Marine Products' Net Income Plunges 33.6% Amid Sales Decline

TL;DR

**MPX's Q3 results are a red flag; net income and sales are sinking, signaling tough waters ahead for this boat manufacturer.**

AI Summary

MARINE PRODUCTS CORP (MPX) reported a significant decline in net income for the nine months ended September 30, 2025, falling to $9.018 million from $13.586 million in the prior year, a 33.6% decrease. This was primarily driven by a 4.7% drop in net sales to $179.848 million from $188.737 million, with boat and accessory sales decreasing by $9.397 million. Operating income also saw a substantial reduction, down 29.5% to $10.289 million from $14.582 million. Despite these declines, the company's total current assets increased to $140.712 million from $109.994 million at December 31, 2024, largely due to a rise in inventories to $61.463 million from $49.960 million. Cash and cash equivalents decreased by $4.976 million to $47.403 million. The company also saw a notable increase in accounts payable, rising to $13.036 million from $5.499 million, and retirement plan liabilities increased to $23.548 million from zero in current liabilities. Strategic outlook includes assessing new accounting standards for internal-use software and disaggregation of income statement expenses, effective in 2028 and 2027 respectively.

Why It Matters

This filing reveals a challenging period for Marine Products, with declining sales and profitability potentially signaling a softening demand in the recreational boat market. For investors, the 33.6% drop in net income and 29.5% fall in operating income are red flags, suggesting reduced shareholder value and potential pressure on future dividends. Employees might face job insecurity if the sales downturn persists, impacting the broader marine industry's employment landscape. Customers could see changes in product availability or pricing as the company navigates market shifts. Competitors in the powerboat manufacturing sector may also be experiencing similar headwinds, indicating a broader industry trend rather than an isolated company issue, making competitive positioning crucial.

Risk Assessment

Risk Level: high — The company's net income decreased by 33.6% to $9.018 million for the nine months ended September 30, 2025, compared to $13.586 million in the prior year. Additionally, net sales declined by 4.7% to $179.848 million from $188.737 million, indicating a significant downturn in core business performance and increased financial risk.

Analyst Insight

Investors should consider reducing exposure to MPX given the substantial decline in net income and sales, which points to weakening demand. Monitor inventory levels closely, as the increase to $61.463 million could signal oversupply or slowing sales velocity, potentially leading to future write-downs or discounting.

Financial Highlights

debt To Equity

0.42

revenue

$179,848,000

operating Margin

5.7%

total Assets

$179,452,000

total Debt

$23,548,000

net Income

$9,018,000

eps

$0.25

gross Margin

19.0%

cash Position

$47,403,000

revenue Growth

-4.7%

Revenue Breakdown

Key Numbers

• $9.018M — Net Income (9 months) (Decreased 33.6% from $13.586M in 2024)
• $179.848M — Net Sales (9 months) (Decreased 4.7% from $188.737M in 2024)
• $10.289M — Operating Income (9 months) (Decreased 29.5% from $14.582M in 2024)
• $0.25 — Diluted EPS (9 months) (Decreased from $0.37 in 2024)
• $61.463M — Inventories (Increased from $49.960M at Dec 31, 2024)
• $47.403M — Cash and Cash Equivalents (Decreased from $52.379M at Dec 31, 2024)
• $13.036M — Accounts Payable (Increased from $5.499M at Dec 31, 2024)
• $23.548M — Current Retirement Plan Liabilities (Increased from $0 at Dec 31, 2024)
• 34,999,034 — Common Stock Outstanding (As of October 24, 2025)
• 4.7% — Net Sales Decrease (Year-over-year for the nine months ended September 30, 2025)

Key Players & Entities

• MARINE PRODUCTS CORP (company) — registrant
• Amy R. Kreisler (person) — director of the Company
• Timothy C. Rollins (person) — director of the Company
• $9.018 million (dollar_amount) — Net income for nine months ended September 30, 2025
• $13.586 million (dollar_amount) — Net income for nine months ended September 30, 2024
• $179.848 million (dollar_amount) — Net sales for nine months ended September 30, 2025
• $188.737 million (dollar_amount) — Net sales for nine months ended September 30, 2024
• $10.289 million (dollar_amount) — Operating income for nine months ended September 30, 2025
• $14.582 million (dollar_amount) — Operating income for nine months ended September 30, 2024
• New York Stock Exchange (regulator) — exchange where common stock is registered

FAQ

Risk Factors

• Economic Downturn Impact on Consumer Demand [high — market]: A significant decline in net sales of 4.7% for the nine months ended September 30, 2025, driven by a $9.397 million decrease in boat and accessory sales, indicates potential sensitivity to economic conditions. Further economic slowdowns could exacerbate this trend, impacting discretionary spending on recreational products.
• Inventory Management Challenges [medium — operational]: Inventories increased by 22.9% to $61.463 million as of September 30, 2025, from $49.960 million at December 31, 2024. This build-up, coupled with declining sales, may suggest potential overstocking or slower inventory turnover, leading to increased carrying costs and risk of obsolescence.
• Increased Accounts Payable [medium — financial]: Accounts payable rose significantly to $13.036 million from $5.499 million at December 31, 2024. While this could indicate extended payment terms from suppliers, it also represents a short-term use of cash and an increase in immediate obligations.
• Retirement Plan Liabilities [medium — financial]: Retirement plan liabilities have emerged as a current liability of $23.548 million, compared to zero at December 31, 2024. This represents a substantial new obligation impacting current liabilities and cash flow needs.
• New Accounting Standards Adoption [low — regulatory]: The company is assessing new accounting standards for internal-use software (effective 2028) and disaggregation of income statement expenses (effective 2027). While not immediate, these require future compliance efforts and potential adjustments to financial reporting.

Industry Context

Marine Products Corporation operates in the recreational boat manufacturing industry. This sector is typically sensitive to consumer discretionary spending, economic conditions, and interest rates. Competition includes other boat manufacturers, and industry trends often involve innovation in design, fuel efficiency, and technology integration. The current environment appears to be one of slowing demand, as indicated by the company's sales decline.

Regulatory Implications

The company is subject to standard financial reporting regulations. Upcoming changes in accounting standards for internal-use software (2028) and expense disaggregation (2027) will require future compliance efforts and potential adjustments to financial disclosures.

What Investors Should Do

1. Monitor inventory levels and turnover ratios.
2. Analyze the drivers of the decline in boat and accessory sales.
3. Evaluate the impact of increased current liabilities.
4. Assess the company's response to market demand shifts.

Key Dates

• 2025-09-30: Nine months ended September 30, 2025 — Reported a 33.6% decrease in net income to $9.018 million and a 4.7% decrease in net sales to $179.848 million, reflecting a challenging operating period.
• 2025-10-24: Common Stock Outstanding — As of this date, 34,999,034 shares of common stock were outstanding, indicating a slight increase from the prior year.
• 2027-01-01: Disaggregation of Income Statement Expenses — Effective date for new accounting standard requiring additional disclosures on income statement expenses, impacting future reporting.
• 2028-01-01: Internal-Use Software Accounting — Effective date for new accounting standard related to capitalization of internal-use software development costs, requiring assessment and potential changes in accounting practices.

Glossary

Deferred revenue

Revenue that has been received by the company for goods or services that have not yet been delivered or rendered. It is recorded as a liability until earned. (The company had $1.180 million in deferred revenue as of September 30, 2025, which is expected to be recognized as sales in the following quarters.)

Participating securities

Securities, such as restricted stock awards, that have non-forfeitable rights to dividends and are therefore considered in the calculation of earnings per share. (These securities impacted the net income available for basic and diluted EPS calculation, reducing it by $386,000 for the nine months ended September 30, 2025.)

Operating income

A company's earnings before interest and taxes, reflecting the profitability of its core business operations. (Operating income decreased by 29.5% to $10.289 million for the nine months ended September 30, 2025, indicating a significant decline in operational profitability.)

Retirement plan assets

Investments held by a company to fund its employee retirement plans. (The company shows $20.305 million in retirement plan assets as of September 30, 2025, but also $23.548 million in current retirement plan liabilities, indicating a net unfunded status in current liabilities.)

Year-Over-Year Comparison

Compared to the prior year's nine-month period, Marine Products Corp. experienced a significant downturn. Net sales decreased by 4.7% to $179.848 million, primarily due to a $9.397 million drop in boat and accessory sales. This revenue decline, coupled with increased operating expenses, led to a substantial 29.5% reduction in operating income to $10.289 million and a 33.6% decrease in net income to $9.018 million. While total assets grew due to higher inventory levels, cash and cash equivalents decreased, and current liabilities saw a sharp increase, particularly in accounts payable and the introduction of current retirement plan liabilities.

Key Financial Figures

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

Filing Documents

• mpx-20250930x10q.htm (10-Q) — 1141KB
• mpx-20250930xex3d2.htm (EX-3.2) — 124KB
• mpx-20250930xex31d1.htm (EX-31.1) — 13KB
• mpx-20250930xex31d2.htm (EX-31.2) — 13KB
• mpx-20250930xex32d1.htm (EX-32.1) — 8KB
• 0001104659-25-104278.txt ( ) — 4887KB
• mpx-20250930.xsd (EX-101.SCH) — 34KB
• mpx-20250930_cal.xml (EX-101.CAL) — 42KB
• mpx-20250930_def.xml (EX-101.DEF) — 102KB
• mpx-20250930_lab.xml (EX-101.LAB) — 243KB
• mpx-20250930_pre.xml (EX-101.PRE) — 201KB
• mpx-20250930x10q_htm.xml (XML) — 684KB

Financial Information

Part I. Financial Information Item 1.

Financial Statements (Unaudited)

Financial Statements (Unaudited) Consolidated Balance Sheets – As of September 30, 2025, and December 31, 2024 3 Consolidated Statements of Operations – for the three and nine months ended September 30, 2025 and 2024 4 Consolidated Statements of Stockholders' Equity – for the three and nine months ended September 30, 2025 and 2024 5 Consolidated Statements of Cash Flows – for the nine months ended September 30, 2025 and 2024 6

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements 7 - 15 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 16 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 25 Item 4.

Controls and Procedures

Controls and Procedures 25

Other Information

Part II. Other Information Item 1.

Legal Proceedings

Legal Proceedings 26 Item 1A.

Risk Factors

Risk Factors 26 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 26 Item 3. Defaults upon Senior Securities 26 Item 4. Mine Safety Disclosures 26 Item 5. Other Information 26 Item 6. Exhibits 27

Signatures

Signatures 28 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, 2025, AND DECEMBER 31, 2024 (In thousands, except shares and par value data) September 30, December 31, 2025 2024 ASSETS (Unaudited) (Note 1) Cash and cash equivalents $ 47,403 $ 52,379 Accounts receivable, net 5,063 4,176 Inventories 61,463 49,960 Income taxes receivable 2,134 439 Retirement plan assets 20,305 — Prepaid expenses and other current assets 4,344 3,040 Total current assets 140,712 109,994 Property, plant and equipment, net 22,869 24,247 Goodwill 3,308 3,308 Other intangibles, net 465 465 Deferred income taxes 7,086 9,729 Retirement plan assets — 18,489 Other long-term assets 5,012 5,015 Total assets $ 179,452 $ 171,247 LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities Accounts payable $ 13,036 $ 5,499 Retirement plan liabilities 23,548 — Accrued expenses and other liabilities 14,848 13,425 Total current liabilities 51,432 18,924 Retirement plan liabilities — 21,667 Other long-term liabilities 1,764 1,653 Total liabilities 53,196 42,244 Commitments and contingencies (Note 14) 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 – 34,999,034 shares in 2025 and 34,707,304 shares in 2024 3,500 3,471 Capital in excess of par value — — Retained earnings 122,756 125,532 Total stockholders' equity 126,256 129,003 Total liabilities and stockholders' equity $ 179,452 $ 171,247 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 AND NINE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024 (In thousands

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, 2025 are not necessarily indicative of the results that may be expected for the year ending December 31, 2025. The Consolidated Balance Sheet at December 31, 2024 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, 2024. A group that includes Amy R. Kreisler and Timothy C. Rollins, each of whom is a director of the Company, certain of their family members, and certain companies under their and/or their family members' control, controls in excess of fifty percent of the Company's voting power. 2. RECENT ACCOUNTING STANDARDS Recently Issued Accounting Standards Update ("ASU") Not Yet Adopted: ASU 2025-06: Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software: This ASU updates existing g

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 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 the Company's arrangements with its customers. Significant judgments: Determining the transaction price The transaction price for MPC's boats and accessories is the invoice price adjusted for dealer incentives. Key inputs and assumptions in determining variable consideration related to dealer incentives include: Inputs: Current model year boat sales, tot

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 Nine months ended September 30, September 30, (in thousands) 2025 2024 2025 2024 Boats and accessories $ 52,016 $ 48,674 $ 175,906 $ 185,303 Parts 1,132 1,176 3,942 3,434 Net sales $ 53,148 $ 49,850 $ 179,848 $ 188,737 The following table disaggregates our revenues between domestic and international: Three months ended Nine months ended September 30, September 30, (in thousands) 2025 2024 2025 2024 Domestic $ 51,237 $ 47,625 $ 171,316 $ 177,308 International 1,911 2,225 8,532 11,429 Net sales $ 53,148 $ 49,850 $ 179,848 $ 188,737 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) 2025 2024 Deferred revenue $ 1,180 $ 191 Substantially all of the deferred revenue disclosed above has been or will be recognized as sales during the immediately following quarters, respectively, when control is transferred. 9 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 are as follows: Three months ended Nine months ended September 30, September 30, (in thousands) 2025 2024 2025 2024 Net income available for stockholders: $ 2,650 $ 3,404 $ 9,018 $ 13,586 Less: Adjustments for earnings attributable to participating securities ( 128 ) ( 118 ) ( 386 ) ( 957 ) Net income used in calculating earnings per share $ 2,522 $ 3,286 $ 8,632 $ 12,629 Weighted average shares outstanding (including participating securities) 34,999 34,713 34,954 34,684 Adjustment for participating securities ( 917 ) ( 876 ) ( 909 ) ( 880 ) Shares used in calculating basic and diluted earnings per share 34,082 33,837 34,045 33,804 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, 2025, there were 2,552,618 shares available for grant under the Company's 2024 Stock Incentive Plan, which has a 10-year term. In addition, there were 488,966 shares available under the 2014 Stock Incentive plan that are reserved for the potential vesting of performance stock unit awards granted in 2024 and 2023. 6. WARRANTY COSTS For its Chaparral and Robalo products, Marine Products provides a lifetime

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) The warranty accruals are reflected in Accrued expenses and other liabilities in the accompanying Consolidated Balance Sheets. 7. BUSINESS SEGMENT MPC has one reportable segment — its Powerboat Manufacturing business. The Chief Operating Decision Maker (CODM) makes resource allocation and performance assessment decisions based on this segment as a whole. MPC's CODM is the Chief Executive Officer. In addition, the Company's results of operations and its financial condition are not significantly reliant upon any single customer or product model. Significant segment expenses for the three and nine months ended September 30, 2025 and 2024 are shown in the following table: Three months ended Nine months ended September 30, September 30, (in thousands) 2025 2024 2025 2024 Materials $ 28,357 $ 26,158 $ 94,695 $ 99,369 Overhead 4,824 5,102 17,226 17,806 Labor costs 5,543 5,310 18,856 19,172 Other cost of goods sold (1) 4,196 4,098 14,981 16,050 Cost of goods sold $ 42,920 $ 40,668 $ 145,758 $ 152,397 Employment costs $ 4,720 $ 4,041 $ 13,487 $ 13,888 Warranty expense 1,237 695 3,226 2,898 Other selling, general and administrative expenses (2) 1,406 906 7,088 5,023 Selling, general and administrative expenses $ 7,363 $ 5,642 $ 23,801 $ 21,809 (1) Comprised primarily of accessories cost. (2) Includes professional fees, insurance, advertising and promotions, research and development and other costs . 8 . 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.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 9. INVENTORIES Inventories consist of the following: September 30, December 31, (in thousands) 2025 2024 Raw materials and supplies $ 33,657 $ 29,686 Work in process 16,278 9,950 Finished goods 11,528 10,324 Total inventories $ 61,463 $ 49,960 10. ACCRUED EXPENSES AND OTHER LIABILITIES Accrued expenses and other liabilities consist of the following: September 30, December 31, (in thousands) 2025 2024 Accrued payroll and related expenses $ 3,100 $ 1,668 Accrued sales incentives and discounts 1,832 3,110 Accrued warranty costs 6,062 6,228 Accrued insurance expenses 1,911 1,791 Deferred revenue 1,180 191 Other 763 437 Total accrued expenses and other liabilities $ 14,848 $ 13,425 11. RETIREMENT PLANS In the fourth quarter of 2024, the Board of Directors approved the termination of the Supplemental Executive Retirement Plan ("SERP"). Pursuant to the Internal Revenue Service rules, participant balances are required to be distributed between 12 and 24 months after termination. The Company currently plans to distribute the participant balances in the fourth quarter of 2025 through liquidation of all assets currently held in the Rabbi Trust and corporate funds. Retirement Plan assets and liabilities were classified as long-term on the balance sheet as of December 31, 2024 and were reclassed to short-term as of June 30, 2025 when the decision to liquidate the assets and distribute participant balances in the fourth quarter of 2025 was made. As of September 30, 2025, the Retirement plan assets and Retirement plan liabilities related to the SERP are reported as part of current assets and current liabilities in the accompanying Consolidated Balance Sheet. Through December 31, 2024, the Company permitted selected highly compensated employees to defer a portion of their compensation into the SERP. The Company maintains certain s

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 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.

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