Marine Products Corporation

Good morning, and thank you for joining us for Marine Products Corporation's second quarter 2024 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 the time for you to queue up for your questions. I would like to advise everyone that this conference call is being recorded. I will now turn the call over to Mr. Schmidt.

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 2023 10-K and other public filings that outline those risks, all of which can be found at MarineProductsCorp.com. In today's earnings release and conference call, 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 to these non-GAAP measures to the most directly comparable gap measures. I will now turn the call over to our President and CEO, Ben Palmer.

Thank you, Mike, and thank you all for joining our call. Second quarter results were again stable from a sequential standpoint compared to first quarter, however, remained negative compared to prior year as we had anticipated. The key themes and headwinds for the boat manufacturing industry remain the same, and marine products is no exception. We and our competitors are still grappling with dealer hesitation to aggressively order boats as they attempt to clear inventory from their showroom floors. Compounding the excess inventory issue are interest rates that remain relatively high, keeping up with pressure on dealer carrying costs. We are being proactive in managing costs and production schedules during this soft period, but simply put, we believe these challenges will continue to hamper our financial results in the near term. As we said last quarter, we've reduced our production schedules to align with lower demand. We continue to use this time to undertake projects to improve plant operations so that we will operate even more efficiently once normalized demand returns. With regard to dealer inventory, I'll echo my comments from last quarter, that we remain comfortable with the level of our products in the field, but we continue to hear that high inventories are still an issue for many dealers, often in categories where we do not compete. After several quarters of increasing field inventories, we were pleased our field inventory declined over 15% in the second quarter. We continue to support our dealers with promotions to help them stimulate demand, and we have extended our programs as we believe maintaining these incentives are crucial to motivate consumers in light of elevated financing costs. As many of you are closely watching the interest rate outlook, we are encouraged that recent economic commentary suggests we are nearing some interest rate relief. While we don't believe a single Fed move to cut rates will have a dramatic impact on demand, it would be a first step towards potential additional future cuts and improved sentiment that financing costs could trend lower. As we are launching our 2025 model year, we're excited to host our dealers at our annual conference in Key Largo in August. This year, we have particular calls for celebration as we will mark the Chaparral brand's 60th anniversary. Chaparral has been a leading pleasure boat brand for decades, and we believe its reputation for innovation, design, customer satisfaction, and value are second to none. We can't wait to celebrate with our dealers, connect with them to see how we can support their businesses in the year ahead, and introduce some exciting changes for the new model year. Without stealing the thunder from our conference, we can surely say we're bringing forth a host of incremental improvements and options and new models for both Chaparral and Ravallo boats. as a result of our consistent R&D and innovation programs. We take great pride in our efforts to listen to consumer and dealer feedback when designing our boats. We approach each model year as a new opportunity to refine our offerings and give customers features, colors, options, materials, and designs that maintain the high standards they are accustomed to from our brand. Again, to our dealers out there listening to the call, we look forward to seeing you in August and continuing our collaborative partnerships. Now, Mike will provide an overview of the financial results.