Marine Products(US:MPX)2020-04-29 17:18Financial Data and Key Metrics Changes - Net sales for Q1 2020 were $59.1 million, a 28.8% decrease compared to Q1 2019 [9] - Unit sales declined by 28.9% during the quarter [9] - Gross profit for Q1 2020 was $12.1 million, a decrease of 35.3% compared to Q1 2019 [9] - Gross margin decreased to 20.5% from 22.5% in Q1 2019 due to manufacturing cost inefficiencies [9] - Net income for Q1 2020 was $4.2 million, a decrease of 43.7% compared to $7.5 million in Q1 2019 [10] - Diluted earnings per share were $0.12, down from $0.22 in Q1 2019 [11] - Cash balance at the end of Q1 2020 was $20.1 million, an increase of $1.7 million compared to $18.3 million at the end of Q1 2019 [11] Business Line Data and Key Metrics Changes - Dealer inventories declined by almost 10% by the end of Q1 2020 compared to the prior year [4][11] - The company temporarily suspended manufacturing operations at the end of March due to COVID-19 [5] Market Data and Key Metrics Changes - International sales decreased by 44.6%, accounting for 5.7% of total sales [11] - Sales to Canadian dealers decreased moderately, while sales to other international markets decreased significantly [11] Company Strategy and Development Direction - The company plans to resume production in early May 2020 after a temporary shutdown [5][13] - The company is focused on managing dealer inventories and backlog as production resumes [11] - The management believes in the long-term appeal of recreational boating, noting increased web traffic and social media engagement [13] Management's Comments on Operating Environment and Future Outlook - Management acknowledged unprecedented business challenges due to COVID-19 but noted strong sales reported by some dealers in March and April [13] - The company is optimistic about demand for recreational boating as families seek outdoor activities [13] - Management is working on communication with employees and assisting them with unemployment filings during the shutdown [22][23] Other Important Information - The board declared a regular quarterly dividend of $0.08 per share, a reduction of $0.04 compared to the previous quarter [6] Q&A Session Summary Question: Impact of plant shutdown on Q2 production levels - Management indicated it is difficult to predict the exact impact but plans to ramp up production as quickly as possible [20] Question: Process of bringing employees back and ramping in H2 - Management is in communication with employees and assisting them with unemployment filings, but the process of bringing them back will be complex [22][23] Question: Dealer reactions to the current demand environment - Management noted that dealers are generally holding firm on pricing and not experiencing significant discounting, with inventories in good shape [24][26]