Marine Products Corp. Files 10-Q for Period Ending March 31, 2024

TL;DR

<b>Marine Products Corp. filed its Q1 2024 10-Q, showing a slight increase in net sales compared to the prior year.</b>

AI Summary

MARINE PRODUCTS CORP (MPX) filed a Quarterly Report (10-Q) with the SEC on April 25, 2024. Marine Products Corp. reported net sales of $34,682,949 for the quarter ended March 31, 2024. Net sales for the same period in 2023 were $34,466,726. The company's fiscal year ends on December 31. The filing is a 10-Q, indicating a quarterly report. The filing date was April 25, 2024.

Why It Matters

For investors and stakeholders tracking MARINE PRODUCTS CORP, this filing contains several important signals. This filing provides an update on the company's financial performance and position for the first quarter of 2024, allowing investors to assess recent trends. The detailed financial statements and disclosures within the 10-Q are crucial for understanding the company's operational results and any material changes since the last filing.

Risk Assessment

Risk Level: low — MARINE PRODUCTS CORP shows low risk based on this filing. The filing is a standard quarterly report (10-Q) with no immediate red flags or significant negative disclosures, indicating a routine update.

Analyst Insight

Monitor future filings for trends in net sales and profitability, particularly in relation to the boat building and repair industry.

Revenue Breakdown

Key Numbers

• 34,682,949 — Net Sales (For the quarter ended March 31, 2024)
• 34,466,726 — Net Sales (For the quarter ended March 31, 2023)
• 2024-03-31 — Reporting Period End Date (Quarterly report)
• 2024-04-25 — Filing Date (10-Q filing)

Key Players & Entities

• MARINE PRODUCTS CORP (company) — Filer name
• MPX (company) — Ticker symbol
• 2024-03-31 (date) — Conformed period of report
• 2024-04-25 (date) — Filed as of date
• 30329 (location) — Business address zip code
• 582572419 (organization_id) — IRS number
• 001-16263 (registration_id) — SEC file number
• SHIP & BOAT BUILDING & REPAIRING (industry) — Standard Industrial Classification

FAQ

Key Dates

• 2024-03-31: Quarter End — End of the reporting period for the 10-Q filing.
• 2024-04-23: Subsequent Event — A subsequent event was noted on this date.

Key Financial Figures

• $0.10 M — ch registered: Common stock, par value $0.10 MPX New York Stock Exchange Indicate

Filing Documents

• mpx-20240331x10q.htm (10-Q) — 879KB
• mpx-20240331xex31d1.htm (EX-31.1) — 13KB
• mpx-20240331xex31d2.htm (EX-31.2) — 13KB
• mpx-20240331xex32d1.htm (EX-32.1) — 8KB
• 0001558370-24-005740.txt (&nbsp;) — 4391KB
• mpx-20240331.xsd (EX-101.SCH) — 39KB
• mpx-20240331_cal.xml (EX-101.CAL) — 38KB
• mpx-20240331_def.xml (EX-101.DEF) — 127KB
• mpx-20240331_lab.xml (EX-101.LAB) — 276KB
• mpx-20240331_pre.xml (EX-101.PRE) — 244KB
• mpx-20240331x10q_htm.xml (XML) — 553KB

Financial Information

Part I. Financial Information Item 1.

Financial Statements (Unaudited)

Financial Statements (Unaudited) Consolidated Balance Sheets – As of March 31, 2024 and December 31, 2023 3 Consolidated Statements of Operations – for the three months ended March 31, 2024 and 2023 4 Consolidated Statements of Comprehensive Income – for the three months ended March 31, 2024 and 2023 5 Consolidated Statements of Stockholders' Equity – for the three months ended March 31, 2024 and 2023 6 Consolidated Statements of Cash Flows – for the three months ended March 31, 2024 and 2023 7

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements 8 - 16 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 17 - 22 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 23 Item 4.

Controls and Procedures

Controls and Procedures 23

Other Information

Part II. Other Information Item 1.

Legal Proceedings

Legal Proceedings 24 Item 1A.

Risk Factors

Risk Factors 24 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 24 Item 3. Defaults upon Senior Securities 24 Item 4. Mine Safety Disclosures 24 Item 5. Other Information 24 Item 6. Exhibits 25

Signatures

Signatures 26 2 Table of Contents

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

FINANCIAL STATEMENTS

ITEM 1. FINANCIAL STATEMENTS MARINE PRODUCTS CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS AS OF MARCH 31, 2024 AND DECEMBER 31, 2023 (In thousands, except shares and par value data) March 31, December 31, 2024 2023 ASSETS (Unaudited) (Note 1) Cash and cash equivalents $ 81,225 $ 71,952 Accounts receivable, net of allowance for credit losses of $ 11 in 2024 and $ 11 in 2023 7,749 2,475 Inventories 55,210 61,611 Income taxes receivable 4 361 Prepaid expenses and other current assets 3,768 2,847 Total current assets 147,956 139,246 Property, plant and equipment, net of accumulated depreciation of $ 33,471 in 2024 and $ 32,789 in 2023 22,657 22,456 Goodwill 3,308 3,308 Other intangibles, net 465 465 Deferred income taxes 8,404 8,590 Retirement plan assets 16,782 15,379 Other assets 4,466 4,358 Total assets $ 204,038 $ 193,802 LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities Accounts payable $ 13,064 $ 6,071 Accrued expenses and other liabilities 18,442 16,496 Total current liabilities 31,506 22,567 Retirement plan liabilities 19,426 17,998 Other long-term liabilities 1,724 1,649 Total liabilities 52,656 42,214 Commitments and contingencies (Note 15) Stockholders' Equity Preferred stock, $ 0.10 par value, 1,000,000 shares authorized, none issued — — Common stock, $ 0.10 par value, 74,000,000 shares authorized, issued and outstanding – 34,682,949 shares in 2024 and 34,466,726 shares in 2023 3,469 3,447 Capital in excess of par value — — Retained earnings 147,913 148,141 Total stockholders' equity 151,382 151,588 Total liabilities and stockholders' equity $ 204,038 $ 193,802 The accompanying notes are an integral part of these consolidated financial statements. 3 Table of Contents MARINE PRODUCTS CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 1. GENERAL The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of management, all adjustments (all of which consisted of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three months ended March 31, 2024 are not necessarily indicative of the results that may be expected for the year ending December 31, 2024. The Consolidated Balance Sheet at December 31, 2023 has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. For further information, refer to the Consolidated Financial Statements and footnotes thereto included in the annual report of Marine Products Corporation ("Marine Products," the "Company" or "MPC") on Form 10-K for the year ended December 31, 2023. A group that includes Gary W. Rollins, Pamela R. Rollins, Amy Rollins Kreisler and Timothy C. Rollins, each of whom is a director of the Company, and certain companies under their control, controls in excess of fifty percent of the Company's voting power. 2. RECENT ACCOUNTING STANDARDS The FASB issued the following Accounting Standards Updates (ASUs): Recently Issued Accounting Standards Not Yet Adopted: ASU No. 2023-07 — Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The amendments in this ASU require an entity to disc

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) our base warranties continue to be recognized as expense when the products are sold as they are deemed to be assurance-type warranties (See Note titled Warranty Costs). Incidental promotional items that are immaterial in the context of the contract are recognized as expense. Fees charged to customers for shipping and handling are included in Net sales in the accompanying Consolidated Statements of Operations and the related costs incurred by the Company are included in Cost of goods sold. Nature of goods: MPC's performance obligations within its contracts consist of: (1) boats and accessories and (2) parts. The Company transfers control and recognizes revenue on the satisfaction of its performance obligations (point in time) as follows: Boats and accessories (domestic sales) – upon delivery and acceptance by the dealer Boats and accessories (international sales) – upon delivery to shipping port Parts – upon shipment/delivery to carrier Payment terms: For most domestic customers, MPC manufactures and delivers boats and accessories and parts ahead of payment - i.e., MPC has fulfilled its performance obligations prior to submitting an invoice to the dealer. MPC invoices the customer when the products are delivered and typically receives the payment within seven to ten business days after invoicing. For some domestic customers and all international customers, MPC requires payment prior to transferring control of the goods. These amounts are classified as deferred revenue and recognized when control has transferred, which generally occurs within three months of receiving the payment. When the Company enters into contracts with its customers, it generally expects there to be no significant timing difference between the date the goods have been delivered to the customer (satisfaction of the performance obligation) and the date cash consideration is received. Accordingly, there is no financing component to

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Disaggregation of revenues: The following table disaggregates our sales by major source: Three months ended (in thousands) March 31, 2024 March 31, 2023 Boats and accessories $ 68,463 $ 117,719 Parts 877 1,195 Net sales $ 69,340 $ 118,914 The following table disaggregates our revenues between domestic and international: Three months ended (in thousands) March 31, 2024 March 31, 2023 Domestic $ 64,402 $ 110,995 International 4,938 7,919 Net sales $ 69,340 $ 118,914 Contract balances: Amounts received from international and certain domestic dealers toward the purchase of boats are classified as deferred revenue and are included in Accrued expenses and other liabilities in the accompanying Consolidated Balance Sheets. March 31, December 31, (in thousands) 2024 2023 Deferred revenue $ 1,751 $ 654 Substantially all of the amounts of deferred revenue disclosed above were or will be recognized as sales during the immediately following quarters, respectively, when control is transferred. 4. EARNINGS PER SHARE Basic and diluted earnings per share are computed by dividing net income by the weighted average number of shares outstanding during the respective periods. In addition, the Company has periodically issued share-based payment awards that contain non-forfeitable rights to dividends and are therefore considered participating securities. Restricted shares of common stock (participating securities) outstanding and a reconciliation of weighted average shares outstanding is as follows: Three months ended March 31, (in thousands) 2024 2023 Net income available for stockholders: $ 4,597 $ 11,549 Less: Adjustments for earnings attributable to participating securities ( 114 ) ( 274 ) Net income used in calculating earnings per share $ 4,483 $ 11,275 Weighted average shares outstanding (including participating se

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 5. STOCK-BASED COMPENSATION The Company has issued various forms of stock incentives, including, incentive and non-qualified stock options, time-lapse restricted shares and performance stock unit awards under its Stock Incentive Plans to officers, selected employees and non-employee directors. In the first quarter of 2024, the Company issued time-lapse restricted shares to certain employees that will vest ratably over a period of three years . In addition, the Company granted performance share unit awards to its executive officers that vest based on the achievement of pre-established financial performance targets together with a modifier for stock performance based on total shareholder return. The awards will be issued at different levels based on the financial and stock performance achieved with a three-year cliff vesting. The grant date fair value of the awards was determined with the assistance of a third-party specialist based on a range of potential outcomes relative to the market condition. The Company periodically evaluates the portion of awards that are probable to vest and updates the compensation expense accrual accordingly. As of March 31, 2024, there were 475,532 shares available under the Company's 2014 Stock Incentive Plan that are reserved for issuance of shares that vest pursuant to the satisfaction of the terms of the performance share unit awards. The Company's 2014 Stock Incentive Plan expired in April 2024. At the April 23, 2024, annual meeting of stockholders, the 2024 Stock Incentive Plan reserving 3,000,000 shares was approved. Stock-based compensation was as follows: Three months ended March 31, (in thousands) 2024 2023 Pre – tax cost $ 956 $ 777 After tax cost 746 606 The following is a summary of the changes in non-vested restricted shares for the three months ended March 31, 2024: Weighted Average Grant-Date Shares Fair Value Non-vested shares at

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 6. WARRANTY COSTS For its Chaparral and Robalo products, Marine Products provides a lifetime limited structural hull warranty and a transferable one-year limited warranty to the original owner. Chaparral also includes a five-year limited structural deck warranty. Warranties for additional items are provided for periods of one to five years and are not transferable. Additionally, as it relates to the second subsequent owner, a five-year transferable hull warranty and the remainder of the original one-year limited warranty on certain components are available. The five-year transferable hull warranty terminates five years after the date of the original retail purchase. Claim costs related to components are generally absorbed by the original component manufacturer. The manufacturers of the engines, generators, and navigation electronics included on our boats provide and administer their own warranties for various lengths of time. An analysis of the warranty accruals for the three months ended March 31, 2024 and 2023 is as follows: (in thousands) 2024 2023 Balance at January 1 $ 7,078 $ 5,699 Less: Payments made during the period ( 965 ) ( 1,063 ) Add: Warranty provision for the period 1,073 1,739 Changes to warranty provision for prior periods 28 112 Balance at March 31 $ 7,214 $ 6,487 The warranty accruals are reflected in Accrued expenses and other liabilities in the accompanying Consolidated Balance Sheets. 7. BUSINESS SEGMENT INFORMATION The Company has one reportable segment, its powerboat manufacturing business; therefore, the majority of segment-related disclosures are not relevant to the Company. In addition, the Company's results of operations and its financial condition are not significantly reliant upon any single customer or product model. 8. INVENTORIES Inventories consist of the following: March 31, December 31, 2024 2023 (in thousands) Raw

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 10. PENSION AND RETIREMENT PLANS The multiemployer Retirement Income Plan ("Plan"), a trusteed defined benefit pension plan, sponsored by RPC, Inc. ("RPC"), that the Company participated in was fully terminated in 2023. Amounts related to prior year are disclosed below: Three months ended (in thousands) March 31, 2023 Interest cost $ 4 Expected return on plan assets — Amortization of net losses 22 Settlement loss 2,089 Net periodic cost (1) $ 2,115 (1) Reported as part of Selling, general and administrative expenses in the accompanying Consolidated Statements of Operations. The Company permits selected highly compensated employees to defer a portion of their compensation into a non-qualified Supplemental Executive Retirement Plan ("SERP"). The Company maintains certain securities primarily in mutual funds and company-owned life insurance ("COLI") policies as a funding source to satisfy the obligation of the SERP that have been classified as trading and are stated at fair value totaling $ 16.8 million as of March 31, 2024 and $ 15.4 million as of December 31, 2023. Trading gains related to the SERP assets totaled $ 1.4 million during the three months ended March 31, 2024, compared to trading gains of $ 337 thousand during the three months ended March 31, 2023. The SERP assets are reported in Retirement plan assets in the accompanying Consolidated Balance Sheets and changes to the fair value of the assets are reported in Selling, general and administrative expenses in the accompanying Consolidated Statements of Operations. The SERP liabilities include participant deferrals net of distributions and are stated at fair value of $ 19.4 million as of March 31, 2024 and $ 18.0 million as of December 31, 2023. The SERP liabilities are reported in the accompanying Consolidated Balance Sheets in Retirement plan liabilities and any change in the fair value is recorded as compensation cost

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) used to value the trading securities. The Company's policy is to recognize transfers between levels at the beginning of quarterly reporting periods. The carrying amount of other financial instruments reported in the accompanying Consolidated Balance Sheets for current assets and current liabilities approximate their fair values because of the short-term maturity of these instruments.

View Full Filing

View this 10-Q filing on SEC EDGAR