Earnings call transcript: Marine Products Q2 2025 sees stable EPS, stock edges up

Marine Products Corporation (MPX) reported its Q2 2025 earnings, revealing stable financial performance in line with analyst expectations. The company posted an earnings per share (EPS) of $0.12, matching forecasts, and reported revenue of $67.7 million, slightly below the anticipated $67.8 million. Despite these results, the company’s stock saw a modest rise of 1.6% to $8.90 in aftermarket trading, reflecting investor optimism. According to InvestingPro analysis, MPX currently appears slightly undervalued, with a "FAIR" overall financial health score of 2.41 out of 5.

Key Takeaways

• Marine Products’ Q2 2025 EPS met analyst expectations at $0.12.
• Revenue slightly missed projections at $67.7 million against a $67.8 million forecast.
• The stock price increased by 1.6% in aftermarket trading, reaching $8.90.
• The company introduced its 2026 model year lineup, signaling innovation.
• Gross profit margin improved slightly to 19.1%.

Company Performance

Marine Products Corporation experienced a 3% decline in sales year-over-year for Q2 2025, primarily due to a 13% decrease in boat sales volume. However, the company managed to offset some of this decline with a 10% net increase in price and product mix. Despite these challenges, Marine Products maintained a strong cash position of $50 million and reported no debt. InvestingPro data reveals the company holds more cash than debt on its balance sheet and maintains a healthy current ratio of 3.66, indicating strong liquidity.

Financial Highlights

• Revenue: $67.7 million (3% decrease YoY)
• Earnings per share: $0.12 (down from $0.14 last year)
• Gross profit: $12.9 million
• Gross profit margin: 19.1% (up 20 basis points)
• EBITDA: $5.6 million (down from $6.5 million)
• Cash position: $50 million
• Year-to-date dividend payments: $9.8 million

Earnings vs. Forecast

Marine Products’ Q2 2025 EPS of $0.12 met the forecast, with no earnings surprise. Revenue came in slightly below expectations at $67.7 million, marking a minor shortfall of 0.15%. This performance aligns with the company’s historical trends of meeting or slightly missing forecasts, suggesting consistent operational execution.

Market Reaction

Following the earnings announcement, Marine Products’ stock rose by 1.6% in aftermarket trading. The stock’s movement reflects investor confidence despite the slight revenue miss. The current price of $8.90 remains below its 52-week high of $10.89, indicating room for growth in the coming quarters.

Outlook & Guidance

Looking ahead, Marine Products remains cautiously optimistic about stabilizing inventory levels and potential sales growth in the latter half of 2025. The company plans to showcase its 2026 models at an upcoming dealer meeting in August, aiming to boost future demand.

Executive Commentary

CEO Ben Palmer expressed optimism, stating, "We are cautiously optimistic that the industry is working through excess inventory." He also highlighted the potential impact of interest rate cuts, noting, "Interest rates continue to make headlines with pressure coming to reduce rates." Palmer emphasized the company’s strong position, saying, "We believe our balance sheet and operational approach make us a buyer of choice."

Risks and Challenges

• Declining retail sales across the industry may impact future growth.
• Tariffs and rising input costs pose ongoing challenges.
• Dealer caution regarding inventory levels could affect sales.
• The company must navigate potential interest rate changes.
• Competitive pressures require continuous innovation and strategic positioning.

Marine Products Corporation’s Q2 2025 performance reflects resilience amidst market challenges, with stable earnings and a slight uptick in stock price, suggesting positive investor sentiment.

Full transcript - Marine Products Corp (MPX) Q2 2025:

Conference Operator: Good morning, and thank you for joining us for Marine Products Corporation’s Second Quarter twenty twenty five Earnings Conference Call. Today’s call will be hosted by Ben Palmer, President and CEO and Mike Schmidt, Chief Financial Officer. At this time, all participants are in a listen only mode. Following the presentation, we will conduct a question and answer session. Instructions will be provided at that time for you to queue up for questions.

I would like to advise everyone that this conference call is being recorded. I will now turn the call over to Mr. Schmidt.

Mike Schmidt, Chief Financial Officer, Marine Products Corporation: Thank you and good morning. Before we begin, I want to remind you that some of the statements that will be made on this call could be forward looking in nature and reflect a number of known and unknown risks. Please refer to our press release issued today along with our 2024 10 k and other public filings that outline those risks, all of which can be found at www.marineproductscorp.com. In today’s earnings release and conference call, we’ll be referring to several non GAAP measures of operating performance and liquidity. We believe these non GAAP measures allow us to compare performance consistently over various periods.

Our press release and our website contain reconciliations of these non GAAP measures to the most directly comparable GAAP measures. I’ll now turn the call over to our President and CEO, Ben Palmer.

Ben Palmer, President and CEO, Marine Products Corporation: Thanks, Mike, and thank you for joining our call this morning. Second quarter sales were down slightly compared to the prior year. However, the year over year declines have moderated as our production levels have stabilized. While much uncertainty exists in the macro environment with tariffs, interest rates and the general economy, we have seen positive signs including declining channel inventory. We are cautiously optimistic that the industry is working through excess inventory and that more certainty over model year 2026 pricing allows for better planning.

Interest rates have remained elevated and any sustained decrease could be another catalyst for dealers and consumers to increase spending. Our focus remains on positioning our brands for improved future demand, production efficiencies and maximizing our returns on investments. We continue to manage our production relative to channel inventory. Despite industry wide retail sales declines during the first four months of twenty twenty five versus the prior year, we’ve been able to reduce our field inventory by 11% year over year. We continue to partner closely with our dealers, but we note they remain cautious with regards to their levels of inventory.

Custfield inventory levels are reasonable, our retail promotional activity continues at typical levels. Tariffs remain top of mind. However, continued changes and ongoing negotiations make it very challenging to precisely plan at this point. From an input cost standpoint, key purchases are engines, navigation systems, stainless steel, aluminum and fiberglass. Suppliers have provided pricing for the new model year products, but major tariff changes could cause a revaluation by suppliers.

We maintain dialogue with our government representatives and trade associations, but have limited visibility on the ultimate outcomes. Interest rates continue to make headlines with pressure coming to reduce rates while the Fed has remained cautious on inflation concerns. The market now expects rate cuts in the coming months, but it may take some time for any rate relief to work through the industry and and generate meaningful improvement in retail demand. Our new models introduced this time last year were well accepted in the market and we are continuing to build on this demand. We’re excited about our 2026 model year rollout where we have made several portfolio wide changes, also added some new products and refreshed a number of our models.

Our focus remains on investing in our branch reputation and being thoughtful on how we are packaging and enhancing our offerings. We will continue to work closely with our dealers regarding channel inventory to maintain relationship as we have always done. Now Mike will provide an overview of the financial results.

Mike Schmidt, Chief Financial Officer, Marine Products Corporation: Thanks, Ben. Our second quarter financial results with comparison to the 2024 are as follows: Sales were down 3% to $67,700,000 driven by a 13% decrease in the number of boats sold, partially offset by a positive 10% net increase in price and mix. We note that quarterly sales have been stabilizing over the past few quarters as evidenced by the 15% sales increase over the first quarter of this year. We see potential to deliver sales growth versus the prior year in the second half of twenty twenty five. Gross profit decreased to $12,900,000 although our gross profit margin percentage of 19.1 was up 20 basis points from the prior year.

Our increase in the gross margin percentage versus the prior year was due to better alignment of our cost structure with current production needs combined with the benefit from the increase in price and mix. SG and A expenses were $8,100,000 in the quarter, up 9% or $700,000 compared to last year’s second quarter. SG and A as a percentage of sales was 12%, up 130 basis points compared to the second quarter of last year due to modestly higher R and D, advertising and the timing of some incentive based accruals. Our tax rate was 21.3% in the quarter and is likely to be slightly higher than that for the remainder of the year. Diluted EPS was zero one two dollars in the second quarter, down from $0.14 last year.

EBITDA was $5,600,000 down from $6,500,000 last year. Year to date, we have generated operating cash flow of $90,200,000 and free cash flow of $8,600,000 CapEx was only $400,000 during the quarter. And while we expect lower CapEx this year compared to last year, it will likely pick up in the second half of the year and track between $2,000,000 and $3,000,000 for the year. We paid $9,800,000 in dividends year to date through the second quarter of twenty twenty five. And we finished the second quarter with $50,000,000 of cash and no debt.

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

Ben Palmer, President and CEO, Marine Products Corporation: Thank you, Mike. The marine industry continues to work through the challenging environment. However, we are excited about our 2026 model year, which we announced to our dealers in June. We will demonstrate these models to our dealers at our August year meeting. We continue to evaluate acquisition opportunities and other partnerships to enhance Marine Products portfolio.

We believe our balance sheet and operational approach make us a buyer of choice for high quality assets. In closing, I want to thank our dealers for their continued collaboration and support and our employees for their dedication and hard work. That concludes our prepared remarks. And with that, operator, please open the line for any

Conference Operator: questions. There are no questions at this time. I will now turn the call back over to Ben Palmer for closing remarks.

Ben Palmer, President and CEO, Marine Products Corporation: Appreciate everybody coming on and listening, and hope you have a good day, and hope to talk soon. Take care.

Conference Operator: This concludes today’s call. A replay of today’s events will be available at marineproductscorp.com within two hours following the completion of the call. Thank you all for joining. You may now disconnect.

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