Marine Products Corporation Q4 FY2024 earnings call

• Fourth quarter results were negative compared to prior year but early signs of stabilization and path to growth later this year. - Marine industry in lackluster period with cautious but shifting to cautiously optimistic sentiment. - Laser-focused on managing costs and production levels, field inventory ended year 15% lower than prior year. - Interest rates and political uncertainty improvement gives optimism for business conditions. - 2024 saw investments in business like solar panel installation at Georgia facility with tax incentives and cost savings. - Full year 2024 had sales $237M, diluted EPS $0.50, EBITDA $21M, operating cash flow $30M, free cash flow $25M, paid $44M in dividends including $24M special dividend, ended with $52M cash and no debt. - Board declared regular quarterly dividend of $0.14 per share payable in March. - Milestones: 25th anniversary of being public in August, 60th anniversary of Chaparral brand.

For the full year 2024, sales were $237 million, down 38% versus the prior year. Diluted EPS was $0.50 compared to $1.21 and EBITDA was down from $52 million to $21 million. Operating cash flow was $30 million and free cash flow was $25 million. CapEx was $5 million including the solar panel project. For the fourth quarter, sales were down 33% to $47.8 million, driven by a 39% decrease in boats sold, with price and mix net deposit 6%. Gross profit decreased to $9.2 million with a gross profit margin of 19.2%, up 20 basis points. SG&A expenses were $5.6 million in the quarter, down 28% or $2.2 million compared to the prior year's fourth quarter. Diluted EPS was $0.12 in the fourth quarter, down from $0.16 last year. EBITDA was $4.4 million down from $6.5 million.

• Expect year-over-year comparisons to be fairly muted in first half of 2025 with potential sales growth in second half. - If not deploying substantial capital, will look at further cash returns to investors.

• Channel inventory excess was a challenge in 2024. - Uncertainty in marine industry demand. - Mixed signals on near-term direction of interest rates.

Q: Heard mixed results from dealers and OEMs on boat shows, speak to relative strength vs peers and expectations for Miami Show A: In general, mixed but overall positive under time, hopeful things improve into spring selling season, will be well represented at Miami Show Q: What seen from promotional aspect at shows so far A: A lot of incentives similar to last year, some trying to clear back inventory, no material differences from last year's incentives Q: Does destocking imply optimal levels or more needed A: Field inventories closer to normal levels, dealers being thoughtful, working closely with them, will assess further as winter boat shows complete and spring season starts Q: Update on M&A environment and uptick with new administration A: Started to see some opportunities but not a lot of great brands in sweet spot, actively looking for fit brand, hopeful as things stabilize and rates come down more, will see better fit opportunities this year