Marine Products Corporation (NYSE: MPX), builder of Chaparral and Robalo Boats, announced its unaudited results for the quarter ended June 30, 2017.
For the quarter ended June 30, 2017, Marine Products generated net sales of $71,484,000, a 9.9 percent increase, compared to $65,066,000 in the same period of the prior year. The increase in net sales was due to a 3.3 percent increase in unit sales and a 5.1 percent increase in the average selling price per boat. During the quarter the company generated higher unit sales in Robalo sport fishing boats and Chaparral H2O models. Average selling prices increased during the quarter due to a favorable model mix within all model lines, according to the company.
Gross profit for the quarter was $16,287,000, an 18.0 percent increase compared to gross profit of $13,808,000 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 22.8 percent in the second quarter of 2017, compared to 21.2 percent in 2016. Gross margin improved during the second quarter of 2017 as compared to the prior year due to the increase in average selling prices as well as manufacturing efficiencies resulting from higher production.
Operating profit for the quarter was $8,722,000, an increase of 29.9 percent, compared to $6,712,000 in the second quarter of last year. Selling, general and administrative expenses were $7,565,000 in the second quarter of 2017, an increase of 6.6 percent compared to the second quarter of 2016. Selling, general and administrative expenses increased compared to the prior year due to expenses that increase with higher activity levels, as well as increased compensation expense consistent with improved profitability. Selling, general and administrative expenses were 10.6 percent of net sales during the second quarter of 2017, a slight decrease compared to 10.9 percent of net sales during the same period of the prior year.
Net income for the quarter ended June 30, 2017 was $6,119,000, an increase of $1,301,000 or 27.0 percent, compared to net income of $4,818,000 for the second quarter of 2016. Diluted earnings per share were $0.18 in the second quarter of 2017, an increase of $0.05 per share compared to the second quarter of the prior year. Diluted earnings per share increased due to higher net income as well as a lower share count resulting from the company's open market share repurchases and partial tender offer conducted during the past year.
Net sales for the six months ended June 30, 2017 were $142,524,000, an increase of 10.7 percent compared to the first six months of 2016. Net income for the six-month period was $11,380,000 or $0.33 diluted earnings per share, compared to net income of $8,739,000, or $0.23 diluted earnings per share in the prior year.
"Our second quarter 2017 financial results reflect the continuation of a strong 2017 retail selling season. Our Robalo outboard sport fishing boats continued to sell well, especially the Robalo 302 and the Robalo 242,” Richard A. Hubbell, Marine Products's president and chief executive officer. “We also generated strong sales volume within our Chaparral H2O outboards and our SSi and SSX Surf Series, both of which were new for 2017.
At the end of the second quarter of 2017, our order backlog was slightly lower 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," he added.
Marine Products Corporation held a conference call July 26 at 8 a.m. Eastern Time to discuss the results for the quarter. A replay is available in the investor relations section of Marine Products's website.