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Item 8. Financial Statements and Supplementary Data

2024-08-29 compared with 2023-08-29 · 245 added, 263 removed, 999 unchanged (34% of the section changed)

3 unchanged sentences

Reports of Independent Registered Public Accounting Firm

Consolidated Statements of Operations and Comprehensive Income for the Fiscal Years Ended June 30, 2023, 2022, and 2021

Consolidated Statements of Operations and Comprehensive ( Loss) Income for the Fiscal Years Ended June 30, 2024, 2023, and 2022

Consolidated Balance Sheets as of June 30, 202 4 and 20 23

10 unchanged sentences

Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

The Company's management, including its chief executive officer and interim chief financial officer, assessed the effectiveness of the Company's internal control over financial reporting as of June 30, 2023.

The Company's management, including its chief executive officer and chief financial officer, assessed the effectiveness of the Company's internal control over financial reporting as of June 30, 2024.

In making this assessment, the Company used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO") in Internal Control-Integrated Framework (2013) .

11 unchanged sentences

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of June 30, 2024, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of June 30, 2023 and 2022, the related consolidated statements of operations and comprehensive income, stockholders’ equity, and cash flows for each of the years in the three-year period ended June 30, 2023, and the related notes (collectively, the consolidated financial statements), and our report dated August 29, 2023 expressed an unqualified opinion on those consolidated financial statements.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of June 30, 2024 and 2023, the related consolidated statements of operations and comprehensive (loss) income, stockholders’ equity, and cash flows for each of the years in the three-year period ended June 30, 2024, and the related notes (collectively, the consolidated financial statements), and our report dated August 29, 2024 expressed an unqualified opinion on those consolidated financial statements.

Basis for Opinion

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We have audited the accompanying consolidated balance sheets of Malibu Boats, Inc.

and subsidiaries (the Company) as of June 30, 2023 and 2022, the related consolidated statements of operations and comprehensive income, stockholders’ equity, and cash flows for each of the years in the three-year period ended June 30, 2023, and the related notes (collectively, the consolidated financial statements).

and subsidiaries (the Company) as of June 30, 2024 and 2023, the related consolidated statements of operations and comprehensive (loss) income, stockholders’ equity, and cash flows for each of the years in the three-year period ended June 30, 2024, and the related notes (collectively, the consolidated financial statements).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of June 30, 2024 and 2023, and the results of its operations and its cash flows for each of the years in the three-year period ended June 30, 2024, in conformity with U.S.

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We identified the evaluation of the anticipated warranty costs per boat that are used to estimate the product warranty liability for Malibu and Axis branded boats as a critical audit matter.

A higher degree of subjective auditor judgment was required to evaluate the Company’s estimate of the anticipated warranty costs per boat, due to the nature of the audit evidence.

Specifically, for Axis and Malibu model years prior to 2016, historical claims experience only exists for a warranty term of two and three years, respectively.

This historical claim experience is shorter in duration than the five-year warranty term associated with the Company’s current warranty program.

A higher degree of subjective auditor judgement was required to evaluate the Company's estimate of the anticipated warranty costs per boat, due to the nature of the audit evidence.

The following are the primary procedures we performed to address this critical audit matter.

We evaluated the design and tested the operating effectiveness of certain internal controls over the Company's warranty accrual process.

This included controls over the development of the assumptions used to estimate the warranty cost per boat for warranty year five, for which less claims experience exists.

This included controls over the development of the assumptions used to estimate the warranty cost per boat.

We performed sensitivity analyses to assess the potential for possible changes to these assumptions on the product warranty liability.

We assessed the Company’s historical claims experience and the relationship between the historical warranty costs per boat incurred by warranty year.

We further assessed the Company’s assumptions underlying the anticipated warranty costs per boat for warranty year five by considering warranty claims received after year-end but before the consolidated financial statements were issued, to identify trends not considered by the Company when it developed its assumptions.

We assessed the

Company's historical claims experience and the relationship between the historical warranty costs per boat incurred by warranty year.

We further assessed the Company's assumptions underlying the anticipated warranty costs per boat by considering warranty claims received after year-end but before the consolidated financial statements were issued, to identify trends not considered by the Company when it developed its assumptions.

We also compared the Company’s prior year product warranty liability related to claims expected to be incurred in the current year to actual claims received in the current year to evaluate the historical accuracy of the Company’s estimate.

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AND SUBSIDIARIES

Consolidated Statements of Operations and Comprehensive Income

Consolidated Statements of Operations and Comprehensive (Loss) Income

(In thousands, except share and per share data)

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General and administrative 76,323 175,694 66,371

Goodwill and other intangible asset impairment 88,389 — —

Abandonment of construction in process 8,735 — —

Amortization 6,811 6,808 6,957

Operating income 144,784 213,823 149,775

Operating (loss) income ( 55,947 ) 144,784 213,823

Other expense (income), net:

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Interest expense 1,842 2,962 2,875

Other expense (income), net 3,293 3,858 1,514

Income before provision for income taxes 141,491 209,965 148,261

Provision for income taxes 33,581 46,535 33,979

Net income 107,910 163,430 114,282

Net income attributable to non-controlling interest 3,397 5,798 4,441

Net income attributable to Malibu Boats, Inc.

Other expense, net 1,838 3,293 3,858

(Loss) income before (benefit) provision for income taxes ( 57,785 ) 141,491 209,965

(Benefit) provision for income taxes ( 1,342 ) 33,581 46,535

Net (loss) income ( 56,443 ) 107,910 163,430

Net (loss) income attributable to non-controlling interest ( 531 ) 3,397 5,798

Net (loss) income attributable to Malibu Boats, Inc.

$ ( 55,912 ) $ 104,513 $ 157,632

Comprehensive income:

Net income $ 107,910 $ 163,430 $ 114,282

Other comprehensive (loss) income

Comprehensive (loss) income:

Net (loss) income $ ( 56,443 ) $ 107,910 $ 163,430

Other (loss) comprehensive income

Change in cumulative translation adjustment 142 ( 833 ) ( 1,868 )

Other comprehensive (loss) income ( 833 ) ( 1,868 ) 1,493

Comprehensive income 107,077 161,562 115,775

comprehensive income attributable to non-controlling interest, net of tax 3,371 5,731 4,507

Comprehensive income attributable to Malibu Boats, Inc., net of tax $ 103,706 $ 155,831 $ 111,268

Weighted average shares outstanding used in computing net income per share:

Other comprehensive income (loss) 142 ( 833 ) ( 1,868 )

Comprehensive (loss) income ( 56,301 ) 107,077 161,562

comprehensive (loss) income attributable to non-controlling interest, net of tax ( 516 ) 3,371 5,731

Comprehensive (loss) income attributable to Malibu Boats, Inc., net of tax $ ( 55,785 ) $ 103,706 $ 155,831

Weighted average shares outstanding used in computing net (loss) income per share:

Basic 20,439,449 20,501,844 20,749,237

Diluted 20,439,449 20,641,173 20,986,256

Net income available to Class A Common Stock per share:

Net (loss) income available to Class A Common Stock per share:

Basic $ ( 2.74 ) $ 5.10 $ 7.60

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Current liabilities

Current maturities of long-term debt $ — $ 1,563

Accounts payable 19,152 40,402

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Payable pursuant to tax receivable agreement, less current portion 40,613 39,354

Long-term debt — 118,054

Total liabilities 204,905 310,171

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Issuance of equity for exercise of options 113 1 — — 3,286 — — — 3,287

Increase in payable pursuant to the tax receivable agreement — — — — ( 2,142 ) — — — ( 2,142 )

Increase in deferred tax asset from step-up in tax basis — — — — 2,755 — — — 2,755

Exchange of LLC Units for Class A Common Stock 130 1 — — 1,373 — — ( 1,373 ) 1

Cancellation of Class B Common Stock for Exchange of LLC Units — — ( 5 ) — — — — — —

Repurchase and retirement of common stock ( 555 ) ( 6 ) — — ( 34,636 ) — — — ( 34,642 )

Distributions to LLC Unit holders — — — — — — — ( 3,076 ) ( 3,076 )

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Repurchase and retirement of common stock ( 144 ) ( 1 ) — — ( 7,867 ) — — — ( 7,868 )

Increase in payable pursuant to the tax receivable agreement — — — — ( 1,710 ) — — — ( 1,710 )

Increase in deferred tax asset from step-up in tax basis — — — — 2,619 — — — 2,619

Exchange of LLC Units for Class A Common Stock 145 1 — — 2,765 — — ( 2,765 ) 1

Issuance of Class B Common Stock — — 2 — — — — — —

Distributions to LLC Unit holders — — — — — — ( 3,131 ) ( 3,131 )

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Balance at June 30, 2023 20,603 204 12 — 86,321 ( 4,340 ) 525,697 7,871 615,753

Net income — — — — — — 104,513 3,397 107,910

Net loss — — — — — — ( 55,912 ) ( 531 ) ( 56,443 )

Stock based compensation, net of withholding taxes on vested equity awards 131 1 — — 3,397 — — — 3,398

Issuances of equity for services 12 — — — 1,179 — — — 1,179

Issuance of equity for exercise of options 31 — — — 1,317 — — — 1,317

Repurchase and retirement of common stock ( 699 ) ( 7 ) — — ( 29,836 ) — — — ( 29,843 )

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Exchange of LLC Units for Class A Common Stock 135 2 — — 2,521 — — ( 2,521 ) 2

Issuance of Class B Common Stock — — 2 — — — — — —

Distributions to LLC Unit holders — — — — — — ( 114 ) ( 114 )

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Operating activities:

Net income $ 107,910 $ 163,430 $ 114,282

Adjustments to reconcile net income to net cash provided by operating activities:

Net (loss) income $ ( 56,443 ) $ 107,910 $ 163,430

Adjustments to reconcile net (loss) income to net cash provided by operating activities:

Non-cash compensation expense 4,935 5,894 6,342

5 unchanged sentences

Other items, net 2,217 1,680 1,350

Goodwill and other intangible asset impairment 88,389 — —

Abandonment of construction in process 8,735 — —

Change in operating assets and liabilities (excluding effects of acquisition):

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Proceeds from revolving credit facility 75,000 241,700 72,000

Proceeds from long-term borrowings — — 25,000

Payments on revolving credit facility ( 75,000 ) ( 338,700 ) ( 20,000 )

5 unchanged sentences

Repurchase and retirement of Class A Common Stock ( 29,316 ) ( 7,868 ) ( 34,642 )

Net cash (used in) provided by financing activities ( 134,574 ) ( 60,380 ) 57,346

Net cash used in financing activities ( 31,695 ) ( 134,574 ) ( 60,380 )

Effect of exchange rate changes on cash ( 13 ) ( 328 ) ( 580 )

5 unchanged sentences

Cash paid for income taxes 3,529 50,515 42,064

Income tax refunds ( 1,404 ) — —

Non-cash operating, investing and financing activities:

3 unchanged sentences

Tax distributions payable to non-controlling LLC Unit holders — 776 1,045

Repurchase/retirement of common stock not settled 527 — —

Capital expenditures in accounts payable 1,045 2,207 1,032

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The Company sells its boats under eight brands -- Malibu, Axis, Pursuit, Maverick, Cobia, Pathfinder, Hewes and Cobalt brands.

T he Company reports its results of operations under three reportable segments -- Malibu, Saltwater Fishing and Cobalt.

The Company reports its results of operations under three reportable segments -- Malibu, Saltwater Fishing and Cobalt.

Basis of Presentation

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The Cobalt segment participates in the manufacturing, distribution, marketing and sale of Cobalt boats throughout the world.

The Company revised its segment reporting effective December 31, 2020, to account for its acquisition of Maverick Boat Group and to conform to changes in its internal management reporting based on the Company’s boat manufacturing operations.

Prior to this change in reporting segments, the Company had three reportable segments, Malibu, Pursuit and Cobalt.

The Company now aggregates Pursuit and Maverick Boat Group into one reportable segment as they have similar economic characteristics and qualitative factors.

As a result, the Company continues to have three reportable segments, Malibu, Saltwater Fishing and Cobalt.

Additional segment information is contained in Note 19.

Use of Estimates

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When a dealer purchases and takes delivery of a boat pursuant to a floor plan financing arrangement, it draws against its line of credit and the lender pays the invoice cost of the boat directly to the Company within approximately two weeks.

For dealers that use local floor plan financing programs or pay cash, the Company may extend credit without collateral under the dealer agreement based on the Company’s evaluation of the dealer’s credit risk and past payment history.

For dealers that use local floor plan financing programs or pay cash, the Company may extend credit without collateral under the

dealer agreement based on the Company’s evaluation of the dealer’s credit risk and past payment history.

The Company maintains allowances for potential credit losses that it believes are adequate.

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represented approximately 23.7 %, 17.2 % and 16.8 % of the Company's consolidated net sales in the fiscal years ended June 30, 2024, 2023, and 2022 respectively.

Sales to the Company's dealers under common control of Tommy's Boats represented approximately 10.7 %, 9.4 % and 7.3 % of the Company's consolidated net sales in the fiscal years ended June 30, 2023 , 2022 , and 2021 respectively.

Sale s to our former dealers under common control of Tommy's Boats represented approximately 2.4 %, 10.7 % and 9.4 % of our consolidated net sales in the fiscal years ended June 30, 2024, 2023 and 2022 respectively

The Company considers all highly liquid investments purchased with an original maturity of 90 days or less to be cash equivalents.

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If the carrying value of the reporting unit’s goodwill exceeds its implied fair value, then the Company would record an impairment loss equal to the difference.

During the three months ended March 31, 2024, the Company determined certain indicators of potential impairment existed, warranting an interim impairment assessment of goodwill as of March 31, 2024.

These indicators included a decline in the fiscal year 2024 and fiscal year 2025 forecast, in the outlook for sales and operating performance relative to our business plan and a deterioration in general macroeconomic conditions, including rising interest rates and inflationary pressures on labor and supply costs.

As a result of these macroeconomic factors, specifically a decline in the fiscal year 2024 and fiscal year 2025 forecast, the Company performed a goodwill impairment analysis as of March 31, 2024 consistent with the Company’s approach for annual impairment testing, including similar models and inputs.

Based on such analysis, the Company determined that its estimated fair value for the Maverick Boat Group reporting unit is less than its carrying value as of March 31, 2024 and the Company recognized an impairment charge of $ 49,189 for the three months ended March 31, 2024.

For the fiscal year ended June 30, 2024, the Company performed a qualitative assessment on the remaining reporting units which indicated that the fair value of its reporting units more likely than not exceeded their respective carrying amounts.

For the fiscal year ended June 30, 2023, the Company performed a quantitative assessment on the Maverick Boat Group reporting unit which indicated that the fair value of its reporting unit more likely than not exceeded its carrying amount.

For the fiscal year ended June 30, 2023, the Company performed a qualitative assessment on the remaining reporting units which indicated that the fair value of its reporting units more likely than not exceeded their respective carrying amounts.

For the fiscal year ended June 30, 2022, the Company performed a qualitative assessment which indicated that the fair value of its reporting units more likely than not exceeded their respective carrying amounts.

The Company did no t recognize any goodwill impairment charges in the fiscal years ended June 30, 2023 and 2022.

Intangible Assets

Intangible assets consist primarily of relationships, product trade names, legal and contractual rights surrounding a patent and a non-compete agreement.

Intangible assets consist primarily of dealer relationships, product trade names, legal and contractual rights surrounding a patent and a non-compete agreement.

These assets are recorded at their estimated fair values at the acquisition dates using the income approach.

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The estimated useful lives of dealer relationships consider the average length of dealer relationships at the time of acquisition, historical rates of dealer attrition and retention, the Company’s history of renewal and extension of dealer relationships, as well as competitive and economic factors resulting in a range of useful lives.

The estimated useful lives of the Company’s trade names are based on a number of factors including technological obsolescence and the competitive environment.

The estimated useful lives of the Company’s trade names are based on a number of factors including the competitive environment.

The estimated useful lives of legal and contractual rights are estimated based on the benefits that the patent provides for its remaining terms unless competitive, technological obsolescence or other factors indicate a shorter life.

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An impairment loss is recognized for the amount by which the carrying value exceeds the fair value of the asset.

During the Company's interim impairment evaluation of indefinite-lived intangibles, the Company recorded an impairment charge to trade names of $ 39,200 for the three months ended March 31, 2024 related to the Maverick Boat Group reporting unit.

The impairment was principally a result of a decline, in the fiscal year 2024 and fiscal year 2025 forecast, in the outlook for sales and operating performance relative to our business plan.

This charge was included in Goodwill and other intangible asset impairment on the consolidated statements of operations and comprehensive (loss) income.

No other intangible asset impairment loss was recorded.

There was no impairment loss recognized on intangible assets for the fiscal years ended June 30, 2023 and 2022.

Long-Lived Assets Other than Intangible Assets

The Company assesses the potential for impairment of its long-lived assets if facts and circumstances, such as declines in sales, earnings, or cash flows or adverse changes in the business climate, suggest that they may be impaired.

A current expectation that, more likely than not, a long-lived asset (asset group) will be sold or otherwise disposed of significantly before the end of its previously estimated useful life will also trigger a review for impairment.

The Company performs its assessment by comparing the book value of the asset groups to the estimated future undiscounted cash flows associated with the asset groups.

If any impairment in the carrying value of its long-lived assets is indicated, the assets would be adjusted to an estimate of fair value.

The Company recognized $ 8,735 in abandonment of construction in process charges related to the ERP (Enterprise resource planning) project during the year ended June 30, 2024.

The charges pertain to long-lived assets including software and other capitalized costs specifically tied to the project and is captured in the Abandonment of construction in process line of the Company's Consolidated Statements of Operations and Comprehensive (Loss) Income (see Note 6).

Dealer Incentives

12 unchanged sentences

Dealer rebate incentives 28,385 32,953 35,210

Additions for acquisitions — — 219

Dealer rebates paid ( 14,618 ) ( 35,090 ) ( 31,024 )

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Flooring incentives 17,590 13,926 3,717

Additions for acquisitions — — 30

Flooring paid ( 17,295 ) ( 12,979 ) ( 3,651 )

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The term of the tax receivable agreement will continue until all such tax benefits have been utilized or expired, unless the Company exercises its right to terminate the tax receivable agreement for an amount based on the agreed payments remaining to be made under the agreement.

In certain mergers, asset sales or other forms of business combinations or other changes of control, the Company (or its successor) would owe to the pre-IPO owners of the LLC (or any permitted assignees) a lump-sum payment equal to the present value of all forecasted future payments that would have otherwise been made under the tax receivable agreement that would be based on certain assumptions, including a deemed exchange of all LLC Units and that the Company would have had sufficient taxable income to fully utilize the deductions arising from the increased tax basis and other tax benefits related to entering into the tax receivable agreement.

payment equal to the present value of all forecasted future payments that would have otherwise been made under the tax receivable agreement that would be based on certain assumptions, including a deemed exchange of all LLC Units and that the Company would have had sufficient taxable income to fully utilize the deductions arising from the increased tax basis and other tax benefits related to entering into the tax receivable agreement.

Malibu Boats, Inc.

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Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring goods or providing services.

The Company generally manufactures products based on specific orders from dealers and often ships completed products only after receiving credit approval from financial institutions.

The Company generally manufactures products based on specific orders from dealers and often ships completed

products only after receiving credit approval from financial institutions.

The amount of consideration the Company receives and revenue it recognizes varies with changes in marketing incentives and rebates it offers to its dealers and their customers.

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From time to time, however, the Company may accept returns in limited circumstances and at the Company’s discretion under its warranty policy, which generally limits returns to instances of manufacturing defects.

The Company may be obligated, in the event of default by a dealer, to accept returns of unsold boats

under its repurchase commitment to floor financing providers, who are able to obtain such boats through foreclosure.

The Company may be obligated, in the event of default by a dealer, to accept returns of unsold boats under its repurchase commitment to floor financing providers, who are able to obtain such boats through foreclosure.

The Company accrues returns when a repurchase and return, due to the default of one of its dealers, is determined to be probable and the amount of the return is reasonably estimable.

Historically, product returns, resulting from repurchases made under the floorplan financing program, have not been material and the returned boats have been subsequently resold above their cost.

Refer to Note 9 and Note 17 related to the Company’s product warranty and repurchase commitment obligations, respectively.

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Delivery Costs

Shipping and freight costs are included in cost of sales in the accompanying consolidated statements of operations and comprehensive income.

Shipping and freight costs are included in cost of sales in the accompanying consolidated statements of operations and comprehensive (loss) income.

Advertising Costs

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The functional currency for the Company's consolidated foreign subsidiary is the applicable local currency.

The assets and liabilities are translated at the foreign exchange rate in effect at the applicable reporting date, and the consolidated statements of operations and comprehensive income and cash flows are translated at the average exchange rate in effect during the applicable

The assets and liabilities are translated at the foreign exchange rate in effect at the applicable reporting date, and the consolidated statements of operations and comprehensive (loss) income and cash flows are translated at the average exchange rate in effect during the applicable period.

Exchange rate fluctuations on translating the foreign currency financial statements into U.S.

dollars that result in unrealized gains or losses are referred to as translation adjustments.

Cumulative translation adjustments are reflected as a component of "Accumulated other comprehensive loss, net of tax," in the stockholders' equity section of the accompanying consolidated balance sheets and periodic changes are included in comprehensive income.

Comprehensive Income

Components of comprehensive income include net income and foreign currency translation adjustments.

The Company has chosen to disclose comprehensive income in a single continuous consolidated statement of operations and comprehensive income.

Comprehensive (Loss) Income

Components of comprehensive (loss) income include net (loss) income and foreign currency translation adjustments.

The Company has chosen to disclose comprehensive (loss) income in a single continuous consolidated statement of operations and comprehensive (loss) income.

Recent Accounting Pronouncements

In June 2016, the FASB issued Accounting Standards Update ("ASU") 2016-13, Financial Instruments - Credit Losses (Topic 326):

Measurement of Credit Losses on Financial Instruments , and in November 2018 issued a subsequent amendment, ASU 2018-19, Codification Improvements to Topic 326, Financial Instruments - Credit Losses .

ASU 2016-13 significantly changes how entities will measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income.

ASU 2016-13 will replace today’s “incurred loss” approach with an “expected loss” model for instruments measured at amortized cost.

ASU 2018-19 will affect loans, debt securities, trade receivables, net investments in leases, off balance sheet credit exposures, reinsurance receivables, and any other financial assets not excluded from the scope of this amendment that have the contractual right to receive cash.

On July 1, 2020, the Company adopted this standard and the adoption did not have a material impact on the Company’s consolidated financial position, results of operations, equity or cash flows.

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848):

Facilitation of Effects of Reference Rate Reform on Financial Reporting , which provides practical expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met.

The elective amendments provide expedients to contract modification, affected by reference rate reform if certain criteria are met.

The expedients and exceptions provided by this guidance apply only to contracts, hedging relationships, and other transactions that reference the London interbank offered rate (“LIBOR”) or another reference rate expected to be discontinued as a result of reference rate reform.

Per ASU 2022-06, Reference Rate Reform (Topic 848):

Deferral of the Sunset Date of Topic 848 , this guidance is not applicable to contract modifications made and hedging relationships entered into or evaluated after December 31, 2024.

The guidance can be applied immediately through December 31, 2024.

The Company will adopt this standard when LIBOR is discontinued and does not expect a material impact to its financial condition, results of operations or disclosures based on the current debt portfolio and capital structure.

In November, 2023, the FASB issued Accounting Standards Update ("ASU") No.

2023-07 , " Segment Reporting (Topic 280 ):

Improvements to Reportable Segment Disclosures" which expands annual and interim disclosure requirements for reportable segments, primarily through enhanced disclosures about significant expenses.

The updated standard is effective for annual periods beginning in fiscal 2025 and interim periods beginning in the first quarter of fiscal 2026.

Early adoption is permitted.

The Company is currently evaluating the effect of adopting this ASU.

In December, 2023, the FASB issued ASU No.

2023-09 “ Income Taxes (Topic 740):

Improvements to Income Tax Disclosures” which requires two primary enhancements of 1) disaggregated information on a reporting entity’s effective tax rate reconciliation, and 2) information on income taxes paid.

For public business entities, the new requirements will be effective for annual periods beginning after December 15, 2024.

The guidance will be applied on a prospective basis with the option to apply the standard retrospectively.

Early adoption is permitted.

The Company is currently evaluating the effect of adopting this ASU.

There are no other new accounting pronouncements that are expected to have a significant impact on the Company's consolidated financial statements and related disclosures.

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Non-controlling Interest

The non-controlling interest on the consolidated statements of operations and comprehensive income represents the portion of earnings or loss attributable to the economic interest in the Company's subsidiary, the LLC, held by the non-controlling LLC Unit holders.

The non-controlling interest on the consolidated statements of operations and comprehensive (loss) income represents the portion of earnings or loss attributable to the economic interest in the Company's subsidiary, the LLC, held by the non-controlling LLC Unit holders.

Non-controlling interest on the consolidated balance sheets represents the portion of net assets of the Company attributable to the non-controlling LLC Unit holders, based on the portion of the LLC Units owned by such Unit holders.

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The Company must cause the LLC to issue a number of LLC Units equal to the number of shares of Class A Common Stock issued such that, at all times, the number of LLC Units held by the Company equals the number of outstanding shares of Class A Common Stock.

During the fiscal year ended June 30, 2023, the Company caused the LLC to issue a total of 346,370 LLC Units to the Company in connection with (i) the Company's issuance of Class A Common Stock to a non-employee director for her services, (ii) the issuance of Class A Common Stock for the vesting of awards granted under the Malibu Boats, Inc.

Long-Term Incentive Plan (the "Incentive Plan") and (iii) the issuance of restricted Class A Common Stock granted under the Incentive Plan, (iv) the issuance of Class A Common Stock to LLC Unit holders in exchange of their LLC Units and (v) the issuance of Class A Common Stock for the exercise of options granted under the Incentive Plan.

During fiscal year 2023, 38,598 LLC Units were canceled in connection with the vesting of share-based equity awards to satisfy employee tax withholding requirements, 3,406 LLC Units were canceled in connection with the vesting of stock awards with a market condition that were deemed to not be achieved and 57,866 LLC Units were canceled in connection with the forfeiture of stock awards.

During the fiscal year ended June 30, 2024, the Company caused the LLC to issue a total of 315,695 LLC Units to the Company in connection with (i) the Company's issuance of Class A Common Stock to non-employee directors for their services, (ii) the issuance of Class A Common Stock for the vesting of awards granted under the Malibu Boats, Inc.

Long-Term Incentive Plan (the "Incentive Plan"), (iii) the issuance of restricted Class A Common Stock granted under the Incentive Plan, and (iv) the issuance of Class A Common Stock to LLC Unit holders in exchange of their LLC Units.

During fiscal year 2024, 17,804 LLC Units were canceled in connection with the vesting of share-based equity awards to satisfy employee tax withholding requirements, 20,080 LLC Units were canceled in connection with the vesting of stock awards with a market condition that were deemed to not be achieved and zero LLC Units were canceled in connection with the forfeiture of stock awards.

In connection with the cancellation of LLC units described above, an equivalent 38,017 treasury shares were retired in accordance with the LLC Agreement.

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The Company accounted for the transaction in accordance with ASC Topic 805, Business Combinations .

Maverick Boat Group

On December 31, 2020, the Company completed its acquisition of all the outstanding stock of Maverick Boat Group.

The aggregate purchase price for the transaction was $ 150,675 , funded with cash and borrowings under the Company's credit facilities.

The aggregate purchase price was subject to certain adjustments, including customary adjustments for the amount of cash, indebtedness and working capital in the business at the closing date and subject to adjustment for certain capital expenditures made by Maverick Boat Group prior to closing at the Company’s request.

The Company accounted for the transaction in accordance with ASC Topic 805, Business Combinations .

The total consideration given to the stockholders of Maverick Boat Group has been allocated to the assets acquired and liabilities assumed based on estimates of fair value as of the date of the acquisition.

The measurements of fair value were determined based upon estimates utilizing the assistance of third party valuation specialists.

The following table summarizes the purchase price allocation based on the estimated fair values of the assets acquired and liabilities assumed at the acquisition date:

Consideration:

Cash consideration paid $ 150,675

Recognized amounts of identifiable assets acquired and (liabilities assumed), at fair value:

Accounts receivable 3,204

Inventories 7,756

Other current assets 194

Property, plant and equipment 22,618

Identifiable intangible assets 102,600

Other assets 4,410

Current liabilities ( 6,611 )

Deferred tax liabilities ( 28,528 )

Other liabilities ( 4,405 )

Fair value of assets acquired and liabilities assumed 101,486

Goodwill 49,189

Total purchase price $ 150,675

The fair value estimates for the Company's identifiable intangible assets acquired as part of the acquisition are as follows:

Estimates of Fair Value Estimated Useful Life (in years)

Definite-lived intangibles:

Dealer relationships $ 47,900 20

Total definite-lived intangibles 47,900

Indefinite-lived intangible:

Trade name 54,700

Total other intangible assets $ 102,600

The value allocated to inventories reflects the estimated fair value of the acquired inventory based on the expected sales price of the inventory, less an estimated cost to complete and a reasonable profit margin.

The fair value of the identifiable intangible assets were determined based on the following approaches:

Dealer Relationships - The value associated with Maverick Boat Group's dealer relationships is attributed to its long standing dealer distribution network.

The estimate of fair value assigned to this asset was determined using the income approach, which requires an estimate or forecast of the expected future cash flows from the dealer relationships through the application of the multi-period excess earnings approach.

The estimated remaining useful life of dealer relationships is approximately 17.5 years.

Trade Name - The value attributed to Maverick Boat Group's trade names was determined using a variation of the income approach called the relief from royalty method, which requires an estimate or forecast of the expected future cash flows.

The trade name has an indefinite life.

The fair value of the definite-lived intangible assets are being amortized using the straight-line method to amortization expenses over their estimated useful lives.

Indefinite-lived intangible assets are not amortized, but instead are evaluated for potential impairment on an annual basis in accordance with the provisions of ASC Topic 350, Intangibles—Goodwill and Other .

The weighted average useful life of identifiable definite-lived intangible assets acquired was 20 years.

Goodwill of $ 49,189 arising from the acquisition consists of expected synergies and cost savings as well as intangible assets that do not qualify for separate recognition.

Acquisition-related costs of $ 2,648 , w hich were incurred by the Company in the fiscal year ended June 30, 2021 related to the Maverick Boat Group acquisition, were expensed in the period incurred, and are included in general and administrative expenses in the consolidated statement of operations and comprehensive income.

Pro Forma Financial Information (unaudited):

The following unaudited pro forma consolidated results of operations for the fiscal years ended June 30, 2023, 2022 and 2021, assumes that the acquisition of Maverick Boat Group occurred as of July 1, 2020.

The unaudited pro forma financial information combines historical results of Malibu and Maverick Boat Group, with adjustments for interest on debt financing, depreciation and amortization attributable to fair value estimates on acquired tangible and intangible assets for the respective periods.

Non-recurring pro forma adjustments associated with the fair value step up of inventory were included in the reported pro forma cost of sales and earnings.

The unaudited pro forma financial information is presented for informational purposes only and is not indicative of the results of operations that would have been achieved if the acquisition had taken place at the beginning of fiscal year 2021 or the results that may occur in the future:

Fiscal Year Ended June 30,

2023 2022 2021

Net sales $ 1,388,365 $ 1,214,877 $ 982,535

Net income 107,910 163,430 116,598

Net income attributable to Malibu Boats, Inc.

104,513 157,632 112,104

Basic earnings per share $ 5.10 $ 7.60 $ 5.40

Diluted earnings per share $ 5.06 $ 7.51 $ 5.34

Inventories, net

Inventories are stated at the lower of cost or net realizable value, determined on the first in, first out (“FIFO”) basis.

Inventories are stated at the lower of cost or net realizable value, determined on the first in, first out (“FIFO”) or weighted-average basis.

Manufacturing cost includes materials, labor and manufacturing overhead.

5 unchanged sentences

Finished goods 16,392 9,019

Inventory subject to return 1

Total inventories $ 145,573 $ 171,189

(1) Represents accrual related to Tommy's Boats.

See Note 17 of our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K for additional information.

Property, Plant, and Equipment, net

Property, plant, and equipment acquired outside of acquisition are stated at cost.

When property, plant, and equipment is retired or otherwise disposed of, the related cost and accumulated depreciation is removed from the accounts and any resulting gain or loss is accounted for in the consolidated statement of operations and comprehensive income.

Major additions are capitalized;

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In accordance with ASC Topic 360, long-lived assets to be held are reviewed for events or changes in circumstances that indicate that their carrying value may not be recoverable.

The Company periodically reviews for

indicators and, if indicators are present, tests the carrying value of long-lived assets, assessing their net realizable values based on estimated undiscounted cash flows over their remaining estimated useful lives.

The Company periodically reviews for indicators and, if indicators are present, tests the carrying value of long-lived assets, assessing their net realizable values based on estimated undiscounted cash flows over their remaining estimated useful lives.

If the carrying amount of an asset exceeds its estimated undiscounted future cash flows, an impairment charge is measured as the amount by which the carrying amount of the asset exceeds the fair value of the asset, based on discounted cash flows.

During fiscal year 2024, the Company abandoned a company-wide ERP project.

As such, the Company recorded a non-cash charge of $ 8,735 associated with the abandonment of the ERP project.

The abandonment pertains to long-lived assets including software and other capitalized costs specifically tied to the project and is captured in the abandonment of construction in process line of the Company's Consolidated Statements of Operations and Comprehensive (Loss) Income.

No impairment charges were recorded for the fiscal years ended June 30, 2023 and 2022 in the Company’s consolidated financial statements.

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$ 12,299 $ 68,714 $ 19,791 $ 100,804

Addition related to the acquisition of Malibu Electronics 329 — — 329

Effect of foreign currency changes on goodwill

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12,072 68,714 19,791 100,577

Impairment related to Maverick Boat Group — ( 49,189 ) — $ ( 49,189 )

Effect of foreign currency changes on goodwill

( 227 ) — — ( 227 )

Goodwill as of June 30, 2024

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Trade names 118,200 118,200

Impairment charge ( 39,200 ) —

Total other intangible assets $ 175,449 $ 221,458

During the three months ended March 31, 2024, the Company determined certain indicators of potential impairment existed, warranting an interim impairment assessment of goodwill as of March 31, 2024.

The Company performed a goodwill impairment analysis as of March 31, 2024 consistent with the Company’s approach for annual impairment testing, including similar models and inputs.

Based on such analysis, the Company determined that its estimated fair value for the Maverick Boat Group reporting unit was less than its carrying value as of March 31, 2024, and the Company recognized an impairment charge of $ 49,189 for the three months ended March 31, 2024.

Additionally, during the Company's interim impairment evaluation of indefinite-lived intangibles, the Company recorded an impairment charge on trade names of $ 39,200 related to the Maverick Boat Group reporting unit.

This charge was included in Goodwill and other intangible asset impairment on the consolidated statements of operations and comprehensive (loss) income.

No other intangible asset impairment loss was recorded.

For more information, refer to Note 1 of our consolidated financial statements included elsewhere in this report.

Amortization expense recognized on all amortizable intangibles was $ 6,811 , $ 6,808 and $ 6,957 for the fiscal years ended June 30, 2024, 2023 and 2022, respectively.

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Customer deposits 4,270 4,054

Government grant 5,867 —

Other accrued expenses 3,980 2,425

Total accrued expenses $ 119,430 $ 187,078

Litigation settlement represents settlement of product liability cases in June 2023 for $ 100.0 million.

Litigation settlement represents the settlement of product liability cases in June 2023 for $ 100.0 million.

Accrued legal and professional fees include approximately $ 21,000 in insurance coverage proceeds that are subject in certain cases to reservations of rights by the insurance carriers.

The proceeds will be considered a liability in accrued expenses until the resolution of the litigation.

For more information, refer to Note 17 of our consolidated financial statements included elsewhere in this Annual Report.

Government grant includes approximately $ 5,867 related to an Economic Development Grant to be paid by the State of Tennessee in relation to the Roane County Property Purchase and Related Improvements.

The grant requires the Company to create and maintain a specified number of jobs in order to retain the grant.

The accrued liability will be relieved as the Company satisfies headcount requirements.

Product Warranties

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Beginning in model year 2018, the Company increased the term of its bow-to-stern warranty for Cobalt brand boats from three years to five years .

Accordingly, the Company has less historical claims experience for warranty years four and five , and as such, these estimates give rise to a higher level of estimation uncertainty.

Future warranty claims may differ from the Company's estimate of the warranty liability, which could lead to changes in the Company’s warranty liability in future periods.

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Warranty Expense 23,744 24,812 21,280

Additions for Maverick Boat Group acquisition — — 883

Warranty claims paid ( 27,486 ) ( 21,776 ) ( 17,642 )

Ending balance $ 37,967 $ 41,709 $ 38,673

Outstanding debt consisted of the following:

As of June 30,

Term loan $ — $ 23,125

Revolving credit loan — 97,000

Less unamortized debt issuance costs — ( 508 )

Total debt — 119,617

Less current maturities — 1,563

Long term debt less current maturities $ — $ 118,054

As of June 30, 2024 and 2023, the Company did not have any outstanding debt.

Long-Term Debt

As of June 30, 2024, the Company had a revolving credit facility with borrowing capacity of up to $ 350,000 .

June 30, 2023, the Company had $ 0 outstanding under its revolving credit facility and $ 1,578 in outstanding letters of credit with $ 348,422 available for borrowing.

As of June 30, 2024, the Company had zero outstanding under its revolving credit facility and $ 1,578 in outstanding letters of credit with $ 348,422 available for borrowing.

The revolving credit facility matures on July 8, 2027.

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Borrowings under the Credit Agreement bear interest at a rate equal to either, at the Company's option, (i) the highest of the prime rate, the Federal Funds Rate (as defined in the Credit Agreement) plus 0.5 %, or one-month Term SOFR (as defined in the Credit Agreement) plus 1 % (the “Base Rate”) or (ii) SOFR (as defined in the Credit Agreement), in each case plus an applicable margin ranging from 1.25 % to 2.00 % with respect to SOFR borrowings and 0.25 % to 1.00 % with respect to Base Rate borrowings.

The applicable margin will be based upon the consolidated leverage ratio of the LLC and its subsidiaries.

As of June 30, 2023, the interest rate on the Company’s term loans and revolving credit facility was 6.56 % .

The Company is required to pay a commitment fee for any unused portion of the revolving credit facility which will range from 0.15 % to 0.30 % per annum, depending on the LLC’s and its subsidiaries’ consolidated leverage ratio.

The applicable margin is based upon the consolidated leverage ratio of the LLC and its subsidiaries.

As of June 30, 2024, the interest rate on the Company’s revolving credit facility was 6.50 %.

The Company is required to pay a commitment fee for any unused portion of the revolving credit facility which ranges from 0.15 % to 0.30 % per annum, depending on the LLC’s and its subsidiaries’ consolidated leverage ratio.

The Credit Agreement contains certain customary representations and warranties, and notice requirements for the occurrence of specific events such as the occurrence of any event of default or pending or threatened litigation.

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The Credit Agreement contains certain customary restrictive covenants regarding indebtedness, liens, fundamental changes, investments, share repurchases, dividends and distributions, disposition of assets, transactions with affiliates, negative pledges, hedging transactions, certain prepayments of indebtedness, accounting changes and governmental regulation.

For example, the Credit Agreement generally prohibits the LLC, Boats LLC and the subsidiary guarantors from paying dividends or making distributions, including to the Company.

For example, the Credit Agreement generally prohibits the LLC, Boats LLC

and the subsidiary guarantors from paying dividends or making distributions, including to the Company.

The credit facility permits, however, (i) distributions based on a member’s allocated taxable income, (ii) distributions to fund payments that are required under the LLC’s tax receivable agreement, (iii) purchase of stock or stock options of the LLC from former officers, directors or employees of loan parties or payments pursuant to stock option and other benefit plans up to $ 5,000 in any fiscal year, and (iv) repurchases of the Company's outstanding stock and LLC Units.

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The weighted average remaining lease term for the fiscal year ended June 30, 2024 and 2023 was 3.60 years and 4.60 years, respectively.

As of June 30, 2023 and 2022, the weighted average discount rate determined based on the Company's incremental borrowing rate is 3.67 % and 3.63 %, respectively.

As of June 30, 2024 and 2023, the weighted average discount rate determined based on the Company's incremental borrowing rate is 3.67 % for both periods.

Future annual minimum lease payments for the following fiscal years as of June 30, 2024 are as follows:

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The Company has a Tax Receivable Agreement with the pre-IPO owners of the LLC that provides for the payment by the Company to the pre-IPO owners (or their permitted assignees) of 85 % of the amount of the benefits, if any, that the Company is deemed to realize as a result of (i) increases in tax basis and (ii) certain other tax benefits related to the Company entering into the Tax Receivable Agreement, including those attributable to payments under the Tax Receivable Agreement.

contractual payment obligations are obligations of the Company and not of the LLC.

These contractual payment obligations are obligations of the Company and not of the LLC.

The Company's Tax Receivable Agreement liability was determined on an undiscounted basis in accordance with ASC 450, Contingencies , since the contractual payment obligations were deemed to be probable and reasonably estimable.

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Beginning balance $ 43,465 $ 45,541

Additions (reductions) to tax receivable agreement:

Additions to tax receivable agreement:

Exchange of LLC Units for Class A Common Stock 1,320 1,710

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The Tax Receivable Agreement further provides that, upon certain mergers, asset sales or other forms of business combinations or other changes of control, the Company (or its successor) would owe to the pre-IPO owners of the LLC a lump-sum payment equal to the present value of all forecasted future payments that would have otherwise been made under the Tax Receivable Agreement that would be based on certain assumptions, including a deemed exchange of LLC Units and that the Company would have sufficient taxable income to fully utilize the deductions arising from the increased tax basis and other tax benefits related to entering into the Tax Receivable Agreement.

The Company also is entitled to terminate the Tax Receivable Agreement, which, if terminated, would obligate the Company to make early termination payments to the pre-IPO owners of the LLC.

The Company also is entitled to terminate the Tax Receivable

Agreement, which, if terminated, would obligate the Company to make early termination payments to the pre-IPO owners of the LLC.

In addition, a pre-IPO owner may elect to unilaterally terminate the Tax Receivable Agreement with respect to such pre-IPO owner, which would obligate the Company to pay to such existing owner certain payments for tax benefits received through the taxable year of the election.

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The aggregate Tax Receivable Agreement liability represents 85 % of the tax benefits that the Company expects to receive in connection with the Section 754 election.

In accordance with the Tax Receivable Agreement, the next annual payment is anticipated approximately 75 days after filing the federal tax return due by April 15, 2024.

In accordance with the Tax Receivable Agreement, the next annual payment is anticipated once net operating losses are utilized and there is sufficient taxable income.

Malibu Boats, Inc.

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The Company has deferred tax assets and liabilities and maintains valuation allowances where it is more likely than not that all or a portion of deferred tax assets will not be realized.

To the extent the Company determines that it will not realize

the benefit of some or all of its deferred tax assets, such deferred tax assets will be adjusted through the Company’s provision for income taxes in the period in which this determination is made.

To the extent the Company determines that it will not realize the benefit of some or all of its deferred tax assets, such deferred tax assets will be adjusted through the Company’s provision for income taxes in the period in which this determination is made.

On August 16, 2022, the Inflation Reduction Act of 2022 (the “Inflation Reduction Act”) was signed into law.

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The effects of the new legislation were recognized upon enactment.

The Company did not recognize any significant impact to income tax expense for the fiscal year ended June 30, 2023 relating to the Inflation Reduction Act.

The components of provision for income taxes are as follows:

The Company accrued $ 0.3 million excise tax for stock repurchases during fiscal year's ended June 30, 2024.

The Company did not recognize any significant impact to income tax expense for the fiscal years ended June 30, 2024 or June 30, 2023 relating to the Inflation Reduction Act.

The components of (benefit) for income taxes are as follows:

Fiscal Year Ended June 30,

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Total current 3,127 49,864 41,853

Deferred tax expense:

Deferred tax (benefit) expense:

Federal ( 3,872 ) ( 14,230 ) 4,661

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Total deferred ( 4,469 ) ( 16,283 ) 4,682

Income tax expense $ 33,581 $ 46,535 $ 33,979

The income tax expense differs from the amount computed by applying the federal statutory income tax rate to income from continuing operations before income taxes.

Income tax (benefit) expense $ ( 1,342 ) $ 33,581 $ 46,535

The income tax (benefit) expense differs from the amount computed by applying the federal statutory income tax rate to (loss) income from continuing operations before income taxes.

The sources and tax effects of the differences are as follows:

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2024 2023 2022

Federal tax provision at statutory rate 21.0 % 21.0 % 21.0 %

Federal tax (benefit) provision at statutory rate ( 21.0 ) % 21.0 % 21.0 %

State income taxes, net of federal benefit ( 0.3 ) 3.5 2.8

Permanent differences attributable to partnership investment 1.5 ( 0.5 ) ( 1.0 )

Impairment charges - Maverick 17.9 — —

Non-controlling interest ( 0.2 ) ( 0.5 ) ( 0.6 )

Other, net ( 0.2 ) 0.2 —

Total income tax expense on continuing operations 23.7 % 22.2 % 22.9 %

Total income (benefit) tax on continuing operations ( 2.3 ) % 23.7 % 22.2 %

The Company’s effective tax rate includes a rate benefit attributable to the fact that the Company’s subsidiary operated as a limited liability company which was not subject to federal income tax.

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Foreign tax credits 580 580

Federal NOL and Credits 19,335 —

Other 754 381

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Additions based on tax positions taken during the current period 129 363 314

Reductions for settlements with taxing authorities — — ( 250 )

Reductions due to statute settlements ( 130 ) ( 156 ) ( 286 )

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Exchange of LLC Units for Class A Common Stock and Issuance of Class B Common Stock

During fiscal year 2021, nine non-controlling LLC Unit holders exchanged LLC Units for the issuance of Class A Common Stock.

In connection with the exchange, five shares of Class B Common Stock were automatically transferred to the Company and retired.

As of June 30, 2021, the Company had a total of 10 shares of its Class B Common Stock issued and outstanding.

During fiscal year 2022, no non-controlling LLC Unit holders exchanged LLC Units for the issuance of Class A Common Stock.

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As of June 30, 2023, the Company had a total of 12 shares of its Class B Common Stock issued and outstanding.

During fiscal year 2024, four non-controlling LLC Unit holders exchanged LLC Units for the issuance of Class A Common Stock.

In connection with the exchange, no shares of Class B Common Stock were automatically transferred to the Company and retired.

As of June 30, 2024, the Company had a total of 12 shares of its Class B Common Stock issued and outstanding.

Stock Repurchase Program

On August 27, 2020, the board of directors of the Company authorized a stock repurchase program for the repurchase of up to $ 50,000 of Class A Common Stock and the LLC Units for the period from September 2, 2020 to July 1, 2021 (the “Fiscal 2021 Repurchase Program”).

No shares were repurchased under the Fiscal 2021 Repurchase Program.

The Fiscal 2021 Repurchase Program expired on July 1, 2021.

On November 3, 2021, the board of directors of the Company authorized a stock repurchase program for the repurchase of up to $ 70,000 of Class A Common Stock and the LLC Units for the period from November 8, 2021 to November 8, 2022 (the “Fiscal 2022 Repurchase Program”).

2 unchanged sentences

On November 3, 2022, the board of directors of the Company authorized a stock repurchase program for the repurchase of up to $ 100,000 of Class A Common Stock and the LLC Units for the period from November 8, 2022 to November 8, 2023 (the “Fiscal 2023 Repurchase Program”).

During fiscal year 2024, under the Fiscal 2023 Repurchase Program, the Company repurchased 261,962 shares of Class A Common Stock for $ 12,526 in cash including related fees and expenses.

The Fiscal 2023 Repurchase Program expired on November 8, 2023.

On October 26, 2023, the board of directors of the Company authorized a stock repurchase program for the repurchase of up to $ 100,000 of Class A Common Stock and LLC Units for the period from November 8, 2023 to November 8, 2024 (the "Fiscal 2024 Repurchase Program").

During fiscal year 2024, under the Fiscal 2024 Repurchase Program, the Company repurchased 437,996 shares of Class A Common Stock for $ 17,317 in cash including related fees and expenses.

As of June 30, 2024, $ 82,683 was available to repurchase shares of Class A Common Stock and LLC Units under the Fiscal 2024 Repurchase Program.

The Fiscal 2023 Repurchase Program expires on November 8, 2023.

Class A Common Stock and Class B Common Stock

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Subject to any rights that may be applicable to any then outstanding preferred stock, the Company's Class A and Class B Common Stock vote as a single class on all matters presented to the Company's stockholders for their vote or approval, except as otherwise provided in the Company's certificate of incorporation or bylaws or required by applicable law.

the Company's Class A and Class B Common Stock do not have cumulative voting rights.

Holders of the Company's Class A and Class B Common Stock do not have cumulative voting rights.

Except in respect of matters relating to the election and removal of directors on the Company's board of directors and as otherwise provided in the Company's certificate of incorporation, the Company's bylaws, or as required by law, all matters to be voted on by the Company's stockholders must be approved by a majority of the shares present in person or by proxy at the meeting and entitled to vote on the subject matter.

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The Company's board of directors may also designate the rights, preferences and privileges of the holders of each such series of preferred stock, any or all of which may be greater than or senior to those granted to the holders of common stock.

Though the actual effect of any such issuance on the rights of the holders of common stock will not be known until the Company's board of directors determines the specific rights of the holders of preferred stock, the potential effects of such an issuance include:

Though the actual effect of any such issuance on the rights of the holders of common stock will not be known until the

Company's board of directors determines the specific rights of the holders of preferred stock, the potential effects of such an issuance include:

• diluting the voting power of the holders of common stock;

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Holders of LLC Units do not have voting rights under the LLC Agreement.

Further, the LLC and the pre-IPO owners entered into the Exchange Agreement under which (subject to the terms of the Exchange Agreement) they have the right to exchange their LLC Units for shares of the Company's Class A Common Stock on a one -for-one basis, subject to customary conversion rate adjustments for stock splits, stock dividends and reclassifications, or at the Company's option, except in the event of a change in control, for a cash payment equal to the market value of the Class A

Common Stock.

As of June 30, 2024, the Company held 20,181,542 LLC Units, representing a 98.4 % economic interest in the LLC, while non-controlling LLC Unit holders held 321,419 LLC Units, representing a 1.6 % interest in the LLC.

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On November 3, 2020, under the Incentive Plan, the Company granted to key employees a target amount of approximately 18,000 restricted stock awards with a performance condition.

The number of shares that will ultimately be issued, if any, is based on the attainment of a specified amount of earnings during the fiscal year ending June 30, 2023.

The number of shares that will ultimately be issued, if any, is

based on the attainment of a specified amount of earnings during the fiscal year ending June 30, 2023.

The maximum number of shares that can be issued if an elevated earnings target is met, adjusted to reflect the forfeiture of shares in connection with the resignation of the Company’s former Chief Financial Officer, is approximately 21,000 .

The actual number of shares issued upon vesting was approximately 14,000 , as the 21,000 shares earned was reduced by an amount of shares withheld to cover taxes.

The original grant date fair value of the awards was estimated to be $ 1,002 , based on a stock price of $ 54.47 .

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The maximum number of shares that can be issued if an elevated TSR target is met, adjusted to reflect the forfeiture of shares in connection with the resignation of the Company’s former Chief Financial Officer, is approximately 28,000 .

The actual number of shares issued upon vesting was approximately 5,000 , net of 20,000 shares not achieved and taxes withheld.

The original grant date fair value of the awards was estimated to be $ 1,293 , which was estimated using a Monte Carlo simulation.

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The Company does not expect these shares to vest based on fiscal year 2024 financial performance.

The original grant date fair value of the awards was estimated to be $ 1,305 , based on a stock price of $ 74.25 .

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On November 3, 2022, under the Incentive Plan, the Company granted to key employees a target amount of approximately 26,000 restricted stock awards with a performance condition.

The number of shares that will ultimately be issued, if any, is based on the attainment of a specified amount of earnings during the fiscal year ending June 30, 2025.

The number of shares that will ultimately be issued, if any, is

based on the attainment of a specified amount of earnings during the fiscal year ending June 30, 2025.

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Compensation costs are recognized over the requisite service period based on probability of achievement in accordance with ASC Topic 718, Compensation—Stock Compensation .

On November 6, 2023, under the Incentive Plan, Malibu Boats, Inc.

granted approximately 79,000 restricted service-based stock units and 35,000 restricted service-based stock awards to employees.

The grant date fair value of these awards was $ 5,116 based on a stock price of $ 44.87 per share on the date of grant.

Approximately 70 % of the awards vest ratably over three years and approximately 30 % of the awards vest ratably over four years .

Stock-based compensation expense attributable to the service-based units and awards is amortized on a straight-line basis over the requisite service period.

On November 6, 2023, under the Incentive Plan, Malibu Boats, Inc.

granted to employees a target amount of approximately 26,000 restricted stock awards with a performance condition.

The number of shares that will ultimately be issued, if any, is based on the attainment of a specified amount of earnings during the fiscal year ending June 30, 2026.

The maximum number of shares that can be issued if an elevated earnings target is met is approximately 39,000 .

The grant date fair value of the awards were estimated to be $ 1,167 , based on a stock price of $ 44.87 .

These shares are not expected to vest based on the expectation that the related performance criteria will not be met.

Compensation costs associated with the performance awards are recognized over the requisite service period based on probability of achievement in accordance with ASC Topic 718, Compensation—Stock Compensation.

On November 6, 2023, under the Incentive Plan, Malibu Boats, Inc.

granted to employees a target amount of approximately 26,000 stock awards with a market condition.

The number of shares that will ultimately be issued, if any, is based on a total shareholder return ("TSR") computation that involves comparing the movement in Malibu Boats, Inc.'s stock price to movement in a market index from the grant date through November 6, 2026.

The maximum number of shares that can be issued if an elevated TSR target is met is approximately 52,000 .

The grant date fair value of the awards were estimated to be $ 1,284 , which is estimated using a Monte Carlo simulation.

The Monte Carlo simulation model utilizes multiple input variables that determine the probability of satisfying the market condition stipulated in the award grant and calculates the fair market value for the stock award.

Compensation costs are recognized over the requisite service period based on probability of achievement in accordance with ASC Topic 718, Compensation—Stock Compensation .

On November 27, 2023, under the Incentive Plan, Malibu Boats, Inc.

granted two awards to its newly-appointed Chief Financial Officer.

The two service-based stock awards include approximately 7,000 units that will vest over two years and approximately 6,000 units that will vest over four years .

The combined grant date fair value of these awards was $ 600 based on a stock price of $ 44.85 per share on the date of grant.

On February 20, 2024, following the announcement of upcoming departure of Malibu’s Chief Executive Officer, Malibu Boats, Inc.

granted a one-time award of 92,699 restricted stock units to its President and 5,330 shares of restricted stock to a non-employee director who was appointed Executive Chair.

The award to the President will vest over four years and has a fair value of $ 4,000 .

The award to the Executive Chair vested immediately and has a fair value of $ 230 .

The fair value of both awards was based on a stock price of $ 43.15 on the date of grant.

The following table presents the number, grant date stock price per share, and weighted-average exercise price per share of the Company’s employee option awards:

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Total outstanding Options at beginning of year 17,973 $ 37.55 49,223 $ 40.46 161,723 $ 32.64

Options granted — — — — — —

Options exercised — — ( 31,250 ) 42.13 ( 112,500 ) 29.22

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The weighted average remaining contractual life of options outstanding and options outstanding and exercisable as of June 30, 2024 was 0.54 years, respectively.

The total intrinsic value of options exercised during the years ended June 30, 2023, 2022 and 2021 was $ 557 , $ 3,751 and $ 322 , respectively.

The total intrinsic value of options outstanding and options outstanding and exercisable at June 30, 2023 was $ 379 , respectively.

The total intrinsic value of options exercised during the years ended June 30, 2024, 2023 and 2022 was zero , $ 557 and $ 3,751 , respectively.

The total intrinsic value of options outstanding and options outstanding and exercisable at June 30, 2024 was zero , respectively.

The total intrinsic values are based on the Company’s closing stock price on the last trading day of the applicable year for in-the-money options.

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If dividends are paid by the Company to its stockholders, directors would be entitled to receive an equal number of restricted stock units based on their proportional interest.

For the fiscal year ended June 30, 2023, the Company issued 2,105 shares of Class A Common Stock and 20,643 restricted stock units with a weighted-average grant date fair value of $ 52.45 to its non-employee directors for their services as directors pursuant to the Incentive Plan.

For the fiscal year ended June 30, 2024, the Company issued 12,130 shares of Class A Common Stock, 13,429 restricted stock units and 5,330 shares of restricted stock with a weighted-average grant date fair value of $ 45.80 to its non-employee directors for their services as directors pursuant to the Incentive Plan.

10 unchanged sentences

As of June 30, 2024, the total unrecognized compensation cost related to nonvested, share-based compensation was 13,832 , which the Company expects to recognize over a weighted-average period of 2.6 years.

Stock compensation expense attributable to all of the Company's equity awards was $ 5,894 , $ 6,342 and $ 5,581 for fiscal years 2023, 2022 and 2021, respectively, is included in general and administrative expense in the Company's consolidated statements of operations and comprehensive income.

Stock compensation expense attributable to all of the Company's equity awards was $ 4,935 , $ 5,894 and $ 6,342 for fiscal years 2024, 2023 and 2022, respectively, is included in general and administrative expense in the Company's consolidated statements of operations and comprehensive (loss) income.

The cash flow effects resulting from all equity awards were reflected as noncash operating activities.

During fiscal years 2024, 2023 and 2022, the Company withheld 33,877 , 54,909 and 27,420 shares at an aggregate cost of $ 1,489 , $ 3,135 and $ 2,058 , respectively, as permitted by the applicable equity award agreements, to satisfy employee tax withholding requirements for employee share-based equity awards that have vested.

Net Earnings Per Share

Basic net income per share of Class A Common Stock is computed by dividing net income attributable to the Company's earnings by the weighted average number of shares of Class A Common Stock outstanding during the period.

The weighted average number of shares of Class A Common Stock outstanding used in computing basic net income per share includes fully vested restricted stock units awarded to directors that are entitled to participate in distributions to common shareholders through receipt of additional units of equivalent value to the dividends paid to Class A Common Stock holders.

Diluted net income per share of Class A Common Stock is computed similarly to basic net income per share except the weighted average shares outstanding are increased to include additional shares from the assumed exercise of any common stock equivalents using the treasury method, if dilutive.

Net (Loss) Earnings Per Share

Basic net (loss) income per share of Class A Common Stock is computed by dividing net (loss) income attributable to the Company's earnings by the weighted average number of shares of Class A Common Stock outstanding during the period.

The weighted average number of shares of Class A Common Stock outstanding used in computing basic net (loss) income per share includes fully vested restricted stock units awarded to directors that are entitled to participate in distributions to common shareholders through receipt of additional units of equivalent value to the dividends paid to Class A Common Stock holders.

Diluted net (loss) income per share of Class A Common Stock is computed similarly to basic net (loss) income per share except the weighted average shares outstanding are increased to include additional shares from the assumed exercise of any common stock equivalents using the treasury method, if dilutive.

The Company’s LLC Units and non-qualified stock options are considered common stock equivalents for this purpose.

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Stock awards with a market condition that are based on the performance of the Company's stock price in relation to a market index over a specified time period are only included in the computation of diluted earnings per share to the extent that the shares would be issued based on the current market price of the Company's stock in relation to the market index, and only if the effect would be dilutive.

Basic and diluted net income per share of Class A Common Stock has been computed as follows (in thousands, except share and per share amounts):

Basic and diluted net (loss) income per share of Class A Common Stock has been computed as follows (in thousands, except share and per share amounts):

Fiscal Year Ended June 30,

2024 2023 2022

Net income attributable to Malibu Boats, Inc.

Net (loss) income attributable to Malibu Boats, Inc.

$ ( 55,912 ) $ 104,513 $ 157,632

Shares used in computing basic net income per share:

Shares used in computing basic net (loss) income per share:

Weighted-average Class A Common Stock 20,167,169 20,245,980 20,511,571

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Basic weighted-average shares outstanding 20,439,449 20,501,844 20,749,237

Basic net income per share $ 5.10 $ 7.60 $ 5.29

Net income attributable to Malibu Boats, Inc.

Basic net (loss) income per share $ ( 2.74 ) $ 5.10 $ 7.60

Net (loss) income attributable to Malibu Boats, Inc.

$ ( 55,912 ) $ 104,513 $ 157,632

Shares used in computing diluted net income per share:

Shares used in computing diluted net (loss) income per share:

Basic weighted-average shares outstanding 20,439,449 20,501,844 20,749,237

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20,439,449 20,641,173 20,986,256

Diluted net income per share $ 5.06 $ 7.51 $ 5.23

1 The Company excluded 516,205 , 686,178 , and 685,271 potentially dilutive shares from the calculation of diluted net income per share for the fiscal year ended June 30, 2023, 2022, and 2021, respectively, as these units would have been antidilutive.

Diluted net (loss) income per share $ ( 2.74 ) $ 5.06 $ 7.51

1 The Company excluded 612,277 , 516,205 , and 686,178 potentially dilutive shares from the calculation of diluted net (loss) income per share for the fiscal year ended June 30, 2024, 2023, and 2022, respectively, as these units would have been antidilutive.

The shares of Class B Common Stock do not share in the earnings or losses of Malibu Boats, Inc.

and are therefore not included in the calculation.

Accordingly, basic and diluted net income per share of Class B Common Stock has not been presented.

Accordingly, basic and diluted net (loss) income per share of Class B Common Stock has not been presented.

Commitments and Contingencies

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Repurchases and subsequent sales are recorded as a revenue transaction.

The net difference between the repurchase price and the resale price is recorded against the loss reserve and presented in cost of sales in the accompanying consolidated statements of operations and comprehensive income.

For fiscal year 2024, the company repurchased 17 units under repurchase agreements.

Additionally, during the period from July 1, 2024 to August 29, 2024, we repurchased 19 units totaling

$ 2.5 million subject to the Company's repurchase agreement with M&T Bank, the lender under the floor financing plan for Tommy's Boats.

With respect to boats not subject to the repurchase agreement, the bankruptcy trustee has retained Gordon Brothers to sell the remaining inventory as part of liquidation sales that are ongoing.

We have been in discussions with the trustee regarding the inventory being liquidated.

For fiscal year 2023 and 2022, the Company did no t repurchase any units under its repurchase agreements.

Accordingly, the Company did not carry a reserve for repurchases as of June 30, 2023 and 2022, respectively.

The Company did not carry a reserve for repurchases as of June 30, 2024 and 2023, respectively.

The Company has collateralized receivables financing arrangements with a third-party floor plan financing provider for European dealers.

Under terms of these arrangements, the Company transfers the right to collect a trade receivable to the financing provider in exchange for cash but agrees to repurchase the receivable if the dealer defaults.

Since the transfer of the

receivable to the financing provider does not meet the conditions for a sale under ASC Topic 860, Transfers and Servicing , the Company continues to report the transferred trade receivable in other current assets with an offsetting balance recorded as a secured obligation in accrued expenses in the Company's consolidated balance sheets.

Since the transfer of the receivable to the financing provider does not meet the conditions for a sale under ASC Topic 860, Transfers and Servicing , the Company continues to report the transferred trade receivable in other current assets with an offsetting balance recorded as a secured obligation in accrued expenses in the Company's consolidated balance sheets.

As of June 30, 2024 and 2023 , the Company had no financing receivables recorded in other current assets and accrued expenses related to these arrangements.

Roane County Property Purchase

On March 28, 2023, the Company entered into a Purchase and Sale Agreement (the “Purchase Agreement”) to purchase certain real property, improvements and other assets from the seller for a cash purchase price of approximately $ 33,300 .

As of June 30, 2023, the Company had deposited approximately $ 7,800 in escrow pursuant to the Purchase Agreement.

On July 25, 2023, the transaction closed and the Company paid the remaining $ 25,500 balance of the purchase price.

The Company expects to incur additional capital expenditures of approximately $ 15,000 to make changes to the facility to meet its operational needs.

Contingencies

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Malibu Boats West, Inc., et.

al., Superior Court of Rabun County, Georgia, Civil Action Case No.

al., Superior Court of Rabun County, Georgia, Civil Action Case

2016-CV-0114-C (the "Batchelder I Matter"), brought by, among others, Stephan Paul Batchelder and Margaret Mary Batchelder as Administrators of the Estate of Ryan Paul Batchelder, deceased (“Batchelder I Plaintiffs”).

The Batchelder I

Plaintiffs also sued the manufacturer of the boat at issue in the case, Malibu Boats West, Inc.

The Batchelder I Plaintiffs also sued the manufacturer of the boat at issue in the case, Malibu Boats West, Inc.

West is not, and has never been, a subsidiary of MBI or Boats LLC but was a separate legal entity whose assets were purchased by Boats LLC in 2006.

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All conditions for releasing the $ 60,000 placed in the escrow account have been satisfied.

MBI and its subsidiaries, including Boats LLC, maintain liability insurance applicable to the Batchelder Matters described above with coverage up to $ 26,000 .

As of June 30, 2024, the Company had received approximately $ 21,000 in insurance coverage proceeds, subject in certain cases to reservations of rights by the insurance carriers.

The Company contends that the insurance carriers are responsible for the entirety of the $ 100,000 settlement amount and related expenses, and therefore, the insurers’ payments to date are well below what they should have tendered to Boats LLC.

Accordingly, on July 3, 2023, Boats LLC filed a complaint against Federal Insurance Company (a Chubb subsidiary) and Starr Indemnity & Liability Company alleging that the insurers unreasonably failed to comply with their obligations by refusing, negligently, and in bad faith, to settle covered claims within their available policy limits prior to trial.

On April 8, 2024, the court dismissed Starr, noting that only Chubb had the contractual right and duty to settle the Batchelder matters prior to trial.

The Court subsequently granted the Company's motion for partial summary judgement, which precludes Chubb from apportioning liability to Starr.

The Company intends to vigorously pursue its claims against Chubb to recover the full $ 100,000 settlement amount and expenses (less any monies already tendered without reservation by the carriers).

However, the Company cannot predict the outcome of such litigation.

Tommy's Boats and Matthew Borisch

On April 10, 2024, fifteen dealerships operated under common control of Tommy’s Boats (“Tommy’s Boats”) filed a complaint against MBI and its indirect subsidiary Boats LLC in the United States District Court for the Eastern District of Tennessee (Case 3:24-cv-00166).

The complaint alleges that MBI and Boats LLC breached obligations under dealership agreements with Tommy’s Boats, quantum meruit, unjust enrichment, promissory estoppel and intentional and negligent misrepresentations relating to the parties’ commercial relationship.

Tommy’s Boats is seeking monetary damages.

Boats LLC has taken possession of 19 new model year 2024 boats according to a repurchase agreement with M&T Bank, the floor financing lender to Tommy’s Boats.

On July 3, 2024, the trustee appointed in the Chapter 11 bankruptcy cases for Tommy's Boats voluntarily dismissed without prejudice the claims filed by Tommy's Boats.

Pursuant to an order of the bankruptcy court, the Company has agreed to cooperate in good faith to mediate with the Chapter 11 trustee.

On August 16, 2024, Matthew Borisch, the principal owner of Tommy’s Boats, filed a complaint against MBI, Boats LLC, and Jack Springer in the United States District Court for the Eastern District of Tennessee (Case 3:24-cv-00339), alleging similar allegations to those of the dismissed complaint against MBI and Boats LLC filed by Tommy’s Boats.

The Company is unable to provide any reasonable evaluation of the likelihood that a loss will be incurred or any reasonable estimate of the range of possible loss.

Securities Class Action Lawsuit

On April 29, 2024, stockholder Seongjae Yoon, individually and on behalf of all others similarly situated, (the “Securities Plaintiff”) filed a complaint against MBI and Jack Springer, Bruce Beckman, David Black, and Wayne Wilson as current and former officers of the Company in the United States District Court for the Southern District of New York (Case 1:24-cv-03254).

The complaint alleges violations of the Securities Exchange Act of 1934, as amended, in connection with allegedly false and misleading statements made by the Company related to its business, operations, and prospects during the period from November 4, 2022 through April 11, 2024.

The complaint alleges, among other things, that the Company violated Sections 10(b) and 20(a) of the Exchange Act and SEC Rule 10b-5 by not disclosing alleged material adverse facts related to the Company’s inventory and relationship with one of its former dealers, Tommy’s Boats, and accordingly, that any positive statements made during the class period about the Company's business, operations, and prospects were materially misleading and/or lacked a reasonable basis.

The Company intends to vigorously defend itself against claims alleged in this securities class action.

The Company is unable to provide any reasonable evaluation of the likelihood that a loss will be incurred or any reasonable estimate of the range of possible loss.

Customer Class Action Lawsuit

On May 31, 2024, a customer filed a class action complaint against MBI and Boats LLC in the United States District Court for the District of Delaware.

(Case 1:24-cv-00648).

The complaint, which purports to be filed on behalf of a nationwide class of customers, alleges violation of common law, the Magnusson-Moss Warranty Act, breach of express warranty, breach of implied warranty, and violation of California’s Consumer Legal Remedies Act based on guidance issued to customers of certain older model boats related to riding in the bow area of those boats.

The Company intends to vigorously defend itself.

The Company is unable to provide any reasonable evaluation of the likelihood that a loss will be incurred or any reasonable estimate of the range of possible loss.

Related Party Transactions

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For the fiscal years ended June 30, 2024, 2023 and 2022, $ 484 , $ 409 and $ 385 , respectively, was paid to these directors in both cash and equity for their services.

Of the amount paid, $ 74 and $ 74 was a prepayment for services through the 2023 and 2022 annual meetings for both of the years ended June 30, 2023 and 2022, respectively.

Of the amount paid, zero and $ 74 was a prepayment for services through the 2024 and 2023 annual meetings for both of the years ended June 30, 2024 and 2023, respectively.

Segment Reporting

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Depreciation and amortization 9,714 13,814 9,461 32,989

Net income before provision for income taxes 40,157 57,748 43,586 141,491

Net (loss) income before (benefit) provision for income taxes ( 11,589 ) ( 62,208 ) 16,012 ( 57,785 )

Capital expenditures 3,504 11,378 61,080 75,962

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Fiscal Year Ended June 30, 2022

Malibu Saltwater Fishing 1

Malibu Saltwater Fishing Cobalt Total

Net sales $ 607,543 $ 341,930 $ 265,404 $ 1,214,877

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Total assets $ 264,551 $ 384,684 $ 202,091 $ 851,326

1 Represents the results of Maverick Boat Group since the acquisition on December 31, 2020.

Quarterly Financial Reporting (Unaudited)

Quarter Ended Fiscal Year Ended

June 30, 2023

June 30, 2023 March 31, 2023 December 31, 2022 September 30, 2022

Net sales $ 372,303 $ 375,119 $ 338,732 $ 302,211 $ 1,388,365

Gross profit 102,462 98,574 75,654 74,605 351,295

Operating (loss) income ( 22,646 ) 70,263 48,684 48,483 144,784

Net (loss) income ( 18,043 ) 53,452 36,396 36,105 107,910

Net (loss) income attributable to non-controlling interest ( 623 ) 1,564 1,234 1,222 3,397

Net (loss) income attributable to Malibu Boats, Inc.

$ ( 17,420 ) $ 51,888 $ 35,162 $ 34,883 $ 104,513

Basic net (loss) income per share $ ( 0.86 ) $ 2.53 $ 1.73 $ 1.70 $ 5.10

Diluted net (loss) income per share $ ( 0.86 ) $ 2.51 $ 1.72 $ 1.69 $ 5.06

Quarter Ended Fiscal Year Ended

June 30, 2022

June 30, 2022 March 31, 2022 December 31, 2021 September 30, 2021

Net sales $ 353,206 $ 344,287 $ 263,887 $ 253,497 $ 1,214,877

Gross profit 89,627 97,121 63,551 59,752 310,051

Operating income 65,411 71,537 40,187 36,688 213,823

Net income 49,685 54,833 30,979 27,933 163,430

Net income income attributable to non-controlling interest 1,766 1,955 1,088 989 5,798

Net income attributable to Malibu Boats, Inc.

$ 47,919 $ 52,878 $ 29,891 $ 26,944 $ 157,632

Basic net income per share $ 2.34 $ 2.54 $ 1.43 $ 1.29 $ 7.60

Diluted net income per share $ 2.31 $ 2.51 $ 1.41 $ 1.28 $ 7.51

Subsequent Event

Batchelder Payments

As discussed above, in connection with the settlement of the Batchelder Matters, in July 2023, Malibu Boats, Inc., or Boats LLC, as the case may be, paid (or caused to be paid) to the Batchelder Plaintiffs and their agents a total of $ 100,000 , of which (a) $ 40,000 was paid to the Batchelder Plaintiffs and their agents promptly following the execution of the Settlement Agreement and (b) $ 60,000 was placed in an escrow account and held by the Escrow Agent pursuant to the terms of an Escrow Agreement.

All conditions for releasing the $ 60,000 placed in the escrow account have been satisfied.

Insurance Litigation

Malibu Boats, Inc.

and its subsidiaries, including Boats LLC, maintain liability insurance applicable to the Batchelder Matters described above with coverage up to $ 26,000 .

As of August 24, 2023, the Company had received approximately $ 21,000 in insurance coverage proceeds, subject in certain cases to reservations of rights by the insurance carriers.

Accordingly, on July 3, 2023, Boats LLC filed a complaint against Federal Insurance Company and Starr Indemnity & Liability Company alleging that the insurers unreasonably failed to comply with their obligations by refusing, negligently, and in bad faith, to settle covered claims within their available policy limits prior to trial.

The Company intends to vigorously pursue its claims against its insurers to recover the full $ 100,000 settlement amount and expenses (less any monies already tendered without reservation by the carriers).

However, the Company cannot predict the outcome of such litigation.

Borrowing under Revolving Credit Facility

On July 7, 2023, the Company borrowed $ 75,000 under the revolving credit facility, with $ 273,422 remaining available for borrowing.

The Company utilized certain of the funds borrowed under the revolving credit facility to make payments relating to the Batchelder Matters, as described herein.

As of August 24, 2023, the Company had $ 65,000 outstanding under its revolving credit facility.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data