Massimo Group, the manufacturer and distributor of powersports vehicles and pontoon boats, reported its financial and operational results for the fourth quarter and fiscal year that ended December 31, 2023.

Fourth Quarter and 2024 Operational Highlights

  • Closed a $5.85 million IPO listing on the Nasdaq Capital Market under the “MAMO” symbol.
  • Q4 2023 revenues were up 58.5 percent to $39.6 million from $25.0 million in Q4 2022.
  • FY 2023 revenues increased 32.9 percent to $115.0 million from $86.5 million in FY 2022.
  • FY 2023 gross profit increased 61.7 percent to $35.9 million from $22.2 million in FY 2022.
  • FY 2023 gross margin grew 550 basis points to 31.2 percent compared to 25.7 percent in FY 2022.
  • FY 2023 net income increased 150 percent to $10.4 million from $4.2 million in FY 2022. 

Massimo Motor

  • Added two new models to its 2024 ATV lineup, the Massimo MSA 600 and MSA 1000 ATVs, providing customers with new options for work or on the trail.
  • Unveiled new 2024 1000 UTV, with a 83hp EFI engine.
  • Hired Dave McMahon as a media advisor, bringing extensive power sports industry experience to elevate the brand at the dealership level.

Massimo Marine

  • Launched the 2024 25-foot Ultra Lounger Tritoon
  • Debut in the yacht market with a 72-foot vessel with quarters for guests/crew, a living area, and sun deck.
  • Launched the 2024 30-foot Double Decker Tritoon in five Mercury motor configurations.

“The fourth quarter of 2023 and early 2024 were highlighted by strong sales for our diversified and comprehensive product portfolio of powersports vehicles and pontoon boats, the launch of new models, and our debut as a public company on Nasdaq,” said David Shan, founder, chairman & CEO. 

“Sales of UTVs, ATVs and electric bikes increased 32.4 percent to $103.3 million and pontoon boats were up 37.9 percent to $11.7 million in 2024. Sales of powersports vehicles were driven by higher volumes and lower sales returns, and pontoon boats were fueled by an increase in post-pandemic demand supported by advertising and promotion of our Massimo Marine brand. 

“The increase in Group sales was followed by significant margin improvement as the effects of the pandemic in 2022 subsided, including a decline in global container freight costs.

“During the fourth quarter, while we focused on holiday order fulfillment, we also introduced exciting new products to the brand. Massimo Motor added two all-new models to its 2024 ATV lineup, geared toward riders who seek a high-quality vehicle at an affordable price. These ATVs are built with powerful 4-stroke engines, electronic fuel injection and on- demand 4WD with locking differential and are now shipping to dealerships nationwide. 

“We also launched an all-new 2024 1000 UTV with a 997cc, 4-stroke V-twin engine that makes for a confident ride whether at work or at play. We also continued marketing efforts to promote our brand at industry-leading events and expos around the country.

“For our Massimo Marine segment, we launched the all-new 2024 25-Foot Ultra Lounger Tritoon, available only in a tritoon configuration that features three full-length tubes and a pair of 5-inch lifting strakes on all three tubes. The all-new 2024 30-Foot Double Decker Tritoon comes in variety of engine configurations to allow for optimal speed, performance and pleasurable ride experience. These new models are the result of consumer demands and trends, such as the Double Decker’s aluminum slide with a waterspout that comes factory-equipped.

“Operationally, the closing of our $5.85 million IPO and listing of our shares on the Nasdaq represent a significant milestone to support our growth. Being listed on a national exchange increases corporate visibility, improves liquidity, and raises awareness of Massimo in the financial markets. 

“To support this growth, we hired Dave McMahon as a media advisor, bringing expertise of the powersports dealership landscape to contribute to the Massimo portfolio of brands and products, including Massimo Motor, Massimo Marine, and Massimo Electric.

“Looking ahead, with support from our IPO, we will continue to advance initiatives to improve gross margins while continuing to grow our revenue. We expect to expand our footprint with new distribution centers in California and the Southeast of the U.S. to reduce the time and expense associated with delivering products, replacement parts and accessories to customers, distributors, and retailers. We are working to expand and diversify our supplier base to drive down our product costs, reduce supply chain risks and improve quality control. Combined with new investments in infrastructure at our 286,000-square-foot assembly facility in Texas to increase operating efficiencies, we believe we can further enhance margins. We also believe that these investments position us as we continue to expand and diversify our product line with new models and capabilities. 

“In summary, the last several months were a time of foundation building for the year ahead—from which our vision to enter the top-tier band of the powersports vehicles and boats industry will emerge. I look forward to continued execution in the months ahead as we strive to create long-term value for our shareholders,” concluded Shan.

Fourth Quarter 2023 Financial Results
For the three months ended December 31, 2023, revenues increased by $14.6 million, or 58.5 percent, to $39.6 million, compared to $25.0 million in the prior year period. The fourth quarter revenue increase was due to the company’s expansion at major chain stores, its dealer network and the reduction of impacts felt from the andemic on manufacturing and the supply chain from 2022.

Revenue from sales of UTVs, ATVs and electric bikes increased by $14.6 million, or 63.9 percent, from $22.9 million in the fourth quarter of 2022 to $37.5 million in the fourth quarter of 2023. The increase in revenue was attributable to a decrease in sales return. 

Starting from 2023, the company reduced the sales return rate by changing customer type and adjusting its customer composition with different return policies. For example, the company gradually shifted sales from big box with liberal return policies such as Costco, to big box with no or limited return policies such as Tractor Supply Co.

Revenue from the sale of Pontoon Boats was $2.0 million and $2.0 million in the fourth quarter of 2022 and 2023, respectively. Sales of Pontoon Boats remained comparable for both quarters.

Gross profit increased by $5.3 million, or 77.8 percent, from $6.8 million in the fourth quarter of 2022 to $12.1 million in the fourth quarter of 2023. Gross profit margin was 30.7. percent in the fourth quarter of 2023, as compared with 27.4 percent in the prior year quarter. The increase in the gross profit margin was primarily attributable to higher net sales partly due to decreased return and the lower cost of sales due to reduced freight costs in the fourth quarter of 2023 compared to the previous year.

Cost of revenue on UTVs, ATVs and e-bikes increased by $9.8 million, or 60.0 percent, from $16.5 million in the fourth quarter of 2022 to $26.3 million in 2023, and gross profit increased by $4.8 million, or 73.9 percent, from $6.4 million in the fourth quarter of 2022 to $11.2 million in 2023. 

Gross profit margin increased by 1.7 percent from 28.1 percent in the fourth quarter of 2022 to 29.9 percent in fiscal 2023. The increased cost of revenue was in line with the increase in sales. The increase in gross profit margin was mainly due to a decline in global container freight since mid-2022.

The cost of revenue on Pontoon Boats decreased by $0.6 million, or 34.8 percent, from $1.7 million in the fourth quarter of 2022 to $1.1 million in the fourth quarter of 2023, and gross profit increased by $0.5 million, or 142.8 percent from $0.4 million in the fourth quarter of 2022 to $0.9 million in the fourth quarter of 2023. Gross profit margin increased by 27.3 percent from 18.5 percent in the fourth quarter of 2022 to 45.9 percent in the fourth quarter 2023.

Selling and marketing expenses decreased by $0.04 million, or 1.4 percent from $3.3 million in the fourth quarter of 2022 to $3.2 million in the fourth quarter of 2023. Selling and marketing expenses in the fourth quarter of 2023 remained stable compared to the fourth quarter of 2022.

General and administrative expenses increased by $1.1 million, or 35.6 percent from $3.1 million in the fourth quarter of 2022 to $4.2 million in the fourth quarter of 2023. The increase was mainly due to increased salaries, benefits and professional fees.

Total operating expenses increased by 16.6 percent to $7.4 million for the fourth quarter of 2023, compared to $6.4 million in the prior year’s fourth quarter.

Net income for the three months ended December 31, 2023, was $3.8 million, or $0.10 per basic and diluted share, as compared to net income of $54,700, or $0.00 per basic and diluted share, in the three months ended December 31, 2022.

Fiscal Year 2023 Financial Results
Revenues increased by $28.5 million, or 32.9 percent, from $86.5 million in fiscal 2022 to $115.0 million in fiscal 2023. The revenue increase was due to Massimo’s expansion at major chain stores and its dealer network.

Revenue from UTVs, ATVs and e-bike sales increased by $25.3 million, or 32.4 percent, from $78.0 million in fiscal 2022 to $103.3 million in fiscal 2023. The increase was primarily due to higher sales volume in fiscal 2023 compared to fiscal 2022 and decreased sales return.

Revenue from the sale of Pontoon Boats increased by $3.2 million, or 37.9 percent, from $8.5 million in fiscal 2022 to $11.7 million in fiscal 2023. The increase in revenue was primarily due to demand in the Pontoon Boat market after stock supply returned to normal levels after the pandemic and more resources on advertising and promotion of the Massimo Marine brand.

Gross profit increased by $13.7 million, or 61.7 percent, from $22.2 million in fiscal 2022 to $35.9 million in fiscal 2023. Gross profit margin was 31.2 percent in fiscal 2023 compared to 25.7 percent in fiscal 2022. The increase of 5.5 percent in the gross profit margin was primarily attributable to higher net sales partly due to decreased return and the lower cost of sales.

Cost of revenue on UTVs, ATVs and e-bikes increased by $12.4 million, or 21.7 percent, from $57.4 million in fiscal 2022 to $69.9 million in fiscal 2023 and gross profit increased by $12.8 million, or 62.4 percent, from $20.6 million in fiscal 2022 to $33.4 million in fiscal 2023. 

Gross profit margin increased by 6.0 percent, from 26.4 percent in fiscal 2022 to 32.4 percent in fiscal 2023. The increased cost of revenue was in line with the increase in sales. The increase in gross profit margin was primarily due to a decline in global container freight since mid-2022.

The cost of revenue on Pontoon Boats increased by $2.4 million, or 34.3 percent, from $6.9 million in fiscal 2022 to $9.2 million in fiscal 2023, and gross profit increased by $0.9 million, or 53.4 percent, from $1.6 million in fiscal 2022 to $2.5 million in fiscal 2023. Gross profit margin increased by 2.1 percent, from 19.0 percent in fiscal 2022 to 21.1 percent in fiscal 2023.

General and administrative expenses increased by $4.3 million, or 47.9 percent, from $8.9 million in fiscal 2022 to $13.2 million in fiscal 2023. The increase was mainly due to increased salaries, benefits and professional fees.

Total operating expenses increased 30.6 percent to $23.0 million for fiscal 2023, compared to $17.6 million in fiscal 2023.

Net income for fiscal 2023 was $10.4 million, or $0.26 per basic and diluted share, compared to net income of $4.2 million, or $0.08 per basic and diluted share, in fiscal 2022. The increase was primarily attributable to the increased revenues and gross profit discussed above.

Cash and cash equivalents totaled $0.8 million on December 31, 2023, compared to $0.9 million on December 31, 2022. On April 4, 2024, the company closed an initial public offering with aggregate gross proceeds before deducting underwriting discounts, commissions, and other offering expenses payable by Massimo of $5.85 million.

Net cash provided by operating activities increased to $10.9 million in fiscal year 2023 compared to $0.6 million in fiscal year 2022, primarily due to the increase in net income.

Image courtesy Massimo Group