Marine Products Corporation

Good morning, and thank you for joining us for Marine Products Corporation fourth quarter 2023 financial earnings conference call. Today's call will be hosted by Ben Palmer, President and CEO, and Mike Schmidt, Chief Financial Officer. At this time, all participants are in listen-only mode. Following the presentation, we will conduct a question and answer session. Instructions will be provided at that time for you to queue up for questions. I would like to advise everyone that this conference call is being recorded. I will now turn the call over to Mr. Smith.

Thank you, and good morning. Before we begin, I want to remind you that some of the statements that will be made on this call could be forward-looking in nature. and reflect a number of known and unknown risks. Please refer to our press release issued today along with our 2022 10-K and other public filings that outline those risks, all of which can be found at www.marineproductscorp.com. In today's earnings call and in our press release, we'll be referring to several non-GAAP measures of operating performance and liquidity. We believe these non-GAAP measures allow us to compare performance consistently over various periods. Our press release issued today and our website contain reconciliations of these non-GAAP measures for the most directly comparable GAAP measures. I'll now turn the call over to our President and CEO, Ben Palmer.

BEN PALMER Thank you, and good morning. Before we begin, I want to remind you that some of us apologize. Appreciate everybody joining the call this morning. Our fourth quarter results reflect the ongoing normalization of retail boat sales as the multi-year post-COVID consumer demand boost subsides. In response to this slowdown, we have adjusted production to meet current order patterns as the retail channel works through excess inventory. We believe we are now in a steady balance of production and sales. However, our fourth quarter results showed significant declines versus the prior year, Difficult year-over-year comparisons are likely to persist near term. In the meantime, we will focus on making sound operational and financial decisions to position the company for sustainable long-term growth. First and foremost, we believe our current production and shipment schedule, together with our incentive programs, should now facilitate a net reduction in dealer inventories. While still early, we are seeing an order flow that would justify a step-up in production later during the first quarter. So that is an encouraging sign as we start the calendar year and get positive feedback from recent vote shows. With regard to dealer inventory, I'd say we're comfortable with the level of our products in the field as we were disciplined in not pushing too much product into the channel. However, we do get the sense that dealer inventories overall are a bit high. Stimulate buying, we've returned to a historically normal level of retail incentives, which had been minimal these past few years. We launched a program in the fourth quarter to move dealer inventory, and we see other manufacturers doing the same. Mike will comment further on promotional activities as fourth quarter results reflected an outsized impact reinitiating these programs. We've talked previously about economic uncertainty and the new reality of higher interest rates. Rates not only affect the monthly payments for consumers who finance their boats, but also dealers' carrying costs of inventory. The interest rate outlook remains somewhat unclear, and we hope more clarity on the direction of rates and the magnitude of possible rate cuts will help consumers get more comfortable. Despite a choppy environment, we will remain focused on areas of the business within our control. We will continue to invest in R&D to support new innovative features, products, and design improvements to differentiate ourselves in the marketplace. For example, we are delivering premium interior materials as well as showcasing additional safety and comfort benefits. We believe our reputation for innovation and product leadership has helped us maintain our leading market share over the years. Second, we are very pleased with our existing dealer network and believe we have room to grow in that infrastructure. Rather than dilute our existing dealers by pursuing overlapping or competitive distribution, we see opportunities to strengthen existing relationships even further. We recently hosted our most intensive dealer training conferences yet, arming them with our latest selling and customer education tools. We are committed to consistently elevating our partnerships with them, positioning Chaparral and Revalo for continued success in their short showrooms. We also conducted more advanced technical and repair training for dealer service personnel. We received incredible feedback from these events, and we look forward to sharing in our dealer success as a result of these collaborative efforts. Another investment we're making is selective automation of our plants. We are increasingly using robotics to perform certain tasks to leverage the skill of our craftsmen and reduce unnecessary fiscal demand. This drives a safer production environment and allows our workers to focus on areas that drive maximum quality and consistency. In addition to investments inside our facilities, we have a significant solar panel installation slated for later this year. Beyond the environmental benefits of using alternative energy sources, we expect this project to drive some cash savings. This equipment will have the capability to supply a sizable portion of our energy needs at our national Georgia manufacturing site. So before turning the call over, I just reiterate that we are confident in our opportunities to invest in the business and that we'll focus on preserving as much margin as possible as we continue to assess the demand of our environment. Now, Mike will provide an overview of the financial results.