MasterCraft Boat Holdings, Inc.: Form 10-K for the period ended Jun 30, 2026

We are a leading innovator, designer, manufacturer, and marketer of recreational powerboats sold through our five brands, MasterCraft, Crest, Balise, Chaparral and Robalo. As a leader in recreational marine, we strive to deliver the best on-water experience through innovative, high-quality products with a relentless focus on the consumer.

On May 15, 2026, we completed the merger with Marine Products, pursuant to which each share of Marine Products common stock, par value $0.10 per share, was converted into the right to receive 0.232 shares of our common stock, par value $0.01 per share and $2.43 cash, representing total merger consideration of approximately $284.2 million.

Our Segments

During the fourth quarter of fiscal 2026, the Company renamed its MasterCraft segment to the Performance and Wake segment and its Pontoon segment to the Leisure segment. The changes better reflect the products and brands within those segments. The segment name changes had no impact on the composition of the Company’s segments or on previously reported financial position, results of operations, cash flows, or segment operating results. In addition, following the acquisition of Marine Products in May 2026, the Company established the Recreation and Sport Fishing segment, which includes the acquired Chaparral and Robalo brands. As a result, the Company operates and reports through three reportable segments: Performance and Wake, Leisure, and Recreation and Sport Fishing.

Performance and Wake Segment

Our Performance and Wake segment, which manufactures and sells premium ski/wake boats, consists of our MasterCraft brand. The MasterCraft brand was founded in 1968 and evolved over the next 55-plus years to become the most award-winning ski/wake boat manufacturer in the world. Today, MasterCraft participates in one of the highest margin producing categories within the powerboat industry by manufacturing the industry’s premier competitive water ski, wakeboarding, and wake surfing performance boats. We believe the MasterCraft brand is known among boating enthusiasts for high performance, premier quality, and relentless innovation. We believe that the market recognizes MasterCraft as a premier brand in the powerboat industry due to the overall superior value proposition that our boats deliver to consumers. We work tirelessly every day to maintain this iconic brand reputation.

Leisure Segment

Our Leisure segment, which manufactures and sells pontoon boats, consists of our Crest and our Balise brands. The Leisure segment participates in the largest unit producing category in the powerboat industry. Crest, which we acquired in October 2018, was founded in 1957 and has grown to be one of the top producers of innovative, high-quality pontoon boats ranging from 18 to 26 feet. Crest’s long-standing reputation for high-quality, standard features and content, and innovation provides Crest with strong dealer and consumer bases in its core geographic markets.

Our Balise brand, an all-new, independent pontoon brand which was launched in April 2024, has been conceived with the discerning consumer in mind. With luxurious accents and appointments not typically found in pontoons, we seek to manufacture our Balise boats to the highest quality standards and to position the brand as the most luxurious pontoon on the market.

Recreation and Sport Fishing Segment

Our Recreation and Sport Fishing segment manufactures and sells recreational fiberglass powerboats for both the pleasure boating and sport fishing markets. Our Recreation and Sport Fishing segment includes our Chaparral and Robalo brands, which we acquired in May 2026. Chaparral, founded in 1965, is a well-established brand offering a broad and versatile lineup of boats tailored to the family recreational market, with a focus on quality, performance, and comfort. Robalo, founded in 1969, has evolved into a leading manufacturer of sport fishing boats, known for its durable construction, innovative features, and strong reputation among both freshwater and saltwater anglers.

Unless the context otherwise requires, “Performance and Wake,” “Leisure,” and “Recreation and Sport Fishing,” as used herein, refer to our segments as described above.

Our Products

We design, manufacture, and sell recreational inboard, outboard, and sterndrive boats that we believe deliver superior performance for water skiing, wakeboarding, wake surfing, and fishing, as well as general recreational boating. In addition, we offer various accessories, including trailers and aftermarket parts. The following table provides an overview of our product offerings as of June 30, 2026:

Our products are sold through extensive networks of independent dealers domestically and internationally. We target our distribution to the market category’s highest performing dealers. The majority of our MasterCraft brand dealers are exclusive to our MasterCraft product lines within the ski/wake category, highlighting the commitment of our key dealers to the MasterCraft brand. Our other brands are generally served on a nonexclusive basis by their respective dealers.

We consistently review our distribution networks to identify opportunities to expand our geographic footprint and improve our coverage of the market. We constantly monitor the health and strength of our dealers by analyzing each dealer’s retail sales and inventory and have established processes to identify under-performing dealers in order to assist them in improving their performance, to allow us to switch to a more effective dealer, or to direct product to markets with the greatest retail demand. These processes also allow us to better monitor dealer inventory levels and product turns and contribute to a healthier dealer network that is better able to stock and sell our products. We believe our outstanding dealer networks and our proactive approach to dealer management allow us to distribute our products more effectively than our competitors and will help us capitalize on growth opportunities as our industry volumes continue to increase.

For fiscal 2026, the Company’s top ten dealers accounted for approximately 34% of our net sales and none of our dealers individually accounted for more than 10% of our total net sales.

Domestic. As of June 30, 2026, our Performance and Wake segment had a total of 83 domestic dealers across 140 locations. Our Leisure segment had a total of 80 domestic dealers across 95 locations. Our Recreation and Sport Fishing segment had a total of 124 domestic dealers across 180 locations. We define domestic dealers as those dealers with locations inside of the United States.

International. As of June 30, 2026, through our Performance and Wake segment, we had a total of 46 international dealers and 61 locations. Our Leisure segment had three international dealers and four locations. Our Recreation and Sport Fishing segment had 58 international dealers and 72 locations. We define international dealers as those dealers with locations outside of the United States. We are present in Canada, Mexico, Europe, Australia, Central America, South America, Africa, and Asia. We generated 11.3%, 11.4%, and 14.0% of our net sales internationally in fiscal 2026, 2025, and 2024, respectively.

Dealer Relations

We have developed a system of financial incentives for our dealers based on achievement of key benchmarks. In addition, we provide our dealers with comprehensive sales training and a complete set of technology-based tools designed to help dealers maximize performance. Our dealer incentive program has been refined through years of experience with some of the key elements including wholesale rebates, retail rebates and promotions, other allowances, and floor plan interest reimbursement or cash discounts to encourage balanced production throughout the year.

Beyond our incentive programs, we have developed a proprietary web-based management tool that is used by our dealers on a day-to-day basis to improve their own businesses as well as enhance communication with our factory and sales management teams. Our business-to-business application efficiently executes many critical functions, including warranty registrations, warranty claims, boat ordering and tracking, parts ordering, technical support, and inventory reporting. This system facilitates communication between our sales team and the dealer network and allows our manufacturing department to review consumer demand in real time.

Manufacturing

MasterCraft boats and trailers are manufactured and lake-tested at our 310,000 square-foot facility located in Vonore, Tennessee. We are proud that our MasterCraft brand continues to achieve compliance with all three of the ISO 9001 (Quality Management Systems), 14001 (Environmental Management Systems), and 45001 (International Occupational Health and Safety Management System) standards. Crest and Balise boats are manufactured at our 270,000 square-foot facility located in Owosso, Michigan. Chaparral and Robalo boats are manufactured at our 1,262,000 square-foot facility located in Nashville, Georgia, which we acquired in connection with the Marine Products Transaction.

The rigorous and consumer-centric attention to detail in the design and manufacturing of our products results in boats of high quality which provides an exceptional on water experience across all of our brands. Our dedication to quality permits our consumers to enjoy our products with confidence.

Our boats are built through a continuous flow manufacturing process that encompasses fabrication, assembly, quality management, and testing. We manufacture certain components and subassemblies for our boats, such as upholstery, and procure other components from third-party vendors and install them on the boats. We have several exclusive supplier partnerships for certain critical components, such as aluminum billet, towers, and engine packages. For our MasterCraft brand, we also build custom trailers that match the exact size and design-characteristics of our boats.

Suppliers

We purchase a wide variety of raw materials from our supplier base, including resins, fiberglass, aluminum, lumber and steel, as well as parts and components such as engines and electronic controls. We maintain long-term contracts with certain strategic suppliers and informal arrangements with other suppliers.

We are focused on working with our supply chain partners to enable cost improvement, world-class quality, and continuous product innovation. We have engaged our key suppliers in collaborative preferred supplier relationships and have developed processes including annual cost reduction targets, product reliability improvement projects, and extensive product testing requirements to ensure that our suppliers produce to the highest levels of quality expected of our brands and at lowest total cost. These collaborative efforts begin at the design stage, as our key suppliers are integrated into design and development planning well in advance of launch, which allows us to control costs and to leverage the expertise of our suppliers in developing product innovations. We believe these collaborative relationships with our key strategic suppliers have contributed to significant improvements in product quality, innovation, and profitability.

The most significant components used in manufacturing our boats, based on cost, are engine packages. For our MasterCraft brand, Ilmor Engineering, Inc. (“Ilmor”) is our exclusive engine supplier, and for our Crest brand, Mercury Marine (“Mercury”) is our largest engine supplier. For our Balise brand, we have partnered with Mercury to be the exclusive engine supplier. For Chaparral and Robalo, sterndrive engines are purchased from Mercury and Volvo Penta, and outboard engines are purchased from both Yamaha and Mercury. We maintain strong and long-standing relationships with Ilmor, Mercury, and Yamaha. During fiscal 2026, Ilmor was our largest overall supplier. In addition to ski/wake engines, Ilmor’s affiliates produce engines used in a number of leading racing boats and race cars. We work closely with Ilmor to remain at the forefront of engine design, performance, and manufacturing. We believe our long-term relationships with our engine supplier partners are a key competitive advantage.

Research and Development, Product Development and Engineering

We are strategically and financially committed to innovation, as reflected in our dedicated product development and engineering groups and evidenced by our track record of new product and feature introduction. Our product development and engineering group brings to our product development efforts significant expertise across core disciplines, including boat design, computer-aided design, naval engineering, electrical engineering, and mechanical engineering. They are responsible for execution of all facets of our new product and innovation strategy, starting with design and development of new boat models and innovative features, engineering these designs for manufacturing, and integrating new boats and features into production. Our product development and engineering functions work closely with our Strategic Portfolio Management Team which includes senior leadership from Sales, Marketing and Finance, all working together to develop our long-term product and innovation strategies.

We have structured processes to obtain consumer, dealer, and management feedback to guide our long-term product lifecycle and portfolio planning. In addition, extensive testing and coordination with our manufacturing groups are important elements of our product development process, which we believe enable us to leverage the lessons from past launches and minimize the risk associated with the release of new products. Our strategy is to launch new models each year, which will allow us to renew our product portfolio with innovative offerings at a rate that we believe will be difficult for our competitors to match without significant additional capital investments. In addition to our product strategy, we manage a separate innovation development process which allows us to design innovative new features for our boats in a disciplined manner and to launch these innovations in a more rapid time frame and with higher quality. These enhanced processes have reduced the time to market for our new product pipeline. Our research and product development expense for fiscal 2026, 2025, and 2024 was $7.1 million, $6.5 million, and $6.8 million, respectively.

Intellectual Property

We rely on a combination of patent, trademark, and copyright protection, trade secret laws, confidentiality procedures, and contractual provisions to protect our rights in our brands, products, and proprietary technology, and we protect our vessel hull designs through vessel hull design registrations. This is an important part of our business, and we intend to continue protecting our intellectual property. As of June 30, 2026, we owned more than 90 U.S. patents and more than 10 foreign patents, including utility and design patents covering our transom seating, our SurfStar surf system technology, and features acquired with the Chaparral and Robalo brands. Provided that we comply with all statutory maintenance requirements, our patents expire at various times through 2044 as their terms lapse, and we have additional patent applications pending in the U.S. and worldwide. We also own more than 130 trademark registrations in the U.S. and around the world, most notably for the MasterCraft, Crest, Balise, Chaparral, and Robalo names, as well as numerous model names across our product families. Such trademarks may endure in perpetuity on a country-by-country basis, provided that we comply with all statutory maintenance requirements, including continued use of each trademark in each such country. In addition, we own registered U.S. copyrights, and we have registered a portfolio of vessel hull designs with the U.S. Copyright Office. We consider our collection of intellectual property to be a valuable asset that is important to our competitive position.

Competitive Conditions and Position

We believe our brands are well positioned within their respective markets and are recognized for their quality, innovation, and performance. Our competitive approach centers on operating, developing, and acquiring a diversified portfolio of leading brands that serve attractive segments of the powerboat industry. Supported by our ability to attract, develop, and retain high-performing employees, we compete by focusing relentlessly on delivering the best overall ownership experience, refining efficient production methods that yield innovative products, and distributing those products through a well-established network of independent dealers.

Each of our product categories face significant competition. The markets in which we compete range from relatively concentrated, such as the ski/wake category, to more fragmented, such as the pontoon, recreational fiberglass, and sport fishing categories. Our competitors likewise range from small, single-product businesses to large, diversified companies, and they include providers of alternative recreational products and leisure activities that compete for consumers' discretionary spending. Based on March 2026 data from Statistical Surveys, Inc. (“SSI”), our brands hold competitive market share positions across their respective categories, including category-leading positions.

Human Capital Resources

We have approximately 1,400 employees as of June 30, 2026, of whom 500 primarily work at our Performance and Wake segment facility in Tennessee, 200 primarily work at our Leisure segment facility in Michigan, and 700 primarily work at our Recreation and Sport Fishing segment facility in Georgia. None of our employees are unionized or subject to collective bargaining agreements.

One of our strategic priorities is developing a high-performing work organization and work environment that is consumer-focused and attracts and retains superior employees. We strive to offer our employees career-specific tools, training, resources, and support development opportunities. We utilize a talent management process, which includes performance appraisal and development planning. We are also deeply invested in attracting and developing the next generation of workforce talent to the boating industry. We’ve partnered with local community and technical colleges by developing training programs to position graduates for jobs in the boating industry upon graduation.

Employee safety is always a top priority. We are focused on improving and innovating when it comes to the well-being of our dedicated workforce across our portfolio of brands. We take great care to ensure everyone at the Company is empowered to do their best work, in a safe and well-managed environment. We maintain clean, safe and healthy workplaces through our vigorous training programs and professional safety standards systems, including job hazard assessments and industrial hygiene and ventilation practices.

Our compensation program is designed to facilitate high performance and generate results that will create value for our shareholders. We structure executive compensation to pay for performance, reward our executives with equity in the Company in order to align their interests with the interests of our shareholders and allow those employees to share in our shareholders’ success, which we believe creates a performance culture, maintains morale and attracts, motivates and retains top talent.

Environmental, Safety, and Regulatory Matters

Our operations are subject to extensive and frequently changing federal, state, local, and foreign laws and regulations, including those concerning product safety, environmental protection, climate and chemical reporting, and occupational health and safety. We believe that our operations and products are in compliance with these regulatory requirements. Historically, the cost of achieving and maintaining compliance with applicable laws and regulations has not been material. However, we cannot provide assurance that future costs and expenses required for us to comply with such laws and regulations, including any new or modified regulatory requirements, or to address newly discovered environmental conditions, will not have a material adverse effect on our business, financial condition, operating results, or cash flows.

Specifically, as a result of the Marine Products Transaction, we may become subject to SB 261 in the state of California, which requires covered U.S. entities doing business in California to publish biennial climate-related financial risk reports. Enforcement of this legislation is enjoined pending appeal and the applicability and timing of the legislation remain subject to litigation, rulemaking and legal change. Our compliance with this legislation could require enhanced systems, controls, and reporting and entail additional costs.

Additionally, we are or may become subject to evolving laws related to per- and polyfluoroalkyl substances (“PFAS”) product content, reporting, sales, and remediation. The Toxic Substances Control Act requires certain historical PFAS reporting, with the reporting window expected to be in early 2027, federal and state PFAS regulations and requirements continue to evolve. If PFAS are present in our products, manufacturing process, materials or supply chain, we may need to assess, report, modify our products or processes, or investigate conditions.

We have not been notified of and are otherwise currently not aware of any contamination at our current or former facilities for which we could be liable under environmental laws or regulations and we currently are not undertaking any remediation or investigation activities in connection with any contamination. However, future spills or accidents or the discovery of currently unknown conditions or non-compliances may give rise to investigation and remediation obligations or related liabilities and damage claims, which may have a material adverse effect on our business, financial condition, operating results, or cash flows.

Other Information

We were incorporated under the laws of the State of Delaware under the name MCBC Holdings, Inc. on January 28, 2000. In July 2015, we completed an initial public offering of our common stock. Effective November 7, 2018, the name of the Company was changed from MCBC Holdings, Inc. to MasterCraft Boat Holdings, Inc. We maintain a website with the address https://investors.mcbh.com/. We are not including the information contained in our website as part of, or incorporating it by reference into, this Annual Report on Form 10-K. We make available, free of charge through our website, our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to these reports as soon as reasonably practicable after we electronically file these materials with, or otherwise furnish them to, the SEC. We also use our website as a means of disclosing additional information, including for complying with our disclosure obligations under the SEC’s Regulation FD (Fair Disclosure).

RISK FACTORS

Our operations and financial results are subject to certain risks and uncertainties, including those described below, which could adversely affect our business, financial condition, results of operations, cash flows, and the trading price of our common stock.

Risks Relating to Economic and Market Conditions

Global economic conditions, particularly in the U.S., significantly affect our industry and business, and economic decline can materially impact our financial results.

In times of economic uncertainty or recession, consumers tend to have less discretionary income and to defer significant spending on non-essential items, which may adversely affect our financial performance. The economic uncertainty caused by (i) general economic conditions, (ii) the impact of inflation and elevated interest rates, (iii) labor shortages, (iv) supply chain disruptions, (v) rapid changes in trade policy and tariffs, (vi) political uncertainty and regional or global conflicts (vii) public health crises, pandemics, or national emergencies and (viii) actions and stimulus measures adopted by local, state and federal governments may lead to unfavorable business outcomes. We continue to develop our portfolio of brands, but our business remains cyclical and sensitive to consumer spending on new boats.

Deterioration in general economic conditions that in turn diminishes consumer confidence or discretionary income may reduce our sales, or we may decide to lower pricing for our products, which could adversely affect our financial results, including increasing the potential for future impairment charges. Further, our products are recreational, and consumers’ limited discretionary income in times of economic hardship may be diverted to other activities that occupy their time, such as other forms of recreational, religious, cultural, or community activities. In addition, economic uncertainty may also increase certain costs of operation, such as financing costs, energy costs and insurance premiums, which in turn may impact our results of operations. We cannot predict the strength of global economies or the timing of economic recovery, either globally or in the specific markets in which we compete.

Inflation and elevated interest rates for prolonged periods could adversely affect our financial results.

The market prices of certain materials and components used in manufacturing our products, especially resins that are made with hydrocarbon feedstocks, fiberglass, aluminum, lumber, and steel, can be volatile. Significant increases in inflation, particularly those related to wages and increases in the cost of raw materials, have, and may continue to have, an adverse impact on our business, financial condition, and results of operations. Inflation has remained persistent in the United States and globally in recent years due in part to global supply chain issues and elevated energy prices, among other factors.

In addition, the existence of inflation in certain economies has resulted in, and may continue to result in, elevated interest rates. Although the U.S. Federal Reserve held the federal funds rate steady through much of the first half of calendar year 2025 and cut rates in the second half of calendar year 2025, amid persistent inflation concerns and trade policy uncertainty, it may raise rates as it previously did in calendar years 2022 and 2023. As a result, it remains to be seen whether interest rates will stabilize, increase or decrease, either globally or in the United States specifically. Inflation, along with elevated interest rates, could translate into an increased cost of boat ownership for new boat buyers, who often finance their purchases. Should inflation continue to occur and interest rates remain elevated, prospective consumers may choose to forego or delay their purchases or buy a less expensive boat in the event credit is not available to finance their boat purchases.

Elevated interest rates for prolonged periods could also incentivize dealers to reduce their inventory levels in order to reduce their interest exposure. In an effort to offset the increased interest exposure, we have offered and expect to continue offering dealer incentives to pass through the additional dealer costs to us, which in turn negatively impacts our margins.

Elevated interest rates for prolonged periods may also increase the borrowing costs on our variable rate debt, as discussed below, as well as on new debt, which could affect the fair value of our investments.

Fiscal concerns and policy changes may negatively impact worldwide economic and credit conditions and adversely affect our industry, business, and financial condition.

Fiscal policy could have a material adverse impact on worldwide economic conditions, the financial markets, and availability of credit and, consequently, may negatively affect our industry, business, and overall financial condition. Consumers often finance purchases of our products, and as interest rates rise, the cost of financing the purchase also increases. If credit conditions worsen and adversely affect the ability of consumers to finance potential purchases at acceptable terms and interest rates, it could result in a decrease in sales or delay improvement in sales.

Our variable rate indebtedness subjects us to interest rate risk, which could cause our debt service obligations to increase significantly.

Should we need to borrow under our credit agreement, borrowings are at variable rates of interest and expose us to interest rate risk. If interest rates increase, any debt service obligations on our indebtedness will increase even if the amount borrowed remains the same, and our net income and cash flows, including cash available for servicing our indebtedness, will correspondingly decrease. Please see Part II, Item 7A, “Quantitative and Qualitative Disclosures about Market Risk” for discussion of our market risk related to interest rates.

An increase in energy costs may materially adversely affect our business, financial condition, and results of operations.

Our results of operations can be directly affected, positively and negatively, by volatility in the cost and availability of energy, which is subject to global supply and demand and other factors beyond our control. Prices for crude oil, natural gas and other energy supplies, from time to time, have been subject to high volatility, including as a result of geopolitical factors or otherwise. Further, the global clean energy movement may also reduce the availability of fossil fuels, which may in turn cause increases to energy costs. Higher energy costs result in increases in operating expenses at our manufacturing facilities, in the expense of shipping raw materials to our facilities, and in the expense of shipping products to our dealers. In addition, increases in energy costs may adversely affect the pricing and availability of petroleum-based raw materials, such as resins and foams that are used in our products. The military conflict in Iran has caused, and may continue to cause, material supply chain disruptions resulting in significant increases in fuel prices. Any escalation of hostilities in the Middle East could further disrupt global oil and natural gas supply and related infrastructure, leading to additional significant increases and volatility in fuel prices. Higher fuel prices may also have an adverse effect on demand for our boats, as they increase cost of boat ownership and possibly affect product use. Higher fuel prices may also have an effect on consumer preferences, which could cause a shift from traditional fuel-powered boats to electric boats.

Fluctuations in foreign currency exchange rates could adversely affect our results.

We sell products manufactured in the U.S. into certain international markets in U.S. dollars. The changing relationship of the U.S. dollar to foreign currencies has, from time to time, had a negative impact on our results of operations. Fluctuations in the value of the U.S. dollar relative to these foreign currencies can adversely affect the price of our products in foreign markets and the costs we incur to import certain components for our products. We will often attempt to offset these higher prices with increased discounts, which can lead to reduced net sales per unit.

Risks Relating to Our Business

We depend on our network of independent dealers, and our financial results could be adversely affected if we are unable to maintain effective distribution.

Substantially all of our sales are derived from our network of independent dealers. Maintaining a reliable network of dealers, as well as expanding that network, is essential to our success. The costs of maintaining our network will increase as we continue to grow the number of dealers, partnership and geographic scope of our network. Our agreements with dealers in our networks typically provide for one-year terms, although some agreements have longer terms. The loss of one or more of these dealers could have a material adverse effect on our financial condition and results of operations. The number of dealers supporting our products and the quality of their marketing and servicing efforts are essential to our ability to generate sales. We face competition from other manufacturers in attracting and retaining independent boat dealers. Although our management believes that the quality of our products in the premium performance sport and outboard boat industries should permit us to maintain our relationships with our dealers and our market share position, there can be no assurance that we will be able to maintain or improve our relationships with our dealers or our market share position. In addition, independent dealers in the marine industry have experienced significant consolidation in recent years, which could result in the loss of one or more of our dealers in the future if the surviving entity in any such consolidation purchases similar products from a competitor. A significant deterioration in the number or effectiveness of our dealers could have a material adverse effect on our business, financial condition, results of operations, and cash flows.

Weakening demand for marine products could hurt our dealers’ financial performance. In particular, reduced cash flow from decreases in sales and tightening credit markets could impair dealers’ ability to fund operations. Inability to fund operations can force dealers to cease business, and we may be unable to obtain alternate distribution in the vacated market. An inability to obtain alternate distribution could unfavorably affect our net sales through reduced market presence. If economic conditions deteriorate, we anticipate that dealer failures or voluntary market exits would increase, especially if overall retail demand materially declines. Additionally, the deterioration in the health of competitors’ dealers has and may again in the future negatively impact the marketplace, including our dealers, by causing boat inventories at those dealers to be deeply discounted or relocated to other geographical areas, resulting in elevated inventories our dealers are competing against.

Our dealers require adequate liquidity to finance their operations, including purchasing our products. Dealers are subject to numerous risks and uncertainties that could unfavorably affect their liquidity positions, including, among other things, continued access to adequate financing sources on a timely basis on reasonable terms. These financing sources are vital to our ability to sell products through our network of dealers. Many of our dealers have floor plan financing arrangements with third-party finance companies. Many factors, including creditworthiness of our dealers and overall aging and level of pipeline inventories, continue to influence the availability and terms of financing that our dealers are able to secure, which could cause dealers to shift the timing of purchases or reduce the total amount purchased in a given period of time, adversely affecting sales of our products. In addition, elevated interest rates could also incentivize dealers to reduce their inventory levels in order to reduce their interest exposure, which may further adversely impact the sales of our products and our results of operations.

Our ability to adjust for demand in a rapidly changing environment may adversely affect our results of operations.

The seasonality of retail demand for our products, together with our goal of balancing production throughout the year, requires us to manage our manufacturing and allocate our products to our dealer network to address anticipated retail demand and manage demand fluctuations caused by macroeconomic conditions and other factors. In addition, our dealers must manage seasonal changes in consumer demand and inventory. Our business may experience difficulty in adapting to rapidly changing production and sales volumes.

During fiscal 2025, we made the strategic decision to reduce field inventories in order to rebalance inventory held by our dealers in light of industry headwinds and weakness in retail demand. The planned reduction is substantially complete and we intend to align field inventories more closely with retail demand on a go-forward basis. Our profitability depends, in part, on our ability to spread fixed costs over a sufficiently large number of products sold and shipped. If retail demand does not materialize as expected, we may again be required to reduce field inventories, which would negatively impact our gross and net margins. Failure to adjust manufacturing levels adequately for seasonal retail sales patterns and other macroeconomic conditions, decreased demand or the need to reduce production may have a material adverse effect on our financial condition and results of operations.

Conversely, to the extent dealer supply were to fall below retail demand, we would need to increase production. If production demand increases, we may not be able to recruit or maintain sufficient skilled labor or our suppliers may not be able to deliver sufficient quantities of parts and components for us to match production with rapid changes in forecasted demand. In addition, consumers may pursue other recreational activities if dealer pipeline inventories fall too low and it is not convenient to purchase our products, consumers may purchase from competitors, or our fixed costs may grow in response to increased demand. A failure to adjust dealer pipeline inventory levels to meet demand could adversely impact our results of operations.

We may not be able to execute our manufacturing strategy successfully, which could cause the profitability of our products to suffer.

Our manufacturing strategy is designed to improve product quality and increase productivity, while reducing costs and increasing flexibility to respond to ongoing changes in the marketplace. To implement this strategy, we must be successful in our continuous improvement efforts, which depend on the involvement of management, production employees, and suppliers. Any inability to achieve these objectives could adversely impact the profitability of our products and our ability to deliver desirable products to our consumers.

In addition, we have made strategic capital investments in capacity expansion activities to successfully capture growth opportunities and enhance product offerings, including brand relocation and plant expansions and acquisitions. For example, in connection with the Marine Products Transaction, we acquired a new manufacturing facility in Nashville, Georgia for the production of the recreational and sport fishing boats in our Chaparral and Robalo brands. We’ve also made strategic divestments of manufacturing assets, such as our Merritt Island manufacturing facility during fiscal 2025, to optimize our cost structure and direct resources toward other long-term initiatives. Moving production to a different plant, expanding capacity at an existing facility (as the result of a disruption at one of our other facility or otherwise), and integrating a newly acquired facility involves risks, including difficulties initiating production within the cost and timeframe estimated, supplying product to customers when expected, integrating new products, inserting or maintaining engineering, technological and manufacturing product expertise, and attracting sufficient skilled labor to handle additional production demands. If we fail to meet these objectives, it could adversely affect our ability to meet customer demand for products and increase the cost of production versus projections, both of which could result in a significant adverse impact on operating and financial results. Additionally, plant expansion can result in manufacturing inefficiencies, additional expenses, including higher wages or severance costs, and cost inefficiencies, which could negatively impact financial results. In addition, with respect to acquired facilities, there can be no assurance that all potential instances of environmental or other liabilities have been identified, even for properties where an environmental site assessment has been conducted. Future events, such as changes in existing laws or policies or their enforcement, or the discovery of currently unknown contamination, may give rise to future remediation liabilities that may be material.

Adverse weather conditions and climate change events can have a negative effect on revenues.

Changes in seasonal weather conditions can have a significant effect on our operating and financial results. Sales of our boats are typically stronger just before and during spring and summer, and favorable weather during these months generally has had a positive effect on consumer demand. Conversely, unseasonably cool weather, excessive rainfall, or drought conditions during these periods can reduce or change the timing of demand. Climate change could have an impact on longer-term natural weather trends, resulting in environmental changes including, but not limited to, increases in severe weather, changing sea levels, changes in sea, land and air temperatures, poor water conditions, or reduced access to water. Such environmental changes could adversely impact customer and dealer network infrastructures, which could disrupt or negatively affect our business.

Catastrophic events, including natural and environmental disasters, acts of terrorism, or civil unrest, could have a negative effect on our operations and financial results.

We rely on the continuous operation of our manufacturing facilities for the production of our products. Each of our brands is only manufactured at one of our three manufacturing facilities. Any natural disaster or other serious disruption to our facilities due to fire, snow, flood, earthquake, pandemics, civil insurrection or social unrest or any other unforeseen circumstance could interrupt production, damage work-in-process and finished good inventory, and delay deliveries to our dealer network from that facility or result in impairment charges in the corresponding segment, any of which could adversely affect our business, financial condition, and results of operations.

Hurricanes, floods, earthquakes, storms, and catastrophic natural or environmental disasters, as well as acts of terrorism or civil unrest, could also disrupt our distribution channel, operations, or supply chain and decrease consumer demand. If a catastrophic event takes place in one of our major sales markets, our sales could be diminished and our insurance may not adequately cover losses from such disruptions. Additionally, if such an event occurs near our business locations, manufacturing facilities or key supplier facilities, business operations, and/or operating systems could be interrupted.

We could be uniquely affected by weather-related catastrophic events, as we have dealers and third-party suppliers located in regions of the United States that have been and may be exposed to damaging storms, such as hurricanes and tornados, floods and environmental disasters. Although preventative measures may help to mitigate damage, the damage and disruption resulting from natural and environmental disasters may be significant. Such disasters can disrupt our consumers, dealers, or suppliers, which can interrupt our operational processes and our sales and profits.

Our ability to remain competitive depends on successfully introducing new or redesigned products and services that meet consumer expectations.

We believe that our consumers look for and expect quality, innovation, and advanced features when evaluating and making purchasing decisions about products and services in the marketplace. Our ability to remain competitive and meet our growth objectives may be adversely affected by difficulties or delays in product development, such as an inability to develop viable new or redesigned products, gain market acceptance of new or redesigned products, generate sufficient capital to fund new or redesigned product development, or obtain adequate intellectual property protection for new or redesigned products. To meet ever-changing consumer demands, both timing of market entry and pricing of new or redesigned products are critical. For example, we launched our redesigned X24 and our all new X22 and X23 products in fiscal 2026. The introduction of new brands or other new or redesigned products may not be introduced in a timely or cost-effective manner, may contain defects or may not meet consumer demands to the extent necessary to keep us competitive in all markets that we serve. Furthermore, we must continue to meet or exceed consumers’ expectations regarding product quality and after-sales service or our operating results could suffer.

Divestitures and similar strategic transactions may materially and adversely affect our business or results of operations.

We continually evaluate the performance, capital needs and strategic fit of all of our segments and, as a result of such evaluation, may sell some or all of the assets and equity interests in a particular segment or components of a segment. For example, on October 18, 2024, we completed the Aviara Transaction, pursuant to which we transferred the rights to the Aviara brand and certain related assets to a third party, and on December 23, 2024, we completed the related Aviara Facility Sale of our manufacturing plant in Merritt Island, Florida. Divestitures involve risks, including difficulties in the separation of operations, services, products and personnel. We cannot assure you that we will be successful in managing these or any other significant risks that we may encounter related to the Aviara Transaction or any other divestiture of a segment or component of a segment.

Any divestiture and related actions we undertake could materially and adversely affect our business, reputation, financial condition, results of operations and cash flows, and may also result in a diversion of management’s attention, operational difficulties and losses.

Our financial results may be adversely affected by our third-party suppliers’ increased costs, inability to adjust for our required production levels due to changes in demand or global supply chain disruptions, or our inability to maintain relationship with new suppliers.

We rely on a complex global supply chain of third parties to supply raw materials used in the manufacturing process, including resins, fiberglass, aluminum, lumber and steel, as well as product parts and components. The prices for these raw materials, parts, and components fluctuate depending on market conditions and, in some instances, commodity prices or trade policies, including tariffs. Our supply could experience industry consolidation, which could increase the prices of raw materials, parts and components. Where we rely on a limited number of suppliers or a single supplier, the risk of supplier loss due to industry consolidation or a decline in financial performance is enhanced. Substantial increases in the prices of raw materials, parts, and components would increase our operating costs, and could reduce our profitability if we are unable to recoup the increased costs through higher product prices or improved operating efficiencies. Similarly, if a critical supplier were to close its operations, cease manufacturing, or otherwise fail to deliver an essential component necessary to our manufacturing operations, that could detrimentally affect our ability to manufacture and sell our products, resulting in an interruption in business operations and/or a loss of sales.

In addition, engines used in the manufacturing processes of certain segments are available from a sole-source supplier. Other components used in our manufacturing process, such as boat windshields, towers, and surf tabs may only be available from a limited number of suppliers. Operational and financial difficulties that these or other suppliers may face in the future could adversely affect their ability to supply us with the parts and components we need, which could significantly disrupt our operations. It may be difficult to find a replacement supplier for a limited or sole source raw material, part, or component without significant delay or on commercially reasonable terms. In addition, an uncorrected defect or supplier’s variation in a raw material, part, or component, either unknown to us or incompatible with our manufacturing process, could jeopardize our ability to manufacture products.

Some additional supply chain disruptions that could impact our operations, impair our ability to deliver products to customers, and negatively affect our financial results include:

• an outbreak of disease or facility closures due to public health threats;
• a deterioration of our relationships with suppliers;
• events such as natural disasters, power outages, or labor strikes;
• financial or political instability in any of the countries in which our suppliers operate;
• financial pressures on our suppliers due to a weakening economy or unfavorable conditions in other end markets;
• supplier manufacturing constraints and investment requirements; or
• termination or interruption of supply arrangements.

These risks are exacerbated in the case of single-source suppliers, and the exclusive supplier of a key component could potentially exert significant bargaining power over price, quality, warranty claims, or other terms.

In addition, our success following the completion of the Marine Products Transaction depends on our ability to retain Marine Products’ suppliers, as well as our ability to maintain relationships with the new suppliers. The Marine Products Transaction may create uncertainty among the previous Marine Products suppliers, leading them to re-evaluate their business relationships, including re-evaluations relating to concerns about changes in purchasing volumes, payment terms, or the combined company’s financial stability. If suppliers decide to terminate or renegotiate their agreements, it could lead to increased costs or disruptions in supply chain. Furthermore, we may face challenges in integrating and harmonizing supplier management processes, which could impact the quality of relationships and the ability to achieve operational efficiencies.

We continue to evaluate and shift production; consequently, our need for raw materials and supplies continues to fluctuate. Our suppliers must be prepared to shift operations and, in some cases, hire additional workers and/or expand capacity in order to fulfill our orders and those of other customers. Cost increases, defects, or sustained interruptions in the supply of raw materials, parts, or components due to delayed start-up periods, or sudden changes in requirements, our suppliers experience as they shift production efforts create risks to our operations and financial results. The Company has experienced periodic supply shortages and increases in costs to certain materials. We continue to address these issues by identifying alternative suppliers for key materials and components, working to secure adequate inventories of critical supplies, and continually monitoring the capabilities of our supplier base. In the future, however, we may experience shortages, delayed delivery, and/or increased prices for key materials, parts, and supplies that are essential to our manufacturing operations.

Our business and operations are dependent on the expertise of our key contributors, our successful implementation of succession plans, and our ability to attract and retain management employees and skilled labor.

The talents and efforts of our employees, particularly key managers, are vital to our success. We have observed an overall tightening and increasingly competitive labor market in recent years, which could inhibit our ability to recruit, train and retain employees we require at efficient costs and could lead to increased costs, such as increased overtime to meet demand and increased wage rates to attract and retain employees. Our management team has significant industry experience and would be difficult to replace. We may be unable to retain them or to attract other highly qualified employees. Additionally, our employees and the employees previously employed by Marine Products prior to the Marine Products Transaction may experience uncertainty about their future roles and may decide not to remain with us as a result of the Marine Products Transaction. Failure to hire, develop, and retain highly qualified employee talent and to develop and implement an adequate succession plan for the management team could disrupt our operations and adversely affect our business and our future success. We perform an annual review of management succession plans with our board of directors (the “Board”), including reviewing executive officer and other important positions to substantially mitigate the risk associated with key contributor transitions, such as our Chief Financial Officer leadership transition at the beginning of fiscal 2026, but we cannot ensure that all transitions will be implemented successfully.

Our ability to continue to execute our growth strategy could potentially be adversely affected by the effectiveness of organizational changes. Any disruption or uncertainty resulting from such changes could have a material adverse impact on our business, results of operations, and financial condition.

Much of our future success depends on, among other factors, our ability to attract and retain skilled labor, which is critical to our operations. We may experience difficulty maintaining desired staffing levels due to increased competition for employees, higher employee turnover rates and low unemployment rates in many of the geographic areas in which we manufacture or distribute goods. We continually invest in automation and improve our efficiency, but availability and retention of skilled hourly workers remains critical to our operations. In order to manage this risk, we regularly monitor and make improvements to wages and benefit programs, as well as develop and improve recruiting, training, and safety programs to attract and retain an experienced and skilled workforce.

We may be required to repurchase inventory of certain dealers.

Floor plan financing arrangements with third-party finance companies enable dealers to purchase our products. In connection with these agreements, we may have an obligation to repurchase our products from a finance company under certain circumstances. This obligation is triggered if a dealer defaults on its debt obligations to a finance company. In addition, applicable laws regulating dealer relations may also require us to repurchase our products from our dealers under certain circumstances. In such circumstances, we may not have any control over the timing or amount of any repurchase obligation nor have access to capital on terms acceptable to us to satisfy any repurchase obligation. If we were obligated to repurchase a significant number of units under any repurchase agreement or under applicable dealer laws, our business, operating results, financial condition and cash flows could be adversely affected.

Future declines in marine industry demand could cause an increase in repurchase activity or could require us to incur losses in excess of established reserves. In addition, our cash flow and loss experience could be adversely affected if repurchased inventory is not successfully distributed to other dealers in a timely manner, or if the recovery rate on the resale of the product declines. The finance companies could require changes in repurchase terms that would result in an increase in our contractual obligations.

Our industry is characterized by intense competition, which affects our sales and profits.

The premium performance sport boat and outboard boat categories and the powerboat industry as a whole are highly competitive for consumers and dealers. We also compete against consumer demand for used boats. Competition affects our ability to succeed in both the markets we currently serve and new markets that we may enter in the future. Competition is based primarily on brand name, price, product selection, and product performance. We compete with several large manufacturers that may have greater financial, marketing, and other resources than we do and who are represented by dealers in the markets in which we now operate and into which we plan to expand. We also compete with a variety of small, independent manufacturers. Following the Marine Products Transaction, we now compete across additional product categories, including fiberglass sport boats, center console fishing boats, bay boats, and dual console boats, where we face competition from large national and regional manufacturers such as Brunswick Corporation, Malibu Boats, Inc., Sea Hunt Boats, and Regal Marine Industries, Inc., as well as numerous smaller, privately held manufacturers. In addition, certain of our Chaparral models compete in the wake and surf category alongside our MasterCraft brand, which may result in intra-company competition that could affect the sales or pricing of products within our portfolio. We cannot provide assurance that we will not face greater competition from existing large or small manufacturers or that we will be able to compete successfully with new competitors. Our failure to compete effectively with our current and future competitors would adversely affect our business, financial condition, and results of operations.

Our sales may be adversely impacted by increased consumer preference for used boats or the supply of new boats by competitors in excess of demand.

During an economic downturn, we could experience a shift in consumer demand toward purchasing more used boats, primarily because prices for used boats are typically lower than retail prices for new boats. If this were to occur, it could have the effect of reducing demand among retail purchasers for our new boats. Also, while we have taken steps designed to balance production volumes for our boats with demand, our competitors could choose to reduce the price of their products, which could have the effect of reducing demand for our new boats. In addition, as previously mentioned, a shift from traditional fuel-powered boats to electric boats, alternative fuel-powered boats, or other technologies could reduce demand for our boats. Reduced demand for new boats could lead to reduced sales by us, which could adversely affect our business, results of operations, and financial condition.

Significant product repair and/or replacement due to product warranty claims or product recalls could have a material adverse impact on our results of operations.

We provide a limited warranty for our products. We may provide additional warranties related to certain promotional programs, as well as warranties in certain geographical markets as determined by local regulations and market conditions.

Although we employ quality control procedures, sometimes a product is distributed that needs repair or replacement. Our standard warranties require us or our dealers to repair or replace defective products during such warranty periods at no cost to the consumer. The Company’s warranty programs vary by brand and segment and may result in different warranty cost profiles and reserve requirements. Historically, product recalls have been administered through our dealers and distributors. The repair and replacement costs we could incur in connection with a recall could adversely affect our business. In addition, product recalls could harm our reputation and cause us to lose consumers, particularly if recalls cause consumers to question the safety or reliability of our products.

An inability to identify and complete targeted acquisitions, as well as an inability to timely and successfully integrate completed acquisitions, such as the Marine Products Transaction, could negatively impact financial results and/or adversely affect our internal controls.

We have, and may in the future again, explore acquisitions and strategic alliances that will enable us to acquire complementary skills and capabilities, offer new products, expand our consumer base, enter new product categories or geographic markets, and obtain other competitive advantages. We cannot provide assurance, however, that we will identify acquisition candidates or strategic partners that are suitable to our business, obtain financing on satisfactory terms, or complete acquisitions or strategic alliances. In managing our acquisition strategy, we conduct rigorous due diligence, involve various functions, and continually review target acquisitions, all of which we believe mitigates some of our acquisition risks.

On May 15, 2026, we completed the acquisition of Marine Products Corporation, adding the Chaparral and Robalo brands and establishing our Recreation and Sport Fishing segment. However, we cannot assure that additional suitable acquisitions will be identified or consummated or that, if consummated, they will be successful. Acquisitions include a number of risks, including our ability to project and evaluate market demand, realize potential synergies and cost savings, and make accurate accounting estimates, as well as diversion of management attention. Uncertainties exist in assessing the value, risks, profitability, and liabilities associated with certain companies or assets, negotiating acceptable terms, obtaining financing on acceptable terms, and receiving any necessary regulatory approvals. As we continue to grow, in part, through acquisitions, our success depends on our ability to anticipate and effectively manage these risks. Our failure to successfully do so could have a material adverse effect on our financial condition and results of operations.

Additionally, strategic acquisitions once complete pose integration risks, such as our ability to project and evaluate market demand; maximize potential synergies and cost savings; make accurate accounting estimates; and achieve anticipated business objectives. Acquisitions we may complete in the future, present these and other integration risks, including:

• the possibility that the expected synergies and value creation will not be realized or will not be realized within the expected time period;
• the risk that unexpected costs and liabilities will be incurred;
• diversion of management attention; and
• difficulties retaining employees.

If we fail to timely and successfully integrate new businesses, including Marine Products, into existing operations, we may see higher costs, lost sales, or otherwise diminished earnings and financial results.

In addition, the integration of acquired businesses, including Marine Products, may result in our systems and controls becoming increasingly complex and more difficult to manage, regardless of whether such acquired business was previously privately or publicly held. The integration of acquired businesses may also result in material challenges to our control environment, including: unanticipated issues in integrating financial reporting, information technology infrastructure; and harmonizing the companies’ operating practices, internal controls, compliance programs and other policies, procedures, and processes. We may also encounter difficulties in addressing possible differences in business backgrounds, corporate cultures and management philosophies, and maintaining adequate staffing, which could potentially pose challenges in the implementation and operation of controls. We may also identify or fail to identify potential deficiencies in internal controls at the acquired or combined business. The integration of the internal controls relating to the business acquired through the Marine Products Transaction into ours is currently ongoing. We have excluded the acquisition of Marine Products from our evaluation of internal control over financial reporting for the fiscal year ended June 30, 2026. This exclusion is in accordance with the U.S. Securities and Exchange Commission’s guidance permitting a company to exclude an acquired business from management's assessment of the effectiveness of internal control over financial reporting for up to one year following the acquisition.

The Chaparral and Robalo brands acquired in the Marine Products Transaction expand our operations into product categories and markets in which we have limited prior experience.

The Marine Products Transaction expanded our operations into sterndrive sport boats and saltwater sport fishing boats, categories in which we have limited prior operating experience, and added a coastal dealer network that overlaps in part with our existing network. We may not accurately anticipate consumer preferences, competitive dynamics, or dealer expectations in these categories, and dealer overlap could result in the loss of dealers in certain markets.

Negative public perception of our products, our sustainability practices or restrictions on the access or the use of our products in certain locations could materially adversely affect our business or results of operations.

Demand for our products depends in part on their acceptance by the public. Public concerns about the perceived safety of our products, particularly with respect to concerns about presence or use of regulated substances such as PFAS chemicals, or the environmental impact, particularly with respect to shoreline preservation, or our sustainability practices generally, could result in diminished public perception of the products we sell. Government, media, or activist pressure to limit emissions could also negatively impact consumers’ perceptions of our products. Any decline in the public acceptance of our products could negatively impact their sales or lead to changes in laws, rules and regulations that prevent access to certain locations or restrict use or manner of use in certain areas or during certain times, which could also negatively impact sales. Any material decline in the public acceptance of our products could impact our ability to retain existing consumers or attract new ones which, in turn, could have a material adverse effect on our business, results of operations or financial condition.

Our business operations could be negatively impacted by an outage or breach of our information technology systems, network disruptions, or a cybersecurity event.

We manage our business operations through a variety of information technology systems and their underlying infrastructure, which we continually enhance to increase efficiency and security. In addition to the disruptions in our information technology systems, intentional or inadvertent insider personnel misconduct, cybersecurity threats and sophisticated and targeted cyberattacks pose a risk to our information technology systems. We have established security policies, processes, and defenses, including employee awareness training regarding phishing, malware, and other cyber risks, designed to help identify and protect against intentional and unintentional misappropriation or corruption of our information technology systems and information and disruption of our operations. Additionally, we maintain quarterly discussions with our Board to address cyber risks and system and process enhancements. Despite these efforts, our information technology systems may be damaged, disrupted, or shut down due to attacks by unauthorized access, malicious software, computer viruses, undetected intrusion, hardware failures, or other events, and in these circumstances our disaster recovery plans may be ineffective or inadequate. The techniques and sophistication used to conduct cyberattacks and breaches of information technology systems change frequently, including as a result of the deployment of evolving artificial intelligence (“AI”) and machine learning tools used to identify vulnerabilities and create more effective phishing attempts, and have the potential to not be recognized until such attacks are launched or have been in place for a period of time. These breaches or intrusions could lead to business interruption, exposure of proprietary or confidential information, data corruption, damage to our reputation, exposure to legal and regulatory proceedings, and other costs. Further, while we perform due diligence prior to acquisitions and take actions to safeguard the businesses that we acquire, these businesses may not have invested as significantly as we do in security and technology and may be more susceptible to cybersecurity incidents, which may make us more vulnerable to cybersecurity incidents as well. A security breach might also lead to violations of privacy laws, regulations, trade guidelines or practices related to our customers and associates and could result in potential claims from customers, associates, shareholders, or regulatory agencies. Any failure to maintain compliance with such laws, regulations, trade guidelines or practices may cause us to incur significant penalties and generate negative publicity, and may require us to change our business practices, increase our costs or otherwise adversely affect our business. Such events could adversely impact our reputation, business, financial position, results of operations, and cash flows. In addition, we could be adversely affected if any of our significant customers or suppliers experiences any similar events that disrupt their business operations or damage their reputation.

While we maintain monitoring practices and protections of our information technology to reduce these risks and test our systems on an ongoing basis for potential threats, there can be no assurance that these efforts will prevent a cyber-attack or other security breach. We carry cybersecurity insurance to help mitigate the financial exposure and related notification procedures in the event of intentional intrusion; however, there can be no assurance that our insurance will adequately protect against potential losses that could adversely affect our business.

We rely on third parties for computing, storage, processing, and similar services. Any disruption of or interference with our use of these third-party services could have an adverse effect on our business, financial condition, and operating results.

Many of our business systems reside on third-party outsourced cloud infrastructure providers. We are therefore vulnerable to service interruptions experienced by these providers and could experience interruptions, delays, or outages in service availability in the future due to a variety of factors, including infrastructure changes, human, hardware or software errors, hosting disruptions, and capacity constraints. While we have mitigation and service redundancy plans in place, outages and/or capacity constraints could still arise from a number of causes such as technical failures, natural disasters, fraud, or internal or third-party security attacks, which could negatively impact our ability to manufacture and/or operate our business.

Our credit facilities contain covenants which may limit our operating flexibility; failure to comply with covenants may result in our lenders restricting or terminating our ability to borrow under such credit facilities.

In the past, we have relied on our existing credit facilities to provide us with adequate liquidity to operate our business. The availability of borrowing amounts under our credit facilities is dependent on compliance with the debt covenants set forth in our credit agreement, which at times we may seek to proactively amend based on our future outlook. If we are unable to update our covenants or otherwise violate existing covenants, whether as a result of operating losses or otherwise, our lenders may restrict or terminate our borrowing ability under our credit facilities. If our lenders reduce or terminate our access to amounts under our credit facilities, we may not have sufficient capital to fund our working capital and other needs, and we may need to secure additional capital or financing to fund our operations or to repay outstanding debt under our credit facilities. We cannot provide assurance that we will be successful in ensuring the availability of amounts under our credit facilities or in raising additional capital, or that any amount, if raised, will be sufficient to meet our cash needs or will be on terms as favorable as those which have been available to us historically. If we are not able to maintain our ability to borrow under our credit facilities, or to raise additional capital when needed, our business and operations will be materially adversely affected.

Risks Relating to Intellectual Property

Our success depends on the continued strength of our brands and the value of our brands, and sales of our products could be diminished if we, the athletes who use our products, or the sports and activities in which our products are used are associated with negative publicity.

We believe that our brands are a significant contributor to the success of our business and that maintaining and enhancing our brands is important to expanding our consumer and dealer base. Failure to continue to protect our brands, may adversely affect our business, financial condition, and results of operations.

Negative publicity, including that resulting from severe injuries or death occurring in the sports and activities in which our products are used, could negatively affect our reputation and result in restrictions, recalls, or bans on the use of our products. Further, actions taken by athletes associated with our products that harm the reputations of those athletes could also harm our brand image and adversely affect our financial condition. If the popularity of the sports and activities for which we design, manufacture, and sell products were to decrease as a result of these risks or any negative publicity, sales of our products could decrease, which could have an adverse effect on our net sales, profitability, and operating results. In addition, if we become exposed to additional claims and litigation relating to the use of our products, our reputation may be adversely affected by such claims, whether or not successful, including by generating potential negative publicity about our products, which could adversely impact our business and financial condition.

Our intellectual property rights may be inadequate to protect our business.

We rely on a combination of patents, trademarks, copyrights, protected design, and trade secret laws; employee and third-party non-disclosure agreements; and other contracts to establish and protect our technology and other intellectual property rights. However, we remain subject to risks, including:

• the steps we take to protect our proprietary technology may be inadequate to prevent misappropriation of our technology;
• third parties may independently develop similar technology;
• agreements containing protections may be breached or terminated;
• we may not have adequate remedies for breaches;
• pending patent, trademark, and copyright applications may not be approved;
• existing patent, trademark, copyright, and trade secret laws may afford limited protection;
• a third party could copy or otherwise obtain and use our products or technology without authorization; or
• we may be required to litigate to enforce our intellectual property rights, and we may not be successful.

Policing unauthorized use of our intellectual property is difficult and litigating intellectual property claims may result in substantial cost and divert management’s attention.

In addition, we may be required to defend our products against patent or other intellectual property infringement claims or litigation. Besides defense expenses and costs, we may not prevail in such cases, forcing us to seek licenses or royalty arrangements from third parties, which we may not be able to obtain on reasonable terms, or subjecting us to an order or requirement to stop manufacturing, using, selling, or distributing products that included challenged intellectual property, which could harm our business and financial results.

If third parties claim that we infringe on their intellectual property rights, our financial condition could be adversely affected.

We face the risk of claims that we have infringed third parties’ intellectual property rights. Any claims of patent or other intellectual property infringement, even those without merit, could be expensive and time consuming to defend, cause us to cease making, licensing, or using products that incorporate the challenged intellectual property, require us to redesign, re-engineer, or re-brand our products, if feasible, divert management’s attention and resources, or require us to enter into royalty or licensing agreements in order to obtain the right to use a third party’s intellectual property. Any royalty or licensing agreements, if required, may not be available to us on acceptable terms or at all. A successful claim of infringement against us could result in our being required to pay significant damages, enter into costly license or royalty agreements, or stop the sale of certain products, any of which could have a negative impact on our business, financial condition, and results of operations. While we are not currently involved in any outstanding intellectual property litigation that we believe, individually or in the aggregate, will have a material adverse effect on our business, financial condition, or results of operations, we cannot predict the outcome of any pending litigation and an unfavorable outcome could have an adverse impact on our business, financial condition, or results of operations.

Risks Relating to Our Regulatory, Accounting, Legal, and Tax Environment

International tariffs could materially and adversely affect our business and results of operations.

There is substantial uncertainty with respect to trade policies, enforcement and treaties between the U.S. and other countries. During fiscal 2025 and 2026, the U.S. government implemented broad tariffs on imported good and components, including baseline duties of 10% or higher with certain country-specific rates substantially exceeding those levels, with certain exemptions. Certain tariff actions have been challenged in court, creating additional legal uncertainty regarding the scope, validity, timing and potential recovery of tariff payments. These actions have resulted in, and are expected to further result in, foreign governments taking retaliatory trade actions, which has, and could continue to, increase the pricing of our products and result in decreased consumer demand for our products outside of the United States, which has, and could continue to, materially and adversely affect our business and results of operations. For example, tariffs have increased the cost of certain raw materials, particularly aluminum. To mitigate incremental tariff costs, during fiscal 2026 we implemented a tariff surcharge on dealer invoices for our MasterCraft brand products. These mitigation efforts may not be successful if implemented in fiscal 2027 or for the products of our other brands and competitive conditions, dealer resistance, or further changes to trade policy may prevent us from continuing to recover these costs, which would adversely affect our margins.

Tariff measures, including certain reciprocal tariffs, have been introduced, modified, suspended, and reinstated on numerous occasions, pending negotiations with the relevant countries. As a result, there continues to be significant uncertainty regarding the extent and duration of applicable tariffs, and their impact on the global economy. Any resulting economic downturns or market volatility may result in decreased consumer spending, which may adversely impact our industry. In response to consumer spending, we may decide to offer a higher amount of discounts and incentives than we have historically, which may adversely impact our operating results. In addition, any United States initiated tariffs on certain foreign goods, including raw materials, commodities, and products manufactured outside the United States that are used in our manufacturing processes may cause our manufacturing cost to rise, which would have a negative impact on our business and results of operations. We may submit tariff recovery claims through applicable customs or other governmental processes; however, the amount, timing and realization of any refunds, credits or other recoveries remain uncertain. If we are unable to mitigate any potential impacts through supply chain adjustments, pricing strategies, or other measures, our financial performance and growth prospects and/or our ability to create or execute our long-term plans or goals could be negatively affected.

An impairment in the carrying value of goodwill, trade names, and other long-lived assets could negatively affect our consolidated results of operations and net worth.

Goodwill and indefinite-lived intangible assets, such as our trade names, are recorded at fair value at the time of acquisition and are not amortized, but are reviewed for impairment at least annually or more frequently if impairment indicators arise. In evaluating the potential for impairment of goodwill and trade names, we make assumptions regarding future operating performance, business trends, and market and economic conditions. Such analyses further require us to make certain assumptions about sales, operating margins, growth rates, and discount rates. Uncertainties are inherent in evaluating and applying these factors to the assessment of goodwill and trade name recoverability.

We have, and could again in the future, be required to evaluate the recoverability of goodwill or trade names prior to the annual assessment if we experience business disruptions, unexpected significant declines in operating results, a divestiture of a significant component of our business, or declines in market capitalization. For example, during the fiscal 2026 fourth quarter, we performed an impairment evaluation of the Crest brand indefinite-lived trade name and definite-lived dealer network intangible assets as a result of impairment indicators and, based on our analyses, we recorded impairment charges of $4.1 million and $6.0 million related to the Crest dealer network and trade name, respectively, to reduce the assets to their estimated fair values.

We also continually evaluate whether events or circumstances have occurred that indicate the remaining estimated useful lives of our definite-lived intangible assets and other long-lived assets may warrant revision or whether the remaining balance of such assets may not be recoverable. We use an estimate of the related undiscounted cash flow over the remaining life of the asset in measuring whether the asset is recoverable.

As of June 30, 2026, the balance of total goodwill and indefinite lived intangible assets was $191.6 million, which represents approximately 38 percent of total assets and includes goodwill and intangible asset balances recognized as a result of the Marine Products

Transaction. The related purchase accounting remains subject to ongoing refinement. If the future operating performance of either the Company or individual operating segments is not sufficient, we could be required to record non-cash impairment charges. Impairment charges could substantially affect our reported earnings in the periods such charges are recorded. In addition, impairment charges could indicate a reduction in business value which could limit our ability to obtain adequate financing in the future.

Compliance with environmental, health, safety, data privacy and other regulatory requirements may increase costs and reduce demand for our products.

We are subject to federal, state, local, and foreign laws and regulations, including those concerning product safety, environmental protection, and occupational health and safety. Some of these laws and regulations require us to obtain permits and limit our ability to discharge hazardous materials into the environment and others, such as SB 261 in California and federal Toxic Substances Control Act, may require us to prepare and file or publish reports related to certain materials and their related hazards and/or environmental impacts. Failure to comply with these requirements could result in the assessment of fines and penalties, obligations to conduct remedial or corrective actions, or, in extreme circumstances, revocation of our permits or injunctions preventing some or all of our operations. In addition, the components of our boats must meet certain regulatory standards, including stringent air emission standards for boat engines. Failure to meet these standards could result in an inability to sell our boats in key markets, which would adversely affect our business. Moreover, compliance with these regulatory requirements could require enhanced systems and controls and/or increase the cost of our products, which in turn, may reduce consumer demand. Any public reports, if perceived negatively by the public, could also result in reputational harm

While we believe that we are in compliance with applicable federal, state, local, and foreign regulatory requirements, and hold all licenses and permits required thereunder, we cannot provide assurance that we will, at all times, be able to continue to comply with applicable regulatory requirements. Compliance with stringent regulatory and permit requirements may, in the future, cause us to incur substantial capital costs and increase our cost of operations, or may limit our operations, all of which could have a material adverse effect on our business or financial condition.

Our manufacturing processes involve the use, handling, storage, and contracting for recycling or disposal of hazardous substances and wastes. The failure to manage or dispose of such hazardous substances and wastes properly could expose us to material liability or fines, including liability for personal injury or property damage due to exposure to hazardous substances, damages to natural resources, or for the investigation and remediation of environmental conditions. Under environmental laws, we may be liable for remediation of contamination at sites where our hazardous wastes have been disposed or at our current or former facilities, regardless of whether such facilities are owned or leased or regardless of whether we were at fault. While we do not believe that we are presently subject to any such liabilities, we cannot assure you that environmental conditions relating to our prior, existing, or future sites or operations or those of predecessor companies will not have a material adverse effect on our business or financial condition.

Additionally, we are subject to laws governing our relationships with employees, including, but not limited to, employment obligations and employee wage, hour, and benefits issues, such as health care benefits. Compliance with these rules and regulations, and compliance with any changes to current regulations, could increase the cost of our operations.

We are also subject to a broad and rapidly evolving set of global data privacy and data protection laws, including the European Union’s General Data Protection Regulation (“GDPR”), U.S. state-level privacy laws such as the California Consumer Privacy Act (“CCPA”), and similar regulations in other jurisdictions. Failure to comply with applicable laws could result in significant fines (including penalties of up to 4% of global annual revenue under GDPR), regulatory investigations, litigation, and reputational harm, as well as material costs related to remediation, customer attrition, and constraints on our ability to use data to support commercial operations. Any of these outcomes could have a material adverse effect on our business, results of operations, financial condition, and cash flows.

We manufacture and sell products that create exposure to potential claims and litigation.

Our manufacturing operations and the products we produce could result in product quality, warranty, personal injury, property damage, and other issues, thereby increasing the risk of litigation and potential liability, as well as regulatory fines. We have in the past incurred such liabilities and may in the future be exposed to liability for such claims. We maintain product and general liability insurance of the types and in the amounts that we believe are customary for the industry. However, we may experience material losses in the future, incur significant costs to defend claims or issue product recalls, experience claims in excess of our insurance coverage or that are not covered by insurance, or be subjected to fines or penalties. Our reputation may be adversely affected by such claims, whether or not successful, including potential negative publicity about our products. In addition, if any of our products are, or are alleged to be, defective, we may be required to participate in a recall of that product if the defect or alleged defect relates to safety. These and other claims we may face could be costly to us and require substantial management attention.

The nature of our business exposes us to workers’ compensation claims and other workplace liabilities.

Certain materials we use require our employees to handle potentially hazardous or toxic substances. While our employees who handle these and other potentially hazardous or toxic materials receive specialized training and wear protective clothing, there is still a risk that they, or others, may be exposed to these substances. Exposure to these substances could result in significant injury to our employees and damage to our property or the property of others, including natural resource damage. Our personnel are also at risk for other workplace related injuries, including slips and falls. We have in the past been, and may in the future be, subject to fines, penalties, and other liabilities in connection with any such injury or damage. Although we currently maintain what we believe to be suitable and adequate insurance in excess of our self-insured amounts, we may be unable to maintain such insurance on acceptable terms or such insurance may not provide adequate protection against potential liabilities.

Increases in income tax rates or changes in income tax laws or enforcement could have a material adverse impact on our financial results.

Changes in domestic and international tax legislation could expose us to additional tax liability. Although we monitor changes in tax laws and work to mitigate the impact of proposed changes, such changes may negatively impact our financial results. In addition, increases in individual income tax rates would negatively affect our potential consumers’ discretionary income and could decrease the demand for our products.

Risks Relating to Ownership of our Common Stock

LOR, Inc. and its affiliates beneficially own approximately 20% of our outstanding common stock and have contractual rights to nominate directors to our Board, which may limit the ability of other stockholders to influence corporate matters.

In connection with the Marine Products Transaction, we entered into a Stockholders Agreement (the “Stockholders Agreement”) with LOR, Inc. and certain affiliated persons (the “Specified Stockholders”), pursuant to which the Specified Stockholders have the right to nominate up to two directors to our Board for so long as they beneficially own at least 15% of the total voting power of our outstanding common stock, and one director while they own at least 10% but less than 15%. Timothy C. Rollins and Callum C. Macgregor currently serve as the Specified Stockholders’ director designees. The Specified Stockholders’ interests may not always be aligned with those of our other stockholders, and their significant ownership position and board representation may enable them to exert substantial influence over matters submitted to a vote of stockholders, including the election of directors and approval of significant corporate transactions. In addition, we entered into a Registration Rights Agreement (the “Registration Rights Agreement”) with LOR, Inc. that provides demand and piggyback registration rights for the resale of shares held by the Specified Stockholders. When transfer restrictions expire and the resale shelf registration statement becomes effective, sales of a substantial number of shares by the Specified Stockholders could adversely affect the market price of our common stock.

Inefficient or ineffective allocation of capital could adversely affect our operating results and/or shareholder value.

We strive to allocate capital in a manner that enhances shareholder value, lowers our cost of capital, or demonstrates our commitment to return excess capital to shareholders, while maintaining our ability to invest in strategic growth opportunities. In July 2023, the Board authorized a new share repurchase program under which we may repurchase up to $50 million of its outstanding shares of common stock. The new authorization became effective upon the expiration of our previously existing $50 million share repurchase authorization. We have and intend to continue to purchase shares under the repurchase authorization from time to time on the open market at the discretion of management, subject to strategic considerations, market conditions, and other factors. Repurchases under our share repurchase program will reduce the market liquidity for our stock, potentially affecting its trading volatility and price. Future share repurchases will also diminish our cash reserves, which may impact our ability to pursue attractive strategic opportunities. Therefore, if we do not properly allocate our capital or implement a successful cash management strategy, including with respect to returning value to our shareholders through this share repurchase authorization, we may fail to produce optimal financial results and experience a reduction in shareholder value.

Shareholders may be diluted by future issuances of common stock in connection with our incentive plans, acquisitions, or otherwise; future sales of such shares in the public market, or the expectations that such sales may occur, could lower our stock price.

Our amended and restated certificate of incorporation authorizes us to issue shares of common stock and options, rights, warrants, and appreciation rights relating to common stock for the consideration and on the terms and conditions established by our Board in its sole discretion, whether in connection with acquisitions or otherwise. For example, we issued a substantial number of shares of our common stock as consideration in connection with the Marine Products Transaction, which diluted the beneficial ownership of the holders of our common stock.

Any common stock that we issue in the future, including under our Second Amended and Restated MasterCraft 2015 Incentive Award Plan or other equity incentive plans that we may adopt in the future, would further dilute the percentage ownership of holders of our common stock and subsequent resales could adversely affect our stock price. Additionally, the parties to the Registration Rights

Agreement, have certain registration rights with respect to our common stock. If such parties exercise their registration rights, the market price of our common stock could drop if the holders of these shares sell them or are perceived by the market as intending to sell. These factors could also make it more difficult for us to raise additional funds through future offerings of our common stock or other securities.

We currently do not intend to pay dividends on our common stock.

While we have paid dividends in the past, we currently have no intention to pay dividends on our common stock. Any decision to declare and pay dividends in the future will be made at the discretion of our Board and will depend on, among other things, our results of operations, financial condition, cash requirements, contractual restrictions, and other factors that our Board may deem relevant. Furthermore, our ability to declare and pay dividends may be limited by instruments governing future outstanding indebtedness we may incur.

Cybersecurity Risk Management and Strategy

We have developed and implemented a cybersecurity risk management program intended to protect the confidentiality, integrity and availability of our critical systems and information. Our security approach is aligned with applicable security and/or technical requirements and best practices established by multiple cybersecurity frameworks, such as the National Institute of Standards and Technology Cybersecurity Framework (NIST CSF) and ISO 27001. This does not imply that we meet any particular technical standards, specifications or requirements, only that our information security team uses the NIST CSF, ISO 27001 and other frameworks as guides to help us identify, assess, and manage cybersecurity risks relevant to our business.

Our cybersecurity risk management program is integrated into our overall enterprise risk management program, and shares common methodologies, reporting channels and governance processes that apply across our enterprise risk management program to other legal, compliance, strategic, operational and financial risk areas. Though the processes, policies, procedures, operations, technologies, and systems acquired in connection with the Marine Products Transaction remain to be fully integrated into our overall enterprise risk management program, such integration will be an important focus during the Transition Period.

Our cybersecurity risk management program includes:

• risk assessments designed to help identify material cybersecurity risks to our critical systems, information, products, services and our broader enterprise IT environment;
• a security team principally responsible for managing (i) our cybersecurity risk assessment processes, (ii) our security controls and (iii) our response to cybersecurity incidents;
• the use of external service providers, where appropriate, to assess, test or otherwise assist with aspects of our security controls;
• cybersecurity awareness training of our employees, incident response personnel and senior management, regarding phishing, malware and other cyber risks;
• a cybersecurity incident response plan that includes procedures for responding to cybersecurity incidents; and
• a third-party risk management process for service providers, suppliers and vendors.

As of the date of this Form 10-K, we have not identified risks from known cybersecurity threats that have materially affected or are reasonably likely to materially affect us, including our operations, business strategy, results of operations or financial condition. See Part 1, Item 1A. “Risk Factors - Risks Relating to Our Business – Our business operations could be negatively impacted by an outage or breach of our information technology systems, network disruptions, or a cybersecurity event.”

Cybersecurity Governance

Our Board considers cybersecurity risk as part of its risk oversight function and has delegated to the Audit Committee (the “Committee”) oversight of cybersecurity and other information technology risks. The Committee oversees management’s implementation of our cybersecurity risk management program.

The Committee receives quarterly reports from management on our cybersecurity risks, and also receives, at least annually, a detailed briefing from management on our cyber risk management program’s status including all strategic initiatives. In addition, management updates the Committee, as necessary, regarding potentially significant cybersecurity incidents consistent with written escalation protocols, as well as incidents with lesser potential impact. The Committee members also receive presentations on cybersecurity topics from our Chief Information Officer (“CIO”), who also serves as our Chief Information Technology Architect & Chief Information Security Officer (“CISO”), internal security staff or external experts as part of the Board’s continuing education on topics that impact public companies. The Committee also considers the evolution of different cybersecurity threats, including through artificial intelligence. The Committee reports to the full Board regarding its activities, including those related to cybersecurity. The full Board also receives briefings from management on our cyber risk management program.

Our cybersecurity management team, led by our CIO, supervises efforts to prevent, detect, mitigate, and remediate cybersecurity risks and incidents through various means, which may include briefings from internal security personnel; threat intelligence and other information obtained from governmental, public or private sources, including external consultants engaged by us, and reports produced by security tools deployed in the IT environment. Our CIO reports to the Company’s Chief Financial Officer, as well as to the Board and Audit Committee. The CIO has served as our CISO for five years and has more than 20 years of experience in various roles involving managing cybersecurity functions, developing strategies to protect privacy, customer safety and intellectual property, and developing key capabilities such as product security engineering, risk management and cybersecurity governance. The CIO holds a bachelor’s degree in computer science and various certifications which include Certified Ethical Hacker and Certified Chief Information Security Officer, and has 25-plus years of previous software and hardware systems engineering experience.

As of June 30, 2026, all our MasterCraft boats and trailers are manufactured and lake-tested at our 310,000 square-foot manufacturing facility located on approximately 65 acres of lakefront land in Vonore, Tennessee. We also lease a 3,000 square-foot warehouse facility in West Yorkshire, England for warehousing of parts. All our Crest and Balise boats are manufactured in our 270,000 square-foot manufacturing facility located on approximately 63 acres in Owosso, Michigan. All of our Chaparral and Robalo boats are manufactured in our 1,262,000 square-foot manufacturing facility located on approximately 212 acres in Nashville, Georgia.

For a discussion of the Company’s legal proceedings, see Part IV – Item 15. – Note 13 Commitments and Contingencies to the Company’s Consolidated Financial Statements.

The following discussion and analysis should be read together with the sections entitled “Risk Factors” and the financial statements and the accompanying notes included elsewhere in this Form 10-K. In addition, the statements in this discussion and analysis regarding the performance expectations of our business, anticipated financial results, liquidity and the other non-historical statements are forward-looking statements. These forward-looking statements are subject to numerous risks and uncertainties, including, but not limited to, the risks and uncertainties described in “Cautionary Note Regarding Forward-Looking Statements” and in “Risk Factors” above. Our actual results may differ materially from those contained in or implied by any forward-looking statements.

This section generally discusses 2026 and 2025 items and year-to-year comparisons between 2026 and 2025. Discussions of 2024 items and year-to-year comparisons between 2025 and 2024 are not included in this Annual Report on Form 10-K and can be found in Item 7 of the Company’s Annual Report on Form 10-K for the year ended June 30, 2025, which was filed with the SEC on August 27, 2025.

Key Performance Measures

From time to time we use certain key performance measures in evaluating our business and results of operations and we may refer to one or more of these key performance measures in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” These key performance measures include:

• Unit sales volume — We define unit sales volume as the number of our boats sold to our dealers during a period.
• Net sales per unit — We define net sales per unit as net sales divided by unit sales volume.
• Gross margin — We define gross margin as gross profit divided by net sales, expressed as a percentage.
• Net income margin — We define net income margin as income from continuing operations divided by net sales, expressed as a percentage.
• Adjusted EBITDA — We define Adjusted EBITDA as income from continuing operations, before interest, income taxes, depreciation, and amortization (“EBITDA”), as further adjusted to eliminate certain non-cash charges and unusual items that we do not consider to be indicative of our core/ongoing operations. For a reconciliation of EBITDA to Adjusted EBITDA, see “Non-GAAP Measures” below.
• Adjusted EBITDA margin — We define Adjusted EBITDA margin as Adjusted EBITDA divided by net sales, expressed as a percentage. For a reconciliation of Adjusted EBITDA margin to net income margin, see “Non-GAAP Measures” below.
• Adjusted Net Income — We define Adjusted Net Income as income from continuing operations, adjusted to eliminate certain non-cash charges and other items that we do not consider to be indicative of our core/ongoing operations and adjusted for the impact to income tax expense related to non-GAAP adjustments. For a reconciliation of income from continuing operations to Adjusted Net Income, see “Non-GAAP Measures” below.
• Free cash flow — We define Free cash flow from continuing operations as net cash from operating activities less purchases of property, plant, and equipment. For a reconciliation of net cash provided by operating activities of continuing operations to Free cash flow, see “Non-GAAP Measures” below.

Overview

Discontinued Operations

In fiscal 2025, the Company completed the Aviara Transaction and the Aviara Facility Sale. In fiscal 2023, the Company sold its NauticStar business. The Company’s results for all periods presented, as discussed in Management’s Discussion and Analysis, are presented on a continuing operations basis. Results related to our Aviara and NauticStar reporting units are reported as discontinued operations for all periods presented. See Notes 1 and 3 in Notes to Consolidated Financial Statements for more information on discontinued operations.

Business Combination

On May 15, 2026, the Company completed the merger with Marine Products, pursuant to which each share of Marine Products common stock, par value $0.10 per share, was converted into the right to receive 0.232 shares of the Company’s common stock, par value $0.01 per share and $2.43 in cash, representing total merger consideration of approximately $284.2 million. The transactions of the merger are referred to herein as the “Marine Products Transaction.” Through the transaction, the Company acquired the Chaparral and Robalo brands and established a new Recreation and Sport Fishing reportable segment. The results of Marine Products have been included in the Company’s consolidated financial statements since May 15, 2026. See Note 4 to Consolidated Financial Statements for more information on business combinations.

Results of Operations

Amid an evolving geopolitical and macroeconomic landscape, the Company delivered increased net sales of $64.7 million and increased gross margin of 290 basis points for fiscal 2026, as discussed below.

We derived the consolidated statements of operations for the fiscal years ended June 30, 2026 and 2025 from our audited consolidated financial statements and related notes included elsewhere in this Form 10-K. Our historical results are not necessarily indicative of the results that may be expected in the future.

Consolidated Results

(Dollar amounts in thousands)

Net Sales. Net Sales increased 22.8 percent for fiscal 2026 when compared to fiscal 2025. The increase was a result of incremental net sales of $33.3 million sales generated in our Recreation and Sport Fishing segment as a result of the Marine Products Transaction, increased unit volumes, increased prices, favorable model mix and option sales, and decreased dealer incentives.

Gross Margin. Gross Margin percentage increased 290 basis points during fiscal 2026 when compared to fiscal 2025. Higher margins were primarily the result of increased net sales, as discussed above, combined with effective cost controls in our Performance and Wake and Leisure segments, partially offset by a $2.6 million inventory step-up charge related to the Marine Products Transaction.

Operating Expenses. Operating expenses increased 77.3 percent during fiscal 2026 when compared to the same prior year period primarily due to Marine Products Transaction costs, incremental costs incurred in our Recreation and Sport Fishing segment as a result of the transaction, order-backlog and dealer network amortization related to the transaction, non-cash impairment charges related to intangible assets in our Leisure segment as discussed below, ERP implementation costs, and increased variable compensation costs.

Interest Expense. Interest expense decreased $1.0 million, primarily reflecting the repayment of all borrowings under the 2021 Credit Agreement during the first six months of fiscal 2025. While the Company borrowed under its Revolving Credit Facility in connection with the Marine Products Transaction during fiscal 2026, those borrowings were subsequently repaid during the year.

Interest Income. Interest income decreased $0.7 million during fiscal 2026 primarily due to certain investment securities maturing with proceeds used in connection with funding the Marine Products Transaction.

Income Tax Expense. Our consolidated effective income tax rate was 22.6 percent for fiscal 2026, up from 20.8 percent for fiscal 2025. See Note 11 in Notes to Consolidated Financial Statements for more information.

Segment Results

Performance and Wake Segment

The following table sets forth Performance and Wake segment results for the fiscal years ended:

(Dollar amounts in thousands)

Net sales increased 12.6 percent during fiscal 2026, when compared to fiscal 2025. The increase was primarily driven by increased unit volumes, favorable model mix and option sales, increased prices, and decreased dealer incentives.

Operating income increased 4.3 percent during fiscal 2026, when compared to fiscal 2025, driven by increased net sales, as discussed above, partially offset by increased operating and transaction costs of $13.5 million, primarily related to Marine Products Transaction.

Leisure Segment

The following table sets forth Leisure segment results for the fiscal years ended:

(Dollar amounts in thousands)

Net sales increased 2.2 percent during fiscal 2026, when compared to fiscal 2025, as a result of favorable option sales, increased prices, and decreased dealer incentives, partially offset by unfavorable model mix and decreased unit sales volume.

Operating losses increased to $16.0 million during fiscal 2026, compared to $9.4 million in fiscal 2025 The change was a result of non-cash impairment charges of $10.1 million related to the Crest brand intangible assets, partially offset by increased net sales, as discussed above, and effective cost controls. See Note 8 for further information related to impairment charges.

Recreation and Sport Fishing Segment

The following table sets forth Recreation and Sport Fishing segment results for the fiscal years ended:

(Dollar amounts in thousands)

As the segment was newly established in 2026 as a result of the Marine Products Transaction, there are no comparable prior-year results for year-over-year analysis. For the period from May 15, 2026, through June 30, 2026, the segment contributed net sales of $33.3 million and an operating loss of $6.6 million. The operating loss included a $2.6 million inventory step-up charge, $2.9 million of amortization expense for order-backlog and dealer network, and other transaction related costs. See Note 4 to Consolidated Financial Statements for more information on business combinations.

Non-GAAP Measures

EBITDA, Adjusted EBITDA, EBITDA Margin, and Adjusted EBITDA Margin

We define EBITDA as income from continuing operations, before interest, income taxes, depreciation and amortization. We define Adjusted EBITDA as EBITDA further adjusted to eliminate certain non-cash charges or other items that we do not consider to be indicative of our core and/or ongoing operations. For the periods presented herein, these adjustments include share-based compensation, senior leadership transition and organizational realignment costs, Enterprise resource planning (“ERP”) implementation costs, Marine Products Transaction costs, impairments, and inventory step-up as described in more detail below. We define EBITDA margin and Adjusted EBITDA margin as EBITDA and Adjusted EBITDA, respectively, expressed as a percentage of Net sales.

Adjusted Net Income and Adjusted Net Income Per Share

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

Free Cash Flow

We define Free Cash Flow from continuing operations as net cash flows from operating activities less purchases of property, plant, and equipment.

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

• Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future and the Non-GAAP Measures do not reflect any cash requirements for such replacements;
• Certain Non-GAAP Measures do not reflect our cash expenditures, or future requirements for capital expenditures or contractual commitments;
• Certain Non-GAAP Measures do not reflect changes in, or cash requirements for, our working capital needs;
• Certain Non-GAAP Measures do not reflect our tax expense or any cash requirements to pay income taxes;
• Certain Non-GAAP Measures do not reflect interest expense, or the cash requirements necessary to service interest payments on our indebtedness; and
• Certain Non-GAAP Measures do not reflect the impact of earnings or charges resulting from matters we do not consider to be indicative of our core and/or ongoing operations, but may nonetheless have a material impact on our results of operations.

In addition, because not all companies use identical calculations, our presentation of the Non-GAAP Measures may not be comparable to similarly titled measures of other companies, including companies in our industry.

The following table presents a reconciliation of income from continuing operations as determined in accordance with U.S. GAAP to EBITDA and Adjusted EBITDA, and income from continuing operations margin (expressed as a percentage of net sales) to Adjusted EBITDA margin (expressed as a percentage of net sales) for the periods indicated:

(Dollar amounts in thousands)

28

The following table sets forth a reconciliation of income from continuing operations as determined in accordance with U.S. GAAP to Adjusted Net Income for the periods indicated:

(Dollar amounts in thousands, except per share data)

The following table presents the reconciliation of income from continuing operations per diluted share to Adjusted net income per diluted share for the periods presented:

The following table presents a reconciliation of net cash flows by operating activities of continuing operations as determined in accordance with U.S. GAAP to Free Cash Flow for the periods presented:

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

(b) Represents consulting costs related to the implementation of our enterprise resource planning system.

(c) Represents non-recurring third-party business development, consulting and legal costs and debt extinguishment costs related to the Marine Products Transaction.

(d) Represents non-cash charges recorded in our Leisure segment for impairment of other intangible assets. See Note 8 within Notes to the Consolidated Financial Statements for more information on impairment charges.

(e) Represents an inventory step-up charge related to the Marine Products Transaction.

(f) Reflects income tax expense at a tax rate of 23.0% for 2026, and 20.0% for 2025 and 2024.

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

Liquidity and Capital Resources

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

Cash and cash equivalents totaled $43.9 million as of June 30, 2026, an increase of $15.0 million from $28.9 million as of June 30, 2025. There were no short-term investments as of June 30, 2026, compared to $50.5 million as of June 30, 2025. Net changes in Cash and cash equivalents and Short-term investments include certain investment securities maturing with proceeds used in connection with funding the Marine Products Transaction. Refer to Note 4 — Business Combinations in the Notes to Consolidated Financial Statements for further details.

In connection with the Marine Products Transaction, the Company temporarily borrowed approximately $25.0 million under the Revolving Credit Facility to ensure liquidity during the transaction closing process. The outstanding balance was subsequently repaid prior to June 30, 2026. Accordingly, as of June 30, 2026 and 2025, we had no long-term debt outstanding and $75 million and $100.0 million, respectively, available borrowing capacity under the Revolving Credit Facility. Refer to Note 10 – Long-Term Debt in the Notes to Consolidated Financial Statements for further details.

On July 24, 2023, the Board authorized a new share repurchase program under which the Company may repurchase up to $50.0 million of its outstanding shares of common stock. The new authorization became effective upon the completion of the Company’s previously existing $50.0 million share repurchase authorization. As of June 30, 2026, $23.5 million remained available under the new authorization.

During fiscal 2026 and fiscal 2025, the Company repurchased 116,370 shares and 531,970 shares of common stock for $2.3 million and $9.5 million, respectively, in cash, including related fees and expenses.

The following table and discussion below relate to our cash flows from continuing operations for operating, investing, and financing activities:

(Dollar amounts in thousands)

Fiscal 2026 Cash Flow from Continuing Operations

Net cash provided by operating activities was $30.4 million, primarily due to net loss adjusted for non-cash items and favorable changes in working capital. Working capital is defined as accounts receivable, income tax receivable, inventories, and prepaid expenses and other current assets net of accounts payable, income tax payable, and accrued expenses and other current liabilities as presented in the consolidated balance sheets, excluding the impact of acquisitions and non-cash adjustments. Favorable changes in working capital primarily consisted of an increase in accounts payable and decrease in inventories, partially offset by a decrease in income tax payable and an increase in accounts receivable and prepaid expenses and other current assets. Accounts payable increased due to timing of professional fee payments related to the Marine Products Transaction and timing of purchases at the end of the period compared to the prior-year period. Inventories decreased primarily due to the inventory step-up charge related to the Marine Products Transaction. Income tax payable decreased during the period; refer to Note 11 – Income Taxes in the Notes to Consolidated Financial Statements for further details. Accounts receivable increased due to timing of sales at the end of the period compared to the end of the prior-year period. Prepaid expenses and other current assets increased due to additional prepaid insurance related to the Marine Products Transaction and increased prepaid IT and sales-related expenditures.

Net cash used in investing activities was $11.4 million, which included $54.1 million for business combinations, net of cash acquired, and $8.1 million in capital expenditures, partially offset by net proceeds of $50.8 million from available-for-sale securities. Our capital spending was primarily focused on tooling, machinery and equipment, and information technology.

Net cash used in financing activities was $4.2 million, which included share repurchases totaling $2.3 million, excluding related fees and expenses. In connection with the Marine Products Transaction, the Company temporarily borrowed approximately $25.0 million under the Revolving Credit Facility to ensure liquidity during the transaction closing process. The outstanding balance was subsequently repaid prior to June 30, 2026.

Fiscal 2025 Cash Flow from Continuing Operations

Net cash provided by operating activities was $38.2 million, primarily due to net income and favorable working capital changes. Favorable changes in working capital primarily consisted of a decrease in inventories, accounts receivable, other assets, prepaid expenses and other current assets, and an increase in income tax payable, partially offset by a decrease in accounts payable. Inventories decreased due to timing of sales at the end of the period compared to the end of the prior-year and planned raw materials reduction due to lower unit production volume. Accounts receivable decreased due to timing of sales at the end of the period compared to the end of the prior-year period. Income tax payable increased due to timing of estimated payments. Prepaid expenses and other current assets decreased mainly due to lower general insurance premiums. Accounts payable decreased due to a reduction in raw material purchases and timing of purchases at the end of the period compared to the prior-year period.

Net cash provided by investing activities was $20.0 million, which included net proceeds of $29.2 million from available-for-sale securities, partially offset by $9.2 million in capital expenditures. Our capital spending was primarily focused on information technology, tooling and machinery and equipment.

Net cash used in financing activities was $60.1 million, which included share repurchases totaling $9.5 million, excluding related fees and expenses, and $49.5 million used to repay outstanding borrowings of the Term Loan. Drawn amounts on the Revolving Credit Facility were fully repaid as of June 30, 2025.

Off-Balance Sheet Arrangements

The Company did not have any off-balance sheet financing arrangements as of June 30, 2026.

Related Party Transactions

See Note 14 – Related Party Transactions in the accompanying Notes to Consolidated Financial Statements for further information.

Contractual Obligations

As of June 30, 2026, the Company’s material cash obligations were as follows:

Long-Term Debt Obligations — See Note 10 – Long-Term Debt in the accompanying Notes to Consolidated Financial Statements for further information.

Purchase Commitments — As of June 30, 2026, the Company is committed to purchasing $1.3 million of engines. See Note 13 in the accompanying Notes to Consolidated Financial Statements for more information.

Repurchase Obligations — The Company has reserves to cover potential losses associated with repurchase obligations based on historical experience and current facts and circumstances. We incurred no material impact from repurchase events during fiscal 2026, 2025, or 2024. An adverse change in retail sales, however, could require us to repurchase boats repossessed by floor plan financing companies upon an event of default by any of our dealers, subject in some cases to an annual limitation. See Note 13 in the accompanying Notes to Consolidated Financial Statements for more information.

In addition to the above, we have unrecognized tax benefits that are not reflected here because the Company cannot predict when open income tax years will close with completed examinations. See Note 11 in Notes to Consolidated Financial Statements for more information.

Critical Accounting Estimates

Significant accounting policies are described in the notes to the consolidated financial statements. In the application of these policies, certain estimates are made that may have a material impact on our financial condition and results of operations. Actual results could differ from those estimates and cause our reported net income to vary significantly from period to period. For additional information regarding these policies, see Note 1 – Significant Accounting Policies in Notes to Consolidated Financial Statements.

Asset Impairment

Goodwill

The Company reviews goodwill for impairment at its annual impairment testing date, which is June 30, and whenever events or changes in circumstances indicate that the fair value of a reporting unit may be below its carrying value. As part of the impairment tests, the Company may perform a qualitative, rather than quantitative, assessment to determine whether the fair values of its reporting units are “more likely than not” to be greater than their carrying values. In performing this qualitative analysis, the Company considers various factors, including the effect of market or industry changes and the reporting units’ actual results compared to projected results.

If the fair value of a reporting unit does not meet the “more likely than not” criteria discussed above, the impairment test for goodwill is a quantitative test. This test involves comparing the fair value of the reporting unit with its carrying value. If the fair value exceeds the carrying value, goodwill is not considered impaired. If the carrying amount exceeds the fair value then the goodwill is considered impaired and an impairment loss is recognized in an amount by which the carrying value exceeds the reporting unit’s fair value, not to exceed the carrying amount of the goodwill allocated to that reporting unit.

The Company calculates the fair value of its reporting units considering both the income approach and market approach. The income approach calculates the fair value of the reporting unit using a discounted cash flow method. Internally forecasted future cash flows, which the Company believes reasonably approximate market participant assumptions, are discounted using a weighted average cost of capital (“Discount Rate”) developed for each reporting unit. The Discount Rate is developed using market observable inputs, as well as considering whether or not there is a measure of risk related to the specific reporting unit’s forecasted performance. Fair value under the market approach is determined for each reporting unit by applying market multiples for comparable public companies to the reporting unit’s financial results. The key judgements in these calculations are the assumptions used in determining the reporting unit’s forecasted future performance, including revenue growth and operating margins, as well as the perceived risk associated with those forecasts in determining the Discount Rate, along with selecting representative market multiples.

As of June 30, 2026, the Company had goodwill balances associated with the Performance and Wake reporting unit and the Recreation and Sport Fishing reporting unit. The Company performed a qualitative assessment of each reporting unit, as appropriate, and concluded that the fair value of each exceeded its carrying value.

Other Intangible Assets

The Company’s primary intangible assets other than goodwill are dealer networks and trade names acquired in business combinations. These intangible assets are initially valued using a methodology commensurate with the intended use of the asset. The dealer networks were valued using an income approach, which requires an estimate or forecast of the expected future cash flows from the dealer network through the application of the multi-period excess earnings approach. The fair value of trade names is measured using a relief-from-royalty approach, a variation of the income approach, which requires an estimate or forecast of the expected future cash flows. This method assumes the value of the trade name is the discounted cash flows of the amount that would be paid to third parties had the Company not owned the trade name and instead licensed the trade name from another company. The basis for future sales projections for these methods are based on internal revenue forecasts by reporting unit, which the Company believes represent reasonable market participant assumptions. The future cash flows are discounted using an applicable Discount Rate as well as any potential risk premium to reflect the inherent risk of holding a standalone intangible asset.

The key judgements in these fair value calculations, as applicable, are: assumptions used in developing internal revenue growth and dealer expense forecasts, assumed dealer attrition rates, the selection of an appropriate royalty rate, as well as the perceived risk associated with those forecasts in determining the Discount Rate.

The costs of amortizable intangible assets, including dealer networks, are recognized over their expected useful lives using the straight-line method. The dealer network intangible asset within our Performance and Wake segment is fully amortized. The dealer network intangible assets within our Leisure and Recreation and Sport Fishing that are subject to amortization are evaluated for impairment using a process similar to that used to evaluate long-lived assets as described below. As discussed below, the Company recorded an impairment charge related to the Crest dealer network intangible asset within the Leisure segment during fiscal 2026.

Intangible assets not subject to amortization, including trade names, are assessed for impairment at least annually, at June 30, and whenever events or changes in circumstances indicate that it is more likely than not that an asset may be impaired. As part of the annual test, the Company may perform a qualitative, rather than quantitative, assessment to determine whether each trade name intangible asset is “more likely than not” impaired. In performing this qualitative analysis, the Company considers various factors, including macroeconomic events, industry and market events and cost related events. If the “more likely than not” criteria is not met, the impairment test for indefinite-lived intangible assets consists of a comparison of the fair value of the intangible asset with its carrying amount. An impairment loss is recognized for the amount by which the carrying value exceeds the fair value of the asset.

During the fiscal 2026 fourth quarter, the Company identified indicators of impairment related to the Crest brand intangible assets within the Leisure segment and performed impairment analyses for both the Crest dealer network and Crest trade name. The dealer network was evaluated for recoverability using an undiscounted cash flows analysis and, because the carrying value was not recoverable, its fair value was determined using a discounted cash flow approach. The Crest trade name was tested for impairment by comparing its estimated fair value, determined using the relief-from-royalty method, to its carrying value. Based on these analyses, the Company concluded that the carrying values of both the Crest dealer network and Crest trade name exceeded their respective fair values. As a result, the Company recorded impairment charges of $4.1 million and $6.0 million related to the Crest dealer network and Crest trade name, respectively, reducing the assets to their estimated fair values.

Long-Lived Assets

The Company assesses the potential for impairment of its long-lived assets if facts and circumstances, such as declines in sales, earnings, or cash flows or adverse changes in the business climate, suggest that they may be impaired. A current expectation that, more likely than not, a long-lived asset (asset group) will be sold or otherwise disposed of significantly before the end of its previously estimated useful life will also trigger a review for impairment. The Company performs its assessment by comparing the book value of the asset groups to the estimated future undiscounted cash flows associated with the asset groups. If any impairment in the carrying value of its long-lived assets is indicated, the assets would be adjusted to an estimate of fair value.

During the year ended June 30, 2024, the Company recognized $6.9 million in long-lived asset impairment charges related to its Aviara reporting unit. These charges are included in the loss from discontinued operations.

In conjunction with the impairment assessment as discussed above, the Company determined certain indicators of potential impairment existed for the asset group within the Leisure segment, resulting in an undiscounted cash flow analysis. The analysis concluded the undiscounted cash flows exceeded the carrying value of the asset group, resulting in no impairment.

Business Combinations — We allocate the purchase price of acquired businesses to the tangible and identifiable intangible assets acquired and liabilities assumed based on their estimated fair values at the acquisition date. Significant judgment is required in estimating the fair value of acquired intangible assets, including dealer networks and trade names. These valuations are based on discounted cash flow models and other valuation techniques that utilize significant assumptions, including forecasted revenues, customer attrition rates, royalty rates and discount rates. Changes in these assumptions could materially impact the fair value assigned to acquired assets, the amount of goodwill recognized and future amortization and impairment expense.

The Company has evaluated the accounting policies of Marine Products following the acquisition and determined that they are substantially consistent with those of the Company. Certain differences in accounting processes, estimates, and reporting practices identified during the integration process are being conformed to the Company's policies and procedures and are not expected to have a material impact on the Company's consolidated financial statements.

Product Warranties — The Company offers warranties on the sale of certain products generally for periods of between one and ten years from the date of retail sale, and provides a limited lifetime warranty on certain parts, as noted in the warranty. These warranties require us or our dealers to repair or replace defective products during the warranty period at no cost to the consumer. We estimate the costs that may be incurred under our basic limited warranty and record as a liability the amount of such costs at the time the product revenue is recognized. The key judgements that affect our estimate for warranty liability include the number of units sold, historical and anticipated rates of warranty claims and cost per claim. We periodically assess the adequacy of the recorded warranty liabilities and adjust the amounts as actual claims are determined or as changes in the obligations become reasonably estimable. We also adjust our liability for specific warranty matters when they become known and exposure can be estimated. Future warranty claims may differ from our estimate of the warranty liability, which could lead to changes in the Company’s warranty liability in future periods.

***Income Taxes—***Significant judgment is required in evaluating our uncertain tax positions and determining our provision for income taxes. Although we believe our reserves are reasonable, we cannot provide assurance that the final tax outcome of these matters will not be different from that which is reflected in our historical income tax provisions and accruals. We adjust these reserves in light of changing facts and circumstances, such as the closing of a tax audit or the refinement of an estimate. To the extent that the final tax outcome of these matters is different than the amounts recorded, such differences will impact the provision for income taxes in the period in which such determination is made. The provision for income taxes includes the impact of reserve provisions and changes to reserves that are considered appropriate, as well as the related net interest.

Revenue Recognition — The Company’s revenue is derived primarily from the sale of boats and trailers, marine parts, and accessories to its independent dealers. The Company recognizes revenue when obligations under the terms of a contract are satisfied and control over promised goods is transferred to a customer. For substantially all sales, this occurs when the product is released to the carrier responsible for transporting it to a customer. The Company typically receives payment from the floor plan financing providers within 5 business days of shipment. Revenue is measured as the amount of consideration we expect to receive in exchange for a product. The Company offers dealer incentives that include wholesale rebates, retail rebates and promotions, floor plan reimbursement or cash discounts, and other allowances that are recorded as reductions of revenues in net sales in the consolidated statements of operations. The consideration recognized represents the amount specified in a contract with a customer, net of estimated incentives the Company reasonably expects to pay. The estimated liability and reduction in revenue for dealer incentives is recorded at the time of sale. Subsequent adjustments to incentive estimates are possible because actual results may differ from these estimates if conditions dictate the need to enhance or reduce sales promotion and incentive programs or if dealer achievement or other items vary from historical trends. Accrued dealer incentives are included in Accrued expenses and other current liabilities in the accompanying consolidated balance sheets.

Rebates and Discounts

Dealers earn wholesale rebates based on purchase volume commitments and achievement of certain performance metrics. The Company estimates the amount of wholesale rebates based on historical achievement, forecasted volume, and assumptions regarding dealer behavior. Rebates that apply to boats already in dealer inventory are referred to as retail rebates. The Company estimates the amount of retail rebates based on historical data for specific boat models adjusted for forecasted sales volume, product mix, dealer and consumer behavior, and assumptions concerning market conditions. The Company also utilizes various programs whereby it offers cash discounts or agrees to reimburse its dealers for certain floor plan interest costs incurred by dealers for limited periods of time, generally ranging up to nine months.

Other Revenue Recognition Matters

Dealers generally have no right to return unsold boats. Occasionally, the Company may accept returns in limited circumstances and at the Company’s discretion under its warranty policy. The Company may be obligated, in the event of default by a dealer, to accept returns of unsold boats under its repurchase commitment to floor plan financing providers, who are able to obtain such boats through foreclosure. The repurchase commitment is on an individual unit basis with a term from the date it is financed by the lending institution through the payment date by the dealer, generally not exceeding 30 months. The Company accounts for these arrangements as guarantees and recognizes a liability based on the estimated fair value of the repurchase obligation. The estimated fair value takes into account our estimate of the loss we will incur upon resale of any repurchases. The Company accrues the estimated fair value of this obligation based on the age of inventory currently under floor plan financing and estimated credit quality of dealers holding the inventory. Inputs used to estimate this fair value include significant unobservable inputs that reflect the Company’s assumptions about the inputs that market participants would use and, therefore, this liability is classified within Level 3 of the fair value hierarchy. We incurred no material impact from repurchase events during fiscal 2026, 2025, or 2024. See Note 13 in Notes to Consolidated Financial Statements for more information on repurchase obligations.

New Accounting Pronouncements

See “Part II, Item 8. Financial Statements and Supplementary Data — Note 1 — Significant Accounting Policies — New Accounting Pronouncements.”

Market risk represents the risk of changes in the value of market risk sensitive instruments caused by fluctuations in foreign exchange rates, interest rates, and commodity prices. Changes in these factors could cause fluctuations in the results of our operations and cash flows. In the ordinary course of business, we are primarily exposed to inflation and interest rate risks.

We rely on third parties to supply raw materials used in the manufacturing process, including resins, fiberglass, aluminum, lumber, and steel, as well as product parts and components. The prices for these raw materials, parts, and components fluctuate depending on market conditions and, in some instances, commodity prices or trade policies, including tariffs. Substantial increases in the prices of raw materials, parts, and components would increase our operating costs, and could reduce our profitability if we are unable to recoup the increased costs through higher product prices or improved operating efficiencies.

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) (of the Exchange Act) that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosures. Any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.

As of the end of the period covered by this Form 10-K Annual Report, we carried out an evaluation under the supervision and with the participation of our management, including our chief executive officer and chief financial officer, of the effectiveness of our disclosure controls and procedures. Based on this evaluation, our chief executive officer and chief financial officer have concluded that our disclosure controls and procedures were effective as of June 30, 2026.

Management’s Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act. Internal control over financial reporting is a process to provide reasonable assurance regarding the reliability of our financial reporting for external purposes in accordance with accounting principles generally accepted in the United States. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Under guidelines established by the SEC, companies are permitted to exclude acquisitions from their assessment of internal control over financial reporting during the first year of an acquisition while integrating the acquired company. Accordingly, our management, including our chief executive officer and chief financial officer, assessed the effectiveness of our internal control over financial reporting as of June 30, 2026. In making this assessment, we used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control-Integrated Framework (2013). Based on such assessment our management has concluded that, as of June 30, 2026, our internal control over financial reporting is effective based on those criteria. Our assessment of, and conclusion on, the effectiveness of internal control over financial reporting did not include the internal controls related to the Marine Products, which was acquired on May 15, 2026, and represented 60.3 percent of total assets and 9.6 percent of net sales included in the Company’s consolidated financial statements as of and for the year ended June 30, 2026.

The effectiveness of our internal control over financial reporting as of June 30, 2026, has been audited by our independent registered public accounting firm, Deloitte & Touche LLP, as stated in their report which is included in Item 15 of this Annual Report on Form 10-K.

Changes in Internal Control Over Financial Reporting

We are in the process of integrating Marine Products’ and our internal controls over financial reporting. As a result of these integration activities, certain controls will be evaluated and may be changed. Except as noted above, there have been no changes in our internal control over financial reporting, as defined in Exchange Act Rule 13a-15(f) and 15d-15(f), during the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. During the fiscal year ended June 30, 2026, we completed implementation of an enterprise resource planning (“ERP”) system at our Performance and Wake segment, unifying ERP systems with the Leisure segment, which did not result in significant changes in our internal control over financial reporting.