MBUU 10-K & 10-Q changes, risk factors and insider trading

We have a large fixed-cost base that will affect our profitability when demand decreases or when our salescosts decrease.increase at a faster rate than our revenue.

The fixed cost levels of operating a recreational powerboat manufacturer can put pressure on profit margins when sales and production decline.decline or when costs rise. Our profitability depends, in part, on our ability to spread fixed costs over a sufficiently large number of products sold and shipped,shipped. and ifIf we reduce our rate of production or otherwise experience lower revenues,revenues or if our costs increase at a faster rate than our sales, gross margins will be negatively affected. For instance, in fiscal year 20242026 our net sales decreasedincreased at a greatersmaller percentage than our expenses were reducedincreased and, as a result, our gross margin and net income decreased. Consequently, decreased demand or the need to reduce production can lower our ability to absorb fixed costs and materially impact our financial condition or results of operations.

Our financial results may be adversely affected by our third-party suppliers’ increased costscosts, including due to tariffs, or inability to adjust for our required production levels due to changing demand or global supply chain disruptions.

We rely on a global supply chain of third parties to supply raw materials used in our manufacturing process, including resins, fiberglass, and vinyl, as well as parts and components. The prices for these raw materials, parts, and components fluctuate depending on market conditions and, in some instances, tariffs, commodity prices or trade policies. Substantial increases in the prices of raw materials, parts, and components would increase our operating costs, and could reduce our profitability if we are unable to recoup the increased costs through higher product prices or improved operating efficiencies. For instance, during fiscal years 20242025 and 2025,2026, we experienced rising prices for our suppliers, in part due to inflationary pressures andpressures, heightened interest rates.rates, and tariffs. Our profitability in recent years has been, and in the future may be, affected by significant fluctuations in the prices of the raw materials and commodities that we use in our products and in the cost of freight and shipping of source materials, commodities, and other component parts necessary to assemble our products. The market prices of certain materials and components used in manufacturing our products, especially resins that are made with hydrocarbon, feedstocks, copper, aluminum and stainless steel, can be volatile.

Our ability to maintain production is dependent upon our suppliers delivering sufficient amounts of components, raw materials and parts on time to manufacture our products and meet our production schedules. Supply chain disruptions could occur for any number of factors, including facility closures due to labor disruptions, weather events, natural disasters, cyber intrusions, the occurrence of a contagious disease or illness, contractual or other disputes, unfavorable economic or industry conditions including tariffs, political instability, global conflicts, delivery delays, performance problems, or financial difficulties of suppliers. These events could disrupt our suppliers’ operations and lead to uncertainty in our supply chain or cause supply disruptions for us, which could, in turn, disrupt our operations. For example, we experienced supply chain disruptions from fiscal year 2020 through first half of fiscal 2023 related to numerous factors, including the COVID-19 pandemic, severe weather events, labor shortages, ongoing domestic logistical constraints, and West Coast port challenges. In addition, the current conflict involving Iran and related geopolitical instability are contributing to broader commodity and supply chain disruptions that increase our product costs. Many of the raw materials, components and finished goods used in our manufacturing operations are sensitive to changes in energy and transportation costs, as well as to global shipping capacity and routing. Potential disruptions to global shipping routes and transportation networks may continue to increase shipping transit times, freight rates and insurance costs for us and our suppliers, including on routes that are not directly affected by such disruptions, due to knock-on effects on global logistics networks. These conditions may result in higher input costs, parts shortages, delivery delays and reduced production efficiency. Although we may attempt to mitigate these impacts through pricing actions, alternative sourcing or adjustments to production, there can be no assurance that we will be able to fully offset higher costs or maintain our margins without adversely affecting demand. If such disruptions and related oil price increases persist or worsen, our business, financial condition and results of operations could be materially adversely affected.

In some instances, we purchase components, raw materials and parts that are ultimately derived from a single source or geographic area or a limited number of suppliers and we may therefore be at an increased risk for supply disruptions. It may be difficult to find a replacement supplier for a limited or sole source raw material, part, or component without significant delay or on commercially reasonable terms, and as a result, an exclusive supplier of a key component could potentially exert significant bargaining power over price, quality, warranty claims, or other terms. Some components used in our manufacturing processes, including engines, boat windshields, certain electrical components and gel coats are available from a sole supplier or a limited number of suppliers. We currently purchase engines from General Motors LLC, or General Motors, that we then prepare for marine use for certain Malibu, Axis and Cobalt boats. Our agreement with General Motors will continue through modelcalendar year 2026 and we are currently negotiating an extension on the agreement beyond calendar year 2026. We purchase outboard engines from Yamaha Motor Corporation, U.S.A., or Yamaha, for a significant percentage of our Cobalt, Pursuit and Maverick Boats Group branded boats that are pre-rigged for outboard motors. Our agreement with Yamaha is scheduled to expire on June 30, 2027.2029. WeIn alsoaddition, purchasewe inboardobtain engines and sterndrive assemblies from Volvo. We have agreements with YamahaVolvo for theour supplyCobalt branded boats and from Mercury for certain models of outboardCobalt motorsand thatMaverick expiresbranded on June 30, 2027.boats. If we are required to replace General Motors, YamahaYamaha, Mercury or Volvo as an engine supplier for any reason, it could cause a decrease in boats available for sale or an increase in our cost of sales, either of which could adversely affect our business, financial condition and results of operations. We were advised in fiscal 2025 by one of our suppliers that we would receive fewer engines than originally anticipated in the second half of fiscal 2025. While the reduction in engine supply did not have a material impact on us in fiscal 2025, if in the future, we receive less engines from any of our suppliers than our expectations and are unable to mitigate the reduction in supply, it could impact our production levels and boats available for sale, which could adversely affect our business, financial condition and results of operations.

Climatic events in the areas where we operate have caused, and future climatic events may cause, disruptions and in some cases delays or suspensions in our operations that may adversely impact our business. We rely on the continuous operation of our facilities in Tennessee, Florida, Kansas, California, Poland, Finland, and Australia. Any natural or environmental disaster to our facilities due to fire, flood, hurricanes, earthquake, or other severe climatic events could adversely affect our business, financial condition and results of operations. For example, we have plants located in regions of the United States, such as Florida and Kansas, that have been and may be exposed to extreme weather, such as tropical storms, hurricanes, and tornadoes. An increased frequency and/or severity of storms, hurricanes, or tornadoes could impair our ability to operate by severely damaging our facilities and restricting our ability to deliver products to our customers. The occurrence of any disruption at any of our facilities, even for a short period of time, may have an adverse effect on our productivity and profitability, during and after the period of the disruption, including by causing delays in receiving supplies from our vendors and creating logistical challenges for delivery of our product to our dealers and customers. These disruptions may also cause personal injury and loss of life, severe damage to or destruction of property and equipment and environmental damage. Although we maintain property, casualty and business interruption insurance of the types and in the amounts that we believe are customary for the industry, we are not fully insured against all potential natural disasters or other disruptions to our facilities.

We rely on the existence of a sufficient available hourly workforce to manufacture our boats. We may not be able to attract and retain qualified employees to meet current or future manufacturing needs at a reasonable cost, or at all. For instance, even when there are high unemployment rates in the regions where we have manufacturing facilities, we have had difficulty retaining skilled employees and could experience such difficulties in the future. Although none of our employees are currently covered by collective bargaining agreements, there can be no assurance that our employees will not elect to be represented by labor unions in the future. Additionally, competition for qualified employees could require us to pay higher wages to attract a sufficient number of employees. Significant increases in manufacturing workforce costs could materially adversely affect our business, financial condition or results of operations.

We have grown our business through acquisitionsacquisitions, including our recent acquisition of Saxdor; howeverhowever, we may not be successful in completing future acquisitions or integrating future acquisitions in a way that fully realizes their expected benefits to our business.

A key part of our growth strategy, as shown by our acquisition of Saxdor in 2026, Maverick Boat Group in 2020, Pursuit in 2018, and Cobalt in 2017, has been to acquire other companies that expand our consumer base, enter new product categories or obtain other competitive advantages. We expect to continue to acquire companies as an element of our growth strategy; however, we may not be able to identify future acquisition candidates or strategic partners as part of our growth strategy that are suitable to our business, or we may not be able to obtain financing on satisfactory terms to complete such acquisitions.

Acquisitions include a number of risks, including our ability to project and evaluate market demand, realize potential synergies and cost savings, and make accurate accounting estimates, as well as diversion of management attention.attention and incurrence of significant transaction expenses. Uncertainties exist in assessing the value, risks, profitability, and liabilities associated with certain companies or assets, negotiating acceptable terms, obtaining financing on acceptable terms, and receiving any necessary regulatory approvals. As we continue to grow, in part, through acquisitions, our success depends on our ability to anticipate and effectively manage these risks. Our failure to successfully do so could have a material adverse effect on our financial condition and results of operations. For example, we determined that our estimated fair value for the Maverick Boat Group reporting unit was less than its carrying value as of March 31, 2024 and we recognized an impairment charge of $88.4 million for the three months ended March 31, 2024 related to our Maverick Boat Group reporting unit.

Our growth strategy includes the possible acquisition of other businesses and the potential integration of new product lines or related products to our boats, such as our initiatives to integrate the production of engines and trailers for our Malibu and Axis models, our Monsoon engines into some of our Cobalt models and our new Tooling Design Center. These actions may require us to secure significant additional capital through the borrowing of money or the issuance of equity. Any borrowings made to finance future strategic initiatives could make us more vulnerable to a downturn in our operating results, a downturn in economic conditions, or increases in interest rates on borrowings that are subject to interest rate fluctuations. If our cash flow from operations is insufficient to meet our debt service requirements, we could then be required to sell additional equity securities, refinance our obligations or dispose of assets in order to meet our debt service requirements. Adequate financing may not be available if and when we need it or may not be available on terms acceptable to us. The failure to obtain sufficient financing on favorable terms and conditions could have a material adverse effect on our growth prospects.

Further, we could choose to finance acquisitions or other strategic initiatives, in whole or in part through the issuance of our Class A Common Stock or securities convertible into or exercisable for our Class A Common Stock. Most recently, the acquisition of Saxdor was financed through a mixture of cash and Class A Common Stock. If we do so, existing stockholders will experience dilution in the voting power of their Class A Common Stock and earnings per share could be negatively impacted. The extent to which we will be able and willing to use our Class A Common Stock for acquisitions and other strategic initiatives will depend on the market value of our Class A Common Stock and the willingness of potential third parties to accept our Class A Common Stock as full or partial consideration. Our inability to use our Class A Common Stock as consideration, to generate cash from operations, or to obtain additional funding through debt or equity financings in order to pursue our strategic initiatives could materially limit our growth.

We and the third parties with whom we work are subject to stringent and evolving U.S. and foreign laws, regulations, rules, and rules, contractual obligations, industry standards, policies and other obligations related to data privacy and security. Our (or the third parties with whom we work) actual or perceived failure to comply with such obligations could lead to regulatory investigations or actions; litigation (including class claims) and mass arbitration demands; fines and penalties; disruptions of our business operations; reputational harm; loss of revenue or profits; loss of customers or sales and other adverse business consequences.

In the past few years, numerousNumerous U.S. states have enacted comprehensive privacy laws that impose certain obligations on covered businesses, including providing specific disclosures in privacy notices and affording residents with certain rights concerning their personal data. As applicable, such rights may include the right to access, correct, or delete certain personal data, and to opt-out of certain data processing activities, such as targeted advertising, profiling, and automated decision-making. Certain states also impose stricter requirements for processing certain personal data, including sensitive information, such as conducting data privacy impact assessments. These state laws allow for statutory fines for noncompliance. For example, the California Consumer Privacy Act of 2018, ( “CCPA”) applies to personal data of consumers, business representatives, and employees who are California residents, and requires businesses to provide specific disclosures in privacy notices and honor requests of such individuals to exercise certain privacy rights. The CCPA provides for fines of up to $7,500 per intentional violation and allows private litigants affected by certain data breaches to recover significant statutory damages. Similar laws are being considered in several other states, as well as at the federal and local levels, and we expect more states to pass similar laws in the future.

Outside the United States, an increasing number of laws, regulations, and industry standards govern data privacy and security. For example, the European Union’s General Data Protection Regulation (“EU GDPR”), the United Kingdom’s GDPR (“UK GDPR”) (collectively, “GDPR”), and Australia’s Privacy Act impose strict requirements for processing personal data. For example, under the GDPR, companies may face temporary or definitive bans on data processing and other corrective actions; fines of up to 20 million Euros under the EU GDPR, 17.5 million pounds sterling under the UK GDPR or, in each case, 4% of annual global revenue, whichever is greater.greater; or private litigation related to processing of personal data brought by classes of data subjects or consumer protection organizations authorized at law to represent their interests.

In the ordinary course of business, we may transfer personal data from Europe and other jurisdictions to the United States or other countries. Europe and other jurisdictions have enacted laws requiring data to be localized or limiting the transfer of personal data to other countries. In particular, the European Economic Area (EEA) and the United Kingdom (UK) have significantly restricted the transfer of personal data to the United States and other countries whose privacy laws it generally believes are inadequate. Other jurisdictions may adopt or have already adopted similarly stringent data localization and cross-border data transfer laws. Although there are currently various mechanisms that may be used to transfer personal data from the EEA and UK to the United States in compliance with law, such as the EEA standard contractual clauses, the UK’s International Data Transfer Agreement / Addendum, and the EU-U.S. Data Privacy Framework and the UK extension thereto ("DPF Framework") (which allows for transfers to relevant U.S.-based organizations who self-certify compliance and participate in the DPF Framework), these mechanisms are subject to legal challenges, and there is no assurance that we can satisfy or rely on these measures to lawfully transfer personal data to the United States.

We are also bound by contractual obligations related to data privacy and security, and our efforts to comply with such obligations may not be successful. We publish privacy policies, marketing materials and other statements, regarding data privacyprivacy, artificial intelligence, and data security. Regulators in the United States are increasingly scrutinizing these statements, and if these policies, materials or statements are found to be deficient, lacking in transparency, deceptive, unfair, misleading, or misrepresentative of our practices, we may be subject to investigation, enforcement actions by regulators or other adverse consequences.

While we have implemented security measures designed to protect against security incidents, there can be no assurance that these measures will be effective. We take steps designed to detect, mitigate, and remediate vulnerabilities in our information systems (such as our hardware and/or software, including that of third parties with whom we work). We have not and may not in the future, however, detect and remediate all such vulnerabilities on a timely basis. Despite our efforts, there can be no assurance that these vulnerability mitigation measures will be effective. Further, we have and may in the future experience delays in deploying remedial measures and patches designed to address identified vulnerabilities. Vulnerabilities could be exploited and result in a security incident. Any of the previously identified or similar threats have in the past and may in the future cause a security incident or other interruption that have in the past and may in the future result in unauthorized, unlawful, or accidental acquisition, modification, destruction, loss, alteration, encryption, disclosure of, or access to our sensitive information or our information technology systems, or those of the third parties with whom we work. A security incident or other interruption could disrupt our ability (and that of third parties with whom we work) to provide our products.

AnyFor ofexample, thewe previouslyregularly identifiedexperience orphishing similarattempts, threatsand while most are unsuccessful, some have resulted in thelimited pastunauthorized access that was promptly detected and may in the future cause a security incident or other interruption that have in the past and may in the future result in unauthorized, unlawful, or accidental acquisition, modification, destruction, loss, alteration, encryption, disclosure of, or access to our sensitive information or our information technology systems, or those of the third parties with whom we work. A security incident or other interruption could disrupt our ability (and that of third parties with whom we work) to provide our products.contained. Additionally, if we experience a security incident impacting the electronic components embedded into our products, such as the navigation or operating systems, this could prevent or cause customers to stop using our products, deter new customers from using our products, adversely affect the reputation of our business, or cause us to experience other similar harms.

We expend significant resources or modify our business activities to try to protect against security incidents. Certain data privacy and security obligations have required us to implement and maintain specific security measures or industry-standard or reasonable security measures to protect our information technology systems and sensitive information. Applicable data privacy and security obligations have in the past and may in the future require us, or we may voluntarily choose, to notify relevant stakeholders, including affected individuals, customers, regulators, and investors, of security incidents, or to take other actions, such as providing credit monitoring and identity theft protection services. Such disclosures and related actions can be costly, and the disclosure or the failure to comply with such applicable requirements could lead to adverse consequences.

If we (or a third party with whom we work) were to experience a security incident or are perceived to have experienced a security incident, we may experience adverse consequences, such as government enforcement actions (for example, investigations, fines, penalties, audits, and inspections); additional reporting requirements and/or oversight; litigation (including class claims); indemnification obligations; negative publicity; reputational harm; monetary fund diversions; diversion of management attention; interruptions in our operations (including availability of data); financial loss; and other similar harms. Security incidents and attendant consequences may prevent or cause customers to stop using our products, deter new customers from using our products, and negatively impact our ability to grow and operate our business.

In recent years, we have lost market share in certain of our segments because of increased competition in our industry. The recreational powerboat industry, and in particular the performance sport boat category, is highly competitive for consumers and dealers. Competition affects our ability to succeed in the markets we currently serve, includingand the saltwater outboard fishing boat market that we entered with our acquisitions of Pursuit and Maverick Boat Group, and new markets that we may enter in the future.future, including most recently the emerging premium adventure dayboat category in which we entered into this fiscal year with the acquisition of Saxdor. Competition is based primarily on brand name, price, product selection and product performance. We compete with several large manufacturers that may have greater financial, marketing and other resources than we do and who are represented by dealers in the markets in which we now operate and into which we plan to expand. We also compete with a variety of small, independent manufacturers. We cannot assure you that we will not face greater competition from existing large or small manufacturers or that we will be able to compete successfully with new competitors. Our failure to compete effectively with our current and future competitors would adversely affect our business, financial condition and results of operations.

A portion of our sales are denominated in a currency other than the U.S. dollar. With our recent acquisition of Saxdor, we anticipate a much larger portion of our sales than in the past will be denominated in a currency other than the U.S. dollar, with most of Saxdor’s sales denominated in the Euro. Since our acquisition of Saxdor on March 2, 2026, sales in Europe accounted for approximately 54% of Saxdor’s total revenue. We also continue to sell our other brands worldwide. Consequently, a strong U.S. dollar may adversely affect reported revenues. We also maintain a portion of our manufacturing operations in AustraliaPoland and Australia, which partially mitigates the impact of the volatility of the U.S. dollar in thatthose country.countries. A portion of our selling, general and administrative costs are transacted in the Polish zloty and Australian dollarsdollar as a result. We also sell U.S. manufactured products into certain international markets in U.S. dollars, including the sale of products into Canada, Europe and Latin America. Demand for our products in these markets may also be adversely affected by a volatile U.S. dollar. We do not currently use hedging or other derivative instruments to mitigate our foreign currency risks.

Inflation and risingheightened interest rates could adversely affect our financial results.

The market prices of certain materials and components used in manufacturing our products, especially resins that are made with hydrocarbon, feedstocks, copper, aluminum and stainless steel, can be volatile. Inflation has recently had an adverse impact on our business, particularly related to wages and increases in the cost of raw materials and transportation, and may continue to have, an adverse impact on our business, financial condition, and results of operations. Any continued elevated rates or renewed increases could further adversely affect our results.

Our dealers require adequate liquidity to finance their operations, including purchases of our boats. Dealers are subject to numerous risks and uncertainties that could unfavorably affect their liquidity positions, including, among other things, continued access to adequate financing sources on a timely basis and on reasonable terms. These sources of financing are vital to our ability to sell products to our dealers through our distribution network. Access to floor plan financing generally facilitates our dealers’ ability to purchase boats from us, and their financed purchases reduce our working capital requirements. If floor plan financing were not available to our dealers, our sales and our working capital levels would be adversely affected as dealers may shift the timing of certain purchases and otherwise reduce the total number of boats that they purchase during any given period. In addition, risingheightened interest rates could also incentivize dealers to reduce their inventory levels in order to reduce their interest exposure, which may further adversely impact the sales of our boats and our results of operations. For additional information on our dealer network, see "Business--Our Dealer Network and --Dealer Management" above.

We may be required to repurchase inventory of certain dealers or provide promotional incentives to sell through inventoryinventory.

We are currently defending against a securities class action lawsuit. On April 10, 2024, fifteen dealerships operated under common control of Tommy’s Boats (“Tommy’s Boats”) filed a complaint against MBI and its indirect subsidiary Boats LLC in the United States District Court for the Eastern District of Tennessee (Case 3:24-cv-00166). The complaint alleges that MBI and Boats LLC breached obligations under dealership agreements with Tommy’s Boats, quantum meruit, unjust enrichment, promissory estoppel and intentional and negligent misrepresentations relating to the parties’ commercial relationship. Tommy’s Boats sought monetary damages. Boats LLC has takentook possession of 19 new model year 2024 boats according to a repurchase agreement with M&T Bank, the floor plan financing lender to Tommy’s Boats. These boats were subsequently resold during the three months ended September 30, 2024. On July 3, 2024, Mark E. Andrews, Chapter 11 Trustee (the “Trustee”) for Tommy’s Boats voluntarily dismissed without prejudice the claims filed by Tommy’s Boats. On August 16, 2024, Matthew Borisch, the principal owner of Tommy’s Boats, filed a complaint against Malibu Boats, Inc., Malibu Boats, LLC, and Jack Springer in the United States District Court for the Eastern District of Tennessee (Case 3:24-cv-00339), alleging similar allegations to those of the dismissed complaint against Malibu Boats, Inc. and Malibu Boats, LLC filed by Tommy’s Boats. Mr. Borisch amended his complaint on October 29, 2024.

On July 11, 2025, Mr. Borisch sought leave to amend his complaint and has asserted that the remaining claims he has brought belong to him in his individual capacity. On September 2, 2025, we moved to dismiss Mr. Borisch’s complaint in its entirety. That motion is fully submitted and pending. We intend to vigorously defend ourselves against any claims alleged by Mr. Borisch. We are unable to provide any reasonable evaluation of the likelihood that a loss will be incurred or any reasonable estimate of the range of possible loss.

We are currently defending against a securities class action lawsuit. On April 29, 2024, a stockholder, individually and on behalf of all others similarly situated, filed a complaint against MBI and Jack Springer, Bruce Beckman, David Black, and Wayne Wilson as current and former officers of the Company in the United States District Court for the Southern District of New York (Case 1:24-cv-03254). On August 15, 2024, the Court appointed the Retiree Benefit Trust of the City of Baltimore as the Lead Plaintiff in the action. The amended complaint alleges violations of the Securities Exchange Act of 1934, as amended, in connection with allegedly false and misleading statements made by MBI related to the Company's business, operations, and prospects during the period from November 4, 2022 through May 1, 2024 (“Class Period”). The amended complaint alleges, among other things, that the defendants violated Sections 10(b) and 20(a) of the Exchange Act and SEC Rule 10b-5 by not disclosing alleged material adverse facts related to the Company’s inventory, demand and relationship with one of its former dealers, Tommy’s Boats, and accordingly, that certain statements made during the Class Period about the Company's business, operations, and prospects were materially misleading. On July 29, 2025, MBI and the individual defendants entered into a Stipulation and Agreement of Settlement with the Lead Plaintiff. The settlement iswas subjectapproved toby the Court approvalon February 9, 2026, and, without admitting fault or liability, contemplatesprovided for a settlement payment amount of $7.8 million for the benefit of a settlement class comprised of all purchasers of MBI securities during the Class Period. MBI anticipates that theThe settlement amountpayment will bewas fully paidfunded with proceeds from MBI’s directors and officers insurance carriers.

On November 25, 2024, a stockholder, derivatively on behalf of MBI, filed a complaint against Jack Springer, Ritchie Anderson, Bruce Beckman, David Black, and Wayne Wilson as current and former officers of Malibu Boats, Inc., as well as current and former members of the MBI Board of Directors in the United States District Court for the Southern District of New York (Case 1:24-cv-09018). On December 20, 2024, a second stockholder, derivatively on behalf of MBI, filed a complaint against the same defendants in the United States District Court for the Southern District of New York (Case 1:24-cv-09870). On January 7, 2025, these derivative actions were consolidated and stayed pending certain developments in the securities class action. On April 8, 2025, a third stockholder, derivatively on behalf of MBI, filed a complaint against the same defendants in the United States District Court for the Eastern District of Tennessee (Case 3:25-cv-00142). On May 16, 2025, a fourth stockholder, derivatively on behalf of MBI, filed a complaint against the same defendants, except for Ritchie Anderson, in the United States District Court for the Eastern District of Tennessee (Case 3:25-cv-00223). On November 17, 2025, the third and fourth derivative actions were consolidated, and on November 20, 2025, the consolidated case was stayed pending certain developments in the securities class action. The derivative actions allege violations of the Securities Exchange Act of 1934, as amended, as well as breach of fiduciary duties and unjust enrichment against the individual defendants in connection with the issues raised in the securities class action. WeOn intendApril 1, 2026, MBI and the stockholders reached an agreement in principle to vigorouslysettle defend ourselves against claims alleged in theseall derivative actions. WeOn areJuly unable15, 2026, plaintiffs filed a motion for preliminary settlement approval in the consolidated action pending before the United States District Court for the Eastern District of Tennessee (Case 3:25-cv-00142). The settlement contemplates certain corporate governance reforms by MBI and a payment of $850,000 in attorneys’ fees from MBI to providethe anystockholders’ reasonablecounsel, evaluationand ofis subject to Court approval. MBI anticipates that the likelihoodsettlement that a lossamount will be incurredfully orpaid anywith reasonableproceeds estimatefrom ofMBI's thedirectors rangeand ofofficers possibleinsurance loss.carriers.

The manufacture and sale of boats also exposes us to significant risks associated with product liability, economic loss, personal injury and other claims. If our products are found to be defective or used incorrectly by our customers, bodily injury, property damage or other injury, including death, may result and this could give rise to additional product liability or economic loss claims against us and adversely affect our brand image or reputation. During fiscal year 2023, we settled certain product liability matters for $100.0$100 million after a jury found that our subsidiary, Malibu Boats, LLC, and another entity that was the manufacturer of the boat at issue, Malibu Boats West, Inc., negligently failed to warn of a hazard posed by the boat and that such failure was a proximate cause of the death of a passenger in the boat. Malibu Boats West, Inc. is not, and has never been, a subsidiary of ours but was a separate legal entity whose assets were purchased by Malibu Boats, LLC in 2006. See Note 17 of our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K for additional information. We are also currently defending a customer class action lawsuit. On May 31, 2024, a customer filed a class action complaint against MBI and Boats LLC in the United States District Court for the District of Delaware. (Case 1:24-cv-00648). The complaint, which purports to be filed on behalf of a nationwide class of customers, alleges violation of common law, the Magnuson-Moss Warranty Act, breach of express warranty, breach of implied warranty, and violation of California’s Consumer Legal Remedies Act based on guidance issued to customers of certain older model boats related to riding in the bow area of those boats. We continue to defend against the class action claims. We are unable to provide any reasonable evaluation of the likelihood that a loss will be incurred or any reasonable estimate of the range of possible loss.

We continually evaluate whether events or circumstances have occurred that indicate the remaining estimated useful lives of our definite-lived intangible assets and other long-lived assets may warrant revision or whether the remaining balance of such assets may not be recoverable. We use an estimate of the related undiscounted cash flow over the remaining life of the asset in measuring whether the asset is recoverable. As of June 30, 2025,2026, the balance of total goodwill and indefinite-lived intangible assets was $130.3$241.5 million, which represents approximately 17.7%24.2% of total assets. That amount includes $27.1 million of goodwill arising from our acquisition of Saxdor in March 2026. If the future operating performance of either the Company or individual operating segments is not sufficient, we could be required to record non-cash impairment charges. Impairment charges could substantially affect our reported earnings in the periods such charges are recorded. In addition, impairment charges could indicate a reduction in business value which could limit our ability to obtain adequate financing in the future.

Changes in laws and policies governing foreign trade could adversely affect our business and trigger retaliatory actions by affected countries. There is significant uncertainty with respect to future trade regulations, including the potential U.S. tariffs and penalties on products manufactured outside the U.S., and with respect to existing international trade agreements. ForThe example,U.S. inpresidential Apriladministration 2025,has theimposed Unitedsubstantial Statestariffs announcedaffecting thea impositionwide range of worldwideproducts reciprocaland jurisdictions. In response, some countries have implemented, and other tariffscountries onmay itsimplement, trading partners, andcountermeasures in response to the United States' actions, many of the United States' trading partners announced retaliatory tariffs. The United States is currently in ongoing negotiations with many countries and there remains uncertainty aroundU.S. tariffs. The institution of global trade tariffs, trade sanctions, new or onerous trade restrictions, embargoes and other stringent government controls have the potential to adversely impact the U.S. economy, our industry, our suppliers, and global demand for our products and, as a result, could have a material adverse effect on our business, financial condition, and results of operations. For example, the U.S. presidential administration has announced substantial new tariffs affecting a wide range of products and jurisdictions and has indicated an intention to continue negotiating trade policies. In response, some countries have implemented, and other countries may implement, countermeasures in response to U.S. tariffs. We estimate that 18-20% of our cost of sales for our brands located in the U.S. are sourced from outside the United States and thus we have the potential to be materially impacted by tariffs in future periods. In addition, following our acquisition of Saxdor, we manufacture boats in Finland and Poland, a portion of which are imported into the United States and are subject to applicable U.S. tariffs on European-origin goods.

Further, in October 2023, California passed climate disclosure laws that, among other requirements, will require public and private companies that do business in California with total annual revenues exceeding certain thresholds to make disclosures including GHG emission data and climate-related financial risks. The implementing regulations for the law have not yet been drafted and the requirements are currently set to begin taking effect in 2026, with additional requirements phasing in through 2030. While we are still assessing the impact of these requirements, additional reporting obligations could cause us to incur increased costs.

Malibu Boats, Inc. is a holding company and has no material assets other than its ownership of LLC Units in the LLC. Malibu Boats, Inc. has no independent means of generating revenue. We intend to cause the LLC to make distributions to its unit holders in an amount sufficient to cover all applicable taxes at assumed tax rates and payments under the tax receivable agreement. To the extent that Malibu Boats, Inc. needs funds, and the LLC is restricted from making such distributions under applicable law or regulation or under the terms of its financing arrangements, or is otherwise unable to provide such funds, it could materially adversely affect our liquidity and financial condition. For example, our credit agreement generally prohibits the LLC,LLC and our other subsidiaries who are parties to the credit agreement from paying dividends or making distributions to Malibu Boats, Inc., without compliance with certain financial covenants. However, our credit agreement permits (i) distributions to members of the LLC, including Malibu AustralianBoats, AcquisitionInc., Corp.,based Cobalton the member’s allocated taxable income, (ii) distributions to fund payments that are required under our tax receivable agreement, (iii) purchases of stock or stock options of the LLC from former officers, directors or employees of loan parties under the credit agreement or payments pursuant to stock option and other benefit plans up to $5.0 million in any fiscal year, and (iv) repurchases of the outstanding stock and LLC units of Malibu Boats, LLC,Inc. PBand Holdco, LLC, MBG Holdco, Inc.LLC.

We are a leading designer, manufacturer and marketer of a diverse range of recreational powerboats, including performance sport boats, sterndrivesterndrive, outboard boats, and outboardpremium boats.adventure dayboats. Our product portfolio of premium brands is used for a broad range of recreational boating activities including, among others, water sports, such as water skiing, wakeboarding and wake surfing, as well as general recreational boating and fishing. Our passion for consistent innovation, which has led to proprietary technology such as Surf Gate, has allowed us to expand the market for our products by introducing consumers to new and exciting recreational activities. We design products that appeal to an expanding range of recreational boaters and water sports enthusiasts whose passion for boating and water sports is a key aspect of their lifestyle and provide consumers with a better customer-inspired experience. With performance, quality, value and multi-purpose features, our product portfolio has us well positioned to broaden our addressable market and achieve our goal of increasing our market share in the recreational boating industry.

We currently sell our boats under eightnine brands as shown in the table below, and we report our results of operations under threefour reportable segments, Malibu, Saltwater FishingFishing, Cobalt, and Cobalt.Saxdor. In connection with our acquisition of Saxdor we revised our segment reporting during the quarter ended March 31, 2026 to report our results of operations under the following four reportable segments.

Our Cobalt segment participates in the manufacturing, distribution, marketing and sale throughout the world of Cobalt boats. Our Cobalt boats consist of mid to large-sized luxury cruisers and bowriders that we believe offer the ultimate experience in comfort, performance and quality. As of June 30, 2025,2026, we are among the market leaderleaders in the United States in the 20’ - 40’ segment of the sterndrive boat category through our Cobalt brand. Retail prices for our Cobalt boats typically range from $75,000 to $625,000.

We sell our boats through a dealer network that we believe is among the strongest in the recreational powerboat industry. As of June 30, 2025,2026, our distribution channel consisted of over 325345 dealer locations globally. Our dealer base is an important part of our consumers’ experience, our marketing efforts and our brands. We devote significant time and resources to find, develop and improve the performance of our dealers and believe our dealer network gives us a distinct competitive advantage. We had one dealer that represented more than 10% of our consolidated net sales in fiscal years 20252026 and 2024, OneWater Marine, Inc.2025.

We achieved fiscal year 20252026 net sales, net income (loss) and adjusted EBITDA of $914.6 million, $1.7 million and $73.9 million, respectively, compared to $807.6 million, $15.2 million and $74.8 million, respectively, compared to $829.0 million, $(56.4) million and $82.2 million, respectively, for fiscal year 2024.2025. For the definition of adjusted EBITDA and a reconciliation to net income (loss), see “GAAP Reconciliation of Non-GAAP Financial Measures.”

The recreational power boat industry continues to be challenged by macro-economic factors, including inflation and highelevated interest rates, that have increased the cost of production and taken many interest rate sensitive buyers out of the market. In recentthe months,past year, additional tariffs have also been introduced or proposed, as discussed below, and we are monitoring the impact they may have on cost of production, pricing and demand. Simultaneously, less price sensitive buyers have been purchasing larger, more feature-rich boats with higher average selling prices.

We aim to increase our market share across the boating categories in which we compete through new product development, improved distribution, new models, and innovative features. We believe our strong brands, new product pipeline, strong dealer network and ability to increase production will allow us to maintain, and potentially expand, our leading market positions. Our newest acquisition, Saxdor, is in the early stages of integration into the business and expected synergies have the potential to be realized over the coming years. We believe enhancing manufacturing capabilities combined with diligent management of dealer networks will position Saxdor for continued growth.

Our financial results and operations have been, and will continue to be, impacted by events outside of our control, including trade policies and tariffs, inflationary pressures, interest rates, material shortages, weather eventsevents, foreign currency fluctuations and global economic uncertainty. The current international trade and regulatory environment is subject to significant ongoing uncertainty. TheBeginning in calendar year 2025, the U.S. presidential administration has recently announcedimposed substantial new tariffs affecting a wide range of products and jurisdictions and has indicated an intention to continue negotiating trade policies.jurisdictions. In response, some countries have implemented, and other countries may implement, countermeasures in response to U.S. tariffs. We estimate that 18-20% of our cost of sales for our brands located in the U.S. are sourced from outside the United States. In addition, following our acquisition of Saxdor, we manufacture boats in Finland and Poland, a portion of which are imported into the United States and thusare subject to applicable U.S. tariffs on European-origin goods. As a result we have the potential to be materially impacted by tariffs in future periods. We are continuing to monitor the potential long-term impact of tariffs and are taking a proactive approach to mitigating material supply chain risks. We expect additionalto incur material costs to be incurred in fiscal year 20262027 due to new tariff exposure of approximately 1.5% to 3% of Costcost of Sales,sales, which includes Saxdor boats shipped to the U.S. and is assuming current tariff rates. We expect to largely offset these added costs viaby recent price increases.

In the near term, we expect to continue to experience reduced retail consumer demand for our productproducts and on-goinga pressurecompetitive frompromotional dealers to reduce dealer inventories.environment. However, we will maintain our disciplined approach to dealer health and leverage our strong balance sheet, and cash generation to continue investing in the business.

Inflation has impacted the prices of our materials and our labor costs, which has had a negative impact on our gross margin and our operations. For example, in recent years the market prices of certain materials and components used in manufacturing our products, especially resins that are made with hydrocarbon, feedstocks, copper, aluminum and stainless steel, have increased. Further, new boat buyers often finance their purchases. Efforts to stop or limit inflation arehave resultingresulted in higher interest rates that translate into an increased cost of boat ownership. We have seen increased interest rates for our customers throughout calendar years 20232024 and 2024.2025. In 2026, interest rates improved slightly, but were still considered elevated. Should inflation and interest rates continue at elevated rates, we may experience less retail demand because prospective consumers may choose to forgo or delay their purchases or buy a less expensive or used boat. We intend to minimize the effect of inflation through selective price increases, cost reductions and improved productivity.

LeveragingWe leverage our robust product offering and additional features to enhance our sales growth and gross margins. Our product mix, as it relates to our brands, types of boats and features, not only makes our offerings attractive to consumers but also helps drive higher sales and margins. Historically, we have been able to realize higher sales and margins when we sell larger boats compared to our smaller boats, our premium brands compared to our entry-level brands and our boats that are fully-equipped with optional features. We intend to continue to develop new features and models and maintain an attractive product mix that optimizes sales growth and margins.

We completed the build-out of our Tooling Design Center at our Pursuit facility in Florida in March 2023. The Tooling Design Center is a vertical integration initiative focusing on the tooling needs for our Malibu, Cobalt, Maverick and Pursuit boats. This vertical integration initiativeinitiative, discussed further below, is part of a multi-year plan to bring our product tooling in-house, which has the potential to help us better control capital expenditures, improve tooling quality, and improve innovation.

We rely on our dealer network to distribute and sell our products. We believe we have developed one of the strongest distribution networknetworks across the recreational boating markets in thewhich performancewe sport boat category.compete. To improve and expand our network and compete effectively for dealers, we regularly monitor and assess the performance of our dealers and evaluate dealer locations and geographic coverage in order to identify potential market opportunities. In March 2026, we expanded our dealer footprint to 68 countries with the acquisition of Saxdor. We intend to continue to add dealers in new territories in the United States as well as internationally, which we believe will result in increased unit sales.

We have vertically integrated a number of key components of our manufacturing process, including the manufacturing of our Monsoon engines, boat trailers, towers and tower accessories, machined and billet parts, soft gripEVA flooring, custom metal fabricated parts, wiring harnesses and most recently, certain tooling for our various brands. We began producing our own engines, branded as Malibu Monsoon engines, in our Malibu and Axis boats for model year 2019. Starting in fiscal year 2024, we began offering Monsoon sterndrive engines to our Cobalt dealers and customers. In the second half of fiscal year 2024, we rolled out our Monsoon engines into Cobalt’s surf boats. We believe our vertical integration initiatives will reduce our reliance on third-party suppliers while reducing the risk that a change in cost or production from any third-party supplier could adversely affect our business. In fiscal year 2022, we began manufacturing our own wiring harnesses in order to reduce the risk of production delays due to delays in receipt of wiring harnesses from third-party suppliers. In March 2023, we launched our new Tooling Design Center located on our Pursuit campus. The Tooling Design Center has potential to help us better control capital expenditures, improve tooling quality, and increase volumes.

•Discounts, rebates and free flooring —consists of discounts, rebates and free flooring, we provide to our dealers based on sales of eligible products. For our Malibu, Cobalt and Saltwater Fishing segments, if a domestic dealer meets its quarterly commitment volume, as well as other terms of the dealer performance program, the dealer is entitled to a specified discount off invoice for eligible wholesale volume purchased during the period. For our Saxdor segment, discounts are provided to all dealers under a profitability-based model. If a dealerdealer, for any of our brands, meets its semi-annualquarterly, semi-annual, or annual retail volume goals, the dealer is entitled to a specific rebate applied to their wholesale volume purchased. For Malibu, Cobalt and select Saltwater Fishing models, our dealers that take delivery of current model year boats may also be entitled to have us pay the interest to floor the boat for a period of time, which incentive we refer to as "free flooring". From time to time, we may extend the flooring program to eligible models beyond the off season period. For more information, see "Item 1. Business - Dealer Management."

Other Expense (Income),expense, Net

Other expense (income),expense, net, consists of interest expense and other income or expense, net. Interest expense consists of interest charged under our outstanding debt and amortization of deferred financing costs on our credit facilities. Other income or expense can include adjustments to our tax receivable agreement liability and subleasechanges income.to the fair value of the contingent earnout liability as well as foreign currency translation gain/loss on the contingent earnout liability.

Malibu Boats, Inc. is subject to U.S. federal and state income tax in multiple jurisdictions with respect to our allocable share of any net taxable income of the LLC. The LLC is a pass-through entity for federal purposes but incurs income tax in certain state jurisdictions. Maverick Boat Group is separately subject to U.S. federal and state income tax with respect to its net taxable income. Saxdor files income tax returns in Finland and Poland.

As of June 30, 20252026 and 2024,2025, we had a 98.6% and 98.4%, respectively, controlling economic interest and 100% voting interest in the LLC and, therefore, we consolidate the LLC's operating results for financial statement purposes. Net income (loss) attributable to non-controlling interest represents the portion of net income (loss) attributable to the non-controlling LLC members.

Non-controlling interest represents the ownership interests of the members of the LLC other than us and the amount recorded as non-controlling interest in our consolidated statements of operations and comprehensive income (loss) income is computed by multiplying pre-tax income (loss) for the applicable fiscal year by the percentage ownership in the LLC not directly attributable to us. For fiscal years 2025 and 2024, the weighted average non-controlling interest attributable to ownership interests in the LLC not directly attributable to us was 1.6% and 1.9%, respectively.

We define adjusted EBITDA as net income (loss) before interest expense, income taxes, depreciation, amortization, goodwill and other intangible asset impairment expense and non-cash, non-operating expenses or other expenses that we do not believe are indicative of our ongoing expenses, including abandonment of construction in process, litigation settlements, acquisition and integration related expenses, adjustment to earnout liability, certain professional fees, non-cash compensation expense and adjustments to our tax receivable agreement liability. We define adjusted EBITDA margin as adjusted EBITDA divided by net sales. Adjusted EBITDA and adjusted EBITDA margin are not measures of net income (loss) as determined by GAAP. Management believes adjusted EBITDA and adjusted EBITDA margin allow investors to evaluate the Company’s operating performance and compare our results of operations from period to period on a consistent basis by excluding items that management does not believe are indicative of our core operating performance. Management uses adjusted EBITDA to assist in highlighting trends in our operating results without regard to our financing methods, capital structure and non-recurring or non-operating expenses.

We define adjusted net income per share as net income (loss) attributable to Malibu Boats, Inc. per share, excluding income tax expense (benefit), before goodwill and other intangible asset impairment expense and non-cash, non-operating expenses, or other expenses that we do not believe are indicative of our ongoing expenses, including abandonment of construction in process, litigation settlements, acquisition related amortization, acquisition and integration related expenses, adjustment to earnout liability, certain professional fees and non-cash compensation expense, and reflecting an adjustment for income tax expense on adjusted income before income taxes at our estimated effective income tax rate.

DuringOther than the risk factors below related to our acquisition of Saxdor, during the quarter ended DecemberMarch 31, 2025,2026, there were no material changes to the risk factors discussed in Part I, Item 1A. "Risk Factors”" of our Annual Report on Form 10-K for the year ended June 30, 2025.

Malibu Boats, Inc. is a Delaware corporation with its principal offices in Loudon, Tennessee. We use the terms “"Malibu,”" the “"Company,”" “"we,”" “"us,”" “"our”" or similar references to refer to Malibu Boats, Inc., its subsidiary, Malibu Boats Holdings, LLC, or the LLC, and its subsidiary Malibu Boats, LLC, or Boats,Boats LLC and its consolidated subsidiaries, including Cobalt Boats, LLC, PB Holdco, LLC, through which we acquired the assets of Pursuit, and MBG Holdco, Inc., through which we acquired all of the outstanding stock of Maverick Boat Group, Inc.subsidiaries.

We are a leading designer, manufacturer and marketer of a diverse range of recreational powerboats, including performance sport boats, sterndrivesterndrive, outboard boats, and outboardpremium boats.adventure dayboats. Our product portfolio of premium brands is used for a broad range of recreational boating activities including, among others, water sports, such as water skiing, wakeboarding and wake surfing, as well as general recreational boating and fishing. Our passion for consistent innovation, which has led to proprietary technology such as Surf Gate, has allowed us to expand the market for our products by introducing consumers to new and exciting recreational activities. We design products that appeal to an expanding range of recreational boaters and water sports enthusiasts whose passion for boating and water sports is a key aspect of their lifestyle and provide consumers with a better customer-inspired experience. With performance, quality, value and multi-purpose features, our product portfolio has us well positioned to broaden our addressable market and achieve our goal of increasing our market share in the recreational boating industry.

We currently sell our boats under eightnine brands as shown in the table below, and we report our results of operations under threefour reportable segments, Malibu, Saltwater FishingFishing, Cobalt, and Cobalt.Saxdor. In connection with our acquisition of Saxdor we revised our segment reporting during the three months ended March 31, 2026 to report our results of operations under the following four reportable segments.

Our Malibu segment participates in the manufacturing, distribution, marketing and sale throughout the world of Malibu and Axis performance sports boats. Our flagship Malibu boats offer our latest innovations in performance, comfort and convenience, and are designed for consumers seeking a premium performance sport boat experience. As of DecemberMarch 31, 2025,2026, we are among the market leaders in the United States in the performance sport boat category through our Malibu and Axis brands. Our Axis boats appeal to consumers who desire a more affordable performance sport boat product but still demand high performance, functional simplicity and the option to upgrade key features. Retail prices of our Malibu and Axis boats typically range from $80,000 to $300,000.

Our Saltwater Fishing segment participates in the manufacturing, distribution, marketing and sale throughout the world of Pursuit boats and the Maverick Boat Group family of boats (Maverick, Cobia, Pathfinder and Hewes). Our Pursuit boats expand our product offerings into the saltwater outboard fishing market and include center console, dual console and offshore models. Our Maverick Boat Group family of boats are highly complementary to Pursuit, expanding our saltwater outboard offerings with a strong focus in length segments under 30 feet. As of DecemberMarch 31, 2025,2026, we are among the market leaders in the fiberglass outboard fishing boat category with the brands in our Saltwater Fishing segment. Retail prices for our Saltwater Fishing boats typically range from $45,000 to $1,400,000.$1,600,000.

Our Cobalt segment participates in the manufacturing, distribution, marketing and sale throughout the world of Cobalt boats. Our Cobalt boats consist of mid to large-sized luxury cruisers and bowriders that we believe offer the ultimate experience in comfort, performance and quality. As of DecemberMarch 31, 2025,2026, we are among the market leaders in the United States in the 20’ - 40’ segment of the sterndrive boat category through our Cobalt brand. Retail prices for our Cobalt boats typically range from $75,000 to $625,000.

We sell our boats through a dealer network that we believe is among the strongest in the recreational powerboat industry. As of June 30, 2025, our worldwide distribution channel consisted of over 325 dealer locations globally. With our recent acquisition of Saxdor, we continue to expand our global dealer footprint. Saxdor distributes through a dedicated network of over 100 dealer locations in more than 50 countries across 5 continents. Our dealer base is an important part of our consumers’ experience, our marketing efforts and our brands. We devote significant time and resources to find, develop and improve the performance of our dealers and believe our dealer network gives us a distinct competitive advantage. We had one dealer that represented more than 10% of our consolidated net sales in fiscal year 2025 and the first halfnine months of fiscal year 2026, OneWater Marine, Inc.

SecondThird Quarter Fiscal 2026 Results (Unaudited)

Due to high dealer flooring costs and a continued soft retail environment, we expect our dealers to reduce their inventories furtherfor inthe remainder of fiscal 2026. Additionally, we expect the retail market to continue to decline infor the remainder of fiscal 2026 due to continued macroeconomic uncertainty.

We aim to increase our market share across the boating categories in which we compete through new product development, improved distribution, new models, and innovative features. We believe our strong brands, new product pipeline, strong dealer network and ability to increase production will allow us to maintain, and potentially expand, our leading market positions. Our newest acquisition, Saxdor, is in the early stages of integration into the business and expected synergies will be realized over the coming years. We believe enhancing manufacturing capabilities combined with diligent management of dealer networks will position Saxdor for continued growth.

Our financial results and operations have been, and will continue to be, impacted by events outside of our control, including trade policies and tariffs, inflationary pressures, interest rates, material shortages, weather events and global economic uncertainty. The current international trade and regulatory environment is subject to significant ongoing uncertainty. Last year, the U.S. presidential administration announced substantial new tariffs affecting a wide range of products and jurisdictions and has indicated an intention to continue negotiating trade policies.jurisdictions. In response, some countries have implemented, and other countries may implement, countermeasures in response to U.S. tariffs. We estimate that 18-20%18 to 20% of our cost of sales for our brands located in the U.S. are sourced from outside the United States and thus we have the potential to be materially impacted by tariffs in future periods. We are continuing to monitor the potential long-term impact of tariffs and are taking a proactive approach to mitigating material supply chain risks. We expect additional material costs to be incurred infor the remainder of fiscal year2026 2026and into fiscal 2027 due to new tariff exposure of approximately 1.5% to 3% of cost of sales, assuming current tariff rates. We expect to largely offset these added costs viaby recent price increases.

We believe that our results of operations and our growth prospects are affected by a number of factors, such as the economic environment and consumer demand for our products, our ability to successfully integrate acquisitions, our ability to develop new products and innovate, our product mix, our ability to manage manufacturing costs, sales cycles and inventory levels, the strength of our dealer network, our ability to offer dealer financing and incentives and our vertical integration efforts. We discuss each of these factors in more detail under the heading “"Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations--Factors Affecting Our Results of Operations”" in our Form 10-K for the year ended June 30, 2025. While we do not have control of all factors affecting our results from operations, we work diligently to influence and manage those factors which we can impact to enhance our results of operations.

•Discounts, rebates and free flooring—consists of discounts, rebates and free flooring, we provide to our dealers based on sales of eligible products. For our Malibu, Cobalt and Saltwater Fishing segments, if a domestic dealer meets its quarterly commitment volume, as well as other terms of the dealer performance program, the dealer is entitled to a specified discount off invoice for eligible wholesale volume purchased during the period. For our Saxdor segment, discounts are provided to all dealers based off a profitability-based model. If a dealerdealer, for any of our brands, meets its quarter, semi-annual or annual retail volume goals, the dealer is entitled to a specific rebate applied to their wholesale volume purchased. For Malibu, Cobalt and select Saltwater Fishing models, our dealers that take delivery of current model year boats may also be entitled to have us pay the interest to floor the boat for a period of time, which incentive we refer to as "free flooring". From time to time, we may extend the flooring program to eligible models beyond the offseason period.

Other Expense Income,Expense, Net

Other expense (income),expense, net consists of interest expense and other income or expense, net. Interest expense consists of interest charged under our outstanding debt and amortization of deferred financing costs on our credit facilities. Other income or expense includes adjustments to our tax receivable agreement liability and sublease income.

MBI is subject to U.S. federal and state income tax in multiple jurisdictions with respect to our allocable share of any net taxable income of the LLC. The LLC is a pass-through entity for federal purposes but incurs income tax in certain state jurisdictions. Maverick Boat Group is separately subject to U.S. federal and state income tax with respect to its net taxable income. Saxdor files income tax returns in Finland and Poland.

As of each of DecemberMarch 31, 20252026 and 2024,2025, we had a 98.6% and a 98.4%, respectively, controlling economic interest and 100% voting interest in the LLC and, therefore, we consolidate the LLC's operating results for financial statement purposes. Net (loss) income attributable to non-controlling interest represents the portion of net (loss) income attributable to the non-controlling LLC members.

Comparison of the Three Months Ended DecemberMarch 31, 20252026 to the Three Months Ended DecemberMarch 31, 20242025

Net sales for the three months ended DecemberMarch 31, 20252026 decreasedincreased $11.7$7.0 million, or 5.8%,3.1%, to $188.6$235.7 million as compared to the three months ended DecemberMarch 31, 2024.2025. The decreaseincrease in net sales was driven primarily by $23.1 million of revenue from the new Saxdor segment due to the recent acquisition, a favorable model mix across all three existing segments, a favorable segment mix and year-over-year price increases, partially offset by decreased unit volumes across all three existing segments resulting primarily from lower wholesale shipments, and driven by an unfavorable model mix in our Malibu segment and an unfavorable segment mix overall, partially offset by a favorable model mix in our Cobalt and Saltwater Fishing segments and inflation-driven year-over-year price increases.shipments. Unit volume for the three months ended DecemberMarch 31, 2025,2026, decreased 116178 units, or 9.5%,12.4%, to 1,1061,253 units as compared to the three months ended DecemberMarch 31, 2024.2025. Our unit volume decreased primarily due to lower wholesale shipments across all three existing segments driven by lower retail activity.activity, partially offset by an additional 66 units contributed by Saxdor.

Net sales attributable to our Malibu segment decreased $3.5$21.5 million, or 4.7%,21.0%, to $70.6$80.7 million for the three months ended DecemberMarch 31, 2025,2026, compared to the three months ended DecemberMarch 31, 2024.2025. Unit volumes attributable to our Malibu segment decreased 12201 units for the three months ended DecemberMarch 31, 2025,2026, compared to the three months ended DecemberMarch 31, 2024,2025, primarily due to lower wholesale shipments driven by lower retail activity during the period. The decrease in net sales was driven by a decrease in units and an unfavorable model mix, partially offset by inflation-drivena favorable model mix and year-over-year price increases.

Net sales attributable to our Saltwater Fishing segment decreasedincreased $4.8$1.5 million, or 6.8%,2.1%, to $65.3$73.4 million, for the three months ended DecemberMarch 31, 2025,2026, compared to the three months ended DecemberMarch 31, 2024.2025. Unit volumes attributable to our Saltwater Fishing segment decreased 3513 units for the three months ended DecemberMarch 31, 20252026 compared to the three months ended DecemberMarch 31, 2024,2025, primarily due to lower wholesale shipments driven by lower retail activity during the period. The decreaseincrease in net sales was driven by a decreasefavorable inmodel units,mix and year-over-year price increases partially offset by a favorabledecrease modelin mix and inflation-driven year-over-year price increases.units.

Net sales attributable to our Cobalt segment decreasedincreased $3.4$3.9 million, or 6.0%,7.1%, to $52.6$58.4 million for the three months ended DecemberMarch 31, 2025,2026, compared to the three months ended DecemberMarch 31, 2024.2025. Unit volumes attributable to Cobalt decreased 6930 units for the three months ended DecemberMarch 31, 20252026 compared to the three months ended DecemberMarch 31, 2024,2025, primarily due to lower wholesale shipments driven by lower retail activity during the period and our dealers' desire to hold less inventory. The decreaseincrease in net sales was driven primarily by a decreasefavorable inmodel units,mix and year-over-year price increases, partially offset by a favorabledecrease modelin mix and inflation-driven year-over-year price increases.units.

Overall consolidated net sales per unit increased 4.1%17.7% to $170,544$188,107 per unit for the three months ended DecemberMarch 31, 2025,2026, compared to the three months ended DecemberMarch 31, 2024.2025. The increase in overall consolidated net sales per unit was driven primarily by a favorable model mix inacross all segments, a favorable segment mix including an incremental increase related to our Cobaltnew Saxdor segment, and Saltwater Fishing segments and inflation-driven year-over-year price increases, partially offset by an unfavorable model mix in our Malibu segment and an unfavorable segment mix overall.increases. Net sales per unit for our Malibu segment decreasedincreased 2.4%8.2% to $137,686$148,661 per unit for the three months ended DecemberMarch 31, 2025,2026, compared to the three months ended DecemberMarch 31, 2024,2025, driven by ana unfavorablefavorable model mix,mix partially offset by inflation-drivenand year-over-year price increases. Net sales per unit for our Saltwater Fishing segment increased 4.7%6.4% to $231,730$234,511 per unit for the three months ended DecemberMarch 31, 20252026 driven by a favorable model mix and inflation-driven year-over-year price increases.increases, partially offset by increased dealer incentive costs per unit. Net sales per unit for our Cobalt segment increased 14.8%16.8% to $169,264$176,544 per unit for the three months ended DecemberMarch 31, 2025,2026, compared to the three months ended DecemberMarch 31, 2024,2025, driven by a favorable model mix and inflation-driven year-over-year price increases. Since our acquisition on March 2, 2026, net sales per unit for our Saxdor segment was $350,561.

Cost of sales for the three months ended DecemberMarch 31, 20252026 increased $0.6$11.5 million, or 0.4%,6.3%, to $163.5$194.4 million as compared to the three months ended DecemberMarch 31, 2024.2025. The increase in cost of sales was primarily driven by an increase in the cost of sales from the new Saxdor segment due to the recent acquisition and higher per unit material and labor costs of $2.4$4.6 million, $3.0$5.4 million and $7.0$4.2 million for the Malibu, Saltwater Fishing, and Cobalt segments, respectively, partially offset by a 5.8% decrease in net sales due to lower unit volumes.volumes across the Malibu, Saltwater Fishing, and Cobalt segments. The increase in per unit material and labor costs was primarily driven by increased prices due to fixed cost deleveragedeleveraging due to lower unit volumes across all segments, a model mix that corresponds to higher costs per unit foracross theall Saltwaterthree Fishing and Cobaltexisting segments and inflationary pressures.

Gross profit for the three months ended DecemberMarch 31, 20252026 decreased $12.3$4.4 million, or 32.9%,9.7%, to $25.1$41.3 million compared to the three months ended DecemberMarch 31, 2024.2025. The decrease in gross profit was driven by lower net sales combined withthe increased cost of sales for the reasons noted above. Gross margin for the three months ended DecemberMarch 31, 20252026 decreased 540250 basis points from 18.7%20.0% to 13.3%17.5% driven primarily by fixed cost deleverage across all segmentsdeleveraging due to lower salesunit volumes across all three existing segments and higher per unit labor and material costs.

Selling and marketing expenses for the three months ended DecemberMarch 31, 20252026 increased $0.1$1.5 million, or 1.4%22.1% to $6.1$8.3 million compared to the three months ended DecemberMarch 31, 2024.2025. The increase was driven primarily by higher personnel-related expenses.expenses, marketing events and an incremental increase in selling and marketing expenses due to the new Saxdor segment. As a percentage of sales, selling and marketing expenses increased 2050 basis points to 3.2%3.5% for the three months ended DecemberMarch 31, 20252026 compared to 3.0% for the three months ended DecemberMarch 31, 2024.2025. General and administrative expenses for the three months ended DecemberMarch 31, 20252026 decreasedincreased $5.7$11.9 million, or 21.5%,60.0%, to $20.8$31.8 million as compared to the three months ended DecemberMarch 31, 20242025 driven primarily by aacquisition decreaserelated expenses related to the Saxdor acquisition, an incremental increase due to the new Saxdor segment and an increase in legal fees, incentive pay and stock-based compensation expense. As a percentage of sales, general and administrative expenses decreasedincreased 230480 basis points to 11.0%13.5% for the three months ended DecemberMarch 31, 20252026 compared to 13.3%8.7% for the three months ended DecemberMarch 31, 2024.2025. Amortization expense remainedincreased flat$1.4 atmillion $1.7to $3.1 million for the three months ended DecemberMarch 31, 2025.2026 due to the additional intangibles acquired from the Saxdor acquisition.

Other Expense (Income),Expense, Net

Other expense (income),expense, net for the three months ended DecemberMarch 31, 20252026 decreasedincreased by $0.3$0.6 million, or 45.3%124.5% to $0.3$1.2 million, compared to the three months ended DecemberMarch 31, 2024.2025. The decreaseincrease in other expense resulted primarily from decreasedincreased interest expense during the three months ended DecemberMarch 31, 20252026 compared to the three months ended DecemberMarch 31, 2024.2025. Interest expense increased because of additional borrowings under our revolving credit facility to partially finance the purchase price for the Saxdor acquisition.

Our (benefit) provision for income taxes for the three months ended DecemberMarch 31, 2025,2026, decreased $1.5$4.3 million, or 826.3%,117.2%, to $(1.30.6) million compared to the three months ended DecemberMarch 31, 2024.2025. The decrease primarily resulted from decreased pre-tax earnings and bycorresponding carrybackstate taxes, and impacts from the acquisition of researchSaxdor. taxThe credits,decrease was offset partially by a reduction in research credits generated for the impact of U.S. state taxes.quarter. For the three months ended DecemberMarch 31, 20252026 and 2024,2025, our effective tax rate was 34.1%20.6% and 6.9%,21.8%, respectively. For the three months ended DecemberMarch 31, 2025,2026, due to pre-tax losses, the Company'sour effective tax rate was increased by carryback of research tax creditscredits. andThe theincrease impactin ofour U.S.effective statetax taxes.rate These werewas partially offset by shortfall expense generated by certain stock-based compensation, and the foreign rate differential of our Australian subsidiary.and European subsidiaries. For the three months ended DecemberMarch 31, 2024,2025, the Company'sour effective tax rate was reduced by net operating losses and research tax credits. TheseThis reductionsreduction werewas partially offset by shortfall expense generated by certain stock-based compensation, certain federal tax code limitations, and the impact of U.S. state taxes.

Non-controlling interest represents the ownership interests of the members of the LLC other than us and the amount recorded as non-controlling interest in our unaudited interim condensed consolidated statements of operations and comprehensive loss is computed by multiplying pre-tax loss for the applicable period, by the percentage ownership in the LLC not directly attributable to us. For the three months ended DecemberMarch 31, 20252026 and 2024,2025, the weighted-average non-controlling interest attributable to ownership interests in the LLC not directly attributable to us was 1.4% and 1.6%, respectively.

Comparison of the SixNine Months Ended DecemberMarch 31, 20252026 to the SixNine Months Ended DecemberMarch 31, 20242025

Net sales for the sixnine months ended DecemberMarch 31, 20252026 increased $11.5$18.5 million, or 3.1%, to $383.4$619.1 million as compared to the sixnine months ended DecemberMarch 31, 2024.2025. The increased net sales waswere driven primarily by increased$23.1 unitmillion volumesof inrevenue ourfrom Malibuthe segment,new Saxdor segment due to the recent acquisition, a favorable model mix in ourthe Cobalt and Saltwater Fishing segmentsSegments, and inflation-driven year-over-year price increases,increases partially offset by decreased unit volumes inacross ourall Cobaltthree and Saltwater Fishingexisting segments resulting primarily from lower wholesale shipments, an unfavorable model mix in our Malibu segment and an unfavorable segment mix overall.shipments. Unit volume for the sixnine months ended DecemberMarch 31, 2025,2026, decreased 11189 units, or 0.5%,5.1%, to 2,2353,488 units as compared to the sixnine months ended DecemberMarch 31, 2024.2025. Our unit volume decreased primarily due to lower wholesale shipments inacross ourall Cobaltthree andexisting Saltwatersegments Fishingdriven segments,by lower retail activity, partially offset by increasedan unitadditional volume66 inunits ourcontributed Malibuby segment primarily due to lower wholesale shipments during the same period in fiscal year 2024, as a result of elevated dealer inventory levels.Saxdor.

Net sales attributable to our Saltwater FishingMalibu segment decreased $5.2$2.4 million, or 3.9%,1.0%, to $129.7$230.0 million,million for the sixnine months ended DecemberMarch 31, 2025,2026, compared to the sixnine months ended DecemberMarch 31, 2024.2025. Unit volumes attributable to our Saltwater FishingMalibu segment decreased 4759 units for the sixnine months ended DecemberMarch 31, 20252026, compared to the sixnine months ended DecemberMarch 31, 2024,2025, primarily due to lower wholesale shipments driven by lower retail activity during the period. The decrease in net sales was driven by a decrease in units, partially offset by a favorable model mix and inflation-driven year-over-year price increases.

Net sales attributable to our CobaltSaltwater Fishing segment decreased $2.4$3.7 million, or 2.3%,1.8%, to $104.4$203.1 millionmillion, for the sixnine months ended DecemberMarch 31, 2025,2026, compared to the sixnine months ended DecemberMarch 31, 2024.2025. Unit volumes attributable to Cobaltour Saltwater Fishing segment decreased 10660 units for the sixnine months ended DecemberMarch 31, 20252026 compared to the sixnine months ended DecemberMarch 31, 2024,2025, primarily due to lower wholesale shipments driven by lower retail activity during the period and our dealers' desire to hold less inventory.period. The decrease in net sales was driven primarily by a decrease in units, partially offset by a favorable model mix and inflation-driven year-over-year price increases.

Overall consolidated net sales per unit increased 3.6%8.7% to $171,523$177,481 per unit for the sixnine months ended DecemberMarch 31, 2025,2026, compared to the sixnine months ended DecemberMarch 31, 2024.2025. The increase in overall consolidated net sales per unit was driven primarily by a favorable model mix in our Cobalt and Saltwater Fishing segmentssegments, an incremental increase related to our new Saxdor segment and inflation-driven year-over-year price increases, partially offset by an unfavorable model mix in our Malibu segment and an unfavorable segment mix overall.increases. Net sales per unit for our Malibu segment decreasedincreased 0.8%2.7% to $142,036$144,292 per unit for the sixnine months ended DecemberMarch 31, 2025,2026, compared to the sixnine months ended DecemberMarch 31, 2024,2025, driven by an unfavorable model mix, partially offset by inflation-driven year-over-year price increases. Net sales per unit for our Saltwater Fishing segment increased 4.0%4.9% to $227,482$229,975 per unit for the sixnine months ended DecemberMarch 31, 20252026 driven by a favorable model mix and inflation-driven year-over-year price increases.increases, partially offset by increased dealer incentive costs per unit. Net sales per unit for our Cobalt segment increased 14.6%15.4% to $170,049$172,324 per unit for the sixnine months ended DecemberMarch 31, 2025,2026, compared to the sixnine months ended DecemberMarch 31, 2024,2025, driven by a favorable model mix and inflation-driven year-over-year price increases. Since our acquisition on March 2, 2026, net sales per unit for our Saxdor segment was $350,561.

Cost of sales for the sixnine months ended DecemberMarch 31, 20252026 increased $24.1$35.6 million, or 7.9%,7.3%, to $330.3$524.7 million as compared to the sixnine months ended DecemberMarch 31, 2024.2025. The increase in cost of sales was primarily driven by acost 3.1% increase in netof sales from the new Saxdor segment due to the recent acquisition and higher per unit material and labor costs of $4.8$10.8 million, $5.2$10.6 million and $13.3$17.7 million for the Malibu, Saltwater Fishing, and Cobalt segments, respectively.respectively, partially offset by decreased unit volumes. The increase in per unit material and labor costs was primarily driven by increased prices due to fixed cost deleveragedeleveraging indue theto Cobaltlower andunit Saltwatervolumes Fishingacross all three existing segments, a model mix that corresponds to higher costs per unit in our Cobalt and Saltwater Fishing segments and inflationary pressures.

Gross profit for the sixnine months ended DecemberMarch 31, 20252026 decreased $12.6$17.0 million, or 19.2%,15.3%, to $53.1$94.3 million compared to the sixnine months ended DecemberMarch 31, 2024.2025. The decrease in gross profit was driven primarily by increased cost of sales for the reasons noted above, partially offset by higher net sales.above. Gross margin for the sixnine months ended DecemberMarch 31, 20252026 decreased 380330 basis points from 17.6%18.5% to 13.8%15.2% driven primarily by fixed cost deleverage in the Cobalt and Saltwater Fishing Segmentsdeleveraging due to lower salesunit volumes across all three existing segments and higher per unit labor and material costs across all segments.costs.

Selling and marketing expenses for the sixnine months ended DecemberMarch 31, 20252026 increased $1.5$3.0 million, or 13.9%17.1% to $12.4$20.7 million compared to the sixnine months ended DecemberMarch 31, 2024.2025. The increase was driven primarily by higher personnel-related expenses and marketing events.events and an incremental increase due to the new Saxdor segment. As a percentage of sales, selling and marketing expenses increased 3040 basis points to 3.2%3.3% for the sixnine months ended DecemberMarch 31, 20252026 compared to 2.9% for the sixnine months ended DecemberMarch 31, 2024.2025. General and administrative expenses for the sixnine months ended DecemberMarch 31, 20252026 decreased $12.2$0.27 million, or 22.6%,0.4%, to $41.6$73.4 million as compared to the sixnine months ended DecemberMarch 31, 20242025 driven primarily by a $3.5 million legal settlement for the sixnine months ended DecemberMarch 31, 2024,2025, along with decreased legal feesfees, partially offset by acquisition related expenses incurred due to the Saxdor acquisition and decreasesan inincremental stock-basedincrease compensationdue expenseto andthe incentivenew pay.Saxdor segment. As a percentage of sales, general and administrative expenses decreased 36040 basis points to 10.9%11.9% for the sixnine months ended DecemberMarch 31, 20252026 compared to 14.5%12.3% for the sixnine months ended DecemberMarch 31, 2024.2025. Amortization expense remainedincreased flat$1.4 atmillion $3.4to $6.5 million for the sixnine months ended DecemberMarch 31, 2025.2026 due to the additional intangibles acquired from the Saxdor acquisition.

Other Expense (Income),Expense, Net

Other expense (income),expense, net for the sixnine months ended DecemberMarch 31, 20252026 decreased by $1.1$0.4 million, or 113.3%30.1% to other income of $0.1$1.0 million. The decrease in other expense (income) was due to other income from an adjustment in our tax receivable agreement liability mainly due to decreased blended federal and state tax rates used as a result of OB3 tax reform changes, and in turn, a decrease in the future benefit we expect to pay under our tax receivable agreement with pre-IPO owners. The decrease in other expense was partially offset by an increase in interest expense. Interest expense increased because of additional borrowings under our revolving credit facility to partially finance the purchase price for the Saxdor acquisition.

Our (benefit) provision for income taxes for the sixnine months ended DecemberMarch 31, 2025,2026, decreased $0.3$4.6 million, or 47.4%,153.9%, to $(1.01.6) million compared to the sixnine months ended DecemberMarch 31, 2024.2025. The decrease primarily resulted from decreased pre-tax earnings and corresponding state taxes, and impacts from the acquisition of Saxdor. For the nine months ended March 31, 2026, due to pre-tax losses, our effective tax rate was increased by carryback of research tax credits.credits Thisand the impact of U.S. state taxes. The increase was partially offset by shortfall expense generated by certain stock-based compensation, and the foreign rate differential of our Australian and Saxdor subsidiaries. For the nine months ended March 31, 2026, our effective tax rate was also reduced by the impact of the change in tax law enacted, in accordance with OB3, through the remeasurement of our deferred tax assets. For the sixnine months ended DecemberMarch 31, 2025, due to pre-tax losses, the Company'sour effective tax rate was increasedreduced by carryback of research tax creditscredits. andThis thereduction impact of U.S. state taxes. These werewas partially offset by shortfall expense generated by certain stock-based compensation, andcertain the foreign rate differential of our Australian subsidiary. For the six months ended December 31, 2024, due to year-to date pre-tax losses, the Company's effectivefederal tax ratecode was reduced by shortfall expense generated by certain stock-based compensationlimitations, and the foreign rate differential of our Australian subsidiary. This was partially offset by the impact of U.S. state taxes.

Non-controlling interest represents the ownership interests of the members of the LLC other than us and the amount recorded as non-controlling interest in our unaudited interim condensed consolidated statements of operations and comprehensive loss is computed by multiplying pre-tax loss for the applicable period, by the percentage ownership in the LLC not directly attributable to us. For the sixnine months ended DecemberMarch 31, 20252026 and 2024,2025, the weighted-average non-controlling interest attributable to ownership interests in the LLC not directly attributable to us was 1.4% and 1.6%, respectively.

We define Adjusted EBITDA as net (loss) income before interest expense, income taxes, depreciation, amortization, and non-cash, non-operating expenses or other expenses that we do not believe are indicative of our ongoing expenses, including certain professional fees, litigation settlements, acquisition and integration related expenses, non-cash compensation expenseexpense, and adjustments to our tax receivable agreement liability. We define Adjusted EBITDA margin as Adjusted EBITDA divided by net sales. Adjusted EBITDA and Adjusted EBITDA margin are not measures of net (loss) income as determined by GAAP. Management believes Adjusted EBITDA and Adjusted EBITDA margin allow investors to evaluate the Company’s operating performance and compare our results of operations from period to period on a consistent basis by excluding items that management does not believe are indicative of our core operating performance. Management uses Adjusted EBITDA to assist in highlighting trends in our operating results without regard to our financing methods, capital structure and non-recurring or non-operating expenses.

Adjusted Net (Loss) Income Per Share

Adjusted net (loss) income per share is a non-GAAP financial measure that is used and disclosed by management in order to give management and its investors and analysts a more accurate picture of our underlying earnings performance. Adjusted net (loss) income per share, excludes items that management does not believe are indicative of our core operating performance.

We define adjusted net (loss) income per share as net (loss) income attributable to Malibu Boats, Inc. per share, excluding income tax (benefit) expense, before non-cash, non-operating expenses, or other expenses that we do not believe are indicative of our ongoing expenses, including litigation settlements, acquisition related amortization, acquisition and integration related expenses, certain professional fees and non-cash compensation expense, and reflecting an adjustment for income tax expense on adjusted (loss) income before income taxes at our estimated effective income tax rate.

We exclude the items listed above from net (loss) income per share in arriving at adjusted net (loss) income per share because these amounts can vary substantially from company to company within our industry depending upon accounting methods and book values of assets, the methods by which assets were acquired and other factors. Adjusted net (loss) income per share has limitations as an analytical tool and should not be considered as an alternative to, or more meaningful than, net (loss) income per share as determined in accordance with GAAP or as an indicator of our liquidity. Certain items excluded are significant components in understanding and assessing a company’s financial performance. Our presentation of adjusted net (loss) income per share should not be construed as an inference that our results will be unaffected by unusual or non-recurring items. Our computation of this measure may not be comparable to other similarly titled measures of other companies.

The following table sets forth a reconciliation of net (loss) income per share attributable to Malibu Boats, Inc. as determined in accordance with GAAP to adjusted net (loss) income per share for the periods indicated (dollars in thousands):

Our primary uses of cash have been for funding working capital and capital investments, repayments under our debt arrangements, acquisitions, cash distributions to members of the LLC, cash payments under our tax receivable agreement and stock repurchases under our stock repurchase program. For both the short term and the long term, our sources of cash to meet these needs have primarily been operating cash flows, borrowings under our revolving credit facility and short and long-term debt financings from banks and financial institutions. We believe that our cash on hand, cash generated by operating activities and funds available under our revolving credit facility will be sufficient to finance our operating activities for at least the next twelve months and beyond.

Our typical uses of cash are for capital expenditures, debt service obligations, payments under our tax receivables agreement, our lease obligationsobligations, acquisitions and return of capital to our stockholders, which has typically been accomplished through our stock repurchase programs. On March 2, 2026, we borrowed $140 million under our revolving credit facility to partially fund the payment of the purchase price for the Saxdor acquisition.

During fiscal year 2025, we incurred approximately $27.9 million in capital expenditures primarily for investments in new models, capacity enhancements and vertical integration initiatives. For the sixnine months ended DecemberMarch 31, 2025,2026, we have incurred approximately $8.7$14.6 million in capital expenditures primarily for investments in new models, capacity enhancements and vertical integration initiatives.