Malibu Boats, Inc.

Good morning and welcome to Malibu Boats conference call to discuss third quarter fiscal year 2025 results. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session and instructions will follow at that time. Please be advised that reproduction of this call in whole or in part is not permitted without written authorization of Malibu Boats. And as a reminder, today's call is being recorded. On the call today for management are Mr. Steve Minetto, Chief Executive Officer, and Mr. Bruce Beckman, Chief Financial Officer. I will now turn the call over to Mr. Beckman to get it started. Please go ahead, sir.

Thank you, and good morning, everyone. Joining me on today's call is our CEO, Steve Minetto. On the call, Steve will provide commentary on the business, and I will discuss our third quarter of fiscal year 2025 financials. We will then open up the call for questions. A press release covering the company's fiscal third quarter 2025 results was issued today, and a copy of that press release can be found in the investor relations section of the company's website. I also want to remind everyone that management's remarks on this call may contain certain forward-looking statements, including predictions, expectations, estimates, or other information that might be considered forward-looking and that actual results could differ materially from those projected on today's call. You should not place undue reliance on these forward-looking statements which speak only as of today and the company undertakes no obligation to update them for any new information or future events. Factors that might affect future results are discussed in our filings with the SEC, and we encourage you to review these filings for a more detailed description of these risk factors. Please also note that we will be referring to certain non-GAAP financial measures on today's call, such as adjusted EBITDA, adjusted EBITDA margin, adjusted fully distributed net income, and adjusted fully distributed net income per share. Reconciliations of these GAAP financial measures to non-GAAP financial measures are included in our earnings release. Finally, during today's prepared remarks, comparisons are to Q3 of fiscal 2024, unless otherwise noted. I will now turn the call over to Steve.

Thank you, Bruce, and thank you all for joining today's call. Our results this quarter demonstrate solid execution in an environment that remains challenging. Both Q3 sales and adjusted EBITDA margins finished above our guidance expectations for the quarter. We are successfully navigating continued industry softness. Our premium brands and feature-rich offerings continue to resonate with customers as evidenced by our mixed-driven ASP increases in all segments. And as expected, we returned to growth in the third quarter, both sequentially and versus the prior year. It is worth remembering that we were among the first in the industry to reduce our production levels in response to the elevated dealer inventories. As a result, year-over-year comparison in the second half are less challenging than they were in the first half. Turning first to the selling season, our overall dealer inventories entering this season are healthy, aligned with historical levels, and well below where they were a year ago. The retail environment remains challenging, as elevated interest rates and ongoing macro uncertainty continue to weigh heavily on the consumer sentiment and discretionary spending, prompting buyers to be more cautious and deliberate in their purchase decisions. We remain actively engaged with our dealer network, continuously calibrating our strategies to closely align production levels with real-time retail dynamics, and we are committed to ensuring dealer inventories remain healthy and appropriately balanced. While our overall boat show performance was mixed, we observed pockets of strength, notably with our Pursuit brand. We also remain incredibly proud that our Pursuit once again received the prestigious Marine Industry Customer Satisfaction Award from NMMA, underscoring our ongoing commitment to delivering exceptional customer experiences. Additionally, our Cobalt brand keeps delivering impressive results. We continue to see persistent demand from cash buyers who appreciate our premium feature-rich boats. Supported by our decision to invest in expanding capacity at our Rowan facility, we have realized the gain of 380 basis points of market share in the cobalt models produced there. Innovation remains absolutely critical to our long-term strategy, and I want to emphasize that we are keeping our hand firmly on the throttle for our new product development. even during these challenging market conditions. Our ability to introduce compelling and differentiated new products is truly a cornerstone of our competitive advantage. This ongoing innovation resonates strongly in the marketplace, driving substantial customer engagement and enthusiasm. The performance of our newly introduced models at the boat shows provides strong evidence that our strategy is working. Nearly 40% of our Malibu boat show unit sales were driven by two premium models introduced this year, the M230 and the 25 LSV. A similar percentage of Cobia boat show unit sales were driven by the all-new Cobia 265 and 285 center console models. We look forward to sharing the exciting innovation we have planned for the 2026 model year in the near future. are aware tariffs have reemerged as a prominent topic within our industry. As we have stated previously, we do not expect tariffs to have a meaningful impact on our fiscal 25 cost structure. We will remain proactive in mitigating impacts through our strategic supply chain management initiatives to balance any tariff-related price increases to our customers. Additionally, we will continue to leverage our robust vertically integrated U.S. manufacturing capabilities which provide a meaningful advantage in managing supply chain risks and gives us direct control over tariff mitigation strategies. We remain agile and fully prepared to adopt swiftly if tariffs or other cost pressures escalate. Looking ahead, we remain confident in our balanced approach emphasizing dealer health, operational excellence, and continued innovation. We have purposely built an agile and resilient operating model. backed by our strong balance sheet and robust cash flow generation, allowing us to strategically navigate current market conditions. Our diverse brand portfolio combined with our premium market position significantly enhances our capability to capture demand when the market returns to growth. We remain prepared to quickly adapt to changing market dynamics, including tariffs, supply chain development, or cost pressures, bolstered by our proven ability to effectively manage uncertainty. Finally, I want to sincerely thank our dedicated team and our dealer partners for their exceptional efforts, adaptability, and resilience. Your commitment reinforces my confidence in our trajectory and positions us strongly for future growth. With that, I'll turn it back to Bruce to discuss our financial results in more detail.