Marine Products Corporation Q2 FY2025 earnings call

• Second quarter sales were down slightly compared to the prior year, but year-over-year declines have moderated as production levels have stabilized.
• Positive signs such as declining channel inventory were noted, with cautious optimism about the industry working through excess inventory and better planning due to model year 2026 pricing certainty.
• Focus on positioning brands for improved future demand, production efficiencies, and maximizing returns on investments.
• Field inventory was reduced by 11% year-over-year despite industry-wide retail sales declines in the first 4 months of 2025.
• Continues to partner closely with dealers, though dealers remain cautious with inventory levels, and retail promotional activity continues at typical levels.
• Tariffs remain a concern with ongoing changes and negotiations making precise planning challenging.
• Interest rates are elevated, and while rate cuts are expected, it may take time for rate relief to impact retail demand.
• 2026 model year rollout has seen portfolio-wide changes, new products added, and models refreshed; focus on investing in brand reputation and enhancing offerings.

Second quarter sales were $67.7 million, down 3% compared to the second quarter of 2024, driven by a 13% decrease in the number of boats sold but partially offset by a 10% net increase in price and mix. Gross profit decreased to $12.9 million, with a gross profit margin percentage of 19.1%, up 20 basis points from the prior year. SG&A expenses were $8.1 million in the quarter, up 9% compared to the second quarter of last year. Diluted EPS was $0.12 in the second quarter, down from $0.14 last year. EBITDA was $5.6 million, down from $6.5 million last year. Year-to-date, operating cash flow was $9.2 million and free cash flow was $8.6 million. CapEx was $400,000 during the quarter, with lower CapEx expected this year compared to last year but likely to pick up in the second half of the year, tracking between $2 million and $3 million for the year.

• Expect potential to deliver sales growth versus the prior year in the second half of 2025.
• CapEx is likely to pick up in the second half of the year and track between $2 million and $3 million for the year.

• Tariffs with continued changes and ongoing negotiations making precise planning difficult.
• Interest rates with uncertainty regarding rate cuts and their impact on industry retail demand.
• Macroeconomic uncertainties affecting the overall business environment.

Q: Are there any questions?

A: There are no questions at this time