Malibu Boats, Inc. announces Q4 and record Fiscal 2022 results

by Malibu Boats 26 Aug 2022 15:53 PDT

Malibu Boats, Inc. (Nasdaq: MBUU) today announced its financial results for the fourth quarter and fiscal year ended June 30, 2022.

Fiscal Fourth Quarter 2022 Highlights Compared to Fiscal Fourth Quarter 2021

• Net sales increased 27.6% to $353.2 million
• Unit volume increased 10.3% to 2,596 units
• Gross profit increased 29.5% to $89.6 million
• Net income increased 42.1% to $49.7 million
• Adjusted EBITDA increased 28.3% to $73.9 million
• Net income available to Class A Common Stock per share (diluted) increased 44.4% to $2.31 per share
• Adjusted fully distributed net income per share increased 32.1% to $2.43 per share on a fully distributed weighted average share count of 21.3 million shares of Class A Common Stock

Fiscal Year 2022 Highlights Compared to Fiscal Year 2021

• Net sales increased 31.1% to a record $1,214.9 million
• Unit volume increased 13.1% to a record 9,255 units
• Gross profit increased 31.1% to a record $310.1 million
• Net income increased 43.0% to a record $163.4 million
• Adjusted EBITDA increased 29.7% to a record $246.5 million
• Net income available to Class A Common Stock per share (diluted) increased 43.6% to a record $7.51 per share
• Adjusted fully distributed net income per share increased 31.6% to a record $7.91 on a fully distributed weighted average share count of 21.6 million shares of Class A Common Stock

"Our superior execution, combined with the strength of our brands and innovation, supported yet another tremendous quarter and overall record-smashing year, with net sales growing 31% and Adjusted EBITDA increasing nearly 30% over the prior year. Despite persistent supply chain headwinds, our operational excellence and advancements of our vertically integrated model have continued to shine and kept us strongly positioned as we closed out the fiscal year," commented Jack Springer, Chief Executive Officer of Malibu Boats, Inc.

"Our Model Year 2023 lineup is nothing short of enviable as we as bring even larger and more feature-rich boats to the market. Additionally, we are extremely excited about the introduction of the Pathfinder 2400 TRS, our first Maverick product launch since the acquisition, which is sure to make waves with our customers. We continue to focus on our industry-leading innovation as we expand our differentiated portfolio across all our brands, giving us a significant edge with both loyal customers of our brands and first-time boat buyers," continued Mr. Springer. "As we move into fiscal year 2023, we remain in an optimal position, doubling down on our strong conviction that our inherent strength and capabilities along with operational prowess will continue to drive profitability and deliver long-term value for our shareholders."

Results of Operations for the Fourth Quarter and Fiscal Year 2022 (Unaudited)

		Three Months Ended June 30,								Fiscal Year Ended June 30,
			2022				2021				2022				2021
		(In thousands, except unit and per unit data)
Net Sales		$	353,206			$	276,722			$	1,214,877			$	926,515
Gross Profit		$	89,627			$	69,227			$	310,051			$	236,485
Gross Profit Margin			25.4	%			25.0	%			25.5	%			25.5	%
Net Income		$	49,685			$	34,962			$	163,430			$	114,282
Net Income Margin			14.1	%			12.6	%			13.5	%			12.3	%
Adjusted EBITDA		$	73,901			$	57,620			$	246,529			$	190,103
Adjusted EBITDA Margin			20.9	%			20.8	%			20.3	%			20.5	%

Comparison of the Fourth Quarter Ended June 30, 2022 to the Fourth Quarter Ended June 30, 2021

Net sales for the three months ended June 30, 2022 increased $76.5 million, or 27.6%, to $353.2 million, compared to the three months ended June 30, 2021. The increase in net sales was driven primarily by year-over-year price increases, a favorable model mix and increased unit volumes primarily in our Malibu and Cobalt segments. We recognized an increase in net sales across all three segments and increase in volumes at our Malibu and Cobalt segments during the three months ended June 30, 2022. Unit volume for the three months ended June 30, 2022 increased 242 units, or 10.3%, to 2,596 units compared to the three months ended June 30, 2021. Our unit volume increased primarily due to strong demand at our Malibu and Cobalt segments.

Net sales attributable to our Malibu segment increased $40.0 million, or 29.2%, to $177.0 million for the three months ended June 30, 2022 compared to the three months ended June 30, 2021. Unit volumes attributable to our Malibu segment increased 154 units, or 12.0%, for the three months ended June 30, 2022 compared to the three months ended June 30, 2021. The increase in net sales was primarily driven by year-over-year price increases and increased volume.

Net sales from our Saltwater Fishing segment increased $9.5 million, or 10.9%, to $96.3 million, for the three months ended June 30, 2022, compared to the three months ended June 30, 2021. Unit volumes decreased 35 units, or 14.0% for the three months ended June 30, 2022 compared to the three months ended June 30, 2021. The increase in net sales was driven primarily by year-over-year price increases and favorable model mix, partially offset by a decrease in volumes due to production of larger, more complex boats.

Net sales from our Cobalt segment increased $27.0 million, or 51.1%, to $79.9 million for the three months ended June 30, 2022 compared to the three months ended June 30, 2021. Unit volumes attributable to Cobalt increased 123 units, or 26.0% for the three months ended June 30, 2022 compared to the three months ended June 30, 2021. The increase in net sales was driven by year-over-year price increases, increased volume, and a favorable model mix.

Our overall net sales per unit increased 15.7% to approximately $136,000 per unit for the three months ended June 30, 2022 compared to the three months ended June 30, 2021. Net sales per unit for our Malibu segment increased 15.7% to $119,769 per unit for the three months ended June 30, 2022 compared to the three months ended June 30, 2021, driven by year-over-year price increases. Net sales per unit for our Saltwater Fishing segment increased 18.3% to $181,704 for the three months ended June 30, 2022 compared to the three months ended June 30, 2021, driven by year-over-year price increases and a favorable mix of models. Net sales per unit for our Cobalt segment increased 19.5% to $135,859 per unit for the three months ended June 30, 2022 compared to the three months ended June 30, 2021, driven by year-over-year price increases and a favorable model mix.

Cost of sales for the three months ended June 30, 2022 increased $56.1 million, or 27.0%, to $263.6 million as compared to the three months ended June 30, 2021. 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 impacted prices on parts and components. In the Malibu segment, higher per unit material and labor costs contributed $21.2 million to the increase in cost of sales and were driven by an increased mix of larger products that corresponded with higher net sales per unit. Within our Saltwater Fishing segment, higher per unit material and labor costs contributed $13.2 million to the increase in cost of sales and were driven by an increased mix of larger products that corresponded with higher net sales per unit. In the Cobalt segment, higher per unit material and labor costs contributed $18.0 million to the increase in cost of sales and were driven by an increased mix of larger products that corresponded with higher net sales per unit.

Gross profit for the three months ended June 30, 2022 increased $20.4 million, or 29.5%, to $89.6 million compared to the three months ended June 30, 2021. The increase in gross profit was driven primarily by a favorable mix of models that corresponded with higher net sales per unit. Gross margin for the three months ended June 30, 2022 increased 40 basis points from 25.0% to 25.4%.

Selling and marketing expenses for the three months ended June 30, 2022 increased $0.1 million, or 1.7%, to $5.4 million compared to the three months ended June 30, 2021. The increase was driven primarily by an increase in travel and other miscellaneous expenses which were slightly offset by a decrease in compensation and personnel-related expenses and promotional events for the three months ended June 30, 2022 as compared to the three months ended June 30, 2021. As a percentage of sales, selling and marketing expenses decreased 40 basis points to 1.5% for the three months ended June 30, 2022 compared to the three months ended June 30, 2021. General and administrative expenses for the three months ended June 30, 2022 increased $0.3 million, or 2.0%, to $17.2 million as compared to the three months ended June 30, 2021. The increase in general and administrative expenses was driven primarily by an increase in compensation and personnel-related expenses, increase in information technology infrastructure expenses, increase in licenses and permits and travel which were slightly offset by a decrease in professional fees. As a percentage of sales, general and administrative expenses decreased 120 basis points to 4.9% for the three months ended June 30, 2022 compared to the three months ended June 30, 2021. Amortization expense for the three-month period ended June 30, 2022 decreased $0.4 million, or 19.5%, when compared to the three months ended June 30, 2021, due to a decrease of amortization expense related to fully amortized intangibles.

Operating income for the three months ended June 30, 2022 increased to $65.4 million from $45.0 million for the three months ended June 30, 2021. Net income for the three months ended June 30, 2022 increased 42.1% to $49.7 million from $35.0 million and net income margin increased to 14.1% from 12.6% for the three months ended June 30, 2021. Adjusted EBITDA for the three months ended June 30, 2022 increased 28.3% to $73.9 million from $57.6 million, while Adjusted EBITDA margin increased to 20.9% from 20.8% for the three months ended June 30, 2021.

Comparison of the Fiscal Year Ended June 30, 2022 to the Fiscal Year Ended June 30, 2021

Net sales for fiscal year 2022 increased $288.4 million, or 31.1%, to $1,214.9 million, compared to fiscal year 2021. The increase in net sales was driven primarily by increased unit volumes across all three segments, year-over-year price increases and a favorable model mix. We recognized an increase in net sales and volumes across all three segments during fiscal year 2022. Unit volume for fiscal year 2022 increased 1,070 units, or 13.1%, to 9,255 units compared to fiscal year 2021.

Net sales attributable to our Malibu segment increased $124.0 million, or 25.6%, to $607.6 million for fiscal year 2022 compared to fiscal year 2021. Unit volumes attributable to our Malibu segment increased 332 units for fiscal year 2022 compared to fiscal year 2021. The increase in net sales was driven by year-over-year price increases, a favorable model mix and increased volume resulting from strong demand for our Malibu and Axis model boats.

Net sales from our Saltwater Fishing segment increased $99.0 million, or 40.8%, to $341.9 million for fiscal year 2022 compared to fiscal year 2021. Unit volumes increased 607 units for fiscal year 2022 compared to fiscal year 2021. The increase in net sales was driven primarily by the acquisition of Maverick Boat Group on December 31, 2020, year-over-year price increases and a favorable model mix. The increase in unit volumes resulted primarily from our addition of the Maverick Boat Group.

Net sales from our Cobalt segment increased $65.4 million, or 32.7%, to $265.4 million for fiscal year 2022 compared to fiscal year 2021. Unit volumes attributable to Cobalt increased 131 units for fiscal year 2022 compared to fiscal year 2021. The increase in net sales was driven primarily by a favorable model mix, year-over-year price increases and increased volume. We experienced increased volume at Cobalt as a result of our prior year investments in the Cobalt facilities to optimize efficiency and expand capacity.

Our overall net sales per unit increased 16.0% to $131,267 per unit for fiscal year 2022 compared to fiscal year 2021. Net sales per unit for our Malibu segment increased 17.6% to $117,445 per unit for fiscal year 2022 compared to fiscal year 2021, primarily driven by year-over-year price increases and a favorable model mix. Net sales per unit for our Saltwater Fishing segment decreased 1.2% to $168,025 per unit for fiscal year 2022 compared to fiscal year 2021, primarily driven 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 24.2% to $129,655 per unit for fiscal year 2022 compared to fiscal year 2021, driven primarily by a favorable model mix and year-over-year price increases.

Cost of sales for fiscal year 2022 increased $214.8 million, or 31.1%, to $904.8 million compared to fiscal year 2021. The increase in cost of sales was driven by higher costs related to higher net sales in all our segments and increased prices due to supply chain disruptions and inflationary pressures that have impacted prices on parts and components. In the Malibu segment, higher per unit material and labor costs contributed $66.7 million to the increase in cost of sales and were driven by an increased mix of larger products that corresponded with higher net sales per unit. Within our Saltwater Fishing segment, higher per unit material and labor costs contributed $87.3 million to the increase in cost of sales and were driven by the acquisition of Maverick Boat Group on December 31, 2020 and an increased mix of larger products that corresponded with higher net sales per unit. In the Cobalt segment, higher per unit material and labor costs contributed $44.8 million to the increase in cost of sales and were driven by an increased mix of larger products that corresponded with higher net sales per unit.

Gross profit for fiscal year 2022 increased $73.6 million, or 31.1%, compared to fiscal year 2021. 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 remained flat at 25.5% in fiscal year 2022.

Selling and marketing expense for fiscal year 2022 increased $5.4 million, or 30.6% to $22.9 million compared to fiscal year 2021. The increase was driven primarily by incremental selling and marketing expenses from the acquisition of Maverick Boat Group, increased compensation and personnel-related expenses, increased travel and promotional events that resumed in fiscal year 2022 after being suspended for Covid during the early portion of fiscal year 2021. As a percentage of sales, selling and marketing expense remained flat at 1.9% for fiscal year 2022. General and administrative expense for fiscal year 2022 increased $4.5 million, or 7.2%, to $66.4 million compared to fiscal year 2021. The increase in general and administrative expenses was driven primarily by an increase in compensation and personnel-related expenses, travel related expenses, information technology infrastructure expenses, incremental general and administrative expenses due to the acquisition of Maverick Boat Group, facility maintenance expenses and insurance expenses partially offset by lower professional fees and 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 120 basis points to 5.4% for fiscal year 2022 compared to 6.6% for fiscal year 2021. Amortization expense for fiscal year 2022 decreased $0.3 million, or 4.1%, to $7.0 million compared to fiscal year 2021, due to a decrease of amortization expense related to fully amortized intangibles.

Operating income for fiscal year 2022 increased to $213.8 million from $149.8 million for fiscal year 2021. Net income for fiscal year 2022 increased 43.0% to $163.4 million from $114.3 million and net income margin increased to 13.5% for fiscal year 2022 from 12.3% for fiscal year 2021. Adjusted EBITDA for fiscal year 2022 increased 29.7% to $246.5 million from $190.1 million, while Adjusted EBITDA margin decreased to 20.3% for fiscal year 2022 from 20.5% for fiscal year 2021.

Fiscal 2023 Guidance

For the full fiscal year 2023, Malibu anticipates net sales growth percentage in the mid to high single digits year-over-year and Adjusted EBITDA margin down slightly 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 Information

The Company will host a webcast and conference call to discuss fourth quarter and fiscal year 2022 results on Thursday, August 25, 2022, at 8:30 a.m. Eastern Time. Investors and analysts can participate on the conference call by registering at this link where they will be provided a phone number and access code. 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 . A replay of the webcast will also be archived on the Company's website for twelve months.