Malibu Boats Profile
Malibu Boats, Inc. operates as a designer, manufacturer, and marketer of a diverse range of recreational powerboats, including performance sport boats, sterndrive and outboard boats under eight brands—Malibu, Axis, Pursuit, Maverick, Cobia, Pathfinder, Hewes and Cobalt.
The company has the #1 market share position in the United States in the performance sport boat category through the company’s Malibu and Axis brands and the #1 market share position in the United States in the 24’—29’ segment of the sterndrive category through the company’s Cobalt brand, and the company is among the leading market share positions in the fiberglass outboard fishing boat market with the company’s Pursuit and Maverick Boat Group brands. The company’s 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. The company’s passion for consistent innovation, which has led to propriety technology, such as Surf Gate, has allowed the company to expand the market for the company’s products by introducing consumers to new and exciting recreational activities. The company designs 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.
The company’s flagship Malibu boats are designed for consumers seeking a premium performance sport boat experience and offer the company’s latest innovations in performance, comfort and convenience. The company’s 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. The company’s Pursuit boats expand the company’s product offerings into the saltwater outboard fishing market and include center console, dual console and offshore models. The company’s Maverick Boat Group family of boats, including Maverick, Cobia, Pathfinder and Hewes, are highly complementary to Pursuit and its saltwater outboard offerings with a focus in length segments under 30 feet. The company’s Cobalt boats consist of mid to large-sized luxury cruisers and bowriders that offer the ultimate experience in comfort, performance and quality.
The company’s boats are constructed of fiberglass, available in a range of sizes, hull designs and propulsion systems (i.e., inboard, sterndrive and outboard). The company employs experienced product development and engineering teams that enable the company to offer a range of models across each of the company’s brands while consistently introducing innovative features in the company’s product offerings. The company’s engineering teams closely collaborate with its manufacturing personnel in order to improve product quality and process efficiencies.
The company sells its boats through a dealer network that is the strongest in the recreational powerboat industry. As of June 30, 2023, the company’s distribution channel consisted of over 400 dealer locations globally. The company’s dealer base is an important part of its consumers’ experience, the company’s marketing efforts and its brands.
Products and Brands
The company designs, manufactures and sells recreational powerboats, including performance sport boats, sterndrive and outboard boats across eight brands: Malibu, Axis, Pursuit, Maverick, Cobia, Pathfinder, Hewes, and Cobalt. The company delivers superior performance for general recreational purposes with a significant focus on water sports, including wakeboarding, water skiing and wake surfing, as well as general recreational boating and fishing. In addition, the company offers various accessories and aftermarket parts. The following table provides an overview of the company’s product offerings by brand as of June 30, 2023:
Malibu segment
Malibu: Malibu targets consumers seeking a premium boating experience with the company’s latest innovations in performance, comfort and convenience. Across the company’s three product lines, the company offers a variety of products to customers from its Response Series tailored for high-performance water ski to highly customizable options in the company’s Wakesetter series to the company’s ultra premium models in the M Series.
Axis: Axis was formed to target a younger demographic by providing a more affordably priced, high quality, entry-level boat with high performance, functional simplicity and the option to upgrade key features, such as Surf Gate.
Saltwater Fishing segment
Pursuit: Pursuit is a premium brand of saltwater outboard fishing boats available in three product lines, including the company’s sports center consoles, dual consoles and the company’s offshore series to provide customers with options for ideal fishing, as well as casual cruising and luxury entertainment.
Cobia: Cobia models consist of center console and dual console vessels that are designed to promote ease of boating and fishing for all levels of anglers and boaters.
Pathfinder: Pathfinder provides the most versatile inshore fishing boat. The product of bay boats provides for dedicated anglers to fish and do so with comfort, safety and proven technology.
Maverick and Hewes: Maverick and Hewes have been designed to tailor to shallow inshore flats anglers. These boats, with vacuum infused (VARIS) construction and enhanced performance, provide a legacy of dependability, unmatched ride, and exceptional craftsmanship.
Cobalt segment
Cobalt: Cobalt is a premium luxury sterndrive and outboard boat manufacturer available in five product lines. The company’s products tailor sterndrive from entry level to premium with options to expand some models with the patented Surf Gate, as well as the company’s outboard series for increased saltwater use.
Innovative Features
In addition to the standard features included on all of the company’s boats, the company offers consumers a full selection of innovative optional features designed to enhance performance, functionality and the overall boating experience. Among the company’s most successful and most innovative has been Surf Gate. Introduced in July 2012 and initially patented in September 2013, Surf Gate is available as an optional feature on all Malibu, Axis and certain Cobalt models. Surf Gate has revolutionized the increasingly popular sport of wake surfing. Prior to Surf Gate, boaters needed to empty ballast tanks on one side of the boat and shift passengers around to lean the boat to create a larger, more pronounced surf-quality wake. By employing precisely engineered and electronically controlled panels, Surf Gate alleviates this time-consuming and cumbersome process, allowing boaters to easily surf behind an evenly weighted boat without the need to wait for ballast changes. The company has also developed is patented Surf Band technology that allows the rider to remotely control the surf wave, shape, size and side. Some of the company’s other notable innovations include Power Wedge III, G5 and the power actuated G10+ Tower, Electronic Dashboard Controls, Flip Down Swim Step, Tower Mister, Splash and Stow and Cobalt's TruWave Technology. Pursuit also has introduced the industry first Electric Sliding Entertainment Center and sliding second row center console seating.
The company also offers an array of less technological, but nonetheless value-added boat features, such as gelcoat upgrades, upholstery upgrades, engine drivetrain enhancements (such as silent exhaust tips, propeller upgrades and closed cooling engine configuration), sound system upgrades, bimini tops, boat covers and trailers which further increase the level of customization afforded to consumers.
Dealer Network
The company relies on independent dealers to sell its products.
North America
As of June 30, 2023, the company’s dealer network consisted of over 300 dealer locations servicing the performance sport boat, sterndrive, and outboard markets strategically located throughout the U.S. and Canada. Sales to the company’s dealers under common control of OneWater Marine, Inc. represented approximately 17.2% of consolidated net sales in fiscal year 2023 (year ended June 30, 2023), including approximately 6.5%, 29.5% and 20.7% of consolidated sales in fiscal year 2023 for Malibu, Saltwater Fishing and Cobalt, respectively. Sales to the company’s dealers under common control of Tommy's Boats represented approximately 10.7% of the company’s consolidated net sales in the year ended June 30, 2023, including approximately 23.3%, 0.0% and 0.9% of consolidated sales in fiscal year 2023 for Malibu, Saltwater Fishing and Cobalt, respectively.
International
The company has an extensive international distribution network for the company’s Malibu, Axis, Pursuit, Maverick Boat Group and Cobalt brands. As of June 30, 2023, the company’s dealer network consisted of over 100 dealer locations throughout Europe, Asia, the Middle East, South America, South Africa, and Australia/New Zealand.
Suppliers
Through the company’s vertical integration initiative to marinize the company’s own engines, the company entered into an engine supply agreement with General Motors LLC (‘General Motors’) in November 2016 for the supply of engine blocks to use in the company’s Malibu and Axis brand boats, which began in the company’s model year 2019 and continued through model year 2023. In April 2023, the company signed a new supply agreement with General Motors that will continue through model year 2026.
Pursuant to the company’s engine supply agreement with General Motors, General Motors will deliver engines to the company as it submits purchase orders. The engine supply agreement will expire at the end of production of model year 2026, unless terminated earlier by either party as permitted under the terms of the agreement, including by General Motors due to market conditions with at least eighteen (18) months’ advanced written notice.
The company had joint marketing agreements with Yamaha Motor Corporation, U.S.A., or Yamaha, that required the company to supply a significant percentage of the company’s Pursuit, Cobalt and Maverick Boat Group branded boats that are pre-rigged for outboard motors with Yamaha outboard motors in exchange for certain incentives. Those agreements expired on June 30, 2023. The company is in discussions with Yamaha and expects to extend its agreement with Yamaha to supply outboard motors to a significant percentage of the company’s Pursuit, Cobalt and Maverick Boat Group branded boats that are pre-rigged for outboard motors. Yamaha has continued to supply outboard motors to the company since its prior agreements expired.
Strategic Acquisitions
One of the company’s growth strategies is to drive growth in its business through targeted acquisitions that add value while considering the company’s existing brands and product portfolio.
Intellectual Property
Some of the company’s well-known patents include the company’s Surf Gate and Swim Step for the company’s Malibu and Cobalt segments and Power Wedge for the company’s Malibu segment.
Some of the company’s well-known trademarks include for the company’s Malibu segment, Malibu, Axis, Monsoon, Power Wedge, Surf Band, Surf Gate, and Wakesetter; for the company’s Saltwater Fishing Segment, Pursuit, Cobia, Maverick, and Redfisher; and for the company’s Cobalt segment, Cobalt and Splash & Stow.
Seasonality
The company’s dealers experience seasonality in their business. Retail demand for boats is seasonal, with a significant majority of sales occurring during peak boating season, which coincides with the company’s first and fourth fiscal quarters (year ended June 2023). In order to minimize the impact of this seasonality on the company’s business, the company manages its manufacturing processes and structure dealer incentives to tie the company’s annual volume rebates program to consistent ordering patterns, encouraging dealers to purchase the company’s products throughout the year.
Safety and Regulatory Matters
Certain materials used in the company’s manufacturing, including the resins used in production of the company’s boats, are toxic, flammable, corrosive, or reactive and are classified as hazardous materials by the national, state and local governments in those jurisdictions where the company manufactures its products. The handling, storage, release, treatment, and recycling or disposal of these substances and wastes from the company’s operations are regulated in the United States by the United States Environmental Protection Agency (‘EPA’), and state and local environmental agencies. In the United States, handling, storage, release, treatment, and recycling or disposal of hazardous materials is regulated under Subtitle C of the Resource Conservation and Recovery Act (‘RCRA’). The handling, storage, release, treatment and recycling or disposal of these substances and wastes from the company’s operations are regulated in Australia by the Australian Department of Climate Change, Energy, the Environment and Water, the New South Wales Environmental Protection Authority and other state and local authorities.
Because the company’s manufacturing operations involve molding and coating of fiberglass materials, which involves the emission of certain volatile organic compounds, hazardous air pollutants, and particulate matter, the company is required to maintain and comply with a CAA operating permit requirements under Title V of the CAA (‘Part 70 Permits’) for the company’s Tennessee, Kansas and Florida facilities and local air permits for the company’s California facilities.
The EPA and the California Air Resources Board (‘CARB’) have, under the CAA, adopted regulations stipulating that many marine propulsion engines and watercraft meet certain air emission standards. Some of these standards require fitting a catalytic converter to the engine. These regulations also require, among other things, that engine manufacturers provide a warranty that their engines meet EPA and CARB emission standards. The engines used in the company’s products are subject to these regulations.
While the company’s boats meet all applicable emission standards, the USEPA and CARB emissions regulations have increased the cost to manufacture the company’s products. The company’s facilities are regularly inspected by OSHA and by state and local inspection agencies and departments. The company’s California facilities are also subject to California indoor air quality regulations, overseen by California’s Division of Occupational Safety and Health.
In the United States, the U.S. Coast Guard promulgates regulations related to the minimum construction and safety requirements for recreational boats. In addition, boats manufactured for sale in the European Community must be certified to meet the requirements of the applicable laws and standards, including Directive 2013/53/EU on recreational craft and personal watercraft. These certifications specify standards for the design and construction of powerboats. All of the company’s boats meet these standards.
History
Malibu Boats, Inc. was founded in 1982. The company was incorporated as a Delaware corporation in 2013.
