Massimo reports 32 percent Q2 gain
Massimo Group revenues increased 32.4 percent year-over-year to $35.4 million in the second quarter, compared to $26.7 million in the prior-year Q2 period, according to the company. The increase in revenue was primarily due to the combined effect of rising demand in the U.S. ATV and UTV markets and a modified sales strategy.
The manufacturer and distributor of powersports vehicles and pontoon boats noted that gross profit increased 41.9 percent year-over-year to $11.5 million in Q2 from $8.1 million in the year-ago Q2 period.
“During the second quarter, we focused on strategic expansions in production, distribution and products to support ongoing revenue momentum. With significant top and bottom-line growth on strong sales and margin improvement, we continue to build manufacturing capacity aimed at enhancing flexibility and increasing annual production. We continued to add new distribution partners and retailers to increase our national footprint and drive sales across our existing and new diversified product portfolio.”
– David Shan, founder, chairman and CEO of the Massimo Group
Segment growth: ATV, UTV, E-Bike
Revenue from sales of UTVs, ATVs, and E-bikes increased 53.3 percent to $34.2 million in the second quarter from $22.3 million in the second quarter of fiscal 2023. The increase in revenue was due to the expansion into larger retail stores in the U.S. and a shift in sales strategy, mainly focused on in-store sales, which generally involve larger volumes and fewer returns.
The cost of revenue on UTVs, ATVs and E-bikes increased 55.7 percent to $23.0 million in the second quarter from $14.8 million in the second quarter last year, and the gross profit increased 48.6 percent, from $7.6 million in Q2 2023 to $11.2 million in Q2 this year. The increase in the cost of revenue was in line with the increase in sales.
The gross margin decreased by 110 basis points to 32.8 percent in the second quarter. The slight decrease was primarily due to a rise in global container freight in the second quarter of this year. Freight costs increased in the second quarter compared with Q2 last year.
Pontoons
Second-quarter revenue from pontoon boat sales decreased 73.5 percent to $1.2 million from $4.4 million in the 2023 second quarter, reportedly due to the company’s shift from retailing to dealer sales starting in its fiscal year 2024. Dealers have experienced high rejection rates at floorplan financing providers such as Northpoint, which is consistent with the industry-wide trend.
The cost of revenue on pontoon boats decreased 76.5 percent to $0.9 million in the second quarter from $3.9 million in the 2023 second quarter. Gross profit decreased 51.6 percent to $0.3 million in Q2 from $0.5 million in Q2 2023.
Gross margin increased 10.2 percentage points to 22.4 percent of sales in the second quarter, compared to 12.3 percent of sales in the second quarter of fiscal 2023. The increased gross margin was primarily due to the company’s shift to selling higher-margin models of pontoon boats.
“Several production initiatives during the quarter are positioning us to further expand output levels each month,” Shan adds. “A new expansion has added 90,000 sq. ft. to our manufacturing facility in Garland, Texas, to support increased production across motor and marine product verticals. At this facility, we are also launching a new automated vehicle assembly robot line that is expected to be installed in the coming weeks. This automation is expected to improve efficiency by 50 percent and enhance safety for the production of ATV and UTV vehicle lines.”
