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 2022 and 2021 items and year-to-year
comparisons between 2022 and 2021. Discussions of 2020 items and year-to-year
comparisons between 2021 and 2020 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, 2021  , which was filed with the SEC on September 2,
2021.

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 (loss) margin - We define net income (loss) margin as net income

(loss) divided by net sales, expressed as a percentage.

• Adjusted EBITDA - We define Adjusted EBITDA as earnings before interest

expense, 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 net income (loss)

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 (benefit) related to non-GAAP
      adjustments. For a reconciliation of net income (loss) to Adjusted Net
      Income, see "Non-GAAP Measures" below.


Fiscal 2022 Overview

In fiscal 2022, the Company achieved record net sales of $707.9 million, an increase of 34.6 percent from fiscal 2021. Consolidated unit sales volume increased to 8,217 units, up 14.2 percent from the prior year. Gross profit increased to $162.4 million, up 24.9 percent from $130.0 million in fiscal 2021. Despite our increased costs in operating expenses, selling, general, and administrative expenses as a percentage of sales in fiscal 2022 decreased compared to the prior-year period.

Macroeconomic Events



We are actively monitoring the impact of changing macroeconomic conditions on
our business, including geopolitical events, disrupted global supply chains, and
inflation. The impact of these factors has affected many manufacturers across
various industries including ours. Supply chain challenges continue to evolve,
driven by increased demand, labor shortages, logistical constraints, and rising
prices to our suppliers, creating inefficiencies and shipping delays. Rapidly
increasing material and overhead costs are outpacing price increases as we try
to mitigate the impact. The full extent of the impact on our business,
operations, and financial results will depend on evolving factors that we cannot
predict. See Part I - Item 1A. Risk Factors.


                                       21
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NauticStar Impairment Activity and Sale Subsequent to Yearend



Despite ongoing efforts to improve operational efficiency and throughput at our
NauticStar reporting unit in order to improve sales volumes and yield more
favorable margins, including the engagement of third-party consulting resources
beginning in the third quarter, the NauticStar reporting unit recorded unplanned
negative operating results in the fourth quarter. These results, combined with
the outlook for further supply chain disruptions, labor challenges, and higher
costs from inflationary pressures, resulted in an impairment trigger in the
fourth quarter related to the NauticStar reporting unit's intangible and other
long-lived assets. As a result of our impairment testing, we recognized
impairment charges of $23.8 million at our NauticStar segment (see Note 5 to the
Consolidated Financial Statements for more information related to impairment
charges).

Subsequent to fiscal yearend, we sold the NauticStar business. Pursuant to the
terms of the purchase agreement, substantially all of the assets were sold, and
certain liabilities of NauticStar were assumed by the purchaser, including
product liability and warranty claims. The resulting loss on sale of the
NauticStar business is estimated to be in a range of approximately $20.0 to
$23.0 million. The results of the NauticStar business will be presented as
discontinued operations in the Company's fiscal 2023 first quarter.

In conjunction with the purchase agreement, the Company entered into a joint
employer services agreement and a transition services agreement which provide
certain services to the purchaser for various periods of time after the sale. In
addition, the Company amended its Credit Agreement and received certain consents
and waivers under the Credit Agreement, as amended, related to the sale of the
NauticStar business (see Note 13 for more information related to these
agreements).

                                       22
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Results of Operations



We derived the consolidated statements of operations for the fiscal years ended
June 30, 2022 and 2021 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
                                                                               2022 vs. 2021
                                             2022            2021           Change       % Change
(Dollar amounts in thousands)
Consolidated statements of operations:
NET SALES                                 $   707,862     $   525,808     $  182,054          34.6 %
COST OF SALES                                 545,500         395,837        149,663          37.8 %
GROSS PROFIT                                  162,362         129,971         32,391          24.9 %
OPERATING EXPENSES:
Selling and marketing                          14,624          13,021          1,603          12.3 %
General and administrative                     40,960          37,049          3,911          10.6 %
Amortization of other intangible assets         3,988           3,948             40           1.0 %
Impairments                                    24,933               -         24,933             -
Total operating expenses                       84,505          54,018         30,487          56.4 %
OPERATING INCOME                               77,857          75,953          1,904           2.5 %
OTHER EXPENSE:
Interest expense                                1,471           3,392         (1,921 )       (56.6 %)
Loss on extinguishment of debt                      -             733           (733 )      (100.0 %)
INCOME BEFORE INCOME TAX EXPENSE               76,386          71,828          4,558           6.3 %
INCOME TAX EXPENSE                             18,172          15,658          2,514          16.1 %
NET INCOME                                $    58,214     $    56,170     $    2,044           3.6 %
Additional financial and other data:
Unit sales volume:
MasterCraft                                     3,596           3,301            295           8.9 %
Crest                                           3,156           2,467            689          27.9 %
NauticStar                                      1,365           1,387            (22 )        (1.6 %)
Aviara                                            100              42             58         138.1 %
Consolidated unit sales volume                  8,217           7,197          1,020          14.2 %
Net sales:
MasterCraft                               $   466,027     $   350,812     $  115,215          32.8 %
Crest                                         140,859         102,688         38,171          37.2 %
NauticStar                                     66,253          59,846          6,407          10.7 %
Aviara                                         34,723          12,462         22,261         178.6 %
Consolidated net sales                    $   707,862     $   525,808     $  182,054          34.6 %
Net sales per unit:
MasterCraft                               $       130     $       106     $       24          22.6 %
Crest                                              45              42              3           7.1 %
NauticStar                                         49              43              6          14.0 %
Aviara                                            347             297             50          16.8 %
Consolidated net sales per unit                    86              73             13          17.8 %
Gross margin                                     22.9 %          24.7 %    (180) bps




Net Sales. Net Sales increased 34.6 percent for fiscal 2022 when compared to
fiscal 2021 as a result of increased sales volumes, higher prices, favorable
model mix, and higher option and content sales. Refer to Segment Results for
further details on the drivers of net sales changes.

Gross Margin. Gross Margin percentage declined 180 basis points during fiscal
2022 when compared to fiscal 2021. Lower margins were the result of supply chain
disruptions, labor challenges, and inflationary pressures that drove material
and overhead costs higher,

                                       23
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which were most pronounced at the NauticStar segment. Though we implemented mitigating procedures and phased in mid-cycle price increases to offset these headwinds, supply chain disruptions and inflationary pressures continued to impact our margins.



Operating Expenses. Operating expenses increased 56.4 percent for fiscal 2022
when compared to the same prior-year period. During fiscal 2022, a $1.1 million
goodwill impairment charge was recorded in the Aviara segment and $23.8 million
was recorded in the NauticStar segment for impairment of other intangible assets
and fixed assets, as discussed in Notes 4 and 5 in the Notes to Consolidated
Financial Statements. Additionally, general and administrative expense increased
as a result of continued investments in information technology and product
development. Moreover, third-party consulting fees were recognized at the
NauticStar segment in an effort to improve operational efficiency and increase
throughput. Selling and marketing expense increased due to prior-year expenses
being impacted by the COVID-19 pandemic. Despite our increased costs, selling,
general, and administrative expenses as a percentage of net sales in fiscal 2022
decreased compared to the prior-year period.

Interest Expense. Interest expense decreased $1.9 million driven by lower effective interest rates and lower average outstanding debt balances during fiscal 2022.



Loss on Extinguishment of Debt. Loss on extinguishment of debt totaling $0.7
million was recognized upon refinancing the Company's debt in fiscal 2021. The
loss was comprised of unamortized debt issuance costs related to the previously
existing credit facility.

Income Tax Expense. Our consolidated effective income tax rate increased to 23.8
percent for fiscal 2022 from 21.8 percent for fiscal 2021. See Note 8 in Notes
to Consolidated Financial Statements for more information.

Segment Results

MasterCraft Segment



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


                                                                            2022 vs. 2021
(Dollar amounts in thousands)             2022            2021          Change        % Change
Net sales                              $   466,027     $   350,812     $ 115,215           32.8 %
Operating income                           105,341          73,354        31,987           43.6 %
Purchases of property, plant and
equipment                                    6,642           5,273         1,369           26.0 %

Unit sales volume                            3,596           3,301           295            8.9 %
Net sales per unit                     $       130     $       106     $      24           22.6 %

Net sales increased 32.8 percent during fiscal 2022, when compared to fiscal 2021. The increase was primarily driven by increased sales volumes, higher prices, favorable model mix, and higher option and content sales.



Operating income increased 43.6 percent during fiscal 2022, when compared to the
same prior year period. The increase was driven by higher net sales, offset by
inflationary pressures and production inefficiencies from supply chain
disruptions and labor challenges. Additionally, Selling and marketing expense
increased due to prior-year expenses being impacted by the COVID-19 pandemic.
Also, General and administrative expenses increased as a result of continued
investments in information technology and product development.

                                       24
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Crest Segment



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


                                                                            2022 vs. 2021
(Dollar amounts in thousands)             2022            2021          Change       % Change
Net sales                              $   140,859     $   102,688     $ 38,171           37.2 %
Operating income                            19,892          13,605        6,287           46.2 %
Purchases of property, plant and
equipment                                    4,193             892        3,301          370.1 %

Unit sales volume                            3,156           2,467          689           27.9 %
Net sales per unit                     $        45     $        42     $      3            7.1 %

Net sales increased 37.2 percent during fiscal 2022, when compared to fiscal 2021, as a result of higher sales volumes and higher prices.

Operating income increased 46.2 percent during fiscal 2022, when compared to the same prior year period, primarily due to higher net sales, offset by inflationary pressures.

Purchases of property, plant, and equipment increased $3.3 million during fiscal 2022, when compared to the same prior-year period due to investments in manufacturing capacity expansion and maintenance capital.

NauticStar Segment



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


                                                                            2022 vs. 2021
(Dollar amounts in thousands)             2022            2021          Change       % Change
Net sales                              $    66,253     $    59,846     $   6,407          10.7 %
Operating loss                             (38,338 )        (2,690 )     (35,648 )      1325.2 %
Impairments                                 23,833               -        23,833             -
Purchases of property, plant and
equipment                                    3,524           2,643           881          33.3 %

Unit sales volume                            1,365           1,387           (22 )        (1.6 %)
Net sales per unit                     $        49     $        43     $       6          14.0 %


Net sales increased 10.7 percent during fiscal 2022, when compared to fiscal
2021. The increase was primarily driven by higher prices, higher option sales,
and favorable model mix, partially offset by decreased sales volumes.

Operating loss was $38.3 million for fiscal 2022, compared to $2.7 million for
fiscal 2021. Benefits from higher sales prices were offset by supply chain
disruptions, labor challenges, and higher costs from inflationary pressures.
Additionally, $23.8 million was recorded for impairment charges related to other
intangible assets and fixed assets, as discussed in Notes 4 and 5 in Notes to
Consolidated Financial Statements. Moreover, for fiscal 2022, $1.2 million in
expense was recognized for third-party consulting fees in an effort to improve
operational efficiency and increase throughput at the NauticStar segment.

                                       25
--------------------------------------------------------------------------------

Aviara Segment



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


                                                                            2022 vs. 2021
(Dollar amounts in thousands)             2022            2021          Change        % Change
Net sales                              $    34,723     $    12,462     $  22,261          178.6 %
Operating loss                              (9,038 )        (8,316 )        (722 )          8.7 %
Impairment                                   1,100               -         1,100              -
Purchases of property, plant and
equipment                                    1,461          19,054       (17,593 )        (92.3 %)

Unit sales volume                              100              42            58          138.1 %
Net sales per unit                     $       347     $       297     $      50           16.8 %


Net sales increased 178.6 percent during fiscal 2022, when compared to fiscal
2021, mainly due to an increase in sales volumes, higher prices, and favorable
model mix.

Operating loss was $9.0 million for fiscal 2022, compared to $8.3 million for
fiscal 2021. Inflation, ramp up related inefficiencies at the Merritt Island
facility, including higher overhead costs associated with the new facility, and
a goodwill impairment charge recorded during the first quarter of fiscal 2022,
offset the benefits from increased net sales. See Note 5 in Notes to
Consolidated Financial Statements for more information on the impairment charge.


                                       26
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Non-GAAP Measures

EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin



We define EBITDA as earnings before interest expense, 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 impairment charges, share-based compensation,
operational improvement initiative costs, Aviara transition costs, debt
refinancing charges, Aviara startup costs, and COVID-19 shutdown costs. We
define Adjusted EBITDA margin as Adjusted EBITDA 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 net income
(loss) 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 impairment charges, income tax expense (benefit),
amortization of acquisition intangibles, share-based compensation, operational
improvement initiative costs, Aviara transition costs, debt refinancing charges,
Aviara startup costs, and COVID-19 shutdown costs.

EBITDA, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Income, and
Adjusted Net Income per share, which we refer to collectively as the Non-GAAP
Measures, are not measures of net income (loss) or operating income (loss) 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 (loss), net income (loss) 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 of directors, management, investors, and
other users of the financial statements in comparing our net income (loss) 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;

• The Non-GAAP Measures do not reflect our cash expenditures, or future

requirements for capital expenditures or contractual commitments;

• The Non-GAAP Measures do not reflect changes in, or cash requirements


         for, our working capital needs;


      •  The Non-GAAP Measures do not reflect our tax expense or any cash
         requirements to pay income taxes;


      •  The Non-GAAP Measures do not reflect interest expense, or the cash

requirements necessary to service interest payments on our indebtedness;

and

• The 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.


                                       27
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The following table presents a reconciliation of net income (loss) as determined
in accordance with U.S. GAAP to EBITDA and Adjusted EBITDA, and net income
(loss) margin (expressed as a percentage of net sales) to Adjusted EBITDA margin
(expressed as a percentage of net sales) for the periods indicated:
                                           % of Net                    % of Net                    % of Net
                               2022          sales         2021          sales         2020          sales
Net income (loss)            $  58,214       8.2%        $  56,170       10.7%       $ (24,047 )     -6.6%
Income tax expense
(benefit)                       18,172                      15,658                      (7,565 )
Interest expense                 1,471                       3,392                       5,045
Depreciation and
amortization                    13,614                      11,630                      10,527
EBITDA                          91,471       12.9%          86,850       16.5%         (16,040 )     -4.4%
Impairments(a)                  24,933                           -                      56,437
Share-based compensation         3,458                       2,984                       1,061
Operational improvement
initiative(b)                    1,216                           -                           -
Aviara transition costs(c)           -                       2,150                           -
Debt refinancing
charges(d)                           -                         769                           -
Aviara start-up costs(e)             -                           -                       1,446
COVID-19 shutdown costs(f)           -                           -                       1,394
Adjusted EBITDA              $ 121,078       17.1%       $  92,753       17.6%       $  44,298       12.2%


(a) Represents non-cash charges of $1.1 million recorded in the Aviara segment

for impairment of goodwill and $23.8 million recorded in the NauticStar

segment for impairment of other intangible assets and fixed assets in fiscal

2022, and non-cash charges recorded in the NauticStar and Crest segments for

impairment of goodwill and trade name intangible assets in fiscal 2020. See

Notes 4 and 5 within the Notes to the Consolidated Financial Statements for

more information on impairment charges.

(b) Represents third-party consulting fees associated with the operational

improvement initiative at our NauticStar segment.

(c) Represents costs to transition production of the Aviara brand from Vonore,

Tennessee to Merritt Island, Florida. Costs include duplicative overhead

costs and costs not indicative of ongoing operations (such as training and

facility preparation).

(d) Represents loss recognized upon refinancing the Company's debt in fiscal

2021. The loss is comprised of unamortized debt issuance costs related to the

previously existing credit facility and third-party legal costs associated

with the refinancing.

(e) Represents start-up costs associated with Aviara, a completely new boat brand

in an industry category previously not served by the Company. Start-up costs

presented for fiscal 2020 are related to the AV36 and AV40 models.

(f) Represents lump sum severance payments and costs related to temporary


    continuation of healthcare benefits for certain laid off employees, in
    connection with the COVID-19 pandemic.



                                       28

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The following table sets forth a reconciliation of net income (loss) as
determined in accordance with U.S. GAAP to Adjusted Net Income for the periods
indicated:

                                                 2022               2021             2020
                                                (Dollars in thousands, except per share)
Net income (loss)                           $       58,214      $     56,170     $    (24,047 )
Income tax expense (benefit)                        18,172            15,658           (7,565 )
Impairments(a)                                      24,933                 -           56,437
Amortization of acquisition intangibles              3,881             3,842            3,842
Share-based compensation                             3,458             2,984            1,061
Operational improvement initiative(b)                1,216                 -                -
Aviara transition costs(c)                               -             2,150                -
Debt refinancing charges(d)                              -               769                -
Aviara start-up costs(e)                                 -                 -            1,446
COVID-19 shutdown costs(f)                               -                 -            1,394
Adjusted Net Income before income taxes            109,874            81,573           32,568
Adjusted income tax expense(g)                      25,271            18,762            7,491
Adjusted Net Income                         $       84,603      $     

62,811 $ 25,077



Adjusted Net Income per share:
Basic                                       $         4.58      $       3.34     $       1.34
Diluted                                     $         4.54      $       3.31     $       1.34
Weighted average shares used for the
computation of(h):
Basic Adjusted Net Income per share             18,455,226        18,805,464       18,734,482
Diluted Adjusted Net Income per share           18,636,512        

18,951,521 18,734,482

(a) Represents non-cash charges of $1.1 million recorded in the Aviara segment

for impairment of goodwill and $23.8 million recorded in the NauticStar

segment for impairment of other intangible assets and fixed assets in fiscal

2022, and non-cash charges recorded in the NauticStar and Crest segments for

impairment of goodwill and trade name intangible assets in fiscal 2020. See

Notes 4 and 5 within the Notes to the Consolidated Financial Statements for

more information on impairment charges.

(b) Represents third-party consulting fees associated with the operational

improvement initiative at our NauticStar segment.

(c) Represents costs to transition production of the Aviara brand from Vonore,

Tennessee to Merritt Island, Florida. Costs include duplicative overhead

costs and costs not indicative of ongoing operations (such as training and

facility preparation).

(d) Represents loss recognized upon refinancing the Company's debt in fiscal

2021. The loss is comprised of unamortized debt issuance costs related to the

previously existing credit facility and third-party legal costs associated

with the refinancing.

(e) Represents start-up costs associated with Aviara, a completely new boat brand

in an industry category previously not served by the Company. Start-up costs

presented for fiscal 2020 are related to the AV36 and AV40 models.

(f) Represents lump sum severance payments and costs related to temporary

continuation of healthcare benefits for certain laid off employees, in

connection with the COVID-19 pandemic.

(g) Reflects income tax expense at a tax rate of 23.0% for each period presented.

(h) Represents the Weighted Average Shares Used for the Computation of Basic and

Diluted earnings (loss) per share as presented on the Consolidated Statements

of Operations to calculate Adjusted Net Income per diluted share for all


    periods presented herein.







                                       29

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The following table presents the reconciliation of net income (loss) per diluted share to Adjusted net income per diluted share for the periods presented:



                                                2022             2021       

2020

Net income (loss) per diluted share $ 3.12 $ 2.96

   $      (1.28 )
Impact of adjustments:
Income tax expense (benefit)                        0.98             0.83            (0.40 )
Impairments(a)                                      1.34                -   

3.01


Amortization of acquisition intangibles             0.21             0.20   

0.20


Share-based compensation                            0.19             0.16   

0.06


Operational improvement initiative(b)               0.07                -                -
Aviara transition costs(c)                             -             0.11                -
Debt refinancing charges(d)                            -             0.04                -
Aviara start-up costs(e)                               -                -             0.08
COVID-19 shutdown costs(f)                             -                -             0.07
Adjusted Net Income per diluted share
before income taxes                                 5.91             4.30   

1.74


Impact of adjusted income tax expense on
net income per diluted share before
income taxes(g)                                    (1.37 )          (0.99 )          (0.40 )
Adjusted Net Income per diluted share       $       4.54     $       3.31

$ 1.34

(a) Represents non-cash charges of $1.1 million recorded in the Aviara segment

for impairment of goodwill and $23.8 million recorded in the NauticStar

segment for impairment of other intangible assets and fixed assets in fiscal

2022, and non-cash charges recorded in the NauticStar and Crest segments for

impairment of goodwill and trade name intangible assets in fiscal 2020. See

Notes 4 and 5 within the Notes to the Consolidated Financial Statements for

more information on impairment charges.

(b) Represents third-party consulting fees associated with the operational

improvement initiative at our NauticStar segment.

(c) Represents costs to transition production of the Aviara brand from Vonore,

Tennessee to Merritt Island, Florida. Costs include duplicative overhead

costs and costs not indicative of ongoing operations (such as training and

facility preparation).

(d) Represents loss recognized upon refinancing the Company's debt in fiscal

2021. The loss is comprised of unamortized debt issuance costs related to the

previously existing credit facility and third-party legal costs associated

with the refinancing.

(e) Represents start-up costs associated with Aviara, a completely new boat brand

in an industry category previously not served by the Company. Start-up costs

presented for fiscal 2020 are related to the AV36 and AV40 models.

(f) Represents lump sum severance payments and costs related to temporary

continuation of healthcare benefits for certain laid off employees, in

connection with the COVID-19 pandemic.

(g) Reflects income tax expense at a tax rate of 23.0% for each period presented.


                                       30
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Liquidity and Capital Resources



Our primary liquidity and capital resource needs are to finance working capital,
fund capital expenditures, service our debt, and fund our stock repurchase
program. Our principal sources of liquidity are our cash balance, cash generated
from operating activities, our revolving credit agreement and the refinancing
and/or new issuance of long-term debt.

Cash and cash equivalents totaled $34.2 million as of June 30, 2022, a decrease
of $5.1 million from $39.3 million as of June 30, 2021. Total debt as of June
30, 2022 and June 30, 2021 was $56.5 million and $93.1 million, respectively.

Our working capital was impacted by the $25.2 million increase in inventory during fiscal 2022 mainly due to an increase in raw materials to support higher production volumes and to increase safety stock to manage supply chain risk.



As of June 30, 2022, we have repaid all amounts outstanding under the Revolving
Credit Facility, leaving $100.0 million of available borrowing capacity. As of
June 30, 2022, we had $56.5 million outstanding under the Term Loan. Refer to
Note 7 - Long Term Debt in the Notes to Consolidated Financial Statements for
further details.

On June 24, 2021, the board of directors of the Company authorized a stock
repurchase program that allows for the repurchase of up to $50.0 million of our
common stock during the three-year period ending June 24, 2024. During fiscal
2022, the Company repurchased 975,161 shares of common stock for $25.5 million
in cash, including related fees and expenses. As of June 30, 2022, there was
$24.5 million of availability remaining under the stock repurchase program.

We believe our cash balance, cash from operations, and our ability to borrow, will be sufficient to provide for our liquidity and capital resource needs, including authorized stock repurchases.



The following table summarizes the cash flows from operating, investing, and
financing activities:

                                      2022          2021          2020

Total cash provided by (used in):
Operating activities                $  73,311     $  68,538     $  30,198
Investing activities                  (15,820 )     (27,832 )     (14,218 )
Financing activities                  (62,540 )     (17,773 )      (5,487 )
Net change in cash                  $  (5,049 )   $  22,933     $  10,493



Fiscal 2022 Cash Flow

Net cash provided by operating activities was $73.3 million, mainly due to net
income, partially offset by working capital usage. 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.
Working capital usage primarily consisted of an increase in inventory, accounts
receivable and prepaid expenses and other current assets, partially offset by an
increase in accrued expenses and other current liabilities and accounts payable.
As discussed above, inventory increased $25.2 million. Accounts receivable
increased due to increased sales. Prepaid and other current assets increased due
to higher general insurance premiums. Accrued expenses and other current
liabilities increased due to an increase in warranty costs and dealer
incentives. Accounts payable increased as a result of increased production
levels.

Net cash used for investing activities was $15.8 million, which included capital expenditures. Our capital spending was focused on expanding our capacity, maintenance capital, and investments in information technology.



Net cash used for financing activities was $62.5 million, which included net
payments of $36.7 million on long-term debt and stock repurchases totaling $25.5
million.

Fiscal 2021 Cash Flow

Net cash provided by operating activities in fiscal 2021 totaled $68.5 million
versus $30.2 million in fiscal 2020. The increase is primarily due to higher net
earnings, net of non-cash items, partially offset by changes in working capital
that were affected by production ramp-up activities as we experienced an
increase in retail demand. Accounts receivable increased $5.9 million primarily
due to increased sales across all segments. Inventory increased $28.6 million,
driven by increases to support higher production

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volumes and to increase safety stock to manage supply chain risk. Accounts
payable increased $13.4 million primarily due to timing of payments and higher
production activities. Accrued expenses and other current liabilities increased
$12.2 million primarily driven by incentive-based compensation related to higher
net earnings and higher warranty reserves for the increased sales volumes.

Net cash used for investing activities was $27.8 million, which primarily
included capital expenditures. Our capital spending was focused on expanding our
capacity by purchasing the Merritt Island Facility for $14.2 million, capital
related to the Aviara transition to the Merritt Island Facility, and maintenance
capital.

Net cash used for financing activities was $17.8 million and primarily related to net payments of long-term debt.

Off-Balance Sheet Arrangements

The Company did not have any off-balance sheet financing arrangements as of June 30, 2022.



Contractual Obligations

As of June 30, 2022, the Company's material cash obligations were as follows:

Long-Term Debt Obligations - See Note 7 - Long-Term Debt in the accompanying Notes to Consolidated Financial Statements for further information.



Interest on Long-Term Debt Obligations - As of June 30, 2022, the Company has
estimated total interest payments on its outstanding long-term debt obligations
of $6.6 million, of which $1.8 million is due during the next 12 months.
Interest on variable rate debt instruments was calculated using interest rates
in effect for our borrowings as of June 30, 2022 and holding them constant for
the life of the instrument.

Purchase Commitments - As of June 30, 2022, the Company is committed to purchasing $44.8 million of engines, of which $15.7 million is committed during the next 12 months. See Note 10 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 2022, 2021, or 2020. 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 10 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 8 in Notes to Consolidated Financial Statements for more information.

Application of Critical Accounting Policies and 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 (loss) 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.

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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 discussed further in Note 5 to the Consolidated Financial Statements, during
the years ended June 30, 2022 and 2020, the Company performed quantitative tests
and recognized $1.1 million and $44.4 million in goodwill impairment charges
related to its Aviara and its Crest and NauticStar reporting units,
respectively. As of June 30, 2022, only the MasterCraft reporting unit has a
goodwill balance. The fair value of this reporting unit substantially exceeds
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, approximately ten years for the
dealer networks, using the straight-line method. Intangible assets that are
subject to amortization are evaluated for impairment using a process similar to
that used to evaluate long-lived assets as described below. Intangible assets
not subject to amortization are assessed for impairment at least annually 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.

As discussed further in Note 5 to the Consolidated Financial Statements, during
the years ended June 30, 2022 and 2020, the Company performed quantitative tests
related to its indefinite-lived intangible assets and, during the year ended
June 30, 2022, the Company also performed a recoverability analysis related to
its dealer network intangible asset within the NauticStar reporting unit which
is subject to amortization. During the years ended June 30, 2022 and 2020, the
Company recognized $18.5 million and $12.0 million in intangible asset
impairment charges related to its NauticStar and to its Crest and NauticStar
reporting units, respectively.

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,

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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.

As discussed further in Notes 4 and 5 to the Consolidated Financial Statements,
during the year ended June 30, 2022, the Company recognized $5.3 million in
long-lived asset impairment charges related to its NauticStar reporting unit
which adjusted the related assets to their estimated fair value.

Product Warranties - The Company offers warranties on the sale of certain
products for periods of between one and five years from the date of retail sale.
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-We are subject to income taxes in the United States of America and
the United Kingdom. Our effective tax rates differ from the statutory rates,
primarily due to changes in non-deductible expenses and the valuation allowance,
as further described in Note 8 in Notes to Consolidated Financial Statements.

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.

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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 2022, 2021, or
2020. See Note 10 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."

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