MasterCraft Boat (MCFT)2025-05-07 13:47Sales Performance - Net sales decreased by $8.0 million (9.5%) in Q3 fiscal 2025 compared to the same period last year, primarily due to planned lower unit volumes[86]. - For the first nine months of fiscal 2025, net sales decreased by $63.3 million (23.6%) compared to the prior year, driven by planned lower unit volumes and unfavorable model mix[87]. - Net sales for the MasterCraft segment decreased by $5.6 million (8.0%) in Q3 2025 compared to Q3 2024, and by $43.5 million (19.9%) in the first nine months of 2025 compared to the same period in 2024[90][91]. - The Pontoon segment reported a net sales decrease of $2.5 million (17.3%) in Q3 2025 and $19.9 million (40.0%) in the first nine months of 2025 compared to the same prior-year periods, driven by lower unit volumes and increased dealer incentives[93][94]. Unit Sales Volume - Consolidated unit sales volume decreased by 147 units (19.2%) in Q3 and 755 units (30.5%) in the first nine months of fiscal 2025 compared to the prior year[85]. - MasterCraft unit sales volume decreased by 46 units (9.8%) in Q3 and 257 units (17.7%) in the first nine months of fiscal 2025[85]. - Pontoon unit sales volume decreased by 101 units (33.9%) in Q3 and 498 units (48.6%) in the first nine months of fiscal 2025[85]. Financial Metrics - Gross margin percentage declined by 250 basis points in Q3 and 470 basis points in the first nine months of fiscal 2025, attributed to changes in sales price, material and overhead inflation, and lower cost absorption due to decreased production volume[88]. - Adjusted EBITDA for Q3 2025 was $7.5 million (9.9% margin), down from $11.7 million (13.9% margin) in Q3 2024, while for the first nine months of 2025, it was $14.9 million (7.3% margin) compared to $38.6 million (14.4% margin) in the same period of 2024[99]. - Adjusted Net Income for Q3 2025 was $5.0 million, or $0.31 per share, compared to $8.5 million, or $0.51 per share, in Q3 2024[99]. - Income from continuing operations per diluted share for the three months ended March 30, 2025, was $0.23, a decrease of 32.4% from $0.34 for the same period in 2024[100]. - Adjusted Net Income per diluted share for the nine months ended March 30, 2025, was $0.53, compared to $1.65 for the same period in 2024, reflecting a decrease of 67.8%[100]. Operating Expenses - Operating expenses decreased by $1.2 million (9.3%) in Q3 and $1.8 million (5.1%) in the first nine months of fiscal 2025, compared to the prior year, as previous costs were elevated due to CEO transition and related share-based compensation[89]. Segment Performance - Operating income for the MasterCraft segment fell by $1.8 million (23.9%) in Q3 2025 and by $15.3 million (54.4%) in the first nine months of 2025 compared to the prior-year periods, primarily due to decreased net sales and increased materials and overhead inflation[92]. - The operating loss for the Pontoon segment increased by $0.8 million (94.2%) in Q3 2025 and by $7.4 million (5584.2%) in the first nine months of 2025 compared to the prior-year periods, attributed to decreased net sales and increased labor and materials costs[94]. Cash Flow and Debt - Cash and cash equivalents increased to $28.5 million as of March 30, 2025, up by $21.1 million from $7.4 million as of June 30, 2024[103]. - Total debt as of June 30, 2024, was $49.3 million, with no amounts outstanding as of March 30, 2025[103]. - Net cash provided by operating activities for the nine months ended March 30, 2025, was $18.5 million, down from $23.6 million for the same period in 2024[106][110]. - Net cash provided by investing activities was $35.0 million for the nine months ended March 30, 2025, compared to $1.8 million for the same period in 2024[108][111]. - Net cash used in financing activities was $55.0 million for the nine months ended March 30, 2025, which included $49.5 million used to repay outstanding borrowings of the Term Loan[109]. - As of March 30, 2025, the company had $100.0 million of available borrowing capacity under the Revolving Credit Facility[104]. - The company did not have any off-balance sheet financing arrangements as of March 30, 2025[112]. Leadership Changes - A leadership transition is scheduled with Timothy M. Oxley retiring as CFO effective December 31, 2025, and Scott Kent succeeding him on July 1, 2025[82]. Tariff Impact - The company anticipates a modest impact from recently imposed U.S. tariffs on fiscal 2025 costs, while closely monitoring the evolving tariff landscape[83]. Strategic Adjustments - The company continues to adjust its strategies in response to market conditions, including changes in dealer incentives and model mix[91][93]. - The company completed the Aviara Transaction and Aviara Facility Sale in October and December 2024, respectively, with results from these units reported as discontinued operations[81].