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Good morning and thank you for joining us for Marine Products Corporation's Third Quarter 2023 Financial Earnings Conference Call. Today's call will be hosted by 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. Mike will get us started by reading the forward-looking disclaimer. Please go ahead.

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 2022 Form 10-K and other SEC filings that outline those risks, all of which are available on our website, at marineproductscorp.com. If you have not received our press release, please visit our website. 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. We are also required to use EBITDA to report compliance with our financial covenants under our revolving credit facility. Our press release issued this morning 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. We'll make a few comments about this quarter and then be available for your questions. I'll now turn the call over to our President and CEO, Ben Palmer.

Thank you, Mike and thank you all for joining our call this morning. I'll begin with a few highlights regarding our third quarter 2023 earnings press release that was issued this morning. Marine Products Corporation's third quarter results reflect a reduction in boat deliveries to dealers compared to the prior year that approximate our new production rates. The decreased production corresponds to the normalization of retail boat demand that has occurred during 2023 following the significant post-COVID demand. Our dealers expressed continued optimism at our recent annual dealer conference, bolstered by the launch of our new 2024 models. They did, however, note some concerns about potential economic slowdown and the impact of higher interest rates. On a positive note, supply chains continued to improve from earlier this year but certain components remain challenging. During the quarter, our dealers continued to rebuild their inventories, trending to more normalized levels and we have asked them to return to a more typical ordering process to assist us in scheduling our production. Dealer inventory of Chaparral and Robalo models remains healthy and below pre-pandemic levels. We expect to manage our production to approximate retail demand over the coming quarters, so dealers are able to service demand out of planned inventory. We also announced this morning that our Board of Directors declared a regular quarterly cash dividend of $0.14 per share. And with that overview, I'll now turn it back over to Mike Schmit, our CFO.

Thanks, Ben. I'll begin with an overview of the company's third quarter 2023 financial results. Net sales for the third quarter were $77.8 million, a 22% decrease compared to the third quarter of last year. Unit sales decreased by about 24%. Average selling price per boat increased by approximately 5% versus the prior year, primarily due to favorable model mix and to a lesser extent, price increases to cover higher costs of materials and components. Production and sales were negatively impacted by about 3 days during the third quarter due to Hurricane Idalia. Gross profit in the third quarter was $19.2 million, a 23% decrease compared to the third quarter of 2022. The gross margin for the third quarter was 24.7%, a slight decrease over the 25% for the third quarter of last year. Selling, general and administrative expenses were $8.8 million in the third quarter of 2023 compared to $10.3 million in the third quarter of last year. These expenses decreased due to costs that vary with sales and profitability, such as incentive compensation, sales commissions and warranty expense. We also recorded a net gain on disposition of assets of $2 million during the quarter which included $1.8 million related to a real estate transaction. EBITDA in the third quarter was $13 million, a 14% decrease compared to $15.2 million in the third quarter of 2022. EBITDA, as a percentage of net sales was 16.7% in the third quarter of 2023 compared to 15.1% in the prior year. We generated net income of $10.4 million in the third quarter, a 9% decrease compared to $11.5 million in the third quarter of 2022. Diluted earnings per share were $0.30 in the third quarter compared to $0.34 in the third quarter of last year. Our international sales which accounted for approximately 6% of our total sales during the third quarter decreased by 12% compared to the third quarter of last year. As Ben mentioned, our dealer inventories are increasing toward more normalized levels and continue to be lower than pre-pandemic levels. These moderately higher inventories have allowed our dealers to meet current demand as well as purchase our 2024 models. I'll now turn it back over to Ben for a few closing remarks. Thanks.

Our market share remains strong. I'm very pleased to report that the most recently reported data indicates that Chaparral sterndrive market share was number two in its size category. In addition, the combination of Chaparral and Robalo outboards hold the third highest market share in their size category. We received very positive feedback on our new 2024 models from our dealers. They are designed to appeal to the retail customer while allowing us to efficiently produce high-quality boats. Our new Chaparral 267 SSX will be featured on the upcoming cover of Boating Magazine. We, like our dealers, see additional uncertainty in the market over the coming quarters but our field inventory remains healthy and backlog support our current production schedule into 2024. I'd like to thank you for joining us this morning. We'll be happy to take any questions you have.

Brandon, this is Jim. Maybe I can kick off with an answer there. The past 30 days have not been very different from the past few months probably. People are a little bit concerned about interest rates. The economic slowdown issue is always a discussion but it's just a seasonally slow time of the year. Our dealers, as everybody has mentioned, have been cautious. They haven't cancelled any orders but they're asking us to slow down a little bit. Part of that is interest rates on their part. They're carrying costs for inventory are higher than they were. So that is a -- that order and delivery period has just extended a little bit. I don't know anyone else has anything to add.

We don't have complete visibility into our dealers' total inventory, right? They don't readily share that with us. And certainly, the floor plan providers don't either. I would say that the average cost of boats is certainly up from pre-pandemic. For us, that's a combination of we're building and dealers are taking and ordering larger boats. So that tends to increase, obviously, the average selling price. And also just do with the cost of components and so forth that's increased in the last 2 or 3 years. So, I would -- it's up to the floor plan providers to determine the level of financing they're going to provide the dealers. So I don't really -- I'm not aware of exactly what their dollar inventory levels are but that certainly at some level, maybe produces a little bit of headwind from the financing companies perspective. They want to -- they're thinking more about dollars, of course, than they are numbers of units to your point.

Well, I would say really all of them, we attend our -- we have our salesmen are in all of the boat shows and certainly all the major boat shows and our management team attends many of the major boat shows. So -- and we regularly review how those sales are going and retail attitudes. So it will be each and every one. We'll -- that's very key to us and the industry to have a good pulse on what's happening and where we feel demand is. And certainly, that influences how we design our incentive programs and how we set our production rates. So it's a great question and we're interested in all of them.

[Operator Instructions] It appears there are no further questions. I will turn the call back over to Mike Schmit for closing remarks.

All right. Well, I just want to thank everyone for joining our call today and we'll now end the call. Thank you very much.