MCFT earnings call transcript, November 10, 2026

Ladies and gentlemen, thank you for standing by and welcome to the MasterCraft Boat Hall. Holdings Inc. First Quarter 2026 Transition Period Earnings Conference Call. Please be advised that today's call.

Thank you operator and welcome everyone. Thank you.

Thank you for joining us today as we discuss the first quarter transition period performance of Mastercraft boat holdings. As a reminder, today's call is being webcast live and will also be archived on our website for one year for future listening. With me on this morning's call is Brad Nelson, Chief Executive Officer, and Scott Kent, Chief Financial Officer. Brad will begin with an overview of our operational performance. After that, Scott will discuss our financial performance.

Brad will then offer some closing remarks before we open the call for questions. Before we begin, we would like to remind participants that the information contained in this call is current only as of today, November 10, 2026. The company assumes no obligation to update any statements, including forward-looking statements. Statements that are not historical facts are forward-looking statements and subject to the safe harbor disclaimer in today's press release. Additionally, on this call, we will discuss non-GAAP measures that include or exclude items not indicative of our ongoing operations. For each non-GAAP measure, we will also provide the most directly comparable GAAP measure in today's press release, which includes a reconciliation of these non-GAAP measures to our GAAP results. Beginning this quarter, certain corporate costs that were previously reported within our performance and wake segment are now being reported separately. This change better reflects how we manage the combined company, affecting segment presentation only, and has no impact on our consolidated results. Prior period segment results have also been re- cast for comparability. Also, as a reminder, in connection with our change to a December 31 fiscal year end, today's results cover the first three months of our six-month transition period, which runs from July 1- through December 31, 2026. We will compare these results to the prior year period, which includes the three months ended September 28, 2025. Because this quarter includes a full quarter of contributions,

and the prior year period includes no contribution from these brands, we will speak to our results on both a total company basis and a legacy basis. With legacy representing our performance and wake segment. including corporate costs and our leisure segment. Unless otherwise noted, the following commentary is made on a continuing operations basis and all references to specific quarters and periods will be on a physical basis. With that, I will turn the call over to Brad.

Thank you, Alec, and good morning, everyone. We delivered results above our expectations in the first quarter of the transition period. In our first full quarter, operating as a complete fine company following the acquisition of marine products, we exceeded expectations for both net sales and adjusted EBITDA, with strong legacy execution complemented by the first full quarter contribution. from Chaparral and Robolo. Total company net sales grew more than 120% year over year. Importantly, our legacy business net sales grew 37% and delivered adjusted EBITDA growth. of nearly 140%. We are pleased with our performance this quarter. These results reflect the deliberate product, commercial, and operational actions we have taken across our business to drive premium mix, clean channels, and reduce costs. These efforts are foundational and continue to build on the momentum we have delivered over the past several quarters. Dealer health remains strong and continues to be a priority for MCBH. Dealer inventories across our established brands are healthy and below prior year levels, with inventory turns better than last year and near pre-COVID levels as we exit the quarter. Because of this, we believe our dealers have more flexibility to respond to market demand while we remain disciplined in aligning wholesale shipments with retail demand. Now turning to retail. On a calendar year-to-date basis, total

Good morning, everyone. I'll start by reviewing our results for the first quarter, then cover our balance sheet and capital allocation, and finish with our outlook for the remainder of the transition period. Net sales for the quarter were $154.1 million, an increase of 123.4%. compared to the prior year period, including $59.3 million from our recreation and sport fishing segment. On a legacy basis, net sales were $94.8 million, an increase of 37.4% compared to $69 million in the prior year period, driven by higher volumes of our next year. Next-generation X-Series models, which drove favorable mix, along with disciplined pricing and lower discounts. Consolidated gross margin was 21.1% compared to 22.3% in the prior year period, reflecting the blended margin. Margin profile following the marine products acquisition. Legacy gross margins expanded 600 basis points to 28.3% from 22.3% in the prior year period. Driven by improved fixed cost absorption, favorable mix, lower discounts, and operating improvements across both our performance and wake and leisure segments. Operating expenses were $20.5 million compared to $11.6 million in the prior year period. The increase primarily reflects a full quarter of recreation and sport fishing as well. as additional acquisition and integration costs related to the marine products transaction. Adjusted end income was $12.2 million or $0.50 per diluted share compared to $4.7 million or $0.29 per diluted share in the prior year period.

Brad for closing remarks.

Thanks, Scott.

This quarter reinforces three important drivers of our long term earnings potential. First, commercial and operational execution across our business is translating into higher earnings. Second, our expanded brand portfolio and growing dealer network are creating new opportunities for growth across categories and end markets. And third, the investments we are making to capture synergies and leverage the scale and capabilities of the combined company provide meaningful opportunities that we believe will drive further value creation. Looking ahead, our priorities remain clear. We will continue to align wholesale with retail demand, drive operational improvements and invest in product innovation that supports the long term competitive strength of our brands. We are moving decisively from synergy planning to execution. Our focus is on preserving what makes each of our brands unique and successful. While unlocking opportunities created by the scale and capabilities of the combined company. With a strong balance sheet, a flexible operating model, and five leading brands, we are confident in our ability to execute through the current environment while building an even stronger company.

for the long term. I want to thank our team members, dealer partners, suppliers, and shareholders for their continued support and another strong quarter. Operator, you may now open the line for questions.

We will now begin the question and answer session. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. We ask that you pick up your handset when asking. The question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster.

Thanks.

Hey, guys.

Good morning.

First question on the guidance. You obviously raised the transition period guidance, but it seems like the September quarter was better than you originally thought, and the December quarter may be a tad lighter than you originally thought. Are there any timing issues in the quarter? Are you seeing any margin pressures cropping up here in the December quarter?

Yeah, Joe, I think we really outperformed a little bit in the first quarter, and some of that was timing, so we did shift a bit of our production. from Q2 into Q1 or just shift a few bit a little early. And you know, so that's that's a lot of it. You know, remember December the December quarter does have some extra some less production days in it because the normal holiday. Seasonality. So it is a little lower from a quarter sequential basis, but the underlying build rates and really the AUSPs and all that are consistent with Q1. So it's just a matter of some timing fluctuations between costs as well as build rates between the quarters. Okay, perfect. And you sort of address this a little bit in your prepared remarks, but how would you assess the promotional environment in the ski weight category at this point?

Generally, I think we're, you know, it's still a competitive environment out there. We're still having to do discounts. We think they're pretty much more normalized to some degree. You know, there is a clean channels out there from our perspective, and that does help us to keep our discounts low. Our new products that we've been introducing, especially around the X-Star and the X-Series product line, have also helped us not have to do a lot of discounting. So a lot of the actions we've been taking really over the last two years are really helping. Let's keep those discounts a little lower than what you might have to do if our channels were a little more unhealthy. Are you being forced at all to sort of counter other manufacturers' discounts?

Again, discounts are probably a little higher, but not anything beyond what we'd call normal. We're generally doing our discounts in the normal times we do discounts. So, again, we think our position with our dealer health as well as our channel and product are really helping us keep our discounts a little lower. Okay, great. Thank you.

Your next question comes from

Anna Glaskin with B Riley Securities. Please go ahead. Hi, good morning. Thanks for taking my questions. I'd like to start with that gross margin number you gave us on the legacy business 28.3%. Pretty impressive. Considering, you know, the historical performance, a number we haven't seen in, you know, quite some years. Maybe give us some perspective on how this was achieved despite, you know, still at a lower production rate than historical norms and to what extent there was maybe anything one-timey in there. Thanks.

Your next question comes from Gregory Miller with Truist Securities. Please go ahead.

Your next question comes from Noah Zatzkin with KeyBank Capital Markets. Please go ahead.

Your next question comes from Garrick Johnson.

There are no further questions at this time.

Thank you for attending.

You may now disconnect.