00:05 Good morning and thank you for joining us for Marine Products Corporation’s Third Quarter twenty twenty one Financial Earnings Conference Call. Today’s call will be hosted by Rick Hubbell, President and CEO; and Ben Palmer, Chief Financial Officer. Also presenting for today is Jim Landers, Vice President of Corporate Services. 00:32 At this time, all participants are in a 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 is being recorded. 00:49 Jim will get us started by reading the forward-looking disclaimer. Sir, please go ahead.

00:57 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 twenty twenty ten K and other SEC filings that outline those risks. All of these are available on our website at marineproductscorp.com. 01:21 Also in today's earnings release and conference call, we 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. 01:38 Our press release issued today and our website contain a reconciliation of this non-GAAP financial measure net income, which is the nearest GAAP financial measure. Please review this disclosure, if you're interested in seeing how it is calculated. If you have not received our press release, and would like one please visit our website again at marineproductscorp.com. for a copy. We will make a few comments about the quarter and then we'll be available for your questions. 02:02 Now, I'll turn the call over to our President and CEO, Rick Hubbell.

02:06 Jim, thanks. We issued our earnings press release for the third quarter of twenty twenty one this morning. Ben Palmer, our CFO will discuss the financial results in more detail in a moment. 02:18 Now a few highlights on the quarter. Marine Products Corporation's third quarter twenty twenty one results reflect both high demand for our products and continued supply chain challenges, which prevented us from shipping as many boats as we had planned. 02:38 As we experienced in twenty twenty, retail and dealer demand continued beyond the traditional selling season for recreational boats. As a result of these challenges, we cut production during the third quarter. In spite of this cut, we increased unit sales to our dealers during the period by five point three percent, compared to the third quarter of twenty twenty. 03:08 Average selling prices increased slightly during the quarter, due to a favorable model mix, but this increase was less than it might have been because we honored prior model year pricing for the vast majority of our shipments during the quarter. 03:25 The recently reported market share statistics for the twelve months ended June thirty, twenty twenty one indicates that Robalo continues to hold the highest market share in the sixteen to thirty six foot outboard category. Chaparral also holds leading market share among its peers who manufacture both sterndrive and outboard boats. We also announced this warning that our Board of Directors declared a regular quarterly dividend of zero point one two dollars per share. 03:59 With that overview, I'll now turn it over to our CFO, Ben Palmer.

04:04 Thank you, Rick. Net sales for the third quarter of twenty twenty one were seventy five point eight million, a ten point three percent increase compared to the third quarter of last year. Unit sales increased by five point three percent during the quarter. Average selling prices increased by slightly more than one percent due to a model mix, which included larger boats. 04:28 Net sales also improved during the quarter because of lower incentive cost, due to higher demand and shipments to dealers during the quarter of prior [back ordered engine] [ph]. 04:39 Gross profit in the third quarter was sixteen million, a slight decrease compared to the third quarter of twenty twenty. Gross margin during the quarter decreased to twenty one point two percent, compared to twenty three point six percent in the third quarter of twenty twenty. Gross margin as a percentage of net sales declined due to higher raw materials and component costs, as well as the accompanying higher freight costs. 05:04 Supply chain disruptions also impacted operations during the quarter, which resulted in labor cost and inefficiencies. Selling, general and administrative expenses were seven point seven million in the third quarter of twenty twenty one, a slight decrease of one hundred and eighty five thousand compared to seven point nine million in the third quarter of last year. 05:26 EBITDA in the third quarters of both twenty twenty one and twenty twenty was eight point eight million. For the quarter ended September thirty, twenty twenty one, we reported net income of six point seven million, approximately the same as net income of six point five million in the third quarter of twenty twenty. 05:45 Diluted earnings per share were zero point two zero dollars in the third quarter of twenty twenty one, compared to…

07:22 Thank you, Ben. Along with the rest of the recreational boating industry and any manufacturer that relies on an extensive supply chain, we are experiencing unprecedented disruptions in our manufacturing processes, which are negatively impacting our sales and profitability. 07:41 I am pleased to let you know that several of these critical bottlenecks have eased and our labor efficiencies are improving. We also continue to coordinate our suppliers’ delivery schedules and our own production schedules so that we can optimize our efficiencies, while meeting as much of this continued unprecedented demand as possible. 08:04 We honored existing agreements with dealers and retail customers during the third quarter by fulfilling remaining twenty twenty one model year orders. As we enter the fourth quarter, we are shipping almost exclusively twenty twenty two model year boats reflecting model year price increases. 08:25 Also, the twenty twenty two model year lineup up has larger average sizes and is more streamlined to improve manufacturing efficiencies. The selling price increases and portfolio changes should serve as a catalyst for improving financial results. 08:46 We are approaching the twenty twenty two winter boat show season and are monitoring which in-person shows will take place. We are dedicated to maintaining a strong presence in this important part of the retail selling season, as well as continuing to develop innovative marketing efforts to keep our brands images in front of our customers. 09:10 I'd like to thank you for joining us this morning we'd be happy to take any questions you may have.

10:07 Thank you everyone for joining us. Have a good day.