Malibu Boats, Inc. announced its best fourth quarter in company history in a earnings conference call early this morning.
"Fourth quarter and full fiscal year 2017 results were records for unit volumes, sales, net income, adjusted EBITDA and adjusted fully distributed net income per share," said Chief Executive Jack Springer. "Both our Malibu and Axis brands performed very well as validated by our large market share expansion. Our product, our dealers and our leadership of Malibu continue to set us apart from all our competitors."
Fourth quarter net sales increased 12.6 percent to $75.1 million compared to the fourth quarter of fiscal year 2016. Unit volume increased 8.9 percent to 1,004 boats compared to the fourth quarter of fiscal year 2016. Net sales per unit in the U.S. increased 3.2 percent over the same period in fiscal year 2016. Gross profit increased 12.4 percent to $20.0 million compared to the fourth quarter of fiscal year 2016.
Net income increased 151.0 percent to $10.3 million, or $0.54 per share compared to the fourth quarter of fiscal year 2016.
Fiscal year 2017 net sales increased 11.5 percent to $281.9 million compared to fiscal year 2016. Unit volume increased 6.9 percent to 3,815 boats compared to fiscal year 2016. Net sales per unit in the U.S. increased 11.6 percent over the same period in fiscal year 2016. Gross profit increased 12.3 percent to $75.0 million compared to fiscal year 2016. Net income increased 53.1 percent to $31.1 million, or $1.59 per share, compared to fiscal year 2016.
"Fiscal year 2017 was a record year, the best in Malibu's history on our above referenced financial and operational metrics as well as driving considerable market share gains," Springer said. "We have worked hard and positioned ourselves well to be able to drive increased performance in our business and are planning for another strong year in fiscal 2018."
Lower retail inventory levels fueled demand in fiscal year 2017, Springer said. Those levels continue to fuel demand in the first quarter of fiscal year 2018.
"The U.S. continues to more than offset weakness internationally as a result of oil and gas in Canada and currency issues in the rest of the world," Springer said. "On a positive note, we continue to believe the decrease in retail sales over the previous two or three years has abated and we are now showing recovery at the retail level which we believe will lead to recovery at the wholesale level."
The 23 LSV has been a strong addition for Malibu, Springer said. The 21 VLX was a very high demand boat last year and retaining the pricing at the first-year introduction price point will be impactful for fiscal year 2018. Another new Malibu will be introduced for the first time in November. "For Axis this year, the T22 and the A24 are both new boats we believe will perform very well," Springer said.
“We will always make long-term, strategic decisions to strengthen Malibu and build value,” Springer said during the earnings call. “In July we closed the acquisition of Cobalt Boats. This acquisition is consistent with our long-term growth strategy. It allows us to diversify our portfolio with sterndrive boats, outboard boats, and an additional portfolio of wakesurfing boats.”
Overall, the U.S. marine market remains healthy, Springer said. Interest rates continue to remain low, and businesses are growing and adding employees.
“Consumer confidence for our dealers and retail customers remains high,” he said. “We believe there are many reasons to be optimistic about the future of the U.S. market.”
For the sixth year in a row, Malibu’s performance boat segment had good growth. “The segment is 30-plus percent off the peak, which signifies additional upside,” he said.
Springer expects fiscal 2018 to be another very good year. “Inventories are reasonably low, and our first and second quarter order book is strong. We are bullish in our expectations,” he said.