Net sales up in Q2 for Marine Products Corp, unit sales dip slightly
Net sales for the Marine Products Corp family of boats were up by 9.8 percent during the second quarter of 2013 compared to 2012, offsetting a less than one percent decrease in the number of boats sold with an increase in the average gross price per boat of 8.1 percent.
“Our continued success with the value-priced Chaparral models as well as strength in the new mid-range boat models have been catalysts for additional increases in marketshare, ” MPX President Rick Hubbell said during the company’s quarterly conference call Wednesday.
“Average selling prices per boat increased during the quarter because of a model mix that included higher sales of our larger Chaparral H2O and value-priced Robalo models, as well as the larger Chaparral SSX Sportdecks,” the company said in a release.
Despite lower unit sales, Hubbell said, Marine Products Corp managed to increase marketshare in the 18- to 25-foot sterndrive market during the first quarter of 2013 from 11.6 percent in 2013 to 13.9 percent.
Operating profit fell during the quarter, but CFO Ben Palmer said that increased investment in the company’s workforce drove the profit down for the quarter, but will provide the company with a better product and increased margins. During the second quarter, improvements in this section went towards pay and benefits, which would improve construction quality, lower warranty costs, and drive higher customer satisfaction in the company’s products.
Gross profit was also partially offset by a lower materials cost associated with the shift in percentage of net sales due to a more favorable model mix.
With a cool, wet spring, and damage to boating infrastructure in the Northeast related to Hurricane Sandy, slower unit sales from customers delaying purchases due to these effects left the company feeling disappointed in the selling season. However, Hubbell added that he still believes the company is in a selling environment that is slowly but steadily improving.
“Improved consumer confidence, a recovering real estate market, and a more favorable consumer-lending environment are contributing to the improvement in sales of consumer discretionary products such as ours,” Hubbell added.
The 2014 release of jet boat models, powered by BRP engines and targeted towards a younger boating demographic, and of a 2014 bay boat version of Robalo’s offshore boats, more suitable for salt-water bays and inland fishing bays, provide the company with a favorable long term view of the market for the company.