MasterCraft Boat Holdings, Inc. (MCFT) Business

ITEM 1. BUSINESS

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.

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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

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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.

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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

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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).