ATLANTA, Jan. 25,
2024 /PRNewswire/ -- Marine Products Corporation
(NYSE: MPX) ("the Company"), a leading manufacturer of fiberglass
boats, announced its unaudited results for the fourth quarter and
full year ended December 31,
2023.
* Non-GAAP
measures, including EBITDA, EBITDA margin, and free cash flow
are reconciled to the most comparable GAAP measures in the
appendices of this earnings release. * All
comparisons are year-over-year (versus 4Q:22) unless stated
otherwise.
|
Fourth Quarter 2023 Highlights
- Net sales decreased 35% year-over-year to $70.9 million
- Net income was $5.4 million, down
54% year-over-year, and diluted earnings per share (EPS) was
$0.16; net income margin decreased
320 basis points year-over-year to 7.7%
- EBITDA was $6.5 million, down 58%
year-over-year; EBITDA margin decreased 490 basis points
year-over-year to 9.2%
- Results reflected the normalization of retail demand following
a strong period of post-COVID sales; the Company has adjusted
production volumes and manufacturing costs to align with near-term
demand
Full Year 2023 Highlights
- Net sales increased 1% year-over-year to $383.7 million
- Net income was $41.7 million, up
3% year-over-year, and diluted EPS was $1.21; net income margin was 10.9%
- EBITDA was $51.6 million, down 4%
year-over-year, with EBITDA margin of 13.5%
- Net cash flow provided by operating activities was $56.8 million and free cash flow was $46.7 million
- The Company remains debt-free and paid $19.3 million in dividends in 2023
Management Commentary
"Our fourth quarter results reflect soft retail boat demand for
the second consecutive quarter as the industry has normalized from
elevated post-COVID demand," stated Ben M.
Palmer, Marine Products' President and Chief Executive
Officer. "While the boating market has added new retail customers
since 2020, the industry has recently been grappling with economic
uncertainty, rising interest rates and generally higher levels of
dealer inventory. Beginning in the third quarter of 2023, we
adjusted our production schedules, variable cost structure, and
retail incentive programs to align with reset volume expectations.
We are comfortable with the level of our product in field
inventories and excited about our new 2024 product launches, but we
are prepared for near-term industry softness and overall channel
de-stocking. In this environment, we will focus on product
innovation, maximize our dealer relationships, and aggressively
manage costs. We look forward to the winter boat shows in the next
few weeks as an opportunity to showcase our newest products and
gauge retail demand ahead of the 2024 retail selling season.
"We generated strong cash flow in 2023, and our balance sheet
now boasts over $70 million in cash.
We will continue to pay an attractive dividend, while evaluating
potential acquisitions to increase our scale and options to return
additional capital to our shareholders," concluded Palmer.
4Q:23 Consolidated Financial Results: Year-Over-Year
Comparisons (versus 4Q:22)
Net sales were $70.9
million, down 35%. The decrease in net sales was primarily
due to a 34% decrease in the number of boats sold during the
quarter. A 4% increase in gross average selling price was offset by
higher retail incentives for a new program announced during the
quarter. The incentive program is effective for our boats sold
during the fourth quarter and in prior periods remaining in dealer
inventory. The company believes net sales have also been impacted
by a normalization of high post-COVID demand and higher interest
rates. Higher rates impact financing costs for consumers, as well
as inventory carrying costs for dealers. Management also believes
that while boat production and sales have stabilized,
year-over-year comparisons will likely remain soft in the near
term.
Gross profit was $13.5
million, down 51%. Gross margin was 19.0%, down 620 basis
points. Gross margin reflected lower sales volumes and associated
manufacturing cost inefficiencies, coupled with the impact of
higher retail incentives. The retail incentive program resulted in
a pronounced impact to gross margin in the fourth quarter, given
the terms of the program as described above. Production schedules
and labor costs have been adjusted to align more with current
demand.
Selling, general and administrative
expenses were $7.7
million, down 38%, and represented 10.9% of net sales, down
60 basis points. The decrease in SG&A expenses was due to costs
that vary with sales and profitability, such as incentive
compensation, sales commissions and warranty expense.
Interest income of $794 thousand increased due to higher cash
balances and interest rates.
Income tax provision was $1.2 million, or 18.0% of income before income
taxes.
Net income and diluted EPS were $5.4 million and $0.16, respectively, down from $11.9 million and $0.35, respectively, in 4Q:22. Net income margin
was 7.7%, down 320 basis points.
EBITDA (earnings before interest, taxes,
depreciation and amortization) was $6.5
million, down from $15.3
million; EBITDA margin was 9.2%, down 490 basis points.
Balance Sheet, Cash Flow and Capital Allocation
Cash and cash equivalents were $72.0 million at the end of 4Q:23, with no
outstanding borrowings under the Company's $20 million revolving credit facility.
Net cash provided by operating activities and free cash
flow were $56.8 million and
$46.7 million, respectively, for the
full year 2023.
Payment of dividends in 2023 totaled
$19.3 million. The Board of Directors
declared a regular quarterly cash dividend of $0.14 per share, payable March 11, 2024, to common stockholders of record
at the close of business on February 9,
2024.
Conference Call Information
Marine Products Corporation will hold a conference call today,
January 25, 2024, at 8:00 a.m. Eastern Time to discuss the results for
the quarter. Interested parties may listen in by accessing a live
webcast in the investor relations section of Marine Products'
website at marineproductscorp.com. Additionally, the live
conference call can be accessed by calling (888) 660-6357, or (929)
201-6127 for international callers, and using conference ID number
9979064. A replay will be available in the investor relations
section of Marine Products' website beginning approximately two
hours after the call.
About Marine Products
Marine Products Corporation is a leading manufacturer of
high-quality fiberglass boats under the brand names Chaparral and
Robalo. Chaparral's sterndrive models include SSi Sportboats and
SSX Luxury Sportboats, and the SURF Series. Chaparral's outboard
offerings include OSX Luxury Sportboats and the SSi Outboard
Bowriders. Robalo builds an array of outboard sport fishing models,
which include Center Consoles, Dual Consoles and Cayman Bay Boats.
The Company continues to diversify its product lines through
product innovation. With these premium brands, a solid capital
structure, and a strong independent dealer network, Marine Products
Corporation is prepared to capitalize on opportunities to increase
its market share and generate superior financial performance to
build long-term shareholder value. For more information on Marine
Products Corporation visit our website at
marineproductscorp.com.
Forward Looking Statements
Certain statements and information included in this press
release constitute "forward-looking statements" within the meaning
of the Private Securities Litigation Reform Act of 1995. Such
forward-looking statements include statements that look forward in
time or express management's beliefs, expectations or hopes. In
particular, such statements include, without limitation: our belief
that adjustments to our production schedules, variable cost
structure, and retail incentive programs will align with future
volume levels; statements regarding our comfort with the level of
our product in field inventories, statements regarding excitement
about our new 2024 product launches, our expectation for near-term
industry softness and overall channel de-stocking; our belief that
the winter boat shows in the next few weeks will allow us to
showcase our newest products and gauge retail demand ahead of the
2024 retail selling season; and our expectation to continue paying
dividends to shareholders and to assess acquisitions. Risk factors
that could cause such future events not to occur as expected
include the following: supply chain disruptions may continue to
delay the receipt of both raw materials and key components used in
our manufacturing process, thus delaying production and deliveries
to our dealers; negative economic conditions, unavailability of
credit and possible decreases in the level of consumer confidence
impacting discretionary spending; business interruptions due to
adverse weather conditions, and increased interest rates.
Additional factors that could cause the actual results to differ
materially from management's projections, forecasts, estimates and
expectations are contained in Marine Products' Annual Report on
Form 10-K, filed with the U.S. Securities and Exchange Commission
(the "SEC") for the year ended December 31,
2022.
For information about Marine Products Corporation or this event,
please contact:
Michael L. Schmit
Chief Financial Officer
(404) 321-7910
irdept@marineproductscorp.com
Mark Chekanow, CFA
Vice President, Investor Relations
(404) 419-3809
mchekano@marineproductscorp.com
MARINE PRODUCTS
CORPORATION AND SUBSIDIARIES
CONSOLIDATED
STATEMENTS OF OPERATIONS (In thousands except per share
data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Years
Ended
|
Periods ended December
31,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
|
|
(Unaudited)
|
|
|
(Unaudited)
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
sales
|
|
$
|
70,871
|
|
$
|
108,509
|
|
$
|
383,729
|
|
$
|
380,995
|
Cost of goods
sold
|
|
|
57,408
|
|
|
81,189
|
|
|
293,350
|
|
|
287,278
|
Gross profit
|
|
|
13,463
|
|
|
27,320
|
|
|
90,379
|
|
|
93,717
|
Selling, general and
administrative expenses
|
|
|
7,718
|
|
|
12,472
|
|
|
43,213
|
|
|
41,921
|
Gain on disposition of
assets, net
|
|
|
(74)
|
|
|
—
|
|
|
(2,036)
|
|
|
—
|
Operating
income
|
|
|
5,819
|
|
|
14,848
|
|
|
49,202
|
|
|
51,796
|
Interest income,
net
|
|
|
794
|
|
|
286
|
|
|
2,860
|
|
|
338
|
Income before income
taxes
|
|
|
6,613
|
|
|
15,134
|
|
|
52,062
|
|
|
52,134
|
Income tax
provision
|
|
|
1,191
|
|
|
3,277
|
|
|
10,367
|
|
|
11,787
|
Net
income
|
|
$
|
5,422
|
|
$
|
11,857
|
|
$
|
41,695
|
|
$
|
40,347
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EARNINGS PER
SHARE
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.16
|
|
$
|
0.35
|
|
$
|
1.21
|
|
$
|
1.18
|
Diluted
|
|
$
|
0.16
|
|
$
|
0.35
|
|
$
|
1.21
|
|
$
|
1.18
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AVERAGE SHARES
OUTSTANDING
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
34,467
|
|
|
34,218
|
|
|
34,443
|
|
|
34,183
|
Diluted
|
|
|
34,467
|
|
|
34,218
|
|
|
34,443
|
|
|
34,183
|
MARINE PRODUCTS
CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE
SHEETS
|
|
|
|
|
|
|
|
|
|
(in thousands)
|
|
|
DECEMBER
31,
|
|
DECEMBER 31,
|
|
|
2023
|
|
2022
|
|
|
|
(Unaudited)
|
|
|
|
ASSETS
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
71,952
|
|
$
|
43,171
|
Accounts receivable,
net
|
|
|
2,475
|
|
|
5,340
|
Inventories
|
|
|
61,611
|
|
|
73,015
|
Income taxes
receivable
|
|
|
361
|
|
|
28
|
Prepaid expenses and
other current assets
|
|
|
2,847
|
|
|
3,444
|
Total current
assets
|
|
|
139,246
|
|
|
124,998
|
Property, plant and
equipment, net
|
|
|
22,456
|
|
|
14,965
|
Goodwill
|
|
|
3,308
|
|
|
3,308
|
Other intangibles,
net
|
|
|
465
|
|
|
465
|
Deferred income
taxes
|
|
|
8,590
|
|
|
6,027
|
Other assets
|
|
|
19,737
|
|
|
13,952
|
Total assets
|
|
$
|
193,802
|
|
$
|
163,715
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
6,071
|
|
$
|
8,250
|
Accrued expenses and
other liabilities
|
|
|
16,496
|
|
|
15,340
|
Total current
liabilities
|
|
|
22,567
|
|
|
23,590
|
Retirement plan
liabilities
|
|
|
17,998
|
|
|
14,440
|
Other long-term
liabilities
|
|
|
1,649
|
|
|
1,304
|
Total
liabilities
|
|
|
42,214
|
|
|
39,334
|
Common stock
|
|
|
3,447
|
|
|
3,422
|
Capital in excess of
par value
|
|
|
—
|
|
|
—
|
Retained
earnings
|
|
|
148,141
|
|
|
122,954
|
Accumulated other
comprehensive loss
|
|
|
—
|
|
|
(1,995)
|
Total stockholders'
equity
|
|
|
151,588
|
|
|
124,381
|
Total liabilities and
stockholders' equity
|
|
$
|
193,802
|
|
$
|
163,715
|
MARINE PRODUCTS
CORPORATION AND SUBSIDIARIES
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
|
|
|
|
|
|
|
|
(in thousands)
|
Years ended
December 31,
|
|
|
2023
|
|
|
2022
|
|
|
|
(Unaudited)
|
|
|
|
OPERATING
ACTIVITIES
|
|
|
|
|
|
|
Net
income
|
|
$
|
41,695
|
|
$
|
40,347
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
2,416
|
|
|
1,905
|
Pension settlement
loss
|
|
|
2,363
|
|
|
1,180
|
Working
capital
|
|
|
13,679
|
|
|
3,057
|
Other operating
activities
|
|
|
(3,307)
|
|
|
2,859
|
Net cash provided by
operating activities
|
|
|
56,846
|
|
|
49,348
|
|
|
|
|
|
|
|
INVESTING
ACTIVITIES
|
|
|
|
|
|
|
Capital
expenditures
|
|
|
(10,174)
|
|
|
(2,500)
|
Proceeds from sale of
assets
|
|
|
2,303
|
|
|
—
|
Net cash used for
investing activities
|
|
|
(7,871)
|
|
|
(2,500)
|
|
|
|
|
|
|
|
FINANCING
ACTIVITIES
|
|
|
|
|
|
|
Payment of
dividends
|
|
|
(19,284)
|
|
|
(17,077)
|
Cash paid for common
stock purchased and retired
|
|
|
(910)
|
|
|
(702)
|
Net cash used for
financing activities
|
|
|
(20,194)
|
|
|
(17,779)
|
|
|
|
|
|
|
|
Net increase in cash
and cash equivalents
|
|
|
28,781
|
|
|
29,069
|
Cash and cash
equivalents at beginning of period
|
|
|
43,171
|
|
|
14,102
|
Cash and cash
equivalents at end of period
|
|
$
|
71,952
|
|
$
|
43,171
|
Non-GAAP Measures
Marine Products Corporation has used the non-GAAP financial
measures of EBITDA, EBITDA margin, and free cash flow in today's
earnings release. These measures should not be considered in
isolation or as a substitute for performance or liquidity measures
prepared in accordance with GAAP. Management believes that
presenting these non-GAAP measures enables investors to compare our
operating performance consistently over various time periods, and
in the case of EBITDA, without regard to changes in our capital
structure.
A non-GAAP financial measure is a numerical measure of financial
performance, financial position, or cash flows that either 1)
excludes amounts, or is subject to adjustments that have the effect
of excluding amounts, that are included in the most directly
comparable measure calculated and presented in accordance with GAAP
in the statement of operations, balance sheet or statement of cash
flows, or 2) includes amounts, or is subject to adjustments that
have the effect of including amounts, that are excluded from the
most directly comparable measure so calculated and presented.
Set forth in the appendices below are reconciliations of these
non-GAAP measures with their most directly comparable GAAP
measures. These reconciliations also appear on Marine
Products Corporation's investor website, which can be found on the
Internet at marineproductscorp.com.
Appendix
A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Unaudited)
|
|
|
|
|
Periods ended
December 31,
|
|
Three Months
Ended
|
|
Years
Ended
|
(In
thousands)
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Reconciliation of
Net Income to EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
5,422
|
|
$
|
11,857
|
|
$
|
41,695
|
|
$
|
40,347
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Add: Income tax
provision
|
|
|
1,191
|
|
|
3,277
|
|
|
10,367
|
|
|
11,787
|
Add: Depreciation and
amortization
|
|
|
666
|
|
|
489
|
|
|
2,416
|
|
|
1,905
|
Less: Interest income,
net
|
|
|
794
|
|
|
286
|
|
|
2,860
|
|
|
338
|
EBITDA
|
|
$
|
6,485
|
|
$
|
15,337
|
|
$
|
51,618
|
|
$
|
53,701
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
margin
|
|
|
7.7 %
|
|
|
10.9 %
|
|
|
10.9 %
|
|
|
10.6 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
margin
|
|
|
9.2 %
|
|
|
14.1 %
|
|
|
13.5 %
|
|
|
14.1 %
|
Appendix
B
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Unaudited)
|
|
|
|
|
Years
Ended
|
(In
thousands)
|
|
2023
|
|
2022
|
Reconciliation of
Operating Cash Flow to Free Cash Flow
|
|
|
|
|
|
|
Net cash provided by
operating activities
|
|
$
|
56,846
|
|
$
|
49,348
|
Capital
expenditures
|
|
|
(10,174)
|
|
|
(2,500)
|
Free cash
flow
|
|
$
|
46,672
|
|
$
|
46,848
|
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SOURCE Marine Products Corporation