Marine Products announces Q4 results

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Chaparral and Robalo parent company Marine Products generated net sales of $62.1 million for the fourth quarter of 2018, a 5.4 percent decrease compared to $65.6 million, a result of international sales being off 50 percent due to tariffs.

The decrease in net sales was due to an 18.1 percent decrease in units sold, partially offset by a 14.2 percent increase in the average selling price per boat, the company said.

Gross profit for the quarter was $13 million, a 9.4 percent decrease compared to gross profit of $14,366,000 in the same period of the prior year, due primarily to lower net sales.

Labor also made the quarter difficult for Marine Products; gross margin as a percentage of net sales was 21 percent in the fourth quarter, compared to 21.9 percent last year. The company attributed that decrease to production inefficiencies related to labor.

Operating profit for the quarter was $6 million, a decrease of 19.5 percent, compared to $7.4 million in the fourth quarter of last year.

Selling, general and administrative expenses as a percentage of net sales were 11.3 percent in the fourth quarter of 2018 compared to 10.5 percent of net sales during the fourth quarter of 2017.

“Marine Products’ U.S. domestic sales declined slightly during the fourth quarter of 2018 compared to the prior year,” said Marine Products CEO Rick Hubbell in a statement. “However, our international sales decreased by more than 50 percent compared to the prior year, to 3.2 percent of total sales, due in large part to the impact of trade tariffs that were enacted during 2018.”

The impact of the decline in international sales was partially offset by an increase in domestic sales of Chaparral H2O and SSX models and one of the 24-foot Robalo models.

“On a positive note, our order backlog at the end of the fourth quarter was higher than at the end of the fourth quarter of last year and dealer inventories were relatively unchanged, reflecting dealer enthusiasm and a strong order outlook for the next few months,” said Hubbell. “In support of this theme, we note that attendance at many of the early 2019 boat shows has been strong.”

The company declared a regular quarterly dividend of $0.12 per share, a 20 percent increase compared to its regular quarterly dividend of $0.10 per share. Also during the fourth quarter, Marine Products repurchased 168,366 shares of common stock in the open market.

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