Financial Data and Key Metrics Changes - Net sales for Q2 2026 were $188.6 million, a decrease of 5.8% compared to the previous year, with unit volume down 9.5% to 1,106 units [12][14] - Adjusted EBITDA decreased 52.5% to $8 million, with an adjusted EBITDA margin of 4.3%, down from 8.4% in the prior year [15][18] - GAAP net loss for the quarter was $2.5 million, compared to a net income of $2.4 million in the prior year [15] - Consolidated net sales per unit increased 4.1% to $170,544 per unit [13] Business Line Data and Key Metrics Changes - Malibu and Axis brands accounted for approximately 46.4% of unit sales, while saltwater fishing represented 25.5%, and Cobalt made up 28.1% [13] - Gross profit decreased 32.9% to $25.1 million, with a gross margin of 13.3%, down 540 basis points from the prior year [14] Market Data and Key Metrics Changes - The broader marine industry is experiencing a modest overhang on non-current inventory, but the company maintains a healthy inventory position for its model year 2026 boats [9][11] - The company expects the market to decline in the range of mid to high single digits for the fiscal year [17] Company Strategy and Development Direction - The company is focused on a "Build, Innovate, and Grow" framework, emphasizing customer-driven innovation and operational excellence [8][11] - Plans to introduce new models at the Miami International Boat Show, showcasing differentiated products [7] - The company is expanding its marine components business and enhancing dealer partnerships to capture market share [10] Management's Comments on Operating Environment and Future Outlook - Management noted a competitive promotional environment but expressed optimism about customer response to new models and the overall retail environment [6][11] - The company anticipates flat to mid-single digit sales declines for the full fiscal year, with Q3 net sales expected between $198 million and $202 million [17][18] Other Important Information - The company generated $8.4 million of free cash flow during Q2, with $4.4 million in capital expenditures [16] - A share repurchase program was expanded to $70 million, with $20.8 million completed during the quarter [16] Q&A Session Summary Question: Impact of higher boat show expenses on EBITDA margin - Management indicated about 50 basis points of cost pressure from promotional activities related to year-end sales events [23] Question: Inventory levels compared to the industry - Management stated that the industry is generally in a healthy position, with the company feeling good about its inventory levels [24] Question: MBI Acceptance program's impact on sales - Early feedback from dealers was positive, indicating higher take rates at boat shows, although it is still early to determine overall trends [30] Question: Centralized sourcing cost savings - Management expects significant benefits from centralized sourcing efforts to impact margins positively in the latter part of the fiscal year [32] Question: Dealer sentiment and inventory management - Feedback from dealers has been mixed, with some positive trends leading to additional orders, but a level of destocking is expected due to market conditions [36] Question: Outlook for labor costs - Management anticipates improvements in labor costs as operational effectiveness and centralized sourcing efforts take effect [41] Question: Competitive landscape in the ski and wake category - Management noted ongoing efforts to stimulate growth in the ski/wake segment, with collaboration among competitors [43] Question: Confidence in EBITDA margin expansion - Management outlined expectations for sequential growth, fixed-cost leverage, and reduced promotional spending as drivers for margin growth [47] Question: Update on M&A pipeline - Management is actively looking for opportunities and conducting due diligence on potential deals [57]

Group 1: Company Overview - Constellation Energy Corporation (CEG) is focused on developing and investing in innovative technologies for a sustainable, low-carbon energy future, enhancing the reliability of the energy grid [1] - The company designs specific plans for customers to achieve unique carbon reduction goals, offering services like energy efficiency upgrades and data-driven insights [2] - CEG provides innovative energy solutions, including a 24/7 Carbon-Free Energy matching product, to help businesses meet sustainability goals [3] Group 2: Technology and Customer Engagement - CEG leverages advanced digital platforms, such as Constellation Navigator, to help businesses monitor and optimize energy consumption across multiple sites [4] - The focus on customer-driven innovation enhances trust and satisfaction, positioning CEG as a reliable energy partner [5] Group 3: Industry Context - Other companies, like Duke Energy and PPL Corporation, are also embracing technology to improve customer experience and service delivery [6][7] Group 4: Stock Performance - CEG's shares have increased by 7.8% over the past month, outperforming the industry growth of 2.4% [8][9] - The Zacks Consensus Estimate predicts a 9% increase in earnings per share for 2025 and a 22% increase for 2026 [11] Group 5: Valuation Metrics - CEG is trading at a premium with a forward 12-month price-to-earnings ratio of 29.7X, compared to the industry average of 20.34X [14]