Marine Products reports first quarter financial results and declares regular quarterly dividend

Marine Products Corporation logo © Marine Products Corporation

Marine Products Corporation (NYSE: MPX) (the "Company"), a leading manufacturer of fiberglass boats, announced its unaudited results for the first quarter ended March 31, 2025.

*Non-GAAP measures, including EBITDA, EBITDA margin, and free cash flow are reconciled to the most comparable GAAP measures in the appendices of this earnings release.
*All comparisons are year-over-year to 1Q:24 unless stated otherwise.

First Quarter 2025 Results

• Net sales decreased 15% year-over-year to $59.0 million
• Net income was $2.2 million, down 52% year-over-year, and diluted Earnings Per Share (EPS) was $0.06; Net income margin decreased 290 basis points to 3.7%
• Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) was $3.4 million, down 43% year-over-year; EBITDA margin decreased 270 basis points to 5.8%
• Results reflected continued demand softness in the marine industry; uncertainties related to macro-economic conditions limit visibility
• The Company generated strong operating cash flow, made minimal capital investments and ended the quarter with approximately $57.1 million in cash and no debt

Management Commentary

"We started off 2025 with a continuation of challenging marine industry trends while we focused on supporting our dealers, managing inventories and controlling costs," stated Ben M. Palmer, Marine Products' President and Chief Executive Officer. "First quarter sales were down 15%, reflecting lower volumes and hesitation from dealers to place orders in the current demand environment. However, first quarter sales were up 23% sequentially versus the fourth quarter of 2024. Our field inventories are at a reasonable level, and we will begin working with our dealer network for model year 2026 introductions. It is likely we will take a conservative approach to the rollout and inventory management but still deliver innovative designs and enhanced features to maintain our leading reputation with our dealers and consumers."

"Beyond our specific industry, we are clearly seeing heightened uncertainty driven by tariff related headlines. Potential boat component and materials cost increases would likely result in model price increases. In addition, a broader sense of economic uncertainty and risk aversion are likely to impact consumer spending. Further, the interest rate outlook has become less clear with respect to inflation and economic growth as the Fed navigates a dynamic backdrop. Facing limited visibility in this environment, Marine Products will manage with prudence and conservatism, as we always have. Our balance sheet remains strong, our capital needs are minimal, and our strong cash position affords us the opportunity to make attractive strategic investments if the right opportunity arises," concluded Palmer.

1Q:25 Consolidated Financial Results (year-over-year comparisons versus 1Q:24)

Net sales were $59.0 million, down 15%. The decrease in net sales was primarily due to a 19% decrease in the number of boats sold during the quarter, partially offset by a price/mix increase of 4%. Dealers continued to tightly manage their inventories as consumer demand remained modest. The year-over-year sales decline, however, was significantly less pronounced than the 30%-plus quarterly decreases the Company experienced during 2024. Comparisons are beginning to ease and field inventories are returning to more acceptable levels after being elevated since late 2023. The Company's field unit inventory at the end of 1Q:25 was approximately 18% below 1Q:24.

Gross profit was $11.0 million, down 22%. Gross margin was 18.6%, down 160 basis points. The year-over-year gross margin decline reflected weak sales, which more than offset manufacturing cost controls. Production schedules and labor costs continue to be adjusted to align with market demand as relayed to the Company through dealer orders and feedback with respect to consumer sentiment.

Selling, general and administrative expenses were $8.3 million, down 5%, and represented 14.1% of net sales, up 150 basis points versus prior year. The decrease in SG&A expenses was largely due to costs that vary with sales and profitability, such as incentive compensation, sales commissions and warranty expense.

Interest income of $442 thousand decreased due to lower cash balances as a result of the Company's special dividend paid during the second quarter of 2024.

Income tax provision was $849 thousand, or 27.8% of income before income taxes, up 320 basis points.

Net income and diluted EPS were $2.2 million and $0.06, respectively, down from $4.6 million and $0.13, respectively, in 1Q:24. Net income margin was 3.7%, down 290 basis points.

EBITDA was $3.4 million, down from $5.9 million. EBITDA margin was 5.8%, down 270 basis points from last year's first quarter.

Balance sheet, cash flow and capital allocation

Cash and cash equivalents were $57.1 million at the end of 1Q:25, with no outstanding borrowings under the Company's $20 million revolving credit facility.

Net cash provided by operating activities and free cash flow were $10.8 million and $10.7 million, respectively, in 1Q:25. The Company expects full year 2025 capital expenditures to be approximately $3 million.

Payment of dividends totaled $4.9 million in 1Q:25. Additionally, the Board of Directors declared a regular quarterly dividend of $0.14 per share payable on June 10, 2025, to common stockholders of record at the close of business on May 9, 2025.

Conference Call Information

Marine Products Corporation will hold a conference call today, April 24, 2025, 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 and for a period of 90 days.