MCFT - Earnings call transcript Q2 2025 | MasterCraft Boat Holdings, Inc.

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Operator

Good day, and thank you for standing by. Welcome to the Q2 2025 MasterCraft Boat Holdings, Inc. Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Tim Oxley, Chief Financial Officer. ahead. go Please

Timothy Oxley

and today operator, performance Thank for you XXXX. Thank we welcome, discuss us as Quarter MasterCraft's joining you, everyone. Fiscal for Second

As Executive listening. With me live this morning's being archived call Brad our on a Nelson, is also Chief on future will be webcast for website call reminder, today's Officer. and is

before financial from we some I will quarter. We with overview an second for provide call will the then of discuss open the performance. our questions. begin closing will remarks our operational performance Brad then

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

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

we most GAAP our results. a in also also non-GAAP section results our reconciliation to For includes website. Investors each slide our deck measures a provide of of which the GAAP non-GAAP directly measure There today's release, the financial measure, these press in summarizing comparable is

made unless the reminder, otherwise As a continuing following on commentary noted, operations is a basis.

call With that, Brad. to the I'll turn over

Bradley Nelson

the expectations. dealers robust efforts our over destocking and Thank XX of to quarter results have boat you, morning, orders good ahead given everyone. A season. Tim, that the MasterCraft second place delivered exceeded show fiscal months new past confidence

to with investing and provides of variable structure, cash free flow in drive the brands, growth. to us highly ability portfolio our long-term continue consumer-centric the business Additionally, generation cost

deliver near-term XXXX periods ahead. planning to mitigate strategic strong position for as sustained operating allows we the flexible risk model and in business the production fiscal growth Our results us and

production ahead half schedule year purposeful well Our through us filled of of reducing the first fiscal puts our in inventories. lower

be in of season, the trends largely inventories the rearview summer filled retail should through continue selling mirror. current destocking Assuming

the of narrowing our full MasterCraft launch product promising XStar as guidance result performance year our are range a the of We and second quarter line.

detail this We greater will in on. discuss later

and inventory led Looking environment, quarter aggressive inventories lower at the uncertainty management production economic our seasonality. retail XX% amplified a second and by softer Despite reduction retail, of year-over-year. levels geopolitical mixed typical than to more dealer overall conditions

summer cautious As MasterCraft still optimism we for dealer despite gear is up season, uncertainty, the throughout retail our there network. selling

discussing for developments, cost At to I Before recent brand expecting tariffs. to address wanted point, fiscal the implications of we're briefly XXXX modest. topic be this

U.S. are our ongoing of trade the suppliers, variability affect and could from sourced majority While vast tariff currently components. materials certain

strong supplier have relationships working chain We supply experienced to proactively and mitigate risk. team an

broader continue act and sentiment. retail to the and dynamics potential trade on implications economy We monitor on of will on customer the impact

Now brands. turning our to

supporting various is the shows. City, Salt segment, Germany our For partners shows particularly MasterCraft has performed at boat actively Lake team Minneapolis Dusseldorf, the our MasterCraft worldwide. dealer our well at and

product is customers and lineup. and The demand As reminder, our has buzz network we in flagship new positive reaction our alike. high a been overwhelmingly throughout recently and the dealers our noticeable Initial XStar has retail a consumer generated launched industry. from

We strong across MasterCraft interest our the product a up on since launch, in resulting effect are the experiencing brand ramped portfolio. halo

into optimistic remaining and summer. that positive will are momentum this the carry We boat into shows

quarter the our Now XStar. third in with in discuss first new Production to quarter. related specifics shipments commenced let second wholesale more the me our

and a the sets half, and line brand-new This performance ramps, wake particularly production in ballast price in our wave offering. drive the model steadily fourth cash second early ultra-premium XX-foot new point earnings As its redesigned all-new rate through XStar lineup will XX-foot benchmark The design. of up quarter. hull free and consists a premium significant a flow XStar's and in

most creates revolutionary and exclusive XStar All SurfStar powerful audio tower, supercharged transom Utilizing engine, come including ZXXX waves system, with the with stern dash versatile X.X-liter features, XStars the a premium control. automated and innovative an an interface. an standard industry-leading system, thruster,

innovation, lineup. to and stop renewed We show. luxury showcased performance you're focus booth upcoming throughout able that this is hope Our by an at on team's boat our

Turning Pontoon our segment. to

pressures. retail levels elevated For with a some challenging industry the these types retail products, retail interest has pontoon across experienced has pontoon and industry the time now, been other combined payment higher seasonality rates pronounced for more deterred contributed aged the to softening inventory buyers have as by softening and environment. of macroeconomic This

successfully CREST CREST have filled Reducing brand. the our reduced at inventories season. focus for year-to-date, levels off-peak key Fiscal through has we pipeline a been

Early As shows. our CREST season, all-important we encouraged We've our to aged continues and priority selling near CREST'S the boat inventory brand management. show performance boat pipeline mixed. for selling been the been top Chicago have Minneapolis all-important results by be at and through summer

we strong brand, adding continue For brand BALISE been targeted ramp our as to Horizon and the and response dealers have visibility early promising our Helix locations. up models consumer in

we net of adds expected. facility balance proceeds million, announced sheet closed our financial to to December, flexibility sale invest $XX growth long-term the plant The cash of as over key as our Island Lastly, assets and in our related Merritt and in our ability and bolsters initiatives.

commentary to and who financial our over call quarter detailed the turn now of the will a additional Tim, on will discussion Tim? results. I provide

Timothy Oxley

Brad. Thanks,

financial second fiscal our to that keep turn low we quarter mind our reflect historically results volumes. results, in As production

bottom this persists, retail down that are market the of cycle. are we prolonged Although uncertainty optimistic near we

due decrease were top planned mix. on $XX.X for was prior unfavorable quarter line, or the and to lower million, million a sales the Focusing the period. model XX% from of the decrease volume primarily net $XX.X year This

the were to increased gross to Operating from the $XX.X was period. absorption decrease the XX.X%. attributed higher was lower XX.X% to expenses prior quarter share-based in for For cost year primarily The compared primarily due the year compensation. compared million production prior expenses million period the decrease. Operating quarter, margin to of $XX.X

$X.X of million compared net $X.XX or was the for quarter Adjusted compared share quarter million diluted quarter $XX.X second bottom calculated $X.X using the XX.X% a prior both per tax EBITDA fiscal the the year period, or for to EBITDA in per X.X% compares for adjusted period. line, in This for On share. to the rate $X.XX $X.X income income the diluted adjusted to XXXX. XX% was periods. Adjusted margin of year of million million prior was net

Our short-term balance nearly in ended sheet and with positions well as the we cash quarter us $XX million investments.

early facility free million cash million of have volumes, We revolving revolver $XXX QX. Despite off as flow balance we in end no cycle during the the resulting debt quarter our at of nearly pay availability the of $XX low credit generated we in quarter.

return fund initiatives strength shareholders. and financial ample to capital Our to key liquidity growth and us enables

initiating nearly more stock. we share in million approximately the We spent repurchase shares slower than as of XXXX, quarter, at shares During to of June XX,XXX we planned. program to shares. $XXX,XXX allocated X.X Since our pace repurchased have repurchase nearly million repurchase our common $XX a

and strong cash innovation, balance and reinforces our sheet remain opportunities financial business robust highly to the brand Our selective growth suppressed free product generation inorganic development, through stability through We and given flow environment. marine currently committed cycle. the

earlier, year to guidance we range. alluded Brad narrowing our are full As

sales $X.XX million share to adjusted EBITDA $X.XX. and million now net with $XXX and consolidated and $XX XXXX, $XX expected between $XXX fiscal between million between million, be earnings For are adjusted and per

approximately capital expect the to for be million expenditures continue year. to We $XX

and adjusted sales to For XXXX, earnings EBITDA the of be third $X with million per approximately quarter $XX approximately are million, net of adjusted expected of approximately consolidated fiscal $X.XX. share

closing includes to reminder, remarks. is our a a Brad which call to now of his second half model favorable production. I'll expected XStar for have back As ramp-up mix, the the turn

Bradley Nelson

Tim. you, Thank

highly well executed our long-term prudent season, combined business levels and dealer positions a quarter business delivering during for health ongoing Our despite better-than-expected Improving rates by production our fiscal retail with well short-term approach as summer we competitive results environment. macroeconomic lower the sustained success. uncertainty second and selling

first strong initiatives. and cash the -- solid performance growth financial key a Our generation, pursue XXXX flexibility we maintain balance robust remain and fiscal With of foundation into flow to half half sheet a we the our XXXX. provides back for

capitalize the beyond questions. may line business highly the rebalancing, are upcoming for we positioning market focused we inventory the on you As open now move recovery. Operator, to on

Operator

And will from James. Altobello [Operator Raymond be Joe our first Instructions] question coming of

Joseph Altobello

First question, about to I inventory. talk channel want

made you further mentioned You progress.

that. hoping numbers was us I So give around you some could

to have previously channel I did year. boats think think And you QX, said I roughly said coming the this you X,XXX of that out XXX targeting you're XXX. or

do So to end maybe you update us the on year? what by where we expect the are QX through and of

Timothy Oxley

we've we had we've very QX in some modest QX, increase cadence since is going was So increase typical the had channel which -- The for public increase lowest the QX company. a been to in from us.

inventory out we making that we're reduction progress good on earlier. So the called

expect range. we up So to still that in end

Joseph Altobello

business. were looks on us? Can down just shift gears Okay. little to to a -- the for shed brand that Super. for then that like significantly that ASPs pretty MasterCraft. And you for light It over

Timothy Oxley

we XStar in that Really, to so await think up XTs issue dealers be substantially as seeing the and the mix as we both alluded the QX ramp the launch. going a we'll we QX earlier, towards the I XStar it's production of had more NXTs and and mix mixed grow for promising

see going now so And up. the that -- ASPs we'll back

Bradley Nelson

ultra-premium some in the And Joe, downward address you entire starts to probably half the on come of stuff. that here do actually of models, the launch issue. the XT to portfolio balance adjusted and back with second those all new our affordability that across pricing didn't we We board NXT on recall for in the

Operator

will Our next Kennison Baird. from be coming question of Craig

Craig Kennison

the on market. kudos balance build sheet strong in work And this to a

stock? is there past? but be growth how compare into that -- we it mean, I frame You on like in what own investors, it brand ROI mentioned investments strategic your done Could of the Is based versus the strategic I'm any And you've acquisitions like bucket? conversations brand start-ups you initiatives. fits have in integration? acquisitions, also vertical to buybacks, do just way

Bradley Nelson

while on do the short overall In increasing of brands Yes, our executing question, course, thanks term, focus shareholder within value, is for Craig. that. we our and the

We're cash, Those brand As focused what development and sheet. with at continue are allocation to do our I look business, innovation, mean to leverage and improving our fortress priority. that's products capital more we're a simplifying the balance working and to execution allocation bolster distribution. returning we related, sheet, how priority parallel, while shareholders. a balance in to also strengthen capital going to

fund to and fully operating strategic to just initiatives shareholders. cash continue our and business improving the overall on returning will We

things. those we That's balance how

we we on we're mean return track I and variable know also our progress right in and capital we're doing course, that. returns maintain pleased pretty with all on our now. investment we of all a investments Of internally, in flexibility. market But

that So there will having us the is as we happen helpful, recovery to position that's help some for soon. flexibility bound but padding really

Craig Kennison

distribution? a in you just follow-up, see could maybe And the you opportunity frame

Bradley Nelson

States. United really mean out the world pretty States, geographic of course, are Domestically, it there, competitive in the big and with United Yes. in and markets concentrated distribution. a highly there I highly starts, certain goes out it boating areas, There's it's coverage. in beyond

distribution the great have get fill the in out dealers more that improvements together a of space dealer then growth partners. our lines investment energy. and we happen more on because to for do cycle also well. with positioning, That get as where pockets our up for We as dealers that that geographic stores, in pop, more opportunity have we and -- easier retail the pockets starts the parallel, down market that's to and of part partnering we when product a thrust return especially and well it's for to with portfolio, rooftops, with But expanding white in presence,

coverage geographic areas in affordability, just past important than about others. certain with profiles more of are in really geographies it's hitting certain in So And the demographic then there's growth. that and the consumers

there, in our continues improving enhancing world changing to turn the and as distribution vibrant we be need constantly So coverage. to

Operator

of next Markets. from Noah Our will be question coming Zatzkin KeyBanc Capital

Noah Zatzkin

Any relates have sentiment Just then consumer of you of just retail baked in And could the into kind to any are kind or would to anything in changes I what early in it shoots noticed green mentioned helpful. the appetite? you of out maybe be to general, guess, call assumptions guide? industry boat point terms shows, guys you've as

Timothy Oxley

basis. the was we and think of going beginning XX%. and the within thought to at be range on And year, guided we that we're X% down the is between retail year-to-date we So a case, that still

as had It's We expensive the is far it shows, a premium. pleasant a for XStar. boat there deal surprise was how on that see in reception demand As much very much an Europe. outstanding for boat boat to

in full down that there Europe in so economies are people being And spite their forth, of are wealthy worldwide. so advantage and that like toys, we're and of still taking

Bradley Nelson

or sentiment, call also consumer the show -- negative. of off-peak what for potential optimism that -- There just I that was cautious near cycle increasing we're just on is and from retail. at to sort and the the -- dealers bottom hearing just we amongst even with double the seasonality season, build we're about though boat of

In with new Here's Dusseldorf strong the in City. season and had starts a there's to Salt Minneapolis, particular, halo turn effect Lake on. Tim shows product, we nice course. of mentioned

lineup lot boat. half product solid XStar that production of of a of about a excited we're a attention this is but So our lot back lot and there, taken We're planning energy. loaded We've on eyeballs, in deposits drawing that.

front dealers the a is that as the side, to product to And premium customers with then BALISE some looking product. remain to And Miami credit to those the season it's first week. product knew a have as the And is the been there, BALISE on of in elevated. buyer this going encouraged on buyers forward also some market part favorable. This show get in shows of interest was boat a but product and cases, new our line, launching next are offering well. in we're rates which time pontoon feedback show the we're typically with see And BALISE very take product also we more although and some mixed the still that low time, in

Operator

be our [Operator question next coming will D.A. Griffin Bryan And of Instructions] from Davidson.

Griffin Bryan

are you destocking seems you're seeing fairly level overall speak well the if it just guys So Can of operate you are from dealer in? this what inventories doing also you competitors in like And destocking? with categories seeing to overall.

Timothy Oxley

first. -- think I the let's mean, talk shows We boat about

It that get sense -- than we've But to competitive how had from amount season we've of are varies environment fair We a very show. how You think some of has an competitors be with sure show boat been. to how we're overall, successful competitors. more doing. show we've a I'm discounting. our that continues pleased

on drive So side, we've But there. sales. with and market the -- it's been judicious a it's those rebates out retail tough to pontoon

And every lose we that and so make show a we sure combat do reason. hand-to-hand a to try deal within don't

Griffin Bryan

you. purchasing? Got kind unit. to think least retail who positive consumer biggest on a the think of then clients or that rate it of be certain on heard influence we've from there shoulders Is hurdle the of weight And are at back kind can would sense that dealers you a get purchasing help more

Timothy Oxley

opposed all with it's as but down my rates rates of another short on the speculation pure It's think cost are Short-term cost largely XXX basis environment. down to go interest -- affects I rates term. long-term retail part, points. go think, the to got the closely but long-term in dealers our are, and lending to XX I carrying probably Keep mind consumer these publicity to tied aligned more the gets carrying are are

Bradley Nelson

this is just any of and Some course, be, too, improvement can consumer sentiment, psychological positive. of for dealer

On buyers. roughly cash the our MasterCraft are side, I buyers half mean of

by impact, of have impacted. They And pontoon the course, so interest more some space, but in much is impacted. less rates MasterCraft less impacted

expect positive interest ease. input as more rates to see we would there So

Operator

concludes Thank you I'm further This call. questions. today's for showing participating. no conference

You now may disconnect.

MasterCraft Boat (MCFT) 6 Feb 252025 Q2 Earnings call transcript