Marine Products Corp. boosts production in 2Q - Trade Only Today

Marine Products Corp. boosts production in 2Q

Strong sales and a high order backlog prompted Marine Products Corp. to increase production during the second quarter.
Publish date:

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.


E-nnovation Lab to expand at 2018 Metstrade show

The growing demand for hybrid and electric engines is becoming more apparent within the leisure marine market, prompting Metstrade to introduce the E-nnovation Lab platform for electric propulsion technology.

Aluminum, tow boats lead moderate growth in May

Boat registrations were up 2.1 percent in May in the main powerboat categories, and rose 3.2 percent in all categories, according to preliminary data from Statistical Surveys Inc., a Michigan company that tracks new boat registrations.

Retaliatory tariffs on boats to EU start today

The 25 percent tariff the EU announced Wednesday on U.S.-built boats kicks in today, and a 10 percent tariff on boats sold to Canada will start July 1, prompting boatbuilders to worry they will lose sales to those countries.