Malibu Boats, Inc.

Good morning and welcome to Malibu Boats conference call to discuss fourth quarter and full 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 from management are Mr. Steve Minetto, Chief Executive Officer, and Mr. Bruce Beckman, Chief Financial Officer. I'll now turn the conference call over to Mr. Beckman to get 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 an update on the new model year, and I will then discuss our fourth quarter and full year 2025 financials. We will then open the call for questions. A press release covering the company's fiscal fourth quarter and full year 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 adjusted EBITDA margin, and adjusted 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 due to Q4 of fiscal 2025, unless otherwise noted. I will now turn the call over to Steve.

Thanks, Bruce. Morning, everyone. Fiscal year 2025 was a challenging period for the marine industry, shaped by a difficult retail environment and heightened tariff uncertainty. Despite these headwinds, I am proud of our team's ability to navigate the landscape and deliver strong results for our customers and partners. We outpaced the market while remaining disciplined in protecting the health of our dealers, which remains a North Star for our organization. As a reminder, we led the charge. supporting our dealers' efforts to bring their inventory into alignment back in fiscal 2024. This set us up nicely for our outperformance of the market in fiscal year 2025, and we are well positioned to repeat that success in fiscal 2026. The organization is ready to execute despite a softer retail backdrop. At the same time, we continue investing in our people and kept our foot on the gas with innovation. We will be introducing 11 new model year 26 boats while maintaining our industry-leading commitment to quality and safety. I'm excited to share details on some of these new models with you in just a moment. In addition, we generated another strong year of free cash flow, producing $29 million. This consistent generation of free cash flow demonstrates both our discipline and the resilience of our business model, regardless of the market conditions. As anticipated, we also reduced capex spending as we have the capacity in place to support the next upturn in retail demand when the market normalizes. And lastly, we executed on our capital allocation strategy, returning $36 million to shareholders through share repurchases. Turning to our dealers, as we noted in fiscal Q3, we expected dealers to continue trimming inventory. elevated interest rates, ongoing macroeconomic uncertainty, and the timing of trade policy changes weighed on the consumer sentiment, which showed up in the software industry retail data. Initial market data suggests that fiscal Q4 was the weakest quarter of the year, with the broader market down mid-teens percentage points. We remain committed to aligning wholesale with retail. Last year, when dealers faced higher inventory levels, We were one of the first in the industry to adjust production and increase promotional support. These proactive steps helped reduce non-current dealer inventory of our products, which allowed us to lower promotional spending in the back half of fiscal 2025. To be clear, we are still providing promotions to our network. The key distinction is that our promotions are now more normalized to a market consumer incentive rather than an aggressive inventory reduction. At our most dealer meetings, at our recent dealer meetings, we came away energized by the sentiment. Dealers appreciated our customer-first approach, ensuring products aligned with individual needs for a premier boating experience. We shared our new product lineup and the excitement building around it, while also outlining plans to strengthen our role as a trusted dealer partner. This includes new tools to drive retail activity in the local markets and support long-term dealer success in fostering stronger relationships with our customers. We look forward to sharing more about these unique initiatives at our upcoming Investor Day next month. We have also made significant progress upgrading our dealer network. 2025 marked a turning point as we reset our Malibu and Access network. With boat liquidations behind us and new dealers in place, We are rebuilding our share in these affected markets and are proud of the quality and speed at which our new dealers have come online. While there is still work to do, onboarding has been smooth. And our new dealers are enthusiastic about providing industry-leading service and support to our customers in these important markets. Customer-centric innovation is central to our mission at MBI. As a market share leader, we are committed to delivering the most advanced boating technology and highest quality products in the industry. Our model year 26 lineup sets a new standard in creativity, craftsmanship, and performance, including 11 new models. Among the highlights are our Covia 245 center console and the 305 center console, which were unveiled at our national dealer meeting three weeks ago. These models are part of our strategy to upgrade the Covia lineup. And we are excited to see that initial orders have exceeded expectations. Next, we have the Malibu 22 LSV, the newest evolution of our best-selling LSV series. Easy to tow, store, and maneuver, the 22 LSV is the most complete compact wake boat ever built. We recently announced the Axis T250, the biggest, boldest, and most powerful Axis in our history. with room for 18 to ride, relax, and repeat. The T250 is an excellent option for value-focused buyers looking for outstanding quality at an affordable price point. And finally, the Pursuit S388, an evolution of one of our most popular models with more storage, premium upgrades, and performance in a smart layout. We plan on unveiling six more new models across our portfolio in the coming months and will continue rolling out the all-new Monsoon engine with enhanced power, torque, and efficiency. In addition to customer-centric innovation, our enterprise commitment to our communities remains paramount. Our mission is to deliver the ultimate on-the-water experience, and in doing so, we remain committed to safe boating and waterway health. We continue to educate customers on responsible voting and push the bounds of innovation with environmental impact in mind. Also, our longstanding history and involvement in MMMA and WSIA exemplifies our leadership role in the industry, and together with our industry advocates, we can take ownership in setting the standard for responsible and safe voting. Looking ahead, We are going to stay grounded in the realities of today's market, which is still feeling the effects of the broader macroeconomic uncertainties. With respect to the trade environment, tariffs will continue to create uncertainty in the general market. However, we anticipate a modest direct impact on our fiscal 2026 cost structure, estimated between 1.5% to 3% cost of sales, assuming current tariff rates. We will remain proactive in mitigating impacts through our strategic supply chain management initiatives and leverage our robust, vertically integrated U.S. manufacturing capabilities, all of which will balance the need for associated price increases. From a retail standpoint, we do expect to see gradual improvement in fiscal year 2026. We have not yet seen a clear inflection point that signals a return to growth for the overall industry. That is why we're going to remain disciplined, keeping our expectations aligned with what the market is telling us real time, and not get ahead of ourselves. Our dealer-first approach will continue to guide us, and our operational discipline will ensure we are in the right position when the market turns. We have the capacity in place, an exceptional team in the driver's seat, and a customer-centered product line that positions us to hit the throttle when the time comes. We are excited about the long-term opportunity ahead for MBI and for our industry. And as I mentioned, we look forward to sharing more at our investor day in September, where you will see how we are building on our strong foundation, innovating for the future, and positioning ourselves to accelerate growth. We hope you can join us. With that, I'll turn it back to Bruce to discuss our financial results in more detail.