Good morning, and welcome to Brunswick Corporation's third quarter 2022 earnings conference call. All participants will be in a listen-only mode until the question and answer period. Today's meeting will be recorded. If you have any objections, you may disconnect at this time. I would now like to introduce Neha Clark, Senior Vice President, Enterprise Finance, Brunswick Corporation. Good morning, and thank you for joining us. With me on the call this morning are David Foulkes, Brunswick CEO, and Ryan Gwillim, CFO. Before we begin with our prepared remarks, I would like to remind everyone that during this call, our comments will include certain forward-looking statements about future results. Please keep in mind that our actual results could differ materially from these expectations. For details on these factors to consider, please refer to our recent SEC filings and today's press release. All of these documents are available on our website at brunswick.com. During our presentation, we will be referring to certain non-GAAP financial information. Reconciliations of GAAP to non-GAAP financial measures are provided in the appendix to this presentation and the reconciliation sections of the unaudited consolidated financial statements accompanying today's results. I will now turn the call over to Dave. Thanks, Neha, and good morning, everyone. We delivered a record third quarter with $1.7 billion in net sales and almost $280 million of adjusted operating earnings, continuing our trend of exceptional resilient performance in a challenging macroeconomic and supply environment. These results were achieved despite an extremely difficult end to the quarter for many of our Florida employees and locations as a result of the impacts of Hurricane Ian. All our divisions contributed to the strong performance, with many new products, sustained cost control, and a continued focus on operational efficiency together with the benefits of capacity investments and ACES initiatives driving growth across our businesses. Consumer demand for our products remains resilient, with boat field inventory levels getting healthier but remaining nearly 40% lower at the end of the quarter versus the same time in 2019. Our boat and engine production levels remain generally on track, and the percentage of our boat production that is already retail sold continues to be high, especially for our fiberglass brands, with no evidence of wholesale cancellations. Mercury continues to capture market share, with gains likely to accelerate in the coming quarters due to major new product launches and the completion of the capacity increase in the Fond du Lac, Wisconsin, production facility in the coming months. P&A sales benefited from acquisitions completed in 2021, while Freedom Boat Club saw significant overall and same-store membership sales increases in the quarter. As the economic outlook continues to create overall market and sector dislocation, we executed $140 million of share repurchases in the third quarter, bringing our year-to-date share repurchases to $360 million. We plan to continue an aggressive repurchase schedule as we close out the year. Prior to discussing business segment performance, I'll share an update on Hurricane Ian. At the end of September, Southwest Florida experienced Ian as a Category 4 hurricane. Brunswick has a strong presence in Florida with multiple manufacturing sites, distribution locations, and Freedom Boat Club locations. We closed our Florida boat manufacturing facilities for the last week of the third quarter to prepare for and ride out the hurricane. The facilities incurred minimal damage, allowing for manufacturing and shipping operations to resume in the following weeks. Only one distribution location remains out of operation. Many dealer locations in Florida stopped receiving product ahead of the hurricane, and some dealer locations in the most impacted areas incurred significant damage to property and inventory. Freedom Boat Club operations in southwest Florida were significantly impacted by Ian, with over 100 boats sustaining major damage and five locations unlikely to open until 2023. Members of the most impacted locations are able to pause their memberships until 2023 as they manage through this difficult period and we restore operations. From an employee standpoint, approximately 20% of our employee base resides in Florida. Some in the most impacted areas were significantly personally impacted. Brunswick is providing critical relief, supplies, and aid to employees and their communities as they rebuild and recover, including through activation of a Brunswick Employee Relief Fund. We estimate an approximately $25 million full-year revenue impact to Brunswick as a result of the disruption to our facilities, teams, and customers caused by Hurricane Ian, with more than half of that impact in the quarter. In the medium term, following rebuilding and insurance recoveries, we may receive orders for boats to replace those lost in this event. Turning to other external factors, despite an improving overall trend in supply delivery and cost inflation compared with the worst period of supply chain constraints, we continue to manage through some discrete but impactful shortages. Most recently due primarily to continued labor shortages at some of our U.S. supplier facilities. This quarter, the propulsion business was notably impacted by a couple of suppliers' issues which slowed production of some products and led to nearly 2,500 mid-range outboard engines awaiting one component for completion at the close of the period, a situation we expect to resolve in Q4. Despite these challenges, the propulsion business delivered outstanding performance, which I will speak to further in a few moments. Consumer boating activity remains strong with a warmer September in many parts of the U.S. extending the boating season. While buying activity in the year-round markets remains strong, the boating season in the northern markets is coming to a close. With the uncertain economic conditions and higher interest rates, we expect to see some buyers in these markets deferring late season and off-season purchases until the start of the 2023 season. This impacts mainly aluminum products. From a dealer standpoint, while our channel partners have shared concerns related to macro factors, inventory refill remains their core focus, and they're excited about our many new products. We continue to see forward orders and backlogs in line with historical levels. Turning now to segment performance during the quarter, let me highlight again that we delivered a record third quarter with each of our segments driving quarterly top line improvement versus 2021. Our propulsion business continues to deliver exceptional results, with 14% top line growth versus third quarter 2021, enabled by higher sales volume resulting from strong global demand, capacity increases, and market share gains. During the quarter, Mercury Marine gained 100 basis points of outboard propulsion retail market share in the U.S. and continues to capture outboard share in international markets, as recently seen in the Cannes Boat Show, where Mercury had a record 65% outboard share on the water. As I mentioned, the outboard engine capacity expansion at the Fond du Lac, Wisconsin facility is on track to come fully online toward the end of the year. Our parts and accessories businesses delivered strong sales growth led by benefits from acquisitions completed in 2021, solid engine P&A sales, and strong OEM sales from Navico Group. On an organic basis, P&A segment sales in the third quarter grew 1% compared with 2021 excluding currency. Navico Group experienced retail point of sale activity above 2021 levels during the quarter, but continued to see slowness in retailer and distributor restocking, which impacted wholesale sales. Our boat business posted another robust quarter with top line growth of 27% and double-digit adjusted operating margins for the second consecutive quarter. Each product category posted solid top line growth despite our Florida boat manufacturing facilities being closed for the last week of the quarter due to Hurricane Ian. Additionally, our aluminum fishing and recreational fiberglass brands delivered operating margin expansion compared to prior year. Finally, Freedom Boat Club had record same-store membership sales increases in the quarter, despite its Southwest Florida operations being significantly impacted by Hurricane Ian. Freedom continues on its growth trajectory in the U.S. and Europe, and now has more than 360 locations, nearly 54,000 membership agreements covering 84,000 members network wide, and a fleet size above 5,000 boats, all while generating exceptionally strong synergy sales across our marine portfolio. I will now provide an overview of sales performance by region on a constant currency basis excluding acquisitions. In the third quarter, all regions delivered substantial sales growth versus third quarter 2021, with broad-based gains across the business segments. Overall, international sales and U.S. sales were each up 13% versus the prior year quarter. Additionally, on a year-to-date basis, sales have increased 11% compared to 2021 on a constant currency basis excluding acquisitions, with growth across all business segments. Finally, we anticipate further propulsion share gains across the regions as we're able to service a backlog of demand at high horsepower outboard nodes enabled by the additional capacity coming online by the end of this year. From an industry view, U.S. third quarter retail unit sales improved sequentially from the first half of the year. The main powerboat segment was down 5% versus the third quarter of 2021. On a year-to-date basis, the main powerboat segment was down 14% versus 2021 and about 7% versus 2019. Outboard engine industry data remains favorable as the third quarter of 2022 increased 10% over third quarter of prior year. Mercury performance during this period was very strong as we gained overall market share in each of the last three months and over 400 basis points in our 200 horsepower and greater outboard engines over a three-year period. Brunswick's retail unit performance in the third quarter was broadly consistent with the overall market performance, with outperformance in recreational fiberglass products and premium pontoons and underperformance in value aluminum, where lower-content value boats, mainly from smaller manufacturers, have regained share lost in 2019 and 2020. We continue to focus successfully on margin maintenance and expansion and have shifted production to higher margin product lines at the recent expense of some unit share of value aluminum product. I'll now turn the call over to Ryan for additional comments on our financial performance. Thanks, Dave. Good morning, everyone. Brunswick delivered an outstanding third quarter with record sales, operating earnings and EPS for any third quarter on record. When compared to prior year, third quarter net sales were up 19%, with adjusted operating margins of 16.4%, up 90 basis points. Operating earnings on an as adjusted basis increased by 26% and adjusted diluted EPS of $2.67 increased by 29%. All segments delivered sales growth resulting from solid demand, new product performance and pricing implemented since the third quarter of 2021, partially offset by unfavorable changes in foreign currency exchange rates, the impact from Hurricane Ian and supply chain challenges. The strong operating earnings growth was also enabled by these factors, together with benefits from cost containment measures, tempered slightly by continued elevated material and fuel and freight inflationary pressures and spending on growth initiatives, including capacity expansion, ACES and new products. Note that changes in foreign currency exchange rates were more unfavorable than anticipated, resulting in a high single-digit million-dollar earnings headwind in the quarter, with the P&A segment most impacted. On a year-to-date basis, Brunswick has also delivered record results, including over $5.2 billion of net sales, almost $850 million of operating earnings, and $8.02 of adjusted diluted EPS. You'll note that we continue to show comparisons to 2019 on these two slides to highlight the strong growth CAGRs over the last three years and the record performance of the business versus the third quarter of last year, which was the previous best third quarter in company history. Turning to our segments. Our propulsion business delivered yet another quarter of outstanding top-line earnings and operating margin performance. Revenue increased 14% versus the third quarter of 2021 as higher sales volumes were driven by strong global demand, capacity increases, and market share gains around the globe. Operating margins of 20% were up 210 basis points, and operating earnings were up 27%, each enabled by increased sales and lower operating expenses, partially offset by investments in capacity and product development. As a reminder, the previously discussed capacity expansion at the Fond du Lac, Wisconsin facility will add more than 50% capacity in the 175 horsepower and higher categories, which will be critical in driving future top line and earnings growth together with market share gains. This expansion will also enable the production of new outboard engine products. If you join us in Florida for our investor event on November 16th, I'm guessing you may get to see these in action. Our parts and accessories business saw a 19% increase in sales, due in large part to the 2021 acquisitions of Navico, RELiON and SemahTronix. Excluding the impact of acquisitions and currency, organic P&A revenues were up 1% against a very strong 2021 comparison, and were up significantly versus the third quarter of 2019. U.S. engine P&A and sales to OEMs were up again quarter-over-quarter, while sales in our lower margin distribution businesses continue to be negatively impacted by third-party product availability and Hurricane Ian, which constrained sales at the end of the quarter. P&A sales to retail and external distribution outlets, including sales from Navico, remained depressed as these channels further slowed restocking levels despite point of sale retail demand remaining healthy. Operating earnings were down very slightly against Q3 of 2021, given all the factors previously mentioned, with the sales benefits being offset by the negative currency impacts and continued material and freight inflation. Our boat segment had another fantastic quarter, delivering strong top line and earnings together with double-digit operating margins despite continued supply chain disruption and having to shut down their three main Florida facilities for the last week of the quarter to support our employees as Hurricane Ian made landfall. The boat segment reported a 27% increase in net sales. Segment operating earnings and margin growth were enabled by the increased sales volumes together with operational efficiencies and positive mix, partially offset by inefficiencies resulting from supply chain disruptions, inflationary pressures, and the loss of production from Hurricane Ian. The entire enterprise continues to benefit from the strong synergies across our portfolio with an average of $25,000 of content per boat now sourced from other Brunswick brands. Freedom Boat Club, which is included in business acceleration, contributed approximately 7% of the Boat segment's revenue during the quarter. However, as Dave discussed earlier, Freedom had its Southwest Florida operations materially impacted by Hurricane Ian and will be working diligently for several quarters to rebuild boat and slip availability in the affected locations while working with our members to protect their memberships while they sort their recovery from the storm. Turning to pipelines. We produced more boats in the third quarter than we did in the third quarter of 2021, allowing for healthier inventory levels in the hands of our dealers. However, supply chain inefficiencies continued to result in delayed components, preventing us from maximizing production across our footprint. As of the end of the third quarter, there were approximately 12,000 units in dealer pipeline inventories around the world, down 39% from the same time of the year in 2019. This translates to just over 19 weeks of inventory on hand, measured on a trailing twelve-month basis, which is significantly lower than where inventories typically stand at this point of the year. The inventory position in the U.S. is even lower, with just over 7,000 units available or 16 weeks on hand. We anticipate end-of-the-year pipelines to remain thousands of units and several weeks on hand below historical averages. We thought it would be also helpful to dive a bit further into pipeline levels, focusing on the current availability of fiberglass product versus aluminum product in the U.S. At the end of the third quarter, there were approximately 5,000 units of aluminum product in the hands of U.S. dealers or 19 weeks on hand, which although trending healthier, remains almost 40% lower from the same level in 2019. The primary retail season for these products is materially complete with our dealers for these boats, mainly in northern markets, focused now on winterizing product and getting their inventory position ready for the 2023 selling season. However, the pipeline for our fiberglass product, which mixes up in terms of price and margin, remains at significantly lower levels in 2019. There are nearly 2,000 fiberglass boats in US dealer inventory, almost 60% lower than in 2019, which as you may remember, included the period where we were purposefully minimizing Boston Whaler pipeline ahead of product launches planned for early 2020. The percent of Sea Ray and Boston Whaler models already retail sold coming out of our facilities remains elevated, and there is no reasonable scenario by which we have normalized level of fiberglass products in dealer inventories during the 2023 retail selling season. Finally, note that we have completed our model year 2023 dealer meetings with strong wholesale orders continuing for the upcoming year. Moving to our outlook for the remainder of the year. We believe our continued strong operating performance will deliver a record year despite the continuing unfavorable FX environment, inflation, and supply chain headwinds. Our updated guidance anticipates a full year EPS of approximately $10 per share, which would be more than 20% ahead of 2021 on revenue of approximately $6.9 billion, which would be more than 15% better than 2021. The change in the EPS midpoint versus July is related to the unfavorable changes in FX rates and the impact of Hurricane Ian, partially offset by continued accelerated share repurchases. Note that the updated guidance for both revenue and EPS would land ahead of the midpoint of our initial full-year guidance from January. I'll finish my comments this morning by highlighting certain P&L, cash flow, and capital strategy assumptions that have changed versus our prior guidance. We have mentioned foreign currency exchange rates several times on the call, and we now anticipate a $45 million-$50 million full-year earnings headwind due to the changes in FX rates, primarily related to the strong U.S. dollar. Note that changes in FX rates impact all facets of our results, including a negative sales impact in excess of $175 million for the full year. We continue to plan on taking advantage of the current market and sector value dislocation by increasing our planned share repurchases for the year. We have repurchased $360 million of shares year to date, and now anticipate repurchasing $450 million of shares for the full year, an increase of $50 million from our previous estimate. This will result in our average diluted shares outstanding for the year to decrease to approximately 75 million shares. Our operating performance, together with continued capital strategy execution, will result in an all-time high of more than $550 million of capital returned to shareholders in 2022 through share repurchases and dividends alone. Lastly, we remain keenly focused on generating free cash flow. With the decrease in our full-year estimate to approximately $250 million being a direct result of higher raw material and WIP inventory balances needed for production continuity. The impacts of changes in FX on our international earnings and slightly lower full-year earnings. We anticipate working capital usage to moderate as we work through 2023, with free cash flow improving accordingly. I will now turn the call back to Dave for concluding remarks. Thanks, Ryan. Closing out Q3, we've already received almost 90 awards recognizing exceptional product, business, and individual performance across our enterprise, and I wanted to share a few highlights. Earlier this month, Brunswick was named by Forbes the list of World's Best Employers for the third consecutive year. Brunswick ranked in the top 15% of all recognized organizations and ranked in the top 10 companies in the world within the engineering and manufacturing category. Recently, we were named the most innovative marine company in 2022 by Soundings Trade Only magazine, the third time in the last four years that we've received this recognition. Additionally, Aine Denari, our Boat Group President, was named by Boating Industry magazine as its 2022 Mover and Shaker of the Year. This is the third consecutive year that Brunswick has won or had a finalist for this honor. Finally, Mercury Marine accepted a Business Friend of the Environment award from Wisconsin Manufacturers & Commerce. The award is an acknowledgment of Mercury's continued sustainability leadership, particularly recognizing progress in adopting renewable sources of energy, implementing energy-efficient production processes, using recycled aluminum in its die-casting operations, and using returnable and reusable packaging. The third quarter was also characterized by a number of business expansions and important new product releases. Last week, Mercury opened its new purpose-built and highly automated distribution center to further expand its industry-leading parts and accessories business. The new 512,000 sq ft facility is strategically located near Indianapolis, Indiana, a major transportation hub, and will significantly improve P&A delivery times to domestic and international customers. At the end of the quarter, the Navico Group launched a significantly enhanced version of its Fathom e-Power System, an integrated lithium-ion auxiliary power management system that delivers reliable power and unparalleled performance for the marine and RV sectors, replacing conventional combustion engine generators. The Fathom system offers advanced digital controls and monitoring of power consumption. Expect to see these systems on a number of boats at 2023 boat shows. Earlier this month, we launched the Heyday H20 Surf boat that builds on the success of the multi-award-winning H22. Heyday has been the fastest growing wake surf brand, and the 2023 H20, which features a Mercury Marine engine and Navico Group controls and displays, is designed to capitalize on that momentum. Sea Ray also launched its brand new SLX 260 Surf. This is Sea Ray's first crossover wake surfing and cruising boat model that also features Mercury Marine's new forward-facing Bravo surf drive technology, combined with Navico Group's surf controls and display. Finally, Freedom Boat Club continues to expand locations and added locations in new countries in Europe as well as new U.S. locations during the quarter. Before I close, I'd like to remind you about our November sixteenth event for the investment community, which we are hosting at our famous Lake X test facility outside Orlando, Florida. We'll be demonstrating an unparalleled array of recently released products and technologies from across our businesses and showing some very exciting unreleased products that support our Next Wave and ACES strategies. Thank you for joining the call. That concludes our prepared remarks. We'll now open the line for questions. Thank you. At this time, we will be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Please ask one question and one follow-up question and then re-queue for any additional questions. Our first question today is from Kevin Heenan of JP Morgan. Please proceed with your question. Hey, guys, thanks for taking my question. I guess just. Hey, Kevin. On the propulsion segment, can you elaborate on your confidence in the accelerating market share gains you see in the coming quarters, between the new product launches and capacity expansion? What's the latest on the competitive environment that you see today? How do you feel pricing-wise relative to peers? Looking to next year as relative to the 8% multi-year growth you've laid out, how best to think about propulsion relative to that, given the benefits you see, landing in the fourth quarter of this year? Thanks. Yeah, thanks, Kevin. We're very confident in continued market share gains by Mercury. We just yesterday heard that at the Fort Lauderdale Boat Show that just started yesterday, Mercury has something around 56% share of engines on transoms, which is about three points up from last year. That is ahead of some imminent major product launches in the higher horsepower categories that we're very excited about. Mercury's expansion is going extremely well, internally in terms of getting everything ready. I think production will be up about something like 14% in Q4 versus where it was last year on a unit basis, and also getting the supply base ready. Obviously, they're both major tasks, but I think Mercury, as usual, is doing a super job. We have a lot of customers waiting in the wings to take that product. Momentum is incredibly strong. You saw 65% share at Cannes, 56% share at FLIBS, and those are new boats, new models, and ahead of major new product launches and the new capacity available. We're very excited. I think that, obviously, conditions next year, overall economic conditions are uncertain. Mercury's growth is really very secular, and people are still looking for the best product. What we're seeing in the market right now is premium products and fiberglass holding up very well, being very resilient, and that's where most of Mercury's high horsepower engines go. I would say our confidence remains extremely high. Great. Just as a follow-up, Ryan, as you think about the different moving pieces in the macro backdrop, I guess, how best to think about the progression of your EBIT margin on a consolidated basis next year, relative to the targets you laid out in March. You know, would you expect to continue to move forward at the EBIT margin level and maybe some of the puts and takes to consider by the segments next year? Thanks. Yeah, Kevin, that's a good question. Obviously, we're putting together as we speak, our plans for next year through the budgeting process that we go through annually. You know, I'll tell you, there's a range of scenarios for next year. They focus primarily on a flattish market that is kind of a unit flattish market. I would tell you, margin growth continues to be something that we focus on year in and year out, both on the cost side, which I think you've seen margins continue to expand this year despite headwinds such as FX and tariffs. I would tell you that the plan today would be to continue margin growth each year of the plan to 2025. Whether that's, you know, 10-20 basis points or more is kind of dependent on a lot of the external factors, FX being really the main one at the current moment. We would not anticipate a plan where margins would go backwards in any year. Great. Very helpful. Thanks, guys. The next question is from James Hardiman of Citi. Please proceed with your question. Hey, good morning. Morning. Morning. I was gonna start with maybe an unfair question, but maybe you just answered it. MarineMax said they expected the industry to be down mid-single digits, somewhere between 5% and 10% next year. Sounds like you think that is too bearish of an outlook. Maybe just sort of initial thoughts there. Yeah, you know, I think we're exploring a range of scenarios, James, to be honest, that span up to flat to slightly down. Obviously, we'll be preparing our cost structure for a more bearish scenario. In terms of core planning, if you think last year industry was down 8%-9% or something like that, this year it's probably gonna be down mid-teens% based on where we are in the year right now. You know, on a compounded basis, down more than 20%. I think preparing for a reasonably flat market still seems about the right thing for us. It's certainly a bifurcated market with, you know, stronger premium and stronger fiberglass versus aluminum. You know, I think it depends where the market ends up this year. Most of it is done. I think, you know, compounded 20% down seems like a good place to start for our next year. As I said, we will certainly be preparing our cost structure for something that is not as positive as that. That makes a lot of sense. Sort of along those lines, I mean, a lot of uncertainty here, as we close out 2022. How does that make you think about sort of the fourth quarter shipment strategy, right? You talked about some customers are likely deferring into next year. We're gonna be in our seasonally slow period. How do you think then, with all of those unknowns in mind, how you wanna finish the year in terms of, you know, weeks on hand inventory or total inventories? How are you targeting that, for year-end 2022? Yeah, for year-end 2022, as you saw, pipelines continued to be down significantly. We don't see a case to moderate wholesale right now, given the fact that we have dealers continuing to look for product and continuing to place orders. I think, you know, we'll be looking at the end of the year more about how we plan production for 2023 than how we close out 2022. We're not currently planning to curtail wholesale shipments in this year. Certainly, you know, one of the things that we didn't specifically mention about the pipeline is the incredible freshness of it right now. There is almost no 2022 model year product anywhere in any pipeline. It's all 2023 model year product. Dealers don't have any aging inventory at all. Everything is very fresh and very relevant as they go into 2023. Obviously, all we're shipping right now is 2023 model year product. What we will be shipping is very healthy, very, you know, contemporary inventory. Dealers really don't have anything that's aging at all. Got it. Thanks, Dave. The next question is from Xian Siew of BNP Paribas. Please proceed with your question. Hey, guys. Thanks for the question. A big part of the story is the P&A business and how it's kind of resilient, you know, even as industry boat sales slows. You took down the margin guide for this year, for P&A. Maybe it sounds like a lot of it's transitory, but maybe can you parse out how much of the cut is transitory factors and what gives you confidence in the underlying business, and margins? It's a great question. It's one we obviously anticipated, you know, being able to discuss a little bit. Listen, it's really two main factors. One is FX. You know, unfortunately, the FX impact on P&A can't be understated. It's just a big number. It is over half of our FX impact for the year on the earnings and sales side. That's really causing some pain. It is upwards to 80 or more basis points of the decline this year. If you think the P&A segment's down 200 basis points from last year, which is the guide, that's about half of it is FX. The lion's share of the rest is just a mix issue. It's obviously with the Navico business, SemahTronix and RELiON coming on in the fourth quarter of last year. Those are businesses with very strong gross margins, but cost structures that we need to get after, and we are getting after to get those operating margins up to where the legacy P&A business is. You saw the announcement in August, the change over the name and the combination of a lot of cost items. That is not complete. There's more underway that will be coming. I would consider right now almost the trough margins for kind of the Navico Group, and we look forward to continued growth and expansion, even starting in the fourth quarter. The last thing I would say is supply chains really hammered P&A. It's just taken longer to get product. The freight is more expensive, and that's shown through with you know, with some of the margin pressure on the cost side. Okay. Got it. That's really helpful. Then maybe on the revenue side, are there any other kind of data points? I guess you talked about the retail sell-through, but any other data points showing maybe boat usage remains strong and consumers are not deferring any maintenance? I'm trying to think more about the P&A. Maybe it's trips per member at Freedom is still high or content for a new boat is not coming down. Just any color on the P&A drivers, especially. I think you pointed to a couple. The engine P&A sales, I think on a constant currency basis are up versus last year. I think that's a, you know, normally a good indicator of healthy boating participation. Freedom members are using their boats very heavily, so we're, you know, excited about that, and membership growth continues there. We don't really have any indicators of kind of diminishing participation at the moment. We're in a part of the season where in the northern markets the season's coming to a close. You know, we'll get a good idea about winterization efforts maybe through there. The two metrics that you alluded to, I think both indicate continued strong participation. Okay. Got it. Very helpful. Thank you, guys. The next question is from Craig Kennison of Robert W. Baird. Please proceed with your question. Hey, good morning. Thanks for taking my question. I wanted to go back to the first question asked on the Fond du Lac capacity expansion and really ask it in a different way. In a flat marine market which you described, how many more engine units would you expect to sell due to the share gain you noted, the repower market opportunity and some international opportunities as well? Yeah. I don't know if we've ever specifically disclosed the, like, unit share opportunity, but the capacity expansion does double the potential output. I would say, you know, for Mercury share gain and AUP associated with horsepower increases have really been a huge driver of Mercury's continued growth and success versus specifically boat market expansion. We would continue to believe that to be the case, Craig. I would say unit production will be substantially higher. I don't think we've quoted a number yet. AUP will also be higher as we migrate to higher and higher horsepower. The new products that we're shortly introducing are in that category. We think they're very attractive. We think that they will accelerate our share gains. We're very confident in substantial growth next year, even in a flat boating market. Craig, the one addition I'll put out there, and these numbers we've given over time, but those three markets, if you consider saltwater, commercial and repower, those global markets are multiple billions of dollars. You know, if we get our fair share like we think we will, you can kind of back into what you think, from a dollar-wise or a share-wise, where we can get to. Thanks. Just to follow up on the engine side as it relates to currency, to what extent is currency a disadvantage competitively for you, given some competitors are based in Japan? Oh, go ahead [crosstalk]. Yeah, we-. We're really pricing for our technology and product features that Craig took. We continue to price at a premium, across most of our product line to manufacturers, and we have not so far seen any evidence of any abnormal behavior in market pricing. Great. Thank you. The next question is from Michael Swartz of Truist Securities. Please proceed with your question. Hey, good morning. Maybe to start off with, I think, David, you made some commentary coming out of the recent dealer meetings from a number of your brands just around strong order patterns. Maybe give us a little context or a little more color on what exactly that means. Yeah. What it means is, we have a kind of a trimester system of ordering, where a few times in the year the dealers place orders. We go through and, you know, it's important to do that after the dealer meeting so the dealers experience the new products that are gonna be delivered. I think it was 60 new products that we planned to launch or have already launched the majority of already this year. They were extremely well received. They are driving order patterns, you know, consistent with prior years and consistent with what we expect. We have no indication of dealers in showing any kind of hesitancy with wholesale ordering pattern in this particular round of ordering, which would essentially support year-round markets plus stocking for the, you know, for the seasonal markets. That's really the context, if you like. Gotcha. Okay. That's helpful. Thank you. Then maybe, Ryan, just a second question on propulsion. Just the 20% margin this quarter. Maybe help us think about, you know, going forward, is that the right run rate? Were there some mix positives that you had in the quarter that we shouldn't expect again? Any color on that would be helpful. I have to be careful because I know my president and CFO of Mercury are probably listening to this call. But yeah. I mean, they still leverage if you look at our, if you look at our leverage, change in sales over change in earnings, they still leverage up north of 20%. There's certainly a case that that is achievable more often than not. There were no kind of odd one-offs really in the quarter. There's always, you know, puts and takes. I will tell you that the expansion project is close to completion. Efficiency is probably improving better than we anticipated, and the output is strong. You combine that with the fact that the mix of products continues to mix up to high horsepower, which is our newer products, which have more cost taken out of them from the design process, and you just kinda get a steady stream of margin growth. There's a reason they've grown margins annually every year for the last decade. We plan to continue that trend over the next couple of years. Okay, great. Thank you. The next question is from Frederick Wightman of Wolfe Research. Please proceed with your question. Hey, guys. Can you touch on the European business and just the outlook there? I think that was up 15% in the quarter, and you've heard some pretty scary macro commentary from other parts of the consumer landscape. How should we think about that chunk of the business going forward? Yeah. Fred, actually, you know, surprisingly strong. Definitely, strength in the Mediterranean markets, compared with some comparative softness in kind of Scandinavian, some of the northern markets. In aggregate, remarkably, resilient, I would say, both on the engine side and the boat side. We did a little promotional activity in the Scandinavian marketplace. But really that's pretty much all we've done. Sales continue to be pretty good. In fact, you know, remarkably resilient. We're really not seeing, although it's different country by country, and I'm talking about, Europe as opposed to markets like ANZP. ANZP is strong as well, but really, probably more resilient than we might have expected. It's also one of the places, Fred, that has not gotten their lion's share of engine products that they would like. With the new capacity, again, coming online, we would anticipate our ability to satisfy more OEMs and repower in Europe in 2023. Understood. Then, Ryan, you touched on the 2025 targets a little bit earlier, but have you changed your thinking about some of those downside scenarios that you touched on? I think it was a $6 and an $8 number that you put out there. Any change to those figures based on what you've seen? No, Fred. Since March? Yeah. No, no change whatsoever. Just remind everyone that's been around us for a while, you know, we do these three and now four-year plans, and they're never linear. The results are never perfect on a page. We're still very confident that we can get to where we told the world we'd be in 2025. It may be a little bit, you know, bumpier in the front due to macros, things out of our control, but we are still very much in support of our 2025 targets. Great. Thank you. The next question is from Scott Stember of MKM Partners. Please proceed with your question. Good morning, and thanks for taking my questions. Thanks, Scott. You guys made some comments that I guess for things like aluminum fish, you would expect some people to delay their purchases or placing orders. Have you actually seen that cancellation activity, or is this just something you're looking for? We haven't really seen any cancellations. What we have seen is that aluminum fishing is probably the slowest part of the market right now across. If you look across SSI data and our data, you'll see, pontoon actually remains strong, but aluminum fishing is the weaker part of the market now. That tends to be a more northern kind of upper Midwest product, and that is obviously the most seasonal part of our market. If you look at how you think about interest rates at the moment, up until about two or three months ago, interest rates on boat loans were roughly where they were in 2019. Over the last two or three months, they've climbed about 150 basis points. That obviously is a factor to consider. On the positive side, gas prices have, you know, dropped well below their highs, so that's positive. I'm just, you know, as we work through, you know, explanation for why is aluminum fishing a little softer, you can imagine most people in that part of the market would be potentially buying a product that they would use for a few weeks and then put away in storage for five or six months before they'd use it again at the beginning of the year. That might have made sense when they thought that they might not get a product in the next year, in the next season. I think given the improving pipelines and more product availability, I think you know some people are clearly gonna make the decision that product is likely to be available in the following season. They may not choose to make the investment to put something away for five months. That is a I think a partial explanation of why aluminum fishing in those markets is a little softer. Okay. Just one quick follow-up. You talked about for 2023, I guess, an assumption of a flattish market for new boat sales. What about propulsion, P&A and just consumables in general? How would you expect that to perform? It depends a little bit on what the weather patterns look like in the following year, but we have seen usage patterns in 2022, much like 2021. I don't think there's a lot of reason to suppose that they would be significantly different. We've seen through pretty much every downturn that people continue to use that product. We would expect that to continue next year. We would also expect to see strong of Freedom participation. Yeah, no indications really. I think that things will be a lot different next year. Got it. Thank you. The next question is from Joe Altobello of Raymond James. Please proceed with your question. Thanks. Hey, guys. Good morning. Hey, Joe. Just wanna go back to P&A for a second. Sales up 1% organic in the quarter. I think back in July you described the month of July as extremely robust. It sounds like that business slowed a little bit throughout the quarter. I guess first, is that accurate? Then second, you know, why are retailers and distributors slowing the pace of restocking? Is it just macro concerns? If it's not, you know, participation. Maybe I'll talk about the last part and maybe Ryan can-. Sure. Hey, Joe. I think what we've seen is that we've seen obviously as we've looked at results from other P&A companies recently, similar patterns where some of the big box and online retailers, some of the larger distributors during the period of maximum supply chain disruption really sucked up, assuming that there would be discontinuities in supply. Now they are preparing themselves for, just as we would, for more adverse conditions in the marketplace. Destocking to where they, you know, more reasonable levels that they believe are relevant going forward. Now, obviously over time, retail and wholesale are gonna have to come into balance. What we are seeing is where we have visibility, which is mostly through the major retailers, retail sales are up. Generally, wholesale is trailing retail, and I would say it's in the kind of 5%-10% range. Wholesale is kind of 5%-10% behind where retail is, and retail is positive. I think it's just retailers preparing for a, you know, a potential of lower demand going forward. Then, Joe, I mean, there's really no magic here. You know, we do tend to try to avoid small sample sizes and you know, maybe the July comps could have been one of those. But there really wasn't a pickup or a slowdown. There definitely, if you remember the spring, there was a little bit of slowness. As we came into July, it had picked up and so you saw sequential growth, just kind of from June and into July and August. You know, this is a business that when it's doing really well, and you have to separate a little bit some of the recent times where we've had some explosions and of sales in certain quarters. You know, it's still up 30-ish% from 2019. It's still up large numbers if you kinda go back even further. No slowness in the back half of the quarter. This is a business that kind of trundles around slightly up given consistent participation, and that's really where we landed on a constant currency basis. Okay, that's very helpful. Just maybe a follow-up on the boat side. Is it still your expectation that you'll be refilling the channel throughout 2023? I think so, but it'll obviously change by segment. As Ryan said, it's hard to imagine a reasonable scenario where we would be able to refill the fiberglass pipeline in 2023. That will almost certainly extend to 2024, depending on what the market conditions over the longer term look like. I think there is a scenario where we could refill the aluminum pipelines through 2023, probably not in the first half, but maybe in the second half. Got it. Okay. Thank you, guys. The next question is from Eric Wold of B. Riley Securities. Please proceed with your question. Thanks. Good morning. Two kind of quick follow-ups. I guess one on the P&A segment, obviously, Ryan, you stressed just how much FX has been impacting on the top line, and the bottom line this year and expectations that likely continues. What can you do, if anything, to kind of offset that? And have you taken price, you know, to try to offset or is that something you kind of, you know, really don't wanna necessarily do in this environment? We can and have taken price, Eric. I think there is a kind of a level where you don't wanna go too far away and have people delay a service or not buy, you know, the things that drive the business. We have taken price. You know, one thing that we should mention, we have a very active hedging practice here at the company, and it's very programmatic. That, believe it or not, the FX impact would be double what it is without our hedging impact. And that includes actually, you know, those of you that dive deep into our financials will see this. You know, we did some cross-currency swaps that netted us about $50 million to help offset. It's not a P&L event, it's not a free cash flow event, but it's obviously cash in the door. The treasury team does a fantastic job of doing hedging and we'll continue that practice. You know, we're in unparalleled times where the dollar is so strong and 30% of our sales are outside the U.S., and a good portion of those are denominated in non-U.S. currency. We're doing the best we can within the guidelines, but and taking price, but there's only so much we can do without disturbing the underlying market. That makes sense. I mean, the follow-up question, I know you kinda talked about the projections or targets for 2025. You know, maybe the trajectory changes a bit in terms of being more bumpy up front. Do you think that the inputs or the assumptions or drivers, so to speak, need to change as well in terms of what would get you there? Maybe more acquisitions than not or something else? Do you think the original kind of assumptions around that are intact, it's just the trajectory that may need to change? I don't think we need to change anything fundamentally. You know, the path to 2025 assumed about 70% of revenue growth was organic, including acquisitions that we'd already completed, like Navico, and about 30% would be from additional acquisitions. You know, that still seems reasonable. I think a lot of the secular growth expectations remain in place, particularly for propulsion. We haven't really had an opportunity to talk about it much, but Navico Group is doing very well, particularly penetration into non-marine markets, for example, which is also part of the thesis. Boat Group, if anything, is ahead of schedule. I would say a lot of the inputs remain strong. We continue to look at M&A. Obviously at the moment, if you think about 2025 targets, including the $10 billion of revenue, but also including the kind of roughly $17 of EPS. Obviously, $450 million of share repurchases is very helpful for the EPS portion of that 2025 target. Yeah, we're definitely adjusting capital strategy a bit, but I would say that is more adjusting to the environment and where we can get the maximum return, as opposed to any fundamental change in the path. At this time, we would like to turn the call back to Dave for some concluding remarks. Well, thank you all for joining us and for the great questions. Really appreciate them. As you've seen, despite the very dynamic environment and the recent added challenges of Hurricane Ian, our businesses continue to perform very well. There's no change to our thesis. Overall, you know, we had really strong margins in the quarter and notably Boat Group well into the double digits again. Our margins are really holding up well despite FX and slightly lower revenue, which I think is a testament to the work we've already done on our cost structure and continue to do and prepares us extremely well for a range of scenarios next year. We're also making real progress with the strategic initiatives to support the 2025 plan, including the capacity expansions, the new distribution center, new product introductions. We mentioned returning record levels of capital to shareholders, particularly through accelerated share repurchases. I just wanna remind you once again, please join our investor event at Lake X in November. You will not be disappointed by the experiences that we're gonna have on display there. Our recently released products and some exciting unreleased products and technologies. This afternoon, I'm heading down to Fort Lauderdale. Show seems to have opened very well. Mercury has got great share there, and our premium brands once again seem to be doing well, so I'm very excited to do that. Thank you and goodbye for now. This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.