Marine Products Corporation Reports Q1 Results
ATLANTA, April 27, 2011 – Marine Products Corporation (NYSE: MPX) announced its unaudited results for the quarter ended March 31, 2011. 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 and SSX Sportboats and Cuddy Cabins, Sunesta Sportdecks, Xtreme Towboats, Signature Cruisers, and outboard sport fishing boats by Robalo.
For the quarter ended March 31, 2011, Marine Products generated net sales of $27,148,000 a 10.8 percent increase compared to $24,493,000 last year. The increase in net sales was due to a 4.6 percent increase in the number of boats sold, coupled with a 6.4 percent increase in the average selling price per boat. Unit sales increased among our sportboat and outboard sport fishing boat product lines. Average selling prices improved among most of our product lines due to the mix of models sold during the quarter.
Gross profit for the quarter was $4,460,000, or 16.4 percent of net sales, compared to a gross profit of $3,445,000, or 14.1 percent of net sales, in the prior year. The increase in gross profit in the first quarter of 2011 compared to the prior year was the result of higher unit sales, slightly lower retail incentive costs as a percentage of sales, and increased efficiencies due to higher production levels as compared to the prior year. These improvements in profitability were partially offset by higher materials costs.
Operating income for the quarter was $604,000 compared to an operating loss of $403,000 in the first quarter of last year. The Company's operating income improved compared to the prior year due to higher net sales and gross profit in the first quarter of 2011 compared to the prior year. Selling, general and administrative expenses were similar to the prior year but declined as a percentage of net sales due to leverage of fixed costs over higher activity levels.
Net income for the quarter ended March 31, 2011 was $666,000 compared to a net loss of $80,000 in the prior year. Earnings per share for the quarter were $0.02 compared to $0.00 per share in the prior year.
Richard A. Hubbell, Marine Products' Chief Executive Officer stated, "During the first quarter of 2011 Marine Products Corporation operated at higher production levels than the first quarter of last year in response to stable dealer demand. Our improving results generated an increase in our cash and marketable securities balances compared to the end of 2010. Attendance at the winter boat show season improved moderately compared to last year, and we have experienced an increase in the number of smaller boats sold to our dealers, which is traditionally a sign of impending improvement in demand. Also, our new, award-winning 327 SSX Sportboat, which we recently introduced for the 2011 model year, enjoyed a strong reception during the boat show season and robust sales thus far during the retail selling season.
"As we enter the height of this retail selling season, we are operating with manageable dealer inventories and backlog, given the underlying retail demand. Although we believe that retail demand has stabilized, we share concerns with our dealers about this spring's increase in fuel prices and the persistent weakness in residential real estate, both of which tend to discourage consumers from making large discretionary purchases such as pleasure boats. In spite of a retail selling environment that is not continuing to strengthen as we would like, we note that this season's retail sales are predominantly sales of current models to customers who recognize quality products and are interested in good service after the sale. While the recent increase in fuel prices has caused our dealers to become more cautious in their sales outlook for the remainder of the 2011 selling season, we are encouraged by their enthusiasm for our quality products and continued leadership in the recreational boating industry. Our process of constantly balancing the dynamics of production, dealer inventory, and retail demand continue to serve us well, and we believe we are uniquely positioned to benefit from increased sales when retail demand begins to increase more strongly," concluded Hubbell.
Source: Marine Products Corporation