spikew919

M235 first day on the water

389 posts in this topic

One more fact for @billjames to make my point that the devil is in the details...

Warranty claims paid went from $3.164M in 2015 to $3.764M in 2016.  That's a 19% increase, right?  On the surface that sounds very bad.  Bud did it ever occur to you that comparing warranty claims paid to in-period Revenue is a faulty ratio?  What does one have to do with the other?  The answer... NOTHING!  So why do that ratio.  The way Malibu looks at it (or Ford, or Chevrolet, or BMW, etc.), is "how many years of warranty service do I have out in the wild?"  In the software industry we called that "installed base."  Think of Malibu's "installed base" as all the boats out there that still have warranty, but not just the units, the years of warranty they represent.  That's the real driver.  And Malibu, like any growing company is adding more boats (and therefore years of warranty service) than they are churning.  I have it from GOOD authority that the 10% of the 19% increase is driven by just having more warranty years out there this year than the previously.  So now we're down to 9% increase.  As stated before that could be mix, cost of materials, labor, outlier claims, etc. etc.  

Okay, now I'm really done with this topic.  Can't believe you sucked me in (yeah I can).  Have a good one.  I hope you are reading this in the spirit with which it was intended... a couple of nerds talking numbers.  All good

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Very well written IXFE!  

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Don't mess with Texas!

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I think as people are paying huuuugge dollars for boats, they are more inclined to make "fuller" use of their warranty's. As mentioned before too, these boats are getting far more complicated and various technology's thrown into them, equaling more need for warranty work.

Steve B. 

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8 hours ago, 85 Barefoot said:

maliwop, 

What issues?  zip ties and washers?  Don't take this the wrong way, but are you really trading "issues" with washers and zip ties in the bilge with a boat design that literally prohibits access to the steering cable?  I'll take 10x the washers to have a boat that you can actually work on.  But, you'll probably be on your next one by the time any major work has to be done. Your dealer will love it though.  Things are going to start costing thousands upon thousands when work starts requiring engine removal like the Ris will.  I picked up I think one nut and 2 washers in my new boat.  O the travesty.

I was basically stating that I don't see it acceptable to be picking up somebody else's scraps in a new boat (or anything for that matter). If you're okay with it than why change anything? Nothing else matters as long as you and your family are happy with the purchase. I've been hearing about/seeing a lot of this in areas where one could easily remove this crap in a matter of seconds. All they have to do is pay attention. That = unacceptable. In the grand scheme of things, it is minor when you really take a step back. I agree with you. Still not acceptable. I don't care what the decal on the side of the boat reads. Has it been happening with other manufacturers? I have no idea as naturally I have been following mainly Malibu for the last few years. I'm a realist so don't get me wrong. I'm not in any way stating that the Ri is going to be any better. I haven't even picked ours up yet so I literally have 0 experience with Centurion at this point. I hold Centurion accountable in the same way I would Malibu if I purchased the M235. As I have already stated, if I have any of these issues with my Centurion, I'll make sure to report back. Fair is fair. I've already read of some common issues already being found on the 257's, so I'd be kidding myself if I thought I was getting a perfect boat. I can always hope though. I don't have anything against Malibu. They build a beautiful boat. My MXZ was a great boat. This time around...... our wants in a boat and the pricing of the Malibu didn't line up. No different than when I buy a truck. I test drive the Dodge, Chevy, and Ford. I'm no fanboy. I buy the tool that works best for me (while taking price into consideration). Do I have my concerns about certain points regarding Malibu? Yup. That's going by what I've experienced myself and heard from those with first hand experience. Do I have my concerns about the lack of care in this world in general? Absolutely. Does it mean another manufacturer will provide a better solution? Not necessarily. I got a great deal on a 257 which will be a great boat for our family. That's why I went the way I did. The deal I made with my dealer on the Centurion wasn't on the table with the Malibu dealer. Nothing against them either. SWS is a great company and will serve Alberta extremely well. I wouldn't hesitate for a second to buy a boat from them or have my boat serviced by them. Not sure if I'm getting my point across. It's been a long day. If I am pulling the engine out next month to tighten a bolt on my steering cable........ I'll be right here bitching and giving you boys some comfort with the fact that you bought a Malibu. Whatever the situation, what anybody feels, or the boat you have........ this winter has been way too damn long and I am jealous of you Southerners that are already out on the lakes.

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4 hours ago, bamabonners said:

All I remember from freshman accounting is revenue = income - expenses.  :surprised:

In my job, I am the one that deals with customers when our products and services don't meet their expectations.  One thing I've learned...more money spent always means higher expectations.

I've become a realist when it comes to major purchases like boats.  I have the same expectation for all brands when I'm spending 100k.  When I read things like "defects related to materials or workmanship supplied by it during construction of the boat" in the warranty, I take that serious.  The more money I spend, the more seriously I take that statement.  Each of us have our own expectations when we receive our expensive toys and arguing over it is just pointless.  Add in a little fan boy koolaid and owners goggles and it becomes absurd.  

Just let people vent about it.  Its ok.  So what if they talk bad about Malibu, MC, nautique in the process.  Why do we need to defend the company?  If you are like me, and it is your job, you don't usually jump to defending the company.  This usually results in the person getting even more upset.  Just listen, let the person be upset.  Then, let the dealer and/or Malibu try to resolve the problem and everyone will calm down.

 

 

I agree, but at the same time it is also then ok for people you know and understand the manufacturing process and ins and outs of the boating industry to explain how it works without getting dragged through the mud! I feel the fanboy and will defend to all ends finger gets pointed to people like that wayyyy too soon. Most of the time they don't even take a side. Always two ways to look at sometimes. 

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13 hours ago, IXFE said:

@billjames I think it's probably time for you to stop digging.  You've completely derailed this thread with a false narrative and taken it into a ditch. I haven't engaged you (beyond the punch card which was clearly in jest) because I've been swamped this week and frankly, I really don't want to get into an accounting pissing match on a boat forum.  I don't have a clue who you are what you do for a living, but the way you're misusing certain finance/accounting terms leads me to believe this isn't your area of expertise.  Forgive me if I'm wrong and you're actually the world's foremost expert on product warranty accounting.  Just know that some of the people you're lecturing on this topic ARE in fact subject matter experts who have been doing this for a living and doing it WELL.  Another in this thread actually discussed this very matter recently with the Malibu CFO (the only true expert on this subject).  These folks are either just too nice to engage you, your posts are too hard to follow, or they realize this is not a problem easily solved with internet barbs and wikipedia links.  

As for me, I'll come right out and say it.  I have 20 years experience in accounting and corporate finance, but readily admit warranty accounting is not my thing.  I'm in software industry so when it comes to warranty accounting I know just enough to be dangerous.  If you are an expert in this area and not just a guy innocently misusing a few numbers you found I would hope you'd know that a true finance/accounting pro doesn't jump to conclusions the way you have.  Rarely is the real story that simple.  To get to the bottom of junk like this it takes hours of pouring through financial statements and footnotes and likely some t-accounts on a white board.  For example, it took me an hour to write this post (and it's the last I will comment on it because nobody is paying me for this!).  Even after an hour or reading and manager math, I'm not 100% clear on the numbers, just the theme of Malibu's efforts in this area (i.e. warranty claims are down and they are seeing improvements).  These statement came from MBUU 2016 10-K, which as you probably know is an audited document (i.e. this isn't management spin or marketing).    

  • "We are committed to continuous improvement in our operations, and our efforts in this regard have resulted in higher gross margins. Specifically, we have increased labor efficiency, reduced cost of materials and
    reduced warranty claims"  
  • "From July 1, 2012 to June 30, 2016, we recorded 2,601,211 consecutive man-hours with only one lost-time accident in our Tennessee facility, an accomplishment that has
    reduced workers’ compensation claims and warranty costs, as our most experienced employees continue to remain on the job."
  • "In the past, we have provided limited product warranties, generally covering periods from 12 to 36 months for Malibu brand boats and 12 to 24 months for Axis brand
    boats. Effective July 1, 2015, we began providing a limited warranty for a period up to five years to our consumers for both our Malibu and Axis brand boats manufactured after this point in time. We expect the extension of our warranty coverage period to increase our obligations to cover warranty claims over time resulting in an increase in our reserve to cover these warranty claims."  
    This is an important point I think you may have missed when coming to your conclusion.  Even if the boats are MORE reliable than previous to this change, you will see MORE warranty $'s flowing through the PnL as well as reserves sitting on the Balance Sheet.  When Malibu sells a boat with 5 year warranty they have to assume/forecast the boat will absorb more warranty $'s simply due to the extended warranty term.  So regardless of the QC at the factory or the initial quality of the boat, Malibu is estimating more warranty repair $'s. 
  •  "Factors that affect our warranty liability include the number of units sold, historical and anticipated rates of warranty claims, and cost per claim. We utilize historical trends and analytical tools to assist in determining the appropriate warranty liability. The extension of our warranty coverage period is expected to continue to increase our obligations to cover warranty claims over time resulting in an increase in our reserve to cover these warranty claims. We periodically assess the adequacy of the recorded warranty liabilities by brand and will adjust the amounts as necessary based on the best available information and trends."

*** the above statements all refer to the estimate of warranty costs that gets booked a both a cost of good sold on the PnL and a Liability on the balance sheet.  As to the actual cash outlay in a given period, keep reading...***

  • In footnote 8 it clearly states that warranty claims paid in 2016 were $3.764M, or 1.49% of Revenue.  Warranty claims paid in 2015 were $3,164, or 1.38% of Revenue.  Let's assume Malibu achieved the same 1.38% in 2016... the claims paid could have been $263K lower if they had held the same 1.38%.  Does that mean the boats became suddenly less reliable in 2016?  Or just more complicated?  Or just mix shift between Axis and Malibu?  Or just normal fluctuations in the cost of parts and labor?  Or just one dealer who got aggressive on a bunch of gel coal claims, etc. etc.  We already know the number of claims went down.  My point is... you are REALLY stretching if you think this data points to a vast right wing conspiracy.  My other point is, where on earth did you get your data about warranty spend ratios, because it looks nothing like the date I'm looking at on page 93 of the 10-K linked below.

http://d18rn0p25nwr6d.cloudfront.net/CIK-0001590976/9033254c-5176-4dd2-8303-4c2a23a6237e.pdf

 

13 hours ago, IXFE said:

One more fact for @billjames to make my point that the devil is in the details...

Warranty claims paid went from $3.164M in 2015 to $3.764M in 2016.  That's a 19% increase, right?  On the surface that sounds very bad.  Bud did it ever occur to you that comparing warranty claims paid to in-period Revenue is a faulty ratio?  What does one have to do with the other?  The answer... NOTHING!  So why do that ratio.  The way Malibu looks at it (or Ford, or Chevrolet, or BMW, etc.), is "how many years of warranty service do I have out in the wild?"  In the software industry we called that "installed base."  Think of Malibu's "installed base" as all the boats out there that still have warranty, but not just the units, the years of warranty they represent.  That's the real driver.  And Malibu, like any growing company is adding more boats (and therefore years of warranty service) than they are churning.  I have it from GOOD authority that the 10% of the 19% increase is driven by just having more warranty years out there this year than the previously.  So now we're down to 9% increase.  As stated before that could be mix, cost of materials, labor, outlier claims, etc. etc.  

Okay, now I'm really done with this topic.  Can't believe you sucked me in (yeah I can).  Have a good one.  I hope you are reading this in the spirit with which it was intended... a couple of nerds talking numbers.  All good

So well said. This is one of the reasons I enjoy reading your posts.

 

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It's like IXFE put his F-150 in four wheel drive, rolled his windows up, and plowed right through that pile of sh!t argument billjames tried to make.

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In defense of @billjames I got a very thoughtful PM from him last night about some of the points I brought up.  So we have taken the accounting conversation offline.  

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53 minutes ago, Chattwake said:

It's like IXFE put his F-150 in four wheel drive, rolled his windows up, and plowed right through that pile of sh!t argument billjames tried to make.

He drives a yukon denali now.  Used all wheel drive.

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Just now, 85 Barefoot said:

He drives a yukon denali now.  Used all wheel drive.

I really miss my truck though... I've had new truck on the brain for several months. :whistle:

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1 minute ago, IXFE said:

I really miss my truck though... I've had new truck on the brain for several months. :whistle:

You know what to do. 

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Posted (edited)

14 minutes ago, ahopkinsTXi said:

You know what to do. 

Go to the Ram dealer and order a 2500!  He is in TX now, so he needs a TRUCK

Edited by DarkSide
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1 minute ago, DarkSide said:

Go to the Ram dealer and order a 2500!  He is in TX now, so he needs a TRUCK

More like a Chevy or GMC dealer. :Tease3:

I mean, he is near Arlington GM. Is only right. 

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3 hours ago, IXFE said:

I really miss my truck though... I've had new truck on the brain for several months. :whistle:

Shotgun 

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2 hours ago, ahopkinsTXi said:

More like a Chevy or GMC dealer. :Tease3:

I mean, he is near Arlington GM. Is only right. 

 

2 hours ago, DarkSide said:

Go to the Ram dealer and order a 2500!  He is in TX now, so he needs a TRUCK

A4C8C954-61D1-4978-9E25-C9DDD695E2E5_zps

F7A0C418-2D6C-4E9D-A7F8-0FC8DBDFACEB_zps

You guys are so wrong 

 

 

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I'll also de-rail, ha. I'm not a pick-up person. But. There is an F-150 "Limited" a few blocks away. This truck speaks to me. Lol. It has all the shizz !

Sweet ride

Steve B.

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Posted (edited)

 

I love this thread. 

 

Similar to how Uncle Rick loves Ford owners.  

QhOuuPJP.jpeg

 

 

Edited by bamaboy
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Longest winter EVAH!!!

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More de-railing... I'm pickin' mine up from storage tomorrow !!!!!!!!  

:werule:                                                                                                                                                                                                                                                                                                                                                

Steve B.

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