00:04 Good morning, and welcome to Brunswick Corporation’s First 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. 00:21 I would now like to introduce Brent Dahl, Vice President, Investor Relations.

00:28 Good morning, and thank you for joining us. With me on the call this morning are Dave Foulkes, Brunswick’s CEO; and Ryan Gwillim, CFO. 00:36 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 the factors to consider, please refer to our recent SEC filings in today's press release. All of these documents are available on our website at Brunswick.com. 01:02 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. 01:20 I will now turn the call over to Dave.

01:23 Thanks, Brent, and good morning everyone. Our businesses had a strong start to 2022, delivering record first-quarter sales, operating earnings, and EPS. Continued focus on operational efficiency and strengthening our supply chain enabled increased production levels, and our investments in technology, innovation, recurring-revenue businesses and capacity have shaped the enterprise portfolio for further success in any economic environment. 01:57 Despite the inflationary backdrop, the pace of retail sales continues to be dominated by the twin supply-side challenges of very low field inventory levels and supply chain disruption. Global boat field inventory levels were 6% lower at the end of the first quarter 2022 than at the same time in 2021, and down 12% in the US, and are likely exaggerated by a slower start to spring in the Northern US and Canada, which is resulting in delayed deliveries and registrations for many retail-sold boats. 02:33 The percentage of our boat production that is already retail-sold continues to be at an all-time high. Early 2022 boat show performance is encouraging and there is no evidence of wholesale or retail cancellations. Field inventory of our larger boats in the US is currently at or near zero and, consequently, there continues to be very little advertising or promotional activity. With macro-economic and geopolitical factors driving current financial market dislocation, we took the opportunity to issue long-term debt at favorable interest rates and complete $80 million of share repurchases in the first quarter, and are significantly increasing our 2022 annual share repurchase target to $300 million. 03:21 Later in the call, Ryan will provide you with further details behind our updated guidance for 2022. Before taking a look at our segment performance for the quarter, I wanted to spend a few minutes talking about the external factors and influences we are monitoring and…

10:26 Thanks, Dave, and good morning, everyone. Brunswick delivered yet another fantastic quarter, with record first quarter sales, operating earnings and EPS. When compared to prior year, first quarter net sales were up 18%, with adjusted operating margins of 15.8%. Operating earnings on an as adjusted basis increased by 10% and adjusted EPS of $2.53 increased 13%. 10:56 Sales in each segment benefited from higher prices implemented since the first quarter of 2021 and increased sales volumes, partially offset by supply chain inefficiencies and unfavorable changes in foreign currency exchange rates, while each segment's operating earnings continue to be impacted by increasing inflationary pressures and spending on growth-related initiatives. 11:23 Turning to our segments. Our propulsion business delivered yet another quarter of strong top-line growth, with a slight earnings increase versus a historically strong first quarter of 2021. Revenue increased 7% versus the first quarter of 2021 as strong global demand for all product categories continue to be enabled by increased production levels. 11:48 Operating margins were lower by 110 basis points as higher sales and favorable absorption were more than offset by higher manufacturing costs, primarily caused by inflation, and continued investments in capacity and product development. Note, that although we have been taking price in certain markets and product lines, the majority of the propulsion price increases occur from this point forward in the year. 12:19 Our parts and accessories businesses saw a 34% increase in sales and a 19% increase in adjusted operating earnings, due in large part to the 2021 acquisitions of Navico, RELiON and Semahtronix. Excluding the impact from acquisitions, organic P&A revenues grew by 2% against a very tough 2021 comparison, despite sales and earnings being impacted by supply chain constraints leading to increased sales backlogs, together with a slower start to the boating…

18:52 Thanks, Ryan. As anticipated, our Business Acceleration team has had a very busy start to 2022. Freedom opened its 350th global location in Denmark, which is the first location in the Nordics, a strong boating region. Freedom also continued the expansion of its corporate footprint in key markets by acquiring four locations in the Atlanta area, and continued to transition the branding of its recently acquired boat club locations throughout Spain. 19:26 Business Acceleration also acquired J&R Marine, a portfolio of marine assets in the southern United States, including the greater Atlanta area, to expand shared access, advance its Boating-as-a-Service eco-system strategy with subscription-based models, and fortify plans to establish a regional marine operating center that will support Freedom Boat Club and Boateka. 19:53 Before we close out our comments this morning, I wanted to leave you with a few more updates. On March 7, we launched our second consecutive virtual Investor Day and held a follow-up Q&A session with the investor community. If you haven't done so already, I would encourage you to view these materials, which highlight the company's strategy through 2025. The materials can be found on brunswick.com. 20:20 In late March, we published our third annual enterprise-wide Sustainability Report, highlighting the company's industry-leading sustainability achievements, and announced the hiring of Jennifer Koenig, the company's first Chief Sustainability Officer, furthering Brunswick's ongoing commitment to advancing our enterprise environmental, social, and governance strategies. 20:43 Navico announced its first major capacity expansion since joining Brunswick in October 2021. The expansion is expected to create more than 100 additional jobs at its Ensenada, Mexico facility, and will increase vertical integration and production capacity to deliver the necessary volume growth, in addition to increased supply security, to fulfill record demand for Navico's award-winning products. Mercury continued its string of successful early season saltwater boat shows that included Miami, Dubai, and Palm Beach, at which it captured record share of outboard engines on display, particularly in high horsepower applications. 21:25 Brunswick also continued to receive recognition for innovation by winning seven Boating Industry Top Products awards spanning our businesses and product portfolio. Brenna Preisser was featured on CNBC, highlighting the company's leadership in DEI, and we also received recognition from Forbes as a Best Employers for Diversity for the third consecutive year. 21:50 Before I finish, I want to thank all our global employees who, once again, continued to deliver outstanding business performance and advance our Next Wave strategy despite the very dynamic external environment. 22:04 Thank you. We will now open the line for questions.

22:09 Thank you. And ladies and gentlemen, at this time we will be conducting a question-and-answer session, [Operator Instructions] Our first question comes from Xian Siew with BNP Paribas. Please go ahead.

22:52 Hi, guys. Thanks for the question. You mentioned a slower start to the season with maybe a poor weather, but maybe can you talk about trends exiting the quarter and into April, like for example, the parts business was only up, I think, 2% on an organic basis. I was curious how that evolves for the quarter, and if you saw any kind of acceleration into April?

23:15 Yeah. Thank you for the question. Obviously, it was up 2% but against the huge comp last year and an earlier spring. So, we're pretty comfortable with where the business is. Certainly, there will be a little bit of phasing, but you need to think about all of this as a phasing issue. The P&A business and sales profile is people get their boats out for the season, that occurs every year. It's just a question of which week, two weeks forward, two weeks back, whatever it is -- the spring starts. And then, there's a usage profile and then there's a winterization profile. 23:55 So I would say, we're extremely comfortable with the way that P&A is performing, the way it's stocking. It's comping against a huge year, last year, and we are facing a little bit of a later spring. So, I see it as a very positive environment for us.

24:17 Okay, got it. Thanks. And then you talked about how '22 retail is essentially sold out, you're not really seeing any cancellations, but maybe can you help give us some more color on how solid the backlog is? And how hard it is for consumers to cancel orders? I think you're taking the pause and you take -- you have all the customer information, but maybe some more color there? 24:41 And also, within that, if you're taking pricing over the course of the year as costs are going up, are you retroactively taking the price up for both that have been pre-sold? Thanks.

24:56 Yes. So, I mean, in terms of cancellations, it depends on the type of boats and a little bit on the individual dealer even to some extent. If you're pre-ordering a large boat, you can -- there's probably a deposit of around 10% that is potentially at risk. But the reality is, if you are intending to orders sometime in the future, that might not really be a risk. In terms of smaller boats, the kind of penalty for cancellation is pretty modest. I would say that the -- really, I think encouraging thing for us here is we are seeing no sign of anything either at a wholesale level, or at retail level. 25:41 Our dealers have one question really which is, can I get more boats? But there is no momentum in the other direction at all. It's just, I need more boats, please get me more boats. And I believe that it isn't cancellations on a retail level and not associated with anybody wanting to cancel who is unable or something, or going to forfeit something for cancellation. I think it's all about people want to get the boat. 26:11 In terms of retail pricing, normally, but at the moment, at least I think, a lot of dealers have allowed themselves some flexibility in their retail contracts to pass through price. Obviously, we don't directly control the retail pricing, that's up to the dealer, it's not up to us how they handle that. And we've explained before, how we're handling wholesale pricing. Which is, we are monitoring inflationary trends as tightly as we possibly can and trying to adjust appropriately, but on a more frequent basis than we would historically have done.

26:54 Thank you. Our next question comes from James Hardiman with Citi. Please go ahead.

27:01Hey, good morning. So, I wanted to actually dig into that last point about pricing a little bit. There have been a number of price increases, and maybe just as significantly promo being eliminated. But if I were to look at your three segments, where are we in terms of total sort of realized price versus '19? And maybe, can you speak to the different levels of pricing power in those respective segments? Obviously, everybody is concerned that we'll see the reintroduction of demand elasticity. Where would we see that first, where would we see it last?

27:37 Yeah, James. Good morning. It's Ryan. I'll take that to start and then Dave can follow up. We obviously have taken price in all three segments. If I look at Propulsion, to date it's been relatively minor versus -- I think you asked for 2019-2020, maybe we'd just say pre -- kind of pre-COVID, that looks low to mid-single-digits up to this point, maybe mid-single-digits because we are talking a couple of years, which is just slightly over really what they normally do. We said in the comments that Propulsion, US Outboards, certainly we'll see a little bit more price here at the remainder of the year. So, that number will go up a little bit. 28:20 If I move then to kind of the parts and accessories business, this also depends on whether it's aftermarket or the OEM side of the house. Aftermarket has gone up, probably less than the OEM side. Certainly, the aftermarket increase has kind of looked, call it, mid to high single-digit increases to date with again more probably on the horizon with OEM probably looking more than that, call it, low double-digits or so. 28:54 And then, if I look at boats, I mean, this is where we've been pretty clear I think on call after call. If you look cumulatively, you're probably somewhere in the mid-teens to about 20%, if you look at what would be kind of two-plus years, couple of model years. And then we would anticipate a little bit more of price ability as we move into the model year 2023. 29:19 Elasticity is always a good question, and you probably are going to know what I'm going to say, but this is a long-term game for pricing. We are attempting to use price to cover inflation, which we all know is prevalent in the environment. But we also are cognizant that we don't want to out-price our end consumers. So, we touched just about every part of the boating ecosystem between the engine, the parts in the boat, so we're being relatively prudent across all segments and phasing these pricing -- the price and to cover the inflation as it arises, but not taking more than necessary.

30:01 Just one additional comment. We've said for a long time about 80% of our boats costing less than $50,000 and that used to be over 80%, but we checked it just a couple of months ago and it was 78%. So, over this whole period, we still have a huge portion of our portfolio aimed squarely at middle-income consumers and still extremely affordable. So, that still gives you a good idea of what the kind of [indiscernible] pricing looks like, even though we've certainly been forced to elevate some pricing. We are in this for the long term.

30:41That's great color. And then just one more from me. The $300 million in projected share repurchases now seems to be a pretty big signal about where your stock is trading relative to what you think intrinsic value is, maybe speak to that, and whether or not you might lean into that even further if the stock continues to be depressed? Thanks.

31:03 Yeah, thanks, James. Yeah, I think, obviously, we're trading at a discount and obviously, the sectors had a significant pullback and we believe that we are significantly discounted by any measure of intrinsic value. So this is a good time for us to deploy capital. We have a very strong balance sheet and are able to deploy capital very flexibly. And we certainly think that this is a great time to be repurchasing shares and could we lean more into it, yeah, absolutely, we could lean more into it. We think that that's a good target for now, but we will see how the year develops and whether that continues to be the right value place to put our dollars.

31:48 That's fair to say though it would, James, very likely only go up, not down, if that's what you're asking.

31:57 Perfect. Appreciate the color, guys.

31:59 Thanks.

32:00 Thanks, James.

32:02 Our next question comes from Mike Swartz with Truist. Please go ahead.

32:08 Hey, guys. Good morning. I just wanted to touch on your retail outlook for the year and maybe as it pertains to your prior outlook of, I think you said, low single-digit growth and understanding that retail and wholesale are fundamentally separated for the time being, but if you give us a view of just what some of the supply chain issues that you've seen? How, or I guess, has your retail outlook for the year changed at all?

32:36 Yeah. Hi, Michael. I think we discussed this -- whether we should do anything, but I think the situation for us at the moment is, it's very early in the year. Our production remains strong. We have some specific kind of phasing issues, if you like, I think, around this time of the season, which is a bit of an inflection point. So, we simply don't have enough new information to be able to update that call at the moment. If we see something developing in a different direction, obviously, we'll do that. But we just felt that modifying that in one direction or another was -- we just don't have enough information right now.

33:16 Okay, fair enough. And then, maybe, just on the -- I apologize if I missed this as well, but just on the pro -- boat production expectations for the year, I think previously you had called out about 40,000 units, is that -- and I know you took guidance up here, so is that still the right number and we should think about maybe the increment as being pricing or something else?

33:37 Yeah, that's still the right number for us. I think the Boat Group and the teams in our individual plants and brands have done a great job in the first quarter of the year. I expect they'll continue to do a great job in the balance of the year. So, yeah, that's a good number.

33:55 Okay, great. And then, maybe just a final question, just at a very high level, maybe just give us some color or just qualification of maybe how the supply chain looks today relative to two months ago?

34:09 Yeah, it migrates. I think it's very clear that the area that is potentially the most disruptive is the COVID-related lockdowns in China. There are other areas that have generally improved in terms of availability. There is still inflation. Obviously, there are new -- some new inflationary pressures associated with events around the world. But generally, as COVID has diminished at least in the -- throughout for our domestic supply base, we're seeing improved performance, I think, there, not uniformly, but generally improved performance. 34:55 And at the moment, we are focusing our attention, particularly on engineered components coming out of China as there's the biggest potential source of disruption. But as always, so far, we've continued to manage our way through that. It's disruptive, but we find a way and expect to continue to find a way.

35:19 Okay. Thank you.

35:24 Thank you. Our next question comes from Anna Glaessgen with Jefferies. Please state your question.

35:31 Hi, good morning. Thanks for taking our question. And thanks for giving the color on the expected change in fuel costs for the average boater. Could you maybe give some perspective on what you're assuming in terms of usage, maybe versus historical averages given participation has benefited over the past two years?

35:53 Yes. So, hi, Anna. So, yes, it's a good question. So we kind of did the calculation based on our kind of average boats -- average boats along with some data that's really well established from third-party sources. So, for example, the EPA publishes average boat usage data every year, they say boats are used about 35 hours in a season. Obviously, there is seasonality here as well in the northern markets, season is shorter. 36:23 So, if you look at our average horsepower, which is in the kind of 140 horsepower range for an outboard, you look at the boat that it's on, the fuel consumption, you multiply that by the hours and the delta in fuel price between earlier this year and earlier last year, which is in the $1.50 range, something like that. You come out with about $160. And so we -- just to round that up a bit, we put it at $200. Obviously, if you have a more powerful boat, if you have more engines on the boat, the delta is going to be higher, but we thought it would be useful to dimension it for the average boat that we make, and also it’s a leverage really well-established third-party or kind of average usage profiles. That was the calculation. 37:19 You will see in other -- I know that there was another estimate done to do with Wake sports boats, they tend to use more fuel because they use a lot of power and torque to generate that big wake behind them. But for our average boat, remember about two-third of our boats are aluminum fishing boats. The fuel usage is very low. Just another thing, it's about a quarter of the annual fuel usage of a compact car, so that's another way to think about it.

37:49 Great, thanks. That's really helpful. And then glad to hear the Mercury capacity expansions are still on track for 4Q. As we think about that incremental capacity and higher horsepower, can you give some perspective on the product and mix and channel shift impact to margins as we see that ramping?

38:11 Yeah. Well, first of all, I can tell you it's all spoken for already. So which is very exciting. So that's really good. I think we've said before, it's aimed at the higher horsepower engine ranges, so 175 horsepower and above, and we're adding around 60% capacity in that horsepower, in that set of horsepower nodes from 175 horsepower upwards. It is all on track at the moment, and we're very excited about being able to bring those additional customers on board.

38:46 And then also, Anna, from a margin perspective, we've been pretty clear that we have certain large customers that often take a big chunk of the available inventory. The additional capacity will enable us to sell more engines internationally to the repower dealer channel and to other OEM customers that maybe aren't even receiving engines today. Those channels often are margined up, and so that's -- that will enable a little bit of margin expansion, which is what you're seeing obviously in the back half of the year, certainly in the fourth quarter then into '23 as you looked at our strategic plan, up to 2025.

39:27 Great. Thanks very much.

39:32 Thank you. Our next question comes from Kevin Heenan with JP Morgan. Please go ahead.

39:38 Hey, guys. Thanks for taking my question. I guess on the boat segment revenue, with the retail side coming in a bit softer year-to-date, your production is on track. I guess, what is driving the increase in your full-year revenue outlook? Is that pricing or more confidence in underlying demand?

40:00 Hey, Kevin. Let's say -- and thanks for the questions, actually, it's a good question. Now when we look at -- we're sitting in January and we're looking at a whole year of output. There's a lot of uncertainties. And certainly, when we were in January, looking at full-year segment numbers, there was even more uncertainty than there is today in terms of inflation, supply chain, and the like. I think we are just -- no fundamental changes in assumption, except that now we are one quarter in and production is up over last year. And we anticipate that continuing. As Dave said, the boat business has been hit probably the most with inefficient manufacturing due to supply chain just not getting -- it's literally as easy as one or two parts on a boat that need to be finished and completed before it could be wrapped and sent to a dealer. 40:49 The boat business has gotten their share of that. But despite that and in light of it getting like a little better, as Dave mentioned, this is a production up over in the first quarter and we -- it seems like we're on pace to be able to do that for the year. So, just -- we're three months closer to the end of the year and we're a little bit more dialed in and what the business can deliver.

41:14 Got it. Thanks, that's helpful. And just a follow-up kind of dovetailing on Anna's question on the Propulsion segment, I guess, with the capacity expansions coming on in 4Q, just trying to bridge the gap between the mid-teens revenue outlook this year with the 8% CAGR you've laid out longer-term, is there any reason you can't sustain the double-digit growth into next year as the capacity comes online? Or is there something else to consider in that trajectory? Thanks.

41:54 No. Another good question and Dave can chime in as well. When you do a long-term projection, and we did four years this year, there are so many puts and takes, not only pricing and production capability, but where those engine goes, what the market performs. If the question is, could there be outperformance? The answer is, yes, there absolutely could be. But as we look year in and year out, the CAGR is exactly what it is on average, and coming out of this year and looking ahead, it certainly will have the ability with more engines and a better mix potentially to out stripe that estimate.

42:32 Thank you. And our next question comes from Fred Wightman with Wolfe Research. Please state your question.

42:38 Hey, guys. How are you? Could you just give a little bit more detail on what you're seeing out of Europe from a retail perspective, any of the geopolitical situation rubbing off on people's willingness to spend on some of these discretionary products?

42:53 Yeah, thank you for the question. I think so far, sales are holding up well in Europe across all of our categories. I think obviously there is likely to be a differential between some of the countries that is somewhat more geographically removed from the immediate conflict than others. But so far, things are holding up despite the fact that there continues to be inflationary pressure and obviously sentiment issues in Europe. 43:24 We -- just as in the US, we have more demand for our engines, particularly in Europe than we've been able to satisfy. We have a significant backlog that we need to get through, and similarly, on the P&A side, we have a similar backlog of products that we need to get through. So, we're not seeing softness at the moment, but obviously, because of the -- what's going on in the region, we've got our antenna up.

43:57 Makes sense. And then can you just talk about the J&R transaction, and how getting more involved with the dealership channel sort of fits into your longer-term strategy? Is there something that we should sort of expect a little bit more capital allocation to go to going forward, is it a one-off, how should we think about that?

44:15 Yeah, I think -- a couple of things to think about. One is that, we made two transactions, one was J&R Marine, and then the other with the boat clubs on Lake Lanier. And the Atlanta area is really a very high potential area for Freedom that is -- that was not populated with nearly enough clubs. So, I would think about those two transactions as, first of all, an opportunity for us to get more Freedom clubs in the Atlanta area, significantly more. There's a lot of growth potential. And then, J&R Marine heads four mariners, only two had boat clubs in them. So an opportunity to even more emphasize Freedom and build out Freedom within that acquisition. 45:08 One other things we talked about at our Investor Day was our Boating as a Service ecosystem strategy, we sometimes call Build Around the Boater. What you've seen us do with Freedom is, first of all, it's a great business, it’s stand-alone. The margins are great, the growth is great, but you've seen us now deliberately feeding more engines and boats into Freedom, and on the front side, we use more P&A in Freedom, and you've seen us establish the Boateka pre-owned boat sales platform to get more margin on the -- as boats exit Boateka. So, there is a tremendous opportunity for synergy around Boateka. 45:51 And we have been exploring other ways in which we can add -- synergistic margin and add growth to that ecosystem. And J&R marine allows us to prove out some of those concepts. We'll be a bit more forthcoming on exactly the specific detail, but we need to build some operational muscles, and we needed to do it in the real world to prove out some of those concepts. But it's -- essentially it's an extension of our Boating as a Service ecosystem strategy and that's the majority of it. And as we begin to evolve that more, we'll share more on the specific details.

46:38 And maybe on your capital strategy point, Fred, it's a modest play, in line with the kind of small bolt-on deals we've done, year in and year out, it’s kind of embed it in our existing capital strategy for the year. So, that's how you should think of it from a spend perspective.

46:56 Thank you. Our next question comes from Joe Altobello with Raymond James. Please go ahead.

47:01 Hey. Thanks, guys. Good morning. I guess, first, question, I want to say on the retail outlook for you guys and the industry, given where field inventories are, how much is retail coloring your financial forecast for this year? And maybe how you're thinking about next year? And, I guess, what I'm trying to ask, if the trends that we saw in Q1 persist where the industry is down 11, is there downside to your guide or is it almost independent at this point?

47:28 No, not really. At those levels, as we’ve mentioned, our backlogs that are very high were sold for the year on boats backlogs and engine and P&A are very high. So, I would say that we are extremely robust to most foreseeable developments. Yeah, it's not really coloring our 2022 thoughts at all. And as we get further into the year, obviously, we'll be developing a view on what that looks like for 2023, but at the moment, we have literally not changed anything that we're doing on capacity expansions or any of the other initiatives that were the part of our overall strategy.

48:14 And, Joe, I'd also note that some of the additional color we gave on the pipeline slide today, I mean, there are 4,000 or so retail sold boats that are still sitting in our dealer -- in dealer hands, waiting to be delivered. Those are not in SSI. So it is fair to say, as it always is at this time of the year that the true retail is probably even more dislocated from what SSI is seeing. Now that -- who knows how that's going to shake out, but as Dave said earlier, if the wholesale is there, there is no doubt that we believe the retail will be there as well.

48:54 Okay, it’s very helpful. And just -- maybe to just kind of follow up on that. If I look at your Q2 guidance, there seems to be a lack of earnings flow-through versus what we've seen historically. Are you expecting anything to get worse from a supply chain standpoint? Does that reflect higher interest expense? Why the lack of earnings flow-through, I guess, in this quarter?

49:12 Yeah. Joe, this obviously got a lot of -- a little bit more attention this morning than we anticipated. No, there is no change in our view on the second quarter from January. We're going to incur an extra just shy of $0.10 like $0.08 of interest given the debt that we took out, and the benefit from share repurchases, obviously, will not cover that because that's more back-half loaded, just given the way the math works. So, really, you're getting more interest than anticipated. And to be fair, it's still the second quarter, there is an uncertain environment and we've given ourselves a little bit room for flexibility. 49:53 But no, you should not -- the underlying assumptions of the strength of the market, our ability to deliver and perform have absolutely not changed from January.

50:02 Okay, great. Thanks, guys.

50:05 Thank you. Our next question comes from Eric Wold with B. Riley. Please state your question.

50:11Thanks. Good morning. Just my follow-up is kind of on the comments around the boats price, $50,000 and below, obviously, majority of what you sell. I guess, going to the pricing strategy to cover cost increases, is that across the board kind of evenly with all boat price points? Do you tend to lag somewhat or could you lag somewhat on the lower end those to not lockout buyers or does that strategy not change by price point?

50:45 Well, I think, in the end, what buyers experience is the retail price. So, our price is a component of that, but not the entirety of it. I would say, generally, we are trying to cover our costs, but we are little bit lagging sometimes, I would say, we probably are a little bit lagging in some areas. Certainly, Propulsion, if you think about Propulsion, it is a much larger portion of the cost of a small boat than it is of a large boat. And there's just -- the engine is the highest technology part of an aluminum fishing boat typically, so -- and if you think of what Mercury has been able to do so far, which is really hold pricing at very reasonable levels, as Ryan mentioned earlier, that is obviously more helpful for controlling inflationary costs overall on a small boat than it is on a large boat. On a large boat there are other components that -- so the total built of materials is much beyond the engine. 51:51 So I think by kind of natural means if you like, because of the good control of engine cost and pricing, we are probably controlling costs of smaller, more value orientated boats, more tightly than some of the bigger boats. And certainly, given demand for the bigger boats, there's less immediate thought about any other strategy.

52:24 Thank you. And our next question comes from David MacGregor with Longbow Research. Please go ahead. A - David Foulkes 52:31Yes, good morning. Thanks for taking my questions. Just with respect to the Parts and Accessories business, can you say how -- just how dilutive the acquisitions were to the margins?

52:43 Hey, Dave.

52:44 These acquisitions we talked on?

52:46 The P&A from last year.

52:48 Both from last year. Okay.

52:49 Yeah, we -- consistent with our guide for the year, David, Navico has quite strong gross margins and operating margins that are slightly dilutive to the segment, although still quite accretive to the overall Brunswick. I think what you've seen is, even in the first quarter, you saw probably OpEx come in better than anticipated, certainly better than our internal forecast. And Navico is certainly a place where we are rightsizing kind of SG&A to match the rest of the organization. 53:24 You'll continue to see that throughout the year and even into next year. But there is -- there are certainly some pockets where we can improve, but that's how we look at it. Navico, RELiON, Semahtronix collectively would be still accretive to Brunswick, but slightly dilutive to the overall P&A operating margins.

53:45 Okay, got it. Thanks for that. And then, I guess, just get back to this whole discussion today around 78% of the boats are less than $50,000. I'm not sure if you have sort of access to data through your dealer partners, but any sense of what percentage of sales are based on credit or incorporate credit into the purchase?

54:07 Of the credit transactions that we see, about 50% are bought with credit. But there may be some of the financing that goes on behind the scenes that we're not aware of, but of the ones that we can see, about 50%.

54:27 Thank you. And our next question comes from Derrick Johnson with BMO Capital Markets. Please go ahead.

54:35 Hey, good morning. Thank you. So, when you talked about the delayed deliveries, retail sold boats in some Northern markets, what exactly does that mean? I just want to definitionally because you said it's not an SSI, so they're not registered. So are these just deposits, and really what I'm getting at, are these cancellable?

54:55 No, these are boats that have been bought, but not put in the water. And so, yeah, that are not cancellable, they're fully paid up boats that, for example, in Minnesota, and to a large extent in Canada, there's still ice on the water, so they won't register them until they go in the water. They're fully paid up boats, completely sold, just not registered yet.

55:23 Okay. Okay, got it. Great. And then in terms of your boat business, you talked about aluminum fish -- aluminum freshwater and recreational fiberglass outperforming the quarter. Reasons behind that, and should that continue?

55:43 I think the reason behind it, we have a very strong boat portfolio in that aluminum category. And I think our production has been very solid. So, if you think across our aluminum product lines, Lund is a really premium aluminum freshwater boat, really just almost like the Boston Whaler of the aluminum world, if you like. So sales of that have been really strong and continue to be. 56:12 And I would say that we have also been particularly strong in pontoon, which is a part of our aluminum Boat Group as well. That is a category with extremely high demand and our productivity has been very good despite the backdrop. So, we have a good product range. We've done a lot of product development in that area, which makes our product very fresh. Our production capability has been sustained very well. So yeah, just a combination of good operating and fresh product performance, I think.

56:50 And then, Derrick, from a finance side, I'm more -- I'm as interested in their ability to manufacture the product to meet the design specs, and I would say, I'll call out Sea Ray and Bayliner that have both done a fantastic job of not only manufacturing product to -- that consumers want, but also manufacturing it at the right cost. So you've seen good topline growth and good margin expansion from both of those brands, which has resulted in some of the fiberglass goodness that we've discussed.

57:22 Okay, thanks. And maybe if I could ask just one more, you talked about shows like Miami and Palm Beach, but what about the other shows, say, interior shows like Cleveland or in Minneapolis, how are shows like that going?

57:37 Generally good. Our -- when I last looked, which is fairly recently, our show sales this year were ahead of our show sales last year, not a huge amount ahead, but a bit ahead. And the reason why we emphasize the biggest shows, a couple of reasons: one is, because -- a lot of the regional shows are really dealer shows, and dealers don't have any inventory. So sometimes, dealers won't even attend a show because they have nothing to sell. So, you will see a lot of kind of variability from one regional show to another regional show depending on whether -- I mean, dealers, unless they make additional money, they're not going to go to the show. 58:22 The biggest shows like Miami, are much more organized, the OEMs are much bigger part of the presence of boats there, and those are not dealer boats, they are our boats. So, they provide a much more consistent picture in this environment than the regional shows do. 58:41 We can talk more about regional shows, but you'll just see them more variable depending on who has got inventory.

58:49 Thank you. And at this time I would like to turn the call back to Dave for some concluding remarks.

58:56 Thank you all very much for joining us and for the great questions. I think as you've seen, despite the very dynamic external environment, our business continues to perform exceptionally well, certainly from an operating perspective, but we're also making great progress with the strategic initiatives that support our 2025 plan, including the capacity expansions, new product launches, and the M&A. 59:21 In Q2, we expect to continue to be in this dynamic environment but as you've seen with the portfolio of businesses we have built over several years, the high degree of recurring revenue, the high growth potential, the structurally higher margins that we have, that position us extremely well both for Q2 and the balance of the year. So, we're very -- we remain extremely excited about the year, completely on track with our plans for the year, on track with our plans for 2025, and we're very excited.

59:52 Thank you. Bye-bye.

59:55 Thank you. All parties may now disconnect. Have a great day.