Malibu Boats announces Q3 fiscal 2017 results

Malibu Boats, Inc. (NASDAQ: MBUU) announced its financial results for the third quarter of fiscal 2017 ended March 31, 2017.

"We continue to experience strong growth and performance at Malibu. Our unit sales, revenue, gross profit, net income and Adjusted EBITDA are all company records for our fiscal third quarter,” said Jack Springer, chief executive officer of Malibu. “Our business in the United States continues to experience good growth while Canada is performing slightly better than last year and Australia remains consistently strong for Malibu. Our market share remains at record levels and our best-in-class operations continue to drive strong margins.

Highlights for the third quarter of fiscal 2017

  • Net sales increased 12.6 percent to $77.1 million compared to the third quarter of fiscal 2016.
  • Unit volume increased 10.4 percent to 1,054 boats compared to the third quarter of fiscal 2016.
  • Net sales per unit increased 2.0 percent to $73,196 and net sales per unit in the U.S. increased 1.2 percent to $72,749 compared to the third quarter of fiscal 2016.
  • Gross profit increased 16.1 percent to $21.4 million compared to the third quarter of fiscal 2016.
  • Net income increased 35.9 percent to $8.8 million, or $0.45 per share compared to the third quarter of fiscal 2016.
  • Adjusted EBITDA increased 19.0 percent to $16.8 million compared to the third quarter of fiscal 2016.
  • Adjusted fully distributed net income increased 22.2 percent to $9.4 million compared to the third quarter of fiscal 2016.
  • Adjusted fully distributed net income per share increased 22.5 percent to $0.49 on a fully distributed weighted average share count of 19.3 million shares of Class A Common Stock as compared to the third quarter of fiscal 2016.

Net sales for the three months ended March 31, 2017 increased $8.6 million, or 12.6 percent, to $77.1 million as compared to the three months ended March 31, 2016. Included in net sales for each of the three months ended March 31, 2017 and March 31, 2016 were net sales of $5.5 million, which Malibu says is attributable to its Australian business. Unit volume for the three months ended March 31, 2017 increased 99 units, or 10.4 percent, to 1,054 units as compared to the three months ended March 31, 2016 . The company says this was driven by demand for its new models such as the Malibu Wakesetter 21 VLX and 22 and 24 MXZs. Net sales per unit increased 2.0 percent to $73,196 per unit for the three months ended March 31, 2017 compared to the three months ended March 31, 2016, primarily driven by year-over-year price increases and lower discount activity, offset by a mix shift to Malibu’s new Response and 21 VLX models. Net sales per unit in the U.S. increased 1.2 percent to $72,749 for the three months ended March 31, 2017 compared to the three months ended March 31, 2016.

Gross profit for the three months ended March 31, 2017 increased $3.0 million, or 16.1 percent, to $21.4 million compared to the three months ended March 31, 2016. The increase in gross profit was due mainly to higher volumes. Gross margin for the three months ended March 31, 2017 increased 80 basis points from 26.9 percent to 27.7 percent over the same period in the prior fiscal year. The increase in gross margin was driven primarily by lower material cost per unit, offset by increases in labor and warranty expense.

Selling and marketing expenses for the three month period ended March 31, 2017 increased $0.2 million or 13.7 percent, compared to the three months ended March 31, 2016. As a percentage of sales, selling and marketing expenses were flat over the same period. General and administrative expenses for the three months ended March 31, 2017 increased $1.5 million, or 34.4 percent, to $6.0 million as compared to the three months ended March 31, 2016, largely due to an increase in legal expenses incurred in connection with ongoing litigation matters as well as higher incentive compensation and development costs associated with our engines vertical integration initiative which we initiated in fiscal year 2017.

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Operating income for the third quarter of fiscal 2017 increased to $13.0 million from $11.8 million in the third quarter of fiscal 2016. Net income for the third quarter of fiscal 2017 increased 35.9 percent to $8.8 million while net income margin increased to 11.5 percent from 9.5 percent in the third quarter of fiscal 2016. Adjusted EBITDA in the third quarter of fiscal 2017 increased 19.0 percent to $16.8 million from $14.1 million, while Adjusted EBITDA margin increased to 21.8 percent from 20.6 percent in the third quarter of fiscal 2016.

"Malibu's leadership delivering new product to market continues, led by the strength of demand for our new boats for 2017 as well as innovations and features that surpass the competition. In addition, our new product platform is generating demand and we have every confidence this trend will continue into the foreseeable future,” said Springer. "We are pleased to see the slight rebound in Canada this year despite currency rates being high and the oil and gas environment still soft. Demand in other parts of the world remains soft and we expect that those areas will remain flat. However, we are confident that North America will continue to grow, with the U.S. domestic market leading the way."

The company hosted a webcast and conference call to discuss third quarter fiscal 2017 results on Wednesday, May 3 at 8:30 a.m. Eastern Time. A replay of the webcast will also be archived on the company's website for twelve months.

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