MARINE PRODUCTS CORPORATION REPORTS RECORD 2003 THIRD QUARTER RESULTS |
•Net sales increased by 8.1 percent over prior year
•Earnings per share increased by 31.6 percent over prior year
ATLANTA, October 29, 2003 – Marine Products Corporation (AMEX: MPX) announced its unaudited results for the quarter and nine months ended September 30, 2003. Marine Products is a leading manufacturer of fiberglass boats under two brand names: sterndrive and inboard pleasure boats by Chaparral, including SSi Sportboats, Sunesta Deckboats, and Signature Cruisers, and sport fishing boats by Robalo.
For the quarter ended September 30, 2003, Marine Products generated net sales of $44,903,000, the highest third quarter net sales in its history, and an 8.1 percent increase compared to $41,551,000 last year. The increase in net sales was due to a 6.6 percent increase in the average selling price per boat and parts and accessories sales, and a 1.5 percent increase in the number of boats sold. The increase in average selling prices was due to a favorable model mix and price increases implemented in the new model year. Gross profit for the quarter was $11,503,000, an 18.6 percent increase over the same period in 2002. Gross profit as a percentage of sales was 25.6 percent, an increase of 2.3 percentage points compared to the third quarter of 2002. The improvement in gross profit as a percentage of net sales was due to higher unit sales volumes of larger boats during the period and the effect of price increases.
Operating income for the quarter was $6,566,000, a 26.0 percent increase compared to the third quarter last year. This increase over the prior year was due to higher gross profit, partially offset by higher selling, general and administrative expenses during the period. The increases in selling, general and administrative expenses include warranty expense, which has increased during the past year and varies with net sales, as well as advertising and sales commission expenses.
Net income for the quarter ended September 30, 2003 was $4,459,000, a 33.5 percent increase compared to $3,340,000 in the prior year. Net income increased due to higher operating income and a lower effective income tax rate. The effective tax rate was 32.9 percent for the quarter due to the effect of reducing the estimated effective tax rate for the full year during the third quarter from 36 percent to 35 percent. This compares to an effective tax rate of 38 percent in the prior year. The effective rate change increased net income by $342,000 or $0.02 per diluted share. Diluted earnings per share for the quarter were $0.25, a 31.6 percent increase compared to $0.19 diluted earnings per share in the prior year. During the quarter, the Company repurchased 6,200 shares of its common stock for cash on the open market under its stock buyback program.
Net sales for the nine months ended September 30, 2003 were $146,961,000, a 15.7 percent increase from the first nine months of fiscal 2002. Net income for the nine-month period increased 44.2 percent to $13,614,000 or $0.76 diluted earnings per share compared to $9,438,000 or $0.53 diluted earnings per share last year.
Richard A. Hubbell, Marine Products’ Chief Executive Officer stated, “The third quarter of 2003 was another record quarter for Marine Products Corporation, continuing the strong performance of the first half of this year. Our annual Chaparral and Robalo dealer conferences were held in August and September, and the response from our dealers was very positive. Key to driving growth in this business is a continual stream of updated products with different styling and options. To this end, we introduced five new Chaparral models for our 2004 model year and two new Robalo models."
Hubbell continued, "Our average unit sales price rose during the quarter, partially due to higher unit sales of larger boats in our Robalo product line. We also implemented two percent price increases for our 2004 model year to cover increased costs. In addition, we sold more Sunesta Deckboats and Signature Cruisers in the third quarter of 2003 than in 2002; these models carry higher overall average sales prices compared to the higher volume SSi Sportboat models. Robalo accounted for seven percent of net sales this quarter. The model line at Robalo currently totals eight models, with two additional models in development for later in this model year, and this more complete product offering will help us to improve and expand the Robalo dealer network.
"We attribute some of our continued success to favorable financing terms for boat purchasers, making it easier for consumers to purchase larger boats and upgraded models. While Marine Products is not involved in financing consumer boat purchases, we benefit from a low-interest rate environment as the number and size of boats sold increases. We also attribute some of our success to a post September 11 effect that has resulted in boating consumers spending their leisure time and money closer to home, in a controlled environment, avoiding air travel and large population centers.
"Chaparral's dealer inventory levels are lower than last year, due to strong retail sales through our dealer network. We are pleased with the demand for our 2004 models, which debuted at our dealer conference in August. We feel confident that this year's product offerings will help us to continue the expansion of Chaparral's market share in the sterndrive 18-35 foot category, which reached 8.35 percent for the first half of 2003. We are also pleased to report a continued strong financial position, which we intend to use to take advantage of future growth opportunities."
Marine Products Corporation (AMEX: MPX) designs, manufactures and distributes premium-branded Chaparral sterndrive and inboard pleasure boats and Robalo sport fishing boats, and continues to diversify its product line through product innovation and strategic acquisition. 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 www.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 regarding our ability to take advantage of market opportunities, sustain our market share, build long-term shareholder value, and improve and expand the Robalo dealer network. These statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Marine Products Corporation to be materially different from any future results, performance or achievements expressed or implied in such forward-looking statements. These risks include possible decreases in the level of consumer confidence impacting discretionary spending, increased interest rates, changes in consumer preferences, deterioration in the quality of Marine Products' network of independent boat dealers or availability of financing of their inventory, and competition from other boat dealers. 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' Form 10-K, filed with the Securities and Exchange Commission for the year ending December 31, 2002.
For information contact:
BEN M. PALMER, CFO, irdept@marineproductscorp.com |
Oct 29, 2003 |
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