MasterCraft (NASDAQ: MCFT) reported Q3 EPS of $0.78, $0.11 better than the analyst estimate of $0.67. Revenue for the quarter came in at $128.4 million versus the consensus estimate of $122.72 million.

• Fiscal third quarter results include financial results from the Crest acquisition that closed on October 1, 2018.
• Net sales for the third quarter increased to $128.4 million, up 36.9 percent from $93.8 million in the prior-year period.
• Third quarter gross profit rose to $31.4 million, up 28.6 percent from $24.4 million in the prior-year period.
• Net income totaled $12.8 million for the fiscal 2019 third quarter, a gain of $1.3 million, or 11.4 percent, from the prior-year period.
• Diluted earnings per share increased in the fiscal 2019 third quarter by $0.07, up 11.5 percent, to $0.68, from the prior-year period.
• Adjusted EBITDA, a non-GAAP measure, grew 25.0 percent to $21.9 million from $17.5 million in the prior-year period.
• Fully diluted Adjusted Net Income per share, a non-GAAP measure, grew $0.19, or 32.2 percent, in the third quarter of fiscal 2019, to $0.78, up from $0.59 in the prior-year period.
• Year-to-date the company made debt payments of $29.0 million, enabled by its strong cash generation.

Terry McNew, President and Chief Executive Officer, commented, “We delivered strong financial results in our fiscal third quarter, once again achieving record levels of net sales and profitability. We continue to see strong retail and wholesale momentum in our core MasterCraft brand driven by our strong product portfolio and the underlying strength in the broader performance sport boat segment. The integration of our newest brand, Crest, is ahead of plan and we are seeing the benefits of our industry-leading operational excellence through increased capacity and enhanced working capital efficiencies. Importantly, this additional capacity to support future long-term growth at Crest has come with virtually no capital expenditures.

“At NauticStar, we saw continued financial improvements this quarter, with a sequential increase in gross margins compared to our fiscal second quarter. Our product development strategy of pivoting NauticStar’s portfolio to higher-margin, larger product continues to be a primary focus, and is validated by the current softness in retail demand being experienced across the mid-line, smaller product category. We will more fully realize the financial benefits from this strategy as these larger products become a larger percentage of our mix over the next several years.”

McNew continued, “Throughout our fiscal third quarter, we saw retail activity slowly gain momentum and we remain comfortable with inventory levels across all our brands, despite challenging domestic weather conditions and their impact on retail demand coming out of the boat shows. We believe the upcoming retail season will be solid, driven by the resilience of the U.S. economy, the strength of our product portfolio and premier dealer partners.

“As we look to close out fiscal 2019, our focus will be on continuing to leverage our strengths in operational excellence and financial management to further improve output, quality, margins and cash flow across all of our brands, and enter fiscal 2020 well positioned to continue our rapid growth with the addition of Aviara to our powerful brand portfolio.”

Fiscal 2019 Outlook

Said McNew, “Our year-to-date performance gives us confidence in our ability to deliver a strong finish to fiscal 2019. We will be prudent in managing all our brands during the all-important April, May and June selling season. Our goal is to maintain healthy dealer inventory levels through the end of fiscal 2019 to ensure we are well positioned to execute on the strong growth initiatives we have planned for fiscal 2020. With that in mind, we are reaffirming our previously provided full year fiscal 2019 guidance.”

The Company reaffirmed its fiscal 2019 outlook as follows:

• Net Sales - low 40 percent net sales growth over fiscal 2018, driven by a higher contribution from the Crest acquisition.
• Adjusted EBITDA margins - mid-to-high 16 percent range, reflecting the inclusion of Crest, which is dilutive to margins.
• Adjusted earnings per share - growth in the low 30 percent range.

For earnings history and earnings-related data on MasterCraft (MCFT) click here.