By Kailyn Rhone

Shares of Massimo Group fell after the company swung to a third-quarter loss and lower revenue due to industry-wide challenges and pressure on pontoon boat sales.

The stock dropped 10% to $3.72 in midday trading Friday. For the week, shares are down 15%.

Before the market opened Friday, the manufacturer and distributor of powersports vehicles and pontoon boats posted a net loss of $2.50 million, or six cents a share, compared with a profit of $3.96 million, or 10 cents a share, in the last year's quarter.

Massimo incurred a one-time charge of $3.6 million in the quarter due to ongoing litigation, which is currently under appeal. The Garland, Texas, company said its net loss would be positive without this charge.

Revenue fell 14.4% to $25.6 million from $29.9 million a year earlier, led by reduced spending on the company's luxury boats and vehicles.

Revenue from sales of pontoon boats dropped 82.5% to around $500,000 from $3.0 million a year earlier. Sales of UTVs, ATVs and e-bikes also fell 6.9% to $25.1 million from $27 million a year earlier. The decline was due to an industry-wide downturn, driven by high interest rates and inflation.

Selling expenses rose 24.9% to $2.6 million from $2.1 million in last year's quarter, due to higher shipping and handling fees, along with a warranty expense. General and administrative expenses grew 43.4% to $3.9 million from $2.7 million a year earlier, driven by increased salaries, benefits, travel, and rent expenses.

Founder, Chairman, and Chief Executive David Shan said the company is confident for growth in the first half of 2025 with the introduction of new products and its distribution relationships.

Write to Kailyn Rhone at kailyn.rhone@wsj.com

(END) Dow Jones Newswires

November 15, 2024 11:43 ET (16:43 GMT)

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