Marine Products Corporation

participants are 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 a number of known and unknown risks. Please refer to our press release issued today along with our 2024 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. Our 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. Thank you for joining our call this morning. Second quarter sales were down slightly compared to the prior year. However, the year-over-year declines have moderated as our production levels have stabilized. While much uncertainty exists in the macro environment with tariffs, interest rates, and the general economy, we have seen positive signs including declining channel inventory. We are cautiously optimistic that the industry is working through excess inventory and built more certainty over model year 2026 pricing allows for better planning. Interest rates have remained elevated, and any sustained decrease could be another catalyst for dealers and consumers to increase spending. Our focus remains on positioning our brands for improved future demand, production efficiencies, and maximizing our returns on investments. We continue to manage our production relative to channel inventory. Despite industry-wide retail sales declines during the first four months of 2025 versus the prior year, we've been able to reduce our field inventory by 11% year-over-year. We continue to partner closely with our dealers, but we note they remain cautious with regards to their levels of inventory. Because field inventory levels are reasonable, our retail promotional activity continues at typical levels. Tariffs remain top of mind. However, continued changes and ongoing negotiations make it very challenging to precisely plan at this point. From input cost standpoint, key purchases are engines, navigation systems, stainless steel, aluminum, and fiberglass. Suppliers have provided pricing for the new model year products, but major tariff changes could cause a revaluation by suppliers. We maintain dialogue with our government representatives and trade associations, but have limited visibility on the ultimate outcomes. Interest rates continue to make headlines, with pressure coming to reduce rates while the Fed has remained cautious on inflation concerns. The market now expects rate cuts in the coming months, but it may take some time for any rate relief to work through the industry and generate meaningful improvement in retail demand. Our new models introduced this time last year were well accepted in the market, and we are continuing to build on this demand. We're excited about our 2026 model year rollout, where we have made several portfolio-wide changes, also added some new products, and refreshed a number of our models. Our focus remains on investing in our brand's reputation and being thoughtful on how we are packaging and enhancing our offerings. We will continue to work closely with our dealers regarding channel inventory to maintain a healthy relationship as we have always done. Now, Mike will provide an overview of the financial results.