Marine Products Corp. reports fourth quarter 2017 results

Marine Products Corp. has announced a net sales increase of almost 15 percent for the fourth quarter of 2017.

Higher unit sales were reported for the company's Chaparral Surf Series models, its larger Chaparral SSX Sportboats, and Robalo Explorer models. 

"Our fourth quarter 2017 financial results were driven by higher volumes and a model mix which included larger boats, both of which favorably impacted our financial results," said Richard A. Hubbell, Marine Products' president and chief executive officer.

During the company's annual dealer conference held a few months ago, dealers were optimistic about the 2018 retail selling season and were impressed with the model lineup, Hubbell said.

Early indications of attendance during the winter boat show season are favorable, and the company believes it enjoy a strong 2018 retail selling season, he added.

"Our dealer inventories and backlog are slightly higher than at this time in 2016 as we prepare to support dealer demand in the coming months," Hubbell said. "In addition, we are pleased to report continued market share gains in both our sterndrive, and outboard sport fishing boat product lines."

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For the 12-month period ending in September 2017, Chaparral's market share increased to 16.7 percent of the sterndrive market in its size category, and Robalo's market share increased to 5.3 percent of its market, and was the fourth largest brand in this category, Hubbell reported.

For the quarter ending Dec. 31, 2017, Marine Products generated net sales of $65.6 million,  a 14.6 percent increase, compared to $57.2 million in the same period of the prior year. The increase in net sales was due to an 11.7 percent increase in the average selling price per boat, as well as an increase in parts and accessories sales, the company reported.

Unit sales for the quarter increased by 4 percent compared to the prior year. Average selling prices increased during the quarter due to a model mix which included larger boats.

Gross profit for the quarter was $14.4 million, a 17.7 percent increase compared to gross profit of $12.2 million  in the same period of the prior year. Gross profit for the fourth quarter increased compared to the prior year due to higher net sales and a favorable model mix.

Gross margin was 21.9 percent in the fourth quarter of 2017, compared to 21.3 percent in 2016. Gross margin improved during the fourth quarter of 2017 as compared to the prior year due to the increase in average selling prices and improved manufacturing efficiencies.

Operating profit for the quarter was $7.4 million, an increase of 42.7 percent, compared to $5.2 million in the fourth quarter of last year. 

Excluding the impact of Tax Reform, net income for the quarter ended Dec.  31, 2017 was $5 million, an increase of $1.3 million or 35.4 percent, compared to net income of $3.7 percent for the fourth quarter of 2016. 

Net sales for the 12 months ending Dec. 31, 2017 were $267 million an increase of 10.8 percent compared to the prior year. Net income for the 12 months ending Dec. 31, 2017 was $19 million. Net income for the twelve months, excluding the impact of Tax Reform, was $20 million or $0.60 earnings per diluted share, an increase of $4.2 million or 25.3 percent compared to net income of $16.7 million or $0.44 earnings per diluted share in the prior year. 

During 2018, Marine Products Corp. estimates that its annual effective tax rate will be approximately in the low 20 percent range. Since Marine Products believes that it will generate continued positive financial results, the company believes that it will benefit from this lower tax rate through increased earnings and operating cash flow in 2018.

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