Marine Products Corporation Reports Third Quarter 2011 Financial Results

Oct 26, 2011, 07:20 ET from Marine Products Corporation

ATLANTA, Oct. 26, 2011 /PRNewswire/ -- Marine Products Corporation (NYSE: MPX) announced its unaudited results for the quarter ended September 30, 2011.  Marine Products is a leading manufacturer of fiberglass boats under two brand names: sterndrive and inboard pleasure boats by Chaparral, including H2O Sport and Fish & Ski Boats, SSi and SSX Sportboats, Sunesta Sportdecks, Xtreme Towboats, Signature Cruisers and Premiere Sport Yachts, and outboard sport fishing boats by Robalo.

For the quarter ended September 30, 2011, Marine Products generated net sales of $22,254,000, a 7.4 percent decrease compared to $24,027,000 last year.  The decrease in net sales was due to a 22.0 percent decrease in the number of boats sold, partially offset by a 20.0 percent increase in the average selling price per boat.  Average selling prices improved among most of our product lines.  In particular, average selling prices improved in our Chaparral SSi and SSX Sportboats due to higher unit sales of several of the larger boats within this model lineup.  

Gross profit for the quarter was $4,634,000, or 20.8 percent of net sales, compared to gross profit of $4,076,000, or 17.0 percent of net sales, in the prior year.   The increase in gross profit in the third quarter of 2011 compared to the prior year was the result of a favorable model mix comprised of fewer small boats and more of our larger boats.  This model mix yielded higher average unit selling prices and higher gross profit margins than in the prior year.  To a lesser extent, favorable materials usage variances also improved profitability.  These positive factors were partially offset by reduced production efficiencies from lower production volumes.

Operating profit for the quarter increased to $1,494,000 compared to $1,177,000 in the third quarter of last year due to higher gross profit, partially offset by slightly higher selling, general and administrative expenses.   Net income for the quarter ended September 30, 2011 was $1,200,000, a 20.0 percent increase compared to net income of $1,000,000 in the prior year.  Net income increased primarily due to higher operating profit for the quarter. Diluted earnings per share were $0.03 for both the third quarter of 2011 and the prior year.

Net sales for the nine months ended September 30, 2011 were $78,500,000, a decrease of 2.1 percent, compared to the first nine months of 2010.  Net income for the nine-month period was $3,095,000 or $0.08 earnings per diluted share, compared to $3,385,000, or $0.09 earnings per diluted share in the prior year.

Richard A. Hubbell, Marine Products’ Chief Executive Officer stated, “There were several positive developments during the quarter which improved our financial results and encouraged us regarding the near-term selling environment for our products, in spite of the lower unit sales generated during the quarter.  First, we realized strong unit sales in our Chaparral 327, 287 and 267 SSX models.  These boats carry higher average selling prices and contributed to generating higher gross profit in the third quarter of 2011 than in the third quarter of last year.  In addition, we received strong dealer orders for our new 2012 Chaparral H2O Sport and Fish & Ski Boats at our annual dealer conference. We believe that this new entry-level Chaparral lineup will allow us to achieve a number of our objectives related to improved manufacturing cost efficiencies, meeting dealer requests for entry-level models and increasing retail market share.  Our success during the quarter with some of our larger models, as well as strong indications regarding the near-term future sales of the H2O models have encouraged us to increase production during the fourth quarter in order to meet these meaningful increases in demand.

"During the third quarter our Chaparral and Robalo brands received their fourth consecutive Customer Satisfaction Index (CSI) awards given by the National Marine Manufacturers Association (NMMA).  The NMMA's CSI awards honor manufacturers that measure and strive to improve their customer service.  Recipients of the award maintained a CSI score of 90 percent or higher during the previous year, as measured by responses from surveys sent to all customers who purchased a product during that time.   All of Chaparral's model categories received this award, as well as Robalo's outboard sport fishing category.  We are proud that our customers continue to recognize us for quality products and good service.  Also, we noted that, based on industry reports and our estimates, Chaparral's retail sales increased during the eight-month period ended in August, and we have gained approximately 70 basis points of market share compared to the same period in 2010.  We are very pleased that a variety of our models appeal to different markets and have improved our financial results and increased our market share," concluded Hubbell.

Marine Products Corporation will hold a conference call today, October 26, 2011 at 8:00 a.m. Eastern Time to discuss the results for the third quarter.  Interested parties may listen in by accessing a live webcast in the investor relations section of Marine Products' Web site at www.marineproductscorp.com.  The live conference call can also be accessed by calling (800) 946-0708 or (719) 325-2146 and using the conference ID #8616344.  A replay of the conference call will be available in the investor relations section of Marine Products' Web site beginning approximately two hours after the call.  

Marine Products Corporation (NYSE: MPX) designs, manufactures and distributes premium-branded Chaparral sterndrive and inboard pleasure boats; Premiere Sport Yachts; and Robalo sport fishing boats, and continues to diversify its product line through product innovation and is prepared to consider strategic acquisition targets.  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 Web site 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 regarding our improved outlook on the near-term selling environment for our products; our plans to continue to build on our success as we enter into our 2012 model year, and our belief that we are prepared to capitalize on opportunities to increase our market share and to generate superior financial performance to 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 possible decreases in the level of consumer confidence and available funds impacting discretionary spending, increased interest rates and fuel prices, 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, 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' Form 10-K, filed with the Securities and Exchange Commission for the year ending December 31, 2010.

For information contact: BEN M. PALMER Chief Financial Officer (404) 321-7910 irdept@marineproductscorp.com JIM LANDERS Vice President, Corporate Finance (404) 321-2162 jlanders@marineproductscorp.com

MARINE PRODUCTS CORPORATION AND SUBSIDIARIES 

CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands except per share data)

Periods ended September 30, (Unaudited)

Third Quarter

Nine Months

2011

2010

% BETTER (WORSE)

2011

2010

% BETTER (WORSE)

Net Sales

$

22,254

$

24,027

(7.4)

%

$

78,500

$

80,197

(2.1)

%

Cost of Goods Sold

17,620

19,951

11.7

64,499

66,079

2.4

Gross Profit

4,634

4,076

13.7

14,001

14,118

(0.8)

Selling, General and Administrative Expenses

3,140

2,899

(8.3)

10,684

10,812

1.2

Operating Profit

1,494

1,177

26.9

3,317

3,306

0.3

Interest Income

233

278

(16.2)

741

876

(15.4)

Income Before Income Taxes

1,727

1,455

18.7

4,058

4,182

(3.0)

Income Tax Provision

527

455

(15.8)

963

797

(20.8)

Net Income

$

1,200

$

1,000

20.0

%

$

3,095

$

3,385

(8.6)

%

EARNINGS PER SHARE

  Basic  

$

0.03

$

0.03

0.0

%

$

0.09

$

0.09

0.0

%

  Diluted  

$

0.03

$

0.03

0.0

%

$

0.08

$

0.09

(11.1)

%

AVERAGE SHARES OUTSTANDING

  Basic  

36,404

36,190

36,362

36,173

  Diluted  

36,574

36,586

36,781

36,638

MARINE PRODUCTS CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE  SHEETS

At September 30, (Unaudited)

(in thousands)

2011

2010

ASSETS

Cash and cash equivalents

$

5,453

$

9,053

Marketable securities

14,751

18,626

Accounts receivable, net

2,090

1,203

Inventories

23,140

22,472

Deferred income taxes

874

1,138

Prepaid expenses and other current assets

1,323

1,187

 Total current assets

47,631

53,679

Property, plant and equipment, net

11,862

12,563

Goodwill

3,308

3,308

Other intangibles, net

465

465

Marketable securities

40,792

28,275

Deferred income taxes

3,143

3,248

Other assets

4,943

5,019

 Total assets

$

112,144

$

106,557

LIABILITIES AND STOCKHOLDERS' EQUITY

Accounts payable

$

7,046

$

5,635

Accrued expenses and other liabilities

9,199

9,520

 Total current liabilities

16,245

15,155

Pension liabilities

5,368

5,185

Other long-term liabilities

429

423

 Total liabilities

22,042

20,763

Common stock

3,738

3,709

Capital in excess of par value

979

22

Retained earnings

86,317

82,754

Accumulated other comprehensive loss

(932)

(691)

 Total stockholders' equity

90,102

85,794

 Total liabilities and stockholders' equity

$

112,144

$

106,557

SOURCE Marine Products Corporation



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