• Net Sales: Decreased 5.1% year-over-year to $200.3 million.
• Unit Volume: Decreased 11% to 1,222 units.
• Net Sales per Unit: Increased 6.6% to $163,900 per unit.
• Gross Profit: Decreased 0.2% to $37.4 million.
• Gross Margin: Increased by 90 basis points to 18.7%.
• Selling and Marketing Expenses: Increased 6.7%, representing 3% of sales.
• General and Administrative Expenses: Increased 71.9%, representing 13.3% of sales.
• GAAP Net Income: Decreased 76.1% to $2.4 million.
• Adjusted EBITDA: Decreased 26.3% to $16.9 million.
• Adjusted EBITDA Margin: Decreased to 8.4% from 10.9% in the prior year.
• Non-GAAP Adjusted Net Income per Share: Decreased 45.6% to $0.31 per share.
• Cash from Operations: Generated over $28 million.
• Capital Expenditures: $5.6 million.
• Stock Repurchase: $10 million in the quarter.

• Warning! GuruFocus has detected 5 Warning Signs with MBUU.

Release Date: January 30, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Malibu Boats Inc (NASDAQ:MBUU) reported second-quarter results slightly higher than expected, despite a traditionally slower time of year.
• The company showcased its 2025 lineup at early season boat shows, receiving positive dealer enthusiasm and reaffirming its commitment to innovation.
• Malibu Boats Inc (NASDAQ:MBUU) maintained a disciplined approach to production and inventory management, prioritizing dealer health and brand strength.
• The Malibu access year-end sales event saw higher retail sell-through and good participation compared to the previous year.
• Cobalt, one of the company's segments, showed unit growth and strong market share performance, supported by a robust dealer network and exciting new models.

Negative Points

• Net sales decreased by approximately 5.1% year-over-year, driven by decreased unit volumes in the Malibu and Saltwater Fishing segments.
• The broader retail marine market trends remain challenging, with indicators of demand below original assumptions.
• Retail softness is particularly evident in the saltwater segment, especially in Florida, due to lingering regional impacts from the hurricane season.
• GAAP net income for the quarter decreased 76.1% versus the prior year, and adjusted EBITDA margin decreased to 8.4% from 10.9%.
• General and administrative expenses increased significantly by 71.9%, driven by higher legal fees and compensation-related expenses.

Q & A Highlights

Q: Can you discuss the impact of hurricane activity in Florida on your business and any potential for replacement demand? A: Florida is a significant market for us, especially in the Saltwater segment, where we do over 50% of our business. The region is still recovering, and while we expect replacement demand, it will likely return gradually over time rather than in a single surge.

Q: Your guidance suggests second-half revenue growth. How much visibility do you have into these numbers? A: We have good visibility for the third quarter based on current orders. The fourth quarter will depend on market conditions. We expect growth due to easier comparisons from last year, where we saw a deceleration in business.

Q: Can you elaborate on the significant increase in G&A expenses and how it should trend for the rest of the year? A: The increase was due to higher legal fees and compensation-related expenses. We expect these to normalize in the second half, with some expenses being one-time in nature.

Q: How are dealers feeling about the market, and what is the health of your dealer base? A: Dealers are cautiously optimistic, with about 60% of retail activity still to come. They appreciate our disciplined approach to production and inventory management, which helps them enter the selling season in a strong position.

Q: What are you seeing in terms of demand by segment at boat shows? A: Demand has been mixed. We saw strong performance in Saltwater at the Fort Lauderdale show, while other shows like Atlanta were more mixed. Freshwater shows in Minneapolis and Chicago were strong, but New York was mixed.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.