MasterCraft Boat Holdings, Inc.

The conference will begin shortly. To raise your hand during Q&A, you can dial star 1 1. Good day, and thank you for standing by. Welcome to the MasterCraft Boat Holdings Fiscal Fourth Quarter and Full Year 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you need to press star 1-1 on your telephone. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Tim Oxley, CFO. Please go ahead.

Thank you, Operator, and welcome, everyone. Thank you for joining us today as we discuss Mastercraft's fiscal fourth quarter and full year performance for 2022. As a reminder, today's call is being webcast live and will also be archived on our website for future listening. Joining me on today's call are Fred Brightbill, Chief Executive Officer and Chairman, and George Steinbarger, our Chief Revenue Officer. Fred will begin with a review of our operational highlights from the fourth quarter and full year. I will then discuss our financial performance. I'll turn the call back to Fred for some closing remarks before we open the call for Q&A. Before we begin, we'd like to remind participants that the information contained in this call is current only as of today, September 8, 2022. 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 in our fiscal 2022 fourth 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 is a slide deck summarizing our GAAP results in the investor section of our website. but that'll turn it all over to Fred.

Thank you for joining us today. Our business has executed extremely well against our strategic and operational priorities during fiscal 2022 in a very challenging and dynamic environment. We delivered record-setting performances for each quarter, which culminated in record net sales and earnings for the full year and for the second consecutive year. We grew our net sales by nearly 35% and our diluted adjusted earnings per share by more than 37% year-over-year, all on an organic basis. We far exceeded expectations in the fourth quarter by delivering net sales growth of nearly 40% and diluted adjusted earnings per share growth of more than 80%. This represents the seventh consecutive record-setting quarter and the sixth consecutive quarter of year-over-year net sales growth of more than 25%. as we leveraged our flexible operating model to capitalize on the strong consumer demand for our products. This exceptional performance was enabled by a year-over-year unit increase of more than 14% for the full year, resulting in the most wholesale units ever sold by the company. To be able to increase throughput and produce record units in a challenging supply chain environment clearly demonstrates our disciplined execution, operational excellence, and the strength of our team and our market-leading brands. The credit for this performance goes to our more than 1,700 employees who continue to execute our key strategic priorities in the face of adversity. Although we achieved another record year, our growth in net sales and earnings were constrained due to supply chain disruptions and labor challenges associated with COVID. These headwinds limited our unit shipments and created significant production inefficiencies during the year. They also resulted in additional costs not typically experienced in a normal production environment. Constrained production and higher production costs, combined with higher than expected inflation during the year, created significant margin headwinds. Guided by our consumer-centric strategy, we prioritized availability and quality over cost to meet the strong retail demand that we were experiencing. At the same time, our businesses definitely reacted to these cost pressures with strategic pricing and operational cost mitigation actions, which allowed us allowed our margins to recover, resulting in a record fourth quarter. The constrained production environment and robust consumer demand for our products resulted in dealer inventories near historic lows throughout the year. Low dealer inventory during the year constrained retail sales across the industry, including at our brands. Surveys of our dealers continue to reflect that inventory for our brands are too low, while no dealers in the surveys described inventories for any of our brands is too high. Our strategic focus on operational excellence enabled us to ramp up production throughout the year and to begin to replenish our pipelines. Nevertheless, our dealer inventories remain well below pre-COVID levels. At the end of fiscal 2022, our dealer inventories were more than 50% lower than they were at the end of fiscal 2019. Our fiscal 2023 production plan is fully supported by dealer commitments across all our brands. Although we believe product availability limited retail sales in fiscal 2022, we remain optimistic about the long-term resilience of our consumer. As consumer preferences continue to evolve, we expect that structural changes in where and how people choose to live, work, and spend their free time have generated strong consumer demand for the boating lifestyle that will persist over the long run, despite near-term retail volatility driven by macroeconomic headwinds. 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 enabling market share gains. In an uncertain macroeconomic environment, these investments position us to overdrive retail versus our competitors based on the quality of our premium brands and products and not just rely on price. Before moving on to a deeper dive into the performance of our brands, I wanted to touch on the announcement we issued earlier today relating to the sale of the NauticStar business. As we had announced on August 9th, we conducted a strategic review of the business, and as part of that review, considered a wide range of available alternatives to maximize shareholder value. Guided by our strategic framework, it became clear that exiting this business would allow us to concentrate on our best performing, highest potential businesses. This decision will enable us to focus on our Mastercraft, Crest, and Aviera brands and ensure that we are directing resources to the areas that will generate the greatest value for our shareholders. We believe that the strength and breadth of our resulting brand offerings and the investments we are making in product development, marketing, production, and operational excellence have positioned the company better than ever in our recent history. We will continue to make progress toward our overarching objective, of driving sustainable, accelerated growth by being the most consumer-focused recreational boat manufacturer. We remain determined to execute against each of our four strategic priorities, consumer experience, customer acquisition, operational excellence, and human capital development. Let me now briefly review some of the latest developments across our brands. Our Mastercraft brand performed extremely well during the year by producing the most units in the company's history and growing net sales to a record $466 million, despite part shortages that impacted production volume and margins. 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 increased production sequentially each quarter of the fiscal year and ended the year by producing at record levels during the fourth quarter. The ability to aggressively ramp up production during this time of limited product availability while maintaining our focus on quality was key to growing market share. As acknowledgment of the success of our strategic focus on the consumer and quality, during fiscal 2022, Mastercraft received the National Marine Manufacturers Association Customer Satisfaction Index Award for the 11th consecutive year. According to the most recent All-States Reporting SSI market share data, as of the rolling 12-month period ended March 31, 2022, Mastercraft increased market share over each of its closest three competitive brands by between 80 and 240 basis points. Mastercraft remains the number one brand in the fastest growing and highest margin category in the powerboat industry. For model year 2022, Mastercraft unveiled one of the most remarkable model year changes in its history. including the launch of four exciting new boats, the new Surfstar surf system, our new HydroLock power technology, and a myriad of other innovative and consumer-centric styling and convenience features, all of which have been incredibly well-received by our dealers and consumers. Mastercraft has followed up on that success with an equally impressive model year 2023 launch by recently announcing the all-new XT22T, the completely redesigned XT20, and a variety of new features that improve comfort, ergonomics, and technology across the product portfolio. In addition, Mastercraft plans to launch two more models during the year. With the launch of four new 2023 models, Mastercraft's most attainable and versatile product offerings will be completely refreshed and expanded. While we are continuing to see strong demand for our larger models, the full breadth of the lineup provides consumers a wide range of appealing price points. With new technology features and telematic sensors in each 2023 model, Mastercraft boats are now smarter than ever. With our standard onboard telematics, we have the ability to stay connected remotely to the boat. Using the all-new Mastercraft Connect app, boaters can monitor their boat's health, view and share critical data with their crew members, and alert their local dealer for service needs. Also new for 2023 is an optional flip-down swim step, which allows easy entry in and out of the water and can be operated easily by single hands. Mastercraft's exclusive partnership with Ilmore Marine has enabled boaters to experience the most efficient, high-performance towboat engines available. For 2023, our consumers are now able to upgrade to the new Ilmore Supercharged 6.2-liter engine. With 630 horsepower and 665 pound-feet of torque, The all-new supercharged 6.2 liter is the world's most powerful towboat engine and the cleanest engine over 500 horsepower. This new propulsion option allows even our largest Mastercraft boat, the X26, to accelerate and handle like a sports car, create a truly exhilarating experience on the water. Mastercraft's continued release of new products and features highlights the unrelenting emphasis on the consumer experience, innovation, and performance, which differentiates Mastercraft from the competition. Now on to Crest, which delivered another record-setting performance for the second consecutive year by shipping the most units of any year in the brand's history. Crest also set a record for net sales, which increased by more than 37% year over year, primarily driven by a nearly 28% increase in units, while achieving a gross margin of more than 20%. Since being acquired, Crest has grown net sales by 44% and has more than doubled adjusted EBITDA and has expanded adjusted EBITDA margin by nearly 500 basis points. Crest's ability to consistently drive growth and generate strong earnings demonstrates the success of the Crest acquisition and highlights our value-enhancing growth strategy. Consistent with our emphasis on quality, Crest has received the MMA's Customer Satisfaction Index Award every year since we acquired the brand. According to the most recent All States Reporting SSI and market share data, as of the rolling 12-month period ended March 31, 2022, Crest increased market share by 60 basis points. We are building upon Crest's strong foundation of quality, operational excellence, and profitability by accelerating innovation as we continue to execute on our growth strategy for the brand. For model year 2023, Crest recently announced the complete redesign of its signature line of pontoon boats. These models provide all-new attractive exterior designs and consumer-centric features while maintaining Crest's reputation for durability and safety. Crest also announced the 2023 Crest Current, an all-new, all-electric pontoon boat that is eco-friendly, innovative, low-maintenance, and comfortable. The Current is a direct reflection of Crest's constant efforts to push the boundaries of innovation to deliver a superior boating experience to our consumers. At Aviera, net sales were up 178% for fiscal 2022, driven by a 138% increase in units. Although the increase in overhead due to the Marin Island facility had a dilutive impact on Aviera's margins and profitability during 2022, we expect Aviera's production to continue to increase and margins and profitability to expand and achieve profitability in 2023. Since the first year of production in fiscal 2020, Aviera has grown net sales at a compounded annual rate of more than 90% in order to satisfy the exceptionally strong demand for this aspirational brand. For fiscal 2023, we expect Aviera's net sales to grow to at least $50 million. Furthermore, the introduction of new models in the near future will position the brand for continued revenue and margin growth. We anticipate our capacity at the Aviara facility will support at least $100 million in annual revenue over time. According to the most recent All-States Reporting SSI market share data, as of the rolling 12-month period ended March 31, 2022, Aviara increased its market share by 270 basis points in the 30 to 43-foot premium day boat segment. Since the introduction of the brand only a few short years ago, Aviara's retail sell-through rate has far exceeded our expectations, positioning the brand as the preeminent luxury day boat. Aviara ended fiscal 2022 with virtually no dealer inventory available for sale, resulting in an extremely lean pipeline going into fiscal 2023. Next week, we plan to publish our company's inaugural sustainability report, which communicates our commitment to environmental sustainability and promotes the health and safety of our employees and being good stewards for all our stakeholders. We recognize the importance of social and environmental responsibility and global sustainability, and we are committed to making the best products in the best way possible. In alignment with our strategic priorities and the foundations in place to ensure we hold ourselves to high standards in all aspects of our business, We look forward to making boating better and maintaining our company's position at the forefront of the marine industry. I will now turn the call over to Tim, who will provide more color on our financial results. Tim?