MasterCraft reports 2Q results

Net sales increased 12.2 percent for MasterCraft in the second quarter.
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Net sales increased 12.2 percent for MasterCraft in the second quarter, excluding the terminated Hydra-Sports manufacturing contract, and total net sales rose 4.5 percent to $55.2 million.

Adjusted net income per share increased 57.1 percent to $0.33, and adjusted EBITDA increased 31.3 percent to $10.5 million compared to $8 million for the year prior.

“We continue to deliver outstanding top- and bottom-line increases and unit volume growth,” MasterCraft president and CEO Terry McNew said in a statement. “These gains are driven by continued demand for performance sport boats across all models, in particular overwhelming demand for our X23, growth in our MasterCraft NXT line of entry-level models and our newly released X26. Additionally, our relentless focus on operational excellence and continuous improvement continues to yield notable gross margin and adjusted EBITDA gains.”

MasterCraft-only net sales for the three months that ended Dec. 27, which exclude the terminated Hydra-Sports manufacturing contract, increased $6 million versus the prior year.

The net sales gain was primarily due to a rise in MasterCraft unit volume of 48 units, or 7.4 percent.

Net sales per MasterCraft unit grew by 3.9 percent, chiefly stemming from greater adoption of higher-end option packages, new product launches and price increases.

“Domestically, demand for MasterCraft boats remains solid, and we expect that to continue,” said McNew. “Like most marine manufacturers, international headwinds, particularly in Canada, are partially offsetting U.S. results. However, we expect to maintain our sales momentum as MasterCraft continues to drive sustainable, profitable market share gains.”

Gross profit in the second quarter increased $2.7 million, or 21.3 percent, to $15.4 million, compared to $12.7 million a year earlier.

Gross margin rose to 27.8 percent for the fiscal 2016 second quarter, from 24 percent for the prior-year period. The 380 basis point increase primarily stemmed from cost reductions driven by a culture focused on eliminating waste, sales of higher-end content option packages and new innovative features, and robust value added/value engineering cost reduction programs. In addition, the company replaced its Hydra-Sports volume with higher-margin MasterCraft volume.

Net income for the fiscal 2016 second quarter was $1.9 million, up 26.7 percent from $1.5 million in the year-earlier quarter.

Fiscal 2016 second-quarter adjusted EBITDA was $10.5 million, up 31.3 percent from $8 million for the year-earlier quarter.

Fiscal 2016 second-quarter adjusted net income increased 59 percent to $6.2 million, or $0.33 per share. This compares with $3.9 million, or $0.21 per share a year earlier.

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