Marine Products Corp. reported sales growth of more than 25 percent for the first quarter, as the company posted its highest quarterly sales in eight years.
For the quarter ended March 31, 2016, Marine Products, which manufactures the Chaparral and Robalo brands, generated net sales of $63,665,000, a 25.7 percent increase compared to $50,644,000 in the same period of the prior year.
The increase in net sales was due to a 36.7 percent increase in unit sales, partially offset by a 9.3 percent decrease in the average selling price per boat, the company said, with average selling price decreasing due to more sales of smaller boats. Sales were particularly strong for Robalo sport fishing boats, entry-level Chaparral H2O models, and Chaparral SunCoast Sportdecks.
Gross profit for the quarter was $12,688,000, or 19.9 percent of net sales, a 24.3 percent increase compared to gross profit of $10,205,000, or 20.2 percent of net sales, in the same period of the prior year. Gross profit for the first quarter increased compared to the prior year due to higher net sales. Gross margin declined slightly during the quarter compared to the prior year due to model mix, partially offset by improved manufacturing efficiencies resulting from higher production volumes.
Operating profit for the quarter was $5,645,000, an increase of 32.7 percent, compared to $4,254,000 in the first quarter of last year. Selling, general and administrative expenses were $7,043,000 in the first quarter of 2016, an increase of 18.3 percent compared to the first quarter of 2015. Selling, general and administrative expenses increased due to expenses that vary with sales and profitability, as well as higher advertising and boat show expenses. Selling, general and administrative expenses were 11.1 percent of net sales during the first quarter of 2016, a slight decrease compared to 11.8 percent of net sales during the same period of the prior year.
Net income for the quarter ended March 31, 2016, was $3,921,000, an increase of $992,000 or 33.9 percent, compared to net income of $2,929,000 for the first quarter of 2015. Diluted earnings per share were $0.10 in the first quarter of 2016, an increase of $0.02 per share compared to the first quarter of the prior year.
"The first quarter of 2016 continued the favorable trends of the past few years, and in fact, this quarter's sales were the highest quarterly sales in eight years," said Richard A. Hubbell, Marine Products' president and CEO. "We recorded improved sales of our Robalo outboard sportfishing boats, especially the Robalo 160 which we introduced early in this model year. In addition, our Chaparral SunCoast outboards sold well, and we experienced increased demand for our Chaparral H2O sterndrives. At the end of the first quarter of 2016, our dealer inventory was higher than at the same time last year, but appropriate to the level of dealer demand we see as we enter the strongest part of the retail selling season. We are very pleased with our dealers' and retail customers' reception to the new models we have recently introduced, as well as the general sales strength among our sterndrive models."
Hubbell also commented on the death of Chaparral President Jim Lane last month.
"Jim had served as the president of Chaparral for almost 40 years, and his passing is a loss to our company and to our industry," he said. "Our company and Jim's family appreciate the support of the recreational boating community over the past few weeks. The tenured operational management that remains in place at our company will continue our tradition of strong brand management, customer satisfaction and profitable financial performance for many years in the future."