MPX - Earnings call transcript Q2 2019 | Marine Products Corporation

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Operator

Good morning, and thank you for joining us for Marine Products Corporation's second-quarter 2019 financial earnings conference call. Today's call will be hosted by Rick Hubbell, President and CEO; and Ben Palmer, Chief Financial Officer. Also present is Jim Landers, Vice President of Corporate Finance. [Operator instructions] I would like to advise everyone that this conference is being recorded.

Jim will get us started by reading the forward-looking disclaimer.

Jim Landers

good and Brian, you, morning, everybody. Thank

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

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

not our www.marineproductscorp.com you've a please copy. would for quarter press like to and questions. available If be the make your received release website, and our see We'll will then few about it, for visit comments at we again, a

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

Rick Hubbell

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

Our another a increases the increased during record accessories price of in These second and boat increase offset XX% partially quarter. and the level. quarter in average per in parts represented net to a sales an due sales. Net X.X increase sold the decrease were by sales during number selling units

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

the the Robalo share, share ended a hold category, of continue Chaparral months a quarter. morning the announced board this to directors combination previous quarterly And that category, X.X%. market dividend for per the outboards the its brand declared overall now in We same as highest share as hold XX.X% highest its regular outboard of the dividend and in quarterly our $X.XX yesterday in market of of our market with regular products with the the sterndrive Chaparral's Our of market position share XX. XX second-largest Robalo position X.X%. its approximately a March maintained in

that will Also in quarter, turn I Ben over overview, it shares repurchased common market. we first CFO, the XX,XXX of now Palmer. stock our during With the open to

Ben Palmer

quarter an the you, sales pointed million, as Average sales X.X% Thank and Net focused Unit decreased parts the sales XXXX compared season. on models increase $XX.X with lot out, the and by during were, demand our selling larger models. quarter a Rick accessories newer, of record consistent selling of a of increased as sales of last XXXX at we XX%, to for as larger there retail producing was increased second prices year. Rick. of where second well

Gross profit higher model of with of quarter XX% million in compared in Gross profitability, this These second second administrative mix. XXXX, and to XXXX the incentive quarter the quarter $X.X costs our and as with increased compared research as compensation, with $XX.X expenses $XXX,XXX increased the quarter increase an development. were expenses of with due XXXX. expenses and increase was of an sales as second the quarter the support last year. increased the X.X% during that development model Selling, to such in due in favorable second to second well new of compared margin general quarter to million, XX.X% of $X million

Interest the of second $XX,XXX, $XX,XXX second quarter was XXXX quarter a last of 'XX As percentage sales, to year. second in compared of of to the slight increase income quarter second net quarter during the XXXX. the during expenses in compared increased SG&A XX.X% a X.X% with of

in of the of of share this to million earnings the XXXX, second $X.XX $X.XX ended of $X were quarter quarter June the the For of XXXX. in increase quarter second in reported per XXXX. with a million, compared second net net record we income quarter XX, an $X.X of income year, X.X%, compared Diluted

rate In declined Marine to with of XXXX. XXXX quarter increased X.X% compared represented domestic quarter International XX% sales decreased Our net second in by of of year. of the last to quarter markets. of of sales by the the sales the quarter only the sales international effective second prior in second in XX.X%, this of contrast, tax second second quarter compared international and in quarter XX.X% second XX.X% compared Products' the net was XXXX X% of during year, sales during of many year. our the

more be impacted our in Canadian was effects continued which by pronounced negatively markets, decrease sales to The tariffs. lingering of

decrease million the at securities quarter a of cash $XX of quarter the $XX.X second of to was at Our and of compared the year. end last the million million, cash marketable balance end $XX.X of second

marketable requirements, balance as and repurchases working because Our for during cash higher quarters. securities of capital and dividends higher well previous as decreased used share cash the

the higher XX, time the June lower this first sales during strong of indicating dealer but As season. in XX% this at than retail XXXX, of than at were inventories quarter, selling slightly approximately dealer end 'XX,

at it to I'll at over Unit With the quarter the last turn back was that, Rick. backlog slightly than of year. time lower end this

Rick Hubbell

thank you. to XXXX dealer at look annual models conference next We dealer Ben, network our our forward our month. to introducing

customers, several we to see are developing reaction. we We to appeal believe our which are models, dealers retail their will and new and eager

haven't retail while the some have in the recreational that hard aware we which noise, them weaknesses in are interpret. to seen points recent indications and reports May the of weak often discussing market sales make and any short-term boating of note data June, We

can and our for lines this to our markets Brian, closely joining assessment dealer during we their listening conference. of now. thank the to questions be I'd up like us We'll for open dealers' morning, you

Operator

Please, first Wold from We go ahead. now question Eric our from take instructions] B. [Operator will Riley.

is open. line Your

Eric Wold

of questions. a guess Good can not in be obviously, I tough you're and morning, the the made any A basis. trends on couple you. about sales guys. your Thank comment you short-term weakness seeing data

you into are that And and last then any now we're to Canada I that strength point having the caused What some you'd know around in country? kind still And results maybe lingering effects your is kind or until you maybe regional in Canada are of Can seeing inventory the of question, when kind expect kind from there the then weakness kind get outperform growth general? seeing of to normalized what to of rates? you of of QX, through tariffs kind to there maybe flows up more mid-quarter. a are

Jim Landers

Eric, this lot there. questions is Jim. A of

to take Let's at happy I'm to. try them a time, one

out our share in areas, issue category year we of the we hold models us, retail continue In terms XXXX and new and that doing, have as successful some sales couple we've of we done for that different called for the to a model the we're been how have in discussed. highest market whole

that nothing we which outside there's in make any seen But we changes. come to We to have would us of markets. our recently that just want weakness which to out, any do haven't wanted acknowledge we… immune reports, that But those emphasize

Ben Palmer

pretty yeah. there. I little recent the no Canada it's strength prior the a or then, regional to consistent weaknesses with provide. question bit It's change And a color changes at year And this We're and then not over tariffs, and about really good and respect to different real particular quarters, questions. to so regions you any of lot think seeing Not then -- about hard kind tell. And whole of point. asked Canada. Both in

a again, international our number. sales, Of small is course,

from ago relief few There Canada. months a some was

We orders be to that dealer it's well. there We're haven't some seen but terms yet due specific of improvement, in that. very flow-through as hopeful the will

of of orders unfortunately, benefits So it's total. the us dealer coming a in be through that percentage for that and we're we terms orders can't will international seeing say that again definite small positive a our

It's a spotty -- the little bit a visibility into little that spotty. bit can

So unfortunately, point. this at really provide that's can all I

Eric Wold

No, strong that's very congratulations the helpful. And on results.

Ben Palmer

much. so you Thank

Jim Landers

Eric. Thanks,

Operator

our from Please, Mayfax [Louis Mosher] We from will next Investors. go now question ahead. take

is open. line Your

Unidentified Analyst

saw Nice of I was the morning. closely any followed very and Good is which up company knowing so? buyback has if possibility very, of I was doing until interested good. in a report If that there company today, your too not, stock, earnings. the -- program haven't I

Ben Palmer

quarter, repurchase shares. little during a is place. a We buyback did XX,XXX over do that have We shares the program some second in

to that is we closely something that try something shareholders. routinely So that some to to watch return and is do do we cash

the year. XX,XXX that's this second during of quarter shares So

Unidentified Analyst

What's the potential? total buyback

Ben Palmer

can have, to well easily we that by go authorized over is the think we back have the a board and Board, but million I we directors. of

current So the the under actually authorization. $X.X exact million number,

Unidentified Analyst

Yes. this I anomaly question follow to last that the Is quarter? do an you be, guess Or the would consistency analysts forward? is this going unusual? stock see any it nicely,

Jim Landers

interference some had think here. I we

Ben Palmer

of your that question number covering correct? was Is us? about analysts that the And are

Unidentified Analyst

of an and your the so if for got in trend considerably of inasmuch couple I high they the -- as a continue? report. beaten estimates this the to basically No. is for their estimates was earnings there were this if quarter sort that said versus quarter above was wondering I you've earnings were anomaly analysts going

Jim Landers

Landers. guidance. is do this We Jim give Louis, not

So quarter. be who Since know what we're two mention quarters them the second quarter that recently. not think to able new going to talk usually we The be. We've is business. our our to the you're story, we follow seen might They going are coming great. to seasonally about best us analysts are

ask tracking. to and You about estimates would them their they're how what have are

Unidentified Analyst

much. very Thanks Okay.

Jim Landers

Thanks interest. for your

Operator

next We our ahead. instructions] go Ronald Please, question Bookbinder take Securities. [Operator IFS will from from now

line open. Your is

Ronald Bookbinder

especially were. from given yes, And reports nice morning. Good Data a quarter, congratulations on what Big the

seeing, Data is aluminum the what biggest larger at is compared Looking what to it compared where boats versus Data are differential or you was you saying? fiberglass, boats, guys do Big think the smaller to Big

Jim Landers

not sure saying. was we're what Ron, Big Data

think about segments than of worse. if we What helpful. certainly market or So say not don't is to doing know reasonably I other are address And I'm the about overly us that. we boat can better that

pontoon pretty all boat data strong little just access The has performed has we I'm reports -- right strong, strongly. market or a that now, ski/wakeboard less but we maybe all aluminum have repeating been to. The have market

metrics. that our have we So for of helps -- and well larger and the done us quarters feel two first and about it from year, That that. financial good this boats

Ronald Bookbinder

from down and you next primarily to stay we bounce you expect because of might Okay. this back And lingering it it's tariffs. international, so think or Do much that the as do year, effects, going Canada been you forward? said, level the at

Ben Palmer

sales. much to percentage years net small This still us. Ronald. ago, XX% it's Ben, a of Again, relatively hard say. for as It's is our it was as Several

been grow weakness able the to we've to through internationally. domestically overcome So

In terms again that -- it's headwinds, seen of to in about earlier picking talked year, some our any seeing what's that particular, I we've in uncertain. additional about of the orders immediately. Canada with up. not next necessarily We're some rush going not despite dealers of signs it's happen clearance

it than it's -- be turn our will been contributor would the international we us, quarter. next that expecting year, not any at better, for different to around we're we hope significant point, has but So and this a in recent most results

Ronald Bookbinder

newer going And it to you a is larger to look as models continued forward? to outboards develop, shift still to going be

Ben Palmer

I folks take advantage for that. At move this are the so to our able hard yes. pivot really really and outboards, successfully mean, and worked have and trends, -- point, to been strong along we've which we've with of the

And we think to will continuing so this and the new we at got we've be out sales. And a see help yes, to continue models our both that good larger product support strong. point outboards there

Ronald Bookbinder

labor, any continue labor yet higher? that to or you have And in seen does relief press

Ben Palmer

retain inflation. know challenge. forth. picking retention to it that challenge. perspective. see call far meet In adjustments programs, a looking and but something that some, the quality, don't up there's to but again retain our of if thus obviously if it's retention And and quality we're -- -- terms pressure, employees employee compensation and more continues wage trying don't But we at compensation to there's There some and there've I upward to made, We've to, and respond the been is huge we're necessarily so attract we've able ability I from been a be labor

Ronald Bookbinder

Great. the half Okay. for my taking you back for and Thank year. the good luck of questions,

Operator

[Operator instructions] Riley. question from go We'll now take Please, ahead. B. Eric from Wold our next

open. Your line is

Eric Wold

boat there out a large in other think versus Quick the that buyer might and function be it a Or being question. just models is demand, consumer larger hesitant the new but guys. is boats is one you a follow-up is purchasing? answer, rolling function the where any more in of -- the smaller strength and Hey, you're where thanks, that's you're tough boat of function? seeing of the migrating This not that's to

Jim Landers

that year, trends focus Eric, of this a is market are on Jim. the think result that We and we've so and successful our successful designs discussed -- products. our this

I'll trends. our larger doing consumer think I cautious results that. difficult about it's to to just any be extrapolate

Operator

be any to appears there or no additional back time, further to this questions. Mr. closing turn for At to conference remarks. I'd you, the Landers, like

Jim Landers

this appreciate a who very you will you your we talk called appreciate morning thank much. day, Brian, to it. has in for everybody and questions. We good everyone Hope We soon.

Operator

that reminder the the on two will completion be a call. the as www.marineproductscorp.com of call replayed within hours And you. conference Thank following

Marine Products (MPX) 24 Jul 192019 Q2 Earnings call transcript