What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2023-08-30 compared with 2022-09-09 · 406 added, 295 removed, 586 unchanged (54% of the section changed)

5 unchanged sentences

Based on this evaluation, our chief executive officer and chief financial officer have concluded that our disclosure controls and procedures were effective as of June 30, 2023.

Management’s Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act.

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OTHER INFORMATION

On September 2, 2022, we completed the sale of our NauticStar business to certain affiliates of Iconic Marine Group, LLC (“Purchaser”) pursuant to the terms of an Asset Purchase Agreement, dated September 2, 2022 (the “Purchase Agreement”), by and between Nautic Star, LLC (“Seller”) and Purchaser.

Pursuant to the terms of the Purchase Agreement, Seller sold to Purchaser substantially all of the assets of NauticStar, including, among other things, all of the issued and outstanding membership interests in its wholly-owned subsidiary NS Transport, LLC, all owned real property, equipment, inventory, intellectual property and accounts receivable, and Purchaser assumed certain liabilities of NauticStar, including, among other things, product liability and warranty claims.

In connection with the sale, we expect to record a loss on sale between $20.0 million to $23.0 million.

Director and Officer Rule 10b5-1 Trading Arrangements

During the three months ended June 30, 2023 , none of our directors or "officers" (as defined in Rule 16a-1(f) under the Exchange Act) adopted , modified or terminated "Rule 10b5-1 trading arrangements" or "non-Rule 10b5-1 trading arrangements" (each as defined in Item 408 of Regulation S-K).

DISCOLSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

Not applicable.

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.

DIRECTORS, EXECUTIVE OFF ICERS AND CORPORATE GOVERNANCE.

The information required by this Item 10 will be included in the Proxy Statement and is incorporated herein by reference.

EXECUTIVE COMPENSATION

EXECUTI VE COMPENSATION

The information required by this Item 11 will be included in the Proxy Statement and is incorporated herein by reference.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWN ERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The information required by this Item 12 will be included in the Proxy Statement and is incorporated herein by reference.

CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS, AND DIRECTOR INDEPENDENCE

CERTAIN RELATIONSHIPS AND RELATED PA RTY TRANSACTIONS, AND DIRECTOR INDEPENDENCE

The information required by this Item 13 will be included in the Proxy Statement and is incorporated herein by reference.

PRINCIPAL ACCOUNTANT FEES AND SERVICES.

PRINCIPAL ACCOUN TANT FEES AND SERVICES.

The information required by this Item 14 will be included in the Proxy Statement and is incorporated herein by reference.

EXHIBITS, FINANCIAL STATEMENT SCHEDULES.

EXHIBITS, FINANC IAL STATEMENT SCHEDULES.

Documents included in this report:

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Consolidated Statements of Operations

Consolidated Statements of Stockholders' Equity

Consolidated Statements of Equity

Consolidated Statements of Cash Flows

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The following documents are filed as a part of this annual report on Form 10-K or are incorporated by reference to previous filings, if so indicated:

Membership Interest Purchase Agreement, dated September 10, 2018 among MCBC Holdings, Inc., all of the Members of Crest Marine, LLC and Patrick Fenton, as Representative for the Members of Crest Marine, LLC

Amended and Restated Certificate of Incorporation of MCBC Holdings, Inc.

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Common stock certificate of MasterCraft Boat Holdings, Inc.

Description of Registrant’s Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934

MCBC Holdings, Inc.

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Non-Employee Director Compensation Policy

Employment Agreement between MasterCraft Boat Company, LLC and Timothy M.

Oxley, effective as of July 1, 201 8

Employment Agreement Between Crest Marine, LLC and Patrick May

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Offer Letter, dated December 2, 2019

Offer Letter, dated July 16, 2020

Form of PSU Award Agreement

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Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

September 8, 2022

August 30, 2023

MASTERCRAFT BOAT HOLDINGS, INC.

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Chief Executive Officer (Principal Executive Officer) and Chairman of the Board

September 8, 2022

August 30, 2023

/s/ TIMOTHY M.

Chief Financial Officer (Principal Financial and Accounting Officer), Treasurer and Secretary

September 8, 2022

August 30, 2023

PATRICK BATTLE

Patrick Battle

September 8, 2022

August 30, 2023

/s/ JACLYN BAUMGARTEN

Jaclyn Baumgarten

September 8, 2022

August 30, 2023

/s/ DONALD C.

September 8, 2022

August 30, 2023

/s/ JENNIFER DEASON

Jennifer Deason

September 8, 2022

August 30, 2023

/s/ ROCH LAMBERT

September 8, 2022

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

August 30, 2023

/s/ KAMILAH MITCHELL-THOMAS

Kamilah Mitchell-Thomas

August 30, 2023

R EPO RT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the stockholders and the Board of Directors of MasterCraft Boat Holdings, Inc.

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We have audited the accompanying consolidated balance sheets of MasterCraft Boat Holdings, Inc.

and subsidiaries (the "Company") as of June 30, 2022 and 2021, the related consolidated statements of operations, stockholders' equity, and cash flows, for each of the three years in the period ended June 30, 2022, and the related notes (collectively referred to as the "financial statements").

and subsidiaries (the "Company") as of June 30, 2023 and 2022, the related consolidated statements of operations, equity, and cash flows, for each of the three years in the period ended June 30, 2023, and the related notes (collectively referred to as the "financial statements").

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of June 30, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended June 30, 2023, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of June 30, 2022, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated September 8, 2022, expressed an unqualified opinion on the Company's internal control over financial reporting.

Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated August 30, 2023, expressed an unqualified opinion on the Company's internal control over financial reporting.

Basis for Opinion

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The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Product Warranties — Refer to Notes 1 and 6 to the financial statements

Product Warranties —

Refer to Notes 1 and 8 to the financial statements

Critical Audit Matter Description

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These estimated costs are based upon the number of units sold, historical and anticipated rates of warranty claims, and the cost per claim.

We identified the accrued warranty liability for the MasterCraft brand as a critical audit matter because of the significant judgments made by management to estimate the anticipated rates of warranty claims and cost per claim related to product warranties at the time the product revenue is recognized.

This required a high degree of auditor judgment and an increased extent of effort when performing audit procedures to evaluate the reasonableness of management’s estimates of the rates and costs of future warranty claims.

We identified the accrued warranty liability of $24.6 million for the MasterCraft brand as a critical audit matter because of the significant judgments made by management to estimate the anticipated rates of warranty claims and cost per claim related to product warranties at the time the product revenue is recognized.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the accrued warranty liability for the MasterCraft brand included the following, among others:

We evaluated the design and operating effectiveness of controls over management’s estimation of the accrued warranty liability, including those over historical product warranty claim data and projected future product warranty claims.

We evaluated the accuracy and completeness of the historical product warranty claims as an input to management’s accrued warranty liability calculation.

We evaluated management’s ability to accurately estimate the accrued warranty liability by comparing the accrued warranty liability in the prior year to the actual product warranty claims paid in the current year.

We evaluated the accuracy and completeness of the historical product warranty claims as an input to management’s accrued warranty liability calculation.

We evaluated the completeness of the accrued warranty liability through inquiries of operational and executive management regarding knowledge of known product warranty claims or product issues and evaluated whether they were appropriately considered in the determination of the accrued warranty liability.

We assessed management’s methodology and tested the valuation of the accrued warranty liability by developing an independent expectation for the accrual based on historical and current year warranty claims activity and any known trends in warranty claims or specific product issues, and compared our expectation to the amount recorded by management.

/s/ Deloitte & Touche LLP

Nashville, Tennessee

September 8, 2022

August 30, 2023

We have served as the Company's auditor since 2019.

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We have audited the internal control over financial reporting of MasterCraft Boat Holdings Inc.

and subsidiaries (the “Company”) as of June 30, 2022, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of June 30, 2022, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended June 30, 2022, of the Company and our report dated September 8, 2022, expressed an unqualified opinion on those financial statements.

and subsidiaries (the “Company”) as of June 30, 2023, based on criteria established in Internal Control —

Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of June 30, 2023, based on criteria established in Internal Control —

Integrated Framework (2013) issued by COSO.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended June 30, 2023, of the Company and our report dated August 30, 2023, expressed an unqualified opinion on those financial statements.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Report on Internal Control over Financial Reporting.

Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.

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Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;

and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

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Nashville, Tennessee

September 8, 2022

August 30, 2023

MASTERCRAFT BOAT HOLDINGS, INC.

AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

As of June 30

CONSOLIDATED BA LANCE SHEETS

Dollar amounts in thousands, except per share data)

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Cash and cash equivalents

Accounts receivable, net of allowances of $ 274 and $ 115 , respectively

Income tax receivable

Held-to-maturity securities (Note 4)

Accounts receivable, net of allowance of $ 122 and $ 214 , respectively

Inventories, net (Note 5)

Prepaid expenses and other current assets

Current assets associated with discontinued operations (Note 3)

Total current assets

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Other intangible assets, net (Note 7)

Deferred income taxes (Note 8)

Deferred income taxes

Deferred debt issuance costs, net

Other long-term assets

LIABILITIES AND STOCKHOLDERS' EQUITY

Non-current assets associated with discontinued operations (Note 3)

LIABILITIES AND EQUITY

CURRENT LIABILITIES:

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Current portion of long-term debt, net of unamortized debt issuance costs (Note 9)

Current liabilities associated with discontinued operations (Note 3)

Total current liabilities

Long-term debt, net of unamortized debt issuance costs (Note 9)

Unrecognized tax positions (Note 8)

Unrecognized tax positions

Other long-term liabilities

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COMMITMENTS AND CONTINGENCIES (Note 12)

STOCKHOLDERS' EQUITY:

Common stock, $ .01 par value per share — authorized, 100,000,000 shares;

Common stock, $ .01 par value per share —

authorized, 100,000,000 shares;

issued and outstanding, 17,312,850 shares at June 30, 2023 and 18,061,437 shares at June 30, 2022

Additional paid-in capital

Retained earnings (accumulated deficit)

Total stockholders' equity

Total liabilities and stockholders' equity

Retained earnings

MasterCraft Boat Holdings, Inc.

Noncontrolling interest

Total liabilities and equity

The Notes to Consolidated Financial Statements are an integral part of these consolidated financial statements.

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AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

CONSOLIDATED STATEM ENTS OF OPERATIONS

For the Years Ended June 30

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Amortization of other intangible assets

Impairments (Notes 4 and 5)

Goodwill impairment

Total operating expenses

OPERATING INCOME (LOSS)

OTHER EXPENSE:

OPERATING INCOME

OTHER INCOME (EXPENSE):

Interest expense

Interest income

Loss on extinguishment of debt

INCOME (LOSS) BEFORE INCOME TAX EXPENSE (BENEFIT)

INCOME TAX EXPENSE (BENEFIT)

NET INCOME (LOSS)

INCOME BEFORE INCOME TAX EXPENSE

INCOME TAX EXPENSE

NET INCOME FROM CONTINUING OPERATIONS

LOSS FROM DISCONTINUED OPERATIONS, NET OF TAX (Note 3)

NET INCOME (LOSS) PER SHARE:

Continuing operations

Discontinued operations

Continuing operations

Discontinued operations

WEIGHTED AVERAGE SHARES USED FOR COMPUTATION OF:

Basic earnings (loss) per share

Diluted earnings (loss) per share

Basic earnings per share

Diluted earnings per share

The Notes to Consolidated Financial Statements are an integral part of these consolidated financial statements.

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AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

CONSOLIDATED STATEMENTS OF EQUITY

Retained Earnings

MasterCraft Boat

Holdings, Inc.

Noncontrolling

(Dollar amounts in thousands, except share data)

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Share-based compensation activity

Repurchase and retirement of common stock

Balance at June 30, 2022

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Repurchase and retirement of common stock

Capital contribution from noncontrolling interest

Balance at June 30, 2023

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AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

CONSOLIDATED STATEM ENTS OF CASH FLOWS

For the Years Ended June 30

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CASH FLOWS FROM OPERATING ACTIVITIES:

Net income (loss)

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

Loss from discontinued operations, net of tax

Net income from continuing operations

Adjustments to reconcile net income from continuing operations to net cash provided by operating activities:

Depreciation and amortization

Share-based compensation

Deferred income taxes

Unrecognized tax benefits

Amortization of debt issuance costs

Loss on extinguishment of debt

Deferred income taxes

Goodwill impairment

Changes in certain operating assets and liabilities

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Accrued expenses and other current liabilities

Net cash provided by operating activities of continuing operations

Net cash used in operating activities of discontinued operations

Net cash provided by operating activities

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Purchases of property, plant and equipment

Proceeds from disposal of property, plant and equipment

Purchases of investments

Maturities of investments

Net cash used in investing activities of continuing operations

Net cash used in investing activities of discontinued operations

Net cash used in investing activities

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from issuance of long-term debt

Principal payments on long-term debt

Repurchase and retirement of common stock

Proceeds from issuance of long-term debt

Borrowings on revolving credit facility

Principal payments on revolving credit facility

Repurchase and retirement of common stock

Net cash used in financing activities

Net cash used in financing activities of continuing operations

NET CHANGE IN CASH AND CASH EQUIVALENTS

CASH AND CASH EQUIVALENTS — BEGINNING OF PERIOD

CASH AND CASH EQUIVALENTS — END OF PERIOD

CASH AND CASH EQUIVALENTS —

BEGINNING OF PERIOD

CASH AND CASH EQUIVALENTS —

END OF PERIOD

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:

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Cash payments for income taxes

SIGNIFICANT NON-CASH INVESTING AND FINANCING ACTIVITIES:

NON-CASH INVESTING AND FINANCING ACTIVITIES:

Capital expenditures in accounts payable and accrued expenses

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AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

N OTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unless otherwise noted, dollars in thousands, except per share data and per unit data)

SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation and Principles of Consolidation — The accompanying financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“U.S.

Basis of Presentation and Principles of Consolidation —

The accompanying financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“U.S.

GAAP”).

The consolidated financial statements include the accounts of MasterCraft Boat Holdings, Inc.

(“Holdings”) and its wholly owned subsidiaries from the dates of their acquisitions.

Holdings and its subsidiaries collectively are referred to herein as the “Company.” All significant intercompany accounts and transactions have been eliminated in consolidation.

(“Holdings”) and its wholly owned subsidiaries from the dates of their acquisitions.

Holdings and its subsidiaries collectively are referred to herein as the “Company.”

All significant intercompany accounts and transactions have been eliminated in consolidation.

Holdings has no independent operations and no material assets, other than its wholly owned equity interests in its subsidiaries, as of June 30, 2023 and 2022, and no material liabilities.

As of June 30, 2022 and 2021, Holdings had no material contingencies, long-term obligations, or guarantees other than a guarantee of its subsidiaries’ long-term debt (see Note 7).

Use of Estimates — The preparation of the Company’s consolidated financial statements in conformity with U.S.

As of June 30, 2023 and 2022 , Holdings had no material contingencies, long-term obligations, or guarantees other than a guarantee of its subsidiaries’

long-term debt (see Note 9).

Discontinued Operations —

On September 2, 2022, the Company sold substantially all of the assets and liabilities of its NauticStar segment.

The disposal represented the Company's exit from the saltwater and deck boat category, a strategic shift that has a significant effect on the Company's operations and financial results, and as such, qualifies for reporting as discontinued operations.

The NauticStar segment results, for the periods presented, are reflected in our consolidated statements of operations and consolidated statements of cash flows as discontinued operations.

Additionally, the related assets and liabilities associated with the discontinued operations are classified as discontinued operations in our consolidated balance sheet for the prior period presented (see Note 3).

Unless otherwise indicated, the financial disclosures and related information provided herein relate to our continuing operations and we have recast prior period amounts to reflect discontinued operations.

Reclassifications —

Certain historical amounts have been reclassified in these consolidated financial statements and the accompanying notes herewith to conform to current presentation.

Use of Estimates —

The preparation of the Company’s consolidated financial statements in conformity with U.S.

GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses and related disclosures.

The Company bases these estimates on historical results and various other assumptions believed to be reasonable.

The Company’s most significant financial statement estimates include impairment of goodwill and indefinite-lived intangible assets, warranty liability, unrecognized tax positions, inventory repurchase contingent obligations, and impairment of long-lived assets and intangible assets subject to amortization.

Actual results could differ from those estimates.

Reclassifications — Certain historical amounts have been reclassified in these notes to the consolidated financial statements to conform to current presentation.

Change in Reportable Segments — Beginning with the first quarter of fiscal 2022, our chief operating decision maker (“CODM”) began to manage our business, allocate resources, and evaluate performance based on the changes that were made in the Company’s management structure in connection with the transition of Aviara production to our Merritt Island, Florida facility.

As a result, the Company realigned its reportable segments to MasterCraft, Crest, NauticStar, and Aviara.

The Company has recast segment information for all prior periods presented.

Refer to Note 12 – Segment Information for further information on the Company’s reportable segments.

Revenue Recognition — The Company’s revenue is derived primarily from the sale of boats and trailers, marine parts, and accessories to its independent dealers.

Revenue Recognition —

The Company’s revenue is derived primarily from the sale of boats and trailers, marine parts, and accessories to its independent dealers.

The Company recognizes revenue when obligations under the terms of a contract are satisfied and control over promised goods is transferred to a customer.

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Dealers earn wholesale rebates based on purchase volume commitments and achievement of certain performance metrics.

The Company estimates the amount of wholesale rebates based on historical achievement, forecasted volume, and assumptions regarding

dealer behavior.

The Company estimates the amount of wholesale rebates based on historical achievement, forecasted volume, and assumptions regarding dealer behavior.

Rebates that apply to boats already in dealer inventory are referred to as retail rebates.

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Contract Liabilities

A contract liability is created when customers prepay for goods prior to the Company transferring control of those goods to the customer.

A contract liability is created when customers prepay for goods or services prior to the Company transferring control of those goods or services to the customer.

The contract liability is reduced once control of the goods is transferred to the customer.

The difference between the opening and closing balances of the Company’s contract liabilities primarily results from the timing difference between the Company’s performance and the point at which it receives pre-payment from the customer.

Other Revenue Recognition Matters

Dealers generally have no right to return unsold boats.

Occasionally, the Company may accept returns in limited circumstances and at the Company’s discretion under its warranty policy.

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

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The Company accrues the estimated fair value of this obligation based on the age of inventory currently under floor plan financing and estimated credit quality of dealers holding the inventory.

Inputs used to estimate this fair value include significant unobservable inputs that reflect the Company’s assumptions about the inputs that market participants would use and, therefore, this liability is classified within Level 3 of the fair value hierarchy.

The Company has excluded sales and other taxes assessed by a governmental authority in connection with revenue-producing activities from the determination of the transaction price for all contracts.

The Company has not adjusted net sales for the effects of a significant financing component because the period between the transfer of the promised goods and the customer's payment is expected to be one year or less.

Accounts Receivable — Accounts receivable represents amounts billed to customers under credit terms customary in its industry.

Accounts Receivable —

Accounts receivable represents amounts billed to customers under credit terms customary in its industry.

The Company normally does not charge interest on its accounts receivable.

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Amounts recorded as bad debt expense, write-offs, and recoveries were not material for the years ended June 30, 2023, 2022, and 2021 .

Cash and Cash Equivalents — The Company considers all highly-liquid investments with an original maturity of three months or less to be cash and cash equivalents.

The Company’s cash deposits may at times exceed federally insured amounts.

The Company had no cash equivalents at June 30, 2022 and 2021.

Concentrations of Credit and Business Risk — Financial instruments that potentially subject the Company to concentrations of credit risk primarily consist of trade receivables.

Credit risk on trade receivables is mitigated as a result of the Company’s use of trade letters of credit, dealer floor plan financing arrangements, and the geographically diversified nature of the Company’s customer base.

Cash and Cash Equivalents —

The Company considers all highly-liquid investments with an original maturity of three months or less to be cash and cash equivalents.

The Company's cash and cash equivalents include cash deposits and money market funds.

The Company’s cash deposits may at times exceed federally insured amounts.

Held-to-Maturity Securities —

The Company invests excess cash balances in short-term debt securities, such as government-sponsored securities, and/or corporate bonds.

The Company accounts for its investments in debt securities in accordance with Accounting Standard Codification ("ASC") 320, Investments —

Debt and Equity Securities .

We classify our investments in debt securities based on the facts and circumstances present at the time of purchase of the securities.

We subsequently reassess the appropriateness of that classification at each reporting date.

As of June 30, 2023, all of our investments in debt securities were classified as held-to-maturity and are due to mature within one year (see Note 4).

Inputs used to estimate the fair value of our investments include significant other observable inputs and, therefore, are classified within Level 2 of the fair value hierarchy .

Concentrations of Credit and Business Risk —

Financial instruments that potentially subject the Company to concentrations of credit risk primarily consist of trade receivables.

Supplier Concentrations

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During the years ended June 30, 2023, 2022, and 2021 , the Company purchased all engines for its MasterCraft performance sport boats under a supply agreement with a single vendor.

Total purchases from this vendor were $ 45.0 million, $ 40.6 million, and $ 27.6 million for the years ended June 30, 2022, 2021, and 2020, respectively.

During the years ended June

30, 2022, 2021, and 2020, the Company purchased outboard engines for its Aviara boats and a majority of the engines for its Crest boats under a supply agreement with a single vendor .

Total purchases for all segments from this vendor were $ 47.6 million, $ 45.0 million, and $ 40.6 million for the years ended June 30, 2023, 2022, and 2021, respectively.

During the years ended June 30, 2023, 2022, and 2021 , the Company purchased outboard engines for its Aviara boats and a majority of the engines for its Crest boats under a supply agreement with a single vendor.

Total purchases from this vendor were $ 31.0 million, $ 34.0 million, and $ 22.7 million for the years ended June 30, 2023, 2022, and 2021 , respectively.

During the years ended June 30, 202 2 , 202 1 , and 20 20 , the Company purchased a majority of engines for its NauticStar boats under a supply agreement with one vendor.

Total purchases from this vendor were $ 21.2 million , $ 14.8 million , and $ 15.2 million for the years ended June 30, 202 2 .

20 2 1 , and 20 20 , respectively .

Inventories — Inventories are valued at the lower of cost or net realizable value and are shown net of an inventory allowance in the consolidated balance sheet.

Inventories —

Inventories are valued at the lower of cost or net realizable value and are shown net of an inventory allowance in the consolidated balance sheet.

Inventory cost includes material, labor, and manufacturing overhead and is determined based on the first-in, first-out (FIFO) method.

Provisions are made as necessary to reduce inventory amounts to their net realizable value or to provide for obsolete inventory.

Property, Plant, and Equipment — Property, plant, and equipment are recorded at historical cost less accumulated depreciation and are depreciated on a straight-line basis over the estimated useful lives.

Repairs and maintenance are charged to operations as incurred, and expenditures for additions and improvements that increase the asset’s useful life are capitalized.

Property, Plant, and Equipment —

Property, plant, and equipment are recorded at historical cost less accumulated depreciation and are depreciated on a straight-line basis over the estimated useful lives.

Repairs and maintenance are charged to operations as incurred, and expenditures for additions and improvements that increase the asset’s useful life are capitalized.

For the years ended June 30, 2023, 2022, and 2021, ranges of asset lives used for depreciation purposes are:

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Furniture and fixtures

Goodwill and Other Intangible Assets — The Company does not amortize goodwill and other purchased intangible assets with indefinite lives, which are primarily related to trade names.

The Company’s intangible assets with finite lives consist primarily of dealer networks and are carried at their estimated fair values at the time of acquisition, less accumulated amortization.

Goodwill and Other Intangible Assets —

The Company does not amortize goodwill and other purchased intangible assets with indefinite lives, which are primarily related to trade names.

The Company’s intangible assets with finite lives consist primarily of dealer networks and are carried at their estimated fair values at the time of acquisition, less accumulated amortization.

Amortization is recognized on a straight-line basis over the estimated useful lives of the respective assets (see Note 7).

Intangible assets that are subject to amortization are evaluated for impairment using a process similar to that used to evaluate long-lived assets described below.

The Company has four reporting units, MasterCraft, Crest, NauticStar, and Aviara, which each relate to an operating segment as described in Note 12.

As of June 30, 2022, all of the Company’s goodwill relates to the MasterCraft reporting unit and all of the Company’s other intangible assets relate to the MasterCraft and Crest reporting units.

The Company has three reporting units, MasterCraft, Crest, and Aviara, which each relate to an operating segment as described in Note 14.

As of June 30, 2023, all of the Company’s goodwill relates to the MasterCraft reporting unit and all of the Company’s other intangible assets relate to the MasterCraft and Crest reporting units.

Goodwill results from the excess of purchase price over the net identifiable assets of businesses acquired.

The Company reviews goodwill for impairment annually, at its fiscal year-end annual impairment testing date, and whenever events or changes in circumstances indicate that the fair value of a reporting unit may be below its carrying value.

As part of the impairment tests, the Company may perform a qualitative, rather than quantitative, assessment to determine whether the fair values of its reporting units are “more likely than not” to be greater than their carrying values.

As part of the impairment tests, the Company may perform a qualitative, rather than quantitative, assessment to determine whether the fair values of its reporting units are “more likely than not”

to be greater than their carrying values.

In performing this qualitative analysis, the Company considers various factors, including the effect of market or industry changes and the reporting units' actual results compared to projected results.

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If the fair value exceeds the carrying value, goodwill is not considered impaired.

If the carrying amount exceeds the fair value then the goodwill is considered impaired and an impairment loss is recognized in an amount by which the carrying value exceeds the reporting unit’s fair value, not to exceed the carrying amount of the goodwill allocated to that reporting unit.

The Company calculates the fair value of its reporting units by considering both the income approach and market approach.

The income approach calculates the fair value of the reporting unit using a discounted cash flow method.

Internally forecasted future cash flows, which the Company believes reasonably approximate market participant assumptions, are discounted using a weighted average cost of capital (“Discount Rate”) developed for each reporting unit.

The Discount Rate is developed using observable market inputs, as well as considering whether or not there is a measure of risk related to the specific reporting unit’s forecasted performance.

Fair value under the market approach is determined for each unit by applying market multiples for comparable public companies to the unit’s financial results.

The key judgements in these calculations are the assumptions used in determining the reporting unit’s forecasted future performance, including revenue growth and operating margins, as well as the perceived risk associated with those forecasts in determining the Discount Rate, along with selecting representative market multiples.

The Company recognized $ 1.1 million and $ 44.4 million in goodwill impairment charges during the years ended June 30, 2022 and 2020, respectively (see Note 5).

The Discount Rate is developed using observable market inputs, as well as

considering whether or not there is a measure of risk related to the specific reporting unit’s forecasted performance.

Fair value under the market approach is determined for each unit by applying market multiples for comparable public companies to the unit’s financial results.

The Company recognized a $ 1.1 million goodwill impairment charge within the Aviara segment during the year ended June 30, 2022 (see Note 7).

Other Intangible Assets

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Intangible assets not subject to amortization are assessed for impairment at least annually and whenever events or changes in circumstances indicate that it is more likely than not that an asset may be impaired.

As part of the annual test, the Company may perform a qualitative, rather than quantitative, assessment to determine whether each trade name intangible asset is “more likely than not” impaired.

As part of the annual test, the Company may perform a qualitative, rather than quantitative, assessment to determine whether each trade name intangible asset is “more likely than not”

In performing this qualitative analysis, the Company considers various factors, including macroeconomic events, industry and market events and cost related events.

If the “more likely than not” criteria is not met, the impairment test for indefinite-lived intangible assets consists of a comparison of the fair value of the intangible asset with its carrying amount.

If the “more likely than not”

criteria is not met, the impairment test for indefinite-lived intangible assets consists of a comparison of the fair value of the intangible asset with its carrying amount.

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

The Company recognized $ 18.5 million and $ 12.0 million in other intangible asset impairment charges during the years ended June, 30, 2022 and 2020, respectively (see Note 5).

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

The Company recognized $ 18.5 million in other intangible asset impairment charges related to the NauticStar reporting unit during the year ended June 30, 2022.

These charges are included in the loss from discontinued operations (see Note 3).

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.

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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 $ 5.3 million in long-lived asset impairment charges during the year ended June 30, 2022, which adjusted the related assets to their estimated fair value (see Notes 4 and 5).

Product Warranties — The Company offers warranties on the sale of certain products for periods of between one and five years .

The Company recognized $ 5.3 million in long-lived asset impairment charges related to the NauticStar reporting unit during the year ended June 30, 2022.

These charges are included in the loss from discontinued operations (see Note 3).

Product Warranties —

The Company offers warranties on the sale of certain products for periods of between one and five years .

These warranties require us or our dealers to repair or replace defective products during the warranty period at no cost to the consumer.

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We also adjust our liability for specific warranty matters when they become known, and the exposure can be estimated.

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

Income Taxes — Income tax expense is the total of the current year income tax due or refundable and the change in deferred tax assets and liabilities.

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

Income Taxes —

Income tax expense is the total of the current year income tax due or refundable and the change in deferred tax assets and liabilities.

The Company records its global tax provision based on the respective tax rules and regulations for the jurisdictions in which it operates.

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The realization of these assets is dependent on generating future taxable income.

A tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur.

A tax position is recognized as a benefit only if it is “more likely than not”

that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur.

The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination.

For tax positions not meeting the “more likely than not” test, no tax benefit is recorded.

For tax positions not meeting the “more likely than not”

test, no tax benefit is recorded.

The Company recognizes interest and/or penalties related to income tax matters in income tax expense.

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such changes to tax liabilities will have an impact on tax expense in the period that such a determination is made.

Research and Development — Research and development expenditures are expensed as incurred.

Research and Development —

Research and development expenditures are expensed as incurred.

Research and development expense for the years ended June 30, 2023, 2022, and 2021 was $ 8.3 million , $ 7.2 million , and $ 5.8 million , respectively, and is included in Operating expenses in the consolidated statements of operations.

Self-Insurance — The Company is self-insured for certain losses relating to product liability claims and employee medical claims.

Self-Insurance —

The Company is self-insured for certain losses relating to product liability claims and employee medical claims.

The Company has purchased stop-loss coverage in order to limit its exposure to any significant levels for these matters.

Losses are accrued based on the Company’s estimates of the aggregate liability for self-insured claims incurred using certain actuarial assumptions followed in the insurance industry and the Company’s historical experience.

Deferred Debt Issuance Costs — Certain costs incurred to obtain financing are capitalized and amortized over the term of the related debt using the effective interest method.

For the years ended June 30, 2021 and 2020, the Company incurred deferred financing costs of $ 0.6 million and $ 0.3 million, respectively.

Deferred Debt Issuance Costs —

Certain costs incurred to obtain financing are capitalized and amortized over the term of the related debt using the effective interest method.

For the year ended June 30, 2021, the Company incurred deferred financing costs of $ 0.6 million.

For the years ended June 30, 2023, 2022, and 2021 , the Company recorded related amortization expense of $ 0.2 million, $ 0.2 million, and $ 0.6 million, respectively.

Additionally, for the year ended June 30, 2021, the Company recognized a loss on early extinguishment of debt of $ 0.7 million related to the debt refinancing in fiscal 2021.

See Note 7 – Long-Term Debt for a discussion on debt issuance costs.

Share-Based Compensation — The Company records amounts for all share-based compensation, including grants of restricted stock awards, performance stock units, and nonqualified stock options over the vesting period in the consolidated statements of operations based on their fair values at the date of the grant.

See Note 9 –

Long-Term Debt for a discussion on debt issuance costs.

Share-Based Compensation —

The Company records amounts for all share-based compensation, including grants of restricted stock awards and performance stock units over the vesting period in the consolidated statements of operations based on their fair values at the date of the grant.

Forfeitures of share-based compensation, if any, are recognized as they occur.

Share-based compensation costs are included in Selling and marketing and General and administrative expense in the consolidated statements of Operations.

See Note 9 – Share-Based Compensation for a description of the Company's accounting for share-based compensation plans.

Advertising — Advertising costs are expensed when the advertising first takes place.

See Note 11 –

Share-Based Compensation for a description of the Company's accounting for share-based compensation plans.

Advertising —

Advertising costs are expensed when the advertising first takes place.

Advertising expense recognized during the years ended June 30, 2023, 2022, and 2021, was $ 5.7 million , $ 4.4 million , and $ 4.4 million , respectively, and is included in Selling and marketing expenses in the consolidated statements of operations.

Fair Value Measurements — The Company measures certain of its financial assets and liabilities at fair value and utilizes the established framework for measuring fair value and disclosing information about fair value measurements.

Fair Value Measurements —

The Company measures certain of its financial assets and liabilities at fair value and utilizes the established framework for measuring fair value and disclosing information about fair value measurements.

Fair value is the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.

There are three levels of inputs that may be used to measure fair values:

Level 1 — Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date.

Level 2 — Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities;

Level 1 —

Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date.

Level 2 —

Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities;

quoted prices in markets that are not active;

or other inputs that are observable or can be corroborated by observable market data.

Level 3 — Significant unobservable inputs that reflect a company’s own assumptions about the inputs that market participants would use in pricing an asset or liability.

Level 3 —

Significant unobservable inputs that reflect a company’s own assumptions about the inputs that market participants would use in pricing an asset or liability.

When measuring fair value, the Company considers the principal or most advantageous market in which it would transact and considers assumptions that market participants would use when pricing the asset or liability.

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When identical assets are not traded in active markets, the Company looks to market observable data for similar assets.

The Company’s most significant financial asset or liability measured at fair value on a recurring basis is its inventory repurchase contingent obligation (see “Revenue Recognition - Other Revenue Recognition Matters” and Note 10).

Non-recurring fair value measurements related to impairments of goodwill and other intangible assets and long-lived assets recorded in fiscal 2020 and 2022 are level 3 measurements.

Fair Value of Financial Instruments — The carrying amounts of the Company’s financial instruments, consisting of cash and cash equivalents, accounts receivable, accounts payable and other liabilities, approximate their estimated fair values due to the relative short-term nature of the amounts.

and Note 12).

The non-recurring fair value measurement related to the impairment of goodwill recorded in fiscal 2022 is a level 3 measurement.

Fair Value of Financial Instruments —

The carrying amounts of the Company’s financial instruments, consisting of cash and cash equivalents, accounts receivable, accounts payable and other liabilities, approximate their estimated fair values due to the relative short-term nature of the amounts.

The carrying amount of debt approximates fair value due to variable interest rates at customary terms and rates the Company could obtain in current financing.

Earnings Per Common Share — Basic earnings per common share reflects reported earnings divided by the weighted average number of common shares outstanding during the reporting period.

Earnings Per Common Share —

Basic earnings per common share reflects reported earnings divided by the weighted average number of common shares outstanding during the reporting period.

Diluted earnings per common share include the effect of dilutive stock options, restricted stock awards, and performance stock units unless inclusion would not be dilutive.

Postretirement Benefits – The Company has a defined contribution plan and makes contributions including matching and discretionary contributions which are based on various percentages of compensation, and in some instances are based on the amount of the employees' contributions to the plans.

Postretirement Benefits —

The Company has a defined contribution plan and makes contributions including matching and discretionary contributions which are based on various percentages of compensation, and in some instances are based on the amount of the employees' contributions to the plans.

The expense related to the defined contribution plan was $ 1.9 million, $ 1.7 million, and $ 1.4 million for the years ended June 30, 2023, 2022, and 2021 , respectively.

Related Party Transactions – In connection with the operations of Crest, the Company made rental payments to Crest Marine Real Estate LLC (“Real Estate”) for a manufacturing facility, storage and office building (the “Crest Facility”).

One of the minority owners of Real Estate is a member of the Crest management team.

The lease was to expire on September 30, 2028 , and was subject to four consecutive, five-year renewal periods.

The lease terms included an option for the Company to purchase the Crest Facility for an amount equal to its fair market value, as determined by appraisals and negotiation between the Company and Real Estate (the “Purchase Option”).

The annual rent under the lease was $ 0.3 million for the first five years of the lease term, and was to increase to $ 0.4 million for the remaining five years.

Additionally, at the beginning of each of the optional renewal terms the rent was to be adjusted based on the change in the Consumer Price Index.

In accordance with the Purchase Option, on October 24, 2019 the Company purchased the Crest Facility for $ 4.1 million.

Crest purchases fiberglass component parts from a supplier whose minority owner had been the same member of the Crest management team that had a minority ownership interest in Real Estate.

On January 31, 2020 this minority ownership interest was divested and this supplier ceased being a related party.

During the period beginning July 1, 2019 and ending January 31, 2020, the Company purchased $ 1.8 million of products from the supplier.

New Accounting Pronouncements Issued And Adopted

Income Taxes — In December 2019, the Financial Accounting Standards Board (the “FASB”) issued ASU 2019-12, Income Taxes (Topic 740):

Income Taxes —

In December 2019, the Financial Accounting Standards Board (the “FASB”) issued ASU 2019-12, Income Taxes (Topic 740):

Simplifying the Accounting for Income Taxes.

ASU 2019-12 simplifies the accounting for income taxes by removing certain exceptions to general principles in Income Taxes (Topic 740).

It also clarifies and amends existing guidance to improve

consistent application.

It also clarifies and amends existing guidance to improve consistent application.

The guidance is effective for fiscal years beginning after December 15, 2020.

The adoption of this standard did not have an impact on the Company’s consolidated financial statements.

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

The adoption of this standard did not have an impact on the Company’s consolidated financial statements.

Reference Rate Reform —

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

Facilitation of the Effects of Reference Rate Reform on Financial Reporting.

ASU 2020-04 provides optional expedients and exceptions for applying U.S.

GAAP to contracts, hedging relationships, and other transactions, subject to meeting certain criteria, that reference London Interbank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued because of reference rate reform.

An entity may apply ASU 2020-04 as of any date from the beginning of an interim period that includes or is subsequent to March 12, 2020 through December 31, 2022.

The adoption of this standard did not have an impact on the Company’s consolidated financial statements.

REVENUE RECOGNITION

The following tables present the Company’s net sales by major product category for each reportable segment.

Year Ended June 30, 2023

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Other revenue

On a consolidated basis, sales outside of North America accounted for 5.0 %, 4.5 %, and 4.8 % of the Company’s net sales for the years ended June 30, 2022, 2021, and 2020, respectively.

For fiscal 2023 , the Company’s top ten dealers accounted for approximately 40 % of our net sales and one of our dealers individually accounted for 14.9 %, or approximately $ 98.6 million.

For fiscal 2022 and 2021, the Company's top ten dealers accounted for approximately 30 % of our net sales and none of our dealers individually accounted for more than 10 % of our total net sales.

On a consolidated basis, sales outside of North America accounted for 4.6 %, 5.5 %, and 5.1 % of the Company’s net sales for the years ended June 30, 2023, 2022, and 2021, respectively.

The Company had no significant concentrations of sales to individual dealers or in countries outside of North America during the years ended June 30, 2023, 2022, and 2021.

Contract Liabilities

As of June 30, 2022, the Company had $ 1.5 million of contract liabilities associated with customer deposits reported in Accrued expenses and other current liabilities on the consolidated balance sheet that are expected to be recognized as revenue during the year ended June 30, 2023.

As of June 30, 2023 , the Company had $ 3.3 million of contract liabilities associated with customer deposits and services reported in Accrued expenses and other current liabilities and Other long-term liabilities on the consolidated balance sheet.

The Company expects to recognize $ 1.5 million of this amount during the year ending June 30, 2024, and $ 1.8 million thereafter.

As of June 30, 2022 , total contract liabilities were $ 1.4 million.

During the year ended June 30, 2023, all of this amount was recognized as revenue.

See Note 1 for a description of the Company’s significant revenue recognition policies and Note 12 for a description of the Company’s segments.

See Note 1 for a description of the Company’s significant revenue recognition policies and Note 14 for a description of the Company’s segments.

DISCONTINUED OPERATIONS

On September 2, 2022, the Company sold its NauticStar business to certain affiliates of Iconic Marine Group, LLC ("Purchaser").

Pursuant to the terms of the purchase agreement, substantially all of the assets of NauticStar were sold, including, among other things, all of the issued and outstanding membership interests in its wholly-owned subsidiary NS Transport, LLC, all owned real property, equipment, inventory, intellectual property and accounts receivable, and the Purchaser assumed substantially all of the liabilities of NauticStar, including, among other things, product liability and warranty claims.

In conjunction with the purchase agreement, the Company entered into a joint employer services agreement and a transition services agreement, which provided certain services to the Purchaser for various periods of time after the sale.

Both agreements ended during the second quarter of fiscal 2023.

These agreements did not a have a material impact on expenditures, earnings, nor cash flows during the year ended June 30, 2023.

Further, the Company entered into the Second Amendment to the Credit Agreement as described further in Note 9 related to waivers of restrictions within the Credit Agreement, as amended, on the sale of assets.

During the year ended June 30, 2023 , the Company recognized a $ 22.5 million loss on sale, subject to further changes based upon a customary working capital adjustment which is currently undergoing arbitration.

The outcome of this matter is uncertain at this time.

Furthermore, assets and liabilities retained, primarily related to certain claims, are subject to change, with activity after the date of sale being recorded as discontinued operations.

The following table summarizes the results of discontinued operations for the following periods:

Years Ended June 30,

COST OF SALES

OPERATING EXPENSES:

Selling, general and administrative

Amortization of other intangible assets

Total operating expenses

OPERATING LOSS

Loss on sale of discontinued operations

LOSS BEFORE INCOME TAX BENEFIT

INCOME TAX BENEFIT

LOSS FROM DISCONTINUED OPERATIONS, NET OF TAX

The following table summarizes the assets and liabilities associated with discontinued operations:

CURRENT ASSETS:

Accounts receivable, net of allowance

Inventories, net

Other current assets

Total current assets classified as discontinued operations

NON-CURRENT ASSETS:

Property, plant and equipment, net

Other long-term assets

Total non-current assets classified as discontinued operations

CURRENT LIABILITIES:

Accounts payable

Accrued expenses and other current liabilities

Total current liabilities classified as discontinued operations

NauticStar Impairment Activity

In the fourth quarter of fiscal year 2022, the NauticStar reporting unit recorded unplanned negative operating results despite ongoing efforts to improve sales volumes and yield more favorable margins, including the engagement of third-party consulting resources.

These results, combined with the outlook for further supply chain disruptions, labor challenges, and higher costs from inflationary pressures, resulted in an impairment trigger in the fourth quarter related to the NauticStar reporting unit’s intangible and other long-lived assets.

Based on our evaluation of projected future cash flows, we concluded that the trade name intangible asset of $ 8.0 million was fully impaired as of June 30, 2022.

We then performed a probability-weighted undiscounted cash flow analysis for the asset group related to the NauticStar reporting unit that considered projected cash flows from continuing to operate the assets through their remaining estimated useful lives, a potential sale, and a potential exit of the business other than through a sale and concluded that the carrying value of the asset group was not recoverable.

The fair value of the finite-lived dealer network intangible asset was estimated using these cash flows, resulting in a full impairment of $ 10.5 million.

The fair value of the fixed assets, which primarily comprised of machinery and equipment, such as tooling, was estimated using liquidation values, resulting in an impairment charge of $ 5.3 million against the asset group’s fixed assets.

As a result of our impairment analyses, we recorded total impairment charges of $ 23.8 million related to the NauticStar reporting unit’s intangible and fixed assets during the year ended June 30, 2022, which are included in Impairments in the results of discontinued operations above.

HELD-TO-MATURITY SECURITIES

During the year ended June 30, 2023, we invested a portion of our cash and cash equivalents in short-term investments, which primarily consist of investment grade corporate bonds and U.S.

treasury bills.

We have the ability and intention to hold these investments until maturity and therefore have classified these investments as held-to-maturity and recorded them at amortized cost and presented them in “Held-to-maturity securities”

on our consolidated balance sheet as of June 30, 2023.

The income recognized for these investments is recorded within Interest income on the Consolidated Statements of Operations.

As of June 30, 2022, there were no outstanding held-to-maturity investments.

The following is a summary of investments as of June 30, 2023:

Carrying Amount

Held-to-maturity securities:

Fixed income securities:

Corporate bonds

treasury bills

Total held-to-maturity securities

Inventories consisted of the following:

As of June 30,

Raw materials and supplies

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Total inventories

Raw materials and supplies have increased to support higher production volumes and to increase safety stock to manage supply chain risk.

PROPERTY, PLANT, AND EQUIPMENT

Property, plant, and equipment, net consisted of the following:

As of June 30,

Land and improvements

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Less accumulated depreciation

Property, plant, and equipment — net

Property, plant, and equipment —

Depreciation expense for the years ended June 30, 2023, 2022, and 2021 was $ 8.6 million, $ 7.7 million, and $ 6.4 million, respectively.

During the fourth quarter of fiscal 2022, the Company identified an indication of impairment related to its NauticStar segment’s property, plant, and equipment.

After performing a recoverability test, the Company recognized an impairment charge of $ 5.3 million, which adjusted the related assets to their estimated fair value.

See Note 5 for further information related to the impairment analysis.

Property, plant, and equipment, net increased mainly due to capital spending focused on tooling, capacity expansion, strategic initiatives, and information technology.

GOODWILL AND OTHER INTANGIBLE ASSETS

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Accordingly, these fair value measurements fall in Level 3 of the fair value hierarchy.

2020 Impairment Charges

In March 2020, the World Health Organization announced that the outbreak of the novel coronavirus had become a worldwide pandemic.

The resulting economic environment, including the significant share price and market volatility, as well as disruptions to supply chains resulting from the COVID-19 pandemic, triggered an interim impairment analysis for the Company’s intangible assets including goodwill.

As a result of this analysis, during the three months ended March 29, 2020, the Company recorded goodwill impairment charges totaling $ 36.2 million and $ 8.2 million and trade name impairment charges totaling $ 7.0 million and $ 5.0 million related to the Crest and NauticStar segments, respectively.

2022 Impairment Charges

Aviara Impairment Activity

Beginning with the first quarter of fiscal 2022, the Company realigned its reportable segments to MasterCraft, Crest, NauticStar, and Aviara.

Refer to Note 12 – Segment Information for further information on the Company’s reportable segments.

As a result of the change in segments, in accordance with ASC 350, Intangibles-Goodwill and Other, the Company reallocated the goodwill recorded in the MasterCraft reporting unit to the two separate MasterCraft and Aviara reporting units using a relative fair value approach.

Prior to realigning our segments, we evaluated our goodwill for impairment and determined no impairment existed as the fair value of our MasterCraft reporting unit, which was the only reporting unit containing goodwill, was in excess of its carrying amount.

In conjunction with the reallocation of goodwill, we tested the goodwill at our MasterCraft and Aviara reporting units for impairment using an income-based approach, specifically a discounted cash flow model.

The cash flow model included significant judgements and assumptions related to revenue growth and Discount Rates.

At the time of the impairment test, near-term operating losses generated by start-up inefficiencies negatively impacted the fair value of Aviara, causing the carrying value of the reporting unit to be in excess of the fair value.

Consequently, a $ 1.1 million goodwill impairment charge was recognized in the first quarter of fiscal 2022.

NauticStar Impairment Activity

Despite ongoing efforts to improve operational efficiency and throughput at our NauticStar reporting unit in order to improve sales volumes and yield more favorable margins, including the engagement of third-party consulting resources beginning in the third quarter, the NauticStar reporting unit recorded unplanned negative operating results in the fourth quarter.

In accordance with ASC 350, Intangibles – Goodwill and Other, we evaluated whether the carrying value of the NauticStar reporting unit’s indefinite-lived trade name intangible asset exceeded its fair value.

Based on our evaluation of projected future cash flows, we concluded that the trade name intangible asset of $ 8.0 million was fully impaired as of June 30, 2022.

In accordance with ASC 360-10, Property, Plant and Equipment – Impairment or Disposal of Long-Lived Assets (ASC 360), we then performed a probability-weighted undiscounted cash flow analysis for the asset group related to the NauticStar reporting unit that considered projected cash flows from continuing to operate the assets through their remaining estimated useful lives, a potential sale, and a potential exit of the business other than through a sale and concluded that the carrying value of the asset group was not recoverable.

The fair value of the finite-lived dealer network intangible asset was estimated using these cash flows, resulting in a full impairment of $ 10.5 million.

As a result of our impairment analyses, we recorded total impairment charges of $ 23.8 million related to the NauticStar reporting unit’s intangible and fixed assets.

Goodwill reallocation and impairment charges for the years ended June 30, 2022, 2021, and 2020, along with the carrying amounts of goodwill as of June 30, 2022 and 2021, attributable to each of the Company’s reportable segments, were as follows:

Fiscal 2022 Goodwill Impairment

In fiscal 2022, the Company realigned its reportable segments.

As a result of the change in segments, the Company reallocated the goodwill recorded in the MasterCraft reporting unit to the two separate MasterCraft and Aviara reporting units.

In conjunction with the reallocation of goodwill, the Company tested goodwill at our MasterCraft and Aviara segments and determined the carrying value of the Aviara reporting unit to be in excess of the fair value.

Consequently, a $ 1.1 million impairment charge was recognized for our Aviara reporting unit in fiscal 2022.

Goodwill reallocation and impairment charge for the year ended June 30, 2022, were as follows:

Goodwill, net at June 30, 2021

Goodwill, net at June 30, 2020 and 2021

Goodwill reallocation

Impairment loss

Goodwill, net at June 30, 2022

As of June 30, 2023, our annual impairment test date, the Company performed a qualitative assessment and identified no events or circumstances that indicated that there existed a more likely than not probability of impairment of goodwill within our MasterCraft segment.

Accumulated Impairment Losses

The following table presents the carrying amounts of goodwill as of June 30, 2023 and 2022 for each of the Company's reportable segments.

Accumulated Impairment Losses

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See discussion above related to the intangible assets within our NauticStar segment.

Amortization expense related to Other intangible assets, net for years ended June 30, 2022, 2021 and 2020 was $ 4.0 million, $ 3.9 million, and $ 3.9 million, respectively.

Amortization expense related to Other intangible assets, net for each of the years ended June 30, 2023, 2022 and 2021 was $ 2.0 million.

The following table presents estimated future amortization expense for the next five fiscal years and thereafter.

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Compensation and related accruals

Contract liabilities

Self-insurance

Inventory repurchase contingent obligation

Contract liabilities

Liabilities retained associated with discontinued operations

Total accrued expenses and other current liabilities

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Long-term debt outstanding was as follows:

As of June 30,

Revolving credit facility

Debt issuance costs on term loans

Debt issuance costs on term loan

Less current portion of long-term debt

Less current portion of debt issuance costs on term loans

Less current portion of debt issuance costs on term loan

Long-term debt, net of current portion

On June 28, 2021, the Company entered into a credit agreement with a syndicate of certain financial institutions (the “Credit Agreement”).

The Credit Agreement provides the Company with a $ 160.0 million senior secured credit facility, consisting of a $ 60.0 million term loan (the “Term Loan”) and a $ 100.0 million revolving credit facility (the “Revolving Credit Facility”).

The Credit Agreement refinanced and replaced the Fourth Amended Credit Agreement, which had been in place prior to the Credit Agreement and provided the Company with a $ 190.0 million senior secured credit facility, consisting of a $ 75.0 million term loan, and $ 80.0 million term loan, and a $ 35.0 million revolving credit facility.

The Credit Agreement is secured by a first priority security interest in substantially all of the Company’s assets.

The Credit Agreement contains a number of covenants that, among other things, restrict the Company’s ability to, subject to specified exceptions, incur additional debt;

On June 28, 2021, the Company entered into a credit agreement with a syndicate of certain financial institutions (the “Credit Agreement”).

The Credit Agreement refinanced and replaced the Fourth Amended Credit Agreement, which had been in place prior to the Credit Agreement and

provided the Company with a $ 190.0 million senior secured credit facility, consisting of a $ 75.0 million term loan, and $ 80.0 million term loan, and a $ 35.0 million revolving credit facility.

The Credit Agreement is secured by a first priority security interest in substantially all of the Company’s assets.

The Credit Agreement contains a number of covenants that, among other things, restrict the Company’s ability to, subject to specified exceptions, incur additional debt;

incur additional liens and contingent liabilities;

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The Company is also required to maintain a minimum fixed charge coverage ratio and a maximum net leverage ratio.

The Credit Agreement bears interest, at the Company’s option, at either the prime rate plus an applicable margin ranging from 0.25 % to 1.00 % or at an adjusted LIBOR rate plus an applicable margin ranging from 1.25 % to 2.00 %, in each case based on the Company’s net leverage ratio.

The Company is also required to pay a commitment fee for any unused portion of the revolving credit facility ranging from 0.15 % to 0.30 % based on the Company’s net leverage ratio.

As a result of entering into the Credit Agreement, the Company recognized a $ 0.7 million loss on early extinguishment of debt during the year ended June 30, 2021 related to unamortized debt issuance costs of the previously existing credit facility.

On August 31, 2022, the Company entered into the Second Amendment to the Credit Agreement to obtain the necessary consents and waivers to the restrictions described above in the covenants of the Credit Agreement, as related to the sale of the NauticStar business on September 2, 2022, as discussed in Note 3.

The Credit Agreement, as amended, bears interest, at the Company’s option, at either the prime rate plus an applicable margin ranging from 0.25 % to 1.00 % or at an adjusted benchmark rate plus an applicable margin ranging from 1.25 % to 2.00 %, in each case based on the Company’s net leverage ratio.

The Company is also required to pay a commitment fee for any unused portion of the revolving credit facility ranging from 0.15 % to 0.30 % based on the Company’s net leverage ratio.

As of June 30, 2023 and 2022 , the effective interest rate on borrowings outstanding was 6.50 % and 2.94 %, respectively.

The Credit Agreement will mature and all remaining amounts outstanding thereunder will be due and payable on June 28, 2026.

As of June 30, 2023, the Company was in compliance with its financial covenants under the Credit Agreement.

As of June 30, 2022 and 2021, the effective interest rate on borrowings outstanding was 2.94 % and 1.38 %, respectively.

Revolving Credit Facility

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As of June 30, 2022 , the Company had repaid all outstanding borrowings under the Revolving Credit Facility and had remaining availability of $ 100.0 million.

Maturities for the Term Loan and Revolving Credit Facility subsequent to June 30, 2022 are as follows:

Earnings before income taxes by jurisdiction were all in the U.S.

except for income of approximately $ 0.1 million during each of the years ended June 30, 2022, 2021 and 2020.

For the years ended June 30, the components of the provision for income taxes are as follows:

The Company has not utilized the revolver as of June 30, 2023, and still holds availability of $ 100.0 million.

Maturities for the Term Loan subsequent to June 30, 2023 are as follows:

The Company's sources of earnings before income taxes are primarily derived in the U.S.

Earnings in jurisdictions outside of the U.S.

were not significant during each of the years ended June 30, 2023, 2022 and 2021.

For the years ended June 30, the components of the provision for income taxes for continuing operations are as follows:

Current income tax expense:

Benefit of operating loss carryforwards

Total current tax expense

Deferred tax (benefit) expense:

Total deferred tax (benefit) expense

Total deferred tax expense (benefit)

Income tax expense (benefit)

The difference between the statutory and the effective federal tax rate for the periods below is attributable to the following:

The difference between the statutory and the effective federal tax rate related to continuing operations for the periods below is attributable to the following:

Statutory income tax rate

State taxes (net of federal income tax benefit and valuation allowance)

Uncertain tax positions

Change in valuation allowance

Permanent differences

Uncertain tax positions

Effective income tax rate

As of June 30, 2022, and 2021, a summary of the significant components of the Company’s deferred tax assets and liabilities was as follows:

As of June 30, 2023, and 2022, a summary of the significant components of the Company’s deferred tax assets and liabilities was as follows:

Deferred tax assets:

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Warranty reserves

Accrued selling

Capitalized research costs

Stock compensation

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Net operating loss

Accrued compensation

Accrued selling

Repurchase agreements

Total deferred tax assets

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Of this amount, $ 1.0 million expire in varying years ranging from June 30, 2025 to June 30, 2038, while the remainder can be carried forward indefinitely.

However, the Company determined that it is more likely than not that the benefit from certain state carryforwards will not be realized.

In recognition of this risk, the Company has provided a partial valuation allowance on the deferred tax assets relating to these state NOL carryforwards.

Unrecognized Tax Benefits

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Reductions for tax positions of prior years

Settlements of tax positions from prior years

Balance at June 30

Of this total, $ 5.4 million and $ 4.7 million as of June 30, 2023 and 2022, respectively, represent the amount of unrecognized tax benefits that, if recognized, would favorably affect the effective income tax rate in future periods.

The total amount of interest and penalties recorded in the consolidated statements of operations for the years ended June 30, 2022, 2021, and 2020 was an expense of $ 0.2 million, a benefit of $ 0.2 million, and an expense of $ 0.3 million, respectively.

The total amount of interest and penalties recorded in the consolidated statements of operations for the years ended June 30, 2023, 2022, and 2021 was an expense of $ 0.2 million, an expense of $ 0.2 million, and a benefit of $ 0.2 million, respectively.

The amounts accrued for interest and penalties at June 30, 2023 and 2022 were $ 1.1 million and $ 0.8 million, respectively, and is presented in unrecognized tax positions on the accompanying consolidated balance sheets.

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As of June 30, 2023, the Company has not made a current provision for U.S.

or additional foreign withholding taxes on investments in foreign subsidiaries that are indefinitely reinvested.

or additional foreign withholding taxes on investments in foreign

subsidiaries that are indefinitely reinvested.

Generally, such amounts become subject to U.S.

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federal income tax, as well as various other state income taxes and foreign income taxes.

The federal income tax returns for the years ended June 30, 2019 through 2021 are subject to examination by the

Internal Revenue Service.

The federal income tax returns for the years ended June 30, 2020 through 2022 are subject to examination by the Internal Revenue Service.

For state purposes, the statutes of limitation vary by jurisdiction.

With few exceptions, t he Company is no longer subject to examination by taxing authorities for years before June 30, 201 9 .

With few exceptions, the Company is no longer subject to examination by taxing authorities for years before June 30, 2020.

The Company expects the total amount of unrecognized benefits to increase by approximately $ 0.8 million in the next twelve months.

The Company records unrecognized tax benefits as liabilities and adjust s these liabilities when its judgment changes as a result of the evaluation of new information not previously available.

The Company records unrecognized tax benefits as liabilities and adjusts these liabilities when its judgment changes as a result of the evaluation of new information not previously available.

Because of the complexity of some of these uncertainties, the ultimate resolution may result in a payment that is materially different from our current estimate of the unrecognized tax benefit liabilities.

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SHARE-BASED COMPENSATION

The 2015 Incentive Award Plan (“2015 Plan”) provides for the grant of stock options, including incentive stock options, and nonqualified stock options (“NSOs”), restricted stock, dividend equivalents, stock payments, restricted stock units, restricted stock awards (“RSAs”), deferred stock, deferred stock units, performance awards, stock appreciation rights, performance stock units (“PSUs”), and cash awards.

As of June 30, 2023 , there were 1,045,380 shares available for issuance under the 2015 Plan.

The following table presents the components of share-based compensation expense by award type for the years ended June 30, 2022, 2021, and 2020.

The following table presents the components of share-based compensation expense within continuing operations by award type for the years ended June 30, 2023, 2022, and 2021.

Restricted stock awards

Performance stock units

Stock options

Share-based compensation expense

The amount of compensation cost the Company recognizes over the requisite service period is based on the Company’s best estimate of the achievement of the performance conditions and can fluctuate over time.

Adjustment to Share-Based Compensation

In conjunction with the resignation of an executive officer in October 2019, approximately $ 0.5 million of share-based compensation expense recognized in prior periods was reversed during fiscal 2020 for RSAs and PSUs that were forfeited.

The following table presents the income tax benefit related to share-based compensation expense recognized by award type.

The following table presents the income tax benefit related to share-based compensation expense within continuing operations recognized by award type.

Restricted stock awards

Performance stock units

Stock options

Share-based compensation expense

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Generally, non-vested RSAs are forfeited if employment is terminated prior to vesting.

RSAs are granted at a per share fair value equal to the market value of the Company’s common stock on the grant date.

The Company recognizes the cost of non-vested RSAs ratably over the requisite service period.

The fair value of RSAs vested during the years ended June 30, 2023, 2022, and 2021 was $ 3.2 million, $ 2.4 million, and $ 1.6 million, respectively.

A summary of RSA activity for the years ended June 30, 2022, 2021, and 2020, is as follows:

A summary of RSA activity within continuing operations for these years is as follows:

Number of Restricted Stock Awards Outstanding

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During the years ended June 30, 2023, 2022, and 2021, the Company granted performance shares to certain employees.

The awards will be earned based on the Company’s achievement of certain performance criteria over a three-year performance period.

The performance period for the awards commence on July 1 of the fiscal year in which they were granted and continue for a three-year period, ending on June 30 of the applicable year.

The awards will be earned based on the Company’s achievement of certain performance criteria over a three-year performance period.

The performance period for the awards commences on July 1 of the fiscal year in which they were granted and continues for a three-year period, ending on June 30 of the applicable year.

The probability of achieving the performance criteria is assessed quarterly.

Following the determination of the Company’s achievement with respect to the performance criteria, the amount of shares awarded will be subject to adjustment based on the application of a total shareholder return (“TSR”) modifier.

The grant date fair value is determined based on both the assessment of the probability of the Company’s achieving the performance criteria and an estimate of the expected TSR modifier.

The TSR modifier estimate is determined by using a Monte Carlo Simulation model, which considers the likelihood of all possible outcomes of long-term market performance.

The amount of compensation cost the Company recognizes over the requisite service period is based on management’s best estimate of the achievement of the performance criteria.

The fair value of PSUs vested during the years ended June 30, 2023, 2022, and 2021 was $ 1.7 million, $ 2.1 million, and $ 0.4 million, respectively.

A summary of PSU activity for the years ended June 30, 2022, 2021, and 2020, is as follows:

A summary of PSU activity within continuing operations for these years is as follows:

Number of Performance Stock Units

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As of July 2019, all outstanding options were fully vested and exercisable.

The fair value of NSOs vested during the year ended June 30, 2020 was $ 0.2 million.

A summary of NSO activity for the years ended June 30, 2022, 2021, and 2020 is as follows:

All outstanding options as of June 30, 2022, were exercised during the year ended June 30, 2023.

A summary of NSO activity within continuing operations for these years is as follows:

Outstanding at June 30, 2020

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Repurchase Obligations

Under certain conditions, the Company is obligated to repurchase new inventory repossessed from dealerships by financial institutions that provide credit to the Company’s dealers.

See Note 1 for more information regarding the terms and accounting policies related to this obligation.

The maximum obligation of the Company under such floor plan agreements totaled approximately $ 97.3 million and $ 67.0 million as of June 30, 2022 and June 30, 2021, respectively.

The Company's obligations under such floor plan agreements are subject to various calculations and caps based on amounts currently owed by dealers to these financial institutions and, based on such terms, totaled approximately $ 53.1 million and $ 46.0 million as of June 30, 2023 and June 30, 2022, respectively.

We incurred no material impact from repurchase events during the years ended June 30, 2023, 2022, and 2021 .

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We incurred no penalties related to purchase commitments during the years ended June 30, 2023, 2022, and 2021.

In October 2021, the Company entered into a new supplier agreement to purchase marine outboard engines for its Crest pontoon boats.

During the term of the agreement, which expires July 2, 2022 , the Company is obligated to purchase a minimum annual gross dollar value in engines.

As of June 30, 2022, the obligation under the agreement had been satisfied.

Operating Leases

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The Company determines if an arrangement is a lease at lease inception.

Operating lease right-of-use (“ROU”) assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at the commencement date.

Because the rates implicit in the Company's lease contracts are not readily determinable, the Company uses its incremental borrowing rate based on information available at the commencement date in determining the present value of future payments.

The incremental borrowing rate is estimated to approximate the interest rate on a collateralized basis with similar terms and payments, and in economic environments where the leased asset is located.

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The Company accrues for litigation, claims and proceedings when a liability is both probable and the amount can be reasonably estimated.

As of June 30, 2022, the Company’s accruals for litigation matters are not material.

While these matters are subject to inherent uncertainties, management believes that current litigation, claims and proceedings, individually and in aggregate, and after considering expected insurance reimbursements, are not likely to have a material adverse impact on the Company’s financial position, results of operations or cash flows.

As of June 30, 2023 , the Company’s accruals for litigation matters are not material.

EARNINGS PER SHARE AND COMMON STOCK

The factors used in the earnings per share computation are as follows:

Net income (loss)

Weighted average shares — basic

Net income from continuing operations

Loss from discontinued operations, net of tax

Weighted average shares —

Dilutive effect of assumed exercises of stock options

Dilutive effect of assumed restricted share awards/units

Weighted average outstanding shares — diluted

Weighted average outstanding shares —

Basic net income (loss) per share

Continuing operations

Discontinued operations

Diluted net income (loss) per share

Continuing operations

Discontinued operations

For the years ended June 30, 2023, 2022, and 2021, an immaterial number of shares were excluded from the computation of diluted earnings per share as the effect would have been anti-dilutive.

For the year ended June 30, 2020, the dilutive effect of approximately 45,000 outstanding RSAs, PSUs and NSOs have been excluded from the calculation of diluted earnings per share as the effect would have been anti-dilutive because of the net loss for the year ended June 30, 2020.

Stock Repurchase Program

On June 24, 2021, the board of directors of the Company authorized a stock repurchase program that allows for the repurchase of up to $ 50.0 million of the Company’s common stock during the three-year period ending June 24, 2024.

During the fiscal year ended June 30, 2022, the Company repurchased 975,161 shares of common stock for $ 25.5 million in cash, including related fees and expenses.

We did not repurchase any common stock during fiscal 2021.

During the fiscal years ended June 30, 2023 and 2022 , the Company repurchased 872,055 shares and 975,161 shares of common stock for $ 22.9 million and $ 25.5 million in cash, including related fees and expenses.

We did no t repurchase any common stock during fiscal 2021.

As of June 30, 2023 , $ 1.6 million remained available under the current authorization.

On July 24, 2023, the board of directors of the Company authorized a new share repurchase program under which the Company may repurchase up to $ 50 million of its outstanding shares of common stock.

The new authorization will become effective upon the expiration of the Company's existing $ 50 million share repurchase authorization.

SEGMENT INFORMATION

Change in Reportable Segments

Beginning with the first quarter of fiscal 2022 and as discussed in Note 1, our CODM began to manage our business, allocate resources, and evaluate performance based on the reportable segments of MasterCraft, Crest, NauticStar, and Aviara.

Reportable Segments

Operating segments are identified as components of an enterprise about which discrete financial information is available for evaluation by the CODM in making decisions on how to allocate resources and assess performance.

For the year ended June 30, 2022, the Company’s CODM regularly assessed the operating performance of the Company’s boat brands under four operating and reportable segments:

For the year ended June 30, 2023, the Company’s CODM regularly assessed the operating performance of the Company’s boat brands under three operating and reportable segments:

The MasterCraft segment produces boats at its Vonore, Tennessee facility.

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The Crest segment produces pontoon boats at its Owosso, Michigan facility.

Crest’s boats are primarily used for general recreational boating.

The NauticStar segment produces boats at its Amory, Mississippi facility.

NauticStar’s boats are primarily used for saltwater fishing and general recreational boating.

Crest’s boats are primarily used for general recreational boating.

The Aviara segment produces luxury day boats at its Merritt Island, Florida facility.

Aviara boats are primarily used for general recreational boating.

Beginning in fiscal 2022, the CODM began to assess Aviara’s performance on a stand-alone basis using criteria consistent with our other operating and reportable segments.

Each segment distributes its products through its own independent dealer network.

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All material corporate costs are included in the MasterCraft segment.

Selected financial information for the Company’s reportable segments was as follows:

For the Year Ended June 30, 2023

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Depreciation and amortization

Goodwill impairment

Purchases of property, plant and equipment

3 unchanged sentences

Purchases of property, plant and equipment

The following table presents total assets for the Company’s reportable segments as of June 30, 2022, and 2021.

The following table presents total assets for the Company’s reportable segments as of June 30, 2023, and 2022.

June 30, 2023

June 30, 2022

SUBSEQUENT EVENT

On August 9, 2022, the Company announced the Board of Directors was evaluating strategic alternatives for the NauticStar reporting unit, including a wide range of available alternatives, with the intention of exiting the NauticStar business.

On September 2, 2022, the Company sold the NauticStar business.

Pursuant to the terms of the purchase agreement, substantially all of the assets of NauticStar were sold, including, among other things, all of the issued and outstanding membership interests in its wholly-owned subsidiary NS Transport, LLC, all owned real property, equipment, inventory, intellectual property and accounts receivable, and the purchaser assumed certain liabilities of NauticStar, including, among other things, product liability and warranty claims.

In conjunction with the purchase agreement, the Company entered into a joint employer services agreement and a transition services agreement, which provide certain services to the purchaser for various periods of time after the sale.

These agreements are not expected to have a material impact on expenditures, earnings, nor cash flows.

Further, the Company entered into the Second Amendment to the Credit Agreement as described further in Note 7 related to waivers of restrictions within the Credit Agreement, as amended, on the sale of assets.

Discontinued operations

QUARTERLY FINANCIAL REPORTING (UNAUDITED)

The Company maintains its financial records on the basis of a fiscal year ending on June 30, with the fiscal quarters equaling thirteen weeks.

The following tables set forth summary quarterly financial information for the years ended June 30, 2023 and 2022, and reflects the retrospective presentation of discontinued operations as discussed in Note 3.

Due to the effects of rounding, the quarterly results presented may not sum to the fiscal year results presented.

Fiscal Quarter Ended

Fiscal Year Ended

Operating income

Net income from continuing operations

Loss from discontinued operations

Basic net income (loss) per common share

Continuing operations

Discontinued operations

Diluted net income (loss) per common share

Continuing operations

Discontinued operations

Weighted average shares used for computation of:

Basic earnings per common share

Diluted earnings per common share

Fiscal Quarter Ended

Fiscal Year Ended

Operating income

Net income from continuing operations

Loss from discontinued operations

Basic net income (loss) per common share

Continuing operations

Discontinued operations

Diluted net income (loss) per common share

Continuing operations

Discontinued operations

Weighted average shares used for computation of:

Basic earnings per common share

Diluted earnings per common share

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 9A. Controls and Procedures