MALIBU BOATS, INC.

Previous wording

Malibu Boats, Inc. is a Delaware corporation with its principal offices in Loudon, Tennessee. We use the terms “Malibu,” the “Company,” “we,” “us,” “our” or similar references to refer to Malibu Boats, Inc., its subsidiary, Malibu Boats Holdings, LLC, or the LLC, and its subsidiary Malibu Boats, LLC, or Boats, LLC and its consolidated subsidiaries, including Cobalt Boats, LLC, PB Holdco, LLC, through which we acquired the assets of Pursuit, and MBG Holdco, Inc., through which we acquired all of the outstanding stock of Maverick Boat Group, Inc.

Current wording

Malibu Boats, Inc. is a Delaware corporation with its principal offices in Loudon, Tennessee. We use the terms "Malibu," the "Company," "we," "us," "our" or similar references to refer to Malibu Boats, Inc., its subsidiary, Malibu Boats Holdings, LLC, or the LLC, and its subsidiary Malibu Boats, LLC, or Boats LLC and its consolidated subsidiaries.

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 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.

Current wording

We are a leading designer, manufacturer and marketer of a diverse range of recreational powerboats, including performance sport boats, sterndrive, outboard boats, and premium adventure dayboats. 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.

Current wording

We sell our boats under nine brands as shown in the table below, and we report our results of operations under four reportable segments, Malibu, Saltwater Fishing, Cobalt, and Saxdor. In connection with our acquisition of Saxdor we revised our segment reporting during the three months ended March 31, 2026 to report our results of operations under the following four reportable segments.

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. 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. As of December 31, 2025, 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. As of March 31, 2026, 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 $1,600,000.

Previous 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 half of fiscal year 2026, OneWater Marine, Inc.

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. With our recent acquisition of Saxdor, we continue to expand our global dealer footprint. Saxdor distributes through a dedicated network of over 100 dealer locations in more than 50 countries across 5 continents. 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 nine months of fiscal year 2026, OneWater Marine, Inc.

Previous wording

Second Quarter Fiscal 2026 Results (Unaudited)

Current wording

Third Quarter Fiscal 2026 Results (Unaudited)

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 2026. Additionally, we expect the retail market to continue to decline in fiscal 2026 due to continued macroeconomic uncertainty.

Current wording

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

Previous wording

We aim to increase our market share across the boating categories in which we compete through new product development, improved distribution, new models, and innovative features. We believe our strong brands, new product pipeline, strong dealer network and ability to increase production will allow us to maintain, and potentially expand, our leading market positions.

Current wording

We aim to increase our market share across the boating categories in which we compete through new product development, improved distribution, new models, and innovative features. We believe our strong brands, new product pipeline, strong dealer network and ability to increase production will allow us to maintain, and potentially expand, our leading market positions. Our newest acquisition, Saxdor, is in the early stages of integration into the business and expected synergies will be realized over the coming years. We believe enhancing manufacturing capabilities combined with diligent management of dealer networks will position Saxdor for continued growth.

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. Last 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.

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. Last year, the U.S. presidential administration announced substantial new tariffs affecting a wide range of products and jurisdictions. In response, some countries have implemented, and other countries may implement, countermeasures in response to U.S. tariffs. We estimate that 18 to 20% of our cost of sales for our brands located in the U.S. 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 for the remainder of fiscal 2026 and into fiscal 2027 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 by recent price increases.

Previous wording

We believe that our results of operations and our growth prospects are affected by a number of factors, such as the economic environment and consumer demand for our products, our ability to develop new products and innovate, our product mix, our ability to manage manufacturing costs, sales cycles and inventory levels, the strength of our dealer network, our ability to offer dealer financing and incentives and our vertical integration efforts. We discuss each of these factors in more detail under the heading “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations--Factors Affecting Our Results of Operations” in our Form 10-K for the year ended June 30, 2025. While we do not have control of all factors affecting our results from operations, we work diligently to influence and manage those factors which we can impact to enhance our results of operations.

Current wording

We believe that our results of operations and our growth prospects are affected by a number of factors, such as the economic environment and consumer demand for our products, our ability to successfully integrate acquisitions, our ability to develop new products and innovate, our product mix, our ability to manage manufacturing costs, sales cycles and inventory levels, the strength of our dealer network, our ability to offer dealer financing and incentives and our vertical integration efforts. We discuss each of these factors in more detail under the heading "Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations--Factors Affecting Our Results of Operations" in our Form 10-K for the year ended June 30, 2025. While we do not have control of all factors affecting our results from operations, we work diligently to influence and manage those factors which we can impact to enhance our results of operations.

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 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.

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. For our Saxdor segment, discounts are provided to all dealers based off a profitability-based model. If a dealer, for any of our brands, 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 (income), 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.

Current 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 includes adjustments to our tax receivable agreement liability and sublease income.

Previous 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.

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. Saxdor files income tax returns in Finland and Poland.

Previous wording

Net sales for the six months ended December 31, 2025 increased $11.5 million, or 3.1%, to $383.4 million as compared to the six months ended December 31, 2024. The increased net sales was driven primarily by increased unit volumes in our Malibu segment, a favorable model mix in our Cobalt and Saltwater Fishing segments and inflation-driven year-over-year price increases, partially offset by decreased unit volumes in our Cobalt and Saltwater Fishing segments resulting primarily from lower wholesale shipments, an unfavorable model mix in our Malibu segment and an unfavorable segment mix overall. Unit volume for the six months ended December 31, 2025, decreased 11 units, or 0.5%, to 2,235 units as compared to the six months ended December 31, 2024. Our unit volume decreased primarily due to lower wholesale shipments in our Cobalt and Saltwater Fishing segments, partially offset by increased unit volume in our Malibu segment primarily due to lower wholesale shipments during the same period in fiscal year 2024, as a result of elevated dealer inventory levels.

Current wording

Net sales for the three months ended March 31, 2026 increased $7.0 million, or 3.1%, to $235.7 million as compared to the three months ended March 31, 2025. The increase in net sales was driven primarily by $23.1 million of revenue from the new Saxdor segment due to the recent acquisition, a favorable model mix across all three existing segments, a favorable segment mix and year-over-year price increases, partially offset by decreased unit volumes across all three existing segments resulting primarily from lower wholesale shipments. Unit volume for the three months ended March 31, 2026, decreased 178 units, or 12.4%, to 1,253 units as compared to the three months ended March 31, 2025. Our unit volume decreased primarily due to lower wholesale shipments across all three existing segments driven by lower retail activity, partially offset by an additional 66 units contributed by Saxdor.

Previous wording

Net sales attributable to our Malibu segment decreased $3.5 million, or 4.7%, to $70.6 million for the three months ended December 31, 2025, compared to the three months ended December 31, 2024. Unit volumes attributable to our Malibu segment decreased 12 units for the three months ended December 31, 2025, compared to the three months ended December 31, 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 and an unfavorable model mix, partially offset by inflation-driven year-over-year price increases.

Current wording

Net sales attributable to our Malibu segment decreased $21.5 million, or 21.0%, to $80.7 million for the three months ended March 31, 2026, compared to the three months ended March 31, 2025. Unit volumes attributable to our Malibu segment decreased 201 units for the three months ended March 31, 2026, compared to the three months ended March 31, 2025, 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 and partially offset by a favorable model mix and year-over-year price increases.

Previous wording

Net sales attributable to our Saltwater Fishing segment decreased $4.8 million, or 6.8%, to $65.3 million, for the three months ended December 31, 2025, compared to the three months ended December 31, 2024. Unit volumes attributable to our Saltwater Fishing segment decreased 35 units for the three months ended December 31, 2025 compared to the three months ended December 31, 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 a favorable model mix and inflation-driven year-over-year price increases.

Current wording

Net sales attributable to our Saltwater Fishing segment increased $1.5 million, or 2.1%, to $73.4 million, for the three months ended March 31, 2026, compared to the three months ended March 31, 2025. Unit volumes attributable to our Saltwater Fishing segment decreased 13 units for the three months ended March 31, 2026 compared to the three months ended March 31, 2025, primarily due to lower wholesale shipments driven by lower retail activity during the period. The increase in net sales was driven by a favorable model mix and year-over-year price increases partially offset by a decrease in units.

Previous wording

Net sales attributable to our Cobalt segment decreased $3.4 million, or 6.0%, to $52.6 million for the three months ended December 31, 2025, compared to the three months ended December 31, 2024. Unit volumes attributable to Cobalt decreased 69 units for the three months ended December 31, 2025 compared to the three months ended December 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 primarily 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 Cobalt segment increased $3.9 million, or 7.1%, to $58.4 million for the three months ended March 31, 2026, compared to the three months ended March 31, 2025. Unit volumes attributable to Cobalt decreased 30 units for the three months ended March 31, 2026 compared to the three months ended March 31, 2025, 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 year-over-year price increases, partially offset by a decrease in units.

Previous wording

Overall consolidated net sales per unit increased 4.1% to $170,544 per unit for the three months ended December 31, 2025, compared to the three months ended December 31, 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 model mix in our Malibu segment and an unfavorable segment mix overall. Net sales per unit for our Malibu segment decreased 2.4% to $137,686 per unit for the three months ended December 31, 2025, compared to the three months ended December 31, 2024, driven by an unfavorable model mix, partially offset by inflation-driven year-over-year price increases. Net sales per unit for our Saltwater Fishing segment increased 4.7% to $231,730 per unit for the three months ended December 31, 2025 driven by a favorable model mix and inflation-driven year-over-year price increases. Net sales per unit for our Cobalt segment increased 14.8% to $169,264 per unit for the three months ended December 31, 2025, compared to the three months ended December 31, 2024, driven by a favorable model mix and inflation-driven year-over-year price increases.

Current wording

Overall consolidated net sales per unit increased 17.7% to $188,107 per unit for the three months ended March 31, 2026, compared to the three months ended March 31, 2025. The increase in overall consolidated net sales per unit was driven primarily by a favorable model mix across all segments, a favorable segment mix including an incremental increase related to our new Saxdor segment, and year-over-year price increases. Net sales per unit for our Malibu segment increased 8.2% to $148,661 per unit for the three months ended March 31, 2026, compared to the three months ended March 31, 2025, driven by a favorable model mix and year-over-year price increases. Net sales per unit for our Saltwater Fishing segment increased 6.4% to $234,511 per unit for the three months ended March 31, 2026 driven by a favorable model mix and year-over-year price increases, partially offset by increased dealer incentive costs per unit. Net sales per unit for our Cobalt segment increased 16.8% to $176,544 per unit for the three months ended March 31, 2026, compared to the three months ended March 31, 2025, driven by a favorable model mix and year-over-year price increases. Since our acquisition on March 2, 2026, net sales per unit for our Saxdor segment was $350,561.

Previous wording

Cost of sales for the six months ended December 31, 2025 increased $24.1 million, or 7.9%, to $330.3 million as compared to the six months ended December 31, 2024. The increase in cost of sales was primarily driven by a 3.1% increase in net sales and higher per unit material and labor costs of $4.8 million, $5.2 million and $13.3 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.

Current wording

Cost of sales for the three months ended March 31, 2026 increased $11.5 million, or 6.3%, to $194.4 million as compared to the three months ended March 31, 2025. The increase in cost of sales was primarily driven by an increase in the cost of sales from the new Saxdor segment due to the recent acquisition and higher per unit material and labor costs of $4.6 million, $5.4 million and $4.2 million for the Malibu, Saltwater Fishing, and Cobalt segments, respectively, partially offset by a decrease in unit volumes across the Malibu, Saltwater Fishing, and Cobalt segments. The increase in per unit material and labor costs was primarily driven by increased prices due to fixed cost deleveraging due to lower unit volumes across all segments, a model mix that corresponds to higher costs per unit across all three existing segments and inflationary pressures.

Previous wording

Gross profit for the three months ended December 31, 2025 decreased $12.3 million, or 32.9%, to $25.1 million compared to the three months ended December 31, 2024. The decrease in gross profit was driven by lower net sales combined with increased cost of sales for the reasons noted above. Gross margin for the three months ended December 31, 2025 decreased 540 basis points from 18.7% to 13.3% driven primarily by fixed cost deleverage across all segments due to lower sales and higher per unit labor and material costs.

Current wording

Gross profit for the three months ended March 31, 2026 decreased $4.4 million, or 9.7%, to $41.3 million compared to the three months ended March 31, 2025. The decrease in gross profit was driven by the increased cost of sales for the reasons noted above. Gross margin for the three months ended March 31, 2026 decreased 250 basis points from 20.0% to 17.5% driven primarily by fixed cost deleveraging due to lower unit volumes across all three existing segments and higher per unit labor and material costs.

Previous wording

Selling and marketing expenses for the three months ended December 31, 2025 increased $0.1 million, or 1.4% to $6.1 million compared to the three months ended December 31, 2024. The increase was driven primarily by higher personnel-related expenses. As a percentage of sales, selling and marketing expenses increased 20 basis points to 3.2% for the three months ended December 31, 2025 compared to 3.0% for the three months ended December 31, 2024. General and administrative expenses for the three months ended December 31, 2025 decreased $5.7 million, or 21.5%, to $20.8 million as compared to the three months ended December 31, 2024 driven primarily by a decrease in legal fees, incentive pay and stock-based compensation expense. As a percentage of sales, general and administrative expenses decreased 230 basis points to 11.0% for the three months ended December 31, 2025 compared to 13.3% for the three months ended December 31, 2024. Amortization expense remained flat at $1.7 million for the three months ended December 31, 2025.

Current wording

Selling and marketing expenses for the three months ended March 31, 2026 increased $1.5 million, or 22.1% to $8.3 million compared to the three months ended March 31, 2025. The increase was driven primarily by higher personnel-related expenses, marketing events and an incremental increase in selling and marketing expenses due to the new Saxdor segment. As a percentage of sales, selling and marketing expenses increased 50 basis points to 3.5% for the three months ended March 31, 2026 compared to 3.0% for the three months ended March 31, 2025. General and administrative expenses for the three months ended March 31, 2026 increased $11.9 million, or 60.0%, to $31.8 million as compared to the three months ended March 31, 2025 driven primarily by acquisition related expenses related to the Saxdor acquisition, an incremental increase due to the new Saxdor segment and an increase in incentive pay and stock-based compensation expense. As a percentage of sales, general and administrative expenses increased 480 basis points to 13.5% for the three months ended March 31, 2026 compared to 8.7% for the three months ended March 31, 2025. Amortization expense increased $1.4 million to $3.1 million for the three months ended March 31, 2026 due to the additional intangibles acquired from the Saxdor acquisition.

Previous wording

Other expense (income), net for the three months ended December 31, 2025 decreased by $0.3 million, or 45.3% to $0.3 million, compared to the three months ended December 31, 2024. The decrease in other expense resulted primarily from decreased interest expense during the three months ended December 31, 2025 compared to the three months ended December 31, 2024.

Current wording

Other expense, net for the three months ended March 31, 2026 increased by $0.6 million, or 124.5% to $1.2 million, compared to the three months ended March 31, 2025. The increase in other expense resulted primarily from increased interest expense during the three months ended March 31, 2026 compared to the three months ended March 31, 2025. Interest expense increased because of additional borrowings under our revolving credit facility to partially finance the purchase price for the Saxdor acquisition.

Previous wording

Our (benefit) provision for income taxes for the three months ended December 31, 2025, decreased $1.5 million, or 826.3%, to $(1.3) million compared to the three months ended December 31, 2024. The decrease primarily resulted from decreased pre-tax earnings and by carryback of research tax credits, offset partially by the impact of U.S. state taxes. For the three months ended December 31, 2025 and 2024, our effective tax rate was 34.1% and 6.9%, respectively. For the three months ended December 31, 2025, due to pre-tax losses, the Company's effective tax rate was increased by carryback of research tax credits and the impact of U.S. state taxes. These were partially offset by shortfall expense generated by certain stock-based compensation, and the foreign rate differential of our Australian subsidiary. For the three months ended December 31, 2024, the Company's effective tax rate was reduced by net operating losses and research tax credits. These reductions were partially offset by shortfall expense generated by certain stock-based compensation, certain federal tax code limitations, and the impact of U.S. state taxes.

Current wording

Our (benefit) provision for income taxes for the three months ended March 31, 2026, decreased $4.3 million, or 117.2%, to $(0.6) million compared to the three months ended March 31, 2025. The decrease primarily resulted from decreased pre-tax earnings and corresponding state taxes, and impacts from the acquisition of Saxdor. The decrease was offset partially by a reduction in research credits generated for the quarter. For the three months ended March 31, 2026 and 2025, our effective tax rate was 20.6% and 21.8%, respectively. For the three months ended March 31, 2026, due to pre-tax losses, our effective tax rate was increased by research tax credits. The increase in our effective tax rate was partially offset by the foreign rate differential of our Australian and European subsidiaries. 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.

Previous wording

Comparison of the Six Months Ended December 31, 2025 to the Six Months Ended December 31, 2024

Current wording

Comparison of the Nine Months Ended March 31, 2026 to the Nine Months Ended March 31, 2025

Previous wording

Net sales for the three months ended December 31, 2025 decreased $11.7 million, or 5.8%, to $188.6 million as compared to the three months ended December 31, 2024. The decrease in net sales was driven primarily by decreased unit volumes across all segments resulting primarily from lower wholesale shipments, and driven by an unfavorable model mix in our Malibu segment and an unfavorable segment mix overall, partially offset by a favorable model mix in our Cobalt and Saltwater Fishing segments and inflation-driven year-over-year price increases. Unit volume for the three months ended December 31, 2025, decreased 116 units, or 9.5%, to 1,106 units as compared to the three months ended December 31, 2024. Our unit volume decreased primarily due to lower wholesale shipments across all segments driven by lower retail activity.

Current wording

Net sales for the nine months ended March 31, 2026 increased $18.5 million, or 3.1%, to $619.1 million as compared to the nine months ended March 31, 2025. The increased net sales were driven primarily by $23.1 million of revenue from the new Saxdor segment due to the recent acquisition, a favorable model mix in the Cobalt and Saltwater Fishing Segments, and year-over-year price increases partially offset by decreased unit volumes across all three existing segments resulting primarily from lower wholesale shipments. Unit volume for the nine months ended March 31, 2026, decreased 189 units, or 5.1%, to 3,488 units as compared to the nine months ended March 31, 2025. Our unit volume decreased primarily due to lower wholesale shipments across all three existing segments driven by lower retail activity, partially offset by an additional 66 units contributed by Saxdor.

Previous wording

Net sales attributable to our Saltwater Fishing segment decreased $5.2 million, or 3.9%, to $129.7 million, for the six months ended December 31, 2025, compared to the six months ended December 31, 2024. Unit volumes attributable to our Saltwater Fishing segment decreased 47 units for the six months ended December 31, 2025 compared to the six months ended December 31, 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 a favorable model mix and inflation-driven year-over-year price increases.

Current wording

Net sales attributable to our Saltwater Fishing segment decreased $3.7 million, or 1.8%, to $203.1 million, for the nine months ended March 31, 2026, compared to the nine months ended March 31, 2025. Unit volumes attributable to our Saltwater Fishing segment decreased 60 units for the nine months ended March 31, 2026 compared to the nine months ended March 31, 2025, 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 a favorable model mix and year-over-year price increases.

Previous wording

Net sales attributable to our Cobalt segment decreased $2.4 million, or 2.3%, to $104.4 million for the six months ended December 31, 2025, compared to the six months ended December 31, 2024. Unit volumes attributable to Cobalt decreased 106 units for the six months ended December 31, 2025 compared to the six months ended December 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 primarily 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 Cobalt segment increased $1.5 million, or 0.9%, to $162.8 million for the nine months ended March 31, 2026, compared to the nine months ended March 31, 2025. Unit volumes attributable to Cobalt decreased 136 units for the nine months ended March 31, 2026 compared to the nine months ended March 31, 2025, 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 year-over-year price increases, partially offset by a decrease in units.

Previous wording

Overall consolidated net sales per unit increased 3.6% to $171,523 per unit for the six months ended December 31, 2025, compared to the six months ended December 31, 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 model mix in our Malibu segment and an unfavorable segment mix overall. Net sales per unit for our Malibu segment decreased 0.8% to $142,036 per unit for the six months ended December 31, 2025, compared to the six months ended December 31, 2024, driven by an unfavorable model mix, partially offset by inflation-driven year-over-year price increases. Net sales per unit for our Saltwater Fishing segment increased 4.0% to $227,482 per unit for the six months ended December 31, 2025 driven by a favorable model mix and inflation-driven year-over-year price increases. Net sales per unit for our Cobalt segment increased 14.6% to $170,049 per unit for the six months ended December 31, 2025, compared to the six months ended December 31, 2024, driven by a favorable model mix and inflation-driven year-over-year price increases.

Current wording

Overall consolidated net sales per unit increased 8.7% to $177,481 per unit for the nine months ended March 31, 2026, compared to the nine months ended March 31, 2025. The increase in overall consolidated net sales per unit was driven primarily by a favorable model mix in our Cobalt and Saltwater Fishing segments, an incremental increase related to our new Saxdor segment and year-over-year price increases. Net sales per unit for our Malibu segment increased 2.7% to $144,292 per unit for the nine months ended March 31, 2026, compared to the nine months ended March 31, 2025, driven by year-over-year price increases. Net sales per unit for our Saltwater Fishing segment increased 4.9% to $229,975 per unit for the nine months ended March 31, 2026 driven by a favorable model mix and year-over-year price increases, partially offset by increased dealer incentive costs per unit. Net sales per unit for our Cobalt segment increased 15.4% to $172,324 per unit for the nine months ended March 31, 2026, compared to the nine months ended March 31, 2025, driven by a favorable model mix and year-over-year price increases. Since our acquisition on March 2, 2026, net sales per unit for our Saxdor segment was $350,561.

Previous wording

Cost of sales for the three months ended December 31, 2025 increased $0.6 million, or 0.4%, to $163.5 million as compared to the three months ended December 31, 2024. The increase in cost of sales was primarily driven by higher per unit material and labor costs of $2.4 million, $3.0 million and $7.0 million for the Malibu, Saltwater Fishing, and Cobalt segments, respectively, partially offset by a 5.8% decrease in net sales due to lower unit volumes. The increase in per unit material and labor costs was primarily driven by increased prices due to fixed cost deleverage across all segments, a model mix that corresponds to higher costs per unit for the Saltwater Fishing and Cobalt segments and inflationary pressures.

Current wording

Cost of sales for the nine months ended March 31, 2026 increased $35.6 million, or 7.3%, to $524.7 million as compared to the nine months ended March 31, 2025. The increase in cost of sales was primarily driven by cost of sales from the new Saxdor segment due to the recent acquisition and higher per unit material and labor costs of $10.8 million, $10.6 million and $17.7 million for the Malibu, Saltwater Fishing, and Cobalt segments, respectively, partially offset by decreased unit volumes. The increase in per unit material and labor costs was primarily driven by increased prices due to fixed cost deleveraging due to lower unit volumes across all three existing 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 six months ended December 31, 2025 decreased $12.6 million, or 19.2%, to $53.1 million compared to the six months ended December 31, 2024. The decrease in gross profit was driven primarily by increased cost of sales for the reasons noted above, partially offset by higher net sales. Gross margin for the six months ended December 31, 2025 decreased 380 basis points from 17.6% to 13.8% driven primarily by fixed cost deleverage in the Cobalt and Saltwater Fishing Segments due to lower sales and higher per unit labor and material costs across all segments.

Current wording

Gross profit for the nine months ended March 31, 2026 decreased $17.0 million, or 15.3%, to $94.3 million compared to the nine months ended March 31, 2025. The decrease in gross profit was driven primarily by increased cost of sales for the reasons noted above. Gross margin for the nine months ended March 31, 2026 decreased 330 basis points from 18.5% to 15.2% driven primarily by fixed cost deleveraging due to lower unit volumes across all three existing segments and higher per unit labor and material costs.

Previous wording

Selling and marketing expenses for the six months ended December 31, 2025 increased $1.5 million, or 13.9% to $12.4 million compared to the six months ended December 31, 2024. The increase was driven primarily by higher personnel-related expenses and marketing events. As a percentage of sales, selling and marketing expenses increased 30 basis points to 3.2% for the six months ended December 31, 2025 compared to 2.9% for the six months ended December 31, 2024. General and administrative expenses for the six months ended December 31, 2025 decreased $12.2 million, or 22.6%, to $41.6 million as compared to the six months ended December 31, 2024 driven primarily by a $3.5 million legal settlement for the six months ended December 31, 2024, along with decreased legal fees and decreases in stock-based compensation expense and incentive pay. As a percentage of sales, general and administrative expenses decreased 360 basis points to 10.9% for the six months ended December 31, 2025 compared to 14.5% for the six months ended December 31, 2024. Amortization expense remained flat at $3.4 million for the six months ended December 31, 2025.

Current wording

Selling and marketing expenses for the nine months ended March 31, 2026 increased $3.0 million, or 17.1% to $20.7 million compared to the nine months ended March 31, 2025. The increase was driven primarily by higher personnel-related expenses and marketing events and an incremental increase due to the new Saxdor segment. As a percentage of sales, selling and marketing expenses increased 40 basis points to 3.3% for the nine months ended March 31, 2026 compared to 2.9% for the nine months ended March 31, 2025. General and administrative expenses for the nine months ended March 31, 2026 decreased $0.27 million, or 0.4%, to $73.4 million as compared to the nine months ended March 31, 2025 driven primarily by a $3.5 million legal settlement for the nine months ended March 31, 2025, along with decreased legal fees, partially offset by acquisition related expenses incurred due to the Saxdor acquisition and an incremental increase due to the new Saxdor segment. As a percentage of sales, general and administrative expenses decreased 40 basis points to 11.9% for the nine months ended March 31, 2026 compared to 12.3% for the nine months ended March 31, 2025. Amortization expense increased $1.4 million to $6.5 million for the nine months ended March 31, 2026 due to the additional intangibles acquired from the Saxdor acquisition.

Previous wording

Other expense (income), net for the six months ended December 31, 2025 decreased by $1.1 million, or 113.3% to other income of $0.1 million. The decrease in other expense (income) was due to other income from an adjustment in our tax receivable agreement liability mainly due to decreased blended federal and state tax rates used as a result of OB3 tax reform changes, and in turn, a decrease in the future benefit we expect to pay under our tax receivable agreement with pre-IPO owners.

Current wording

Other expense, net for the nine months ended March 31, 2026 decreased by $0.4 million, or 30.1% to $1.0 million. The decrease in other expense was due to other income from an adjustment in our tax receivable agreement liability mainly due to decreased blended federal and state tax rates used as a result of OB3 tax reform changes, and in turn, a decrease in the future benefit we expect to pay under our tax receivable agreement with pre-IPO owners. The decrease in other expense was partially offset by an increase in interest expense. Interest expense increased because of additional borrowings under our revolving credit facility to partially finance the purchase price for the Saxdor acquisition.

Previous wording

Our (benefit) provision for income taxes for the six months ended December 31, 2025, decreased $0.3 million, or 47.4%, to $(1.0) million compared to the six months ended December 31, 2024. The decrease primarily resulted from carryback of research tax credits. This was partially offset by the impact of the change in tax law enacted, in accordance with OB3, through the remeasurement of our deferred tax assets. For the six months ended December 31, 2025, due to pre-tax losses, the Company's effective tax rate was increased by carryback of research tax credits and the impact of U.S. state taxes. These were partially offset by shortfall expense generated by certain stock-based compensation, and the foreign rate differential of our Australian subsidiary. For the six months ended December 31, 2024, due to year-to date pre-tax losses, the Company's effective tax rate was reduced by shortfall expense generated by certain stock-based compensation and the foreign rate differential of our Australian subsidiary. This was partially offset by the impact of U.S. state taxes.

Current wording

Our (benefit) provision for income taxes for the nine months ended March 31, 2026, decreased $4.6 million, or 153.9%, to $(1.6) million compared to the nine months ended March 31, 2025. The decrease primarily resulted from decreased pre-tax earnings and corresponding state taxes, and impacts from the acquisition of Saxdor. For the nine months ended March 31, 2026, due to pre-tax losses, our effective tax rate was increased by carryback of research tax credits and the impact of U.S. state taxes. The increase was partially offset by shortfall expense generated by certain stock-based compensation, and the foreign rate differential of our Australian and Saxdor subsidiaries. For the nine months ended March 31, 2026, our effective tax rate was also reduced by the impact of the change in tax law enacted, in accordance with OB3, through the remeasurement of our deferred tax assets. For the nine months ended March 31, 2025, our effective tax rate was reduced by research tax credits. This reduction was partially offset by shortfall expense generated by certain stock-based compensation, certain federal tax code limitations, and the impact of 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 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 six months ended December 31, 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.

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 nine months ended March 31, 2026 and 2025, 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 (loss) income before interest expense, income taxes, depreciation, amortization, and non-cash, non-operating expenses or other expenses that we do not believe are indicative of our ongoing expenses, including certain professional fees, litigation settlements, non-cash compensation expense and adjustments to our tax receivable agreement liability. We define Adjusted EBITDA margin as Adjusted EBITDA divided by net sales. Adjusted EBITDA and Adjusted EBITDA margin are not measures of net (loss) income 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.

Current wording

We define Adjusted EBITDA as net (loss) income before interest expense, income taxes, depreciation, amortization, and non-cash, non-operating expenses or other expenses that we do not believe are indicative of our ongoing expenses, including certain professional fees, litigation settlements, acquisition and integration related expenses, non-cash compensation expense, and adjustments to our tax receivable agreement liability. We define Adjusted EBITDA margin as Adjusted EBITDA divided by net sales. Adjusted EBITDA and Adjusted EBITDA margin are not measures of net (loss) income 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.

Previous wording

Adjusted net (loss) income per share is a non-GAAP financial measure that is used and disclosed by management in order to give management and its investors and analysts a more accurate picture of our underlying earnings performance. Adjusted net (loss) income per share, excludes items that management does not believe are indicative of our core operating performance.

Current wording

Adjusted net income per share is a non-GAAP financial measure that is used and disclosed by management in order to give management and its investors and analysts a more accurate picture of our underlying earnings performance. Adjusted net income per share, excludes items that management does not believe are indicative of our core operating performance.

Previous wording

We define adjusted net (loss) income per share as net (loss) income attributable to Malibu Boats, Inc. per share, excluding income tax (benefit) expense, before non-cash, non-operating expenses, or other expenses that we do not believe are indicative of our ongoing expenses, including litigation settlements, acquisition related amortization, certain professional fees and non-cash compensation expense, and reflecting an adjustment for income tax expense on adjusted (loss) income before income taxes at our estimated effective income tax rate.

Current wording

We define adjusted net income per share as net (loss) income attributable to Malibu Boats, Inc. per share, excluding income tax (benefit) expense, before non-cash, non-operating expenses, or other expenses that we do not believe are indicative of our ongoing expenses, including litigation settlements, acquisition related amortization, acquisition and integration related expenses, certain professional fees and non-cash compensation expense, and reflecting an adjustment for income tax expense on adjusted income before income taxes at our estimated effective income tax rate.

Previous wording

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

Current wording

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

Previous wording

The following table sets forth a reconciliation of net (loss) income per share attributable to Malibu Boats, Inc. as determined in accordance with GAAP to adjusted net (loss) income per share for the periods indicated (dollars in thousands):

Current wording

The following table sets forth a reconciliation of net (loss) income per share attributable to Malibu Boats, Inc. as determined in accordance with GAAP to adjusted net income per share for the periods indicated (dollars in thousands):

Previous wording

Our primary uses of cash have been for funding working capital and capital investments, repayments under our debt arrangements, acquisitions, cash distributions to members of the LLC, cash payments under our tax receivable agreement and stock repurchases under our stock repurchase program. For both the short term and the long term, our sources of cash to meet these needs have primarily been operating cash flows, borrowings under our revolving credit facility and short and long-term debt financings from banks and financial institutions. We believe that our cash on hand, cash generated by operating activities and funds available under our revolving credit facility will be sufficient to finance our operating activities for at least the next twelve months and beyond.

Current wording

Our primary uses of cash have been for funding working capital and capital investments, repayments under our debt arrangements, acquisitions, cash payments under our tax receivable agreement and stock repurchases under our stock repurchase program. For both the short term and the long term, our sources of cash to meet these needs have primarily been operating cash flows, borrowings under our revolving credit facility and short and long-term debt financings from banks and financial institutions. We believe that our cash on hand, cash generated by operating activities and funds available under our revolving credit facility will be sufficient to finance our operating activities for at least the next twelve months and beyond.