[Call Started Abruptly] Ben Palmer, President and CEO; and Mike Schmit, Chief Financial Officer. Also hosting is Jim Landers, Vice President of Corporate Services. [Operator Instructions] I would like to advise everyone that this conference call is being recorded. Jim will get us started by reading the forward-looking disclaimer.

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 2021 10-K and other SEC filings that outline those risks, all of which are available on our website at marineproductscorp.com. 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. Our press release issued today 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. If you've not received our press release, please visit our website, again at marineproductscorp.com for a copy. We'll make a few comments about this quarter, and then we'll be available for your questions. I will turn the call over to our new President and CEO, Ben Palmer.

Jim, thanks, and thank you all for joining our call this morning. As Jim mentioned, I'm pleased to take on the new role as President and CEO of Marine Products Corporation. During the second quarter, Rick Hubbell was named Executive Chairman of the Board of Directors and will remain active with the company. We also welcome Mike Schmit, our new CFO, to our corporate management team. Together, we will work with our outstanding operational team at Chaparral and Robalo and continue the tradition of managing Marine Products Corporation in a conservative shareholder-friendly manner. Let me begin with just a few highlights regarding our second quarter 2022 earnings press release that was issued this morning. Marine Products Corporation's sales unit volume increased by 15% during the second quarter of 2022 compared to the prior year. We operated throughout the second quarter, in contrast to the second quarter of 2021 when our manufacturing facility was briefly shut down because of raw material shortages. Some of our supply chain issues have recently improved, but our production and timing of boat shipments continues to be impacted by sporadic and unpredictable shortages of critical components. Average selling prices increased by 22% due to price increases implemented to cover higher materials and components costs as well as model mix that has migrated towards larger boats in response to changes in demand. Backlog of actual orders plus order indications from dealers remain at historic highs and dealer inventories remain extremely low. The updated market share statistics for the 12 months ended March 31, 2022, indicate that the combination of Robalo and Chaparral outboards in the 18 to 36-foot category had a market share of 6.1%. With the Robalo brand holding the third highest market share in this category, Chaparral held a market share of 19.7% in the 21 to 34-foot sterndrive category, which was the second highest in this category. We also announced this morning that our Board of Directors declared a regular quarterly cash dividend of $0.12 per share. And with that overview, I'd like to introduce our new CFO, Mike Schmit.

Thanks, Ben. I'm very pleased to be part of Marine Products Corporation and excited for the opportunity to contribute to the company's success. Let's start with an overview of the company's second quarter 2022 financial results. Net sales for the second quarter of 2022 were $95.8 million, a 42% increase compared to the second quarter of last year. As Ben mentioned, average selling prices increased by 22% due to model price increases in response to supplier cost increases and a shift in model mix. Also our unit sales increased by 15%. The parts and accessories sales were also higher in the second quarter of 2022 compared to the second quarter of last year. Gross profit for the second quarter was $23 million, a 57% increase compared to the second quarter of 2021. Gross margin during the quarter increased to 24% compared to 22% in the second quarter of last year. Gross margin as a percentage of net sales improved primarily due to model mix comprised of larger boats. Selling and general administrative expenses were $9.9 million or 10% of net sales in the second quarter of 2022, an increase of 36% compared to $7.2 million or 11% of net sales in the second quarter of last year. These expenses increased due to costs that vary with sales and profitability, such as incentive compensation, sales commissions and warranty expenses. EBITDA in the second quarter of 2022 was $13.6 million, an increase of $5.8 million or 74% compared to the second quarter of 2021. For the quarter ended June 30, 2022, we reported net income of $10 million, a 72% increase compared to $5.8 million in the second quarter of 2021. Diluted earnings per share were $0.29 compared to $0.17 diluted earnings per share in the second quarter of last year. Our international sales accounted for 8.1% of total sales, representing a 125% increase compared to the second quarter of last year. Sales to our Canadian dealers improved modestly, while sales to other international markets doubled. Our cash balance at the end of the second quarter was $21.6 million, a $7.5 million increase compared to the cash balance at the end of 2021. The increase in cash since the end of 2021 is due to the sales growth and profitability, partially offset by increases in working capital requirements required to support slightly higher production while supply chain disruptions continue to negatively impact timing of our boat shipments. Dealer inventories continue to be at historically lows and are lower now than they were at the end of the first quarter of 2022 and lower than the second quarter of 2021. Order backlog and other indications of demand remain at historically high levels. I'll now turn it back over to Ben for a few closing remarks.

Thank you, Mike. As we have discussed this morning, the metrics we use to manage our business remain at historically strong levels, and we continue to believe that we are experiencing a secular change in consumer preferences for recreational boats. We are also aware that within this larger trend, there are short-term concerns regarding rising interest rates and an economic slowdown, both of which typically impacts consumer discretionary spending, including purchases of recreational products. However, we also believe that a short-term decrease in consumer demand will not have an immediate impact on our financial results because even at a lower level of demand continues to exceed our industry's capacity to meet that demand. We expect supply chain issues to improve over the next few quarters, which will allow us the ability to ship more boats than we are producing, which will generate additional profits and cash. Thank you for joining us this morning, and we'll be happy to take any questions you have.

[Operator Instructions] Your first question comes from the line of Fred Wightman from Wolfe Research. Your line is open.

Hi guys, good morning. Thanks for the question. I was hoping you could maybe just give a little bit more retail color? I know that you guys mentioned that you're watching for signs of higher interest rates or the uncertain macro impacting sort of forward demand. But is there anything that you're seeing more recently sort of in the market that suggests that consumers are a bit more cautious? Or are you just sort of flagging that as a potential concern down the road?

Fred, this is Jim. Good morning. More of the latter, just sort of a feeling that higher interest rates and fears of a recession, there might be a slowdown in demand. I would point out that our range of ASPs is very wide. And what you do see sometimes would say higher interest rates that would cause financing cost to be higher is that people migrate perhaps to smaller boats, and they also use less fuel. So that's one thing that we might see. But we honestly have not really seen anything yet, maybe a decrease in the rate of increase, but that's about it. But nothing to plug at this point.

Fred, I agree. This is Ben. I think we're just, as you said, calling it out, we're aware of it. We have not, at this point, adjusted any of our production rates or anything like that. Everybody, all of our dealers, many consumers, they're still very strong demand. So we're just making sure that we remain aware of it, and we'll react to it when we feel that's appropriate.

Perfect. And then just on the supply chain, it sounds like you guys are a little bit better than maybe you were last quarter, but there are still some lingering issues. Anything you could share about sort of when you started to see some improvement? Where that's trending sort of this quarter? And I think last quarter, you also talked about some issues on the driver shortage front. So any update there would be great.

Yes. Again, this is Ben. Yes, we focused, in particular, on the issue of trying to get boats delivered to dealers, and we appreciate many of our dealers have also helped come in and picking up some boats. So it's been a good team effort in that regard. And so we did make some progress during the second quarter, but it continues to be an issue and something that we'll have to focus on. With respect to material and component shortages, I think they're just -- there are examples where we feel that it's getting somewhat better, but it continues to be a lingering issue, but we're just hopeful. And there are some signs that suppliers are working through some of their issues and perhaps we'll be able to work our inventory down a little quicker here in the coming quarters.

Perfect. And then just the last one on the ASP increase. Any way that you could sort of give us a broad sense of how much of that was price versus the mix benefit?

Much more of the margin improvement was from the shift in model mix. The average selling price is up again, it's up a lot and -- but that's in response to the increase in costs. So it's more model mix.

Great. Thank you.

Thanks Fred.

[Operator Instructions] And there are no further questions at this time. Mr. Jim Landers, I turn the call back over to you for some closing remarks.

Thank you, Rob. And Fred, thanks for the question, and thanks to everybody else who called in and listened, Hope you have a good day, and look forward to talking to you soon.

This concludes today's conference call. Today's conference call will be replayed on marineproductscorp.com within 2 hours following the completion of the call. You may now disconnect.