10-Q
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 10-Q

 

 

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

For the quarterly period ended: October 1, 2023

OR

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

For the transition period from to

 

Commission File Number 001-37502

 

 

https://cdn.kscope.io/094cf39f51b5e85db375f71d535a3119-img155751592_0.jpg 

 

MASTERCRAFT BOAT HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

 

 

Delaware

 

06-1571747

(State or Other Jurisdiction

 

(I.R.S. Employer

of Incorporation or Organization)

 

Identification No.)

 

100 Cherokee Cove Drive, Vonore, TN 37885

(Address of Principal Executive Office) (Zip Code)

 

(423) 884-2221

(Registrant’s telephone number, including area code)

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

Title of each class

 

Trading

Symbol(s)

 

Name of each exchange on which registered

Common Stock

 

MCFT

 

NASDAQ

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

Accelerated filer

 

 

 

 

Non-accelerated filer

Smaller reporting company

 

 

 

 

Emerging growth company

 

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No

As of November 3, 2023, there were 17,256,141 shares of the Registrant’s common stock, par value $0.01 per share, issued and outstanding.

 

 


 

TABLE OF CONTENTS

 

 

 

 

 

 

Page

 

 

 

PART I

FINANCIAL INFORMATION

 

Item 1.

Financial Statements

 

 

Unaudited Condensed Consolidated Statements of Operations

4

 

Unaudited Condensed Consolidated Balance Sheets

5

 

Unaudited Condensed Consolidated Statements of Equity

6

 

Unaudited Condensed Consolidated Statements of Cash Flows

7

 

Notes to Unaudited Condensed Consolidated Financial Statements

8

Item 2.

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

17

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

24

Item 4.

Controls and Procedures

24

 

 

 

PART II

OTHER INFORMATION

 

Item 1.

Legal Proceedings

25

Item 1A.

Risk Factors

25

Item 2.

Unregistered Sales of Securities and Use of Proceeds

25

Item 3.

Defaults Upon Senior Securities

25

Item 4.

Mine Safety Disclosures

25

Item 5.

Other Information

25

Item 6.

Exhibits, Financial Statement Schedules

26

 

 

 

 

SIGNATURES

27

 

2


 

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains certain “forward-looking statements” within the meaning of the federal securities laws. These forward-looking statements can generally be identified by the use of statements that include words such as “could,” “may,” “might,” “will,” “expect,” “likely,” “believe,” “continue,” “anticipate,” “estimate,” “intend,” “plan,” “project” and other similar words or phrases. Forward-looking statements involve estimates and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements.

The forward-looking statements contained in this Quarterly Report on Form 10-Q are based on assumptions that we have made considering our industry experience and our perceptions of historical trends, current conditions, expected future developments and other important factors we believe are appropriate under the circumstances. As you read and consider this Quarterly Report on Form 10-Q, you should understand that these statements are not guarantees of performance or results. They involve risks, uncertainties (many of which are beyond our control) and assumptions. Although we believe that these forward-looking statements are based on reasonable assumptions, you should be aware that many important factors could affect our actual operating and financial performance and cause our performance to differ materially from the performance anticipated in the forward-looking statements, including but not limited to the following: changes in interest rates, the potential effects of supply chain disruptions and production inefficiencies, general economic conditions, demand for our products, inflation, changes in consumer preferences, competition within our industry, our reliance on our network of independent dealers, our ability to manage our manufacturing levels and our fixed cost base, the successful introduction of our new products, geopolitical conflicts, such as the conflict between Russia and Ukraine and the conflict in the Gaza Strip, financial institution disruptions and the other important factors described under the caption “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended June 30, 2023, filed with the Securities and Exchange Commission (“SEC”) on August 30, 2023 (our “2023 Annual Report”). Should one or more of these risks or uncertainties materialize, or should any of these assumptions prove incorrect, our actual operating and financial performance may vary in material respects from the performance projected in these forward-looking statements.

Further, any forward-looking statement speaks only as of the date on which it is made, and except as required by law, we undertake no obligation to update any forward-looking statement contained in this Quarterly Report on Form 10-Q to reflect events or circumstances after the date on which it is made or to reflect the occurrence of anticipated or unanticipated events or circumstances. New important factors that could cause our business not to develop as we expect may emerge from time to time, and it is not possible for us to predict all of them.

3


 

MASTERCRAFT BOAT HOLDINGS, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

 

 

 

Three Months Ended

 

 

 

 

October 1,

 

 

October 2,

 

 

(Dollar amounts in thousands, except per share data)

 

2023

 

 

2022

 

 

NET SALES

 

$

104,217

 

 

$

169,516

 

 

COST OF SALES

 

 

82,381

 

 

 

123,543

 

 

GROSS PROFIT

 

 

21,836

 

 

 

45,973

 

 

OPERATING EXPENSES:

 

 

 

 

 

 

 

Selling and marketing

 

 

3,464

 

 

 

3,779

 

 

General and administrative

 

 

9,357

 

 

 

9,483

 

 

Amortization of other intangible assets

 

 

462

 

 

 

489

 

 

Total operating expenses

 

 

13,283

 

 

 

13,751

 

 

OPERATING INCOME

 

 

8,553

 

 

 

32,222

 

 

OTHER INCOME (EXPENSE):

 

 

 

 

 

 

 

Interest expense

 

 

(878

)

 

 

(562

)

 

Interest income

 

 

1,351

 

 

 

151

 

 

INCOME BEFORE INCOME TAX EXPENSE

 

 

9,026

 

 

 

31,811

 

 

INCOME TAX EXPENSE

 

 

1,950

 

 

 

7,176

 

 

NET INCOME FROM CONTINUING OPERATIONS

 

 

7,076

 

 

 

24,635

 

 

LOSS FROM DISCONTINUED OPERATIONS, NET OF TAX (Note 3)

 

 

(881

)

 

 

(20,567

)

 

NET INCOME

 

$

6,195

 

 

$

4,068

 

 

 

 

 

 

 

 

 

 

NET INCOME (LOSS) PER SHARE:

 

 

 

 

 

 

 

Basic

 

 

 

 

 

 

 

Continuing operations

 

$

0.41

 

 

$

1.38

 

 

Discontinued operations

 

 

(0.05

)

 

 

(1.15

)

 

Net income

 

$

0.36

 

 

$

0.23

 

 

 

 

 

 

 

 

 

 

Diluted

 

 

 

 

 

 

 

Continuing operations

 

$

0.41

 

 

$

1.37

 

 

Discontinued operations

 

 

(0.05

)

 

 

(1.14

)

 

Net income

 

$

0.36

 

 

$

0.23

 

 

 

 

 

 

 

 

 

 

WEIGHTED AVERAGE SHARES USED FOR COMPUTATION OF:

 

 

 

 

 

 

 

Basic earnings per share

 

 

17,156,283

 

 

 

17,946,061

 

 

Diluted earnings per share

 

 

17,224,608

 

 

 

18,031,725

 

 

 

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

4


 

MASTERCRAFT BOAT HOLDINGS, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

 

 

 

October 1,

 

 

June 30,

 

(Dollar amounts in thousands, except per share data)

 

2023

 

 

2023

 

ASSETS

 

 

 

 

 

 

CURRENT ASSETS:

 

 

 

 

 

 

Cash and cash equivalents

 

$

23,459

 

 

$

19,817

 

Held-to-maturity securities (Note 4)

 

 

66,532

 

 

 

91,560

 

Accounts receivable, net of allowance of $137 and $122, respectively

 

 

16,304

 

 

 

15,741

 

Inventories, net (Note 5)

 

 

55,472

 

 

 

58,298

 

Prepaid expenses and other current assets

 

 

12,593

 

 

 

10,083

 

Total current assets

 

 

174,360

 

 

 

195,499

 

Property, plant and equipment, net (Note 6)

 

 

76,050

 

 

 

77,921

 

Goodwill (Note 7)

 

 

28,493

 

 

 

28,493

 

Other intangible assets, net (Note 7)

 

 

35,000

 

 

 

35,462

 

Deferred income taxes

 

 

12,460

 

 

 

12,428

 

Deferred debt issuance costs, net

 

 

279

 

 

 

304

 

Other long-term assets

 

 

7,586

 

 

 

3,869

 

Total assets

 

$

334,228

 

 

$

353,976

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

CURRENT LIABILITIES:

 

 

 

 

 

 

Accounts payable

 

 

16,950

 

 

 

20,391

 

Income tax payable

 

 

500

 

 

 

5,272

 

Accrued expenses and other current liabilities (Note 8)

 

 

61,964

 

 

 

72,496

 

Current portion of long-term debt, net of unamortized debt issuance costs (Note 10)

 

 

4,384

 

 

 

4,381

 

Total current liabilities

 

 

83,798

 

 

 

102,540

 

Long-term debt, net of unamortized debt issuance costs (Note 10)

 

 

48,198

 

 

 

49,295

 

Unrecognized tax positions

 

 

7,546

 

 

 

7,350

 

Other long-term liabilities

 

 

2,790

 

 

 

2,702

 

Total liabilities

 

 

142,332

 

 

 

161,887

 

COMMITMENTS AND CONTINGENCIES

 

 

 

 

 

 

EQUITY:

 

 

 

 

 

 

Common stock, $.01 par value per share — authorized, 100,000,000 shares; issued and outstanding, 17,256,141 shares at October 1, 2023 and 17,312,850 shares at June 30, 2023

 

 

171

 

 

 

173

 

Additional paid-in capital

 

 

69,510

 

 

 

75,976

 

Retained earnings

 

 

122,015

 

 

 

115,820

 

MasterCraft Boat Holdings, Inc. equity

 

 

191,696

 

 

 

191,969

 

Noncontrolling interest

 

 

200

 

 

 

120

 

Total equity

 

 

191,896

 

 

 

192,089

 

Total liabilities and equity

 

$

334,228

 

 

$

353,976

 

 

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

5


 

MASTERCRAFT BOAT HOLDINGS, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

MasterCraft Boat

 

 

 

 

 

 

 

 

 

Common Stock

 

 

Additional Paid-in

 

 

Retained

 

 

Holdings, Inc.

 

 

Noncontrolling

 

 

Total

 

(Dollar amounts in thousands)

 

Shares

 

 

Amount

 

 

Capital

 

 

Earnings

 

 

Equity

 

 

Interest

 

 

Equity

 

Balance at June 30, 2023

 

 

17,312,850

 

 

$

173

 

 

$

75,976

 

 

$

115,820

 

 

$

191,969

 

 

$

120

 

 

$

192,089

 

Share-based compensation activity

 

 

185,055

 

 

 

 

 

 

(683

)

 

 

 

 

 

(683

)

 

 

 

 

 

(683

)

Repurchase and retirement of common stock

 

 

(241,764

)

 

 

(2

)

 

 

(5,783

)

 

 

 

 

 

(5,785

)

 

 

 

 

 

(5,785

)

Capital contribution from noncontrolling interest

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

80

 

 

 

80

 

Net income

 

 

 

 

 

 

 

 

 

 

 

6,195

 

 

 

6,195

 

 

 

 

 

 

6,195

 

Balance at October 1, 2023

 

 

17,256,141

 

 

$

171

 

 

$

69,510

 

 

$

122,015

 

 

$

191,696

 

 

$

200

 

 

$

191,896

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

MasterCraft Boat

 

 

 

 

 

 

 

 

 

Common Stock

 

 

Additional Paid-in

 

 

Retained

 

 

Holdings, Inc.

 

 

Noncontrolling

 

 

Total

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Earnings

 

 

Equity

 

 

Interest

 

 

Equity

 

Balance at June 30, 2022

 

 

18,061,437

 

 

$

181

 

 

$

96,584

 

 

$

46,883

 

 

$

143,648

 

 

$

 

 

$

143,648

 

Share-based compensation activity

 

 

128,040

 

 

 

1

 

 

 

649

 

 

 

 

 

 

650

 

 

 

 

 

 

650

 

Repurchase and retirement of common stock

 

 

(191,360

)

 

 

(2

)

 

 

(4,176

)

 

 

 

 

 

(4,178

)

 

 

 

 

 

(4,178

)

Net income

 

 

 

 

 

 

 

 

 

 

 

4,068

 

 

 

4,068

 

 

 

 

 

 

4,068

 

Balance at October 2, 2022

 

 

17,998,117

 

 

$

180

 

 

$

93,057

 

 

$

50,951

 

 

$

144,188

 

 

$

 

 

$

144,188

 

 

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

6


 

MASTERCRAFT BOAT HOLDINGS, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

 

 

 

Three Months Ended

 

 

 

October 1,

 

 

October 2,

 

(Dollar amounts in thousands)

 

2023

 

 

2022

 

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

 

 

Net income

 

$

6,195

 

 

$

4,068

 

Loss from discontinued operations, net of tax

 

 

881

 

 

 

20,567

 

Net income from continuing operations

 

 

7,076

 

 

 

24,635

 

Adjustments to reconcile net income from continuing operations to net cash provided by (used in) operating activities:

 

 

 

 

 

 

Depreciation and amortization

 

 

2,727

 

 

 

2,601

 

Share-based compensation

 

 

939

 

 

 

1,120

 

Unrecognized tax benefits

 

 

196

 

 

 

(818

)

Deferred income taxes

 

 

(32

)

 

 

2,416

 

Amortization of debt issuance costs

 

 

56

 

 

 

59

 

Changes in certain operating assets and liabilities

 

 

(18,763

)

 

 

(10,021

)

Other, net

 

 

(1,003

)

 

 

726

 

Net cash provided by (used in) operating activities of continuing operations

 

 

(8,804

)

 

 

20,718

 

Net cash used in operating activities of discontinued operations

 

 

(318

)

 

 

(2,230

)

Net cash provided by (used in) operating activities

 

 

(9,122

)

 

 

18,488

 

 

 

 

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

 

 

Purchases of property, plant and equipment

 

 

(4,398

)

 

 

(5,968

)

Purchases of investments

 

 

(9,761

)

 

 

 

Maturities of investments

 

 

35,347

 

 

 

 

Net cash provided by (used in) investing activities of continuing operations

 

 

21,188

 

 

 

(5,968

)

Net cash used in investing activities of discontinued operations

 

 

 

 

 

(501

)

Net cash provided by (used in) investing activities

 

 

21,188

 

 

 

(6,469

)

 

 

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

 

 

Principal payments on long-term debt

 

 

(1,125

)

 

 

(750

)

Cash paid for withholding taxes on vested stock

 

 

(1,622

)

 

 

(465

)

Repurchase and retirement of common stock

 

 

(5,757

)

 

 

(4,178

)

Other, net

 

 

80

 

 

 

 

Net cash used in financing activities of continuing operations

 

 

(8,424

)

 

 

(5,393

)

NET CHANGE IN CASH AND CASH EQUIVALENTS

 

 

3,642

 

 

 

6,626

 

 

 

 

 

 

 

 

CASH AND CASH EQUIVALENTS — BEGINNING OF PERIOD

 

 

19,817

 

 

 

34,203

 

CASH AND CASH EQUIVALENTS — END OF PERIOD

 

$

23,459

 

 

$

40,829

 

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:

 

 

 

 

 

 

Cash payments for interest

 

$

820

 

 

$

542

 

Cash payments for income taxes

 

 

6,380

 

 

 

5,627

 

NON-CASH INVESTING AND FINANCING ACTIVITIES:

 

 

 

 

 

 

Activity related to sales-type lease

 

 

3,898

 

 

 

 

Capital expenditures in accounts payable and accrued expenses

 

 

883

 

 

 

643

 

 

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

7


 

MASTERCRAFT BOAT HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unless otherwise noted, dollars in thousands, except per share data and per unit data)

1.
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

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

The accompanying unaudited condensed consolidated financial statements include the accounts of MasterCraft Boat Holdings, Inc. ("Holdings") and its wholly owned subsidiaries. Holdings and its subsidiaries collectively are referred to herein as the "Company." The unaudited condensed consolidated financial statements have been prepared on the same basis as the Company’s audited consolidated financial statements for the year ended June 30, 2023 and, in the opinion of management, reflect all adjustments considered necessary to present fairly the Company’s financial position as of October 1, 2023, its results of operations for the three months ended October 1, 2023 and October 2, 2022, its cash flows for the three months ended October 1, 2023 and October 2, 2022, and its statements of equity for the three months ended October 1, 2023 and October 2, 2022. All adjustments are of a normal, recurring nature. Certain information and footnote disclosures normally included in annual consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and the applicable rules and regulations of the SEC for financial information have been condensed or omitted pursuant to such rules and regulations. The June 30, 2023 condensed consolidated balance sheet data was derived from the audited financial statements but does not include all disclosures required by U.S. GAAP for complete financial statements. However, management believes that the disclosures in these condensed consolidated financial statements are adequate to make the information presented not misleading. These condensed consolidated financial statements should be read in conjunction with the Company’s consolidated financial statements and notes thereto included in our 2023 Annual Report on Form 10-K.

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

There were no significant changes in or changes to the application of the Company’s significant or critical accounting policies or estimation procedures for the three months ended October 1, 2023 as compared with those described in the Company’s audited consolidated financial statements for the fiscal year ended June 30, 2023.

Investment in Sales-Type Lease — On July 1, 2023, the Company became a lessor in a sales-type lease arrangement consisting of land valued at $3.9 million. In accordance with Accounting Standards Codification (“ASC”) 842, Leases, the underlying land was derecognized as Property, Plant and Equipment and a sales-type lease was recognized as a net investment in a lease. The net investment balances are represented as lease receivable and unguaranteed residual asset amounts on the balance sheet within other current assets and other long-term assets. The interest earned on the net investment will be recognized as interest income.

8


 

2.
REVENUE RECOGNITION

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

 

 

 

Three Months Ended October 1, 2023

 

 

 

MasterCraft

 

 

Crest

 

 

Aviara

 

 

Total

 

Major Product Categories:

 

 

 

 

 

 

 

 

 

 

 

 

Boats and trailers

 

$

69,825

 

 

$

18,118

 

 

$

9,912

 

 

$

97,855

 

Parts

 

 

5,192

 

 

 

253

 

 

 

 

 

 

5,445

 

Other revenue

 

 

819

 

 

 

98

 

 

 

 

 

 

917

 

Total

 

$

75,836

 

 

$

18,469

 

 

$

9,912

 

 

$

104,217

 

 

 

 

Three Months Ended October 2, 2022

 

 

 

MasterCraft

 

 

Crest

 

 

Aviara

 

 

Total

 

Major Product Categories:

 

 

 

 

 

 

 

 

 

 

 

 

Boats and trailers

 

$

108,204

 

 

$

43,143

 

 

$

12,935

 

 

$

164,282

 

Parts

 

 

4,237

 

 

 

253

 

 

 

 

 

 

4,490

 

Other revenue

 

 

579

 

 

 

165

 

 

 

 

 

 

744

 

Total

 

$

113,020

 

 

$

43,561

 

 

$

12,935

 

 

$

169,516

 

 

Contract Liabilities

As of June 30, 2023, the Company had $3.3 million of contract liabilities associated with customer deposits and services. During the three months ended October 1, 2023, $0.7 million was recognized as revenue. As of October 1, 2023, total contract liabilities associated with customer deposits and services were $3.4 million, were reported in Accrued expenses and other current liabilities and Other long term liabilities on the condensed consolidated balance sheet, and $1.3 million is expected to be recognized as revenue during the remainder of the year ending June 30, 2024.

3.
DISCONTINUED OPERATIONS

On September 2, 2022, the Company sold its NauticStar business to certain affiliates of Iconic Marine Group, LLC ("Purchaser"). Pursuant to the terms of the purchase agreement, substantially all of the assets of NauticStar were sold, including, among other things, all of the issued and outstanding membership interests in its wholly-owned subsidiary NS Transport, LLC, all owned real property, equipment, inventory, intellectual property and accounts receivable, and the Purchaser assumed substantially all of the liabilities of NauticStar, including, among other things, product liability and warranty claims.

During the quarter ended October 2, 2022, the Company recognized a $22.1 million loss on sale. The final settlement of the purchase price was subject to customary working capital adjustments that had been in arbitration, but were settled in October 2023 without a significant impact to the loss on sale previously recorded. The value of the assets and liabilities that were retained at the time of sale, which are primarily related to certain claims, are subject to change. Certain of these claims have been settled or are expected to settle for higher amounts than previously estimated, with the related activity being recorded as discontinued operations.

The following table summarizes the operating results of discontinued operations for the following periods:

 

 

Three Months Ended

 

 

October 1,

 

 

October 2,

 

 

 

 

2023

 

 

2022

 

 

NET SALES

 

$

37

 

 

$

7,870

 

 

COST OF SALES

 

 

338

 

 

 

9,114

 

 

GROSS LOSS

 

 

(301

)

 

 

(1,244

)

 

OPERATING EXPENSES:

 

 

 

 

 

 

 

Selling, general and administrative

 

 

1,046

 

 

 

2,345

 

 

Total operating expenses

 

 

1,046

 

 

 

2,345

 

 

OPERATING LOSS

 

 

(1,347

)

 

 

(3,589

)

 

Loss on sale of discontinued operations

 

 

157

 

 

 

(22,087

)

 

LOSS BEFORE INCOME TAX BENEFIT

 

 

(1,190

)

 

 

(25,676

)

 

INCOME TAX BENEFIT

 

 

309

 

 

 

5,109

 

 

LOSS FROM DISCONTINUED OPERATIONS, NET OF TAX

 

$

(881

)

 

$

(20,567

)

 

 

9


 

4.
HELD-TO-MATURITY SECURITIES

The amortized cost and net carrying amount, gross unrealized gains and losses, and estimated fair value of our investments classified as held-to-maturity at October 1, 2023 and June 30, 2023 are summarized as follows:

 

 

 

 

 

 

 

October 1, 2023

 

 

 

Amortized

 

 

Gross

 

 

Gross

 

 

Estimated

 

 

 

Cost / Net

 

 

Unrealized

 

 

Unrealized

 

 

Fair

 

 

 

Carrying Amount

 

 

Gains

 

 

Losses

 

 

Value

 

Held-to-maturity securities:

 

 

 

 

 

 

 

 

 

 

 

 

Fixed income securities:

 

 

 

 

 

 

 

 

 

 

 

 

Corporate bonds

 

$

56,588

 

 

$

3

 

 

$

(85

)

 

$

56,506

 

U.S. treasury bills

 

 

9,944

 

 

 

97

 

 

 

(1

)

 

 

10,040

 

Total held-to-maturity securities

 

$

66,532

 

 

$

100

 

 

$

(86

)

 

$

66,546

 

 

 

 

 

 

 

 

June 30, 2023

 

 

 

Amortized

 

 

Gross

 

 

Gross

 

 

Estimated

 

 

 

Cost / Net

 

 

Unrealized

 

 

Unrealized

 

 

Fair

 

 

 

Carrying Amount

 

 

Gains

 

 

Losses

 

 

Value

 

Held-to-maturity securities:

 

 

 

 

 

 

 

 

 

 

 

 

Fixed income securities:

 

 

 

 

 

 

 

 

 

 

 

 

Corporate bonds

 

$

81,743

 

 

$

1

 

 

$

(160

)

 

$

81,584

 

U.S. treasury bills

 

 

9,817

 

 

 

31