ATLANTA, April 25, 2024 /PRNewswire/ -- Marine Products Corporation (NYSE: MPX) ("the Company"), a leading manufacturer of fiberglass boats, announced its unaudited results for the first quarter ended March 31, 2024. * Non-GAAP measures, including EBITDA, EBITDA margin, and free cash flow are reconciled to the most comparable GAAP measures in the appendices of this earnings release. * All comparisons are year-over-year to 1Q:23 unless stated otherwise. First Quarter 2024 Highlights Net sales decreased 42% year-over-year to $69.3 million Net income was $4.6 million, down 60% year-over-year, and diluted Earnings Per Share (EPS) was $0.13; net income margin decreased 310 basis points to 6.6% Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) was $5.9 million, down 61% year-over-year; EBITDA margin decreased 410 basis points to 8.5% Results reflected softer consumer demand and dealer ordering patterns due to higher interest rates and elevated channel inventory industry-wide, with difficult year-over-year comparisons to strong results in early 2023; the Company has taken steps to adjust production and costs The Board of Directors approved a regular quarterly dividend of $0.14 per share, as well as a special dividend of $0.70 per share, both payable during 2Q:24, returning an aggregate of approximately $29 million of cash to shareholders Management Commentary "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," stated Ben M. Palmer, Marine Products' President and Chief Executive Officer. "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 floor plan carrying costs for dealers, curbing our order flow and retail sell-through. 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 structure." "We were encouraged by the Spring boat shows and the excitement around our new products. Our larger, higher-priced boats sold relatively well, but challenges remain for consumers who rely on financing for their boat purchases. We are just now entering the Spring selling season and are optimistic about new boat sales." "In this current soft environment, we continue to take both operational and strategic steps to position the Company for long-term growth and positive shareholder returns. We are pleased to announce that our 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 our regular quarterly dividend. With no debt, strong cash generation, and more than $80 million in cash at the end of the first quarter, we can provide this attractive tangible return of capital while still leaving Marine Products with ample liquidity to pursue both organic growth investments and strategic acquisitions," concluded Palmer. 1Q:24 Consolidated Financial Results: Year-Over-Year Comparisons (versus 1Q:23) Net sales were $69.3 million, down 42%. The decrease in net sales was primarily due to a 40% decrease in the number of boats sold during the quarter. Price/mix was down 2%, reflecting retail incentives and lower average selling prices. Sales continued to be impacted by dealer efforts to reduce their inventories, due in part to higher floor plan carrying costs. The company believes its sales (as well as those of the broader marine industry) continue to normalize following the period of high post-pandemic demand, and that while boat production and sales have been stabilizing, year-over-year comparisons will likely remain soft in the near term. Gross profit was $14.0 million, down 52%. Gross margin was 20.2%, down 420 basis points. The year-over-year gross margin change reflected lower sales volumes and associated manufacturing cost inefficiencies, coupled with the impact of higher retail incentive costs. Gross margin increased, however, from the 19.0% reported in 4Q:23, when the Company disclosed the re-initiation of retail incentives. Production schedules and labor costs have been adjusted to more closely align with current demand. Selling, general and administrative expenses were $8.7 million, down 40%, generally in line with the sales decline, and represented 12.6% of net sales, up 40 basis points. 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. In addition, last year's first quarter results included a non-cash pension settlement charge of $2.1 million. Interest income of $851 thousand increased due to higher cash balances and interest rates. Income tax provision was $1.5 million, or 24.6% of income before income taxes. Net income and diluted EPS were $4.6 million and $0.13, respectively, down from $11.5 million and $0.34, respectively, in 1Q:23. Net income margin was 6.6%, down 310 basis points.  EBITDA was $5.9 million, down from $15.0 million; EBITDA margin was 8.5%, down 410 basis points. Balance Sheet, Cash Flow and Capital Allocation Cash and cash equivalents were $81.2 million at the end of 1Q:24, with no outstanding borrowings under the Company's $20 million revolving credit facility. Net cash provided by operating activities and free cash flow were $15.9 million and $15.0 million, respectively, in 1Q:24. Payment of dividends totaled $4.9 million in 1Q:24. The Board of Directors declared a regular quarterly dividend of $0.14 per share and a special dividend of $0.70 per share, both payable on June 10, 2024, to common stockholders of record at the close of business on May 10, 2024. Conference Call Information Marine Products Corporation will hold a conference call today, April 25, 2024, at 8:00 a.m. Eastern Time to discuss the results for the quarter. Interested parties may listen in by accessing a live webcast in the investor relations section of Marine Products' website at www.MarineProductsCorp.com. Additionally, the live conference call can be accessed by calling (888) 660-6357, or (929) 201-6127 for international callers, and using conference ID number 9979064. A replay will be available in the investor relations section of Marine Products' website beginning approximately two hours after the call. About Marine Products Marine Products Corporation is a leading manufacturer of high-quality fiberglass boats under the brand names Chaparral and Robalo. Chaparral's sterndrive models include SSi Sportboats and SSX Luxury Sportboats, and the SURF Series. Chaparral's outboard offerings include OSX Luxury Sportboats and the SSi Outboard Bowriders. Robalo builds an array of outboard sport fishing models, which include Center Consoles, Dual Consoles and Cayman Bay Boats. The Company continues to diversify its product lines through product innovation. With these premium brands, a solid capital structure, and a strong independent dealer network, Marine Products Corporation is prepared to capitalize on opportunities to increase its market share and generate superior financial performance to build long-term shareholder value. For more information on Marine Products Corporation visit our website at www.MarineProductsCorp.com. Forward Looking Statements Certain statements and information included in this press release constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements include statements that look forward in time or express management's beliefs, expectations or hopes. In particular, such statements include, without limitation: our belief that our industry continues to navigate an uncertain demand environment and high inventory levels in the retail channel across many boat categories; our efforts to support our dealers by implementing retail incentive programs and modifying boat production schedules to help manage channel inventory, and adjust our cost structure; statements regarding excitement around our new products, our plans to continue to take both operational and strategic steps to position the Company for long-term growth and positive shareholder returns; our belief that we have ample liquidity to continue pursuing both organic growth investments and potential strategic acquisitions; and our belief that our sales (as well as those of the broader marine industry) continue to normalize following the period of high post-pandemic demand, and that while boat production and sales have been stabilizing, year-over-year comparisons will likely remain soft in the near term. Risk factors that could cause such future events not to occur as expected include the following: supply chain disruptions may continue to delay the receipt of both raw materials and key components used in our manufacturing process, thus delaying production and deliveries to our dealers; negative economic conditions, unavailability of credit and possible decreases in the level of consumer confidence impacting discretionary spending; business interruptions due to adverse weather conditions, and increased interest rates. Additional factors that could cause the actual results to differ materially from management's projections, forecasts, estimates and expectations are contained in Marine Products' Annual Report on Form 10-K, filed with the U.S. Securities and Exchange Commission (the "SEC") for the year ended December 31, 2023. For information about Marine Products Corporation or this event, please contact: Michael L. SchmitChief Financial Officer(404) Mark Chekanow, CFAVice President, Investor Relations(404)   MARINE PRODUCTS CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands except per share data) Three Months Ended March 31,  2024 2023 (Unaudited) (Unaudited) Net sales $ 69,340 $ 118,914 Cost of goods sold 55,356 89,892 Gross profit 13,984 29,022 Selling, general and administrative expenses 8,742 14,533 Operating income 5,242 14,489 Interest income, net 851 483 Income before income taxes 6,093 14,972 Income tax provision 1,496 3,423