MasterCraft Boat Holdings, Inc. Q2 FY2026 earnings call

• Second quarter results exceeded expectations with net sales up 13% year over year and adjusted EBITDA rising nearly $4 million. - Announced a definitive agreement to combine with Marine Products Corporation, which will strengthen the marine platform through complementary brands, an expanded dealer network, and advanced product development/manufacturing. - Raised full-year guidance for fiscal 2026, with consolidated net sales expected between $300 million and $310 million, adjusted EBITDA between $36 million and $39 million, and adjusted earnings per share between $1.45 and $1.60. - MasterCraft segment continues to build momentum with new premium products and positive early boat show engagement. - Pontoon segment is aligning the business to current conditions, with Belize's Halo model adding to its portfolio.

For the MasterCraft segment, Q2 net sales increased $8.4 million or 13% year over year. Adjusted EBITDA rose nearly $4 million, with a margin improvement of approximately 480 basis points. The pontoon segment is executing with discipline, delivering year-over-year operational improvements, enhancing margin performance, and sharpening its pipeline. The luxury pontoon brand Belize extended its reach with the all-new Halo model, which is set to debut at upcoming boat shows. The MasterCraft segment's momentum continues with the introduction of redesigned models like the X24, Xstar, and the new X22, which broadens choice within the X product family.

• For fiscal 2026, consolidated net sales are expected to be between $300 million and $310 million, adjusted EBITDA between $36 million and $39 million, and adjusted earnings per share between $1.45 and $1.60. - Fiscal 2027 is expected to have consolidated net sales of approximately $75 million, adjusted EBITDA of approximately $9 million, and adjusted earnings per share of approximately $0.35. - The transaction with Marine Products Corporation is expected to be accretive to adjusted EPS in fiscal 2027, with approximately $6 million in annual cost savings from eliminating public company costs and corporate overhead.

Q: Joseph Nicholas Altobello from Raymond James asked about synergies, including cost and revenue synergies from expanded distribution and innovation pipeline.

A: Scott Kent responded that there are synergies beyond corporate overhead costs, including innovation platforms, manufacturing best practices, sourcing and procurement opportunities, and leveraging the dealer network.

Q: Craig R. Kennison from Baird asked about the deal process and innovation.

A: Bradley Nelson and Scott Kent discussed the strategic fit, complementary nature, and how the deal unlocks innovation opportunities through scale and shared technology stacks.

Q: Eric Christian Wold from Texas Capital Securities asked about Marine Products' model mix and combined dealer network.

A: Bradley Nelson and Scott Kent mentioned plans to accelerate innovation and identified growth opportunities in market-by-market distribution expansion.

Q: Anna Glaessgen from B. Riley Securities asked about pro forma math and margin improvement.

A: Scott Kent explained adjustments and synergies, and Bradley Nelson discussed sharing best practices and vertical integration opportunities.

Q: Gregory Miller from Truist Securities asked about regional geography and manufacturing processes.

A: Bradley Nelson noted the geographic advantages and similarities/differences in manufacturing processes that can be leveraged.

Q: Noah Seth Zatzkin from KeyBanc Capital Markets asked about TAM and price range.

A: Bradley Nelson and Scott Kent discussed the expanded addressable market and how the price range allows reaching a wider consumer base.

Q: Gerrick Johnson from Seaport Research Partners asked about revenue synergy and Belize's build-out.

A: Bradley Nelson and Scott Kent addressed market entry challenges and the continued expansion of Belize, emphasizing its independent operation and halo effect on the pontoon segment.

Q: Noah Seth Zatzkin followed up on TAM and price range, and Gerrick Johnson asked about deal closure risk.

A: Bradley Nelson and Scott Kent discussed the strategic fit and belief in the deal closing successfully, highlighting the compelling business case for shareholders.