MBUU by the numbers

[wakebrdr94]

I know it is purely coincidental, as we were mentioning cost cutting, my T handle center plug snapped this evening. I'm sure it happens, but it's a first for me in 20 years

[IXFE]

I know it is purely coincidental, as we were mentioning cost cutting, my T handle center plug snapped this evening. I'm sure it happens, but it's a first for me in 20 years

Probably made in China! Lol

[randv]

Great find IXFE. Really interesting.

Interesting that the numbers show the margins are indeed very tight for a manufacturing business in a specialist niche market. I was expecting higher, especially for the market leader (in share).

The increasing price of boats must partly be a function of what is now considered the minimum spec people want is much higher than it used to be. As with cars, where over the last 30 years, we have seen electric windows, tinted windows, decent music system, automatic g'box, laminated glass, aircon, etc, etc. become the norm, we are seeing 'average' boats today with 3 to 4 ballast tanks, surf systems, swivel board racks on clean single frame towers, computer speed controls, well appointed interiors (inc some of the 'value brands'), with fuel injected, CAT equipped, twin spark plug engines. Quite a lot different from the early 190 ProStars with a tower on it.

Whether it is all necessary isn't really the point, it is what 'the market' seems to be demanding.

R

Edited August 14, 2014 by randv

[Tims]

Who owns all the stock? My guess is the VC and whoever is on the board? Would like to see their cash flow statement and working capital numbers. Might provide some info on motivations.

Sarbains Oxley.........Ughhhhh, those words give me a headache.

[Afun]

Tims...you think its a good idea to own some of this stock? Its about 20 a share....on March 10 it hit 23.90....when was the IPO?

[oldjeep]

Tims...you think its a good idea to own some of this stock? Its about 20 a share....on March 10 it hit 23.90....when was the IPO?

Jan 31st was the IPO, lockup period just ended July 30th.

[Tims]

Tims...you think its a good idea to own some of this stock? Its about 20 a share....on March 10 it hit 23.90....when was the IPO?

Depends what you want it for. Quick return, long haul, dividends? If you think the "boat price bubble" is about the pop, or high probability of easy financing drying up, I would say stay away.

[Afun]

Depends what you want it for. Quick return, long haul, dividends? If you think the "boat price bubble" is about the pop, or high probability of easy financing drying up, I would say stay away.

Boat price bubble....do you think so?

[wakebrdr94]

Boat price bubble....do you think so?

it's only a matter of time.

In 2002 I paid 45kOTD for my first VLX with trailer. 12 years later look what they go for.

in 2005 I paid 53k for my duramax, i can get one now for about 65k You can't tell me that the materials in boats have gone up that much more in boats.

[85 Barefoot]

it's only a matter of time.

In 2002 I paid 45kOTD for my first VLX with trailer. 12 years later look what they go for.

in 2005 I paid 53k for my duramax, i can get one now for about 65k You can't tell me that the materials in boats have gone up that much more in boats.

Did you not read IXFE's post?

[teamerickson]

Depends what you want it for. Quick return, long haul, dividends? If you think the "boat price bubble" is about the pop, or high probability of easy financing drying up, I would say stay away.

Did you stay at a Holiday Inn Express last night?

[Tims]

Hahahaha! That's about right!!

[IXFE]

Did you not read IXFE's post?

I guess not. The numbers prove these boats aren't cheap to build.

One note on petrol... it's in everything in a boat, the fiberglass (resin), the vinyl, the carpet, the plastic, etc. And beyond that, every raw material that gets delivered to Loudon comes on a truck, likely from far away. So not only have material costs skyrocketed over the years, but so have delivery costs both to and from the factory.

And unfortunately, as the boats get more complex, the warranty costs go up to for Malibu, which is buried in cost of sales.

In short, this is not 2001 anymore.

[WakeGirl]

Blush...

I always love when I get the chance to meet guys off the forum (Bobby, Fman, BS, Ruff, Shawn, Mason, Vince, Skurfer, Cory. I even met Wakegirl once, but I know she doesn't remember). I think we're all way cooler when we come out from behind our keyboards.

Of course I remember. I have a very good memory when it comes to the members here, both good and bad.

[Bawshogg]

Ehhh ohhh....

[jb 156]

Talking with a dealer, he has to pay for each boat he orders, full dealer cost paid by the time it lands on his lot. Compare that to a car dealers that pays a small financing fee as the car sits on the lot and pays out the manufacturer when it sells.

How important do you think it is for a dealer to take a deposit on a sale that hasn't been built yet at the boat show?

Most if not all dealers car, boat, rv or otherwise have floorplan financing. The terms can vary but this allows them to borrow against their current inventory, and when it sells reduce their floorplan and purchase another boat, car, or RV. Some have Net 30, 60, or even 90 day plans, with repayment schedules predetermined. So yes they will have to pay for the boats they order, but if they can flip them around in the set time that that floorplan allows they may not have any carrying cost for said vehicle.

[Fman]

That is eye opening info. Thanks for sharing... I guess my question is how is going public going to help Malibu keep building better boats? My gut answer is its all about the bottom line profits for the ceo, executive staff and board members. If he can get stock options that would drive up his net worth, it's how all the big ceo's become millionaires. I would hope they did this to help generate cash flow to improve R&D, employ better workers and use higher end materials, and end result would be to produce a better product every year.

How is this working out so far? Do people hear feel like Malibu is producing a better product, with better value than before they went public?

Edited August 14, 2014 by Fman

[ajive]

Most if not all dealers car, boat, rv or otherwise have floorplan financing. The terms can vary but this allows them to borrow against their current inventory, and when it sells reduce their floorplan and purchase another boat, car, or RV. Some have Net 30, 60, or even 90 day plans, with repayment schedules predetermined. So yes they will have to pay for the boats they order, but if they can flip them around in the set time that that floorplan allows they may not have any carrying cost for said vehicle.

They also very commonly have 12mo plans. The carrying cost in the interest for the dealer, but that can be minimal if they turn the boat pretty quickly.

As for buying, I have to think that if you catch them around the time something like that is coming due and cash flows are low (Feb-April perhaps on an early order?) then I think that puts you in a really, really good spot. I know Malibu has incentives during the slow months too

That takes a year of planning or good detective work to hit that at the right moment, though.

[ajive]

How is this working out so far? Do people hear feel like Malibu is producing a better product, with better value than before they went public?

Unleash the hate!

[TallRedRider]

Thanks, IXFE. This is interesting stuff for sure.

I wouldn't know Wakegirl if she hit me with a 2 X 4. Unless she introduced herself as such.

Back to topic, I find it very interesting that your dealer gave the strong impression that his invoice cost was much higher than what Malibu was reporting. Dealers seem to always be shouting about how they never make any money on service, now this one says he does not make much on sales. Who to believe....

[Fman]

Unleash the hate!

No hate here...? Just asking the question what is the feeling from all of us purchasing these boats. Hopefully it's a better product and value.

[teamerickson]

I don't think that's gonna be the consensus.

[Bawshogg]

I have been a Malibu customer for a very long time, and we have not seen the " value" ever so much as the mid 2000 years. (2003-2007)

During that era you got more boat for your money than any other manufacturer at the time. Malibu was not the cheapest, but what you got dollar for dollar far exceeded the other major players on the upper end of the tow boat spectrum. That is not the case now, and I doubt the Malibu we know now will ever be back at that point .

[DarkSide]

The ipo raised a ton of cash, to pay down debt and expand. If memory serves....also part of the vc exit strategy, enabling them to easily siphon cash out.

[IXFE]

Thanks, IXFE. This is interesting stuff for sure.

I wouldn't know Wakegirl if she hit me with a 2 X 4. Unless she introduced herself as such.

Back to topic, I find it very interesting that your dealer gave the strong impression that his invoice cost was much higher than what Malibu was reporting. Dealers seem to always be shouting about how they never make any money on service, now this one says he does not make much on sales. Who to believe....

My dealer wasn't lying. I think he was just surprised to hear the avg. Invoice being that low. We both surmised that his mix of Malibu -to- Axis is probably richer than the average.

Sometimes it's easy to look at an average number and mentally compare it to a single number (likely an outlier) in your head. I only shared his comment to demonstrate that the Wakesetter invoices (and corrsponding build costs) can be much higher than the averages you see on the P&L, especially the boats that keep showing up on this forum (flake, 450's, 18's, decadence, color towers, etc. etc.). My dealer delivers a lot of fancy boats like that.

The point is... these boats ain't cheap to build and the corporate raiders are not necessarily printing money at that factory. It's a tight biz with stiff competition, just like a lot of others.