Marine Products Corp., manufacturer of Chaparral and Robalo boats, today reported a more than 60 percent decrease in net sales for the fourth quarter, which ended Dec. 31, 2008.
Marine Products generated net sales of nearly $22.8 million for the quarter, a 61.4 percent decrease compared to nearly $59 million in net sales for the same quarter of 2007.
The decrease, according to the company, was due to a 63.3 percent decline in the number of boats sold, partially offset by a 6.7 percent increase in the average selling price per boat.
“The pleasure boating industry's downturn continued and, in fact, deepened during the fourth quarter of 2008, marking three full years of depressed conditions for our industry,” CEO Richard A. Hubbell said in a statement.
“Negative consumer sentiment increased during the quarter as the problems in the financial system surfaced, and the availability of credit for dealers and consumers became even tighter than it had been,” he added. “During the quarter, we decreased our production levels significantly. We accomplished this, but the resulting low level of unit production created manufacturing inefficiencies. These inefficiencies, along with high retail incentives during the quarter, caused us to realize an operating loss for the first time in our history.”
Gross profit for the quarter was $2.35 million, or 10.3 percent of net sales, compared to $12.29 million, or 20.9 percent of net sales, in the prior year.
Net loss for the fourth quarter was $1.1 million, compared to net income of $4 million in the prior year. Diluted loss for the quarter was 3 cents per share, compared to 11 cents diluted earnings per share in the prior year.
Net sales for the 12 months ending Dec. 31 were $175.6 million, a 28.1 percent decrease compared to the year ending Dec. 31, 2007. Net income for the 12-month period decreased 53.8 percent to $7.6 million, or 21 cents diluted earnings per share, compared to $16.4 million, or 43 cents diluted earnings per share in the prior year.
Marine Products today also announced a reduction in its quarterly dividend from .065 cents per share to 1 cent per share. The dividend will be payable March 10 to common shareholders of record on Feb. 10.
Hubbell said he expects the economic conditions to continue to affect the company into 2009.
“The winter boat show season is a very important indicator for us, and reports of attendance and sales at the early winter shows do not give us any reason to be hopeful about the upcoming retail selling season,” he said. “In addition, we continue to see signs that the ongoing financial crisis is damaging the availability of floorplan lending for our dealers, which is vital to our operations.”
Hubbell said that Marine Products continues to introduce new models and in the long run “will capturer greater market share and emerge from this downturn even stronger than in the past.”