ATLANTA – Net sales for Marine Products Corp., fell 2.1 percent for the fourth quarter and 3.9 percent for the 12 months ended Dec. 31, the company reported this week.
Net sales for the fourth quarter fell to $55,680,000 from $56,873,000 during the same period the year before and net sales for the 12 months ended Dec. 31 were $261,378,000, a 3.9 percent decrease compared to 2005.
The company reported that its net income for the year decreased 22.5 percent, to $20,314,000 or $0.52 diluted earnings per share compared to $26,223,000 or $0.65 diluted earnings per share last year and said diluted earnings per share decreased because of lower operating income, partially offset by higher interest income.
The fourth quarter decrease in net sales was due to a 4.5 percent decrease in the number of boats sold, partially offset by a slight increase in average gross selling price per boat of 0.4 percent. MPX said unit sales decreased in most product lines, which was partially offset by increased unit sales of higher-priced SSi Sportboats.
Gross profit for the quarter was $11,748,000, or 21.1 percent of net sales, compared to $13,153,000, or 23.1 percent of net sales, in the prior year. The decrease in gross profit as percent of net sales was primarily the result of increased raw materials costs which were not completely offset by model year price increases, and manufacturing inefficiencies due to lower production volumes.
“We have entered the winter boat show season, which is a very important time to assess consumer demand for the upcoming retail selling season,” said Richard A. Hubbell, Marine Products’ Chief Executive Officer. “Thus far, indications are consistent with our earlier opinion that consumer demand is lower than this time last year. Our market share has held firm, and we continue to focus on larger boats, as evidenced by the higher unit sales of larger SSi Sportboats in the fourth quarter. We also continue to focus on innovation and development of new products. Our new SSX Sportdecks are selling well this year, and we plan to introduce a 40-foot Chaparral Yacht for the 2008 model year.
“Our response to this industry environment is to establish production levels necessary to maintain reasonable dealer inventories and order backlog, which will prepare us to capture market share when industry conditions improve. As we move into 2007, we will work with our dealers to closely monitor retail activity, consumer confidence, fuel prices, and other indicators of retail demand, and prepare to react swiftly to available opportunities.”
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