ATLANTA, July 29 /PRNewswire-FirstCall/ -- Marine Products
Corporation (NYSE:MPX) announced its unaudited results for the
quarter ended June 30, 2009. Marine Products is a leading
manufacturer of fiberglass boats under two brand names: sterndrive
and inboard pleasure boats by Chaparral, including Premiere Sport
Yachts, SSi Wide Techs, SSX Bowriders, Sunesta Wide Techs and
Xtremes, Signature Cruisers, and outboard sport fishing boats by
Robalo. For the quarter ended June 30, 2009, Marine Products
generated net sales of $12,618,000, a 77.4 percent decrease
compared to $55,734,000 last year. The decrease in net sales was
due to a decrease of 80.4 percent in the number of boats sold,
partially offset by a 9.6 percent increase in the average gross
selling price per boat. Gross profit for the quarter was $462,000,
or 3.7 percent of net sales, compared to $11,027,000, or 19.8
percent of net sales, in the prior year. Gross profit as a
percentage of net sales declined compared to the prior year due to
very low production levels, which resulted in significant
production inefficiencies. Unit sales among all models declined
significantly compared to the prior year, due to our dealers
meeting retail demand by liquidating existing inventory. Operating
loss for the quarter was $6,310,000, compared to an operating
profit of $4,407,000 in the second quarter last year due to lower
gross profit and higher selling, general and administrative
expenses. Selling, general and administrative expenses in the
second quarter of 2009 increased by 2.3 percent compared to the
prior year due to $4,255,000 in expenses related to our previously
discussed dealer inventory reduction efforts, partially offset by
decreases in other expenses which vary with sales and
profitability, as well as the impact of ongoing cost reduction
measures. Net loss for the quarter ended June 30, 2009 was
$3,835,000, a decrease compared to net income of $3,896,000 in the
prior year. The net loss was due to an operating loss and lower
interest income, partially offset by an income tax benefit. Diluted
loss per share for the quarter was $0.11, a decrease compared to
$0.11 diluted earnings per share in the prior year. Net sales for
the six months ended June 30, 2009 were $26,424,000, a 78.2 percent
decrease compared to the first six months of 2008. Net loss for the
six-month period was $6,321,000 or $0.18 loss per diluted share
compared to net income of $8,028,000 or $0.22 diluted earnings per
share in the prior year. Richard A. Hubbell, Marine Products' Chief
Executive Officer, stated, "Marine Products' second quarter 2009
results reflect the continued depressed state of the recreational
boating industry. The ongoing recession and lack of availability of
consumer credit continue to prevent consumers from purchasing large
discretionary items such as pleasure boats. Also, continued
residential real estate weakness in key boating markets and cool,
rainy weather in the Northeast have made the 2009 retail selling
season even weaker than last year. "As we discussed at the end of
the first quarter, one of our objectives this year has been to help
our dealers manage their inventories. By providing substantial
financial support, we have helped dealers sell from their existing
inventory, which has enhanced their financial results as well as
prepared them to meet renewed retail demand with current models.
This effort negatively impacted our financial results, and combined
with the inefficiencies resulting from low production levels,
caused us to generate an operating loss for the quarter. However, I
am pleased to report that this effort has been successful. At the
end of the second quarter our field inventory is 45 percent lower
than at the end of 2008, and we believe that it has declined to
manageable levels given the current retail selling environment.
"Although unit sales were down among all of our models, we were
somewhat encouraged by a model mix that realized higher average
gross selling prices. Our Sunesta Wide Tech and Xtreme models
continue to sell at higher price points, and we also sold several
of our Premiere Sport Yachts. "This protracted downturn is
beginning to affect our industry's landscape very profoundly. A
number of manufacturers, including some large ones, have ceased
operations, are attempting to sell to competitors, or have filed
for bankruptcy protection. Some boat dealers are ceasing
operations, and financing continues to be difficult to obtain, both
for dealers and retail customers. "In this historically difficult
environment, we are encouraged by our stamina under these
conditions. At the end of the second quarter, our balance sheet
showed $55.6 million in cash and marketable securities, which
increased by $4.2 million compared to the end of 2008, in spite of
our operating results and support provided to our dealers. We
believe that we will eventually benefit from our financial strength
and management expertise. For example, several strong dealers whose
previous manufacturers are no longer in operation have approached
us about forming new relationships in their markets. Finally, we
believe that the turmoil among a number of large manufacturers will
allow us to gain market share with our updated products and
recognition by consumers and dealers that we will continue to be in
the marketplace to serve existing dealers and consumers as well as
provide high-quality products to future boaters, as is evidenced by
a number of new models that we have introduced for the 2010 model
year," concluded Hubbell. Marine Products Corporation will hold a
conference call today, July 29, 2009 at 8:00 a.m. EDT to discuss
the results of the second quarter. Interested parties may listen in
by accessing a live webcast in the investor relations section of
Marine Products' Web site at http://www.marineproductscorp.com/.
The live conference call can also be accessed by calling (866)
864-9123 or (973) 638-3430 and using the access code #18952677. A
replay of the conference call will be available in the investor
relations section of Marine Products' Web site
(http://www.marineproductscorp.com/) beginning approximately two
hours after the call. The rebroadcast will also be available until
August 5, 2009 via telephone by calling (800) 642-1687 or (706)
645-9291 and using the access code #18952677. 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 website at
http://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 our statements that the ongoing recession and
lack of availability of consumer credit prevent consumers from
purchasing pleasure boats; our belief that weakness in certain
residential real estate markets and weather in certain areas of the
United States has contributed to a weak 2009 retail selling season;
our belief that helping dealers reduce their inventories has
prepared them to meet renewed retail demand with current models;
our belief that that our dealers' floorplan financing will be in
place for the upcoming model year; our belief that the protracted
downturn in the recreational boating business will allow us to gain
market share with updated products and recognition by consumers and
dealers because of our strong presence in the marketplace; our
belief that we are well positioned to benefit during the current
industry turmoil; and our belief that we are prepared to capitalize
on opportunities to increase our market share and 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, 2008. MARINE PRODUCTS CORPORATION AND SUBSIDIARIES CONSOLIDATED
STATEMENTS OF OPERATIONS (In thousands except per share data)
Periods ended June 30, (Unaudited) Second Quarter % BETTER 2009
2008 (WORSE) Net Sales $12,618 $55,734 (77.4)% Cost of Goods Sold
12,156 44,707 72.8 Gross Profit 462 11,027 (95.8) Selling, General
and Administrative Expenses 6,772 6,620 (2.3) Operating (Loss)
Income (6,310) 4,407 NM Interest Income 382 629 (39.3) (Loss)
Income Before Income Taxes (5,928) 5,036 NM Income Tax (Benefit)
Provision (2,093) 1,140 NM Net (Loss) Income $(3,835) $3,896 NM %
(LOSS) EARNINGS PER SHARE Basic $(0.11) $0.11 N/M % Diluted $(0.11)
$0.11 N/M % AVERAGE SHARES OUTSTANDING Basic 36,074 35,813 Diluted
36,074 36,464 Periods ended June 30, (Unaudited) Six Months %
BETTER 2009 2008 (WORSE) Net Sales $26,424 $121,276 (78.2)% Cost of
Goods Sold 26,020 96,785 73.1 Gross Profit 404 24,491 (98.4)
Selling, General and Administrative Expenses 11,471 14,879 22.9
Operating (Loss) Income (11,067) 9,612 NM Interest Income 837 1,192
(29.8) (Loss) Income Before Income Taxes (10,230) 10,804 NM Income
Tax (Benefit) Provision (3,909) 2,776 NM Net (Loss) Income $(6,321)
$8,028 NM % (LOSS) EARNINGS PER SHARE Basic $(0.18) $0.22 N/M %
Diluted $(0.18) $0.22 N/M % AVERAGE SHARES OUTSTANDING Basic 35,996
35,748 Diluted 35,996 36,460 MARINE PRODUCTS CORPORATION AND
SUBSIDIARIES CONSOLIDATED BALANCE SHEETS At June 30, (Unaudited)
(in thousands) 2009 2008 ASSETS Cash and cash equivalents $10,143
$8,975 Marketable securities 20,291 13,791 Accounts receivable, net
1,411 3,209 Inventories 12,699 26,443 Income taxes receivable 4,480
1,178 Deferred income taxes 753 1,691 Prepaid expenses and other
current assets 1,317 2,060 Total current assets 51,094 57,347
Property, plant and equipment, net 13,900 15,307 Goodwill 3,308
3,308 Other intangibles, net 465 465 Marketable securities 25,224
37,904 Deferred income taxes 2,646 2,615 Other assets 4,618 6,739
Total assets $101,255 $123,685 LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable $1,036 $5,931 Accrued expenses and other
liabilities 9,645 15,112 Total current liabilities 10,681 21,043
Pension liabilities 5,343 5,597 Other long-term liabilities 450 495
Total liabilities 16,474 27,135 Common stock 3,689 3,643 Capital in
excess of par value - - Retained earnings 82,218 92,989 Accumulated
other comprehensive (loss) income (1,126) (82) Total stockholders'
equity 84,781 96,550 Total liabilities and stockholders' equity
$101,255 $123,685 For information contact: BEN M. PALMER JIM
LANDERS Chief Financial Officer Vice President, Corporate Finance
(404) 321-7910 (404) 321-2162 DATASOURCE: Marine Products
Corporation CONTACT: BEN M. PALMER, Chief Financial Officer,
+1-404-321-7910, ; or JIM LANDERS, Vice President, Corporate
Finance, +1-404-321-2162, Web Site:
http://www.marineproductscorp.com/
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