Sales up 24 percent for Chaparral, Robalo parent

Marine Products Corporation, manufacturer of Chaparral and Robalo boats, announced Wednesday its unaudited results for the quarter ended September 30, 2015.

For the quarter ended September 30, 2015, Marine Products generated net sales of $47,038,000, a 24.0 percent increase, compared to $37,932,000 in the same period of the prior year.  The increase in net sales was due to higher unit sales of  Robalo outboard sport fishing boats, as well as higher sales of  Vortex Jet Boats and Chaparral Suncoast outboard boats during the quarter as compared to the prior year, the company said.

Gross profit for the quarter was $9,874,000, or 21.0 percent of net sales, a 41.7 percent increase compared to gross profit of $6,967,000, or 18.4 percent of net sales, in the same period of the prior year.  Gross profit for the third quarter increased compared to the prior year due to higher net sales and an improved gross margin.  Gross margin improved during the quarter compared to the prior year due to a favorable model mix and improved operating efficiencies due to higher production volumes.

Operating profit for the quarter was $4,454,000, an increase of 72.9 percent, compared to $2,576,000 in the third quarter of last year. Selling, general and administrative expenses were $5,420,000 in the third quarter of 2015, an increase of 23.4 percent compared to the third quarter of 2014.  Selling, general and administrative expenses increased due to expenses that vary with sales and profitability, as well as higher advertising expenses.  These increases were partially offset by decreases in warranty expenses, a result of favorable warranty claims experience. As a percentage of net sales, selling, general and administrative expenses were approximately the same during the third quarters of 2015 and 2014.

Net income for the quarter ended September 30, 2015 was $3,103,000, an increase of $1,221,000 or 64.9 percent, compared to net income of $1,882,000 for the third quarter of 2014.  Diluted earnings per share were $0.08 in the third quarter of 2015, an increase of $0.03 compared to the third quarter of the prior year.

Net sales for the nine months ended September 30, 2015 were $157,180,000, an increase of 17.6 percent, compared to the first nine months of 2014.  Net income for the nine-month period was $10,461,000 or $0.28 earnings per diluted share, compared to net income of $6,873,000, or $0.18 earnings per diluted share in the prior year.

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"We are pleased to report continued growth in sales of our Robalo outboard sport fishing boats during the third quarter," said president and CEO Richard A. Hubbell. "In addition, we reported increased sales of our Vortex Jet Boats and Chaparral SunCoast outboards, which are new in 2015.  Our profitability improved due to efficiencies gained from higher unit production. As the retail selling season for 2015 concludes, we are increasingly optimistic about the selling environment for our products.  The market for recreational boating continues to improve, and our dealers are enthusiastic about our 2016 models and are looking ahead to the winter boat show season. Although the international market for recreational boat sales continues to be weak, we note that our domestic sales increased by 32.4 percent during the third quarter of 2015 compared to the prior year. Our dealer inventories are comparable to the end of the second quarter and to this time last year, and our backlog is strong.  For these reasons, we have increased production during the fourth quarter in order to have sufficient current model year inventory to satisfy dealer demand."

MARINE PRODUCTS CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS  (In thousands except per share data)

Periods ended September 30, (Unaudited)

Third Quarter

Nine Months

2015

2014

% BETTER
(WORSE)

2015

2014

% BETTER
(WORSE)

Net Sales

$

47,038

$

37,932

24.0

%

$

157,180

$

133,609

17.6

%

Cost of Goods Sold

37,164

30,965

(20.0)

124,497

108,372

(14.9)

Gross Profit 

9,874

6,967

41.7

32,683

25,237

29.5

Selling, General and Administrative Expenses

5,420

4,391

(23.4)

17,552

15,768

(11.3)

Operating Profit

4,454

2,576

72.9

15,131

9,469

59.8

Interest Income

103

116

(11.2)

325

359

(9.5)

Income Before Income Taxes

4,557

2,692

69.3

15,456

9,828

57.3

Income Tax Provision 

1,454

810

(79.5)

4,995

2,955

(69.0)

Net Income 

$

3,103

$

1,882

64.9

%

$

10,461

$

6,873

52.2

%

EARNINGS PER SHARE 

   Basic  

$

0.08

$

0.05

60.0

%

$

0.28

$

0.19

47.4

%

   Diluted  

$

0.08

$

0.05

60.0

%

$

0.28

$

0.18

55.6

%

AVERAGE SHARES OUTSTANDING

   Basic  

36,889

36,904

36,982

36,950

   Diluted  

36,980

37,190

37,163

37,236

 

MARINE PRODUCTS CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE  SHEETS

At September 30, (Unaudited)

(in thousands)

2015

2014

ASSETS

Cash and cash equivalents

$

9,111

$

5,296

Marketable securities

9,007

12,024

Accounts receivable, net

3,961

3,515

Inventories

32,306

24,573

Income taxes receivable

713

332

Deferred income taxes

2,372

1,374

Prepaid expenses and other current assets

1,826

1,644

  Total current assets

59,296

48,758

Property, plant and equipment, net

12,809

11,052

Goodwill 

3,308

3,308

Other intangibles, net

465

465

Marketable securities

26,106

32,492

Deferred income taxes

2,831

3,347

Other assets

9,798

8,495

  Total assets

$

114,613

$

107,917

LIABILITIES AND STOCKHOLDERS' EQUITY

Accounts payable

$

9,083

$

5,939

Accrued expenses and other liabilities

9,986

10,369

  Total current liabilities

19,069

16,308

Long-term pension liabilities

6,465

6,518

Other long-term liabilities

77

83

  Total liabilities

25,611

22,909

Common stock 

3,814

3,817

Capital in excess of par value

3,479

3,638

Retained earnings

83,628

78,381

Accumulated other comprehensive loss

(1,919)

(828)

  Total stockholders' equity

89,002

85,008

  Total liabilities and stockholders' equity 

$

114,613

$

107,917

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