MPX - Earnings call transcript Q4 2020 | Marine Products Corporation

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Operator

Good morning and thank you for joining us for Marine Products Corporation's Fourth 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 Services. [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 you, Thank

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

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

do a again, release, marineproductscorp.com receive you please visit for press If of our not copy copy. our at website, a

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

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

Rick Hubbell

of the XXXX will morning. our We CFO, results a Palmer, financial this thank release earnings Jim, you. quarter issued Ben discuss more our moment. fourth detail in in press for the

to start, and your success through this coming of appreciate dedication. challenging though, year I'd we year. in company Before during our our like through working continue We employees its incredibly positioned to efforts, thrive And for XXXX. the thank their is XXXX

retail dealers for customers' recreational a few during Now of second quarter. we XXXX our results interest on what Marine season. renewed for, represented rate than a quarter XXXX. believe, a to our the boating, quarter to selling response which Fourth Corporation's fourth orders will at We in preparation continuing XXXX in usual strong Products highlights fulfill operated production higher began as quarter dealers' we be work the and

backlogs. order low starting levels the historically inventory high are with continued dealer We year and

quarter. from quarterly With to compared fishing that a today, a all the We of yesterday quarter their prior morning of I will market boats I turn XX% to share cash that representing up to a increase Board number our share our Robalo continue this We am product regular that of share, ago. declared our in -- Ben sport the a it market announced over categories, from per Palmer. leading dividend our held category, in #X Directors overview, #X outboard $X.XX CFO, to but report pleased hold

Ben Palmer

to contributing $XXX,XXX, pension $X quarter which consisting reduce benefit a increased noncash to with million quarter Thank to million, expenses lower strong the of to of to to XX.X% the million increase boats the production, fourth fourth XX.X% resulting quarter the year. was Selling, by year. the planned fourth quarter some the of for quarter settlement fourth the of compared during of in compensation. an as XXXX, a increased in mix, million, These of of due expenses impact sales from a sales an $XX.X general of quarter compared of Unit administrative defined the was increased due the sales $X.X to model margin higher quarter and due in due increase XXXX. commissions effort to the such larger at plan. models The Rick. Chaparral prices an fourth net XX.X% Gross XXXX incentive were general larger popularity the demand. a in incentives sales from were These last assets payments expenses of increase of were with payments profitability, sales part and XX.X% gross last $XX.X percentage margin and year. sum was the and million efficiency from and Gross you, ongoing Net fourth were of by costs. profit of average selling, to costs, administrative selling compared lump Robalo. during our product of XX.X% as both favorable increased Also last of quarter fourth the benefits increase higher compared $X.X of and and pension in XX.X% planned the quarter loss

XXXX, the The the to quarter XX, share $X.X the $X.XX ended For income this quarter diluted the million, million an net of net XXXX. increase fourth fourth we of year. December of earnings of $X.XX year reported compared income in $X per quarter in were XX.X% in compared of to prior

was year-over-year rate tax quarter expect Our a effective And the XX% full fourth rate for attributes. in slight the rate XXXX, The effective was approximately tax in in the XX%. to during due rate of variance tax XXXX of effective XX.X% year. prior to we year tax compared changes

total quarter of of for increase to X.X% prior year. an of quarter, Our XX% sales compared international the sales during the fourth accounted the

sales international East. improved Australia and Middle the including in Our many markets, international

end the $XX.X strong to cash the flows million, of at in of compared $XX.X an at was reflecting the quarter quarter increase balance cash end business. fourth Our of million $XX.X fourth of the million XXXX, the

be very over high. back few it As remain for I'll backlogs that, order Rick inventory and mentioned, to dealer With to historically levels a closing continue remarks. turn low Rick

Rick Hubbell

Thanks, the is at well XXXX Ben. Products Corporation. starting Marine

exceeded leisure As setting because as a small the reported crisis within industry recreational an weeks activity continue and that a view levels it time. many home takes for ago, outdoor choice to our in place of first retail powerboat boating pre-financial consumers close group. to sales Several

consumers with employees the chain customers in supply as our shows industry our experiencing to We you environment imagine, with we strong monitoring constraints decisions is much secular The our are transformation. serve demand, making and as experiencing comfortable dealers Along might environment. marketing reason closely virtual the are been at this And believe labor work as and dealers, to And have along we as potential offsets our industries we to a XXXX conducting canceled. have every fact well-being, important purchase logjams manner. high this possible. include demand that increasingly favorable are boat in other this

to quality increases. we product prioritize continue We as production consider

may all pleased excited its of questions about our for #X joining I'd have. very products, we'll to you And you are us this category. happy thank be year. especially like once to in and about share are We strong morning, take and again, the market robotizing to coming any we

Operator

Eric first Wold [Operator of Your from question Riley Securities. Instructions] B. comes

Eric Wold

strong Congrats I channel? you and now the us sense levels first guess, inventory versus backlog give terms geared boats low obviously, back how inventories much is high. our you on order historically can of are question, your towards right in Any your quarter. remains noted, putting stock purchased that already production into of a

Ben Palmer

This It's percentage, is it's I and obviously it don't is clearly significant. to specific that's just give Ben. a but what's driving. -- unprecedented want

sold to dealers boats We our have large extent. on production a with prioritized based

it meet So trying demand, is to significant. that in very but consumer

Eric Wold

Understood.

and affecting get from abnormal larger boats. Was seen that to you've it in buying normally kind favorable kind And indication the or a mix behavior are a what model is noted heard how what have can this their gravitating consumers tight hands in purchase terms seen are behavior? you shift your of they of or what buyers inventory? from You of given an purchasing the dealers where

Jim Landers

Jim. is this Eric,

So the prefer hands not you characterize buying first answer on. I whatever as to it can your question, to get your

just of -- a kind of whether see say they'll play consumer just choosy, being It that's may a or we and But products shift are there. us quality, where our very general, And Let's where larger one. is hard they all is to to we're a could and try eager get say is one, for still take the and to into boating to hard demand boats they be. personally secular in it's that's consumers are those blue where we red change have -- looking kind where wanted and are making. we speculative. We're to they're we say for in without emphasizing of that a kind because too try I

that bigger with, outboard outboard engines more the seeing you're books We growing, boats frankly, back. with are just on noticing

easier I do. think that's to

it. So look of a well. as I best think that's But our that's kind possibility at

Ben Palmer

extent, with larger I closely to would many presold, already our then also very somewhat again, some add are the orders, and well. working prioritize we have to dealers as of allocate trying again, been to that, which models their with And

some well. impact as period, So that a can in particular that have

Eric Wold

just of then may much production on could you be Perfect. best what or what your creating how be these could question headwind margin long supply these guess, the I how doing? chain guess versus persist? more on sense any And final pressures, is And

Ben Palmer

question. It's reasonable a very

some the industry here and our have and everybody that We overall is slight through. hearing we're interruption there it's a suppliers experience from thus risk, manage going certainly far. something at Clearly, that to it's and

along. just our various meet the but We through our production trying trying address through quality, we'll that with we Just we can manage of things levels to in disruption. the to that do the It's our their have have gear -- reasonable keep and And We, working quantify, just able with question. day-to-day, suppliers maintain maintain hopeful we're customers. can. to to we difficult that challenges to like hopeful do that our will today. be very sure in We'll best you us, minimal don't can, they up to best we the know. at manage take moving it chain the it's have with suppliers -- very to as they can a imagine, point But have to I'm and we'll partnering hopefully are time, are demands supply this and place it

Eric Wold

there the chain areas last or or X this? that, issues [indiscernible] X parts seeing that main certain are now? apologize I And to kind right Is addition of where supply main you're

Jim Landers

we're now, few best there both potential the example have fine closely. engines right number Maybe we're very but that manufacturers. engines then the components constraint. of Eric, are limited watching on And a a a That's is windshields.

we're something watching as that's So well.

Operator

next Wolfe [Operator Fred of Whiteman comes from question Instructions] The Research.

Fred Whiteman

to that you grows wondering that just there sense. strong there industry strong the chance at sort on if about or company year slight are that talking could for little think industry Or we bit level? how either flat you helpful. XXXX were a Any But color Is given at I'm season a would of an XXXX, a which had was? mentioned retail makes just be declines? this a out you expecting build You

Jim Landers

Fred, this is Jim.

we're you XXXX willing XXXX, were of to if in to will grow think when I'd you So year-over-year, most good compare really that second shut but about including for XXXX, manufacturers, want of XXXX, be people, a us, industry down conservative part consider the quarter. to that especially

any to warring coronavirus in happen, see just XXXX, grow something But yes, over total we'll XXXX is So growth over that worse. definitely think or definitely Things else we systemic. getting XXXX. XXXX going

Fred Whiteman

for retail be I right? comments your you a assume will retail basis, as well, think On meaningfully that too? wholesale, up

Jim Landers

Yes.

Fred Whiteman

and Okay. mentioned as the move we a had into think lower benefit refill? Can sense. the gross the of some levels how you you will bit favorable higher? given year get that about margin next promo maybe how is headwind also about just we'll incentive that throughout margin some look incentives inventories line. you a That talk everything well, expect And you next environment think channel makes on environment start we is Should tight promotional be Or pretty dealer to too? year and do as little the in promo talking

Ben Palmer

production think being will to indicated, certainly, think be immediately be -- about with stabilization that as And dealers. the have our to demand our sometime incentives, will them orders to in I more early expect consumer, continue, a levels. than but Jim their of strong, continue the to with toward but with reasonable dealers inventory able back some headed normal will retail earlier would or 'XX. incentive I and normal a everybody with also would There'll we're as we'll there. I to sort it, normal inventory more inventory But to expect that, I'm I committed be going that still sell-out levels. expect work And think, work 'XX of lower sales, we'll I to sure I strong your perhaps, of it point 'XX, flows environment. already get very in been try back meet more

but those So a to still environment, it believe. I would expect favorable will normalize I incentives bit, a be

Fred Whiteman

efforts a far. sounds you that or boat us you've so like could if would seeing seeing maybe guys It great. replace some bit good done be there's on digital finally, add to or of on, detail boat but shows what some the color give digital the are you're shows just that traction anything else from there, then And more Perfect. you

Ben Palmer

to a of think really. with we something comfort by increasing line and nice that at improvements years -- and they couple the not just have might in purchases virtually large customers than looking considering closer Fred, getting finish ago. convergence have might a have I technology of they

dealers things. thing. good virtual with So their with They're shows markets. has good we've who the work department. got same our a closely some are trying That And come in do boat doing marketing we up to

right a working. it well doing can it's I'd rating, year of to I continuing various able intro interest on we was We be nice say now, And a kicked we the virtual flex as just that off. as the it. well and this sort off And it mediums test pretty bit that that and expected that and to a meeting, and through like In think all to sort have forth. of that with doing and we're we're so we're think kick so effort process, the Internet with I dealer out.

well. going it's So

Operator

call time. now turn There this will to for are no further the Jim remarks. questions closing I at

Jim Landers

a listen, morning questions. day. your has we We the Thanks to discussion, to everyone Talk enjoyed soon. you to you. this who Thank and good hope thanks everybody in called and for

Operator

and will completion replayed on X hours call. that within concludes today's Please this conference the call. be Ladies the of be advised gentlemen, marineproductscorp.com call the of

Marine Products (MPX) 27 Jan 212020 Q4 Earnings call transcript