Financial Data and Key Metrics Changes - First quarter sales reached $355 million, reflecting a 6.5% increase year-over-year, with adjusted earnings per share at $0.23, aligning with expectations [6][21] - Gross margin improved sequentially by 200 basis points to 30.9%, while adjusted gross margin decreased to 30.9% from 32.3% year-over-year due to a shift in product mix [6][22] - Net loss for the quarter was $259.7 million, or negative $6.23 per diluted share, primarily due to a goodwill impairment charge of $262 million [23] Business Line Data and Key Metrics Changes - In the Powered Vehicles Group (PVG), net sales increased by 3.4% to $122.1 million, driven by motorcycle business growth, with adjusted EBITDA margin improving to 11.8% [11][12] - The Aftermarket Applications Group (AAG) saw net sales rise by 9.9% to $111.9 million, with adjusted EBITDA margin increasing to 15.2% [13][14] - Specialty Sports Group (SSG) reported a 6.6% increase in net sales to $121 million, although adjusted EBITDA margin decreased to 19.3% due to seasonality and investments in product engineering [15][16] Market Data and Key Metrics Changes - The automotive sector is showing signs of stabilization, particularly in the premium truck category, despite broader market caution [12] - The company is experiencing uneven market conditions across various product lines, but is managing financial commitments through disciplined execution [7][19] Company Strategy and Development Direction - The company is focused on cost optimization, portfolio optimization, and working capital management to enhance operational efficiency and free cash flow generation [8][10] - Strategic initiatives include simplifying and consolidating manufacturing footprint, optimizing product mix, and implementing a $25 million cost reduction program [9][10] - The company remains committed to innovation and new product development, which is essential for customer engagement and long-term growth [7][8] Management's Comments on Operating Environment and Future Outlook - Management acknowledges ongoing challenges from tariffs and market volatility but remains optimistic about sequential improvements and long-term growth potential [19][20] - The company reaffirms its full-year 2025 guidance, expecting top and bottom line improvements despite market headwinds [25][29] - Management emphasizes the importance of operational efficiency and strategic growth initiatives to drive long-term shareholder value [19][29] Other Important Information - The company has quantified the potential gross impact of tariffs to be around $50 million for the year, representing approximately 5% of the cost of goods sold [28] - Inventory levels increased by 1% compared to the previous fiscal year, driven by strategic stocking in aftermarket businesses [24] Q&A Session Summary Question: Update on demand from bicycle OEM partners regarding tariffs - Management noted a spectrum of responses from OEM customers, with no significant reduction in demand observed due to tariffs [34][36] Question: Key drivers of growth in the upfitting business - Growth is attributed to better product execution, improved dealer relationships, and a favorable product mix [38][39] Question: Quality of inventory and potential for cash generation - Management emphasized a strategic focus on inventory builds to support demand, particularly in aftermarket businesses [40][41] Question: Updates on international opportunities and product development - The company is expanding relationships internationally, particularly in the wheel and bike segments, to diversify geographically [50][51] Question: Impact of tariffs on supply chain and manufacturing - Management discussed various strategies to mitigate tariff impacts, including insourcing and adjusting pricing with OEMs [60][62] Question: Observations on consumer demand and potential pull-forward in sales - Management did not observe significant pull-forward in demand but noted some early product launches may have influenced Q1 sales [67][68] Question: Seasonality of Marucci products and impact of MLB partnership - Management clarified that seasonality is influenced by product launches and not solely by the baseball season [82][86]