Tommys vs Malibu

[ThePeggyLou]

On 4/12/2024 at 8:55 PM, The Hulk said:

That's Malibu only + $XM other brands?

Not sure if they are getting a special rate but otherwise their variable is likely in the 8.5%+ range and likely to keep increasing. I'm not seeing how they can survive easily if paying this rate with deteriorating market conditions. Their un official Ebita has been exceeded 2X over just in estimated interest alone..

 

Just spoke to a strong local bank yesterday. Things aren't going good. profit at bank way down having to match CDs and such in the 5+% range and loan out at 8+% to make 3% profit. Nobody is borrowing. deposits in nearly all accounts have been drawn way down via poor business or money that has left the bank for MM and mainly cash available has been used to pay down variable debt. Basically nobody wants to borrow currently.  

 

I'm seeing the same (work for a bank), the secondary market is gouging the lenders too, all sorts of downside protection and yield hurdles. I'm wondering if there's a dealer discount, I'm looking to make a first purchase and I thought cash would give me some pricing benefit (so far no dice). Typically you could subsidize rate with a dealer discount and get more to borrow, of course the dealer themselves make less but move more inventory

Edited April 15 by ThePeggyLou

[oldjeep]

https://www.tommysboats.com/--boat-parts-liquidation-sale

[oldjeep]

In other dealer news - Local dealer just sent out an email about opening a 3rd location in MN.  Location definitely makes a lot of sense from a service perspective, Detroit Lakes area - home of a million cabins/summer homes.

[UWSkier]

23 minutes ago, oldjeep said:

https://www.tommysboats.com/--boat-parts-liquidation-sale

I don't think they've been paying their ISP bills.  Last several days I've had intermittent issues getting a response from their webpage.

[RyanB]

5 hours ago, UWSkier said:

I don't think they've been paying their ISP bills.  Last several days I've had intermittent issues getting a response from their webpage.

I just ordered some under water lights and they hit my credit card twice. I guess I’ll call in the am. 

[BlindSquirrel]

8 minutes ago, RyanB said:

I just ordered some under water lights and they hit my credit card twice. I guess I’ll call in the am. 

lol, I’m sure it was just an innocent error. 
 

 

[cowwboy]

I'm curious when the real sale on the parts will happen. 

If they are anything like my local dealer they have 10x the stuff that's on that website that's NOS just not well inventoried. 
Like that dealership in Canada that liquidated their Malibu B-stock parts. I got some smoking delas on parts from them even with shipping to the States.  

[shawndoggy]

33 minutes ago, cowwboy said:

I'm curious when the real sale on the parts will happen. 

If they are anything like my local dealer they have 10x the stuff that's on that website that's NOS just not well inventoried. 
Like that dealership in Canada that liquidated their Malibu B-stock parts. I got some smoking delas on parts from them even with shipping to the States.  

I’d think that the lenders will be seizing assets soon?  Fire sale of parts without lender consent is likely also a breach of loan covenants?  Maybe not the flooring line (lender probably just secured in the boats) but they almost certainly have an asset backed loan or line of credit that’s secured with all other assets, and even if they aren’t in default with that lender, a default on the flooring line is likely a technical cross default on a covenant. 

[Nick55]

1 hour ago, cowwboy said:

I'm curious when the real sale on the parts will happen. 

If they are anything like my local dealer they have 10x the stuff that's on that website that's NOS just not well inventoried. 
Like that dealership in Canada that liquidated their Malibu B-stock parts. I got some smoking delas on parts from them even with shipping to the States.  

I don’t think their prices are at “fire sale” levels yet.  $700+ for a prop, and $250 for some of the 12 LED lights, just doing some shopping you can get those prices elsewhere online that isn’t in some sort of financial/business distress.  

[oldjeep]

Just now, Nick55 said:

I don’t think their prices are at “fire sale” levels yet.  $700+ for a prop, and $250 for some of the 12 LED lights, just doing some shopping you can get those prices elsewhere online that isn’t in some sort of financial/business distress.  

Yeah, and there are not a ton of parts listed.  In all of the categories on that page I would say there are maybe 40-50 things for sale.  

[cowwboy]

40 minutes ago, shawndoggy said:

I’d think that the lenders will be seizing assets soon?  Fire sale of parts without lender consent is likely also a breach of loan covenants?  Maybe not the flooring line (lender probably just secured in the boats) but they almost certainly have an asset backed loan or line of credit that’s secured with all other assets, and even if they aren’t in default with that lender, a default on the flooring line is likely a technical cross default on a covenant. 

Correct, I am just waiting till the lenders / liquidator starts selling parts. 
 

[MalibuNation]

I've been following this closely.  Not sure how much new info is here.  Grand Rapids TV station:

https://www.woodtv.com/news/kent-county/accused-of-defaulting-on-loans-tommys-boats-sues-boatmaker/

[oldjeep]

Next.  Nothing better than more lawyers getting involved.

https://www.businesswire.com/news/home/20240415843221/en/The-Law-Offices-of-Frank-R.-Cruz-Announces-Investigation-of-Malibu-Boats-Inc.-MBUU-on-Behalf-of-Investors

[DAI]

29 minutes ago, oldjeep said:

Next.  Nothing better than more lawyers getting involved.

https://www.businesswire.com/news/home/20240415843221/en/The-Law-Offices-of-Frank-R.-Cruz-Announces-Investigation-of-Malibu-Boats-Inc.-MBUU-on-Behalf-of-Investors

“On Behalf of Investors”.    More like “on behalf of getting oneself paid”.

[oldjeep]

1 minute ago, DAI said:

“On Behalf of Investors”.    More like “on behalf of getting oneself paid”.

What, you mean that the last class action lawsuit where I got $10 that the lawyers made millions?  

[23LSVOwner]

"Have you been injured by Malibu Stock? If so, you may be entitled to compensation. Call now, our lawyer is standing by."

[rennis]

I guess this helps explain why it took MBUU 10 months to build my Axis.  I AM entitled to compensation.  

[DAI]

51 minutes ago, oldjeep said:

What, you mean that the last class action lawsuit where I got $10 that the lawyers made millions?  

Sounds like my WorldCom stock back in the day.  That’s when I realized (most) Class Action Lawsuits only benefit the lawyers.

[justgary]

4 hours ago, oldjeep said:

What, you mean that the last class action lawsuit where I got $10 that the lawyers made millions?  

Indeed.  They have now figured out how to give you nothing so they can take all of the settlement for themselves.

I just got a postcard in the mail yesterday that says, "this Claim's proportionate share of the Net Settlement Fund calculates to less than $10.00....  Accordingly, the above-referenced Claim will not receive any distribution from the Net Settlement Fund."

No tort reform for us, though, since laws are mostly made by lawyers.

[HollywoodBall]

On 4/12/2024 at 7:57 PM, Btown801 said:

I took a quick look at Tommy’s inventory

leftover 2023's
131 Axis boats
213 Malibu boats

344 boats total.  Estimated average price of those boats $150k x 344 = $51.6 million in leftover inventory.

2024 inventory in stock:
42 Axis boats 
68 Malibu boats

110 boats total.   Estimated price of these boats $150k x110 = $16.5 million in inventory.

 

Found a still-brand-new 2022 24MXZ in there as well that someone should be able to pick up for a steal.

[85 Barefoot]

9 minutes ago, justgary said:

Indeed.  They have now figured out how to give you nothing so they can take all of the settlement for themselves.

I just got a postcard in the mail yesterday that says, "this Claim's proportionate share of the Net Settlement Fund calculates to less than $10.00....  Accordingly, the above-referenced Claim will not receive any distribution from the Net Settlement Fund."

No tort reform for us, though, since laws are mostly made by lawyers.

Not accurate on multiple fronts, but most notably,  Desantis signed major tort reform legislation last year. Of course, Floridians don’t realize how their rights were restricted thereby, but carry on.

[justgary]

1 hour ago, 85 Barefoot said:

Floridians don’t realize how their rights were restricted thereby, but carry on.

Please enlighten us.  I presume you are talking about my right to be a victim and bring a suit against somebody for something I likely did wrong when using something they made, I'm probably OK with that.  Especially if the end result is that they have to start putting stickers on their product, as if that would have saved me.

[gobble]

The Tommy's story does sound like what my dealer was telling me when I bought my last Malibu. I don't understand why they would force dealers to take stupid 26 foot wake busses when there is plenty of demand for the boats people actually want. I know my dealer had a hell of a time selling those big boats that they were forced to take. 

[The Hulk]

I don’t know exactly how Malibu structures their dealer incentives but many companies in the marine industry do tier pricing based on spend levels… So you have to spend over X$ in order to get the discount x%.

That is why tons of company in our industry and others are pumped full of inventory. Manufactures raised the dollar and quantity amounts to get their tiered pricing from the Covid boom and continued, forcing that upon dealerships.. ultimately, most of it was the dealers decision to take on whatever they decided to buy however in this Tommy’s situation sounds like there was some other stuff going on… “ allegedly” ..

[Nick55]

Dealers of all sorts generally get some sort of allocation of product based off their performance.  When I worked at a high line European dealer in a past life it happened, usually nothing insane but if the average car we sold was around $100k, it would usually be a single $120k car or a few $50-70k cars.  Generally allocation vehicles were a fairly standard color scheme and option list. There was a 90 day floor plan provided by the manufacturer.  I don’t know if that happens with boat manufacturers as well, but given how product moved I wouldn’t be surprised if that went away in the last two years. But, money was also cheap during that same timeframe, so perhaps they did float the dealers a bit.  

 I could easily see being allocated a 26LSV if you’ve sold some M models, MXZs, or some 25LSVs. If you are only selling 21-22’ boats because nearby lakes have length limits, I can see dealers being pissed about a 25-26’ showing up.  I really want to see what dealer agreements look like for Malibu.