MasterCraft Boat Holdings, Inc.

Ladies and gentlemen, thank you for standing by and welcome to the Mastercraft Boat Holdings Inc. Fiscal Third Quarter 2025 Earnings Conference Call. Please be advised that today's conference is being recorded. I would now like to hand the conference call over to your speaker today, Scott Kent, Vice President of Finance and incoming Chief Financial Officer. Please go ahead, sir.

Thank you, operator, and welcome, everyone. Thank you for joining us today as we discuss Mastercraft's fiscal third quarter performance for 2025. 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 is Brad Nelson, Chief Executive Officer, and Tim Oxley, Chief Financial Officer. We will begin with an overview of our operational performance from the third quarter. After that, Tim will discuss our financial performance. Brad will then provide some closing remarks before we open the call for questions. Before we begin, we would like to remind participants that the information contained in this call is current only as of today, May 7th, 2025. 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 items not indicative of our ongoing operations. For each non-GAAP measure, we also provide the most directly comparable GAAP measure in today's press release, which includes a reconciliation of these non-GAAP measures to our GAAP results. There is 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 continuing operations basis. With that, I will turn the call over to Brad.

Thank you, Scott, and good morning, everyone. I want to start by acknowledging that this will be Tim Oxley's final earnings call. As we announced last month, Tim will be retiring as CFO at the end of June and will remain in an advisory role through December. Scott Kent, who you just heard from, will assume the CFO role on July 1st. Tim Oxley has had a tremendously successful career with nearly 35 years in the powerboat industry, including 18 years here at Mastercraft. He has played a key role in the evolution of our company. Tim's leadership and guidance have been invaluable, and I'm incredibly grateful for our partnership. He leaves Mastercraft in outstanding financial shape and with a strong finance team. On behalf of everyone at Mastercraft, I thank him for his service to the company and wish him all the best as he transitions towards retirement. Looking to the future, I'm pleased to have Scott succeed Tim as Chief Financial Officer. He has over 25 years of Powerboat experience, including more than six years of proven leadership here at Mastercraft. His appointment reflects our depth of talent and careful succession planning. I look forward to working closely with Scott and the rest of the team to deliver long-term growth for our stakeholders. Now, turning to our third quarter results, we delivered results that exceeded expectations despite the dynamic industry and macroeconomic backdrop. Sequentially, profitability improved due to higher volumes, operating efficiencies, and a favorable mix over fiscal Q2, driven largely by the rampant production of our premium X-Star model. We continue to focus on what's in our control, including discipline, cost, cash, and pipeline management. Our renewed focus on product development and prudent destocking over the past two-plus years has positioned our dealers well for this selling season. Our flexible operating model and ability to generate cash flow, even at these low volumes, combined with our Fortress balance sheet, affords us the ability to navigate near-term uncertainty while positioning the business for sustainable long-term growth. During the quarter, spring boat show results were up from last year and generated strong energy heading into the critical summer selling season. That said, persistent macroeconomic headwinds and tariff uncertainty continue to put pressure on the marine sector. We continue to monitor and take proactive action to mitigate the impact from these external factors. To reflect the evolving macro conditions and the challenging demand environment, We are revising our full year guidance, which we'll detail later in the call. We continue to make meaningful progress in managing dealer health and reducing inventory levels. Over the last year, dealer inventories across our brands have decreased by 30%. Compared to the same pre-pandemic period in fiscal 2019, dealer inventories are lower by more than 45%. This highlights the effect of our careful production planning, dealer support programs, and strength of our products and brands. Despite broader economic turbulence, we remain confident in achieving our fiscal year inventory reduction target of 600 to 1,000 units, assuming retail expectations hold through the summer selling seasons. Turning to the evolving trade and tariff environment, while we anticipate a modest impact from tariffs on fiscal 2025 costs, We continue to work diligently with key suppliers to mitigate risk. We're also closely monitoring broader demand implications. Regardless of market dynamics, our intent is to keep our dealers healthy and ensure inventories are closely aligned with retail demand. Our capital allocation priorities remain disciplined and consistent despite the external pressures. We have a solid balance sheet with no debt, we are generating cash, and our strategic growth initiatives are fully funded. We continue to prioritize our share repurchase program to return capital to shareholders. Given the suppressed marine environment, we remain opportunistic and highly selective with respect to inorganic growth. Shifting to recent developments across our brands. The X-Star, Mastercraft's flagship model, was awarded the prestigious National Marine Manufacturers Association Innovation Award in the towboat category at the Miami International Boat Show. Additionally, the NMMA recognized both Mastercraft and Crest with Marine Industry Customer Satisfaction Index Awards for 2024. This recognition underscores our continued focus on quality and innovation. Mastercraft has a long-standing track record of winning CSI awards, and Crest has now received the honor for six consecutive years, every year under our ownership. Within our Mastercraft segment, our team supported dealers at key boat shows where we showcased our X-Star product. Its halo effect has been particularly positive for the Mastercraft brand globally. Consumer interest remains strong, and we ramped up X-Star production in the third quarter to meet demand. We continue to identify growth opportunities within our distribution network. Recently, Mastercraft strengthened its dealer presence in Dallas, the largest ski weight market in the United States. We've also announced dealer expansion in southern Utah and Lake of the Ozarks in Missouri. As such, we're experiencing early momentum in these key markets. We'll continue to explore additional opportunities to enhance our dealer network. Turning to our pontoon segment, which includes Crest and Belize brands. Dealer inventories across the broader pontoon market remain challenged, which has created a more promotional and competitive environment. Overall, we continue to proactively adjust production levels to right-size filled inventories as evidenced by a 40% year-over-year unit reduction in this segment. As announced in February, Michael Connell has been appointed president of the pontoon business, and he's hit the ground running, joining the team in Owasso. The team's priorities are centered on product enhancements, dealer and pipeline management, and operational improvement through this dynamic timing. With that, I'll now turn the call over to Tim to provide additional commentary on the quarter and walk through our financials.