MasterCraft Boat Holdings, Inc. recently announced financial results for its fiscal 2021 second quarter ended January 3, 2021.
Fred Brightbill, chief executive officer and chairman, commented, “MasterCraft once again delivered financial and operational performance that exceeded expectations, highlighted by our second consecutive quarter of record profits. This performance was a direct result of our team members’ consistent execution on our key strategic priorities and the strength of our brands. In what has continued to be a challenging and dynamic operating environment, we have been able to scale and accelerate production while efficiently managing our supply chain to deliver for our dealers and consumers.”
Brightbill continued, “Execution of our consumer-centric strategy remains our top focus as we look to drive sustainable, accelerated growth. Strong retail demand across all our brands continued in our fiscal second quarter, resulting in a record wholesale backlog that has provided us with tremendous confidence in our outlook and ability to create shareholder value.”
Second Quarter Results
Net Sales for the second quarter were $118.7 million, an increase of $19.0 million or 19.1%, compared to $99.6 million for the prior-year period. MasterCraft said the increase was primarily due to higher sales volumes at each of its segments, a favorable mix of higher-priced and higher-contented models and lower dealer incentives.
Gross profit increased $8.1 million, or 38.5%, to $29.3 million compared to $21.1 million for the prior-year period, principally driven by a favorable mix of higher-priced and higher-contented models, higher sales volumes, and lower dealer incentives. This favorability was partially offset by higher compensation costs and costs associated with the transition of Aviara to MasterCraft's Merritt Island facility.
Gross margin was 24.7% for the second quarter, an increase of 340 basis points compared to the prior-year period. The increase was primarily attributable to favorable overhead absorption driven by higher sales volume, higher prices, lower dealer incentives and materials cost containment, partially offset by higher labor costs.
Operating expenses were $12.3 million for the second quarter, an increase of $1.5 million or 14.1%, compared to the prior-year period primarily driven by higher general and administrative expenses, resulting from higher incentive compensation costs and additional investment related to product development. This increase was partially offset by lower selling and marketing costs, primarily due to the timing of anticipated expense, which has been delayed by the COVID-19 pandemic until later in the fiscal year.
Net income for the second quarter increased to $12.5 million, or $0.66 per share, compared to $6.9 million, or $0.37 per share, for the prior-year period. Adjusted Net Income increased to $14.3 million, or $0.75 per diluted share, compared to $8.2 million, or $0.43 per diluted share, in the prior-year period.
“Due to a continuation of strong retail demand trends, historically low dealer inventory, the strength of our order book across our brands, and the increasing production rates we delivered in each segment over the course of the quarter, we are raising our guidance for fiscal 2021," Concluded Brightbill. "Importantly, our guidance assumes that we are able to operate all of our facilities throughout the year without any COVID-19 related disruptions.”