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Marine Products Corporation reports fourth quarter and year-end 2012 financial results

Marine Products Corporation
January 23, 2013
Filed under News

ATLANTA, January 23, 2013 – Marine Products Corporation (NYSE: MPX) announced its unaudited results for the quarter and year ended December 31, 2012. 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 December 31, 2012, Marine Products generated net sales of $34,152,000, a 22.2 percent increase compared to $27,937,000 last year. The increase in net sales was due to a 31.5 percent increase in the number of boats sold, partially offset by an 8.6 percent decrease in the average selling price per boat. Unit sales increased due to significantly higher unit sales of our value-priced Chaparral H2O and Robalo sport fishing boats. Higher sales of these models caused average selling prices to decline, because these models carry lower average selling prices than our other Chaparral and Robalo models.

Gross profit for the quarter was $5,538,000, or 16.2 percent of net sales, compared to a gross profit of $5,505,000, or 19.7 percent of net sales, in the prior year. As a percentage of net sales, gross profit decreased due to a shift in model mix to more of our value-priced Chaparral H2O and Robalo sport fishing boats, as well as increased employment costs in preparation for higher production during 2013.

Operating profit for the quarter decreased by 42.9 percent to $1,175,000 compared to $2,059,000 in the fourth quarter of last year due to higher selling, general and administrative expenses, slightly offset by higher gross profit. Selling, general and administrative expenses increased due to increases in expenses that vary with sales, such as warranty expense, marketing expense, and sales commissions, partially offset by lower incentive compensation expenses. As a percentage of net sales, these expenses increased slightly from 12.3 percent in the fourth quarter of 2011 to 12.8 percent in the fourth quarter of 2012.

Net income for the quarter ended December 31, 2012 was $1,064,000, or $0.03 per diluted share, compared to net income excluding other income[1] for the quarter ended December 31, 2011 of $1,611,000, or $0.04 per diluted share. In the fourth quarter of the prior year, diluted earnings per share including other income were $0.10 per share.

Net sales for the twelve months ended December 31, 2012 were $148,950,000, a 39.9 percent increase compared to the prior year. Net income for the twelve months ended December 31, 2012 was $6,979,000, or $0.19 per diluted share, compared to net income excluding other income of $4,706,000, or $0.13 per diluted share, in 2011. Net income including other income for the twelve months ended December 31, 2011 was $6,731,000 or $0.18 diluted earnings per share.

Richard A. Hubbell, Marine Products’ Chief Executive Officer stated, “Our value-priced Chaparral and Robalo models continue to appeal to our dealers and retail customers, which benefits Marine Products through higher sales and increased market share. The majority of our increase in unit sales during the fourth quarter was due to higher unit sales of these models. I am also pleased that preliminary reports show that Chaparral’s market share in the 18 to 35-foot sterndrive recreational boat market was 11.7 percent during the nine months ended September 30, 2012, compared to 8.3 percent for the same period in 2011. We were the third largest manufacturer in this segment during this period in 2012.

“The 2013 winter boat show season has started, and based on early indications of attendance and sales at these shows, we believe that the selling environment for our products continues to improve. Our order backlog is significantly higher than at this time last year, and early in the first quarter of 2013, we have increased production in order to meet dealer demand. Our preparation for higher production volumes in 2013 reduced our profitability during the fourth quarter of 2012, but we are excited about meeting the increased dealer and retail demand for our products.

“During the fourth quarter of 2012, we paid a special year-end cash dividend of $0.55 per share in addition to our regular quarterly dividend. In spite of this large cash distribution, we maintain a strong and liquid balance sheet with $38.6 million in cash and marketable securities and no debt. This financial strength will allow our company to continue to support our dealer network and provide the retail customers with innovative new products as well as pursue strategic growth opportunities,” concluded Hubbell.

Marine Products Corporation will hold a conference call today, January 23, 2013 at 8:00 a.m. Eastern Time to discuss the results for the fourth quarter. Interested parties may listen in by accessing a live webcast in the investor relations section of Marine Products’ website at www.marineproductscorp.com. The live conference call can also be accessed by calling (888) 438-5524 or (719) 325-2472 and using the conference ID #7634661. A replay of the conference call will be available in the investor relations section of Marine Products’ website beginning approximately two hours after the call.

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