Marine Products Corporation, the parent of the Chaparral and Robalo boat brands, generated net sales of $77.8 million in the third quarter, a 22 percent decrease compared to $100.1 million in the third quarter last year. The decrease in net sales was said to be primarily due to a 24 percent decrease in the number of boats sold during the quarter, partially offset by a five percent increase in average selling prices.
Average selling price per boat increased primarily due to a favorable model mix and, to a lesser extent, price increases to cover higher costs of materials and components.
Unit sales decreased in the quarter compared to the prior-year quarter as production was adjusted to align more with current demand, including seasonally lower dealer demand during the third quarter of each calendar year. In addition, unit sales were reportedly impacted during the quarter by severe weather-related production shutdowns.
Third quarter gross margin was 24.7 percent of net sales, compared to 25.0 percent in the prior-year period.
SG&A expenses were $8.8 million in the third quarter, compared to $10.3 million in the third quarter of 2022. The decrease in SG&A expenses was due to costs that vary with sales and profitability, such as incentive compensation, sales commissions and warranty expense. These expenses were 11.3 percent of net sales in the third quarter of 2023 compared to 10.3 percent in the third quarter of 2022.
Operating income for the quarter was $12.4 million, a 15 percent decrease compared to operating profit of $14.7 million in the third quarter last year.
Net gain on the disposition of assets was $2.0 million during the quarter, which includes $1.8 million related to a real estate transaction. Net interest income of $860 thousand increased significantly compared to the prior year due to a higher cash balance and higher interest yields.
EBITDA for the quarter was $13.0 million, a decrease of 14 percent, compared to $15.2 million in the third quarter of 2022. EBITDA as a percentage of net sales was 16.7 percent in the third quarter of 2023 as compared to 15.1 percent in the prior year period.
Net income for the third quarter was $10.4 million, a decrease of 9 percent compared to net income of $11.5 million in the third quarter of 2022. Net income as a percentage of net sales was 13.4 percent in the third quarter of 2023 as compared to 11.5 percent in the prior year period.
Diluted earnings per share in Q3 were 30 cents, a decrease of 12 percent compared to 34 cents in Q3 last year.
The effective tax rate was 21.6 percent in the third quarter of 2023 compared to 22.3 percent in the third quarter of 2022.
“Our third quarter results reflect the reduction in production and delivery rates due to the normalization of retail boat demand that has occurred during 2023, following significant post-COVID demand. In addition, our production in the third quarter was adversely impacted by Hurricane Idalia,” stated Ben M. Palmer, president and CEO of Marine Products. “We were pleased with the orders placed during our annual dealer conference in August. Dealer inventories are reasonable by historical standards and remain below pre-pandemic levels, and we have firm production scheduled into 2024. We, along with our dealers, will reassess retail demand during the winter boat shows. While we are still experiencing some delays in timely receipts of certain components used in our manufacturing operations, these issues are less of a problem than earlier this year.”
Photo courtesy Marine Products Corp.
