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Marine Products reports 3Q results

Marine Products Corp., the builder of Chaparral and Robalo Boats, today reported an increase of more than $17 million in third-quarter net sales

For the quarter that ended Sept. 30, Marine Products generated net sales of $24.03 million, compared with $7.01 million in the same period last year. The increase in net sales was attributable to a significant increase in the number of boats sold and lower retail incentive costs as a percentage of net sales, compared with the prior year, partially offset by a 4.9 percent decrease in the average selling price per boat, the company said.

The decrease in the average selling price per boat was principally attributable to a shift in model mix in its SSi Wide Tech and Robalo product lines.

Gross profit for the quarter was $4.08 million, or 17 percent of net sales, compared with a gross loss of $585,000 in the prior year.

The gross profit in the third quarter resulted from higher sales, lower retail incentive costs as a percentage of net sales and increased efficiencies because of higher production levels.

"We operated at significantly higher production levels, compared to the prior year, in response to retail demand for new models and lower dealer inventories," the company said in a statement.

Net income for the quarter was $1 million, or 3 cents a share, compared with a net loss of $1.61 million, or 4 cents a share, in the prior year.

"During the third quarter of 2010, Marine Products Corp. benefited from appropriately lower dealer inventories and improved dealer order levels. Unit sales to dealers increased significantly across all of our product lines, compared to the third quarter of 2009, when our production and sales were very low in order to allow our dealers to sell their existing inventory," CEO Richard Hubbell said in a statement.

"Although our overall average selling prices declined during the quarter, we generated higher average selling prices in our Signature Cruiser and Sunesta Wide Tech product lines, as we introduced two larger models last quarter, which our dealers received enthusiastically," he added.

Net sales for the nine-month period that ended Sept. 30 were $80.2 million, a 181.9 percent increase from the first nine months of 2009. Net income for the nine-month period was $3.4 million, or 9 cents a share, compared with a net loss of $7.9 million, or 22 cents a share, in the prior year.

"Our near-term outlook for recreational boating continues to be uncertain. The lingering recession, low consumer confidence and the severely depressed residential real estate environment in many recreational boating areas continue to force us to believe that the selling environment for our products will continue to be lackluster in the immediate future," Hubbell said.

"Our strategy continues to be to use our financial strength and management expertise to design and build innovative products and to expand and improve our dealer network, thereby positioning our company to benefit when demand for recreational boats improves," he added.

Marine Products' stock was trading at $6.95 this morning. Its 52-week high and low are $8.28 and $3.88, respectively.

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