MasterCraft Boat Holdings, Inc. Q1 FY2025 earnings call

• Faced economic and industry headwinds but delivered strong first quarter results, reducing dealer inventory more than anticipated.
• Addressed weather impact from hurricanes, with minimal business disruption.
• Retail results exceeded expectations, positive vs. prior year and SSI. Fiscal first quarter is ~30% of retail units.
• Removed nearly 500 units at MasterCraft and Crest, reducing dealer inventories by over 1,000 units in 12 months.
• MasterCraft's Model Year 25 products well received; XStar launch in second half. Crest prioritizing right-sizing inventories; Balise gaining traction.
• Aviara transaction branding component closed; Merritt Island facility sale expected end of fiscal second quarter.

Net sales for fiscal first quarter were $65 million, a 31% decrease from the prior year due to lower volumes and unfavorable model mix. Gross margin was 18.1% vs. 23.8% prior year. The MasterCraft segment saw Model Year 25 products well received, with the XStar launch anticipated in the second half. The Pontoon segment (Crest) had higher than optimal inventories due to interest rate sensitivity, but Balise gained early traction. First quarter historically accounts for ~30% of retail units in segments.

• Raised full year 2025 consolidated net sales guidance to $270 million - $300 million, adjusted EBITDA $17 million - $26 million, adjusted EPS $0.55 - $0.95.
• Fiscal second quarter 2025 expected net sales ~$60 million, adjusted EBITDA ~$1 million, adjusted loss per share ~$0.01.
• Ramped up production in second half to capitalize on boat show and summer seasons.

• Continued monitoring of economic conditions and interest rate environment.
• Cautious optimism due to dynamic market, dealers remain cautious with inventory.
• Minimal disruption from hurricanes, but ongoing weather monitoring.

Q: Retail performance, share gains or underlying demand?

A: Difficult to attribute to share gain yet, but retail held up positively.

Q: Impact of Tommy's Boats deliquidation?

A: Pleasant surprise, retail not overly disrupted, expect Tommy's to reach consumers before boat show season.

Q: Promotional activity impact on retail?

A: Contributing factor, helped dealers clear aged inventory, Model Year 25 product well received.

Q: Inventory reduction details?

A: Sequential reduction of ~500 units, plan to reduce 600-1,000 units across brands, more focused on Crest.

Q: ASPs and price drivers?

A: ASPs affected by mix, MasterCraft net price flat to down, Crest price increase low single digits, XStar launch to boost MasterCraft ASPs.

Q: Boat show season promotion and discounting?

A: Promotional environment expected to continue, will be judicious with rebates, balance with competitive environment.

Q: Gross margin progression?

A: Margins down in Q2 due to mix and lower production, improvement in second half with higher margin products like Balise and XStar.

Q: Capital allocation post Aviara sale?

A: Priorities remain fortress balance sheet, funding organic growth, share repurchases, and selective inorganic activity.

Q: Dealer base health and inventory levels?

A: Dealers healthier as they move non-current inventory, optimistic about future with improving retail picture.