The following is a summary of the MasterCraft Boat Holdings, Inc. (MCFT) Q1 2025 Earnings Call Transcript:
Financial Performance:
Net sales for Q1 were $65 million, down 31% from last year primarily due to lower volumes and unfavorable model mix.
Gross margin for the quarter was 18.1%, a decrease from 23.8% year-over-year, attributed to lower cost absorption and higher dealer incentives.
Operating expenses were reduced to $10.8 million from $11.9 million, reflecting controlled discretionary spending.Adjusted income for the quarter stood at $1.9 million or $0.12 per diluted share, compared to $10.3 million or $0.60 in the previous year.
Adjusted EBITDA was $3.8 million, down from $14 million in the prior year, with an EBITDA margin of 5.9%.
Business Progress:
Successfully reduced dealer inventory levels more than anticipated, removing nearly 500 units across MasterCraft and Crest brands.
Anticipate ramping up production in the second half of the fiscal year to meet seasonal demand.
MasterCraft's new Model Year 25 products, including the XStar, have been well received with positive initial retail reactions.
Merritt Island facility's sale expected to close by the end of the fiscal second quarter, enhancing financial flexibility.
Opportunities:
Lower short-term interest rates beneficially impact dealer finance costs, potentially boosting buyer motivation.
Promising Q1 internal retail results exceeding expectations provide a positive outlook for sustained retail performance.
Recent dealer meetings injected renewed enthusiasm and strategic alignment, likely to bolster market positioning.
Risks:
Cautious wholesale planning in an unstable market with cautious dealer ordering anticipated through the off-peak season.
Continued high promotional activity expected to persist in the industry affecting pricing and margins in the near term.
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