Marine Products Corporation Reports Record Fourth Quarter and Full Year 2022 Financial Results

Rhea-AI Summary

Marine Products Corporation (NYSE: MPX) reported record net sales of $108.5 million for Q4 2022, a 42% increase from $76.5 million in Q4 2021. This growth was driven by a 29% rise in unit sales and a 12% increase in average selling price per boat. Q4 gross profit reached $27.3 million with a gross margin of 25%. Net income also hit a record $11.9 million, up 40% year-over-year. For the full year, net sales totaled $381.0 million, representing a 28% increase. The company noted improvements in supply chain issues, enhancing dealer demand for new models in 2023.

Positive

• Record quarterly net sales of $108.5 million for Q4 2022, a 42% increase year-over-year.
• Record net income of $11.9 million for Q4 2022, a 40% increase compared to Q4 2021.
• Full-year net sales reached $381.0 million, an increase of 28% over 2021.
• Improved supply chain allowing for increased boat shipments.
• High production schedule maintained for 2023 based on positive early boat show indications.

Negative

• Selling, general, and administrative expenses rose to $12.5 million in Q4 2022, impacting net income.
• The company recorded a $1.2 million pension settlement charge.

ATLANTA, Jan. 25, 2023 /PRNewswire/ -- Marine Products Corporation (NYSE: MPX) announced its unaudited results for the quarter and year ended December 31, 2022.  Marine Products is a leading 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 December 31, 2022, Marine Products generated record quarterly net sales of $108.5 million, a 42 percent increase compared to $76.5 million in the same quarter of the prior year.  The increase in net sales was due to a 29 percent increase in the number of boats sold during the quarter and a 12 percent increase in the average selling price per boat. Unit sales increased during the quarter primarily due to our success during the quarter in finishing and shipping substantially completed boats from inventory, as supply chain issues continued to improve. Average selling prices increased primarily due to a favorable model mix and price increases to cover increased costs including primarily materials and components. Unit sales increased within all of Chaparral's models as well as many Robalo models.

Gross profit for the fourth quarter of 2022 was $27.3 million compared to $19.2 million in the fourth quarter of the prior year. Gross margin as a percentage of net sales was 25 percent in the fourth quarter of both years. Operating profit for the fourth quarter of 2022 was $14.8 million, an increase of 39 percent compared to operating profit of $10.7 million in the fourth quarter of last year.  Selling, general and administrative expenses were $12.5 million in the fourth quarter of 2022 compared to $8.5 million in the fourth quarter of 2021. These expenses increased due to costs that vary with sales and profitability, such as incentive compensation, sales commissions and warranty expenses. In addition, the Company recorded a $1.2 million pension settlement charge associated with its defined benefit pension plan. Selling, general and administrative expenses were 12 percent of net sales in the fourth quarter of 2022 compared to 11 percent of net sales in the prior year. Net income for the fourth quarter of 2022 was a record $11.9 million, an increase of 40 percent compared to net income of $8.4 million in the fourth quarter of 2021. Earnings before interest, taxes, depreciation and amortization (EBITDA)¹ for the fourth quarter of 2022 was $15.3 million, an increase of $4.2 million or 38 percent, compared to the fourth quarter of 2021.

Diluted earnings per share in the fourth quarter of 2022 were $0.35, an increase of 40 percent compared to $0.25 in the fourth quarter of the prior year. The effective tax rate for the fourth quarter of 2022 was 22 percent, a slight increase compared to an effective tax rate of 21 percent for the fourth quarter of the prior year.

Net sales for the twelve months ended December 31, 2022 were a record $381.0 million, an increase of 28 percent compared to the twelve months ended December 31, 2021.  Net income during 2022 was a record $40.3 million or $1.18 diluted earnings per share, compared to net income of $29.0 million or $0.85 diluted earnings per share in 2021.  EBITDA¹ for 2022 was $53.7 million compared to $38.2 million in 2021.

"During the fourth quarter our supply chain and transportation issues continued to improve, allowing us to increase boat shipments to satisfy dealer demand for new 2023 models," stated Ben M. Palmer, Marine Products' President and Chief Executive Officer. "In fact, our fourth quarter 2022 shipments were the highest of any quarter in 2022 in spite of the seasonal impact of two holidays. In addition to higher unit sales, these positive developments lowered our working capital requirements, which are reflected in lower inventories and a higher cash balance than at the end of the third quarter. While production and transportation challenges continue, we are pleased with the improvement. At the end of the quarter, field inventories began to increase to support our dealers during the upcoming 2023 winter boat show season.

"Indications of attendance and orders from the early boat shows are positive, so we are maintaining a high production schedule and have allocated dealer deliveries through the first quarter. As the retail selling season gets underway, however, we will monitor market indications from the upcoming winter boat shows for any changes in customer demand caused by interest rate increases and economic uncertainty," concluded Palmer.  

Marine Products Corporation will hold a conference call today, January 25, 2023, 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. 

Marine Products Corporation (NYSE: MPX) designs, manufactures and distributes premium-branded Chaparral sterndrive and outboard pleasure boats, and Robalo outboard sport fishing boats. The Company continues to diversify its product lines through product innovation. With 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 continue building long-term shareholder value.  For more information on Marine Products Corporation visit our website at MarineProductsCorp.com.

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, the statements (i) regarding the unpredictability of our improved production and transportation issues, (ii) the consistency of indications of orders and demand from the early boat shows compared to the same period in 2022 and (iii) our monitoring of market indications from the upcoming winter boat shows for any changes in customer demand caused by interest rate increases and economic uncertainty. Additional discussion of factors that could cause the actual results to differ materially from management's projections, forecasts, estimates and expectations is 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, 2021.

For information about Marine Products Corporation or this event, please contact:

Michael L. Schmit
Chief Financial Officer
(404) 321-7910
irdept@marineproductscorp.com

Jim Landers
Vice President Corporate Services
(404) 321-2162
jlanders@marineproductscorp.com

Appendix A

Marine Products Corporation has used the non-GAAP financial measure of earnings before interest, taxes, depreciation and amortization (EBITDA) in today's earnings release, and anticipates using EBITDA in today's earnings conference call.  EBITDA should not be considered in isolation or as a substitute for operating income, net income or other performance measures prepared in accordance with GAAP. 

Marine Products Corporation uses EBITDA as a measure of operating performance because it allows us to compare performance consistently over various periods 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 below is a reconciliation of EBITDA with Net Income, the most comparable GAAP measure.  This reconciliation also appears on Marine Products Corporation's investor website, which can be found on the Internet at marineproductscorp.com.

¹ EBITDA is a financial measure which does not conform to GAAP. Additional disclosure regarding this non-GAAP financial measure and its reconciliation to net income, the nearest GAAP financial measure, is disclosed in Appendix A to this press release.

 

MARINE PRODUCTS CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE  SHEETS
		(in thousands)
		DECEMBER 31, 2022			DECEMBER 31, 2021
		(Unaudited)
ASSETS
Cash and cash equivalents	$	43,171		$	14,102
Accounts receivable, net		5,340			3,262
Inventories		73,015			73,261
Income taxes receivable		28			10
Prepaid expenses and other current assets		3,444			2,474
Total current assets		124,998			93,109
Property, plant and equipment, net		14,965			14,370
Goodwill		3,308			3,308
Other intangibles, net		465			465
Pension and retirement plans assets		9,881			13,302
Deferred income taxes		6,027			4,392
Other assets		4,071			3,895
Total assets	$	163,715		$	132,841
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable	$	8,250		$	6,771
Accrued expenses and other liabilities		15,340			11,298
Total current liabilities		23,590			18,069
Pension and retirement plans liabilities		14,440			15,564
Other long-term liabilities		1,304			683
Total liabilities		39,334			34,316
Common stock		3,422			3,399
Capital in excess of par value		-			-
Retained earnings		122,954			97,702
Accumulated other comprehensive loss		(1,995)			(2,576)
Total stockholders' equity		124,381			98,525
Total liabilities and stockholders' equity	$	163,715		$	132,841

 

MARINE PRODUCTS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS  (In thousands except per share data)
Period ended December 31, (Unaudited)		Fourth Quarter					Twelve Months
		2022			2021			2022			2021
Net sales	$	108,509		$	76,537		$	380,995		$	298,014
Cost of goods sold		81,189			57,379			287,278			229,742
Gross profit		27,320			19,158			93,717			68,272
Selling, general and administrative expenses		12,472			8,497			41,921			31,880
Operating profit		14,848			10,661			51,796			36,392
Interest income (expense)		286			(6)			338			16
Income before income taxes		15,134			10,655			52,134			36,408
Income tax provision		3,277			2,207			11,787			7,382
Net income	$	11,857		$	8,448		$	40,347		$	29,026
EARNINGS PER SHARE
Basic	$	0.35		$	0.25		$	1.18		$	0.85
Diluted	$	0.35		$	0.25		$	1.18		$	0.85
AVERAGE SHARES OUTSTANDING
Basic		34,218			33,992			34,183			33,984
Diluted		34,218			33,992			34,183			33,984

 

 

(Unaudited)
Periods ended December 31,		Three Months Ended						Twelve Months Ended
(In thousands)		2022			2021			2022			2021
Reconciliation of Net Income to EBITDA
Net Income	$	11,857		$	8,448		$	40,347		$	29,026
Add:
Income tax provision		3,277			2,207			11,787			7,382
Depreciation and amortization		489			471			1,905			1,816
Less:
Interest income (expense)		286			(6)			338			16
EBITDA	$	15,337		$	11,132		$	53,701		$	38,208

 

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SOURCE Marine Products Corporation

FAQ

What were Marine Products Corporation's Q4 2022 earnings results?

Marine Products Corporation reported record Q4 net sales of $108.5 million and net income of $11.9 million.

How did unit sales perform in Q4 2022 for MPX?

Unit sales increased by 29% in Q4 2022 compared to the same quarter in 2021.

What was the diluted earnings per share for MPX in Q4 2022?

Diluted earnings per share for Q4 2022 were $0.35, a 40% increase from $0.25 in Q4 2021.

What is the financial outlook for Marine Products Corporation in 2023?

The company is maintaining a high production schedule and is observing positive early indicators from winter boat shows.

How much did Marine Products Corporation's net sales grow in 2022?

Net sales for the twelve months ended December 31, 2022, grew to $381.0 million, a 28% increase from 2021.