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Malibu Boats(MBUU) - 2026 Q1 - Earnings Call Transcript
2025-10-30 13:30
Financial Data and Key Metrics Changes - Net sales increased approximately 13.5% year over year to $194.7 million, driven by increased unit volumes and inflation-driven price increases [11] - Adjusted EBITDA for the quarter increased 19.1% to $11.8 million, with adjusted EBITDA margin rising to 6.1% from 5.8% in the prior year [13] - GAAP net loss decreased 86.2% to a loss of $700,000 [13] - Consolidated net sales per unit increased 2.9% to $172,500 per unit [11] Business Line Data and Key Metrics Changes - In the Malibu segment, gross profit decreased 1% to $27.9 million, with gross margin as a percentage of sales at 14.3%, down 210 basis points year over year [12] - Unit volume increased 10.3% to 1,129 units, with Malibu and Axis brands representing approximately 47.7% of unit sales [11] - Saltwater fishing represented 25.5% and Cobalt made up the remaining 26.8% of unit sales [11] Market Data and Key Metrics Changes - Retail activities remained soft, with inventories entering the quarter slightly elevated [4] - The company expects the market to decline in the range of mid to high single digits for the year, with a continuation of high single digit to low double digit decline through the second quarter [15] Company Strategy and Development Direction - The company is focused on driving growth and long-term value creation through its Build, Innovate, and Grow framework, expanding capabilities beyond boat building into parts, accessories, and marine services [5] - A new financing partnership, MBI Acceptance, was launched to support dealer retail activity [5][6] - The company aims to protect dealer health, manage production with precision, and continue pushing innovation [9] Management's Comments on Operating Environment and Future Outlook - Management remains realistic about the broader marine environment, noting no clear inflection signaling a market recovery [9] - The company is maintaining its full-year guidance, expecting sales to be flat to down mid single digit percentage points [15] - Management expressed confidence in the ability to outperform the market while building for the next up cycle [10] Other Important Information - The company generated $2.5 million of free cash flow during Q1, inclusive of $4.3 million of capital expenditures [13] - The company anticipates consolidated adjusted EBITDA margin for the full year ranging from 8% to 9% [16] Q&A Session Summary Question: Impact of interest rates on consumer behavior - Management noted that consumer sentiment has improved with recent rate cuts, but retail finance rates will take time to reflect these changes [19] Question: Higher dealer incentives for Malibu brand - Management indicated that higher dealer incentives were related to clearing inventory and expected a competitive promotional environment moving forward [20] Question: Inventory management and expectations - Management stated that dealer inventories are expected to reduce across all segments, aligning production with market expectations [21][29] Question: Insights on MBI Acceptance rollout - Initial feedback on MBI Acceptance has been positive, with strong dealer engagement and early success in the rollout [32][34] Question: Discounting levels in the market - Management acknowledged that while discounting has cooled from previous excess inventory levels, the environment remains competitive [38] Question: Consumer purchasing behavior - Management observed no significant changes in the cash buyer versus payment buyer dynamic, with MBI Acceptance expected to provide more insights over time [55]
