Marine Products Corporation — manufacturer of fiberglass boats under the brand names of Chaparral and Robalo — announced its unaudited results for the quarter and year ended December 31, 2021.
For the quarter ended December 31, 2021, Marine Products generated net sales of $76,537,000, a 7.6% increase compared to $71,110,000 in the same period of the prior year. The increase in net sales was due to a 21.1% increase in the average selling price per boat, partially offset by a decrease of 11.1% in the number of boats sold. Average selling prices increased primarily due to model year and other price increases coupled with a favorable model mix. In spite of strong dealer and consumer demand, unit sales decreased in most product categories compared to the prior year as the company worked diligently to overcome significant supply chain difficulties to deliver as many boats as possible.
“The majority of our sales during the fourth quarter of 2021 were of 2022 model year boats, which generated higher average selling prices due to a continued shift in model mix and new model year pricing,” stated Richard A. Hubbell, Marine Products’ President and Chief Executive Officer. “Our fourth quarter results also reflect the formidable challenges presented by supply chain problems and the recent COVID surge. Although dealer and consumer demand once again continued beyond our traditional retail selling season, our unit sales did not fully reflect this positive trend. Dealer inventories remain at historically low levels, and order backlog and sales demand indications continue to extend beyond our current model year’s projected production. These issues also continued to increase our working capital requirements.”
“During the fourth quarter we continued to work with our suppliers to develop realistic delivery schedules in order to plan our production schedules and manage production efficiency. Supply chain problems negatively impacted fourth quarter production and deliveries, and unfortunately, these concerns will continue to impact our operations during the first quarter of 2022,” Hubbell added. “We value our employees’ well-being, and earlier in the year we began to provide on-site COVID testing and vaccination services for our employees. In spite of employees’ enthusiastic response to these initiatives, however, the surge in COVID cases over the past few months has impacted employee attendance at least during the first quarter of 2022.
Gross profit for the fourth quarter of 2021 was $19,158,000, a 9.9% increase compared to $17,431,000 the fourth quarter of the prior year. Gross margin as a percentage of net sales increased to 25% in the fourth quarter of 2021 compared to 24.5% in the fourth quarter of 2020. Gross margin as a percentage of net sales increased due to a favorable model mix and model year price increases, partially offset by higher materials costs and less efficient production as compared to the fourth quarter of the prior year.
Operating profit for the fourth quarter of 2021 was $10,661,000, an increase of 17.4% compared to operating profit of $9,083,000 in the fourth quarter of last year. Selling, general and administrative expenses were $8,497,000 in the fourth quarter of 2021 compared to $8,348,000 in the fourth quarter of 2020. Selling, general and administrative expenses as a percentage of net sales were 11.1% in the fourth quarter of 2021 compared to 11.7% of net sales during the fourth quarter of 2020.
Net income for the fourth quarter of 2021 was $8,448,000, an increase of 20.8% compared to net income of $6,994,000 in the fourth quarter of 2020.
Net sales for the twelve months ended December 31, 2021 were $298,014,000, an increase of 24.3% compared to the twelve months ended December 31, 2020. Net income for the twelve-month period was a record $29,026,000, or $0.85 diluted earnings per share, compared to net income of $19,444,000, or $0.57 diluted earnings per share in the prior year.
“As we manage these issues, we remain optimistic about the long-term prospects for recreational boating. Dealer and consumer demand remain strong for the foreseeable future. We also are finding that consumer preferences are migrating towards larger boats. Our 2022 model year lineup was developed in response to that demand, and it is positively impacting our financial results. I am also pleased to report continued dominant market share in our two propulsion categories and size ranges,” concluded Hubbell.