Earnings call transcript Q4 2022

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Operator

Good morning, and thank you for joining us for Marine Products Corporation's Fourth Quarter and Year End 2022 Financial Earnings Conference Call.

Today's call will be hosted by Ben Palmer, President and CEO; and Mike Schmit, Chief Financial Officer. Also hosting is Jim Landers, Vice President of Corporate Services.

At this time, all participants are in a listen-only mode.

Following the presentation, we will conduct a question-and-answer session. at for provided up to be questions. for will that you time queue Instructions to that advise is like would I everyone being today's recorded. call conference

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

Jim Landers

morning. Thank you, and good

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

received not press you've visit our our please If release, website.

we non-GAAP non-GAAP is in without In various to structure. refer us regard today's it earnings measure over changes operating this use EBITDA, compare a release measure We because to periods to performance. allows call, conference consistently of capital which performance our and

issued this financial measure. website to if is calculated. GAAP nearest press non-GAAP how contain the seeing net review income, Our this measure in this of morning you're Please disclosure financial release it's reconciliation which a our interested and

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

call I Palmer. and will now President the our over turn to CEO, Ben

Ben Palmer

for and the thanks, for call everyone thank joining Jim, you this morning.

earnings quarter Let was morning. highlights me few begin press release that XXXX a our fourth regarding this with issued

production to a This the benefit number sales to our to quarter chain us improvement net Marine in we quarterly plants, and our our were during led and fourth issues future in allowed dealers. Products efficient generated us larger quarters. availability. in our also Corporation This should record manufacturing finish of supply in as boats them transportation deliver experienced which more completed that substantially inventory

Average cover favorable components. costs, price increased to to due implemented materials increased model labor, selling a and increases mix including and prices

impact any despite of highest in unit two fourth quarter the the quarter sales were XXXX, of Our holidays.

accommodate increased boat begin In and allowed season. spring for the dealers prepare the the selling winter shipments unit during XXXX quarter our to shows retail upcoming to addition, inventory their building the

that We of declared cash per our yesterday share. this also a announced regular $X.XX of morning Directors dividend quarterly Board

I And Mike call CFO. would the over overview, to to that Schmit, like turn our with

Mike Schmit

start overview Thanks, an Ben. the XXXX I'll fourth results. with company's quarter of financial

the increase by selling Net fourth average compared XX% were quarter increased sales $XXX.X year. sales a for boats our Unit fourth record XX%. to of million, the quarter XX% last increased by a and prices

increase to Gross of fourth XXXX compared profit in the $XX.X quarter the quarters fourth the XXXX. was Gross fourth quarter margin and a XX% during both million, was XX%. XXXX of

with administrative profitability, increase increase warranty general expenses. and expenses sales $XX.X typically to the due of $X.X quarter to of compensation, is commissions such XX% costs million were that last million, incentive as year. an in increase This Selling, compared and sales fourth higher and

recorded million defined plan also quarter. to $X.X plan offered during to the a a charge lump We settlement related sum participants benefit pension

We $X.X of a to do the associated connection of the plan's contributions because in the the not with XXXX, funded termination we record third-party plan. a fully status. of QX to to expect liability cash final approximately this of charge During any plan expect make settlement transfer million with

the quarter million fourth to was EBITDA of compared in quarter XX% an fourth the $XX.X $X.X of year. million, or increase last

to in to fourth income quarter were quarterly XX% $X.XX $X.XX, fourth in increase of compared million of last of net per million, compared quarterly $X.X a $XX.X record, also year. the XXXX. share earnings Diluted the reported quarter a We a

net share income and of Our of diluted with full year sales records, per million earnings financial results net were $X.XX. million, of also $XX.X $XXX

of last sales, sales, by the increased which total XX% fourth for compared our to of international account quarter Our X% approximately year.

was year $XX.X cash to Our the last balance cash $XX.X of at million, end million end year. increase the the compared a the balance at of

cash increased completed capital year boats management, of inventory diligent towards year. because in the our on with operations substantially working of a and and the profitable significantly the during completion end of balance shipment the Our particular emphasis

levels, continue increased to lower inventories compared of third Dealer be quarter than the but normalized have XXXX. to

scheduled the strong to quarter season retail the therefore, XXXX our approaches, dealers XXXX fully As our dealers to allocated first meet We, demand. remains have restock of demand continue and to inventory. for our this production

for a I'll it over back now turn remarks. few Ben to closing

Ben Palmer

held share strong. its category category market well. market sterndrive share remains combination size Two and as Number and Chaparral's size the outboards remains share market in in highest their Our third Chaparral Robalo's the of

our the feedback with Indications remain seeing our reason dealers, We're together from current early modify any level to production. winter from boat of positive. not shows,

to will as could result continue or softness economic we retail market for which indications levels However, uncertainty in demand, a any demand of for monitor interest change inventory. higher dealer in or higher increases of occur in rates

hard a of management the of quarter environment. are the and and and who operating navigate performance the challenging team, employees are successive work dedicated result financial to confront other successfully record A second Robalo of continuing Chaparral

again, any questions be this you to you, have. happy for joining that take might Thank us morning, we'll and

Operator

in [Operator the Jim Craig Kennison Instructions] Baird. at And there Mr. this just are questions -- line I A no came from apologize. from line time. of

is line open. Your

Craig Kennison

questions. good Thanks taking morning. my Hey, for

Ben Palmer

morning. Craig. Good Absolutely,

Craig Kennison

at seeing curious Yes, thank the I'm you you're versus end? if demand side any much. high end on low the variance just so the

Ben Palmer

this is seen we up this would I really anything point, Craig, Ben. significant. to haven't say,

probably consumer, But end, anecdotes do probability lower bit less often that to seems continue stay to larger little boats, we the hear usually more which the or [more] think that there are there's hesitation by be those are Those strong. the quite (ph) there. on a I actually pushback. of financed the

is we here. this point, not seen at So, in see ourselves much change, which have good to

Craig Kennison

inventory or respect most inventory with environment to, up. to a Yes, of made the and progress supply compares level was say that's great. say, of just you with the current front, XXXX it How inventory? chain like are the normal sounds on lot And your let's you've catching would whatever

Ben Palmer

inventory? our For

Craig Kennison

Yeah.

Jim Landers

Dealer Craig? inventory,

Ben Palmer

inventory. For our

Craig Kennison

I'm sorry. dealer your inventory, dealer Yes. I mean inventory.

Ben Palmer

inventory. is only build. It dealer begun Oh, to recently

below levels. 'XX 'XX there's So, well, still levels, it's -- well well below

to begun, increase only clearly that's to more just we'll think it's watch little are said, something it. as little bit. become normal. We think a We that's Things normalized. So, right? But beginning that's healthy, a I

So that's troublesome. and not expected to be continue But we'll that. again, monitor to

Craig Kennison

when that. in some had your input a your question and have materials Thanks then, remain curious, for at inflationary you of what costs typical just the And pressure? high. I'm on look I on I'm is some boat, the lowered costs. total trend input sure bill still But your

Jim Landers

In materials have has been cost what but lot, bit. increased Jim. of characterized. -- lot other words, you is has it this moderate is Craig, feedstocks. We of to agree probably hydrocarbon materials little with A our a just a starting

that's So helped continues But to has is be materials some. moderating of Labor just high. a chain And cost moderate bit. little supply labor. count moderated cost That some. not easing does

Mike Schmit

-- come Yes, it's lot. down hasn't I constant a think the -- stopped, more but it hasn't increases have

Jim Landers

of Yes, has the decreased. rate increase

Mike Schmit

Yes.

Jim Landers

is I guess. now negative, derivative First

Ben Palmer

And to, material down commodities, side, more on the more referred -- probably the those bit. come as a have Jim

tends there's at lines this point. probably still that key there's with with more chain to supply it's think the That's -- have stabilized, be and more there. them I associated still issues lot -- more chain a necessarily along labor declined that components of components, supply it's not

Jim Landers

-- -- things we And negative surprises. Yes. or general, clear, still are on that may it we wait happen. have surprises There have be price bit still But be is moderating that increases a in to to better.

Ben Palmer

Yes.

Craig Kennison

you surprises, will? if are I curious, you supply Yes, still where maybe chain seeing was lastly,

Ben Palmer

maybe It's not great about it's a often, question, really we week to kind day day, but it and to and week. It's talk of it varies.

Sometimes be it engines, controls, harnesses old to can the it's gauges... wiring but things, day, day and same it's sometimes

Jim Landers

Windshields.

Mike Schmit

Windshields.

Ben Palmer

as the time which Windshields. other it's is been sure time from stories the continue things, problem of just that's makes creep from sort heard come same and anything lot what really new constant, of challenging. well. up. There's but you've really And along things to to a not that all a have It's it people I'm not

an I think, toilets has been issue.

Jim Landers

Yes.

Ben Palmer

So…

Jim Landers

We now glue had shortage, that's resolved. but a

Ben Palmer

Yes, there. little that's a right, problem

Jim Landers

Yes, adhesive.

Ben Palmer

Right.

Craig Kennison

Got it.

Ben Palmer

same unpredictable. old, old, same the of more of Kind

Craig Kennison

it inventory of Well, out your and, you're been not pursuing Unpredictable. more you've frankly, distribution. I one I I there, brand dealers like other every could. progress Since additional great. making is of addition the there, question, imagine have boats if get to Yes. seems which guess, struggled

so, rebuild inventories, a And to they're set. like for normalizes? I'm core that you those dealer start strategy as dormant production wondering as may starts to become be your dealers as normalize, to your dealers something could network? and an that there happy opportunity Is that reignite expand production Is

Ben Palmer

been think the very provide very strategy Well, We've following. strategy, very, They're let our our important dealers me the I where are. our we said We -- straightforward dealers. and smart to that have with particular to or is has dealer has all adopted catered team answer which us not It's It's the like have they in we us. network. important us. regions geographic key -- tried to not we our to been

have we allocated of dealers. the historical similar to working very basis to dealers allocate a the and generate We able it's we're production production production, to have that with our So, deliveries very, percentage those amount right? and from we're to what have out, been

smaller not from think the that's to So, away production and to appropriate. and dealers. our have significantly larger dealers more taken fair tried We we direct

the served will I think into I well well and us has that think us that serve future.

one, Your question and is right. good you're a

bows always, with out where perspective. open to we whatever, from where are we -- geographic a dealer that or have spot we are insert necessary, another prepared dealer have to a into an normally We

to to one to just So has allocating -- but our dealers well. serve are And try of that them. I and be and production will we loyalty us out our is as example that loyal think loyal

Mike Schmit

just of focus I'd our care main dealer now right existing take network. is guess, I And, our to add,

have really expanding a So, that we on this don't time. focus at

sure through So are chain just getting making issues, the up. now, inventories their supply remaining right

of network. So dealer main taking our that's focus really care existing now, our right

Ben Palmer

can't may But ones, and selected Yes, our -- additional then no can. any this at opportunities have saying, are decide, send I point dealers dealers, available geographic is until be to there dealers to and in have saying, redirect as areas, pushback says, until until but not very there's production. dealers -- as right, enough, we there's there's to from you so some existing if time, many direct significant me existing if more, other we and those until there

Craig Kennison

question. more but Great. one stop, have And I I promising keep to

Ben Palmer

We appreciate it. Great.

Jim Landers

Craig. fine, That's

Craig Kennison

Thank you.

In -- any satisfied? yet -- terms be of that I'm that terms demand there Or in that at pre-orders sorry, backlog of consumer been point? demand, of has Any fulfilled your all with any of this consumers? has dealer to have is demand

Ben Palmer

dealer say right? every that -- is or fulfilled. varies there that send is many are -- dealer And obviously. moderated, But region And orders, still have can. by I indication building, that's there an No, And by we certainly me I almost unfulfilled dealer. would but as no, saying, of still be you some to orders like virtually as are indicated, still inventories

Jim Landers

industry lot A retail of you the usually our case. Yes. which the still production pre-COVID not was that sold, is know

Craig Kennison

have you there? any And pre-sold in seen Any orders? cancellations of Or changes previous just any slowdown demand? that

Ben Palmer

-- significant orders strong. are We've the six -- To demand months hand than the is any of this not yet it's ourselves XX retail But Certainly, point, a yet seen not orders to softness on -- quite still amount were not cancellation. there. they certainly ago. seen we've less still

mindful. certainly are we Now,

As demand continues weaken. prepared to production indicated to necessary monitoring always are by we're watching inventory in we remain if But field dealer as low and our standards. and comments, to historical were adjust

be I bit, any don't in So, expect there's a even hard to stop decline going demand. or if softened significant things

and obviously were production to and and do to levels demand what that weaken, We've align to dealer if adjust we and decide reasonable if always back and need reasonable and to we'll that. inventory demand done when prepared reassess we're our to try would step be. But to appropriate production

Craig Kennison

thanks all Great. taking questions. Hey, for my

Ben Palmer

Craig. Thank you, Great.

Mike Schmit

Thanks, Craig.

Ben Palmer

Good from to you. hear

Operator

at there Landers, over And this call for some back turn you I'll no Mr. the Jim questions further are to closing remarks. time.

Jim Landers

in to good thank Okay, talk you for who Thanks Thank and hope day. a everybody Rob, soon. has listen, and it, called to you. you. We'll everybody we appreciate

Operator

two within today's concludes conference be of marineproductscorp.com Today's will call completion This following replayed the the hours call. call. conference on

You disconnect. may now

Marine Products (MPX) 25 Jan 232022 Q4 Earnings call transcript