Marine Products Corporation reports sales decrease for Q4 | Boating Industry
Marine Products Corporation, manufacturer of Chaparral and Robalo boats, announced its unaudited results for the fourth quarter and full year ended December 31, 2023.
The company reported net sales for Q4 were $70.9 million, down 35%, which the company said was primarily due to a 34% decrease in the number of boats sold during the quarter. A 4% increase in gross average selling price was offset by higher retail incentives for a new program announced during the quarter. The company believes net sales have also been impacted by a normalization of high post-COVID demand and higher interest rates. Higher rates impact financing costs for consumers, as well as inventory carrying costs for dealers. Management also believes that while boat production and sales have stabilized, year-over-year comparisons will likely remain soft in the near term.
“Our fourth quarter results reflect soft retail boat demand for the second consecutive quarter as the industry has normalized from elevated post-COVID demand,” stated Ben M. Palmer, Marine Products’ president and CEO. “While the boating market has added new retail customers since 2020, the industry has recently been grappling with economic uncertainty, rising interest rates and generally higher levels of dealer inventory. Beginning in the third quarter of 2023, we adjusted our production schedules, variable cost structure, and retail incentive programs to align with reset volume expectations. We are comfortable with the level of our product in field inventories and excited about our new 2024 product launches, but we are prepared for near-term industry softness and overall channel de-stocking. In this environment, we will focus on product innovation, maximize our dealer relationships, and aggressively manage costs. We look forward to the winter boat shows in the next few weeks as an opportunity to showcase our newest products and gauge retail demand ahead of the 2024 retail selling season.”
For its full-year results in 2023, Marine Products Corporation reported a net sales increase of 1% year-over-year to $383.7 million. Similarly, net income was also up for the year, up 3% year-over-year at $41.7 million.
“We generated strong cash flow in 2023, and our balance sheet now boasts over $70 million in cash. We will continue to pay an attractive dividend, while evaluating potential acquisitions to increase our scale and options to return additional capital to our shareholders,” concluded Palmer.
