Malibu

After 20 Years at the Head of the Class,We Still Believe in Continuing Education Malibu's unique approach to building boats has pushed it to the front of the ski boat industry." -- WaterSki Magazine After 20 years of building award-winning boats you would think we had established a tradition. We have. Our tradition is asking "what if?" Without the passion for knowing "what if?" we might never be challenged to change a thing. But we're dreamers, and we hate to do anything the same way twice if we can improve upon it by changing it. With input from the world's best water sports athletes and the more than 30,000 enthusiastic Malibu owners scattered about the world, we get a lot of answers to that question. That's why our boats keep getting better. We like turning your dreams into reality. Thanks to that input, we build boats that don't just endure; they prevail. From our first Boat of the Year Award to our most recent World Record performance, Malibu boats have proven not only reliable, but also exceptional under the most challenging conditionsThere is are enduring value inherent in the Malibu name. When you own a Malibu, you have the benefit of all our rigorous testing and input from the best water sports enthusiasts in the world. With Malibu, you know each member of your family can pursue their sport as far as they want to go. It's our job to give you that extra edge. We support your dreams.

MALIBU MANUFACTURER PROFILE HISTORY Bob Alkema, President/CEO of Malibu Boats, had a different vision when he started Malibu Boats 20 years ago. He summed up his objectives in a very simple statement: "Build the best boat. Enjoy your workplace." In a rented building, with a loan from his father, Bob Alkema and his partner opened for business. With borrowed molds, production began at a modest pace of two boats per week. With Bob gelcoating, Andy Soltero laminating, Steve Marshall making the upholstery and the three of them working together to assemble the boats and take turns making deliveries, the Malibu train had left the station. It wasn't long before there was a significant backlog of orders and in August '82, Randy Woods, Osmin Orellana and Armondo Casillas joined the company. With this crew (five of whom are still at Malibu today), production was increased to five boats per week. Malibu built over 100 boats their first year. By 1986 Alkema implemented the Employee Stock Ownership Program (ESOP). "I like to let the people who work here make decisions, be creative and treat each boat like it were their own," Alkema says. With the employees having a vested interest in the success of the company, Malibu was off and running even faster. This reward to each individual gave Malibu the commitment of the employees in terms of lower turnover rates, higher-quality craftsmanship and greater creativity within production. By making each employee an owner, morale would never really become an issue. "Thinking outside of the box defines who we are," summarizes Bob Alkema. "Our passion has garnered three straight 'Boat of the Year' awards and launched us into the number-one position in our industry. And yet, we still have fun. It has to do with our company philosophy." Malibu talks about what it calls "The Malibu Difference," which they say is evident in every aspect of the company. Malibu has never been just another award-winning ski boat. Malibu is an attitude shared by everyone involved from the factory to the owners. Malibu calls itself an unusual company in that its employees actually enjoy working there. According to Marketing Director Paul Singer, it's because their priorities are different. "As employee/owners, each member of our team is a part of our winning strategy. We encourage creativity and new solutions for old dilemmas. We show appreciation for new ideas. And if they're good enough, we don't hesitate to implement them. That's how we have come to serve up more innovations in the water-sports boat industry than any other boat company in the past 10 years." As Malibu Boats approaches its 20th year, there is a remarkable resemblance between the Malibu of yesterday and arguably the largest custom ski boat manufacturer in the world today. Malibu Boats, past and present, says it defines itself through innovation and vision. Even with an expansive collection of boats for 2002, Malibu still dedicates many resources to the sports themselves. Malibu is furthering its commitment to wakeboarding with the inception of the three-stop Just Ride Series as well as continuing its sponsorship of the U.S. Open Wakeboard Championships. In addition to grassroots wakeboard events, Malibu is motoring into the world of ski fly, leaning towards slalom and has created a new event with the introduction of the Malibu Open. To add to this list of water-sports ventures, Malibu has signed a Premier Sponsorship deal with USA Water Ski to support events like the National Water Ski Championships, World Junior Team Trials, European Championships, Barefoot Nationals, U.S. Barefoot Open, Barefoot Worlds and Show Ski Nationals. Furthermore, Malibu sponsors a large ski team that is heavily involved in the designing of the boats as well as promoting the Malibu products. Not only do you see skiers such as Drew and Doug Ross, Jason Paredes, Chris Parrish and Mike Champion and boarders such as Mike Weddington and Gerry Nunn out using their Malibus, you see them working with engineers to make the boats better each season. CONSTRUCTION Malibu owners find it hard to narrow down which elements of their construction they are most proud of, claiming the company's stringent construction standards have accounted for 10 straight Product Excellence Awards and the introduction of the first ever Transferable Lifetime Limited Warranty. But the introduction of the Fiberglass Engine Chassis System (FibECS) stands out. They have opted not to argue which is better - "wood or foam" - because Malibu says neither is, pointing towards its FibECS system, which is patented and provides what they say is the strength and durability of fiberglass (without wood) with the sound - dampening that wood can provide. Since its inception in 1993, Malibu says it has had no structural defects in its engine chassis system - in over 30,000 boats. The other area Malibu brags about is its gelcoat artistry. The technology and designs have evolved since the very first Malibu Skier, but the company philosophy and the customer intimacy that made Malibu so popular in the beginning are still flourishing. Malibu's molds are constructed of dimensionally stable resins and ceramics and supported by steel frames to ensure consistency. Each mold is waxed and polished before every use to ensure each boat has a rich luster. Malibu uses a CCP 954 Series "buffback" ISO gelcoat sprayed to 23 mils thick. A Vinylester material is sprayed behind the gelcoat to serve as an impenetrable barrier from the effects of microscopic water permeation resulting in gelcoat blisters. Of the "Big 3," Malibu remains the only one willing to customize gelcoat for its customers, providing them thousands of different options. A 10-stage gelcoat process is utilized to create a perfect finish for years of beauty and enjoyment. Behind the gelcoat, Malibu lays down a 4-ounce fiberglass skin coat for print-through protection. Ceramic coring shield serves as a print-through blocker that builds strength and serves as a laminate bulker without adding as much weight as fiberglass. This is followed by hand-laid, stitch-bonded, multi-axial fiberglass. Additionally, multiple layers of hand-laid 24-ounce woven roving are also installed. The laminate utilizes Cook's CCP LSP series laminating resin, chosen for its tensile elongation and strength plus crack resistance. Built into the laminate is Malibu's Sound Suppression Technology (MSST), standard on sport V's and optional in the direct-drives. The heart of Malibu's construction is the

patented Fiberglass Engine Chassis System called FibECS. Since its implementation in 1993, Malibu has built over 20,000 boats utilizing this system with zero failures. Rather than conventional stringers of wood, fiberglass or foam, FibECS allows for the engine to be through-bolted on top of the chassis system to disperse the load of the engine, drive train and prop over a greater area. It also allows the bilge liner to be perfectly gelcoated for perfect fit. The chassis system features active air induction for better engine performance. New for 2002 is Malibu's Space Age composite flooring which is a one-piece, all-finished fiberglass floor liner. Everything is CAD designed and CNC cut or milled so it comes out precisely the same. The motor box is designed to let air escape, thereby keeping the engine cooler. All hulls and decks are blueprinted so they match, and they use Plexus fusion adhesive to create a molecular bond between the hull, stringers and deck that is stronger than the glass itself. Malibu offers bimini tops, Lowrance depth finder, Perfect Pass Digital Pro and Wakeboard Pro speed control, optional two-and three-outlet Malibu heaters with snorkel tubes. For maximum tunes, there is an optional JVC stereo system with six factory-installed Infinity speakers, 200-watt amp, Infinity subwoofer with built-in amp, stern-mounted remote. Malibu uses GM Indmar Marine Engines. Half of the boats come stock with the Vortec 310-hp carbureted engine, and half also come stock with the Monsoon 325 MPI with the Malibu-designed custom intake manifold. Upgrades include the popular Corvette LS1, with over 375 horsepower, labeled by Wards Autoweek as "one of the 10 best engines in the world." Introduced in 1999 as the power of the Corvette Limited Edition Ski Boat, the LS1 is not only most technologically advanced engine introduced to the industry but puts out the most horsepower ever in a small block. On the high end of power is the massive Vortec 8100 big block, which generates 425 horsepower. COMPONENTS GELCOATS: Cook 954 Series buffback sprayed to 23 mils thick. RESINS: Cook HTP Iso-blend. BULK LAMINATES: Multiple layers of hand-laid rovings and cloth and coring ceramics. REINFORCEMENT: HDPE, ABS and aluminum backing plates. MOTOR MOUNTS: Engine is through-bolted through a patented engine chassis system. FLOORS: Space Age Composite one-piece, all-finished floor liner. STRINGERS: FibECS engine chassis system. ASSEMBLY: Hull and deck blue-printed and chemically bonded with Plexus. DRIVE TRAIN: 1-1/8-inch stainless shaft and custom CNC-milled prop. CONTROLS: Malibu's IRT utilizing Teleflex Zero Friction U-FLEX cables. STEERING WHEEL: Wood-grain. GAUGES: 5" Borg Warner servo-driven gauges. CARPET: 32-oz Syntec Marine Carpeting. UPHOLSTERY: Premium grade G&T Mammoth vinyl with multiple density foams. key features Malibu's most vital boating amenities. UNDERWATER GEAR All underwater gear, including the Nibral tracking fins, strut, and rudder is customed designed for each hull bottom. Malibu uses 1-1/8-inch stainless shafts and CNC-milled props. They have developed a hydroponic dampening system in which water surrounds the shaft and dampens the prop's vibrations. DASH Malibu's dash is French stitched and hand wrapped, showing no gelcoat. Malibu uses five-inch servo-mechanical gauges with Venturi pickups for accuracy and maximum visibility. Each Malibu utilizes Instantaneous Response Technology (IRT). This fine-tuned marriage of rack-and-pinion steering, U-flex shifter, zero-friction throttle cables, hull design and customized underwater gear provides excellent handling. UPHOLSTERY AND CARPET Malibu uses G & T Marine Vinyl with Remay foam backing for comfort and durability. The premium-grade vinyl is 45 mils thick at a 36-ounce weight. It is treated to resist fungal growth and has 100-percent polyester backing to resist splitting and increase durability. Malibu foams are designed for durability, support and comfort. Softer densities are used for comfort and are supported by stiffer, higher-density foams for support. TOWER Malibu offers either the ECI collapsible tower or Titan collapsible tower shown here. BALLAST SYSTEM The Malibu Launch System offers both a midship and rear ballast system or a combination of the two. Ballast is controlled by independent switches. THE WEDGE Malibu's most famous part is its Wedge, which offers boaters the benefit of the equivalent of 1,000 pounds of ballast by merely dropping down the Wedge hydrofoil. This year the Wedge and new Wedge 23, which helps reduce the peakiness of the wake, have been designed to fit both the SV23 and SV23 Diamond hulls. CUSTOMER SERVICE An interview with Paul Singer, Marketing Director, Malibu Boats What is Malibu's customer service? The way Bob founded the company is that we've always prided ourselves in having a vested interest in the company. So it's not like it's hard to get someone to take care of a customer. Since we were the third or fourth company to come into this industry it was extremely important for us to get good word of mouth. If a customer wasn't satisfied, you just satisfied him. So if you ask a Malibu owner the difference between what is written and what is done ... you'd find we go above and beyond what our commitment on paper is. Even this year, we just established another standard in the industry. We were the first to offer a transferable lifetime warranty. That was because we not only believed in the product, but because we wanted people to know that structurally their boat is going to be covered. It is the right thing to do. When a customer calls our plant they don't get a recording - they talk to a real body in customer service or if they want, an engineer. If they have a situation they want to discuss, we have someone for them to talk to. We developed a customer service department that is totally separate from the warranty department about six years ago. That department's purpose does a customer satisfaction index where we get feedback from the customer on how we can better our product and how the dealer can better its service. The customer has developed our boat over the last 20 years. If someone calls in and says, "Why don't you do this," if it makes sense, we'll do it. That couldn't have happened if we had an outside source doing our customer service and warranty. On top of that our customer service center rates our dealers. Then, we allow our dealers to rate us and explain how we can become better. There's a lot of things that go into customer service. If you look at Malibu you'll notice that we stock a lot of the parts here. We have parts at both our California and Tennessee factories to service both the West and East Coast. We have a policy at the factory to turn around orders in 24 hours. Our goal is to fill it (and the only way you can fill it is by having it in stock) and get it out to the dealership. The quicker we get it to them, the faster the dealer can get the customer on the water. The Malibu Customer Service and Warranty Departments pride themselves on the immediate response and attention to detail. Malibu Owners and soon-to-be owners are given top priority by the entire staff at Malibu. Whether it is a factory tour, a phone call, an e-mail or a special visit, Malibu owners are treated as part of the team, because they are. STANDARD WARRANTY COVERAGE • Deck/Hull/Stringer Lifetime Upholstery Seat Frames • Gelcoat 12 months • Engine/Drive Train 3 years • Components 12 months parts/labor • Instrumentation 5 years parts • Upholstery 5 years parts • Carpet 5 years parts • Labor 80-100% Shop Rate WARRANTY Malibu created and strongly encourages every dealer to attend "Malibu University" for training in warranty repairs and processing claims. Dealers receive an extremely high warranty labor reimbursment rate for attending, which promotes and maintains the greatest level of customer service. Each dealer is required to have full-service warrant

y repair

facilities as well as certified EFI technicians on site to ensure a fast turnaround time on warranty claims. Extended Warranty: Malibu offers a complete "bumper-to-bumper" warranty policy for the first 12 months after purchase. Additionally, a two-year extension can be purchased so your new boat will be covered from bow to stern for a full three years. Transferability: Malibu set the industry standard as the first company to offer a transferable lifetime warranty on the boat's hull, stringer and deck. Any remaining time on the extended warranty and three-year Indmar engine warranty is also transferable. There is a $250 processing fee for warranty transfers, and all necessary forms can be obtained through the dealer or Malibu directly. DEALER NETWORK How do you qualify your dealers? There's a lot of criteria as far as making a choice. First you find a market. Then you go after the best dealer in that market. The best dealer in our eyes is someone who believes in our product, one that has the facility, service, and is willing to take the steps to be a Malibu dealer. We attract dealers who are just like us. It's the law of magnetism. Our guys are real people. You want to hang out with them. Our dealer meetings, for example, aren't there to put people under a light bulb and ask for orders. If we do our jobs right and our boats are good, our service is good, and we are doing good marketing job ... then the boat orders are going to come. Why don't the other manufacturers offer custom colors? It's a different philosophy. They have to appease shareholders. Malibu doesn't - we're employee-owned. All dealers are required to take a representation of the product line in order to be considered a dealer. We had seven "century" dealers this year, which means they all sold over 100 boats. That means they are stocking boats at all times. That's the benefit of a larger manufacturer. We provide the benefits of a larger manufacturer with the benefits of a smaller operation by offering customization. The dealer has to go to Malibu U, have a service facility and go to Indmar school. The dealer has to come to Malibu U, so they get the shop rate. Most manufacturers don't encourage outstanding customer service because they do not encourage the dealer to do warranty work on boats. We at Malibu allow them to earn full rate by taking classes, having the proper tools, and the right scan tools for power plants. If they do the things required, they will be awarded their highest rate. That encourages them to want to do warranty work. Do you have a post-sale policy? Prior to the boat even going to the dealer, we put it through a 40-point quality assurance lake test. Everyone says that, but here's the difference: If you lake test it, stick it on the truck and send it, when you build for inventory it can sit in the warehouse for months after lake testing. When you are customized like Malibu that never happens. That saves the dealer money. When it gets to the dealer he can more often than not take the shrink-wrap off, ask the customer to come down and do an on-water instruction period. It's ready to go. After the customer gets his on-water orientation (encouraged but not mandatory) they fill out a warranty card. From the warranty card we send out a customer satisfaction report to find out how their buying experience was. They have a 20-hour service that is usually their first service contact with the dealer. We want to know how that went so six months after the sale we send out another survey to find out how their service was.