Mastercraft Boat Holdings, Inc. · NASDAQ:MCFT
Mastercraft Boat — MCBC Holdings — Investor Presentation (October 2015)
35 slides from Mastercraft Boat's investor presentation, Oct 6, 2015
Slide 1: Investor presentation October 2015
Investor presentation October 2015
Slide 2: Disclaimer
2 Disclaimer This presentation contains forward-looking statements within the meaning of the federal securities laws, which statements involve substantial risks and uncertainties. Forward-looking statements generally relate to future events and include, without limitation, projections, forecasts and
Slide 3: Management Presenters
Management Presenters 28 years in the industry 3 years with MasterCraft Senior executive roles at both Brunswick and Correct Craft TERRY MCNEW PRESIDENT & CEO 24 years in the industry 8 years with MasterCraft 16 years at Brunswick TIM OXLEY CFO 3
Slide 4: Introduction to MasterCraft
Global, premium, performance-based lifestyle brand Leading U.S. market share in the performance sport boat (“PSB”) category Highly-engineered performance sport boats used for water skiing, wakeboarding and wake surfing, as well as general recreational boating Relentless focus on innovation with 19 p
Slide 5: Evolution of the Category Innovator
Evolution of the Category Innovator 1968 1976 1980 1989 1996 2003 2004 2013 2014 2015 2009 MASTERCRAFT’S FIRST CUSTOM HULL SKI BOAT FIRST POWERSLOT TRANSMISSION (LATER PATENTED IN 1981) DEDICATED WAKEBOARD-SPECIFIC BOAT USED IN ESPN’S X-GAMES NOW POPULAR PICKLE-FORK STYLE BOW INDUSTRY’S FIRST WAKE S
Slide 6: Attractive market dynamics driving demand
Attractive market dynamics driving demand During 2013, retail sales of new powerboats in the U.S. totaled $6.5 billion with an addressable market of >$4.4 billion (1) 2013 PSB unit sales remained 48.4% below historical peaks observed between 2002 and 2007 New unit sales of performance sport boats in
Slide 7: The MasterCraft Difference
THE MASTERCRAFT DIFFERENCE Our differentiated approach provides sustainable competitive advantages Proven performance Strong demand for new products Faster speed to market and portfolio renewal rates Lower costs enabling competitive pricing with higher profit margins Higher resale values Highest qua
Slide 8: Highly Engineered Product Portfolio
Highly Engineered Product Portfolio 8 NXT Series SSI 2014 Unit Volume ___________________ Source: CY 2014 SSI data for all reporting states. Note: Entry-level category as defined by sales of Axis, Moomba, MBSports, Centurion and Tige. XSeries Star Series ProStar XStar New entry level series designed
Slide 9: MasterCraft NXT launch
MasterCraft Nxt launch $50K ALL DAY Launch Partnership with Travis Pastrana Our MasterCraft NXT series targets a younger demographic that we haven’t targeted before, bringing new buyers in earlier, and providing them with a more affordable, entry-level boat that provides MasterCraft quality, styling
Slide 10: Leading market share position in the U.S.
We’ve consistently held a leading market share position in the U.S. over the past decade Share is growing as the market recognizes the superior quality, performance, styling and value proposition of our newest boats We expect the MasterCraft NXT line (our 1st offering in the entry-level segment) to
Slide 11: Iconic brand synonymous with quality, innovation and performance
ICONIC BRAND SYNONYMOUS WITH QUALITY, INNOVATION and PERFORMANCE The MasterCraft brand is built on a carefully crafted set of defining principles LEGACY Rich heritage defined by an engaged and innovative culture since 1968 POWER Recognized for superior performance, with a number of world records set
Slide 12: Committed to quality
Committed to quality 250,000 Square foot facility ~40% Additional units/day manufacturing capacity (1) 47 Year history of making boats 435 Critical checkpoints 100% Lake tested ISO 14001 Quality control system NMMA Certified ONE GOAL To be the best on the water 12 _____________________ Assumes curre
Slide 13: Industry-leading product design and innovation
Industry-leading product design and innovation OF 6 NMMA INNOVATION AWARDS IN 2014 AND 2015 PLANNING DEVELOPMENT EXECUTION LAUNCH MasterCraft utilizes a disciplined product development process and advanced technologies to develop the highest performing, most innovative and highest quality hulls and
Slide 14: Highly Efficient Product Development and Manufacturing
Highly Efficient Product Development and Manufacturing MasterCraft’s significant investments in infrastructure value-added processes engineering result in lower material waste reduced labor hours per boat reduced re-work increased production efficiencies improved quality Gross Margin expansion With
Slide 15: Creating a culture of operational excellence
15 CREATING A CULTURE OF OPERATIONAL EXCELLENCE Highly skilled workforce of approximately 475 employees handcraft our boats from hull to upholstery near Knoxville, Tennessee Culture of continuous operational improvement, with more than 10,000 employee suggestions implemented to improve our manufactu
Slide 16: Strong Dealer Network
STRONG DEALER NETWORK Dealer Location named in Boating Magazines list of Top 100 dealers NORTH AMERICAN DEALERS WITH 90 LOCATIONS 129 INTERNATIONAL DEALERS WITH 45 LOCATIONS IN 54 COUNTRIES AROUND THE WORLD 40 Are in the top three performance sport boat dealers in their respective U.S. markets 75% 1
Slide 17: Differentiated sales and marketing capabilities
17 Differentiated sales and marketing capabilities AWARD-WINNING ADVERTISING CAMPAIGNS HIGHEST # OF FOLLOWERS HIGHEST RANKED CHANNEL 2X ENGAGEMENT 10k+ FOLLOWERS HIGHLY ENGAGED CUSTOMER BASE SPONSORSHIPS #1, #2, #3 & #5 wakeboarders #1 & #2 water ski jumpers #4 & #5 water skiers ALSO PARTNER WITH MU
Slide 18: Highly Experienced Management Team
Highly Experienced Management TeaM TERRY MCNEW PRESIDENT AND CEO 28 years in the industry. Executive roles at both Brunswick Corp. and Correct Craft. Six Sigma Black Belt certification. 3 years with MasterCraft SHANE CHITTUM COO 15 years of cross-functional business experience primarily in the autom
Slide 19: Multi-Faceted Growth Opportunities
Multi-Faceted Growth Opportunities
Slide 20: Overview of growth opportunities
Overview of growth opportunities 20 Continue to Develop New and Innovative Products in Core Markets Penetrate the Entry-Level Segment of the Performance Sport Boat Category Capture Additional Share from Adjacent Boating Categories Continuous Operational Improvement to Drive Margin Expansion Further
Slide 21: Continue to develop new and innovative products in core markets
Continue to develop new and innovative products in core markets 21 KEY PRODUCT INTRODUCTIONS FY2015 NXT20 FY2015 X23 FY2016 NXT22 1 2 3 4 5 A more disciplined product innovation process allows MasterCraft to spend on R&D more efficiently than competitors Effective product development has accelerated
Slide 22: Penetrate the Entry-Level Segment of the Performance Sport Boat Category
Penetrate the Entry-Level Segment of the Performance Sport Boat Category The MasterCraft NXT product line allows us to penetrate the growing entry-level segment of our market, a segment the Company had not previously targeted The MasterCraft NXT continues to offer a product with the highest levels o
Slide 23: Capture share from adjacent boat categories
Capture share from adjacent boat categories Targeting crossover customers seeking high performance powerboats for general recreation 23 X55 Features TRADITIONAL LARGE REC DAYBOATS WATERSPORTS VERSATILITY CUSTOMIZED STYLING ENHANCED SAFETY ROOMY, PLUSH INTERIOR STORAGE / SPACE Gen 2 Surf System 2.1k
Slide 24: Continuous operational improvement
CONTINUOUS OPERATIONAL IMPROVEMENT Faster and more disciplined product innovation process has accelerated new product development Significant margin expansion despite lower average boat sale price increases vs. competitors Recent initiatives implemented to reduce cost base and improve manufacturing
Slide 25: Further strengthen dealer network
Further Strengthen dealer network And Maintain The Highest Quality Dealers While Thoughtfully Managing Our Exposure MOST DEALERS IN TOP 20 (1) % # 25% 5 20% 4 15% 3 LOW DEALER CONCENTRATION Dealer Ranks % Net Sales Top 10 33% Top 11-20 16% Top 20 49% Supply Dealers With High Quality, Relevant Boats
Slide 26: Key Financial Information
Key Financial Information
Slide 27: Strong financial performance
27 _____________________ Note: Figures exclude Hydra-Sports and certain other non-cash or non-operating expenses. See Appendix for reconciliation of Adjusted EBITDA. “YoY” defined as the current fiscal period over the prior fiscal period growth. Net SALES $ in millions Adjusted ebitda $ in millions
Slide 28: Recent Developments
METRIC Q4 2015 FY 2015 Units Sold YoY Growth % 626 2.5% 2,547 19.3% Net Sales YoY Growth % $50.7 6.0% $199.9 22.2% Adjusted EBITDA YoY Growth % Margin % $8.0 7.3% 15.8% $31.5 71.4% 15.8% 28 ___________________ Note: Recent development figures exclude Hydra-Sports and certain other non-cash or non-op
Slide 29: Long Term Performance Targets
LONG TERM PERFORMANCE TARGETS METRIC TARGET Revenue Growth High-single to low-double digit Adjusted EBITDA Margin 17% – 20% EPS Growth 15%+ 29 _____________________ Note: These goals are forward-looking, are subject to significant business, economic, regulatory and competitive uncertainties and cont
Slide 30: Fiscal 2016 guidance
FISCAL 2016 guidance METRIC FYE 2016 TARGET Revenue Growth High-single to low-double digit Adjusted EBITDA Margin 200+ bps EPS Growth 15%+ 30 _____________________ Note: These goals are forward-looking, are subject to significant business, economic, regulatory and competitive uncertainties and conti
Slide 31: Wrap up
Wrap up World-renowned iconic brand synonymous with quality, innovation and performance Leading market share position in performance sport boat category Industry-leading product design and innovation Highly efficient product development and manufacturing Strong dealer network Differentiated sales an
Slide 32: Appendix
Appendix
Slide 33: Detailed financial summary
Detailed financial summary ($ in millions, actual units) 33 _____________________ Note: FYE June 30. Consolidated figures include Hydra-Sports and certain other non-cash or non-operating expenses. See next page in appendix for reconciliation of Adjusted EBITDA. “YoY” defined as the current fiscal pe
Slide 34: Adjusted EBITDA Reconciliation
ADJUSTED EBITDA RECONCILIATION 34 FY 2012 FY 2013 FY 2014 FY 2015 Q4 2015 Net (Loss) Income $(16.3) $2.8 $19.9 $5.5 $2.5 Income Tax Expense (Benefit) (1) (2.1) (0.0) (11.4) 6.6 1.9 Interest Expense 8.4 9.2 7.5 5.2 1.0 Depreciation and Amortization 2.2 2.0 2.5 3.3 1.0 EBITDA $(7.8) $14.0 $18.5 $20.6
Slide 35: Balance Sheet
Balance Sheet 35 ($ in thousands) June 30, 2014 June 30, 2015 Assets: Cash $12,539 $1,167 Accounts Receivable 4,406 2,653 Inventories - Net 11,685 11,541 Other Current Assets 5,407 13,968 Property, Plant and Equipment - Net 12,891 13,233 Intangible Assets - Net 17,193 16,971 Goodwill 29,593 29,593 O