ATLANTA, April 29, 2020 /PRNewswire/ -- Marine
Products Corporation (NYSE: MPX) announced its unaudited results
for the quarter ended March 31,
2020. Marine Products is a leading manufacturer of fiberglass
boats under three brand names: Chaparral, Robalo and Vortex.
Chaparral's sterndrive models include SSi and SSX, along with the
Chaparral Surf Series. Chaparral's outboard offerings include
various models, such as OSX Luxury Sportboats, the 257 SSX OB, five
SSi outboard models and SunCoast Sportdecks. Robalo builds an array
of outboard sport fishing boats, which include center consoles,
dual consoles and Cayman Bay Boat models. Chaparral also
offers jet powered boats under the Vortex brand name.
For the quarter ended March 31,
2020, Marine Products generated net sales of $59,119,000, a 28.8 percent decrease compared to
$83,053,000 in the same period of the
prior year. The decrease in net sales was due to a 28.9
percent decrease in the number of units sold during the quarter as
compared to the prior year. Unit sales declined in every product
category with the exception of our Chaparral OSX Luxury
Sportboats.
Gross profit for the first quarter of 2020 was $12,107,000, a 35.3 percent decrease compared to
gross profit of $18,699,000 in the
same period of the prior year. Gross margin as a percentage of net
sales was 20.5 percent in the first quarter of 2020 compared to
22.5 percent in the first quarter of 2019. Gross margin as a
percentage of net sales declined due to manufacturing cost
inefficiencies caused by lower production during the first quarter
of 2020 as compared to the same period in 2019.
Operating profit for the first quarter of 2020 was $4,854,000, a decrease of 45.3 percent compared
with operating profit of $8,868,000
in the first quarter of last year. Selling, general and
administrative expenses were $7,253,000 in the first quarter of 2020 compared
to $9,831,000 in the first quarter of
2019. These expenses decreased due to costs that vary with sales
and profitability, such as incentive compensation and warranty
expense. Selling, general and administrative expenses as a
percentage of net sales were 12.3 percent in the first quarter of
2020 compared to 11.8 percent of net sales during the first quarter
of 2019.
Net income for the first quarter of 2020 was $4,208,000, a decrease of $3,261,000, or 43.7 percent, compared with net
income of $7,469,000 in the first
quarter of 2019. Diluted earnings per share were $0.12 in the first quarter of 2020 compared to
$0.22 in the first quarter of 2019.
The effective tax rate for the first quarter of 2020 was 14.4
percent, a slight decrease compared to an effective tax rate of
16.3 percent for the first quarter of the prior year.
Richard A. Hubbell, Marine
Products' President and Chief Executive Officer stated, "We
decreased production during the first quarter of 2020 in order to
reduce dealer inventories. We accomplished this goal, as dealer
inventories are almost 10 percent lower at the end of the first
quarter of 2020 compared to the prior year. I am pleased to report
that Chaparral continues to be a market share leader in its
sterndrive recreational boat category. Robalo also continues to be
market share leader in the outboard category, and the combination
of Chaparral and Robalo outboard models held the highest outboard
boat market share in their size category.
"Early during the first quarter, there were many indications
that the 2020 retail selling season would be strong, and we had
initially made plans to increase production in February. During
March, however, it became clear that the COVID-19 pandemic would
cause short-term disruptions in the 2020 retail selling season. As
we announced at the end of the quarter, we temporarily suspended
our manufacturing operations out of concern for the well-being of
our employees and their families, and at the recommendation of
local and state authorities. We have closely monitored our dealers'
activities and are communicating with their floorplan lenders
frequently. During this time, we are providing consistent
communication to our dealer network and have assisted their efforts
to conduct virtual walkthroughs and private viewing appointments.
We are pleased to note that our web traffic and number of social
media engagements have increased significantly during the past few
weeks. Since the collapse in economic activity caused by the global
pandemic occurred at the beginning of the boating retail selling
season, we are managing our operations to balance the tremendous
near-term decline in demand against the needs of our dealers whose
customers want to purchase a boat during the retail selling season.
At this time, we plan to resume operations in our manufacturing
facility on May 4, though this
decision will be influenced by the recommendations of state and
local authorities, our assessment of our production supply chain,
and indications of market demand.
"In spite of clear near-term weakness in our financial results,
we have an enduring belief in the long-term appeal of recreational
boating to the American consumer. In fact, several of our dealers
reported extremely strong sales in March and April, as customers
temporarily left homes in urban areas to shelter in place at lake
vacation homes and engage in outdoor activities that did not
involve large groups of people in uncontrolled environments. We
believe that crises such as the present one reinforce the appeal of
our products. We appreciate the short-term concessions that have
been granted by our dealers' floorplan lenders which will assist
them in the current retail selling environment, and we continue to
conduct our new product development efforts so that we maintain our
position as a market leader. We appreciate the support of our
employees and community as we navigate this unprecedented
environment, and as we announced several weeks ago, a foundation
controlled and funded by our majority shareholder made a
significant contribution to the community in which our production
facilities operate," concluded Hubbell.
Marine Products Corporation will hold a conference call today,
April 29, 2020, at 8:00 a.m. Eastern Time to discuss the results for
the first 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
(800) 458-4121 or (856) 344-9290 for international callers, and
using conference ID number 7335339. 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, Vortex jet drive 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
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
statement that the COVID-19 pandemic's disruption in the 2020
retail selling season would be short-term, our plan to resume
production on May 4, and that events
such as the COVID-19 pandemic reinforce the appeal of recreational
boating for the American consumer. 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 duration
of our temporary production suspension, the duration of the
COVID-19 crisis, its impact on the U.S. and global economy and its
disruption of our supply chain, decreases in the level of consumer
confidence and available funds impacting discretionary spending,
unavailability of credit, increased interest rates and fuel prices,
weather conditions, changes in consumer preferences, deterioration
in the quality of Marine Products' network of independent boat
dealers, and the ability of Marine Products' network of independent
boat dealers to finance their inventory. 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,
2019.
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
|
|
|
|
|
|
2020
|
|
|
2019
|
|
% BETTER
(WORSE)
|
|
Net
Sales
|
$
|
59,119
|
|
$
|
83,053
|
|
(28.8)
|
%
|
Cost of Goods
Sold
|
|
47,012
|
|
|
64,354
|
|
26.9
|
|
Gross
Profit
|
|
12,107
|
|
|
18,699
|
|
(35.3)
|
|
Selling, General and
Administrative Expenses
|
|
7,253
|
|
|
9,831
|
|
26.2
|
|
Operating
Profit
|
|
4,854
|
|
|
8,868
|
|
(45.3)
|
|
Interest
Income
|
|
61
|
|
|
57
|
|
7.0
|
|
Income Before Income
Taxes
|
|
4,915
|
|
|
8,925
|
|
(44.9)
|
|
Income Tax
Provision
|
|
707
|
|
|
1,456
|
|
51.4
|
|
Net
Income
|
$
|
4,208
|
|
$
|
7,469
|
|
(43.7)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EARNINGS PER
SHARE
|
|
|
|
|
|
|
|
|
Basic
|
$
|
0.12
|
|
$
|
0.22
|
|
(45.5)
|
%
|
Diluted
|
$
|
0.12
|
|
$
|
0.22
|
|
(45.5)
|
%
|
|
|
|
|
|
|
|
|
|
AVERAGE SHARES
OUTSTANDING
|
|
|
|
|
|
|
|
|
Basic
|
|
33,940
|
|
|
34,243
|
|
|
|
Diluted
|
|
33,940
|
|
|
34,243
|
|
|
|
MARINE PRODUCTS
CORPORATION AND SUBSIDIARIES
|
|
|
|
|
|
|
|
|
|
|
|
CONSOLIDATED
BALANCE SHEETS
|
|
|
|
|
|
At March 31,
(Unaudited)
|
|
(in
thousands)
|
|
|
2020
|
|
|
2019
|
ASSETS
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
20,064
|
|
$
|
18,347
|
Accounts receivable,
net
|
|
9,170
|
|
|
9,894
|
Inventories
|
|
45,946
|
|
|
47,824
|
Income taxes
receivable
|
|
733
|
|
|
452
|
Prepaid expenses and
other current assets
|
|
1,442
|
|
|
1,127
|
Total current
assets
|
|
77,355
|
|
|
77,644
|
Property, plant and
equipment, net
|
|
14,925
|
|
|
15,155
|
Goodwill
|
|
3,308
|
|
|
3,308
|
Other intangibles,
net
|
|
465
|
|
|
465
|
Pension
assets
|
|
6,662
|
|
|
7,141
|
Deferred income
taxes
|
|
3,429
|
|
|
3,427
|
Other
assets
|
|
3,681
|
|
|
3,654
|
Total
assets
|
$
|
109,825
|
|
$
|
110,794
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
Accounts
payable
|
$
|
9,803
|
|
$
|
12,417
|
Accrued expenses and
other liabilities
|
|
13,708
|
|
|
15,496
|
Total current
liabilities
|
|
23,511
|
|
|
27,913
|
Long-term pension
liabilities
|
|
8,805
|
|
|
8,073
|
Other long-term
liabilities
|
|
523
|
|
|
578
|
Total
liabilities
|
|
32,839
|
|
|
36,564
|
Common
stock
|
|
3,397
|
|
|
3,413
|
Capital in excess of
par value
|
|
-
|
|
|
-
|
Retained
earnings
|
|
76,218
|
|
|
73,382
|
Accumulated other
comprehensive loss
|
|
(2,629)
|
|
|
(2,565)
|
Total
stockholders' equity
|
|
76,986
|
|
|
74,230
|
Total
liabilities and stockholders' equity
|
$
|
109,825
|
|
$
|
110,794
|
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content:http://www.prnewswire.com/news-releases/marine-products-corporation-reports-first-quarter-2020-financial-results-301048833.html
SOURCE Marine Products Corporation