Good morning and thank you for joining us for Marine Products Corporation's Second Quarter 2025 Earnings Conference Call. Today's call will be hosted by Ben Palmer, President and CEO; and Mike Schmit, Chief Financial Officer. I would like to advise everyone that this conference call is being recorded. I will now turn the call over to Mr. Schmit.

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, and 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 that 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 regarding 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 an 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 are excited about our 2026 model year rollout, where we have made several portfolio-wide changes, added some new products, and refreshed a number of our models. Our focus remains on investing in our brand's reputation and being thoughtful about 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.

Thanks, Ben. Our second quarter financial results with comparison to the second quarter of 2024 are as follows: Sales were down 3% to $67.7 million, driven by a 13% decrease in the number of boats sold, partially offset by a positive 10% net increase in price and mix. We note that quarterly sales have been stabilizing over the past few quarters as evidenced by the 15% sales increase over the first quarter of this year. We see potential to deliver sales growth versus the prior year in the second half of 2025. Gross profit decreased to $12.9 million, although our gross profit margin percentage of 19.1% was up 20 basis points from the prior year. Our increase in the gross margin percentage versus the prior year was due to better alignment of our cost structure with current production needs, combined with the benefit from the increase in price and mix. SG&A expenses were $8.1 million in the quarter, up 9% or $0.7 million compared to last year's second quarter. SG&A as a percentage of sales was 12%, up 130 basis points compared to the second quarter of last year due to modestly higher R&D, advertising and the timing of some incentive-based accruals. Our tax rate was 21.3% in the quarter and is likely to be slightly higher than that for the remainder of the year. Diluted EPS was $0.12 in the second quarter, down from $0.14 last year. EBITDA was $5.6 million, down from $6.5 million last year. Year-to-date, we have generated operating cash flow of $9.2 million and free cash flow of $8.6 million. CapEx was only $400,000 during the quarter. And while we expect lower CapEx this year compared to last year, it will likely pick up in the second half of the year and track between $2 million and $3 million for the year. We paid $9.8 million in dividends year-to-date through the second quarter of 2025. And we finished the second quarter with $50 million of cash and no debt. I'll now turn it back over to Ben for a few closing remarks.

Thank you, Mike. The marine industry continues to work through the challenging environment. However, we are excited about our 2026 model year, which we announced to our dealers in June, and we will demonstrate these models to our dealers at our August dealer meeting. We continue to evaluate acquisition opportunities and other partnerships to enhance the marine products portfolio. We believe our balance sheet and operational approach make us a buyer of choice for high-quality assets. In closing, I want to thank our dealers for their continued collaboration and support, and our employees for their dedication and hard work. That concludes our prepared remarks. And with that, operator, please open the line for any questions.

There are no questions at this time. I will now turn the call back over to Ben Palmer for closing remarks.

Appreciate everybody coming on and listening, and hope you have a good day and hope to talk soon. Take care.

This concludes today's call. A replay of today's events will be available at marineproductscorp.com within 2 hours following the completion of the call. Thank you all for joining. You may now disconnect.