Q2 2024 Acushnet Holdings Corp Earnings Call
Good morning, everyone, and welcome to today's Acresnet Company Q24 earnings call. My name is Drew, and I'll be your operator today. During today's call, there will be a Q&A session. To register a question, please press star followed by 1 on your telephone keypad. To withdraw your request for a question, please press star followed by 2. I will now turn the call over to Sondra Lennon, Vice President, Planning, Analysis and Investigation. Please go ahead.
Operator: My name is Drew, and I'll be your operator today. During today's call, there will be a Q&A session.
Unnamed Speaker: [inaudible]
Speaker Change: Good morning, everyone. Thank you for joining us today for Krishna Holding Corp's second quarter 2024 earnings conference call. Joining me this morning are David Maher, our President and Chief Executive Officer, and Sean Sullivan, our Chief Financial Officer.
Operator: To enter a question, please press star followed by 1 on your telephone keypad. To rejoin a question, please press star followed by 2.
Unnamed Speaker: Good morning, everyone. Thank you for joining us today at Acushnet Holdings.
Unnamed Speaker: 2024 Earnings Conference Call
Speaker Change: Before I turn the call over to David, I would like to remind everyone that we will be making forward-looking statements on the call today. These forward-looking statements are based on Acushnet's current expectations and are subject to uncertainty and changes in circumstances.
Speaker Change: Actual results may differ materially from these expectations. For a list of factors that could cause actual results to differ, please read today's press release, the slides that accompany our presentation, and our filings with the U.S. Securities and Exchange Commission.
David: Throughout this discussion, we will make reference to non-GAAP financial metrics, including items such as net sales on a constant currency basis and adjusted EBITDA.
David: Explanations of how and why we use these metrics and reconciliations of these items to the most directly comparable gap metrics can be found in the schedules in today's press release, the slides that accompany this presentation, and in our filings with the U.S. Securities and Exchange Commission.
David: Please also note that references throughout this presentation to year-on-year net sales increases and decreases are on a constant currency basis, unless otherwise stated, as we feel this measurement best provides context as to the performance and trends of our business.
David: And when referring to year-to-date results or comparisons, we are referring to the six-month-month period in June 30, 2024, and the comparable six-month-month period in 2024. With that, I'll turn the call over to David.
David: Thanks, Sondra. Good morning, everyone. As always, we appreciate your interest in the Christian Company.
Unnamed Speaker: Our President and Chief Executive Officer.
Unnamed Speaker: Before I turn the call over to David, I would like to remind everyone that we will be making
David: We continue to be enthused about the overall state of the golf industry, and I am especially appreciative of my teammates for their great work and commitment to excellence, which fueled the company's first-half success.
Unnamed Speaker: However, actual results may differ materially.
David: Getting right to our comments here on slide 4, you see our second quarter and first half results.
Unnamed Speaker: Throughout this discussion, we will make reference to non-GAAP financial metrics, including items such as net sales on a constant currency basis, and adjust
David: For the quarter, Acush has delivered net sales of $684 million, a 1% year-over-year increase, primarily related to gains and title golf balls.
Unnamed Speaker: Explanations of how and why we use these metrics and reconciliations of these items to the most directly comparable gap metrics can be found in the scheduled and today's press release.
Unnamed Speaker: Please also note that references throughout this presentation to year-on-year net sales increases and decreases are on a constant currency basis.
David: This has contributed to adjusted EBITDA of $131 million in the quarter, down $1.1 million from last year's second quarter.
David: And for the half, net sales of $1.39 billion were up 2%, while adjusted EBITDA of $285 million also increased 2% compared to last year's first half.
Speaker Change: There are several contributors to these results, which reflect the differences across segments and regions that we have experienced through the first half.
Unnamed Speaker: The Bulletproof Executive, 2013
Speaker Change: First is the global momentum behind what's called falls and golf clubs, which grew 7% and 5% respectively in the half.
Speaker Change: Our title of golf ball business performed especially well in the half against a challenging top with last year's over one launch. And in a year where we have seen a wide range of competitive golf ball introductions.
Speaker Change: Double-digit totals golf ball gains in the U.S. and growth in Korea are setting the first half pace and we enter the back half of the year with nice momentum.
Speaker Change: To meet healthy demand in all regions, we continue to operate our three golf ball production facilities at full capacity.
Speaker Change: as compared to four for the nearest competitor. Titleist Golf Club growth in the half was fueled by steady demand for our new Vokey SM10 wedges, Scottie Cameron Phantom Putters, and T-Series irons.
Speaker Change: Japan led the way with sales of double digits, followed by growth in EMEA in the U.S. as well.
Speaker Change: And our club team has been especially busy over the past few months preparing for the upcoming launch of new Titleist GT medals.
Speaker Change: This was led by double digit growth from Golf Balls and FJ Apparel, along with gains from Shoes, Titleist Gear, Clubs, and FJ Footwear.
Speaker Change: Our U.S. business continues to benefit from healthy participation, with rounds up 2% in the first half, with this growth achieved despite poor weather comps across much of the East Coast.
Speaker Change: First half rounds of play in Korea and Japan are projected to be up 2% and down 1% respectively, as both markets made up ground in Q2 after slow, weather-related starts in Q1.
Speaker Change: And while we are pleased with our golf ball and club momentum across Asia, the region continues to work through excess footwear and apparel inventories, which has negatively impacted our results in these regions.
Speaker Change: And while we are comfortable that footwear inventories have normalized in the U.S. market, we are still seeing elevated channel inventory levels in Europe and Asia.
Speaker Change: Looking forward, we are enthused by our brand momentum, the overall health of the golf market, and the resilience and engagement of Acushnet's core consumer, the game's dedicated golfer.
Speaker Change: Golf balls are projected to be down slightly for the half, but up compared with their 2022 comp, as we balance our production schedule to satisfy at once demand, with the need to build inventory to support new products scheduled for launch in early 2025.
Speaker Change: Key product launches in the coming months include new Titleist GT medals and new seasonal collections for FJ in shoes and Titleist apparel in Korea, Japan, and China. FJ also launches Quantum, a new athletic-inspired golf shoe for men and women that strives for maximum comfort and performance.
Speaker Change: We look for Quantum to complement the great momentum of our FJ Classics franchise, which is fueled by our popular and timeless Premier and Traditions lines.
Speaker Change: And consistent with past practices, we continue to leverage the company's strong balance sheet and execute a disciplined approach to capital allocation for the long-term benefit of Acushnet, our brands, and our shareholders.
Speaker Change: In summary, the company is well positioned, heading into the back half of the year, and we are confident in our ability to successfully execute against Acushnet's long-range goals. Thanks for your attention this morning. I will now pass the call over to Sean.
Sean: Thank you, David. Good morning, everyone.
Sean: As David mentioned, we had a solid second quarter and strong first half to start 2024.
Sean: Second quarter net sales increased slightly, and adjusted EBITDA was $131 million, down $1.1 million from last year's second quarter.
Sean: For the first half of 2024, net sales and adjusted EBITDA both increased 2% in line with our expectations.
Speaker Change: Net sales growth in the second quarter was driven by continued strength in our Titleist Golf Ball segment, up 5% compared to last year. As expected, Titleist Golf Club's net sales were down 4% in the quarter, given the timing of product launches in the first half.
Speaker Change: Gross profit in the second quarter of $372 million was up 1%, or $3 million compared to 2023.
Speaker Change: and Titleist Golf Balls.
Speaker Change: Second quarter gross margin of 54.4% was up 90 basis points versus prior year.
Speaker Change: Interest expense of $14 million in the quarter was up $3 million due to an increase in borrowings.
Speaker Change: Moving to our balance sheet and cash flow highlights, our balance sheet and cash flow positions continue to be very strong, allowing us to execute our capital allocation strategy with ongoing investments in the business and return of capital to shareholders being our highest priorities.
Speaker Change: Our net leverage ratio at the end of Q2, using average trailing net debt, was 1.9 times.
Speaker Change: Our inventory position has significantly improved, having declined 22% from the fourth quarter of 2023 and 10% from the first quarter of 2024, with decreases across all of our product segments.
Speaker Change: When comparing to last year's second quarter, inventories were down 14 percent.
Speaker Change: We are comfortable with our inventory position given the current state of demand and expect inventories to increase in the back half of 2024 in support of second half product introductions and the 2025 ProView 1 launch.
Speaker Change: Capital expenditures were $22 million in the first half of 2024, and based on project timing, we now expect full year 2024 CapEx spend to be approximately $80 million rather than $85 million.
Speaker Change: Through June , we returned roughly $101 million to shareholders, with $73 million in share repurchases and $28 million in cash dividends.
Speaker Change: In relation to the March 14, 2024 agreement with Magnus, on July 10, we purchased approximately 588,000 shares of our common stock for an aggregate of $37.5 million.
Speaker Change: With respect to our revenue outlook, while we are maintaining our full-year constant currency revenue range up approximately 3.2% to 5.3% as compared to 2023,
Speaker Change: We are trending towards the lower end of our range on a reported basis, primarily due to continued currency headwinds as well as market conditions impacting the foot joy and Titleist golf gear segments.
Speaker Change: Overall, we are very pleased with our first half performance and remain focused on executing our strategic priorities for 2024 and beyond.
Speaker Change: With that, I will now turn the call over to Sondra for Q&A.
Sondra: Thank you, Sean. Operator, could we now open up the lines for questions?
Speaker Change: Thank you. We will now start the Q&A session. To register a question, please press star followed by 1 on your telephone keypad. To withdraw your question, please press star followed by 2.
Speaker Change: Our first question today comes from Matthew Boss from J.P. Morgan. The line is now open, please go ahead.
Matthew Boss: Great, thanks. So, David, maybe just to kick off, any change in your view as it relates to health of the golf industry?
Matthew Boss: How it typically holds up during more volatile macro backdrops and maybe more near-term. Could you speak to channel feedback or just initial excitement on your drivers and metal launches ahead in the back half of the year that supports the embedded revenue growth acceleration in the back half?
Speaker Change: Yeah, Matt, maybe I'll break that out regionally to start. You know, our business, as we outlined, healthiest in the U.S., I think, aided by
Speaker Change: Rounds increased, rounds up a couple percent, despite some soft weather in the east. So, we like what we see there. Called out the inherent strength of balls and clubs and gear. Just an overall healthy profile in the U.S.
Matthew Boss: As we move into EMEA, really two stories UK, a little bit healthier than the continent. I think the UK is aided nicely by golf tourism.
Matthew Boss: I would say we lost about half a turn or so due to a slow start. That happens in poor weather conditions.
Matthew Boss: Rounds, I said, were down high single digits. Again, they had a very cold and wet spring.
Matthew Boss: No real surprises there.
Matthew Boss: And then Japan-Korea. We're actually pleased with rounds of play. I think Japan up down slightly, Korea up slightly. So rounds of participation remain healthy.
Matthew Boss: balls and clubs, particularly resilient. When we think about Asia, there is an apparel correction happening.
Matthew Boss: And we talk about that really with focus on Korea, which is a sizable premium apparel market. That's been correcting for a year or so.
Matthew Boss: And we expect that to continue for the near term. And then gear has just been soft, so we're cautious in Asia. So, really, you look at the three main theaters and you see a...
Matthew Boss: You see a resilient consumer, some tailwinds with participation in some regions, some headwinds elsewhere with other regions.
Matthew Boss: So structurally, we like where the game is. Obviously, it's been a major step up over the last several years, and to sit here today and talk about rounds growth in the U.S. and rounds growth in Korea is a real positive.
Matthew Boss: And then consistent with what we've said over the last couple of cycles, clearly the U.S. consumer is the strongest consumer that we see across the globe.
Speaker Change: And Matt, as to your question about, you know, forward outlook, you know, certainly we're looking for growth in all segments. I think we said with the exception of golf ball, that's just part of our two-year calendar down low single digits.
Speaker Change: It's really fueled by product launches and excitement around, I called out drivers and apparel collections and footwear, but you're right, you called out the GT, there's a lot of excitement around that, we've had some nice early success.
Speaker Change: across tours and in the pyramid that gives us confidence that we're off to a nice start. Now, we do start shipping that product in earnest here in the coming weeks. We just put out our fitting supplies.
Speaker Change: in the marketplace, so that'll start here, really right around August 1.
Speaker Change: Continuing with the momentum of balls and clubs, that's sort of the benchmark of how we think about the back half of the year.
Speaker Change: And yes, clubs were enthused about, around the early response and enthusiasm around the new GT Series.
Speaker Change: Great. And then maybe just one for Sean. Could you speak to expectations for gross margin in the back half of the year? Maybe what you've embedded for promotional activity in the marketplace across segments?
Sean: Sure, Matt, so just to take the last point, you know, I think you saw in my comments or heard my comments anyway, we did have some promotional activity in our club business that was probably a little earlier than we had anticipated, so we absorbed that.
Sean: in Q2, and we'll get the benefit in the back half. But I don't really see the gross margin outlook.
Sean: In the back half, that much dissimilar to what we've experienced in the first half, again, very pleased with the mix that we're seeing, product mix, the manufacturing efficiencies, etc.
Sean: You know, nothing really material to call out as we think about the back half gross margin profile.
Speaker Change: Great caller. Best of luck.
Sean: Thanks, Matt. Thanks, Matt. Operator, next question, please.
Speaker Change: Our next question comes from Joseph Altobello from Raymond James. Your line is now open, please go ahead.
Speaker Change: Good morning, this is Martin on for Joe. I was wondering if you can give any color if there's any pushback on ball pricing. Have you seen anyone sort of trade down?
Speaker Change: You know, Martin, we look at our ball business over the last couple of years, I think we were up 20-some-odd percent in full year 2023 and up 7 for the first half. We like what we see. I would say, conversely, to a trade-down, we see continued interest.
Speaker Change: in our premium urethane offerings, PROV-1, PROV-1X, ABX. So, haven't necessarily seen trade-down. In fact, we tend to, over the years, and certainly this year,
Speaker Change: Almost see it go the other way. There's a there's a stronger appetite and demand for our for our premium urethane products And and that's been consistent over the last few years
Speaker Change: Great, appreciate it. And is there any sense that golfers are delaying club purchases?
Speaker Change: Well I would I would speak to our club purchases and so so stepping out of the macro and into our business.
Speaker Change: You know, we had a really nice half. We launched wedges successfully, putters, irons. We're seeing some nice steady growth in our business.
Speaker Change: Clubs were up, I think, in every market, but Korea in the first half, and we're enthused about what lies ahead for the drivers.
Speaker Change: We haven't seen indication of that, and our view is as long as we can continue to deliver great product and a great fitting experience, our business will be healthy, and that's what we're seeing nowadays.
Speaker Change: Great, thank you, appreciate it.
Speaker Change: Thanks.
Speaker Change: Thanks, Martin. Operator, next question, please.
Speaker Change: Our next question comes from Randy Konik from Jeffreys. Your line is now open, please go ahead.
Randy Koenig: Yeah, thanks a lot. Good morning, everybody. Maybe, David, give us maybe some perspective as you think about the GT family of products.
Randy Koenig: and how it compared to the TS.
David: family of product and product
Speaker Change: the series before that, in other years, maybe give us some perspective on, you know, what you've changed from a marketing standpoint, you know, pricing changes, and just early reads on enthusiasm, reception, you know, from the different, you know, channels that you're going to be selling through with that family of products.
Speaker Change: Thank you.
David: Yeah, hey Randy, well, first off, it's, um...
Speaker Change: It's really GT's generational technology for us. It's a meaningful change in its construction. It's our prior drivers, the TS series, and before that we're all...
David: All titanium, this is titanium composite, which allows us...
Speaker Change: to do a few things differently in terms of construction and ball and flight performance.
David: Early testing with the Pyramid professionals and amateurs has been terrific, and to
Speaker Change: I said it on my earlier remarks, to win a driver count with a new model on both the PGA Tour and DP World Tour is really powerful, and I think that speaks to early player response to not only the drivers, but also the fairways as well.
David Maher: We continue to be enthused about the overall state of the golf industry, and I...
David Maher: of the Golf Industry, and I am especially appreciative of my...
David Maher: Getting right to our comments, on slide four, you see our second quarter and first half results. For the quarter, Acush delivered net sales of $684 million, a 1% year-over-year increase, primarily related to gains entitled to golf balls. This contributed to adjusted EBITDA of $131 million in the quarter, down $1.1 million from last year's second quarter. And for the half, that sales was $1.39.
David Maher: dollars were up two percent.
Operator: Thank you. We will now start the Q&A session. To register a question, please press the star followed by one on your telephone keypad. To withdraw your question, please press the star followed by two.
David Maher: There are several contributors to these results, which reflect...
David: We're very enthused. This one's been in the works for a long, long time, and as enthused as we are about the product, we're equally
Unnamed Speaker: .. .. .. .. ...
David Maher: First, there is global momentum behind titleless golf balls and golf clubs, which grew 7% in
David Maher: Our title golf business performed especially well in the half against a challenging comp with last year's over one launch.
David Maher: And in the year where we have seen a wide range of competitive golf ball introductions.
David Maher: It has also been a terrific first half for Titleist Golf Balls across the Pyramid of Influence, with Pro V1 and Pro V1X notching 26 PGA Tour wins year-to-date as compared to four for the nearest competitor. Titleist Golf Club growth in the half was fueled by steady demand for our new Vokey SM10 wedges, Scottie Cameron Phantom putters, and T-Series irons. Compared to the first half of 2022, Titleist Club sales increased 22%, with growth coming from wedges, putters, and irons. Our teams are closely monitoring channel inventories and promotional activity as this region reacts to the inevitable effects of poor weather and reduced early season traffic.
David Maher: Gross profit in the second quarter of $372 million was up 1%, or $3 million, compared to the prior year, primarily due to higher sales volumes and lower manufacturing costs in Titleist golf balls, higher average selling prices in Titleist golf gear, and a favorable product mix within Footjoy. Second quarter gross margin of 54.4% was up 90 basis points versus the prior year. Capital expenditures were $22 million in the first half of 2024, and based on project timing, we now expect full-year 2024 CapEx spend to be approximately $80 million rather than $85 million. As of June 30, 2024, after giving effect to the July 10 settlement, we had approximately $265 million remaining under the current share repurchase authorization.
Matt: Great. And then maybe just one question for Sean, could you speak to expectations for gross margin in the back half of the year or maybe what you've embedded for promotional activity in the marketplace across segments?
Sean Sullivan: Thanks, Matt. Thanks, Matt. Operator, next question, please.
David: enthused about the fitting plans we have. We've got a big vast network of fitters, they're ready.
David: We've got fitting tools in the marketplace. So there's a good interest in energy level around the driver. Pricing is... The prior TSR was $599. This is priced in the market at $649.
David: So you'll see a price increase on the GT. And again, just everything we've done to this point has been real positive. The other piece that we look at is...
David: is our supply chain readiness. As I said, it's a new construction that always brings an element of risk. Our team's been on this for quite some time, so we feel really good about our readiness to capture early season demand. So early days in that, again, we start, I think the global launch date is August 23rd.
David: We start fittings in earnest on August 1, so early days, but up to this point we're very enthused about the product.
David: and its performance deliverables. It performs very well on mishits. For some players, they pick up clubhead speed, which is a positive. So, yeah, all the early indicators are positive, and, again, now it's time to go execute.
Speaker Change: Super helpful. I guess last question, just on Footjoint, where do you think we are in this cycle from a, you know, the industry backdrop perspective? How many quarters, you think?
Speaker Change: We need until we get to a kind of more equilibrium in terms of inventory around the world, you know, pricing and promotional levels. Just give us some flavor on, you know, where you see things unfolding over the next, you know, two to four to six quarters. Thanks.
Randy Koenig: Yeah, and I'll give it a regional flair too, Randy. So, Footshoe, I think we're where we need to be in the U.S. market. We talked about that a quarter ago from a total footwear inventory standpoint.
David: And so we're comfortable with where Footwear stands in the U.S. We thought the ex-U.S. markets lagged.
David: a quarter or two, and that was probably exacerbated due to some weather in Europe . So we're probably a few quarters away from getting the global footwear market where we'd like it to be.
Speaker Change: But with that said, footwear has always been a low barrier to entry. It's always seen as a tempting entry point for a lot of brands, and with that comes a lot of inventory. So it's just a reality we deal with.
David: There are some bright spots in our foot-joy business, certainly. I mentioned apparel up double digits in the U.S.
David: And we've had some great success with our premiere in Traditions, which...
David: I think Greengrass were up some 40% year-to-date, so there are some bright spots within the footwear and apparel space.
David: Again, I would say the U.S. market in somewhat steady state, normal state.
David: And I'd like to think markets around the world will be a steady state come early, early 2025. But we're working through it. There are some positives. There's a positive margin story happening within Footshoy. There's a positive—
David: and earlier as well is Korea and just that super premium market is so unique and you see it as a negative drag within the other segment and you also see it as a negative drag within Footshoy Apparel.
Joseph Altobello: Our next question comes from Joseph Altobello from Raymond James. Your line is now open. Please go ahead.
David Maher: Well, I would speak to you about our club purchases. And so, stepping out of the macro and into our business.
Unnamed Speaker: Great. Thank you. I appreciate it. Thanks.
David Maher: Yeah, thanks a lot. Good morning, everybody. Maybe, David, give us maybe some perspective, as you think about the GT family of products and how it compared to the TS family of products and product series before that, in other years. Maybe give us some perspective on, you know, what you've changed from a marketing standpoint, you know, pricing changes, and just early reads on enthusiasm, reception, you know, from the different, you know, channels that you're going to be selling through. With that family of products,
David Maher: Early testing with the Pyramid professionals and amateurs has been terrific, and, as I said in my earlier remarks, to win a driver count with a new model on both the PGA Tour and DP World Tour is really powerful. And I think that speaks to early player response to not only the drivers but also the fairways as well.
Speaker Change: Super helpful. Thanks, guys.
David Maher: So we're very enthused. This one's been in the works for a long, long time. And as enthused as we are about the product, we're equally enthused about the installation plans we have. We've got a big, vast network of fitters. They're ready.
David Maher: We've got fitting tools in the marketplace. So there's a good interest in energy levels around the driver. Pricing is we, the prior TSR was $599. This is priced in the market at $649. So you'll see a price increase on the GT. And, again, just everything we've done to this point has been real positive. The other piece that we look at is...
David: Thanks, Randy. Thanks, Randy. Operator, next question, please.
David Maher: Yeah, and I'll give it a regional flare too, Randy. So, Footshoe, I think we're where we need to be in the U.S. market. We talked about that a quarter ago from a total footwear inventory standpoint.
Unnamed Speaker: Super helpful. Thanks, guys.
Speaker Change: Our next question comes from George Kelly from Roth Capital Partners. Your line is now open, please proceed.
George Kelly: Hey everybody, thanks.
George Kelly: So, a couple questions for you. First,
George Kelly: If I heard you right in your prepared remarks, you expect, I think, revenue you said in the third quarter should be more than 50% of your back half total.
Speaker Change: And if I go back the last couple years, it had been well over 50%, closer to 60% than prior two years. So I'm just curious if...
Speaker Change: You're using kind of an overly broad, or just a broader, you know, over 50%, you know, certainly, you did that the last two years.
Speaker Change: Is it more of a kind of an even split this year just due to product launches and the Pro V1 launch early next year?
David Maher: Yeah, George, it's definitely more than 50 percent. It's not intended to guide you to an equal split. So maybe, to your point, it's a broader comment than we have made historically. Again, I think I'm being a bit more.
George Kelly: Yeah, George, it's definitely more than 50%. It's not intended to guide you to an equal split. So maybe to your point, it's a broader comment than we have made historically. Again, I think I'm being a bit more cautious.
Speaker Change: Next up, Currency Headwinds and
Speaker Change: and FX given the volatile market environment we're in.
Speaker Change: So, again, with the GT launch that David just spoke about,
Speaker Change: and some of the other product cadences, certainly.
Speaker Change: More than 50% will be in Q3, and obviously in the ball business in Q4, as you know, we start to prepare for the 2025 Pro V1 launch, so I wouldn't read much into it. I think we're just being a little more cautious and a little more broad with the revenue guide on a quarterly basis.
Speaker Change: Okay, understood. And then second question for you, what are your expectations with respect to the Olympics?
Speaker Change: And have you historically, I know there's not a lot of history to draw on there, but have you seen an uplift before? And how are you factoring that into guidance?
Speaker Change: Well,
Speaker Change: To answer the question about have we seen an uplift before, 2016 was Rio, that was new, that was golf's first entry into the Olympics in 100 years, 2020 or 2021.
Speaker Change: in Tokyo was COVID-related.
Speaker Change: 2024 was terrific, so it was in many respects, after a couple of starts, this was golf's big arrival into the Olympics.
Speaker Change: We put it in the calendar of golf events that are happening around the world.
Speaker Change: throughout the year. I'm not sure we give it a lot of
Speaker Change: of weight in terms of our forward guidance.
Speaker Change: But we certainly like what it means for the game over the longest term, right? When you expose...
George Kelly: New regions and new fans and new consumers to the game, that's a positive. But I would think that's a positive over the very long term, not so in the near term. So to your question, George, don't read anything into it in terms of how we're thinking about the near term.
George Kelly: But that said, it was certainly a terrific competition, and I think most golf fans would agree it's arrived after a couple years in sort of incubation over the last couple of cycles.
Speaker Change: Okay, and then just one last quick one. Where did your share count end the quarter?
Unnamed Speaker: Share count. If you don't have that, we can follow up.
George Kelly: Share count, I'll give you a different number George, at the end of July we had 61.8 million shares roughly of common stock.
Speaker Change: Okay, that's great. Thank you.
George Kelly: Thanks, George. Thanks, everyone, as always. We appreciate your interest in the company and hope you have a great rest of summer and look forward to following up in a few months' time.
Speaker Change: That concludes today's call. You may now disconnect your line.
George Kelly: and Sean Sullivan, David Maher, Sean Sullivan, David Maher, Sean Sullivan, David Maher, Sean