MASTERCRAFT BOAT HOLDINGS, INC. Fourth Quarter Highlights:
- Net sales increased to a record
$155.5 million , up 204%. - Gross margin expanded by 940 basis points to 23.9%.
- Net income was
$16.5 million or$0.87 per diluted share. - Diluted Adjusted Net Income per share, a non-GAAP measure, was
$0.98 . - Adjusted EBITDA, a non-GAAP measure, increased to
$27.0 million . - Adjusted EBITDA margin, a non-GAAP measure, increased to 17.3%.
Full Year Highlights:
- Delivered the most profitable fiscal year in the Company’s history.
- Net sales increased to a record
$525.8 million , up 45%. - Gross margin expanded by 390 basis points to 24.7%.
- Net income was
$56.2 million or$2.96 per diluted share. - Diluted Adjusted Net Income per share, a non-GAAP measure, was
$3.31 , up 147%. - Adjusted EBITDA, a non-GAAP measure, increased to
$92.8 million , up 109%. - Adjusted EBITDA margin, a non-GAAP measure, expanded by 540 basis points to 17.6%.
Brightbill continued, “In fiscal year 2021 we ramped up production aggressively while expertly managing our supply chain to drive sustainable, accelerated organic growth. We will look to build on that success in fiscal year 2022 as we remain committed to making investments to further strengthen our competitive position, grow our categories, and deliver shareholder value guided by our long-term focus and strategic priorities.”
Fourth Quarter Results
Net sales were a record
Gross profit increased
Operating expenses increased
Loss on extinguishment of debt totaling
Net income was
Adjusted EBITDA was
See “Non-GAAP Measures” below for a reconciliation of Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Income (Loss), and Adjusted Net Income (Loss) per share to the most directly comparable financial measures presented in accordance with GAAP.
Fiscal 2021 Results
Net sales were a record
Gross profit increased
Operating expenses decreased
Loss on extinguishment of debt totaling
Net income was a record
Adjusted EBITDA was a record
See “Non-GAAP Measures” below for a reconciliation of Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Income, and Adjusted Net Income per share to the most directly comparable financial measures presented in accordance with GAAP.
Outlook
Concluded Brightbill, “Given the current environment of continuing robust retail demand coupled with historically low dealer inventory, executing on our value-enhancing strategy should provide us with an opportunity to deliver another record-breaking year for net sales and earnings. Importantly, we face significant, ongoing risks from supply chain disruptions and the impact of COVID-19. We remain laser-focused on mitigating these headwinds.”
The Company’s outlook is as follows:
- For full year fiscal 2022, consolidated net sales growth is expected to be up in the high-teens percent range, with Adjusted EBITDA margins flat year-over-year, and Adjusted Earnings per share growth up in the high-teens percent range year-over-year. Driven by growth-oriented projects, we expect capital expenditures to be between
$25 million and$30 million for the full year. - For fiscal first quarter 2022, consolidated net sales growth is expected to be up in the mid-30 percent range, with Adjusted EBITDA margins in the low-14 percent range, and Adjusted Earnings per share growth up in the low-20 percent range year-over-year.
Conference Call and Webcast Information
For an audio replay of the conference call, dial (855) 859-2056 (domestic) or (404) 537-3406 (international) and enter audience passcode 1159212. The audio replay will be available beginning at 11:30 a.m. EDT on Thursday, September 2, 2021, through 11:30 a.m. EDT on
About
Headquartered in
Forward-Looking Statements
This press release includes forward-looking statements (as such term is defined in the Private Securities Litigation Reform Act of 1995). Forward-looking statements can often be identified by such words and phrases as “believes,” “anticipates,” “expects,” “intends,” “estimates,” “may,” “will,” “should,” “continue” and similar expressions, comparable terminology or the negative thereof, and include statements in this press release concerning the resilience of our business model; our intention to drive value and accelerate growth; and the potential impact of COVID-19 on our operating results and liquidity.
Forward-looking statements are subject to risks, uncertainties and other important factors that could cause actual results to differ materially from those expressed or implied in the forward-looking statements, including, but not limited to: the potential effects of the COVID-19 pandemic on the Company, general economic conditions, demand for our products, changes in consumer preferences, competition within our industry, our reliance on our network of independent dealers, our ability to manage our manufacturing levels and our large fixed cost base, changes to
Any such forward-looking statements represent management's estimates as of the date of this press release. These forward-looking statements should not be relied upon as representing our views as of any date subsequent to the date of this press release. We undertake no obligation (and we expressly disclaim any obligation) to update or supplement any forward-looking statements that may become untrue or cause our views to change, whether because of new information, future events, changes in assumptions or otherwise. Comparison of results for current and prior periods are not intended to express any future trends or indications of future performance, unless expressed as such, and should only be viewed as historical data.
Use of Non-GAAP Financial Measures
To supplement the Company’s consolidated financial statements prepared in accordance with
Results of Operations for the Three Months and Fiscal Year Ended
MASTERCRAFT BOAT HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share data)
| Three Months Ended | Fiscal Year Ended | |||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||
| Net sales | $ | 155,532 | $ | 51,094 | $ | 525,808 | $ | 363,073 | ||||||||
| Cost of sales | 118,291 | 43,687 | 395,837 | 287,717 | ||||||||||||
| Gross profit | 37,241 | 7,407 | 129,971 | 75,356 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Selling and marketing | 3,432 | 2,641 | 13,021 | 15,981 | ||||||||||||
| General and administrative | 9,781 | 6,201 | 37,049 | 25,557 | ||||||||||||
| Amortization of other intangible assets | 987 | 987 | 3,948 | 3,948 | ||||||||||||
| — | — | — | 56,437 | |||||||||||||
| Total operating expenses | 14,200 | 9,829 | 54,018 | 101,923 | ||||||||||||
| Operating income (loss) | 23,041 | (2,422 | ) | 75,953 | (26,567 | ) | ||||||||||
| Other expense: | ||||||||||||||||
| Interest expense | 748 | 1,378 | 3,392 | 5,045 | ||||||||||||
| Loss on extinguishment of debt | 733 | — | 733 | — | ||||||||||||
| Income (loss) before income tax expense | 21,560 | (3,800 | ) | 71,828 | (31,612 | ) | ||||||||||
| Income tax expense (benefit) | 5,026 | (964 | ) | 15,658 | (7,565 | ) | ||||||||||
| Net income (loss) | $ | 16,534 | $ | (2,836 | ) | $ | 56,170 | $ | (24,047 | ) | ||||||
| Net income (loss) per share: | ||||||||||||||||
| Basic | $ | 0.88 | $ | (0.15 | ) | $ | 2.99 | $ | (1.28 | ) | ||||||
| Diluted | $ | 0.87 | $ | (0.15 | ) | $ | 2.96 | $ | (1.28 | ) | ||||||
| Weighted average shares used for computation of: | ||||||||||||||||
| Basic earnings (loss) per share | 18,822,231 | 18,743,915 | 18,805,464 | 18,734,482 | ||||||||||||
| Diluted earnings (loss) per share | 19,021,220 | 18,743,915 | 18,951,521 | 18,734,482 | ||||||||||||
MASTERCRAFT BOAT HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except per share data)
| 2021 | 2020 | |||||||
| ASSETS | ||||||||
| CURRENT ASSETS: | ||||||||
| Cash and cash equivalents | $ | 39,252 | $ | 16,319 | ||||
| Accounts receivable, net of allowance of | 12,080 | 6,145 | ||||||
| Income tax receivable | 355 | 4,924 | ||||||
| Inventories, net | 53,481 | 25,636 | ||||||
| Prepaid expenses and other current assets | 5,059 | 3,719 | ||||||
| Total current assets | 110,227 | 56,743 | ||||||
| Property, plant and equipment, net | 60,495 | 40,481 | ||||||
| 29,593 | 29,593 | |||||||
| Other intangible assets, net | 59,899 | 63,849 | ||||||
| Deferred income taxes | 15,130 | 16,080 | ||||||
| Deferred debt issuance costs, net | 507 | 425 | ||||||
| Other long-term assets | 609 | 752 | ||||||
| Total assets | $ | 276,460 | $ | 207,923 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| CURRENT LIABILITIES: | ||||||||
| Accounts payable | $ | 23,861 | $ | 10,510 | ||||
| Income tax payable | 726 | — | ||||||
| Accrued expenses and other current liabilities | 46,836 | 35,985 | ||||||
| Current portion of long-term debt, net of unamortized debt issuance costs | 2,866 | 8,932 | ||||||
| Total current liabilities | 74,289 | 55,427 | ||||||
| Long-term debt, net of unamortized debt issuance costs | 90,277 | 99,666 | ||||||
| Unrecognized tax positions | 3,830 | 3,683 | ||||||
| Other long-term liabilities | 276 | 277 | ||||||
| Total liabilities | 168,672 | 159,053 | ||||||
| COMMITMENTS AND CONTINGENCIES | ||||||||
| STOCKHOLDERS' EQUITY: | ||||||||
| Common stock, | 189 | 189 | ||||||
| Additional paid-in capital | 118,930 | 116,182 | ||||||
| Accumulated deficit | (11,331 | ) | (67,501 | ) | ||||
| Total stockholders' equity | 107,788 | 48,870 | ||||||
| Total liabilities and stockholders' equity | $ | 276,460 | $ | 207,923 | ||||
Supplemental Operating Data
The following table presents certain supplemental operating data for the periods indicated:
| Three Months Ended | Fiscal Year Ended | |||||||||||||||||||||
| 2021 | 2020 | Change | 2021 | 2020 | Change | |||||||||||||||||
| (Dollars in thousands) | (Dollars in thousands) | |||||||||||||||||||||
| Unit sales volume: | ||||||||||||||||||||||
| MasterCraft | 965 | 308 | 213.3 | % | 3,343 | 2,478 | 34.9 | % | ||||||||||||||
| NauticStar | 320 | 145 | 120.7 | % | 1,387 | 1,191 | 16.5 | % | ||||||||||||||
| Crest | 708 | 216 | 227.8 | % | 2,467 | 1,623 | 52.0 | % | ||||||||||||||
| Consolidated | 1,993 | 669 | 197.9 | % | 7,197 | 5,292 | 36.0 | % | ||||||||||||||
| Net sales: | ||||||||||||||||||||||
| MasterCraft | $ | 107,704 | $ | 35,254 | 205.5 | % | $ | 363,274 | $ | 246,455 | 47.4 | % | ||||||||||
| NauticStar | 14,510 | 7,203 | 101.4 | % | 59,846 | 54,930 | 8.9 | % | ||||||||||||||
| Crest | 33,318 | 8,637 | 285.8 | % | 102,688 | 61,688 | 66.5 | % | ||||||||||||||
| Consolidated | $ | 155,532 | $ | 51,094 | 204.4 | % | $ | 525,808 | $ | 363,073 | 44.8 | % | ||||||||||
| Net sales per unit: | ||||||||||||||||||||||
| MasterCraft | $ | 112 | $ | 114 | (1.8 | %) | $ | 109 | $ | 99 | 10.1 | % | ||||||||||
| NauticStar | 45 | 50 | (10.0 | %) | 43 | 46 | (6.5 | %) | ||||||||||||||
| Crest | 47 | 40 | 17.5 | % | 42 | 38 | 10.5 | % | ||||||||||||||
| Consolidated | 78 | 76 | 2.6 | % | 73 | 69 | 5.8 | % | ||||||||||||||
| Gross margin | 23.9 | % | 14.5 | % | 940 bpts | 24.7 | % | 20.8 | % | 390 bpts | ||||||||||||
Non-GAAP Measures
EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin
We define EBITDA as earnings before interest expense, income taxes, depreciation and amortization. We define Adjusted EBITDA as EBITDA further adjusted to eliminate certain non-cash charges or other items that we do not consider to be indicative of our core and/or ongoing operations. For the periods presented herein, these adjustments include Aviara transition costs, debt refinancing charges, goodwill and other intangible asset impairment charges, Aviara (new brand) startup costs, COVID-19 shutdown costs, and certain non-cash items including share-based compensation. We define Adjusted EBITDA margin as Adjusted EBITDA expressed as a percentage of Net sales.
Adjusted Net Income and Adjusted Net Income per share
We define Adjusted Net Income and Adjusted Net Income per share as net income adjusted to eliminate certain non-cash charges or other items that we do not consider to be indicative of our core and/or ongoing operations and adjusted for the impact to income tax expense (benefit) related to non-GAAP adjustments. For the periods presented herein, these adjustments include Aviara transition costs, debt refinancing charges, goodwill and other intangible asset impairment charges, Aviara (new brand) startup costs, COVID-19 shutdown costs, and certain non-cash items including other intangible asset amortization, and share-based compensation.
EBITDA, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Income, and Adjusted Net Income per share, which we refer to collectively as the Non-GAAP Measures, are not measures of net income (loss) or operating income (loss) as determined under accounting principles generally accepted in
- Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future and Adjusted EBITDA does not reflect any cash requirements for such replacements;
- Adjusted EBITDA does not reflect our cash expenditures, or future requirements for capital expenditures or contractual commitments;
- Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs;
- Adjusted EBITDA does not reflect our tax expense or any cash requirements to pay income taxes;
- Adjusted EBITDA does not reflect interest expense, or the cash requirements necessary to service interest payments on our indebtedness; and
- Adjusted Net Income, Adjusted Net Income per share, and Adjusted EBITDA do not reflect the impact of earnings or charges resulting from matters we do not consider to be indicative of our core and/or ongoing operations, but may nonetheless have a material impact on our results of operations.
In addition, because not all companies use identical calculations, our presentation of the Non-GAAP Measures may not be comparable to similarly titled measures of other companies, including companies in our industry.
We do not provide forward-looking guidance for certain financial measures on a
The following table presents a reconciliation of net income (loss) as determined in accordance with
| Three Months Ended | Fiscal Year Ended | ||||||||||||||||||||||||||
| % of | % of | % of | % of | ||||||||||||||||||||||||
| 2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||||||
| (Dollars in thousands) | (Dollars in thousands) | ||||||||||||||||||||||||||
| Net income (loss) | $ | 16,534 | 10.6% | $ | (2,836 | ) | -5.5% | $ | 56,170 | 10.7% | $ | (24,047 | ) | -6.6% | |||||||||||||
| Income tax expense (benefit) | 5,026 | (964 | ) | 15,658 | (7,565 | ) | |||||||||||||||||||||
| Interest expense | 748 | 1,378 | 3,392 | 5,045 | |||||||||||||||||||||||
| Depreciation and amortization | 3,082 | 2,842 | 11,630 | 10,527 | |||||||||||||||||||||||
| EBITDA | 25,390 | 16.3% | 420 | 0.8% | 86,850 | 16.5% | (16,040 | ) | -4.4% | ||||||||||||||||||
| Share-based compensation | 800 | 361 | 2,984 | 1,061 | |||||||||||||||||||||||
| Aviara transition costs(a) | — | — | 2,150 | — | |||||||||||||||||||||||
| Debt refinancing charges(b) | 769 | — | 769 | — | |||||||||||||||||||||||
| — | — | — | 56,437 | ||||||||||||||||||||||||
| Aviara start-up costs(d) | — | 234 | — | 1,446 | |||||||||||||||||||||||
| COVID-19 shutdown costs(e) | — | (112 | ) | — | 1,394 | ||||||||||||||||||||||
| Adjusted EBITDA | $ | 26,959 | 17.3% | $ | 903 | 1.8% | $ | 92,753 | 17.6% | $ | 44,298 | 12.2% | |||||||||||||||
- Represents costs to transition production of the Aviara brand from
Vonore, Tennessee toMerritt Island, Florida . Costs include duplicative overhead costs and costs not indicative of ongoing operations (such as training and facility preparation). - Represents loss recognized upon refinancing the Company’s debt. The loss is comprised of unamortized debt issuance costs related to the previously existing credit facility and third-party legal costs associated with the refinancing.
- Represents non-cash charges recorded in the NauticStar and Crest segments for impairment of goodwill and trade name intangible assets.
- Represents start-up costs associated with Aviara, a completely new boat brand in an industry category previously not served by the Company. We began selling the brand’s first two models, the AV32 and the AV36, during the first and second quarters of fiscal 2020, respectively. We expect to begin selling one additional model, the AV40, in fiscal 2022. Start-up costs presented for fiscal 2020 are related to the AV36 and AV40 models.
- Represents lump sum severance payments and costs related to temporary continuation of healthcare benefits for certain laid off employees, in connection with the COVID-19 pandemic.
The following table sets forth a reconciliation of net income (loss) as determined in accordance with U.S. GAAP to Adjusted Net Income (Loss) for the periods indicated:
| Three Months Ended | Fiscal Year Ended | |||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||
| Net income (loss) | $ | 16,534 | $ | (2,836 | ) | $ | 56,170 | $ | (24,047 | ) | ||||||
| Income tax expense (benefit) | 5,026 | (964 | ) | 15,658 | (7,565 | ) | ||||||||||
| Amortization of acquisition intangibles | 961 | 962 | 3,842 | 3,842 | ||||||||||||
| Share-based compensation | 800 | 361 | 2,984 | 1,061 | ||||||||||||
| Aviara transition costs(a) | — | — | 2,150 | — | ||||||||||||
| Debt refinancing charges(b) | 769 | — | 769 | — | ||||||||||||
| — | — | — | 56,437 | |||||||||||||
| Aviara start-up costs(d) | — | 234 | — | 1,446 | ||||||||||||
| COVID-19 shutdown costs(e) | — | (112 | ) | — | 1,394 | |||||||||||
| Adjusted Net Income (Loss) before income taxes | 24,090 | (2,355 | ) | 81,573 | 32,568 | |||||||||||
| Adjusted income tax expense (benefit)(f) | 5,541 | (542 | ) | 18,762 | 7,491 | |||||||||||
| Adjusted Net Income (Loss) | $ | 18,549 | $ | (1,813 | ) | $ | 62,811 | $ | 25,077 | |||||||
| Adjusted net income (loss) per common share | ||||||||||||||||
| Basic | $ | 0.99 | $ | (0.10 | ) | $ | 3.34 | $ | 1.34 | |||||||
| Diluted | $ | 0.98 | $ | (0.10 | ) | $ | 3.31 | $ | 1.34 | |||||||
| Weighted average shares used for the computation of: | ||||||||||||||||
| Basic Adjusted net income (loss) per share(g) | 18,822,231 | 18,743,915 | 18,805,464 | 18,734,482 | ||||||||||||
| Diluted Adjusted net income (loss) per share(g) | 19,021,220 | 18,743,915 | 18,951,521 | 18,734,482 | ||||||||||||
- Represents costs to transition production of the Aviara brand from
Vonore, Tennessee toMerritt Island, Florida . Costs include duplicative overhead costs and costs not indicative of ongoing operations (such as training and facility preparation). - Represents loss recognized upon refinancing the Company’s debt. The loss is comprised of unamortized debt issuance costs related to the previously existing credit facility and third-party legal costs associated with the refinancing.
- Represents non-cash charges recorded in the NauticStar and Crest segments for impairment of goodwill and trade name intangible assets.
- Represents start-up costs associated with Aviara, a completely new boat brand in an industry category previously not served by the Company. We began selling the brand’s first two models, the AV32 and the AV36, during the first and second quarters of fiscal 2020, respectively. We expect to begin selling one additional model, the AV40, in fiscal 2022. Start-up costs presented for fiscal 2020 are related to the AV36 and AV40 models.
- Represents lump sum severance payments and costs related to temporary continuation of healthcare benefits for certain laid off employees, in connection with the COVID-19 pandemic.
- Reflects income tax expense at an income tax rate of 23.0% for each period presented.
- Represents the Weighted Average Shares Used for the Computation of Basic and Diluted earnings (loss) per share as presented on the Consolidated Statements of Operations to calculate Adjusted Net Income per diluted share for all periods presented herein.
The following table presents the reconciliation of net income (loss) per diluted share to Adjusted Net Income (Loss) per diluted share for the periods presented:
| Three Months Ended | Fiscal Year Ended | |||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||
| Net income (loss) per diluted share | $ | 0.87 | $ | (0.15 | ) | $ | 2.96 | $ | (1.28 | ) | ||||||
| Impact of adjustments: | ||||||||||||||||
| Income tax expense (benefit) | 0.27 | (0.05 | ) | 0.83 | (0.40 | ) | ||||||||||
| Amortization of acquisition intangibles | 0.05 | 0.05 | 0.20 | 0.20 | ||||||||||||
| Share-based compensation | 0.04 | 0.02 | 0.16 | 0.06 | ||||||||||||
| Aviara transition costs(a) | — | — | 0.11 | — | ||||||||||||
| Debt refinancing charges(b) | 0.04 | — | 0.04 | — | ||||||||||||
| — | — | - | 3.01 | |||||||||||||
| Aviara start-up costs(d) | — | 0.01 | — | 0.08 | ||||||||||||
| COVID-19 shutdown costs(e) | — | (0.01 | ) | — | 0.07 | |||||||||||
| Adjusted Net Income (Loss) per diluted share before income taxes | 1.27 | (0.13 | ) | 4.30 | 1.74 | |||||||||||
| Impact of adjusted income tax expense on net income per diluted share before income taxes(f) | (0.29 | ) | 0.03 | (0.99 | ) | (0.40 | ) | |||||||||
| Adjusted Net Income (Loss) per diluted share | $ | 0.98 | $ | (0.10 | ) | $ | 3.31 | $ | 1.34 | |||||||
- Represents costs to transition production of the Aviara brand from
Vonore, Tennessee toMerritt Island, Florida . Costs include duplicative overhead costs and costs not indicative of ongoing operations (such as training and facility preparation). - Represents loss recognized upon refinancing the Company’s debt. The loss is comprised of unamortized debt issuance costs related to the previously existing credit facility and third-party legal costs associated with the refinancing.
- Represents non-cash charges recorded in the NauticStar and Crest segments for impairment of goodwill and trade name intangible assets.
- Represents start-up costs associated with Aviara, a completely new boat brand in an industry category previously not served by the Company. We began selling the brand’s first two models, the AV32 and the AV36, during the first and second quarters of fiscal 2020, respectively. We expect to begin selling one additional model, the AV40, in fiscal 2022. Start-up costs presented for fiscal 2020 are related to the AV36 and AV40 models.
- Represents lump sum severance payments and costs related to temporary continuation of healthcare benefits for certain laid off employees, in connection with the COVID-19 pandemic.
- Reflects income tax expense at an income tax rate of 23.0% for each period presented.
Change in Non-GAAP Financial Measure
Prior to fiscal year-end 2020, the Company’s calculation of a diluted per share amount of Adjusted Net Income included an adjustment to fully dilute this non-GAAP measure for all outstanding share-based compensation grants. This additional dilution was incorporated by adjusting the GAAP measure, Weighted Average Shares Used for the Computation of Basic earnings per share, as presented on the Consolidated Statements of Operations, to include a dilutive effect for all outstanding restricted stock awards, performance stock units, and stock options. Beginning with the fiscal year-end 2020 presentation and for all subsequent periods, the Company no longer includes this additional dilution impact in its calculation of Adjusted Net Income per diluted share. The Company has instead utilized the Weighted Average Shares Used for the Computation of Basic and Diluted earnings per share as presented on the Consolidated Statements of Operations to calculate Adjusted Net Income per diluted share for all periods presented herein.
The Company believes that, because its outstanding share-based compensation grants no longer result in a material amount of dilution of its earnings as was the case nearer to the date of our IPO, the adjustment methodology previously used no longer provides meaningful information to management or other users of its financial statements. This change resulted in an increase of
Investor Contact:
Chief Revenue Officer
Email: investorrelations@mastercraft.com
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