[Marine Products Corporation Second Quarter 2025 Financial Results](index=1&type=section&id=Marine%20Products%20Corporation%20Reports%20Second%20Quarter%202025%20Financial%20Results) [Second Quarter 2025 Highlights and Management Commentary](index=1&type=section&id=Second%20Quarter%202025%20Highlights%20and%20Management%20Commentary) The company reported a 3% year-over-year decrease in net sales to $67.7 million and a 25% decline in net income, citing stabilized market demand but ongoing macroeconomic caution Q2 2025 Key Financial Metrics (vs. Q2 2024) | Metric | Q2 2025 | Change (YoY) | | :--- | :--- | :--- | | Net Sales | $67.7 million | -3% | | Net Income | $4.2 million | -25% | | Diluted EPS | $0.12 | -14.3% (from $0.14) | | Net Income Margin | 6.1% | -190 bps | | EBITDA | $5.6 million | -13% | | EBITDA Margin | 8.3% | -100 bps | - Management stated that second-quarter results reflected a stabilization of demand and a more balanced environment, with sales growing sequentially from the lows of the second half of 2024[4](index=4&type=chunk) - The company remains cautious due to ongoing risks from tariffs and macroeconomic factors, which affect dealer and consumer confidence[4](index=4&type=chunk) - The company ended the quarter with a strong balance sheet, holding approximately **$50.2 million in cash** and **no debt**, enabling continued investment in the business[4](index=4&type=chunk)[5](index=5&type=chunk) [Detailed Financial Performance Analysis](index=2&type=section&id=Detailed%20Financial%20Performance%20Analysis) A 3% decline in net sales was driven by lower unit volume offset by higher prices, while increased SG&A expenses contributed to lower net income despite improved gross margins - Net sales decreased by **3% to $67.7 million**, resulting from a 13% drop in unit volume, largely counteracted by a 10% favorable price/mix adjustment[6](index=6&type=chunk) - Gross profit was $12.9 million, down 2%, but **gross margin improved by 20 basis points to 19.1%** as production schedules stabilized, leading to manufacturing cost efficiencies[7](index=7&type=chunk) - **SG&A expenses increased by 9% to $8.1 million**, representing 12.0% of net sales, mainly due to higher R&D investments and the timing of incentive compensation accruals[7](index=7&type=chunk) - **Net income fell to $4.2 million** with a **diluted EPS of $0.12**, down from $5.6 million and $0.14 in Q2 2024, while the net income margin contracted by 190 basis points to 6.1%[8](index=8&type=chunk) [Balance Sheet, Cash Flow, and Capital Allocation](index=2&type=section&id=Balance%20Sheet%2C%20Cash%20Flow%2C%20and%20Capital%20Allocation) The company maintained a strong debt-free balance sheet with $50.2 million in cash, generated $8.6 million in free cash flow, and continued shareholder returns via dividends - The company ended the quarter with **$50.2 million in cash** and cash equivalents and had **no outstanding borrowings** under its $20 million revolving credit facility[10](index=10&type=chunk) Year-to-Date Cash Flow and Capex (through Q2 2025) | Metric | Amount | | :--- | :--- | | Net Cash from Operating Activities | $9.2 million | | Free Cash Flow | $8.6 million | | Expected Full Year 2025 Capex | ~$3 million | - Dividends paid totaled **$9.8 million year-to-date**, and the Board of Directors declared a regular quarterly dividend of $0.14 per share[11](index=11&type=chunk) [Financial Statements](index=5&type=section&id=Financial%20Statements) This section presents the unaudited consolidated statements of operations, balance sheets, and cash flows for the periods ending June 30, 2025, and 2024 [Consolidated Statements of Operations](index=5&type=section&id=Consolidated%20Statements%20of%20Operations) The income statement shows a year-over-year decline in net sales and net income for both the second quarter and the first six months of 2025 Six Months Ended June 30 (in thousands) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Net sales | $126,700 | $138,887 | | Gross profit | $23,862 | $27,158 | | Operating income | $7,424 | $10,992 | | Net income | $6,368 | $10,182 | | Diluted EPS | $0.18 | $0.28 | [Consolidated Balance Sheets](index=6&type=section&id=Consolidated%20Balance%20Sheets) The balance sheet as of June 30, 2025, reflects total assets of $173.2 million, stockholders' equity of $127.2 million, and a strong cash position Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $50,171 | $52,379 | | Inventories | $51,185 | $49,960 | | Total current assets | $131,136 | $109,994 | | Total assets | $173,245 | $171,247 | | Total liabilities | $46,014 | $42,244 | | Total stockholders' equity | $127,231 | $129,003 | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operations decreased significantly in the first half of 2025, with financing activities primarily consisting of dividend payments and stock repurchases Cash Flow Summary - Six Months Ended June 30 (in thousands) | Activity | 2025 | 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 | ($2,208) | ($16,821) | [Non-GAAP Financial Measures Reconciliation](index=8&type=section&id=Non-GAAP%20Financial%20Measures%20Reconciliation) This section provides reconciliations of non-GAAP measures like EBITDA and free cash flow to their comparable GAAP figures to clarify operating performance - The company uses non-GAAP measures like EBITDA, EBITDA margin, and free cash flow, believing they help investors compare operating performance and evaluate liquidity consistently over time[19](index=19&type=chunk) Reconciliation of Net Income to EBITDA (in thousands) | Line Item | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net income | $4,162 | $5,585 | | Add: Income tax provision | $1,125 | $1,044 | | Add: Depreciation and amortization | $787 | $702 | | Less: Interest income, net | $476 | $879 | | **EBITDA** | **$5,598** | **$6,452** | Reconciliation of Operating Cash Flow to Free Cash Flow (in thousands) | Line Item | Six Months Ended June 30, 2025 | | :--- | :--- | | Net cash provided by operating activities | $9,165 | | Capital expenditures | ($523) | | **Free cash flow** | **$8,642** | [Corporate Information and Forward-Looking Statements](index=3&type=section&id=Corporate%20Information%20and%20Forward-Looking%20Statements) The company manufactures fiberglass boats under the Chaparral and Robalo brands and outlines key business risks in its forward-looking statements - The company manufactures high-quality fiberglass boats under the **Chaparral** (SSi, SSX, SURF, OSX) and **Robalo** (Center Consoles, Dual Consoles, Cayman Bay Boats) brand names[13](index=13&type=chunk) - The forward-looking statements highlight potential risks including **negative economic conditions, increased tariffs, supply chain disruptions**, and changes in consumer discretionary spending that could affect future results[14](index=14&type=chunk)

Core Insights - Marine Products Corporation reported a 3% year-over-year decline in net sales for Q2 2025, totaling $67.7 million, primarily due to a 13% decrease in the number of boats sold, which was partially offset by a 10% price/mix increase [4][7] - The company experienced a net income of $4.2 million, down 25% from the previous year, with diluted EPS at $0.12, reflecting a net income margin decrease of 190 basis points to 6.1% [7][8] - Management expressed optimism about demand stabilization and upcoming model year 2026 introductions, despite ongoing concerns regarding tariffs and macroeconomic risks [3][4] Financial Performance - Gross profit for Q2 2025 was $12.9 million, a decrease of 2% year-over-year, with a gross margin of 19.1%, which improved by 20 basis points compared to the prior year [5][8] - Selling, general and administrative expenses rose by 9% to $8.1 million, representing 12.0% of net sales, attributed to increased R&D investments and timing of incentive compensation [5][8] - EBITDA for the quarter was $5.6 million, down 13% year-over-year, with an EBITDA margin of 8.3%, a decrease of 100 basis points from the previous year [7][8] Cash Flow and Balance Sheet - The company ended Q2 2025 with cash and cash equivalents of $50.2 million and no debt, with net cash provided by operating activities at $9.2 million and free cash flow at $8.6 million year-to-date [9][10] - Year-to-date dividend payments totaled $9.8 million, with a quarterly dividend of $0.14 per share declared for payment on September 10, 2025 [10] - Total assets as of June 30, 2025, were $173.2 million, with total liabilities at $46.0 million, indicating a strong balance sheet position [16][17] Market Outlook - Management highlighted the importance of a strong balance sheet and disciplined production management to navigate the current market environment, with expectations for capital expenditures of approximately $3 million for the full year 2025 [3][9] - The company is focused on product innovation and diversification to enhance market share and long-term shareholder value [12][13]

Company Overview - Marine Products Corporation has appointed Gary Kolstad to its Board of Directors, bringing extensive board and management experience [1][2] - The company is a leading manufacturer of high-quality fiberglass boats under the brands Chaparral and Robalo, with a diverse product line including sportboats and fishing models [2] Leadership Insights - Richard A. Hubbell, Chairman of the Board, expressed confidence in Kolstad's contributions to the board, highlighting his beneficial experience in previous roles [2] Product and Market Strategy - Marine Products Corporation continues to diversify its product lines through innovation, aiming to increase market share and enhance financial performance [2]

Group 1 - Marine Products Corporation will release its financial results for Q2 2025 on July 24, 2025, before market opens [1] - A conference call to discuss the financial and operating results will take place on July 24, 2025, at 8:00 a.m. Eastern Time [1] - Participants can join the conference call via toll-free number or international dial-in, with a conference ID provided [2] Group 2 - Marine Products Corporation is a leading manufacturer of high-quality fiberglass boats under the brands Chaparral and Robalo [3] - The company offers a diverse range of products, including sterndrive models, outboard offerings, and sport fishing models [3] - Marine Products Corporation aims to increase market share and generate superior financial performance through product innovation and a strong dealer network [3]

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Company Overview - Marine Products Corporation (MPX) is a leading manufacturer of recreational powerboats with key brands Chaparral and Robalo[12] - The company has been building high-quality fiberglass powerboats for more than 60 years[9] - MPX has approximately 600 employees and is headquartered in Atlanta, with a manufacturing facility in Nashville, GA[11] - The company's market capitalization is approximately $300 million[11] Financial Performance - Net sales for the first quarter of 2025 decreased by 15% year-over-year to $59 million[57] - Net income for the first quarter of 2025 was $2206 thousand, down 52% year-over-year, with diluted EPS of $006[57, 58] - EBITDA for the first quarter of 2025 was $3402 thousand, a 43% decrease year-over-year, with an EBITDA margin of 58%[57, 62] - In 2024, approximately 54% of sales were from the Chaparral brand and 46% from the Robalo brand[15] - In 2024, approximately 65% of sales were from outboard propulsion boats, while 35% were from sterndrive propulsion boats[35] - The company ended the first quarter of 2025 with approximately $571 million in cash and no debt[57] Strategy and Outlook - The company plans to begin working with its dealer network for model year 2026 introductions, taking a conservative approach to rollout and inventory management[2] - Full year 2025 capital expenditures are expected to be approximately $3 million[2] - The company has returned approximately $240+ million to shareholders since 2015[29]

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]

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% [5][12] - Gross profit fell to $11 million with a gross profit margin of 18.6%, down 160 basis points due to lower volumes and reduced fixed cost absorption [13] - Diluted EPS was $0.06, down from $0.13 in the previous year, while EBITDA decreased to $3.4 million from $5.9 million [14] Business Line Data and Key Metrics Changes - The company reported a sequential sales increase of 23% compared to the fourth quarter of 2024, indicating signs of stabilization after significant declines in previous quarters [5] - Channel inventories were down 18% compared to the same quarter last year, reflecting progress in managing inventory levels [7] Market Data and Key Metrics Changes - The marine industry is facing challenges with elevated levels of channel inventory and an unclear interest rate environment, impacting overall demand [6][10] - The company is closely monitoring tariff impacts on key input costs, including engines and materials, which could lead to model price increases [9] Company Strategy and Development Direction - The company remains focused on managing costs and production levels while positioning for improved demand in the future [6] - There is an active pursuit of acquisitions to expand the business, with a focus on boat categories where the company currently lacks products [16] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about reaching a trough in sales declines and anticipates potential year-over-year sales growth in the second half of 2025 [5][6] - The company acknowledges the uncertainty surrounding interest rates and tariffs but is committed to maintaining open communication with stakeholders [10] Other Important Information - The company filed an S3 registration statement with the SEC for the Rollins family Control Group shares, which is viewed as good corporate housekeeping [15] - Recent board changes include the election of Steve Lewis and the retirement of Gary Rollins and Pam Rollins, reflecting ongoing governance updates [17] Q&A Session Summary - No specific questions or answers were documented in the provided content, as the call concluded without a detailed Q&A segment [18][21]