美國
證券交易委員會
華盛頓特區20549
表格
根據1934年證券交易法第13或15(d)條款的季度報告。 |
截至本季度結束
或
根據1934年證券交易法第13或15(d)條款的過渡報告 |
到 至
委員會檔案編號
（依憑章程所載的完整登記名稱）
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（註冊地或其他轄區 |
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(國稅局雇主 |
組織或登記證明文件 |
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識別號碼) |
(總公司地址) (郵政編碼)
(
(註冊人電話號碼，包括區號)
根據法案第12(b)條規定註冊的證券：
每種類別的名稱 |
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交易 標的 |
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每個註冊交易所的名稱 |
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請勾選表示：（1）申報人在過去12個月內（或申報人在此期間需要提交此類報告的較短時間內，已提交了證券交易所法案第13條或第15(d)條規定的所有報告；並 （2）該申報人在過去90天內一直受到申報要求的約束。 ☑
請勾選表示該登記者是否已在過去12個月內（或該登記者需要提交這些文件的較短期間）向Regulation S-t的第232.405條提出的每個互動式數據文件。 ☑
請勾選指示登記者是否為大型快速提交人、快速提交人、非快速提交人、較小的報告公司或新興成長型公司。請參閱交易所法規120億2條，了解「大型快速提交人」、「快速提交人」、「較小的報告公司」和「新興成長型公司」的定義。
大型加速歸檔人 |
☐ |
☑ |
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非加速歸檔人 |
☐ |
小型報告公司 |
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新興成長型企業 |
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如果一家新興成長型公司，請用勾選標記表示該申報人已選擇不使用根據證交所法案13(a)條款提供的任何新的或修訂過的財務會計準則的延長過渡期。 ☐
請以核取記號表示，申報人是否為殼公司（根據《交易所法》第120億2條的定義）。 ☐ 是
截至2024年11月1日，有
目錄
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頁面 |
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第I部分 |
財務信息 |
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項目1. |
基本報表 |
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2
關於前瞻性陳述的警示性聲明
本季度在表單10-Q的報告中含有一些符合聯邦證券法意義上的「前瞻性陳述」。這些前瞻性陳述通常可以通過使用包含「可能」、「或許」、「可能」、「將」、「期望」、「可能」、「相信」、「持續」、「預計」、「估計」、「打算」、「計劃」、「項目」和其他類似詞語或短語的陳述來識別。前瞻性陳述涉及估計和不確定因素，可能導致實際結果與前瞻性陳述中所述有所不同。
本季度報告10-Q中所含的前瞻性陳述是基於我們的行業經驗和對歷史趨勢、當前狀況、預期未來發展及其他我們認為合適的重要因素所作的假設。當您閱讀並考慮這份季度報告10-Q時，您應該了解這些陳述並非對表現或結果的保證。它們涉及風險、不確定性（其中許多超出我們控制範圍）和假設。儘管我們相信這些前瞻性陳述是基於合理的假設，您應該意識到許多重要因素可能會影響我們實際的營運和財務表現，並導致我們的表現與前瞻性陳述中預期的表現有實質不同，包括但不限於以下內容：利率變動、總體經濟條件、政治不確定性（包括因2024年選舉即將到來而產生的影響）、對我們產品的需求、通貨膨脹、消費者喜好變化、我們行業內的競爭、我們能否維持可靠的經銷商網絡、庫存增加導致經銷商成本增加、我們管理製造水平和固定成本基礎的能力、我們新產品（包括新品牌Balise）的成功推出、我們戰略性產品出讓的成功、如俄羅斯和烏克蘭之間的衝突、加沙地帶的衝突以及中東地區的一般動盪等地緣政治衝突、金融機構干擾以及在我們於2024年6月30日結束的財政年度以提交給證券交易委員會（“SEC”）的2024年度報告10-k中標題“風險因素”下描述的其他重要因素。如果這些風險或不確定性之一發生，或者這些假設中的任何一個被證明不正確，我們的實際營運和財務表現可能與這些前瞻性陳述中預期的表現有實質不同。
Further, any forward-looking statement speaks only as of the date on which it is made, and except as required by law, we undertake no obligation to update any forward-looking statement contained in this Quarterly Report on Form 10-Q to reflect events or circumstances after the date on which it is made or to reflect the occurrence of anticipated or unanticipated events or circumstances. New important factors that could cause our business not to develop as we expect may emerge from time to time, and it is not possible for us to predict all of them.
3
MASTERCRAFT BOAT HOLDINGS, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
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Three Months Ended |
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September 29, |
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October 1, |
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(Dollar amounts in thousands, except per share data) |
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2024 |
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2023 |
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NET SALES |
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$ |
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$ |
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COST OF SALES |
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GROSS PROFIT |
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OPERATING EXPENSES: |
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Selling and marketing |
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General and administrative |
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Amortization of other intangible assets |
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Total operating expenses |
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OPERATING INCOME |
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OTHER INCOME (EXPENSE): |
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Interest expense |
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Interest income |
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INCOME BEFORE INCOME TAX EXPENSE |
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INCOME TAX EXPENSE |
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INCOME FROM CONTINUING OPERATIONS |
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LOSS FROM DISCONTINUED OPERATIONS, NET OF TAX (Note 3) |
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( |
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NET INCOME (LOSS) |
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$ |
( |
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$ |
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INCOME (LOSS) PER SHARE: |
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Basic |
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Continuing operations |
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$ |
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$ |
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Discontinued operations |
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( |
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( |
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Net income (loss) |
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$ |
( |
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$ |
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Diluted |
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Continuing operations |
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$ |
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$ |
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Discontinued operations |
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( |
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( |
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Net income (loss) |
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$ |
( |
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$ |
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WEIGHTED AVERAGE SHARES USED FOR COMPUTATION OF: |
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Basic earnings per share |
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Diluted earnings per share |
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Notes to Unaudited Condensed Consolidated Financial Statements form an integral part of the condensed consolidated financial statements.
4
MASTERCRAFT BOAT HOLDINGS, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
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September 29, |
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June 30, |
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(Dollar amounts in thousands, except per share data) |
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2024 |
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2024 |
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ASSETS |
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CURRENT ASSETS: |
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Cash and cash equivalents |
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$ |
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$ |
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Held-to-maturity securities (Note 4) |
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Accounts receivable, net of allowance of $ |
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Income tax receivable |
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Inventories, net (Note 5) |
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Prepaid expenses and other current assets |
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Current assets held-for-sale (Note 3) |
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Total current assets |
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Property, plant and equipment, net (Note 6) |
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Goodwill (Note 7) |
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Other intangible assets, net (Note 7) |
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Deferred income taxes |
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Deferred debt issuance costs, net |
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Other long-term assets |
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Non-current assets held-for-sale (Note 3) |
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Total assets |
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$ |
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$ |
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LIABILITIES AND EQUITY |
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CURRENT LIABILITIES: |
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Accounts payable |
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Income tax payable |
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Accrued expenses and other current liabilities (Note 8) |
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Current portion of long-term debt, net of unamortized debt issuance costs (Note 9) |
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Current liabilities held-for-sale (Note 3) |
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Total current liabilities |
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Long-term debt, net of unamortized debt issuance costs (Note 9) |
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Unrecognized tax positions |
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Other long-term liabilities |
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Long-term liabilities held-for-sale (Note 3) |
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Total liabilities |
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EQUITY: |
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Common stock, $ |
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Additional paid-in capital |
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Retained earnings |
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MasterCraft Boat Holdings, Inc. equity |
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Noncontrolling interest |
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Total equity |
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Total liabilities and equity |
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$ |
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$ |
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Notes to Unaudited Condensed Consolidated Financial Statements form an integral part of the condensed consolidated financial statements.
5
MASTERCRAFT BOAT HOLDINGS, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF EQUITY
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Common Stock |
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Additional Paid-in |
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Retained |
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MasterCraft Boat Holdings, Inc. |
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Noncontrolling |
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Total |
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(Dollar amounts in thousands) |
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Shares |
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Amount |
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Capital |
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Earnings |
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Equity |
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Interest |
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Equity |
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Balance at June 30, 2024 |
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$ |
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$ |
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$ |
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$ |
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$ |
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$ |
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Share-based compensation activity |
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— |
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— |
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Repurchase and retirement of common stock |
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( |
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( |
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( |
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— |
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( |
) |
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— |
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( |
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Net loss |
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— |
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— |
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— |
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( |
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( |
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— |
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( |
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Balance at September 29, 2024 |
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$ |
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$ |
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$ |
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$ |
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$ |
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$ |
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MasterCraft Boat |
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Common Stock |
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Additional Paid-in |
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Retained |
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Holdings, Inc. |
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Noncontrolling |
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Total |
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Shares |
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Amount |
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Capital |
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Earnings |
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Equity |
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Interest |
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Equity |
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Balance at June 30, 2023 |
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$ |
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$ |
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$ |
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$ |
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$ |
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$ |
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Share-based compensation activity |
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— |
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( |
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— |
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( |
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— |
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( |
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Repurchase and retirement of common stock |
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( |
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( |
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( |
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— |
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( |
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— |
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( |
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Capital contribution from noncontrolling interest |
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— |
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— |
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— |
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— |
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— |
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Net income |
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— |
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— |
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— |
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— |
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Balance at October 1, 2023 |
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$ |
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$ |
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$ |
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$ |
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$ |
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$ |
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Notes to Unaudited Condensed Consolidated Financial Statements form an integral part of the condensed consolidated financial statements.
6
MASTERCRAFT BOAT HOLDINGS, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
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Three Months Ended |
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September 29, |
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October 1, |
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(Dollar amounts in thousands) |
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2024 |
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2023 |
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CASH FLOWS FROM OPERATING ACTIVITIES: |
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Net income (loss) |
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$ |
( |
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$ |
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Loss from discontinued operations, net of tax |
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Income from continuing operations |
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Adjustments to reconcile income from continuing operations to net cash used in operating activities: |
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Depreciation and amortization |
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Share-based compensation |
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Unrecognized tax benefits |
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( |
) |
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Deferred income taxes |
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( |
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( |
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Changes in certain operating assets and liabilities |
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( |
) |
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( |
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Other, net |
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( |
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( |
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Net cash used in operating activities of continuing operations |
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( |
) |
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( |
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Net cash provided by (used in) operating activities of discontinued operations |
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( |
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Net cash provided by (used in) operating activities |
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( |
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CASH FLOWS FROM INVESTING ACTIVITIES: |
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Purchases of property, plant and equipment |
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( |
) |
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( |
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Purchases of investments |
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( |
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Maturities of investments |
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Net cash provided by investing activities of continuing operations |
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Net cash used in investing activities of discontinued operations |
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( |
) |
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( |
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Net provided by in investing activities |
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CASH FLOWS FROM FINANCING ACTIVITIES: |
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Principal payments on long-term debt |
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( |
) |
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( |
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Repurchase and retirement of common stock |
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( |
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( |
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Borrowings on revolving credit facility |
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Other, net |
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( |
) |
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( |
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Net cash used in financing activities of continuing operations |
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( |
) |
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( |
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Net cash provided by (used in) financing activities of discontinued operations |
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Net cash used in financing activities |
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( |
) |
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( |
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NET CHANGE IN CASH AND CASH EQUIVALENTS |
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CASH AND CASH EQUIVALENTS — BEGINNING OF PERIOD |
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CASH AND CASH EQUIVALENTS — END OF PERIOD |
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$ |
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$ |
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SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: |
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Cash payments for interest, net of amounts capitalized |
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$ |
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$ |
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Cash payments for income taxes |
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NON-CASH INVESTING AND FINANCING ACTIVITIES: |
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Activity related to sales-type lease |
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Capital expenditures in accounts payable and accrued expenses |
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Notes to Unaudited Condensed Consolidated Financial Statements form an integral part of the condensed consolidated financial statements.
7
MASTERCRAFT BOAT HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unless otherwise noted, dollars in thousands, except per share data)
Basis of Presentation — The Company’s fiscal year begins July 1 and ends June 30, with the interim quarterly reporting periods consisting of 13 weeks. Therefore, the fiscal quarter end will not always coincide with the date of the end of a calendar month.
The accompanying unaudited condensed consolidated financial statements include the accounts of MasterCraft Boat Holdings, Inc. (“Holdings”) and its wholly owned subsidiaries. Holdings and its subsidiaries collectively are referred to herein as the “Company.” The unaudited condensed consolidated financial statements have been prepared on the same basis as the Company’s audited consolidated financial statements for the year ended June 30, 2024, and, in the opinion of management, reflect all adjustments considered necessary to present fairly the Company’s financial position as of September 29, 2024, its results of operations for the three months ended September 29, 2024 and October 1, 2023, its cash flows for the three months ended September 29, 2024 and October 1, 2023, and its statements of equity for the three months ended September 29, 2024 and October 1, 2023. All adjustments are of a normal, recurring nature. Certain information and footnote disclosures normally included in annual consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and the applicable rules and regulations of the SEC for financial information have been condensed or omitted pursuant to such rules and regulations. The June 30, 2024 condensed consolidated balance sheet data was derived from the audited financial statements but does not include all disclosures required by U.S. GAAP for complete financial statements. However, management believes that the disclosures in these condensed consolidated financial statements are adequate to make the information presented not misleading. These condensed consolidated financial statements should be read in conjunction with the Company’s consolidated financial statements and notes thereto included in our 2024 Annual Report on Form 10-K.
Due to the seasonality of the Company’s business, the interim results are not necessarily indicative of the results that may be expected for the remainder of the fiscal year.
There were no significant changes in, or changes to, the application of the Company’s significant or critical accounting policies or estimation procedures for the three months ended September 29, 2024, as compared with those described in the Company’s audited consolidated financial statements for the fiscal year ended June 30, 2024.
Assets Held-For-Sale and Discontinued Operations — On August 8, 2024, the Company announced that it had entered into an asset purchase agreement (the “Aviara Asset Purchase Agreement”), pursuant to which the Company will transfer rights to the Aviara brand of luxury dayboats and certain related assets to a subsidiary of MarineMax, Inc. (the “Aviara Transaction”). The transaction was completed October 18, 2024. In conjunction with completing all outstanding production in the fiscal first quarter, the Company's sale of the business represents an exit from the luxury dayboat category, a strategic shift that has a significant effect on the Company's operations and financial results, and as such, qualifies for reporting as discontinued operations. The Aviara and former NauticStar businesses results for the periods presented are reflected in our condensed consolidated statements of operations and condensed consolidated statement of cash flows as discontinued operations. Additionally, the related assets and liabilities held-for-sale are classified as held-for-sale in our condensed consolidated balance sheets (see Note 3).
Further, on September 12, 2024, the Company announced that it had entered into an agreement to sell its Aviara manufacturing facility located in Merritt Island, Florida, to RMI Holdings, Inc. (the “Aviara Facility Sale Agreement”). The Company determined the assets met the criteria to be classified as held-for-sale with the execution of the Aviara Facility Sale Agreement in conjunction with completing all outstanding production in the fiscal first quarter. The related assets and liabilities held-for-sale are classified as held-for-sale in our condensed consolidated balance sheets (see Note 3).
Unless otherwise indicated, the financial disclosures and related information provided herein relate to our continuing operations, which exclude our former Aviara segment, and we have recast prior period amounts to reflect discontinued operations.
Reclassifications — Certain historical amounts have been reclassified in these condensed consolidated financial statements to conform to the current presentation.
8
New Accounting Pronouncements Issued But Not Yet Adopted
Segment Reporting — Accounting Standard Update (“ASU”) No. 2023-07, Improvements to Reportable Segment Disclosures, requires incremental disclosures about an entity’s reportable segments but does not change the definition of a segment or the guidance for determining reportable segments. The new guidance requires disclosure of significant segment expenses that are (1) regularly provided to (or easily computed from information regularly provided to) the chief operating decision maker (“CODM”) and (2) included in the reported measure of segment profit or loss. The new standard also allows companies to disclose multiple measures of segment profit or loss if those measures are used to assess performance and allocate resources. This update is effective for fiscal years beginning after December 31, 2023, or fiscal 2025 for the Company, and should be adopted retrospectively unless impracticable. The Company is currently evaluating the impact, if any, that the adoption of this standard will have on financial disclosures.
Income Taxes — ASU No. 2023-09, Improvements to Income Tax Disclosures, requires entities to disclose in their rate reconciliation table additional categories of information about federal, state and foreign income taxes and provide more details about the reconciling items in some categories if items meet a quantitative threshold. Entities would have to provide qualitative disclosures about the new categories. The guidance will require all entities to disclose income taxes paid, net of refunds, disaggregated by federal (national), state and foreign taxes for annual periods and to disaggregate the information by jurisdiction based on a quantitative threshold. The guidance makes several other changes to the disclosure requirements. Entities are required to apply the guidance prospectively, with the option to apply it retrospectively. The guidance is effective for annual periods beginning after December 15, 2024, or fiscal 2026 for the Company. The Company is currently evaluating the impact, if any, that the adoption of this standard will have on financial disclosures.
The following tables present the Company's revenue by major product category for each reportable segment:
|
|
Three Months Ended September 29, 2024 |
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|||||||||
|
|
MasterCraft |
|
|
Pontoon |
|
|
Total |
|
|||
Major Product Categories: |
|
|
|
|
|
|
|
|
|
|||
Boats and trailers |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Parts |
|
|
|
|
|
|
|
|
|
|||
Other revenue |
|
|
|
|
|
|
|
|
|
|||
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|||
|
|
Three Months Ended October 1, 2023 |
|
|||||||||
|
|
MasterCraft |
|
|
Pontoon |
|
|
Total |
|
|||
Major Product Categories: |
|
|
|
|
|
|
|
|
|
|||
Boats and trailers |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Parts |
|
|
|
|
|
|
|
|
|
|||
Other revenue |
|
|
|
|
|
|
|
|
|
|||
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Contract Liabilities
On August 8, 2024, the Company announced that it had entered into the Aviara Asset Purchase Agreement, pursuant to which it will transfer rights to the Aviara brand of luxury dayboats and certain related assets to a subsidiary of MarineMax, Inc. (“MarineMax”). The transaction was completed on October 18, 2024. As discussed in Note 1, the Company has reported results of operations for the Aviara
9
segment as discontinued operations in the condensed consolidated statement of operations and the related assets and liabilities held-for-sale are classified as held-for-sale in our condensed consolidated balance sheets.
Additionally, on September 12, 2024, we announced that we had entered into the Aviara Facility Sale Agreement. The transaction is expected to be completed in our fiscal 2025 second quarter and remains subject to customary closing conditions. As discussed in Note 1, the related assets and liabilities are classified as held-for-sale in our condensed consolidated balance sheets.
The Company evaluated the carrying value of net assets compared to the fair value less cost to sell and, as a result, recorded a $
In fiscal 2023, we sold our NauticStar business. Pursuant to the terms of the purchase agreement, substantially all of the assets were sold and the purchaser assumed substantially all of the liabilities of NauticStar. The value of the assets and liabilities that were retained at the time of sale, which were primarily related to certain claims, are subject to change. Certain of these claims, which were reported in Accrued expenses and other current liabilities, have been settled or are expected to settle for higher amounts than previously estimated, with the related activity being recorded as discontinued operations.
The following table summarizes the operating results of discontinued operations for the following periods:
|
Three Months Ended |
|
|||||
|
September 29, |
|
|
October 1, |
|
||
|
2023 |
|
|
2023 |
|
||
NET SALES |
$ |
|
|
$ |
|
||
COST OF SALES |
|
|
|
|
|
||
GROSS LOSS |
|
( |
) |
|
|
( |
) |
OPERATING EXPENSES: |
|
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|
||
Selling, general and administrative |
|
|
|
|
|
||
Total operating expenses |
|
|
|
|
|
||
OPERATING LOSS |
|
( |
) |
|
|
( |
) |
Gain (loss) on sale of discontinued operations |
|
( |
) |
|
|
|
|
LOSS BEFORE INCOME TAX BENEFIT |
|
( |
) |
|
|
( |
) |
INCOME TAX BENEFIT |
|
|
|
|
|
||
LOSS FROM DISCONTINUED OPERATIONS, NET OF TAX |
$ |
( |
) |
|
$ |
( |
) |
The following table summarizes the assets and liabilities associated with discontinued operations that are presented within held-for-sale in the condensed consolidated balance sheets:
|
September 29, |
|
|
June 30, |
|
||
|
2024 |
|
|
2024 |
|
||
CURRENT ASSETS HELD-FOR-SALE: |
|
|
|
|
|
||
Accounts receivable, net of allowance |
$ |
|
|
$ |
|
||
Inventories, net |
|
|
|
|
|
||
Total current assets held-for-sale |
$ |
|
|
$ |
|
||
|
|
|
|
|
|
||
NON-CURRENT ASSETS HELD-FOR-SALE: |
|
|
|
|
|
||
Property, plant and equipment, net |
$ |
|
|
$ |
|
||
Other long-term assets |
|
|
|
|
|
||
Total non-current assets held-for-sale |
$ |
|
|
$ |
|
||
|
|
|
|
|
|
||
CURRENT LIABILITIES HELD-FOR-SALE: |
|
|
|
|
|
||
Accounts payable |
$ |
|
|
$ |
|
||
Accrued expenses and other current liabilities |
|
|
|
|
|
||
Total current liabilities held-for-sale |
$ |
|
|
$ |
|
||
|
|
|
|
|
|
||
LONG-TERM LIABILITIES HELD-FOR-SALE: |
|
|
|
|
|
||
Long-term leases |
$ |
|
|
$ |
|
||
Total long-term liabilities held-for-sale |
$ |
|
|
$ |
|
||
10
The amortized cost and net carrying amount, gross unrealized gains and losses, and estimated fair value of our investments classified as held-to-maturity at September 29, 2024 and June 30, 2024 are summarized as follows:
|
|
September 29, 2024 |
|
|||||||||||||
|
|
Amortized |
|
|
|
|
|
|
|
|
|
|
||||
|
|
Cost / Net |
|
|
Gross |
|
|
Gross |
|
|
Estimated |
|
||||
|
|
Carrying |
|
|
Unrealized |
|
|
Unrealized |
|
|
Fair |
|
||||
|
|
Amount |
|
|
Gains |
|
|
Losses |
|
|
Value |
|
||||
Held-to-maturity securities: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Fixed income securities: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Corporate bonds |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|||
Total held-to-maturity securities |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|||
|
|
June 30, 2024 |
|
|||||||||||||
|
|
Amortized |
|
|
|
|
|
|
|
|
|
|
||||
|
|
Cost / Net |
|
|
Gross |
|
|
Gross |
|
|
Estimated |
|
||||
|
|
Carrying |
|
|
Unrealized |
|
|
Unrealized |
|
|
Fair |
|
||||
|
|
Amount |
|
|
Gains |
|
|
Losses |
|
|
Value |
|
||||
Held-to-maturity securities: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Fixed income securities: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Corporate bonds |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|||
Total held-to-maturity securities |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|||
Inventories consisted of the following:
|
|
September 29, |
|
|
June 30, |
|
||
|
|
2024 |
|
|
2024 |
|
||
Raw materials and supplies |
|
$ |
|
|
$ |
|
||
Work in process |
|
|
|
|
|
|
||
Finished goods |
|
|
|
|
|
|
||
Obsolescence reserve |
|
|
( |
) |
|
|
( |
) |
Total inventories |
|
$ |
|
|
$ |
|
||
Property, plant, and equipment, net consisted of the following:
|
|
September 29, |
|
|
June 30, |
|
|
||
|
|
2024 |
|
|
2024 |
|
|
||
Land and improvements |
|
$ |
|
|
$ |
|
|
||
Buildings and improvements |
|
|
|
|
|
|
|
||
Machinery and equipment |
|
|
|
|
|
|
|
||
Furniture and fixtures |
|
|
|
|
|
|
|
||
Construction in progress |
|
|
|
|
|
|
|
||
Total property, plant, and equipment |
|
|
|
|
|
|
|
||
Less accumulated depreciation |
|
|
( |
) |
|
|
( |
) |
|
Property, plant, and equipment — net |
|
|
|
|
$ |
|
|
||
11
The following table presents the carrying amounts of goodwill as of September 29, 2024 and June 30, 2024 for each of the Company's reportable segments.
|
|
Gross Amount |
|
|
Accumulated Impairment Losses |
|
|
Total |
|
|||
MasterCraft |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Pontoon |
|
|
|
|
|
( |
) |
|
|
|
||
Total |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||
The following table presents the carrying amounts of Other intangible assets, net:
|
|
September 29, |
|
|
June 30, |
|
||||||||||||||||||
|
|
2024 |
|
|
2024 |
|
||||||||||||||||||
|
|
Gross Amount |
|
|
Accumulated Amortization / Impairment |
|
|
Other intangible assets, net |
|
|
Gross Amount |
|
|
Accumulated Amortization / Impairment |
|
|
Other intangible assets, net |
|
||||||
Amortized intangible assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Dealer networks |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||
Software |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
||||
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
||||||
Unamortized intangible assets |
|
|
|
|
|
|
|
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|
|
|
|
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|
||||||
Trade names |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
||||
Total other intangible assets |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||
Amortization expense related to Other intangible assets, net for each of the three months ended September 29, 2024 and October 1, 2023, was $
Accrued expenses and other current liabilities consisted of the following:
|
|
September 29, |
|
|
June 30, |
|
||
|
|
2024 |
|
|
2024 |
|
||
Warranty |
|
$ |
|
|
$ |
|
||
Dealer incentives |
|
|
|
|
|
|
||
Compensation and related accruals |
|
|
|
|
|
|
||
Contract liabilities |
|
|
|
|
|
|
||
Self-insurance |
|
|
|
|
|
|
||
Inventory repurchase contingent obligation |
|
|
|
|
|
|
||
Liabilities retained associated with NauticStar discontinued operations |
|
|
|
|
|
|
||
Other |
|
|
|
|
|
|
||
Total accrued expenses and other current liabilities |
|
$ |
|
|
$ |
|
||
Accrued warranty liability activity was as follows for the three months ended:
|
|
September 29, |
|
|
October 1, |
|
||
|
|
2024 |
|
|
2023 |
|
||
Balance at the beginning of the period |
|
$ |
|
|
$ |
|
||
Provisions |
|
|
|
|
|
|
||
Payments made |
|
|
( |
) |
|
|
( |
) |
Changes for pre-existing warranties |
|
|
|
|
|
|
||
Balance at the end of the period |
|
$ |
|
|
$ |
|
||
12
Long-term debt is as follows:
|
|
September 29, |
|
|
June 30, |
|
||
|
|
2024 |
|
|
2024 |
|
||
|
|
|
|
|
|
|
||
Revolving credit facility |
|
$ |
|
|
$ |
|
||
Term loan |
|
|
|
|
|
|
||
Debt issuance costs on term loan |
|
|
|
|
|
( |
) |
|
Total debt |
|
|
|
|
|
|
||
Less current portion of long-term debt |
|
|
|
|
|
|
||
Less current portion of debt issuance costs on term loan |
|
|
|
|
|
( |
) |
|
Long-term debt, net of current portion |
|
$ |
|
|
$ |
|
||
In fiscal 2021, the Company entered into a credit agreement with a syndicate of certain financial institutions (the “Credit Agreement”) that provided the Company with a $
The Credit Agreement contains a number of covenants that, among other things, restrict the Company’s ability to, subject to specified exceptions, incur additional debt; incur additional liens and contingent liabilities; sell or dispose of assets; merge with or acquire other companies; liquidate or dissolve; engage in businesses that are not in a related line of business; make loans, advances or guarantees; pay dividends or make other distributions; engage in transactions with affiliates; and make investments. The Company is also required to maintain a minimum fixed charge coverage ratio and a maximum net leverage ratio.
As previously disclosed, the Credit Agreement was amended in August 2022 and October 2023, in each case to, among other things, provide consents and waivers to certain restrictions in the covenants of the Credit Agreement.
On September 27, 2024, the Company entered into the Fourth Amendment to obtain the necessary consents and waivers to the restrictions described above in the covenants of the Credit Agreement, as related to the Aviara Transaction and plans to sell certain facility assets, as discussed in Note 3. In addition, the Fourth Amendment provides a waiver to the fixed charge covenant ratio for certain periods. As a result of the fixed charge covenant ratio waiver, the applicable margin on interest and the commitment fee for any unused portion of the Revolving Credit Facility for these periods is fixed at the maximum allowable rate (“Fourth Amendment Interest Terms”). Further, the Company may make restricted payments, including share repurchases under the Company's share repurchase program (see Note 12), in an aggregate amount not to exceed $
The Credit Agreement, as amended, bears interest, at the Company’s option, at either the prime rate plus an applicable margin ranging from
13
The Credit Agreement will mature and all remaining amounts outstanding thereunder will be due and payable on June 28, 2026. As of September 29, 2024, the Company was in compliance with its financial covenants under the Credit Agreement.
Revolving Credit Facility
In conjunction with the Fourth Amendment, the Company drew $
The Company’s consolidated interim effective tax rate is based on a current estimate of the annual effective income tax rate adjusted to reflect the impact of discrete items. The differences between the Company’s effective tax rate and the statutory federal tax rate of
The following table presents the components of share-based compensation expense by award type.
|
|
Three Months Ended |
|
|||||
|
|
September 29, |
|
|
October 1, |
|
||
|
|
2024 |
|
|
2023 |
|
||
Restricted stock awards |
|
$ |
|
|
$ |
|
||
Performance stock units |
|
|
|
|
|
|
||
Share-based compensation expense |
|
$ |
|
|
$ |
|
||
Restricted Stock Awards
During the three months ended September 29, 2024, the Company granted
The following table summarizes the status of nonvested RSAs as of September 29, 2024, and changes during the three months then ended.
|
|
|
|
|
Average |
|
||
|
|
Nonvested |
|
|
Grant-Date |
|
||
|
|
Restricted |
|
|
Fair Value |
|
||
|
|
Shares |
|
|
(per share) |
|
||
Nonvested at June 30, 2024 |
|
|
|
|
$ |
|
||
Granted |
|
|
|
|
|
|
||
Forfeited |
|
|
( |
) |
|
|
|
|
Nonvested at September 29, 2024 |
|
|
|
|
|
|
||
As of September 29, 2024, there was $
14
Performance Stock Units
Performance stock units (“PSUs”) are a form of long-term incentive compensation awarded to executive officers and certain other key employees designed to directly align the interests of employees to the interests of the Company’s shareholders, and to create long-term shareholder value. The awards will be earned based on the Company’s achievement of certain performance criteria over a
PSUs awarded in fiscal 2025 have performance criteria set annually over the three-year performance period. This performance criteria is cumulative and is based upon the respective year’s performance compared to budget, which has not yet been established for future performance periods. Therefore, the compensation expense for these awards will not begin until all the key terms and conditions of these awards are known, which will be year three of the performance period.
The following table summarizes the status of nonvested PSUs as of September 29, 2024, and changes during the three months then ended.
|
|
|
|
|
Average |
|
||
|
|
Nonvested |
|
|
Grant-Date |
|
||
|
|
Performance |
|
|
Fair Value |
|
||
|
|
Stock Units |
|
|
(per share) |
|
||
Nonvested at June 30, 2024 |
|
|
|
|
$ |
|
||
Forfeited |
|
|
( |
) |
|
|
|
|
Nonvested at September 29, 2024 |
|
|
|
|
|
|
||
As of September 29, 2024, there was no unrecognized compensation expense related to nonvested PSUs.
Incentive Award Plan
On October 22, 2024, at the Company's annual meeting of shareholders, the Company's shareholders approved the Second Amended and Restated MasterCraft 2015 Incentive Award Plan (the “Restated Incentive Plan”), as described in the Company's Definitive Proxy Statement, filed with the SEC on September 23, 2024, to replace the Amended and Restated MCBC Holdings, Inc. 2015 Incentive Award Plan effective as of the date of shareholder approval. The Restated Incentive Plan authorizes an aggregate issuance of up to
15
The following table sets forth the computation of the Company’s net income (loss) per share:
|
|
Three Months Ended |
|
|||||
|
|
September 29, |
|
|
October 1, |
|
||
|
|
2024 |
|
|
2023 |
|
||
Income from continuing operations |
|
$ |
|
|
$ |
|
||
Loss from discontinued operations, net of tax |
|
|
( |
) |
|
|
( |
) |
Net income (loss) |
|
$ |
( |
) |
|
$ |
|
|
|
|
|
|
|
|
|
||
Weighted average shares — basic |
|
|
|
|
|
|
||
Dilutive effect of assumed restricted share awards/units |
|
|
|
|
|
|
||
Weighted average outstanding shares — diluted |
|
|
|
|
|
|
||
Basic income (loss) per share |
|
|
|
|
|
|
||
Continuing operations |
|
$ |
|
|
$ |
|
||
Discontinued operations |
|
|
( |
) |
|
|
( |
) |
Net income (loss) |
|
$ |
( |
) |
|
$ |
|
|
Diluted income (loss) per share |
|
|
|
|
|
|
||
Continuing operations |
|
$ |
|
|
$ |
|
||
Discontinued operations |
|
|
( |
) |
|
|
( |
) |
Net income (loss) |
|
$ |
( |
) |
|
$ |
|
|
For the three months ended October 1, 2023, an immaterial number of shares were excluded from the computation of diluted earnings per share as the effect would have been anti-dilutive.
Share Repurchase Program
On July 24, 2023, the Board of the Company authorized a share repurchase program under which the Company may repurchase up to $
During the three months ended September 29, 2024 and October 1, 2023, the Company repurchased
13.
Reportable Segments
During the fourth quarter of fiscal 2024, the Company changed the name of its “Crest” operating segment to “Pontoon.” The segment change had no impact on the composition of the Company's segments or on previously reported financial position, results of operations, cash flows, or segment operating results.
Operating segments are identified as components of an enterprise about which discrete financial information is available for evaluation by the CODM in making decisions on how to allocate resources and assess performance. For the three months ended September 29, 2024, the Company’s CODM regularly assessed the operating performance of the Company’s boat brands under
16
Each segment distributes its products through its own independent dealer network. Each segment also has its own management structure which is responsible for the operations of the segment and is directly accountable to the CODM for the operating performance of the segment, which is regularly assessed by the CODM who allocates resources based on that performance.
The Company files a consolidated income tax return and does not allocate income taxes and other corporate-level expenses, including interest, to operating segments. All material corporate costs are included in the MasterCraft segment.
Selected financial information for the Company’s reportable segments was as follows:
|
|
For the Three Months Ended September 29, 2024 |
|
|||||||||
|
|
MasterCraft |
|
|
Pontoon |
|
|
Consolidated |
|
|||
Net sales |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Operating income (loss) |
|
|
|
|
|
( |
) |
|
|
|
||
Depreciation and amortization |
|
|
|
|
|
|
|
|
|
|||
Purchases of property, plant and equipment |
|
|
|
|
|
|
|
|
|
|||
|
|
For the Three Months Ended October 1, 2023 |
|
|||||||||
|
|
MasterCraft |
|
|
Pontoon |
|
|
Consolidated |
|
|||
Net sales |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Operating income |
|
|
|
|
|
|
|
|
|
|||
Depreciation and amortization |
|
|
|
|
|
|
|
|
|
|||
Purchases of property, plant and equipment |
|
|
|
|
|
|
|
|
|
|||
The following table presents total assets for the Company’s reportable segments.
|
|
September 29, 2024 |
|
|
June 30, 2024 |
|
||
Assets: |
|
|
|
|
|
|
||
MasterCraft |
|
$ |
|
|
$ |
|
||
Pontoon |
|
|
|
|
|
|
||
Assets held-for-sale |
|
|
|
|
|
|
||
Total assets |
|
$ |
|
|
$ |
|
||
14. SUBSEQUENT EVENT
On October 18, 2024, the Company completed the Aviara Transaction. As part of the Aviara Asset Purchase Agreement, MarineMax paid for select branding and operational assets, including Aviara's website, tooling, and inventory. MarineMax also assumed Aviara's customer care, warranty liability and administration. The amounts paid to the Company by MarineMax for ownership of the Aviara brand were offset by MarineMax's assumption of warranties liability and administration accruals.
17
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
The following discussion and analysis should be read together with the unaudited condensed consolidated financial statements and notes thereto included elsewhere in this Quarterly Report on Form 10-Q. In addition, the statements in this discussion and analysis regarding our expectations concerning the performance of our business, anticipated financial results, liquidity and the other non-historical statements are forward-looking statements. These forward-looking statements are subject to numerous risks and uncertainties, including, but not limited to, the risks and uncertainties described in “Cautionary Note Regarding Forward-Looking Statements” above and in “Risk Factors” set forth in our 2024 Annual Report. Our actual results may differ materially from those contained in or implied by any forward-looking statements.
Certain statements in the following discussions are based on non-GAAP financial measures. A “non-GAAP financial measure” is a numerical measure of a registrant’s historical or future financial performance, financial position or cash flows that excludes amounts, or is subject to adjustments that have the effect of excluding amounts, that are included in the most directly comparable measure calculated and presented in accordance with U.S. GAAP in the statements of operations, balance sheets or statements of cash flows of the issuer; or includes amounts, or is subject to adjustments that have the effect of including amounts, that are excluded from the most directly comparable measure so calculated and presented. Non-GAAP financial measures do not include operating and statistical measures. The Company includes non-GAAP financial measures in Management’s Discussion and Analysis, as the Company’s management believes that these measures and the information they provide are useful to users of the financial statements, including investors, because they permit users of the financial statements to view the Company’s performance using the same tools that management utilizes and to better evaluate the Company’s ongoing business performance. In order to better align the Company’s reported results with the internal metrics used by the Company's management to evaluate business performance as well as to provide better comparisons to prior periods and peer data, non-GAAP measures exclude the impact of purchase accounting amortization related to business acquisitions.
Discontinued Operations
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 Note 3 in Notes to unaudited condensed consolidated financial statements for more information on discontinued operations.
On August 8, 2024, the Company announced that it had entered into the Aviara Asset Purchase Agreement, pursuant to which it will transfer rights to the Aviara brand of luxury dayboats and certain related assets to a subsidiary of MarineMax. Subsequent to our fiscal first quarter, the transaction was completed and remains subject to customary closing conditions. As discussed in Note 1, the Company has reported the results of operations for its Aviara segment as discontinued operations in the unaudited condensed consolidated statement of operations.
Additionally, on September 12, 2024, we announced that we had entered into the Aviara Facility Sale Agreement. The transaction is expected to be completed in our fiscal second quarter and remains subject to customary closing conditions. As discussed in Note 1, the related assets and liabilities are classified as held-for-sale in our unaudited condensed consolidated balance sheets.
Overview
Amid market volatility and challenging macroeconomic conditions, retail demand remained soft throughout the key selling season. In response, the Company implemented a wholesale strategy for the start of the fiscal 2025 that prioritized rebalancing of dealer inventory levels. This approach, while necessary, led to decreased net sales and reduced gross margins due to fixed cost absorption on the lower production levels.
18
Results of Continuing Operations
Consolidated Results
The table below presents our consolidated results of operations for the three months ended:
|
|
Three Months Ended |
|
|
2025 vs. 2024 |
|
||||||||||
|
|
September 29, |
|
|
October 1, |
|
|
|
|
|
% |
|
||||
|
|
2024 |
|
|
2023 |
|
|
Change |
|
|
Change |
|
||||
(Dollar amounts in thousands) |
|
|
|
|
|
|
|
|
|
|||||||
Consolidated statements of operations: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
NET SALES |
|
$ |
65,359 |
|
|
$ |
94,305 |
|
|
$ |
(28,946 |
) |
|
|
(30.7 |
%) |
COST OF SALES |
|
|
53,561 |
|
|
|
71,830 |
|
|
|
(18,269 |
) |
|
|
(25.4 |
%) |
GROSS PROFIT |
|
|
11,798 |
|
|
|
22,475 |
|
|
|
(10,677 |
) |
|
|
(47.5 |
%) |
OPERATING EXPENSES: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Selling and marketing |
|
|
2,874 |
|
|
|
3,084 |
|
|
|
(210 |
) |
|
|
(6.8 |
%) |
General and administrative |
|
|
7,470 |
|
|
|
8,376 |
|
|
|
(906 |
) |
|
|
(10.8 |
%) |
Amortization of other intangible assets |
|
|
450 |
|
|
|
462 |
|
|
|
(12 |
) |
|
|
(2.6 |
%) |
Total operating expenses |
|
|
10,794 |
|
|
|
11,922 |
|
|
|
(1,128 |
) |
|
|
(9.5 |
%) |
OPERATING INCOME |
|
|
1,004 |
|
|
|
10,553 |
|
|
|
(9,549 |
) |
|
|
(90.5 |
%) |
OTHER INCOME (EXPENSE): |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest expense |
|
|
(987 |
) |
|
|
(878 |
) |
|
|
(109 |
) |
|
|
12.4 |
% |
Interest income |
|
|
1,192 |
|
|
|
1,352 |
|
|
|
(160 |
) |
|
|
(11.8 |
%) |
INCOME BEFORE INCOME TAX EXPENSE |
|
|
1,209 |
|
|
|
11,027 |
|
|
|
(9,818 |
) |
|
|
(89.0 |
%) |
INCOME TAX EXPENSE |
|
|
193 |
|
|
|
2,496 |
|
|
|
(2,303 |
) |
|
|
(92.3 |
%) |
INCOME FROM CONTINUING OPERATIONS |
|
$ |
1,016 |
|
|
$ |
8,531 |
|
|
$ |
(7,515 |
) |
|
|
(88.1 |
%) |
Additional financial and other data: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Unit sales volume: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
MasterCraft |
|
|
374 |
|
|
|
494 |
|
|
|
(120 |
) |
|
|
(24.3 |
%) |
Pontoon |
|
|
177 |
|
|
|
362 |
|
|
|
(185 |
) |
|
|
(51.1 |
%) |
Consolidated unit sales volume |
|
|
551 |
|
|
|
856 |
|
|
|
(305 |
) |
|
|
(35.6 |
%) |
Net sales: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
MasterCraft |
|
$ |
55,533 |
|
|
$ |
75,836 |
|
|
$ |
(20,303 |
) |
|
|
(26.8 |
%) |
Pontoon |
|
|
9,826 |
|
|
|
18,469 |
|
|
|
(8,643 |
) |
|
|
(46.8 |
%) |
Consolidated net sales |
|
$ |
65,359 |
|
|
$ |
94,305 |
|
|
$ |
(28,946 |
) |
|
|
(30.7 |
%) |
Net sales per unit: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
MasterCraft |
|
$ |
148 |
|
|
$ |
154 |
|
|
$ |
(6 |
) |
|
|
(3.9 |
%) |
Pontoon |
|
|
56 |
|
|
|
51 |
|
|
|
5 |
|
|
|
9.8 |
% |
Consolidated net sales per unit |
|
|
119 |
|
|
|
110 |
|
|
|
9 |
|
|
|
8.2 |
% |
Gross margin |
|
|
18.1 |
% |
|
|
23.8 |
% |
|
(570) bps |
|
|
|
|
||
Net sales decreased $28.9 million during the first quarter of fiscal 2025 when compared with the same prior-year period. The decrease in net sales was primarily driven by lower unit volumes and unfavorable model mix.
Gross margin percentage declined 570 basis points during the first quarter of fiscal 2025 when compared with the same prior-year period. Lower margins were the result of lower cost absorption due to decreased production volume and higher dealer incentives as a percentage of net sales. Dealer incentives include measures taken by the Company to assist dealers as the retail environment remains competitive.
Operating expenses decreased $1.1 million during the first quarter of fiscal 2025 when compared to the same prior-year period. The decrease in operating expenses was a result of lower share-based compensation costs and lower professional fees.
19
Segment Results
MasterCraft Segment
The following table sets forth MasterCraft segment results for the three months ended:
|
|
Three Months Ended |
|
|
2025 vs. 2024 |
|
||||||||||
|
|
September 29, |
|
|
October 1, |
|
|
|
|
|
% |
|
||||
(Dollar amounts in thousands) |
|
2024 |
|
|
2023 |
|
|
Change |
|
|
Change |
|
||||
Net sales |
|
$ |
55,533 |
|
|
$ |
75,836 |
|
|
$ |
(20,303 |
) |
|
|
(26.8 |
%) |
Operating income |
|
|
3,693 |
|
|
|
10,290 |
|
|
|
(6,597 |
) |
|
|
(64.1 |
%) |
Purchases of property, plant and equipment |
|
|
1,453 |
|
|
|
2,209 |
|
|
|
(756 |
) |
|
|
(34.2 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Unit sales volume |
|
|
374 |
|
|
|
494 |
|
|
|
(120 |
) |
|
|
(24.3 |
%) |
Net sales per unit |
|
$ |
148 |
|
|
$ |
154 |
|
|
$ |
(6 |
) |
|
|
(3.9 |
%) |
Net sales decreased $20.3 million during the first quarter of fiscal 2025 when compared with the same prior-year period. The decrease was driven by lower unit volume and unfavorable model mix.
Operating income decreased $6.6 million during first quarter of fiscal 2025 when compared with the same prior-year period. The change was primarily the result of decreased net sales, as discussed above.
Pontoon Segment
The following table sets forth Pontoon segment results for the three months ended:
|
|
Three Months Ended |
|
|
2025 vs. 2024 |
|
||||||||||
|
|
September 29, |
|
|
October 1, |
|
|
|
|
|
% |
|
||||
(Dollar amounts in thousands) |
|
2024 |
|
|
2023 |
|
|
Change |
|
|
Change |
|
||||
Net sales |
|
$ |
9,826 |
|
|
$ |
18,469 |
|
|
$ |
(8,643 |
) |
|
|
(46.8 |
%) |
Operating income (loss) |
|
|
(2,689 |
) |
|
|
263 |
|
|
|
(2,952 |
) |
|
|
(1122.4 |
%) |
Purchases of property, plant and equipment |
|
|
752 |
|
|
|
859 |
|
|
|
(107 |
) |
|
|
(12.5 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Unit sales volume |
|
|
177 |
|
|
|
362 |
|
|
|
(185 |
) |
|
|
(51.1 |
%) |
Net sales per unit |
|
$ |
56 |
|
|
$ |
51 |
|
|
$ |
5 |
|
|
|
9.8 |
% |
Net sales decreased $8.6 million during the first quarter of fiscal 2025 when compared to the same prior-year period, mainly due to lower unit volumes and increased dealer incentives.
Operating loss for the first quarter of fiscal 2025 was $2.7 million compared to operating income of $0.3 million in the same prior-year period. The change was primarily the result of decreased net sales, as discussed above.
Non-GAAP Measures
EBITDA, Adjusted EBITDA, EBITDA margin, and Adjusted EBITDA margin
We define EBITDA as income from continuing operations, before interest, income taxes, depreciation and amortization. We define Adjusted EBITDA as EBITDA further adjusted to eliminate certain non-cash charges or other items that we do not consider to be indicative of our core and/or ongoing operations. For the periods presented herein, the adjustments are for share-based compensation, and CEO transition and organizational realignment costs. We define EBITDA margin and Adjusted EBITDA margin as EBITDA and Adjusted EBITDA, respectively, each expressed as a percentage of Net sales.
20
Adjusted Net Income and Adjusted Net Income per share
We define Adjusted Net Income and Adjusted Net Income per share as income from continuing operations, adjusted to eliminate certain non-cash charges or other items that we do not consider to be indicative of our core and/or ongoing operations and reflecting income tax expense on adjusted net income before income taxes at our estimated annual effective tax rate. For the periods presented herein, these adjustments include other intangible asset amortization, share-based compensation, and CEO transition and organizational realignment costs.
EBITDA, Adjusted EBITDA, EBITDA margin, Adjusted EBITDA margin, Adjusted Net Income, and Adjusted Net Income per share, which we refer to collectively as the Non-GAAP Measures, are not measures of net income or operating income as determined under accounting principles generally accepted in the United States, or U.S. GAAP. The Non-GAAP Measures are not measures of performance in accordance with U.S. GAAP and should not be considered as an alternative to net income, net income per share, or operating cash flows determined in accordance with U.S. GAAP. Additionally, Adjusted EBITDA is not intended to be a measure of cash flow. We believe that the inclusion of the Non-GAAP Measures is appropriate to provide additional information to investors because securities analysts and investors use the Non-GAAP Measures to assess our operating performance across periods on a consistent basis and to evaluate the relative risk of an investment in our securities. We use Adjusted Net Income and Adjusted Net Income per share to facilitate a comparison of our operating performance on a consistent basis from period to period that, when viewed in combination with our results prepared in accordance with U.S. GAAP, provides a more complete understanding of factors and trends affecting our business than does U.S. GAAP measures alone. We believe Adjusted Net Income and Adjusted Net Income per share assists our Board, management, investors, and other users of the financial statements in comparing our net income on a consistent basis from period to period because it removes certain non-cash items and other items that we do not consider to be indicative of our core and/or ongoing operations and reflecting income tax expense on adjusted net income before income taxes at our estimated annual effective tax rate. The Non-GAAP Measures have limitations as an analytical tool and should not be considered in isolation or as a substitute for analysis of our results as reported under U.S. GAAP. Some of these limitations are:
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.
21
The following table presents a reconciliation of income from continuing operations as determined in accordance with U.S. GAAP to EBITDA, and Adjusted EBITDA, and income from continuing operations margin (expressed as a percentage of net sales) to EBITDA margin and Adjusted EBITDA margin (each expressed as a percentage of net sales) for the periods indicated:
|
|
Three Months Ended |
||||||||||
|
|
September 29, |
|
|
% of Net |
|
October 1, |
|
|
% of Net |
||
(Dollar amounts in thousands) |
|
2024 |
|
|
sales |
|
2023 |
|
|
sales |
||
Income from continuing operations |
|
$ |
1,016 |
|
|
1.6% |
|
$ |
8,531 |
|
|
9.0% |
Income tax expense |
|
|
193 |
|
|
|
|
|
2,496 |
|
|
|
Interest expense |
|
|
987 |
|
|
|
|
|
878 |
|
|
|
Interest income |
|
|
(1,192 |
) |
|
|
|
|
(1,352 |
) |
|
|
Depreciation and amortization |
|
|
2,074 |
|
|
|
|
|
2,109 |
|
|
|
EBITDA |
|
|
3,078 |
|
|
4.7% |
|
|
12,662 |
|
|
13.4% |
Share-based compensation |
|
|
430 |
|
|
|
|
|
910 |
|
|
|
CEO transition and organizational realignment costs(a) |
|
|
334 |
|
|
|
|
|
436 |
|
|
|
Adjusted EBITDA |
|
$ |
3,842 |
|
|
5.9% |
|
$ |
14,008 |
|
|
14.9% |
The following table presents a reconciliation of income from continuing operations as determined in accordance with U.S. GAAP to Adjusted Net Income for the periods indicated:
|
|
Three Months Ended |
|
|||||
|
|
September 29, |
|
|
October 1, |
|
||
(Dollar amounts in thousands, except per share data) |
|
2024 |
|
|
2023 |
|
||
Income from continuing operations |
|
$ |
1,016 |
|
|
$ |
8,531 |
|
Income tax expense |
|
|
193 |
|
|
|
2,496 |
|
Amortization of acquisition intangibles |
|
|
450 |
|
|
|
462 |
|
Share-based compensation |
|
|
430 |
|
|
|
910 |
|
CEO transition and organizational realignment costs(a) |
|
|
334 |
|
|
|
436 |
|
Adjusted Net Income before income taxes |
|
|
2,423 |
|
|
|
12,835 |
|
Adjusted income tax expense(b) |
|
|
485 |
|
|
|
2,567 |
|
Adjusted Net Income |
|
$ |
1,938 |
|
|
$ |
10,268 |
|
|
|
|
|
|
|
|
||
Adjusted Net Income per share: |
|
|
|
|
|
|
||
Basic |
|
$ |
0.12 |
|
|
$ |
0.60 |
|
Diluted |
|
$ |
0.12 |
|
|
$ |
0.60 |
|
Weighted average shares used for the computation of(c): |
|
|
|
|
|
|
||
Basic Adjusted Net Income per share |
|
|
16,544,941 |
|
|
|
17,156,283 |
|
Diluted Adjusted Net Income per share |
|
|
16,544,941 |
|
|
|
17,224,608 |
|
The following table presents the reconciliation of income from continuing operations per diluted share to Adjusted Net Income per diluted share for the periods indicated:
|
|
Three Months Ended |
|
|||||
|
|
September 29, |
|
|
October 1, |
|
||
|
|
2024 |
|
|
2023 |
|
||
Income from continuing operations per diluted share |
|
$ |
0.06 |
|
|
$ |
0.50 |
|
Impact of adjustments: |
|
|
|
|
|
|
||
Income tax expense |
|
|
0.01 |
|
|
|
0.14 |
|
Amortization of acquisition intangibles |
|
|
0.03 |
|
|
|
0.03 |
|
Share-based compensation |
|
|
0.03 |
|
|
|
0.05 |
|
CEO transition and organizational realignment costs(a) |
|
|
0.02 |
|
|
|
0.03 |
|
Adjusted Net Income per diluted share before income taxes |
|
$ |
0.15 |
|
|
|
0.75 |
|
Impact of adjusted income tax expense on net income per diluted share before income taxes(b) |
|
|
(0.03 |
) |
|
|
(0.15 |
) |
Adjusted Net Income per diluted share |
|
$ |
0.12 |
|
|
$ |
0.60 |
|
22
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. We believe our cash balance, held-to-maturity securities, cash from operations, and our ability to borrow will be sufficient to provide for our liquidity and capital resource needs.
Cash and cash equivalents totaled $14.2 million as of September 29, 2024, an increase of $6.8 million from $7.4 million as of June 30, 2024. Held-to-maturity securities totaled $68.6 million as of September 29, 2024, a decrease of $10.3 million from $78.9 million as of June 30, 2024. Total debt as of September 29, 2024 and June 30, 2024, was $49.5 million and $49.3 million, respectively.
As of September 29, 2024, we had $49.5 million outstanding under the Revolving Credit Facility, leaving $50.5 million of available borrowing capacity. Refer to Note 9 — Long Term Debt in the Notes to unaudited condensed consolidated financial statements for further details.
On July 24, 2023, the Board of the Company authorized a share repurchase program under which the Company may repurchase up to $50 million of its outstanding shares of common stock. The authorization became effective upon the completion of the Company's previously existing $50 million stock repurchase authorization.
During the three months ended September 29, 2024, the Company repurchased 183,629 shares of common stock for $3.5 million in cash, excluding related fees and expenses under both plans.
The following table and discussion below relate to our cash flows from continuing operations from operating, investing, and financing activities:
|
|
Three Months Ended |
|
|||||
|
|
September 29, |
|
|
October 1, |
|
||
(Dollar amounts in thousands) |
|
2024 |
|
|
2023 |
|
||
Total cash provided by (used in): |
|
|
|
|
|
|
||
Operating activities |
|
$ |
(502 |
) |
|
$ |
(4,769 |
) |
Investing activities |
|
|
8,391 |
|
|
|
22,518 |
|
Financing activities |
|
|
(3,951 |
) |
|
|
(8,424 |
) |
Net change in cash and cash equivalents from continuing operations |
|
$ |
3,938 |
|
|
$ |
9,325 |
|
Three Months Ended September 29, 2024 Cash Flows from Continuing Operations
Net cash used in operating activities for the three months ended September 29, 2024 was $0.5 million, primarily due to working capital usage, partially offset by net income. Working capital is defined as accounts receivable, income tax receivable, inventories, and prepaid expenses and other current assets net of accounts payable, income tax payable, and accrued expenses and other current liabilities as presented in the condensed consolidated balance sheets. Working capital usage primarily consisted of a decrease in accrued expenses and other current liabilities and an increase in accounts receivable. Partially offsetting the working capital usage was an increase in accounts payables and a decrease in prepaid expenses and other current assets. Accrued expenses and other current liabilities decreased due to payment of dealer incentives and variable compensation. Accounts receivable increased due to timing of sales and collections at the end of the period compared to the end of the prior-year period. Accounts payables increased due to increased production compared to the prior-year period. Prepaid and other current assets decreased due to amortization of insurance premiums.
23
Net cash provided by investing activities was $8.4 million, which included $10.6 million of proceeds in held-to-maturity securities, partially offset by $2.2 million in capital expenditures. Our capital spending was primarily focused on information technology, machinery and equipment, and tooling.
Net cash used in financing activities was $4.0 million, which included share repurchases totaling $3.5 million and $49.5 million used to repay outstanding borrowings of the Term Loan which was offset by $49.5 million of borrowings under the Revolving Credit Facility.
Three Months Ended October 1, 2023 Cash Flows from Continuing Operations
Net cash used in operating activities for the three months ended October 1, 2023 was $4.8 million, primarily due to unfavorable changes in working capital, partially offset by net income. Working capital usage primarily consisted of decreases in accrued expenses and other current liabilities, income tax payable, and accounts payable, and an increase in prepaid expenses and other current assets. Partially offsetting the working capital usage was a decrease in inventories. Accrued expenses and other current liabilities decreased due to payment of dealer incentives and variable compensation. Income tax payable decreased due to tax payments within the quarter. Accounts payable decreased due to lower production at the end of the period compared to the end of the prior year period. Prepaid expenses and other current assets increased due to an increase in prepaid expenses, partially offset by amortization of insurance premiums. Inventories decreased as we adjust inventory levels to align with lower production levels.
Net cash provided by investing activities was $22.5 million, due to net changes in held-to-maturity securities of $25.6 million, partially offset by $3.1 million of capital expenditures. Our capital spending was mainly focused on tooling, facility enhancements, and information technology.
Net cash used in financing activities was $8.4 million, which included net payments of $1.1 million on long-term debt and $5.8 million of stock repurchases.
24
Off Balance Sheet Arrangements
The Company did not have any off balance sheet financing arrangements as of September 29, 2024.
Critical Accounting Estimates
As of September 29, 2024, there were no significant changes in or changes to the application of our critical accounting policies or estimation procedures from those presented in our 2024 Annual Report.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Refer to our 2024 Annual Report for discussion of the Company’s market risk. There have been no material changes in market risk from those disclosed therein.
ITEM 4. CONTROLS AND PROCEDURES.
Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) (of the Exchange Act) that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosures. Any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.
As of the end of the period covered by this Quarterly Report on Form 10-Q, we carried out an evaluation under the supervision and with the participation of our management, including our chief executive officer and chief financial officer, of the effectiveness of our disclosure controls and procedures. Based upon this evaluation, our chief executive officer and chief financial officer have concluded that our disclosure controls and procedures were effective at a reasonable assurance level as of September 29, 2024.
Changes in Internal Control Over Financial Reporting
There have been no changes in our internal control over financial reporting during the quarter ended September 29, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
25
PART II – OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
None.
ITEM 1A. RISK FACTORS.
During the three months ended September 29, 2024, there have been no material changes to the risk factors disclosed in “Part I, Item 1A. Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended June 30, 2024.
ITEM 2. UNREGISTERED SALES OF SECURITIES AND USE OF PROCEEDS.
Share Repurchase Program
On July 24, 2023, the Board of the Company authorized a share repurchase program under which the Company may repurchase up to $50.0 million of its outstanding shares of common stock. The authorization became effective upon the completion of the Company's previously existing $50.0 million stock repurchase authorization.
During the first three months of fiscal 2025, we repurchased approximately $3.5 million of our common stock, excluding related fees and expenses. As of September 29, 2024, the remaining authorization under the new program was approximately $31.9 million.
During the three months ended September 29, 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) |
|
||||
July 1, 2024 - July 28, 2024 |
|
|
85,161 |
|
|
$ |
18.55 |
|
|
|
85,161 |
|
|
$ |
33,814 |
|
July 29, 2024 - August 25, 2024 |
|
|
68,328 |
|
|
|
19.93 |
|
|
|
68,328 |
|
|
|
32,452 |
|
August 25, 2024 - September 29, 2024 |
|
|
30,140 |
|
|
|
18.19 |
|
|
|
30,140 |
|
|
|
31,903 |
|
Total |
|
|
183,629 |
|
|
|
|
|
|
183,629 |
|
|
|
|
||
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
None.
ITEM 4. MINE SAFETY DISCLOSURES.
None.
ITEM 5. OTHER INFORMATION.
During the three months ended September 29, 2024, none of our directors or “officers” (as defined in Rule 16a-1(f) under the Exchange Act)
26
ITEM 6. EXHIBITS, FINANCIAL STATEMENT SCHEDULES.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incorporated by Reference |
|
||||||||
Exhibit |
|
Description |
|
Form |
|
File No. |
|
Exhibit |
|
Filing Date |
|
Filed |
|
3.1 |
|
Amended and Restated Certificate of Incorporation of MCBC Holdings, Inc. |
|
10-K |
|
001-37502 |
|
3.1 |
|
9/18/15 |
|
|
|
3.2 |
|
|
10-Q |
|
001-37502 |
|
3.2 |
|
11/9/18 |
|
|
|
|
3.3 |
|
|
8-K |
|
001-37502 |
|
3.1 |
|
10/25/19 |
|
|
|
|
3.4 |
|
Fourth Amended and Restated By-laws of MasterCraft Boat Holdings, Inc. |
|
8-K |
|
001-37502 |
|
3.2 |
|
10/25/19 |
|
|
|
10.1 |
|
Purchase Agreement, dated September 11, 2024, between the Company and RMI Holdings, Inc. |
|
|
|
|
|
|
|
|
|
* |
|
10.2 |
|
|
8-K |
|
001-37502 |
|
10.1 |
|
10/3/24 |
|
|
|
|
31.1 |
|
Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer |
|
|
|
|
|
|
|
|
|
* |
|
31.2 |
|
Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer |
|
|
|
|
|
|
|
|
|
* |
|
32.1 |
|
|
|
|
|
|
|
|
|
|
** |
|
|
32.2 |
|
|
|
|
|
|
|
|
|
|
** |
|
|
101.INS |
|
Inline XBRL Instance Document |
|
|
|
|
|
|
|
|
|
* |
|
101.SCH |
|
Inline XBRL Taxonomy Extension Schema With Embedded Linkbases Document |
|
|
|
|
|
|
|
|
|
* |
|
104 |
|
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). |
|
|
|
|
|
|
|
|
|
* |
|
* Filed herewith.
** Furnished herewith.
27
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
|
|
MASTERCRAFT BOAT HOLDINGS, INC. |
|
|
|
(Registrant) |
|
|
|
|
|
Date: |
November 6, 2024 |
By: |
/s/ BRADLEY M. NELSON |
|
|
|
Bradley M. Nelson |
|
|
|
Chief Executive Officer (Principal Executive Officer) and Director |
|
|
|
|
Date: |
November 6, 2024 |
By: |
/s/ TIMOTHY M. OXLEY |
|
|
|
Timothy M. Oxley |
|
|
|
Chief Financial Officer (Principal Financial and Accounting Officer), |
|
|
|
Treasurer and Secretary |
|
|
|
|
28