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Sea Sure 2020 - LEADERBOARD

Malibu Boats announces record fourth quarter and fiscal 2021 results

by Malibu Boats 27 Aug 2021 06:00 PDT
Malibu Wakesetter 21 LX © Malibu Boats

Malibu Boats, Inc. (Nasdaq: MBUU) today announced its financial results for the fourth quarter and fiscal year ended June 30, 2021.

Fiscal fourth quarter 2021 highlights compared to fiscal fourth quarter 2020

  • Net sales increased 133.2% to $276.7 million
  • Unit volume increased 110.7%
  • Gross profit increased 193.9% to $69.2 million
  • Net income increased 437.1% to $35.0 million
  • Adjusted EBITDA increased 272.2% to $57.6 million
  • Net income available to Class A Common Stock per share (diluted) increased 451.7% to $1.60 per share
  • Adjusted fully distributed net income per share increased 360.0% to $1.84 per share on a fully distributed weighted average share count of 21.7 million shares of Class A Common Stock

Fiscal year 2021 highlights compared to fiscal year 2020

  • Net sales increased 41.9% to $926.5 million
  • Unit volume increased 27.0%
  • Gross profit increased 58.4% to $236.5 million
  • Net income increased 76.8% to $114.3 million
  • Adjusted EBITDA increased 71.3% to $190.1 million
  • Net income available to Class A Common Stock per share (diluted) increased 77.3% to $5.23 per share
  • Adjusted fully distributed net income per share increased 82.7% to $6.01 on a fully distributed weighted average share count of 21.6 million shares of Class A Common Stock

"Our premium brands, market leading innovation and operational excellence delivered another record-breaking year with net sales increasing more than 40%, net income increasing 76% and Adjusted EBITDA growing over 71%. The strength of our brands, coupled with our vertically-integrated model and our team's agility while navigating the challenges spurred by the Covid pandemic have delivered truly incredible results," commented Jack Springer, Chief Executive Officer of Malibu Boats Inc.

"Retail demand has maintained its breathtaking pace, and the trend toward larger, more custom boats is persisting. Of new boat orders, we believe over 90% will be retail sold in the first quarter of fiscal 2022, and we anticipate a robust pace to continue throughout the remainder of the year. The introduction of our Model Year 2022 lineup has been nothing short of spectacular. Malibu and Axis will introduce four new models, Cobalt will introduce five new models for the year, and Pursuit is on track to deliver three new boats during the year. In addition, we welcomed Maverick Boat Group to the Malibu family this year, and we are putting into place our world class product development model which will support new product introductions in the future," continued Mr. Springer. "As we look to fiscal year 2022, we remain in an enviable position due to historically low inventories, despite rising uncertainty surrounding the spread of Covid variants and supply chain headwinds. As always, we remain focused on executing our proven strategy, centered on industry-leading innovation and operational prowess, to deliver long-term value for our stockholders."

Comparison of the Fourth Quarter Ended June 30, 2021 to the Fourth Quarter Ended June 30, 2020

Net sales for the three months ended June 30, 2021 increased $158.1 million, or 133.2%, to $276.7 million, compared to the three months ended June 30, 2020. Unit volume for the three months ended June 30, 2021 increased 1,237 units, or 110.7%, to 2,354 units compared to the three months ended June 30, 2020. The increase in net sales was driven by increased unit volume in all segments and increased volume due to the acquisition of Maverick Boat Group on December 31, 2020 and increased production in the three months ended June 30, 2021 as compared to June 30, 2020 when we had temporary shut down due to the Covid pandemic. As a result of our suspension of operations in the three months ended June 30, 2020, we were not able to ship boats to our dealers during the period of shut-down, which negatively impacted our net sales for the fourth quarter of fiscal year 2020.

Net sales attributable to our Malibu segment increased to $68.1 million, or 98.7%, to $137.0 million for the three months ended June 30, 2021 compared to the three months ended June 30, 2020. Unit volumes attributable to our Malibu segment increased 598 units, or 82.4% for the three months ended June 30, 2021 compared to the three months ended June 30, 2020. The increase in net sales while primarily driven by unit volume also benefited from a mix of larger models and more optional features.

Net sales from our Saltwater Fishing segment increased $66.7 million, or 331.7%, to $86.8 million, for the three months ended June 30, 2021, compared to the three months ended June 30, 2020. Unit volumes increased 478 units, or 549.4% for the three months ended June 30, 2021 compared to the three months ended June 30, 2020. The increase in net sales was due to over a doubling of unit volume at Pursuit and the acquisition of Maverick Boat Group on December 31, 2020.

Net sales from our Cobalt segment increased $23.3 million, or 78.6%, to $52.9 million for the three months ended June 30, 2021 compared to the three months ended June 30, 2020. Unit volumes attributable to Cobalt increased 161 units, or 53.0% for the three months ended June 30, 2021 compared to the three months ended June 30, 2020. The increase in net sales was driven primarily by increased production in the three months ended June 30, 2021 as compared to June 30, 2020 when we had temporary shut down due to the Covid pandemic.

Our overall net sales per unit increased 10.7% to approximately $117,600 per unit for the three months ended June 30, 2021 compared to the three months ended June 30, 2020. Net sales per unit for our Malibu segment increased 9.0% to $103,512 per unit for the three months ended June 30, 2021 compared to the three months ended June 30, 2020, primarily driven by higher sales of new, more expensive models and optional features. Net sales per unit for our Saltwater Fishing segment decreased 33.5% to $153,632 for the three months ended June 30, 2021 compared to the three months ended June 30, 2020, driven primarily by mix of models due mostly to the lower sales price associated with units attributable to our acquisition of Maverick Boat Group on December 31, 2020. Net sales per unit for our Cobalt segment increased 16.8% to $113,699 per unit for the three months ended June 30, 2021 compared to the three months ended June 30, 2020, primarily driven by higher sales of larger, more expensive new R-series models.

Cost of sales for the three months ended June 30, 2021 increased $112.4 million, or 118.2%, to $207.5 million as compared to the three months ended June 30, 2020. The increase in cost of sales was driven by higher costs related to higher net sales in all our segments due primarily to increased production in the three months ended June 30, 2021 as compared to June 30, 2020 when we had temporary shut down due to the Covid pandemic. In the Malibu segment, higher material and labor costs contributed $39.3 million to the increase in cost of sales and were driven by increased volume. Within our Saltwater Fishing segment, higher volumes at Pursuit and Maverick Boat Group drove $46.8 million of increase in cost of sales, which was also modestly impacted by mix driven higher per unit costs at Pursuit. In the Cobalt segment, higher material and labor costs contributed $14.1 million to the increase in cost of sales and were driven by higher volumes primarily with a modest impact from mix driven higher materials per unit associated with larger product that corresponded with higher net sales per unit.

Gross profit for the three months ended June 30, 2021 increased $45.7 million, or 193.9%, to $69.2 million compared to the three months ended June 30, 2020. The increase in gross profit was driven primarily by volume, but also benefited from improved gross margin in each segment. Gross margin for the three months ended June 30, 2021 increased 520 basis points from 19.8% to 25.0%.

Selling and marketing expenses for the three months ended June 30, 2021 increased $1.6 million, or 45.6%, to $5.3 million compared to the three months ended June 30, 2020. The increase was driven primarily by incremental selling and marketing expenses from the acquisition of Maverick Boat Group and increased travel and promotional events for the three months ended June 30, 2021 as compared to the three months ended June 30, 2020. As a percentage of sales, selling and marketing expenses decreased 110 basis points to 1.9% for the three months ended June 30, 2021 compared to the three months ended June 30, 2020. General and administrative expenses for the three months ended June 30, 2021 increased $7.3 million, or 76.7%, to $16.8 million as compared to the three months ended June 30, 2020. The increase in general and administrative expenses was 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 decreased 190 basis points to 6.1% for the three months ended June 30, 2021 compared to the three months ended June 30, 2020. Amortization expense for the three-month period ended June 30, 2021 increased $0.6 million, or 40.0%, when compared to the three months ended June 30, 2020, due to additional amortization from intangible assets acquired as a result of the acquisition of Maverick Boat Group on December 31, 2020.

Operating income for the three months ended June 30, 2021 increased to $45.0 million from $8.9 million for the three months ended June 30, 2020. Net income for the three months ended June 30, 2021 increased 437.1% to $35.0 million from $6.5 million and net income margin increased to 12.6% from 5.5% for the three months ended June 30, 2020. Adjusted EBITDA for the three months ended June 30, 2021 increased 272.2% to $57.6 million from $15.5 million, while Adjusted EBITDA margin increased to 20.8% from 13.1% for the three months ended June 30, 2020.

Comparison of the Fiscal Year Ended June 30, 2021 to the Fiscal Year Ended June 30, 2020

Net sales for fiscal year 2021 increased $273.4 million, or 41.9%, to $926.5 million, compared to fiscal year 2020. Unit volume for fiscal year 2021 increased 1,741 units, or 27.0%, to 8,185 units compared to fiscal year 2020. The increase in net sales was driven primarily by a favorable model mix in our Malibu and Cobalt segment and increased unit volume in our Malibu and Saltwater fishing segments. The increase in unit volume for our Saltwater Fishing segment was due mostly to our acquisition of Maverick Boat Group on December 31, 2020.

Net sales attributable to our Malibu segment increased $128.8 million, or 36.3%, to $483.5 million for fiscal year 2021 compared to fiscal year 2020. Unit volumes attributable to our Malibu segment increased 861 units for fiscal year 2021 compared to fiscal year 2020. The increase in net sales and unit volumes was driven primarily by strong demand for our new, larger models and optional features.

Net sales from our Saltwater Fishing segment increased $119.3 million, or 96.5%, to $242.9 million for fiscal year 2021 compared to fiscal year 2020. Unit volumes increased 920 units for fiscal year 2021 compared to fiscal year 2020. The increase in net sales was driven primarily by the increased volumes at Pursuit and due to the acquisition of Maverick Boat Group on December 31, 2020.

Net sales from our Cobalt segment increased $25.3 million, or 14.5%, to $200.1 million for fiscal year 2021 compared to fiscal year 2020. Unit volumes attributable to Cobalt decreased 40 units for fiscal year 2021 compared to fiscal year 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 fiscal year 2021 because of lower production levels related to our investment in the Cobalt facilities to optimize efficiency and expand capacity, the introduction of six new Cobalt models during fiscal year 2021 and challenges around labor and supply as a result of the pandemic and severe winter weather.

Our overall net sales per unit increased 11.7% to $113,197 per unit for fiscal year 2021 compared to fiscal year 2020. Net sales per unit for our Malibu segment increased 12.1% to $99,881 per unit for fiscal year 2021 compared to fiscal year 2020, primarily driven by higher sales of new, more expensive models and optional features. Net sales per unit for our Saltwater Fishing segment decreased 30.1% to $170,108 per unit for fiscal year 2021 compared to fiscal year 2020, primarily driven by mix of models due to the acquisition of Maverick Boat Group on December 31, 2020. Net sales per unit for our Cobalt segment increased 16.9% to $104,424 per unit for fiscal year 2021 compared to fiscal year 2020, driven by higher sales of larger, more expensive models and optional features.

Cost of sales for fiscal year 2021 increased $186.1 million, or 36.9%, to $690.0 million compared to fiscal year 2020. The increase in cost of sales was driven by higher costs related to higher net sales in our Malibu and Saltwater Fishing segments. In the Malibu segment, higher material and labor costs contributed $70.4 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 $83.7 million of increase in cost of sales which was also modestly impacted by higher per unit costs. In the Cobalt segment, higher material and labor costs contributed $14.7 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.

Gross profit for fiscal year 2021 increased $87.2 million, or 58.4%, compared to fiscal year 2020. The increase in gross profit was driven primarily by higher sales revenue with a more favorable product mix and the contribution of Maverick Boat Group partially offset by the increased cost of sales for the reasons noted above. Gross margin increased 270 basis points from 22.8% in fiscal 2020 to 25.5% in fiscal year 2021.

Selling and marketing expense for fiscal year 2021 decreased $0.4 million, or 2.1% to $17.5 million compared to fiscal year 2020. The decrease was driven primarily by decreased travel and promotional events due mostly to restrictions imposed by Covid offset by incremental selling and marketing expenses with the acquisition of Maverick Boat Group. As a percentage of sales, selling and marketing expense decreased 90 basis points from 2.8% for fiscal year 2020 to 1.9% for fiscal year 2021. General and administrative expense for fiscal year 2021 increased $22.0 million, or 55.1%, to $61.9 million compared to fiscal year 2020. The increase in general and administrative expenses was 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 50 basis points to 6.6% for fiscal year 2021 compared to 6.1% for fiscal year 2020. Amortization expense for fiscal year 2021 increased $1.1 million, or 18.3%, to $7.3 million compared to fiscal year 2020, due to additional amortization from intangible assets acquired as a result of the acquisition of Maverick Boat Group on December 31, 2020.

Operating income for fiscal year 2021 increased to $149.8 million from $85.3 million for fiscal year 2020. Net income for fiscal year 2021 increased 76.8% to $114.3 million from $64.7 million and net income margin increased to 12.3% for fiscal year 2021 from 9.9% for fiscal year 2020. Adjusted EBITDA for fiscal year 2021 increased 71.3% to $190.1 million from $110.9 million, while Adjusted EBITDA margin increased to 20.5% for fiscal year 2021 from 17.0% for fiscal year 2020.

Fiscal 2022 Guidance

For the full fiscal year 2022, Malibu anticipates net sales growth percentage in the high-teens year-over-year and Adjusted EBITDA margin of approximately 20% for the full 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.

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