Marine Products Corporation

Good morning, and thank you for joining us for Marine Products Corporation's third 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 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. 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 the 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 www.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. Today's press release and our website contain reconciliations of these non-GAAP measures to the most directly comparable GAAP measures. I'll now turn the call over to our President and CEO, Ben Palmer.

Thanks, Mike, and thank you all for joining our call. Third quarter results remained negative compared to prior year, as we had signaled they would in a very difficult demand environment. We and our peers in the marine industry continue to navigate a tough period, managing costs and production as best we can until consumer demand picks up. There have been some minor positive developments regarding channel inventory levels and interest rates. However, dealers continue to exhibit caution with respect to new orders. We have reduced costs as appropriate through manufacturing headcount reductions and scaled back our production to allow showroom inventories to shrink. We are taking decisive and prudent measures in the near term without sacrificing longer-term opportunities or jeopardizing our operations. With regard to dealer inventory, levels of our products in the field have come down and we are comfortable with current levels. While we don't disclose detailed quarterly dealer inventory counts, we are pleased that boats in the field are trending lower. On a sequential basis compared to the second quarter of this year, field units were down 13% and versus prior year were down 4%. Just as we did last quarter, we have extended our promotional programs as we believe these are critical to supporting our dealers and incentivizing consumers. We have also enhanced our third-party floor plan financing program to include added features and more promotional capabilities. We were also encouraged to see the first interest rate cut in several years come through in September with a 50 basis point cut by the Fed. We reiterate that while we don't believe a single Fed cut will have a dramatic impact on demand, we consider it a first step toward reducing dealer carrying costs and lowering consumers' borrowing costs. More rate cuts are expected, and hopefully downward momentum in financing costs will lure buyers back into the market. Our August Dealer Conference in South Florida was an exciting event as we celebrated Chaparral's 60th anniversary and connected with many of our dealers. We unveiled new models, colors, features, and options across both Chaparral and Revalo lineups, and the dealer response was very positive. We approach each model year as a new opportunity to refine our offerings and give customers products that continuously raise the high bar for quality and design they have come to expect from our brands. Border patterns clearly remain a headwind, but we assure you There is no shortage of enthusiasm within our dealer network. Now Mike will provide an overview of the financial results.