Core Insights - MasterCraft Boat reported fiscal second-quarter 2026 results that exceeded internal expectations, with consolidated net sales of $71.8 million, up 13.2% year-over-year, and a gross margin improvement to 21.6% [4][7][8] Financial Performance - Operating expenses increased to $12.8 million, up $2.1 million from the prior year, due to costs associated with a new ERP system, business development, and higher selling and marketing costs [1] - Adjusted net income was $4.7 million, or $0.29 per diluted share, compared to $1.7 million, or $0.10 per share, a year earlier [8] - Adjusted EBITDA rose to $7.5 million, up from $3.5 million last year, with an adjusted EBITDA margin improvement to 10.4% from 5.6% [8] Inventory and Demand - Pipeline inventory levels improved by approximately 25% year-over-year, with management maintaining a full-year assumption of a 5% to 10% decline in retail demand [9][10] - The company is entering the spring selling season with "right-sized" dealer inventories and a focus on innovation and cost efficiencies [3] Strategic Initiatives - MasterCraft announced a definitive agreement to combine with Marine Products Corporation, which is expected to broaden its brand portfolio and dealer footprint [4][6] - The transaction is valued at $232.2 million, with Marine Products shareholders receiving 0.232 shares of MasterCraft stock plus $2.43 in cash per share [6][18] - The combined company is expected to achieve approximately $6 million in annual cost savings and be accretive to adjusted EPS in fiscal 2027 [21] Future Guidance - Management raised full-year guidance for fiscal 2026 to $300–$310 million in sales, $36–$39 million in adjusted EBITDA, and $1.45–$1.60 in adjusted EPS, excluding the Marine Products deal [7][15] - For the fiscal third quarter of 2026, net sales are expected to be approximately $75 million, with adjusted EBITDA around $9 million and adjusted EPS of approximately $0.35 [15] Brand and Product Development - The MasterCraft brand is supported by premium products with higher margins, with new models like the X24, XStar, and the all-new X22 enhancing the product mix [12] - In the pontoon segment, operational improvements and new product introductions, such as the Halo model from the luxury brand Balise, are being emphasized [13][14]

Core Viewpoint Marine Products Corporation reported its unaudited financial results for the fourth quarter and full year ended December 31, 2025, highlighting significant growth in net sales but a decline in net income and earnings per share due to increased expenses and tax provisions related to the liquidation of company-owned life insurance policies. Fourth Quarter 2025 Results - Net sales reached $64.6 million, representing a 35% increase year-over-year, driven by a 12% price/mix increase and a 22% rise in the number of boats sold [5][10] - Gross profit was $12.7 million, up 39%, with a gross margin of 19.6%, an increase of 40 basis points compared to the prior year [5] - Selling, general and administrative expenses rose to $8.9 million, a 61% increase, accounting for 13.9% of net sales, up 230 basis points from 4Q:24 [6] - Net income was $2.4 million, down 45% year-over-year, with diluted EPS at $0.07, a decrease from $0.12 in 4Q:24 [7][10] - EBITDA was $4.5 million, a slight increase of 3% year-over-year, with an EBITDA margin of 7.0%, down 220 basis points from the previous year [8][10] Full Year 2025 Results - Total net sales for the year were $244.4 million, a 3% increase from $236.6 million in 2024 [10] - Net income for the year was $11.4 million, down 36% from $17.9 million in 2024, with diluted EPS at $0.32, down from $0.50 [10] - Adjusted net income was $12.4 million, with adjusted diluted EPS at $0.35 [10] - EBITDA for the year was $17.2 million, down 18% year-over-year, with an EBITDA margin of 7.0%, a decrease of 190 basis points [10] Balance Sheet, Cash Flow and Capital Allocation - Cash and cash equivalents at the end of 4Q:25 were approximately $43.5 million, with no outstanding debt [11] - Net cash provided by operating activities was $16.5 million, and free cash flow was $14.9 million year-to-date through 4Q:25 [11] - Total liabilities decreased to $22.3 million from $42.2 million in the previous year, while total stockholders' equity was $125.0 million, down from $129.0 million [18]

Core Insights - MasterCraft Boat Holdings, Inc. is acquiring Marine Products Corporation in a cash and stock transaction valued at approximately $232.2 million, enhancing its portfolio of leading brands in the recreational marine industry [2][4][3] Group 1: Transaction Overview - The acquisition will combine MasterCraft's brands (MasterCraft, Crest, Balise) with Marine Products' brands (Chaparral, Robalo), creating a diversified portfolio across four distinct categories [3][10] - Marine Products shareholders will receive $2.43 per share in cash and 0.232 shares of MasterCraft common stock, implying a value of $7.79 per Marine Products share based on MasterCraft's closing price on February 4, 2026 [4] - The transaction is expected to close in the second calendar quarter of 2026, pending shareholder approvals and customary closing conditions [8] Group 2: Strategic and Operational Benefits - The combined company will benefit from an expanded dealer network, enhancing geographic coverage and growth opportunities [3][10] - Enhanced manufacturing capabilities and technological innovation are anticipated to drive growth and efficiency, with facilities in Tennessee, Michigan, and Georgia [10] - The transaction is expected to generate net sales of approximately $560 million and adjusted EBITDA of approximately $64 million for the twelve months ending June 30, 2026 [10] Group 3: Leadership and Governance - Brad Nelson, CEO of MasterCraft, will lead the combined company, with Scott Kent as CFO, while maintaining the leadership teams of Chaparral and Robalo as separate operating units [6][7] - The Board of Directors will expand from seven to ten members, including three new directors, with Roch Lambert serving as Chair [7] Group 4: Financial Profile - The combined company will have a robust balance sheet with no debt, providing financial flexibility for growth investments [10] - The transaction is expected to be accretive to adjusted EPS in Fiscal 2027, with anticipated annual net savings of approximately $6 million from the elimination of Marine Products' public company costs [10]

Core Insights - Marine Products Corporation reported a 3% year-over-year decline in net sales for Q2 2025, totaling $67.7 million, primarily due to a 13% decrease in the number of boats sold, which was partially offset by a 10% price/mix increase [4][7] - The company experienced a net income of $4.2 million, down 25% from the previous year, with diluted EPS at $0.12, reflecting a net income margin decrease of 190 basis points to 6.1% [7][8] - Management expressed optimism about demand stabilization and upcoming model year 2026 introductions, despite ongoing concerns regarding tariffs and macroeconomic risks [3][4] Financial Performance - Gross profit for Q2 2025 was $12.9 million, a decrease of 2% year-over-year, with a gross margin of 19.1%, which improved by 20 basis points compared to the prior year [5][8] - Selling, general and administrative expenses rose by 9% to $8.1 million, representing 12.0% of net sales, attributed to increased R&D investments and timing of incentive compensation [5][8] - EBITDA for the quarter was $5.6 million, down 13% year-over-year, with an EBITDA margin of 8.3%, a decrease of 100 basis points from the previous year [7][8] Cash Flow and Balance Sheet - The company ended Q2 2025 with cash and cash equivalents of $50.2 million and no debt, with net cash provided by operating activities at $9.2 million and free cash flow at $8.6 million year-to-date [9][10] - Year-to-date dividend payments totaled $9.8 million, with a quarterly dividend of $0.14 per share declared for payment on September 10, 2025 [10] - Total assets as of June 30, 2025, were $173.2 million, with total liabilities at $46.0 million, indicating a strong balance sheet position [16][17] Market Outlook - Management highlighted the importance of a strong balance sheet and disciplined production management to navigate the current market environment, with expectations for capital expenditures of approximately $3 million for the full year 2025 [3][9] - The company is focused on product innovation and diversification to enhance market share and long-term shareholder value [12][13]