Marine Products Corporation (MPX) on Q2 2021 Results - Earnings Call Transcript
Operator: Good morning and thank you for joining us for Marine Products Corporation Second Quarter 2021 Financial Earnings Conference Call. Today’s call will be hosted by Rick Hubbell, President and CEO; and Ben Palmer, Chief Financial Officer. Also present is Jim Landers, Vice President of Corporate Services. At this time, all participants are in a listen-only mode. Following the presentation, we will conduct a question-and-answer session. Instructions will be provided at that time for you to queue up for questions. I would like to advise everyone that this conference call is being recorded. Jim will get us started by reading the forward-looking disclaimer.
Jim Landers: Thank you, Charlotte, and good morning. Before we get started today, I’d like to remind everyone that some of the statements that we will make on this call may be forward-looking in nature and reflect a number of known and unknown risks. I’d like to refer you to our press release issued today, our 2020 10-K and other SEC filings that outline those risks. All of these are available on our website at www.marineproductscorp.com. If you’ve not received our press release and would like one, please visit our website, again, at marineproductscorp.com for a copy. We’ll make a few comments about the quarter and then we’ll be available for your questions.
Rick Hubbell: Jim, thank you. We issued our earnings press release for the second quarter of 2021 this morning. Ben Palmer, our CFO, will discuss the financial results in more detail in a moment. Now, a few highlights on the quarter. Marine Products Corporation’s second quarter 2021 results reflect the continuation of extraordinary high demand, which we expect beyond the 2021 retail selling season. Recently reported data indicate that retail sales in our product categories have increased 28% so far this year. We have participated in that growth, and I am pleased to report continued strong market share in both of our brands. Unit sales to our dealers during the second quarter were almost 59% higher than in the second quarter of last year. While we have to remember that our manufacturing facility was closed for almost half of the second quarter last year due to COVID-related safety concerns, this retail sales growth – unit sales growth is still very strong and speaks to the strength of the recreational boating market, our management team, our dealer network and the appeal of our products. Our backlog of firm orders and other retail indications remain at historically high levels, and our dealers report that they have the lowest inventory in years. These are positive indicators – excuse me, especially at the end of what was traditionally the retail selling season. The recently reported market share statistics for the 12 months ended March 31, 2021 indicate that both our outboard and sterndrive market shares increased compared to the previous reporting period. Robalo continues to hold the highest market share in the 16- to 36-foot outboard category. And the combination of Robalo and Chaparral outboards hold 6.9% of that market. Our Chaparral’s sterndrives hold 17.1% of the market in their size range, a slight increase from the previous reporting period. The Chaparral brand counting both outboard and sterndrive boats hold the highest market share among sport boats in its size range. We also announced this morning that our Board of Directors yesterday declared a regular quarterly dividend of $0.12 per share. With that overview, I’ll now turn it over to our CFO, Ben Palmer.
Ben Palmer: Thank you, Rick. Net sales for the second quarter of 2021 were $67.3 million, a 64.8% increase compared to the second quarter of last year. Unit sales increased by 58.8% during the quarter as we generated higher sales across all our models. Average selling prices increased by 7.5% due to a model mix, which included more larger boats.
Rick Hubbell: Thanks, Ben. The extraordinary global developments that have ushered in a new level of demand in recreational boating are continuing into the second half of 2021. Unfortunately, supply chain constraints are another though temporary component of the same macro developments that are positively affecting us. We are managing these issues by coordinating with our suppliers to maximize our production while maintaining quality and minimizing inefficiencies. We are focused on communicating effectively with our dealers regarding their delivery expectations. We are coordinating order flow and planning our production out over the next nine months to allocate it equitably to our dealer network to maintain our relationship with them and ensure the highest dealer in retail customer satisfaction possible. We are introducing our 2022 model lineup this month, and we have streamlined it by about 25% in order to create more efficient production and delivery schedules while maintaining a product lineup with strong consumer appeal. I’d like to thank you for joining us this morning, and we’ll be happy to take any questions you may have.
Operator:
Jim Landers: Thank you, Charlotte, and thanks for everyone who called and is listening in and watching. We appreciate it. Before we hang up, I’m going to ask – we told you about our corporate website at the beginning of this. I will ask you if you’re interested in a new boat, do visit our product websites, chaparralboats.com and robalo.com. Inventory is very low, but we have a great build-to-boat feature on there, so it might be fun to get on that and figure out a kind of boat you want and send it to your local dealer and get in line for a new boat. We think that’s a great idea. So thank you again. Everybody, have a good day. Talk to you soon.
Operator: Participants, the conference will be replayed on marineproductscorp.com within 2 hours following the completion of the call. This concludes today’s conference call. Thank you for participating. You may now disconnect.
