Malibu Boats Inc. is working on an expansion of Pursuit boats’ Florida plant after closing on the acquisition in October.
“The key to unlocking the power of Pursuit is increasing production capacity, which will allow us to meet all our current dealers’ needs fully, significantly expand the distribution base, and aggressively bring new product to market,” said Malibu CEO Jack Springer on a conference call with analysts to discuss second-quarter results.
“Although this will take time, as we have said, 12 to 18 months, we began diligently working on this even before the acquisition was completed,” said Springer. “We have already acquired the land and are working on the permitting process for additional capacity.”
The company is investing somewhere in the $10 to $15 million range for the 200,000-square-foot expansion.
“The short of it is, we’re going through a big, long permitting process that we think we have a good traction on,” said CFO Wayne Wilson. “But it’s kind of in that stage where we have a general ballpark, but not specificity with respect to the numbers.”
Vertical integration at Malibu and Axis has been a competitive advantage, particularly with the integration of Malibu’s new engines, said Springer.
“The 25 LSV in September was the first boat to receive the new engine, but we have now rolled out the Malibu Monsoon to several models and will continue to expand to 100 percent of our Malibu and Axis product lineup by the beginning of fiscal year 2020,” said Springer.
“Vertical integration is also a competitive advantage by allowing us to control the product from concept through production and provide value to the customer by improving quality while reducing cost,” said Springer. “At Cobalt, we are seeing the benefits as we apply our operational playbook and increase efficiency. As I said earlier, we were able to increase the throughput at Cobalt with the existing footprint by reorganizing the flow and build processes in the factory.”
The company recently announced an expansion of the Cobalt manufacturing facility in Neodesha, Kansas, that will allow the company to expand capacity, enhance the process flow to maximize efficiency, “much like what we did with Malibu in 2012 in a multi-phased approach,” said Springer.
“Our successful vertical integration strategy will be extended to both Cobalt and Pursuit, providing us with opportunities to further enhance shareholder value,” he said.