Malibu Boats(US:MBUU)2025-05-08 13:06PART I FINANCIAL INFORMATION Financial Statements Presents the unaudited condensed consolidated financial statements for the three and nine-month periods ended March 31, 2025, and 2024 Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) For Q3 2025, the company reported net sales of $228.7 million and a net income of $13.2 million, a significant turnaround from the prior year's loss Consolidated Statements of Operations Highlights (in thousands) | Metric | Three Months Ended Mar 31, 2025 | Three Months Ended Mar 31, 2024 | Nine Months Ended Mar 31, 2025 | Nine Months Ended Mar 31, 2024 | | :--- | :--- | :--- | :--- | :--- | | Net sales | $228,662 | $203,419 | $600,522 | $670,323 | | Gross profit | $45,724 | $40,333 | $111,351 | $134,602 | | Operating income (loss) | $17,367 | $(74,902) | $14,932 | $(31,568) | | Net income (loss) | $13,173 | $(67,759) | $10,447 | $(36,845) | | Basic EPS | $0.66 | $(3.28) | $0.52 | $(1.79) | - A significant goodwill and intangible asset impairment charge of $88.4 million was recorded in fiscal 2024, driving the net loss in that period13 Condensed Consolidated Balance Sheets Total assets increased to $758.8 million as of March 31, 2025, driven by higher cash and receivables, while liabilities rose due to credit facility drawings Consolidated Balance Sheet Highlights (in thousands) | Metric | March 31, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Total current assets | $237,938 | $202,129 | | Total assets | $758,766 | $739,624 | | Total current liabilities | $148,374 | $138,586 | | Long-term debt | $28,000 | $0 | | Total liabilities | $240,830 | $204,905 | | Total stockholders' equity | $517,936 | $534,719 | Condensed Consolidated Statements of Cash Flows For the nine months ended March 31, 2025, net cash from operations was $35.5 million, while cash used in investing decreased significantly Cash Flow Summary (in thousands) | Activity | Nine Months Ended Mar 31, 2025 | Nine Months Ended Mar 31, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $35,467 | $39,221 | | Net cash used in investing activities | $(20,575) | $(64,092) | | Net cash used in financing activities | $(2,855) | $(6,875) | | Change in cash | $11,768 | $(31,821) | | Cash - End of period | $38,713 | $47,116 | Notes to Financial Statements The notes detail revenue disaggregation, debt agreements, stock-based compensation, and significant legal proceedings across three reportable segments - The company operates and reports results under three segments: Malibu, Saltwater Fishing, and Cobalt23101 - As of March 31, 2025, the company had $28.0 million outstanding under its revolving credit facility, with $320.3 million available for borrowing49 - The company is involved in several legal proceedings for which it is unable to estimate the range of possible loss949698 Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) Management analyzes financial performance, highlighting a Q3 sales increase but a nine-month decrease, with a cautious outlook due to market challenges Business Outlook The company anticipates continued industry challenges from macroeconomic factors and expects dealers to reduce inventories in fiscal 2025 - The recreational powerboat industry is challenged by high inflation and interest rates, impacting production costs and consumer demand113 - Dealers are expected to reduce inventories further in fiscal 2025 due to high flooring costs and a soft retail environment114 - The company anticipates delivering higher sales in the second half of fiscal 2025 relative to the prior year and the first half of fiscal 2025118 Results of Operations Q3 2025 net sales rose 12.4% driven by the Malibu segment, while nine-month sales fell 10.4% due to lower volumes across all segments Q3 2025 vs Q3 2024 Net Sales by Segment (in millions) | Segment | Q3 2025 | Q3 2024 | % Change | | :--- | :--- | :--- | :--- | | Malibu | $102.2 | $60.2 | +69.8% | | Saltwater Fishing | $71.9 | $81.2 | -11.5% | | Cobalt | $54.6 | $62.0 | -12.0% | | Total | $228.7 | $203.4 | +12.4% | Nine Months 2025 vs 2024 Net Sales by Segment (in millions) | Segment | Nine Months 2025 | Nine Months 2024 | % Change | | :--- | :--- | :--- | :--- | | Malibu | $232.4 | $241.6 | -3.8% | | Saltwater Fishing | $206.8 | $256.6 | -19.4% | | Cobalt | $161.4 | $172.2 | -6.3% | | Total | $600.5 | $670.3 | -10.4% | - Gross margin for the nine months ended March 31, 2025 decreased 160 basis points to 18.5% due to lower sales and fixed cost deleverage146 - General and administrative expenses for the nine months increased 34.5% to $73.6 million, driven by legal settlements and related fees147 Non-GAAP Financial Measures The company provides reconciliations for Adjusted EBITDA and Adjusted Fully Distributed Net Income, showing mixed results compared to the prior year Adjusted EBITDA Reconciliation (in thousands) | Metric | Three Months Ended Mar 31, 2025 | Three Months Ended Mar 31, 2024 | Nine Months Ended Mar 31, 2025 | Nine Months Ended Mar 31, 2024 | | :--- | :--- | :--- | :--- | :--- | | Net income (loss) | $13,173 | $(67,759) | $10,447 | $(36,845) | | Adjustments | $15,150 | $92,168 | $44,660 | $123,172 | | Adjusted EBITDA | $28,323 | $24,409 | $55,107 | $86,327 | | Adjusted EBITDA Margin | 12.4% | 12.0% | 9.2% | 12.9% | Adjusted Fully Distributed Net Income per Share | Metric | Three Months Ended Mar 31, 2025 | Three Months Ended Mar 31, 2024 | Nine Months Ended Mar 31, 2025 | Nine Months Ended Mar 31, 2024 | | :--- | :--- | :--- | :--- | :--- | | Adjusted Fully Distributed Net Income per Share | $0.72 | $0.63 | $1.12 | $2.33 | Liquidity and Capital Resources The company's primary cash sources are operations and its credit facility, with fiscal 2025 capital expenditures projected at $25.0 to $30.0 million - Primary uses of cash include working capital, capital investments, debt repayments, acquisitions, and stock repurchases162 - Expected capital expenditures for fiscal year 2025 are between $25.0 million and $30.0 million164 - As of March 31, 2025, $39.9 million was available for repurchase under the 2024 Repurchase Program, which runs through June 30, 2025170 Quantitative and Qualitative Disclosures About Market Risk The company reports no material changes in its market risk from the disclosures in its most recent Annual Report on Form 10-K - There have been no material changes in market risk from those disclosed in the Company's Form 10-K for the year ended June 30, 2024187 Controls and Procedures Management concluded that disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal controls - Based on an evaluation, the CEO and CFO concluded that disclosure controls and procedures were effective as of March 31, 2025189 - There were no material changes in internal control over financial reporting during the quarter ended March 31, 2025190 PART II OTHER INFORMATION Legal Proceedings The company details significant ongoing legal matters for which the potential costs or outcomes cannot currently be estimated - The company is involved in several lawsuits, the outcomes of which are uncertain and for which no reserve has been established192 - Key legal matters are detailed in Note 15 and include insurance litigation, disputes with Tommy's Boats, a securities class action, and a customer class action949698100 Risk Factors The company reports no material changes to the risk factors previously disclosed in its Annual Report on Form 10-K - There were no material changes to the risk factors discussed in the Annual Report on Form 10-K for the year ended June 30, 2024193 Unregistered Sales of Equity Securities and Issuer Purchases The company repurchased 279,340 shares for $10.1 million during the quarter, with $39.9 million remaining under its repurchase program Share Repurchases for Quarter Ended March 31, 2025 | Period | Total Shares Purchased | Average Price Paid Per Share | Approx. Dollar Value Remaining Under Plan | | :--- | :--- | :--- | :--- | | Jan 2025 | 122,710 | $36.64 | $45,459,000 | | Feb 2025 | 118,077 | $36.20 | $41,142,000 | | Mar 2025 | 38,553 | $31.90 | $39,900,000 | | Total | 279,340 | $35.94 | $39,900,000 | - The 2024 Repurchase Program allows for the repurchase of up to $50.0 million of Class A Common Stock and LLC Units through June 30, 2025195 Defaults Upon Senior Securities The company reported no defaults upon senior securities during the period - None196 Mine Safety Disclosures This item is not applicable to the company - Not Applicable197 Other Information The company reported no other information required to be disclosed under this item - None198 Exhibits This section lists all exhibits filed with the report, including corporate governance documents and required CEO/CFO certifications - The report includes standard corporate governance documents and required CEO/CFO certifications as exhibits199