VONORE, Tenn., Feb. 07, 2024 (GLOBE NEWSWIRE) — MasterCraft Boat Holdings, Inc. (NASDAQ:MCFT) today announced financial results for its fiscal 2024 second quarter ended December 31, 2023.
The highlights, commentary, and results provided herein relate to our continuing operations.
Highlights:
Net sales for the second quarter was $99.5 million, down 37.5% from the prior-year period
Net income from continuing operations was $5.9 million, or $0.35 per diluted share
Diluted Adjusted Net Income per share, a non-GAAP measure, was $0.37, down 69.2% from the prior-year period
Adjusted EBITDA, a non-GAAP measure, was $9.8 million, down 67.2% from the prior-year period
Share repurchases of $4.4 million during the quarter
Ended the quarter with cash and investments of $108.8 million
Fred Brightbill, Chief Executive Officer and Chairman, commented, “Our business performed well during the second quarter by exceeding previously issued guidance, despite continuing macroeconomic uncertainty and a highly competitive retail environment. Near-term, we remain focused on rebalancing dealer inventories with anticipated retail demand. As we anticipate moving beyond inventory rebalancing, we are prudently investing in targeted initiatives that will take advantage of the industry’s positive, underlying secular trends and accelerate our growth. Soon we will be launching a new pontoon brand built in our Crest facility. This new brand is an example of why we are confident in our ability to deliver long-term growth for our shareholders.”
Brightbill continued, “We continue to exercise a disciplined approach to capital allocation. Year-to-date, we have generated $19.2 million of cash flow from operations and our strong balance sheet provides us with the financial flexibility to pursue our strategic growth initiatives while also returning excess cash to shareholders. During the quarter, we spent approximately $4.4 million to repurchase more than 214,000 shares of our common stock. Since initiating our share repurchase program in June 2021, we have repurchased $58.6 million of our common stock and reduced our shares outstanding by more than twelve percent.”
Second Quarter Results
For the second quarter of fiscal 2024, MasterCraft Boat Holdings, Inc. reported consolidated net sales of $99.5 million, down $59.7 million from the second quarter of fiscal 2023. The decrease in net sales is due to lower unit volume and an increase in dealer incentives, partially offset by higher prices and favorable mix and options. Dealer incentives include higher floor plan financing costs as a result of increased dealer inventories and interest rates, and other incentives as the retail environment remains competitive.
Gross margin percentage declined 520 basis points during the second quarter of fiscal 2024, when compared to the same prior-year period. Lower margins were the result of lower cost absorption due to planned decreased sales volume, higher dealer incentives, and higher costs related to material, labor and overhead inflation, partially offset by higher prices.
Operating expenses were relatively consistent for the second quarter of fiscal 2024, compared to the prior-year period. In pursuit of growth initiatives, we continue to invest in product development and marketing.
Net income from continuing operations was $5.9 million for the second quarter of fiscal 2024, compared to $20.0 million in the prior-year period. Diluted net income from continuing operations per share was $0.35, compared to $1.12 for the second quarter of fiscal 2023.
Adjusted Net Income decreased to $6.3 million for the second quarter of fiscal 2024, or $0.37 per diluted share, compared to $21.3 million, or $1.20 per diluted share, in the prior-year period.
Adjusted EBITDA was $9.8 million for the second quarter of fiscal 2024, compared to $29.8 million in the prior-year period. Adjusted EBITDA margin was 9.8 percent for the second quarter, down from 18.7 percent for the prior-year period.
See “Non-GAAP Measures” below for a reconciliation of Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Income, and Adjusted Net Income per share to the most directly comparable financial measures presented in accordance with GAAP.
Outlook
Concluded Brightbill, “Views regarding the economic outlook remain mixed and uncertain, which is limiting retail demand visibility. The retail environment has become increasingly competitive as industry participants react to lower demand and higher inventory levels. The resulting increase in promotional activity will likely pressure margins across the industry. We continue to monitor retail results, assess the overall business and economic environment, and accordingly adjust our production and shipment plan. We expect to have a clearer picture of retail demand as we progress through the third and fourth quarters.”
The Company’s outlook is as follows:
Looking forward, we are narrowing our guidance range for the full year. Consolidated net sales is now expected to be between $400 million and $412 million, with Adjusted EBITDA between $42 million and $47 million, and Adjusted Earnings per share between $1.53 and $1.78. We expect capital expenditures to be approximately $20 million for the full year.
For the third quarter of fiscal 2024, consolidated net sales is expected to be approximately $92 million, with Adjusted EBITDA of approximately $7 million, and Adjusted Earnings per share of approximately $0.23.
Conference Call and Webcast Information
MasterCraft Boat Holdings, Inc. will host a live conference call and webcast to discuss fiscal second quarter 2024 results today, February 7, 2024, at 8:30 a.m. EST. Participants may access the conference call live via webcast on the investor section of the Company’s website, Investors.MasterCraft.com, by clicking on the webcast icon. To participate via telephone, please register in advance at this link. Upon registration, all telephone participants will receive a confirmation email detailing how to join the conference call, including the dial-in number along with a unique passcode and registrant ID that can be used to access the call. A replay of the conference call and webcast will be archived on the Company’s website.
About MasterCraft Boat Holdings, Inc.
Headquartered in Vonore, Tenn., MasterCraft Boat Holdings, Inc. (NASDAQ:MCFT) is a leading innovator, designer, manufacturer and marketer of recreational powerboats through its three brands, MasterCraft, Crest, and Aviara. Through these three brands, MasterCraft Boat Holdings has leading market share positions in two of the fastest growing segments of the powerboat industry – performance sport boats and pontoon boats – while entering the large, growing luxury day boat segment. For more information about MasterCraft Boat Holdings, and its three brands, visit: Investors.MasterCraft.com, www.MasterCraft.com, www.CrestPontoons.com, and www.AviaraBoats.com.
Forward-Looking Statements
This press release includes forward-looking statements (as such term is defined in the Private Securities Litigation Reform Act of 1995). Forward-looking statements can often be identified by such words and phrases as “believes,” “anticipates,” “expects,” “intends,” “estimates,” “may,” “will,” “should,” “continue” and similar expressions, comparable terminology or the negative thereof, and include statements in this press release concerning the resilience of our business model; and our intention to drive value and accelerate growth.
Forward-looking statements are subject to risks, uncertainties and other important factors that could cause actual results to differ materially from those expressed or implied in the forward-looking statements, including, but not limited to: the potential effects of supply chain disruptions and production inefficiencies, general economic conditions, demand for our products, inflation, changes in consumer preferences, competition within our industry, our reliance on our network of independent dealers, our ability to manage our manufacturing levels and our fixed cost base, the successful introduction of our new products, and geopolitical conflicts, such as the conflict between Russia and Ukraine and the conflict in the Gaza Strip. These and other important factors discussed under the caption “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended June 30, 2023, filed with the Securities and Exchange Commission (the “SEC”) on August 30, 2023, could cause actual results to differ materially from those indicated by the forward-looking statements. The discussion of these risks is specifically incorporated by reference into this press release.
Any such forward-looking statements represent management’s estimates as of the date of this press release. These forward-looking statements should not be relied upon as representing our views as of any date subsequent to the date of this press release. We undertake no obligation (and we expressly disclaim any obligation) to update or supplement any forward-looking statements that may become untrue or cause our views to change, whether because of new information, future events, changes in assumptions or otherwise. Comparison of results for current and prior periods are not intended to express any future trends or indications of future performance, unless expressed as such, and should only be viewed as historical data.
Use of Non-GAAP Financial Measures
To supplement the Company’s consolidated financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”), the Company uses certain non-GAAP financial measures in this release. Reconciliations of the non-GAAP financial measures used in this release to the most comparable GAAP measures for the respective periods can be found in tables immediately following the consolidated statements of operations. Non-GAAP financial measures have limitations as analytical tools and should not be considered in isolation or as a substitute for the Company’s financial results prepared in accordance with GAAP.
Results of Operations for the Three and Six Months Ended December 31, 2023
MASTERCRAFT BOAT HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share data)
Three Months Ended
Six Months Ended
December 31,
January 1,
December 31,
January 1,
2023
2023
2023
2023
Net sales
$
99,481
$
159,188
$
203,698
$
328,704
Cost of sales
80,752
120,961
163,133
244,504
Gross profit
18,729
38,227
40,565
84,200
Operating expenses:
Selling and marketing
3,150
3,042
6,614
6,821
General and administrative
8,111
8,235
17,468
17,718
Amortization of other intangible assets
450
489
912
978
Total operating expenses
11,711
11,766
24,994
25,517
Operating income
7,018
26,461
15,571
58,683
Other income (expense):
Interest expense
(854
)
(666
)
(1,732
)
(1,228
)
Interest income
1,415
621
2,766
772
Income before income tax expense
7,579
26,416
16,605
58,227
Income tax expense
1,652
6,433
3,602
13,609
Net income from continuing operations
5,927
19,983
13,003
44,618
Loss from discontinued operations, net of tax
(41
)
(300
)
(922
)
(20,867
)
Net income
$
5,886
$
19,683
$
12,081
$
23,751
Net income (loss) per share
Basic
Continuing operations
$
0.35
$
1.13
$
0.76
$
2.51
Discontinued operations
—
(0.02
)
(0.05
)
(1.18
)
Net income
$
0.35
$
1.11
$
0.71
$
1.33
Diluted
Continuing operations
$
0.35
$
1.12
$
0.76
$
2.49
Discontinued operations
(0.01
)
(0.01
)
(0.06
)
(1.16
)
Net income
$
0.34
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