Malibu Boats, Inc. (NASDAQ:MBUU), a leading manufacturer of recreational boats, announced important corporate developments following its annual shareholders meeting held on October 23, 2024. The company’s shareholders approved the company’s 2024 Performance Incentive Plan. Malibu Boats, Inc. and ratified the amendments to its bylaws.
The 2024 Performance Incentive Plan, designed to replace the existing Long-Term Incentive Plan, was previously approved by the Board of Directors, subject to shareholder approval. The new plan allows stock awards to be granted up to a maximum of 1,020,000 common shares of the company. It also includes provisions for additional actions based on the expiration, cancellation or forfeiture of awards under the above plan. Participants eligible for these stock awards include directors, officers, employees, certain consultants and advisors of Malibu Boats and its affiliates.
In addition to the incentive plan, the company’s bylaws were amended to simplify advance notice provisions for shareholder proposals and director nominations. The amendments eliminate the requirement to disclose certain compensatory and monetary arrangements and establish that only the Board of Directors may use a white proxy card to request proxies, reserving other colors for use by shareholders.
During the annual meeting, shareholders also voted on several key proposals. Three Class II directors were elected to serve until the 2027 annual meeting. The appointment of KPMG LLP as an independent registered public accounting firm for the fiscal year ending June 30, 2025 was ratified. In addition, shareholders approved, of non-binding and advisory manner, the compensation of the company’s named executives.
The changes to the bylaws and the approval of the new 2024 Performance Incentive Plan reflect Malibu Boats’ commitment to aligning the interests of its leadership with those of its shareholders and ensuring good corporate governance practices. The information disclosed is based on the company’s recent filing with the SEC.
In other recent news, Malibu Boats has reached a settlement agreement with the Chapter 11 Bankruptcy Trustee for Tommy’s Fort Worth, LLC and its affiliated debtors. The settlement includes Malibu Boats’ commitment to pay $3.5 million in cash to the debtors’ estate. This settlement, which requires approval by the United States Bankruptcy Court for the Northern District of Texas, is expected to provide a clear resolution to the ongoing legal issues.
In addition to the deal, Malibu Boats announced changes to the board, with Joan M. Lewis deciding not to run for re-election. This will reduce the number of directors from ten to nine. The company’s fourth-quarter 2024 earnings report revealed a decline in net sales, gross profit, and adjusted EBITDA. However, despite these challenges, the company generated positive free cash flow, repaid all remaining debt, and repurchased $10 million worth of stock.
Research firms DA Davidson and KeyBanc Capital Markets have maintained a positive outlook on Malibu Boats. DA Davidson confirmed a Buy rating and a $45.00 price target, while KeyBanc maintained its Overweight rating with a stable $38.00 price target. These ratings follow Malibu Boats’ strategic decision to reduce production in fiscal 2024 to normalize channel inventory. Looking ahead, the company plans to introduce new models across all brands in fiscal 2025.
InvestingPro Insights
Malibu Boats’ recent corporate developments are complemented by several key financial insights from InvestingPro. Despite the company’s recent challenges, including a significant revenue decline of 40.29% in the last twelve months, there are some positive indicators. InvestingPro advice reveals that Malibu Boats has more cash than debt on its balance sheet, suggesting a strong liquidity position. This is supported by the fact that the company’s liquid assets exceed its short-term obligations.
Although the company was not profitable in the last twelve months, analysts predict that Malibu Boats will return to profitability this year. This aligns with other advice from InvestingPro that net profit is expected to grow. However, investors should note that the company suffers from weak gross profit margins, which could impact its financial performance.
For those interested in a deeper analysis, InvestingPro offers 5 additional tips for Malibu Boats, providing a more complete view of the company’s financial health and prospects.
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