Marine Products(US:MPX)2024-04-25 15:14Financial Data and Key Metrics Changes - First quarter sales decreased by 42% to $69.3 million, driven by a 40% decrease in the number of units sold, with a negative price mix impact of 2% [31] - Gross profit decreased by 52% to $14 million, with a gross margin of 20.2%, down 420 basis points year-over-year [17] - EBITDA was $5.9 million, down from $15 million, with an EBITDA margin decreasing by 410 basis points to 8.5% [32] - Diluted EPS was $0.13, down from $0.34 in the previous year [8] Business Line Data and Key Metrics Changes - SG&A expenses were $8.7 million, down 40% or $5.8 million compared to the first quarter of last year, primarily due to costs that vary with sales and profitability [8] - The company is focusing on maintaining production levels appropriate to current demand, with a production scale back of around mid-30% below peak production rates in the first half of 2023 [28] Market Data and Key Metrics Changes - Retail incentives remain attractive, with positive sales trends observed among dealers, particularly for larger priced boats purchased by cash buyers [6] - Dealer inventory levels are still high, but the company is comfortable with its product levels in the dealer network [15][24] Company Strategy and Development Direction - The company is executing operational projects during the current slowdown to improve efficiencies and maintain production capabilities [5][52] - There is a focus on returning capital to investors through dividends, with a $0.14 per share regular quarterly dividend and a $0.70 per share special dividend approved [9][33] Management Comments on Operating Environment and Future Outlook - Management noted that the first quarter results showed stability on the top line and some improvement in profitability compared to the previous quarter, but year-over-year comparisons remain challenging [4] - The company is optimistic about the upcoming selling season and expects to see improvements in sales as the season progresses [22][36] Other Important Information - The company ended the first quarter with over $80 million in cash, indicating ample liquidity for future investments and strategic acquisitions [33] - The passing of the long-time Head of Investor Relations was acknowledged, highlighting the impact on the company [14] Q&A Session Summary Question: Can you provide insight on your production schedule for the rest of the year? - Management indicated they are comfortable with current production levels and are hopeful for an increase as new model years roll out [20][36] Question: What progress has been made regarding dealer inventory levels? - Management stated they are comfortable with their production rate relative to retail sales and are encouraged by improvements in sales as the season progresses [22][24] Question: Will promotions continue throughout the selling season? - Management confirmed that they expect incentive programs to remain in place for the next couple of quarters, adjusting as necessary [40] Question: How is the health of dealer partners amid recent news? - Management reported strong relationships with dealers, who are managing their businesses well despite high inventory levels [41]