We proactively created a sense of urgency by increasing the level of discounting on certain models. While these pricing incentives were successful in driving record revenue in December and in the quarter, they also resulted in lower gross margins and profit. A primary reason was that in many cases, we moved faster than our manufacturing partners and before receiving a broader level of incentive support. We did so to get ahead of the early boat shows in the spring selling season and to drive inventory to a more balanced position. Our actions improved our inventory, created more liquidity for growth and allowed us to grow our customer base and market share ahead of the Boat Show season. Today, most of the manufacturers have adjusted their incentive programs.

They are supporting the retail channel with seasonal marketing programs, including participation and support at the major boat shows. On the expense side, we're making progress in capturing additional cost synergies from acquisitions made over the past few years. We've also reduced resources, including team members in manufacturing and certain other areas of the business that do not directly impact the customer experience. Although our core operating expense profile is improving, we did incur increases in a few items like health insurance, which Mike will discuss. Although boat margins adversely impact our overall results, our other businesses continued to perform relatively well, allowing gross margins to remain well above average on a historical basis.

IGY saw a solid start on the Caribbean yachting season. Our super yacht operations, Fraser Northrop & Johnson performed on target. And although Intrepid and Cruisers Yachts are not immune to the short-term challenges facing the industry, those experienced teams are taking appropriate action to help ensure supply and production are aligned with demand. Additionally, both organizations continue to invest in new product development. This month, we announced the planned acquisition of Williams Tenders USA. Williams is the sole distributor in the United States and the Caribbean for the leading brand of rigid inflatable jet tenders for the luxury yacht market. This transaction is consistent with a key component of our growth strategy to acquire high-quality businesses that improve our margin profile and deepen our customer relationships.

Williams Jet Tenders are currently marketed in 20 locations across the United States. Over time, there is ample opportunity to increase the reach of the product and grow its revenue while staying true to the high level of service and experiences its customer base is accustomed to. The growth of the yacht and luxury yacht markets is a positive for our business and Williams is perfectly positioned to capitalize on such growth as well. We are looking forward to welcoming the Williams team to our operation once the transaction is completed. I am also pleased to announce that we have launched a marine service technician apprenticeship program in Florida, which is an expansion of a program we started many years ago. Through this initiative, we hope to improve marine industry skill development and provide valuable opportunities for aspiring technician.

We're grateful to the Florida Department of Education, which provided an initial grant to support the implementation of this program. With weaker-than-expected retail activity, the focus on the digital investments we've made over the past few years, including world-class marketing tools as well as Boatyard and Boatzon enabled our successful push in the smallest month of the year, December. We believe that our investments will continue to allow us to take market share as we advance through the rest of this year. Our team continues to do an outstanding job keeping our customers happy. We have sold and delivered many thousands of boats over the years, and our team continues to rise to the challenge of providing excellent customer service. Measured through Net Promoter Score, our customer surveys continue to produce record results.

It's the proactive nature of the team and the culture at MarineMax, which allows us to win in the marketplace today and in the future. We will continue to invest in excellent customer service, which is the key to long-term growth. And with that, I'll turn the call over to Mike for a financial recap. Mike?

Michael McLamb: Thank you, Brett. Before we discuss the financial details, I also want to thank our team, their hard work and commitment to help drive a strong close to the quarter. The quarter appeared to start on track but grew more sluggish for certain segments of the industry. We reached out to our various manufacturing partners about launching or enhancing more targeted and, in some cases, larger incentives to help stimulate more urgency and reasons to buy. As they work to develop their plans, we launched our own initiatives, which were quite successful in driving sales and reducing select inventory where desired. Overall, we grew revenue 4% to $527 million, primarily from same-store sales growth. Our same-store sales growth was driven by a modest increase in units and the rest by an increase in our average unit selling price.

We drove strong performance in both new and used boat sales right through the New Year's holiday, which is unusual, normally between seasonality and vacations, business drops off around the holidays. Gross profit was $175 million and gross margin was 33.3%. While we expected it would be down year-over-year, our actions to stimulate demand resulted in a larger decline. As Brett noted, most, if not all manufacturers have now increased our implemented programs for the boat show season. SG&A expenses remained flat as a percentage of revenue. But when adding back unusual items noted in the reconciliation of adjusted net income, SG&A was modestly elevated. For the second consecutive quarter, the largest outlier was our health care costs, which were unusually high of over $3 million.

Like most companies, we are self-insured, and we have had a number of unfortunate claims. The last time we had a spike of this magnitude occurred about 7 years ago, and as it did then, we expect this unusual spike to subside. As Brett discussed, our focused centers on capturing additional synergies and enhancing the earnings potential embedded in the acquisitions we have completed over the past several years. One area of synergy is SG&A, where we believe we can generate further cost savings in areas that do not compromise the customer experience. Primarily, we are focused on streamlining and reducing the redundancy which can occur through mergers in areas such as accounting, payroll, vendor consolidation and other back-office activities. Our actions take some time to implement, but we are making great progress and are already seeing some of the early benefits.

Beyond SG&A, we are all developing processes to better able to sharing of best practices and information, which we believe will drive better overall performance. Interest expense increased primarily due to higher inventory, especially earlier in the quarter. Our floor plan interest in the quarter was over $10 million versus about $3 million last year. On the bottom line, GAAP net income was about $1 million or $0.04 per diluted share compared with net income of $20 million or $0.89 per diluted share last year. Adjusted net income was over $4 million or $0.19 per diluted share compared with adjusted net income of $27 million or $1.24 per diluted share last year. The year-over-year decline is primarily due to lower gross profit and higher floorplan interest expense.

Adjusted EBITDA for the quarter was about $27 million compared with $53 million last year. Moving on to the balance sheet, we ended the quarter with more than $210 million in cash. Inventories increased to $876 million, which, as expected, was up modestly from September. On a same-store basis, unit inventories are over 20% below 2019 levels. Looking at liabilities, our short-term borrowings, which is our floor plan financing, were up primarily due to increased inventories and the timing of payments. Customer deposits modestly decreased from the September quarter as expected, but on a historical basis, customer deposits remain in a good position as we head into the seasonal selling period. Our liquidity position remains strong. At quarter end, debt to EBITDA net of cash was less than 1, and we have additional liquidity in the form of unlevered inventory plus available lines of credit that totaled close to $200 million.

Turning to guidance based on our year-to-date results, we are adjusting our 2024 guidance. I will comment first on our thoughts regarding industry unit trends for our fiscal year. Consistent with our commentary last quarter, the year-over-year unit trends are relatively easy comparisons in terms of the industry's ability to post either unit growth or a minimal decline. Granted the consumer is making it clear that incentives and urgency help to facilitate retail activity similar to historical years, especially when the industry inventory is elevated for many segments. Assuming no significant economic downturn, but also no major improvements, we continue to believe the industry will be flattish to up slightly on a unit basis in our fiscal year.

Based on our industry unit expectation and our results to date, we continue to expect low to mid-single-digit same-store sales growth in 2024. We are seeing increased discounting in the industry and the industry product margins are moderating to prepandemic levels. While our profitability was below our expectations this quarter, we continued to reach the long-term benefits of our higher-margin strategy and are confident in our ability to maintain consolidated margins in the low to mid-30s. Thinking ahead, it's worth noting that in the March 2023 quarter, we had lower interest costs driven by lower rates and lower inventory than we will have this quarter. Factoring all this in, we now expect our adjusted net income per share to be in the range of $3.20 to $3.70 for fiscal 2024 with adjusted EBITDA to be in the range of $190 million to $215 million.

We are using an annual expected tax rate of approximately 27% and a share count of 23.1 million in our assumptions. Looking at current trends, with the seasonally smallest quarter of the year behind us, we are cautiously encouraged by the reasonably strong start to the winter boat show season. Today, January looks like it will finish with positive same-store sales growth, but the team still has a fair amount of work to do. With that, I'll turn the call back over to Brett for closing comments. Brett?

William McGill: Thank you, Mike. Although we have reset our expectations for 2024, we remain well positioned to execute on our growth priorities in the year ahead. We continue to build the business for the long term, serving the growing demand for the boating lifestyle by providing customers with the best products, services and experiences. Our healthy balance sheet and strong cash position provides us with the financial flexibility and capital resources to meet the needs of this dynamic industry in 2024 and beyond. And with that, operator, please open up the line for questions.

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