ATLANTA, Ga. – Boat builder Marine Products Corp. (Amex: MPX) is on the lookout for good acquisitions, the company reported in an earnings conference call this morning.
While the company said there are many potential acquisitions in the marine industry, “we would only be interested in a brand name that would complement Chaparral and Robalo” and the target acquisition would have to be “big enough to make a difference.”
MPX can certainly afford a jump onto the acquisitions path. In fact, the company said this morning that it believes its balance sheet sets it apart from its competitors.
As of the end of 2003, the boat builder had $26 million in cash and cash equivalents, an increase of $9.5 million over 2002.
MPX reports record fourth quarter
For the quarter ended December 31, Marine Products generated net sales of $47,019,000, the highest fourth quarter net sales in its history, and a 32-percent increase compared to $35,614,000 last year, it reported in a statement today.
The increase in net sales was due to a 12.7-percent increase in the average sales price per boat and an 18.9-percent increase in the number of boats sold, according to the company. The increase in average sales prices was due to sales of larger boats, which the company referred to as a “favorable model mix.”
Gross profit for the quarter was $13,171,000, a 44.4 percent increase over the same period in 2002. Gross profit as a percentage of sales was 28.0 percent, an increase of 2.4 percentage points compared to the fourth quarter of 2002, the company reported.
Operating income for the quarter was $6,767,000, a 45.3-percent increase compared to the fourth quarter last year due to higher gross profit, partially offset by higher selling, general and administrative expenses.
Net income for the quarter ended December 31 was $4,458,000, a 51.1-percent increase compared to $2,951,000 in the prior year. Net income increased due to higher operating income and a lower effective income tax rate, according to Marine Products.
2003 net sales also up
Net sales for the 12 months ended December 31 were $193,980,000, a 19.2-percent increase compared to the prior year. Net income for the year increased 45.9 percent to $18,072,000 compared to $12,389,000 last year.
The company also reported an increase in gross margins due in part to increased manufacturing efficiencies, something Marine Products said it expects to continue to grow, along with its market share.
“The fourth quarter of 2003 continued the strong performance from earlier this year, making 2003 a record year for Marine Products Corp.,” stated Richard A. Hubbell, Marine Products’ chief executive officer. “Our average unit sales price rose by over 12 percent during the quarter, due to selling a larger number of our cruisers and our larger sportboats than in 2002. At six percent of net sales this quarter, Robalo exhibited exceptionally strong growth in unit sales and in average sales price.”
Improving customer service
Though in the fourth quarter Chaparral’s Sterndrive Bowrider Boats were selected by the National Marine Manufacturers Association (NMMA) for its first ever Customer Service Index award, Hubbell said the company recognizes that “this is an area of our business that we need to improve to continue our profitable growth.”
A key part of improving customer service is enhancing the company’s relationship with its dealers, Hubbell said. Therefore, Marine Products is “investing more into our sales and service training programs with the opening of our new training facility on site at the Chaparral campus in Nashville, Georgia. In addition to the knowledge that these seminars impart on our dealers, these programs bring goodwill to the relationship that we expect to be ultimately reflected in the dealers’ sales.”
Marine Products is a manufacturer of fiberglass boats under two brand names: sterndrive and inboard pleasure boats by Chaparral, including SSi Sportboats, Sunesta Deckboats, and Signature Cruisers, and outboard sport fishing boats by Robalo.
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— Liz Walz