ATLANTA, April 24, 2019 /PRNewswire/ -- Marine
Products Corporation (NYSE: MPX) announced its unaudited results
for the quarter ended March 31,
2019. Marine Products is a leading manufacturer of fiberglass
boats under three brand names: Chaparral, Robalo and Vortex.
Chaparral's sterndrive models include Signature Cruisers, SSX and
SSI Sportboats, Sunesta Sportdecks and H2O Sport and Ski & Fish
Boats. The Chaparral Surf Series includes select models from
the SSX, SSI, Sunesta and H2O lineups. Chaparral's outboard
offerings include OSX Sport Luxury, SunCoast Sportdecks and select
H2O models. In addition, Chaparral offers jet powered boats with
its Vortex Jet Boats lineup. Robalo builds outboard sport
fishing boats, which include center console, dual console,
walkaround cabin and Cayman bay boat models.
For the quarter ended March 31,
2019, Marine Products generated net sales of $83,053,000, a 7.1 percent increase compared to
$77,536,000 in the same period of the
prior year. The increase in net sales was due to a 14.8
percent increase in average selling prices and an increase in parts
and accessories sales, partially offset by a 6.8 percent decrease
in the number of units sold. In general, sales of smaller boats
accounted for the decrease in unit sales during the quarter.
Gross profit for the first quarter of 2019 was $18,699,000, a 5.9 percent increase compared to
gross profit of $17,651,000 in the
same period of the prior year. The increase in gross profit
was due to higher net sales. Gross margin as a percentage of
net sales was 22.5 percent in the first quarter of 2019, compared
with 22.8 percent in the first quarter of 2018. Gross margin
as a percentage of net sales declined slightly due to higher labor
costs as a percentage of net sales during the first quarter of 2019
as compared to the same period in 2018.
Operating profit for the first quarter of 2019 was $8,868,000, a decrease of 1.8 percent compared
with operating profit of $9,033,000
in the first quarter of last year. Selling, general and
administrative expenses were $9,831,000 in the first quarter of 2019, compared
with $8,618,000 in the first quarter
of 2018. These expenses increased due to expenses that increase
with higher sales and profitability, such as incentive
compensation, as well as higher research and development expenses
which support new product development. Selling, general and
administrative expenses as a percentage of net sales were 11.8
percent in the first quarter of 2019 compared with 11.1 percent of
net sales during the first quarter of 2018.
Net income for the first quarter of 2019 was $7,469,000, a decrease of $140,000, or 1.8 percent, compared with net
income of $7,609,000 in the first
quarter of 2018. Diluted earnings per share were $0.22 in the first quarters of 2019 and 2018. The
effective tax rate for the first quarter of 2019 was 16.3 percent,
approximately the same as the effective tax rate of 16.1 percent
for the first quarter of the prior year.
Richard A. Hubbell, Marine
Products' President and Chief Executive Officer stated, "During the
first quarter, we sold fewer of our small boats to our dealer
network, resulting in a 6.8 percent decrease in unit sales. Sales
declines were concentrated in our smallest Robalo models and
Chaparral H2O models. By contrast, we realized increased sales of
larger Chaparral H2O models, larger Chaparral SSX and Robalo
models, and generated our first sales of Chaparral's 300 OSX Sport
Luxury outboards. The model mix that resulted from these shifts
allowed us to generate an increase in net sales and gross
profit.
"We believe that the remainder of the 2019 retail selling season
will be fairly strong, but we are closely monitoring retail demand
among our various products. At the end of the first quarter, our
dealer inventories were comparable to inventory levels at the same
time in 2018. Unit order backlog was moderately lower at the end of
the quarter, so we have reduced production slightly in order to
maintain healthy dealer inventory levels in preparation for the
2020 model year. I am pleased to report that Marine Products
Corporation continues to maintain industry-leading market share.
For the 12 months ended December 31,
2018, Chaparral's sterndrive products continued to hold the
highest market share in their size category. Robalo continued to
hold the second-highest market share in its category, and the
combination of Robalo and Chaparral's outboard boats held 6.8
percent of their market in 2018, the third highest in that
category. We are proud of the successes of our new products during
the 2019 model year, and the continued strong market share in these
categories confirms the appeal of our new designs among our
customer base. During the first quarter of 2019 we repurchased
263,805 shares of our common stock on the open market. In spite of
this use of cash, we finished the quarter with $18.3 million in cash, an increase of
$1.9 million compared to cash and
marketable securities at the end of 2018," concluded Hubbell.
Marine Products Corporation will hold a conference call today,
April 24, 2019, 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 www.marineproductscorp.com. Additionally, the live
conference call can accessed by calling (877) 260-1479, or for
international callers (334) 323-0522, and using the conference ID
#3298022. 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, jet drive 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 to generate superior financial
performance to build long-term shareholder value. For more
information on Marine Products Corporation visit our website at
www.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,
statements regarding our belief that the remainder of the 2019
retail selling season will be fairly strong, the diversification of
our product lines through product innovation, and our ability to
capitalize on opportunities to increase our market share, generate
superior financial performance and build long-term shareholder
value. These statements involve known and unknown risks,
uncertainties and other factors which may cause the actual results,
performance or achievements of Marine Products Corporation to be
materially different from any future results, performance or
achievements expressed or implied in such forward-looking
statements. These risks include the strength of the 2019
retail selling season, the level of demand for our smaller
products, possible decreases in the level of consumer confidence
and available funds impacting discretionary spending, increased
interest rates and fuel prices, the recent imposition of
retaliatory tariffs on U.S. manufactured products by certain
foreign countries in response to U.S. tariffs on imported steel and
aluminum from such countries, weather conditions, changes in
consumer preferences, deterioration in the quality of Marine
Products' network of independent boat dealers or availability of
financing of their inventory, continued weakness in the sterndrive
recreational boat market, and competition from other boat
manufacturers and dealers. 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, 2018.
For information
contact:
|
|
BEN M.
PALMER
|
JIM
LANDERS
|
Chief Financial
Officer
|
Vice President,
Corporate Finance
|
(404)
321-7910
|
(404)
321-2162
|
irdept@marineproductscorp.com
|
jlanders@marineproductscorp.com
|
MARINE PRODUCTS
CORPORATION AND SUBSIDIARIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONSOLIDATED
STATEMENTS OF OPERATIONS (In thousands except per share
data)
|
|
Period ended March
31, (Unaudited)
|
|
First
Quarter
|
|
|
|
|
|
2019
|
|
|
2018
|
|
% BETTER
(WORSE)
|
|
Net
Sales
|
$
|
83,053
|
|
$
|
77,536
|
|
7.1
|
%
|
Cost of Goods
Sold
|
|
64,354
|
|
|
59,885
|
|
(7.5)
|
|
Gross
Profit
|
|
18,699
|
|
|
17,651
|
|
5.9
|
|
Selling, General and
Administrative Expenses
|
|
9,831
|
|
|
8,618
|
|
(14.1)
|
|
Operating
Profit
|
|
8,868
|
|
|
9,033
|
|
(1.8)
|
|
Interest
Income
|
|
57
|
|
|
33
|
|
72.7
|
|
Income Before Income
Taxes
|
|
8,925
|
|
|
9,066
|
|
(1.6)
|
|
Income Tax
Provision
|
|
1,456
|
|
|
1,457
|
|
0.1
|
|
Net
Income
|
$
|
7,469
|
|
$
|
7,609
|
|
(1.8)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EARNINGS PER
SHARE
|
|
|
|
|
|
|
|
|
Basic
|
$
|
0.22
|
|
$
|
0.22
|
|
0.0
|
%
|
Diluted
|
$
|
0.22
|
|
$
|
0.22
|
|
0.0
|
%
|
|
|
|
|
|
|
|
|
|
AVERAGE SHARES
OUTSTANDING
|
|
|
|
|
|
|
|
|
Basic
|
|
34,243
|
|
|
34,607
|
|
|
|
Diluted
|
|
34,243
|
|
|
34,607
|
|
|
|
MARINE PRODUCTS
CORPORATION AND SUBSIDIARIES
|
|
|
|
|
|
|
|
|
|
|
|
CONSOLIDATED
BALANCE SHEETS
|
|
|
|
|
|
At March 31,
(Unaudited)
|
|
(in
thousands)
|
|
|
2019
|
|
|
2018
|
ASSETS
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
18,347
|
|
$
|
9,929
|
Marketable
securities
|
|
-
|
|
|
3,277
|
Accounts receivable,
net
|
|
9,894
|
|
|
7,812
|
Inventories
|
|
47,824
|
|
|
44,040
|
Income taxes
receivable
|
|
452
|
|
|
1,120
|
Prepaid expenses and
other current assets
|
|
1,127
|
|
|
1,312
|
Total current
assets
|
|
77,644
|
|
|
67,490
|
Property, plant and
equipment, net
|
|
15,155
|
|
|
14,110
|
Goodwill
|
|
3,308
|
|
|
3,308
|
Other intangibles,
net
|
|
465
|
|
|
465
|
Marketable
securities
|
|
-
|
|
|
8,235
|
Deferred income
taxes
|
|
3,427
|
|
|
3,505
|
Other
assets
|
|
10,795
|
|
|
9,680
|
Total
assets
|
$
|
110,794
|
|
$
|
106,793
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
Accounts
payable
|
$
|
12,417
|
|
$
|
12,998
|
Accrued expenses and
other liabilities
|
|
15,496
|
|
|
15,561
|
Total current
liabilities
|
|
27,913
|
|
|
28,559
|
Long-term pension
liabilities
|
|
8,073
|
|
|
6,616
|
Other long-term
liabilities
|
|
578
|
|
|
263
|
Total
liabilities
|
|
36,564
|
|
|
35,438
|
Common
stock
|
|
3,413
|
|
|
3,457
|
Capital in excess of
par value
|
|
-
|
|
|
-
|
Retained
earnings
|
|
73,382
|
|
|
69,852
|
Accumulated other
comprehensive loss
|
|
(2,565)
|
|
|
(1,954)
|
Total
stockholders' equity
|
|
74,230
|
|
|
71,355
|
Total
liabilities and stockholders' equity
|
$
|
110,794
|
|
$
|
106,793
|
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SOURCE Marine Products Corporation