Marine Products Corp., the builder of Chaparral and Robalo boats, had first-quarter net sales of $693 million, a decrease of 42% year-over-year. Net income was down $4.6 million, a 60% decline, and diluted earnings per share were $0.13. Net income margin decreased 310 basis points to 6.6%.
“First quarter results are indicative of a normalization of the elevated post-pandemic demand we were experiencing during the first quarter of last year, with year-over-year financial comparisons remaining unfavorable,” president and CEO Ben M. Palmer said in a statement. “Our industry continues to navigate an uncertain demand environment and high inventory levels in the retail channel across many boat categories.
“In addition, higher interest rates versus last year have increased financing costs for consumers and increased floorplan carrying costs for dealers, curbing our order flow and retail sell-through,” he added. “We have worked diligently to support our dealers by implementing retail incentive programs and modifying boat-production schedules to help manage channel inventory, and we have adjusted our cost structures.”
Gross profit of $14 million was down 52% from the previous year, and gross margin was 20.2%, down 420 basis points. The year-over-year change in gross margin reflected lower sales volumes and associated manufacturing cost inefficiencies, coupled with the impact of higher retail incentive costs.
Palmer said the company was encouraged by spring boat shows, as the trend of larger, higher-priced boats selling better than smaller boats that need to be financed continued.
The company said the board has approved a special dividend payable during the second quarter, returning approximately $24 million to investors, in addition to the approximately $5 million through a regular quarterly dividend.
