MasterCraft Boat Holdings, Inc.

Previous wording

On October 18, 2024, the Company completed the Aviara Transaction and on December 23, 2024, the Company completed the Aviara Facility Sale. In fiscal 2023, the Company sold its NauticStar business. The Company's results for all periods presented, as discussed in Management's Discussion and Analysis, are presented on a continuing operations basis. Results related to our Aviara and NauticStar reporting units are reported as discontinued operations for all periods presented. See Notes 1 and 3 in Notes to the unaudited condensed consolidated financial statements for more information on discontinued operations.

Current wording

The Company’s results for all periods presented, as discussed in Management’s Discussion and Analysis, are presented on a continuing operations basis, which consists of our MasterCraft and Pontoon segments.

Previous wording

The table below presents our consolidated results of operations for the three and nine months ended:

Current wording

The table below presents our consolidated results of operations for the three months ended:

Previous wording

Net sales decreased $63.3 million during the first nine months of fiscal 2025, when compared with the same prior-year period. The decrease in net sales was driven by planned lower unit volumes, unfavorable model mix and changes in price, partially offset by favorable option sales.

Current wording

Net sales increased $3.6 million during the first quarter of fiscal 2026, when compared with the same prior-year period. The increase in net sales was driven by increased prices, higher unit volumes, favorable option sales, and decreased dealer incentives, partially offset by unfavorable model mix.

Previous wording

The following table sets forth MasterCraft segment results for the three and nine months ended:

Current wording

The following table sets forth MasterCraft segment results for the three months ended:

Previous wording

Operating income decreased $1.8 million and $15.3 million during third quarter and first nine months of fiscal 2025, respectively, when compared with the same prior-year period. The change was primarily the result of decreased net sales and increased materials and overhead inflation, partially offset by decreased operating expenses, as discussed above.

Current wording

Operating income increased $1.8 million during first quarter of fiscal 2026, when compared with the same prior-year period. The change was primarily the result of increased net sales, partially offset by increased operating expenses, as discussed above.

Previous wording

The following table sets forth Pontoon segment results for the three and nine months ended:

Current wording

The following table sets forth Pontoon segment results for the three months ended:

Previous wording

Net sales decreased $2.5 million and $19.9 million during the third quarter and first nine months of fiscal 2025, respectively, when compared to the same prior-year period, mainly due to lower unit volumes and increased dealer incentives, partially offset by favorable model mix and option sales.

Current wording

Net sales increased $1.0 million during the first quarter of fiscal 2026, when compared to the same prior-year period, mainly due increased unit volumes and favorable option sales, partially offset by unfavorable model mix.

Previous wording

Operating loss for the third quarter and first nine months of fiscal 2025 increased $0.8 million and $7.4 million, respectively, compared to the same prior-year period. The change was driven by decreased net sales, as discussed above, and increased labor and materials costs.

Current wording

Operating loss for the first quarter of fiscal 2026 decreased $1.0 million, compared to the same prior-year period. The change was driven by increased net sales, as discussed above, and effective cost controls.

Previous wording

We define EBITDA as income from continuing operations, before interest, income taxes, depreciation and amortization. We define Adjusted EBITDA as EBITDA further adjusted to eliminate certain non-cash charges or other items that we do not consider to be indicative of our core and/or ongoing operations. For the periods presented herein, the adjustments are for share-based compensation, and CEO transition and organizational realignment costs. We define EBITDA margin and Adjusted EBITDA margin as EBITDA and Adjusted EBITDA, respectively, each expressed as a percentage of Net sales.

Current wording

We define EBITDA as income from continuing operations, before interest, income taxes, depreciation and amortization. We define Adjusted EBITDA as EBITDA further adjusted to eliminate certain non-cash charges or other items that we do not consider to be indicative of our core and/or ongoing operations. For the periods presented herein, the adjustments are for share-based compensation, and senior leadership transition and organizational realignment costs. We define EBITDA margin and Adjusted EBITDA margin as EBITDA and Adjusted EBITDA, respectively, each expressed as a percentage of Net sales.

Previous wording

We define Adjusted Net Income and Adjusted Net Income per share as income from continuing operations, adjusted to eliminate certain non-cash charges or other items that we do not consider to be indicative of our core and/or ongoing operations and reflecting income tax expense on adjusted net income before income taxes at our estimated annual effective tax rate. For the periods presented herein, these adjustments include other intangible asset amortization, share-based compensation, and CEO transition and organizational realignment costs.

Current wording

We define Adjusted Net Income and Adjusted Net Income per share as income from continuing operations, adjusted to eliminate certain non-cash charges or other items that we do not consider to be indicative of our core and/or ongoing operations and reflecting income tax expense on adjusted net income before income taxes at our estimated annual effective tax rate. For the periods presented herein, these adjustments include other intangible asset amortization, share-based compensation, and senior leadership transition and organizational realignment costs.

Previous wording

EBITDA, Adjusted EBITDA, EBITDA margin, Adjusted EBITDA margin, Adjusted Net Income, and Adjusted Net Income per share, which we refer to collectively as the Non-GAAP Measures, are not measures of net income or operating income as determined under accounting principles generally accepted in the United States, or U.S. GAAP. The Non-GAAP Measures are not measures of performance in accordance with U.S. GAAP and should not be considered as an alternative to net income, net income per share, or operating cash flows determined in accordance with U.S. GAAP. Additionally, Adjusted EBITDA is not intended to be a measure of cash flow. We believe that the inclusion of the Non-GAAP Measures is appropriate to provide additional information to investors because securities analysts and investors use the Non-GAAP Measures to assess our operating performance across periods on a consistent basis and to evaluate the relative risk of an investment in our securities. We use Adjusted Net Income and Adjusted Net Income per share to facilitate a comparison of our operating performance on a consistent basis from period to period that, when viewed in combination with our results prepared in accordance with U.S. GAAP, provides a more complete understanding of factors and trends affecting our business than does U.S. GAAP measures alone. We believe Adjusted Net Income and Adjusted Net Income per share assists our Board, management, investors, and other users of the financial statements in comparing our net income on a consistent basis from period to period because it removes certain non-cash items and other items that we do not consider to be indicative of our core and/or ongoing operations and reflecting income tax expense on adjusted net income before income taxes at our estimated annual effective tax rate. The Non-GAAP Measures have limitations as an analytical tool and should not be considered in isolation or as a substitute for analysis of our results as reported under U.S. GAAP. Some of these limitations are:

Current wording

EBITDA, Adjusted EBITDA, EBITDA margin, Adjusted EBITDA margin, Adjusted Net Income, Adjusted Net Income per share, and Free Cash Flow, which we refer to collectively as the Non-GAAP Measures, are not measures of net income, operating income, or net operating cash flows as determined under accounting principles generally accepted in the United States, or U.S. GAAP. The Non-GAAP Measures are not measures of performance in accordance with U.S. GAAP and should not be considered as an alternative to net income, net income per share, or net operating cash flows determined in accordance with U.S. GAAP. Additionally, Adjusted EBITDA is not intended to be a measure of cash flow. We believe that the inclusion of the Non-GAAP Measures is appropriate to provide additional information to investors because securities analysts and investors use the Non-GAAP Measures to assess our operating performance across periods on a consistent basis and to evaluate the relative risk of an investment in our securities. We use Adjusted Net Income and Adjusted Net Income per share to facilitate a comparison of our operating performance on a consistent basis from period to period that, when viewed in combination with our results prepared in accordance with U.S. GAAP, provides a more complete understanding of factors and trends affecting our business than does U.S. GAAP measures alone. We believe Adjusted Net Income and Adjusted Net Income per share assists our Board, management, investors, and other users of the financial statements in comparing our net income on a consistent basis from period to period because it removes certain non-cash items and other items that we do not consider to be indicative of our core and/or ongoing operations and reflecting income tax expense on adjusted net income before income taxes at our estimated annual effective tax rate. The Non-GAAP Measures have limitations as an analytical tool and should not be considered in isolation or as a substitute for analysis of our results as reported under U.S. GAAP. Some of these limitations are:

Previous wording

The Non-GAAP measures do not reflect our cash expenditures, or future requirements for capital expenditures or contractual commitments;

Current wording

Certain Non-GAAP measures do not reflect our cash expenditures, or future requirements for capital expenditures or contractual commitments;

Previous wording

The Non-GAAP measures do not reflect changes in, or cash requirements for, our working capital needs;

Current wording

Certain Non-GAAP measures do not reflect changes in, or cash requirements for, our working capital needs;

Previous wording

The Non-GAAP measures do not reflect the impact of earnings or charges resulting from matters we do not consider to be indicative of our core and/or ongoing operations, but may nonetheless have a material impact on our results of operations.

Current wording

Certain Non-GAAP measures do not reflect the impact of earnings or charges resulting from matters we do not consider to be indicative of our core and/or ongoing operations, but may nonetheless have a material impact on our results of operations.

Previous wording

Represents amounts paid for legal fees and recruiting costs associated with the CEO transition, as well as non-recurring severance costs incurred as part of the Company's strategic organizational realignment undertaken in connection with the transition.

Current wording

Represents amounts paid for legal fees and recruiting costs associated with the CEO and CFO transitions, as well as non-recurring severance costs incurred as part of the Company’s strategic organizational realignment undertaken in connection with the transitions.

Previous wording

For fiscal 2025 and 2024, income tax expense reflects an income tax rate of 18.0% and 20.0%, respectively.

Current wording

For fiscal 2026 and 2025, income tax expense reflects an income tax rate of 23.0% and 20.0%, respectively.

Previous wording

Represents the Weighted Average Shares used for the computation of Basic and Diluted earnings per share as presented on the Consolidated Statements of Operations to calculate Adjusted Net Income per basic and diluted share for all periods presented herein.

Current wording

Represents the Weighted Average Shares used for the computation of Basic and Diluted earnings (loss) per share as presented on the Consolidated Statements of Operations to calculate Adjusted Net Income per basic and diluted share for all periods presented herein.

Previous wording

Our primary liquidity and capital resource needs are to finance working capital, fund capital expenditures, service debt, fund potential acquisitions, and fund our share repurchase program. Our principal sources of liquidity are our cash balance, available-for-sale securities, cash generated from operating activities, our revolving credit agreement and the refinancing and/or new issuance of long-term debt. We believe our cash balance, available-for-sale securities, cash from operations, and our ability to borrow will be sufficient to provide for our liquidity and capital resource needs.

Current wording

Our primary liquidity and capital resource needs are to finance working capital, fund capital expenditures, service debt, fund potential acquisitions, and fund our share repurchase program. Our principal sources of liquidity are our cash balance, short-term investments, cash generated from operating activities, our revolving credit agreement and the refinancing and/or new issuance of long-term debt. We believe our cash balance, short-term investments, cash from operations, and our ability to borrow will be sufficient to provide for our liquidity and capital resource needs.

Previous wording

On July 24, 2023, the Board of the Company authorized a share repurchase program under which the Company may repurchase up to $50 million of its outstanding shares of common stock. The authorization became effective upon the completion of the Company's previously existing $50 million stock repurchase authorization.

Current wording

On July 24, 2023, the Board of the Company authorized a share repurchase program under which the Company may repurchase up to $50 million of its outstanding shares of common stock. During the three months ended September 28, 2025, the Company repurchased 116,370 shares of common stock for $2.3 million in cash, excluding related fees and expenses.

Previous wording

Nine Months Ended March 30, 2025 Cash Flows from Continuing Operations

Current wording

Three Months Ended September 28, 2025 Cash Flows from Continuing Operations

Previous wording

Net cash provided by operating activities for the nine months ended March 30, 2025 was $18.5 million, primarily due to net income and favorable changes to working capital. Working capital is defined as accounts receivable, income tax receivable, inventories, and prepaid expenses and other current assets net of accounts payable, income tax payable, and accrued expenses and other current liabilities as presented in the condensed consolidated balance sheets. Favorable changes in working capital primarily consisted of an increase in accounts payables and a decrease in accounts receivable. Partially offsetting favorable changes in working capital was an increase in inventories. Accounts payables increased due to increased production compared to the prior-year period. Accounts receivable decreased due to timing of sales at the end of the period compared to the end of the prior-year period. Inventories increased due to higher value on finished goods and timing of sales at the end of the period compared to the end of the prior-year period.

Current wording

Net cash used in operating activities for the three months ended September 28, 2025 was $7.0 million, primarily due to working capital usage, partially offset by net income. Working capital is defined as accounts receivable, income tax receivable, inventories, and prepaid expenses and other current assets net of accounts payable, income tax payable, and accrued expenses and other current liabilities as presented in the condensed consolidated balance sheets. Working capital usage primarily consisted of a decrease in accrued expenses and other current liabilities, an increase in accounts receivable, inventories, and prepaid expenses and other current assets, partially offset by an increase in accounts payable. Accrued expenses and other current liabilities decreased due to payment of dealer incentives and variable compensation. Accounts receivable increased due to timing of sales and collections at the end of the period compared to the end of the prior-year period. Inventories increased due to timing of raw material purchases and production at the end of the period compared to the end of the prior-year period. Prepaid expenses and other current assets increased due to increased payments for future expenses. Accounts payable increased due to timing of purchases at the end of the period compared to the prior-year period.

Previous wording

Net cash provided by investing activities was $35.0 million, which included $41.6 million of net proceeds in available-for-sale securities, partially offset by $6.6 million in capital expenditures. Our capital spending was primarily focused on information technology, tooling and machinery and equipment.

Current wording

Net cash provided by investing activities was $12.0 million, which included $15.1 million of net proceeds in available-for-sale securities, partially offset by $3.1 million in capital expenditures. Our capital spending was primarily focused on tooling, information technology, and machinery and equipment.

Previous wording

Nine Months Ended March 31, 2024 Cash Flows from Continuing Operations

Current wording

Three Months Ended September 29, 2024 Cash Flows from Continuing Operations

Previous wording

Net cash provided by operating activities for the nine months ended March 31, 2024 was $23.6 million, primarily due to net income, partially offset by working capital usage. Working capital usage primarily consisted of decreases in accrued expenses and other current liabilities, accounts payable, and income tax payable and an increase in prepaid expenses and other current assets, partially offset by decreases in inventories and accounts receivables. Accrued expenses and other current liabilities decreased due to payment of dealer incentives and lower compensation related accruals, partially offset by an increase in repurchase obligations. Accounts payable decreased as a result of decreased production levels. Income tax payable decreased due to lower earnings compared to the prior year. Prepaid expenses and other current assets increased due to payment of annual insurance premiums. Inventories decreased as we continue to rebalance inventory levels to align with lower production levels, partially offset by increased materials costs from inflation. Accounts receivables decreased primarily as a result of lower sales at the end of the period compared to the end of the prior-year period.

Current wording

Net cash used in operating activities for the three months ended September 29, 2024 was $0.5 million, primarily due to working capital usage, partially offset by net income. Working capital usage primarily consisted of a decrease in accrued expenses and other current liabilities and an increase in accounts receivable. Partially offsetting the working capital usage was an increase in accounts payables and a decrease in prepaid expenses and other current assets. Accrued expenses and other current liabilities decreased due to payment of dealer incentives and variable compensation. Accounts receivable increased due to timing of sales and collections at the end of the period compared to the end of the prior-year period. Accounts payables increased due to increased production compared to the prior-year period. Prepaid and other current assets decreased due to amortization of insurance premiums.

Previous wording

Net cash provided by investing activities was $1.8 million, due to net changes in available-for-sale securities of $9.8 million, partially offset by $8.0 million of capital expenditures. Our capital spending was mainly focused on facility enhancements, information technology, and tooling.

Current wording

Net cash provided by investing activities was $8.4 million, which included $10.6 million of proceeds in short-term investments, partially offset by $2.2 million in capital expenditures. Our capital spending was primarily focused on information technology, machinery and equipment, and tooling.

Previous wording

Net cash used in financing activities was $55.0 million, which included share repurchases totaling $5.0 million, excluding related fees and expenses, and $49.5 million used to repay outstanding borrowings of the Term Loan. Drawn amounts on the Revolving Credit Facility were fully repaid as of March 30, 2025.

Current wording

Net cash used in financing activities was $4.0 million, which included share repurchases totaling $3.5 million and $49.5 million used to repay outstanding borrowings of the Term Loan, which was offset by $49.5 million of borrowings under the Revolving Credit Facility.