ATLANTA, July 27, 2022 /PRNewswire/ -- Marine Products Corporation (NYSE: MPX) announced its unaudited results for the quarter ended June 30, 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 and SSX 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 June 30, 2022, Marine Products generated net sales of $95.8 million, a 42 percent increase compared to $67.3 million in the same period of the prior year. The increase in net sales was primarily due to a 22 percent increase in the average selling price per boat and a 15 percent increase in the number of boats sold. The increase in units sold during the second quarter as compared to the prior year was primarily due to higher production and increased shipments of boats in the current year compared to the second quarter of the prior year. The results in the second quarter of the prior year were also negatively impacted by a brief production shutdown due to supply chain issues. Average selling prices increased primarily due to model price increases to cover increased costs of materials and components and a favorable model mix.
Gross profit for the second quarter of 2022 was $23.0 million compared to $14.6 million in the second quarter of the prior year. Gross margin as a percentage of net sales increased to 24 percent in the second quarter of 2022 compared to 22 percent in the second quarter of 2021. Gross margin as a percentage of net sales improved due primarily to a favorable model mix.
Operating profit for the second quarter of 2022 was $13.1 million, an increase of 77 percent compared to operating profit of $7.4 million in the second quarter of last year. Selling, general and administrative expenses were $9.9 million in the second quarter of 2022 compared to $7.2 million in the second quarter of 2021. These expenses increased due to costs that increase with higher sales and profitability, such as incentive compensation, sales commissions and warranty expenses. Selling, general and administrative expenses were 10 percent of net sales in the second quarter of 2022 compared to 11 percent of net sales during the second quarter of 2021. Net income for the second quarter of 2022 was $10.0 million, an increase of 72 percent compared to net income of $5.8 million in the second quarter of 2021. Earnings before interest, taxes, depreciation and amortization (EBITDA) for the second quarter of 2022 was $13.6 million, an increase of $5.8 million or 74 percent, compared to the second quarter of 2021.1
Diluted earnings per share in the second quarter of 2022 were $0.29, an increase of 71 percent compared to $0.17 in the second quarter of the prior year. The effective tax rate for the second quarter of 2022 was 24.0 percent, an increase compared to an effective tax rate of 21.4 percent for the second quarter of the prior year.
Net sales for the six months ended June 30, 2022 were $172.4 million, an increase of 18 percent compared to the first six months of 2021. Net income for the six-month period was $17.0 million or $0.50 diluted earnings per share, compared to net income of $13.9 million or $0.41 diluted earnings per share in the comparable prior year period.
"Our manufacturing facility operated throughout the second quarter of 2022 as we worked to satisfy continued high dealer and consumer demand during the height of the retail selling season," stated Ben M. Palmer, Marine Products' President and Chief Executive Officer. "We continue to work toward more timely receipts of short components from our suppliers and overcome boat delivery transportation challenges. Although some of our supply chain issues have improved, we are still being impacted by sporadic and unexpected shortages of critical components. These delays continue to impact our ability to meet demand and lead to higher-than-normal inventory levels of substantially completed boats that could not be shipped to dealers.
"We are closely monitoring retail demand indications as consumers assess rising interest rates and the near-term prospect of a recession. We will conduct an in-person dealer conference during the third quarter and we are eager to hear our dealers' assessments of demand in their markets as well as display our models for the 2023 model year. Our dealer inventories remain at historic lows and consumer demand continues to exceed our industry's capacity to meet that demand. For these reasons, we believe any slowdown in consumer demand will not impact our near-term results; therefore, we continue to focus on maximizing unit production and quality," concluded Palmer.
Marine Products Corporation will hold a conference call today, July 27, 2022, 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 to generate superior financial performance to build 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 that (i) we continue to work to receive more timely receipts of short components from our suppliers and overcome boat delivery transportation challenges, (ii) although some of our supply chain issues have improved but, we are still being impacted by sporadic and unexpected shortages of critical components, (iii) such delays continue to impact our ability to meet demand and lead to higher-than-normal inventory levels of substantially completed boats that could not be shipped to dealers, (iv) we are closely monitoring retail demand indications as consumers assess rising interest rates and the near-term prospect of a recession, (v) we will conduct an in-person dealer conference during the third quarter and we are eager to hear our dealers' assessments of demand in their markets as well as display our models for the 2023 model year, and (vi) dealer inventories remain at historic lows and consumer demand continues to exceed our industry's capacity to meet that demand, and (vii) we believe any slowdown in consumer demand will not impact our near-term results; therefore, we continue to focus on maximizing unit production and quality. 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
Vice President Corporate Services
MARINE PRODUCTS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands except per share data)
Period ended June 30, (Unaudited)
Cost of goods sold
Selling, general and administrative expenses
Interest (expense) income
Income before income taxes
Income tax provision
EARNINGS PER SHARE
AVERAGE SHARES OUTSTANDING
MARINE PRODUCTS CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
Cash and cash equivalents
Accounts receivable, net
Income taxes receivable
Prepaid expenses and other current assets
Total current assets
Property, plant and equipment, net
Other intangibles, net
Deferred income taxes
LIABILITIES AND STOCKHOLDERS' EQUITY
Accrued expenses and other liabilities
Total current liabilities
Pension liabilities and retirement plans
Other long-term liabilities
Capital in excess of par value
Accumulated other comprehensive loss
Total stockholders' equity
Total liabilities and stockholders' equity
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.
Periods ended June 30,
Three Months Ended
Six Months Ended
Reconciliation of Net Income to EBITDA
Income tax provision
Depreciation and amortization
Interest (expense) income
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.
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SOURCE Marine Products Corporation