ATLANTA, July 29, 2020 /PRNewswire/ -- Marine
Products Corporation (NYSE: MPX) announced its unaudited results
for the quarter ended June 30,
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
OSX Luxury Sportboats, the 257 SSX OB, 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 June 30,
2020, Marine Products generated net sales of $40,818,000, a 54.0 percent decrease compared to
record net sales of $88,696,000 in
the same period of the prior year. The decrease in net sales
was due to a 57.9 percent reduction in the number of units sold
during the quarter as compared to the prior year. Unit sales
declined in every product category due to the temporary suspension
of manufacturing operations for five weeks during the quarter.
Average selling price per boat during the second quarter rose
by 7.8 percent due to a favorable model mix.
Gross profit for the second quarter of 2020 was $7,831,000, a 61.7 percent decrease compared to
gross profit of $20,424,000 in the
same period of the prior year. Gross margin was 19.2 percent of net
sales in the second quarter of 2020 compared to 23.0 percent in the
second quarter of 2019. Gross margin as a percentage of net sales
declined due to manufacturing cost inefficiencies resulting from
the temporary operational suspension during the quarter, partially
offset by a favorable model mix consisting of larger boats.
Operating profit for the second quarter of 2020 was $2,074,000, a decrease of 81.8 percent compared
with operating profit of $11,379,000
in the second quarter of last year. Selling, general and
administrative expenses were $5,757,000 in the second quarter of 2020 compared
to $9,045,000 in the second quarter
of 2019. The significant decrease in these expenses was due to
reductions in costs that vary with sales and profitability, such as
incentive compensation and warranty expense. In addition, selling,
general and administrative expenses declined due to lower salaries
arising from employee furloughs and reductions in other expenses
due to the temporary operational suspension during the quarter.
These decreases were partially offset by increases in research and
development expenses as the Company continued development of new
models for the 2021 model year. Selling, general and
administrative expenses were 14.1 percent of net sales in the
second quarter of 2020 compared to 10.2 percent of net sales during
the second quarter of 2019.
Net income for the second quarter of 2020 was $1,707,000, a decrease of $7,666,000, or 81.8 percent, compared with record
net income of $9,373,000 in the
second quarter of 2019. Diluted earnings per share were
$0.05 in the second quarter of 2020
compared to $0.27 in the second
quarter of 2019. The effective tax rate for both the second quarter
of 2020 and 2019 was 18.3 percent. Net sales for the six months
ended June 30, 2020 were $99,937,000, a decrease of 41.8 percent compared
to the first six months of 2019. Net income for the six-month
period of 2020 was $5,915,000 or
$0.17 diluted earnings per share,
compared to net income of $16,842,000, or $0.49 diluted earnings per share in the prior
year.
Richard A. Hubbell, Marine
Products' President and Chief Executive Officer stated, "As we
announced a few months ago, in late March we temporarily suspended
manufacturing operations in response to concerns over the potential
spread of COVID-19. Our Nashville,
GA production facility did not resume operations until the
second week in May, and as a result, our production and sales were
dramatically impacted for almost half of the quarter. During this
shutdown we continued with our research and development efforts,
modified our marketing efforts to maintain our presence with
dealers and customers, and reduced costs wherever possible.
In addition, we expedited the shipment of as many boats as possible
to our dealers to meet high retail demand.
"We resumed operations on May 6th
at slightly higher production levels than during the first quarter.
We are continuing to increase production early in the third quarter
because of significantly higher dealer and consumer demand since
mid-March. At the end of the second quarter, our dealer inventory
was significantly lower than at the end of both the first quarter
of 2020 and the second quarter of the prior year, and our order
backlog was at its highest level in several years.
"It is clear that American consumers are choosing recreational
boating as a safe, enjoyable outdoor activity suited for social
distancing. We are very pleased to begin our 2021 model year in
this favorable environment, and are working to increase production
to meet this surge in demand with appealing new models. As always,
we will monitor macroeconomic factors closely, and maintain a
balance among high product demand, potential supply chain
constraints, and our desire to produce quality products," concluded
Hubbell.
Marine Products Corporation will hold a conference call today,
July 29, 2020, at 8:00 a.m. Eastern Time to discuss the results for
the second 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
(833) 968-2235 or (825) 312-2057 for international callers, and
using conference ID number 8297112. 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
belief that American consumers are choosing recreational boating as
a safe, enjoyable outdoor activity suited for social distancing.
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 the COVID-19 crisis, its impact
on the U.S. and global economy and its disruption of our supply
chain and the duration of the recent increase in dealer and
consumer demand. 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
|
|
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CONSOLIDATED
STATEMENTS OF OPERATIONS (In thousands except per share
data)
|
|
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|
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Period ended June 30,
(Unaudited)
|
|
Second
Quarter
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Six
Months
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|
|
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2020
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2019
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% BETTER
(WORSE)
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|
|
|
2020
|
|
|
2019
|
|
% BETTER
(WORSE)
|
|
Net
Sales
|
$
|
40,818
|
|
$
|
88,696
|
|
(54.0)
|
%
|
|
$
|
99,937
|
|
$
|
171,749
|
|
(41.8)
|
%
|
Cost of Goods
Sold
|
|
32,987
|
|
|
68,272
|
|
51.7
|
|
|
|
79,999
|
|
|
132,626
|
|
39.7
|
|
Gross
Profit
|
|
7,831
|
|
|
20,424
|
|
(61.7)
|
|
|
|
19,938
|
|
|
39,123
|
|
(49.0)
|
|
Selling, General and
Administrative Expenses
|
|
5,757
|
|
|
9,045
|
|
36.4
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|
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|
13,010
|
|
|
18,876
|
|
31.1
|
|
Operating
Profit
|
|
2,074
|
|
|
11,379
|
|
(81.8)
|
|
|
|
6,928
|
|
|
20,247
|
|
(65.8)
|
|
Interest
Income
|
|
15
|
|
|
95
|
|
(84.2)
|
|
|
|
76
|
|
|
152
|
|
(50.0)
|
|
Income Before Income
Taxes
|
|
2,089
|
|
|
11,474
|
|
(81.8)
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|
7,004
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|
|
20,399
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|
(65.7)
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Income Tax
Provision
|
|
382
|
|
|
2,101
|
|
81.8
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|
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|
1,089
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|
3,557
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|
69.4
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|
Net
Income
|
$
|
1,707
|
|
$
|
9,373
|
|
(81.8)
|
%
|
|
$
|
5,915
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|
$
|
16,842
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|
(64.9)
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%
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EARNINGS PER
SHARE
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Basic
|
$
|
0.05
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|
$
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0.27
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(81.5)
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%
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$
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0.17
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$
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0.49
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(65.3)
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%
|
Diluted
|
$
|
0.05
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|
$
|
0.27
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(81.5)
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%
|
|
$
|
0.17
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|
$
|
0.49
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(65.3)
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%
|
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|
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|
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|
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|
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|
|
|
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|
AVERAGE SHARES
OUTSTANDING
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
Basic
|
|
33,970
|
|
|
34,090
|
|
|
|
|
|
33,955
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|
|
34,166
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|
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|
Diluted
|
|
33,970
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|
|
34,090
|
|
|
|
|
|
33,955
|
|
|
34,166
|
|
|
|
MARINE PRODUCTS
CORPORATION AND SUBSIDIARIES
|
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CONSOLIDATED
BALANCE SHEETS
|
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At June 30,
(Unaudited)
|
|
(in
thousands)
|
|
|
2020
|
|
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2019
|
ASSETS
|
|
|
|
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|
Cash and cash
equivalents
|
$
|
22,614
|
|
$
|
12,967
|
Accounts receivable,
net
|
|
9,568
|
|
|
14,752
|
Inventories
|
|
43,190
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|
|
50,904
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Income taxes
receivable
|
|
154
|
|
|
122
|
Prepaid expenses and
other current assets
|
|
1,642
|
|
|
1,389
|
Total current
assets
|
|
77,168
|
|
|
80,134
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Property, plant and
equipment, net
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14,754
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15,244
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Goodwill
|
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3,308
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|
3,308
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Other intangibles,
net
|
|
465
|
|
|
465
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Pension
assets
|
|
7,693
|
|
|
7,354
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Deferred income
taxes
|
|
3,810
|
|
|
3,688
|
Other
assets
|
|
3,682
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|
|
3,661
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Total
assets
|
$
|
110,880
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$
|
113,854
|
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LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
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Accounts
payable
|
$
|
8,710
|
|
$
|
9,265
|
Accrued expenses and
other liabilities
|
|
14,510
|
|
|
16,199
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Total current
liabilities
|
|
23,220
|
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|
25,464
|
Long-term pension
liabilities
|
|
10,577
|
|
|
8,770
|
Other long-term
liabilities
|
|
515
|
|
|
544
|
Total
liabilities
|
|
34,312
|
|
|
34,778
|
Common
stock
|
|
3,397
|
|
|
3,404
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Capital in excess of
par value
|
|
-
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-
|
Retained
earnings
|
|
75,781
|
|
|
78,220
|
Accumulated other
comprehensive loss
|
|
(2,610)
|
|
|
(2,548)
|
Total
stockholders' equity
|
|
76,568
|
|
|
79,076
|
Total
liabilities and stockholders' equity
|
$
|
110,880
|
|
$
|
113,854
|
View original
content:http://www.prnewswire.com/news-releases/marine-products-corporation-reports-second-quarter-2020-financial-results-301101610.html
SOURCE Marine Products Corporation