Delaware | 5075 Kimberly Way Loudon, Tennessee 37774 | 46-4024640 | ||
(State or other jurisdiction of incorporation or organization) | (Address of principal executive offices, including zip code) | (I.R.S. Employer Identification No.) | ||
(865) 458-5478 | ||||
(Registrant’s telephone number, including area code) |
Large accelerated filer | ¨ | Accelerated filer | þ | |||
Non-accelerated filer | ¨ (Do not check if a smaller reporting company) | Smaller reporting company | ¨ | |||
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). | ||||||
Yes ¨ No þ |
Class A Common Stock, par value $0.01, outstanding as of January 31, 2017: | 17,831,256 | shares | |
Class B Common Stock, par value $0.01, outstanding as of January 31, 2017: | 20 | shares |
Page | ||
Three Months Ended December 31, | Six Months Ended December 31, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Net sales | $ | 67,661 | $ | 60,506 | $ | 129,682 | $ | 117,746 | |||||||
Cost of sales | 49,848 | 44,627 | 96,046 | 87,157 | |||||||||||
Gross profit | 17,813 | 15,879 | 33,636 | 30,589 | |||||||||||
Operating expenses: | |||||||||||||||
Selling and marketing | 2,150 | 2,162 | 4,573 | 4,424 | |||||||||||
General and administrative | 3,453 | 4,193 | 9,517 | 8,819 | |||||||||||
Amortization | 549 | 545 | 1,099 | 1,092 | |||||||||||
Operating income | 11,661 | 8,979 | 18,447 | 16,254 | |||||||||||
Other (expense) income: | |||||||||||||||
Other | 58 | 17 | 75 | 24 | |||||||||||
Interest expense | (37 | ) | (362 | ) | (467 | ) | (1,678 | ) | |||||||
Other income (expense) | 21 | (345 | ) | (392 | ) | (1,654 | ) | ||||||||
Income before provision for income taxes | 11,682 | 8,634 | 18,055 | 14,600 | |||||||||||
Provision for income taxes | 3,945 | 2,916 | 6,092 | 4,902 | |||||||||||
Net income | 7,737 | 5,718 | 11,963 | 9,698 | |||||||||||
Net income attributable to non-controlling interest | 836 | 614 | 1,282 | 1,036 | |||||||||||
Net income attributable to Malibu Boats, Inc. | $ | 6,901 | $ | 5,104 | $ | 10,681 | $ | 8,662 | |||||||
Comprehensive income: | |||||||||||||||
Net income | $ | 7,737 | $ | 5,718 | $ | 11,963 | $ | 9,698 | |||||||
Other comprehensive income (loss), net of tax: | |||||||||||||||
Change in cumulative translation adjustment | (846 | ) | 608 | (489 | ) | (649 | ) | ||||||||
Other comprehensive income (loss), net of tax | (846 | ) | 608 | (489 | ) | (649 | ) | ||||||||
Comprehensive income, net of tax | 6,891 | 6,326 | 11,474 | 9,049 | |||||||||||
Less: comprehensive income attributable to non-controlling interest, net of tax | 746 | 679 | 1,230 | 968 | |||||||||||
Comprehensive income attributable to Malibu Boats, Inc., net of tax | $ | 6,145 | $ | 5,647 | $ | 10,244 | $ | 8,081 | |||||||
Weighted average shares outstanding used in computing net income per share: | |||||||||||||||
Basic | 17,786,122 | 17,986,517 | 17,760,256 | 17,964,300 | |||||||||||
Diluted | 17,842,138 | 18,022,288 | 17,817,842 | 18,018,615 | |||||||||||
Net income available to Class A Common Stock per share: | |||||||||||||||
Basic | $ | 0.39 | $ | 0.28 | $ | 0.60 | $ | 0.48 | |||||||
Diluted | $ | 0.39 | $ | 0.28 | $ | 0.60 | $ | 0.48 |
December 31, 2016 | June 30, 2016 | ||||||
Assets | |||||||
Current assets | |||||||
Cash | $ | 25,909 | $ | 25,921 | |||
Trade receivables, net | 8,110 | 14,690 | |||||
Inventories, net | 23,412 | 20,431 | |||||
Prepaid expenses and other current assets | 2,227 | 2,707 | |||||
Income tax receivable | 36 | 965 | |||||
Total current assets | 59,694 | 64,714 | |||||
Property and equipment, net | 21,665 | 17,813 | |||||
Goodwill | 12,253 | 12,470 | |||||
Other intangible assets, net | 10,516 | 11,703 | |||||
Deferred tax assets | 111,622 | 113,798 | |||||
Other assets | 30 | 32 | |||||
Total assets | $ | 215,780 | $ | 220,530 | |||
Liabilities | |||||||
Current liabilities | |||||||
Current maturities of long-term debt | $ | — | $ | 8,000 | |||
Accounts payable | 14,242 | 16,158 | |||||
Accrued expenses | 19,972 | 19,055 | |||||
Income taxes and tax distribution payable | 1,254 | 427 | |||||
Payable pursuant to tax receivable agreement, current portion | 4,189 | 4,189 | |||||
Total current liabilities | 39,657 | 47,829 | |||||
Deferred tax liabilities | 621 | 685 | |||||
Payable pursuant to tax receivable agreement, less current portion | 89,896 | 89,561 | |||||
Long-term debt, less current maturities | 55,092 | 63,086 | |||||
Other long-term liabilities | 302 | 1,136 | |||||
Total liabilities | 185,568 | 202,297 | |||||
Commitments and contingencies (See Note 13) | |||||||
Stockholders' Equity | |||||||
Class A Common Stock, par value $0.01 per share, 100,000,000 shares authorized; 17,831,256 shares issued and outstanding as of December 31, 2016; 17,690,874 issued and outstanding as of June 30, 2016 | 178 | 176 | |||||
Class B Common Stock, par value $0.01 per share, 25,000,000 shares authorized; 20 shares issued and outstanding as of December 31, 2016; 23 shares issued and outstanding as of June 30, 2016 | — | — | |||||
Preferred Stock, par value $0.01 per share; 25,000,000 shares authorized; no shares issued and outstanding as of December 31, 2016 and June 30, 2016 | — | — | |||||
Additional paid in capital | 46,168 | 44,151 | |||||
Accumulated other comprehensive loss | (2,960 | ) | (2,471 | ) | |||
Accumulated deficit | (17,659 | ) | (28,302 | ) | |||
Total stockholders' equity attributable to Malibu Boats, Inc. | 25,727 | 13,554 | |||||
Non-controlling interest | 4,485 | 4,679 | |||||
Total stockholders’ equity | 30,212 | 18,233 | |||||
Total liabilities and stockholders' equity | $ | 215,780 | $ | 220,530 |
Class A Common Stock | Class B Common Stock | Additional Paid In Capital | Accumulated Other Comprehensive Loss | Accumulated Deficit | Non-controlling Interest in LLC | Total Stockholders' Equity | ||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||||||||||||||
Balance at June 30, 2016 | 17,690 | $ | 176 | 23 | $ | — | $ | 44,151 | $ | (2,471 | ) | $ | (28,302 | ) | $ | 4,679 | $ | 18,233 | ||||||||||||||
Net income | — | — | — | — | — | — | 10,681 | 1,282 | 11,963 | |||||||||||||||||||||||
Stock based compensation, net of withholding taxes on vested equity awards | 89 | 1 | — | — | 578 | — | — | — | 579 | |||||||||||||||||||||||
Issuances of equity for services | 6 | — | — | — | 626 | — | — | — | 626 | |||||||||||||||||||||||
Increase in payable pursuant to the tax receivable agreement | — | — | — | — | (335 | ) | — | — | — | (335 | ) | |||||||||||||||||||||
Increase in deferred tax asset from step-up in tax basis | — | — | — | — | 383 | — | — | — | 383 | |||||||||||||||||||||||
Exchange of LLC Units for Class A Common Stock | 46 | 1 | — | — | 765 | — | — | (765 | ) | 1 | ||||||||||||||||||||||
Cancellation of Class B Common Stock | — | — | (3 | ) | — | — | — | — | — | — | ||||||||||||||||||||||
Distributions to LLC Unit holders | — | — | — | — | — | — | (38 | ) | (711 | ) | (749 | ) | ||||||||||||||||||||
Foreign currency translation adjustment | — | — | — | — | — | (489 | ) | — | — | (489 | ) | |||||||||||||||||||||
Balance at December 31, 2016 | 17,831 | $ | 178 | 20 | $ | — | $ | 46,168 | $ | (2,960 | ) | $ | (17,659 | ) | $ | 4,485 | $ | 30,212 |
Six Months Ended December 31, | |||||||
2016 | 2015 | ||||||
Operating activities: | |||||||
Net income | $ | 11,963 | $ | 9,698 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Non-cash compensation expense | 745 | 1,005 | |||||
Depreciation | 1,994 | 1,616 | |||||
Amortization of intangible assets | 1,099 | 1,092 | |||||
Gain on sale-leaseback transaction | (6 | ) | (5 | ) | |||
Amortization of deferred financing costs | 123 | 124 | |||||
Change in fair value of interest rate swap | (825 | ) | 175 | ||||
Deferred income taxes | 2,474 | 1,601 | |||||
Non-cash litigation payable | (1,330 | ) | — | ||||
Gain on sale of equipment | (16 | ) | — | ||||
Change in operating assets and liabilities: | |||||||
Trade receivables | 6,570 | 320 | |||||
Inventories | (3,140 | ) | (4,090 | ) | |||
Prepaid expenses and other assets | 977 | (1,081 | ) | ||||
Accounts payable | (2,364 | ) | 3,484 | ||||
Income taxes receivable and payable | 1,630 | (558 | ) | ||||
Accrued expenses and other liabilities | 2,353 | 190 | |||||
Net cash provided by operating activities | 22,247 | 13,571 | |||||
Investing activities: | |||||||
Purchases of property and equipment | (5,443 | ) | (3,531 | ) | |||
Proceeds from sale or disposal of property, plant and equipment | 16 | — | |||||
Net cash used in investing activities | (5,427 | ) | (3,531 | ) | |||
Financing activities: | |||||||
Principal payments on long-term borrowings | (16,117 | ) | (3,000 | ) | |||
Cash paid for withholding taxes on vested restricted stock | (167 | ) | — | ||||
Distributions to LLC Unit holders | (621 | ) | (489 | ) | |||
Net cash used in financing activities | (16,905 | ) | (3,489 | ) | |||
Effect of exchange rate changes on cash | 73 | (21 | ) | ||||
Changes in cash | (12 | ) | 6,530 | ||||
Cash—Beginning of period | 25,921 | 8,387 | |||||
Cash—End of period | $ | 25,909 | $ | 14,917 | |||
Supplemental cash flow information: | |||||||
Cash paid for interest | $ | 1,162 | $ | 1,400 | |||
Cash paid for income taxes | 1,650 | 4,396 | |||||
Non-cash investing and financing activities: | |||||||
Establishment of deferred tax assets from step-up in tax basis | 383 | 142 | |||||
Establishment of amounts payable under tax receivable agreements | 335 | 118 | |||||
Exchange of LLC Units by LLC Unit holders for Class A common stock | 765 | 39 | |||||
Tax distributions payable to non-controlling LLC Unit holders | 469 | 389 | |||||
Equity issued to directors for services | 626 | 626 | |||||
Capital expenditures in accounts payable | 415 | 338 |
As of December 31, 2016 | As of June 30, 2016 | ||||||||||
Units | Ownership % | Units | Ownership % | ||||||||
Non-controlling LLC Unit holders ownership in Malibu Boats Holdings, LLC | 1,359,302 | 7.1 | % | 1,404,923 | 7.4 | % | |||||
Malibu Boats, Inc. ownership in Malibu Boats Holdings, LLC | 17,831,256 | 92.9 | % | 17,690,874 | 92.6 | % | |||||
19,190,558 | 100.0 | % | 19,095,797 | 100.0 | % |
Balance of non-controlling interest as of June 30, 2016 | $ | 4,679 | |
Allocation of income to non-controlling LLC Unit holders for period | 1,282 | ||
Distributions paid and payable to non-controlling LLC Unit holders for period | (711 | ) | |
Reallocation of non-controlling ownership interests in exchange for Class A Common Stock | (765 | ) | |
Balance of non-controlling interest as of December 31, 2016 | $ | 4,485 |
As of December 31, 2016 | As of June 30, 2016 | ||||||
Raw materials | $ | 16,499 | $ | 14,858 | |||
Work in progress | 2,329 | 1,250 | |||||
Finished goods | 4,584 | 4,323 | |||||
Total inventories | $ | 23,412 | $ | 20,431 |
As of December 31, 2016 | As of June 30, 2016 | |||||||
Land | $ | 367 | $ | 254 | ||||
Building and leasehold improvements | 10,150 | 7,168 | ||||||
Machinery and equipment | 21,339 | 20,035 | ||||||
Furniture and fixtures | 2,833 | 2,765 | ||||||
Construction in process | 1,715 | 356 | ||||||
36,404 | 30,578 | |||||||
Less: Accumulated depreciation | (14,739 | ) | (12,765 | ) | ||||
Property and equipment, net | $ | 21,665 | $ | 17,813 |
Goodwill as of June 30, 2016 | $ | 12,470 | |
Effect of foreign currency changes on goodwill | (217 | ) | |
Goodwill as of December 31, 2016 | $ | 12,253 |
As of December 31, 2016 | As of June 30, 2016 | Estimated Useful Life (in years) | Weighted Average Remaining Useful Life (in years) | ||||||||
Reacquired franchise rights | $ | 1,296 | $ | 1,339 | 5 | 2.8 | |||||
Dealer relationships | 29,697 | 29,773 | 8-15 | 12.8 | |||||||
Patent | 1,386 | 1,386 | 12 | 1.6 | |||||||
Trade name | 24,667 | 24,667 | 15 | 4.7 | |||||||
Non-compete agreement | 50 | 52 | 10 | 7.8 | |||||||
Backlog | 90 | 93 | 0.3 | 0.0 | |||||||
Total | 57,186 | 57,310 | |||||||||
Less: Accumulated amortization | (46,670 | ) | (45,607 | ) | |||||||
Total other intangible assets, net | $ | 10,516 | $ | 11,703 |
Fiscal years ending June 30: | ||||
Remainder of 2017 | $ | 1,089 | ||
2018 | 2,178 | |||
2019 | 2,072 | |||
2020 | 1,884 | |||
2021 | 1,803 | |||
Thereafter | 1,490 | |||
$ | 10,516 |
Three Months Ended | Six Months Ended | |||||||||||||||
December 31, 2016 | December 31, 2015 | December 31, 2016 | December 31, 2015 | |||||||||||||
Beginning balance | $ | 8,733 | $ | 7,180 | $ | 8,083 | $ | 6,610 | ||||||||
Add: Warranty expense | 1,772 | 948 | 3,641 | 2,543 | ||||||||||||
Less: Warranty claims paid | (1,301 | ) | (952 | ) | (2,520 | ) | (1,977 | ) | ||||||||
Ending balance | $ | 9,204 | $ | 7,176 | $ | 9,204 | $ | 7,176 |
As of December 31, 2016 | As of June 30, 2016 | ||||||
Term loan | $ | 55,883 | $ | 72,000 | |||
Less unamortized debt issuance costs | (791 | ) | (914 | ) | |||
Total debt | 55,092 | 71,086 | |||||
Less current maturities | — | (8,000 | ) | ||||
Long term debt less current maturities | $ | 55,092 | $ | 63,086 |
December 31, 2016 | June 30, 2016 | ||||||
Beginning balance | $ | 93,750 | $ | 96,470 | |||
Additions to tax receivable agreement: | |||||||
Exchange of LLC Units for Class A Common Stock | 335 | 111 | |||||
Payments under tax receivable agreement | — | (2,831 | ) | ||||
94,085 | 93,750 | ||||||
Less current portion under tax receivable agreement | (4,189 | ) | (4,189 | ) | |||
Ending balance | $ | 89,896 | $ | 89,561 |
• | Level 1—Financial assets and financial liabilities whose values are based on unadjusted quoted prices in active markets for identical assets. |
• | Level 2—Financial assets and financial liabilities whose values are based on quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in non-active markets; or valuation models whose inputs are observable, directly or indirectly, for substantially the full term of the asset or liability. |
• | Level 3—Financial assets and financial liabilities whose values are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. These inputs reflect the Company’s estimates of the assumptions that market participants would use in valuing the financial assets and financial liabilities. |
Fair Value Measurements at Reporting Date Using | |||||||||||||||
Total | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||
As of December 31, 2016: | |||||||||||||||
Interest rate swap not designated as cash flow hedge | $ | 38 | $ | — | $ | 38 | $ | — | |||||||
Total liabilities at fair value | $ | 38 | $ | — | $ | 38 | $ | — | |||||||
As of June 30, 2016: | |||||||||||||||
Interest rate swap not designated as cash flow hedge | $ | 863 | $ | — | $ | 863 | $ | — | |||||||
Total liabilities at fair value | $ | 863 | $ | — | $ | 863 | $ | — |
Number of Restricted Stock Units and Restricted Stock Awards Outstanding | Weighted Average Grant Date Fair Value | |||||
Total Non-vested Restricted Stock Units as of June 30, 2016 | 140,908 | $ | 16.17 | |||
Granted | 166,169 | 15.47 | ||||
Vested | (68,310 | ) | (15.08 | ) | ||
Forfeited | (975 | ) | (20.18 | ) | ||
Total Non-vested Restricted Stock Units as of December 31, 2016 | 237,792 | $ | 15.98 |
Three Months Ended | Six Months Ended | ||||||||||||||
December 31, 2016 | December 31, 2015 | December 31, 2016 | December 31, 2015 | ||||||||||||
Basic: | |||||||||||||||
Net income attributable to Malibu Boats, Inc. | $ | 6,901 | $ | 5,104 | $ | 10,681 | $ | 8,662 | |||||||
Shares used in computing basic net income per share: | |||||||||||||||
Weighted-average Class A Common Stock | 17,648,208 | 17,891,875 | 17,634,530 | 17,880,640 | |||||||||||
Weighted-average participating restricted stock units convertible into Class A Common Stock | 137,914 | 94,642 | 125,726 | 83,660 | |||||||||||
Basic weighted-average shares outstanding | 17,786,122 | 17,986,517 | 17,760,256 | 17,964,300 | |||||||||||
Basic net income per share | $ | 0.39 | $ | 0.28 | $ | 0.60 | $ | 0.48 | |||||||
Diluted: | |||||||||||||||
Net income attributable to Malibu Boats, Inc. | $ | 6,901 | $ | 5,104 | $ | 10,681 | $ | 8,662 | |||||||
Shares used in computing diluted net income per share: | |||||||||||||||
Basic weighted-average shares outstanding | 17,786,122 | 17,986,517 | 17,760,256 | 17,964,300 | |||||||||||
Restricted stock units granted to employees | 56,016 | 35,771 | 57,586 | 54,315 | |||||||||||
Diluted weighted-average shares outstanding 1 | 17,842,138 | 18,022,288 | 17,817,842 | 18,018,615 | |||||||||||
Diluted net income per share | $ | 0.39 | $ | 0.28 | $ | 0.60 | $ | 0.48 |
Three Months Ended December 31, 2016 | Six Months Ended December 31, 2016 | ||||||||||||||||||||||||||||||
U.S. | Australia | Eliminations | Total | U.S. | Australia | Eliminations | Total | ||||||||||||||||||||||||
Net sales | $ | 63,672 | $ | 6,173 | $ | (2,184 | ) | $ | 67,661 | $ | 122,440 | $ | 11,668 | $ | (4,426 | ) | $ | 129,682 | |||||||||||||
Affiliate (or intersegment) sales | 2,184 | — | (2,184 | ) | — | 4,426 | — | (4,426 | ) | — | |||||||||||||||||||||
Net sales to external customers | 61,488 | 6,173 | — | 67,661 | 118,014 | 11,668 | — | 129,682 | |||||||||||||||||||||||
Income (loss) before provision for income taxes | 11,215 | 455 | 12 | 11,682 | 17,276 | 839 | (60 | ) | 18,055 | ||||||||||||||||||||||
Three Months Ended December 30, 2015 | Six Months Ended December 31, 2015 | ||||||||||||||||||||||||||||||
U.S. | Australia | Eliminations | Total | U.S. | Australia | Eliminations | Total | ||||||||||||||||||||||||
Net sales | $ | 57,006 | $ | 5,393 | $ | (1,893 | ) | $ | 60,506 | $ | 110,901 | $ | 10,163 | $ | (3,318 | ) | $ | 117,746 | |||||||||||||
Affiliate (or intersegment) sales | 1,893 | — | (1,893 | ) | — | 3,318 | — | (3,318 | ) | — | |||||||||||||||||||||
Net sales to external customers | 55,113 | 5,393 | — | 60,506 | 107,583 | 10,163 | — | 117,746 | |||||||||||||||||||||||
Income before provision for income taxes | 8,670 | 59 | (95 | ) | 8,634 | 14,459 | 117 | 24 | 14,600 |
As of December 31, 2016 | As of June 30, 2016 | ||||||
Assets | |||||||
U.S. | $ | 216,037 | $ | 220,817 | |||
Australia | 17,916 | 17,130 | |||||
Eliminations | (18,173 | ) | (17,417 | ) | |||
Total assets | $ | 215,780 | $ | 220,530 |
• | Gross sales from: |
• | Boat sales—consists of sales of boats to our dealer network. In addition, nearly all of our boat sales include optional feature upgrades purchased by the consumer, such as Surf Gate, which increase the average selling price of our boats; |
• | Trailers, parts and accessories sales—consists of sales of boat trailers and replacement and aftermarket boat parts and accessories to our dealer network; and |
• | Royalty income—consists of royalties attributable to license agreements with various boat manufacturers. |
• | Net sales are net of: |
• | Sales returns—primarily contractual repurchases of boats either repossessed by the floor plan financing provider from the dealer or returned by the dealer under our warranty program; and |
• | Rebates, free flooring and discounts—incentives, including rebates and free flooring, we provide to our dealers based on sales of eligible products. If a dealer meets its annual commitment volume as well as other terms of the rebate program, the dealer is entitled to a specified rebate. We implemented a new rebate program for model year 2017. Under the new program, if a dealer meets certain monthly and quarterly criteria based on the dealer's volume commitment, the dealer may be eligible for a specified rebate. Our dealers that take delivery of current model year boats in the offseason, typically July through April in the U.S., are entitled to have us pay the interest to floor the boat until the earlier of (1) the sale of the unit or (2) a date near the end of the current model year, which incentive we refer to as “free flooring.” |
Three Months Ended December 31, | Six Months Ended December 31, | ||||||||||||||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||||||||||||||
$ | % Revenue | $ | % Revenue | $ | % Revenue | $ | % Revenue | ||||||||||||||||||||
Net sales | 67,661 | 100.0 | % | 60,506 | 100.0 | % | 129,682 | 100.0 | % | 117,746 | 100.0 | % | |||||||||||||||
Cost of sales | 49,848 | 73.7 | % | 44,627 | 73.8 | % | 96,046 | 74.1 | % | 87,157 | 74.0 | % | |||||||||||||||
Gross profit | 17,813 | 26.3 | % | 15,879 | 26.2 | % | 33,636 | 25.9 | % | 30,589 | 26.0 | % | |||||||||||||||
Operating expenses: | |||||||||||||||||||||||||||
Selling and marketing | 2,150 | 3.2 | % | 2,162 | 3.6 | % | 4,573 | 3.5 | % | 4,424 | 3.8 | % | |||||||||||||||
General and administrative | 3,453 | 5.1 | % | 4,193 | 6.9 | % | 9,517 | 7.3 | % | 8,819 | 7.5 | % | |||||||||||||||
Amortization | 549 | 0.8 | % | 545 | 0.9 | % | 1,099 | 0.8 | % | 1,092 | 0.9 | % | |||||||||||||||
Operating income | 11,661 | 17.2 | % | 8,979 | 14.8 | % | 18,447 | 14.2 | % | 16,254 | 13.8 | % | |||||||||||||||
Other income (expense): | |||||||||||||||||||||||||||
Other | 58 | 0.1 | % | 17 | — | % | 75 | 0.1 | % | 24 | — | % | |||||||||||||||
Interest expense | (37 | ) | (0.1 | )% | (362 | ) | (0.6 | )% | (467 | ) | (0.4 | )% | (1,678 | ) | (1.4 | )% | |||||||||||
Other income (expense) | 21 | — | % | (345 | ) | (0.6 | )% | (392 | ) | (0.3 | )% | (1,654 | ) | (1.4 | )% | ||||||||||||
Income before provision for income taxes | 11,682 | 17.3 | % | 8,634 | 14.3 | % | 18,055 | 13.9 | % | 14,600 | 12.4 | % | |||||||||||||||
Provision for income taxes | 3,945 | 5.8 | % | 2,916 | 4.8 | % | 6,092 | 4.7 | % | 4,902 | 4.2 | % | |||||||||||||||
Net income | 7,737 | 11.4 | % | 5,718 | 9.5 | % | 11,963 | 9.2 | % | 9,698 | 8.2 | % | |||||||||||||||
Net income attributable to non-controlling interest | 836 | 1.2 | % | 614 | 1.0 | % | 1,282 | 1.0 | % | 1,036 | 0.9 | % | |||||||||||||||
Net income attributable to Malibu Boats, Inc. | 6,901 | 10.2 | % | 5,104 | 8.4 | % | 10,681 | 8.2 | % | 8,662 | 7.4 | % | |||||||||||||||
Three Months Ended December 31, | Six Months Ended December 31, | ||||||||||||||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||||||||||||||
Unit Volumes | % Total | Unit Volumes | % Total | Unit Volumes | % Total | Unit Volumes | % Total | ||||||||||||||||||||
Volume by Segment | |||||||||||||||||||||||||||
U.S. | 841 | 91.0 | % | 786 | 90.7 | % | 1,597 | 90.9 | % | 1,532 | 90.5 | % | |||||||||||||||
Australia | 83 | 9.0 | % | 81 | 9.3 | % | 160 | 9.1 | % | 160 | 9.5 | % | |||||||||||||||
Total units | 924 | 867 | 1,757 | 1,692 | |||||||||||||||||||||||
Volume by Brand | |||||||||||||||||||||||||||
Malibu | 664 | 71.9 | % | 591 | 68.2 | % | 1,241 | 70.6 | % | 1,125 | 66.5 | % | |||||||||||||||
Axis | 260 | 28.1 | % | 276 | 31.8 | % | 516 | 29.4 | % | 567 | 33.5 | % | |||||||||||||||
Total units | 924 | 867 | 1,757 | 1,692 | |||||||||||||||||||||||
Net sales per unit | $ | 73,226 | $ | 69,787 | $ | 73,809 | $ | 69,590 |
Three Months Ended December 31, | Six Months Ended December 31, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Net income | $ | 7,737 | $ | 5,718 | $ | 11,963 | $ | 9,698 | |||||||
Provision for income taxes | 3,945 | 2,916 | 6,092 | 4,902 | |||||||||||
Interest expense | 37 | 362 | 467 | 1,678 | |||||||||||
Depreciation | 1,026 | 841 | 1,994 | 1,616 | |||||||||||
Amortization | 549 | 545 | 1,099 | 1,092 | |||||||||||
Professional fees 1 | 917 | 48 | 1,986 | 218 | |||||||||||
Marine Power litigation judgment 2 | (1,330 | ) | — | (1,330 | ) | — | |||||||||
Acquisition and integration related expenses 3 | — | 71 | — | 401 | |||||||||||
Stock based compensation expense 4 | 280 | 665 | 745 | 1,005 | |||||||||||
Engine development 5 | 460 | — | 460 | — | |||||||||||
Adjusted EBITDA | $ | 13,621 | $ | 11,166 | $ | 23,476 | $ | 20,610 | |||||||
Adjusted EBITDA Margin | 20.1 | % | 18.5 | % | 18.1 | % | 17.5 | % |
(1) | Represents legal and advisory fees related to our litigation with MasterCraft Boat Company, LLC. For more information about the legal proceedings, refer to Note 13 of our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report. |
(2) | Represents the reduction in a one-time charge related to a judgment rendered against us in connection with a lawsuit by Marine Power where the court amended the judgment to $1.9 million. Please see Note 13 of our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report |
(3) | Represents legal and advisory fees as well as integration related costs incurred in connection with certain acquisition activities. |
(4) | Represents equity-based incentives awarded to key employees under the Malibu Boats, Inc. Long-Term Incentive Plan and profit interests issued under the previously existing limited liability company agreement of the LLC. For more information, see Note 11 to our unaudited condensed consolidated financial statements. |
(5) | Represents costs incurred in connection with our vertical integration of engines including product development costs and supplier transition performance incentives. |
Three Months Ended December 31, | Six Months Ended December 31, | |||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
Net income attributable to Malibu Boats, Inc. | $ | 6,901 | $ | 5,104 | $ | 10,681 | $ | 8,662 | ||||||||
Provision for income taxes | 3,945 | 2,916 | 6,092 | 4,902 | ||||||||||||
Professional fees 1 | 917 | 48 | 1,986 | 218 | ||||||||||||
Acquisition and integration related expenses 2 | — | 71 | — | 401 | ||||||||||||
Fair market value adjustment for interest rate swap 3 | (580 | ) | (382 | ) | (825 | ) | 175 | |||||||||
Stock based compensation expense 4 | 280 | 665 | 745 | 1,005 | ||||||||||||
Marine Power litigation judgment 5 | (1,330 | ) | — | (1,330 | ) | — | ||||||||||
Engine development 6 | 460 | — | 460 | — | ||||||||||||
Net income attributable to non-controlling interest 7 | 836 | 614 | 1,282 | 1,036 | ||||||||||||
Fully distributed net income before income taxes | 11,429 | 9,036 | 19,091 | 16,399 | ||||||||||||
Income tax expense on fully distributed income before income taxes 8 | 4,057 | 3,208 | 6,777 | 5,822 | ||||||||||||
Adjusted fully distributed net income | $ | 7,372 | $ | 5,828 | $ | 12,314 | $ | 10,577 | ||||||||
Adjusted Fully Distributed Net Income per share of Class A Common Stock 9: | ||||||||||||||||
Basic | $ | 0.38 | $ | 0.30 | $ | 0.64 | $ | 0.55 | ||||||||
Diluted | $ | 0.38 | $ | 0.30 | $ | 0.64 | $ | 0.55 | ||||||||
Weighted average shares of Class A Common Stock outstanding used in computing Adjusted Fully Distributed Net Income 10: | ||||||||||||||||
Basic | 19,302,718 | 19,391,440 | 19,262,111 | 19,372,675 | ||||||||||||
Diluted | 19,302,718 | 19,391,440 | 19,262,111 | 19,372,675 |
(1) | Represents legal and advisory fees related to our litigation with MasterCraft Boat Company, LLC. For more information about the legal proceedings, refer to Note 13 of our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report. |
(2) | Represents legal and advisory fees as well as integration related costs incurred in connection with certain acquisition activities. |
(3) | Represents the change in the fair value of our interest rate swap entered into on July 1, 2015. |
(4) | Represents equity-based incentives awarded to certain of our employees under the Malibu Boats, Inc. Long-Term Incentive Plan and profit interests issued under the previously existing limited liability company agreement of the LLC. See Note 11 to our unaudited condensed consolidated financial statements. |
(5) | Represents the reduction in a one-time charge related to a judgment rendered against us in connection with a lawsuit by Marine Power where the court amended the judgment to $1.9 million. Please see Note 13 of our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report |
(6) | Represents costs incurred in connection with our vertical integration of engines including product development costs and supplier transition performance incentives. |
(7) | Reflects the elimination of the non-controlling interest in the LLC as if all LLC members had fully exchanged their LLC Units for shares of Class A Common Stock. |
(8) | Reflects income tax expense at an estimated normalized annual effective income tax rate of 35.5% of income before income taxes for the three and six months ended December 31, 2016 and 2015, assuming the conversion of all LLC Units into shares of Class A Common Stock. The estimated normalized annual effective income tax rate is based on the federal statutory rate plus a blended state rate adjusted for deductions under Section 199 of the Internal Revenue Code of 1986, as amended, state taxes attributable to the LLC, and foreign income taxes attributable to our Australian based subsidiary. |
(9) | Adjusted fully distributed net income divided by the shares of Class A Common Stock outstanding in (10) below. |
(10) | Represents the weighted average shares outstanding during the applicable period calculated as (i) the weighted average shares outstanding during the applicable period of Class A Common Stock, (ii) the weighted average shares outstanding of LLC Units held by non-controlling interests assuming they were exchanged into Class A Common Stock on a one-for-one basis and (iii) the weighted average fully vested restricted stock units outstanding during the applicable period that were convertible into Class A Common Stock and granted to directors for their services. |
Six Months Ended December 31, | |||||||
2016 | 2015 | ||||||
Total cash provided by (used in): | |||||||
Operating activities | $ | 22,247 | $ | 13,571 | |||
Investing activities | (5,427 | ) | (3,531 | ) | |||
Financing activities | (16,905 | ) | (3,489 | ) | |||
Impact of currency exchange rates on cash balances | 73 | (21 | ) | ||||
(Decrease) increase in cash | $ | (12 | ) | $ | 6,530 |
• | Revolving Credit Facility. Malibu Boats, LLC has access to a revolving credit facility from a bank syndicate led by SunTrust Bank with available borrowings of $25.0 million due on or before April 2, 2020. As of December 31, 2016, no amounts were outstanding under the revolving credit facility. |
• | Swingline Credit Facility. Malibu Boats, LLC received a swingline line of credit from SunTrust Bank in the principal amount of up to $5.0 million due on or before April 2, 2020. Any amounts drawn under the swingline line of credit reduce the capacity under the revolving credit facility. As of December 31, 2016, no amounts were outstanding under the swingline facility. |
• | Letter of Credit Facility. Malibu Boats, LLC has the ability to request the issuance of letters of credit by SunTrust Bank in the principal amount of up to $5.0 million. The principal amounts of any issued but undrawn letters of credit and any amounts drawn under issued letters of credit that have not been reimbursed reduce the availability under the revolving credit facility. As of December 31, 2016, $0.1 million was issued and undrawn under the letter of credit facility. |
• | Term Loans. Malibu Boats, LLC received a term loan from each of the banks in the syndicate in the aggregate principal amount of $80.0 million due on or before April 2, 2020. On August 4, 2016, in accordance with the Amended and Restated Credit Agreement, we elected to prepay $15.0 million of the term loan. As of December 31, 2016, we had a total of $55.9 million outstanding under the term loans. |
Period | Total Number of Shares Purchased | Average Price Paid Per Share | Total Number of Shares Purchased as Part of Publicly Announced Program | Approximate Dollar Value of Shares That May Yet Be Purchased Under the Program (1) | ||||||||||
(Dollars in millions) | ||||||||||||||
October | — | $ | — | — | $ | 11.0 | ||||||||
November | 2,474 | (2) | $ | 15.62 | — | $ | 11.0 | |||||||
December | — | $ | — | — | $ | 11.0 |
Exhibit No. | Description | |
3.1 | Certificate of Incorporation of Malibu Boats, Inc. 1 | |
3.2 | Bylaws of Malibu Boats, Inc. 1 | |
3.3 | Certificate of Formation of Malibu Boats Holdings, LLC 1 | |
3.4 | First Amended and Restated Limited Liability Company Agreement of Malibu Boats Holdings, LLC, dated as of February 5, 2014 2 | |
3.4.1 | First Amendment, dated as of February 5, 2014, to First Amended and Restated Limited Liability Company Agreement of Malibu Boats Holdings, LLC 3 | |
3.4.2 | Second Amendment, dated as of June 27, 2014, to First Amended and Restated Limited Liability Company Agreement of Malibu Boats Holdings, LLC 4 | |
4.1 | Form of Class A Common Stock Certificate 1 | |
4.2 | Form of Class B Common Stock Certificate 1 | |
4.3 | Exchange Agreement, dated as of February 5, 2014, by and among Malibu Boats, Inc. and the Members of Malibu Boats Holdings, LLC 2 | |
4.4 | Tax Receivable Agreement, dated as of February 5, 2014, by and among Malibu Boats, Inc., Malibu Boats Holdings, LLC and the Other Members of Malibu Boats Holdings, LLC 2 | |
10.1 | Engine Supply Agreement dated November 14, 2016 between Malibu Boats, LLC and General Motors LLC + | |
10.2 | Third Amendment dated December 28, 2016, to the Amended and Restated Credit Agreement, by and among Malibu Boats, LLC, Malibu Boats Holdings, LLC, SunTrust Bank, as administrative agent, dated April 2, 2015. | |
31.1 | Certificate of the Chief Executive Officer of Malibu Boats, Inc. pursuant to Rule 13a-14 or 15d-14 of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
31.2 | Certificate of the Chief Financial Officer of Malibu Boats, Inc. pursuant to Rule 13a-14 or 15d-14 of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
32 | Certification of the Chief Executive Officer and Chief Financial Officer of Malibu Boats, Inc. pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |
101.INS | XBRL Instance Document | |
101.SCH | XBRL Taxonomy Extension Schema Document | |
101.CAL | XBRL Taxonomy Calculation Linkbase Document | |
101.DEF | XBRL Definition Linkbase Document | |
101.LAB | XBRL Taxonomy Label Linkbase Document | |
101.PRE | XBRL Taxonomy Presentation Linkbase Document |
(1) | Filed as an exhibit to Amendment No. 1 to the Company’s registration statement on Form S-1 (Registration No. 333-192862) filed on January 8, 2014. |
(2) | Filed as an exhibit to the Company’s Current Report on Form 8-K (File No. 001-36290) filed on February 6, 2014. |
(3) | Filed as an exhibit to the Company's Quarterly Report on Form 10-Q/A (File No. 001-36290) filed on May 13, 2014. |
(4) | Filed as an exhibit to the Company's Current Report on Form 8-K (File No. 001-36290) filed on June 27, 2014. |
February 1, 2017 | MALIBU BOATS, INC. | ||
By: | /s/ Jack Springer | ||
Jack Springer, Chief Executive Officer | |||
(Principal Executive Officer) | |||
By: | /s/ Wayne Wilson | ||
Wayne Wilson, Chief Financial Officer | |||
(Principal Financial Officer) |
1 | DEFINITIONS AND INTERPRETATION | 3 | |||
2 | SUPPLY AND PURCHASE | 5 | |||
3 | MANUFACTURE | 7 | |||
4 | AFTERSALES | 7 | |||
5 | FORECAST AND ORDERING PROCEDURE | 7 | |||
6 | TITLE AND RISK OF LOSS; LABELING, PACKAGING AND DELIVERY/SHIPPING | 8 | |||
7 | PRICING | 9 | |||
8 | PAYMENT | 9 | |||
9 | ENGINE CHANGES | 9 | |||
10 | EXPORT CONTROL LAWS | 10 | |||
11 | WARRANTIES; LIMITATION OF LIABILITY | 10 | |||
12 | CLAIMS | 11 | |||
13 | FIELD ACTIONS; PRODUCT LIABILITY; INDEMNIFICATION AND INSURANCE | 12 | |||
14 | FORCE MAJEURE | 15 | |||
15 | TERM AND TERMINATION | 15 | |||
16 | TRADEMARKS, INTELLECTUAL PROPERTY RIGHTS | 16 | |||
17 | CONFIDENTIALITY | 16 | |||
18 | NOTICES | 18 | |||
19 | AMENDMENTS | 18 | |||
20 | ASSIGNMENT; CHANGE OF CONTROL TERMINATION | 18 | |||
21 | SEVERABILITY | 19 | |||
22 | NO IMPLIED WAIVERS | 19 | |||
23 | NO AGENCY | 20 | |||
24 | GOVERNMENT APPROVALS | 20 | |||
25 | SET OFF | 20 | |||
26 | ENTIRE AGREEMENT | 20 | |||
27 | GOVERNING LAW, JURISDICTION; DISPUTE RESOLUTION | 21 | |||
28 | COUNTERPARTS | 21 |
EXHIBIT 2.1 - LIST OF ENGINES AND SPECIFICATIONS |
EXHIBIT 2.2 - PRICING PACKAGE |
EXHIBIT 7.1 - PRICING |
EXHIBIT 9.2 - NOTICE OF CHANGE PROCESS |
EXHIBIT 18 - NOTICES |
A. | Seller is engaged in the business of, among other things, designing, developing, manufacturing, assembling, marketing and selling motor vehicles and other products such as engines and related components, parts and/or accessories; |
B. | Buyer is engaged in the business of, among other things, manufacturing and selling performance sport boats (“Boats”); and |
C. | Buyer desires to purchase from Seller, and Seller desires to manufacture and sell to Buyer, Engines for use in Buyer’s Boats. |
1.1 | Definitions |
1.2 | Interpretations |
(a) | when a reference is made in this Agreement to a Section or Exhibit, such reference is to a Section of, or an Exhibit to, this Agreement unless otherwise indicated; |
(b) | the table of contents and headings for this Agreement are for reference purposes only and do not affect in any way the meaning or interpretation of this Agreement; |
(c) | whenever the words “include”, “includes” or “including” are used in this Agreement, they are deemed to be followed by the words “without limitation”; |
(d) | the words “hereof”, “herein” and “hereunder” and words of similar import, when used in this Agreement, refer to this Agreement as a whole and not to any particular provision of this Agreement; |
(e) | all terms defined in this Agreement have the defined meanings when used in any certificate or other document made or delivered pursuant hereto, unless otherwise defined therein; |
(f) | the definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms; |
(g) | any law defined or referred to herein or in any Agreement or instrument that is referred to herein means such Law or statute as from time to time amended, modified, or supplemented, including by succession of comparable successor Laws; |
(h) | references to a Person are also to its permitted successors and assigns; and |
(i) | the use of “or” is not intended to be exclusive unless expressly indicated otherwise. |
2. | SUPPLY AND PURCHASE |
2.1 | During the Term and subject to the terms and conditions of this Agreement, Seller will sell to Buyer the Engines as described in Exhibit 2.1, as may be amended from time-to-time, only for use in the Buyer’s Boats. Buyer agrees to submit Purchase Orders, as provided in Section 5.3 of this Agreement, for purchases of Engines and, so long as the Buyer is not in breach of |
2.3 | It is anticipated that the annual volume of Engines to be supplied and purchased under this Contract will not exceed 7,000 units per year. Should Purchaser request to purchase units in addition to 7,000 per year, the Parties will separately discuss potential capacity increases. |
2.4 | The Engines will meet the specifications as attached in Exhibit 2.1. |
2.5 | Buyer will be responsible for the integration of Engines into marine applications; and Seller will have no responsibility or liability with respect to the integration of the Engines into the Buyer’s Boats. |
2.6 | Seller reserves the right, in its sole discretion, to cancel production of the Engines to be supplied to Buyer under this Agreement based on market conditions. In the event that Seller cancels production of Engines pursuant to this Section 2.6, Seller will provide at least eighteen (18) months advance written notice (the “Cancellation Notice”) to Buyer. This Agreement will terminate eighteen (18) months after Seller delivers the Cancellation Notice to Buyer. During this eighteen (18) month period between the delivery of the Cancellation Notice to Buyer and the termination of this Agreement, the Parties will continue to perform their obligations in the ordinary course as required under this Agreement and will work in good faith to take reasonable actions to allow for a mutually agreeable transition upon the termination of this Agreement which could include opportunities for Buyer to bank Engines for Buyer's purchase (i.e., to purchase additional Engines during such eighteen (18) month period in excess to any previously projected purchases); provided, however, any such banking would need to comprehend the allocation of Engines to Buyer on a pro rata basis based on Buyer's prior purchases. |
***** | CONFIDENTIAL TREATMENT: MALIBU BOATS, INC. HAS REQUESTED THAT THE OMITTED PORTIONS OF THIS DOCUMENT, WHICH ARE INDICATED BY *****, BE AFFORDED CONFIDENTIAL TREATMENT. MALIBU BOATS, INC. HAS SEPARATELY FILED THE OMITTED PORTIONS OF THE DOCUMENT WITH THE SECURITIES AND EXCHANGE COMMISSION. |
3. | MANUFACTURE |
3.1 | The Engines will be manufactured using Seller’s manufacturing system, validation requirements, and quality systems. Notwithstanding the foregoing, any obligations with respect to warranty, quality, disruption of supply, and damages will be in accordance with the specific terms of this Agreement. |
3.2 | Seller will perform quality control of the Engines in accordance with its then-current quality control procedures. The Parties will work together on details surrounding quality assurance aimed at improving overall quality. |
3.3 | Seller will be solely responsible for determining manufacturing location and providing the floor space, equipment, personnel, and working capital required to manufacture the Engines. In case of a planned change of the manufacturing location Seller will provide Buyer reasonably advanced notice and execution thereof will be managed through the NOC Process. |
3.4 | Seller may, upon reasonable notice to Buyer, subcontract its manufacturing and assembly requirements for the Engines. Seller will remain responsible for its obligations under this Agreement. |
3.5 | Unless otherwise agreed in writing, Buyer will not become the owner of any production equipment or tooling used in the manufacture of the Engines. |
4. | AFTERSALES |
5.1 | The Parties will follow the forecast and ordering requirements for the Engines as set forth in the annual Pricing Package. No later than (6) six months prior to the start of production of each applicable model year, Buyer will provide Seller an estimated, non-binding forecast for the upcoming and remaining model years under this Agreement. Buyer will provide Seller forecast updates in accordance with the Pricing Package. |
5.2 | Buyer and Seller’s manufacturing facility sourcing the Engines will establish respective single points of contact for scheduling communication and coordination for the manufacture and delivery of the Engines. |
5.3 | Seller and Buyer will use manual or electronic Purchase Orders to communicate with respect to the Engines, including ship-based schedules, order forecast information and shipping notification (unless an alternative process as agreed by the Parties is in place). |
5.4 | No pre-printed or standardized terms and conditions of purchase or sale used by Buyer or Seller will be applicable, unless specifically and expressly agreed to in writing by the Parties |
6. | TITLE AND RISK OF LOSS; LABELING, PACKAGING AND DELIVERY/SHIPPING |
6.1 | Except as provided herein or otherwise agreed in writing, all deliveries under this Agreement will be FCA (as defined in Incoterms 2010 as published by the International Chamber of Commerce) Seller’s manufacturing location. Title to the Engines will pass to Buyer and responsibility of Seller for loss or damage to the Engines will cease upon FCA delivery. |
6.2 | Seller will prepare packing specifications for the Engines. Such packing will be suitable for transportation, loading and unloading so as to prevent the Engines from rust condition and damage for delivery to Buyer. Seller will be the owner of all packaging (including returnable racks and containers) unless otherwise agreed by the Parties. |
6.3 | Periodically Buyer and Seller will cooperate to schedule and implement an inventory of all containers. Buyer is responsible for any damage or loss related to packaging incurred while the packaging is in the possession of the Buyer or its carrier or any of its other service providers. |
6.4 | If returnable racks and containers are used, Buyer is responsible for all freight and any other costs to return racks and containers to the location Seller delivered them to the Buyer and to manage the returned racks and containers of Seller consistent with Seller’s schedules for production of the Engines. |
6.5 | The Party responsible for container procurement will be responsible for repair and replacement of damaged or lost containers and racks; however, the responsible Party will be reimbursed by the other Party when the damage or loss occurred when in the possession or control of such other Party or any of its service providers. Buyer will bear any cost of maintaining the racks and containers in good condition. |
6.6 | If Buyer cannot return the containers or racks to Seller within a reasonable time period after shipment of the Engines, Buyer will notify Seller of such delay, the cause and corrective actions, and the estimated date of return, and will be responsible for any related costs, including, but not limited to, storage fee, incurred by Seller due to the delay. |
6.7 | Labeling of containers will be in accordance with GM 1724 Shipping & Parts Identification Standard (A,B,C), such standard being available on GM Supply Power, unless otherwise agreed upon by the Parties. Any unique labeling requirements driven by local regulations must be followed after review by the Parties. If the local regulations requiring unique labeling are a result of requirements attributable solely to Buyer, Buyer will be responsible for all related costs to provide labels that deviate from, or in addition to, the GM Standard. Otherwise, the costs of any unique labeling will be borne equally by both Parties. |
6.8 | Labeling of product (for example engine engraving or bar code identification or emission parts type number identification for certification) will be in accordance with the GM 1738 Global Transport Label Standard unless otherwise agreed by the Parties. The Parties will agree on the best method for implementing any unique labeling requirements. If the local regulations requiring unique labeling are a result of requirements attributable solely to Buyer, then any additional costs will be met at Buyer’s expense and will be agreed by the Parties. Otherwise, the costs of any unique labeling will be borne equally by both Parties. |
7. | PRICING |
7.1 | Buyer will pay the Engine prices specified in Exhibit 7.1. Pricing will be communicated to Buyer annually in the Pricing Package. |
7.2 | Prices will be exclusive of any applicable sales or other similar tax, if any, that is required by law to be added to the sales price. |
8. | PAYMENT |
8.1 | Buyer will pay for the Engines in US dollars. Net 25 prox terms will apply, which means that payment is to be made by the 25th day of the month following the month of shipment; provided, if the 25th day is a public holiday or weekend, payment must be made on the next business day. One invoice and one delivery note will be issued for each shipment of Engines. Payment terms and trade credit limit are subject to Buyer meeting Seller’s regular credit standards. |
8.2 | Banking information and applicable contact information will be as set forth in the Pricing Package. |
9. | ENGINE CHANGES |
9.1 | Except for the warranties set forth in Article 11, the Parties agree that the Engines are supplied as-is and Seller will be under no obligation to make any changes to the Engines for Buyer. Buyer is buying the Engines as-manufactured by Seller. |
9.2 | Any component changes to the Engine from Seller will be communicated to Buyer in accordance with the Notice of Change Process (“NOC Process”) set forth in Exhibit 9.2. |
9.3 | Breakpoints for any requested change will be coordinated between the Parties, including appropriate consideration of the impact on inventory and scrapping cost. |
9.4 | In the event Seller discontinues the manufacture or production of Engine dress parts, Seller shall provide Buyer with prompt written notice of such decision, and will provide Buyer with the opportunity to effect a one-time or all-time purchase of a reasonable quantity of such Engine dress parts. |
10. | EXPORT CONTROL LAWS |
11.1 | Seller warrants that the Engines sold under this Agreement will (a) be free from defects in materials or workmanship; (b) comply with the applicable Engine specifications set forth in Exhibit 2.1, for each Engine purchased hereunder; and (c) be free and clear of any liens or encumbrances. This warranty period for each Engine commences when Buyer takes ownership and ends on the earlier of (i) when the such Engine successfully passes through the Buyer’s final quality inspection or (ii) one year after Buyer takes ownership of the Engines. Buyer’s exclusive remedies for breach of warranty are those outlined in Article 12. The warranty will not apply to any Engines that were (i) improperly integrated into the marine applications of engines by or on behalf of Buyer, (ii) damaged through misuse, negligence, accident, or improper handling, maintenance, or application after delivery to Buyer under this Agreement, (iii) lost or damaged during transportation from place of delivery to Buyer’s manufacturing facility, or (iv) repaired or altered by or on behalf of Buyer without Seller's prior written consent. |
11.2 | EXCEPT AS OTHERWISE PROVIDED EXPRESSLY IN THIS AGREEMENT OR IN THE PRICING PACKAGE, THERE ARE NO WARRANTIES, EXPRESS OR IMPLIED, INCLUDING ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, AND SELLER WILL NOT BE LIABLE TO BUYER ON ANY CLAIM OF NEGLIGENCE OR MANUFACTURER’S STRICT LIABILITY ON ENGINES OR PARTS THEREOF SOLD TO BUYER EXCEPT IN CASE OF SELLER WILLFUL MISCONDUCT. EXCEPT AS OTHERWISE SET FORTH HEREIN, SELLER ASSUMES NO OBLIGATIONS OR LIABILITIES, AND SELLER HAS AUTHORIZED NO OTHER PERSON OR PARTY TO ASSUME FOR IT ANY OBLIGATIONS OR LIABILITIES, IN CONNECTION WITH SUCH ENGINES OR PARTS THEREOF. |
11.3 | EXCEPT IN THE CASE OF INTENTIONAL MISCONDUCT, IN NO EVENT, WHETHER AS A RESULT OF BREACH OF AGREEMENT OR WARRANTY, ALLEGED NEGLIGENCE OR OTHERWISE, WILL EITHER PARTY BE LIABLE FOR INDIRECT OR CONSEQUENTIAL DAMAGES, INCLUDING BUT NOT LIMITED TO LOSS OF PROFITS OR REVENUE, LOSS OF USE OF ENGINES OR OTHER EQUIP-MENT, COSTS OF SUBSTITUTE EQUIPMENT OR PARTS, DOWNTIME COSTS, OR CLAIMS OF CUSTOMERS OF BUYER FOR SUCH DAMAGES. |
12. | CLAIMS |
12.1 | Buyer will submit to Seller a claim in writing for any Engines that (i) have been incorrectly included by Seller in a shipment to Buyer, (ii) have been omitted by Seller from a shipment to Buyer as a result of a short delivery or (iii) fail to meet the standards set forth in Section 11.1. |
12.2 | Claims under Sections 12.1(i) and 12.1(ii) must be submitted to Seller within forty-five (45) days of Buyer taking ownership of the Engines. Claims under Section 12.1(iii) must be submitted to Seller within one year of Buyer taking ownership of the Engines. Any claim not submitted within the periods stated above is barred from any remedy, except that if the submission of a claim is delayed due to an event of Force Majeure, the period of submitting such claim is extended for the duration of such event of Force Majeure. |
12.3 | To the extent that Seller accepts a particular claim, Seller will authorize repair, replacement, or provide credit to Buyer’s account for such defective, short shipped, wrongly shipped or damaged Engines. Seller’s only obligation under this Agreement is to provide a credit or repair or replace the part(s), at Seller's reasonably exercised option and expense, including the cost of the Engines or parts and transportation, including freight, insurance, and customs duty to the warehouse designated by Buyer. |
12.4 | If Seller reasonably decides to authorize the repair of the Engines by Buyer, then (i) Seller’s quality standard for such parts will apply, and (ii) repair rates at currency per hour and labor times will be mutually agreed upon before commencement of the repair work. Rework by Buyer on defective Engines will be carried out in accordance with the following procedure: |
(a) | Seller gives official rework authorization (by model) to Buyer, and Buyer will perform or assign the third parties to perform the rework subject to the authorization; |
(b) | Seller provides the instruction and any necessary training of Buyer’s technicians for rework; |
(c) | Seller provides the list of necessary repair parts; and |
(d) | Seller gives a clear definition of the scope of rework to be carried out by Buyer (including which parts are authorized). |
12.5 | If Seller reasonably decides to replace defective Engines or component parts, then Seller will be responsible only for the cost of the Engines or parts and transportation, including insurance, freight and customs duty to the warehouse designated by Buyer. |
12.6 | Buyer will contact its assigned Powertrain Regional Quality Manager to report and resolve problems. |
12.7 | In case the non-conformance to the warranty set out in Section 11.1 originates from a part or component supplied by a supplier of Seller, Buyer will provide Seller with reasonably requested assistance and support, including any documents, information, witnesses, technical experts and any other support which may assist Seller to pursue a claim for compensation against the supplier. |
13. | FIELD ACTIONS; PRODUCT LIABILITY; INDEMNIFICATION AND INSURANCE |
13.1 | The Parties recognize that, as a result of integration of the Engines into marine applications, for which Buyer will be solely responsible as well as other issues, the Engines may perform differently in a marine environment than in other vehicles and applications. As a result, a Field Issue may exist on Engines used in some applications that may not exist in other applications. Each Party will have the right, at its sole discretion, to institute any Field Action investigation and Buyer will have the right, at its sole discretion, to institute any Field Action in relation to the Engines it purchases under this Agreement that are incorporated into the marine application of Engines. The Parties agree to put into place internal policies, procedures and practices for the investigation and resolution of Engine quality issues that could lead to a Field Action. If a Party elects to institute a Field Action investigation which may lead to a Field Action decision, then the instituting Party will notify the other Party as soon as possible prior to instituting any Field Action, but not less than three business days prior to that Party’s anticipated Field Action decision. |
13.2 | The Parties agree to cooperate with respect to any Field Action investigation, including, but not limited to, exchanging relevant field and other information, at the discretion of the Parties acting in good faith. Notwithstanding this Section 13.2, either Party can require the Parties to enter into a confidentiality agreement before sharing such field and other information. |
13.3 | Buyer will be responsible for all costs associated with any Field Action initiated by Buyer that results solely from the integration of Engines into marine applications. Seller will be responsible for all costs associated with any Field Action initiated by Buyer or Seller that results solely from Seller’s failure to cause the Engines to be free from defects in materials or workmanship. |
13.4 | Buyer will be responsible for the defense and all costs of product liability claims and litigation involving or brought against either Party resulting solely from the Buyer’s integration of Engines into marine applications, whether based on negligence, strict liability or any other legal theory for (i) damage to property (ii) personal injury or (iii) death, except to the extent that such product liability claims and litigation relate solely to Seller’s failure to cause the Engines to be free from defects in materials or workmanship. |
13.5 | With respect to any actual, potential, or threatened claim described in Section 13.4 above, the Parties hereby agree to (i) communicate and cooperate with each other and, if required, with the appropriate insurance carrier, to the fullest extent reasonably possible in investigating the facts and circumstances surrounding the claim and in litigating the matter; (ii) refrain to the fullest extent reasonably possible from taking positions adverse to the interests of each other; and (iii) not, except in enforcement of any rights under this Agreement, institute any claim, action or proceeding, whether by cross claim, third party claim, interpleader or otherwise, against each other. |
13.6 | With respect to field product quality issues, the Parties agree to work together to resolve the quality issues. |
13.7 | Buyer will defend, indemnify and hold harmless Seller and its Affiliates, directors, officers, employees and agents (collectively, the “Indemnified Party”) from and against any and all suits, actions, claims, judgments, debts, obligations or rights of action of any nature or description, (other than product liability and recall claims, which shall be governed by Sections 13.1 to 13.6, inclusive) (collectively, “Claims”) and all costs, including attorneys’ fees, incurred by Seller and its Affiliates in connection therewith, arising out of or relating to the Engines resulting from Buyer’s actions, including Buyer’s integration of Engines into the marine applications and Buyer’s promotion, marketing, distribution, sale and servicing of Engines; provided, however, this Section 13.7 will not apply to Claims to the extent resulting solely from Seller’s failure to cause the Engines to be free from defects in materials or workmanship. Seller will notify Buyer of any such Claim, promptly in writing upon receiving notice or being informed of the existence thereof. Upon such notice from the Seller, Buyer will promptly take such action as may be necessary to protect and defend, at its sole discretion and in its sole control, the Indemnified Party against such Claim, and will indemnify the Indemnified Party against any loss, costs or expenses incurred in connection therewith. Buyer shall not be liable for any settlement of any such Claim effected without its written consent. |
13.8 | Buyer will obtain and maintain pursuant to the terms of this Agreement, at its sole expense, the following types of insurance coverage, with minimum limits as set forth below: |
(a) | Commercial General Liability covering liability arising from premises, operations, independent contractors, products-completed operations, personal and advertising injury, and contractual liability - $10,000,000 each occurrence. |
(b) | Commercial Product Liability insurance - $10,000,000 each occurrence. |
(c) | Business Automobile Liability covering all owned, hired, and non-owned vehicles - $5,000,000 each occurrence, including all statutory coverages for all states of operation. |
(d) | Workers Compensation - statutory limits for all states of operation. |
(e) | Employers Liability - $1,000,000 each employee for bodily injury by accident and $1,000,000 each employee for bodily injury by disease. |
14.1 | An “Event of Force Majeure” means, with respect to any Party, any event beyond the reasonable control of such Party that prevents or materially delays or impairs the ability of such Party to perform its obligations under this Agreement, including (i) any act of God, natural disaster, or war, (ii) any strike, lockout, or labor dispute at the plant of such Party or its relevant suppliers, (iii) any shortage of electrical power at the facilities of such Party or its relevant suppliers which materially affects the production of Engines or Service Parts or (iv) any act or omission of any government authority (including failure to approve Agreements within a commercially reasonable time period), which materially affects the production of Engines or Service Parts. |
14.2 | If one Party is wholly or partially prevented from performing its responsibilities stipulated in this Agreement by reason of an Event of Force Majeure, it will (i) notify the other Party in writing as soon as reasonably practicable after the occurrence of such Event of Force Majeure, (ii) during the duration of an event of Force Majeure the Parties will use reasonable efforts to mitigate damages, to the extent possible and (iii) the affected party will take appropriate means to minimize or remove the effects of the Event of Force Majeure and, within the shortest practicable time, attempt to resume performance of the obligation affected by the Event of Force Majeure. If an Event of Force Majeure occurs, the affected party will not be obligated to perform the affected obligations during such period and the other Party will not be obligated to pay for any services or Engines not delivered. |
14.3 | In case of an Event of Force Majeure, the allocation of Engines in short supply during the time of such Event of Force Majeure, or the allocation of capacity as production recovers from the Event of Force Majeure, will be the subject of good faith negotiations between the Parties, and could include temporary arrangements for Buyer to purchase comparable Product from another party while the Force Majeure continues. |
15. | TERM AND TERMINATION |
15.1 | This Agreement will have an Effective Date of November 14, 2016, and will continue in force for a term of seven (7) years (the “Term”), unless otherwise noted herein. |
15.2 | Either Party may terminate this Agreement in the event of the happening of a material breach by the other Party of performance of such other Party’s material obligations under this Agreement, which breach has not been remedied or waived within sixty (60) days following receipt by such other Party of written notification of the breach. For the avoidance of doubt, undisputed payment obligations will be considered to be material obligations under this Agreement. |
15.3 | Either Party may terminate this Agreement immediately if (a) the other Party voluntarily enters into bankruptcy or similar proceedings, or (b) the other party involuntarily enters into bankruptcy or similar proceedings and such involuntary proceedings are not vacated or nullified within fifteen (15) days after being instituted. |
15.4 | Termination of this Agreement will not affect any liability, which (i) has arisen prior to such termination, or (ii) may arise after such termination, based on transactions made prior to such termination, or any obligations which are to survive termination as noted herein. Upon any termination of this Agreement by Seller pursuant to Section 15.2 because of Buyer’s breach of this Agreement or Section 15.3 because of Buyer’s bankruptcy or similar proceeding, Buyer shall be responsible to pay the reasonable, documented direct costs incurred by Seller solely as a result of its production of Engines pursuant to this Agreement. |
15.5 | Seller shall fulfill all orders of Buyer which were placed by Buyer and accepted by Seller prior to the notice of termination, unless such termination is by Seller in accordance with Section 15.2 due to Buyer’s failure to pay undisputed amounts due from Buyer to Seller pursuant to this Agreement, or Buyer’s bankruptcy or similar proceeding under Section 15.3. |
16. | TRADEMARKS, INTELLECTUAL PROPERTY RIGHTS |
16.1 | Except as may be provided in a separate written agreement, neither Seller nor Buyer will use or authorize the use of any trademarks or trade names or other distinctive marks or signs owned by the other or its Affiliates or any mark, name, word, or sign which so nearly resembles any of the foregoing marks, names, words, or signs as to be likely to cause confusion or mistake or to deceive the public. |
16.2 | Buyer is aware, understands and fully accepts that, through this Agreement, it will not acquire any Intellectual Property rights in the Engines. Seller is aware, understands and fully accepts that, through this Agreement, it will not acquire any Intellectual Property rights in the Buyer’s integration of Engines into marine applications. |
17. | CONFIDENTIALITY |
17.1 | “Confidential Information” means the technical and business related information that is non-public, confidential and/or proprietary in nature, which is disclosed during the Term of this Agreement by one Party or its Affiliates (the “Discloser”) to the other Party or its Affiliates (the “Recipient”); provided such information is (i) in written or other tangible form (including digital medium) and (ii) marked to identify it as the Discloser’s Confidential Information. Information that is disclosed orally or visually will be considered Confidential Information if it is identified as confidential at the time of disclosure, summarized with particularity in writing, marked as confidential or its equivalent, and delivered to the Recipient within fifteen (15) days. Notwithstanding the foregoing, Confidential Information does not include information disclosed pursuant to or in connection with this Agreement which (i) is or becomes generally available to the public other than as a result of a disclosure by the Recipient in violation of the terms hereof; (ii) is or becomes available to the Recipient on a non-confidential basis from a rightfully possessing and disclosing source other than the Discloser; (iii) was possessed or known by the Recipient prior to the disclosure thereof to the Recipient by the Discloser; or (iv) was or is developed by or for the Recipient without reference to the Confidential Information. |
17.2 | Recipient may not, without the prior written consent of the Discloser, disclose or divulge or cause or permit to be disclosed or divulged the Confidential Information received from the Discloser to any third party except as specifically set forth in this Agreement. All Confidential Information must be protected by the Recipient against unauthorized disclosure using the same standard of care with respect to such Confidential Information as the Recipient uses with its own confidential information of similar kind and character, but not less than reasonable care. |
17.3 | The confidentiality obligations contained in this Agreement shall survive termination or expiration of this Agreement and shall expire and be of no further force or effect two (2) years after the termination or expiration of this Agreement. |
17.4 | The Recipient will limit its internal dissemination of the Discloser’s Confidential Information to only those individuals having a need to know such Confidential Information in order for the Recipient to carry out the activities contemplated by this Agreement. Confidential Information may be disclosed by the Recipient to its Affiliate, on a need to know basis, provided (a) such Affiliate is needed to assist the Party in carrying out the Project and (b) such Affiliate agrees to be bound by the terms of this Agreement or a non-disclosure agreement having similar confidentiality obligations. The Recipient will be responsible for any breach of such terms and conditions by the Affiliate. |
17.5 | Upon the termination or expiration of this Agreement, the Recipient must discontinue, and cause its Affiliates to discontinue, the use of all of the Confidential Information. Nothing in this Agreement will be interpreted as precluding an employee of one of the Parties or its Affiliate from making use of his/her general knowledge in connection with other projects being performed on behalf of his/her employer, even if such general knowledge has been furthered by his/her having access to the Confidential Information exchanged under this Agreement. |
17.6 | No licenses or rights to Intellectual Property, whether implied or otherwise, are granted by this Agreement. |
17.7 | The Discloser makes no express or implied representation or warranty as to the accuracy, reliability or completeness of the Confidential Information and expressly disclaims all liability that may be based on the Confidential Information, including any errors or omissions. |
17.8 | If the Recipient is required by law, rule, regulation, or legal or regulatory process (including court order or other lawful governmental or regulatory action) to disclose any Confidential Information the Recipient must: (a) promptly notify the Discloser so that the Discloser may seek a remedy, if a remedy is available; (b) provide only the Confidential Information that is legally required; and (c) exercise reasonable efforts to obtain assurance that the Confidential Information will not be further disclosed. For avoidance of doubt, it is understood that the existence of this Agreement and its material terms must be publicly disclosed by Buyer pursuant to federal securities laws and the Buyer may need to file this |
17.9 | All Confidential Information disclosed by a Party will remain the property of that Party. At any time, upon written request of the Discloser, the Recipient will promptly return or destroy Confidential Information and all copies thereof. Upon termination or expiration of this Agreement, all tangible Confidential Information will be returned or destroyed, at the option of the Discloser, and upon written request of the Discloser, the Recipient will certify in writing that it has returned or destroyed all such Confidential Information. Notwithstanding the foregoing, Recipient will be entitled to keep one or more archival copies of Confidential Information (whether physical or electronic) in its records if required to comply with legal, professional, compliance and regulatory standards or requirements, or such archival copies were created as a result of automatic electronic back-up procedures. Any Confidential Information that is not returned or destroyed shall remain subject to the confidentiality obligations set forth in this Agreement. |
17.10 | As of the date of this Agreement, this Section 17 shall replace in its entirety the Non-Disclosure Agreement, dated April 26, 2016, by and between GM Global Technology Operations LLC and Malibu Boats LLC. |
18. | NOTICES |
19. | AMENDMENTS |
20. | ASSIGNMENT; CHANGE OF CONTROL TERMINATION |
20.1 | No Party may assign its rights or interests under this Agreement or delegate its duties hereunder without the prior written consent of the other Party; provided, however, that any Party may assign its rights or interests under this Agreement or delegate its duties hereunder to its Controlled Affiliates without the prior written consent of the other Party. “Controlled Affiliates”, for purposes of this Article 20, is defined as (i) in the case of Seller, any corporation, association or other business entity (including a partnership, joint venture, limited liability company or similar entity) of which Seller (or its successors and assigns) beneficially owns more than 50% of the total voting power of such entity and (ii) in the case of Buyer, any corporation, association or other business entity (including a partnership, joint venture, limited liability company or similar entity) of which Malibu Boats, Inc., a Delaware corporation (or |
20.2 | Any purported assignment or transfer of this Agreement by a Party in violation of this Section 20 shall entitle the other Party to terminate this Agreement upon thirty (30) days written notice, subject to a final accounting for good sold and received. |
20.3 | Upon a Change of Control of Buyer, either Party shall be entitled to terminate this Agreement upon written notice to the other Party that such Party intends to terminate this Agreement on the date that is eighteen (18) months from the date of the Change of Control, subject to a final accounting for goods sold and received; provided, that upon the Buyer providing written notice to the Seller of a potential or completed Change of Control of Buyer, each Party must provide written notice to the other Party to terminate this Agreement within thirty (30) days of the Seller receiving notice of a potential or completed Change of Control of Buyer by notifying the other Party in writing of its intent to terminate this Agreement on the date that is eighteen (18) months from the date of the Change of Control, it being understood that if no written notice of termination is provided by either Party within such thirty (30) day period, this Agreement shall continue in accordance with its terms and neither Party shall have the right to terminate under this Section 20.3 after such thirty (30) day period expires. “Change of Control”, for purposes of this Article 20, is defined as any “person” or “group” of related persons (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act of 1934) becoming the beneficial owner (as defined in Rules 13d-3 and 13d-5 under the Exchange Act of 1934), directly or indirectly, or more than 50% of the total voting power of Buyer. |
20.4 | This Section 20 does not apply to assignments to successors in interest, upon which this Agreement shall be binding. |
21. | SEVERABILITY |
22. | NO IMPLIED WAIVERS |
23.1 | Nothing in this Agreement will give rise to an agency or partner relationship or otherwise create any rights in either Party to act as a legal representative of the other Party for any purpose. Neither is granted any express or implied right or authority to assume or to create any obligation on behalf of or in the name of the other or its Affiliates, or to bind them in any manner whatsoever. |
23.2 | Unless otherwise agreed herein, Buyer and Seller will each be solely responsible for any and all expenditures, obligations or responsibilities made, incurred or assumed by it in preparation for performance or in the performance of its obligations under this Agreement. |
24. | GOVERNMENT APPROVALS |
24.1 | The Parties will cooperate in securing any government approvals or permits required to effect the transactions contemplated by this Agreement. |
24.2 | Unless otherwise agreed by the Parties, Seller will be responsible for securing any licenses or permits and paying any duties or fees required to export Engines from their country of manufacture. Buyer will be responsible for securing any licenses or permits and paying any duties or fees required to import Engines into the country of Buyer or to import Engines into any other country or jurisdiction. Failure of Buyer to fulfill any such responsibility will not relieve Buyer of any obligations to Seller in connection with any such Engines purchased by Buyer. |
24.3 | Buyer will present this Agreement to appropriate government agencies for registration, if required. Buyer will pay all costs and expenses incidental to such presentation, and to the preparation, execution and stamping, if any of this Agreement. |
25. | SET OFF |
26. | ENTIRE AGREEMENT |
26.1 | There are no other agreements or understandings, either oral or written, between the Parties affecting this Agreement or relating to the supply of the Engines, except as otherwise specifically provided or referred to in this Agreement. For the purpose of clarification, it is expressly agreed that no general terms and conditions will apply to the sale of the Engines hereunder. |
26.2 | Except as otherwise provided in this Agreement, no agreement between the Parties which is at variance with any of the provisions of this Agreement or which imposes definite obligations upon either Party not specifically imposed by this Agreement or which is intended to be effective or performed following the expiration or other termination of this Agreement and |
27. | GOVERNING LAW, JURISDICTION; DISPUTE RESOLUTION |
27.1 | This Agreement, including, but not limited to, its validity, interpretation, performance, effects, derivatives and consequences, is governed by the laws of the State of Delaware, USA, without reference to the conflict of laws principles thereof. Each Party consents, for purposes of enforcing this Agreement, to personal jurisdiction, service of process and venue in any state or federal court within the State of Delaware having jurisdiction over the subject matter. Both Parties acknowledge that the United Nations Convention on Agreements for the International Sale of Goods does not apply to the transaction contemplated under this Agreement. |
27.2 | EACH PARTY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY PROCEEDINGS RELATING TO THIS AGREEMENT. |
27.3 | Before the filing of any claim in any court (except in cases where a Party is threatened with irreparable harm and seeks injunctive relief), a Party will serve on the other (a) written notice of the claim, specifying the exact amount claimed and the provision of this Agreement or other authority for the claim; and (b) a copy of all supporting documents. |
28. | COUNTERPARTS |
General Motors LLC | Malibu Boats, LLC |
By: /s/ E.T. Turvey | By: /s/ Jack Springer _ |
Name: E.T. Turvey | Name: Jack Springer |
Title: Global VP GM CCA | Title: CEO |
Date: November 14, 2016 | Date: November 14, 2016 |
***** | CONFIDENTIAL TREATMENT: MALIBU BOATS, INC. HAS REQUESTED THAT THE OMITTED PORTIONS OF THIS DOCUMENT, WHICH ARE INDICATED BY *****, BE AFFORDED CONFIDENTIAL TREATMENT. MALIBU BOATS, INC. HAS SEPARATELY FILED THE OMITTED PORTIONS OF THE DOCUMENT WITH THE SECURITIES AND EXCHANGE COMMISSION. |
General Motors LLC | |||
2019 MODEL YEAR | |||
SAMPLE PRICING PACKAGE | |||
OEM Sales and Marketing |
General Motors LLC |
Mail code : 483-720-250 |
777 Joslyn Ave |
Pontiac, MI 48340 |
U.S.A. |
Plant | Engine | Start-of-Production |
St. Catharines (Canada) | ***** | June XX, 2018 |
CCA | June XX, 2018 |
***** | CONFIDENTIAL TREATMENT: MALIBU BOATS, INC. HAS REQUESTED THAT THE OMITTED PORTIONS OF THIS DOCUMENT, WHICH ARE INDICATED BY *****, BE AFFORDED CONFIDENTIAL TREATMENT. MALIBU BOATS, INC. HAS SEPARATELY FILED THE OMITTED PORTIONS OF THE DOCUMENT WITH THE SECURITIES AND EXCHANGE COMMISSION. |
• | 2019 MY Engine Dress Component Pricing |
Plant | Engines | Crate Description | Crate Price |
TBD | |||
• | Title of Document as “Purchase Order” |
• | Issuing Company Name and Address |
• | PO Number |
• | PO Issue Date |
• | Name, Contact Info, and Signature of Person Authorizing PO |
• | Issued to Company Name (GM), Address, Contact Info |
• | For Parts Ordered: Description, GM Part number, RPO Code, Suffix, Customer PN if applicable, Unit Price, Number of Units Ordered, and Extended Price |
• | Incoterms of Sale (FCA w/ Point of Transfer of Ownership Specified) |
• | Payment Terms |
• | Bill To Advice (To Where Invoice Should be Sent) |
• | Requested Delivery Timing |
• | Method of Transportation and Contact Information for Customer-Designated Freight Forwarder |
• | Address, Contact Info for Ultimate Delivery Destination |
• | Reference to Any Separate Agreements Governing Terms & Conditions of PO |
• | Any Special Instructions |
• | As previously noted in the OEM Engineering Notice of Change #10DS6CUSTOMER XX -014 (dated 22SE09), EPA regulations (40 CFR Part 1068) require General Motors (and other Primary Engine Manufacturers) to adhere to new requirements for receiving and processing orders for “non-road” and stationary engines. Among the requirements, as stated in the NoC, are that GM can only ship engines upon receipt of a written request from the Secondary Engine Manufacturer (SEM) which: (A) Has applied for or obtained a Certificate of Conformity OR (B) Qualifies and has received APPROVAL for an EPA Exemption. OEM must provide the name and certified engine family on each Purchase Order. |
2019 MY Part Number | 2019 MY Suffix Code | 2018 MY Part Number | Price |
Primary Contact | E-mail | Phone | Comments |
TBD | |||
Secondary Contact | |||
• | Orders must be communicated to customer service representative by: |
• | Purchase orders for engine dress component should be forwarded to the following address: |
• | Orders need to include the following information: |
• | Orders are accepted in STANDARD PACK QUANTITIES ONLY. (as noted on the price list). |
• | Orders for Engine Dress Components require NINE WEEKS LEAD-TIME. LONGER LEAD TIME components are specified on price listing. This allows GM suppliers time to manufacture components, packaging to ship. We utilize a just in time inventory system. This results in little or no inventory at our packaging location. |
• | All Freight Cost is incurred by the customer. The customer selects the mode of transportation (truck carrier of choice or Federal Express) |
• | GM is committed to the timely delivery of all orders provided with sufficient lead time. |
• | Short lead-time orders cause instability in GM, and with the suppliers. In order to supply material to customer the lead-time needs to be adhered to. |
• | No adjustments can be made on open orders within the three weeks prior to shipping. |
• | Current updates (on part numbers supersession’s, revisions on standard package quantities, and price adjustments) will be communicated to you by the Customer Service Representative. |
• | Purchased engine dress component parts shipped to OEM Marine and Industrial customers from GM OEM Sales and Engine Dress in returnable dunnage/containers must be returned to our supplier at the customer’s expense (prepaid terms). Dunnage Return Process with dunnage/container ship to addresses can be obtained from customer service representative. |
• | GM will work with the customer to provide them with Standard UN/EDIFACT transaction sets only to facilitate customer orders, controlling inventory, receiving, shipping and managing logistics. |
• | GM will provide NAFTA Certificates of Origin and Country of Origin Affidavits upon request. |
• | In case of an emergency orders, we will do our best to ship as soon as possible. |
• | If an existing order is on the schedule, that order will be filled to meet the emergency situation. |
• | A new order must be submitted (with the proper lead-time) to replace the emergency order. |
• | All other emergency orders will be filled as soon as the material is received and packaged. |
• | Expedited freight cost is the responsibility of the customer. The customer selects the mode of transportation, and supplies GM with their account |
• | Contact your Customer Service Representative to inquire about the return of non-conforming product for exchange or credit. |
• | The return material authorization (RMA) period is limited to two years (24 months) from the invoice date of shipment. |
• | The Customer Service Representative will issue a return authorization number (RMA) after receiving authorization from GM quality manager. |
• | Material is to be returned to: |
• | Tag each piece (or container if the same condition exists) with the following information: |
• | Credit will be issued to customer after the material is received at the above return address. |
Dress Part Color Code Key Definitions: | ||||||
Current: Parts in this category are currently in use on GM's automotive operations and OEM supply is confirmed for the 2019 MY. | ||||||
Soon to be Past Model: Parts in this category have come to the end of automotive production life; there is no guarantee on behalf of GM that these parts will continue to be produced through a specified time frame. These parts are currently available for sale through GSC (Griselle Rodriguez), and we will make available for sale for as long as possible until otherwise notified by the supply source of tooling issues or production cancellation. | ||||||
Part# | Description | Parts Family | 2019 MY Price | Std Pack | Lead Time | Long Lead |
12097982 | WIRE ASM-MARINE IGNITION - 13 week lead time | 3.0L | 200 | 13 wks | ● | |
01115491 | COIL ASM-IGN 181 EST - 9 week lead no exceptions | 3.0L | 216 | 9 wks | ||
14096660 | GASKET-CYLINDER HEAD | 3.0L Marine | 100 | 9 wks | ||
3754587 | GASKET | 4.3L Gen 1e | 750 | 9 wks | ||
12550025 | GASKET-EXH MANIF | 4.3L Gen 1e | 300 | 9 wks | ||
12575288 | INDICATOR ASM Replaced 10179270 | 4.3L Gen 1e | 400 | 9 wks | ||
12597888 | GASKET-EXH MANIF-Replaces 12551292 | 4.3L Gen 1e | 600 | 9 wks | ||
12657094 | GASKET-EXHAUST MANIFOLD | 4.3L Gen 1e | 72 | 9 wks | ||
12639313 | FLYWHEEL ASM | 4.3L Gen 1e ( also others) | 60 | 13 wks | ● | |
12573336 | CAP ASM OIL FIL | 4.3L Gen 1e (and big block) | 350 | 9 wks | ||
12573337 | CAP ASM-OIL FIL Replaced 10243772 | 4.3L Gen 1e (and big block) | 350 | 9 wks | ||
10183719 | OUTLET-WAT | 7.4L | 96 | 9 wks | ||
12639648 | Shield- STRTR HT | C/K and Van | 30 | 9 wks | ||
24250609 | TRANSMISSION ASM-AUTO | C/K and Van | 6 | 9 wks | ||
25828247 | Mount | C/K Truck | 120 | 9 wks | ||
3952301 | ADAPTER ASM-OIL FLTR | Gen 1e | 112 | 9 wks |
10096197 | CLAMP-IGN TIMER DISTRIBUTOR replaces 10108442 | Gen 1e | 470 | 9 wks | ||
12561347 | GASKET-INT MANIF Replaced #12550034 | Gen 1e | 164 | 9 wks | ||
03853870 | FITTING CONNECTOR (OIL FILTER) | Gen 1e | 200 | 9 wks | ||
12555714 | GASKET-CR/SHF RR OIL SEAL HSG | Gen 1e 5.7L | 1500 | 9 wks | ||
12557583 | BEARING-CLUTCH PILOT - 13 week leadtime | Gen 1e 5.7L | 150 | 13 wks | ● | |
12558251 | OIL PICKUP ASM | Gen 1e 5.7L | 25 | 9 wks | ||
10046089 | GASKET-VLV RKR ARM CVR | Gen 1e V8 | 120 | 9 wks | ||
10108676 | GASKET-OIL PAN | Gen 1e V8 | 240 | 9 wks | ||
93441568 | GASKET-INTAKE Replaced 12561347 | Gen 1e V8 | 164 | 9 wks | ||
94672691 | HVS DIST ASM V8 Replaced 93441558 - 9 week lead no exceptions | Gen 1e V8 | 200 | 9 wks | ||
94673097 | MANIFOLD ASM INT (Shipped in Returnable Dunnage) | Gen 1e V8 | 24 | 11 wks | ● | |
14096654 | GASKET-CYLINDER HEAD-Replaces 12558165 & 12558166 | Gen 1e V8 - Marine | 100 | 9 wks | ||
10349964 | ENGINE MOUNT LEFT | Gen IV | 80 | 9 wks | ||
10349965 | ENGINE MOUNT RIGHT | Gen IV | 80 | 9 wks | ||
12554522 | BRACKET ASM-P/S PUMP (Shipped in Returnable Dunnage) | Gen IV | 105 | 9 wks | ||
12561680 | FLYWHEEL - 10 week lead time | Gen IV | 50 | 10 wks | ● | |
12580069 | Dipstick, Extended 4.8L/6.0L | Gen IV | 250 | 9 wks | ||
12580352 | BRAKET ASM-IGN COIL (Shipped in Returnable Dunnage) | Gen IV | 80 | 13 wks | ● | |
12588400 | SHIELD-STRTR HT | Gen IV | 30 | 9 wks | ||
12617944 | GSKT - EXH MANIFOLD (MULTI-LAYER STEEL) - 19 week lead time | Gen IV | 225 | 19 wks | ● | |
12629992 | Throttle | Gen IV | 108 | 9 wks | ||
12637686 | Cover ASM-VLV RKR ARM | Gen IV | 42 | 9 wks | ||
12612427 | VALVE EXHA | Gen IV 6.0L with HD Heads | 3744 | 23 wks | ● | |
12622674 | COVER ASM-INT MANIF FRONT (BEAUTY COVER w/CADILLAC LOGO) | Gen IV LSA - Cadillac | 32 | 9 wks | ||
12626332 | COVER ASM-INT | Gen IV LSA - Cadillac | 24 | 9 wks | ||
12578550 | BRACKET-GEN & DRV BELT TENSR | Gen IV-LSA | 264 | 9 wks | ||
12593036 | FLYWHEEL (8-BOLT ATTACH & WIDE RING GEAR - COMMON w/LST) 17 week lead time | Gen IV-LSA | 72 | 17 wks | ● | |
12606031 | PULLEY ASM-SPCHG BELT IDLER | Gen IV-LSA | 14 | 28 wks | ● | |
12606500 | BRACKET-SPCHG BELT TENSR | Gen IV-LSA | 432 | 9 wks | ||
12606501 | BRACKET-SPCHG BELT IDLER PUL | Gen IV-LSA | 20 | 9 wks | ||
12622033 | GASKET-CYL HD | Gen IV-LSA | 30 | 20 wks | ● |
12622452 | TENSIONER ASM-SPCHG BELT | Gen IV-LSA | 10 | 23 wks | ● | |
12637617 | STARTER ASM (Shipped in Returnable Dunnage) | Gen IV-LSA | 160 | 9 wks | ||
12636227 | BELT SPCHG replaces 12628026 | Gen IV-LSA | 30 | 9 wks | ||
11588751 | Bolt | GEN V | 200 | 9 wks | ||
11561936 | Stud | GEN V | 350 | 14 wks | ● | |
11570516 | Bolt | GEN V | 250 | 9 wks | ||
11588714 | BOLT/SCREW-UPR INT MANIF CVR | GEN V | 1500 | 9 wks | ||
11588722 | BOLT/SCREW-A/TRNS | GEN V | 900 | 9 wks | ||
11588757 | Bolt | GEN V | 80 | 9 wks | ||
11610448 | Alternator Bracket | GEN V | 315 | 9 wks | ||
11611266 | Bolt | GEN V | 120 | 9 wks | ||
11611384 | BOLT/SCREW | GEN V | 100 | 9 wks | ||
12608814 | Coolant Sensor | GEN V | 180 | 9 wks | ||
12619161 | Coil | GEN V | 44 | 12 wks | ● | |
12622441 | SPARK PLUG ASM (Shipped in Returnable Dunnage) | GEN V | 100 | 9 wks | ||
12623095 | Knock Sensor | GEN V | 105 | 10 wks | ● | |
12626059 | TENSIONER ASM DRV BELT (Shipped in Returnable Dunnage) | GEN V | 576 | 9 wks | ||
12626075 | PULLEY ASM-BELT IDLER (Shipped in Returnable Dunnage) | GEN V | 576 | 11 wks | ● | |
12626076 | Belt - Truck Acc Drive | GEN V | 50 | 11 wks | ● | |
12626078 | Bracket , Gen & Drv Belt Tensr | GEN V | 75 | 19 wks | ● | |
12629519 | Idler Pulley | GEN V | 1176 | 9 wks | ||
12633447 | Spark plug wire | GEN V | 3240 | 12 wks | ● | |
12635397 | Oil Pressure Sensor | GEN V | 420 | 9 wks | ||
12637351 | BRACKET ASM-GEN | GEN V | 75 | 15 wks | ● | |
12640390 | Knock Sensor Shield | GEN V | 180 | 9 wks | ||
12644228 | MAP Sensor | GEN V | 600 | 9 wks | ||
12655055 | STARTER ASM | GEN V | 120 | 17 wks | ● | |
12657093 | GASKET-EXHAUST MANIFOLD | GEN V | 72 | 19 wks | ● | |
12659516 | SENSOR ASM OXY - Replaces 12637679 (Shipped in Returnable Dunnage) | GEN V | 100 | 11 wks | ● | |
12665555 | MODULE ASM ENG MEFI 7 | GEN V | 12 | 9 wks | ||
838653 | BOLT/SCREW-CLU PRESS PLT | MISC-MULTIPLE USAGE | 900 | 9 wks |
9440024 | BOLT-HEX HD | MISC-MULTIPLE USAGE | 325 | 9 wks | ||
10224557 | STUD | MISC-MULTIPLE USAGE | 200 | 9 wks | ||
11514516 | NUT METRIC HEX FLG replaces 11507053 | MISC-MULTIPLE USAGE | 4500 | 9 wks | ||
11514597 | NUT-M10, FLG | MISC-MULTIPLE USAGE | 1350 | 9 wks | ||
11516704 | BOLT-HV HS FLG HD SCREW GEN | MISC-MULTIPLE USAGE | 200 | 9 wks | ||
11561797 | BOLT/SCREW-START MOT-Replaces 12561387 | MISC-MULTIPLE USAGE | 150 | 9 wks | ||
11569956 | BOLT-SPECIAL | MISC-MULTIPLE USAGE | 600 | 9 wks | ||
11588724 | BOLT/SCREW-ENG OIL CLR MTG PLT | MISC-MULTIPLE USAGE | 750 | 9 wks | ||
11588727 | BOLT/SCREW-SPCHG BELT IDLER PUL BRKT | MISC-MULTIPLE USAGE | 500 | 9 wks | ||
11588740 | BOLT HVY HX ACORN FLG HD M10 X 35MM | MISC-MULTIPLE USAGE | 300 | 9 wks | ||
11588741 | BOLT/SCREW-DRV BELT TENSR | MISC-MULTIPLE USAGE | 280 | 9 wks | ||
11588742 | BOLT/SCREW-SPCHG BELT TENSR BRKT | MISC-MULTIPLE USAGE | 260 | 9 wks | ||
11588743 | BOLT M10 X 50 FLD HD | MISC-MULTIPLE USAGE | 325 | 9 wks | ||
11588744 | BOLT/SCREW-GEN | MISC-MULTIPLE USAGE | 240 | 9 wks | ||
11588749 | BOLT/SCREW-SPCHG BELT TENSR BRKT | MISC-MULTIPLE USAGE | 170 | 9 wks | ||
11588752 | BOLT/SCREW-SPCHG BELT TENSR | MISC-MULTIPLE USAGE | 200 | 9 wks | ||
11588754 | BOLT-HVY HX ACORN FLG HD | MISC-MULTIPLE USAGE | 150 | 9 wks | ||
11589264 | Exhaust Stud | MISC-MULTIPLE USAGE | 600 | 9 wks | ||
11610633 | BOLT/SCREW M10 1.5X120MM STARTER BOLT | MISC-MULTIPLE USAGE | 135 | 9 wks | ||
12550027 | BOLT/SCREW-INT MANIF | MISC-MULTIPLE USAGE | 780 | 9 wks | ||
12552096 | BOLT/SCREW-W/PMP | MISC-MULTIPLE USAGE | 450 | 9 wks | ||
12553332 | BOLTS, FLYWHEEL | MISC-MULTIPLE USAGE | 500 | 9 wks | ||
12555610 | STUD SPECIAL M10 X 132 | MISC-MULTIPLE USAGE | 150 | 9 wks | ||
12555948 | SUPPORT-SPLG WIRE | MISC-MULTIPLE USAGE | 140 | 9 wks | ||
12568387 | SPARK PLUG | MISC-MULTIPLE USAGE | 4800 | 15 wks | ● | |
12570125 | SENSOR ASM - KNOCK (Shipped in Returnable Dunnage) | MISC-MULTIPLE USAGE | 105 | 9 wks | ||
12574309 | SENSOR ASM-ENG OIL PRESS | MISC-MULTIPLE USAGE | 280 | 9 wks | ||
12580771 | PULLEY | MISC-MULTIPLE USAGE | 30 | 9 wks | ||
12580773 | IDLER PULLEY | MISC-MULTIPLE USAGE | 30 | 9 wks | ||
12589321 | SENSOR-O2 | MISC-MULTIPLE USAGE | 100 | 9 wks | ||
12596851 | SENSOR ASM-CRK/SHF POSN-Replaced 12562910 | MISC-MULTIPLE USAGE | 198 | 9 wks |
12605677 | PULLEY P/S PMP | MISC-MULTIPLE USAGE | 240 | 9 wks | ||
12609457 | O2 Sensor | MISC-MULTIPLE USAGE | 100 | 9 wks | ||
12621649 | OIL PRESS SENSOR ASM-ENG | MISC-MULTIPLE USAGE | 280 | 9 wks | ||
12622308 | O2 Sensor | MISC-MULTIPLE USAGE | 100 | 9 wks | ||
12628025 | TENSIONER ASM | MISC-MULTIPLE USAGE | 18 | 23 wks | ● | |
12642442 | MODULE ASM ENG MEFI 6 | MISC-MULTIPLE USAGE | 12 | 9 wks | ||
12647429 | Wash Coated Substrate | MISC-MULTIPLE USAGE | 270 | 14 wks | ● | |
12649040 | MODULE ASM ENG MEFI 6A | MISC-MULTIPLE USAGE | 12 | 9 wks | ||
12654117 | MODULE ASM ENG CONT MEFI 6B | MISC-MULTIPLE USAGE | 12 | 9 wks | ||
13500745 | SENSOR ASM-FUEL PRESS | MISC-MULTIPLE USAGE | 180 | 9 wks | ||
14037732 | BOLT, not same as 12338064 | MISC-MULTIPLE USAGE | 180 | 9 wks | ||
15032594 | Exhaust Nut | MISC-MULTIPLE USAGE | 1200 | 9 wks | ||
15326386 | SENSOR ASM-ENG COOL TEMP Replaced 12146312 -10 week lead time | MISC-MULTIPLE USAGE | 300 | 10 wks | ● | |
20756715 | PUMP ASM P/S Replaces 15909825 | MISC-MULTIPLE USAGE | 63 | 9 wks | ||
20880829 | Air Conditioner compressor | MISC-MULTIPLE USAGE | 1 | 9 wks | ||
23150508 | Alternator | MISC-MULTIPLE USAGE | 126 | 9 wks | ||
09442916 | SCREW ASM-CR/CA | MISC-MULTIPLE USAGE | 2750 | 9 wks |
GENERAL MOTORS LLC |
OEM Sales |
777 Joslyn Ave. |
M/C 483-720-250 |
Pontiac, Michigan 48340-2925 |
Addendum No. 1 |
1. | The issuance, receipt, or acceptance of this quotation shall not impose any obligations on any party. A binding agreement for the sale and purchase of any products or parts herein quoted shall arise only upon General Motors LLC written acknowledgment of a purchase order submitted pursuant to this quotation to the appropriate plant. |
2. | The terms and conditions of this quotation shall be considered to be a part of any purchase order issued by you and shall supersede and control any other or different terms and conditions of such purchase order regardless of any provision to the contrary contained therein. GM’s ACKNOWLEDGMENT OF YOUR PURCHASE ORDER IS NOT, AND IS NOT DEEMED TO BE, ACCEPTANCE OF ANY PROVISION THEREOF WHICH IS INCONSISTENT WITH, OR MODIFIED, ANY OF THE TERMS AND CONDITIONS OF THIS QUOTATION. Notwithstanding the foregoing, in accordance with Section 2.2 of the Supply Agreement, dated November 10, 2016, between General Motors LLC and Malibu Boats, LLC (the “Supply Agreement”), in the event of any inconsistencies, variances or disagreements between the Supply Agreement and this quotation, the Supply Agreement shall govern and the terms of the Supply Agreement shall supersede any terms of this quotation. |
3. | Factory warranty / Factory Quality terms are described in addendum No.2 for Marine customers. |
4. | GM requires that the OEM assume responsibility, and OEMs issuance of a purchase order shall be deemed to be acceptance of responsibility, for providing required service, warranty repairs and special policy adjustments and/or campaign inspections and/or corrections on all products to which this quotation is applicable. |
5. | The components quoted herein are generally understood to be used solely in the OEM's first installation including repair and not resold without adding value. |
6. | OEM assumes and shall have sole responsibility for the application of the engines in end-products produced by, or for OEM, and in supplying products to OEM pursuant to this price quotation. GM does not, thereby, certify or approve the design or implementation of any specific application by OEM. GM is not responsible for failures due to misapplication. |
7. | GM reserves the right, at any time, to alter or change the design of any component or part, and shall have no obligation to make any such alterations or changes on components or parts previously sold. |
8. | GM reserves the right to increase or decrease the dress part prices quoted or change or withdraw this quotation at any time with or without notice. The price quotations do not include any Federal, State, or Local taxes measured by the selling price of any article and the amount of any such tax shall be added to the prices quoted. Federal Excise Taxes are not applicable if purchaser provides GM with proper tax exemption certificates. |
9. | Payment terms shown reflect financial position at the time of quotation. Applicable terms and credit limits are to be established at time of initial shipment. GM reserves the right to periodically review the financial condition of the customer, and accordingly, maintain or revise the terms or credit limits previously established. |
10. | GM reserves the right to withhold shipments to customers with past-due invoices, or debits to OEM’s account, regardless of any remaining credit. |
11. | Upon failure of the customer to meet the agreed-upon open account terms provided, GM reserves the right to assess, at its discretion, a late payment charge equal to 1-1/2 percent per month on the past-due balance owed the Corporation. However, in the event that applicable Federal or State law sets a maximum rate for late payment fees which is less than 1-1/2 per cent per month, the late payment charges assessed there under shall be set at the maximum rate permitted by law. |
GENERAL MOTORS LLC |
OEM Sales |
777 Joslyn Ave. |
M/C 483-720-250 |
Pontiac, Michigan 48340-2925 |
Addendum No. 2 |
• | Engines and GM designated dress parts must have a GM-issued “Return Material Authorization” (RMA) before return shipment to a GM or supplier location. |
• | The OEM customer is responsible for engine return shipping costs. |
• | The acceptance of a Returned product and/or the issuing of an RMA will not automatically generate a replacement product for the OEM customer. A replacement product and the $100 per instance value added removal fee (if applicable) will only be issued based upon findings or confirmation from GM that the problem condition resulted from GM materials and/or workmanship. |
• | At this time no Brazilian sourced engines will be returned to the source for evaluation. In those instances where the plant accepts responsibility for the defect and supports it with an RMA the customer may receive credit thru customer manager authorization. The disposition of the product will be handled on a case by case basis. |
• | If the component purchased from GM is not installed in a final product such as a motor vehicle, watercraft, lift truck, generator etc., the OEM must “ADD VALUE” to the GM product prior to resale. |
• | In order to secure and maintain OEM customer status, the following requirements must be met: |
• | All OEM customers must have GM approved engineering capability, or have access to engineering resources. |
• | All OEM customers must have (or have access to) an established service network capable of diagnosing and repairing the GM products purchased. OEM customers must also have an established method or network to distribute service parts to their repair locations. |
• | All OEM customers must assume responsibility for application validation, and maintain records of all validation engineering activity. GM maintains the right to review validation engineering documentation. |
• | In certain instances, GM may require OEM engine customers to provide a list of customers and their final applications (products) that use GM engines. |
• | OEM customers agree to provide the GM OEM Sales Group with volume forecasts semi-annually, or as requested by their customer manager. |
• | Where possible, it is preferred that the OEM customer has one centralized location responsible for all ordering and billing functions. |
• | OEM Customer must serialize number all GM engines for service and warranty purposes (if applicable) and maintain accurate records indicating such. Transmissions are typically supplied to the OEM customer with a tag containing a serial number and build date. |
• | When ordering engines, transmissions, or parts, the OEM customer must use the GM part number on their purchase order and any other correspondence. The OEM's part number may also be included. |
• | GM will not provide engineering support for any customer considering the use of GM engines and/or transmissions for On-Highway applications. As a purchase condition, customer must demonstrate product capability & development for final application to the satisfaction of GM. |
Engine Desc | Malibu Ref PN | Pricing* (see note below) | FOB Point | ||||
2019 MY | 2020 MY | 2021 MY | 2022 MY | 2023 MY | |||
***** | ***** | ***** | ***** | ***** | ***** | ***** | St. Catherines, ONT, Canada |
***** | ***** | ***** | ***** | ***** | ***** | ***** | St. Catherines, ONT, Canada |
***** | ***** | ***** | ***** | ***** | ***** | ***** | Export Corp, Brighton, MI |
***** | ***** | ***** | ***** | ***** | ***** | ***** | Export Corp, Brighton, MI |
• | FOB Point: FCA – INCOTERMS 2010 - St. Catharines, Ontario (*****); Brighton, MI (*****) |
• | Terms: Net 25th Proximo - Payment of invoices dated the 1st through the end of the month are due on the 25th of the following month. U.S. Dollars. |
• | Packaging: Returnable |
• | Customer responsible for returnable packaging freight to FOB point |
• | Returnable packaging must be returned to GM within 30 days of shipment where possible to ensure continuous supply. |
• | Aluminum Fluctuation – ***** will be subject to adjustment due to aluminum price fluctuation of more than 5%. Adjustments to the agreed prices will be yearly based on changes to the AL LME-NASAAC Cash Settlement Price |
• | Samples requested prior to GM MY SOP: |
• | If requested after GM Pilot Stage (typically 3-6 months prior to MY SOP): Production price |
• | If requested prior to GM Pilot Stage: TBD |
***** | CONFIDENTIAL TREATMENT: MALIBU BOATS, INC. HAS REQUESTED THAT THE OMITTED PORTIONS OF THIS DOCUMENT, WHICH ARE INDICATED BY *****, BE AFFORDED CONFIDENTIAL TREATMENT. MALIBU BOATS, INC. HAS SEPARATELY FILED THE OMITTED PORTIONS OF THE DOCUMENT WITH THE SECURITIES AND EXCHANGE COMMISSION. |
• | Any interface item (“customer use” feature) that is changing (fit/form/function rule) |
• | Appearance change – even though fit/form/function may not be impacted, if customer will see a physical difference which may raise questions, we’d inform via NoC (i.e. new paint color/coating etc.) |
• | Internal changes that could impact performance (power/torque), service (including torque specs), emissions, QRD, calibration, etc. |
• | Major architectural changes to base engine (ex: going to PM rods, etc.) |
• | Internal changes that do not affect any of the above criteria |
• | Sourcing changes (which may affect piece cost) |
• | Product discontinuation or new product introduction (this is an OEM Sales Group Responsibility via different communication protocol) |
• | NoC is not to be utilized in place of a Service Bulletin (i.e. field action) |
• | Pilot/SOP dates (unless OEM’s previously notified of dates and we change them) |
1) | Application Engineer (AE) is the initiator and creates Initial Draft NoC. NOTE: If Service Parts are referenced or impacted, NoC Draft is to be created with support of CCA Service Engineering Supervisor. |
2) | Initiator has option to have “cross review” with other AE’s, then forwards final draft to OEM EGM for approval (and cc to OEM Program Manager for 7 Year Plan impact) |
3) | OEM EGM to review/approve. - If revision required, return to initiator for updates and return to step #1 - If approved – forward approval to NoC Coordinator. |
4) | NoC Coordinator assigns NoC Number, Issue Date and loads final version to website. |
5) | NoC Coordinator sends NoC to appropriate customer base (Marine vs. On-Highway) |
![]() |
GM Powertrain |
Include info as to when math models and/or parts will be available for evaluation (if req’d) |
BORROWER: | MALIBU BOATS, LLC, |
PARENT: | MALIBU BOATS HOLDINGS, LLC, |
GUARANTORS: | MALIBU AUSTRALIAN ACQUISITION CORP. |
ADMINISTRATIVE AGENT: | SUNTRUST BANK, |
LENDERS: | FIRST TENNESSEE BANK, N.A., |
1. | I have reviewed this Quarterly Report on Form 10-Q for the fiscal quarter ended December 31, 2016 of Malibu Boats, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: | |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): | |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and | |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ Jack Springer | |
Jack Springer | |
Chief Executive Officer |
1. | I have reviewed this Quarterly Report on Form 10-Q for the fiscal quarter ended December 31, 2016 of Malibu Boats, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: | |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): | |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and | |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ Wayne Wilson | |
Wayne Wilson | |
Chief Financial Officer |
(1) | the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
(2) | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Malibu. |
/s/ Jack Springer | |
Jack Springer | |
Chief Executive Officer |
/s/ Wayne Wilson | |
Wayne Wilson | |
Chief Financial Officer |
WMO!_<=E13$8D D]13ZR.@***
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M6B@#P?XNVTR^+4F93Y(!&,=:YWQ'X)T7Q*A:YM1#=J/ENX %D_$\[A[$5T?7I13:
MN%VM49?AG11X>T"VTM9VG6#=B1EVD@DGD D=ZUJ04['O4V2#5ZC**7/6DJD2
MPHHIR\TQH;12GK2#F@ HHHH)#B@]L444#0-STHI,TM ,****!"=Z4]:*.: %
MI>Q^E%%24
E+2&@#A_&'_(]>"/^OR?_ -$M7<#I7#^,/^1\\$?]?<__ *):NX'2
M@!:*** "BBB@ HHHH **** "BBB@ HHHH **** "BBB@ HHHH **** "BBB@
M HHHH **** "BBB@ H-%!H ::Y+PK_R,WB@_]/B_^BUKK3V^M
#!J&G6HMYX)$0LI/SJ<@Y]^X->C?#V^FU'P%HUW<,6
MF>V&XGOC(_I7F6H_#WXBZS;?9K_4TN+8D%H9;]BK$=.,5+;> OB19VL5K:ZN
M+>WB7:D<>HNJ@#G 6@#V^BN:\"V&N:;X9CMO$-PUQJ(D_P#)8YO;2!C_ +[KJ*ZJ7PG%6^,0]*!2GI3:U,13
M24#K24P/"OBO ]KX_ANY(RT+PQ.O'!"$[A^M>TZ??6NI6D-Y:3++!*NY&4Y!
MK%\9>&;/Q9IS61DCBU"']Y!)G+(?Y+4W?[R-CW\YQCUKR/XS:;:1OINHQJ%NIR\$F#RZ!<@D>Q[^]5XOC#J
MOE[7T^Q9QQN\QAS]*P?(\0?$/7%+AY"0=K8(BMT/'![_ ,Z
O/2N/\-H/^%L
M>*FQR+>V'X;:'L*9WU%%%09!1110 4444 5-3_Y!EW_UQ?\ D:^6]* &GV[+
MG.TY_P"^C7U'JG_(+O/^N#_^@FOES26!TVW]0A_G7IY4_P!Z_0X,Q5Z2]2RQ
M.![D5Z?