Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Jun. 30, 2017 | Sep. 07, 2017 | Jan. 01, 2017 | |
Document and Entity Information | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Jun. 30, 2017 | ||
Document Fiscal Year Focus | 2,017 | ||
Document Fiscal Period Focus | FY | ||
Entity Registrant Name | MCBC Holdings, Inc. | ||
Entity Central Index Key | 1,638,290 | ||
Current Fiscal Year End Date | --06-30 | ||
Entity Current Reporting Status | Yes | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Accelerated Filer | ||
Entity Public Float | $ 271,090,256 | ||
Entity Common Stock, Shares Outstanding | 18,637,445 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2017 | Jun. 30, 2016 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 4,038 | $ 73 |
Accounts receivable — net of allowances of $82 and $65, respectively | 3,500 | 2,966 |
Income tax receivable | 5 | |
Inventories, net (Note 4) | 11,676 | 13,268 |
Prepaid expenses and other current assets (Note 5) | 2,438 | 1,780 |
Total current assets | 21,652 | 18,092 |
Property, plant and equipment — net (Note 6) | 14,827 | 13,826 |
Intangible assets — net (Note 7) | 16,643 | 16,750 |
Goodwill | 29,593 | 29,593 |
Deferred debt issuance costs — net | 481 | 601 |
Deferred income taxes (Note 2 and 11) | 3,501 | |
Other | 125 | 170 |
Total assets | 83,321 | 82,533 |
CURRENT LIABILITIES | ||
Accounts payable | 11,008 | 13,112 |
Income tax payable | 780 | 1,108 |
Accrued expenses and other current liabilities (Note 8) | 21,410 | 22,276 |
Current portion of long term debt, net of unamortized debt issuance costs (Note 10) | 3,687 | 7,885 |
Total current liabilities | 36,885 | 44,381 |
Long-term debt, net of unamortized debt issuance costs Note 10) | 30,790 | 44,342 |
Deferred income taxes (Note 2 and 11) | 953 | |
Unrecognized tax positions (Note 11) | 2,932 | 2,189 |
Total liabilities | 71,560 | 90,912 |
COMMITMENTS AND CONTINGENCIES (Note 13) | ||
STOCKHOLDERS' EQUITY (DEFICIT): | ||
Common stock, $.01 par value per share — authorized, 100,000,000 shares; issued and outstanding, 18,637,445 shares at June 30, 2017 and 18,591,808 shares at June 30, 2016 | 186 | 186 |
Additional paid-in capital | 112,945 | 112,375 |
Accumulated deficit | (101,370) | (120,940) |
Total stockholders' equity (deficit) | 11,761 | (8,379) |
Total liabilities and stockholders' equity (deficit) | $ 83,321 | $ 82,533 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2017 | Jun. 30, 2016 |
CONSOLIDATED BALANCE SHEETS | ||
Allowance for doubtful accounts | $ 82 | $ 65 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, authorized shares | 100,000,000 | 100,000,000 |
Common stock, issued shares | 18,637,445 | 18,591,808 |
Common stock, outstanding shares | 18,637,445 | 18,591,808 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2015 | |
CONSOLIDATED STATEMENTS OF OPERATIONS | |||
NET SALES | $ 228,634 | $ 221,600 | $ 214,386 |
COST OF SALES | 165,158 | 160,521 | 163,220 |
GROSS PROFIT | 63,476 | 61,079 | 51,166 |
OPERATING EXPENSES: | |||
Selling and marketing | 9,380 | 9,685 | 8,552 |
General and administrative | 20,474 | 29,162 | 18,472 |
Amortization of intangible assets | 107 | 221 | 222 |
Total operating expenses | 29,961 | 39,068 | 27,246 |
OPERATING INCOME | 33,515 | 22,011 | 23,920 |
OTHER EXPENSE (INCOME): | |||
Interest expense | 2,222 | 1,280 | 5,171 |
Change in common stock warrant fair value | 3,425 | 6,621 | |
Other income | (1,212) | ||
INCOME BEFORE INCOME TAX EXPENSE | 31,293 | 18,518 | 12,128 |
INCOME TAX EXPENSE | 11,723 | 8,308 | 6,594 |
NET INCOME | $ 19,570 | $ 10,210 | $ 5,534 |
EARNINGS PER COMMON SHARE: | |||
Basic (in dollars per share) | $ 1.05 | $ 0.57 | $ 0.50 |
Diluted (in dollars per share) | $ 1.05 | $ 0.56 | $ 0.47 |
WEIGHTED AVERAGE SHARES USED FOR COMPUTATION OF: | |||
Basic earnings per share (in shares) | 18,592,885 | 17,849,319 | 11,139,000 |
Diluted earnings per share (in shares) | 18,620,708 | 18,257,007 | 11,862,699 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT) - USD ($) $ in Thousands | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Total |
Balance, beginning at Jun. 30, 2014 | $ 111 | $ 8,841 | $ (12,739) | $ (3,787) |
Balance, beginning (in shares) at Jun. 30, 2014 | 11,139,000 | |||
Increase (decrease) in stockholders' equity | ||||
Dividends | (44,000) | (44,000) | ||
Net income | 5,534 | 5,534 | ||
Balance, ending at Jun. 30, 2015 | $ 111 | 8,841 | (51,205) | (42,253) |
Balance, ending (in shares) at Jun. 30, 2015 | 11,139,000 | |||
Increase (decrease) in stockholders' equity | ||||
Sale of common stock in IPO, net of $9,309 in underwriter discounts, commissions and offering expenses | $ 61 | 81,701 | 81,762 | |
Sale of common stock in IPO, net of $9,309 in underwriter discounts, commissions and offering expenses (in shares) | 6,071,429 | |||
Issuance of shares of common stock warrants and options | $ 9 | 12,653 | 12,662 | |
Issuance of shares of common stock warrants and options (shares) | 864,946 | |||
Repurchase and retirement of common stock | $ (4) | (4,322) | (4,326) | |
Repurchase and retirement of common stock (shares) | (378,417) | |||
Equity-based compensation activity | $ 9 | 13,502 | 13,511 | |
Equity-based compensation activity (shares) | 894,850 | |||
Offering costs | (9,309) | |||
Dividends | (79,945) | (79,945) | ||
Net income | 10,210 | 10,210 | ||
Balance, ending at Jun. 30, 2016 | $ 186 | 112,375 | (120,940) | (8,379) |
Balance, ending (in shares) at Jun. 30, 2016 | 18,591,808 | |||
Increase (decrease) in stockholders' equity | ||||
Equity-based compensation activity | 1,019 | 1,019 | ||
Equity-based compensation activity (shares) | 45,637 | |||
Offering costs | (449) | (449) | ||
Net income | 19,570 | 19,570 | ||
Balance, ending at Jun. 30, 2017 | $ 186 | $ 112,945 | $ (101,370) | $ 11,761 |
Balance, ending (in shares) at Jun. 30, 2017 | 18,637,445 |
CONSOLIDATED STATEMENTS OF STO6
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT) (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT) | ||
Underwriter discounts, commission and offering expenses | $ 449 | $ 9,309 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2015 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net income | $ 19,570 | $ 10,210 | $ 5,534 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 3,231 | 3,444 | 3,278 |
Inventory obsolescence reserve | 399 | 359 | 776 |
Paid in kind interest | 1,034 | ||
Deferred issuance costs | 361 | 109 | 169 |
Stock-based compensation | 711 | 13,687 | |
Loss on extinguishment of debt | 716 | 852 | |
Change in common stock warrant fair value | 3,425 | 6,621 | |
Unrecognized tax benefits | 743 | 1,670 | (101) |
Deferred income taxes | 4,454 | (3,923) | 6,062 |
Net provision for doubtful accounts | 17 | (27) | (373) |
Loss on disposal of fixed assets | 10 | 1 | 78 |
Changes in operating assets and liabilities: | |||
Accounts receivable | (551) | (286) | 2,126 |
Inventories | 1,193 | (2,086) | (632) |
Prepaid expenses and other current assets | (658) | 3,348 | (5,667) |
Income tax receivable | 5 | (5) | |
Other assets | 45 | (45) | (45) |
Accounts payable | (2,104) | (1,697) | 1,788 |
Income tax payable | (328) | 884 | 42 |
Accrued expenses and other current liabilities | (866) | 963 | 3,712 |
Net cash provided by operating activities | 26,232 | 30,747 | 25,254 |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Disposal of assets | (10) | ||
Purchases of property and equipment | (4,135) | (3,817) | (3,467) |
Net cash used in investing activities | (4,135) | (3,817) | (3,477) |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Proceeds from issuance of common stock | 91,071 | ||
Proceeds from issuance of long-term debt | 50,000 | 75,000 | |
Payments of costs directly associated with offerings | (449) | (7,202) | |
Cash paid for withholding taxes on vested stock | (4) | ||
Excess tax benefits | 312 | ||
Principal payments on long-term debt | (14,865) | (71,250) | (70,764) |
Proceeds from revolving line of credit | 9,208 | 20,188 | |
Payments on revolving line of credit | (3,126) | (14,271) | (12,000) |
Repurchase and retirement of common stock | (4,502) | ||
Payments of debt discount | (923) | (1,120) | |
Payments of deferred financing costs | (300) | (453) | |
Dividends paid | (79,945) | (44,000) | |
Proceeds from exercise of common stock warrant | 90 | ||
Net cash used in financing activities | (18,132) | (28,024) | (33,149) |
NET CHANGE IN CASH AND CASH EQUIVALENTS | 3,965 | (1,094) | (11,372) |
CASH AND CASH EQUIVALENTS — BEGINNING OF PERIOD | 73 | 1,167 | 12,539 |
CASH AND CASH EQUIVALENTS — END OF PERIOD | 4,038 | 73 | 1,167 |
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: | |||
Cash payments for interest | 2,006 | 397 | 2,725 |
Cash payments for income taxes | $ 6,541 | 9,635 | $ 551 |
SIGNIFICANT NON-CASH INVESTING AND FINANCING ACTIVITIES: | |||
Payment of costs directly associated with the issuance of common stock | 2,107 | ||
Issuance of shares of common stock warrants | $ 12,572 |
ORGANIZATION AND NATURE OF BUSI
ORGANIZATION AND NATURE OF BUSINESS | 12 Months Ended |
Jun. 30, 2017 | |
ORGANIZATION AND NATURE OF BUSINESS | |
ORGANIZATION AND NATURE OF BUSINESS | 1. MCBC Holdings, Inc. (“MCBC” or the “Company”) was formed on January 28, 2000, as a Delaware holding company that operates primarily through its wholly owned subsidiaries, MasterCraft Boat Company, LLC and MCBC Hydra Boats, LLC. MCBC and its subsidiaries collectively are referred to herein as the “Company”. The Company is a designer and manufacturer of premium inboard tournament ski boats and luxury performance V-drive runabouts under the MasterCraft brand. The Company also leases a parts warehouse in the United Kingdom to expedite service, primarily to dealers and customers in the European Union. |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 12 Months Ended |
Jun. 30, 2017 | |
BASIS OF PRESENTATION | |
BASIS OF PRESENTATION | 2. The accompanying financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, MasterCraft Boat Company, LLC; MasterCraft Services, Inc.; MCBC Hydra Boats, LLC; MasterCraft Parts, Ltd.; and MasterCraft International Sales Administration, Inc. |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Jun. 30, 2017 | |
SIGNIFICANT ACCOUNTING POLICIES | |
SIGNIFICANT ACCOUNTING POLICIES | 3. Principles of Consolidation — The consolidated financial statements include the accounts of MCBC and its wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. Use of Estimates — The preparation of the Company’s consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, sales, and expenses and related disclosures. The Company bases these estimates on historical results and various other assumptions believed to be reasonable. The Company’s most significant financial statement estimates include allowances for bad debts, warranty liability, inventory allowance for obsolescence, self-insurance liability, fair value of stock options and warrant, inventory repurchase contingent obligation, uncertain tax positions, impairment of long-lived assets and intangibles subject to amortization, impairment of goodwill and indefinite-lived intangibles, and potential litigation claims and settlements. Actual results could differ from those estimates. Revenue Recognition — The Company’s revenue is derived primarily from the sale of boats, marine parts, and accessories. Revenue is recognized in accordance with the terms of the sale, primarily upon shipment to customers, once the sales price is fixed or determinable and collectability is reasonably assured. The Company offers discounts and sales incentives that include retail promotions, rebates, and floor plan reimbursement costs that are recorded as reductions of revenues in net sales in the consolidated statements of operations. The estimated liability and reduction in revenue for sales incentives is recorded at the later of when the program has been communicated to the customer or at the time of sale. Dealers generally have no rights to return unsold boats. Occasionally, the Company may accept returns in limited circumstances and at the Company’s discretion under its warranty policy (Note 8). The Company may be obligated, in the event of default by a dealer, to accept returns of unsold boats under its repurchase commitment to floor financing providers, who are able to obtain such boats through foreclosure. The Company accrues estimated losses when a loss, due to the default of one of its dealers, is determined to be probable and the amount of the loss is reasonably estimable. Dealer Incentives The Company provides for various structured dealer rebate and sales promotions incentives, which are recognized as a reduction in net sales, at the time of sale to the dealer. Dealer rebate and sales promotions incentives are based on actual wholesale rebate and applicable sales promotion expenses at the time of sale to the dealer. Examples of such programs include seasonal discounts, volume commitment rebates and other allowances. Dealer rebate and sales promotion incentives recorded during the years ended June 30, 2017, 2016, and 2015, were $5,660, $6,701 and $5,152, respectively. Rebates may apply to boats already in dealer inventory. These “retail rebates” on boats in the dealer’s inventory are recorded when the rebate is communicated to the dealer. Retail rebates are estimated based on current programs and historical achievement and/or usage rates. Actual results may differ from these estimates if market conditions dictate the need to enhance or reduce sales promotion and incentive programs or if dealer achievement or other items vary from historical trends. Retail rebates recorded during the years ended June 30, 2017, 2016, and 2015, were $5,484, $3,628 and $2,987, respectively. Accrued rebates are included in accrued expenses and other current liabilities in the accompanying consolidated balance sheets. Floor Plan Reimbursement Costs The Company participates in various programs whereby it agrees to reimburse its dealers for certain floor plan interest costs incurred by such dealers for limited periods of time, ranging up to nine months. Such costs are included as a reduction in net sales in the consolidated statements of operations and totaled $3,705, $3,472 and $2,459 for the years ended June 30, 2017, 2016, and 2015, respectively. Shipping and Handling Costs — The Company includes shipping and handling costs billed to customers in net sales in the consolidated statements of operations. The Company includes costs incurred to transport product to customers and internal handling costs, which relate to activities to prepare goods for shipment, in cost of sales. For the years ended June 30, 2017, 2016, and 2015, shipping and handling costs billed to customers totaled $4,124, $4,043 and $4,050, respectively, and shipping and handling costs included in cost of sales totaled $3,584, $3,952 and $4,461, respectively. Accounts Receivable — Accounts receivable represents amounts billed to customers under credit terms customary in its industry. The Company normally does not charge interest on its accounts receivable. The Company determines its allowance for doubtful accounts by considering a number of factors, including the length of time trade accounts receivable are past due, the Company’s previous loss history, the customer’s current ability to pay its obligation to the Company, and the condition of the general economy and the industry as a whole. The Company writes-off accounts receivable when they become uncollectible, and payments subsequently received on such receivables are credited to bad debt recovery. Cash and Cash Equivalents — The Company considers all highly-liquid investments with an original maturity of three months or less to be cash and cash equivalents. The Company’s cash deposits are in financial institutions located in Tennessee and Ohio and may at times exceed federally insured amounts. The Company had no cash equivalents at June 30, 2017 and 2016. Concentrations of Credit and Business Risk — Financial instruments that potentially subject the Company to concentrations of credit risk primarily consist of trade receivables. Credit risk on trade receivables is mitigated as a result of the Company’s use of trade letters of credit, dealer floor plan financing arrangements, and the geographically diversified nature of the Company’s customer base. The Company is dependent on third-party equipment manufacturers, distributors, and dealers for certain parts and materials utilized in the manufacturing process. In 2017, 2016, and 2015 the Company purchased all engines for its MasterCraft boats under a supply agreement with one vendor. Total purchases to this vendor were $31,075, $31,232 and $29,027 for 2017, 2016, and 2015, respectively. Total accounts payable to this vendor were $2,291 and $2,309 as of June 30, 2017 and 2016, respectively. The Company is dependent on the ability of its suppliers to provide products on a timely basis and on favorable pricing terms. The loss of certain principal suppliers or a significant reduction in product availability from principal suppliers could have a material adverse effect on the Company. Business risk insurance is in place to mitigate the business risk associated with sole suppliers for sudden disruptions such as those caused by natural disasters. Inventories — Inventories are valued at the lower of cost or market and are shown net of an inventory allowance in the balance sheet. Inventory cost includes material, labor, and manufacturing overhead and is determined based on the first-in, first-out (FIFO) method. Provisions are made as necessary to reduce inventory amounts to their net realizable value or to provide for obsolete products. Property, Plant, and Equipment — Property, plant, and equipment are recorded at historical cost less accumulated depreciation, and depreciated on a straight-line basis over the estimated useful lives. Repairs and maintenance are charged to operations as incurred, and expenditures for additions and improvements that increase the asset’s useful life are capitalized. Ranges of asset lives used for depreciation purposes are: Buildings and improvements 7 - 40 years Machinery and equipment 3 - 7 years Furniture and fixtures 3 - 5 years Goodwill and Other Intangible Assets — The Company does not amortize goodwill and other purchased intangible assets with indefinite lives. All of the Company’s goodwill and intangible assets relate to the MasterCraft reporting unit. The Company’s primary intangible assets with finite lives consist of a dealer network, developed technologies, software, and order backlog, and are carried at their estimated fair values at the time of acquisition, less accumulated amortization. Amortization is recognized on a straight-line basis over the estimated useful lives of the respective assets (see Note 7). Intangible assets that are subject to amortization are evaluated for impairment using a process similar to that used to evaluate long-lived assets described below. Impairment of Goodwill and Other Intangible Assets — The Company performed a qualitative assessment of goodwill and other indefinite-lived intangible assets for the years ended June 30, 2017, 2016 and 2015 to determine if it was more likely than not that the fair value of a reporting unit was less than its carrying amount. Based on the Company’s qualitative assessments it was determined that there was no impairment charge related to its intangible assets during the years ended June 30, 2017, 2016, and 2015. These assets are reviewed for impairment at least annually and whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Impairment of Long-Lived Assets Other Than Indefinite-Lived Assets — The Company assesses the potential for impairment of its long- lived assets if facts and circumstances, such as declines in sales, earnings, or cash flows or adverse changes in the business climate, suggest that they may be impaired. The Company performs its review by comparing the book value of the assets to the estimated future undiscounted cash flows associated with the assets. If any impairment in the carrying value of its long-lived assets is indicated, the assets would be adjusted to an estimate of fair value. The Company did not evaluate its long-lived assets for impairment as of June 30, 2017 and 2016 as no triggering event occurred. Income Taxes — Income tax expense is the total of the current year income tax due or refundable and the change in deferred tax assets and liabilities. The Company records its global tax provision based on the respective tax rules and regulations for the jurisdictions in which it operates. Deferred tax assets and liabilities are the expected future tax amounts for the temporary differences between carrying amounts and tax bases of assets and liabilities, computed using enacted tax rates. Valuation allowances are recorded to reduce deferred tax assets when it is more likely than not that a tax benefit will not be realized. Significant judgment is required in evaluating the need for and magnitude of appropriate valuation allowances against deferred tax assets. The realization of these assets is dependent on generating future taxable income. A tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. The Company recognizes interest and/or penalties related to income tax matters in income tax expense. In determining the amount of current and deferred tax the Company takes into account the impact of uncertain tax positions and whether additional taxes, interest and penalties may be due. The Company believes that its accruals for tax liabilities are adequate for all open tax years based on its assessment of many factors, including interpretations of tax law and prior experience. This assessment relies on estimates and assumptions and may involve a series of judgments about future events. New information may become available that causes the Company to change its judgment regarding the adequacy of existing tax liabilities; such changes to tax liabilities will have an impact on tax expense in the period that such a determination is made. The income tax effects of the differences we identify are classified as long-term deferred tax assets and liabilities in our Consolidated Balance Sheets as of June 30, 2017 and June 30, 2016, following the adoption of ASU 2015-17, Income Taxes during the year ended June 30, 2016. Product Warranties — The Company offers warranties on the sale of certain products for a period of up to five years and records an accrual for estimated future claims. Such accruals are based upon historical experience and management’s estimates of the level of future claims, and are subject to adjustment as actual claims are determined or as changes in the obligations become reasonably estimable. Such costs are included in cost of sales in the consolidated statements of operations. In fiscal 2014, the Company entered into a contract with an insurance company to reimburse warranty claims paid to independent boat dealerships for years two through five of the warranty period. During fiscal 2016, the Company terminated this insurance contract. Research and Development — Research and development expenditures are expensed as incurred. The amount charged against the years ended June 30, 2017, 2016, and 2015 was $3,550, $3,508 and $3,027, respectively, and is included in operating expenses in the consolidated statements of operations. Self-Insurance — The Company is self-insured for certain losses relating to product liability claims and employee medical claims. The Company has purchased stop-loss coverage in order to limit its exposure to any significant levels under these plans. Losses are accrued based upon the Company’s estimates of the aggregate liability for self-insured claims incurred using certain actuarial assumptions followed in the insurance industry and the Company’s historical experience. Deferred Financing Costs — Certain costs incurred to obtain financing are capitalized and amortized over the term of the related debt using the effective interest method. For the year ended June 30, 2017 the Company did not incur any deferred financing costs. For the years ended June 30, 2016 and 2015, the Company incurred deferred financing costs of $300 and $453, respectively. For the years ended June 30, 2017, 2016, and 2015 the Company recorded amortization of $361, $85 and $42, respectively. Stock-Based Compensation — Compensation cost is recognized for stock options issued to employees, based on the fair value of these awards at the date of grant. The Black-Scholes model is utilized to estimate the fair value of stock options. Compensation cost is recognized over the required service period, generally defined as the vesting period. For awards with graded vesting, compensation cost is recognized on a straight-line basis over the requisite service period for the entire award. Common Stock Warrant — The Company accounted for its freestanding common stock warrant as a liability until settlement. As of June 3, 2016, all of the common stock warrants were exercised or exchanged. Changes in the estimated fair value of the warrant are separately stated in the consolidated statements of operations. Advertising — Advertising costs are expensed as incurred. The amount charged against operations during the years ended June 30, 2017, 2016, and 2015, was $5,201, $5,725 and $5,521, respectively, and is included in selling and marketing expenses in the consolidated statements of operations. Fair Value Measurements — The Company measures its “financial” assets and liabilities and certain “non-financial” assets and liabilities at fair value and utilizes the established framework for measuring fair value and disclosing information about fair value measurements. Fair value is the price received to transfer an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Measuring fair value involves a hierarchy of valuation inputs used to measure fair value. This hierarchy prioritizes the inputs into three broad levels as follows: Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities; Level 2 inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly; and, Level 3 inputs are unobservable inputs in which little or no market data exists, therefore requiring a company to develop its own valuation assumptions. Fair Value of Financial Instruments — The carrying amounts of the Company’s financial instruments, consisting of cash and cash equivalents, accounts receivable, accounts payable and other liabilities, approximate their estimated fair values due to the relative short-term nature of the amounts. The carrying amount of debt approximates fair value due to variable interest rates at customary terms and rates the Company could obtain in current financing. Repurchase Commitments — In connection with its dealers’ wholesale floor-plan financing of boats, the Company has entered into repurchase agreements with various lending institutions. The repurchase commitment is on an individual unit basis with a term from the date it is financed by the lending institution through the payment date by the dealer, generally not exceeding two and a half years. The Company accrues estimated losses for obligations to repurchase inventory repossessed from dealerships by financial institutions when it is probable that a loss has been incurred and the amount of loss is reasonably estimable. The Company has applied these provisions to its floor plan repurchase agreements as disclosed in Notes 8 and 13. Earnings Per Common Share — Basic earnings per common share reflects reported earnings divided by the weighted average number of common shares outstanding. Diluted earnings per common share include the effect of dilutive stock options and warrant and the respective tax benefits, unless inclusion would not be dilutive. Operating Leases — The Company leases warehouse space and equipment under operating lease arrangements. Lease agreements may include rent holidays, rent escalation clauses, and tenant improvement allowances. The Company recognizes scheduled rent increases on a straight-line basis over the lease term beginning with the date the Company takes possession of the leased space. Segment Information — Operating segments are identified as components of an enterprise about which discrete financial information is available for evaluation by the chief operating decision maker in making decisions on how to allocate resources and assess performance. The Company views its operations in two operating segments based on product brand consisting of the MasterCraft brand and the Hydra-Sports brand. Hydra-Sports production was terminated on June 30, 2015. New Accounting Pronouncements Issued But Not Yet Adopted In May 2017, the Financial Accounting Standards Board (the “FASB”) issued ASU 2017-09 , Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting. This guidance provides clarity and reduces complexity when applying the guidance in Topic 718, Compensation—Stock Compensation to a change to the term or condition of a share-based payment. ASU 2017-09 is effective for annual reporting periods, and interim periods therein, beginning after December 15, 2017. The Company is currently evaluating the effect that the adoption of this new guidance is expected to have on our financial position or results of operations and related disclosures. 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 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. The Company is currently evaluating the effect that the adoption of this new guidance is expected to have on our 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 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 fiscal year beginning July 1, 2018. The Company is continuing to assess the potential effects of these ASUs 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. 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 of adoption of these ASUs have not yet been quantified. Additionally, the Company’s expectations may change as its implementation progresses. In August 2016, the FASB issued ASU 2016-15, Classification of Certain Cash Receipts and Cash Payments . ASU 2016-15 addresses how certain cash receipts and cash payments are presented and classified in the statement of cash flows under Topic 230, Statement of Cash Flow , and other Topics. ASU 2016-15 is effective for annual reporting periods, and interim periods therein, beginning after December 15, 2017. The Company does not expect the adoption of this guidance to have a material impact on its consolidated financial statements. 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 permitted. The Company is currently evaluating the impact of this new guidance , but does not expect it will have a material impact on its consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) . This guidance establishes a right-of-use (“ROU”) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. The new standard is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. A modified retrospective transition approach is required for lessees for capital 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. The Company is currently evaluating the impact this new guidance is expected to have on its financial position or results of operations and related disclosures. In July 2015, the FASB issued Accounting Standards Update (“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 is currently evaluating the impact of this new guidance , but does not expect it will have a material impact on its consolidated financial statements. 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 . |
INVENTORIES
INVENTORIES | 12 Months Ended |
Jun. 30, 2017 | |
INVENTORIES | |
INVENTORIES | 4. Inventories at June 30, 2017 and 2016 consisted of the following: 2017 2016 Raw materials and supplies $ 7,164 $ 5,420 Work in process 1,772 2,196 Finished goods 3,427 5,984 Obsolescence reserve (687) (332) Total inventories $ 11,676 $ 13,268 Activity in the obsolescence reserve was as follows for the years ended June 30, 2017 and 2016: 2017 2016 Beginning balance $ (332) $ (480) Charged to costs and expenses (399) (359) Disposals 44 507 Ending balance $ (687) $ (332) |
PREPAID EXPENSES AND OTHER CURR
PREPAID EXPENSES AND OTHER CURRENT ASSETS | 12 Months Ended |
Jun. 30, 2017 | |
PREPAID EXPENSES AND OTHER CURRENT ASSETS | |
PREPAID EXPENSES AND OTHER CURRENT ASSETS | 5. Prepaid expenses and other current assets at June 30, 2017 and 2016, consisted of the following: 2017 2016 Prepaid photo shoot $ 497 $ 650 Insurance 765 591 Trade show deposits 73 133 Other 1,103 406 Total prepaid expenses and other current assets $ 2,438 $ 1,780 |
PROPERTY, PLANT, AND EQUIPMENT
PROPERTY, PLANT, AND EQUIPMENT | 12 Months Ended |
Jun. 30, 2017 | |
PROPERTY, PLANT, AND EQUIPMENT | |
PROPERTY, PLANT, AND EQUIPMENT | 6. Property, plant, and equipment — net at June 30, 2017 and 2016, consisted of the following: 2017 2016 Land and improvements $ 1,125 $ 1,125 Buildings and improvements 8,208 8,371 Machinery and equipment 16,189 17,666 Furniture and fixtures 847 1,028 Construction in progress 3,465 1,930 Total property, plant, and equipment 29,834 30,121 Less accumulated depreciation (15,007) (16,295) Property, plant, and equipment — net $ 14,827 $ 13,826 Depreciation expense for the years ended June 30, 2017, 2016, and 2015 was $3,124, $3,223 and $3,057, respectively. |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 12 Months Ended |
Jun. 30, 2017 | |
INTANGIBLE ASSETS | |
INTANGIBLE ASSETS | 7. As of June 30, 2017 and 2016, details of the Company’s intangible assets other than goodwill were as follows: 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 2016 Gross Net Carrying Accumulated Carrying Amount Amortization Amount Dealer network $ 1,590 $ (840) $ 750 Total amortizable intangible assets 1,590 (840) 750 Trade names 16,000 — 16,000 Total intangible assets $ 17,590 $ (840) $ 16,750 The amortizable intangible assets reflected in the table above were determined by management to have finite lives. The useful life for the dealer network intangible, which is 14 years, was based on the average tenure of the dealer group. The trade names have been determined to have indefinite lives and are not being amortized, based on management’s expectation that trade names will generate cash flows for an indefinite period. Management expects to maintain usage of the trade names on existing products and introduce new products in the future under the trade names, thus extending their lives indefinitely. Amortization expense for the years ended June 30, 2017, 2016, and 2015, was $107, $221 and $222, respectively. Estimated amortization expense for the five years subsequent to June 30, 2017, is shown in the following table: Fiscal years ending June 30, 2018 $ 107 2019 107 2020 107 2021 107 2022 107 and thereafter 108 Total $ 643 |
ACCRUED EXPENSES AND OTHER CURR
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | 12 Months Ended |
Jun. 30, 2017 | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | 8. Accrued expenses and other current liabilities at June 30, 2017 and 2016, consisted of the following: 2017 2016 Warranty $ 12,237 $ 11,392 Self-insurance 763 809 Compensation and related accruals 1,691 1,706 Inventory repurchase contingent obligation 1,008 742 Interest 1,008 1,178 Dealer incentives 2,755 4,336 Other 1,948 2,113 Total accrued expenses and other current liabilities $ 21,410 $ 22,276 The following table provides a roll forward of the accrued warranty liability for the years ended June 30, 2017 and 2016: 2017 2016 Beginning balance $ 11,392 $ 10,228 Provisions 4,723 5,461 Payments made (3,052) (4,297) Adjustments to preexisting warranties (825) — Ending balance $ 12,237 $ 11,392 Activity in dealer incentives for the years ended June 30, 2017 and 2016 was as follows: 2017 2016 Beginning balance $ 4,336 $ 3,568 Provisions 11,160 10,759 Payments made (12,741) (9,991) Ending balance $ 2,755 $ 4,336 |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended |
Jun. 30, 2017 | |
FAIR VALUE MEASUREMENTS | |
FAIR VALUE MEASUREMENTS | 9. Fair value is the exchange price that would be received for an asset or paid to transfer 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 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 summarizes the basis used to measure certain financial assets and liabilities at fair value as of June 30, 2017: 2017 Fair Value Measurements Using Level 1 Level 2 Level 3 Asset — interest rate cap $ — $ 90 $ — There were no financial assets or liabilities subject to fair value measurements at June 30, 2016. The interest rate cap is valued utilizing pricing models taking into account inputs such as interest rates and notional amounts. 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 fiscal year ended June 30, 2017. The Company had issued a common stock warrant for the purchase of 1,113,900 shares of common stock which was classified within Level 3 because it was valued using valuation techniques using certain inputs that are unobservable in the market. The strike price was $4.27 per share and is subject to adjustment based on stock splits, stock dividends and certain other events or transactions. The Company used an option pricing model to estimate the fair value of the warrant as of June 30, 2015. Key inputs used in valuing the Company’s warrant include the Company’s common stock price (estimated using a combination of the income and market approach), the Company’s common stock price volatility, risk-free interest rate, and exercise price of the warrant. The estimated expected volatility was based on the volatility of common stock of a group of comparable, publicly traded companies. As of June 3, 2016 all holders of the common stock warrants had exchanged or exercised their warrants for common stock. The following table shows the reconciliation from the beginning to the ending balance for the Company’s common stock warrant liability measured at fair value on a recurring basis using significant unobservable inputs (i.e., Level 3) at June 30, 2016: 2016 Beginning balance 9,147 Issuance of shares for common stock warrant (12,572) Change in common stock warrant fair value 3,425 Ending balance — |
LONG-TERM DEBT
LONG-TERM DEBT | 12 Months Ended |
Jun. 30, 2017 | |
LONG-TERM DEBT | |
LONG-TERM DEBT | 10. Long-term debt outstanding at June 30, 2017 and 2016 is as follows: 2017 2016 Revolving credit facility $ — $ 3,126 Senior secured term loan 35,135 50,000 Debt issuance costs on term loan (658) (899) Total debt 34,477 52,227 Less current portion of long-term debt 3,904 8,126 Less current portion of debt issuance costs on term loan (217) (241) Long-term debt — less current portion $ 30,790 $ 44,342 In December 2013, certain of the Company’s subsidiaries entered into a credit and guaranty agreement with Fifth Third Bank, as the agent and letter of credit issuer, SunTrust Bank as the syndication agent and the other lenders party thereto, the (“Senior Secured Credit Facility”). The Senior Secured Credit Facility provided, among other things, for (i) an initial term loan commitment of $25,000; and (ii) a revolving loan commitment of $10,000. In November 2014, the Company entered into a first amendment to the Senior Secured Credit Facility to, among other things, increase the Term Loan Facility to $50,000, repay all amounts outstanding under our Senior Secured PIK Notes due 2014 with the additional borrowings under our Term Loan Facility and extend the maturity date to November 26, 2019. In March 2015, the Company entered into an Amended and Restated Credit and Guaranty Agreement (the “Amended and Restated Credit and Guaranty Agreement”) which increased the term loan commitment from $50,000 to $75,000 and increased the revolving loan to $30,000. The Company initially borrowed $20,000 on the revolving loan and repaid $10,000 during March 2015. The Company used $44,000 of the proceeds to pay a cash dividend to common stockholders in March 2015. The dividend per basic and diluted common share was $3.95 and $3.71, respectively. In July 2015, the Company repaid all outstanding borrowings under its $75,000 term loan facility and its outstanding borrowings under its $30,000 revolving line of credit with the proceeds received from the IPO. The Company recorded a loss on debt extinguishment of $716, consisting of a charge of $676 to extinguish the debt discount and $40 in unamortized deferred financing costs incurred under its $75,000 term loan facility. In February 2016, the Company amended its Senior Secured Credit Facility to provide that the Company may repurchase shares in an aggregate amount not to exceed $20,000. In May 2016, the Company entered into a Second 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 “Amended Credit Agreement”). The Amended Credit Agreement replaces the Company’s Amended and Restated Credit Agreement, dated March 13, 2015 (as amended in February 2016. The Amended Credit Agreement provides the Company with an $80,000 senior secured credit facility, consisting of a $50,000 term loan (the “Term Loan”) and a $30,000 revolving credit facility (the “Revolving Credit Facility”). The Amended Credit Agreement bears interest, at the Company’s option, at either the prime rate plus an applicable margin ranging from 0.75% to 1.50% or at an adjusted London Interbank Offered Rate (“LIBOR”) plus an applicable margin ranging from 2.75% to 3.50%, in each case based on the Company’s senior leverage ratio. Based on the Company’s senior leverage ratio for the fiscal year ended June 30, 2017, the applicable margin for loans accruing interest at the prime rate is 0.75% and the applicable margin for loans accruing interest at LIBOR is 2.75%. The Amended Credit Agreement is secured by a first-priority security interest in substantially all of the Company’s assets. Obligations under the Amended Credit Agreement are guaranteed by the Company and each of its domestic subsidiaries. The Amended 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 specified consolidated fixed charge coverage ratio and a specified total leverage ratio. The Amended Credit Agreement includes customary events of default, including, but not limited to, payment defaults, covenant defaults, breaches of representations and warranties, cross-defaults to certain indebtedness, certain events of bankruptcy and insolvency, defaults under any security documents, and a change of control. The Term Loan will mature and all remaining amounts outstanding thereunder will be due and payable on May 26, 2021. The Company used the proceeds to pay a $79,945 cash dividend to common stockholders in June 2016. The cash dividend payment per share was $4.30 based on shares outstanding as of June 6, 2016. Under the Revolving Credit Facility, as of June 30, 2017, the Company had no borrowings and as of June 30, 2016, the Company had borrowings of $3,126. As of June 30, 2017 and 2016, the Company had net availability of $29,750 and $26,627, respectively. Availability was reduced by outstanding letters of credit of $250 at June 30, 2017 and June 30, 2016. As of June 30, 2017 and 2016, the effective interest rate on borrowings outstanding were 3.803% and 3.559%, respectively. As of June 30, 2017 the Company was in compliance with all of its debt covenants under its Term Loan and Revolving Credit Facility. Long-term debt maturities for the Term Loan subsequent to June 30, 2017 are as follows: Fiscal years ending June 30, 2018 $ 3,904 2019 5,856 2020 5,856 2021 19,519 2022 — Total $ 35,135 |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Jun. 30, 2017 | |
INCOME TAXES | |
INCOME TAXES | 11. Earnings from continuing operations before income taxes and equity by jurisdiction were all in the U.S. except for a loss of $53 and income of $53 in 2017 and 2016, respectively. For the years ended June 30, the components of the provision for income taxes are as follows: For the Years Ended June 30, 2017 2016 2015 Current income tax expense: Federal $ 5,803 $ 10,530 $ 436 State and other 1,584 2,020 96 Benefit of operating loss carryforwards (118) (319) — Total current tax expense 7,269 12,231 532 Deferred tax expense: Federal 4,154 (3,583) 5,636 State and other 300 (340) 426 Total deferred tax expense 4,454 (3,923) 6,062 Income tax expense $ 11,723 $ 8,308 $ 6,594 The difference between the statutory and the effective federal tax rate for the periods below is attributable to the following: For the Years Ended June, 30 2017 2016 2015 Statutory income tax rate 35.00 % 35.00 % 34.00 % State taxes (net of federal income tax benefit and valuation allowance) 2.83 0.41 2.73 Valuation allowance — 0.06 0.30 Tax credits (0.62) (2.82) — Other 0.04 (0.21) (2.95) Uncertain tax positions 1.93 6.06 (0.55) Permanent differences (1.72) 6.36 20.84 Effective income tax rate 37.46 % 44.86 % 54.37 % As of June 30, 2017 and 2016, a summary of the significant components of the Company’s deferred tax assets and liabilities was as follows: 2017 2016 Deferred tax assets: Warranty reserves $ 4,392 $ 4,301 Repurchase agreements 362 280 Other reserves 121 998 Unrecognized tax benefits 859 719 Stock Compensation 336 4,527 State net operating loss 130 130 Foreign net operating loss 104 117 Valuation allowance (234) (247) Total deferred tax assets 6,070 10,825 Deferred tax liabilities: Depreciation (984) (907) Intangible asset basis difference (6,037) (6,406) Other (2) (11) Total deferred tax liabilities (7,023) (7,324) Net deferred tax assets (liabilities) $ (953) $ 3,501 2017 2016 Noncurrent deferred tax assets — 3,501 Noncurrent deferred tax liabilities (953) — Net deferred tax assets (liabilities) $ (953) $ 3,501 The Company has state net operating loss (NOL) carryforwards of $3,013 that expire in varying years ranging from June 30, 2024 to June 30, 2029, and foreign NOL carryforwards of $494 that can be carried forward indefinitely. However, the Company determined that it is more likely than not that the benefit from these state and foreign NOL carryforwards will not be realized. In recognition of this risk, the Company has provided a full valuation allowance on the deferred tax assets relating to these state and foreign NOL carryforwards. Unrecognized Tax Benefits A reconciliation of the beginning and ending amount of unrecognized tax benefits, excluding accrued amounts for interest and penalties, is as follows: 2017 2016 Balance at July 1 $ 2,054 $ 328 Additions based on tax positions related to the current year 413 623 Additions for tax positions of prior years — 1,143 Reductions for tax positions of prior years (25) (40) Balance at June 30 $ 2,442 $ 2,054 Of this total, $910 and $667 as of June 30, 2017 and 2016, respectively represent the amount of unrecognized tax benefits that, if recognized, would favorably affect the effective income tax rate in future periods. The total amount of interest and penalties recorded in the consolidated statements of operations for the years ended June 30, 2017, and 2016 were a benefit of $355 and $57, respectively. The amounts accrued for interest and penalties at June 30, 2017 and 2016 were $490 and $135 respectively. In general, it is the practice and intention of the Company to reinvest the earnings of its non-U.S. subsidiaries in those operations. As of June 30, 2017, the Company has not made a provision for U.S. or additional foreign withholding taxes on investments in foreign subsidiaries that are indefinitely reinvested. Generally, such amounts become subject to U.S. taxation upon the remittance of dividends and under certain other circumstances. The Company and its subsidiaries are subject to U.S. federal income tax, as well as various other income state taxes and foreign income taxes. The Company is no longer subject to examination by taxing authorities for years before June 30, 2011. The Company expects the total amount of unrecognized benefits to increase by approximately $845 in the next twelve months. |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 12 Months Ended |
Jun. 30, 2017 | |
STOCK-BASED COMPENSATION | |
STOCK-BASED COMPENSATION | 12. 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 from 1,518,958 shares to 2,458,633 shares. The Plan provides for the grant of stock options, including incentive stock options, or ISOs, and nonqualified stock options, or NSOs, restricted stock, dividend equivalents, stock payments, restricted stock units, or RSUs, restricted stock awards, or RSAs, deferred stock, deferred stock units, performance awards, stock appreciation rights, or SARs, performance stock units, or PSUs, and cash awards. As of June 30, 2017, there were 1,722,190 shares available for issuance under the 2015 Plan. All outstanding awards granted under the Company’s 2010 Equity Incentive Plan have vested. The Company does not intend to grant additional awards under this plan. In May 2015, the Company granted to certain employees 841,585 shares of restricted stock under the 2015 Plan. For accounting purposes, the vesting conditions were not probable at the time of the grant. Upon completion of the IPO, the vesting conditions had been met at which time the restricted shares had a per share fair value of $15.00, which was the initial public offering price. The award included performance conditions that were based on either an initial public offering or a change in control and until consummation of the event it was not considered probable for accounting purposes. In July 2015, the Company granted 47,146 shares of restricted stock under the 2015 Plan to certain non-employee directors at a per share fair value of $15.66, which was the closing price of the stock on July 24, 2015. For these restricted stock awards, the Company recognized stock-based compensation through the vesting date on a straight-line basis over 181 days from the Company’s initial public offering date. In April 2016, the Company granted 6,140 shares of restricted stock under the 2015 Plan to certain non-employee directors at a per share fair value of $13.41, which was the closing price of the stock on April 2, 2016. For these restricted stock awards, the Company recognized stock-based compensation through the vesting date of June 30, 2016. In August 2016, the Company granted to certain employees 28,391 shares of RSAs under the 2015 Plan at a per share fair value of $11.85, which is the market value of the Company’s common stock on the grant date. The RSAs will vest in three equal annual installments. In addition, the Company granted 10,770 RSAs under the 2015 Plan to certain non-employee directors for their annual equity award at a per share fair value of $11.85. In December 2016, the Company granted 5,572 RSAs under the 2015 Plan to its two new non-employee directors for their pro-rata portion of their annual equity award at a per share fair value of $13.47. In January 2017, the Company granted 1,968 RSAs under the 2015 Plan to its new non-employee directors for the pro-rata portion of their annual equity award at a per share fair value of $14.63. During the fiscal years ended June 30, 2017 and 2016, the Company recognized $321 and $13,444, respectively, in stock-based compensation from RSAs. A summary of restricted stock award activity for the year ended June 30, 2017 is as follows: Number of Restricted Stock Awards Outstanding Weighted Average Grant Date Fair Value Total Non-vested Restricted Stock Awards at beginning of year — $ — Granted 47,131 12.22 Vested (18,740) 18.94 Forfeited (1,974) 19.55 Total Non-vested Restricted Stock Awards at end of year 26,417 $ 12.22 In July 2015, the Company granted 137,786 NSOs to certain employees at an option price equal to the $15.00 per share of the Company’s common stock, which was the initial public offering price, which will vest in 25% increments annually on each of the first four anniversaries of the grant date. During the fiscal year ended June 30, 2016, there were 15,146 stock options forfeited. During the fiscal year ended June 30, 2017 and 2016, the Company recognized $240 and $243, respectively, from these NSOs in stock-based compensation. The Company 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%. The Company determined that it does not have sufficient information on which to base a reasonable and supportable estimate of expected volatility of its share price, because they have limited or no active stock transactions with third parties. Therefore, the Company has selected to use the calculated value method. Under this method, the Company used comparable public companies to estimate expected volatility. The Company uses historical data to estimate option exercise and post-vesting termination behavior. The risk-free interest rate for the expected term of the option is based on the U.S. Treasury yield curve in effect at the time of the grant. There was no stock-based compensation recognized for the fiscal year ended June 30, 2015. A summary of option activity for the year ending June 30, 2017 is as follows: Weighted Weighted Average Average Remaining Aggregate Exercise Contractual Intrinsic Shares Price Term (Yrs.) Value Outstanding at beginning of year 122,640 $ 10.70 9.1 $ 43 Granted — $ — — $ — Exercised (1,578) $ 10.70 8.1 $ — Forfeited or expired (4,734) $ 10.70 8.1 $ — Outstanding at end of year 116,328 $ 10.70 8.1 $ 1,030 Fully vested and exercisable at end of year — $ — — $ — A summary of option activity for the year ending June 30, 2016 is as follows: Weighted Weighted Average Average Remaining Aggregate Exercise Contractual Intrinsic Shares Price Term (Yrs.) Value Outstanding at beginning of year 86,985 $ 4.03 4.7 $ 833 Granted 137,786 $ 15.00 10.0 $ — Exercised (86,985) $ 4.03 — $ — Forfeited or expired (15,146) $ 15.00 — $ — Outstanding at end of year 122,640 $ 10.70 9.1 $ 43 Fully vested and exercisable at end of year — $ — — $ — Pursuant to the terms of the 2015 Plan, the exercise price of options were reduced by $4.30, the amount of the special cash dividend paid on June 10, 2016, from an exercise price of $15.00 to an exercise price of $10.70. The other terms of the options remain unchanged. In August 2016, the Company granted 42,587 performance stock units (“PSUs”) under its 2015 Plan to certain employees at a per share fair value of $11.85, which was the market value of the Company’s common stock on the grant date. The awards will be earned based upon the Company’s obtainment of certain performance criteria over a three-year period. The performance period for the awards are a three-year period commencing July 1, 2016 and ending June 30, 2019. Following the determination of the Company’s achievement with respect to the performance criteria, the amount of shares awarded will be subject to adjustment based upon the application of a total shareholder return (“TSR”) modifier. The probability of achieving the performance criteria is assessed quarterly, and compensation expense is recognized ratably over the performance period in accordance with ASC 718, Compensation—Stock Compensation . The Company recognized $150 in stock-based compensation expense from these PSUs during the fiscal year ended June 30, 2017. A summary of performance stock award activity for the year ending June 30, 2017 is as follows: Number of Performance Stock Units Outstanding Weighted Average Grant Date Fair Value Total Non-vested Performance Stock Units at beginning of year — $ — Granted 42,587 11.85 Vested — — Forfeited (1,974) 11.85 Total Non-vested Performance Stock Units at end of year 40,613 $ 11.85 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Jun. 30, 2017 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | 13. The Company leases equipment and warehouse space under operating lease agreements expiring through 2020. Rental expense was $603, $468, and $262 during the years ended June 30, 2017, 2016, and 2015, respectively. Future minimum rental payments under all non-cancelable operating leases with remaining lease terms in excess of one year at June 30, 2017, are as follows: Fiscal years ending June 30, 2018 $ 484 2019 314 2020 114 2021 87 2022 72 and thereafter 11 Total $ 1,082 Under certain conditions, the Company is obligated to repurchase new inventory repossessed from dealerships by financial institutions that provide credit to boat dealerships. Under the terms of these repurchase agreements, the Company is obligated to repurchase inventory repossessed by these financial institutions for a period ranging from 18 months to 30 months from the date of the original sale of the products to the respective dealers. Repossession of products by the financial institutions normally occurs when a dealer goes out of business or defaults with a lender. The maximum obligation of the Company under such floor plan agreements aggregated approximately $94,046 and $88,810 as of June 30, 2017 and 2016, respectively. No units were repurchased for the fiscal year ended June 30, 2017 or June 30, 2016. The Company recorded a liability of $1,008 and $742 as of June 30, 2017 and 2016, respectively, after giving effect to proceeds anticipated to be received from the resale of those products to alternative dealers, and taking into consideration the credit quality of the dealers. The Company is engaged in an exclusive contract with Ilmor Marine to provide engines for its MasterCraft boats. This contract makes Ilmor Marine the only supplier to MasterCraft for in-board engines and expires June 30, 2019. The Company is obligated to purchase a minimum number of engines during each model year and penalties can be assessed if the Company does not meet the purchase requirements. The Company did not incur any penalties related to engine purchase shortfalls for the years ended June 30, 2017 and 2016. Estimated purchases under the agreement range from approximately $26,000 to $27,000 for each of the years ending June 30, 2018 and 2019. Future minimum purchase commitments under supply and other agreements are as follows: Fiscal years ending June 30, 2018 $ 1,153 2019 1,153 2020 1,500 2021 — 2022 — and thereafter 470 Total $ 4,276 The Company is involved in certain claims and legal actions arising in the ordinary course of business. In the opinion of management, the ultimate disposition of these matters is not expected to have a material adverse effect on the Company’s financial condition or results of operations. On May 2, 2017, the Company reached a resolution of its pending patent litigation with Malibu Boats. The resolution of the litigation included a full release of all claims and counterclaims by the parties. The resolution of the litigation also included a $2.5 million settlement charge, which is included in general and administrative expense in the accompanying consolidated statement of operations, and the Company entering into a license agreement related to certain of Malibu’s patents. |
RELATED PARTY
RELATED PARTY | 12 Months Ended |
Jun. 30, 2017 | |
RELATED PARTY | |
RELATED PARTY | 14. The schedule below identifies balances included in the consolidated statements of operations for the years ended June 30, 2017, 2016 and 2015. 2017 2016 2015 Interest expense (Wayzata Investment Partners) — — 1,639 |
COMMON STOCK
COMMON STOCK | 12 Months Ended |
Jun. 30, 2017 | |
COMMON STOCK | |
COMMON STOCK | 15. As of June 30, 2017, the Company has authorized 100,000,000 shares of common stock, par value of $0.01 per share. Holders of common stock are each entitled to one vote for each share held of record on all matters submitted to a vote of stockholders. Holders are entitled to receive dividends when and if declared by the board of directors. In the event of liquidation, dissolution, or winding up, holders of common stock are entitled to receive a pro rata share of remaining assets available for distribution. Initial Public Offering — On July 22, 2015, the Company completed the initial public offering of its common stock, in which it issued and sold 6,071,429 shares of common stock (exclusive of 910,714 shares of common stock sold by the selling stockholders pursuant to the exercise of an over-allotment option granted to the underwriters in connection with the offering) at a public offering price of $15.00 per share after giving effect to the 11.139-for-1 stock split consummated on July 22, 2015. The aggregate net proceeds received by the Company from the Company’s initial public offering were $81,762 after deducting $6,375 for underwriting discounts and commissions and $2,934 for offering expenses paid by the Company of which $827 were paid during the year ended June 30, 2016. These condensed consolidated financial statements give effect retrospectively to the stock split consummated on July 22, 2015. On May 26, 2016, the Company declared a special dividend of $4.30 per share which was paid on June 10, 2016. Follow-on Offering — In September 2016, the Company completed a follow-on offering of 4,600,000 shares of its common stock held by the Selling Stockholders at a public offering price of $10.25 per share. This included 600,000 shares sold by the Selling Stockholders pursuant to the over-allotment option granted to the underwriters, which was exercised concurrently with the closing of the follow-on offering. The Company received no proceeds from the follow-on offering. The Company paid $254 for offering expenses incurred during September 2016, which are reflected as a reduction to paid-in capital. Secondary Offerings — In December 2016, the Company completed two secondary offerings for a total of 2,995,000 shares of its common stock held by certain entities associated with Wayzata Investment Partners (collectively, the “Selling Stockholders”). The public offering price for the first offering consisting of 1,495,000 shares was $13.35 per share which included 195,000 shares sold by the Selling Stockholders pursuant to the over-allotment option granted to the underwriter, which was exercised concurrently with the closing of the secondary offering. The public offering price for the second offering consisting of 1,500,000 shares was $13.45 per share. The Company received no proceeds from the secondary offerings. The Company incurred $181 for offering expenses during December 2016, which are reflected as a reduction to paid-in capital. Wayzata Investment Partners has now divested of all outstanding shares of the Company’s common stock acquired in connection with the Company’s initial public offering. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 12 Months Ended |
Jun. 30, 2017 | |
EARNINGS PER SHARE | |
EARNINGS PER SHARE | 16. The factors used in the earnings per share computation are as follows: 2017 2016 2015 Net income $ 19,570 $ 10,210 $ 5,534 Weighted average common shares — basic 18,592,885 17,849,319 11,139,000 Dilutive effect of assumed exercises of stock options 4,488 50,775 57,126 Dilutive effect of assumed restricted share awards\units 23,335 268,853 — Dilutive effect of assumed exercises of common stock warrant — 88,060 666,573 Weighted average outstanding shares — diluted 18,620,708 18,257,007 11,862,699 Basic earnings per share $ 1.05 $ 0.57 $ 0.50 Diluted earnings per share $ 1.05 $ 0.56 $ 0.47 For the year ended June 30 2017 and June 30, 2016, stock options for 91,980 and 124,020 shares of common stock, respectively, were not considered in computing diluted earnings per share because they were anti-dilutive. There were no anti-dilutive options or warrant shares excluded from the dilutive shares outstanding for the year ended June 30, 2015. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 12 Months Ended |
Jun. 30, 2017 | |
SEGMENT INFORMATION | |
SEGMENT INFORMATION | 17. The Company designs, manufactures, and markets recreational performance boats and prior to July 1, 2015 had two operating and reportable segments: MasterCraft and Hydra-Sports. The Company’s segments are defined by management’s reporting structure, product brands, and distribution channels. The MasterCraft product brand consists of recreational performance boats primarily used for water skiing, wakeboarding and wake surfing, and general recreational boating. The Company distributes the MasterCraft product brand through its dealer network. The Company manufactured Hydra-Sports recreational fishing boats under a contract manufacturing agreement with Hydra-Sports Custom Boats, LLC, an unrelated third party. All sales related to the Hydra-Sports brand were to the unrelated third party. The Company’s chief operating decision maker (“CODM”) regularly reviews the operating performance of each product brand including measures of performance 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. On June 30, 2012, the Company sold the trade name, tooling, certain machinery, and finished goods of its Hydra-Sports business to Hydra-Sports Custom Boats, LLC, an unaffiliated third party. The Company concurrently entered into an agreement with the purchaser to contract manufacture a specified number of Hydra-Sports models annually at established prices, using certain of the tooling and machinery assets sold to Hydra-Sports Custom Boats, LLC which remained in use by the Company at the Company’s manufacturing facility for the duration of the manufacturing contract. This manufacturing agreement expired on June 30, 2015 and the Company did not renew it. The Company determined that this did not have a major effect on its operations and financial results and decided to early adopt FASB issued ASU 2014-08, Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. Sales outside of North America accounted for 9.1%, 8.6%, and 10.1% of net sales of the MasterCraft segment for the years ended the years ended June 30, 2017, 2016, and 2015, respectively. The Company has no significant assets, concentration of sales to individual dealers or countries outside of North America during the years ended June 30, 2017 and 2016. All sales for the fiscal year ended June 30, 2015 in the Hydra-Sports segment were domestic. 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 expenses including interest to operating segments. The Company does not maintain separate balance sheets for operating segments because this information is not considered meaningful for decision making as the CODM manages the business on a consolidated basis. All corporate costs are allocated to MasterCraft. All amounts in the accompanying Consolidated Statements of Operations for the years ended June 30, 2017 and 2016 pertain exclusively to the MasterCraft segment. For the year ended June 30, 2015, the operating information for the reportable segments is as follows: MasterCraft Hydra-Sports Consolidated Net sales $ 199,907 $ 14,479 $ 214,386 Cost of sales 150,622 12,598 163,220 Operating income 21,695 2,225 23,920 Depreciation and amortization 3,169 109 3,278 |
QUARTERLY FINANCIAL REPORTING (
QUARTERLY FINANCIAL REPORTING (UNAUDITED) | 12 Months Ended |
Jun. 30, 2017 | |
QUARTERLY FINANCIAL REPORTING (UNAUDITED) | |
QUARTERLY FINANCIAL REPORTING (UNAUDITED) | 18. The following table sets forth summary quarterly financial information for the years ended June 30, 2017 and 2016. June 30 April 2 January 1 October 2 2017 2017 2017 2016 Net sales $ 58,325 $ 58,486 $ 51,134 $ 60,689 Gross profit 16,456 14,925 14,286 17,809 Operating income 10,559 4,282 7,039 11,635 Net income $ 6,315 $ 2,241 $ 4,031 $ 6,983 Basic earnings per common share $ 0.34 $ 0.12 $ 0.22 $ 0.38 Diluted earnings per common share $ 0.34 $ 0.12 $ 0.22 $ 0.38 Weighted average shares used for computation of: Basic earnings per common share 18,593,501 18,593,296 18,592,936 18,591,808 Diluted earnings per common share 18,659,246 18,625,904 18,605,078 18,592,603 June 30 March 27 December 27 September 27 2016 2016 2015 2015 Net sales $ 53,386 $ 57,030 $ 55,203 $ 55,981 Gross profit 14,033 15,842 15,365 15,839 Operating income 7,698 7,513 2,780 4,020 Net income $ 4,769 $ 4,894 $ 1,870 $ (1,323) Basic earnings per common share $ 0.27 $ 0.26 $ 0.10 $ (0.08) Diluted earnings per common share $ 0.26 $ 0.26 $ 0.10 $ (0.08) Weighted average shares used for computation of: Basic earnings per common share 17,849,319 18,574,887 17,998,796 16,263,793 Diluted earnings per common share 18,257,007 18,779,557 18,606,884 16,263,793 |
SIGNIFICANT ACCOUNTING POLICI26
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Jun. 30, 2017 | |
SIGNIFICANT ACCOUNTING POLICIES | |
Principles of Consolidation | Principles of Consolidation — The consolidated financial statements include the accounts of MCBC and its wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. |
Use of Estimates | Use of Estimates — The preparation of the Company’s consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, sales, and expenses and related disclosures. The Company bases these estimates on historical results and various other assumptions believed to be reasonable. The Company’s most significant financial statement estimates include allowances for bad debts, warranty liability, inventory allowance for obsolescence, self-insurance liability, fair value of stock options and warrant, inventory repurchase contingent obligation, uncertain tax positions, impairment of long-lived assets and intangibles subject to amortization, impairment of goodwill and indefinite-lived intangibles, and potential litigation claims and settlements. Actual results could differ from those estimates. |
Revenue Recognition | Revenue Recognition — The Company’s revenue is derived primarily from the sale of boats, marine parts, and accessories. Revenue is recognized in accordance with the terms of the sale, primarily upon shipment to customers, once the sales price is fixed or determinable and collectability is reasonably assured. The Company offers discounts and sales incentives that include retail promotions, rebates, and floor plan reimbursement costs that are recorded as reductions of revenues in net sales in the consolidated statements of operations. The estimated liability and reduction in revenue for sales incentives is recorded at the later of when the program has been communicated to the customer or at the time of sale. Dealers generally have no rights to return unsold boats. Occasionally, the Company may accept returns in limited circumstances and at the Company’s discretion under its warranty policy (Note 8). The Company may be obligated, in the event of default by a dealer, to accept returns of unsold boats under its repurchase commitment to floor financing providers, who are able to obtain such boats through foreclosure. The Company accrues estimated losses when a loss, due to the default of one of its dealers, is determined to be probable and the amount of the loss is reasonably estimable. Dealer Incentives The Company provides for various structured dealer rebate and sales promotions incentives, which are recognized as a reduction in net sales, at the time of sale to the dealer. Dealer rebate and sales promotions incentives are based on actual wholesale rebate and applicable sales promotion expenses at the time of sale to the dealer. Examples of such programs include seasonal discounts, volume commitment rebates and other allowances. Dealer rebate and sales promotion incentives recorded during the years ended June 30, 2017, 2016, and 2015, were $5,660, $6,701 and $5,152, respectively. Rebates may apply to boats already in dealer inventory. These “retail rebates” on boats in the dealer’s inventory are recorded when the rebate is communicated to the dealer. Retail rebates are estimated based on current programs and historical achievement and/or usage rates. Actual results may differ from these estimates if market conditions dictate the need to enhance or reduce sales promotion and incentive programs or if dealer achievement or other items vary from historical trends. Retail rebates recorded during the years ended June 30, 2017, 2016, and 2015, were $5,484, $3,628 and $2,987, respectively. Accrued rebates are included in accrued expenses and other current liabilities in the accompanying consolidated balance sheets. Floor Plan Reimbursement Costs The Company participates in various programs whereby it agrees to reimburse its dealers for certain floor plan interest costs incurred by such dealers for limited periods of time, ranging up to nine months. Such costs are included as a reduction in net sales in the consolidated statements of operations and totaled $3,705, $3,472 and $2,459 for the years ended June 30, 2017, 2016, and 2015, respectively. |
Shipping and Handling Costs | Shipping and Handling Costs — The Company includes shipping and handling costs billed to customers in net sales in the consolidated statements of operations. The Company includes costs incurred to transport product to customers and internal handling costs, which relate to activities to prepare goods for shipment, in cost of sales. For the years ended June 30, 2017, 2016, and 2015, shipping and handling costs billed to customers totaled $4,124, $4,043 and $4,050, respectively, and shipping and handling costs included in cost of sales totaled $3,584, $3,952 and $4,461, respectively. |
Accounts Receivable | Accounts Receivable — Accounts receivable represents amounts billed to customers under credit terms customary in its industry. The Company normally does not charge interest on its accounts receivable. The Company determines its allowance for doubtful accounts by considering a number of factors, including the length of time trade accounts receivable are past due, the Company’s previous loss history, the customer’s current ability to pay its obligation to the Company, and the condition of the general economy and the industry as a whole. The Company writes-off accounts receivable when they become uncollectible, and payments subsequently received on such receivables are credited to bad debt recovery. |
Cash and Cash Equivalents | Cash and Cash Equivalents — The Company considers all highly-liquid investments with an original maturity of three months or less to be cash and cash equivalents. The Company’s cash deposits are in financial institutions located in Tennessee and Ohio and may at times exceed federally insured amounts. The Company had no cash equivalents at June 30, 2017 and 2016. |
Concentrations of Credit and Business Risk | Concentrations of Credit and Business Risk — Financial instruments that potentially subject the Company to concentrations of credit risk primarily consist of trade receivables. Credit risk on trade receivables is mitigated as a result of the Company’s use of trade letters of credit, dealer floor plan financing arrangements, and the geographically diversified nature of the Company’s customer base. The Company is dependent on third-party equipment manufacturers, distributors, and dealers for certain parts and materials utilized in the manufacturing process. In 2017, 2016, and 2015 the Company purchased all engines for its MasterCraft boats under a supply agreement with one vendor. Total purchases to this vendor were $31,075, $31,232 and $29,027 for 2017, 2016, and 2015, respectively. Total accounts payable to this vendor were $2,291 and $2,309 as of June 30, 2017 and 2016, respectively. The Company is dependent on the ability of its suppliers to provide products on a timely basis and on favorable pricing terms. The loss of certain principal suppliers or a significant reduction in product availability from principal suppliers could have a material adverse effect on the Company. Business risk insurance is in place to mitigate the business risk associated with sole suppliers for sudden disruptions such as those caused by natural disasters. |
Inventories | Inventories — Inventories are valued at the lower of cost or market and are shown net of an inventory allowance in the balance sheet. Inventory cost includes material, labor, and manufacturing overhead and is determined based on the first-in, first-out (FIFO) method. Provisions are made as necessary to reduce inventory amounts to their net realizable value or to provide for obsolete products. |
Property, Plant, and Equipment | Property, Plant, and Equipment — Property, plant, and equipment are recorded at historical cost less accumulated depreciation, and depreciated on a straight-line basis over the estimated useful lives. Repairs and maintenance are charged to operations as incurred, and expenditures for additions and improvements that increase the asset’s useful life are capitalized. Ranges of asset lives used for depreciation purposes are: Buildings and improvements 7 - 40 years Machinery and equipment 3 - 7 years Furniture and fixtures 3 - 5 years |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets — The Company does not amortize goodwill and other purchased intangible assets with indefinite lives. All of the Company’s goodwill and intangible assets relate to the MasterCraft reporting unit. The Company’s primary intangible assets with finite lives consist of a dealer network, developed technologies, software, and order backlog, and are carried at their estimated fair values at the time of acquisition, less accumulated amortization. Amortization is recognized on a straight-line basis over the estimated useful lives of the respective assets (see Note 7). Intangible assets that are subject to amortization are evaluated for impairment using a process similar to that used to evaluate long-lived assets described below. Impairment of Goodwill and Other Intangible Assets — The Company performed a qualitative assessment of goodwill and other indefinite-lived intangible assets for the years ended June 30, 2017, 2016 and 2015 to determine if it was more likely than not that the fair value of a reporting unit was less than its carrying amount. Based on the Company’s qualitative assessments it was determined that there was no impairment charge related to its intangible assets during the years ended June 30, 2017, 2016, and 2015. These assets are reviewed for impairment at least annually and whenever events or changes in circumstances indicate that the carrying value may not be recoverable. |
Impairment of Long-Lived Assets Other Than Indefinite-Lived Assets | Impairment of Long-Lived Assets Other Than Indefinite-Lived Assets — The Company assesses the potential for impairment of its long- lived assets if facts and circumstances, such as declines in sales, earnings, or cash flows or adverse changes in the business climate, suggest that they may be impaired. The Company performs its review by comparing the book value of the assets to the estimated future undiscounted cash flows associated with the assets. If any impairment in the carrying value of its long-lived assets is indicated, the assets would be adjusted to an estimate of fair value. The Company did not evaluate its long-lived assets for impairment as of June 30, 2017 and 2016 as no triggering event occurred. |
Income Taxes | Income Taxes — Income tax expense is the total of the current year income tax due or refundable and the change in deferred tax assets and liabilities. The Company records its global tax provision based on the respective tax rules and regulations for the jurisdictions in which it operates. Deferred tax assets and liabilities are the expected future tax amounts for the temporary differences between carrying amounts and tax bases of assets and liabilities, computed using enacted tax rates. Valuation allowances are recorded to reduce deferred tax assets when it is more likely than not that a tax benefit will not be realized. Significant judgment is required in evaluating the need for and magnitude of appropriate valuation allowances against deferred tax assets. The realization of these assets is dependent on generating future taxable income. A tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. The Company recognizes interest and/or penalties related to income tax matters in income tax expense. In determining the amount of current and deferred tax the Company takes into account the impact of uncertain tax positions and whether additional taxes, interest and penalties may be due. The Company believes that its accruals for tax liabilities are adequate for all open tax years based on its assessment of many factors, including interpretations of tax law and prior experience. This assessment relies on estimates and assumptions and may involve a series of judgments about future events. New information may become available that causes the Company to change its judgment regarding the adequacy of existing tax liabilities; such changes to tax liabilities will have an impact on tax expense in the period that such a determination is made. The income tax effects of the differences we identify are classified as long-term deferred tax assets and liabilities in our Consolidated Balance Sheets as of June 30, 2017 and June 30, 2016, following the adoption of ASU 2015-17, Income Taxes during the year ended June 30, 2016. |
Product Warranties | Product Warranties — The Company offers warranties on the sale of certain products for a period of up to five years and records an accrual for estimated future claims. Such accruals are based upon historical experience and management’s estimates of the level of future claims, and are subject to adjustment as actual claims are determined or as changes in the obligations become reasonably estimable. Such costs are included in cost of sales in the consolidated statements of operations. In fiscal 2014, the Company entered into a contract with an insurance company to reimburse warranty claims paid to independent boat dealerships for years two through five of the warranty period. During fiscal 2016, the Company terminated this insurance contract. |
Research and Development | Research and Development — Research and development expenditures are expensed as incurred. The amount charged against the years ended June 30, 2017, 2016, and 2015 was $3,550, $3,508 and $3,027, respectively, and is included in operating expenses in the consolidated statements of operations. |
Self-Insurance | Self-Insurance — The Company is self-insured for certain losses relating to product liability claims and employee medical claims. The Company has purchased stop-loss coverage in order to limit its exposure to any significant levels under these plans. Losses are accrued based upon the Company’s estimates of the aggregate liability for self-insured claims incurred using certain actuarial assumptions followed in the insurance industry and the Company’s historical experience. |
Deferred Financing Costs | Deferred Financing Costs — Certain costs incurred to obtain financing are capitalized and amortized over the term of the related debt using the effective interest method. For the year ended June 30, 2017 the Company did not incur any deferred financing costs. For the years ended June 30, 2016 and 2015, the Company incurred deferred financing costs of $300 and $453, respectively. For the years ended June 30, 2017, 2016, and 2015 the Company recorded amortization of $361, $85 and $42, respectively. |
Stock-Based Compensation | Stock-Based Compensation — Compensation cost is recognized for stock options issued to employees, based on the fair value of these awards at the date of grant. The Black-Scholes model is utilized to estimate the fair value of stock options. Compensation cost is recognized over the required service period, generally defined as the vesting period. For awards with graded vesting, compensation cost is recognized on a straight-line basis over the requisite service period for the entire award. |
Common Stock Warrant | Common Stock Warrant — The Company accounted for its freestanding common stock warrant as a liability until settlement. As of June 3, 2016, all of the common stock warrants were exercised or exchanged. Changes in the estimated fair value of the warrant are separately stated in the consolidated statements of operations. |
Advertising | Advertising — Advertising costs are expensed as incurred. The amount charged against operations during the years ended June 30, 2017, 2016, and 2015, was $5,201, $5,725 and $5,521, respectively, and is included in selling and marketing expenses in the consolidated statements of operations. |
Fair Value Measurements | Fair Value Measurements — The Company measures its “financial” assets and liabilities and certain “non-financial” assets and liabilities at fair value and utilizes the established framework for measuring fair value and disclosing information about fair value measurements. Fair value is the price received to transfer an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Measuring fair value involves a hierarchy of valuation inputs used to measure fair value. This hierarchy prioritizes the inputs into three broad levels as follows: Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities; Level 2 inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly; and, Level 3 inputs are unobservable inputs in which little or no market data exists, therefore requiring a company to develop its own valuation assumptions. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments — The carrying amounts of the Company’s financial instruments, consisting of cash and cash equivalents, accounts receivable, accounts payable and other liabilities, approximate their estimated fair values due to the relative short-term nature of the amounts. The carrying amount of debt approximates fair value due to variable interest rates at customary terms and rates the Company could obtain in current financing. |
Repurchase Commitments | Repurchase Commitments — In connection with its dealers’ wholesale floor-plan financing of boats, the Company has entered into repurchase agreements with various lending institutions. The repurchase commitment is on an individual unit basis with a term from the date it is financed by the lending institution through the payment date by the dealer, generally not exceeding two and a half years. The Company accrues estimated losses for obligations to repurchase inventory repossessed from dealerships by financial institutions when it is probable that a loss has been incurred and the amount of loss is reasonably estimable. The Company has applied these provisions to its floor plan repurchase agreements as disclosed in Notes 8 and 13. |
Earnings Per Common Share | Earnings Per Common Share — Basic earnings per common share reflects reported earnings divided by the weighted average number of common shares outstanding. Diluted earnings per common share include the effect of dilutive stock options and warrant and the respective tax benefits, unless inclusion would not be dilutive. |
Operating Leases | Operating Leases — The Company leases warehouse space and equipment under operating lease arrangements. Lease agreements may include rent holidays, rent escalation clauses, and tenant improvement allowances. The Company recognizes scheduled rent increases on a straight-line basis over the lease term beginning with the date the Company takes possession of the leased space. |
Segment Information | Segment Information — Operating segments are identified as components of an enterprise about which discrete financial information is available for evaluation by the chief operating decision maker in making decisions on how to allocate resources and assess performance. The Company views its operations in two operating segments based on product brand consisting of the MasterCraft brand and the Hydra-Sports brand. Hydra-Sports production was terminated on June 30, 2015. |
New Accounting Pronouncements Issued But Not Yet Adopted | New Accounting Pronouncements Issued But Not Yet Adopted In May 2017, the Financial Accounting Standards Board (the “FASB”) issued ASU 2017-09 , Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting. This guidance provides clarity and reduces complexity when applying the guidance in Topic 718, Compensation—Stock Compensation to a change to the term or condition of a share-based payment. ASU 2017-09 is effective for annual reporting periods, and interim periods therein, beginning after December 15, 2017. The Company is currently evaluating the effect that the adoption of this new guidance is expected to have on our financial position or results of operations and related disclosures. 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 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. The Company is currently evaluating the effect that the adoption of this new guidance is expected to have on our 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 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 fiscal year beginning July 1, 2018. The Company is continuing to assess the potential effects of these ASUs 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. 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 of adoption of these ASUs have not yet been quantified. Additionally, the Company’s expectations may change as its implementation progresses. In August 2016, the FASB issued ASU 2016-15, Classification of Certain Cash Receipts and Cash Payments . ASU 2016-15 addresses how certain cash receipts and cash payments are presented and classified in the statement of cash flows under Topic 230, Statement of Cash Flow , and other Topics. ASU 2016-15 is effective for annual reporting periods, and interim periods therein, beginning after December 15, 2017. The Company does not expect the adoption of this guidance to have a material impact on its consolidated financial statements. 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 permitted. The Company is currently evaluating the impact of this new guidance , but does not expect it will have a material impact on its consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) . This guidance establishes a right-of-use (“ROU”) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. The new standard is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. A modified retrospective transition approach is required for lessees for capital 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. The Company is currently evaluating the impact this new guidance is expected to have on its financial position or results of operations and related disclosures. In July 2015, the FASB issued Accounting Standards Update (“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 is currently evaluating the impact of this new guidance , but does not expect it will have a material impact on its consolidated financial statements. 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 . |
SIGNIFICANT ACCOUNTING POLICI27
SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Jun. 30, 2017 | |
SIGNIFICANT ACCOUNTING POLICIES | |
Schedule of ranges of asset lives used for depreciation purposes | Buildings and improvements 7 - 40 years Machinery and equipment 3 - 7 years Furniture and fixtures 3 - 5 years |
INVENTORIES (Tables)
INVENTORIES (Tables) | 12 Months Ended |
Jun. 30, 2017 | |
INVENTORIES | |
Schedule of inventories | 2017 2016 Raw materials and supplies $ 7,164 $ 5,420 Work in process 1,772 2,196 Finished goods 3,427 5,984 Obsolescence reserve (687) (332) Total inventories $ 11,676 $ 13,268 |
Schedule of activity in the obsolescence reserve | 2017 2016 Beginning balance $ (332) $ (480) Charged to costs and expenses (399) (359) Disposals 44 507 Ending balance $ (687) $ (332) |
PREPAID EXPENSES AND OTHER CU29
PREPAID EXPENSES AND OTHER CURRENT ASSETS (Tables) | 12 Months Ended |
Jun. 30, 2017 | |
PREPAID EXPENSES AND OTHER CURRENT ASSETS | |
Schedule of prepaid expenses and other current assets | 2017 2016 Prepaid photo shoot $ 497 $ 650 Insurance 765 591 Trade show deposits 73 133 Other 1,103 406 Total prepaid expenses and other current assets $ 2,438 $ 1,780 |
PROPERTY, PLANT, AND EQUIPMENT
PROPERTY, PLANT, AND EQUIPMENT (Tables) | 12 Months Ended |
Jun. 30, 2017 | |
PROPERTY, PLANT, AND EQUIPMENT | |
Schedule of property, plant, and equipment - net | 2017 2016 Land and improvements $ 1,125 $ 1,125 Buildings and improvements 8,208 8,371 Machinery and equipment 16,189 17,666 Furniture and fixtures 847 1,028 Construction in progress 3,465 1,930 Total property, plant, and equipment 29,834 30,121 Less accumulated depreciation (15,007) (16,295) Property, plant, and equipment — net $ 14,827 $ 13,826 |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Jun. 30, 2017 | |
INTANGIBLE ASSETS | |
Schedule of intangible assets other than goodwill | 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 2016 Gross Net Carrying Accumulated Carrying Amount Amortization Amount Dealer network $ 1,590 $ (840) $ 750 Total amortizable intangible assets 1,590 (840) 750 Trade names 16,000 — 16,000 Total intangible assets $ 17,590 $ (840) $ 16,750 |
Schedule of estimated amortization expense | Fiscal years ending June 30, 2018 $ 107 2019 107 2020 107 2021 107 2022 107 and thereafter 108 Total $ 643 |
ACCRUED EXPENSES AND OTHER CU32
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Tables) | 12 Months Ended |
Jun. 30, 2017 | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | |
Schedule of accrued expenses and other current liabilities | 2017 2016 Warranty $ 12,237 $ 11,392 Self-insurance 763 809 Compensation and related accruals 1,691 1,706 Inventory repurchase contingent obligation 1,008 742 Interest 1,008 1,178 Dealer incentives 2,755 4,336 Other 1,948 2,113 Total accrued expenses and other current liabilities $ 21,410 $ 22,276 |
Schedule of roll forward of the accrued warranty liability | 2017 2016 Beginning balance $ 11,392 $ 10,228 Provisions 4,723 5,461 Payments made (3,052) (4,297) Adjustments to preexisting warranties (825) — Ending balance $ 12,237 $ 11,392 |
Schedule of activity in accrued dealer incentives | 2017 2016 Beginning balance $ 4,336 $ 3,568 Provisions 11,160 10,759 Payments made (12,741) (9,991) Ending balance $ 2,755 $ 4,336 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 12 Months Ended |
Jun. 30, 2017 | |
FAIR VALUE MEASUREMENTS | |
Assets measured at fair value on a recurring basis | 2017 Fair Value Measurements Using Level 1 Level 2 Level 3 Asset — interest rate cap $ — $ 90 $ — |
Reconciliation from the beginning to the ending balance for the Company's common stock warrant liability measured at fair value on a recurring basis using Level 3 inputs | 2016 Beginning balance 9,147 Issuance of shares for common stock warrant (12,572) Change in common stock warrant fair value 3,425 Ending balance — |
LONG-TERM DEBT (Tables)
LONG-TERM DEBT (Tables) | 12 Months Ended |
Jun. 30, 2017 | |
LONG-TERM DEBT | |
Schedule of long-term debt outstanding | 2017 2016 Revolving credit facility $ — $ 3,126 Senior secured term loan 35,135 50,000 Debt issuance costs on term loan (658) (899) Total debt 34,477 52,227 Less current portion of long-term debt 3,904 8,126 Less current portion of debt issuance costs on term loan (217) (241) Long-term debt — less current portion $ 30,790 $ 44,342 |
Schedule of maturities of long-term debt | Fiscal years ending June 30, 2018 $ 3,904 2019 5,856 2020 5,856 2021 19,519 2022 — Total $ 35,135 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Jun. 30, 2017 | |
INCOME TAXES | |
Schedule of the components of the provision for income taxes | For the Years Ended June 30, 2017 2016 2015 Current income tax expense: Federal $ 5,803 $ 10,530 $ 436 State and other 1,584 2,020 96 Benefit of operating loss carryforwards (118) (319) — Total current tax expense 7,269 12,231 532 Deferred tax expense: Federal 4,154 (3,583) 5,636 State and other 300 (340) 426 Total deferred tax expense 4,454 (3,923) 6,062 Income tax expense $ 11,723 $ 8,308 $ 6,594 |
Schedule of difference between the statutory and the effective federal tax rate | For the Years Ended June, 30 2017 2016 2015 Statutory income tax rate 35.00 % 35.00 % 34.00 % State taxes (net of federal income tax benefit and valuation allowance) 2.83 0.41 2.73 Valuation allowance — 0.06 0.30 Tax credits (0.62) (2.82) — Other 0.04 (0.21) (2.95) Uncertain tax positions 1.93 6.06 (0.55) Permanent differences (1.72) 6.36 20.84 Effective income tax rate 37.46 % 44.86 % 54.37 % |
Summary of the significant components of the Company’s deferred tax assets and liabilities | 2017 2016 Deferred tax assets: Warranty reserves $ 4,392 $ 4,301 Repurchase agreements 362 280 Other reserves 121 998 Unrecognized tax benefits 859 719 Stock Compensation 336 4,527 State net operating loss 130 130 Foreign net operating loss 104 117 Valuation allowance (234) (247) Total deferred tax assets 6,070 10,825 Deferred tax liabilities: Depreciation (984) (907) Intangible asset basis difference (6,037) (6,406) Other (2) (11) Total deferred tax liabilities (7,023) (7,324) Net deferred tax assets (liabilities) $ (953) $ 3,501 |
Schedule of net deferred tax assets and liabilities as classified in the consolidated balance sheets | 2017 2016 Noncurrent deferred tax assets — 3,501 Noncurrent deferred tax liabilities (953) — Net deferred tax assets (liabilities) $ (953) $ 3,501 |
Schedule of reconciliation of the beginning and ending amount of unrecognized tax benefits excluding accrued amounts for interest and penalties | 2017 2016 Balance at July 1 $ 2,054 $ 328 Additions based on tax positions related to the current year 413 623 Additions for tax positions of prior years — 1,143 Reductions for tax positions of prior years (25) (40) Balance at June 30 $ 2,442 $ 2,054 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 12 Months Ended |
Jun. 30, 2017 | |
STOCK-BASED COMPENSATION | |
Schedule of of restricted stock award activity | A summary of restricted stock award activity for the year ended June 30, 2017 is as follows: Number of Restricted Stock Awards Outstanding Weighted Average Grant Date Fair Value Total Non-vested Restricted Stock Awards at beginning of year — $ — Granted 47,131 12.22 Vested (18,740) 18.94 Forfeited (1,974) 19.55 Total Non-vested Restricted Stock Awards at end of year 26,417 $ 12.22 |
Schedule of stock option activity | A summary of option activity for the year ending June 30, 2017 is as follows: Weighted Weighted Average Average Remaining Aggregate Exercise Contractual Intrinsic Shares Price Term (Yrs.) Value Outstanding at beginning of year 122,640 $ 10.70 9.1 $ 43 Granted — $ — — $ — Exercised (1,578) $ 10.70 8.1 $ — Forfeited or expired (4,734) $ 10.70 8.1 $ — Outstanding at end of year 116,328 $ 10.70 8.1 $ 1,030 Fully vested and exercisable at end of year — $ — — $ — A summary of option activity for the year ending June 30, 2016 is as follows: Weighted Weighted Average Average Remaining Aggregate Exercise Contractual Intrinsic Shares Price Term (Yrs.) Value Outstanding at beginning of year 86,985 $ 4.03 4.7 $ 833 Granted 137,786 $ 15.00 10.0 $ — Exercised (86,985) $ 4.03 — $ — Forfeited or expired (15,146) $ 15.00 — $ — Outstanding at end of year 122,640 $ 10.70 9.1 $ 43 Fully vested and exercisable at end of year — $ — — $ — |
Schedule of performance stock award activity | A summary of performance stock award activity for the year ending June 30, 2017 is as follows: Number of Performance Stock Units Outstanding Weighted Average Grant Date Fair Value Total Non-vested Performance Stock Units at beginning of year — $ — Granted 42,587 11.85 Vested — — Forfeited (1,974) 11.85 Total Non-vested Performance Stock Units at end of year 40,613 $ 11.85 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Jun. 30, 2017 | |
COMMITMENTS AND CONTINGENCIES | |
Future minimum rental payments under all non-cancelable operating leases with remaining terms in excess of one year | Fiscal years ending June 30, 2018 $ 484 2019 314 2020 114 2021 87 2022 72 and thereafter 11 Total $ 1,082 |
Future minimum purchase commitments under supply and other agreements | Fiscal years ending June 30, 2018 $ 1,153 2019 1,153 2020 1,500 2021 — 2022 — and thereafter 470 Total $ 4,276 |
RELATED PARTY (Tables)
RELATED PARTY (Tables) | 12 Months Ended |
Jun. 30, 2017 | |
RELATED PARTY | |
Schedule of related party balances included in consolidated statements of operations | 2017 2016 2015 Interest expense (Wayzata Investment Partners) — — 1,639 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 12 Months Ended |
Jun. 30, 2017 | |
EARNINGS PER SHARE | |
Factors used in the earnings per share computation | 2017 2016 2015 Net income $ 19,570 $ 10,210 $ 5,534 Weighted average common shares — basic 18,592,885 17,849,319 11,139,000 Dilutive effect of assumed exercises of stock options 4,488 50,775 57,126 Dilutive effect of assumed restricted share awards\units 23,335 268,853 — Dilutive effect of assumed exercises of common stock warrant — 88,060 666,573 Weighted average outstanding shares — diluted 18,620,708 18,257,007 11,862,699 Basic earnings per share $ 1.05 $ 0.57 $ 0.50 Diluted earnings per share $ 1.05 $ 0.56 $ 0.47 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 12 Months Ended |
Jun. 30, 2017 | |
SEGMENT INFORMATION | |
Schedule of operating information for reportable segments | For the year ended June 30, 2015, the operating information for the reportable segments is as follows: MasterCraft Hydra-Sports Consolidated Net sales $ 199,907 $ 14,479 $ 214,386 Cost of sales 150,622 12,598 163,220 Operating income 21,695 2,225 23,920 Depreciation and amortization 3,169 109 3,278 |
QUARTERLY FINANCIAL REPORTING41
QUARTERLY FINANCIAL REPORTING (UNAUDITED) (Tables) | 12 Months Ended |
Jun. 30, 2017 | |
QUARTERLY FINANCIAL REPORTING (UNAUDITED) | |
Schedule of quarterly financial information | June 30 April 2 January 1 October 2 2017 2017 2017 2016 Net sales $ 58,325 $ 58,486 $ 51,134 $ 60,689 Gross profit 16,456 14,925 14,286 17,809 Operating income 10,559 4,282 7,039 11,635 Net income $ 6,315 $ 2,241 $ 4,031 $ 6,983 Basic earnings per common share $ 0.34 $ 0.12 $ 0.22 $ 0.38 Diluted earnings per common share $ 0.34 $ 0.12 $ 0.22 $ 0.38 Weighted average shares used for computation of: Basic earnings per common share 18,593,501 18,593,296 18,592,936 18,591,808 Diluted earnings per common share 18,659,246 18,625,904 18,605,078 18,592,603 June 30 March 27 December 27 September 27 2016 2016 2015 2015 Net sales $ 53,386 $ 57,030 $ 55,203 $ 55,981 Gross profit 14,033 15,842 15,365 15,839 Operating income 7,698 7,513 2,780 4,020 Net income $ 4,769 $ 4,894 $ 1,870 $ (1,323) Basic earnings per common share $ 0.27 $ 0.26 $ 0.10 $ (0.08) Diluted earnings per common share $ 0.26 $ 0.26 $ 0.10 $ (0.08) Weighted average shares used for computation of: Basic earnings per common share 17,849,319 18,574,887 17,998,796 16,263,793 Diluted earnings per common share 18,257,007 18,779,557 18,606,884 16,263,793 |
SIGNIFICANT ACCOUNTING POLICI42
SIGNIFICANT ACCOUNTING POLICIES - Revenue Recognition and Shipping and Handling Costs (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2015 | |
Revenue Recognition | |||
Dealer rebates and sales promotion incentives | $ 5,660 | $ 6,701 | $ 5,152 |
Retail rebates | 5,484 | 3,628 | 2,987 |
Floor plan reimbursement costs | 3,705 | 3,472 | 2,459 |
Shipping and Handling Costs | |||
Shipping and handling costs billed to customers | 4,124 | 4,043 | 4,050 |
Shipping and handling costs included in cost of sales | 3,584 | 3,952 | $ 4,461 |
Cash and Cash Equivalents | |||
Cash equivalents | $ 0 | $ 0 | |
Maximum | |||
Revenue Recognition | |||
Term of reimbursement program | 9 months |
SIGNIFICANT ACCOUNTING POLICI43
SIGNIFICANT ACCOUNTING POLICIES - Concentrations of Credit and Business Risk (Details) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2017USD ($)item | Jun. 30, 2016USD ($)item | Jun. 30, 2015USD ($)item | |
Concentrations of Credit and Business Risk | |||
Accounts payable | $ 11,008 | $ 13,112 | |
Supplier Concentration Risk | Cost of Goods | Engine Supplier | |||
Concentrations of Credit and Business Risk | |||
Number of vendors | item | 1 | 1 | 1 |
Purchases during period | $ 31,075 | $ 31,232 | $ 29,027 |
Accounts payable | $ 2,291 | $ 2,309 |
SIGNIFICANT ACCOUNTING POLICI44
SIGNIFICANT ACCOUNTING POLICIES - Property, Plant, and Equipment (Details) | 12 Months Ended |
Jun. 30, 2017 | |
Buildings and improvements | Minimum | |
Property, plant, and equipment | |
Asset lives | 7 years |
Buildings and improvements | Maximum | |
Property, plant, and equipment | |
Asset lives | 40 years |
Machinery and equipment | Minimum | |
Property, plant, and equipment | |
Asset lives | 3 years |
Machinery and equipment | Maximum | |
Property, plant, and equipment | |
Asset lives | 7 years |
Furniture and fixtures | Minimum | |
Property, plant, and equipment | |
Asset lives | 3 years |
Furniture and fixtures | Maximum | |
Property, plant, and equipment | |
Asset lives | 5 years |
SIGNIFICANT ACCOUNTING POLICI45
SIGNIFICANT ACCOUNTING POLICIES - Warranties, Research and Development, Deferred Financing Costs, and Other (Details) $ in Thousands | 12 Months Ended | |||
Jun. 30, 2017USD ($)segment | Jun. 30, 2016USD ($) | Jun. 30, 2015USD ($) | Jun. 30, 2014item | |
Goodwill and Other Intangible Assets | ||||
Impairment of indefinite-lived intangible assets | $ 0 | $ 0 | $ 0 | |
Product Warranties | ||||
Year within the product warranty term in which insurance coverage begins | item | 2 | |||
Year within the product warranty term in which insurance coverage ends | item | 5 | |||
Research and Development | ||||
Research and development expenditures | 3,550 | 3,508 | 3,027 | |
Deferred Financing Costs | ||||
Deferred financing costs incurred | 300 | 453 | ||
Amortization of deferred financing costs | 361 | 85 | 42 | |
Advertising | ||||
Advertising costs | $ 5,201 | $ 5,725 | $ 5,521 | |
Repurchase Commitments | ||||
Maximum term of repurchase commitments | 2 years 6 months | |||
Segment Information | ||||
Number of reportable segments | segment | 2 | |||
Maximum | ||||
Product Warranties | ||||
Product warranty term | 5 years |
INVENTORIES - Components (Detai
INVENTORIES - Components (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2015 |
INVENTORIES | |||
Raw materials and supplies | $ 7,164 | $ 5,420 | |
Work in process | 1,772 | 2,196 | |
Finished goods | 3,427 | 5,984 | |
Obsolescence reserve | (687) | (332) | $ (480) |
Total inventories | $ 11,676 | $ 13,268 |
INVENTORIES - Obsolescence Rese
INVENTORIES - Obsolescence Reserve (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Activity in the obsolescence reserve | ||
Beginning balance | $ (332) | $ (480) |
Charged to costs and expenses | (399) | (359) |
Disposals | 44 | 507 |
Ending balance | $ (687) | $ (332) |
PREPAID EXPENSES AND OTHER CU48
PREPAID EXPENSES AND OTHER CURRENT ASSETS - Components (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Jun. 30, 2016 |
PREPAID EXPENSES AND OTHER CURRENT ASSETS | ||
Prepaid photo shoot | $ 497 | $ 650 |
Insurance | 765 | 591 |
Trade show deposits | 73 | 133 |
Other | 1,103 | 406 |
Total prepaid expenses and other current assets | $ 2,438 | $ 1,780 |
PROPERTY, PLANT, AND EQUIPMEN49
PROPERTY, PLANT, AND EQUIPMENT - Components (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Jun. 30, 2016 |
Property, plant, and equipment-net | ||
Total property, plant, and equipment | $ 29,834 | $ 30,121 |
Less accumulated depreciation | (15,007) | (16,295) |
Property, plant, and equipment — net | 14,827 | 13,826 |
Land and improvements | ||
Property, plant, and equipment-net | ||
Total property, plant, and equipment | 1,125 | 1,125 |
Buildings and improvements | ||
Property, plant, and equipment-net | ||
Total property, plant, and equipment | 8,208 | 8,371 |
Machinery and equipment | ||
Property, plant, and equipment-net | ||
Total property, plant, and equipment | 16,189 | 17,666 |
Furniture and fixtures | ||
Property, plant, and equipment-net | ||
Total property, plant, and equipment | 847 | 1,028 |
Construction in progress | ||
Property, plant, and equipment-net | ||
Total property, plant, and equipment | $ 3,465 | $ 1,930 |
PROPERTY, PLANT, AND EQUIPMEN50
PROPERTY, PLANT, AND EQUIPMENT - Depreciation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2015 | |
PROPERTY, PLANT, AND EQUIPMENT | |||
Depreciation | $ 3,124 | $ 3,223 | $ 3,057 |
INTANGIBLE ASSETS - Components
INTANGIBLE ASSETS - Components (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Jun. 30, 2016 |
Amortizable intangible assets | ||
Gross Carrying Amount | $ 1,590 | $ 1,590 |
Accumulated Amortization | (947) | (840) |
Net Carrying Amount | 643 | 750 |
Indefinite-lived intangible assets | ||
Trade names | 16,000 | 16,000 |
Total intangible assets | ||
Gross Carrying Amount | 17,590 | 17,590 |
Net Carrying Amount | 16,643 | 16,750 |
Dealer network | ||
Amortizable intangible assets | ||
Gross Carrying Amount | 1,590 | 1,590 |
Accumulated Amortization | (947) | (840) |
Net Carrying Amount | $ 643 | $ 750 |
INTANGIBLE ASSETS - Amortizatio
INTANGIBLE ASSETS - Amortization Periods (Details) | 12 Months Ended |
Jun. 30, 2017 | |
Dealer network | |
Finite-lived intangible assets | |
Amortization Period (in years) | 14 years |
INTANGIBLE ASSETS - Future Amor
INTANGIBLE ASSETS - Future Amortization (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2015 | |
INTANGIBLE ASSETS | |||
Amortization of intangible assets | $ 107 | $ 221 | $ 222 |
Estimated amortization expense | |||
2,018 | 107 | ||
2,019 | 107 | ||
2,020 | 107 | ||
2,021 | 107 | ||
2,022 | 107 | ||
and thereafter | 108 | ||
Net Carrying Amount | $ 643 | $ 750 |
ACCRUED EXPENSES AND OTHER CU54
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES - Components (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2015 |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | |||
Warranty | $ 12,237 | $ 11,392 | |
Self-insurance | 763 | 809 | |
Compensation and related accruals | 1,691 | 1,706 | |
Inventory repurchase contingent obligation | 1,008 | 742 | |
Interest | 1,008 | 1,178 | |
Dealer incentives | 2,755 | 4,336 | $ 3,568 |
Other | 1,948 | 2,113 | |
Total accrued expenses and other current liabilities | $ 21,410 | $ 22,276 |
ACCRUED EXPENSES AND OTHER CU55
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES - Warranty Liability (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Roll forward of the accrued warranty liability | ||
Beginning balance | $ 11,392 | $ 10,228 |
Provisions | 4,723 | 5,461 |
Payments made | (3,052) | (4,297) |
Adjustments to preexisting warranties | (825) | |
Ending balance | $ 12,237 | $ 11,392 |
ACCRUED EXPENSES AND OTHER CU56
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES - Dealer Incentives Liability (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Activity in dealer incentives | ||
Beginning balance | $ 4,336 | $ 3,568 |
Provisions | 11,160 | 10,759 |
Payments made | (12,741) | (9,991) |
Ending balance | $ 2,755 | $ 4,336 |
FAIR VALUE MEASUREMENTS - Asset
FAIR VALUE MEASUREMENTS - Assets and Liabilities at Fair Value (Details) - USD ($) $ / shares in Units, $ in Thousands | Jun. 30, 2017 | Jun. 30, 2016 |
Assets and liabilities measured at fair value | ||
Asset | $ 0 | |
Liability | $ 0 | |
Transfers of assets between Level 1 and Level 2 | $ 0 | |
Transfers of liabilities between Level 1 and Level 2 | 0 | |
Level 2 | Interest rate cap | ||
Assets and liabilities measured at fair value | ||
Asset | $ 90 | |
Common stock warrant | ||
Assets and liabilities measured at fair value | ||
Number of shares that may be purchased under terms of warrant (in shares) | 1,113,900 | |
Strike price per share (in dollars per share) | $ 4.27 |
FAIR VALUE MEASUREMENTS - Level
FAIR VALUE MEASUREMENTS - Level 3 Reconciliation (Details) - Recurring - Level 3 - Warrant liability $ in Thousands | 12 Months Ended |
Jun. 30, 2016USD ($) | |
Level 3 Reconciliation | |
Beginning balance | $ 9,147 |
Issuance of shares for common stock warrant | (12,572) |
Change in common stock warrant fair value | 3,425 |
Ending balance | $ 0 |
LONG-TERM DEBT - Components (De
LONG-TERM DEBT - Components (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Jun. 30, 2016 |
Long-term debt | ||
Long-term debt, net of unamortized debt issuance costs | $ 34,477 | $ 52,227 |
Less current portion of long term debt | 3,904 | 8,126 |
Less current portion of debt issuance costs on term loan | (217) | (241) |
Long-term Debt - less current portion | 30,790 | 44,342 |
Revolving credit facility | ||
Long-term debt | ||
Long-term debt | 3,126 | |
Senior secured term loan | ||
Long-term debt | ||
Long-term debt | 35,135 | 50,000 |
Debt issuance costs on term loan | $ (658) | $ (899) |
LONG-TERM DEBT - Senior Secured
LONG-TERM DEBT - Senior Secured Credit Facility (Details) - USD ($) $ / shares in Units, $ in Thousands | Jun. 06, 2016 | Jun. 30, 2016 | May 22, 2016 | Jul. 28, 2015 | Mar. 29, 2015 | Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2015 | Feb. 21, 2016 | Nov. 23, 2014 | Dec. 29, 2013 |
Long-term debt | |||||||||||
Proceeds from revolving line of credit | $ 9,208 | $ 20,188 | |||||||||
Payments on revolving line of credit | $ 3,126 | 14,271 | 12,000 | ||||||||
Dividends paid | |||||||||||
Cash dividends paid | $ 79,945 | $ 44,000 | 79,945 | 44,000 | |||||||
Dividend per basic common share | $ 3.95 | ||||||||||
Dividend per diluted common share | $ 3.71 | ||||||||||
Cash dividend per share | $ 4.30 | ||||||||||
Extinguishment of debt | |||||||||||
Loss on extinguishment of debt | $ 716 | 716 | $ 852 | ||||||||
Write-off of debt discount | 676 | ||||||||||
Deferred financing costs amortized | $ 40 | ||||||||||
Unamortized deferred financing costs | 601 | 481 | 601 | ||||||||
Senior secured term loan | |||||||||||
Long-term debt | |||||||||||
Long-term debt | 50,000 | 35,135 | 50,000 | ||||||||
Extinguishment of debt | |||||||||||
Unamortized deferred finance costs | 899 | $ 658 | 899 | ||||||||
Revolving credit facility | |||||||||||
Long-term debt | |||||||||||
Long-term debt | 3,126 | 3,126 | |||||||||
Senior Secured Credit Facility | Senior secured term loan | |||||||||||
Long-term debt | |||||||||||
Loan commitment | $ 50,000 | $ 25,000 | |||||||||
Senior Secured Credit Facility | Revolving credit facility | |||||||||||
Long-term debt | |||||||||||
Maximum borrowing capacity | $ 10,000 | ||||||||||
Amended and Restated Credit and Guaranty Agreement | Maximum | |||||||||||
Extinguishment of debt | |||||||||||
Repurchase authorization | $ 20,000 | ||||||||||
Amended and Restated Credit and Guaranty Agreement | Senior secured term loan | |||||||||||
Long-term debt | |||||||||||
Loan commitment | $ 75,000 | ||||||||||
Amended and Restated Credit and Guaranty Agreement | Revolving credit facility | |||||||||||
Long-term debt | |||||||||||
Maximum borrowing capacity | 30,000 | ||||||||||
Proceeds from revolving line of credit | 20,000 | ||||||||||
Payments on revolving line of credit | $ 10,000 | ||||||||||
Amended Credit Agreement | |||||||||||
Long-term debt | |||||||||||
Maximum borrowing capacity | $ 80,000 | ||||||||||
Amended Credit Agreement | Prime Rate | |||||||||||
Long-term debt | |||||||||||
Variable margin rate based on current senior leverage ratio | 0.75% | ||||||||||
Amended Credit Agreement | Prime Rate | Minimum | |||||||||||
Long-term debt | |||||||||||
Variable margin rate | 0.75% | ||||||||||
Amended Credit Agreement | Prime Rate | Maximum | |||||||||||
Long-term debt | |||||||||||
Variable margin rate | 1.50% | ||||||||||
Amended Credit Agreement | LIBOR | |||||||||||
Long-term debt | |||||||||||
Variable margin rate based on current senior leverage ratio | 2.75% | ||||||||||
Amended Credit Agreement | LIBOR | Minimum | |||||||||||
Long-term debt | |||||||||||
Variable margin rate | 2.75% | ||||||||||
Amended Credit Agreement | LIBOR | Maximum | |||||||||||
Long-term debt | |||||||||||
Variable margin rate | 3.50% | ||||||||||
Amended Credit Agreement | Senior secured term loan | |||||||||||
Long-term debt | |||||||||||
Loan commitment | $ 50,000 | ||||||||||
Amended Credit Agreement | Revolving credit facility | |||||||||||
Long-term debt | |||||||||||
Maximum borrowing capacity | $ 30,000 | ||||||||||
Long-term debt | 3,126 | $ 0 | 3,126 | ||||||||
Letters of credit outstanding | 250 | 250 | 250 | ||||||||
Net availability under facility | $ 26,627 | $ 29,750 | $ 26,627 | ||||||||
Effective interest rate | 3.559% | 3.803% | 3.559% |
LONG-TERM DEBT - Maturities (De
LONG-TERM DEBT - Maturities (Details) - Senior secured term loan - USD ($) $ in Thousands | Jun. 30, 2017 | Jun. 30, 2016 |
Long-term debt maturities | ||
2,018 | $ 3,904 | |
2,019 | 5,856 | |
2,020 | 5,856 | |
2,021 | 19,519 | |
Total | $ 35,135 | $ 50,000 |
INCOME TAXES - Provision (Detai
INCOME TAXES - Provision (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2015 | |
Earnings from continuing operations before income taxes and equity by jurisdiction | |||
Income (loss) from continuing operations before income taxes and equity, foreign | $ (53) | $ 53 | |
Current income tax expense: | |||
Federal | 5,803 | 10,530 | $ 436 |
State and other | 1,584 | 2,020 | 96 |
Benefit of operating loss carryforwards | (118) | (319) | |
Total current tax expense | 7,269 | 12,231 | 532 |
Deferred tax expense: | |||
Federal | 4,154 | (3,583) | 5,636 |
State and other | 300 | (340) | 426 |
Total deferred tax expense | 4,454 | (3,923) | 6,062 |
Income tax expense | $ 11,723 | $ 8,308 | $ 6,594 |
INCOME TAXES - Reconciliation o
INCOME TAXES - Reconciliation of Statutory Rate (Details) | 12 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2015 | |
Difference between the statutory and the effective federal tax rate | |||
Statutory income tax rate | 35.00% | 35.00% | 34.00% |
State taxes (net of federal income tax benefit and valuation allowance) | 2.83% | 0.41% | 2.73% |
Valuation allowance | 0.06% | 0.30% | |
Tax credits | (0.62%) | (2.82%) | |
Other | 0.04% | (0.21%) | (2.95%) |
Uncertain tax positions | 1.93% | 6.06% | (0.55%) |
Permanent deductions | (1.72%) | ||
Permanent differences | 6.36% | 20.84% | |
Effective income tax rate | 37.46% | 44.86% | 54.37% |
INCOME TAXES - Deferred Tax Ass
INCOME TAXES - Deferred Tax Assets (Liabilities) - Components (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Jun. 30, 2016 |
Deferred tax assets: | ||
Warranty reserves | $ 4,392 | $ 4,301 |
Repurchase agreements | 362 | 280 |
Other reserves | 121 | 998 |
Unrecognized tax benefits | 859 | 719 |
Stock compensation | 336 | 4,527 |
State net operating loss | 130 | 130 |
Foreign net operating loss | 104 | 117 |
Valuation allowance | (234) | (247) |
Total deferred tax assets | 6,070 | 10,825 |
Deferred tax liabilities: | ||
Depreciation | (984) | (907) |
Intangible asset basis difference | (6,037) | (6,406) |
Other | (2) | (11) |
Total deferred tax liabilities | (7,023) | (7,324) |
Net deferred tax liabilities | $ (953) | |
Net deferred tax assets | $ 3,501 |
INCOME TAXES - Deferred Tax A65
INCOME TAXES - Deferred Tax Assets (Liabilities) - Classification (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Jun. 30, 2016 |
Classification of the related asset and liability | ||
Noncurrent deferred tax assets | $ 3,501 | |
Noncurrent deferred tax liabilities | $ (953) | |
Net deferred tax assets | $ 3,501 | |
Net deferred tax liabilities | $ (953) |
INCOME TAXES - Net Operating Lo
INCOME TAXES - Net Operating Losses (Details) $ in Thousands | Jun. 30, 2017USD ($) |
State | |
Net operating loss carryforwards | |
Net operating loss carryforwards | $ 3,013 |
Foreign | |
Net operating loss carryforwards | |
Net operating loss carryforwards | $ 494 |
INCOME TAXES - Unrecognized Tax
INCOME TAXES - Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Reconciliation of the beginning and ending amount of unrecognized tax benefits | ||
Balance at end of period | $ 2,054 | $ 328 |
Additions based on tax positions related to the current year | 413 | 623 |
Additions for tax positions of prior years | 1,143 | |
Reductions for tax positions of prior years | (25) | (40) |
Balance at beginning of period | 2,442 | 2,054 |
Unrecognized tax benefits that would impact effective tax rate | 910 | 667 |
Benefit from interest and penalties recorded | 355 | 57 |
Accrued for interest and penalties | 490 | $ 135 |
Amount of unrecognized benefits expected to increase over the next twelve months | $ 845 |
STOCK-BASED COMPENSATION - 2015
STOCK-BASED COMPENSATION - 2015 Equity Incentive Plan (Details) - 2015 Plan - shares | Jun. 30, 2017 | Jul. 28, 2015 | Jun. 30, 2015 |
Stock-Based Compensation | |||
Shares authorized under plan | 2,458,633 | 1,518,958 | |
Shares available for grant | 1,722,190 |
STOCK-BASED COMPENSATION - Rest
STOCK-BASED COMPENSATION - Restricted Stock Awards (Details) - Restricted stock awards - 2015 Plan $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | ||||||
Jan. 29, 2017$ / sharesshares | Jan. 01, 2017director$ / sharesshares | Aug. 28, 2016$ / sharesshares | Apr. 24, 2016$ / sharesshares | Jul. 28, 2015$ / sharesshares | May 24, 2015$ / sharesshares | Jun. 30, 2017USD ($)$ / sharesshares | Jun. 30, 2016USD ($) | |
Stock-Based Compensation | ||||||||
Shares granted | shares | 47,131 | |||||||
Shares granted, grant date fair value per share (in dollars per share) | $ / shares | $ 12.22 | |||||||
Stock-based compensation | $ | $ 321 | $ 13,444 | ||||||
Certain employees | ||||||||
Stock-Based Compensation | ||||||||
Shares granted | shares | 28,391 | 841,585 | ||||||
Shares granted, grant date fair value per share (in dollars per share) | $ / shares | $ 11.85 | $ 15 | ||||||
Vesting period (in years) | 3 years | |||||||
Non-employee directors | ||||||||
Stock-Based Compensation | ||||||||
Shares granted | shares | 1,968 | 5,572 | 10,770 | 6,140 | 47,146 | |||
Shares granted, grant date fair value per share (in dollars per share) | $ / shares | $ 14.63 | $ 13.47 | $ 11.85 | $ 13.41 | $ 15.66 | |||
Compensation recognition period (in days) | 181 days | |||||||
Number of new non-employee directors receiving awards | director | 2 |
STOCK-BASED COMPENSATION - Re70
STOCK-BASED COMPENSATION - Restricted Stock Activity (Details) - 2015 Plan - Restricted stock awards | 12 Months Ended |
Jun. 30, 2017$ / sharesshares | |
Number of Restricted Stock Awards Outstanding | |
Granted | shares | 47,131 |
Vested | shares | (18,740) |
Forfeited | shares | (1,974) |
Total Non-vested Stock Units at end of year | shares | 26,417 |
Weighted Average Grant Date Fair Value | |
Granted | $ / shares | $ 12.22 |
Vested | $ / shares | 18.94 |
Forfeited | $ / shares | 19.55 |
Total Non-vested Stock Awards at end of year | $ / shares | $ 12.22 |
STOCK-BASED COMPENSATION - Nonq
STOCK-BASED COMPENSATION - Nonqualified Stock Option Awards (Details) - 2015 Plan - Nonqualified stock options - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Jul. 28, 2015 | Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2015 | |
Stock-Based Compensation | ||||
Options granted | 137,786 | |||
Option price | $ 15 | |||
Black-Scholes pricing model assumptions | ||||
Risk-free rate | 1.93% | |||
Expected term | 6 years 3 months | |||
Dividend rate | 0.00% | |||
Expected volatility | 56.70% | |||
Certain employees | ||||
Stock-Based Compensation | ||||
Options granted | 137,786 | |||
Option price | $ 15 | |||
Annual vesting percentage | 25.00% | |||
Vesting period (in years) | 4 years | |||
Options forfeited | 15,146 | |||
Stock-based compensation | $ 240 | $ 243 | $ 0 |
STOCK-BASED COMPENSATION - No72
STOCK-BASED COMPENSATION - Nonqualified Stock Option Activity (Details) - 2015 Plan - Nonqualified stock options - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2015 | |
Shares | |||
Outstanding at beginning of year | 122,640 | 86,985 | |
Granted | 137,786 | ||
Exercised | (1,578) | (86,985) | |
Forfeited or expired | (4,734) | (15,146) | |
Outstanding at end of year | 116,328 | 122,640 | 86,985 |
Weighted Average Exercise Price | |||
Outstanding at beginning of year | $ 10.70 | $ 4.03 | |
Granted | 15 | ||
Exercised | 10.70 | 4.03 | |
Forfeited or expired | 10.70 | 15 | |
Outstanding at end of year | $ 10.70 | 10.70 | $ 4.03 |
Reduction in exercise price pursuant to terms of the plan | $ 4.30 | ||
Weighted Average Remaining Contractual Term | |||
Granted | 10 years | ||
Exercised | 8 years 1 month 6 days | ||
Forfeited or expired | 8 years 1 month 6 days | ||
Outstanding | 8 years 1 month 6 days | 9 years 1 month 6 days | 4 years 8 months 12 days |
Aggregate Intrinsic Value | |||
Outstanding at beginning of year | $ 43 | $ 833 | |
Outstanding at end of year | $ 1,030 | $ 43 | $ 833 |
STOCK-BASED COMPENSATION - Perf
STOCK-BASED COMPENSATION - Performance Stock Awards (Details) - Performance stock - 2015 Plan - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended |
Aug. 28, 2016 | Jun. 30, 2017 | |
Stock-Based Compensation | ||
Grant date market price | $ 11.85 | |
Stock-based compensation | $ 150 | |
Certain employees | ||
Stock-Based Compensation | ||
Granted | 42,587 | |
Grant date market price | $ 11.85 | |
Vesting period (in years) | 3 years |
STOCK-BASED COMPENSATION - Pe74
STOCK-BASED COMPENSATION - Performance Stock Activity (Details) - 2015 Plan - Performance stock | 12 Months Ended |
Jun. 30, 2017$ / sharesshares | |
Number of Restricted Stock Awards Outstanding | |
Granted | shares | 42,587 |
Forfeited | shares | (1,974) |
Total Non-vested Stock Units at end of year | shares | 40,613 |
Weighted Average Grant Date Fair Value | |
Granted | $ / shares | $ 11.85 |
Forfeited | $ / shares | 11.85 |
Total Non-vested Stock Awards at end of year | $ / shares | $ 11.85 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Operating Leases (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2015 | |
Operating leases | |||
Rental expense | $ 603 | $ 468 | $ 262 |
Future minimum rental payments | |||
2,018 | 484 | ||
2,019 | 314 | ||
2,020 | 114 | ||
2,021 | 87 | ||
2,022 | 72 | ||
and thereafter | 11 | ||
Total | $ 1,082 |
COMMITMENTS AND CONTINGENCIES76
COMMITMENTS AND CONTINGENCIES - Repurchase Agreements (Details) $ in Thousands | 12 Months Ended | |
Jun. 30, 2017USD ($)item | Jun. 30, 2016USD ($)item | |
Repurchase agreements | ||
Inventory repurchase contingent obligation | $ 1,008 | $ 742 |
Obligation to Repurchase Inventory | ||
Repurchase agreements | ||
Maximum repurchase obligation under aggregated floor plan agreements | $ 94,046 | $ 88,810 |
Number of units repurchased | item | 0 | 0 |
Inventory repurchase contingent obligation | $ 1,008 | $ 742 |
Obligation to Repurchase Inventory | Minimum | ||
Repurchase agreements | ||
Inventory repurchase contingent obligation period | 18 months | |
Obligation to Repurchase Inventory | Maximum | ||
Repurchase agreements | ||
Inventory repurchase contingent obligation period | 30 months |
COMMITMENTS AND CONTINGENCIES77
COMMITMENTS AND CONTINGENCIES - Purchase Commitments (Details) - Ilmor Marine - In-Board Engines - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2017 | |
Future minimum purchase commitments | |||
2,018 | $ 1,153 | ||
2,019 | 1,153 | ||
2,020 | 1,500 | ||
and thereafter | 470 | ||
Total | $ 4,276 | ||
Forecast | Minimum | |||
Purchase commitments | |||
Estimated annual purchases made under the purchase commitment contract | $ 26,000 | $ 26,000 | |
Forecast | Maximum | |||
Purchase commitments | |||
Estimated annual purchases made under the purchase commitment contract | $ 27,000 | $ 27,000 |
COMMITMENTS AND CONTINGENCIES78
COMMITMENTS AND CONTINGENCIES - Settlement (Details) $ in Millions | May 02, 2017USD ($) |
General and Administrative Expense | Settlement Agreement | |
Commitments and contingencies | |
Settlement charge | $ 2.5 |
RELATED PARTY (Details)
RELATED PARTY (Details) $ in Thousands | 12 Months Ended |
Jun. 30, 2015USD ($) | |
Wayzata Investment Partners | |
Related party transactions | |
Interest expense | $ 1,639 |
COMMON STOCK - Common Stock (De
COMMON STOCK - Common Stock (Details) | 12 Months Ended | |
Jun. 30, 2017Vote$ / sharesshares | Jun. 30, 2016$ / sharesshares | |
COMMON STOCK | ||
Common stock, authorized shares | shares | 100,000,000 | 100,000,000 |
Common stock, par value | $ / shares | $ 0.01 | $ 0.01 |
Number of votes entitled for each share of common stock held | Vote | 1 |
COMMON STOCK - Initial Public O
COMMON STOCK - Initial Public Offering (Details) $ / shares in Units, $ in Thousands | Jun. 10, 2016$ / shares | Jun. 06, 2016$ / shares | Jul. 22, 2015$ / sharesshares | Jun. 30, 2017USD ($) | Jun. 30, 2016USD ($) |
Initial Public Offering | |||||
Offering expenses of IPO paid in period | $ 449 | $ 7,202 | |||
Special dividend paid (dollars per share) | $ / shares | $ 4.30 | ||||
Common shares | |||||
Initial Public Offering | |||||
Stock split, conversion ratio | 11.139 | ||||
Special dividend paid (dollars per share) | $ / shares | $ 4.30 | ||||
IPO | Common shares | |||||
Initial Public Offering | |||||
Public offering price per share | $ / shares | $ 15 | ||||
Proceeds from issuance of common stock, net | 81,762 | ||||
Underwriting discounts and commissions | 6,375 | ||||
Offering expenses of IPO, aggregate | 2,934 | ||||
Offering expenses of IPO paid in period | $ 827 | ||||
IPO, excluding over-allotment options | Common shares | |||||
Initial Public Offering | |||||
Shares sold | shares | 6,071,429 | ||||
Over-Allotment Option | Common shares | |||||
Initial Public Offering | |||||
Shares sold | shares | 910,714 |
COMMON STOCK - Follow-on and Se
COMMON STOCK - Follow-on and Secondary Offerings (Details) - Common shares $ / shares in Units, $ in Thousands | 1 Months Ended | |
Jan. 01, 2017USD ($)item$ / sharesshares | Oct. 02, 2016USD ($)$ / sharesshares | |
Follow-on Public Offering | ||
Public Offerings | ||
Proceeds from issuance of common stock, net | $ | $ 0 | |
Offering costs, aggregate | $ | $ 254 | |
Follow-on Public Offering | Selling Stockholders | ||
Public Offerings | ||
Shares sold by selling stockholders | 4,600,000 | |
Public offering price per share | $ / shares | $ 10.25 | |
Secondary Public Offerings | ||
Public Offerings | ||
Number of secondary offerings | item | 2 | |
Proceeds from issuance of common stock, net | $ | $ 0 | |
Offering costs, aggregate | $ | $ 181 | |
Secondary Public Offerings | Selling Stockholders | ||
Public Offerings | ||
Shares sold by selling stockholders | 2,995,000 | |
First Secondary Public Offering | Selling Stockholders | ||
Public Offerings | ||
Shares sold by selling stockholders | 1,495,000 | |
Public offering price per share | $ / shares | $ 13.35 | |
Second Secondary Public Offering | Selling Stockholders | ||
Public Offerings | ||
Shares sold by selling stockholders | 1,500,000 | |
Public offering price per share | $ / shares | $ 13.45 | |
Over-Allotment Option | Selling Stockholders | ||
Public Offerings | ||
Shares sold by selling stockholders | 195,000 | 600,000 |
EARNINGS PER SHARE - Factors (D
EARNINGS PER SHARE - Factors (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Jun. 30, 2017 | Apr. 02, 2017 | Jan. 01, 2017 | Oct. 02, 2016 | Jun. 30, 2016 | Mar. 27, 2016 | Dec. 27, 2015 | Sep. 27, 2015 | Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2015 | |
Factors used in the earnings per share computation | |||||||||||
Net income | $ 19,570 | $ 10,210 | $ 5,534 | ||||||||
Weighted average common shares - basic | 18,593,501 | 18,593,296 | 18,592,936 | 18,591,808 | 17,849,319 | 18,574,887 | 17,998,796 | 16,263,793 | 18,592,885 | 17,849,319 | 11,139,000 |
Dilutive effect of assumed exercises of common stock warrants | 88,060 | 666,573 | |||||||||
Weighted average outstanding shares - diluted | 18,659,246 | 18,625,904 | 18,605,078 | 18,592,603 | 18,257,007 | 18,779,557 | 18,606,884 | 16,263,793 | 18,620,708 | 18,257,007 | 11,862,699 |
Basic earnings per share (in dollars per share) | $ 0.34 | $ 0.12 | $ 0.22 | $ 0.38 | $ 0.27 | $ 0.26 | $ 0.10 | $ (0.08) | $ 1.05 | $ 0.57 | $ 0.50 |
Diluted earnings per share (in dollars per share) | $ 0.34 | $ 0.12 | $ 0.22 | $ 0.38 | $ 0.26 | $ 0.26 | $ 0.10 | $ (0.08) | $ 1.05 | $ 0.56 | $ 0.47 |
Stock options | |||||||||||
Factors used in the earnings per share computation | |||||||||||
Dilutive effect of assumed exercises of stock options and restricted share awards\units | 4,488 | 50,775 | 57,126 | ||||||||
Restricted stock awards | |||||||||||
Factors used in the earnings per share computation | |||||||||||
Dilutive effect of assumed exercises of stock options and restricted share awards\units | 23,335 | 268,853 |
EARNINGS PER SHARE - Anti-dilut
EARNINGS PER SHARE - Anti-dilutive Securities (Details) - shares | 12 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2015 | |
Stock options | |||
Other disclosures | |||
Anti-dilutive securities excluded from computation of earning per share | 91,980 | 124,020 | 0 |
Common stock warrant | |||
Other disclosures | |||
Anti-dilutive securities excluded from computation of earning per share | 0 |
SEGMENT INFORMATION - Geographi
SEGMENT INFORMATION - Geographic Concentration (Details) - segment | 12 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2015 | |
SEGMENT INFORMATION | |||
Number of operating segments | 2 | ||
Number of reportable segments | 2 | ||
MasterCraft | Net sales | Geographic concentration | Outside of North America | |||
SEGMENT INFORMATION | |||
Net sales, percentage | 9.10% | 8.60% | 10.10% |
SEGMENT INFORMATION - Operating
SEGMENT INFORMATION - Operating Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Jun. 30, 2017 | Apr. 02, 2017 | Jan. 01, 2017 | Oct. 02, 2016 | Jun. 30, 2016 | Mar. 27, 2016 | Dec. 27, 2015 | Sep. 27, 2015 | Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2015 | |
Segment reporting information | |||||||||||
Net sales | $ 58,325 | $ 58,486 | $ 51,134 | $ 60,689 | $ 53,386 | $ 57,030 | $ 55,203 | $ 55,981 | $ 228,634 | $ 221,600 | $ 214,386 |
Cost of sales | 165,158 | 160,521 | 163,220 | ||||||||
Operating income | $ 10,559 | $ 4,282 | $ 7,039 | $ 11,635 | $ 7,698 | $ 7,513 | $ 2,780 | $ 4,020 | 33,515 | 22,011 | 23,920 |
Depreciation and amortization | $ 3,231 | $ 3,444 | 3,278 | ||||||||
MasterCraft | |||||||||||
Segment reporting information | |||||||||||
Net sales | 199,907 | ||||||||||
Cost of sales | 150,622 | ||||||||||
Operating income | 21,695 | ||||||||||
Depreciation and amortization | 3,169 | ||||||||||
Hydra-Sports | |||||||||||
Segment reporting information | |||||||||||
Net sales | 14,479 | ||||||||||
Cost of sales | 12,598 | ||||||||||
Operating income | 2,225 | ||||||||||
Depreciation and amortization | $ 109 |
QUARTERLY FINANCIAL REPORTING87
QUARTERLY FINANCIAL REPORTING (UNAUDITED) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Jun. 30, 2017 | Apr. 02, 2017 | Jan. 01, 2017 | Oct. 02, 2016 | Jun. 30, 2016 | Mar. 27, 2016 | Dec. 27, 2015 | Sep. 27, 2015 | Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2015 | |
QUARTERLY FINANCIAL REPORTING (UNAUDITED) | |||||||||||
Net sales | $ 58,325 | $ 58,486 | $ 51,134 | $ 60,689 | $ 53,386 | $ 57,030 | $ 55,203 | $ 55,981 | $ 228,634 | $ 221,600 | $ 214,386 |
Gross profit | 16,456 | 14,925 | 14,286 | 17,809 | 14,033 | 15,842 | 15,365 | 15,839 | 63,476 | 61,079 | 51,166 |
Operating income | 10,559 | 4,282 | 7,039 | 11,635 | 7,698 | 7,513 | 2,780 | 4,020 | 33,515 | 22,011 | 23,920 |
Net income | $ 6,315 | $ 2,241 | $ 4,031 | $ 6,983 | $ 4,769 | $ 4,894 | $ 1,870 | $ (1,323) | $ 19,570 | $ 10,210 | $ 5,534 |
Basic earnings per share (in dollars per share) | $ 0.34 | $ 0.12 | $ 0.22 | $ 0.38 | $ 0.27 | $ 0.26 | $ 0.10 | $ (0.08) | $ 1.05 | $ 0.57 | $ 0.50 |
Diluted earnings per share (in dollars per share) | $ 0.34 | $ 0.12 | $ 0.22 | $ 0.38 | $ 0.26 | $ 0.26 | $ 0.10 | $ (0.08) | $ 1.05 | $ 0.56 | $ 0.47 |
Weighted average shares used for computation of: | |||||||||||
Basic earnings per share (in shares) | 18,593,501 | 18,593,296 | 18,592,936 | 18,591,808 | 17,849,319 | 18,574,887 | 17,998,796 | 16,263,793 | 18,592,885 | 17,849,319 | 11,139,000 |
Diluted earnings per share (in shares) | 18,659,246 | 18,625,904 | 18,605,078 | 18,592,603 | 18,257,007 | 18,779,557 | 18,606,884 | 16,263,793 | 18,620,708 | 18,257,007 | 11,862,699 |