Marine Products Corporation, which manufactures Chaparral and Robalo boats, announced its unaudited results for the quarter ended June 30, 2016.
For the quarter, Marine Products generated net sales of $65,066,000, a 9.4 percent increase, compared to $59,498,000 in the same period of the prior year. The increase in net sales was due to a 10.9 percent increase in unit sales, partially offset by a 2.9 percent decrease in the average selling price per boat. During the quarter the company said it generated higher unit sales in many of its product lines, including Robalo sport fishing boats, the largest Chaparral H2O model, and Chaparral SunCoast Sportdecks. Average selling prices decreased during the quarter due to a change in model mix, the company said.
Gross profit for the quarter was $13,808,000, a 9.6 percent increase compared to gross profit of $12,604,000 in the same period of the prior year. Gross profit for the second quarter increased compared to the prior year due to higher net sales. Gross margin was 21.2 percent in the second quarter of both years.
Operating profit for the quarter was $6,712,000, an increase of 4.5 percent, compared to $6,423,000 in the second quarter of last year. Selling, general and administrative expenses were $7,096,000 in the second quarter of 2016, an increase of 14.8 percent compared to the second quarter of 2015. Selling, general and administrative expenses increased due to higher salaries and warranty expense, partially offset by lower incentive compensation compared to the prior year. Selling, general and administrative expenses were 10.9 percent of net sales during the second quarter of 2016, a slight increase compared to 10.4 percent of net sales during the same period of the prior year.
Net income for the quarter ended June 30, 2016, was $4,818,000, an increase of $389,000 or 8.8 percent, compared to net income of $4,429,000 for the second quarter of 2015. Diluted earnings per share were $0.13 in the second quarter of 2016, an increase of $0.01 per share compared to the second quarter of the prior year.
Net sales for the six months ended June 30, 2016, were $128,731,000, an increase of 16.9 percent compared to the first six months of 2015. Net income for the six-month period was $8,739,000 or $0.23 diluted earnings per share, compared to net income of $7,358,000, or $0.20 diluted earnings per share in the prior year.
Richard A. Hubbell, Marine Products' President and Chief Executive Officer stated, "Our second quarter financial results reflect a strong retail selling season and the continued popularity of many of our new models. As we reported at the end of the first quarter, our Robalo outboard sport fishing boats continued to sell well in the second quarter, especially the new Robalo 160. We also generated higher sales of our Chaparral SSX bowriders, and the largest of our Chaparral H2O sport boats. In addition, sales of our Chaparral Vortex jet boats have benefited from strong dealer and consumer demand this year.
"At the end of the second quarter, our dealer inventory was lower than at the end of the first quarter, and our order backlog had increased. The most recently available market share statistics show that our Chaparral sterndrive boats continue to hold the highest market share in their category. Our annual dealer conference will take place in the next few weeks, and we look forward to our dealers' reception to our 2017 models and learning about their perception of consumer demand for the coming model year. If our near-term business indicators continue to be strong, we intend to increase production at the end of the third quarter as we introduce our 2017 models," concluded Hubbell.