Marine Products Corporation reports Q4 results
Marine Products Corporation (NYSE: MPX) announced its unaudited results for the quarter and year ended December 31, 2020. Marine Products is a manufacturer of fiberglass boats under three brand names: Chaparral, Robalo and Vortex. Chaparral’s sterndrive models include SSi and SSX, along with the Chaparral Surf Series. Chaparral’s outboard offerings include OSX Luxury Sportboats, the 267 SSX OB, SSi outboard models and SunCoast Sportdecks. Robalo builds an array of outboard sport fishing boats, which include center consoles, dual consoles and Cayman Bay Boat models. Chaparral also offers jet powered boats under the Vortex brand name.
For the quarter ended December 31, 2020, Marine Products generated net sales of $71,110,000, a 47.6% increase compared to $48,175,000 in the same period of the prior year. The company said the increase in net sales was due to a 27.8% increase in the number of units sold during the quarter as compared to the prior year, a 14.1% increase in the average selling price per boat, and an increase in parts and accessories sales. Unit sales increased among most of the company’s product categories compared to the prior year. Average selling prices increased due to a favorable model mix which included larger models in most of its product categories.
Gross profit for the fourth quarter of 2020 was $17,431,000, a 65.7% increase compared to $10,522,000 in the same period of the prior year. Gross margin was 24.5% of net sales in the fourth quarter of 2020 compared to 21.8% in the fourth quarter of 2019. Gross margin as a percentage of net sales increased compared to the prior year due to the efficiency benefits of higher production and a favorable model mix consisting of larger boats.
Operating profit for the fourth quarter of 2020 was $9,083,000, an increase of $4,905,000 compared to $4,178,000 in the fourth quarter of last year. Selling, general and administrative expenses were $8,348,000 in the fourth quarter of 2020 compared to $6,344,000 in the fourth quarter of 2019. Selling, general and administrative expenses increased due to expenses which increase with sales and profitability, such as sales commissions and incentive compensation. Selling, general and administrative expenses were 11.7% of net sales in the fourth quarter of 2020 compared to 13.2% of net sales during the fourth quarter of 2019.
Net income for the fourth quarter of 2020 was $6,994,000, an increase of $3,452,000 compared to $3,542,000 in the fourth quarter of 2019. Diluted earnings per share were $0.21 in the fourth quarter of 2020 compared to $0.10 in the fourth quarter of 2019. The effective tax rate for the fourth quarter of 2020 was 23.1%, an increase compared to 17% in the fourth quarter of 2019.
Net sales for the 12 months ended December 31, 2020 were $239,825,000, a decrease of 17.9% compared to the 12 months ended December 31, 2019. Net income for the 12 months ended December 31, 2020 was $19,444,000 or $0.57 diluted earnings per share, compared to net income of $28,239,000, or $0.83 diluted earnings per share in the prior year.
“Our fourth quarter results demonstrate the continuation of consumers’ renewed interest in recreational boating which began during the second quarter of 2020,” Richard A. Hubbell, Marine Products’ President and Chief Executive Officer stated. “We operated at a higher production rate than usual during a typical fourth quarter, as dealer inventory remained historically low and order backlog remains high. As we begin 2021, we are encouraged by the continued strong interest by our dealers and retail customers and we look forward to an exceptionally strong market during the near term. We are also very pleased by our continued strong market share, and I would like to note that for the 12 months ended on September 30, 2020, our Robalo product line held the highest market share in the outboard market in its size range. The combination of our Robalo and Chaparral outboard units held a market share of 6.9% of the outboard market.
“The 2021 winter boat show season has been cancelled due to the COVID-19 pandemic. This time of year represents a meaningful opportunity to introduce our new models for the year and to assess demand for the upcoming retail selling season. Since the beginning of the pandemic, we have been cooperating with our dealers to conduct as much virtual marketing as possible, and we are continuing this effort in 2021. We believe that these efforts are helping our customers make these important purchasing decisions remotely. As we plan this year, we are also very aware of potential supply chain constraints and labor shortages resulting both from high demand and continuing pandemic concerns,” concluded Hubbell.
