Strong sales and a high order backlog prompted Marine Products Corp. to increase production during the second quarter to cover the remainder of its 2015 model-year orders.
The company that makes Chaparral and Robalo boats reopened a previously idle manufacturing plant and hired additional manufacturing employees to increase production by as much as 20 percent, Marine Products CFO Ben Palmer said during a conference call with investors and analysts on Wednesday.
“We think that will continue to allow us to capture some efficiency,” Palmer said.
“Frankly, we have more different kinds of models now than we had 10 years ago,” said Jim Landers, vice president of corporate finance. “So while it does increase our capacity, the strategic intent had more to do with efficiency and quality. We are probably at 60 percent of capacity right now.”
The company has an additional idle facility, although there are no near-term plans to bring it back online, Palmer said.
Marine Products reported a 54 percent first-quarter increase in operating income and a 6 percent sales increase, in part because of increasing efficiency and higher production.
“Our net sales increased by more than 6 percent during the first quarter,” CEO Rick Hubbell said during the call, attributing the increase to higher unit sales. “Robalo, our Vortex jetboats and our new Chaparral SunCoast outboard all contributed to our sales growth for this quarter.”
“We continue to be pleased with our dealers’ and customers’ reception of our Chaparral SunCoast outboard deck boat,” Hubbell said. “We also sold a higher number of these boats during the quarter and look forward to introducing two additional models for the 2016 model year.”
The company plans to roll out a 21- and 23-foot SunCoast for the 2016 model year, Palmer said.
“Our Chaparral sterndrive boat continues to maintain the dominant market share in their category,” Hubbell said. “Our Vortex jetboats and Robalo sales continue to grow and it becomes a strong contributor to this year's financial results.”
Sales have been robust everywhere except the northeastern United States, where an “exceptionally long winter” hindered sales, and in Canada, where the strong dollar has made U.S. boats less appealing.