CORPORATE OVERVIEW April 2025 MARINE PRODUCTS CORPORATION 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: our plans to begin ...

Financial Performance - Consolidated net sales decreased 14.9% to $59.0 million for Q1 2025 compared to $69.3 million in Q1 2024, primarily due to a 19% decrease in unit sales[77] - Gross profit decreased to $11.0 million in Q1 2025 from $14.0 million in Q1 2024, reflecting continued weakness in the marine industry[77] - Net income decreased to $2.2 million in Q1 2025, down from $4.6 million in Q1 2024, with diluted earnings per share at $0.06 compared to $0.13[77] - EBITDA for Q1 2025 was $3.4 million, down from $5.9 million in Q1 2024, resulting in an EBITDA margin of 5.8% compared to 8.5%[96] - Total number of boats sold decreased to 625 in Q1 2025 from 770 in Q1 2024, while the average gross selling price per boat increased to $85.1 from $80.4[87] - Selling, general and administrative expenses decreased to $8.3 million in Q1 2025 from $8.7 million in Q1 2024, representing 14.1% of net sales compared to 12.6%[92] - Cash flow from operating activities decreased to $10.8 million in Q1 2025 from $15.9 million in Q1 2024, with free cash flow also decreasing to $10.7 million from $15.0 million[97] Tax and Regulatory Matters - The effective tax rate increased to 27.8% in Q1 2025 from 24.6% in Q1 2024, primarily due to unfavorable permanent adjustments on decreased pretax income[94] - The company filed a shelf registration statement on April 23, 2025, allowing for the offering of securities up to $150 million, subject to market conditions[109] Future Outlook - The company anticipates that sales comparisons to the prior year could begin to turn positive in the second half of 2025 as dealer inventories return to more acceptable levels[83] - The company is actively monitoring dealer inventories and order patterns for an uptick in demand, which may lead to increased production schedules[83] - The company anticipates that inflation and interest rate increases may impact retail demand for boats, particularly smaller models[128] - The company expects capital expenditures in 2025 to be approximately $3.0 million[1] Cash Management and Dividends - Cash provided by operating activities decreased by $5.1 million for the three months ended March 31, 2025, primarily due to a decrease in net income[106] - Working capital generated $6.7 million in cash for the three months ended March 31, 2025, down from $9.5 million in the same period of the prior year[106] - 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 as of March 31, 2025[111] - A regular quarterly cash dividend of $0.14 per share was declared, payable on June 10, 2025, to common stockholders of record as of May 9, 2025[113] - The company expects to continue paying cash dividends to common stockholders, subject to industry conditions and financial performance[1] Risk Factors - The company acknowledges that the cost of boat ownership has risen significantly, which may affect future retail demand and profit margins[1] - The company recognizes that ongoing tariff developments could lead to inflationary pressures impacting costs[1] - The company does not expect any material changes in market risk exposures or how those risks are managed[1] Employee Benefits - The company is currently evaluating funding options for the distribution of participant balances from the terminated Supplemental Executive Retirement Plan, expected to occur between 12 and 24 months after termination[112] - The company has plans to evaluate funding and timing options for distributing the Supplemental Executive Retirement Plan participant balances[1]

Financial Performance - Q1 2025 sales were $59 million, a 15% decline year-over-year, but an improvement from the 30%-40% declines experienced throughout CY2024 [4][11] - Gross profit decreased to $11 million, with a margin of 18.6%, down 60 basis points due to lower volumes and reduced fixed cost absorption [11] - Diluted EPS was $0.06, down from $0.13 in Q1 2024 [11] - EBITDA for Q1 2025 was $3.4 million, down from $5.9 million in Q1 2024 [11] - Operating cash flow was strong at $10.8 million, with free cash flow of $10.7 million [11] Sales and Market Trends - The number of boats sold decreased by 19% year-over-year in Q1 2025 [11] - Channel inventory was down 18% compared to Q1 2024, indicating a reduction in unsold stock [4][9] - Management anticipates potential year-over-year sales growth in the second half of 2025 despite ongoing challenges [4][9] Cost Management and Expenditures - SG&A expenses were $8.3 million, down 5% year-over-year, primarily due to costs that vary with sales and profitability [11] - Capital expenditures for Q1 2025 were under $100,000, with expectations of approximately $3 million for the full year [4][11] Strategic Initiatives - The company is actively seeking acquisitions to expand its business and has ample liquidity to pursue opportunities [5][12] - An S-3 registration statement has been filed, which includes the registering of Rollins Family Control Group shares [5][11] Leadership Changes - Steve Lewis has been elected to the board of directors, while Gary Rollins and Pam Rollins have retired from the board [5][12]

Financial Data and Key Metrics Changes - First quarter sales decreased by 15% year-over-year to $59 million, driven by a 19% decrease in the number of boats sold, although price and mix contributed positively by 4% [15][6] - Gross profit fell to $11 million, with a gross profit margin of 18.6%, down 60 basis points due to lower volumes and reduced fixed cost absorption [16] - EBITDA decreased to $3.4 million from $5.9 million, while diluted EPS was $0.06, down from $0.13 in the previous year [18][19] - Strong operating cash flow of $10.8 million and free cash flow of $10.7 million were generated, with cash at the end of the quarter amounting to $57 million and no debt [19][20] Business Line Data and Key Metrics Changes - The company reported a 15% decline in sales, with a notable 19% decrease in the number of boats sold, indicating challenges in the marine products sector [15][6] - The company is focused on managing costs and production levels tightly to maximize cash flow and prepare for improved demand in the future [8][9] Market Data and Key Metrics Changes - Channel inventories were reported down 18% compared to the same quarter last year, indicating progress in managing inventory levels [9] - The marine industry is facing challenges with elevated levels of channel inventory and an unclear interest rate environment, impacting overall market conditions [7][10] Company Strategy and Development Direction - The company remains cautiously optimistic about reaching a sales growth trajectory in the second half of 2025, despite ongoing challenges [6][7] - There is a focus on innovation and new designs across the Chaparral and Revolo brands, with plans for model year 2026 rollout [13][14] - The company is actively seeking acquisitions to expand its business and has sufficient liquidity to pursue opportunities [22] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenging and uncertain environment, including tariff impacts and interest rate fluctuations, which could affect future performance [7][12] - The company is maintaining an open dialogue with government representatives regarding potential tariff impacts on input costs [11][12] Other Important Information - The company filed an S-3 registration statement with the SEC for the Rollins Family Control Group shares, which is viewed as good corporate housekeeping [20] - Recent board changes include the election of Steve Lewis and the retirement of Gary Rollins and Pam Rollins, reflecting ongoing governance adjustments [24] Q&A Session Summary - No specific questions or answers were documented in the provided content, indicating that the call may have concluded without a formal Q&A session [25][28]

Marine Products (MPX) Q1 2025 Earnings Call April 24, 2025 08:00 AM ET Company Participants Michael Schmit - CFO, VP & Corporate SecretaryBen Palmer - President & CEO Operator Good morning, and thank you for joining us for the Marine Products Corporation's First Quarter twenty twenty five Earnings Conference Call. Today's call will be hosted by Ben Palmer, President and CEO and Mike Schmidt, Chief Financial Officer. At this time, all participants are in a listen only mode. Following the presentation, we wil ...

Core Viewpoint - Marine Products Corporation reported a challenging first quarter in 2025, with a 15% decline in net sales year-over-year, primarily due to lower boat sales and cautious dealer ordering behavior [3][4][7]. Financial Results - Net sales for 1Q:25 were $59.0 million, down 15% from $69.3 million in 1Q:24, attributed to a 19% decrease in the number of boats sold, partially offset by a 4% price/mix increase [4][7]. - Gross profit decreased to $11.0 million, down 22%, with a gross margin of 18.6%, reflecting a decline of 160 basis points year-over-year [5][7]. - Net income was $2.2 million, a 52% decrease from $4.6 million in 1Q:24, resulting in a diluted EPS of $0.06, down from $0.13 [7][8]. Operational Insights - The company experienced a significant reduction in sales decline compared to over 30% in 2024, indicating a potential easing of market pressures [4]. - Field inventories were approximately 18% lower than in 1Q:24, suggesting improved inventory management [4]. Management Commentary - The CEO highlighted ongoing challenges in the marine industry, including economic uncertainty and potential cost increases due to tariffs, which may affect consumer spending and pricing strategies [3][7]. - The company plans to adopt a conservative approach to inventory management and product rollouts while continuing to innovate [3][7]. Cash Flow and Capital Allocation - Cash and cash equivalents at the end of 1Q:25 were $57.1 million, with no debt, and the company generated strong operating cash flow of $10.8 million [10][20]. - The company declared a quarterly dividend of $0.14 per share, totaling $4.9 million in dividend payments for the quarter [11][20]. Industry Context - The marine industry continues to face demand softness, with macroeconomic uncertainties impacting visibility and consumer confidence [7][8].

Financial Results Announcement - Marine Products Corporation will release its financial results for the first quarter ended March 31, 2025 on April 24, 2025 before the market opens [1] - A conference call to review the financial and operating results will be held on April 24, 2025 at 8:00 a.m. Eastern Time [1] Conference Call Participation - Individuals can participate in the conference call by dialing toll-free (888) 660-6357 or (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] Company Overview - Marine Products Corporation is a leading manufacturer of high-quality fiberglass boats under the brands Chaparral and Robalo [3] - The product offerings include various models such as SSi Sportboats, SSX Luxury Sportboats, and Robalo's outboard sport fishing models [3] - The Company aims to diversify its product lines through innovation and has a solid capital structure and strong dealer network to enhance market share and financial performance [3]

Sales and Market Performance - Marine Products operates a dealer network of approximately 202 domestic dealers and 88 international dealers, with international sales representing 5.6% of total net sales in 2024[29]. - The sales order backlog as of December 31, 2024, was 655 boats with estimated net sales of approximately $53.4 million, down from 1,243 boats and $92.3 million in 2023[34]. - The company has experienced a slowdown in boat demand due to rising interest rates and economic uncertainty, leading to excess dealer inventory impacting sales in 2024[33]. - The recreational marine market in the U.S. is mature, with sales of new and used boats correlated with economic cycles, showing significant demand fluctuations post-COVID-19[43][44]. - Beginning in mid-2023, industry demand began to moderate, leading to excess inventory levels and reduced dealer order flow, impacting production and gross profit margins[45][48]. - The strong retail demand for new recreational boats that began in 2020 has subsided and normalized, with higher selling prices and rising interest rates curbing consumer demand[129]. - International dealer net sales were approximately $13.3 million in 2024, a decline of 40.0% from $22.5 million in 2023[210]. Financial Performance - Consolidated net sales decreased 38.4% to $236.6 million in 2024, primarily due to a 40% decrease in unit sales to dealers, partially offset by a positive price/mix of 2%[128]. - Gross profit decreased to $45.5 million in 2024, down from $90.4 million in 2023[128]. - Operating income decreased to $18.3 million in 2024, compared to $49.2 million in the prior year[128]. - Net income decreased to $17.9 million in 2024, down from $41.7 million in the prior year[128]. - Diluted earnings per share was $0.50 for 2024, down from $1.21 for 2023[128]. - EBITDA was $21.1 million in 2024 compared to $51.6 million in 2023, with an EBITDA margin of 8.9% in 2024 compared to 13.5% in 2023[143]. - Free cash flow decreased to $24.9 million in 2024 from $46.7 million in 2023, primarily due to lower net income[143]. - Cash and cash equivalents were $52.4 million at December 31, 2024, down from $72.0 million at December 31, 2023[149]. - The effective tax rate decreased to 15.6% in 2024 from 19.9% in 2023, primarily due to favorable adjustments and increased tax credits[141]. - Total assets decreased to $171,247,000 in 2024 from $193,802,000 in 2023, reflecting a reduction of 11.6%[197]. - Total stockholders' equity fell to $129,003,000 in 2024, down 15.0% from $151,588,000 in 2023[197]. - The company reported a basic earnings per share of $0.50 for 2024, down from $1.21 in 2023, representing a decrease of 58.7%[200]. - Cash and cash equivalents decreased to $52,379,000 in 2024 from $71,952,000 in 2023, a decline of 27.2%[197]. Cost and Expenses - Cost of goods sold decreased by 34.9% in 2024 compared to 2023, but as a percentage of net sales, it increased to 80.8% in 2024 from 76.4% in 2023 due to lower sales volumes[137]. - Selling, general and administrative expenses decreased by $15.8 million, or 36.6%, in 2024 compared to 2023, representing 11.6% of net sales in 2024[138]. - Capital expenditures for 2024 were $4.596 million, significantly lower than $10.174 million in 2023, indicating a reduction of 54.7%[207]. - Stock-based compensation expense rose to $4.228 million in 2024, compared to $3.711 million in 2023, an increase of 13.9%[207]. Production and Operations - Approximately 69% of domestic shipments are made through floor plan financing programs, with a total aggregate repurchase obligation of approximately $25.0 million as of December 31, 2024[35][36]. - The company has entered into a three-year floor plan financing agreement with a single third-party lender, set to begin in Q1 2025, to replace existing agreements[39]. - The manufacturing process is labor-intensive and largely manual, with a focus on craftsmanship and a skilled workforce[24]. - The company monitors dealer inventory levels to inform production scheduling, adjusting as necessary to manage dealer inventory levels[33]. - The company has adjusted production levels to align with expected demand, resulting in reduced fixed cost absorption and negatively impacting profit margins[129]. Market Conditions and Competition - The top five sterndrive model manufacturers, including Marine Products' Chaparral brand, hold a combined market share of approximately 85%, with Chaparral being the second largest at about 23%[52]. - Robalo, part of Marine Products, ranks fourth in the outboard market with a market share of 4.3%, and when combined with Chaparral outboards, the company holds approximately 6% in this category[52]. - Marine Products faces intense competition in the recreational boat industry, affecting its sales and profitability[81]. - Higher interest rates and fuel prices adversely affect consumers' decisions regarding recreational boating purchases[76]. - Economic conditions and consumer confidence levels significantly affect Marine Products' sales, particularly during recessions[74]. Strategic Initiatives - The company plans to execute strategic investments, including potential M&A, to enhance product offerings and improve profitability and cash flow[54]. - Marine Products aims to maintain a flexible cost structure to quickly respond to changing demand, supporting dealers with competitive promotional programs[58]. - The company intends to pursue acquisitions to expand its customer base and capabilities, but integration risks exist[84]. Inventory and Financing - The company relies on third-party dealer floor plan lenders for financing, which is critical for sales to independent dealers[75]. - The financial health of independent dealers is crucial, as defaults may require Marine Products to repurchase inventory[78]. - The Company had no material repurchases of dealer inventory in 2024 and 2023, indicating stable inventory management[158]. - As of December 31, 2024, the Company had an aggregate maximum repurchase obligation of approximately $25.0 million with various lenders[166]. Warranty and Compliance - Marine Products offers a lifetime limited structural hull warranty and a one-year limited warranty to the original owner for its Chaparral and Robalo products[25]. - Warranty expense as a percentage of net sales remained consistent at 1.5% for 2024, 2023, and 2022, reflecting stable warranty management[171]. - Compliance with EPA regulations has increased manufacturing costs, potentially affecting net sales as consumers may opt for smaller or less expensive boats[61]. Corporate Governance and Stock Information - Approximately 70% of Marine Products' outstanding shares are held by executive officers, directors, and their affiliates, which may limit stock availability to the investing public[99]. - The company has a stock buyback program that authorized the repurchase of 8,250,000 shares, with 1,570,428 shares remaining available for repurchase as of December 31, 2024[121]. - Marine Products' common stock is listed on the NYSE under the symbol "MPX," with 34,961,460 shares outstanding as of February 14, 2025[120]. - The Company maintained effective internal control over financial reporting as of December 31, 2024, according to the independent auditor's assessment[181].

Financial Performance - Net sales for Q4 2024 decreased by 33% year-over-year to $47.8 million, with a 39% decrease in the number of boats sold, partially offset by a positive price/mix of 6%[6][8] - Net income for Q4 2024 was $4.3 million, down 21% year-over-year, with diluted EPS at $0.12; net income margin increased by 120 basis points to 8.9% due to favorable tax items[6][11] - EBITDA for Q4 2024 was $4.4 million, down 32% year-over-year, maintaining an EBITDA margin of 9.2%[6][12] - Full year 2024 net sales decreased by 38% year-over-year to $236.6 million, with net income at $17.9 million and diluted EPS at $0.50[6][8] - Net income for the year ended December 31, 2024, was $17,853,000, down 57.2% from $41,695,000 in 2023[24] - Net sales for the year ended December 31, 2024, were $236,555,000, a decrease of 38.4% compared to $383,729,000 in 2023[28] - EBITDA for the year ended December 31, 2024, was $21,052,000, down 59.3% from $51,618,000 in 2023[28] Cash and Assets - The company ended 2024 with approximately $52.4 million in cash and no debt, supporting regular quarterly dividends and a significant mid-year special dividend[6][13] - Cash and cash equivalents at the end of the period were $52,379,000, down from $71,952,000 at the beginning of the period, a decrease of 27.2%[24] - Total assets decreased to $171,247,000 in Q4 2024 from $193,802,000 in Q4 2023, a decline of approximately 11.6%[23] - Total stockholders' equity decreased to $129,003,000 in Q4 2024 from $151,588,000 in Q4 2023, a decline of approximately 15.0%[23] - Net cash provided by operating activities decreased to $29,526,000 in 2024 from $56,846,000 in 2023, a decline of 48.0%[24] - Free cash flow for the year ended December 31, 2024, was $24,930,000, down 46.5% from $46,672,000 in 2023[31] Expenses and Dividends - Selling, general and administrative expenses for Q4 2024 were $5.6 million, down 28% year-over-year, representing 11.6% of net sales[6][10] - A regular quarterly dividend of $0.14 per share has been declared, payable on March 10, 2025[6][15] Future Outlook - The company expects year-over-year sales comparisons to be generally flat in the near-term, with potential for growth in the second half of 2025[7][18] - Management remains cautious with hiring and production increases until there are definitive signals for improved demand[7][18] Margins - The net income margin for Q4 2024 was 8.9%, compared to 7.7% in Q4 2023[28] - The EBITDA margin for Q4 2024 remained stable at 9.2%, consistent with Q4 2023[28] Sustainability Initiatives - The company completed its solar panel installation at the Nashville production site, which is expected to yield cost savings and environmental benefits[6][14]

Core Viewpoint - Marine Products Corporation reported a challenging year in 2024, with a significant decline in sales and net income, but expressed optimism for future growth as they navigate through high inventory levels and cautious dealer sentiment [4][5][6]. Fourth Quarter 2024 Results - Net sales for Q4 2024 were $47.8 million, a decrease of 33% year-over-year, primarily due to a 39% drop in the number of boats sold, partially offset by a 6% positive price/mix [5][6]. - Net income for Q4 was $4.3 million, down 21% year-over-year, with diluted EPS at $0.12 [6][9]. - EBITDA for Q4 was $4.4 million, down 32% year-over-year, maintaining an EBITDA margin of 9.2% [6][10]. Full Year 2024 Results - Total net sales for 2024 were $236.6 million, a decline of 38% compared to 2023 [6][18]. - Net income for the full year was $17.9 million, with diluted EPS at $0.50 [6][18]. - EBITDA for the year was $21.1 million, with an EBITDA margin of 8.9% [6][18]. Management Commentary - The management highlighted that the fourth quarter represented the smallest sales decline of the year and noted improvements in gross margin stability [4]. - They acknowledged the impact of high inventories across competitors and expressed cautious optimism regarding future demand, particularly in the second half of 2025 [4][5]. - The company emphasized its strong financial position, with the ability to fund growth projects and dividends, while also seeking M&A opportunities [4]. Financial Metrics - Gross profit for Q4 was $9.2 million, down 32%, with a gross margin of 19.2%, reflecting effective cost controls [6][7]. - Selling, general and administrative expenses decreased by 28% to $5.6 million, representing 11.6% of net sales [6][8]. - Cash and cash equivalents at the end of 2024 were $52.4 million, with no debt [11][12]. Cash Flow and Capital Allocation - Net cash provided by operating activities for 2024 was $29.5 million, with free cash flow at $24.9 million [12][29]. - The company paid total dividends of $43.7 million in 2024, including a special dividend of $0.70 per share [13].