Marine Products(US:MPX)2024-07-25 14:13Financial Data and Key Metrics Changes - EBITDA decreased to $6.5 million from $17.1 million, with EBITDA margin down 540 basis points to 9.3% [1] - Year-to-date operating cash flow was $20 million and free cash flow was $18 million [1] - Sales for Q2 2024 were down 40% to $69.5 million, driven by a 41% decrease in boats sold [13] - Gross profit decreased 54% to $13.2 million, with a gross profit margin of 18.9%, down 580 basis points [14] - Diluted EPS was $0.14, down from $0.42 last year [16] Business Line Data and Key Metrics Changes - SG&A expenses were $7.4 million, down 39% or $4.7 million compared to last year [15] - Field inventory declined over 15% in the second quarter, indicating improved inventory management [3] Market Data and Key Metrics Changes - The company noted that high dealer inventories remain an issue, particularly in categories where it does not compete [3] - The company is experiencing dealer hesitation to order boats aggressively due to the need to clear existing inventory [25] Company Strategy and Development Direction - The company is focusing on managing costs and production schedules during the current soft period [10] - Plans for increased CapEx in the second half of the year, with expectations of approximately $5 million for the full year [2] - The company is committed to supporting dealers with promotions to stimulate demand amid elevated financing costs [4] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding potential interest rate relief, which could improve consumer sentiment [5] - The company is taking actions to preserve business health and is positioned for success when market demand improves [28] Other Important Information - The company remains debt-free and has accumulated significant cash, allowing for substantial cash returns to investors through dividends [23] - The upcoming Annual Conference in August will celebrate the Chaparral brand's 60th anniversary and is expected to generate enthusiasm for new models [6][7] Q&A Session Summary Question: Can you talk about the cadence of retail throughout the quarter and the drop in June? - Management noted that they did not see a significant unusual change in sales cadence and that field inventory had declined [30][37] Question: What are you hearing from dealers regarding their appetite for new model year units? - Management indicated that dealers are cautious due to existing inventory but are expected to place more orders during the upcoming Dealer Conference [41][44] Question: Is there a possibility for more aggressive promotions? - Management stated that they are comfortable with the current promotion levels and will continue to support sales [46] Question: What data points would give confidence to return production to a more normalized level? - Management emphasized that it will depend on dealer projections and overall inventory status as they work collaboratively to smooth production [49][50] Question: What is the current M&A environment? - Management expressed interest in M&A but noted a lack of good opportunities in the current market [52][53]