holdings. As a reminder, today's call is being webcast live and will also be archived on our website for future listening. With me on this morning's call is Brad Nelson, Chief Executive Officer, and Scott Kemp, Chief Financial Officer. Brad will begin with an overview of our operational performance. After that, Scott will discuss our financial performance. Brad will then offer some closing remarks before we open the call for questions. Before we begin, we would like to remind participants that the information contained in this call is current only as of today, September 10, 2026. The company assumes no obligation to update any statements, including forward-looking statements. Statements that are not historical facts are forward-looking statements and subject to the safe harbor disclaimer in today's press release. Additionally, on this conference call, we will discuss non-GAAP measures that include or exclude items not indicative of our ongoing operations. For each non-GAAP measure, we will also provide the most directly comparable GAAP measure in today's press release, which will include a reconciliation of these non-GAAP measures to our GAAP results. Before turning to our results, I would like to provide some important context for the quarter and year. On May 15th, we completed our combination with Marine Products Corporation, welcoming the Chaparral and Ravallo brands to the Mastercraft Gold Holdings or MCBH Family. As a result, our fourth quarter and full year results include a partial six-week contribution from these brands. To help frame the underlying performance of our business and for comparative purposes, we will speak to our full year results on both a total combined company basis and on a legacy basis. In connection with the combination, we have also realign our reportable segments our former mastercraft segment is now our performance and wake segment our former pontoon segment is now our leisure second and the newly combined chap and revallo brands are reported within our recreation and sport fishing segment as a reminder unless otherwise noted the following commentary is made on a continuing operations basis and all references to specific quarters and periods will be on a fiscal basis because we are changing to a December fiscal year end, today's outlook will cover the six-month transition period from July 2026 through December 2026, which Scott will discuss in greater detail later in the call. With that, I will turn the call over to Brad.
Thank you, Alec, and good morning, everyone. Fiscal 2026 was a defining year for Mastercraft Gold Holdings. Strong execution across our legacy business drove results to significantly outperform expectations despite a challenging macroeconomic and retail environment. We grew net sales, expanded adjusted EBITDA nearly 80%, a margin improvement of more than 500 basis points year over year, and completed the transformational combination with Chaparral and Revolve. These results reflect the durability of our foundation and our discipline execution against the priorities we established at the beginning of the year, which were aligning production with demand, strengthening dealer health, improving operational efficiency, and delivering differentiated innovation that resonates with dealers and consumers. Those actions positioned us to outperform the broader market while building an even stronger foundation for the future. On a legacy basis, fiscal 2026 net sales were $315.6 million, and adjusted EBITDA was $43.8 million. These results exceeded the increased guidance we issued last quarter and demonstrate the earnings power of our legacy business in a challenging market. The Mastercraft brand was at the center of that success. strong retail performance and a successful rollout of the next generation x series drove favorable premium mix strengthened brand momentum and improved profitability this more than offset lower industry volumes and served as the primary driver of growth across our business including the initial contribution from chaparral and roboto Total company net sales were $348.9 million of 22.8% year-over-year. An adjusted EBITDA was $45.6 million of 87.1% year-over-year. Turning to the fourth quarter, our performance was particularly encouraging given the difficult prior year comparison, which benefited from the launch of the ultra-premium X-Star. Against that backdrop, our legacy business delivered 21.5% year-over-year net sales growth and expanded adjusted EBITDA margin 730 basis points to 19.3% from 12.0% in the prior year period. These results reflect the strength of Mastercraft's premium product portfolio, continued momentum across the lineup, healthy dealer inventories, and disciplined cost management. Including the six-week contribution from Chaparral and Robolo, total company fourth quarter net sales were $129.9 million, up 63.4% year-over-year. An adjusted EBITDA was $20.5 million, up 114.9% year-over-year. The new recreation and sport fishing segment contributed $33.3 million of revenue and $1.8 million of adjusted EBITDA during the abbreviated six-week window of ownership. in. We do not believe the segment's initial reported profitability is representative of its underlying earnings power or long-term potential. Scott will provide additional detail on these items shortly. On a consolidated basis, a key reason for our outperformance was disciplined channel management. Dealer health remains a significant competitive advantage for MCBH. Field inventory in our legacy business finished the year down approximately 30% year-over-year, with turns improving to better-than pre-pandemic levels. Chaparral and Robolo also ended the year with lower inventory levels and higher turns. The broader retail environment remained mixed throughout the year. Premium and Core customers remained relatively resilient, while value-oriented customers faced pressure from higher interest rates, inflation, and broader economic uncertainty. Even in that environment, our differentiated products, disciplined execution, and strong dealer health enabled us to outperform the broader market. Mastercraft's retail performance is a clear example of that dynamic. Entering the year, we expected category retail to decline 5% to 10%, with the market finishing slightly lower than our estimated range. We significantly outperformed that expectation with Mastercraft Retail finishing up low single digits and outperforming both the ski weight category and the broader Powerball market. In our Recreation Sport Fishing segment, Rubalo was another standout performer, delivering retail growth in the high single digits and continuing to benefit from strong product momentum within the attractive sport fishing category. Together, Mastercraft and Revolve helped NCBH outperform a broader powerboat industry that declined mid to high single digits. Looking ahead, we continue to plan prudently and currently expect retail market demand to be down approximately 5 to 10 percent over the next six months following current calendar year-to-date trends as we evaluate conditions across the portfolio retail dynamics remain challenged across marine categories especially within the entry-level pontoon and runabout markets consistent with our discipline approach to channel management we continue to expect to align wholesale production with retail demand that assumption is incorporated into the guidance scott will discuss later in the call alongside pipeline management and dealer health differentiated innovation continues to be one of our most important competitive advantages within mastercraft the x series continued to gain momentum throughout the year with the reintroduction of the x23 alongside the x22 and x24 and building on the success of the X-Star, dealer-to-consumer response has been outstanding. The X-Series drove significant revenue and profitability growth throughout both the fourth quarter and full year, and we believe this product expansion has further strengthened our leadership position in the premium speedway category. Within Leisure, we improved segment profitability this year through discipline cost management and operational efficiencies looking ahead to the new model year we have responded directly to dealer feedback by improving performance across the lineup through meaningful enhancements in both in speed design and handling we also introduced the new press conquest se tritune and announced an industry first integration of apple carplay and android auto with on-water navigation directly from the factory. These initiatives improve the ownership experience and provide consumers with compelling reasons to choose our brandings. Within our newly acquired brands, we are encouraged by the product and innovation roadmaps alongside the strength of the existing portfolio. Chaparral recently introduced the all-new SSX40B, expanding the brand's premium outboard bow rider offering separately our stern drive lineup now features the new easy step an innovative water entry design that received a 2026 nmma innovation award rubalo continues to build momentum in the dual console category with products such as the R-277 and new R-237, both filling strategic white space and expanding Robalo's ability to attract incremental customers. As we deepen our understanding of these newly acquired businesses, our approach is clear. Protect what makes each branch strong in its market, invest behind the products and categories where we see the greatest opportunity to create value, and use the scale and capabilities of MCBH to accelerate that value creation. One early example of how we are creating value across the portfolio is the Chaparral Surf platform. We've temporarily paused production of these models while we enhance the technology and overall customer experience. By combining Chaparral's strength in ride, design, and layout with MasterCraft's deep wake as surf expertise, we believe we can deliver an even stronger product offering for consumers and dealers. This is an early example of how we intend to leverage the capabilities of the combined company to drive product innovation and long-term value creation. Since closing the transaction, we've spent significant time with the Chaparral and Robolic teams, dealers, and products. Our conviction in the long-term opportunities created by the combination has only increased these are strong brands with talented teams loyal customers and attractive market positions our integration and synergy efforts are underway with structured work streams in place in the near term we are prioritizing and investing in attractive opportunities to enhance innovation expand deeper relationships with our robust product set share technologies, and leverage manufacturing and sourcing best practices. Our capital allocation priorities remain unchanged. Maintain a strong balance sheet, invest in innovation and growth, which includes synergy work, returning capital to shareholders through share repurchases, and maintaining a disciplined approach to M&A.
Overall, we executed well in a challenging market delivered results that exceeded expectations expanded profitability and completed the transformational acquisition and strengthened the future of mcbh with that i'll turn the call over to scott thanks brad and good morning everyone fiscal 2026 was a strong year was a year of strong execution and meaningful transformation for our company i'll start by reviewing our fourth quarter and full-year results, then provide additional details regarding the impact of the marine price acquisition, and finish with our outlook for the six-month transition period. For the fourth quarter, legacy net sales were $96.6 million, an increase of $17.1 million, or 21.5 cents, compared to the prior year period. The increase was driven by higher volumes of our premium X-series models, discipline pricing, and lower discounts. Including $33.3 million in net sales from Chaparral and Revallo during the six-week ownership period, consolidated fourth quarter net sales were $129.9 million, an increase of $50.4 million, or 63.4%, compared to the prior year period. These same factors impacting net sales also supported strong margin performance across their legacy business. gross margins expanded approximately 690 basis points to 30 percent driven by improved fixed cost absorption on higher unit volumes, lower discounts, and strong operating execution. Including Chaparral and Rimbolo, consolidated gross margins declined 60 basis points compared to the prior year period, primarily reflecting purchase accounting impact associated with the marine products combination. As part of our year-end impairment assessment, we reported a non-cash impairment charge of 10.1 million in our leisure segment related to certain press brand and tangible assets. This charge reflects current conditions within the pontoon category. It is excluded from our adjusted results, has no impact on our liquidity or cash flows. We continue to view pontoons as an attractive long-term category or remain focused on strengthening the segment through disciplined inventory management, targeted product innovation, and improved execution as retail and market conditions stabilized. The non-cash impairment charge together with acquisition-related purchase accounting impact and transaction costs resulted in a gap net loss per quarter. Loss from continuing operations was $7 million or a loss of $0.35 per diluted share compared to income from continuing operations of $5.5 million or $0.33 per diluted share in the prior year period. Due to the extent of the one-time acquisition-related and non-cash items affecting GAAP results this quarter, we believe our adjusted results better reflect the underlying strength and operating performance of the business, which I will cover now. On a legacy basis, adjusted EBITDA quarter was $18.6 million, an increase of $9.1 million, or 95.6%, compared to the prior year period. Adjusted EBITDA margin expanded 730 basis points to 19.3% out from 12% a year ago, reflecting strong performance across our legacy businesses. In the partial period contribution, including the partial period contribution from Chaparral and Balo, consolidated adjusted EBITDA was $20.5 million with an adjusted EBITDA margin of 15.8%. Consolidated adjusted net income was $13.5 million or $0.67 per dilution share compared to $6.6 million, or $0.40 per dilution share a year ago. Turning to the full year, legacy net sales were $315.6 million, up $31.4 million, or 11%, compared to fiscal 2025. Including the impact of Chaparral and Herbala businesses, net sales were $348.9 million, an increase of $64.7 million, or 22.8 percent. Profitability also improved meaningfully for the year. Legacy gross margins expanded 520 basis points to 25.2 percent, supported by the same operating drivers that benefited our fourth quarter results. Including Chaparral and Vallo, consolidating gross margin was 22.9 percent, an increase of 290 basis points compared to fiscal 2025, despite the purchase accounting impacts related to marine products combinations legacy adjusted ebda increased 79.6 percent up 43.8 million compared to 24.4 million in fiscal 2025 with margins expanding 530 basis points to 13.9 percent up from 8.6 percent in the prior year including the partial period contribution from Chaparral and Bolle, consolidated adjusted EBITDA increased 87.1% to $45.6 million. Consolidated adjusted net income was $30.2 million, or $1.76 per diluted share, compared to $15.1 million, or $92 per diluted share, in the prior year. Turning to the balance sheet, remain disciplined and continue to generate cash in a transformational year. We generated $22.3 million of free cash flow for the year after funding $8.1 million of capital expenditures and absorbing transaction-related costs associated with the marine products combination. We ended the year with $43.9 million in cash, no debt outstanding, and full availability under a $75 million revolving credit facility. Before discussing the consolidated outlook, I want to highlight a few items related to Chaparral and Revalo acquisition, including the impact of purchase accounting. In the fourth quarter, we reported $2.8 million for step-up in inventory value, of which $2.6 million was recognized as cost of sales expense in Q4, with the remainder being recognized in Q1. Q4 intangible amortization expense was $2.9 million, including $2.6 million for a short-lived backlog intangible that fully amortized in fiscal year 26. we expect amortization to normalize at approximately 0.6 million per quarter depreciation included in the gross margin was 1.1 million in q4 and is expected to normalize at approximately 2.7 million per quarter a couple items of note on chaperone or ball of volumes versus our prior market recovery and growth assumptions due to delayed retail recovery we are moderating production levels to align wholesale and retail demand which result in holding shipments and average selling prices near our q4 exit rate additionally as brad mentioned we have also temporarily paused production of the chaparral surf series to further enhance the platform while timing of market recovery is delayed our confidence in the long-term opportunity is ground in our proven ability to create value through strong execution and meaningful product innovation now turning to our consolidated results or consolidated outlook as alec mentioned earlier we are transitioning our fiscal year to align with calendar year and today we are providing guidance for the six-month transition period covering july through december 2026. this guidance reflects the combined company including saperell and balo and covers a seemingly low volume period for our business. For the upcoming September quarter, we expect net sales of approximately $147 million, adjusted EBITDA of approximately $16 million, and adjusted earnings per share of approximately $0.40. For the six-month transition period, we expect net sales of between $287 million and $291 million, adjusted EBITDA between $29 million and $32 million, and adjusted earnings per share between 66 cents and 76 cents. We expect capital expenditures were approximately 9 million in the period. These results reflect strong growth from our legacy brands, despite our expectations that the retail involvement environment will decline approximately 5 to 10 percent. Our ability to grow in a down market reflects consistent execution against proven core strategies. The Mastercraft X Series is a clear example of this strategy in action. During the first quarter of the prior year, we paused X-Series production to support dealer sell-through of outgoing models and facilitate a disciplined transition to the next generation lineup. In the upcoming September quarter, all three new X-Series models will be in full production. While this production timing creates an unusual year-over-year comparison, it also positions us with a complete premium product lineup and strong momentum entering the transition period. Looking ahead, we will continue to evaluate market conditions, dealer inventory levels, and product launch timing as we closely align wholesale production with retail demand and focus on executing our strategic priorities. We have the balance sheet and cash flows to invest not only in the synergy opportunities created by the acquisition, but also in our ongoing focus on new differentiated products that will continue to win in the marketplace.
We remain confident in the strength of our portfolio, the long-term earnings power of a combined company, and our ability to create value despite challenging market conditions with that i'll turn it back to brad for closing remarks thanks scott we executed well and delivered results that exceeded our expectations while expanding profitability and broadening our growth platform what gives me confidence is that these results were earned not market driven our teams executed with discipline remained focused on the fundamentals and consistently delivered against our priorities. As a result, we strengthened dealer health, gained retail share, and expanded our platform for future growth. There is real energy and excitement across the organization as we enter our next chapter as a larger, more diversified company. With our five brands, we now have a broader portfolio spanning attractive recreational boating categories, expanded reach across inland and coastal markets, and greater opportunities to serve dealers and customers with differentiated products and a wider range of price points. The macroeconomic and retail environment remains challenging. However, our long-term view and execution-minded focus has not changed. We believe our portfolio of leading brands, established dealer network, strong balance sheet and flexible operating model position us well to navigate near-term uncertainty drive growth and create value as market conditions stabilize i want to thank our team members fever partners suppliers and shareholders for their support this year and once again welcome the chaparral and ribalo teams to the company we are excited about what we are building together and we remain confident in the long-term value creation potential of MCBH. Operator, you may now open the line for questions.
Operator
We will now begin the question and answer session. If you would like to ask a question, please press star 1 to raise your hand. To withdraw your question, press star 1 again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from Craig Kennison with Baird. Craig, please go ahead.
Hey, good morning. Thank you for taking my question. Regarding your guidance for the next six-month sub-period, could you help us unpack the contribution of Chaparral and Ravallo to those results?
Sure. So I guess I'll start by reminding you we are kind of at a low point in the market, and this is also our low season as we go in the next six-month sub-period. But as you think about the results for the six-week period of chaparral or volums, keep in mind they are impacted by first accounting items in that six-week period, most of which is the inventory step-up, which was $2.6 million. So our public gross margins in the K are going to show 0.9% for the gross margins for the Chaparral-involved business for that six-week ownership period. Those margins would actually be 9% without the inventory step-up. The margins are also impacted by higher depreciation as we wrote up all of our fixed assets in the purchase accounting process. So the depreciation in that six-week period is $1.1 million, and that will obviously have an ongoing impact in the future as well but we approximate 2.7 million dollars on a go forward quarterly basis for what the depreciation will run for the chaperone reball businesses now all that ultimately led to an adjusted EBITDA which excludes both the depreciation as well as the inventory step in set up that came in at about 5.5 percent for that six week period as we look forward into that business that I think you can think of the the margins at least for the adjusted EBITDA are going to be somewhere in that same same range on a go-forward basis until we get through some of our synergies and some of the initial investments we're putting into the brands that's very helpful thank you Scott just thinking about the revenue contribution over the next six months embedded in your guidance for those two brands how should we think about that so as they try to say that the the uh my prepared remarks are we're keeping the volumes fairly flat the run rate volume fairly flat and how we exited q4 for that business as well just keep in mind that it was six weeks worth of activity um in that uh fourth quarter period for us but the run rate of that should continue into the uh uh the six the six month or six you know six month transition
theory as well correct which which also really aligns production wholesale with retail generally got it that uh that makes sense and maybe brad if i could just ask you curious um you know any early surprises or challenges associated with marine products i'm sure there are many surprises as you dig in deeper not many i mean the only thing that's really changed from our early assumptions is the retail environment and recovery of the retail environment has just been pushed out some here as we continue to bounce uh at the low part of the market but in general uh on the fundamentals of the business from an addressable market perspective that more than doubles our participation with a wide range of price points now with a larger platform for product channel and even operational leverage, we've been really thrilled with that. We've got active synergy plans in place that we're excited, accelerating value creation there. But in general, our conviction and confidence around this has only increased. Great.
Operator
Your next question comes from Noah Zatzkin with KeyBank Capital Markets.
Please go ahead hi thanks for taking my questions um i guess first um just kind of on the the industry retail commentary um what did you kind of see play out through the quarter and and maybe what are you seeing now um any kind of change in um in retail performance for for you guys or the broader industry as things progressed thanks as i think we mentioned uh that the five to ten percent we're sort of assuming for the industry across really all of our segments is really a reflection of kind of the current calendar year trend that's been going on across our segments.
Some are a little better, some are a little worse in that 5% to 10% range. But we're just assuming that that sort of continues through the rest of the season. Keep in mind, the rest of the six-month period is the low point of retail. So it's harder on a calendar year basis to catch up much. So we We still believe in the quarter as well as for the calendar year, we'll still be in that 5% to 10% range.
That's very helpful. And then maybe just now kind of exiting selling season, just any comments on what you're seeing in terms of inventory positions kind of across the industry and how you're feeling? Thanks.
I do think that over the last two years, the entire industry has been trying to bring down inventory levels coming out of the kind of COVID highs of retail. That certainly has continued. I think the entire industry is healthier than it used to be, and we're certainly in that as well. So I think, as we kind of mentioned, the legacy brands for our pipeline are down about 20% or 30% on the legacy side and about 20% including our new Chaparral and Revolve brand. So we think we've done what we need to do to bring down inventories. And as we've kind of tried to say, as you think forward, we're going to do a lot better trying to align wholesale or retail and not really focus on trying to get any further pipeline reductions unless the market just continues to go down and we have to follow the market.
Also, Noah, just to build on that a little bit on the positive front, as Scott mentioned, dealer inventory is clean. Promotional intensity is healthier than it's been. Premium customers remain engaged in our brands, and boating participation supports the long term. So although we're managing relatively conservatively today through this period with retail recovery delay, when that broadens, we're prepared for upside there. So that delayed retail recovery is really a timing issue in our view, not a change in any long-term fundamentals in the marine space.
Operator
Your next question comes from Gregory Miller with Truist Securities. Please go ahead.
Thanks. Good morning, Brad and Scott. You mentioned a number of items that you're working on in the recreation and sport fishing segment, innovation, dealer relations, manufacturing. I thought to focus on dealer relations, and I'm just curious what changes you're working in implementing post-acquisition.
Well, across the board, as we accelerate value creation of a larger group here with presence, with five brands and in all these categories, stories um first of all let me just say we're protecting what makes our brand special and that includes chaparral and ribalo keeping them strong while we use scale and process and cross-company expertise uh to drive even more value so so with synergy plans in general as it relates to dealers You can imagine with that at scale, product diversity, brand leverage, there's all kinds of discussions happening. We've already seen successes of dealers picking up new brands within our portfolios, of which there are also numerous other discussions ongoing as that unfolds. Every one of those conversations creates value opportunity for the future. it's one of our core synergy items that we're deeply engaged in right now today and that will continue to unfold over time okay thanks and i think you may have addressed this a little bit or in the call already but from a manufacturing or plant operations uh context have you made any changes to the georgia plant um since you finished the acquisition well the teams are working together on all kinds of best practice sharing and that goes in in all directions it's not just mastercraft injection into the georgia facility there's best practices there that we're applying in reverse there's a handful of high priority operational items at play there we have structured integration and synergy teams very disciplined working through that and in time that that will prove out as we look at and that also includes purchasing synergies as well on the sourcing side thank you very much there are no further questions at this time this concludes today's call.
Operator
Thank you for attending. You may now disconnect.
