Marine Products Corporation Reports Third Quarter Results |
•Net sales for the quarter increased 40.6 percent over prior year
•Diluted Earnings per share for the quarter were $0.23, an increase of 35.3 percent over prior year
ATLANTA, October 27, 2004 – Marine Products Corporation (AMEX: MPX) announced its unaudited results for the quarter ended September 30, 2004. 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 outboard sport fishing boats by Robalo.
For the quarter ended September 30, 2004, Marine Products generated net sales of $63,129,000, a 40.6 percent increase compared to $44,903,000 last year. The increase in net sales was due to a 30.1 percent increase in the number of boats sold, a 7.9 percent increase in the average sales price per boat, and an increase in parts and accessories sales. All four boat lines experienced increased unit sales and higher average sales prices. The increase in unit sales was highlighted by increased sales of Robalo sport fishing boats and SSi Sportboats. The increase in average sales prices was due to higher sales of larger SSi Sportboats, and a favorable model mix at Robalo. Gross profit for the quarter was $17,117,000, or 27.1 percent of net sales, compared to $11,503,000, or 25.6 percent of net sales, in the prior year. The increase in gross profit as a percentage of net sales was due primarily to higher average sales prices and production efficiencies realized at higher production volumes.
Operating income for the quarter was $9,642,000, a 46.8 percent increase compared to the third quarter last year due to higher gross profit, partially offset by higher selling, general and administrative expenses. Operating income was 15.3 percent of net sales for the quarter compared to 14.6 percent of net sales in the prior year. Selling, general and administrative expenses increased primarily due to costs that vary with sales and profitability, such as sales commissions, other incentive compensation and warranty expense, but also included increased costs associated with public company compliance. As a percentage of net sales, selling, general and administrative expenses increased to 11.8 percent in the third quarter compared to 11.0 percent last year.
Net income for the quarter ended September 30, 2004 was $6,244,000, a 40.0 percent increase compared to $4,459,000 in the prior year. Net income increased due to higher operating income, partially offset by a higher effective tax rate compared to the prior year. The effective income tax rate during the third quarter was 36.2 percent compared to an effective tax rate of 32.9 percent in the prior year. The income tax provision in the third quarter of 2003 included an adjustment to reduce the estimated effective tax rate from 36 percent to 35 percent. The effective tax rate change increased 2003 third quarter net income by approximately $140,000, or $0.01 per diluted share. Diluted earnings per share for the quarter were $0.23, a 35.3 percent increase compared to $0.17 diluted earnings per share in the prior year.
Net sales for the nine months ended September 30, 2004 were $189,734,000, a 29.1 percent increase from the first nine months of 2003. Net income for the nine-month period increased 34.3 percent to $18,286,000 or $0.67 diluted earnings per share compared to $13,614,000 or $0.51 diluted earnings per share in the prior year.
Richard A. Hubbell, Marine Products’ Chief Executive Officer stated, “The third quarter results of 2004 continue to reflect our strong performance that began over two years ago. All of our lines sold well this quarter, and our overall model mix improved average sales prices as well. Dealer inventory has increased over historically low levels of one year ago. However, our order backlog at the end of the quarter is higher than at the same time last year, indicating continued strong demand from our dealers. We recently held our dealer conferences for Chaparral and Robalo, and the indications from these meetings are that dealer orders will continue to be strong during the fourth quarter and into the winter boat show season.
Hubbell continued, "The end of the third quarter was marked by several severe hurricanes in Florida, which is a large boating market and an important market for Marine Products Corporation. We are pleased to report that our financial results for the quarter were not negatively impacted by these storms, due to our backlog of orders from dealers in the other markets we serve. Furthermore, all of our dealers in the areas impacted by these storms have resumed normal operations. Shipments to our Florida dealers that were delayed by the hurricanes in September were made early in the fourth quarter."
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 our website at 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, increase our market share, and build long-term shareholder value, and our belief that dealer orders will continue to be strong in the fourth quarter of this year and into the winter boat show season. 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, business interruptions due to adverse weather conditions, 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 manufacturers and 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, 2003.
Marine Products Corporation will host a conference call to review the Company's financial and operating results on Wednesday, October 27, 2004 at 9 a.m. Eastern Time. Individuals wishing to participate in the conference call should call (866) 864-9123 or (706) 679-5285 for international callers. For interested individuals unable to join the call, a replay will be available until midnight on November 3, 2004 by dialing (800) 642-1687 or (706) 645-9291, conference ID 1365355. This call also will be broadcast and archived on the company's investor Web site at http://www.marineproductscorp.com. Interested parties are encouraged to click on the webcast link 10-15 minutes prior to the start of the conference call.
For information about Marine Products Corporation, please contact:
BEN M. PALMER
Chief Financial Officer
404.321.7910
irdept@marineproductscorp.com
JIM LANDERS
Corporate Finance
404.321.2162
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Oct 27, 2004 |
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