Marine Products(US:MPX)2024-10-24 17:57Financial Performance - Consolidated net sales for Q3 2024 were $49.9 million, a decrease of 35.9% compared to $77.8 million in Q3 2023, primarily due to a 40% decrease in unit sales [59][66]. - Gross profit for Q3 2024 decreased to $9.2 million from $19.2 million in Q3 2023, resulting in a gross profit margin of 18.4%, down from 24.7% [59][65]. - Operating income for Q3 2024 was $3.6 million, a decline from $12.4 million in Q3 2023, with diluted earnings per share dropping to $0.10 from $0.30 [59][66]. - For the nine months ended September 30, 2024, net sales decreased by $124.1 million or 39.7% compared to the same period in 2023, driven by a 40% decrease in unit sales [71]. - Net income for Q3 2024 was $3.4 million, down from $10.4 million in Q3 2023, with the effective tax provision rate decreasing to 19.4% from 21.6% [59][70]. Cost Management - Cost of goods sold for the nine months ended September 30, 2024 was $152.4 million, a decrease of 35.4% from $235.9 million in the same period of 2023, with COGS as a percentage of net sales at 80.7% [71]. - Selling, general and administrative expenses for the nine months ended September 30, 2024 were $21.8 million, down 38.6% from $35.5 million in the same period of 2023 [72]. - RPC charged the company $858 thousand for administrative costs for the nine months ended September 30, 2024, compared to $786 thousand for the same period in 2023 [82]. Cash Flow and Liquidity - Cash provided by operating activities for the nine months ended September 30, 2024 was $24.9 million, a decrease of $15.3 million compared to $40.2 million in the same period of 2023 [75]. - The company expects that the liquidity provided by existing cash, cash equivalents, and marketable securities will be sufficient to meet its requirements for at least the next twelve months [88]. Production and Market Strategy - The company has adjusted production levels to align with expected demand due to softening consumer demand and higher interest rates impacting boat ownership costs [61][64]. - The company has reinstituted certain retail incentives to attract consumers and help reduce channel inventory [61]. - The company believes that the recent increase in interest rates has reduced retail demand for smaller boats, impacting sales [86]. - The company anticipates that year-over-year comparisons of net sales will likely remain soft in the near term [88]. Shareholder Returns - Capital expenditures for 2024 are expected to be approximately $5.0 million, with $3.6 million spent through September 30, 2024 [77]. - 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 September 30, 2024 [77]. - A regular quarterly dividend of $0.14 per share has been declared, payable on December 10, 2024, to common stockholders of record as of November 11, 2024 [78]. - The company has a maximum repurchase obligation of $26.6 million with various floor plan financing institutions as of September 30, 2024 [81]. Risk Management - The company plans to continue monitoring the risk of defaults and adjust guarantee liabilities based on information from third-party lenders [90]. - The company does not expect any material changes in market risk exposures or how those risks are managed [92].