MasterCraft Boat (MCFT) Q1 2025 earnings summary

Executive summary

• Net sales for Q1 FY2025 were $65.4 million, down 30.7% year-over-year, but exceeded expectations despite economic and industry headwinds and lower unit volumes.

• Adjusted EBITDA was $3.8 million (5.9% margin), and adjusted net income was $1.9 million ($0.12 per diluted share), both down significantly from the prior year.

• Significant dealer inventory reductions occurred, with nearly 500 units removed sequentially and over 1,000 in the past 12 months, returning to pre-pandemic levels.

• Completed the sale of the Aviara brand and entered an agreement to sell the Aviara manufacturing facility for $26.5 million, expected to close in Q2.

• Returned $3.5 million to shareholders via share repurchases in Q1.

Financial highlights

• Net sales were $65.4 million, down 31% year-over-year, primarily due to lower volumes and unfavorable model mix.

• Adjusted EBITDA was $3.8 million (5.9% margin), down from $14 million (14.9% margin) year-over-year.

• Adjusted net income was $1.9 million ($0.12 per diluted share), compared to $10.3 million ($0.60 per share) last year.

• Gross margin declined 570 basis points to 18.1% due to lower cost absorption and higher dealer incentives.

• Net loss for the quarter was $5.1 million, reflecting a $6.2 million loss from discontinued operations.

Outlook and guidance

• FY2025 net sales expected between $270 million and $300 million; adjusted EBITDA between $17 million and $26 million; adjusted EPS between $0.55 and $0.95.

• Q2 FY2025 net sales expected at approximately $60 million, with adjusted EBITDA of $1.0 million and adjusted loss per share of ($0.01).

• Capital expenditures for FY2025 projected at $12 million.

• Production ramp planned for the second half to meet seasonal demand and new product launches.

• Guidance was raised at the low end due to improved visibility and confidence in wholesale plans.