MPX - Earnings call transcript Q2 2018 | Marine Products Corporation

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Operator

Good morning, and good day. Thank you for joining us for Marine Products Corporation's Second Quarter 2018 Financial Earnings Conference Call. Today's call will be hosted by Rick Hubbell, President and CEO; and Ben Palmer, Chief Financial Officer, and present, Jim Landers, Vice President of Corporate Finance. At this time, all participants are in a listen-only mode.

Following the presentation, we will conduct a question-and-answer session, instructions will be provided at this time for you to queue for questions. advise recorded everyone today. to call this like being is would you that - conference I Jim, the forward-looking get disclaimer. will us started by reading good Thank and you, morning.

XX-K, we a on to our this remind other may that be I'd like and the Before like nature refer that known call today, press and and outline in today, some risks. reflect statements make to that our of filings release of to risks. will we forward-looking started get number you XXXX everyone SEC issued those I'd unknown

are www.marineproductscorp.com. which of available All on our at website

If release, at website received you www.marineproductscorp.com not our please visit copy. press for a our

a we’ll comments your for will the quarter few be make available and then questions. We about

and Hubbell. I CEO, Rick Now, the our turn will call over President to

Rick Hubbell

We in release the Jim, this momentum. of our issued second quarter Ben press detail this discuss time, CFO highlights. will will discuss our more the a earnings XXXX in our for morning. operational Palmer briefly At I results thank financial you.

Our XXXX. and breaking set the quarter of increase sold our units second the increase in X.X% per primarily the net previous of second quarter, in XX.X% average increased sales to a selling record increased boats due XX.X% sales in price boat. a Net during by

We product share market categories. be continue our to pleased of all with the

continues category. Robalo’s share approximately outboard sport their Our the the Chaparral market stern ranked drive grow XX XX, products number the is highest XX.X% now for category, XXXX. in ended continue share in as hold fishing market three to months it March to

and XX outboards, the Chaparral market Suncoast foot our the share to outboard Robalo in to outboards of boat fiberglass numbers a the holds testament As of combination two Chaparral success models XX category. now the

Also morning open Palmer. in of per to quarter. will also that market. a dividend the now quarterly turn repurchased XX,XXX common directors consistent CFO, regular board call stock second the over dividend of declared shares Ben issued we share with $X.XX last quarterly during the quarter, our announced of the yesterday this We I our

Ben Palmer

in second sales general of the million, as an increase second quarter million XX.X% an Rick. to costs quarter the decreased second sales leverage quarter second net several the are in of during as was well quarter million, XXXX. of average over the sales prior quarter slightly increase, second of margin this with quarter, of expenses compared profit quarter approximately X.X% an compensation, to in due ’XX. commissions to as unit profitability, you, to Gross increase expenses the and to XX.X% vary to of including net XX% XXXX during were ‘XX sales. Net Higher during expenses $XX.X quarter net sales compared contributed Thank due short higher for the second of selling Gross net of compared of expense. in the sales second the year. percentage compared quarter higher second administrative XXXX, of and were fixed incentive $X.X term. XX.X% prices year. the declined SG&A Selling, that increase XX.X% to last the the relatively XX.X% that compared and second warranty of of were to a SG&A to quarter $XX the higher

second Diluted quarter the last year. XX.X% million $X to XXXX, second Net the million. quarter the of last of earnings or For per of share to increased by reported income compared June increased compared quarter of XX, year. XX.X% ended net $X.XX $X.X income $X.XX we or by

International international income were quarter Our recorded EPS net earnings sales and year-over-year and and share to tax improvement in net we this previous sales Contributing total share are the highest of industry, in second the developments XXXX. Canada. been in last the recreational international earnings rates. closely the X.X% of monitoring second during Sales with else per quarter year. second boat income in trade. per the records, income our and with the sales including also increased compared several represented quarter of net quarter having lower were corporate of net XX.X% markets, of in Along to everyone

March. recreational European U.S. As Union and profitability are levels. have and many our current our steel XX% retaliatory several potential several XX% you impacts Canada, remain there Mexico boats. We tariff partners, imposed aluminum recently probably that worldwide including know of on U.S. the at believe worldwideX sales if the tariff on trading on a implemented and including a retaliation in tariffs products, on In tariffs these

prices aluminum aluminum our during products. past of in have the and worldwide several use manufacturing the months increased First, we

a addition, this issue is we the those backlog. exported competitive than the strong will products Canada, European less and high have demand that to periods. to domestic Mexico be markets order previous In our Union believe that To and in in offset U.S. we fact

approximately June sales these XXXX total of months X.X% six from partners. the XX, net trading Products generated For ended were three Marine

end $X.X Our at the quarter to compared $XX.X of of million cash the securities increased of to second to compared the end second the of of quarter prior XXXX, million an and year balance an the and $X.X million last marketable quarter. increase increase of

to enacted $X.XX. in The Tax last the for quarter by per Cuts XX%, XXXX, year. in fourth XX.X% increased the XXXX declined of rate lower effective quarter year. during diluted rate significant quarter share was because quarter the of The due decrease last primarily the Act in rate tax approximately the second of to quarter tax reform tax of second Jobs effective and tax compared second Our a second of earnings effective the

retail over compared remained inventories few last XX, June turn of demand time only comments. XXXX, it to slightly this As as year, closing I'll were to higher a With for strong. that, dealer Rick back

Rick Hubbell

Thanks, Ben.

confidence, the catalysts market for ago. many good real record We are the XX employment net consumer stable for our years sales, our earnings values set report share selling are and Strong during and beating a second income and record in per pleased environment to estate products. quarter, previous years strongest

models be we'd introducing their to our their in will sentiment few of holding new Thank Dealer look happy to dealer assessment Conference consumer you hearing have. be we individual us forward may in joining as morning. this and any you XXXX to And as We network, markets. our our well Annual for a weeks take questions

Operator

Instructions] Thank you. Wold Please Eric go We’ll first B. [Operator ahead. now question Riley. from our take from

Eric Wold

and a Thank strong congrats you. on Good quarter. just I morning think… very

Rick Hubbell

Eric… Hi,

Eric Wold

kind for of you our are? tariff’s going help in kind U.S., and kind issues, proactively dive retribution to do the more it the final point. then and little at kind of they the tariff’s fluid Anything want to take or to you rhetoric as what be you or bit in to on could impact going and the tariff’s, those from the does this Obviously, [ph] here ahead what And price tariff completely risk? offset a kind wait of was that the it just do of is more would to a as bit of I known and Yes, the keep not of you everything if markets know offset Would of the little expectation of kind issue. international something are of a [ph] current issue, the or full knowledge expected come see, of is. could what kind you

Jim Landers

is Jim. this Eric,

tariff to it, angle And place difficult you it’s very we've on of at in kind every fluid mentioned as our say very this Canada - know, of looked of as just this is put You largest they export mentioned. at Xst. point. markets it's July one it's Ben

of manufacture that's boats. So or being exporting use thank in we huge But demand It's less fewer aluminum though, in a issue for do know. not our strong the goodness amount products. an than We not you products, here the not of U.S. to export know in able so

a answer quick sorry So we have complete you. don't that's one I'm more answer, for

Eric Wold

or us remind of cost of... aluminum percentage of you can what is So the

Jim Landers

from party know, of we've fuel third don't of aluminum actually you our buy we on a We made know can the that. trailers We made content tell component our are that It's tanks that hard are every our to and boats. aluminum of of aluminum. worked

happen. we know, engines haven't instrument seen prices in an it that don't yet, done things, increase we content just work. haven't cetera, other panels, doesn't won't Aluminum mean that We et just those but and

Ben Palmer

reasonable mean, it's I reasonable this we a Ben, Eric, it's very, directly. is that in suppliers. buy components – use We very bought a the question. it’s And really that we aluminum our from little

us And then it's really is know, those of for discussions have so time – when we'll And comes. see them. see the wait the and what you on more impact a

we do know and suppliers through going impact but the year. there And in discussions work with reasonable be. what don't regard be So know, I question, to you it like we we'll expect a number of yet will that each is

Eric Wold

enough. Thank you, guys. Fair

Ben Palmer

Sure.

Rick Hubbell

Eric. Thanks,

Operator

from We will Ronald question now next from take Bookbinder Securities. the IFS

Ronald Bookbinder

on that this continuing what taxes, aluminum? think the overall cost would that a given percent the it's only you increase of Yes, the percentage boat of of do so the

Jim Landers

me We the the component – cost the the some Jim. larges small. – sure, Ron, single very this in our is component you in know aluminum is number, give but engine. And largest but point, very boats cost it's cost The there's don't a just single It's very I'm component largest small. that let little. single

we in a full small were is of it that what interest just mentioned about for there. the Ben us. just So cost disclosure doing

Ronald Bookbinder

into X% total the small of cost sales, correct? - the going I think, lastly, your And only of it's percentage

Rick Hubbell

Eric Canada. going export of I That's six net over represent of of our they'll six probably be to a the and correct. total be of that We a that Based going sales. see, wait on it the consolidated the side months. its as X.X% International last believe X% relates that our case, I net there months be sales last to X%, X% sort the think and sales think lot to only is markets, kind represents months, like particularly this - international six for on it think sales of little I to mentioned

already their I probably of they've they think boating with of ordered boats they many the season. that taking - delivery

some to out. let shake So this time I think there's

wait there wait of and So I sort think see. will a lot of - be and

minimal bit manner to have are but be - deal point moving aggressively will forward hopefully out ourselves a impact, it hopefully some we to at and with know will little to ways it We try figure you don't time this at of We in - know, not we and resolved think time. to have tariff. this

is sales, other if wait partners you and absorb dealers I U.S. and otherwise know, that demand think in Jim much work not of enough with absorb So my to hopefully comment, the as in here and some these from indicated indicated be strong I hopefully export and maybe would impacted see be our what and be would this more will U.S.

Ronald Bookbinder

continue you forces? do to to operating for manufacturing continues And the Okay. you leverage, margin of and time think think the expand, is what get as operating the potential tariffs and period cost the is the do that outside over what longer - excluding you

Rick Hubbell

We about better lower gross sales I in several continue XXXX, you our expect margins than in record for to know strive our been in back they we'll were have back the years XXXX. talked last margins.

know, boats with larger think sell I prices. higher selling you we’re with larger tending average to boats

to some so there closely are to gross continue working our costs manage our with I and expect our upside and always on quality. And margin, workforce we’ll

we it's there that's up So mix, larger margin the this and the helpful. to but point but product moving to I vastly is increase on been considerably and some think opportunity boats at – are

Ronald Bookbinder

in the nothing the to that providing is [indiscernible] that there that 'XX compared from said back to 'XX? [indiscernible] levels or -- that value You you getting you're mix can different

Rick Hubbell

Right.

Ronald Bookbinder

more And moving terrific. Or at looking become outboards? to are outboards the Well, the it you is? toward the much stern mix than more -- as are drives, all holding of lastly, the Chaparrals And the you brand what right. pretty popular

Ben Palmer

be obviously think Chaparral us, make outboard putting so okay outboards here see there have that yeah, engines additional continues more continuing, right we’ll we balance. we'll struggle will models soon. have that outboard, trend Chaparral. dealers is share I I in some Chaparral opportunity find to stern be But with we with our overall. with drive some a is think that But to - things, to exciting in We continue more models the and with at there

Ronald Bookbinder

the in great. you Okay, luck much. very quarter. on And good Thank congratulations the and quarter new

Ben Palmer

you Thank much. very

Ben Palmer

Ron. you, Thank

Operator

Mayfax We will Moser next from now Louis question take the from Investors.

Louis Moser

morning. good Hi, Yeah.

Just…

Rick Hubbell

Morning, Louis.

Louis Moser

[ph] fund sales U.S. or in are incorrect? percent XX% the U.S. sales the that Answered is versus X% overall versus

Ben Palmer

its think We last quarter right. in That's XX.X% sales I the was it current international - X.X%. - six the for were months

Louis Moser

quarter generally seasonally quarter Next traditionally, a that is lower is correct?

Ben Palmer

your that was quarter, question. Third

Louis Moser

Yeah…

Ben Palmer

Its a That's that's a sales natural – slower quarter. correct. yes,

Louis Moser

on retail your situation? maintain happens you raise your situation on to recoup whatever Okay. Based trade on lost to whatever the the market, export with prices can is

Rick Hubbell

Tariffs.

Ben Palmer

or have that would on - an have in would certainly could our our talked consumer. XX%, I option but be certainly that The it difficult. three not that markets. partners that think the that pass - dealers impact, I and it XX% we - would think I'm demand dealer that's along XX%, we an But at about those definitely to impact particular some

So concerned sales not at that, of of point about years blessed international than less much was are clearly we're sales, this component of we're that guess the total that our ago. time sales a international a I in significant number it

later. hoping and resolved of be maybe will it can there gets tariffs rather So resolved maybe it trading again, partners some and just the equalization sooner get than we're between

Louis Moser

Thanks answers. Okay. good. Very Appreciate very much. your

Ben Palmer

Sure. Thank you.

Rick Hubbell

you. Thank

Operator

closing to call for remarks. hand [Operator no to Instructions] host As there like questions, I'd your the back are further

Jim Landers

Thank in good to has questions. Talk you Thanks. for Thank soon. you, called and We hope who day. everyone the Marian. you, everybody a

Operator

call the you the two conclude Thank conference That be now on would disconnect. will you may Ladies hours of conference call. participation. today’s completion The within www.marineproductscorp.com replayed and for gentlemen, call. your following

Marine Products (MPX) 25 Jul 182018 Q2 Earnings call transcript