Financial Data and Key Metrics Changes - Net sales increased by 12.4% to $228.7 million, with unit volume rising by 12.8% to 1,431 units, driven primarily by increased unit volumes in the Malibu segment and favorable model mix across all segments [15][16] - Gross profit rose by 13.4% to $45.7 million, with gross margin as a percentage of sales increasing by 20 basis points to 20% [16] - Q3 GAAP net income surged by 119.4% to $13.2 million, while adjusted EBITDA increased by 16% to $28.3 million, with adjusted EBITDA margin rising by 40 basis points to 12.4% [17][18] - Non-GAAP adjusted fully distributed net income per share increased by 14.3% to $0.72 [18] Business Line Data and Key Metrics Changes - The Malibu and Axis brands accounted for approximately 52% of unit sales, while saltwater fishing represented 22.8%, and Cobalt made up the remaining 25.2% [15] - Consolidated net sales per unit decreased by 0.3% to $159,792, primarily due to an unfavorable segment mix [16] Market Data and Key Metrics Changes - Dealer inventories entering the selling season are healthy and well below last year's levels, with expectations to bring dealer inventories down to the mid-teens percentage [7][24] - Retail environment remains challenging due to elevated interest rates and macroeconomic uncertainty, affecting consumer sentiment and discretionary spending [7][20] Company Strategy and Development Direction - The company emphasizes innovation as a cornerstone of its long-term strategy, with nearly 40% of Malibu boat show unit sales driven by two premium models introduced this year [10] - The company is committed to maintaining dealer health and operational excellence while navigating current market conditions [12][19] - A balanced approach is maintained, focusing on dealer health, operational excellence, and continued innovation [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating current market conditions, highlighting a strong balance sheet and robust cash flow generation [13][19] - The company has recalibrated expectations for the upcoming selling season, now expecting retail markets to be down double digits for the full fiscal year [20] - Management does not expect tariffs to have a material impact on the cost structure for the remainder of fiscal 2025 [21] Other Important Information - Capital expenditures are expected to be tightened to $25 million to $30 million, with a modest reduction in share repurchases planned [19] - The company generated over $15 million in cash from operations during the quarter and finished Q3 with over $39 million in cash on hand [18][19] Q&A Session Summary Question: What would the goal be by June with respect to dealer inventory? - The company expects to bring dealer inventories down to the mid-teens percentage, below last year's levels [24][25] Question: Insights into customer behavior, particularly repeat buyers and first-time buyers? - Retail trends show repeat buyers, especially cash buyers, returning, while new buyers remain a small percentage of overall retail [28][29] Question: What are the observations regarding competitor promotional activity? - The company has maintained consistent promotional levels and has not had to elevate them significantly due to strong new product performance [33][34] Question: How is the saltwater segment performing? - There was an improvement in the saltwater segment, particularly in Florida, but it did not bounce back to growth [56][57] Question: What has changed in the cost structure leading to adjusted EBITDA pressure? - Adjustments were made to production expectations based on market conditions, impacting overall financial projections [63]