MasterCraft Boat Holdings, Inc. Reports Fourth Quarter and Fiscal 2020 Results
Fourth Quarter Highlights:
- Ended the year with stronger than anticipated retail demand across all brands and dealer inventories 40 percent to 50 percent lower vs. end of fiscal 2019.
- Safely resumed all manufacturing operations, but production and sales heavily impacted by COVID-19 shutdowns.
- Repaid
$25.0 million on revolving credit facility and ended the quarter with strong liquidity position. - Net sales for the fourth quarter decreased to
$51.1 million , down 58.4 percent from$122.8 million in the prior-year period. - Net loss was
$(2.8) million or$(0.15) per diluted share. - Diluted Adjusted Net Loss per share, a non-GAAP measure, was
$(0.10) compared to Diluted Adjusted Net Income per share of$0.85 in the prior-year period. - Adjusted EBITDA, a non-GAAP measure, was
$0.9 million compared to$23.8 million in the prior-year period.
Full Year Highlights:
- Net sales decreased to
$363.1 million , down 22.2 percent from$466.4 million in the prior year. - Net loss was
$(24.0) million or$(1.28) per diluted share, including$56.4 million , or$(3.01) per share, of noncash goodwill and other intangible asset impairment charges related to NauticStar and Crest. - Diluted Adjusted Net Income per share, a non-GAAP measure, was
$1.34 compared to$2.82 in the prior year. - Adjusted EBITDA, a non-GAAP measure, declined 44.2 percent to
$44.3 million from$79.3 million in the prior year.
Brightbill continued, “The surge in retail demand and the historically low level of dealer inventory across our brands sets us up for significant growth this year and beyond. The heightened interest in boating as a safe, fun, outdoor, family-friendly recreation is expected to endure.”
Fourth Quarter Results
Net sales for the fourth quarter were
Gross profit decreased
Gross margin declined by 11.1 percentage points, to 14.5 percent for the fourth quarter from 25.6 percent for the prior-year period, due to decreased overhead absorption as a result of the lower unit sales volumes across each reportable segment.
Operating expenses decreased
Net loss for the fourth quarter was
Adjusted EBITDA was
See “Non-GAAP Measures” below for a reconciliation of Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Income (Loss), and Adjusted Net Income (Loss) per share to the most directly comparable financial measures presented in accordance with GAAP.
Fiscal 2020 Results
Net sales for fiscal 2020 were
- lower volumes as a result of our temporary manufacturing suspension;
- our pre-pandemic effort to reduce dealer inventory levels;
- pre-pandemic softness in the overall saltwater fishing category;
- and partially offset by the inclusion of Crest’s first quarter 2020 results (as Crest was acquired in the second quarter of 2019), the addition of our new Aviara brand, higher average wholesale prices for all our reportable segments, and lower sales discounts.
Gross profit decreased
Gross margin decreased by 3.5 percentage points to 20.8 percent for fiscal 2020 from 24.3 percent for fiscal 2019, primarily due to lower overhead absorption driven by lower sales volume for each reportable segment, higher warranty costs as a percentage of net sales, and
Operating expenses increased
Net loss for fiscal 2020 was
Adjusted EBITDA was
See “Non-GAAP Measures” below for a reconciliation of Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Income, and Adjusted Net Income per share to the most directly comparable financial measures presented in accordance with GAAP.
Outlook
Concluded Brightbill, “We remain bullish on the long-term prospects of both the markets we serve and the brands we own, especially with the backdrop of historically low dealer inventory levels combined with unprecedented retail demand trends. Our visibility has improved since last quarter, and while uncertainties in the marketplace remain, we are initiating guidance for both full year and first quarter of fiscal 2021. Importantly, our guidance assumes that we are able to operate all of our facilities throughout the year without any COVID-19 related shutdowns.”
The Company’s outlook is as follows:
- For full year fiscal 2021, consolidated net sales is expected to grow in the mid-20 percent range year-over-year, with Adjusted EBITDA margins in the 13 to 14 percent range, and Adjusted Earnings per share growth in the low-to-mid 40 percent range year-over-year.
- For the fiscal first quarter, consolidated net sales is expected to be down in the low-to-mid teens percent range year-over-year, with Adjusted EBITDA margins in the 11 to 12 percent range, and Adjusted Earnings per share down in the mid-to-high 30 percent range.
Conference Call and Webcast Information
For an audio replay of the conference call, dial (855) 859-2056 (domestic) or (404) 537-3406 (international) and enter audience passcode 9990389. The audio replay will be available beginning at 11:30 a.m. EDT on Wednesday, September 9, 2020, through 11:30 a.m. EDT on Wednesday, September 23, 2020.
About
Headquartered in
Forward-Looking Statements
This press release includes forward-looking statements (as such term is defined in the Private Securities Litigation Reform Act of 1995). Forward-looking statements can often be identified by such words and phrases as “believes,” “anticipates,” “expects,” “intends,” “estimates,” “may,” “will,” “should,” “continue” and similar expressions, comparable terminology or the negative thereof, and include statements in this press release concerning the resilience of our business model; our prospects for growth; and the potential impact of the COVID-19 Pandemic on our financial condition, operating results and liquidity.
Forward-looking statements are subject to risks, uncertainties and other important factors that could cause actual results to differ materially from those expressed or implied in the forward-looking statements, including, but not limited to: the potential effects of the coronavirus (COVID-19) pandemic on the Company, general economic conditions, demand for our products, changes in consumer preferences, competition within our industry, our reliance on our network of independent dealers, our ability to manage our manufacturing levels and our large fixed cost base, changes to
Any such forward-looking statements represent management's estimates as of the date of this press release. These forward-looking statements should not be relied upon as representing our views as of any date subsequent to the date of this press release. We undertake no obligation (and we expressly disclaim any obligation) to update or supplement any forward-looking statements that may become untrue or cause our views to change, whether because of new information, future events, changes in assumptions or otherwise. Comparison of results for current and prior periods are not intended to express any future trends or indications of future performance, unless expressed as such, and should only be viewed as historical data.
Use of Non-GAAP Financial Measures
To supplement the Company’s consolidated financial statements prepared in accordance with
Results of Operations for the Three Months and Fiscal Year Ended
MASTERCRAFT BOAT HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share data)
| Three Months Ended | Fiscal Year Ended | ||||||||||||||||
| June 30, | June 30, | June 30, | June 30, | ||||||||||||||
| 2020 | 2019 | 2020 | 2019 | ||||||||||||||
| Net sales | $ | 51,094 | $ | 122,809 | $ | 363,073 | $ | 466,381 | |||||||||
| Cost of sales | 43,687 | 91,316 | 287,717 | 353,254 | |||||||||||||
| Gross profit | 7,407 | 31,493 | 75,356 | 113,127 | |||||||||||||
| Operating expenses: | |||||||||||||||||
| Selling and marketing | 2,641 | 3,913 | 15,981 | 17,670 | |||||||||||||
| General and administrative | 6,201 | 7,130 | 25,557 | 27,706 | |||||||||||||
| Amortization of other intangible assets | 987 | 988 | 3,948 | 3,492 | |||||||||||||
| — | 31,000 | 56,437 | 31,000 | ||||||||||||||
| Total operating expenses | 9,829 | 43,031 | 101,923 | 79,868 | |||||||||||||
| Operating income (loss) | (2,422 | ) | (11,538 | ) | (26,567 | ) | 33,259 | ||||||||||
| Other expense: | |||||||||||||||||
| Interest expense | 1,378 | 1,684 | 5,045 | 6,513 | |||||||||||||
| Income (loss) before income tax expense (benefit) | (3,800 | ) | (13,222 | ) | (31,612 | ) | 26,746 | ||||||||||
| Income tax expense (benefit) | (964 | ) | (3,160 | ) | (7,565 | ) | 5,392 | ||||||||||
| Net income (loss) | $ | (2,836 | ) | $ | (10,062 | ) | $ | (24,047 | ) | $ | 21,354 | ||||||
| Net income (loss) per share: | |||||||||||||||||
| Basic | $ | (0.15 | ) | $ | (0.54 | ) | $ | (1.28 | ) | $ | 1.14 | ||||||
| Diluted | $ | (0.15 | ) | $ | (0.54 | ) | $ | (1.28 | ) | $ | 1.14 | ||||||
| Weighted average shares used for computation of: | |||||||||||||||||
| Basic earnings (loss) per share | 18,743,915 | 18,658,701 | 18,734,482 | 18,653,892 | |||||||||||||
| Diluted earnings (loss) per share | 18,743,915 | 18,658,701 | 18,734,482 | 18,768,207 | |||||||||||||
MASTERCRAFT BOAT HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except per share data)
| June 30, | June 30, | |||||||
| 2020 | 2019 | |||||||
| ASSETS | ||||||||
| CURRENT ASSETS: | ||||||||
| Cash and cash equivalents | $ | 16,319 | $ | 5,826 | ||||
| Accounts receivable, net of allowances of |
6,145 | 12,463 | ||||||
| Income tax receivable | 4,924 | 951 | ||||||
| Inventories, net | 25,636 | 30,660 | ||||||
| Prepaid expenses and other current assets | 3,719 | 4,464 | ||||||
| Total current assets | 56,743 | 54,364 | ||||||
| Property, plant and equipment, net | 40,481 | 33,636 | ||||||
| 29,593 | 74,030 | |||||||
| Other intangible assets, net | 63,849 | 79,799 | ||||||
| Deferred income taxes | 16,080 | 6,240 | ||||||
| Deferred debt issuance costs, net | 425 | 451 | ||||||
| Other long-term assets | 752 | 253 | ||||||
| Total assets | $ | 207,923 | $ | 248,773 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| CURRENT LIABILITIES: | ||||||||
| Accounts payable | $ | 10,510 | $ | 17,974 | ||||
| Income tax payable | — | 426 | ||||||
| Accrued expenses and other current liabilities | 35,985 | 41,421 | ||||||
| Current portion of long-term debt, net of unamortized debt issuance costs | 8,932 | 8,725 | ||||||
| Total current liabilities | 55,427 | 68,546 | ||||||
| Long-term debt, net of unamortized debt issuance costs | 99,666 | 105,016 | ||||||
| Unrecognized tax positions | 3,683 | 2,895 | ||||||
| Other long-term liabilities | 277 | — | ||||||
| Total liabilities | 159,053 | 176,457 | ||||||
| COMMITMENTS AND CONTINGENCIES | ||||||||
| STOCKHOLDERS' EQUITY: | ||||||||
| Common stock, |
189 | 188 | ||||||
| Additional paid-in capital | 116,182 | 115,582 | ||||||
| Accumulated deficit | (67,501 | ) | (43,454 | ) | ||||
| Total stockholders' equity | 48,870 | 72,316 | ||||||
| Total liabilities and stockholders' equity | $ | 207,923 | $ | 248,773 | ||||
Supplemental Operating Data
The following table presents certain supplemental operating data for the periods indicated:
| Three Months Ended | Fiscal Year Ended | ||||||||||||||||||||||||
| June 30, | June 30, | June 30, | June 30, | ||||||||||||||||||||||
| 2020 | 2019 | Change | 2020 | 2019 | Change | ||||||||||||||||||||
| (Dollars in thousands) | (Dollars in thousands) | ||||||||||||||||||||||||
| Unit sales volume: | |||||||||||||||||||||||||
| MasterCraft | 308 | 826 | (62.7 | %) | 2,478 | 3,435 | (27.9 | %) | |||||||||||||||||
| NauticStar | 145 | 440 | (67.0 | %) | 1,191 | 1,831 | (35.0 | %) | |||||||||||||||||
| Crest(a) | 216 | 675 | (68.0 | %) | 1,623 | 2,078 | (21.9 | %) | |||||||||||||||||
| Consolidated | 669 | 1,941 | (65.5 | %) | 5,292 | 7,344 | (27.9 | %) | |||||||||||||||||
| MasterCraft | $ | 35,254 | $ | 79,768 | (55.8 | %) | $ | 246,455 | $ | 311,830 | (21.0 | %) | |||||||||||||
| NauticStar | 7,203 | 19,740 | (63.5 | %) | 54,930 | 77,995 | (29.6 | %) | |||||||||||||||||
| Crest(a) | 8,637 | 23,301 | (62.9 | %) | 61,688 | 76,556 | (19.4 | %) | |||||||||||||||||
| Consolidated | $ | 51,094 | $ | 122,809 | (58.4 | %) | $ | 363,073 | $ | 466,381 | (22.2 | %) | |||||||||||||
| Net sales per unit: | |||||||||||||||||||||||||
| MasterCraft | $ | 114 | $ | 97 | 17.5 | % | $ | 99 | $ | 91 | 8.8 | % | |||||||||||||
| NauticStar | 50 | 45 | 11.1 | % | 46 | 43 | 7.0 | % | |||||||||||||||||
| Crest(a) | 40 | 35 | 14.3 | % | 38 | 37 | 2.7 | % | |||||||||||||||||
| Consolidated | 76 | 63 | 20.6 | % | 69 | 64 | 7.8 | % | |||||||||||||||||
| Gross margin | 14.5 | % | 25.6 | % | -1110 bpts |
20.8 | % | 24.3 | % | -350 bpts |
|||||||||||||||
(a) Crest was acquired on
Non-GAAP Measures
EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin
We define EBITDA as earnings before interest expense, income taxes, depreciation and amortization. We define Adjusted EBITDA as EBITDA further adjusted to eliminate certain non-cash charges or other items that we do not consider to be indicative of our core and/or ongoing operations. For the periods presented herein, these adjustments include
Adjusted Net Income (Loss) and Adjusted Net Income (Loss) Per Share
We define Adjusted Net Income (Loss) and Adjusted Net Income (Loss) per share as net income adjusted to eliminate certain non-cash charges or other items that we do not consider to be indicative of our core and/or ongoing operations and adjusted for the impact to income tax expense (benefit) related to non-GAAP adjustments. For the periods presented herein, these adjustments include
EBITDA, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Income (Loss), and Adjusted Net Income (Loss) per share, which we refer to collectively as the Non-GAAP Measures, are not measures of net income or operating income as determined under accounting principles generally accepted in
- Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future and Adjusted EBITDA does not reflect any cash requirements for such replacements;
- Adjusted EBITDA does not reflect our cash expenditures, or future requirements for capital expenditures or contractual commitments;
- Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs;
- Adjusted EBITDA does not reflect our tax expense or any cash requirements to pay income taxes;
- Adjusted EBITDA does not reflect interest expense, or the cash requirements necessary to service interest payments on our indebtedness; and
- Adjusted Net Income (Loss), Adjusted Net Income (Loss) per share, and Adjusted EBITDA do not reflect the impact of earnings or charges resulting from matters we do not consider to be indicative of our core and/or ongoing operations, but may nonetheless have a material impact on our results of operations.
In addition, because not all companies use identical calculations, our presentation of the Non-GAAP Measures may not be comparable to similarly titled measures of other companies, including companies in our industry.
We do not provide forward-looking guidance for certain financial measures on a
The following table presents a reconciliation of net income (loss) as determined in accordance with
| Three Months Ended | Fiscal Year Ended | ||||||||||||||||
| June 30, | June 30, | June 30, | June 30, | ||||||||||||||
| 2020 | 2019 | 2020 | 2019 | ||||||||||||||
| (Dollars in thousands) | (Dollars in thousands) | ||||||||||||||||
| Net income (loss) | $ | (2,836 | ) | $ | (10,062 | ) | $ | (24,047 | ) | $ | 21,354 | ||||||
| Income tax expense (benefit) | (964 | ) | (3,160 | ) | (7,565 | ) | 5,392 | ||||||||||
| Interest expense | 1,378 | 1,684 | 5,045 | 6,513 | |||||||||||||
| Depreciation and amortization | 2,842 | 2,337 | 10,527 | 7,787 | |||||||||||||
| EBITDA | 420 | (9,201 | ) | (16,040 | ) | 41,046 | |||||||||||
| — | 31,000 | 56,437 | 31,000 | ||||||||||||||
| Aviara start-up costs(b) | 234 | 1,140 | 1,446 | 2,840 | |||||||||||||
| COVID-19 Shutdown Costs(c) | (112 | ) | — | 1,394 | — | ||||||||||||
| Share-based compensation | 361 | 519 | 1,061 | 1,678 | |||||||||||||
| Transaction expense(d) | — | 333 | — | 2,377 | |||||||||||||
| Inventory step-up adjustment - acquisition related(e) | — | — | — | 382 | |||||||||||||
| Adjusted EBITDA | $ | 903 | $ | 23,791 | $ | 44,298 | $ | 79,323 | |||||||||
| Adjusted EBITDA margin | 1.8 | % | 19.4 | % | 12.2 | % | 17.0 | % | |||||||||
(a) Represents non-cash charges recorded in the NauticStar and Crest segments for impairments of goodwill and trade name.
(b) Represents start-up costs associated with Aviara, a completely new boat brand in an industry category previously not served by the Company. We began selling the brand’s first two models, the AV32 and the AV36, during the first and second quarters of fiscal 2020, respectively. We expect to begin selling one additional model, the AV40, in the first half of fiscal 2021. Start-up costs presented for fiscal 2020 are related to the AV36 and AV40 models. Start-up costs presented for fiscal 2019 are related to the launch of the Aviara brand and the three initial Aviara models which had not yet begun selling.
(c) Represents lump sum severance payments and costs related to temporary continuation of healthcare benefits for certain laid off employees, in connection with the COVID-19 Pandemic.
(d) Represents acquisition related costs and other integration costs associated with our acquisitions of Crest and NauticStar in fiscal 2019 and 2018, respectively.
(e) Represents post-acquisition adjustment to cost of goods sold for the fair value step up of inventory acquired all of which was sold during respective fiscal years.
The following table sets forth a reconciliation of net income (loss) as determined in accordance with U.S. GAAP to Adjusted Net Income (Loss) for the periods indicated:
| Three Months Ended | Fiscal Year Ended | ||||||||||||||||
| June 30, | June 30, | June 30, | June 30, | ||||||||||||||
| 2020 | 2019 | 2020 | 2019 | ||||||||||||||
| Net income (loss) | $ | (2,836 | ) | $ | (10,062 | ) | $ | (24,047 | ) | $ | 21,354 | ||||||
| Income tax expense (benefit) | (964 | ) | (3,160 | ) | (7,565 | ) | 5,392 | ||||||||||
| — | 31,000 | 56,437 | 31,000 | ||||||||||||||
| Amortization of acquisition intangibles | 962 | 962 | 3,842 | 3,385 | |||||||||||||
| Aviara start-up costs(b) | 234 | 1,140 | 1,446 | 2,840 | |||||||||||||
| COVID-19 Shutdown costs(c) | (112 | ) | — | 1,394 | — | ||||||||||||
| Share-based compensation | 361 | 519 | 1,061 | 1,678 | |||||||||||||
| Transaction expense(d) | — | 333 | — | 2,377 | |||||||||||||
| Inventory step-up adjustment - acquisition related(e) | — | — | — | 382 | |||||||||||||
| Adjusted Net Income (Loss) before income taxes | (2,355 | ) | 20,732 | 32,568 | 68,408 | ||||||||||||
| Adjusted income tax expense (benefit)(f) | (542 | ) | 4,665 | 7,491 | 15,392 | ||||||||||||
| Adjusted Net Income (Loss) | $ | (1,813 | ) | $ | 16,067 | $ | 25,077 | $ | 53,016 | ||||||||
| Adjusted net income (loss) per common share | |||||||||||||||||
| Basic | $ | (0.10 | ) | $ | 0.86 | $ | 1.34 | $ | 2.84 | ||||||||
| Diluted | $ | (0.10 | ) | $ | 0.85 | $ | 1.34 | $ | 2.82 | ||||||||
| Weighted average shares used for the computation of: | |||||||||||||||||
| Basic Adjusted net income (loss) per share | 18,743,915 | 18,710,233 | 18,734,482 | 18,653,892 | |||||||||||||
| Diluted Adjusted net income (loss) per share(g) | 18,743,915 | 18,851,352 | 18,734,482 | 18,768,207 | |||||||||||||
(a) Represents non-cash charges recorded in the NauticStar and Crest segments for impairments of goodwill and trade name.
(b) Represents start-up costs associated with Aviara, a completely new boat brand in an industry category previously not served by the Company. We began selling the brand’s first two models, the AV32 and the AV36, during the first and second quarters of fiscal 2020, respectively. We expect to begin selling one additional model, the AV40, in the first half of fiscal 2021. Start-up costs presented for fiscal 2020 are related to the AV36 and AV40 models. Start-up costs presented for fiscal 2019 are related to the launch of the Aviara brand and the three initial Aviara models which had not yet begun selling.
(c) Represents lump sum severance payments and costs related to temporary continuation of healthcare benefits for certain laid off employees, in connection with the COVID-19 Pandemic.
(d) Represents acquisition related costs and other integration costs associated with our acquisitions of Crest and NauticStar in fiscal 2019 and 2018, respectively.
(e) Represents post-acquisition adjustment to cost of goods sold for the fair value step up of inventory acquired all of which was sold during respective fiscal years.
(f) Reflects income tax expense at a tax rate of 23.0% for fiscal 2020 and 22.5% for fiscal 2019.
(g) Represents the Weighted Average Shares Used for the Computation of Basic and Diluted earnings (loss) per share as presented on the Consolidated Statements of Operations to calculate Adjusted Net Income per diluted share for all periods presented herein.
The following table presents the reconciliation of net income (loss) per diluted share to Adjusted Net Income (Loss) per diluted share for the periods presented:
| Three Months Ended | Fiscal Year Ended | ||||||||||||||||
| June 30, | June 30, | June 30, | June 30, | ||||||||||||||
| 2020 | 2019 | 2020 | 2019 | ||||||||||||||
| Net income (loss) per diluted share | $ | (0.15 | ) | $ | (0.54 | ) | $ | (1.28 | ) | $ | 1.14 | ||||||
| Impact of adjustments: | |||||||||||||||||
| Income tax expense (benefit) | (0.05 | ) | (0.17 | ) | (0.40 | ) | 0.29 | ||||||||||
| — | 1.65 | 3.01 | 1.65 | ||||||||||||||
| Amortization of acquisition intangibles | 0.05 | 0.05 | 0.20 | 0.18 | |||||||||||||
| Aviara startup costs(b) | 0.01 | 0.06 | 0.08 | 0.15 | |||||||||||||
| COVID-19 Shutdown Costs(c) | (0.01 | ) | — | 0.07 | - | ||||||||||||
| Share-based compensation | 0.02 | 0.03 | 0.06 | 0.09 | |||||||||||||
| Transaction expense(d) | — | 0.02 | - | 0.12 | |||||||||||||
| Inventory step-up adjustment - acquisition related(e) | — | — | - | 0.02 | |||||||||||||
| Adjusted Net Income (Loss) per diluted share before income taxes | (0.13 | ) | 1.10 | 1.74 | 3.64 | ||||||||||||
| Impact of adjusted income tax expense on net income per diluted share before income taxes(f) | 0.03 | (0.25 | ) | (0.40 | ) | (0.82 | ) | ||||||||||
| Adjusted Net Income (Loss) per diluted share | $ | (0.10 | ) | $ | 0.85 | $ | 1.34 | $ | 2.82 | ||||||||
(a) Represents non-cash charges recorded in the NauticStar and Crest segments for impairments of goodwill and trade name.
(b) Represents start-up costs associated with Aviara, a completely new boat brand in an industry category previously not served by the Company. We began selling the brand’s first two models, the AV32 and the AV36, during the first and second quarters of fiscal 2020, respectively. We expect to begin selling one additional model, the AV40, in the first half of fiscal 2021. Start-up costs presented for fiscal 2020 are related to the AV36 and AV40 models. Start-up costs presented for fiscal 2019 are related to the launch of the Aviara brand and the three initial Aviara models which had not yet begun selling.
(c) Represents lump sum severance payments and costs related to temporary continuation of healthcare benefits for certain laid off employees, in connection with the COVID-19 Pandemic.
(d) Represents acquisition related costs and other integration costs associated with our acquisitions of Crest and NauticStar in fiscal 2019 and 2018, respectively. The fiscal 2019 amount reflects a decrease of
(e) Represents post-acquisition adjustment to cost of goods sold for the fair value step up of inventory acquired all of which was sold during respective fiscal years.
(f) Reflects income tax expense at a tax rate of 23.0% for fiscal 2020 and 22.5% for fiscal 2019.
(g) Reflects the impact of rounding in the other adjustments presented.
Change in Non-GAAP Financial Measure
Prior to fiscal year 2020, the Company’s calculation of a diluted per share amount of Adjusted Net Income (Loss) included an adjustment to fully dilute this non-GAAP measure for all outstanding share-based compensation grants. This additional dilution was incorporated by adjusting the GAAP measure, Weighted Average Shares Used for the Computation of Basic earnings (loss) per share, as presented on the Consolidated Statements of Operations, to include a dilutive effect for all outstanding RSAs, PSUs, and stock options. Beginning with the fiscal year 2020 presentation for all periods presented, the Company will no longer include this additional dilution impact in its calculation of Adjusted Net Income (Loss) per diluted share. The Company has instead utilized the Weighted Average Shares Used for the Computation of Basic and Diluted earnings (loss) per share as presented on the Consolidated Statements of Operations to calculate Adjusted Net Income (Loss) per diluted share for all periods presented herein.
The Company believes that, because its outstanding share-based compensation grants no longer result in a material amount of dilution of its earnings as was the case nearer to the date of our IPO, the adjustment methodology previously used no longer provides meaningful information to management or other users of its financial statements. This change resulted in an increase of
Investor Contact:
Chief Revenue Officer
(423) 884-7141
George.Steinbarger@mastercraft.com
Source: MasterCraft Boat Holdings, Inc.