Financial Performance - Consolidated net sales increased by 6.6% to $53.1 million for Q3 2025, primarily due to a price/mix increase of 7% despite a slight decrease in the number of boats sold [77]. - Gross profit for Q3 2025 rose to $10.2 million, up from $9.2 million in Q3 2024, while operating income decreased to $2.9 million from $3.6 million [77]. - Net income for Q3 2025 decreased to $2.7 million, down from $3.4 million in Q3 2024, resulting in diluted earnings per share of $0.07 compared to $0.10 [94]. - Total number of boats sold in Q3 2025 was 494, slightly down from 500 in Q3 2024, with an average gross selling price per boat increasing to $97.0 from $91.0 [89]. - For the nine months ended September 30, 2025, net sales decreased by 4.7% to $179.8 million, primarily due to a 12% decrease in unit sales volume [97]. - EBITDA for Q3 2025 was $3.7 million, down from $4.3 million in Q3 2024, with an EBITDA margin of 6.9% compared to 8.6% [95]. - Net income decreased to $9.0 million for the nine months ended September 30, 2025, down from $13.6 million in the same period of 2024, resulting in diluted earnings per share of $0.25 compared to $0.37 [105]. - EBITDA was $12.7 million for the nine months ended September 30, 2025, compared to $16.7 million for the same period in 2024, with an EBITDA margin of 7.0% versus 8.8% [106]. Cash Flow and Expenses - Free cash flow for Q3 2025 decreased to $2.1 million from $3.2 million in Q3 2024, primarily due to lower net income and unfavorable working capital changes [96]. - Net cash provided by operating activities decreased by $13.1 million to $11.7 million for the nine months ended September 30, 2025, primarily due to lower net income and unfavorable working capital changes [107]. - Free cash flow decreased by $10.5 million to $10.8 million for the nine months ended September 30, 2025, compared to $21.3 million in the same period of 2024 [113]. - Cash and cash equivalents at September 30, 2025, were $47.4 million, down from $52.4 million at December 31, 2024 [114]. - Selling, general and administrative expenses for Q3 2025 increased by 30.5% to $7.4 million, largely due to new product R&D investments and warranty cost adjustments [91]. Capital Expenditures and Dividends - Capital expenditures for 2025 are expected to be approximately $1.0 to $1.5 million, with $968 thousand spent through September 30, 2025 [120]. - The Board of Directors declared a regular quarterly cash dividend of $0.14 per share payable on December 10, 2025 [123]. - The company expects to pay a net cash distribution of approximately $3 million related to the termination of the Supplemental Executive Retirement Plan in the fourth quarter of 2025 [122]. Market Conditions and Outlook - The company has observed that higher interest rates have reduced retail demand for smaller boats, impacting sales [138]. - The ongoing tariff developments could result in a resumption of inflationary pressures, impacting sales and profit margins [143]. - The company believes that sales comparisons to the prior year could begin to turn positive in the second half of 2025 [143]. - The second quarter historically records the highest sales volume for Marine Products due to peak retail sales periods [137]. Inventory and Production Management - The company plans to actively monitor dealer inventories and order patterns to adjust production levels accordingly [143]. - The company continues to focus on reducing costs and aligning production to a lower demand level [143]. - Input cost inflation was immaterial for 2024 and the nine months ended September 30, 2025, although many items remain elevated compared to historical levels [139]. Share Repurchase and Securities - The company has repurchased a total of 6,679,572 shares under its stock repurchase program, with 1,570,428 shares remaining available for repurchase [121]. - The company has a shelf registration statement permitting it to offer up to $150 million in various securities, expiring on May 5, 2028 [118]. - As of September 30, 2025, there were no outstanding interest-bearing advances on the company's credit facility [148]. - Marine Products does not hold derivative financial instruments that could expose the company to significant market risk [149].

Core Viewpoint - Marine Products Corporation reported a 7% increase in third-quarter sales compared to the previous year, indicating a recovery from prior inventory destocking and production lows experienced in the second quarter of 2024 [4]. Financial Performance - The third quarter sales growth marks the first year-over-year increase in over a year, suggesting a positive trend in the company's operational performance [4]. Inventory and Production - The company noted that the largest part of the destocking of channel inventory appears to be behind them, which is a significant factor contributing to the sales growth [4]. - Production levels have improved from the lows seen in the second quarter of 2024, further supporting the sales increase [4].

Financial Data and Key Metrics Changes - Third quarter sales increased by 7% year-over-year, marking the first quarter of growth in over two years [3][8] - Gross profit rose by 11% to $10.2 million, with a gross profit margin of 19.2%, up 80 basis points from the previous year [8] - SG&A expenses increased by 31% to $7.4 million, with SG&A as a percentage of sales rising to 13.9%, up 260 basis points [9] - Diluted EPS decreased to $0.07 from $0.10 in the prior year, while EBITDA fell by 15% to $3.7 million [9][10] - Year-to-date operating cash flow was $11.7 million, and free cash flow was $10.8 million [9] Business Line Data and Key Metrics Changes - The increase in sales was driven by a 7% net increase in price and mix, despite a slight decrease in the number of boats sold [7] - Field inventory was reduced by 6% year-over-year, indicating effective inventory management [4] Market Data and Key Metrics Changes - The marine industry is experiencing macro and geopolitical risks, but there is cautious optimism among industry players [3][5] - Interest rate cuts are anticipated to positively impact retail demand, although the effects may take time to materialize [5] Company Strategy and Development Direction - The company is focused on investing in new models and enhancing features within the Chaparral and Robalo brands [11] - Strategic growth opportunities and partnerships are being evaluated to enhance the company's portfolio [11] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, citing positive feedback from dealers and a year-over-year increase in sales [11] - The company is cautiously optimistic about the impact of potential interest rate cuts on retail demand [5] Other Important Information - The company plans to liquidate its terminated supplemental executive retirement plan, expecting a net cash distribution of approximately $3 million [10] - The company finished the third quarter with $47.4 million in cash and no debt [10] Q&A Session Summary - There were no questions during the Q&A session, indicating a lack of immediate inquiries from analysts or investors [12]

FORWARD LOOKING STATEMENTS NON-GAAP DISCLOSURE 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, hopes or strategies. In particular, such statements include, without limitation: that we are cautiously optimistic and that we've reached a turning point in t ...

Financial Performance - Net sales for Q3 2025 were $53.1 million, representing a 7% increase year-over-year, primarily driven by a price/mix increase of 7%[5] - Net income decreased by 22% year-over-year to $2.7 million, with diluted EPS at $0.07, and net income margin down 180 basis points to 5.0%[5][8] - EBITDA for Q3 2025 was $3.7 million, down 15% year-over-year, with an EBITDA margin of 6.9%, a decrease of 170 basis points from the previous year[5][8] - Gross profit increased by 11% to $10.2 million, with a gross margin of 19.2%, up 80 basis points compared to Q3 2024[6] - Selling, general and administrative expenses rose by 31% to $7.4 million, representing 13.9% of net sales, an increase of 260 basis points year-over-year[7] Cash Flow and Capital Expenditures - The company ended Q3 2025 with approximately $47.4 million in cash and no debt, with free cash flow of $10.8 million year-to-date[9] - The company expects full-year 2025 capital expenditures to be approximately $1.0 to $1.5 million[9] - Net cash provided by operating activities for the nine months ended September 30, 2025, was $11,742,000, a decline of 52.8% from $24,882,000 in 2024[26] - Free cash flow for the nine months ended September 30, 2025, was $10,774,000, a decrease of 49.5% compared to $21,308,000 in 2024[26] - Capital expenditures for the nine months ended September 30, 2025, were $968,000, significantly lower than $3,574,000 in 2024[19] Inventory and Product Development - Field unit inventory was approximately 6% below Q3 2024, reflecting improved inventory management[6] - The company launched the 2026 model year Chaparral and Robalo products, indicating ongoing product innovation[5] Dividend Information - The board declared a regular cash quarterly dividend of $0.14 per share, payable on December 10, 2025[10] - Payment of dividends for the nine months ended September 30, 2025, was $14,695,000, a decrease of 62.2% from $38,845,000 in 2024[19] Year-to-Date Performance - Net income for the nine months ended September 30, 2025, was $9,018,000, a decrease of 33.5% compared to $13,586,000 for the same period in 2024[19] - EBITDA for the nine months ended September 30, 2025, was $12,650,000, down 24.2% from $16,670,000 in 2024[23] - Net sales for the nine months ended September 30, 2025, were $179,848,000, down 4.5% from $188,737,000 in 2024[23] - Net income margin for the nine months ended September 30, 2025, was 5.0%, compared to 7.2% in 2024[23] - EBITDA margin for the nine months ended September 30, 2025, was 7.0%, down from 8.8% in 2024[23] - Cash and cash equivalents at the end of the period were $47,403,000, down from $53,533,000 at the end of the same period in 2024[19]

Core Insights - Marine Products Corporation reported a 7% increase in net sales for Q3 2025, reaching $53.1 million, primarily driven by a price/mix increase, despite a slight decrease in the number of boats sold [4][7][8] - The company expressed cautious optimism about the marine industry's recovery, noting that dealer inventory has adjusted to stabilizing demand and there is strong interest in larger boats and new model offerings for 2026 [3][4] - Economic uncertainty continues to affect the marine industry, but potential lower interest rates and clarity on tariffs are seen as positive factors for future performance [3][4] Financial Performance - Gross profit for Q3 2025 was $10.2 million, an 11% increase year-over-year, with a gross margin of 19.2%, up 80 basis points from the previous year [5][7] - Selling, general and administrative expenses rose by 31% to $7.4 million, representing 13.9% of net sales, largely due to increased R&D investments and warranty costs [6][7] - Net income decreased by 22% year-over-year to $2.7 million, with diluted EPS at $0.07, reflecting higher R&D investments and cost adjustments [7][8] Cash Flow and Balance Sheet - The company ended Q3 2025 with $47.4 million in cash and no debt, with net cash provided by operating activities at $11.7 million and free cash flow at $10.8 million year-to-date [9][10] - Year-to-date dividend payments totaled $14.7 million, and a quarterly dividend of $0.14 per share was declared [10] - Total assets increased to $179.5 million, with total liabilities at $53.2 million, indicating a solid capital structure [17]

Core Insights - Crude Value Insights provides an investment service and community focused on the oil and natural gas sector, emphasizing cash flow and the companies that generate it [1] - The service includes access to a 50+ stock model account, in-depth cash flow analyses of exploration and production (E&P) firms, and live chat discussions about the sector [1] Offerings - Subscribers can take advantage of a two-week free trial to explore the oil and gas investment opportunities [2]

Core Viewpoint - Marine Products Corporation will release its financial results for Q3 2025 on October 30, 2025, before market opens, and will host a conference call to discuss these results [1]. Group 1: Financial Results Announcement - The financial results for the third quarter ended September 30, 2025, will be announced on October 30, 2025 [1]. - A conference call to review the financial and operating results will take place on the same day at 8:00 a.m. Eastern Time [1]. Group 2: Conference Call Participation - Individuals can participate in the conference call by dialing toll-free (888) 660-6357 or +1 (929) 201-6127 for international callers, using conference ID number 9979064 [2]. - The call will also be broadcast and archived for 90 days on the Company's investor website for those unable to join by telephone [2]. Group 3: Company Overview - Marine Products Corporation is a leading manufacturer of high-quality fiberglass boats under the brands Chaparral and Robalo [3]. - Chaparral's product offerings include sterndrive models such as SSi Sportboats, SSX Luxury Sportboats, and the SURF Series, as well as outboard models like OSX Luxury Sportboats and SSi Outboard Bowriders [3]. - Robalo specializes in outboard sport fishing models, including Center Consoles, Dual Consoles, and Cayman Bay Boats [3].

[PART I. FINANCIAL INFORMATION](index=4&type=section&id=Part%20I.%20Financial%20Information) [ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)](index=4&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS%20(UNAUDITED)) This section presents Marine Products Corporation's unaudited consolidated financial statements and related notes [Consolidated Balance Sheets – As of June 30, 2025, and December 31, 2024](index=4&type=section&id=Consolidated%20Balance%20Sheets%20%E2%80%93%20As%20of%20June%2030%2C%202025%2C%20and%20December%2031%2C%202024) This statement provides a snapshot of the company's assets, liabilities, and equity at specific points in time, highlighting changes in financial position Consolidated Balance Sheet Highlights (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :------------ | :---------------- | | Cash and cash equivalents | $50,171 | $52,379 | | Total current assets | $131,136 | $109,994 | | Total assets | $173,245 | $171,247 | | Total current liabilities | $44,286 | $18,924 | | Total liabilities | $46,014 | $42,244 | | Total stockholders' equity | $127,231 | $129,003 | | Common stock outstanding (shares) | 34,996,050 | 34,707,304 | [Consolidated Statements of Operations – for the three and six months ended June 30, 2025 and 2024](index=5&type=section&id=Consolidated%20Statements%20of%20Operations%20%E2%80%93%20for%20the%20three%20and%20six%20months%20ended%20June%2030%2C%202025%20and%202024) This statement details the company's revenues, expenses, and net income over specific periods, reflecting operational performance Consolidated Statements of Operations Highlights (in thousands, except per share data) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net sales | $67,698 | $69,547 | $126,700 | $138,887 | | Gross profit | $12,909 | $13,174 | $23,862 | $27,158 | | Operating income | $4,811 | $5,750 | $7,424 | $10,992 | | Net income | $4,162 | $5,585 | $6,368 | $10,182 | | Basic EPS | $0.12 | $0.14 | $0.18 | $0.28 | | Diluted EPS | $0.12 | $0.14 | $0.18 | $0.28 | - Net sales decreased by **2.7%** for the three months ended June 30, 2025, and by **8.8%** for the six months ended June 30, 2025, compared to the prior year periods[9](index=9&type=chunk) - Net income saw a significant decline, decreasing by **25.4%** for the three-month period and **37.5%** for the six-month period year-over-year[9](index=9&type=chunk) [Consolidated Statements of Stockholders' Equity – for the three and six months ended June 30, 2025 and 2024](index=6&type=section&id=Consolidated%20Statements%20of%20Stockholders'%20Equity%20%E2%80%93%20for%20the%20three%20and%20six%20months%20ended%20June%2030%2C%202025%20and%202024) This statement outlines changes in the equity section of the balance sheet, including common stock, retained earnings, and other comprehensive income Consolidated Statements of Stockholders' Equity Highlights (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :------------ | :---------------- | | Common Stock | $3,499 | $3,471 | | Retained Earnings | $123,732 | $125,532 | | Total Stockholders' Equity | $127,231 | $129,003 | **Changes for Six Months Ended June 30, 2025:** * Stock issued for stock incentive plans, net: **$1,141 thousand** * Stock purchased and retired: **$(1,055) thousand** * Net income: **$6,368 thousand** * Cash dividends paid: **$(9,795) thousand** - Total stockholders' equity decreased from **$129,003 thousand** at December 31, 2024, to **$127,231 thousand** at June 30, 2025[11](index=11&type=chunk) [Consolidated Statements of Cash Flows – for the six months ended June 30, 2025 and 2024](index=7&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows%20%E2%80%93%20for%20the%20six%20months%20ended%20June%2030%2C%202025%20and%202024) This statement reports the cash generated and used by the company through its operating, investing, and financing activities Consolidated Statements of Cash Flows Highlights (in thousands) | Activity | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------------------- | :--------------------------- | :--------------------------- | | Net cash provided by operating activities | $9,165 | $19,737 | | Net cash used for investing activities | $(523) | $(1,661) | | Net cash used for financing activities | $(10,850) | $(34,897) | | Net decrease in cash and cash equivalents | $(2,208) | $(16,821) | | Cash and cash equivalents at end of period | $50,171 | $55,131 | - Net cash provided by operating activities decreased by **$10.6 million (53.6%)** year-over-year, primarily due to lower net income and unfavorable working capital changes[14](index=14&type=chunk)[100](index=100&type=chunk)[107](index=107&type=chunk) - Net cash used for financing activities significantly decreased due to a special dividend paid in the second quarter of 2024[14](index=14&type=chunk)[109](index=109&type=chunk) [Notes to Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) These notes provide detailed explanations of the accounting policies, significant judgments, and additional information supporting the financial statements - The unaudited interim financial statements are prepared in accordance with GAAP for interim information and Form 10-Q instructions, and operating results for the six months ended June 30, 2025, are not indicative of full-year results[16](index=16&type=chunk) - A group including directors Amy R. Kreisler and Timothy C. Rollins controls **over 50%** of the Company's voting power[19](index=19&type=chunk) - The Company is assessing the potential impact of ASU 2024-03 (Disaggregation of Income Statement Expenses), effective for 2027 annual reports[20](index=20&type=chunk) - Revenue is primarily generated from selling fiberglass motorized boats and accessories and parts to independent dealers, recognized upon transfer of title[21](index=21&type=chunk)[22](index=22&type=chunk) Net Sales Disaggregation (in thousands) | Category | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Boats and accessories | $66,216 | $68,166 | $123,890 | $136,629 | | Parts | $1,482 | $1,381 | $2,810 | $2,258 | | **Total Net Sales** | **$67,698** | **$69,547** | **$126,700** | **$138,887** | | Domestic Sales | $65,812 | $65,281 | $120,079 | $129,683 | | International Sales | $1,886 | $4,266 | $6,621 | $9,204 | - The effective tax rate for the six months ended June 30, 2025, increased to **23.7%** from **20.0%** in the prior year, primarily due to detrimental discrete adjustments[40](index=40&type=chunk) - The Company is evaluating the financial impact of the recently passed 'One Big Beautiful Bill Act' (OBBBA) on corporate taxation[41](index=41&type=chunk)[112](index=112&type=chunk) Inventory Composition (in thousands) | Category | June 30, 2025 | December 31, 2024 | | :----------------------- | :------------ | :---------------- | | Raw materials and supplies | $31,353 | $29,686 | | Work in process | $12,094 | $9,950 | | Finished goods | $7,738 | $10,324 | | **Total Inventories** | **$51,185** | **$49,960** | - The Supplemental Executive Retirement Plan (SERP) was **terminated in Q4 2024**, with participant balances expected to be distributed within the **next 12 months**, reclassifying related assets and liabilities to current[47](index=47&type=chunk)[115](index=115&type=chunk) - The Company has a **$20.0 million** revolving credit facility with Truist Bank, maturing **November 12, 2026**, with **no outstanding borrowings** as of June 30, 2025, and is in compliance with all covenants[53](index=53&type=chunk)[57](index=57&type=chunk)[58](index=58&type=chunk) - The aggregate maximum repurchase obligation under floor plan financing agreements with third-party lenders was **$39.8 million** as of June 30, 2025[63](index=63&type=chunk)[121](index=121&type=chunk) - A regular cash dividend of **$0.14 per share** was declared on July 22, 2025, payable September 10, 2025[68](index=68&type=chunk)[116](index=116&type=chunk) [ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=22&type=section&id=ITEM%202.%20MANAGEMENT'S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) Management discusses financial condition, operations, key performance indicators, market trends, strategic responses, and outlook [OVERVIEW](index=22&type=section&id=OVERVIEW) This section provides a high-level summary of the company's business, recent financial performance, and strategic focus - Marine Products Corporation manufactures recreational fiberglass powerboats (Chaparral and Robalo) sold through independent dealers in the US and internationally[71](index=71&type=chunk) - Consolidated net sales decreased **2.7%** in Q2 2025 year-over-year, driven by a **13% decrease in unit sales volume**, partially offset by a **10% price/mix increase**[74](index=74&type=chunk)[82](index=82&type=chunk) - Net income for Q2 2025 decreased to **$4.2 million ($0.12 diluted EPS)** from **$5.6 million ($0.14 diluted EPS)** in Q2 2024[74](index=74&type=chunk)[89](index=89&type=chunk) - The company is focusing on cost reduction and aligning production with lower demand levels amidst elevated interest rates and a more balanced market[74](index=74&type=chunk) [OUTLOOK](index=22&type=section&id=OUTLOOK) This section discusses the company's expectations for future performance, considering economic trends, market conditions, and strategic initiatives - Higher selling prices and rising interest rates have increased boat ownership costs, curbing consumer demand after several years of strong post-pandemic sales[75](index=75&type=chunk) - Production levels have been adjusted to align with expected demand, but dealers remain cautious about inventory levels[75](index=75&type=chunk) - Future financial results depend on economic trends, demand for discretionary products, interest rates, incentive programs, new model launches, and manufacturing cost management[76](index=76&type=chunk) - Further interest rate relief may be necessary to stimulate increased consumer demand for new boat purchases[76](index=76&type=chunk) [HOW WE EVALUATE OUR OPERATIONS](index=24&type=section&id=HOW%20WE%20EVALUATE%20OUR%20OPERATIONS) This section describes the key financial and non-GAAP metrics used by management to assess the company's operational performance and financial health - The Company evaluates operating performance using **Earnings per share** and non-GAAP financial measures: **Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA)**, **EBITDA margin**, and **free cash flow**[78](index=78&type=chunk) - **EBITDA** and **EBITDA margin** are used for consistent performance comparison across periods, while **free cash flow** assesses the ability to generate additional cash from operations[78](index=78&type=chunk) - **Non-GAAP measures** should be considered in addition to, not as substitutes for, **GAAP** financial performance and liquidity measures[79](index=79&type=chunk) [RESULTS OF OPERATIONS](index=24&type=section&id=RESULTS%20OF%20OPERATIONS) This section provides a detailed analysis of the company's financial performance, comparing current period results to prior periods Key Operating and Financial Statistics (in thousands, except per share and number of boats sold) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net sales | $67,698 | $69,547 | $126,700 | $138,887 | | Net income | $4,162 | $5,585 | $6,368 | $10,182 | | Net income margin | 6.1% | 8.0% | 5.0% | 7.3% | | Earnings per share | $0.12 | $0.14 | $0.18 | $0.28 | | Total number of boats sold | 641 | 737 | 1,266 | 1,507 | | Average gross selling price per boat | $94.1 | $85.7 | $89.7 | $83.0 | | EBITDA | $5,598 | $6,452 | $9,000 | $12,376 | | EBITDA margin | 8.3% | 9.3% | 7.1% | 8.9% | | Free cash flow | $(2,031) | $3,044 | $8,642 | $18,076 | [THREE MONTHS ENDED JUNE 30, 2025 COMPARED TO THREE MONTHS ENDED JUNE 30, 2024](index=24&type=section&id=THREE%20MONTHS%20ENDED%20JUNE%2030%2C%202025%20COMPARED%20TO%20THREE%20MONTHS%20ENDED%20JUNE%2030%2C%202024) This subsection analyzes the financial performance for the second quarter of 2025 compared to the same period in the prior year - Net sales decreased by **$1.8 million (2.7%)** due to a **13% decrease in unit sales volume**, partially offset by a **10% price/mix increase**[82](index=82&type=chunk) - Cost of goods sold decreased by **$1.6 million (2.8%)**, with COGS as a percentage of net sales improving slightly to **80.9%** from **81.1%** due to manufacturing cost efficiencies[85](index=85&type=chunk) - Selling, general and administrative expenses increased by **$674 thousand (9.1%)** to **$8.1 million**, primarily due to higher R&D investments and incentive compensation accruals[86](index=86&type=chunk) - Net income decreased to **$4.2 million ($0.12 diluted EPS)** from **$5.6 million ($0.14 diluted EPS)**, with net income margin declining to **6.1%** from **8.0%**[89](index=89&type=chunk) - Net cash (used for) provided by operating activities decreased by **$5.4 million** to **$(1.6) million**, driven by lower net income and unfavorable working capital changes[91](index=91&type=chunk) [SIX MONTHS ENDED JUNE 30, 2025 COMPARED TO SIX MONTHS ENDED JUNE 30, 2024](index=26&type=section&id=SIX%20MONTHS%20ENDED%20JUNE%2030%2C%202025%20COMPARED%20TO%20SIX%20MONTHS%20ENDED%20JUNE%2030%2C%202024) This subsection analyzes the financial performance for the first six months of 2025 compared to the same period in the prior year - Net sales decreased by **$12.2 million (8.8%)** due to a **16% decrease in unit sales volume**, partially offset by a **7% price/mix increase**[92](index=92&type=chunk) - Cost of goods sold decreased by **$8.9 million (8.0%)**, with COGS as a percentage of net sales increasing to **81.2%** from **80.4%**[93](index=93&type=chunk) - Selling, general and administrative expenses increased by **$272 thousand (1.7%)** to **$16.4 million**, primarily due to higher R&D investments and incentive compensation accruals[95](index=95&type=chunk) - Net income decreased to **$6.4 million ($0.18 diluted EPS)** from **$10.2 million ($0.28 diluted EPS)**, with net income margin declining to **5.0%** from **7.3%**[98](index=98&type=chunk) - Net cash provided by operating activities decreased by **$10.6 million** to **$9.2 million**, driven by lower net income and unfavorable working capital changes[100](index=100&type=chunk) [Non-GAAP Financial Measures](index=28&type=section&id=Non-GAAP%20Financial%20Measures) This section presents financial measures not prepared in accordance with GAAP, along with reconciliations to their most directly comparable GAAP measures - The Company provides reconciliations for **non-GAAP measures (EBITDA, EBITDA margin, free cash flow)** to their most directly comparable **GAAP measures**[101](index=101&type=chunk)[104](index=104&type=chunk) Reconciliation of Net Income to EBITDA (in thousands) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net income | $4,162 | $5,585 | $6,368 | $10,182 | | Add: Income tax provision | $1,125 | $1,044 | $1,974 | $2,540 | | Add: Depreciation and amortization | $787 | $702 | $1,576 | $1,384 | | Less: Interest income, net | $476 | $879 | $918 | $1,730 | | **EBITDA** | **$5,598** | **$6,452** | **$9,000** | **$12,376** | | EBITDA margin | 8.3% | 9.3% | 7.1% | 8.9% | Reconciliation of Operating Cash Flow to Free Cash Flow (in thousands) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :---------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net cash (used for) provided by operating activities | $(1,604) | $3,822 | $9,165 | $19,737 | | Capital expenditures | $(427) | $(778) | $(523) | $(1,661) | | **Free cash flow** | **$(2,031)** | **$3,044** | **$8,642** | **$18,076** | [LIQUIDITY AND CAPITAL RESOURCES](index=29&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) This section discusses the company's ability to generate and manage cash, its financial flexibility, and sources of funding - The Company believes its existing cash, strong capitalization, operating cash flow, and revolving credit facility will provide **sufficient capital for at least the next twelve months**[110](index=110&type=chunk) [Cash Flows](index=29&type=section&id=Cash%20Flows) This subsection analyzes the company's cash inflows and outflows from operating, investing, and financing activities - Cash and cash equivalents decreased from **$52.4 million** at December 31, 2024, to **$50.2 million** at June 30, 2025[107](index=107&type=chunk) - Net cash provided by operating activities for the six months ended June 30, 2025, decreased by **$10.6 million** compared to the prior year, primarily due to lower net income and unfavorable working capital changes[107](index=107&type=chunk) - Net cash used for investing activities decreased by **$1.1 million** due to lower capital expenditures[109](index=109&type=chunk) - Net cash used for financing activities significantly decreased due to a special dividend paid in Q2 2024[109](index=109&type=chunk) [Financial Condition and Liquidity](index=31&type=section&id=Financial%20Condition%20and%20Liquidity) This subsection assesses the company's overall financial health, including its assets, liabilities, and ability to meet short-term obligations - The Company filed a Form S-3 shelf registration statement on April 23, 2025, effective May 5, 2025, allowing for up to **$150 million** in securities offerings[111](index=111&type=chunk) - The Company is evaluating the financial impact of the 'One Big Beautiful Bill Act' (OBBBA) on corporate taxation[112](index=112&type=chunk) [Cash Requirements](index=31&type=section&id=Cash%20Requirements) This subsection details the company's anticipated future cash needs for capital expenditures, dividends, and other operational activities - Expected capital expenditures for 2025 are approximately **$2.0 to $3.0 million**, with **$523 thousand** spent through June 30, 2025[113](index=113&type=chunk) - **1,570,428 shares** remain available for repurchase under the Company's stock repurchase program; **no shares were repurchased** in Q2 2025 or Q2 2024[114](index=114&type=chunk) - The Company plans to distribute Supplemental Executive Retirement Plan (SERP) participant balances within the **next 12 months**[115](index=115&type=chunk) - A regular quarterly cash dividend of **$0.14 per share** was declared on July 22, 2025[116](index=116&type=chunk) [OFF BALANCE SHEET ARRANGEMENTS](index=31&type=section&id=OFF%20BALANCE%20SHEET%20ARRANGEMENTS) This section describes contractual arrangements that have a material effect on the company's financial position but are not recognized on the balance sheet - The Company guarantees varying amounts of dealer debt for floor plan financing with third-party lenders, with obligations becoming effective upon dealer default[117](index=117&type=chunk) - The aggregate maximum repurchase obligation with all floor plan financing institutions was **$39.8 million** as of June 30, 2025[121](index=121&type=chunk) - **No material financial impact** was associated with repurchases under these contractual agreements during the six months ended June 30, 2025, and 2024[119](index=119&type=chunk) [CERTAIN RELATED PARTY TRANSACTIONS](index=33&type=section&id=CERTAIN%20RELATED%20PARTY%20TRANSACTIONS) This section discloses transactions between the company and its affiliates, management, or other related parties - RPC, Inc. charged the Company **$552 thousand** for administrative costs for the six months ended June 30, 2025 (vs **$590 thousand** in 2024)[123](index=123&type=chunk) - Net operating costs for the jointly owned corporate aircraft (255 RC, LLC) were **$76 thousand** for the six months ended June 30, 2025 (vs **$82 thousand** in 2024)[124](index=124&type=chunk) - A group including directors Amy R. Kreisler and Timothy C. Rollins controls **over 50%** of the Company's voting power[125](index=125&type=chunk) - A Form S-3 shelf registration was filed for the resale of up to **24,419,029 shares** of common stock held by LOR, Inc. and its affiliates[126](index=126&type=chunk) [CRITICAL ACCOUNTING POLICIES](index=35&type=section&id=CRITICAL%20ACCOUNTING%20POLICIES) This section highlights accounting policies that require significant judgment and estimation, which could materially impact financial results - There have been **no significant changes** to the critical accounting policies since the Company's annual report on Form 10-K for the year ended December 31, 2024[130](index=130&type=chunk) [IMPACT OF RECENT ACCOUNTING PRONOUNCEMENTS](index=35&type=section&id=IMPACT%20OF%20RECENT%20ACCOUNTING%20PRONOUNCEMENTS) This section discusses the potential effects of newly issued accounting standards on the company's financial statements - Refer to Note 2 of the Consolidated Financial Statements for details on recent accounting pronouncements, including expected adoption dates and effects[131](index=131&type=chunk) [SEASONALITY](index=35&type=section&id=SEASONALITY) This section explains how seasonal factors, such as weather and consumer behavior, influence the company's quarterly operating results - Quarterly operating results are affected by weather and general economic conditions, with the **second quarter historically recording the highest sales volume** and the **fourth quarter the lowest**[132](index=132&type=chunk) - Results for any single quarter are not necessarily indicative of results to be expected in future periods[132](index=132&type=chunk) [INFLATION](index=35&type=section&id=INFLATION) This section addresses the impact of inflation on the company's costs, pricing strategies, and consumer demand - Increases in interest rates, linked to higher inflation, have reduced retail demand for smaller boats and increased carrying costs for dealers[133](index=133&type=chunk) - Market prices of raw materials and components remain **elevated** due to post-pandemic supply chain disruptions and general inflation, leading to **historically high product prices**[134](index=134&type=chunk) - The rising cost of boat ownership may make it difficult to raise prices further, potentially impacting sales and profit margins[134](index=134&type=chunk) [FORWARD-LOOKING STATEMENTS](index=35&type=section&id=FORWARD-LOOKING%20STATEMENTS) This section provides cautionary language regarding statements about future events, which are subject to risks and uncertainties - This section contains forward-looking statements based on management's assumptions, which are predictions and not guarantees of future performance[135](index=135&type=chunk)[139](index=139&type=chunk) - Actual results, developments, and business decisions may differ from forward-looking statements due to various risk factors[139](index=139&type=chunk) - Key risk factors include economic conditions, credit availability, consumer confidence, business interruptions, increased interest rates, supply chain disruptions, competition, and regulatory changes[139](index=139&type=chunk)[142](index=142&type=chunk) [ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](index=39&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) The Company is exposed to interest rate risk through its revolving credit facility but had no outstanding interest-bearing advances as of June 30, 2025. It does not use derivative financial instruments and anticipates no material changes in market risk exposures or management - The Company is subject to interest rate risk from its credit facility but had **no outstanding interest-bearing advances** as of June 30, 2025[143](index=143&type=chunk) - Marine Products does not hold derivative financial instruments and does not expect any **material changes** in market risk exposures or how those risks are managed[144](index=144&type=chunk) [ITEM 4. CONTROLS AND PROCEDURES](index=39&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) Management, including the CEO and CFO, evaluated the effectiveness of the Company's disclosure controls and procedures as of June 30, 2025, concluding they were effective at a reasonable assurance level. No material changes in internal control over financial reporting occurred during the second quarter of 2025 - The Company's disclosure controls and procedures were evaluated and deemed **effective at a reasonable assurance level** as of June 30, 2025[146](index=146&type=chunk) - **No material changes** in internal control over financial reporting were identified during the second quarter of 2025[147](index=147&type=chunk) [PART II. OTHER INFORMATION](index=41&type=section&id=Part%20II.%20Other%20Information) [ITEM 1. LEGAL PROCEEDINGS](index=41&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) Marine Products is involved in routine litigation but does not anticipate that the outcome of these proceedings will have a material adverse effect on its financial position, results of operations, or liquidity - The Company is involved in litigation in the ordinary course of business[149](index=149&type=chunk) - Management believes the outcome of such litigation will **not have a material adverse effect** on the Company's financial position, results of operations, or liquidity[149](index=149&type=chunk) [Item 1A. RISK FACTORS](index=41&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors previously disclosed in the Company's Annual Report on Form 10-K for the year ended December 31, 2024 - **No material changes** from the risk factors previously disclosed in the Company's 2024 Annual Report on Form 10-K[150](index=150&type=chunk) [ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS](index=41&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) There were no unregistered sales of equity securities or use of proceeds to report during the period - **None**[151](index=151&type=chunk) [ITEM 3. DEFAULTS UPON SENIOR SECURITIES](index=41&type=section&id=ITEM%203.%20DEFAULTS%20UPON%20SENIOR%20SECURITIES) There were no defaults upon senior securities to report during the period - **None**[152](index=152&type=chunk) [ITEM 4. MINE SAFETY DISCLOSURES](index=41&type=section&id=ITEM%204.%20MINE%20SAFETY%20DISCLOSURES) This item is not applicable to Marine Products Corporation - **Not Applicable**[153](index=153&type=chunk) [ITEM 5. OTHER INFORMATION](index=41&type=section&id=ITEM%205.%20OTHER%20INFORMATION) This section reports that no directors or officers adopted or terminated Rule 10b5-1 trading arrangements during Q2 2025. Additionally, the Board of Directors approved amended and restated bylaws on July 22, 2025, which include various procedural and disclosure enhancements - **No director or officer adopted or terminated** a Rule 10b5-1 trading arrangement during the three months ended June 30, 2025[154](index=154&type=chunk) - The Board of Directors **approved and adopted amended and restated bylaws on July 22, 2025**, which became effective the same day[155](index=155&type=chunk) - Amendments to the bylaws include deleting provisions for closing stock transfer books, removing fee shifting provisions, enhancing stockholder nomination/proposal procedures, and providing flexibility for stock certificate signatures and record dates[155](index=155&type=chunk)[156](index=156&type=chunk) [ITEM 6. Exhibits](index=42&type=section&id=ITEM%206.%20Exhibits) This item lists all exhibits filed with the Form 10-Q, including corporate governance documents, certifications, and XBRL data files - Exhibit 3.2 is the **Amended and Restated By-laws** of Marine Products Corporation dated July 22, 2025[158](index=158&type=chunk) - Includes **Section 302 certifications** for the Chief Executive Officer and Chief Financial Officer, and **Section 906 certifications** for both[158](index=158&type=chunk) - Includes **Inline XBRL Instance Document** and related taxonomy extension documents[158](index=158&type=chunk) [Signatures](index=43&type=section&id=Signatures) The report is duly signed on behalf of Marine Products Corporation by its President and Chief Executive Officer, Ben M. Palmer, and its Vice President, Chief Financial Officer and Corporate Secretary, Michael L. Schmit, on July 24, 2025 - The report was signed by Ben M. Palmer, President and Chief Executive Officer, and Michael L. Schmit, Vice President, Chief Financial Officer and Corporate Secretary[162](index=162&type=chunk) - The signing date for the report was **July 24, 2025**[162](index=162&type=chunk)

Financial Data and Key Metrics Changes - Second quarter sales decreased by 3% to $67.7 million, driven by a 13% decrease in the number of boats sold, partially offset by a 10% increase in price and mix [10] - Gross profit decreased to $12.9 million, but gross profit margin increased by 20 basis points to 19.1% [10] - SG&A expenses rose by 9% to $8.1 million, with SG&A as a percentage of sales increasing by 130 basis points to 12% [11] - Diluted EPS fell to $0.12 from $0.14 in the previous year [11] - EBITDA decreased to $5.6 million from $6.5 million last year [12] - Year-to-date operating cash flow was $90.2 million, with free cash flow at $8.6 million [12] - The company ended the quarter with $50 million in cash and no debt [12] Business Line Data and Key Metrics Changes - The company noted that retail sales declined industry-wide during the first four months of 2025, but managed to reduce field inventory by 11% year over year [6] - The introduction of new models last year was well received, and the company is excited about the 2026 model year rollout with several portfolio-wide changes [8][14] Market Data and Key Metrics Changes - The company observed that channel inventory levels are stabilizing, and there are positive signs of declining inventory levels [5] - Interest rates remain elevated, but potential rate cuts could stimulate spending among dealers and consumers [6][8] Company Strategy and Development Direction - The company is focused on positioning its brands for improved future demand and maximizing returns on investments [6] - There is an ongoing evaluation of acquisition opportunities and partnerships to enhance the company's portfolio [14] - The company aims to maintain strong relationships with dealers regarding channel inventory management [9] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about the industry working through excess inventory and the potential for improved sales in the second half of 2025 [5] - The company is closely monitoring tariff changes and their impact on input costs, including engines and materials [7] - Management highlighted the importance of maintaining dialogue with government representatives regarding trade negotiations [8] Other Important Information - The company plans to demonstrate new models to dealers at the August year meeting [14] - The company has maintained a strong balance sheet, positioning itself as a buyer of choice for high-quality assets [14] Q&A Session Summary - There were no questions during the Q&A session [15]