MasterCraft Boat Holdings, Inc. Reports Record Results for Fiscal 2023 First Quarter
Highlights:
Unless otherwise indicated, the highlights and commentary provided herein relate to our continuing operations, which excludes our NauticStar segment. Results for NauticStar are reported as discontinued operations.
- Eighth consecutive period-over-period record-setting quarter for both net sales and earnings
- Record net sales for the first quarter increased to
$169.5 million , up 29.7% from the prior-year period - Record net income from continuing operations was
$24.6 million , or$1.37 per diluted share - Record Diluted Adjusted Net Income per share, a non-GAAP measure, was
$1.43 , up 90.7% - Record Adjusted EBITDA, a non-GAAP measure, increased to
$35.9 million , up 72.8% - Share repurchases of
$4.2 million during the quarter - Completed the sale of our NauticStar business, resulting in a non-cash pretax loss on sale of
$22.1 million
Brightbill continued, “We delivered an eighth consecutive period-over-period record-setting quarter, Net sales were higher by nearly 30 percent, Adjusted EBITDA grew by nearly 73 percent, Adjusted EBITDA margin increased 530 basis points, and Adjusted Net Income per share grew by more than 90 percent year-over-year. These results would not have been possible without the hard work and dedication of our team who continue to execute against our strategic priorities.”
First Quarter Results
Unless otherwise indicated, the financial results provided herein relate to our continuing operations, which excludes our NauticStar segment. Results for NauticStar are reported as discontinued operations.
For the first quarter of fiscal 2023,
Gross profit increased
Operating expenses decreased
Net income from continuing operations was
Including discontinued operations, net income was
Adjusted Net Income increased to
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, “Looking forward, we are raising our guidance for the full year based on our strong performance. We will continue to monitor the strength of retail demand and adjust our production plans as appropriate to maintain healthy dealer inventories. Our guidance range reflects the potential for a range of retail demand scenarios.”
The Company’s outlook is as follows:
- For full year fiscal 2023, consolidated net sales are now expected to be between
$590 million and$625 million , with Adjusted EBITDA between$108 million and$118 million , and Adjusted Earnings per share of between$4.20 and$4.60 . We continue to expect capital expenditures to be approximately$30 million for the full year. - For the second quarter of fiscal 2023, consolidated net sales are expected to be approximately
$150 million , with Adjusted EBITDA of approximately$26 million , and Adjusted Earnings per share of approximately$1.00 .
Conference Call and Webcast Information
About
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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; and our intention to drive value and accelerate growth.
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 supply chain disruptions and production inefficiencies, general economic conditions, demand for our products, inflation, 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 fixed cost base, the successful introduction of our new products, and geopolitical conflicts. These and other important factors discussed under the caption “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended
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 Ended
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share data)
| Three Months Ended | ||||||||
| 2022 | 2021 | |||||||
| Net sales | $ | 169,516 | $ | 130,650 | ||||
| Cost of sales | 123,543 | 100,068 | ||||||
| Gross profit | 45,973 | 30,582 | ||||||
| Operating expenses: | ||||||||
| Selling and marketing | 3,779 | 3,893 | ||||||
| General and administrative | 9,483 | 8,720 | ||||||
| Amortization of other intangible assets | 489 | 489 | ||||||
| — | 1,100 | |||||||
| Total operating expenses | 13,751 | 14,202 | ||||||
| Operating income | 32,222 | 16,380 | ||||||
| Other income (expense): | ||||||||
| Interest expense | (562 | ) | (382 | ) | ||||
| Interest income | 151 | — | ||||||
| Income before income tax expense | 31,811 | 15,998 | ||||||
| Income tax expense | 7,176 | 3,766 | ||||||
| Net income from continuing operations | 24,635 | 12,232 | ||||||
| Loss from discontinued operations, net of tax | (20,567 | ) | (1,846 | ) | ||||
| Net income | $ | 4,068 | $ | 10,386 | ||||
| Net income (loss) per share | ||||||||
| Basic | ||||||||
| Continuing operations | $ | 1.38 | $ | 0.65 | ||||
| Discontinued operations | (1.15 | ) | (0.10 | ) | ||||
| Net income | $ | 0.23 | $ | 0.55 | ||||
| Diluted | ||||||||
| Continuing operations | $ | 1.37 | $ | 0.65 | ||||
| Discontinued operations | (1.14 | ) | (0.10 | ) | ||||
| Net income | $ | 0.23 | $ | 0.55 | ||||
| Weighted average shares used for computation of: | ||||||||
| Basic earnings per share | 17,946,061 | 18,850,301 | ||||||
| Diluted earnings per share | 18,031,725 | 19,004,119 | ||||||
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except per share data)
| 2022 | 2022 | |||||||
| ASSETS | ||||||||
| CURRENT ASSETS: | ||||||||
| Cash and cash equivalents | $ | 40,829 | $ | 34,203 | ||||
| Accounts receivable, net of allowances of |
18,615 | 22,472 | ||||||
| Income tax receivable | 1,014 | — | ||||||
| Inventories, net | 68,790 | 58,595 | ||||||
| Prepaid expenses and other current assets | 5,946 | 7,232 | ||||||
| Current assets associated with discontinued operations | — | 23,608 | ||||||
| Total current assets | 135,194 | 146,110 | ||||||
| Property, plant and equipment, net | 59,676 | 55,823 | ||||||
| 28,493 | 28,493 | |||||||
| Other intangible assets, net | 36,929 | 37,418 | ||||||
| Deferred income taxes | 19,109 | 21,525 | ||||||
| Deferred debt issuance costs, net | 380 | 406 | ||||||
| Other long-term assets | 1,956 | 1,290 | ||||||
| Non-current assets associated with discontinued operations | — | 5,987 | ||||||
| Total assets | $ | 281,737 | $ | 297,052 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| CURRENT LIABILITIES: | ||||||||
| Accounts payable | $ | 23,936 | $ | 23,375 | ||||
| Income tax payable | 488 | 4,600 | ||||||
| Accrued expenses and other current liabilities | 50,674 | 54,437 | ||||||
| Current portion of long-term debt, net of unamortized debt issuance costs | 3,250 | 2,873 | ||||||
| Current liabilities associated with discontinued operations | — | 7,887 | ||||||
| Total current liabilities | 78,348 | 93,172 | ||||||
| Long-term debt, net of unamortized debt issuance costs | 52,582 | 53,676 | ||||||
| Unrecognized tax positions | 5,540 | 6,358 | ||||||
| Operating lease liabilities | 1,079 | 198 | ||||||
| Total liabilities | 137,549 | 153,404 | ||||||
| COMMITMENTS AND CONTINGENCIES | ||||||||
| STOCKHOLDERS' EQUITY: | ||||||||
| Common stock, |
180 | 181 | ||||||
| Additional paid-in capital | 93,057 | 96,584 | ||||||
| Retained earnings / (accumulated deficit) | 50,951 | 46,883 | ||||||
| Total stockholders' equity | 144,188 | 143,648 | ||||||
| Total liabilities and stockholders' equity | $ | 281,737 | $ | 297,052 | ||||
Supplemental Operating Data
The following table presents certain supplemental operating data for the periods indicated:
| Three Months Ended | |||||||||||||
| 2022 | 2021 | Change | |||||||||||
| (Dollars in thousands) | |||||||||||||
| Unit sales volume: | |||||||||||||
| MasterCraft | 781 | 783 | (0.3 | ) | % | ||||||||
| Crest | 846 | 716 | 18.2 | % | |||||||||
| Aviara | 32 | 19 | 68.4 | % | |||||||||
| Consolidated | 1,659 | 1,518 | 9.3 | % | |||||||||
| MasterCraft | $ | 113,020 | $ | 92,015 | 22.8 | % | |||||||
| Crest | 43,561 | 32,780 | 32.9 | % | |||||||||
| Aviara | 12,935 | 5,855 | 120.9 | % | |||||||||
| Consolidated | $ | 169,516 | $ | 130,650 | 29.7 | % | |||||||
| Net sales per unit: | |||||||||||||
| MasterCraft | $ | 145 | $ | 118 | 22.9 | % | |||||||
| Crest | 51 | 46 | 10.9 | % | |||||||||
| Aviara | 404 | 308 | 31.2 | % | |||||||||
| Consolidated | 102 | 86 | 18.6 | % | |||||||||
| Gross margin | 27.1 | % | 23.4 | % | 370 bps | ||||||||
Non-GAAP Measures
EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin
We define EBITDA as net income from continuing operations, before interest, 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 share-based compensation and goodwill impairment. We define Adjusted EBITDA margin as Adjusted EBITDA expressed as a percentage of Net sales.
Adjusted Net Income and Adjusted Net Income per share
We define Adjusted Net Income and Adjusted Net Income per share as net income from continuing operations, 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 reflecting income tax expense on adjusted net income before income taxes at our estimated annual effective tax rate. For the periods presented herein, these adjustments include other intangible asset amortization, share-based compensation, and goodwill impairment.
EBITDA, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Income, and Adjusted Net Income 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 the Non-GAAP Measures do not reflect any cash requirements for such replacements;
- The Non-GAAP Measures do not reflect our cash expenditures, or future requirements for capital expenditures or contractual commitments;
- The Non-GAAP Measures do not reflect changes in, or cash requirements for, our working capital needs;
- The Non-GAAP Measures do not reflect our tax expense or any cash requirements to pay income taxes;
- The Non-GAAP Measures do not reflect interest expense, or the cash requirements necessary to service interest payments on our indebtedness; and
- The Non-GAAP Measures 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.
Beginning in the first quarter of fiscal 2023, due to the effects of discontinued operations, as discussed above, the Company's non-GAAP financial measures are presented on a continuing operations basis, for all periods presented.
We do not provide forward-looking guidance for certain financial measures on a
The following table presents a reconciliation of net income from continuing operations as determined in accordance with
| Three Months Ended | ||||||||||||||
| % of Net | % of Net | |||||||||||||
| 2022 | sales | 2021 | sales | |||||||||||
| (Dollars in thousands) | ||||||||||||||
| Net income from continuing operations | $ | 24,635 | 14.5 | % | $ | 12,232 | 9.4 | % | ||||||
| Income tax expense | 7,176 | 3,766 | ||||||||||||
| Interest expense | 562 | 382 | ||||||||||||
| Interest income | (151 | ) | — | |||||||||||
| Depreciation and amortization | 2,601 | 2,459 | ||||||||||||
| EBITDA | 34,823 | 20.5 | % | 18,839 | 14.4 | % | ||||||||
| Share-based compensation | 1,120 | 862 | ||||||||||||
| — | 1,100 | |||||||||||||
| Adjusted EBITDA | $ | 35,943 | 21.2 | % | $ | 20,801 | 15.9 | % | ||||||
(a) Represents a non-cash charge of
The following table sets forth a reconciliation of net income from continuing operations as determined in accordance with
| Three Months Ended | |||||||
| 2022 | 2021 | ||||||
| (Dollars in thousands, except per share data) | |||||||
| Net income from continuing operations | $ | 24,635 | $ | 12,232 | |||
| Income tax expense | 7,176 | 3,766 | |||||
| Amortization of acquisition intangibles | 462 | 462 | |||||
| Share-based compensation | 1,120 | 862 | |||||
| — | 1,100 | ||||||
| Adjusted Net Income before income taxes | 33,393 | 18,422 | |||||
| Adjusted income tax expense(b) | 7,680 | 4,237 | |||||
| Adjusted Net Income | $ | 25,713 | $ | 14,185 | |||
| Adjusted net income per common share | |||||||
| Basic | $ | 1.43 | $ | 0.75 | |||
| Diluted | $ | 1.43 | $ | 0.75 | |||
| Weighted average shares used for the computation of (c): | |||||||
| Basic Adjusted net income per share | 17,946,061 | 18,850,301 | |||||
| Diluted Adjusted net income per share | 18,031,725 | 19,004,119 | |||||
(a) Represents a non-cash charge of
(b) Reflects income tax expense at an income tax rate of 23.0% for each period presented.
(c) Represents the Weighted Average Shares used for the computation of Basic and Diluted earnings 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 from continuing operations per diluted share to Adjusted Net Income per diluted share for the periods presented:
| Three Months Ended | |||||||
| 2022 | 2021 | ||||||
| Net income from continuing operations per diluted share | $ | 1.37 | $ | 0.65 | |||
| Impact of adjustments: | |||||||
| Income tax expense | 0.40 | 0.20 | |||||
| Amortization of acquisition intangibles | 0.03 | 0.02 | |||||
| Share-based compensation | 0.06 | 0.05 | |||||
| — | 0.06 | ||||||
| Adjusted Net Income per diluted share before income taxes | 1.86 | 0.98 | |||||
| Impact of adjusted income tax expense on net income per diluted share before income taxes(b) | (0.43 | ) | (0.23 | ) | |||
| Adjusted Net Income per diluted share | $ | 1.43 | $ | 0.75 | |||
(a) Represents a non-cash charge of
(b) Reflects income tax expense at an income tax rate of 23.0% for each period presented.
Investor Contact:
Chief Revenue Officer
Email: investorrelations@mastercraft.com
Source: MasterCraft Boat Holdings, Inc.