Marine Products(US:MPX)2025-10-30 19:14Financial 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].