Malibu Boats(US:MBUU)2022-11-04 18:24Financial Data and Key Metrics Changes - Net sales increased nearly 20% to a record $302 million compared to the prior year [12] - Net income grew 29% to $36.1 million, while adjusted EBITDA rose 28% to $57.1 million, both records for the first quarter [12] - Gross margins increased 110 basis points to 24.7%, and adjusted EBITDA margin improved 130 basis points to 18.9% [13][39] - Consolidated net sales per unit increased 7.9% to approximately $135,000 per unit [36] Business Line Data and Key Metrics Changes - Malibu and Axis brands represented approximately 54.4% of unit sales, saltwater fishing represented 24.5%, and Cobalt made up 21.1% [36] - Retail demand remains strong, with Pursuit showing a 40% increase in show sales compared to last year [16] - Saltwater brands are experiencing a higher-than-normal retail sold order book, while channel inventory remains low [22] Market Data and Key Metrics Changes - The marine industry is facing supply chain issues, particularly with engines, windshields, and electronics [23] - Freshwater channel inventory is consistent with respective markets, but saltwater channel inventory is substantially lower than the industry [31] - The overall marine on-hand inventory is down by 34% compared to previous years [30] Company Strategy and Development Direction - The company has rebranded to reflect a modern and growing identity, emphasizing that MBI is greater than the sum of its parts [15] - The strategy focuses on vertical integration and operational excellence to drive growth [81] - The company aims to capitalize on the solid retail environment and demand for new model year boats [81] Management's Comments on Operating Environment and Future Outlook - Management acknowledges headwinds facing consumers and the industry, including supply chain disruptions [20] - Despite challenges, the company remains confident in its ability to deliver long-term value and profitability [42][43] - Expectations for fiscal year 2023 remain unchanged, anticipating mid to high single-digit percentage growth year-over-year [42] Other Important Information - Hurricane Ian impacted revenue by approximately $5 million and contribution margin by $1.6 million, expected to be made up in the second fiscal quarter [14] - The company is experiencing elevated average selling prices (ASPs) as customers demand larger boats with more features [18] Q&A Session Summary Question: Guidance for the second quarter revenue and EBITDA margin - Management explained the discrepancy between revenue growth and EBITDA margin due to timing of price increases and mix shifts within the business [48] Question: Dealer appetite for inventory in the off-season - Dealers are optimistic and realize the need to carry inventory, with some flooring support being provided [50][51] Question: Retail outlook for fiscal 2023 - Management confirmed that the projection for retail remains unchanged, with high-single-digit decreases expected [58] Question: Affordability concerns due to rising prices and interest rates - Management noted that despite rising prices, demand remains strong, and consumers continue to purchase boats [66][70] Question: Impact of Hurricane Ian on replacement demand - Management indicated it is early to quantify replacement demand but expects it to materialize as insurance settlements are made [73] Question: Current discounting trends in the retail channel - Management stated that discounting is still above historical norms but may normalize as inventory levels increase [77]