Malibu Boats Q4 Earnings Call Highlights

Key Points

• Fourth-quarter performance improved sharply: Sales rose 42.7% to $295.5 million and adjusted EBITDA increased 72.7% to $33.9 million, supported by the Saxdor acquisition and stronger legacy operations. Saxdor contributed $61.2 million of revenue, while legacy sales increased 13.2%.
• Full-year profitability was pressured by Saxdor integration costs: Fiscal 2026 sales grew 13.3% to $914.6 million, but adjusted EBITDA fell 1.1% to $73.9 million and GAAP net income dropped 88.8% to $1.7 million. The company generated approximately $43.2 million in free cash flow.
• Management expects growth in fiscal 2027 but remains cautious: Malibu forecast sales of $1.08 billion to $1.12 billion and adjusted EBITDA of $101 million to $109 million, with Saxdor expected to reach about $180 million in full-year revenue. The outlook assumes a flat-to-down marine market, while the company benefits from healthier dealer inventories, a refinanced credit facility and a new $70 million share-repurchase authorization.

Malibu Boats NASDAQ: MBUU reported higher fourth-quarter sales and adjusted EBITDA for fiscal 2026, aided by contributions from its Saxdor Yachts acquisition and improved performance in its legacy operations. Management said the company entered fiscal 2027 with healthier dealer inventories, a refinanced credit facility and a new $70 million share-repurchase authorization, while maintaining a cautious view of retail demand.

Fourth-quarter net sales rose 42.7% from a year earlier to $295.5 million, while adjusted EBITDA increased 72.7% to $33.9 million. Adjusted EBITDA margin expanded to 11.5% from 9.5%, and gross margin increased 190 basis points to 17.7%.

“Our fourth quarter marked a strong finish to fiscal 2026 and demonstrated the power of our strategic execution,” President and CEO Steve Menneto said. He attributed the results to the company’s MBI Advantage operating framework, including operational improvements, centralized sourcing and channel discipline.

Fourth-Quarter Results Include Saxdor Contribution

Saxdor, acquired on March 2, contributed $61.2 million of fourth-quarter revenue, exceeding Malibu Boats’ prior forecast of $57 million to $59 million. On a legacy basis, excluding Saxdor, quarterly sales were $234.3 million, up about 13.2% from the prior-year period.

Total unit volume increased 19.2% to 1,456 boats. Legacy unit volume rose about 4.5% to 1,276 units, while Saxdor added 180 units. Net sales per unit increased 19.7% to $203,000 on a consolidated basis, reflecting favorable model mix, Saxdor’s addition and pricing gains. Legacy net sales per unit rose about 8.3% to roughly $184,000. Saxdor generated net sales per unit of $340,000 during the quarter.

• Malibu segment sales increased 3.2% to $82.9 million.
• Saltwater Fishing sales increased 11.1% to $80.9 million, supported by higher wholesale shipments and firmer dealer inventory in certain parts of the portfolio.
• Cobalt sales rose 31% to $70.5 million, also supported by higher wholesale shipments and dealer inventory trends.

Chief Financial Officer David Black said quarterly margin improvement was split roughly evenly between volume leverage and the benefits of centralized sourcing flowing through inventory costs.

Gross profit increased 59.4% to $52.2 million. GAAP net income rose 53.7% to $7.4 million, or $0.37 per diluted share. Adjusted net income per share was $0.90, up 114.3% from the prior-year period.

Saxdor’s adjusted EBITDA margin was below Malibu Boats’ previously forecast 10% to 11% range in the quarter. Black said the company added resources ahead of expected higher volumes and accelerated the domestic manufacturing ramp at its Fort Pierce, Florida, facility. Saxdor also faced higher input costs. Management characterized the manufacturing-related spending as an investment expected to support future production.

Fiscal 2026 Sales Rise, While Annual Profitability Reflects Acquisition Costs

For fiscal 2026, Malibu Boats reported net sales of $914.6 million, up 13.3% and about $29 million above the high end of guidance that had been raised in May. Saxdor contributed $84.3 million in sales since the acquisition closed. Legacy sales were $830.3 million, an increase of about 2.8%.

Annual unit volume increased 0.9% to 4,944 units, as 246 Saxdor units more than offset a 4.1% decline in legacy volume to approximately 4,698 units.

Full-year gross margin declined 180 basis points to 16%, primarily due to higher material and labor costs per unit. Adjusted EBITDA declined 1.1% to $73.9 million, while adjusted EBITDA margin decreased to 8.1% from 9.3%.

GAAP net income fell 88.8% to $1.7 million, or $0.09 per diluted share, primarily because of acquisition- and integration-related expenses tied to Saxdor. Adjusted net income per share was $1.52.

The company generated $67.5 million of operating cash flow during the year and spent $24.7 million on capital expenditures, producing approximately $43.2 million in free cash flow.

Balance Sheet, Capital Returns and Manufacturing Plans

Malibu Boats ended fiscal 2026 with $74.4 million in cash and $165 million of long-term debt. Net leverage was approximately 1.2 times, or near 1 time on a pro forma basis, according to Black.

After year-end, the company refinanced its credit facility, extending its maturity to July 2031. The new structure includes a $100 million term loan and a $250 million revolving credit facility, replacing the prior $350 million revolver. The agreement also adds multi-currency capabilities intended to support Saxdor’s European operations.

During fiscal 2026, Malibu Boats repurchased approximately 1.24 million shares for about $33.9 million, at an average price of $27.34 per share. Its board authorized a new $70 million repurchase program in June for fiscal 2027.

Management said it plans to continue investing in the business, pay down debt using free cash flow and remain opportunistic about repurchases and disciplined acquisitions.

The first U.S.-built Saxdor boat remains scheduled for completion at Fort Pierce later in the first half of fiscal 2027. Black said the facility could produce more than 200 Saxdor units without additional capital expenditures, though actual output will depend in part on product mix. Menneto said the company is currently producing pilot boats and has not made major changes to Saxdor’s existing manufacturing operations in Poland and Larsmo, Finland.

Fiscal 2027 Outlook

For fiscal 2027, Malibu Boats forecast net sales of $1.08 billion to $1.12 billion and adjusted EBITDA of $101 million to $109 million. The outlook includes a full year of Saxdor ownership and assumes low- to mid-single-digit growth in the legacy brands and mid-teens growth at Saxdor.

Black said the company expects Saxdor to generate about $180 million in revenue on a full-year pro forma basis and to progress toward a 10% to 11% adjusted EBITDA margin as domestic manufacturing scales. He said Saxdor’s margins are expected to be lower in the first half because of investment and ramp costs, then improve in the second half.

For the first quarter of fiscal 2027, Malibu Boats expects sales of $255 million to $265 million and adjusted EBITDA of $14 million to $16 million.

Management expects the broader marine market to be flat to down during fiscal 2027, with a softer first half and conditions approaching flat later in the year. The company’s guidance incorporates low- to mid-single-digit input-cost inflation and tariff costs at currently enacted rates, along with pricing already in the market.

Menneto said industry registrations declined roughly 3% from April through June, improving from a mid-single-digit decline in the March quarter. He said Malibu Boats’ dealer inventories declined during the year and that the portfolio’s aged inventory is in one of its healthiest positions in some time.

The company also said adoption of its MBI Acceptance financing and extended-service program has continued to build. Menneto said roughly one-third to 40% of the dealer base has been signed onto the program, with uptake concentrated among dealers carrying lower-priced brands.

About Malibu Boats (NASDAQ:MBUU)

Malibu Boats, Inc is a leading designer, manufacturer and distributor of performance sport boats for the recreational boating market. The company's product portfolio includes the premium Malibu® brand and the value-oriented Axis® Wake Research line, as well as Cobalt® boats following its 2020 acquisition. Malibu's vessels are engineered to serve water-sports enthusiasts, with models optimized for wakeboarding, wakesurfing and waterskiing.

Founded in 1982 by water-sports enthusiast Jack Springer, Malibu Boats is headquartered in Loudon, Tennessee.

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