Marine Products Corporation (NYSE: MPX) has announced its unaudited results for the quarter and year ended December 31, 2022. Marine Products is a manufacturer of fiberglass boats under the brand names of Chaparral and Robalo. Chaparral’s sterndrive models include SSi and SSX, along with the Chaparral Surf Series. Chaparral’s outboard offerings include OSX Luxury Sportboats and SSi outboard models. Robalo builds an array of outboard sport fishing boats, which include center consoles, dual consoles and Cayman Bay Boat models.
For the quarter ended December 31, 2022, Marine Products generated quarterly net sales of $108.5 million, a 42 percent increase compared to $76.5 million in the same quarter of the prior year. The increase in net sales was due to a 29 percent increase in the number of boats sold during the quarter and a 12 percent increase in the average selling price per boat. Unit sales increased during the quarter primarily due to our success during the quarter in finishing and shipping substantially completed boats from inventory, as supply chain issues continued to improve. Average selling prices increased primarily due to a favorable model mix and price increases to cover increased costs including primarily materials and components. Unit sales increased within all of Chaparral’s models as well as many Robalo models.
Gross profit for the fourth quarter of 2022 was $27.3 million compared to $19.2 million in the fourth quarter of the prior year. Gross margin as a percentage of net sales was 25 percent in the fourth quarter of both years. Operating profit for the fourth quarter of 2022 was $14.8 million, an increase of 39 percent compared to operating profit of $10.7 million in the fourth quarter of last year. Selling, general and administrative expenses were $12.5 million in the fourth quarter of 2022 compared to $8.5 million in the fourth quarter of 2021. These expenses increased due to costs that vary with sales and profitability, such as incentive compensation, sales commissions and warranty expenses. In addition, the Company recorded a $1.2 million pension settlement charge associated with its defined benefit pension plan. Selling, general and administrative expenses were 12 percent of net sales in the fourth quarter of 2022 compared to 11 percent of net sales in the prior year. Net income for the fourth quarter of 2022 was a record $11.9 million, an increase of 40 percent compared to net income of $8.4 million in the fourth quarter of 2021. Earnings before interest, taxes, depreciation and amortization (EBITDA)1 for the fourth quarter of 2022 was $15.3 million, an increase of $4.2 million or 38 percent, compared to the fourth quarter of 2021.
Diluted earnings per share in the fourth quarter of 2022 were $0.35, an increase of 40 percent compared to $0.25 in the fourth quarter of the prior year. The effective tax rate for the fourth quarter of 2022 was 22 percent, a slight increase compared to an effective tax rate of 21 percent for the fourth quarter of the prior year.
Net sales for the twelve months ended December 31, 2022 were a record $381.0 million, an increase of 28 percent compared to the twelve months ended December 31, 2021. Net income during 2022 was a record $40.3 million or $1.18 diluted earnings per share, compared to net income of $29.0 million or $0.85 diluted earnings per share in 2021. EBITDA1 for 2022 was $53.7 million compared to $38.2 million in 2021.
“During the fourth quarter our supply chain and transportation issues continued to improve, allowing us to increase boat shipments to satisfy dealer demand for new 2023 models,” stated Ben M. Palmer, Marine Products’ President and Chief Executive Officer. “In fact, our fourth quarter 2022 shipments were the highest of any quarter in 2022 in spite of the seasonal impact of two holidays. In addition to higher unit sales, these positive developments lowered our working capital requirements, which are reflected in lower inventories and a higher cash balance than at the end of the third quarter. While production and transportation challenges continue, we are pleased with the improvement. At the end of the quarter, field inventories began to increase to support our dealers during the upcoming 2023 winter boat show season.
“Indications of attendance and orders from the early boat shows are positive, so we are maintaining a high production schedule and have allocated dealer deliveries through the first quarter. As the retail selling season gets underway, however, we will monitor market indications from the upcoming winter boat shows for any changes in customer demand caused by interest rate increases and economic uncertainty,” concluded Palmer.