SEGMENT INFORMATION

12 Months Ended

Jun. 30, 2017

SEGMENT INFORMATION

SEGMENT INFORMATION

17. SEGMENT INFORMATION

The Company designs, manufactures, and markets recreational performance boats and prior to July 1, 2015 had two operating and reportable segments: MasterCraft and Hydra-Sports. The Company’s segments are defined by management’s reporting structure, product brands, and distribution channels. The MasterCraft product brand consists of recreational performance boats primarily used for water skiing, wakeboarding and wake surfing, and general recreational boating. The Company distributes the MasterCraft product brand through its dealer network. The Company manufactured Hydra-Sports recreational fishing boats under a contract manufacturing agreement with Hydra-Sports Custom Boats, LLC, an unrelated third party. All sales related to the Hydra-Sports brand were to the unrelated third party. The Company’s chief operating decision maker (“CODM”) regularly reviews the operating performance of each product brand including measures of performance based on income from operations. The Company considers each of the product brands to be an operating segment and has further concluded that presenting disaggregated information of these two operating segments provides meaningful information as certain economic characteristics are dissimilar as well as the characteristics of the customer base served.

On June 30, 2012, the Company sold the trade name, tooling, certain machinery, and finished goods of its Hydra-Sports business to Hydra-Sports Custom Boats, LLC, an unaffiliated third party. The Company concurrently entered into an agreement with the purchaser to contract manufacture a specified number of Hydra-Sports models annually at established prices, using certain of the tooling and machinery assets sold to Hydra-Sports Custom Boats, LLC which remained in use by the Company at the Company’s manufacturing facility for the duration of the manufacturing contract. This manufacturing agreement expired on June 30, 2015 and the Company did not renew it.  The Company determined that this did not have a major effect on its operations and financial results and decided to early adopt FASB issued ASU 2014-08, Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity.

Sales outside of North America accounted for 9.1%,  8.6%, and 10.1% of net sales of the MasterCraft segment for the years ended the years ended June 30, 2017, 2016, and 2015, respectively. The Company has no significant assets, concentration of sales to individual dealers or countries outside of North America during the years ended June 30, 2017 and 2016. All sales for the fiscal year ended June 30, 2015 in the Hydra-Sports segment were domestic.

Management evaluates performance based on business segment operating income. The Company files a consolidated income tax return and does not allocate income taxes and other corporate level expenses including interest to operating segments.

The Company does not maintain separate balance sheets for operating segments because this information is not considered meaningful for decision making as the CODM manages the business on a consolidated basis. All corporate costs are allocated to MasterCraft. All amounts in the accompanying Consolidated Statements of Operations for the years ended June 30, 2017 and 2016 pertain exclusively to the MasterCraft segment.

For the year ended June 30, 2015, the operating information for the reportable segments is as follows:

	MasterCraft		Hydra-Sports		Consolidated
Net sales	$	199,907	$	14,479	$	214,386
Cost of sales		150,622		12,598		163,220
Operating income		21,695		2,225		23,920
Depreciation and amortization		3,169		109		3,278