UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☑~~QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934~~


☑	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: ~~December~~March 31, ~~2017~~2024


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

☐~~TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934~~

For the transition period from to

Commission File Number 001-37502

~~MCBC~~

MASTERCRAFT BOAT HOLDINGS, INC.

(Exact name of registrant as specified in its charter)


Delaware		06-1571747
(State or Other Jurisdiction		(I.R.S. Employer
of Incorporation or Organization)		Identification No.)

100 Cherokee Cove Drive, Vonore, TN37885

(Address of Principal Executive Office) (Zip Code)

~~(423)~~ (423) 884-2221

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading

Symbol(s)

Name of each exchange on which registered

Common Stock

MCFT

NASDAQ

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.☑Yes☐ No

~~☑ Yes ☐ No~~

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate website, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulation S-T (§~~229.405~~232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit ~~and post~~ such files).☑Yes☐ No

☑ ~~Yes ☐ No~~

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☐	Accelerated filer		☑
~~Large accelerated filer~~	☐		~~Accelerated filer~~	☑
Non-accelerated filer	☐	Smaller reporting company		☐
~~Non-accelerated filer~~	~~☐ (Do not check if a smaller reporting company)~~		~~Smaller reporting company~~	☐
				
Emerging growth company	☑☐			
				

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☑☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).☐ Yes ☑ No

~~☐ Yes~~ ☑ No

As of ~~February 5, 2018,~~May 3, 2024, there were ~~18,679,131~~16,981,048 shares of the Registrant’s common stock, par value $0.01 per share, issued and outstanding.

~~Table of Contents~~

TABLE OF CONTENTS


		~~Page~~
		Page

PART I	FINANCIAL INFORMATION
Item 1.	Financial Statements
~~PART I~~	~~FINANCIAL INFORMATION~~
~~Item 1.~~	~~Financial Statements~~
	Unaudited Condensed Consolidated Statements of Operations	4
	Unaudited Condensed Consolidated Balance Sheets	5
	Unaudited Condensed Consolidated ~~Statement~~Statements of ~~Stockholders’~~ Equity	6
	Unaudited Condensed Consolidated Statements of Cash Flows	7
	Notes to Unaudited Condensed Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22 18
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	34
~~Item 4.~~	~~Controls and Procedures~~	35
		26
~~PART II~~Item 4.	~~OTHER INFORMATION~~Controls and Procedures	26

~~Item 1.~~PART II	~~Legal~~OTHER INFORMATION	35
Item ~~1A.~~1.	~~Risk Factors~~Legal Proceedings	35 27
Item 2.1A.	Risk Factors	27
Item 2.	Unregistered Sales of Securitiesand Use of Proceeds	36 27
Item 3.	Defaults Upon Senior Securities	36 28
Item 4.	Mine Safety Disclosures	36 28
Item 5.	Other Information	36 28
Item 6.	Exhibits, Financial Statement Schedules	37
		29

~~SIGNATURES~~		39
SIGNATURES		30

~~Table of Contents~~

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This ~~quarterly report~~Quarterly Report on Form 10-Q contains certain “forward-looking statements” within the meaning of the federal securities laws. WeThese forward-looking statements can generally be identified by the use of statements that include words such as “could,” “may,” “might,” “will,” “expect,” “likely,” “believe,” “continue,” “anticipate,” “estimate,” “intend,” “plan,” “project” and other similar ~~expressions to identify some but not all forward-looking statements and include statements in this quarterly report on Form 10-Q concerning our pipeline of new models;~~

our ability to continue our operating momentum, capture additional market share and deliver continued growth; expectations regarding driving margin expansion, sales increases and organic growth; the successful integration of Nautic Star, LLC into our business; our fiscal 2018 outlook and key growth initiatives.words or phrases. Forward-looking statements involve estimates and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements.

The forward-looking statements contained in this ~~quarterly report~~Quarterly Report on Form 10-Q are based on assumptions that we have made ~~in light of~~considering our industry experience and our perceptions of historical trends, current conditions, expected future developments and other important factors we believe are appropriate under the circumstances. As you read and consider this ~~quarterly report~~Quarterly Report on Form 10-Q, you should understand that these statements are not guarantees of performance or results. They involve risks, uncertainties (many of which are beyond our control) and assumptions. Although we believe that these forward-looking statements are based on reasonable assumptions, you should be aware that many important factors could affect our actual operating and financial performance and cause our performance to differ materially from the performance anticipated in the forward-looking statements, including but not limited to the following: changes in interest rates, the potential effects of supply chain disruptions and production inefficiencies, general economic conditions, demand for our products, inflation, changes in consumer preferences, competition within our industry, our ~~reliance on our~~ability to maintain a reliable network of ~~independent~~ dealers, our ability to manage our manufacturing levels and our ~~large~~ fixed cost base, the successful introduction of our new products, geopolitical conflicts, such as the conflict between Russia and Ukraine, the conflict in the Gaza Strip and general unrest in the Middle East, financial institution disruptions and the other important factors described under the caption “Risk Factors” in ~~this quarterly report on Form 10-Q and~~ our Annual Report on Form 10-K for the fiscal year ended June 30, ~~2017,~~2023, filed with the Securities and Exchange Commission ~~(the “SEC”~~(“SEC”) on ~~September 7, 2017~~August 30, 2023 (our “2023 Annual Report”) and in ~~our~~this Quarterly Report on Form ~~10-Q for the fiscal quarter ended October 1, 2017, filed with the SEC on November 13, 2017.~~10-Q. Should one or more of these risks or uncertainties materialize, or should any of these assumptions prove incorrect, our actual operating and financial performance may vary in material respects from the performance projected in these forward-looking statements.

Further, any forward-looking statement speaks only as of the date on which it is made, and except as required by law, we undertake no obligation to update any forward-looking statement contained in this ~~quarterly report~~Quarterly Report on Form 10-Q to reflect events or circumstances after the date on which it is made or to reflect the occurrence of anticipated or unanticipated events or circumstances. New important factors that could cause our business not to develop as we expect may emerge from time to time, and it is not possible for us to predict all of them.

~~Table of Contents~~

~~MCBC~~MASTERCRAFT BOAT HOLDINGS, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

~~(Dollars in thousands, except share and per share data)~~


	Three Months Ended						Nine Months Ended
	March 31,			April 2,			March 31,			April 2,
(Dollar amounts in thousands, except per share data)	2024			2023			2024			2023
NET SALES	$	95,708		$	166,776		$	299,406		$	495,480
COST OF SALES		77,360			124,178			240,493			368,682
GROSS PROFIT		18,348			42,598			58,913			126,798
OPERATING EXPENSES:
Selling and marketing		3,924			3,927			10,538			10,748
General and administrative		9,978			9,156			27,446			26,874
Amortization of other intangible assets		450			489			1,362			1,467
Total operating expenses		14,352			13,572			39,346			39,089
OPERATING INCOME		3,996			29,026			19,567			87,709
OTHER INCOME (EXPENSE):
Interest expense		(762	)		(695	)		(2,494	)		(1,923	)
Interest income		1,398			1,195			4,164			1,967
INCOME BEFORE INCOME TAX EXPENSE		4,632			29,526			21,237			87,753
INCOME TAX EXPENSE		806			6,744			4,408			20,353
NET INCOME FROM CONTINUING OPERATIONS		3,826			22,782			16,829			67,400
LOSS FROM DISCONTINUED OPERATIONS, NET OF TAX (Note 3)		(71	)		(272	)		(993	)		(21,139	)
NET INCOME	$	3,755		$	22,510		$	15,836		$	46,261

NET INCOME (LOSS) PER SHARE:
Basic
Continuing operations	$	0.23		$	1.30		$	0.99		$	3.80
Discontinued operations		(0.01	)		(0.02	)		(0.06	)		(1.19	)
Net income	$	0.22		$	1.28		$	0.93		$	2.61

Diluted
Continuing operations	$	0.23		$	1.28		$	0.98		$	3.78
Discontinued operations		(0.01	)		(0.01	)		(0.05	)		(1.19	)
Net income	$	0.22		$	1.27		$	0.93		$	2.59

WEIGHTED AVERAGE SHARES USED FOR COMPUTATION OF:
Basic earnings per share		16,844,440			17,559,920			17,003,616			17,725,208
Diluted earnings per share		16,965,624			17,748,910			17,093,958			17,851,655

Three Months Ended

Six Months Ended


December 31, 2017

January 1, 2017

December 31, 2017

January 1, 2017


NET SALES

$
78,435

$
51,134

$
143,484

$
111,823

COST OF SALES

58,501

36,848

105,387

79,728

GROSS PROFIT

19,934

14,286

38,097

32,095

OPERATING EXPENSES:

Selling and marketing

3,672

2,444

6,409

4,498

General and administrative

4,955

4,776

9,290

8,869

Amortization of intangible assets

525

27

552

54

Total operating expenses

9,152

7,247

16,251

13,421

OPERATING INCOME

10,782

7,039

21,846

18,674

OTHER EXPENSE:

Interest expense

1,139

512

1,630

1,123

INCOME BEFORE INCOME TAX EXPENSE

9,643

6,527

20,216

17,551

INCOME TAX EXPENSE

1,634

2,496

5,161

6,537

NET INCOME

$
8,009

$
4,031

$
15,055

$
11,014

EARNINGS PER COMMON SHARE:

Basic

$
0.43

$
0.22

$
0.81

$
0.59

Diluted

$
0.43

$
0.22

$
0.81

$
0.59

WEIGHTED AVERAGE SHARES USED FOR COMPUTATION OF:

Basic earnings per share

18,619,834

18,592,936

18,617,467

18,592,372

Diluted earnings per share

18,702,352

18,605,078

18,694,489

18,598,841

~~The notes~~Notes to Unaudited Condensed Consolidated Financial Statements form an integral part of the condensed consolidated financial statements.

~~Table of Contents~~

~~MCBC~~MASTERCRAFT BOAT HOLDINGS, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

~~(Dollars in thousands, except share and per share data)~~


	March 31,		June 30,
(Dollar amounts in thousands, except per share data)	2024		2023
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	22,509	$	19,817
Held-to-maturity securities (Note 4)		83,183		91,560
Accounts receivable, net of allowance of $96 and $122, respectively		13,473		15,741
Inventories, net (Note 5)		41,432		58,298
Prepaid expenses and other current assets		14,414		10,083
Total current assets		175,011		195,499
Property, plant and equipment, net (Note 6)		79,593		77,921
Goodwill (Note 7)		28,493		28,493
Other intangible assets, net (Note 7)		34,100		35,462
Deferred income taxes		14,377		12,428
Deferred debt issuance costs, net		306		304
Other long-term assets		9,002		3,869
Total assets	$	340,882	$	353,976
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Accounts payable		15,216		20,391
Income tax payable		1,022		5,272
Accrued expenses and other current liabilities (Note 8)		66,164		72,496
Current portion of long-term debt, net of unamortized debt issuance costs (Note 10)		4,371		4,381
Total current liabilities		86,773		102,540
Long-term debt, net of unamortized debt issuance costs (Note 10)		45,982		49,295
Unrecognized tax positions		8,174		7,350
Other long-term liabilities		2,855		2,702
Total liabilities		143,784		161,887
COMMITMENTS AND CONTINGENCIES
EQUITY:
Common stock, $.01 par value per share — authorized, 100,000,000 shares; issued and outstanding, 17,018,448 shares at March 31, 2024 and 17,312,850 shares at June 30, 2023		170		173
Additional paid-in capital		65,072		75,976
Retained earnings		131,656		115,820
MasterCraft Boat Holdings, Inc. equity		196,898		191,969
Noncontrolling interest		200		120
Total equity		197,098		192,089
Total liabilities and equity	$	340,882	$	353,976

December 31,

June 30,

2017

2017

ASSETS

CURRENT ASSETS:

Cash and cash equivalents

$
6,250

$
4,038

Accounts receivable — net of allowances of $61 and $82, respectively

1,917

3,500

Inventories — net

18,283

11,676

Prepaid expenses and other current assets

3,021

2,438

Total current assets

29,471

21,652

Property, plant and equipment — net

19,533

14,827

Intangible assets — net

52,090

16,643

Goodwill

66,818

29,593

Deferred debt issuance costs — net

428

481

Other

302

125

Total assets

$
168,642

$
83,321

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:

Accounts payable

$
12,800

$
11,008

Income tax payable

2,413

780

Accrued expenses and other current liabilities

27,446

21,410

Current portion of long term debt, net of unamortized debt issuance costs

5,072

3,687

Total current liabilities

47,731

36,885

Long term debt, net of unamortized debt issuance costs (Note 8)

89,905

30,790

Deferred income taxes

266

953

Unrecognized tax positions

3,439

2,932

Total liabilities

141,341

71,560

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY:

Common stock, $.01 par value per share — authorized, 100,000,000 shares; issued and outstanding, 18,679,131 shares at December 31, 2017 and 18,637,445 shares at June 30, 2017

187

186

Additional paid-in capital

113,429

112,945

Accumulated deficit

(86,315)

(101,370)

Total stockholders' equity

27,301

11,761

Total liabilities and stockholders' equity

$
168,642

$
83,321

~~The notes~~Notes to Unaudited Condensed Consolidated Financial Statements form an integral part of the condensed consolidated financial statements.

~~Table of Contents~~

~~MCBC~~MASTERCRAFT BOAT HOLDINGS, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED ~~STATEMENT~~STATEMENTS OF ~~STOCKHOLDERS’~~ EQUITY

~~(Dollars in thousands, except share and per share data)~~


							Additional					MasterCraft Boat
	Common Stock						Paid-in			Retained		Holdings,			Noncontrolling
(Dollar amounts in thousands)	Shares			Amount			Capital			Earnings		Inc. Equity			Interest		Total
Balance at June 30, 2023		17,312,850		$	173		$	75,976		$	115,820	$	191,969		$	120	$	192,089
Share-based compensation activity		185,055			—			(683	)		—		(683	)		—		(683	)
Repurchase and retirement of common stock		(241,764	)		(2	)		(5,783	)		—		(5,785	)		—		(5,785	)
Capital contribution from noncontrolling interest		—			—			—			—		—			80		80
Net income		—			—			—			6,195		6,195			—		6,195
Balance at October 1, 2023		17,256,141			171			69,510			122,015		191,696			200		191,896
Share-based compensation activity		(8,117	)		1			8			—		9			—		9
Repurchase and retirement of common stock		(214,219	)		(2	)		(4,458	)		—		(4,460	)		—		(4,460	)
Net income		—			—			—			5,886		5,886			—		5,886
Balance at December 31, 2023		17,033,805			170			65,060			127,901		193,131			200		193,331
Share-based compensation activity		58,205			1			1,582			—		1,583			—		1,583
Repurchase and retirement of common stock		(73,562	)		(1	)		(1,570	)		—		(1,571	)		—		(1,571	)
Net income		—			—			—			3,755		3,755			—		3,755
Balance at March 31, 2024		17,018,448		$	170		$	65,072		$	131,656	$	196,898		$	200	$	197,098


							Additional					MasterCraft Boat
	Common Stock						Paid-in			Retained		Holdings,			Noncontrolling
	Shares			Amount			Capital			Earnings		Inc. Equity			Interest		Total
Balance at June 30, 2022		18,061,437		$	181		$	96,584		$	46,883	$	143,648		$	—	$	143,648
Share-based compensation activity		128,040			1			649			—		650			—		650
Repurchase and retirement of common stock		(191,360	)		(2	)		(4,176	)		—		(4,178	)		—		(4,178	)
Net income		—			—			—			4,068		4,068			—		4,068
Balance at October 2, 2022		17,998,117			180			93,057			50,951		144,188			—		144,188
Share-based compensation activity		2,466			—			745			—		745			—		745
Repurchase and retirement of common stock		(224,284	)		(2	)		(4,792	)		—		(4,794	)		—		(4,794	)
Net income		—			—			—			19,683		19,683			—		19,683
Balance at January 1, 2023		17,776,299			178			89,010			70,634		159,822			—		159,822
Share-based compensation activity		5,733			—			883			—		883			—		883
Repurchase and retirement of common stock		(210,150	)		(2	)		(7,066	)		—		(7,068	)		—		(7,068	)
Net income		—			—			—			22,510		22,510			—		22,510
Balance at April 2, 2023		17,571,882		$	176		$	82,827		$	93,144	$	176,147		$	—	$	176,147

Additional






Common Stock

Paid-in

Accumulated

Shares

Amount

Capital

Deficit

Total

Balance at June 30, 2017

18,637,445

$
186

$
112,945

$
(101,370)

$
11,761

Equity-based compensation activity

41,686

1

484

—

485

Net income

—

—

—

15,055

15,055

Balance at December 31, 2017

18,679,131

$
187

$
113,429

$
(86,315)

$
27,301

~~The notes~~Notes to Unaudited Condensed Consolidated Financial Statements form an integral part of the condensed consolidated financial statements.

~~Table of Contents~~

~~MCBC~~MASTERCRAFT BOAT HOLDINGS, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

~~(Dollars in thousands, except share and per share data)~~


	Nine Months Ended
	March 31,			April 2,
(Dollar amounts in thousands)	2024			2023
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	15,836		$	46,261
Loss from discontinued operations, net of tax		993			21,139
Net income from continuing operations		16,829			67,400
Adjustments to reconcile net income from continuing operations to net cash provided by operating activities:
Depreciation and amortization		8,327			7,833
Share-based compensation		2,531			2,892
Unrecognized tax benefits		824			111
Deferred income taxes		(1,949	)		7,194
Amortization of debt issuance costs		192			172
Changes in certain operating assets and liabilities		(1,737	)		21,610
Other, net		(2,094	)		153
Net cash provided by operating activities of continuing operations		22,923			107,365
Net cash used in operating activities of discontinued operations		(603	)		(2,403	)
Net cash provided by operating activities		22,320			104,962

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment		(12,622	)		(18,871	)
Purchases of investments		(120,277	)		(83,509	)
Maturities of investments		130,053			10,000
Other, net		5			—
Net cash used in investing activities of continuing operations		(2,841	)		(92,380	)
Net cash used in investing activities of discontinued operations		—			(501	)
Net cash used in investing activities		(2,841	)		(92,881	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on long-term debt		(3,375	)		(2,250	)
Repurchase and retirement of common stock		(11,728	)		(15,972	)
Other, net		(1,684	)		(609	)
Net cash used in financing activities of continuing operations		(16,787	)		(18,831	)
NET CHANGE IN CASH AND CASH EQUIVALENTS		2,692			(6,750	)

CASH AND CASH EQUIVALENTS — BEGINNING OF PERIOD		19,817			34,203
CASH AND CASH EQUIVALENTS — END OF PERIOD	$	22,509		$	27,453
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash payments for interest, net of amounts capitalized	$	2,259		$	1,773
Cash payments for income taxes		9,684			6,209
NON-CASH INVESTING AND FINANCING ACTIVITIES:
Activity related to sales-type lease		3,898			—
Capital expenditures in accounts payable and accrued expenses		908			2,855

Six Months Ended

December 31, 2017

January 1, 2017

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income

$
15,055

$
11,014

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization

2,210

1,622

Inventory obsolescence reserve

(322)

221

Deferred issuance costs

235

185

Stock-based compensation

528

305

Unrecognized tax benefits

258

307

Deferred income taxes

(604)

2,102

Net provision of doubtful accounts

(21)

30

Changes in operating assets and liabilities:

Accounts receivable

3,377

472

Inventories

101

1,682

Prepaid expenses and other current assets

(489)

(242)

Income tax receivable

—

(576)

Other assets

(11)

—

Accounts payable

(849)

(1,609)

Income tax payable

1,633

(749)

Accrued expenses and other current liabilities

1,351

(1,843)

Net cash provided by operating activities

22,452

12,921

CASH FLOWS FROM INVESTING ACTIVITIES:

Disposal of assets

96

—

Payment for acquisition, net of cash acquired

(79,128)

—

Purchases of property and equipment

(1,474)

(1,060)

Net cash used in investing activities

(80,506)

(1,060)

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from issuance of long-term debt

80,832

—

Payments of costs directly associated with offerings

—

(254)

Cash paid for withholding taxes on vested stock

(43)

—

Excess tax benefits

—

312

Principal payments on long-term debt

(19,201)

(2,500)

Payments on revolving line of credit

—

(3,126)

Payments of deferred financing costs

(1,322)

—

Net cash used in financing activities

60,266

(5,568)

NET CHANGE IN CASH AND CASH EQUIVALENTS

2,212

6,293

CASH AND CASH EQUIVALENTS — BEGINNING OF PERIOD

4,038

73

CASH AND CASH EQUIVALENTS — END OF PERIOD

$
6,250

$
6,366

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:

Cash payments for interest

$
1,383

$
915

Cash payments for income taxes

$
3,872

$
5,148

SIGNIFICANT NON-CASH INVESTING AND FINANCING ACTIVITIES:

Accrued working capital adjustment - NauticStar acquisition

1,383

—

~~The notes~~Notes to Unaudited Condensed Consolidated Financial Statements form an integral part of the condensed consolidated financial statements.

~~Table of Contents~~

~~MCBC~~MASTERCRAFT BOAT HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(~~Dollars~~Unless otherwise noted, dollars in thousands, except ~~share and~~ per share data)

~~1.ORGANIZATION AND NATURE OF BUSINESS~~

~~MCBC Holdings, Inc. (the “Company”) was formed on January 28, 2000, as a Delaware holding company and operates primarily through its wholly owned subsidiaries, MasterCraft Boat Company, LLC;~~ ~~Nautic Star, LLC;~~ MasterCraft Services, Inc.; MasterCraft Parts, Ltd.; and MasterCraft International Sales Administration, Inc. The Company and its subsidiaries collectively are referred to herein as the “Company”.

~~On October 2, 2017, the Company acquired~~ ~~all of the outstanding membership interests and other equity securities of Nautic Star, LLC, a Mississippi limited liability company (“NauticStar”)~~. As a result of the acquisition, the Company consolidated the financial results of NauticStar. See Note 3: Acquisition. The Company reports its results of operations under two reportable segments: MasterCraft and NauticStar, based on their boat manufacturing operations.

The Company is a designer and manufacturer of premium inboard tournament ski boats and luxury performance V-drive runabouts under the MasterCraft brand and salt water fishing and general recreational boats under the NauticStar brand. The Company also leases a parts warehouse in the United Kingdom to expedite service, primarily to MasterCraft dealers and customers in Europe.

~~2.BASIS~~

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation — The Company’s fiscal year begins July 1 and ends June 30, with the interim quarterly reporting periods consisting of 13 weeks. Therefore, the fiscal quarter end will not always coincide with the date of the end of ~~the~~a calendar month.

The ~~information furnished in the~~accompanying unaudited condensed consolidated financial statements ~~includes normal recurring adjustments~~include the accounts of MasterCraft Boat Holdings, Inc. ("Holdings") and ~~reflects all adjustments, which~~its wholly owned subsidiaries. Holdings and its subsidiaries collectively are referred to herein as the "Company." The unaudited condensed consolidated financial statements have been prepared on the same basis as the Company’s audited consolidated financial statements for the year ended June 30, 2023, and, in the opinion of management, reflect all adjustments considered necessary ~~for a fair presentation~~to present fairly the Company’s financial position as of ~~the~~March 31, 2024, its results of operations for the three and nine months ended March 31, 2024 and April 2, 2023, its cash flows for the nine months ended March 31, 2024 and April 2, 2023, and its statements of ~~financial position~~equity for the ~~interim periods presented.~~three and nine months ended March 31, 2024 and April 2, 2023. All adjustments are of a normal, recurring nature. Certain information and footnote disclosures normally included in annual consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and the applicable rules and regulations of the ~~U.S. Securities and Exchange Commission (“SEC”)~~SEC for financial information have been condensed or omitted pursuant to such rules and regulations. The June 30, ~~2017~~2023 condensed consolidated balance sheet data was derived from the audited financial statements but does not include all disclosures required by U.S. GAAP for complete financial statements. However, management believes that the disclosures in these condensed consolidated financial statements are adequate to make the information presented not misleading. These condensed consolidated financial statements should be read in conjunction with the Company’s consolidated financial statements and notes thereto included in our 2023 Annual Report on Form ~~10-K for~~10-K.

Due to the ~~fiscal year ended June 30, 2017.~~

~~The unaudited condensed consolidated financial statements have been prepared on the same basis as~~seasonality of the Company’s ~~audited consolidated financial statements for~~business, the ~~year ended June 30, 2017 and, in the opinion of management, reflect all adjustments considered necessary to present fairly the Company’s financial position as of December 31, 2017 and~~interim results of its operations, and its cash flows for the six months ended December 31, 2017 and January 1, 2017 and statement of shareholders’ equity for the six months ended December 31, 2017. All adjustments are of a normal recurring nature. Our

~~Table of Contents~~

~~MCBC HOLDINGS, INC. AND SUBSIDIARIES~~

~~NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Dollars in thousands, except share and per share data)~~

~~interim operating results for the six months ended December 31, 2017 and January 1, 2017~~ are not necessarily indicative of the results tothat may be expected ~~in future operating quarters.~~for the remainder of the fiscal year.

There ~~have been~~were no significant changes in, or changes to, the application of the Company’s significant or critical accounting policies or ~~critical accounting estimates~~estimation procedures for the ~~six~~three and nine months ended ~~December~~March 31, ~~2017~~2024, as compared with ~~the significant accounting policies~~those described in the Company’s audited consolidated financial statements for the ~~financial~~fiscal year ended June 30, ~~2017.~~2023.

~~New Accounting Pronouncements Issued But Not Yet Adopted~~Investment in Sales-Type Lease— On July 1, 2023, the Company became a lessor in a sales-type lease arrangement consisting of land valued at $3.9 million. In ~~February 2016, the Financial~~accordance with Accounting Standards ~~Board (the “FASB”~~Codification (“ASC”) ~~issued Accounting Standards Update (“ASU”) No. 2016-02,~~ 842, Leases,~~(Topic 842). This guidance establishes a right-of-use (“ROU”) model that requires a lessee to record a ROU asset~~ the underlying land was derecognized as Property, plant and equipment and a sales-type lease ~~liability~~was recognized as a net investment in a lease. The net investment balances are represented as lease receivable and unguaranteed residual asset amounts on the balance sheet ~~for all leases with terms longer than 12 months. Leases~~within other current assets and other long-term assets. The interest earned on the net investment will be ~~classified~~recognized as ~~either finance~~interest income.

New Accounting Pronouncements

Segment Reporting

ASU No. 2023-07, Improvements to Reportable Segment Disclosures, requires incremental disclosures about an entity’s reportable segments but does not change the definition of a segment or the guidance for determining reportable segments. The new guidance requires disclosure of significant segment expenses that are (1) regularly provided to (or easily computed from information regularly provided to) the chief operating ~~with classification affecting the pattern of expense recognition~~decision maker and (2) included in the ~~income statement.~~reported measure of segment profit or loss. The new standard also allows companies to disclose multiple measures of segment profit or loss if those measures are used to assess performance and allocate resources. This update is effective for fiscal years beginning after December ~~15, 2018, including interim periods within those~~31, 2023, or fiscal ~~years. A modified retrospective transition approach is required~~2025 for ~~lessees for capital~~the Company, and ~~operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available.~~should be adopted retrospectively unless impracticable. The Company is currently evaluating the impact, if any, that the adoption of this standard will have on financial disclosures.

Income Taxes

Accounting Standard Update ("ASU") No. 2023-09, Improvements to Income Tax Disclosures, requires entities to disclose in their rate reconciliation table additional categories of information about federal, state and foreign income taxes and provide more details about

the reconciling items in some categories if items meet a quantitative threshold. Entities would have to provide qualitative disclosures about the new categories. The guidance will require all entities to disclose income taxes paid, net of refunds, disaggregated by federal (national), state and foreign taxes for annual periods and to disaggregate the information by jurisdiction based on a quantitative threshold. The guidance makes several other changes to the disclosure requirements. Entities are required to apply the guidance prospectively, with the option to apply it retrospectively. The guidance is ~~expected to have on its financial position or results of operations and related disclosures.~~

~~In May 2014, the FASB and International Accounting Standards Board jointly issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606), which includes new principles-based accounting guidance~~effective for revenue recognition that will supersede virtually all existing revenue guidance. The core principle of this guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. To achieve the core principle, the guidance establishes the following five steps: 1) identify the contract(s) with a customer, 2) identify the performance obligation in the contract, 3) determine the transaction price, 4) allocate the transaction price to the performance obligations in the contract, and 5) recognize revenue when (or as) the entity satisfies a performance obligation. The guidance also details the accounting treatment for costs to obtain or fulfill a contract. Lastly, disclosure requirements have been enhanced to provide sufficient information to enable users of financial statements to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. In July 2015, the FASB announced that the implementation date would be delayed by one year. During 2016, the FASB issued certain amendments to clarify and improve the implementation of the guidance in ASU 2014-09. The effective date and transition requirements for these amendments and ASU 2014-09 are now for annual ~~and interim~~ periods beginning after December 15, ~~2017. The Company will adopt this guidance for our~~2024, or fiscal ~~year beginning July 1, 2018.~~

The Company is continuing to assess the potential effects of ASU 2014-09 on its consolidated financial statements, business processes, systems and controls. The Company plans to use the modified retrospective approach in applying the new standard. Based on the Company’s progress, it expects an impact from the new standard for dealers who are offered retail promotions which are currently recorded at the later of when the program has been communicated to the dealer or at the time of sale. Under the new standard, the Company expects these retail promotions to be recognized at the time of sale to a dealer. As a result, the Company expects a change in the timing of recording retail promotions and rebates; however, it does not expect a change in the total amount of cumulative revenue recognized for each transaction. Any potential effect

~~Table of Contents~~

~~MCBC HOLDINGS, INC. AND SUBSIDIARIES~~

~~NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Dollars in thousands, except share and per share data)~~

~~of adoption of this ASU has not yet been quantified. Additionally, the Company’s expectations may change as its implementation progresses.~~

~~In January 2017, the FASB issued ASU 2017-01,~~ ~~Business Combinations (Topic 805): Clarifying the Definition of a Business~~. The guidance clarifies the definition of a business that provides a two-step analysis in the determination of whether an acquisition or derecognition is a business or an asset. The update removes the evaluation of whether a market participant could replace any missing elements and provides a framework to assist entities in evaluating whether both an input and a substantive process are present. This guidance is effective for annual reporting periods beginning after December 15, 2017, including interim periods within those annual reporting periods and early adoption is permitted for transactions that meet specified criteria. This guidance is to be applied on a prospective basis for transactions that occur after the effective date.

~~In January 2017, the FASB issued ASU 2017-04, Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment.~~ ~~This guidance eliminates Step 2 from the goodwill impairment test. Instead, an entity should recognize an impairment charge~~2026 for the amount by which the carrying value exceeds the reporting unit’s fair value, not to exceed the total amount of goodwill allocated to that reporting unit. ASU 2017-04 is effective for annual reporting periods, and interim periods therein, beginning after December 15, 2019.Company. The Company is currently evaluating the ~~effect~~impact, if any, that the adoption of this ~~new guidance~~standard will have on financial disclosures.

REVENUE RECOGNITION

The following tables present the Company's revenue by major product category for each reportable segment:


	Three Months Ended March 31, 2024
	MasterCraft		Crest		Aviara		Total
Major Product Categories:
Boats and trailers	$	66,961	$	13,769	$	11,731	$	92,461
Parts		2,443		292		—		2,735
Other revenue		379		133		—		512
Total	$	69,783	$	14,194	$	11,731	$	95,708


	Nine Months Ended March 31, 2024
	MasterCraft		Crest		Aviara		Total
Major Product Categories:
Boats and trailers	$	207,160	$	48,584	$	31,374	$	287,118
Parts		9,574		770		—		10,344
Other revenue		1,585		359		—		1,944
Total	$	218,319	$	49,713	$	31,374	$	299,406


	Three Months Ended April 2, 2023
	MasterCraft		Crest		Aviara		Total
Major Product Categories:
Boats and trailers	$	114,514	$	35,936	$	12,777	$	163,227
Parts		2,798		285		—		3,083
Other revenue		318		148		—		466
Total	$	117,630	$	36,369	$	12,777	$	166,776


	Nine Months Ended April 2, 2023
	MasterCraft		Crest		Aviara		Total
Major Product Categories:
Boats and trailers	$	328,254	$	115,444	$	39,570	$	483,268
Parts		9,693		671		—		10,364
Other revenue		1,368		480		—		1,848
Total	$	339,315	$	116,595	$	39,570	$	495,480

Contract Liabilities

As of June 30, 2023, the Company had $3.3 million of contract liabilities associated with customer deposits and services. During the nine months ended March 31, 2024, $1.4 million was recognized as revenue. As of March 31, 2024, total contract liabilities associated with customer deposits and services of $3.5 million were reported in Accrued expenses and other current liabilities and Other long-term liabilities on the condensed consolidated balance sheet, and $0.6 million is expected to ~~have on our financial position or results~~be recognized as revenue during the remainder of ~~operations and related disclosures.~~the year ending June 30, 2024.

~~In May 2017,~~

DISCONTINUED OPERATIONS

On September 2, 2022, the ~~FASB issued ASU 2017-09, Compensation—Stock Compensation (Topic 718): Scope~~Company sold its NauticStar business to certain affiliates of ~~Modification Accounting.~~ ~~This guidance provides clarity and reduces complexity when applying the guidance in Topic 718,~~ ~~Compensation—Stock Compensation~~ ~~to a change~~Iconic Marine Group, LLC ("Purchaser"). Pursuant to the ~~term or condition~~terms of ~~a share-based payment. ASU 2017-09 is effective for annual reporting periods,~~the purchase agreement, substantially all of the assets of NauticStar were sold, including, among other things, all of the issued and ~~interim periods therein, beginning after December 15, 2017. The Company is currently evaluating~~outstanding membership interests in its wholly-owned subsidiary NS Transport, LLC, all owned real property, equipment, inventory, intellectual property and accounts receivable, and the ~~effect that~~Purchaser assumed substantially all of the ~~adoption~~liabilities of ~~this new guidance is expected to have on our financial position or results of operations~~NauticStar, including, among other things, product liability and ~~related disclosures.~~warranty claims.

~~New Accounting Pronouncements Issued And Adopted~~ ~~— In July 2015,~~During the ~~FASB issued ASU 2015-11,~~ ~~Simplifying the Measurement of Inventory~~. This ASU changes the measurement principle for inventories valued under the FIFO or weighted-average methods from the lower of cost or market to the lower of cost and net realizable value. Net realizable value is defined by the FASB as estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. This ASU is effective for annual reporting periods beginning after December 15, 2016, and interim periods within those annual periods with early adoption permitted. The Company adopted the provisions of ASU 2015-11 on a prospective basis during the first quarter of fiscal year 2018. The adoption of this ASU did not have an impact on our financial position or results of operations and related disclosures.

~~In March 2016, the FASB issued ASU 2016-09,~~ ~~Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting~~. This guidance identifies areas for simplification involving several aspects of accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, an option to recognize gross stock compensation expense with actual forfeitures recognized as they occur, as well as certain classifications on the statement of cash flows. This ASU is effective for annual reporting periods beginning after December 15, 2016, and interim periods within those annual periods with early adoption

~~Table of Contents~~

~~MCBC HOLDINGS, INC. AND SUBSIDIARIES~~

~~NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Dollars in thousands, except share and per share data)~~

permitted. The Company adopted the provisions of ASU 2016-1 on a prospective basis during the first quarter of fiscal year 2018. The adoption of this ASU did not have an impact on our financial position or results of operations and related disclosures.

~~There are no other recently issued accounting pronouncements that are expected to have a material impact on our financial~~ ~~position or results of operations and related disclosures.~~

~~3. ACQUISITION~~

~~On October~~nine months ended April 2, ~~2017,~~2023, the Company ~~completed its acquisition of NauticStar. The purchase price was $80,511, including customary adjustments for the amount of working capital in the acquired business at the closing date.~~ ~~A portion~~recognized a $22.5 million loss on sale. The final settlement of the purchase price was ~~deposited into an escrow account~~subject to customary working capital adjustments that had been in ~~order~~arbitration, but were settled in October 2023 without a significant impact to ~~secure certain post-closing obligations~~the loss on sale previously recorded. The agreed upon settlement will be received in installment payments through July 2025. The value of the ~~former members of NauticStar.~~ ~~The Company accounted for the transaction using the acquisition method in accordance with ASC 805,~~ ~~Business Combinations~~.

~~The total consideration has been allocated to the~~ assets ~~acquired~~ and liabilities ~~assumed based on preliminary estimates~~that were retained at the time of their fair values as of the date of acquisition. Because of the complexities involved with performing the valuation, the Company has recorded the tangible and intangible assets acquired and liabilities assumed based on their preliminary fair values as of October 2, 2017. The preliminary measurements of fair value were based upon estimates utilizing the assistance of third party valuation specialists, andsale, which are primarily related to certain claims, are subject to change. ~~The Company expects~~Certain of these claims have been settled or are expected to settle for higher amounts than previously estimated, with the ~~valuation of tangible and intangible assets and working capital adjustments to be finalized during the second half of fiscal 2018.~~

related activity being recorded as discontinued operations.

~~Table of Contents~~

~~MCBC HOLDINGS, INC. AND SUBSIDIARIES~~

~~NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Dollars in thousands, except share and per share data)~~

The following table summarizes the ~~preliminary purchase price allocation based on the estimated fair values~~operating results of ~~the assets acquired and liabilities assumed of NauticStar at the acquisition date:~~

Purchase Price:

Cash paid, net of cash acquired
$
79,128

Accrued working capital adjustment

1,383

$
80,511

Recognized preliminary amounts of identifiable assets acquired and (liabilities assumed), at fair value:

Accounts receivable
$
1,773

Inventories

6,426

Other current assets

94

Indemnification asset

166

Deferred income taxes

83

Property, Plant and equipment

4,945

Identifiable intangible assets

36,000

Current liabilities

(5,952)

Unrecognized tax positions

(249)

Preliminary estimate of the fair value of assets acquired and liabilities assumed

43,286

Goodwill

37,225

$
80,511

~~The preliminary fair value estimates~~discontinued operations for the ~~Company’s identifiable intangible assets acquired as part~~following periods:


	Nine Months Ended
	March 31,			April 2,
	2024			2023
NET SALES		37		$	7,767
COST OF SALES		257			9,732
GROSS LOSS		(220	)		(1,965	)
OPERATING EXPENSES:
Selling, general and administrative		1,237			2,639
Total operating expenses		1,237			2,639
OPERATING LOSS		(1,457	)		(4,604	)
Gain (loss) on sale of discontinued operations		157			(22,487	)
LOSS BEFORE INCOME TAX BENEFIT		(1,300	)		(27,091	)
INCOME TAX BENEFIT		307			5,952
LOSS FROM DISCONTINUED OPERATIONS, NET OF TAX		(993	)	$	(21,139	)

The operating results, and components thereof, of discontinued operations for the ~~acquisition are as follows:~~three months ended March 31, 2024 and April 2, 2023 were not significant.

Estimates of Fair Value

Estimated Useful Life (in years)
Definite-lived intangible:

    Dealer network
$
20,000

10
Indefinite-lived intangible:

    Trade name

16,000

       Total identifiable intangible assets
$
36,000

4.

HELD-TO-MATURITY SECURITIES

The ~~value allocated to inventories reflects the~~amortized cost and net carrying amount, gross unrealized gains and losses, and estimated fair value of ~~the acquired inventory based on the expected sales price of the inventory, less an estimated cost to complete~~our investments classified as held-to-maturity at March 31, 2024 and a reasonable profit margin. The value allocated to accounts receivable represents the estimated fair value of the acquired receivables based on the expected collection of those receivables, less an estimated allowance for bad debts. The fair value of the identifiable intangible assets were determined based on the following approaches:June 30, 2023 are summarized as follows:

Dealer Network - The value associated with NauticStar’s dealer network is attributed to its long standing dealer distribution network. The estimate of fair value assigned to this asset was determined using the income approach, which requires an estimate or forecast of the expected future cash flows from the dealer network through the application of the multi-period excess earnings approach. The estimated remaining useful life of dealer network is approximately ten years.



	March 31, 2024
	Amortized		Gross		Gross			Estimated
	Cost / Net		Unrealized		Unrealized			Fair
	Carrying Amount		Gains		Losses			Value
Held-to-maturity securities:
Fixed income securities:
Corporate bonds	$	83,183	$	6	$	(48	)	$	83,141
Total held-to-maturity securities	$	83,183	$	6	$	(48	)	$	83,141

1210



	June 30, 2023
	Amortized		Gross		Gross			Estimated
	Cost / Net		Unrealized		Unrealized			Fair
	Carrying Amount		Gains		Losses			Value
Held-to-maturity securities:
Fixed income securities:
Corporate bonds	$	81,743	$	1	$	(160	)	$	81,584
U.S. treasury bills		9,817		31		(1	)		9,847
Total held-to-maturity securities	$	91,560	$	32	$	(161	)	$	91,431

~~Table of Contents~~

~~MCBC HOLDINGS, INC. AND SUBSIDIARIES~~

~~NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Dollars in thousands, except share and per share data)~~

INVENTORIES

Trade Name - The value attributed to NauticStar’s trade name was determined using the relief from royalty method, a variation of the income approach, which requires an estimate or forecast of the expected future cash flows. The trade name has an indefinite life.

The fair value of the definite-lived intangible asset is being amortized using the straight-line method to amortization of intangible assets expense over the estimated useful life. Indefinite-lived intangible assets are not amortized, but instead are evaluated for potential impairment on an annual basis in accordance with the provisions of ASC Topic 350, ~~Intangibles—Goodwill and Other~~. The weighted average useful life of identifiable definite-lived intangible assets acquired was 10.0 years. Goodwill of $37,225 arising from the acquisition consists of future growth prospects including dealer expansion into new geographic markets and capacity expansion as well as intangible assets that do not qualify for separate recognition. The indefinite-lived intangible asset and goodwill acquired are expected to be deductible for income tax purposes.

Acquisition and integration related costs of $1,486, which were incurred by the Company during the first half of fiscal 2018, were expensed in the period incurred, and are included in general and administrative expenses in the consolidated statement of operations and comprehensive income for the three and six months ended December 31, 2017.

~~Pro Forma Financial Information:~~

The following unaudited pro forma consolidated results of operations for the three and six months ended December 31, 2017 and three and six months ended January 1, 2017, assumes that the acquisition of NauticStar occurred as of July 1, 2016. The unaudited pro forma financial information combines historical results of MasterCraft and NauticStar, with adjustments for depreciation and amortization attributable to preliminary fair value estimates on acquired tangible and intangible assets for the respective periods. Non-recurring pro forma adjustments associated with the fair value step up of inventory were included in the reported pro forma cost of sales and earnings. The unaudited pro forma financial information is presented for informational purposes only and is not indicative of the results of operations that would have been achieved if the acquisition had taken place at the beginning of fiscal year 2017 or the results that may occur in the future:

Three Months Ended

Six Months Ended


December 31, 2017

January 1, 2017

December 31, 2017

January 1, 2017

Net sales

$
78,435

$
68,286

$
161,553

$
146,400
Net income

$
8,876

$
4,293

$
16,981

$
10,797
Basic earnings per share

$
0.48

$
0.23

$
0.91

$
0.58
Diluted earnings per share

$
0.47

$
0.23

$
0.91

$
0.58

~~Table of Contents~~

~~MCBC HOLDINGS, INC. AND SUBSIDIARIES~~

~~NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Dollars in thousands, except share and per share data)~~

~~4.INVENTORIES~~

Inventories consisted of the following:


	March 31,			June 30,
	2024			2023
Raw materials and supplies	$	27,262		$	40,201
Work in process		9,418			9,465
Finished goods		6,395			10,335
Obsolescence reserve		(1,643	)		(1,703	)
Total inventories	$	41,432		$	58,298

December 31, 2017

    June 30, 2017

Raw materials and supplies

$
11,550

$
7,164

Work in process

2,670

1,772

Finished goods

5,072

3,427

Obsolescence reserve

(1,009)

(687)

Total inventories

$
18,283

$
11,676

PROPERTY, PLANT, AND EQUIPMENT

Property, plant, and equipment, net consisted of the following:


	March 31,			June 30,
	2024			2023
Land and improvements	$	7,587		$	10,456
Buildings and improvements		51,848			46,759
Machinery and equipment		42,309			40,632
Furniture and fixtures		5,620			5,284
Construction in progress		12,717			10,180
Total property, plant, and equipment		120,081			113,311
Less accumulated depreciation		(40,488	)		(35,390	)
Property, plant, and equipment — net		79,593		$	77,921

GOODWILL AND OTHER INTANGIBLE ASSETS

The following table presents the carrying amounts of goodwill as of March 31, 2024 and June 30, 2023 for each of the Company's reportable segments.


	Gross Amount		Accumulated Impairment Losses			Total
MasterCraft	$	28,493	$	—		$	28,493
Crest		36,238		(36,238	)		—
Aviara		1,100		(1,100	)		—
Total	$	65,831	$	(37,338	)	$	28,493

The following table presents the carrying amounts of Other intangible assets, net:


	March 31,							June 30,
	2024							2023
	Gross Amount		Accumulated Amortization / Impairment			Other intangible assets, net		Gross Amount		Accumulated Amortization / Impairment			Other intangible assets, net
Amortized intangible assets
Dealer networks	$	19,500	$	(11,400	)	$	8,100	$	19,500	$	(10,050	)	$	9,450
Software		245		(245	)		—		245		(233	)		12
		19,745		(11,645	)		8,100		19,745		(10,283	)		9,462

Unamortized intangible assets
Trade names		33,000		(7,000	)		26,000		33,000		(7,000	)		26,000
Total other intangible assets	$	52,745	$	(18,645	)	$	34,100	$	52,745	$	(17,283	)	$	35,462

Amortization expense related to Other intangible assets, net for each of the three months ended March 31, 2024 and April 2, 2023, was $0.5 million and for the nine months ended March 31, 2024 and April 2, 2023, was $1.4 million and $1.5 million, respectively. Estimated amortization expense for the fiscal year ending June 30, 2024 is $1.8 million.

ACCRUED EXPENSES AND OTHER CURRENT ~~ASSETS~~

LIABILITIES

~~Prepaid expenses and other current assets consisted of the following:~~

December 31, 2017

    June 30, 2017

Prepaid photo shoot

$
682

$
497

Insurance

267

765

Trade show deposits

413

73

Interest rate cap

288

90

Other

1,371

1,013

Total prepaid expenses and other current assets

$
3,021

$
2,438

~~6.ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES~~

Accrued expenses and other current liabilities consisted of the following:


					March 31,		June 30,
	December 31, 2017		June 30, 2017		2024		2023
Warranty	$	14,918	$	12,237	$	30,861	$	31,780
Self-insurance		725		763
Dealer incentives						21,452		24,987
Compensation and related accruals		1,905		1,691		4,367		5,838
Inventory repurchase contingent obligation		1,253		1,008		2,212		1,515
Interest		2,021		1,008
Dealer incentives		2,489		2,755
Working capital adjustment - NauticStar acquistion		1,383		—
Contract liabilities						1,423		1,477
Self-insurance						1,357		1,586
Liabilities retained associated with discontinued operations						786		690
Other		2,752		1,948		3,706		4,623
Total accrued expenses and other current liabilities	$	27,446	$	21,410	$	66,164	$	72,496

~~The following table provides a roll forward of the accrued warranty liability:~~

Beginning balance - June 30, 2017

$
12,237
Provisions

2,807
Additions for NauticStar acquisition

1,992
Payments made

(1,955)
Adjustments to preexisting warranties

(163)
Ending balance - December 31, 2017

$
14,918

14Accrued warranty liability activity was as follows for the nine months ended:


	March 31,			April 2,
	2024			2023
Balance at the beginning of the period	$	31,780		$	25,824
Provisions		6,438			10,766
Payments made		(10,557	)		(9,069	)
Changes for pre-existing warranties		3,200			3,131
Balance at the end of the period	$	30,861		$	30,652

COMMITMENTS AND CONTINGENCIES

Legal Proceedings

The Company is subject to various litigation, claims and proceedings, which have arisen in the ordinary course of business. The Company accrues for litigation, claims and proceedings when a liability is both probable and the amount can be reasonably estimated.

The Company’s accruals for litigation matters are not material. While these matters are subject to inherent uncertainties, management believes that current litigation, claims and proceedings, individually and in aggregate, and after considering expected insurance

reimbursements and other contract indemnifications, are not likely to have a material adverse impact on the Company’s financial position, results of operations or cash flows.

~~Table of Contents~~

~~MCBC HOLDINGS, INC. AND SUBSIDIARIES~~

~~NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Dollars in thousands, except share and per share data)~~

10.

LONG-TERM DEBT

~~7. GOODWILL AND OTHER INTANGIBLE ASSETS~~

~~The changes in the carrying amount of goodwill for the six months ended December 31, 2017, were as follows:~~

Goodwill as of June 30, 2017

$
29,593
Addition related to the acquisition of NauticStar

37,225
Goodwill as of December 31, 2017

$
66,818

~~As of December 31, 2017, and June 30, 2017, details of the Company’s intangible assets other than goodwill were as follows:~~

December 31, 2017

Gross

Net

Carrying

Accumulated

Carrying

Amount

Amortization

Amount

Dealer network

$
21,590

$
(1,500)

$
20,090

Total amortizable intangible assets

21,590

(1,500)

20,090

Trade names

32,000

—

32,000

Total intangible assets

$
53,590

$
(1,500)

$
52,090

June 30, 2017

Gross

Net

Carrying
Accumulated

Carrying

Amount
Amortization

Amount

Dealer network

$
1,590

$
(947)

$
643

Total amortizable intangible assets

1,590

(947)

643

Trade names

16,000

—

16,000

Total intangible assets

$
17,590

$
(947)

$
16,643

~~Amortization expense recognized on all amortizable intangibles was $552 and $54 for the six months ended December 31, 2017 and January 1, 2017, respectively.~~

~~The estimated future amortization of definite-lived intangible assets~~Long-term debt is as follows:

Fiscal years ending June 30,

Remainder of 2018

$
1,054

2019

2,107

2020

2,107

2021

2,107

2022

2,107

and thereafter

10,608

Total

$
20,090


	March 31,			June 30,
	2024			2023
Term loan	$	50,625		$	54,000
Debt issuance costs on term loan		(272	)		(324	)
Total debt		50,353			53,676
Less current portion of long-term debt		4,500			4,500
Less current portion of debt issuance costs on term loan		(129	)		(119	)
Long-term debt, net of current portion	$	45,982		$	49,295

~~Table of Contents~~

~~MCBC HOLDINGS, INC. AND SUBSIDIARIES~~

~~NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Dollars in thousands, except share and per share data)~~

~~8. FAIR VALUE MEASUREMENTS~~

~~Fair value is the exchange price that would be received for an asset or paid to transfer~~The Company has a ~~liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. There are three levels~~credit agreement with a syndicate of ~~inputs that may be used to measure fair values:~~

~~Level 1 — Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date.~~

Level 2 — Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

~~Level 3 — Significant unobservable inputs that reflect a company’s own assumptions about the assumptions that market participants would use in pricing an asset or liability.~~

When determining the fair value measurements for assets or liabilities required or permitted to be recorded at and/or marked to fair value, the Company considers the principal or most advantageous market in which it would transact and considers assumptions that market participants would use when pricing the asset or liability. When possible, the Company looks to active and observable markets to price identical assets. When identical assets are not traded in active markets, the Company looks to market observable data for similar assets.

~~The following tables summarize the basis used to measure~~ certain financial ~~assets and liabilities at fair value on a recurring basis in the consolidated balance sheets:~~

December 31, 2017

Level 1

Level 2

Level 3

Asset — interest rate cap

$
—

$
288

$
—

June 30, 2017

Level 1

Level 2

Level 3

Asset — interest rate cap

$
—

$
90

$
—

~~The interest rate cap is valued utilizing pricing models taking into account inputs such as interest rates and notional amounts.~~ ~~In November 2017, the Company entered into an interest rate cap agreement with its existing lender to cap its~~ ~~London Interbank Offered Rate (“LIBOR”)~~ ~~rate at 2% for $34,594 of outstanding principal on its long-term debt.~~ Fair value measurements for the Company’s interest rate cap are classified under Level 2 because such measurements are based on significant other observable inputs. There were no transfers of assets or liabilities between Level 1 and Level 2 during the six months ended December 31, 2017.

~~Table of Contents~~

~~MCBC HOLDINGS, INC. AND SUBSIDIARIES~~

~~NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Dollars in thousands, except share and per share data)~~

~~9. LONG-TERM DEBT~~

~~Long-term debt outstanding is as follows:~~

December 31, 2017

    June 30, 2017

Revolving credit facility

$
—

$
—

Senior secured term loan

96,775

35,135

Debt issuance costs on term loan

(1,798)

(658)

Total debt

94,977

34,477

Less current portion of long-term debt

5,513

3,904

Less current portion of debt issuance costs on term loan

(441)

(217)

Long-term debt — less current portion

$
89,905

$
30,790

~~On October 2, 2017, the Company entered into a Third Amended and Restated Credit and Guaranty Agreement with Fifth Third Bank, as the agent and letter of credit issuer, and the lenders party thereto~~institutions (the ~~“Third Amended Credit Agreement”~~"Credit Agreement")~~. The Third Amended Credit Agreement replaced and paid off the Company’s Second Amended and Restated Credit Agreement, dated May 27, 2016. The Third Amended Credit Agreement~~ that provides the Company with a ~~$145,000~~$160.0 million senior secured credit facility, consisting of a ~~$115,000~~$60.0 million term loan (the ~~“Third Term Loan”~~"Term Loan") and a ~~$30,000~~$100.0 million revolving credit facility (the ~~“Revolving~~"Revolving Credit ~~Facility”~~Facility").

The ~~Third Amended~~ Credit Agreement is secured by a first priority security interest in substantially all of the Company's assets.

The Credit Agreement contains a number of covenants that, among other things, restrict the Company’s ability to, subject to specified exceptions, incur additional debt; incur additional liens and contingent liabilities; sell or dispose of assets; merge with or acquire other companies; liquidate or dissolve; engage in businesses that are not in a related line of business; make loans, advances or guarantees; pay dividends or make other distributions; engage in transactions with affiliates; and make investments. The Company is also required to maintain a minimum fixed charge coverage ratio and a maximum net leverage ratio.

On August 31, 2022, the Company entered into the Second Amendment to the Credit Agreement to obtain the necessary consents and waivers related to the sale of the NauticStar segment on September 2, 2022, as discussed in Note 3.

On October 4, 2023, the Company entered into the Third Amendment to the Credit Agreement to exclude certain amounts of stock repurchases during the fiscal year ending June 30, 2024 from the calculation of the minimum required fixed charge coverage ratio.

The Credit Agreement, as amended, bears interest, at the Company’s option, at either the prime rate plus an applicable margin ranging from ~~0.75%~~0.25% to ~~1.75%~~1.00% or at an adjusted ~~LIBOR~~term benchmark rate plus an applicable margin ranging from ~~1.75%~~1.25% to ~~2.75%~~2.00%, in each case based on the Company’s ~~senior~~net leverage ratio. ~~Based~~The Company is also required to pay a commitment fee for any unused portion of the revolving credit facility ranging from 0.15% to 0.30% based on the Company’s ~~current senior~~net leverage ~~ratio,~~ratio. Effective during both the three and nine months ended March 31, 2024, the applicable margin for loans accruing at the prime rate was 0.25% and the applicable margin for loans accruing interest at the ~~prime~~benchmark rate ~~is 1.25% and~~was 1.25%. As of March 31, 2024, the ~~applicable margin for loans accruing~~ interest ~~at LIBOR is 2.25%. In connection with~~rate on the ~~Third Amended~~Company’s term loan was 6.68%.

The Credit Agreement ~~the Company paid $1,322 of financing costs. The Third Term Loan~~ will mature and all remaining amounts outstanding thereunder will be due and payable on ~~October 2, 2022. On October 17, 2017, and December 1, 2017, the Company made voluntary payments on the Third Term Loan of $10,000 and $7,000, respectively, out of excess cash.~~June 28, 2026. As of ~~December~~March 31, ~~2017 and June 30, 2017,~~2024, the ~~Company’s unamortized deferred financing costs were $2,226 and $1,139, respectively. These costs are being amortized over the term of the Third Amended Credit Agreement. The~~ Company was in compliance with ~~all of~~ its ~~debt~~financial covenants under ~~its Third Amended~~the Credit Agreement.

Revolving Credit Facility

As of ~~December~~March 31, ~~2017 and June 30, 2017,~~2024, the Company had no ~~borrowings~~ amounts outstanding on its Revolving Credit ~~Facility. Availability under the Revolving Credit~~ Facility ~~is reduced by letters~~and had remaining availability of credit. There were specified letters of credit outstanding of $750 and $250 at December 31, 2017 and June 30, 2017, respectively. As of December 31, 2017 and June 30, 2017, availability under the Revolving Credit Facility was $29,250 and $29,750, respectively, and unamortized deferred financing costs were $428 and $481, respectively.

$100.0 million.

~~Table of Contents~~

~~MCBC HOLDINGS, INC. AND SUBSIDIARIES~~

~~NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Dollars in thousands, except share and per share data)~~

11.

~~10.~~ INCOME TAXES

The Company’s results for the three and six months ended December 31, 2017, reflect the impact of the enactment of the Tax Cuts and Jobs Act (“Tax Reform Act”), which was signed into law on December 22, 2017. The Tax Reform Act reduced federal corporate income tax rates and changed numerous other provisions. As we have a June 30 fiscal year-end, the lower corporate federal income tax rate will be phased in, resulting in a U.S. federal statutory tax rate of 28.1% for our fiscal year ending June 30, 2018, and 21.0% for subsequent fiscal years. The quarter and six months ended December 31, 2017 included a year-to-date provisional expense of approximately $171 to reflect federal deferred taxes at the lower blended effective tax rate. This adjustment to the provision was more than offset by a one-time discrete provisional benefit of approximately $651 as a result of applying the new lower federal income tax rates to the Company’s net deferred tax liabilities.

The changes included in the Tax Reform Act are broad and complex. The final transition impacts may differ from the above estimate, due to, among other things, changes in interpretations, any legislative action to address questions that arise because of the Tax Reform Act, any changes in accounting standards for income taxes or related interpretations in response to the Tax Reform Act, or any updates or changes to estimates we have utilized to calculate the transition impacts. The SEC issued guidance in Staff Accounting Bulletin 118 which allows the Company to record provisional amounts during a one-year measurement period. The Company has determined a reasonable estimate for the measurement and accounting for certain effects of the Tax Reform Act, including the re-measurement of the Company’s net deferred tax assets and liabilities, which have been reflected as provisional amounts in the December 31, 2017 financial statements. The amounts represent the Company’s best estimates based on records, information, and current guidance. Additional information and analysis is required to finalize the impact that the Tax Reform Act will have on the Company’s full year financial results. This includes filing the fiscal 2017 United States federal income tax return, which could impact the Company’s estimated deferred income tax assets and liabilities. Although the Company does not anticipate material adjustments to the provisional amounts, final results could vary from these provisional amounts. The Company currently anticipates finalizing and recording any resulting adjustments by the end of the fiscal year ending June 30, 2018.

~~The Company’s~~consolidated interim effective tax rate is based on a current estimate of the annual effective income tax rate adjusted to reflect the impact of discrete items. ~~During the six months ended December 31, 2017,~~The differences between the Company’s effective tax rates and the statutory federal tax rate ~~was 25.5%. The rate was lower than the 28.1% statutory rate~~of 21.0% primarily ~~due~~relate to ~~the impact of Tax Reform, and a permanent benefit associated with the domestic production activities deduction, which was partially offset by~~ the inclusion of the state tax rate in the overall effective ~~rate.~~

~~Table~~rate, the benefit of ~~Contents~~

~~MCBC HOLDINGS, INC. AND SUBSIDIARIES~~

~~NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Dollars in thousands, except share~~federal and ~~per share data)~~

~~11. EARNINGS PER SHARE~~

~~The following table sets forth~~state credits, and a permanent add-back for Section 162(m) limitations, partially offset by a benefit associated with the ~~computation of the Company’s earnings per share:~~

Three Months Ended

Six Months Ended



December 31, 2017

January 1, 2017

December 31, 2017

January 1, 2017


Net income

$
8,009

$
4,031

$
15,055

$
11,014

Weighted average common shares — basic

18,619,834

18,592,936

18,617,467

18,592,372

Dilutive effect of assumed exercises of stock options

34,994

4,453

32,969

2,227

Dilutive effect of assumed restricted share awards\units

47,524

7,689

44,054

4,242

Weighted average outstanding shares — diluted

18,702,352

18,605,078

18,694,489

18,598,841

Basic earnings per share

$
0.43

$
0.22

$
0.81

$
0.59

Diluted earnings per share

$
0.43

$
0.22

$
0.81

$
0.59

~~For~~foreign derived intangible income deduction. During the three months ended ~~December~~March 31, ~~2017,~~2024 and April 2, 2023, the ~~weighted average shares that were anti-dilutive,~~Company's effective tax rate was 17.4% and ~~therefore excluded from~~22.8%, respectively,

and for the ~~computation~~nine months ended March 31, 2024 and April 2, 2023, the Company’s effective tax rate was 20.8% and 23.2%, respectively. The Company’s effective tax rates for the three and nine months ended March 31, 2024 are lower compared to the effective tax rate for the same prior-year periods, primarily due to a decrease in the effective state tax rate and an increase in the impact of ~~diluted earnings per share included~~ ~~24,847~~federal tax credits, partially offset by an increase in the tax impact of uncertain state tax positions.

12.

SHARE-BASED COMPENSATION

The following table presents the components of share-based compensation expense by award type.


	Three Months Ended				Nine Months Ended
	March 31,		April 2,		March 31,		April 2,
	2024		2023		2024		2023
Restricted stock awards	$	1,494	$	587	$	2,508	$	1,723
Performance stock units		89		439		23		1,169
Share-based compensation expense	$	1,583	$	1,026	$	2,531	$	2,892

The increase in expense related to restricted stock awards~~. For~~ ("RSAs") for the three months ended ~~January 1, 2017,~~March 31, 2024 is primarily the ~~weighted average shares that~~result of accelerated recognition of compensation expense associated with outstanding equity awards held by our former Chief Executive Officer, which were ~~anti-dilutive, and therefore excluded from~~modified at the ~~computation~~time of ~~diluted earnings per share included~~ ~~1,898 restricted stock awards and options to purchase 122,640 shares~~the March 2024 announcement of ~~common stock~~.his retirement.

~~For~~Restricted Stock Awards

During the ~~six~~nine months ended ~~December~~March 31, ~~2017, the weighted average shares that were anti-dilutive, and therefore excluded from the computation of diluted earnings per share included~~ ~~37,905 restricted stock awards. For the six months ended January 1, 2017, the weighted average shares that were anti-dilutive, and therefore excluded from the computation of diluted earnings per share included~~ ~~16,534 restricted stock awards and options to purchase 122,640 shares of common stock.~~

~~12.STOCK-BASED COMPENSATION~~

During fiscal year ended June 30, 2015 the Company adopted the Amended and Restated MCBC Holdings, Inc. 2015 Incentive Award Plan (“2015 Plan”) in order to facilitate the grant of cash and equity incentives to non-employee directors, employees, and consultants of the Company and certain of its affiliates and to enable the Company and certain of its affiliates to obtain and retain the services of these individuals, which is essential to our long-term success. In July 2015, the Board amended and restated the Company’s 2015 Plan which became effective just prior to the closing of the Company’s initial public offering to increase the shares available for issuance under the 2015 Plan. During the six months ended December 31, 2017 and January 1, 2017, the Company recognized $528 and $305, respectively in stock-based compensation expense.

~~In July 2017,~~2024, the Company granted 179,539 RSAs to the Company’s non-executive directors, officers and certain ~~employees 23,932~~other key employees. Generally, the shares of restricted stock ~~awards (“RSAs”) under~~granted during the ~~2015 Plan at a per share~~nine months ended March 31, 2024, vest pro-rata over three years for officers and certain other key employees and over one year for non-executive directors. The Company determined the fair value of ~~$19.34, which is~~ the ~~market value~~shares awarded by using the close price of our common stock as of the ~~Company’s common stock on the~~date of grant. The weighted average grant date. The RSAs will vest in three equal annual installments. In addition, the Company granted 17,064 RSAs under the 2015 Plan to certain non-employee directors for their annual equity award at a per sharedate fair value of ~~$19.34. In November 2017,~~RSAs granted in the ~~Company granted 5,578 of RSAs to certain employees under the 2015 Plan at a~~nine months ended March 31, 2024, was $21.33 per ~~share fair value of $22.31.~~

~~Table~~The following table summarizes the status of ~~Contents~~nonvested RSAs as of March 31, 2024, and changes during the nine months then ended.

~~MCBC HOLDINGS, INC. AND SUBSIDIARIES~~


				Average
	Nonvested			Grant-Date
	Restricted			Fair Value
	Shares			(per share)
Nonvested at June 30, 2023		91,907		$	23.66
Granted		179,539			21.33
Vested		(18,830	)		20.00
Forfeited		(19,173	)		23.09
Nonvested at March 31, 2024		233,443			22.21

~~NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~As of March 31, 2024, there was $2.7 million of total unrecognized compensation expense related to nonvested RSAs. The Company expects this expense to be recognized over a weighted average period of 2.2 years.

~~(Dollars in thousands, except share and per share data)~~Performance Stock Units

~~In July 2017, the Company granted 23,929 performance~~Performance stock units (“PSUs”) ~~under its 2015 Plan~~are a form of long-term incentive compensation awarded to executive officers and certain other key employees ~~at a per share fair value~~designed to directly align the interests of ~~$19.34, which is~~employees to the ~~market value~~interests of the Company’s ~~common stock on the grant date. In November 2017, the Company granted 2,306 PSUs under its 2015 Plan, at a per share fair value of $22.31.~~stockholders, and to create long-term stockholder value. The awards will be earned based ~~upon~~on the Company’s ~~attainment~~achievement of certain performance criteria over a three-year performance period. The performance period for the awards ~~are~~commences on July 1 of the fiscal year in which they were granted and continue for a three-year period, ~~commencing July 1, 2017 and~~ ending on June 30 ~~2020.~~of the applicable year. The probability of achieving the performance criteria is assessed quarterly. Following the determination of the Company’s achievement with respect to the performance criteria, the ~~amount~~number of shares awarded ~~will be~~is subject to further adjustment based ~~upon~~on the application of a total shareholder return (“TSR”) modifier.

~~In July 2015,~~ The grant date fair value is determined based on both the probability assessment of the Company ~~granted 137,786 non-qualified stock options (“NSOs”)~~achieving the performance criteria and an estimate of the expected TSR modifier. The TSR modifier estimate is determined using a Monte Carlo Simulation model, which considers the

likelihood of numerous possible outcomes of long-term market performance. Compensation expense related to ~~certain employees at~~nonvested PSUs is recognized ratably over the performance period.

The following table summarizes the status of nonvested PSUs as of March 31, 2024, and changes during the nine months then ended.


				Average
	Nonvested			Grant-Date
	Performance			Fair Value
	Stock Units			(per share)
Nonvested at June 30, 2023		122,971		$	27.12
Granted		86,555			21.62
Forfeited		(28,054	)		25.65
Nonvested at March 31, 2024		181,472			24.73

13.

EARNINGS PER SHARE AND COMMON STOCK

The following table sets forth the computation of the Company’s net income per share:


	Three Months Ended						Nine Months Ended
	March 31,			April 2,			March 31,			April 2,
	2024			2023			2024			2023
Net income from continuing operations	$	3,826		$	22,782		$	16,829		$	67,400
Loss from discontinued operations, net of tax		(71	)		(272	)		(993	)		(21,139	)
Net income	$	3,755		$	22,510		$	15,836		$	46,261

Weighted average shares — basic		16,844,440			17,559,920			17,003,616			17,725,208
Dilutive effect of assumed exercises of stock options		—			4,816			—			7,028
Dilutive effect of assumed restricted share awards/units		121,184			184,174			90,342			119,419
Weighted average outstanding shares — diluted		16,965,624			17,748,910			17,093,958			17,851,655
Basic net income (loss) per share
Continuing operations	$	0.23		$	1.30		$	0.99		$	3.80
Discontinued operations		(0.01	)		(0.02	)		(0.06	)		(1.19	)
Net income	$	0.22		$	1.28		$	0.93		$	2.61
Diluted net income (loss) per share
Continuing operations	$	0.23		$	1.28		$	0.98		$	3.78
Discontinued operations		(0.01	)		(0.01	)		(0.05	)		(1.19	)
Net income	$	0.22		$	1.27		$	0.93		$	2.59

For the three and nine months ended March 31, 2024 and April 2, 2023, an ~~option price equal~~immaterial number of shares were excluded from the computation of diluted earnings per share as the effect would have been anti-dilutive.

Share Repurchase Program

On June 24, 2021, the board of directors of the Company authorized a share repurchase program that allowed for the repurchase of up to ~~the $15.00 per share~~$50.0 million of the Company’s common stock ~~which~~during the three-year period ending June 24, 2024. While having $1.6 million of availability as of June 30, 2023, this program was fully utilized during the ~~initial public offering price, which will vest in 25% increments annually on each~~first quarter ended October 1, 2023.

On July 24, 2023, the board of directors of the ~~first four anniversaries~~Company authorized a new share repurchase program under which the Company may repurchase up to $50.0 million of its outstanding shares of common stock. The new authorization became effective upon the completion of the ~~grant date. In June 2016,~~Company's existing $50.0 million stock repurchase authorization.

During the three months ended March 31, 2024 and April 2, 2023, the Company ~~reduced~~repurchased 73,562 shares and 210,150 shares of common stock for $1.6 million and $7.0 million, respectively, in cash, excluding related fees and expenses. During the ~~exercise price~~nine months ended March 31, 2024 and April 2, 2023, the Company repurchased 529,545 shares and 625,794 shares of ~~these options~~common stock for $11.7 million and $16.0 million, respectively, in cash, excluding related fees and expenses. As of March 31, 2024, $39.9 million remained available under the program.

14.

SEGMENT INFORMATION

Reportable Segments

Operating segments are identified as components of an enterprise about which discrete financial information is available for evaluation by ~~$4.30 per share, which was~~ the ~~amount~~CODM in making decisions on how to allocate resources and assess performance. For the three and nine months ended March 31, 2024, the Company’s CODM regularly assessed the operating performance of the special cash dividend paid in June 2016. Therefore, the exercise price of the options is $10.70 per share. The other terms of the options remained unchanged. We estimated the grant date fair value of stock options using the Black-Scholes pricing model assuming a risk-free interest rate of 1.93%, an expected term of 6.25 years, no dividend yield and a volatility rate of 56.7%.

~~13.SEGMENT INFORMATION~~

~~The Company designs, manufactures, and markets recreational sport boats and has two~~Company’s boat brands under three operating and reportable segments: ~~MasterCraft and NauticStar. The~~ ~~Company’s~~ ~~segments are defined by management’s reporting structure, product brands, and distribution channels.~~

•

The MasterCraft ~~product brand consists of~~segment produces boats at its Vonore, Tennessee facility. These are premium recreational performance sport boats primarily used for water skiing, wakeboarding, ~~and~~ wake surfing, and general recreational boating.

•

The ~~Company distributes the MasterCraft product brand through~~Crest segment produces pontoon boats at its ~~dealer network. The NauticStar product brand consists of recreational~~Owosso, Michigan facility. Crest boats are primarily used for ~~salt water fishing, and~~ general recreational boating.

•

The ~~Company~~Aviara segment produces luxury day boats at its Merritt Island, Florida facility. Aviara boats are primarily used for general recreational boating.

Each segment distributes ~~the NauticStar product brand~~its products through its own independent dealer network. ~~The Company’s chief operating decision maker~~ ~~(“CODM”)~~ ~~regularly reviews~~Each segment also has its own management structure which is responsible for the operations of the segment and is directly accountable to the CODM for the operating performance of ~~each product brand including measures of performance~~the segment, which is regularly assessed by the CODM who allocates resources based on ~~income from operations. The Company considers each of the product brands to be an operating segment and has further concluded~~ that presenting disaggregated information of these two operating segments provides meaningful information as certain economic characteristics are dissimilar as well as the characteristics of the customer base served.performance.

~~Management evaluates performance based on business segment operating income.~~ The Company files a consolidated income tax return and does not allocate income taxes and other ~~corporate level~~corporate-level expenses, including interest, to operating segments.

All material corporate costs are included in the MasterCraft segment.

~~Table of Contents~~

~~MCBC HOLDINGS, INC. AND SUBSIDIARIES~~

~~NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Dollars in thousands, except share and per share data)~~

~~The following tables present~~Selected financial information for the Company’s reportable segments was as follows:


	For the Three Months Ended March 31, 2024
	MasterCraft		Crest			Aviara			Consolidated
Net sales	$	69,783	$	14,194		$	11,731		$	95,708
Operating income (loss)		7,616		(864	)		(2,756	)		3,996
Depreciation and amortization		1,288		817			737			2,842
Purchases of property, plant and equipment		2,591		584			1,329			4,504


	For the Nine Months Ended March 31, 2024
	MasterCraft		Crest			Aviara			Consolidated
Net sales	$	218,319	$	49,713		$	31,374		$	299,406
Operating income (loss)		28,202		(133	)		(8,502	)		19,567
Depreciation and amortization		3,872		2,440			2,015			8,327
Purchases of property, plant and equipment		6,207		1,761			4,654			12,622


	For the Three Months Ended April 2, 2023
	MasterCraft		Crest		Aviara			Consolidated
Net sales	$	117,630	$	36,369	$	12,777		$	166,776
Operating income (loss)		25,298		4,962		(1,234	)		29,026
Depreciation and amortization		1,386		701		535			2,622
Purchases of property, plant and equipment		3,151		2,089		1,716			6,956


	For the Nine Months Ended April 2, 2023
	MasterCraft		Crest		Aviara			Consolidated
Net sales	$	339,315	$	116,595	$	39,570		$	495,480
Operating income (loss)		72,269		17,576		(2,136	)		87,709
Depreciation and amortization		4,132		2,104		1,597			7,833
Purchases of property, plant and equipment		8,434		6,292		4,145			18,871

The following table presents total assets for the ~~three and six months ended December 31, 2017 and January 1, 2017, respectively, and the~~ Company’s ~~financial position at December 31, 2017 and June 30, 2017, respectively.~~reportable segments.

Three Months Ended December 31, 2017


MasterCraft

NauticStar

Consolidated

Net sales

$
58,239

$
20,196

$
78,435

Cost of sales

41,856

16,645

58,501

Operating income

9,113

1,669

10,782

Depreciation and amortization

876

602

1,478


	March 31, 2024		June 30, 2023
Assets:
MasterCraft	$	251,297	$	259,201
Crest		48,299		53,435
Aviara		41,286		41,340
Total assets	$	340,882	$	353,976

Three Months Ended January 1, 2017


MasterCraft

NauticStar

Consolidated

Net sales

$
51,134

$
—

$
51,134

Cost of sales

36,848

—

36,848

Operating income

7,039

—

7,039

Depreciation and amortization

825

—

825

Six Months Ended December 31, 2017


MasterCraft

NauticStar

Consolidated

Net sales

$
123,288

$
20,196

$
143,484

Cost of sales

88,742

16,645

105,387

Operating income

20,177

1,669

21,846

Depreciation and amortization

1,608

602

2,210

Six Months Ended January 1, 2017


MasterCraft

NauticStar

Consolidated

Net sales

$
111,823

$
—

$
111,823

Cost of sales

79,728

—

79,728

Operating income

18,674

—

18,674

Depreciation and amortization

1,622

—

1,622

As of December 31, 2017

As of June 30, 2017
Assets

MasterCraft

$
82,978

$
83,321
NauticStar

85,664

—
Total Assets(a)

$
168,642

$
83,321

~~(a)~~

Total assets as of December 31, 2017 includes goodwill of $29,593 and $37,225 related to MasterCraft and NauticStar, respectively. Total assets as of June 30, 2017 includes goodwill of $29,593 related to MasterCraft.

ITEM ~~2.MANAGEMENT’S~~2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

The following discussion and analysis should be read together with the unaudited condensed consolidated financial statements and notes thereto included elsewhere in this Quarterly Report on Form 10-Q. In addition, the statements in this discussion and analysis regarding ~~industry outlook,~~ our expectations ~~regarding~~concerning the performance of our business, anticipated financial results, liquidity and the other non-historical statements are forward-looking statements. These forward-looking statements are subject to numerous risks and uncertainties, including, but not limited to, the ~~successful integration of Nautic Star, LLC into our business and the~~ risks and uncertainties described in “Cautionary Note Regarding Forward-Looking Statements” above and in “Risk Factors” set forth in our 2023 Annual Report ~~on Form 10-K for the fiscal year ended June 30, 2017~~ and in ~~our~~this Quarterly Report on Form ~~10-Q for the fiscal quarter ended October 1, 2017.~~10-Q. Our actual results may differ materially from those contained in or implied by any forward-looking statements.

~~Overview~~

We are a world-renowned innovator, designer, manufacturer, and marketer of recreational sport boats, including performance sport boats, salt water fishing and general recreational boats. We have a leading market positionCertain statements in the ~~U.S.,~~following discussions are based on non-GAAP financial measures. A “non-GAAP financial measure” is a ~~strong international presence,~~numerical measure of a registrant’s historical or future financial performance, financial position or cash flows that excludes amounts, or is subject to adjustments that have the effect of excluding amounts, that are included in the most directly comparable measure calculated and ~~dealers around~~presented in accordance with U.S. GAAP in the ~~world. Our boats~~statements of operations, balance sheets or statements of cash flows of the issuer; or includes amounts, or is subject to adjustments that have the effect of including amounts, that are excluded from the most directly comparable measure so calculated and presented. Non-GAAP financial measures do not include operating and statistical measures. The Company includes non-GAAP financial measures in Management’s Discussion and Analysis, as the Company’s management believes that these measures and the information they provide are useful to users of the financial statements, including investors, because they permit users of the financial statements to view the Company’s performance using the same tools that management utilizes and to better evaluate the Company’s ongoing business performance. In order to better align the Company’s reported results with the internal metrics used ~~for water skiing, wakeboarding, wake surfing, and salt water fishing~~by the Company's management to evaluate business performance as well as to provide better comparisons to prior periods and peer data, non-GAAP measures exclude the impact of purchase accounting amortization related to business acquisitions.

Discontinued Operations

The Company's results for all periods presented, as discussed in Management's Discussion and Analysis, are presented on a continuing operations basis. Results related to our former NauticStar business that was sold on September 2, 2022 are reported as discontinued operations for all periods presented. See Note 3 in Notes to Unaudited Condensed Consolidated Financial Statements for more information on Discontinued Operations.

Overview

As anticipated, general ~~recreational boating. Our robust product portfolio is manufactured~~market volatility and economic headwinds continue to create uncertainty and softness in the ~~highest standards of quality, performance, and styling.~~

We sell our boats through an extensive network of independent dealers in North America and internationally. Through our MasterCraft segment, we partner with 96 North American dealers with 160 locations and 50 international dealers with 82 locations throughout the restretail environment. As previously disclosed, because of the world. Through our NauticStar segment, we partner with 80 North American dealers with 84 locations. For the six months ended December 31, 2017, 91.1% of our net sales were generated from North America and 8.9% of our net sales were generated from outside of North America.

~~Outlook~~

~~Our sales are impacted by general economic conditions, which affect the~~anticipated softness in retail demand, for our products, the demand for optional features, the availability of credit for our dealers and retail consumers, and overall consumer confidence. While the performance sport boat, salt water fishing and general recreational categories have grown in recent years, new unit sales remain significantly below historical peaks. While there is no guarantee that our market will continue to grow, we believe that increased consumer demand, limited used boat inventory and the superior quality, performance, styling, and value proposition of our recently released boats present a long runway for future growth. Our revamped manufacturing and product development processes have led to operational efficiencies which we expect will continue to drive margin expansion.

~~Recent Transactions~~

~~Acquisition of Nautic Star, LLC~~

~~On October 2, 2017, we completed the acquisition of Nautic Star, LLC. The aggregate purchase price was $80.5 million, including customary adjustments for the amount of working capital in the acquired business at the closing date.~~ ~~A portion of the purchase price was deposited into an escrow account in order to secure certain post-closing obligations of the~~

~~former members of NauticStar. Due to the timing of the acquisition,~~ the Company has ~~not completed the valuation of assets acquired or liabilities assumed.~~

~~Third Amended and Restated Credit Agreement~~

On October 2, 2017, we entered into a Third Amended and Restated Credit and Guaranty Agreement with Fifth Third Bank, as the agent and letter of credit issuer, and the lenders party thereto (the “Third Amended Credit Agreement”). The Third Amended Credit Agreement replaced and paid off our Second Amended and Restated Credit Agreement, dated May 27, 2016. The Third Amended Credit Agreement provides usapproached its wholesale production plan for fiscal 2024 with a ~~$145 million senior secured credit facility, consisting~~prudent level of caution and a ~~$115 million term loan (the “Third Term Loan”~~focus on rebalancing dealer inventories consistent with the expected retail demand. As a result, net sales decreased and gross margin declined as a result of lower cost absorption due to decreased sales volumes.

On March 4, 2024, Frederick Brightbill, Chief Executive Officer ("CEO") and Chairman of the Board of Directors announced his retirement as CEO of the Company, effective March 18, 2024, and as Chairman of the Company’s Board of Directors (the “Board”), effective June 30, 2024, at which time, Mr. Brightbill will serve as a ~~$30 million revolving credit facility. On October 17, 2017,~~consultant through June 30, 2025. In connection with Mr. Brightbill’s retirement, the Company appointed Brad Nelson as CEO, effective March 18, 2024. Mr. Nelson also joined the Board at that time, with the size of the Board increasing from eight members to nine. Rock Lambert, the Company’s Lead Independent Director, will assume the role of Chairman of the Board, effective July 1, 2024.

During the three and ~~December 1, 2017,~~nine months ended March 31, 2024, we ~~made voluntary payments on the Third Term Loan of $10.0~~recognized $1.2 million and ~~$7.0~~$1.7 million, respectively, ~~out~~ of ~~excess cash.~~

~~Seasonality and Other Factors That Affect Our Business~~

~~Our operating results are subject to annual and seasonal fluctuations resulting from a variety of factors, including:~~

~~seasonal variations~~CEO transition costs in retail demand for boats, with a significant majority of sales occurring during peak boating season, which we attempt to manage by providing incentive programs and floor plan subsidies to encourage dealer purchases throughout the year, which may include offering off-season retail promotions to our dealers in seasonally slow months, during and ahead of boat shows, to encourage retail demand;

product mix, which is driven by boat model mix and option order rates; product mix can significantly affect margins, sales of larger boats and boats with optional content produce higher absolute profits;

~~inclement weather, which can affect production at our manufacturing facility as well as consumer demand;~~

~~competition from other performance sports boat, salt water fishing boat and general recreational boat manufacturers;~~

~~general economic conditions; and~~

~~foreign currency exchange rates.~~

~~Key Performance Measures~~

From time to time we use certain key performance measures in evaluating our business and results of operations and we may refer to one or more of these key performance measures in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” These key performance measures include:

~~Unit volume~~ ~~— We define unit volume as the number of our boats sold to our dealers during a period.~~

~~Net sales per unit~~ ~~— We define net sales per unit as net sales divided by unit volume.~~

~~Gross margin~~ ~~— We define gross margin as gross profit divided by net sales, expressed as a percentage.~~

~~Adjusted EBITDA~~ — We define Adjusted EBITDA as earnings before interest expense, income taxes, depreciation, and amortization, as further adjusted to eliminate certain non-cash charges and unusual items that we do not consider to be indicative of our ongoing operations. For a reconciliation of Adjusted EBITDA to net income, see “Non-GAAP Measures” below.

~~Adjusted net income~~ ~~— We define Adjusted net income as net income excluding income taxes adjusted to eliminate certain non-cash charges and unusual items that we do not consider to be indicative of our ongoing~~

~~operations and an adjustment for income tax expense at a normalized annual effective tax rate. For a reconciliation of Adjusted net income to net income, see “Non-GAAP Measures” below.~~

~~Components of Results of Operations~~

~~Net Sales~~

We generate sales from the sale of boats, trailers, and accessories to our dealers. The substantial majority of our net sales are derived from the sale of boats, including optional features included at the time of the initial wholesale purchase of the boat. Net sales consist of the following:

~~Gross sales, which are derived from:~~

~~Boat sales~~ ~~— sales of boats to our dealer network. In addition, nearly all of our boat sales include optional feature upgrades, which increase the average selling price of our boats; and~~

~~Trailers, parts and accessories, and other revenues~~ ~~— sales of boat trailers, replacement and aftermarket boat parts and accessories, and transportation charges to our dealer network.~~

~~Net of:~~

~~Dealer programs and flooring subsidies~~ — incentives, including rebates and subsidized flooring, we provide to our dealers to drive volume and level dealer purchases throughout the year. If a dealer meets certain volume levels over the course of the year during certain defined periods, the dealer will be entitled to a specified rebate. These rebates change annually and may include volume and exclusivity incentives. Dealers who participate in our floor plan financing program may be entitled to have their flooring costs subsidized by us to promote dealer orders in the offseason.

~~Cost of Sales~~

Our cost of sales includes all of the costs to manufacture our products, including raw materials, components, supplies, direct labor, and factory overhead. For components and accessories manufactured by third-party vendors, our costs are the amounts invoiced to us by the vendors. Cost of sales includes shipping and handling costs, depreciation expense related to manufacturing equipment and facilities, and warranty costs associated with the repair or replacement of our boats under warranty.

~~Operating Expenses~~

Our operating expenses include selling and marketing costs, general and administrative costs, and amortization costs. These items include personnel and related expenses, non-manufacturing overhead, and various other operating expenses. Further, selling and marketing expenditures include the cost of advertising and marketing materials. General and administrative expenses include, among other things, salaries, benefits, and other personnel related expenses for employees engaged in product development, engineering, finance, information technology, human resources, and executive management. Otherexpense within the condensed consolidated statements of operations. CEO transition costs include ~~outside~~amounts paid to the former CEO under the terms of his retirement and consulting agreement and related legal fees. Also included are recruiting and ~~accounting fees, acquisition or integration~~relocation costs related ~~expenses, investor relations, risk management (insurance), and other administrative costs.~~to the new CEO.

~~Other Expense~~

Other expense includes interest expense. Interest expense consists of interest charged under our credit facilities, including deferred financing fees and debt issuance costs written off in connection with the pay down of amounts owed on our credit facilities.

~~Income Tax Expense~~

Our accounting for income tax expense reflects management’s assessment of future tax assets and liabilities based on assumptions and estimates for timing, likelihood of realization, and tax laws existing at the time of evaluation. We record a valuation allowance, when appropriate, to reduce deferred tax assets to an amount that is more likely than not to be realized.

Results of Continuing Operations

Consolidated Results

The table below ~~sets forth~~presents our consolidated results of operations for the ~~periods presented. Our financial results for these periods are not necessarily indicative of the financial results that we will achieve in future periods.~~

Three Months Ended

Six Months Ended


December 31, 2017

January 1, 2017

December 31, 2017

January 1, 2017


(Unaudited)

(Unaudited)

(Dollars in thousands)

(Dollars in thousands)

Consolidated statement of operations:




Net sales

$
78,435

$
51,134

$
143,484

$
111,823

Cost of sales

58,501

36,848

105,387

79,728

Gross profit

19,934

14,286

38,097

32,095

Operating expenses:

Selling and marketing

3,672

2,444

6,409

4,498

General and administrative

4,955

4,776

9,290

8,869

Amortization of intangible assets

525

27

552

54

Total operating expenses

9,152

7,247

16,251

13,421

Operating income

10,782

7,039

21,846

18,674

Other expense:

Interest expense

1,139

512

1,630

1,123

Income before income tax expense

9,643

6,527

20,216

17,551

Income tax expense

1,634

2,496

5,161

6,537

Net income

$
8,009

$
4,031

$
15,055

$
11,014

Additional financial and other data:

Unit volume:

MasterCraft

675

631

1,450

1,349

NauticStar

526

—

526

—

MasterCraft sales

$
58,239

$
51,134

$
123,288

$
111,823

NauticStar sales

$
20,196

$
—

$
20,196

$
—

Consolidated sales

$
78,435

$
51,134

$
143,484

$
111,823

Per Unit:

MasterCraft sales

$
86

$
81

$
85

$
83

NauticStar sales

$
38

$
—

$
38

$
—

Consolidated sales

$
65

$
81

$
73

$
83

Gross margin

25.4
%

27.9
%

26.6
%

28.7
%

~~Three~~three and nine months ~~ended December 31, 2017 Compared to Three months ended January 1, 2017~~ended:


	Three Months Ended						2024 vs. 2023						Nine Months Ended						2024 vs. 2023
	March 31,			April 2,						%			March 31,			April 2,						%
	2024			2023			Change			Change			2024			2023			Change			Change
(Dollar amounts in thousands)
Consolidated statements of operations:
NET SALES	$	95,708		$	166,776		$	(71,068	)		(42.6	%)	$	299,406		$	495,480		$	(196,074	)		(39.6	%)
COST OF SALES		77,360			124,178			(46,818	)		(37.7	%)		240,493			368,682			(128,189	)		(34.8	%)
GROSS PROFIT		18,348			42,598			(24,250	)		(56.9	%)		58,913			126,798			(67,885	)		(53.5	%)
OPERATING EXPENSES:
Selling and marketing		3,924			3,927			(3	)		(0.1	%)		10,538			10,748			(210	)		(2.0	%)
General and administrative		9,978			9,156			822			9.0	%		27,446			26,874			572			2.1	%
Amortization of other intangible assets		450			489			(39	)		(8.0	%)		1,362			1,467			(105	)		(7.2	%)
Total operating expenses		14,352			13,572			780			5.7	%		39,346			39,089			257			0.7	%
OPERATING INCOME		3,996			29,026			(25,030	)		(86.2	%)		19,567			87,709			(68,142	)		(77.7	%)
OTHER INCOME (EXPENSE):
Interest expense		(762	)		(695	)		(67	)		9.6	%		(2,494	)		(1,923	)		(571	)		29.7	%
Interest income		1,398			1,195			203			17.0	%		4,164			1,967			2,197			111.7	%
INCOME BEFORE INCOME TAX EXPENSE		4,632			29,526			(24,894	)		(84.3	%)		21,237			87,753			(66,516	)		(75.8	%)
INCOME TAX EXPENSE		806			6,744			(5,938	)		(88.0	%)		4,408			20,353			(15,945	)		(78.3	%)
NET INCOME FROM CONTINUING OPERATIONS	$	3,826		$	22,782		$	(18,956	)		(83.2	%)	$	16,829		$	67,400		$	(50,571	)		(75.0	%)
Additional financial and other data:
Unit sales volume:
MasterCraft		468			900			(432	)		(48.0	%)		1,453			2,457			(1,004	)		(40.9	%)
Crest		298			722			(424	)		(58.7	%)		1,025			2,344			(1,319	)		(56.3	%)
Aviara		39			34			5			14.7	%		92			100			(8	)		(8.0	%)
Consolidated unit sales volume		805			1,656			(851	)		(51.4	%)		2,570			4,901			(2,331	)		(47.6	%)
Net sales:
MasterCraft	$	69,783		$	117,630		$	(47,847	)		(40.7	%)	$	218,319		$	339,315		$	(120,996	)		(35.7	%)
Crest		14,194			36,369			(22,175	)		(61.0	%)		49,713			116,595			(66,882	)		(57.4	%)
Aviara		11,731			12,777			(1,046	)		(8.2	%)		31,374			39,570			(8,196	)		(20.7	%)
Consolidated net sales	$	95,708		$	166,776		$	(71,068	)		(42.6	%)	$	299,406		$	495,480		$	(196,074	)		(39.6	%)
Net sales per unit:
MasterCraft	$	149		$	131		$	18			13.7	%	$	150		$	138		$	12			8.7	%
Crest		48			50			(2	)		(4.0	%)		49			50			(1	)		(2.0	%)
Aviara		301			376			(75	)		(19.9	%)		341			396			(55	)		(13.9	%)
Consolidated net sales per unit		119			101			18			17.8	%		117			101			16			15.8	%
Gross margin		19.2	%		25.5	%	(630) bps							19.7	%		25.6	%	(590) bps

~~Net Sales.~~Net sales ~~for~~decreased $71.1 million and $196.1 million during the ~~three~~third quarter and first nine months ~~ended December 31, 2017, increased 53.4%, or $27.3 million to $78.4 million~~of fiscal 2024 when compared ~~to $51.1 million for~~with the ~~three months ended January 1, 2017.~~same prior-year periods. The ~~increase was primarily~~decreases in net sales were due to ~~the inclusion of NauticStar which increased net sales by 39.5%, or $20.2 million. The remaining increase of 13.9%, or $7.1 million, was attributable to an increase in MasterCraft~~lower unit ~~sales~~ volume ~~favorable product mix~~ and ~~price increases.~~

~~Cost of Sales.~~ Our cost of sales increased $21.7 million, or 58.8%, to $58.5 million for the three months ended December 31, 2017 compared to $36.8 million for the three months ended January 1, 2017. The increase in cost of sales resulted primarily

from the inclusion of NauticStar, which increased cost of sales by 45.2%, or $16.7 million. The remaining increase was primarily due to higher material and shipping costs and a 7.0% increase in MasterCraft unit volume.

~~Gross Profit.~~ For the three months ended December 31, 2017, our gross profit increased $5.6 million, or 39.5%, to $19.9 million compared to $14.3 million for the three months ended January 1, 2017. The inclusion of NauticStar contributed $3.5 million to gross profit. An increase in MasterCraft unit sales volume, a favorable product mix and price increases, offset by higher material and shipping costs accounted for the remaining increase in gross profit. Gross margin decreased to 25.4% for the three months ended December 31, 2017 compared to 27.9% for the three months ended January 1, 2017. The decrease in gross margin was primarily due to the dilutive effect from the inclusion of NauticStar’s gross margin which is in the high-teens.

~~Operating Expenses.~~ Selling and marketing expense increased $1.3 million, or 50.2%, to $3.7 million for the three months ended December 31, 2017 compared to $2.4 million for the three months ended January 1, 2017. This increase resulted mainly from the inclusion of NauticStar, which increased selling and marketing expenses by $0.6 million, an increase in dealer ~~meeting costs~~incentives, partially offset by higher prices and ~~an increase in promotion activities. General~~favorable model mix and ~~administrative expense~~options. Dealer incentives include measures taken by the Company to assist dealers as the retail environment remains competitive.

Gross margin percentage declined 630 basis points and 590 basis points during the third quarter and first nine months of fiscal 2024, respectively, when compared with the same prior-year periods. Lower margins were the result of lower cost absorption due to planned decreased unit volume and higher dealer incentives, partially offset by higher prices and favorable model mix and options.

Operating expenses increased by $0.2 million, or 3.7%, to $5.0 million for the three months ended December 31, 2017 compared to $4.8 million for the three months ended January 1, 2017. This increase resulted mainly from the inclusion of NauticStar, which increased general and administrative expenses by $0.8 million and ~~an increase of $0.5~~$0.3 million for legal and advisory fees related to our acquisition of NauticStar. Increases in general and administrative expenses due to NauticStar were partially offset by a decrease of $0.9 million for legal and advisory fees related to our litigation with Malibu Boats, which was subsequently settled during the ~~fourth~~third quarter and first nine months of fiscal 2017. Operating expenses as a percentage of net sales was 11.7% during the three months ended December 31, 2017 compared to 14.2% for the three months ended January 1, 2017. This favorable impact resulted from leverage experienced through significant net sales increases compared to increases in selling and marketing expenses and general and administrative expenses.

~~Other Expense.~~ ~~Interest expense increased for the three months ended December 31, 2017 compared to the three months ended January 1, 2017. The increase is due to an increase in our term loan balance~~2024, respectively, when compared to the ~~principal balance owed on our term loan~~same prior-year periods. The increases in operating expenses were a result of CEO transition and related

share-based compensation costs, which were $1.9 million and $2.4 million during the ~~three~~third quarter and first nine months ~~ended January 1, 2017.~~of fiscal 2024, respectively.

Segment Results

~~Income Tax Expense.~~ ~~Our~~MasterCraft Segment

The following table sets forth MasterCraft segment results for the three and nine months ~~ended December 31, 2017 reflect~~ended:


	Three Months Ended				2024 vs. 2023						Nine Months Ended				2024 vs. 2023
	March 31,		April 2,					%			March 31,		April 2,					%
(Dollar amounts in thousands)	2024		2023		Change			Change			2024		2023		Change			Change
Net sales	$	69,783	$	117,630	$	(47,847	)		(40.7	%)	$	218,319	$	339,315	$	(120,996	)		(35.7	%)
Operating income		7,616		25,298		(17,682	)		(69.9	%)		28,202		72,269		(44,067	)		(61.0	%)
Purchases of property, plant and equipment		2,591		3,151		(560	)		(17.8	%)		6,207		8,434		(2,227	)		(26.4	%)

Unit sales volume		468		900		(432	)		(48.0	%)		1,453		2,457		(1,004	)		(40.9	%)
Net sales per unit	$	149	$	131	$	18			13.7	%	$	150	$	138	$	12			8.7	%

Net sales decreased $47.8 million during the ~~impact~~third quarter of fiscal 2024 when compared with the ~~enactment of the Tax Cuts~~same prior-year period. The decrease was driven by lower unit volume and Jobs Act (“Tax Reform Act”), which was signed into law on December 22, 2017. The Tax Reform Act reduced federal corporate income tax rates and changed numerous other provisions. As we have a June 30 fiscal year-end, the lower corporate federal income tax rate will be phased in, resulting in a U.S. federal statutory tax rate of 28.1% for our fiscal year ending June 30, 2018, and 21% for subsequent fiscal years. The quarter ended December 31, 2017 included a year-to-date provisional expense of approximately $171 to reflect federal deferred taxes at the lower blended effective tax rate. This adjustment to the provision was more thanincreased dealer incentives, partially offset by ~~a one-time discrete provisional benefit~~favorable model mix and options and higher prices. Dealer incentives include rebate programs and other measures taken by the Company to assist dealers as the retail environment remains competitive.

Net sales decreased $121.0 million during the first nine months of ~~approximately $651~~fiscal 2024 when compared with the same prior-year period. The decrease was driven by lower unit volume and increased dealer incentives, partially offset by higher prices and favorable model mix and options. Dealer incentives include higher floor plan financing costs as a result of ~~applying~~increased dealer inventories and interest rates, and other incentives as the ~~new lower federal~~retail environment remains competitive.

Operating income ~~tax rates~~decreased $17.7 million and $44.1 million during third quarter and first nine months of fiscal 2024, respectively, when compared with the same prior-year periods. The decreases were driven by decreased sales volume, higher dealer incentives, and CEO transition and related share-based compensation costs, partially offset by higher prices and favorable model mix and options.

Crest Segment

The following table sets forth Crest segment results for the three and nine months ended:


	Three Months Ended					2024 vs. 2023						Nine Months Ended					2024 vs. 2023
	March 31,			April 2,					%			March 31,			April 2,					%
(Dollar amounts in thousands)	2024			2023		Change			Change			2024			2023		Change			Change
Net sales	$	14,194		$	36,369	$	(22,175	)		(61.0	%)	$	49,713		$	116,595	$	(66,882	)		(57.4	%)
Operating income (loss)		(864	)		4,962		(5,826	)		(117.4	%)		(133	)		17,576		(17,709	)		(100.8	%)
Purchases of property, plant and equipment		584			2,089		(1,505	)		(72.0	%)		1,761			6,292		(4,531	)		(72.0	%)

Unit sales volume		298			722		(424	)		(58.7	%)		1,025			2,344		(1,319	)		(56.3	%)
Net sales per unit	$	48		$	50	$	(2	)		(4.0	%)	$	49		$	50	$	(1	)		(2.0	%)

Net sales decreased $22.2 million and $66.9 million during the third quarter and first nine months of fiscal 2024, respectively, when compared to ~~our net deferred tax liabilities.~~

~~The changes included in~~ the ~~Tax Reform Act are broad and complex. The final transition impacts may differ from the above estimate,~~same prior-year periods, due to ~~among other things, changes in interpretations, any legislative action to address questions that arise because~~decreased volume and unfavorable model mix and options, partially offset by higher prices.

Operating income for the third quarter of ~~the Tax Reform Act, any changes in accounting standards for income taxes or related interpretations in response~~fiscal 2024 decreased $5.8 million when compared to the ~~Tax Reform Act, or any updates or changes to estimates we have utilized to calculate~~same prior-year period. The decrease was primarily the transition impacts. The SEC issued guidance in Staff Accounting Bulletin 118 which allows us to record provisional amounts during a one-year measurement period. We have determined a reasonable estimateresult of decreased net sales, as discussed above.

Operating income for the ~~measurement and accounting for certain effects~~first nine months of the Tax Reform Act, including the re-measurement of our net deferred tax assets and liabilities, which have been reflected as provisional amounts in the December 31, 2017 financial statements. The amounts represent our best estimates based on records, information, and current guidance. Additional information and analysis is required to finalize the impact that the Tax Reform Act will have on our full year financial results. This includes filing the fiscal ~~2017 United States~~

~~federal income tax return, which could impact our estimated deferred income tax assets and liabilities. Although we do not anticipate material adjustments~~2024 decreased $17.7 million when compared to the ~~provisional amounts, final~~same prior-year period. The decrease was primarily the result of decreased net sales, as discussed above, and increased dealer incentives.

Aviara Segment

The following table sets forth Aviara segment results ~~could vary from these provisional amounts. We currently anticipate finalizing~~for the three and ~~recording any resulting adjustments~~nine months ended:


	Three Months Ended						2024 vs. 2023						Nine Months Ended						2024 vs. 2023
	March 31,			April 2,						%			March 31,			April 2,						%
(Dollar amounts in thousands)	2024			2023			Change			Change			2024			2023			Change			Change
Net sales	$	11,731		$	12,777		$	(1,046	)		(8.2	%)	$	31,374		$	39,570		$	(8,196	)		(20.7	%)
Operating loss		(2,756	)		(1,234	)		(1,522	)		123.3	%		(8,502	)		(2,136	)		(6,366	)		298.0	%
Purchases of property, plant and equipment		1,329			1,716			(387	)		(22.6	%)		4,654			4,145			509			12.3	%

Unit sales volume		39			34			5			14.7	%		92			100			(8	)		(8.0	%)
Net sales per unit	$	301		$	376		$	(75	)		(19.9	%)	$	341		$	396		$	(55	)		(13.9	%)

Net sales decreased $1.0 million during the third quarter of fiscal 2024 when compared to the same prior-year period, due to unfavorable model mix and options, partially offset by ~~the end of our current fiscal year ending June 30, 2018.~~favorable volume and higher prices.

~~Our income tax expense was $1.6~~Net sales decreased $8.2 million for the ~~three~~first nine months ~~ended December 31, 2017, reflecting an effective tax rate~~ of ~~16.9%. Our effective tax rate during~~fiscal 2024 when compared to the ~~three months ended December 31, 2017 was lower than the 28.1% statutory rate primarily~~same prior-year period, due to ~~the impact of the Tax Reform Act,~~unfavorable model mix and ~~a permanent benefit associated with the domestic production activities deduction, which was~~options, decreased volume and higher dealer incentives, partially offset by ~~the inclusion of the state tax rate in the overall effective rate.~~higher prices.

~~Six months ended December 31, 2017 Compared to Six months ended January 1, 2017~~

~~Net Sales.~~ ~~Net sales for the six months ended December 31, 2017,~~Operating losses increased ~~28.3%, or $31.7 million to $143.5 million compared to $111.8~~$1.5 million for the six months ended January 1, 2017. The increase was primarily due to the inclusion of NauticStar which increased net sales by 18.1%, or $20.2 million. The remaining increase of 10.2%, or $11.5 million, was attributable to MasterCraft primarily due to an increase in unit sales volume, favorable product mix and price increases.

~~Cost of Sales.~~ Our cost of sales increased $25.7 million, or 32.2%, to $105.4 million for the six months ended December 31, 2017 compared to $79.7 million for the six months ended January 1, 2017. The increase in cost of sales resulted primarily from the inclusion of NauticStar, which increased cost of sales by 20.9%, or $16.6 million. The remaining increase was primarily due to higher material and shipping costs, a 7.5% increase in MasterCraft unit volume and ~~an increase in cost over the prior year due to our model year change over that occurred during the first~~third quarter of fiscal ~~2018~~.

~~Gross Profit.~~ ~~For the six months ended December 31, 2017, our gross profit increased $6.0 million, or 18.7%, to $38.1 million~~2024 when compared to ~~$32.1 million for~~ the ~~six months ended January 1, 2017. The inclusion of NauticStar contributed $3.5 million to gross profit. The remaining increase was~~same prior-year period, due to ~~an increase in MasterCraft unit sales volume~~ unfavorable model mix and ~~favorable pricing,~~options and inefficiencies related to the ramp up of new product launches, partially offset by higher ~~material~~prices and shipping costs. Gross margin decreased to 26.6% for the six months ended December 31, 2017 compared to 28.7% for the six months ended January 1, 2017. The decrease in gross margin was primarily due to the dilutive effect from the inclusion of NauticStar’s gross margin which is in the high-teens.favorable volume.

Operating ~~Expenses.~~ ~~Selling and marketing expense~~losses increased ~~$1.9 million, or 42.5%, to~~ $6.4 million for the ~~six~~first nine months ended December 31, 2017 compared to $4.5 million for the six months ended January 1, 2017. This increase resulted mainly from the inclusion of NauticStar, which increased selling and marketing expenses by $0.6 million, an increase in dealer training costs, an increase in dealer meeting costs and increased promotion activities related to the introduction of the redesigned 2018 MasterCraft XStar. General and administrative expense increased by $0.4 million, or 4.7%, to $9.3 million for the six months ended December 31, 2017 compared to $8.9 million for the six months ended January 1, 2017. This increase resulted mainly from the inclusion of NauticStar, which increased general and administrative expenses by $0.8 million, and an increase of $1.4 million for legal and advisory fees related to our acquisition of NauticStar. Increases in general and administrative expenses due to NauticStar were partially offset by a decrease of $1.7 million for legal and advisory fees related to our litigation with Malibu Boats, which was subsequently settled during the fourth quarter of fiscal 2017. Operating expenses as a percentage of net sales was 11.3% during the six months ended December 31, 2017 compared to 12.0% for the six months ended January 1, 2017. This favorable impact resulted from leverage experienced through significant net sales increases compared to increases in selling and marketing expenses and general and administrative expenses.

~~Other Expense.~~ ~~Interest expense increased for the six months ended December 31, 2017 compared to the six months ended January 1, 2017. The increase is due to an increase in our term loan balance~~2024 when compared to the ~~principal balance owed on our term loan during the six months ended January 1, 2017.~~

~~Income Tax Expense.~~ Our results for the six months ended December 31, 2017 reflect the impact of the enactment of the Tax Cuts and Jobs Act (“Tax Reform Act”), which was signed into law on December 22, 2017. The Tax Reform Act reduced federal corporate income tax rates and changed numerous other provisions. As we have a June 30 fiscal year-end, the lower corporate federal income tax rate will be phased in, resulting in a U.S. federal statutory tax rate of 28.1% for our fiscal year ending June 30, 2018, and 21% for subsequent fiscal years. The six months ended December 31, 2017 included a year-to-date provisional expense of approximately $171same prior-year period, due to ~~reflect federal deferred taxes at the lower blended effective tax rate. This adjustment~~inefficiencies related to the ~~provision was more than offset by a one-time discrete provisional benefit~~ramp up of ~~approximately $651 as a result of applying the~~ new ~~lower federal income tax rates to our net deferred tax liabilities.~~

~~The changes included in the Tax Reform Act are broad~~product launches, higher dealer incentives, unfavorable model mix and complex. The final transition impacts may differ from the above estimate, due to, among other things, changes in interpretations, any legislative action to address questions that arise because of the Tax Reform Act, any changes in accounting standards for income taxes or related interpretations in response to the Tax Reform Act, or any updates or changes to estimates we have utilized to calculate the transition impacts. The SEC issued guidance in Staff Accounting Bulletin 118 which allows us to record provisional amounts during a one-year measurement period. We have determined a reasonable estimate for the measurementoptions and accounting for certain effects of the Tax Reform Act, including the re-measurement of our net deferred tax assets and liabilities, which have been reflected as provisional amounts in the December 31, 2017 financial statements. The amounts represent our best estimates based on records, information, and current guidance. Additional information and analysis is required to finalize the impact that the Tax Reform Act will have on our full year financial results. This includes filing the fiscal 2017 United States federal income tax return, which could impact our estimated deferred income tax assets and liabilities. Although we do not anticipate material adjustments to the provisional amounts, final results could vary from these provisional amounts. We currently anticipate finalizing and recording any resulting adjustments by the end of our current fiscal year ending June 30, 2018.

Our income tax expense was $5.2 million for the six months ended December 31, 2017, reflecting an effective tax rate of 25.5%. Our effective tax rate during the six months ended December 31, 2017 was lower than the 28.1% statutory rate primarily due to the impact of the Tax Reform Act, and a permanent benefit associated with the domestic production activities deduction, which wasdecreased volume, partially offset by ~~the inclusion of the state tax rate in the overall effective rate.~~higher prices and reduced warranty costs.

Non-GAAP Measures

EBITDA, Adjusted EBITDA, EBITDA margin, and Adjusted EBITDA margin

We define EBITDA as ~~earnings~~net income from continuing operations, before interest, ~~expense,~~ income taxes, depreciation and amortization. We define Adjusted EBITDA as EBITDA further adjusted to eliminate certain non-cash charges ~~and unusual~~or other items that we do not consider to be indicative of our core and/or ongoing ~~operations, including fees~~operations. For the periods presented herein, these adjustments include share-based compensation, business development consulting costs, and ~~expenses related to our follow-on offering, transaction expenses associated with the acquisition~~CEO transition costs. We define EBITDA margin and Adjusted EBITDA margin as EBITDA and Adjusted EBITDA, respectively, each expressed as a percentage of ~~NauticStar, acquisition related inventory step up adjustment~~Net sales.

Adjusted Net Income and ~~our stock-based compensation expense.~~ Adjusted Net Income per share

We define Adjusted ~~net income~~Net Income and Adjusted Net Income per share as net income from continuing operations, adjusted to eliminate certain non-cash charges ~~and unusual~~or other items that we do not consider to be indicative of our core and/or ongoing operations ~~including fees~~ and ~~expenses related to our follow-on offering, transaction expenses associated with the acquisition of NauticStar, our stock-based compensation expense, and an adjustment for~~reflecting income tax expense on adjusted net income before income taxes at ~~a normalized~~our estimated annual effective tax rate. ~~We define~~For the periods presented herein, these adjustments include other intangible asset amortization, share-based compensation, business development consulting costs, and CEO transition costs.

EBITDA, Adjusted EBITDA, EBITDA margin, Adjusted EBITDA margin, as Adjusted ~~EBITDA expressed as a percentage of sales. Adjusted EBITDA, Adjusted net income~~Net Income, and Adjusted ~~EBITDA margin~~Net Income per share, which we refer to collectively as the Non-GAAP Measures, are not measures of net income or operating income as determined under accounting principles generally accepted in the United States, ~~which we refer to as~~or U.S. GAAP. ~~Adjusted EBITDA and Adjusted net income~~The Non-GAAP Measures are not measures of performance in accordance with U.S. GAAP and should not be considered as an alternative to net income, net income per share, or operating cash flows determined in accordance with U.S. GAAP. Additionally, Adjusted EBITDA is not intended to be a measure of cash ~~flow for management’s discretionary use.~~flow. We believe that the inclusion of ~~EBITDA, Adjusted EBITDA, Adjusted EBITDA margin and Adjusted net income~~the Non-GAAP Measures is appropriate to provide additional information to investors

because securities analysts ~~noteholders~~ and ~~other~~ investors use ~~these non GAAP financial measures~~the Non-GAAP Measures to assess our operating performance across periods

on a consistent basis and to evaluate the relative risk of an investment in our securities. We use Adjusted ~~net income~~Net Income and Adjusted Net Income per share to facilitate a comparison of our operating performance on a consistent basis from period to period that, when viewed in combination with our results prepared in accordance with U.S. GAAP, provides a more complete understanding of factors and trends affecting our business than does U.S. GAAP ~~alone measures.~~measures alone. We believe Adjusted ~~net income~~Net Income and Adjusted Net Income per share assists our board of directors, management, investors, and ~~investors~~other users of the financial statements in comparing our net income on a consistent basis from period to period because it removes certain non-cash items and ~~non-recurring items. Adjusted EBITDA~~other items that we do not consider to be indicative of our core and/or ongoing operations and ~~Adjusted~~reflecting income tax expense on adjusted net income before income taxes at our estimated annual effective tax rate. The Non-GAAP Measures have limitations as an analytical tool and should not be considered in isolation or as a substitute for analysis of our results as reported under U.S. GAAP. Some of these limitations are:

Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future and Adjusted EBITDA does not reflect any cash requirements for such replacements;

•

Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future and the Non-GAAP measures do not reflect any cash requirements for such replacements;

~~Adjusted EBITDA does not reflect our cash expenditures, or future requirements for capital expenditures or contractual commitments;~~

•

The Non-GAAP measures do not reflect our cash expenditures, or future requirements for capital expenditures or contractual commitments;

~~Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs;~~

•

The Non-GAAP measures do not reflect changes in, or cash requirements for, our working capital needs;

~~Adjusted EBITDA does not reflect our tax expense or any cash requirements to pay income taxes;~~

•

Certain Non-GAAP measures do not reflect our tax expense or any cash requirements to pay income taxes;

~~Adjusted EBITDA does not reflect interest expense, or the cash requirements necessary to service interest payments on our indebtedness; and~~

•

Certain Non-GAAP measures do not reflect interest expense, or the cash requirements necessary to service interest payments on our indebtedness; and

Adjusted net income and Adjusted EBITDA do not reflect the impact of earnings or charges resulting from matters we do not consider to be indicative of our ongoing operations, but may nonetheless have a material impact on our results of operations.

•

The Non-GAAP measures do not reflect the impact of earnings or charges resulting from matters we do not consider to be indicative of our core and/or ongoing operations, but may nonetheless have a material impact on our results of operations.

In addition, because not all companies use identical calculations, our presentation of ~~Adjusted EBITDA and Adjusted net income~~the Non-GAAP Measures may not be comparable to similarly titled measures of other companies, including companies in our industry. Furthermore, certain non-GAAP financial measures presented have been provided for comparison purposes only and these non-GAAP financial measures may change in the future based on our calculations and forecasts regarding the interpretation of certain recent changes to U.S. federal income tax law and anticipated impacts on our financial results.

The following table ~~sets forth~~presents a reconciliation of net income from continuing operations as determined in accordance with U.S. GAAP to EBITDA, and Adjusted EBITDA, and net income from continuing operations margin (expressed as a percentage of net sales) to EBITDA margin and Adjusted EBITDA margin (each expressed as a percentage of net sales) for the periods indicated:

Three Months Ended

Six Months Ended


December 31, 2017

January 1, 2017

December 31, 2017

January 1, 2017


(Unaudited)

(Unaudited)

(Dollars in thousands)

(Dollars in thousands)

Net income

$
8,009

$
4,031

$
15,055

$
11,014

Income tax expense

1,634

2,496

5,161

6,537

Interest expense

1,139

512

1,630

1,123

Depreciation and amortization

1,478

825

2,210

1,622

EBITDA

12,260

7,864

24,056

20,296

Transaction expense(a)

605

5

1,486

59

Inventory step-up adjustment – acquisition related(b)

501

—

501

—

Litigation charge(c)

—

944

—

1,653

Stock-based compensation

264

186

528

305

Adjusted EBITDA

$
13,630

$
8,999

$
26,571

$
22,313

Adjusted EBITDA Margin(d)

17.4%

17.6%

18.5%

20.0%


	Three Months Ended								Nine Months Ended
	March 31,			% of Net	April 2,			% of Net	March 31,			% of Net	April 2,			% of Net
(Dollar amounts in thousands)	2024			sales	2023			sales	2024			sales	2023			sales
Net income from continuing operations	$	3,826		4.0%	$	22,782		13.7%	$	16,829		5.6%	$	67,400		13.6%
Income tax expense		806				6,744				4,408				20,353
Interest expense		762				695				2,494				1,923
Interest income		(1,398	)			(1,195	)			(4,164	)			(1,967	)
Depreciation and amortization		2,842				2,622				8,327				7,833
EBITDA		6,838		7.1%		31,648		19.0%		27,894		9.3%		95,542		19.3%
Share-based compensation(a)		1,583				1,026				2,531				2,892
Business development consulting costs(b)		—				312				—				312
CEO transition costs(c)		1,241				—				1,677				—
Adjusted EBITDA	$	9,662		10.1%	$	32,986		19.8%	$	32,102		10.7%	$	98,746		19.9%

~~(a)~~

~~Represents fees, expenses and integration costs associated with our acquisition of NauticStar and our follow-on offering in the prior-year period.~~

~~(b)~~

~~Represents post-acquisition adjustment to cost of goods sold for the fair value step up of inventory acquired all of which was sold during the second quarter of fiscal 2018.~~

~~(c)~~

~~Represents legal and advisory fees related to our litigation with Malibu Boats, LLC, which was settled during the fourth quarter of fiscal 2017.~~

~~(d)~~

~~We define Adjusted EBITDA margin as Adjusted EBITDA expressed as a percentage of sales.~~

The following table ~~sets forth~~presents a reconciliation of net income from continuing operations as determined in accordance with U.S. GAAP to Adjusted ~~net income~~Net Income for the periods indicated:

Three Months Ended

Six Months Ended

December 31, 2017

October 1, 2017

January 1, 2017

December 31, 2017

January 1, 2017

(Unaudited)

(Unaudited)

(Dollars in thousands, except share and per share amounts)

(Dollars in thousands, except share and per share amounts)

Net income
$
8,009

$
7,046

$
4,031

$
15,055

$
11,014

Income tax expense

1,634

3,527

2,496

5,161

6,537

Transaction expense(a)

605

881

5

1,486

59

Inventory step-up adjustment – acquisition related(b)

501

—

—

501

—

Litigation charge(c)

—

—

944

—

1,653

Stock-based compensation

264

264

186

528

305

Adjusted net income before income taxes(d)

11,013

11,718

7,662

22,731

19,568

Adjusted income tax expense(e)

3,194

3,398

2,758

6,592

7,044

Adjusted net income
$
7,819

$
8,320

$
4,904

$
16,139

$
12,524

Pro-forma Adjusted net income per common share

Basic

0.42

0.45

0.26

0.87

0.67

Diluted

0.42

0.44

0.26

0.86

0.67

Pro-forma weighted average shares used for the computation of:

Basic Adjusted net income per share(f)

18,619,834

18,619,834

18,593,296

18,619,834

18,593,296

Diluted Adjusted net income per share(f)

18,792,214

18,798,236

18,711,764

18,795,225

18,695,528

~~(a)~~

~~Represents fees, expenses and integration costs associated with our acquisition of NauticStar and our follow-on offering in the prior-year period.~~

~~(b)~~

~~Represents post-acquisition adjustment to cost of goods sold for the fair value step up of inventory acquired all of which was sold during the second quarter of fiscal 2018.~~

~~(c)~~

~~Represents legal and advisory fees related to our litigation with Malibu Boats, LLC, which was settled during the fourth quarter of fiscal 2017.~~

~~(d)~~

~~Excludes $0.5 million of amortization charges for acquired intangible assets incurred during the second quarter of fiscal 2018.~~

~~(e)~~

Reflects income tax expense at an estimated annual effective income tax rate of 29% for all current-year periods presented and 36% for all prior-year periods presented. We expect our estimated annual effective income tax rate to be reduced to about 24% for fiscal 2019.

~~(f)~~

~~The~~ weighted average shares used for computation of pro-forma diluted earnings per common share gives effect to 59,297 shares of restricted stock awards, 59,148 performance stock units and 53,935 shares for the dilutive effect of stock options. ~~The average of the prior quarters is used for computation of the six month ended periods.~~


	Three Months Ended				Nine Months Ended
	March 31,		April 2,		March 31,		April 2,
(Dollar amounts in thousands, except per share data)	2024		2023		2024		2023
Net income from continuing operations	$	3,826	$	22,782	$	16,829	$	67,400
Income tax expense		806		6,744		4,408		20,353
Amortization of acquisition intangibles		450		462		1,362		1,386
Share-based compensation(a)		1,583		1,026		2,531		2,892
Business development consulting costs(b)		—		312		—		312
CEO transition costs(c)		1,241		—		1,677		—
Adjusted Net Income before income taxes		7,906		31,326		26,807		92,343
Adjusted income tax expense(d)		1,581		7,205		5,361		21,239
Adjusted Net Income	$	6,325	$	24,121	$	21,446	$	71,104

Adjusted Net Income per share:
Basic	$	0.38	$	1.37	$	1.26	$	4.01
Diluted	$	0.37	$	1.36	$	1.25	$	3.98
Weighted average shares used for the computation of(e):
Basic Adjusted Net Income per share		16,844,440		17,559,920		17,003,616		17,725,208
Diluted Adjusted Net Income per share		16,965,624		17,748,910		17,093,958		17,851,655

The following table ~~shows~~presents the reconciliation of net income from continuing operations per diluted share to Adjusted ~~net income~~Net Income per diluted ~~pro-forma weighted average~~ share for the periods ~~presented:~~indicated:


	Three Months Ended						Nine Months Ended
	March 31,			April 2,			March 31,			April 2,
	2024			2023			2024			2023
Net income from continuing operations per diluted share	$	0.23		$	1.28		$	0.98		$	3.78
Impact of adjustments:
Income tax expense		0.05			0.38			0.26			1.14
Amortization of acquisition intangibles		0.03			0.03			0.08			0.08
Share-based compensation(a)		0.10			0.06			0.15			0.16
Business development consulting costs(b)		—			0.02			—			0.02
CEO transition costs(c)		0.07			—			0.10			—
Adjusted Net Income per diluted share before income taxes	$	0.48		$	1.77		$	1.57		$	5.18
Impact of adjusted income tax expense on net income per diluted share before income taxes(d)		(0.11	)		(0.41	)		(0.32	)		(1.20	)
Adjusted Net Income per diluted share	$	0.37		$	1.36		$	1.25		$	3.98

Three Months Ended

Six Months Ended

December 31, 2017

October 1, 2017

January 1, 2017

December 31, 2017

January 1, 2017

(Unaudited)

(Unaudited)
Net income per diluted share

0.43

0.38

0.22

0.81

0.59
Impact of adjustments:

Income tax expense

0.09

0.19

0.14

0.28

0.35
Transaction expense(a)

0.03

0.05

-

0.08

-
Inventory step-up adjustment – acquisition related(b)

0.03

-

-

0.03

-
Litigation charge(c)

-

-

0.05

-

0.09
Stock-based compensation

0.01

0.01

0.01

0.03

0.02
Adjusted net income per diluted share before income taxes(d)

0.59

0.63

0.42

1.23

1.05
Impact of adjusted income tax expense on net income per diluted share before income taxes(e)

(0.17)

(0.18)

(0.15)

(0.35)

(0.38)
Impact of increased share count(f)

-

(0.01)

(0.01)

(0.02)

-
Adjusted net income per diluted pro-forma weighted average share

0.42

0.44

0.26

0.86

0.67

(a)

~~(a)~~

~~Represents fees, expenses and integration costs associated with our acquisition of NauticStar and our follow-on offering in the prior-year period.~~

~~(b)~~

~~Represents post-acquisition adjustment to cost of goods sold for the fair value step up of inventory acquired all of which was sold during the second quarter of fiscal 2018.~~

~~(c)~~

~~Represents legal and advisory fees related to our litigation with Malibu Boats, LLC, which was settled during the fourth quarter of fiscal 2017.~~

~~(d)~~

~~Excludes $0.5 million of amortization charges for acquired intangible assets incurred during the second quarter of fiscal 2018.~~

~~(e)~~

~~(f)~~

Reflects impact of increased share counts giving effect to the exchange of all restricted stock awards, the vesting of all performance stock units and for the dilutive effect of stock options included in outstanding shares.

Included in share-based compensation are the impacts of accelerating expense recognition for equity awards related to the CEO transition.

(c)

Represents amounts paid to the Company’s former CEO upon his departure under the terms of his transition agreements, including consulting payments and legal fees incurred with the transition. Also included are recruiting and relocation costs related to the new CEO.

(d)

For fiscal 2024 and 2023, income tax expense reflects an income tax rate of 20.0% and 23.0%, respectively, for each period presented.

(e)

Represents the Weighted Average Shares used for the computation of Basic and Diluted earnings per share as presented on the Consolidated Statements of Operations to calculate Adjusted Net Income per basic and diluted share for all periods presented herein.

Third Amended Credit Agreement replaced and paid off our Second Amended and Restated Credit Agreement, dated May 27, 2016. The Third Amended Credit Agreement provides us with a $145 million senior secured credit facility, consisting of a $115 million term loan (the “Third Term Loan”) and a $30 million revolving credit facility. On October 17, 2017, and December 1, 2017, we made voluntary payments on the Third Term Loan of $10.0 million and $7.0 million, respectively, out of excess cash.

~~Off-Balance~~Off Balance Sheet Arrangements

~~As of December 31, 2017, we~~The Company did not have any ~~off-balance~~off balance sheet ~~financings.~~financing arrangements as of March 31, 2024.

~~Emerging Growth Company~~

We are an emerging growth company, as defined in the JOBS Act. For as long as we are an emerging growth company, we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies, including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding stockholder advisory “say-on-pay” votes on executive compensation and stockholder advisory votes on golden parachute compensation.

The JOBS Act also provides that an emerging growth company can utilize the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. Pursuant to Section 107 of the JOBS Act, we have irrevocably chosen to opt out of such extended transition period and, as a result, we will comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for companies that are not “emerging growth companies.”

We will continue to be an emerging growth company until the earliest to occur of (i) the last day of fiscal year during which we had total annual gross revenues of at least $1 billion (as indexed for inflation), (ii) the last day of fiscal year following the fifth anniversary of the closing of the IPO, (iii) the date on which we have, during the previous three-year period, issued more than $1 billion in non-convertible debt, or (iv) the date on which we are deemed to be a “large accelerated filer,” as defined under the Exchange Act.

Critical Accounting ~~Policies~~Estimates

As of ~~December~~March 31, ~~2017,~~2024, there were no significant changes in or changes into the application of our critical accounting policies or estimation procedures from those presented in our 2023 Annual ~~Report~~Report.

SEC Climate Disclosure Rule

In March 2024, the SEC issued its final climate disclosure rule, which requires the disclosure of material Scope 1 and Scope 2 greenhouse gas emissions and other climate-related topics in annual reports and registration statements. For accelerated filers, disclosure requirements will begin phasing in for fiscal years beginning on ~~Form 10-K.~~or after January 1, 2026, or fiscal 2027 for the Company. On April 4, 2024, the SEC announced to voluntarily delay the implementation of climate disclosure regulations while going through certain legal challenges filed to vacate the proposed rules. The Company is currently evaluating the impact these rules will have on its consolidated financial statements and related disclosures.

ITEM ~~3.QUANTITATIVE~~3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Refer to our 2023 Annual Report ~~on Form 10-K~~ for ~~a complete~~ discussion onof the Company’s market risk. There have been no material changes in market risk from those disclosed therein.

ITEM ~~4.CONTROLS~~4. CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures (as defined in Rule 13a-15(e) ofand 15d-15(e) (of the Exchange Act) that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the ~~SEC’s~~SEC's rules and forms, and that such information is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosures. Any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.

As of the end of the period covered by this Quarterly Report on Form 10-Q, we carried out an evaluation under the supervision and with the participation of our management, including our chief executive officer and chief financial officer, of the effectiveness of our disclosure controls and procedures. Based upon this evaluation, our chief executive officer and chief financial officer have concluded that our disclosure controls and procedures were effective at a reasonable assurance level as of ~~December~~March 31, ~~2017.~~2024.

Changes in Internal Control Over Financial Reporting

During the second quarter ended December 31, 2017, we completed the acquisition of NauticStar. Prior to the acquisition, NauticStar was a privately-held company and was not subject to the Sarbanes-Oxley Act of 2002, the rules and regulations of the SEC, or other corporate governance requirements applicable to public reporting companies. As part of our ongoing integration activities, we are continuing to incorporate our controls and procedures into NauticStar and to augment our company-wide controls to reflect the risks that may be inherent in acquisitions of privately-held companies.

~~Other than our integration of NauticStar, there~~There have been no changes in our internal control over financial reporting during the quarter ended ~~December~~March 31, ~~2017~~2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

~~ITEM 1.LEGAL PROCEEDINGS.~~For a discussion of the Company’s legal proceedings, see Part I – Item 1. – Note 9 – Commitments and Contingencies to the Company’s unaudited condensed consolidated financial statements.

~~Legal Proceedings~~

~~None.~~

ITEM 1A. RISK FACTORS.

~~ITEM 1A.RISK FACTORS.~~

~~During the quarter ended December 31, 2017,~~Except as noted below, there ~~were~~have been no material changes to the risk factors disclosed in “Part I, Item 1A. Risk Factors” in our Annual Report ~~filed~~ on Form ~~10-K.~~10-K for the fiscal year ended June 30, 2023.

Our financial results could be adversely affected if we are unable to maintain effective distribution.

~~Table~~We rely on third-party dealers to sell our products. Maintaining a reliable network of ~~Contents~~dealers is essential to our success. We face competition from other manufacturers in attracting and retaining independent boat dealers. A significant deterioration in the number or effectiveness of our dealers could have a material adverse effect on our financial results.

Weakening demand for marine products could hurt our dealers’ financial performance. In particular, reduced cash flow from decreases in sales and tightening credit markets could impair dealers' ability to fund operations. Inability to fund operations can force dealers to cease business, and we may be unable to obtain alternate distribution in the vacated market. An inability to obtain alternate distribution could unfavorably affect our net sales through reduced market presence. If economic conditions deteriorate, we anticipate that dealer failures or voluntary market exits would increase, especially if overall retail demand materially declines. Additionally, the deterioration in the health of competitors' dealers can negatively impact the marketplace, including our dealers, by causing boat inventories at those dealers to be deeply discounted or relocated to other geographical areas, resulting in elevated inventories our dealers are competing against.

ITEM ~~2.UNREGISTERED~~2. UNREGISTERED SALES OF SECURITIES AND USE OF PROCEEDS.

Share Repurchase Program

~~None.~~On June 24, 2021, the board of directors of the Company authorized a share repurchase program that allowed for the repurchase of up to $50.0 million of our common stock during the three-year period ending June 24, 2024. While having $1.6 million of availability as of June 30, 2023, this program was fully utilized during the first quarter ended October 1, 2023.

On July 24, 2023, the board of directors of the Company authorized a new share repurchase program under which the Company may repurchase up to $50.0 million of its outstanding shares of common stock. The new authorization became effective upon the completion of the Company's prior $50.0 million stock repurchase authorization.

During the first nine months of fiscal 2024, we repurchased approximately $11.7 million of our common stock, including approximately $1.6 million during the three months ended March 31, 2024. As of March 31, 2024, the remaining authorization under the new program was approximately $39.9 million.

During the three months ended March 31, 2024, the Company repurchased the following shares of common stock:


Period	Total Number of Shares Purchased		Average Price Paid Per Share(a)(b)		Total Number of Shares Purchased as part of Publicly Announced Program		Approximate Dollar Value of Shares that May Yet be Purchased Under the Plan (dollars in thousands)
January 1, 2024 - January 28, 2024		—	$	—		—	$	41,471
January 29, 2024 - February 25, 2024		5,600		21.89		5,600		41,348
February 26, 2024 - March 31, 2024		67,962		21.05		67,962		39,918
Total		73,562				73,562

(a)

Represents weighted average price paid per share excluding commissions paid.

(b)

Average price per share excludes any excise tax imposed on certain stock repurchases as part of the Inflation Reduction Act of 2022.

ITEM ~~3.DEFAULTS~~3. DEFAULTS UPON SENIOR SECURITIES.

None.

~~Not applicable.~~

ITEM ~~4.MINE~~4. MINE SAFETY DISCLOSURES.

None.

~~None.~~

ITEM ~~5.OTHER~~5. OTHER INFORMATION.

During the three months ended March 31, 2024, none of our directors or "officers" (as defined in Rule 16a-1(f) under the Exchange Act) adopted, modified or terminated "Rule 10b5-1 trading arrangements" or "non-Rule 10b5-1 trading arrangements" (each as defined in Item 408 of Regulation S-K).

~~None.~~

ITEM ~~6.EXHIBIT~~6. EXHIBITS, FINANCIAL STATEMENT SCHEDULES.

Incorporated by Reference

Exhibit
No.

Description

Form

File No.

Exhibit

Filing Date

Filed
Herewith

3.1

Amended and Restated Certificate of Incorporation of MCBC Holdings, Inc.

10-K

001-37502

3.1

9/18/15

3.2

Certificate of Amendment to Amended and Restated Certificate of Incorporation of MasterCraft Boat Holdings, Inc.

10-Q

001-37502

3.2

11/9/18

3.3

Certificate of Amendment to Amended and Restated Certificate of Incorporation of MasterCraft Boat Holdings, Inc.

8-K

001-37502

3.1

10/25/19

3.4

Fourth Amended and Restated By-laws of MasterCraft Boat Holdings, Inc.

8-K

001-37502

3.2

10/25/19

10.1†

Retirement and Consulting Agreement, dated March 1, 2024

8-K

001-37502

10.1

3/4/24

10.2†

Offer Letter, dated March 1, 2024

8-K

001-37502

10.2

3/4/24

31.1

Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer

31.2

Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer

32.1

Section 1350 Certification of Chief Executive Officer

32.2

Section 1350 Certification of Chief Financial Officer

101.INS

Inline XBRL Instance Document

101.SCH

Inline XBRL Taxonomy Extension Schema With Embedded Linkbases Document

104

Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

10.21†

Form of Performance Stock Unit Award Agreement under 2015 Incentive Award Plan

8-K

001-37502

10.1

8/26/16

10.22

Membership Interest Purchase Agreement, dated October 2, 2017 among MCBC Holdings, Inc., Nautic Star, LLC and each of the other parties thereto

8-K

001-37502

2.1

10/2/17

10.23

Third Amended and Restated Credit and Guaranty Agreement, dated October 2, 2017, by and among MasterCraft Boat Company, LLC, MasterCraft Services, Inc., MCBC Hydra Boats, LLC, MasterCraft International Sales Administration, Inc., Nautic Star, LLC, NS Transport, LLC and Navigator Marine, LLC as borrowers and other credit parties, various lenders and Fifth Third Bank as the agent and L/C issuer and lender

8-K

001-37502

10.1

10/2/17

31.1

Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer

*

31.2

Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer

*

32.1

Section 1350 Certification of Chief Executive Officer

**

32.2

Section 1350 Certification of Chief Financial Officer

**

101.INS

XBRL Instance Document

*

101.SCH

XBRL Taxonomy Extension Schema Document

*

101.CAL

XBRL Taxonomy Extension Calculation Linkbase Document

*

101.LAB

XBRL Taxonomy Extension Label Linkbase Document

*

101.PRE

XBRL Taxonomy Extension Presentation Linkbase Document

*

101.DEF

XBRL Taxonomy Extension Definition Linkbase Document

*

†Indicates management contract or compensatory plan.

*Filed herewith.

**Furnished herewith.

SIGNATURES

~~SIGNATURES~~

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report ~~has been~~to be signed ~~below~~on its behalf by the ~~following persons on behalf of the registrant and in the capacities and on the dates indicated.~~undersigned thereunto duly authorized.


					MASTERCRAFT BOAT HOLDINGS, INC.
~~Signature~~		~~Title~~			~~Date~~(Registrant)

~~/s/ TERRY MCNEW~~Date:	May 8, 2024	~~President and~~ By:	/s/ BRADLEY M. NELSON
			Bradley M. Nelson
			Chief Executive Officer (Principal Executive Officer) and Director
~~Terry McNew~~				~~February 8, 2018~~
Date:	May 8, 2024	By:
/s/ TIMOTHY M. OXLEY
			Timothy M. Oxley
			Chief Financial Officer (Principal Financial and Accounting Officer), ~~Treasurer and Secretary~~
~~Timothy M. Oxley~~				~~February 8, 2018~~Treasurer and Secretary


	Three Months Ended				Six Months Ended
	December 31, 2017		January 1, 2017		December 31, 2017		January 1, 2017

NET SALES	$	78,435	$	51,134	$	143,484	$	111,823
COST OF SALES		58,501		36,848		105,387		79,728
GROSS PROFIT		19,934		14,286		38,097		32,095
OPERATING EXPENSES:
Selling and marketing		3,672		2,444		6,409		4,498
General and administrative		4,955		4,776		9,290		8,869
Amortization of intangible assets		525		27		552		54
Total operating expenses		9,152		7,247		16,251		13,421
OPERATING INCOME		10,782		7,039		21,846		18,674
OTHER EXPENSE:
Interest expense		1,139		512		1,630		1,123
INCOME BEFORE INCOME TAX EXPENSE		9,643		6,527		20,216		17,551
INCOME TAX EXPENSE		1,634		2,496		5,161		6,537
NET INCOME	$	8,009	$	4,031	$	15,055	$	11,014

EARNINGS PER COMMON SHARE:
Basic	$	0.43	$	0.22	$	0.81	$	0.59
Diluted	$	0.43	$	0.22	$	0.81	$	0.59
WEIGHTED AVERAGE SHARES USED FOR COMPUTATION OF:
Basic earnings per share		18,619,834		18,592,936		18,617,467		18,592,372
Diluted earnings per share		18,702,352		18,605,078		18,694,489		18,598,841


	December 31,		June 30,
	2017		2017

ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	6,250	$	4,038
Accounts receivable — net of allowances of $61 and $82, respectively		1,917		3,500
Inventories — net		18,283		11,676
Prepaid expenses and other current assets		3,021		2,438
Total current assets		29,471		21,652
Property, plant and equipment — net		19,533		14,827
Intangible assets — net		52,090		16,643
Goodwill		66,818		29,593
Deferred debt issuance costs — net		428		481
Other		302		125
Total assets	$	168,642	$	83,321
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable	$	12,800	$	11,008
Income tax payable		2,413		780
Accrued expenses and other current liabilities		27,446		21,410
Current portion of long term debt, net of unamortized debt issuance costs		5,072		3,687
Total current liabilities		47,731		36,885
Long term debt, net of unamortized debt issuance costs (Note 8)		89,905		30,790
Deferred income taxes		266		953
Unrecognized tax positions		3,439		2,932
Total liabilities		141,341		71,560
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common stock, $.01 par value per share — authorized, 100,000,000 shares; issued and outstanding, 18,679,131 shares at December 31, 2017 and 18,637,445 shares at June 30, 2017		187		186
Additional paid-in capital		113,429		112,945
Accumulated deficit		(86,315)		(101,370)
Total stockholders' equity		27,301		11,761
Total liabilities and stockholders' equity	$	168,642	$	83,321


Purchase Price:
Cash paid, net of cash acquired	$	79,128
Accrued working capital adjustment		1,383
	$	80,511


Recognized preliminary amounts of identifiable assets acquired and (liabilities assumed), at fair value:
Accounts receivable	$	1,773
Inventories		6,426
Other current assets		94
Indemnification asset		166
Deferred income taxes		83
Property, Plant and equipment		4,945
Identifiable intangible assets		36,000
Current liabilities		(5,952)
Unrecognized tax positions		(249)
Preliminary estimate of the fair value of assets acquired and liabilities assumed		43,286
Goodwill		37,225
	$	80,511


	Estimates of Fair Value		Estimated Useful Life (in years)
Definite-lived intangible:
Dealer network	$	20,000	10
Indefinite-lived intangible:
Trade name		16,000
Total identifiable intangible assets	$	36,000


	December 31, 2017		June 30, 2017
Prepaid photo shoot	$	682	$	497
Insurance		267		765
Trade show deposits		413		73
Interest rate cap		288		90
Other		1,371		1,013
Total prepaid expenses and other current assets	$	3,021	$	2,438



Beginning balance - June 30, 2017	$	12,237
Provisions		2,807
Additions for NauticStar acquisition		1,992
Payments made		(1,955)
Adjustments to preexisting warranties		(163)
Ending balance - December 31, 2017	$	14,918


Goodwill as of June 30, 2017	$	29,593
Addition related to the acquisition of NauticStar		37,225
Goodwill as of December 31, 2017	$	66,818


	December 31, 2017
	Gross				Net
	Carrying		Accumulated		Carrying
	Amount		Amortization		Amount
Dealer network	$	21,590	$	(1,500)	$	20,090
Total amortizable intangible assets		21,590		(1,500)		20,090
Trade names		32,000		—		32,000
Total intangible assets	$	53,590	$	(1,500)	$	52,090


Fiscal years ending June 30,
Remainder of 2018	$	1,054
2019		2,107
2020		2,107
2021		2,107
2022		2,107
and thereafter		10,608
Total	$	20,090


	December 31, 2017
	Level 1		Level 2		Level 3
Asset — interest rate cap	$	—	$	288	$	—


	Three Months Ended December 31, 2017
	MasterCraft		NauticStar		Consolidated
Net sales	$	58,239	$	20,196	$	78,435
Cost of sales		41,856		16,645		58,501
Operating income		9,113		1,669		10,782
Depreciation and amortization		876		602		1,478


	Three Months Ended January 1, 2017
	MasterCraft		NauticStar		Consolidated
Net sales	$	51,134	$	—	$	51,134
Cost of sales		36,848		—		36,848
Operating income		7,039		—		7,039
Depreciation and amortization		825		—		825


	Six Months Ended December 31, 2017
	MasterCraft		NauticStar		Consolidated
Net sales	$	123,288	$	20,196	$	143,484
Cost of sales		88,742		16,645		105,387
Operating income		20,177		1,669		21,846
Depreciation and amortization		1,608		602		2,210


	Six Months Ended January 1, 2017
	MasterCraft		NauticStar		Consolidated
Net sales	$	111,823	$	—	$	111,823
Cost of sales		79,728		—		79,728
Operating income		18,674		—		18,674
Depreciation and amortization		1,622		—		1,622


		As of December 31, 2017		As of June 30, 2017
Assets
MasterCraft	$	82,978	$	83,321
NauticStar		85,664		—
Total Assets(a)	$	168,642	$	83,321