MALIBU BOATS, INC.

Previous wording

We are a leading designer, manufacturer and marketer of a diverse range of recreational powerboats, including performance sport boats, sterndrive and outboard boats. Our product portfolio of premium brands are used for a broad range of recreational boating activities including, among others, water sports, general recreational boating and fishing. Our passion for consistent innovation, which has led to proprietary technology such as Surf Gate, has allowed us to expand the market for our products by introducing consumers to new and exciting recreational activities. We design products that appeal to an expanding range of recreational boaters and water sports enthusiasts whose passion for boating and water sports is a key component of their active lifestyle and provide consumers with a better customer-inspired experience. With performance, quality, value and multi-purpose features, our product portfolio has us well positioned to broaden our addressable market and achieve our goal of increasing our market share in the expanding recreational boating industry.

Current wording

We are a leading designer, manufacturer and marketer of a diverse range of recreational powerboats, including performance sport boats, sterndrive and outboard boats. Our product portfolio of premium brands is used for a broad range of recreational boating activities including, among others, water sports, such as water skiing, wakeboarding and wake surfing, as well as general recreational boating and fishing. Our passion for consistent innovation, which has led to proprietary technology such as Surf Gate, has allowed us to expand the market for our products by introducing consumers to new and exciting recreational activities. We design products that appeal to an expanding range of recreational boaters and water sports enthusiasts whose passion for boating and water sports is a key aspect of their lifestyle and provide consumers with a better customer-inspired experience. With performance, quality, value and multi-purpose features, our product portfolio has us well positioned to broaden our addressable market and achieve our goal of increasing our market share in the recreational boating industry.

Previous wording

We currently sell our boats under eight brands as shown in the table below, and we report our results of operations under three reportable segments, Malibu, Saltwater Fishing and Cobalt. See Note 16 to our unaudited interim condensed consolidated financial statements for more information about our reporting segments.

Current wording

We currently sell our boats under eight brands as shown in the table below, and we report our results of operations under three reportable segments, Malibu, Saltwater Fishing and Cobalt.

Previous wording

Our Malibu segment participates in the manufacturing, distribution, marketing and sale throughout the world of Malibu and Axis performance sports boats. Our flagship Malibu boats offer our latest innovations in performance, comfort and convenience, and are designed for consumers seeking a premium performance sport boat experience. We are the market leader in the United States in the performance sport boat category through our Malibu and Axis boat brands. Our Axis boats appeal to consumers who desire a more affordable performance sport boat product but still demand high performance, functional simplicity and the option to upgrade key features. Retail prices of our Malibu and Axis boats typically range from $80,000 to $300,000.

Current wording

Our Malibu segment participates in the manufacturing, distribution, marketing and sale throughout the world of Malibu and Axis performance sports boats. Our flagship Malibu boats offer our latest innovations in performance, comfort and convenience, and are designed for consumers seeking a premium performance sport boat experience. As of September 30, 2025, we are among the market leaders in the United States in the performance sport boat category through our Malibu and Axis brands. Our Axis boats appeal to consumers who desire a more affordable performance sport boat product but still demand high performance, functional simplicity and the option to upgrade key features. Retail prices of our Malibu and Axis boats typically range from $80,000 to $300,000.

Previous wording

Our Saltwater Fishing segment participates in the manufacturing, distribution, marketing and sale throughout the world of Pursuit boats and the Maverick Boat Group family of boats (Maverick, Cobia, Pathfinder and Hewes). Our Pursuit boats expand our product offerings into the saltwater outboard fishing market and include center console, dual console and offshore models. In December 2020, we acquired Maverick Boat Group and added Maverick, Cobia, Pathfinder and Hewes to our brands. Our Maverick Boat Group family of boats are highly complementary to Pursuit, expanding our saltwater outboard offerings with a strong focus in length segments under 30 feet. We are among the market leaders in the fiberglass outboard fishing boat category with the brands in our Saltwater Fishing segment. Retail prices for our Saltwater Fishing boats typically range from $45,000 to $1,400,000.

Current wording

Our Saltwater Fishing segment participates in the manufacturing, distribution, marketing and sale throughout the world of Pursuit boats and the Maverick Boat Group family of boats (Maverick, Cobia, Pathfinder and Hewes). Our Pursuit boats expand our product offerings into the saltwater outboard fishing market and include center console, dual console and offshore models. Our Maverick Boat Group family of boats are highly complementary to Pursuit, expanding our saltwater outboard offerings with a strong focus in length segments under 30 feet. We are among the market leaders in the fiberglass outboard fishing boat category with the brands in our Saltwater Fishing segment. Retail prices for our Saltwater Fishing boats typically range from $45,000 to $1,400,000.

Previous wording

Our Cobalt segment participates in the manufacturing, distribution, marketing and sale throughout the world of Cobalt boats. Our Cobalt boats consist of mid to large-sized luxury cruisers and bowriders that we believe offer the ultimate experience in comfort, performance and quality. As of March 31, 2025, we are the market leader in the United States in the 20’ - 40’ segment of the sterndrive boat category through our Cobalt brand. Retail prices for our Cobalt boats typically range from $75,000 to $625,000.

Current wording

Our Cobalt segment participates in the manufacturing, distribution, marketing and sale throughout the world of Cobalt boats. Our Cobalt boats consist of mid to large-sized luxury cruisers and bowriders that we believe offer the ultimate experience in comfort, performance and quality. As of September 30, 2025, we are among the market leaders in the United States in the 20’ - 40’ segment of the sterndrive boat category through our Cobalt brand. Retail prices for our Cobalt boats typically range from $75,000 to $625,000.

Previous wording

We sell our boats through a dealer network that we believe is the strongest in the recreational powerboat category. As of June 30, 2024, our worldwide distribution channel consisted of over 400 dealer locations globally. Our dealer base is an important part of our consumers’ experience, our marketing efforts and our brands. We devote significant time and resources to find, develop and improve the performance of our dealers and believe our dealer network gives us a distinct competitive advantage. We had one dealer that represented more than 10% of our consolidated net sales in fiscal year 2024 and the first nine months of fiscal year 2025, OneWater Marine, Inc. In fiscal year 2023, we had two dealers that represented more than 10% of our consolidated net sales, OneWater Marine, Inc. and Tommy's Boats. During fiscal year 2024, we informed Tommy's Boats that we would not be renewing any of their dealer agreements that had expired as of June 30, 2023 and we terminated two dealer agreements in Texas that had not expired. Tommy's Boats subsequently filed for bankruptcy protection. We subsequently entered into dealer agreements with dealers in 14 of the 15 markets previously served by Tommy's Boats. During the nine months ended March 31, 2025, we repurchased 22 units that were subject to repurchase agreements, including 19 boats from the inventory of Tommy's Boats that were subject to our repurchase agreement with M&T Bank, the floor plan financing lender for Tommy's Boats. Those repurchases were reflected in our June 30, 2024 consolidated financial statements and those boats were subsequently resold during the three months ended September 30, 2024 above cost. With respect to boats held by Tommy's Boats and not subject to the Repurchase Agreement, the bankruptcy trustee retained Gordon Brothers to sell the remaining inventory as part of the liquidation of Tommy's inventory. As of December 31, 2024, we believe none of our new model year 2023 and 2024 boats were remaining in the inventory of Tommy's Boats.

Current wording

We sell our boats through a dealer network that we believe is among the strongest in the recreational powerboat industry. As of June 30, 2025, our worldwide distribution channel consisted of over 325 dealer locations globally. Our dealer base is an important part of our consumers’ experience, our marketing efforts and our brands. We devote significant time and resources to find, develop and improve the performance of our dealers and believe our dealer network gives us a distinct competitive advantage. We had one dealer that represented more than 10% of our consolidated net sales in fiscal year 2025 and the first fiscal quarter of 2026, OneWater Marine, Inc.

Previous wording

On a consolidated basis, we achieved third quarter fiscal 2025 net sales, gross profit, net income and Adjusted EBITDA of $228.7 million, $45.7 million, $13.2 million and $28.3 million, respectively, compared to $203.4 million, $40.3 million, $(67.8) million and $24.4 million, respectively, for the third quarter of fiscal 2024. For the third quarter of fiscal 2025, net sales increased 12.4%, gross profit increased 13.4%, net income increased 119.4% and Adjusted EBITDA increased 16.0% as compared to the third quarter of fiscal 2024. For the definition of Adjusted EBITDA and a reconciliation to net income, see “GAAP Reconciliation of Non-GAAP Financial Measures.”

Current wording

On a consolidated basis, we achieved first quarter fiscal 2026 net sales, gross profit, net loss and Adjusted EBITDA of $194.7 million, $27.9 million, $(0.7) million and $11.8 million, respectively, compared to $171.6 million, $28.2 million, $(5.1) million and $9.9 million, respectively, for the first quarter of fiscal 2025. For the first quarter of fiscal 2026, net sales increased 13.5%, gross profit decreased 1.0%, net loss decreased 86.2% and Adjusted EBITDA increased 19.1% as compared to the first quarter of fiscal 2025. For the definition of Adjusted EBITDA and a reconciliation to net loss, see “GAAP Reconciliation of Non-GAAP Financial Measures.”

Previous wording

The recreational power boat industry continues to be challenged by macro-economic factors, including high inflation and high interest rates, that have increased the cost of production and taken many interest rate sensitive buyers out of the market. In recent months, tariffs have also been introduced, as discussed below, and we are monitoring the impact they may have on cost of production and demand. Simultaneously, less price sensitive buyers have been purchasing larger, more feature-rich boats with higher average selling prices.

Current wording

The recreational power boat industry continues to be challenged by macro-economic factors, including inflation and high interest rates, that have increased the cost of production and taken many interest rate sensitive buyers out of the market. In recent months, additional tariffs have also been introduced or proposed, as discussed below, and we are monitoring the impact they may have on cost of production, pricing and demand. Simultaneously, less price sensitive buyers have been purchasing larger, more feature-rich boats with higher average selling prices.

Previous wording

Due to high dealer flooring costs and a continued soft retail environment, we expect our dealers to reduce their inventories further in fiscal 2025. Additionally, we expect the retail market to continue to decline in fiscal 2025.

Current wording

Due to high dealer flooring costs and a continued soft retail environment, we expect our dealers to reduce their inventories further in fiscal 2026. Additionally, we expect the retail market to continue to decline in fiscal 2026 due to continued macroeconomic uncertainty.

Previous wording

Our financial results and operations have been, and will continue to be, impacted by events outside of our control, including trade policies and tariffs, inflationary pressures, interest rates, material shortages, weather events and global economic uncertainty. The current international trade and regulatory environment is subject to significant ongoing uncertainty. The U.S. presidential administration has recently announced substantial new tariffs affecting a wide range of products and jurisdictions and has indicated an intention to continue negotiating trade policies. In response, some countries have implemented, and other countries may implement, countermeasures in response to U.S. tariffs. We estimate that 18-20% of our cost of sales are sourced from outside the United States and thus we have the potential to be materially impacted by tariffs in future periods. We are continuing to monitor the potential long-term impact of tariffs and are taking a proactive approach to mitigating material supply chain risks. We, however, do not anticipate tariffs materially impacting our cost structure for the remainder of fiscal year 2025.

Current wording

Our financial results and operations have been, and will continue to be, impacted by events outside of our control, including trade policies and tariffs, inflationary pressures, interest rates, material shortages, weather events and global economic uncertainty. The current international trade and regulatory environment is subject to significant ongoing uncertainty. Earlier this year, the U.S. presidential administration announced substantial new tariffs affecting a wide range of products and jurisdictions and has indicated an intention to continue negotiating trade policies. In response, some countries have implemented, and other countries may implement, countermeasures in response to U.S. tariffs. We estimate that 18-20% of our cost of sales are sourced from outside the United States and thus we have the potential to be materially impacted by tariffs in future periods. We are continuing to monitor the potential long-term impact of tariffs and are taking a proactive approach to mitigating material supply chain risks. We expect additional material costs to be incurred in fiscal year 2026 due to new tariff exposure of approximately 1.5% to 3% of cost of sales, assuming current tariff rates. We expect to largely offset these added costs via price increases.

Previous wording

Numerous other variables also have the potential to impact our volumes, both positively and negatively. In the near term, we expect to continue to experience reduced retail consumer demand for our product and on-going pressure from dealers to reduce dealer inventories. However, we expect to continue to successfully navigate a challenging economic environment and anticipate delivering higher sales in the second half of fiscal 2025 relative to the same period in fiscal 2024 and relative to the first half of fiscal 2025.

Current wording

In the near term, we expect to continue to experience reduced retail consumer demand for our product and on-going pressure from dealers to reduce dealer inventories. However, we will maintain our disciplined approach to dealer health and leverage our cash generation to continue investing in the business.

Previous wording

•Discounts, rebates and free flooring—consists of discounts, rebates and free flooring, we provide to our dealers based on sales of eligible products. For our Malibu, Cobalt and Saltwater Fishing segments, if a domestic dealer meets its quarterly commitment volume, as well as other terms of the dealer performance program, the dealer is entitled to a specified discount off invoice for eligible wholesale volume purchased during the period. If a dealer meets its semi-annual or annual retail volume goals, the dealer is entitled to a specific rebate applied to their wholesale volume purchased. For Malibu, Cobalt and select Saltwater Fishing models, our dealers that take delivery of current model year boats may also be entitled to have us pay the interest to floor the boat for a period of time, which incentive we refer to as "free flooring". From time to time, we may extend the flooring program to eligible models beyond the offseason period.

Current wording

•Discounts, rebates and free flooring—consists of discounts, rebates and free flooring, we provide to our dealers based on sales of eligible products. For our Malibu, Cobalt and Saltwater Fishing segments, if a domestic dealer meets its quarterly commitment volume, as well as other terms of the dealer performance program, the dealer is entitled to a specified discount off invoice for eligible wholesale volume purchased during the period. If a dealer meets its quarter, semi-annual or annual retail volume goals, the dealer is entitled to a specific rebate applied to their wholesale volume purchased. For Malibu, Cobalt and select Saltwater Fishing models, our dealers that take delivery of current model year boats may also be entitled to have us pay the interest to floor the boat for a period of time, which incentive we refer to as "free flooring". From time to time, we may extend the flooring program to eligible models beyond the offseason period.

Previous wording

Other expense, net consists of interest expense and other income or expense, net. Interest expense consists of interest charged under our outstanding debt and amortization of deferred financing costs on our credit facilities. Other income or expense can include adjustments to our tax receivable agreement liability and sublease income.

Current wording

Other (income) expense, net consists of interest expense and other income or expense, net. Interest expense consists of interest charged under our outstanding debt and amortization of deferred financing costs on our credit facilities. Other income or expense includes adjustments to our tax receivable agreement liability and sublease income.

Previous wording

Malibu Boats, Inc. is subject to U.S. federal and state income tax in multiple jurisdictions with respect to our allocable share of any net taxable income of the LLC. The LLC is a pass-through entity for federal purposes but incurs income tax in certain state jurisdictions. Maverick Boat Group is separately subject to U.S. federal and state income tax with respect to its net taxable income.

Current wording

MBI is subject to U.S. federal and state income tax in multiple jurisdictions with respect to our allocable share of any net taxable income of the LLC. The LLC is a pass-through entity for federal purposes but incurs income tax in certain state jurisdictions. Maverick Boat Group is separately subject to U.S. federal and state income tax with respect to its net taxable income.

Previous wording

Net Income (Loss) Attributable to Non-controlling Interest

Current wording

Net Loss Attributable to Non-controlling Interest

Previous wording

As of March 31, 2025 and 2024, we had a 98.4% and a 98.5%, respectively, controlling economic interest and 100% voting interest in the LLC and, therefore, we consolidate the LLC's operating results for financial statement purposes. Net income (loss) attributable to non-controlling interest represents the portion of net income (loss) attributable to the non-controlling LLC members.

Current wording

As of September 30, 2025 and 2024, we had a 98.6% and a 98.4%, respectively, controlling economic interest and 100% voting interest in the LLC and, therefore, we consolidate the LLC's operating results for financial statement purposes. Net loss attributable to non-controlling interest represents the portion of net loss attributable to the non-controlling LLC members.

Previous wording

The table below sets forth our unaudited interim consolidated results of operations, expressed in thousands (except unit volume and net sales per unit) and as a percentage of net sales, for the periods presented. Our unaudited interim consolidated financial results for these periods are not necessarily indicative of the consolidated financial results that we will achieve in future periods. Certain totals in the table below will not sum to exactly 100% due to rounding.

Current wording

The table below sets forth our unaudited interim consolidated results of operations, expressed in thousands (except unit volume and net sales per unit) and as a percentage of net sales, for the periods presented. Our unaudited interim consolidated financial results for these periods are not necessarily indicative of the consolidated financial results that we will achieve in future periods. Certain totals for the table below will not sum to exactly 100% due to rounding.

Previous wording

Net sales for the three months ended March 31, 2025 increased $25.2 million, or 12.4%, to $228.7 million as compared to the three months ended March 31, 2024. The increase in net sales was driven primarily by increased unit volumes in the Malibu segment, a favorable model mix across all segments and inflation-driven year-over-year price increases, partially offset by decreased unit volumes in the Cobalt and Saltwater Fishing segments and an unfavorable segment mix. Unit volume for the three months ended March 31, 2025, increased 162 units, or 12.8%, to 1,431 units as compared to the three months ended March 31, 2024. Our unit volume increased primarily due to higher wholesale shipments across the Malibu segment, partially offset by lower volumes in the Cobalt and Saltwater Fishing segments due to our dealers' desire to hold less inventory.

Current wording

Net sales for the three months ended September 30, 2025 increased $23.2 million, or 13.5%, to $194.7 million as compared to the three months ended September 30, 2024. The increase in net sales was driven primarily by increased unit volumes in the Malibu segment, a favorable model mix in our Cobalt segment and inflation-driven year-over-year price increases, partially offset by decreased unit volumes in the Cobalt and Saltwater Fishing segments and an unfavorable segment mix. Unit volume for the three months ended September 30, 2025, increased 105 units, or 10.3%, to 1,129 units as compared to the three months ended September 30, 2024. Our unit volume increased due to higher wholesale shipments across the Malibu segment, partially offset by lower wholesale shipments in the Cobalt and Saltwater Fishing segments.

Previous wording

Net sales attributable to our Malibu segment increased $42.0 million, or 69.8%, to $102.2 million for the three months ended March 31, 2025, compared to the three months ended March 31, 2024. Unit volumes attributable to our Malibu segment increased 292 units for the three months ended March 31, 2025, compared to the three months ended March 31, 2024, primarily due to lower wholesale shipments during the three months ended March 31, 2024, as a result of elevated dealer inventory levels. The increase in net sales was driven by an increase in units, a favorable model mix and inflation-driven year-over-year price increases.

Current wording

Net sales attributable to our Malibu segment increased $22.6 million, or 40.4%, to $78.6 million for the three months ended September 30, 2025, compared to the three months ended September 30, 2024. Unit volumes attributable to our Malibu segment increased 154 units for the three months ended September 30, 2025, compared to the three months ended September 30, 2024, primarily due to lower wholesale shipments during the three months ended September 30, 2024, as a result of elevated dealer inventory levels. The increase in net sales was driven by an increase in units and inflation-driven year-over-year price increases, partially offset by increased dealer incentive costs.

Previous wording

Net sales attributable to our Saltwater Fishing segment decreased $49.8 million, or 19.4%, to $206.8 million, for the nine months ended March 31, 2025, compared to the nine months ended March 31, 2024. Unit volumes attributable to our Saltwater Fishing segment decreased 334 units for the nine months ended March 31, 2025 compared to the nine months ended March 31, 2024, primarily due to lower wholesale shipments driven by lower retail activity during the period and our dealers' desire to hold less inventory. The decrease in net sales was driven by a decrease in units, partially offset by a favorable model mix and inflation-driven year-over-year price increases.

Current wording

Net sales attributable to our Saltwater Fishing segment decreased $0.4 million, or 0.7%, to $64.3 million, for the three months ended September 30, 2025, compared to the three months ended September 30, 2024. Unit volumes attributable to our Saltwater Fishing segment decreased 12 units for the three months ended September 30, 2025 compared to the three months ended September 30, 2024, primarily due to lower wholesale shipments driven by lower retail activity during the period. The decrease in net sales was driven by a decrease in units, partially offset by inflation-driven year-over-year price increases and a favorable model mix.

Previous wording

Net sales attributable to our Cobalt segment decreased $7.4 million, or 12.0%, to $54.6 million for the three months ended March 31, 2025, compared to the three months ended March 31, 2024. Unit volumes attributable to Cobalt decreased 75 units for the three months ended March 31, 2025 compared to the three months ended March 31, 2024, primarily due to lower wholesale shipments driven by our dealers' desire to hold less inventory. The decrease in net sales was driven primarily by a decrease in units, partially offset by favorable model mix and inflation-driven year-over-year price increases.

Current wording

Net sales attributable to our Cobalt segment increased $1.0 million, or 1.9%, to $51.8 million for the three months ended September 30, 2025, compared to the three months ended September 30, 2024. Unit volumes attributable to Cobalt decreased 37 units for the three months ended September 30, 2025 compared to the three months ended September 30, 2024, primarily due to lower wholesale shipments driven by lower retail activity during the period and our dealers' desire to hold less inventory. The increase in net sales was driven primarily by a favorable model mix and inflation-driven year-over-year price increases, partially offset by a decrease in units.

Previous wording

Overall consolidated net sales per unit decreased (0.3)% to $159,792 per unit for the three months ended March 31, 2025, compared to the three months ended March 31, 2024. The decrease in overall consolidated net sales per unit was driven primarily by an unfavorable segment mix partially offset by favorable model mix across all segments and inflation-driven year-over-year price increases. Net sales per unit for our Malibu segment increased 3.2% to $137,417 per unit for the three months ended March 31, 2025, compared to the three months ended March 31, 2024, driven by favorable model mix and inflation-driven year-over-year price increases. Net sales per unit for our Saltwater Fishing segment increased 3.4% to $220,454 per unit for the three months ended March 31, 2025 driven by favorable model mix and inflation-driven year-over-year price increases. Net sales per unit for our Cobalt segment increased 6.3% to $151,125 per unit for the three months ended March 31, 2025, compared to the three months ended March 31, 2024, driven by favorable model mix and inflation-driven year-over-year price increases.

Current wording

Overall consolidated net sales per unit increased 2.9% to $172,483 per unit for the three months ended September 30, 2025, compared to the three months ended September 30, 2024. The increase in overall consolidated net sales per unit was driven primarily by a favorable model mix in our Cobalt and Saltwater Fishing segments and inflation-driven year-over-year price increases, partially offset by an unfavorable segment mix and increased dealer incentive costs in the Malibu segment. Net sales per unit for our Malibu segment increased 0.2% to $146,184 per unit for the three months ended September 30, 2025, compared to the three months ended September 30, 2024, driven by inflation-driven year-over-year price increases, partially offset by an increase in dealer incentive costs. Net sales per unit for our Saltwater Fishing segment increased 3.5% to $223,326 per unit for the three months ended September 30, 2025 driven by a favorable model mix and inflation-driven year-over-year price increases. Net sales per unit for our Cobalt segment increased 14.3% to $170,851 per unit for the three months ended September 30, 2025, compared to the three months ended September 30, 2024, driven by a favorable model mix and inflation-driven year-over-year price increases.

Previous wording

Cost of sales for the nine months ended March 31, 2025 decreased $46.6 million, or 8.7%, to $489.2 million as compared to the nine months ended March 31, 2024. The decrease in cost of sales was primarily driven by a 10.4% decrease in net sales due to lower unit volumes, partially offset by higher per unit material and labor costs of $9.6 million, $14.8 million and $8.8 million for the Malibu, Saltwater Fishing, and Cobalt segments, respectively. The increase in per unit material and labor costs was primarily driven by increased prices due to fixed cost deleverage, a more expensive model mix and inflationary pressures.

Current wording

Cost of sales for the three months ended September 30, 2025 increased $23.4 million, or 16.3%, to $166.8 million as compared to the three months ended September 30, 2024. The increase in cost of sales was primarily driven by a 13.5% increase in net sales due to higher unit volumes and partially due to higher net per unit material and labor costs of $1.9 million, $2.2 million and $6.3 million for the Malibu, Saltwater Fishing, and Cobalt segments, respectively. The increase in per unit material and labor costs was primarily driven by increased prices due to fixed cost deleverage in the Cobalt and Saltwater Fishing segments, a model mix that corresponds to higher costs per unit in our Cobalt and Saltwater Fishing segments, and inflationary pressures.

Previous wording

Gross profit for the nine months ended March 31, 2025 decreased $23.3 million, or 17.3%, to $111.4 million compared to the nine months ended March 31, 2024. The decrease in gross profit was driven primarily by lower net sales partially offset by decreased cost of sales for the reasons noted above. Gross margin for the nine months ended March 31, 2025 decreased 160 basis points from 20.1% to 18.5% driven primarily by higher per unit material and labor costs and fixed cost deleverage due to lower sales.

Current wording

Gross profit for the three months ended September 30, 2025 decreased $0.3 million, or 1.0%, to $27.9 million compared to the three months ended September 30, 2024. The decrease in gross profit was driven primarily by increased cost of sales for the reasons noted above, partially offset by increased net sales. Gross margin for the three months ended September 30, 2025 decreased 210 basis points from 16.4% to 14.3% driven primarily by higher per unit labor and material costs and increased dealer incentive costs in the Malibu segment.

Previous wording

Selling and marketing expenses for the three months ended March 31, 2025 increased $0.3 million, or 4.3% to $6.8 million compared to the three months ended March 31, 2024. The increase was driven primarily by an increase in certain marketing events and travel. As a percentage of sales, selling and marketing expenses decreased 20 basis points to 3.0% for the three months ended March 31, 2025 compared to 3.2% for the three months ended March 31, 2024. General and administrative expenses for the three months ended March 31, 2025 increased $1.2 million, or 6.7%, to $19.8 million as compared to the three months ended March 31, 2024 driven primarily by legal and professional fees. As a percentage of sales, general and administrative expenses decreased 0.4% to 8.7% for the three months ended March 31, 2025. Amortization expense remained flat at $1.7 million for the three months ended March 31, 2025.

Current wording

Selling and marketing expenses for the three months ended September 30, 2025 increased $1.4 million, or 29.4% to $6.3 million compared to the three months ended September 30, 2024. The increase was driven primarily by an increase in certain marketing events. As a percentage of sales, selling and marketing expenses increased 40 basis points to 3.2% for the three months ended September 30, 2025 compared to 2.8% for the three months ended September 30, 2024. General and administrative expenses for the three months ended September 30, 2025 decreased $6.5 million, or 23.8%, to $20.8 million as compared to the three months ended September 30, 2024 driven primarily by a $3.5 million legal settlement for the three months ended September 30, 2024, along with decreased legal and professional fees. As a percentage of sales, general and administrative expenses decreased 520 basis points to 10.7% for the three months ended September 30, 2025 compared to 15.9% for the three months ended September 30, 2024. Amortization expense remained flat at $1.7 million for the three months ended September 30, 2025.

Previous wording

Our provision (benefit) for income taxes for the three months ended March 31, 2025, increased $11.1 million, or 149.5%, to $3.7 million compared to the three months ended March 31, 2024. The increase primarily resulted from increased pre-tax earnings and corresponding state taxes, partially offset by impairment charges related to our Maverick Boat Group reporting unit during the three months ended March 31, 2024. For the three months ended March 31, 2025 and 2024, our effective tax rate was 21.8% and 9.9%, respectively. For the three months ended March 31, 2025, our effective tax rate was reduced by research tax credits. This reduction was partially offset by the impact of U.S. state taxes. For the three months ended March 31, 2024, our effective tax rate was reduced by the impairment charges related to our Maverick Boat Group reporting unit.

Current wording

Our provision (benefit) for income taxes for the three months ended September 30, 2025, increased $1.2 million, or 136.6%, to $0.3 million compared to the three months ended September 30, 2024. The increase primarily resulted from decreased pre-tax losses. For the three months ended September 30, 2025 and 2024, our effective tax rate was (77.9)% and 14.2%, respectively. For the three months ended September 30, 2025, our effective tax rate was reduced by the impact of the change in tax law enacted, in accordance with OB3, through the remeasurement of our deferred tax assets and U.S. state taxes. For the three months ended September 30, 2024, our effective tax rate was reduced by deferred tax impacts of pre-tax losses and U.S. state taxes.

Previous wording

Non-controlling interest represents the ownership interests of the members of the LLC other than us and the amount recorded as non-controlling interest in our unaudited interim condensed consolidated statements of operations and comprehensive income (loss) is computed by multiplying pre-tax income (loss) for the applicable period, by the percentage ownership in the LLC not directly attributable to us. For the three months ended March 31, 2025 and 2024, the weighted-average non-controlling interest attributable to ownership interests in the LLC not directly attributable to us was 1.6% and 1.7%, respectively.

Current wording

Non-controlling interest represents the ownership interests of the members of the LLC other than us and the amount recorded as non-controlling interest in our unaudited interim condensed consolidated statements of operations and comprehensive loss is computed by multiplying pre-tax loss for the applicable period, by the percentage ownership in the LLC not directly attributable to us. For the three months ended September 30, 2025 and 2024, the weighted-average non-controlling interest attributable to ownership interests in the LLC not directly attributable to us was 1.4% and 1.6%, respectively.

Previous wording

We define Adjusted EBITDA as net income (loss) before interest expense, income taxes, depreciation, amortization, goodwill and other intangible asset impairment expense and non-cash, non-recurring or non-operating expenses, including certain professional fees, litigation settlements and non-cash compensation expense. We define Adjusted EBITDA margin as Adjusted EBITDA divided by net sales. Adjusted EBITDA and Adjusted EBITDA margin are not measures of net income (loss) as determined by GAAP. Management believes adjusted EBITDA and Adjusted EBITDA margin allow investors to evaluate the Company’s operating performance and compare our results of operations from period to period on a consistent basis by excluding items that management does not believe are indicative of our core operating performance. Management uses Adjusted EBITDA to assist in highlighting trends in our operating results without regard to our financing methods, capital structure and non-recurring or non-operating expenses. We exclude the items listed above from net income (loss) in arriving at Adjusted EBITDA because these amounts can vary substantially from company to company within our industry depending upon accounting methods and book values of assets, capital structures, the methods by which assets were acquired and other factors. Adjusted EBITDA has limitations as an analytical tool and should not be considered as an alternative to, or more meaningful than, net income (loss) as determined in accordance with GAAP or as an indicator of our liquidity. Certain items excluded from Adjusted EBITDA are significant components in understanding and assessing a company’s financial performance, such as a company’s cost of capital and tax structure, as well as the historical costs of depreciable assets. Our presentation of Adjusted EBITDA and Adjusted EBITDA margin should not be construed as an inference that our results will be unaffected by unusual or non-recurring items. Our computations of Adjusted EBITDA and Adjusted EBITDA margin may not be comparable to other similarly titled measures of other companies.

Current wording

We exclude the items listed above from net loss in arriving at Adjusted EBITDA because these amounts can vary substantially from company to company within our industry depending upon accounting methods and book values of assets, capital structures, the methods by which assets were acquired and other factors. Adjusted EBITDA has limitations as an analytical tool and should not be considered as an alternative to, or more meaningful than, net loss as determined in accordance with GAAP or as an indicator of our liquidity. Certain items excluded from Adjusted EBITDA are significant components in understanding and assessing a company’s financial performance, such as a company’s cost of capital and tax structure, as well as the historical costs of depreciable assets. Our presentation of Adjusted EBITDA and Adjusted EBITDA margin should not be construed as an inference that our results will be unaffected by unusual or non-recurring items. Our computations of Adjusted EBITDA and Adjusted EBITDA margin may not be comparable to other similarly titled measures of other companies.

Previous wording

The following table sets forth a reconciliation of net income (loss) as determined in accordance with GAAP to Adjusted EBITDA and presentation of net income (loss) margin and Adjusted EBITDA margin for the periods indicated (dollars in thousands):

Current wording

The following table sets forth a reconciliation of net loss as determined in accordance with GAAP to Adjusted EBITDA and presentation of net loss margin and Adjusted EBITDA margin for the periods indicated (dollars in thousands):

Previous wording

Capital Expenditures. For fiscal year 2024, we incurred approximately $76.0 million in capital expenditures primarily related to the purchase and completion of our Roane County, Tennessee facility as well as new models, capacity enhancements and vertical integration initiatives. We expect capital expenditures between $25.0 million and $30.0 million for fiscal year 2025 (of which we have incurred approximately $21.0 million through the first nine months of fiscal year 2025), primarily for investments in new models, capacity enhancements and vertical integration initiatives. Other investment opportunities, such as potential strategic acquisitions, may require additional funding.

Current wording

During fiscal year 2025, we incurred approximately $27.9 million in capital expenditures primarily for investments in new models, capacity enhancements and vertical integration initiatives. For the three months ended September 30, 2025, we have incurred approximately $4.3 million in capital expenditures primarily for investments in new models, capacity enhancements and vertical integration initiatives.

Previous wording

Principal and Interest Payments. Our Third Amended and Restated Credit Agreement (the “Credit Agreement”) provides us with a revolving credit facility in an aggregate principal amount of up to $350.0 million. As of March 31, 2025, we had $28.0 million outstanding under our revolving credit facility and $1.7 million in outstanding letters of credit, with $320.3 million available for borrowing. The revolving credit facility matures on July 8, 2027. Assuming no additional repayments or borrowings on our revolving credit facility after March 31, 2025, our interest payments would be approximately $2.2 million within the next 12 months based on the interest rate at March 31, 2025 of 7.75%. See below under “Revolving Credit Facility” for additional information regarding our revolving credit facility, including the interest rate applicable to any borrowing under such facility.

Current wording

Our Third Amended and Restated Credit Agreement (the “Credit Agreement”) provides us with a revolving credit facility in an aggregate principal amount of up to $350.0 million. As of September 30, 2025, we had $23.0 million outstanding under our revolving credit facility and $1.7 million in outstanding letters of credit, with $325.3 million available for borrowing. The revolving credit facility matures on July 8, 2027. Assuming no additional repayments or borrowings on our revolving credit facility after September 30, 2025, our interest payments would be approximately $1.5 million within the next 12 months based on the weighted average interest rate at September 30, 2025 of 6.61%. See below under “Revolving Credit Facility” for additional information regarding our revolving credit facility, including the interest rate applicable to any borrowing under such facility.

Previous wording

Tax Receivable Agreement. We entered into a tax receivable agreement with our pre-IPO owners at the time of our initial public offering. Under the tax receivables agreement, we pay the pre-IPO owners (or any permitted assignees) 85% of the amount of cash savings, if any, in U.S. federal, state and local income tax or franchise tax that we actually realize, or in some circumstances are deemed to realize, as a result of an expected increase in our share of tax basis in LLC’s tangible and intangible assets, including increases attributable to payments made under the tax receivable agreement. These obligations will not be paid if we do not realize cash tax savings. We estimate that no amounts will be due under the tax receivable agreement within the next 12 months. In accordance with the tax receivable agreement, the next payment is anticipated to occur once net operating losses are utilized and there is sufficient taxable income.

Current wording

We entered into a tax receivable agreement with our pre-IPO owners at the time of our initial public offering. Under the tax receivables agreement, we pay the pre-IPO owners (or any permitted assignees) 85% of the amount of cash savings, if any, in U.S. federal, state and local income tax or franchise tax that we actually realize, or in some circumstances are deemed to realize, as a result of an expected increase in our share of tax basis in LLC’s tangible and intangible assets, including increases attributable to payments made under the tax receivable agreement. These obligations will not be paid if we do not realize cash tax savings. We estimate that approximately $0.3 million will be due under the tax receivable agreement within the next 12 months. In accordance with the tax receivable agreement, the next payment is anticipated to occur once net operating losses are utilized and there is sufficient taxable income.

Previous wording

Operating Lease Obligations. Lease commitments consist principally of leases for our manufacturing facilities. Our expected operating lease payments due within the next 12 months are $2.7 million and our total committed lease payments are $8.5 million as of March 31, 2025. Additional information regarding our operating leases is available in Note 10 of our unaudited interim condensed consolidated financial statements included elsewhere in this Quarterly Report.

Current wording

Lease commitments consist principally of leases for our manufacturing facilities. Our expected operating lease payments due within the next 12 months are $2.7 million and our total committed lease payments are $7.2 million as of September 30, 2025. Additional information regarding our operating leases is available in Note 11 of our unaudited interim condensed consolidated financial statements included elsewhere in this Quarterly Report.

Previous wording

Purchase Obligations. In the ordinary course of business, we enter into purchase orders from a variety of suppliers, primarily for raw materials, in order to manage our various operating needs. The orders are expected to be purchased throughout fiscal year 2025 and into fiscal year 2026. We or the vendor can generally terminate the purchase orders at any time. These purchase orders do not contain any termination payments or other penalties if cancelled. As of March 31, 2025, we had purchase orders in the amount of $80.2 million due within the next 12 months.

Current wording

In the ordinary course of business, we enter into purchase orders from a variety of suppliers, primarily for raw materials, in order to manage our various operating needs. The orders are expected to be purchased throughout fiscal year 2026. We or the vendor can generally terminate the purchase orders at any time. These purchase orders do not contain any termination payments or other penalties if cancelled. As of September 30, 2025, we had purchase orders in the amount of $71.9 million due within the next 12 months.

Previous wording

Return of Capital/Stock Repurchase Program. We previously announced that we intend to return capital of at least $10.0 million per quarter through May 2025 through either the repurchase of Class A Common Stock or through dividend payments. To date, we have returned capital to our stockholders through the repurchase of our stock and have not declared any dividends. Our Board of Directors authorized a stock repurchase program (the "2023 Repurchase Program") for the repurchase of up to $100.0 million of our Class A Common Stock and the LLC's LLC Units for the period from November 8, 2023 to November 8, 2024. Between July 1, 2024 and November 8, 2024, we repurchased 519,466 shares of Class A Common Stock for $20.2 million in cash including related fees and expenses under the 2023 Repurchase Program which expired on November 8, 2024.

Current wording

Return of Capital/Stock Repurchase Program.

Previous wording

On October 23, 2024, our Board of Directors authorized a new stock repurchase program (the "2024 Repurchase Program") for the repurchase of up to $50.0 million of our Class A Common Stock and the LLC's LLC Units for the period from November 9, 2024 to June 30, 2025. Between November 9, 2024 and March 31, 2025, we repurchased 279,340 shares of Class A Common Stock for $10.1 million in cash including related fees and expenses under the 2024 Repurchase Program. As of March 31, 2025, $39.9 million was available to repurchase shares of Class A Common Stock and LLC Units under the 2024 Repurchase Program. We may repurchase shares of our common stock at any time or from time to time, without prior notice, subject to market conditions and other considerations. We have no obligation to repurchase any shares of our common stock under the share repurchase program. We intend to fund repurchases under the repurchase program from cash on hand.

Current wording

In June 2025, our Board of Directors authorized a stock repurchase program to allow for the repurchase of up to $50.0 million of our Class A Common Stock and the LLC’s LLC Units (the "2025 Repurchase Program") for the period from July 1, 2025 to June 30, 2026. We may purchase shares under the 2025 Repurchase Program from time to time in privately negotiated transactions or open market transactions, including under plans complying with Rule 10b5-1 under the Securities Exchange Act of 1934, as amended at the discretion of management, subject to strategic considerations, market conditions, and other factors. During the three months ended September 30, 2025, we did not have any stock repurchases.

Previous wording

Net cash provided by operating activities was $35.5 million for the nine months ended March 31, 2025, compared to $39.2 million for the nine months ended March 31, 2024, a decrease of $3.8 million. The decrease in cash from operating activities resulted from a decrease of $34.6 million in net income (after consideration of non-cash items included in net income (loss), primarily related to depreciation, amortization, deferred tax assets and non-cash compensation) offset by a net increase in operating assets and liabilities of $30.8 million. The increase in net operating assets and liabilities was primarily driven by a one-time payment of $100.0 million with respect to a settlement agreement entered in connection with all Batchelder-related product liability matters during the nine months ended March 31, 2024, offset by $21.0 million in insurance coverage proceeds received during the nine months ended March 31, 2024 that are subject in certain cases to reservations of rights by the insurance carriers, as well as the timing of collections of accounts receivables, payments for accruals and payables, and purchases of inventory.

Current wording

Net cash provided by operating activities was $6.5 million for the three months ended September 30, 2025, compared to net cash used in operating activities of $8.4 million for the three months ended September 30, 2024, an increase in cash of $14.9 million. The increase in cash provided by operating activities resulted from a net increase in operating assets and liabilities of $9.4 million. The increase in operating assets and liabilities was due in part to an increase of $5.5 million in net income (after consideration of non-cash items included in net loss, primarily related to depreciation, amortization, deferred tax assets and non-cash compensation).

Previous wording

Net cash used in investing activities was $20.6 million for the nine months ended March 31, 2025, compared to net cash used in investing activities of $64.1 million for the nine months ended March 31, 2024, a decrease in net cash used of $43.5 million. The decrease in net cash used in investing activities for the nine months ended March 31, 2025 was primarily related to decreased capital expenditures compared to the nine months ended March 31, 2024. We had increased capital expenditures for the nine months ended March 31, 2024 due to our purchase of our Roane County, Tennessee facility and related capital improvements.

Current wording

Net cash used in investing activities was $4.2 million for the three months ended September 30, 2025, compared to net cash used in investing activities of $8.6 million for the three months ended September 30, 2024, a decrease in net cash used of $4.4 million. The decrease in net cash used in investing activities for the three months ended September 30, 2025 was primarily related to decreased capital expenditures compared to the three months ended September 30, 2024.

Previous wording

Net cash used in financing activities was $2.9 million for the nine months ended March 31, 2025 compared to net cash used in financing activities of $6.9 million for the nine months ended March 31, 2024, a decrease in cash used of $4.0 million. During the nine months ended March 31, 2025, we borrowed $28.0 million, net of repayments, under our revolving credit facility and repurchased $30.3 million of our Class A Common Stock under our current stock repurchase program. During the nine months ended March 31, 2024, we borrowed $15.0 million, net of repayments, under our revolving credit facility and repurchased $19.7 million of our Class A Common Stock under our prior stock repurchase program.

Current wording

Net cash provided by financing activities was $4.6 million for the three months ended September 30, 2025 compared to net cash provided by financing activities of $17.5 million for the three months ended September 30, 2024, a decrease of $12.9 million. During the three months ended September 30, 2025, we borrowed $5.0 million, net of repayments, under our revolving credit facility and did not repurchase any of our Class A Common Stock under our current stock repurchase program. During the three months ended September 30, 2024, we borrowed $28.0 million, net of repayments, under our revolving credit facility and repurchased $10.5 million of our Class A Common Stock under our prior stock repurchase program.

Previous wording

On July 8, 2022, Boats LLC entered into the Third Amended and Restated Credit Agreement (the “Credit Agreement”) which provides Boats LLC with a revolving credit facility in an aggregate principal amount of up to $350.0 million. As of March 31, 2025, the Company had $28.0 million outstanding under its revolving credit facility and $1.7 million in outstanding letters of credit, with $320.3 million available for borrowing. The revolving credit facility matures on July 8, 2027. Boats LLC has the option to request that lenders increase the amount available under the revolving credit facility by, or obtain incremental term loans of, up to $200.0 million, subject to the terms of the Credit Agreement and only if existing or new lenders choose to provide additional term or revolving commitments.

Current wording

On July 8, 2022, Boats LLC entered into a Third Amended and Restated Credit Agreement (the “Credit Agreement”) which provides Boats LLC with a revolving credit facility in an aggregate principal amount of up to $350.0 million. As of September 30, 2025, Boats LLC had $23.0 million outstanding under its revolving credit facility and $1.7 million in outstanding letters of credit, with $325.3 million available for borrowing. The revolving credit facility matures on July 8, 2027. Boats LLC has the option to request that lenders increase the amount available under the revolving credit facility by, or obtain term loans of, up to $200.0 million, subject to the terms of the Credit Agreement and only if existing or new lenders choose to provide additional term or revolving commitments.