Good morning, and thank you for joining us for Marine Products Corporation's Second Quarter 2023 Financial Earnings Conference Call. Today's call will be hosted by Ben Palmer, President and CEO; and Mike Schmit, Chief Financial Officer; also hosting is Jim Landers, Vice President of Corporate Services. At this time all participants are in listen-only mode. Following the presentation, we will conduct the 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. Jim will get us started by reading the forward-looking disclaimer. Please go ahead.

Thank you, and good morning. Before we get started today, I'd like to remind everyone that some of the statements that we will make on this call may be forward-looking in nature and reflect a number of known and unknown risks. I'd like to refer you to our press release issued today, our 2022 Form 10-K, and other SEC filings that outline those risks, all of which are available on our website at marineproductscorp.com. If you've not received our press release, please visit our website. In today's earnings release and conference call, we will refer to EBITDA, which is a non-GAAP measure of operating performance. We use this non-GAAP measure because it allows us to compare performance consistently over various periods without regard to changes in our capital structure. We're also required to use EBITDA to report compliance with financial covenants under our revolving credit facility. Our press release issued this morning and our website contain a reconciliation of this non-GAAP financial measure to net income, which is the nearest GAAP financial measure. Please review this disclosure if you're interested in seeing how it's calculated. We'll make a few comments about this quarter, and then we'll be available for your questions. I'll turn the call over to our President and CEO, Ben Palmer.

Thank you, Jim, and thank you for joining our call this morning. I will begin with a few highlights regarding our second quarter 2023 earnings press release that was issued this morning. Marine Products Corporation generated strong net sales during the second quarter as we were able to ship a larger number of substantially completed boats in our inventory and deliver them to our dealers. We continue to see improvements in our supply chain compared to prior periods, although timely delivery of certain critical components remains challenging. Average selling prices increased compared to the prior year, primarily due to a favorable model mix at both Chaparral and Robalo and price increases to cover increased costs, including primarily materials and components. In addition, the increased unit shipments during the quarter allowed our dealers to begin building their inventory to return to a more typical ordering process. Dealer inventories are trending toward more normalized levels; however, inventory remains below pre-pandemic levels. We expect our unit production to begin trending towards sell-through demand over the coming quarters as dealers can routinely satisfy more demand out of inventory. We also announced this morning that our Board of Directors declared a regular quarterly cash dividend of $0.14 per share.

Thanks, Ben. I'll begin with an overview of the company's second quarter 2023 financial results. Net sales for the second quarter were $116.2 million, a 21% increase compared to the second quarter of last year. Unit sales increased by 11% and average selling prices increased by 10%. As Ben mentioned, these increases were driven by our ability to complete and ship a favorable mix of boats to satisfy dealer demand as we continue to see improvements in our supply chain compared to prior periods. Gross profit in the second quarter was $28.7 million, a 25% increase compared to the second quarter of 2022. The gross margin for the second quarter was 24.7%, a modest improvement over the 24% for the second quarter of last year as we saw some benefits from operating efficiencies and a favorable model mix. Selling, general and administrative expenses for the second quarter were $12.2 million, an increase of 23% compared to the $9.9 million in the second quarter of last year. Selling, general and administrative expenses were 10.5% of net sales in the second quarter, and they were 10.3% of net sales in the second quarter of last year. The slight increase is due to costs that typically increase with higher sales and profitability, such as incentive compensation, sales commissions, and warranty expense. EBITDA in the second quarter was $17.1 million, an increase of $3.5 million, or 26%, compared to the same quarter of last year. We reported quarterly net income of $14.3 million in the second quarter, a 44% increase compared to the $10 million in the second quarter of 2022. Diluted earnings per share were $0.42 in the second quarter compared to $0.29 in the second quarter of last year. The quarter results benefited from a lower effective tax rate primarily due to favorable permanent adjustments as well as the beneficial discrete adjustments. Our international sales, which accounted for approximately 7% of our total sales during the second quarter, increased 4% compared to the second quarter of last year. Our cash balance at the end of the second quarter was $66.2 million, a $3.6 million increase compared to the cash balance at the end of the first quarter of this year. Our improving cash balance is the result of profitable operating results and reduced working capital requirements, partially offset by recent capital expenditures. Dealer inventories are increasing towards more normalized levels but continue to be lower than pre-pandemic levels. These moderately higher inventories allow our dealers to meet current demand and purchase our 2024 models. The spring selling season was generally favorable but was impacted by a late start to the boating season caused by weather-related issues. Our dealers continue to be optimistic regarding the upcoming model year, but are aware of concerns over potential headwinds from consumer confidence resulting from higher interest rates and the possibility of an economic slowdown.

Thanks, Mike. Our market share remains strong. I am very pleased to report that this quarter, based on the latest statistical survey data, the Chaparral sterndrive market share reached number one in its size category. In addition, the combination of Chaparral and Robalo's outboards held the third highest market share in their size category. Together with our dealers, we are pleased with our recently introduced 2024 models. They were designed to appeal to the retail customer as well as allow us to produce them efficiently and with good quality. We are aware that retail boat sales compared to the prior year are adjusting to normalized levels, and we plan to modify our production as necessary to appropriately balance dealer and retail demand. We believe that we have some of the healthiest dealer inventories and backlogs in our industry right now. And with the help of our dedicated dealer network, we tend to experience some of the consistently best inventory turns in the recreational boat business. We are prepared for whatever market conditions unfold in the next few months. I'd like to thank you for joining us this morning, and we'll be happy to take any questions as you have.

There are no questions at this time. I'd like to transfer the call back over to Jim Landers for closing remarks.

Thank you, and thank you for everybody who called to listen in this morning. We hope you have a good day, and we will talk to you soon.

This concludes today's conference call. You may now disconnect.