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Interview with Malibu's CEO


wakebrdr94

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Being debt free and access to so much free capital for expansion may put a real squeeze on the competitors. The next few years will be interesting to see if Malibu continues to steal market share. How much room will there be for other boat companies if Malibu keeps taking market share?

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Being debt free and access to so much free capital for expansion may put a real squeeze on the competitors. The next few years will be interesting to see if Malibu continues to steal market share. How much room will there be for other boat companies if Malibu keeps taking market share?

Who cares?

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I would be surprised if Nautique and Mastercraft are going to sit back and watch them continue to take away there share of the market. Probably why MC has developed the NXT brand, and I would not be surprised if Nautique eventually comes out with a more affordable brand. MB really does not care, they only sell 300ish boats a year and they are happy with that. Sanger seems to be in the same mindset, smaller company not looking to go big. Look for some major changes coming from Centurion, Shane Stillman just left Skiers Choice and is the lead designer now at Centurion, only good things will come out of this. Shane has worked for Malibu, MB, Skiers Choice and now Centurion, he made all of those brands better.

As long as the banks are financing 15-20 years there wont be any problems, its when the financing options go away is when this entire "wakeboat" bubble will burst, just like the housing market did. These guys are just riding the wave right now...

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Being debt free and access to so much free capital for expansion may put a real squeeze on the competitors. The next few years will be interesting to see if Malibu continues to steal market share. How much room will there be for other boat companies if Malibu keeps taking market share?

Free capital?

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Nice find! Pretty interesting to see the reason behind going public and how they see it.

I wouldn't believe everything you read. PE guys taking some money off the table doesn't sound near as good.

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Pretty standard private equity moves & motives. Not surprising considering the bios for the 9 member board of directors (avail at Malibu's website) - a manufacturing guy, a maritime guy (sort of) and 7 finance guys.

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The nice thing about Shane moving to Centurion is this.

They already have a proven surf wake and a giant following in the competitive realm. The real place they are lacking is in overall looks and interior layout. Handling suffers slightly also. Shane knows how to correct all these issues and he will put something out worth mentioning. Mark my words, If Rick Lee and the crew over there let him have his way, they will be fierce competition, especially with how surfing and the wakesurf market is just beginning to explode. People will always want "the best" wave as they progress. Centrion has already done a wonderful job at establishing their name with Wakesurfing.

I contemplated a SV244 hard before I bought the 247. The main reasons I decided against it were overall interior layout/ function and looks.

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Who cares?

Near monopolies seldom result in a better product for the consumer and certainly result in less choice. Don't get me wrong, I'm not saying that Malibu is on the precipice of Windows/MS Office like monopolies.

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Free capital?

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Yes, selling equity shares is like free capital, cause you don't have to pay it back. Perhaps they sold their soul for the "free" money, but that is another discussion...

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Being public in this small market does not seem to offer much advantage. That interview was corporate babble. More than likely, they went public because the VC's wanted their money back. Hopefully the board is made up of folks that believe in the brand and understand the market. Time will tell.

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The nice thing about Shane moving to Centurion is this.

They already have a proven surf wake and a giant following in the competitive realm. The real place they are lacking is in overall looks and interior layout. Handling suffers slightly also. Shane knows how to correct all these issues and he will put something out worth mentioning. Mark my words, If Rick Lee and the crew over there let him have his way, they will be fierce competition, especially with how surfing and the wakesurf market is just beginning to explode. People will always want "the best" wave as they progress. Centrion has already done a wonderful job at establishing their name with Wakesurfing.

I contemplated a SV244 hard before I bought the 247. The main reasons I decided against it were overall interior layout/ function and looks.

Bobby could not agree more, there boats are definitely due for a face lift, they seem to have a strange shape to them. The surf wakes are definitely the best out there, this is why they tow all the pro events. They also seem to lack advertising and hype, this is what Malibu is good at. I also think the centurion dealer network is pretty small and could use a few more in California. I have never wakeboarded behind one, but I am guessing it's probably good enough for most of us. They will be on my radar, I am looking forward to seeing what Shane brings to the table.

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Being public in this small market does not seem to offer much advantage. That interview was corporate babble. More than likely, they went public because the VC's wanted their money back. Hopefully the board is made up of folks that believe in the brand and understand the market. Time will tell.

I was thinking the same exact thing, surfgate was there big push last year, and make no doubt there are other players in this game making some great boats that are moving people away from Malibu.

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I was thinking the same exact thing, surfgate was there big push last year, and make no doubt there are other players in this game making some great boats that are moving people away from Malibu.

Considering Malibu's market share is increasing and has been increasing, what do you mean? That not EVERYONE will want a Malibu? Well, OK.

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The nice thing about Shane moving to Centurion is this.

They already have a proven surf wake and a giant following in the competitive realm. The real place they are lacking is in overall looks and interior layout. Handling suffers slightly also. Shane knows how to correct all these issues and he will put something out worth mentioning. Mark my words, If Rick Lee and the crew over there let him have his way, they will be fierce competition, especially with how surfing and the wakesurf market is just beginning to explode. People will always want "the best" wave as they progress. Centrion has already done a wonderful job at establishing their name with Wakesurfing.

I contemplated a SV244 hard before I bought the 247. The main reasons I decided against it were overall interior layout/ function and looks.

They really need new blood over there. Their dash looks god awful, interior isn't that great, I know a couple guys involved in lemon law lawsuits as they have had nothing but issues from day one.

And while they may make a great listed surf wave, they are the puller for the pros because they pay for that spot. Any true innovation for the sport would be to go with Malibu or nautique as their surf systems are faster on the fly switching. To really progress to the next level will require going side to side on the fly. And you can argue listed vs wake device wave all you want, the reality is this is just the beginning and surf gate, nss, or whatever will only get better.

Also Malibu did a great job with Axis, I think everyone will agree. You may get those who are going to buy a NXT simply because of the Mastercraft name, but for roughly 5 k more to step into a bigger boat like the T22 or A22 is a no brainier for people who do their research. At least me personally, I'll take an axis all day over the look and size of the NXT

I think Jack is right about a real opportunity for gaining market share here on the west coast, but that is a discussion for another thread

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They borrowed $55MM just before the IPO to pay a dividend to the private equity firm that owned them and then in the IPO raised roughly $89MM to pay down this debt (basically the IPO proceeds went to the private equity owners) and other debt they had borrowed, so it's not like they raised a bunch of money to invest in the company. Basically the beginning of an exit for the private equity firm.

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Maybe I read it wrong, and I'm not disagreeing with you about an exit strategy, but didn't they raise close to 300mil, which would give them extra capital to invest into the company?

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You're confusing his comment about a $300MM market capitalization with the amount they actually raised. The market capitalization is total shares x share price. The S1, or the document filed with the SEC to market the shares, says they planned to raise $88MM so really they only sold $88/$300MM or roughly 30% +/- of the company to the public (the actual math is slightly different than this but at least you get the point). The rest remains held by the previous shareholders (or some combination thereof since not all existing shareholders necessarily had to sell their stock here). There were some extra shares available for sale that would raise the $88MM but I'm not sure if those actually got sold or not.

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Considering Malibu's market share is increasing and has been increasing, what do you mean? That not EVERYONE will want a Malibu? Well, OK.

In all fairness, that is largely due to the addition of a new boat company that draws customers from a completely different price catagory. Malibu's largest growth has grown with the axis line. If you take that out of the equation, there growth in the segment has been negligible.

When I toured the factory, they said Axis was about 35% of their sales, and still increasing as a percentage of production.....Take axis out of the equation, and Malibu loses the #1 spot.......

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1021, true maybe but I'd still say they are capturing share overall by expanding the product line. Some other Companys are less willing to do that for fear of diluting the perception of the main brand. Good move by Malibu if you judge them purely by sales and market share.

Edited by jrz1
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1021, true maybe but I'd still say they are capturing share overall by expanding the product line. Some other Companys are less willing to do that for fear of diluting the perception of the main brand. Good move by Malibu if you judge them purely by sales and market share.

For sure. Added brand, more models in both brands, and I am sure surfgate helped a lot as well.

That said. MC and CC market shares have dropped only 2% or less in the last 5 years. The largest hits were to skiers choice, and the "all others" columns, that both took hits of more than 5%.

They are certainly doing something right!

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