Marine Products reports drop in 2nd quarter sales

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Marine Products Corp. reported a $12.1 million decline in net sales, or 17.9 percent, for the second quarter ending June 30, compared with the same period in 2007.

The change in net sales was comprised of a 24.8 percent decrease in the number of boats sold, partially offset by a 6.8 percent increase in average gross selling price per boat.

Sales of the new Chaparral Sunesta Wide Techs and Xtremes continued to be strong during the quarter, and accounted for the increase in the average selling price per boat, the company said in documents filed last week with the Securities and Exchange Commission.

The decrease in net sales in the domestic market was partially offset by strong growth outside the United States. In the second quarter of 2008, sales outside the U.S. accounted for about 38 percent of net sales compared to about 28 percent of net sales the prior year.

Net sales for the six months ending June 30 decreased $11.6 million, or 8.7 percent, compared to the same period in 2007. The change in net sales was comprised of a 16.6 percent decrease in the number of boats sold offset by a 7.8 percent increase in average gross selling price per boat.

For the first six months of 2008, sales outside the United States accounted for about 35 percent of net sales compared to nearly 27 percent of net sales for the prior year.

“During the second quarter, we continued the cost reduction measures that we undertook previously, and at the end of the quarter, we reduced production levels because of low order backlogs, high dealer inventories and our lack of confidence in an increase in demand in the near future,” Marine Products said in its SEC documents.

“We anticipate that the company will continue to experience the effect of reduced consumer demand for the remainder of 2008, which will adversely affect net sales, net income, operating margins and cash flows,” the company added.

At mid-morning, Marine Products stock was trading at $7.99 a share. Its 52-week high and low are $9.62 and $6.05, respectively.

Atlanta-based Marine Products, through its wholly-owned subsidiaries Chaparral and Robalo, is a leading manufacturer of recreational fiberglass powerboats.

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