Group 1 - MasterCraft Boat Holdings, Inc. (NASDAQ: MCFT) is currently facing a weak sales environment due to persistent high interest rates and declining consumer confidence, which adds to market uncertainty [1] - Despite the challenging conditions, the company has made significant progress in improving dealer inventory health [1] Group 2 - The investment philosophy highlighted focuses on identifying mispriced securities by understanding the underlying drivers of a company's financials, often revealed through a DCF model valuation [1]

Core Points - MasterCraft Boat Company has launched its third year of the Surf to Save Lives campaign, aiming to raise funds for St. Jude Children's Research Hospital, with a pledge of $75,000 in 2025, bringing the total raised since 2023 to $225,000 [1][2] - The campaign allows boaters nationwide to log their on-water activities through the MasterCraft Connect app, with MasterCraft donating $1 for every minute logged, up to a maximum of $75,000 [3] - The initiative is open to all boaters, not just MasterCraft owners, encouraging widespread participation in support of St. Jude's mission [3] Company Overview - MasterCraft is a leading innovator, designer, manufacturer, and marketer of premium performance sport boats, with a history of industry-leading innovation since its founding in 1968 [8][9] - The company is headquartered in Vonore, TN, and operates under three brands: MasterCraft, Crest, and Balise [9][10] Philanthropic Efforts - Over the past two years, MasterCraft has donated a total of $150,000 to St. Jude, reaching the maximum annual donation of $75,000 each year [2] - The campaign is supported by Alexa Score, a childhood cancer survivor and professional wakeboarder, who serves as the official spokesperson [5][6] - MasterCraft employees also have the opportunity to contribute through a dedicated Employee Giving Program [6]

Sales Performance - Net sales decreased by $8.0 million (9.5%) in Q3 fiscal 2025 compared to the same period last year, primarily due to planned lower unit volumes[86]. - For the first nine months of fiscal 2025, net sales decreased by $63.3 million (23.6%) compared to the prior year, driven by planned lower unit volumes and unfavorable model mix[87]. - Net sales for the MasterCraft segment decreased by $5.6 million (8.0%) in Q3 2025 compared to Q3 2024, and by $43.5 million (19.9%) in the first nine months of 2025 compared to the same period in 2024[90][91]. - The Pontoon segment reported a net sales decrease of $2.5 million (17.3%) in Q3 2025 and $19.9 million (40.0%) in the first nine months of 2025 compared to the same prior-year periods, driven by lower unit volumes and increased dealer incentives[93][94]. Unit Sales Volume - Consolidated unit sales volume decreased by 147 units (19.2%) in Q3 and 755 units (30.5%) in the first nine months of fiscal 2025 compared to the prior year[85]. - MasterCraft unit sales volume decreased by 46 units (9.8%) in Q3 and 257 units (17.7%) in the first nine months of fiscal 2025[85]. - Pontoon unit sales volume decreased by 101 units (33.9%) in Q3 and 498 units (48.6%) in the first nine months of fiscal 2025[85]. Financial Metrics - Gross margin percentage declined by 250 basis points in Q3 and 470 basis points in the first nine months of fiscal 2025, attributed to changes in sales price, material and overhead inflation, and lower cost absorption due to decreased production volume[88]. - Adjusted EBITDA for Q3 2025 was $7.5 million (9.9% margin), down from $11.7 million (13.9% margin) in Q3 2024, while for the first nine months of 2025, it was $14.9 million (7.3% margin) compared to $38.6 million (14.4% margin) in the same period of 2024[99]. - Adjusted Net Income for Q3 2025 was $5.0 million, or $0.31 per share, compared to $8.5 million, or $0.51 per share, in Q3 2024[99]. - Income from continuing operations per diluted share for the three months ended March 30, 2025, was $0.23, a decrease of 32.4% from $0.34 for the same period in 2024[100]. - Adjusted Net Income per diluted share for the nine months ended March 30, 2025, was $0.53, compared to $1.65 for the same period in 2024, reflecting a decrease of 67.8%[100]. Operating Expenses - Operating expenses decreased by $1.2 million (9.3%) in Q3 and $1.8 million (5.1%) in the first nine months of fiscal 2025, compared to the prior year, as previous costs were elevated due to CEO transition and related share-based compensation[89]. Segment Performance - Operating income for the MasterCraft segment fell by $1.8 million (23.9%) in Q3 2025 and by $15.3 million (54.4%) in the first nine months of 2025 compared to the prior-year periods, primarily due to decreased net sales and increased materials and overhead inflation[92]. - The operating loss for the Pontoon segment increased by $0.8 million (94.2%) in Q3 2025 and by $7.4 million (5584.2%) in the first nine months of 2025 compared to the prior-year periods, attributed to decreased net sales and increased labor and materials costs[94]. Cash Flow and Debt - Cash and cash equivalents increased to $28.5 million as of March 30, 2025, up by $21.1 million from $7.4 million as of June 30, 2024[103]. - Total debt as of June 30, 2024, was $49.3 million, with no amounts outstanding as of March 30, 2025[103]. - Net cash provided by operating activities for the nine months ended March 30, 2025, was $18.5 million, down from $23.6 million for the same period in 2024[106][110]. - Net cash provided by investing activities was $35.0 million for the nine months ended March 30, 2025, compared to $1.8 million for the same period in 2024[108][111]. - Net cash used in financing activities was $55.0 million for the nine months ended March 30, 2025, which included $49.5 million used to repay outstanding borrowings of the Term Loan[109]. - As of March 30, 2025, the company had $100.0 million of available borrowing capacity under the Revolving Credit Facility[104]. - The company did not have any off-balance sheet financing arrangements as of March 30, 2025[112]. Leadership Changes - A leadership transition is scheduled with Timothy M. Oxley retiring as CFO effective December 31, 2025, and Scott Kent succeeding him on July 1, 2025[82]. Tariff Impact - The company anticipates a modest impact from recently imposed U.S. tariffs on fiscal 2025 costs, while closely monitoring the evolving tariff landscape[83]. Strategic Adjustments - The company continues to adjust its strategies in response to market conditions, including changes in dealer incentives and model mix[91][93]. - The company completed the Aviara Transaction and Aviara Facility Sale in October and December 2024, respectively, with results from these units reported as discontinued operations[81].

Core Insights - MasterCraft Boat Holdings, Inc. reported quarterly earnings of $0.30 per share, exceeding the Zacks Consensus Estimate of $0.18 per share, but down from $0.37 per share a year ago, indicating an earnings surprise of 66.67% [1] - The company achieved revenues of $75.96 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 1.46%, but down from $95.71 million year-over-year [2] - MasterCraft has consistently surpassed consensus EPS estimates over the last four quarters [2] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.35 on revenues of $80.63 million, and for the current fiscal year, it is $0.75 on revenues of $284.3 million [7] - The estimate revisions trend for MasterCraft is mixed, resulting in a Zacks Rank 3 (Hold), suggesting the stock is expected to perform in line with the market in the near future [6] Industry Context - The Leisure and Recreation Products industry, to which MasterCraft belongs, is currently ranked in the bottom 32% of over 250 Zacks industries, indicating potential challenges for stock performance [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact MasterCraft's stock performance [5]

MasterCraft Boat (MCFT) Q3 2025 Earnings Call May 07, 2025 08:30 AM ET Company Participants Scott Kent - VP - Finance & Incoming CFOBrad Nelson - CEO & DirectorTim Oxley - Vice President, Chief Financial Officer, Treasurer and SecretaryMartin Mitela - Senior Equity Research AssociateAdam Fox - Equity Research AssociateEric Wold - Executive Director, Equity Research Conference Call Participants Craig Kennison - Director of Research Operations & Senior Research AnalystAnna Glaessgen - Senior Research Analyst ...

Financial Data and Key Metrics Changes - For Q3 2025, net sales were $76 million, a decrease of $8 million or 10% from the prior year, primarily due to lower unit sales volume, partially offset by a favorable mix [16][17] - Gross margin was 20.8%, down from 23.3% in the prior year, attributed to lower cost absorption from production decreases [17] - Adjusted net income for the quarter was $5 million or $0.30 per diluted share, compared to $8.5 million or $0.50 per diluted share in the prior year [18] - Adjusted EBITDA was $7.5 million, down from $11.7 million in the prior year, with an adjusted EBITDA margin of 9.9% compared to 13.9% [19] Business Line Data and Key Metrics Changes - Within the MasterCraft segment, production of the premium X Star model ramped up, contributing positively to brand momentum [8][13] - The pontoon segment, including Crest and Valise brands, faced challenges with dealer inventories, leading to a 40% year-over-year unit reduction [15] Market Data and Key Metrics Changes - Dealer inventories across brands decreased by 30% over the last year, and more than 45% compared to pre-pandemic levels in fiscal 2019 [9] - The company anticipates a modest impact from tariffs on fiscal 2025 costs, while closely monitoring demand implications [10] Company Strategy and Development Direction - The company is focused on disciplined cost, cash, and pipeline management, with a strong emphasis on product development and dealer support [8][12] - Capital allocation priorities remain disciplined, with a solid balance sheet and no debt, allowing for share repurchase programs to return capital to shareholders [11][20] Management's Comments on Operating Environment and Future Outlook - Management acknowledged persistent macroeconomic headwinds and tariff uncertainty affecting the marine sector, leading to a revision of full-year guidance [9][21] - Despite challenges, management remains confident in achieving inventory reduction targets and is optimistic about the upcoming selling season [9][22] Other Important Information - Tim Oxley, the CFO, will retire in June, with Scott Kent set to succeed him, reflecting careful succession planning [5][6] - The X Star model received the National Marine Manufacturers Association Innovation Award, highlighting the company's focus on quality and innovation [12] Q&A Session Summary Question: Can we quantify the tariff impacts and potential price increases for model year '26? - Management indicated that the impact of tariffs is evolving and has not yet determined specific pricing effects, but expects some inflationary impact [26] Question: How is retail performing, and does the previous down 5% to 10% estimate change? - Management expects retail to trend closer to 10% down, with more clarity expected in June [28] Question: What is the direct and indirect exposure to tariffs? - Management has discussions with suppliers to understand costs and expects a modest impact in Q4, with ongoing monitoring [33][34] Question: What is the status of dealer network expansion? - Management reported progress in expanding the dealer network, particularly in Texas and Utah, which are key markets [36] Question: How is the dealer network's balance sheet performing? - Management expressed satisfaction with dealer health, noting no significant dealer failures despite the challenging environment [38] Question: What is the early response to the Belize product? - Management anticipates net sales around $10 million for fiscal '25, with positive dealer interest and response [42][45] Question: Any trends observed at retail in April and May? - Management noted that while retail momentum is not yet vibrant, there are signs of improvement, particularly with premium buyers [51][52]

May 7, 2025 Fiscal 2025 Third Quarter Results FISCAL THIRD QUARTER 2025 RESULTS 1 This presentation contains forward-looking statements within the meaning of the federal securities laws, which statements involve substantial risks and uncertainties. Forward- looking statements generally relate to future events and include, without limitation, projections, forecasts and estimates about possible or assumed future results of the Company's business, financial condition, liquidity, results of operations, plans an ...

Financial Performance - Consolidated net sales for Q3 fiscal 2025 were $76.0 million, a decrease of $8.0 million or 9.5% compared to Q3 fiscal 2024[4] - Income from continuing operations was $3.8 million, or $0.23 per diluted share, down from $5.7 million, or $0.34 per diluted share in the prior-year period[7] - Adjusted EBITDA for Q3 fiscal 2025 was $7.5 million, down $4.2 million from $11.7 million in the prior-year period, with an adjusted EBITDA margin of 9.9% compared to 13.9%[8] - Adjusted Net Income for Q3 fiscal 2025 was $5.0 million, or $0.30 per diluted share, compared to $8.5 million, or $0.50 per diluted share in the prior-year period[7] - Adjusted Net Income per diluted share for Q1 2025 is $0.30, down from $0.50 in Q1 2024, representing a decrease of 40%[31] - Income from continuing operations per diluted share for Q1 2025 is $0.23, compared to $0.34 in Q1 2024, a decline of approximately 32.4%[31] - Adjusted Net Income per diluted share for the nine months ended March 30, 2025, is $1.65, compared to $2.07 for the same period in 2024, a decrease of 19.2%[31] - The company reported an adjusted net income per diluted share before income taxes of $0.37 for Q1 2025, compared to $0.63 for Q1 2024, a decrease of 41.3%[31] Cash Flow and Assets - Operating cash flow year-to-date was $18.5 million despite low cycle production volumes, with cash and investments totaling $66.5 million[3] - Total current assets decreased from $155,074 million in June 30, 2024 to $123,984 million in March 30, 2025, a decline of 20.0%[21] - The company maintains a debt-free balance sheet with $100 million available on the revolving credit facility[3] - The company reported a total liabilities decrease from $134,105 million in June 30, 2024 to $79,619 million in March 30, 2025, a reduction of 40.5%[21] - Retained earnings increased from $123,620 million in June 30, 2024 to $124,966 million in March 30, 2025, reflecting a growth of 1.1%[21] Sales and Production - Planned decrease in production contributed to approximately 30% lower dealer inventory levels compared to the prior-year[5] - Consolidated unit sales volume dropped by 19.2% year-over-year, from 766 units in March 31, 2024 to 619 units in March 30, 2025[22] - Consolidated net sales decreased by 9.5% from $83,977 million in March 31, 2024 to $75,960 million in March 30, 2025[22] - MasterCraft unit sales volume fell by 9.8% from 468 units in March 31, 2024 to 422 units in March 30, 2025[22] Margins and Expenses - Gross margin percentage declined by 250 basis points due to changes in sales price, material and overhead inflation, and lower cost absorption from decreased production volume[6] - Adjusted EBITDA for the three months ended March 30, 2025 was $7,488 million, down 35.0% from $11,662 million in the same period of 2024[30] - Gross margin declined from 23.3% in March 31, 2024 to 20.8% in March 30, 2025, a decrease of 250 basis points[22] - Operating expenses decreased by $1.2 million in Q3 fiscal 2025 compared to the prior-year period, primarily due to reduced costs from CEO transition and related share-based compensation[6] Guidance and Future Outlook - The company expects full-year fiscal 2025 consolidated net sales to be approximately $275 million, with Adjusted EBITDA of approximately $20 million and Adjusted Earnings per share of approximately $0.71[10] - The company did not provide forward-looking guidance for certain financial measures on a GAAP basis due to unpredictability of certain items[28] Tax and Transition Costs - The impact of income tax expense on adjusted net income per diluted share was $(0.07) for Q1 2025, compared to $(0.13) for Q1 2024[31] - The income tax expense reflects an income tax rate of 18.0% for fiscal 2025, down from 20.0% for fiscal 2024[32] - The company incurred $0.07 per diluted share in CEO transition and organizational realignment costs in Q1 2024[31] - Share-based compensation impacted adjusted net income by $0.05 per diluted share in Q1 2025, down from $0.09 in Q1 2024[31]

Overview - MasterCraft Boat Holdings, Inc. reported financial results for the third quarter of fiscal 2025, ending March 30, 2025, with a focus on continuing operations excluding the former Aviara segment [1][4]. Financial Performance - Consolidated net sales for the third quarter were $76.0 million, a decrease of $8.0 million or 9.5% from the same period in fiscal 2024, primarily due to planned lower unit volumes to align dealer inventories with retail demand [4][10]. - Gross margin percentage declined by 250 basis points compared to the prior-year period, attributed to changes in sales price, material and overhead inflation, and lower cost absorption due to decreased production volume [5][24]. - Income from continuing operations was $3.8 million, or $0.23 per diluted share, down from $5.7 million, or $0.34 per diluted share in the prior-year period [6][10]. - Adjusted net income was $5.0 million, or $0.30 per diluted share, compared to $8.5 million, or $0.50 per diluted share in the prior-year period [6][10]. - Adjusted EBITDA was $7.5 million, down from $11.7 million in the prior-year period, with an adjusted EBITDA margin of 9.9%, down from 13.9% [7][10]. Operational Insights - The company maintained a disciplined approach to capital allocation, achieving operating cash flow of $18.5 million year-to-date despite low cycle production volumes [3][10]. - Cash and investments totaled $66.5 million, with $100 million available on the revolving credit facility and no outstanding debt, indicating a robust, debt-free balance sheet [10][11]. Outlook - The company revised its full-year guidance, now expecting consolidated net sales of approximately $275 million, adjusted EBITDA of approximately $20 million, and adjusted earnings per share of approximately $0.71 for fiscal 2025 [11][10]. - Capital expenditures are expected to be approximately $9 million for the year [11].

Core Insights - MasterCraft Boat Company has announced a strategic partnership with Performance Marine Watersports to enhance customer experience and service capabilities in the Lake of the Ozarks region [1][2][3] Group 1: Partnership Details - The partnership positions MasterCraft as a leader in the towboat category and aims to deliver best-in-class experiences for current and future MasterCraft owners [1] - Performance Marine Watersports is the first dedicated watersports dealership at Lake of the Ozarks, expanding its offerings with MasterCraft models designed for various water conditions [2] Group 2: Customer Experience - MasterCraft emphasizes the importance of exceptional ownership experiences, aligning with Performance Marine Watersports' commitment to personalized, high-quality service [3] - The dealership provides white-glove service with every boat purchase and offers convenient on-water demonstrations [3] Group 3: Future Plans - Performance Marine Watersports plans to host more events and owner reunions, aiming to grow the MasterCraft family in the region [4]