管理層發言
Ladies and gentlemen, thank you for standing by and welcome to the MasterCraft Boat Holdings, Incorporated Fiscal Third Quarter 2026 Earnings Conference Call. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Alec Harmon, Senior Director of Strategy and Investor Relations. Please go ahead, sir.
Thank you, operator, and welcome, everyone. Thank you for joining us today as we discuss MasterCraft's fiscal third quarter performance for 2026. As a reminder, today's call is being webcast live and will also be archived on our website for future listening. With me on this morning's call is Brad Nelson, Chief Executive Officer; and Scott Kemp, Chief Financial Officer. Brad will begin with an overview of our operational performance. After that, Scott will discuss our financial performance. Brad will then provide some closing remarks before we open the call up for questions. Before we begin, we'd like to remind participants that the information contained in this call is current only as of today, May 7, 2026. The company assumes no obligation to update any statements, including forward-looking statements. Statements that are not historical facts are forward-looking statements and subject to the safe harbor disclosure or disclaimer in today's press release. Additionally, on this conference call, we will discuss non-GAAP measures that include or exclude items not indicative of our ongoing operations. For each non-GAAP measure, we will also provide the most directly comparable GAAP measure in today's press release, which includes a reconciliation of these non-GAAP measures to our GAAP results. As a reminder, unless otherwise noted, the following commentary is made on a continuing operations basis and all references to specific quarters and periods will be on a fiscal basis. Today's outlook also excludes any impact from the proposed combination with Marine Products Corporation. With that, I will turn the call over to Brad.
Thank you, Alec, and good morning, everyone. We delivered third quarter results that exceeded our expectations driven by disciplined execution across the business and continued new product momentum. In a dynamic market environment, we remain focused on our strategy and core strengths driving operational efficiencies, aligning production with demand and delivering differentiated innovation that is resonating with customers and dealers. Our team's ability to stay agile and extend our premium product leadership continues to be a competitive advantage and a key driver of momentum across our brands. As we move into the heart of the selling season, we remain focused on dealer health and pipeline discipline, keeping our wholesale plans measured and flexible while continuing to build momentum across our brands. As always, I want to thank our team members and dealer partners for their focus and dedication as we move through the remainder of this fiscal year. Now turning to results. Q3 net sales increased $2.2 million or 3% year-over-year and adjusted EBITDA rose more than $3 million, a margin improvement of approximately 380 basis points. This year's progress and performance are a direct outcome of our continued innovation and focused execution. As a result, we are raising our full year guidance, which Scott will cover shortly. During the quarter, spring boat show results were encouraging and improved from prior year with particularly strong results at large shows in Salt Lake City, Dallas-Fort Worth and Atlanta for our MasterCraft brand. Feedback from both dealers and consumers reflects the impact of our premium product innovation and targeted commercial actions in key regions. Customers are rewarding us as we are winning on product design, performance and quality and premium value. At the same time in the broader market, recent geopolitical and broader macroeconomic developments have weighed on consumer sentiment and we are factoring that into our outlook. Reflecting our balanced approach to dealer health, we've continued to maintain healthy pipeline inventory levels ending the quarter with a 28% year-over-year improvement with inventory turns better than pre-pandemic levels. This is providing both us and our dealers with confidence and flexibility to navigate the current environment and generally align wholesale to retail demand moving forward. Our ability to generate cash flow at these volumes and our flexible operating model combined with our strong balance sheet position us well to manage near-term uncertainty while supporting sustainable long-term growth. Our capital allocation priorities remain disciplined and consistent. We have a solid balance sheet with no debt, strong cash flow and liquidity, providing flexibility and leaving our strategic growth initiatives fully funded. Now turning to our core brands. Within MasterCraft, premium product momentum continues to build across the lineup. Last month we announced the reintroduction of the X23 marking the return of a historic name in our portfolio and completing the next-generation X Series. Building on the momentum of our flagship XStar, we're seeing strong market engagement and share gains that reinforce our leadership position in the premium ski wake category. With positive dealer and consumer feedback and production ramping as planned, the X Series will further improve product mix sequentially in the fourth quarter. We expect MasterCraft brand and product momentum to continue through the summer as we showcase our product portfolio through opportunities for consumers to experience our newest models firsthand. As discussed in prior calls, our original assumption for MasterCraft retail for the year was to be down approximately 5% to 10%. Based on current product momentum and year-to-date solid retail performance, we are more optimistic and now anticipate retail for MasterCraft to be roughly flat to prior year as we exit the fourth quarter selling season. Looking ahead, we have an exciting lineup of on-water events planned throughout the summer designed to showcase innovation and deepen consumer engagement. These events are intended to expand our reach among new and aspiring riders supported in part by our continued partnership with the WWA, including events such as Rider Experience and Rule the Water. In parallel, we are expanding owner meet-ups and dealer-hosted events nationwide, reinforcing our culture while strengthening our direct connection with customers and the broader boating community. Turning to our Pontoon segment. The Pontoon category remains highly competitive with elevated promotional activity and cautious retail behavior across the industry. In this environment, we're staying disciplined, prioritizing dealer health, aligning production with demand and continuing to drive operational improvements. Across both our Pontoon brands, our focus remains on supporting dealers through the selling season, managing pipeline levels and executing our product and commercial plans in a way that positions the segment for sustainable progress and growth. Before turning the call over to Scott, I'd like to share a brief update on our proposed combination with Marine Products Corporation, which includes the history Chaparral and Robalo brands. Our conviction in the strategic rationale and long-term value creation of this combination remains strong. Our integration and synergy planning efforts continue to progress with detailed work streams in place driving confidence. We are progressing towards closing, including advancing our regulatory and disclosure processes as planned. We will hold a special meeting of stockholders 5 days from now at 8:00 a.m. Eastern Time on May 12, 2026, and expect to officially close the transaction shortly thereafter subject to formal approval by MasterCraft and Marine Products shareholders and the satisfaction of customary closing conditions. As we move forward, I want to thank our team members and dealer partners for their continued focus and commitment as we head into the final quarter of our fiscal year and beyond. We're excited about the opportunity to strengthen our partnership with the Chaparral and Robalo teams and begin to realize the value creation potential of the combination. Now I'll hand it to Scott to review the quarter's financials and forward guidance.
Thanks, Brad. Before turning to results, I'd like to echo Brad's comments regarding the progress we have made towards closing the proposed combination with Marine Products Corporation. We continue to see compelling scale, diversification and earnings power in the combined company. With dedicated teams, structured work streams and capital ready to be deployed; we are fully resourced to execute identified synergies and look forward to providing further updates and combined company guidance in our next quarterly call. Turning to our fiscal third quarter results. We are pleased with this quarter's performance delivering results above our expectations for both net sales and earnings due to the strong operating execution across our business. Retail and boat show results within the quarter performed well. Our efforts to return pipeline inventories to healthy levels and maintain a strong balance sheet leave us operating from a position of strength and well-equipped to manage fluctuations in market activity. Focusing on the top line, net sales for our third quarter were $78.2 million, up $2.2 million or 3% year-over-year. The increase was primarily driven by favorable model mix and options, pricing and discounts, partially offset by unfavorable volume, which is in alignment with our planned production cadence for the second half of the year. Gross margins improved 420 basis points over prior year to 25%, a result of strong operating performance across both segments, pricing and favorable options. Operating expenses were $20.8 million for the quarter, an increase of $9.2 million when compared to the prior year due to the business development and advisory costs related to the Marine Products Corporation transaction. Adjusted net income for the quarter was $7.2 million or $0.45 per diluted share. This compares to adjusted net income of $5 million or $0.30 per share in the prior year calculated using an effective tax rate of 23% in fiscal year '26 compared to 20% for the prior year period. We generated $10.7 million of adjusted EBITDA for the quarter compared to $7.5 million in the prior year, a 43% increase. Adjusted EBITDA margin was 13.7% compared to 9.9% in fiscal '25, a 380 basis point improvement over the prior year period. We ended the quarter with $84.6 million in cash and short-term investments, no debt and ample liquidity. Before moving to guidance, I'd like to provide an update on the pro forma financials for the combined company following close. Last quarter we provided a cash range of $40 million to $60 million. Costs associated with the transaction have been slightly higher than expected, but we still expect to finish fiscal year '26 at or near the bottom of this range. A strong balance sheet following the combination remains a strategic priority and with $75 million revolver availability, no debt and strong cash flow generation; we expect to be fully funded with ample flexibility to fund strategic growth initiatives. Our capital allocation priorities have not changed. We maintain a healthy balance sheet while pursuing organic growth first followed by share repurchases when valuation is attractive and disciplined M&A where it makes sense. Now turning to guidance for the remainder of the year. As a reminder, today's outlook excludes any impact from the proposed combination with Marine Products Corporation. As we look ahead, based on our fiscal Q3 performance and current expectations, we are raising the net sales, earnings and adjusted earnings per share guidance for the full year. For fiscal 2026, consolidated net sales are now expected to be $312 million with adjusted EBITDA now expected to be $40 million and adjusted earnings per share to be $1.65. We now expect capital expenditures to be approximately $8 million for the year. The strong fourth quarter implied in the full year guidance reflects the strategic debut and launch of new products, which will continue to have mix improvement sequentially over Q3. I'll turn it back to Brad for closing remarks.
Thank you, Scott. As we reflect on the quarter, what stands out most is our team's credibility and discipline in executing our strategy and the fundamentals of our business. In a dynamic environment, we remain grounded in maximizing what we can control, aligning production with demand, supporting dealer health and continuing to invest in premium differentiated product innovation. That focus has translated into solid operating performance and meaningful margin improvement during the quarter. Across the portfolio, we're seeing the benefit of this approach. At MasterCraft, completing the next-generation X Series with the reintroduction of the X23 alongside the X22 and X24 building on the momentum of our flagship XStar reinforces the strength of our premium product road map and our leadership position in the category. In pontoons, we're managing with discipline, keeping focused on execution and positioning the business for the long term. We remain confident in our strategy and ability to navigate market variabilities by staying disciplined, agile and focused on our core strengths. With a strong balance sheet, flexible operating model and a premium product portfolio that continues to resonate, we believe we are well positioned regardless of foreseeable market dynamics as we move through the remainder of the fiscal year. Looking ahead, we will continue to deploy capital to drive both organic and inorganic growth. With market momentum and the timely combination with Marine Products Corporation on the horizon, we are well positioned to capitalize on the market upswing moving forward. Operator, you may now open the line for questions.
分析師問答
Our first question comes from Joe Altobello of Raymond James.
This is Martin on for Joe. Congrats on the strong quarter. First of all, I want to quickly touch on the MPX combination. Now that you're further along with the process, is there any updates to the synergies expected?
I think as we alluded to in the prepared remarks there, we've created work streams. We're seeing the progress being made on those and we're probably more convicted towards the numbers we've put out in the proxy in the last quarter than we were even before. So things are progressing along pretty well.
Okay. Great. I just really want to quickly touch on retail cadence. Would you mind providing what it looked like for the quarter and just exiting the quarter as well?
So obviously as Brad mentioned in the call, we are a little bit more proactive or confident in our retail assumptions than we were even a quarter ago. So on the MasterCraft front, I think we've been saying we thought we'd be down 5% to 10% for the year. We're now saying we should be closer to flat on retail. Really the boat show results as we went through boat shows have remained pretty solid and given us a lot more confidence as we exit the year. The other thing that gives us a little confidence is the X Series launch and all of the X Series boats that are coming out. The fourth quarter will be very heavily weighted towards that X Series product and largely, most of the X Series product that we're going to generate in wholesale is already retail sold as well. So again this gives us a little more confidence that our fourth quarter is going to hold up pretty well to give us that flattish retail for the full year for MasterCraft.
Our next question comes from the line of Kevin Condon from Baird.
I wanted to ask as we look out and you start to lap all this destocking activity, I think you noted dealer inventory was down 28% year-over-year so imagining this fiscal '26 ends with wholesale well below retail. But just is there any way to think as we kind of roll into a more one-to-one wholesale to retail environment in terms of units, what that would look like in terms of the lift to wholesale shipments in your revenue growth?
So we're not prepared to give '27 guidance, but I think you've got the gist of the philosophy going into next year. We will end the year a little bit wholesale under retail again this year largely because retail is a little overperformed where we expected it to be. So next year, as we go into next year, our goal is to certainly align wholesale and retail a lot closer. So we'll need to get through the rest of the selling season, see how it ends, and then we'll be prepared to give guidance on that as we go into the '27 year.
Also, Kevin, we've got a lot to learn with the upcoming selling season. But coming out of boat show season and here in early spring, we've been generally pleased with the results. One thing I'd like to highlight is not only is our inventory better than pre-COVID traditional levels, inventory turns are also better than those levels. That together with the momentum coming out of boat shows, continued interest from customers and dealers on our new products gives us that confidence as well as the visibility into our production model that Scott referenced earlier.
Got you. And then I had one quick follow-up. Just the closer to flat retail assumption, is that for total company retail or is that a ski wake MasterCraft brand-specific comment?
That's a MasterCraft-specific comment.
Our next question comes from Anna Glaessgen of B. Riley Securities.
I'd like to ask on the gross margin performance in the quarter, really nice expansion, I think reached the highest level since 2023 in the quarter despite a lower sales growth. Could you maybe unpack the mix benefit or the contributors to that expansion and just generally how we should be thinking about gross margin as we assume greater parity between retail and wholesale?
There are several drivers to our margin. They are more or less consistent with what we've had through the entire year, and they affected us in Q3 as well. In Q3, our margins were improved in part because discounts have generally been lower all year. We also had a bit of segment mix as Pontoon wholesale went down a little more than MasterCraft units did, so we benefited from the higher MasterCraft sales. We've also been seeing operations improvements throughout the year that have reduced costs. Our Pontoon business has had fairly flat sales for the year, but margin improvement on the Pontoon business has contributed about $1.9 million of adjusted EBITDA, which helps overall margins. Along with some quality improvements, we've had favorable warranty trends throughout the year and that continued into Q3 as well. So there are multiple factors chipping away and adding to margin improvement as we've gone through the quarter and the year.
Okay. And then secondly, I know the acquisition hasn't closed, but anything you could share on MPX's retail this quarter and potentially into April, May?
You can review their published results on their own website. I'll leave the quarter to them to discuss, but their public filings provide that detail.
Okay. And then one more follow-up on guidance. I believe in the prepared remarks, you said something to the effect of incorporating the current uncertainty into the guidance. Could you expand on what you're thinking there and how that's impacting the guidance?
Anna, that's really driven around some of the macroeconomic and geopolitical issues that are happening. There has been a little bit of pausing or a downdraft at retail across the broader industry and broader categories. We've been generally pleased with our outperformance at the retail level amid that, but it's more geopolitical in nature which we view as temporary.
Our next question comes from Brandon Rollé from Loop Capital.
First, just on general and administrative cost. It seems like that ticked up a little bit in the quarter. Is that expected to continue throughout 4Q and into fiscal year '27?
I realized that most of the pickup was really the one-time costs associated with the acquisition. Of the $9.2 million increase in the quarter, about $8.4 million of that was related to the acquisition. We also have some continued costs related to our ERP implementation for a couple hundred thousand dollars. And then we do have some timing between quarters as well as a small increase year-over-year in sales and marketing. Those are the three main drivers. The acquisition costs will go away, the ERP costs will go away, and the sales and marketing increase is timing related.
Okay. Great. And then just on the Pontoon category, I think you gave more optimistic retail expectations for the MasterCraft brand. Any update on kind of recent trends within the Pontoon segment and any updated retail expectations there?
Pontoon in general hasn't really gotten going yet. That business traditionally is more of a payment buyer, highly compressed in the summer selling season, of which we're just in the early rounds. We view 2026 for us as really a stabilization year as we work through macroeconomic pressure and an elevated promotional environment. Using Crest as an example, that's a proud brand with 68 years of brand equity. We're working hard on this business with discipline: aligning inventory, strengthening our dealer network. Overall, that category is large and is the biggest subsegment within marine. We have strong brands and a good dealer network. As we stabilize through the summer selling season, we do need to see sustained retail in that market. What we think will drive that is a broader improvement in macroeconomic sentiment that would apply to the entire marine category as well.
Just remember, that stabilization was exactly what we planned to do this year. On a year-to-date basis, adjusted EBITDA for the Pontoon segment has increased about $1.9 million on relatively flat wholesale. So this year has done what we wanted it to do: get that stabilization and set a platform for growth in the future.
Our next question comes from Gerrick Johnson of Seaport Research Partners.
Piggybacking on Anna's question, you did not mention anything about commodities. Wondering how those are trending for you, how you lock in price or hedge and what you're seeing and experiencing going forward on those commodities, resins and aluminum in particular.
On petroleum-based materials — resins, gels and foam — it's still a relatively small portion of our entire bill of material. We do have some implied increases coming into our fourth quarter and full year guidance, but it's not significant. You can think of it as roughly 1% of our entire gross margin in terms of material costs. We're working with suppliers to mitigate that where possible, but it is not having a large impact on our full year profitability. On aluminum, that's more impacted by tariffs. As you may recall, we have been applying a surcharge on our invoices for tariffs at the MasterCraft level, and that surcharge has largely offset the cost of those tariffs on an almost dollar-for-dollar basis. So we've been netting out the effect of aluminum increases.
Okay. Got you. And then on your pro forma, thank you for the pro forma examples. But you are issuing shares to consummate this deal. So are you able to provide us depreciation, tax rate and pro forma shares to help us get to an EPS?
We will provide more of that guidance when we get into the '27 year. The proxy we sent out has some of that data and you can get a bit of that information there. Keep in mind that there will be purchase accounting adjustments, so anything you see in MPX's past numbers will change as we finalize purchase accounting and move forward. We'll provide more detail on those entries as we finalize them going into 2027.
Okay. Got you. And one last one. You mentioned retail has overperformed. You've been launching new models particularly at MasterCraft: the X Series — X22 in November, X24 in January, now the X23. Just wondering how much more of the market you can get with that one-foot difference? Do you cannibalize from the X22 and X24 or can you get incremental customers? Just the rationale behind the X22, X23 and X24; one foot each.
Gerrick, our momentum from dealers and consumers isn't just from new products. It's about customer experience, support, and quality products overall. New products are a catalyst, but we're also seeing surges across many product lines. Last year we launched the XStar at the ultra-premium end, which has garnered share. Now with X24, X22 and X23, dealers and consumers are saying these products are winning on three fronts: design, performance and quality and premium value. We like how they're positioned against the competition and they are winning incremental share. The market continues to lean premium, which is an advantage for us. That should continue until the mass market recovers. With our share capture momentum, we're winning incremental business, and it's not solely from new products.
We work closely with our dealers, and the dealers requested the X23 be in the lineup. They believe — and we agree — that by having all three products in the lineup, we will get incremental share and incremental sales from the combination of the three models. It provides a nice price-point differentiation. Certain markets prefer the X23, others the X22 or X24, so it does make a difference to dealers. They requested it and we listened and put it back in the lineup.
Thank you. I am showing no further questions at this time. I'd like to thank you all for your participation in today's conference. This does conclude the program. You may disconnect.