MasterCraft Boat Holdings, Inc.

Good day and thank you for standing by. Welcome to the Q4 2023 Mastercraft Boat Holdings, Inc. 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 will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would like now to turn the conference over to Tim Oxley, Chief Financial Officer. Please go ahead.

Thank you, operator, and welcome, everyone. Thank you for joining us today as we discuss MasterCard's fiscal fourth quarter and full year performance for 2023. As a reminder, today's call is being webcast live and will also be archived on our website for future listening. With me on this morning's call are Fred Brightbill, Chief Executive Officer and Chairman, George Steinbarger, President of Crest, and Bobby Potter, Vice President of Strategy and Investor Relations. Fred will begin with a review of our operational highlights from the fourth quarter and full year. I will then discuss our financial performance. Then 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 the participants that the information contained in this call is currently only as of today, August 30th, 2023. 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 ongoing operations. For each non-GAAP measure, we also provide the most directly comparable GAAP measure in our fiscal 2023 fourth quarter earnings release, which includes a reconciliation of these non-GAAP measures to our GAAP results. There's also a slide deck summarizing our financial results in the investor section of our website. As a reminder, unless otherwise noted, the following commentary is made on a continuum operation basis. With that, I'll turn the call over to Fred.

Thank you, Tim, and good morning, everyone. We concluded fiscal year 2023 by delivering a record performance of $662 million in net sales, more than $131 million of adjusted EBITDA, and $5.35 of adjusted earnings per share for the full year. These outstanding results represent a third consecutive record-setting year for net sales and earnings. A strong operating performance resulted in the highest cash flow for any year in the company's history, as we generated more than $136 million of operating cash flow, driven by strong earnings and diligent working capital management. We are proud of our team and their outstanding work. Fiscal 2023 was a dynamic year for our businesses. We began the year in an environment of very low dealer inventories, uncertain retail demand, continuing but easing supply chain disruption, and emerging economic headwinds. We were early to identify and discuss this changing environment beginning with our initial guidance last September. Our goals for the year included fully restocking our dealers in advance of the summer selling season, maintaining healthy dealer inventories, and maximizing our financial performance. As the year progressed, we closely monitored the environment and adjusted production plans accordingly. By the fiscal third quarter, we had succeeded in restocking dealer inventories to what we considered optimal levels. Through the fiscal third quarter, retail activity performed closer to the upper end of our range of potential outcomes. Prevailing expectation for a return to more historical seasonal demand patterns provided us with cautious optimism for retail sales in the all-important fiscal fourth quarter and summer selling season. Historically, 40 to 50% of annual retail sales occur in our fiscal fourth quarter. Weather adversely impacted retail sales early in the quarter, and sales did not recover by the end of the quarter. As a result, retail sales for our fiscal fourth quarter fell short of the historical pattern, and we trimmed our production plans in response. Recall that on our fiscal third quarter earnings conference call, we estimated that consolidated wholesale unit sales would exceed projected retail sales by approximately 1,400 units for fiscal 2023, representing a one-time pipeline refill. Based on our expectations for fiscal fourth quarter 2023 and fiscal year 2024 retail sales, this reflected the production that we believed we needed to replenish dealer inventories and end fiscal 2023 at optimal levels. However, because the expected retail level of demand activity for our fiscal fourth quarter did not materialize, wholesale unit sales exceeded retail sales by more than our 1400 unit estimate. As a result, dealer inventories ended fiscal 2023 at levels higher than we would now consider optimal. Even so, dealer inventories ended the fiscal year about 10% lower than at the end of fiscal year 2019. Additionally, the average number of units per dealer location is lower by approximately 20% for Mastercraft and 37% for Crest, as we've expanded distribution networks since fiscal year 2019. Macroeconomic factors, including elevated interest rates as well as tightening credit standards and availability, are creating significant uncertainty, which is limiting our retail demand visibility. In addition, the general expectation for an economic downturn in fiscal 2024 will likely be a headwind for the industry. This backdrop of economic uncertainty has caused us to approach our wholesale production plan for fiscal 2024 with a prudent level of conservatism. and we have developed plans for a range of potential retail demand scenarios. Because of the lower than expected retail sales in our fiscal fourth quarter and the uncertain outlook for retail sales, wholesale unit sales for fiscal 2024 will be lower than projected retail sales. Production plans will allow us to rebalance dealer inventories with anticipated retail demand and keep our dealer pipeline healthy. Our cyclical industry requires periodic rebalancing of wholesale unit sales to retail demand. We've experienced this before, and our industry veteran management team is well prepared to navigate through a challenging economic environment. Based on our current outlook for retail demand, we anticipate returning to net sales growth in fiscal 2024. Moving on to supply chain. The general environment, including cost inflation and delivery disruption, continues to improve. Limited supplies and longer-than-normal lead times in certain components, including those that utilize microchips and some propulsion components, could continue to intermittently affect our operational efficiency and production schedules. However, we do not expect supply chain disruption to be a constraint on our fiscal year 2024 production. Given the uncertain macroeconomic environment, our Fortress balance sheet is a significant competitive advantage and provides us with abundant financial flexibility. Despite the cyclical headwinds facing the industry, we are well positioned to pursue our capital and allocation priorities, first and foremost of which is investment in growth. We have the ability to grow through multiple approaches, including organically through our existing brands, internal new brand development, and acquisitions. We have been laying the foundation for long-term growth by actively investing in targeted initiatives that will take advantage of the industry's positive underlying secular trends. These investments will continue into fiscal 2024 as we prioritize long-term growth and value creation through product line expansion, relentless innovation, and an unyielding focus on the consumer. Let me now briefly summarize some of the developments across our brands. At our MassCraft brand, net sales were $129 million for the quarter, down 12% from the record prior year. Compared to fiscal 2019, however, Mastercraft's net sales were more than 60% higher for the quarter and 50% higher for the year. Mastercraft recently announced its model year 2024 lineup, including a range of new features and enhancements, including the first-ever introduction of power board racks. An underwater exhaust now comes standard on the XT-X and X-Star-S models, while the NXT series received some upgraded dashes and a standard touchscreen. With the most models available on the market, including the all-new XT25 released in June, Mastercraft offers a boat to meet a wide range of consumer needs. The expansive 16-model lineup delivers unsurpassed wave performance, the most wave adjustability, exceptional handcrafted quality, unmatched comfort, and innovative connectivity through telematics. At Crest, net sales were nearly $25 million for the quarter. down 37% from the prior year period. Compared to fiscal 2019, Crest net sales were up 6% for the quarter and more than 44% higher for the full year. Crest recently announced its 2024 model lineup, which redefined excellence within its premium series by focusing on the details that matter most to consumers. The 2024 lineup includes a completely redesigned Peruvian model featuring a refreshed helm with upgraded electronics, navigation, and audio components, all-new tower, and a new convenient boarding ladder. George Steinbarger was recently appointed president of Crest, having previously served as our chief revenue officer. We look forward to George leading the next phase of Crest's growth. At Aviera, net sales were nearly $13 million for the quarter, up more than 19% compared to the prior year period. driven by a 17% increase in units and a higher average unit price. Aviera continues to build on its pillars of progressive style, elevated control, modern comfort, and quality details by launching the all-new AV28. The AV28 represents the next phase of Aviera's product evolution and will expand the brand's addressable market. In addition to stern drive and outboard options, the AV28 series includes the impressive surf-centric forward-facing drive variant, the AV28S. The AV28S utilizes Mastercraft's proprietary SurfStar technology to create the most refined surf experience on the water. Aviera's introduction of surf capabilities and consumer-centric features, such as an innovative folding power hardtop, Convenient submersible swim platform are just a few examples of how Aviera continues to offer luxury without limits. Aviera is also expanding distribution to additional North American and international markets. This portfolio and distribution expansion positions the brand for long-term net sales and earnings growth. I will now turn the call over to Tim who will provide more detailed discussion of our financial results. Tim?