Malibu Boats, Inc. (NASDAQ:MBUU) Q2 2024 Earnings Call Transcript

Operator: And our next question comes from Fred Wightman from Wolfe Research.

Fred Wightman: I just wanted to come back to the mix question. As it was pointed out, the Malibu/Axis as a percentage of mix was down almost 10 points. How do you sort of see that trending in the back half of the fiscal year, just given some of the capacity that you guys have coming online for the other brands? That’d be helpful.

Jack Springer: We see it probably pruning down a little bit more, more toward that 40-ish range for the second half of the year. I think you pointed out the things that are really going to influence that. But what I would tell you is that Cobalt has been surprisingly strong for us. And I think it will continue to be. We saw it, as I mentioned, in the New York boat show, again. And so, I think from a freshwater perspective, they’re going to capture more of the brand share and then we expect saltwater to be a little bit stronger than the Malibu/Axis.

Fred Wightman: Just a clarification. There was a comment about EBITDA margins for 3Q being slightly below 2Q. Was that an absolute comment? So the actual reported EBITDA margin will be slightly lower than 2Q or was it a year-over-year comment?

Bruce Beckman: It was versus Q2, so slightly lower than Q2.

Operator: And, ladies and gentlemen, at this time, we’ll be ending today’s question-and-answer session. I’d like to turn the floor back over to Jack Springer for any closing remarks.

Jack Springer: Thank you very much. Despite the softened retail demand and being in our slow season, we continue to see success at our year-end sales event and the boat shows, a testament to our durability of the business and a dominant position in every market we serve. While channel inventory levels are higher than we want to see, we expect to see downward movement as we get into the selling season and normalize over the course of the next six months. We are focused on driving channel inventories to historic norms and we’ll continue to adjust production up or down accordingly to make that occur. Our strategic planning, operational excellence and supply chain management continued to support our margin stability and our vertical integration has enabled us to remain resilient.

Despite the challenges, we remain optimistic as we look to the back half of this year. We’re positioned to grow and recover as retail demand recovers. We relish this environment. This is when we fine tune our model and we position for a strong recovery. We did it back in 2009 through 2011. Not only driving recovery, but capturing market share and exiting the downturn even stronger than before. As I always do, I want to thank you for your support and for joining us today. Have a great day.

Operator: Ladies and gentlemen, this concludes today’s conference call. We thank you for participating. You may now disconnect your lines.