Malibu Boats(US:MBUU)2023-05-03 20:11Financial Data and Key Metrics Changes - The company reported record net sales of $375 million, an increase of 9% year-over-year, with adjusted EBITDA of $79.3 million and net income of $53.5 million [16][42] - Consolidated net sales per unit increased by 5.9% to $142,252 per unit, driven by a greater mix of larger boats and year-over-year price increases [23] - Gross profit increased by 1.5% to $98.6 million, while gross margin decreased to 26.3% from 28.2% in the prior year [23][68] - Adjusted EBITDA margin decreased by 210 basis points to 21.1% [42] Business Line Data and Key Metrics Changes - The Malibu and Axis brands represented approximately 50.7% of unit sales, while Saltwater Fishing accounted for 27.2% and Cobalt for 22.1% [41] - The company experienced a softening of volumes within the higher-margin Malibu Axis segment as channel inventories normalized [35] - Demand in the Saltwater segment remained strong, with historic performance at boat shows contributing to sales [36] Market Data and Key Metrics Changes - Dealers reported optimism in the market, with additional room to fill channels heading into the first half of fiscal '24 [18] - The company noted that channel inventories for Malibu are ahead of schedule, while Cobalt is slightly behind [17][78] - The upcoming launch of new model year lineups is expected to drive dealer readiness for the prime selling season [17] Company Strategy and Development Direction - The company is committed to continued investment in vertical integration, including bringing tooling in-house and expanding Monsoon engines to Cobalt [8][20] - A new 260,000-square-foot facility is planned to enhance capacity and flexibility for growth [39] - The company aims to increase manufacturing capacity and expand its distribution network, particularly for Pursuit and Cobia brands [70] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in executing strategies despite macroeconomic uncertainties, emphasizing the ability to match wholesale to retail demand [33] - The company anticipates revenue growth of just over 10% year-over-year for fiscal '23, with adjusted EBITDA margin expected to decline slightly [43] - Management highlighted the importance of upcoming months to gauge retail demand as weather conditions improve [57] Other Important Information - The company acknowledged Wayne Wilson's departure after nearly 14 years, with confidence in the interim leadership [14][28] - The company is focused on adapting to a changing market environment while maintaining operational excellence [66] Q&A Session Summary Question: How will profitability in Saltwater change over time? - Management acknowledged that while Saltwater's mix may initially drag overall EBITDA margins, they expect long-term improvements as margins for acquired brands increase [45][74] Question: Can you help square shipments for the quarter with soft SSI data? - Management explained that low retail inventory necessitated increased wholesale shipments, and they expect easier comparisons in the second half of the year [51][52] Question: How has dealer profitability changed? - Management noted that dealer margins are adjusting post-COVID, with a focus on faster inventory turns as the selling season approaches [75] Question: What is the timeline for the new real estate purchase? - Management indicated that construction for the new facility is already underway and will be completed within the calendar year [84] Question: What are the drivers for fiscal '24? - Management highlighted new distribution opportunities and channel fill as key drivers for growth in fiscal '24 [92][80]