MasterCraft’s new day boat line Aviara will debut at the Miami International Boat Show with the AV32, and MarineMax will take on the new brand.
“There may be additional dealers in the future but for the foreseeable future, MarineMax will be our Aviara dealer,” MasterCraft CEO Terry McNew told Trade Only Today Thursday evening after announcing the move on a conference call to discuss second-quarter results.
MarineMax has 63 stores in Alabama, Connecticut, Florida, Georgia, Maryland, Massachusetts, Minnesota, Missouri, New Jersey, New York, North Carolina, Ohio, Oklahoma, Rhode Island, South Carolina and Texas
One analyst on the call said the MarineMax “win is a major endorsement of that line.”
“Tim [Oxley, MasterCraft CFO) and I were at Brunswick for years, we’ve got a long relationship with them … and they are best dealer to represent this. And as I mentioned, it fills a white space in their portfolio” since Sea Ray stopped selling yachts and sport yachts.
Aviara will introduce two more models at the Fort Lauderdale International Boat Show, said McNew.
The company also is implementing the strategic decision NauticStar to larger product.
“Over time they will have the capability to build product up to 39 feet,” said McNew. “However, there will be several new products before we get to the size.”
The brand will release another new model later this fiscal year.
MasterCraft Boat Holdings Inc. reported that net sales for the second quarter increased to $121.5 million, up 55.0 percent from $78.4 million in the prior-year period.
The company’s acquisition of Crest, which closed in October, has exceeded expectations, with Crest delivering net sales and profitability levels ahead of estimates.
Second quarter gross profit rose to $27.1 million, up 35.8 percent from $19.9 million in the prior-year period.
Net income totaled $10.2 million for the fiscal 2019 second quarter, a gain of $2.2 million, or 27.2 percent, from the prior-year period.
Diluted earnings-per-share increased in the fiscal 2019 second quarter by $0.11, up 25.6 percent, to $0.54, from the prior-year period.
Adjusted EBITDA, a non-GAAP measure, grew 35.6 percent to $18.6 million from $13.7 million in the prior-year period.
Fully diluted Adjusted Net Income per share, a non-GAAP measure, grew $0.20 in the second quarter of fiscal 2019, a 45.5 percent increase, to $0.64, up from $0.44 in the prior-year period.
“We’ve been able to execute at a high level while integrating Crest into our organization, implementing significant product development and manufacturing changes at NauticStar, and finalizing preparations for the launch of our exciting new brand, Aviara, while driving adjusted earnings per share growth of 45.5 percent year-over-year,” said McNew in a statement.
“We continue to see strong retail and wholesale momentum in our core MasterCraft brand, and are starting to see the benefits of the manufacturing changes implemented at NauticStar, which are reflected in the 430 basis point gross margin improvement at the brand versus our fiscal first quarter,” he said.
Non-GAAP earnings-per-share of $0.64 beat expectations by $0.05; GAAP earnings-per-share of $0.54 missed expectations by $0.02.
Tariffs have been the largest headwind for the company.
“Regarding import tariffs, we have been providing full tariff discount support for our MasterCraft Canadian dealers and partial tariff support for our European dealers,” McNew told Trade Only.
The company sees the strategic decision to help offset the tariff for European and Canadian dealers as a competitive advantage.
“Neither Crest nor NauticStar have many Canadian or international dealers so import tariffs are insignificant and we aren’t providing any tariff discounts to their Canadian or European dealers,” said McNew. “Tariff costs associated with input costs to manufacturing is low for MasterCraft and has been higher for Crest as aluminum cost rose quite a bit earlier in the year but have slowed recently.”
“With the official launch of our Aviara brand at the 2019 Miami Boat Show in February, we will now have brands focused on four of the fastest growing segments of the overall powerboat industry – performance sport boats, outboard saltwater fishing boats, pontoon boats and luxury day boats,” McNew said in the statement.