Mastercraft Boat (NASDAQ:MCFT) raised its outlook for its six-month transition period after reporting higher sales and earnings in the first quarter, helped by demand for premium boats and a full quarter of contributions from its newly acquired Chaparral and Robalo brands.
Net sales rose 123.4% to $154.1 million in the quarter, including $59.3 million from the Recreation and Sport Fishing segment. The comparable prior-year period did not include the Chaparral and Robalo brands, which joined the company through its acquisition of Marine Products.
On a legacy basis, which excludes the newly acquired brands, sales increased 37.4% to $94.8 million. Chief Financial Officer Scott Kent attributed the gain to higher volumes of next-generation X Series models, favorable product mix, disciplined pricing and lower discounts.
Chief Executive Officer Brad Nelson said the company exceeded its expectations for both sales and adjusted EBITDA. He also said consumers remain cautious and that MasterCraft is monitoring retail trends as it plans production.
Legacy Margins Improve
Consolidated gross margin fell to 21.1% from 22.3% a year earlier, reflecting the combined company’s margin profile after the acquisition. Legacy gross margin, however, increased to 28.3% from 22.3%, helped by higher volumes, favorable mix, lower discounts and operating improvements.
Adjusted net income rose to $12.2 million, or $0.50 per diluted share, from $4.7 million, or $0.29 per share, a year earlier. Adjusted EBITDA increased to $20.1 million from $7 million, while the adjusted EBITDA margin rose to 13% from 10.1%.
Legacy adjusted EBITDA was $16.7 million, with a margin of 17.6%. Nelson said the MasterCraft brand generated $21.8 million in adjusted EBITDA and a 26.7% adjusted EBITDA margin. The Leisure segment’s adjusted EBITDA margin improved by nearly 500 basis points, supported by higher volumes, lower discounts and cost initiatives.
Kent said the ski and wake market remains competitive and discounts are still needed, but he described promotions as more normalized. Cleaner dealer channels and new products, particularly the XStar and X Series, have helped the company keep discounts lower, he said.
Higher Transition-Period Outlook
MasterCraft now expects net sales of $293 million to $297 million, adjusted EBITDA of $32 million to $34 million and adjusted earnings per share of $0.75 to $0.80 for the six-month transition period ending Dec. 31, 2026. The company continues to expect capital expenditures of approximately $9 million.
The transition period follows the company’s change to a Dec. 31 fiscal year-end. The reported quarter covers the first three months of that period and is compared with the three months ended Sept. 28, 2025.
Kent said some production shifted from the December quarter into the first quarter, contributing to the earlier period’s outperformance. He expects underlying build rates and average unit selling prices to remain consistent in the December quarter, though fewer production days around the holidays will likely result in modestly lower sequential shipments.
Nelson said the company’s guidance continues to assume the overall market will decline roughly 5% to 10% for the calendar year. He described the market as selective rather than broken, with buyers still present.
Integration and Dealer Expansion
MasterCraft has captured approximately $6 million in annual public company and overhead savings from the Marine Products transaction, Nelson said. He said dedicated teams are working on sourcing, operations, manufacturing footprint, product portfolio and distribution initiatives, with early sourcing benefits beginning to emerge.
Kent said integration plans were on track or ahead in some areas. Nelson added that some initiatives will take more time and that the company expects to provide updates as visibility improves.
The company added dealers across its brands during the quarter, primarily in North America, including some existing partners taking on additional brands. Nelson said Chaparral and Robalo performed particularly well at retail, and management cited market-share gains for Robalo.
Dealer inventories across established brands were below year-earlier levels, and inventory turns were near pre-COVID levels, Nelson said. He added that the company would continue to align wholesale shipments with retail demand to protect dealer health.
Cash and Buybacks
MasterCraft generated $2.9 million in free cash flow during the quarter and ended the period with $41.9 million in cash and no debt. Including its $75 million revolving credit facility, total liquidity was $116.9 million.
The company resumed share repurchases after pausing them during the acquisition, buying back approximately $4.8 million of stock. About $18.7 million remained under its current authorization at quarter-end.
About Mastercraft Boat (NASDAQ:MCFT)
MasterCraft Boat Holdings, Inc designs, manufactures and sells recreational powerboats. The company serves the premium marine market with boats intended for water sports, cruising, fishing and general leisure use.
Its portfolio has included MasterCraft performance ski and wake boats, Crest pontoon boats and Aviara luxury day boats. MasterCraft boats are known for water-sports features such as wake-shaping systems, while the company’s other brands address broader recreational boating needs, including spacious pontoon and luxury day-boat segments.
Founded in 1968, MasterCraft is headquartered in Vonore, Tennessee, and distributes its products through a network of independent dealers in North America and selected international markets.
