00:07 Good morning and thank you for joining us for Marine Products Corporation’s Fourth Quarter and Year-End 2021 Financial Earnings Conference Call. Today's call will be hosted by Rick Hubbell, President and CEO; and Ben Palmer, Chief Financial Officer. Also present is Jim Landers, Vice President of Corporate Services. 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 call is being recorded. 00:43 Jim will get us started by reading the forward-looking disclaimer.

00:49 Thank you, April. 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 20202 10-K and other SEC filings that outline those risks. All of these are available on our website at marineproductscorp.com. 01:14 Also in today's earnings release and conference call we'll 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. Our press release issued today in 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 is calculated. If you have not received our press release, 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. 01:55 Now, I'll turn the call over to our President and CEO, Rick Hubbell.

02:00 Jim, thank you. Excuse me. We issued our earnings press release for the fourth quarter of 2021 this morning. Ben Palmer, our CFO will discuss the financial results in more detail in a moment. Now, a few highlights for the quarter. 02:16 Marine Products Corporation's fourth quarter 2021 results reflect the strength and appeal of our 2022 model lineup. Model year prices increased and an improved model mix generated a 7.6% increase in net sales compared to the fourth quarter of 2020. 02:37 Dealer and consumer demand once again exceeded -- extended beyond the traditional selling season for recreational boats. But our retail sales did not reflect the continuation of this positive trend, because supply chain problems curtailed our production and deliveries. The updated market share statistics for the 12 months ended September 30, 2021 indicates that the combination of Robalo and Chaparral outboard had a market share of 6.3%, the highest in the 18 to 36 foot outboard category. While the Robalo brand holding the second highest market share in this category. 03:20 Chaparral held a market share of 19.4% in the 20 to 34 foot sterndrive category, which is the second highest in this category. We also announced this morning that our Board of Directors declared a quarterly cash dividend of $0.12 per share. And I'm also pleased to report record 2021 net income of over $29 million or $0.85 diluted earnings per share. 03:50 With that overview, I will turn it over to our CFO, Ben Palmer.

03:55 Thanks, Rick. Net sales for the fourth quarter of 2021 were $76.5 million, 7.6% increase compared to the fourth quarter of last year. Average selling prices increased by 21.1% due to model year price increases and a continued shift in model mix toward larger boats. 04:14 Unit sales decreased by 11.1%, however, supply chain problems and workforce issues impacted our production scheduling. Gross profit in the fourth quarter was $19.2 million, a 9.9% increase compared to fourth quarter of 2020. Gross margin during the quarter increased to 25% compared to 24.5% in the fourth quarter of 2020. Gross margin improved due to 2022 model year price increases and a model mix comprised of larger boats. 04:47 Selling, general and administrative expenses were $8.5 million in the fourth quarter of 2021, a slight increase of $149,000 compared to $8.3 million in the fourth quarter of last year. EBITDA in the fourth quarter was $11.1 million, an increase of $1.6 million or 16.8% compared to the fourth quarter of 2021. 05:10 For the quarter ended December 31, 2021 we reported net income of $8.4 million, a 20.8% increase compared to $7 million in the fourth quarter of 2020. Diluted earnings per share were $0.25 compared to $0.21 diluted earnings per share in the fourth quarter of last year. 05:33 Our effective tax rate during the fourth quarter was 20.7% compared to 23.1% in the fourth quarter of last year. We projected full year 2022 effective tax rate of approximately 20%. Our international sales accounted for 6.6% of total sales, representing a 20% increase compared to the fourth quarter of last year. Sales to our Canadian dealers increased significantly, but sales were flat over -- year-over-year in other international markets. 6:07 For the 12 months ended December 31, 2021, our net sales…

07:45 Ben, thanks. Although most winter boat shows were canceled this year, we still see many indications that the increased consumer demand that we began to see almost 2 years ago is continuing well past the 2022 model year. 08:02 At this point we are allocating production slots to dealers for 2023 model year and doing everything we can to meet dealer and consumer demand. We also believe that our current production bottlenecks are transitory and we believe they will be resolved this year. 08:22 We are very pleased by our dealers and consumers reception of the 2022 models. One that we would like to highlight this morning is our Chaparral 287 SSX. This (ph) certified open cockpit bowrider provides spacious passenger areas and versatile seating configuration. The helm features a touchscreen glass dash and state-of-the-art electronics. Though it is agile and fast with sterndrive power options ranging from 350 horsepower to 430 horsepower. The infinity power step, which provides effort less access into the water for everyone in the families come standard on this model. We look forward to producing this and other 2022 models as the year proceeds. 09:18 During this era of high -- enduring high demand and unprecedented challenges, we want to thank our employees for taking steps to safeguard their personal well-being and come to work every day to build quality products. We also appreciate our dealers who have become very innovative over the past 2 years and continue to serve as wonderful ambassadors to our retail customers. 09:45 I'd like to thank you for joining us this morning, and we'll be happy to take any questions you may have.

09:53 Your first question is from Fred Whiteman with Wolfe Research.

10:10 Hey guys, good morning. Thanks for taking the question. I was hoping you could just build out on the comments as far as the supply chain and labor disruption in the quarter. Have you seen any signs of that easing? And if you could just sort of explain on the supply chain front where you're seeing the most pressure?

10:28 Hey, Fred, it's Jim. Thanks for calling in. So in the fourth quarter the labor issues were more indirect than the component supply chain issues as so many of our vendors and suppliers had problems with the labor force. Because of the COVID surge we are seeing that in our plant in -- early in the first quarter. We've done a lot as we alluded to with on-site testing and on-site vaccination. So we're proud of that. But it's still an issue as it is for everybody. 11:01 Regarding actual components and various things. You and I've discussed this before, it just kind of moves around, it's a different issue every week. Luckily issues do get resolved but then others pop up. I mean, earlier in the 2021 engines were a big problem. But now we're fine on engines. We've had a problem often on with our very valued windshield supplier, those issues kind of come and go. We've also had problems with some of the more basic raw materials like gel coat and some of the resins that we use. 11:40 So those all sort of come and go. And unfortunately what they've done is, forced us to partially or mostly complete boats and wait for that final component. So if you ask us this week, we will tell you one thing, if you ask this next week, we will tell you that maybe this week's issue was resolved, but there is perhaps a new one. We do think these issues overall are going to get ironed out this year, but it's been tough going in the past number of months.

12:10 Okay, that's fair. And there was a comment, I think it was in the release, just talking about production impact continuing into 1Q. Is the message that you think it will improve in 2Q or it's just at some point this year. Maybe it's in the back half sort of tough to predict, you think it will improve?

12:29 Yeah. Fred, this is Ben. I think that's right. It's difficult to predict. We're just hopeful with everybody throughout the supply channel focused on trying to resolve the issue that hopefully will get to the point or get better. I expect there'll be some lingering problems, but hopefully it will get ironed out, smoothed out and get back to a little more normal activity and planning.

12:52 Sure. Okay. Totally fair. And then I guess the last one. If you think about some of that production uncertainty and totally understand that it's tough to predict when that's going to normalize. Any signs or concerns as far as consumers that are in that backlog pushing back on sort of the delivery horizons or people getting concerned that they might not get delivery ahead of the summer and thinking about other options, any sort of signs that the backlog is being impacted from some of these disruptions?

13:22 Very appropriate question, but no signs there is any push back from customers or concern or delays, but there are significant lead times that are in place that would be difficult to predict, because there -- but there is a lot of demand at the retail level, deposits being put down which done impact us directly, right? Because that's at the dealer level. But we know there is very, very strong demand and everybody is looking for as many votes to be delivered as possible and we're trying to meet as much of that demand as we can, but we are too focused on trying to maintain our quality, right? 14:06 And so we do believe that it will improve, but as we had indicated also in our comments, or in the release that we're beginning even to take orders or allocate production slots even into the ‘23 model year, so people are -- there patients level is good and their desire for a new boat is very, very strong. So the fairway is very long and wide. So we're pleased with that. 14:39 And again, looking forward to some supply chain issues getting worked out so that we can increase production and smooth things out a bit and begin to meet some of that demand more quickly.

14:52 Great. Thanks so much guys.

14:54 Thanks, Fred.

14:56 And there are no further questions at this time. I will now turn the call back over to Jim for closing remarks.

15:15 Thank you, April. We appreciate everybody who called in and listened. We hope everyone has a good day. We look forward to talking to you soon. Thanks.

15:26 This concludes today's call. This conference call will be replayed on marineproductscorp.com within 2 hours following the completion of the call. Thank you for participating. You may now disconnect