MasterCraft Boat Holdings said that a number of reactive factors to the covid-19 pandemic, including slowed production in early March and suspended production at the end of the month, had a negative impact on third quarter earnings.
MasterCraft Boat Holdings reported net sales of $102.6 million, a decrease of $25.8 million, or 20.1 percent, compared to the prior-year period.
“With the onset of the covid-19 pandemic, all of us have been forced to adapt to new challenges that have impacted our families, our work and our day-to-day lives. … We have a strong foundation, a resilient business model and a long-term plan to drive value and grow our market share, and I am confident that MasterCraft will come out of this situation stronger than ever,”CEO Fred Brightbill said in a statement.
Brightbill cited a strong start to the quarter and low inventory levels across its brands — MasterCraft, NauticStar, Crest and Aviara — which had put the company in an optimal position for the rest of the year until the virus forced a change in strategy.
“We believe that the resilient retail results experienced across all our brands since early March is a clear indicator that we have the right strategy in place to deliver growth and value creation over the long term,” Brightbill said.
Slowed production, and plant and dealership closures had a significant impact on gross profit, as well.
For the third quarter, gross profit declined 32.2 percent to $21.3 million, compared to $31.4 million for the prior-year period. MasterCraft said $1.5 million of compensation and employee benefit costs are directly related to its temporary shutdown. Higher sales discounts also contributed to the decrease in gross profit.
MasterCraft has withdrawn its fiscal 2020 guidance, given the economic uncertainty and continued impact of the pandemic. It plans to provide sales and earnings guidance “when visibility to accurately estimate its future results improves.”
However, Brightbill anticipates the company has made the right moves in dealing with the pandemic.
“While covid-19 presented many challenges for MasterCraft in the third quarter, we believe that we have implemented a plan to manage through the near-term headwinds and position the company for success as the economy begins to re-open,” he said. “We firmly believe the steps we have taken during the pandemic … will position MasterCraft for success throughout the transition and beyond.”