Marine Products (MPX) 25 Oct 232023 Q3 Earnings call transcript

Good morning, and thank you for joining us for Marine Products Corporation's Third Quarter 2023 Financial Earnings Conference Call. Today's call will be hosted by Ben Palmer, President and CEO; and Mike Schmit, Chief Financial Officer. Also hosting is Jim Landers, Vice President of Corporate Services.

[Operator Instructions] I would like to advise everyone that this conference call is being recorded.

Mike will get us started by reading the forward-looking disclaimer. ahead. go Please

good and Thank morning. you,

forward-looking Form like those XXXX Before risks, we our and everyone on unknown which available like and I'd all today, you to website, our reflect be remind filings on today, refer of some started this number press of known risks. may other make I'd at issued that SEC will the release to we and get statements of nature in to our call XX-K a outline marineproductscorp.com. that are that

visit not website. If our you have received press release, please our

In consistently today's of EBITDA, operating conference various to regard over us measure our we measure which use We refer allows this non-GAAP periods structure. without earnings to release in and performance. because changes non-GAAP performance is capital compare a it call, to

We with required facility. compliance EBITDA our revolving to financial are report credit to our under also use covenants

and then financial which reconciliation issued in a about our quarter seeing you're Our contain this interested nearest the for how this is to questions. press measure Please your disclosure GAAP financial if and calculated. few make morning comments release available a review website this We'll measure. non-GAAP be net it's this of income,

our I'll Ben now President over turn the Palmer. call to CEO, and

Thank morning. earnings XXXX press you, joining I'll for highlights Mike, this our and issued third quarter release morning. thank our begin this few call you all was regarding with a that

post-COVID retail production in The boat reflect of occurred results that reduction quarter boat to to new third a prior the XXXX Corporation's following has corresponds that the decreased to rates. Products year significant during dealers deliveries Marine demand. approximate demand our production normalization compared the

the economic optimism our conference, bolstered and expressed launch potential the XXXX note of about They some at dealer models. slowdown rates. annual interest our recent continued however, did, of impact higher dealers concerns new Our by

continued to earlier supply note, this challenging. remain improve but certain On components a from positive chains year,

assist normalized more and of trending typical levels. them us scheduling have pre-pandemic to Chaparral Dealer levels, dealers a in asked rebuild our healthy to to quarter, models their to continued the production. return process remains below and our During more inventories, Robalo to we and ordering inventory

to expect are service of demand quarters, to the to coming planned manage approximate We our dealers retail able inventory. over out so demand production

We Board a also that announced quarterly morning $X.XX Directors dividend our declared per this of regular of cash share.

with that our Mike over CFO. back now I'll it turn Schmit, And overview, to

per and year, by Average approximately Net a about third higher year. price favorable Thanks, costs XX%. Ben. with I'll overview selling X% a sales the Unit versus quarter to boat model last to due of begin and price increases mix to quarter $XX.X XX% third quarter decreased prior company's results. of XXXX sales cover extent, the the to compared increased an of materials third million, were lesser by financial components. primarily for the decrease

quarter to and $XX.X Production gross due were Gross decrease the decrease the XX% XX.X%, of XX% by over for for Idalia. compared sales a was days quarter million, third quarter impacted a profit third quarter third year. margin to was quarter the negatively third about in the of The during the XXXX. last X third the Hurricane slight

sales the to and costs third expenses as warranty compensation, administrative due XXXX incentive vary decreased and of sales the to and $X.X such expenses million third These quarter million $XX.X in profitability, commissions year. of were compared general last in that Selling, with expense. quarter

$X.X the real transaction. recorded assets on to net also which million $X estate a included related of million quarter, gain of a We disposition during

the third of EBITDA, compared prior of in million third XX.X% was compared the as to quarter quarter XXXX. was XXXX third $XX.X EBITDA percentage decrease a the XX.X% the $XX million, to sales in quarter a net XX% in year. in of

third the $X.XX quarter, compared We million generated in the earnings $X.XX in net share the decrease to Diluted quarter third a $XX.X compared year. the XXXX. per to in in were of $XX.X X% quarter last income of quarter third of million third

X% quarter the our third sales for decreased of during total compared Our last the to third XX% international sales, by quarter accounted year. which approximately of

As our well normalized demand meet be pre-pandemic toward our purchase dealer to XXXX inventories levels as These lower and Ben continue mentioned, increasing dealers than inventories to are levels. allowed higher moderately models. our current more have as

turn to closing Ben for Thanks. now it over back few I'll remarks. a

the very recently market I'm sterndrive data that reported market that was size pleased to Our share #X share Chaparral category. indicates most strong. its remains report in

third hold their share of combination category. the the Chaparral Robalo addition, in and size market In highest outboards

positive from allowing boats. us models high-quality while the We are to feedback to customer They dealers. to XXXX received very produce our retail on designed efficiently our appeal new

Our XXXX. I'd into market XXX dealers, will on for Chaparral cover our ] [ thank upcoming you quarters, our We'll happy additional remains current SSX the in you take our and the morning. over of support this us like field the to be Magazine. uncertainty any inventory like questions but healthy joining have. Boating production new be to featured see schedule We, backlog coming

the Your Davidson. with Rolle Instructions] D.A. of [Operator first question line comes from Brandon

the I from seen guess, how thinking XX winter you about months XXXX at we days start, have perspective, in as to the head point? a guess you retail are and this over what last retail into I

The the time Maybe very People concerned probably. seasonally I bit answer an is but rates. XX a are Jim. always the slowdown issue a past The few can not from kick just different Brandon, there. months interest about of off year. a little have with slow discussion, days past economic is been it's this

they're been dealers, little orders, has any us bit. haven't canceled They asking to slow have everybody but mentioned, a down cautious. Our as

They're costs that interest rates is inventory than are they on part. their higher carrying of Part for were.

-- So anything extended that know a don't and is has order just bit. add. delivery anyone else a has period little to I that

slow that's of seasonally obviously, think year, I This a period. No, Brandon. is quarter third normal right, time the

gauge difficult just last days. to bit little a the the on based it's future So XX

about course. Many feel our of prudent rates. models being we of the feel setting well. carry production of relates models, level inventory like where other good field we're our to really dealers as of our We inventory of we're about As it XXXX,

a capacity numbers additional So certainly healthy very is certain model. But our there's of in models. is amount to in again, terms field of have -- very almost take inventory the the inventory and entire only dealer the virtually fresh

trying there's concern to older about So no models. move

us really that into year. idea year So demand early looking boat what a point and will good assessing this forward going come next is with the calendar to the for shows next to winter later we're about start get

look stand well and then dealer reassess rates production We in what point inventories -- we'll like at where demand, this that possible reassess are, at okay but So as in at time. we feel we'll time, positioned as point it. all feel are about reassess appropriate we

Okay. the Great. dollar you maybe XXXX they taking But do And higher I right average from below obviously, dealers back these your said from to than levels. account, are for just perspective, more had pandemic? know dealers, are carrying and quantify on inventories. hand into on inventory now? you a levels carrying current for dealers did costs perspective like a dollar the you be weeks Would able And inventory feel

is say don't the pre-pandemic. of that readily And providers have the certainly us. right? They boats up complete share our with total that I don't certainly, average plan don't We dealers' cost visibility would from floor inventory, into either.

of larger and we're are a boats. that's For us, building taking combination dealers and ordering

X to So last increased that with the price. do cost and selling in also so years. obviously, tends that's increase, or X of average And just the components the forth

to -- would up I they're going floor providers it's level So the to plan to the provide determine dealers. of financing the

really little numbers from exactly dollar they course, They financing So they're bit your more point. certainly of about maybe headwind than to I'm what the dollars, don't companies I are, aware perspective. a not that -- to of of units but inventory produces level, some of want are at -- their thinking levels

a Brandon, from just we unit And pre-pandemic. below we are where still perspective, were directionally,

little the kind were were of few a of they dealers units. than what During X/X kind pre-pandemic last total less of probably years,

about pre-pandemic Now probably X/X of plus a little levels. we're bit

because last we higher sure where So mentioned rates. we year, are get are not but of been so levels time dealers interest higher carrying has going this we're pre-pandemic were their much probably to back because to double that costs

been our there's manufacturers' other websites. and developments also, boat website So better on

multiple screen and of on they it the not features show model colors same carry So because of things them up pull may like different and they kind can that.

now. So hearing where where we We're that that we pre-pandemic, think changed. not I little they're pretty like have said, X/X comfortable fundamentally But sure, some over may just helps. it's a think things at that we if but they're probably were we're

production reflected and said I this for quarter, No, And reduction it does. the you rates. delivery in results kind of know

guess, production fourth in exiting fourth given third right inventories the how think the are quarter, Or production to quarter? quarter? about a ahead expecting should are the you over reduction further I we at now where Looking

scheduled not. are and seasonality demand We've based -- -- the months. reduce dealer we the now in but X.X production to don't we No, during look holidays, it got on next out

that were just for where strongest maybe dealers you dealer on products orders where seeing seeing annual you And the finally, then you of -- the were Can Okay. strongest Great. about conference. orders? mix the talk and which the products

again, usually of what check Obviously, a some newer of We is many new our models of models, the do but around our didn't some year, see, they at there's XXX meeting again, the of really the existing dealer out models. SSX. buzz lot and this like --

boats in haven't We the size seen of this shift time. point at a in the

have trend larger looking that's the expecting positive. So a I think We and and at momentum on strongly good dealers, to with sell boats. a still

that. I on. or at sort pleased shifts about Chaparral, Robalo real point, So versus -- we're it's continuing of it's versus sterndrive No major outboard think this

dramatic so shift. And particular no

can in. squeeze lastly, last And one Okay. I just if one

Just support, talk any on step at And up trended quarter? dealers incremental is think how you point. customer the needed the you to that the about to fourth dealer? quarter, that you're do this throughout Can in the providing to maybe or promotional the third promotional support

make the have and but real that but offered moving assess significant during again, that we're it's question, incur boat not support retail we'll dealers the with design issue some look we and the dealer's and a at a really incentive We'll and competition, look an into inventories. retail not our significant. support We'll some decision programs did assess small what little assess a perspective. but From third will we'll from a think perspective, that appropriate demand question. good type about right? building we as inventory, our one level respect sales. help It's quarter, the winter of We'll we'll and at, program to more that shows, We

provide yet. expect type not incentive a lot industry returning normal. have of the that that and of determined So we they'll couple -- again, we years, in to don't [ the There's not Certainly, we -- last -- have we'll of the we to program another retail but example winter. in of ] some have expect we needed support that's returning do

Okay. boat are the of indicators Great. And just better on as demand towards what shows, what upcoming the allowing to Fort Lauderdale may other of of show, year? look you demand winter in and you looking boat understand kind shows the like outside

our Well, shows of say all management of attends the the are shows. in boat shows the boat all and attend have major -- we our boat many I would of all and really major certainly salesmen our them, team we

we sales going and and regularly -- So retail those attitudes. are how review

good the rates. and where how set feel certainly, is. will incentive industry and -- So our how on each And every We'll what's pulse that's one. production that happening be we our a and we design we us key very to demand and influences have it programs to

of great them. So and it's in a all we're question interested

are call will further there It Schmit remarks. the for to no over questions. Instructions] back [Operator closing appears turn Mike I

you All the to just today, for end much. and right. call joining we'll Thank everyone thank very Well, our now I want call.

This for will X marineproductscorp.com call. on We the the replayed of thank be following joining. call conference hours within you completion

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