Marine Products Corp Q1 2025: Lower sales and income amid weak demand
Marine Products Corporation has announced its unaudited financial results for the first quarter ended 31 March 2025. All comparisons are year-over-year to the first quarter of 2024 unless otherwise stated.
US-based Marine Products manufactures fibreglass boats under the brand names of Chaparral and Robalo.
Net sales for the first quarter are $59m, a decrease of 15 per cent. Net income is $2.2m, down 52 per cent, and diluted earnings per share (EPS) is $0.06. Net income margin declines 290 basis points to 3.7 per cent. Earnings before interest, taxes, depreciation and amortisation (EBITDA) is $3.4m, a reduction of 43 per cent, while EBITDA margin decreases by 270 basis points to 5.8 per cent.
Marine Products Corporation says these results reflect continued softness in marine industry demand and limited visibility due to macroeconomic uncertainties.
The company reports strong operating cash flow, minimal capital investment and ends the quarter with approximately $57.1m in cash and no debt.
“We started off 2025 with a continuation of challenging marine industry trends while we focused on supporting our dealers, managing inventories and controlling costs,” says Ben M. Palmer, Marine Products’ president and chief executive. “First quarter sales were down 15 per cent, reflecting lower volumes and hesitation from dealers to place orders in the current demand environment. However, first quarter sales were up 23 per cent sequentially versus the fourth quarter of 2024.
“Our field inventories are at a reasonable level, and we will begin working with our dealer network for model year 2026 introductions.
“It is likely we will take a conservative approach to the rollout and inventory management but still deliver innovative designs and enhanced features to maintain our leading reputation with our dealers and consumers.”
Palmer continues: “Beyond our specific industry, we are clearly seeing heightened uncertainty driven by tariff-related headlines. Potential boat component and materials cost increases would likely result in model price increases. In addition, a broader sense of economic uncertainty and risk aversion are likely to impact consumer spending. Further, the interest rate outlook has become less clear with respect to inflation and economic growth as the Fed navigates a dynamic backdrop.
“Facing limited visibility in this environment, Marine Products will manage with prudence and conservatism, as we always have. Our balance sheet remains strong, our capital needs are minimal and our strong cash position affords us the opportunity to make attractive strategic investments if the right opportunity arises.”
Net sales decline 15 per cent primarily due to a 19 per cent reduction in the number of boats sold, partially offset by a 4 per cent increase in price and product mix. Dealers continue to manage inventories tightly as consumer demand remains modest. The company notes that the year-over-year sales decline is less severe than the over 30 per cent quarterly decreases experienced during 2024. Field unit inventory at the end of the quarter is approximately 18 per cent lower than at the same point last year.
Gross profit decreases by 22 per cent to $11m, with gross margin down 160 basis points to 18.6 per cent. The reduction in gross margin primarily reflects the impact of lower sales volumes, although manufacturing cost controls partially offset the decline. Production schedules and labour costs are being adjusted in line with market demand, based on dealer orders and consumer feedback.
Selling, general and administrative (SG&A) expenses are $8.3m, down 5 per cent, and represent 14.1 per cent of net sales, an increase of 150 basis points compared to the previous year. Lower SG&A expenses are largely attributed to reductions in incentive compensation, sales commissions and warranty expenses, which vary with sales and profitability.
Interest income is $442,000, a decrease reflecting lower cash balances following the special dividend paid in the second quarter of 2024.
The income tax provision is $849,000, or 27.8 per cent of income before income taxes, up 320 basis points from the prior year.
Net income stands at $2.2m with diluted EPS of $0.06, down from $4.6m and $0.13, respectively, in the first quarter of 2024. Net income margin is 3.7 per cent, representing a decrease of 290 basis points.
EBITDA is $3.4m, compared with $5.9m the previous year, while the EBITDA margin declines by 270 basis points to 5.8 per cent.
At the end of the first quarter, cash and cash equivalents are $57.1m. The company has no borrowings under its $20m revolving credit facility. Net cash provided by operating activities and free cash flow are $10.8m and $10.7m respectively. Capital expenditures for the full year 2025 are expected to be approximately $3m.
Dividend payments total $4.9m during the first quarter. The board of directors declares a regular quarterly dividend of $0.14 per share, payable on 10 June 2025 to common stockholders of record at the close of business on 9 May 2025.
Marine Products Corporation will hold a conference call on 24 April 2025 at 8am. Eastern Time to discuss its first quarter results.
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