MasterCraft Boat Holdings, Inc. reports fiscal 2025 third quarter results

The first-ever handcrafted MasterCraft boat, originally created by founder Rob Shirley © MasterCraft

MasterCraft Boat Holdings, Inc. (NASDAQ: MCFT) today announced financial results for its fiscal 2025 third quarter ended March 30, 2025.

The overview, commentary, and results provided herein relate to our continuing operations, which exclude our former Aviara segment.

Overview:

• Net sales for the third quarter were $76.0 million, down $8.0 million, or 9.5%, from the comparable prior-year period
• Planned decrease in production contributed to approximately 30% lower dealer inventory levels compared to the prior-year
• Income from continuing operations was $3.8 million, or $0.23 per diluted share
• Adjusted Net Income, a non-GAAP measure, was $5.0 million, or $0.30 per diluted share
• Adjusted EBITDA, a non-GAAP measure, was $7.5 million, down $4.2 million from the comparable prior-year period
• Cash and investments of $66.5 million, with $100 million of availability on the revolving credit facility and no outstanding debt

Brad Nelson, Chief Executive Officer, commented, "Our business performed well during the third quarter against a backdrop of macroeconomic and demand uncertainty. Our near-term focus continues to be centered around closely managing production levels, driving focused innovation, and delivering operating efficiencies - all while maximizing cash flow and aggressively managing costs."

Nelson continued, "Our capital allocation priorities remain disciplined and consistent despite the external pressures. Year to date, operating cash flow was $18.5 million despite low cycle production volumes. Our robust, debt-free balance sheet provides us a stable backdrop amid market and tariff uncertainties, while our variable operating model enables us to swiftly adjust production as needed."

Third quarter results

For the third quarter of fiscal 2025, MasterCraft Boat Holdings, Inc. reported consolidated net sales of $76.0 million, down $8.0 million from the third quarter of fiscal 2024. The decrease in net sales was primarily due to planned lower unit volumes to align dealer inventories with retail demand and changes in price, partially offset by favorable model mix and option sales.

Gross margin percentage declined 250 basis points during the third quarter of fiscal 2025, compared to the prior-year period. Lower margins were the result of changes in sales price, material and overhead inflation, and lower cost absorption due to the decreased production volume.

Operating expenses decreased $1.2 million for the third quarter of fiscal 2025, compared to the prior-year period. Prior year costs were elevated as a result of CEO transition and related share-based compensation costs.

Income from continuing operations was $3.8 million for the third quarter of fiscal 2025, compared to $5.7 million in the prior-year period. Diluted income from continuing operations per share was $0.23, compared to $0.34 for the third quarter of fiscal 2024.

Adjusted Net income was $5.0 million for the third quarter of fiscal 2025, or $0.30 per diluted share, compared to $8.5 million, or $0.50 per diluted share, in the prior-year period.

Adjusted EBITDA was $7.5 million for the third quarter of fiscal 2025, compared to $11.7 million in the prior-year period. Adjusted EBITDA margin was 9.9% for the third quarter, down from 13.9% 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, which we refer to collectively as the "Non-GAAP Measures", to the most directly comparable financial measures presented in accordance with GAAP.

Outlook

Concluded Nelson, "To reflect the evolving macroeconomic conditions and the challenging demand environment, we are revising our full-year guidance range. We believe we are well prepared for a range of scenarios as a result of the dynamic industry and trade environments. We also believe our flexible operating model and ability to generate cash flow at these low volumes, combined with our fortress balance sheet, affords us the ability to navigate near-term uncertainty while positioning the business for the next market recovery."

The Company's outlook is as follows:

• For full year fiscal 2025, we now expect consolidated net sales to be approximately $275 million, with Adjusted EBITDA of approximately $20 million, and Adjusted Earnings per share of approximately $0.71. We also now expect capital expenditures to be approximately $9 million for the year.

Conference call and webcast information

MasterCraft Boat Holdings, Inc. will host a live conference call and webcast to discuss fiscal third quarter 2025 results today, May 7, 2025, at 8:30 a.m. EDT. 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.