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Malibu Boats, Inc. announces Q2 fiscal 2015 results

By Malibu Boats, Inc.

LOUDON, Tenn.  -- Malibu Boats, Inc. announced its financial results for the second quarter of fiscal 2015 ended December 31, 2014.

Highlights for the Second Quarter of Fiscal 2015

  • Net sales for the second quarter of fiscal 2015 increased 26.3% to $55.5 million compared to the second quarter of fiscal 2014.
  • Unit volume increased 27.9% to 847 boats, including 60 units from Australia.
  • Net sales per unit for the second quarter of fiscal 2015 decreased 1.3% to $65,506 compared to the second quarter of fiscal 2014, while net sales per unit in the U.S. increased 1.6% over the same period in fiscal 2014.
  • Gross profit for the second quarter of fiscal 2015 increased 21.1% to $14.2 million compared to the second quarter of fiscal 2014.
  • Adjusted EBITDA for the second quarter of fiscal 2015 increased 19.9% to $10.4 million from the same period in fiscal 2014.
  • Adjusted fully distributed net income for the second quarter of fiscal 2015 increased 45.5% to $5.8 million, or $0.26 per share, on a fully distributed weighted average share count of 22.6 million shares of Class A Common Stock.

Jack Springer, Chief Executive Officer, stated, "We had a strong second fiscal quarter and are pleased with the continued positive trends in our business. Net sales were up over 26%, driven by our Australian acquisition and strong increase in unit volume. Our second fiscal quarter is an important period for Malibu. Our four new or completely remodeled boats, the 22 VLX, Axis A22, Axis T23 and Response LXR are showing great strength out of the gate and the 23 LSV, completely remodeled last year, is performing even better this year. We have launched more new features and innovations than any other year in the company's history. Feedback from the recent boat shows confirms that the new dash with a 12-inch touch screen and Viper II technology platform are homeruns, our integrated surf system combining Surf Gate and the new Power Wedge 2 is in high demand and the new G4 tower is a premium 'must have' for our Malibu Wakesetter boats."

Mr. Springer continued, "Looking ahead, we believe we are well positioned for the peak retail selling season. Early boat shows have gone well and the industry could benefit from lower gas prices and more normalized spring weather in the northern markets. While the strong U.S. currency could have some impact and flatten our international sales, we believe strong domestic demand will offset this."

Comparison of the Second Quarter Ended December 31, 2014 to the Second Quarter Ended December 31, 2013

Net sales for the three months ended December 31, 2014 increased $11.5 million, or 26.3%, to $55.5 million as compared to the three months ended December 31, 2013. Included in net sales for the three months ended December 31, 2014 were net sales of $4.4 million attributable to our Australia segment. Unit volume for the three months ended December 31, 2014 increased 185 units, or 27.9%, to 847 units as compared to the three months ended December 31, 2013. Of the 185 units added, 60 units were added as a result of our Australia segment and the remainder of the increase was primarily due to a demand driven increase in our daily production rate over the same period in the prior year. Net sales per unit decreased approximately 1.3% to $65,506 per unit for the three months ended December 31, 2014 compared to the three months ended December 31, 2013, primarily driven by the elimination of parts sales between our segments since the acquisition of our Australian licensee in October 2014. Net sales per unit for our U.S. segment increased approximately 1.6% for the three months ended December 31, 2014 compared to three months ended December 31, 2013, primarily driven by higher prices, partially offset by increased sales of our Axis brand which carry a lower average selling price than our Malibu brand.

Cost of sales for the three months ended December 31, 2014 increased $9.1 million, or 28.2%, to $41.3 million as compared to the three months ended December 31, 2013. Included in cost of sales was $0.6 million of integration related expenses attributable to the acquisition of our Australian licensee. The increase in cost of sales was primarily due to the 27.9% increase in unit volume and higher material cost per unit, driven primarily by higher material content per unit associated with the addition of new features such as our new Malibu dash for model year 2015 and increased optional feature selections such as the G4 tower, in addition to integration related expenses for our Australian acquisition.

Gross profit for the three months ended December 31, 2014 increased $2.5 million, or 21.1%, to $14.2 million compared to the three months ended December 31, 2013. The increase in gross profit resulted primarily from higher volumes. Gross margin decreased 110 basis points to 25.5% from 26.6% over the same period in fiscal 2014. The decrease in gross margin was driven by $0.6 million of integration related expenses attributable to the acquisition of our Australian licensee. Excluding these integration related expenses, gross margin remained flat at 26.6% for the three months ended December 31, 2014.

Selling and marketing expense for the three month period ended December 31, 2014 increased $0.5 million, or 34.5%, to $2.0 million compared to the three months ended December 31, 2013, due to increased marketing costs and the timing of promotional efforts associated with higher volumes, as well as, incremental selling and marketing related expenses in Australia. General and administrative expenses for the three months ended December 31, 2014 increased $1.5 million, or 48.0%, to $4.5 million as compared to the three months ended December 31, 2013. The increase in general and administrative expenses is primarily due to several factors including higher legal costs of $0.3 million associated with the Pacific Coast Marine Windshield, Ltd. and Nautique Boat Company, Inc. litigations, acquisition related expenses of $0.3 million attributable to the acquisition of our Australian licensee, higher stock compensation costs of $0.3 million and incremental expenses associated with being a public company. For the three months ended December 31, 2014, general and administrative expenses for our Australian operations were $0.3 million.

Operating income for the three month period ended December 31, 2014, increased 20.2% to $7.0 million from $5.8 million for the three month period ended December 31, 2013. Adjusted EBITDA in the second quarter of fiscal 2015 increased 19.9% to $10.4 million and Adjusted EBITDA margin decreased to 18.8% from 19.8% in the second quarter of fiscal 2014.

Webcast and Conference Call Information

The Company will host a webcast and conference call to discuss second quarter fiscal 2015 results today, February 5, 2015, at 8:30 a.m. Eastern Standard Time. Investors and analysts can participate on the conference call by dialing (855) 433-0928 or (484) 756-4263 and using Conference ID #62058943. 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 http://investors.malibuboats.com. A replay of the webcast will also be archived on the company's website for twelve months.

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