Core Insights - Marine Products (MPX) specializes in selling leisure motorboats, with its Chaparral and Robalo models being among the top sellers in their category [1] Group 1: Company Overview - MPX has experienced suppressed sales in recent quarters, attributed partly to inventory adjustments [1] Group 2: Market Position - The Chaparral and Robalo models are highlighted as best-selling products within their class, indicating a strong market presence [1]

Group 1: Market Performance - The Russell 2000 index has outperformed the S&P 500 in 2026, rising 5.6% compared to the S&P 500's 1.2% gain, driven by a domestic economic rebound and increased risk appetite for small-cap stocks [1] - Small-cap companies are benefiting from falling interest rates, improved access to credit, and rising mergers-and-acquisitions activity, which lower their cost of capital and unlock growth [2] - After years of underperformance, the Russell 2000 entered 2026 at historically attractive relative valuations, setting the stage for potential multiple expansion as investors shift focus to cyclical growth [3] Group 2: Company Insights - Ares Capital Corp. specializes in financing solutions for middle-market companies, has a Buy rating from 12 analysts, and offers a 9.36% dividend yield [6] - Hercules Capital Inc. focuses on providing financing to venture capital-backed companies, has an 8.57% dividend yield, and aims to increase net income through investments in structured debt [11] - Starwood Property Trust Inc. operates as a real estate investment trust (REIT) with a 10.60% dividend yield, managing investments across various segments including commercial and residential lending [19][20] Group 3: Investment Opportunities - Four small-cap stocks with solid upside potential and high-yield dividends have been identified as attractive buys for growth and income investors [5] - Ares Capital, Hercules Capital, Marine Products, and Starwood Property Trust are highlighted as strong candidates for investment due to their dividend yields and growth prospects [5][14][19]

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]

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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].