Marine Products Corp. reports sales drop for Q2 | Boating Industry

Oct 16, 2024

Marine Products Corporation (MPC) recently announced its unaudited results for the second quarter ended June 30, 2024.

The company reported net sales were $69.5 million, down 40% in Q2. MPC said the decrease in net sales was primarily due to a 41% decrease in the number of boats sold during the quarter. Price/mix was up 1%, driven by higher gross selling prices. Sales continued to be impacted by dealer efforts to reduce their inventories, due in part to higher floor plan carrying costs, as well as lower consumer demand. The company believes its year-over-year comparisons will likely remain soft in the near term as the industry continues to normalize following high post-pandemic demand and dealers’ unwinding of channel inventory.

“We continue to navigate a challenging environment impacted by high inventory levels in the dealer channel relative to current demand,” stated Ben M. Palmer, Marine Products’ president and CEO. “Interest rates also remain relatively high, resulting in elevated floorplan carrying costs for our dealers and financing costs for consumers. We continue to support our dealers with aggressive promotions and extending these programs in a collaborative effort to spur sales and reduce channel inventories. Operationally, we have continued to right-size our production to align with dealer demand, implementing reduced work schedules and taking other cost reduction measures.”

MPC reported gross profit was $13.2 million, down 54%. Gross margin was 18.9%, down 580 basis points. The year-over-year gross margin change reflected lower sales volumes and associated manufacturing cost inefficiencies, coupled with the impact of reinstituting retail incentive programs. MPC noted that production schedules and labor costs have been adjusted to more closely align with current demand.

“Despite the uncertainties we face, we remain enthusiastic around our 2025 model year launch, with new models, features and colors. We are continuously gathering feedback and proactively driving innovation to make sure each model year includes fresh and exciting options and responds to dealer and consumer preferences. We are eagerly looking forward to our August dealer conference in south Florida to unveil the new lineup and features and celebrate Chaparral’s 60th anniversary with our dealer partners.”

“With no debt, strong cash generation, and more than $55 million in cash at the end of the second quarter, we can provide attractive tangible returns of capital through dividends while still leaving Marine Products with ample liquidity to pursue both organic growth investments and strategic acquisitions,” concluded Palmer.

MPC’s full Q2 results can be found on the Marine Products Corporation website.