Exhibit 99
[logo] MARINE PRODUCTS CORPORATION
MARINE PRODUCTS CORPORATION REPORTS THIRD QUARTER RESULTS
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ATLANTA, October 26, 2005 - Marine Products Corporation (NYSE: MPX) announced
its unaudited results for the quarter ended September 30, 2005. Marine Products
is a leading manufacturer of fiberglass boats under two brand names: sterndrive
and inboard pleasure boats by Chaparral, including SSi Sportboats, Sunesta
Deckboats, and Signature Cruisers, and outboard sport fishing boats by Robalo.
For the quarter ended September 30, 2005, Marine Products generated net sales of
$65,032,000, a 3.0 percent increase compared to $63,129,000 last year. The
increase in net sales was due to a 3.1 percent increase in average selling price
per boat and an increase in parts and accessories sales, partially offset by a
slight decrease in the number of boats sold. All product lines experienced
higher average selling prices, due to increased sales of larger boats and price
increases instituted at the beginning of 2005. Gross profit for the quarter was
$17,145,000, or 26.4 percent of net sales, compared to $17,117,000, or 27.1
percent of net sales, in the prior year. The reduction in gross profit as a
percentage of net sales was due primarily to increases in the costs of certain
raw materials and components.
Operating income for the quarter was $9,320,000, a 3.3 percent decrease compared
to the third quarter last year due to higher selling, general and administrative
expenses. Operating income was 14.3 percent of net sales for the quarter
compared to 15.3 percent of net sales in the prior year. Selling, general and
administrative expenses increased primarily due to higher public company
compliance costs.
Net income for the quarter ended September 30, 2005 was $7,265,000, a 16.4
percent increase compared to $6,244,000 in the prior year. Net income increased
due to a lower effective tax rate and higher interest income, partially offset
by lower operating income. The effective tax rate decreased because of higher
deductions including the new manufacturing deduction created by the American
Jobs Creation Act, and a discrete adjustment resulting from the filing of prior
year tax returns which increased net income by $0.01 per diluted share. Diluted
earnings per share for the quarter were $0.18, a 20.0 percent increase compared
to $0.15 diluted earnings per share in the prior year.
Net sales for the nine months ended September 30, 2005 were $215,184,000, a 13.4
percent increase from the first nine months of 2004. Net income for the
nine-month period increased 20.5 percent to $22,038,000 or $0.54 diluted
earnings per share compared to $18,286,000 or $0.45 diluted earnings per share
in the prior year.
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3rd Quarter 2005 Press Release
Beginning in late October, Marine Products will decrease production volumes
concentrated in our smaller Chaparral sportboats and selected deckboat models.
This decision reflects near term retail demand uncertainties caused by declining
consumer confidence, high fuel prices and the recent hurricanes. The impact of
the production decrease should be partially offset by an increase in average
selling prices due to the change in model mix to larger boats, cost reduction
actions currently being undertaken, and the variable nature of many of our
indirect expenses. In spite of these offsetting factors, however, Marine
Products' fourth quarter 2005 net sales and net income will be lower than in the
fourth quarter of 2004.
Richard A. Hubbell, Marine Products' Chief Executive Officer, stated, "Given the
uncertainties brought on by current events, we believe it is prudent to decrease
production at Chaparral. One thing we have learned in over 40 years of managing
a profitable pleasure boat manufacturing company is that it is very important to
monitor inventory levels. Inventories are slightly higher due to shipment delays
caused by Hurricanes Katrina and Rita. We would rather forgo future sales
opportunities due to lack of adequate inventory than sell excessive inventory
into our dealer network. The winter boat show season begins in late December,
and we will closely monitor consumer traffic and orders relative to inventory
levels and re-assess production volumes and model mix. Although it is difficult
to predict timing, we expect boat owners whose boats were destroyed in
Hurricanes Katrina, Rita and Wilma to file insurance claims and buy replacement
boats for the 2006 spring and summer boating season."
Hubbell continued, "We had enthusiastic dealer meetings with the highest
attendance in our Company's history. Everyone is excited about the 2006 model
year product offerings, which include four new Chaparral models and five new
Robalo models, all of which were on display at the meetings. We are also
offering a large number of new standard and optional features on our boats,
which are the result of comments received from our dealers and retail consumers.
We believe that our market position, management expertise and financial strength
will continue to keep us in a position to thrive in the current environment, and
we are committed to maintaining profitability and providing good returns to our
shareholders."
Marine Products Corporation (NYSE: MPX) designs, manufactures and distributes
premium-branded Chaparral sterndrive and inboard pleasure boats and Robalo sport
fishing boats, and continues to diversify its product line through product
innovation and strategic acquisition. With premium brands, a solid capital
structure, and a strong independent dealer network, Marine Products Corporation
is prepared to capitalize on opportunities to increase its market share and to
generate superior financial performance over the long term and build long-term
shareholder value. For more information on Marine Products Corporation visit our
website at www.marineproductscorp.com.
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3rd Quarter 2005 Press Release
Certain statements and information included in this press release constitute
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995. Such forward-looking statements include
statements regarding the expected impact of our plan to decrease production to
maintain appropriate inventory levels, our ability to increase our market share,
maintain profitability, provide good returns and build long-term shareholder
value, expectations with respect to increases in average selling prices,
anticipated cost reductions and their impact, and expected fourth quarter sales
and net income. These statements involve known and unknown risks, uncertainties
and other factors which may cause the actual results, performance or
achievements of Marine Products Corporation to be materially different from any
future results, performance or achievements expressed or implied in such
forward-looking statements. These risks include possible decreases in the level
of consumer confidence impacting discretionary spending, the possibility that
boat owners will not buy replacement boats as expected, increased interest
rates, continued increases in fuel prices, the company's inability to offset
anticipated production decreases with increased average selling prices and cost
reductions, changes in consumer preferences, deterioration in the quality of
Marine Products' network of independent boat dealers or availability of
financing of their inventory, and competition from other boat manufacturers and
dealers. Additional discussion of factors that could cause the actual results to
differ materially from management's projections, forecasts, estimates and
expectations is contained in Marine Products' Form 10-K, filed with the
Securities and Exchange Commission for the year ending December 31, 2004, and in
its Form 10-Q for the quarter ended June 30, 2005.
For more information contact:
Ben Palmer
Chief Financial Officer
404.321.7910
irdept@marineproductscorp.com
Jim Landers
Corporate Finance
404.321.2162
jlanders@marineproductscorp.com
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3rd Quarter 2005 Press Release
MARINE PRODUCTS CORPORATION AND SUBSIDIARIES
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CONSOLIDATED STATEMENTS OF INCOME (In thousands except per share data)
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Periods ended September 30, (Unaudited)
Third Quarter Nine Months
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% BETTER % BETTER
2005 2004 (WORSE) 2005 2004 (WORSE)
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Net Sales $ 65,032 $ 63,129 3.0% $ 215,184 $ 189,734 13.4%
Cost of Goods Sold 47,887 46,012 (4.1) 159,216 139,923 (13.8)
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Gross Profit 17,145 17,117 0.2 55,968 49,811 12.4
Selling, General and
Administrative Expenses 7,825 7,475 (4.7) 25,703 22,130 (16.1)
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Operating Income 9,320 9,642 (3.3) 30,265 27,681 9.3
Interest Income 350 139 151.8 1,053 375 180.8
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Income Before Income Taxes 9,670 9,781 (1.1) 31,318 28,056 11.6
Income Tax Provision 2,405 3,537 32.0 9,280 9,770 5.0
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NET INCOME $ 7,265 $ 6,244 16.4% $ 22,038 $ 18,286 20.5%
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EARNINGS PER SHARE
Basic $ 0.19 $ 0.16 18.8% $ 0.58 $ 0.48 20.8%
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Diluted $ 0.18 $ 0.15 20.0% $ 0.54 $ 0.45 20.0%
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AVERAGE SHARES OUTSTANDING
Basic 37,756 38,549 38,293 38,427
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Diluted 39,757 40,803 40,459 40,748
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3rd Quarter 2005 Press Release
MARINE PRODUCTS CORPORATION AND SUBSIDIARIES
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CONSOLIDATED BALANCE SHEETS
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At September 30, (Unaudited) (in thousands)
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2005 2004
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ASSETS
Cash and cash equivalents $ 35,389 $ 34,757
Marketable securities 217 5,291
Accounts receivable, net 6,120 4,762
Inventories 32,431 25,908
Income taxes receivable 634 945
Deferred income taxes 3,238 2,442
Prepaid expenses and other current assets 1,390 974
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Total current assets 79,419 75,079
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Property, plant and equipment, net 17,340 18,212
Goodwill and other intangibles, net 3,748 3,788
Marketable securities 5,806 5,762
Deferred income taxes 866 --
Other assets 4,150 2,488
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Total assets $ 111,329 $ 105,329
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LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable $ 8,549 $ 7,824
Other accrued expenses 10,762 9,158
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Total current liabilities 19,311 16,982
Pension liabilities 4,339 2,323
Deferred income taxes -- 772
Other long-term liabilities 1,604 1,734
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Total liabilities 25,254 21,811
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Common stock 3,781 3,894
Capital in excess of par value 17,522 34,527
Retained earnings 69,490 47,609
Accumulated other comprehensive loss (923) (515)
Deferred compensation (3,795) (1,997)
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Total stockholders' equity 86,075 83,518
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Total liabilities and stockholders' equity $ 111,329 $ 105,329
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3rd Quarter 2005 Press Release
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
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NINE MONTHS ENDED SEPTEMBER 30, (Unaudited) (in thousands)
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2005 2004
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Operating Activities:
Net income $ 22,038 $ 18,286
Depreciation, amortization and other non-cash charges 2,266 1,921
Other net changes in operating activities (11,390) 24
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Net cash provided by operating activities 12,914 20,231
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Investing Activities:
Capital expenditures (645) (2,146)
Other investing activities 283 (3,774)
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Net cash used for investing activities (362) (5,920)
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Financing Activities:
Payment of dividends (4,590) (3,086)
Cash paid for common stock purchased and retired (19,514) (3,544)
Other financing activities 326 832
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Net cash used for financing activities (23,778) (5,798)
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Net (decrease) increase in cash and cash equivalents (11,226) 8,513
Cash and cash equivalents at beginning of period 46,615 26,244
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Cash and cash equivalents at end of period $ 35,389 $ 34,757
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