Financial Data and Key Metrics Changes - Net sales decreased 5.8% to $188.6 million, with unit volume decreasing 9.5% to 1,106 units, primarily due to lower wholesale shipments and unfavorable segment and model mix [12][15] - Consolidated net sales per unit increased 4.1% to $170,544 per unit, driven by favorable model mix in Cobalt and saltwater fishing segments and inflation-driven price increases [12][13] - Gross profit decreased 32.9% to $25.1 million, with gross margin at 13.3%, a decrease of 540 basis points compared to the prior year [13][14] - Adjusted EBITDA decreased 52.5% to $8 million, with adjusted EBITDA margin decreasing to 4.3% from 8.4% in the prior year [15] Business Line Data and Key Metrics Changes - Malibu and Axis represented approximately 46.4% of unit sales, saltwater fishing represented 25.5%, and Cobalt made up the remaining 28.1% [12] - The decrease in net sales was driven by decreased unit volumes across all segments, with Malibu segment facing unfavorable model mix [12][15] Market Data and Key Metrics Changes - The broader industry is experiencing a modest overhang on non-current inventory, but the company maintains a healthy inventory position for 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, with sales expected to be flat to down mid-single digits year-over-year [17] Company Strategy and Development Direction - The company is focused on customer-driven innovation, operational excellence, and disciplined capital allocation to drive long-term growth [6][8] - The introduction of new models and partnerships is central to the company's strategy, with plans to showcase new products at the Miami International Boat Show [6][8] - The company is also expanding its marine components business and centralized sourcing initiatives to improve efficiency and reduce costs [10][11] Management's Comments on Operating Environment and Future Outlook - Management remains optimistic about the retail environment, noting a successful year-end sales event and strong customer response to new models [5][11] - The company is closely monitoring market conditions and is prepared to scale production in line with retail demand if necessary [18] - Management expects to see benefits from centralized sourcing and operational improvements in the latter part of the fiscal year [44] Other Important Information - The company generated $8.4 million of free cash flow during Q2, with $20.8 million of share repurchases completed during the quarter [16] - The company anticipates Adjusted EBITDA margins of approximately 8.5% for Q3 and expects to maintain operational discipline despite market challenges [17][18] Q&A Session Summary Question: Impact of higher boat show expenses on EBITDA margin - Management indicated that higher boat show expenses contributed about 50 basis points of cost pressure for the quarter [21][22] Question: Inventory levels compared to the industry - Management noted that while the industry has pockets of elevated inventory, their inventory position is healthy and well-managed [23] Question: MBI Acceptance program rollout and its impact - Early feedback from dealers on the MBI Acceptance program has been positive, with some increase in traffic and sales at boat shows [27] Question: Centralized sourcing initiatives and cost savings - Management expects significant benefits from centralized sourcing efforts to impact margins positively in the latter part of the fiscal year [28] Question: Dealer sentiment and inventory management - Dealer feedback has been mixed but generally positive, with additional orders resulting from successful boat shows [32] Question: Outlook for labor costs - Management anticipates that operational effectiveness and centralized sourcing will help manage labor costs moving forward [36] Question: Competitive landscape in the ski and wake category - Management acknowledged ongoing efforts to stimulate growth in the ski/wake segment, collaborating with industry peers [39][40] Question: Confidence in EBITDA margin guidance for Q3 - Management outlined expectations for sequential growth, fixed-cost leverage, and reduced promotional spending as key drivers for margin growth [43][44]