Marine Products Corp., the manufacturer of Chaparral and Robalo boats, reported a 77.4 percent decrease in net sales for the quarter ending June 30, compared with the same period in 2008.
Marine Products generated net sales of $12.618 million in the second quarter, compared to $55.734 million last year.
The decrease in net sales was due to an 80.4 percent decline in the number of boats sold, partially offset by a 9.6 percent increase in the average gross selling price per boat.
Gross profit for the quarter was $462,000, or 3.7 percent of net sales, compared to $11.027 million, or 19.8 percent of net sales, in the prior year.
"Gross profit as a percentage of net sales declined compared to the prior year due to very low production levels, which resulted in significant production inefficiencies," the company said in a statement. "Unit sales among all models declined significantly compared to the prior year due to our dealers meeting retail demand by liquidating existing inventory."
Net loss for the quarter was $3.835 million, compared to net income of $3.896 million in the prior year. Diluted loss per share for the quarter was 11 cents, compared to 11 cents diluted earnings per share in the prior year.
Net sales for the six months ending June 30 fell 78.2 percent to $26.424 million. Net loss for the six-month period was $6.321 million, or 18 cents loss per diluted share, compared to net income of $8.028 million, or 22 cents diluted earnings per share, in the prior year.
"Marine Products' second quarter 2009 results reflect the continued depressed state of the recreational boating industry," CEO Richard Hubbell said in a statement. "The ongoing recession and lack of availability of consumer credit continue to prevent consumers from purchasing large discretionary items such as pleasure boats. Also, continued residential real estate weakness in key boating markets and cool, rainy weather in the Northeast have made the 2009 retail selling season even weaker than last year."
Hubbell said the company has been working to help dealers reduce their existing inventory, and this effort "negatively impacted our financial results and, combined with the inefficiencies resulting from low production levels, caused us to generate an operating loss for the quarter."
However, he added, field inventory is now 45 percent lower than at the end of 2008.
"This protracted downturn is beginning to affect our industry's landscape very profoundly," Hubbell said. "A number of manufacturers, including some large ones, have ceased operations, are attempting to sell to competitors, or have filed for bankruptcy protection. Some boat dealers are ceasing operations, and financing continues to be difficult to obtain, both for dealers and retail customers.
"In this historically difficult environment, we are encouraged by our stamina under these conditions," he added.