Malibu Boats Inc.

11/05/2026 | Press release | Distributed by Public on 11/05/2026 08:09

Quarterly Report for Quarter Ending September 30, 2026 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis should be read in conjunction with the unaudited interim condensed consolidated financial statements and notes thereto included herein.
Malibu Boats, Inc. is a Delaware corporation with its principal offices in Loudon, Tennessee. We use the terms "Malibu," the "Company," "we," "us," "our" or similar references to refer to Malibu Boats, Inc., its subsidiary, Malibu Boats Holdings, LLC, or the LLC, and its subsidiary Malibu Boats, LLC, or Boats, LLC and its consolidated subsidiaries, including Cobalt Boats, LLC, PB Holdco, LLC, through which we acquired the assets of Pursuit, MBG Holdco, Inc., through which we acquired all of the outstanding stock of Maverick Boat Group, Inc., and Saxdor Yachts Oy ("Saxdor").
Overview
We are a leading designer, manufacturer and marketer of a diverse range of recreational powerboats, including performance sport boats, sterndrive, outboard boats, and premium adventure dayboats. Our product portfolio of premium brands is used for a broad range of recreational boating activities including, among others, water sports, such as water skiing, wakeboarding and wake surfing, as well as general recreational boating and fishing. Our passion for consistent innovation, which has led to proprietary technology such as Surf Gate, has allowed us to expand the market for our products by introducing consumers to new and exciting recreational activities. We design products that appeal to an expanding range of recreational boaters and water sports enthusiasts whose passion for boating and water sports is a key aspect of their lifestyle and provide consumers with a better customer-inspired experience. With performance, quality, value and multi-purpose features, our product portfolio has us well positioned to broaden our addressable market and achieve our goal of increasing our market share in the recreational boating industry.
We currently sell our boats under nine brands as shown in the table below, and we report our results of operations under four reportable segments, Malibu, Saltwater Fishing, Cobalt, and Saxdor. We acquired Saxdor in March 2026. Saxdor is a leading European designer and manufacturer of premium adventure dayboats. In connection with our acquisition of Saxdor we revised our segment reporting during the quarter ended March 31, 2026 to report our results of operations under the following four reportable segments.
% of Net Sales
Segment Brands Three Months Ended September 30, 2026
Fiscal year ended June 30, 2026
Malibu Malibu 28.3% 34.2%
Axis
Saltwater Fishing Pursuit 27.2% 31.1%
Maverick
Cobia
Pathfinder
Hewes
Cobalt Cobalt 24.3% 25.5%
Saxdor Saxdor 20.2% 9.2%
Our Malibu segment participates in the manufacturing, distribution, marketing and sale throughout the world of Malibu and Axis performance sports boats. Our flagship Malibu boats offer our latest innovations in performance, comfort and convenience, and are designed for consumers seeking a premium performance sport boat experience. As of September 30, 2026, we are among the market leaders in the United States in the performance sport boat category through our Malibu and Axis brands. Our Axis boats appeal to consumers who desire a more affordable performance sport boat product but still demand high performance, functional simplicity and the option to upgrade key features. Retail prices of our Malibu and Axis boats typically range from $80,000 to $300,000.
Our Saltwater Fishing segment participates in the manufacturing, distribution, marketing and sale throughout the world of Pursuit boats and the Maverick Boat Group family of boats (Maverick, Cobia, Pathfinder and Hewes). Our Pursuit boats include center console, dual console and offshore models. Our Maverick Boat Group family of boats are highly complementary to Pursuit, expanding our saltwater outboard offerings with a strong focus in length segments under 30 feet. We are among the market leaders in the fiberglass outboard fishing boat category with the brands in our Saltwater Fishing segment. Retail prices for our Saltwater Fishing boats typically range from $45,000 to $1,400,000.
Our Cobalt segment participates in the manufacturing, distribution, marketing and sale throughout the world of Cobalt boats. Our Cobalt boats consist of mid to large-sized luxury cruisers and bowriders that we believe offer the ultimate experience in comfort, performance and quality. As of September 30, 2026, we are among the market leaders in the United States in the 20' - 40' segment of the sterndrive boat category through our Cobalt brand. Retail prices for our Cobalt boats typically range from $75,000 to $625,000.
Our Saxdor segment participates in the manufacturing, distribution, marketing and sale throughout the world of Saxdor boats. Our Saxdor boats expand our product offerings into the premium adventure dayboat market, including boats with lengths over 40 feet. Through our acquisition of Saxdor, we have expanded our international footprint to 68 countries. Retail prices for our Saxdor boats typically range from $120,000 to $865,000.
We sell our boats through a dealer network that we believe is among the strongest in the recreational powerboat industry. As of June 30, 2026, our distribution channel consisted of over 345 dealer locations globally. Our dealer base is an important part of our consumers' experience, our marketing efforts and our brands. We devote significant time and resources to find, develop and improve the performance of our dealers and believe our dealer network gives us a distinct competitive advantage. We had one dealer that represented more than 10% of our consolidated net sales in fiscal year ended June 30, 2026 and the three months ended September 30, 2026, OneWater Marine, Inc.
On a consolidated basis, we achieved net sales, gross profit, net income (loss) and adjusted EBITDA of $252.9 million, $37.8 million, $6.1 million and $14.3 million, respectively, for the three months ended September 30, 2026 compared to $194.7 million, $27.9 million, $(0.7) million and $11.8 million, respectively, for the three months ended September 30, 2025. For the three months ended September 30, 2026, net sales increased 29.9%, gross profit increased 35.5%, net income increased 960.0% and adjusted EBITDA increased 21.7% as compared to the three months ended September 30, 2025. For the definition of adjusted EBITDA and a reconciliation to net income (loss), see "GAAP Reconciliation of Non-GAAP Financial Measures."
Outlook
The recreational power boat industry continues to be challenged by macro-economic factors, including inflation and increasing interest rates, that have increased the cost of production and taken many interest rate sensitive buyers out of the market. In the past year, additional tariffs have also been introduced, or proposed, as discussed below, and we are monitoring the impact they may have on cost of production, pricing and demand. Simultaneously, less price sensitive buyers have continued purchasing larger, more feature-rich boats with higher average selling prices.
We have maintained a disciplined approach to wholesale shipments, and we continue to expect a modest further reduction in dealer inventories during the three months ending December 31, 2026 and into 2027. We expect retail demand to remain soft during the three months ending December 31, 2026 and into 2027 amid continued macroeconomic uncertainty, and we expect promotional activity and dealer incentive costs, including floor plan interest support, to remain elevated relative to historical levels.
We aim to increase our market share across the boating categories in which we compete through new product development, improved distribution, new models, and innovative features. We believe our strong brands, new product pipeline, strong dealer network and ability to increase production will allow us to maintain, and potentially expand, our leading market positions. We continue to integrate Saxdor, our newest acquisition, into the business, and expected synergies have the potential to be realized over the coming years. We believe enhancing manufacturing capabilities combined with diligent management of dealer networks will position Saxdor for continued growth.
Our financial results and operations have been, and will continue to be, impacted by events outside of our control. These include trade policies and tariffs, inflationary pressures, interest rates, fuel prices, material shortages, weather events, foreign currency fluctuations, geopolitical developments and global economic uncertainty. The current international trade and regulatory environment remain subject to significant ongoing uncertainty. Beginning in calendar year 2025, the U.S. presidential administration has imposed substantial new tariffs affecting a wide range of products and jurisdictions. The legal authorities, rates and scope of these tariffs have continued to change during calendar year 2026. In response, some countries have implemented, and other countries may implement, countermeasures to U.S. tariffs. We estimate that 18-20% of our cost of sales for our brands located in the U.S. are sourced from outside the United States. In addition, we manufacture Saxdor boats in Finland and Poland, and a portion of those boats are imported into the United States and are subject to applicable U.S. tariffs on European-origin goods. As a result, we have the potential to be materially impacted by tariffs in future periods. We are continuing to monitor the potential long-term impact of tariffs and are taking a proactive approach to mitigating material supply chain risks. Assuming current tariff rates, we continue to expect to incur material costs through the three months ending December 31, 2026 and into 2027 from new tariff exposure of approximately 1.5% to 3% of cost of sales, including Saxdor boats shipped to the U.S. We expect to largely offset these added costs through recent price increases.
For the three months ending December 31, 2026 and into 2027, we expect to continue to experience reduced retail consumer demand for our products and a competitive promotional environment. However, we will maintain our disciplined approach to dealer health and leverage our strong balance sheet and cash generation to continue investing in the business.
In July 2026, we entered into an amended and restated credit agreement providing a $250 million revolving credit facility and a $100 million term loan maturing in 2031, which, together with our $70 million share repurchase capacity through June 30, 2027, provides flexibility to continue investing in growth while returning capital to shareholders.
Factors Affecting Our Results of Operations
We believe that our results of operations and our growth prospects are affected by a number of factors, such as the economic environment and consumer demand for our products, our ability to develop new products and innovate, our product mix, our ability to manage manufacturing costs, sales cycles and inventory levels, the strength of our dealer network, our ability to offer dealer financing and incentives and our vertical integration efforts and our ability to successfully integrate the operations of Saxdor. We discuss each of these factors in more detail under the heading "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations--Factors Affecting Our Results of Operations" in our Form 10-K for the year ended June 30, 2026. While we do not have control of all factors affecting our results from operations, we work diligently to influence and manage those factors which we can impact to enhance our results of operations.
Components of Results of Operations
Net Sales
We generate revenue from the sale of boats to our dealers. The substantial majority of our net sales are derived from the sale of boats, including optional features included at the time of the initial wholesale purchase of the boat. Net sales consists of the following:
•Gross sales from:
•Boat and trailer sales-consists of sales of boats and trailers to our dealer network. Nearly all of our boat sales include optional feature upgrades purchased by the consumer, which increase the average selling price of our boats; and
•Parts and other sales-consists of sales of replacement and aftermarket boat parts and accessories to our dealer network; and consists of royalty income earned from license agreements with various boat manufacturers, including Nautique, Chaparral, MasterCraft, and Tige related to the use of our intellectual property.
•Net sales are net of:
•Sales returns-consists primarily of contractual repurchases of boats either repossessed by the floor plan financing provider from the dealer or returned by the dealer under our warranty program; and
•Discounts, rebates and free flooring-consists of discounts, rebates and free flooring, we provide to our dealers based on sales of eligible products. For our Malibu, Cobalt and Saltwater Fishing segments, if a domestic dealer meets its quarterly commitment volume, as well as other terms of the dealer performance program, the dealer is entitled to a specified discount off invoice for eligible wholesale volume purchased during the period. For our Saxdor segment, discounts are provided to all dealers under a profitability-based model. If a dealer, for any of our brands, meets its quarterly, semi-annual, or annual retail volume goals, the dealer is entitled to a specific rebate applied to their wholesale volume purchased. For Malibu, Cobalt and select Saltwater Fishing models, our dealers that take delivery of current model year boats may also be entitled to have us pay the interest to floor the boat for a period of time, which incentive we refer to as "free flooring." From time to time, we may extend the flooring program to eligible models beyond the off season period.
Cost of Sales
Our cost of sales includes all of the costs to manufacture our products, including raw materials, components, supplies, direct labor and factory overhead. For components and accessories manufactured by third-party vendors, such costs represent the amounts invoiced by the vendors. Shipping costs and depreciation expense related to manufacturing equipment and facilities are also included in cost of sales. Warranty costs associated with the repair or replacement of our boats under warranty are also included in cost of sales.
Operating Expenses
Our operating expenses include selling and marketing, general and administrative costs, amortization costs and impairment costs. Each of these items includes personnel and related expenses, supplies, non-manufacturing overhead, third-party professional fees and various other operating expenses. Further, selling and marketing expenditures include the cost of advertising and various promotional sales incentive programs. General and administrative expenses include, among other things, salaries, benefits and other personnel related expenses for employees engaged in product development, engineering, finance, information technology, human resources and executive management. Other costs include outside legal and accounting fees, investor relations, risk management (insurance) and other administrative costs. General and administrative expenses also include product development expenses associated with our vertical integration initiative and acquisition or integration related expenses. Amortization expenses are associated with the amortization of intangibles.
Other Expense (Income), Net
Other expense (income), net, consists of interest expense and other income or expense, net. Interest expense consists of interest charged under our outstanding debt and amortization of deferred financing costs on our credit facilities. Other income
or expense can include adjustments to our tax receivable agreement liability and changes to the fair value of the contingent earnout liability as well as foreign currency gain/loss on the contingent earnout liability.
Income Taxes
Malibu Boats, Inc. is subject to U.S. federal and state income tax in multiple jurisdictions with respect to our allocable share of any net taxable income of the LLC. The LLC is a pass-through entity for federal purposes but incurs income tax in certain state jurisdictions. Maverick Boat Group is separately subject to U.S. federal and state income tax with respect to its net taxable income. Saxdor files income tax returns in Finland and Poland.
Net Income (Loss) Attributable to Non-controlling Interest
As of September 30, 2026 and 2025, we had a 98.6% controlling economic interest and 100% voting interest in the LLC and, therefore, we consolidate the LLC's operating results for financial statement purposes. Net income (loss) attributable to non-controlling interest represents the portion of net income (loss) attributable to the non-controlling LLC members.
Results of Operations
The table below sets forth our unaudited interim consolidated results of operations, expressed in thousands (except unit volume and net sales per unit) and as a percentage of net sales, for the periods presented. Our unaudited interim consolidated financial results for these periods are not necessarily indicative of the consolidated financial results that we will achieve in future periods. Certain totals for the table below will not sum to exactly 100% due to rounding.
Three Months Ended September 30,
2026 2025
$ % Revenue $ % Revenue
Net sales 252,941 100.0 % 194,733 100.0 %
Cost of sales 215,105 85.0 % 166,802 85.7 %
Gross profit 37,836 15.0 % 27,931 14.3 %
Operating expenses:
Selling and marketing 8,333 3.3 % 6,293 3.2 %
General and administrative 11,646 4.6 % 20,767 10.7 %
Amortization 4,707 1.9 % 1,713 0.9 %
Operating income (loss)
13,150 5.2 % (842) (0.4) %
Other expense (income), net:
Other expense (income), net
2,748 1.1 % (866) (0.4) %
Interest expense 2,087 0.8 % 423 0.2 %
Other expense (income), net
4,835 1.9 % (443) (0.2) %
Income (loss) before provision for income taxes
8,315 3.3 % (399) (0.2) %
Provision for income taxes
2,209 0.9 % 311 0.2 %
Net income (loss)
6,106 2.4 % (710) (0.4) %
Net income (loss) attributable to non-controlling interest
108 - % (8) - %
Net income (loss) attributable to Malibu Boats, Inc.
5,998 2.4 % (702) (0.4) %
Three Months Ended September 30,
2026 2025
Unit Volumes % Total Unit Volumes % Total
Volume by Segment
Malibu 505 38.9 % 538 47.7 %
Saltwater Fishing 310 23.8 % 288 25.5 %
Cobalt 345 26.6 % 303 26.8 %
Saxdor 139 10.7 % - - %
Total units 1,299 100.0 % 1,129 100.0 %
Net sales per unit $ 194,720 $ 172,483
Comparison of the Three Months Ended September 30, 2026 to the Three Months Ended September 30, 2025
Net Sales
Net sales for the three months ended September 30, 2026 increased $58.2 million, or 29.9%, to $252.9 million as compared to the three months ended September 30, 2025. The increase in net sales was driven primarily by $51.1 million of revenue from the new Saxdor segment due to the recent acquisition, increased unit volumes in the Cobalt and Saltwater Fishing segments, a favorable model mix in our Cobalt segment, a favorable segment mix and year-over-year price increases, partially offset by decreased unit volumes in the Malibu segment and increased dealer incentive costs in the Malibu and Saltwater Fishing segments. Unit volume for the three months ended September 30, 2026, increased 170 units, or 15.1%, to 1,299 units as compared to the three months ended September 30, 2025. Our unit volume increased due to an additional 139 units contributed by Saxdor and higher wholesale shipments across the Cobalt and Saltwater Fishing segments compared to the prior period as explained above, partially offset by lower wholesale shipments in the Malibu segment.
Net sales attributable to our Malibu segment decreased $7.2 million, or 9.1%, to $71.5 million for the three months ended September 30, 2026, compared to the three months ended September 30, 2025. Unit volumes attributable to our Malibu segment decreased 33 units for the three months ended September 30, 2026, compared to the three months ended September 30, 2025, primarily due to lower wholesale shipments driven by lower retail activity during the period. The decrease in net sales was driven by a decrease in units and increased dealer incentive costs, partially offset by year-over-year price increases.
Net sales attributable to our Saltwater Fishing segment increased $4.5 million, or 7.1%, to $68.9 million, for the three months ended September 30, 2026, compared to the three months ended September 30, 2025. Unit volumes attributable to our Saltwater Fishing segment increased 22 units for the three months ended September 30, 2026 compared to the three months ended September 30, 2025, primarily due to lower wholesale shipments during the three months ended September 30, 2025, as a result of elevated dealer inventory levels. The increase in net sales was driven by an increase in units and year-over-year price increases, partially offset by increased dealer incentive costs.
Net sales attributable to our Cobalt segment increased $9.8 million, or 18.8%, to $61.5 million for the three months ended September 30, 2026, compared to the three months ended September 30, 2025. Unit volumes attributable to Cobalt increased 42 units for the three months ended September 30, 2026 compared to the three months ended September 30, 2025, primarily due to lower wholesale shipments during the three months ended September 30, 2025, as a result of elevated dealer inventory levels. The increase in net sales was driven primarily by an increase in units, a favorable model mix and year-over-year price increases.
Net sales and unit volume attributable to our Saxdor segment were $51.1 million and 139 units, respectively, for the three months ended September 30, 2026.
Overall consolidated net sales per unit increased 12.9% to $194,720 per unit for the three months ended September 30, 2026, compared to the three months ended September 30, 2025. The increase in overall consolidated net sales per unit was driven primarily by an incremental increase related to our new Saxdor segment, a favorable segment mix and year-over-year price increases. Net sales per unit for our Malibu segment decreased 3.2% to $141,503 per unit for the three months ended September 30, 2026, compared to the three months ended September 30, 2025, driven by increased dealer incentive costs per unit, partially offset by year-over-year price increases. Net sales per unit for our Saltwater Fishing segment decreased 0.5% to $222,110 per unit for the three months ended September 30, 2026, compared to the three months ended September 30, 2025, driven by increased dealer incentive costs per unit, partially offset by year-over-year price increases. Net sales per unit for our Cobalt segment increased 4.4% to $178,316 per unit for the three months ended September 30, 2026, compared to the three months ended September 30, 2025, driven by a favorable model mix and year-over-year price increases. Net sales per unit for our Saxdor segment were $367,691 per unit.
Cost of Sales
Cost of sales for the three months ended September 30, 2026 increased $48.3 million, or 29.0%, to $215.1 million as compared to the three months ended September 30, 2025. The increase in cost of sales was primarily driven by a 15.1% increase in unit volumes, including the additional units from the Saxdor segment due to the recent acquisition.
Gross profit for the three months ended September 30, 2026 increased $9.9 million, or 35.5%, to $37.8 million compared to the three months ended September 30, 2025. The increase in gross profit was driven primarily by increased net sales, partially offset by increased cost of sales for the reasons noted above. Gross margin for the three months ended September 30, 2026 increased 70 basis points from 14.3% to 15.0% driven primarily by the gross margin of newly acquired Saxdor.
Operating Expenses
Selling and marketing expenses for the three months ended September 30, 2026 increased $2.0 million, or 32.4%, to $8.3 million compared to the three months ended September 30, 2025. The increase was driven primarily by higher personnel-related expenses and an incremental increase due to the new Saxdor segment. As a percentage of sales, selling and marketing expenses increased 10 basis points to 3.3% for the three months ended September 30, 2026 compared to 3.2% for the three months ended September 30, 2025. General and administrative expenses for the three months ended September 30, 2026 decreased $9.1 million, or 43.9%, to $11.6 million as compared to the three months ended September 30, 2025, driven primarily by a $15.0 million reduction resulting from the derecognition of a liability related to insurance proceeds previously received from Starr Indemnity & Liability Company that are no longer subject to a reservation of rights, as well as decreases in incentive pay, partially offset by acquisition related expenses incurred due to the Saxdor acquisition and an incremental increase due to the new Saxdor segment. As a percentage of sales, general and administrative expenses decreased 610 basis points to 4.6% for the three months ended September 30, 2026 compared to 10.7% for the three months ended September 30, 2025. Amortization expense increased $3.0 million to $4.7 million for the three months ended September 30, 2026 due to the additional intangibles acquired from the Saxdor acquisition.
Other Expense (Income), Net
Other expense (income), net, increased $5.3 million for the three months ended September 30, 2026 compared to the three months ended September 30, 2025, due to increased interest expense of $1.7 million from borrowings related to the Saxdor acquisition, as well as an increase in the fair value of the contingent earnout liability.
Provision for income taxes
Our provision for income taxes for the three months ended September 30, 2026, increased $1.9 million, or 610.3%, to $2.2 million compared to the three months ended September 30, 2025. The increase primarily resulted from increased pre-tax income. For the three months ended September 30, 2026 and 2025, our effective tax rate was 26.6% and (77.9)%, respectively. For the three months ended September 30, 2026, our effective tax rate was increased by foreign taxes paid and U.S. state taxes. For the three months ended September 30, 2025, our effective tax rate was reduced by deferred tax impacts of pre-tax losses and U.S. state taxes.
Non-controlling Interest
Non-controlling interest represents the ownership interests of the members of the LLC other than us and the amount recorded as non-controlling interest in our unaudited interim condensed consolidated statements of operations and comprehensive income (loss) is computed by multiplying pre-tax income (loss) for the applicable period by the percentage ownership in the LLC not directly attributable to us. For the three months ended September 30, 2026 and 2025, the weighted-average non-controlling interest attributable to ownership interests in the LLC not directly attributable to us was 1.4%.
GAAP Reconciliation of Non-GAAP Financial Measures
Adjusted EBITDA
Adjusted EBITDA and adjusted EBITDA margin are non-GAAP financial measures that are used by management as well as by investors, commercial bankers, industry analysts and other users of our financial statements.
We define adjusted EBITDA as net income (loss) before interest expense, income taxes, depreciation, amortization, and non-cash, non-operating expenses or other expenses that we do not believe are indicative of our ongoing expenses, including acquisition and integration related expenses, adjustment to earnout liability, certain professional fees, non-cash compensation expense 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 (loss) as determined by GAAP. Management believes adjusted EBITDA and adjusted EBITDA margin allow investors to evaluate the Company's 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 our 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 (loss) 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. Adjusted EBITDA has limitations as an analytical tool and should not be considered as an alternative to, or more meaningful than, net income (loss) as determined in accordance with GAAP or as an indicator of our liquidity. 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. Our presentation of adjusted EBITDA and adjusted EBITDA margin should not be construed as an inference that our results will be unaffected by unusual or non-recurring items. Our computations of adjusted EBITDA and adjusted EBITDA margin may not be comparable to other similarly titled measures of other companies.
The following table sets forth a reconciliation of net income (loss) as determined in accordance with GAAP to adjusted EBITDA and presentation of net income (loss) margin and adjusted EBITDA margin for the periods indicated (dollars in thousands):
Three Months Ended September 30,
2026 2025
Net income (loss)
$ 6,106 $ (710)
Provision for income taxes
2,209 311
Interest expense 2,087 423
Depreciation 8,214 8,138
Amortization 4,707 1,713
Acquisition and integration related expenses 1
2,836 -
Adjustment to earnout liability 2
1,088 -
Professional fees 3
(14,242) 1,178
Stock-based compensation expense 4
1,340 1,587
Adjustments to tax receivable agreement liability 5
- (856)
Adjusted EBITDA $ 14,345 $ 11,784
Net Sales $ 252,941 $ 194,733
Net Income (Loss) Margin 6
2.4 % (0.4) %
Adjusted EBITDA Margin 6
5.7 % 6.1 %
(1) Represents legal and advisory fees as well as integration costs incurred in connection with our acquisition of Saxdor on March 2, 2026.
(2)
Represents the change in the contingent consideration (earnout) liability recognized in connection with the acquisition of Saxdor on March 2, 2026. See Note 4 - Acquisition for additional information.
(3)
For the three months ended September 30, 2026 and 2025, represents legal and advisory fees, netted with insurance payments, related to ongoing litigation with our insurance carriers related to the Batchelder matters and ongoing litigation with Tommy's Boats and Matthew Borisch. For the three months ended September 30, 2026, the amount is also net of a $15.0 million reduction of general and administrative expense from insurance proceeds received in July 2023 from Starr that are no longer subject to a reservation of rights. See Note 9 - Accrued Expenses for additional information.
(4) Represents equity-based incentives awarded to employees under our long-term incentive plans.
(5)
For the three months ended September 30, 2025, we recognized other income from an adjustment in our tax receivable agreement liability mainly due to decreased blended federal and state tax rates used as a result of tax reform changes in H.R. 1, commonly referred to as the One Big Beautiful Bill Act, and in turn, a decrease in the future benefit we expect to pay under our tax receivable agreement with pre-IPO owners.
(6)
We calculate net income (loss) margin as net income (loss) divided by net sales, and we define adjusted EBITDA margin as adjusted EBITDA divided by net sales.
Adjusted Net Income Per Share
Adjusted net income per share is a non-GAAP financial measure that is used and disclosed by management in order to give management and its investors and analysts a more accurate picture of our underlying earnings performance. Adjusted net income per share excludes items that management does not believe are indicative of our core operating performance.
We define adjusted net income per share as net income (loss) attributable to Malibu Boats, Inc. per share, excluding provision for income taxes, and non-cash, non-operating expenses, or other expenses that we do not believe are indicative of our ongoing expenses, including acquisition related amortization, acquisition and integration related expenses, adjustment to earnout liability, certain professional fees and non-cash compensation expense, and reflecting an adjustment for income tax expense on adjusted income before income taxes at our estimated effective income tax rate.
We exclude the items listed above from net income (loss) per share in arriving at adjusted net income per share because these amounts can vary substantially from company to company within our industry depending upon accounting methods and book values of assets, the methods by which assets were acquired and other factors. Adjusted net income per share has limitations as an analytical tool and should not be considered as an alternative to, or more meaningful than, net income (loss) per share as determined in accordance with GAAP or as an indicator of our liquidity. Certain items excluded are significant components in understanding and assessing a company's financial performance. Our presentation of adjusted net income per share should not be construed as an inference that our results will be unaffected by unusual or non-recurring items. Our computation of this measure may not be comparable to other similarly titled measures of other companies.
The following table sets forth a reconciliation of net income (loss) per share attributable to Malibu Boats, Inc. as determined in accordance with GAAP to adjusted net income per share for the periods indicated (dollars in thousands):
Three Months Ended September 30,
2026 2025
Net income (loss) attributable to Malibu Boats, Inc.
$ 5,998 $ (702)
Provision for income taxes
2,209 311
Acquisition related amortization 1
4,667 1,677
Acquisition and integration related expenses 2
2,836 -
Adjustment to earnout liability 3
1,088 -
Professional fees 4
(14,242) 1,178
Stock-based compensation expense 5
1,340 1,587
Adjusted income before income taxes 3,896 4,051
Income tax expense on adjusted income before income taxes 6
884 992
Adjusted net income $ 3,012 $ 3,059
Basic weighted-average shares outstanding 19,743,887 19,335,990
Three Months Ended September 30,
2026 2025
Net income (loss) attributable to Malibu Boats, Inc.
$ 0.30 $ (0.04)
Provision for income taxes
0.11 0.02
Acquisition related amortization 1
0.23 0.08
Acquisition and integration related expenses 2
0.14 -
Adjustment to earnout liability 3
0.06 -
Professional fees 4
(0.72) 0.06
Stock-based compensation expense 5
0.07 0.08
Adjusted income before income taxes 0.19 0.20
Income tax expense on adjusted income before income taxes 6
(0.04) (0.05)
Adjusted net income per share $ 0.15 $ 0.15
(1) Represents amortization of intangibles acquired in connection with the acquisitions of Maverick Boat Group, Pursuit, Cobalt, and Saxdor.
(2) Represents legal and advisory fees as well as integration costs incurred in connection with our acquisition of Saxdor on March 2, 2026.
(3) Represents the change in the contingent consideration (earnout) liability recognized in connection with the acquisition of Saxdor on March 2, 2026. See Note 4 - Acquisition for additional information.
(4) For the three months ended September 30, 2026 and 2025, represents legal and advisory fees, netted with insurance payments, related to ongoing litigation with our insurance carriers related to the Batchelder matters and ongoing litigation with Tommy's Boats and Matthew Borisch. For the three months ended September 30, 2026, the amount is also net of a $15.0 million reduction of general and administrative expense from insurance proceeds received in July 2023 from Starr that are no longer subject to a reservation of rights. See Note 9 - Accrued Expenses for additional information.
(5) Represents equity-based incentives awarded to employees under our long-term incentive plans.
(6) Reflects income tax expense at an estimated normalized annual effective income tax rate of 22.7% and 24.5% of income before taxes for the three months ended September 30, 2026 and 2025, respectively. The estimated normalized annual effective income tax rate is based on the federal statutory rate plus a blended state rate adjusted for the research and development tax credit, the foreign derived deduction eligible income deduction, and foreign income taxes attributable to our international subsidiaries.
Liquidity and Capital Resources
Overview and Primary Sources of Cash
Our primary uses of cash have been for funding working capital and capital investments, repayments under our debt arrangements, acquisitions, cash distributions to members of the LLC, cash payments under our tax receivable agreement and stock repurchases under our stock repurchase program. For both the short term and the long term, our sources of cash to meet these needs have primarily been operating cash flows, borrowings under our short and long-term debt facilities from banks and financial institutions. We believe that our cash on hand, cash generated by operating activities and funds available under our debt facilities will be sufficient to finance our operating activities for at least the next twelve months and beyond.
Material Cash Requirements
Our typical uses of cash are for capital expenditures, debt service obligations, payments under our tax receivable agreement, our lease obligations, and return of capital to our stockholders, which has typically been accomplished through our stock repurchase programs. Our acquisition of Saxdor also provides for up to €71.3 million or $84.2 million in potential earnout payments (the "earnout consideration") to the sellers during the calendar years 2027, 2028 and 2029 based on the results of the remainder of calendar year 2026 and the subsequent two calendar years (the "earnout period"), subject to the achievement of certain specified post-closing operating and financial targets. The earnout consideration may be paid in the form of cash, Common Stock or a combination thereof. The form of earnout consideration to be paid is at our sole discretion.
Capital Expenditures.
During the fiscal year ended June 30, 2026, we incurred approximately $24.7 million in capital expenditures primarily for investments in new models, capacity enhancements and vertical integration initiatives. For the three months ended September 30, 2026, we incurred approximately $8.4 million in capital expenditures primarily for investments in new models, capacity enhancements and vertical integration initiatives.
Principal and Interest Payments.
Our Fourth Amended and Restated Credit Agreement (the "Credit Agreement") provides for a $250.0 million revolving credit facility and a $100.0 million term loan facility ("Term Loan A"), each of which matures on July 10, 2031. Boats LLC borrowed the full $100.0 million available under the term loan facility at closing and used the net proceeds to repay a portion of the amounts outstanding under its prior revolving credit facility. The term loan requires quarterly principal payments of $1.25 million, with the remaining balance due at maturity. As of September 30, 2026, we had $98.8 million outstanding under Term Loan A. We also had $1.8 million of outstanding letters of credit, resulting in $173.2 million of availability under the revolving credit facility. Assuming no additional repayments or borrowings on our revolving credit facility after September 30, 2026, our interest payments would be approximately $9.3 million within the next 12 months based on the weighted average interest rate at September 30, 2026 of 5.35%. See below under "Term Loan A and Revolving Credit Facility" for additional information regarding our term loan and revolving credit facilities, including the interest rates applicable to borrowings under such facilities.
Tax Receivable Agreement.
We entered into a tax receivable agreement with our pre-IPO owners at the time of our initial public offering. Under the tax receivable agreement, we pay the pre-IPO owners (or any permitted assignees) 85% of the amount of cash savings, if any, in U.S. federal, state and local income tax or franchise tax that we actually realize, or in some circumstances are deemed to realize, as a result of an expected increase in our share of tax basis in LLC's tangible and intangible assets, including increases attributable to payments made under the tax receivable agreement. These obligations will not be paid if we do not realize cash tax savings. We estimate that approximately $0.1 million will be due under the tax receivable agreement within the next 12 months. In accordance with the Tax Receivable Agreement, the next annual payment is anticipated approximately 75 days after filing the federal return, due by April 15, 2027.
Operating Lease Obligations.
Lease commitments consist principally of leases for our manufacturing facilities. Our expected operating lease payments due within the next 12 months are $5.5 million and our total committed lease payments are $11.6 million as of September 30, 2026. Additional information regarding our operating leases is available in Note 12 of our unaudited interim condensed consolidated financial statements included elsewhere in this Quarterly Report.
Purchase Obligations.
In the ordinary course of business, we enter into purchase orders from a variety of suppliers, primarily for raw materials, in order to manage our various operating needs. The orders are expected to be purchased throughout the three months ending December 31, 2026. We or the vendor can generally terminate the purchase orders at any time. These purchase orders do not contain any termination payments or other penalties if cancelled. As of September 30, 2026, we had purchase orders in the amount of $113.6 million due within the next 12 months.
Return of Capital/Stock Repurchase Program.
In June 2026, our Board of Directors authorized a stock repurchase program to allow for the repurchase of up to $70.0 million of our Class A Common Stock (the "2027 Repurchase Program") for the period from July 1, 2026 to June 30, 2027. We may purchase shares under the 2027 Repurchase Program from time to time in privately negotiated transactions or open market transactions, including under plans complying with Rule 10b5-1 under the Securities Exchange Act of 1934, as amended at the discretion of management, subject to strategic considerations, market conditions, and other factors. During the three months ended September 30, 2026, we did not have any stock repurchases.
Insurance Litigation related to Batchelder matters
During the fiscal year ended June 30, 2024, we had a one-time payment of $100.0 million with respect to a settlement agreement entered in connection with the settlement of all Batchelder-related product liability matters. We maintain liability insurance applicable to the Batchelder-related matters with coverage up to $26.0 million. As of September 30, 2025, we had received approximately $21.0 million in insurance coverage proceeds, subject, in certain cases, to reservations of rights by the insurance carriers. As of September 30, 2026, $6.0 million remains subject, in certain cases, to reservations of rights by the insurance carrier. We contend that the insurance carriers are responsible for the entirety of the $100.0 million settlement amount and related expenses, and therefore the insurers' payments to date are well below what they should have tendered to Boats LLC. Accordingly, on July 3, 2023, Boats LLC filed a complaint against Federal Insurance Company and Starr Indemnity & Liability Company alleging that the insurers unreasonably failed to comply with their obligations by refusing, negligently and in bad faith, to settle covered claims within their available policy limits prior to trial. On April 8, 2024, the Court dismissed Starr, noting that only Chubb had the contractual right and duty to settle the Batchelder matters prior to trial. The Court subsequently granted the Company's motion for partial summary judgment, which precludes Chubb from apportioning liability to Starr. Chubb filed a notice of appeal on September 26, 2024, with respect to the dismissal of Starr and the order granting partial summary judgment against Chubb. On March 12, 2026, the Georgia Court of Appeals denied both aspects of Chubb's appeal. On April 14, 2026, Chubb filed a petition for a writ of certiorari with the Georgia Supreme Court and on September 6, 2026, the Georgia Supreme Court denied Chubb's petition for certiorari. As a result of Starr's dismissal, the approximately $15.0 million in insurance coverage proceeds received from Starr is no longer subject to a reservation of rights. We intend to vigorously pursue our claims against the insurance carrier to recover the full $100.0 million settlement amount and expenses (less any monies already tendered without reservation by the carrier). However, the Company cannot predict the outcome of such litigation.
Potential Earnout Payments for Saxdor Acquisition
Under the Purchase Agreement for the Saxdor acquisition, the Sellers can receive a maximum of €71.3 million or $84.2 million in potential earnout consideration to be paid out in calendar year 2027, 2028, and 2029 based on the results of the remainder of calendar year 2026 and the subsequent two calendar years (the "earnout period"), respectively, if certain requirements are met. The current fair value of potential earnout consideration is €27.3 million, or approximately $31.0 million. In the fiscal year ended June 30, 2026, an additional $1.7 million related to post-closing adjustments was recorded as an offset to the contingent earnout liability as the Company intends, and has the legal right, to withhold such amount from future earnout payments. As such, the balance of the contingent earnout liability as of September 30, 2026 was $29.3 million. The earnout consideration may be paid in the form of cash, common stock or a combination thereof, as calculated and determined in accordance with the Purchase Agreement. The form of earnout consideration to be paid is at our sole discretion. The Purchase Agreement also includes certain operating covenants, restrictions, and acceleration provisions applicable during the earnout period. See Note 4 - Acquisition for further details on changes from the initial measurement at the date of acquisition.
Our future capital requirements beyond the next 12 months will depend on many factors, including the general economic environment in which we operate and our ability to generate cash flow from operations, which are more uncertain as a result of inflation, changing interest rates and volatile fuel prices. Our liquidity needs during this uncertain time will depend on multiple factors, including our ability to continue operations and production of boats, the performance of our dealers and suppliers, potential strategic acquisitions, the impact of the general economy on our dealers, suppliers and retail customers, the availability of sufficient amounts of financing, and our operating performance.
The following table summarizes the cash flows from operating, investing and financing activities (dollars in thousands):
Three Months Ended September 30,
2026 2025
Total cash (used in) provided by:
Operating activities $ (31,086) $ 6,535
Investing activities (8,381) (4,225)
Financing activities 5,590 4,637
Impact of currency exchange rates on cash balances (198) 156
(Decrease) Increase in cash $ (34,075) $ 7,103
Operating Activities
Net cash used in operating activities was $31.1 million for the three months ended September 30, 2026, compared to net cash provided by operating activities of $6.5 million for the three months ended September 30, 2025, a decrease in cash of $37.6 million. The decrease in cash provided by operating activities resulted from a net decrease in operating assets and liabilities of $36.9 million. The decrease in operating assets and liabilities was partially offset by a decrease of $0.7 million in net income (after consideration of non-cash items included in net income, primarily related to depreciation, amortization, deferred tax assets and non-cash compensation).
Investing Activities
Net cash used in investing activities was $8.4 million for the three months ended September 30, 2026, compared to net cash used in investing activities of $4.2 million for the three months ended September 30, 2025, an increase in net cash used of $4.2 million. The increase in net cash used in investing activities for the three months ended September 30, 2026 was primarily related to increased capital expenditures, including incremental capital expenditures related to Saxdor, compared to the three months ended September 30, 2025.
Financing Activities
Net cash provided by financing activities was $5.6 million for the three months ended September 30, 2026 compared to net cash provided by financing activities of $4.6 million for the three months ended September 30, 2025, an increase of $1.0 million. During the three months ended September 30, 2026, we entered into the Fourth Amended and Restated Credit Agreement and borrowed $100.0 million under Term Loan A, the proceeds of which were used to repay a portion of the amounts outstanding under our prior revolving credit facility. Including additional borrowings of $10.0 million during the quarter, we repaid $90.0 million, net of borrowings, under our revolving credit facility. We also made our first quarterly principal payment of $1.3 million on Term Loan A and paid $2.9 million in debt issuance costs in connection with the refinancing. Additionally, we did not repurchase any of our Class A Common Stock under our current stock repurchase program. During the three months ended September 30, 2025, we borrowed $5.0 million, net of repayments, under our revolving credit facility and did not repurchase any of our Class A Common Stock under our prior stock repurchase program.
Term Loan A and Revolving Credit Facility
On July 10, 2026, Boats LLC entered into the Fourth Amended and Restated Credit Agreement (the "Credit Agreement") which provides for a $250.0 million revolving credit facility and a $100.0 million Term Loan A, each of which matures on July 10, 2031. Boats LLC borrowed the full $100.0 million available under Term Loan A at closing and used the net proceeds to repay a portion of the amounts outstanding under the prior revolving credit facility. Term Loan A requires quarterly principal payments of $1.25 million beginning September 30, 2026, with the remaining outstanding balance due at maturity.
As of September 30, 2026, Boats LLC had $75.0 million and $98.8 million outstanding under the revolving credit facility and Term Loan A, respectively. In addition, Boats LLC had $1.8 million in outstanding letters of credit, with $173.2 million available for borrowing under the revolving credit facility. Boats LLC may, subject to the terms of the Credit Agreement and lender participation, request increases to the revolving commitments or obtain incremental term loans in an aggregate principal amount equal to $100.0 million plus additional amounts subject to compliance with a specified consolidated leverage ratio.
Boats LLC is the borrower under the Credit Agreement, and its obligations are guaranteed by the LLC and certain present and future subsidiaries of Boats LLC, subject to certain exceptions. The obligations are secured by substantially all of the assets of the applicable loan parties. Malibu Boats, Inc. is not a party to the Credit Agreement.
Borrowings under the Credit Agreement bear interest at a rate equal to either, at our option, (i) the highest of the prime rate, the Federal Funds Rate (as defined in the Credit Agreement) plus 0.5%, or one-month Term SOFR (as defined in the Credit Agreement) plus 1% (the "Base Rate") or (ii) SOFR (as defined in the Credit Agreement), in each case plus an applicable margin ranging from 1.25% to 2.00% with respect to SOFR borrowings and 0.25% to 1.00% with respect to Base Rate borrowings. The applicable margin is based upon the consolidated leverage ratio of the LLC and its subsidiaries. As of September 30, 2026, the weighted average interest rate on our revolving credit facility was 5.35%. We are required to pay a commitment fee for any unused portion of the revolving credit facility, which ranges from 0.15% to 0.30% per annum, depending on the LLC's and its subsidiaries' consolidated leverage ratio.
The Credit Agreement contains certain customary representations and warranties and notice requirements upon the occurrence of specified events, including any event of default or pending or threatened litigation. The Credit Agreement also requires compliance with certain customary financial covenants consisting of a minimum ratio of EBITDA to interest expense and a maximum ratio of total debt to EBITDA. The Credit Agreement contains certain customary restrictive covenants regarding, among other matters, indebtedness, liens, fundamental changes, investments, restricted payments, dispositions of assets, transactions with affiliates, negative pledges, hedging transactions, certain prepayments of indebtedness, accounting changes, governmental regulation, outbound investments and transfers of material intellectual property rights to non-loan parties. As of September 30, 2026, we were in compliance with the financial covenants contained in the Credit Agreement. See Note 11 - Financing to our unaudited interim condensed consolidated financial statements for additional information regarding the Credit Agreement.
Repurchase Commitments
Our dealers have arrangements with certain finance companies to provide secured floor plan financing for the purchase of our boats. These arrangements indirectly provide liquidity to us by financing dealer purchases of our products, thereby minimizing the use of our working capital in the form of accounts receivable. A majority of our sales are financed under similar arrangements, pursuant to which we receive payment within a few days of shipment of the product. In most cases, we have agreed to repurchase products repossessed by the finance companies if a dealer defaults on its debt obligations to a finance company and the boat is returned to us, subject to certain limitations. Our financial exposure under these agreements is limited to the difference between the amounts unpaid by the dealer with respect to the repossessed product plus costs of repossession and the amount received on the resale of the repossessed product. During the three months ended September 30, 2026 and for the fiscal year ended June 30, 2026, we did not repurchase any boats under our repurchase agreements. An adverse change in retail sales could require us to repurchase repossessed units upon an event of default by any of our dealers, subject to the annual limitation. Refer to Note 17 to the unaudited interim condensed consolidated financial statements included elsewhere in this Quarterly Report for further information on repurchase commitments.
Critical Accounting Policies
As of September 30, 2026, there were no significant changes in the application of our critical accounting policies or estimation procedures from those presented in our Annual Report on Form 10-K for the fiscal year ended June 30, 2026.
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