Brandon Rollé

Brandon Rollé questioned the outlook for labor costs and potential relief, as well as any signs of a bounce back in the ski and wake category and Malibu Boats' efforts to reinvigorate it.

Answer

CFO David Black stated that the company's focus on operational effectiveness and centralized sourcing is expected to yield benefits in labor per unit cost and overall margin for the remainder of the year. CEO Steve Menneto noted that the ski and wake category is still seeing 'more of the same' trends, but Malibu Boats and its competitors are actively working to drive growth in the segment through individual and collaborative efforts.

Brandon Rollé (Loop Capital) asked about the outlook for labor costs and potential relief, and whether the ski and wake category is experiencing a bounce back compared to the broader industry, along with OEM efforts to reinvigorate the segment.

Answer

CFO David Black stated that Malibu Boats expects benefits from operational effectiveness, including labor per unit cost and centralized sourcing, to flow into margins in the remainder of the year. CEO Steve Menneto noted that the ski and wake category is seeing "more of the same" trends, with ongoing collaborative efforts among Malibu Boats and competitors to drive growth in the segment.

Brandon Rollé requested more detail on boat show demand by segment, the expected duration of the inventory destocking phase, and whether the observed saltwater market weakness was industry-wide.

Answer

CEO Steven Menneto described boat show results as "decent" but mixed, with strong performance in some areas and segments but not universally. He stated that dealers will likely remain in a destocking mindset until the retail market shows clear signs of improvement. He also confirmed that the weakness in the saltwater market is an industry-wide phenomenon, not specific to their products.

Brandon Rollé of D.A. Davidson asked for a breakdown of the company's import mix by country, questioned the source of the OEM segment's EBIT improvement on lower revenue, and sought to reconcile a small increase in towable revenues with a large expected increase in shipment volumes.

Answer

CFO Lillian Etzkorn declined to provide a country-specific import breakdown but noted a slight uptick in imports was due to supply chain timing, not resourcing. CEO Jason Lippert confirmed they did some pre-buying of certain products in Q4 ahead of anticipated tariffs. Etzkorn and Lippert explained the revenue-volume disconnect by emphasizing the significant negative impact of product mix, as lower-content single-axle units have a much lower price point, which offsets volume gains.

Brandon Rollé asked if 30% is still the correct figure for globally imported components and whether passing on potential tariff costs is feasible in the current price-sensitive market. He also requested more color on chassis market share gains, referencing that some OEMs have explored other suppliers.

Answer

CEO Jason Lippert stated that the percentage of imported components is likely decreasing due to reshoring initiatives and that passing on costs is a last resort. He explained that chassis market share gains are driven by increasing content—such as beefier frames, leveling systems, and new suspensions like TCS—and by supplying the highest-volume RV brands. While some business is traded each year, he asserted that the net result has been positive revenue growth and a dominant 98% share in the fifth-wheel chassis market.

Brandon Rollé inquired about changes in the competitive environment and asked for commentary on dealer ordering activity post-RV show season, particularly between large and small dealers.

Answer

President, RV, Jeffrey Rodino stated that the competitive environment remains stable, with no marked changes over the last year. Regarding ordering, he noted that while they see production levels, they don't have specific dealer-level data. However, there has been a production uptick across categories, though the mix still favors smaller, entry-level units.

Brandon Rollé of D.A. Davidson inquired about LiveWire's path to profitability, asking for a timeline and what factors might cause Harley-Davidson to reconsider its commitment to the electric motorcycle business.

Answer

LiveWire CEO Karim Donnez stated that the company is on an accelerated path to profitability, targeting a positive contribution margin by the end of the year through aggressive cost reductions. Harley-Davidson CEO Jochen Zeitz added that while the company is committed to LiveWire 'at this point,' its performance is being watched very carefully. He stressed that sales adoption needs to materialize, and if performance does not improve, the company will have to evaluate its 'optionalities.'

Brandon Rollé from D.A. Davidson asked about LiveWire's path to profitability and questioned Harley-Davidson's level of commitment to the business, given its history of being a headwind to earnings.

Answer

LiveWire CEO Karim Donnez outlined an aggressive internal program to reduce bill of materials and conversion costs, aiming for a positive contribution margin by year-end as a first step toward profitability. Harley-Davidson CEO Jochen Zeitz reiterated that while they are committed to the business, LiveWire must perform and show improvement. He stressed that they are watching the situation very carefully and will have to look at other options if performance targets are not met.

Brandon Rollé from D.A. Davidson asked about the expected timeline for LiveWire to achieve profitability and questioned Harley-Davidson's commitment to the venture given its persistent financial headwinds.

Answer

LiveWire CEO Karim Donnez stated the company is aggressively working to accelerate its path to profitability, with a goal of achieving a positive contribution margin by the end of the year. Harley-Davidson CEO Jochen Zeitz reiterated that while H-D is currently committed, LiveWire's performance is being evaluated very carefully. He stressed that performance needs to improve and sales need to materialize, or the company will have to explore other options.

Brandon Rollé from D.A. Davidson asked if the 'flattish' retail sales expectation for the year baked in any market share gains and inquired about specific pressure points in MarineMax's inventory compared to the broader industry.

Answer

Executive Michael McLamb clarified that the 'flattish' sales guidance is consistent with their view of the overall industry and is intentionally cautious due to the significant impact of the hurricanes on their Florida operations, a market where they hold a large presence. Executive Bill McGill addressed inventory, stating that while levels are elevated, the company's inventory is much fresher and more current than the industry average, which reportedly has a more significant aging problem. The focus is on moving any aged product during the winter boat show season.

Brandon Rollé asked for expectations for fourth-quarter SG&A as a percentage of gross profit and any potential guidance on adjusted EBITDA for the quarter.

Answer

CEO Marcus Lemonis declined to provide specific quarterly guidance but acknowledged Q4 is seasonally the toughest for SG&A as a percentage of gross profit. He reiterated the full-year 2025 goal of improving the metric by 600-700 basis points from an expected 2024 finish of ~85%, targeting a 77-78% range. This improvement is primarily driven by the planned recovery of the used vehicle business. The long-term goal is the low 70%s.

Brandon Rollé asked about a potential change in chassis provider for the Transcend product line and whether this provided pricing benefits or was part of a broader supplier diversification effort.

Answer

President and CEO Michael Happe declined to comment on specific supplier relationships or the bill of materials for any product. He stated that for price-sensitive, opening price point products like Transcend, all supplier options are kept open to hit targeted price ranges, and that all suppliers must consistently earn their business.

Brandon Rollé of D.A. Davidson asked if BRP anticipates a near-term market share headwind in off-road vehicles due to competitors' aggressive shipping while BRP pulls back. He also inquired about the rationale for introducing an electric motorcycle at this time.

Answer

CEO Jose Boisjoli stated that despite reducing shipments, BRP believes it will have enough inventory to meet retail demand and still expects to gain market share in off-road for the year. Regarding the electric motorcycle, he explained it's a long-term play that leverages a modular electric power pack, which will also be used in other product lines like snowmobiles. He noted that while the EV trend has slowed, it's here to stay, and early feedback on the new product is optimistic.