Malibu Boats, Inc. announces record third quarter Fiscal 2021 results

Malibu Boats © Malibu Boats

Malibu Boats, Inc. (Nasdaq: MBUU) today announced its financial results for the third quarter ended March 31, 2021.

"We delivered a record-setting third quarter and the best quarter in company history from both a revenue and earnings perspective. This would have been true even without the addition of Maverick Boat Group this quarter. Our results continue to showcase the agility of our team and the strength of our flexible business model, as we posted production levels for Malibu and Pursuit that significantly exceeded historical levels and the fourth best production month ever for Maverick in March. While we have expertly navigated COVID-related supply chain constraints, disruptions resulting from the Texas storms and Kansas freeze allowed our operational excellence and versatility to shine through," commented Jack Springer, Chief Executive Officer of Malibu Boats, Inc. "Maverick is proving to be another home run, and a perfect fit within our Malibu family of brands. We have just begun our proven process of improvement with Maverick and there are many opportunities for growth to come. Further, robust demand for our larger, newer boats has endured, supporting substantial growth and earnings power. We are optimistic that these tailwinds will remain elevated well beyond calendar year 2021."

"As we continue to navigate through an ever-changing macro-economic landscape, I am incredibly proud of our team, who day in and day out remain laser-focused on superior execution and living the values of our Company to ensure we bring our customers industry-leading new product innovation. We look forward to leveraging these catalysts for growth as we conclude our fiscal year 2021, and continue to deliver value for our shareholders," concluded Mr. Springer.

Fiscal Third Quarter 2021 Results (Unaudited)

Net sales for the three months ended March 31, 2021 increased $90.9 million, or 49.8%, to $273.2 million as compared to the three months ended March 31, 2020. The increase in net sales was driven primarily by a favorable model mix in our Malibu and Cobalt segments and increased unit volumes in our Malibu and Saltwater Fishing segments due mostly to our acquisition of Maverick Boat Group on December 31, 2020. Unit volume for the three months ended March 31, 2021, increased 658 units, or 36.6%, to 2,454 units as compared to the three months ended March 31, 2020. Our unit volume increased primarily due to strong demand at our Malibu segment and additional volume in Saltwater Fishing due mostly to our acquisition of Maverick Boat Group but also supported by robust growth at Pursuit. The increase in unit volumes was constrained by the impact of severe weather on our Cobalt operations and our supply chain's operations.

Net sales attributable to our Malibu segment increased $35.5 million, or 34.6%, to $138.0 million for the three months ended March 31, 2021, compared to the three months ended March 31, 2020. Unit volumes attributable to our Malibu segment increased 246 units for the three months ended March 31, 2021, compared to the three months ended March 31, 2020. The increase in net sales was driven primarily by increased volume, strong demand for our new, larger models and optional features.

Net sales attributable to our Cobalt segment increased $9.2 million, or 20.0%, to $55.3 million for the three months ended March 31, 2021, compared to the three months ended March 31, 2020. Unit volumes attributable to Cobalt decreased 17 units for the three months ended March 31, 2021 compared to the three months ended March 31, 2020. The increase in net sales was driven by a favorable product mix of our Cobalt models impacting net sales per unit, offset by lower volume. Our unit volumes for our Cobalt segment decreased during the three months ended March 31, 2021 as a result of weather related shutdowns of our operations and suppliers' operations.

Net sales attributable to our Saltwater Fishing segment increased $46.2 million, or 137.2%, to $79.9 million, for the three months ended March 31, 2021, compared to the three months ended March 31, 2020. Unit volume increased 429 units for the three months ended March 31, 2021 compared to the three months ended March 31, 2020. The increase in net sales was driven primarily by the increased volumes due to the acquisition of Maverick Boat Group on December 31, 2020.

Overall consolidated net sales per unit increased 9.7% to $111,313 per unit for the three months ended March 31, 2021, compared to the three months ended March 31, 2020. Net sales per unit for our Malibu segment increased 10.6% to $99,658 per unit for the three months ended March 31, 2021, compared to the three months ended March 31, 2020, driven by higher sales of new, more expensive models and optional features. Net sales per unit for our Cobalt segment increased 24.1% to $109,615 per unit for the three months ended March 31, 2021, compared to the three months ended March 31, 2020, driven by higher sales of larger, more expensive models. Net sales per unit for our Saltwater Fishing segment decreased 42.9% to $141,396 per unit for the three months ended March 31, 2021 driven primarily by mix of models due mostly to the acquisition of Maverick Boat Group on December 31, 2020.

Cost of sales for the three months ended March 31, 2021 increased $64.7 million, or 47.4%, to $201.1 million as compared to the three months ended March 31, 2020. The increase in cost of sales was driven by higher costs related to higher net sales in all our segments. In the Malibu segment, higher per unit material and labor costs contributed $19.8 million to the increase in cost of sales and were driven by an increased mix of larger product that corresponded with higher net sales per unit. In the Cobalt segment, higher per unit material and labor costs contributed $6.3 million to the increase in cost of sales and were driven by an increased mix of larger product that corresponded with higher net sales per unit. Within our Saltwater Fishing segment, higher volumes, primarily related to the acquisition of Maverick Boat Group, drove $34.0 million of increase in cost of sales which was also modestly impacted by higher per unit costs.

Gross profit for the three months ended March 31, 2021 increased $26.2 million, or 57.1%, to $72.0 million compared to the three months ended March 31, 2020. The increase in gross profit was driven primarily by higher sales revenue with a more favorable product mix partially offset by the increased cost of sales for the reasons noted above. Gross margin for the three months ended March 31, 2021 increased 130 basis points from 25.1% to 26.4%.

Selling and marketing expenses for the three months ended March 31, 2021 increased $0.1 million, or 2.1% to $4.7 million compared to the three months ended March 31, 2020. The increase was driven primarily by incremental selling and marketing expenses from the acquisition of Maverick Boat Group offset by decreased travel and promotional events due mostly to restrictions imposed by COVID-19. As a percentage of sales, selling and marketing expenses decreased 80 basis points compared to the same period in the prior fiscal year. General and administrative expenses for the three months ended March 31, 2021, increased $8.8 million, or 90.8%, to $18.4 million as compared to the three months ended March 31, 2020 driven primarily by acquisition and integration related costs, compensation, higher legal expenses related to intellectual property litigation and incremental general and administrative expenses due to the acquisition of Maverick Boat Group. As a percentage of sales, general and administrative expenses increased 140 basis points to 6.7% for the three months ended March 31, 2021 compared to the three months ended March 31, 2020. Amortization expense for the three months ended March 31, 2021 increased $0.6 million, or 39.5% to $2.1 million compared to the three months ended March 31, 2020. The increase is due to amortization of intangibles acquired as part of the acquisition of Maverick Boat Group on December 31, 2020.

Operating income for the third quarter of fiscal year 2021 increased to $46.9 million from $30.1 million in the third quarter of fiscal year 2020. Net income for the third quarter of fiscal year 2021 increased 47.2% to $35.1 million from $23.9 million and net income margin decreased to 12.9% from 13.1% in the third quarter of fiscal year 2020. Adjusted EBITDA in the third quarter of fiscal year 2021 increased 56.7% to $57.0 million from $36.4 million, while Adjusted EBITDA margin increased to 20.9% from 20.0% in the third quarter of fiscal year 2020.

Fiscal 2021 Guidance

For the fiscal full year 2021, Malibu anticipates revenue growth approaching 38% year-over-year and Adjusted EBITDA margins of approximately 20.5%.

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.

Conference Call and Webcast

The Company will host a webcast and conference call to discuss third quarter of fiscal year 2021 results on Tuesday, May 4, 2021, at 8:30 a.m. Eastern Time. Investors and analysts can participate on the conference call by dialing (855) 433-0928 or (484) 756-4263 and using Conference ID #7199253. 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 investors.malibuboats.com. A replay of the webcast will also be archived on the Company's website for twelve months.