MasterCraft Boat Holdings, Inc.

The company assumes no obligation to update any statements, including forward-looking statements. Statements that are not historical facts are forward-looking statements and subject to the safe harbor disclaimer in today's press release. Additionally, on this conference call, we will discuss non-GAAP measures that include or exclude special or items not indicative of our ongoing operations. For each non-GAAP measure, we also provide the most directly comparable GAAP measure and our fiscal 2022 third quarter earnings release, which includes a reconciliation of these non-GAAP measures to our GAAP results. We would also like to remind listeners that there's a slide deck summarizing our financial results in the investor section of our website. With that, I'll turn the call over to Fred.

Good morning, everyone. Thank you for joining us today. Our business performed extremely well during the third quarter as we delivered our highest net sales, gross profit, diluted adjusted earnings per share, and adjusted EBITDA for any quarter in the company's history. These results reflect a continuation of exceptional execution against our strategic and operational priorities as we delivered a record-setting performance for the sixth consecutive quarter. The hard work and determination of our team in the face of a challenging environment made this momentous achievement possible. Impressively, we grew net sales organically by more than 26%, and we grew diluted adjusted earnings per share by nearly 20% year over year. This represents the fifth consecutive quarter of year over year net sales growth of more than 25%. Although we achieved another record quarter, our growth in net sales and earnings was once again constrained due to supply chain and COVID disruptions. Logistics challenges, combined with shutdowns, labor shortages, and capacity constraints at our suppliers have caused widespread but largely intermittent component delays and scarcity across the industry. These disruptions, combined with labor challenges associated with COVID, limited our unit shipments and created significant production inefficiencies during the quarter. These challenges delayed the conversion of work and process inventory to finished goods and resulted in additional costs not typically experienced in a normal production environment. Constrained production and higher production costs combined with higher than expected inflation in the quarter has created significant, but we believe temporary, margin headwinds. Driven by our consumer-centric strategy, we are prioritizing product availability and quality over cost to meet the continuing strong retail demand as we head into the summer boating season. The constrained production environment and the continuing robust demand for our products is keeping dealer inventories at historic lows for this time of the year. Low dealer inventory has resulted in lower retail sales across the industry, including our brands. An independent survey of our dealers during the quarter revealed that most of those surveyed described inventories for our brands as being too low, while no dealers in the survey described inventories for any of our brands as too high. Our dealer inventories at the end of the third quarter were down year over year by 4%. When compared to the end of the third quarters of fiscal 2020 and 2019, dealer inventories were lower by 48% and 52%, respectively. Although we believe product availability is limiting retail sales, we remain optimistic about the sustainability of consumer demand. As consumer preferences continue to evolve, we expect that structural changes in where and how people choose to live, work, and recreate have generated strong consumer demand for the boating lifestyle that will persist. Activity at boat shows attended by our dealers support our view that there is still a strong consumer interest in the boating lifestyle and our brands. A recent report by the National Marine Manufacturers Association, or NMMA, reported that first-time boat buyers topped 420,000 in 2021 on a par with 2020 levels. This represents two consecutive years of new voter entrance at levels not seen since the Great Recession. Investments in consumer acquisition have allowed us to capitalize on the expansion of our industry's addressable market, leading to greater awareness and lead generation across all our brands, and driving record levels of retailed sold orders in our system. As a result of continuing robust demand and production rates constrained by supply chain disruption, We expect it will be sometime in fiscal 2024 before dealer inventories reach optimal levels. This provides us with confidence in our wholesale growth visibility in the face of an uncertain macroeconomic backdrop. We will continue to progress in the pursuit of our overarching objective of driving sustainable, accelerated growth by being the most consumer-focused recreational boat manufacturer. We remain determined to execute each of our four strategic priorities, consumer experience, consumer acquisition, operational excellence, and human capital development. We recently received an acknowledgment of the success of our strategic focus on the consumer and quality. In February, the National Marine Manufacturers Association announced the recipients of the 2021 Marine Industry Customer Satisfaction Index Award for Excellence in Customer Satisfaction. The annual CSI award recognizes marine manufacturers who attain the highest levels of satisfaction as voted on by consumers. We are proud that, once again, Mastercraft and Crest received this award. This is the 11th consecutive year that Mastercraft has received this honor and the third consecutive year for Crest. Let me now briefly review some of the latest developments across our brands. Our Mastercraft brand performed well during the quarter and grew net sales to a record $120 million. despite ongoing part shortages that impacted production volume and cost as we previewed for investors on our fiscal second quarter call. This tremendous result is due to the extraordinary efforts of the Mastercraft team and the continued success of Mastercraft's best-in-class operating model, which we leveraged to mitigate supply chain disruption. Mastercraft has increased production sequentially each quarter this fiscal year, and we expect to be producing at record levels in the fourth quarter. The ability to ramp up production during this time of limited product availability while maintaining our uncompromising quality standards is key to growing market share. According to the most recent All-States Reporting SSI market share data, as of the rolling 12-month period ended December 31, 2021, Mastercraft increased market share over each of its closest three competitive brands by between 50 and 300 basis points. This performance solidifies Mastercraft as the number one brand in the fastest-growing and highest-margin category in the powerboat industry. And while the official rolling 12-month March data is not out yet, preliminary results reflect continuing market share strength versus our closest three competitive brands. Mastercraft's retail sales remain strong during the quarter when compared to the third quarter of fiscal 2021, and all model year 2022 production slots are sold out. For model year 2022, Mastercraft unveiled one of the most aggressive model year changes in its history, including the launch of four new boats, which have been incredibly well received by our dealers and consumers. We followed up on that success by announcing the exciting addition of the most powerful tow sport boat engine in the world at the Miami International Boat Show, which will be available only in a Mastercraft beginning in model year 2023. This 630 horsepower, 665 foot-pounds of torque, supercharged 6.2 liter engine option highlights the unrelenting emphasis on consumer experience, innovation, and performance, which differentiates Mastercraft from the competition. Finally, I would like to recognize Mastercraft's attainment of a major workforce safety milestone. During the quarter, Mastercraft surpassed 2 million hours worked without a lost time incident. As of today, we have continued to add on to this impressive safety record, having attained more than 2.4 million hours and 547 days without a lost time incident. This achievement showcases our unrelenting commitment to safety, an essential element of Mastercraft's core values in building and delivering world-class tow sport boats. We salute our workforce for this outstanding achievement. Now on to CREST. which delivered another record-setting performance for the fifth consecutive quarter. Crest shipped the most units of any quarter in the company's history. Crest also set a quarterly record for net sales, which increased by 28% year over year, primarily driven by a 17% increase in units, while achieving a gross margin of nearly 20%. Crest's ability to drive top-line growth and generate strong margins in this environment demonstrates the success of the Crest acquisition and highlights our value-enhancing growth strategy. According to the most recent All-States Reporting SSI market share data, as of the rolling 12-month period ended December 31st, 2021, Crest increased market share by 40 basis points. Crest retail sales remained robust during the quarter when compared to the third quarter of fiscal 2021, and all model year 2022 production slots are sold out. At NauticStar, supply chain disruption and labor constraints have created operational challenges which heavily impacted our third quarter production ramp-up plans and limited shipments. Nautic Star's turnaround plan has not progressed at a pace that meets our expectation, which resulted in a change in leadership in February. Functional leaders from Mastercraft, augmented by third-party consultants, have been deployed to accelerate operational improvements. More details about our progress will be shared on future earnings calls. At Aviera, we continue to ramp up production at the Merritt Island facility to meet exceptionally strong consumer demand. Aviera's ramp up gained additional momentum during the quarter as net sales were up 330%, driven by a 263% increase in units. The increase in overhead due to the new Merritt Island facility will continue to have a dilutive near-term impact on Aviera's margins and profitability. However, We expect Aviera's production to steadily increase and margins to improve as we finish fiscal 2022 and continue into fiscal 2023. Furthermore, the introduction of new models in the near future will position the brand for accelerated revenue and margin growth. We continue to anticipate our capacity at Aviera facility will support at least $100 million of annual sales over time. According to the most recent All States Reporting SSI Margin Shared Data, As of the rolling 12-month period ended December 31st, 2021, Aviera increased its market share by 310 basis points in the 30 to 43-foot premium day boat segment. We are very pleased with the overall performance of the company despite the many challenges facing the industry. We remain on track for a record-setting fiscal 2022 and continue to sustain industry-leading organic net sales growth while gaining market share. We expect to build on that success as we wrap up the year and head into fiscal 2023. I will now turn the call over to Tim, who will provide more color on our financial results. Tim?

Thanks, Fred. Looking at the top line, net sales for the third quarter were a record $186.7 million, an increase of $38.9 million, or 26.3%, compared to $147.9 million for the prior year period. This increase was due to higher prices favorable model mix, higher option sales, and higher wholesale unit volume. As Fred mentioned, this was the most profitable quarter in the company's history. Gross profit for the quarter increased $4.8 million to $42 million compared to $37.2 million for the prior year period, principally driven by higher net sales. This favorability was partially offset by higher input costs driven by inflationary pressures and production inefficiencies from supply chain disruptions. Our gross margin was 22.5% for the quarter, a decrease of 270 basis points compared to the prior year period. Lower margins, particularly at NauticStar, were the result of supply chain disruptions and inflationary pressures that limited production and drove input costs higher. Price increases partially offset these higher costs for the quarter, as our gross margin increased by 40 basis points sequentially from our second quarter. Operating expenses were $14.5 million for the quarter, a decrease of 100,000 or approximately 1% compared to the prior year period. SG&A as a percentage of net sales was once again the lowest for any quarter since becoming a public company as we continued to prudently manage cost. Turning to the bottom line, adjusted net income for the quarter increased to a record $22.4 million or $1.21 per diluted share. computed using the company's estimated annual effective tax rate of approximately 23%. This compares to an adjusted net income of $19.1 million, or $1.01 per diluted share in the prior year period. Adjusted EBITDA was a record $32.1 million for the third quarter, compared to $27.5 million for the prior year period. Adjusted EBITDA margins were higher year over year for each of our segments, except NauticSTAR, which was heavily impacted by supply chain disruption, inflationary pressures, and other operational challenges. The dilutive impact on margins from NauticStar more than offset the margin improvement at Mastercraft, Crest, and Aviera. As a result of our consolidated adjusted EBITDA margin was 17.2% for the third quarter, down from 18.6% for the prior year period. Turning to our balance sheet, we ended the quarter with nearly $106 million of total liquidity, including $13.8 million of cash and more than $92 million of availability under our revolving credit facility. Working capital has increased by $28 million during the fiscal year to date. This was primarily driven by higher raw material and work in process inventories due to increased production, increased safety stock to mitigate supply chain disruption, and the delayed conversion of whip-to-finish goods. Fiscal year to date, we reduced our outstanding debt by more than $28 million, and we ended the quarter with net leverage of 0.5 times adjusted EBITDA on a trailing 12-month basis. Given our recent operating performance, financial results, and the unprecedented wholesale visibility we currently have, we believe our stock represents an outstanding value at recent prices. Because of this view, we've split approximately $21.5 million to repurchase nearly 811,000 shares of our common stock fiscal year to date. This represents more than 40% of our $50 million program authorized in June of 2021. We expect to continue to opportunistically return cash to shareholders through the program while prioritizing financial resiliency and high return investments in the business that create long-term shareholder value. Looking forward, we once again raised our net sales guidance for the full year on the strength of our operating performance, continuing strong retail demand and unprecedented wholesale visibility. While we believe our team can continue to expertly navigate the challenging environment, we're expecting the supply chain to remain constrained and inflationary pressures and production inefficiencies to continue to weigh on margins. We will continue to prioritize delivering consumers their boats heading into the summer season. Higher than previously expected inflation is partially being driven by recent geopolitical events, including the Ukraine-Russian war. For the full year of fiscal 2022, consolidated net sales growth is expected to be up in the 30% range. Because of supply chain disruption and inflationary pressures combined with operational challenges at NauticStar, we expect our adjusted EBITDA margins to be in the high 16% range. We expect adjusted earnings per share growth to be up in the 30% range year over year. Due to project delays driven by supply chain and labor disruptions, we are lowering our capital expenditures estimate to $20 million for the year. Our guidance assumes minimal improvements in the supply chain environment for the remainder of our fiscal year. Despite the supply chain and profitability headwinds, we are confident in delivering another record year for our shareholders. I will now turn the call back to Fred.