Good morning and welcome to Malibu Boats' conference call to discuss second quarter 2026 results. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, and instructions will follow at that time. Please be advised that reproduction of this call, in whole or in part, is not permitted without written authorization of Malibu Boats. As a reminder, today's call is being recorded. On the call today for management are Mr. Steve Menneto, Chief Executive Officer, and Mr. David Black, Chief Financial Officer. I will now turn the call over to Mr. Black to get it started. Please go ahead, sir. Thank you, and good morning, everyone. Joining me on today's call is our CEO, Steve Menneto. On the call, Steve will provide commentary on the business, and I will discuss our second quarter of fiscal year 2026 financials. We will then open up the call for questions. A press release covering the company's fiscal second quarter 2026 results was issued today, and a copy of that press release can be found in the investor relations section of the company's website. I also want to remind everyone that management's remarks on this call may contain certain forward-looking statements, including predictions, expectations, estimates, 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. Factors that might affect future results are discussed in our filings with the SEC, and we encourage you to review our SEC filings for a more detailed description of each of these risk factors. Please also note that we will be referring to certain non-GAAP financial measures on today's call, such as adjusted EBITDA, adjusted EBITDA margin, adjusted net loss/ income per share. Reconciliations of these GAAP financial measures to non-GAAP financial measures are included in our earnings release. Finally, during today's prepared remarks, comparisons are to Q2 of fiscal 2025 unless otherwise noted. I will now turn the call over to Steve. Thank you, David, and good morning, everyone. Before I get into the business update, I want to take a moment to formally introduce David Black as our Chief Financial Officer on his first earnings call in that role. As many of you know, David was appointed CFO in November of last year after serving in several key financial leadership roles with Malibu Boats. David has already played an instrumental part in our financial organization and strategic planning, and he's been deeply involved in shaping the financial priorities that support our long-term growth and disciplined capital allocation approach. I'm confident you'll appreciate his insights as he walks through the quarter and our outlook shortly. I'm pleased to have him alongside us as we continue to execute our strategy and drive shareholder value. Now, turning to the quarter, we are pleased to report solid second quarter results as we enter the early boat show season. Net sales of $188.6 million came in ahead of our expectations despite what remains a continued challenging retail environment, and Adjusted EBITDA margin was in line with our plan. While the retail environment is tracking as expected through the first two quarters of the year, our Malibu year-end sales event was successful and outperformed the prior year, serving as an effective tool to drive December retail activity. The promotional environment remains competitive, but during both the sales event and the early boat shows, we were encouraged by the strong customer response for our new model year boats and the continued momentum across our brands. Looking ahead, we're excited to debut two additional model introductions at the Miami International Boat Show next week, where we will unveil the new Pursuit 286 and the Pathfinder 2800. We look forward to connecting with many of you there and showcasing our differentiated, state-of-the-art products. Underscoring that differentiation, the Malibu 23 LSV is once again recognized by WakeWorld's Riders' Choice Award as Surfboat of the Year, marking the sixth consecutive year we have received this honor. This recognition reflects our long track record of delivering performance, quality, and innovation, and reinforces our leadership position in the towboat segment. Customer-driven innovation remains central to our strategy and deeply embedded in how we operate. Regardless of the market environment, we continue to invest in our people, our partnerships, and our capabilities to push the pace of innovation and to elevate the entire ownership experience. Guided by our Build, Innovate, and Grow framework, we are focused on putting the boater at the center of everything we do, from performance, safety, and personalization on the water to technology, connectivity, and support throughout the ownership lifecycle. While much of this work happens behind the scenes, we are laying the foundation for future product introductions and expanded partnerships that we believe will further differentiate our brands, strengthen our dealer network, and position us to capture share and drive long-term value as the market normalizes. Turning to our dealers, we continue to work in close partnership with them as we navigate the current market environment, guided by our established playbook of prioritizing dealer health and tightly managing channel inventories. We are encouraged by the healthy and current inventory position of our model year 2026 boats, which are presenting well across our dealer network. While the broader industry continues to work through a modest overhang on non-current inventory, this disciplined approach allows us to introduce new products with confidence, support our dealers in meeting retail demand, and position ourselves to capture share as the market stabilizes. In addition, our dealers continue to be encouraged by the early traction we are seeing with MBI Acceptance as we work closely with our financing partners to thoughtfully roll out this tool across our network. The program provides a competitive retail financing option, including rates as low as 3.99%, and gives dealers another effective way to engage customers in closed sales. What began as a pilot within our Malibu and Axis brands is gaining momentum as we expand the program across our broader portfolio. We are also continuing to build OEM-to-OEM relationships through our newly announced marine components business, which represents a natural extension of our vertically integrated business model. Our initial focus has been on putting the right business systems and processes in place, and as the foundation comes together, we are beginning to see early traction with our Soft Grip flooring and trailer offerings, including engagement with two new customers, which provides an early proof point of adoption. While these initiatives remain in the early stages, we are focused on applying these learnings to further strengthen our capabilities, refine our approach, and thoughtfully expand this platform over time. We will provide updates as these efforts progress. Finally, I want to touch on our operational excellence and continuous improvement initiatives, which remain a hallmark of our organization regardless of the market environment. We continue to leverage the MBI advantage to drive quality, efficiency, and consistency across the business. During the quarter, we made further progress on our centralized sourcing initiatives, where we are seeing benefits across our brands as we leverage our scale to improve supply chain management, lower direct costs, and enhance quality controls. These efforts ultimately support a better customer experience and position us well to mitigate potential tariff impacts as we look to minimize price increases passed on to the consumer. Looking ahead, our expectations for the broader marine industry remain unchanged. We will continue to monitor signals for broader market recovery and manage the business guided by our priorities: protecting dealer health, maintaining operational discipline, and driving innovation. With that, I'll turn the call over to David for a detailed review of our financial results. Thanks, Steve. Our results in the second quarter were slightly above our expectations. Net sales decreased 5.8% to $188.6 million, and unit volume decreased 9.5% to 1,106 units. The decrease in net sales was driven primarily by decreased unit volumes across all segments, resulting primarily from lower wholesale shipments, and driven by unfavorable segment mix and unfavorable model mix in our Malibu segment, partially offset by a favorable model mix in our Cobalt and saltwater fishing segments and inflation-driven year-over-year price increases. From a mixed perspective, Malibu and Axis represented approximately 46.4% of unit sales, saltwater fishing represented 25.5%, and Cobalt made up the remaining 28.1%. Consolidated net sales per unit increased 4.1% to $170,544 per unit. The increase in overall consolidated net sales per unit was driven primarily by a favorable model mix in our Cobalt and saltwater fishing segments and inflation-driven year-over-year price increases, partially offset by an unfavorable model mix in our Malibu segment and an unfavorable segment mix overall. We expect segment mix to remain unfavorable, pressuring ASPs throughout the fiscal year. This is primarily driven by a challenging year-over-year comparison influenced by timing of production cuts across segments and the ongoing seasonal segment mix shift. Turning to profitability, gross profit decreased 32.9% to $25.1 million, and gross margin as a percentage of sales was 13.3%. This represents a decrease of 540 basis points compared to the prior year period. The decrease in gross margin was driven primarily by fixed cost deleverage across all segments due to lower sales and higher per unit labor and material costs across all segments. Selling and marketing expenses increased 1.4% year-over-year, driven primarily by higher personnel-related expenses. As a percentage of sales, selling and marketing expenses increased 20 basis points to 3.2%. General and administrative expenses decreased 21.5% or $5.7 million. The decrease was driven primarily by a decrease in legal fees, incentive pay, and stock-based compensation expense. As a percentage of sales, G&A expenses were 11%, which represents a 230 basis point decline versus the prior year. GAAP net loss for the quarter was $2.5 million compared to GAAP net income of $2.4 million in the prior year. Adjusted EBITDA for the quarter decreased 52.5% to $8 million, and adjusted EBITDA margin decreased to 4.3% from 8.4% in the prior year. Non-GAAP adjusted net loss per share was $0.02 compared to adjusted net income of $0.32 per share in the prior year. This is calculated using a normalized C Corp tax rate of 24.5% and a basic weighted average share count of approximately 19.1 million shares. For a reconciliation of GAAP metrics to adjusted EBITDA and adjusted net loss/income per share, please see the tables in our earnings release. Turning our attention to cash flow, we generated $8.4 million of free cash flow during Q2, inclusive of $4.4 million of capital expenditures. During the quarter, we expanded our share repurchase program to $70 million, reflecting our board's confidence in our long-term strategy, strong financial position, and commitment to disciplined capital allocation. Consistent with that approach, we completed $20.8 million of share repurchases, representing 751,000 shares repurchased during the quarter, taking advantage of what we viewed as an attractive market conditions. We believe this was prudent use of capital alongside our ongoing investments in the business. Looking ahead, we will continue to be thoughtful and opportunistic in our capital deployment, balancing investments for growth with actions that prioritize shareholder value. Turning to our outlook for the full fiscal year, our markets are performing as expected, and our view has not changed. We continue to anchor our outlook with the expectation that our markets will decline in the range of mid to high single digits for our fiscal year. With that said, for the full fiscal year, we expect sales to be flat to down mid-single digits year-over-year. For Q3, we expect net sales to be in the range of $198 million-$202 million. We anticipate consolidated Adjusted EBITDA margin for the full fiscal year to be in the range of 8%-9%. As we mentioned last quarter, this guidance incorporates a modest direct impact to our fiscal 2026 cost structure due to tariffs, which we continue to estimate between 1.5% and 3% of cost of sales, assuming the current tariff rates. For Q3, we expect Adjusted EBITDA margins of approximately 8.5%. To close, we have delivered year-to-date results consistent with our expectations. Retail trends are tracking with our outlook for the year, and with dealer inventories in a healthy position, we are well positioned to execute through the back half of the fiscal year. We are closely monitoring market conditions, and if demand improves, we have the capacity and operational flexibility to scale production in line with retail. In the meantime, our business model remains resilient, and we continue to generate positive Free Cash Flow despite a softer market. Our focus remains on disciplined execution, operational excellence, and the prudent deployment of capital to drive long-term value for our shareholders. With that, I'd like to open the call up for questions. As a reminder, to ask a question, you will need to press star one on your touchtone telephone. If your question has been answered or you wish to withdraw your question, please press the star two keys. Please stand by while we compile the Q&A roster. The first question comes from Joe Altobello with Raymond James. Please go ahead. Hey, good morning. This is Martin on for Joe. I was wondering if you can quantify how much the higher boat show expenses weighed on EBITDA margin, whether that's year-over-year or quarter-over-quarter. Yeah. When we think about the year-over-year promo related to year-end sales events and kind of the normal cadence for Q2, it's about 50 bips of cost pressure that we saw for the quarter. Right. I think that's really helpful. You kind of mentioned a little bit about inventories. It sounds like the industry has a little bit of an overhang, but you're a little bit better off. Can we get an idea about the delta between your inventories and kind of what's going on in the industry? Yeah. I think the industry as a whole is in a healthy position. There are pockets, as usual, of kind of elevated weeks on hand. But from our perspective, we've done the appropriate thing to address those, and we feel good about kind of where our weeks on hand are from a historical perspective. Great. Thank you. And best of luck. Thanks. The next question comes from Mike Albanese with Benchmark. Please go ahead. Yeah. Thank you. Good morning, guys. Hey, Mike. Just was wondering if you could maybe elaborate. I know it's early, but I believe you wanted to get the MBI Acceptance program rolled out for the boat shows. Could you just talk about any incremental lift you're getting there or whether you're seeing that translate to improved conversion, or is it just too early to tell? It's early. No question. It's early. We just got out in our other brands. But we did see a couple of the boat shows a higher take rate on our 3.99, so it's encouraging. So not enough to make a trend and start reporting trends and so forth, but early feedback from our dealers was very positive from driving traffic to the booths at the boat shows as well as it did help close handfuls. Awesome. Thank you. And then if I could just kind of ask the same question regarding your initiatives on the centralized sourcing, if you could just kind of elaborate on maybe any cost savings you're getting out of that thus far? Yeah. No. If you look at our guide and what that implies from a margin growth on the back portion of the year, the way we're thinking about that, a big portion of that is going to come from the centralized sourcing efforts that we've undertaken, as you indicated. We're starting to see that hit the P&L, and we expect that to continue on the back portion of the year. We think there's a meaningful benefit to be seen as we move through the remainder of this fiscal year and then beyond. Awesome. Thank you, guys. The next question comes from Kevin Condon with Baird. Please go ahead. Hi. Good morning. Thanks for taking my question as well. I wanted to ask if you've seen any shift or sense any change in dealer sentiment amongst your dealer group just as we get a few boat shows in 2026, and just any shift in terms of attitude towards taking on inventory ahead of the season? The feedback from the dealers has been like we've been saying all along. Mixed retail. There have been shows that have been positive, other shows that have been a little weaker. But overall, it's been a positive trend. It has resulted in additional orders, of course, because we do sell some custom boats and so on. So again, we're happy about where the boat shows are going. It's meeting our expectations, and we have a lot more in front of us, so more to come as we get through the early part of the season here and, of course, Miami next week. So we're encouraged, and that's why, like we talked about in our prepared remarks, is we have our guidance unchanged. And then apologies if this was a metric you gave last quarter or not, but in terms of the guide, is there a thought about keeping inventory flat or taking boats out of the channel just as you look end of fiscal year to end of fiscal year? Yeah. No. I think just given the fact that we expect the market to decline, you would expect there to be some level of destocking. That being said, as we move through the back portion of the year, we expect that to stabilize. And to the extent that the market continues on that trend from a positivity perspective, then we have the chance to begin matching retail with wholesale. But we do imply some level of destocking for this fiscal year. Thanks. The next question comes from Brandon Rollé with Loop Capital. Please go ahead. Good morning. Thank you for taking my question. Just on the higher labor costs, could you talk about your outlook for labor costs moving forward and if you see if there's any material relief as well on that side? Thank you. Yeah. I think we're always focused on operational effectiveness and excellence. So we expect, as we move through the remainder of the year, not only from a labor per unit cost but from the centralized sourcing efforts that we talked about, we'll start seeing those benefits flow through into margin into those quarters. Okay. Great. And just on the competitive landscape, just in terms of the ski and wake category as a whole, are you seeing any bounce back for the category versus the broader industry? And is there anything that you feel like you could do as an OEM to get people reinvigorated in the category? Thank you. We're still seeing more of the same. As far as what we can. There There is a lot of effort amongst what we're actually doing at Malibu and Axis, and then also our competitive groups that are on the ski/wake segment. We're all trying to continue to put growth in the segment or get back to growth in the segment. We'll continue those efforts on our own end as we work together in some of our marine groups that we team up to do and execute those efforts. Great. Thank you. The next question comes from Jaime Katz with Morningstar. Please go ahead. Hi. Good morning. I guess when I look at the third-quarter EBITDA margin guidance of 8.5%, it looks like it implies the fourth quarter is going to have some pretty significant EBITDA margin expansion. And I understand that there are these sourcing benefits that you're getting and gains from MBI maybe that go into that. But what gives you guys, I guess, confidence that you can extract that much operating leverage out of the business when the industry is still sort of flattish? Yeah, Jamie. Hey, this is David. So I think I break it into three different buckets from a lever perspective. So the biggest portion of that, we expect sequential growth on top line. And so as we move through Q3 and Q4, we expect to get fixed-cost leverage benefit. And then the centralized sourcing, we've been working on that since Steve started here, and we're seeing some pretty significant benefits, but they haven't made it their way into the P&L yet. And so we're working through that higher-cost inventory, and we expect that to be a big driver in the back portion of the year. And then obviously, as inventory stabilizes, we expect promotional dollars to decrease as well. So I think those three things collectively together are the main drivers from a margin growth perspective in the back portion of the year. Yeah. I think it sounds like the promotions were not mentioned as problematic in the last quarter. So is there anything that you guys have seen in the cadence of promotions that's noteworthy? No. Actually, as we think about it, this is more of a return to normal. We had a more successful year-end sales event than what we were anticipating, and that kind of drove some of that promotional dollars. But as we move into the back portion of the year, if you look back pre-pandemic, the cadence was always margin would grow over the back portion as long as with top line. And top line. And so we expect that to return as we move into kind of a more normalized environment. Okay. And if I can ask one last one, any initial thoughts on the tie-up that was announced this morning and how that impacts you guys competitively and maybe why or why not that would be a good type of strategic effort for you guys to look for? Yeah. Yeah, Jamie. Go ahead. Go ahead, David. No. I was going to say, yeah, I think from our perspective, we don't typically comment on competitors' strategic decisions. But from our perspective, we're going to continue to focus on our capital allocation priorities and growing the business according to our strategic vision. And so we look forward to the future under those pretenses. Thank you. The next question comes from Griffin Bryan with D.A. Davidson. Please go ahead. Yeah. Thanks. Most of my questions have been answered already. I guess kind of piggybacking on the M&A front, can you just kind of give us an update on what your pipeline looks like and if you're seeing anything else out there in terms of potential deals that you look on, maybe some other boat segments that you might be trying to get into? Thanks. Yeah. I mean, we'll see. Go ahead, Steve. [audio distortion] -what are- [audio distortion] - like all, we'll just say we're hopefully doing the diligence work that we're doing. We talked about it yesterday. We'll continue to do that. We're looking for opportunities for our business and you know, looking for those opportunities and working those opportunities and so forth. If there's anything in the future report, we'll definitely be there in the market. Thanks. Thanks.