Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Sep. 29, 2019 | Nov. 04, 2019 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 29, 2019 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q1 | |
Entity Registrant Name | Mastercraft Boat Holdings, Inc. | |
Entity Central Index Key | 0001638290 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Current Fiscal Year End Date | --06-30 | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 18,853,997 | |
Entity Shell Company | false | |
Entity Small Business | false | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | true | |
Title of 12(b) Security | Common Stock | |
Trading Symbol | MCFT | |
Security Exchange Name | NASDAQ | |
Entity File Number | 001-37502 | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 06-1571747 | |
Entity Address, Address Line One | 100 Cherokee Cove Drive | |
Entity Address, City or Town | Vonore | |
Entity Address, State or Province | TN | |
Entity Address, Postal Zip Code | 37885 | |
City Area Code | 423 | |
Local Phone Number | 884-2221 | |
Document Quarterly Report | true | |
Document Transition Report | false |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 29, 2019 | Sep. 30, 2018 | |
Income Statement [Abstract] | ||
NET SALES | $ 109,789 | $ 93,641 |
COST OF SALES | 84,256 | 70,438 |
GROSS PROFIT | 25,533 | 23,203 |
OPERATING EXPENSES: | ||
Selling and marketing | 4,064 | 4,290 |
General and administrative | 7,785 | 6,772 |
Amortization of other intangible assets | 987 | 530 |
Total operating expenses | 12,836 | 11,592 |
OPERATING INCOME | 12,697 | 11,611 |
OTHER EXPENSE: | ||
Interest expense | 1,344 | 920 |
INCOME BEFORE INCOME TAX EXPENSE | 11,353 | 10,691 |
INCOME TAX EXPENSE | 2,730 | 2,226 |
NET INCOME | $ 8,623 | $ 8,465 |
EARNINGS PER COMMON SHARE: | ||
Basic | $ 0.46 | $ 0.45 |
Diluted | $ 0.46 | $ 0.45 |
WEIGHTED AVERAGE SHARES USED FOR COMPUTATION OF: | ||
Basic earnings per share | 18,723,845 | 18,646,039 |
Diluted earnings per share | 18,770,756 | 18,768,764 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 29, 2019 | Jun. 30, 2019 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 6,411 | $ 5,826 |
Accounts receivable, net of allowances of $248 and $281, respectively | 9,287 | 12,463 |
Income tax receivable | 1,415 | 951 |
Inventories, net (Note 4) | 34,914 | 30,660 |
Prepaid expenses and other current assets | 4,560 | 4,464 |
Total current assets | 56,587 | 54,364 |
Property, plant and equipment, net | 35,982 | 33,636 |
Goodwill (Note 6) | 74,030 | 74,030 |
Other intangible assets, net (Note 6) | 78,811 | 79,799 |
Deferred income taxes | 6,090 | 6,240 |
Deferred debt issuance costs, net | 424 | 451 |
Finance lease assets (Note 8) | 4,115 | |
Operating lease assets (Note 8) | 942 | |
Other long-term assets | 253 | 253 |
Total assets | 257,234 | 248,773 |
CURRENT LIABILITIES: | ||
Accounts payable | 16,974 | 17,974 |
Income tax payable | 426 | |
Accrued expenses and other current liabilities (Note 5) | 41,581 | 41,421 |
Current portion of long-term debt, net of unamortized debt issuance costs (Note 7) | 8,734 | 8,725 |
Total current liabilities | 67,289 | 68,546 |
Long-term debt, net of unamortized debt issuance costs (Note 7) | 105,121 | 105,016 |
Operating lease liabilities (Note 8) | 613 | |
Unrecognized tax positions | 3,102 | 2,895 |
Total liabilities | 176,125 | 176,457 |
COMMITMENTS AND CONTINGENCIES | ||
STOCKHOLDERS' EQUITY: | ||
Common stock, $.01 par value per share — authorized, 100,000,000 shares; issued and outstanding, 18,838,997 shares at September 29, 2019 and 18,764,037 shares at June 30, 2019 | 189 | 188 |
Additional paid-in capital | 115,751 | 115,582 |
Accumulated deficit | (34,831) | (43,454) |
Total stockholders' equity | 81,109 | 72,316 |
Total liabilities and stockholders' equity | $ 257,234 | $ 248,773 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Sep. 29, 2019 | Jun. 30, 2019 |
Statement Of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 248 | $ 281 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, authorized shares | 100,000,000 | 100,000,000 |
Common stock, issued shares | 18,838,997 | 18,764,037 |
Common stock, outstanding shares | 18,838,997 | 18,764,037 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Accumulated Deficit |
Balance, beginning at Jun. 30, 2018 | $ 52,522 | $ 187 | $ 114,052 | $ (61,717) |
Balance, beginning (in shares) at Jun. 30, 2018 | 18,682,338 | |||
Increase (decrease) in stockholders' equity | ||||
Adoption of accounting standards | ASU 14-09 | (3,091) | (3,091) | ||
Equity-based compensation activity | 279 | 279 | ||
Equity-based compensation activity (shares) | 39,082 | |||
Net income | 8,465 | 8,465 | ||
Balance, ending at Sep. 30, 2018 | 58,175 | $ 187 | 114,331 | (56,343) |
Balance, ending (in shares) at Sep. 30, 2018 | 18,721,420 | |||
Balance, beginning at Jun. 30, 2019 | 72,316 | $ 188 | 115,582 | (43,454) |
Balance, beginning (in shares) at Jun. 30, 2019 | 18,764,037 | |||
Increase (decrease) in stockholders' equity | ||||
Equity-based compensation activity | 170 | $ 1 | 169 | |
Equity-based compensation activity (shares) | 74,960 | |||
Net income | 8,623 | 8,623 | ||
Balance, ending at Sep. 29, 2019 | $ 81,109 | $ 189 | $ 115,751 | $ (34,831) |
Balance, ending (in shares) at Sep. 29, 2019 | 18,838,997 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 29, 2019 | Sep. 30, 2018 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income | $ 8,623 | $ 8,465 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 2,371 | 1,435 |
Noncash lease expense | 152 | |
Inventory obsolescence reserve | 158 | 13 |
Amortization of debt issuance costs | 142 | 127 |
Stock-based compensation | 512 | 384 |
Change in interest rate cap fair value | 37 | (2) |
Unrecognized tax benefits | 207 | 115 |
Deferred income taxes | 150 | (284) |
Net provision for doubtful accounts | (34) | 66 |
Gain on disposal of fixed assets | (3) | (3) |
Changes in operating assets and liabilities: | ||
Accounts receivable | 3,210 | (3,861) |
Inventories | (4,412) | (1,275) |
Prepaid expenses and other current assets | (133) | (290) |
Income tax receivable and payable, net | (890) | (1,381) |
Other assets | (1) | |
Accounts payable | (412) | 2,199 |
Accrued expenses and other current liabilities | (4,297) | (2,340) |
Operating lease liabilities | (139) | |
Net cash provided by operating activities | 5,242 | 3,367 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchases of property and equipment | (4,328) | (3,425) |
Proceeds from disposal of property and equipment | 14 | 3 |
Net cash used in investing activities | (4,314) | (3,422) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Cash paid for withholding taxes on vested stock | (343) | (105) |
Principal payments on long-term debt | (1,656) | |
Net cash used in financing activities | (343) | (1,761) |
NET CHANGE IN CASH AND CASH EQUIVALENTS | 585 | (1,816) |
CASH AND CASH EQUIVALENTS — BEGINNING OF PERIOD | 5,826 | 7,909 |
CASH AND CASH EQUIVALENTS — END OF PERIOD | 6,411 | 6,093 |
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: | ||
Cash payments for interest | 835 | 1,025 |
Cash payments for income taxes | 3,501 | $ 3,775 |
SIGNIFICANT NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||
Capital expenditures in accounts payable and accrued expenses | $ 321 |
ORGANIZATION, BASIS OF PRESENTA
ORGANIZATION, BASIS OF PRESENTATION, AND SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Sep. 29, 2019 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
ORGANIZATION, BASIS OF PRESENTATION, AND SIGNIFICANT ACCOUNTING POLICIES | Organization — MasterCraft Boat Holdings, Inc. (“Holdings”) was formed on January 28, 2000, as a Delaware holding company and operates primarily through its wholly owned subsidiaries, MasterCraft Boat Company, LLC, MasterCraft Services, LLC, MasterCraft Parts, Ltd., and MasterCraft International Sales Administration, Inc. (collectively, “MasterCraft”); Nautic Star, LLC and NS Transport, LLC (collectively, “NauticStar”); and Crest Marine LLC (“Crest”). Holdings and its subsidiaries collectively are referred to herein as the “Company”. The Company is a leading innovator, designer, manufacturer, and marketer of recreational powerboats that operates in three reportable segments: MasterCraft, NauticStar and Crest. See Note 12 for information regarding the Company’s reportable segments. Basis of Presentation The unaudited condensed consolidated financial statements have been prepared on the same basis as the Company’s audited consolidated financial statements for the year ended June 30, 2019 and, in the opinion of management, reflect all adjustments considered necessary to present fairly the Company’s financial position as of September 29, 2019, its results of operations for the three months ended September 29, 2019 and September 30, 2018, its cash flows for the three months ended September 29, 2019 and September 30, 2018, and its statements of stockholders’ equity for the three months ended September 29, 2019 and September 30, 2018. All adjustments are of a normal recurring nature. Certain information and footnote disclosures normally included in annual consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and the applicable rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) for financial information have been condensed or omitted pursuant to such rules and regulations. The June 30, 2019 condensed consolidated balance sheet data was derived from the audited financial statements but does not include all disclosures required by U.S. GAAP for complete financial statements. However, management believes that the disclosures in these condensed consolidated financial statements are adequate to make the information presented not misleading. These condensed consolidated financial statements should be read in conjunction with the Company’s consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended June 30, 2019, which was filed with the SEC on September 13, 2019. Due to the seasonality of the Company’s business, the interim results are not necessarily indicative of the results that may be expected for the remainder of the fiscal year. With the exception of Accounting Standards Codification (“ASC”) 842 discussed below, there were no significant changes in or changes in the application of the Company’s significant or critical accounting policies or estimation procedures for the three months ended September 29, 2019 as compared with the significant accounting policies described in the Company’s audited consolidated financial statements for the fiscal year ended June 30, 2019. Recently Adopted Accounting Standards Leases In February 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-02, Leases, Leases (Topic 842): Targeted Improvements ASC 842 did not have a material impact on the Company's condensed consolidated statements of operations. The cumulative effect of the changes made to the Company's consolidated balance sheet as of July 1, 2019 for the adoption of ASC 842 was as follows: Balance as of Adjustments Balance as of June 30, 2019 Due to ASC 842 July 1, 2019 Assets Operating lease assets $ - $ 3,931 $ 3,931 Current liabilities Accrued expenses and other current liabilities 41,421 547 41,968 Long-term liabilities Operating lease liabilities - 3,384 3,384 The Company determines if an arrangement is a lease at lease inception. Operating lease right-of-use (“ROU”) assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at the commencement date. As the Company's lease contracts generally do not include an implicit rate, the Company uses its incremental borrowing rate based on information available at commencement date in determining the present value of future payments. The incremental borrowing rate is estimated to approximate the interest rate on a collateralized basis with similar terms and payments, and in economic environments where the leased asset is located. The operating lease ROU asset also includes any initial direct costs and lease payments made prior to lease commencement, and excludes lease incentives incurred. The Company's lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Operating lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. The Company may enter into lease agreements that contain both lease and non-lease components, which it has elected to account for as a single lease component for all asset classes. See Note 8 for information regarding the Company’s leases. Share-Based Compensation In June 2018, the Financial Accounting Standards Board issued ASU 2018-07 , Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting Compensation—Stock Compensation Recently Issued Accounting Standards Fair Value Measurements In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement |
REVENUE RECOGNITION
REVENUE RECOGNITION | 3 Months Ended |
Sep. 29, 2019 | |
Revenue From Contract With Customer [Abstract] | |
REVENUE RECOGNITION | 2 . REVENUE RECOGNITION The following tables present the Company’s revenue from contracts with customers by major product category and reportable segment. Three Months Ended September 29, 2019 MasterCraft NauticStar Crest Total Major Product Categories: Boats and trailers $ 69,286 $ 17,834 $ 18,624 $ 105,744 Parts 3,432 160 181 3,773 Other revenue 195 1 76 272 Total $ 72,913 $ 17,995 $ 18,881 $ 109,789 Three Months Ended September 30, 2018 MasterCraft NauticStar Crest (a) Total Major Product Categories: Boats and trailers $ 72,376 $ 17,123 $ - $ 89,499 Parts 3,581 280 - 3,861 Other revenue 277 4 - 281 Total $ 76,234 $ 17,407 $ - $ 93,641 (a) Crest was acquired on October 1, 2018. Contract Liabilities As of June 30, 2019, the Company had $0.8 million of contract liabilities associated with customer deposits. During the three months ended September 29, 2019, $0.7 million of this amount was recognized as revenue. As of September 29, 2019, total contract liabilities were $1.1 million and were reported in Accrued expenses and other current liabilities on the condensed consolidated balance sheet and are expected to be recognized as revenue during the remainder of the year ended June 30, 2020. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 3 Months Ended |
Sep. 29, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 3 . RELATED PARTY TRANSACTIONS Crest Facility Lease In connection with the operations of Crest, the Company makes rental payments to Crest Marine Real Estate LLC (“Real Estate”) for a manufacturing facility, storage and office building (the “Crest Facility”). One of the minority owners of Real Estate is a member of the Crest management team. The ten-year lease expires on September 30, 2028, and is subject to four consecutive, five-year renewal periods. The lease terms include an option for the Company to purchase the Crest Facility for an amount equal to its fair market value, as determined by appraisals and negotiation between the Company and Real Estate (the “Purchase Option”). The annual rent under the lease is $0.3 million for the first five years of the lease term and will increase to $0.4 million for the remaining five years. Additionally, at the beginning of each of the optional renewal terms the rent will be adjusted based upon the change in the Consumer Price Index. During the three months ended September 29, 2019, the Company recognized lease expense of $0.1 million as a result of this lease. In accordance with the Purchase Option, on October 24, 2019 the Company purchased the Crest Facility for $4.1 million. See Note 8 for additional information regarding the purchase. Crest Supplier Relationship Crest purchases fiberglass component parts from a supplier whose minority owner is the same member of the Crest management team that has a minority ownership interest in Real Estate. During the three months ended September 29, 2019, the Company purchased $0.8 million of products from the supplier. As of September 29, 2019 and June 30, 2019, the outstanding balance due to the supplier was $0.2 million and $0.1 million, respectively. |
INVENTORIES
INVENTORIES | 3 Months Ended |
Sep. 29, 2019 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | 4 . INVENTORIES Inventories consisted of the following: September 29, 2019 June 30, 2019 Raw materials and supplies $ 21,357 $ 20,034 Work in process 4,931 4,571 Finished goods 9,936 7,207 Obsolescence reserve (1,310 ) (1,152 ) Total inventories $ 34,914 $ 30,660 |
ACCRUED EXPENSES AND OTHER CURR
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | 3 Months Ended |
Sep. 29, 2019 | |
Accrued Liabilities And Other Liabilities [Abstract] | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | 5 . ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES Accrued expenses and other current liabilities consisted of the following: September 29, 2019 June 30, 2019 Warranty $ 17,690 $ 17,205 Dealer incentives 7,622 12,623 Current lease liabilities 4,457 — Compensation and related accruals 2,456 3,494 Floor plan interest 3,328 2,060 Inventory repurchase contingent obligation 1,259 1,936 Self-insurance 716 606 Debt interest 743 405 Other 3,310 3,092 Total accrued expenses and other current liabilities $ 41,581 $ 41,421 The following activity related to warranty liabilities was recorded in accrued expenses during the three months ended September 29, 2019 and September 30, 2018: September 29, 2019 September 30, 2018 Balance at the beginning of the period $ 17,205 $ 13,077 Provisions 1,999 1,769 Payments made (2,302 ) (2,249 ) Aggregate changes for preexisting warranties 788 857 Balance at the end of the period $ 17,690 $ 13,454 |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 3 Months Ended |
Sep. 29, 2019 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
GOODWILL AND OTHER INTANGIBLE ASSETS | 6. GOODWILL AND OTHER INTANGIBLE ASSETS The carrying amounts of goodwill as of September 29, 2019 and June 30, 2019, attributable to each of the Company’s reportable segments, were as follows: Gross Amount Accumulated Impairment Losses Total MasterCraft $ 29,593 $ - $ 29,593 NauticStar 36,199 (28,000 ) 8,199 Crest 36,238 - 36,238 Total $ 102,030 $ (28,000 ) $ 74,030 The following table shows changes in the carrying amount of Other intangible assets, net. September 29, 2019 June 30, 2019 Gross Amount Accumulated Amortization / Impairment Other intangible assets, net Gross Amount Accumulated Amortization / Impairment Other intangible assets, net Amortized intangible assets Dealer networks $ 39,500 $ (6,885 ) $ 32,615 $ 39,500 $ (5,909 ) $ 33,591 Software 245 (49 ) 196 245 (37 ) 208 39,745 (6,934 ) 32,811 39,745 (5,946 ) 33,799 Unamortized intangible assets Trade names 49,000 (3,000 ) 46,000 49,000 (3,000 ) 46,000 Total intangible assets $ 88,745 $ (9,934 ) $ 78,811 $ 88,745 $ (8,946 ) $ 79,799 Amortization expense for the three months ended September 29, 2019 and September 30, 2018 was $1.0 million and $0.5 million, respectively. Estimated amortization expense for the fiscal year ended June 30, 2020 is $4.0 million. During the fiscal fourth quarter of the year ended June 30, 2019, the Company recorded a $28.0 million impairment of goodwill and a $3.0 million impairment of trade name in our NauticStar segment. Because the carrying value of the NauticStar segment was equal to its fair value at June 30, 2019, as a result of the fiscal 2019 impairments, if actual performance of the NauticStar segment falls short of expected results, additional material impairment charges may be required. During the three months ended September 29, 2019, the Company assessed for triggering events that could indicate the need to perform an impairment test and concluded there were no triggering events during the period. |
LONG-TERM DEBT
LONG-TERM DEBT | 3 Months Ended |
Sep. 29, 2019 | |
Debt Disclosure [Abstract] | |
LONG-TERM DEBT | 7. LONG-TERM DEBT Long-term debt outstanding is as follows: September 29, 2019 June 30, 2019 Senior secured term loans $ 115,349 $ 115,349 Debt issuance costs on term loans (1,494 ) (1,608 ) Total debt 113,855 113,741 Less current portion of long-term debt 9,167 9,167 Less current portion of debt issuance costs on term loans (433 ) (442 ) Long-term debt — less current portion $ 105,121 $ 105,016 On October 1, 2018, the Company entered into the Fourth Amended and Restated Credit and Guaranty Agreement with a syndicate of certain financial institutions (the “Fourth Amended Credit Agreement”). The Fourth Amended Credit Agreement replaced the Company’s Third Amended and Restated Credit Agreement, dated October 2, 2017. The Fourth Amended Credit Agreement provides the Company with a $190.0 million senior secured credit facility, consisting of a $75.0 million term loan, and an $80.0 million term loan (together, the “Term Loans”), and a $35.0 million revolving credit facility (the “Revolving Credit Facility”). The Fourth Amended Credit Agreement bears interest, at the Company’s option, at either the prime rate plus an applicable margin ranging from 0.5% to 1.5% or at an adjusted LIBOR rate plus an applicable margin ranging from 1.5% to 2.5%, in each case based on the Company’s senior leverage ratio. Based on the Company’s senior leverage ratio as of September 29, 2019, 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 1.75%. As of September 29, 2019 and June 30, 2019, the Company’s unamortized debt issuance costs related to the Term Loans were $1.5 million and $1.6 million, respectively. These costs are being amortized over the term of the Fourth Amended Credit Agreement. As of September 29, 2019, the Company had no borrowings outstanding on its Revolving Credit Facility and the availability under the Revolving Credit Facility was $35.0 million. The Company’s unamortized debt issuance costs related to the Revolving Credit Facility were $0.4 million and $0.5 million as of September 29, 2019 and June 30, 2019, respectively. As of September 29, 2019, the Company was in compliance with its financial covenants under the Fourth Amended Credit Agreement. |
LEASES
LEASES | 3 Months Ended |
Sep. 29, 2019 | |
Leases [Abstract] | |
LEASES | 8. LEASES The Company has lease agreements for the Crest Facility and certain personal property. Leases with an initial lease term of 12 months or less are not recorded on the balance sheet. Certain leases include one or more options to renew, with renewal terms that can extend the lease term from one to five years or more. The exercise of lease renewal options is at the Company’s sole discretion. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. As of September 29, 2019, the Company’s most significant lease is for the Crest Facility which includes the Purchase Option for the Company to acquire the premises. Upon adoption of ASC 842 on July 1, 2019, this lease was classified as an operating lease. During the three months ended September 29, 2019, the decision was made to exercise the Purchase Option which resulted in $2.8 million of operating lease assets and liabilities being reclassified to finance lease assets and liabilities on the September 29, 2019 condensed consolidated balance sheet. In addition, the decision to exercise the Purchase Option resulted in the remeasurement of the related lease balances which added $1.3 million of additional finance lease assets and finance lease liabilities to the September 29, 2019 condensed consolidated balance sheet. A summary of the Company's lease assets and lease liabilities as of September 29, 2019 is as follows: Classification September 29, 2019 Lease Assets Finance lease assets Finance lease assets $ 4,115 Operating lease assets Operating lease assets 942 Total lease assets $ 5,057 Lease Liabilities Current finance lease liabilities Accrued expenses and other current liabilities $ 4,128 Current operating lease liabilities Accrued expenses and other current liabilities 329 Non-current operating lease liabilities Operating lease liabilities 613 Total lease liabilities $ 5,070 In accordance with the Purchase Option, on October 24, 2019 the Company completed the purchase of the Crest Facility for $4.1 million. The purchase price was determined by appraisal and negotiation between the Company and Real Estate. The Company funded the purchase by utilizing cash from operations. A summary of the Company's total lease cost for the three months ended September 29, 2019 is as follows: Classification September 29, 2019 Operating lease cost Cost of sales $ 198 General and administrative 6 Total lease cost (a) $ 204 (a) Includes total variable lease cost and total short-term lease cost, both of which were immaterial. The Company's maturity analysis of its operating lease liabilities as of September 29, 2019 is as follows: Remainder of 2020 $ 312 2021 380 2022 303 2023 72 2024 1 Total lease payments 1,068 Less: Interest (76 ) Present value of lease payments $ 992 The total weighted-average discount rate and remaining lease term for the Company's operating leases were 4.73% and 2.8 years, respectively, as of September 29, 2019. Total operating cash flows related to operating leases were $0.2 million for the three months ended September 29, 2019. Future minimum rental payments under all non-cancelable operating leases with remaining lease terms in excess of one year at June 30, 2019, were as follows: 2020 $ 703 2021 690 2022 628 2023 402 2024 402 Thereafter 1,806 Total $ 4,631 |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Sep. 29, 2019 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | 9 . INCOME TAXES The Company’s consolidated interim effective tax rate is based on a current estimate of the annual effective income tax rate adjusted to reflect the impact of discrete items. During the three months ended September 29, 2019 and September 30, 2018, the Company’s effective tax rate was 24.0% and 20.8%, respectively. The differences between the Company’s effective tax rates and the statutory federal tax rate of 21.0% primarily relate to the inclusion of the state tax rate in the overall effective rate and a permanent benefit associated with the foreign derived intangible income deduction. The Company’s effective tax rate for the three months ended September 29, 2019 is higher compared to the effective tax rate for the three months ended September 30, 2018, primarily due to favorable discrete adjustments which reduced the effective tax rate for the three months ended September 30, 2018. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 3 Months Ended |
Sep. 29, 2019 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | 1 0 . EARNINGS PER SHARE The following table sets forth the computation of the Company’s earnings per share: Three Months Ended September 29, 2019 September 30, 2018 Net income $ 8,623 $ 8,465 Weighted average common shares — basic 18,723,845 18,646,039 Dilutive effect of assumed exercises of stock options 27,474 52,353 Dilutive effect of assumed restricted share awards/units 19,437 70,372 Weighted average outstanding shares — diluted 18,770,756 18,768,764 Basic earnings per share $ 0.46 $ 0.45 Diluted earnings per share $ 0.46 $ 0.45 For the three months ended September 29, 2019, the weighted average shares that were anti-dilutive, and therefore excluded from the computation of diluted earnings per share, included 56,108 and 42,919 of restricted stock awards (“RSAs”) and performance stock units (“PSUs”), respectively. For the three months ended September 30, 2018, there were no anti-dilutive weighted average shares to be excluded from the computation of diluted earnings per share. |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 3 Months Ended |
Sep. 29, 2019 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
SHARE-BASED COMPENSATION | 1 1 . SHARE-BASED COMPENSATION The following table presents the components of share-based compensation expense by award type. September 29, 2019 September 30, 2018 Stock options $ 9 $ 54 Restricted stock awards 252 202 Performance stock units 251 128 Share-based compensation expense $ 512 $ 384 Restricted Stock Awards During the three months ended September 29, 2019, the Company granted 79,894 RSAs to the Company’s non-executive directors, officers and certain other key employees. The shares of restricted stock granted during the three months ended September 29, 2019, vest pro-rata over three years for officers and certain other key employees and over one year for non-executive directors. We determined the fair value of the shares awarded by using the close price of our common stock as of the date of grant. The weighted average grant date value of RSAs granted in the three months ended September 29, 2019, was $18.03 per share. The following table summarizes the status of nonvested RSAs as of September 29, 2019, and changes during the three months then ended. Average Nonvested Grant-Date Restricted Fair Value Shares (per share) Nonvested at June 30, 2019 53,804 $ 22.94 Granted 79,894 $ 18.03 Vested (23,173 ) $ 20.39 Forfeited - $ - Nonvested at September 29, 2019 110,525 $ 19.93 As of September 29, 2019, there was $2.0 million of total unrecognized compensation expense related to nonvested RSAs. The Company expects this expense to be recognized over a weighted average period of 2.1 years. Performance Stock Units PSUs are a form of long-term incentive compensation awarded to executive officers and certain other key employees designed to directly align the interests of employees to the interests of the Company’s stockholders, and to create long-term stockholder value. The awards will be earned based on the Company’s achievement of certain performance criteria over a three-year performance period. The performance period for the awards commence on July 1 of the fiscal year in which they were granted and continue for a three-year period, ending on June 30 of the applicable year. The probability of achieving the performance criteria is assessed quarterly. Following the determination of the Company’s achievement with respect to the performance criteria, the amount of shares awarded is subject to adjustment based on the application of a total shareholder return (“TSR”) modifier. The grant date fair value is determined based on both the assessment of the probability of the Company’s achieving the performance criteria and an estimate of the expected TSR modifier. The TSR modifier estimate is determined using a Monte Carlo Simulation model, which considers the likelihood of numerous possible outcomes of long-term market performance. Compensation expense related to nonvested PSUs is recognized ratably over the performance period. The following table summarizes the status of nonvested PSUs as of September 29, 2019, and changes during the three months then ended. Average Nonvested Grant-Date Performance Fair Value Stock Units (per share) Nonvested at June 30, 2019 50,621 $ 23.34 Granted 53,485 18.47 Vested - - Forfeited - - Nonvested at September 29, 2019 104,106 20.84 As of September 29, 2019, there was $1.6 million of total unrecognized compensation expense related to nonvested PSUs. The Company expects this expense to be recognized over a weighted average period of 2.3 years. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 3 Months Ended |
Sep. 29, 2019 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | 12. SEGMENT INFORMATION The Company designs, manufactures, and markets recreational performance sport boats, luxury day boats, and outboard boats under three operating and reportable segments: MasterCraft, NauticStar, and Crest. The Company’s segments are defined by the Company’s operational and reporting structures. MasterCraft Segment The MasterCraft segment produces boats under two product brands, MasterCraft and Aviara, at its Vonore, Tennessee facility. MasterCraft boats are premium recreational performance sport boats primarily used for water skiing, wakeboarding, wake surfing, and general recreational boating. Aviara boats are luxury day boats primarily used for general recreational boating. Production of Aviara boats began during the year ended June 30, 2019 and the Company began selling these boats in July 2019. NauticStar Segment The NauticStar segment produces boats at its Amory, Mississippi facility. NauticStar’s boats are primarily used for saltwater fishing and general recreational boating. Crest Segment The Crest segment produces pontoon boats at its Owosso, Michigan facility. Crest’s boats are primarily used for general recreational boating. The following tables present financial information for the Company’s reportable segments for the three months ended September 29, 2019 and September 30, 2018 and the Company’s financial position at September 29, 2019 and June 30, 2019. Three Months Ended September 29, 2019 MasterCraft NauticStar Crest Consolidated Net sales $ 72,913 $ 17,995 $ 18,881 $ 109,789 Operating income 12,207 27 463 12,697 Depreciation and amortization 1,020 801 550 2,371 Purchases of property and equipment 2,733 819 776 4,328 Three Months Ended September 30, 2018 MasterCraft NauticStar Crest (a) Consolidated Net sales $ 76,234 $ 17,407 $ — $ 93,641 Operating income 11,530 81 — 11,611 Depreciation and amortization 805 630 — 1,435 Purchases of property and equipment 2,735 690 — 3,425 (a) Crest was acquired on October 1, 2018. As of September 29, 2019 As of June 30, 2019 Assets: MasterCraft $ 279,370 $ 273,046 NauticStar 52,911 52,761 Crest 87,966 85,979 Eliminations (163,013 ) (163,013 ) Total assets $ 257,234 $ 248,773 |
ORGANIZATION, BASIS OF PRESEN_2
ORGANIZATION, BASIS OF PRESENTATION, AND SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Sep. 29, 2019 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Organization | Organization — MasterCraft Boat Holdings, Inc. (“Holdings”) was formed on January 28, 2000, as a Delaware holding company and operates primarily through its wholly owned subsidiaries, MasterCraft Boat Company, LLC, MasterCraft Services, LLC, MasterCraft Parts, Ltd., and MasterCraft International Sales Administration, Inc. (collectively, “MasterCraft”); Nautic Star, LLC and NS Transport, LLC (collectively, “NauticStar”); and Crest Marine LLC (“Crest”). Holdings and its subsidiaries collectively are referred to herein as the “Company”. The Company is a leading innovator, designer, manufacturer, and marketer of recreational powerboats that operates in three reportable segments: MasterCraft, NauticStar and Crest. See Note 12 for information regarding the Company’s reportable segments. |
Fiscal Period | The Company’s fiscal year begins July 1 and ends June 30, with the interim quarterly reporting periods consisting of 13 weeks. Therefore, the quarter end will not always coincide with the date of the end of a calendar month. |
Principles of Consolidation | The unaudited condensed consolidated financial statements have been prepared on the same basis as the Company’s audited consolidated financial statements for the year ended June 30, 2019 and, in the opinion of management, reflect all adjustments considered necessary to present fairly the Company’s financial position as of September 29, 2019, its results of operations for the three months ended September 29, 2019 and September 30, 2018, its cash flows for the three months ended September 29, 2019 and September 30, 2018, and its statements of stockholders’ equity for the three months ended September 29, 2019 and September 30, 2018. All adjustments are of a normal recurring nature. Certain information and footnote disclosures normally included in annual consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and the applicable rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) for financial information have been condensed or omitted pursuant to such rules and regulations. The June 30, 2019 condensed consolidated balance sheet data was derived from the audited financial statements but does not include all disclosures required by U.S. GAAP for complete financial statements. However, management believes that the disclosures in these condensed consolidated financial statements are adequate to make the information presented not misleading. These condensed consolidated financial statements should be read in conjunction with the Company’s consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended June 30, 2019, which was filed with the SEC on September 13, 2019. |
Basis of Accounting | Due to the seasonality of the Company’s business, the interim results are not necessarily indicative of the results that may be expected for the remainder of the fiscal year. |
New Accounting Pronouncements Issued, Adopted and Not Yet Adopted | Recently Adopted Accounting Standards Leases In February 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-02, Leases, Leases (Topic 842): Targeted Improvements ASC 842 did not have a material impact on the Company's condensed consolidated statements of operations. The cumulative effect of the changes made to the Company's consolidated balance sheet as of July 1, 2019 for the adoption of ASC 842 was as follows: Balance as of Adjustments Balance as of June 30, 2019 Due to ASC 842 July 1, 2019 Assets Operating lease assets $ - $ 3,931 $ 3,931 Current liabilities Accrued expenses and other current liabilities 41,421 547 41,968 Long-term liabilities Operating lease liabilities - 3,384 3,384 The Company determines if an arrangement is a lease at lease inception. Operating lease right-of-use (“ROU”) assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at the commencement date. As the Company's lease contracts generally do not include an implicit rate, the Company uses its incremental borrowing rate based on information available at commencement date in determining the present value of future payments. The incremental borrowing rate is estimated to approximate the interest rate on a collateralized basis with similar terms and payments, and in economic environments where the leased asset is located. The operating lease ROU asset also includes any initial direct costs and lease payments made prior to lease commencement, and excludes lease incentives incurred. The Company's lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Operating lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. The Company may enter into lease agreements that contain both lease and non-lease components, which it has elected to account for as a single lease component for all asset classes. See Note 8 for information regarding the Company’s leases. Share-Based Compensation In June 2018, the Financial Accounting Standards Board issued ASU 2018-07 , Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting Compensation—Stock Compensation Recently Issued Accounting Standards Fair Value Measurements In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement |
ORGANIZATION, BASIS OF PRESEN_3
ORGANIZATION, BASIS OF PRESENTATION, AND SIGNIFICANT ACCOUNTING POLICIES (Tables) | 3 Months Ended |
Sep. 29, 2019 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Summary of Cumulative Effect of Changes Made to Company's Consolidated Balance Sheets | The cumulative effect of the changes made to the Company's consolidated balance sheet as of July 1, 2019 for the adoption of ASC 842 was as follows: Balance as of Adjustments Balance as of June 30, 2019 Due to ASC 842 July 1, 2019 Assets Operating lease assets $ - $ 3,931 $ 3,931 Current liabilities Accrued expenses and other current liabilities 41,421 547 41,968 Long-term liabilities Operating lease liabilities - 3,384 3,384 |
REVENUE RECOGNITION (Tables)
REVENUE RECOGNITION (Tables) | 3 Months Ended |
Sep. 29, 2019 | |
Revenue From Contract With Customer [Abstract] | |
Summary of Revenues from Contracts with Customers by Major Product Category and Reportable Segment | The following tables present the Company’s revenue from contracts with customers by major product category and reportable segment. Three Months Ended September 29, 2019 MasterCraft NauticStar Crest Total Major Product Categories: Boats and trailers $ 69,286 $ 17,834 $ 18,624 $ 105,744 Parts 3,432 160 181 3,773 Other revenue 195 1 76 272 Total $ 72,913 $ 17,995 $ 18,881 $ 109,789 Three Months Ended September 30, 2018 MasterCraft NauticStar Crest (a) Total Major Product Categories: Boats and trailers $ 72,376 $ 17,123 $ - $ 89,499 Parts 3,581 280 - 3,861 Other revenue 277 4 - 281 Total $ 76,234 $ 17,407 $ - $ 93,641 (a) Crest was acquired on October 1, 2018. |
INVENTORIES (Tables)
INVENTORIES (Tables) | 3 Months Ended |
Sep. 29, 2019 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | Inventories consisted of the following: September 29, 2019 June 30, 2019 Raw materials and supplies $ 21,357 $ 20,034 Work in process 4,931 4,571 Finished goods 9,936 7,207 Obsolescence reserve (1,310 ) (1,152 ) Total inventories $ 34,914 $ 30,660 |
ACCRUED EXPENSES AND OTHER CU_2
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Tables) | 3 Months Ended |
Sep. 29, 2019 | |
Accrued Liabilities And Other Liabilities [Abstract] | |
Schedule of Accrued Expenses and Other Current Liabilities | Accrued expenses and other current liabilities consisted of the following: September 29, 2019 June 30, 2019 Warranty $ 17,690 $ 17,205 Dealer incentives 7,622 12,623 Current lease liabilities 4,457 — Compensation and related accruals 2,456 3,494 Floor plan interest 3,328 2,060 Inventory repurchase contingent obligation 1,259 1,936 Self-insurance 716 606 Debt interest 743 405 Other 3,310 3,092 Total accrued expenses and other current liabilities $ 41,581 $ 41,421 |
Schedule of Activity Related to Warranty Liabilities Recorded in Accrued Expenses | The following activity related to warranty liabilities was recorded in accrued expenses during the three months ended September 29, 2019 and September 30, 2018: September 29, 2019 September 30, 2018 Balance at the beginning of the period $ 17,205 $ 13,077 Provisions 1,999 1,769 Payments made (2,302 ) (2,249 ) Aggregate changes for preexisting warranties 788 857 Balance at the end of the period $ 17,690 $ 13,454 |
GOODWILL AND OTHER INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 3 Months Ended |
Sep. 29, 2019 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Schedule of Carrying Amounts of Goodwill | The carrying amounts of goodwill as of September 29, 2019 and June 30, 2019, attributable to each of the Company’s reportable segments, were as follows: Gross Amount Accumulated Impairment Losses Total MasterCraft $ 29,593 $ - $ 29,593 NauticStar 36,199 (28,000 ) 8,199 Crest 36,238 - 36,238 Total $ 102,030 $ (28,000 ) $ 74,030 |
Schedule of Carrying Amount of Other Intangible Assets, Net | The following table shows changes in the carrying amount of Other intangible assets, net. September 29, 2019 June 30, 2019 Gross Amount Accumulated Amortization / Impairment Other intangible assets, net Gross Amount Accumulated Amortization / Impairment Other intangible assets, net Amortized intangible assets Dealer networks $ 39,500 $ (6,885 ) $ 32,615 $ 39,500 $ (5,909 ) $ 33,591 Software 245 (49 ) 196 245 (37 ) 208 39,745 (6,934 ) 32,811 39,745 (5,946 ) 33,799 Unamortized intangible assets Trade names 49,000 (3,000 ) 46,000 49,000 (3,000 ) 46,000 Total intangible assets $ 88,745 $ (9,934 ) $ 78,811 $ 88,745 $ (8,946 ) $ 79,799 |
LONG-TERM DEBT (Tables)
LONG-TERM DEBT (Tables) | 3 Months Ended |
Sep. 29, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Long-Term Debt Outstanding | Long-term debt outstanding is as follows: September 29, 2019 June 30, 2019 Senior secured term loans $ 115,349 $ 115,349 Debt issuance costs on term loans (1,494 ) (1,608 ) Total debt 113,855 113,741 Less current portion of long-term debt 9,167 9,167 Less current portion of debt issuance costs on term loans (433 ) (442 ) Long-term debt — less current portion $ 105,121 $ 105,016 |
LEASES (Tables)
LEASES (Tables) | 3 Months Ended |
Sep. 29, 2019 | |
Leases [Abstract] | |
Summary of Company's Lease Assets and Lease Liabilities | A summary of the Company's lease assets and lease liabilities as of September 29, 2019 is as follows: Classification September 29, 2019 Lease Assets Finance lease assets Finance lease assets $ 4,115 Operating lease assets Operating lease assets 942 Total lease assets $ 5,057 Lease Liabilities Current finance lease liabilities Accrued expenses and other current liabilities $ 4,128 Current operating lease liabilities Accrued expenses and other current liabilities 329 Non-current operating lease liabilities Operating lease liabilities 613 Total lease liabilities $ 5,070 |
Summary of Company's Total Lease Cost | A summary of the Company's total lease cost for the three months ended September 29, 2019 is as follows: Classification September 29, 2019 Operating lease cost Cost of sales $ 198 General and administrative 6 Total lease cost (a) $ 204 (a) Includes total variable lease cost and total short-term lease cost, both of which were immaterial. |
Summary of Company's Maturity Analysis of Operating Lease Liabilities | The Company's maturity analysis of its operating lease liabilities as of September 29, 2019 is as follows: Remainder of 2020 $ 312 2021 380 2022 303 2023 72 2024 1 Total lease payments 1,068 Less: Interest (76 ) Present value of lease payments $ 992 |
Future Minimum Rental Payments Under All Non-cancelable Operating Leases | Future minimum rental payments under all non-cancelable operating leases with remaining lease terms in excess of one year at June 30, 2019, were as follows: 2020 $ 703 2021 690 2022 628 2023 402 2024 402 Thereafter 1,806 Total $ 4,631 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 3 Months Ended |
Sep. 29, 2019 | |
Earnings Per Share [Abstract] | |
Factors Used in Earnings Per Share Computation | The following table sets forth the computation of the Company’s earnings per share: Three Months Ended September 29, 2019 September 30, 2018 Net income $ 8,623 $ 8,465 Weighted average common shares — basic 18,723,845 18,646,039 Dilutive effect of assumed exercises of stock options 27,474 52,353 Dilutive effect of assumed restricted share awards/units 19,437 70,372 Weighted average outstanding shares — diluted 18,770,756 18,768,764 Basic earnings per share $ 0.46 $ 0.45 Diluted earnings per share $ 0.46 $ 0.45 |
SHARE-BASED COMPENSATION (Table
SHARE-BASED COMPENSATION (Tables) | 3 Months Ended |
Sep. 29, 2019 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Components of Share-based Compensation Expense by Award Type | The following table presents the components of share-based compensation expense by award type. September 29, 2019 September 30, 2018 Stock options $ 9 $ 54 Restricted stock awards 252 202 Performance stock units 251 128 Share-based compensation expense $ 512 $ 384 |
Summary of Status of Nonvested Restricted Stock Awards and Changes | The following table summarizes the status of nonvested RSAs as of September 29, 2019, and changes during the three months then ended. Average Nonvested Grant-Date Restricted Fair Value Shares (per share) Nonvested at June 30, 2019 53,804 $ 22.94 Granted 79,894 $ 18.03 Vested (23,173 ) $ 20.39 Forfeited - $ - Nonvested at September 29, 2019 110,525 $ 19.93 |
Summary of Status of Nonvested Performance Stock Units and Changes | The following table summarizes the status of nonvested PSUs as of September 29, 2019, and changes during the three months then ended. Average Nonvested Grant-Date Performance Fair Value Stock Units (per share) Nonvested at June 30, 2019 50,621 $ 23.34 Granted 53,485 18.47 Vested - - Forfeited - - Nonvested at September 29, 2019 104,106 20.84 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 3 Months Ended |
Sep. 29, 2019 | |
Segment Reporting [Abstract] | |
Schedule of Operating Information for Reportable Segments | The following tables present financial information for the Company’s reportable segments for the three months ended September 29, 2019 and September 30, 2018 and the Company’s financial position at September 29, 2019 and June 30, 2019. Three Months Ended September 29, 2019 MasterCraft NauticStar Crest Consolidated Net sales $ 72,913 $ 17,995 $ 18,881 $ 109,789 Operating income 12,207 27 463 12,697 Depreciation and amortization 1,020 801 550 2,371 Purchases of property and equipment 2,733 819 776 4,328 Three Months Ended September 30, 2018 MasterCraft NauticStar Crest (a) Consolidated Net sales $ 76,234 $ 17,407 $ — $ 93,641 Operating income 11,530 81 — 11,611 Depreciation and amortization 805 630 — 1,435 Purchases of property and equipment 2,735 690 — 3,425 (a) Crest was acquired on October 1, 2018. As of September 29, 2019 As of June 30, 2019 Assets: MasterCraft $ 279,370 $ 273,046 NauticStar 52,911 52,761 Crest 87,966 85,979 Eliminations (163,013 ) (163,013 ) Total assets $ 257,234 $ 248,773 |
ORGANIZATION, BASIS OF PRESEN_4
ORGANIZATION, BASIS OF PRESENTATION, AND SIGNIFICANT ACCOUNTING POLICIES - Additional Information (Details) | 3 Months Ended |
Sep. 29, 2019segment | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Number of reportable segments | 3 |
Lessee operating lease existence of option to extend [true false] | true |
Lessee, operating Lease, existence of option to terminate [true false] | true |
Lessee, operating Lease, option to extend or terminate | The Company's lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. |
ORGANIZATION, BASIS OF PRESEN_5
ORGANIZATION, BASIS OF PRESENTATION, AND SIGNIFICANT ACCOUNTING POLICIES - Summary of Cumulative Effect of Changes Made to Company's Consolidated Balance Sheets (Details) - USD ($) $ in Thousands | Sep. 29, 2019 | Jul. 01, 2019 | Jun. 30, 2019 |
ASSETS | |||
Operating lease assets (Note 8) | $ 942 | $ 3,931 | |
CURRENT LIABILITIES: | |||
Accrued expenses and other current liabilities (Note 5) | 41,581 | 41,968 | $ 41,421 |
Long-term liabilities | |||
Operating lease liabilities (Note 8) | $ 613 | 3,384 | |
ASC 842 | |||
CURRENT LIABILITIES: | |||
Accrued expenses and other current liabilities (Note 5) | $ 41,421 | ||
ASC 842 | Adjustments Due to ASC 842 | |||
ASSETS | |||
Operating lease assets (Note 8) | 3,931 | ||
CURRENT LIABILITIES: | |||
Accrued expenses and other current liabilities (Note 5) | 547 | ||
Long-term liabilities | |||
Operating lease liabilities (Note 8) | $ 3,384 |
REVENUE RECOGNITION - Summary o
REVENUE RECOGNITION - Summary of Revenues From Contracts with Customers by Major Product Category and Reportable Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 29, 2019 | Sep. 30, 2018 | |
Revenue by Categories | ||
Revenue | $ 109,789 | $ 93,641 |
Boats and trailers | ||
Revenue by Categories | ||
Revenue | 105,744 | 89,499 |
Parts | ||
Revenue by Categories | ||
Revenue | 3,773 | 3,861 |
Other | ||
Revenue by Categories | ||
Revenue | 272 | 281 |
MasterCraft | ||
Revenue by Categories | ||
Revenue | 72,913 | 76,234 |
MasterCraft | Boats and trailers | ||
Revenue by Categories | ||
Revenue | 69,286 | 72,376 |
MasterCraft | Parts | ||
Revenue by Categories | ||
Revenue | 3,432 | 3,581 |
MasterCraft | Other | ||
Revenue by Categories | ||
Revenue | 195 | 277 |
NauticStar | ||
Revenue by Categories | ||
Revenue | 17,995 | 17,407 |
NauticStar | Boats and trailers | ||
Revenue by Categories | ||
Revenue | 17,834 | 17,123 |
NauticStar | Parts | ||
Revenue by Categories | ||
Revenue | 160 | 280 |
NauticStar | Other | ||
Revenue by Categories | ||
Revenue | 1 | $ 4 |
Crest | ||
Revenue by Categories | ||
Revenue | 18,881 | |
Crest | Boats and trailers | ||
Revenue by Categories | ||
Revenue | 18,624 | |
Crest | Parts | ||
Revenue by Categories | ||
Revenue | 181 | |
Crest | Other | ||
Revenue by Categories | ||
Revenue | $ 76 |
REVENUE RECOGNITION - Additiona
REVENUE RECOGNITION - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Sep. 29, 2019 | Jun. 30, 2019 | |
Contract liabilities | ||
Customer contract liabilities | $ 0.8 | |
Contract liabilities with customer, revenue recognized during the period | $ 0.7 | |
Accrued Expenses and Other Current Liabilities | ||
Contract liabilities | ||
Customer contract liabilities | $ 1.1 |
RELATED PARTY TRANSACTIONS - Ad
RELATED PARTY TRANSACTIONS - Additional Information (Details) - Crest $ in Millions | Oct. 24, 2019USD ($) | Sep. 29, 2019USD ($)item | Jun. 30, 2019USD ($) |
Lease Agreement | |||
Lease term | 10 years | ||
Lease expiration date | Sep. 30, 2028 | ||
Number of consecutive lease renewal available | item | 4 | ||
Term of renewal | 5 years | ||
Annual rent, first five years | $ 0.3 | ||
Annual rent, remaining five years | 0.4 | ||
Lease expense | 0.1 | ||
Parts Supplier | |||
Lease Agreement | |||
Product purchases | 0.8 | ||
Outstanding balance due | $ 0.2 | $ 0.1 | |
Subsequent Event | |||
Lease Agreement | |||
Facility purchased under Purchase Option | $ 4.1 |
INVENTORIES - Schedule of Inven
INVENTORIES - Schedule of Inventories (Details) - USD ($) $ in Thousands | Sep. 29, 2019 | Jun. 30, 2019 |
Inventory Disclosure [Abstract] | ||
Raw materials and supplies | $ 21,357 | $ 20,034 |
Work in process | 4,931 | 4,571 |
Finished goods | 9,936 | 7,207 |
Obsolescence reserve | (1,310) | (1,152) |
Total inventories | $ 34,914 | $ 30,660 |
ACCRUED EXPENSES AND OTHER CU_3
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES - Schedule of Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands | Sep. 29, 2019 | Jul. 01, 2019 | Jun. 30, 2019 |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | |||
Warranty | $ 17,690 | $ 17,205 | |
Dealer incentives | 7,622 | 12,623 | |
Current lease liabilities | 4,457 | ||
Compensation and related accruals | 2,456 | 3,494 | |
Floor plan interest | 3,328 | 2,060 | |
Inventory repurchase contingent obligation | 1,259 | 1,936 | |
Self-insurance | 716 | 606 | |
Debt interest | 743 | 405 | |
Other | 3,310 | 3,092 | |
Total accrued expenses and other current liabilities | $ 41,581 | $ 41,968 | $ 41,421 |
ACCRUED EXPENSES AND OTHER CU_4
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES - Schedule of Activity Related to Warranty Liabilities Recorded in Accrued Expenses (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 29, 2019 | Sep. 30, 2018 | |
Roll forward of the accrued warranty liability | ||
Beginning balance | $ 17,205 | $ 13,077 |
Provisions | 1,999 | 1,769 |
Payments made | (2,302) | (2,249) |
Aggregate changes for preexisting warranties | 788 | 857 |
Ending balance | $ 17,690 | $ 13,454 |
GOODWILL AND OTHER INTANGIBLE_3
GOODWILL AND OTHER INTANGIBLE ASSETS - Schedule of Carrying Amounts of Goodwill (Details) - USD ($) $ in Thousands | Sep. 29, 2019 | Jun. 30, 2019 |
Goodwill [Line Items] | ||
Gross Amount | $ 102,030 | |
Accumulated Impairment Losses | (28,000) | |
Total | 74,030 | $ 74,030 |
MasterCraft | ||
Goodwill [Line Items] | ||
Gross Amount | 29,593 | |
Total | 29,593 | |
NauticStar | ||
Goodwill [Line Items] | ||
Gross Amount | 36,199 | |
Accumulated Impairment Losses | (28,000) | |
Total | 8,199 | |
Crest | ||
Goodwill [Line Items] | ||
Gross Amount | 36,238 | |
Total | $ 36,238 |
GOODWILL AND OTHER INTANGIBLE_4
GOODWILL AND OTHER INTANGIBLE ASSETS - Schedule of Carrying Amount of Other Intangible Assets, Net (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 29, 2019 | Jun. 30, 2019 | |
Finite Lived And Indefinite Lived Intangible Assets By Major Class [Line Items] | ||
Amortized intangible assets, Gross Amount | $ 39,745 | $ 39,745 |
Amortized intangible assets, Accumulated Amortization / Impairment | (6,934) | (5,946) |
Amortized intangible assets, Other intangible assets, net | 32,811 | 33,799 |
Gross Amount | 88,745 | 88,745 |
Accumulated Amortization / Impairment | (9,934) | (8,946) |
Other intangible assets, net | 78,811 | 79,799 |
Dealer network | ||
Finite Lived And Indefinite Lived Intangible Assets By Major Class [Line Items] | ||
Amortized intangible assets, Gross Amount | 39,500 | 39,500 |
Amortized intangible assets, Accumulated Amortization / Impairment | (6,885) | (5,909) |
Amortized intangible assets, Other intangible assets, net | 32,615 | 33,591 |
Software | ||
Finite Lived And Indefinite Lived Intangible Assets By Major Class [Line Items] | ||
Amortized intangible assets, Gross Amount | 245 | 245 |
Amortized intangible assets, Accumulated Amortization / Impairment | (49) | (37) |
Amortized intangible assets, Other intangible assets, net | 196 | 208 |
Trade names | ||
Finite Lived And Indefinite Lived Intangible Assets By Major Class [Line Items] | ||
Unamortized intangible assets, Gross Amount | 49,000 | 49,000 |
Unamortized intangible assets, Accumulated Amortization / Impairment | (3,000) | (3,000) |
Unamortized intangible assets, Other intangible assets, net | $ 46,000 | $ 46,000 |
GOODWILL AND OTHER INTANGIBLE_5
GOODWILL AND OTHER INTANGIBLE ASSETS - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Sep. 29, 2019 | Jun. 30, 2019 | Sep. 30, 2018 | |
Goodwill [Line Items] | |||
Amortization of intangible assets | $ 1,000 | $ 500 | |
Estimated amortization expense June 30,2020 | 4,000 | ||
Trade names | |||
Goodwill [Line Items] | |||
Impairment | $ 3,000 | $ 3,000 | |
NauticStar | |||
Goodwill [Line Items] | |||
Goodwill impairment charge | 28,000 | ||
NauticStar | Trade names | |||
Goodwill [Line Items] | |||
Impairment | $ 3,000 |
LONG-TERM DEBT - Schedule of Lo
LONG-TERM DEBT - Schedule of Long-Term Debt Outstanding (Details) - USD ($) $ in Thousands | Sep. 29, 2019 | Jun. 30, 2019 |
Long-term debt | ||
Total debt | $ 113,855 | $ 113,741 |
Less current portion of long-term debt | 9,167 | 9,167 |
Long-term debt — less current portion | 105,121 | 105,016 |
Senior Secured Term Loans | ||
Long-term debt | ||
Long-term debt | 115,349 | 115,349 |
Debt issuance costs on term loans | (1,494) | (1,608) |
Less current portion of debt issuance costs on term loans | $ (433) | $ (442) |
LONG-TERM DEBT - Senior Secured
LONG-TERM DEBT - Senior Secured Credit Facility - Additional Information (Details) - USD ($) $ in Thousands | Oct. 01, 2018 | Sep. 29, 2019 | Jun. 30, 2019 |
Long-term debt | |||
Unamortized debt issuance costs | $ 424 | $ 451 | |
Revolving Credit Facility | |||
Long-term debt | |||
Outstanding borrowings | 0 | ||
Net availability under facility | 35,000 | ||
Unamortized debt issuance costs | 400 | 500 | |
Senior Secured Term Loans | |||
Long-term debt | |||
Unamortized debt issuance costs | $ 1,500 | $ 1,600 | |
Fourth Amended Credit Agreement | |||
Long-term debt | |||
Maximum borrowing capacity | $ 190,000 | ||
Expiration date | Oct. 1, 2023 | ||
Fourth Amended Credit Agreement | Prime Rate | |||
Long-term debt | |||
Effective interest rate | 0.75% | ||
Fourth Amended Credit Agreement | Prime Rate | Minimum | |||
Long-term debt | |||
Variable margin rate | 0.50% | ||
Fourth Amended Credit Agreement | Prime Rate | Maximum | |||
Long-term debt | |||
Variable margin rate | 1.50% | ||
Fourth Amended Credit Agreement | LIBOR | |||
Long-term debt | |||
Effective interest rate | 1.75% | ||
Fourth Amended Credit Agreement | LIBOR | Minimum | |||
Long-term debt | |||
Variable margin rate | 1.50% | ||
Fourth Amended Credit Agreement | LIBOR | Maximum | |||
Long-term debt | |||
Variable margin rate | 2.50% | ||
Fourth Amended Credit Agreement | Term Loan One | |||
Long-term debt | |||
Loan commitment | $ 75,000 | ||
Fourth Amended Credit Agreement | Term Loan Two | |||
Long-term debt | |||
Loan commitment | 80,000 | ||
Fourth Amended Credit Agreement | Revolving Credit Facility | |||
Long-term debt | |||
Maximum borrowing capacity | $ 35,000 |
LEASES - Additional Information
LEASES - Additional Information (Details) - USD ($) $ in Millions | Oct. 24, 2019 | Sep. 29, 2019 |
Lessee Lease Description [Line Items] | ||
Lessee operating lease existence of option to extend [true false] | true | |
Lessee operating lease option to extend | Certain leases include one or more options to renew, with renewal terms that can extend the lease term from one to five years or more. | |
Reclassification from operating lease assets to finance lease assets due to exercise of purchase option | $ 2.8 | |
Reclassification from operating lease liabilities to finance lease liabilities due to exercise of purchase option | 2.8 | |
Additional finance lease assets due to exercise of purchase option | 1.3 | |
Additional finance lease liabilities due to exercise of purchase option | $ 1.3 | |
Weighted-average discount rate, operating lease | 4.73% | |
Weighted-average remaining lease term, operating lease | 2 years 9 months 18 days | |
Total operating cash flows from operating leases | $ 0.2 | |
Crest Facility | Subsequent Event | ||
Lessee Lease Description [Line Items] | ||
Purchase of facility | $ 4.1 | |
Minimum | ||
Lessee Lease Description [Line Items] | ||
Term of renewal | 1 year | |
Maximum | ||
Lessee Lease Description [Line Items] | ||
Term of renewal | 5 years |
LEASES - Summary of Company's L
LEASES - Summary of Company's Lease Assets and Lease Liabilities (Details) - USD ($) $ in Thousands | Sep. 29, 2019 | Jul. 01, 2019 |
Lease Assets | ||
Finance lease assets | $ 4,115 | |
Operating lease assets | 942 | $ 3,931 |
Total lease assets | 5,057 | |
Lease Liabilities | ||
Current finance lease liabilities | $ 4,128 | |
Finance Lease, Liability, Current, Statement of Financial Position [Extensible List] | mcft:AccruedExpensesAndOtherLiabilitiesCurrent | |
Current operating lease liabilities | $ 329 | |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | mcft:AccruedExpensesAndOtherLiabilitiesCurrent | |
Non-current operating lease liabilities | $ 613 | $ 3,384 |
Total lease liabilities | $ 5,070 |
LEASES - Summary of Company's T
LEASES - Summary of Company's Total Lease Cost (Details) $ in Thousands | 3 Months Ended |
Sep. 29, 2019USD ($) | |
Lessee Lease Description [Line Items] | |
Total lease cost | $ 204 |
Cost Of Sales | |
Lessee Lease Description [Line Items] | |
Operating lease cost | 198 |
General And Administrative | |
Lessee Lease Description [Line Items] | |
Operating lease cost | $ 6 |
LEASES - Summary of Company's M
LEASES - Summary of Company's Maturity Analysis of Operating Lease Liabilities (Details) $ in Thousands | Sep. 29, 2019USD ($) |
Leases [Abstract] | |
Remainder of 2020 | $ 312 |
2021 | 380 |
2022 | 303 |
2023 | 72 |
2024 | 1 |
Total lease payments | 1,068 |
Less: Interest | (76) |
Present value of lease payments | $ 992 |
LEASES - Future Minimum Rental
LEASES - Future Minimum Rental Payments Under All Non-cancelable Operating Leases (Details) $ in Thousands | Jun. 30, 2019USD ($) |
Future minimum rental payments | |
2020 | $ 703 |
2021 | 690 |
2022 | 628 |
2023 | 402 |
2024 | 402 |
Thereafter | 1,806 |
Total | $ 4,631 |
INCOME TAXES - Additional Infor
INCOME TAXES - Additional Information (Details) | 3 Months Ended | |
Sep. 29, 2019 | Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | ||
Effective tax rate | 24.00% | 20.80% |
Statutory income tax rate | 21.00% |
EARNINGS PER SHARE - Factors Us
EARNINGS PER SHARE - Factors Used in Earnings Per Share Computation (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Sep. 29, 2019 | Sep. 30, 2018 | |
Earnings Per Share Basic [Line Items] | ||
Net income | $ 8,623 | $ 8,465 |
Weighted average common shares — basic | 18,723,845 | 18,646,039 |
Weighted average outstanding shares — diluted | 18,770,756 | 18,768,764 |
Basic earnings per share | $ 0.46 | $ 0.45 |
Diluted earnings per share | $ 0.46 | $ 0.45 |
Stock options | ||
Earnings Per Share Basic [Line Items] | ||
Dilutive effect of assumed exercises of stock options and restricted share awards\units | 27,474 | 52,353 |
Restricted stock awards | ||
Earnings Per Share Basic [Line Items] | ||
Dilutive effect of assumed exercises of stock options and restricted share awards\units | 19,437 | 70,372 |
EARNINGS PER SHARE - Additional
EARNINGS PER SHARE - Additional Information (Details) - shares | 3 Months Ended | |
Sep. 29, 2019 | Sep. 30, 2018 | |
Restricted stock awards | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Anti-dilutive securities excluded from computation of earning per share | 56,108 | 0 |
Performance stock units | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Anti-dilutive securities excluded from computation of earning per share | 42,919 | 0 |
SHARE-BASED COMPENSATION - Comp
SHARE-BASED COMPENSATION - Components of Share-based Compensation Expense by Award Type (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 29, 2019 | Sep. 30, 2018 | |
Stock-Based Compensation | ||
Share-based compensation expense | $ 512 | $ 384 |
Stock options | ||
Stock-Based Compensation | ||
Share-based compensation expense | 9 | 54 |
Restricted stock awards | ||
Stock-Based Compensation | ||
Share-based compensation expense | 252 | 202 |
Performance stock units | ||
Stock-Based Compensation | ||
Share-based compensation expense | $ 251 | $ 128 |
SHARE-BASED COMPENSATION - Rest
SHARE-BASED COMPENSATION - Restricted Stock Awards - Additional Information (Details) - Restricted stock awards $ / shares in Units, $ in Millions | 3 Months Ended |
Sep. 29, 2019USD ($)$ / sharesshares | |
Stock-Based Compensation | |
Stock awards granted | 79,894 |
Weighted average grant date value | $ / shares | $ 18.03 |
Unrecognized compensation expense | $ | $ 2 |
Weighted average period | 2 years 1 month 6 days |
Non-executive directors, officers and certain other key employees | |
Stock-Based Compensation | |
Stock awards granted | 79,894 |
Officers and certain other key employees | |
Stock-Based Compensation | |
Vesting period (in years) | 3 years |
Non-executive directors | |
Stock-Based Compensation | |
Vesting period (in years) | 1 year |
SHARE-BASED COMPENSATION - Summ
SHARE-BASED COMPENSATION - Summary of Status of Nonvested Restricted Stock Awards and Changes (Details) - Restricted stock awards | 3 Months Ended |
Sep. 29, 2019$ / sharesshares | |
Nonvested Restricted Shares | |
Nonvested at beginning of period | shares | 53,804 |
Granted | shares | 79,894 |
Vested | shares | (23,173) |
Nonvested at end of period | shares | 110,525 |
Average Grant-Date Fair Value (Per share) | |
Nonvested at beginning of period | $ / shares | $ 22.94 |
Granted | $ / shares | 18.03 |
Vested | $ / shares | 20.39 |
Nonvested at end of period | $ / shares | $ 19.93 |
SHARE-BASED COMPENSATION - Perf
SHARE-BASED COMPENSATION - Performance Stock Units - Additional Information (Details) - Performance stock units $ in Millions | 3 Months Ended |
Sep. 29, 2019USD ($) | |
Stock-Based Compensation | |
Unrecognized compensation expense | $ 1.6 |
Weighted average period | 2 years 3 months 18 days |
Executive officers and certain other key employees | |
Stock-Based Compensation | |
Vesting period (in years) | 3 years |
SHARE-BASED COMPENSATION - Su_2
SHARE-BASED COMPENSATION - Summary of Status of Nonvested Performance Stock Units and Changes (Details) - Performance stock units | 3 Months Ended |
Sep. 29, 2019$ / sharesshares | |
Nonvested Performance Stock Units | |
Nonvested at beginning of period | shares | 50,621 |
Granted | shares | 53,485 |
Nonvested at end of period | shares | 104,106 |
Average Grant-Date Fair Value (Per share) | |
Nonvested at beginning of period | $ / shares | $ 23.34 |
Granted | $ / shares | 18.47 |
Nonvested at end of period | $ / shares | $ 20.84 |
SEGMENT INFORMATION - Additiona
SEGMENT INFORMATION - Additional Information (Details) | 3 Months Ended |
Sep. 29, 2019segment | |
Segment Reporting [Abstract] | |
Number of operating segments | 3 |
Number of reportable segments | 3 |
SEGMENT INFORMATION - Schedule
SEGMENT INFORMATION - Schedule of Operating Information for Reportable Segments (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Sep. 29, 2019 | Sep. 30, 2018 | Jun. 30, 2019 | |
Segment Reporting Information [Line Items] | |||
Net sales | $ 109,789 | $ 93,641 | |
Operating income | 12,697 | 11,611 | |
Depreciation and amortization | 2,371 | 1,435 | |
Purchases of property and equipment | 4,328 | 3,425 | |
Total assets | 257,234 | $ 248,773 | |
Eliminations | |||
Segment Reporting Information [Line Items] | |||
Total assets | (163,013) | (163,013) | |
MasterCraft | |||
Segment Reporting Information [Line Items] | |||
Net sales | 72,913 | 76,234 | |
Operating income | 12,207 | 11,530 | |
Depreciation and amortization | 1,020 | 805 | |
Purchases of property and equipment | 2,733 | 2,735 | |
MasterCraft | Operating Segments | |||
Segment Reporting Information [Line Items] | |||
Total assets | 279,370 | 273,046 | |
NauticStar | |||
Segment Reporting Information [Line Items] | |||
Net sales | 17,995 | 17,407 | |
Operating income | 27 | 81 | |
Depreciation and amortization | 801 | 630 | |
Purchases of property and equipment | 819 | $ 690 | |
NauticStar | Operating Segments | |||
Segment Reporting Information [Line Items] | |||
Total assets | 52,911 | 52,761 | |
Crest | |||
Segment Reporting Information [Line Items] | |||
Net sales | 18,881 | ||
Operating income | 463 | ||
Depreciation and amortization | 550 | ||
Purchases of property and equipment | 776 | ||
Crest | Operating Segments | |||
Segment Reporting Information [Line Items] | |||
Total assets | $ 87,966 | $ 85,979 |