Financial Data and Key Metrics Changes - JBT Morell's first quarter revenue exceeded guidance by $19 million, driven by better-than-expected equipment shipments and strong recurring revenue [17] - Adjusted EBITDA margin was 13.1%, outperforming guidance by 60 basis points, attributed to volume flow-through, favorable mix, and good expense control [17] - Free cash flow for the quarter was $18 million, including approximately $42 million in one-time M&A related payments [19] Business Line Data and Key Metrics Changes - JBT segment revenue increased by 4% year over year, or 5.6% on a constant currency basis, with adjusted EBITDA of $61 million, a 6% increase [18] - MRL segment revenue was flat year over year but grew 2% on a constant currency basis, with adjusted EBITDA of $51 million, a 19% increase [19] Market Data and Key Metrics Changes - Demand from the poultry industry continued to recover, contributing to a 12% year-over-year increase in orders [6] - The company experienced broad-based strength across global regions, with healthy orders in meat, beverage, pharma, and pet food [6] Company Strategy and Development Direction - The company is focused on integrating its operations to enhance service capabilities and product offerings, positioning itself as a leader in sustainable food solutions [15] - JBT Morell aims to leverage its global footprint and available capacity to manage tariff impacts and maintain competitive positioning [8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate macroeconomic uncertainties and tariff impacts, noting that approximately half of the revenue comes from resilient recurring sources [11] - The company has temporarily suspended full-year financial guidance due to uncertainties but provided second-quarter guidance reflecting strong competitive positioning [21] Other Important Information - The estimated annualized cost impact from tariffs is approximately $50 million to $60 million, with efforts underway to mitigate these costs [10] - The company is on track to achieve targeted cost synergies of $150 million by the end of 2027 [20] Q&A Session Summary Question: Thoughts on guidance and customer behavior changes - Management indicated that the decision to pull full-year guidance was due to lack of clarity in the environment, with no significant changes in customer behavior noted [26][28] Question: Differences in customer behavior between U.S. and international markets - Management noted ongoing conversations regarding equipment pricing and potential shifts in manufacturing locations due to tariffs, but demand remains strong [30][33] Question: Impact of tariffs on recurring revenue - Management believes that recurring revenue will remain strong, with no significant pullback observed in parts orders [35] Question: Details on backlog and order delays - Management clarified that backlog figures may differ due to foreign exchange impacts and adjustments during the integration process, with no cancellations reported [45] Question: Insights on fish market performance - Management noted challenges in the white fish market but highlighted improvements in the salmon industry, indicating a positive outlook for production growth [62][65]

Financial Data and Key Metrics Changes - For Q1 2025, the company achieved revenue of $19.5 million, an 11% increase from $17.6 million in Q1 2024 [4][11] - Gross profit margin was reported at 76.1%, consistent with Q1 2024 [12] - GAAP diluted earnings per share increased by 16% to $0.37 from $0.32 in Q1 2024 [13] - Non-GAAP adjusted net income was $5.3 million or $0.42 per diluted share, up 17% from $4.6 million or $0.36 per diluted share in Q1 2024 [14] Business Line Data and Key Metrics Changes - Revenue from IV infusion pump systems grew 16% to $6 million, while disposable revenue increased 23% to $4.9 million [11][12] - Patient vital signs monitoring systems revenue remained steady at $6.5 million [12] - Domestic sales accounted for 82% of total revenue, up from 76% in Q1 2024, with domestic revenue increasing 19% to $16 million [12] Market Data and Key Metrics Changes - International sales declined 15% to $3.5 million [12] - Device revenue increased 9% to $13 million, driven by pump revenue and FMD systems [12] Company Strategy and Development Direction - The company is focused on increasing monitoring sales in 2025, anticipating a decline in pump revenues later in the year [21] - The new 3,870 MRIV pump is expected to be a revenue driver in 2026, with clearance anticipated in mid-2025 [9][10] - The company is nearing completion of a new facility, with full operations expected by July 2025 [10] Management's Comments on Operating Environment and Future Outlook - Management remains optimistic about the impact of tariffs, noting that only 3% of revenue is connected to high tariff sources [6][7] - The FDA's responsiveness has been positive, with ongoing interactions indicating progress towards device clearance [25][27] - The company expects Q2 2025 revenue guidance of $19.7 million to $19.9 million, reiterating full-year revenue guidance of $78 million to $82 million [10] Other Important Information - Operating expenses were $9.4 million, or 48% of revenue, down from 49% in Q1 2024 [12] - Cash flow from operations was $4.3 million, up 10% from $3.9 million in Q1 2024 [14] Q&A Session Summary Question: Any anomalies in disposable revenue growth? - Management indicated that some backlog was worked down in Q1, contributing to the growth, but expects future growth to align with capital growth [17][18] Question: Confidence in monitoring sales recovery? - Management emphasized efforts to boost monitoring sales through adjusted compensation structures, with strong bookings already seen in Q2 [20][22] Question: Status of FDA interactions and clearance timeline? - Management noted ongoing interactive questions from the FDA, suggesting a positive sign, with expectations for clarity in the next three to four weeks [24][27]

Financial Data and Key Metrics Changes - The company reported revenue of $193 million and EBITDA of $20 million for the first quarter, meeting expectations [16] - Orders increased by 6% to $201 million, resulting in a book-to-bill ratio of 104% [16] - Free cash flow generated in the first quarter was $7 million, three times higher than the same period last year, marking the seventh consecutive quarter of positive free cash flow generation [22] Business Line Data and Key Metrics Changes - The Drilling and Completion segment saw a revenue increase of $5 million, driven by a rebound in sales of consumables and capital equipment [17] - The artificial lift and downhole segment experienced a decline in revenues due to unfavorable product mix and timing of shipments [18] - The Valve Solutions product line faced negative headwinds due to tariffs impacting demand, leading to a buyer strike [20] Market Data and Key Metrics Changes - Oil prices have declined significantly, hovering near four-year lows, which may lead to a reduction in rig counts and revenue starting in the third quarter if prices do not rebound [8] - The company anticipates a modest 2% to 5% decline in global drilling and completions activity for the year, with North America rig count expected to soften [13] Company Strategy and Development Direction - The company is focusing on mitigating tariff impacts, optimizing the supply chain, and reducing costs and inventory [9] - Plans include increasing assembly activities in Saudi Arabia and Canada to serve global markets more efficiently [11] - The company aims to utilize 50% of free cash flow for debt reduction and the remaining for strategic investments, including share repurchases [24] Management's Comments on Operating Environment and Future Outlook - Management expressed concerns about economic uncertainty due to trade policies and commodity price pressures, indicating a potential decline in revenue if oil prices do not recover [7][8] - The company remains confident in its ability to generate free cash flow and maintain a strong balance sheet, with no debt maturities until 2028 [23] - Long-term growth is expected to be driven by increasing energy demand due to population growth and economic expansion [29] Other Important Information - The company has strategically de-risked its supply chain to minimize dependence on specific countries and provide sourcing flexibility [11] - The balance sheet has improved significantly, with a net debt of $146 million and a net leverage ratio of 1.56 times [23] Q&A Session Summary Question: Can you elaborate on the strength in the Subsea side despite a slowdown in rig counts? - Management highlighted strong bookings in Subsea due to customer adoption of new products and a significant market share in remote-operated vehicles [35][36] Question: What products saw strength in the drilling completion segment? - Management noted a rebound in sales of frac pump power ends and wireline products, indicating increased activity despite fewer crews [38][40] Question: How are share repurchases managed in relation to leverage ratios? - Management explained that share repurchases are timed based on net debt measurements within 30 days of buying back shares, allowing flexibility in execution [46][47] Question: What is the impact of tariffs on pricing and demand? - Management acknowledged that tariffs have led to a buyer strike in the valve product line, affecting demand and pricing strategies [54][82] Question: How does the company plan to manage cash and debt reduction? - The company plans to use half of its free cash flow for net debt reduction and will continue to monitor market conditions for share repurchases [84][85] Question: What is the outlook for the Veraperm product line in Canada? - Management indicated that the recent performance was temporary and attributed to customer and product mix, with expectations for improvement in the second half of the year [63][65]

Financial Data and Key Metrics Changes - Sales for Q1 2025 were $417 million, a decrease of 2.4% compared to $427 million in the same period last year, primarily due to unfavorable foreign exchange and lower volumes [16][26] - Adjusted EBITDA was $82 million, or 19.6%, compared to $80 million, or 18.8%, in the prior period [17][28] - Adjusted earnings per share was $0.63 in Q1 2025, up from $0.60 last year [29] - Adjusted free cash flow was $20 million, compared to an outflow of $13 million in the prior year [29] Business Line Data and Key Metrics Changes - The company reported a gross margin of $111 million for Q1 2025, slightly down from $112 million in Q1 2024 [26] - Selling, administrative, and research expenses increased to $55 million, up by $2 million from the same period last year [27] - Joint venture income was $9 million, down $1 million from the previous year [27] Market Data and Key Metrics Changes - The company expects the heavy-duty market in the U.S. to decline by 5% to 15% and medium-duty production to decrease by 10% to 20% [23][24] - The overall expected total company revenue for 2025 remains in a range of flat to up 4% compared to the prior year, with global sales expected between $1.67 billion and $1.735 billion [24] Company Strategy and Development Direction - The company is executing a four-pillar growth strategy focused on growing share in first fit, accelerating profitable growth in the aftermarket, transforming the supply chain, and expanding into the industrial filtration market [11][12][15] - The company is actively pursuing inorganic growth opportunities in industrial filtration, although economic uncertainty is softening M&A activity [15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating the evolving tariff environment, although the overall impact on end markets remains unclear [18][19] - The company anticipates a flat year-over-year performance in aftermarket revenue, with pricing expected to contribute approximately 3.2% to revenue growth [20][21] - The management is closely monitoring regulatory changes and their potential impacts on the business, particularly regarding emissions standards [75][76] Other Important Information - The company has repurchased $10 million of stock in Q1 2025, bringing the total repurchased since the program announcement to $30 million [6] - The effective tax rate for Q1 2025 was 21.3%, down from 22% the previous year [30] - The company ended the quarter with $183 million in cash and $583 million in available liquidity [31] Q&A Session Summary Question: Potential manufacturing transitions due to tariffs - Management indicated that they are not planning long-term manufacturing changes but are focused on short-term mitigation actions such as utilizing USMCA certifications and adjusting delivery routes [35][36] Question: M&A opportunities in the current environment - Management acknowledged that while the market has made M&A activity more challenging, they remain focused on building a strong pipeline of potential targets [39] Question: Revenue outlook amidst currency and market changes - Management confirmed that the revenue outlook remains near the midpoint of their guidance, despite market softness and changes in freight activity expectations [44][45] Question: Pricing expectations for the year - Management expects pricing to ramp up throughout the year, with a gradual increase leading to an overall expectation of 3.2% for the full year [50] Question: Impact of potential rollback of emission standards - Management is monitoring the regulatory review closely and believes they are well-positioned to support customers regardless of the outcome [76][78] Question: Shipping route reconfigurations to mitigate tariffs - Management confirmed that they have already enacted some shipping route adjustments and are continuously looking for additional mitigation strategies [85]

Financial Data and Key Metrics Changes - First quarter net sales were $443 million, a decline of 6% year-over-year or 3% on a constant currency basis [8][24] - Volumes declined approximately 1.5%, with new business wins and acquisitions contributing approximately 1% [25] - Gross margins improved 120 basis points to 36.4% compared to the lows in the fourth quarter of 2024, but declined year-over-year due to higher raw material costs [10][26] - Adjusted EBITDA for the first quarter was $69 million, reflecting a sequential increase of $4 million, with adjusted EBITDA margins at 15.6% [11][26] Business Line Data and Key Metrics Changes - Asia Pacific segment net sales declined 2% year-over-year, but organic volumes increased approximately 1% [27] - EMEA segment net sales were down 7% year-over-year, with total sales volumes declining 3% [29] - The Americas segment net sales declined 7% year-over-year, with volumes down 3% due to soft industrial activity [30] Market Data and Key Metrics Changes - Overall market demand was softer than anticipated, with aggregate market declines estimated at a low to mid single-digit percentage [6][21] - The company outperformed the aggregate of the end markets, particularly in the Asia Pacific segment, which showed growth despite challenging conditions [9][10] Company Strategy and Development Direction - The company is focused on returning to growth, reducing complexity, and effectively deploying capital [11][12] - Strategic investments include acquiring three companies to enhance the portfolio and expand the addressable market [7][19] - The company is advancing a $20 million cost program expected to deliver approximately $15 million in benefits primarily in SG&A [14][26] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in mitigating tariff impacts through a local for local strategy and maintaining strong customer relationships [8][22] - The outlook for 2025 anticipates a low single-digit percentage decline in underlying market growth rates, with expectations for revenue and earnings to align with 2024 levels [21][22] - Management noted a strong pipeline of trials and business development opportunities, aiming for above-market growth in 2025 [20][21] Other Important Information - The company is investing in a new facility in China to enhance local supply capabilities [15][34] - Capital expenditures for 2025 are expected to remain at 2.5% to 3.5% of sales [34] Q&A Session Summary Question: Impact of tariffs on input costs and overall demand - Management indicated that while there are some raw material purchase impacts, the main concern is the uncertainty affecting overall demand [41][46] Question: Details on strategic initiatives to simplify operations - Management discussed efforts to reduce complexity, improve brand awareness, and enhance customer experience through technology and inside sales channels [47][52] Question: Expectations for second quarter EBITDA growth - Management expects modest sequential improvement in EBITDA for Q2, driven by seasonal demand and contributions from recent acquisitions [55][56] Question: Volatility in order patterns and customer feedback - Management noted increased order volatility, particularly in Europe and The Americas, with customers managing inventories prudently [59][60] Question: Contribution from acquisitions and outlook - Dipsol is expected to contribute approximately $80 million in sales for 2025, with strategic fit and synergy potential highlighted [67][68] Question: Capital allocation strategy - Management emphasized a balanced approach to capital allocation, focusing on growth investments, debt reduction, and shareholder returns [75][76]

Financial Data and Key Metrics Changes - First quarter net sales were $443 million, a decline of approximately 6% from the prior year or 3% on a constant currency basis [7][23] - Gross margins improved 120 basis points to 36.4% compared to the lows in the fourth quarter of 2024, but declined year over year due to higher raw material costs and product mix [10][24] - Adjusted EBITDA for the first quarter was $69 million, reflecting a sequential increase of $4 million, with adjusted EBITDA margins at 15.6% [11][25] Business Line Data and Key Metrics Changes - The Asia Pacific segment saw net sales decline by 2% year over year, but organic volumes increased approximately 1% [26] - EMEA segment net sales were down 7% year over year, with total sales volumes declining 3% [28] - The Americas segment experienced a 7% decline in net sales year over year, with volumes down 3% due to soft industrial activity [29] Market Data and Key Metrics Changes - Overall market conditions were softer than anticipated, with aggregate market declines estimated at a low to mid single digit percentage compared to the prior year [5][20] - The company outperformed the aggregate of the end markets, with total volumes inclusive of acquisitions declining approximately 1.5% [8][10] Company Strategy and Development Direction - The company is advancing a $20 million cost program expected to deliver approximately $15 million in benefits primarily in SG&A [6][14] - Strategic investments included the acquisition of three companies to enhance the portfolio and expand the addressable market [6][18] - The company aims to enhance customer intimacy and streamline operations to improve efficiency and reduce complexity [12][16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in mitigating tariff impacts through a local for local strategy and maintaining strong customer relationships [7][21] - The outlook for 2025 anticipates a low single digit percentage decline in underlying market growth rates, with expectations for revenue and earnings to align with 2024 levels [20][21] - Management noted a strong pipeline of trials and business development opportunities, expecting to drive above market growth in 2025 [19][20] Other Important Information - The company is focused on improving customer satisfaction through initiatives that reduce lead times and enhance cost competitiveness [13][15] - Capital expenditures in the first quarter were approximately $12 million, with expectations for 2025 capital expenditures to remain at 2.5% to 3.5% of sales [32] Q&A Session Summary Question: Impact of tariffs on input costs and overall demand - Management indicated that while there are some impacts from raw material purchases, the local sourcing strategy helps mitigate most tariff effects [39][40] Question: Details on strategic initiatives for simplifying operations - Management discussed efforts to reduce complexity in product lines and improve brand clarity, along with enhancing customer service through technology [46][48][50] Question: Expectations for second quarter EBITDA growth - Management expects modest sequential improvement in EBITDA for Q2, driven by seasonal demand and contributions from recent acquisitions [52][54] Question: Volatility in order patterns and customer feedback - Management noted increased order volatility, particularly in Europe and The Americas, with customers managing inventories prudently [58][59] Question: Capital allocation strategy amidst market conditions - Management emphasized a balanced approach to capital allocation, focusing on growth investments, debt reduction, and shareholder returns [72][74]

Financial Data and Key Metrics Changes - Net sales for Q3 FY2025 decreased by 4% to $260.9 million compared to $271.9 million in Q3 FY2024, driven by a 7.9% decrease in sales volume, partially offset by a 4.2% increase in the weighted average sales price per pound [12][19] - Gross profit increased by $6.7 million or 13.7% to $55.9 million, with gross profit margin rising to 21.4% from 18.1% in the prior year [15][17] - Net income for Q3 FY2025 was $20.2 million or $1.72 per diluted share, compared to $13.5 million or $1.15 per diluted share in Q3 FY2024 [18] Business Line Data and Key Metrics Changes - Sales volume decreased by 9.2% in the consumer distribution channel, primarily due to an 8.3% decrease in private brand volume, with significant declines in bars volume [13] - Sales volume for branded products decreased by 12.9%, mainly due to a 33.8% reduction in Orchard Valley Harvest sales [14] - Sales volume increased by 6% in the contract manufacturing distribution channel, driven by increased granola volume processed [14] Market Data and Key Metrics Changes - The snack, nut, and trail mix category saw a 2% decline in pounds but a 2% increase in dollars, indicating rising prices [24] - Fisher snack and trail mix performed worse than the category with pound shipments down 17%, while Southern Style Nut Brand saw a 10% increase in pound shipments [25][26] - The recipe nut category was down 1% in pounds but up 10% in dollars, reflecting increased prices for walnuts and pecans [27] Company Strategy and Development Direction - The company plans to invest approximately $90 million in equipment to expand domestic production capabilities and improve infrastructure by the end of FY2026 [5][6] - The focus remains on adapting strategies to meet evolving customer needs and managing costs amid rising commodity prices and tariffs [5][10] - The company is committed to innovation and cost-saving opportunities to mitigate commodity pressures [26] Management Comments on Operating Environment and Future Outlook - Management acknowledged a challenging macroeconomic environment impacting demand for nuts and snacks, emphasizing the need for strategic adaptations [5][7] - There is confidence in the strategic investments made in production and infrastructure to drive efficiencies and deliver innovation [6][30] - Management anticipates potential decreases in commodity prices due to demand destruction from high retail prices [55] Other Important Information - The total value of inventories increased by $47.1 million or 22.4% year-over-year, primarily due to higher quantities and costs of finished goods and raw materials [18] - The weighted average cost per pound of raw nuts and dried fruit increased by 33.9% year-over-year [18] Q&A Session Summary Question: Regarding tariff exposure and passing costs to customers - Management indicated that discussions are ongoing with key customers to pass on tariff-related cost increases, particularly for high-value commodities [33][34] Question: On the profitability of the cashew and mixed nuts segment - Management confirmed that the cashew and mixed nuts segment remains profitable, although higher tariffs could impact consumer demand [36][37] Question: Expectations for gross margin levels in the next quarter - Management suggested that gross profit per pound should be assessed by excluding the impact of inventory valuation adjustments [44] Question: Details on the $90 million capital expenditure - The investment will support growth in the bar category and expand production capacity across various business segments [45][46] Question: Strategy for upcoming quarters and market volatility - Management is focused on promotional programs and pricing strategies to navigate market volatility and ensure the right product mix is available [62]

Financial Data and Key Metrics Changes - The company reported a revenue growth of 16% in Q1, significantly exceeding expectations, primarily due to favorable timing of material receipts [21][28] - Adjusted EBITDA for the quarter was $82 million, representing a 17% increase year-over-year, with an adjusted EBITDA margin of 10.3%, reflecting a slight margin expansion of 10 basis points [23][24] - Net earnings for Q1 were $50 million, with diluted EPS of $0.19, marking a 7273% increase, while adjusted net earnings were $54 million, with adjusted diluted EPS of $0.20, up 42% [26][27] Business Line Data and Key Metrics Changes - The Advanced Sensing and Computing (ASC) segment saw an 18% revenue growth, while the Integrated Mission Systems (IMS) segment's revenue increased by 11% [22][24] - ASC adjusted EBITDA increased by 2%, but the margin declined by 130 basis points due to negative contract adjustments and increased costs from a sole source supplier [24][26] - IMS adjusted EBITDA rose by 38%, with margin expansion of 260 basis points, driven by favorable contract adjustments and increased volume from the Columbia Class program [25][26] Market Data and Key Metrics Changes - The company secured nearly $1 billion in bookings during the quarter, resulting in a book-to-bill ratio of 1.2, marking the thirteenth consecutive quarter with a book-to-bill above one [6][7] - The backlog increased to $8.6 billion, reflecting growth on both a year-over-year and sequential basis [7][28] - Domestic growth was highlighted, while international growth faced headwinds due to timing issues related to deliveries supporting Ukraine [35] Company Strategy and Development Direction - The company is focused on enhancing its capabilities in layered air defense, counter UAS, and shipbuilding, aligning with national defense initiatives [10][11] - The company is investing in AI technologies and electric propulsion systems, aiming to capture significant demand in these areas [18][19] - The strategic emphasis is on maintaining a strong position in defense priorities while ensuring efficient program execution and innovation [20][30] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the durability of demand despite a dynamic operating environment, with expectations for continued growth in defense spending [9][10] - The company anticipates a revenue range of $3.425 billion to $3.525 billion for the full year, implying a 6% to 9% year-over-year growth [28][29] - Management noted that the operating environment is more dynamic compared to the previous year, requiring agility to navigate complexities [20] Other Important Information - The company initiated a dividend payment and stock repurchase program, reflecting a commitment to returning capital to shareholders [8] - The management is actively engaged in M&A opportunities, viewing it as a top priority for capital allocation [76] Q&A Session Summary Question: Can you discuss the impact of material receipts on revenue? - The material acceleration impacted revenue holistically across the board, with improved supplier deliveries contributing positively [33][34] Question: What are the expectations for ASC margins going forward? - The adjustments made in Q1 are expected to reset the backlog, leading to a lower gross margin prospectively, but a recovery is anticipated [38] Question: How does the company view the potential defense budget increase? - The company is well-positioned to grow ahead of the defense budget, aligning with core markets in shipbuilding and force protection [55] Question: What is the company's strategy regarding international opportunities? - There is a substantial near-term opportunity in Europe, particularly in counter-drone and advanced sensing programs [63] Question: How is the company addressing supply chain challenges? - The company is including economic price adjustment clauses in future contracts to mitigate risks associated with price volatility [78]

Financial Data and Key Metrics Changes - Harley-Davidson's consolidated revenue in Q1 2025 decreased by 23%, with operating income at $160 million, a decline of 51% at HDMC, partially offset by a 19% increase in HDFS operating income [20][28] - The consolidated operating income margin for Q1 was 12.1%, down from 15.2% in the previous year, primarily due to lower volume impacting dealer inventory [20][25] - Earnings per share for Q1 was reported at $1.7, reflecting the overall decline in revenue and operating income [21] Business Line Data and Key Metrics Changes - HDMC revenue decreased by 27% in Q1, driven by a 33% decline in motorcycle shipments, totaling 39,000 units compared to 58,000 units in the prior year [22][23] - HDFS revenue was $245 million, a decrease of 2%, while operating income increased by 19% to $64 million due to lower provisions for credit losses [27][28] - LiveWire segment reported an operating loss of $20 million, with revenue decreasing due to lower unit sales of electric motorcycles [30] Market Data and Key Metrics Changes - Global retail sales were down 21% in Q1, with a 24% decline in North America, attributed to low consumer confidence [5][6] - EMEA region saw a retail decline of just 2%, while APAC experienced a 28% decline, primarily due to softness in China and Japan [7] - LATAM reported a 6% decline in retail sales year-over-year [7] Company Strategy and Development Direction - The company is focusing on a significant marketing development fund to support dealer networks and product launches closer to the riding season [6][10] - Harley-Davidson plans to introduce new entry-level products and expand its cruiser offerings, aiming for affordability and profitability [11][88] - The company is evaluating its investment in LiveWire due to challenges in the EV market, including slower adoption rates and regulatory hurdles [12][97] Management's Comments on Operating Environment and Future Outlook - Management expressed concerns over the uncertain macroeconomic environment and its impact on consumer confidence, leading to the withdrawal of previous 2025 guidance [13][34] - There is cautious optimism regarding potential trade deals that may mitigate tariff impacts, although the situation remains fluid [14][59] - Sequential improvement in retail sales was noted from February to April, indicating a slight recovery in consumer demand [66] Other Important Information - The company achieved $142 million in operating cash flow, an increase of $38 million from the prior period, with total cash and cash equivalents at $1.9 billion [31][32] - Harley-Davidson repurchased 3.4 million shares for $87 million in Q1 2025 as part of its capital allocation strategy [33] Q&A Session Summary Question: What might the economics of a long-term strategic partnership look like for Harley Davidson? - Management emphasized the importance of demonstrating the premium value of HDFS and maintaining attractive offers for customers and dealers [39][40] Question: What has changed regarding the strategic value of HDFS? - The focus is on ensuring a market-based view of HDFS's value while still recognizing its strategic importance to the company [42] Question: Can you provide insight into the tariff impacts and anti-American sentiment? - Management noted that while tariffs pose challenges, the company has a strong U.S.-centric manufacturing base, and there has not been significant negative sentiment affecting sales [56][64] Question: How is the retail environment evolving, especially in April? - Sequential improvement was observed in retail sales from February to April, with management noting that April showed signs of recovery compared to March [66] Question: What led to the decision to bring back entry-level bikes? - The company aims to capitalize on the opportunity to create profitable entry-level models, having previously focused on core business investments [88] Question: How are cost savings being tracked for LiveWire? - LiveWire is projected to reduce operating losses significantly, with ongoing efforts to drive cost savings and achieve a sustainable business model [97]

Financial Data and Key Metrics Changes - Fiscal second quarter revenue decreased by 1% to $484 million in 2025 from $488 million in 2024 [14] - New boat sales were down 5% to $310 million, while pre-owned boat sales increased by 14% to $90 million [14] - Gross profit declined to $110 million in 2025 compared to $120 million in 2024, driven by lower gross margins [15] - Net loss for the fiscal second quarter totaled $375,000 or $0.02 per diluted share, compared to a net loss of $5 million or $0.27 per diluted share in the prior year [16] - Adjusted income per diluted share was $0.13 compared to $0.67 in the prior year [17] Business Line Data and Key Metrics Changes - Same store sales declined by 2%, primarily due to a decrease in new boat sales [4] - Revenue from service parts and other sales increased by 2% to $69 million, driven by growth in the dealership segment [14] - Financing and insurance revenue increased by 10 basis points as a percentage of sales [15] - Parts and service business revenue was up 2%, partially offset by headwinds in the distribution segment [12] Market Data and Key Metrics Changes - Total unit sales for the industry were down in excess of 10% for the quarter, while the company continued to outperform the industry [4] - The average unit price of new boats increased, driven by strength in larger boats [11] - The company expects total sales to be in the range of $1.7 billion to $1.8 billion, with same store sales flat to down low single digits [20] Company Strategy and Development Direction - The company is focused on inventory and brand rationalization strategies, reducing inventory by 12% year over year [5] - The company plans to exit 15 brands to consolidate its offerings and strengthen its market position [41][45] - The company is monitoring the tariff landscape and does not expect an impact on pricing for current inventory [8] Management Comments on Operating Environment and Future Outlook - Management noted considerable macroeconomic uncertainty and a challenging environment but expressed optimism about improving performance over time [4] - The company is taking a cautious view on the demand environment and updating its outlook accordingly [8] - Management emphasized the importance of controlling factors within their operations to weather current challenges [9] Other Important Information - Total liquidity as of March 31, 2025, was in excess of $74 million [18] - Total inventory decreased to $602 million from $687 million year over year, indicating a healthier mix and aging profile [18] - The company aims to reduce leverage in the latter half of 2025 as part of its capital allocation strategy [19] Q&A Session Summary Question: What are the demand trends seen in April post-tariff announcements? - Management indicated that April results were in line with the previous year, with positive signs for May [22] Question: What drove the margin down on used boats? - Management noted that the model mix and aggressive pricing strategies to move inventory contributed to the margin decline [24][26] Question: Where is the company gaining market share? - The company is primarily gaining share in the premium segment, outperforming the industry which is down 10% [32] Question: Is the company discounting heavily to move volume? - Management confirmed that while some discounting is occurring, it is strategic and focused on clearing outdated inventory [34][36] Question: How does the company see the industry evolving post-slowdown? - Management anticipates potential consolidation in the industry due to higher carrying costs and competitive pressures [41][43]