Malibu Boats, Inc. Announces Record Fourth Quarter and Fiscal 2021 Results
Malibu Boats, Inc. (MBUU) reported exceptional financial results for Q4 and FY 2021. Q4 net sales soared 133.2% to $276.7 million, with a 437.1% increase in net income to $35 million. Adjusted EBITDA rose by 272.2% to $57.6 million. For FY 2021, net sales increased 41.9% to $926.5 million, while net income grew 76.8% to $114.3 million. The company's guidance for FY 2022 anticipates high-teens net sales growth and a consistent Adjusted EBITDA margin of around 20%. These results reflect strong demand and successful product innovations.
- Q4 net sales increased 133.2% to $276.7 million.
- Net income for Q4 surged 437.1% to $35 million.
- Adjusted EBITDA for Q4 rose 272.2% to $57.6 million.
- FY 2021 net sales up 41.9% to $926.5 million.
- Net income for FY 2021 increased 76.8% to $114.3 million.
- FY 2022 guidance forecasts high-teens net sales growth.
- General and administrative expenses increased 55.1% for FY 2021, impacting profitability.
- Cost of sales rose significantly, up 36.9% for FY 2021.
LOUDON, Tenn., Aug. 26, 2021 (GLOBE NEWSWIRE) -- Malibu Boats, Inc. (Nasdaq: MBUU) today announced its financial results for the fourth quarter and fiscal year ended June 30, 2021.
Fiscal Fourth Quarter 2021 Highlights Compared to Fiscal Fourth Quarter 2020
- Net sales increased
133.2% to$276.7 million - Unit volume increased
110.7% - Gross profit increased
193.9% to$69.2 million - Net income increased
437.1% to$35.0 million - Adjusted EBITDA increased
272.2% to$57.6 million - Net income available to Class A Common Stock per share (diluted) increased
451.7% to$1.60 per share - Adjusted fully distributed net income per share increased
360.0% to$1.84 per share on a fully distributed weighted average share count of 21.7 million shares of Class A Common Stock
Fiscal Year 2021 Highlights Compared to Fiscal Year 2020
- Net sales increased
41.9% to$926.5 million - Unit volume increased
27.0% - Gross profit increased
58.4% to$236.5 million - Net income increased
76.8% to$114.3 million - Adjusted EBITDA increased
71.3% to$190.1 million - Net income available to Class A Common Stock per share (diluted) increased
77.3% to$5.23 per share - Adjusted fully distributed net income per share increased
82.7% to$6.01 on a fully distributed weighted average share count of 21.6 million shares of Class A Common Stock
“Our premium brands, market leading innovation and operational excellence delivered another record-breaking year with net sales increasing more than
“Retail demand has maintained its breathtaking pace, and the trend toward larger, more custom boats is persisting. Of new boat orders, we believe over
Results of Operations for the Fourth Quarter and Fiscal Year 2021 (Unaudited)
| Three Months Ended June 30, | Fiscal Year Ended June 30, | |||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||
| (In thousands, except unit and per unit data) | ||||||||||||||||
| Net Sales | $ | 276,722 | $ | 118,661 | $ | 926,515 | $ | 653,163 | ||||||||
| Gross Profit | $ | 69,227 | $ | 23,552 | $ | 236,485 | $ | 149,270 | ||||||||
| Gross Profit Margin | 25.0 | % | 19.8 | % | 25.5 | % | 22.8 | % | ||||||||
| Net Income | $ | 34,962 | $ | 6,510 | $ | 114,282 | $ | 64,656 | ||||||||
| Net Income Margin | 12.6 | % | 5.5 | % | 12.3 | % | 9.9 | % | ||||||||
| Adjusted EBITDA | $ | 57,620 | $ | 15,483 | $ | 190,103 | $ | 110,947 | ||||||||
| Adjusted EBITDA Margin | 20.8 | % | 13.1 | % | 20.5 | % | 17.0 | % | ||||||||
Comparison of the Fourth Quarter Ended June 30, 2021 to the Fourth Quarter Ended June 30, 2020
Net sales for the three months ended June 30, 2021 increased
Net sales attributable to our Malibu segment increased to
Net sales from our Saltwater Fishing segment increased
Net sales from our Cobalt segment increased
Our overall net sales per unit increased
Cost of sales for the three months ended June 30, 2021 increased
Gross profit for the three months ended June 30, 2021 increased
Selling and marketing expenses for the three months ended June 30, 2021 increased
Operating income for the three months ended June 30, 2021 increased to
Comparison of the Fiscal Year Ended June 30, 2021 to the Fiscal Year Ended June 30, 2020
Net sales for fiscal year 2021 increased
Net sales attributable to our Malibu segment increased
Net sales from our Saltwater Fishing segment increased
Net sales from our Cobalt segment increased
Our overall net sales per unit increased
Cost of sales for fiscal year 2021 increased
Gross profit for fiscal year 2021 increased
Selling and marketing expense for fiscal year 2021 decreased
Operating income for fiscal year 2021 increased to
Fiscal 2022 Guidance
For the full fiscal year 2022, Malibu anticipates net sales growth percentage in the high-teens year-over-year and Adjusted EBITDA margin of approximately
The Company has not provided reconciliations of guidance for Adjusted EBITDA margin, in reliance on the unreasonable efforts exception provided under Item 10(e)(1)(i)(B) of Regulation S-K. The Company is unable, without unreasonable efforts, to forecast certain items required to develop meaningful comparable GAAP financial measures. These items include acquisition and integration related expenses, costs related to the Company’s vertical integration initiatives and litigation expenses that are difficult to predict in advance in order to include in a GAAP estimate.
Webcast and Conference Call Information
The Company will host a webcast and conference call to discuss fourth quarter fiscal year 2021 results on Thursday, August 26, 2021, at 8:30 a.m. Eastern Time. Investors and analysts can participate on the conference call by dialing (855) 433-0928 or (484) 756-4263 and using Conference ID #7271265. Alternatively, interested parties can listen to a live webcast of the conference call by logging on to the Investor Relations section on the Company’s website at http://investors.malibuboats.com. A replay of the webcast will also be archived on the Company’s website for twelve months.
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 market leader in the performance sport boat category through its Malibu and Axis 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 saltwater fishing boat market with its Pursuit and Cobia offshore boats and Pathfinder, Maverick, and Hewes flats and bay boat brands. 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, www.pursuitboats.com, or www.maverickboatgroup.com.
Non-GAAP Financial Measures
This release includes the following financial measures defined as non-GAAP financial measures by the Securities and Exchange Commission: Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Fully Distributed Net Income and Adjusted Fully Distributed Net Income per Share. These measures have limitations as analytical tools and should not be considered as an alternative to, or more meaningful than, net income as determined in accordance with U.S. generally accepted accounting principles (“GAAP”) or as an indicator of our liquidity. Our presentation of these non-GAAP financial measures should also not be construed as an inference that our results will be unaffected by unusual or non-recurring items. Our computations of these non-GAAP financial measures may not be comparable to other similarly titled measures of other companies.
We define Adjusted EBITDA as net income before interest expense, income taxes, depreciation, amortization and non-cash, non-recurring or non-operating expenses, including certain professional fees, acquisition and integration-related expenses, non-cash compensation expense, expenses related to interruption to our engine supply during the labor strike by United Auto Workers (“UAW”) against General Motors, expenses attributable to our engine vertical integration initiative, and adjustments to our tax receivable agreement liability. We define Adjusted EBITDA Margin as Adjusted EBITDA divided by net sales. Adjusted EBITDA and Adjusted EBITDA Margin are not measures of net income as determined by GAAP. Management believes Adjusted EBITDA and Adjusted EBITDA Margin allow investors to evaluate our operating performance and compare our results of operations from period to period on a consistent basis by excluding items that management does not believe are indicative of core operating performance. Management uses Adjusted EBITDA to assist in highlighting trends in our operating results without regard to our financing methods, capital structure, and non-recurring or non-operating expenses. We exclude the items listed above from net income in arriving at Adjusted EBITDA because these amounts can vary substantially from company to company within our industry depending upon accounting methods and book values of assets, capital structures, the methods by which assets were acquired and other factors.
Certain items excluded from Adjusted EBITDA are significant components in understanding and assessing a company’s financial performance, such as a company’s cost of capital and tax structure, as well as the historical costs of depreciable assets.
We define Adjusted Fully Distributed Net Income as net income attributable to Malibu Boats, Inc. (i) excluding income tax expense, (ii) excluding the effect of non-recurring or non-cash items, (iii) assuming the exchange of all LLC units into shares of Class A Common Stock, which results in the elimination of non-controlling interest in Malibu Boats Holdings, LLC (the "LLC"), and (iv) reflecting an adjustment for income tax expense on fully distributed net income before income taxes at our estimated effective income tax rate. Adjusted Fully Distributed Net Income is a non-GAAP financial measure because it represents net income attributable to Malibu Boats, Inc., before non-recurring or non-cash items and the effects of non-controlling interests in the LLC. We use Adjusted Fully Distributed Net Income to facilitate a comparison of our operating performance on a consistent basis from period to period that, when viewed in combination with our results prepared in accordance with GAAP, provides a more complete understanding of factors and trends affecting our business than GAAP measures alone. We believe Adjusted Fully Distributed Net Income assists our board of directors, management and investors in comparing our net income on a consistent basis from period to period because it removes non-cash or non-recurring items, and eliminates the variability of non-controlling interest as a result of member owner exchanges of LLC units into shares of Class A Common Stock. In addition, because Adjusted Fully Distributed Net Income is susceptible to varying calculations, the Adjusted Fully Distributed Net Income measures, as presented in this release, may differ from and may, therefore, not be comparable to similarly titled measures used by other companies.
A reconciliation of our net income as determined in accordance with GAAP to Adjusted EBITDA and the numerator and denominator for our net income available to Class A Common Stock per share to Adjusted Fully Distributed Net Income per share of Class A Common Stock is provided under "Reconciliation of Non-GAAP Financial Measures".
Cautionary Statement Concerning 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 statements in this press release regarding trends toward larger, more custom boats; expected strong retail demand; and the introduction of new boat models for model year 2022.
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 effects of the COVID-19 pandemic on us; our ability to execute our manufacturing strategy successfully; our large fixed cost base; increases in the cost of, or unavailability of, raw materials, component parts and transportation costs; disruptions in our suppliers’ operations; our reliance on third-party suppliers for raw materials and components and any interruption of our informal supply arrangements; our reliance on certain suppliers for our engines and outboard motors; our ability to meet our manufacturing workforce needs; exposure to workers' compensation claims and other workplace liabilities; our ability to grow our business through acquisitions and integrate such acquisitions to fully realize their expected benefits; our growth strategy which may require us to secure significant additional capital; our ability to protect our intellectual property; disruptions to our network and information systems; our success at developing and implementing a new enterprise resource planning system; risks inherent in operating in foreign jurisdictions; a natural disaster, global pandemic or other disruption at our manufacturing facilities; increases in income tax rates or changes in income tax laws; our dependence on key personnel; general industry, economic and business conditions; our ability to enhance existing products and market new or enhanced products; the continued strength of our brands; the seasonality of our business; intense competition within our industry; increased consumer preference for used boats or the supply of new boats by competitors in excess of demand; competition with other activities for consumers’ scarce leisure time; changes in currency exchange rates; an increase in energy and fuel costs; our reliance on our network of independent dealers and increasing competition for dealers; the financial health of our dealers and their continued access to financing; our obligation to repurchase inventory of certain dealers; our exposure to claims for product liability and warranty claims; changes to U.S. trade policy, tariffs and import/export regulations; any failure to comply with laws and regulations including environmental, workplace safety and other regulatory requirements; general industry, economic and business conditions; significant fluctuations in our annual and quarterly financial results; unfavorable weather conditions, policies impacting access to waterways and shelter-in-place orders; our reliance on our network of independent dealers and increasing competition for dealers; the financial health of our dealers and their continued access to financing; our obligation to repurchase inventory of certain dealers; the success of our engine integration strategy; our reliance on certain suppliers for our engines and outboard motors; our reliance on third-party suppliers for raw materials and components and any interruption of our informal supply arrangements; our ability to meet our manufacturing workforce needs; exposure to workers' compensation claims and other workplace liabilities; our ability to grow our business through acquisitions and integrate such acquisitions to fully realize their expected benefits, including our recent acquisition of Maverick Boat Group; our growth strategy which may require us to secure significant additional capital; our large fixed cost base; intense competition within our 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; competition with other activities for consumers’ scarce leisure time; the continued strength of our brands; our ability to execute our manufacturing strategy successfully; our exposure to claims for product liability and warranty claims; our dependence on key personnel; our ability to protect our intellectual property; disruptions to our network and information systems; risks inherent in operating in foreign jurisdictions; rising concern regarding international tariffs; changes in currency exchange rates; an increase in energy and fuel costs; any failure to comply with laws and regulations including environmental and other regulatory requirements; a natural disaster, global pandemic or other disruption at our manufacturing facilities; increases in income tax rates or changes in income tax laws; our holding company structure; covenants in our credit agreement governing our revolving credit facility and term loan which may limit our operating flexibility; our variable rate indebtedness which subjects us to interest rate risk; our obligation to make certain payments under a tax receivables agreement; and any failure to maintain effective internal control over financial reporting or disclosure controls or procedures; and other factors affecting us detailed from time to time in our filings with the Securities and Exchange Commission. Many of these risks and uncertainties are outside our control, and there may be other risks and uncertainties which we do not currently anticipate because they relate to events and depend on circumstances that may or may not occur in the future. Although we believe that the expectations reflected in any forward-looking statements are based on reasonable assumptions at the time made, we 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. We undertake 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. Comparison of results for current and prior periods are not intended to express any future trends or indications of future performance, unless expressed as such, and should only be viewed as historical data.
Investor Contacts
Malibu Boats, Inc.
Wayne Wilson
Chief Financial Officer
(865) 458-5478
InvestorRelations@MalibuBoats.com
MALIBU BOATS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations and Comprehensive Income (Unaudited)
(In thousands, except share and per share data)
| Three Months Ended June 30, | Fiscal Year Ended June 30, | ||||||||||||||||||
| 2021 | 2020 | 2021 | 2020 | ||||||||||||||||
| Net sales | $ | 276,722 | $ | 118,661 | $ | 926,515 | $ | 653,163 | |||||||||||
| Cost of sales | 207,495 | 95,109 | 690,030 | 503,893 | |||||||||||||||
| Gross profit | 69,227 | 23,552 | 236,485 | 149,270 | |||||||||||||||
| Operating expenses: | |||||||||||||||||||
| Selling and marketing | 5,260 | 3,613 | 17,540 | 17,917 | |||||||||||||||
| General and administrative | 16,823 | 9,523 | 61,915 | 39,912 | |||||||||||||||
| Amortization | 2,113 | 1,509 | 7,255 | 6,131 | |||||||||||||||
| Operating income | 45,031 | 8,907 | 149,775 | 85,310 | |||||||||||||||
| Other (income) expense, net: | |||||||||||||||||||
| Other income, net | (986 | ) | (631 | ) | (1,015 | ) | (2,310 | ) | |||||||||||
| Interest expense | 732 | 824 | 2,529 | 3,888 | |||||||||||||||
| Other (income) expense, net | (254 | ) | 193 | 1,514 | 1,578 | ||||||||||||||
| Income before provision for income taxes | 45,285 | 8,714 | 148,261 | 83,732 | |||||||||||||||
| Provision for income taxes | 10,323 | 2,204 | 33,979 | 19,076 | |||||||||||||||
| Net income | 34,962 | 6,510 | 114,282 | 64,656 | |||||||||||||||
| Net income attributable to non-controlling interest | 1,235 | 307 | 4,441 | 3,094 | |||||||||||||||
| Net income attributable to Malibu Boats, Inc. | $ | 33,727 | $ | 6,203 | $ | 109,841 | $ | 61,562 | |||||||||||
| Comprehensive income: | |||||||||||||||||||
| Net income | $ | 34,962 | $ | 6,510 | $ | 114,282 | $ | 64,656 | |||||||||||
| Other comprehensive (loss) income: | |||||||||||||||||||
| Change in cumulative translation adjustment | (297 | ) | 1,782 | 1,493 | (304 | ) | |||||||||||||
| Other comprehensive (loss) income | (297 | ) | 1,782 | 1,493 | (304 | ) | |||||||||||||
| Comprehensive income | 34,665 | 8,292 | 115,775 | 64,352 | |||||||||||||||
| Less: comprehensive income attributable to non-controlling interest | 1,225 | 391 | 4,507 | 3,083 | |||||||||||||||
| Comprehensive income attributable to Malibu Boats, Inc., net of tax | $ | 33,440 | $ | 7,901 | $ | 111,268 | $ | 61,269 | |||||||||||
| Weighted average shares outstanding used in computing net income per share: | |||||||||||||||||||
| Basic | 20,843,921 | 20,598,897 | 20,752,652 | 20,662,750 | |||||||||||||||
| Diluted | 21,144,417 | 20,772,292 | 21,011,087 | 20,852,361 | |||||||||||||||
| Net income available to Class A Common Stock per share: | |||||||||||||||||||
| Basic | $ | 1.62 | $ | 0.30 | $ | 5.29 | $ | 2.98 | |||||||||||
| Diluted | $ | 1.60 | $ | 0.29 | $ | 5.23 | $ | 2.95 | |||||||||||
MALIBU BOATS, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets (Unaudited)
(In thousands, except share and per share data)
| June 30, 2021 | June 30, 2020 | ||||||||
| Assets | |||||||||
| Current assets | |||||||||
| Cash | $ | 41,479 | $ | 33,787 | |||||
| Trade receivables, net | 49,844 | 13,767 | |||||||
| Inventories, net | 116,685 | 72,946 | |||||||
| Prepaid expenses and other current assets | 4,775 | 3,954 | |||||||
| Total current assets | 212,783 | 124,454 | |||||||
| Property, plant and equipment, net | 132,913 | 94,310 | |||||||
| Goodwill | 101,033 | 51,273 | |||||||
| Other intangible assets, net | 235,363 | 139,892 | |||||||
| Deferred tax asset | 48,022 | 52,935 | |||||||
| Other assets | 12,670 | 14,482 | |||||||
| Total assets | $ | 742,784 | $ | 477,346 | |||||
| Liabilities | |||||||||
| Current liabilities | |||||||||
| Current maturities of long-term debt | $ | 4,250 | $ | — | |||||
| Accounts payable | 45,992 | 15,846 | |||||||
| Accrued expenses | 77,179 | 50,485 | |||||||
| Income taxes and tax distribution payable | 3,209 | 243 | |||||||
| Payable pursuant to tax receivable agreement, current portion | 3,773 | 3,589 | |||||||
| Total current liabilities | 134,403 | 70,163 | |||||||
| Deferred tax liabilities | 27,869 | 14 | |||||||
| Other liabilities | 15,892 | 16,727 | |||||||
| Payable pursuant to tax receivable agreement, less current portion | 44,441 | 46,076 | |||||||
| Long-term debt | 139,025 | 82,839 | |||||||
| Total liabilities | 361,630 | 215,819 | |||||||
| Stockholders' Equity | |||||||||
| Class A Common Stock, par value | 207 | 204 | |||||||
| Class B Common Stock, par value | — | — | |||||||
| Preferred Stock, par value | — | — | |||||||
| Additional paid in capital | 111,308 | 103,797 | |||||||
| Accumulated other comprehensive loss | (1,639 | ) | (3,132 | ) | |||||
| Accumulated earnings | 263,552 | 153,711 | |||||||
| Total stockholders' equity attributable to Malibu Boats, Inc. | 373,428 | 254,580 | |||||||
| Non-controlling interest | 7,726 | 6,947 | |||||||
| Total stockholders’ equity | 381,154 | 261,527 | |||||||
| Total liabilities and stockholders' equity | $ | 742,784 | $ | 477,346 | |||||
MALIBU BOATS, INC. AND SUBSIDIARIES
Reconciliation of Non-GAAP Financial Measures
Reconciliation of Net Income to Non-GAAP Adjusted EBITDA and Adjusted EBITDA Margin (Unaudited):
The following table sets forth a reconciliation of net income as determined in accordance with GAAP to Adjusted EBITDA and Adjusted EBITDA Margin for the periods indicated (dollars in thousands):
| Three Months Ended June 30, | Fiscal Year Ended June 30, | ||||||||||||||||||
| 2021 | 2020 | 2021 | 2020 | ||||||||||||||||
| Net income | $ | 34,962 | $ | 6,510 | $ | 114,282 | $ | 64,656 | |||||||||||
| Provision for income taxes | 10,323 | 2,204 | 33,979 | 19,076 | |||||||||||||||
| Interest expense | 732 | 824 | 2,529 | 3,888 | |||||||||||||||
| Depreciation | 4,421 | 3,209 | 15,636 | 12,249 | |||||||||||||||
| Amortization | 2,113 | 1,509 | 7,255 | 6,131 | |||||||||||||||
| Professional fees 1 | 2,631 | 513 | 5,817 | 1,013 | |||||||||||||||
| Acquisition and integration related expenses 2 | 1,005 | — | 5,112 | — | |||||||||||||||
| Stock-based compensation expense 3 | 1,521 | 736 | 5,581 | 3,042 | |||||||||||||||
| UAW strike impact 4 | — | — | — | 2,564 | |||||||||||||||
| Adjustments to tax receivable agreement liability 5 | (88 | ) | (22 | ) | (88 | ) | (1,672 | ) | |||||||||||
| Adjusted EBITDA | $ | 57,620 | $ | 15,483 | $ | 190,103 | $ | 110,947 | |||||||||||
| Net Sales | $ | 276,722 | $ | 118,661 | $ | 926,515 | $ | 653,163 | |||||||||||
| Net Income Margin 6 | 12.6 | % | 5.5 | % | 12.3 | % | 9.9 | % | |||||||||||
| Adjusted EBITDA Margin 6 | 20.8 | % | 13.1 | % | 20.5 | % | 17.0 | % | |||||||||||
| (1 | ) | For the three months and fiscal years ended June 30, 2021 and 2020, represents legal and advisory fees related to our litigation with Skier's Choice, Inc. |
| (2 | ) | For the three months and fiscal year ended June 30, 2021, represents legal and advisory fees incurred in connection with our acquisition of Maverick Boat Group on December 31, 2020. Integration related expenses for the fiscal year ended June 30, 2021 include post-acquisition adjustments to cost of goods sold of |
| (3 | ) | 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. |
| (4 | ) | Represents costs incurred in connection with interruption to our engine supply during the UAW strike against General Motors. We purchase engines from General Motors LLC that we then prepare for marine use for our Malibu and Axis boats. During the UAW strike, General Motors suspended delivery of engine blocks to us and we incurred costs by entering into purchase agreements with two suppliers for additional engines to supplement our inventory of engine blocks for Malibu and Axis boats. |
| (5 | ) | For the three months ended June 30, 2021 and 2020 and fiscal years 2021 and 2020, we recognized other income from an adjustment in our tax receivable agreement liability as a result of a decrease in the estimated tax rate used in computing our future tax obligations and in turn, a decrease in the future tax benefit we expect to pay under our tax receivable agreement with pre-IPO owners. |
| (6 | ) | 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. |
Reconciliation of Non-GAAP Adjusted Fully Distributed Net Income (Unaudited):
The following table shows the reconciliation of the numerator and denominator for net income available to Class A Common Stock per share to Adjusted Fully Distributed Net Income per Share of Class A Common Stock for the periods presented (in thousands except share and per share data):
| Three Months Ended June 30, | Fiscal Year Ended June 30, | |||||||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||||||
| Reconciliation of numerator for net income available to Class A Common Stock per share to Adjusted Fully Distributed Net Income per Share of Class A Common Stock: | ||||||||||||||||||||
| Net income attributable to Malibu Boats, Inc. | $ | 33,727 | $ | 6,203 | $ | 109,841 | $ | 61,562 | ||||||||||||
| Provision for income taxes | 10,323 | 2,204 | 33,979 | 19,076 | ||||||||||||||||
| Professional fees 1 | 2,631 | 513 | 5,817 | 1,013 | ||||||||||||||||
| Acquisition and integration related expenses 2 | 2,664 | 1,062 | 10,558 | 4,262 | ||||||||||||||||
| Fair market value adjustment for interest rate swap 3 | — | — | — | 68 | ||||||||||||||||
| Stock-based compensation expense 4 | 1,521 | 736 | 5,581 | 3,042 | ||||||||||||||||
| UAW strike impact 5 | — | — | — | 2,564 | ||||||||||||||||
| Adjustments to tax receivable agreement liability 6 | (88 | ) | (22 | ) | (88 | ) | (1,672 | ) | ||||||||||||
| Net income attributable to non-controlling interest 7 | 1,235 | 307 | 4,441 | 3,094 | ||||||||||||||||
| Fully distributed net income before income taxes | 52,013 | 11,003 | 170,129 | 93,009 | ||||||||||||||||
| Income tax expense on fully distributed income before income taxes 8 | 12,275 | 2,586 | 40,150 | 21,857 | ||||||||||||||||
| Adjusted fully distributed net income | $ | 39,738 | $ | 8,417 | $ | 129,979 | $ | 71,152 | ||||||||||||
| Three Months Ended June 30, | Fiscal Year Ended June 30, | |||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||
| Reconciliation of denominator for net income available to Class A Common Stock per share to Adjusted Fully Distributed Net Income per Share of Class A Common Stock: | ||||||||||||||||
| Weighted average shares outstanding of Class A Common Stock used for basic net income per share: | 20,843,921 | 20,598,897 | 20,752,652 | 20,662,750 | ||||||||||||
| Adjustments to weighted average shares of Class A Common Stock: | ||||||||||||||||
| Weighted-average LLC units held by non-controlling unit holders 9 | 601,414 | 761,647 | 665,217 | 806,943 | ||||||||||||
| Weighted-average unvested restricted stock awards issued to management 10 | 231,165 | 181,015 | 212,579 | 155,433 | ||||||||||||
| Adjusted weighted average shares of Class A Common Stock outstanding used in computing Adjusted Fully Distributed Net Income per Share of Class A Common Stock: | 21,676,500 | 21,541,559 | 21,630,448 | 21,625,126 | ||||||||||||
The following table shows the reconciliation of net income available to Class A Common Stock per share to Adjusted Fully Distributed Net Income per Share of Class A Common Stock for the periods presented:
| Three Months Ended June 30, | Fiscal Year Ended June 30, | |||||||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||||||
| Net income available to Class A Common Stock per share | $ | 1.62 | $ | 0.30 | $ | 5.29 | $ | 2.98 | ||||||||||||
| Impact of adjustments: | ||||||||||||||||||||
| Provision for income taxes | 0.50 | 0.10 | 1.64 | 0.92 | ||||||||||||||||
| Professional fees 1 | 0.13 | 0.03 | 0.28 | 0.05 | ||||||||||||||||
| Acquisition and integration related expenses 2 | 0.13 | 0.06 | 0.51 | 0.21 | ||||||||||||||||
| Fair market value adjustment for interest rate swap 3 | — | — | — | — | ||||||||||||||||
| Stock-based compensation expense 4 | 0.07 | 0.04 | 0.27 | 0.15 | ||||||||||||||||
| UAW strike impact 5 | — | — | — | 0.12 | ||||||||||||||||
| Adjustment to tax receivable agreement liability 6 | — | — | — | (0.08 | ) | |||||||||||||||
| Net income attributable to non-controlling interest 7 | 0.06 | 0.02 | 0.21 | 0.15 | ||||||||||||||||
| Fully distributed net income per share before income taxes | 2.51 | 0.55 | 8.20 | 4.50 | ||||||||||||||||
| Impact of income tax expense on fully distributed income before income taxes 8 | (0.59 | ) | (0.12 | ) | (1.93 | ) | (1.06 | ) | ||||||||||||
| Impact of increased share count 11 | (0.08 | ) | (0.03 | ) | (0.26 | ) | (0.15 | ) | ||||||||||||
| Adjusted Fully Distributed Net Income per Share of Class A Common Stock | $ | 1.84 | $ | 0.40 | $ | 6.01 | $ | 3.29 | ||||||||||||
| (1 | ) | For the three months and fiscal years ended June 30, 2021 and 2020, represents legal and advisory fees related to our litigation with Skier's Choice, Inc. |
| (2 | ) | For the three months and fiscal year ended June 30, 2021, represents legal and advisory fees incurred in connection with the acquisition of Maverick Boat Group and amortization of intangibles acquired in connection with the acquisition of Maverick Boat Group, Pursuit and Cobalt. Integration related expenses for the fiscal year ended June 30, 2021 include post-acquisition adjustments to cost of goods sold of |
| (3 | ) | Represents the change in the fair value of our interest rate swap entered into on July 1, 2015. The swap matured on March 31, 2020. |
| (4 | ) | 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. |
| (5 | ) | Represents costs incurred in connection with interruption to our engine supply during the UAW strike against General Motors. We purchase engines from General Motors LLC that we then prepare for marine use for our Malibu and Axis boats. During the UAW strike, General Motors suspended delivery of engine blocks to us and we incurred costs by entering into purchase agreements with two suppliers for additional engines to supplement our inventory of engine blocks for Malibu and Axis boats. |
| (6 | ) | For the three months and fiscal years ended June 30, 2021 and 2020, we recognized other income from an adjustment in our tax receivable agreement liability as a result of a decrease in the estimated tax rate used in computing our future tax obligations and in turn, a decrease in the future tax benefit we expect to pay under our tax receivable agreement with pre-IPO owners. |
| (7 | ) | Reflects the elimination of the non-controlling interest in the LLC as if all LLC members had fully exchanged their LLC Units for shares of Class A Common Stock. |
| (8 | ) | Reflects income tax expense at an estimated normalized annual effective income tax rate of |
| (9 | ) | Represents the weighted average shares outstanding of LLC Units held by non-controlling interests assuming they were exchanged into Class A Common Stock on a one for one basis. |
| (10 | ) | Represents the weighted average unvested restricted stock awards included in outstanding shares during the applicable period that were convertible into Class A Common Stock and granted to members of management. |
| (11 | ) | Reflects impact of increased share counts assuming the exchange of all weighted average shares outstanding of LLC Units into shares of Class A Common Stock and the conversion of all weighted average unvested restricted stock awards included in outstanding shares granted to members of management. |
FAQ
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