Marine Products Corporation (NYSE: MPX) has announced its unaudited results for the quarter ended March 31, 2023. Marine Products is a manufacturer of fiberglass boats under the brand names of Chaparral and Robalo. Chaparral's sterndrive models include SSi and SSX, along with the Chaparral Surf Series. Chaparral's outboard offerings include OSX Luxury Sportboats and SSi outboard models. Robalo builds an array of outboard sport fishing boats, which include center consoles, dual consoles and Cayman Bay Boat models.
For the quarter ended March 31, 2023, Marine Products generated record quarterly net sales of $118.9 million, a 55 percent increase compared to $76.6 million in the same quarter of the prior year. The increase in net sales was due to a 40 percent increase in the number of boats sold during the quarter and a 12 percent increase in the average selling price per boat, as well as an increase in parts and accessories sales. Unit sales increased during the quarter as we continued to clear inventory of partially completed units and increased production to satisfy dealer and retail demand. Average selling prices increased primarily due to a favorable model mix among most of our models. Unit sales increased overall within both our Chaparral and Robalo brands.
Gross profit for the first quarter of 2023 was $29.0 million compared to $18.4 million in the first quarter of the prior year. Gross margin as a percentage of net sales was 24 percent in the first quarter of both years. Operating profit for the first quarter of 2023, including the pension settlement charge, was $14.5 million, an increase of 58 percent compared to operating profit of $9.2 million in the first quarter of last year. Selling, general and administrative expenses were $14.5 million in the first quarter of 2023 compared to $9.2 million in the first quarter of 2022. The first quarter 2023 selling, general and administrative expenses also include a non-cash pension settlement charge of $2.1 million. Selling, general and administrative expenses increased due to the pension settlement charge as well as costs that vary with sales and profitability, such as incentive compensation, sales commissions and warranty expense. Selling, general and administrative expenses were 12 percent of net sales in the first quarter of both years. Net income for the first quarter of 2023 was $11.5 million, an increase of 64 percent compared to net income of $7.1 million in the first quarter of 2022. Earnings before interest, taxes, depreciation and amortization (EBITDA)1 for the first quarter of 2023 was $15.0 million, an increase of $5.4 million or 56 percent, compared to the first quarter of 2022.
Diluted earnings per share in the first quarter of 2023 were $0.34, an increase of 62 percent compared to $0.21 in the first quarter of the prior year. The effective tax rate was 23 percent in the first quarters of both 2023 and 2022.
"We increased production during the first quarter as we supported our dealers' needs for inventory as the 2023 retail selling season began and our manufacturing efficiencies continued to improve," stated Ben M. Palmer, Marine Products' President and Chief Executive Officer. "The outcome of the winter boat shows was generally favorable, and our dealers continue to request both retail sold units as well as inventory to meet their projected demand. Dealer inventories are beginning to increase toward more normalized levels though they remain lower than pre-pandemic inventory levels. Though we are optimistic about near-term demand, we continue to monitor indications of negative consumer sentiment arising from higher interest rates or an economic slowdown.
"Our logistical issues and availability of materials and components continue to improve, although we are still experiencing sporadic shortages of certain manufactured components. These improvements allowed us to ship more units than we produced and are reflected in our high unit sales, lower inventory balances, and our strong cash balance at the end of the first quarter," concluded Palmer.