Marine Products Corp., the builder of Chaparral and Robalo boats, reported a nearly 11 percent increase in net sales and swung to a net profit in the first quarter.
For the quarter that ended March 31, Marine Products generated net sales of $27.14 million, a 10.8 percent increase, compared with $24.5 million last year. The increase was attributable to a 4.6 percent rise in the number of boats sold, coupled with a 6.4 percent increase in the average selling price per boat, the company said.
Unit sales increased among the company's sportboat and outboard sportfishing boat product lines.
Gross profit for the quarter was $4,460,000, or 16.4 percent of net sales, compared with a gross profit of $3,445,000, or 14.1 percent of net sales, in the prior year. The increase was attributable to higher unit sales, lower retail incentive costs as a percentage of sales and increased efficiencies because of higher production levels, compared with the prior year.
Net profit for the quarter was $666,000, or 2 cents a share, compared with a net loss of $80,000 in the prior year.
"During the first quarter of 2011, Marine Products Corporation operated at higher production levels than the first quarter of last year in response to stable dealer demand. Our improving results generated an increase in our cash and marketable securities balances, compared to the end of 2010," CEO Richard Hubbell said in a statement.
"Attendance at the winter boat show season improved moderately, compared to last year, and we have experienced an increase in the number of smaller boats sold to our dealers, which is traditionally a sign of impending improvement in demand," he added.
Hubbell noted that the company enters the height of the retail selling season with manageable dealer inventories and backlog.
"Although we believe that retail demand has stabilized, we share concerns with our dealers about this spring's increase in fuel prices and the persistent weakness in residential real estate, both of which tend to discourage consumers from making large discretionary purchases, such as pleasure boats," he said.
"In spite of a retail selling environment that is not continuing to strengthen as we would like, we note that this season's retail sales are predominantly sales of current models to customers who recognize quality products and are interested in good service after the sale," Hubbell added.
Marine Products stock closed at $7.49 a share on Tuesday. Its 52-week high and low are $8.28 and $5.02.