MPX reports increase in net sales

ATLANTA – Marine Products Corporation reported its first quarterly sales increase since the third quarter of 2005 when it released its 2007 fourth quarter results earlier this week.

For the quarter ended Dec. 31, 2007, MPX – which manufactures Chaparral and Robalo fiberglass boats– generated net sales of $58,947,000, a 5.9 percent increase compared to $55,680,000 last year.

The increase in net sales was due to a 12.3 percent increase in the average selling price per boat, partially offset by a 5.4 percent decrease in the number of boats sold. Gross profit for the quarter was $12,299,000, or 20.9 percent of net sales, compared to $11,748,000, or 21.1 percent of net sales, in the prior year.

MPX said the net sales increase was due in large part to the success of the new Chaparral Sunesta Wide Tech and Xtreme, introduced in the 2008 model year, which began in the third quarter, and the continued strong sales of the SSX Sportdecks introduced in the 2007 model year.

Operating income for the quarter was $4,905,000, a 12.1 percent increase compared to the fourth quarter last year due to higher gross profit. Net income for the quarter was $4,002,000, an 8.5 percent increase compared to $3,687,000 in the prior year. Net income increased due to higher operating income, partially offset by lower interest income. Diluted earnings per share for the quarter were $0.11, a 22.2 percent increase compared to $0.09 diluted earnings per share in the prior year.

Net sales for the twelve months ended Dec. 31, 2007 were
$244,273,000, a 6.5 percent decrease compared to 2006. Net
income for the year decreased 19.2 percent to $16,423,000 or $0.43 diluted earnings per share compared to $20,314,000 or $0.52 diluted earnings per share in the prior year.

“The fourth quarter of 2007 marks our first quarterly sales increase since the third quarter of 2005,” said Richard A. Hubbell, Marine Products’ CEO. “This increase is due primarily to the strong sales of our re-designed Sunesta Wide Tech and Xtreme, although sales increased in our Signature Cruiser and Robalo sport fishing boats as well.

“We are in the midst of the winter boat show season, and as always, we are monitoring attendance and sales for an indication of the strength of the upcoming retail selling season. At this point, the indications are that general attendance and our sales are comparable to, or lower than last year, with regional variances based on the local economy, weather, and boating conditions in specific markets. We also note that the severe drought in the Southeast has negatively impacted our sales in several of these large markets.

“While we are happy with the success of our new Sunesta and this
quarter’s financial results compared to the prior year, we believe that the boating industry’s long downturn will continue for at least the near term.

“Fuel prices continue to be high, and the problems in the residential
mortgage market which came to light in 2007 continue to impact both consumer confidence as a whole, as well as consumer spending decisions in popular boating areas such as Florida and California. We will continue to use our financial strength and other resources to continue developing new products which will allow us to increase our competitive advantages during a difficult time in our industry.”

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