Marine Products Corp., the manufacturer of Chaparral and Robalo boats said sales, profits and income were all up for the first quarter of 2017.
"Our first quarter 2017 financial results reflect the beginning of another strong retail selling season," said Richard A. Hubbell, Marine Products' president and CEO. "Our Robalo outboard sport fishing boats continued to sell well, especially the Robalo 302, the Robalo 246 and our new Robalo 200 ES which features extra seating. In addition, our Chaparral H2O models generated higher sales, and we began to sell some of our Chaparral models with the new Surf Series option. At the end of the first quarter of 2017, our order backlog and dealer inventory levels were higher than at this time last year, as we and our dealers prepare for the remainder of the 2017 retail selling season."
For the quarter ended March 31, 2017, Marine Products generated net sales of $71,040,000, an 11.6 percent increase compared to $63,665,000 in the same period of the prior year.
The increase in net sales was primarily due to a 12.1 percent increase in unit sales as well as an increase in parts and accessories sales, partially offset by a slight decrease in the average selling price per boat, the company said.
During the quarter the company generated higher unit sales among its Chaparral H2O and Robalo models. Average selling prices decreased slightly during the first quarter of 2017 due to model mix.
Gross profit for the quarter was $14,906,000, a 17.5 percent increase compared to gross profit of $12,688,000 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 and improved production efficiencies, the company said. Gross margin during the first quarter was 21.0 percent compared to 19.9 percent in the first quarter of the prior year.
Operating profit for the quarter was $6,898,000, an increase of 22.2 percent compared to $5,645,000 in the first quarter of last year. This improvement, the company said, was due to higher gross profit partially offset by higher selling, general and administrative expenses during the first quarter of 2017 as compared to the prior year.
Selling, general and administrative expenses increased primarily due to expenses which vary with sales and profitability, such as warranty expense and sales commissions. Selling, general and administrative expenses were 11.3 percent of net sales during the first quarter of 2017 compared to 11.1 percent during the same period of the prior year.
Net income for the quarter was $5,261,000, an increase of $1,340,000 or 34.2 percent compared to net income of $3,921,000 for the first quarter of 2016. Diluted earnings per share were $0.15 in the first quarter of 2017, an increase of $0.05 or 50 percent compared to $0.10 diluted earnings per share in the prior year. Diluted earnings per share during the first quarter of 2017 increased compared to the prior year due to higher net income as well as a lower share count resulting from the tender offer completed during the fourth quarter of 2016.
Marine Products recorded an income tax provision of $1.7 million during the first quarter compared to a provision of $1.8 million for the first quarter of prior year. The 2017 provision reflects a beneficial discrete adjustment of $580 thousand related to the required adoption of an accounting pronouncement in the quarter. The amendments in the pronouncement require that excess tax benefits and deficiencies relating to share-based payment awards be recognized as a component of income tax expense rather than stockholders' equity as in prior periods.
uld cause the actual results to differ materially from management's projections, forecasts, estimates and expectations is contained in Marine Products' Form 10-K, filed with the Securities and Exchange Commission for the year ending December 31, 2016.