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Jun 30, 2020
Marine Products Q2 2020 Earnings Report
Marine Products Corporation's financial performance decreased in Q2 2020 due to temporary suspension of manufacturing operations.
Key Takeaways
Marine Products Corporation reported a significant decrease in net sales, gross profit, and operating profit for the quarter ended June 30, 2020, due to a temporary suspension of manufacturing operations. Despite the decrease in sales, the average selling price per boat increased due to a favorable model mix. The company is working to increase production to meet higher dealer and consumer demand.
Net sales decreased by 54.0% compared to the same period last year, totaling $40,818,000.
Gross profit decreased by 61.7% to $7,831,000, with gross margin at 19.2%.
Operating profit decreased by 81.8% to $2,074,000.
Net income decreased by 81.8% to $1,707,000, with diluted earnings per share at $0.05.
Forward Guidance
Marine Products Corporation is increasing production to meet significantly higher dealer and consumer demand since mid-March. The company is beginning its 2021 model year in a favorable environment and will monitor macroeconomic factors closely.
Positive Outlook
- Resumed operations on May 6th at slightly higher production levels than during the first quarter.
- Continuing to increase production early in the third quarter because of significantly higher dealer and consumer demand since mid-March.
- Dealer inventory was significantly lower than at the end of both the first quarter of 2020 and the second quarter of the prior year.
- Order backlog was at its highest level in several years.
- American consumers are choosing recreational boating as a safe, enjoyable outdoor activity suited for social distancing.
Challenges Ahead
- Temporary suspension of manufacturing operations in response to concerns over the potential spread of COVID-19.
- Production and sales were dramatically impacted for almost half of the quarter.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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