Marine Products Corp. (MPX, Financial) filed Annual Report for the period ended 2011-12-31.
Marine Products has a market cap of $237.7 million; its shares were traded at around $6.31 with a P/E ratio of 53 and P/S ratio of 2.2. The dividend yield of Marine Products stocks is 1.3%.
Cash provided by (used for) operating activities decreased by $7.6 million in 2011 compared to 2010. This decrease is primarily the result of an income tax refund of $6.2 million received in 2010 (relating to 2009 losses) offset slightly by an increase in earnings in 2011, excluding the gain on benefit plan financing arrangement, compared to 2010.
Cash provided by operating activities increased by $19.9 million in 2010 compared to 2009. This increase is primarily the result of a significant increase in earnings in 2010 compared to 2009 and an income tax refund of $6.2 million related to 2009 losses received in 2010, partially offset by an increase in working capital requirements during 2010. This increase in working capital requirements was primarily related to the increase in inventory due to higher production levels and stocking of key components in response to higher demand and sales.
The factors that complicate the calculation of the cost of these incentives are the ability to forecast sales of the Company and individual dealers, the volume and timing of inventory financed by specific dealers, identification of which boats have been sold subject to an incentive, and the estimated lag time between sales and payment of incentives. Settlement of the incentives generally occurs from three to twelve months after the sale. The Company regularly analyzes the historical incentive trends and makes adjustments to recorded liabilities for changes in trends and terms of incentive programs. Total incentives recorded in net sales as a percentage of gross sales were 12.5 percent in 2011, 12.0 percent in 2010, and 30.3 percent in 2009. A 0.25 percentage point change in incentives as a percentage of gross sales during 2011 would have increased or decreased net sales, gross margin and operating income by approximately $0.3 million.
Warranty costs -The Company records as part of selling, general and administrative expense an experience based estimate of the future warranty costs to be incurred when sales are recognized. The Company evaluates its warranty obligation on a model year basis. The Company provides warranties against manufacturing defects for various components of the boats, primarily the fiberglass deck and hull, with warranty periods extending up to 10 years. Warranty costs, if any, on other components of the boats are generally absorbed by the original component manufacturer. Warranty costs can vary depending upon the size and number of components in the boats sold, the pre-sale warranty claims, and the desired level of customer service. While we focus on high quality manufacturing programs and processes, including actively monitoring the quality of our component suppliers and managing the dealer and customer service warranty experience and reimbursements, our estimated warranty obligation is based upon the warranty terms and the Company s enforcement of those terms over time, defects, repair costs, and the volume and mix of boat sales. The estimate of warranty costs is regularly analyzed and is adjusted based on several factors including the actual claims that occur. Warranty expense as a percentage of net sales was 1.0 percent in 2011, 2.0 percent in 2010, and 5.1 percent in 2009. Warranty expense as a percentage of net sales decreased in 2011 compared to 2010 due primarily to favorable claims experience and the resulting change in management s estimate of warranties issued in prior years. A 0.10 percentage point increase in the estimated warranty expense as a percentage of net sales during 2011 would have increased selling, general and administrative expenses and reduced operating income by approximately $0.1 million.
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Marine Products has a market cap of $237.7 million; its shares were traded at around $6.31 with a P/E ratio of 53 and P/S ratio of 2.2. The dividend yield of Marine Products stocks is 1.3%.
Highlight of Business Operations:
Net Sales. Marine Products net sales increased by $61.6 million or 156.1 percent in 2010 compared to 2009. The increase was primarily due to a 122.7 percent increase in the number of boats sold and more typical incentive costs as a percentage of net sales, partially offset by a 2.5 percent decrease in the average gross selling price per boat. Unit sales among all models increased significantly compared to the prior year, as we operated at significantly higher production levels in response to an improved financing environment within our dealer network as well as stable retail demand for our products. Average gross selling price per boat decreased compared to the prior year due primarily to the reduction in number of Premiere Sport Yachts sold in 2010 compared to 2009.Cash provided by (used for) operating activities decreased by $7.6 million in 2011 compared to 2010. This decrease is primarily the result of an income tax refund of $6.2 million received in 2010 (relating to 2009 losses) offset slightly by an increase in earnings in 2011, excluding the gain on benefit plan financing arrangement, compared to 2010.
Cash provided by operating activities increased by $19.9 million in 2010 compared to 2009. This increase is primarily the result of a significant increase in earnings in 2010 compared to 2009 and an income tax refund of $6.2 million related to 2009 losses received in 2010, partially offset by an increase in working capital requirements during 2010. This increase in working capital requirements was primarily related to the increase in inventory due to higher production levels and stocking of key components in response to higher demand and sales.
The factors that complicate the calculation of the cost of these incentives are the ability to forecast sales of the Company and individual dealers, the volume and timing of inventory financed by specific dealers, identification of which boats have been sold subject to an incentive, and the estimated lag time between sales and payment of incentives. Settlement of the incentives generally occurs from three to twelve months after the sale. The Company regularly analyzes the historical incentive trends and makes adjustments to recorded liabilities for changes in trends and terms of incentive programs. Total incentives recorded in net sales as a percentage of gross sales were 12.5 percent in 2011, 12.0 percent in 2010, and 30.3 percent in 2009. A 0.25 percentage point change in incentives as a percentage of gross sales during 2011 would have increased or decreased net sales, gross margin and operating income by approximately $0.3 million.
Warranty costs -The Company records as part of selling, general and administrative expense an experience based estimate of the future warranty costs to be incurred when sales are recognized. The Company evaluates its warranty obligation on a model year basis. The Company provides warranties against manufacturing defects for various components of the boats, primarily the fiberglass deck and hull, with warranty periods extending up to 10 years. Warranty costs, if any, on other components of the boats are generally absorbed by the original component manufacturer. Warranty costs can vary depending upon the size and number of components in the boats sold, the pre-sale warranty claims, and the desired level of customer service. While we focus on high quality manufacturing programs and processes, including actively monitoring the quality of our component suppliers and managing the dealer and customer service warranty experience and reimbursements, our estimated warranty obligation is based upon the warranty terms and the Company s enforcement of those terms over time, defects, repair costs, and the volume and mix of boat sales. The estimate of warranty costs is regularly analyzed and is adjusted based on several factors including the actual claims that occur. Warranty expense as a percentage of net sales was 1.0 percent in 2011, 2.0 percent in 2010, and 5.1 percent in 2009. Warranty expense as a percentage of net sales decreased in 2011 compared to 2010 due primarily to favorable claims experience and the resulting change in management s estimate of warranties issued in prior years. A 0.10 percentage point increase in the estimated warranty expense as a percentage of net sales during 2011 would have increased selling, general and administrative expenses and reduced operating income by approximately $0.1 million.
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