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]