COMMITMENTS AND CONTINGENCIES

12 Months Ended

Jun. 30, 2017

13. COMMITMENTS AND CONTINGENCIES

The Company leases equipment and warehouse space under operating lease agreements expiring through 2020. Rental expense was $603, $468, and $262 during the years ended June 30, 2017, 2016, and 2015, respectively. Future minimum rental payments under all non-cancelable operating leases with remaining lease terms in excess of one year at June 30, 2017, are as follows:


Fiscal years ending June 30,
2018	$	484
2019		314
2020		114
2021		87
2022		72
and thereafter		11
Total	$	1,082

Under certain conditions, the Company is obligated to repurchase new inventory repossessed from dealerships by financial institutions that provide credit to boat dealerships. Under the terms of these repurchase agreements, the Company is obligated to repurchase inventory repossessed by these financial institutions for a period ranging from 18 months to 30 months from the date of the original sale of the products to the respective dealers. Repossession of products by the financial institutions normally occurs when a dealer goes out of business or defaults with a lender. The maximum obligation of the Company under such floor plan agreements aggregated approximately $94,046 and $88,810 as of June 30, 2017 and 2016, respectively. No units were repurchased for the fiscal year ended June 30, 2017 or June 30, 2016. The Company recorded a liability of $1,008 and $742 as of June 30, 2017 and 2016, respectively, after giving effect to proceeds anticipated to be received from the resale of those products to alternative dealers, and taking into consideration the credit quality of the dealers.

The Company is engaged in an exclusive contract with Ilmor Marine to provide engines for its MasterCraft boats. This contract makes Ilmor Marine the only supplier to MasterCraft for in-board engines and expires June 30, 2019. The Company is obligated to purchase a minimum number of engines during each model year and penalties can be assessed if the Company does not meet the purchase requirements. The Company did not incur any penalties related to engine purchase shortfalls for the years ended June 30, 2017 and 2016. Estimated purchases under the agreement range from approximately $26,000 to $27,000 for each of the years ending June 30, 2018 and 2019.

Future minimum purchase commitments under supply and other agreements are as follows:


Fiscal years ending June 30,
2018	$	1,153
2019		1,153
2020		1,500
2021		—
2022		—
and thereafter		470
Total	$	4,276

The Company is involved in certain claims and legal actions arising in the ordinary course of business. In the opinion of management, the ultimate disposition of these matters is not expected to have a material adverse effect on the Company’s financial condition or results of operations.

On May 2, 2017, the Company reached a resolution of its pending patent litigation with Malibu Boats. The resolution of the litigation included a full release of all claims and counterclaims by the parties. The resolution of the litigation also included a $2.5 million settlement charge, which is included in general and administrative expense in the accompanying consolidated statement of operations, and the Company entering into a license agreement related to certain of Malibu’s patents.