Malibu Boats announces second quarter fiscal 2022 results

Malibu Boats © Malibu Boats

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

Fiscal Second Quarter 2022 Highlights Compared to Fiscal Second Quarter 2021:

• Net sales increased 34.9% to a record $263.9 million
• Unit volume increased 19.0% to a record 2,073 units
• Gross profit increased 28.4% to a record $63.6 million
• Net income increased 39.9% to a record $31.0 million
• Adjusted EBITDA increased 23.0% to a record $48.1 million
• Net income available to Class A Common Stock per share (diluted) increased 39.6% to a record $1.41 per share
• Adjusted fully distributed net income per share increased 23.0% to a record $1.50 per share on a fully distributed weighted average share count of 21.7 million shares of Class A Common Stock

"We delivered another tremendous quarter with net sales increasing 34.9%, net income rising 39.9% and Adjusted EBITDA growing 23.0% compared to the prior year. The combination of our industry-leading brands, loyal customers, and unparalleled commitment and dedication of our team consistently generates outstanding results and again sets us apart from our competition," commented Jack Springer, Chief Executive Officer of Malibu Boats, Inc. "Throughout the quarter, inflationary pressures and supply chain constraints persisted, but our tried-and-true operational agility allowed us to once again outperform the market."

"Demand has shown no sign of waning, and the consumer appetite for feature-rich, larger boats remains plentiful, which drove unpredictably strong ASPs," continued Mr. Springer. "Despite lower volumes due to ongoing supply chain pressures, the proactive steps we have taken to protect and expand margins, while maintaining our focus on delivering best-in-class, innovative products position us incredibly well as we enter the second half of fiscal year 2022. As a result, we remain confident in our ability to drive long-term value for our stakeholders."

Fiscal Second Quarter 2022 Results (Unaudited) - photo © Malibu Boats

Net sales for the three months ended December 31, 2021 increased $68.2 million, or 34.9%, to $263.9 million as compared to the three months ended December 31, 2020. The increase in net sales was driven primarily by a favorable model mix and increased unit volumes primarily due to the acquisition of Maverick Boat Group on December 31, 2020. We recognized an increase in net sales across all three segments and increase in volumes at our Malibu and Saltwater Fishing segments during the three months ended December 31, 2021. Unit volume for the three months ended December 31, 2021, increased 331 units, or 19.0%, to 2,073 units as compared to the three months ended December 31, 2020. Our unit volume increased primarily due to the acquisition of Maverick Boat Group on December 31, 2020.

Net sales attributable to our Malibu segment increased $24.8 million, or 22.9%, to $133.5 million for the three months ended December 31, 2021, compared to the three months ended December 31, 2020. Unit volumes attributable to our Malibu segment increased 78 units for the three months ended December 31, 2021, compared to the three months ended December 31, 2020. The increase in net sales was driven by increased volume, a favorable model mix and year over year price increases.

Net sales attributable to our Saltwater Fishing segment increased $35.7 million, or 90.2%, to $75.2 million, for the three months ended December 31, 2021, compared to the three months ended December 31, 2020. Unit volume increased 317 units for the three months ended December 31, 2021 compared to the three months ended December 31, 2020. The increase in net sales was driven primarily by the acquisition of Maverick Boat Group on December 31, 2020 and favorable model mix.

Net sales attributable to our Cobalt segment increased $7.7 million, or 16.2%, to $55.2 million for the three months ended December 31, 2021, compared to the three months ended December 31, 2020. Unit volumes attributable to Cobalt decreased 64 units for the three months ended December 31, 2021 compared to the three months ended December 31, 2020. The increase in net sales was driven primarily by a favorable model mix partially offset by a decrease in volumes due to production of larger, more complex boats and ongoing supply chain constraints.

Overall consolidated net sales per unit increased 13.3% to $127,297 per unit for the three months ended December 31, 2021, compared to the three months ended December 31, 2020. Net sales per unit for our Malibu segment increased 14.7% to $113,192 per unit for the three months ended December 31, 2021, compared to the three months ended December 31, 2020, driven primarily by a favorable model mix and year over year price increases. Net sales per unit for our Saltwater Fishing segment decreased 38.3% to $160,429 per unit for the three months ended December 31, 2021 driven primarily by mix of models due mostly to the inclusion of lower priced models from our acquisition of Maverick Boat Group on December 31, 2020. Net sales per unit for our Cobalt segment increased 33.8% to $129,866 per unit for the three months ended December 31, 2021, compared to the three months ended December 31, 2020, driven primarily by a favorable model mix.

Cost of sales for the three months ended December 31, 2021 increased $54.2 million, or 37.1%, to $200.3 million as compared to the three months ended December 31, 2020. The increase in cost of sales was driven by higher costs related to higher net sales in all our segments, increased prices due to supply chain disruptions and inflationary pressures that have increased prices on parts and components. In the Malibu segment, higher per unit material and labor costs contributed $13.8 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. Within our Saltwater Fishing segment, higher volumes, primarily related to the acquisition of Maverick Boat Group, drove $27.5 million of increase in cost of sales which was also modestly impacted by higher per unit costs. In the Cobalt segment, higher per unit material and labor costs contributed $5.3 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.

Gross profit for the three months ended December 31, 2021 increased $14.1 million, or 28.4%, to $63.6 million compared to the three months ended December 31, 2020. 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 the three months ended December 31, 2021 decreased 120 basis points from 25.3% to 24.1% driven primarily by mix of models due mostly to the inclusion of lower priced models from the Maverick Boat Group, which we acquired on December 31, 2020.

Selling and marketing expenses for the three months ended December 31, 2021 increased $1.7 million, or 41.4% to $5.7 million compared to the three months ended December 31, 2020. The increase was driven primarily by incremental selling and marketing expenses from the acquisition of Maverick Boat Group, increased compensation and personnel related expenses and by increased travel and promotional events that have since resumed in the three months ended December 31, 2021 after being suspended for Covid during the three months ended December 31, 2020. As a percentage of sales, selling and marketing expenses increased 10 basis points to 2.1% for the three months ended December 31, 2021 compared to 2.0% for the three months ended December 31, 2020. General and administrative expenses for the three months ended December 31, 2021 increased $1.0 million, or 6.3%, to $16.0 million as compared to the three months ended December 31, 2020 driven primarily by an increase in compensation and personnel related expenses, information technology infrastructure expenses and incremental general and administrative expenses due to the acquisition of Maverick Boat Group offset by a decrease in acquisition expenses related to the acquisition of Maverick Boat Group on December 31, 2020. As a percentage of sales, general and administrative expenses decreased 160 basis points to 6.1% for the three months ended December 31, 2021 compared to 7.7% for the three months ended December 31, 2020. Amortization expense for the three months ended December 31, 2021 increased $0.2 million, or 12.8% to $1.7 million compared to the three months ended December 31, 2020. The increase is due to amortization of intangibles acquired as part of the acquisition of Maverick Boat Group on December 31, 2020 offset by a decrease of amortization expense related to fully amortized intangibles.

Operating income for the second quarter of fiscal year 2022 increased to $40.2 million from $28.9 million in the second quarter of fiscal year 2021. Net income for the second quarter of fiscal year 2022 increased 39.9% to $31.0 million from $22.1 million and net income margin increased to 11.7% from 11.4% in the second quarter of fiscal year 2021. Adjusted EBITDA in the second quarter of fiscal year 2022 increased 23.0% to $48.1 million from $39.1 million, while Adjusted EBITDA margin decreased to 18.2% from 20.0% in the second quarter of fiscal year 2021.

Fiscal 2022 Guidance

For the fiscal full year 2022, Malibu anticipates revenue growth in the 22% to 24% range year-over-year and Adjusted EBITDA margins above 19.5%.

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 second quarter of fiscal year 2022 results on Tuesday, February 8, 2022, 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 #2119247. 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.