Form 10-Q MasterCraft Boat Holding For: Jan 01
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended:
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission File Number
(Exact name of registrant as specified in its charter)
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(State or Other Jurisdiction |
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(I.R.S. Employer |
of Incorporation or Organization) |
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Identification No.) |
(Address of Principal Executive Office) (Zip Code)
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(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
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Trading Symbol(s) |
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Name of each exchange on which registered |
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☑
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☑
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer |
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Non-accelerated filer |
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Smaller reporting company |
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Emerging growth company |
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes
As of February 3, 2023, there were
TABLE OF CONTENTS
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PART I |
FINANCIAL INFORMATION |
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Item 1. |
Financial Statements |
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4 |
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5 |
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Unaudited Condensed Consolidated Statements of Stockholders’ Equity |
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Notes to Unaudited Condensed Consolidated Financial Statements |
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Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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2
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains certain “forward-looking statements” within the meaning of the federal securities laws. These forward-looking statements can generally be identified by the use of statements that include words such as “could,” “may,” “might,” “will,” “expect,” “likely,” “believe,” “continue,” “anticipate,” “estimate,” “intend,” “plan,” “project” and other similar words or phrases. Forward-looking statements involve estimates and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements.
The forward-looking statements contained in this Quarterly Report on Form 10-Q are based on assumptions that we have made considering our industry experience and our perceptions of historical trends, current conditions, expected future developments and other important factors we believe are appropriate under the circumstances. As you read and consider this Quarterly Report on Form 10-Q, you should understand that these statements are not guarantees of performance or results. They involve risks, uncertainties (many of which are beyond our control) and assumptions. Although we believe that these forward-looking statements are based on reasonable assumptions, you should be aware that many important factors could affect our actual operating and financial performance and cause our performance to differ materially from the performance anticipated in the forward-looking statements, including but not limited to the following: changes in interest rates, the potential effects of supply chain disruptions and production inefficiencies, general economic conditions, demand for our products, inflation, changes in consumer preferences, competition within our industry, our reliance on our network of independent dealers, our ability to manage our manufacturing levels and our fixed cost base, the successful introduction of our new products, geopolitical conflicts and the other important factors described under the caption “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended June 30, 2022, filed with the Securities and Exchange Commission (“SEC”) on September 9, 2022 (our “2022 Annual Report”) and this Quarterly Report on Form 10-Q (this "Quarterly Report"). Should one or more of these risks or uncertainties materialize, or should any of these assumptions prove incorrect, our actual operating and financial performance may vary in material respects from the performance projected in these forward-looking statements.
Further, any forward-looking statement speaks only as of the date on which it is made, and except as required by law, we undertake no obligation to update any forward-looking statement contained in this Quarterly Report on Form 10-Q to reflect events or circumstances after the date on which it is made or to reflect the occurrence of anticipated or unanticipated events or circumstances. New important factors that could cause our business not to develop as we expect may emerge from time to time, and it is not possible for us to predict all of them.
3
MASTERCRAFT BOAT HOLDINGS, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share amounts)
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Three Months Ended |
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Six Months Ended |
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January 1, |
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January 2, |
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January 1, |
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January 2, |
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2023 |
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2022 |
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2023 |
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2022 |
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NET SALES |
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$ |
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$ |
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$ |
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$ |
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COST OF SALES |
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GROSS PROFIT |
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OPERATING EXPENSES: |
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Selling and marketing |
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General and administrative |
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Amortization of other intangible assets |
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Goodwill impairment |
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Total operating expenses |
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OPERATING INCOME |
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OTHER INCOME (EXPENSE): |
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Interest expense |
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Interest income |
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INCOME BEFORE INCOME TAX EXPENSE |
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INCOME TAX EXPENSE |
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NET INCOME FROM CONTINUING OPERATIONS |
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LOSS FROM DISCONTINUED OPERATIONS, NET OF TAX (Note 3) |
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NET INCOME |
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$ |
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$ |
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$ |
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$ |
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NET INCOME (LOSS) PER SHARE: |
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Basic |
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Continuing operations |
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$ |
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$ |
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$ |
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$ |
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Discontinued operations |
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( |
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Net income |
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$ |
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$ |
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$ |
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$ |
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Diluted |
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Continuing operations |
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$ |
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$ |
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$ |
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$ |
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Discontinued operations |
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Net income |
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$ |
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$ |
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$ |
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$ |
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WEIGHTED AVERAGE SHARES USED FOR COMPUTATION OF: |
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Basic earnings per share |
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Diluted earnings per share |
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Notes to Unaudited Condensed Consolidated Financial Statements form an integral part of the condensed consolidated financial statements.
4
MASTERCRAFT BOAT HOLDINGS, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except per share amounts)
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January 1, |
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June 30, |
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2023 |
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2022 |
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ASSETS |
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CURRENT ASSETS: |
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Cash and cash equivalents |
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$ |
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$ |
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Held-to-maturity securities (Note 4) |
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Accounts receivable, net of allowance of $ |
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Inventories, net (Note 5) |
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Prepaid expenses and other current assets |
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Current assets associated with discontinued operations (Note 3) |
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Total current assets |
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Property, plant and equipment, net |
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Goodwill (Note 6) |
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Other intangible assets, net (Note 6) |
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Deferred income taxes |
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Deferred debt issuance costs, net |
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Other long-term assets |
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Non-current assets associated with discontinued operations (Note 3) |
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Total assets |
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$ |
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$ |
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LIABILITIES AND STOCKHOLDERS' EQUITY |
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CURRENT LIABILITIES: |
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Accounts payable |
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Income tax payable |
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Accrued expenses and other current liabilities (Note 7) |
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Current portion of long-term debt, net of unamortized debt issuance costs (Note 9) |
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Current liabilities associated with discontinued operations (Note 3) |
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Total current liabilities |
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Long-term debt, net of unamortized debt issuance costs (Note 9) |
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Unrecognized tax positions |
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Other long-term liabilities |
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Total liabilities |
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STOCKHOLDERS' EQUITY: |
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Common stock, $ |
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Additional paid-in capital |
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Retained earnings |
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Total stockholders' equity |
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Total liabilities and stockholders' equity |
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$ |
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$ |
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Notes to Unaudited Condensed Consolidated Financial Statements form an integral part of the condensed consolidated financial statements.
5
MASTERCRAFT BOAT HOLDINGS, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(Dollars in thousands)
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Additional |
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Common Stock |
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Paid-in |
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Retained |
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Shares |
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Amount |
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Capital |
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Earnings |
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Total |
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Balance at June 30, 2022 |
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$ |
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$ |
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$ |
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$ |
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Share-based compensation activity |
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— |
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Repurchase and retirement of common stock |
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( |
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( |
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( |
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— |
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( |
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Net income |
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— |
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— |
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— |
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Balance at October 2, 2022 |
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Share-based compensation activity |
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— |
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— |
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Repurchase and retirement of common stock |
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( |
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( |
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( |
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— |
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( |
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Net income |
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— |
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— |
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— |
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Balance at January 1, 2023 |
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$ |
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$ |
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$ |
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$ |
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Additional |
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Retained Earnings |
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Common Stock |
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Paid-in |
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(Accumulated |
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Shares |
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Amount |
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Capital |
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Deficit) |
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Total |
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Balance at June 30, 2021 |
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$ |
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$ |
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$ |
( |
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$ |
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Share-based compensation activity |
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— |
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Repurchase and retirement of common stock |
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( |
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( |
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( |
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— |
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( |
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Net income |
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— |
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— |
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— |
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Balance at October 3, 2021 |
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( |
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Share-based compensation activity |
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— |
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Repurchase and retirement of common stock |
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( |
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( |
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( |
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— |
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( |
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Net income |
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— |
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— |
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— |
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Balance at January 2, 2022 |
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$ |
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$ |
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$ |
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$ |
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Notes to Unaudited Condensed Consolidated Financial Statements form an integral part of the condensed consolidated financial statements.
6
MASTERCRAFT BOAT HOLDINGS, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
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Six Months Ended |
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January 1, |
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January 2, |
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2023 |
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2022 |
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CASH FLOWS FROM OPERATING ACTIVITIES: |
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Net income |
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$ |
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$ |
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Loss from discontinued operations |
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Net income from continuing operations |
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Adjustments to reconcile net income from continuing operations to net cash provided by operating activities: |
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Depreciation and amortization |
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Share-based compensation |
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Unrecognized tax benefits |
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( |
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Deferred income taxes |
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( |
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Amortization of debt issuance costs |
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Goodwill impairment |
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Changes in certain operating assets and liabilities |
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( |
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Other, net |
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Net cash provided by operating activities of continuing operations |
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Net cash used in operating activities of discontinued operations |
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Net cash provided by operating activities |
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CASH FLOWS FROM INVESTING ACTIVITIES: |
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Purchases of property, plant and equipment |
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( |
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( |
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Purchases of investments |
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( |
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Net cash used in investing activities of continuing operations |
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( |
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( |
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Net cash used in investing activities of discontinued operations |
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( |
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( |
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Net cash used in investing activities |
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( |
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( |
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CASH FLOWS FROM FINANCING ACTIVITIES: |
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Principal payments on revolving credit facility |
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( |
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Borrowings on revolving credit facility |
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Principal payments on long-term debt |
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( |
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( |
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Repurchase and retirement of common stock |
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( |
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( |
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Other, net |
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( |
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( |
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Net cash used in financing activities of continuing operations |
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( |
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( |
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NET CHANGE IN CASH AND CASH EQUIVALENTS |
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( |
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( |
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CASH AND CASH EQUIVALENTS — BEGINNING OF PERIOD |
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CASH AND CASH EQUIVALENTS — END OF PERIOD |
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$ |
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$ |
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SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: |
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