ATLANTA — Marine Products Corp., which manufactures Chaparral and Robalo brand boats, experienced favorable financial results for the quarter ending Sept. 30, according to financial figures reported in a recent press release from the company.
Richard A. Hubbell, CEO of Marine Products stated, “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.”
During the third quarter, Marine Products generated net sales of $24,027,000 compared to $7,011,000 last year. The increase in net sales was due to a significant increase in the number of boats sold and lower retail incentive costs as a percentage of net sales compared to the prior year, partially offset by a 4.9 percent decrease in the average selling price per boat, according to the company. The decrease in average selling price per boat was principally due to a shift in model mix in the company’s SSi Wide Tech and Robalo product lines, it stated.
Gross profit for the quarter was $4,076,000, or 17.0 percent of net sales, compared to a gross loss of $585,000 in the prior year. The increase in gross profit in the third quarter of 2010 resulted from higher sales, lower retail incentive costs as a percentage of net sales, and increased efficiencies due to higher production levels, reported Marine Products.
Operating profit for the quarter was $1,177,000 compared to an operating loss of $3,340,000 in the third quarter of last year. The company said its operating profit increased compared to the prior year primarily due to higher net sales and gross profit compared to the prior year.
Selling, general and administrative expenses increased slightly to $2,899,000 in the third quarter compared to $2,755,000 in the prior year. However, as a percentage of net sales, selling, general and administrative expenses decreased from 39.3 percent in the prior year to 12.1 percent in the current quarter due to leverage of fixed costs over higher net sales, the company stated.
Net income for the quarter was $1,000,000 compared to a net loss of $1,608,000 in the prior year. Net income increased compared to the prior year due to higher operating profit, partially offset by an increase in the income tax provision and slightly lower interest income, Marine Products reported. Earnings per share for the quarter were $0.03 compared to $0.04 loss per share in the prior year.
Net sales for the nine months ended Sept. 30 were $80,197,000, a 181.9-percent increase compared to the first nine months of 2009. Net income for the nine-month period was $3,385,000 or $0.09 earnings per share compared to net loss of $7,929,000 or $0.22 loss per share in the prior year.
“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,” concluded Hubbell.