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Malibu Boats, Inc. Announces Third Quarter Fiscal 2024 Results

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Malibu Boats, Inc. announced a decline in net sales by 45.8% in the third quarter of fiscal 2024, with significant decreases in unit volume, gross profit, GAAP net income, and Adjusted EBITDA. The company reported a net loss of $67.8 million, including impairment charges. Despite challenges in the retail market, the company remains focused on returning inventories to stable levels. Malibu Boats anticipates a continued softening in retail demand for the fiscal year 2024 but is confident in its ability to generate positive cash flow and support market growth.

Positive
  • None.
Negative
  • Net sales decreased by 45.8% to $203.4 million in the third quarter of fiscal 2024 compared to the same period in fiscal 2023.

  • Unit volume decreased by 51.9% to 1,269 units in the third quarter of fiscal 2024 compared to the same period in fiscal 2023.

  • Gross profit decreased by 59.1% to $40.3 million in the third quarter of fiscal 2024 compared to the same period in fiscal 2023.

  • GAAP net income decreased by 226.8% to a net loss of $67.8 million in the third quarter of fiscal 2024, inclusive of impairment charges.

  • Adjusted EBITDA decreased by 69.2% to $24.4 million in the third quarter of fiscal 2024 compared to the same period in fiscal 2023.

  • The company recognized an impairment charge of $88.4 million related to the Maverick Boat Group reporting unit in the third quarter of fiscal 2024.

  • Malibu Boats anticipates a net sales decline ranging from forty to forty-one percent for the full fiscal year 2024 with an Adjusted EBITDA margin ranging from 10.1% to 10.5%.

Malibu Boats, Inc.'s recent financial disclosures indicate a significant downturn in their Q3 performance when contrasted against the prior year. A 45.8% reduction in net sales and a substantial 51.9% drop in unit volume are indicative of severe market headwinds. Moreover, the reported net loss of $67.8 million starkly contrasts the profit from the same quarter last year, primarily due to impairment charges for their Maverick Boat Group unit. This impairment suggests a permanent reduction in the value of these assets, often reflective of adverse market conditions or poor business performance. Furthermore, the 690 basis point decrease in Adjusted EBITDA margin is telling of profitability pressures, although it's worth noting that net sales per unit have increased across all segments, likely due to inflation-driven price increases. However, this increase in per unit price does not seem to have compensated for the overall decrease in volume. Looking ahead, the company's guidance anticipates a continued decline in net sales, with an Adjusted EBITDA margin compression. For investors, these results may suggest a need for caution and a close watch on the company's ability to navigate the softened demand and return to profitable growth.

The broader context of Malibu Boats, Inc.'s results reveals industry-wide challenges. The softened retail demand and increased dealer inventory levels mirror trends seen in other discretionary consumer goods amid economic pressures such as rising interest rates and inflation. The company's efforts to reduce production and manage inventory heading into the peak selling season are aligned with typical cyclical strategies; however, the efficacy of these actions in the face of a potential economic downturn remains to be seen. Additionally, while the company has highlighted pockets of strength within its portfolio, the significant impairment charge for the Maverick Boat Group suggests a strategic misstep or a miscalculation of the segment's market trajectory. Investors should consider the company's operational adjustments and strategic focus areas, such as its three pillars of success (product, production and distribution), as potential indicators of its capability to rebound and seize market opportunities when conditions stabilize.

LOUDON, Tenn., May 02, 2024 (GLOBE NEWSWIRE) -- Malibu Boats, Inc. (Nasdaq: MBUU) today announced its financial results for the third quarter ended March 31, 2024.

Third Quarter Fiscal 2024 Highlights Compared to Third Quarter Fiscal 2023:

  • Net sales decreased 45.8% to $203.4 million
  • Unit volume decreased 51.9% to 1,269 units
  • Gross profit decreased 59.1% to $40.3 million
  • GAAP net income decreased 226.8% to a net loss of $67.8 million, inclusive of goodwill and other intangible asset impairment charges of $88.4 million incurred for the Maverick Boat Group reporting unit
  • GAAP net income available to Class A Common Stock per share (diluted) decreased 230.7% to a net loss of $3.28 per share
  • Adjusted EBITDA decreased 69.2% to $24.4 million
  • Adjusted fully distributed net income per share decreased 75.7% to $0.63 per share on a fully distributed weighted-average share count of 21.0 million shares of Class A Common Stock

“In the fiscal third quarter, we continued to navigate a softened retail demand environment, with notable weakness in the tow boat and value boat markets. Despite this challenge, we are encouraged by pockets of strength we are seeing across Cobalt and Pursuit, showcasing resiliency within certain segments of our portfolio,” commented Jack Springer, Chief Executive Officer of Malibu Boats, Inc. “Our channel inventories, which remain elevated, are showing signs of improvement as we enter the peak selling season, with a gradual decline underway. As we progress through the remainder of the year, our focus remains on returning inventories to more normalized levels through production reductions and the delivery of boats in the selling season. We anticipate that these efforts will position us for long-term stability and growth.”

“Moving forward, we expect there to be a continued softening in retail demand for the remainder of fiscal year 2024. Despite this, we have established a strong foundation and ability to generate positive cash and are poised to support market growth as things correct. We remain confident in our ability to execute our long-term strategy, particularly in a normalized cycle where we see ample opportunity to thrive. Anchored by our three pillars of success – product, production, and distribution – we stand ready to excel. With our industry-leading innovation driving our premium product portfolio, an expanded production footprint, and a robust dealer distribution network, we believe we are primed to capture greater market share and drive profitable growth for our shareholders,” continued Mr. Springer.

Third Quarter Fiscal 2024 Results (Unaudited)

 Three Months Ended
March 31,
 Nine Months Ended
March 31,
  2024   2023   2024   2023 
 (Dollars In Thousands)
Net Sales$203,419  $375,119  $670,323  $1,016,062 
Gross Profit$40,333  $98,574  $134,602  $248,833 
Gross Profit Margin 19.8 %  26.3 %  20.1 %  24.5 %
Net (Loss) Income$(67,759) $53,452  $(36,845) $125,953 
Net (Loss) Income Margin (33.3)%  14.2 %  (5.5)%  12.4 %
Adjusted EBITDA$24,409  $79,267  $86,327  $193,937 
Adjusted EBITDA Margin 12.0 %  21.1 %  12.9 %  19.1 %
                

Net sales for the three months ended March 31, 2024 decreased $171.7 million, or 45.8%, to $203.4 million as compared to the three months ended March 31, 2023. The decrease in net sales was driven primarily by decreased unit volumes across all segments resulting primarily from decreased wholesale shipments and increased dealer flooring program costs across all segments resulting from higher interest rates and elevated channel inventory levels, partially offset by a favorable model mix in our Saltwater Fishing segment and inflation-driven year-over-year price increases. Unit volume for the three months ended March 31, 2024, decreased 1,368 units, or 51.9%, to 1,269 units as compared to the three months ended March 31, 2023. Our unit volume decreased primarily due to lower wholesale shipments across all segments driven by lower retail activity and elevated channel inventories during the period.

Net sales attributable to our Malibu segment decreased $112.4 million, or 65.1%, to $60.2 million for the three months ended March 31, 2024, compared to the three months ended March 31, 2023. Unit volumes attributable to our Malibu segment decreased 886 units for the three months ended March 31, 2024, compared to the three months ended March 31, 2023, primarily due to lower wholesale shipments driven by lower retail activity during the period and elevated dealer channel inventory levels. The decrease in net sales was driven by a decrease in units and increased dealer flooring program costs, partially offset by a favorable model mix and inflation-driven year-over-year price increases.

Net sales attributable to our Saltwater Fishing segment decreased $41.4 million, or 33.8%, to $81.2 million, for the three months ended March 31, 2024, compared to the three months ended March 31, 2023. Unit volume decreased 337 units for the three months ended March 31, 2024 compared to the three months ended March 31, 2023, primarily due to lower wholesale shipments driven by lower retail activity during the period and elevated dealer channel inventory levels. The decrease in net sales was driven by a decrease in units and increased dealer flooring program costs, partially offset by a favorable model mix and inflation-driven year-over-year price increases.

Net sales attributable to our Cobalt segment decreased $17.9 million, or 22.4%, to $62.0 million for the three months ended March 31, 2024, compared to the three months ended March 31, 2023. Unit volumes attributable to Cobalt decreased 145 units for the three months ended March 31, 2024 compared to the three months ended March 31, 2023, primarily due to lower wholesale shipments driven by lower retail activity during the period and elevated dealer channel inventory levels. The decrease in net sales was driven primarily by a decrease in units and increased dealer flooring program costs, partially offset by inflation-driven year-over-year price increases.

Overall consolidated net sales per unit increased 12.7% to $160,299 per unit for the three months ended March 31, 2024, compared to the three months ended March 31, 2023. Net sales per unit for our Malibu segment increased 3.3% to $133,173 per unit for the three months ended March 31, 2024, compared to the three months ended March 31, 2023, driven by inflation-driven year-over-year price increases, partially offset by increased dealer flooring program costs. Net sales per unit for our Saltwater Fishing segment increased 24.8% to $213,184 per unit for the three months ended March 31, 2024 driven by a favorable model mix and inflation-driven year-over-year price increases, partially offset by increased dealer flooring program costs. Net sales per unit for our Cobalt segment increased 3.4% to $142,206 per unit for the three months ended March 31, 2024, compared to the three months ended March 31, 2023, driven by inflation-driven year-over-year price increases, partially offset by increased dealer flooring program costs.

Cost of sales for the three months ended March 31, 2024 decreased $113.5 million, or 41.0%, to $163.1 million as compared to the three months ended March 31, 2023. The decrease in cost of sales was primarily driven by a 45.8% decrease in net sales due to lower unit volumes, partially offset by higher per unit material and labor costs of $4.8 million, $9.5 million and $2.0 million for the Malibu, Saltwater Fishing, and Cobalt segments, respectively. The increase in per unit material and labor costs was primarily driven by increased prices due to inflationary pressures, fixed cost deleverage and a model mix that corresponds to higher cost per unit in our Malibu and Saltwater Fishing segments.

Gross profit for the three months ended March 31, 2024 decreased $58.2 million, or 59.1%, to $40.3 million compared to the three months ended March 31, 2023. The decrease in gross profit was driven primarily by lower net sales partially offset by decreased cost of sales for the reasons noted above. Gross margin for the three months ended March 31, 2024 decreased 650 basis points from 26.3% to 19.8% driven primarily by fixed cost deleverage due to lower sales, an increased mix of the Saltwater Fishing segment, and increased dealer flooring program costs.

We recognized an impairment charge of $88.4 million during the three months ended March 31, 2024 related to our Maverick Boat Group reporting unit. During the three months ended March 31, 2024, we determined certain indicators of impairment existed, including a decline, in the fourth quarter of fiscal year 2024 and fiscal year 2025 forecasts, in the outlook for sales and operating performance relative to our business plan and a deterioration in general macroeconomic conditions, including rising interest rates and inflationary pressures on labor and supply costs. Selling and marketing expenses for the three months ended March 31, 2024 decreased $0.6 million, or 8.7% to $6.6 million compared to the three months ended March 31, 2023. The decrease was driven primarily by a decrease in travel and marketing events. As a percentage of sales, selling and marketing expenses increased 130 basis points to 3.2% for the three months ended March 31, 2024 compared to 1.9% for the three months ended March 31, 2023. General and administrative expenses for the three months ended March 31, 2024 decreased $0.8 million, or 4.4%, to $18.6 million as compared to the three months ended March 31, 2023 driven primarily by a decrease in personnel-related expenses, partially offset by increased information technology cost. As a percentage of sales, general and administrative expenses increased 390 basis points to 9.1% for the three months ended March 31, 2024 compared to 5.2% for the three months ended March 31, 2023. Amortization expense remained flat at $1.7 million for the three months ended March 31, 2024.

Operating (loss) income for the third quarter of fiscal year 2024 decreased to an operating loss of $74.9 million from an operating income $70.3 million in the third quarter of fiscal year 2023. Net (loss) income for the third quarter of fiscal year 2024 decreased 226.8% to a net loss of $(67.8) million from net income of $53.5 million and net (loss) income margin decreased to (33.3)% from 14.2% in the third quarter of fiscal year 2023. Adjusted EBITDA in the third quarter of fiscal year 2024 decreased 69.2% to $24.4 million from $79.3 million, while Adjusted EBITDA margin decreased to 12.0% from 21.1% in the third quarter of fiscal year 2023.

Fiscal 2024 Guidance

For the full fiscal year 2024, Malibu anticipates net sales decline ranging from forty to forty-one percent, year-over-year, and Adjusted EBITDA margin ranging from 10.1% to 10.5%.

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 costs related to the Company’s vertical integration initiatives 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 third quarter of fiscal year 2024 results on Thursday, May 2, 2024, at 8:30 a.m. Eastern Time. Investors and analysts can participate on the conference call by dialing (844) 695-5523 or (412) 317-0699 and requesting Malibu Boats. 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 https://malibuboatsinc.com/investor-information/events-presentations. A replay of the webcast will also be archived on the Company’s website for twelve months.

About Malibu Boats, Inc.

Based in Loudon, Tennessee, Malibu Boats, Inc. (MBUU) is a leading designer, manufacturer and marketer of a diverse range of recreational powerboats, including performance sport, sterndrive and outboard boats. Malibu Boats, Inc. is the market leader in the performance sport boat category through its Malibu and Axis boat brands, the leader in the 20’ - 40’ segment of the sterndrive boat category through its Cobalt brand, and in a leading position in the saltwater fishing boat market with its Pursuit and Cobia offshore boats and Pathfinder, Maverick, and Hewes flats and bay boat brands. A pre-eminent innovator in the powerboat industry, Malibu Boats, Inc. designs products that appeal to an expanding range of recreational boaters, fisherman and water sports enthusiasts whose passion for boating is a key component of their active lifestyles. For more information, visit www.malibuboats.com, www.axiswake.com, www.cobaltboats.com, www.pursuitboats.com, or www.maverickboatgroup.com.

Non-GAAP Financial Measures

This release includes the following financial measures defined as non-GAAP financial measures by the Securities and Exchange Commission: Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Fully Distributed Net (Loss) Income and Adjusted Fully Distributed Net (Loss) Income per Share. These measures have limitations as analytical tools and should not be considered as an alternative to, or more meaningful than, net (loss) income as determined in accordance with U.S. generally accepted accounting principles (“GAAP”) or as an indicator of our liquidity. Our presentation of these non-GAAP financial measures should also not be construed as an inference that our results will be unaffected by unusual or non-recurring items. Our computations of these non-GAAP financial measures may not be comparable to other similarly titled measures of other companies.

We define Adjusted EBITDA as net (loss) income before interest expense, income taxes, depreciation, amortization, impairment expense and non-cash, non-recurring or non-operating expenses, including certain professional fees and non-cash compensation expense. We define Adjusted EBITDA Margin as Adjusted EBITDA divided by net sales. Adjusted EBITDA and Adjusted EBITDA Margin are not measures of net (loss) income as determined by GAAP. Management believes Adjusted EBITDA and Adjusted EBITDA Margin allow investors to evaluate our operating performance and compare our results of operations from period to period on a consistent basis by excluding items that management does not believe are indicative of our core operating performance. Management uses Adjusted EBITDA to assist in highlighting trends in our operating results without regard to our financing methods, capital structure, and non-recurring or non-operating expenses. We exclude the items listed above from net (loss) income in arriving at Adjusted EBITDA because these amounts can vary substantially from company to company within our industry depending upon accounting methods and book values of assets, capital structures, the methods by which assets were acquired and other factors.

Certain items excluded from Adjusted EBITDA are significant components in understanding and assessing a company’s financial performance, such as a company’s cost of capital and tax structure, as well as the historical costs of depreciable assets.

We define Adjusted Fully Distributed Net (Loss) Income as net (loss) income attributable to Malibu Boats, Inc. (i) excluding income tax expense, (ii) excluding the effect of non-recurring or non-cash items, (iii) assuming the exchange of all LLC units into shares of Class A Common Stock, which results in the elimination of non-controlling interest in Malibu Boats Holdings, LLC (the "LLC"), and (iv) reflecting an adjustment for income tax expense on fully distributed net (loss) income before income taxes at our estimated effective income tax rate. Adjusted Fully Distributed Net (Loss) Income is a non-GAAP financial measure because it represents net (loss) income attributable to Malibu Boats, Inc., before non-recurring or non-cash items and the effects of non-controlling interests in the LLC. We use Adjusted Fully Distributed Net (Loss) Income to facilitate a comparison of our operating performance on a consistent basis from period to period that, when viewed in combination with our results prepared in accordance with GAAP, provides a more complete understanding of factors and trends affecting our business than GAAP measures alone. We believe Adjusted Fully Distributed Net (Loss) Income assists our board of directors, management and investors in comparing our net (loss) income on a consistent basis from period to period because it removes non-cash or non-recurring items, and eliminates the variability of non-controlling interest as a result of member owner exchanges of LLC units into shares of Class A Common Stock. In addition, because Adjusted Fully Distributed Net (Loss) Income is susceptible to varying calculations, the Adjusted Fully Distributed Net (Loss) Income measures, as presented in this release, may differ from and may, therefore, not be comparable to similarly titled measures used by other companies.

A reconciliation of our net (loss) income as determined in accordance with GAAP to Adjusted EBITDA and the numerator and denominator for our net (loss) income available to Class A Common Stock per share to Adjusted Fully Distributed Net (Loss) Income per share of Class A Common Stock is provided under "Reconciliation of Non-GAAP Financial Measures."

Cautionary Statement Concerning Forward Looking Statements

This press release includes forward-looking statements (as such term is defined in the Private Securities Litigation Reform Act of 1995). Forward-looking statements can be identified by such words and phrases as “believes,” “anticipates,” “expects,” “intends,” “estimates,” “may,” “will,” “should,” “continue” and similar expressions, comparable terminology or the negative thereof, and includes statements in this press release regarding potential positive retail demand trends from upcoming boat shows, our outlook for the marine industry and broader economy and our ability to continue to deliver value for our stockholders.

Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied in the forward-looking statements, including, but not limited to: general industry, economic and business conditions; our large fixed cost base; increases in the cost of, or unavailability of, raw materials, component parts and transportation costs; disruptions in our suppliers’ operations; our reliance on third-party suppliers for raw materials and components and any interruption of our informal supply arrangements; our reliance on certain suppliers for our engines and outboard motors; our ability to meet our manufacturing workforce needs; exposure to workers' compensation claims and other workplace liabilities; our ability to grow our business through acquisitions and integrate such acquisitions to fully realize their expected benefits; our growth strategy which may require us to secure significant additional capital; our ability to protect our intellectual property; disruptions to our network and information systems; our success at developing and implementing a new enterprise resource planning system; risks inherent in operating in foreign jurisdictions; the effects of the COVID-19 pandemic on us; a natural disaster, global pandemic or other disruption at our manufacturing facilities; increases in income tax rates or changes in income tax laws; our dependence on key personnel; our ability to enhance existing products and market new or enhanced products; the continued strength of our brands; the seasonality of our business; intense competition within our industry; increased consumer preference for used boats or the supply of new boats by competitors in excess of demand; competition with other activities for consumers’ scarce leisure time; changes in currency exchange rates; inflation and increases in interest rates; an increase in energy and fuel costs; our reliance on our network of independent dealers and increasing competition for dealers; our ability to replace our former dealer, Tommy's Boats; the financial health of our dealers and their continued access to financing; our obligation to repurchase inventory of certain dealers; our exposure to claims for product liability and warranty claims; changes to U.S. trade policy, tariffs and import/export regulations; any failure to comply with laws and regulations including environmental, workplace safety and other regulatory requirements; our holding company structure; covenants in our credit agreement governing our revolving credit facility which may limit our operating flexibility; our variable rate indebtedness which subjects us to interest rate risk; our obligation to make certain payments under a tax receivables agreement; any failure to maintain effective internal control over financial reporting or disclosure controls or procedures; and other factors affecting us detailed from time to time in our filings with the Securities and Exchange Commission. Many of these risks and uncertainties are outside our control, and there may be other risks and uncertainties which we do not currently anticipate because they relate to events and depend on circumstances that may or may not occur in the future. Although we believe that the expectations reflected in any forward-looking statements are based on reasonable assumptions at the time made, we can give no assurance that our expectations will be achieved. Undue reliance should not be placed on these forward-looking statements, which speak only as of the date hereof. We undertake no obligation (and we expressly disclaim any obligation) to update or supplement any forward-looking statements that may become untrue because of subsequent events, whether because of new information, future events, changes in assumptions or otherwise. Comparison of results for current and prior periods are not intended to express any future trends or indications of future performance, unless expressed as such, and should only be viewed as historical data.

Investor Contacts

Malibu Boats, Inc.
Bruce Beckman
Chief Financial Officer
(865) 458-5478
InvestorRelations@MalibuBoats.com


MALIBU BOATS, INC. AND SUBSIDIARIES
 
Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income (Unaudited)
(In thousands, except share and per share data)
 
 Three Months Ended 
March 31,
 Nine Months Ended 
March 31,
  2024   2023   2024   2023 
Net sales$203,419  $375,119  $670,323  $1,016,062 
Cost of sales 163,086   276,545   535,721   767,229 
Gross profit 40,333   98,574   134,602   248,833 
Operating expenses:       
Selling and marketing 6,552   7,176   17,914   18,560 
General and administrative 18,608   19,455   54,753   57,732 
Goodwill and other intangible asset impairment 88,389      88,389    
Amortization 1,686   1,680   5,114   5,111 
Operating income (74,902)  70,263   (31,568)  167,430 
Other expense, net:       
Other (income) expense, net (14)  (110)  (33)  153 
Interest expense 296   649   1,851   2,844 
Other expense, net 282   539   1,818   2,997 
(Loss) income before (benefit) provision for income taxes (75,184)  69,724   (33,386)  164,433 
(Benefit) provision for income taxes (7,425)  16,272   3,459   38,480 
Net (loss) income (67,759)  53,452   (36,845)  125,953 
Net (loss) income attributable to non-controlling interest (928)  1,564   (154)  4,020 
Net (loss) income attributable to Malibu Boats, Inc.$(66,831) $51,888  $(36,691) $121,933 
        
Comprehensive income:       
Net (loss) income$(67,759) $53,452  $(36,845) $125,953 
Other comprehensive (loss):       
Change in cumulative translation adjustment (1,116)  (411)  (440)  (620)
Other comprehensive (loss) (1,116)  (411)  (440)  (620)
Comprehensive (loss) income (68,875)  53,041   (37,285)  125,333 
Less: comprehensive (loss) income attributable to non-controlling interest (943)  1,552   (150)  4,001 
Comprehensive (loss) income attributable to Malibu Boats, Inc.$(67,932) $51,489  $(37,135) $121,332 
        
Weighted-average shares outstanding used in computing net (loss) income per share:       
Basic 20,399,018   20,533,649   20,453,951   20,465,534 
Diluted 20,399,018   20,679,631   20,453,951   20,608,968 
Net (loss) income available to Class A Common Stock per share:       
Basic$(3.28) $2.53  $(1.79) $5.96 
Diluted$(3.28) $2.51  $(1.79) $5.92 


MALIBU BOATS, INC. AND SUBSIDIARIES
 
Condensed Consolidated Balance Sheets (Unaudited)
(In thousands, except share and per share data)
 
 March 31,
2024
 June 30,
2023
Assets   
Current assets   
Cash$47,116  $78,937 
Trade receivables, net 45,477   68,381 
Inventories, net 154,740   171,189 
Prepaid expenses and other current assets 8,659   7,827 
Total current assets 255,992   326,334 
Property, plant and equipment, net 251,003   204,792 
Goodwill 51,275   100,577 
Other intangible assets, net 177,127   221,458 
Deferred tax asset 53,624   62,573 
Other assets 8,565   10,190 
Total assets$797,586  $925,924 
Liabilities   
Current liabilities   
Accounts payable$39,145  $40,402 
Accrued expenses 108,871   187,078 
Income taxes and tax distribution payable 844   847 
Payable pursuant to tax receivable agreement, current portion 4,111   4,111 
Total current liabilities 152,971   232,438 
Deferred tax liabilities 18,103   28,453 
Other liabilities 8,591   9,926 
Payable pursuant to tax receivable agreement, less current portion 40,632   39,354 
Long-term debt 15,000    
Total liabilities 235,297   310,171 
    
Stockholders' Equity   
Class A Common Stock, par value $0.01 per share, 100,000,000 shares authorized; 20,439,597 shares issued and outstanding as of March 31, 2024; 20,603,822 issued and outstanding as of June 30, 2023 203   204 
Class B Common Stock, par value $0.01 per share, 25,000,000 shares authorized; 12 shares issued and outstanding as of March 31, 2024 and June 30, 2023     
Preferred Stock, par value $0.01 per share; 25,000,000 shares authorized; no shares issued and outstanding as of March 31, 2024 and June 30, 2023     
Additional paid in capital 72,782   86,321 
Accumulated other comprehensive loss (4,780)  (4,340)
Accumulated earnings 489,006   525,697 
Total stockholders' equity attributable to Malibu Boats, Inc. 557,211   607,882 
Non-controlling interest 5,078   7,871 
Total stockholders’ equity 562,289   615,753 
Total liabilities and stockholders' equity$797,586  $925,924 


MALIBU BOATS, INC. AND SUBSIDIARIES

Reconciliation of Non-GAAP Financial Measures

Reconciliation of Net (Loss) Income to Non-GAAP Adjusted EBITDA (Unaudited):

The following table sets forth a reconciliation of net (loss) income as determined in accordance with GAAP to Adjusted EBITDA and presentation of Net (Loss) Income Margin and Adjusted EBITDA Margin for the periods indicated (dollars in thousands):

 Three Months Ended
March 31,
 Nine Months Ended
March 31,
  2024   2023   2024   2023 
Net (loss) income$(67,759) $53,452  $(36,845) $125,953 
(Benefit) provision for income taxes (7,425)  16,272   3,459   38,480 
Interest expense 296   649   1,851   2,844 
Depreciation 6,544   5,463   19,211   16,147 
Amortization 1,686   1,680   5,114   5,111 
Goodwill and other intangible asset impairment 1 88,389      88,389    
Professional fees 2 839      1,986    
Stock-based compensation expense 3 1,839   1,751   3,162   5,402 
Adjusted EBITDA$24,409  $79,267  $86,327  $193,937 
Net Sales$203,419  $375,119  $670,323  $1,016,062 
Net (Loss) Income Margin 4 (33.3)%  14.2 %  (5.5)%  12.4 %
Adjusted EBITDA Margin 4 12.0 %  21.1 %  12.9 %  19.1 %


(1)Represents impairment of goodwill and trade names related to our Maverick Boat Group reporting unit in the amounts of $49.2 million and $39.2 million, respectively.
(2)For the three and nine months ended March 31, 2024, represents legal and advisory fees related to product liability cases that were settled for $100.0 million in June 2023.
(3)Represents equity-based incentives awarded to certain of our employees under the Malibu Boats, Inc. Long-Term Incentive Plan and profit interests issued under the previously existing limited liability company agreement of the LLC.
(4)We calculate net (loss) income margin as net (loss) income divided by net sales and we define adjusted EBITDA margin as adjusted EBITDA divided by net sales.


Reconciliation of Non-GAAP Adjusted Fully Distributed Net (Loss) Income (Unaudited):

The following table shows the reconciliation of the numerator and denominator for net (loss) income available to Class A Common Stock per share to Adjusted Fully Distributed Net (Loss) Income per Share of Class A Common Stock for the periods presented (in thousands except share and per share data):

 Three Months Ended
March 31,
 Nine Months Ended
March 31,
  2024  2023  2024  2023
Reconciliation of numerator for net (loss) income available to Class A Common Stock per share to Adjusted Fully Distributed Net Income per Share of Class A Common Stock:       
Net (loss) income attributable to Malibu Boats, Inc.$(66,831) $51,888 $(36,691) $121,933
(Benefit) provision for income taxes (7,425)  16,272  3,459   38,480
Professional fees 1 839     1,986   
Acquisition related expenses 2 1,659   1,641  5,013   4,995
Stock-based compensation expense 3 1,839   1,751  3,162   5,402
Goodwill and other intangible asset impairment 4 88,389     88,389   
Net (loss) income attributable to non-controlling interest 5 (928)  1,564  (154)  4,020
Fully distributed net income before income taxes 17,542   73,116  65,164   174,830
Income tax expense on fully distributed income before income taxes 6 4,298   17,767  15,965   42,484
Adjusted fully distributed net (loss) income$13,244  $55,349 $49,199  $132,346


 Three Months Ended
March 31,
 Nine Months Ended
March 31,
 2024 2023 2024 2023
Reconciliation of denominator for net (loss) income available to Class A Common Stock per share to Adjusted Fully Distributed Net Income per Share of Class A Common Stock:       
Weighted-average shares outstanding of Class A Common Stock used for basic net (loss) income per share:20,399,018 20,533,649 20,453,951 20,465,534
Adjustments to weighted-average shares of Class A Common Stock:       
Weighted-average LLC units held by non-controlling unit holders 7347,529 516,322 420,052 573,132
Weighted-average unvested restricted stock awards issued to management 8287,221 290,450 259,719 276,587
Adjusted weighted-average shares of Class A Common Stock outstanding used in computing Adjusted Fully Distributed Net Income per Share of Class A Common Stock:21,033,768 21,340,421 21,133,722 21,315,253


The following table shows the reconciliation of net (loss) income available to Class A Common Stock per share to Adjusted Fully Distributed Net (Loss) Income per Share of Class A Common Stock for the periods presented:

 Three Months Ended
March 31,
 Nine Months Ended
March 31,
  2024   2023   2024   2023 
Net (loss) income available to Class A Common Stock per share$(3.28) $2.53  $(1.79) $5.96 
Impact of adjustments:       
(Benefit) provision for income taxes (0.36)  0.79   0.17   1.88 
Professional fees 1 0.04      0.10    
Acquisition related expenses 2 0.09   0.08   0.25   0.24 
Stock-based compensation expense 3 0.09   0.09   0.15   0.27 
Goodwill and other intangible asset impairment 4 4.32      4.32    
Net (loss) income attributable to non-controlling interest 5 (0.04)  0.08   (0.01)  0.20 
Fully distributed net income per share before income taxes 0.86   3.57   3.19   8.55 
Impact of income tax expense on fully distributed income before income taxes 6 (0.21)  (0.87)  (0.78)  (2.08)
Impact of increased share count 9 (0.02)  (0.11)  (0.08)  (0.26)
Adjusted Fully Distributed Net Income per Share of Class A Common Stock$0.63  $2.59  $2.33  $6.21 


(1)For the three and nine months ended March 31, 2024, represents legal and advisory fees related to product liability cases that were settled for $100.0 million in June 2023.
(2)For the three and nine months ended March 31, 2024 and 2023, represents amortization of intangibles acquired in connection with the acquisitions of Maverick Boat Group, Pursuit and Cobalt.
(3)Represents equity-based incentives awarded to certain of our employees under the Malibu Boats, Inc. Long-Term Incentive Plan and profit interests issued under the previously existing limited liability company agreement of the LLC.
(4)Represents impairment of goodwill and trade names related to our Maverick Boat Group reporting unit in the amounts of $49.2 million and $39.2 million, respectively.
(5)Reflects the elimination of the non-controlling interest in the LLC as if all LLC members had fully exchanged their LLC Units for shares of Class A Common Stock.
(6)Reflects income tax expense at an estimated normalized annual effective income tax rate of 24.5% and 24.3% of income before income taxes for the three and nine months ended March 31, 2024 and 2023, respectively, assuming the conversion of all LLC Units into shares of Class A Common Stock. The estimated normalized annual effective income tax rate for fiscal year 2024 is based on the federal statutory rate plus a blended state rate adjusted for the research and development tax credit, the foreign derived intangible income deduction, and foreign income taxes attributable to our Australian subsidiary.
(7)Represents the weighted-average shares outstanding of LLC Units held by non-controlling interests assuming they were exchanged into Class A Common Stock on a one-for-one basis.
(8)Represents the weighted-average unvested restricted stock awards included in outstanding shares during the applicable period that were convertible into Class A Common Stock and granted to members of management.
(9)Reflects impact of increased share counts assuming the exchange of all weighted-average shares outstanding of LLC Units into shares of Class A Common Stock and the conversion of all weighted-average unvested restricted stock awards included in outstanding shares granted to members of management.

FAQ

What was Malibu Boats, Inc.'s net sales in the third quarter of fiscal 2024?

Malibu Boats, Inc.'s net sales in the third quarter of fiscal 2024 were $203.4 million.

What was the percentage decrease in unit volume in the third quarter of fiscal 2024 compared to the same period in fiscal 2023?

The unit volume decreased by 51.9% to 1,269 units in the third quarter of fiscal 2024 compared to the same period in fiscal 2023.

What was the gross profit for Malibu Boats, Inc. in the third quarter of fiscal 2024?

The gross profit for Malibu Boats, Inc. in the third quarter of fiscal 2024 was $40.3 million.

What was Malibu Boats, Inc.'s GAAP net income in the third quarter of fiscal 2024?

Malibu Boats, Inc.'s GAAP net income in the third quarter of fiscal 2024 decreased by 226.8% to a net loss of $67.8 million.

What was the Adjusted EBITDA for Malibu Boats, Inc. in the third quarter of fiscal 2024?

The Adjusted EBITDA for Malibu Boats, Inc. in the third quarter of fiscal 2024 decreased by 69.2% to $24.4 million.

Malibu Boats, Inc.

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