Marine Products Corporation reports third quarter results

Marine Products Corporation

Marine Products Corporation, manufacturer of Chaparral, Robalo and Vortex. announced its unaudited results for the quarter ended September 30, 2020. 

Marine Products generated net sales of $68,778,000, a 4.8% decrease compared to $72,212,000 in the same period of the prior year. The decrease in net sales was due to a 10.4% reduction in the number of units sold during the quarter as compared to the prior year, partially offset by a 7.8% increase in the average selling price per boat. Unit sales declined in most product categories compared to the prior year. Average selling prices increased due to a favorable model mix which included larger Chaparral Surf models and Robalo sport fishing boats.

Gross profit for the third quarter of 2020 was $16,236,000, a 3.1% increase compared to $15,749,000 in the same period of the prior year. Gross margin was 23.6% of net sales in the third quarter of 2020 compared to 21.8% in the third quarter of 2019. Gross margin as a percentage of net sales increased compared to the prior year due to a favorable model mix consisting of larger boats.

Richard A. Hubbell, Marine Products' President and Chief Executive Officer stated, "We accomplished a full quarter of production and sales following our temporary operational suspension during the second quarter due to concerns over the COVID-19 pandemic. In contrast to this time in a typical year, when the retail selling season is over and dealers are assessing their needs for the upcoming retail selling season, we are continuing to operate at the highest feasible operational cadence in order to fulfill the largest order backlog we have had in many years. Our dealer inventories remain at historically low levels. Sales in the recreational boating industry continue to benefit from the effects of the COVID-19 pandemic, which is preventing vacation travel and recreational activities in crowded environments, forcing families to remain isolated and close to home. As a result of this extraordinary situation, we are benefiting from the highest consumer demand in many years as individuals and families seek safe, enjoyable outdoor activities. We are also pleased to report growing market share in our sterndrive and outboard markets. For the 12 months ended June 30, 2020, our Chaparral sterndrive models held the second highest share of their category, with a market share of 16.4%. Our combined Chaparral and Robalo outboard models held a market share of 8.4%, the highest in that category, and within this outboard category, the market share of our Chaparral outboards increased significantly.

"We are evaluating an increase in our production levels, subject to supply chain constraints and labor availability. We are also allocating our production to satisfy as much dealer demand as possible, in order not to disappoint our dealers and retail customers. Our industry is approaching the winter boat show season, and this year, there is a great deal of uncertainty surrounding the feasibility of in-person shows. We are working closely with our dealers to plan for alternative means to market our 2021 models to prospective buyers and conduct the type of customer interaction that will help our customers to make purchasing decisions.

"As we announced in August, our Chairman of the Board, R. Randall Rollins, passed away following a short illness. He had held this position at Marine Products and its predecessor entity since 1986. He was proud of our company's success and its reputation for quality, and we will miss him. However, our long-standing Director Gary W. Rollins has assumed the role of Non-Executive Chairman, and in addition, we are pleased to have added two additional independent directors," concluded Hubbell.

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