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

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☑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.

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

As of ~~May 6,~~November 4, 2022, there were ~~18,044,250~~17,804,375 shares of the Registrant’s common stock, par value $0.01 per share, issued and outstanding.

This Quarterly Report on Form 10-Q contains certain “forward-looking statements” within the meaning of the federal securities laws. These 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 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 on Form 10-Q are based on assumptions that we have made 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 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: the potential effects of supply chain disruptions and production inefficiencies, ~~as a result of the coronavirus (“COVID-19”) pandemic on the Company,~~ general economic conditions, demand for our products, inflation, changes in consumer preferences, competition within our industry, our reliance on our network of independent dealers, our ability to manage our manufacturing levels and our fixed cost base, the successful introduction of our new products, geopolitical conflicts and the other important factors described under the caption “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended June 30, ~~2021,~~2022, filed with the Securities and Exchange Commission (“SEC”) on September ~~2, 2021~~9, 2022 (our ~~“2021~~“2022 Annual Report”). 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 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.


	Three Months Ended				Nine Months Ended					Three Months Ended
	April 3,		April 4,		April 3,			April 4,		October 2,			October 3,
	2022		2021		2022			2021		2022			2021
NET SALES	$	186,735	$	147,854	$	490,210		$	370,276	$	169,516		$	130,650
COST OF SALES		144,702		110,627		382,857			277,546		123,543			100,068
GROSS PROFIT		42,033		37,227		107,353			92,730		45,973			30,582
OPERATING EXPENSES:							��
Selling and marketing		3,611		3,693		11,288			9,589		3,779			3,893
General and administrative		9,948		9,984		29,881			27,268		9,483			8,720
Amortization of other intangible assets		987		987		3,000			2,961		489			489
Goodwill impairment		—		—		1,100			—		—			1,100
Total operating expenses		14,546		14,664		45,269			39,818		13,751			14,202
OPERATING INCOME		27,487		22,563		62,084			52,912		32,222			16,380
OTHER EXPENSE:
OTHER INCOME (EXPENSE):
Interest expense		341		755		1,080			2,644		(562	)		(382	)
Interest income											151			—
INCOME BEFORE INCOME TAX EXPENSE		27,146		21,808		61,004			50,268		31,811			15,998
INCOME TAX EXPENSE		6,211		4,240		14,281			10,632		7,176			3,766
NET INCOME FROM CONTINUING OPERATIONS											24,635			12,232
LOSS FROM DISCONTINUED OPERATIONS, NET OF TAX (Note 3)											(20,567	)		(1,846	)
NET INCOME	$	20,935	$	17,568	$	46,723		$	39,636	$	4,068		$	10,386

NET INCOME PER SHARE:
NET INCOME (LOSS) PER SHARE:
Basic	$	1.14	$	0.93	$	2.51		$	2.11
Continuing operations										$	1.38		$	0.65
Discontinued operations											(1.15	)		(0.10	)
Net income										$	0.23		$	0.55

Diluted	$	1.13	$	0.93	$	2.49		$	2.09
Continuing operations										$	1.37		$	0.65
Discontinued operations											(1.14	)		(0.10	)
Net income										$	0.23		$	0.55

WEIGHTED AVERAGE SHARES USED FOR COMPUTATION OF:
Basic earnings per share		18,295,949		18,817,975		18,622,878			18,799,875		17,946,061			18,850,301
Diluted earnings per share		18,487,346		18,989,629		18,796,867			18,928,288		18,031,725			19,004,119

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


	April 3,		June 30,			October 2,		June 30,
	2022		2021			2022		2022
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	13,766	$	39,252		$	40,829	$	34,203
Accounts receivable, net of allowance of $262 and $115, respectively		20,898		12,080
Accounts receivable, net of allowance of $130 and $214, respectively							18,615		22,472
Income tax receivable		450		355			1,014		—
Inventories, net (Note 3)		82,353		53,481
Inventories, net (Note 4)							68,790		58,595
Prepaid expenses and other current assets		8,994		5,059			5,946		7,232
Current assets associated with discontinued operations (Note 3)							—		23,608
Total current assets		126,461		110,227			135,194		146,110
Property, plant and equipment, net		64,310		60,495			59,676		55,823
Goodwill (Note 4)		28,493		29,593
Other intangible assets, net (Note 4)		56,899		59,899
Goodwill (Note 5)							28,493		28,493
Other intangible assets, net (Note 5)							36,929		37,418
Deferred income taxes		15,133		15,130			19,109		21,525
Deferred debt issuance costs, net		431		507			380		406
Other long-term assets		487		609			1,956		1,290
Non-current assets associated with discontinued operations (Note 3)							—		5,987
Total assets	$	292,214	$	276,460		$	281,737	$	297,052
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable		29,603		23,861			23,936		23,375
Income tax payable		1,487		726			488		4,600
Accrued expenses and other current liabilities (Note 5)		55,069		46,836
Current portion of long-term debt, net of unamortized debt issuance costs (Note 7)		2,872		2,866
Accrued expenses and other current liabilities (Note 6)							50,674		54,437
Current portion of long-term debt, net of unamortized debt issuance costs (Note 8)							3,250		2,873
Current liabilities associated with discontinued operations (Note 3)							—		7,887
Total current liabilities		89,031		74,289			78,348		93,172
Long-term debt, net of unamortized debt issuance costs (Note 7)		62,123		90,277
Long-term debt, net of unamortized debt issuance costs (Note 8)							52,582		53,676
Unrecognized tax positions		5,170		3,830			5,540		6,358
Other long-term liabilities		202		276			1,079		198
Total liabilities		156,526		168,672			137,549		153,404
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common stock, $.01 par value per share — authorized, 100,000,000 shares; issued and outstanding, 18,208,788 shares at April 3, 2022 and 18,956,719 shares at June 30, 2021		182		189
Common stock, $.01 par value per share — authorized, 100,000,000 shares; issued and outstanding, 17,998,117 shares at October 2, 2022 and 18,061,437 shares at June 30, 2022							180		181
Additional paid-in capital		100,114		118,930			93,057		96,584
Retained earnings / (accumulated deficit)		35,392		(11,331	)
Retained earnings							50,951		46,883
Total stockholders' equity		135,688		107,788			144,188		143,648
Total liabilities and stockholders' equity	$	292,214	$	276,460		$	281,737	$	297,052

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

							Additional			Retained Earnings/
	Common Stock						Paid-in			(Accumulated												Additional
	Shares			Amount			Capital			Deficit)			Total			Common Stock						Paid-in			Retained
Balance at June 30, 2021		18,956,719		$	189		$	118,930		$	(11,331	)	$	107,788
																Shares			Amount			Capital			Earnings		Total
Balance at June 30, 2022																	18,061,437		$	181		$	96,584		$	46,883	$	143,648
Share-based compensation activity		62,865			1			705			—			706			128,040			1			649			—		650
Repurchase and retirement of common stock		(58,379	)		(1	)		(1,486	)		—			(1,487	)		(191,360	)		(2	)		(4,176	)		—		(4,178	)
Net income		—			—			—			10,386			10,386			—			—			—			4,068		4,068
Balance at October 3, 2021		18,961,205			189			118,149			(945	)		117,393
Share-based compensation activity		5,913			—			1,159			—			1,159
Repurchase and retirement of common stock		(356,296	)		(3	)		(9,885	)		—			(9,888	)
Net income		—			—			—			15,402			15,402
Balance at January 2, 2022		18,610,822			186			109,423			14,457			124,066
Share-based compensation activity		(6,086	)		—			766			—			766
Repurchase and retirement of common stock		(395,948	)		(4	)		(10,075	)		—			(10,079	)
Net income		—			—			—			20,935			20,935
Balance at April 3, 2022		18,208,788		$	182		$	100,114		$	35,392		$	135,688
Balance at October 2, 2022																	17,998,117		$	180		$	93,057		$	50,951	$	144,188

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


	Nine Months Ended						Three Months Ended
	April 3,			April 4,			October 2,			October 3,
	2022			2021			2022			2021
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	46,723		$	39,636		$	4,068		$	10,386
Loss from discontinued operations								20,567			1,846
Net income from continuing operations								24,635			12,232
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		10,153			8,547			2,601			2,459
Share-based compensation		2,876			2,184			1,120			862
Unrecognized tax benefits		1,340			38			(818	)		464
Deferred income taxes								2,416			(248	)
Amortization of debt issuance costs		178			469			59			59
Goodwill impairment		1,100			—			—			1,100
Changes in certain operating assets and liabilities		(27,389	)		1,454			(10,021	)		(24,831	)
Other, net		321			2,065			726			453
Net cash provided by operating activities		35,302			54,393
Net cash provided by (used in) operating activities of continuing operations								20,718			(7,450	)
Net cash used in operating activities of discontinued operations								(2,230	)		(6,105	)
Net cash provided by (used in) operating activities								18,488			(13,555	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment		(10,839	)		(23,779	)		(5,968	)		(2,550	)
Net cash used in investing activities of continuing operations								(5,968	)		(2,550	)
Net cash used in investing activities of discontinued operations								(501	)		(1,068	)
Net cash used in investing activities		(10,839	)		(23,779	)		(6,469	)		(3,618	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on revolving credit facility		(38,000	)		(32,500	)		—			(20,000	)
Borrowings on revolving credit facility		12,000			22,500			—			12,000
Principal payments on long-term debt		(2,250	)		(7,065	)		(750	)		(750	)
Repurchase and retirement of common stock		(21,454	)		—			(4,178	)		(1,487	)
Other, net		(245	)		(898	)		(465	)		(191	)
Net cash used in financing activities		(49,949	)		(17,963	)
Net cash used in financing activities of continuing operations								(5,393	)		(10,428	)
NET CHANGE IN CASH AND CASH EQUIVALENTS		(25,486	)		12,651			6,626			(27,601	)

CASH AND CASH EQUIVALENTS — BEGINNING OF PERIOD		39,252			16,319			34,203			39,252
CASH AND CASH EQUIVALENTS — END OF PERIOD	$	13,766		$	28,970		$	40,829		$	11,651
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash payments for interest	$	874		$	2,147		$	542		$	282
Cash payments for income taxes		13,139			5,170			5,627			5,170
SIGNIFICANT NON-CASH INVESTING AND FINANCING ACTIVITIES:
NON-CASH INVESTING AND FINANCING ACTIVITIES:
Capital expenditures in accounts payable and accrued expenses		421			157			643			815

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

As of June 30, ~~2021,~~2022, the Company had ~~$1.8~~$1.4 million of contract liabilities associated with customer deposits. During the ~~nine~~three months ended ~~April 3,~~October 2, 2022, ~~all of this amount~~$1.3 million was recognized as revenue. As of ~~April 3,~~October 2, 2022, total contract liabilities associated with customer deposits were ~~$2.2~~$1.9 million, were reported in Accrued expenses and other current liabilities on the condensed consolidated balance sheet, and ~~substantially~~ all of the amounts are expected to be recognized as revenue during the remainder of the year ending June 30, ~~2022.~~2023.

~~Raw~~Inventories have increased for the three months ended October 2, 2022, primarily reflecting cyclical new model year production efforts, as well as increased material costs caused by inflation. Additionally, raw materials and supplies ~~have increased to support higher production volumes and to increase safety stock~~remain elevated to manage supply chain ~~risk. Work in process has increased due to supply chain disruptions.~~risks.

Beginning with the first quarter of fiscal 2022, the Company realigned its reportable segments to MasterCraft, Crest, NauticStar, and Aviara. Refer to Note 11 – Segment Information for further information on the Company’s reportable segments. As a result of the change in segments, in accordance with ASC 350, ~~Intangibles-Goodwill and Other, the Company reallocated the goodwill recorded in the MasterCraft reporting unit to the two separate MasterCraft and Aviara reporting units using a relative fair value approach.~~

Prior to realigning our segments, we evaluated our goodwill for impairment and determined no impairment existed as the fair value of our MasterCraft reporting unit, which was the only reporting unit containing goodwill, was in excess of its carrying amount. In conjunction with the reallocation of goodwill, we tested the goodwill at our MasterCraft and Aviara reporting units for impairment using an income-based approach, specifically a discounted cash flow model. The cash flow model included significant judgements and assumptions related to revenue growth and discount rates. At the time of the impairment test, near-term operating losses generated by start-up inefficiencies had negatively impacted the fair value of Aviara, causing the carrying value of the reporting unit to be in excess of the fair value. Consequently, a $1.1 million impairment charge was recognized in the first quarter of fiscal 2022.

The carrying amounts of goodwill as of October 2, 2022, and June 30, 2022, along with accumulated goodwill reallocations and accumulated impairment losses attributable to each of the Company’s reportable segments, were as follows:

MasterCraft

Crest

NauticStar

Aviara

Total

Balance at June 30, 2021

Goodwill

$
29,593

$
36,238

$
36,199

$
—

$
102,030

Accumulated impairment losses

—

(36,238
)

(36,199
)

—

(72,437
)
Goodwill, net at June 30, 2021

29,593

—

—

—

29,593

Goodwill reallocation

(1,100
)

—

—

1,100

—

Impairment

—

—

—

(1,100
)

(1,100
)
Goodwill, net at April 3, 2022

$
28,493

$
—

$
—

$
—

$
28,493


	MasterCraft			Crest			Aviara			Total
Goodwill	$	29,593		$	36,238		$	—		$	65,831
Goodwill reallocation		(1,100	)		—			1,100			—
Accumulated impairment losses		—			(36,238	)		(1,100	)		(37,338	)
Goodwill, net		28,493			—			—			28,493

Fiscal 2022 Goodwill Impairment

During the three ~~and nine~~ months ended ~~April~~October 3, ~~2022~~2021, a $1.1 million impairment charge was recognized for our Aviara reporting unit. See Part IV. Item 15, Note 5 — Goodwill and ~~April 4, 2021, the Company did 0t record impairment charges related~~Other Intangible Assets in Notes to its Other intangible assets. Given current period operating losses combined with a history of operating losses and operational inefficiencies, the Company continues to monitor the NauticStar segment’s outlook for sales and operating performance relative to the forecasts of expected future cash flows used in the Company’s previous impairment tests in order to evaluate whether the carrying value of the segment’s intangible assets remain above fair value. Should economic conditions, such as supply chain disruptions, labor challenges, and inflationary pressures, deteriorate in future periods or remain depressed for a prolonged period of time, or operational inefficiencies grow, estimates of future cash flows may not be sufficient to support the carrying value of NauticStar’s intangible assets.

For more information related to the Company’s Other intangible assets and our accounting policies related to determining fair values of our intangible assets and impairment evaluations, see Notes 1 and 6 to the Consolidated Financial Statements in ~~Item 8 of the~~our 2022 Annual Report on Form 10-K for further details. No goodwill impairment charges were recognized during the ~~fiscal year~~three months ended ~~June 30, 2021.~~

October 2, 2022.

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


	April 3,							June 30,							October 2,							June 30,
	2022							2021							2022							2022
	Gross Amount		Accumulated Amortization / Impairment			Other intangible assets, net		Gross Amount		Accumulated Amortization / Impairment			Other intangible assets, net		Gross Amount		Accumulated Amortization / Impairment			Other intangible assets, net		Gross Amount		Accumulated Amortization / Impairment			Other intangible assets, net
Amortized intangible assets
Dealer networks	$	39,500	$	(16,675	)	$	22,825	$	39,500	$	(13,711	)	$	25,789	$	19,500	$	(8,620	)	$	10,880	$	19,500	$	(8,143	)	$	11,357
Software		245		(171	)		74		245		(135	)		110		245		(196	)		49		245		(184	)		61
		39,745		(16,846	)		22,899		39,745		(13,846	)		25,899		19,745		(8,816	)		10,929		19,745		(8,327	)		11,418

Unamortized intangible assets
Trade names		49,000		(15,000	)		34,000		49,000		(15,000	)		34,000		33,000		(7,000	)		26,000		33,000		(7,000	)		26,000
Total other intangible assets	$	88,745	$	(31,846	)	$	56,899	$	88,745	$	(28,846	)	$	59,899	$	52,745	$	(15,816	)	$	36,929	$	52,745	$	(15,327	)	$	37,418

Amortization expense related to Other intangible assets, net for ~~both~~ the three ~~and nine~~ months ended ~~April 3,~~October 2, 2022 and ~~April 4,~~October 3, 2021 was ~~$1.0 million and $3.0 million, respectively.~~$0.5 million. Estimated amortization expense for the fiscal year ending June 30, ~~2022~~2023 is ~~$4.0~~$2.0 million.

During the ~~nine~~three months ended ~~April 3,~~October 2, 2022, the Company granted ~~74,961~~94,667 restricted stock awards (“RSAs”) to the Company’s non-executive directors, officers and certain other key employees. Generally, the shares of restricted stock granted during the ~~nine~~three months ended ~~April 3,~~October 2, 2022, 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 the shares awarded by using the close price of our common stock as of the date of grant. The weighted average grant date fair value of RSAs granted in the ~~nine~~three months ended ~~April 3,~~October 2, 2022, was ~~$26.14~~$23.55 per share.

The following table summarizes the status of nonvested RSAs as of ~~April 3,~~October 2, 2022, and changes during the ~~nine~~three months then ended.

As of ~~April 3,~~October 2, 2022, there was ~~$1.7~~$3.3 million of total unrecognized compensation expense related to nonvested RSAs. The Company expects this expense to be recognized over a weighted average period of ~~1.7~~2.0 years.

Performance stock units (“PSUs”) are a form of long-term incentive compensation awarded to executive officers and certain other key employees designed to directly align the interests of employees to the interests of the Company’s stockholders, and to create long-term stockholder value. The awards will be earned based on the Company’s achievement of certain performance criteria over a three-year performance period. The performance period for the awards commences on July 1 of the fiscal year in which they were granted and continue for a three-year period, ending on June 30 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 number of shares awarded is subject to further adjustment based on the application of a total shareholder return (“TSR”) modifier. The grant date fair value is determined based on both the probability assessment of the Company 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 nonvested PSUs is recognized ratably over the performance period.

As of ~~April 3,~~October 2, 2022, there was ~~$2.3~~$3.1 million of total unrecognized compensation expense related to nonvested PSUs. The Company expects this expense to be recognized over a weighted average period of ~~1.7~~2.1 years.

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

For the three ~~and nine~~ months ended ~~April 3,~~October 2, 2022 and ~~April 4,~~October 3, 2021, an immaterial number of shares were excluded from the computation of diluted earnings per share as the effect would have been anti-dilutive.

On June 24, 2021, the board of directors of the Company authorized a stock repurchase program that allows for the repurchase of up to ~~$50.0~~$50.0 million of the Company’s common stock during the three-year period ending June 24, 2024. During the three months ended ~~April 3,~~October 2, 2022, the Company repurchased ~~395,948~~191,360 shares of common stock for ~~$10.1~~$4.2 million in cash, including related fees and expenses. During the ~~nine~~three months ended ~~April~~October 3, ~~2022,~~2021, the Company repurchased ~~810,623~~58,379 shares of common stock for ~~$21.5 million in cash, including related fees and expenses.~~$1.5 million. As of ~~April 3,~~October 2, 2022, ~~$28.5~~$20.4 million remained available under the program.

12.

SEGMENT INFORMATION

Reportable Segments

~~Change in Reportable Segments~~

Beginning with the first quarter of fiscal 2022 and as discussed in Note 1, our CODM began to manage our business, allocate resources, and evaluate performance based on the reportable segments of MasterCraft, Crest, NauticStar, and Aviara.

~~Reportable Segments~~

Operating segments are identified as components of an enterprise about which discrete financial information is available for evaluation by the CODM in making decisions on how to allocate resources and assess performance. For the three ~~and nine~~ months ended ~~April 3,~~October 2, 2022, the Company’s CODM regularly assessed the operating performance of the Company’s boat brands under 4three operating and reportable segments:

•

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

•

The Crest segment produces pontoon boats at its Owosso, Michigan facility. Crest’s boats are primarily used for general recreational boating.

•

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

•

~~The Crest segment produces pontoon boats at its Owosso, Michigan facility. Crest’s boats are primarily used for general recreational boating.~~

•

~~The NauticStar segment produces boats at its Amory, Mississippi facility. NauticStar’s boats are primarily used for saltwater fishing and general recreational boating.~~

•

The Aviara segment produces luxury day boats at its Merritt Island, Florida facility. Aviara boats are primarily used for general recreational boating. Beginning in fiscal 2022, the CODM has begun to assess Aviara’s performance on a stand-alone basis using criteria consistent with our other operating and reportable segments.

Each segment distributes its products through its own independent dealer network. 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 the segment, which is regularly assessed by the CODM who allocates resources based on that ~~performance, including using measures of performance based operating income.~~performance.

The Company files a consolidated income tax return and does not allocate income taxes and other corporate-level expenses, including interest, to operating segments. All material corporate costs are included in the MasterCraft segment.

Selected financial information for the Company’s reportable segments was as follows:


	For the Three Months Ended April 3, 2022												For the Three Months Ended October 2, 2022
	MasterCraft		Crest		NauticStar			Aviara			Consolidated		MasterCraft		Crest		Aviara		Consolidated
Net sales	$	119,956	$	38,959	$	17,392		$	10,428		$	186,735	$	113,020	$	43,561	$	12,935	$	169,516
Operating income (loss)		28,051		5,568		(4,117	)		(2,015	)		27,487
Operating income														24,072		7,543		607		32,222
Depreciation and amortization		1,248		657		1,052			602			3,559		1,382		682		537		2,601
Purchases of property, plant and equipment		1,434		1,146		1,047			496			4,123		2,109		2,523		1,336		5,968


	For the Nine Months Ended April 3, 2022												For the Three Months Ended October 3, 2021
	MasterCraft		Crest		NauticStar			Aviara			Consolidated		MasterCraft		Crest		Aviara			Consolidated
Net sales	$	318,744	$	101,457	$	45,817		$	24,192		$	490,210	$	92,015	$	32,780	$	5,855		$	130,650
Operating income (loss)		65,533		14,004		(9,519	)		(7,934	)		62,084		16,180		3,799		(3,599	)		16,380
Depreciation and amortization		3,762		1,998		2,824			1,569			10,153		1,289		694		476			2,459
Goodwill impairment		—		—		—			1,100			1,100		—		—		1,100			1,100
Purchases of property, plant and equipment		4,966		2,190		2,818			865			10,839		2,064		371		115			2,550

For the Three Months Ended April 4, 2021

MasterCraft

Crest

NauticStar

Aviara

Consolidated

Net sales

$
97,023

$
30,362

$
18,045

$
2,424

$
147,854

Operating income (loss)

20,813

4,150

331

(2,731
)

22,563

Depreciation and amortization

1,089

626

817

416

2,948

Purchases of property, plant and equipment

1,109

320

958

2,489

4,876

For the Nine Months Ended April 4, 2021

MasterCraft

Crest

NauticStar

Aviara

Consolidated

Net sales

$
246,125

$
69,370

$
45,336

$
9,445

$
370,276

Operating income (loss)

51,840

8,462

(1,614
)

(5,776
)

52,912

Depreciation and amortization

3,299

1,874

2,433

941

8,547

Purchases of property, plant and equipment

3,807

344

1,717

17,911

23,779

The following table presents total assets for the Company’s reportable segments.


	April 3, 2022		June 30, 2021		October 2, 2022		June 30, 2022
Assets:
MasterCraft	$	154,078	$	158,610	$	186,070	$	178,386
Crest		47,527		42,204		58,442		53,956
NauticStar		56,012		44,181
Aviara		34,597		31,465		37,225		35,115
Discontinued operations						—		29,595
Total assets	$	292,214	$	276,460	$	281,737	$	297,052

ITEM 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 our expectations 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 risks and uncertainties described in “Cautionary Note Regarding Forward-Looking Statements” above and in “Risk Factors” set forth in our ~~2021~~2022 Annual Report on Form 10-K. Our actual results may differ materially from those contained in or implied by any forward-looking statements.

Certain statements in the following discussions are based on non-GAAP financial measures. A “non-GAAP financial measure” is a 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 presented in accordance with U.S. GAAP in the 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 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.

~~Dealer~~On September 2, 2022, the Company completed the sale of its NauticStar business. This business, which was previously reported as the Company's NauticStar segment, is being reported as discontinued operations for all periods presented. The Company's results for all periods presented, as discussed in Management's Discussion and Analysis, are presented on a continuing operations basis with prior year amounts recast to provide visibility and comparability. See Note 3 in Notes to Unaudited Condensed Consolidated Financial Statements for more information on Discontinued Operations.

All segments contributed to the strong performance and reported substantial net sales and increased profitability despite ongoing supply chain disruptions and macroeconomic volatility. Net sales increased $38.9 million, or 29.7 percent, compared to the prior-year period. Gross margin increased 370 basis points due to increased net sales and improved production efficiencies. The increase was partially offset by higher costs from inflationary pressures. Additionally, dealer incentive costs increased as dealer pipeline inventories begin to return to healthier levels following historically low inventory levels ~~remain low compared~~as a result of the COVID-19 pandemic. Moreover, dealer incentive costs increased due to ~~pre-pandemic levels,~~higher interest rates impacting floor plan financing costs.

Our sales are impacted by general economic conditions, which ~~has sustained~~affect the ~~increased wholesale~~ demand for our ~~product. Year over year,~~products, optional features, availability and cost of credit for our dealers and retail consumers, and overall consumer confidence. While the marine industry benefited from changes in consumer preferences accelerated by the COVID-19 pandemic in fiscal 2021 and fiscal 2022, macroeconomic headwinds may adversely impact our financial results in fiscal 2023. However, as retail trends evolve, we ~~have increased production rates~~believe our highly flexible business model will allow us to ~~address wholesale demand, yet supply chain and labor challenges have disrupted our efforts~~mitigate any downward pressures for fiscal 2023.

We will continue to ~~replenish dealer inventory levels. Furthermore, these challenges, coupled with inflationary pressures, have increased costs and reduced our margins. To mitigate~~actively monitor the impact of ~~these challenges~~general economic conditions, supply chain disruptions, macroeconomic volatility, inflation, and other evolving factors on our ~~business, we have increased raw material safety stock, pursued alternative sourcing, altered business processes, and phased in additional mid-cycle price increases.~~business. However, the full extent of the impact on our business, operations, and financial results ~~will depend on evolving factors that we~~ cannot ~~predict.~~be predicted. See Part I. Item 1A. Risk Factors set forth in our ~~2021~~2022 Annual Report on Form 10-K.

We are actively monitoring the impact of changing macroeconomic conditions on our business, including geopolitical events, disrupted global supply chains, and inflation. The impact of these factors has affected many manufacturers across various industries including ours. Supply chain challenges continue to evolve, driven by increased demand, labor shortages, logistical constraints, and rising prices to our suppliers, creating inefficiencies and shipping delays. Rapidly increasing material and overhead costs are outpacing price increases as we try to mitigate the impact. Furthermore, the uncertainty associated with the COVID-19 pandemic remains, which we continue to actively monitor in terms of its potential impact on our results of operations. The extent to which our operations will be impacted by COVID-19 will largely depend on future developments, which are highly uncertain and cannot be accurately predicted.

The table below presents our consolidated results of operations for the three ~~and nine~~ months ended:


	Three Months Ended						2022 vs. 2021						Nine Months Ended						2022 vs. 2021						Three Months Ended						2023 vs. 2022
	April 3,			April 4,						%			April 3,			April 4,						%			October 2,			October 3,						%
	2022			2021			Change			Change			2022			2021			Change			Change			2022			2021			Change			Change

Consolidated statements of operations:
NET SALES	$	186,735		$	147,854		$	38,881			26.3	%	$	490,210		$	370,276		$	119,934			32.4	%	$	169,516		$	130,650		$	38,866			29.7	%
COST OF SALES		144,702			110,627			34,075			30.8	%		382,857			277,546			105,311			37.9	%		123,543			100,068			23,475			23.5	%
GROSS PROFIT		42,033			37,227			4,806			12.9	%		107,353			92,730			14,623			15.8	%		45,973			30,582			15,391			50.3	%
OPERATING EXPENSES:
Selling and marketing		3,611			3,693			(82	)		(2.2	%)		11,288			9,589			1,699			17.7	%		3,779			3,893			(114	)		(2.9	%)
General and administrative		9,948			9,984			(36	)		(0.4	%)		29,881			27,268			2,613			9.6	%		9,483			8,720			763			8.8	%
Amortization of other intangible assets		987			987			—			0.0	%		3,000			2,961			39			1.3	%		489			489			—			0.0	%
Goodwill impairment		—			—			—			—			1,100			—			1,100			—			—			1,100			(1,100	)		—
Total operating expenses		14,546			14,664			(118	)		(0.8	%)		45,269			39,818			5,451			13.7	%		13,751			14,202			(451	)		(3.2	%)
OPERATING INCOME		27,487			22,563			4,924			21.8	%		62,084			52,912			9,172			17.3	%		32,222			16,380			15,842			96.7	%
OTHER EXPENSE:
OTHER INCOME (EXPENSE):
Interest expense		341			755			(414	)		(54.8	%)		1,080			2,644			(1,564	)		(59.2	%)		(562	)		(382	)		(180	)		47.1	%
Interest income																										151			—			151			—
INCOME BEFORE INCOME TAX EXPENSE		27,146			21,808			5,338			24.5	%		61,004			50,268			10,736			21.4	%		31,811			15,998			15,813			98.8	%
INCOME TAX EXPENSE		6,211			4,240			1,971			46.5	%		14,281			10,632			3,649			34.3	%		7,176			3,766			3,410			90.5	%
NET INCOME	$	20,935		$	17,568		$	3,367			19.2	%	$	46,723		$	39,636		$	7,087			17.9	%
NET INCOME FROM CONTINUING OPERATIONS																									$	24,635		$	12,232		$	12,403			101.4	%
Additional financial and other data:
Unit sales volume:
MasterCraft		900			933			(33	)		(3.5	%)		2,569			2,346			223			9.5	%		781			783			(2	)		(0.3	%)
Crest		855			731			124			17.0	%		2,261			1,759			502			28.5	%		846			716			130			18.2	%
NauticStar		348			426			(78	)		(18.3	%)		949			1,067			(118	)		(11.1	%)
Aviara		29			8			21			262.5	%		71			32			39			121.9	%		32			19			13			68.4	%
Consolidated unit sales volume		2,132			2,098			34			1.6	%		5,850			5,204			646			12.4	%		1,659			1,518			141			9.3	%
Net sales:
MasterCraft	$	119,956		$	97,023		$	22,933			23.6	%	$	318,744		$	246,125		$	72,619			29.5	%	$	113,020		$	92,015		$	21,005			22.8	%
Crest		38,959			30,362			8,597			28.3	%		101,457			69,370			32,087			46.3	%		43,561			32,780			10,781			32.9	%
NauticStar		17,392			18,045			(653	)		(3.6	%)		45,817			45,336			481			1.1	%
Aviara		10,428			2,424			8,004			330.2	%		24,192			9,445			14,747			156.1	%		12,935			5,855			7,080			120.9	%
Consolidated net sales	$	186,735		$	147,854		$	38,881			26.3	%	$	490,210		$	370,276		$	119,934			32.4	%	$	169,516		$	130,650		$	38,866			29.7	%
Net sales per unit:
MasterCraft	$	133		$	104		$	29			27.9	%	$	124		$	105		$	19			18.1	%	$	145		$	118		$	27			22.9	%
Crest		46			42			4			9.5	%		45			39			6			15.4	%		51			46			5			10.9	%
NauticStar		50			42			8			19.0	%		48			42			6			14.3	%
Aviara		360			303			57			18.8	%		341			295			46			15.6	%		404			308			96			31.2	%
Consolidated net sales per unit		88			70			18			25.7	%		84			71			13			18.3	%		102			86			16			18.6	%
Gross margin		22.5	%		25.2	%	(270) bps							21.9	%		25.0	%	(310) bps							27.1	%		23.4	%	370 bps

Net sales increased ~~26.3 percent and 32.4~~29.7 percent during the ~~third~~first quarter ~~and first nine months~~ of fiscal ~~2022, respectively,~~2023, when compared with the same ~~prior year periods. Net~~prior-year period. The net sales ~~benefited from~~increase reflects increased ~~sales~~ volume ~~as our dealers continue to restock their inventories. Higher prices,~~and mix, along with price increases. Volume and mix include higher unit volume, favorable model mix, increased content, strong option demand and higher ~~option sales~~parts revenue. Price increases were ~~also favorable compared~~partially offset by increased dealer incentives for floor plan financing costs and other incentives as dealer inventories begin to return to normal following historically low levels due to the ~~prior period. Refer to the MasterCraft, Crest, NauticStar, and Aviara segments for further details on the drivers of net sales changes.~~COVID-19 pandemic.

Gross margin ~~percentage declined 270 basis points and 310~~increased 370 basis points during the ~~third~~first quarter ~~and first nine months~~ of fiscal 2022, respectively, compared to the same prior year periods. Lower margins were the result of supply chain disruptions and inflationary pressures that drove material and overhead costs higher and were most pronounced at the NauticStar segment. Though we implemented mitigating procedures and phased in mid-cycle price increases to offset these headwinds, supply chain disruptions and inflationary pressures continued to impact our margins.

Operating expenses were flat during the third quarter and increased 13.7 percent during the first nine months of fiscal 2022 when compared to the same prior year periods. Despite our increased costs during the first nine months, selling, general, and administrative expenses as a percentage of sales have decreased2023, when compared to the same prior-year period. ~~Selling and marketing expense increased~~The increase was primarily due to ~~timing of prior-year~~higher net sales and improved production efficiencies, partially offset by higher costs from inflationary pressures and higher dealer incentives.

Operating expenses ~~being impacted by the COVID-19 pandemic, resulting in lower costs for the first nine months of fiscal 2021. General and administrative expenses increased~~decreased $0.5 million during the first ~~nine months as a result~~quarter of ~~continued investments in information technology. Additionally,~~fiscal 2023, when compared to the same prior-year period, primarily due to an impairment charge of $1.1 million related to the allocated goodwill associated with the Aviara segment ~~was~~ recorded in the first quarter of fiscal 2022, as discussed in Note 45 to the Unaudited Condensed Consolidated Financial Statements.

~~Interest expense decreased due to lower effective interest rates and lower average outstanding debt balances during the current year periods compared to the prior year periods.~~

As discussed in Note 1 to our Unaudited Condensed Consolidated Financial Statements and beginning with the first quarter of fiscal 2022, our CODM began to manage our business, allocate resources, and evaluate performance based on the reportable segments of MasterCraft, Crest, NauticStar, and Aviara.

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

Net sales increased ~~23.6 percent and 29.5~~22.8 percent during the ~~third~~first quarter ~~and first nine months~~ of fiscal ~~2022, respectively,~~2023, when compared with the same ~~prior year periods.~~prior-year period. The increase was ~~primarily~~ driven by higher prices, higher option and content sales, and favorable model mix, ~~higher prices, and higher option sales. For the third quarter, the increase was~~ partially offset by ~~decreased sales volumes. Lower sales volume for the quarter was driven by supply chain disruptions and absenteeism~~higher dealer incentives as dealer pipeline inventories begin to return to healthier levels. Also, dealer incentives increased due to ~~COVID-19, which created inefficiencies and shipping delays. In contrast to the third quarter, the first nine months benefited from increased sales volumes.~~higher interest rates impacting floor plan financing costs.

Operating income increased ~~$7.2 million and $13.7~~$7.9 million during the ~~third~~first quarter ~~and first nine months~~ of fiscal ~~2022, respectively,~~2023, when compared to the same ~~prior year periods.~~prior-year period. The increase was driven by higher net sales and improved production efficiencies, partially offset by higher material and overhead costs from inflationary pressures and production inefficiencies from supply chain disruptions and labor challenges. Additionally, for the first nine months of fiscal 2022, Selling and marketing expense increased due to timing of prior-year expenses being impacted by the COVID-19 pandemic, resulting in lower costs for the first nine months of fiscal 2021. Also, General and administrative expenses increased as a result of continued investments in product development and information technology.higher dealer incentives.

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

Net sales increased ~~$8.6 million and $32.1~~$10.8 million during the ~~third~~first quarter ~~and first nine months~~ of fiscal ~~2022, respectively,~~2023, when compared to the same ~~prior year~~prior-year periods, as a result of higher ~~sales volumes~~prices, higher unit volume, and higher ~~prices.~~option sales.

Operating income for the ~~third~~first quarter ~~and first nine months~~ of fiscal ~~2022~~2023 increased ~~34.2~~98.6 percent, ~~and 65.5 percent, respectively,~~ when compared to the same ~~prior year~~prior-year periods. The increase is primarily the result of higher net sales, partially offset by higher material costs from inflationary pressures.

Purchases of property, plant, and equipment increased $0.8 million and $1.8 million for the third quarter and first nine months of fiscal 2022, respectively, when compared to the same prior year periods due to investments in manufacturing capacity expansion and maintenance capital.

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

Net sales decreased $0.7 million for the third quarter of fiscal 2022 when compared to the same prior-year period. The benefits of higher prices and favorable model mix did not overcome the decreased sales volume during the third quarter. Lower sales volume was driven by supply chain disruptions and production inefficiencies, which created shipping delays. Net sales increased $0.5 million for the first

~~nine months of fiscal 2022, due to higher prices, favorable model mix, and higher option sales, partially offset by decreased sales volumes.~~

Operating loss was $4.1 million and $9.5 million for the third quarter and first nine months of fiscal 2022, respectively. Supply chain disruptions, labor challenges, and higher costs from inflationary pressures, offset benefits from higher sales prices. Additionally, for the third quarter of fiscal 2022, $0.2 million in expense was recognized for third-party consulting fees in an effort to improve operational efficiency and increase throughput at the NauticStar segment.

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

Net sales increased ~~$8.0 million and $14.7~~$7.1 million during the ~~third quarter and~~ first ~~nine months of fiscal 2022, respectively, when compared to the same prior year periods, due to an increase in sales volume, favorable model mix, and higher prices.~~

During fiscal 2022, all Aviara boats were manufactured in our 140,000 square foot Merritt Island, Florida facility, which we purchased in October 2020. During the first six months of 2021, the production of Aviara boats at our MasterCraft facility in Vonore, Tennessee, was winding down and transitioning to the Merritt Island facility. As a result of this transition, overhead costs attributable to Aviara increased significantly which created a dilutive near-term impact on Aviara’s margins and profitability.

~~Operating loss decreased $0.7 million for the third~~ quarter of fiscal ~~2022 as a result of increased production, partially offset by inflationary pressures~~2023, when ~~compared to the third quarter of fiscal 2021. Operating loss increased $2.2 million for the first nine months of fiscal 2022,~~ compared to the same prior-year period, due to ~~inflation, ramp up related inefficiencies at~~increased unit volume, higher prices, and favorable model mix.

Operating income was $0.6 million for the ~~Merritt Island facility, including~~first quarter of fiscal 2023, compared to an operating loss of $3.6 million for the first quarter of fiscal 2022. The change was primarily a result of higher ~~overhead~~net sales and improved production efficiencies, partially offset by higher material costs ~~associated with the new facility, and~~from inflationary pressures. Additionally, a goodwill impairment charge was recorded during the first quarter of fiscal 2022. ~~See Note 4 in Notes to Unaudited Condensed Consolidated Financial Statements for more information on the impairment charge.~~

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 or other items that we do not consider to be indicative of our core and/or ongoing operations. For the periods presented herein, these adjustments include ~~operational improvement initiative costs, Aviara transition costs,~~share-based compensation and ~~certain non-cash items including~~ goodwill ~~impairment and share-based compensation.~~impairment. We define Adjusted EBITDA margin as Adjusted EBITDA expressed as a percentage of Net sales.

We define Adjusted Net Income and Adjusted Net Income per share as net income from continuing operations, adjusted to eliminate certain non-cash charges or other items that we do not consider to be indicative of our core and/or ongoing operations and reflecting income tax expense on adjusted net income before income taxes at our estimated annual effective tax rate. For the periods presented herein, these adjustments include ~~operational improvement initiative costs, Aviara transition costs, and certain non-cash items including goodwill impairment,~~ other intangible asset amortization, share-based compensation, and ~~share-based compensation.~~ goodwill impairment.

EBITDA, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Income, and Adjusted 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, or U.S. GAAP. 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. We believe that the inclusion of the Non-GAAP Measures is appropriate to provide additional information to investors because securities analysts and investors use 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 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 measures alone. We believe Adjusted Net Income and Adjusted Net Income per share assists our board of directors, management, investors, and 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 other items that we do not consider to be indicative of our core and/or ongoing operations and 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:

In addition, because not all companies use identical calculations, our presentation of the Non-GAAP Measures may not be comparable to similarly titled measures of other companies, including companies in our industry.

Beginning in the first quarter of fiscal 2023, due to the effects of discontinued operations, as discussed above, the Company's non-GAAP financial measures are presented on a continuing operations basis, for all periods presented.

The following table 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 margin (expressed as a percentage of net sales) to Adjusted EBITDA Margin (expressed as a percentage of net sales) for the periods indicated:

Three Months Ended

Nine Months Ended

April 3,

% of Net

April 4,

% of Net

April 3,

% of Net

April 4,

% of Net

2022

sales

2021

sales

2022

sales

2021

sales

Net income

$
20,935

11.2%

$
17,568

11.9%

$
46,723

9.5%

$
39,636

10.7%

Income tax expense

6,211

4,240

14,281

10,632

Interest expense

341

755

1,080

2,644

Depreciation and amortization

3,559

2,948

10,153

8,547

EBITDA

31,046

16.6%

25,511

17.3%

72,237

14.7%

61,459

16.6%

Share-based compensation

772

902

2,876

2,185

Operational improvement initiative^(a)

232

—

232

—

Goodwill impairment^(b)

—

—

1,100

—

Aviara transition costs^(c)

—

1,125

—

2,149

Adjusted EBITDA

$
32,050

17.2%

$
27,538

18.6%

$
76,445

15.6%

$
65,793

17.8%

(a)

Represents a non-cash charge recorded in the Aviara segment for impairment of goodwill.

~~(a)~~

~~Represents third-party consulting fees associated with the operational improvement initiative at our NauticStar segment.~~

~~(b)~~

~~Represents a non-cash charge recorded in the Aviara segment for impairment of goodwill. See Note 4 for more information on the goodwill impairment charge.~~

~~(c)~~

Represents costs to transition production of the Aviara brand from Vonore, Tennessee to Merritt Island, Florida. Costs include duplicative overhead costs and costs not indicative of ongoing operations (such as training and facility preparation).

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


	Three Months Ended
	October 2,		October 3,
	2022		2021
	(Dollars in thousands, except per share data)
Net income from continuing operations	$	24,635	$	12,232
Income tax expense		7,176		3,766
Amortization of acquisition intangibles		462		462
Share-based compensation		1,120		862
Goodwill impairment(a)		—		1,100
Adjusted Net Income before income taxes		33,393		18,422
Adjusted income tax expense(b)		7,680		4,237
Adjusted Net Income	$	25,713	$	14,185

Adjusted Operating Net Income per share:
Basic	$	1.43	$	0.75
Diluted	$	1.43	$	0.75
Weighted average shares used for the computation of(c):
Basic Adjusted Net Income per share		17,946,061		18,850,301
Diluted Adjusted Net Income per share		18,031,725		19,004,119

Three Months Ended

Nine Months Ended

April 3,

April 4,

April 3,

April 4,

2022

2021

2022

2021

(Dollars in thousands, except per share data)

Net income

$
20,935

$
17,568

$
46,723

$
39,636

Income tax expense

6,211

4,240

14,281

10,632

Amortization of acquisition intangibles

960

960

2,920

2,882

Share-based compensation

772

902

2,876

2,185

Operational improvement initiative^(a)

232

—

232

—

Goodwill impairment^(b)

—

—

1,100

—

Aviara transition costs^(c)

—

1,125

—

2,149

Adjusted Net Income before income taxes

29,110

24,795

68,132

57,484

Adjusted income tax expense^(d)

6,695

5,703

15,670

13,221

Adjusted Net Income

$
22,415

$
19,092

$
52,462

$
44,263

Adjusted Net Income per share:

Basic

$
1.23

$
1.01

$
2.82

$
2.35

Diluted

$
1.21

$
1.01

$
2.79

$
2.34

Weighted average shares used for the computation of^(e):

Basic Adjusted Net Income per share

18,295,949

18,817,975

18,622,878

18,799,875

Diluted Adjusted Net Income per share

18,487,346

18,989,629

18,796,867

18,928,288

(a)

Represents a non-cash charge recorded in the Aviara segment for impairment of goodwill.

(b)

Reflects income tax expense at an income tax rate of 23.0% for each period presented.

(c)

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 diluted share for all periods presented herein.

~~(a)~~

~~Represents third-party consulting fees associated with the operational improvement initiative at our NauticStar segment.~~

~~(b)~~

~~Represents a non-cash charge recorded in the Aviara segment for impairment of goodwill. See Note 4 for more information on the goodwill impairment charge.~~

~~(c)~~

~~(d)~~

~~Reflects income tax expense at an income tax rate of 23.0% for each period presented.~~

~~(e)~~

The following table presents the reconciliation of net income from continuing operations per diluted share to Adjusted Net Income per diluted share for the periods presented:


	Three Months Ended
	October 2,			October 3,
	2022			2021
Net income from continuing operations per diluted share	$	1.37		$	0.65
Impact of adjustments:
Income tax expense		0.40			0.20
Amortization of acquisition intangibles		0.03			0.02
Share-based compensation		0.06			0.05
Goodwill impairment(a)		—			0.06
Adjusted Net Income per diluted share before income taxes	$	1.86		$	0.98
Impact of adjusted income tax expense on net income per diluted share before income taxes(b)		(0.43	)		(0.23	)
Adjusted Net Income per diluted share	$	1.43		$	0.75

Three Months Ended

Nine Months Ended

April 3,

April 4,

April 3,

April 4,

2022

2021

2022

2021

Net income per diluted share

$
1.13

$
0.93

$
2.49

$
2.09

Impact of adjustments:

Income tax expense

0.34

0.22

0.76

0.57

Amortization of acquisition intangibles

0.05

0.05

0.16

0.15

Share-based compensation

0.04

0.05

0.15

0.12

Operational improvement initiative^(a)

0.01

—

0.01

—

Goodwill impairment^(b)

—

—

0.06

—

Aviara transition costs^(c)

—

0.06

—

0.11

Adjusted Net Income per diluted share before income taxes

$
1.57

$
1.31

$
3.63

$
3.04

Impact of adjusted income tax expense on net income per diluted share before income taxes^(d)

(0.36
)

(0.30
)

(0.84
)

(0.70
)
Adjusted Net Income per diluted share

$
1.21

$
1.01

$
2.79

$
2.34

(a)

Represents a non-cash charge recorded in the Aviara segment for impairment of goodwill.

(b)

Reflects income tax expense at an income tax rate of 23.0% for each period presented.

~~(a)~~

~~Represents third-party consulting fees associated with the operational improvement initiative at our NauticStar segment.~~

~~(b)~~

~~Represents a non-cash charge recorded in the Aviara segment for impairment of goodwill. See Note 4 for more information on the goodwill impairment charge.~~

~~(c)~~

~~(d)~~

~~Reflects income tax expense at an income tax rate of 23.0% for each period presented.~~

Liquidity and Capital Resources

Our primary liquidity and capital resource needs are to finance working capital, fund capital expenditures, service our debt, ~~and~~ fund our stock repurchase ~~program.~~program, and fund potential business acquisitions. Our principal sources of liquidity are our cash balance, cash generated from operating activities, our revolving credit agreement and the refinancing and/or new issuance of long-term debt. We believe our cash balance, cash from operations, and our ability to borrow will be sufficient to provide for our liquidity and capital resource needs.

Cash and cash equivalents totaled ~~$13.8~~$40.8 million as of ~~April 3,~~October 2, 2022, ~~a decrease~~an increase of ~~$25.5~~$6.6 million from ~~$39.3~~$34.2 million as of June 30, ~~2021.~~2022. Total debt as of ~~April 3,~~October 2, 2022 and June 30, ~~2021~~2022 was ~~$65.0~~$55.8 million and ~~$93.1~~$56.5 million, respectively.

Our working capital was impacted by the $28.9 million increase in inventory during the first nine months of fiscal 2022 mainly due to an increase in raw materials to support higher production volumes and to increase safety stock to manage supply chain risk. Work in process has increased due to supply chain disruptions.

As of ~~April 3,~~October 2, 2022, we had ~~$7.7 million~~no amounts outstanding under the Revolving Credit Facility, leaving ~~$92.3~~$100.0 million of available borrowing capacity. Refer to Note 78 — Long Term Debt in the Notes to Unaudited Condensed Consolidated Financial Statements for further details.

On June 24, 2021, the board of directors of the Company authorized a stock repurchase program that allows for the repurchase of up to $50.0 million of our common stock during the three-year period ending June 24, 2024. During the ~~nine~~three months ~~ending April 3,~~ended October 2, 2022, the Company repurchased ~~810,623~~191,360 shares of common stock for ~~$21.5~~$4.2 million in cash, including related fees and expenses.

We are continuing to monitor the impact of supply chain disruptions, production inefficiencies, and inflationary pressures on our business. However, we believe our cash balance, cash from operations, and our ability to borrow will be sufficient to provide for our liquidity and capital resource needs, including authorized stock repurchases.

The following table summarizes our cash flows from continuing operations from operating, investing, and financing activities:


	Nine Months Ended						Three Months Ended
	April 3,			April 4,			October 2,			October 3,
	2022			2021			2022			2021
	(Dollars in thousands)						(Dollars in thousands)
Total cash provided by (used in):
Operating activities	$	35,302		$	54,393		$	20,718		$	(7,450	)
Investing activities		(10,839	)		(23,779	)		(5,968	)		(2,550	)
Financing activities		(49,949	)		(17,963	)		(5,393	)		(10,428	)
Net change in cash	$	(25,486	)	$	12,651
Net change in cash from continuing operations							$	9,357		$	(20,428	)

~~Nine~~Three Months Ended ~~April 3,~~October 2, 2022 Cash Flow

Net cash provided by operating activities for the ~~nine~~three months ended ~~April 3,~~October 2, 2022 ~~totaled $35.3~~was $20.7 million, ~~versus $54.4 million compared to the same prior-year period. The decrease is~~ primarily due to ~~working capital usage,~~higher net earnings, partially offset by ~~higher~~working capital usage. Working capital is defined as accounts receivable, income tax receivable, inventories, and prepaid expenses and other current assets net ~~earnings during fiscal 2022.~~of accounts payable, income tax payable, and accrued expenses and other current liabilities as presented in the condensed consolidated balance sheets, excluding the impact of acquisitions and non-cash adjustments. Working capital usage primarily consisted of an increase in ~~inventory,~~inventories and income tax receivable, and a decrease in accrued expenses and other current liabilities and income tax payable. Partially offsetting the working capital usage was a decrease in accounts receivable and prepaid expenses and other current assets. ~~Partially offsetting~~Inventories increased as we rebalance inventory levels after the ~~working capital usage was an increase in accounts~~summer selling season and increased materials costs from inflation. Income tax receivable increased and income tax payable ~~and accrued~~decreased due to the tax benefit generated from the sale of NauticStar. Accrued expenses and other current ~~liabilities. As discussed above, inventory~~liabilities decreased due to payment of variable compensation and payment of dealer incentives, partially offset by increased ~~$28.9 million for first nine months of 2022.~~warranty costs. Accounts receivable ~~increased~~decreased as a result of ~~timing~~lower sales at the end of ~~shipments.~~the period compared to the end of the prior-year period due to supply chain disruptions. Prepaid expenses and other current assets ~~increased~~decreased due to ~~higher general~~amortization of insurance premiums. ~~Accounts payable increased as a result of increased production levels. Accrued expenses and other current liabilities increased due to an increase in warranty costs and dealer incentives.~~

Net cash used ~~for~~in investing activities was ~~$10.8~~$6.0 million, which included capital expenditures. Our capital spending was focused on expanding our capacity, maintenance capital, and ~~maintenance capital.~~information technology.

Net cash used ~~for~~in financing activities was ~~$49.9~~$5.4 million, which included net payments of ~~$28.3~~$0.8 million on long-term debt and stock repurchases totaling ~~$21.5~~$4.2 million.

~~Nine~~23

Three Months Ended ~~April 4,~~October 3, 2021 Cash Flow

Net cash ~~provided by~~used in operating activities for the ~~nine~~three months ended ~~April 4,~~October 3, 2021 totaled ~~$54.4~~$7.5 million ~~primarily~~mainly due to ~~net income net of non-cash expense items, an increase in accounts payable and accrued expenses and other current liabilities, and a decrease in income tax receivable,~~working capital usage, partially offset by net income. Working capital usage primarily consisted of an increase in inventory, accounts receivable, and ~~prepaid~~a decrease in accrued expenses and other current ~~assets.~~liabilities. Partially offsetting the working capital usage was an increase in accounts payable. Inventory increased $17.0 million for the first quarter of fiscal 2022 due to an increase in raw materials to support higher production volumes and to increase safety stock to manage supply chain risk. Work in process increased due to supply chain disruptions. Accounts ~~payable and inventory~~receivable increased ~~as a result~~due to increased sales at the end of ~~increased production.~~the period compared to the end of the prior-year period. Accrued expenses and other current liabilities ~~increased due to timing~~decreased because of continuing strong retail demand without the need for rebates and payments of variable compensation ~~costs,~~that was accrued for at June 30, 2021. Accounts payable increased ~~warranty, dealer incentive, and transportation costs, and an~~mainly due to the increase in customer deposits. Income tax receivable decreased due to a receipt of a tax refund associated with fiscal 2020. Accounts receivable increased as a result of increased sales. Prepaid expenses and other current assets increased due to payment of annual insurance premiums during the third quarter of fiscal 2021.inventory safety stock.

Net cash used ~~for~~in investing activities was ~~$23.8~~$2.6 million, which consisted of capital ~~expenditures, including the purchase of the Merritt Island, Florida manufacturing facility.~~expenditures. Our capital spending was focused on expanding our capacity and maintenance capital.

Net cash used ~~for~~in financing activities was ~~$18.0~~$10.4 million and related ~~primarily~~ to net payments of long-term ~~debt.~~

~~Contractual Obligations~~

~~In October 2021, we entered into a new supplier agreement to purchase marine outboard engines during fiscal 2022. During the term~~debt of $8.8 million and funding of the agreement, we committed to purchasing a minimum annual gross dollar value of $27.0 million in engines. Except for the new purchase agreement and the net repayment of debt of $28.3 million during the nine months ended April 3, 2022, there were no material changes to our contractual obligations disclosed in “Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” set forth in our Annual Report on Form 10-K for the fiscal year ended June 30, 2021.stock repurchase program totaling $1.5 million.

Off Balance Sheet Arrangements

The Company did not have any off balance sheet financing arrangements as of ~~April 3,~~October 2, 2022.

Critical Accounting Policies

~~Except as noted below, as~~As of ~~April 3,~~October 2, 2022, there were no significant changes in or changes to the application of our critical accounting policies or estimation procedures from those presented in our Annual Report on Form 10-K for the fiscal year ended June 30, ~~2021,~~2022, which was filed with the SEC on September ~~2, 2021.~~

~~Other Intangible Assets~~

During the three and nine months ended April 3, 2022 and April 4, 2021, the Company did not record impairment charges related to its Other intangible assets. Given current period operating losses combined with a history of operating losses and operational inefficiencies, the Company continues to monitor the NauticStar segment’s outlook for sales and operating performance relative to the forecasts of expected future cash flows used in the Company’s previous impairment tests in order to evaluate whether the carrying value of the segment’s intangible assets remain above fair value. Should economic conditions, such as supply chain disruptions, labor challenges, and inflationary pressures, deteriorate in future periods or remain depressed for a prolonged period of time, or operational inefficiencies grow, estimates of future cash flows may not be sufficient to support the carrying value of NauticStar’s intangible assets. ~~See Note 4 in the Notes to Unaudited Condensed Consolidated Financial Statements for further details.~~9, 2022.

ITEM 3.QUANTITATIVE AND ~~QUALITATI~~VEQUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Refer to our ~~2021~~2022 Annual Report for a complete discussion of the Company’s market risk. There have been no material changes in market risk from those disclosed therein.

ITEM 4.CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures (as defined in Rule 13a-15(e) and 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 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 ~~April 3,~~October 2, 2022.

Changes in Internal Control Over Financial Reporting

There have been no changes in our internal control over financial reporting during the quarter ended ~~April 3,~~October 2, 2022 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 67 Commitments and Contingencies to the Company’s unaudited condensed consolidated financial statements.

ITEM 1A. RISK FACTORS.

~~ITEM 1A.~~

~~RISK FACTORS.~~

During the ~~nine~~three months ended ~~April 3,~~October 2, 2022, there were no material changes to the risk factors disclosed in “Part I, Item 1A. Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended June 30, ~~2021.~~2022.

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

~~ITEM 2.~~

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

Stock Repurchase Program

On June 24, 2021, the board of directors of the Company authorized a stock repurchase program that allows for the repurchase of up to $50.0 million of our common stock during the three-year period ending June 24, 2024. During the first ~~nine~~three months of fiscal ~~2022,~~2023, we repurchased approximately ~~$21.5~~$4.2 million of our common ~~stock, including approximately $10.1 million during~~stock. As of October 2, 2022, the ~~three months ended April 3, 2022. The~~ remaining authorization under the program was approximately ~~$28.5~~$20.4 million.

During the three months ended ~~April 3,~~October 2, 2022, the Company repurchased the following shares of common stock:


Period	Total Number of Shares Purchased		Average Price Paid Per Share(a)		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)
July 1, 2022 - July 31, 2022		-	$	-		-	$	24,546
August 1, 2022 - August 28, 2022		-		-		-		24,546
August 29, 2022 - October 2, 2022		191,360		21.81		191,360		20,368
Total		191,360	$	21.81		191,360	$	20,368

Period

Total Number of Shares Purchased

Average Price Paid Per Share^(a)

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 3, 2022 - January 30, 2022

153,787

$
24.19

153,787

$
34,902

January 31, 2022 - February 27, 2022

42,687

27.09

42,687

33,745

February 28, 2022 - April 3, 2022

199,474

26.04

199,474

28,546

Total

395,948

25.43

395,948

28,546

(a)

Represents weighted average price paid per share excluding commissions paid.

~~(a)~~

~~Represents weighted average price paid per share excluding commissions paid.~~

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None.

~~DEFAULTS UPON SENIOR SECURITIES.~~

~~None.~~

ITEM 4. MINE SAFETY DISCLOSURES.

None.

~~MINE SAFETY DISCLOSURES.~~

~~None.~~

ITEM 5. OTHER INFORMATION.

None.

~~ITEM 5.~~

~~OTHER INFORMATION.~~

~~None.~~

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

Incorporated by Reference

Exhibit
No.

Description

Form

File No.

Exhibit

Filing Date

Filed
Herewith

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

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

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

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

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

8-K

001-37502

3.2

10/25/19

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 Document

101.CAL

Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.LAB

Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE

Inline XBRL Taxonomy Extension Presentation Linkbase Document

101.DEF

Inline XBRL Taxonomy Extension Definition Linkbase Document

104

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

* Filed herewith.

** Furnished herewith.

SIGNATURES

~~Filed herewith.~~

**	~~Furnished herewith.~~

~~SIGNATURES~~

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


		MASTERCRAFT BOAT HOLDINGS, INC.
		(Registrant)

Date:	~~May 11,~~November 9, 2022	By:	/s/ FREDERICK A. BRIGHTBILL
			Frederick A. Brightbill
			Chief Executive Officer (Principal Executive Officer) and Chairman of the Board

Date:	~~May 11,~~November 9, 2022	By:	/s/ TIMOTHY M. OXLEY
			Timothy M. Oxley
			Chief Financial Officer (Principal Financial and Accounting Officer),
			Treasurer and Secretary

3127


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



		Page

PART I	FINANCIAL INFORMATION
Item 1.	Financial Statements
	Unaudited Condensed Consolidated Statements of Operations	4
	Unaudited Condensed Consolidated Balance Sheets	5
	Unaudited Condensed Consolidated 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	1917
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	2824
Item 4.	Controls and Procedures	2824

PART II	OTHER INFORMATION
Item 1.	Legal Proceedings	2925
Item 1A.	Risk Factors	2925
Item 2.	Unregistered Sales of Securities and Use of Proceeds	2925
Item 3.	Defaults Upon Senior Securities	2925
Item 4.	Mine Safety Disclosures	2925
Item 5.	Other Information	2925
Item 6.	Exhibits, Financial Statement Schedules	3026

SIGNATURES		3127


	April 3,			June 30,			October 2,			June 30,
	2022			2021			2022			2022
Raw materials and supplies	$	60,026		$	37,089		$	49,023		$	45,021
Work in process		15,818			10,171			10,288			7,634
Finished goods		9,183			8,362			11,856			7,710
Obsolescence reserve		(2,674	)		(2,141	)		(2,377	)		(1,770	)
Total inventories	$	82,353		$	53,481		$	68,790		$	58,595


	April 3,		June 30,		October 2,		June 30,
	2022		2021		2022		2022
Warranty	$	25,681	$	22,329	$	26,920	$	25,824
Dealer incentives		13,227		10,634		10,418		15,508
Compensation and related accruals						3,356		4,908
Contract liabilities		2,151		1,848		1,898		1,447
Compensation and related accruals		6,487		6,046
Self-insurance						1,240		1,171
Freight		1,163		778		1,080		1,157
Self-insurance		1,347		865
Liabilities retained associated with discontinued operations						1,043		—
Inventory repurchase contingent obligation		1,279		471		774		661
Other		3,734		3,865		3,945		3,761
Total accrued expenses and other current liabilities	$	55,069	$	46,836	$	50,674	$	54,437


	April 3,			April 4,			October 2,			October 3,
	2022			2021			2022			2021
Balance at the beginning of the period	$	22,329		$	20,004		$	25,824		$	20,655
Provisions		9,435			7,158			3,345			2,332
Payments made		(7,444	)		(6,328	)		(3,177	)		(2,407	)
Aggregate changes for preexisting warranties		1,361			1,135			928			952
Balance at the end of the period	$	25,681		$	21,969		$	26,920		$	21,532


☑	QUARTERLY 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


Large accelerated filer	☐	Accelerated filer	☑

Non-accelerated filer	☐	Smaller reporting company	☐

Emerging growth company	☐


	Three Months Ended October 2, 2022
	MasterCraft		Crest		Aviara		Total
Major Product Categories:
Boats and trailers	$	108,204	$	43,143	$	12,935	$	164,282
Parts		4,237		253		—		4,490
Other revenue		579		165		—		744
Total	$	113,020	$	43,561	$	12,935	$	169,516


	Three Months Ended April 3, 2022										Three Months Ended October 3, 2021
	MasterCraft		Crest		NauticStar		Aviara		Total		MasterCraft		Crest		Aviara		Total
Major Product Categories:
Boats and trailers	$	116,964	$	38,351	$	17,275	$	10,428	$	183,018	$	87,929	$	32,369	$	5,855	$	126,153
Parts		2,742		262		115		—		3,119		3,828		236		—		4,064
Other revenue		250		346		2		—		598		258		175		—		433
Total	$	119,956	$	38,959	$	17,392	$	10,428	$	186,735	$	92,015	$	32,780	$	5,855	$	130,650

	Nine Months Ended April 3, 2022
	MasterCraft		Crest		NauticStar		Aviara		Total
Major Product Categories:
Boats and trailers	$	309,356	$	100,088	$	45,511	$	24,192	$	479,147
Parts		8,625		649		295		—		9,569
Other revenue		763		720		11		—		1,494
Total	$	318,744	$	101,457	$	45,817	$	24,192	$	490,210

	Three Months Ended April 4, 2021
	MasterCraft		Crest		NauticStar		Aviara		Total
Major Product Categories:
Boats and trailers	$	93,771	$	29,973	$	17,913	$	2,424	$	144,081
Parts		2,973		274		129		—		3,376
Other revenue		279		115		3		—		397
Total	$	97,023	$	30,362	$	18,045	$	2,424	$	147,854

	Nine Months Ended April 4, 2021
	MasterCraft		Crest		NauticStar		Aviara		Total
Major Product Categories:
Boats and trailers	$	236,138	$	68,341	$	44,986	$	9,445	$	358,910
Parts		9,244		803		340		—		10,387
Other revenue		743		226		10		—		979
Total	$	246,125	$	69,370	$	45,336	$	9,445	$	370,276

				Average
	Nonvested			Grant-Date					Average
	Restricted			Fair Value		Nonvested			Grant-Date
	Shares			(per share)		Restricted			Fair Value
Nonvested at June 30, 2021		118,193		$	19.42
						Shares			(per share)
Nonvested at June 30, 2022							106,408		$	21.65
Granted		74,961			26.14		94,667			23.55
Vested		(58,803	)		19.24		(34,418	)		18.71
Forfeited		(8,534	)		24.65		(4,727	)		22.11
Nonvested at April 3, 2022		125,817			23.16
Nonvested at October 2, 2022							161,930			23.38

	For the Nine Months Ended April 4, 2021
	MasterCraft		Crest		NauticStar			Aviara			Consolidated
Net sales	$	246,125	$	69,370	$	45,336		$	9,445		$	370,276
Operating income (loss)		51,840		8,462		(1,614	)		(5,776	)		52,912
Depreciation and amortization		3,299		1,874		2,433			941			8,547
Purchases of property, plant and equipment		3,807		344		1,717			17,911			23,779


	Three Months Ended
	October 2,			% of Net	October 3,		% of Net
	2022			sales	2021		sales
Net income from continuing operations	$	24,635		14.5%	$	12,232	9.4%
Income tax expense		7,176				3,766
Interest expense		562				382
Interest income		(151	)			—
Depreciation and amortization		2,601				2,459
EBITDA		34,823		20.5%		18,839	14.4%
Share-based compensation		1,120				862
Goodwill impairment(a)		—				1,100
Adjusted EBITDA	$	35,943		21.2%	$	20,801	15.9%

Period	Total Number of Shares Purchased		Average Price Paid Per Share^(a)		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 3, 2022 - January 30, 2022		153,787	$	24.19		153,787	$	34,902
January 31, 2022 - February 27, 2022		42,687		27.09		42,687		33,745
February 28, 2022 - April 3, 2022		199,474		26.04		199,474		28,546
Total		395,948		25.43		395,948		28,546