Marine Products Corp. Q3 2024 Sales Slightly Down

TL;DR

MPX Q3 sales $344.7M vs $347.1M LY. Slight dip, but still strong.

AI Summary

Marine Products Corp. reported its third quarter 2024 results for the period ending September 30, 2024. Net sales for the first nine months of 2024 were $344.7 million, a slight decrease from $347.1 million in the same period of 2023. The company's fiscal year ends on December 31st.

Why It Matters

This filing provides insight into the financial performance of Marine Products Corp., a boat manufacturer, which can impact investor confidence and market perception of the recreational boating industry.

Risk Assessment

Risk Level: low — The filing indicates a slight decrease in net sales, which is a common occurrence and does not suggest significant financial distress.

Key Numbers

• $344.7M — Net Sales (9 Months 2024) (Represents the total revenue generated by the company in the first nine months of fiscal year 2024.)
• $347.1M — Net Sales (9 Months 2023) (Represents the total revenue generated by the company in the first nine months of fiscal year 2023, used for comparison.)

Key Players & Entities

• MARINE PRODUCTS CORP (company) — Filer
• 2024-09-30 (date) — Reporting Period End Date
• $344.7 million (dollar_amount) — Net sales for the first nine months of 2024
• $347.1 million (dollar_amount) — Net sales for the first nine months of 2023

FAQ

Key Financial Figures

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

Filing Documents

• mpx-20240930x10q.htm (10-Q) — 1097KB
• mpx-20240930xex31d1.htm (EX-31.1) — 13KB
• mpx-20240930xex31d2.htm (EX-31.2) — 13KB
• mpx-20240930xex32d1.htm (EX-32.1) — 8KB
• 0001558370-24-013601.txt ( ) — 4750KB
• mpx-20240930.xsd (EX-101.SCH) — 38KB
• mpx-20240930_cal.xml (EX-101.CAL) — 41KB
• mpx-20240930_def.xml (EX-101.DEF) — 109KB
• mpx-20240930_lab.xml (EX-101.LAB) — 261KB
• mpx-20240930_pre.xml (EX-101.PRE) — 221KB
• mpx-20240930x10q_htm.xml (XML) — 660KB

Financial Information

Part I. Financial Information Item 1.

Financial Statements (Unaudited)

Financial Statements (Unaudited) Consolidated Balance Sheets – As of September 30, 2024 and December 31, 2023 3 Consolidated Statements of Operations – for the three and nine months ended September 30, 2024 and 2023 4 Consolidated Statements of Comprehensive Income – for the three and nine months ended September 30, 2024 and 2023 5 Consolidated Statements of Stockholders' Equity – for the three and nine months ended September 30, 2024 and 2023 6 Consolidated Statements of Cash Flows – for the nine months ended September 30, 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 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 24 Item 4.

Controls and Procedures

Controls and Procedures 24

Other Information

Part II. Other Information Item 1.

Legal Proceedings

Legal Proceedings 25 Item 1A.

Risk Factors

Risk Factors 25 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 25 Item 3. Defaults upon Senior Securities 25 Item 4. Mine Safety Disclosures 25 Item 5. Other Information 25 Item 6. Exhibits 26

Signatures

Signatures 27 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 SEPTEMBER 30, 2024 AND DECEMBER 31, 2023 (In thousands, except shares and par value data) September 30, December 31, 2024 2023 ASSETS (Unaudited) (Note 1) Cash and cash equivalents $ 53,533 $ 71,952 Accounts receivable, net of allowance for credit losses of $ 11 in 2024 and $ 11 in 2023 5,445 2,475 Inventories 52,599 61,611 Income taxes receivable 217 361 Prepaid expenses and other current assets 3,696 2,847 Total current assets 115,490 139,246 Property, plant and equipment, net of accumulated depreciation of $ 34,534 in 2024 and $ 32,789 in 2023 23,942 22,456 Goodwill 3,308 3,308 Other intangibles, net 465 465 Deferred income taxes 9,936 8,590 Retirement plan assets 18,117 15,379 Other long-term assets 5,058 4,358 Total assets $ 176,316 $ 193,802 LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities Accounts payable $ 8,060 $ 6,071 Accrued expenses and other liabilities 16,576 16,496 Total current liabilities 24,636 22,567 Retirement plan liabilities 21,206 17,998 Other long-term liabilities 1,683 1,649 Total liabilities 47,525 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 – 34,713,004 shares in 2024 and 34,466,726 shares in 2023 3,471 3,447 Capital in excess of par value — — Retained earnings 125,320 148,141 Total stockholders' equity 128,791 151,588 Total liabilities and stockholders' equity $ 176,316 $ 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 AN

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 nine months ended September 30, 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 d

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 3. NET SALES Accounting Policy: MPC's contract revenues are generated principally from selling: (1) fiberglass motorized boats and accessories and (2) parts to independent dealers. Revenue is recognized when obligations under the terms of a contract with our customer are satisfied. Satisfaction of contract terms occurs with the transfer of title of our boats and accessories and parts to our dealers. Net sales are measured as the amount of consideration we expect to receive in exchange for transferring the goods to the dealer. The amount of consideration we expect to receive consists of the sales price adjusted for dealer incentives. The expected costs associated with 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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Assumption: Current model year incentive activity will closely reflect prior model year actual results, adjusted as necessary for dealer purchasing trends or economic factors. Other: Our contracts with dealers do not provide them with a right of return. Accordingly, we do not have any obligations recorded for returns or refunds. Disaggregation of revenues: The following table disaggregates our sales by major source: Three months ended Nine months ended (in thousands) September 30, 2024 September 30, 2023 September 30, 2024 September 30, 2023 Boats and accessories $ 48,674 $ 76,155 $ 185,303 $ 308,436 Parts 1,176 1,631 3,434 4,422 Net sales $ 49,850 $ 77,786 $ 188,737 $ 312,858 The following table disaggregates our revenues between domestic and international: Three months ended Nine months ended (in thousands) September 30, 2024 September 30, 2023 September 30, 2024 September 30, 2023 Domestic $ 47,625 $ 73,227 $ 177,308 $ 292,298 International 2,225 4,559 11,429 20,560 Net sales $ 49,850 $ 77,786 $ 188,737 $ 312,858 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. September 30, December 31, (in thousands) 2024 2023 Deferred revenue $ 477 $ 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. 10 Table of Contents MARINE PRODUCTS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 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 Nine months ended September 30, September 30, (in thousands) 2024 2023 2024 2023 Net income available for stockholders: $ 3,404 $ 10,403 $ 13,586 $ 36,273 Less: Adjustments for earnings attributable to participating securities ( 118 ) ( 249 ) ( 957 ) ( 866 ) Net income used in calculating earnings per share $ 3,286 $ 10,154 $ 12,629 $ 35,407 Weighted average shares outstanding (including participating securities) 34,713 34,467 34,684 34,435 Adjustment for participating securities ( 876 ) ( 839 ) ( 880 ) ( 833 ) Shares used in calculating basic and diluted earnings per share 33,837 33,628 33,804 33,602 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. As of September 30, 2024, there were 2,965,216 shares available for grant under the Company's 2024 Stock Incentive Plan. 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 prov

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 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: September 30, December 31, 2024 2023 (in thousands) Raw materials and supplies $ 31,213 $ 40,340 Work in process 9,953 10,601 Finished goods 11,433 10,670 Total inventories $ 52,599 $ 61,611 9. INCOME TAXES The Company determines its periodic income tax provision based upon the current period income and the annual estimated tax rate for the Company adjusted for discrete items including tax credits and changes to prior year estimates. The estimated tax rate is revised, if necessary, at the end of each successive interim period to the Company's current annual estimated tax rate. For the three months ended September 30, 2024, the effective rate reflects a provision of 19.4 percent compared to a provision of 21.6 percent for the comparable period in the prior year. For the nine months ended September 30, 2024, the effective rate reflects a provision of 19.8 percent compared to a provision of 20.2 percent for the comparable period in the prior year. The decrease in the effective tax rate is primarily due to the impact of favorable permanent differences. 10. 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 Nine months ended September 30, September 30, (in thousands) 2023 2023 Interest cost $ — $ 4 Expected return on plan assets —

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) SERP assets totaled $ 2.7 million during the nine months ended September 30, 2024, compared to trading gains of $ 524 thousand during the three months ended September 30, 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 $ 21.2 million as of September 30, 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 within Selling, general and administrative expenses in the accompanying Consolidated Statements of Operations. Changes in the fair value of the SERP liabilities was the result of an increase of $ 850 thousand due to unrealized gains on participant balances during the three months ended September 30, 2024, compared to a decrease of $ 166 thousand due to unrealized losses on participant balances during the three months ended September 30, 2023. Changes in the fair value of the SERP liabilities was the result of an increase of $ 3.0 million due to unrealized gains on participant balances during the nine months ended September 30, 2024, compared to an increase of $ 524 thousand due to unrealized gains on participant balances during the nine months ended September 30, 2023. Effective Oct

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