Marine Products Corp. has a market cap of $254.1 million; its shares were traded at around $6.85 with and P/S ratio of 5.2.
Highlight of Business Operations:Cost of goods sold for the three months ended March 31, 2010 was $21.0 million compared to $13.9 million for the comparable period in 2009, an increase of $7.2 million or 51.8 percent. Cost of goods sold, as a percentage of net sales, decreased primarily as the result of lower retail incentive costs, improved manufacturing cost efficiencies due to significantly higher production volumes and cost leverage with increased sales during the first quarter of 2010 compared to the same period of 2009.
Selling, general and administrative expenses for the three months ended March 31, 2010 were $3.8 million compared to $4.1 million for the comparable period in 2009, a decrease of $0.3 million or 7.1 percent. The decrease in selling, general and administrative expenses was primarily due to cost control measures instituted in the prior year. Warranty expense was 2.6 percent of net sales for the three months ended March 31, 2010 compared to 4.9 percent in the prior year due to higher net sales in the current period.
Interest income was $0.3 million during the three months ended March 31, 2010 and $0.5 million for the comparable period in 2009. The decrease was primarily due to a decrease in the average investment balance compared to the prior year.
Income tax benefit for the three months ended March 31, 2010 was $15 thousand compared to an income tax benefit of $1.8 million for the comparable period in 2009. The income tax benefit for the three months ended March 31, 2010 reflects an effective tax rate of 15.8 percent compared to an effective tax rate of 42.2 percent for the prior year. The change in the effective rate was due primarily to the relationship of our annual estimated pretax income (loss) to permanent differences between book and taxable income including tax-exempt interest earned on municipal securities, coupled with the impact of immaterial discrete tax adjustments.
The Company s cash and cash equivalents at March 31, 2010 were $6.4 million. In addition, the aggregate of short-term and long-term marketable securities were $37.6 million at March 31, 2010 compared to $39.4 million at December 31, 2009. The following table sets forth the historical cash flows for:
During the third quarter of 2009, an amendment to the current agreement with one of the Company s floor plan lenders was 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 $3.2 million with expiration dates from June 30, 2010 to March 31, 2011. As of March 31, 2010, the Company has an aggregate remaining repurchase obligation of $6.5 million with these financing institutions.
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