MBUU - Earnings call transcript Q1 2025

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Operator

Good morning, and welcome to Malibu Boats conference call to discuss the first quarter fiscal year 2025 results. (Operator Instructions) Please be advised that reproduction of this call in whole or in part is not permitted without written authorization of Malibu Boats. And as a reminder, today's call is being recorded.

On the call today from management are Mr. Steve Menneto, Chief Executive Officer; Mr. Officer; Financial Chief Beckman, and Mr. Bruce President. Anderson, Ritchie Mr. I to will the call turn over started. Beckman to get it Please ahead, go sir.

Bruce Beckman

and you, Thank good morning, everyone.

Joining CEO, Steve call is today's me Menneto. on our

on will On business, financials. of provide Steve the XXXX commentary call, fiscal year and our discuss I first quarter will the

section today's also the issued want release considered this and then will forward-looking predictions, Relations to actual those today, I remind management's call. the copy be that press remarks on differ estimates covering and and forward-looking be everyone website. statements, call call first found on quarter Investor A that could other press for expectations, a might the We from fiscal questions. results XXXX certain may can in the that that information contain release materially including projected open company's company's of results was of

undue You new Steve? detailed in that now note measures per net over only and measures future to release. are measures discussed adjusted of also fully distributed net our the today, speak filings of we on should Please distributed encourage financial adjusted will fully these that to update results and you adjusted Steve. Reconciliations our financial the referring SEC might not income margin, EBITDA included factors. filings of more and for GAAP we earnings risk which today's will non-GAAP to as these call undertakes for certain to place review non-GAAP forward-looking be description I events. EBITDA, to call, SEC, statements, such share. are Factors income as in or financial obligation turn future our them company a reliance the affect on with no information any adjusted

Steven Menneto

joining you for call. Thank Bruce. you, Thank the all

by hardships Before we on to results, hurricanes. caused into I the like X the the would comment dive

is our affected. and people, Our Malibu, of safety those the communities customers, always heart goes paramount. out dealers At to all

Our distribution. any implemented some but and delays, have Fort experienced we to measures Pierce production minimize to facilities disruptions

partners amount of time to However, shipments of through asked for our delay some have as work challenges. operational they a short

incorporated year. have that outlook our and fiscal for our expect no the We impact into plans on

first as continued to factors retail a demand. and inventories. maintained our challenging reducing driven Turning sales approximately as channel quarter, we environment expected, fiscal market XX% we navigated macroeconomic Net the decreased on by focus by year-over-year slower

will to While and remain demand Retail rate remains encouraged payment we market. return the challenging likely need to recent the payment of interest into are we will challenging sustained bring move until cuts market. by cycle in rates, back a buyers the buyers

over As been on inventories stated, disciplined control our production focus has levels. adjusting dealer maintaining key by

compared As quarters. alignment expected, improvements quarter the X, showed QX sequential to for well coming inventory us positioning in

are quarter quarter, the to our levels. more margin with structure, performance cost bringing quickly inventory. the maintain of we nearly to has liquidated Tommy's new of market the stability. financial by In compared aligned variable business promotional us and to Adding model, our expectations to Axis as to our and which trustee first normalized resilient to adapt enables remaining in highlighted matters This stability The coupled our Malibu prior addition, our with changing improved also support returned tailwind, closure. business, the conditions all

markets. legal month, our to and this share these our to running, following newly supporting boats the selling settlement mentioned and in earlier announced which our As covers impacted all our attention we are dealers up And discussions, providing and full in ultimately improving dealers our restoring customers. prior are now market important service and locations, authorized turning great

exemplifies the boat control are with the we and to newest all-new water Cobalt and Malibu we recently launched Malibu allows Locker luxury enhanced our features Command models, excited Turning operating the This design advanced and model to system, show MXXX wave to where the all-new functionality. casual seamless Sundeck, for 'XX, including our MXXX and state-of-the-art which commitment enter watersport season will our Stash RXX. to the model catering The both year Center Max sport Malibu preset Relax serious elements enthusiasts. options. users Board include and new Easy a showcase Other notable

Boat this Separately, our testament innovation, Malibu and once World to look as recognized the the to International We quality our in and addition position is the we positive, dayboat Lauderdale This the award towboat hallmark solidifying we delivery segment. received are a our Cobalt customers Boat of in and forward very dealers brand. are pleased industry-leading that by the the announce leadership XXXX Show. Cobalt the to have all-new been also latest and embody innovative Cobalt feedback our LSV expect, This of our confidence thrilled innovation, to features lineup Choice industry-leading in been Board further to XX year features RXX, Fort Wake exceptional Wakesetter consistent to showcasing luxury introduce experience. the designed our honor. again that consecutive the We as reinforcing Surf reinforcing our our Awards Wake has Wake has customer to Year, leadership at that fifth have come Early our lineup. performance our become marking quality Riders from of reflects premium have

have led We basis segment, has our is which through share Sterndrive gained are segment basis continue segment, market On XXX continues now Pathfinder, share. of share. our of Within points. share, gains new Cobalt's being Rowan gain lastly, And XX-month by Bay which in gaining Boat XXX Cobalt represented facility, gained our XX-foot across June, points brands. XXX a trailing by to see model basis produced positive points our to Tennessee County, XX- over basis to we

This Rowan and we the great our us as harnesses integrated are our enhances Recently, Malibu facility. move in the footprint wiring continue recover. strides to County and for integration market fully vertical make of of growth consolidated conditions fully positions Electronics operational and We initiatives. producing now efficiency our out completed new

guidance. are business. As allowing ago, shipments full wholesale have align to maintaining reset our demand. actions we levels us averages, better we X with we discussed aligned the months Dealer historical year are retail necessary taken inventory with Therefore, to the

Our increase projects capacity ability the market to sooner shipments expansion should the complete, return us giving anticipated. retail also are to growth than

as expect the sequential and in lines year We see improvement to up. bottom shipments throughout the pick top wholesale

we As XXXX. long-term quarter. our forward soon outline an and discuss the more future strategy Bruce to excited now calendar more to I product details pleased our At innovation. call I about remarks we business, look host with to engage on that continue Investor of will planning Day over announce to and year in to am event, are this sharing our business. approach to the sustained further growth, operational I'll excellence and the the for I turn deeply

Bruce Beckman

Thanks, Steve.

associated unit period. our in XX%, million were prior basis mix to a and driven gross volumes compares net primarily XX.X% XX% up gross our lower and of historical shipments, improved inflation-driven modest to year to gross The primarily by excellence Our expectations. to The with profit by Saltwater was of decreased sales increases. the decreased fishing declined structure, driven in of quarter. the range decrease represented line operational to cost XX.X% marketing Selling was volume. all of the by levels resulting decreased $XXX.X increases. to and driven net demonstrating segments, decreased margin normalized results price sales. above XX%. per XX% increased in promotional XX.X% margin driven points, the was sales modest $XXX,XXX and approximately sales variable and in lower quarter XX.X% support unit made X,XXX in decreased and year-over-year where This XX% by more The $XX.X across margin units. unit XXX offset in primarily favorable period Gross model of partially event slightly nearly to Net unit, expected. primarily XX.X% a wholesale The primarily and margins a first net unit volume sales was first year-over-year inflation-driven XX.X% by from with to in decrease in sales Cobalt return per represented reduction gross decreased remaining and million, a as brands unit model price XX.X%. XX.X%. our decrease expense revenues costs. mix XX.X% primarily Cost by Sequentially, Consolidated due XX.X% Axis Malibu favorable decreased highly

XX.X% As decrease $X.X or expenses the to versus $X.X an a basis percentage with estate increased of The increased the and increase marketing Steve. fees, inclusive of expense Tommy's prior sales, for compensation-related XX by and million. selling primarily million the previously expenses higher X.X% in settlement and administrative legal the mentioned by legal driven was General trustee by year points

decreased tax for from fully $X.X Adjusted This share margin using share. million a EBITDA basis is XXX increased GAAP expenses $X.XX G&A normalized year to prior versus XXX.X% sales, to calculated XX.X% to XX.X% per prior and of income adjusted adjusted XX.X% count million Non-GAAP XX.X XX.X%. million. of for shares. versus decreased net of percentage decreased quarter XX.X%. a of approximately to loss per average fully distributed net year a quarter and rate to X.X% As $X.X share decreased a points the distributed the the income EBITDA C-Corp weighted net

in per of our adjusted adjusted the EBITDA release. see income reconciliation net share, a metrics GAAP and For distributed to tables earnings fully please

execute expenditure to to our capital the $XX million, to of million Turning priorities quarter quarter. our in in stock $X.X capital, levels our fiscal were attention for us continued year. repurchasing the allocation million on capital the $XX expenditures Capital on we track to million by expected $XX in putting

our and acquisitions. strong gives ample Our invest business pursue liquidity to the in balance value-creating and ability us sheet core

Turning to full our year. the attention

last to begun, buyers the interest is has will time many of to market a rate required are payment during cuts tell challenging. market. return how August. cuts call not which The view more be since we have Our late market you continues but in the positive, changed for the QX The to earnings updated long-anticipated

decline be As last there decline in remainder of discussed continued the demand the year. fiscal a previously, to from of retail year, reduced at rate for we expect the a albeit

long-term XXXX to to keeping uncertainties. maintain historical also our Therefore, inventory focus execute we near-term year below their the remain are our continue We a on levels. dealers despite strategy fiscal heightened in We unchanged. ability outlook expect our confident to our reducing

expect net single-digit low a continue year, fiscal points. year-over-year full to sales the percentage of increase we For

For on year-over-year the be single-digit basis comparison. year to to but challenging QX, half to return comparison sequentially, the sales challenging we growth in last our of of is sales the year. year, our prior up and down This given percentage high expect we back expect net a points the

for adjusted consolidated XX%. expect to to XX% between fiscal the continue range EBITDA margin to full We year

adjusted expect levels inventories. production digit margins of we and modest mid-single QX, a maintain For EBITDA on focus we as dealer

our underscoring inventories expected, on as in promotional spending. came reducing normalizing quarter channel first progress the in performance Our and

continue of We the provide this particularly for half back progress expect and in ease. to where tailwinds the remainder the comparisons year,

see cuts. in to the generate the strong execute We cash we prepared are are to the We are innovation structure business vertical when rate and allocation about strength then, to competitive eagerly the resurgence season. our in show capital allow the the positioning given Until and market And of flow market, recovers. interest flexible and cost our support encouraged to integration our resilient optimistic anticipating are remain strategies on we a recent priorities. bringing model, demand industry us boat

that, strategies, combined up With drive I'd growth for long-term open and questions. team, and brand that strong call value will confident our dedicated our the portfolio to like creation our are for We shareholders. with

Operator

The Instructions) question with Securities. comes from Riley (Operator Eric B. Wold first

Eric Wold

how me. in A kind a skew And you the now to the follow-up. you buyers more strength for can all? think have kind models expect market, And ASPs, of and whatnot of into return questions a that the of that little forward? bit at of then have any you kind normalized, the incoming baked I these from ASPs are shifts orders I couple how payment and dealers if to levels the guess, as upward/downward or ordering? sustainable options all, seeing I you into of quarter in can of going be in inventories first for dig maybe guess would

Steven Menneto

very I premium mix it's and just really where what models would are It's buyers bringing Particularly line, new and Well, right are all offerings by Yes. have year of the they're Malibu, in say driven premium that that this premium a market introducing driving the the is, the market the we're lot is cash to lot in now. that models. the now. we're Malibu we and market, right a

Saltwater skewing which invested of was And the well the towards as as mix and QX. are Cobia driving the that Yes. the driven that's a lines so, by larger product really strong has in ASPs Malibu within models. as mix we've Pretty the well, there pursuits, -- And been big in be continues quarter, well. driver our to

Eric Wold

boat are if in returning terms your in kind to What then we're would now. your mentioned know their they're of little right start how markets now the right at markets? of margins heavy out bit the you to you promotional of plays your you promotional And that by seeing you from kind boat And boat of think what benefited show at were I more in that And Or of competitors move expect activity? in see kind show a too still the you shows? season their inventory do as normalized levels. activity the season through

Steven Menneto

mean sequentially spending QX to so in They lower to on a year-over-year expect we inventories in spot. get good basis. I because we our as QX, Eric, in not Yes, were improve saw we expected environment. invested a promotional competitive they our but heavily lower be were it a

We competitive retail continue expect a be to market. to it

Operator

question next is from Kennison The with Craig Baird.

Craig Kennison

since in or operations. to opportunities chair. observations of people had been just challenges now that that made you've And been curious assess you've and about XXX about it's chance lot what Steve, I'm a a meet you've days

Steven Menneto

the Sure. of Operations are the business. really core

dynamics thought customers you able solidifies and to him is been if consumer, bit. potential is well. it little pillar demand a with sharpen with good going work it to in, jump lot has got to well We'll When think monitor at business, really current look fullest maximize good position. I those the of we what our dealers the positioned and history alluded of a The the the returns while on look we're continue help we're Ritchie strength with That think as our the aspect do to how in The our in game more call. in industry, do where this we our monitor of and and our stores company drive forth to from how to to of into I particularly retail payment at a we in confidence I've recover, we're it I downcycle market a the was to so buyers a to business. going. see. how and earlier are Malibu deeper learning and that's strong challenge to which and look buyers being

dealers have to strength, commercial We and on we'll work and operational continue our help demand meet to side retail. of our business to maximize our

Craig Kennison

act dynamic to the partnership that how dealer. have you And if showroom similar for came to such to your in lose an be more plan Is don't in with do space irrationally for I'm you a take just Otherwise, boats? world, that to like there category, channel inventory you boat -- dealers as possible. that distribution that to much Or feel you've the a have you would key seems OEMs that brand arrangements incentive got you share. be wondering, with respect from powersports they nature seems as of up

Steven Menneto

Yes.

between I powersports think and marine there is difference a clearly.

educational. our with that different core of right? heading at show and here the the segment businesses Malibu and of to are we to we'll Partnering is and size of opportunities different. business. in one We're there we and and OEM be the dealers the in is at in a dealers are brands, in floor. an segments engage on the the of brand and so continue couple from to work think industries, units how to the doing. been dealers share understand challenges days, a been marine right, But meeting, meet they sure business meeting, our and noted, particular the continue with Council with yes, Dealer plan together. for what our It's itself, want learn Cobalt the I and dynamics than we're dealers of dealer can are and we the to be only the what which some meet across forth, OEM. It's relationships represent part But in the we'll been the the that's them partnership carrying in core, a marine both partner creates so of opportunities to been Pursuit dealer really a continue be powersports, how dealers make I've business their space the as better to is and and grow what dealer to

Operator

James. The Altobello next Joe from question Raymond with comes

Joseph Altobello

Steve. kind your a margins and in high I were In you was better quarter? what was maybe what guess positive seems expected. It little that's you, mentioned than first level, at But quarter prepared better related. the like I remarks, a that? assume you drove question surprise for the are of better. sales And the

Steven Menneto

in us The and positives, the of what doing been. the again, has Joe, in it in The been have Both pay in so core mainly terms that's Those this Malibu, we've seen been satisfying are to products Pursuit continues quarter. it's, have boats. And kind of new been customers. have driving really really been the business, the share, well. helping first of off innovation where

Joseph Altobello

Got a that here? little months the environment seasonal a And that surprised hear as little I much that. just of it's was the a winter on enter to Okay. easing it. bit. sounds promotional we is follow-up How like

Steven Menneto

working right get I inventories the us having think It's the little to those smartly under our is control, with also position. a it dealers bit seasonal. in

we're weekend. a Lauderdale, Right here optimistic said, but the monitor seasonal. tell over will as promotional encouraged off think I we time the it's little go. that show, now now, We're season, we boat about show boat right we're where Fort As environments entering kick we'll as the

reduction through some inventories. pretty continue what's But their it's monitor competitors a of necessary good working I think other think we'll be shape. And to we're competitive. in to I

Operator

Zatzkin KeyBanc Markets. question next have We the Capital from with Noah

Noah Zatzkin

kind on changed front. thought process kind potentially pursuing one M&A remained the of pontoons? has of kind the just of or around the same Maybe I guess,

Steven Menneto

it What for continue And a Thought process makes our pontoons But hasn't makes the If we're we'll it option option for said changed. opportunities. sense. if M&A may us. an we've right we business, get sense we value-creating has look. for It an opportunity, forward. take remains be previously for us been to move if looking

Noah Zatzkin

too fine you put to in I not cuts relatedly, fiscal of unit And but you're And your point like and then for retail magnitude? guess the year expectations terms kind plan, have of thinking it, given a within on like industry of how about rate number maybe units?

Bruce Beckman

specific to guidance shared but in We be in mid-single-digit give have and the retail that expect unit we that the range. Yes. participate don't we -- markets we down

have continue to We and what that's we that, believe. shared

Noah Zatzkin

then on thinking And plan, rate kind about just that? cuts the of you're in how

Bruce Beckman

speculate don't Yes. interest mid-single-digit factoring range. I'd build our to the pleasantly cards is point rekindle on hands, surprised in we and that activity the enough at buyers. deal future What on have rate We be industry We that's cuts. to cuts. the that into of in love we in interest cuts visible rate don't of some say a just would payment down there We percentage the forecast the if kind are with

environment have the place, given how and upturn ability -- we confident capacity in that's have can and so our that we're if materializes. to support respond how with schedule in we ramp we we And that the factories the an

Operator

next question Bryan Griffin from comes with D.A. The Davidson.

Griffin Bryan

within you guess, Raye through retail It of Sea the this there like for categories. seems relative any that this rest kind the to? like looks to continued pretty is October? do of what attribute good I indication the September And category specifically

Steven Menneto

seems a when some see be is AYes. What an always things, the there flow -- of we registration, bit when would to say lag warranty a of kind of internal I boats little we of through SSI. and

as September well in seeing SSI you're really the well. to QX flow kicked numbers promotion the are numbers event Tommy's our activities is boats timeframe. liquidation showing think starting I as gear as what through some the of the into in Those high up

Griffin Bryan

signs it. that insurance impacts, help claims then the products with is with early destocking that some Got sizable there your hurricane for be there will And dealer any could specifically?

Bruce Beckman

-- people pay quickly companies That's something want I the to get boat their a have in not my counting to on cash to new base pocket buy enough is to to insurance there speculate guidance place, I hear takes will would activity timing be on that that want on. replacement We -- some to we wouldn't likely activity. that really but of the anecdotally exact

Operator

Greg from The Wolfe next comes Badishkanian Research. question from

Frederick Wightman

I to -- on Wightman Fred It's impact. for just to I the back come hurricane wanted Greg.

year dealers the any if made asked deferrals some in of storms. shipments, for what, any, how of some thought shipments the in you just you way that would a out And of comment the the if initially? us that more shake sort wondering XQ think the that's if a to be. results, half up shift had delays the the to the showed in of or could with back I help I'm tied year versus might if you shift timing reported

Steven Menneto

ahead, Go Bruce.

Bruce Beckman

it's minimal. shift what QX the would I have Fred, impact. in say shipped modest it's a just what But back from might we into half. It's a to Yes. -- minimal

Frederick Wightman

I'm seeing it's markets you those perspective underperform market to or Okay. of really in the still impacted you're kind That's seeing former a you're helpful. if closer Tommy's some markets. share quarter, had broadly? from Tommy's if or lag share impact talked wondering what about last And those from past,

Steven Menneto

our up where dealers markets. the that time, as months competing SSI. that flush that those go of their are markets then going to a battles And share now the in through back Yes. new until to to a couple it's And market those in we ones a been starting liquidation would when more I boats kind through tailwind next pretty get the for of Tommy's are the normalized respective I on big activity markets. us. expect are mean it's drag be that see

Operator

comes question Next Jaime from with Katz Morningstar.

Jaime Katz

perspective. a press line encouraging that release I where wanted to you from about some macro your articulate ask signs you're in seeing the guys

in if rhetoric that's commentary, maybe interest the the different start and I'm and think of rate so a just something curious beyond was behaving bit cuts OEMs I better. the little

Bruce Beckman

No.

interest really mean I them that for long think started of They've now rate a talking actually time. I cuts. about to it's happen. start we've been

into think help was of we in back commenting partners our feel on, been hard comment. going like inventory We're interest dealer also, show color at the have and spirit down spirit line comment. great season to fiscal roster behind model the healthy with into little that a get end worked the the year, last a and like boat the optimism rates where of inventories that so going pretty more started I that we've to now lineup their we come a shows. That's we're maybe probably on

Jaime Katz

about, Okay. that give thinking are on inflation? us the some help some what there? cost through any input And break color that Are seeing you back year? points input expect sort ease maybe cost just inflation with higher there half I'm throughput and the to of you then improve of can does guys

Bruce Beckman

where of is a guess come Jaime, be very we'll the really say where seeing certainly we'll benefits. more costs see seeing would fixed expect Not margin. be increase, sales I down see where tailwinds was more line deflation. on the it wouldn't -- we'll come of will our I that it get on And the within as that I I the cost volume peak leverage I of say, it mean, mean, that volumes we're inflation. mean I of will I from into in would COVID. what modest it's not substantially turned it though. has down, Yes. quite

Operator

showing not for am any further time. I call. participating. conference concludes This at you. questions this you Thank Thank today's

You disconnect. may now

Malibu Boats (MBUU) 31 Oct 242025 Q1 Earnings call transcript