Chaparral, Robalo parent reports revenue up, unit sales down
Marine Products Corporation
April 23, 2014
Filed under News
ATLANTA -- Marine Products Corporation (NYSE: MPX) announced its unaudited results for the quarter ended March 31, 2014. Marine Products is a leading manufacturer of fiberglass boats under two brand names: Chaparral sterndrive pleasure boats and jet boats, including H2O Sport and Fish & Ski Boats, SSi and SSX Sportboats, Sunesta Sportdecks, Xtreme Towboats, Signature Cruisers and Vortex jet boats, and Robalo outboard sport fishing boats.
For the quarter ended March 31, 2014, Marine Products generated net sales of $47,702,000, a 7.7 percent increase compared to $44,283,000 during the same period in the prior year. The net sales change was due to an increase of 13.4 percent in the average selling price per boat and an increase in parts and accessories sales, partially offset by a 5.4 percent decrease in the number of units sold during the quarter compared to the prior year. Average selling prices and parts and accessories sales increased compared to the prior year due to a favorable model mix that included larger Chaparral H2O models, improved sales of large Robalo models, and a significant number of our 307 SSX Sportboats, introduced in the 2014 model year.
Gross profit for the quarter was $8,838,000, or 18.5 percent of net sales, a 24.3 percent increase compared to gross profit of $7,112,000, or 16.1 percent of net sales, in the same period in the prior year. As a percentage of net sales, gross profit increased due to enhanced operational efficiencies, and an improved model mix compared to the first quarter of 2013.
Operating profit for the quarter increased by 88.0 percent to $2,768,000 compared to $1,472,000 in the first quarter of last year due to higher gross profit, partially offset by higher selling, general and administrative expenses. Selling, general and administrative expenses increased by 7.6 percent to $6,070,000 in the first quarter of 2014 compared to $5,640,000 last year. These expenses increased due to costs which vary with sales and profitability, such as incentive compensation, sales commissions and warranty expense. As a percentage of net sales, these expenses were comparable to the first quarter of 2013. Interest income was $122,000 during the first quarter of 2014, a slight decline compared to $149,000 during the first quarter of 2013.
Marine Products' income tax provision for the quarter was $912,000, an effective tax rate of 31.6 percent, significantly higher than the income tax provision during the first quarter of 2013. The income tax provision in the first quarter of 2013 reflects a benefit from research and experimentation credits for both 2013 and the full year of 2012. As of the end of the first quarter of 2014, this federal tax credit has expired and not been renewed for the current year. Net income for the quarter ended March 31, 2014 was $1,978,000, compared to net income of $1,449,000 in the first quarter of 2013. Diluted earnings per share were $0.05 in the first quarter of 2014 compared to $0.04 in the first quarter of last year.
Richard A. Hubbell, Marine Products' Chief Executive Officer stated, "Our financial results for the first quarter reflect continued growth in the sales of our Robalo sport fishing boats and a favorable model mix both at Robalo and several of our Chaparral product lines. The market has responded favorably to our Chaparral 307 SSX Sportboat, introduced during the 2014 model year, and our larger Chaparral H2O models. In addition, unit sales of our Robalo sport fishing boats increased compared to the first quarter of 2013, particularly in some of our larger models and the newly introduced Robalo bay boat. Dealer inventories are high enough to allow our dealers to meet retail demand. We believe that prolonged winter weather during the first quarter has impacted retail sales and caused dealer inventories to be slightly higher than normal.
"We sold our first Chaparral Vortex jet boats during the quarter. We are pleased with the product
as well as our dealers' reception to it. During the first quarter we sold the Vortex 203, and will produce the larger Vortex 223 and 243 models by the third quarter. We are also gratified by strong sales of several of our new Chaparral models and the continued growth in Robalo. The most recent market share statistics indicate that Chaparral is maintaining its leading market share in the 18 to 35-foot sterndrive pleasure boat category, which is confirmation of the appeal of our products. We are concerned about the continued cold weather in many of our domestic markets and are closely monitoring retail sales in order to maintain appropriate dealer inventory levels," concluded Hubbell.
Marine Products Corporation will hold a conference call today, April 23, 2014 at 8:00 a.m. Eastern Time to discuss the results for the first 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) 556-4997 or (719) 325-2315 and using the conference ID #1575832. 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.