertible Preferred
Stock was classified as a financial liability. Accordingly,
dividends declared on the Convertible Preferred Stock were
treated as an adjustment to retained earnings under U.S. GAAP
and interest expense under IFRS.
All of the Convertible Preferred Stock automatically converted
into common stock prior to the closing of Acushnets initial
public offering and such Convertible Preferred Stock is no
longer outstanding.
(f)Under U.S. GAAP, the Convertible Preferred Stock was
classified as equity. Under IFRS, the preferred stock was
classified as a financial liability. Accordingly, the
Convertible Preferred Stock was re-measured to fair value at
each reporting date under IFRS and changes in the fair value of
the Convertible Preferred Stock impacted net income (loss)
attributable to Acushnet Holdings Corp. The classification of
the Convertible Preferred Stock as a liability resulted in
higher total liabilities under IFRS.
As permitted by General Instruction B.2 of Form8-K, information
that is furnished shall not be deemed filed for any purpose,
including for the purposes of Section18 of the Securities
Exchange Act of 1934, as amended (the Exchange Act), or
otherwise subject to the liabilities of that Section. The
information in this Current Report on Form8-K shall not be
deemed incorporated by reference into any filing under the
Securities Act of 1933, as amended (the Securities Act), or the
Exchange Act except as shall be expressly set forth by specific
reference in such filing.
Safe Harbor Disclosure
The statements contained in this report that are not historical
facts are forward-looking statements. These forward-looking
statements are based on Acushnets current expectations and are
subject to uncertainty and changes in circumstances. 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 Acushnets control. Any forward-looking
statement in this report speaks only as of the date of this
report. Acushnet undertakes 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.
About Acushnet Holdings Corp. (GOLF)
