Earnings call transcript Q1 2023

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Operator

Good morning and thank you for joining us for Marine Products Corporation's First Quarter 2023 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 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 this recorded. call conference

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

Jim Landers

Thank you, good Audra, morning. and

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

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

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

press this in calculated. and make GAAP contain available measure. this a review comments questions. reconciliation of quarter the you're if to our financial it's which financial morning release measure issued a non-GAAP nearest net your this about and Please website seeing income, Our how interested for disclosure this is be few We'll then

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

Ben Palmer

call joining all you our Thanks, for thank morning. Jim, and this

able net the increased both inventory model period. deliver a them dealers. chain our the transportation first We quarter was XXXX this Corporation to and improvement and our issued substantially issues prices of experienced to once a generated primarily will Products Chaparral to to a I supply mix ship regarding relative sales first availability Average our and at completed press earnings morning. begin with during that boats release and due we highlights in record favorable year complete prior Robalo. number selling quarter as larger were in few Marine our again

increased In however prepare our unit the levels, retail begin season. more towards levels. allowed normalized remains addition, during pre-pandemic to trending spring upcoming below inventory selling building are XXXX inventory shipments Dealer quarter for the inventories to the dealers their

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

to And overview, our CFO. over with turn call Mike that the now I'll Schmit,

Mike Schmit

Thanks, Ben.

to of with record were the an for begin XXXX by first last XXXX of our of first a results. XX%. by average I'll overview $XXX.X unit company's Net a the year, sales increased and quarter boats quarter the quarter first prices increase compared increased million, financial XX% sales of selling XX%,

we a As mentioned, satisfy by Ben our to improvements as mix increases of in complete and to continue to retail favorable dealer demand driven our significant ability see chain. supply these were ship both boats

XXXX, XX.X% Gross the $XX for of increase a XXXX XX% benefits manufacturing efficiencies. we over of compared from first profit was to quarter for in margins first of improvement quarter saw first quarter the the first as year. million, Gross of last a XX.X% XXXX quarter the the slight was some

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

a first expenses These included $X.X quarter settlement also XXXX pension of charge of million. non-cash

that of this net charge. year first of first in sales administrative pension expenses the they the sales of settlement in years, were XX% both non-cash quarter XX% of and but expecting were general, Selling, net quarter

with to make the final expected transfer the do is in connection in is our second plan the funded of a not which cash termination plan status. quarter, As we the of fully third-party we of plan, liabilities expect to complete contributions the because pension any

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

record the a XX% of first quarter income net this quarterly $X.X year, last the a million of in $XX.X quarter to million of year. reported increase We same compared

year. share first earnings $X.XX the per Diluted quarter were of this compared of in the first to in year quarter $X.XX last

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

$XX.X million we and balance at the components, compared cash of our us produced improvements quarter logistical increase more than quarter. and of which allow the the million, cash during of at to Our balance was $XX.X to is end last availability the first cash of boats the result balance the ship This in processes strong end XXXX a materials year. of

that, consumer already both. inventories our request into have activity, increasing and winter interest and Dealer benefit generally boat more which season. to additional to well economic was upcoming towards normalized increasing could confidence, to inventory These for sold slowing Having retail the shows customers continue levels, selling the demand outcome be dealers monitor will height to we of said the indicators we macro lower as for favorable, as enter the continue dealers They rates, pre-pandemic levels. recreational inventories weaken such boats. as all as The moderately retail selling than are season. of but continue our higher of

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

Ben Palmer

Mike. you, Thank

Our in remains size in third category. share combination strong. the and market outboards market Robalo's share its Chaparral two sterndrive of number size market their highest held The share Chaparral category. remains

of and as as products. well well team Our quarters other as dealer the design and our the our are of successive employees, dedicated strong the network, quality the Chaparral of appeal as management our result of the of and sales record hard Robalo work

to thank to have. we'll any like and I'd morning, this for joining you that questions you us be take happy

Operator

Thank [Operator Instructions]. you.

We'll Baird. to go Kennison at first Craig

Craig Kennison

change wake recent there's collapses. credit as And availability congratulations the was question in any progress the in wondering credit. well. -- been the your on on I'm on bank just My the pension availability of if of

Ben Palmer

-- the been service we've dealers credit to they've the successful the proactive as Ben. line as in providers providers line coordinating this I but We certainly, Craig, increase them, to describe lines, the with would have, in them appropriate. it, not been is increasing

We there's delays lines the hearing references particular, issues and any of in of that's in or not directly. not be the that the whatever heard credit But say market. we're there in have because some that going that increase on may not background, but to that

Craig Kennison

applications. on significantly Anything in wake rates not of terms collapse in of at on side -- approving or either the high rate that higher the same the just consumer

Ben Palmer

model buyers sensitive are be are and to those cash-only not purchasers to We of have it kind rates. end boats continues as with mix our not of most higher

types not boats results from significant reactions that receive of the far. so looking to or we've that dealers' they're impact any So seen or any none we've so on particular attitudes to us, our seen of any

Craig Kennison

visibility better. guess, competitive models? And curious consumer what pandemic, consumer the a of sure perhaps from But perspective, I'm know inflation. it's get sell, a during Are but in prices opportunity have that I'm what you then I'm retail Perfect. about fade of curious actual dealers like full boat perspective? just inflation, you from selling your environment. even had or price I are seeing an the the little I not to some look just a more bit you. now Thank on the boats you MSRPs

Ben Palmer

has incurring we time higher plan in this that that would say of incentives a the rates dealer we interests. slightly we place of been program or of pay because the again the some have for where are I floor higher share period

That's have between detail? us impact an is the but that you really. and that that not to something yet their other dealers this impacted and respect our -- margins. that's impacting with Do So rebuilding have helping an any we're they inventories, it's

Mike Schmit

material obviously boats was quite is costs supply issues the rapidly Yes, Yes, inflation the Mike. the this those of during cleared and increasing by some of shortly of driven making the have chain up. I'll that thereafter, rate and as throw, pandemic and was the

our are of inflation the before of has Some slowed. -- manufacturing those there rate

passing so the along just to customer. And that's

than Ben getting, rate time, at And So boats at mentioned, we're dealers don't it's same and are guess, same the the just seeing and we the and not, things the had. along then of anticipate the for they And supply as were. the costs. so bit passing increasing I just to they is little incentives customers boat some that a of is easier that buy and demand, part for maybe

costs as will the customer So normalize, our costs of also. normalize increase, I and the for rate think so end boats

Ben Palmer

some aren't we've of as of the certainly Yes. fast. some We're components as much of coming saying costs; the the or material on manufacturing in kind production side, seen nearly down some

increases So for that, ultimately, going as Mike need a there hopefully forward. won't be that large said

the in in to, cases. have have But additional pressure system. earlier I also comment into my are you to put as not the visibility was all charging guess we we where any what any consumer end incentives was I that dealers And don't direct seen refer going

So will forward. will we we happen. dealers some discounting I as that there move would normalize. expect by there be expect That'll some that more moderation, be to normalized

field I normalize. will the way same inventory in think it

Operator

[Operator Instructions].

next Fred Wolfe. go to We'll Wightman at

Fred Wightman

doesn't wanted to favorable, Hey can comment the were the sound in good prepared release the and generally follow-up shows -- remarks honestly. that guys, morning. I which boat winter the great was

calendar more shows? you more it So than How can year entering maybe the the would've to a winter what recent you boat else detail anything just expected sort bit on the of of little give environment? the compares retail or start

Jim Landers

Fred, year. more Robalo's boat we Hey intentional. some Chaparral's Yes, the There mixed. Jim. the -- and had were where mean this was we that, boats shows previous at is was comment Yes. more show that in I than it sold

plus you consummated. lot are of sort initiated a those at that a So strong there shows, of as not lot but boat very sales are are of follow-up know,

good. others And might to demographic cases, not -- were that some like identify no were There that. or have there. few trend In been geographic weather, as things it there's a it

well. spring kind where live where also have other some you live is the noted that of we as of and late places and We coming

season favorable. is no so there. But show And of that And no, We'll demographic generally coming was was that the language. the there in. yes, that, kind trend, or repeat boat impulse delaying geographic fire

Ben Palmer

think some smaller I larger that's I a of the the shows. Geographic, little of shows than think better some were bit where

bad, were Some as strong the will. you but of of just some the lackluster, not as smaller little larger. shows more if Not a

Mike Schmit

wouldn't slow have Miami you me it and Yes, we like thought was went a like attended of down. to few Jim them and I

many and those with was were successful. and here story shows there. As numbers our -- boat The well Atlanta. at Same saw in really we through it here people that show too, all show pretty

But course, boat was pre-pandemic. shows it heard of maybe we focused weren't here. as they some strong weren't more of Of maybe as Chaparral the kind smaller

that I'd like ones -- seemed Jim attended least at yes, So so the we this mixed ones but at room say said. the bigger great

Jim Landers

Yes.

Fred Wightman

right weather shows, softer from line of helpful. just some I outside maybe a Really dealers, of that were day-to-day is And guess the characterize what the color they the issues? given normal of of bit retail of the sort little hearing would sort you're sort How you of show demand? of sort sort thinking, in non-boat with

Ben Palmer

cancellations no, many talking shift them -- perspective, accept that on no what's we current their to going call at pushback the still in we I in little they're on dealers' -- to the to those, as plan weeks, them. have When be for we it, to just to the reasonably at shift deferrals we're you boats right? the can dealers, available we've looking want expectations think to to as whatever folks dealers about little globally to and the the from to hand their willing had spring, coming or the orders the

So at our they -- boats. that, demand continue that current have and the -- as to think to dealership that doing confidence take I across do this overall I seems bodes be point time well in good enough enough they said,

as was up, it's it half inventory of kind two-thirds field only Our pre-pandemic. has, probably but to it's as large

move there's of inventory a the hopeful down and season. that there'll room sell-through after there. lot lot still levels selling So through be those you of will a We're come typically

season the the there'll still And of plenty for year. of them of normal room that. into selling normal past see end the and take retail we'll hopefully, to amounts be inventory So

quite still behavior, very those year, sorts very but as But positive right weakness we we see we terms of things. So the remaining certainly all talking -- of we're watching still on of here the things in mentioned of dealer are now, that of in rest our economic and all closely the we're about we're it comments, strong.

Fred Wightman

wire Great. harnesses outboard where it biggest you you're some And component of last on sort in specific seeing chain and improved the one, Is relief? improvement like just the windshields, engines, supply are availability seeing then, some you mentioned guys items the where like that are improvement?

Mike Schmit

kind back, one of we'll then steps two had it's forward, say instance, issues engine have improvement but step the outboard I'd and for we getting then significant slow. all but of little above,

which better it much boats we much, to last was than the it's than is and able So ship we manufactured. complete few why were more quarters,

the But over all it's XXX% not still woods, place. the -- but it's through sort we're of still just

So the just like next whac-a-mole thing. game fixed, as not something one up. a soon as it's It's thing pops of

Jim Landers

Also better. Fred, Transportation is it’s Jim. Yes. Yes.

Mike Schmit

Yes, that's point. a great

Jim Landers

better. Yes. Without exception, transportation is

So helpful. that's

Operator

And there at I to for over are turn no this further Landers like to conference questions would time. closing Jim remarks. the

Jim Landers

Audra. appreciate and day. a good in We called the we And hope you've Okay. everybody everybody Thank you, questions. has

to talk soon. will We you

Operator

you Thank on your call. within conference of two today's marineproductscorp.com the hours concludes this And participation. replay of be will conference call. available following completion A for the today's

may disconnect. You now

Marine Products (MPX) 26 Apr 232023 Q1 Earnings call transcript