MasterCraft Boat Holdings Inc
For the period ended Dec 29, 2024. Filed Feb 6, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Dec 29, 2024 · Filed Feb 6, 2025
MCFT$20.36-2.0%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-29; filed 2024-11-07.
0000950170-24-122549
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-12-29; filed 2025-02-06.
0000950170-25-015130
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 65 previous paragraphs and 62 current paragraphs.
39 unchanged; 21 reworded; 2 added; 5 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 7 previous and 7 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (2)
Current report
As a result of economic and industry headwinds at the end of our key selling season, we adjusted our production levels at the outset of fiscal 2025 to allow for improvements in overall dealer inventory levels. These lower production levels resulted in decreased net sales and reduced gross margins compared to our fiscal 2024 results due to lower fixed cost absorption. As we navigate these headwinds facing our business, we remain committed to aligning our production levels with market demand while also maintaining operational flexibility.
Current report
Cash and cash equivalents totaled $34.3 million as of December 29, 2024, an increase of $26.9 million from $7.4 million as of June 30, 2024. The increase includes $26.1 million in net proceeds from the Aviara Facility Sale. Refer to Note 3 — Discontinued Operations in the Notes to the unaudited condensed consolidated financial statements for further details. Available-for-sale securities totaled $28.5 million as of December 29, 2024, a decrease of $50.3 million from $78.8 million as of June 30, 2024. Proceeds from Available-for-sale securities were used to repay outstanding amounts under the Revolving Credit Facility. Refer to Note 4 — Short-term investments in the Notes to the unaudited condensed consolidated financial statements for further details. Total debt as of June 30, 2024, was $49.3 million, with no amounts outstanding as of December 29, 2024.
Removed paragraphs (5)
Previous report
On August 8, 2024, the Company announced that it had entered into the Aviara Asset Purchase Agreement, pursuant to which it will transfer rights to the Aviara brand of luxury dayboats and certain related assets to a subsidiary of MarineMax. Subsequent to our fiscal first quarter, the transaction was completed and remains subject to customary closing conditions. As discussed in Note 1, the Company has reported the results of operations for its Aviara segment as discontinued operations in the unaudited condensed consolidated statement of operations.
Previous report
Additionally, on September 12, 2024, we announced that we had entered into the Aviara Facility Sale Agreement. The transaction is expected to be completed in our fiscal second quarter and remains subject to customary closing conditions. As discussed in Note 1, the related assets and liabilities are classified as held-for-sale in our unaudited condensed consolidated balance sheets.
Previous report
Amid market volatility and challenging macroeconomic conditions, retail demand remained soft throughout the key selling season. In response, the Company implemented a wholesale strategy for the start of the fiscal 2025 that prioritized rebalancing of dealer inventory levels. This approach, while necessary, led to decreased net sales and reduced gross margins due to fixed cost absorption on the lower production levels.
Previous report
Operating expenses decreased $1.1 million during the first quarter of fiscal 2025 when compared to the same prior-year period. The decrease in operating expenses was a result of lower share-based compensation costs and lower professional fees.
Previous report
Cash and cash equivalents totaled $14.2 million as of September 29, 2024, an increase of $6.8 million from $7.4 million as of June 30, 2024. Held-to-maturity securities totaled $68.6 million as of September 29, 2024, a decrease of $10.3 million from $78.9 million as of June 30, 2024. Total debt as of September 29, 2024 and June 30, 2024, was $49.5 million and $49.3 million, respectively.
Reworded paragraphs (21)
Previous wording
The Company's results for all periods presented, as discussed in Management's Discussion and Analysis, are presented on a continuing operations basis. Results related to our Aviara and NauticStar reporting units are reported as discontinued operations for all periods presented. See Note 3 in Notes to unaudited condensed consolidated financial statements for more information on discontinued operations.
Current wording
On October 18, 2024, the Company completed the Aviara Transaction. Further, on December 23, 2024, the Company completed the Aviara Facility Sale. The Company's results for all periods presented, as discussed in Management's Discussion and Analysis, are presented on a continuing operations basis. Results related to our Aviara and NauticStar reporting units are reported as discontinued operations for all periods presented. See Notes 1 and 3 in Notes to the unaudited condensed consolidated financial statements for more information on discontinued operations.
Previous wording
The table below presents our consolidated results of operations for the three months ended:
Current wording
The table below presents our consolidated results of operations for the three and six months ended:
Previous wording
Net sales decreased $28.9 million during the first quarter of fiscal 2025 when compared with the same prior-year period. The decrease in net sales was primarily driven by lower unit volumes and unfavorable model mix.
Current wording
Net sales decreased $26.4 million and $55.3 million during the second quarter and first half of fiscal 2025, respectively, when compared with the same prior-year period. The decrease in net sales was primarily driven by planned lower unit volumes and unfavorable model mix.
Previous wording
Gross margin percentage declined 570 basis points during the first quarter of fiscal 2025 when compared with the same prior-year period. Lower margins were the result of lower cost absorption due to decreased production volume and higher dealer incentives as a percentage of net sales. Dealer incentives include measures taken by the Company to assist dealers as the retail environment remains competitive.
Current wording
Gross margin percentage declined 610 and 600 basis points during the second quarter and first half of fiscal 2025, respectively, when compared with the same prior-year period. Lower margins were the result of unfavorable model mix and lower cost absorption due to decreased production volume.
Previous wording
The following table sets forth MasterCraft segment results for the three months ended:
Current wording
The following table sets forth MasterCraft segment results for the three and six months ended:
Previous wording
Net sales decreased $20.3 million during the first quarter of fiscal 2025 when compared with the same prior-year period. The decrease was driven by lower unit volume and unfavorable model mix.
Current wording
Net sales decreased $17.6 million and $37.9 million during the second quarter and first half of fiscal 2025, respectively, when compared with the same prior-year period. The decrease was driven by lower unit volume and unfavorable model mix.
Previous wording
Operating income decreased $6.6 million during first quarter of fiscal 2025 when compared with the same prior-year period. The change was primarily the result of decreased net sales, as discussed above.
Current wording
Operating income decreased $6.9 million and $13.5 million during second quarter and first half of fiscal 2025, respectively, when compared with the same prior-year period. The change was primarily the result of decreased net sales, as discussed above.
Previous wording
The following table sets forth Pontoon segment results for the three months ended:
Current wording
The following table sets forth Pontoon segment results for the three and six months ended:
Previous wording
Net sales decreased $8.6 million during the first quarter of fiscal 2025 when compared to the same prior-year period, mainly due to lower unit volumes and increased dealer incentives.
Current wording
Net sales decreased $8.8 million and $17.4 million during the second quarter and first half of fiscal 2025, respectively, when compared to the same prior-year period, mainly due to lower unit volumes and increased dealer incentives.
Previous wording
Operating loss for the first quarter of fiscal 2025 was $2.7 million compared to operating income of $0.3 million in the same prior-year period. The change was primarily the result of decreased net sales, as discussed above.
Current wording
Operating loss for the second quarter and first half of fiscal 2025 was $3.2 million and $5.9 million, respectively, compared to operating income of $0.5 million and $0.7 million in the same prior year periods, respectively. The change was primarily the result of decreased net sales, as discussed above.
Previous wording
Our primary liquidity and capital resource needs are to finance working capital, fund capital expenditures, service our debt, fund potential acquisitions, and fund our share repurchase program. Our principal sources of liquidity are our cash balance, held-to-maturity securities, cash generated from operating activities, our revolving credit agreement and the refinancing and/or new issuance of long-term debt. We believe our cash balance, held-to-maturity securities, cash from operations, and our ability to borrow will be sufficient to provide for our liquidity and capital resource needs.
Current wording
Our primary liquidity and capital resource needs are to finance working capital, fund capital expenditures, service our debt, fund potential acquisitions, and fund our share repurchase program. Our principal sources of liquidity are our cash balance, available-for-sale securities, cash generated from operating activities, our revolving credit agreement and the refinancing and/or new issuance of long-term debt. We believe our cash balance, available-for-sale securities, cash from operations, and our ability to borrow will be sufficient to provide for our liquidity and capital resource needs.
Previous wording
As of September 29, 2024, we had $49.5 million outstanding under the Revolving Credit Facility, leaving $50.5 million of available borrowing capacity. Refer to Note 9 — Long Term Debt in the Notes to unaudited condensed consolidated financial statements for further details.
Current wording
As of December 29, 2024, we had no amounts outstanding under the Revolving Credit Facility, leaving $100.0 million of available borrowing capacity. Refer to Note 9 — Long-Term Debt in the Notes to unaudited condensed consolidated financial statements for further details.
Previous wording
During the three months ended September 29, 2024, the Company repurchased 183,629 shares of common stock for $3.5 million in cash, excluding related fees and expenses under both plans.
Current wording
During the six months ended December 29, 2024, the Company repurchased 223,222 shares of common stock for $4.2 million in cash, excluding related fees and expenses under both plans.
Previous wording
Three Months Ended September 29, 2024 Cash Flows from Continuing Operations
Current wording
Six Months Ended December 29, 2024 Cash Flows from Continuing Operations
Previous wording
Net cash used in operating activities for the three months ended September 29, 2024 was $0.5 million, primarily due to working capital usage, partially offset by net income. Working capital is defined as accounts receivable, income tax receivable, inventories, and prepaid expenses and other current assets net of accounts payable, income tax payable, and accrued expenses and other current liabilities as presented in the condensed consolidated balance sheets. Working capital usage primarily consisted of a decrease in accrued expenses and other current liabilities and an increase in accounts receivable. Partially offsetting the working capital usage was an increase in accounts payables and a decrease in prepaid expenses and other current assets. Accrued expenses and other current liabilities decreased due to payment of dealer incentives and variable compensation. Accounts receivable increased due to timing of sales and collections at the end of the period compared to the end of the prior-year period. Accounts payables increased due to increased production compared to the prior-year period. Prepaid and other current assets decreased due to amortization of insurance premiums.
Current wording
Net cash provided by operating activities for the six months ended December 29, 2024 was $13.4 million, primarily due to net income and favorable changes to working capital. Working capital is defined as accounts receivable, income tax receivable, inventories, and prepaid expenses and other current assets net of accounts payable, income tax payable, and accrued expenses and other current liabilities as presented in the condensed consolidated balance sheets. Favorable changes in working capital primarily consisted of decreases in accounts receivable and prepaid expenses and other current assets. Partially offsetting favorable changes in working capital were decreases in accrued expenses and other current liabilities and in accounts payables. Accounts receivable decreased due to timing of sales at the end of the period compared to the end of the prior-year period. Prepaid and other current assets decreased due to amortization of insurance premiums. Accrued expenses and other current liabilities decreased due to payment of dealer incentives and variable compensation. Accounts payables decreased due to timing associated with the holiday season.
Previous wording
Net cash provided by investing activities was $8.4 million, which included $10.6 million of proceeds in held-to-maturity securities, partially offset by $2.2 million in capital expenditures. Our capital spending was primarily focused on information technology, machinery and equipment, and tooling.
Current wording
Net cash provided by investing activities was $46.3 million, which included $50.9 million of proceeds in available-for-sale securities, partially offset by $4.6 million in capital expenditures. Our capital spending was primarily focused on tooling, information technology, and machinery and equipment.
Previous wording
Net cash used in financing activities was $4.0 million, which included share repurchases totaling $3.5 million and $49.5 million used to repay outstanding borrowings of the Term Loan which was offset by $49.5 million of borrowings under the Revolving Credit Facility.
Current wording
Net cash used in financing activities was $54.2 million, which included share repurchases totaling $4.2 million and $49.5 million used to repay outstanding borrowings of the Term Loan. Drawn amounts on the Revolving Credit Facility were fully repaid as of December 29, 2024.
Previous wording
Three Months Ended October 1, 2023 Cash Flows from Continuing Operations
Current wording
Six Months Ended December 31, 2023 Cash Flows from Continuing Operations
Previous wording
Net cash used in operating activities for the three months ended October 1, 2023 was $4.8 million, primarily due to unfavorable changes in working capital, partially offset by net income. Working capital usage primarily consisted of decreases in accrued expenses and other current liabilities, income tax payable, and accounts payable, and an increase in prepaid expenses and other current assets. Partially offsetting the working capital usage was a decrease in inventories. Accrued expenses and other current liabilities decreased due to payment of dealer incentives and variable compensation. Income tax payable decreased due to tax payments within the quarter. Accounts payable decreased due to lower production at the end of the period compared to the end of the prior year period. Prepaid expenses and other current assets increased due to an increase in prepaid expenses, partially offset by amortization of insurance premiums. Inventories decreased as we adjust inventory levels to align with lower production levels.
Current wording
Net cash provided by operating activities for the six months ended December 31, 2023 was $22.4 million, primarily due to net income. Working capital had a net nominal effect on cash provided by operating activities. Favorable working capital changes consisted of decreases in inventories and accounts receivables, partially offset by increases in accounts payable, accrued expenses and other current liabilities, and income tax payable. Inventories decreased as we continue to rebalance inventory levels to align with lower production levels, partially offset by increased materials costs from inflation. Accounts receivables decreased primarily as a result of timing of collections and lower sales at the end of the period compared to the end of the prior-year period. Accounts payable decreased as a result of decreased production levels as well as timing associated with the holiday season. Accrued expenses and other current liabilities decreased due to payment of dealer incentives and lower compensation related accruals, partially offset by an increase in contract liabilities. Income tax payable decreased due to the timing of payments.
Previous wording
Net cash provided by investing activities was $22.5 million, due to net changes in held-to-maturity securities of $25.6 million, partially offset by $3.1 million of capital expenditures. Our capital spending was mainly focused on tooling, facility enhancements, and information technology.
Current wording
Net cash provided by investing activities was $15.2 million, due to net changes in available-for-sale securities of $20.0 million, partially offset by $4.8 million of capital expenditures. Our capital spending was mainly focused on facility enhancements, information technology, and tooling.
Previous wording
Net cash used in financing activities was $8.4 million, which included net payments of $1.1 million on long-term debt and $5.8 million of stock repurchases.
Current wording
Net cash used in financing activities was $14.1 million, which included net payments of $2.3 million on long-term debt and $10.2 million of share repurchases.