VONORE, Tenn., Aug. 29, 2024 (GLOBE NEWSWIRE) -- MasterCraft Boat Holdings, Inc. (NASDAQ:MCFT) today announced financial results for its fiscal 2024 fourth quarter and year ended June 30, 2024.
Subsequent to June 30, 2024, we agreed to transfer rights to our Aviara brand of luxury dayboats and related assets to a third party. The transaction is subject to customary closing conditions, and is expected to close in the first quarter of fiscal 2025. We intend to classify Aviara as discontinued operations beginning in the first quarter of fiscal 2025.
The overview, commentary, and results provided herein relate to our continuing operations.
Fourth Quarter Overview:
Net sales for the fourth quarter were $67.2 million, down 59.7% from the prior-year period
Non-cash impairment charges of $9.8 million related to our Aviara segment
Net loss from continuing operations was ($8.1) million, or ($0.49) per diluted share
Diluted Adjusted Net Income (Loss) per share, a non-GAAP measure, was ($0.04), down from $1.37 in the prior-year period
Adjusted EBITDA, a non-GAAP measure, was $0.8 million, down 97.4% from the prior-year period
Share repurchases of $4.5 million during the quarter
Full Year Overview:
Net sales were $366.6 million, down 44.6% from the prior-year
Net income from continuing operations was $8.7 million, or $0.51 per diluted share
Diluted Adjusted Net Income per share, a non-GAAP measure, was $1.22, down from $5.35 in the prior-year
Adjusted EBITDA, a non-GAAP measure, was $32.9 million, down 74.9% from the prior-year
Share repurchases of $16.3 million during the year
Ended the year with cash and investments of $86.2 million, and total debt of $49.3 million
Brad Nelson, Chief Executive Officer, commented, "MasterCraft delivered results ahead of our latest expectations as we navigated a challenging economic environment and a highly competitive retail landscape during the fourth quarter and fiscal year. We executed well against our strategic and operational priorities during the year as we destocked field inventory levels, advanced consumer-centric initiatives, and returned capital to shareholders, all while optimizing profitability and cash flow."
Nelson continued, "Combined with economic and retail uncertainty, elevated interest rates and lingering competitor dealer disruptions have contributed to above optimal inventory levels and increased carrying costs for dealers. Our production plans prioritize dealer health, and we remain committed to partnering with our dealers as they stay healthy by judiciously selling through inventory."
Nelson added, "Our strong financial position provides us with the flexibility to pursue our strategic initiatives, including investment in innovation, product and brand development. We will continue to exercise a disciplined approach to capital allocation. As we navigate this dynamic environment, our strong portfolio of brands positions us well to explore long-term growth opportunities while maintaining the flexibility to return capital to shareholders."
Fourth Quarter Results
For the fourth quarter of fiscal 2024, MasterCraft Boat Holdings, Inc. reported consolidated net sales of $67.2 million, down $99.4 million from the fourth quarter of fiscal 2023. The decrease in net sales was due to lower unit volume and unfavorable model mix and options, partially offset by higher prices.
Gross margin percentage declined 1,360 basis points during the fourth quarter of fiscal 2024, when compared to the prior-year period. Lower margins were the result of lower cost absorption due to planned decreased unit volume and unfavorable model mix and options, partially offset by higher prices.
Operating expenses increased $6.4 million for the fourth quarter of fiscal 2024, compared to the prior-year period. The increase in operating expenses was primarily a result of non-cash impairment charges of $9.8 million recorded in our Aviara segment, partially offset by decreased compensation related expenses, decreased product development expenses, and decreased information technology expenses.
Net loss from continuing operations was ($8.1) million for the fourth quarter of fiscal 2024, compared to net income from continuing operations of $23.1 million in the prior-year period. Diluted net loss from continuing operations per share was ($0.49), compared to Diluted net income from continuing operations per share of $1.32 for the fourth quarter of fiscal 2023.
Adjusted Net loss was ($0.6) million for the fourth quarter of fiscal 2024, or ($0.04) per diluted share, compared to Adjusted Net income of $23.9 million, or $1.37 per diluted share, in the prior-year period.
Adjusted EBITDA was $0.8 million for the fourth quarter of fiscal 2024, compared to $32.7 million in the prior-year period. Adjusted EBITDA margin was 1.3% for the fourth quarter, down from 19.6% for the prior-year period.
See "Non-GAAP Measures" below for a reconciliation of Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Income (Loss), and Adjusted Net Income (Loss) per share, which we refer to collectively as the "Non-GAAP Measures", to the most directly comparable financial measures presented in accordance with GAAP.
Fiscal 2024 Results
For fiscal 2024, MasterCraft Boat Holdings, Inc. reported consolidated net sales of $366.6 million, down $295.5 million from fiscal 2023. The decrease in net sales was due to lower unit volume, an increase in dealer incentives, and unfavorable model mix and options, partially offset by higher prices. Dealer incentives include measures taken by the Company to assist dealers as the retail environment remains competitive.
Gross margin percentage declined 730 basis points during fiscal 2024, when compared to the same prior-year period. Lower margins were the result of lower cost absorption due to planned decreased unit volume and higher dealer incentives, partially offset by higher prices.
Operating expenses increased $6.7 million for fiscal 2024, compared to the prior-year period. The increase in operating expenses was primarily a result of non-cash impairment charges of $9.8 million recorded in our Aviara segment and CEO transition costs, partially offset by decreased compensation related expenses.
Net income from continuing operations was $8.7 million for fiscal 2024, compared to $90.5 million in the prior-year period. Diluted net income from continuing operations per share was $0.51, compared to $5.09 for fiscal 2023.
Adjusted Net Income decreased to $20.9 million for fiscal 2024, or $1.22 per diluted share, compared to $95.0 million, or $5.35 per diluted share, in the prior-year period.
Adjusted EBITDA was $32.9 million for fiscal 2024, compared to $131.5 million in the prior-year period. Adjusted EBITDA margin was 9.0% for fiscal 2024, down from 19.9% for the prior-year period.
See "Non-GAAP Measures" below for a reconciliation of the Non-GAAP measures to the most directly comparable financial measures presented in accordance with GAAP.
Outlook
Concluded Nelson, "Looking forward, although current market uncertainties have short-term implications for wholesale shipments, our destocking efforts are positive for dealer health and in the best long-term interest of our business. In fiscal 2025, we will continue to prioritize a healthy distribution network, and our production plan optimizes dealer inventory levels to position us well to capitalize on the next market upswing."
The Company's outlook is as follows:
For full year fiscal 2025, we expect consolidated net sales to be between $265 million and $300 million, with Adjusted EBITDA between $15 million and $26 million, and Adjusted Earnings per share of between $0.36 and $0.87. Capital expenditures are projected to be approximately $12 million for the full year.
For fiscal first quarter 2025, consolidated net sales are expected to be approximately $61 million, with Adjusted EBITDA of approximately $2 million, and Adjusted Earnings per share of approximately $0.04.
Conference Call and Webcast Information
MasterCraft Boat Holdings, Inc. will host a live conference call and webcast to discuss fiscal fourth quarter and full year 2024 results today, August 29, 2024, 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.
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 Balise. For more information about MasterCraft Boat Holdings, and its three brands, visit: Investors.MasterCraft.com, www.MasterCraft.com, www.CrestPontoonBoats.com, and www.BalisePontoonBoats.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, our intention to drive value and accelerate growth, and our fiscal full year and first quarter financial outlook.
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 ability to maintain a reliable network of dealers, our ability to manage our manufacturing levels and our fixed cost base, the successful introduction of our new products, including our new Balise brand, the success of our strategic divestments, including Aviara, geopolitical conflicts, such as the conflict between Russia and Ukraine and the conflict in the Gaza Strip and general unrest in the Middle East, and financial institution disruptions. 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, and our Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2024, filed with the SEC on May 8, 2024, 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 United States generally accepted accounting principles ("GAAP"), the Company uses certain non-GAAP financial measures in this release. Reconciliations of the Non-GAAP 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. The Non-GAAP 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 Months and Fiscal Year Ended June 30, 2024
MASTERCRAFT BOAT HOLDINGS, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share data)
Three Months Ended
Fiscal Year Ended
June 30,
June 30,
June 30,
June 30,
2024
2023
2024
2023
Net sales
$
67,182
$
166,566
$
366,588
$
662,046
Cost of sales
58,998
123,651
299,491
492,333
Gross profit
8,184
42,915
67,097
169,713
Operating expenses:
Selling and marketing
2,892
3,060
13,430
13,808
General and administrative
6,950
10,160
34,396
37,034
Amortization of other intangible assets
450
489
1,812
1,956
Impairments
9,827
—
9,827
—
Total operating expenses
20,119
13,709
59,465
52,798
Operating income (loss)
(11,935
)
29,206
7,632
116,915
Other income (expense):
Interest expense
(798
)
(756
)
(3,292
)
(2,679
)
Interest income
1,625
1,384
5,789
3,351
Income (loss) before income tax expense
(11,108
)
29,834
10,129
117,587
Income tax expense (benefit)
(3,001
)
6,782
1,407
27,135
Net income (loss) from continuing operations
(8,107
)
23,052
8,722
90,452
Benefit (loss) from discontinued operations, net of tax
71
(376
)
(922
)
(21,515
)
Net income (loss)
$
(8,036
)
$
22,676
$
7,800
$
68,937
Net income (loss) per share
Basic
Continuing operations
$
(0.49
)
$
1.33
$
0.52
$
5.13
Discontinued operations
0.01
(0.02
)
(0.06
)
(1.22
)
Net income (loss)
$
(0.48
)
$
1.31
$
0.46
$
3.91
Diluted
Continuing operations
$
(0.49
)
$
1.32
$
0.51
$
5.09
Discontinued operations
0.01
(0.02
)
(0.05
)
(1.21
)
Net income (loss)
$
(0.48
)
$
1.30
$
0.46
$
3.88
Weighted average shares used for computation of:
Basic earnings per share
16,710,544
17,299,562
16,930,348
17,618,797
Diluted earnings per share
16,710,544
17,505,504
17,038,305
17,765,117
MASTERCRAFT BOAT HOLDINGS, INC. AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except per share data)
June 30,
June 30,
2024
2023
ASSETS
CURRENT ASSETS:
