MasterCraft Boat Holdings, Inc. Q4 FY2025 earnings call

• Closed fiscal 2025 with strong Q4 performance, outperforming expectations in challenging environment, driven by robust demand for ultra-premium products and disciplined cost control. • Removed over 900 units from dealer inventories near high end of targeted range, with largest Q3 to Q4 field inventory reduction in history excluding pandemic. • Launched MasterCraft's flagship XStar product in fiscal 2025, and preparing major premium launch for model year '26. • Crest's Pontoon brand made progress with production ramp in Owosso facility. • Stayed disciplined in capital allocation, generated $29 million free cash flow in fiscal '25, fully repaid debt, strengthened balance sheet, and deployed nearly $10 million to share repurchase program. • Broader model year '26 lineup includes new features and enhancements, such as advanced stern thruster, Meridian audio, keyless ignition, and redesigned MasterCraft X Family.

In Q4, net sales were $79.5 million, up $25 million or 46% year-over-year, driven by favorable mix, higher volumes and lower dealer incentives. Gross margins improved 740 basis points to 23.2%. Adjusted net income rose to $6.6 million or $0.40 per share, up from $0.04 per share last year. Adjusted EBITDA increased by $8 million to $9.5 million. For full year fiscal '25, net sales were $284.2 million, a decrease of $38 million or 12% from the prior year. Gross margin was 20% compared to 22.2% prior year. Adjusted net income was $15.1 million or $0.92 per diluted share. Adjusted EBITDA was $24.4 million compared to $40.2 million in fiscal '24. MasterCraft's ultra-premium products drove strong demand, and Pontoon segment's Crest and Balise brands made progress with production ramp and new product launches.

• Fiscal 2026 expects retail unit sales down 5%-10%. • Net sales expected to increase to between $295 million and $310 million, adjusted EBITDA between $29 million and $34 million, diluted earnings per share between $1.15 and $1.40. • Q1 net sales expected to be near $69 million or $67 million with adjusted EBITDA of $4 million and adjusted earnings per share of approximately $0.16. • Expect share repurchases in fiscal 2026 to exceed last year's levels. • Capital expenditures expected to be approximately $9 million for full year.

• Macro-economic uncertainty, persistent elevated interest rates, and volatile trade environment. • Consumer sentiment remains cautious. • Potential impact of tariffs on volume and overall sentiment. • Inventory levels across the category remain a challenge.

Q: Joe Altobello asked about retail cadence and dealer turns.

A: Scott Kent said Q4 was good on MasterCraft side, weaker on Pontoon, still believe 5%-10% decline possible. Bradley M. Nelson said despite lower retail assumptions, wholesale growth possible due to proactive measures.

Q: Craig Kennison asked about consumer dynamic and price surcharge.

A: Bradley M. Nelson said market leans premium, pricing in MasterCraft was flat to down, using discounting where needed.

Q: Eric Wold asked about fiscal '26 guidance and payment buyer.

A: Scott Kent said units likely bigger driver, ASPs relatively flat with second half higher. Bradley M. Nelson said difficult to predict interest rate impact, uncertainty continues.

Q: Anna Glaessgen asked about destocking pacing.

A: Scott Kent said destocking will be across year, not front loaded.

Q: Noah Zatzkin asked about dealer base and M&A.

A: Scott Kent said dealer inventories lower helped health, Bradley M. Nelson said continuing selective M&A approach.