Malibu Boats, Inc. (Nasdaq: MBUU) today announced its financial
results for the fourth quarter and fiscal year ended June 30,
2023.
Fourth Quarter Fiscal 2023
Highlights Compared to Fourth Quarter Fiscal
2022
- Net sales increased 5.4% to $372.3
million
- Unit volume decreased 1.8% to
2,550 units
- Gross profit increased 14.3% to $102.5
million
- General and administrative expenses
increased to $118.0 million primarily due to our settlement of a
litigation matter for $100.0 million, which we expect will be tax
deductible for federal and state income tax purposes
- Net income decreased 136.3% to a net
loss of $18.0 million
- Adjusted EBITDA increased 21.9% to
$90.1 million
- Net income available to Class A Common
Stock per share (diluted) decreased 137.2% to a net loss of $0.86
per share
- Adjusted fully distributed net income
per share increased 22.6% to $2.98 per share on a fully distributed
weighted average share count of 21.3 million shares of
Class A Common Stock
Fiscal Year 2023
Highlights Compared to Fiscal Year
2022
- Net sales increased 14.3% to $1,388.4
million
- Unit volume increased 6.6% to 9,863
units
- Gross profit increased 13.3% to $351.3
million
- General and administrative expenses
increased to $175.7 million primarily due to our settlement of a
litigation matter for $100.0 million, which we expect will be tax
deductible for federal and state income tax purposes
- Net income decreased 34.0% to $107.9
million
- Adjusted EBITDA increased 15.2% to
$284.0 million
- Net income available to Class A Common
Stock per share (diluted) decreased 32.6% to $5.06 per share
- Adjusted fully distributed net income
per share increased 16.2% to $9.19 on a fully distributed weighted
average share count of 21.3 million shares of Class A Common
Stock
“Malibu closed out another solid quarter and fiscal year despite
a challenging environment. For the fiscal year, we delivered a 14%
increase in net sales while improving many of our other financial
and operational metrics. Our financial and operational performance
continues to demonstrate the strength of our business model and
world-class team. We’ve made great strides to meet demand
throughout the fiscal year as we ramped up production through our
first three quarters and reached normalized channel inventories
faster than anticipated. Despite the uncertain macro environment,
we remain confident in our operational prowess to match wholesale
and retail demand and provide what we believe are the highest
quality boats on the market,” commented Jack Springer, Chief
Executive Officer of Malibu Boats, Inc.
“We continue our focus to deliver innovative and premium boats
for all of our brands. Our Model Year 2024 lineup continues to
raise the bar as we introduce four new boats to the market in the
Malibu and Axis brands. These models include the new and improved
23 LSV, the best-selling towboat in history, as well as our new
M242, which offers next-level premium features and performance. In
addition, we are introducing two to four new models for each of our
other brands in fiscal year 2024. Our actions have allowed us to
maintain our leading positions in the markets we serve, and we will
continue to invest in products that make us one of the strongest
players in the marine industry,” continued Mr. Springer. “As we set
our sights on fiscal year 2024, we will remain disciplined in
executing our vertical integration strategy, and we believe that
our superior execution will allow us to successfully navigate any
choppy waters we face and extend our industry-leading position to
create long-term value for our shareholders.”
Results of Operations for the Fourth Quarter and Fiscal
Year 2023
(Unaudited)
|
|
Three Months Ended June 30, |
|
Fiscal Year Ended June 30, |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
|
|
|
|
|
|
|
|
|
(In thousands, except unit and per unit data) |
Net Sales |
|
$ |
372,303 |
|
|
$ |
353,206 |
|
|
$ |
1,388,365 |
|
|
$ |
1,214,877 |
|
Gross Profit |
|
$ |
102,462 |
|
|
$ |
89,627 |
|
|
$ |
351,295 |
|
|
$ |
310,051 |
|
Gross Profit Margin |
|
|
27.5 |
% |
|
|
25.4 |
% |
|
|
25.3 |
% |
|
|
25.5 |
% |
Net (Loss) Income |
|
$ |
(18,043 |
) |
|
$ |
49,685 |
|
|
$ |
107,910 |
|
|
$ |
163,430 |
|
Net (Loss) Income Margin |
|
|
(4.9 |
)% |
|
|
14.1 |
% |
|
|
7.8 |
% |
|
|
13.5 |
% |
Adjusted EBITDA |
|
$ |
90,099 |
|
|
$ |
73,901 |
|
|
$ |
284,036 |
|
|
$ |
246,529 |
|
Adjusted EBITDA Margin |
|
|
24.2 |
% |
|
|
20.9 |
% |
|
|
20.5 |
% |
|
|
20.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comparison of the Fourth Quarter Ended
June 30, 2023 to the Fourth Quarter
Ended June 30, 2022
Net sales for the three months ended June 30, 2023
increased $19.1 million, or 5.4%, to $372.3 million, compared to
the three months ended June 30, 2022. The increase in net
sales was driven primarily by increased unit volumes in our
Saltwater Fishing segment and a favorable model mix across all
segments, partially offset by lower unit volumes in the Malibu and
Cobalt segments and by increased dealer flooring program costs in
the Malibu segment resulting from higher interest rates and
increased inventory levels. Unit volume for the three months ended
June 30, 2023 decreased 46 units, or 1.8%, to 2,550 units
compared to the three months ended June 30, 2022. Our unit
volume decreased primarily due to reduced wholesale restocking
demand at our Malibu and Cobalt segments as channel inventory
normalized to pre-COVID levels combined with lower retail activity,
partially offset by strong wholesale restocking demand in our
Saltwater Fishing segment.
Net sales attributable to our Malibu segment decreased $16.7
million, or 9.4%, to $160.3 million for the three
months ended June 30, 2023 compared to the three months ended
June 30, 2022. Unit volumes attributable to our Malibu segment
decreased 225 units, or 15.2%, for the three months ended
June 30, 2023 compared to the three months ended June 30,
2022. The decrease in net sales was driven by a decrease in units
and increased dealer flooring program costs, partially offset by a
favorable model mix.
Net sales attributable to our Saltwater Fishing segment
increased $32.4 million, or 33.6%, to $128.7 million, for the three
months ended June 30, 2023, compared to the three months ended
June 30, 2022. Unit volumes increased 196 units, or 37.0% for
the three months ended June 30, 2023 compared to the three
months ended June 30, 2022. The increase in net sales was
driven by increased units, inflation-driven year-over-year price
increases and a favorable model mix.
Net sales attributable to our Cobalt segment increased $3.4
million, or 4.3%, to $83.3 million for the three months ended
June 30, 2023 compared to the three months ended June 30,
2022. Unit volumes attributable to Cobalt decreased 17 units, or
2.9% for the three months ended June 30, 2023 compared to the
three months ended June 30, 2022. The increase in net sales
was driven by a favorable model mix and partially offset by
decreased unit volume.
Overall consolidated net sales per unit
increased 7.3% to $146,001 per unit for the three months
ended June 30, 2023 compared to the three months ended
June 30, 2022. Net sales per unit for our Malibu segment
increased 6.8% to $127,966 per unit for the three
months ended June 30, 2023 compared to the three months ended
June 30, 2022, driven by a favorable model mix, partially
offset by increased dealer flooring program costs. Net sales per
unit for our Saltwater Fishing segment decreased 2.5% to $177,241
for the three months ended June 30, 2023 compared to the three
months ended June 30, 2022, driven by an unfavorable model
mix, partially offset by inflation-driven year-over-year price
increases. Net sales per unit for our Cobalt segment increased 7.4%
to $145,856 per unit for the three months ended June 30, 2023
compared to the three months ended June 30, 2022, driven a
favorable model mix.
Cost of sales for the three months ended June 30, 2023
increased $6.3 million, or 2.4%, to $269.8 million as compared to
the three months ended June 30, 2022. The increase in cost of
sales was primarily driven by a mix shift to Saltwater Fishing and
increased component costs. In the Malibu segment, while we
experienced higher per unit material and labor costs, the volume
decrease more than offset the $2.6 million increase in cost of
sales related to higher per unit rates. Within our Saltwater
Fishing segment, lower per unit material and labor costs improved
$6.3 million but were offset by an increase in materials usage in
line with increased units and sales. In the Cobalt segment, higher
per unit material and labor costs contributed $3.6 million to the
increase in cost of sales and were driven by increased prices due
to inflationary pressures and by an increased mix of larger models
that corresponded with higher net sales per unit, partially offset
by a decrease in unit volume.
Gross profit for the three months ended June 30, 2023
increased $12.8 million, or 14.3%, to $102.5 million compared to
the three months ended June 30, 2022. The increase in gross
profit was driven primarily by higher sales revenue partially
offset by the increased cost of sales due to higher per unit
material and labor cost. Gross margin for the three months ended
June 30, 2023 increased 210 basis points from 25.4% to 27.5%,
driven by overall better performance in the Saltwater Fishing
segment.
Selling and marketing expenses for the three months ended
June 30, 2023 increased $0.1 million, or 1.8%, to $5.4 million
compared to the three months ended June 30, 2022. The increase
was driven primarily by an increase in travel and promotional
events for the three months ended June 30, 2023 as compared to
the three months ended June 30, 2022. As a percentage of
sales, selling and marketing expenses remained flat at 1.5% for the
three months ended June 30, 2023 as compared to the three
months ended June 30, 2022. General and administrative
expenses for the three months ended June 30, 2023 increased
$100.8 million, or 587.3%, to $118.0 million as compared to the
three months ended June 30, 2022. The increase in general and
administrative expenses was driven primarily by the settlement of
product liability cases for $100.0 million during the three months
ended June 30, 2023. In addition, the increase in general and
administrative expenses was driven by an increase in compensation
and personnel-related expenses. As a percentage of sales, general
and administrative expenses increased 26.8% to 31.7% for the three
months ended June 30, 2023 compared to the three months ended
June 30, 2022, almost entirely due to the settlement of
product liability cases discussed above. Amortization expense
remained flat at $1.7 million for the three months ended
June 30, 2023 as compared to the three months ended
June 30, 2022.
Operating income for the three months ended June 30, 2023
decreased to an operating loss of $22.6 million from operating
income of $65.4 million for the three months ended June 30,
2022. Net income for the three months ended June 30, 2023
decreased 136.3% to a net loss of $18.0 million from a net income
of $49.7 million and net income margin decreased to (4.9)% from
14.1% for the three months ended June 30, 2022. Adjusted
EBITDA for the three months ended June 30, 2023 increased
21.9% to $90.1 million from $73.9 million, while Adjusted EBITDA
margin increased to 24.2% from 20.9% for the three months ended
June 30, 2022.
Comparison of the Fiscal Year Ended
June 30, 2023 to the Fiscal Year
Ended June 30, 2022
Net sales for fiscal year 2023 increased $173.5 million, or
14.3%, to $1,388.4 million, compared to fiscal year 2022. The
increase in net sales was driven primarily by increased unit
volumes in our Saltwater Fishing and Cobalt segments, a favorable
model mix across all segments and inflation-driven year-over-year
price increases across all segments, partially offset by lower unit
volumes in the Malibu segment and increased dealer flooring program
costs across all segments resulting from higher interest rates and
increased inventory levels. Unit volume for fiscal year 2023
increased 608 units, or 6.6%, to 9,863 units compared to fiscal
year 2022. Our unit volume increased primarily due to strong
wholesale restocking demand across our Cobalt and Saltwater Fishing
segments, partially offset by reduced wholesale restocking demand
at our Malibu segment.
Net sales attributable to our Malibu segment
increased $28.7 million, or 4.7%, to $636.2
million for fiscal year 2023 compared to fiscal year 2022.
Unit volumes attributable to our Malibu segment
decreased 46 units for fiscal year 2023 compared to
fiscal year 2022. The increase in net sales was driven by
inflation-driven year-over-year price increases and a favorable
model mix, partially offset by lower unit volumes and increased
dealer flooring program costs.
Net sales attributable to our Saltwater Fishing segment
increased $107.2 million, or 31.4%, to $449.2 million for fiscal
year 2023 compared to fiscal year 2022. Unit volumes increased 550
units for fiscal year 2023 compared to fiscal year 2022. The
increase in net sales was driven by increased volume,
inflation-driven year-over-year price increases and a favorable
model mix, partially offset by increased dealer flooring program
costs.
Net sales attributable to our Cobalt segment increased $37.6
million, or 14.2%, to $303.0 million for fiscal year 2023 compared
to fiscal year 2022. Unit volumes attributable to Cobalt increased
104 units for fiscal year 2023 compared to fiscal year 2022. The
increase in net sales was driven by increased volume,
inflation-driven year-over-year price increases and a favorable
model mix, partially offset by increased dealer flooring program
costs.
Overall consolidated net sales per unit
increased 7.2% to $140,765 per unit for fiscal
year 2023 compared to fiscal year 2022. Net sales per unit for our
Malibu segment increased 5.7% to $124,097 per unit
for fiscal year 2023 compared to fiscal year 2022, driven by
inflation-driven year-over-year price increases and a favorable
model mix, partially offset by increased dealer flooring program
costs. Net sales per unit for our Saltwater Fishing segment
increased 3.4% to $173,755 per unit for fiscal year 2023 compared
to fiscal year 2022, driven by inflation-driven year-over-year
price increases, partially offset by increased dealer flooring
program costs and a unfavorable model mix. Net sales per unit for
our Cobalt segment increased 8.6% to $140,847 per unit for fiscal
year 2023 compared to fiscal year 2022, driven by inflation-driven
year-over-year price increases and a favorable model mix, partially
offset by increased dealer flooring program costs.
Cost of sales for fiscal year 2023 increased $132.2 million, or
14.6%, to $1,037.1 million compared to fiscal year 2022. The
increase in cost of sales was primarily driven by a 6.6% increase
in volumes and increased prices due to inflationary pressures that
have impacted prices on parts and components. In the Malibu
segment, higher per unit material and labor costs contributed $19.1
million to the increase in cost of sales and were driven by
increased prices due to inflationary pressures. In the Saltwater
Fishing segment, higher per unit material and labor costs
contributed $2.2 million to the increase in cost of sales and were
driven by increased prices due to inflationary pressures and an
increased mix of larger models that corresponded with higher net
sales per unit. In the Cobalt segment, higher per unit material and
labor costs contributed $19.7 million to the increase in cost of
sales and were driven by increased prices due to inflationary
pressures and an increased mix of larger models that corresponded
with higher net sales per unit.
Gross profit for fiscal year 2023 increased $41.2 million, or
13.3%, compared to fiscal year 2022. The increase in gross profit
was driven primarily by higher sales revenue partially offset by
the increased cost of sales for the reasons noted above. Gross
margin for fiscal year 2023 decreased 0.2% from 25.5% to 25.3%
driven primarily by an increased mix of the Saltwater Fishing
segment and increased dealer flooring program costs and partially
offset by better year-over-year performance in our Saltwater
Fishing segment.
Selling and marketing expense for fiscal year 2023 increased
$1.1 million, or 4.8% to $24.0 million compared to fiscal year
2022. The increase was driven primarily by increased promotional
events. As a percentage of sales, selling and marketing expense
decreased 0.2% to 1.7% for fiscal year 2023 compared to 1.9%
for fiscal year 2022. General and administrative expense for fiscal
year 2023 increased $109.3 million, or 164.7%, to $175.7 million
compared to fiscal year 2022. The increase in general and
administrative expenses was driven primarily by the settlement of
product liability cases for $100.0 million in June 2023. The
remaining increase in general and administrative expenses was
driven by an increase in compensation and personnel-related
expenses, an increase in legal and professional fees and an
increase in travel related expenses. As a percentage of sales,
general and administrative expenses increased 7.3% to 12.7% for
fiscal year 2023 compared to 5.4% for fiscal year 2022.
Amortization expense for fiscal year 2023 decreased $0.1 million,
or 2.1%, to $6.8 million compared to fiscal year 2022 due to a
decrease of amortization expense related to fully amortized
intangibles.
Operating income for fiscal year 2023 decreased to $144.8
million from $213.8 million for fiscal year 2022. Net income for
fiscal year 2023 decreased 34.0% to $107.9 million from $163.4
million and net income margin decreased to 7.8% for fiscal year
2023 from 13.5% for fiscal year 2022. Adjusted EBITDA for fiscal
year 2023 increased 15.2% to $284.0 million from $246.5 million,
while Adjusted EBITDA margin increased to 20.5% for fiscal year
2023 from 20.3% for fiscal year 2022.
Fiscal 2024 Guidance
For the full fiscal year 2024, Malibu anticipates net sales
decline percentage in the mid-to-high teens year-over-year and
Adjusted EBITDA margin down 300-400 basis points
year-over-year.
The Company has not provided reconciliations of guidance for
Adjusted EBITDA margin, in reliance on the unreasonable efforts
exception provided under Item 10(e)(1)(i)(B) of Regulation S-K. The
Company is unable, without unreasonable efforts, to forecast
certain items required to develop meaningful comparable GAAP
financial measures. These items include acquisition and integration
related expenses, costs related to the Company’s vertical
integration initiatives and litigation expenses that are difficult
to predict in advance in order to include in a GAAP estimate.
Webcast and Conference Call InformationThe
Company will host a webcast and conference call to discuss fourth
quarter and fiscal year 2023 results on Tuesday, August 29,
2023, at 8:30 a.m. Eastern Time. Investors and analysts can
participate on the conference call by dialing (833) 630-1956 or
(412) 317-1837 and requesting Malibu Boats. Alternatively,
interested parties can listen to a live webcast of the conference
call by logging on to the Investor Relations section on the
Company’s website at http://investors.malibuboats.com. A replay of
the webcast will also be archived on the Company’s website for
twelve months.
About Malibu Boats, Inc.
Based in Loudon, Tennessee, Malibu Boats, Inc. (MBUU) is a
leading designer, manufacturer and marketer of a diverse range of
recreational powerboats, including performance sport, sterndrive
and outboard boats. Malibu Boats, Inc. is the market leader in the
performance sport boat category through its Malibu and Axis boat
brands, the leader in the 20’ - 40’ segment of the sterndrive boat
category through its Cobalt brand, and in a leading position in the
saltwater fishing boat market with its Pursuit and Cobia offshore
boats and Pathfinder, Maverick, and Hewes flats and bay boat
brands. A pre-eminent innovator in the powerboat industry, Malibu
Boats, Inc. designs products that appeal to an expanding range of
recreational boaters, fisherman and water sports enthusiasts whose
passion for boating is a key component of their active lifestyles.
For more information, visit www.malibuboats.com, www.axiswake.com,
www.cobaltboats.com, www.pursuitboats.com, or
www.maverickboatgroup.com.
Non-GAAP Financial Measures
This release includes the following financial measures defined
as non-GAAP financial measures by the Securities and Exchange
Commission: Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Fully
Distributed Net Income and Adjusted Fully Distributed Net Income
per Share. These measures have limitations as analytical tools and
should not be considered as an alternative to, or more meaningful
than, net income as determined in accordance with U.S. generally
accepted accounting principles (“GAAP”) or as an indicator of our
liquidity. Our presentation of these non-GAAP financial measures
should also not be construed as an inference that our results will
be unaffected by unusual or non-recurring items. Our computations
of these non-GAAP financial measures may not be comparable to other
similarly titled measures of other companies.
We define Adjusted EBITDA as net income before interest expense,
income taxes, depreciation, amortization and non-cash,
non-recurring or non-operating expenses, including settlement of
litigation claims, 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 as determined by GAAP. Management believes Adjusted
EBITDA and Adjusted EBITDA Margin allow investors to evaluate our
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 exclude the items listed above from net
income in arriving at Adjusted EBITDA because these amounts can
vary substantially from company to company within our industry
depending upon accounting methods and book values of assets,
capital structures, the methods by which assets were acquired and
other factors.
Certain items excluded from Adjusted EBITDA are significant
components in understanding and assessing a company’s financial
performance, such as a company’s cost of capital and tax structure,
as well as the historical costs of depreciable assets.
We define Adjusted Fully Distributed Net Income as net income
attributable to Malibu Boats, Inc. (i) excluding income tax
expense, (ii) excluding the effect of non-recurring or non-cash
items, (iii) assuming the exchange of all LLC units into shares of
Class A Common Stock, which results in the elimination of
non-controlling interest in Malibu Boats Holdings, LLC (the "LLC"),
and (iv) reflecting an adjustment for income tax expense on fully
distributed net income before income taxes at our estimated
effective income tax rate. Adjusted Fully Distributed Net Income is
a non-GAAP financial measure because it represents net income
attributable to Malibu Boats, Inc., before non-recurring or
non-cash items and the effects of non-controlling interests in the
LLC. We use Adjusted Fully Distributed Net Income to facilitate a
comparison of our operating performance on a consistent basis from
period to period that, when viewed in combination with our results
prepared in accordance with GAAP, provides a more complete
understanding of factors and trends affecting our business than
GAAP measures alone. We believe Adjusted Fully Distributed Net
Income assists our board of directors, management and investors in
comparing our net income on a consistent basis from period to
period because it removes non-cash or non-recurring items, and
eliminates the variability of non-controlling interest as a result
of member owner exchanges of LLC units into shares of Class A
Common Stock. In addition, because Adjusted Fully Distributed Net
Income is susceptible to varying calculations, the Adjusted Fully
Distributed Net Income measures, as presented in this release, may
differ from and may, therefore, not be comparable to similarly
titled measures used by other companies.
A reconciliation of our net income as determined in accordance
with GAAP to Adjusted EBITDA and the numerator and denominator for
our net income available to Class A Common Stock per share to
Adjusted Fully Distributed Net Income per share of Class A Common
Stock is provided under "Reconciliation of Non-GAAP Financial
Measures".
Cautionary Statement Concerning Forward Looking
Statements
This press release includes forward-looking statements (as such
term is defined in the Private Securities Litigation Reform Act of
1995). Forward-looking statements can be identified by such words
and phrases as “believes,” “anticipates,” “expects,” “intends,”
“estimates,” “may,” “will,” “should,” “continue” and similar
expressions, comparable terminology or the negative thereof, and
includes statements in this press release regarding trends toward
larger, more custom boats; expected strong retail demand; and the
introduction of new boat models for model year 2024.
Forward-looking statements are subject to risks and
uncertainties that could cause actual results to differ materially
from those expressed or implied in the forward-looking statements,
including, but not limited to: general industry, economic and
business conditions; our ability to execute our manufacturing
strategy successfully; our large fixed cost base; increases in the
cost of, or unavailability of, raw materials, component parts and
transportation costs; disruptions in our suppliers’ operations; our
reliance on third-party suppliers for raw materials and components
and any interruption of our informal supply arrangements; our
reliance on certain suppliers for our engines and outboard motors;
our ability to meet our manufacturing workforce needs; exposure to
workers' compensation claims and other workplace liabilities; our
ability to grow our business through acquisitions and integrate
such acquisitions to fully realize their expected benefits; our
growth strategy which may require us to secure significant
additional capital; our ability to protect our intellectual
property; disruptions to our network and information systems; our
success at developing and implementing a new enterprise resource
planning system; risks inherent in operating in foreign
jurisdictions; a natural disaster, global pandemic or other
disruption at our manufacturing facilities; increases in income tax
rates or changes in income tax laws; our dependence on key
personnel; our ability to enhance existing products and market new
or enhanced products; the continued strength of our brands; the
seasonality of our business; intense competition within our
industry; increased consumer preference for used boats or the
supply of new boats by competitors in excess of demand; competition
with other activities for consumers’ scarce leisure time; changes
in currency exchange rates; inflation and increases in interest
rates; an increase in energy and fuel costs; our reliance on our
network of independent dealers and increasing competition for
dealers; the financial health of our dealers and their continued
access to financing; our obligation to repurchase inventory of
certain dealers; our exposure to claims for product liability and
warranty claims; changes to U.S. trade policy, tariffs and
import/export regulations; any failure to comply with laws and
regulations including environmental, workplace safety and other
regulatory requirements; our holding company structure; covenants
in our credit agreement governing our revolving credit facility
which may limit our operating flexibility; our variable rate
indebtedness which subjects us to interest rate risk; our
obligation to make certain payments under a tax receivables
agreement; and any failure to maintain effective internal control
over financial reporting or disclosure controls or procedures; and
other factors affecting us detailed from time to time in our
filings with the Securities and Exchange Commission. Many of these
risks and uncertainties are outside our control, and there may be
other risks and uncertainties which we do not currently anticipate
because they relate to events and depend on circumstances that may
or may not occur in the future.
Although we believe that the expectations reflected in any
forward-looking statements are based on reasonable assumptions at
the time made, we can give no assurance that our expectations will
be achieved. Undue reliance should not be placed on these
forward-looking statements, which speak only as of the date hereof.
We undertake no obligation (and we expressly disclaim any
obligation) to update or supplement any forward-looking statements
that may become untrue because of subsequent events, whether
because of new information, future events, changes in assumptions
or otherwise. Comparison of results for current and prior periods
are not intended to express any future trends or indications of
future performance, unless expressed as such, and should only be
viewed as historical data.
Investor Contacts
Malibu Boats, Inc.David BlackInterim Chief Financial
Officer(865) 458-5478InvestorRelations@MalibuBoats.com
MALIBU BOATS, INC. AND
SUBSIDIARIES
Condensed Consolidated Statements of
Operations and Comprehensive Income (Unaudited)(In
thousands, except share and per share data)
|
Three Months Ended June 30, |
|
Fiscal Year Ended June 30, |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Net sales |
$ |
372,303 |
|
|
$ |
353,206 |
|
|
$ |
1,388,365 |
|
|
$ |
1,214,877 |
|
Cost of sales |
|
269,841 |
|
|
|
263,579 |
|
|
|
1,037,070 |
|
|
|
904,826 |
|
Gross profit |
|
102,462 |
|
|
|
89,627 |
|
|
|
351,295 |
|
|
|
310,051 |
|
Operating expenses: |
|
|
|
|
|
|
|
Selling and marketing |
|
5,449 |
|
|
|
5,352 |
|
|
|
24,009 |
|
|
|
22,900 |
|
General and
administrative |
|
117,962 |
|
|
|
17,164 |
|
|
|
175,694 |
|
|
|
66,371 |
|
Amortization |
|
1,697 |
|
|
|
1,700 |
|
|
|
6,808 |
|
|
|
6,957 |
|
Operating (loss) income |
|
(22,646 |
) |
|
|
65,411 |
|
|
|
144,784 |
|
|
|
213,823 |
|
Other expense (income),
net: |
|
|
|
|
|
|
|
Other expense, net |
|
178 |
|
|
|
1,016 |
|
|
|
331 |
|
|
|
983 |
|
Interest expense |
|
118 |
|
|
|
885 |
|
|
|
2,962 |
|
|
|
2,875 |
|
Other expense, net |
|
296 |
|
|
|
1,901 |
|
|
|
3,293 |
|
|
|
3,858 |
|
(Loss) Income before provision
for income taxes |
|
(22,942 |
) |
|
|
63,510 |
|
|
|
141,491 |
|
|
|
209,965 |
|
(Benefit) provision for income
taxes |
|
(4,899 |
) |
|
|
13,825 |
|
|
|
33,581 |
|
|
|
46,535 |
|
Net (loss) income |
|
(18,043 |
) |
|
|
49,685 |
|
|
|
107,910 |
|
|
|
163,430 |
|
Net (loss) income attributable
to non-controlling interest |
|
(623 |
) |
|
|
1,766 |
|
|
|
3,397 |
|
|
|
5,798 |
|
Net (loss) income attributable to Malibu Boats, Inc. |
$ |
(17,420 |
) |
|
$ |
47,919 |
|
|
$ |
104,513 |
|
|
$ |
157,632 |
|
|
|
|
|
|
|
|
|
Comprehensive
income: |
|
|
|
|
|
|
|
Net (loss) income |
$ |
(18,043 |
) |
|
$ |
49,685 |
|
|
$ |
107,910 |
|
|
$ |
163,430 |
|
Other comprehensive (loss)
income: |
|
|
|
|
|
|
|
Change in cumulative translation adjustment |
|
(213 |
) |
|
|
(1,882 |
) |
|
|
(833 |
) |
|
|
(1,868 |
) |
Other comprehensive (loss)
income |
|
(213 |
) |
|
|
(1,882 |
) |
|
|
(833 |
) |
|
|
(1,868 |
) |
Comprehensive (loss) income |
|
(18,256 |
) |
|
|
47,803 |
|
|
|
107,077 |
|
|
|
161,562 |
|
Less: comprehensive (loss)
income attributable to non-controlling interest |
|
(630 |
) |
|
|
1,699 |
|
|
|
3,371 |
|
|
|
5,731 |
|
Comprehensive (loss) income attributable to Malibu Boats, Inc., net
of tax |
$ |
(17,626 |
) |
|
$ |
46,104 |
|
|
$ |
103,706 |
|
|
$ |
155,831 |
|
|
|
|
|
|
|
|
|
Weighted average
shares outstanding used in computing net income per
share: |
|
|
|
|
|
|
|
Basic |
|
20,611,175 |
|
|
|
20,466,800 |
|
|
|
20,501,844 |
|
|
|
20,749,237 |
|
Diluted |
|
20,611,175 |
|
|
|
20,651,031 |
|
|
|
20,641,173 |
|
|
|
20,986,256 |
|
Net income available
to Class A Common Stock per share: |
|
|
|
|
|
|
|
Basic |
$ |
(0.86 |
) |
|
$ |
2.34 |
|
|
$ |
5.10 |
|
|
$ |
7.60 |
|
Diluted |
$ |
(0.86 |
) |
|
$ |
2.31 |
|
|
$ |
5.06 |
|
|
$ |
7.51 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MALIBU BOATS, INC. AND
SUBSIDIARIES
Condensed Consolidated Balance Sheets
(Unaudited)(In thousands, except share and per
share data)
|
June 30, 2023 |
|
June 30, 2022 |
Assets |
|
|
|
Current assets |
|
|
|
Cash |
$ |
78,937 |
|
|
$ |
83,744 |
|
Trade receivables, net |
|
68,381 |
|
|
|
51,598 |
|
Inventories, net |
|
171,189 |
|
|
|
157,002 |
|
Prepaid expenses and other current assets |
|
7,827 |
|
|
|
6,155 |
|
Total current assets |
|
326,334 |
|
|
|
298,499 |
|
Property, plant and equipment,
net |
|
204,792 |
|
|
|
170,718 |
|
Goodwill |
|
100,577 |
|
|
|
100,804 |
|
Other intangible assets,
net |
|
221,458 |
|
|
|
228,304 |
|
Deferred tax asset |
|
62,573 |
|
|
|
42,314 |
|
Other assets |
|
10,190 |
|
|
|
10,687 |
|
Total assets |
$ |
925,924 |
|
|
$ |
851,326 |
|
Liabilities |
|
|
|
Current liabilities |
|
|
|
Current maturities of long-term debt |
$ |
— |
|
|
$ |
1,563 |
|
Accounts payable |
|
40,402 |
|
|
|
44,368 |
|
Accrued expenses |
|
187,078 |
|
|
|
87,742 |
|
Income taxes and tax distribution payable |
|
847 |
|
|
|
1,670 |
|
Payable pursuant to tax receivable agreement, current portion |
|
4,111 |
|
|
|
3,958 |
|
Total current liabilities |
|
232,438 |
|
|
|
139,301 |
|
Deferred tax liabilities |
|
28,453 |
|
|
|
26,965 |
|
Other liabilities |
|
9,926 |
|
|
|
11,855 |
|
Payable pursuant to tax
receivable agreement, less current portion |
|
39,354 |
|
|
|
41,583 |
|
Long-term debt |
|
— |
|
|
|
118,054 |
|
Total liabilities |
|
310,171 |
|
|
|
337,758 |
|
Stockholders'
Equity |
|
|
|
Class A Common Stock, par
value $0.01 per share, 100,000,000 shares authorized; 20,603,822
shares issued and outstanding as of June 30, 2023; 20,501,081
shares issued and outstanding as of June 30, 2022 |
|
204 |
|
|
|
203 |
|
Class B Common Stock, par
value $0.01 per share, 25,000,000 shares authorized; 12 shares
issued and outstanding as of June 30, 2023; 10 shares issued
and outstanding as of June 30, 2022 |
|
— |
|
|
|
— |
|
Preferred Stock, par value
$0.01 per share; 25,000,000 shares authorized; no shares issued and
outstanding as of June 30, 2023; no shares issued and
outstanding as of June 30, 2022 |
|
— |
|
|
|
— |
|
Additional paid in
capital |
|
86,321 |
|
|
|
85,294 |
|
Accumulated other
comprehensive loss, net of tax |
|
(4,340 |
) |
|
|
(3,507 |
) |
Accumulated earnings |
|
525,697 |
|
|
|
421,184 |
|
Total stockholders' equity attributable to Malibu
Boats, Inc. |
|
607,882 |
|
|
|
503,174 |
|
Non-controlling interest |
|
7,871 |
|
|
|
10,394 |
|
Total stockholders’ equity |
|
615,753 |
|
|
|
513,568 |
|
Total liabilities and stockholders' equity |
$ |
925,924 |
|
|
$ |
851,326 |
|
|
|
|
|
|
|
|
|
MALIBU BOATS, INC. AND
SUBSIDIARIES
Reconciliation of Non-GAAP Financial
Measures
Reconciliation of Net (Loss) Income to Non-GAAP Adjusted
EBITDA and Adjusted EBITDA Margin (Unaudited):
The following table sets forth a reconciliation of net (loss)
income as determined in accordance with GAAP to Adjusted EBITDA and
Adjusted EBITDA Margin for the periods indicated (dollars in
thousands):
|
Three Months Ended June 30, |
|
Fiscal Year Ended June 30, |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Net (loss) income |
$ |
(18,043 |
) |
|
$ |
49,685 |
|
|
$ |
107,910 |
|
|
$ |
163,430 |
|
(Benefit) provision for income
taxes |
|
(4,899 |
) |
|
|
13,825 |
|
|
|
33,581 |
|
|
|
46,535 |
|
Interest expense |
|
118 |
|
|
|
885 |
|
|
|
2,962 |
|
|
|
2,875 |
|
Depreciation |
|
5,765 |
|
|
|
4,986 |
|
|
|
21,912 |
|
|
|
19,365 |
|
Amortization |
|
1,697 |
|
|
|
1,700 |
|
|
|
6,808 |
|
|
|
6,957 |
|
Litigation settlement 1 |
|
100,000 |
|
|
|
— |
|
|
|
100,000 |
|
|
|
— |
|
Professional fees 2 |
|
4,781 |
|
|
|
— |
|
|
|
4,781 |
|
|
|
— |
|
Stock-based compensation
expense 3 |
|
492 |
|
|
|
1,795 |
|
|
|
5,894 |
|
|
|
6,342 |
|
Adjustments to tax receivable
agreement liability 4 |
|
188 |
|
|
|
1,025 |
|
|
|
188 |
|
|
|
1,025 |
|
Adjusted EBITDA |
$ |
90,099 |
|
|
$ |
73,901 |
|
|
$ |
284,036 |
|
|
$ |
246,529 |
|
Net Sales |
$ |
372,303 |
|
|
$ |
353,206 |
|
|
$ |
1,388,365 |
|
|
$ |
1,214,877 |
|
Net (Loss) Income Margin 5 |
|
(4.9 |
)% |
|
|
14.1 |
% |
|
|
7.8 |
% |
|
|
13.5 |
% |
Adjusted EBITDA Margin 5 |
|
24.2 |
% |
|
|
20.9 |
% |
|
|
20.5 |
% |
|
|
20.3 |
% |
(1) |
|
Represents settlement of product liability cases in June 2023 for
$100.0 million. |
(2) |
|
For the fiscal year 2023, represents legal and advisory fees
related to our product liability cases that were settled for $100.0
million in June 2023. |
(3) |
|
Represents equity-based incentives awarded to certain of our
employees under the Malibu Boats, Inc. Long-Term Incentive Plan and
profit interests issued under the previously existing limited
liability company agreement of the LLC. |
(4) |
|
For the three months and fiscal year ended June 30, 2023, we
recognized other expense from an adjustment in our tax receivable
agreement liability mainly derived by future benefits from
Tennessee net operating losses at Malibu Boats, Inc. For the three
months and fiscal year ended June 30, 2022, we recognized other
expense from an adjustment in our tax receivable agreement
liability due to an increase in the state tax rate used in
computing our future tax obligations and in turn, an increase in
the future benefit we expect to pay under our tax receivable
agreement with pre-IPO owners. |
(5) |
|
We calculate net (loss) income margin as net (loss) income divided
by net sales and we define adjusted EBITDA margin as adjusted
EBITDA divided by net sales. |
|
|
|
Reconciliation of Non-GAAP Adjusted Fully Distributed
Net Income (Unaudited):
The following table shows the reconciliation of the numerator
and denominator for net (loss) income available to Class A Common
Stock per share to Adjusted Fully Distributed Net Income per Share
of Class A Common Stock for the periods presented (in thousands
except share and per share data):
|
|
Three Months Ended June 30, |
|
Fiscal Year Ended June 30, |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Reconciliation of
numerator for net (loss) income available to Class A Common Stock
per share to Adjusted Fully Distributed Net Income per Share of
Class A Common Stock: |
|
|
|
|
|
|
|
|
Net (loss) income attributable
to Malibu Boats, Inc. |
|
$ |
(17,420 |
) |
|
$ |
47,919 |
|
|
$ |
104,513 |
|
|
$ |
157,632 |
|
(Benefit) provision for income
taxes |
|
|
(4,899 |
) |
|
|
13,825 |
|
|
|
33,581 |
|
|
|
46,535 |
|
Litigation settlement 1 |
|
|
100,000 |
|
|
|
— |
|
|
|
100,000 |
|
|
|
— |
|
Professional fees 2 |
|
|
4,781 |
|
|
|
— |
|
|
|
4,781 |
|
|
|
— |
|
Acquisition and integration
related expenses 3 |
|
|
1,659 |
|
|
|
1,658 |
|
|
|
6,654 |
|
|
|
6,653 |
|
Stock-based compensation
expense 4 |
|
|
492 |
|
|
|
1,795 |
|
|
|
5,894 |
|
|
|
6,342 |
|
Adjustments to tax receivable
agreement liability 5 |
|
|
188 |
|
|
|
1,025 |
|
|
|
188 |
|
|
|
1,025 |
|
Net (loss) income attributable
to non-controlling interest 6 |
|
|
(623 |
) |
|
|
1,766 |
|
|
|
3,397 |
|
|
|
5,798 |
|
Fully distributed net income
before income taxes |
|
|
84,178 |
|
|
|
67,988 |
|
|
|
259,008 |
|
|
|
223,985 |
|
Income tax expense on fully
distributed income before income taxes 7 |
|
|
20,455 |
|
|
|
16,181 |
|
|
|
62,939 |
|
|
|
53,308 |
|
Adjusted fully distributed net
income |
|
$ |
63,723 |
|
|
$ |
51,807 |
|
|
$ |
196,069 |
|
|
$ |
170,677 |
|
|
|
Three Months Ended June 30, |
|
Fiscal Year Ended June 30, |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Reconciliation of
denominator for net (loss) income available to Class A Common Stock
per share to Adjusted Fully Distributed Net Income per Share of
Class A Common Stock: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares
outstanding of Class A Common Stock used for basic net income per
share: |
|
|
20,611,175 |
|
|
|
20,466,800 |
|
|
|
20,501,844 |
|
|
|
20,749,237 |
|
Adjustments to weighted
average shares of Class A Common Stock: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average LLC units held by non-controlling unit holders
8 |
|
|
455,919 |
|
|
|
600,919 |
|
|
|
543,909 |
|
|
|
600,919 |
|
Weighted-average unvested restricted stock awards issued to
management 9 |
|
|
258,655 |
|
|
|
268,387 |
|
|
|
272,116 |
|
|
|
252,135 |
|
Adjusted weighted average
shares of Class A Common Stock outstanding used in computing
Adjusted Fully Distributed Net Income per Share of Class A Common
Stock: |
|
|
21,325,749 |
|
|
|
21,336,106 |
|
|
|
21,317,869 |
|
|
|
21,602,291 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following table shows the reconciliation of net (loss)
income available to Class A Common Stock per share to Adjusted
Fully Distributed Net Income per Share of Class A Common Stock for
the periods presented:
|
|
Three Months Ended June 30, |
|
Fiscal Year Ended June 30, |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Net (loss) income available to
Class A Common Stock per share |
|
$ |
(0.86 |
) |
|
$ |
2.34 |
|
|
$ |
5.10 |
|
|
$ |
7.60 |
|
Impact of adjustments: |
|
|
|
|
|
|
|
|
(Benefit) provision for income taxes |
|
|
(0.24 |
) |
|
|
0.67 |
|
|
|
1.64 |
|
|
|
2.24 |
|
Litigation settlement 1 |
|
|
4.85 |
|
|
|
— |
|
|
|
4.88 |
|
|
|
— |
|
Professional fees 2 |
|
|
0.23 |
|
|
|
— |
|
|
|
0.23 |
|
|
|
— |
|
Acquisition and integration related expenses 3 |
|
|
0.08 |
|
|
|
0.08 |
|
|
|
0.32 |
|
|
|
0.32 |
|
Stock-based compensation expense 4 |
|
|
0.02 |
|
|
|
0.09 |
|
|
|
0.29 |
|
|
|
0.31 |
|
Adjustment to tax receivable agreement liability 5 |
|
|
0.01 |
|
|
|
0.05 |
|
|
|
0.01 |
|
|
|
0.05 |
|
Net (loss) income attributable to non-controlling interest 6 |
|
|
(0.03 |
) |
|
|
0.09 |
|
|
|
0.17 |
|
|
|
0.28 |
|
Fully distributed net income
per share before income taxes |
|
|
4.06 |
|
|
|
3.32 |
|
|
|
12.64 |
|
|
|
10.80 |
|
Impact of income tax expense on fully distributed income before
income taxes 7 |
|
|
(0.99 |
) |
|
|
(0.79 |
) |
|
|
(3.07 |
) |
|
|
(2.57 |
) |
Impact of increased share count 10 |
|
|
(0.09 |
) |
|
|
(0.10 |
) |
|
|
(0.38 |
) |
|
|
(0.32 |
) |
Adjusted Fully Distributed Net
Income per Share of Class A Common Stock |
|
$ |
2.98 |
|
|
$ |
2.43 |
|
|
$ |
9.19 |
|
|
$ |
7.91 |
|
(1) |
|
Represents settlement of product liability cases in June 2023 for
$100.0 million. |
(2) |
|
For fiscal year 2023, represents legal and advisory fees related to
our product liability cases that were settled in June 2023 for
$100.0 million. |
(3) |
|
For the three months and fiscal year ended June 30, 2023 and 2022,
represents amortization of intangibles acquired in connection with
the acquisition of Maverick Boat Group, Pursuit and Cobalt. |
(4) |
|
Represents equity-based incentives awarded to certain of our
employees under the Malibu Boats, Inc. Long-Term Incentive Plan and
profit interests issued under the previously existing limited
liability company agreement of the LLC. |
(5) |
|
For the three months and fiscal year ended June 30, 2023, we
recognized other expense from an adjustment in our tax receivable
agreement liability mainly derived by future benefits from
Tennessee net operating losses at Malibu Boats, Inc For the three
months and fiscal year ended June 30, 2022, we recognized other
expense from an adjustment in our tax receivable agreement
liability due to an increase in the state tax rate used in
computing our future tax obligations and in turn, an increase in
the future benefit we expect to pay under our tax receivable
agreement with pre-IPO owners. |
(6) |
|
Reflects the elimination of the non-controlling interest in the LLC
as if all LLC members had fully exchanged their LLC Units for
shares of Class A Common Stock. |
(7) |
|
Reflects income tax expense at an estimated normalized annual
effective income tax rate of 24.3% and 23.8% of income before
income taxes for the three months and fiscal year ended June 30,
2023 and 2022, respectively, assuming the conversion of all LLC
Units into shares of Class A Common Stock. The estimated normalized
annual effective income tax rate for fiscal year 2023 is based on
the federal statutory rate plus a blended state rate adjusted for
the research and development tax credit, the foreign derived
intangible income deduction, and foreign income taxes attributable
to our Australian subsidiary. |
(8) |
|
Represents the weighted average shares outstanding of LLC Units
held by non-controlling interests assuming they were exchanged into
Class A Common Stock on a one for one basis. |
(9) |
|
Represents the weighted average unvested restricted stock awards
included in outstanding shares during the applicable period that
were convertible into Class A Common Stock and granted to members
of management. |
(10) |
|
Reflects impact of increased share counts assuming the exchange of
all weighted average shares outstanding of LLC Units into shares of
Class A Common Stock and the conversion of all weighted average
unvested restricted stock awards included in outstanding shares
granted to members of management. |
|
|
|
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