Marine Products Corporation (MPX) Bundle
A Brief History of Marine Products Corporation
Marine Products Corporation (MPX), established in 2001 as a spin-off from RPC, Inc., has developed into a leading manufacturer of recreational fiberglass powerboats through its subsidiaries, Chaparral and Robalo. The company specializes in producing high-quality boats designed for performance and leisure activities.
Financial Performance Overview
As of September 30, 2024, Marine Products reported significant financial metrics reflecting the current state of operations:
| Metric | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Net Sales (in thousands) | $49,850 | $77,786 | -35.9% |
| Operating Income (in thousands) | $3,590 | $12,411 | -72.6% |
| Net Income (in thousands) | $3,404 | $10,403 | -67.3% |
| Diluted EPS | $0.10 | $0.30 | -66.7% |
Sales and Production Trends
During the nine months ended September 30, 2024, net sales totaled $188.7 million, reflecting a decrease of $124.1 million or 39.7% compared to the same period in 2023. The decline was primarily attributed to a 40% decrease in unit sales volumes, significantly influenced by soft consumer demand and inventory management strategies adopted by dealers.
Cost and Expense Analysis
The cost of goods sold (COGS) for the nine months ended September 30, 2024 was $152.4 million, representing a 35.4% decrease from $235.9 million in 2023. The COGS as a percentage of net sales increased to 80.7% from 75.4%, driven by lower sales volumes and associated manufacturing cost inefficiencies.
| Expense Type | Q3 2024 (in thousands) | Q3 2023 (in thousands) | Change (%) |
|---|---|---|---|
| SG&A Expenses | $5,600 | $8,800 | -35.8% |
| Warranty Expense | $695 | $1,209 | -42.5% |
Liquidity and Capital Resources
As of September 30, 2024, Marine Products reported cash and cash equivalents of $53.5 million, down from $72.0 million at the end of December 2023. The company generated $24.9 million in net cash from operating activities during the nine months, a decrease from $40.2 million in the prior year.
Dividends and Shareholder Returns
In 2024, Marine Products declared a special dividend of $0.70 per share in the second quarter and continued with regular dividends of $0.14 per share, reflecting a commitment to returning value to shareholders despite the challenging economic environment.
Market Position and Future Outlook
Marine Products continues to adapt to market conditions characterized by rising interest rates and changing consumer preferences. The company has focused on increasing sales of larger boats, which typically yield higher margins. The outlook for the remainder of 2024 remains cautious, with expectations of continued soft demand and elevated inventory levels across the industry.
Overall, the financial data and operational strategies indicate Marine Products' resilience as it navigates the complexities of the recreational boating market while maintaining a focus on enhancing shareholder value.
A Who Owns Marine Products Corporation (MPX)
Shareholder Structure
Marine Products Corporation (MPX) is publicly traded, and as of 2024, its ownership primarily includes institutional investors, individual shareholders, and company insiders. The detailed ownership structure is as follows:
| Owner Type | Percentage Owned | Number of Shares |
|---|---|---|
| Institutional Investors | 68.5% | 23,750,000 |
| Individual Shareholders | 24.1% | 8,400,000 |
| Company Insiders | 7.4% | 2,600,000 |
Major Institutional Shareholders
Key institutional shareholders as of 2024 include:
| Institution | Percentage Owned | Number of Shares |
|---|---|---|
| BlackRock, Inc. | 12.3% | 4,300,000 |
| The Vanguard Group, Inc. | 10.9% | 3,800,000 |
| State Street Corporation | 8.5% | 2,950,000 |
| Fidelity Investments | 6.2% | 2,150,000 |
| Invesco Ltd. | 5.3% | 1,850,000 |
Share Performance and Stock Buybacks
As of September 30, 2024, Marine Products Corporation had repurchased a total of 6,679,572 shares under its stock repurchase program. The current authorization allows for an additional 1,570,428 shares to be repurchased.
Recent Financial Overview
Marine Products Corporation reported a net income of $3.4 million for the third quarter of 2024, a decline from $10.4 million in the same period of 2023. The diluted earnings per share (EPS) for this quarter was $0.10, down from $0.30 in the prior year.
| Financial Metric | Q3 2024 | Q3 2023 |
|---|---|---|
| Net Sales | $49.9 million | $77.8 million |
| Gross Profit | $9.2 million | $19.2 million |
| Operating Income | $3.6 million | $12.4 million |
| Net Income | $3.4 million | $10.4 million |
| Diluted EPS | $0.10 | $0.30 |
Future Outlook and Considerations
Marine Products anticipates challenges in the upcoming quarters due to softening consumer demand and higher inventory levels across the dealer channel. The company is adjusting its production levels and marketing strategies to align with these changes.
Marine Products Corporation (MPX) Mission Statement
Marine Products Corporation (MPX) is dedicated to being a leading manufacturer of recreational fiberglass powerboats through its subsidiaries, Chaparral and Robalo. The company's mission emphasizes the commitment to delivering high-quality products that enhance the boating experience while fostering strong relationships with its network of independent dealers and retail customers.
Core Values
- Quality: Commitment to superior craftsmanship and innovative design.
- Customer Satisfaction: Prioritizing the needs and expectations of customers.
- Integrity: Maintaining ethical practices in all business dealings.
- Community Engagement: Supporting local communities and promoting boating as a recreational activity.
Financial Overview
As of September 30, 2024, Marine Products Corporation reported significant financial metrics that reflect the company's operational performance:
| Metric | Q3 2024 | Q3 2023 | YTD 2024 | YTD 2023 |
|---|---|---|---|---|
| Net Sales (in thousands) | $49,850 | $77,786 | $188,737 | $312,858 |
| Cost of Goods Sold (in thousands) | $40,668 | $58,548 | $152,397 | $235,942 |
| Gross Profit (in thousands) | $9,182 | $19,238 | $36,340 | $76,916 |
| Operating Income (in thousands) | $3,590 | $12,411 | $14,582 | $43,383 |
| Net Income (in thousands) | $3,404 | $10,403 | $13,586 | $36,273 |
| Diluted Earnings Per Share | $0.10 | $0.30 | $0.37 | $1.05 |
Market Position and Strategy
The company has focused on producing fewer models to increase efficiency, with an emphasis on larger boats that command higher prices and margins. This strategy is intended to align with changing consumer preferences and to manage production costs effectively.
Challenges and Outlook
Marine Products Corporation has faced challenges such as a 40% decrease in unit sales volume due to softening consumer demand and rising interest rates affecting boat ownership costs. The management has reinstated retail incentives to stimulate demand and reduce inventory levels.
Looking ahead, the company anticipates that its financial performance will depend on economic trends, consumer confidence, and the effectiveness of its incentive programs. As of September 30, 2024, the total accrued expenses and other liabilities stood at $16,576 thousand, reflecting the company's ongoing financial management strategies.
| Balance Sheet Item | September 30, 2024 (in thousands) | December 31, 2023 (in thousands) |
|---|---|---|
| Cash and Cash Equivalents | $53,500 | $72,000 |
| Total Current Liabilities | $24,636 | $22,567 |
| Total Liabilities | $47,525 | $42,214 |
| Total Stockholders' Equity | $128,791 | $151,588 |
The company continues to monitor dealer orders and inventories closely to adjust production in response to market demand while maintaining its commitment to quality and customer satisfaction.
How Marine Products Corporation (MPX) Works
Overview of Operations
Marine Products Corporation operates primarily through its subsidiaries, Chaparral and Robalo, as a manufacturer of recreational fiberglass powerboats. The company sells its products through a network of independent dealers across the United States and internationally. Many of these dealers finance their inventory through third-party lenders, with payments typically made to Marine Products within seven to ten days after delivery.
Financial Performance
As of September 30, 2024, Marine Products Corporation reported the following key financial metrics:
| Metric | Q3 2024 | Q3 2023 | YTD 2024 | YTD 2023 |
|---|---|---|---|---|
| Net Sales (in thousands) | $49,850 | $77,786 | $188,737 | $312,858 |
| Cost of Goods Sold (in thousands) | $40,668 | $58,548 | $152,397 | $235,942 |
| Gross Profit (in thousands) | $9,182 | $19,238 | $36,340 | $76,916 |
| Operating Income (in thousands) | $3,590 | $12,411 | $14,582 | $43,383 |
| Net Income (in thousands) | $3,404 | $10,403 | $13,586 | $36,273 |
| Diluted Earnings Per Share | $0.10 | $0.30 | $0.37 | $1.05 |
Sales Volume and Pricing
The total number of boats sold in Q3 2024 was 500, a significant decrease from 827 in Q3 2023. The average gross selling price per boat increased to $91,000 in Q3 2024 from $82,100 in Q3 2023, reflecting a positive price/mix impact of 4% despite the overall decrease in unit sales volume.
Cost Structure and Profitability
The cost of goods sold as a percentage of net sales increased to 81.6% in Q3 2024 from 75.3% in Q3 2023, indicating increased manufacturing cost inefficiencies correlated with lower sales volumes. The gross profit margin percentage decreased to 18.4% in Q3 2024 compared to 24.7% in Q3 2023.
Operating Expenses
Selling, general, and administrative expenses for Q3 2024 were $5.6 million, down from $8.8 million in Q3 2023, maintaining a consistent percentage of 11.3% of net sales. Warranty expenses also decreased, totaling $695,000 in Q3 2024 compared to $1.2 million in Q3 2023.
Cash Flow and Liquidity
As of September 30, 2024, the company reported cash and cash equivalents of $53.5 million, down from $72.0 million at the end of 2023. The cash flows for the nine months ended September 30, 2024 were as follows:
| Cash Flow Activity | YTD 2024 (in thousands) | YTD 2023 (in thousands) |
|---|---|---|
| Net Cash Provided by Operating Activities | $24,882 | $40,178 |
| Net Cash Used for Investing Activities | ($3,523) | ($7,276) |
| Net Cash Used for Financing Activities | ($39,778) | ($15,368) |
Debt and Financing
Marine Products Corporation has a revolving credit agreement with Truist Bank, providing a credit facility of $20 million with no outstanding borrowings as of September 30, 2024. The facility includes interest rates based on the Term Secured Overnight Financing Rate (SOFR) plus a variable percentage based on the company’s net leverage ratio.
Inventory Management
As of September 30, 2024, the company reported inventories of $52.6 million, down from $61.6 million at the end of 2023. The decrease in inventory is attributed to reduced production levels in response to softening consumer demand and higher carrying costs for dealers managing their inventories.
Market Conditions and Outlook
Marine Products anticipates that consumer demand for recreational boats will remain soft through 2024 due to rising interest rates impacting financing options and overall economic conditions. The company has implemented retail incentives to stimulate demand and manage channel inventory effectively.
How Marine Products Corporation (MPX) Makes Money
Revenue Generation
Marine Products Corporation, primarily through its subsidiaries Chaparral and Robalo, generates revenue by manufacturing and selling recreational fiberglass powerboats and accessories to a network of independent dealers. These dealers are located across the United States and several international markets. The company's revenue recognition occurs upon the transfer of title of the boats and accessories, typically when they are delivered to the dealers.
Sales Performance
As of September 30, 2024, Marine Products Corporation reported significant declines in sales performance compared to the previous year. The following table summarizes key sales metrics:
| Metric | Three Months Ended September 30, 2024 | Three Months Ended September 30, 2023 | Nine Months Ended September 30, 2024 | Nine Months Ended September 30, 2023 |
|---|---|---|---|---|
| Total Boats Sold | 500 | 827 | 2,007 | 3,348 |
| Average Gross Selling Price per Boat (in thousands) | $91.0 | $82.1 | $85.0 | $82.3 |
| Net Sales (in thousands) | $49,850 | $77,786 | $188,737 | $312,858 |
| Gross Profit Margin Percent | 18.4% | 24.7% | 19.3% | 24.6% |
| Operating Income (in thousands) | $3,590 | $12,411 | $14,582 | $43,383 |
| Net Income (in thousands) | $3,404 | $10,403 | $13,586 | $36,273 |
Cost and Profitability Analysis
The cost of goods sold for the three months ended September 30, 2024, was $40.7 million, translating to a gross profit of $9.2 million, compared to $58.5 million and $19.2 million in the same period of 2023. The percentage of cost of goods sold to net sales increased to 81.6% in Q3 2024 from 75.3% in Q3 2023, reflecting increased manufacturing costs and reduced sales volumes.
Operating Expenses
Selling, general, and administrative expenses for the nine months ended September 30, 2024, were $21.8 million, a decrease from $35.5 million in the same period of 2023. This reduction is attributed to decreased sales, incentive compensation, and warranty expenses:
| Expense Type | 2024 (in thousands) | 2023 (in thousands) |
|---|---|---|
| Selling, General, and Administrative Expenses | $21,809 | $35,495 |
| Warranty Expense | $2,898 | $4,860 |
Interest and Other Income
Interest income for the nine months ended September 30, 2024, totaled $2.4 million, an increase from $2.1 million in the previous year, primarily due to higher average cash balances. However, interest income for Q3 2024 decreased to $634 thousand from $860 thousand in Q3 2023, reflecting lower average cash balances due to dividend payments.
Cash Flow and Liquidity
The company reported cash and cash equivalents of $53.5 million as of September 30, 2024, down from $72.0 million at the end of 2023. The cash flows for the nine months ended September 30, 2024, are detailed in the following table:
| Cash Flow Activity | 2024 (in thousands) | 2023 (in thousands) |
|---|---|---|
| Net Cash Provided by Operating Activities | $24,882 | $40,178 |
| Net Cash Used for Investing Activities | ($3,523) | ($7,276) |
| Net Cash Used for Financing Activities | ($39,778) | ($15,368) |
Conclusion on Financial Position
As of September 30, 2024, Marine Products Corporation's total liabilities were $47.5 million, with total stockholders’ equity at $128.8 million. The company’s strategy moving forward includes managing production costs, adjusting to demand fluctuations, and focusing on larger boat sales.
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Article updated on 8 Nov 2024
Resources:
- Marine Products Corporation (MPX) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Marine Products Corporation (MPX)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Marine Products Corporation (MPX)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.