Marine Products (MPX) 24 Oct 242024 Q3 Earnings call transcript

Good morning, and thank you for joining us for Marine Products Corporation's Third Quarter 2024 Financial Earnings Conference Call. Today's call will be hosted by Ben Palmer, President and CEO; and Mike Schmit, Chief Financial Officer. [Operator Instructions] I would like to advise everyone that this conference call is being recorded. I will now turn the call over to Mr. Schmit.

Thank you. And good morning.

and want will you call be forward in I the some could begin, of looking that number statements made nature we to unknown that remind of be known Before and a risks. reflect on this our can to today, issued non-GAAP www.marineproductscorp.com. In and earnings be and found release XXXX those risks, conference along that release be several public at measures filings press performance outline our referring call, all XX-K and refer Please with other operating of to we'll which of today's liquidity. allow these non-GAAP to believe over We consistently various measures us compare performance periods. Today's Palmer. directly reconciliations of comparable release President call these most now our measures. I'll our the the turn to press website GAAP over and Ben non-GAAP CEO, contain to measures and

for And call. you our Mike. thank all joining Thanks,

results industry costs period, some very environment. difficult signaled demand to as prior minor Third negative and until have can peers regarding inventory to interest demand marine positive picks tough as levels continue compared navigate a up. consumer rates. year, channel been managing in they There in quarter and we remained production the best would, we our developments We and had a

to orders. to with caution continue respect dealers However, exhibit new

manufacturing head our have costs appropriate to reductions as We to and scaled reduced back allow count through production shrink. inventories showroom

have our comfortable field We jeopardizing the to regard operations. With of with prudent sacrificing in measures products current decisive inventory, in longer-term are dealer and and taking opportunities down; the near or we levels. our without levels come term are

basis were trending and detailed were year, quarter in that versus lower. disclose build second XX%; units a inventory pleased sequential prior of boats to the While we field quarterly counts, X%. year, dealer compared this we down are are down On the don't

these last did supporting critical to consumers. believe dealers are quarter, our we we as and we incentivizing programs, our extended as promotional have Just

point interest third-party also financing dramatic rate carrying costs. while don't cut include it to see floor also dealer market. program capabilities. We first were and lowering We believe added the September a We on Fed. several reiterate through costs with by years consumers' encouraged more come and plan have reducing XX a back Fed in demand, promotional rate the our in that, to buyers cut consider cut basis and hopefully, step have in the first cuts toward enhanced features are we into financing borrowing impact will will we momentum More downward costs expected, lure single a a

Chaparral's that quality network. with We dealer new give options unveiled brands. conference patterns the for enthusiasm and colors, Our continuously lineups; bar design South products celebrated a refine many an and response to is high approach clearly and they offerings headwind, customers within and a opportunity our shortage of there was we anniversary from no was Robalo model we assure have each our Order very our in positive. August but you dealers. of remain connected come and our both as dealer to raise event, Chaparral year expect features XXth Florida dealer We across as and exciting the models, new

provide will Now financial results. an Mike overview the of

Thanks, Ben.

quarter. the last XX.X%, been On points from declined million, margin XXX strong down made margin to Significant gross profit in netted the to sales sold. XXXX, labor versus to by sequential positive compared of in decreased year's XX% third $XX.X quarter XXXX, boats down a XX% second basis only XX.X% million, a of and mix the For Price to third to were quarter control have efforts gross $X.X expenses. decrease driven number a of with a slightly the results. basis, X%. Gross of

incentive These million project compared expenses by $XX.X estate we in decreased However, XX% from $X.X as third we quarter. free the quarter, down the transaction million transaction expenses last have CapEx profitability, flow be picked closing commissions vary of million, down still year. I'll and consistent to SG&A a or from $XX.X with $X.X share last a year, up cash were impacted was flow EBITDA when per as back $X.XX such of manufacturing $X.X were We $X expenses. related at last EPS last million. real due down of turn for third estate CapEx million generated now quarter, was was remarks. million which with and million XX.X%, for the under-absorption facility. a in to installation primarily year's also few operating a costs Ben million $X.X full in gain. Year-to-date, real it to over sales we included $X.X warehouse sale. percentage and that was solar being million approximately year's warranty $X.XX $XX had cash expect year, third our costs. SG&A sales compensation, of fixed and gain the a $X.XX sales third panel a from to to with quarter quarter. Diluted the

million the through Thank to per employees, we we cash second through you, over regular market third environment. the dividend quarter. consequences our know cash patch. We've difficult ended out the amount this our testament remained generation manage weak sheet, cash but with the a our prudently And Mike. We $X.XX end to $X.XX of in significant the and steadfast we returned still the paid to investors feeling this are both of demand, special investors and $XX dealers our year balance in strong quarter despite our on lackluster dividends in share quarterly commitment

this through liquidity execute make the potential and to ample investments We cycle, have acquisition on us in business opportunities. current down see

last if to capital, further substantial return over look noted to time, not as we'll deploy we at actions investors. quarter, we do However, our cash

southern well. Nashville, minimal our also have our facility. And were that our weeks states as fared destructive facing at we employees offered community Lastly, know, the not many highly support and production in hardships. fortunate that of that in recent everyone the we to hurricanes community inflicted however, passed damage Georgia through We the forms

mindful respect support storm what to they are them. also weeks some disruptions all well in markets, dealers -- been of relatively minor some That to severe from told, who are ordering have local and We that working are we caused with our is Though, fourth their diligently seen recovery. had endured of in faring delays disruption. the Hurricane as we quarter, the the we minor early most have said, when Milton we've

to questions. line we and turn please operator, thank mutual dealers us questions, over with I'd contributions So success. With employees to our continue before that, day our for vendors call and partner like every their for the for for open the who

question line Griffin of D.A. with the Davidson. your And first comes Bryan Instructions] from [Operator

this numbers So kind of anything out Actually is this do bottom, got some improved quarter, all a you cadence marks throughout you the right? a October? curious it or of of just guys how of kind like decent we like September played retail So think tell? the bit in there are to categories bit, And early seems it kind seeing so yesterday. are the that retail too the

begin fantastic getting the Griffin, provides that of field decline this at look more I such [ point to light is in production What I Ben, appreciate levels that broadly -- nothing the to see your that in say our this is has down a inventory. ray job a guess, of biggest particular. would the team we done the can question. we ]

field but dealers. decline retail impressive and the looking So the we that producing, being were were the third -- that especially to in at XX% at boats we more in shipping fact than despite were quarter that inventory still obviously sold

So a the that's quarter great a especially weaker is sign, typically relatively given quarter. third seasonally

see of but industry that, point see But too. to to to results positive at overall or pleased whatever size it's good very driving were that. or really particular we those model any So hard that's it's some

Fair something on dealer levels Do your at then levels, you kind And broader you that you then model seeing units those think trend are specifically? time? like And dealers' enough. year take is 'XX to at guys reasonable mentioned are with what or are this levels. reasonable of a your appetite this that

committed to to the even stepping could up. to equilibrium They comfortable spring, inventory we if appropriate point what job of they're demand lower, The again where we to have up have, to to, much our models. be that need production want they our field we've as now. 'XX good going this is where in taking we but are have, time. of we take it production, love but We given the through especially a would And know that whatever some Well, Obviously last we us. can level we -- done to been as helping requires XX-plus at has we months. to boats hopefully, them stepping and meet think -- they're through next period reach some begin a this to so that that have tried team are dealers navigating way, done be have we've

they're is partnering period, we'll some So over is seasonally a everybody retail react us shows next the few project said, this environment, order boat team the what time. that with have regard. in our doing doing great navigating who appreciate to us what trying Typically, plan but a And great for. really to I and a And quarters. fourth job flow to are and we're just to that, so with at strong job happens in spring. And point all the forward reasonable expecting [ to obviously, get quarter looking I'm that. supporting like weak next ] dealers is winter a That's out we through working not for

some about guys? rebates any year. for out on pressure environment on the how on talk and they'll instituting 'XX of Got maybe in kind your kind play And just of And this then front, the for rest it. drastic of Has we've some you model philosophy the pretty of sort promotions seen OEMs year promotional retail put this units.

point, continues at Well, weak. I this think, to demand be is,

we really, -- trying cycle, it so this at we're is promotional at it -- anything at in few what time. again, getting that is to philosophy incentives trying than super our just to so levels, to term; over point inventory looking this is. other I super pricing, we look to for that the are that with a certain going offering season. not because our closer We're not over those traditionally low point really longer do We're really high they're manage where would program to aggressive the that little compared it people are say are shake think, reasonable Our

time. to significantly more So believe the where to feel elevated that -- in again, are having some not aggressive don't -- and we rather with, our at we we really of have this are point need position mean the in and programs inventory up we don't we support dealers, demand, super with and programs. models our we I with responding stepped have place certainly We'd we're but normal.

one guys broadly. then necessarily enough. marine Fair but I'm that And we've current maybe marine on that expecting the market more M&A they're seen to kind comment competitors speak announce you of just specifically, not exiting to of industry. within the your

This honestly, out of be we think balance kind -- have we, a will we that's look like some to Mike. we want us M&A. sheet our we specific that haven't at encouraged have there opportunities grow we to then in we to deals and And time end, be is detail will opportunities that of opportunities possibly there. And that see starting business, as since on so that. for other strong There's to positive companies grow. that are out believe quarter are a been saw through call there, had right our it stated, Sure. now, been working looking nothing to Yes, but than lot sign out on we've we've for a

yes, hopefully, it shakes fit a So we'll for long-term something we'll will us. that see out. see great be And how

last one Got it. then just And me. for

terms mentioned of first certain guess for interest a kind good cuts you I'm think needle a where you necessarily cut guys not point to mover. rate start maybe kind and plan of internally floor your do demand in ] what an being curious kind of out plan retail the you forecasting So you of impact the I rate there's [ but are just as if cuts on XXXX. actually make for then

production wish more Well, who dealer salesmen thing, the our feedback of We're happens, how our We're to really based production more set forecast now. right comfortable trying I feeling. with it. to are a our that we question. we at from Griffin, It's can remain that we'll and cuts. getting adjusted and they necessarily our trying and able were we're dealers demand what we levels pick they're kind We rate country get a really prognostication. more feel Again sort a we're fairly to not we whatever does wish and we're to this had it's feeling market that up. probably And react we're higher, to steady of a good but are we've across partners level to for the levels are that react going until dispersed be to quickly. vendors to on of where feel feel in our than

So we're the that always. but monitoring interest can picture. Certainly more monitoring not rates demand into that, overall may factor

are some And the -- I rates would we certainly So to and question, to economy some then set we we'll there would has the see. try different predict so glad additional probably think and interested wait that occurred. to achieve cuts and parts initial improvement, just or we're think on we'll that. It's many been positive certainly cuts be a sectors our opportunity production that economy, we'll cut help cuts of don't reasonable that and continue to additional a certainly necessary But do but any just but different based has it. help of many watch the

our add direction, also for all just a release plan hopefully, down vendors I things look were dealers just dealers for, time. with we're as -- will -- we've our it It's both ultimately today, get we making as and And our and, heading right the something we which at I'll working we press the Yes. been long rates to our our think, for in mentioned help in consumer. looking enhancements floor right? financing, of

So as in things in moving to lower that things, down, direction. to think, with are the the keep That continue inventory the our field hopeful, all rates positive we're I those heading right seem direction. signs, in be coupled will come right so

for for That's Best rest of it. all me. of the luck Got guys. the year,

Thank you, Griffin.

Griffin. Thanks,

further will the Ben no Mr. are There at over questions conference I this time. remarks. Instructions] closing to for [Operator back now turn Palmer

you, everybody the well, thank appreciate Griffin, appreciate right, who your have All questions; good rest you And a it. of We day. much. very listened in. and

call be completion available X today's marineproductscorp.com A hours of following the concludes within the recording of call. today's on will This call.

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