Malibu Boats, Inc. · NASDAQ:MBUU
Malibu Boats — Investor Day (September 2018)
92 slides from Malibu Boats's investor day presentation, Sep 12, 2018
Slide 1: Investor Day September 2018
INVESTOR DAY September 2018 MALIBU BOATS INC. THREE ICONIC BRANDS, ONE GREAT COMPANY
Slide 2: Forward-Looking Statements
2 FORWARD-LOOKING STATEMENTS This presentation 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
Slide 3: Use and Definition of Non-GAAP Financial Measures
3 USE AND DEFINITION OF NON-GAAP FINANCIAL MEASURES This presentation includes the following financial measures defined as non-GAAP financial measures by the SEC: Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Fully Distributed Net Income and Adjusted Fully Distributed Net Income per Share. These
Slide 4: Agenda
4 AGENDA STRATEGIC OVERVIEW 9:00 AM PURSUIT OVERVIEW 10:30 AM Jack Springer Jack Springer Chief Executive Officer Chief Executive Officer MANUFACTURING/OPERATIONS 9:15 AM SALES AND MARKETING 10:45 AM Ritchie Anderson Eric Bondy Chief Operating Officer Vice President Sales and Marketing Donna Tallent
Slide 5: Strategic Overview
5 STRATEGIC OVERVIEW MALIBU BOATS MALIBU BOATSINC. INC. THREE ICONIC BRANDS, ONE GREAT COMPANY
Slide 6: Video
6 VIDEO
Slide 7: Introductions
7 INTRODUCTIONS Jack Springer Wayne Wilson Ritchie Anderson Paxson St. Clair CEO CFO COO President, Cobalt NOT AVAILABLE Cory Duggar Donna Tallent Eric Bondy Rachael Green VP Engineering Director, EHS, PE, VP Sales & Marketing Engineering Manager Trailer and Engine MALIBU BOATS INC. THREE ICONIC BRA
Slide 8: Malibu at a Glance
8 MALIBU AT A GLANCE 1982 2014 >1,200 YEAR MALIBU INITIAL PUBLIC EMPLOYEES WAS FOUNDED OFFERING WORLDWIDE 3 3 ACQUISITIONS 4 ICONIC BRANDS: MALIBU, COBALT & AXIS 3 START UPS MANUFACTURING LOCATIONS 30+ 300+ 40+ MODELS OF DEALER COUNTRIES WORLD-CLASS LOCATIONS MALIBU BOATS WORLDWIDE PRODUCTS SOLD MAL
Slide 9: Investment Highlights
9 INVESTMENT HIGHLIGHTS • Leader in the growing marine industry • Strong track record of financial performance and market 24% 24% share gains NET REVENUE ADJUSTED EBITDA CAGR CAGR • Positioned to capitalize on continuing U.S. growth and FY2013-2018(1) FY2013-2018(1)(2) prepared for growth in interna
Slide 10: Diverse Product Offering
10 DIVERSE PRODUCT OFFERING Length 20 – 25 ft. Length 23 – 30 ft. Outboard Recreational Boats Length 23 – 43 ft. 10 Models 3 Models Retail Price $100K – $630K 15 Models Premium Performance / Recreational Boats Outboard Recreational Boats Retail Price $55K – $180K Retail Price $85K – $225K Length 20
Slide 11: Consistent Performance and Growth
11 CONSISTENT PERFORMANCE AND GROWTH Net Revenue and Adjusted EBITDA(1) FYE June 30th 2010-2017 Performance Sports Boat Market Share $550 $497.0 $100 35.0% 32.6% $90 30.0% $450 $92.7 $80 24.4% 23.1% 23.3% 21.7% $281.9 25.0% $253.0 $70 21.6% $350 $228.6 $60 20.0% 16.7% $250 $167.0 $190.9 $50 15.0% 11
Slide 12: Strategically Positioned to Capitalize on Growth
12 STRATEGICALLY POSITIONED TO CAPITALIZE ON GROWTH ENTRY INTO #1 WAKE FAST GROWING, HIGH VOLUME MARKET SHARE SURFING OUTBOARD MARKET IN GROWING SEGMENTS PHENOMENA WITH COBALT AND PURSUIT LONG TERM LEADING DISCIPLINED RELATIONSHIPS WITH WITH INNOVATION STRATEGIC BEST DEALERS AND PRODUCTS ACQUISITION
Slide 13: Significant Runway for Continued Growth
13 SIGNIFICANT RUNWAY FOR CONTINUED GROWTH INCREASING GROWING OPERATIONAL MARINE GDP MARKET EXCELLENCE AGGRESSIVE INVESTMENT INCREASING STRONGEST HOUSEHOLD INCOME CONSUMER EXPANSION IN 20 CONFIDENCE YEARS INNOVATION STRONG ENVIRONMENT THAT WE DON’T CONTROL… AND A …STRONGER STRATEGY THAT WE DO CONTRO
Slide 14: Significant Runway for Continued Growth
14 SIGNIFICANT RUNWAY FOR CONTINUED GROWTH STRONG ANNUAL GROWTH IN ADDRESSABLE MARKETS MALIBU / AXIS ~7% Remove COBALT ~ 5% Operational Market Growth Operational PURSUIT >10% Improvements Constraints Vertical Vertical New Product WITH AN INCREASING FOCUS Integration Integration ON$3.7 BILLION Surf S
Slide 15: A Portfolio of Market Leading Brands
15 A PORTFOLIO OF MARKET LEADING BRANDS Performance sport boats Sterndrive and outboard Saltwater outboard fishing Boat Segments Served boats Market Position Dual console: #4 Performance sport boats: #1 Sterndrive (20’ – 40’): #1 Center console (24’ – 43’): #15 (2017) Offshore: #2 Overall Market Gro
Slide 16: Growth Strategy
16 GROWTH STRATEGY Product and Strategic Innovation Distribution Vertical Acquisitions White Spaces Integration of Premium Companies MALIBU BOATS INC. THREE ICONIC BRANDS, ONE GREAT COMPANY
Slide 17: Key Takeaways from Today
17 KEY TAKEAWAYS FROM TODAY DYNAMIC OPERATIONAL EXCELLENCE WORLD CLASS PRODUCT DEVELOPMENT SOUND, STRATEGIC ACQUISITIONS OF PREMIUM BRANDS MARKET LEADER AND GROWING IN MULTIPLE SEGMENTS UNMATCHED INVESTMENT OPPORTUNITY MALIBU BOATS INC. THREE ICONIC BRANDS, ONE GREAT COMPANY
Slide 18: Operations Review
OPERATIONS REVIEW MALIBU BOATS INC. THREE ICONIC BRANDS, ONE GREAT COMPANY
Slide 19: Creating the Ultimate On the Water Experience
19 CREATING THE ULTIMATE ON THE WATER EXPERIENCE Safety OPERATIONAL EXCELLENCE MALIBU BOATS INC. THREE ICONIC BRANDS, ONE GREAT COMPANY
Slide 20: Continuous Improvement Initiatives
20 CONTINUOUS IMPROVEMENT INITIATIVES Product Development Capacity utilization/footprint Sourcing optimization Workforce Quality Development Safety Vertical Integration Management Manufacturing Efficiency MALIBU BOATS INC. THREE ICONIC BRANDS, ONE GREAT COMPANY
Slide 21: Operational Excellence
21 OPERATIONAL EXCELLENCE • Culture centered on superior employees building the highest quality products in the most efficient manner • Provides an unmatched value to our dealers and customers • Vertical integration • Implementing the same strategy at Cobalt and ultimately Pursuit • Drives margin ex
Slide 22: Safety
22 SAFETY MALIBU COBALT Incident EXPERIENCED 2,154,000 Rate EHS MANAGER hours w/o lost time incident 1.35 56% REDUCTION IN INCIDENT #1 Priority RATE INTEGRATE SAFETY SAFETY MANAGEMENT SYSTEM 1. Industry Incident rate average is 5.0 MALIBU BOATS INC. THREE ICONIC BRANDS, ONE GREAT COMPANY
Slide 23: Cobalt Operational Improvement in Just 12 Months
60% 70% 80% 90% 100% 110% 120% 130% Jan-17 2018 2017 Feb-17 MALIBU BOATS INC. Jul-18 Mar-17 Apr-17 Aug-18 May-17 Sep-18 Jun-17 Oct-18 Jul-17 Aug-17 Nov-18 Sep-17 Dec-18 Oct-17 Jan-19 Nov-17 UNITS SHIPPED Dec-17 Feb-19 Jan-18 Mar-19 Feb-18 Mar-18 Apr-19 Apr-18 SCHEDULE ATTAINMENT – SMALL BOATS May-19
Slide 24: Productivity Efficiency Focus
24 PRODUCTIVITY EFFICIENCY FOCUS MALIBU HOURS PER UNIT • Design for Manufacturing • Lean Process • One Piece Flow 2010 • Material Delivery • Standard Work • Automation 2018 MALIBU BOATS INC. THREE ICONIC BRANDS, ONE GREAT COMPANY2 4
Slide 25: Quality: Supplier and Internal Quality Focus
25 QUALITY SUPPLIER QUALITY FOCUS MALIBU DEFECTS PER UNIT (DPU) • Production Part Approval Process (PPAP) • 5 Levels • Supplier Corrective Action (CAR) • Education on Internal Quality System(QT9) for entry • Site Surveys & Self Assessments INTERNAL QUALITY FOCUS • Production Meeting DPU Stats • DPU
Slide 26: Malibu Capacity Utilization
26 MALIBU CAPACITY UTILIZATION 2009 2011-2012 2014 • Transform from batch build to one • Develop 5 year plan • Built shipping facility and mold storage piece flow in assembly and rigging • Permit Modification • Add gel coat booth • Upgrade ventilation system • Small parts w/ closed mold expansion •
Slide 27: Vertical Integration
27 VERTICAL INTEGRATION 2009 – 2010 Towers and board racks Concept 2011 – 2014 Continuous Design improvement Aluminum billet / stainless components Vertical Integration 2015 Quality Manufacturing Trailers Safety 2018 Engines MALIBU BOATS INC. THREE ICONIC BRANDS, ONE GREAT COMPANY
Slide 28: Engine Initiative
28 ENGINE INITIATIVE Strategic Rationale • Largest dollar procured part • Direct control around product path – design, innovation, calibration, integration and collaboration with the decades long industry leader, General Motors (GM) • Better value • Driver of additional Malibu profitability Path to
Slide 29: Vertical Integration: Trailer Manufacturing
29 VERTICAL INTEGRATION: TRAILER MANUFACTURING December January February March April May June 2014 2015 2015 2015 2015 2015 2015 Start issuing Acquire key Begin design Begin Prototype Complete Begin P.O.s for talent / begin work for ordering production staffing production for equipment sourcing fixt
Slide 30: Malibu Monsoon
30 MALIBU MONSOON A Storm is Brewing 3 0
Slide 31: Video
31 VIDEO
Slide 32: Design, Development & Testing
32 DESIGN, DEVELOPMENT & TESTING Partners • GM Motors • McLaren Engineering • Davinci Design • Roush Performance MALIBU BOATS INC. THREE ICONIC BRANDS, ONE GREAT COMPANY3 2
Slide 33: Three Iconic Brands, One Great Company
33 MALIBU BOATS INC. THREE ICONIC BRANDS, ONE GREAT COMPANY
Slide 34: Engine Project Update
34 ENGINE PROJECT UPDATE • Testing continues on engines • 4000+ hours of testing • M6Di engines have been sent to selected dealers • No known issues • EPA & CARB certifications completed 7/6/2018 • Facility work is complete • Ramp up production in progress • M6Di Soft Launch begins in September 2018
Slide 35: Product Engineering
PRODUCT ENGINEERING MALIBU BOATS INC. THREE ICONIC BRANDS, ONE GREAT COMPANY
Slide 36: Culture of Innovation
36 CULTURE OF INNOVATION Malibu introduces Command Center is backup camera released featuring two touchscreens that puts Malibu introduces the ultra- control of everything at premium M235 the driver’s fingertips Launch Axis brand of boats to attract entry- level consumers Malibu introduces the re- M
Slide 37: Customer-Centric Development Approach
37 CUSTOMER-CENTRIC DEVELOPMENT APPROACH Collaborative development to meet evolving consumer appetite for performance First-hand conversations with the Surveys, online product engineers/ forums, trade shows designers Many ideas are Shared passion for generated internally boating throughout the from
Slide 38: Product Design Criteria
38 PRODUCT DESIGN CRITERIA • Safety • Customer experience • Performance • Quality • Service • Design for Manufacturing MALIBU BOATS INC. THREE ICONIC BRANDS, ONE GREAT COMPANY
Slide 39: Investment in Engineering
39 INVESTMENT IN ENGINEERING • In 2009, Malibu had 1 degreed engineer; now has more than 25 • 3D printers • Computer-Aided Design (CAD) Software • Engineering test boats • More test equipment • Investing in our engineers (training, trade shows, more customer-facing events) • Taking the same approach
Slide 40: Nimble, Quick to React to Changing Preferences
40 NIMBLE, QUICK TO REACT TO CHANGING PREFERENCES • Increasing in-house design and engineering • Utilizing CAD-modeling and 3D printers • Identifying common parts • Foresight to identify industry trends (e.g. trade shows and dealer meetings) • Engineering lives with manufacturing during product inte
Slide 41: Product Launch Cadence
41 4 1 PRODUCT LAUNCH CADENCE • 36-month strategic product roadmap • 1st 18 months locked • 2nd 18 months flexible to change based on inputs • 12-18 Months concept to production • 4 new Malibu/Axis models a year • 30-40 new features/year • Phase gate process • Product Specification – data driven, ma
Slide 42: Malibu and Cobalt Engineering Partnership
42 MALIBU AND COBALT ENGINEERING PARTNERSHIP • IP and technology sharing • Phase Gate product development and acceleration of new product to market • Shared vertical integration opportunities with more coming for both companies • Integration of engineering tools and training • Extension of Malibu en
Slide 43: Cobalt Boats
COBALT BOATS MALIBU BOATS INC. THREE ICONIC BRANDS, ONE GREAT COMPANY
Slide 44: Cobalt Boats - Overview
44 COBALT BOATS - OVERVIEW • One of the most recognized marine brands in the world • #1 market share leader in stern drive boats from 20’-40’; 1/3 of the market in 24’-29’(1) • Dealers have #1 or #2 market share position in 65% of U.S. markets • R models are the strongest, best selling models in the
Slide 45: Market Opportunity
45 MARKET OPPORTUNITY 2010 - 2017 24’ – 29’ Sterndrive Market Share 2017 20’ – 40’ U.S. Sterndrive Market Share 39.4% Others 40.0% 32.6% 35.0% 32.1% 6.4% 30.0% 25.0% 6.6% 18.6% 16.5% 20.0% 14.2% 14.7% 15.2% 8.8% 15.0% 12.7% 13.2% 10.0% 8.9% 8.9% 7.0% 14.5% 14.6% 5.1% 6.4% 5.0% 3.6% 0.0% Cobalt Sea R
Slide 46: Cobalt Product Overview
46 COBALT PRODUCT OVERVIEW GATEWAY R SERIES A SERIES OUTBOARD SURF SERIES SERIES SERIES • “Entry Level” model line for • The R Series targets • The A Series is a • The Outboard Series is • Cobalt’s line of surf ready 1st time buyer / younger Cobalt’s core customer brand/image building Cobalt’s first
Slide 47: Growth Opportunities
47 GROWTH OPPORTUNITIES Dealer Improvement Outboard Product 30 - 40 ft Day Cruiser Segment Surf Product International Distribution Operational Excellence MALIBU BOATS INC. THREE ICONIC BRANDS, ONE GREAT COMPANY
Slide 48: Integration Progress
48 INTEGRATION PROGRESS Progress After the 1st Year: New Product Development Sales and Dealer Development Process • Malibu’s operational prowess has • Cobalt's development process was helped Cobalt increase throughput outdated and new models • Adding news dealers had been by 40% were behind slowed d
Slide 49: Acquisition of Pursuit Boats
ACQUISITION OF PURSUIT BOATS MALIBU BOATS INC. THREE ICONIC BRANDS, ONE GREAT COMPANY
Slide 50: Compelling Investment Thesis
50 COMPELLING INVESTMENT THESIS Accretive transaction that supports profitability and margin expansion Distribution growth opportunity for Pursuit and distribution synergies with Cobalt exist Ability to leverage manufacturing, design expertise and distribution to accelerate outboard growth Broadens
Slide 51: Transaction Announcement Summary
51 TRANSACTION ANNOUNCEMENT SUMMARY Acquisition of meaningful scale and opportunity Premium brand in a large and fast-growing market segment Consistent with our stated strategic acquisition approach Further enhances and diversifies Malibu’s product offerings Similar business model allows us to use o
Slide 52: Pursuit Boats at a Glance
52 PURSUIT BOATS AT A GLANCE • A leader in the saltwater outboard fishing boat market • Proven product design expertise • Strong reputation for innovation and quality • High growth market with momentum • Numerous opportunities for growth and profitability enhancement • Maintains a loyal customer bas
Slide 53: Pursuit Evolution
53 PURSUIT EVOLUTION Key Statistics ($MM) Company Overview • 1974: S2 Yachts, Inc. (“S2”), parent $124 15 company, is founded • Privately-owned manufacturer of luxury TTM June 2018 # of Boat Fort powerboats, including inboard power yachts, Pierce, Net Sales Models cruising and sport fishing boats FL
Slide 54: Product Offering
54 PRODUCT OFFERING CENTER CONSOLE OFFSHORE DUAL CONSOLE • Central helm and open hull provide 360-degree • Combines seaworthiness and fishability with the • Superior seating on both sides of the boat provide access to the water luxury of cruisers comfortable lounge areas for many people • Ideal for
Slide 55: Opportunity for Growth and Improvement
55 OPPORTUNITY FOR GROWTH AND IMPROVEMENT Fast-Growing Saltwater • Malibu will eliminate capacity constraints through a combination of Outboard Market footprint expansion and operational efficiencies • Product development opportunities in whitespace and adjacent Robust Product Portfolio markets Leve
Slide 56: Financial Details
56 FINANCIAL DETAILS ~6.5x PURCHASE PRICE MULTIPLE Q2 FY19 ~550 ~5.8x EXPECTED CLOSE ANNUAL UNIT PURCHASE PRICE MULTIPLE VOLUME NET OF TAX BENEFIT ~$225K LOW 20s >.$35 NET SALES PER SHARE GROSS MARGIN % PER UNIT ANNUAL ACCRETION(1) 1. Excluding Amortization and Purchase Accounting Adjustments. MALIB
Slide 57: Sales and Marketing
SALES AND MARKETING MALIBU BOATS INC. THREE ICONIC BRANDS, ONE GREAT COMPANY
Slide 58: Video
58 VIDEO
Slide 59: Customer Profile
59 CUSTOMER PROFILE The Malibu customer is aged 30-55 with high income, the Axis customer fills the gap being slightly younger and while still a high income lesser than Malibu MALIBU BOATS INC. THREE ICONIC BRANDS, ONE GREAT COMPANY
Slide 60: Customer Characteristics
60 CUSTOMER CHARACTERISTICS MALIBU CUSTOMER PROFILE AXIS CUSTOMER PROFILE FAMILY 89% FAMILY 86% PURCHASE MALIBU OWNERS PURCHASE AXIS OWNERS HAVE KIDS/GRANDKIDS HAVE KIDS/GRANDKIDS EXPERIENCED >50% NOT AS SEASONED 30% BOAT OWNERS HAVE OWNED 4 OR HAVE OWNED 4 OR MORE BOATS BOAT OWNERS MORE BOATS REPEA
Slide 61: Net Promoter Score
61 NET PROMOTER SCORE Apple Corp 68 MALIBU BOATS INC. THREE ICONIC BRANDS, ONE GREAT COMPANY
Slide 62: Dealer Overview
62 DEALER OVERVIEW 6 2 Strongest distribution channel in tow boat space #1 MARKET SHARE IN THE WORLD WITH NEARLY 4 OUT OF EVERY 10 BOATS SOLD 135 42% NORTH AMERICAN 10+ YEARS WITH MALIBU = DEALERS SEASONED CHANNEL PARTNERS 92% 80% EXCLUSIVE MALIBU/AXIS CARRY TANGENTIAL LINE TOW BOAT REPRESENTATION (
Slide 63: Sales Growth Strategy
63 SALES GROWTH STRATEGY • Leverage best in class products to drive share growth • Malibu/Axis will continue to be the leader in new products and technology • Continue Domestic Dominance • Maximize dealer productivity, focus energies on markets that have the best possible return, challenge for #1 in
Slide 64: Model Year 2019 Products to Drive Share Growth
64 MODEL YEAR 2019 PRODUCTS TO DRIVE SHARE GROWTH 2019 Malibu 25 LSV 2019 Malibu 22 LSV 2019 Axis A22 2019 Axis T23 MALIBU BOATS INC. THREE ICONIC BRANDS, ONE GREAT COMPANY
Slide 65: Video
65 VIDEO
Slide 66: Model Year 2019 Products to Drive Share Growth
66 MODEL YEAR 2019 PRODUCTS TO DRIVE SHARE GROWTH 2019 Malibu 25 LSV 2019 Malibu 22 LSV 2019 Axis A22 2019 Axis T23 MALIBU BOATS INC. THREE ICONIC BRANDS, ONE GREAT COMPANY
Slide 67: Video
67 VIDEO
Slide 68: Marketing Initiatives
68 MARKETING INITIATIVES • Strong National Presence • Best in class website/Boat Configurator • Organic Digital Audience • 2.7M Social interactions • Key Market Strategy • Geo Fenced, targeted ramp up to drive frequency and reach • Local Presence • Grass roots marketing at the local level with deale
Slide 69: Social Media Landscape
69 SOCIAL MEDIA LANDSCAPE 500,000 400,000 300,000 200,000 100,000 - Malibu Axis Nautique Mastercraft Tige Centurion Moomba Facebook Page Likes Instagram followers Twitter followers • Largest combined social audience • Leading the industry in social interactions 1. Source: SSI as of December 31, 2017
Slide 70: Award-Winning 3-D Build a Boat Website
70 AWARD-WINNING 3-D BUILD A BOAT WEBSITE • Utilizes state of the art Web GL technology • Allows for complete configuration as well as manipulation of the image for viewing • Change exterior and interior colors, add accessories, change time of day, and save/send to dealer • Malibu/Axis Build a Boat
Slide 71: Malibu Just Ride Tour
71 MALIBU JUST RIDE TOUR Multi-stop, grass roots dealer marketing events Promoted regionally and locally using traditional and social channels Malibu personnel, athletes and dealer participation in on water events Dealers leverage VIP customers at events MALIBU BOATS INC. THREE ICONIC BRANDS, ONE GR
Slide 72: Financial Performance
FINANCIAL PERFORMANCE MALIBU BOATS INC. THREE ICONIC BRANDS, ONE GREAT COMPANY
Slide 73: Recap of Fiscal 2018
73 RECAP OF FISCAL 2018 AFDNI per Share(1) • Record FY18 net sales, gross profit, Adjusted EBITDA, and AFDNI per share $2.60 $1.56 • Net sales are up 76.3% year-over-year • Net sales per unit increased 6.9% FY 2017 FY 2018 • Driven by Y/Y price increases • New and larger model mix Adjusted EBITDA(2)
Slide 74: Growth Company with a Proven Track Record
74 GROWTH COMPANY WITH A PROVEN TRACK RECORD Net Sales ($mm)(2) $497.0 Malibu: $167.0 $190.9 $228.6 $253.0 $281.9 Consistent and FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 continued performance Adjusted EBITDA ($mm)(2)(3) since IPO(1) $92.7 $55.7 $43.6 $48.2 $31.8 $37.3 FY 2013 FY 2014 FY 2015
Slide 75: Strong Growth in AFDNI EPS
75 GROWTH COMPANY WITH A PROVEN TRACK RECORD Strong growth in AFDNI EPS(2) Adjusted Fully Distributed Net Income Per Share ($)(1)(2) $2.60 • Malibu has grown AFDNI per $1.56 share substantially over the past $1.11 $1.32 four years $0.68 $0.78 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 • 66.7% g
Slide 76: Robust Free Cash Flow Generation
76 GROWTH COMPANY WITH A PROVEN TRACK RECORD Robust free cash flow Free Cash Flow ($mm)(1)(2) generation(2) $82.3 $42.0 $46.5 • Free cash flow generation is a $28.9 $31.4 $38.2 result of healthy operating FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 margins and low capital requirements (recurring
Slide 77: Margin Expansion Goals
77 MARGIN EXPANSION GOALS • Our stated and achieved goal at the IPO was to reach Adjusted EBITDA margins >20% • The acquisition of Cobalt in July 2017 reset our margin baseline • Our FY18 Adjusted EBITDA margin was 18.7% • When the acquisition of Pursuit is incorporated we will reset our margins aga
Slide 78: Capital Allocation Priorities
78 CAPITAL ALLOCATION PRIORITIES 1. ORGANIC INVESTMENT / STRATEGIC ACQUISITIONS TECHNOLOGY / PROCESS ENGINEERING / VERTICAL INNOVATION / BRAND OPERATIONAL INTEGRATION EXPANSION ENHANCEMENTS 3. RETURN OF CAPITAL TO 2. DEBT PAYDOWN SHAREHOLDERS MALIBU BOATS INC. THREE ICONIC BRANDS, ONE GREAT COMPANY
Slide 79: FY19 Full Year Outlook
79 FY19 FULL YEAR OUTLOOK METRIC TARGET(1) Unit Volume Increase in mid-single digits Net Sales Approaching high-single digit growth Gross Margin % Modest increase Acquisition, Integration and Engine Expense ~$6 million Adjusted EBITDA Margin Modest increase Capital Expenditures About $15 million 1.
Slide 80: Long-Term Financial Targets
80 LONG-TERM FINANCIAL TARGETS METRIC TARGET Annual Net Sales Growth ~10% Adjusted EBITDA Margin % >20% Long-term EPS Annual Growth >15% MALIBU BOATS INC. THREE ICONIC BRANDS, ONE GREAT COMPANY
Slide 81: Closing Comments
CLOSING COMMENTS MALIBU BOATS INC. THREE ICONIC BRANDS, ONE GREAT COMPANY
Slide 82: Key Takeaways from Today
82 KEY TAKEAWAYS FROM TODAY DYNAMIC OPERATIONAL EXCELLENCE WORLD CLASS PRODUCT DEVELOPMENT SOUND, STRATEGIC ACQUISITIONS OF PREMIUM BRANDS MARKET LEADER AND GROWING IN MULTIPLE SEGMENTS UNMATCHED INVESTMENT OPPORTUNITY MALIBU BOATS INC. THREE ICONIC BRANDS, ONE GREAT COMPANY
Slide 83: Q&A
Q&A MALIBU BOATS INC. THREE ICONIC BRANDS, ONE GREAT COMPANY
Slide 84: Appendix
84 APPENDIX
Slide 85: Reconciliation of Net Income to Adjusted EBITDA and Free Cash Flow
85 RECONCILIATION OF NET INCOME (LOSS) TO NON-GAAP ADJUSTED EBITDA, ADJUSTED EBITDA MARGIN AND FREE CASH FLOW The following table sets forth a reconciliation of net income as determined in accordance with GAAP to Adjusted EBITDA, Adjusted EBITDA Margin and Free Cash Flow for the periods indicated (d
Slide 86: Reconciliation of Net Income to Adjusted EBITDA (Footnotes)
86 RECONCILIATION OF NET INCOME (LOSS) TO NON-GAAP ADJUSTED EBITDA, ADJUSTED EBITDA MARGIN AND FREE CASH FLOW 1. Provision for income taxes for fiscal year 2018 reflects the impact of the Tax Act adopted in December 2017, which among other items, lowered the U.S. corporate income tax rate from 35% t
Slide 87: Reconciliation to Adjusted Fully Distributed Net Income
87 RECONCILIATION OF NET INCOME ATTRIBUTABLE TO CLASS A COMMON STOCK TO ADJUSTED FULLY DISTRIBUTED NET INCOME OF CLASS A COMMON STOCK (UNAUDITED): The following table sets forth a reconciliation of net income attributable to Malibu Boats, Inc. to Adjusted Fully Distributed Net Income for the periods
Slide 88: Reconciliation to Adjusted Fully Distributed Net Income (Footnotes)
88 RECONCILIATION OF NET INCOME ATTRIBUTABLE TO CLASS A COMMON STOCK TO ADJUSTED FULLY DISTRIBUTED NET INCOME OF CLASS A COMMON STOCK (UNAUDITED): 1. Provision for income taxes for fiscal year 2018 reflects the impact of the Tax Act adopted in December 2017, which among other items, lowered the U.S.
Slide 89: Reconciliation of Denominator for Net Income per Share
89 RECONCILIATION OF DENOMINATOR FOR NET INCOME ATTRIBUTABLE TO CLASS A COMMON STOCK PER SHARE TO ADJUSTED FULLY DISTRIBUTED NET INCOME PER SHARE OF CLASS A COMMON STOCK (UNAUDITED): The following table sets forth a reconciliation of denominator for net income attributable to Class A Common Stock pe
Slide 90: Reconciliation of Denominator (Footnotes)
90 RECONCILIATION OF DENOMINATOR FOR NET INCOME ATTRIBUTABLE TO CLASS A COMMON STOCK PER SHARE TO ADJUSTED FULLY DISTRIBUTED NET INCOME PER SHARE OF CLASS A COMMON STOCK (UNAUDITED): 1. Represents the weighted average shares outstanding of LLC Units held by non-controlling interests assuming they we
Slide 91: Reconciliation of Net Income per Share to AFDNI per Share
91 RECONCILIATION OF NET INCOME ATTRIBUTABLE TO CLASS A COMMON STOCK PER SHARE TO ADJUSTED FULLY DISTRIBUTED NET INCOME PER SHARE OF CLASS A COMMON STOCK (UNAUDITED): The following table sets forth a reconciliation of net income attributable per share to Malibu Boats, Inc. to Adjusted Fully Distribu
Slide 92: Reconciliation of Net Income per Share (Footnotes)
92 RECONCILIATION OF NET INCOME ATTRIBUTABLE TO CLASS A COMMON STOCK PER SHARE TO ADJUSTED FULLY DISTRIBUTED NET INCOME PER SHARE OF CLASS A COMMON STOCK (UNAUDITED): 1. Provision for income taxes for fiscal year 2018 reflects the impact of the Tax Act adopted in December 2017, which among other ite