Hello, everyone, and welcome to the Johnson Outdoors First Quarter 2024 Earnings Conference Call. Today's call will be led by Helen Johnson-Leipold, Johnson Outdoors Chairman and Chief Executive Officer. Also on the call is David Johnson, Vice President and Chief Financial Officer. Prior to the question-and-answer session, all participants will be placed in a listen-only mode. After the prepared remarks, the question-and-answer session will begin. [Operator Instructions] This call is being recorded. Your participation implies consent to our recording this call. If you do not agree to these terms, simply drop off the line. I would now like to turn the call over to Pat Penman from Johnson Outdoors. Please go ahead, Ms. Penman.

Thank you. Good morning, and thank you for joining us for our discussion of Johnson Outdoors results for the 2024 fiscal first quarter. If you need a copy of today's news release, it is available on our website at johnsonoutdoors.com under investor relations. I also need to remind you that this conference call may contain forward-looking statements. These statements are made on the basis of our current views and assumptions and are not guarantees of future performance. Actual events may differ materially from those statements due to a number of factors, many beyond Johnson Outdoors control. These risks and uncertainties include those listed in our press release and filings with the Securities and Exchange Commission. If you have additional questions following the call, please contact Dave Johnson or myself. It is now my pleasure to turn the call over to Helen Johnson-Leipold.

Thanks, Pat. Good morning, everyone, and thank you for joining us. I'll begin with an overview of our first quarter results, then I'll share perspective on the performance and outlook for our businesses. Today, we'll review financial highlights, and then we'll take your questions. Sales in our first fiscal quarter ending December, 2023 declined 22% to $138.6 million compared to $178.3 million in the prior year first quarter. Net income for the quarter was $4 million, or $0.38 per diluted share, versus $5.9 million, or $0.57 per diluted share in the previous year's first quarter. Our first quarter results are significantly impacted by high inventory levels at retail and slower consumer demand. In this challenging marketplace, we are investing in consumer marketing programs to reinforce the strengths of our brands, support new product launches, and to stimulate increased demand. In addition, we are executing on a cost savings program and diligently managing expenses. Importantly, we continue to invest in innovation to bring consumers the best outdoor experience as possible. In fishing, while we are seeing headwinds in the marketplace, we're excited to see solid trade support behind Minn Kota's QUEST series, the all-new brushless trolling motor technology that we announced last fiscal year. Nonetheless, consumer behavior in season will be the critical factor. In our diving business, sales declined slightly compared to the prior year quarter, which reflected a strong recovery from the pandemic. In the current period, we have seen markets begin to normalize. Our Camping and Watercraft Recreation sales are down due to a continued decline in their markets from the elevated pandemic field demand of the past few years. In watercraft recreation, however, our Old Town sportsman line is outperforming competitors in a very depressed marketplace. The award-winning ePDL+ drive announced last year is the newest addition to the line. And in camping, we continue to work on leveraging Jeff Boyle's brand equity into expansive growth opportunities. As we head into the season, we expect the outdoor recreation marketplace will remain challenged with uncertainty in demand and retailers continuing to tightly manage their inventory levels. We will continue to execute on our cost savings programs, manage expenses, and focus on creating consumer focused innovation, investing in marketing to keep our brand strong so we can provide consumers with the best outdoor experience possible. Now, I'll turn the call over to Dave for more details on the financials.

Thank you, Helen. Good morning, everyone. I wanted to highlight a few items from the quarter. As Helen mentioned, first quarter sales results were significantly impacted by inventory dynamics at retail and lower consumer demand. The quarter's results also reflect a challenging comparison between quarters. During the first quarter of fiscal 2023, we were still filling a significant amount of backlog customer orders in our fishing business. We've been taking steps to strengthen our operating margins with an active cost savings program of prudent expense management. The quarter's gross margin of 38.1% is up 2.9 points from the prior year quarter, due primarily to reductions in material and freight costs. Operating expenses decreased 8% or $4.5 million versus the prior year quarter, due primarily to lower sales volumes. Additionally, $1.8 million of lower professional services expense was offset in part by $1.3 million of additional deferred compensation expense resulting from changes in market value of plan assets year over year. While operating profit fell $5.5 million from the prior year, pre-tax income was down $2.3 million in the current year quarter after gains on deferred compensation plan assets recognized in other income offset the impact of plan expense and operating expenses. Additionally, a $1.9 million gain on the sale of a building in the fishing segment further bolstered other income. Our inventory balance as of December was $267.3 million, up about $16 million from last year's December quarter. We have active plans in place to reduce our inventory levels throughout the balance of the year. Our balance sheet continues to have no debt and our cash position enables us to invest in opportunities to strengthen the business. We remain confident in our ability to deliver long-term value and consistently pay out cash dividends to our shareholders. Now I'll turn the call over to the operator for the Q&A session. Operator?

Thank you. [Operator Instructions] I'm showing no questions at this time. I would like to turn the call back to Helen Johnson-Leipold for closing remarks.

Thank you all for joining us today. I hope you have a good one. Thanks.

Thank you for your participation in today's conference. This does conclude the program. You may now disconnect. End of Q&A: