Marine Products(US:MPX)2023-10-25 17:45Financial Data and Key Metrics Changes - Gross profit in Q3 2023 was $19.2 million, a 23% decrease compared to Q3 2022, with a gross margin of 24.7%, slightly down from 25% in the previous year [38] - Net sales for Q3 were $77.8 million, a 22% decrease year-over-year, with unit sales down by approximately 24% [43] - EBITDA for Q3 was $13 million, a 14% decrease from $15.2 million in Q3 2022, with EBITDA as a percentage of net sales at 16.7%, up from 15.1% in the prior year [44] - Net income for Q3 was $10.4 million, a 9% decrease compared to $11.5 million in Q3 2022, with diluted earnings per share at $0.30 compared to $0.34 last year [44] Business Line Data and Key Metrics Changes - Dealer inventories of Chaparral and Robalo models are healthy and below pre-pandemic levels, allowing dealers to meet current demand and purchase 2024 models [5][6] - The average selling price per boat increased by approximately 5% compared to the prior year, primarily due to a favorable model mix and price increases to cover higher costs [43] Market Data and Key Metrics Changes - International sales accounted for approximately 6% of total sales in Q3, decreasing by 12% compared to the same quarter last year [44] - The company’s market share remains strong, with Chaparral sterndrive market share ranked second in its size category, and the combination of Chaparral and Robalo outboards holding the third highest market share in their size category [30] Company Strategy and Development Direction - The company plans to manage production to align with retail demand over the coming quarters, ensuring dealers can service demand from planned inventory [5] - The launch of new 2024 models is expected to bolster dealer optimism, although there are concerns about potential economic slowdown and higher interest rates [10] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the level of field inventory and backlog supporting the current production schedule into 2024, despite acknowledging uncertainty in the market [31] - The upcoming winter boat shows are seen as critical for assessing demand and determining appropriate production rates moving forward [25] Other Important Information - The Board of Directors declared a regular quarterly cash dividend of $0.14 per share [11] - Production and sales were negatively impacted by about 3 days during Q3 due to Hurricane Idalia [38] Q&A Session Questions and Answers Question: What have you seen from a retail perspective as we head into the winter months? - Management noted that the past 30 days have not shown significant changes, with concerns about interest rates affecting dealer behavior [33] Question: Are you expecting a further reduction in production in Q4? - Management confirmed that production is scheduled based on dealer demand and seasonality, with no expected reduction in production for the next 2.5 months [21] Question: Can you quantify the average weeks on hand for your dealers right now? - Management indicated that dealers are currently carrying about two-thirds of the inventory levels compared to pre-pandemic, with higher carrying costs due to increased interest rates [27]