MALIBU BOATS, INC.

(Dollars in thousands, except per unit and share and per share data)

1. Organization, Basis of Presentation, and Summary of Significant Accounting Policies

Organization

Malibu Boats, Inc. ("MBI" and, together with its subsidiaries, the "Company" or "Malibu"), a Delaware corporation formed on November 1, 2013, is the sole managing member of Malibu Boats Holdings, LLC, a Delaware limited liability company (the "LLC"). The Company operates and controls all of the LLC's business and affairs and, therefore, pursuant to Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 810, Consolidation, consolidates the financial results of the LLC and its subsidiaries, and records a non-controlling interest for the economic interest in the Company held by the non-controlling holders of units in the LLC ("LLC Units"). The LLC was formed in 2006. The LLC, through its wholly owned subsidiary, Malibu Boats, LLC, ("Boats LLC"), is engaged in the design, engineering, manufacturing and marketing of innovative, high-quality, recreational powerboats that are sold through a world-wide network of independent dealers. On March 2, 2026, the Company acquired all of the equity interests of Saxdor Yachts Oy, a Finnish limited company ("Saxdor"). In addition to the Saxdor family of brands, the Company sells its boats under eight other brands -- Malibu, Axis, Pursuit, Maverick, Cobia, Pathfinder, Hewes, and Cobalt brands. In connection with the acquisition of Saxdor, the Company revised its segment reporting to report its results of operations under four reportable segments - Malibu, Saltwater Fishing, Cobalt, and Saxdor.

Saxdor Acquisition

On March 2, 2026, the Company acquired Saxdor for an aggregate purchase price of approximately $211.5 million pursuant to a Securities Purchase Agreement (the "Purchase Agreement"). The consideration was comprised of approximately $137.2 million in cash,1,523,794 shares of common stock of the Company, and the Company's potential earnout payments (the "Earnout Consideration") with an initial fair value of $32.6 million. The cash consideration was financed through cash on hand and borrowings under the Company’s revolving credit facility. The potential Earnout Consideration has a maximum potential payout of $84.2 million and is to be paid out to the sellers in calendar year 2027, 2028, and 2029 based on the results of the remainder of calendar year 2026 and the subsequent two calendar years (the "Earnout Period"), subject to the achievement of certain specified post-closing operating and financial targets. The Earnout Consideration may be paid in the form of cash, common stock or a combination thereof, as calculated and determined in accordance with the Purchase Agreement. The form of Earnout Consideration to be paid is at the sole discretion of the Company. The preliminary purchase price was subject to certain post-closing working capital adjustments. As such, the inputs to the aggregate preliminary purchase price described above differ from our closing 8-K filed for the Saxdor acquisition.

Saxdor, headquartered in Finland, is a leading European designer and manufacturer of premium adventure dayboats and one of the world’s fastest-growing boat brands. The Company acquired Saxdor for the purpose of expanding the Company's global reach, in both manufacturing and sales, as well as strengthening Malibu's reputation as a leading manufacturer of premier boats. See further discussion in Note 4 — Acquisitions.

Segment Information

Effective March 31, 2026, the Company revised its segment reporting to account for its acquisition of Saxdor. The Company previously hadthree reportable segments, Malibu, Saltwater Fishing, and Cobalt. As a result of the Saxdor acquisition, the Company hasfour reportable segments, Malibu, Saltwater Fishing, Cobalt, and Saxdor. See Note 18 — Segment Reporting.

Basis of Presentation

The accompanying unaudited interim condensed consolidated financial statements of the Company have been prepared in accordance with U.S. generally accepted accounting principles ("GAAP") for interim condensed financial statements and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all information and disclosures of results of operations, financial position and changes in cash flow in conformity with GAAP for complete financial statements. Such statements should be read in conjunction with the audited consolidated financial statements and notes thereto of Malibu and subsidiaries for the year ended June 30, 2025, included in the Company's Annual Report on Form 10-K. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Units and shares are presented as whole numbers, while all dollar amounts are presented in thousands, unless otherwise noted.

Principles of Consolidation

The accompanying unaudited interim condensed consolidated financial statements include the operations and accounts of the Company and all subsidiaries thereof. All intercompany balances and transactions have been eliminated upon consolidation.

Recent Accounting Pronouncements

In December 2023, the FASB issued ASU No. 2023-09"Income Taxes (Topic 740): Improvements to Income Tax Disclosures" which requires two primary enhancements of 1) disaggregated information on a reporting entity’s effective tax rate reconciliation, and 2) information on income taxes paid. For public business entities, the new requirements will be effective for annual periods beginning after December 15, 2024. The guidance will be applied on a prospective basis with the option to apply the standard retrospectively. Early adoption is permitted. The Company is currently assessing the pronouncement and its impact on its income tax disclosures and related cash flow disclosures, but it does not expect the pronouncement to impact the Company’s results of operations or financial condition.

In November 2024, the FASB issued ASU No. 2024-03"Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses"which requires disclosure, in the notes to financial statements, of specified information about certain costs and expenses. The updated standard is effective for annual periods beginning after December 15, 2026 and interim periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the effect of adopting this ASU.

In December 2025, the FASB issued ASU No. 2025-10"Government Grants (Topic 832): Accounting for Government Grants Received by Business Entities"which establishes the accounting for a government grant received by a business entity, including guidance for (1) a grant related to an asset and (2) a grant related to income. The updated standard is effective for annual periods beginning after December 15, 2028 and interim periods within those annual reporting periods. Early adoption is permitted. The Company is currently evaluating the effect of adopting this ASU.

The Company is not aware of any other new accounting pronouncements that are expected to have a significant impact on the Company's condensed consolidated financial statements and related disclosures.

2. Revenue Recognition

The following tables disaggregate the Company's revenue by major product type and geography:

Boat and Trailer Sales

Consists of sales of boats and trailers to the Company's dealer network, net of sales returns, discounts, rebates and free flooring incentives. Boat and trailer sales also includes optional boat features. Sales returns consist of boats returned by dealers under the Company's warranty program. Rebates, free flooring and discounts are incentives that the Company provides to its dealers based on sales of eligible products.

Part and Other Sales

Consists primarily of parts and accessories sales, royalty income and clothing sales. Parts and accessories sales include replacement and aftermarket boat parts and accessories sold to the Company's dealer network. Royalty income is earned from license agreements with various boat manufacturers, including Nautique, Chaparral, MasterCraft, and Tige related to the use of the Company's intellectual property.

3. Non-controlling Interest

The non-controlling interest on the unaudited interim condensed consolidated statements of operations and comprehensive (loss) income represents the portion of (loss) income attributable to the economic interest in the Company's subsidiary, the LLC, held by the non-controlling LLC Unit holders. Non-controlling interest on the unaudited interim condensed consolidated balance sheets represents the portion of net assets of the Company attributable to the non-controlling LLC Unit holders, based on the portion of the LLC Units owned by such Unit holders. The ownership of the LLC is summarized as follows:

Issuance of Additional LLC Units

Under the first amended and restated limited liability company agreement of the LLC, as amended (the "LLC Agreement"), the Company is required to cause the LLC to issue additional LLC Units to the Company when the Company issues additional shares of Class A Common Stock. Other than in connection with the issuance of Class A Common Stock in connection with an equity incentive program, the Company must contribute to the LLC net proceeds and property, if any, received by the Company with respect to the issuance of such additional shares of Class A Common Stock. The Company must cause the LLC to issue a number of LLC Units equal to the number of shares of Class A Common Stock issued such that, at all times, the number of LLC Units held by the Company equals the number of outstanding shares of Class A Common Stock. During the nine months ended March 31, 2026, the Company caused the LLC to issue a total of 209,916 LLC Units to the Company in connection with the issuance of Class A Common Stock for the vesting of awards granted under the Company's long term incentive plans, the issuance of restricted Class A Common Stock granted under the incentive plans and the issuance of Class A Common Stock to non-employee directors upon conversion of their fully vested restricted stock units. During the nine months ended March 31, 2026,4,931 LLC Units were canceled in connection with the vesting of share-based equity awards to satisfy employee tax withholding requirements,58,278 LLC Units were canceled in connection with stock awards with performance conditions that were deemed to not be achieved and 16,744 LLC Units were cancelled in connection with the forfeiture of stock awards. In connection with the cancellation of LLC Units described above, an equivalent of 79,953 treasury shares were retired in accordance with the LLC Agreement. Also during the nine months ended March 31, 2026,1,243,996 LLC Units were redeemed and canceled by the LLC in connection with the purchase and retirement of 1,243,996 shares under the Company's 2025 stock repurchase program. During the quarter ended March 31, 2026, the Company issued 1,523,794 LLC units in connection with the issuance of a similar number of Class A Common Stock shares for the acquisition of Saxdor.

Distributions and Other Payments to Non-controlling Unit Holders

Distributions for Taxes

As a limited liability company (treated as a partnership for income tax purposes), the LLC does not incur significant federal, state or local income taxes, as these taxes are primarily the obligations of its members. As authorized by the LLC Agreement, the LLC is required to distribute cash, to the extent that the LLC has cash available, on a pro rata basis, to its members to the extent necessary to cover the members’ tax liabilities, if any, with respect to their share of LLC earnings. The LLC makes such tax distributions to its members based on an estimated tax rate and projections of taxable income. If the actual taxable income of the LLC multiplied by the estimated tax rate exceeds the tax distributions made in a calendar year, the LLC may make true-up distributions to its members, if cash or borrowings are available for such purposes. As of March 31, 2026 and June 30, 2025, respectively, tax distributions payable to non-controlling LLC Unit holders were $204 and $0, respectively. During the nine months ended March 31, 2026 and 2025, there wereno tax distributions paid to the non-controlling LLC Unit holders.

Other Distributions

Pursuant to the LLC Agreement, the Company has the right to determine when distributions will be made to LLC members and the amount of any such distributions. If the Company authorizes a distribution, such distribution will be made to the members of the LLC (including the Company) pro rata in accordance with the percentages of their respective LLC Units.

4. Acquisitions

Saxdor Acquisition

On March 2, 2026, the Company completed the acquisition of 100% of the equity interests of Saxdor, a privately held Finnish company that manufactures premium adventure dayboats. Net assets and results of operations of Saxdor are included in our results commencing on March 2, 2026, and are reported as a separate reportable segment. The aggregate purchase price of approximately $211.5 million consisted of cash consideration,1,523,794 shares of common stock at $27.37 per share, and contingent considerations related to an earnout with an initial fair value of approximately $32.6 million estimated using a Monte Carlo simulation model. The earnout amount is subject to Saxdor meeting specified performance criteria during the remainder of calendar year 2026 and the subsequent two calendar years following the acquisition. The earnout was classified as a liability on our unaudited interim condensed consolidated balance sheet. The current portion of the earnout amount is included in accrued expenses and the remainder is included in other long-term liabilities. Any changes to the earnout amount will be expensed. The aggregate purchase price is preliminary and is subject to certain post-closing working capital adjustments.

Saxdor met the definition of a business pursuant to ASC 805, Business Combinations, and the acquisition was accounted for as a business combination under the acquisition method of accounting. The Company believes that the information available as of the closing date of the acquisition provides a reasonable basis for estimating fair values of the assets acquired and liabilities assumed. However, the valuation of certain assets and liabilities is preliminary and subject to change as additional information becomes available and as further analyses are performed. Accordingly, the preliminary purchase price allocation may be adjusted during the measurement period. The Company expects to complete its valuation analyses and finalize the purchase price allocation as soon as practicable, but no later than one year from the acquisition date, as required by ASC 805. The measurement period is expected to conclude no later than March 2, 2027.

The following table summarizes the preliminary estimated fair values assigned to the assets acquired and liabilities assumed. These preliminary fair values are based on internal Company and independent external third-party valuations and are subject to change as certain asset and liability valuations are finalized:

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

The fair values of the dealer relationships and backlog were determined using the multi-period excess earnings method, and the fair value of the trade name was determined using the relief-from-royalty method.

The definite-lived intangible assets were recorded at fair value as of the acquisition date and are amortized using the straight-line method to general and administrative expenses over their estimated useful lives. Indefinite-lived intangible assets are not amortized but instead are evaluated for potential impairment on an annual basis in accordance with the provisions of ASC Topic 350, Intangibles—Goodwill and Other. The weighted average useful life of identifiable definite-lived intangible assets acquired was 12.18 years. Goodwill of $33.6 million arising from the acquisition represents expected synergies and cost savings as well as intangible assets that do not qualify for separate recognition, including Saxdor's assembled workforce. The indefinite-lived intangible assets and goodwill acquired are expected to be deductible for income tax purposes.

Revenue and net income of Saxdor included in the unaudited interim condensed consolidated statement of operations and comprehensive (loss) income from the acquisition date through March 31, 2026, were $23.1 million and net loss of $0.6 million, respectively. Acquisition-related costs of $10.6 million were incurred during the quarter ended March 31, 2026, and are included in general and administrative expenses in the unaudited interim condensed consolidated statement of operations and comprehensive (loss) income for the three and nine months ended March 31, 2026.

Pro Forma Results

The following table presents unaudited supplemental pro forma results for the three and nine months ended March 31, 2026, and March 31, 2025, as if the acquisition had occurred on July 1, 2024, by applying the Company’s accounting policies to the results of Saxdor prior to the acquisition, assuming transaction costs had been incurred during the nine months ended March 31, 2025, reflecting the additional amortization that would have been charged, recognizing incremental interest expense associated with the financing for the acquisition under the Company’s revolving credit facility, and including the results of Saxdor prior to acquisition.

The unaudited pro forma information is presented for informational purposes only and is not indicative of the results of operations that would have been achieved if the business combination had taken place at such time.

The Company incurred approximately $10.6 million of acquisition-related expenses. The Company recognized a nonrecurring pro forma adjustment to the three and nine months ended March 31, 2026 to remove the impact of the transaction costs from the historical balances, while recognizing the $10.6 million of transaction expenses within the nine months ended March 31, 2025 to reflect the costs as if the acquisition was completed during the nine months ended March 31, 2025.

Additionally, the Company recognized a nonrecurring pro forma adjustment to pro forma earnings to amortize the fair value step up of Saxdor inventory acquired during the nine months ended March 31, 2025.

5. Inventories

Inventories consisted of the following:

6. Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consisted of the following:

7. Property, Plant and Equipment, net

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

Included within the current asset section of our unaudited interim condensed consolidated balance sheet as of March 31, 2026 is an amount classified as assets held for sale totaling $3,059. The property is valued at its carrying value, which is less than the fair value minus costs to sell. The assets held for sale consist of the land and building from the former Malibu Electronics (included within the Malibu segment) manufacturing building located in Alexander City, Alabama. The Company no longer has a use for this building as the current Malibu Electronics manufacturing building is now located in Loudon, Tennessee. The assets meet the criteria for classification as held for sale as the Company has committed to a plan to sell the assets and they are available for immediate sale in their present condition and expected to sell within 12 months.

Depreciation expense was $8,097 and $8,201 for the three months ended March 31, 2026 and 2025, respectively, and $24,355 and $23,399 for the nine months ended March 31, 2026 and March 31, 2025, respectively, substantially all of which was recorded in cost of sales.

8. Goodwill and Other Intangible Assets, net

The changes in the carrying amount of goodwill for the nine months ended March 31, 2026 were as follows:

(1) Net of accumulated impairment losses of $49,189 in our Saltwater Fishing segment.

(2) Refer to Note 4 — Acquisitions, for further details regarding the Saxdor acquisition.

The components of other intangible assets were as follows:

Amortization expense recognized on all amortizable intangibles was $3,077 and $1,676 for the three months ended March 31, 2026 and 2025, respectively, and $6,503 and $5,104 for the nine months ended March 31, 2026 and 2025, respectively.

During the quarter, the Company completed the Saxdor acquisition which resulted in the recognition of $33,645 of Goodwill, $62,010 of amortizable intangible assets, and $86,814 of indefinite-lived intangible assets. Refer to Note 4 — Acquisitions, for further details regarding the Saxdor acquisition.

Estimated future amortization expenses as of March 31, 2026 are as follows:

9. Accrued Expenses

Accrued expenses consisted of the following:

1 Accrued legal and professional fees include approximately $21,000 in insurance coverage proceeds that are subject in certain cases to reservations of rights by the insurance carriers. The proceeds will be considered a liability in accrued expenses until the resolution of the litigation. For more information, refer to Note 17 of our unaudited interim condensed consolidated financial statements included elsewhere in this Quarterly Report.

2 Government grant includes approximately $4,089 related to an Economic Development Grant to be paid by the State of Tennessee in relation to the Company's 2023 purchase of a production facility in Roane County, Tennessee and the moving production of certain models of Cobalt boats from Kansas to Tennessee. The grant requires the Company to create and maintain a specified number of jobs in order to retain the grant. The accrued liability will be relieved as the Company satisfies headcount requirements.

3 Contingent considerations related to the Saxdor acquisition are to be paid out in calendar year 2027, 2028, and 2029 based on the results of the remainder of calendar year 2026 and the subsequent two calendar years, respectively, if certain requirements are met. $9.1 million of the contingent consideration was recognized as a current liability given expected settlement within one year from the balance sheet date. The remaining $23.5 million is recognized in other long term liabilities on our unaudited interim condensed consolidated balance sheet for the quarter ended March 31, 2026. See further details on the Saxdor acquisition at Note 4 — Acquisitions.

10. Product Warranties

The Company's Malibu and Axis brand boats have a limited warranty for a period up tofive years. The Company's Cobalt brand boats have (1) a structural warranty of up toten years which covers the hull, deck joints, bulkheads, floor, transom, stringers, and motor mount and (2) afive-year bow-to-stern warranty on all components manufactured or purchased (excluding hull and deck structural components), including canvas and upholstery. Gel coat is covered up tothree years for Cobalt andone year for Malibu and Axis. Pursuit brand boats have (1) a limited warranty for a period of up tofive years on structural components such as the hull, deck and defects in the gel coat surface of the hull bottom and (2) a bow-to-stern warranty oftwo years (excluding hull and deck structural components). Maverick, Pathfinder and Hewes brand boats have (1) a limited warranty for a period of up tofive years on structural components such as the hull, deck and defects in the gelcoat surface of the hull bottom and (2) a bow-to-stern warranty ofone year (excluding hull and deck structural components). Cobia brand boats have (1) a limited warranty for a period of up toten years on structural components such as the hull, deck and defects in the gelcoat surface of the hull bottom and (2) a bow-to-stern warranty ofthree years (excluding hull and deck structural components). Saxdor brand boats have a limited warranty for a period of up totwo years or three-hundred running hours, whichever comes first, for structural components. For each boat brand, there are certain materials, components or parts of the boat that are not covered by the Company’s warranty and certain components or parts that are separately warranted by the manufacturer or supplier (such as the engine). Engines that the Company manufactures for Malibu and Axis models have a limited warranty of up tofive years or five-hundred hours.

The Company’s standard warranties require it or its dealers to repair or replace defective products during the warranty period at no cost to the consumer. The Company estimates warranty costs it expects to incur and records a liability for such costs at the time the product revenue is recognized. The Company utilizes historical claims trends and analytical tools to develop the estimate of its warranty obligation on a per boat basis, by brand and warranty year. Factors that affect the Company’s warranty liability include the number of units sold, historical and anticipated rates of warranty claims and cost per claim. The Company assesses the adequacy of its recorded warranty liabilities and adjusts the amounts as necessary. Future warranty claims may differ from the Company’s estimate of the warranty liability, which could lead to changes in the Company’s warranty liability in future periods.

Changes in the Company’s product warranty liability, which is included in accrued expenses on the unaudited interim condensed consolidated balance sheets, were as follows:

11. Financing

Outstanding debt consisted of the following:

Long-Term Debt

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 $350,000. As of March 31, 2026, Boats LLC had $165,000 outstanding under its revolving credit facility and $1,847 in outstanding letters of credit, with $183,153 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 $200,000, subject to the terms of the Credit Agreement and only if existing or new lenders choose to provide additional term or revolving commitments. On March 2, 2026, the Company borrowed $140,000 from the revolving credit facility to partially fund the purchase price of the Saxdor acquisition.

The obligations of Boats LLC under the Credit Agreement are guaranteed by the LLC, and, subject to certain exceptions, the present and future domestic subsidiaries of Boats LLC, and all such obligations are secured by substantially all of the assets of the LLC, Boats LLC and such subsidiary guarantors. Malibu Boats, Inc. is not a party to the Credit Agreement.

Borrowings under the Credit Agreement bear interest at a rate equal to either, at the Company's option, (i) the highest of the prime rate, the Federal Funds Rate (as defined in the Credit Agreement) plus 0.5%, or one-month Term SOFR (as defined in the Credit Agreement) plus 1% (the "Base Rate") or (ii) SOFR (as defined in the Credit Agreement), in each case plus an applicable margin ranging from 1.25% to 2.00% with respect to SOFR borrowings and 0.25% to 1.00% with respect to Base Rate borrowings. The applicable margin is based upon the consolidated leverage ratio of the LLC and its subsidiaries. As of March 31, 2026, the weighted average interest rate on the Company’s revolving credit facility was 4.92%. The Company is required to pay a commitment fee for any unused portion of the revolving credit facility which ranges from 0.15% to 0.30% per annum, depending on the LLC’s and its subsidiaries’ consolidated leverage ratio.

The Credit Agreement contains certain customary representations and warranties, and notice requirements for the occurrence of specific events such as the occurrence of any event of default or pending or threatened litigation. The Credit Agreement also requires compliance with certain customary financial covenants consisting of a minimum ratio of EBITDA to interest expense and a maximum ratio of total debt to EBITDA. The Credit Agreement contains certain customary restrictive covenants regarding indebtedness, liens, fundamental changes, investments, share repurchases, dividends and distributions, disposition of assets, transactions with affiliates, negative pledges, hedging transactions, certain prepayments of indebtedness, accounting changes and governmental regulation. For example, the Credit Agreement generally prohibits the LLC, Boats LLC and the subsidiary guarantors from paying dividends or making distributions, including to the Company. The credit facility permits, however, (i) distributions based on a member’s allocated taxable income, (ii) distributions to fund payments that are required under the LLC’s tax receivable agreement, (iii) purchase of stock or stock options of the LLC from former officers, directors or employees of loan parties or payments pursuant to stock option and other benefit plans up to $5,000 in any fiscal year, and (iv) repurchases of the Company's outstanding stock and LLC Units. In addition, the LLC may make unlimited dividends and distributions if its consolidated leverage ratio is 2.75 or less and certain other conditions are met, subject to compliance with certain financial covenants.

The Credit Agreement also contains customary events of default. If an event of default has occurred and continues beyond any applicable cure period, the administrative agent may (i) accelerate all outstanding obligations under the Credit Agreement or (ii) terminate the commitments, amongst other remedies. Additionally, the lenders are not obligated to fund any new borrowing under the Credit Agreement while an event of default is continuing.

Covenant Compliance

As of March 31, 2026, the Company was in compliance with the financial covenants contained in the Credit Agreement.

12. Leases

The Company leases certain manufacturing facilities, warehouses, office space, land, and equipment. The Company determines if a contract is a lease or contains an embedded lease at the inception of the agreement. Leases with an initial term of 12 months or less are not recorded on the unaudited interim condensed consolidated balance sheets. The Company does not separate non-lease components from the lease components to which they relate, and instead accounts for each separate lease and non-lease component associated with that lease component as a single lease component for all underlying asset classes. The Company's United States and Australia lease liabilities do not include future lease payments related to options to extend or terminate lease agreements as it is not reasonably certain those options will be exercised. However, certain European production facility leases acquired through our purchase of Saxdor are set to expire within the next 1-2 years and we have determined that extension options on those facilities are reasonably certain to be exercised forone extension period of 1-3 years, depending on the facility. Accordingly, the lease liabilities related to those production facilities include future lease payments related to options to extend the current lease agreements.

Other information concerning the Company's operating leases accounted for under ASC Topic 842, Leases is as follows:

(1) Includes short-term leases, which are insignificant, and are not included in the lease liability.

The lease liability for operating leases that contain variable escalating rental payments with scheduled increases that are based on the lesser of a stated percentage increase or the cumulative increase in an index, are determined using the stated percentage increase.

The weighted-average remaining lease term as of March 31, 2026 and 2025 was 2.76 and 3.24 years, respectively. As of March 31, 2026 and 2025, the weighted-average discount rate determined based on the Company's incremental borrowing rate is 7.32% and 4.57%, respectively.

Future annual minimum lease payments for the following fiscal years as of March 31, 2026 are as follows:

13. Tax Receivable Agreement Liability

MBI and the LLC have a Tax Receivable Agreement with the pre-IPO owners of the LLC that provides for the payment by MBI to the pre-IPO owners (or their permitted assignees) of 85% of the amount of the benefits, if any, that MBI is deemed to realize as a result of (i) increases in tax basis and (ii) certain other tax benefits related to MBI entering into the Tax Receivable Agreement, including those attributable to payments under the Tax Receivable Agreement. These contractual payment obligations are obligations of MBI and not of the LLC. MBI's Tax Receivable Agreement liability was determined on an undiscounted basis in accordance with ASC 450, Contingencies, since the contractual payment obligations were deemed to be probable and reasonably estimable.

For purposes of the Tax Receivable Agreement, the benefit deemed realized by MBI is computed by comparing the actual income tax liability of MBI (calculated with certain assumptions) to the amount of such taxes that MBI would have been required to pay had there been no increase to the tax basis of the assets of the LLC as a result of the purchases or exchanges, and had MBI not entered into the Tax Receivable Agreement.

The following table reflects the changes to MBI's tax receivable agreement liability:

The Tax Receivable Agreement further provides that, upon certain mergers, asset sales or other forms of business combinations or other changes of control, MBI (or its successor) would owe to the pre-IPO owners of the LLC a lump-sum payment equal to the present value of all forecasted future payments that would have otherwise been made under the Tax Receivable Agreement that would be based on certain assumptions, including a deemed exchange of LLC Units and that MBI would have sufficient taxable income to fully utilize the deductions arising from the increased tax basis and other tax benefits related to entering into the Tax Receivable Agreement. MBI also is entitled to terminate the Tax Receivable Agreement, which, if terminated, would obligate MBI to make early termination payments to the pre-IPO owners of the LLC. In addition, a pre-IPO owner may elect to unilaterally terminate the Tax Receivable Agreement with respect to such pre-IPO owner, which would obligate MBI to pay to such existing owner certain payments for tax benefits received through the taxable year of the election.

When estimating the expected tax rate to use in order to determine the tax benefit expected to be recognized from MBI’s increased tax basis as a result of exchanges of LLC Units by the pre-IPO owners of the LLC, the Company continuously monitors changes in its overall tax posture, including changes resulting from new legislation and changes as a result of new jurisdictions in which the Company is subject to tax.

As of March 31, 2026 and June 30, 2025, the Company recorded deferred tax assets totaling $119,724 and $120,382, respectively, associated with basis differences in assets upon acquiring an interest in the LLC and pursuant to making an election under Section 754 of the Internal Revenue Code of 1986 (the "Internal Revenue Code"), as amended. The aggregate Tax Receivable Agreement liability represents 85% of the tax benefits that the Company expects to receive in connection with the Section 754 election. In accordance with the Tax Receivable Agreement, the next annual payment is anticipated approximately 75 days after filing the federal return, which was filed on April 15, 2026.

14. Income Taxes

MBI is taxed as a C corporation for U.S. income tax purposes and is therefore subject to both federal and state taxation at a corporate level. The LLC continues to operate in the United States as a partnership for U.S. federal income tax purposes. Maverick Boat Group is separately subject to U.S. federal and state income tax with respect to its net taxable income.

Income taxes are computed in accordance with ASC Topic 740, Income Taxes, and reflect the net tax effects of temporary differences between the financial reporting carrying amounts of assets and liabilities and the corresponding income tax amounts. The Company has deferred tax assets and liabilities and maintains valuation allowances where it is more likely than not that all or a portion of deferred tax assets will not be realized. To the extent the Company determines that it will not realize the benefit of some or all of its deferred tax assets, such deferred tax assets will be adjusted through the Company’s (benefit) provision for income taxes in the period in which this determination is made.

As of March 31, 2026 and June 30, 2025, the Company maintained a total valuation allowance of $17,494 and $17,485, respectively, against deferred tax assets related to state net operating losses and future amortization deductions (with respect to the Section 754 election) that are reported in the Tennessee corporate tax return without offsetting income, which is taxable at the LLC. These also include a valuation allowance in the amount of $580 related to foreign tax credit carryforward that is not expected to be utilized in the future.

The Company’s consolidated interim effective tax rate is based upon expected annual income from operations, statutory tax rates and tax laws in the various jurisdictions in which the Company operates. Significant or unusual items, including those related to the change in U.S. tax law as well as other adjustments to accruals for tax uncertainties, are recognized in the quarter in which the related event occurs. On July 4, 2025, the U.S. enacted H.R. 1 "A bill to provide for reconciliation pursuant to Title II of H. Con. Res. 14", commonly referred to as the One Big Beautiful Bill Act ("OB3"). OB3 contains a broad range of provisions affecting businesses, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, including provisions related to bonus depreciation and research and development expensing, as well as modifications to foreign derived intangible income and the restoration of other favorable tax provisions. The legislation has multiple effective dates, with certain provisions, including elective 100% bonus depreciation for assets placed in service after January 19, 2025, with many others generally not effective until 2026 through 2027. The effects of the new legislation are recognized upon enactment. In accordance with OB3, the Company remeasured certain of its deferred tax assets for the nine months ended March 31, 2026.

For the three months ended March 31, 2026 and 2025, the Company's effective tax rate was 20.6% and 21.8%, respectively. For the nine months ended March 31, 2026 and 2025, the Company's effective tax rate was 22.3% and 22.3%, respectively. For the three and nine months ended March 31, 2026, 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 and European subsidiaries. For the nine months ended March 31, 2026, the Company's 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 three months ended March 31, 2025, the Company's effective tax rate was reduced by research tax credits. This reduction was partially offset by the impact of U.S. state taxes. For the nine months ended March 31, 2025, the Company's 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.

15. Stock-Based Compensation

The Company adopted a Long Term Incentive Plan (the "2014 Incentive Plan") which became effective on January 1, 2014, and reserves for issuance up to 1,700,000 shares of Malibu Boats, Inc. Class A Common Stock for the Company’s employees, consultants, members of its board of directors and other independent contractors at the discretion of the compensation committee. Incentive stock awards authorized under the 2014 Incentive Plan include unrestricted shares of Class A Common Stock, stock options, stock appreciation rights, restricted stock, restricted stock units, dividend equivalent awards and performance awards. As of December 31, 2024, no further shares were to be issued from the 2014 Incentive Plan. The number of any shares subject to stock options, restricted stock and restricted stock unit awards granted under the 2014 Incentive Plan that were outstanding as of October 23, 2024 and that are expired, forfeited, terminated, cancelled or otherwise reacquired after such date without having become vested will transfer to the 2024 Plan (defined below).

On October 23, 2024, at the Company’s annual meeting of stockholders (the "2024 Annual Meeting") the Company’s stockholders approved the Malibu Boats, Inc. 2024 Performance Incentive Plan (the "2024 Plan"), to replace the 2014 Incentive Plan effective as of the date of stockholder approval. The 2024 Plan provides for an aggregate limit of up to (i)1,020,000 shares of common stock plus (ii) the number of shares subject to stock options granted under the 2014 Incentive Plan and outstanding as of the date of the 2024 Annual Meeting, which expire, or for any reason are cancelled or terminated, after the date of the 2024 Annual Meeting without being exercised, plus (iii) the number of any shares subject to restricted stock or restricted stock unit awards under the 2014 Incentive Plan that are outstanding and unvested as of the date of the 2024 Annual Meeting which are forfeited, terminated, cancelled, or otherwise reacquired after the date of the 2024 Annual Meeting without having become vested. The Company’s directors, officers and employees, as well as any of the officers or employees of the Company’s subsidiaries, certain consultants and advisors are currently eligible to receive equity awards under the 2024 Plan. As of March 31, 2026,608,898 shares remain available for future issuance under the 2024 Plan.

On November 12, 2025, Bruce Beckman notified the Company of his resignation from his position as Chief Financial Officer and from all other positions held with the Company and each of its subsidiaries. Mr. Beckman's resignation as Chief Financial Officer was effective November 12, 2025, and Mr. Beckman served in an advisory role through December 31, 2025.

In connection with Mr. Beckman’s resignation, he forfeited 19,809 shares of the Company’s Class A Common Stock underlying unvested restricted stock awards and stock units previously granted to Mr. Beckman.

On November 13, 2025, under the 2024 Plan, Malibu Boats, Inc. granted an award to its newly-appointed Chief Financial Officer, David Black. The service-based stock award included 3,929 units that will vest in equal installments over three years. The grant date fair value of this award was $100 based on a stock price of $25.45 per share on the date of grant.

On November 21, 2025, under the 2024 Plan, Malibu Boats, Inc. granted 118,024 restricted service-based stock units to employees. The grant date fair value of these awards was $3,138 based on a stock price of $26.59 per share on the date of grant. The awards vest ratably over three years. Stock-based compensation expense attributable to the service-based units is amortized on a straight-line basis over the requisite service period.

On November 26, 2025, under the 2024 Plan, Malibu Boats, Inc. granted 33,287 restricted service-based stock awards to its Chief Executive Officer, Steve Menneto. The grant date fair value of these awards was $960 based on a stock price of $28.84 per share on the date of grant. The awards vest ratably over four years. Stock-based compensation expense attributable to the service-based awards is amortized on a straight-line basis over the requisite service period.

On November 26, 2025, under the 2024 Plan, Malibu Boats, Inc. granted to its Chief Executive Officer a target amount of approximately 25,000 restricted stock awards with a performance condition. The number of shares that will ultimately be issued, if any, is based on the attainment of a specified amount of earnings during the fiscal year ending June 30, 2028. The maximum number of shares that can be issued if an elevated earnings target is met is approximately 37,000. The grant date fair value of the awards were estimated to be $720, based on a stock price of $28.84. Compensation costs associated with the performance awards are recognized over the requisite service period based on probability of achievement in accordance with ASC Topic 718, Compensation—Stock Compensation.

On November 26, 2025, under the 2024 Plan, Malibu Boats, Inc. granted to its Chief Executive Officer a target amount of approximately 25,000 stock awards with a market condition. The number of shares that will ultimately be issued, if any, is based on a total shareholder return ("TSR") computation that involves comparing the movement in Malibu Boats, Inc.'s stock price to movement in a market index from the grant date through November 26, 2028. The maximum number of shares that can be issued if an elevated TSR target is met is approximately 50,000. The grant date fair value of the awards were estimated to be $931 which is estimated using a Monte Carlo simulation. The Monte Carlo simulation model utilizes multiple input variables that determine the probability of satisfying the market condition stipulated in the award grant and calculates the fair market value for the stock award. Compensation costs are recognized over the requisite service period based on the Monte Carlo estimated probability of achievement in accordance with ASC Topic 718, Compensation—Stock Compensation.

The following is a summary of the changes in non-vested restricted stock units and restricted stock awards for the nine months ended March 31, 2026:

Stock-based compensation expense attributable to the Company's share-based equity awards was $1,408 and$264 for the three months ended March 31, 2026 and 2025, respectively, and $4,216 and $4,297 for the nine months ended March 31, 2026 and 2025, respectively. Stock-based compensation expense attributed to share-based equity awards issued under both the 2014 Incentive Plan and 2024 Plan are recognized on a straight-line basis over the terms of the respective awards and is included in general and administrative expense in the Company's unaudited interim condensed consolidated statements of operations and comprehensive (loss) income. Awards vesting during the three and nine months ended March 31, 2026 include 1,446 and 26,293 fully vested restricted stock units issued to non-employee directors for their service as directors for the Company.

16. Net (Loss) Income Per Share

Basic net (loss) income per share of Class A Common Stock is computed by dividing net (loss) income attributable to the Company's earnings by the weighted-average number of shares of Class A Common Stock outstanding during the period. The weighted-average number of shares of Class A Common Stock outstanding used in computing basic net (loss) income per share includes fully vested restricted stock units awarded to directors that are entitled to participate in distributions to common stockholders through receipt of additional units of equivalent value to the dividends paid to Class A Common Stockholders.

Diluted net (loss) income per share of Class A Common Stock is computed similarly to basic net (loss) income per share except the weighted-average shares outstanding are increased to include additional shares from the assumed exercise of any common stock equivalents using the treasury method, if dilutive. The Company's LLC Units and non-qualified stock options are considered common stock equivalents for this purpose. The number of additional shares of Class A Common Stock related to these common stock equivalents and stock options are calculated using the treasury stock method.

Stock awards with a performance condition that are based on the attainment of a specified amount of earnings are only included in the computation of diluted earnings per share to the extent that the performance condition would be achieved based on the current amount of earnings, and only if the effect would be dilutive.

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

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

1 The Company excluded (i)593,914 and 517,936 potentially dilutive shares from the calculation of diluted net (loss) income per share for the three months ended March 31, 2026 and 2025, respectively, and (ii)567,971 and 552,259 potentially dilutive shares from the calculation of diluted net (loss) income per share for the nine months ended March 31, 2026 and 2025, respectively.

The shares of Class B Common Stock do not share in the earnings or losses of Malibu Boats, Inc. and are therefore not included in the calculation. Accordingly, basic and diluted net (loss) income per share of Class B Common Stock have not been presented.

17. Commitments and Contingencies

Repurchase Commitments

In connection with its dealers’ wholesale floor plan financing of boats, the Company has entered into repurchase agreements with various lending institutions. The reserve methodology used to record an estimated expense and loss reserve in each accounting period is based upon an analysis of likely repurchases based on current field inventory and likelihood of repurchase. Subsequent to the inception of the repurchase commitment, the Company evaluates the likelihood of repurchase and adjusts the estimated loss reserve accordingly. When a potential loss reserve is recorded, it is presented in accrued liabilities in the accompanying unaudited interim condensed consolidated balance sheets. If the Company were obligated to repurchase a significant number of units under any repurchase agreement, its business, operating results and financial condition could be adversely affected. The total amount financed under the floor financing programs with repurchase obligations was $454,305 and $364,085 as of March 31, 2026 and June 30, 2025, respectively.

Repurchases and subsequent sales are recorded as a revenue transaction. The net difference between the repurchase price and the resale price is recorded against the loss reserve and presented in cost of sales in the accompanying unaudited interim condensed consolidated statements of operations and comprehensive (loss) income. During the nine months ended March 31, 2026, there wereno repurchases of any such inventory. During the nine months ended March 31, 2025, the Company repurchased 22 units that were subject to repurchase agreements. Of the 22 units repurchased during the nine months ended March 31, 2025,19 units totaling $2,500 were subject to the Company's repurchase agreement with M&T Bank ("Repurchase Agreement"), the lender under the floor financing plan for Tommy's Boats. These boats were resold during the three months ended September 30, 2024 above cost. As of March 31, 2026, the Company has not been notified about any probable repossessions. Therefore, the Company did not carry a reserve as of March 31, 2026 consistent with June 30, 2025.

The Company has collateralized receivables financing arrangements with a third-party floor plan financing provider for European dealers. Under terms of these arrangements, the Company transfers the right to collect a trade receivable to the financing provider in exchange for cash but agrees to repurchase the receivable if the dealer defaults. Since the transfer of the receivable to the financing provider does not meet the conditions for a sale under ASC Topic 860, Transfers and Servicing, the Company continues to report the transferred trade receivable in other current assets with an offsetting balance recorded as a secured obligation in accrued expenses in the Company's unaudited interim condensed consolidated balance sheets. As of March 31, 2026 and June 30, 2025, the Company hadno financing receivables recorded in other current assets and accrued expenses related to these arrangements.

Contingencies

Product Liability

The Company is engaged in a business that exposes it to claims for product liability and warranty claims in the event the Company’s products actually or allegedly fail to perform as expected or the use of the Company’s products results, or is alleged to result, in property damage, personal injury or death. Although the Company maintains product and general liability insurance of the types and in the amounts that the Company believes are customary for the industry, the Company is not fully insured against all such potential claims. The Company may have the ability to refer claims to its suppliers and their insurers to pay the costs associated with any claims arising from the suppliers’ products. The Company’s insurance covers such claims that are not adequately covered by a supplier’s insurance and provides for excess secondary coverage above the limits provided by the Company’s suppliers.

The Company may experience legal claims in excess of its insurance coverage or claims that are not covered by insurance, either of which could adversely affect its business, financial condition and results of operations. Adverse determination of material product liability and warranty claims made against the Company could have a material adverse effect on its financial condition and harm its reputation. In addition, if any of the Company's products are, or are alleged to be, defective, the Company may be required to participate in a recall of that product if the defect or alleged defect relates to safety. These and other claims that the Company faces could be costly to the Company and require substantial management attention. Refer to Note 10 of our unaudited interim condensed consolidated financial statements included elsewhere in this Quarterly Report for discussion of warranty claims. The Company insures against product liability claims and, except as disclosed below, believes there are no material product liability claims as of March 31, 2026 that will have a material adverse impact on the Company’s results of operations, financial condition or cash flows.

Litigation

Certain conditions may exist which could result in a loss, but which will only be resolved when future events occur. The Company, in consultation with its legal counsel, assesses such contingent liabilities, and such assessments inherently involve an exercise of judgment. If the assessment of a contingency indicates that it is probable that a loss has been incurred, the Company accrues for such contingent loss when it can be reasonably estimated. If the assessment indicates that a potentially material loss contingency is not probable but reasonably estimable, or is probable but cannot be estimated, the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material, is disclosed. If the assessment of a contingency deemed to be both probable and reasonably estimable involves a range of possible losses, the amount within the range that appears at the time to be a better estimate than any other amount within the range would be accrued. When no amount within the range is a better estimate than any other amount, the minimum amount in the range is accrued even though the minimum amount in the range is not necessarily the amount of loss that will be ultimately determined. Estimates of potential legal fees and other directly related costs associated with contingencies are not accrued but rather are expensed as incurred. Except as disclosed below, management does not believe there are any pending claims (asserted or unasserted) as of March 31, 2026 that will have a material adverse impact on the Company's financial condition, results of operations or cash flows.

Legal Proceedings

Insurance Litigation

MBI and its indirect subsidiary Boats LLC were defendants in the product liability case Batchelder et al. v. Malibu Boats, LLC, f/k/a Malibu Boats, Inc.; Malibu Boats West, Inc., et. al., Superior Court of Rabun County, Georgia, Civil Action Case No. 2016-CV-0114-C (the "Batchelder I Matter"), brought by, among others, Stephan Paul Batchelder and Margaret Mary Batchelder as Administrators of the Estate of Ryan Paul Batchelder, deceased ("Batchelder I Plaintiffs"). Boats LLC was also a defendant in a related product liability case, Stephan Paul Batchelder and Margaret Mary Batchelder, as Natural Guardians of

Josh Patrick Batchelder, a minor; Darin Batchelder, individually, and as Natural Guardian of Zach Batchelder, a minor; and Kayla Batchelder (the "Batchelder II Plaintiffs" and, together with the Batchelder I Plaintiffs, the "Batchelder Plaintiffs") v. Malibu Boats, LLC v. Dennis Michael Ficarra; Superior Court of Rabun County, Civil Action File No. 2022-CV-0034 (the "Batchelder II Matter" and, together with the Batchelder I Matter, the "Batchelder Matters"). On June 30, 2023, MBI and Boats LLC entered into a Confidential General Release and Settlement Agreement (the "Settlement Agreement") with the Batchelder Plaintiffs in settlement of the Batchelder Matters and all matters related to the Batchelder Matters. Pursuant to the Settlement Agreement, among other things, Malibu Boats, Inc., or Boats LLC, as the case may be, paid (or caused to be paid) to the Batchelder Plaintiffs and their agents a total of $100,000.

MBI and its subsidiaries, including Boats LLC, maintain liability insurance applicable to the Batchelder Matters described above with coverage up to $26,000. As of March 31, 2026, the Company had received approximately $21,000 in insurance coverage proceeds, subject in certain cases to reservations of rights by the insurance carriers. The Company contends that the insurance carriers are responsible for the entirety of the $100,000 settlement amount and related expenses, and therefore, the insurers’ payments to date are well below what they should have tendered to Boats LLC. Accordingly, on July 3, 2023, Boats LLC filed a complaint against Federal Insurance Company (a Chubb subsidiary) and Starr Indemnity & Liability Company alleging that the insurers unreasonably failed to comply with their obligations by refusing, negligently, and in bad faith, to settle covered claims within their available policy limits prior to trial. On April 8, 2024, the court dismissed Starr, noting that only Chubb had the contractual right and duty to settle the Batchelder matters prior to trial. The Court subsequently granted the Company's motion for partial summary judgment, which precludes Chubb from apportioning liability to Starr. Chubb filed a notice of appeal on September 26, 2024, with respect to the dismissal of Starr and the order granting partial summary judgment against Chubb. The Company intends to vigorously pursue its claims against the insurance carriers to recover the full $100,000 settlement amount and expenses (less any monies already tendered without reservation by the carriers). However, the Company cannot predict the outcome of such litigation.

Tommy's Boats and Matthew Borisch

On April 10, 2024, fifteen dealerships operated under common control of Tommy’s Boats ("Tommy’s Boats") filed a complaint against MBI and its indirect subsidiary Boats LLC in the United States District Court for the Eastern District of Tennessee (Case 3:24-cv-00166). The complaint alleges that MBI and Boats LLC breached obligations under dealership agreements with Tommy’s Boats, quantum meruit, unjust enrichment, promissory estoppel and intentional and negligent misrepresentations relating to the parties' commercial relationship. Tommy’s Boats sought monetary damages. Boats LLC took possession of 19 new model year 2024 boats according to a repurchase agreement with M&T Bank, the floor plan financing lender to Tommy’s Boats. These boats were subsequently resold during the three months ended September 30, 2024. On July 3, 2024, Mark E. Andrews, Chapter 11 Trustee (the "Trustee") for Tommy’s Boats voluntarily dismissed without prejudice the claims filed by Tommy's Boats. On August 16, 2024, Matthew Borisch, the principal owner of Tommy’s Boats, filed a complaint against Malibu Boats Inc, Malibu Boats LLC, and Jack Springer in the United States District Court for the Eastern District of Tennessee (Case 3:24-cv-00339), alleging similar allegations to those of the dismissed complaint against MBI and Boats LLC filed by Tommy’s Boats. Mr. Borisch amended his complaint on October 29, 2024.

On October 7, 2024, MBI and Boats LLC entered into a Settlement Agreement (the "Settlement Agreement") with the Trustee. Pursuant to the Settlement Agreement, upon the satisfaction of certain conditions, MBI and Boats LLC agreed to pay the Tommy’s Boats’ estate $3,500 in cash and MBI and Boats LLC and the Trustee agreed to mutual releases of all outstanding claims between them. The Settlement Agreement was approved by the Bankruptcy Court on November 19, 2024. On May 22, 2025, the Bankruptcy Court determined that most of Mr. Borisch’s claims are property of the Tommy’s Boats bankruptcy estates and required Mr. Borisch to withdraw or dismiss such claims against MBI and Boats, LLC while finding that Mr. Borisch could assert certain potential claims against Malibu Boats, Inc. and Malibu Boats, LLC in his individual capacity. In consideration of the Bankruptcy Court’s ruling, the Trustee agreed to cooperate with us in defense of Mr. Borisch’s claims. As a result of the Bankruptcy Court's determination and the Trustee's agreement to cooperate, on July 21, 2025, Malibu made the $3,500 settlement payment to the Tommy’s Boats estate to consummate the Settlement Agreement.

On July 11, 2025, Mr. Borisch sought leave to amend his complaint and has asserted that the remaining claims he has brought belong to him in his individual capacity. On September 2, 2025, the Company moved to dismiss Mr. Borisch’s complaint in its entirety. That motion is fully submitted and pending. The Company intends to vigorously defend itself against any claims alleged by Mr. Borisch. The Company is unable to provide any reasonable evaluation of the likelihood that a loss will be incurred or any reasonable estimate of the range of possible loss.

Securities Class Action Lawsuit

On April 29, 2024, a stockholder, individually and on behalf of all others similarly situated, filed a complaint against MBI and Jack Springer, Bruce Beckman, David Black, and Wayne Wilson as current and former officers of the Company in the United States District Court for the Southern District of New York (Case 1:24-cv-03254). On August 15, 2024, the Court appointed the Retiree Benefit Trust of the City of Baltimore as the Lead Plaintiff in the action. The amended complaint alleges violations of the Securities Exchange Act of 1934, as amended, in connection with allegedly false and misleading statements made by MBI related to the Company's business, operations, and prospects during the period from November 4, 2022 through May 1, 2024 ("Class Period"). The amended complaint alleges, among other things, that the defendants violated Sections 10(b) and 20(a) of the Exchange Act and SEC Rule 10b-5 by not disclosing alleged material adverse facts related to the Company’s inventory, demand and relationship with one of its former dealers, Tommy’s Boats, and accordingly, that certain statements made during the Class Period about the Company's business, operations, and prospects were materially misleading. On July 29, 2025, MBI and the individual defendants entered into a Stipulation and Agreement of Settlement with the Lead Plaintiff. The settlement was approved by the Court on February 9, 2026 and, without admitting fault or liability, provided for a settlement payment amount of $7,800 for the benefit of a settlement class comprised of all purchasers of MBI Securities during the Class Period. The settlement payment was fully funded with proceeds from MBI's directors and officers insurance carriers.

On November 25, 2024, a stockholder, derivatively on behalf of MBI, filed a complaint against Jack Springer, Ritchie Anderson, Bruce Beckman, David Black, and Wayne Wilson as current and former officers of the Company, as well as current and former members of the MBI Board of Directors in the United States District Court for the Southern District of New York (Case 1:24-cv-09018). On December 20, 2024, a second stockholder, derivatively on behalf of MBI, filed a complaint against the same defendants in the United States District Court for the Southern District of New York (Case 1:24-cv-09870). On January 7, 2025, these derivative actions were consolidated and stayed pending certain developments in the securities class action. On April 8, 2025, a third stockholder, derivatively on behalf of MBI, filed a complaint against the same defendants in the United States District Court for the Eastern District of Tennessee (Case 3:25-cv-00142). On May 16, 2025, a fourth stockholder, derivatively on behalf of MBI, filed a complaint against the same defendants, except for Ritchie Anderson, in the United States District Court for the Eastern District of Tennessee (Case 3:25-cv-00223). On November 17, 2025, the third and fourth derivative actions were consolidated, and on November 20, 2025, the consolidated case was stayed pending certain developments in the securities class action. The derivative actions allege violations of the Securities Exchange Act of 1934, as amended, as well as breach of fiduciary duties and unjust enrichment against the individual defendants in connection with the issues raised in the securities class action. On April 1, 2026, MBI and the stockholders reached an agreement in principle to settle all derivative actions. The settlement in principle contemplates certain corporate governance reforms by MBI and a payment of $850 in attorneys’ fees from MBI to the stockholders’ counsel, and is subject to the execution of a term sheet and Court approval. MBI anticipates that the settlement amount will be fully paid with proceeds from MBI's

directors and officers insurance carriers.

Customer Class Action Lawsuit

On May 31, 2024, a customer filed a class action complaint against MBI and Boats LLC in the United States District Court for the District of Delaware. (Case 1:24-cv-00648). The complaint, which purports to be filed on behalf of a nationwide class of customers, alleges violation of common law, the Magnuson-Moss Warranty Act, breach of express warranty, breach of implied warranty, and violation of California’s Consumer Legal Remedies Act based on guidance issued to customers of certain older model boats related to riding in the bow area of those boats. The Company intends to vigorously defend itself. The Company is unable to provide any reasonable evaluation of the likelihood that a loss will be incurred or any reasonable estimate of the range of possible loss.

18. Segment Reporting

We determine our operating segments based on how the Chief Operating Decision Maker (CODM), our Chief Executive Officer, manages the business, allocates resources, makes operating decisions and evaluates operating performance.

Effective March 31, 2026, the Company revised its segment reporting to account for its acquisition of Saxdor. The Company previously hadthree reportable segments, Malibu, Cobalt and Saltwater Fishing. The Company now hasfour reportable segments, Malibu, Saltwater Fishing, Cobalt, and Saxdor. The Malibu segment participates in the manufacturing, distribution, marketing and sale of Malibu and Axis performance sports boats throughout the world. The Saltwater Fishing segment participates in the manufacturing, distribution, marketing and sale throughout the world of Pursuit boats and the Maverick Boat Group brand boats (Maverick, Cobia, Pathfinder and Hewes). The Cobalt segment participates in the manufacturing, distribution, marketing and sale of Cobalt boats throughout the world. The Saxdor segment participates in the manufacturing, distribution, marketing and sale of Saxdor boats throughout the world. Separate financial information for thefour reportable segments is evaluated by the CODM to allocate resources and assess performance. Segment asset and capital expenditure information is not presented because it is not evaluated by the CODM at the segment level.

Intersegment transactions are not considered significant and consist primarily of engines and other materials that are eliminated within the Malibu segment. Certain costs are incurred at the corporate level and are partially allocated to the Company’s segments. These costs generally include shared service functions such as information technology, digital marketing, finance and accounting and supply chain. Each allocation is measured based on each segment's proportionate budgeted net sales for the current fiscal year. The remaining unallocated corporate costs, as well as costs related to stock-based compensation, interest expense, professional fees, acquisition and integration related expenses and other corporate costs, are reported within Corporate expenses and other as a reconciling item to our consolidated results.

Our segment operating performance measure is Segment Adjusted EBITDA. The CODM uses Segment Adjusted EBITDA to evaluate segment operating performance, generate future operating plans, and make strategic decisions. Segment Adjusted EBITDA excludes interest expense, income taxes, depreciation, amortization and non-cash, non-recurring or non-operating expenses (as shown in the table below). These charges are excluded from the evaluation of segment performance because it facilitates reportable segment performance comparisons on a period-to-period basis as these costs may vary independent of business performance.

There is no country outside of the United States from which the Company derived net sales equal to 10% of total net sales. Net sales are attributed to countries based on the location of the dealer. For information about how our reportable segments derive revenue, as well as revenue grouped by offerings and geographical region, refer to Note 2 – Revenue Recognition.

The following table presents financial information for the Company’s reportable segments for the three and nine months ended March 31, 2026 and 2025.

1 The primary difference between this significant segment expense and "general and administrative expense" within the Company’s unaudited interim condensed consolidated statements of operations relates to stock-based compensation, professional fees, acquisition and integration related expenses and litigation settlements which all fall under the "corporate expenses and other" category discussed below.

2 Other segment items include other income.

3 Corporate expenses and other represents costs incurred at the corporate level that are not allocated to the operating segments, specifically relating to certain executive compensation including stock-based compensation, corporate professional fees, litigation settlements, acquisition and integration related expenses, interest expense, adjustments to tax receivable agreement, other corporate costs, and unallocated shared service function expenses. "Corporate expenses and other" is included in the table above to reconcile the total of Segment Adjusted EBITDA to the Company’s consolidated (loss) income before income taxes.

4 Saxdor was acquired on March 2, 2026. Given the recent nature of the acquisition the Company has not yet allocated corporate costs to this segment.