Free 7-day Trial
All Articles and Columns »

Marine Products Corp. Reports Operating Results (10-Q)

November 05, 2009 | About:
10qk

10qk

18 followers
Marine Products Corp. (MPX) filed Quarterly Report for the period ended 2009-09-30.

MARINE PRODUCTS is the third-largest distributor of sterndrive powerboats in the U.S. The company designs manufactures and distributes premium-branded Chaparral sterndrive pleasure boats and Robalo outboard offshore fishing boats and continues to diversify its product line through product innovation and strategic acquisition. With premium brands and a solid capital structure Marine Products Corporation is prepared to capitalize on opportunities to increase its market share and to generate superior financial performance to build long-term shareholder value. Marine Products Corp. has a market cap of $178.9 million; its shares were traded at around $4.85 with and P/S ratio of 1.

Highlight of Business Operations:

Cost of goods sold for the three months ended September 30, 2009 was $7.6 million compared to $26.5 million for the comparable period in 2008, a decrease of $18.9 million or 71.3 percent. Cost of goods sold, as a percentage of net sales, increased primarily as the result of significant manufacturing cost inefficiencies due to very low production volumes and sales.

Selling, general and administrative expenses for the three months ended September 30, 2009 were $4.5 million compared to $4.1 million for the comparable period in 2008, an increase of $0.4 million or 9.6 percent. The increase in selling, general and administrative expenses was primarily due to $1.8 million in costs recognized during the third quarter of 2009 for our dealer inventory reduction programs, partially offset by decreases in other expenses which vary with sales and profitability, such as incentive compensation, as well as reduced employee headcount. Warranty expense was 5.8 percent of net sales for the three months ended September 30, 2009 compared to 1.7 percent in the prior year due primarily to approximately $0.4 million in additional warranty expense recognized during the quarter relating to boats sold in prior periods.

Cost of goods sold for the nine months ended September 30, 2009 was $33.6 million compared to $123.3 million for the comparable period in 2008, a decrease of $89.6 million or 72.7 percent. Cost of goods sold, as a percentage of net sales, increased primarily as the result of significant manufacturing cost inefficiencies due to very low production volumes and sales.

Selling, general and administrative expenses for the nine months ended September 30, 2009 were $15.9 million compared to $19.0 million for the comparable period in 2008, a decrease of $3.0 million or 15.9 percent. The decrease in selling, general and administrative expenses was primarily due to the variable nature of many of these expenses, including incentive compensation, which declined as a percentage of sales consistent with lower sales and profitability, and a decline of $1.4 million in warranty expense partially offset by $6.0 million in costs recognized during the first nine months of 2009 for our dealer inventory reduction programs. Also, salary, research and development and advertising expenses were lower due to cost control measures instituted in the past year partially offset by costs incurred in connection with boat repurchase obligations totaling approximately $0.7 million during the nine month ended September 30, 2009.

Income tax (benefit) provision for the nine months ended September 30, 2009 declined $9.0 million to a benefit of $5.2 million from an income tax provision of $3.7 million for the comparable period in 2008. The income tax benefit for the nine months ended September 30, 2009 reflects an effective tax rate of 39.7 percent, compared to an effective tax rate of 30.0 percent for the comparable period in the prior year. The change in the effective rate was due primarily to the relationship of our pretax income (loss) to permanent differences between book and taxable income.

During the third quarter of 2009, an amendment to the current agreement with one of its lenders has been executed with a contractual repurchase limit of $9.0 million effective January 1, 2009 which will expire June 30, 2010. The Company has contractual repurchase agreements with additional lenders with an aggregate maximum repurchase obligation of approximately $4.5 million with expiration dates from June 30 to September 30, 2010. As of September 30, 2009, the Company has an aggregate remaining repurchase obligation of $5.7 million with these financing institutions.

Read the The complete Report

About the author:

10qk
GuruFocus - Stock Picks and Market Insight of Gurus

Rating: 4.0/5 (2 votes)

Comments

Please leave your comment:


Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
Free 7-day Trial
FEEDBACK
Hide