MPC reports Q4 drop in net sales

Marine Products Corp (MPC), the parent company of Chaparral and Robalo boats, reported Q4 2018 net sales of just over US$62m, down 5.4% from the previous year which the company says is due to a decline in international sales due to the Trump administration tariffs.

“Marine Products’ US domestic sales declined slightly during the fourth quarter of 2018 compared to the prior year,” said CEO Rick Hubbell in a statement. “However, our international sales decreased by more than 50% compared to the prior year, to 3.2% of total sales, due in large part to the impact of trade tariffs that were enacted during 2018.”

Gross profit for the quarter was US$13m, down 9.4% from the previous year. An 18 % decline in boats sold was slightly offset by a 14% increase in the average selling price per unit. Operating profit for the quarter was $6m, a decrease of 19.5%.

Labour costs also negatively contributed to quarter; gross margin as a percentage of net sales was 21% in the fourth quarter, compared to 21.9% last year. The company attributed that decrease to production inefficiencies.

“During the quarter, we continued our regular quarterly cash dividend and declared a year-end cash dividend that was twice as high as the dividend declared at year-end 2017. Marine Products’ total per-share dividends during 2018 were more than 50% higher than the dividends declared during 2017, and the highest dividends per share declared by the company since 2012. In addition, we accomplished our highest share repurchase of 2018 during the fourth quarter. We finished the year with $16.4m in cash and marketable securities, a decrease of $4.3m compared with the fourth quarter of last year,” Hubbell said.