Malibu Boats, Inc 10-Q for FY2024 Q1

Malibu Boats, Inc. (MBUU)

10-Q 2023-10-31 For: 2023-09-30

Added on April 10, 2026

About this 10-Q

Malibu Boats, Inc filed this 10-Q on October 31, 2023, covering the quarter ended September 30, 2023 (FY2024 Q1).

Headline figures

Quarter ended September 30, 2023, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $255.83M; down 15.3% from $302.21M a year earlier
Net income: $20.26M; down 41.9% from net income of $34.88M a year earlier
Diluted EPS: $0.98; down 42.0% from $1.69 a year earlier

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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


Class A Common Stock, par value $0.01, outstanding as of October 25, 2023:	20,397,303	shares
Class B Common Stock, par value $0.01, outstanding as of October 25, 2023:	12	shares



		Page
PART I	FINANCIAL INFORMATION	1
Item 1.	Financial Statements	1
	Condensed Consolidated Statements of Operations and Comprehensive Income (Unaudited)	1
	Condensed Consolidated Balance Sheets (Unaudited)	2
	Condensed Consolidated Statements of Stockholders' Equity (Unaudited)	3
	Condensed Consolidated Statements of Cash Flows (Unaudited)	4
	Notes to Unaudited Condensed Consolidated Financial Statements	5
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	19
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	34
Item 4.	Controls and Procedures	34

PART II	OTHER INFORMATION	35
Item 1.	Legal Proceedings	35
Item 1A.	Risk Factors	35
Item 2.	Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities	35
Item 3.	Defaults Upon Senior Securities	35
Item 4.	Mine Safety Disclosures	35
Item 5.	Other Information	35
Item 6.	Exhibits	36

SIGNATURES		37


	Three Months Ended September 30,
	2023		2022
Net sales	$	255,830	$	302,211
Cost of sales	199,036		227,606
Gross profit	56,794		74,605
Operating expenses:
Selling and marketing	5,752		5,186
General and administrative	20,705		19,220
Amortization	1,715		1,716
Operating income	28,622		48,483
Other expense, net:
Other (income) expense, net	(10)		70
Interest expense	884		1,285
Other expense, net	874		1,355
Income before provision for income taxes	27,748		47,128
Provision for income taxes	6,978		11,023
Net income	20,770		36,105
Net income attributable to non-controlling interest	511		1,222
Net income attributable to Malibu Boats, Inc.	$	20,259	$	34,883

Comprehensive income:
Net income	$	20,770	$	36,105
Other comprehensive (loss) income:
Change in cumulative translation adjustment	(751)		(1,436)
Other comprehensive (loss)	(751)		(1,436)
Comprehensive income	20,019		34,669
Less: comprehensive income attributable to non-controlling interest	493		1,173
Comprehensive income attributable to Malibu Boats, Inc.	$	19,526	$	33,496

Weighted-average shares outstanding used in computing net income per share:
Basic	20,586,487		20,459,849
Diluted	20,684,230		20,632,727
Net income available to Class A Common Stock per share:
Basic	$	0.98	$	1.70
Diluted	$	0.98	$	1.69


	September 30, 2023		June 30, 2023
Assets
Current assets
Cash	$	45,462	$	78,937
Trade receivables, net	64,846		68,381
Inventories, net	174,128		171,189
Prepaid expenses and other current assets	12,083		7,827

Total current assets	296,519		326,334
Property, plant and equipment, net	237,548		204,792
Goodwill	100,389		100,577
Other intangible assets, net	219,717		221,458
Deferred tax assets	58,566		62,573
Other assets	9,668		10,190
Total assets	$	922,407	$	925,924
Liabilities
Current liabilities

Accounts payable	$	37,995	$	40,402
Accrued expenses	109,478		187,078
Income taxes and tax distribution payable	839		847
Payable pursuant to tax receivable agreement, current portion	4,111		4,111
Total current liabilities	152,423		232,438
Deferred tax liabilities	28,650		28,453
Other liabilities	9,468		9,926
Payable pursuant to tax receivable agreement, less current portion	39,354		39,354
Long-term debt	65,000		—
Total liabilities	294,895		310,171
Commitments and contingencies (See Note 15)
Stockholders' Equity
Class A Common Stock, par value $0.01 per share, 100,000,000 shares authorized; 20,404,413 shares issued and outstanding as of September 30, 2023; 20,603,822 issued and outstanding as of June 30, 2023	202		204
Class B Common Stock, par value $0.01 per share, 25,000,000 shares authorized; 12 shares issued and outstanding as of September 30, 2023 and June 30, 2023	—		—
Preferred Stock, par value $0.01 per share; 25,000,000 shares authorized; no shares issued and outstanding as of September 30, 2023 and June 30, 2023	—		—
Additional paid in capital	78,194		86,321
Accumulated other comprehensive loss	(5,091)		(4,340)
Accumulated earnings	545,956		525,697
Total stockholders' equity attributable to Malibu Boats, Inc.	619,261		607,882
Non-controlling interest	8,251		7,871
Total stockholders’ equity	627,512		615,753
Total liabilities and stockholders' equity	$	922,407	$	925,924


	Class A Common Stock			Class B Common Stock			Additional Paid In Capital		Accumulated Other Comprehensive Loss		Accumulated Earnings		Non-controlling Interest in LLC		Total Stockholders' Equity
	Shares	Amount		Shares	Amount
Balance at June 30, 2023	20,603	$	204	12	$	—	$	86,321	$	(4,340)	$	525,697	$	7,871	$	615,753
Net income	—	—		—	—		—		—		20,259		511		20,770
Stock based compensation, net of withholding taxes on vested equity awards	—	—		—	—		1,443		—		—		—		1,443
Issuances of equity for services	—	—		—	—		47		—		—		—		47

Repurchase and retirement of common stock	(199)	(2)		—	—		(9,617)		—		—		—		(9,619)



Distributions to LLC Unit holders	—	—		—	—		—		—		—		(114)		(114)
Foreign currency translation adjustment	—	—		—	—		—		(751)		—		(17)		(768)
Balance at September 30, 2023	20,404	$	202	12	$	—	$	78,194	$	(5,091)	$	545,956	$	8,251	$	627,512


	Three Months Ended September 30,
	2023		2022
Operating activities:
Net income	$	20,770	$	36,105
Adjustments to reconcile net income to net cash (used in) provided by operating activities:

Non-cash compensation expense	1,460		1,635
Non-cash compensation to directors	297		290
Depreciation	6,324		5,296
Amortization	1,715		1,716
Deferred income taxes	4,199		1,137




Other items, net	533		617
Change in operating assets and liabilities:
Trade receivables	3,501		5,153
Inventories	(3,217)		(25,714)
Prepaid expenses and other assets	(4,549)		(3,784)
Accounts payable	(1,995)		7,154
Income taxes payable	675		8,846
Accrued expenses	(77,650)		(6,195)
Other liabilities	(474)		(567)
Net cash (used in) provided by operating activities	(48,411)		31,689
Investing activities:
Purchases of property, plant and equipment	(39,527)		(12,362)


Net cash used in investing activities	(39,527)		(12,362)
Financing activities:

Proceeds from revolving credit facility	75,000		121,700
Principal payments on long-term borrowings	—		(23,125)
Payments on revolving credit facility	(10,000)		(147,000)
Payment of deferred financing costs	—		(1,362)




Cash paid for withholding taxes on vested restricted stock	—		(871)
Distributions to LLC Unit holders	(776)		(1,045)
Repurchase and retirement of common stock	(9,619)		(7,868)
Net cash provided by (used in) financing activities	54,605		(59,571)
Effect of exchange rate changes on cash	(142)		(449)
Changes in cash	(33,475)		(40,693)
Cash—Beginning of period	78,937		83,744
Cash—End of period	$	45,462	$	43,051

Supplemental cash flow information:
Cash paid for interest	$	95	$	1,056
Cash paid for income taxes	579		760


	Three Months Ended September 30, 2023
	Malibu		Saltwater Fishing		Cobalt		Consolidated
Revenue by product:
Boat and trailer sales	$	99,439	$	92,252	$	57,104	$	248,795
Part and other sales	5,566		370		1,099		7,035
Net Sales	$	105,005	$	92,622	$	58,203	$	255,830

Revenue by geography:
North America	$	97,055	$	91,865	$	57,456	$	246,376
International	7,950		757		747		9,454
Net Sales	$	105,005	$	92,622	$	58,203	$	255,830


	Three Months Ended September 30, 2022
	Malibu		Saltwater Fishing		Cobalt		Consolidated
Revenue by product:
Boat and trailer sales	$	140,163	$	91,893	$	63,630	$	295,686
Part and other sales	5,005		340		1,180		6,525
Net Sales	$	145,168	$	92,233	$	64,810	$	302,211

Revenue by geography:
North America	$	130,650	$	88,941	$	62,281	$	281,872
International	14,518		3,292		2,529		20,339
Net Sales	$	145,168	$	92,233	$	64,810	$	302,211


	As of September 30, 2023			As of June 30, 2023
	Units	Ownership %		Units	Ownership %
Non-controlling LLC Unit holders ownership in Malibu Boats Holdings, LLC	455,919	2.2	%	455,919	2.2	%
Malibu Boats, Inc. ownership in Malibu Boats Holdings, LLC	20,404,413	97.8	%	20,603,822	97.8	%
	20,860,332	100.0	%	21,059,741	100.0	%


	As of September 30, 2023		As of June 30, 2023
Raw materials	$	136,266	$	142,948
Work in progress	25,585		19,222
Finished goods	12,277		9,019
Total inventories	$	174,128	$	171,189


	As of September 30, 2023		As of June 30, 2023
Land	$	4,905	$	4,905
Building and leasehold improvements	119,442		119,324
Machinery and equipment	107,498		103,362
Furniture and fixtures	12,819		12,672
Construction in process	82,132		47,482
	326,796		287,745
Less: Accumulated depreciation	(89,248)		(82,953)
Property, plant and equipment, net	$	237,548	$	204,792


	As of September 30, 2023		As of June 30, 2023		Estimated Useful Life (in years)	Weighted-Average Remaining Useful Life (in years)
Definite-lived intangibles:

Dealer relationships	$	131,659	$	131,725	15-20	15.4
Patent	2,600		2,600		15	8.8
Trade name	100		100		15	6.7
Non-compete agreement	45		46		10	1.1
Total	134,404		134,471
Less: Accumulated amortization	(32,887)		(31,213)
Total definite-lived intangible assets, net	101,517		103,258
Indefinite-lived intangible:
Trade name	118,200		118,200
Total other intangible assets, net	$	219,717	$	221,458


Fiscal years ending June 30:	Amount
Remainder of 2024	$	5,088
2025	6,799
2026	6,797
2027	6,797
2028	6,797
2029 and thereafter	69,239
	$	101,517


	As of September 30, 2023		As of June 30, 2023
Warranties	$	41,597	$	41,709
Dealer incentives	18,517		14,996
Accrued compensation	17,188		19,671
Current operating lease liabilities	2,324		2,324
Litigation settlement	—		100,000
Accrued legal and professional fees	21,866		1,899
Customer deposits	4,202		4,054
Other accrued expenses	3,784		2,425
Total accrued expenses	$	109,478	$	187,078


	Three Months Ended September 30,
	2023		2022
Beginning balance	$	41,709	$	38,673
Add: Warranty expense	6,414		6,405

Less: Warranty claims paid	(6,526)		(5,679)
Ending balance	$	41,597	$	39,399


	Number of Restricted Stock Units and Restricted Stock Awards Outstanding	Weighted-Average Grant Date Fair Value
Total Non-vested Restricted Stock Units and Restricted Stock Awards as of June 30, 2023	324,824	$	57.98
Granted	802	58.66
Vested	(802)	58.66
Forfeited	(3,026)	56.72
Total Non-vested Restricted Stock Units and Restricted Stock Awards as of September 30, 2023	321,798	$	57.99


(1)			For the three months ended September 30, 2023, represents legal and advisory fees related to product liability cases that were settled for $100.0 million in June 2023.
(2)			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. See Note 13 to our unaudited interim condensed consolidated financial statements included elsewhere in this Quarterly Report.
(3)			We calculate net income margin as net income divided by net sales and we define adjusted EBITDA margin as adjusted EBITDA divided by net sales.


	As of September 30, 2023		As of June 30, 2023
Term loan	$	—	$	—
Revolving credit loan	65,000		—

Total debt	65,000		—
Less current maturities	—		—
Long-term debt less current maturities	$	65,000	$	—


Classification		As of September 30, 2023		As of June 30, 2023
Assets
Right-of-use assets	Other assets	$	8,358	$	8,808

Liabilities
Current operating lease liabilities	Accrued expenses	$	2,324	$	2,324
Long-term operating lease liabilities	Other liabilities	7,317		7,843
Total lease liabilities		$	9,641	$	10,167


	Amount
Remainder of 2024	$	1,992
2025	2,370
2026	2,274
2027	2,258
2028	1,505
2029 and thereafter	1
Total	10,400
Less: imputed interest	(759)
Present value of lease liabilities	$	9,641


	As of September 30, 2023		As of June 30, 2023
Beginning fiscal year balance	$	43,465	$	45,541
Additions (reductions) to tax receivable agreement:
Exchange of LLC Units for Class A Common Stock	—		1,710
Adjustment for change in estimated state tax rate or benefits	—		188
Payments under tax receivable agreement	—		(3,974)
	43,465		43,465
Less: current portion under tax receivable agreement	(4,111)		(4,111)
Ending balance	$	39,354	$	39,354



	Shares	Weighted-Average Exercise Price/Share
Total outstanding options as of June 30, 2023	17,973	$	37.55
Options granted	—	—
Options exercised	—	—

Outstanding options as of September 30, 2023	17,973	37.55
Exercisable as of September 30, 2023	17,973	$	37.55


Period	Total Number of Shares Purchased	Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plan (1)
July 1, 2023 through July 31, 2023	—	$	—	—	$	100,000
August 1, 2023 through August 31, 2023	—	—		—	100,000
September 1, 2023 through September 30, 2023	199,276	48.27		199,276	90,381
Total	199,276	$	48.27	199,276	$	90,381


Exhibit No.						Description
3.1						Certificate of Incorporation of Malibu Boats, Inc. 1
3.2						Amended and Restated Bylaws of Malibu Boats, Inc. 2
3.3						Certificate of Formation of Malibu Boats Holdings, LLC 1
3.4						First Amended and Restated Limited Liability Company Agreement of Malibu Boats Holdings, LLC, dated as of February 5, 2014 3
3.4.1						First Amendment, dated as of February 5, 2014, to First Amended and Restated Limited Liability Company Agreement of Malibu Boats Holdings, LLC 4
3.4.2						Second Amendment, dated as of June 27, 2014, to First Amended and Restated Limited Liability Company Agreement of Malibu Boats Holdings, LLC 5
4.1						Description of Class A Common Stock
4.2						Form of Class A Common Stock Certificate 1
4.3						Form of Class B Common Stock Certificate 1
4.4						Exchange Agreement, dated as of February 5, 2014, by and among Malibu Boats, Inc. and Affiliates of Black Canyon Capital LLC and Horizon Holdings, LLC 3
4.5						Exchange Agreement, dated as of February 5, 2014, by and among Malibu Boats, Inc. and the Members of Malibu Boats Holdings, LLC 3
4.6						Tax Receivable Agreement, dated as of February 5, 2014, by and among Malibu Boats, Inc., Malibu Boats Holdings, LLC and the Other Members of Malibu Boats Holdings, LLC 3
31.1						Certificate of the Chief Executive Officer of Malibu Boats, Inc. pursuant to Rule 13a-14 or 15d-14 of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2						Certificate of the Interim Chief Financial Officer of Malibu Boats, Inc. pursuant to Rule 13a-14 or 15d-14 of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1						Certification of the Chief Executive Officer and Interim Chief Financial Officer of Malibu Boats, Inc. pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101						The following financial statements from the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2023 were formatted in Inline XBRL: (i) Condensed Consolidated Statements of Operations and Comprehensive Income, (ii) Condensed Consolidated Balance Sheets, (iii) Condensed Consolidated Statements of Stockholders’ Equity, (iv) Condensed Consolidated Statements of Cash Flows, and (v) the Notes to Condensed Consolidated Financial Statements, tagged as blocks of text and including detailed tags.
104						The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2023, formatted in Inline XBRL (Included as Exhibit 101).


October 31, 2023	MALIBU BOATS, INC.

	By:	/s/ Jack Springer
		Jack Springer, Chief Executive Officer
		(Principal Executive Officer)
	By:	/s/ David Black
		David Black, Interim Chief Financial Officer
		(Principal Financial Officer and Principal Accounting Officer)


1.			I have reviewed this Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2023 of Malibu Boats, Inc.;

2.			Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;


3.			Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;


4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

	(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

	(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

	(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

	(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and


5.	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

	(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

	(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


(1)			The Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2023, to which this Certification is attached as Exhibit 32 (the “Report”) fully complies with the requirements of Section 13(a) or Section 15(d) of the Exchange Act, and

(2)			The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.


/s/ David Black						/s/ Jack D. Springer
David Black						Jack D. Springer
Interim Chief Financial Officer						Chief Executive Officer