Marine Products Corp., the builder of Chaparral and Robalo boats, today reported sharply higher third-quarter sales and profits, further evidence of an ongoing recovery in the marine industry.
The Atlanta-based company said it earned $2.1 million, or 6 cents a share, for the quarter that ended Sept. 30, a 76 percent increase from $1.2 million, or 3 cents a share, in the same quarter last year.
Third-quarter sales totaled $38.5 million, a 73 percent increase from $22.3 million last year. The company said the sales gain was attributable to a 125 percent rise in the number of boats sold, partially offset by a 23.9 percent decrease in the average selling price per boat.
The company said the average selling prices reflected significantly higher unit sales of its value-priced Chaparral H2O and Robalo sportfishing boats. Both of those products carry lower average selling prices than the other models in its lineup.
“Overall market conditions continued to improve and Marine Products Corp. participated in this market improvement through the ongoing success of our value-priced Chaparral H2O and Robalo models, which have generated strong appeal to our retail customers,” Marine Products CEO Richard A. Hubbell said in a statement.
“In general, we believe that the selling conditions for recreational boats have improved due to moderately stronger consumer sentiment and a stabilizing residential real estate market. Some of the best evidence of this is the success of our newer models and the significant market share gains that we have achieved in 2012. During the first six months of 2012 our retail market share in the 18- to 35-foot sterndrive fiberglass market increased to 11.8 percent, compared to 8.4 percent during the 12 months ended Dec. 31, 2011. Our market share increased the most in the market in which Chaparral’s H2O participates.
“During the third quarter we held our annual dealer meeting and introduced expanded offerings in the value-priced Chaparral and Robalo models for the 2013 model year, as well as two new Chaparral SSX models, which have the same styling and features as our popular Chaparral 327 SSX. Our current product line, including the enhanced H2O lines, were well received by our dealers and have already led to additional orders. Also during the third quarter we were awarded our fifth consecutive National Marine Manufacturers Association Customer Satisfaction Index Award in all of our product lines.
“At the end of the third quarter of 2012 our dealer inventory was slightly higher than at the end of the second quarter, but order backlog continues to be high due to strong dealer demand. During the fourth quarter of 2012 we will continue to observe dealer inventories, but we also believe that our order backlog will continue to support our current production levels. We are very pleased with our third-quarter results and the strong 2012 retail selling season; however, we continue to monitor the economic environment for changes in consumer confidence and other factors affecting dealer and retail demand.”
The company said operating profit in the third quarter increased by 85.6 percent, to $2.8 million, compared with $1.5 million in the third quarter of last year because of increased net sales and gross profit, partially offset by higher selling, general and administrative expenses.
Selling, general and administrative expenses increased because of increases in expenses that vary with sales and profitability, such as incentive compensation, sales commissions and warranty expense, the company said.
Net sales for the first nine months of this year were $114.8 million, an increase of 46.2 percent from $78.5 million in the same period last year. Net income for the nine-month period was $5.9 million, or 16 cents a share, an increase of 91 percent from $3.1 million, or 8 cents a share, last year. The company has reported a profit in each of the first three quarters.
Marine Products additionally said its board approved a quarterly dividend of 2 cents a share and a special year-end dividend of 55 cents a share. Both will be paid Dec. 10 to shareholders of record on Nov. 9.