Malibu Boats(MBUU)2024-08-29 15:17Financial Data and Key Metrics Changes - For Q4 2024, net sales decreased 57.4% to 829.0 million, and unit volumes decreased 45.4% to 5,385 units [17] - Adjusted EBITDA for Q4 decreased 104.5% to a loss of 19.6 million, while net income for the year decreased 152.3% to a net loss of 151,878 per unit, driven by favorable model mix and year-over-year price increases [15] - Cobalt's market share in the sterndrive segment expanded by over 300 basis points, and Pursuit's market share increased by nearly 300 basis points since acquisition [11][12] Market Data and Key Metrics Changes - Dealer inventories were aligned with historical levels by the end of Q4, having been previously four to five weeks too high [10][48] - The company expects dealer inventories to contract by approximately 15% as dealers aim to reduce their inventory levels due to high flooring costs [33][48] Company Strategy and Development Direction - The company is focused on reducing channel inventories and has made significant progress in aligning dealer inventories with historical levels [7][10] - The new CEO, Steve Menneto, emphasizes a customer-centric approach and plans to leverage competitive strengths while maintaining a focus on innovation and operational excellence [25][30] - The company anticipates capital expenditures to drop to between 35 million in fiscal 2025, improving cash generation and enabling continued shareholder returns [20] Management's Comments on Operating Environment and Future Outlook - Management acknowledges that near-term market conditions will remain challenging but expresses optimism about long-term growth potential as channel inventory levels normalize [18][30] - The company expects a low single-digit percentage increase in net sales for fiscal year 2025, with adjusted EBITDA margins anticipated to range from 10% to 12% [20] Other Important Information - The company repurchased $10 million of stock in Q4 and paid off all remaining debt, demonstrating strong capital allocation priorities [9][18] - The Roan County facility is now complete, consolidating manufacturing operations and increasing operational efficiencies [9][10] Q&A Session Summary Question: Comparison of dealer dynamics with power sports - The CEO noted similarities and differences in inventory management between the boating and power sports industries, emphasizing the need to match inventory to retail demand [31][32] Question: Retail assumptions for fiscal 2025 guidance - Management expects mid-single-digit market headwinds and anticipates dealer inventories to contract below historical levels [33][34] Question: Growth expectations for fiscal 2025 - Management indicated that growth would come from lapping easier comparisons later in the year, with cautious production levels maintained [38] Question: Acquisition strategy and focus - The CEO confirmed that the company is open to pursuing beneficial acquisitions, including potential opportunities in the pontoon sector [39] Question: Addressing affordability concerns - Management has focused on maintaining competitive pricing and driving efficiencies to keep prices lower than competitors [42] Question: Update on Tommy's boat repurchase - The company confirmed the repurchase of 19 units, which was significantly lower than initial estimates [45] Question: Update on dealer inventories - Management reported that dealer inventories were aligned with historical trends by the end of Q4, with expectations for further reductions [48] Question: EBITDA margin expectations - Management discussed the historical context for achieving mid-teen EBITDA margins and the revenue levels needed to reach those targets [52] Question: Consumer behavior trends - Management has not observed significant changes in purchasing trends between cash and finance, but expects a rebalancing once interest rates decrease [53]