Document and Entity Information
Document and Entity Information - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2021 | Aug. 30, 2021 | Jan. 03, 2021 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Jun. 30, 2021 | ||
Document Fiscal Year Focus | 2021 | ||
Document Fiscal Period Focus | FY | ||
Entity Registrant Name | MASTERCRAFT BOAT HOLDINGS, INC. | ||
Entity Central Index Key | 0001638290 | ||
Title of 12(b) Security | Common Stock | ||
Trading Symbol | MCFT | ||
Security Exchange Name | NASDAQ | ||
Current Fiscal Year End Date | --06-30 | ||
Entity Current Reporting Status | Yes | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Interactive Data Current | Yes | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Filer Category | Accelerated Filer | ||
Entity Public Float | $ 461,700,000 | ||
Entity Common Stock, Shares Outstanding | 19,022,668 | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Entity Incorporation, State or Country Code | DE | ||
Entity File Number | 001-37502 | ||
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 Annual Report | true | ||
Document Transition Report | false | ||
Documents Incorporated by Reference | Portions of the proxy statement for the 2021 annual meeting of stockholders, which will be filed no later than 120 days after the close of the registrant’s fiscal year ended June 30, 2021, are incorporated by reference into Part III of this report. |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2021 | Jun. 30, 2020 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 39,252 | $ 16,319 |
Accounts receivable, net of allowance of $115 and $247, respectively | 12,080 | 6,145 |
Income tax receivable | 355 | 4,924 |
Inventories, net (Note 4) | 53,481 | 25,636 |
Prepaid expenses and other current assets | 5,059 | 3,719 |
Total current assets | 110,227 | 56,743 |
Property, plant and equipment, net (Note 5) | 60,495 | 40,481 |
Goodwill (Note 6) | 29,593 | 29,593 |
Other intangible assets, net (Note 6) | 59,899 | 63,849 |
Deferred income taxes (Note 9) | 15,130 | 16,080 |
Deferred debt issuance costs, net | 507 | 425 |
Other long-term assets | 609 | 752 |
Total assets | 276,460 | 207,923 |
CURRENT LIABILITIES: | ||
Accounts payable | 23,861 | 10,510 |
Income tax payable | 726 | |
Accrued expenses and other current liabilities (Note 7) | 46,836 | 35,985 |
Current portion of long-term debt, net of unamortized debt issuance costs (Note 8) | 2,866 | 8,932 |
Total current liabilities | 74,289 | 55,427 |
Long term debt, net of unamortized debt issuance costs (Note 8) | 90,277 | 99,666 |
Unrecognized tax positions (Note 9) | 3,830 | 3,683 |
Other long-term liabilities | 276 | 277 |
Total liabilities | 168,672 | 159,053 |
COMMITMENTS AND CONTINGENCIES (Note 11) | ||
STOCKHOLDERS' EQUITY: | ||
Common stock, $.01 par value per share — authorized, 100,000,000 shares; issued and outstanding, 18,956,719 shares at June 30, 2021 and 18,871,637 shares at June 30, 2020 | 189 | 189 |
Additional paid-in capital | 118,930 | 116,182 |
Accumulated deficit | (11,331) | (67,501) |
Total stockholders' equity | 107,788 | 48,870 |
Total liabilities and stockholders' equity | $ 276,460 | $ 207,923 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2021 | Jun. 30, 2020 |
Statement Of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 115 | $ 247 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, authorized shares | 100,000,000 | 100,000,000 |
Common stock, issued shares | 18,956,719 | 18,871,637 |
Common stock, outstanding shares | 18,956,719 | 18,871,637 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | |
Income Statement [Abstract] | |||
NET SALES | $ 525,808 | $ 363,073 | $ 466,381 |
COST OF SALES | 395,837 | 287,717 | 353,254 |
GROSS PROFIT | 129,971 | 75,356 | 113,127 |
OPERATING EXPENSES: | |||
Selling and marketing | 13,021 | 15,981 | 17,670 |
General and administrative | 37,049 | 25,557 | 27,706 |
Amortization of other intangible assets | 3,948 | 3,948 | 3,492 |
Goodwill and other intangible asset impairment | 56,437 | 31,000 | |
Total operating expenses | 54,018 | 101,923 | 79,868 |
OPERATING INCOME (LOSS) | 75,953 | (26,567) | 33,259 |
OTHER EXPENSE: | |||
Interest expense | 3,392 | 5,045 | 6,513 |
Loss on extinguishment of debt | 733 | ||
INCOME (LOSS) BEFORE INCOME TAX EXPENSE (BENEFIT) | 71,828 | (31,612) | 26,746 |
INCOME TAX EXPENSE (BENEFIT) | 15,658 | (7,565) | 5,392 |
NET INCOME (LOSS) | $ 56,170 | $ (24,047) | $ 21,354 |
EARNINGS (LOSS) PER SHARE: | |||
Basic | $ 2.99 | $ (1.28) | $ 1.14 |
Diluted | $ 2.96 | $ (1.28) | $ 1.14 |
WEIGHTED AVERAGE SHARES USED FOR COMPUTATION OF: | |||
Basic earnings (loss) per share | 18,805,464 | 18,734,482 | 18,653,892 |
Diluted earnings (loss) per share | 18,951,521 | 18,734,482 | 18,768,207 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Cumulative Effect Period of Adoption Adjustment | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated DeficitCumulative Effect Period of Adoption Adjustment |
Balance, beginning at Jun. 30, 2018 | $ 52,522 | $ 187 | $ 114,052 | $ (61,717) | ||
Balance, beginning (in shares) at Jun. 30, 2018 | 18,682,338 | |||||
Share-based compensation activity | 1,531 | $ 1 | 1,530 | |||
Share-based compensation activity (shares) | 81,699 | |||||
Net income (loss) | 21,354 | 21,354 | ||||
Balance, ending at Jun. 30, 2019 | 72,316 | $ 188 | 115,582 | (43,454) | ||
Balance, ending (in shares) at Jun. 30, 2019 | 18,764,037 | |||||
Adoption of accounting standard | ASU 14-09 | $ (3,091) | $ (3,091) | ||||
Share-based compensation activity | 601 | $ 1 | 600 | |||
Share-based compensation activity (shares) | 107,600 | |||||
Net income (loss) | (24,047) | (24,047) | ||||
Balance, ending at Jun. 30, 2020 | 48,870 | $ 189 | 116,182 | (67,501) | ||
Balance, ending (in shares) at Jun. 30, 2020 | 18,871,637 | |||||
Adoption of accounting standard | (67,501) | |||||
Share-based compensation activity | 2,748 | 2,748 | ||||
Share-based compensation activity (shares) | 85,082 | |||||
Net income (loss) | 56,170 | 56,170 | ||||
Balance, ending at Jun. 30, 2021 | 107,788 | $ 189 | $ 118,930 | $ (11,331) | ||
Balance, ending (in shares) at Jun. 30, 2021 | 18,956,719 | |||||
Adoption of accounting standard | $ (11,331) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net income (loss) | $ 56,170 | $ (24,047) | $ 21,354 |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||
Depreciation and amortization | 11,630 | 10,527 | 7,787 |
Share-based compensation | 2,984 | 1,061 | 1,678 |
Deferred income taxes | 839 | (9,840) | (6,734) |
Unrecognized tax benefits | 147 | 788 | 913 |
Amortization of debt issuance costs | 570 | 572 | 553 |
Goodwill and other intangible asset impairment | 56,437 | 31,000 | |
Loss on extinguishment of debt | 733 | ||
Changes in certain operating assets and liabilities | |||
Accounts receivable | (5,919) | 6,291 | (1,835) |
Inventories | (28,561) | 4,752 | (449) |
Prepaid expenses and other current assets | (1,340) | 695 | (1,464) |
Income tax receivable | 5,406 | (3,973) | (951) |
Accounts payable | 13,404 | (6,874) | (2,995) |
Accrued expenses and other current liabilities | 12,191 | (5,527) | 6,609 |
Other, net | 284 | (664) | 420 |
Net cash provided by operating activities | 68,538 | 30,198 | 55,886 |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Payments for acquisitions, net of cash acquired | (81,729) | ||
Purchases of property, plant and equipment | (27,862) | (14,241) | (14,064) |
Proceeds from disposal of property, plant and equipment | 30 | 23 | 7 |
Net cash used in investing activities | (27,832) | (14,218) | (95,786) |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Proceeds from issuance of long-term debt | 60,000 | 80,000 | |
Principal payments on long-term debt | (99,993) | (15,357) | (41,306) |
Borrowings on revolving credit facility | 56,228 | 35,000 | |
Principal payments on revolving credit facility | (32,500) | (25,000) | |
Other, net | (1,508) | (130) | (877) |
Net cash (used in) provided by financing activities | (17,773) | (5,487) | 37,817 |
NET CHANGE IN CASH AND CASH EQUIVALENTS | 22,933 | 10,493 | (2,083) |
CASH AND CASH EQUIVALENTS — BEGINNING OF PERIOD | 16,319 | 5,826 | 7,909 |
CASH AND CASH EQUIVALENTS — END OF PERIOD | 39,252 | 16,319 | 5,826 |
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: | |||
Cash payments for interest | 2,852 | 4,841 | 5,526 |
Cash payments for income taxes | 9,170 | 6,146 | 12,437 |
SIGNIFICANT NON-CASH INVESTING AND FINANCING ACTIVITIES: | |||
Capital expenditures in accounts payable and accrued expenses | $ 265 | $ 318 | $ 908 |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Jun. 30, 2021 | |
Accounting Policies [Abstract] | |
SIGNIFICANT ACCOUNTING POLICIES | 1. 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.; MasterCraft International Sales Administration, Inc.; Aviara Boats, LLC; Nautic Star, LLC; NS Transport, LLC; and Crest Marine, LLC. The Company acquired NauticStar on October 2, 2017 and Crest on October 1, 2018. Holdings and its subsidiaries collectively are referred to herein as the “Company.” Basis of Presentation and Principles of Consolidation — 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 from the dates of their acquisitions. All significant intercompany accounts and transactions have been eliminated in consolidation. Holdings has no independent operations and no material assets, other than its wholly owned equity interests in its subsidiaries, as of June 30, 2021 and 2020, and no material liabilities. As of June 30, 2021 and 2020, Holdings had no material contingencies, long-term obligations, or guarantees other than a guarantee of its subsidiaries’ long-term debt (see Note 8). 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, revenues, 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 impairment of goodwill and indefinite-lived intangible assets, warranty liability, unrecognized tax positions, inventory repurchase contingent obligations, and impairment of long-lived assets and intangible assets subject to amortization. Actual results could differ from those estimates. Reclassifications — Certain historical amounts have been reclassified in the accompanying consolidated financial statements to conform to the current presentation. Revenue Recognition — The Company’s revenue is derived primarily from the sale of boats and trailers, marine parts, and accessories to its independent dealers. The Company recognizes revenue when obligations under the terms of a contract are satisfied and control over promised goods is transferred to a customer. For substantially all sales, this occurs when the product is released to the carrier responsible for transporting it to a customer. The Company typically receives payment within 5 business days of shipment. Revenue is measured as the amount of consideration it expects to receive in exchange for a product. The Company offers dealer incentives that include wholesale rebates, retail rebates and promotions, floor plan reimbursement or cash discounts, and other allowances that are recorded as reductions of revenues in Net sales in the consolidated statements of operations. The consideration recognized represents the amount specified in a contract with a customer, net of estimated incentives the Company reasonably expects to pay. The estimated liability and reduction in revenue for dealer incentives is recorded at the time of sale. Subsequent adjustments to incentive estimates are possible because actual results may differ from these estimates if conditions dictate the need to enhance or reduce sales promotion and incentive programs or if dealer achievement or other items vary from historical trends. Accrued dealer incentives are included in Accrued expenses and other current liabilities in the accompanying consolidated balance sheets. Rebates and Discounts Dealers earn wholesale rebates based on purchase volume commitments and achievement of certain performance metrics. The Company estimates the amount of wholesale rebates based on historical achievement, forecasted volume, and assumptions regarding dealer behavior. Rebates that apply to boats already in dealer inventory are referred to as retail rebates. The Company estimates the amount of retail rebates based on historical data for specific boat models adjusted for forecasted sales volume, product mix, dealer and consumer behavior, and assumptions concerning market conditions. The Company also utilizes various programs whereby it offers cash discounts or agrees to reimburse its dealers for certain floor plan interest costs incurred by dealers for limited periods of time, generally ranging up to nine months. Shipping and Handling Costs Shipping and handling costs includes those costs incurred to transport product to customers and internal handling costs, which relate to activities to prepare goods for shipment . The Company has elected to account for shipping and handling costs associated with outbound freight after control over a product has transferred to a customer as a fulfillment cost. The Company includes shipping and handling costs , including costs billed to customers , in Cost of sales in the consolidated statements of operations. Contract Liabilities A contract liability is created when customers prepay for goods prior to the Company transferring control of those goods to the customer. The contract liability is reduced once control of the goods is transferred to the customer. The difference between the opening and closing balances of the Company’s contract liabilities primarily results from the timing difference between the Company’s performance and the point at which it receives pre-payment from the customer. Other Revenue Recognition Matters Dealers generally have no right to return unsold boats. Occasionally, the Company may accept returns in limited circumstances and at the Company’s discretion under its warranty policy. 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 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 30 months. The Company accounts for these arrangements as guarantees and recognizes a liability based on the estimated fair value of the repurchase obligation. The estimated fair value takes into account our estimate of the loss we will incur upon resale of any repurchases. The Company accrues the estimated fair value of this obligation based on the age of inventory currently under floor plan financing and estimated credit quality of dealers holding the inventory. Inputs used to estimate this fair value include significant unobservable inputs that reflect the Company’s assumptions about the inputs that market participants would use and, therefore, this liability is classified within Level 3 of the fair value hierarchy. The Company has excluded sales and other taxes assessed by a governmental authority in connection with revenue-producing activities from the determination of the transaction price for all contracts. The Company has not adjusted Net sales for the effects of a significant financing component because the period between the transfer of the promised goods and the customer's payment is expected to be one year or less. 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 carries its accounts receivable at face value, net of an allowance for doubtful accounts, which the company records on a regular basis based upon known bad debt risks and past loss history, customer payment practices and economic conditions. Actual collection experience may differ from the current estimate of net receivables. A change to the allowance for doubtful accounts may be required if a future event or other change in circumstances results in a change in the estimate of the ultimate collectability of a specific account. Amounts recorded as bad debt expense, write-offs, and recoveries were not material for the years ended June 30, 2021, 2020, and 2019. 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 may at times exceed federally insured amounts. The Company had no cash equivalents at June 30, 2021 and 2020. 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. Supplier Concentrations 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. The Company is dependent on third-party equipment manufacturers, distributors, and dealers for certain parts and materials utilized in the manufacturing process. During the years ended June 30, 2021, 2020, and 2019 the Company purchased all engines for its MasterCraft performance sport boats under a supply agreement with a single engines for its Crest boats under a supply agreement with a single vendor. Total purchases from this vendor were $23.6 million , $15.5 million , and $ 20.4 million for the years ended June 30, 202 1, 20 20 , and 2019, respectively . Inventories — Inventories are valued at the lower of cost or net realizable value and are shown net of an inventory allowance in the consolidated 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 inventory. Property, Plant, and Equipment — Property, plant, and equipment are recorded at historical cost less accumulated depreciation and are 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 - 7 years Goodwill and Other Intangible Assets — The Company does not amortize goodwill and other purchased intangible assets with indefinite lives. The Company’s intangible assets with finite lives consist primarily of dealer networks 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 6). 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. The Company has three reporting units, MasterCraft, NauticStar, and Crest, which each relate to an operating segment as described in Note 13. All of the Company’s goodwill assets relate to the MasterCraft reporting unit and all of the Company’s other intangible assets relate to each of the three reporting units. Goodwill Goodwill results from the excess of purchase price over the net identifiable assets of businesses acquired. The Company reviews goodwill for impairment annually, at its fiscal year-end annual impairment testing date, and whenever events or changes in circumstances indicate that the fair value of a reporting unit may be below its carrying value. As part of the annual test, the Company may perform a qualitative, rather than quantitative, assessment to determine whether the fair values of its reporting units are “more likely than not” to be greater than their carrying values. In performing this qualitative analysis, the Company considers various factors, including the effect of market or industry changes and the reporting units' actual results compared to projected results. If the fair value of a reporting unit does not meet the "more likely than not" criteria discussed above, the impairment test for goodwill is a quantitative test. This test involves comparing the fair value of the reporting unit with its carrying value. If the fair value exceeds the carrying value, goodwill is not considered impaired. If the carrying amount exceeds the fair value then the goodwill is considered impaired and an impairment loss is recognized in an amount by which the carrying value exceeds the reporting unit’s fair value, not to exceed the carrying amount of the goodwill allocated to that reporting unit. The Company calculates the fair value of its reporting units by considering both the income approach and market approach. The income approach calculates the fair value of the reporting unit using a discounted cash flow method. Internally forecasted future cash flows, which the Company believes reasonably approximate market participant assumptions, are discounted using a weighted average cost of capital (“Discount Rate”) developed for each reporting unit. The Discount Rate is developed using observable market inputs, as well as considering whether or not there is a measure of risk related to the specific reporting unit’s forecasted performance. Fair value under the market approach is determined for each unit by applying market multiples for comparable public companies to the unit’s financial results. The key judgements in these calculations are the assumptions used in determining the reporting unit’s forecasted future performance, including revenue growth and operating margins, as well as the perceived risk associated with those forecasts in determining the Discount Rate, along with selecting representative market multiples. The Company recognized no impairments related to goodwill for the year ended June 30, 2021. During the years ended June 30, 2020 and 2019, the Company performed quantitative impairment tests for all three reporting units and determined that goodwill attributable to the NauticStar and Crest reporting units was impaired. As a result, the Company recognized associated impairment charges during each of those fiscal years (see Note 6). Other Intangible Assets The Company's primary intangible assets other than goodwill are dealer networks and trade names acquired in business combinations. These intangible assets are initially valued using a methodology commensurate with the intended use of the asset. The dealer networks were valued using an income approach, which requires an estimate or forecast of the expected future cash flows from the dealer network through the application of the multi-period excess earnings approach. The fair value of trade names is measured using a relief-from-royalty approach, a variation of the income approach, which requires an estimate or forecast of the expected future cash flows. This method assumes the value of the trade name is the discounted cash flows of the amount that would be paid to third parties had the Company not owned the trade name and instead licensed the trade name from another company. The basis for future sales projections for these methods are based on internal revenue forecasts by reporting unit, which the Company believes represent reasonable market participant assumptions. The future cash flows are discounted using an applicable Discount Rate as well as any potential risk premium to reflect the inherent risk of holding a standalone intangible asset. The key judgements in these fair value calculations, as applicable, are: assumptions used in developing internal revenue growth and dealer expense forecasts, assumed dealer attrition rates, the selection of an appropriate royalty rate, as well as the perceived risk associated with those forecasts in determining the Discount Rate. The costs of amortizable intangible assets, including dealer networks, are recognized over their expected useful lives, approximately ten years for the dealer networks, using the straight-line method. 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. Intangible assets not subject to amortization are assessed for impairment at least annually and whenever events or changes in circumstances indicate that it is more likely than not that an asset may be impaired. As part of the annual test, the Company may perform a qualitative, rather than quantitative, assessment to determine whether each trade name intangible asset is “more likely than not” impaired. In performing this qualitative analysis, the Company considers various factors, including macroeconomic events, industry and market events and cost related events. If the “more likely than not” criteria is not met, the impairment test for indefinite-lived intangible assets consists of a comparison of the fair value of the intangible asset with its carrying amount. An impairment loss is recognized for the amount by which the carrying value exceeds the fair value of the asset. The Company recognized no impairments related to other intangible assets for the year ended June 30, 2021. During the years ended June 30, 2020 and 2019, the Company performed quantitative impairment tests for intangible assets and determined that trade names attributable to the NauticStar and Crest reporting units were impaired. As a result, the Company recognized associated impairment charges during each of those fiscal years (see Note 6). Long-Lived Assets Other than Intangible 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 incurred no such impairments during the years ended June 30, 2021, 2020, and 2019. Product Warranties — The Company offers warranties on the sale of certain products for periods of between one and five years. These warranties require us or our dealers to repair or replace defective products during the warranty period at no cost to the consumer. We estimate the costs that may be incurred under our basic limited warranty and record as a liability the amount of such costs at the time the product revenue is recognized. Factors that affect our warranty liability include the number of units sold, historical and anticipated rates of warranty claims, and cost per claim. We periodically assess the adequacy of the recorded warranty liabilities and adjust the amounts as actual claims are determined or as changes in the obligations become reasonably estimable. We also adjust our liability for specific warranty matters when they become known, and the exposure can be estimated. Future warranty claims may differ from our estimate of the warranty liability, which could lead to changes in the Company’s warranty liability in future periods. 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. Research and Development — Research and development expenditures are expensed as incurred. Research and development expense for the years ended June 30, 2021, 2020, and 2019 was $6.8 million, $5.2 million, and $5.6 million, 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 for these matters. Losses are accrued based on 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 Debt Issuance 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 years ended June 30, 2021, 2020, and 2019 the Company incurred deferred financing costs of $0.6 million, $0.3 million, and $0.7 million, respectively. For the years ended June 30, 2021, 2020, and 2019, the Company recorded related amortization expense of $0.6 million for each year. Additionally, for the year ended June 30, 2021, the Company recognized a loss on early extinguishment of debt of $0.7 million related to the debt refinancing in fiscal 2021 (Note 8). Share-Based Compensation — The Company records amounts for all share-based compensation, including grants of restricted stock awards, performance stock units, and nonqualified stock options over the vesting period in the consolidated statements of operations based on their fair values at the date of the grant. Forfeitures of share-based compensation, if any, are recognized as they occur. Share-based compensation costs are included in Selling and marketing and General and administrative expense in the consolidated statements of Operations. See Note 10 – Share-Based Compensation for a description of the Company's accounting for share-based compensation plans. Leases — The Company leases various equipment under operating lease arrangements. 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. Because the rates implicit in the Company's lease contracts are not readily determinable, the Company uses its incremental borrowing rate based on information available at the 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 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 11 for information regarding the Company’s leases. Advertising — Advertising costs are expensed when the advertising first takes place. Advertising expense recognized during the years ended June 30, 2021, 2020, and 2019, was $4.8 million, $7.0 million, and $9.3 million, respectively, and is included in Selling and marketing expenses in the consolidated statements of operations. Fair Value Measurements — The Company measures certain of its 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 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 inputs that market participants would use in pricing an asset or liability. When measuring 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 Company’s most significant financial asset or liability measured at fair value on a recurring basis is its inventory repurchase contingent obligation (see “Revenue Recognition - Other Revenue Recognition Matters” and 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. Earnings Per Common Share — Basic earnings per common share reflects reported earnings divided by the weighted average number of common shares outstanding during the reporting period. Diluted earnings per common share include the effect of dilutive stock options, restricted stock awards, and performance stock units unless inclusion would not be dilutive. Postretirement Benefits – The Company has a defined contribution plan and makes contributions including matching and discretionary contributions which are based on various percentages of compensation, and in some instances are based on the amount of the employees' contributions to the plans. The expense related to the defined contribution plans was $1.7 million, $1.2 million, and $1.2 million for the years ended June 30, 2021, 2020, and 2019, respectively. New Accounting Pronouncements Issued And Adopted 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 . This guidance modifies the disclosure requirements on fair value measurements in Topic 820 by removing disclosures regarding transfers between Level 1 and Level 2 of the fair value hierarchy, by modifying the measurement uncertainty disclosure, and by requiring additional disclosures for Level 3 fair value measurements, among others. The Company adopted this guidance for its fiscal year beginning July 1, 2020. The adoption of this standard did not have a material impact on the consolidated financial statements. Current Expected Credit Loss — In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326) , which updated the ASC to use an impairment model that is based on expected losses rather than incurred losses. The Company adopted this guidance for its fiscal year beginning July 1, 2020. The adoption of this standard did not have an impact on the consolidated financial statements. New Accounting Pronouncements Issued But Not Yet Adopted Income Taxes — In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes . ASU 2019-12 simplifies the accounting for income taxes by removing certain exceptions to general principles in Income Taxes (Topic 740). It also clarifies and amends existing guidance to improve consistent application. The guidance is effective for fiscal years beginning after December 15, 2020. We are currently evaluating the impact of the new guidance on our consolidated financial statements. Reference Rate Reform — In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting . ASU 2020-04 provides optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships, and other transactions, subject to meeting certain criteria, that reference London Interbank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued because of reference rate reform. An entity may apply ASU 2020-04 as of any date from the beginning of an interim period that includes or is subsequent to March 12, 2020 through December 31, 2022. The Company expects that the adoption of this guidance will not have a material impact on the Company’s financial position, results of operations or cash flows. |
REVENUE RECOGNITION
REVENUE RECOGNITION | 12 Months Ended |
Jun. 30, 2021 | |
Revenue From Contract With Customer [Abstract] | |
REVENUE RECOGNITION | 2. REVENUE RECOGNITION The following tables present the Company’s net sales by major product category for each reportable segment. Year Ended June 30, 2021 MasterCraft NauticStar Crest Total Major Product Categories: Boats and trailers $ 349,247 $ 59,354 $ 101,208 $ 509,809 Parts 12,934 477 1,091 14,502 Other revenue 1,093 15 389 1,497 Total $ 363,274 $ 59,846 $ 102,688 $ 525,808 Year Ended June 30, 2020 MasterCraft NauticStar Crest Total Major Product Categories: Boats and trailers $ 236,108 $ 54,473 $ 60,888 $ 351,469 Parts 9,731 448 591 10,770 Other revenue 616 9 209 834 Total $ 246,455 $ 54,930 $ 61,688 $ 363,073 Year Ended June 30, 2019 MasterCraft NauticStar Crest (a) Total Major Product Categories: Boats and trailers $ 301,010 $ 77,896 $ 75,742 $ 454,648 Parts 9,471 85 498 10,054 Other revenue 1,349 14 316 1,679 Total $ 311,830 $ 77,995 $ 76,556 $ 466,381 (a) Crest was acquired on October 1, 2018 Sales outside of North America accounted for 4.5%, 4.8%, and 5.2% of the Company’s net sales for the years ended June 30, 2021, 2020, and 2019, respectively. The Company had no significant concentrations of sales to individual dealers or in countries outside of North America during the years ended June 30, 2021, 2020, and 2019. Contract Liabilities As of June 30, 2021, the Company had $1.8 million of contract liabilities associated with customer deposits reported in Accrued expenses and other current liabilities on the consolidated balance sheet that are expected to be recognized as revenue during the year ended June 30, 2022. As of June 30, 2020, total contract liabilities were $0.6 million. During the year ended June 30, 2021, all of this amount was recognized as revenue. See Note 1 for a description of the Company’s significant revenue recognition policies and Note 13 for a description of the Company’s segments. |
ACQUISITIONS
ACQUISITIONS | 12 Months Ended |
Jun. 30, 2021 | |
Business Combinations [Abstract] | |
ACQUISITIONS | 3. ACQUISITIONS Fiscal 2019 Acquisition On October 1, 2018, the Company completed its acquisition of Crest for $81.7 million. Crest, a manufacturer of pontoons, expands the Company’s product portfolio. Proceeds from the $80.0 term loan (see Note 8) were used to fund this acquisition. The following table is a summary of the assets acquired, liabilities assumed, and net cash consideration paid for Crest during fiscal 2019: Fair Value Accounts receivable $ 5,215 Inventories 9,853 Other current assets 179 Property, plant and equipment 1,840 Identifiable intangible assets (a) 35,245 Current liabilities (6,841 ) Fair value of assets acquired and liabilities assumed 45,491 Goodwill (a) 36,238 Net cash consideration paid $ 81,729 (a) The goodwill and other intangible assets recorded for the Crest acquisition are deductible for tax purposes. See Note 6 for additional information. Fair Value Estimated Useful Life (in years) Definite-lived intangible assets: Dealer network $ 18,000 10 Software 245 5 Indefinite-lived intangible asset: Trade name 17,000 Total identifiable intangible assets $ 35,245 Related Party Transactions In connection with the operations of Crest, the Company made 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 lease was to expire on September 30, 2028, and was subject to four consecutive, five-year Crest purchases fiberglass component parts from a supplier whose minority owner had been the same member of the Crest management team that had a minority ownership interest in Real Estate. On January 31, 2020 this minority ownership interest was divested and this supplier ceased being a related party. During the period beginning July 1, 2019 and ending January 31, 2020, the Company purchased $1.8 million of products from the supplier. During the year ended June 30, 2019, the Company purchased $2.8 million of products from the supplier. Pro Forma Financial Information The following unaudited pro forma consolidated results of operations for the fiscal year ended June 30, 2019 assumes that the acquisition of Crest occurred as of July 1, 2018. The unaudited pro forma financial information combines historical results of MasterCraft, NauticStar, and Crest with adjustments for depreciation and amortization attributable to fair value estimates on acquired tangible and intangible assets for the period. Non-recurring pro forma adjustments associated with the fair value step up of inventory were included in the reported pro forma cost of sales and earnings. The unaudited pro forma financial information is not indicative of the results of operations that would have been achieved if the acquisition had taken place at the beginning of fiscal year 2019, or the results that may occur in the future: Fiscal Year Ended 2019 Net sales $ 487,374 Net income $ 21,619 Basic earnings per share $ 1.16 Diluted earnings per share $ 1.15 |
INVENTORIES
INVENTORIES | 12 Months Ended |
Jun. 30, 2021 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | 4. INVENTORIES Inventories consisted of the following: As of June 30, 2021 2020 Raw materials and supplies $ 37,089 $ 18,318 Work in process 10,171 3,866 Finished goods 8,362 4,876 Obsolescence reserve (2,141 ) (1,424 ) Total inventories $ 53,481 $ 25,636 During 2021, the Company increased overall production levels, as well as increased safety stock as of June 30, 2021 to manage increased supply chain risks. |
PROPERTY, PLANT, AND EQUIPMENT
PROPERTY, PLANT, AND EQUIPMENT | 12 Months Ended |
Jun. 30, 2021 | |
Property Plant And Equipment [Abstract] | |
PROPERTY, PLANT, AND EQUIPMENT | 5. PROPERTY, PLANT, AND EQUIPMENT Property, plant, and equipment, net consisted of the following: As of June 30, 2021 2020 Land and improvements $ 5,955 $ 3,030 Buildings and improvements 35,890 22,366 Machinery and equipment 42,526 38,262 Furniture and fixtures 3,126 2,229 Construction in progress 5,737 1,312 Total property, plant, and equipment 93,234 67,199 Less accumulated depreciation (32,739 ) (26,718 ) Property, plant, and equipment, net $ 60,495 $ 40,481 Depreciation expense for the years ended June 30, 2021, 2020, and 2019 was $7.7 million, $6.6 million, and $4.3 million, respectively. Merritt Island Facility During October 2020, we completed the purchase of certain real property located in Merritt Island, Florida, including a boat manufacturing facility, for a purchase price of $14.2 million (the “Merritt Island Facility”). We expanded our overall boat building capacity by moving all Aviara production to the Merritt Island Facility. Additionally, removing Aviara production from our Vonore, Tennessee facility provided for an immediate increase in capacity and production for our MasterCraft brand. |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 12 Months Ended |
Jun. 30, 2021 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
GOODWILL AND OTHER INTANGIBLE ASSETS | 6. GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill and Other Intangible Asset Impairment See Note 1 for a discussion of the methods used to determine the fair value of goodwill and other intangible assets. In assessing the need for goodwill and intangible impairment, management utilizes a number of estimates, including operating results, business plans, economic projections, anticipated future cash flows, transactions and marketplace data. Accordingly, these fair value measurements fall in Level 3 of the fair value hierarchy. In March 2020, the World Health Organization announced that the outbreak of the novel coronavirus had become a worldwide pandemic. The resulting economic environment, including the significant share price and market volatility, as well as disruptions to supply chains resulting from the COVID-19 pandemic, triggered an interim impairment analysis for the Company’s intangible assets including goodwill. As a result of this analysis, the Company recorded impairment charges totaling $56.4 million during the three months ended March 29, 2020 related to the NauticStar and Crest segments. The impairment charges recorded within each segment are detailed below and are included in Goodwill and other intangible asset impairment on the consolidated statement of operations. The impairment recorded in fiscal 2020 was principally a result of a decline, in the fiscal third quarter, in market conditions, including our share price, and the then current outlook for sales and operating performance relative to the Company’s acquisition plans and impairment test performed as of June 30, 2019. During our fiscal 2019 annual assessment of intangible assets including goodwill, the Company recorded impairment charges of $31.0 million within the NauticStar segment. The impairment was principally a result of a decline, in the fiscal fourth quarter, in the outlook for sales and operating performance relative to our acquisition plan. As of June 30, 2021, our annual impairment test date, the Company performed a qualitative assessment and identified no events or circumstances that indicated that there existed a more likely than not probability of impairment of goodwill within our MasterCraft segment or other intangible assets within each of our segments. Goodwill and other intangible asset impairment charges for the years ended June 30, 2020 and 2019 were as follows: 2020 2019 NauticStar Crest Consolidated NauticStar Consolidated Goodwill $ 8,199 $ 36,238 $ 44,437 $ 28,000 $ 28,000 Trade name 5,000 7,000 12,000 3,000 3,000 Total $ 13,199 $ 43,238 $ 56,437 $ 31,000 $ 31,000 While the extent and duration of the economic impact from the COVID-19 pandemic remain unclear, changes in assumptions and estimates may affect the fair value of goodwill and other intangible assets and could result in additional impairment charges in future periods. Goodwill The carrying amounts of goodwill as of both June 30, 2021 and 2020, 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 (36,199 ) - Crest 36,238 (36,238 ) - Total $ 102,030 $ (72,437 ) $ 29,593 Other Intangible Assets The following table presents the carrying amount of Other intangible assets, net as of June 30, 2021 and 2020. 2021 2020 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 $ (13,711 ) $ 25,789 $ 39,500 $ (9,810 ) $ 29,690 Software 245 (135 ) 110 245 (86 ) 159 39,745 (13,846 ) 25,899 39,745 (9,896 ) 29,849 Unamortized intangible assets Trade names 49,000 (15,000 ) 34,000 49,000 (15,000 ) 34,000 Total other intangible assets $ 88,745 $ (28,846 ) $ 59,899 $ 88,745 $ (24,896 ) $ 63,849 Amortization expense related to Other intangible assets, net for years ended June 30, 2021, 2020 and 2019 was $3.9 million, $3.9 million, and $3.5 million, respectively. The following table presents estimated future amortization expense for the next five fiscal years and thereafter. Fiscal years ending June 30, 2022 $ 3,950 2023 3,950 2024 3,806 2025 3,793 2026 3,793 and thereafter 6,607 Total $ 25,899 |
ACCRUED EXPENSES AND OTHER CURR
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | 12 Months Ended |
Jun. 30, 2021 | |
Accrued Liabilities And Other Liabilities [Abstract] | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | 7. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES Accrued expenses and other current liabilities consisted of the following: As of June 30, 2021 2020 Warranty $ 22,329 $ 20,004 Dealer incentives 10,634 9,180 Compensation and related accruals 6,046 1,488 Contract liabilities 1,848 559 Self-insurance 865 704 Inventory repurchase contingent obligation 471 1,132 Other 4,643 2,918 Total accrued expenses and other current liabilities $ 46,836 $ 35,985 Accrued warranty liability activity was as follows: For the Years Ended June 30, 2021 2020 Balance at the beginning of the period $ 20,004 $ 17,205 Provisions 9,846 7,039 Payments made (9,116 ) (7,634 ) Aggregate changes for preexisting warranties 1,595 3,394 Balance at the end of the period $ 22,329 $ 20,004 |
LONG-TERM DEBT
LONG-TERM DEBT | 12 Months Ended |
Jun. 30, 2021 | |
Debt Disclosure [Abstract] | |
LONG-TERM DEBT | 8. LONG-TERM DEBT Long-term debt outstanding was as follows: As of June 30, 2021 2020 Revolving credit facility $ 33,728 $ 10,000 Term loans 60,000 99,993 Debt issuance costs on term loans (585 ) (1,395 ) Total debt 93,143 108,598 Less current portion of long-term debt 3,000 9,420 Less current portion of debt issuance costs on term loans (134 ) (488 ) Long-term debt, net of current portion $ 90,277 $ 99,666 Previously Existing Credit Facility On October 1, 2018, the Company entered into a 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 provided the Company with a $190.0 million senior secured credit facility, consisting of a $75.0 million term loan, an $80.0 million term loan, and a $35.0 million revolving credit facility. Proceeds from the $80.0 million term loan were used to fund the Crest acquisition (see Note 3). On May 7, 2020, the Company entered into Amendment No. 3 to the Fourth Amended Credit Agreement (the “Amendment”). The changes effected by the Amendment include, among others, the temporary removal and replacement of the Company’s financial covenants, the addition of a 50 basis point floor on LIBOR, modifications to the range of applicable LIBOR and prime interest rate margins, and a revision of the total net leverage ratio calculation. Under the Amendment, the total net leverage ratio covenant and fixed charge coverage ratio covenant of the Fourth Amended Credit Agreement were temporarily replaced with three separate covenants: (i) an interest coverage ratio, (ii) a minimum liquidity threshold, and (iii) a maximum unfinanced capital expenditures limitation (the “Package of Financial Covenants”). The Package of Financial Covenants were in place through the quarter ended March 31, 2021, at which time the total net leverage ratio covenant and fixed charge coverage ratio covenant were reinstated and the Package of Financial Covenants sunsetted, and with the minimum liquidity covenant being tested on the last day of each fiscal month through May 31, 2021. In addition, the total net leverage ratio calculation was temporarily revised to include all unrestricted cash balances, without limitation, until June 30, 2021. On October 26, 2020, the Company entered into Amendment No. 4 and Joinder to the Fourth Amended Credit Agreement (the “Amendment No. 4”). In conjunction with the new Merritt Island Facility purchase (see Note 5), the assets were organized in a new wholly-owned subsidiary of the Company. The changes effected by Amendment No. 4 added this new subsidiary as a borrower under the Fourth Amended Credit Agreement. Pursuant to the Amendment, the Company’s debt bore interest at LIBOR, subject to a 50 basis point floor, plus 3.25% through June 30, 2020. Beginning on July 1, 2020, the applicable margin, at the Company’s option, is at either the prime rate plus an applicable margin ranging from 0.5% to 2.25% or at an adjusted LIBOR rate plus an applicable margin ranging from 1.50% to 3.25%, in each case based on the Company’s total net leverage ratio. Current Credit Facility On June 28, 2021, the Company entered into a credit agreement with a syndicate of certain financial institutions (the “Credit Agreement”). The Credit Agreement provides the Company with a $160.0 million senior secured credit facility, consisting of a $60.0 million term loan (the “Term Loan”) and a $100.0 million revolving credit facility (the “Revolving Credit Facility”). The Credit Agreement refinanced and replaced the Fourth Amended Credit Agreement. The Credit Agreement is secured by a first priority security interest in substantially all of the Company’s assets. The Credit Agreement contains a number of covenants that, among other things, restrict the Company’s ability to, subject to specified exceptions, incur additional debt; incur additional liens and contingent liabilities; sell or dispose of assets; merge with or acquire other companies; liquidate or dissolve; engage in businesses that are not in a related line of business; make loans, advances or guarantees; pay dividends or make other distributions; engage in transactions with affiliates; and make investments. The Company is also required to maintain a minimum fixed charge coverage ratio and a maximum net leverage ratio. The Credit Agreement bears interest, at the Company’s option, at either the prime rate plus an applicable margin ranging from 0.25% to 1.00% or at an adjusted LIBOR rate plus an applicable margin ranging from 1.25% to 2.00%, in each case based on the Company’s net leverage ratio. The Company is also required to pay a commitment fee for any unused portion of the revolving credit facility ranging from 0.15% to 0.30% based on the Company’s net leverage ratio. The Credit Agreement will mature and all remaining amounts outstanding thereunder will be due and payable on June 28, 2026. As of June 30, 2021, the Company was in compliance with its financial covenants under the Credit Agreement. As a result of entering into the Credit Agreement, the Company recognized a $0.7 million loss on early extinguishment of debt. The remaining $0.5 million of unamortized deferred financing costs, plus additional capitalized amounts of $0.6 million are being amortized over the term of the Credit Agreement. As of June 30, 2021 and 2020, the effective interest rate on borrowings outstanding was 1.38% and 3.75%, respectively. Revolving Credit Facility On March 19, 2020, the Company drew $35.0 million on its revolving credit facility under the Fourth Amended Credit Agreement as a precautionary measure in order to increase its cash position and preserve financial flexibility in light of uncertainty in the global markets resulting from the COVID-19 pandemic. As of June 30, 2020, the Company had $10.0 million of borrowings outstanding under its revolving credit facility. The Company subsequently repaid all outstanding amounts during the three months ended October 4, 2020. During October 2020, the Company borrowed $20.0 million under the revolving credit facility to fund the purchase of the Merritt Island Facility. The Company subsequently repaid all outstanding amounts as of April 4, 2021. In conjunction with the Credit Agreement entered into on June 28, 2021, the Company drew $33.7 million on its Revolving Credit Facility. Drawn amounts were used to repay a same amount of outstanding borrowings under the term loans under the Fourth Amended Credit Agreement. As of June 30, 2021, the Company had $33.7 million of borrowings outstanding on its Revolving Credit Facility and had remaining availability of $66.3 million. Maturities for the Term Loan and Revolving Credit Facility subsequent to June 30, 2021 are as follows: 2022 $ 3,000 2023 3,000 2024 4,500 2025 4,500 2026 78,728 Total $ 93,728 |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Jun. 30, 2021 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | 9. INCOME TAXES Earnings before income taxes by jurisdiction were all in the U.S. except for income of approximately $0.1 million For the years ended June 30, the components of the provision for income taxes are as follows: 2021 2020 2019 Current income tax expense: Federal $ 12,231 $ 2,096 $ 10,405 State 3,057 666 1,892 Benefit of current year tax credits (469 ) (554 ) (171 ) Total current tax expense $ 14,819 $ 2,208 $ 12,126 Deferred tax expense (benefit): Federal $ 1,471 $ (8,887 ) $ (5,837 ) State (632 ) (886 ) (897 ) Total deferred tax expense (benefit) 839 (9,773 ) (6,734 ) Income tax expense (benefit) $ 15,658 $ (7,565 ) $ 5,392 The difference between the statutory and the effective federal tax rate for the periods below is attributable to the following: 2021 2020 2019 Statutory income tax rate 21.00 % 21.00 % 21.00 % State taxes (net of federal income tax benefit and valuation allowance) 1.66 % 1.67 % 2.48 % Tax credits (0.98 %) 4.49 % (3.39 %) Change in valuation allowance 0.19 % — (0.57 %) Permanent differences (0.69 %) (0.74 %) (2.54 %) Uncertain tax positions 0.67 % (2.49 %) 3.10 % Other (0.05 %) — 0.08 % Effective income tax rate 21.80 % 23.93 % 20.16 % As of June 30, 2021, and 2020, a summary of the significant components of the Company’s deferred tax assets and liabilities was as follows: 2021 2020 Deferred tax assets: Goodwill and other intangible asset basis difference $ 12,862 $ 13,776 Warranty reserves 5,258 4,616 Accrued selling 368 850 Unrecognized tax benefits 665 566 Stock compensation 761 402 Repurchase agreements 111 261 State net operating loss 433 14 Accrued compensation 529 68 Other 805 630 Total deferred tax assets 21,792 21,183 Valuation allowance (177 ) (65 ) Total deferred tax assets, net of the valuation allowance 21,615 21,118 Deferred tax liabilities: Depreciation (5,845 ) (4,839 ) Other (640 ) (199 ) Total deferred tax liabilities (6,485 ) (5,038 ) Net deferred tax assets $ 15,130 $ 16,080 On March 27, 2020, President Trump signed into law the Coronavirus Aid, Relief, and Economic Security Act (H.R. 748) (the “CARES Act”). As of June 30, 2021, the Company has state net operating loss (NOL) carryforwards of $10.5 million. Of this amount, $3.4 million expire in varying years ranging from June 30, 2024 to June 30, 2036, while the remainder can be carried forward indefinitely. The Company has foreign NOL carryforwards of $0.2 million that can be carried forward indefinitely. However, the Company determined that it is more likely than not that the benefit from certain state and foreign NOL carryforwards will not be realized. In recognition of this risk, the Company has provided a partial 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: 2021 2020 Balance at July 1 $ 2,993 $ 2,504 Additions based on tax positions related to the current year 1,113 110 Additions for tax positions of prior years 77 713 Reductions for tax positions of prior years (412 ) (164 ) Settlements of tax positions from prior years (467 ) (170 ) Balance at June 30 $ 3,304 $ 2,993 Of this total, $2.7 million and $2.1 million as of June 30, 2021 and 2020, 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, 2021, 2020, and, 2019 was a benefit of $0.2 million and an expense of $0.3 million and $0.1 million, respectively. The amounts accrued for interest and penalties at June 30, 2021 and 2020 were $0.5 million and $0.7 million, respectively, and is presented in unrecognized tax positions on the accompanying consolidated balance sheets. 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, 2021, 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 state income taxes and foreign income taxes. The federal income tax returns for the years ended June 30, 2018 through 2020 are subject to examination by the Internal Revenue Service. For state purposes, the statutes of limitation vary by jurisdiction. With few exceptions, the Company is no longer subject to examination by taxing authorities for years before June 30, 2018. The Company expects the total amount of unrecognized benefits to increase by approximately $1.8 million in the next twelve months. The Company records unrecognized tax benefits as liabilities and adjusts these liabilities when its judgment changes as a result of the evaluation of new information not previously available. Because of the complexity of some of these uncertainties, the ultimate resolution may result in a payment that is materially different from our current estimate of the unrecognized tax benefit liabilities. These differences will be reflected as increases or decreases to income tax expense in the period in which new information is available. |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 12 Months Ended |
Jun. 30, 2021 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
SHARE-BASED COMPENSATION | 10. SHARE-BASED COMPENSATION The 2015 Incentive Award Plan (“2015 Plan”) provides for the grant of stock options, including incentive stock options, and nonqualified stock options (“NSOs”), restricted stock, dividend equivalents, stock payments, restricted stock units, restricted stock awards (“RSAs”), deferred stock, deferred stock units, performance awards, stock appreciation rights, performance stock units (“PSUs”), and cash awards. As of June 30, 2021, there were 1,305,458 shares available for issuance under the 2015 Plan. The following table presents the components of share-based compensation expense by award type for the years ended June 30, 2021, 2020 and 2019. 2021 2020 2019 Restricted stock awards $ 1,545 $ 1,285 $ 913 Performance stock units 1,439 (233 ) 563 Stock options - 9 201 Share-based compensation expense $ 2,984 $ 1,061 $ 1,677 The amount of compensation cost the Company recognizes over the requisite service period is based on the Company’s best estimate of the achievement of the performance conditions and can fluctuate over time. Adjustment to Share-Based Compensation In conjunction with the resignation of an executive officer in October 2019, approximately $0.5 million of share-based compensation expense recognized in prior periods was reversed during fiscal 2020 for RSAs and PSUs that were forfeited. The following table presents the income tax benefit related to share-based compensation expense recognized by award type. 2021 2020 2019 Restricted stock awards $ 350 $ 290 $ 217 Performance stock units 326 (53 ) 134 Stock options - 2 48 Share-based compensation expense $ 676 $ 239 $ 399 Restricted Stock Awards All RSAs granted to non-employee directors vest over the remainder of that fiscal year, and all RSAs granted to employees vest over a period of between one to three years. Generally, non-vested RSAs are forfeited if employment is terminated prior to vesting. RSAs are granted at a per share fair value equal to the market value of the Company’s common stock on the grant date. The Company recognizes the cost of non-vested RSAs ratably over the requisite service period. The total grant date fair value of RSAs vested during the years ended June 30, 2021, 2020, and 2019 was $1.6 million , $1.0 million and $0.7 million, respectively. A summary of RSA activity for the years ended June 30, 2021, 2020 and 2019, is as follows: Number of Restricted Stock Awards Weighted Average Grant Date Fair Value Total Non-vested Restricted Stock Awards at June 30, 2018 43,310 $ 17.28 Granted 51,995 26.79 Vested (33,093 ) 21.54 Forfeited (8,408 ) 23.08 Total Non-vested Restricted Stock Awards at June 30, 2019 53,804 22.94 Granted 138,457 17.41 Vested (50,570 ) 20.09 Forfeited (34,797 ) 20.24 Total Non-vested Restricted Stock Awards at June 30, 2020 106,894 18.01 Granted 93,357 20.34 Vested (73,385 ) 18.54 Forfeited (8,673 ) 19.29 Total Non-vested Restricted Stock Awards at June 30, 2021 118,193 19.42 As of June 30, 2021, there was $1.4 million of total unrecognized compensation expense related to non-vested RSAs. The Company expects this expense to be recognized over a weighted average period of 1.63 years. Performance Stock Units During the years ended June 30, 2021, 2020, and 2019, the Company granted performance shares to certain employees. The awards will be earned based on the Company’s achievement of certain performance criteria over a three-year The fair value of PSUs vested during the year ended June 30, 2021, 2020 and 2019 was $0.4 million, $0.2 million, and $0.4 million, respectively. A summary of PSU activity for the years ending June 30, 2021, 2020 and 2019, is as follows: Number of Performance Stock Units Weighted Average Grant Date Fair Value Total Non-vested Performance Stock Units at June 30, 2018 59,328 $ 14.98 Granted 35,122 25.70 Vested (32,373 ) 11.85 Forfeited (11,456 ) 19.73 Total Non-vested Performance Stock Units at June 30, 2019 50,621 23.34 Granted 72,048 18.18 Vested (8,383 ) 19.40 Forfeited (46,882 ) 20.82 Total Non-vested Performance Stock Units at June 30, 2020 67,404 20.02 Granted 123,096 22.11 Vested (14,627 ) 26.29 Forfeited (15,588 ) 20.25 Total Non-vested Performance Stock Units at June 30, 2021 160,285 21.03 As of June 30, 2021, there was $2.2 million of total unrecognized compensation expense related to non-vested PSUs. The Company expects this expense to be recognized over a weighted average period of 1.83 years. Nonqualified Stock Options In July 2015, the Company granted 137,786 NSOs to certain employees. As of July 2019, all outstanding options were fully vested and exercisable. A summary of NSO activity for the years ending June 30, 2021, 2020, and 2019 is as follows: Weighted Weighted Average Average Remaining Aggregate Exercise Contractual Intrinsic Shares Price Term (Yrs.) Value Outstanding at June 30, 2018 93,125 $ 10.70 7.1 $ 1,700 Granted - Exercised (10,563 ) 10.70 Forfeited or expired (1,703 ) 10.70 Outstanding at June 30, 2019 80,859 10.70 6.1 719 Granted - Exercised (48,467 ) 10.70 Forfeited or expired - Outstanding at June 30, 2020 32,392 10.70 5.1 270 Granted - Exercised (7,952 ) 10.70 Forfeited or expired - Outstanding at June 30, 2021 24,440 10.70 4.1 381 Fully vested and exercisable at June 30, 2021 24,440 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Jun. 30, 2021 | |
Commitments And Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | 11. COMMITMENTS AND CONTINGENCIES Operating Leases The Company has lease agreements for certain personal and real property. Leases with an initial lease term of 12 months or less are not recorded on the balance sheet. Our lease agreements do not include any significant renewal options. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. Upon adoption of ASC 842, Lease Accounting, In accordance with the purchase option, on October 24, 2019 the Company completed the purchase of the Crest manufacturing facility for $4.1 million. Upon completion of this purchase, the Company recognized approximately $4.1 million in Property, plant and equipment, net and derecognized approximately $4.1 million of both Finance lease assets and Accrued expenses and other current liabilities. The purchase price of the Crest Facility was determined by appraisal and negotiation between the Company and the seller, whose minority ownership included a member of the Crest management team. The Company funded the purchase by utilizing cash from operations. The lease-related balances as of June 30, 2021 and 2020, and activity and costs during the periods presented, other than the activity related to the Crest manufacturing facility discussed above, are not material. Repurchase Obligations Under certain conditions, the Company is obligated to repurchase new inventory repossessed from dealerships by financial institutions that provide credit to the Company’s dealers. See Note 1 for more information regarding the terms and accounting policies related to this obligation. The maximum obligation of the Company under such floor plan agreements totaled approximately $67.0 million and $131.4 million as of June 30, 2021 and June 30, 2020, respectively. Purchase Commitments The Company is engaged in an exclusive contract with a single vendor to provide engines for its MasterCraft performance sport boats. This contract makes this vendor the only supplier to MasterCraft for in-board engines and expires June 30, 2023. The Company is obligated to purchase a minimum number of engines for each model year under this contract. The Company could also be required to pay a penalty to this vendor in order to maintain exclusivity if annual purchases under the agreement fail to meet a certain volume threshold. We incurred no penalties related to purchase commitments during the years ended June 30, 2021, 2020, and 2019. Legal Proceedings 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, results of operations or cash flows. Stock Repurchase Plan On June 24, 2021, the board of directors authorized a stock repurchase plan that allows for the repurchase of up to $50.0 million of our common stock during the three-year |
EARNINGS PER SHARE
EARNINGS PER SHARE | 12 Months Ended |
Jun. 30, 2021 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | 12. EARNINGS PER SHARE The factors used in the earnings per share computation are as follows: 2021 2020 2019 Net income (loss) $ 56,170 $ (24,047 ) $ 21,354 Weighted average shares — basic 18,805,464 18,734,482 18,653,892 Dilutive effect of assumed exercises of stock options 14,814 — 45,799 Dilutive effect of assumed restricted share awards/units 131,243 — 68,516 Weighted average outstanding shares — diluted 18,951,521 18,734,482 18,768,207 Basic net income (loss) per share $ 2.99 $ (1.28 ) $ 1.14 Diluted net income (loss) per share $ 2.96 $ (1.28 ) $ 1.14 For the year ended June 30, 2021, an immaterial number of shares were excluded from the computation of diluted earning per share as the effect would have been anti-dilutive. For the year ended June 30, 2020, the dilutive effect of approximately 45,000 outstanding RSAs, PSUs and NSOs have been excluded from the calculation of diluted earnings per share as the effect would have been anti-dilutive because of the net loss for the year ended June 30, 2020. For the year ended June 30, 2019, an immaterial number of shares were excluded from the computation of diluted earnings per share as the effect would have been anti-dilutive. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 12 Months Ended |
Jun. 30, 2021 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | 13. 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 (“CODM”) in making decisions on how to allocate resources and assess performance. Through June 30, 2021, the Company’s CODM regularly assessed the operating performance of the Company’s boat brands under three operating and reportable segments: • The MasterCraft segment produces boats under two product brands, MasterCraft and Aviara. MasterCraft boats are produced at the Company’s Vonore, Tennessee facility. These 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. The Company has transitioned Aviara production from the Vonore facility to the Merritt Island, Florida facility as of the end of March 2021, allowing for increased production capacity for our MasterCraft branded products. • The NauticStar segment produces boats at its Amory, Mississippi facility. NauticStar’s boats are primarily used for saltwater fishing and general recreational boating. • The Crest segment produces pontoon boats at its Owosso, Michigan facility. Crest’s boats are primarily used for general recreational boating. Each segment distributes its products through its own independent dealer network. Each segment also has its own management structure which is responsible for the operations of the segment and is directly accountable to the CODM for the operating performance of the segment, which is regularly assessed by the CODM who allocates resources based on that performance, including using measures of performance based operating income. The Company files a consolidated income tax return and does not allocate income taxes and other corporate-level expenses, including interest, to operating segments. All material corporate costs are allocated to the MasterCraft segment. Selected financial information for the Company’s reportable segments was as follows: For the Year Ended June 30, 2021 MasterCraft NauticStar Crest Consolidated Net sales $ 363,274 $ 59,846 $ 102,688 $ 525,808 Operating income (loss) 65,038 (2,690 ) 13,605 75,953 Depreciation and amortization 5,865 3,262 2,503 11,630 Purchases of property, plant and equipment 24,327 2,643 892 27,862 For the Year Ended June 30, 2020 MasterCraft NauticStar Crest Consolidated Net sales $ 246,455 $ 54,930 $ 61,688 $ 363,073 Operating income (loss) 33,229 (17,681 ) (42,115 ) (26,567 ) Depreciation and amortization 4,679 3,454 2,394 10,527 Goodwill and other intangible asset impairment — 13,199 43,238 56,437 Purchases of property, plant and equipment 6,193 2,804 5,244 14,241 For the Year Ended June 30, 2019 MasterCraft NauticStar Crest (a) Consolidated Net sales $ 311,830 $ 77,995 76,556 $ 466,381 Operating income (loss) 53,989 (27,785 ) 7,055 33,259 Depreciation and amortization 3,481 2,684 1,622 7,787 Goodwill and other intangible asset impairment — 31,000 — 31,000 Purchases of property, plant and equipment 11,730 2,069 265 14,064 (a) Crest was acquired on October 1, 2018. The following table presents total assets for the Company’s reportable segments as of June 30, 2021, and 2020. 2021 2020 Assets: MasterCraft $ 353,088 $ 294,139 NauticStar 44,181 36,720 Crest 42,204 40,077 Eliminations (163,013 ) (163,013 ) Total assets $ 276,460 $ 207,923 |
QUARTERLY FINANCIAL REPORTING (
QUARTERLY FINANCIAL REPORTING (UNAUDITED) | 12 Months Ended |
Jun. 30, 2021 | |
Quarterly Financial Information Disclosure [Abstract] | |
QUARTERLY FINANCIAL REPORTING (UNAUDITED) | 14. QUARTERLY FINANCIAL REPORTING (UNAUDITED) The Company maintains its financial records on the basis of a fiscal year ending on June 30, with the fiscal quarters equaling thirteen weeks. The following tables set forth summary quarterly financial information for the years ended June 30, 2021 and 2020. Due to effects of rounding, the quarterly results presented may not sum to the fiscal year results presented. Fiscal Quarter Ended Fiscal Year Ended June 30, April 4, January 3, October 4, June 30, 2021 2021 2021 2020 2021 Net sales $ 155,532 $ 147,854 $ 118,677 $ 103,745 $ 525,808 Gross profit 37,241 37,227 29,273 26,230 129,971 Operating income 23,041 22,563 16,945 13,404 75,953 Net income $ 16,534 $ 17,568 $ 12,501 $ 9,567 $ 56,170 Basic earnings per common share $ 0.88 $ 0.93 $ 0.66 $ 0.51 $ 2.99 Diluted earnings per common share $ 0.87 $ 0.93 $ 0.66 $ 0.51 $ 2.96 Weighted average shares used for computation of: Basic earnings per common share 18,822,231 18,817,975 18,807,316 18,774,336 18,805,464 Diluted earnings per common share 19,021,220 18,989,629 18,928,408 18,866,826 18,951,521 Fiscal Quarter Ended Fiscal Year Ended June 30, March 29, December 29, September 29, June 30, 2020 2020 2019 2019 2020 Net sales $ 51,094 $ 102,562 $ 99,628 $ 109,789 $ 363,073 Gross profit 7,407 21,274 21,142 25,533 75,356 Goodwill and other intangible asset impairment (a) — 56,437 — — 56,437 Operating income (loss) (2,422 ) (47,177 ) 10,335 12,697 (26,567 ) Net income (loss) $ (2,836 ) $ (36,713 ) $ 6,879 $ 8,623 $ (24,047 ) Basic earnings (loss) per common share $ (0.15 ) $ (1.96 ) $ 0.37 $ 0.46 $ (1.28 ) Diluted earnings (loss) per common share $ (0.15 ) $ (1.96 ) $ 0.37 $ 0.46 $ (1.28 ) Weighted average shares used for computation of: Basic earnings per common share 18,743,915 18,739,480 18,730,688 18,723,845 18,734,482 Diluted earnings per common share 18,743,915 18,739,480 18,770,783 18,770,756 18,734,482 (a) Goodwill and other intangible asset impairment charges are discussed in Note 6 . |
SIGNIFICANT ACCOUNTING POLICI_2
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Jun. 30, 2021 | |
Accounting Policies [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.; MasterCraft International Sales Administration, Inc.; Aviara Boats, LLC; Nautic Star, LLC; NS Transport, LLC; and Crest Marine, LLC. The Company acquired NauticStar on October 2, 2017 and Crest on October 1, 2018. Holdings and its subsidiaries collectively are referred to herein as the “Company.” |
Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation — 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 from the dates of their acquisitions. All significant intercompany accounts and transactions have been eliminated in consolidation. Holdings has no independent operations and no material assets, other than its wholly owned equity interests in its subsidiaries, as of June 30, 2021 and 2020, and no material liabilities. As of June 30, 2021 and 2020, Holdings had no material contingencies, long-term obligations, or guarantees other than a guarantee of its subsidiaries’ long-term debt (see Note 8). |
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, revenues, 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 impairment of goodwill and indefinite-lived intangible assets, warranty liability, unrecognized tax positions, inventory repurchase contingent obligations, and impairment of long-lived assets and intangible assets subject to amortization. Actual results could differ from those estimates. |
Reclassifications | Reclassifications — Certain historical amounts have been reclassified in the accompanying consolidated financial statements to conform to the current presentation. |
Revenue Recognition | Revenue Recognition — The Company’s revenue is derived primarily from the sale of boats and trailers, marine parts, and accessories to its independent dealers. The Company recognizes revenue when obligations under the terms of a contract are satisfied and control over promised goods is transferred to a customer. For substantially all sales, this occurs when the product is released to the carrier responsible for transporting it to a customer. The Company typically receives payment within 5 business days of shipment. Revenue is measured as the amount of consideration it expects to receive in exchange for a product. The Company offers dealer incentives that include wholesale rebates, retail rebates and promotions, floor plan reimbursement or cash discounts, and other allowances that are recorded as reductions of revenues in Net sales in the consolidated statements of operations. The consideration recognized represents the amount specified in a contract with a customer, net of estimated incentives the Company reasonably expects to pay. The estimated liability and reduction in revenue for dealer incentives is recorded at the time of sale. Subsequent adjustments to incentive estimates are possible because actual results may differ from these estimates if conditions dictate the need to enhance or reduce sales promotion and incentive programs or if dealer achievement or other items vary from historical trends. Accrued dealer incentives are included in Accrued expenses and other current liabilities in the accompanying consolidated balance sheets. Rebates and Discounts Dealers earn wholesale rebates based on purchase volume commitments and achievement of certain performance metrics. The Company estimates the amount of wholesale rebates based on historical achievement, forecasted volume, and assumptions regarding dealer behavior. Rebates that apply to boats already in dealer inventory are referred to as retail rebates. The Company estimates the amount of retail rebates based on historical data for specific boat models adjusted for forecasted sales volume, product mix, dealer and consumer behavior, and assumptions concerning market conditions. The Company also utilizes various programs whereby it offers cash discounts or agrees to reimburse its dealers for certain floor plan interest costs incurred by dealers for limited periods of time, generally ranging up to nine months. Shipping and Handling Costs Shipping and handling costs includes those costs incurred to transport product to customers and internal handling costs, which relate to activities to prepare goods for shipment . The Company has elected to account for shipping and handling costs associated with outbound freight after control over a product has transferred to a customer as a fulfillment cost. The Company includes shipping and handling costs , including costs billed to customers , in Cost of sales in the consolidated statements of operations. Contract Liabilities A contract liability is created when customers prepay for goods prior to the Company transferring control of those goods to the customer. The contract liability is reduced once control of the goods is transferred to the customer. The difference between the opening and closing balances of the Company’s contract liabilities primarily results from the timing difference between the Company’s performance and the point at which it receives pre-payment from the customer. Other Revenue Recognition Matters Dealers generally have no right to return unsold boats. Occasionally, the Company may accept returns in limited circumstances and at the Company’s discretion under its warranty policy. 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 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 30 months. The Company accounts for these arrangements as guarantees and recognizes a liability based on the estimated fair value of the repurchase obligation. The estimated fair value takes into account our estimate of the loss we will incur upon resale of any repurchases. The Company accrues the estimated fair value of this obligation based on the age of inventory currently under floor plan financing and estimated credit quality of dealers holding the inventory. Inputs used to estimate this fair value include significant unobservable inputs that reflect the Company’s assumptions about the inputs that market participants would use and, therefore, this liability is classified within Level 3 of the fair value hierarchy. The Company has excluded sales and other taxes assessed by a governmental authority in connection with revenue-producing activities from the determination of the transaction price for all contracts. The Company has not adjusted Net sales for the effects of a significant financing component because the period between the transfer of the promised goods and the customer's payment is expected to be one year or less. |
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 carries its accounts receivable at face value, net of an allowance for doubtful accounts, which the company records on a regular basis based upon known bad debt risks and past loss history, customer payment practices and economic conditions. Actual collection experience may differ from the current estimate of net receivables. A change to the allowance for doubtful accounts may be required if a future event or other change in circumstances results in a change in the estimate of the ultimate collectability of a specific account. Amounts recorded as bad debt expense, write-offs, and recoveries were not material for the years ended June 30, 2021, 2020, and 2019. |
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 may at times exceed federally insured amounts. The Company had no cash equivalents at June 30, 2021 and 2020. |
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. Supplier Concentrations 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. The Company is dependent on third-party equipment manufacturers, distributors, and dealers for certain parts and materials utilized in the manufacturing process. During the years ended June 30, 2021, 2020, and 2019 the Company purchased all engines for its MasterCraft performance sport boats under a supply agreement with a single engines for its Crest boats under a supply agreement with a single vendor. Total purchases from this vendor were $23.6 million , $15.5 million , and $ 20.4 million for the years ended June 30, 202 1, 20 20 , and 2019, respectively . |
Inventories | Inventories — Inventories are valued at the lower of cost or net realizable value and are shown net of an inventory allowance in the consolidated 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 inventory. |
Property, Plant, and Equipment | Property, Plant, and Equipment — Property, plant, and equipment are recorded at historical cost less accumulated depreciation and are 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 - 7 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. The Company’s intangible assets with finite lives consist primarily of dealer networks 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 6). 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. The Company has three reporting units, MasterCraft, NauticStar, and Crest, which each relate to an operating segment as described in Note 13. All of the Company’s goodwill assets relate to the MasterCraft reporting unit and all of the Company’s other intangible assets relate to each of the three reporting units. Goodwill Goodwill results from the excess of purchase price over the net identifiable assets of businesses acquired. The Company reviews goodwill for impairment annually, at its fiscal year-end annual impairment testing date, and whenever events or changes in circumstances indicate that the fair value of a reporting unit may be below its carrying value. As part of the annual test, the Company may perform a qualitative, rather than quantitative, assessment to determine whether the fair values of its reporting units are “more likely than not” to be greater than their carrying values. In performing this qualitative analysis, the Company considers various factors, including the effect of market or industry changes and the reporting units' actual results compared to projected results. If the fair value of a reporting unit does not meet the "more likely than not" criteria discussed above, the impairment test for goodwill is a quantitative test. This test involves comparing the fair value of the reporting unit with its carrying value. If the fair value exceeds the carrying value, goodwill is not considered impaired. If the carrying amount exceeds the fair value then the goodwill is considered impaired and an impairment loss is recognized in an amount by which the carrying value exceeds the reporting unit’s fair value, not to exceed the carrying amount of the goodwill allocated to that reporting unit. The Company calculates the fair value of its reporting units by considering both the income approach and market approach. The income approach calculates the fair value of the reporting unit using a discounted cash flow method. Internally forecasted future cash flows, which the Company believes reasonably approximate market participant assumptions, are discounted using a weighted average cost of capital (“Discount Rate”) developed for each reporting unit. The Discount Rate is developed using observable market inputs, as well as considering whether or not there is a measure of risk related to the specific reporting unit’s forecasted performance. Fair value under the market approach is determined for each unit by applying market multiples for comparable public companies to the unit’s financial results. The key judgements in these calculations are the assumptions used in determining the reporting unit’s forecasted future performance, including revenue growth and operating margins, as well as the perceived risk associated with those forecasts in determining the Discount Rate, along with selecting representative market multiples. The Company recognized no impairments related to goodwill for the year ended June 30, 2021. During the years ended June 30, 2020 and 2019, the Company performed quantitative impairment tests for all three reporting units and determined that goodwill attributable to the NauticStar and Crest reporting units was impaired. As a result, the Company recognized associated impairment charges during each of those fiscal years (see Note 6). Other Intangible Assets The Company's primary intangible assets other than goodwill are dealer networks and trade names acquired in business combinations. These intangible assets are initially valued using a methodology commensurate with the intended use of the asset. The dealer networks were valued using an income approach, which requires an estimate or forecast of the expected future cash flows from the dealer network through the application of the multi-period excess earnings approach. The fair value of trade names is measured using a relief-from-royalty approach, a variation of the income approach, which requires an estimate or forecast of the expected future cash flows. This method assumes the value of the trade name is the discounted cash flows of the amount that would be paid to third parties had the Company not owned the trade name and instead licensed the trade name from another company. The basis for future sales projections for these methods are based on internal revenue forecasts by reporting unit, which the Company believes represent reasonable market participant assumptions. The future cash flows are discounted using an applicable Discount Rate as well as any potential risk premium to reflect the inherent risk of holding a standalone intangible asset. The key judgements in these fair value calculations, as applicable, are: assumptions used in developing internal revenue growth and dealer expense forecasts, assumed dealer attrition rates, the selection of an appropriate royalty rate, as well as the perceived risk associated with those forecasts in determining the Discount Rate. The costs of amortizable intangible assets, including dealer networks, are recognized over their expected useful lives, approximately ten years for the dealer networks, using the straight-line method. 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. Intangible assets not subject to amortization are assessed for impairment at least annually and whenever events or changes in circumstances indicate that it is more likely than not that an asset may be impaired. As part of the annual test, the Company may perform a qualitative, rather than quantitative, assessment to determine whether each trade name intangible asset is “more likely than not” impaired. In performing this qualitative analysis, the Company considers various factors, including macroeconomic events, industry and market events and cost related events. If the “more likely than not” criteria is not met, the impairment test for indefinite-lived intangible assets consists of a comparison of the fair value of the intangible asset with its carrying amount. An impairment loss is recognized for the amount by which the carrying value exceeds the fair value of the asset. The Company recognized no impairments related to other intangible assets for the year ended June 30, 2021. During the years ended June 30, 2020 and 2019, the Company performed quantitative impairment tests for intangible assets and determined that trade names attributable to the NauticStar and Crest reporting units were impaired. As a result, the Company recognized associated impairment charges during each of those fiscal years (see Note 6). |
Long-Lived Assets Other than Intangible Assets | Long-Lived Assets Other than Intangible 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 incurred no such impairments during the years ended June 30, 2021, 2020, and 2019. |
Product Warranties | Product Warranties — The Company offers warranties on the sale of certain products for periods of between one and five years. These warranties require us or our dealers to repair or replace defective products during the warranty period at no cost to the consumer. We estimate the costs that may be incurred under our basic limited warranty and record as a liability the amount of such costs at the time the product revenue is recognized. Factors that affect our warranty liability include the number of units sold, historical and anticipated rates of warranty claims, and cost per claim. We periodically assess the adequacy of the recorded warranty liabilities and adjust the amounts as actual claims are determined or as changes in the obligations become reasonably estimable. We also adjust our liability for specific warranty matters when they become known, and the exposure can be estimated. Future warranty claims may differ from our estimate of the warranty liability, which could lead to changes in the Company’s warranty liability in future periods. |
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. |
Research and Development | Research and Development — Research and development expenditures are expensed as incurred. Research and development expense for the years ended June 30, 2021, 2020, and 2019 was $6.8 million, $5.2 million, and $5.6 million, 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 for these matters. Losses are accrued based on 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 Debt Issuance Costs | Deferred Debt Issuance 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 years ended June 30, 2021, 2020, and 2019 the Company incurred deferred financing costs of $0.6 million, $0.3 million, and $0.7 million, respectively. For the years ended June 30, 2021, 2020, and 2019, the Company recorded related amortization expense of $0.6 million for each year. Additionally, for the year ended June 30, 2021, the Company recognized a loss on early extinguishment of debt of $0.7 million related to the debt refinancing in fiscal 2021 (Note 8). |
Share-Based Compensation | Share-Based Compensation — The Company records amounts for all share-based compensation, including grants of restricted stock awards, performance stock units, and nonqualified stock options over the vesting period in the consolidated statements of operations based on their fair values at the date of the grant. Forfeitures of share-based compensation, if any, are recognized as they occur. Share-based compensation costs are included in Selling and marketing and General and administrative expense in the consolidated statements of Operations. See Note 10 – Share-Based Compensation for a description of the Company's accounting for share-based compensation plans. |
Leases | Leases — The Company leases various equipment under operating lease arrangements. 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. Because the rates implicit in the Company's lease contracts are not readily determinable, the Company uses its incremental borrowing rate based on information available at the 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 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 11 for information regarding the Company’s leases. |
Advertising | Advertising — Advertising costs are expensed when the advertising first takes place. Advertising expense recognized during the years ended June 30, 2021, 2020, and 2019, was $4.8 million, $7.0 million, and $9.3 million, respectively, and is included in Selling and marketing expenses in the consolidated statements of operations. |
Fair Value Measurements | Fair Value Measurements — The Company measures certain of its 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 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 inputs that market participants would use in pricing an asset or liability. When measuring 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 Company’s most significant financial asset or liability measured at fair value on a recurring basis is its inventory repurchase contingent obligation (see “Revenue Recognition - Other Revenue Recognition Matters” and |
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. |
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 during the reporting period. Diluted earnings per common share include the effect of dilutive stock options, restricted stock awards, and performance stock units unless inclusion would not be dilutive. |
Postretirement Benefits | Postretirement Benefits – The Company has a defined contribution plan and makes contributions including matching and discretionary contributions which are based on various percentages of compensation, and in some instances are based on the amount of the employees' contributions to the plans. The expense related to the defined contribution plans was $1.7 million, $1.2 million, and $1.2 million for the years ended June 30, 2021, 2020, and 2019, respectively. |
New Accounting Pronouncements Issued, Adopted and Not Yet Adopted | New Accounting Pronouncements Issued And Adopted 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 . This guidance modifies the disclosure requirements on fair value measurements in Topic 820 by removing disclosures regarding transfers between Level 1 and Level 2 of the fair value hierarchy, by modifying the measurement uncertainty disclosure, and by requiring additional disclosures for Level 3 fair value measurements, among others. The Company adopted this guidance for its fiscal year beginning July 1, 2020. The adoption of this standard did not have a material impact on the consolidated financial statements. Current Expected Credit Loss — In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326) , which updated the ASC to use an impairment model that is based on expected losses rather than incurred losses. The Company adopted this guidance for its fiscal year beginning July 1, 2020. The adoption of this standard did not have an impact on the consolidated financial statements. New Accounting Pronouncements Issued But Not Yet Adopted Income Taxes — In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes . ASU 2019-12 simplifies the accounting for income taxes by removing certain exceptions to general principles in Income Taxes (Topic 740). It also clarifies and amends existing guidance to improve consistent application. The guidance is effective for fiscal years beginning after December 15, 2020. We are currently evaluating the impact of the new guidance on our consolidated financial statements. Reference Rate Reform — In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting . ASU 2020-04 provides optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships, and other transactions, subject to meeting certain criteria, that reference London Interbank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued because of reference rate reform. An entity may apply ASU 2020-04 as of any date from the beginning of an interim period that includes or is subsequent to March 12, 2020 through December 31, 2022. The Company expects that the adoption of this guidance will not have a material impact on the Company’s financial position, results of operations or cash flows. |
SIGNIFICANT ACCOUNTING POLICI_3
SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Jun. 30, 2021 | |
Accounting Policies [Abstract] | |
Schedule of Ranges of Asset Lives Used for Depreciation Purposes | 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 - 7 years |
REVENUE RECOGNITION (Tables)
REVENUE RECOGNITION (Tables) | 12 Months Ended |
Jun. 30, 2021 | |
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 net sales by major product category for each reportable segment. Year Ended June 30, 2021 MasterCraft NauticStar Crest Total Major Product Categories: Boats and trailers $ 349,247 $ 59,354 $ 101,208 $ 509,809 Parts 12,934 477 1,091 14,502 Other revenue 1,093 15 389 1,497 Total $ 363,274 $ 59,846 $ 102,688 $ 525,808 Year Ended June 30, 2020 MasterCraft NauticStar Crest Total Major Product Categories: Boats and trailers $ 236,108 $ 54,473 $ 60,888 $ 351,469 Parts 9,731 448 591 10,770 Other revenue 616 9 209 834 Total $ 246,455 $ 54,930 $ 61,688 $ 363,073 Year Ended June 30, 2019 MasterCraft NauticStar Crest (a) Total Major Product Categories: Boats and trailers $ 301,010 $ 77,896 $ 75,742 $ 454,648 Parts 9,471 85 498 10,054 Other revenue 1,349 14 316 1,679 Total $ 311,830 $ 77,995 $ 76,556 $ 466,381 (a) Crest was acquired on October 1, 2018 |
ACQUISITIONS (Tables)
ACQUISITIONS (Tables) | 12 Months Ended |
Jun. 30, 2021 | |
Business Combinations [Abstract] | |
Schedule of Purchase Price Allocation Based on Estimated Fair Values of Assets Acquired and Liabilities Assumed as of Acquisition Date | The following table is a summary of the assets acquired, liabilities assumed, and net cash consideration paid for Crest during fiscal 2019: Fair Value Accounts receivable $ 5,215 Inventories 9,853 Other current assets 179 Property, plant and equipment 1,840 Identifiable intangible assets (a) 35,245 Current liabilities (6,841 ) Fair value of assets acquired and liabilities assumed 45,491 Goodwill (a) 36,238 Net cash consideration paid $ 81,729 (a) The goodwill and other intangible assets recorded for the Crest acquisition are deductible for tax purposes. See Note 6 for additional information. |
Schedule of Fair Value Estimates of Identifiable Intangible Assets Acquired | Fair Value Estimated Useful Life (in years) Definite-lived intangible assets: Dealer network $ 18,000 10 Software 245 5 Indefinite-lived intangible asset: Trade name 17,000 Total identifiable intangible assets $ 35,245 |
Schedule of Pro Forma Financial Information | The unaudited pro forma financial information is not indicative of the results of operations that would have been achieved if the acquisition had taken place at the beginning of fiscal year 2019, or the results that may occur in the future: Fiscal Year Ended 2019 Net sales $ 487,374 Net income $ 21,619 Basic earnings per share $ 1.16 Diluted earnings per share $ 1.15 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 12 Months Ended |
Jun. 30, 2021 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | Inventories consisted of the following: As of June 30, 2021 2020 Raw materials and supplies $ 37,089 $ 18,318 Work in process 10,171 3,866 Finished goods 8,362 4,876 Obsolescence reserve (2,141 ) (1,424 ) Total inventories $ 53,481 $ 25,636 During 2021, the Company increased overall production levels, as well as increased safety stock as of June 30, 2021 to manage increased supply chain risks. |
PROPERTY, PLANT, AND EQUIPMENT
PROPERTY, PLANT, AND EQUIPMENT (Tables) | 12 Months Ended |
Jun. 30, 2021 | |
Property Plant And Equipment [Abstract] | |
Schedule of Property, Plant, and Equipment - Net | Property, plant, and equipment, net consisted of the following: As of June 30, 2021 2020 Land and improvements $ 5,955 $ 3,030 Buildings and improvements 35,890 22,366 Machinery and equipment 42,526 38,262 Furniture and fixtures 3,126 2,229 Construction in progress 5,737 1,312 Total property, plant, and equipment 93,234 67,199 Less accumulated depreciation (32,739 ) (26,718 ) Property, plant, and equipment, net $ 60,495 $ 40,481 |
GOODWILL AND OTHER INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Jun. 30, 2021 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill and Other Intangible Asset Impairment Charges | Goodwill and other intangible asset impairment charges for the years ended June 30, 2020 and 2019 were as follows: 2020 2019 NauticStar Crest Consolidated NauticStar Consolidated Goodwill $ 8,199 $ 36,238 $ 44,437 $ 28,000 $ 28,000 Trade name 5,000 7,000 12,000 3,000 3,000 Total $ 13,199 $ 43,238 $ 56,437 $ 31,000 $ 31,000 |
Schedule of Carrying Amounts of Goodwill | The carrying amounts of goodwill as of both June 30, 2021 and 2020, 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 (36,199 ) - Crest 36,238 (36,238 ) - Total $ 102,030 $ (72,437 ) $ 29,593 |
Schedule of Carrying Amount of Other Intangible Assets, Net | The following table presents the carrying amount of Other intangible assets, net as of June 30, 2021 and 2020. 2021 2020 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 $ (13,711 ) $ 25,789 $ 39,500 $ (9,810 ) $ 29,690 Software 245 (135 ) 110 245 (86 ) 159 39,745 (13,846 ) 25,899 39,745 (9,896 ) 29,849 Unamortized intangible assets Trade names 49,000 (15,000 ) 34,000 49,000 (15,000 ) 34,000 Total other intangible assets $ 88,745 $ (28,846 ) $ 59,899 $ 88,745 $ (24,896 ) $ 63,849 |
Schedule of Estimated Future Amortization Expense | The following table presents estimated future amortization expense for the next five fiscal years and thereafter. Fiscal years ending June 30, 2022 $ 3,950 2023 3,950 2024 3,806 2025 3,793 2026 3,793 and thereafter 6,607 Total $ 25,899 |
ACCRUED EXPENSES AND OTHER CU_2
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Tables) | 12 Months Ended |
Jun. 30, 2021 | |
Accrued Liabilities And Other Liabilities [Abstract] | |
Schedule of Accrued Expenses and Other Current Liabilities | Accrued expenses and other current liabilities consisted of the following: As of June 30, 2021 2020 Warranty $ 22,329 $ 20,004 Dealer incentives 10,634 9,180 Compensation and related accruals 6,046 1,488 Contract liabilities 1,848 559 Self-insurance 865 704 Inventory repurchase contingent obligation 471 1,132 Other 4,643 2,918 Total accrued expenses and other current liabilities $ 46,836 $ 35,985 |
Summary of Accrued Warranty Liability Activity | Accrued warranty liability activity was as follows: For the Years Ended June 30, 2021 2020 Balance at the beginning of the period $ 20,004 $ 17,205 Provisions 9,846 7,039 Payments made (9,116 ) (7,634 ) Aggregate changes for preexisting warranties 1,595 3,394 Balance at the end of the period $ 22,329 $ 20,004 |
LONG-TERM DEBT (Tables)
LONG-TERM DEBT (Tables) | 12 Months Ended |
Jun. 30, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of Long-Term Debt Outstanding | Long-term debt outstanding was as follows: As of June 30, 2021 2020 Revolving credit facility $ 33,728 $ 10,000 Term loans 60,000 99,993 Debt issuance costs on term loans (585 ) (1,395 ) Total debt 93,143 108,598 Less current portion of long-term debt 3,000 9,420 Less current portion of debt issuance costs on term loans (134 ) (488 ) Long-term debt, net of current portion $ 90,277 $ 99,666 |
Schedule of Maturities of Long-Term Debt | Maturities for the Term Loan and Revolving Credit Facility subsequent to June 30, 2021 are as follows: 2022 $ 3,000 2023 3,000 2024 4,500 2025 4,500 2026 78,728 Total $ 93,728 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Jun. 30, 2021 | |
Income Tax Disclosure [Abstract] | |
Components of Provision for Income Taxes | For the years ended June 30, the components of the provision for income taxes are as follows: 2021 2020 2019 Current income tax expense: Federal $ 12,231 $ 2,096 $ 10,405 State 3,057 666 1,892 Benefit of current year tax credits (469 ) (554 ) (171 ) Total current tax expense $ 14,819 $ 2,208 $ 12,126 Deferred tax expense (benefit): Federal $ 1,471 $ (8,887 ) $ (5,837 ) State (632 ) (886 ) (897 ) Total deferred tax expense (benefit) 839 (9,773 ) (6,734 ) Income tax expense (benefit) $ 15,658 $ (7,565 ) $ 5,392 |
Schedule of Difference Between Statutory and Effective Federal Tax Rate | The difference between the statutory and the effective federal tax rate for the periods below is attributable to the following: 2021 2020 2019 Statutory income tax rate 21.00 % 21.00 % 21.00 % State taxes (net of federal income tax benefit and valuation allowance) 1.66 % 1.67 % 2.48 % Tax credits (0.98 %) 4.49 % (3.39 %) Change in valuation allowance 0.19 % — (0.57 %) Permanent differences (0.69 %) (0.74 %) (2.54 %) Uncertain tax positions 0.67 % (2.49 %) 3.10 % Other (0.05 %) — 0.08 % Effective income tax rate 21.80 % 23.93 % 20.16 % |
Summary of Significant Components of Company's Deferred Tax Assets and Liabilities | As of June 30, 2021, and 2020, a summary of the significant components of the Company’s deferred tax assets and liabilities was as follows: 2021 2020 Deferred tax assets: Goodwill and other intangible asset basis difference $ 12,862 $ 13,776 Warranty reserves 5,258 4,616 Accrued selling 368 850 Unrecognized tax benefits 665 566 Stock compensation 761 402 Repurchase agreements 111 261 State net operating loss 433 14 Accrued compensation 529 68 Other 805 630 Total deferred tax assets 21,792 21,183 Valuation allowance (177 ) (65 ) Total deferred tax assets, net of the valuation allowance 21,615 21,118 Deferred tax liabilities: Depreciation (5,845 ) (4,839 ) Other (640 ) (199 ) Total deferred tax liabilities (6,485 ) (5,038 ) Net deferred tax assets $ 15,130 $ 16,080 |
Schedule of Reconciliation of Unrecognized Tax Benefits Excluding Accrued Amounts for Interest and Penalties | A reconciliation of the beginning and ending amount of unrecognized tax benefits, excluding accrued amounts for interest and penalties, is as follows: 2021 2020 Balance at July 1 $ 2,993 $ 2,504 Additions based on tax positions related to the current year 1,113 110 Additions for tax positions of prior years 77 713 Reductions for tax positions of prior years (412 ) (164 ) Settlements of tax positions from prior years (467 ) (170 ) Balance at June 30 $ 3,304 $ 2,993 |
SHARE-BASED COMPENSATION (Table
SHARE-BASED COMPENSATION (Tables) | 12 Months Ended |
Jun. 30, 2021 | |
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 for the years ended June 30, 2021, 2020 and 2019. 2021 2020 2019 Restricted stock awards $ 1,545 $ 1,285 $ 913 Performance stock units 1,439 (233 ) 563 Stock options - 9 201 Share-based compensation expense $ 2,984 $ 1,061 $ 1,677 |
Schedule of Income Tax Benefit Related to Share-based Compensation Expense by Award Type | The following table presents the income tax benefit related to share-based compensation expense recognized by award type. 2021 2020 2019 Restricted stock awards $ 350 $ 290 $ 217 Performance stock units 326 (53 ) 134 Stock options - 2 48 Share-based compensation expense $ 676 $ 239 $ 399 |
Summary of Restricted Stock Awards Activity | A summary of RSA activity for the years ended June 30, 2021, 2020 and 2019, is as follows: Number of Restricted Stock Awards Weighted Average Grant Date Fair Value Total Non-vested Restricted Stock Awards at June 30, 2018 43,310 $ 17.28 Granted 51,995 26.79 Vested (33,093 ) 21.54 Forfeited (8,408 ) 23.08 Total Non-vested Restricted Stock Awards at June 30, 2019 53,804 22.94 Granted 138,457 17.41 Vested (50,570 ) 20.09 Forfeited (34,797 ) 20.24 Total Non-vested Restricted Stock Awards at June 30, 2020 106,894 18.01 Granted 93,357 20.34 Vested (73,385 ) 18.54 Forfeited (8,673 ) 19.29 Total Non-vested Restricted Stock Awards at June 30, 2021 118,193 19.42 |
Summary of Performance Stock Units Activity | A summary of PSU activity for the years ending June 30, 2021, 2020 and 2019, is as follows: Number of Performance Stock Units Weighted Average Grant Date Fair Value Total Non-vested Performance Stock Units at June 30, 2018 59,328 $ 14.98 Granted 35,122 25.70 Vested (32,373 ) 11.85 Forfeited (11,456 ) 19.73 Total Non-vested Performance Stock Units at June 30, 2019 50,621 23.34 Granted 72,048 18.18 Vested (8,383 ) 19.40 Forfeited (46,882 ) 20.82 Total Non-vested Performance Stock Units at June 30, 2020 67,404 20.02 Granted 123,096 22.11 Vested (14,627 ) 26.29 Forfeited (15,588 ) 20.25 Total Non-vested Performance Stock Units at June 30, 2021 160,285 21.03 |
Summary of Nonqualified Stock Options Activity | A summary of NSO activity for the years ending June 30, 2021, 2020, and 2019 is as follows: Weighted Weighted Average Average Remaining Aggregate Exercise Contractual Intrinsic Shares Price Term (Yrs.) Value Outstanding at June 30, 2018 93,125 $ 10.70 7.1 $ 1,700 Granted - Exercised (10,563 ) 10.70 Forfeited or expired (1,703 ) 10.70 Outstanding at June 30, 2019 80,859 10.70 6.1 719 Granted - Exercised (48,467 ) 10.70 Forfeited or expired - Outstanding at June 30, 2020 32,392 10.70 5.1 270 Granted - Exercised (7,952 ) 10.70 Forfeited or expired - Outstanding at June 30, 2021 24,440 10.70 4.1 381 Fully vested and exercisable at June 30, 2021 24,440 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 12 Months Ended |
Jun. 30, 2021 | |
Earnings Per Share [Abstract] | |
Factors Used in Earnings Per Share Computation | The factors used in the earnings per share computation are as follows: 2021 2020 2019 Net income (loss) $ 56,170 $ (24,047 ) $ 21,354 Weighted average shares — basic 18,805,464 18,734,482 18,653,892 Dilutive effect of assumed exercises of stock options 14,814 — 45,799 Dilutive effect of assumed restricted share awards/units 131,243 — 68,516 Weighted average outstanding shares — diluted 18,951,521 18,734,482 18,768,207 Basic net income (loss) per share $ 2.99 $ (1.28 ) $ 1.14 Diluted net income (loss) per share $ 2.96 $ (1.28 ) $ 1.14 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 12 Months Ended |
Jun. 30, 2021 | |
Segment Reporting [Abstract] | |
Schedule of Operating Information for Reportable Segments | Selected financial information for the Company’s reportable segments was as follows: For the Year Ended June 30, 2021 MasterCraft NauticStar Crest Consolidated Net sales $ 363,274 $ 59,846 $ 102,688 $ 525,808 Operating income (loss) 65,038 (2,690 ) 13,605 75,953 Depreciation and amortization 5,865 3,262 2,503 11,630 Purchases of property, plant and equipment 24,327 2,643 892 27,862 For the Year Ended June 30, 2020 MasterCraft NauticStar Crest Consolidated Net sales $ 246,455 $ 54,930 $ 61,688 $ 363,073 Operating income (loss) 33,229 (17,681 ) (42,115 ) (26,567 ) Depreciation and amortization 4,679 3,454 2,394 10,527 Goodwill and other intangible asset impairment — 13,199 43,238 56,437 Purchases of property, plant and equipment 6,193 2,804 5,244 14,241 For the Year Ended June 30, 2019 MasterCraft NauticStar Crest (a) Consolidated Net sales $ 311,830 $ 77,995 76,556 $ 466,381 Operating income (loss) 53,989 (27,785 ) 7,055 33,259 Depreciation and amortization 3,481 2,684 1,622 7,787 Goodwill and other intangible asset impairment — 31,000 — 31,000 Purchases of property, plant and equipment 11,730 2,069 265 14,064 (a) Crest was acquired on October 1, 2018. The following table presents total assets for the Company’s reportable segments as of June 30, 2021, and 2020. 2021 2020 Assets: MasterCraft $ 353,088 $ 294,139 NauticStar 44,181 36,720 Crest 42,204 40,077 Eliminations (163,013 ) (163,013 ) Total assets $ 276,460 $ 207,923 |
QUARTERLY FINANCIAL REPORTING_2
QUARTERLY FINANCIAL REPORTING (UNAUDITED) (Tables) | 12 Months Ended |
Jun. 30, 2021 | |
Quarterly Financial Information Disclosure [Abstract] | |
Summary of Quarterly Financial Information | The following tables set forth summary quarterly financial information for the years ended June 30, 2021 and 2020. Due to effects of rounding, the quarterly results presented may not sum to the fiscal year results presented. Fiscal Quarter Ended Fiscal Year Ended June 30, April 4, January 3, October 4, June 30, 2021 2021 2021 2020 2021 Net sales $ 155,532 $ 147,854 $ 118,677 $ 103,745 $ 525,808 Gross profit 37,241 37,227 29,273 26,230 129,971 Operating income 23,041 22,563 16,945 13,404 75,953 Net income $ 16,534 $ 17,568 $ 12,501 $ 9,567 $ 56,170 Basic earnings per common share $ 0.88 $ 0.93 $ 0.66 $ 0.51 $ 2.99 Diluted earnings per common share $ 0.87 $ 0.93 $ 0.66 $ 0.51 $ 2.96 Weighted average shares used for computation of: Basic earnings per common share 18,822,231 18,817,975 18,807,316 18,774,336 18,805,464 Diluted earnings per common share 19,021,220 18,989,629 18,928,408 18,866,826 18,951,521 Fiscal Quarter Ended Fiscal Year Ended June 30, March 29, December 29, September 29, June 30, 2020 2020 2019 2019 2020 Net sales $ 51,094 $ 102,562 $ 99,628 $ 109,789 $ 363,073 Gross profit 7,407 21,274 21,142 25,533 75,356 Goodwill and other intangible asset impairment (a) — 56,437 — — 56,437 Operating income (loss) (2,422 ) (47,177 ) 10,335 12,697 (26,567 ) Net income (loss) $ (2,836 ) $ (36,713 ) $ 6,879 $ 8,623 $ (24,047 ) Basic earnings (loss) per common share $ (0.15 ) $ (1.96 ) $ 0.37 $ 0.46 $ (1.28 ) Diluted earnings (loss) per common share $ (0.15 ) $ (1.96 ) $ 0.37 $ 0.46 $ (1.28 ) Weighted average shares used for computation of: Basic earnings per common share 18,743,915 18,739,480 18,730,688 18,723,845 18,734,482 Diluted earnings per common share 18,743,915 18,739,480 18,770,783 18,770,756 18,734,482 (a) Goodwill and other intangible asset impairment charges are discussed in Note 6 . |
SIGNIFICANT ACCOUNTING POLICI_4
SIGNIFICANT ACCOUNTING POLICIES - Revenue Recognition and Shipping and Handling Costs - Additional Information (Details) | 12 Months Ended |
Jun. 30, 2021 | |
Revenue Recognition | |
Maximum term of repurchase commitments | 30 months |
Maximum | |
Revenue Recognition | |
Term of reimbursement program | 9 months |
SIGNIFICANT ACCOUNTING POLICI_5
SIGNIFICANT ACCOUNTING POLICIES - Cash and Cash Equivalents - Additional Information (Details) - USD ($) | Jun. 30, 2021 | Jun. 30, 2020 |
Cash and cash equivalents | ||
Cash equivalents | $ 0 | $ 0 |
SIGNIFICANT ACCOUNTING POLICI_6
SIGNIFICANT ACCOUNTING POLICIES - Concentrations of Credit and Business Risk - Additional Information (Details) - Supplier Concentration Risk - Cost of Goods - Engine Supplier $ in Millions | 12 Months Ended | ||
Jun. 30, 2021USD ($)item | Jun. 30, 2020USD ($)item | Jun. 30, 2019USD ($)item | |
MasterCraft | |||
Concentrations of Credit and Business Risk | |||
Number of vendors | item | 1 | 1 | 1 |
Purchases during period | $ | $ 40.6 | $ 27.6 | $ 39.3 |
NauticStar | |||
Concentrations of Credit and Business Risk | |||
Number of vendors | item | 1 | 1 | 1 |
Purchases during period | $ | $ 14.8 | $ 15.2 | $ 23.7 |
Crest | |||
Concentrations of Credit and Business Risk | |||
Number of vendors | item | 1 | 1 | 1 |
Purchases during period | $ | $ 23.6 | $ 15.5 | $ 20.4 |
SIGNIFICANT ACCOUNTING POLICI_7
SIGNIFICANT ACCOUNTING POLICIES - Schedule of Ranges of Asset Lives Used for Depreciation Purposes (Details) | 12 Months Ended |
Jun. 30, 2021 | |
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 | 7 years |
SIGNIFICANT ACCOUNTING POLICI_8
SIGNIFICANT ACCOUNTING POLICIES - Goodwill and Other Intangible Assets - Additional Information (Details) | 12 Months Ended | ||
Jun. 30, 2021USD ($)segmentUnit | Jun. 30, 2020USD ($)Unit | Jun. 30, 2019USD ($)Unit | |
Goodwill and Other Intangible Assets | |||
Number of operating segments | segment | 3 | ||
Number of reporting units | Unit | 3 | 3 | 3 |
Impairment of goodwill | $ 0 | $ 44,437,000 | $ 28,000,000 |
Impairment of other indefinite-lived intangible assets | 0 | ||
Impairment of long-lived assets other than intangible assets | $ 0 | $ 0 | $ 0 |
Dealer network | |||
Goodwill and Other Intangible Assets | |||
Expected useful lives of intangible assets | 10 years |
SIGNIFICANT ACCOUNTING POLICI_9
SIGNIFICANT ACCOUNTING POLICIES - Warranties, Research and Development, Deferred Debt Issuance Costs, and Other - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | |
Research and Development | |||
Research and development expenditures | $ 6,800 | $ 5,200 | $ 5,600 |
Deferred Debt Issuance Costs | |||
Deferred financing costs incurred | 600 | 300 | 700 |
Amortization of deferred financing costs | 600 | 600 | 600 |
Loss on extinguishment of debt | $ 733 | ||
Leases | |||
Lessee, operating lease, option to extend [true false] | true | ||
Lessee, operating lease, option to terminate [true false] | true | ||
Advertising | |||
Advertising costs | $ 4,800 | 7,000 | 9,300 |
Postretirement Benefits | |||
Defined contribution plan expense | $ 1,700 | $ 1,200 | $ 1,200 |
Minimum | |||
Product Warranties | |||
Product warranty term | 1 year | ||
Maximum | |||
Product Warranties | |||
Product warranty term | 5 years |
SIGNIFICANT ACCOUNTING POLIC_10
SIGNIFICANT ACCOUNTING POLICIES - New Accounting Pronouncements Issued And Adopted - Additional Information (Details) | Jun. 30, 2021 |
ASU 2018-13 | |
New Accounting Pronouncements Issued And Adopted | |
Change in accounting principle, accounting standards update, adopted [true false] | true |
Change in accounting principle, accounting standards update, adoption date | Jul. 1, 2020 |
Change in accounting principle, accounting standards update, immaterial effect [true false] | true |
ASU 2016-13 | |
New Accounting Pronouncements Issued And Adopted | |
Change in accounting principle, accounting standards update, adopted [true false] | true |
Change in accounting principle, accounting standards update, adoption date | Jul. 1, 2020 |
Change in accounting principle, accounting standards update, immaterial effect [true false] | true |
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 | 12 Months Ended | |||||||||
Jun. 30, 2021 | Apr. 04, 2021 | Jan. 03, 2021 | Oct. 04, 2020 | Jun. 30, 2020 | Mar. 29, 2020 | Dec. 29, 2019 | Sep. 29, 2019 | Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | |
Revenue by Categories | |||||||||||
Revenue | $ 155,532 | $ 147,854 | $ 118,677 | $ 103,745 | $ 51,094 | $ 102,562 | $ 99,628 | $ 109,789 | $ 525,808 | $ 363,073 | $ 466,381 |
MasterCraft | |||||||||||
Revenue by Categories | |||||||||||
Revenue | 363,274 | 246,455 | 311,830 | ||||||||
NauticStar | |||||||||||
Revenue by Categories | |||||||||||
Revenue | 59,846 | 54,930 | 77,995 | ||||||||
Crest | |||||||||||
Revenue by Categories | |||||||||||
Revenue | 102,688 | 61,688 | 76,556 | ||||||||
Boats and trailers | |||||||||||
Revenue by Categories | |||||||||||
Revenue | 509,809 | 351,469 | 454,648 | ||||||||
Boats and trailers | MasterCraft | |||||||||||
Revenue by Categories | |||||||||||
Revenue | 349,247 | 236,108 | 301,010 | ||||||||
Boats and trailers | NauticStar | |||||||||||
Revenue by Categories | |||||||||||
Revenue | 59,354 | 54,473 | 77,896 | ||||||||
Boats and trailers | Crest | |||||||||||
Revenue by Categories | |||||||||||
Revenue | 101,208 | 60,888 | 75,742 | ||||||||
Parts | |||||||||||
Revenue by Categories | |||||||||||
Revenue | 14,502 | 10,770 | 10,054 | ||||||||
Parts | MasterCraft | |||||||||||
Revenue by Categories | |||||||||||
Revenue | 12,934 | 9,731 | 9,471 | ||||||||
Parts | NauticStar | |||||||||||
Revenue by Categories | |||||||||||
Revenue | 477 | 448 | 85 | ||||||||
Parts | Crest | |||||||||||
Revenue by Categories | |||||||||||
Revenue | 1,091 | 591 | 498 | ||||||||
Other | |||||||||||
Revenue by Categories | |||||||||||
Revenue | 1,497 | 834 | 1,679 | ||||||||
Other | MasterCraft | |||||||||||
Revenue by Categories | |||||||||||
Revenue | 1,093 | 616 | 1,349 | ||||||||
Other | NauticStar | |||||||||||
Revenue by Categories | |||||||||||
Revenue | 15 | 9 | 14 | ||||||||
Other | Crest | |||||||||||
Revenue by Categories | |||||||||||
Revenue | $ 389 | $ 209 | $ 316 |
REVENUE RECOGNITION - Additiona
REVENUE RECOGNITION - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | |
Contract liabilities | |||
Customer contract liabilities | $ 1,848 | $ 559 | |
Contract liabilities with customer, revenue recognized during the period | 600 | ||
Accrued Expenses and Other Current Liabilities | |||
Contract liabilities | |||
Customer contract liabilities | $ 1,800 | ||
MasterCraft | Net Sales | Geographical concentration | Outside of North America | |||
Revenue by Categories | |||
Net sales, percentage | 4.50% | 4.80% | 5.20% |
ACQUISITIONS - Additional Infor
ACQUISITIONS - Additional Information (Details) | Oct. 24, 2019USD ($) | Oct. 01, 2018USD ($) | Jan. 31, 2020USD ($) | Jun. 30, 2021USD ($)item | Jun. 30, 2019USD ($) |
Business Acquisition [Line Items] | |||||
Cash paid, net of cash acquired | $ 81,729,000 | ||||
Crest | |||||
Business Acquisition [Line Items] | |||||
Cash paid, net of cash acquired | $ 81,700,000 | ||||
Proceeds from term loan | $ 80,000 | ||||
Lease expiration date | Sep. 30, 2028 | ||||
Number of consecutive lease extensions available | item | 4 | ||||
Term of extension | 5 years | ||||
Annual rent, first five years | $ 300,000 | ||||
Annual rent, remaining five years | $ 400,000 | ||||
Facility purchased under Purchase Option | $ 4,100,000 | ||||
Crest | Parts Supplier | |||||
Business Acquisition [Line Items] | |||||
Product purchases | $ 1,800,000 | $ 2,800,000 |
ACQUISITIONS - Schedule of Purc
ACQUISITIONS - Schedule of Purchase Price Allocation Based on Estimated Fair Values of Assets Acquired and Liabilities Assumed as of Acquisition Date (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Jun. 30, 2020 | Oct. 01, 2018 | |
Business Acquisition [Line Items] | ||||
Goodwill (Note 6) | $ 29,593 | $ 29,593 | ||
Crest | ||||
Business Acquisition [Line Items] | ||||
Accounts receivable | $ 5,215 | |||
Inventories | 9,853 | |||
Other current assets | 179 | |||
Property, plant and equipment | 1,840 | |||
Identifiable intangible assets(a) | [1] | 35,245 | ||
Current liabilities | (6,841) | |||
Fair value of assets acquired and liabilities assumed | 45,491 | |||
Goodwill (Note 6) | [1] | 36,238 | ||
Net cash consideration paid | $ 81,729 | |||
[1] | The goodwill and other intangible assets recorded for the Crest acquisition are deductible for tax purposes. See Note 6 for additional information. |
ACQUISITIONS - Schedule of Fair
ACQUISITIONS - Schedule of Fair Value Estimates of Identifiable Intangible Assets Acquired (Details) - USD ($) $ in Thousands | Oct. 01, 2018 | Jun. 30, 2021 | |
Crest | |||
Identifiable intangible assets | |||
Total identifiable intangible assets | [1] | $ 35,245 | |
Crest | Trade Names | |||
Identifiable intangible assets | |||
Indefinite-lived intangible asset | 17,000 | ||
Dealer network | |||
Identifiable intangible assets | |||
Estimated useful life | 10 years | ||
Dealer network | Crest | |||
Identifiable intangible assets | |||
Definite-lived intangible assets | $ 18,000 | ||
Estimated useful life | 10 years | ||
Software | Crest | |||
Identifiable intangible assets | |||
Definite-lived intangible assets | $ 245 | ||
Estimated useful life | 5 years | ||
[1] | The goodwill and other intangible assets recorded for the Crest acquisition are deductible for tax purposes. See Note 6 for additional information. |
ACQUISITIONS - Schedule of Pro
ACQUISITIONS - Schedule of Pro Forma Financial Information (Details) $ / shares in Units, $ in Thousands | 12 Months Ended |
Jun. 30, 2019USD ($)$ / shares | |
Pro Forma financial information | |
Net sales | $ | $ 487,374 |
Net income | $ | $ 21,619 |
Basic earnings per share | $ / shares | $ 1.16 |
Diluted earnings per share | $ / shares | $ 1.15 |
INVENTORIES - Schedule of Inven
INVENTORIES - Schedule of Inventories (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Jun. 30, 2020 |
Inventory Disclosure [Abstract] | ||
Raw materials and supplies | $ 37,089 | $ 18,318 |
Work in process | 10,171 | 3,866 |
Finished goods | 8,362 | 4,876 |
Obsolescence reserve | (2,141) | (1,424) |
Total inventories | $ 53,481 | $ 25,636 |
PROPERTY, PLANT, AND EQUIPMEN_2
PROPERTY, PLANT, AND EQUIPMENT - Schedule of Property, Plant, and Equipment - Net (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Jun. 30, 2020 |
Property, plant, and equipment | ||
Total property, plant, and equipment | $ 93,234 | $ 67,199 |
Less accumulated depreciation | (32,739) | (26,718) |
Property, plant, and equipment, net | 60,495 | 40,481 |
Land and improvements | ||
Property, plant, and equipment | ||
Total property, plant, and equipment | 5,955 | 3,030 |
Buildings and improvements | ||
Property, plant, and equipment | ||
Total property, plant, and equipment | 35,890 | 22,366 |
Machinery and equipment | ||
Property, plant, and equipment | ||
Total property, plant, and equipment | 42,526 | 38,262 |
Furniture and fixtures | ||
Property, plant, and equipment | ||
Total property, plant, and equipment | 3,126 | 2,229 |
Construction in progress | ||
Property, plant, and equipment | ||
Total property, plant, and equipment | $ 5,737 | $ 1,312 |
PROPERTY, PLANT, AND EQUIPMEN_3
PROPERTY, PLANT, AND EQUIPMENT - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | Oct. 31, 2020 | |
Property, plant, and equipment | ||||
Depreciation | $ 7.7 | $ 6.6 | $ 4.3 | |
Merritt Island, Florida | ||||
Property, plant, and equipment | ||||
Purchase price | $ 14.2 |
GOODWILL AND OTHER INTANGIBLE_3
GOODWILL AND OTHER INTANGIBLE ASSETS - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 29, 2020 | Jun. 30, 2020 | Jun. 30, 2019 | |
Goodwill [Line Items] | |||
Goodwill and other intangible asset impairment | $ 56,437 | $ 56,437 | $ 31,000 |
NauticStar and Crest Segments | |||
Goodwill [Line Items] | |||
Goodwill and other intangible asset impairment | $ 56,400 | ||
NauticStar | |||
Goodwill [Line Items] | |||
Goodwill and other intangible asset impairment | $ 13,199 | $ 31,000 |
GOODWILL AND OTHER INTANGIBLE_4
GOODWILL AND OTHER INTANGIBLE ASSETS - Schedule of Goodwill and Other Intangible Asset Impairment Charges (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 29, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | |
Goodwill [Line Items] | ||||
Impairment of goodwill | $ 0 | $ 44,437,000 | $ 28,000,000 | |
Trade name | 12,000,000 | 3,000,000 | ||
Total | $ 56,437,000 | 56,437,000 | 31,000,000 | |
NauticStar | ||||
Goodwill [Line Items] | ||||
Impairment of goodwill | 8,199,000 | 28,000,000 | ||
Trade name | 5,000,000 | 3,000,000 | ||
Total | 13,199,000 | $ 31,000,000 | ||
Crest | ||||
Goodwill [Line Items] | ||||
Impairment of goodwill | 36,238,000 | |||
Trade name | 7,000,000 | |||
Total | $ 43,238,000 |
GOODWILL AND OTHER INTANGIBLE_5
GOODWILL AND OTHER INTANGIBLE ASSETS - Schedule of Carrying Amounts of Goodwill (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Jun. 30, 2020 |
Goodwill [Line Items] | ||
Gross Amount | $ 102,030 | $ 102,030 |
Accumulated Impairment Losses | (72,437) | (72,437) |
Total | 29,593 | 29,593 |
MasterCraft | ||
Goodwill [Line Items] | ||
Gross Amount | 29,593 | 29,593 |
Total | 29,593 | 29,593 |
NauticStar | ||
Goodwill [Line Items] | ||
Gross Amount | 36,199 | 36,199 |
Accumulated Impairment Losses | (36,199) | (36,199) |
Crest | ||
Goodwill [Line Items] | ||
Gross Amount | 36,238 | 36,238 |
Accumulated Impairment Losses | $ (36,238) | $ (36,238) |
GOODWILL AND OTHER INTANGIBLE_6
GOODWILL AND OTHER INTANGIBLE ASSETS - Schedule of Carrying Amount of Other Intangible Assets, Net (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
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 | (13,846) | (9,896) |
Amortized intangible assets, Other intangible assets, net | 25,899 | 29,849 |
Unamortized intangible assets, Accumulated Amortization / Impairment | 0 | |
Gross Amount | 88,745 | 88,745 |
Accumulated Amortization / Impairment | (28,846) | (24,896) |
Other intangible assets, net | 59,899 | 63,849 |
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 | (13,711) | (9,810) |
Amortized intangible assets, Other intangible assets, net | 25,789 | 29,690 |
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 | (135) | (86) |
Amortized intangible assets, Other intangible assets, net | 110 | 159 |
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 | (15,000) | (15,000) |
Unamortized intangible assets, Other intangible assets, net | $ 34,000 | $ 34,000 |
GOODWILL AND OTHER INTANGIBLE_7
GOODWILL AND OTHER INTANGIBLE ASSETS - Other Intangible Assets - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |||
Amortization of other intangible assets | $ 3,948 | $ 3,948 | $ 3,492 |
GOODWILL AND OTHER INTANGIBLE_8
GOODWILL AND OTHER INTANGIBLE ASSETS - Schedule of Estimated Future Amortization Expense (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Jun. 30, 2020 |
Estimated amortization expense | ||
2022 | $ 3,950 | |
2023 | 3,950 | |
2024 | 3,806 | |
2025 | 3,793 | |
2026 | 3,793 | |
and thereafter | 6,607 | |
Amortized intangible assets, Other intangible assets, net | $ 25,899 | $ 29,849 |
ACCRUED EXPENSES AND OTHER CU_3
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES - Schedule of Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Jun. 30, 2020 |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | ||
Warranty | $ 22,329 | $ 20,004 |
Dealer incentives | 10,634 | 9,180 |
Compensation and related accruals | 6,046 | 1,488 |
Customer contract liabilities | 1,848 | 559 |
Self-insurance | 865 | 704 |
Inventory repurchase contingent obligation | $ 471 | $ 1,132 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | Total accrued expenses and other current liabilities | Total accrued expenses and other current liabilities |
Other | $ 4,643 | $ 2,918 |
Total accrued expenses and other current liabilities | $ 46,836 | $ 35,985 |
ACCRUED EXPENSES AND OTHER CU_4
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES - Summary of Accrued Warranty Liability Activity (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Roll forward of the accrued warranty liability | ||
Balance at the beginning of the period | $ 20,004 | $ 17,205 |
Provisions | 9,846 | 7,039 |
Payments made | (9,116) | (7,634) |
Aggregate changes for preexisting warranties | 1,595 | 3,394 |
Balance at the end of the period | $ 22,329 | $ 20,004 |
LONG-TERM DEBT - Schedule of Lo
LONG-TERM DEBT - Schedule of Long-Term Debt Outstanding (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Jun. 30, 2020 |
Long-term debt | ||
Total debt | $ 93,143 | $ 108,598 |
Less current portion of long-term debt | 3,000 | 9,420 |
Long-term debt, net of current portion | 90,277 | 99,666 |
Revolving Credit Facility | ||
Long-term debt | ||
Long-term debt | 33,728 | 10,000 |
Term Loans | ||
Long-term debt | ||
Long-term debt | 60,000 | 99,993 |
Debt issuance costs on term loans | (585) | (1,395) |
Less current portion of debt issuance costs on term loans | $ (134) | $ (488) |
LONG-TERM DEBT - Previously Exi
LONG-TERM DEBT - Previously Existing Credit Facility - Additional Information (Details) - USD ($) | Oct. 26, 2020 | May 07, 2020 | Jun. 30, 2021 | Oct. 01, 2018 |
Fourth Amended Credit Agreement | ||||
Long-term debt | ||||
Maximum borrowing capacity | $ 190,000 | |||
Fourth Amended Credit Agreement | Term Loan One | ||||
Long-term debt | ||||
Loan commitment | 75,000 | |||
Fourth Amended Credit Agreement | Revolving Credit Facility | ||||
Long-term debt | ||||
Maximum borrowing capacity | 35,000 | |||
Loan commitment | 80,000 | |||
Fourth Amended Credit Agreement | Term Loan Two | ||||
Long-term debt | ||||
Loan commitment | $ 80,000 | |||
Amendment | ||||
Long-term debt | ||||
Variable margin rate | 0.50% | |||
Variable rate basis description | The changes effected by the Amendment include, among others, the temporary removal and replacement of the Company’s financial covenants, the addition of a 50 basis point floor on LIBOR, modifications to the range of applicable LIBOR and prime interest rate margins, and a revision of the total net leverage ratio calculation. | |||
Debt covenant description | On May 7, 2020, the Company entered into Amendment No. 3 to the Fourth Amended Credit Agreement (the “Amendment”). The changes effected by the Amendment include, among others, the temporary removal and replacement of the Company’s financial covenants, the addition of a 50 basis point floor on LIBOR, modifications to the range of applicable LIBOR and prime interest rate margins, and a revision of the total net leverage ratio calculation. Under the Amendment, the total net leverage ratio covenant and fixed charge coverage ratio covenant of the Fourth Amended Credit Agreement were temporarily replaced with three separate covenants: (i) an interest coverage ratio, (ii) a minimum liquidity threshold, and (iii) a maximum unfinanced capital expenditures limitation (the “Package of Financial Covenants”). The Package of Financial Covenants were in place through the quarter ended March 31, 2021, at which time the total net leverage ratio covenant and fixed charge coverage ratio covenant were reinstated and the Package of Financial Covenants sunsetted, and with the minimum liquidity covenant being tested on the last day of each fiscal month through May 31, 2021. In addition, the total net leverage ratio calculation was temporarily revised to include all unrestricted cash balances, without limitation, until June 30, 2021. | |||
Amendment | Prime Rate | Minimum | ||||
Long-term debt | ||||
Variable margin rate | 0.50% | |||
Amendment | Prime Rate | Maximum | ||||
Long-term debt | ||||
Variable margin rate | 2.25% | |||
Amendment | LIBOR | ||||
Long-term debt | ||||
Variable margin rate | 0.50% | |||
Amendment | LIBOR | Minimum | ||||
Long-term debt | ||||
Variable margin rate | 1.50% | |||
Amendment | LIBOR | Maximum | ||||
Long-term debt | ||||
Variable margin rate | 3.25% | |||
Amendment No. 4 | ||||
Long-term debt | ||||
Debt covenant description | On October 26, 2020, the Company entered into Amendment No. 4 and Joinder to the Fourth Amended Credit Agreement (the “Amendment No. 4”). In conjunction with the new Merritt Island Facility purchase (see Note 5), the assets were organized in a new wholly-owned subsidiary of the Company. The changes effected by Amendment No. 4 added this new subsidiary as a borrower under the Fourth Amended Credit Agreement. |
LONG-TERM DEBT - Current Credit
LONG-TERM DEBT - Current Credit Facility - Additional Information (Details) - USD ($) $ in Thousands | Jun. 28, 2021 | Jun. 30, 2021 | Jun. 30, 2020 |
Long-term debt | |||
Loss on extinguishment of debt | $ (733) | ||
Term Loans | |||
Long-term debt | |||
Long-term debt | 60,000 | $ 99,993 | |
Revolving Credit Facility | |||
Long-term debt | |||
Long-term debt | $ 33,728 | $ 10,000 | |
Senior Secured Credit Facility | |||
Long-term debt | |||
Maximum borrowing capacity | $ 160,000 | ||
Loss on extinguishment of debt | (700) | ||
Unamortized deferred financing costs | 500 | ||
Additional capitalized amount | $ 600 | ||
Effective interest rate | 1.38% | 3.75% | |
Senior Secured Credit Facility | Prime Rate | Minimum | |||
Long-term debt | |||
Variable margin rate | 0.25% | ||
Senior Secured Credit Facility | Prime Rate | Maximum | |||
Long-term debt | |||
Variable margin rate | 1.00% | ||
Senior Secured Credit Facility | LIBOR | Minimum | |||
Long-term debt | |||
Variable margin rate | 1.25% | ||
Senior Secured Credit Facility | LIBOR | Maximum | |||
Long-term debt | |||
Variable margin rate | 2.00% | ||
Senior Secured Credit Facility | Term Loans | |||
Long-term debt | |||
Long-term debt | $ 60,000 | ||
Senior Secured Credit Facility | Revolving Credit Facility | |||
Long-term debt | |||
Maximum borrowing capacity | $ 100,000 | ||
Senior Secured Credit Facility | Revolving Credit Facility | Minimum | |||
Long-term debt | |||
Commitment fee percentage | 0.15% | ||
Senior Secured Credit Facility | Revolving Credit Facility | Maximum | |||
Long-term debt | |||
Commitment fee percentage | 0.30% |
LONG-TERM DEBT - Revolving Cred
LONG-TERM DEBT - Revolving Credit Facility - Additional Information (Details) - USD ($) $ in Thousands | Jun. 28, 2021 | Mar. 19, 2020 | Oct. 31, 2020 | Jun. 30, 2021 | Jun. 30, 2020 |
Debt Instrument [Line Items] | |||||
Borrowings on revolving credit facility | $ 56,228 | $ 35,000 | |||
Revolving Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Borrowings on revolving credit facility | $ 33,700 | ||||
Outstanding borrowings | 33,700 | ||||
Remaining borrowing capacity | $ 66,300 | ||||
Revolving Credit Facility | Fourth Amended Credit Agreement | |||||
Debt Instrument [Line Items] | |||||
Borrowings on revolving credit facility | $ 35,000 | $ 20,000 | |||
Outstanding borrowings | $ 10,000 |
LONG-TERM DEBT - Schedule of Ma
LONG-TERM DEBT - Schedule of Maturities of Long-Term Debt (Details) - Senior Secured Term Loan and Revolving Credit Facility $ in Thousands | Jun. 30, 2021USD ($) |
Long-term debt maturities | |
2022 | $ 3,000 |
2023 | 3,000 |
2024 | 4,500 |
2025 | 4,500 |
2026 | 78,728 |
Total | $ 93,728 |
INCOME TAXES - Additional Infor
INCOME TAXES - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | |
Earnings before income taxes by jurisdiction | |||
Income before income taxes, foreign | $ 0.1 | $ 0.1 | $ 0.1 |
Operating Loss Carryforwards | |||
Operating loss carry forwards expires | 3.4 | ||
Reconciliation of the beginning and ending amount of unrecognized tax benefits | |||
Unrecognized tax benefits that would impact effective tax rate | 2.7 | 2.1 | |
Benefit and expense from interest and penalties recorded | 0.2 | 0.3 | $ 0.1 |
Amount of unrecognized benefits expected to increase over the next twelve months | 1.8 | ||
Unrecognized tax positions | |||
Reconciliation of the beginning and ending amount of unrecognized tax benefits | |||
Accrued for interest and penalties | 0.5 | $ 0.7 | |
State | |||
Operating Loss Carryforwards | |||
Net operating loss carryforwards | 10.5 | ||
Foreign | |||
Operating Loss Carryforwards | |||
Net operating loss carryforwards | $ 0.2 |
INCOME TAXES - Components of Pr
INCOME TAXES - Components of Provision for Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | |
Current income tax expense: | |||
Federal | $ 12,231 | $ 2,096 | $ 10,405 |
State | 3,057 | 666 | 1,892 |
Benefit of current year tax credits | (469) | (554) | (171) |
Total current tax expense | 14,819 | 2,208 | 12,126 |
Deferred tax expense (benefit): | |||
Federal | 1,471 | (8,887) | (5,837) |
State | (632) | (886) | (897) |
Total deferred tax expense (benefit) | 839 | (9,773) | (6,734) |
Income tax expense (benefit) | $ 15,658 | $ (7,565) | $ 5,392 |
INCOME TAXES - Schedule of Diff
INCOME TAXES - Schedule of Difference Between Statutory and Effective Federal Tax Rate (Details) | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | |
Difference between the statutory and the effective federal tax rate | |||
Statutory income tax rate | 21.00% | 21.00% | 21.00% |
State taxes (net of federal income tax benefit and valuation allowance) | 1.66% | 1.67% | 2.48% |
Tax credits | (0.98%) | 4.49% | (3.39%) |
Change in valuation allowance | 0.19% | (0.57%) | |
Permanent differences | (0.69%) | (0.74%) | (2.54%) |
Uncertain tax positions | 0.67% | (2.49%) | 3.10% |
Other | (0.05%) | 0.08% | |
Effective income tax rate | 21.80% | 23.93% | 20.16% |
INCOME TAXES - Summary of Signi
INCOME TAXES - Summary of Significant Components of Company's Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Jun. 30, 2020 |
Deferred tax assets: | ||
Goodwill and other intangible asset basis difference | $ 12,862 | $ 13,776 |
Warranty reserves | 5,258 | 4,616 |
Accrued selling | 368 | 850 |
Unrecognized tax benefits | 665 | 566 |
Stock compensation | 761 | 402 |
Repurchase agreements | 111 | 261 |
State net operating loss | 433 | 14 |
Accrued compensation | 529 | 68 |
Other | 805 | 630 |
Total deferred tax assets | 21,792 | 21,183 |
Valuation allowance | (177) | (65) |
Total deferred tax assets, net of the valuation allowance | 21,615 | 21,118 |
Deferred tax liabilities: | ||
Depreciation | (5,845) | (4,839) |
Other | (640) | (199) |
Total deferred tax liabilities | (6,485) | (5,038) |
Net deferred tax assets | $ 15,130 | $ 16,080 |
INCOME TAXES - Schedule of Reco
INCOME TAXES - Schedule of Reconciliation of Unrecognized Tax Benefits Excluding Accrued Amounts for Interest and Penalties (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Reconciliation of the beginning and ending amount of unrecognized tax benefits | ||
Balance at beginning of period | $ 2,993 | $ 2,504 |
Additions based on tax positions related to the current year | 1,113 | 110 |
Additions for tax positions of prior years | 77 | 713 |
Reductions for tax positions of prior years | (412) | (164) |
Settlements of tax positions from prior years | (467) | (170) |
Balance at end of period | $ 3,304 | $ 2,993 |
SHARE-BASED COMPENSATION - 2015
SHARE-BASED COMPENSATION - 2015 Equity Incentive Plan - Additional Information (Details) | Jun. 30, 2021shares |
2015 Plan | |
Stock-Based Compensation | |
Shares available for grant | 1,305,458 |
SHARE-BASED COMPENSATION - Comp
SHARE-BASED COMPENSATION - Components of Share-based Compensation Expense by Award Type (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | |
Stock-Based Compensation | |||
Share-based compensation expense | $ 2,984 | $ 1,061 | $ 1,677 |
Restricted stock awards | |||
Stock-Based Compensation | |||
Share-based compensation expense | 1,545 | 1,285 | 913 |
Performance stock units | |||
Stock-Based Compensation | |||
Share-based compensation expense | $ 1,439 | (233) | 563 |
Stock options | |||
Stock-Based Compensation | |||
Share-based compensation expense | $ 9 | $ 201 |
SHARE-BASED COMPENSATION - Adju
SHARE-BASED COMPENSATION - Adjustment to Share-Based Compensation - Additional Information (Details) $ in Millions | 12 Months Ended |
Jun. 30, 2020USD ($) | |
Nonvested Restricted Stock Awards and Performance Stock Units | |
Stock-Based Compensation | |
Reversal of share-based compensation expense | $ 0.5 |
SHARE-BASED COMPENSATION - Sche
SHARE-BASED COMPENSATION - Schedule of Income Tax Benefit Related to Share-based Compensation Expense by Award Type (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | |
Stock-Based Compensation | |||
Income tax benefit related to share-based compensation expense | $ 676 | $ 239 | $ 399 |
Restricted stock awards | |||
Stock-Based Compensation | |||
Income tax benefit related to share-based compensation expense | 350 | 290 | 217 |
Performance stock units | |||
Stock-Based Compensation | |||
Income tax benefit related to share-based compensation expense | $ 326 | (53) | 134 |
Stock options | |||
Stock-Based Compensation | |||
Income tax benefit related to share-based compensation expense | $ 2 | $ 48 |
SHARE-BASED COMPENSATION - Rest
SHARE-BASED COMPENSATION - Restricted Stock Awards - Additional Information (Details) - Restricted stock awards - 2015 Plan - USD ($) $ in Millions | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | |
Stock-Based Compensation | |||
Fair value of vested shares | $ 1.6 | $ 1 | $ 0.7 |
Unrecognized compensation expense | $ 1.4 | ||
Weighted average period | 1 year 7 months 17 days | ||
Minimum | Employees | |||
Stock-Based Compensation | |||
Vesting period (in years) | 1 year | ||
Maximum | Employees | |||
Stock-Based Compensation | |||
Vesting period (in years) | 3 years |
SHARE-BASED COMPENSATION - Summ
SHARE-BASED COMPENSATION - Summary of Restricted Stock Awards Activity (Details) - 2015 Plan - Restricted stock awards - $ / shares | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | |
Number of Stock Units | |||
Total Non-vested Stock Awards/Units at beginning of year | 106,894 | 53,804 | 43,310 |
Granted | 93,357 | 138,457 | 51,995 |
Vested | (73,385) | (50,570) | (33,093) |
Forfeited | (8,673) | (34,797) | (8,408) |
Total Non-vested Stock Awards/Units at end of year | 118,193 | 106,894 | 53,804 |
Weighted Average Grant Date Fair Value | |||
Total Non-vested Stock Awards/Units at beginning of year | $ 18.01 | $ 22.94 | $ 17.28 |
Granted | 20.34 | 17.41 | 26.79 |
Vested | 18.54 | 20.09 | 21.54 |
Forfeited | 19.29 | 20.24 | 23.08 |
Total Non-vested Stock Awards/Units at end of year | $ 19.42 | $ 18.01 | $ 22.94 |
SHARE-BASED COMPENSATION - Perf
SHARE-BASED COMPENSATION - Performance Stock Units - Additional Information (Details) - Performance stock units - 2015 Plan - USD ($) $ in Millions | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | |
Stock-Based Compensation | |||
Fair value of vested shares | $ 0.4 | $ 0.2 | $ 0.4 |
Unrecognized compensation expense | $ 2.2 | ||
Weighted average period | 1 year 9 months 29 days | ||
Certain employees | |||
Stock-Based Compensation | |||
Vesting period (in years) | 3 years |
SHARE-BASED COMPENSATION - Su_2
SHARE-BASED COMPENSATION - Summary of Performance Stock Units Activity (Details) - 2015 Plan - Performance stock units - $ / shares | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | |
Number of Stock Units | |||
Total Non-vested Stock Awards/Units at beginning of year | 67,404 | 50,621 | 59,328 |
Granted | 123,096 | 72,048 | 35,122 |
Vested | (14,627) | (8,383) | (32,373) |
Forfeited | (15,588) | (46,882) | (11,456) |
Total Non-vested Stock Awards/Units at end of year | 160,285 | 67,404 | 50,621 |
Weighted Average Grant Date Fair Value | |||
Total Non-vested Stock Awards/Units at beginning of year | $ 20.02 | $ 23.34 | $ 14.98 |
Granted | 22.11 | 18.18 | 25.70 |
Vested | 26.29 | 19.40 | 11.85 |
Forfeited | 20.25 | 20.82 | 19.73 |
Total Non-vested Stock Awards/Units at end of year | $ 21.03 | $ 20.02 | $ 23.34 |
SHARE-BASED COMPENSATION - Nonq
SHARE-BASED COMPENSATION - Nonqualified Stock Option Awards - Additional Information (Details) - 2015 Plan - Nonqualified stock options - USD ($) $ in Millions | 1 Months Ended | 12 Months Ended | |
Jul. 31, 2015 | Jun. 30, 2020 | Jun. 30, 2019 | |
Stock-Based Compensation | |||
Fair value of NSOs vested | $ 0.2 | $ 0.2 | |
Certain employees | |||
Stock-Based Compensation | |||
Options granted | 137,786 |
SHARE-BASED COMPENSATION - Su_3
SHARE-BASED COMPENSATION - Summary of Nonqualified Stock Options Activity (Details) - 2015 Plan - Nonqualified stock options - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2018 | |
Shares | ||||
Outstanding at beginning of year | 32,392 | 80,859 | 93,125 | |
Exercised | (7,952) | (48,467) | (10,563) | |
Forfeited or expired | (1,703) | |||
Outstanding at end of year | 24,440 | 32,392 | 80,859 | 93,125 |
Fully vested and exercisable at end of year | 24,440 | |||
Weighted Average Exercise Price | ||||
Outstanding at beginning of year | $ 10.70 | $ 10.70 | $ 10.70 | |
Exercised | 10.70 | 10.70 | 10.70 | |
Forfeited or expired | 10.70 | |||
Outstanding at end of year | $ 10.70 | $ 10.70 | $ 10.70 | $ 10.70 |
Weighted Average Remaining Contractual Term | ||||
Outstanding | 4 years 1 month 6 days | 5 years 1 month 6 days | 6 years 1 month 6 days | 7 years 1 month 6 days |
Aggregate Intrinsic Value | ||||
Outstanding at beginning of year | $ 381 | $ 270 | $ 719 | $ 1,700 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Operating Leases - Additional Information (Details) - USD ($) $ in Millions | Oct. 24, 2019 | Sep. 29, 2019 |
Lessee Lease Description [Line Items] | ||
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 | |
Crest Manufacturing Facility | ||
Lessee Lease Description [Line Items] | ||
Purchase of facility | $ 4.1 | |
Finance lease assets, derecognized | 4.1 | |
Crest Manufacturing Facility | Property, Plant and Equipment | ||
Lessee Lease Description [Line Items] | ||
Operating lease assets, recognized | 4.1 | |
Crest Manufacturing Facility | Accrued Expenses and Other Current Liabilities | ||
Lessee Lease Description [Line Items] | ||
Finance lease liability, derecognized | $ 4.1 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES - Repurchase Agreements - Additional Information (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Jun. 30, 2020 |
Repurchase Obligations | ||
Inventory repurchase contingent obligation | $ 471 | $ 1,132 |
Obligation to Repurchase Inventory | ||
Repurchase Obligations | ||
Maximum repurchase obligation under floor plan agreements | 67,000 | 131,400 |
Inventory repurchase contingent obligation | $ 500 | $ 1,100 |
COMMITMENTS AND CONTINGENCIES_3
COMMITMENTS AND CONTINGENCIES - Purchase Commitments - Additional Information (Details) - USD ($) | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | |
Commitments And Contingencies Disclosure [Abstract] | |||
Purchase commitments penalties incurred | $ 0 | $ 0 | $ 0 |
COMMITMENTS AND CONTINGENCIES_4
COMMITMENTS AND CONTINGENCIES - Stock Repurchase Plan - Additional Information (Details) - Common Stock | Jun. 24, 2021USD ($) |
Repurchase Obligations | |
Stock repurchase plan, authorized amount | $ 50,000,000 |
Stock repurchase plan, period in force | 3 years |
Stock repurchase plan, ending date | Jun. 24, 2024 |
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 | 12 Months Ended | |||||||||
Jun. 30, 2021 | Apr. 04, 2021 | Jan. 03, 2021 | Oct. 04, 2020 | Jun. 30, 2020 | Mar. 29, 2020 | Dec. 29, 2019 | Sep. 29, 2019 | Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | |
Earnings Per Share Basic [Line Items] | |||||||||||
Net income (loss) | $ 56,170 | $ (24,047) | $ 21,354 | ||||||||
Weighted average shares — basic | 18,822,231 | 18,817,975 | 18,807,316 | 18,774,336 | 18,743,915 | 18,739,480 | 18,730,688 | 18,723,845 | 18,805,464 | 18,734,482 | 18,653,892 |
Weighted average outstanding shares — diluted | 19,021,220 | 18,989,629 | 18,928,408 | 18,866,826 | 18,743,915 | 18,739,480 | 18,770,783 | 18,770,756 | 18,951,521 | 18,734,482 | 18,768,207 |
Basic net income (loss) per share | $ 0.88 | $ 0.93 | $ 0.66 | $ 0.51 | $ (0.15) | $ (1.96) | $ 0.37 | $ 0.46 | $ 2.99 | $ (1.28) | $ 1.14 |
Diluted net income (loss) per share | $ 0.87 | $ 0.93 | $ 0.66 | $ 0.51 | $ (0.15) | $ (1.96) | $ 0.37 | $ 0.46 | $ 2.96 | $ (1.28) | $ 1.14 |
Stock options | |||||||||||
Earnings Per Share Basic [Line Items] | |||||||||||
Dilutive effect of assumed exercises of stock options and restricted share awards/units | 14,814 | 45,799 | |||||||||
Restricted stock awards | |||||||||||
Earnings Per Share Basic [Line Items] | |||||||||||
Dilutive effect of assumed exercises of stock options and restricted share awards/units | 131,243 | 68,516 |
EARNINGS PER SHARE - Additional
EARNINGS PER SHARE - Additional Information (Details) | 12 Months Ended |
Jun. 30, 2020shares | |
RSAs, PSUs and NSOs | |
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | |
Anti-dilutive securities excluded from computation of diluted earnings per share | 45,000 |
SEGMENT INFORMATION - Additiona
SEGMENT INFORMATION - Additional Information (Details) | 12 Months Ended |
Jun. 30, 2021segment | |
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 | 12 Months Ended | |||||||||
Jun. 30, 2021 | Apr. 04, 2021 | Jan. 03, 2021 | Oct. 04, 2020 | Jun. 30, 2020 | Mar. 29, 2020 | Dec. 29, 2019 | Sep. 29, 2019 | Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | |
Segment Reporting Information [Line Items] | |||||||||||
Net sales | $ 155,532 | $ 147,854 | $ 118,677 | $ 103,745 | $ 51,094 | $ 102,562 | $ 99,628 | $ 109,789 | $ 525,808 | $ 363,073 | $ 466,381 |
Operating income (loss) | 23,041 | $ 22,563 | $ 16,945 | $ 13,404 | (2,422) | (47,177) | $ 10,335 | $ 12,697 | 75,953 | (26,567) | 33,259 |
Depreciation and amortization | 11,630 | 10,527 | 7,787 | ||||||||
Goodwill and other intangible asset impairment | $ 56,437 | 56,437 | 31,000 | ||||||||
Purchases of property, plant and equipment | 27,862 | 14,241 | 14,064 | ||||||||
Total assets | 276,460 | 207,923 | 276,460 | 207,923 | |||||||
Eliminations | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total assets | (163,013) | (163,013) | (163,013) | (163,013) | |||||||
MasterCraft | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net sales | 363,274 | 246,455 | 311,830 | ||||||||
Operating income (loss) | 65,038 | 33,229 | 53,989 | ||||||||
Depreciation and amortization | 5,865 | 4,679 | 3,481 | ||||||||
Purchases of property, plant and equipment | 24,327 | 6,193 | 11,730 | ||||||||
MasterCraft | Operating Segments | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total assets | 353,088 | 294,139 | 353,088 | 294,139 | |||||||
NauticStar | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net sales | 59,846 | 54,930 | 77,995 | ||||||||
Operating income (loss) | (2,690) | (17,681) | (27,785) | ||||||||
Depreciation and amortization | 3,262 | 3,454 | 2,684 | ||||||||
Goodwill and other intangible asset impairment | 13,199 | 31,000 | |||||||||
Purchases of property, plant and equipment | 2,643 | 2,804 | 2,069 | ||||||||
NauticStar | Operating Segments | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total assets | 44,181 | 36,720 | 44,181 | 36,720 | |||||||
Crest | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net sales | 102,688 | 61,688 | 76,556 | ||||||||
Operating income (loss) | 13,605 | (42,115) | 7,055 | ||||||||
Depreciation and amortization | 2,503 | 2,394 | 1,622 | ||||||||
Goodwill and other intangible asset impairment | 43,238 | ||||||||||
Purchases of property, plant and equipment | 892 | 5,244 | $ 265 | ||||||||
Crest | Operating Segments | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total assets | $ 42,204 | $ 40,077 | $ 42,204 | $ 40,077 |
QUARTERLY FINANCIAL REPORTING_3
QUARTERLY FINANCIAL REPORTING (UNAUDITED) - Summary of Quarterly Financial Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Jun. 30, 2021 | Apr. 04, 2021 | Jan. 03, 2021 | Oct. 04, 2020 | Jun. 30, 2020 | Mar. 29, 2020 | Dec. 29, 2019 | Sep. 29, 2019 | Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Net sales | $ 155,532 | $ 147,854 | $ 118,677 | $ 103,745 | $ 51,094 | $ 102,562 | $ 99,628 | $ 109,789 | $ 525,808 | $ 363,073 | $ 466,381 |
Gross profit | 37,241 | 37,227 | 29,273 | 26,230 | 7,407 | 21,274 | 21,142 | 25,533 | 129,971 | 75,356 | 113,127 |
Goodwill and other intangible asset impairment | 56,437 | 56,437 | 31,000 | ||||||||
Operating income (loss) | 23,041 | 22,563 | 16,945 | 13,404 | (2,422) | (47,177) | 10,335 | 12,697 | 75,953 | (26,567) | 33,259 |
Net income (loss) | $ 16,534 | $ 17,568 | $ 12,501 | $ 9,567 | $ (2,836) | $ (36,713) | $ 6,879 | $ 8,623 | $ 56,170 | $ (24,047) | $ 21,354 |
Basic earnings (loss) per common share | $ 0.88 | $ 0.93 | $ 0.66 | $ 0.51 | $ (0.15) | $ (1.96) | $ 0.37 | $ 0.46 | $ 2.99 | $ (1.28) | $ 1.14 |
Diluted earnings (loss) per common share | $ 0.87 | $ 0.93 | $ 0.66 | $ 0.51 | $ (0.15) | $ (1.96) | $ 0.37 | $ 0.46 | $ 2.96 | $ (1.28) | $ 1.14 |
Weighted average shares used for computation of: | |||||||||||
Basic earnings per common share | 18,822,231 | 18,817,975 | 18,807,316 | 18,774,336 | 18,743,915 | 18,739,480 | 18,730,688 | 18,723,845 | 18,805,464 | 18,734,482 | 18,653,892 |
Diluted earnings per common share | 19,021,220 | 18,989,629 | 18,928,408 | 18,866,826 | 18,743,915 | 18,739,480 | 18,770,783 | 18,770,756 | 18,951,521 | 18,734,482 | 18,768,207 |