MPX - Earnings call transcript Q2 2020 | Marine Products Corporation

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Operator

Good morning, and thank you for joining us for Marine Products Corporation's Second Quarter 2020 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 call is being recorded. Jim will get us started by reading the forward-looking disclaimer.

Jim Landers

morning. good and Amy, Thanks,

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

received our we'll comments then not a about at you've copy. our site, for and quarter, be If press available release, visit marineproductscorp.com few the Web for please We'll your a make again, questions.

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

Rick Hubbell

issued highlights. a earnings operational as quarter a our will this COVID-XX quarter manufacturing their our CFO, will briefly for relating to protect the shelter-in-place We this during Ben five in measure thanks. results moment. families order the We employees, for in financial release the our our more Palmer, discuss second morning. to press detail At our during precautionary community discuss weeks our XXXX of I Jim, temporarily pandemic. suspended time, and operations the

our in dealer to the March. As profitability maintained results. during in by and first XX%, Xth higher than at during quarterly increase result, quarter lower a to the we demand compared our that by income net May last response in production unit the net record income. We We noticed reducing but consumer resumed on financial late second operations almost operating year's board, declined quarter quarter second levels sales an declined which across and led significantly to expenses

the Our years. a was a their has our of end deal highest June, dealers during the quarter. in number order inventory of backlog great at second And it the of sold been

held second recreational Robalo its the be share the categories. a size And overview, pleased and same report regular end the of Board that We in also our in Directors boat at this share, our a turn to dividend it Robalo the to leader market to Palmer. With per Ben share over yesterday outboard that review category. share market quarter, dividend highest their to As of models quarterly will that the sterndrive previous quarter. I our Chaparral our announced boat the declared combination in Chaparral market of the in regular leader quarterly outboard of $X.XX outboard category. as I we be share morning CFO, a continues continues am market

Ben Palmer

such compared to the of due second of a record that the XX.X% to second compared compensation of for sales decrease expenses quarter margin by the profitability, compared XXXX. $X.X million vary partially X.X% declined margin Rick. larger during mix the expenses. in due were due by cost you, was the decreased quarter as by model $X.X the the year. a Gross a second lower million $XX.X and million quarter of XX% Unit temporary quarter, quarter favorable to XXXX. million, average of last $X.X prices production of by suspension profit as because quarter percentage quarter sales the during net in second the second Net sold a in These Gross during Selling, Thank production in $X while XX.X% quarter costs quarter. million, and declined of of the second administrative XX% and of a last to sales mix. offset expenses decrease with the second XXXX in was incentive caused of were sales year. boats XX.X% Gross XXXX, with compared interruption quarter to favorable warranty the model of inefficiencies the second general to quarter selling manufacturing of decrease of increased the

expenses furloughs in to the the due from expenses and to these net resulting during reductions sales XX.X% quarter. quarter lower XX.X% related expense employee In second net of compensation to of other suspension the XXXX of XXXX. were of declined temporary addition, quarter second These in operational sales compared the

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

Our effective tax and rates XX.X%. were XXXX during XXXX the second quarters of

decreased international quarter, of and XX.X% consistently international markets. all during total and sales the for of fairly decreased X.X% our sales Our sales international by across accounted

cash end second at $XX to million at $X.X XXXX. of Our balance of was increase quarter million, second the an the of quarter the compared million $XX.X of end the

were lower year. XXXX end the of the of last or significantly the the of levels quarter second As this end quarter first of second than Rick inventory of quarter at mentioned, year dealer the

units increased to of quarter. lower And than few over boat with closing and deliveries production inventory has back and a years. now been during the for demand reported very that, low I'll the in field it at of it the many order dealers remarks. quarter, turn our Our was backlog our second in higher Rick end Because many of

Rick Hubbell

you, sought extraordinary on dealers Starting Thank as response in in focused pandemic. to demand our Ben. concerns consumers late outdoor surge activities and the markets an homes in most in the over second safe reported of March, COVID-XX

they out our of In products. sold fact, completely were a that our of few reported dealers

for prudent resume industry which traditional same even do the peak remained during is increase the was eager year-to-date external soon may pleased last demand production our environment the over as to in environment by meeting thank based three appeal strong us products, retail to but it production during as So on like for June we Though remains though three third sales, remain This enduring Last we dealer of sales midst recreational June we American so. to fell to with schedule. sales, week, to received passed felt confirmation we you questions happy the to are cautious for experienced morning, have our season. with have we quarter, take the This selling and The demand have. demand retail boat look that are forward of XX% we we'd you June the and for current preliminary increased in be this uncertain, boating that resumed strong joining noted months. contrasts and I'd encouraging any uncertainty, consumer. compared categories, macro the the Dealer of very to encouraged by our we near-term X% selling our by XXXX. the we we the were the global of categories. we

Operator

Riley. Eric [Operator Instructions] with line the B. comes Your of Wold first question from

Eric Wold

a categories maybe something I kind out year? June talk next hearing numbers anecdotally where of into weak there on of that consumers -- that comment first, had this that with kind prior that I'll saw about kind start that shift guess, last showed to preliminary up came difficulty] are recently the June we're question [Technical in looking you is to about [Technical seeing [Technical June. we the potential is of guess, difficulty] been difficulty] for that out data I

Jim Landers

Eric, this is Jim.

that. for part out of a faded You

real question the rephrase me quickly. Let

I how might see if that Tell but what continuing think be if hear everything... we June? if we I'm June, beyond maybe, that you're me or asking wrong, didn't trajectory

Eric Wold

exactly. Yes,

is boats recently buying terms they may phenomenon the Just the been been of or consumer sustainable have of kind of with possibly you that's kind come seeing out of think kind a in inventory mix that's buying more before, that there. do you not short-term something

Jim Landers

term. feel boats awfully know what who for and about they've about don't it's now. pretty asked checks the don't are We come is. they know right population strong for sustainable there of done time. near the future. uncertain months. for for ordering We know, But Well, a to dealers us don't us deliveries that they've our is think of people that this number a We write won't some because good lot the know an want total We

we So I wish better had answers.

Ben Palmer

I'm reported well. question ages of Eric, all all picking boats, across categories, all is up your boats, Maybe of on dealers sales everything. as Ben. Yes. strong if this The very the essence

on the future the dealers in we'll see to be and of a the in are the dealers. already assess relying sold So boat that by we lot, been selling they obviously are the weeks much boats what delivering models, have types today sizes, that coming and building

want we'll be to of rebuild make boat which they're and what to in demand, help their in in term, styles be in that the going they'll inventory. very terms rely to determination not their for terms of Longer they on place long. inventory orders will So models dealers to -- again, dealer

and of out us. some and creates is So which this in or I'm position clear a sure will inert reasonable the a dealers inventory might a for have around a it, fabulous which question, put otherwise been but sitting opportunity that while, great deem the we them it to to great have deem opportunity phenomenon also -- benefits

So we're very pleased about that.

Rick Hubbell

is And Eric, Rick. this

surge of seen buyers that that encouraging in other thing first-time not we've seeing while. there's The we're is a a

So very that's I encouraging. think industry, the for for us and

Eric Wold

appreciate I No, that.

in? kind the have long somewhat happened of answered I their lot be is be of to boats can little your you'll us already a think is of guess, back question my we inventory saw of you give year kind sold stocked kind industry manufacturing what last bit. going manufacturing what how you've now Is inventory? will the the back Or what take I you in terms it of been last in next how past in stocked that still dealers to sense think a it year a you sense from to to And minds? given of cautious? to done be

Ben Palmer

of are into of And Eric, already at that the certainly there least, dealers. I'll indication the is relatively have A the long lot in long been from the this take is -- lot that production boats -- a that's a current -- sold, one. that's Ben. backlog. a fairway, that going already

respect on this years is and X/XX been the the what time X/XX and after how for long number of a reflecting to period that So, will we've demand happened last, event. that great. after With lasted

at will the a hopeful be we many weeks. will backlog here. this but for have, case future, do delivered point, we of the again, tremendous not many know we're which Obviously, be until that So, won't

we'll the be to have appetite spring their the feeling continue So, dealer and any is I'm see and move interruption where that. we hopeful we've at and election to unfolds and only see over things. they're that the to as and behind Obviously, inventory next is got all, uncertainty how forward. up if temporary us too that can coming that would there's get and what just winter about

certainly and consumer our planning longer-term meet what level pretty maintain do of the the perspective, in to to need given a we to for about able fill health just But things longer-term again, do to want from but is temporary also a these all able respects, to orders many standards be this for all So, our believe the retail do smart we to we very the ramp the be good we we quality the a from dealer reasonable the and are longer for feel ramp blip. that -- future we're we time we up going demand, than to company. That thing but typical frame. trends, wouldn't want us not to next the and production to can't demand

Operator

instructions] [Operator Landers there for further over no closing call I Jim back to will remarks. the questions, turn are As

Jim Landers

Thanks, Take has interest appreciate everybody your our a morning. listened Amy. this company. in hope day. and care. for in who else you, Eric, Thank We good everybody And

Operator

conference be Ladies the within replay of conference as for behalf call participating. Marine Corporation, call. marineproductscorp.com two reminder, this call. hours the and completion concludes thank gentlemen, today's This you a on Products following will available On for of

may now You disconnect.

Marine Products (MPX) 1 Aug 202020 Q2 Earnings call transcript