Q4 2024 Malibu Boats Inc Earnings Call

Speaker Change: Good morning and welcome to Malibu Boats conference through discuss fourth quarter and full fiscal year 2024 results. At this time, all participants are in the list and only mode.

Unknown Executive: at full fiscal year 2024 results. At this time, all participants already listen only mode. Later, we will conduct a question-and-answer session, and instructions will follow at that time.

Speaker Change: Later we will conduct a question and answer session and instructions will follow at that time. Please be advised that any reproduction of this call in whole or in part is not permitted without written authorization of Alabama Boots.

Unknown Executive: Please be advised that any 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.

Unknown Executive: On the call today for management, Mr. Steve Menneto, Chief Executive Officer, Mr. Michael Hooks, Executive Chair, Mr. Respectman, Chief Financial Officer, and Mr. Reggie Anderson, President.

Speaker Change: and as a reminder, today's call is being recorded.

Speaker Change: On the Call of the Day of Management, our Mr. Steven Neto, Chief Executive Officer, Mr. Michael Hooks, Executive Chair, Mr. Rees Beckman, Chief Financial Officer, Mr. Richie Anderson, President. I'm not going to call over Mr. Beckman to get it started. Please go ahead, sir.

Bruce Beckman: I'm not on the call over Mr. Beckman to get it started. Please go ahead, sir.

Bruce Beckman: Thank you and good morning, everyone.

Michael Hooks: On the call, Michael will provide a brief update and introduce our new CEO, Steve Menneto. I will provide commentary on the business and discuss the fiscal fourth quarter and full year 2024 financials. And Steve will provide an update on the new model year and year-term growth priorities.

Rees Beckman: Thank you and good morning everyone.

Rees Beckman: On the call, Michael will provide a brief update in introduce our new CEO, Steve Minetto. I will provide commentary on the business and discuss the fiscal fourth quarter and full year, 2024 financials, and Steve will provide an update on the new model year and year term growth priorities.

Unknown Executive: We will then open the call for questions.

Unknown Executive: A press release covering the company's fiscal fourth quarter and full year 2024 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 remarks on this call and contain certain forward-looking statements, including predictions, expectations, estimates, and 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.

Rees Beckman: We will then open the call for questions. A press release covering the company's fiscal fourth quarter of full year 2020 for results with the issue today, and a copy of that press release and be found in the investigation of the company's website.

Speaker Change: I also want to remind everyone that Management's remarks on this call, a contained certain forward-looking statements including predictions.

Speaker Change: Expertations, Estimates and other information that might be considered forward-looking.

Speaker Change: and that actual results could differ materialies 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 of future events.

Unknown Executive: Factors that might affect future results are discussed in our violence with the SEC, and we encourage you to review our SEC violence for a more detailed description of these risk factors. We also note that we will be referring to certain non-GAF 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. Reconciliation of these non-GAF financial measures, you GAF financial measures are included in our earnings release.

Speaker Change: Factor said might affect future results or discussed in our violence with the SEC and we'd encourage you to review our SEC violence or more detailed description of these risk factors.

Speaker Change: We also note that we will be referring to certain non-gap financial measures on today's call. Such as Adjusted Evident Marching.

Speaker Change: Adjusted fully distributed net income and adjusted fully distributed net income per share.

Michael Hook: Reconciliation of the non-gap financial measures, the gap financial measures are included in our earnings release. I will now turn it all over to Michael Hook's chair, Melsey Works, Michael.

Michael Hooks: I will now turn the call over to Michael Hooks, Chair of Malibu Works. Michael. Thanks, Bruce, and good morning, everyone.

Michael Hooks: I would like to start the call by welcoming Steve Menetto as our new CDO. As you know, the board conducted a comprehensive search process, and we are thrilled to have Steve at the helm. His depth of experience and track record of success makes him an excellent fit to lead Malibu Boge through the cycle and into its next phase of growth.

Speaker Change: Thanks, Bruce, and good morning, everyone. I would like to start to call by welcoming Steve Minetto as our new CEO. As you know, the board conducted a comprehensive search process and we are thrilled to have seated to help.

Melsey Works: The step of experience and track record of success makes him an excellent tip to lead Malibu Boats through the cycle and into its next phase of growth.

Michael Hooks: I also want to take this opportunity to thank the entire NBI team for their passion and dedication, particularly during this transition period. Your hard work and commitment have been instrumental in navigating this change, and we are all grateful for your continued efforts.

Speaker Change: I also want to take this opportunity to thank the entire NBA team for their passion and dedication, particularly during this transition period.

Speaker Change: Your hard work and commitment of an instrumental in navigating this change, and we're all grateful for your continued efforts.

Bruce Beckman: You will hear more from Steve in a few moments, but first let me turn it back over to Bruce to walk us through the fiscal year and quarterly results.

Speaker Change: You'll hear more from Steven in a few moments but first let me tear it back over to Bruce to walk us through the fiscal year and quarterly results

Bruce Beckman: Thank you, Michael. As we close out fiscal 2024, we showcase the resilience of Malibu Boats and execute it on our strategic goals. This is by the challenging retail environment. As anticipated, our financial results during the quarter were impacted by the necessary steps we took to reduce channel inventories, including reducing production levels and increasing promotional support. As discussed on our prior call, this was our top priority during the quarter, and we made significant progress with MVI dealer inventories now aligned with historical week-on-hand levels. Our dealer partners have executed well in a very competitive promotional environment, and we appreciate that support.

Bruce: Thank you Michael.

Bruce: As we close out fiscal 2024, we showcase the resilience of Malibu boats and execute it on our strategic goals, despite a challenging retail environment.

Bruce: As I anticipated, our financial results during the quarter were impacted by the necessary steps we took to reduce channel inventories, including reducing production levels and increasing promotional support.

Bruce: As discussed on our prior call, this was our top priority during the quarter, and we made significant progress. Within the idealary inventory is now aligning with his soul, but we've got weeks on hand levels.

Speaker Change: Our dealer partners have executed well in a very competitive promotional environment, and we appreciate this report.

Bruce Beckman: The resilience of our business model was evident in our results. As we have discussed many times in the past, our cost structure is highly variable, and we demonstrated this throughout Fiscal 2024. For the year, cost of sales decreased 34%, while revenues declined 40, demonstrating our operational excellence and highly variable cost structure in line with our historical range of 80 to 90%. Our variable cost structure and focus on working capital enabled us to generate positive pre-cash flow during the fourth quarter, a remarkable accomplishment in a quarter where revenue was down over 50%. As a result, we were able to repay all remaining debt and repurchase $10 million a stock in the quarter.

Speaker Change: The resilience of our business model with evidence in our results.

Speaker Change: As we have discussed many times in the past, our cost structure is highly variable, and we demonstrated this throughout fiscal 2024.

Speaker Change: We're the year cost of sales decrease, 40% or revenues to climb 40 demonstrating our operational excellent and highly variable cost structure in line with our historical range of 80 to 90%.

Speaker Change: Our variable cost structure and focus on working capital enabled us to generate positive pre-cache flow during the fourth quarter, a remarkable accomplishment in a quarter where revenue was down over 50%.

Speaker Change: As a result, we were able to repay all remaining debt and repurchase $10,000 to stock in the quarter.

Bruce Beckman: The ability for MVI to execute our capital allocation priorities in the face of industry headwinds only increases our confidence in our business model as the cycle normalizes. We continue to streamline our operations and make great strides ramping our world county facility in the quarter. In addition to producing cobalt small boats, we have integrated our Malibu electronics wiring harness operation into the facility. As a result, we are able to consolidate our manufacturing footprint in Tennessee as well as move from our Alabama facility, shortening our supply chain and increasing our operational efficiency. With the addition of their own county facility and continuous vertical integration efforts, we have enough capacity across all of our brands to support the next industry growth cycle and reduce our future capital expenditure levels.

Speaker Change: The ability for MDI to execute our path on allocation priorities in the face of industry headwind only increases our confidence in our business model as the cycle normalizes.

Speaker Change: We continue to streamline our operations and make great strides ramping our world-counting facility in the court. In addition to producing cobalt small boats, we have integrated our Malibu electronic swirling harness operation into the facility.

Speaker Change: As a result, we are able to consolidate our manufacturing footprint in Tennessee, as well as move from our Alabama facility. Shortening our supply chain and increasing our operational efficiency.

Speaker Change: With the addition of the Rome County facility and continuous vertical integration efforts, we have enough capacity across all of our brands to support the next industry growth cycle and reduce our future capital expenditure levels.

Bruce Beckman: I would like to provide a brief update on our dual network and the significant progress made during the quarter. In 14 of the 15 markets formally served by Tommy's boats, our newly authorized dealers are up and running, selling boats and providing great service to our customers. We devote a significant amount of time and resources to find, develop, and improve the performance of our dealer network and our fleet with our new dealer lineup. The speed at which we brought these dealers online showcases the strength of our premium brands and the dealer's confidence in Malibu to provide industry-using innovation, quality, and performance.

Speaker Change: I would like to provide a brief update on our deal of network as a significant progress made during the quarter. In 14 of the 15 markets formally served by Tommy's folks. Our new authorized dealers are up and running, selling boats and providing great service to our customers.

Speaker Change: We devote a significant amount of time and resources to find, develop and improve the performance of our dealer network and our peace with our new dealer lineup.

Speaker Change: The speed at which we brought these dealers online showcases the strength of our premium brands as the dealers confidence is now approved to provide industry using innovation, quality and performance.

Bruce Beckman: Finally, as it relates to Tommy's boats, we have completed our repurchase obligation with the repurchase of 19 years. Dickens, far fewer than originally estimated.

Speaker Change: Finally, as a relay, colleagues' votes, we have completed our research solidation with the

Bruce Beckman: Lastly, before diving into the results, I would like to give you an update on our market share performance. In cool ball, we've expanded our training 12 month market share lead in the student drive segment by over 300 basis points on the strength of our industry-leading innovation. The market reaction to our early year 24 releases, the R33 Surf and the CS series, has been strong and it's contributing to this year's share teams. We have been investing in cobalt for several years now and have grown our cobalt's strength by share by over 500 basis points since we acquired the brand in 2017.

Speaker Change: Lee, before diving into the results, I would like to give you an update on our market show performance.

Speaker Change: In Cool Wall, we've expanded our training 12 month architecture, leading in the student drive segment by over 300 basis points on the strength of our industry leading in innovation.

Speaker Change: The Market Reaction to our Model Year 24 releases the R33 Surve and the CES series and it's been strong and it's contributing to this year's shareings.

Speaker Change: We have been investing in co-walt for several years now and have grown our co-walt student guys share by over 500 cases points since we acquired the brand in 2017.

Bruce Beckman: We have more exciting innovations coming from 2025. Pursuit is another brand that is gaining momentum since acquiring the Pursuit brand of 2018. We have expanded our market share by nearly 300 basis points. Our share of the 30 foot and above segment now exceeds 20%; we intend to build on our momentum in 2025 with two additional above 30 foot offerings. We are refreshing our maverick both group product lines and have gained 100 basis points in market share since acquiring these brands in 2020. Our initial focus has been on refreshing the Pathfinder model, model line up, and the results have been outstanding.

Speaker Change: We have more exciting innovations coming from 2020-25.

Speaker Change: Brassuit is another brand that is gaining momentum since the choir in the pursuit brand of 2018. We have expanded our market share by nearly 300 pages points.

Speaker Change: Our share of the 30-foot and above segment now, since 20%, we end the build on our momentum in 2025 with two additional above 30-foot powerframes.

Speaker Change: We are refreshing our Maverick boat through product lines, and have gained a hundred basis points of mark share and to acquire in these brands in 2020.

Speaker Change: Our initial focus has been on refreshing the Pathfinder model, Model Line Up, and the results have been out seen. Our dream called Mon Market Share of the Babel with Market Segment is increased by over 500 basis points.

Bruce Beckman: Our training 12 month market share of the babel of market segment has increased by over 500 basis points, making us the clear leader in this important segment. In 2025, we are turning our attention to the cobalt yield line, and people will be sharing more detail on this in a minute. In the important ski weight segment, there's no question of our share in the market's formally served by Tommy's boats has been temporarily impacted while we refreshed our dealer presence. However, it is worth noting our share in the remaining market is holding strong at approximately 30%. We are excited about the new dealer line up in the former Tommy's Market.

Speaker Change: Making us a clear leader in this support segment. In 2025, we are turning our attention to the copia line. People will be sharing more detail on this in a minute.

Speaker Change: In the importance he wakes segment, there's no question of our share and the market's formally served by Tom Spots. As Ben Temporarily impacted, while we refresh our dealer presence.

Ben: Awever is worth noting our shared remaining markets this opening strong at approximately 30%.

Bruce Beckman: Combine this with the extensive innovations we are launching. We have confidence in our ability to regain share from 2025.

Speaker Change: We are excited about the new dealer line-up in the former Tommy Smartgate.

Speaker Change: Combined this with the Executive Innovations we are launching. We have confidence in our ability to regain chair from 2021.

Bruce Beckman: Now, turning to fourth quarter results. As we discussed on our last earnings call, the actions required to reduce the yielding inventory levels would significantly impact our short-term results, and that is certainly the case. As expected, the fiscal fourth quarter in net sales decreased 57.4% to 158.7 million dollars, and unit volume decreased 59% to 1,445 boats. The decrease in net sales was driven primarily by lower production and higher promotional spending in support of our initiatives to reduce dealer inventory levels. This included the 19 boats we repurchased from Tommy's Boats. The Malibu and Axis brands represented approximately 30.5% of human sales.

Speaker Change: Now, turning to fourth quarter results, as we discussed on our last during this fall, the actions required to reduce the earlier inventory levels would significantly impact our short term results and that is certainly the case.

Speaker Change: As expected, this will report for the net sale decrease 57.4% to 158.7 million dollars, and unibying decreased 59% to 145 votes.

Speaker Change: The decrease in the net sales was driven primarily by lower production and higher promotional spending into support of our initiatives to reduce dealer inventory levels. This includes the 19 votes we've repurchased for Tommy's votes.

Speaker Change: The Malibu and Actors grants represented approximately 30.5% of human sales, who will represent a 35.4% and it's all water fishing represented the remaining 34.1%.

Bruce Beckman: Cobalt represented 35.4%, and saltwater fishing represented the remaining 34.1%. Combinated net sales per unit increased 4% to 151.878 dollars per unit. David, driven primarily by favorable model mix and year-over-year price increases. 24 gross profit decreased 87.8% to $12.5 million, and gross margin percentage was 7.9%. This compares to a gross margin percentage of 27.5% in the prior year of period. This expected decline in gross margin was driven by increased promotional spending across all segments, less favorable mix, and fixed cost-delivering from lower production during the quarter. Q4 selling and marketing expenses decreased 10.6% to $4.9 million. As a percentage of sales, year-over-year selling and marketing expenses increased 150 basis points to 3.1%.

Speaker Change: and solidated net sales per unit increased 4% to 151,878 dollars per unit. You're having primarily by favorable model mix and you're over your price increases.

Speaker Change: 2.4 gross profit decrease 87.8% to 12.5 million dollars and gross margin percentage to 7.9%.

Speaker Change: This compares to a gross margin percentage of 27.5% in the prior year period. This respect is declined in gross margin, was re-evaled by increased emotional spending across all segments. Let's be able to mix and fix costly leveraging from lower production during the quarter.

Speaker Change: Q4 selling and marketing expenses decrease 10.6 per week after the $49 million as a percentage of sales, year over year selling and marketing expenses increase 150 AC to 3.1%.

Bruce Beckman: Q4 general and administrative expenses of $76.3 million decreased versus last year by 56.6% or $99.4 million. As a reminder, last year's Q4 included a $100 million to the overall seller. Net loss for the quarter increased 8.6% to the loss of 19.6 million dollars; adjusted EBITDA for the quarter decreased to 104.5%, to the loss of 4.1 million dollars, and adjusted EBITDA margin decreased to negative 2.6% from positive 24.2%. Non-GAAP adjusted fully distributed med income per share decreased 113.1% to a loss of 39 cents per share. This is calculated using a normal IC court tax rate of 24.3%, and a fully distributed weighted average share cost of approximately 21 million shares.

Speaker Change: Group Board General and Administrative Acceptors of 76.3 million dollars decreased versus last year by 56.6% or 99.4 million dollars. As a reminder, last year's Group Board included a $100 million people settlement.

Speaker Change: Net loss for the quarter increased 8.6%.

Speaker Change: The loss of $19.6 million by just to eat a doubt for the quarter decreased to 104.5% through a loss of $4.1 million and adjusted even the margin decreased to negative 2.6% from positive 24.2%.

Speaker Change: 9th, Jeff adjusted fully distributed Medink on per share decreased by 113.1% to a loss of 39 cents per share.

Speaker Change: This is calculated using the normal IC court tax rate of 24.3% and a fully distributed weighted average share count of approximately 21 million shares.

Bruce Beckman: For a reconciliation of adjusted EBITDA and adjusted fully distributed med income per share to GAAP metrics, please see the tables in order in the two weeks. Turning our attention to cash flow, we generated $4.5 million to positive pre-cash flow with Q4. Capital expenditures for $11.9 million in quarter, of which $3.9 million was associated with the Roman County Facilities, which is now complete.

Speaker Change: for a Reconciliation of Adjusted EBITDA and adjusts the voice as you did in that income for shared to gap metrics. These seem to be the tables to have our room to be seen.

Speaker Change: Attorney in our attention to cash flow, we generated $4.5 million of positive pre-cash flow with Q4, capital expenditures were $11.9 million in order of which 3.9 million was associated with the wrong county facility, which is now complete.

Bruce Beckman: Now to recap our results for all of Pistol 2024, net sales decreased 40.3% to 829.0 million dollars, and unit volumes decreased 45.4% to 5,385 units. Consolidated net sales per unit increased 9.4% to 153,953 dollars per unit, driven by favorable model mix and inflationary year-over-year price increases, partially offset by increased dealer flowing program costs and higher promotional spending. Gross profit decreased 58.1% to 147.1 million dollars, net income for the increase 152.3% to a net loss of 56.4 million dollars, and adjusted EBITDA decreased 71.0% to 82.2 million dollars for the year. For the year, non-GAAP-adjusted, pulling distributed net earnings per share decreased 79.1% to $1.92 per share.

Speaker Change: Now to recap our results for all of fiscal 2020-24, net sales decreased 40.3% to 829.0 million dollars, and unibiling decreased 45.4% to 5,305 units.

Speaker Change: and Solidated Net Sales for Unit, increased 9.4% to 150,952 dollars per unit, driven by favorable bottlenecks, inflationary year over your price increase.

Speaker Change: Harsely offset by increased dealer scoring program costs and higher promotional spending.

Speaker Change: Rose Prophet decreased 58.1% to 147.1 million dollars.

Speaker Change: Metting company of the increased 152.3% to a net loss of 56.4 million dollars and adjusted the ability to increase 71.0% to 82.2 million dollars for the full year.

Speaker Change: For the year, non-gap adjusted fully distributed net earnings per share, increase 79.1% to a dollar 92 per share.

Bruce Beckman: For the year, our free cash flow included an approximately $55 million net cash outflow relating to last year's legal settlement. Excluding this one-time net outflow, our free cash flow for the year was approximately $34 million. Inclusive of $76 million of cat-backs, of which approximately $47 million was invested in our new Brown County facility. We executed our capital allocation priorities by paying off our remaining debt and returning $29.8 million to shareholders to share repurchases. Heading into fiscal year 2025, while we expect near-term market conditions to remain challenging, we are optimistic about the long-term growth potential of MBI.

Speaker Change: For the year, our crew cash flow included and approximately $55 million net cash outflow relating to last year's legal settlement.

Speaker Change: According to this one-time net of a quote, a free cash flow for the year was approximately $34 million. Inclusive of $76 million of catbacks of which approximately $47 million was invested in our new county facility.

Speaker Change: We executed our capital allocation priorities by paying off our remaining debt and returning 29.8 million dollars to shareholders to share the purchases.

Unknown Executive: at full fiscal year 2024 results. At this time, all participants already listen only about. Later, we will conduct a question and answer session, and instructions will follow at that time.

Speaker Change: Hating in the fiscal year 2025, while we expect your term market conditions to remain challenging.

Unknown Executive: Please be advised that any 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.

Bruce Beckman: Given the progress that we have made using our channel inventory levels, we have put ourselves in a position to realize a meaningful recovery as the market returns to growth. Despite our belief that we are positioned for growth, we will continue to take a prudent approach to granting production levels and monitoring the other inventory given the macro uncertainty and pressure on dealer is caused by high flooring costs. We cannot predict exactly when the retail market will return to growth, but we remain confident in the fundamentals of our business and our ability to maintain our investment in industry-making innovation will generate a strong cash flow in almost all industry environments.

Speaker Change: We are optimistic about the long-term growth potential of MBI. Given the progress that we have made using our channel inventory levels, we have put ourselves in a position to realize a meaningful recovery as the market returns to growth.

Unknown Executive: On the call today for management, our Mr. Steve Veneto, Chief of Officer, Mr. Michael Hoek's Executive Chair, Mr. Bruce Beckman, Chief Financial Officer, and Mr. Regi Anderson, President.

Speaker Change: Despite our belief that we are positioned for growth, we will continue to take a prudent approach to granting production levels and monitoring the other inventory given the macro uncertainty and a pressure on dealers caused by high flooring costs.

Bruce Beckman: I'm not on the call over, Mr. Beckman, to get it started. Please go ahead, sir.

Bruce Beckman: Thank you, and good morning, everyone.

Bruce Beckman: On the call, Michael will provide a brief update and introduce our new CEO, Steve Veneto. I will provide commentary on the business and discuss the fiscal 4th quarter and full year 2024 financials, and Steve will provide an update on the new model year and year-term growth priorities.

Speaker Change: We cannot predict exactly when the retail market will return to growth, but we remain confident in the fundamentals of our business. And our ability to maintain our investment in industry-making innovation will generate a strong cash flow and almost all industry environments.

Unknown Executive: We will then open the call for questions.

Bruce Beckman: With the Roam County facility completed, we expect capital expenditure levels to drop between $30 to $35 million in fiscal 2025. This will further improve cash generation, enabling us to execute on our capital allocation priorities, while continuing to return $10 million of cash to shareholders each quarter through the end of fiscal 2025.

Unknown Executive: A press release covering the company's fiscal 4th quarter and full year 2024 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 remarks on this call and contain certain forward-looking statements, including predictions, expectations, estimates, and 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 of future events.

Speaker Change: With the Rome County Facility completed, the expect capital extended to a level to drop between 30 to 35 million dollars in fiscal 2025. This will further improve cash generation, enabling us to execute on our capital allocation priorities.

Unknown Executive: Factors that might affect future results are discussed in our violence with the SEC, and we encourage you to review our SEC violence for more detailed description of these risk factors.

Speaker Change: While continuing to return 10 million dollars of cash to shareholders each quarter through the end of fiscal 2020.

Bruce Beckman: Based on our current operating plan, our expectations for fiscal year 2025 are as follows. We anticipate a year-over-year net sales to increase at a low single-digit percentage point rate. For Q1, we expect net sales to be up sequentially, but down year-over-year mid-to-high 30 percentage points, given a challenging year-over-year comparison. We also expect an increase in consolidated adjusted EBITDA margin ranging from 10 to 12 percent for the fiscal year. For Q1, we expect adjusted EBITDA margins of low single-digit as we maintain low production levels, with the sequential improvement coming from lower promotional spend. In summary, we overcame a volatile operating environment to generate sufficient cash to maintain our investments in our core business, pay off our debt, and return nearly $30 million to shareholders.

Speaker Change: Based on our current operating plan, our expectations for fiscal year 2025 are as follows.

Speaker Change: We anticipate a year-old year-net sales to increase at a low single digit percentage point rate.

Speaker Change: For you one, we expect net sales to be up to the country, but down year over the year, mid to high 30s percentage points. You have an challenging year over your comparison.

Speaker Change: We also expect an increase in consolidated adjusted EBITDA march.

Speaker Change: Ranging from 10 to 12% for the fiscal year. For a key one, we expect adjustment even a margin of low single digit. As we maintain low production levels, with this sequential improvement coming from lower promotional spent.

Unknown Executive: Please also note that we will be referring to certain non-GAAP financial measures on today's call, such as adjusted eva-dot, adjusted eva-dot margin, adjusted fully-distributed net income, and adjusted fully-distributed net income for share. Reconciliation of these non-GAAP financial measures, you GAAP financial measures, are included in our earnings quiz.

Speaker Change: In summary, we overcame a volatile operating environment to generate sufficient cash to maintain our investments in our core business.

Bruce Beckman: We are positioned to capitalize when the market returns to growth. As we begin the fiscal year, we are managing different Lee, keeping production low, and closely monitoring dealer inventory levels as we prepare for sequential improvement throughout the year. We stand ready to meet the needs of our customers and have the capacity to respond quickly and effectively when the market returns grow. As we reflect on fiscal year 2024, our team's dedication and agility were key to navigating the tough market and maintaining our focus on execution.

heart-death: Hey, I'm heart-death, I return nearly $30 million to shareholders, we're positioned to capitalize when the market returns to growth.

Bruce Beckman: I will now turn the call over to Michael Hoax, Chair of Malsy Works. Michael? Thanks, Bruce, and good morning everyone.

heart-death: As we begin the fiscal year, we are managing the fiscal year.

Michael Hoek: I would like to start the call by welcoming Steve Menetto as our new CDO. As you know, the board conducted a comprehensive search process, and we're thrilled to have Steve at the helm. His depth of experience and track record of success makes him an excellent fit to lead Malibu Boge through the cycle and into its next phase of growth.

Speaker Change: He can production low and closely monitoring dealer in the toy levels as we prepare for some actual improvement throughout the year.

Speaker Change: We stand ready to meet the needs of our customers and have the capacity to respond quickly and effectively when the market returns to growth.

Speaker Change: As we reflect on fiscal year 2024, our team's dedication and agility were key to navigating the tough market and maintaining our focus on execution.

Michael Hoek: I also want to take this opportunity to thank the entire NBI team for their passion and dedication, particularly during this transition period. Your hard work and commitment have been instrumental in navigating this change, and we are all grateful for your continued efforts.

Bruce Beckman: I'm excited to partner with our new CDL, Steven Edel, whose leadership and vision will help drive us towards sustainable growth and value creation. Together, we will continue building the honor, competitive strength, optimize our operation, and set MBI up for long-term profitable growth.

Speaker Change: I'm excited to partner with our new CDL Steve Meadow, who's leadership and vision will help drive us towards sustainable growth and value creation.

Bruce Beckman: You will hear more from Steve in a few moments, but first let me turn it back over to Bruce to walk us through the fiscal year and quarterly results. Thank you, Michael. As we close out fiscal 2024, we showcase the resilience of Malibu Boats and execute it on our strategic goals, despite a challenging retail environment. As anticipated, our financial results during the quarter were impacted by the necessary steps we took to reduce channel inventories, including reducing production levels and increasing promotional support.

Steve Meadow: Together, we will continue building the product as a district, optimize the operation, and set NBI up for long-term profitable growth. As we enter this next chapter with confidence and excitement, with that, I will turn it over to Steve.

Steven Menneto: As we enter this next chapter with confidence and excitement, with that, I will turn it over to Steven.

Steven Menneto: Thank you, Bruce, and good morning, everyone. I'm very excited to step into the role of CEO at Malibu Boats and build on our growth trajectory and what is already a very strong foundation. Over the quarter, we achieved several milestones despite a challenging year impacted by retail uncertainty, which positioned us well for the future success as cycles normalize. As Bruce mentioned earlier, we made strong progress reducing dealer inventories to historical, healthy levels. We added new dealers to our successfully serve our freshwater customers while maintaining our pace of innovation and our market leading presence. Malibu has a stellar reputation for innovation, quality, and performance.

Steve Meadow: Thank you, Bruce, and good morning, everyone. I'm very excited to step into the role of CEO at Maldoo Boats, and build on our growth trajectory and what is already a very strong foundation.

Steve Meadow: [inaudible]

Bruce Beckman: As discussed on our prior call, this was our top priority during the quarter, and we made significant progress with MVI dealer inventories now aligned with historical we got weeks on hand levels. Our dealer partners have executed well in a very competitive promotional environment, and we appreciate those support. The resilience of our business model was evident in our results. As we have discussed many times in the past, our cost structure is highly variable, and we demonstrated this throughout fiscal 2024.

Steve: As Bruce mentioned earlier, we made strong progress for reducing dealer inventories to historical healthy levels. We added new dealers to our successfully serve our freshwater customers.

Steve: Well, maintaining our pace of innovation and our market-leading presence.

Speaker Change: Malbu has a stellar reputation for innovation, quality, and performance, and I'm honored to be part of this future.

Steven Menneto: You know, I'm honored to be part of its future.

Steven Menneto: Before we jump into the new model year updates, I'll share my background why I joined Malibu at near-term actions of our team that our team is taking to position us for success. My way of introduction, I came to Malibu Boats after nearly three decades at Polaris. More recently, I had the privilege of leading the largest business, the off-road vehicle division, to significant revenue growth, nearly doubling its revenue to approximately $7 billion over the last five years. This included planning, developing, and building a global manufacturing footprint that supplies hundreds of thousands of vehicles worldwide. My journey also includes spearheaded the commercialization efforts on the on-road division, driving the launch and expansion of the Indian motorcycle business.

Bruce Beckman: For the year cost of sales decreased 34% while revenues decline 40, demonstrating our operational excellence and highly variable cost structure in line with our historical range of 80 to 90%. Our variable cost structure and focus on working capital, enabled us to generate positive pre-cash flow during the fourth quarter, a remarkable accomplishment in a quarter where revenue was down over 50%. As a result, we were able to repay all remaining debt and repurchase $10 million a stock in the quarter.

Speaker Change: Before we jump into the new Molly Ear Updates, I'll share my background while I joined Malibu at near-term actions of our team that our team is taking to position us for success.

Speaker Change: My way of introduction, I came to Malibu Boats after nearly three decades at Polaris. More recently, I had the privilege of leading the largest business, the off-road vehicle division, just significant revenue growth, nearly doubling its revenue to approximately $7 billion over the last five years.

Speaker Change: This included planning, developing and building a gold manufacturing footprint that supplies hundreds of thousands of vehicles worldwide.

Bruce Beckman: The ability for MVI to execute our capital allocation priorities in the face of industry headwind only increases our confidence in our business model as the cycle normalizes. We continue to streamline our operations and made great strides ramping our rural county facility in the quarter. In addition to producing cobalt small boats, we have integrated our Malibu electronics wiring harness operation into the facility. As a result, we are able to consolidate our manufacturing footprint in Tennessee, as well as move from our Alabama facility, shortening our supply chain and increasing our operational efficiency. With the addition of their own county facility and continuous vertical integration efforts, we have enough capacity across all of our brands to support the next industry growth cycle and reduce our future capital expenditure models.

Speaker Change: My journey also includes spearheaded the commercialization efforts on the on-road division, driving a launch and expansion of the Indian Motorcycle Business.

Steven Menneto: Throughout my career, I have learned the importance of innovation, customer focus, and operational excellence. Values that are deeply ingrained within the Malibu Boats culture today. My history of advancing high-impact opportunities meshed as well with the values of Malibu Boats, and together on competent we can drive aggressive growth in this fast-paced dynamic consumer-facing industry. Now that I've been here for about a month, I'm incredibly impressed by the company's talent and resources. As we step into the new fiscal year, my immediate focus will be on leveraging the company's competitive strengths, particularly our leading market positions and robust dealer network.

Speaker Change: Throughout my career, I have learned the importance of innovation, customer focus, and operational excellence, values that are deeply ingrained within the Malvoo Boats culture today.

Speaker Change: My history of advancing high-impact opportunities, missions well with the values of malvoos, and together on confident we can drive aggressive growth in this fast-paced dynamic consumer-facing industry.

Speaker Change: Now that I've been here for about a month, I'm incredibly impressed by the company's talent and resources. As we step into the new fiscal year, my immediate focus will be on leveraging the company's competitive strengths, particularly the our leading market positions and robust dealer network.

Steven Menneto: Our near-term strategy will be firmly rooted in our customer-centric approach, a value that I hold in high regard. We will maintain a key eye on the retail market, adapt swiftly to the challenging market conditions, and ensure our dealer partners have healthy inventory levels. Lastly, we will do all this while maintaining our industry-leading product design and innovation across our premium brands.

Bruce Beckman: I would like to provide a brief update on our dual network and the significant progress made during the quarter. In 14 of the 15 markets formally served by Tommy's boats, our newly authorized dealers are up and running, selling boats and providing great service to our customers. We devote a significant amount of time and resources to find, develop and improve the performance of our dealer network and our plea with our new dealer lineup.

Speaker Change: Our near-term strategy will be firmly rooted in our customer-centric approach, a value that I hold in the higher regard. We will remain, we will maintain a key eye on the retail market, adapt swiftly to the challenging market conditions, and ensure our dealer partners have healthy inventory levels.

Speaker Change: Lastly, we will do all this while maintaining our industry-leading product design and innovation across our premium brands.

Steven Menneto: Looking ahead to Moda Year 25, we are excited to continue our strong commitment to new products and innovation across all brands. We completed our completed tooling development center at Pursuit is now producing tooling for each of our MBI brands, furthering our vertically integrated efforts and speed to market. This year, we will introduce more new models across all brands than ever before. We will continue to outpace the competition on investing in new products and innovation as we continue to push the limits to drive consumer demand and market share growth as the market revows. This is a true differentiator for us and solidifies our place in the market as the premier manufacturer of premium powerboats, delivering on our customers' unwaiving desire for large, future-rich options across our portfolio.

Speaker Change: Looking ahead to Molly or 25, we're excited to continue our strong commitment to new products and innovation across all brands.

Bruce Beckman: The speed at which we brought these dealers online showcases the strength of our premium brands and the dealer's confidence in Malibu to provide industry using innovation, quality and performance. Finally, as a relate Tommy's boats, we have completed our repurchase obligation with the repurchase of 19 years. Far fewer than originally estimated.

Speaker Change: We completed our completed tooling development center at pursuit is now producing tooling for each of our NBI brands, furthering our Berkeley integrated efforts and speed to market.

Speaker Change: This year, we will introduce more new models across all brands that never before. We will continue to outpace the competition on investing in new products and innovation. As we continue to push the limits to drive consumer demand and market share growth as the market rebounds.

Bruce Beckman: Lastly, before diving into the results, I would like to give you an update on our market share performance. In cool, we've expanded our training 12 month market share lead in the share teams. We have been investing in cobalt for several years now, and have grown our cobalt standard eye share by over 500 basis points since we acquired the brand in 2017. We have more exciting innovations coming from 2025. Pursuit is another brand that is gaining momentum since acquiring the pursuit brand of 2018.

Speaker Change: This is a true differentiator for us and solidifies our place in the market as the premier manufacturer of premium powerboats. The living on our customers' unwaiving desire for large, feature-rich options across our portfolio.

Steven Menneto: For Malibu, we are once again introducing four new models, far more than any other competitor. This includes the all-new 25 LSB, the best-selling 25-foot tow boat on the market. Next, we are making a return to the 22-foot pickle fork segment with the all-new 22 MXC. We have now produced a boat in this segment since 2020 and look forward to reintroducing this experience for customers in this category. Next is the all-new 24 MXC, the largest boat in the MXC series. We will also be introducing another ultra premium Malibu model in the second fiscal quarter. Last but definitely not least is the all-new Malibu Command Center, a testament to the industry-leading innovation that our customers come to expect across our Malibu line.

Speaker Change: For Malibu, we are once again introducing four new models, four more than any other competitor. This includes the all new 25 LSB, the best selling 25 foot tow boat on the market.

Speaker Change: Next, we are making returns to the 22-foot pickle forks segment with the all-new 22-MXC.

Speaker Change: We have not produced a boat in this segment since 2020 and look forward to reintroducing this experience for customers in this category.

Bruce Beckman: We have expanded our market share by nearly 300 basis points. Our share of the 30-foot and above segment now exceeds 20%, we end to build on our momentum in 2025 with two additional above 30-foot offerings. We are refreshing our maverick boat group product lines and have gained 100 basis points in market share since acquiring these brands in 2020. Our initial focus has been on refreshing the pathfinder model line up, and the results have been outstanding.

Speaker Change: Next is the All-New 24 MXC, the large spoke in the MXC series.

Speaker Change: We will also be introducing another ultra premium Malibu model in the second fiscal quarter.

Speaker Change: Last but definitely not least is the all new Malibu Commencer, a testament to the industry leading innovation that our customers come to expect across our Malibu line.

Steven Menneto: Malibu has, again, raised the bar for the next level driver experience, with the combination of our 15.8-inch and our 8-inch touchscreen and a new advanced operating system, which is, by far, the most intuitive system on the market, enabling a unique and premium sleek look and feel when you are in the cockpit. Starting to coal, we will be launching four new models later this model year, each designed to offer non-carlobe on-water experience. We are also excited about the upcoming debut of our latest twin-inch and models, which are set to redefine what boaters expect from Cobalt. These exciting new launches will have features such as full cockpit, enclosures, and standard side entry, enhanced, increasing comfort and on board accessibility.

Speaker Change: Now who has again raised the bar for the next level driver experience with the combination of our 15.8 inch and our 8 inch touchscreen in a new advanced operating system.

Bruce Beckman: Our training 12 month market share of the bayboat market segment has increased by over 500 basis points, making us the clear leader in this important segment. In 2025, we are turning our attention to the cobalt line, and people will be sharing more detail on this in a minute. In the important ski weight segment, there is no question of our share in the market formally served by Tommy's boats has been temporarily impacted while we refreshed our dealer presence.

Speaker Change: is by far the most intuitive system on the market, enabling a unique and premium sleep look and feel when you are in the cockpit.

Speaker Change: Learning to Cole, we will be launching 40 models later this model year, each design to offer non-curl-loaded, underwater experience.

Speaker Change: We are also excited about the upcoming debut of our latest twin-engine models, which are set to redefine what voters expect from Cobalt.

Bruce Beckman: However, it is worth noting our share in the remaining market is holding strong at approximately 30%. We are excited about the new dealer line up in the former Tommy's market. Combine this with the extensive innovations we are launching. We have confidence in our ability to regain share from 2025.

Speaker Change: News exciting new launches will have a feature such as full cockpit and closures and standard side entry and hand-sincreasing comfort and on board's accessibility.

Steven Menneto: In addition, our engineers have integrated cutting-edge technology into the next generation of surf systems and hardtops, offering an unparalleled blend of functionality and style. These models are a true testament to our commitment to innovation and craftsmanship. At Pursuit, we introduced the Reimagined OS 325 Offshore, one of our most popular models. This redesign includes twin engines along with more ergonomic design, with a split-galley, larger cabin, and comfort controls. We will be announcing another all-new boat over 30 feet later this fiscal year. Together, these new models, along with new features and other options, further build upon our broad and innovative portfolio, grading enthusiasm across the product line for Moda Year 25.

Speaker Change: In addition, our engineers have integrated cutting-edge technology into the next generation of surf systems and hardtops, offering an unparalleled blend of functionality and style.

Bruce Beckman: Now, turning to fourth quarter results. As we discussed on our last earnings fall, the actions required to reduce dealer inventory levels would significantly impact our short-term results, and that is certainly the case. As expected, fiscal fourth quarter net sale decreased 57.4% to 158.7 million dollars, and unit volume decreased 59% to 145 boats. The decrease in net sales was driven primarily by lower production and higher promotional spending into the form of our initiatives to reduce dealer inventory levels.

Speaker Change: These models are true testament to our cut commitment to innovation and craftsmanship.

Speaker Change: That pursuit, we introduced the Reimagined OS325 offshore, where we're most popular models.

Speaker Change: This redesign includes twin engines along with more ergonomic design with a split galley larger cabin and comfort controls.

Speaker Change: We will be announcing another only boat over 30 feet later this fiscal year.

Speaker Change: Together, these new models, along with new features and other options, further build upon our broad and innovative portfolio, creating enthusiasm across the product line for all of your 25th.

Bruce Beckman: This includes the 19 boats we repurchased from Tommy's boats. The Malibu and Axis brands represented approximately 30.5% of human sales, cobalt represented 35.4%, and saltwater fishing represented the remaining 34.1%. Consolidated net sales per unit increased 4% to 151.878 dollars per unit, said, driven primarily by favorable model mix and year-over-year price increases, 24 gross profit decreased 87.8% to $12.5 million, and gross margin percentage was 7.9%. This compares to a gross margin percentage of 27.5% in the prior year period.

Steven Menneto: For a Madder Co company, we are introducing four new models: the 265 Center Console, the 265 Center Console Open, the 285 Center Console, along with the 285 Center Console Open; set the launch in October. These new models are reinvigorating the Kobia portfolio while providing the consumer with the high quality and family-friendly fishing features that Kobia is known for as we continue to build on innovation and adding exciting new features.

Speaker Change: For Matter Code Company, we are introducing four new models, the 265 center console, the 265 center console, open the 285 center console, along with the 285 center console open, set the launch in October.

Speaker Change: News New Models are re-indigrating the COVID-19 portfolio while providing the consumer with the high quality and family-friendly fishing features that COVID is known for as we continue to build on innovation and adding exciting new features.

Steven Menneto: Lastly, I would like to touch on our growth outlook for fiscal year 2025. I am truly excited about the opportunities ahead as we navigate these short-term fluctuations within the market. As Bruce mentioned, we have positioned ourselves for a strong one runway for growth ahead and remain committed to our capital allocation priorities, which are we're going to invest in high ROI internal initiatives, pursue a creative acquisitions, pay down debt and deal leverage, and return capital to shareholders. We remain committed to regularly returning cash to our shareholders while expanding our M&A pipeline. With our strong cash flow and our debt-free balance sheet, we are well prepared to pursue beneficial acquisitions when they arise.

Speaker Change: Last week, I would like to touch on our growth outlook for fiscal year 2025. I'm truly excited about the opportunities to head as we navigate these short-term fluctuations within the market.

Bruce Beckman: This expected decline in gross margin was driven by increased promotional spending across all segments, less favorable mix, and fixed cost-eleveraging from lower production during the quarter. Q4 selling and marketing expenses decreased 10.6% to $4.9 million, as a percentage of sales, year-over-year selling and marketing expenses increased 150 basis points to 3.1%. Q4 general and administrative expenses of $76.3 million decreased versus last year by $56.6% or $99.4 million. As a reminder, last year's Q4 included a $100 million legal settlement.

Speaker Change: As Bruce mentioned, we have positioned ourselves for a strong runway for growth ahead and remain committed to our capital allocation priorities.

Richard: Richard, we're going to invest in high ROI internal initiatives for a suit of creative acquisitions, date on debt and deal leverage, and return capital to shareholders.

Richard: We remain committed to regularly returning cash to our shareholders while expanding our RM&A pipeline. Well, they're strong cash flow in our debt-free balance sheet. We are well prepared to pursue beneficial acquisitions when they arise.

Steven Menneto: In closing, I'm excited about the path forward and want to express our deep gratitude to our customers, employees, dealers, partners, and shareholders for your unwavering support.

Richard: In closing, I'm excited about the path forward and want to express our deep gratitude to our customers, employees, healers, partners, and shareholders for your unwavering support.

Unknown Executive: Now we will turn it over for Q&A.

Bruce Beckman: Net loss for the quarter increased 8.6% to the loss of 19.6 million dollars, adjusted EBITDA for the quarter decreased to 104.5%, to the loss of 4.1 million and adjusted EBITDA margin decreased to negative 2.6% from positive 24.2%. Non-gap-adjusted fully-distributed med income per share decreased 113.1% to a loss of 39 cents per share. This is calculated using a normal IC court tax rate of 24.3%, and a fully-distributed weighted average share count of approximately 21 million shares.

Unknown Executive: Thank you.

Unknown Executive: As a reminder, to ask a question, you will need to press star, then one on your test-term telephone. If your question has been answered and you wish to draw your question, press star, then two. Please stand by while we complete the Q&A roster.

Speaker Change: Now we will turn over for two minutes.

Speaker Change: Thank you. As a reminder to ask a question, you will need to press star then one on your test on telephone.

Speaker Change: If your question has been answered and you wish to withdraw your question, press star then too. Please stand by what we complete the Q&A roster.

Craig Kennison: And the first question comes from Craig Kennethson with Baird. Hey, good morning. Thanks for taking my question, and good to talk to you, Steve, as well.

Speaker Change: and the first question comes from Craig Canison with Beard.

Speaker Change: [inaudible]

Steven Menneto: Steve, I'm curious, as you've had conversations with dealers in this channel, how you would compare that dynamic with what you've experienced in power sports and what you can say to investors who are concerned that, you know, inventory bubbles tend to creep up in these industries and create a really difficult investment environment. Craig, thanks for the call or the question. Over the last month, I've been able to get out to a few dealers as well as attend the Pursuit dealer meeting. And there's some similarities to both industries. And there's some other things that are not similar.

Craig Canison: Hey, good morning. Thanks for taking my question and good to talk to you Steve as well. See that I'm curious as you had conversations with.

Craig Canison: With Dealers in this channel, how you would compare that dynamic with what you've experienced in power sports and what you can say to investors who are concerned that inventory bubbles tend to

Bruce Beckman: For a reconciliation of adjusted EBITDA and adjusted fully-distributed med income per share to gap metrics, these see the tables in order in these reviews. Turning our attention to cash flow, we generated $4.5 million to positive pre-cash flow with Q4 capital expenditures for $11.9 million in quarter, of which $3.9 million was associated with the growth of county facilities, which is now complete.

Speaker Change: Yeah, I'll try to get her out

Speaker Change: Thanks for the call over for the question over the last month I've been able to get out to a few dealers as well as attend the pursuit dealer meeting.

Speaker Change: And there's some similarities to both industries and there's some other things that are not similar, of course.

Steven Menneto: Of course, the price points on the units here are a lot higher. The velocity is a little slower. So you have to really pay attention to get the inventories right. We've been focused on that, as Bruce alluded to, over the last quarter. And we'll continue to keep that in our sights as they get to continue to match the inventory to the retail, the best we can.

Bruce Beckman: Now the recap results for all of Pistol 2024. Net sales decreased 40.3% to 829.0 million dollars, and unit volumes decreased 45.4% to 5,385 units. Consolidated net sales per unit increased 9.4% to 153,952 dollars per unit, driven by favorable model mix and inflationary year-over-year price increases, partially offset by increased dealer flooring, program costs, and higher promotional spending. Gross profit decreased 58.1% to 147.1 million dollars. Net income per unit increased 152.3% to a net loss of 56.4 million dollars, and adjusted EBITDA decreased 71.0% to 82.2 million dollars for the year.

Speaker Change: The price points on the units here are a lot higher, the velocity is a little slower. So you have to really pay attention to get the inventory's right. We've been focused on that as Bruce alluded to over the last quarter.

Bruce: and we'll continue to keep adding in our sites as to get the continued to match the inventory to the retail the best we can.

Craig Kennison: Thanks, and I'm wondering with respect to 2025, the fiscal guide into offered, what's the retail assumption embedded in that, and where do you expect inventory to be at the end of fiscal 2025 relative to fiscal 2024? Thanks, Craig. In terms of the market growth, we expect that the headwinds will continue for a while longer. We're expecting mid-single digits down market by our guidance. We're also hearing from our dealers, as well as our four plan finance partners, that dealers are going to want to take the dealer inventory below historical, you know, just because of the high floor costs that they're experiencing.

Speaker Change: Thanks, and I'm wondering with respect to 2025, the fiscal guidance you offered, what's the retail assumption embedded in that and where do you expect inventory to be at the end of fiscal 2025 relative to fiscal 2020?

Speaker Change: 4.

Speaker Change: Thanks, thanks Craig. In terms of the market growth, we expect that the headwinds will continue for a while longer. We're expecting mid-single digits down market.

Speaker Change: Files are guidance.

Speaker Change: We're also hearing from our viewers as well as our four plan finance.

Bruce Beckman: For the year, non-gap-adjusted, pulling distributed net earnings per share, decreased 79.1% to $1.92 per share. For the year, our free cash flow included an approximately $55 million net cash outflow relating to last year's legal settlement. Excluding this one time net outflow, our free cash flow per year was approximately $34 million, inclusive of $76 million of cat-backs, of which approximately $47 million was invested in our new loan counting facility. We executed our capital allocation priorities by paying off our remaining debt and returning $29.8 million to shareholders through share of purchases.

Speaker Change: Parkers that the dealers are going to want to take their dealers with stories below in historical.

Steven Menneto: So we're expecting dealer inventories to contract below this for a whole bit of team. We're coming down by mid-team percent.

Speaker Change: You know, just because of the high-floor costs that they're experiencing and so we're expecting the other inventories to contract a little miss growth all the 18th.

Speaker Change: and I'm going to come down by 5 minutes each session.

Craig Kennison: Thanks, then, and then just I guess with your, how do you reconcile that with guidance, you know, anticipating sales growth? Is that a mix or a price dynamic? It sounds like you would expect units to be down. So we expect units to be, you know, flatish, I would say, and we're seeing, you know, we're expecting lower promotional spend next year. So we expect to get a little bit of that as well as from some product men. And share, you know, we're a multi-year trend of being share, and we expect to keep market share.

Speaker Change: Thanks, then, and then just, I guess...

Speaker Change: What is your, how do you reconcile that with guidance, you know, anticipating sales growth as that a mixer or price dynamic, it sounds like you would expect units to be down.

Speaker Change: [inaudible]

Speaker Change: So, we expect you to be a flat-ish, I would say, and we're seeing, you know, we're expecting more promotional spend next year. We expect you to go lift that as well as from some product. And share, you know, we were a multi-year trend of being shared in the Executive Team, our chance.

Bruce Beckman: Heading into fiscal year 2025, while we expect near-term market conditions to remain challenging, we are optimistic about the long-term growth potential of MBI. Given the progress that we have made using our channel inventory levels, we have put ourselves in a position to realize a meaningful recovery as the market returns to growth. Despite our belief that we are positioned for growth, we will continue to take a prudent approach to granting production levels and monitoring dealer inventory, giving the macro uncertainty and pressure on dealers caused by high-flowing costs.

Craig Kennison: Thanks, Bruce.

Craig Kennison: And I'm sorry to keep monopolizing this. I didn't intend to do that, but I'm maybe confused. If you're saying retail's going to be down and dealers are going to have less inventory, how do you ship more units? Well, again, this year we had a huge stocking. This year, our stocking or our wholesale shipments were part of the lower retail movement. So got it. Yeah, me. And a bit of, I'll pop in that. That makes sense.

Speaker Change: Thanks, Bruce, and I'm sorry to keep monopolizing this. I didn't intend to do that, but I'm maybe confused. If you're saying retail is going to be down, and dealers are going to have less inventory, how do you ship more units?

Speaker Change: Well, again this year we had a huge piece of this year, our stocking, our full sales shipments were far below our retail movement.

Bruce Beckman: We cannot predict exactly when the retail market will return to growth, but we remain confident in the fundamentals of our business and our ability to maintain our investment in industry-leading innovation while generating strong cash flow and almost all industry environments. With the loan counting facility completed, we expect capital expenditure levels to drop between $30 to $35 million in fiscal 2025. This will further improve cash generation, enabling us to execute on our capital allocation priorities, while continuing to return $10 million of cash to shareholders each quarter through the end of fiscal 2025.

Speaker Change: So, God, it was near me. I'll tell you what's happening now.

Bruce Beckman: Thank you, Bruce. Thank you. Thank you, Bruce.

Speaker Change: That makes sense. Thank you, Bruce.

Speaker Change: Goodbye.

Speaker Change: Thank you, and then that's rushing us on Joe Walter Bell, with Raymond James.

Speaker Change: Thanks, hey guys, morning at Deep Congrats and we'll have a board so it's one to follow on Craig's question in terms of the guidance, maybe the cadence.

Speaker Change: Obviously, he wants going to be a bit of a challenge here, but sounds like you expect to return to growth later in the year. Are you guys assuming that the demand environment doesn't prove in the spring you're assuming, or is it growth really coming from just laughing easier compared as you progress throughout the year?

Bruce Beckman: Based on our current operating plan, our expectations for fiscal year 2025 are as follows. We anticipate a year-over-year net sales to increase at a low single-digit percentage point rate. For Q1, we expect net sales to be up sequentially, but down year-over-year mid-to-high 30 percentage points given a challenging year-over-year comparison. We also expect an increase in consolidated adjusted EBITDA margin ranging from 10 to 12 percent for the fiscal year. For Q1, we expect adjusted EBITDA margins of low single-digit as we maintain low production levels with the sequential improvement coming from lower promotional spend.

Speaker Change: It's really that, really that, so we, we have our most difficult conflict you won for slash your last year, you know, production was still elevated, you won.

Speaker Change: and we have been conscious to keep our production of a role here throughout the summer.

Speaker Change: We don't want to, you know, refill a channel that we just spent all that time in that first, you know, lowering. So we have reacted to the class, to support the market, to get this ride and stuff, you know, again, to the good.

Unknown Executive: Got it. Okay, just to follow up on the acquisition strategy, obviously, you know, given where your balance sheet is, as you mentioned, you've got plenty, plenty of dry powder here. You've talked about pontoons in the past.

Speaker Change: and the world where we're being cautious here as we start with here.

Guy: Guy, okay, just to follow up on the acquisition strategy, obviously given where your balance is, as you mentioned, you've got plenty of drive powder here. You've talked about pontins in the past, is that still top of mind or other categories you might be looking into at this point.

Bruce Beckman: In summary, we overcame a volatile operating environment to generate sufficient cash to maintain our investments in our core business, pay off our debt, and return nearly $30 million to shareholders. We are positioned to capitalize when the market returns to growth.

Steven Menneto: Is that still top of mind, or are there other categories you might be looking into at this point? Yeah, we, Joe, we have previously mentioned that we would have been interested in the pontoon sector. And then we're also looking at other ones. Those that make sense to fit our portfolio. And, you know, as those arise, we'll entertain them. Understood.

Speaker Change: Yeah, we have previously mentioned that with Ben Interst in the pontoon sector and then we're also looking at other ones that make sense to fit our portfolio and you know, as those of the rise will will entertain them.

Bruce Beckman: As we begin the fiscal year, we are managing different as we prepare for sequential improvement throughout the year. We stand ready to meet the needs of our customers and have the capacity to respond quickly and effectively when the market returns grow. As we reflect on fiscal year 2024, our team's dedication and agility were key to navigating the tough market and maintaining our focus on execution.

Unknown Executive: Okay.

Unknown Executive: Thank you, guys. Thank you.

Noah Zatzkin: And the next question comes from Noah Zatzkin with KeyBank Capital Markets. Hi, thanks for taking my question. You know, we've heard, you know, a lot from dealers, you know, just concerns around affordability. So, I was just wondering if you could kind of talk through kind of some of the new products that you mentioned, rolling out from model year 25. And just any thoughts around addressing maybe some affordability concerns here. Thanks. Well, yes, you know, affordability is certainly an issue based in the industry. You know, we have addressed that over the years by being, you know, trying to be more efficient and keep our pricing, you know, lower than our competitors.

Speaker Change: Thank you, guys.

Speaker Change: Thank you, and the next question comes from Noah Zackin with Keybank Capital Martins.

Noah Zackin: I, thanks for taking my question, you know, we've heard, you know, a lot from dealers, you know, just...

Noah Zackin: Concerns around affordability, so it was just wondering if you could kind of talk through kind of some of the new products that you mentioned rolling out from model year 25 and just any thoughts around addressing maybe some affordability concerns here.

Bruce Beckman: I am very excited to see what we can do.

Bruce Beckman: I am excited to partner with our new CDL, Steven Edel, who leadership and vision will help drive us towards sustainable growth and value creation. Together, we will continue building on our competitive strength, optimize our operation and set NBI up for long term profitable growth as we enter this next chapter with confidence and excitement.

Speaker Change: Well, yes, you know, portability is certainly an issue thanks to the industry, no wee.

Speaker Change: Now, I direct that over the years by being trying to be more efficient and keep our pricing, you know, lower than our competitors and then in particular, to keep weight segment.

Steve Veneto: With that, I will turn it over to Steven. Thank you, Bruce, and good morning, everyone.

Steven Menneto: And in particular, the weak segment, you know, we are prices are generally 20 to 30 thousand dollars a unit lower than the competition. We also have been, you know, focused on and driving efficiencies in our cost structure and minimize our pricing actions for 2025. And we've taken very modest pricing on, in aggregate. And in some, in some of our product lines, we've actually, you know, held a flag or were taken down slightly.

Steve Veneto: I am very excited to step into the role of CEO at Malibu Boats and build on our growth trajectory and what is already a very strong foundation. Over the quarter, we achieved several milestones despite a challenging year impacted by retail uncertainty, which positioned us well for the future success as cycles normalize. As Bruce mentioned earlier, we made strong progress reducing dealer inventories to historical, healthy levels. We added new dealers to our successfully serve our freshwater customers while maintaining our pace of innovation and our market leading presence.

Speaker Change: You know, we've got our prices are generally 20 to 30 thousand dollars a unit lower than the competition.

Speaker Change: We also have been focused on driving efficiencies in our construction and minimize our pricing.

Speaker Change: Actions for 2025, we've taken very modest pricing on an aggregate and some of our product lines. We've actually held a bladder or taken them down slightly.

Noah Zatzkin: Got it.

Noah Zatzkin: And just so I'm clear for the model year 25, like it's kind of, you know, a load of mid single digit price increase as typical or how should we kind of think about that? I say lower than typical; you know, I say in the low single digit. Very helpful.

Speaker Change: Got it. And just so I'm clear, for the model year 25, it's kind of a low to mid-single digit price increase. As typical or, as you kind of think about that.

Steve Veneto: Malibu has a stellar reputation for innovation, quality and performance in an honor to be part of its future.

Steve Veneto: Before we jump into the new model year updates, I will share my background why joined Malibu at near-term actions of our team that our team is taking to position us for success. My way of introduction, I came to Malibu Boats after nearly three decades at Polaris. More recently, I had the privilege of leading the largest business, the off-road vehicle division, to significant revenue growth, nearly doubling its revenue to approximately $7 billion over the last five years.

Speaker Change: I say lower than technical, you know, I say it's been made in the locality of the gym.

Speaker Change: Very helpful, thank you.

Mike Albany: And then that question comes to Mike Albany with fence of entry company. Great. Thank you for taking my question, Steve.

Steve Veneto: This included planning, developing and building a global manufacturing footprint that supplies hundreds of thousands of vehicles worldwide. My journey also includes spearheaded the commercialization efforts on the on-road division, driving the launch and expansion of the Indian motorcycle business. Throughout my career, I have learned the importance of innovation, customer focus and operational excellence, values that are deeply ingrained within the Malibu Boats culture today. My history of advancing high-impact opportunities mesh as well with the values of Malibu Boats and together on competent we can drive aggressive growth in this fast-paced dynamic consumer-facing industry.

Speaker Change: Thank you, and in this question comes to my galvanous event of Antwerp Company.

Steven Menneto: Welcome and congratulations. You know, most of my questions answered at this point, but just a quick one as it relates to Tommy's. You think you said you completed and want to confirm your repurchase of 19 units, which was far fewer than previous estimate. And can you just kind of refresh our memory here on what the original estimates were? Yes, so we issued an 8-K back few months back in the dollar amount of the repurchase would be $5.2 million. And the repurchase that we asked you, I think, was around $2.5 million, so a little less than half, both in terms of dollar amounts and units of what we were expecting at least in addition.

Speaker Change: Thank you for taking my questions, Steve, welcome and congratulations.

Speaker Change: You know, most of my questions answered at this point, but just a quick one is it relates to Tommy's, you know, I think you said you completed and I want to confirm your repurchase of 19 units, which was far fewer than previous estimates, and can you just kind of refresh our memory here on what the original estimates were.

Speaker Change: Yes, so we issued an 18-8 facts, you must have seen the dollar amounts of the purchase would be $5.2 million.

Speaker Change: and the three purposes that we asked you to keep us around 2.5 million dollars so we'll let them have.

Speaker Change: Wolf in terms of dollar models and units of what we were expecting at least initially. And I think they have moved through more units that we have anticipated that that's encouraging for us to answer.

Mike Albany: Lee, and I think they have moved through more units than we have participated in that, that's encouraging for us actually. Got it. Awesome.

Unknown Executive: Thank you.

Steve Veneto: Now that I've been here for about a month, I'm incredibly impressed by the company's talent and resources. As we step into the new fiscal year, my immediate folks will be on leveraging the company's competitive strengths, particularly our leading market positions and robust dealer network. Our near-term strategy will be firmly rooted in our customer-centric approach, a value that I hold in high regard. We will maintain a key eye on the retail market, adapt swiftly to the challenging market conditions and ensure our dealer partners have healthy inventory levels. Lastly, we will do all this while maintaining our industry-leading product design and innovation across our premium brands.

Unknown Executive: And that's it for me, guys. Thank you.

Speaker Change: God it all, and thank you and that lasted for me, guys.

Fred Wightman: And the next question comes from Fred Wightman with Wolf Research. Hey, guys. Just to come back to the dealer inventory, I think last quarter you said you felt like they were four weeks too high. I'm wondering if you could just give us an update on maybe where that stands versus target. Yeah. So we said they were reported five weeks high, you know, coming into the quarter, and we admitted the quarter and combined with historical trends. We made up a lot of ground in the fourth quarter.

Fred Whiteman: Thank you, and the Announce Question Council on Fred Whiteman with Wolf Research.

Fred Whiteman: Hey guys, just to come back to the dealer inventory, I think last quarter you said you felt like they were four weeks too high and wondering if you could just give us an update on maybe where that stands versus target.

Speaker Change: Yeah, so we said there were 45 weeks high coming into the quarter and we acted at the quarter in mind with historical.

Speaker Change: Trance, we made up a lot of rounds.

Steven Menneto: What we said earlier, I'm not sure if you caught it, but you know, we do expect that dealers will continue to be looking to take their inventory as low as historical in 25. So we're expecting them, you know, to take their dealer inventory down roughly 15, you know, kind of mid-teamage percent. And that implied in that guy. Perfect.

Speaker Change: and in the fourth quarter, what we said earlier, I'm not sure if you caught it, but we do expect that dealers will continue to be looking to take their inventory as well as store going in 25. So we're expecting them.

Steve Veneto: Looking ahead to Model Year 25, we are excited to continue our strong commitment to new products and innovation across all brands. We completed our completed tooling development center at Pursuit is now producing tooling for each of our MBI brands, furthering our vertically integrated efforts and speed to market. This year we will introduce more new models across all brands than ever before. We will continue to outpace the competition on investing in new products and innovation as we continue to push the limits to drive consumer demand and market share growth as the market revows.

Speaker Change: You know, to take their estuary down, you know, we're up to 16, you know, kind of a 15-inch percent, and that's, you know, five in my gut.

Fred Wightman: Thanks. And then just on the four key results, the sales were sort of in line with implied guide, but it looks like EBITDA was maybe a little bit white on the margin side.

Speaker Change: Perfect thanks and then just on the four key results, the sales were sort of in line with implied guide but it looks like EBITDA was maybe a little bit why on the margin side was the Delta just more promo than your sort of fact again or expect it or was it something else.

Steven Menneto: Was the delta just more promo than you sort of factored in or expected, or was it something else? No, that's what it was.

Fred Wightman: And, you know, yes, we were below our guidance range, but only slightly. Was, you know, and our revenue came right in the middle of the range. Fair enough.

Steve Veneto: This is a true differentiator for us and solidifies our place in the market as the premier manufacturer of premium powerboats, delivering on our customer's unwaiving desire for large feature rich options across our portfolio. For Malibu, we are once again introducing four new models far more than any other competitor. This includes the all new 25 LSB, the best selling 25-foot tow boat on the market. Next, we are making a return to the 22 foot pickle fork segment with the all new 22 MXC.

Speaker Change: Now, if that's what it was. And, you know, yes, we were below our guidance range, but only slightly it was, you know.

Brown: Brown, and our revenue came right in the middle of the range.

Fred Wightman: And then I guess just strategically, if we do start to see rate cuts, I know you guys mentioned that you're expecting the market challenge is to persist near-term. But how quickly do you think that consumers would start to respond to potential rate cuts? Is it immediately? Is it going to take a couple of cuts in a couple of quarters? How quickly do you think that'll show up on the consumer side?

Speaker Change: Fair enough, and then I guess just strategically, if we do start to see rate cuts, I know you guys mentioned that you're expecting the market challenges to persist near term, but how quickly do you think that?

Speaker Change: Consumers would start to respond to potential rate cuts. Is it immediately? Is it going to take a couple of cuts in a couple quarters? How quickly do you think that will show up on the consumer side?

Steven Menneto: Brad, we're going to ask you that. Seriously, we, you know, we know it's going to be a positive and long term, you know, the side gradient question point is going to be a challenge. And, you know, we're sitting here back in January talking with excitement about any rate cuts; in here we are. So, you know, we're hopeful; we think there will be beneficial. You know, if it's the exact reflection point, it's pretty hard to call. You probably know better than we do.

Speaker Change: We're going to ask you that, but seriously, we know it's going to be a positive, long term, you know.

Steve Veneto: We have not produced a boat in this segment since 2020 and look forward to reintroducing this experience for customers in this category. Next is the all new 24 MXC, the largest boat in the MXC series. We will also be introducing another ultra premium Malibu model in the second fiscal quarter. Last but definitely not least is the all new Malibu command center, a testament to the industry leading innovation that our customers come to expect across our Malibu line.

Speaker Change: The Cypher Indian Flush point is going to be a challenge.

Speaker Change: and you know we're sitting here back to January talking with excitement about any great cuts.

Jerry R.: and Jerry R. So, you know, we're all full, we think there will be beneficial, you know, if they've backed the question point, it's pretty hard to call, you probably don't better than we do.

Fred Wightman: Fair enough.

Unknown Executive: Thanks a lot, guys.

Jaime Katz: Thank you. The next question comes to Jamie Cads with Morningstar. Hey, good morning. Thanks for taking my question. I guess my first question is on this normalized industry environment slide. And while we have some time together, I think historically it's been such that even in a difficult environment, the EBITDA margins that would be generated are probably higher than what we're seeing in fiscal 2025. So, you know, I guess what kind of macro fundamentals and maybe top line fundamentals, do we need to get back to that sort of mid-teen upper EBITDA margin?

Steve Veneto: Malibu has again raised the bar for the next level driver experience, with the combination of our 15.8-inch and our 8-inch touchscreen and a new advanced operating system, is by far the most intuitive system on the market. Enabling a unique and premium sleek look and feel when you are in the cockpit. Starting to coal, we will be launching four new models later this model year, each designed to offer non-carload on water experience.

Speaker Change: Fair enough, thanks a lot, guys.

Speaker Change: Thank you, and the next question comes to Damie Kat with Morningstar.

Damie Kat: Hey, good morning. Thanks for taking my question. I guess my first question is on this normalized industry environment slide, and while we have some time to get there, it's been historically it's been such that even in a difficult environment, the EBITDA margins that would be generated are probably higher than...

Damie Kat: What we're seeing in...

Steve Veneto: We are also excited about the upcoming debut of our latest twin engine models, which are set to redefine what boaters expect from cobalt. These exciting new launches will have features such as full cockpit, enclosures and standard side entry, enhanced increasing comfort and on board accessibility. In addition, our engineers have integrated cutting-edge technology into the next generation of surf systems and hardtops, offering an unparalleled blend of functionality and style. These models are true testament to our commitment to innovation and craftsmanship. At Pursuit, we introduced the Reimagined OS 325 Offshore, one of our most popular models. This redesign includes twin engines along with more ergonomic design, with a split galley, larger cabin and comfort controls.

Speaker Change: Fiscal 20-25, so I guess what kind of macro fundamentals and maybe top-line fundamentals do we need to get back to that sort of mid-team EBITDA margin? And if you can walk us back how you get there, that would be really helpful.

Bruce Beckman: And if you can walk us back, how you get there, that would be really helpful. Yes, a fair question, Jaime. You know, in the past, when we talked about that, you know, 15% even though it's been off of a down 25 to down 30 revenue picture off of the 20, you know, fiscal year 23 base. So it gets you roughly in that billion dollar revenue range. And so the difference between our guys, the midpoint of our guidance and that, and that dollar amount is for revenue amount is roughly 150,000,000. So the leverage between that point and our guys is really out of what is going to difference.

Jamie: Yeah, it's a fair question, Jamie. You know, in the past, when we talked about that, you know, 15% e-lithotic, it's been off-road.

Speaker Change: A down 25, the down 30 revenue, picture off of 20, you know, this will year 23 base. So it gets you roughly in that billion dollar revenue range.

Speaker Change: and so there's a difference between our guys and this point of our guidance.

Speaker Change: and that dollar model that is a revenue model is roughly $150,000, so that the leverage between that point and our guidance is really what it's like to difference.

Steve Veneto: We will be announcing another all-new boat over 30 feet later this fiscal year. Together, these new models, along with new features and other options, further build upon our broad and innovative portfolio, grading enthusiasm across the product line for Moda Year 25.

Jaime Katz: Okay, and then as we think about consumer behavior, has there been any different trend on cash versus finance purchases or anything like that that you guys have been seeing? We haven't seen a change in that, no, and we're not surprised that we haven't given that rate yet to move. But we expect that to rebalance, you know, once the rate has come down, and not bring those credit buyers back to the point.

Speaker Change: Okay, and then as we think about consumer behavior, has there been any difference?

Speaker Change: Trend on cash versus finance purchases or anything like that that you guys have been seeing.

Steve Veneto: For a matter of co-company, we are introducing four new models, the 265 Center Console, the 265 Center Console Open, the 285 Center Console, along with the 285 Center Console Open, set the launch in October. These new models are reinvigorating the Kobia portfolio while providing the consumer with the high quality and family-friendly fishing features that Kobia is known for as we continue to build on innovation and adding exciting new features.

Speaker Change: We haven't seen a change in that, no, and that we're not surprised that we haven't given that reason yet to move, but we expect that to rebound, you know, once.

Jaime Katz: And then lastly, I guess it would be interesting to hear, since the rhetoric out of the fact that rate cuts are coming, has there been sort of an incremental pause as consumers wait for those to come in the last maybe month or two relative to what we saw before? I don't think so. I mean, I think our retail activity is, you know, we've been fairly pleased with it here through the summer, so I don't see a whole back from that. Thanks.

Speaker Change: The Reads come down and not bring those critter fires back into the park.

Speaker Change #100: And then lastly, I guess it would be interesting to hear since the rhetoric out of the Fed is that rate cuts are coming, has there been sort of an incremental pause as consumers' wake for those to come in the last maybe month or two relative to what we saw before.

Steve Veneto: Lastly, I would like to touch on our growth outlook for fiscal year 2025. I am truly excited about the opportunities ahead as we navigate these short-term fluctuations within the market. As Bruce mentioned, we have positioned ourselves for a strong one runway for growth ahead and remain committed to our capital allocation priorities, which are we're going to invest in high ROI internal initiatives, pursue a creative acquisitions, pay down debt and deal leverage, and return capital to shareholders. We remain committed to regularly returning cash to our shareholders while expanding our M&A pipeline. With our strong cash flow and our debt free balance sheet, we are well prepared to pursue beneficial acquisitions when they arise.

Steve Veneto: In closing, I'm excited about the path forward and want to express our deep gratitude to our customers, employees, dealers, partners, and shareholders for your unwavering support.

Speaker Change #101: I don't think so. I mean, I think our retail activity is, you know, we've been fairly pleased with it here through the summer, so I don't see a whole back.

Speaker Change #102: Well, from that.

Unknown Executive: Thank you.

Speaker Change #102: Thanks.

Unknown Executive: I'm not showing you further questions this time.

Unknown Executive: This concludes today's conference call. Thank you for participating, and you may now disconnect.

Unknown Executive: Now we will turn it over for Q&A. Thank you. As a reminder, to ask a question, you will need to press star than one on your test on telephone. If your question has been answered and you wish to draw your question, press star than two. Please stand by while we complete the Q&A roster.

Craig Kennison: And the first question comes from Craig Kennethson with Baird. Hey, good morning. Thanks for taking my question and good to talk to you Steve as well. Steve, I'm curious, as you've had conversations with dealers in this channel, how you would compare that dynamic with what you've experienced in power sports and what you can say to investors who are concerned that inventory bubbles tend to creep up in these industries and create a really difficult investment environment.

Craig Kennison: Craig, thanks for the call over the question. Over the last month, I've been able to get out to a few dealers as well as attend the pursuit dealer meeting. And there's some similarities to both industries and there's some other things that are not similar. Of course, the price points on the units here are a lot higher. The velocity is a little slower. So you have to really pay attention to get the inventory is right. We've been focused on that as Bruce alluded to over the last quarter. And we'll continue to keep that in our sites as to get continue to match the inventory to the retail the best we can.

Craig Kennison: Thanks, and I'm wondering with respect to 2025, the fiscal guidance you offered, what's the retail assumption embedded in that, and where do you expect inventory to be at the end of fiscal 2025, relative to fiscal 2024? Thanks, Craig. In terms of the market growth, we expect that the headwinds will continue for a while longer. We're expecting mid-single digits down market by our guidance. We're also, you know, hearing from our dealers as well as our four plan finance partners that dealers are going to want to take the dealer inventory below the historical, you know, just because of the high floor costs that they're experiencing, and the work's expecting dealer inventories to contract below this for all to be the team, that's the sense for a compound by mid-team percent.

Craig Kennison: Thanks then, and then just I guess with here, how do you reconcile that with guidance, you know, anticipating sales growth, is that a mix or a price dynamic, it sounds like you would expect units to be down. So we expect units to be, you know, flatish, I would say, and we're seeing, you know, we're expecting lower promotional spend next year, so we expect to get a little bit of that as well as from some product business, and share, you know, we're a multi-year trend of being share, and we expect key market trends too.

Craig Kennison: Thanks Bruce, and I'm sorry to keep monopolizing this, I didn't intend to do that, but I'm maybe confused, if you're saying retail's going to be down, and dealers are going to have less inventory, how do you ship more units? Well again, this year we had a huge destocking, this year our stocking, or our wholesale shipments were part of the lower retail movement, so got it, yeah, a bit of copying that. That makes sense, thank you Bruce.

Joe Walter-Vellor: Thank you, and then next question, Mr. Joe Walter-Vellor with Raymond James. Thanks, hey guys, good morning, and Steve congrats on wealth of work. So it's wonderful up on Craig's question, in terms of the guidance, maybe the cadence, obviously Q1 is going to be a bit of a challenge here, but sounds like you expect to return to growth later in the year. Are you guys assuming that the demand environment does improve in the spring, you're assuming is the growth really coming from just lapping easier compared to the rest of the year?

Joe Walter-Vellor: It's really that, really that, Joe. We have our most difficult comp in Q1 for last year, last year, production was still elevated in Q1, and we've been conscious to keep our production level low here throughout the summer. We don't want to rebuild a channel that we just spent all that time and effort in the lower end. So we have the reactive capacity to support the market, if it's price itself, you know, to the good, and to where we're being cautious here. , that makes sense to fit our portfolio. And, you know, as those arise, we'll entertain them.

Unknown Executive: Understood. Okay.

Noah Zatzkin: Thank you guys. Thank you.

Noah Zatzkin: And the next question comes from Noah Zatzkin with Keybank Capital Markets. Hi. Thanks for taking my question. You know, we've heard, you know, a lot from dealers, you know, just concerns around affordability. So it was just wondering if you could kind of talk through kind of some of the new products that you mentioned rolling out from Model Year 25, and just any thoughts around addressing maybe some affordability concerns here. Thanks. Well, yes.

Noah Zatzkin: You know, affordability is certainly an issue based in the industry. You know, we have addressed that over the years by being, you know, trying to be more efficient and keep our pricing, you know, lower than our competitors. And in particular, the Seawakes segment, you know, we, our prices are generally $20,000 to $30,000 a unit lower than the competition. We also have been, you know, focused on and driving efficiencies in our cost structure and minimize our pricing actions for 2025.

Noah Zatzkin: And we've taken very modest pricing in aggregate and in some of our product lines, we've actually held a platter or taken them down slightly. Got it. And just so I'm clear for the Model Year 25, like, it's kind of, you know, a low to mid single digit price increase as typical or how should we kind of think about that? I say lower than typical, you know, I say in the low single digit. Very helpful. Thank you.

Mike Albany: And the next question comes to Mike Albany with Fence Adventure Company. Great. Thank you for taking my question.

Mike Albany: Steve, welcome and congratulations. You know, most of my questions answered at this point, but just a quick one is it relates to Tommy's, you know, I think you said he completed and I want to confirm your repurchase of 19 units, which was far fewer than previous estimate. And can you just kind of refresh our memory here on what the original estimates were? Yes, though, we issued an 8K back few months back in the dollar amount of the repurchase would be $5.2 million.

Mike Albany: And the repurchase that we executed, I think, was around $2.5 million, so a little less than half, both in terms of dollar amount and units of what we were expecting at least in this year, and I think, you know, they have moved through more units, you know, that we have participated in that, that's encouraging for us actually. Yeah, so we said they were fortified weeks high, you know, coming into the quarter and we admitted the quarter and combined with historical trends.

Mike Albany: We made up a lot of ground in the fourth quarter. What was said earlier, I'm not sure if you caught it, but, you know, we do expect that dealers will continue to be looking to take their inventory slow. If historical in 25, so we're expecting them, you know, to take their inventory down, you know, roughly 15, you know, kind of a teenage percent. And that's implied in our guys. Perfect. Thanks. And then just on the four key results, the sales were sort of in line with implied guide, but it looks like EBITDA was maybe a little bit white on the margin side was the delta just more promo than your sort of fact again.

Mike Albany: Or expected or something else. No, that that's what it was. And, you know, yes, we were below our guidance range, but only slightly was, you know, and our revenue came right. It's right in the middle of the range. Fair enough. And then I guess just strategically, if we do start to see rate cuts, I know you guys mentioned that you're expecting the market challenge is to persist near term. But how quickly do you think that consumers would start to respond to potential rate cuts? Is it immediately? Is it going to take a couple of cuts in a couple quarters? How quickly do you think that'll show up on the consumer side?

Mike Albany: Brad, we're going to ask you that. Seriously, we, you know, we know it's going to be a positive, a long term, you know. So, the side gradient question point is going to be a challenge. And, you know, we're sitting here back in January talking with excitement about any rate cuts in here we are. So, you know, we're hopeful we think they will be beneficial, you know, if it's the exact reflection point, pretty hard to call. You probably know better than we do. Fair enough. Thanks a lot, guys.

Jamie Katz: Thank you.

Jamie Katz: The next question comes to Jamie Cads with Morningstar. Hey, good morning. Thanks for taking my question. I guess my first question is on this normalized industry environment slide. And while we have some time to get there, I think historically it's been such that even in a difficult environment, the EBITDA margins that would be generated are probably higher than what we're seeing in fiscal 2025. So, you know, I guess what kind of macro fundamentals and maybe top line fundamentals do we need to get back to that sort of mid-teen upper EBITDA margin.

Jamie Katz: And if you can walk us back how you get there, that would be really helpful. Yes, a fair question, Jaime. You know, in the past, when we talked about that, you know, 15% even though it's been off of a down 25 to down 30 revenue picture off of the 20, you know, fiscal year 23 base. So it gets you roughly in that billion dollar revenue range. And so the difference between our guys, the midpoint of our guidance and that, and that dollar amount, is for revenue amount is roughly 150 million pounds.

Jamie Katz: So the leverage between that point and our guidance is really out of what is going to be the difference. Okay, and then as we think about consumer behavior, has there been any different trend on cash versus finance purchases or anything like that that you guys have been seeing? We haven't seen a change in that, no. And we're not surprised that we haven't given that rate yet to move. But we expect that to rebalance, you know, once the rate has come down and not bring those credit buyers back to the point.

Jamie Katz: And then lastly, I guess it would be interesting to hear since the rhetoric out of the fact that rate cuts are coming, has there been sort of an incremental pause as consumers wait for those to come in the last maybe month or two relative to what we saw before? I don't think so. I mean, I think our retail activity is, you know, we've been fairly pleased with it here through the summer, so I don't see a whole back from that. Thanks. Thank you. I'm not showing you further questions this time.

Unknown Executive: This concludes today's conference call.

Unknown Executive: Thank you for participating and you may now disconnect.