Industry ‘Right-sizing’ Continues

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MasterCraft

MasterCraft Boat Holdings today reported an 18.0 percent decrease in sales for its fiscal 2020 second quarter ended December 29, 2019. Sales dropped to $99.6 million from $121.5 million a year ago. Net income dropped to $6.9 million, down 32 percent for the quarter.

CEO Fred Brightbill said the results were “slightly ahead” of expectations for its fiscal second quarter as it continued to “make progress across a number of our operational focus areas, including efficiently managing our production around the GM strike, further right-sizing our dealer inventory, executing operational excellence initiatives and advancing the start-up of our new Aviara brand.”

Unit sales were off because of the “weather-impacted summer selling season” and continuing softness in the saltwater category, said the statement.

Brightbill said wholesale production decreases and retail rebates resulted in “dealer pipeline right-sizing” that is part of its plan. “We believe the actions we are taking, coupled with our diverse portfolio of brands and commitment to delivering differentiated, best in class products and experiences for our customers, position us well in the current environment and set us up for renewed growth in fiscal 2021,” he said.

MasterCraft has initiated a new strategic growth plan that focuses on improving the customer experience, expanding brand awareness and “developing a customer-focused culture, all at minimal incremental cost to the company,” said Brightbill.

The company’s second Aviara model, the AV36, was launched and began selling during the second quarter. During the quarter, the company paid down $8.3 million in long-term debt, including $6.0 million of voluntary prepayments.

Early boat show results and sales of its new Aviara models show promising results, but Brightbill said that “visibility will remain limited” until it is farther into the retail selling season.

For its fiscal 2020 results, MasterCraft Boat Holdings is predicting net sales to be down by a low-single digit percent, EBITDA margins to be down 50 to 100 basis points, and adjusted earnings per share to be down by a high single-digit percent. 

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