Core Insights - Malibu Boats reported solid fiscal second-quarter 2026 results, slightly exceeding internal expectations despite a challenging retail environment [4][11] - The company is optimistic about its inventory position and upcoming product launches, including two new models at the Miami International Boat Show [2][5] Financial Performance - Q2 net sales were $188.6 million, down 5.8% year-over-year, with unit volume decreasing by 9.5% to 1,106 units [7][11] - Gross profit fell 32.9% to $25.1 million, resulting in a gross margin of 13.3%, down 540 basis points from the previous year [13][15] - The company posted a GAAP net loss of $2.5 million compared to a net income of $2.4 million in the prior year, with adjusted EBITDA declining 52.5% to $8.0 million [15][16] Strategic Initiatives - Malibu is implementing a retail financing program, MBI Acceptance, offering rates as low as 3.99%, which is gaining traction among dealers [5][8] - The company is also launching a new marine components business, focusing on systems and processes, with early traction noted in product offerings [9][10] Market Outlook - Management expects full-year sales to be flat to down mid-single digits, with a continued decline in marine markets anticipated [17][18] - For fiscal Q3, net sales are guided to be between $198 million and $202 million, with an adjusted EBITDA margin expected around 8.5% [17][18] Dealer and Inventory Insights - Dealer sentiment has been mixed, but overall trends are positive, with boat shows meeting expectations [20] - The company noted a healthy inventory position for model year 2026 boats, while the broader industry is experiencing some destocking [5][21]

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]

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][15] - Adjusted EBITDA decreased 52.5% to $8 million, with adjusted EBITDA margin dropping to 4.3% from 8.4% in the prior year [15][17] - GAAP net loss for the quarter was $2.5 million, compared to a net income of $2.4 million in the prior year [15] 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] - Consolidated net sales per unit increased by 4.1% to $170,544 per unit, driven by favorable model mix in Cobalt and saltwater fishing segments [13][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 debut 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 strengthen its market position [10] Management's Comments on Operating Environment and Future Outlook - Management noted a competitive retail environment but expressed optimism about customer response to new models and the success of promotional events [5][6] - The company is closely monitoring market conditions and is prepared to scale production if demand improves [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 that higher promotional costs related to year-end sales events contributed about 50 basis points of cost pressure for the quarter [22][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 rollout and its impact - Early feedback from dealers was positive, indicating a higher take rate on financing options, although it is still early to determine overall trends [30] Question: Dealer sentiment and inventory management - Feedback from dealers has been mixed, with some positive trends observed at boat shows, leading to additional orders [35] Question: Outlook for labor costs - Management expects to see benefits from operational effectiveness and centralized sourcing efforts, which should help manage labor costs moving forward [39][41] Question: Competitive landscape in the ski and wake category - Management noted ongoing efforts to stimulate growth in the ski/wake segment, collaborating with industry peers [42][43] Question: Q3 EBITDA margin guidance and operating leverage - Management expects sequential growth in top line and benefits from centralized sourcing to drive margin growth in the latter part of the year [46][47]

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]

Core Insights - Malibu Boats has welcomed Aquaknox Marine to its dealer network, enhancing its presence in East Tennessee [1][4] - Aquaknox Marine, founded in 2008, emphasizes professionalism, transparency, and customer experience in the boating industry [2][3] - The partnership aims to provide a full lineup of Malibu and Axis Wake boats, improving customer access to high-quality watersports experiences [3][4] Company Overview - Malibu Boats, based in Loudon, Tennessee, is the largest manufacturer of watersports towboats, including brands like Malibu and Axis Wake [5] - The company is known for its innovative products such as Surf Gate®, Power Wedge®, and Malibu Command Center™, which enhance the watersports experience [5] Dealer Profile - Aquaknox Marine operates two locations in East Tennessee and is recognized for its commitment to customer service and industry knowledge [3] - The company aims to build trust within the boating community by prioritizing customer satisfaction and integrity [2][3]