Malibu Boats, Inc. announces record first quarter Fiscal 2023 results

Malibu Boats © Malibu Boats

Malibu Boats, Inc. (Nasdaq: MBUU) today announced its financial results for the first quarter ended September 30, 2022.

First Quarter Fiscal 2023 Highlights Compared to First Quarter Fiscal 2022:

• Net sales increased 19.2% to $302.2 million
• Unit volume increased 10.5% to 2,237 units
• Gross profit increased 24.9% to $74.6 million
• Net income increased 29.3% to $36.1 million
• Adjusted EBITDA increased 27.6% to $57.1 million
• Net income available to Class A Common Stock per share (diluted) increased 32.0% to $1.69 per share
• Adjusted fully distributed net income per share increased 30.7% to $1.79 per share on a fully distributed weighted average share count of 21.3 million shares of Class A Common Stock

"Supported by the continued strength across our brands, we maintained our momentum and delivered a record first quarter for fiscal year 2023, with net sales increasing 19.2%, net income increasing 29.3% and Adjusted EBITDA growing 27.6% compared to the prior year period. Our operating model, vertical integration capabilities and strategic leadership continue to shine through, helping us execute on our objectives and remain a market leader in the marine industry," commented Jack Springer, Chief Executive Officer of Malibu Boats, Inc.

"While supply chain challenges persist, demand for our larger, feature rich boats has remained strong, particularly in the saltwater segment, which was highlighted at the season's first boat shows. However, we are cognizant of the headwinds facing the consumer, and as always, our teams remain agile and poised to take action should we see any material shift in demand trends," continued Mr. Springer. "As we set our sails on the year ahead, we remain confident that our operational excellence and industry-leading brand power will continue to propel Malibu through fiscal year 2023, which we believe will ultimately generate profitable growth and long-term value for our stockholders."

First Quarter Fiscal 2023 Results (Unaudited)

Net sales for the three months ended September 30, 2022 increased $48.7 million, or 19.2%, to $302.2 million as compared to the three months ended September 30, 2021. The increase in net sales was driven primarily by increased unit volumes in our Malibu and Saltwater Fishing segments and inflation-driven year-over-year price increases. 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 September 30, 2022. Unit volume for the three months ended September 30, 2022, increased 213 units, or 10.5%, to 2,237 units as compared to the three months ended September 30, 2021. Our unit volume increased primarily due to strong demand at our Malibu and Saltwater Fishing segments.

Net sales attributable to our Malibu segment increased $26.9 million, or 22.8%, to $145.2 million for the three months ended September 30, 2022, compared to the three months ended September 30, 2021. Unit volumes attributable to our Malibu segment increased 159 units for the three months ended September 30, 2022, compared to the three months ended September 30, 2021. The increase in net sales was driven primarily by increased volume and inflation-driven year-over-year price increases.

Net sales attributable to our Saltwater Fishing segment increased $15.5 million, or 20.2%, to $92.2 million, for the three months ended September 30, 2022, compared to the three months ended September 30, 2021. Unit volume increased 63 units for the three months ended September 30, 2022 compared to the three months ended September 30, 2021. The increase in net sales was driven primarily by inflation-driven year-over-year price increases and increased volume.

Net sales attributable to our Cobalt segment increased $6.3 million, or 10.8%, to $64.8 million for the three months ended September 30, 2022, compared to the three months ended September 30, 2021. Unit volumes attributable to Cobalt decreased 9 units for the three months ended September 30, 2022 compared to the three months ended September 30, 2021. The increase in net sales was driven by inflation-driven year-over-year price increases and a favorable model mix, partially offset by a decrease in volumes.

Overall consolidated net sales per unit increased 7.9% to $135,097 per unit for the three months ended September 30, 2022, compared to the three months ended September 30, 2021. Net sales per unit for our Malibu segment increased 6.7% to $119,186 per unit for the three months ended September 30, 2022, compared to the three months ended September 30, 2021, driven by inflation-driven year-over-year price increases. Net sales per unit for our Saltwater Fishing segment increased 6.4% to $168,308 per unit for the three months ended September 30, 2022 driven by inflation-driven year-over-year price increases. Net sales per unit for our Cobalt segment increased 12.9% to $137,601 per unit for the three months ended September 30, 2022, compared to the three months ended September 30, 2021, driven by inflation-driven year-over-year price increases and a favorable model mix.

Cost of sales for the three months ended September 30, 2022 increased $33.9 million, or 17.5%, to $227.6 million as compared to the three months ended September 30, 2021. The increase in cost of sales was driven by 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 $14.9 million to the increase in cost of sales and were driven by increased prices due to supply chain disruptions and inflationary pressures. Within our Saltwater Fishing segment, higher per unit material and labor costs contributed $9.8 million to the increase in cost of sales and were driven by increased prices due to supply chain disruptions and inflationary pressures. In the Cobalt segment, higher per unit material and labor costs contributed $4.0 million to the increase in cost of sales and were driven by increased prices due to supply chain disruptions and inflationary pressures and by an increased mix of products that corresponded with higher net sales per unit.

Gross profit for the three months ended September 30, 2022 increased $14.9 million, or 24.9%, to $74.6 million compared to the three months ended September 30, 2021. 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 September 30, 2022 increased 110 basis points from 23.6% to 24.7% driven primarily by improved materials and labor margins.

Selling and marketing expenses for the three months ended September 30, 2022 increased $0.1 million, or 1.3% to $5.2 million compared to the three months ended September 30, 2021. The increase was driven primarily by increased travel expenses slightly offset by decreased promotional events. As a percentage of sales, selling and marketing expenses decreased 30 basis points to 1.7% for the three months ended September 30, 2022 compared to 2.0% for the three months ended September 30, 2021. General and administrative expenses for the three months ended September 30, 2022 increased $3.1 million, or 19.4%, to $19.2 million as compared to the three months ended September 30, 2021 driven primarily by an increase in compensation and personnel-related expenses, an increase in professional fees and an increase in travel expenses. As a percentage of sales, general and administrative expenses remained flat at 6.4% for the three months ended September 30, 2022. Amortization expense for the three months ended September 30, 2022 decreased $0.1 million, or 7.5% to $1.7 million compared to the three months ended September 30, 2021 due to a decrease of amortization expense related to fully amortized intangibles.

Operating income for the first quarter of fiscal year 2023 increased to $48.5 million from $36.7 million in the first quarter of fiscal year 2022. Net income for the first quarter of fiscal year 2023 increased 29.3% to $36.1 million from $27.9 million and net income margin increased to 11.9% from 11.0% in the first quarter of fiscal year 2022. Adjusted EBITDA in the first quarter of fiscal year 2023 increased 27.6% to $57.1 million from $44.7 million, while Adjusted EBITDA margin increased to 18.9% from 17.6% in the first quarter of fiscal year 2022.

Fiscal 2023 Guidance

For the fiscal full 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 first quarter of fiscal year 2023 results on Friday, November 4, 2022, at 8:30 a.m. Eastern Time. Investors and analysts can participate on the conference call by registering at the following URL: (register.vevent.com/register/BI860c7c90b6a949c2b78a6aaa230f421f) 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 at malibuboatsinc.com/investor-information/events-presentations. A replay of the webcast will also be archived on the Company's website for twelve months.