Malibu Boats, Inc. announces Q3 2014 fiscal results

Malibu Boats, Inc.
May 9, 2014
Filed under News

LOUDON, Tenn. – Malibu Boats, Inc. (Nasdaq:MBUU) today announced its financial results for the third quarter of fiscal 2014 ended March 31, 2014.

Highlights for the Third Quarter of Fiscal 2014

  • Net sales for the third quarter of fiscal 2014 increased 6.9% to $50.3 million compared to the third quarter of fiscal 2013. Unit volume increased 2.9% to 788 boats and net sales per unit increased 3.9% during the same period to $63,823.
  • Gross profit for the third quarter of fiscal 2014 increased 7.2% to $13.4 million compared to the third quarter of fiscal 2013.
  • Adjusted EBITDA for the third quarter of fiscal 2014 increased 12.9% to $10.1 million compared to the third quarter of fiscal 2013 and Adjusted EBITDA margin increased 100 basis points during the same period to a third quarter record of 20.0%.
  • Adjusted fully distributed net income for the third quarter of fiscal 2014 was $4.4 million, or $0.20 per share, on a fully distributed weighted average share count of 22.4 million shares of Class A Common Stock.

Jack Springer, Chief Executive Officer, stated, “We had another very strong quarter – delivering on every operating and financial metric across the board. Throughout the quarter, deliveries and orders remained strong and sales growth was once again driven by increases in both unit volume and average selling price. Both Malibu and Axis performed very well and our new product introductions continued to create a lot of excitement with our dealers and customers. The proof was in our adjusted EBITDA margin, which increased to a third quarter record of 20%. This is the highest third quarter margin in the company’s history and we continue to take a balanced approach to driving profitable growth.”

Mr. Springer continued, “Looking forward to the new model year, we will continue to build on our momentum in the marketplace by launching a number of new and exciting products and features. While it’s still a little premature to discuss the details, these will include new or completely remodeled boats and a number of features and innovations that are designed to deliver never-before-seen features in our segment and further expansion of our ‘integrated surf package’ across our line of products. We are very excited about the new model year and believe we are well positioned for continued growth, profitability and further distinguishing ourselves from the competition.”

Results of Operations for the Third Quarter of Fiscal 2014

Three Months Ended Nine Months Ended
March 31, March 31,
2014 2013 2014 2013
(In thousands, except unit volume)
Net sales  $ 50,293  $ 47,062  $ 137,535  $ 118,039
Cost of sales 36,892 34,561 101,417 88,376
Gross profit 13,401 12,501 36,118 29,663
Operating expenses:
Selling and marketing 1,512 1,524 4,454 3,794
General and administrative 10,299 4,150 15,322 11,302
Amortization 1,294 1,294 3,883 3,883
Operating income 296 5,533 12,459 10,684
Other income (expense):
Other 3 9 8
Interest expense (1,207) (335) (2,980) (1,085)
Other expense, net (1,207) (332) (2,971) (1,077)
Net (loss) income before provision for income taxes (911) 5,201 9,488 9,607
Provision for income taxes 76 76
Net (loss) income (987) 5,201 9,412 9,607
Net (loss) income attributable to non-controlling interest (617) 5,201 9,782 9,607
Net loss attributable to Malibu Boats, Inc.  $ (370)  $ —  $ (370)  $ —
Unit Volumes 788 766 2,111 1,917
Net Sales Price per Unit  $ 64  $ 61  $ 65  $ 62

Net sales for the three month period ended March 31, 2014 increased 6.9% to $50.3 million from $47.1 million for the three month period ended March 31, 2013. The increase in net sales was the result of a 2.9% increase in the number of boats sold to 788 from 766 and a 3.9% increase in net sales per unit to $63,823 from $61,440 in the comparable fiscal third quarter last year. The increase in units sold was attributable to strong, continued consumer demand for our boats, bolstered by the introduction of our new models and features. The increase in net sales per unit was primarily driven by new boat models and increased sales of larger boats, including the Wakesetter 23 LSV and Axis A24, as well as sales of the Company’s Surf Gate system on all Axis models.

Gross profit for the three month period ended March 31, 2014 increased 7.2% to $13.4 million from $12.5 million for the three month period ended March 31, 2013. Gross margin increased slightly to 26.6% compared to the fiscal third quarter of last year. The increase in gross profit resulted primarily from the increase in volumes and higher average selling prices due to options, features, and new boat models.

Selling and marketing expense for the three month periods ended March 31, 2014 compared to the three months ended March 31, 2013 was slightly lower at $1.5 million. As a percentage of net sales, selling and marketing expenses decreased 20 basis points to 3.0% from 3.2% of sales in the comparable fiscal third quarter of last year.

General and administrative expenses, excluding amortization expense, for the three month period ended March 31, 2014 increased $6.1 million to $10.3 million from $4.2 million for the three month period ended March 31, 2013. The increase in general and administrative expenses is due primarily to one-time charges of $6.3 million incurred in connection with our recapitalization and IPO on February 5, 2014. Excluding these charges, general and administrative expenses decreased 4.8% to $4.0 million for the three months ended March 31, 2014 compared to the three months ended March 31, 2013. Amortization expense was $1.3 million for the three month period ended March 31, 2014 and March 31, 2013.

Operating income for the three month period ended March 31, 2014 decreased to $0.3 million from $5.5 million for the three month period ended March 31, 2013 due to one-time charges of $6.3 million incurred in connection with our recapitalization and IPO on February 5, 2014. Excluding these charges, Adjusted EBITDA for the three month period ended March 31, 2014 increased 12.9% to $10.1 million from $8.9 million for the three month period ended March 31, 2013. Adjusted EBITDA margin increased 100 basis points in the third quarter of fiscal 2014 to a third quarter record of 20.0%.

Webcast and Conference Call Information

The Company will host a webcast and conference call to discuss third quarter fiscal 2014 results today, May 7, 2014, at 4:30 p.m. Eastern Standard Time. Investors and analysts can participate on the conference call by dialing (855) 433-0928 or (484) 756-4263 and using Conference ID #35575921. 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.

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