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Based in Loudon, TN, Malibu Boats (MBUU) scheduled a $100 million IPO on the Nasdaq with a market capitalization of $314 million at a price range midpoint of $14 for Friday, January 31, 2014.

The full IPO calendar is available at IPOpremium.com

SEC Documents

Manager, Joint Managers: Raymond James and Wells Fargo Securities

Co-Managers: SunTrust Robinson Humphrey, BMO Capital Markets

End of lockup (180 days): July 30, 2014

Summary

MBUU is the number one company in the performance boat category. That category was much larger in the 2001-2006 time frame (see chart below).

MBUU's market share has increased since new management took over in 2008. MBUU has a 30% share now of the performance boat category, and that category is growing faster than the overall boat market.

Valuation

Glossary

Valuation Ratios

Mrkt

Price /

Price /

Price /

Price /

% offered

June fiscal yr because seasonal

Cap (MM)

Sls

Erngs

BkVlue

TanBV

in IPO

Malibu Boats

$314

1.9

17.4

8.7

22.2

32%

Conclusion

MBUU is priced at 17.4 times earnings for the year ended June 30, 2013, and results show growth for the six months ended December 2013 (see below).

Based on MBUU's leading market position and continued growth, MBUU is a buy on the IPO, and perhaps in the aftermarket.

To put the conclusions and observations in context, the following is reorganized, edited and summarized from the full S-1 referenced above:

Comparison of the Six Months Ended December 31, 2013 to the Six Months Ended December 31, 2012

Net Sales

MBUU expects to report net sales between $86.9 million and $87.2 million for the six months ended December 31, 2013, compared to net sales of $71.0 million for the six months ended December 31, 2012, representing an increase of 22.4% to 22.9%.

The increase in net sales is primarily attributable to an increase in unit sales volume as well as a higher average price per boat.

MBUU expects to report an increase in unit sales volume of 14.9%, from 1,151 boats for the six months ended December 31, 2012, to 1,322 boats for the six months ended December 31, 2013, driven by increased dealer demand for an expanded product offering.

Adjusted EBITDA

MBUU expects to report adjusted EBITDA between $16.4 million and $16.9 million for the six months ended December 31, 2013, compared to adjusted EBITDA of $12.3 million for the six months ended December 31, 2012, representing an increase of 32.9% to 37.6%

Business

MBUU is a leading designer, manufacturer and marketer of performance sport boats, having the #1 market share position in the United States since 2010.

MBUU's boats are used for water sports, including water skiing, wakeboarding and wake surfing, as well as general recreational boating.

Since inception in 1982, MBUU has been a consistent innovator in the powerboat industry, designing 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.

MBUU believes many of its innovations, such as its proprietary Surf Gate technology launched in 2012, expand the market for MBUU's products by introducing consumers to new and exciting recreational activities.

MBUU believes that its boats are increasingly versatile, allowing consumers to use them for a wide range of activities that enhance the experience of a day on the water with family and friends.

While there is no guarantee that MBUU will achieve market share growth in the future, it believes that the performance, quality, value and multi-purpose features of its boats position MBUU to achieve its goal of increasing its market share in the expanding recreational boating market.

MBUU sells its boats through a dealer network that, it believes, is the strongest in the performance sport boat category. As of September 30, 2013, MBUU's distribution channel consisted of 116 independent dealers in North America operating 139 locations and 49 independent dealer locations across 36 countries outside of North America.

Market

While the performance sport boat category grew 13% in 2012, new unit sales remained significantly below historical peaks. As illustrated in the chart below, the 5,500 new units sold in 2012 were 53% below the average annual new unit sales volume of 11,714 observed between 2001 and 2007 and 58% below the 13,100 new units sold in 2006.

While there is no guarantee that the market will continue to grow or return to historical sales levels, MBUU believes the market is in the early stages of a recovery that presents significant opportunity for growth.

Market Position

MBUU held the number one market share position, based on unit volume, in the United States among manufacturers of performance sport boats for 2010, 2011, 2012 and the nine months ended September 30, 2013. MBUU has grown U.S. market share from 23.2% in 2008, the year prior to the arrival of the current chief executive officer and chief financial officer, to 30.6% in 2012.

Performance Sport Boat Category Taking Share

As the recovery in the general economy and overall powerboat industry has continued, the performance sport boat category in which MBUU participates has experienced one of the highest growth rates.

New unit sales of performance sport boats in the United States increased by 13% from 2011 to 2012, while new unit sales of all other powerboats in the United States increased 10% over the same period.

This trend continued in 2013, as new unit sales of performance sport boats and all other powerboats in the United States increased by 11% and 2%, respectively, during the nine months ended September 30, 2013

Growth plan

MBUU intends to continue to add dealers in new territories in the United States as well as internationally, which MBUU believes will result in increased unit sales.

Seasonal

MBUU's dealers are exposed to seasonal variations in consumer demand for boats.

Intellectual property

MBUU currently holds 13 U.S. patents, with two additional patents in Canada and Australia, and has seven patents pending (12 patent applications are pending in various countries including the United States, Canada, Australia and Europe).

Competition

The powerboat industry, including the performance sport boat category, is highly competitive for consumers and dealers.

Competition affects MBUU's ability to succeed in the markets it currently serves and new markets that MBUU may enter in the future. MBUU competes with several large manufacturers that may have greater financial, marketing and other resources than it does.

MBUU competes with large manufacturers that are represented by dealers in the markets in which MBUU now operates and into which it plans to expand.

MBUU also competes with a wide variety of small, independent manufacturers. Competition in MBUU's industry is based primarily on brand name, price and product performance.

5% stockholders

Entities affiliated with Black Canyon Capital 100%

Use of proceeds

MBUU expects to net $87.8 million from its IPO. Proceeds are allocated as follows:

to pay down all of the amounts owed on MBUU's credit facilities and term loans in an amount equal to $63.4 million

to pay Malibu Boats Investor, LLC, an affiliate, a fee of $3.75 million upon the consummation of this offering in connection with the termination of MBUU's management agreement, and

for other general corporate purposes.

Disclaimer: This MBUU IPO report is based on a reading and analysis of MBUU's S-1 filing, which can be found here, and a separate, independent analysis by IPOdesktop.com. There are no unattributed direct quotes in this article.

Source: IPO Preview: Malibu Boats