Marine Products Corporation reports third quarter 2023 Financial Results
by Marine Products Corporation 25 Oct 2023 15:57 PDT
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Marine Products Corporation (NYSE: MPX) announced its unaudited results for the quarter ended September 30, 2023. Marine Products is a leading manufacturer of fiberglass boats under the brand names of Chaparral and Robalo. Chaparral's sterndrive models include SSi Sportboats and SSX Luxury Sportboats, along with the SURF Series. Chaparral's outboard offerings include OSX Luxury Sportboats and SSi Outboard Bowriders. Robalo builds an array of outboard sport fishing boats, which include Center Consoles, Dual Consoles and Cayman Bay Boats.
For the quarter ended September 30, 2023, Marine Products generated net sales of $77.8 million, a 22 percent decrease compared to $100.1 million in the third quarter of the prior year. The decrease in net sales was primarily due to a 24 percent decrease in the number of boats sold during the quarter, partially offset by a five percent increase in average selling price. Average selling price per boat increased primarily due to a favorable model mix and, to a lesser extent, price increases to cover higher costs of materials and components. Unit sales decreased during the quarter compared to the prior year as production has been adjusted to align more with current demand, including seasonally lower dealer demand during the third quarter of each calendar year. In addition, unit sales were impacted during the quarter by severe weather-related production shutdowns.
Gross profit for the third quarter of 2023 was $19.2 million compared to $25.0 million in the third quarter of the prior year. Gross margin as a percentage of net sales was 24.7 percent in the third quarter of 2023 compared to 25.0 percent in the prior year period. Operating income for the third quarter of 2023 was $12.4 million, a decrease of 15 percent compared to operating profit of $14.7 million in the third quarter of the prior year. Selling, general and administrative expenses were $8.8 million in the third quarter of 2023 compared to $10.3 million in the third quarter of 2022. The decrease in selling, general and administrative expenses was due to costs that vary with sales and profitability, such as incentive compensation, sales commissions and warranty expense. These expenses were 11.3 percent of net sales in the third quarter of 2023 compared to 10.3 percent in the third quarter of 2022.
Net gain on the disposition of assets was $2.0 million during the quarter, which includes $1.8 million related to a real estate transaction. Net interest income of $860 thousand increased significantly compared to the prior year due to a higher cash balance and higher interest yields.
Net income for the third quarter of 2023 was $10.4 million, a decrease of 9 percent compared to net income of $11.5 million in the third quarter of 2022. Net income as a percentage of net sales was 13.4 percent in the third quarter of 2023 as compared to 11.5 percent in the prior year period. Earnings before interest, taxes, depreciation and amortization (EBITDA) for the third quarter of 2023 was $13.0 million, a decrease of 14 percent, compared to $15.2 million in the third quarter of 2022. EBITDA as a percentage of net sales was 16.7 percent in the third quarter of 2023 as compared to 15.1 percent in the prior year period.
Diluted earnings per share in the third quarter of 2023 were $0.30, a decrease of 12 percent compared to $0.34 in the third quarter of the prior year. The effective tax rate was 21.6 percent in the third quarter of 2023 compared to 22.3 percent in the third quarter of 2022.
Net sales for the nine months ended September 30, 2023 were $312.9 million, an increase of 15 percent compared to the first nine months of 2022. Net income for the nine-month period was $36.3 million or $1.05 diluted earnings per share, compared to net income of $28.5 million or $0.83 diluted earnings per share in the comparable prior year period.
"Our third quarter results reflect the reduction in production and delivery rates due to normalization of retail boat demand that has occurred during 2023, following significant post-Covid demand. In addition, our production in the third quarter was adversely impacted by Hurricane Idalia," stated Ben M. Palmer, Marine Products' President and Chief Executive Officer. "We were pleased with the orders placed during our annual dealer conference in August. Dealer inventories are reasonable by historical standards and remain below pre-pandemic levels, and we have firm production scheduled into 2024. We, along with our dealers, will reassess retail demand during the winter boat shows. While we are still experiencing some delays in timely receipts of certain components used in our manufacturing operations, these issues are less of a problem than earlier this year," concluded Palmer.
Marine Products Corporation will hold a conference call today, October 25, 2023, at 8:00 a.m. Eastern Time to discuss the results for the quarter. Interested parties may listen in by accessing a live webcast in the investor relations section of Marine Products' website at www.marineproductscorp.com. Additionally, the live conference call can be accessed by calling (888) 660-6357, or (929) 201-6127 for international callers, and using conference ID number 9979064. A replay will be available in the investor relations section of Marine Products' website beginning approximately two hours after the call.