MasterCraft Boat Holdings (MCFT) risk factors, FY2026 10-K

Risks Relating to Economic and Market Conditions

1. 01Global economic conditions, particularly in the U.S., significantly affect our industry and business, and economic decline can materially impact our financial results
2. 02Inflation and elevated interest rates for prolonged periods could adversely affect our financial results29% rewritten
3. 03Fiscal concerns and policy changes may negatively impact worldwide economic and credit conditions and adversely affect our industry, business, and financial condition
4. 04Our variable rate indebtedness subjects us to interest rate risk, which could cause our debt service obligations to increase significantly
5. 05An increase in energy costs may materially adversely affect our business, financial condition, and results of operations25% rewritten
6. 06Fluctuations in foreign currency exchange rates could adversely affect our results

Risks Relating to Our Business

1. 07We depend on our network of independent dealers, and our financial results could be adversely affected if we are unable to maintain effective distribution
2. 08Our ability to adjust for demand in a rapidly changing environment may adversely affect our results of operations37% rewritten
3. 09We may not be able to execute our manufacturing strategy successfully, which could cause the profitability of our products to suffer42% rewritten
4. 10Adverse weather conditions and climate change events can have a negative effect on revenues
5. 11Catastrophic events, including natural and environmental disasters, acts of terrorism, or civil unrest, could have a negative effect on our operations and financial results25% rewritten
6. 12Our ability to remain competitive depends on successfully introducing new or redesigned products and services that meet consumer expectations
7. 13Divestitures and similar strategic transactions may materially and adversely affect our business or results of operations
8. 14Our financial results may be adversely affected by our third-party suppliers’ increased costs, inability to adjust for our required production levels due to changes in demand or global supply chain disruptions, or our inability to maintain relationship with new suppliers
9. 15These risks are exacerbated in the case of single-source suppliers, and the exclusive supplier of a key component could potentially exert significant bargaining power over price, quality, warranty claims, or other terms43% rewritten
10. 16Our business and operations are dependent on the expertise of our key contributors, our successful implementation of succession plans, and our ability to attract and retain management employees and skilled labor24% rewritten
11. 17Our ability to continue to execute our growth strategy could potentially be adversely affected by the effectiveness of organizational changes. Any disruption or uncertainty resulting from such changes could have a material adverse impact on our business, results of operations, and financial condition
12. 18We may be required to repurchase inventory of certain dealers
13. 19Our industry is characterized by intense competition, which affects our sales and profits39% rewritten
14. 20Our sales may be adversely impacted by increased consumer preference for used boats or the supply of new boats by competitors in excess of demand
15. 21We provide a limited warranty for our products. We may provide additional warranties related to certain promotional programs, as well as warranties in certain geographical markets as determined by local regulations and market conditions25% rewritten
16. 22An inability to identify and complete targeted acquisitions, as well as an inability to timely and successfully integrate completed acquisitions, such as the Marine Products Transaction, could negatively impact financial results and/or adversely affect our internal controls22% rewritten
17. 23If we fail to timely and successfully integrate new businesses, including Marine Products, into existing operations, we may see higher costs, lost sales, or otherwise diminished earnings and financial resultsNew
18. 24The Chaparral and Robalo brands acquired in the Marine Products Transaction expand our operations into product categories and markets in which we have limited prior experienceNew
19. 25Negative public perception of our products, our sustainability practices or restrictions on the access or the use of our products in certain locations could materially adversely affect our business or results of operations
20. 26Our business operations could be negatively impacted by an outage or breach of our information technology systems, network disruptions, or a cybersecurity event
21. 27We rely on third parties for computing, storage, processing, and similar services. Any disruption of or interference with our use of these third-party services could have an adverse effect on our business, financial condition, and operating results
22. 28Our credit facilities contain covenants which may limit our operating flexibility; failure to comply with covenants may result in our lenders restricting or terminating our ability to borrow under such credit facilities

Risks Relating to Intellectual Property

1. 29Our success depends on the continued strength of our brands and the value of our brands, and sales of our products could be diminished if we, the athletes who use our products, or the sports and activities in which our products are used are associated with negative publicity
2. 30We believe that our brands are a significant contributor to the success of our business and that maintaining and enhancing our brands is important to expanding our consumer and dealer base. Failure to continue to protect our brands, may adversely affect our business, financial condition, and results of operations
3. 31Our intellectual property rights may be inadequate to protect our business
4. 32Policing unauthorized use of our intellectual property is difficult and litigating intellectual property claims may result in substantial cost and divert management’s attention
5. 33If third parties claim that we infringe on their intellectual property rights, our financial condition could be adversely affected

Risks Relating to Our Regulatory, Accounting, Legal, and Tax Environment

1. 34International tariffs could materially and adversely affect our business and results of operations59% rewritten
2. 35An impairment in the carrying value of goodwill, trade names, and other long-lived assets could negatively affect our consolidated results of operations and net worth37% rewritten
3. 36Compliance with environmental, health, safety, data privacy and other regulatory requirements may increase costs and reduce demand for our products32% rewritten
4. 37We manufacture and sell products that create exposure to potential claims and litigation
5. 38The nature of our business exposes us to workers’ compensation claims and other workplace liabilities
6. 39Increases in income tax rates or changes in income tax laws or enforcement could have a material adverse impact on our financial results

Risks Relating to Ownership of our Common Stock

1. 40LOR, Inc. and its affiliates beneficially own approximately 20% of our outstanding common stock and have contractual rights to nominate directors to our Board, which may limit the ability of other stockholders to influence corporate mattersNew
2. 41Inefficient or ineffective allocation of capital could adversely affect our operating results and/or shareholder value
3. 42Shareholders may be diluted by future issuances of common stock in connection with our incentive plans, acquisitions, or otherwise; future sales of such shares in the public market, or the expectations that such sales may occur, could lower our stock price66% rewritten
4. 43We currently do not intend to pay dividends on our common stock