Home » News » Malibu Boats reports 28.8% sales growth for quarter

Malibu Boats reports 28.8% sales growth for quarter

By Malibu Boats

Malibu Boats, Inc. (Nasdaq:MBUU) today announced its financial results for the third quarter of fiscal 2015 ended March 31, 2015.

Highlights for the Third Quarter of Fiscal 2015

  • Net sales for the third quarter of fiscal 2015 increased 28.8% to $64.8 million compared to the third quarter of fiscal 2014.
  • Unit volume increased 24.4% to 980 boats, including 80 units from Australia.
  • Net sales per unit for the third quarter of fiscal 2015 increased approximately 3.5% to $66,084 compared to the third quarter of fiscal 2014 and net sales per unit in the U.S. increased approximately 6.7% over the same period in fiscal 2015.
  • Gross profit for the third quarter of fiscal 2015 increased 33.5% to $17.9 million compared to the third quarter of fiscal 2014.
  • Adjusted EBITDA for the third quarter of fiscal 2015 increased 31.9% to $13.3 million from the same period in fiscal 2014.
  • Adjusted fully distributed net income for the third quarter of fiscal 2015 increased 73.5% to $7.7 million, or $0.34 per share, on a fully distributed weighted average share count of 22.7 million shares of Class A Common Stock.

Jack Springer, Chief Executive Officer, stated, "Our third quarter results were strong and both our Malibu and Axis brands performed well. We continue to meet or exceed our internal goals and projections and remain pleased with the trends in the business. Driven by continued demand for our product in the U.S. and Australia, net sales for the quarter increased 28.8% and unit volume increased 24.4%. The third quarter is our boat show season quarter and the strong demand we've seen is reflected in the form of customized orders from retail consumers. Our four new or completely remodeled boats, the 22 VLX, Axis A22, Axis T23 and Response LXR continue to show strong first year performance, and orders for the completely remodeled 23 LSV are pacing ahead of last year, with the potential of us setting a new annual shipping record. There is normally a six month lag before new product begins to take root and this occurs simultaneously with the boat shows when everything is on display. Our new Malibu dash and G4 tower have been validated through their reception at the boat shows. We believe the Power Wedge 2 is rapidly becoming a feature that is gaining attention and we expect it to be a strong selling point for Malibu as we go forward. With its rapid planing ability and integration into our surfing system, it lowers fuel costs while providing a level of surf wave control never seen before and ahead of any other commodity on the market."

Mr. Springer continued, "As we look to the future, it appears we are having a more normal spring weather pattern, although the upper northeast had a late start. As expected, the strength of the U.S. dollar has had some impact on Canadian and international sales, but strong domestic demand has offset this. One area of the world that has benefited from the strengthened U.S. dollar is Australia, where demand for Malibu boats versus the imported competition remains in our favor."

Results of Operations for the Third Quarter of Fiscal 2015
   
Three Months Ended
March 31,
Nine Months Ended
March 31,
2015 2014 2015 2014
(In thousands, except unit data)
Net sales $64,762 $50,293 $167,905 $137,535
Cost of sales 46,865 36,892 123,751 101,417
Gross profit 17,897 13,401 44,154 36,118
Operating expenses:
Selling and marketing 1,657 1,512 5,326 4,454
General and administrative 6,124 10,299 17,090 15,322
Amortization 593 1,294 1,912 3,883
Operating income 9,523 296 19,826 12,459
Other income (expense):
Other 1,650 1,650 9
Interest expense (116) (1,207) (272) (2,980)
Other income (expense) 1,534 (1,207) 1,378 (2,971)
Net income (loss) before provision for income taxes 11,057 (911) 21,204 9,488
Provision for income taxes 3,414 76 5,596 76
Net income (loss) 7,643 (987) 15,608 9,412
Net income (loss) attributable to non-controlling interest 3,278 (617) 6,600 9,782
Net income (loss) attributable to Malibu Boats, Inc. $4,365 $(370) $9,008 $(370)
Unit Volumes 980 788 2,500 2,111
Net Sales per Unit $66,084 $63,824 $67,162 $65,152

Comparison of the Third Quarter Ended March 31, 2015 to the Third Quarter Ended March 31, 2014

Net sales for the three months ended March 31, 2015 increased $14.5 million, or 28.8%, to $64.8 million as compared to the three months ended March 31, 2014. Included in net sales for the three months ended March 31, 2015 were net sales of $5.3 million attributable to our Australia segment that we acquired on October 23, 2014. Unit volume for the three months ended March 31, 2015 increased 192 units, or 24.4%, to 980 units as compared to the three months ended March 31, 2014. Of the 192 units added, 80 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 increased approximately 3.5% to $66,084 per unit for the three months ended March 31, 2015 compared to the three months ended March 31, 2014, primarily driven by higher prices and increased selection of optional features, partially offset 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 6.7% for the three months ended March 31, 2015 compared to three months ended March 31, 2014, primarily driven by higher prices and increased selection of optional features.

Cost of sales for the three months ended March 31, 2015 increased $10.0 million, or 27.0%, to $46.9 million as compared to the three months ended March 31, 2014. Included in cost of sales was $0.3 million of integration related expenses attributable to the acquisition of our Australian licensee. The increase in cost of sales was primarily due to the 24.4% 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 March 31, 2015 increased $4.5 million, or 33.5%, to $17.9 million compared to the three months ended March 31, 2014. The increase in gross profit resulted primarily from higher volumes. Gross margin for the three months ended March 31, 2015 increased to 27.6% from 26.6% over the same period in the prior fiscal year. The increase in gross margin was primarily driven by lower labor and warranty expenses, offset by $0.3 million of integration related expenses attributable to the acquisition of our Australian licensee. Excluding these integration related expenses, gross margin increased to 28.1%, or 150 basis points, for the three months ended March 31, 2015.

Selling and marketing expense for the three month period ended March 31, 2015 increased approximately $0.2 million, or 9.6%, to $1.7 million compared to the three months ended March 31, 2014, due to increased volumes, as well as incremental selling and marketing related expenses in Australia. General and administrative expenses for the three months ended March 31, 2015 decreased $4.2 million, or 40.5%, to $6.1 million as compared to the three months ended March 31, 2014, largely due to one-time charges incurred in connection with our IPO in February 2014, including a $3.8 million termination fee for our previously existing management agreement and $1.8 million for stock compensation charges associated with the modification of awards granted in 2012, and $0.8 million in management fees attributable to the previously noted management agreement incurred through the date of our IPO on February 5, 2014, which we did not have for the quarter ended March 31, 2015. This decrease was partially offset by increased legal costs of $0.6 million primarily related to our Nautique Boat Company, Inc. litigation settled February 6, 2015, acquisition related expenses of $0.1 million attributable to the acquisition of our Australian licensee, and incremental expenses associated with becoming a public company. These charges were collectively approximately $1.0 million higher and primarily included payroll related expenses associated with additional headcount as well as fees for audit, tax, investor relations, and directors and officers insurance. For the three months ended March 31, 2015, general and administrative expenses for our Australian operations excluding amortization were $0.3 million. Amortization expense for the three months ended March 31, 2015 decreased $0.7 million, or 54.2%, to $0.6 million primarily due to the full amortization of our dealer relationship intangible acquired in 2006, offset by amortization attributable to intangible assets acquired in the acquisition of our Australian licensee in October 2014.

Operating income for the three month period ended March 31, 2015, increased to $9.5 million from $0.3 million for the three month period ended March 31, 2014. Adjusted EBITDA in the third quarter of fiscal 2015 increased 31.9% to $13.3 million and Adjusted EBITDA margin increased to 20.5% from 20.0% in the third quarter of fiscal 2014.

Leave a Reply

Your email address will not be published. Required fields are marked *

*