Net Sales Increased 6.9% to $50.3 million
Adjusted EBITDA Increased 12.9% to $10.1 million
Adjusted EBITDA Margin Increased to a Third Quarter Record of 20.0%
LOUDON, Tenn., May 7, 2014 (GLOBE NEWSWIRE) -- Malibu Boats, Inc.
(Nasdaq:MBUU) today announced its financial results for the third
quarter of fiscal 2014 ended March 31, 2014.
Highlights for the Third Quarter of Fiscal 2014
-
Net sales for the third quarter of fiscal 2014 increased 6.9% to $50.3
million compared to the third quarter of fiscal 2013. Unit volume
increased 2.9% to 788 boats and net sales per unit increased 3.9% during
the same period to $63,823.
-
Gross profit for the third quarter of fiscal 2014 increased 7.2% to
$13.4 million compared to the third quarter of fiscal 2013.
-
Adjusted EBITDA for the third quarter of fiscal 2014 increased 12.9%
to $10.1 million compared to the third quarter of fiscal 2013 and
Adjusted EBITDA margin increased 100 basis points during the same period
to a third quarter record of 20.0%.
-
Adjusted fully distributed net income for the third quarter of fiscal
2014 was $4.4 million, or $0.20 per share, on a fully distributed
weighted average share count of 22.4 million shares of Class A Common
Stock.
Jack Springer, Chief Executive Officer, stated, "We had another very
strong quarter - delivering on every operating and financial metric
across the board. Throughout the quarter, deliveries and orders remained
strong and sales growth was once again driven by increases in both unit
volume and average selling price. Both Malibu and Axis performed very
well and our new product introductions continued to create a lot of
excitement with our dealers and customers. The proof was in our adjusted
EBITDA margin, which increased to a third quarter record of 20%. This
is the highest third quarter margin in the company's history and we
continue to take a balanced approach to driving profitable growth."
Mr. Springer continued, "Looking forward to the new model year, we will
continue to build on our momentum in the marketplace by launching a
number of new and exciting products and features. While it's still a
little premature to discuss the details, these will include new or
completely remodeled boats and a number of features and innovations that
are designed to deliver never-before-seen features in our segment and
further expansion of our 'integrated surf package' across our line of
products. We are very excited about the new model year and believe we
are well positioned for continued growth, profitability and further
distinguishing ourselves from the competition."
Results of Operations for the Third Quarter of Fiscal 2014
|
|
|
| Three Months Ended | Nine Months Ended |
|
| March 31, | March 31, |
|
| 2014 | 2013 | 2014 | 2013 |
|
| (In thousands, except unit volume) |
|
Net sales |
$ 50,293 |
$ 47,062 |
$ 137,535 |
$ 118,039 |
|
Cost of sales |
36,892 |
34,561 |
101,417 |
88,376 |
|
Gross profit |
13,401 |
12,501 |
36,118 |
29,663 |
|
Operating expenses: |
|
|
|
|
|
Selling and marketing |
1,512 |
1,524 |
4,454 |
3,794 |
|
General and administrative |
10,299 |
4,150 |
15,322 |
11,302 |
|
Amortization |
1,294 |
1,294 |
3,883 |
3,883 |
|
Operating income |
296 |
5,533 |
12,459 |
10,684 |
|
Other income (expense): |
|
|
|
|
|
Other |
— |
3 |
9 |
8 |
|
Interest expense |
(1,207) |
(335) |
(2,980) |
(1,085) |
|
Other expense, net |
(1,207) |
(332) |
(2,971) |
(1,077) |
|
Net (loss) income before provision for income taxes |
(911) |
5,201 |
9,488 |
9,607 |
|
Provision for income taxes |
76 |
— |
76 |
— |
|
Net (loss) income |
(987) |
5,201 |
9,412 |
9,607 |
|
Net (loss) income attributable to non-controlling interest |
(617) |
5,201 |
9,782 |
9,607 |
|
Net loss attributable to Malibu Boats, Inc. |
$ (370) |
$ — |
$ (370) |
$ — |
|
|
|
|
|
|
|
Unit Volumes |
788 |
766 |
2,111 |
1,917 |
|
Net Sales Price per Unit |
$ 64 |
$ 61 |
$ 65 |
$ 62 |
Net sales for the three month period ended March 31, 2014 increased
6.9% to $50.3 million from $47.1 million for the three month period
ended March 31, 2013. The increase in net sales was the result of a 2.9%
increase in the number of boats sold to 788 from 766 and a 3.9%
increase in net sales per unit to $63,823 from $61,440 in the comparable
fiscal third quarter last year. The increase in units sold was
attributable to strong, continued consumer demand for our boats,
bolstered by the introduction of our new models and features. The
increase in net sales per unit was primarily driven by new boat models
and increased sales of larger boats, including the Wakesetter 23 LSV and
Axis A24, as well as sales of the Company's Surf Gate system on all
Axis models.
Gross profit for the three month period ended March 31, 2014 increased
7.2% to $13.4 million from $12.5 million for the three month period
ended March 31, 2013. Gross margin increased slightly to 26.6% compared
to the fiscal third quarter of last year. The increase in gross profit
resulted primarily from the increase in volumes and higher average
selling prices due to options, features, and new boat models.
Selling and marketing expense for the three month periods ended
March 31, 2014 compared to the three months ended March 31, 2013 was
slightly lower at $1.5 million. As a percentage of net sales, selling
and marketing expenses decreased 20 basis points to 3.0% from 3.2% of
sales in the comparable fiscal third quarter of last year.
General and administrative expenses, excluding amortization expense,
for the three month period ended March 31, 2014 increased $6.1 million
to $10.3 million from $4.2 million for the three month period ended
March 31, 2013. The increase in general and administrative expenses is
due primarily to one-time charges of $6.3 million incurred in connection
with our recapitalization and IPO on February 5, 2014. Excluding these
charges, general and administrative expenses decreased 4.8% to $4.0
million for the three months ended March 31, 2014 compared to the three
months ended March 31, 2013. Amortization expense was $1.3 million for
the three month period ended March 31, 2014 and March 31, 2013.
Operating income for the three month period ended March 31, 2014
decreased to $0.3 million from $5.5 million for the three month period
ended March 31, 2013 due to one-time charges of $6.3 million incurred in
connection with our recapitalization and IPO on February 5,
2014. Excluding these charges, Adjusted EBITDA for the three month
period ended March 31, 2014 increased 12.9% to $10.1 million from $8.9
million for the three month period ended March 31, 2013. Adjusted EBITDA
margin increased 100 basis points in the third quarter of fiscal 2014
to a third quarter record of 20.0%.
Webcast and Conference Call Information
The Company will host a webcast and conference call to discuss third
quarter fiscal 2014 results today, May 7, 2014, at 4:30 p.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
#35575921. 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.
About Malibu Boats, Inc.
Malibu Boats is a leading designer, manufacturer and marketer of
performance sport boats, with the #1 market share position in the United
States since 2010. The Company has two brands of performance sport
boats, Malibu and Axis Wake Research (Axis). Since inception in 1982,
the Company has been a consistent innovator in the powerboat industry,
designing products that appeal to an expanding range of recreational
boaters and water sports enthusiasts whose passion for boating and water
sports is a key aspect of their lifestyle.
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 the statement in this
press release concerning our ability to benefit from our market position
in the performance sport boat industry and a recovery in the overall
segment.
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 economic conditions, demand for our products, changes in
consumer preferences, competition within our industry, our reliance on
our network of independent dealers, our ability to manage our
manufacturing levels and our large fixed cost base, the successful
introduction of our new products, 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.
Use and Definition of Non-GAAP Financial Measures
This release includes the following financial measures defined as
non-GAAP financial measures by the SEC: Adjusted EBITDA, Adjusted EBITDA
Margin, and Adjusted Fully Distributed Net Income. These measures have
limitations as analytical tools and should not be considered as an
alternative to, or more meaningful than, net income as determined in
accordance with 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 earnings before interest expense, income
taxes, depreciation, amortization and non-cash, non-recurring and
non-operating expenses, including severance and relocation, management
fees and expenses, certain professional fees and non-cash compensation
expense. We define Adjusted EBITDA Margin as Adjusted EBITDA divided by
net sales. Management believes Adjusted EBITDA and Adjusted EBITDA
Margin are useful because they allow management to evaluate our
operating performance and compare the results of our operations from
period to period and against our peers without regard to our financing
methods, capital structure and non-recurring and non-operating
expenses. We exclude the items listed above from net 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.
We define Adjusted Fully Distributed Net Income as net income
attributable to Malibu (i) excluding income tax expense, (ii) excluding
the effect of non-recurring and non-cash items, (iii) assuming the
exchange of all LLC Units into shares of Class A common stock, which
results in the elimination of noncontrolling interest in the LLC, and
(iv) reflecting an adjustment for income tax expense on pro forma fully
distributed net income before income taxes at our estimated effective
income tax rate. Adjusted Fully Distributed Net Income is a non-GAAP
financial measure because it represents net income attributable to
Malibu Boats, Inc, before non-recurring or non-cash items and the
effects of noncontrolling interests in the LLC. We use Adjusted Fully
Distributed Net 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 Income assists our board of directors, management and investors in
comparing our net income on a consistent basis from period to period
because it removes non-cash (stock-based compensation) and non-recurring
items (strategic and financial restructuring expenses), and eliminates
the variability of noncontrolling interest as a result of member owner
exchanges of LLC Units into shares of Class A Common Stock.
A reconciliation of our historical and pro forma net income as
determined in accordance with GAAP to Adjusted EBITDA and Adjusted
EBITDA Margin, and of our pro forma net income attributable to Malibu
Boats, Inc. stockholders to pro forma Adjusted Fully Distributed Net
Income is provided under "Reconciliation of Non-GAAP Financial
Measures".
| MALIBU BOATS, INC. AND SUBSIDIARIES |
| Condensed Consolidated Statements of Income (Unaudited) |
| (In thousands, except share data) |
|
|
|
|
|
|
|
| Three Months Ended March 31, | Nine Months Ended March 31, |
|
| 2014 | 2013 | 2014 | 2013 |
|
Net sales |
$ 50,293 |
$ 47,062 |
$ 137,535 |
$ 118,039 |
|
Cost of sales |
36,892 |
34,561 |
101,417 |
88,376 |
|
Gross profit |
13,401 |
12,501 |
36,118 |
29,663 |
|
Operating expenses: |
|
|
|
|
|
Selling and marketing |
1,512 |
1,524 |
4,454 |
3,794 |
|
General and administrative |
10,299 |
4,150 |
15,322 |
11,302 |
|
Amortization |
1,294 |
1,294 |
3,883 |
3,883 |
|
Operating income |
296 |
5,533 |
12,459 |
10,684 |
|
Other income (expense): |
|
|
|
|
|
Other |
— |
3 |
9 |
8 |
|
Interest expense |
(1,207) |
(335) |
(2,980) |
(1,085) |
|
Other expense |
(1,207) |
(332) |
(2,971) |
(1,077) |
|
Net (loss) income before provision for income taxes |
(911) |
5,201 |
9,488 |
9,607 |
|
Provision for income taxes |
76 |
— |
76 |
— |
|
Net (loss) income |
$ (987) |
$ 5,201 |
$ 9,412 |
$ 9,607 |
|
Net (loss) income attributable to non-controlling interest |
(617) |
5,201 |
9,782 |
9,607 |
|
Net loss attributable to Malibu Boats, Inc. |
$ (370) |
$ — |
$ (370) |
$ — |
|
|
|
|
|
|
| Weighted average shares outstanding used in computing net loss per share: |
|
|
|
|
|
Basic |
11,054,830 |
|
|
|
|
Diluted |
22,028,476 |
|
|
|
| Net loss available to Class A Common Stock per share: |
|
|
|
|
|
Basic |
$ (0.03) |
|
|
|
|
Diluted |
$ (0.04) |
|
|
|
|
|
| MALIBU BOATS, INC. AND SUBSIDIARIES |
| Condensed Consolidated Balance Sheets (Unaudited) |
| (In thousands, except share data) |
|
|
|
|
|
| March 31, 2014 | June 30, 2013 |
| Assets |
|
|
|
Current assets |
|
|
|
Cash |
$ 5,321 |
$ 15,957 |
|
Trade receivables, net |
8,999 |
7,642 |
|
Inventories, net |
17,346 |
11,639 |
|
Deferred tax asset |
328 |
— |
|
Prepaid expenses |
1,239 |
223 |
|
Total current assets |
33,233 |
35,461 |
|
Property and equipment, net |
9,354 |
6,648 |
|
Goodwill |
5,718 |
5,718 |
|
Other intangible assets |
13,652 |
17,535 |
|
Debt issuance costs, net |
— |
531 |
|
Deferred tax asset |
18,634 |
— |
|
Other assets |
34 |
34 |
|
Total assets |
$ 80,625 |
$ 65,927 |
| Liabilities |
|
|
|
Current liabilities |
|
|
|
Current maturities of long-term debt |
$ 14 |
$ 3,326 |
|
Accounts payable |
15,135 |
11,655 |
|
Accrued expenses |
11,565 |
10,524 |
|
Total current liabilities |
26,714 |
25,505 |
|
Deferred gain on sale-leaseback |
137 |
145 |
|
Payable pursuant to tax receivable agreement |
13,636 |
— |
|
Long-term debt, less current maturities |
— |
20,263 |
|
Total liabilities |
40,487 |
45,913 |
|
Commitments and contingencies (See Note 13) |
|
|
| Equity |
|
|
|
Class A Common Stock, par value $0.01 per share, 100,000,000 shares
authorized; 11,054,830 shares issued and outstanding as of March 31,
2014; none authorized, issued or outstanding as of June 30, 2013 |
110 |
— |
|
Class B Common Stock, par value $0.01 per share, 25,000,000 shares
authorized; 34 shares issued and outstanding as of March 31, 2014; none
authorized, issued or outstanding as of June 30, 2013 |
— |
— |
|
Preferred Stock, par value $0.01 per share; 25,000,000 shares
authorized; no shares issued and outstanding as of March 31, 2014; none
authorized, issued or outstanding as of June 30, 2013 |
— |
— |
|
Class A Units, no units authorized, issued and outstanding as of
March, 31, 2014 and 37,000 units authorized, 36,742 units issued and
outstanding as of June 30, 2013 |
— |
16,978 |
|
Class B Units, no units authorized, issued and outstanding as of
March 31, 2014 and 3,885 units authorized, issued and outstanding as of
June 30, 2013 |
— |
(2,417) |
|
Class M Units, no units authorized, issued and outstanding as of
March, 31, 2014 and 2,658 units authorized, 1,421 units issued and
outstanding as of June 30, 2013 |
— |
(460) |
|
Additional paid in capital |
22,720 |
— |
|
Accumulated (deficit) earnings |
(370) |
5,913 |
|
Total stockholders' equity attributable to Malibu Boats, Inc./members' equity |
22,460 |
20,014 |
|
Non-controlling interest |
$ 17,678 |
$ — |
|
Total stockholders'/members' equity |
$ 40,138 |
$ 20,014 |
|
Total liabilities and equity |
$ 80,625 |
$ 65,927 |
MALIBU BOATS, INC. AND SUBSIDIARIES
Reconciliation of Non-GAAP Financial Measures
Reconciliation of Net Income to Non-GAAP Adjusted EBITDA and Adjusted EBITDA Margin (Unaudited):
The following table sets forth a reconciliation of net (loss) income as
determined in accordance with GAAP to Adjusted EBITDA and Adjusted
EBITDA Margin for the periods indicated (dollars in thousands):
|
|
|
|
|
|
|
| Malibu Boats, Inc. and Subsidiaries |
|
| Three Months Ended March 31, | Nine Months Ended March 31, |
|
| 2014 | 2013 | 2014 | 2013 |
|
Net (loss) income |
$ (987) |
$ 5,201 |
$ 9,412 |
$ 9,607 |
|
Provision for income taxes |
76 |
— |
76 |
— |
|
Interest expense |
1,207 |
335 |
2,980 |
1,085 |
|
Depreciation and amortization |
1,739 |
1,573 |
5,010 |
4,720 |
|
Severance and relocation 1 |
— |
— |
— |
192 |
|
Management fees and expenses 2 |
4,541 |
750 |
4,584 |
2,860 |
|
Professional fees 3 |
749 |
1,032 |
1,503 |
2,661 |
|
Stock based compensation expense 4 |
2,077 |
31 |
2,141 |
95 |
|
Strategic and financial restructuring expenses 5 |
670 |
— |
1,222 |
— |
|
Adjusted EBITDA |
$ 10,072 |
$ 8,922 |
$ 26,928 |
$ 21,220 |
|
Adjusted EBITDA margin |
20.0% |
19.0% |
19.6% |
18.0% |
|
|
|
|
|
|
|
(1) Represents one-time employment related expenses, including a
severance payment to a former executive, and costs to relocate certain
departments from California to our Tennessee facility. |
|
(2) Represents management fees and out-of-pocket expenses paid
pursuant to our management agreement with Malibu Boats Investor, LLC, an
affiliate, which was terminated upon the closing of the IPO. Upon
termination of the agreement, we paid a one-time termination fee of
$3.75 million. |
|
(3) Represents legal and advisory fees related to our refinancing
activities and legal expenses related to our litigation with Pacific
Coast Marine Windshields Ltd. and Nautique Boat Company, Inc. |
|
(4) Represents equity-based incentives awarded to certain of our
employees including a $1.8 million stock compensation charge as a result
of the modification of certain profit interest awards previously
granted in 2012 under the first amended and restated limited liability
company agreement of the LLC, as amended, in connection with our IPO. |
|
(5) Represents legal, accounting and other expenses directly related to the Recapitalization and IPO. |
Reconciliation of Non-GAAP Adjusted Fully Distributed Net Income (Unaudited):
The following table sets forth a reconciliation of net income
attributable to Malibu Boats, Inc. stockholders to Adjusted Fully
Distributed Net Income for the periods presented (dollars in thousands,
except per share data):
|
|
|
|
|
|
|
| Malibu Boats, Inc. and Subsidiaries |
|
| Three Months Ended | Nine Months Ended |
|
| March 31, | March 31, |
|
| 2014 | 2013 | 2014 | 2013 |
|
|
|
|
|
|
|
Net (loss) income attributable to Malibu Boats, Inc. shareholders |
$ (370) |
$ — |
$ (370) |
$ — |
|
Income tax benefit |
76 |
— |
76 |
— |
|
Stock based compensation expense |
2,077 |
31 |
2,141 |
95 |
|
Management fees and expenses |
4,541 |
750 |
4,584 |
2,860 |
|
Professional fees |
749 |
1,032 |
1,503 |
2,661 |
|
Strategic and financial restructuring expenses |
670 |
— |
1,222 |
— |
|
Net (loss) income attributable to non-controlling interest 1 |
(617) |
5,201 |
9,782 |
9,607 |
|
Fully distributed net income before income taxes |
7,126 |
7,014 |
18,938 |
15,223 |
|
Income tax expense on fully distributed income before income taxes 2 |
2,682 |
2,639 |
7,126 |
5,728 |
|
Adjusted Fully Distributed Net Income |
4,444 |
4,375 |
11,812 |
9,495 |
|
|
|
|
|
|
| Adjusted Fully Distributed Net Income per share of Class A Common Stock 3: |
|
|
|
|
|
Basic |
$ 0.20 |
$ 0.20 |
$ 0.53 |
$ 0.42 |
|
Diluted |
$ 0.20 |
$ 0.20 |
$ 0.53 |
$ 0.42 |
|
|
|
|
|
|
| Weighted average shares of Class A Common Stock outstanding used in computing Adjusted Fully Distributed Net Income 4: |
|
|
|
|
|
Basic |
22,428,567 |
22,428,567 |
22,428,567 |
22,428,567 |
|
Diluted |
22,428,567 |
22,428,567 |
22,428,567 |
22,428,567 |
|
|
|
(1) Reflects the elimination of the non-controlling interest in the
LLC as if all member owners had fully exchanged their LLC Units for
shares of Class A Common Stock. |
|
(2) Reflects income tax expense at an estimated annual effective
income tax rate of 37.6% of income before income taxes assuming the
conversion of all LLC Units into shares of Class A Common Stock and the
tax impact of excluding strategic and financial restructuring
expenses. The estimated annual effective income tax rate is based on the
federal statutory rate plus a blended state rate adjusted for
deductions under Section 199 of the Internal Revenue Code of 1986, as
amended, and state taxes attributable to the LLC. |
|
(3) Adjusted fully distributed net income divided by the weighted
average shares of Class A Common Stock outstanding in (4) below. |
|
(4) Represents the total number of shares of Class A Common Stock
outstanding including all 11,373,737 remaining LLC Units as if they were
exchanged on a one-for-one basis for the Company's Class A Common
Stock. |
CONTACT: Investor Contacts
Malibu Boats, Inc.
Wayne Wilson
Chief Financial Officer
(865) 458-5478
ICR
John Rouleau/Rachel Schacter
(203) 682-8200
John.Rouleau@icrinc.com
Rachel.Schacter@icrinc.com
Media Contact
Malibu Boats, Inc.
Mike Quinlan
Director of Marketing
(865) 458-5478