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What changed in MasterCraft Boat Holdings, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of MasterCraft Boat Holdings, Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+192 added−218 removedSource: 10-K (2025-08-27) vs 10-K (2024-08-30)

Top changes in MasterCraft Boat Holdings, Inc.'s 2025 10-K

192 paragraphs added · 218 removed · 161 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

89 edited+12 added−21 removed178 unchanged
Biggest changeWe’ve partnered with local community and technical colleges by developing training programs and donating boats and supplies to position graduates for jobs in the boating industry upon graduation. Employee safety is always a top priority. We are focused on improving and innovating when it comes to the well-being of our dedicated workforce across our portfolio of brands.
Biggest changeEmployee safety is always a top priority. We are focused on improving and innovating when it comes to the well-being of our dedicated workforce across our portfolio of brands. We take great care to ensure everyone at the Company is empowered to do their best work, in a safe and well-managed environment.
This ongoing dialogue can include certain divisive activist tactics, which can take many forms. Some shareholder activism, including potential proxy contests, could result in substantial costs, such as legal fees and expenses, and divert management’s 17 and our Board’s attention and resources from our businesses and strategic plans.
This ongoing dialogue can include certain divisive activist tactics, which can take many forms. Some shareholder 17 activism, including potential proxy contests, could result in substantial costs, such as legal fees and expenses, and divert management’s and our Board’s attention and resources from our businesses and strategic plans.
Although preventative measures may help to mitigate damage, the damage and disruption resulting from natural and environmental disasters may be significant. Such disasters can disrupt our consumers, dealers, or suppliers, which can interrupt our operational processes and our sales and profits. Our ability to remain competitive depends on successfully introducing new products and services that meet consumer expectations.
Although preventative measures may help to mitigate damage, the damage and disruption resulting from natural and environmental disasters may be significant. Such disasters can disrupt our consumers, dealers, or suppliers, which can interrupt our operational processes and our sales and profits. Our ability to remain competitive depends on successfully introducing new or redesigned products and services that meet consumer expectations.
The finance companies could require changes in repurchase terms that would result in an increase in our contractual obligations. 11 Our industry is characterized by intense competition, which affects our sales and profits. The premium performance sport boat, outboard, and sterndrive boat categories and the powerboat industry as a whole are highly competitive for consumers and dealers.
The finance companies could require changes in repurchase terms that would result in an increase in our contractual obligations. 11 Our industry is characterized by intense competition, which affects our sales and profits. The premium performance sport boat and outboard boat categories and the powerboat industry as a whole are highly competitive for consumers and dealers.
If credit conditions worsen and adversely affect the ability of consumers to finance potential purchases at acceptable terms and interest rates, it could result in a decrease in sales or delay improvement in sales. Our variable rate indebtedness subjects us to interest rate risk, which could cause our debt service obligations to increase significantly.
If credit conditions worsen and adversely affect the ability of consumers to finance potential purchases at acceptable terms and interest rates, it could result in a decrease in sales or delay improvement in sales. 7 Our variable rate indebtedness subjects us to interest rate risk, which could cause our debt service obligations to increase significantly.
Many factors, including creditworthiness of our dealers and overall aging and level of pipeline inventories, continue to influence the availability and terms of financing that our dealers are able to secure, which could cause dealers to shift the timing of purchases or reduce the total amount purchased in a given period of time, adversely affecting sales of our products.
Many factors, including creditworthiness of our dealers and overall aging and level of pipeline inventories, continue to influence the availability and 8 terms of financing that our dealers are able to secure, which could cause dealers to shift the timing of purchases or reduce the total amount purchased in a given period of time, adversely affecting sales of our products.
We believe that the market recognizes MasterCraft as a premier brand in the powerboat industry due to the overall superior value proposition that our boats deliver to consumers. We work tirelessly every day to maintain this iconic brand reputation. Pontoon Segment Our Pontoon segment, which manufactures and sells pontoon boats, consists of our Crest brand and our Balise brand.
We believe that the market recognizes MasterCraft as a premier brand in the powerboat industry due to the overall superior value proposition that our boats deliver to consumers. We work tirelessly every day to maintain this iconic brand reputation. Pontoon Segment Our Pontoon segment, which manufactures and sells pontoon boats, consists of our Crest and our Balise brands.
In addition to our product strategy, we manage a separate innovation development process which allows us to design innovative new features for our boats in a disciplined manner and to launch these innovations in a more rapid time frame and with higher 4 quality. These enhanced processes have reduced the time to market for our new product pipeline.
In addition to our product strategy, we manage a separate innovation development process which allows us to design innovative new features for our boats in a disciplined manner and to launch these innovations in a more rapid time frame and with higher quality. These enhanced processes have reduced the time to market for our new product pipeline.
Our ability to remain competitive and meet our growth objectives may be adversely affected by difficulties or delays in product development, such as an inability to develop viable new products, gain market acceptance of new products, generate sufficient capital to fund new product development, or obtain adequate intellectual property protection for new products.
Our ability to remain competitive and meet our growth objectives may be adversely affected by difficulties or delays in product development, such as an inability to develop viable new or redesigned products, gain market acceptance of new or redesigned products, generate sufficient capital to fund new or redesigned product development, or obtain adequate intellectual property protection for new or redesigned products.
Our reputation may be adversely affected by such claims, whether or not successful, 16 including potential negative publicity about our products. In addition, if any of our products are, or are alleged to be, defective, we may be required to participate in a recall of that product if the defect or alleged defect relates to safety.
Our reputation may be adversely affected by such claims, whether or not successful, including potential negative publicity about our products. In addition, if any of our products are, or are alleged to be, defective, we may be required to participate in a recall of that product if the defect or alleged defect relates to safety.
Although our management believes that the quality of our products in the premium performance sport, outboard boat, and sterndrive boat industries should permit us to maintain our relationships with our dealers and our market share position, there can be no assurance that we will be able to maintain or improve our relationships with our dealers or our market share position.
Although our management believes that the quality of our products in the premium performance sport and outboard boat industries should permit us to maintain our relationships with our dealers and our market share position, there can be no assurance that we will be able to maintain or improve our relationships with our dealers or our market share position.
In addition, elevated interest rates could also 8 incentivize dealers to reduce their inventory levels in order to reduce their interest exposure, which may further adversely impact the sales of our products and our results of operations. Our ability to adjust for demand in a rapidly changing environment may adversely affect our results of operations.
In addition, elevated interest rates could also incentivize dealers to reduce their inventory levels in order to reduce their interest exposure, which may further adversely impact the sales of our products and our results of operations. Our ability to adjust for demand in a rapidly changing environment may adversely affect our results of operations.
Our Products We design, manufacture, and sell premium recreational inboard ski/wake, outboard, and sterndrive boats that we believe deliver superior performance for water skiing, wakeboarding, and wake surfing, as well as general recreational boating. In addition, we offer various accessories, including trailers and aftermarket parts.
Our Products We design, manufacture, and sell premium recreational inboard ski/wake and outboard boats that we believe deliver superior performance for water skiing, wakeboarding, and wake surfing, as well as general recreational boating. In addition, we offer various accessories, including trailers and aftermarket parts.
Compliance with increasingly stringent regulatory and permit requirements may, in the future, cause us to incur substantial capital costs and increase our cost of operations, or may limit our operations, all of which could have a material adverse effect on our business or financial condition.
Compliance with stringent regulatory and permit requirements may, in the future, cause us to incur substantial capital costs and increase our cost of operations, or may limit our operations, all of which could have a material adverse effect on our business or financial condition.
In evaluating the potential 15 for impairment of goodwill and trade names, we make assumptions regarding future operating performance, business trends, and market and economic conditions. Such analyses further require us to make certain assumptions about sales, operating margins, growth rates, and discount rates.
In evaluating the potential for impairment of goodwill and trade names, we make assumptions regarding future operating performance, business trends, and market and economic conditions. Such analyses further require us to make certain assumptions about sales, operating margins, growth rates, and discount rates.
MasterCraft Segment Our MasterCraft segment, which manufactures and sells premium ski/wake boats, consists of our MasterCraft brand. The MasterCraft brand was founded in 1968 and evolved over the next 55-plus years to become the most award-winning ski/wake boat manufacturer in the world.
Our Segments MasterCraft Segment Our MasterCraft segment, which manufactures and sells premium ski/wake boats, consists of our MasterCraft brand. The MasterCraft brand was founded in 1968 and evolved over the next 55-plus years to become the most award-winning ski/wake boat manufacturer in the world.
We have several exclusive supplier partnerships for certain critical components, such as aluminum billet, towers, and engine packages. For MasterCraft, we also build custom trailers that match the exact size and design-characteristics of our boats.
We have several exclusive supplier partnerships for certain critical components, such 3 as aluminum billet, towers, and engine packages. For MasterCraft, we also build custom trailers that match the exact size and design-characteristics of our boats.
We maintain a website with the address www.mastercraft.com. We are not including the information contained in our website as part of, or incorporating it by reference into, this Annual Report on Form 10-K.
We maintain a website with the address www.mastercraft.com. We are not 5 including the information contained in our website as part of, or incorporating it by reference into, this Annual Report on Form 10-K.
However, we may experience material losses in the future, incur significant costs to defend claims or issue product recalls, experience claims in excess of our insurance coverage or that are not covered by insurance, or be subjected to fines or penalties.
However, we may experience material losses in the future, incur significant costs to defend claims or issue product recalls, experience claims in excess of our insurance coverage or that are not covered 16 by insurance, or be subjected to fines or penalties.
Copyright Office, the most recent of which will remain in force through 2030. Competitive Conditions and Position We believe each of our brands are highly competitive and have a reputation for quality.
Copyright Office, the most recent of which will remain in force through 2030. 4 Competitive Conditions and Position We believe each of our brands are highly competitive and have a reputation for quality.
In an effort to offset the increased interest exposure, we have and expect to continue offering dealer incentives to pass through the additional dealer costs to us, which in turn negatively impacts our margins.
In an effort to offset the increased interest exposure, we have offered and expect to continue offering dealer incentives to pass through the additional dealer costs to us, which in turn negatively impacts our margins.
Failure to hire, develop, and retain highly qualified and diverse employee talent and to develop and implement an adequate succession plan for the management team could disrupt our operations and adversely affect our business and our future success.
Failure to hire, develop, and retain highly qualified employee talent and to develop and implement an adequate succession plan for the management team could disrupt our operations and adversely affect our business and our future success.
Such trademarks may endure in perpetuity on a country-by-country basis provided that we comply with all statutory maintenance requirements, including continued use of each trademark in each such country. In addition, we own 38 registered U.S. copyrights. Finally, we have registered more than 50 vessel hull designs with the U.S.
Such trademarks may endure in perpetuity on a country-by-country basis provided that we comply with all statutory maintenance requirements, including continued use of each trademark in each such country. In addition, we own 38 registered U.S. copyrights. Finally, we have registered more than 20 vessel hull designs with the U.S.
The Company intends to purchase shares under the repurchase authorization from time to time on the open market at the discretion of management, subject to strategic considerations, market conditions, and other factors. Repurchases under our share repurchase program will reduce the market liquidity for our stock, potentially affecting its trading volatility and price.
The Company has and intends to continue to purchase shares under the repurchase authorization from time to time on the open market at the discretion of management, subject to strategic considerations, market conditions, and other factors. Repurchases under our share repurchase program will reduce the market liquidity for our stock, potentially affecting its trading volatility and price.
Today, MasterCraft participates in the highest margin producing category within the powerboat industry by manufacturing the industry’s premier competitive water ski, wakeboarding, and wake surfing performance boats. We believe the MasterCraft brand is known among boating enthusiasts for high performance, premier quality, and relentless innovation.
Today, MasterCraft participates in one of the highest margin producing category within the powerboat industry by manufacturing the industry’s premier competitive water ski, wakeboarding, and wake surfing performance boats. We believe the MasterCraft brand is known among boating enthusiasts for high performance, premier quality, and relentless innovation.
The ProStar, XStar and X models are geared towards the consumer seeking the most premium and highest performance boating experience that we offer, and generally command a price premium over our competitors’ boats at retail prices ranging from approximately $120,000 to $300,000.
The ProStar, XStar and X models are geared towards the consumer seeking the most premium and highest performance boating experience that we offer, and generally command a price premium over our competitors’ boats at retail prices ranging from approximately $120,000 to $500,000.
Significant competition exists for each of our brands, and the markets in which we compete range from being relatively concentrated for the ski/wake category, to being fragmented for the pontoon category. As of March 2024, based on Statistical Surveys, Inc.
Significant competition exists for each of our brands, and the markets in which we compete range from being relatively concentrated for the ski/wake category, to being fragmented for the pontoon category. As of March 2025, based on Statistical Surveys, Inc.
In addition, independent dealers in the powerboat industry have experienced significant consolidation in recent years, which could result in the loss of one or more of our dealers in the future if the surviving entity in any such consolidation purchases similar products from a competitor.
In addition, independent dealers in the marine industry have experienced significant consolidation in recent years, which could result in the loss of one or more of our dealers in the future if the surviving entity in any such consolidation purchases similar products from a competitor.
We believe our outstanding dealer networks and our proactive approach to dealer management allow us to distribute our products more efficiently than our competitors and will help us capitalize on growth opportunities as our industry volumes continue to increase.
We believe our outstanding dealer networks and our proactive approach to dealer management allow us to distribute our products more effectively than our competitors and will help us capitalize on growth opportunities as our industry volumes continue to increase.
Prices for crude oil, natural gas and other energy supplies have been increasing and have been subject to high volatility, including as a result of geopolitical factors or otherwise. Further, the global clean energy movement may also reduce the availability of fossil fuels, which may in turn cause increases to energy costs.
Prices for crude oil, natural gas and other energy supplies, from time to time, have been subject to high volatility, including as a result of geopolitical factors or otherwise. Further, the global clean energy movement may also reduce the availability of fossil fuels, which may in turn cause increases to energy costs.
Higher fuel prices may also have an effect on consumer preferences causing a shift from traditional fuel-powered boats to electric boats. Fluctuations in foreign currency exchange rates could adversely affect our results. We sell products manufactured in the U.S. into certain international markets in U.S. dollars.
Higher fuel prices may also have an effect on consumer preferences, which could cause a shift from traditional fuel-powered boats to electric boats. Fluctuations in foreign currency exchange rates could adversely affect our results. We sell products manufactured in the U.S. into certain international markets in U.S. dollars.
(“SSI”) data, the top five brands accounted for approximately 71% of the ski/wake markets and approximately 52% for the pontoon market. Market participants also range from small, single-product businesses to large, diversified companies. In addition, we compete indirectly with businesses that offer alternative leisure products and activities.
(“SSI”) data, the top five brands accounted for approximately 71% of the ski/wake markets and approximately 54% for the aluminum pontoon market. Market participants also range from small, single-product businesses to large, diversified companies. In addition, we compete indirectly with businesses that offer alternative leisure products and activities.
In addition, U.S. initiated tariffs on certain foreign goods, including raw materials, commodities, and products manufactured outside the United States that are used in our manufacturing processes may cause our manufacturing cost to rise, which would have a negative impact on our business and results of operations.
In addition, any United States initiated tariffs on certain foreign goods, including raw materials, commodities, and products manufactured outside the United States that are used in our manufacturing processes may cause our manufacturing cost to rise, which would have a negative impact on our business and results of operations.
We currently hold more than 65 U.S. patents and more than 10 foreign patents, including utility and design patents for our transom surf seating, our DockStar handling system, and our SurfStar surf system technology among numerous other innovations. Provided that we comply with all statutory maintenance requirements, our patents are expected to expire between 2028 and 2042.
We currently hold more than 75 U.S. patents and more than 10 foreign patents, including utility and design patents for our transom surf seating, our DockStar handling system, and our SurfStar surf system technology among numerous other innovations. Provided that we comply with all statutory maintenance requirements, our patents are expected to expire between 2028 and 2043.
Our research and product development expense for fiscal 2024, 2023, and 2022 was $8.6 million, $8.3 million, and $7.2 million, respectively. Intellectual Property We rely on a combination of patent, trademark, and copyright protection, trade secret laws, confidentiality procedures, and contractual provisions to protect our rights in our brands, products, and proprietary technology.
Our research and product development expense for fiscal 2025, 2024, and 2023 was $6.5 million, $6.8 million, and $6.3 million, respectively. Intellectual Property We rely on a combination of patent, trademark, and copyright protection, trade secret laws, confidentiality procedures, and contractual provisions to protect our rights in our brands, products, and proprietary technology.
In recent history, the MasterCraft brand has consistently competed for the leading market share position in the U.S. among manufacturers of ski/wake boats based on unit volume. As of March 2024, based on SSI data, the MasterCraft brand has the #1 market share in the ski/wake category with 19.3%.
In recent history, the MasterCraft brand has consistently competed for the leading market share position in the U.S. among manufacturers of ski/wake boats based on unit volume. As of March 2025, based on SSI data, the MasterCraft brand has the #1 market share in the ski/wake category with 19.2%.
Any common stock that we issue, including under our 2015 Incentive Award Plan or other equity incentive plans that we may adopt in the future, would dilute the percentage ownership of holders of our common stock. We currently do not intend to pay dividends on our common stock.
Any common stock that we issue, including under our Second Amended and Restated MasterCraft 2015 Incentive Award Plan or other equity incentive plans that we may adopt in the future, would dilute the percentage ownership of holders of our common stock. We currently do not intend to pay dividends on our common stock.
We perform an annual review of management succession plans with our board of directors (the “Board”), including reviewing executive officer and other important positions to substantially mitigate the risk associated with key contributor transitions, such as our Chief Executive Officer leadership transition in fiscal 2024, but we cannot ensure that all transitions will be implemented successfully.
We perform an annual review of management succession plans with our board of directors (the “Board”), including reviewing executive officer and other important positions to substantially mitigate the risk associated with key contributor transitions, such as our upcoming Chief Financial Officer leadership transition at the beginning of fiscal 2026, but we cannot ensure that all transitions will be implemented successfully.
Negative public perception of our products, our environmental, social and governance (ESG) practices or restrictions on the access or the use of our products in certain locations could materially adversely affect our business or results of operations. Demand for our products depends in part on their acceptance by the public.
Negative public perception of our products, our sustainability practices or restrictions on the access or the use of our products in certain locations could materially adversely affect our business or results of operations. Demand for our products depends in part on their acceptance by the public.
Our boats are built through a continuous flow manufacturing process that encompasses fabrication, assembly, quality management, and testing. We manufacture certain components and subassemblies for our boats, such as upholstery, and procure other components from third-party vendors and install them on the boat.
Our dedication to quality permits our consumers to enjoy our products with confidence. Our boats are built through a continuous flow manufacturing process that encompasses fabrication, assembly, quality management, and testing. We manufacture certain components and subassemblies for our boats, such as upholstery, and procure other components from third-party vendors and install them on the boat.
If interest rates continue to increase or remain elevated, the debt service obligations on our indebtedness will continue to increase or remain elevated even if the amount borrowed remains the same, and our net income and cash flows, including cash available for servicing our indebtedness, will correspondingly decrease.
If interest rates increase, any debt service obligations on our indebtedness will increase even if the amount borrowed remains the same, and our net income and cash flows, including cash available for servicing our indebtedness, will correspondingly decrease.
The majority of our MasterCraft brand dealers are exclusive to our MasterCraft product lines within the ski/wake category, highlighting the commitment of our key dealers to the MasterCraft brand. Our other brands are generally served on a nonexclusive basis by their respective dealers.
We target our distribution to the market category’s highest performing dealers. The majority of our MasterCraft brand dealers are exclusive to our MasterCraft product lines within the ski/wake category, highlighting the commitment of our key dealers to the MasterCraft brand. Our other brands are generally served on a nonexclusive basis by their respective dealers.
Public concerns about the environmental impact of our products or their perceived safety, or our ESG practices generally, could result in diminished public perception of the products we sell. Government, media, or activist pressure to limit emissions could also negatively impact consumers’ perceptions of our products.
Public concerns about the perceived safety of our products or the environmental impact, particularly with respect to shoreline preservation, or our sustainability practices generally, could result in diminished public perception of the products we sell. Government, media, or activist pressure to limit emissions could also negatively impact consumers’ perceptions of our products.
We also own in excess of 130 trademark registrations in various countries around the world, most notably for the MasterCraft, Crest, and Aviara names and/or logos, as well as numerous model names in MasterCraft’s Star Series, X, XT, and NXT product families, and we have several pending applications for additional registrations, including for the recently launched Balise brand.
We also own in excess of 120 trademark registrations in various countries around the world, most notably for the MasterCraft, Crest, and Balise names and/or logos, as well as numerous model names in MasterCraft’s XStar, X, XT, NXT, and ProStar product families, and we have several pending applications for additional registrations.
With sizes ranging from 24 to 26 feet and two unique seating configurations, the Balise line is the perfect boat for the discerning consumer. Our two models, Horizon and Helix, bring unrivaled luxury to the pontoon segment. Balise retail prices range from $230,000 to $350,000.
With sizes ranging from 24 to 26 feet and two unique seating configurations, the Balise line is the perfect boat for the discerning consumer. Our two models, Horizon and Helix, bring unrivaled luxury to the pontoon segment. Balise retail prices range from $230,000 to $350,000. Our products are sold through extensive networks of independent dealers domestically and internationally.
The new Current model allows consumers to enjoy a new level of peace and relaxation with less noise and minimal emissions. Crest’s retail prices range from approximately $40,000 to $250,000. We believe our Balise portfolio of models are the most refined pontoon boats in the luxury watercraft space.
The Electric Line harmonizes industry innovations by introducing eco-friendly pontoon boats. The Current model allows consumers to 2 enjoy a level of peace and relaxation with less noise and minimal emissions. Crest’s retail prices range from approximately $40,000 to $300,000. We believe our Balise portfolio of models are the most refined pontoon boats in the luxury watercraft space.
In addition to the disruptions in our information technology systems, cybersecurity threats and sophisticated and targeted cyberattacks pose a risk to our information technology systems.
In addition to the disruptions in our information technology systems, intentional or inadvertent insider personnel misconduct, cybersecurity threats and sophisticated and targeted cyberattacks pose a risk to our information technology systems.
Dealers are subject to numerous risks and uncertainties that could unfavorably affect their liquidity positions, including, among other things, continued access to adequate financing sources on a timely basis on reasonable terms. These financing sources are vital to our ability to sell products through our network of dealers.
Our dealers require adequate liquidity to finance their operations, including purchasing our products. Dealers are subject to numerous risks and uncertainties that could unfavorably affect their liquidity positions, including, among other things, continued access to adequate financing sources on a timely basis on reasonable terms.
(“Ilmor”) is our exclusive engine supplier and for our Crest brand, Mercury Marine (“Mercury”) is our largest engine supplier. For our Balise brand, we have partnered with Mercury to be the exclusive engine supplier. For the Aviara brand, Mercury provides outboard engines and Ilmor provides sterndrive engines. We maintain strong and long-standing relationships with Ilmor and Mercury.
(“Ilmor”) is our exclusive engine supplier and for our Crest brand, Mercury Marine (“Mercury”) is our largest engine supplier. For our Balise brand, we have partnered with Mercury to be the exclusive engine supplier. We maintain strong and long-standing relationships with Ilmor and Mercury. During fiscal 2025, Ilmor was our largest overall supplier.
We cannot assure you that we will be successful in managing these or any other significant risks that we may encounter related to the Aviara Transaction or any other divestiture of a segment or component of a segment.
Divestitures involve risks, including difficulties in the separation of operations, services, products and personnel. We cannot assure you that we will be successful in managing these or any other significant risks that we may encounter related to the Aviara Transaction or any other divestiture of a segment or component of a segment.
Should inflation continue to occur and interest rates remain elevated, prospective consumers may choose to forego or delay their purchases or buy a less expensive boat in the event credit is not available to finance their boat purchases.
Should inflation continue to occur and interest rates remain elevated, prospective consumers may choose to forego or delay their purchases or buy a less expensive boat in the event credit is not available to finance their boat purchases. Elevated interest rates for prolonged periods could also incentivize dealers to reduce their inventory levels in order to reduce their interest exposure.
Conversely, to the extent dealer supply were to fall below retail demand, we would need to increase production. If production demand increases, we may not be able to recruit or maintain sufficient skilled labor or our suppliers may not be able to deliver sufficient quantities of parts and components for us to match production with rapid changes in forecasted demand.
If production demand increases, we may not be able to recruit or maintain sufficient skilled labor or our suppliers may not be able to deliver sufficient quantities of parts and components for us to match production with rapid changes in forecasted demand.
The economic uncertainty caused by (i) general economic conditions, (ii) the impact of inflation and elevated interest rates, (iii) labor shortages, (iv) supply chain disruptions, (v) political uncertainty, including the upcoming 2024 elections, and regional or global conflicts, including the conflict in the Gaza strip and other recent unrest in the Middle East, (vi) public health crises, pandemics, or national emergencies and (vii) actions and stimulus measures adopted by local, state and federal governments may lead to unfavorable business outcomes.
The economic uncertainty caused by (i) general economic conditions, (ii) the impact of inflation and elevated interest rates, (iii) labor shortages, (iv) supply chain disruptions, (v) rapid changes in trade policy and new or increased tariffs, (vi) political uncertainty and regional or global conflicts (vii) public health crises, pandemics, or national emergencies and (viii) actions and stimulus measures adopted by local, state and federal governments may lead to unfavorable business outcomes.
We define international dealers as those dealers with locations outside of North America. We are present in Europe, Australia, South America, Africa, Asia, including Hong Kong, and the Middle East. We generated 5.9%, 4.6%, and 5.5% of our net sales outside of North America in fiscal 2024, 2023, and 2022, respectively.
We define international dealers as those dealers with locations outside of the United States. We are present in Canada, Europe, Australia, South America, Africa, Asia, including Hong Kong, and the Middle East. We generated 11.4%, 14.0%, and 10.8% of our net sales internationally in fiscal 2025, 2024, and 2023, respectively.
We believe that our brands are a significant contributor to the success of our business and that maintaining and enhancing our brands is important to expanding our consumer and dealer base.
We believe that our brands are a significant contributor to the success of our business and that maintaining and enhancing our brands is important to expanding our consumer and dealer base. Failure to continue to protect our brands, may adversely affect our business, financial condition, and results of operations.
Hurricanes, floods, earthquakes, storms, and catastrophic natural or environmental disasters, as well as acts of terrorism or civil unrest, could disrupt our distribution channel, operations, or supply chain and decrease consumer demand. If a catastrophic event takes place in one of our major sales markets, our sales could be diminished.
Hurricanes, floods, earthquakes, storms, and catastrophic natural or environmental disasters, as well as acts of terrorism or civil unrest, could disrupt our 9 distribution channel, operations, or supply chain and decrease consumer demand.
During fiscal 2024, Ilmor was our largest overall supplier. In addition to ski/wake and sterndrive engines, Ilmor’s affiliates produce engines used in a number of leading racing boats and race cars. We work closely with Ilmor to remain at the forefront of engine design, performance, and manufacturing.
In addition to ski/wake engines, Ilmor’s affiliates produce engines used in a number of leading racing boats and race cars. We work closely with Ilmor to remain at the forefront of engine design, performance, and manufacturing. We believe our long-term relationships with our engine supplier partners is a key competitive advantage.
The MasterCraft XT lineup is designed to offer ultimate flexibility to consumers with maximum customization and maximum performance at retail prices ranging from approximately $155,000 to $225,000.
The MasterCraft XT lineup is designed to offer ultimate flexibility to consumers with maximum customization and maximum performance at retail prices ranging from approximately $155,000 to $225,000. The NXT models offer the quality, performance, styling, and innovation of the MasterCraft brand to the entry-level consumer, with retail prices ranging from approximately $110,000 to $150,000.
We believe our long-term relationships with our engine supplier partners is a key competitive advantage. Research and Development, Product Development and Engineering We are strategically and financially committed to innovation, as reflected in our dedicated product development and engineering groups and evidenced by our track record of new product and feature introduction.
Research and Development, Product Development and Engineering We are strategically and financially committed to innovation, as reflected in our dedicated product development and engineering groups and evidenced by our track record of new product and feature introduction.
We believe MasterCraft has the only boat manufacturing facility to achieve compliance with all three of the ISO 9001 (Quality Management Systems), 14001 (Environmental Management Systems), and 45001 (International Occupational Health and Safety Management System) standards. Crest and Balise boats are manufactured at our 270,000 square-foot facility located in Owosso, Michigan.
Manufacturing MasterCraft boats and trailers are manufactured and lake-tested at our 310,000 square-foot facility located in Vonore, Tennessee. We are proud that our MasterCraft brand continues to achieve compliance with all three of the ISO 9001 (Quality Management Systems), 14001 (Environmental Management Systems), and 45001 (International Occupational Health and Safety Management System) standards.
Additionally, if such an event occurs near our business locations, manufacturing facilities or key supplier facilities, business operations, and/or operating systems could be interrupted. 9 We could be uniquely affected by weather-related catastrophic events, as we have dealers and third-party suppliers located in regions of the United States that have been and may be exposed to damaging storms, such as hurricanes and tornados, floods and environmental disasters.
We could be uniquely affected by weather-related catastrophic events, as we have dealers and third-party suppliers located in regions of the United States that have been and may be exposed to damaging storms, such as hurricanes and tornados, floods and environmental disasters.
The loss of one or more of these dealers could have a material adverse effect on our financial condition and results of operations. The number of dealers supporting our products and the quality of their marketing and servicing efforts are essential to our ability to generate sales. We face competition from other manufacturers in attracting and retaining independent boat dealers.
The number of dealers supporting our products and the quality of their marketing and servicing efforts are essential to our ability to generate sales. We face competition from other manufacturers in attracting and retaining independent boat dealers.
We structure executive compensation to pay for performance, reward our executives with equity in the Company in order to align their interests with the interests of our shareholders and allow those employees to share in our shareholders’ success, which we believe creates a performance culture, maintains morale and attracts, motivates and retains top talent. 5 Environmental, Safety, and Regulatory Matters Our operations are subject to extensive and frequently changing federal, state, local, and foreign laws and regulations, including those concerning product safety, environmental protection, and occupational health and safety.
We structure executive compensation to pay for performance, reward our executives with equity in the Company in order to align their interests with the interests of our shareholders and allow those employees to share in our shareholders’ success, which we believe creates a performance culture, maintains morale and attracts, motivates and retains top talent.
Significant increases in inflation, particularly those related to wages and increases in the cost of raw materials, have, and may continue to have, an adverse impact on our business, financial condition, and results of operations. In addition, new boat buyers often finance their purchases. Inflation, along with elevated interest rates, could translate into an increased cost of boat ownership.
Significant increases in inflation, particularly those related to wages and increases in the cost of raw materials, have, and may continue to have, an adverse impact on our business, financial condition, and results of operations.
Also, certain foreign governments have imposed tariffs on certain U.S. goods and may take additional retaliatory trade actions stemming from the tariffs, which could increase the pricing of our products and result in decreased consumer demand for our products outside of the United States, which could materially and adversely affect our business and results of operations.
These actions have resulted in, and are expected to further result in, foreign governments taking retaliatory trade actions, which could increase the pricing of our products and result in decreased consumer demand for our products outside of the United States, which could materially and adversely affect our business and results of operations.
The rigorous and consumer-centric attention to detail in the design and manufacturing of our products results in boats of high quality which provides an exceptional on water experience across all of our brands. Our dedication to quality permits our consumers to enjoy our products with confidence.
Crest and Balise boats are manufactured at our 270,000 square-foot facility located in Owosso, Michigan. The rigorous and consumer-centric attention to detail in the design and manufacturing of our products results in boats of high quality which provides an exceptional on water experience across all of our brands.
We believe that our operations and products are in compliance with these regulatory requirements. Historically, the cost of achieving and maintaining compliance with applicable laws and regulations has not been material.
Historically, the cost of achieving and maintaining compliance with applicable laws and regulations has not been material.
Additionally, the deterioration in the health of competitors’ dealers can negatively impact the marketplace, including our dealers, by causing boat inventories at those dealers to be deeply discounted or relocated to other geographical areas, resulting in elevated inventories our dealers are competing against. Our dealers require adequate liquidity to finance their operations, including purchasing our products.
Additionally, the deterioration in the health of competitors’ dealers, such as Tommy's Boats declaration of bankruptcy during fiscal 2025, has and may again in the future negatively impact the marketplace, including our dealers, by causing boat inventories at those dealers to be deeply discounted or relocated to other geographical areas, resulting in elevated inventories our dealers are competing against.
Many of our dealers have floor plan financing arrangements with third-party finance companies.
These financing sources are vital to our ability to sell products through our network of dealers. Many of our dealers have floor plan financing arrangements with third-party finance companies.
The Ultimate Luxury Line represents the pinnacle of lavish amenities, featuring the Continental, Continental NX, and Savannah models. This lineup anticipates every need with thoughtful options, an industry-first integrated dual windshield and premium upholstery and audio upgrades. The Electric Line harmonizes industry innovations by introducing eco-friendly pontoon boats.
The Premium Line boasts the Caribbean and Upper Sun Deck models with sleek lines, available tower options, unique color combinations and top-quality construction. The Ultimate Luxury Line represents the pinnacle of lavish amenities, featuring the Continental, Continental NX, and Savannah models. This lineup anticipates every need with thoughtful options, an industry-first integrated dual windshield and premium upholstery and audio upgrades.
Crest’s pontoon boats are designed to offer consumers the best in luxury, style and performance without compromise across a diverse model lineup ranging in length from 20 to 27 feet. The Signature Line is home to Crest’s Classic models. The Premium Line boasts three Caribbean models with sleek lines, available tower options, unique color combinations and top-quality construction.
Our Crest portfolio of pontoon boats are designed for the ultimate in comfort and recreational pleasure boating. Crest’s pontoon boats are designed to offer consumers the best in luxury, style and performance without compromise across a diverse model lineup ranging in length from 20 to 27 feet. The Signature Line is home to Crest’s Classic models.
To meet ever-changing consumer demands, both timing of market entry and pricing of new products are critical. For example, we launched our Balise brand, an all-new, independent pontoon brand in April 2024.
To meet ever-changing consumer demands, both timing of market entry and pricing of new or redesigned products are critical. For example, we launched our redesigned flagship product, the XStar, in the first half of fiscal 2025.
With luxurious accents and appointments not typically found in pontoons, we seek to manufacture our Balise boats to the highest quality standards and to position the brand as the most luxurious pontoon on the market. Aviara Segment Our Aviara segment, which manufactures and sells luxury day boats, consists of the Aviara brand.
With luxurious accents and appointments not typically found in pontoons, we seek to manufacture our Balise boats to the highest quality standards and to position the brand as the most luxurious pontoon on the market. Unless the context otherwise requires, “MasterCraft” and “Pontoon,” as used herein, refer to our segments as described above.
Risks Relating to Our Regulatory, Accounting, Legal, and Tax Environment International tariffs could materially and adversely affect our business and results of operations. Changes in laws and policies governing foreign trade could adversely affect our business.
Risks Relating to Our Regulatory, Accounting, Legal, and Tax Environment International tariffs could materially and adversely affect our business and results of operations. The Trump administration has announced certain changes, and has proposed additional changes, in trade policies, including the imposition of significant tariffs on imports from other countries.
As a result, we must balance the economies of level production with seasonal retail sales patterns experienced by our dealers and other macroeconomic conditions. Failure to adjust manufacturing levels adequately, decreased demand or the need to reduce production may have a material adverse effect on our financial condition and results of operations.
Failure to adjust manufacturing levels adequately, decreased demand or the need to reduce production may have a material adverse effect on our financial condition and results of operations. Conversely, to the extent dealer supply were to fall below retail demand, we would need to increase production.
Our business-to-business application efficiently executes many critical functions, including warranty registrations, warranty claims, boat ordering and tracking, parts ordering, technical support, and inventory reporting.
Our business-to-business application efficiently executes many critical functions, including warranty registrations, warranty claims, boat ordering and tracking, parts ordering, technical support, and inventory reporting. This system facilitates communication between our sales team and the dealer network and allows our manufacturing department to review consumer demand in real time.
As noted above, we plan to close our Aviara facility following consummation of the Aviara Transaction, which will decrease our headcount by approximately 190 employees. None of our employees are unionized or subject to collective bargaining agreements. One of our strategic priorities is developing a high-performing work organization and work environment that is consumer-focused and attracts and retains superior employees.
None of our employees are unionized or subject to collective bargaining agreements. One of our strategic priorities is developing a high-performing work organization and work environment that is consumer-focused and attracts and retains superior employees. We strive to offer our employees career-specific tools, training, resources, and support development opportunities.
In addition, our dealers must manage seasonal changes in consumer demand and inventory. Our business may experience difficulty in adapting to rapidly changing production and sales volumes. For fiscal 2024, we made the strategic decision to change production levels in order to rebalance inventory held by our dealers in light of the expected industry headwinds and weakness in retail demand.
In addition, our dealers must manage seasonal changes in consumer demand and inventory. Our business may experience difficulty in adapting to rapidly changing production and sales volumes.
We strive to offer our employees career-specific tools, training, resources, and support development opportunities. We utilize a talent management process, which includes performance appraisal and development planning. We are also deeply invested in attracting and developing the next generation of workforce talent to the boating industry.
We utilize a talent management process, which includes performance appraisal and development planning. We are also deeply invested in attracting and developing the next generation of workforce talent to the boating industry. We’ve partnered with local community and technical colleges by developing training programs and donating boats and supplies to position graduates for jobs in the boating industry upon graduation.
In addition, we have made strategic capital investments in capacity expansion activities to successfully capture growth opportunities and enhance product offerings, including brand relocation and plant expansions.
In addition, we have made strategic capital investments in capacity expansion activities to successfully capture growth opportunities and enhance product offerings, including brand relocation and plant expansions. We’ve also made strategic divestments of manufacturing assets, such as our Merritt Island manufacturing facility during fiscal 2025, to optimize our cost structure and direct resources toward other long-term initiatives.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThe CIO has served as our CISO for three years and has more than 20 years of experience in various roles involving managing cybersecurity functions, developing strategies to protect privacy, customer safety and intellectual property, and developing key capabilities such as product security engineering, risk management and cybersecurity governance.
Biggest changeThe CIO has served as our CISO for four years and has more than 20 years of experience in various roles involving managing cybersecurity functions, developing strategies to protect privacy, customer safety and intellectual property, and developing 19 key capabilities such as product security engineering, risk management and cybersecurity governance.
Our CIO reports to the Company’s Chief Executive Officer, as well as to the Board 19 and Audit Committee.
Our CIO reports to the Company’s Chief Executive Officer, as well as to the Board and Audit Committee.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeAll our Crest and Balise boats are manufactured in our 270,000 square-foot manufacturing facility located on approximately 63 acres in Owosso, Michigan. All Aviara boats are manufactured in our 160,000 square-foot manufacturing facility on approximately 38 acres in Merritt Island, Florida.
Biggest changeAll our Crest and Balise boats are manufactured in our 270,000 square-foot manufacturing facility located on approximately 63 acres in Owosso, Michigan.
ITEM 2. PRO PERTIES. As of June 30, 2024, all our MasterCraft boats and trailers are manufactured and lake-tested at our 310,000 square-foot manufacturing facility located on approximately 60 acres of lakefront land in Vonore, Tennessee. We also lease a 3,000 square-foot warehouse facility in West Yorkshire, England for warehousing of parts.
ITEM 2. PRO PERTIES. As of June 30, 2025, all our MasterCraft boats and trailers are manufactured and lake-tested at our 310,000 square-foot manufacturing facility located on approximately 65 acres of lakefront land in Vonore, Tennessee. We also lease a 3,000 square-foot warehouse facility in West Yorkshire, England for warehousing of parts.
Removed
As previously noted, we plan to close the Aviara production facility and offer the property for open market sale following closing of the Aviara Transaction.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeDuring the three months ended June 30, 2024, 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) April 1, 2024 - April 28, 2024 22,400 $ 20.79 22,400 $ 39,452 April 29, 2024 - May 26, 2024 113,448 20.34 113,448 37,145 May 27, 2024 - June 30, 2024 85,550 20.46 85,550 35,394 Total 221,398 221,398 (a) Represents weighted average price paid per share excluding commissions paid.
Biggest changeDuring the three months ended June 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) March 31, 2025 - April 27, 2025 94,880 $ 15.65 94,880 $ 28,921 April 28, 2025 - May 25, 2025 64,406 17.15 64,406 27,816 May 26, 2025 - June 30, 2025 108,374 17.94 108,374 25,872 Total 267,660 267,660 (a) Represents weighted average price paid per share excluding commissions paid.
The comparison assumes (i) a hypothetical investment of $100 in our common stock and the two above mentioned indices on June 30, 2019 and (ii) the full reinvestment of all dividends. The comparisons in the graph are not intended to be indicative of possible future performance of our common stock.
The comparison assumes (i) a hypothetical investment of $100 in our common stock and the two above mentioned indices on June 30, 2020 and (ii) the full reinvestment of all dividends. The comparisons in the graph are not intended to be indicative of possible future performance of our common stock.
The following stock performance graph illustrates the cumulative total shareholder return on our common stock for the period from June 30, 2019 to June 30, 2024, as compared to the Russell 2000 Index and the Dow Jones US Recreational Products Index.
The following stock performance graph illustrates the cumulative total shareholder return on our common stock for the period from June 30, 2020 to June 30, 2025, as compared to the Russell 2000 Index and the Dow Jones US Recreational Products Index.
The new authorization became effective upon the completion of the Company’s prior $50.0 million stock repurchase authorization. As of June 30, 2024, $35.4 million remained available under the new authorization. During the fiscal years ended June 30, 2024 and 2023, we repurchased approximately $16.3 million and $22.9 million of our common stock, respectively.
The new authorization became effective upon the completion of the Company’s prior $50.0 million stock repurchase authorization. As of June 30, 2025, $25.9 million remained available under the new authorization. During the fiscal years ended June 30, 2025 and 2024, we repurchased approximately $9.5 million and $16.3 million of our common stock, respectively.
As of August 23, 2024, we had approximately 20 registered holders per our transfer agent and 9,100 beneficial holders of record of our common stock. Dividends We presently do not anticipate declaring or paying cash dividends on our common stock.
As of August 22, 2025, we had approximately 20 registered holders per our transfer agent and 8,100 beneficial holders of record of our common stock. Dividends We presently do not anticipate declaring or paying cash dividends on our common stock.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeGAAP to Adjusted Net Income for the periods indicated: (Dollar amounts in thousands, except per share data) 2024 2023 2022 Net income from continuing operations $ 8,722 $ 90,452 $ 87,945 Income tax expense 1,407 27,135 26,779 Impairments (a) 9,827 — 1,100 Amortization of acquisition intangibles 1,812 1,849 1,849 Share-based compensation (b) 2,598 3,656 3,510 CEO transition costs (c) 1,708 — — Business development consulting costs (d) — 312 — Adjusted Net Income before income taxes 26,074 123,404 121,183 Adjusted income tax expense (e) 5,214 28,383 27,872 Adjusted Net Income $ 20,860 $ 95,021 $ 93,311 Adjusted Net Income per share: Basic $ 1.23 $ 5.39 $ 5.06 Diluted $ 1.22 $ 5.35 $ 5.01 Weighted average shares used for the computation of (f) : Basic Adjusted Net Income per share 16,930,348 17,618,797 18,455,226 Diluted Adjusted Net Income per share 17,038,305 17,765,117 18,636,512 27 The following table presents the reconciliation of net income from continuing operations per diluted share to Adjusted net income per diluted share for the periods presented: 2024 2023 2022 Net income from continuing operations per diluted share $ 0.51 $ 5.09 $ 4.72 Impact of adjustments: Income tax expense 0.08 1.53 1.44 Impairments (a) 0.57 — 0.06 Amortization of acquisition intangibles 0.11 0.10 0.10 Share-based compensation (b) 0.15 0.21 0.19 CEO transition costs (c) 0.10 — — Business development consulting costs (d) — 0.02 — Adjusted Net Income per diluted share before income taxes 1.52 6.95 6.51 Impact of adjusted income tax expense on net income per diluted share before income taxes (e) (0.30 ) (1.60 ) (1.50 ) Adjusted Net Income per diluted share $ 1.22 $ 5.35 $ 5.01 (a) Represents non-cash charges recorded in the Aviara segment of $9.8 million primarily for impairment of property, plant, equipment and inventory in fiscal 2024 and $1.1 million for impairment of goodwill in fiscal 2022.
Biggest changeGAAP to Adjusted Net Income for the periods indicated: (Dollar amounts in thousands, except per share data) 2025 2024 2023 Income from continuing operations $ 10,715 $ 23,243 $ 93,801 Income tax expense 2,820 6,730 28,300 Amortization of acquisition intangibles 1,800 1,812 1,849 Share-based compensation 2,915 2,602 3,462 Senior leadership transition and organizational realignment costs (a) 659 1,708 — Business development consulting costs (b) — — 312 Adjusted Net Income before income taxes 18,909 36,095 127,724 Adjusted income tax expense (c) 3,782 7,219 29,377 Adjusted Net Income $ 15,127 $ 28,876 $ 98,347 Adjusted Net Income per share: Basic $ 0.92 $ 1.71 $ 5.58 Diluted $ 0.92 $ 1.69 $ 5.54 Weighted average shares used for the computation of (d) : Basic Adjusted Net Income per share 16,428,485 16,930,348 17,618,797 Diluted Adjusted Net Income per share 16,525,773 17,038,305 17,765,117 The following table presents the reconciliation of income from continuing operations per diluted share to Adjusted net income per diluted share for the periods presented: 2025 2024 2023 Income from continuing operations per diluted share $ 0.65 $ 1.36 $ 5.28 Impact of adjustments: Income tax expense 0.17 0.39 1.59 Amortization of acquisition intangibles 0.11 0.11 0.10 Share-based compensation 0.18 0.15 0.19 Senior leadership transition and organizational realignment costs (a) 0.04 0.10 — Business development consulting costs (b) — — 0.02 Adjusted Net Income per diluted share before income taxes 1.15 2.11 7.18 Impact of adjusted income tax expense on net income per diluted share before income taxes (c) (0.23 ) (0.42 ) (1.64 ) Adjusted Net Income per diluted share $ 0.92 $ 1.69 $ 5.54 27 The following table presents a reconciliation of net cash flows by operating activities of continuing operations as determined in accordance with U.S.
Key Performance Measures From time to time we use certain key performance measures in evaluating our business and results of operations and we may refer to one or more of these key performance measures in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” These key performance measures include: • Unit sales volume — We define unit sales volume as the number of our boats sold to our dealers during a period. • Net sales per unit — We define net sales per unit as net sales divided by unit sales volume. • Gross margin — We define gross margin as gross profit divided by net sales, expressed as a percentage. • Net income margin — We define net income margin as net income from continuing operations divided by net sales, expressed as a percentage. • Adjusted EBITDA — We define Adjusted EBITDA as net income from continuing operations, before interest, income taxes, depreciation, and amortization (“EBITDA”), as further adjusted to eliminate certain non-cash charges and unusual items that we do not consider to be indicative of our core/ongoing operations.
Key Performance Measures From time to time we use certain key performance measures in evaluating our business and results of operations and we may refer to one or more of these key performance measures in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” These key performance measures include: • Unit sales volume — We define unit sales volume as the number of our boats sold to our dealers during a period. • Net sales per unit — We define net sales per unit as net sales divided by unit sales volume. • Gross margin — We define gross margin as gross profit divided by net sales, expressed as a percentage. • Net income margin — We define net income margin as income from continuing operations divided by net sales, expressed as a percentage. • Adjusted EBITDA — We define Adjusted EBITDA as income from continuing operations, before interest, income taxes, depreciation, and amortization (“EBITDA”), as further adjusted to eliminate certain non-cash charges and unusual items that we do not consider to be indicative of our core/ongoing operations.
For a reconciliation of Adjusted EBITDA margin to net income margin, see “Non-GAAP Measures” below. • Adjusted Net Income — We define Adjusted Net Income as net income from continuing operations, adjusted to eliminate certain non-cash charges and other items that we do not consider to be indicative of our core/ongoing operations and adjusted for the impact to income tax expense related to non-GAAP adjustments.
For a reconciliation of Adjusted EBITDA margin to net income margin, see “Non-GAAP Measures” below. • Adjusted Net Income — We define Adjusted Net Income as income from continuing operations, adjusted to eliminate certain non-cash charges and other items that we do not consider to be indicative of our core/ongoing operations and adjusted for the impact to income tax expense related to non-GAAP adjustments.
Adjusted Net Income and Adjusted Net Income Per Share We define Adjusted Net Income and Adjusted Net Income per share as net income from continuing operations adjusted to eliminate certain non-cash charges or other items that we do not consider to be indicative of our core and/or ongoing operations and reflecting income tax expense on adjusted net income before income taxes at our estimated annual effective tax rate.
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.
Some of these limitations are: 26 • Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future and the Non-GAAP Measures do not reflect any cash requirements for such replacements; • The Non-GAAP Measures do not reflect our cash expenditures, or future requirements for capital expenditures or contractual commitments; • The Non-GAAP Measures do not reflect changes in, or cash requirements for, our working capital needs; • Certain Non-GAAP Measures do not reflect our tax expense or any cash requirements to pay income taxes; • Certain Non-GAAP Measures do not reflect interest expense, or the cash requirements necessary to service interest payments on our indebtedness; and • The Non-GAAP Measures do not reflect the impact of earnings or charges resulting from matters we do not consider to be indicative of our core and/or ongoing operations, but may nonetheless have a material impact on our results of operations.
Some of these limitations are: • Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future and the Non-GAAP Measures do not reflect any cash requirements for such replacements; • Certain Non-GAAP Measures do not reflect our cash expenditures, or future requirements for capital expenditures or contractual commitments; • Certain Non-GAAP Measures do not reflect changes in, or cash requirements for, our working capital needs; • Certain Non-GAAP Measures do not reflect our tax expense or any cash requirements to pay income taxes; • Certain Non-GAAP Measures do not reflect interest expense, or the cash requirements necessary to service interest payments on our indebtedness; and • Certain Non-GAAP Measures do not reflect the impact of earnings or charges resulting from matters we do not consider to be indicative of our core and/or ongoing operations, but may nonetheless have a material impact on our results of operations.
Accrued expenses and other current liabilities decreased as a result of lower compensation related accruals, warranty costs as a result of reduced unit volume, and reduced volume rebates, offset by an increase in retail rebates. Accounts payable decreased as a result of decreased production levels. Income tax payable decreased due to the lower earnings compared to the prior year.
Accrued expenses and other current liabilities decreased as a result of lower compensation related accruals, warranty costs as a result of reduced unit volumes, and reduced volume rebates, offset by an increase in retail rebates. Accounts payable decreased as a result of decreased production levels. Income tax payable decreased due to the lower earnings compared to the prior year.
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.
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 31 behavior. Rebates that apply to boats already in dealer inventory are referred to as retail rebates.
In the application of these policies, certain estimates are made that may have a material impact on our financial condition and results of operations. Actual results could differ from those estimates and cause our reported net income to vary significantly from period to period.
In the application of these policies, certain estimates are made that may have a material impact on our financial condition and results of operations. Actual results could 29 differ from those estimates and cause our reported net income to vary significantly from period to period.
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 consolidated balance sheets, excluding the impact of acquisitions and non-cash adjustments.
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 consolidated balance 28 sheets, excluding the impact of acquisitions and non-cash adjustments.
See Note 12 in the accompanying Notes to Consolidated Financial Statements for more information. Repurchase Obligations — The Company has reserves to cover potential losses associated with repurchase obligations based on historical experience and current facts and circumstances. We incurred no material impact from repurchase events during fiscal 2024, 2023, or 2022.
See Note 12 in the accompanying Notes to Consolidated Financial Statements for more information. Repurchase Obligations — The Company has reserves to cover potential losses associated with repurchase obligations based on historical experience and current facts and circumstances. We incurred no material impact from repurchase events during fiscal 2025, 2024, or 2023.
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 net income from continuing operations as determined in accordance with U.S.
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. 26 The following table presents a reconciliation of income from continuing operations as determined in accordance with U.S.
Results of Operations We derived the consolidated statements of operations for the fiscal years ended June 30, 2024 and 2023 from our audited consolidated financial statements and related notes included elsewhere in this Form 10-K. Our historical results are not necessarily indicative of the results that may be expected in the future.
We derived the consolidated statements of operations for the fiscal years ended June 30, 2025 and 2024 from our audited consolidated financial statements and related notes included elsewhere in this Form 10-K. Our historical results are not necessarily indicative of the results that may be expected in the future.
Discussions of 2022 items and year-to-year comparisons between 2023 and 2022 are not included in this Annual Report on Form 10-K and can be found in Item 7 of the Company’s Annual Report on Form 10-K for the year ended June 30, 2023 , which was filed with the SEC on August 30, 2023.
Discussions of 2023 items and year-to-year comparisons between 2024 and 2023 are not included in this Annual Report on Form 10-K and can be found in Item 7 of the Company’s Annual Report on Form 10-K for the year ended June 30, 2024 , which was filed with the SEC on August 30, 2024.
Intangible assets not subject to amortization, including trade names, 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.
Intangible assets not subject to amortization, including trade names, are assessed for impairment at least annually, at June 30, and whenever events or changes in circumstances indicate that it is more likely than not that an asset may be impaired.
(f) Represents the Weighted average shares used for the computation of Basic and Diluted earnings (loss) per share as presented on the Consolidated Statements of Operations to calculate Adjusted Net Income per diluted share for all periods presented herein.
(d) Represents the Weighted average shares used for the computation of Basic and Diluted earnings (loss) per share as presented on the Consolidated Statements of Operations to calculate Adjusted Net Income per diluted share for all periods presented herein.
Inputs used to estimate this fair value include significant unobservable inputs that reflect the Company’s assumptions about the inputs that market 32 participants would use and, therefore, this liability is classified within Level 3 of the fair value hierarchy. We incurred no material impact from repurchase events during fiscal 2024, 2023, or 2022.
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. We incurred no material impact from repurchase events during fiscal 2025, 2024, or 2023.
Our actual results may differ materially from those contained in or implied by any forward-looking statements. This section generally discusses 2024 and 2023 items and year-to-year comparisons between 2024 and 2023.
Our actual results may differ materially from those contained in or implied by any forward-looking statements. This section generally discusses 2025 and 2024 items and year-to-year comparisons between 2025 and 2024.
(d) Represents non-recurring third-party costs associated with business development activities, primarily relating to consulting costs for evaluation and execution of internal growth and other strategic initiatives.
(b) Represents non-recurring third-party costs associated with business development activities, primarily relating to consulting costs for evaluation and execution of internal growth and other strategic initiatives.
The evaluation and execution of the internal growth and other strategic initiatives is a bespoke initiative, and the costs associated therewith do not constitute normal recurring cash operating expenses necessary to operate the Company’s business. (e) Reflects income tax expense at a tax rate of 20.0% for 2024 and 23.0% for 2023 and 2022.
The evaluation and execution of the internal growth and other strategic initiatives is a bespoke initiative, and the costs associated therewith do not constitute normal recurring cash operating expenses necessary to operate the Company’s business. (c) Reflects income tax expense at a tax rate of 20.0% for 2025 and 2024, and 23.0% for 2023.
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.
EBITDA, Adjusted EBITDA, EBITDA margin, Adjusted EBITDA margin, Adjusted Net Income, Adjusted Net Income per share, and Free Cash Flow, which we refer to collectively as the Non-GAAP Measures, are not measures of net income, operating income, or net cash flows as determined under accounting principles generally accepted in the United States, or U.S. GAAP.
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 from six to 12 months. Other Revenue Recognition Matters Dealers generally have no right to return unsold boats.
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. Other Revenue Recognition Matters Dealers generally have no right to return unsold boats.
We define Adjusted EBITDA as EBITDA further adjusted to eliminate certain non-cash charges or other items that we do not consider to be indicative of our core and/or ongoing operations. For the periods presented herein, these adjustments include non-cash impairment charges, share-based compensation, CEO transition costs, and business development consulting costs, as described in more detail below.
We define Adjusted EBITDA as EBITDA further adjusted to eliminate certain non-cash charges or other items that we do not consider to be indicative of our core and/or ongoing operations. For the periods presented herein, these adjustments include share-based compensation, senior leadership transition and organizational realignment costs, and business development consulting costs, as described in more detail below.
Liquidity and Capital Resources Our primary liquidity and capital resource needs are to finance working capital, fund capital expenditures, service our debt, fund potential acquisitions, and fund our share repurchase program. Our principal sources of liquidity are our cash balance, held-to-maturity securities, cash generated from operating activities, our revolving credit agreement and the refinancing and/or new issuance of long-term debt.
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, short-term investments, cash generated from operating activities, our revolving credit agreement and the refinancing and/or new issuance of long-term debt.
Working capital usage primarily consisted of a decrease in accrued expenses and other current liabilities, accounts payable, and income tax payable, offset by a decrease in inventories.
Changes in working capital primarily consisted of a decrease in accrued expenses and other current liabilities, accounts payable, and income tax payable, partially offset by a decrease in inventories and accounts receivable.
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.
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.
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 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. As of June 30, 2025, only the MasterCraft reporting unit has a goodwill balance.
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. 30 The Company calculates the fair value of its reporting units considering both the income approach and market approach.
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.
Net cash used in financing activities was $27.1 million, which included net payments of $3.0 million on long-term debt and $22.9 million of stock repurchases. 29 Off-Balance Sheet Arrangements The Company did not have any off-balance sheet financing arrangements as of June 30, 2024.
Net cash used in financing activities was $23.1 million, which included net payments of $4.5 million on long-term debt and $16.3 million of share repurchases. Off-Balance Sheet Arrangements The Company did not have any off-balance sheet financing arrangements as of June 30, 2025.
Long-Lived Assets The Company assesses the potential for impairment of its long-lived assets if facts and circumstances, such as declines in sales, earnings, or cash flows or adverse changes in the business climate, suggest that they may be impaired.
The analysis concluded both the undiscounted cash flows and fair value exceeded their related carrying values, respectively, resulting in no impairment. Long-Lived Assets The Company assesses the potential for impairment of its long-lived assets if facts and circumstances, such as declines in sales, earnings, or cash flows or adverse changes in the business climate, suggest that they may be impaired.
Contractual Obligations As of June 30, 2024, the Company’s material cash obligations were as follows: Long-Term Debt Obligations — See Note 9 – Long-Term Debt in the accompanying Notes to Consolidated Financial Statements for further information.
Contractual Obligations As of June 30, 2025, the Company’s material cash obligations were as follows: Long-Term Debt Obligations — See Note 9 – Long-Term Debt in the accompanying Notes to Consolidated Financial Statements for further information. Purchase Commitments — As of June 30, 2025, the Company is committed to purchasing $2.8 million of engines.
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.
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 decrease was primarily driven by lower unit volume and increased dealer incentives, partially offset by higher prices and favorable model mix and options. Operating income decreased 70.8 percent during fiscal 2024, when compared to the same prior year period.
The decrease was primarily driven by lower unit volumes and changes in price, partially offset by favorable model mix, decreased dealer incentives, and favorable option sales. Operating income decreased 30.1 percent during fiscal 2025, when compared to the same prior year period.
For fiscal 2023, our effective tax rate differs from the statutory rate, primarily due to a change in state taxes as a result of sell NauticStar. See the components of our effective tax rate reconciliation in Note 10. Significant judgment is required in evaluating our uncertain tax positions and determining our provision for income taxes.
See the components of our effective tax rate reconciliation in Note 10. Significant judgment is required in evaluating our uncertain tax positions and determining our provision for income taxes.
Favorable working capital change primarily consisted of an increase in accrued expenses and other current liabilities, and a decrease in accounts receivable, offset by a decrease in accounts payable, and an increase in prepaid expenses and other current assets. Accrued expenses and other current liabilities increased as a result of an increase in warranty costs and dealer incentives.
Favorable changes in working capital primarily consisted of a decrease in inventories, accounts receivable, other assets, prepaid expenses and other current assets, and an increase in income tax payable, partially offset by a decrease in accounts payable.
Inventories decreased as we continue to rebalance inventory levels to align with lower production levels. Net cash used in investing activities was $1.8 million, which included $16.4 million in net capital expenditures, partially offset by net purchases and maturities of $14.6 million in held-to-maturity securities. Our capital spending was primarily focused on facility enhancements, tooling, and information technology.
Inventories decreased as we rebalanced inventory levels to align with lower production levels. Accounts receivable decreased due to reduced unit volumes. Net cash provided by investing activities was $4.1 million, due to net proceeds in short-term investments of $14.6 million, partially offset by $10.5 million of capital expenditures. Our capital spending was focused on facility enhancements, information technology, and tooling.
Pontoon Segment The following table sets forth Pontoon segment results for the fiscal years ended: (Dollar amounts in thousands) 2024 2023 Change % Change Net sales $ 59,615 $ 141,247 $ (81,632 ) (57.8 %) Operating income (loss) (2,097 ) 20,106 (22,203 ) (110.4 %) Purchases of property, plant and equipment 2,613 7,149 (4,536 ) (63.4 %) Unit sales volume 1,241 2,836 (1,595 ) (56.2 %) Net sales per unit $ 48 $ 50 $ (2 ) (4.0 %) Net sales decreased 57.8 percent during fiscal 2024, when compared to fiscal 2023, as a result of decreased unit volume, increased dealer incentives, and unfavorable model mix and options, partially offset by higher prices.
Pontoon Segment The following table sets forth Pontoon segment results for the fiscal years ended: (Dollar amounts in thousands) 2025 2024 Change % Change Net sales $ 43,440 $ 59,615 $ (16,175 ) (27.1 %) Operating loss (9,426 ) (2,097 ) (7,329 ) 349.5 % Purchases of property, plant and equipment 1,979 2,613 (634 ) (24.3 %) Unit sales volume 745 1,241 (496 ) (40.0 %) Net sales per unit $ 58 $ 48 $ 10 20.8 % Net sales decreased 27.1 percent during fiscal 2025, when compared to fiscal 2024, as a result of decreased unit volume and increased dealer incentives, partially offset by favorable model mix and favorable option sales.
As discussed further in Note 6 to the Consolidated Financial Statements, during the year ended June 30, 2024, the Company recognized $6.9 million in long-lived asset impairment charges related to its Aviara reporting unit. 31 As discussed further in Note 3 to the Consolidated Financial Statements, during the year ended June 30, 2022, the Company recognized $5.3 million in long-lived asset impairment charges related to its NauticStar reporting unit.
During the year ended June 30, 2024, the Company recognized $6.9 million in long-lived asset impairment charges related to its Aviara reporting unit. These charges are included in the loss from discontinued operations.
The following table and discussion below relate to our cash flows from continuing operations for operating, investing, and financing activities: (Dollar amounts in thousands) 2024 2023 2022 Total cash provided by (used in): Operating activities $ 12,569 $ 136,824 $ 82,378 Investing activities (1,785 ) (120,933 ) (12,296 ) Financing activities (23,135 ) (27,148 ) (62,540 ) Net change in cash and cash equivalents from continuing operations $ (12,351 ) $ (11,257 ) $ 7,542 Fiscal 2024 Cash Flow from Continuing Operations Net cash provided by operating activities was $12.6 million, primarily due to net income, partially offset by working capital usage.
The following table and discussion below relate to our cash flows from continuing operations for operating, investing, and financing activities: (Dollar amounts in thousands) 2025 2024 2023 Total cash provided by (used in): Operating activities $ 38,222 $ 12,200 $ 136,630 Investing activities 20,044 4,051 (115,173 ) Financing activities (60,097 ) (23,135 ) (27,148 ) Net change in cash and cash equivalents from continuing operations $ (1,831 ) $ (6,884 ) $ (5,691 ) Fiscal 2025 Cash Flow from Continuing Operations Net cash provided by operating activities was $38.2 million, primarily due to net income and favorable working capital changes.
As of June 30, 2023, $1.6 million remained available under this program, all of which was fully utilized during the fiscal 2024 first quarter ended October 1, 2023. 28 On July 24, 2023, the Board authorized a new share repurchase program under which the Company may repurchase up to $50.0 million of its outstanding shares of common stock.
On July 24, 2023, the Board authorized a new share repurchase program under which the Company may repurchase up to $50.0 million of its outstanding shares of common stock. The new authorization became effective upon the completion of the Company’s previously existing $50.0 million stock repurchase authorization. As of June 30, 2025, $25.9 million remained available under the new authorization.
Segment Results MasterCraft Segment The following table sets forth MasterCraft segment results for the fiscal years ended: (Dollar amounts in thousands) 2024 2023 Change % Change Net sales $ 262,736 $ 468,656 $ (205,920 ) (43.9 %) Operating income 29,573 101,324 (71,751 ) (70.8 %) Purchases of property, plant and equipment 7,912 17,414 (9,502 ) (54.6 %) Unit sales volume 1,755 3,407 (1,652 ) (48.5 %) Net sales per unit $ 150 $ 138 $ 12 8.7 % Net sales decreased 43.9 percent during fiscal 2024, when compared to fiscal 2023.
Segment Results MasterCraft Segment The following table sets forth MasterCraft segment results for the fiscal years ended: (Dollar amounts in thousands) 2025 2024 Change % Change Net sales $ 240,763 $ 262,736 $ (21,973 ) (8.4 %) Operating income 20,658 29,573 (8,915 ) (30.1 %) Purchases of property, plant and equipment 7,219 7,912 (693 ) (8.8 %) Unit sales volume 1,548 1,755 (207 ) (11.8 %) Net sales per unit $ 156 $ 150 $ 6 4.0 % Net sales decreased 8.4 percent during fiscal 2025, when compared to fiscal 2024.
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.
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 market observable inputs, as well as considering whether or not there is a measure of risk related to the specific reporting unit’s forecasted performance.
Accounts receivable decreased primarily as a result of lower sales at the end of the period compared to the end of the prior-year period. Accounts payable decreased as a result of decreased production levels. Prepaid and other current assets increased primarily as a result of higher general insurance premiums.
Income tax payable increased due to timing of estimated payments. Prepaid expenses and other current assets decreased mainly due to lower general insurance premiums. Accounts payable decreased due to a reduction in raw material purchases and timing of purchases at the end of the period compared to the prior-year period.
The fair value of this reporting unit substantially exceeds its carrying value. 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 Company performed a qualitative assessment and concluded the fair value of the MasterCraft reporting unit is “more likely than not” greater than its carrying value. Other Intangible Assets The Company’s primary intangible assets other than goodwill are dealer networks and trade names acquired in business combinations.
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 exposure can be estimated.
The key judgements that affect our estimate for 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.
The Discount Rate is developed using market observable 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 reporting unit by applying market multiples for comparable public companies to the reporting unit’s financial results.
Fair value under the market approach is determined for each reporting unit by applying market multiples for comparable public companies to the reporting unit’s financial results.
Net Sales decreased 44.6 percent for fiscal 2024 when compared to fiscal 2023. The decrease was a result of lower unit volume, an increase in dealer incentives, and unfavorable model mix and options, partially offset by higher prices.
Net Sales decreased 11.8 percent for fiscal 2025 when compared to fiscal 2024. The decrease was a result of planned lower unit volumes and changes in price, partially offset by favorable model mix related to new product introductions, favorable option sales, and decreased dealer incentives. 24 Gross Margin.
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— We are subject to income taxes in the United States of America and the United Kingdom.
We also adjust our liability for specific warranty matters when they become known and 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.
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. The key judgements that affect our estimate for warranty liability include the number of units sold, historical and anticipated rates of warranty claims and cost per claim.
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.
During fiscal 2024 and fiscal 2023, the Company repurchased 750,943 shares and 872,055 shares of common stock for $16.3 million and $22.9 million, respectively, in cash, including related fees and expenses. We believe our cash balance, investments, cash from operations, and our ability to borrow, will be sufficient to provide for our liquidity and capital resource needs.
During fiscal 2025 and fiscal 2024, the Company repurchased 531,970 shares and 750,943 shares of common stock for $9.5 million and $16.3 million, respectively, in cash, including related fees and expenses.
GAAP to EBITDA and Adjusted EBITDA, and net income from continuing operations margin (expressed as a percentage of net sales) to Adjusted EBITDA margin (expressed as a percentage of net sales) for the periods indicated: % of Net % of Net % of Net (Dollar amounts in thousands) 2024 sales 2023 sales 2022 sales Net income from continuing operations $ 8,722 2.4% $ 90,452 13.7% $ 87,945 13.7% Income tax expense 1,407 27,135 26,779 Interest expense 3,292 2,679 1,471 Interest income (5,789 ) (3,351 ) — Depreciation and amortization 11,182 10,569 9,731 EBITDA 18,814 5.1% 127,484 19.3% 125,926 19.6% Impairments (a) 9,827 — 1,100 Share-based compensation (b ) 2,598 3,656 3,510 CEO transition costs (c) 1,708 — — Business development consulting costs (d) — 312 — Adjusted EBITDA $ 32,947 9.0% $ 131,452 19.9% $ 130,536 20.3% The following table sets forth a reconciliation of net 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 Adjusted EBITDA margin (expressed as a percentage of net sales) for the periods indicated: % of Net % of Net % of Net (Dollar amounts in thousands) 2025 sales 2024 sales 2023 sales Income from continuing operations $ 10,715 3.8% $ 23,243 7.2% $ 93,801 15.4% Income tax expense 2,820 6,730 28,300 Interest expense 1,169 3,292 2,679 Interest income (3,472 ) (5,789 ) (3,351 ) Depreciation and amortization 9,579 8,375 8,396 EBITDA 20,811 7.3% 35,851 11.1% 129,825 21.3% Share-based compensation 2,915 2,602 3,462 Senior leadership transition and organizational realignment costs (a) 659 1,708 — Business development consulting costs (b) — — 312 Adjusted EBITDA $ 24,385 8.6% $ 40,161 12.5% $ 133,599 21.9% The following table sets forth a reconciliation of income from continuing operations as determined in accordance with U.S.
As of June 30, 2024, we had no amounts outstanding under the Revolving Credit Facility, leaving $100.0 million of available borrowing capacity. Total debt outstanding under the Term Loan as of June 30, 2024 and June 30, 2023 was $49.3 million and $53.7 million, respectively.
As of June 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 Consolidated Financial Statements for further details.
For fiscal 2024, our effective tax rate differs from the statutory rate, primarily due to a state benefit for separate company losses and the relative impact of tax credits to the declines in pre-tax book income.
Income Taxes— We are subject to income taxes in the United States of America and the United Kingdom. For fiscal 2025 and 2024, our effective tax rate differs from the statutory rate, primarily due to the inclusion of the state tax rate and uncertain tax positions, partially offset by the benefit from tax credits.
For the periods presented herein, these adjustments include non-cash impairment charges, other intangible asset amortization, share-based compensation, CEO transition costs, and business development consulting costs.
For the periods presented herein, these adjustments include other intangible asset amortization, share-based compensation, senior leadership transition and organizational realignment costs, and business development consulting costs. Free Cash Flow We define Free Cash Flow from continuing operations as net cash flows from operating activities less purchases of property, plant, and equipment.
Financial Statements and Supplementary Data — Note 1 — Significant Accounting Policies — New Accounting Pronouncements.”
See Note 12 in Notes to Consolidated Financial Statements for more information on repurchase obligations. New Accounting Pronouncements See “Part II, Item 8. Financial Statements and Supplementary Data — Note 1 — Significant Accounting Policies — New Accounting Pronouncements.”
Operating loss was $2.1 million during fiscal 2024, compared to operating income of $20.1 million in fiscal 2023. The change was primarily due to decreased net sales, as discussed above, and lower cost absorption. Purchases of property, plant, and equipment decreased $4.5 million during fiscal 2024, when compared to fiscal 2023.
Operating loss was $9.4 million during fiscal 2025, compared to $2.1 million in fiscal 2024. The change was primarily due to decreased net sales, as discussed above, and increased labor and materials cost. 25 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.
Net cash used in financing activities was $23.1 million, which included net payments of $4.5 million on long-term debt and $16.3 million of stock repurchases. Fiscal 2023 Cash Flow from Continuing Operations Net cash provided by operating activities was $136.8 million, primarily due to net income, as well as reductions of working capital as defined above.
Fiscal 2024 Cash Flow from Continuing Operations Net cash provided by operating activities was $12.2 million, primarily due to net income, partially offset by changes in working capital as defined above.
Product Warranties — The Company offers warranties on the sale of certain products for periods of between one and five years from the date of retail sale. These warranties require us or our dealers to repair or replace defective products during the warranty period at no cost to the consumer.
Product Warranties — The Company offers warranties on the sale of certain products generally for periods of between one and ten years from the date of retail sale, and provides a limited lifetime warranty on certain parts, as noted in the warranty.
The dealer network intangible asset within our Pontoon reporting unit that is subject to amortization is evaluated for impairment if events or changes in circumstances suggest that it may be impaired. As part of the impairment test, the Company may perform a quantitative assessment to determine whether the dealer network intangible asset is impaired.
The dealer network intangible asset within our Pontoon reporting unit that is subject to amortization is evaluated for impairment using a process similar to that used to evaluate long-lived assets as described below.
Interest income increased $2.4 million during fiscal 2024 primarily due to fiscal 2024 benefiting from a full year of investment income, compared to a partial year in fiscal 2023. Income Tax Expense. Our consolidated effective income tax rate decreased to 13.9 percent for fiscal 2024 from 23.1 percent for fiscal 2023.
Interest income decreased $2.3 million during fiscal 2025 primarily due to certain investment securities being sold to repay outstanding borrowings under the Revolving Credit Facility during the second quarter of fiscal 2025. Income Tax Expense. Our consolidated effective income tax rate decreased to 20.8 percent for fiscal 2025 from 22.5 percent for fiscal 2024.
For a reconciliation of net income from continuing operations to Adjusted Net Income, see “Non-GAAP Measures” below. Fiscal 2024 Overview As anticipated, general market volatility and economic headwinds created uncertainty and softness in the retail environment for fiscal 2024.
For a reconciliation of income from continuing operations to Adjusted Net Income, see “Non-GAAP Measures” below. • Free cash flow — We define Free cash flow from continuing operations as net cash from operating activities less purchases of property, plant, and equipment.
Net cash used in investing activities was $120.9 million, due to net investments in held-to-maturity securities of $90.6 million and $30.3 million of capital expenditures. Our capital spending was focused on tooling, capacity expansion, strategic initiatives, and information technology.
Net cash provided by investing activities was $20.0 million, which included net proceeds of $29.2 million from available-for-sale securities, partially offset by $9.2 million in capital expenditures. Our capital spending was primarily focused on information technology, tooling and machinery and equipment.
Operating expenses increased 12.6 percent during fiscal 2024 when compared to the same prior year period due to non-cash impairment charges of $9.8 million recorded in our Aviara segment and CEO transition costs, partially offset by decreased compensation related expenses. Interest Expense. Interest expense increased $0.6 million primarily due to higher effective interest rates. Interest Income.
Operating expenses increased 3.4 percent during fiscal 2025 when compared to the same prior year period mainly due to increased variable compensation costs. Interest Expense. Interest expense decreased $2.1 million primarily due to all outstanding borrowings under the Credit Agreement being repaid during the first six months of fiscal 2025. Interest Income.
Removed
As previously disclosed, because of the anticipated softness in retail demand, the Company approached its wholesale production plan for fiscal 2024 with a prudent level of caution and a focus on rebalancing dealer inventories consistent with the expected retail demand.
Added
For a reconciliation of net cash provided by operating activities of continuing operations to Free cash flow, see “Non-GAAP Measures” below. 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.
Removed
As a result, we experienced lower cost absorption and decreased sales volume, leading to lower net sales and gross margin compared to the prior fiscal year. On March 4, 2024, Frederick Brightbill, Chief Executive Officer (“CEO”) and Chairman of the Board announced his retirement as CEO of the Company, effective March 18, 2024, and as Chairman effective June 30, 2024.
Added
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 Consolidated Financial Statements for more information on discontinued operations.
Removed
In connection with Mr. Brightbill’s retirement, the Company appointed Brad Nelson as CEO, effective March 18, 2024. Mr. Nelson also joined the Board at that time. Roch Lambert, the Company’s former Lead Independent Director, assumed the role of Chairman of the Board, effective July 1, 2024. Mr. Brightbill will serve as a consultant to the Company through June 30, 2025.
Added
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 stepped down as CFO, effective June 30, 2025, at which time, Mr. Oxley began serving as a Special Advisor. Scott Kent, Vice President of Finance, succeeded Mr.
Removed
During fiscal 2024, we recognized $1.7 million of CEO transition costs in General and administrative expense within the consolidated statements of operations. CEO transition costs include amounts paid to the former CEO under the terms of his retirement agreements and related legal fees.
Added
Oxley as CFO, effective July 1, 2025. 23 Tariff and Trade Environment The recently imposed U.S. tariffs did not materially impact our fiscal 2025 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.
Removed
Also included are recruiting and relocation costs related to the new CEO. 23 Aviara Impairment Activity During the fourth quarter of fiscal 2024, the Company identified an indication of impairment related to its Aviara segment’s property, plant, equipment and inventory.
Added
The extent of the impact of tariffs on the Company’s business is highly uncertain and difficult to predict. We are closely monitoring the rapidly evolving tariff landscape and are working diligently with key suppliers to mitigate risks.
Removed
After performing a recoverability test, the Company recognized an impairment charge of $9.8 million, which adjusted the related assets to their estimated fair value. See Notes 5 and 6 for further information related to the impairment analysis.
Added
For additional information regarding the potential impacts of tariffs on our business and results of operations, see Item 1A “Risk Factors — Risks Relating to Our Regulatory, Accounting, Legal, and Tax Environment.” Results of Operations Fiscal 2025 was impacted by anticipated market and economic uncertainty.
Removed
Subsequent to year-end, the Company announced that it had entered into an asset exchange agreement under which it will transfer rights to its Aviara brand of luxury dayboats and certain related assets to a third party. The Aviara Transaction is subject to customary closing conditions and is expected to close in the first quarter of fiscal 2025.
Added
Net sales decreased primarily due to planned lower unit volumes aimed at aligning dealer inventories with retail demand. Gross margin declined due to lower cost absorption driven by decreased production volume.
Removed
Following consummation of the Aviara Transaction, we intend to close the Merritt Island facility and offer the property for open market sale. The Company intends to classify Aviara as discontinued operations beginning in the first quarter of fiscal 2025.
Added
Consolidated Results 2025 2024 Change % Change (Dollar amounts in thousands) Consolidated statements of operations : NET SALES $ 284,203 $ 322,351 $ (38,148 ) (11.8 %) COST OF SALES 227,338 250,741 (23,403 ) (9.3 %) GROSS PROFIT 56,865 71,610 (14,745 ) (20.6 %) OPERATING EXPENSES: Selling and marketing 11,740 11,203 537 4.8 % General and administrative 32,093 31,119 974 3.1 % Amortization of other intangible assets 1,800 1,812 (12 ) (0.7 %) Total operating expenses 45,633 44,134 1,499 3.4 % OPERATING INCOME 11,232 27,476 (16,244 ) (59.1 %) OTHER INCOME (EXPENSE): Interest expense (1,169 ) (3,292 ) 2,123 (64.5 %) Interest income 3,472 5,789 (2,317 ) (40.0 %) INCOME BEFORE INCOME TAX EXPENSE 13,535 29,973 (16,438 ) (54.8 %) INCOME TAX EXPENSE 2,820 6,730 (3,910 ) (58.1 %) INCOME FROM CONTINUING OPERATIONS $ 10,715 $ 23,243 $ (12,528 ) (53.9 %) Additional financial and other data: Unit sales volume: MasterCraft 1,548 1,755 (207 ) (11.8 %) Pontoon 745 1,241 (496 ) (40.0 %) Consolidated unit sales volume 2,293 2,996 (703 ) (23.5 %) Net sales: MasterCraft $ 240,763 $ 262,736 $ (21,973 ) (8.4 %) Pontoon 43,440 59,615 (16,175 ) (27.1 %) Consolidated net sales $ 284,203 $ 322,351 $ (38,148 ) (11.8 %) Net sales per unit: MasterCraft $ 156 $ 150 $ 6 4.0 % Pontoon 58 48 10 20.8 % Consolidated net sales per unit 124 108 16 14.8 % Gross margin 20.0 % 22.2 % (220) bps Net Sales.
Removed
Consolidated Results 2024 2023 Change % Change (Dollar amounts in thousands) Consolidated statements of operations : NET SALES $ 366,588 $ 662,046 $ (295,458 ) (44.6 %) COST OF SALES 299,491 492,333 (192,842 ) (39.2 %) GROSS PROFIT 67,097 169,713 (102,616 ) (60.5 %) OPERATING EXPENSES: Selling and marketing 13,430 13,808 (378 ) (2.7 %) General and administrative 34,396 37,034 (2,638 ) (7.1 %) Amortization of other intangible assets 1,812 1,956 (144 ) (7.4 %) Impairments 9,827 — 9,827 — Total operating expenses 59,465 52,798 6,667 12.6 % OPERATING INCOME 7,632 116,915 (109,283 ) (93.5 %) OTHER INCOME (EXPENSE): Interest expense (3,292 ) (2,679 ) (613 ) 22.9 % Interest income 5,789 3,351 2,438 72.8 % INCOME BEFORE INCOME TAX EXPENSE 10,129 117,587 (107,458 ) (91.4 %) INCOME TAX EXPENSE 1,407 27,135 (25,728 ) (94.8 %) NET INCOME FROM CONTINUING OPERATIONS $ 8,722 $ 90,452 $ (81,730 ) (90.4 %) Additional financial and other data: Unit sales volume: MasterCraft 1,755 3,407 (1,652 ) (48.5 %) Pontoon 1,241 2,836 (1,595 ) (56.2 %) Aviara 134 134 — — Consolidated unit sales volume 3,130 6,377 (3,247 ) (50.9 %) Net sales: MasterCraft $ 262,736 $ 468,656 $ (205,920 ) (43.9 %) Pontoon 59,615 141,247 (81,632 ) (57.8 %) Aviara 44,237 52,143 (7,906 ) (15.2 %) Consolidated net sales $ 366,588 $ 662,046 $ (295,458 ) (44.6 %) Net sales per unit: MasterCraft $ 150 $ 138 $ 12 8.7 % Pontoon 48 50 (2 ) (4.0 %) Aviara 330 389 (59 ) (15.2 %) Consolidated net sales per unit 117 104 13 12.5 % Gross margin 18.3 % 25.6 % (730) bps Net Sales.
Added
Gross Margin percentage declined 220 basis points during fiscal 2025 when compared to fiscal 2024. Lower margins were the result of lower cost absorption due to decreased production volume, material and overhead inflation, and changes in sales price. Operating Expenses .

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeSubstantial increases in the prices of raw materials, parts, and components would increase our operating costs, and could reduce our profitability if we are unable to recoup the increased costs through higher product prices or improved operating efficiencies. As of June 30, 2024, we had $49.5 million of long-term debt outstanding, bearing interest at the effective interest rate of 6.69%.
Biggest changeSubstantial increases in the prices of raw materials, parts, and components would increase our operating costs, and could reduce our profitability if we are unable to recoup the increased costs through higher product prices or improved operating efficiencies. ITEM 8. FINANCIAL STATEMENT S AND SUPPLEMENTARY DATA.
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See Note 9 in Notes to Consolidated Financial Statements for more information regarding our long-term debt. A hypothetical 1% increase or decrease in interest rates would have resulted in a $0.5 million change to our interest expense for fiscal 2024. ITEM 8. FINANCIAL STATEMENT S AND SUPPLEMENTARY DATA.

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