UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
☑
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: March 30, 2025
OR
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number 001-37502
MASTERCRAFT BOAT HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
Delaware
06-1571747
(State or Other Jurisdiction
(I.R.S. Employer
of Incorporation or Organization)
Identification No.)
100 Cherokee Cove Drive, Vonore, TN 37885
(Address of Principal Executive Office) (Zip Code)
(423) 884-2221
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading
Symbol(s)
Name of each exchange on which registered
Common Stock
MCFT
NASDAQ
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☑ Yes ☐ No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☑ Yes ☐ No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
Accelerated filer
Non-accelerated filer
Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☑ No
As of May 2, 2025, there were 16,605,130 shares of the Registrant’s common stock, par value $0.01 per share, issued and outstanding.
TABLE OF CONTENTS
Page
PART I
FINANCIAL INFORMATION
Item 1.
Financial Statements
Unaudited Condensed Consolidated Statements of Operations
4
Unaudited Condensed Consolidated Balance Sheets
5
Unaudited Condensed Consolidated Statements of Equity
6
Unaudited Condensed Consolidated Statements of Cash Flows
7
Notes to Unaudited Condensed Consolidated Financial Statements
8
Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
19
Item 3.
Quantitative and Qualitative Disclosures About Market Risk
26
Item 4.
Controls and Procedures
PART II
OTHER INFORMATION
Legal Proceedings
27
Item 1A.
Risk Factors
Unregistered Sales of Securities and Use of Proceeds
Defaults Upon Senior Securities
Mine Safety Disclosures
Item 5.
Other Information
Item 6.
Exhibits, Financial Statement Schedules
28
SIGNATURES
29
2
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains certain “forward-looking statements” within the meaning of the federal securities laws. These forward-looking statements can generally be identified by the use of statements that include words such as “could,” “may,” “might,” “will,” “expect,” “likely,” “believe,” “continue,” “anticipate,” “estimate,” “intend,” “plan,” “project” and other similar words or phrases. Forward-looking statements involve estimates and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements.
The forward-looking statements contained in this Quarterly Report on Form 10-Q are based on assumptions that we have made considering our industry experience and our perceptions of historical trends, current conditions, expected future developments and other important factors we believe are appropriate under the circumstances. As you read and consider this Quarterly Report on Form 10-Q, you should understand that these statements are not guarantees of performance or results. They involve risks, uncertainties (many of which are beyond our control) and assumptions. Although we believe that these forward-looking statements are based on reasonable assumptions, you should be aware that many important factors could affect our actual operating and financial performance and cause our performance to differ materially from the performance anticipated in the forward-looking statements, including but not limited to the following: changes in interest rates, general economic conditions, changes in trade priorities, policies and regulations, including increases or changes in duties, current and potentially new tariffs or quotas and other similar measures, as well as the potential direct and indirect impact of retaliatory tariffs and other actions, demand for our products, persistent inflationary pressures, changes in consumer preferences, competition within our industry, our ability to maintain a reliable network of dealers, our ability to cooperate with our strategic partners, elevated inventories resulting in increased costs for dealers, our ability to manage our manufacturing levels and our fixed cost base, the successful introduction of our new products, the success of our strategic divestments, geopolitical conflicts, financial institution disruptions and the other important factors described under the caption “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended June 30, 2024, filed with the Securities and Exchange Commission (“SEC”) on August 30, 2024 (our “2024 Annual Report”). Should one or more of these risks or uncertainties materialize, or should any of these assumptions prove incorrect, our actual operating and financial performance may vary in material respects from the performance projected in these forward-looking statements.
Further, any forward-looking statement speaks only as of the date on which it is made, and except as required by law, we undertake no obligation to update any forward-looking statement contained in this Quarterly Report on Form 10-Q to reflect events or circumstances after the date on which it is made or to reflect the occurrence of anticipated or unanticipated events or circumstances. New important factors that could cause our business not to develop as we expect may emerge from time to time, and it is not possible for us to predict all of them.
3
MASTERCRAFT BOAT HOLDINGS, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended
Nine Months Ended
March 30,
March 31,
(Dollar amounts in thousands, except per share data)
2025
2024
NET SALES
$
75,960
83,977
204,687
268,032
COST OF SALES
60,195
64,385
166,232
205,026
GROSS PROFIT
15,765
19,592
38,455
63,006
OPERATING EXPENSES:
Selling and marketing
2,845
3,121
8,543
8,705
General and administrative
8,356
9,269
23,258
24,870
Amortization of other intangible assets
450
1,350
1,362
Total operating expenses
11,651
12,840
33,151
34,937
OPERATING INCOME
4,114
6,752
5,304
28,069
OTHER INCOME (EXPENSE):
Interest expense
—
(762
)
(1,169
(2,494
Interest income
760
1,398
2,649
4,164
INCOME BEFORE INCOME TAX EXPENSE
4,874
7,388
6,784
29,739
INCOME TAX EXPENSE
1,053
1,661
1,521
6,801
INCOME FROM CONTINUING OPERATIONS
3,821
5,727
5,263
22,938
LOSS FROM DISCONTINUED OPERATIONS, NET OF TAX (Note 3)
(78
(1,972
(3,917
(7,102
NET INCOME
3,743
3,755
1,346
15,836
INCOME (LOSS) PER SHARE:
Basic
Continuing operations
0.23
0.34
0.32
1.35
Discontinued operations
(0.12
(0.24
(0.42
Net income
0.22
0.08
0.93
Diluted
1.34
(0.41
WEIGHTED AVERAGE SHARES USED FOR COMPUTATION OF:
Basic earnings per share
16,414,340
16,844,440
16,471,352
17,003,616
Diluted earnings per share
16,540,345
16,965,624
16,554,235
17,093,958
Notes to Unaudited Condensed Consolidated Financial Statements form an integral part of the condensed consolidated financial statements.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
June 30,
ASSETS
CURRENT ASSETS:
Cash and cash equivalents
28,507
7,394
Short-term investments (Note 4)
38,010
78,846
Accounts receivable, net of allowance of $212 and $101, respectively
8,512
11,455
Income tax receivable
817
499
Inventories, net (Note 5)
39,545
36,972
Prepaid expenses and other current assets
8,593
8,686
Current assets associated with discontinued operations (Note 3)
11,222
Total current assets
123,984
155,074
Property, plant and equipment, net (Note 6)
52,811
52,314
Goodwill (Note 7)
28,493
Other intangible assets, net (Note 7)
32,300
33,650
Deferred income taxes
17,902
18,584
Other long-term assets
6,396
8,189
Non-current assets associated with discontinued operations (Note 3)
21,680
Total assets
261,886
317,984
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Accounts payable
13,139
10,431
Accrued expenses and other current liabilities (Note 8)
55,263
55,068
Current portion of long-term debt, net of unamortized debt issuance costs (Note 9)
4,374
Current liabilities associated with discontinued operations (Note 3)
8,063
Total current liabilities
68,402
77,936
Long-term debt, net of unamortized debt issuance costs (Note 9)
44,887
Unrecognized tax positions
8,958
8,549
Other long-term liabilities
2,259
2,551
Long-term liabilities associated with discontinued operations (Note 3)
182
Total liabilities
79,619
134,105
COMMITMENTS AND CONTINGENCIES
EQUITY:
Common stock, $.01 par value per share — authorized, 100,000,000 shares; issued and outstanding, 16,711,812 shares at March 30, 2025 and 16,759,109 shares at June 30, 2024
167
Additional paid-in capital
56,934
59,892
Retained earnings
124,966
123,620
MasterCraft Boat Holdings, Inc. equity
182,067
183,679
Noncontrolling interest
200
Total equity
182,267
183,879
Total liabilities and equity
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF EQUITY
Additional
MasterCraft Boat
Paid-in
Retained
Holdings,
Noncontrolling
(Dollar amounts in thousands)
Shares
Amount
Capital
Earnings
Inc. Equity
Interest
Total
Balance at June 30, 2024
16,759,109
Share-based compensation activity
240,912
421
424
Repurchase and retirement of common stock
(183,629
(2
(3,509
(3,511
Net loss
(5,145
Balance at September 29, 2024
16,816,392
168
56,804
118,475
175,447
175,647
(3,255
(1
868
867
(39,593
(756
2,748
Balance at December 29, 2024
16,773,544
56,916
121,223
178,306
178,506
(20,644
771
(41,088
(753
Balance at March 30, 2025
16,711,812
Balance at June 30, 2023
17,312,850
173
75,976
115,820
191,969
120
192,089
185,055
(683
(241,764
(5,783
(5,785
Capital contribution from noncontrolling interest
80
6,195
Balance at October 1, 2023
17,256,141
171
69,510
122,015
191,696
191,896
(8,117
1
9
(214,219
(4,458
(4,460
5,886
Balance at December 31, 2023
17,033,805
170
65,060
127,901
193,131
193,331
58,205
1,582
1,583
(73,562
(1,570
(1,571
Balance at March 31, 2024
17,018,448
65,072
131,656
196,898
197,098
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
CASH FLOWS FROM OPERATING ACTIVITIES:
Loss from discontinued operations, net of tax
3,917
7,102
Income from continuing operations
Adjustments to reconcile income from continuing operations to net cash used in operating activities:
Depreciation and amortization
7,024
6,312
Share-based compensation
2,080
2,536
Unrecognized tax benefits
409
824
682
(1,949
Changes in certain operating assets and liabilities
1,009
(5,116
Other, net
1,990
(1,970
Net cash provided by operating activities of continuing operations
18,457
23,575
Net cash used in operating activities of discontinued operations
(3,308
(1,255
Net cash provided by operating activities
15,149
22,320
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment
(6,606
(7,968
Purchases of investments
(33,997
(120,277
Proceeds from investments
75,563
130,053
Net cash provided by investing activities of continuing operations
34,960
1,813
Net cash provided by (used in) investing activities of discontinued operations
25,992
(4,654
Net cash provided by (used in) investing activities
60,952
(2,841
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on long-term debt
(49,500
(3,375
Borrowings on revolving credit facility
49,500
Principal payments on revolving credit facility
(5,227
(11,728
(261
(1,684
Net cash used in financing activities of continuing operations
(54,988
(16,787
Net cash provided by (used in) financing activities of discontinued operations
Net cash used in financing activities
NET CHANGE IN CASH AND CASH EQUIVALENTS
21,113
2,692
CASH AND CASH EQUIVALENTS — BEGINNING OF PERIOD
19,817
CASH AND CASH EQUIVALENTS — END OF PERIOD
22,509
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash payments for interest, net of amounts capitalized
778
Cash payments for income taxes
279
9,684
NON-CASH INVESTING AND FINANCING ACTIVITIES:
Activity related to sales-type lease
3,898
Capital expenditures in accounts payable and accrued expenses
199
286
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unless otherwise noted, dollars in thousands, except per share data)
Basis of Presentation — The Company’s fiscal year begins July 1 and ends June 30, with the interim quarterly reporting periods consisting of 13 weeks. Therefore, the fiscal quarter end will not always coincide with the date of the end of a calendar month.
The accompanying unaudited condensed consolidated financial statements include the accounts of MasterCraft Boat Holdings, Inc. (“Holdings”) and its wholly owned subsidiaries. Holdings and its subsidiaries collectively are referred to herein as the “Company.” The unaudited condensed consolidated financial statements have been prepared on the same basis as the Company’s audited consolidated financial statements for the year ended June 30, 2024, and, in the opinion of management, reflect all adjustments considered necessary to present fairly the Company’s financial position as of March 30, 2025, its results of operations for the three and nine months ended March 30, 2025 and March 31, 2024, its cash flows for the nine months ended March 30, 2025 and March 31, 2024, and its statements of equity for the three and nine months ended March 30, 2025 and March 31, 2024. All adjustments are of a normal, recurring nature. Certain information and footnote disclosures normally included in annual consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and the applicable rules and regulations of the SEC for financial information have been condensed or omitted pursuant to such rules and regulations. The June 30, 2024 condensed consolidated balance sheet data was derived from the audited financial statements but does not include all disclosures required by U.S. GAAP for complete financial statements. However, management believes that the disclosures in these condensed consolidated financial statements are adequate to make the information presented not misleading. These condensed consolidated financial statements should be read in conjunction with the Company’s consolidated financial statements and notes thereto included in our 2024 Annual Report.
Due to the seasonality of the Company’s business, the interim results are not necessarily indicative of the results that may be expected for the remainder of the fiscal year.
There were no significant changes in, or changes to, the application of the Company’s significant or critical accounting policies or estimation procedures for the three and nine months ended March 30, 2025, as compared with those described in the Company’s audited consolidated financial statements for the fiscal year ended June 30, 2024.
Discontinued Operations — On October 18, 2024, the Company completed the sale of its Aviara brand of luxury dayboats and certain related assets to a subsidiary of MarineMax, Inc. (the “Aviara Transaction”). The Company's sale of the business represents an exit from the luxury dayboat category, a strategic shift that has a significant effect on the Company’s operations and financial results, and as such, qualifies for reporting as discontinued operations. Further, on December 23, 2024, the Company completed the sale of its Aviara manufacturing facility located in Merritt Island, Florida, to RMI Holdings, Inc. (the “Aviara Facility Sale”). In fiscal 2023, the Company sold its NauticStar business. The former Aviara and NauticStar businesses results for the periods presented are reflected in our condensed consolidated statements of operations and condensed consolidated statement of cash flows as discontinued operations. Additionally, the related assets and liabilities associated with discontinued operations are classified as discontinued operations in our condensed consolidated balance sheets for the prior-period presented (see Note 3).
Unless otherwise indicated, the financial disclosures and related information provided herein relate to our continuing operations, which exclude our former Aviara and NauticStar segments, and we have recast prior period amounts to reflect discontinued operations.
New Accounting Pronouncements Issued But Not Yet Adopted
Segment Reporting — Accounting Standard Update (“ASU”) No. 2023-07, Improvements to Reportable Segment Disclosures, requires incremental disclosures about an entity’s reportable segments but does not change the definition of a segment or the guidance for determining reportable segments. The new guidance requires disclosure of significant segment expenses that are (1) regularly provided to (or easily computed from information regularly provided to) the chief operating decision maker (“CODM”) and (2) included in the reported measure of segment profit or loss. The new standard also allows companies to disclose multiple measures of segment profit or loss if those measures are used to assess performance and allocate resources. This update is effective for fiscal years beginning after December 31, 2023, or fiscal 2025 for the Company, and is effective for interim periods within fiscal years beginning after December
15, 2024, or fiscal 2026 for the Company, and should be adopted retrospectively unless impracticable. The Company is currently evaluating the impact, if any, that the adoption of this standard will have on financial disclosures.
Income Taxes — ASU No. 2023-09, Improvements to Income Tax Disclosures, requires entities to disclose in their rate reconciliation table additional categories of information about federal, state and foreign income taxes and provide more details about the reconciling items in some categories if items meet a quantitative threshold. Entities would have to provide qualitative disclosures about the new categories. The guidance will require all entities to disclose income taxes paid, net of refunds, disaggregated by federal (national), state and foreign taxes for annual periods and to disaggregate the information by jurisdiction based on a quantitative threshold. The guidance makes several other changes to the disclosure requirements. Entities are required to apply the guidance prospectively, with the option to apply it retrospectively. The guidance is effective for annual periods beginning after December 15, 2024, or fiscal 2026 for the Company. The Company is currently evaluating the impact, if any, that the adoption of this standard will have on financial disclosures.
Income Statement — ASU No. 2024-03, Reporting Comprehensive Income — Expense Disaggregation Disclosures. ASU No. 2024-03, as amended by ASU No. 2025-01, requires public entities to provide disaggregated disclosures of certain categories of expenses on an annual and interim basis, including purchases of inventory, employee compensation, depreciation, and intangibles asset amortization for each income statement line item that contains those expenses. The guidance is effective for annual periods beginning after December 15, 2026, or fiscal 2028 for the Company, and is effective for interim periods within fiscal years beginning after December 15, 2027, or fiscal 2029 for the Company. The Company is currently evaluating the impact, if any, that the adoption of this standard will have on financial disclosures.
The following tables present the Company's revenue by major product category for each reportable segment:
Three Months Ended March 30, 2025
MasterCraft
Pontoon
Major Product Categories:
Boats and trailers
61,759
11,032
72,791
Parts
1,945
403
2,348
Other revenue
523
298
821
64,227
11,733
Nine Months Ended March 30, 2025
164,519
28,015
192,534
7,975
1,242
9,217
2,363
573
2,936
174,857
29,830
Three Months Ended March 31, 2024
66,961
13,769
80,730
2,443
292
2,735
379
133
512
69,783
14,194
Nine Months Ended March 31, 2024
207,160
48,584
255,744
9,574
770
10,344
1,585
359
1,944
218,319
49,713
Contract Liabilities
As of June 30, 2024, the Company had $4.1 million of contract liabilities associated with customer deposits and telematic services. During the nine months ended March 30, 2025, $1.7 million was recognized as revenue. As of March 30, 2025, total contract liabilities associated with customer deposits and telematic services of $4.8 million were reported in Accrued expenses and other current liabilities and Other long-term liabilities on the condensed consolidated balance sheet, and $1.9 million is expected to be recognized as revenue during the remainder of the year ending June 30, 2025.
On October 18, 2024, the Company completed the Aviara Transaction. As part of the Aviara Transaction, MarineMax, Inc. (“MarineMax”) paid for select branding and operational assets, including Aviara’s website, tooling, and inventory. MarineMax also assumed Aviara’s customer care, warranty liability and administration. The amounts paid to the Company by MarineMax for ownership of the Aviara brand were offset by MarineMax’s assumption of warranty liability and administration accruals. Further, on December 23, 2024, the Company completed the Aviara Facility Sale for proceeds, net of closing costs, of $26.1 million. The transactions resulted in a $6.2 million gain on discontinued operations related to the Aviara Facility Sale, partially offset by a $4.3 million loss related to the Aviara Transaction.
As discussed in Note 1, the Company has reported results of operations for the Aviara segment as discontinued operations in the condensed consolidated statement of operations and the related assets and liabilities are classified as discontinued operations in our prior-period condensed consolidated balance sheets.
In fiscal 2023, we sold our NauticStar business. Pursuant to the terms of the purchase agreement, substantially all of the assets were sold and the purchaser assumed substantially all of the liabilities of NauticStar. The value of the assets and liabilities that were retained at the time of sale, which were primarily related to certain claims, is subject to change. Certain of these claims, which were reported in Accrued expenses and other current liabilities, have been settled or are expected to settle for higher amounts than previously estimated, with the related activity being recorded as discontinued operations.
The following table summarizes the operating results of discontinued operations for the following periods:
1,557
11,731
8,756
31,411
1,541
12,972
12,827
35,723
GROSS PROFIT (LOSS)
16
(1,241
(4,071
(4,312
Selling, general and administrative
169
1,618
2,571
5,647
OPERATING LOSS
(153
(2,859
(6,642
(9,959
Gain on sale of discontinued operations
1,881
157
LOSS BEFORE INCOME TAX BENEFIT
(148
(4,761
(9,802
INCOME TAX BENEFIT
70
887
844
2,700
LOSS FROM DISCONTINUED OPERATIONS, NET OF TAX
10
The following table summarizes the assets and liabilities associated with discontinued operations:
Accounts receivable, net of allowance
3,927
Inventories, net
7,295
Total current assets classified as discontinued operations
NON-CURRENT ASSETS:
Property, plant and equipment, net
21,499
181
Total non-current assets classified as discontinued operations
1,747
Accrued expenses and other current liabilities
6,316
Total current liabilities classified as discontinued operations
LONG-TERM LIABILITIES:
Long-term leases
Total long-term liabilities classified as discontinued operations
During the second quarter of fiscal 2025, the Company sold certain investment securities prior to maturity to repay outstanding amounts under the revolving credit facility (see Note 9) and, as a result, reclassified its held-to-maturity securities to available-for-sale securities. The Company determined the amortized cost of available-for-sale securities as of March 30, 2025 approximate their fair value because of the short-term nature of the investments.
The amortized cost, unrealized gains and losses, and fair value of short-term investments at March 30, 2025 and June 30, 2024 are summarized in the following tables.
March 30, 2025
Gross
Amortized
Unrealized
Fair
Cost
Gains
Losses
Value
Available-for-sale securities:
Fixed income securities:
Corporate bonds
32,817
(8
32,813
U.S. treasury bills
5,193
Total available-for-sale securities
38,006
June 30, 2024
Held-to-maturity securities:
(82
78,766
Total held-to-maturity securities
11
Inventories consisted of the following:
Raw materials and supplies
24,299
26,326
Work in process
5,836
4,039
Finished goods
11,970
8,707
Obsolescence reserve
(2,560
(2,100
Total inventories
Property, plant, and equipment, net consisted of the following:
Land and improvements
4,985
Buildings and improvements
34,094
34,040
Machinery and equipment
38,025
31,157
Furniture and fixtures
6,050
5,498
Construction in progress
10,703
10,295
Total property, plant, and equipment
93,857
85,975
Less accumulated depreciation
(41,046
(33,661
Property, plant, and equipment — net
The following table presents the carrying amounts of goodwill as of March 30, 2025 and June 30, 2024 for each of the Company's reportable segments.
Gross Amount
Accumulated Impairment Losses
36,238
(36,238
64,731
The following table presents the carrying amounts of Other intangible assets, net:
Accumulated Amortization / Impairment
Other intangible assets, net
Amortized intangible assets
Dealer networks
19,500
(13,200
6,300
(11,850
7,650
Software
245
(245
19,745
(13,445
(12,095
Unamortized intangible assets
Trade names
33,000
(7,000
26,000
Total other intangible assets
52,745
(20,445
(19,095
12
Amortization expense related to Other intangible assets, net for each of the three months ended March 30, 2025 and March 31, 2024, was $0.5 million, and for each of the nine months ended March 30, 2025 and March 31, 2024, was $1.4 million. Estimated amortization expense for the fiscal year ending June 30, 2025 is $1.8 million.
Accrued expenses and other current liabilities consisted of the following:
Warranty
25,535
25,486
Dealer incentives
15,442
16,059
Compensation and related accruals
4,023
4,673
Contract liabilities
2,906
2,034
Inventory repurchase contingent obligation
2,159
1,657
Self-insurance
1,404
1,216
Liabilities retained associated with discontinued operations
511
309
Other
3,283
3,634
Total accrued expenses and other current liabilities
Accrued warranty liability activity was as follows for the nine months ended:
Balance at the beginning of the period
25,484
28,689
Provisions
4,711
5,415
Payments made
(6,392
(9,715
Changes for pre-existing warranties
1,732
2,970
Balance at the end of the period
27,359
Long-term debt is as follows:
Term loan
Debt issuance costs on term loan
(239
Total debt
49,261
Less current portion of long-term debt
4,500
Less current portion of debt issuance costs on term loan
(126
Long-term debt, net of current portion
There were no amounts of long-term debt outstanding as of March 30, 2025.
In fiscal 2021, the Company entered into a credit agreement with a syndicate of certain financial institutions (the “Credit Agreement”) that provided 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 is secured by a first priority security interest in substantially all of the Company's assets. Following the Fourth Amendment to the Credit Agreement (“Fourth Amendment”), as described below, all amounts under the Term Loan were repaid and the amended and restated Credit Agreement only provides the Company with the Revolving Credit Facility.
13
On September 27, 2024, the Company entered into the Fourth Amendment to obtain the necessary consents and waivers to the covenant restrictions related to the Aviara Transaction and the Aviara Facility Sale, as discussed in Note 3. In addition, the Fourth Amendment provides a waiver to the fixed charge ratio for certain periods. As a result of the fixed charge ratio waiver, the applicable margin on interest and the commitment fee for any unused portion of the Revolving Credit Facility for these periods is fixed at the maximum allowable rate (“Fourth Amendment Interest Terms”). Further, the Company was previously permitted to make restricted payments, including share repurchases under the Company's share repurchase program, in an aggregate amount not to exceed $5.0 million through March 31, 2025 (see Note 12).
The Credit Agreement, as amended, 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 term benchmark rate plus an applicable margin ranging from 1.25% to 2.00%, in each case based on the Company’s net leverage ratio, subject to the Fourth Amendment Interest Terms. 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, subject to the Fourth Amendment Interest Terms. Effective prior to the Company's entry into the Fourth Amendment, the applicable margin for loans accruing at the prime rate was 0.25% and the applicable margin for loans accruing interest at the benchmark rate was 1.25%. Following the Company’s entry into the Fourth Amendment and during the three months ended March 30, 2025, in compliance with the Fourth Amendment Interest Terms, the applicable margin for loans accruing interest at the prime rate was 1.00% and the applicable margin for loans accruing interest at the benchmark rate was 2.00%.
The Credit Agreement will mature and all remaining amounts outstanding thereunder will be due and payable on June 28, 2026. As of March 30, 2025, the Company was in compliance with its financial covenants under the Credit Agreement.
Revolving Credit Facility
In conjunction with the Fourth Amendment, the Company drew $49.5 million on its Revolving Credit Facility. Drawn amounts were used to repay outstanding borrowings under the Term Loan. As of March 30, 2025, all amounts were repaid, and the Company had remaining availability of $100.0 million on the Revolving Credit Facility.
The Company’s consolidated interim effective tax rate is based on a current estimate of the annual effective income tax rate adjusted to reflect the impact of discrete items. The differences between the Company’s effective tax rate and the statutory federal tax rate of 21.0% for the first nine months of fiscal 2025 primarily relate to changes in uncertain tax positions and inclusion of the state tax rate in the overall effective rate, partially offset by benefits of federal and state credits. During the three months ended March 30, 2025 and March 31, 2024, the Company’s effective tax rate was 21.6% and 22.5%, respectively, and for the nine months ended March 30, 2025 and March 31, 2024, the Company’s effective tax rate was 22.4% and 22.9%, respectively. The Company’s effective tax rates for the three and nine months ended March 30, 2025 are lower compared to the effective tax rate for the same prior year periods, primarily due to increased benefit of federal and state credits, partially offset by changes in uncertain tax positions.
The following table presents the components of share-based compensation expense by award type.
Restricted stock awards
805
1,475
2,465
Performance stock units
89
71
Share-based compensation expense
1,564
Restricted Stock Awards
During the nine months ended March 30, 2025, the Company granted 248,642 restricted stock awards (“RSAs”) to the Company’s non-executive directors, officers and certain other key employees. Generally, the shares of restricted stock granted during the nine months
14
ended March 30, 2025, vest pro-rata over two or three years for officers and certain other key employees and over one year for non-executive directors. The Company determined the fair value of the shares awarded by using the close price of our common stock as of the date of grant. The weighted average grant date fair value of RSAs granted in the nine months ended March 30, 2025, was $17.57 per share.
The following table summarizes the status of nonvested RSAs as of March 30, 2025, and changes during the nine months then ended.
Average
Nonvested
Grant-Date
Restricted
Fair Value
(per share)
Nonvested at June 30, 2024
104,372
21.76
Granted
248,642
17.57
Vested
(22,456
21.75
Forfeited
(31,605
20.05
Nonvested at March 30, 2025
298,953
18.46
As of March 30, 2025, there was $3.7 million of total unrecognized compensation expense related to nonvested RSAs. The Company expects this expense to be recognized over a weighted average period of 1.6 years.
Performance Stock Units
Performance stock units (“PSUs”) are a form of long-term incentive compensation awarded to executive officers and certain other key employees designed to directly align the interests of employees to the interests of the Company’s shareholders, and to create long-term shareholder value. The awards will be earned based on the Company’s achievement of certain performance criteria over a three-year performance period. The performance period for the awards commences on July 1 of the fiscal year in which they were granted and continue for a three-year period, ending on June 30 of the applicable year. The probability of achieving the performance criteria is assessed quarterly. Following the determination of the Company’s achievement with respect to the performance criteria, the number of shares awarded is subject to further adjustment based on the application of a total shareholder return (“TSR”) modifier. The grant date fair value is determined based on both the probability assessment of the Company achieving the performance criteria and an estimate of the expected TSR modifier. The TSR modifier estimate is determined using a Monte Carlo Simulation model, which considers the likelihood of numerous possible outcomes of long-term market performance. Compensation expense related to existing nonvested PSUs is recognized ratably over the performance period.
PSUs awarded in fiscal 2025 have performance criteria set annually over the three-year performance period. This performance criteria is cumulative and is based upon the respective year’s performance compared to budget, which has not yet been established for future performance periods. Therefore, the compensation expense for these awards will not begin until all the key terms and conditions of these awards are known, which will be year three of the performance period.
The following table summarizes the status of nonvested PSUs as of March 30, 2025, and changes during the nine months then ended.
Performance
Stock Units
139,910
23.62
(18,390
23.46
121,520
23.64
As of March 30, 2025, there was no unrecognized compensation expense related to nonvested PSUs.
15
Incentive Award Plan
On October 22, 2024, at the Company's annual meeting of shareholders, the Company's shareholders approved the Second Amended and Restated MasterCraft 2015 Incentive Award Plan (the “Restated Incentive Plan”), as described in the Company's Definitive Proxy Statement, filed with the SEC on September 23, 2024, to replace the Amended and Restated MCBC Holdings, Inc. 2015 Incentive Award Plan effective as of the date of shareholder approval. The Restated Incentive Plan authorizes an aggregate issuance of up to 1,198,175 shares of common stock, subject to adjustment, in the form of performance awards, restricted shares, restricted stock units, stock options, stock appreciation rights, and other share-based awards. The Company's employees, consultants, and non-employee directors, and employees, consultants, and non-employee directors of our affiliates are eligible to receive awards under the Restated Incentive Plan.
The following table sets forth the computation of the Company’s net income (loss) per share:
Weighted average shares — basic
Dilutive effect of assumed restricted share awards/units
126,005
121,184
82,883
90,342
Weighted average outstanding shares — diluted
Basic income (loss) per share
Diluted income (loss) per share
For the three and nine months ended March 31, 2024, an immaterial number of shares were excluded from the computation of diluted earnings per share as the effect would have been anti-dilutive.
Share Repurchase Program
On July 24, 2023, the Board of the Company authorized a share repurchase program under which the Company may repurchase up to $50.0 million of its outstanding shares of common stock. The authorization became effective upon the completion of the Company's previously existing $50.0 million stock repurchase authorization on August 9, 2023.
During the three months ended March 30, 2025 and March 31, 2024, the Company repurchased 41,088 shares and 73,562 shares of common stock for $0.7 million and $1.6 million, respectively, in cash, excluding related fees and expenses. During the nine months ended March 30, 2025 and March 31, 2024, the Company repurchased 264,310 shares and 529,545 shares of common stock for $5.0 million and $11.7 million, respectively, in cash, excluding related fees and expenses. As of March 30, 2025, $30.4 million remained available under the program.
13.SEGMENT INFORMATION
Reportable Segments
During the fourth quarter of fiscal 2024, the Company changed the name of its “Crest” operating segment to “Pontoon.” The segment change had no impact on the composition of the Company's segments or on previously reported financial position, results of operations, cash flows, or segment operating results.
Operating segments are identified as components of an enterprise about which discrete financial information is available for evaluation by the CODM in making decisions on how to allocate resources and assess performance. For the three and nine months ended March 30, 2025, the Company’s CODM regularly assessed the operating performance of the Company’s boat brands under two operating and reportable segments:
Each segment distributes its products through its own independent dealer network. Each segment also has its own management structure which is responsible for the operations of the segment and is directly accountable to the CODM for the operating performance of the segment, which is regularly assessed by the CODM who allocates resources based on that performance.
The Company files a consolidated income tax return and does not allocate income taxes and other corporate-level expenses, including interest, to operating segments. All material corporate costs are included in the MasterCraft segment.
Selected financial information for the Company’s reportable segments was as follows:
For the Three Months Ended March 30, 2025
Consolidated
Net sales
Operating income (loss)
5,792
(1,678
1,629
940
2,569
1,778
233
2,011
For the Nine Months Ended March 30, 2025
12,864
(7,560
4,271
2,753
5,459
1,147
6,606
For the Three Months Ended March 31, 2024
7,616
(864
1,288
2,105
2,591
584
3,175
17
For the Nine Months Ended March 31, 2024
28,202
(133
3,872
2,440
6,207
1,761
7,968
The following table presents total assets for the Company’s reportable segments.
Assets:
212,408
233,088
49,478
51,994
Assets associated with discontinued operations
32,902
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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
The following discussion and analysis should be read together with the unaudited condensed consolidated financial statements and notes thereto included elsewhere in this Quarterly Report on Form 10-Q. In addition, the statements in this discussion and analysis regarding our expectations concerning the performance of our business, anticipated financial results, liquidity and the other non-historical statements are forward-looking statements. These forward-looking statements are subject to numerous risks and uncertainties, including, but not limited to, the risks and uncertainties described in “Cautionary Note Regarding Forward-Looking Statements” above and in “Risk Factors” set forth in our 2024 Annual Report. Our actual results may differ materially from those contained in or implied by any forward-looking statements.
Certain statements in the following discussions are based on non-GAAP financial measures. A “non-GAAP financial measure” is a numerical measure of a registrant’s historical or future financial performance, financial position or cash flows that excludes amounts, or is subject to adjustments that have the effect of excluding amounts, that are included in the most directly comparable measure calculated and presented in accordance with U.S. GAAP in the statements of operations, balance sheets or statements of cash flows of the issuer; or includes amounts, or is subject to adjustments that have the effect of including amounts, that are excluded from the most directly comparable measure so calculated and presented. Non-GAAP financial measures do not include operating and statistical measures. The Company includes non-GAAP financial measures in Management’s Discussion and Analysis, as the Company’s management believes that these measures and the information they provide are useful to users of the financial statements, including investors, because they permit users of the financial statements to view the Company’s performance using the same tools that management utilizes and to better evaluate the Company’s ongoing business performance. In order to better align the Company’s reported results with the internal metrics used by the Company's management to evaluate business performance as well as to provide better comparisons to prior periods and peer data, non-GAAP measures exclude the impact of purchase accounting amortization related to business acquisitions.
Overview
Discontinued Operations
On October 18, 2024, the Company completed the Aviara Transaction and on December 23, 2024, the Company completed the Aviara Facility Sale. In fiscal 2023, the Company sold its NauticStar business. The Company's results for all periods presented, as discussed in Management's Discussion and Analysis, are presented on a continuing operations basis. Results related to our Aviara and NauticStar reporting units are reported as discontinued operations for all periods presented. See Notes 1 and 3 in Notes to the unaudited condensed consolidated financial statements for more information on discontinued operations.
Upcoming Leadership Transition
On April 7, 2025 Timothy M. Oxley, Chief Financial Officer (“CFO”) of the Company, announced his retirement from the Company, effective December 31, 2025. Prior to his retirement, Mr. Oxley will step down as CFO, effective June 30, 2025, at which time, Mr. Oxley will serve as a Special Advisor. Scott Kent, Vice President of Finance, will succeed Mr. Oxley as CFO, effective July 1, 2025.
Tariff and Trade Environment
The recently imposed U.S. tariffs did not materially impact our third quarter results, but their effects and the potential imposition of modified or additional tariffs may, among other things, create new trade barriers that disrupt supply chains, raise costs, weaken consumer confidence and impact consumer demand for our products, and impact our ability to export our products, all of which could have an adverse effect on our business and financial results. The extent of the impact of tariffs on the Company’s business is highly uncertain and difficult to predict. While we anticipate a modest impact from tariffs on our fiscal 2025 costs, we are closely monitoring the rapidly evolving tariff landscape and are working diligently with key suppliers to mitigate risks. For additional information regarding the potential impacts of tariffs on our business and results of operations, see “Part I, Item 1A. Risk factors” in our 2024 Annual Report.
Results of Operations
We continued to navigate market and economic uncertainty during the third quarter of fiscal 2025 and expect this trend to continue through the end of our fiscal year. Net sales decreased primarily due to planned lower unit volumes to align dealer inventories with retail demand. Gross margin declined due to lower cost absorption driven by decreased production volume.
Results of Continuing Operations
Consolidated Results
The table below presents our consolidated results of operations for the three and nine months ended:
2025 vs. 2024
%
Change
Consolidated statements of operations:
(8,017
(9.5
%)
(63,345
(23.6
(4,190
(6.5
(38,794
(18.9
(3,827
(19.5
(24,551
(39.0
(276
(8.8
(162
(1.9
(913
(9.9
(1,612
0.0
(12
(0.9
(1,189
(9.3
(1,786
(5.1
(2,638
(39.1
(22,765
(81.1
762
(100.0
1,325
(53.1
(638
(45.6
(1,515
(36.4
(2,514
(34.0
(22,955
(77.2
(608
(36.6
(5,280
(77.6
(1,906
(33.3
(17,675
(77.1
Additional financial and other data:
Unit sales volume:
422
468
(46
(9.8
1,196
1,453
(257
(17.7
197
(101
(33.9
527
1,025
(498
(48.6
Consolidated unit sales volume
619
766
(147
(19.2
1,723
2,478
(755
(30.5
Net sales:
(5,556
(8.0
(43,462
(19.9
(2,461
(17.3
(19,883
(40.0
Consolidated net sales
Net sales per unit:
152
149
2.0
146
150
(4
(2.7
60
48
25.0
57
49
16.3
Consolidated net sales per unit
123
110
11.8
119
108
10.2
Gross margin
20.8
23.3
(250) bps
18.8
23.5
(470) bps
Net sales decreased $8.0 million during the third quarter of fiscal 2025, when compared with the same prior-year period. The decrease in net sales was driven by planned lower unit volumes and changes in price, partially offset by favorable model mix and options sales.
Net sales decreased $63.3 million during the first nine months of fiscal 2025, when compared with the same prior-year period. The decrease in net sales was driven by planned lower unit volumes, unfavorable model mix and changes in price, partially offset by favorable option sales.
20
Gross margin percentage declined 250 and 470 basis points during the third quarter and first nine months of fiscal 2025, respectively, when compared with the same prior-year period. Lower margins were the result of changes in sales price, material and overhead inflation, and lower cost absorption due to decreased production volume.
Operating expenses decreased $1.2 million and $1.8 million during the third quarter and first nine months of fiscal 2025, respectively, when compared with the same prior-year period. Prior year costs were elevated as a result of CEO transition and related share-based compensation costs.
Segment Results
MasterCraft Segment
The following table sets forth MasterCraft segment results for the three and nine months ended:
Operating income
(1,824
(23.9
(15,338
(54.4
(813
(31.4
(748
(12.1
Unit sales volume
Net sales per unit
Net sales decreased $5.6 million during the third quarter of fiscal 2025, when compared with the same prior-year period. The decrease was driven by lower unit volume and changes in price, partially offset by favorable model mix and decreased dealer incentives.
Net sales decreased $43.5 million during the first nine months of fiscal 2025, when compared with the same prior-year period. The decrease was driven by lower unit volume, unfavorable model mix and changes in price, partially offset by decreased dealer incentives.
Operating income decreased $1.8 million and $15.3 million during third quarter and first nine months of fiscal 2025, respectively, when compared with the same prior-year period. The change was primarily the result of decreased net sales and increased materials and overhead inflation, partially offset by decreased operating expenses, as discussed above.
Pontoon Segment
The following table sets forth Pontoon segment results for the three and nine months ended:
Operating loss
(814
94.2
(7,427
5584.2
(351
(60.1
(614
(34.9
Net sales decreased $2.5 million and $19.9 million during the third quarter and first nine months of fiscal 2025, respectively, when compared to the same prior-year period, mainly due to lower unit volumes and increased dealer incentives, partially offset by favorable model mix and option sales.
21
Operating loss for the third quarter and first nine months of fiscal 2025 increased $0.8 million and $7.4 million, respectively, compared to the same prior-year period. The change was driven by decreased net sales, as discussed above, and increased labor and materials costs.
Non-GAAP Measures
EBITDA, Adjusted EBITDA, EBITDA margin, and Adjusted EBITDA margin
We define EBITDA as income from continuing operations, before interest, income taxes, depreciation and amortization. We define Adjusted EBITDA as EBITDA further adjusted to eliminate certain non-cash charges or other items that we do not consider to be indicative of our core and/or ongoing operations. For the periods presented herein, the adjustments are for share-based compensation, and CEO transition and organizational realignment costs. We define EBITDA margin and Adjusted EBITDA margin as EBITDA and Adjusted EBITDA, respectively, each expressed as a percentage of Net sales.
Adjusted Net Income and Adjusted Net Income per share
We define Adjusted Net Income and Adjusted Net Income per share as income from continuing operations, adjusted to eliminate certain non-cash charges or other items that we do not consider to be indicative of our core and/or ongoing operations and reflecting income tax expense on adjusted net income before income taxes at our estimated annual effective tax rate. For the periods presented herein, these adjustments include other intangible asset amortization, share-based compensation, and CEO transition and organizational realignment costs.
EBITDA, Adjusted EBITDA, EBITDA margin, Adjusted EBITDA margin, Adjusted Net Income, and Adjusted Net Income per share, which we refer to collectively as the Non-GAAP Measures, are not measures of net income or operating income as determined under accounting principles generally accepted in the United States, or U.S. GAAP. The Non-GAAP Measures are not measures of performance in accordance with U.S. GAAP and should not be considered as an alternative to net income, net income per share, or operating cash flows determined in accordance with U.S. GAAP. Additionally, Adjusted EBITDA is not intended to be a measure of cash flow. We believe that the inclusion of the Non-GAAP Measures is appropriate to provide additional information to investors because securities analysts and investors use the Non-GAAP Measures to assess our operating performance across periods on a consistent basis and to evaluate the relative risk of an investment in our securities. We use Adjusted Net Income and Adjusted Net Income per share to facilitate a comparison of our operating performance on a consistent basis from period to period that, when viewed in combination with our results prepared in accordance with U.S. GAAP, provides a more complete understanding of factors and trends affecting our business than does U.S. GAAP measures alone. We believe Adjusted Net Income and Adjusted Net Income per share assists our Board, management, investors, and other users of the financial statements in comparing our net income on a consistent basis from period to period because it removes certain non-cash items and other items that we do not consider to be indicative of our core and/or ongoing operations and reflecting income tax expense on adjusted net income before income taxes at our estimated annual effective tax rate. The Non-GAAP Measures have limitations as an analytical tool and should not be considered in isolation or as a substitute for analysis of our results as reported under U.S. GAAP. Some of these limitations are:
22
In addition, because not all companies use identical calculations, our presentation of the Non-GAAP Measures may not be comparable to similarly titled measures of other companies, including companies in our industry.
The following table presents a reconciliation of income from continuing operations as determined in accordance with U.S. GAAP to EBITDA, and Adjusted EBITDA, and income from continuing operations margin (expressed as a percentage of net sales) to EBITDA margin and Adjusted EBITDA margin (each expressed as a percentage of net sales) for the periods indicated:
% of Net
sales
5.0%
6.8%
2.6%
8.6%
Income tax expense
1,169
2,494
(760
(1,398
(2,649
(4,164
EBITDA
6,683
8.8%
8,857
10.5%
12,328
6.0%
34,381
12.8%
CEO transition and organizational realignment costs(a)
1,241
448
1,677
Adjusted EBITDA
7,488
9.9%
11,662
13.9%
14,856
7.3%
38,594
14.4%
The following table presents a reconciliation of income from continuing operations as determined in accordance with U.S. GAAP to Adjusted Net Income for the periods indicated:
Amortization of acquisition intangibles
Adjusted Net Income before income taxes
6,129
10,643
10,662
35,314
Adjusted income tax expense(b)
1,103
2,128
1,919
7,063
Adjusted Net Income
5,026
8,515
8,743
28,251
Adjusted Net Income per share:
0.31
0.51
0.53
1.66
0.30
0.50
1.65
Weighted average shares used for the computation of(c):
Basic Adjusted Net Income per share
Diluted Adjusted Net Income per share
23
The following table presents the reconciliation of income from continuing operations per diluted share to Adjusted Net Income per diluted share for the periods indicated:
Income from continuing operations per diluted share
Impact of adjustments:
0.06
0.10
0.09
0.40
0.03
0.05
0.13
0.15
0.07
Adjusted Net Income per diluted share before income taxes
0.37
0.63
0.65
2.07
Impact of adjusted income tax expense on net income per diluted share before income taxes(b)
(0.07
(0.13
Adjusted Net Income per diluted share
Liquidity and Capital Resources
Our primary liquidity and capital resource needs are to finance working capital, fund capital expenditures, service debt, fund potential acquisitions, and fund our share repurchase program. Our principal sources of liquidity are our cash balance, available-for-sale securities, cash generated from operating activities, our revolving credit agreement and the refinancing and/or new issuance of long-term debt. We believe our cash balance, available-for-sale securities, cash from operations, and our ability to borrow will be sufficient to provide for our liquidity and capital resource needs.
Cash and cash equivalents totaled $28.5 million as of March 30, 2025, an increase of $21.1 million from $7.4 million as of June 30, 2024. Available-for-sale securities totaled $38.0 million as of March 30, 2025, a decrease of $40.8 million from $78.8 million as of June 30, 2024. Net changes in Cash and cash equivalents and Available-for-sale securities include proceeds from Available-for-sale securities being used to repay outstanding amounts under the Revolving Credit Facility and $26.1 million in net proceeds from the Aviara Facility Sale. Refer to Note 3 - Discontinued Operations and Note 4 — Short-term investments in the Notes to the unaudited condensed consolidated financial statements for further details. Total debt as of June 30, 2024 was $49.3 million, with no amounts outstanding as of March 30, 2025.
As of March 30, 2025, we had no amounts outstanding under the Revolving Credit Facility, leaving $100.0 million of available borrowing capacity. Refer to Note 9 — Long-Term Debt in the Notes to unaudited condensed consolidated financial statements for further details.
On July 24, 2023, the Board of the Company authorized a share repurchase program under which the Company may repurchase up to $50 million of its outstanding shares of common stock. The authorization became effective upon the completion of the Company's previously existing $50 million stock repurchase authorization.
During the nine months ended March 30, 2025, the Company repurchased 264,310 shares of common stock for $5.0 million in cash, excluding related fees and expenses.
24
The following table and discussion below relate to our cash flows from continuing operations from operating, investing, and financing activities:
Total cash provided by (used in):
Operating activities
Investing activities
Financing activities
Net change in cash and cash equivalents from continuing operations
8,601
Nine Months Ended March 30, 2025 Cash Flows from Continuing Operations
Net cash provided by operating activities for the nine months ended March 30, 2025 was $18.5 million, primarily due to net income and favorable changes to working capital. Working capital is defined as accounts receivable, income tax receivable, inventories, and prepaid expenses and other current assets net of accounts payable, income tax payable, and accrued expenses and other current liabilities as presented in the condensed consolidated balance sheets. Favorable changes in working capital primarily consisted of an increase in accounts payables and a decrease in accounts receivable. Partially offsetting favorable changes in working capital was an increase in inventories. Accounts payables increased due to increased production compared to the prior-year period. Accounts receivable decreased due to timing of sales at the end of the period compared to the end of the prior-year period. Inventories increased due to higher value on finished goods and timing of sales at the end of the period compared to the end of the prior-year period.
Net cash provided by investing activities was $35.0 million, which included $41.6 million of net proceeds in available-for-sale securities, partially offset by $6.6 million in capital expenditures. Our capital spending was primarily focused on information technology, tooling and machinery and equipment.
Net cash used in financing activities was $55.0 million, which included share repurchases totaling $5.0 million, excluding related fees and expenses, and $49.5 million used to repay outstanding borrowings of the Term Loan. Drawn amounts on the Revolving Credit Facility were fully repaid as of March 30, 2025.
Nine Months Ended March 31, 2024 Cash Flows from Continuing Operations
Net cash provided by operating activities for the nine months ended March 31, 2024 was $23.6 million, primarily due to net income, partially offset by working capital usage. Working capital usage primarily consisted of decreases in accrued expenses and other current liabilities, accounts payable, and income tax payable and an increase in prepaid expenses and other current assets, partially offset by decreases in inventories and accounts receivables. Accrued expenses and other current liabilities decreased due to payment of dealer incentives and lower compensation related accruals, partially offset by an increase in repurchase obligations. Accounts payable decreased as a result of decreased production levels. Income tax payable decreased due to lower earnings compared to the prior year. Prepaid expenses and other current assets increased due to payment of annual insurance premiums. Inventories decreased as we continue to rebalance inventory levels to align with lower production levels, partially offset by increased materials costs from inflation. Accounts receivables decreased primarily as a result of lower sales at the end of the period compared to the end of the prior-year period.
Net cash provided by investing activities was $1.8 million, due to net changes in available-for-sale securities of $9.8 million, partially offset by $8.0 million of capital expenditures. Our capital spending was mainly focused on facility enhancements, information technology, and tooling.
Net cash used in financing activities was $16.8 million, which included net payments of $3.4 million on long-term debt and $11.7 million of share repurchases.
Off Balance Sheet Arrangements
The Company did not have any off balance sheet financing arrangements as of March 30, 2025.
25
Critical Accounting Estimates
As of March 30, 2025, there were no significant changes in or changes to the application of our critical accounting policies or estimation procedures from those presented in our 2024 Annual Report.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Refer to our 2024 Annual Report for discussion of the Company’s market risk. There have been no material changes in market risk from those disclosed therein.
ITEM 4. CONTROLS AND PROCEDURES.
Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) (of the Exchange Act) that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosures. Any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.
As of the end of the period covered by this Quarterly Report on Form 10-Q, we carried out an evaluation under the supervision and with the participation of our management, including our chief executive officer and chief financial officer, of the effectiveness of our disclosure controls and procedures. Based upon this evaluation, our chief executive officer and chief financial officer have concluded that our disclosure controls and procedures were effective at a reasonable assurance level as of March 30, 2025.
Changes in Internal Control Over Financial Reporting
There have been no changes in our internal control over financial reporting during the quarter ended March 30, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II – OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
None.
ITEM 1A. RISK FACTORS.
During the nine months ended March 30, 2025, there have been no material changes to the risk factors disclosed in “Part I, Item 1A. Risk Factors” in our 2024 Annual Report.
ITEM 2. UNREGISTERED SALES OF SECURITIES AND USE OF PROCEEDS.
On July 24, 2023, the Board of the Company authorized a share repurchase program under which the Company may repurchase up to $50.0 million of its outstanding shares of common stock. The authorization became effective upon the completion of the Company's previously existing $50.0 million stock repurchase authorization.
During the first nine months of fiscal 2025, we repurchased approximately $5.0 million of our common stock, including approximately $0.7 million during the three months ended March 30, 2025, excluding related fees and expenses. As of March 30, 2025, the remaining authorization under the new program was approximately $30.4 million.
During the three months ended March 30, 2025, the Company repurchased the following shares of common stock:
Period
Total Number of Shares Purchased
Average Price Paid Per Share(a)(b)
Total Number of Shares Purchased as part of Publicly Announced Program
Approximate Dollar Value of Shares that May Yet be Purchased Under the Plan (dollars in thousands)
December 30, 2024 - January 26, 2025
16,643
18.28
30,850
January 27, 2025 - February 23, 2025
15,827
18.51
30,557
February 24, 2025 - March 30, 2025
8,618
17.62
30,406
41,088
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
ITEM 4. MINE SAFETY DISCLOSURES.
ITEM 5. OTHER INFORMATION.
During the three months ended March 30, 2025, none of our directors or “officers” (as defined in Rule 16a-1(f) under the Exchange Act) adopted, modified or terminated “Rule 10b5-1 trading arrangements” or “non-Rule 10b5-1 trading arrangements” (each as defined in Item 408 of Regulation S-K).
ITEM 6.EXHIBITS, FINANCIAL STATEMENT SCHEDULES.
Incorporated by Reference
ExhibitNo.
Description
Form
File No.
Exhibit
Filing Date
FiledHerewith
3.1
Amended and Restated Certificate of Incorporation of MCBC Holdings, Inc.
10-K
001-37502
9/18/15
3.2
Certificate of Amendment to Amended and Restated Certificate of Incorporation of MasterCraft Boat Holdings, Inc.
10-Q
11/9/18
3.3
8-K
10/25/19
3.4
Fourth Amended and Restated By-laws of MasterCraft Boat Holdings, Inc.
10.1
Form of Severance and Release Agreement
2/24/25
Retirement and Transition Agreement, dated April 7, 2025
4/7/25
10.3
Offer Letter, dated March 31, 2025
31.1
Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer
*
31.2
Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer
32.1
Section 1350 Certification of Chief Executive Officer
**
32.2
Section 1350 Certification of Chief Financial Officer
101.INS
Inline XBRL Instance Document
101.SCH
Inline XBRL Taxonomy Extension Schema With Embedded Linkbases Document
104
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).
* Filed herewith.
** Furnished herewith.
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
(Registrant)
Date:
May 7, 2025
By:
/s/ BRADLEY M. NELSON
Bradley M. Nelson
Chief Executive Officer (Principal Executive Officer) and Director
/s/ TIMOTHY M. OXLEY
Timothy M. Oxley
Chief Financial Officer (Principal Financial and Accounting Officer),
Treasurer and Secretary