Marine Products Corporation saw a 35% drop in sales in the last quarter of 2023 to $70.9 million. Net income was down 54% year-on-year to $5.4 million.
Across the whole of 2023, there was a small increase of 1% in sales for the manufacturer of Chaparral and Robalo boats to $383.7 million.
The company says the results reflect the normalisation of retail demand following a strong period of post-COVID sales.
Production volumes and manufacturing costs have now been adjusted to align with near-term demand.
“Our fourth quarter results reflect soft retail boat demand for the second consecutive quarter as the industry has normalised from elevated post-COVID demand,” said Ben Palmer, Marine Products’ President and CEO.
“While the boating market has added new retail customers since 2020, the industry has recently been grappling with economic uncertainty, rising interest rates and generally higher levels of dealer inventory.”
He added: “We are prepared for near-term industry softness and overall channel de-stocking.
“In this environment, we will focus on product innovation, maximise our dealer relationships, and aggressively manage costs.”
And he said that the company would continue to evaluate potential acquisitions to increase its scale and options to return additional capital to our shareholders.
Comparing the last quarter of 2023 with the previous year, the decrease in net sales was primarily due to a 34% decrease in the number of boats sold during the quarter.
A 4% increase in gross average selling price was offset by higher retail incentives for a new program announced during the quarter.
Gross profit was $13.5 million, down 51% and gross margin was 19%, reflecting lower sales volumes and associated manufacturing cost inefficiencies, coupled with the impact of higher retail incentives.
