Company Quick10K Filing
MCBC Holdings
Price14.62 EPS1
Shares19 P/E13
MCap275 P/FCF8
Net Debt107 EBIT37
TEV383 TEV/EBIT10
TTM 2019-09-29, in MM, except price, ratios
10-Q 2021-01-03 Filed 2021-02-10
10-Q 2020-10-04 Filed 2020-11-12
10-K 2020-06-30 Filed 2020-09-11
10-Q 2020-03-29 Filed 2020-05-08
10-Q 2019-12-29 Filed 2020-02-05
10-Q 2019-09-29 Filed 2019-11-07
10-K 2019-06-30 Filed 2019-09-13
10-Q 2019-03-31 Filed 2019-05-09
10-Q 2018-12-30 Filed 2019-02-08
10-Q 2018-09-30 Filed 2018-11-09
10-K 2018-06-30 Filed 2018-09-07
10-Q 2018-04-01 Filed 2018-05-11
10-Q 2017-12-31 Filed 2018-02-09
10-Q 2017-10-01 Filed 2017-11-13
10-K 2017-06-30 Filed 2017-09-08
10-Q 2017-04-02 Filed 2017-05-12
10-Q 2017-01-01 Filed 2017-02-10
10-Q 2016-10-02 Filed 2016-11-10
10-K 2016-06-30 Filed 2016-09-09
10-Q 2016-03-27 Filed 2016-05-06
10-Q 2015-12-27 Filed 2016-02-05
10-Q 2015-09-27 Filed 2015-11-06
10-K 2015-06-30 Filed 2015-09-18
8-K 2020-11-11
8-K 2020-10-21
8-K 2020-09-09
8-K 2020-08-13
8-K 2020-08-03
8-K 2020-07-16
8-K 2020-07-01
8-K 2020-05-06
8-K 2020-04-22
8-K 2020-03-25
8-K 2020-03-19
8-K 2020-02-05
8-K 2019-12-02
8-K 2019-11-07
8-K 2019-10-30
8-K 2019-10-30
8-K 2019-10-23
8-K 2019-09-26
8-K 2019-09-12
8-K 2019-07-18
8-K 2019-05-09
8-K 2019-03-08
8-K 2019-02-07
8-K 2018-11-08
8-K 2018-10-23
8-K 2018-10-01
8-K 2018-09-13
8-K 2018-09-10
8-K 2018-09-06
8-K 2018-07-01
8-K 2018-05-10
8-K 2018-02-08

MCFT 10Q Quarterly Report

Item 2.Management's Discussion and Analysis of Financial Condition and Results of Operations.
Item 3.Quantitative and Qualitative Disclosures About Market Risk.
Item 4.Controls and Procedures.
Part II - Other Information
Item 1. Legal Proceedings.
Item 1A. Risk Factors.
Item 2. Unregistered Sales of Securities and Use of Proceeds.
Item 3. Defaults Upon Senior Securities.
Item 4. Mine Safety Disclosures.
Item 5. Other Information.
Item 6.Exhibits, Financial Statement Schedules.
EX-10.1 mcft-ex101_12.htm
EX-31.1 mcft-ex311_10.htm
EX-31.2 mcft-ex312_9.htm
EX-32.1 mcft-ex321_8.htm
EX-32.2 mcft-ex322_7.htm

MCBC Holdings Earnings 2021-01-03

Balance SheetIncome StatementCash Flow
28022216410648-102013201520172020
Assets, Equity
130101724314-152013201520172020
Rev, G Profit, Net Income
65355-25-55-852013201520172020
Ops, Inv, Fin

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

 

 

FORM 10-Q

 

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: January 3, 2021

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 001-37502

 

 

 

MASTERCRAFT BOAT HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

 

 

Delaware

 

06-1571747

(State or Other Jurisdiction

 

(I.R.S. Employer

of Incorporation or Organization)

 

Identification No.)

 

100 Cherokee Cove Drive, Vonore, TN 37885

(Address of Principal Executive Office) (Zip Code)

 

(423) 884-2221

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

 

Trading

Symbol(s)

 

Name of each exchange on which registered

Common Stock

 

MCFT

 

NASDAQ

 

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.          Yes               No

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).          Yes               No

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

Accelerated filer

 

 

 

 

Non-accelerated filer

Smaller reporting company

 

 

 

 

Emerging growth company

 

 

 

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               No

As of February 8, 2021, there were 18,949,261 shares of the Registrant’s common stock, par value $0.01 per share, issued and outstanding.

 

 

 


 

 

 

TABLE OF CONTENTS

 

 

 

 

 

 

Page

 

 

 

PART I

FINANCIAL INFORMATION

 

Item 1.

Financial Statements

 

 

Unaudited Condensed Consolidated Statements of Operations

4

 

Unaudited Condensed Consolidated Balance Sheets

5

 

Unaudited Condensed Consolidated Statements of Stockholders’ Equity

6

 

Unaudited Condensed Consolidated Statements of Cash Flows

7

 

Notes to Unaudited Condensed Consolidated Financial Statements

8

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

17

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

28

Item 4.

Controls and Procedures

28

 

 

 

PART II

OTHER INFORMATION

 

Item 1.

Legal Proceedings

29

Item 1A.

Risk Factors

29

Item 2.

Unregistered Sales of Securities and Use of Proceeds

29

Item 3.

Defaults Upon Senior Securities

29

Item 4.

Mine Safety Disclosures

29

Item 5.

Other Information

29

Item 6.

Exhibits, Financial Statement Schedules

30

 

 

 

SIGNATURES

 

31

 

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: the potential effects of the coronavirus (“COVID-19”) pandemic on the Company, general economic conditions, demand for our products, 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 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, 2020, filed with the Securities and Exchange Commission (“SEC”) on September 11, 2020 (our “2020 Annual 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)

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

January 3,

 

 

December 29,

 

 

January 3,

 

 

December 29,

 

 

 

2021

 

 

2019

 

 

2021

 

 

2019

 

NET SALES

 

$

118,677

 

 

$

99,628

 

 

$

222,422

 

 

$

209,417

 

COST OF SALES

 

 

89,404

 

 

 

78,486

 

 

 

166,919

 

 

 

162,742

 

GROSS PROFIT

 

 

29,273

 

 

 

21,142

 

 

 

55,503

 

 

 

46,675

 

OPERATING EXPENSES:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling and marketing

 

 

2,989

 

 

 

4,343

 

 

 

5,896

 

 

 

8,407

 

General and administrative

 

 

8,352

 

 

 

5,477

 

 

 

17,284

 

 

 

13,262

 

Amortization of other intangible assets

 

 

987

 

 

 

987

 

 

 

1,974

 

 

 

1,974

 

Total operating expenses

 

 

12,328

 

 

 

10,807

 

 

 

25,154

 

 

 

23,643

 

OPERATING INCOME

 

 

16,945

 

 

 

10,335

 

 

 

30,349

 

 

 

23,032

 

OTHER EXPENSE:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

870

 

 

 

1,237

 

 

 

1,889

 

 

 

2,581

 

INCOME BEFORE INCOME TAX EXPENSE

 

 

16,075

 

 

 

9,098

 

 

 

28,460

 

 

 

20,451

 

INCOME TAX EXPENSE

 

 

3,574

 

 

 

2,219

 

 

 

6,392

 

 

 

4,949

 

NET INCOME

 

$

12,501

 

 

$

6,879

 

 

$

22,068

 

 

$

15,502

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EARNINGS PER SHARE:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.66

 

 

$

0.37

 

 

$

1.17

 

 

$

0.83

 

Diluted

 

$

0.66

 

 

$

0.37

 

 

$

1.17

 

 

$

0.83

 

WEIGHTED AVERAGE SHARES USED FOR COMPUTATION OF:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per share

 

 

18,807,316

 

 

 

18,730,688

 

 

 

18,790,826

 

 

 

18,727,267

 

Diluted earnings per share

 

 

18,928,408

 

 

 

18,770,783

 

 

 

18,897,617

 

 

 

18,770,770

 

 

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)

 

 

 

January 3,

 

 

June 30,

 

 

 

2021

 

 

2020

 

ASSETS

 

 

 

 

 

 

 

 

CURRENT ASSETS:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

12,074

 

 

$

16,319

 

Accounts receivable, net of allowances of $164 and $247, respectively

 

 

7,403

 

 

 

6,145

 

Income tax receivable

 

 

4,828

 

 

 

4,924

 

Inventories, net (Note 3)

 

 

34,570

 

 

 

25,636

 

Prepaid expenses and other current assets

 

 

3,696

 

 

 

3,719

 

Total current assets

 

 

62,571

 

 

 

56,743

 

Property, plant and equipment, net (Note 4)

 

 

55,976

 

 

 

40,481

 

Goodwill (Note 5)

 

 

29,593

 

 

 

29,593

 

Other intangible assets, net (Note 5)

 

 

61,874

 

 

 

63,849

 

Deferred income taxes

 

 

15,782

 

 

 

16,080

 

Deferred debt issuance costs, net

 

 

359

 

 

 

425

 

Other long-term assets

 

 

888

 

 

 

752

 

Total assets

 

$

227,043

 

 

$

207,923

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

 

 

CURRENT LIABILITIES:

 

 

 

 

 

 

 

 

Accounts payable

 

$

14,393

 

 

$

10,510

 

Accrued expenses and other current liabilities (Note 6)

 

 

41,590

 

 

 

35,985

 

Current portion of long-term debt, net of unamortized debt issuance costs (Note 7)

 

 

9,739

 

 

 

8,932

 

Total current liabilities

 

 

65,722

 

 

 

55,427

 

Long-term debt, net of unamortized debt issuance costs (Note 7)

 

 

84,399

 

 

 

99,666

 

Unrecognized tax positions

 

 

4,548

 

 

 

3,683

 

Other long-term liabilities

 

 

373

 

 

 

277

 

Total liabilities

 

 

155,042

 

 

 

159,053

 

COMMITMENTS AND CONTINGENCIES

 

 

 

 

 

 

 

 

STOCKHOLDERS' EQUITY:

 

 

 

 

 

 

 

 

Common stock, $.01 par value per share — authorized, 100,000,000 shares; issued and outstanding, 18,949,295 shares at January 3, 2021 and 18,871,637 shares at June 30, 2020

 

 

189

 

 

 

189

 

Additional paid-in capital

 

 

117,245

 

 

 

116,182

 

Accumulated deficit

 

 

(45,433

)

 

 

(67,501

)

Total stockholders' equity

 

 

72,001

 

 

 

48,870

 

Total liabilities and stockholders' equity

 

$

227,043

 

 

$

207,923

 

 

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)

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

 

 

 

 

 

 

 

 

 

Common Stock

 

 

Paid-in

 

 

Accumulated

 

 

 

 

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

Total

 

Balance at June 30, 2020

 

 

18,871,637

 

 

$

189

 

 

$

116,182

 

 

$

(67,501

)

 

$

48,870

 

Share-based compensation activity

 

 

80,701

 

 

 

 

 

 

486

 

 

 

 

 

 

486

 

Net income

 

 

 

 

 

 

 

 

 

 

 

9,567

 

 

 

9,567

 

Balance at October 4, 2020

 

 

18,952,338

 

 

 

189

 

 

 

116,668

 

 

 

(57,934

)

 

 

58,923

 

Share-based compensation activity

 

 

(3,043

)

 

 

 

 

 

577

 

 

 

 

 

 

577

 

Net income

 

 

 

 

 

 

 

 

 

 

 

12,501

 

 

 

12,501

 

Balance at January 3, 2021

 

 

18,949,295

 

 

$

189

 

 

$

117,245

 

 

$

(45,433

)

 

$

72,001

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

 

 

 

 

 

 

 

 

 

Common Stock

 

 

Paid-in

 

 

Accumulated

 

 

 

 

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

Total

 

Balance at June 30, 2019

 

 

18,764,037

 

 

$

188

 

 

$

115,582

 

 

$

(43,454

)

 

$

72,316

 

Share-based compensation activity

 

 

74,960

 

 

 

1

 

 

 

169

 

 

 

 

 

 

170

 

Net income

 

 

 

 

 

 

 

 

 

 

 

8,623

 

 

 

8,623

 

Balance at September 29, 2019

 

 

18,838,997

 

 

 

189

 

 

 

115,751

 

 

 

(34,831

)

 

 

81,109

 

Share-based compensation activity

 

 

33,169

 

 

 

 

 

 

(78

)

 

 

 

 

 

(78

)

Net income

 

 

 

 

 

 

 

 

 

 

 

6,879

 

 

 

6,879

 

Balance at December 29, 2019

 

 

18,872,166

 

 

$

189

 

 

$

115,673

 

 

$

(27,952

)

 

$

87,910

 

 

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)

 

 

 

Six Months Ended

 

 

 

January 3,

 

 

December 29,

 

 

 

2021

 

 

2019

 

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

 

 

 

 

Net income

 

$

22,068

 

 

$

15,502

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

5,599

 

 

 

5,053

 

Share-based compensation

 

 

1,283

 

 

 

544

 

Unrecognized tax benefits

 

 

865

 

 

 

367

 

Amortization of debt issuance costs

 

 

316

 

 

 

282

 

Changes in certain operating assets and liabilities

 

 

(740

)

 

 

(2,777

)

Other, net

 

 

764

 

 

 

873

 

Net  cash provided by operating activities

 

 

30,155

 

 

 

19,844

 

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

 

 

 

 

Purchases of property, plant and equipment

 

 

(18,903

)

 

 

(11,491

)

Proceeds from disposal of property, plant and equipment

 

 

 

 

 

14

 

Net cash used in investing activities

 

 

(18,903

)

 

 

(11,477

)

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

 

 

 

 

Principal payments on revolving credit facility

 

 

(30,000

)

 

 

 

Borrowings on revolving credit facility

 

 

20,000

 

 

 

 

Principal payments on long-term debt

 

 

(4,710

)

 

 

(8,292

)

Other, net

 

 

(787

)

 

 

(453

)

Net cash provided by financing activities

 

 

(15,497

)

 

 

(8,745

)

NET CHANGE IN CASH AND CASH EQUIVALENTS

 

 

(4,245

)

 

 

(378

)

 

 

 

 

 

 

 

 

 

CASH AND CASH EQUIVALENTS — BEGINNING OF PERIOD

 

 

16,319

 

 

 

5,826

 

CASH AND CASH EQUIVALENTS — END OF PERIOD

 

$

12,074

 

 

$

5,448

 

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:

 

 

 

 

 

 

 

 

Cash payments for interest

 

$

1,348

 

 

$

2,025

 

Cash payments for income taxes

 

 

5,132

 

 

 

5,376

 

SIGNIFICANT NON-CASH INVESTING AND FINANCING ACTIVITIES:

 

 

 

 

 

 

 

 

Capital expenditures in accounts payable and accrued expenses

 

 

594

 

 

 

427

 

 

Notes to Unaudited Condensed Consolidated Financial Statements form an integral part of the condensed consolidated financial statements.

 

7


 

MASTERCRAFT BOAT HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unless stated otherwise dollars in thousands, except per share data)

 

1.ORGANIZATION, BASIS OF PRESENTATION, AND SIGNIFICANT ACCOUNTING POLICIES

Organization — MasterCraft Boat Holdings, Inc. (“Holdings”) was formed on January 28, 2000, as a Delaware holding company and operates primarily through its wholly owned subsidiaries, MasterCraft Boat Company, LLC; MasterCraft Services, LLC; MasterCraft Parts, Ltd.; MasterCraft International Sales Administration, Inc.; and Aviara, LLC (collectively “MasterCraft”); Nautic Star, LLC and NS Transport, LLC (collectively “NauticStar”); and Crest Marine, LLC (“Crest”). Holdings and its subsidiaries collectively are referred to herein as the “Company.”

Basis of PresentationThe Company’s fiscal year begins July 1 and ends June 30, with the interim quarterly reporting periods consisting of 13 weeks. Therefore, the fiscal quarter end will not always coincide with the date of the end of a calendar month.

The unaudited condensed consolidated financial statements have been prepared on the same basis as the Company’s audited consolidated financial statements for the year ended June 30, 2020 and, in the opinion of management, reflect all adjustments considered necessary to present fairly the Company’s financial position as of January 3, 2021, its results of operations for the three and six months ended January 3, 2021 and December 29, 2019, its cash flows for the six months ended January 3, 2021 and December 29, 2019, and its statements of stockholders’ equity for the three and six months ended January 3, 2021 and December 29, 2019. All adjustments are of a normal, recurring nature. Certain information and footnote disclosures normally included in annual consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and the applicable rules and regulations of the SEC for financial information have been condensed or omitted pursuant to such rules and regulations. The June 30, 2020 condensed consolidated balance sheet data was derived from the audited financial statements but does not include all disclosures required by U.S. GAAP for complete financial statements. However, management believes that the disclosures in these condensed consolidated financial statements are adequate to make the information presented not misleading. These condensed consolidated financial statements should be read in conjunction with the Company’s consolidated financial statements and notes thereto included in our 2020 Annual Report on Form 10-K.

Due to the seasonality of the Company’s business, the interim results are not necessarily indicative of the results that may be expected for the remainder of the fiscal year.

 

COVID-19 Pandemic — To balance wholesale production with the then anticipated impacts to retail demand caused by the economic impacts of the COVID-19 pandemic, the Company reduced production in February 2020 and, in late March 2020, temporarily suspended manufacturing operations at all of the Company’s facilities to protect the health of employees and to comply with governmental mandates. The Company resumed operations at reduced production levels at our manufacturing facilities by mid-May. Since that time, our facilities have increased production rates above their pre-COVID levels.

 

Demand for the Company’s products has been strong and, as a result of our employee’s committed efforts, disruptions to the Company’s production have been minimal since resuming operations in May 2020. However, the Company remains subject to risks and uncertainties as a result of the COVID-19 pandemic. The extent of the impact of the COVID-19 pandemic on the Company’s business remains uncertain and difficult to predict, as the response to the COVID-19 pandemic continues to evolve in many countries, including the United States and other markets where the Company and its suppliers operate. Capital markets and economies worldwide have also been negatively impacted by the COVID-19 pandemic, and it has caused economic downturns or recessions in the U.S. and other markets where the Company operates. Such economic disruption could have a material adverse effect on the Company’s business as retail demand for our products could decline which would in-turn reduce wholesale demand from the Company’s dealers. Policymakers around the world have responded and may continue to respond with fiscal and monetary policy actions to support the economy. The magnitude and overall effectiveness of these actions remain uncertain.

 

The severity of the impact of the COVID-19 pandemic on the Company's business will depend on a number of factors, including, but not limited to, the duration, spread, severity, and impact of the pandemic, the remedial actions and stimulus measures adopted by local

8


 

 

and federal governments, the effects of the pandemic on the Company's consumers, dealers, suppliers and workforce, and to the extent normal economic and operating conditions can resume, all of which are uncertain and cannot be predicted. The Company's future results of operations, cash flows, and liquidity could be adversely impacted by delays in payments of outstanding receivable amounts beyond normal payment terms, supply chain or workforce disruptions and uncertain demand, impairment charges, and the impact of any initiatives that the Company may undertake to address financial and operational challenges faced by it and its consumers, dealers, and suppliers. As of the date of issuance of these consolidated financial statements, the extent to which the COVID-19 pandemic may materially impact the Company's financial condition, liquidity, or results of operations is uncertain.

There were no significant changes in or changes in the application of the Company’s significant or critical accounting policies or estimation procedures for the three and six months ended January 3, 2021 as compared with the significant accounting policies described in the Company’s audited consolidated financial statements for the fiscal year ended June 30, 2020.

New Accounting Pronouncements Issued But Not Yet Adopted

 

Income Taxes — In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes (Topic 740). This ASU simplifies the accounting for income taxes by, among other things, eliminating certain existing exceptions related to the general approach in ASC 740 relating to franchise taxes, reducing complexity in the interim-period accounting for year-to-date loss limitations and changes in tax laws, and clarifying the accounting for transactions outside of business combination that result in a step-up in the tax basis of goodwill. The transition requirements are primarily prospective, and the effective date is for interim and annual reporting periods beginning after December 15, 2020, with early adoption permitted. We are currently evaluating the impact of the new guidance on our consolidated financial statements.

Recently Adopted Accounting Standards

 

Fair Value Measurements — In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement. This guidance modifies the disclosure requirements on fair value measurements in Topic 820 by removing disclosures regarding transfers between Level 1 and Level 2 of the fair value hierarchy, by modifying the measurement uncertainty disclosure, and by requiring additional disclosures for Level 3 fair value measurements, among others. The Company adopted this guidance for its fiscal year beginning July 1, 2020. The adoption of this standard did not have an impact on the consolidated financial statements.

 

Current Expected Credit Loss — In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which updated the ASC to use an impairment model that is based on expected losses rather than incurred losses. The Company adopted this guidance for its fiscal year beginning July 1, 2020. The adoption of this standard did not have an impact on the consolidated financial statements.

 

2.

REVENUE RECOGNITION

The following tables present the Company’s revenue by major product category for each reportable segment.

 

 

 

Three Months Ended January 3, 2021

 

 

Three Months Ended December 29, 2019

 

 

 

MasterCraft

 

 

NauticStar

 

 

Crest

 

 

Total

 

 

MasterCraft

 

 

NauticStar

 

 

Crest

 

 

Total

 

Major Product Categories:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Boats and trailers

 

$

80,806

 

 

$

14,857

 

 

$

20,757

 

 

$

116,420

 

 

$

66,332

 

 

$

15,485

 

 

$

16,097

 

 

$

97,914

 

Parts

 

 

1,726

 

 

 

87

 

 

 

138

 

 

 

1,951

 

 

 

1,276

 

 

 

87

 

 

 

121

 

 

 

1,484

 

Other revenue

 

 

227

 

 

 

5

 

 

 

74

 

 

 

306

 

 

 

149

 

 

 

4

 

 

 

77

 

 

 

230

 

Total

 

$

82,759

 

 

$

14,949

 

 

$

20,969

 

 

$

118,677

 

 

$

67,757

 

 

$

15,576

 

 

$

16,295

 

 

$

99,628

 

9


 

 

 

 

 

 

Six Months Ended January 3, 2021

 

 

Six Months Ended December 29, 2019

 

 

 

MasterCraft

 

 

NauticStar

 

 

Crest

 

 

Total

 

 

MasterCraft

 

 

NauticStar

 

 

Crest

 

 

Total

 

Major Product Categories:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Boats and trailers

 

$

149,388

 

 

$

27,073

 

 

$

38,368

 

 

$

214,829

 

 

$

135,619

 

 

$

33,319

 

 

$

34,721

 

 

$

203,659

 

Parts

 

 

6,271

 

 

 

211

 

 

 

529

 

 

 

7,011