ATLANTA, July 26,
2023 /PRNewswire/ -- Marine Products Corporation
(NYSE: MPX) announced its unaudited results for the quarter ended
June 30, 2023. Marine Products
is a leading manufacturer of fiberglass boats under the brand names
of Chaparral and Robalo. Chaparral's sterndrive models include SSi
and SSX, along with the Chaparral Surf Series. Chaparral's
outboard offerings include OSX Luxury Sportboats and SSi outboard
models. Robalo builds an array of outboard sport fishing boats,
which include center consoles, dual consoles and Cayman Bay Boat
models.
For the quarter ended June 30,
2023, Marine Products generated net sales of $116.2 million, a 21 percent increase compared to
$95.8 million in the same
quarter of the prior year. The increase in net sales was due to an
11 percent increase in the number of boats sold during the quarter
and a 10 percent increase in the average selling price per boat, as
well as an increase in parts and accessories sales. Unit sales
increased during the quarter compared to the prior year as we
continued to clear inventory of partially completed units caused by
supply chain disruptions. These deliveries also helped to satisfy
our dealers' inventory needs during the retail selling season.
Average selling prices increased primarily due to a favorable
model mix and price increases to cover increased costs including
primarily materials and components. Unit sales increased
within both our Chaparral and Robalo brands.
Gross profit for the second quarter of 2023 was $28.7 million compared to $23.0 million in the second quarter of the prior
year. Gross margin as a percentage of net sales was 24.7 percent in
the second quarter of 2023 compared to 24.0 percent in the prior
year period. The increase in gross margin was due to improved
operating efficiencies and a favorable model mix. Operating profit
for the second quarter of 2023 was $16.5
million, an increase of 26 percent compared to operating
profit of $13.1 million in the second
quarter of the prior year. Selling, general and
administrative expenses were $12.2
million in the second quarter of 2023 compared to
$9.9 million in the second quarter of
2022. These expenses were 10.5 percent of net sales in the second
quarter of 2023 compared to 10.3 percent in the second quarter of
2022. Selling, general and administrative expenses increased due to
costs that vary with sales and profitability, such as incentive
compensation, sales commissions and warranty expense. Net interest
income of $723 thousand increased
significantly compared to the prior year due to a higher cash
balance and higher interest yields. Net income for the second
quarter of 2023 was $14.3 million, an
increase of 44 percent compared to net income of $10.0 million in the second quarter of 2022.
Earnings before interest, taxes, depreciation and amortization
(EBITDA)1 for the second quarter of 2023 was
$17.1 million, or 14.7 percent of net
sales, an increase of $3.5 million or
26 percent, compared to the second quarter of 2022.
Diluted earnings per share in the second quarter of 2023 were
$0.42, an increase of 45 percent
compared to $0.29 in the second
quarter of the prior year. The effective tax rate was 16.8 percent
in the second quarter of 2023 compared to 24.0 percent in the
second quarter of 2022. The decrease in the effective tax rate is
primarily due to favorable permanent adjustments as well as
beneficial discrete adjustments.
Net sales for the six months ended June
30, 2023 were $235.1 million,
an increase of 36 percent compared to the first six months of
2022. Net income for the six-month period was $25.9 million or $0.75 diluted earnings per share, compared to net
income of $17.0 million or
$0.50 diluted earnings per share in
the comparable prior year period.
"Second quarter trends remained favorable, although the retail
selling season started later than normal due to colder weather in
many parts of the country," stated Ben M.
Palmer, Marine Products' President and Chief Executive
Officer. "Dealer inventories remain at the lower end of historical
ranges at this time of the year which allow dealers to meet current
demand and place orders for 2024 models. Indicators of dealer
demand continue to be positive regarding the upcoming model year
but there are concerns over consumer sentiment arising from higher
interest rates and the possibility of an economic slowdown.
"Our supply chain and logistical issues remain a challenge in
specific components but have improved compared to recent years.
These improvements allowed us to ship more units than we produced
during the quarter and are reflected in our higher unit sales,
lower inventory balance, and our strong cash balance at the end of
the second quarter," concluded Palmer.
Marine Products Corporation will hold a conference call today,
July 26, 2023, at 8:00 a.m. Eastern Time to discuss the results for
the quarter. Interested parties may listen in by accessing a
live webcast in the investor relations section of Marine Products'
website at marineproductscorp.com. Additionally, the live
conference call can be accessed by calling (888) 660-6357, or (929)
201-6127 for international callers, and using conference ID number
9979064. A replay will be available in the investor relations
section of Marine Products' website beginning approximately two
hours after the call.
Marine Products Corporation (NYSE: MPX) designs, manufactures
and distributes premium-branded Chaparral sterndrive and outboard
pleasure boats, and Robalo outboard sport fishing boats. The
Company continues to diversify its product lines through product
innovation. With premium brands, a solid capital structure, and a
strong independent dealer network, Marine Products Corporation is
prepared to capitalize on opportunities to increase its market
share and generate superior financial performance to continue
building long-term shareholder value. For more information on
Marine Products Corporation visit our website at
MarineProductsCorp.com.
Certain statements and information included in this press
release constitute "forward-looking statements" within the meaning
of the Private Securities Litigation Reform Act of 1995. Such
forward-looking statements include statements that look forward in
time or express management's beliefs, expectations or hopes.
In particular, such statements include, without limitation, the
statements regarding (i) our belief that the retail selling season
was negatively impacted by colder weather in many parts of the
country, (ii) low dealer inventories allow dealers to place orders
for 2024 models, and (iii) indicators of dealer demand remain
positive but there are concerns over consumer sentiment arising
from higher interest rates or an economic slowdown. Additional
discussion of factors that could cause the actual results to differ
materially from management's projections, forecasts, estimates and
expectations is contained in Marine Products' Annual Report on Form
10-K, filed with the U.S. Securities and Exchange Commission (the
"SEC") for the year ended December 31,
2022.
For information about Marine Products Corporation or this event,
please contact:
Michael L. Schmit
Chief Financial Officer
(404) 321-7910
irdept@marineproductscorp.com
Jim Landers
Vice President Corporate Services
(404) 321-2162
jlanders@marineproductscorp.com
____________________________
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1 EBITDA is
a financial measure which does not conform to GAAP. Additional
disclosure regarding this non-GAAP financial measure and its
reconciliation to net income, the nearest GAAP financial measure,
is disclosed in Appendix A to this press release.
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MARINE PRODUCTS CORPORATION AND
SUBSIDIARIES
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CONSOLIDATED
STATEMENTS OF OPERATIONS (In thousands except per share
data)
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Periods ended June 30,
(Unaudited)
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Second Quarter
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Six Months
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2023
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2022
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BETTER
(WORSE)
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2023
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2022
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BETTER
(WORSE)
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Net sales
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$
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116,158
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$
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95,813
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21.2
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%
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$
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235,072
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$
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172,425
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36.3
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%
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Cost of goods
sold
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87,502
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72,816
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(20.2)
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177,394
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131,033
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(35.4)
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Gross
profit
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28,656
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22,997
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24.6
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57,678
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41,392
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39.3
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Selling, general and
administrative expenses
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12,173
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9,883
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(23.2)
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26,706
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19,123
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(39.7)
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Operating
profit
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16,483
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13,114
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25.7
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30,972
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22,269
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39.1
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Interest income
(expense)
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723
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(7)
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N/M
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1,206
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(24)
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N/M
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Income before income
taxes
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17,206
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13,107
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31.3
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32,178
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22,245
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44.7
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Income tax
provision
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2,885
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3,152
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8.5
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6,308
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5,227
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(20.7)
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Net income
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$
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14,321
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$
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9,955
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43.9
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%
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$
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25,870
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$
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17,018
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52.0
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%
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EARNINGS PER SHARE
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Basic
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$
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0.42
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$
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0.29
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44.8
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%
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$
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0.75
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$
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0.50
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50.0
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%
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Diluted
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$
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0.42
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$
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0.29
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44.8
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%
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$
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0.75
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$
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0.50
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50.0
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%
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AVERAGE SHARES OUTSTANDING
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Basic
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34,458
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34,191
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34,419
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34,146
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Diluted
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34,458
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34,191
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34,419
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34,146
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MARINE PRODUCTS CORPORATION AND
SUBSIDIARIES
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CONSOLIDATED BALANCE
SHEETS
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(in
thousands)
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JUNE 30,
2023
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DECEMBER 31,
2022
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(Unaudited)
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ASSETS
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Cash and cash
equivalents
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$
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66,215
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$
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43,171
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Accounts receivable,
net
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12,354
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5,340
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Inventories
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61,496
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73,015
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Income taxes
receivable
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230
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28
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Prepaid expenses and
other current assets
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2,473
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3,444
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Total current
assets
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142,768
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124,998
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Property, plant and
equipment, net
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21,019
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14,965
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Goodwill
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3,308
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3,308
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Other intangibles,
net
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465
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465
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Deferred income
taxes
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7,919
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6,027
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Other assets
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14,798
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13,952
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Total
assets
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$
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190,277
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$
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163,715
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LIABILITIES AND STOCKHOLDERS'
EQUITY
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Accounts
payable
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$
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8,565
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$
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8,250
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Accrued expenses and
other liabilities
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19,852
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15,340
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Total current
liabilities
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28,417
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23,590
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Retirement plan
liabilities
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16,514
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14,440
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Other long-term
liabilities
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1,649
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1,304
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Total
liabilities
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46,580
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39,334
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Common
stock
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3,447
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3,422
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Capital in excess of
par value
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-
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-
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Retained
earnings
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140,262
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122,954
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Accumulated other
comprehensive loss
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(12)
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(1,995)
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Total
stockholders' equity
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143,697
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124,381
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Total
liabilities and stockholders' equity
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$
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190,277
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$
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163,715
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Appendix A
Marine Products Corporation has used the non-GAAP financial
measure of earnings before interest, taxes, depreciation and
amortization (EBITDA) in today's earnings release, and anticipates
using EBITDA in today's earnings conference call. EBITDA
should not be considered in isolation or as a substitute for
operating income, net income or other performance measures prepared
in accordance with GAAP.
Marine Products Corporation uses EBITDA as a measure of
operating performance because it allows us to compare performance
consistently over various periods without regard to changes in our
capital structure.
A non-GAAP financial measure is a numerical measure of financial
performance, financial position, or cash flows that either 1)
excludes amounts, or is subject to adjustments that have the effect
of excluding amounts, that are included in the most directly
comparable measure calculated and presented in accordance with GAAP
in the statement of operations, balance sheet or statement of cash
flows, or 2) includes amounts, or is subject to adjustments that
have the effect of including amounts, that are excluded from the
most directly comparable measure so calculated and presented. Set
forth below is a reconciliation of EBITDA with Net Income, the most
comparable GAAP measure. This reconciliation also appears on
Marine Products Corporation's investor website, which can be found
on the Internet at marineproductscorp.com.
(Unaudited)
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|
|
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|
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Periods ended June
30,
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Three Months Ended
|
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Six Months Ended
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(In
thousands)
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2023
|
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2022
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2023
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2022
|
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Reconciliation of Net Income to
EBITDA
|
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|
|
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Net Income
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$
|
14,321
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$
|
9,955
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$
|
25,870
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$
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17,018
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Add:
|
|
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|
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|
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|
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Income tax
provision
|
|
2,885
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3,152
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|
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6,308
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|
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5,227
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Depreciation and
amortization
|
|
617
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464
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1,140
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|
936
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Less:
|
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|
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Interest income
(expense)
|
|
723
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(7)
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1,206
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(24)
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EBITDA
|
$
|
17,100
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$
|
13,578
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$
|
32,112
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$
|
23,205
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SOURCE Marine Products Corporation