MCFT - Earnings call transcript Q2 2019 | MasterCraft Boat Holdings, Inc.

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Operator

Good day, ladies and gentlemen, and welcome to the Q2 Fiscal 2019 MasterCraft Boat Holdings, Inc. Earnings Conference Call. [Operator Instructions] As a reminder, today’s conference is being recorded. I would now like to turn the call over the Mr. Tim Oxley, Chief Financial Officer. begin. please Sir,

Tim Oxley

and live operator website Today’s is call future Thank will welcome also webcast and our be being listening. you, everyone. archived for in

President Terry Joining MasterCraft call on Executive is me Boat today’s Holdings’ and Chief Officer. McNew,

by followed strategic of and session. by discuss the Our will by expectations updated financials followed overview Q&A includes my Terry, agenda for Terry our the analysis the fiscal XXXX

in remind as participants call Before press today, that that information forward-looking are we like and subject facts today’s begin, The this only we statements. forward-looking historical contained obligation any are XXXX. release. is X, to to current no to of disclaimer would February in Statements assumes Safe statements, the not statements the company are update including Harbor

non-GAAP conference include indicative of this call, that special one-time discuss operations. will we items measures or on our not exclude or Additionally, ongoing

comparable our release, each measure, our most we will also measures non-GAAP a quarter GAAP earnings the provide second to results. in GAAP directly which of these XXXX For measure reconciliation includes non-GAAP fiscal

like turning would to I Investor our call to of results the call remind listeners a over deck Terry, Terry. financial in I there will summarizing With website. turn the that, our section slide that the Before is over to

Terry McNew

like Thanks, joining us Tim. everyone thank also I today. would for to

income, track net of record-setting adjusted levels delivering As you sales, growth the saw we EBITDA strategy. from today’s of press our and release, record quarter, continued of during our successful fiscal our second adjusted execution net reflecting

share retail during continue per performance pleased already under couldn’t diluted adjusted year-over-year, exceeded across our to especially for and the XX.X% ownership. like brands, of more At XX% performance grew in the For and up of per lofty our we the quarter first fully Crest quarter sport wholesale MasterCraft, our $XX.X momentum million. we’d performance boat to with with in our which congratulate to our employees, net million the whose to Adjusted from internal $XXX.X their quarter during income driving $X.XX be and demand. of employees perspective, brand all a share. registration to welcome XX.X% increased the see is strong increased sales We expectations quarter, the the net segment significantly EBITDA

turns from and Our dealer some inventory the optimal in of are growth level at early orders the show already entering of boat seeing we’re season, shows.

Through perfect, the Surf to customizable design, XXX XXXX, ballast, June System, our technology. that the product the we continue push sculpted on industry-leading will MasterCraft can performance boats to of utilizes waves From and Launched front for up pounds what to and development, continued industry’s most a early, into September the introductions U.S. extremely still economic growth. advanced of to new retail We encouraged by we in well expanding on been product While the have selling surf received. XXX the what attribute uses XXX XXXX, model are our technology the and water. a haul X,XXX of network at customized of with the industry’s best-in-class and perspective, are dealer everyone up the and heading performance wake-making wake retail we on strong of XXX seeing surf-specific largest our design heavy perfectly sport when season. MasterCraft the equipped this through Gen accomplish is the boat. engineering, and Launched creates X bounds new in

dealers season to our sell portion offset the margin consumers and import strategic advantage support, orders We European the heavy MasterCraft, provides strategic we’re for paying boat well Looking show Canada as offering competitive as providing dealers and these this support our year-over-year season. and impact dealers degradation into dealers. us from not tariffs seen tariff-free strong impacting is we’re companies of inventory standard seeing selling Canadian given compared investment revenue off, to to wholesale timing new a at a retail retail as We to believe decision with the some other our retaliatory the in have at and margins, we our boat heading of believe decision recognition year-to-date.

have we import said they as along, but As a they long becoming tariffs we permanent, anticipate all as not do remain persist, will these headwind.

As over having our throughout floors impact during significantly boats XXXX, the boat this the on of tariff-free fiscal balance been dealers tariff season forward second import as expect we move half support lower successful. fiscal strategy the of of financial be we of showroom show has future XXXX

dealers adjustment those and to implement development are to manufacturing when Canadian result are we retroactively At MasterCraft. this with the And decide to for Additionally, they NauticStar, would import significant product results removed, the date. initiatives. tariffs government pleased we to reimburse favorable should in continue

discussed and new product last an an we is XXXX NauticStar fiscal in As from for perspective. year the brand, quarter, investment both operational

the XXX largest Hybrid the the Offshore, NauticStar’s larger models Over has center new growing produced XX Hybrid will the the attack models, the months, XX boats new past market to feet model X and Bay, introduced Offshore, And XX XXX this growing. segment, NauticStar by brand. future with XS development. is models XXX NauticStar The XS for X ever new than in with larger and X have console

the we driver is development outboard cycle tripled product of engineers continue for excited the to to at the MasterCraft, about processes future. back was facilitate was in what have manufacturing and of to especially the fiscal what believe new new model the in facility normal to that would innovation heading larger critical efficient effectively models. to the segment. facility. and a models, And models and a significantly new order for see product way do product designers, introductions, NauticStar, forward. house in will now major into we it fiberglass key we’re this development these to have In larger X restructuring these undertake brand development cadence, carry With the innovation future demand retail Similar In NauticStar’s we our quarter, and production and out production allow lay first pulled a we more the for of and

principally gross to absorption. a margins, Given pullback, in decline overhead attributable this production we reduced NauticStar’s saw

Our planned remainder benefits ramped well and the the contemplated as production ASPs margins our fiscal these realize efficiencies larger of gradual as back margin higher we from improved XXXX as higher increases of up operating throughout and boats. gross

We greater are with XXX first in pleased fiscal points quarter, with in progress quarter. NauticStar fiscal made basis our second the gross margins than

puts execute growth us We low gross at margins on will our continue in a range future. to the NauticStar, on achieve we the path which to believe in consistent strategy XX%

period. in excited early quarter we continues Crest and we’re Crest we under believe in year-over-year. has large results its or expectations, results market opening most are share market both the of up XX% million the contributed of our sustainable, long segment from brand shows first our pontoon retail in the Crest, my profitable Crest net the the pontoon and and orders exceeded the on, initiatives I product we term. extremely but reflect in $XX.X share have will mentioned development take operational drive comments, growth prior ownership. about that that over working are growing segment, been with the Regarding over as the to from sales growth year pleased

we Aviara. boat are new luxury excited brand, more on day Lastly, details to our share

space AVXX. have to the Aviara with Show at our aimed of release is the next keep the that portfolio, and in a the innovation, days product award-winning new a preferences fills evolve light the luxury facility, that owners Aviara our consumer debut MasterCraft in will growing can years our exciting segment. the may in As week adding you officially press day brand. and performance at of Miami Aviara, model, first With Aviara ago, Holdings in of industry we a will MasterCraft owners bringing Boat couple boat research, MasterCraft culmination seen brand over we expect Built even the their family existing the defines are Boat service premium-focused and time. that if customer same quality, brand complementary our boating market

the from amount able to ideas new production segment a in, relatively around Importantly, with be of brand conceptions All our capital. in investment start a million. completely been we’ve completely launch company Aviara in $XX to for new of will minimal

While we strong the later we guidance a and we will in investment result provide plan time, on Aviara do benefit on shareholder Aviara believe financial returns. to lead from to additional return not incremental received best-in-class until a

Aviara while an previously instrumental of as believe in success MarineMax’ nation’s AVXXs boat distributed through As on be be X, core a MarineMax’ MasterCraft is and a this The year excited week help sterndrive, the display success Boat on shared, slips with models will We this separate to for fill located a and with partnered will available Aviara not product be sport available, MarineMax’ brand. X yacht parties, boat, as largest successful network outboard Aviara’s and this maximize X MarineMax, a the next will Aviara reputation void to will therefore, from will and industry share X, have distribution XXX our world-class the Pier in a will portfolio. we later at Show Miami new Today, retailer and XXX. be leadership from retailers are we both ensuring Aviara serve be AVXX for performance product. day to recreational retailer partnership

ceremony. the those join brand we at you Aviara XX, For February in X:XX of to p.m. time the Thursday, for show, on us attending launching you invite Eastern booth

first new exciting experience, You’ll this luxury brand. hand,

the turn back over financials. Tim, to to Now I go our call would over like to

Tim Oxley

as year Terry. quarter. ended given second partially by for million $XX.X XX, This a volume, sales an increase week overall to increased discounts December XXXX net second and the given Thanks, compared rose by holiday the $XX.X to rebate to or recognition to XX.X%, the to $XX.X driven timing of the European compared a as sales retaliatory sales due impacted shutdown $XX.X inclusion favorable import or quarter in the million $XXX.X in XX% The to production retail an perspective, represented tariffs. MasterCraft’s in second year revenue mix, net for ago XX% million From the the mitigated was increases expense grew price new top product the timing standard, well sales the million prior by quarter, Crest from partially extra line million net impact the of dealers increase Canadian, higher shutdown. fiscal unit planned by of increase. of or due

increases. made with offset and his into partially Canadian heading decision decreased units, XXXX, selling being NauticStar’s an show a which increase by introduced average in X% and favorable we lower a facility or throughout import by million driven remarks, season. $X driven offset believe in is to provides the in we boat competitive year mentioned scheduled sales to larger retrofitted European model handle by mix to As the our pullback dealers, the price wholesale new production the due models tariffs net as boat Terry calendar prices, for advantage NauticStar’s strategic by us

gross Crest decision Second prior quarter – million XX.X% profit $XX.X the a impacting expense, product a to MasterCraft by of compared MasterCraft On impact increases The or gross strategic sales of unit the growth for and at was net NauticStar’s incentives profits the consolidated $X.X from the tariffs both The second for higher and from while in due million to $XX.X offset increased import year volume million. and increase to offset due to portion period. and profit. sales quarter revenue million decreased period. decrease the our million compared to decrease partially of MasterCraft planned timing the of $X.X $X.X effect XX.X% favorable year dealers. the the NauticStar the contributed XX.X% and mix declined warranty basis, higher in inclusion prior our $X.X new fiscal accounted increase, sales price and Canadian primarily in the the standard strategic gross million for NauticStar. inclusion dilutive to European retail Crest, gross The for and to recognition decline margin retaliatory was to

in due to costs support On front, $X.X it year last headcount costs XX.X% the first compensation start-up occurring increase to second quarter the meeting million the initiatives Crest, growth This to XXXX increased $XX.X quarter prior added by of operating Aviara fiscal annual expense to the or for brand. in increase was These inclusion million fiscal expenses from as an were of instead associated year. compared with $X.X our and did period. quarter million second for offset mainly new MasterCraft’s dealer the

decreased XX% expenses prior As compared a second percentage to fiscal year of operating sales, quarter period net X.X% from of sales, net of respectively. sales the net to from

the $X.X by million XX% million sales $X Mastercraft company’s million Turning period, momentum in reduced income the tax XX.X% diluted period. line, income of to compares This the strong approximately year per quarter the in the net rate using driven computed prior bottom fully earlier of versus inclusion of net prior for share net totaled year effective continued and to at second the $XX.X XX.X of or estimated per versus EBITDA adjusted on and period. EBITDA the to $XX.X XX.X%, XX.X% a million was million Jobs fiscal tax year quarter. second XXXX Adjusted the of weighted shares $X.XX period. the fiscal of fully net average income $XX.X was Cuts from Tax or Adjusted second $XX.X diluted Act. for prior the margin in the compared Adjusted quarter share down million $X.XX million in rates was enactment from share count Crest,

time reduce to adjusted of we had on the adjusted our our forma given flow, the strong leverage Crest EBITDA. XXXX, generate been to Recall a forma X.Xx pro net able net cash ratio at ability EBITDA. Lastly, to of pro leverage acquisition that, October ratio free X.Xx we’ve

for we release financial over for building believe for and continue will with XX-Q EBITDA in in our the we non-GAAP and results section it adjusted In on adjusted forward of net of income outlook balance XXXX see we first the Terry for directly presented of our to year. reconciliation most this Please to press I’d healthy of to measures turn to sheet, margin emphasize a the very remainder While back are comparable GAAP. adjusted pleased our measures summary, the EBITDA, the debt future. to the with that, have we half the near With and fiscal accordance of look like momentum payment

Terry McNew

Tim. Thanks,

expect NauticStar flow strong the Mastercraft will continued and bottom by coupled initiatives with core across sustainable Looking drive driven our of continued products, Crest. forward. realization executing growth top the all and to of inventory well to We demand profitable and levels strategy our economy, ahead acquisition, to dealer These strong improvement XXXX positioned all segments, product are we development fiscal we cash on growth believe and the generation. initiatives second beyond, of continue half NauticStar line with line operational growth at record and along our we fronts, the healthy Crest remain be for going at levels strong

guidance our in which EBITDA the given sales margins. XX, basis, to Adjusted the the brand. On the we low-XX% previously in to full growth expected to expected the to range. margins range. expected we June sales year-end be are in a For fiscal growth higher percentage XXXX, contribution from be low from Adjusted net are higher mid- high-XX% dilutive consolidated to range, net percentage Crest, our revising up by XX% EPS Crest provided fully be contribution is is driven expect

March, from driven lower dilutive offset of to margins fiscal expected the net be in in due higher will or growth contribution production given planned net by compared is fiscal XXXX. expected be effect This is the Adjusted compared the be range, to For the fiscal growth Adjusted timing margin EPS Crest. sales our contribution our holiday range. by quarter third from to to percentage EBITDA – second in percentage a one in will of high-teens XX% the the fiscal range Crest. shutdown partially reflecting sales less low-XX% ending at to Mastercraft quarter XXXX percentage week, be growth

I’d Now the over like it to operator questions. to for turn

Operator

question line our Altobello of And you. Raymond James. Thank the of [Operator Joe first Instructions] comes from

is now Your line open.

Joe Altobello

Good guys. Hey, Thanks. afternoon.

here this couple on obviously Just wanted of questions. margins focus I quarter. in And a to the

revenue was your biggest of the timing You those the dealers, quarter? supporting margin one European contributor most which to of surprising one was in in Canadian, etcetera, those of guess of terms accounting, you recognition, guys I which and the number pressures noted a of the

Terry McNew

then The biggest followed other are tariff MD&A. we recognition and pointing contributor that support, standard in revenue out is by the our changes changes, Joe

Joe Altobello

Okay. And into coming were the than those larger you quarter? anticipated

Terry McNew

maybe of to took we than by little Perhaps. the in bit larger get so were lot of a I surprising. advantage But year the that pulled dealers was full maybe basis, on not it of a timing trying boats from on anything, a some some expecting, some QX. it XX/XX, got more know than ground

Joe Altobello

is there Okay. but this I raised guidance. else dilutive and guidance at to on going sales lowered And growth I see, afternoon, you get something that the overperformance your EPS obviously, margins, your Crest you Is beyond Crest?

Terry McNew

No And in points Joe, as NauticStar my actually were XXX up gross does great. we in margins basis Crest said prepared comments, QX.

expect it’s the increase significant MasterCraft. and products, year but fiscal change, yet call, product have to larger well continue change, at mentioned quarter’s in this they NauticStar, mixing QX do at we that last we in to pretty we and one No, and in QX. later more a I as changing released As to

So sales of contribution less because really, on extremely all I from think, just basis. good. Probably well. little performing bit the a additional are Crest anticipated things net a They’re

Joe Altobello

Okay thank you guys.

Operator

And line from our comes question of the Baird. next Craig from Kennison

Your line now is open.

Craig Kennison

good for taking afternoon. my question. Hi Thanks

EPS had up Again, little maybe unforeseen, incremental? lower. the follow that’s an it’s issue growth is last guidance tariff on say just bit to what Joe quarter? you your as And costs Just asked. a of Would

Terry McNew

the comments. mentioned certainly We and is, the biggest headwind, contribution as the I and cost prepared in drag tariff

So, extended than bit think we that’s it’s a anticipated, it. had small, but probably I that longer we’ve but

host Just and standard Canadian for small and revenue But of through known other recognition incremental predictable, extension just tariffs. the is shows there’s boat probably, a European items. and just the

Craig Kennison

an dealers? might that MarineMax distribute Thanks. you? product a of And other is Is eventually win major line. Aviara, through then that could Or exclusive the Or you shifting just endorsement to relationship?

Terry McNew

I to possibility absolutely look a soon. now MarineMax. and anticipate is at future, dealer. going other really, foreseeable the for premier it’s right are anytime but a that dealers, Well, don’t There be They to

to in done to charts, for with with it of is relationship mentioned, the been a as long show have tape-out], by years. at I know, think an at the see the We’ve And portfolio, to they some during of off dealer a seen and space encourage really Tim and it product. third-party their dealers as to we who our and got you them. rec absolutely be Brunswick it. excited the slips and come us been Pier by riders, about number white best They’re an [open equally X As the going I builds this. are well-received everybody just testing it’s up it, represent this are exceptionally And it’s

Craig Kennison

modeling would And how shipments terms the in ramp year? and And for perspective, of product from expect you a volume would that to line contribute throughout it what revenue?

Tim Oxley

As we’ve of revenue beginning book yet. just until not and will that’s start mentioned before, our year, the guidance July, we XXXX on model not at XXXX to we’re providing

you guys fill will future We calls. in on

Operator

our from Eric question Riley B. comes line Wold And the next of of FBR.

is line now Your open.

Eric Wold

us you, year-to-date a of the you can Thank of questions. margin good afternoon guess, sense on give those impacts I tariffs have been? what one, from couple tariffs, the

Terry McNew

year-to-date It’s range in the per $X.XX share on basis. a

Eric Wold

Okay. guess, to point is initial breakeven Aviara, for And level the brand? a I then that? terms can capacity production plan, And number capacity that in what you kind of to there to of units your for on get is of

Terry McNew

Right.

got here. we’ve So, available capacity

and X guys mentioned as As as in in recognized years the us North know, best America. IndustryWeek prepared the I manufacturer ago Magazine remarks, you

have up we’ve Hydra-Sports built the we the so to here. feet, We’ve So, used know-how. capacity. that capability. got product we We’ve to Remember, got XX build

mentioned before. X that models release will year. calendar the course this over I’ve We of

is XX, we in one and a outboard The our an sterndrive. offered first

We G&A future do about in the be it’s, within So, The I of think this. investment, CapEx, MasterCraft not year. it’s got We’ve growth do as $XX going all. mentioned, to first will and for payback is to capacity – at plenty that. capacity this total to million impact growth

Eric Wold

of over under next of on And where Okay. now possibly and it your the a us belt the and terms driving increased get to got a XX lastly margin production you that expansion? you could over do for little terms out both then are quarter, of you where facility in production update you’ve in think months, Crest, on more

Terry McNew

control, processes in in in there. obviously, Yes. to mind, working particular, are well. manufacturing taking fabricated. aluminum engineering They’re and people extremely our and capital Great Keep material boats,

You tooling. don’t need the

flow in through and laid So, they X initiatives quarters are they that are of out and able change of the to their this changing. effect showing within will improving capacity manufacturing margins. are the They’re putting we second already benefits. for in and synchronous year the control, half is we’ve throughput material process, the which some assembly of increasing way That and have probably

very So really to Company that And is aluminum in really, fabrication time. process quick. process X.X X probably short days, boat in

capacity, growing, they’re They’re no have plenty share, So, positive we’re very, going taking of very to they’re about problem. Crest. market

Operator

SunTrust. next of our line Michael Swartz And question of the from comes

line is now Your open.

Michael Swartz

Hi guys. good afternoon

before of quickly, laid opportunity Aviara guess, to you wanted volume? touch unit us, think big on a And think Aviara you terms of I do know be how to couple in view. maybe could actual that your over an But maybe Just would going there much just fair is? frame in you I big is how share XXXX market of don’t the years? your unit out how you’re Terry, what size Maybe you give

Terry McNew

leave going fill their It’s platforms, X show, we’ve XX feet. Well, for this brand They customers to from X to release MasterCraft know calendar will empty with stay this light at before models will consumer year, change that do each Lauderdale other of not and We tend X both who the space sterndrive Boat new boating they they boat Holdings tend into feet for X become preferences different their outboard XX models clearly to Fort to only the as but studies. and brand. models mentioned released the be our insight models we’ll nesters.

calls. addressable think specific we exceptional. it’s market is performance going upcoming share styling it you’re home numbers adjacent think is categories, market the you Once you ride European. outboard. those the to and sterndrive to and the the We boat, we’ll able day, do run, clearly see well one from the also of give and think The in and capture a it’s what We styling so

Michael Swartz

to as Okay. of a question and regard MasterCraft including how you be about a be you technical line would to new would Or mean, more And just it beyond? for with Aviara you segment breaking report the in out item I in of Aviara? XXXX kind today? think Aviara

Terry McNew

will the It included No. be P&L. MasterCraft in

not all that We to a President report myself will Brand will will not in here do MasterCraft. be segment reporting. at There

Michael Swartz

up I add? how Okay, year, I okay. think that think, part Tim, of should then give of Fantastic. would you volumes, week If, an being And said is which maybe, One, extra, the last flow? just a week were us think, that could increase core know was you like much relative Mastercraft that quarter, XX%, sense, does about how you to third extra pulled we I that had that And XX%. production maybe the from reason the

Tim Oxley

Mike. effect out. Exactly, million take up of when for still production. the I that it’s the $X that extra take you When MasterCraft’s even around week for down, XX% was QX sales net

of week. understand make So, MasterCraft’s guys to I that the you effect sure growing want that above over,

And we embedded QX that have so between yes, our moving to guidance million quarters. for and $X in

Michael Swartz

kind MasterCraft was guess, brand of of brand just I’m that And that’s funding the to was impacted there other is again, MasterCraft? spent that quarter? and volume the of the looking surprised did? XX% or given it much Or by MasterCraft weren’t margins question I on then, you you, you helpful. on Got mean, how that I a most tariffs. during at the of than unit only a business way was with regard little the activity mean, growth the that primary tariffs, that to attributable I the and was, better in

Terry McNew

quarter, so at to X share XXX% is a brands, in minimis and attributable $X.XX de per the for MasterCraft range. the other the is almost It it it’s

Operator

our of And Markets. Andress line of Brett comes next from the question KeyBanc Capital

Dan Charrow

on guys. for is questions. taking This my Thanks Hi Brett. for Dan Charrow

you driving have touch data but some demand MasterCraft So, variable, to about that? retail? at the up was been like looks registrations be the can how that It the the quarter. And demand. digits talk on product I of in which for well core restated double the lines can know I has just been wanted

Tim Oxley

I about talk all. want MasterCraft, first of to

of thing the in Our highest QX same for history fiscal retail QX. the and QX was this year company’s the

So Mastercraft in improved been that for the is what is our well segment MasterCraft terms has as is and demand outstanding. driving at the

Terry McNew

for Yes, Crest, good. it’s

I way, we’re Mastercraft is holding the the at all bit growing. company’s just great Crest. history. QX think, I’d experience QX consoles Crest a in X said, highest Tim characterize and because is retail share growth in And at well. And it an increasing sales this exceptional NauticStar, And center brands doing than X-year boats, to had seeing job. we’re that shift category XX-foot larger It they larger as as the double-digit clearly as

Dan Charrow

about due Got some in core within helpful. mix? dynamics the That’s you to And came it. that? Can Got brand, that lighter it. of ASPs some on the talk a than the of just recently. bit touching MasterCraft we’ve seen product Was some of

Terry McNew

is QX. typically the slower retail bit We in of a a darker. Yes. year. that see It’s This little quarter

into different inventory content also dealers and would or packages appropriately And X lighter that lightly we’ve bring in so, dealers X segregate classifications. little different they and been contented, with generally a boats their with helping the

understood and was expected. that So

Tim Oxley

tariff a And sales. don’t booked as the forget support we in reduction

pretty that’s significant I for change sales reason per a net so, the unit And of think, the also.

Dan Charrow

it, got Got it.

that’s year-over-year going Okay, impact longer production should may similar forward? the the but growth unit this planning we more, we may How there. have schedules, expect your that have looks underappreciated a helpful. NauticStar, it dynamic earlier, missed I you to one are and on And impacting like for much

Terry McNew

switch So units again, change, we we’ll guide growth as unit larger that models, will forward. to you going on

QX QX. be up will up over XXX their over up was to and QX. over QX they plan. basis internal will So, hitting they’re QX. be points QX

to So, they get by of this the gross margin fiscal expected back end will year. levels

Tim Oxley

larger comment, once they to so net in units, sales, concerned about Terry’s again, was worried not switch decline in see I’m net a which sales. I’m And that. as product, regarding they obviously, again most might about

Operator

[Operator line Wells Tim of Instructions] Conder from Securities. Fargo comes of next question Our the

Marc Torrente

Torrente This on for is Tim. actually Marc

out called questions Last follow-up few and recent your in fishing a us. peers some brand week, weakness pontoons. for Just of brand aluminum value one

recently on industry, wanted hear out the your what Crest? and of more Just more take maybe you’re seeing specifically, to across NXT

Terry McNew

show as portfolio. Yes. up year-to-date. We particular, comment boat time but in rationalizing to the saw share. pontoons, great, are Sell-through last Crest They’re sales market that for frame increasing well, is we’re year, aluminum year-to-date same compared

strong, not at for point, actually all. negative We’re charts, last out any to that our sales NXT are off of selling at it’s and seeing be Crest year, been, NXTXX, the at the some sold over is continuing time. impact periods

Tim Oxley

not that value of is our and would entry-level same part lineup. with Yes. It’s NXT and out It the And brand. everything else. our a quality the I point warranty comes Mastercraft

And we maybe reason extra. so don’t see that one that that

Marc Torrente

then great. the back then lifted, about that know I to the you how support, tariff the pent-up start Okay, expecting expect demand And much coming half if it’s there is And on going of said any off. year? drop year-to-date to are you you would that are through? impact the $X.XX tariffs

Tim Oxley

it our good us having the But the yes, of is at boats, in tariff-free dealers for the if Yes, if their There’s of the least of produce demand. these satisfy see year. tariffs some in to not advantage time get take in, that this can not to we are boats part pent-up strategy demand. the fiscal we could and lifted, enough with pent-up occurs, inventories, demand pent-up news

Terry McNew

have talk Well, else. Canada, think of have help sure I’ll got In that particular, make might see world, and decided intentionally don’t proper talk we proper we that dealers region inventory. I’ll America, support We but the offset throughout Canadian-European dealers, we the do in our a everywhere necessarily checks but Marc, that, about We Canada every I competitive tariff the advantage. to competitive that they in levels add about inventory. we’ve of did our to North Tim. to

don’t point, on the Tim’s to season part. miss so, to And we boating ground, May important fulfill that seeing and retail they and and stocked, we’re other June. products that we strong ever come have demand will large in be properly If may April, the and wholesale their QX able Canada, manufacturers have season that the dealers know we in

Tim Oxley

$X.XX the second $X.XX to to the in going regard in half, to it’s range. the And quantity in be

than less the significantly in a half was share it So on per basis. what first

Terry McNew

Correct.

Marc Torrente

provide in that any seeing, also Australia, major Europe? international the then terms in on other maybe front, retail And of color regions more you could Okay. you’re

Terry McNew

for year there and us. full be bit in a Australia Yes, less in plans It’s volume. actually anticipated some to put be tariff with reduction the that XX% strong planned Europe wholesale our and guidance continues for. would we we had then, little

supporting tariff. that We’re fully not

the supporting Europe still, in largest partially a decline, than the are Europe. that seeing in offset all areas, think of we’re other especially dealer stronger is most but We stronger, but tariff, probably incentives we probably portion brands to

Tim Oxley

seeing includes When the Australia. which inventory not the and turns world, I at Europe Canada rest of December, was the at of up, looking in and U.S., end I’m the dealer in the but only

So, we’re how very pleased with products positioned. our

Terry McNew

model the know, up want of end would product reemphasize, pipeline not Tim. half, demand That’s global was point, push to QX, want every inventory We I Marc, out single great our in we just dealers, at as the a retail, XX%. dealer the the we to you high year, watch retail first do week. definitely

Tim Oxley

to mentioned in $X.XX contemplated important earlier per has guidance. I the the our $X.XX been $X.XX Also, share, to note,

Operator

Executive And now Mr. the I’m showing time. I Chief this Terry no McNew, would turn back to closing further remarks. any to at call Officer, questions for like

Terry McNew

afternoon. continue XXXX We once and to Thank us May. Thank the on for well fiscal third to for you beyond. look positioned again, for quarter everyone be thanks you, forward progress operator. and organization, joining updating in our you. results And this Across we

Operator

conclude participating This today’s for Everyone, in you may wonderful thank does the day. gentlemen, a disconnect. all you and conference. and have Ladies program,

MasterCraft Boat (MCFT) 10 Feb 192019 Q2 Earnings call transcript