MALIBU BOATS, INC.

(Tables 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. The Company sells its boats under nine brands -- Malibu, Axis, Pursuit, Maverick, Cobia, Pathfinder, Hewes, Cobalt, and Saxdor. The Company reports 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 $203.9 million pursuant to a Securities Purchase Agreement (the "Purchase Agreement"). The preliminary purchase price was subject to certain post-closing working capital adjustments. As such, the inputs to the aggregate preliminary purchase price differ from our closing 8-K filed for the Saxdor acquisition. See Note 4 — Acquisition for further details on the inputs to the purchase price and components of contingent consideration.

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 — Acquisition.

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, 2026, 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.

Beginning with the fiscal year ended June 30, 2026, and for all future periods, the Company discloses revenue recognized by geography under the categories "United States" and "International." This represents a change from prior years in which such revenue was disclosed under the categories "North America" and "International." As a result, the Company has recast the prior period revenue by geography to conform to the current period presentation. This reflects only a reclassification and did not impact total consolidated revenues, operating results, or cash flows for any period presented.

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 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 expects the standard to result in additional expense disaggregation disclosures but does not currently expect a material impact on its consolidated financial statements.

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.

Customer Deposits

Consists of cash payments received from dealers prior to the transfer of control of a boat to the customer. Customer deposits represent advance consideration received by the Company and are recognized as a liability until the related performance obligation is satisfied upon shipment or delivery of the boat to the dealer, at which point the deposit is recognized as revenue in accordance with the Company's revenue recognition policy. The Company expects all $40.8 million of customer deposits to be recognized as revenue during the next twelve months.

The following table provides information about customer deposits and the significant changes in the balances during the three months ended September 30, 2026:

3. Non-controlling Interest

The non-controlling interest on the unaudited interim condensed consolidated statements of operations and comprehensive income (loss) represents the portion of earnings or loss 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 three months ended September 30, 2026, the Company caused the LLC to issue a total of 10,226 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. During the three months ended September 30, 2026,26,044 LLC Units were cancelled in connection with stock awards with a performance condition that was deemed to not be achieved. In connection with the cancellation of LLC Units described above, an equivalent of 26,044 treasury shares were retired in accordance with the LLC Agreement.

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 September 30, 2026 and June 30, 2026, respectively, tax distributions payable to non-controlling LLC Unit holders were $0 and $60,000. During the three months ended September 30, 2026 and 2025, there were $36,000 and $0 tax distributions paid to the non-controlling LLC Unit holders, respectively.

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. Acquisition

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 $203.9 million consisted of cash consideration,1,523,794 shares of Class A Common Stock at $27.37 per share, and contingent consideration related to an earnout with an initial fair value of approximately $32.6 million estimated using a scenario-based model as well as a Monte Carlo simulation model. In addition, the purchase price included a net working capital adjustment and escrow receivable. The potential earnout consideration has a maximum potential payout of $84.2 million and is to be paid out to the sellers in calendar years 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 by Saxdor. The earnout was classified as a liability on our 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. The fair value of the earnout was estimated using significant unobservable inputs and is therefore classified as a Level 3 fair value measurement. These inputs include the estimated amount of the revenue forecast, revenue volatility and a risk-adjusted discount rate of approximately 18.5% used to adjust the probability-weighted cash flow payments to their present value.

1 Amounts presented are net of a $1.7 million offset for post-closing adjustments finalized in June 2026, which the Company intends, and has the legal right, to withhold from future earnout payments.

2 Any currency gain or loss on the earnout is recognized within other expense (income), net, in the Consolidated Statements of Operations and Comprehensive Income (Loss).

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 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. There have been no adjustments to the preliminary purchase price allocation during the three months ended September 30, 2026. While the measurement period remains open until March 2, 2027, the Company's valuation and assessment are substantially complete. The Company does not anticipate any further material adjustments to the preliminary valuations before the expiration of the measurement period.

The following table summarizes the preliminary estimated fair values assigned to the assets acquired and liabilities assumed as of March 2, 2026 (as adjusted). 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 (as adjusted) 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 12.93 years. Goodwill of $27.5 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 statement of operations and comprehensive income (loss) for the three months ended September 30, 2026, were $51.1 million and $0.4 million, respectively. Acquisition-related costs of $2.8 million were incurred during the three months ended September 30, 2026, and are included in general and administrative expenses in the unaudited consolidated statement of operations and comprehensive income (loss) for the three months ended September 30, 2026.

Pro Forma Financial Information (Unaudited)

The following unaudited pro forma consolidated results of operations for the three months ended September 30, 2025, assumes that the acquisition of Saxdor occurred as of July 1, 2024. The unaudited pro forma financial information combines historical results of Malibu and Saxdor, with adjustments for interest on debt financing, depreciation and amortization attributable to fair value estimates on acquired tangible and intangible assets for the respective periods.

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.

5. Inventories

Inventories consisted of the following:

6. Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consisted of the following:

1 As of June 30, 2026, other receivables included an escrow receivable of $5.7 million, adjusted for currency, recognized in connection with the Company's acquisition of Saxdor. This escrow receivable represents a portion of the cash consideration owed to the Company to settle final consideration payable under the Purchase Agreement after working capital, indebtedness, and closing cash adjustments. This was received during the three months ended September 30, 2026.

7. Property, Plant and Equipment, net

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

Included within the current asset section of our condensed consolidated balance sheet as of September 30, 2026 is an amount classified as assets held for sale totaling $3.1 million. 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 $8.2 million and $8.1 million for the three months ended September 30, 2026 and 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 three months ended September 30, 2026 were as follows:

1 Net of accumulated impairment losses of $49.2 million in our Saltwater Fishing segment.

The components of other intangible assets were as follows:

Amortization expense recognized on all amortizable intangibles was $4.7 million and $1.7 million for the three months ended September 30, 2026 and 2025, respectively.

Estimated future amortization expenses as of September 30, 2026 are as follows:

1 Presented on a calendar-year basis to reflect the change in the Company's fiscal year end to December 31. See Part II, Item 5, "Other Information."

9. Accrued Expenses

Accrued expenses consisted of the following:

1 Accrued legal and professional fees include approximately $6.0 million and $21.0 million as of September 30, 2026 and June 30, 2026, respectively, 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. During the three months ended September 30, 2026, the Company concluded that $15.0 million of insurance proceeds previously received from Starr Indemnity & Liability Company were no longer subject to a reservation of rights following Starr's dismissal from the related litigation. As a result, the Company derecognized the associated liability and recognized a $15.0 million reduction of general and administrative expense in the unaudited interim condensed consolidated statements of operations. 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 $4.1 million related to an Economic Development Grant paid by the State of Tennessee in relation to the Company's 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 consideration related to the Saxdor acquisition is 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. $3.8 million of the contingent consideration was recognized as a current liability given expected settlement within one year from the balance sheet date. The remaining $25.4 million is recognized in other long-term liabilities on our unaudited balance sheet as of September 30, 2026. See further details on the Saxdor acquisition in Note 4 — Acquisition.

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 gel coat 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 10, 2026, Malibu Boats, LLC (“Boats LLC”) entered into the Fourth Amended and Restated Credit Agreement (the “Credit Agreement”), which amended and restated the Company’s prior credit agreement. The Credit Agreement provides for a $250.0 million revolving credit facility and a $100.0 million term loan facility (“Term Loan A”), each of which matures on July 10, 2031. On the closing date, Boats LLC borrowed the full $100.0 million available under Term Loan A and used the net proceeds to repay a portion of the amounts outstanding under the prior revolving credit facility. Following the refinancing, $65.0 million remained outstanding under the new revolving credit facility. Subsequent to the closing date and during the three months ended September 30, 2026, Boats LLC borrowed an additional $10.0 million under the revolving credit facility, resulting in $75.0 million outstanding as of September 30, 2026.

Term Loan A requires quarterly principal payments of $1.25 million beginning September 30, 2026, with the remaining outstanding balance due at maturity. As of September 30, 2026, Boats LLC had $98.8 million outstanding under Term Loan A. Boats LLC also had $1.8 million of outstanding letters of credit, resulting in $173.2 million of availability under the revolving credit facility.

The Credit Agreement permits Boats LLC, subject to specified conditions and lender participation, to request increases to the revolving commitments or obtain incremental term loans in an aggregate principal amount equal to $100.0 million plus additional amounts so long as the consolidated leverage ratio, after giving effect to the additional commitments and related transactions, does not exceed 2.50:1.00.

Boats LLC is the borrower under the Credit Agreement, and its obligations are guaranteed by the LLC and certain present and future subsidiaries of Boats LLC, subject to certain exceptions. The obligations are secured by substantially all of the assets of the applicable loan parties. 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 September 30, 2026, the weighted average interest rate on the Company’s revolving credit facility was 5.35%. 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 upon the occurrence of specified events, including 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, among other matters, indebtedness, liens, fundamental changes, investments, restricted payments, dispositions of assets, transactions with affiliates, negative pledges, hedging transactions, certain prepayments of indebtedness, accounting changes, governmental regulation, outbound investments and transfers of material intellectual property rights to non-loan parties. For example, the Credit Agreement generally prohibits the LLC, Boats LLC and the other loan parties from paying dividends or making other distributions, including distributions to the Company, subject to specified exceptions. The Credit Agreement permits, among other restricted payments, (i) distributions based on a member’s allocated taxable income, (ii) distributions to fund payments required under the LLC’s tax receivable agreement, (iii) purchases of stock or stock options of the Company from present or former officers, directors or employees of the loan parties, or payments pursuant to stock option or other benefit plans approved by the Company’s board of directors, in an aggregate amount not to exceed $5.0 million in any fiscal year, and (iv) repurchases of the Company’s outstanding stock and LLC Units. In addition, the Credit Agreement permits other dividends and distributions if, after giving effect to such payments on a pro forma basis, the applicable financial covenants are satisfied, the consolidated leverage ratio is not greater than 2.75 to 1.00, liquidity is at least $15.0 million and no specified event of default exists.

Covenant Compliance

As of September 30, 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 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 the Company has 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, is determined using the stated percentage increase.

The weighted-average remaining lease term as of September 30, 2026 and 2025 was 2.34 years and 2.78 years, respectively. As of September 30, 2026 and 2025, the weighted-average discount rate determined based on the Company's incremental borrowing rate is 7.51% and 4.68%, respectively.

Future annual minimum lease payments for the following fiscal years as of September 30, 2026 are as follows:

1 Presented on a calendar-year basis to reflect the change in the Company's fiscal year end to December 31. See Part II, Item 5, "Other Information."

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 the Company 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 September 30, 2026 and June 30, 2026, the Company recorded deferred tax assets of $119.7 million 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, due by April 15, 2027.

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 provision (benefit) for income taxes in the period in which this determination is made.

As of September 30, 2026 and June 30, 2026, the Company maintained a total valuation allowance of $17.6 million 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 $580,000 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.

For the three months ended September 30, 2026 and 2025, the Company's effective tax rate was 26.6% and (77.9)%, respectively. For the three months ended September 30, 2026, the Company's effective tax rate was increased by foreign taxes paid and U.S. state taxes. For the three months ended September 30, 2025, the Company's effective tax rate was reduced by deferred tax impacts of pre-tax losses and 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 September 30, 2026,625,992 shares remain available for future issuance under the 2024 Plan.

The following is a summary of the changes in non-vested restricted stock units and restricted stock awards for the three months ended September 30, 2026:

Stock-based compensation expense attributable to the Company's share-based equity awards was $1.3 million and$1.6 million for the three months ended September 30, 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 income (loss). Awards vesting during the three months ended September 30, 2026 include 1,472 fully vested restricted stock units issued to non-employee directors for their service as directors for the Company.

16. Net Earnings (Loss) Per Share

Basic net income (loss) per share of Class A Common Stock is computed by dividing net income (loss) 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 income (loss) 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 Stock holders.

Diluted net income (loss) per share of Class A Common Stock is computed similarly to basic net income (loss) 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 stock method and contingently issuable shares, 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. Contingently issuable shares relate to the contingent consideration from the acquisition of Saxdor, which may be settled in cash, shares of Class A Common Stock, or a combination of both at the Company's sole discretion. For purposes of computing diluted net income (loss) per share, the contingent consideration is presumed to be settled in shares. The contingent consideration is subject to two sets of performance conditions. As of September 30, 2026, the first set of conditions had been met, and achievement of the second set will be determined based on performance for the calendar year ending December 31, 2026. Because the contingency period has not ended, contingently issuable shares are included in the computation of diluted net income (loss) per share based on the number of shares that would be issuable if September 30, 2026 were the end of the contingency period. Refer to Note 4 — Acquisition, for further discussion of the contingent consideration.

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

1 The Company excluded 329,757 and 498,055 potentially dilutive shares from the calculation of diluted net income (loss) per share for the three months ended September 30, 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 income (loss) 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 plan financing programs with repurchase obligations was $351.6 million and $378.5 million as of September 30, 2026 and June 30, 2026, 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 income (loss). During the three months ended September 30, 2026 and September 30, 2025, there wereno repurchases of any such inventory. As of September 30, 2026, the

Company has not been notified about any probable repossessions. Therefore, the Company did not carry a reserve as of September 30, 2026 consistent with June 30, 2026.

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 September 30, 2026 and June 30, 2026, 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 September 30, 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 September 30, 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 “Batchelder Settlement Agreement”) with the Batchelder Plaintiffs in settlement of the Batchelder Matters and all matters related to the Batchelder Matters. Pursuant to the Batchelder 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 $100.0 million.

MBI and its subsidiaries, including Boats LLC, maintain liability insurance applicable to the Batchelder Matters described above with coverage up to $26.0 million. As of September 30, 2026, the Company had received approximately $21.0 million in insurance coverage proceeds, of which approximately $6.0 million remains subject, in certain cases, to reservations of rights by the insurance carrier. The Company contends that the insurance carriers are responsible for the entirety of the $100.0 million 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. On March 12, 2026, the Georgia Court of Appeals denied both aspects of Chubb's appeal. On April 14, 2026, Chubb filed a petition for a writ of certiorari with the Georgia Supreme Court and on September 6, 2026, the Georgia Supreme Court denied Chubb's petition for certiorari. As a result of Starr's dismissal, the approximately $15.0 million in insurance coverage proceeds received from Starr is no longer subject to a reservation of rights. The Company intends to vigorously pursue its claims against the insurance carrier to recover the full $100.0 million settlement amount and expenses (less any monies already tendered without reservation by the carrier). 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 $3.5 million 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 $3.5 million 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 $7.8 million 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. On July 15, 2026, plaintiffs filed a motion for preliminary settlement approval in the consolidated action pending before the United States District Court for the Eastern District of Tennessee (Case 3:25-cv-00142). The settlement contemplates certain corporate governance reforms by MBI and a payment of $850,000 in attorneys' fees from MBI to the stockholders' counsel, and is subject to Court approval. MBI anticipates that the settlement amount will be fully paid with proceeds from MBI's directors and officers insurance carriers.

Delaware Charter Lawsuit

On February 12, 2025, a stockholder (the “Gray Plaintiff”) filed a putative stockholder class action complaint, as subsequently amended on April 1, 2026, in the Court of Chancery of the State of Delaware (the “Chancery Court”) against MBI, under the caption Gray v. Malibu Boats, Inc., C.A. No. 2025-0151-KSJM (the “Gray Action”), challenging a provision of the Company’s Certificate of Incorporation concerning removal of directors from the Company’s Board of Directors (the “Removal Provision”). Without admitting any wrongdoing or that the Gray Plaintiff’s allegations had any merit, MBI represented to the Gray Plaintiff that no director of MBI shall be removed from his or her position pursuant to the Removal Provision. On August 18, 2026, MBI and the Gray Plaintiff filed a stipulation, subject to approval by the Chancery Court, providing for the closure of the case, subject to and upon the Company filing an affidavit with the Chancery Court confirming that notice has been issued and the Gray Plaintiff filing a voluntary dismissal of the Gray Action. On September 3, 2026, MBI filed the aforementioned affidavit and the Chancery Court granted the stipulation providing for closure of the case. On September 8, 2026, the Gray Plaintiff filed a voluntary dismissal of the Gray Action, and on September 10, 2026, the Chancery Court granted the voluntary dismissal, with prejudice only as to the Gray Plaintiff and without prejudice as to any other putative class member. Believing the prompt resolution of the Gray Action to be in the best interest of MBI and its stockholders, MBI, in its business judgment, also paid $75,000 in attorneys’ fees and expenses to the Gray Plaintiff’s counsel (including a $500 service award to the Gray Plaintiff) in full satisfaction of the claim for attorneys’ fees and expenses in the Gray Action.

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.

Product Liability Lawsuit

On July 17, 2026, Brad Knighton and Britney Knighton, individually, as personal representative of the Estate of O.K., a deceased minor child, and as guardians of O.B.K. and B.E.K., minors, filed a Complaint against Cobalt Boats, LLC, Malibu Boats, LLC, Malibu Boats Holdings, LLC, and Malibu Boats, Inc. in the United States District Court for the District of South Carolina, Florence Division, in admiralty (Case No. 4:26-cv-02936-JD). The Complaint arises from a boating accident that occurred on July 19, 2023 involving a 2006 model year Cobalt 232 bowrider vessel and alleges that the vessel was defective due to inadequate warnings regarding hazards associated with occupancy of the vessel's open bow seating area under certain operating conditions. Plaintiffs assert claims for strict products liability (failure to warn), negligence, breach of implied warranty of merchantability, wrongful death, survival, and negligent infliction of emotional distress, and seek compensatory and punitive damages in an unspecified amount. No defendant has been served with process, and no defendant has filed a responsive pleading. The Company maintains product liability insurance that is applicable to this case. 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, Saltwater Fishing and Cobalt. 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, human resources, 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, except for digital marketing allocations which are based on each segment's prior year marketing spend. The remaining unallocated corporate costs, as well as costs related to stock-based compensation, interest expense, professional fees 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 independently of business performance.

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 months ended September 30, 2026 and 2025.

1 The primary difference between this significant segment expense and “general and administrative expense” within the Company’s Condensed Consolidated Statements of Operations relates to stock-based compensation, professional fees and litigation settlements which all fall under the "corporate expenses and other" category discussed below.

2 Other segment items includes other expense (income) including items such as sublease income and currency translation.

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. The amount is also net of a $15.0 million reduction of general and administrative expense from insurance proceeds received in July 2023 from Starr that are no longer subject to a reservation of rights. “Corporate expenses and other” is included in the table above to reconcile the total of Segment adjusted EBITDA to the Company’s consolidated net income (loss) 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.