Marine Products Corp. reports 4Q, year-end results

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Chaparral and Robalo builder Marine Products Corp. said it increased net sales by 22.2 percent in its fourth quarter — a gain attributable to a 31.5 percent increase in the number of boats sold — and that net sales for the year were up 39.9 percent from 2011.

Net income for the quarter was $1.06 million, or 3 cents a diluted share, compared with net income, excluding other income, for the quarter a year earlier of $1.6 million, or 4 cents a diluted share. In the fourth quarter of 2011, diluted earnings per share, including other income, were 10 cents a share.

The Atlanta-based company today announced unaudited results for its fourth quarter and the year that ended Dec. 31.

Marine Products generated fourth-quarter net sales of $34.15 million, a 22.2 percent increase from $27.94 million last year. The increase in net sales was attributable to a 31.5 percent increase in the number of boats sold, partially offset by an 8.6 percent decrease in the average selling price per boat.

The company said unit sales increased because of significantly higher sales of value-priced Chaparral H2O and Robalo sportfishing boats. Higher sales of those models caused average selling prices to decline because the models carry lower average selling prices than other Chaparral and Robalo models.

Marine Products builds Robalo outboard sportfishing boats and Chaparral sterndrive and inboard boats.

Gross profit for the quarter was $5.54 million, or 16.2 percent of net sales, compared with $5.51 million, or 19.7 percent of net sales, in the prior year.

As a percentage of net sales, the company said, gross profit decreased because of a shift in the model mix to more of Marine Products’ value-priced Chaparral H2O and Robalo sportfishing boats, as well as increased employment costs in preparation for higher production in 2013.

The company said operating profit for the quarter decreased by 42.9 percent, to $1.18 million, compared with $2.06 million in the fourth quarter of 2011, because of higher selling, general and administrative expenses, slightly offset by higher gross profit. Selling, general and administrative expenses rose because of increases in expenses that vary with sales, such as warranty expense, marketing expense and sales commissions, partially offset by lower incentive compensation expenses. As a percentage of net sales, these expenses increased slightly, from 12.3 percent in the fourth quarter of 2011 to 12.8 percent in the fourth quarter of 2012.

Net sales for the year were $148.95 million, a 39.9 percent increase from the prior year. Net income for the 12 months that ended Dec. 31, 2012, was $6.98 million, or 19 cents a diluted share, compared with net income, excluding other income, of $4.71 million, or 13 cents a diluted share, in 2011. Net income, including other income, for the 12 months that ended Dec. 31, 2011, was $6.7 million, or 18 cents a diluted share.

“Our value-priced Chaparral and Robalo models continue to appeal to our dealers and retail customers, which benefits Marine Products through higher sales and increased market share,” Marine Products CEO Richard A. Hubbell said in a statement. “The majority of our increase in unit sales during the fourth quarter was due to higher unit sales of these models. I am also pleased that preliminary reports show that Chaparral’s market share in the 18- to 35-foot sterndrive recreational boat market was 11.7 percent during the nine months ended Sept. 30, 2012, compared to 8.3 percent for the same period in 2011. We were the third-largest manufacturer in this segment during this period in 2012.”

“The 2013 winter boat show season has started, and based on early indications of attendance and sales at these shows we believe that the selling environment for our products continues to improve,” Hubbell added. “Our order backlog is significantly higher than at this time last year, and early in the first quarter of 2013 we have increased production in order to meet dealer demand. Our preparation for higher production volumes in 2013 reduced our profitability during the fourth quarter of 2012, but we are excited about meeting the increased dealer and retail demand for our products.”

“During the fourth quarter of 2012, we paid a special year-end cash dividend of [55 cents a share] in addition to our regular quarterly dividend,” he said. “In spite of this large cash distribution, we maintain a strong and liquid balance sheet, with $38.6 million in cash and marketable securities and no debt. This financial strength will allow our company to continue to support our dealer network and provide the retail customers with innovative new products as well as pursue strategic growth opportunities.”

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