8-K
MALIBU BOATS, INC. (MBUU)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): March 19, 2020
MALIBU BOATS, INC.
(Exact Name of Registrant as specified in its charter)
Commission file number: 001-36290
| Delaware | 5075 Kimberly Way, | Loudon, | Tennessee | 37774 | 46-4024640 |
|---|---|---|---|---|---|
| (State or other jurisdiction of<br><br>incorporation or organization) | (Address of principal executive offices,<br><br>including zip code) | (I.R.S. Employer<br><br>Identification No.) | |||
| (865) | 458-5478 | ||||
| --- | --- | ||||
| (Registrant’s telephone number,<br><br>including area code) |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Class A Common Stock, par value $0.01 | MBUU | Nasdaq Global Select Market |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant
Malibu Boats, LLC, an indirect subsidiary of Malibu Boats, Inc. (the “Company”), elected to draw the remaining available funds of $98.8 million from its revolving credit facility to ensure it maintains financial flexibility in light of the current uncertainty in the global markets resulting from the COVID-19 pandemic. Malibu Boats, LLC provided the notice of borrowing on March 19, 2020 to the lenders under the revolving credit facility governed by the Second Amended and Restated Credit Agreement dated as of June 28, 2017 (as amended, the “Credit Agreement”), by and among Malibu Boats, LLC, Malibu Boats Holdings, LLC, parent of Malibu Boats, LLC and a direct subsidiary of the Company, and certain subsidiaries of Malibu Boats, LLC parties thereto, as guarantors, the lenders parties thereto, and Truist Financial Corp. (formerly known as SunTrust Bank), as administrative agent, swingline lender and issuing bank. The borrowing resulted in a total of $118.8 million outstanding under the revolving credit facility (excluding $1.2 million in undrawn letters of credit), with no remaining amounts available for borrowing. In accordance with the terms of the Credit Agreement, the proceeds from the revolving credit facility may in the future be used for working capital, general corporate or other purposes permitted by the Credit Agreement.
The current interest rate for borrowings under the revolving credit facility is approximately 2.2% (which is the one-month LIBOR rate plus an applicable margin of 1.25%), and the revolving credit facility matures on July 1, 2024. Other terms of the Credit Agreement are described in the section “Liquidity and Capital Resources - Loans and Commitments” in Part I, Item II of the Company’s Quarterly Report on Form 10-Q for the quarter ended December 31, 2019, filed with the SEC on February 6, 2020, and incorporated herein by reference. A copy of the Credit Agreement, First Incremental Facility Amendment and First Amendment, and Second Incremental Facility Amendment and Second Amendment are filed as Exhibits 10.1, 10.3 and 10.4, respectively to the Company’s Annual Report on Form 10-K for the year ended June 30, 2019, filed with the SEC on August 29, 2019.
Item 7.01 Regulation FD Disclosure.
The Company issued a press release on March 24, 2020 providing an update to the market. A copy of the press release is attached to this Current Report on Form 8-K as Exhibit 99.1.
The information in this Item 7.01 and in Exhibit 99.1 is furnished and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, and such information shall not be deemed to be incorporated by reference into any of the Company’s filings under the Securities Act of 1933, as amended, or the Exchange Act.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
The following exhibit is being furnished as part of this report:
| Exhibit No. | Description |
|---|---|
| Exhibit 99.1 | Press Release dated March 24, 2020 |
| Exhibit 104 | The Cover Page from this Current Report on Form 8-K formatted in Inline XBRL (included as Exhibit 101) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| MALIBU BOATS, INC. | |||
|---|---|---|---|
| By: | /s/ Jack Springer | ||
| Date: | March 24, 2020 | Jack Springer | |
| Chief Executive Officer |
Exhibit
Malibu Boats, Inc. Provides Business Update on COVID-19
Suspends operations at manufacturing facilities to protect employees
Enhances financial strength and flexibility
Withdraws fiscal year 2020 outlook
LOUDON, Tenn., March 24, 2020 (Globe Newswire) – Malibu Boats, Inc. (Nasdaq: MBUU), announced today several key actions to ensure the health and safety of its key stakeholders.
“We are all navigating uncharted waters, as uncertainty in the broader macro-economic environment has reached unprecedented levels. In this moment, the health and safety of our employees, dealers and customers remain our top priority. As a result, we made the difficult decision to suspend operations at our manufacturing facilities out of an abundance of caution for the communities we serve,” commented Malibu Boats’ Chief Executive Officer, Jack Springer.
“Despite the volatility in the global markets, Malibu remains in an excellent financial position. To ensure we maintain sufficient liquidity, we have drawn just under $100 million on our current revolver to support operations and strategic investments in the event of a prolonged lower demand environment. Further, our historical commitment to operational excellence and vertical integration initiatives will allow us to withstand the downward retail momentum that is beginning to reverberate throughout the world. These strategies will allow us to remain nimble and align our cost structure quickly to lowered retail demand to preserve margins,” continued Mr. Springer.
Mr. Springer concluded, “Given that the uncertainty and rapid spread of this virus and its ultimate impact on the broader macro-environment is unknown at this point, we believe it is prudent to withdraw our fiscal year 2020 outlook at this time. We believe our discipline in both good times and bad will enable Malibu to extend our leadership position in the broader marine industry.”
Suspends Operations at Manufacturing Facilities
Malibu Boats will be closing its manufacturing facilities, effective March 24, 2020 through April 6, 2020.
Enhances Financial Strength and Flexibility
The Company has drawn $98.8 million on its revolver under its current credit agreement to ensure sufficient liquidity. As of March 23, 2020, Malibu had cash and cash equivalents in excess of $130 million.
Withdraws Fiscal Year 2020 Outlook
The Company is withdrawing fiscal year 2020 outlook provided on February 6, 2020, given the unprecedented uncertainty related to the COVID-19 pandemic. Malibu expects to provide further updates on its fiscal third quarter 2020 earnings call.
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 commanding market leader in the performance sport boat category through its Malibu and Axis Wake Research 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 offshore fishing boat market with its Pursuit brand. 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, or www.pursuitboats.com.
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 statements in this press release regarding the uncertain impact on the Company of the COVID-19 pandemic, the Company’s ability to extend its leadership position in the marine industry, and the Company’s ability to withstand downward retail momentum. 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: the potential effects of the coronavirus (COVID-19) pandemic on the Company; general industry, economic and business conditions; the Company’s large fixed cost base; the Company’s ability to grow its business through acquisitions and integrate such acquisitions to fully realize their expected benefits; the Company’s reliance on its network of independent dealers and increasing competition for dealers; intense competition within the Company’s industry; increased consumer preference for used boats or the supply of new boats by competitors in excess of demand; the successful introduction of new products; the Company’s ability to execute its manufacturing strategy successfully; the success of the Company’s engines integration strategy; and other factors affecting the Company detailed from time to time in its filings with the Securities and Exchange Commission. Many of these risks and uncertainties are outside the Company’s control, and there may be other risks and uncertainties which the Company does not currently anticipate because they relate to events and depend on circumstances that may or may not occur in the future. Although the Company believes that the expectations reflected in any forward-looking statements are based on reasonable assumptions at the time made, the Company 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. The Company undertakes 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.
Contacts
Malibu Boats, Inc.
Wayne Wilson
InvestorRelations@MalibuBoats.com