MALIBU BOATS, INC. Q2 FY2025 earnings call

• Second fiscal quarter results were slightly higher than expected but broader retail marine market trends were more challenging than initially forecasted. - The quarter benefited from a favorable mix in the Malibu Axis segment but demand indicators were below assumptions. - Navigated challenging market environment due to muted retail demand from interest rate pressures and hurricane season effects. - Early season boat shows provided insights, and the Malibu Axis year-end sales event had higher retail sell-through. - Adjusted outlook to reflect weaker retail trends with sales flat to down low single digits for the year and adjusted EBITDA margins to approximately 10%. - Focus remains on dealer health and innovation.

Net sales decreased 5.1% to $200.3 million and unit volume decreased 11% to 1,222 units in the second quarter. The Malibu and Axis brands represented approximately 43% of unit sales. Saltwater fishing represented 25.9% and Cobalt made up the remaining 31.1%. Consolidated net sales per unit increased 6.6% to $163.9 per unit. Gross profit decreased 0.2% to $37.4 million and gross margin was 18.7%, an increase of 90 basis points compared to the prior year period.

• Adjusted outlook to have top-line sales flat to down low single digits for the year and adjusted EBITDA margins to approximately 10%. - Anticipate second half sales growth with Q3 net sales expected to increase approximately 10% versus prior year. - Q3 adjusted EBITDA margins expected to be approximately 10% to 12%.

• Muted retail demand driven by sustained interest rate pressures and hurricane season effects. - Concentration of business in Florida impacting the saltwater segment. - Higher general and administrative expenses due to legal fees and compensation related expenses. - Potential tariff impacts.

Q: Craig Kennison asked about Florida hurricane activity and replacement demand.

A: Steve Menneto said Florida has accelerated downtrend in saltwater business, more than 50% of saltwater business is in Florida. Replacement demand will come back over time as docks, roofs, etc. are rebuilt.

Q: Joe Altobello asked about guidance and G&A expenses.

A: Bruce Beckman said had good visibility for Q3 but Q4 dependent on market; G&A increase due to legal spend and incentive compensation, expected to normalize.

Q: Noah Zatzkin asked about dealer sentiment and tariffs.

A: Steve Menneto said dealers are cautiously optimistic; Bruce Beckman said tariffs not material this year.

Q: Brandon Rollé asked about boat shows demand by segment and inventory.

A: Steve Menneto said mixed signals in boat shows; Bruce Beckman said dealer sentiment depends on retail market change.

Q: Michael Albanese asked about ASPs and price increases.

A: Steve Menneto said mix was big driver of ASP, price increases modest, mix expected to moderate.

Q: Jamie Katz asked about Cobalt unit growth and lending.

A: Steve Menneto said Cobalt is strong performer; Steve Menneto said consumer rates remain stubbornly high with no increase in defaults seen.