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MasterCraft reports net sales gain in 4Q, full-year results

By MasterCraft

MasterCraft has announced financial results for its fiscal 2017 fourth quarter and full year ended June 30, 2017, reporting gains in net sales and reduced dealer pipeline inventory.

Net sales for the fourth quarter increased to $58.3 million, up 9.3 percent from $53.4 million in the prior-year period. Net sales for the fiscal year rose to $228.6 million, up 3.2 percent from $221.6 million in the prior year. Gross margin in the fourth quarter increased 190 basis points to 28.2 percent, up from 26.3 percent in the prior-year period, and increased 20 basis points for the fiscal year to 27.8 percent from 27.6 percent in fiscal 2016.

Net income for the fourth quarter totaled $6.3 million, up from $4.8 million in the prior-year period. Net income totaled $19.6 million for the fiscal year, almost double from $10.2 million in the prior year.

Diluted earnings per share increased to $0.34 for the fourth quarter, from $0.26 in the prior-year period. Diluted earnings per share were $1.05 for the fiscal year compared to $0.56 in the prior year.

 “We delivered another strong quarter from both a top- and bottom-line perspective," said Terry McNew, MasterCraft’s president and chief executive officer.

Continued growth in retail demand and a focus on operational efficiency drove results, McNew said.  "For the quarter and fiscal year, we delivered gains in net sales, reduced our dealer pipeline inventory, as well as continued to deliver on our industry-leading working capital management — which enabled us to reduce our total debt by $17.7 million during the fiscal year."

Retail activity, up double digits, strengthened in fiscal 2017, resulting in improved dealer inventory turns, McNew said. This set the stage for healthy dealer inventory levels and activity in fiscal 2018. 

Fiscal fourth-quarter net income totaled $6.3 million, versus $4.8 million in the year-earlier quarter. Adjusted net income was $6.5 million, or $0.35 per share, on a pro forma, fully diluted weighted average share count of 18.7 million shares. This compares with adjusted net income of $5.7 million, or $0.30 per share, in the prior-year period.

Net sales for the fiscal year increased $7.0 million, or 3.2 percent, to $228.6 million from $221.6 million in the prior year. The increase was due to an increase in unit volume of 48 units, or 1.8 percent and an increase in net sales per unit of 1.4 percent. This increase was due to price increases, as well as increased sales of higher content option packages.

Gross profit for the fiscal year increased $2.4 million, or 3.9 percent to $63.5 million, versus $61.1 million in the prior year. Gross margin rose to 27.8 percent from 27.6 percent in the prior year, McNew said.

Net income totaled $19.6 million for the fiscal year up from $10.2 million in the prior year, reflecting reduced stock-based compensation costs. Adjusted net income increased to $24.3 million, or $1.30 per share for the fiscal year on a pro forma, fully diluted weighted average share count of 18.7 million shares. This compares favorably with adjusted net income of $23.4 million, or $1.24 per share, in the prior year.

“We delivered solid performance to close out the year,” McNew said during the earnings call. “We are optimistic about our prospects for fiscal 2018.”

Looking ahead, McNew said MasterCraft remains committed to developing new and innovative products, further penetrating the entry-level and mid-line segment of the performance sport boat category, capturing share from adjacent boating categories, strengthening its dealer network and driving margin expansion through continued operational excellence.

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