MARINE PRODUCTS CORP (MPX)·Q1 2025 Earnings Summary

Executive Summary

• Q1 2025 net sales fell 15% year-over-year to $59.0M, while diluted EPS declined to $0.06; sequentially, sales increased 23% versus Q4 2024 as dealer ordering stabilized modestly .
• Margins compressed on lower volumes: gross margin 18.6% (-160 bps YoY), EBITDA margin 5.8% (-270 bps), and net income margin 3.7% (-290 bps) as fixed-cost absorption waned with reduced production .
• Management stressed prudence amid heightened tariff uncertainty and an unclear interest-rate outlook; reiterated strong balance sheet (cash $57.1M, no debt), free cash flow $10.7M, and a $0.14 dividend for June 10, 2025 .
• Narrative catalysts: conservative model year 2026 rollout, second-half 2025 potential for YoY sales growth, and ongoing M&A exploration supported by ample liquidity .

What Went Well and What Went Wrong

What Went Well

• Sequential recovery: “first quarter sales were up 23% sequentially versus the fourth quarter of 2024,” indicating early stabilization in dealer orders .
• Channel inventory progress: field unit inventory down ~18% YoY; management “comfortable where we stand” after collaborative de-stocking with dealers .
• Liquidity and cash generation: ended with $57.1M cash and no debt, operating cash flow $10.8M, free cash flow $10.7M; dividend maintained at $0.14 per share .

What Went Wrong

• Demand softness weighed on volumes: boats sold decreased 19% YoY, with margins pressured by lower fixed-cost absorption .
• Profitability compression: net income down 52% to $2.2M and diluted EPS to $0.06; net income margin fell 290 bps to 3.7% .
• Macro uncertainty: management highlighted tariff-related cost risks (engines, navigation, stainless, aluminum, fiberglass) and unclear rate trajectory, limiting visibility and prompting conservative execution .

Financial Results

Consolidated Performance vs prior quarters and prior year

Balance Sheet and Cash Flow Highlights (Q1 2025)

KPIs and Operating Detail (Q1 2025)

Estimates vs Actuals (Q1 2025)

*Values retrieved from S&P Global. Consensus detail not available for MPX Q1 2025 at time of publication.

Guidance Changes

Note: No formal quantitative revenue/margin guidance ranges provided; management emphasized prudence given macro/tariff uncertainty .

Earnings Call Themes & Trends

Management Commentary

• “First quarter sales were down 15%, reflecting lower volumes and hesitation from dealers… However, first quarter sales were up 23% sequentially versus the fourth quarter of 2024.” — Ben Palmer, CEO .
• “It is highly likely that tariffs on these items and other materials would result in model price increases… Facing limited visibility… Marine Products will manage with prudence and conservatism.” — Ben Palmer, CEO .
• “Sales were down 15% to $59 million, driven by a 19% decrease in the number of boats sold. Price and mix netted to a positive 4%.” — Michael Schmit, CFO .
• “We paid $4.9 million in dividends and finished the quarter with cash of $57 million and no debt.” — Michael Schmit, CFO .
• “We are still actively seeking acquisitions… and have ample liquidity to take advantage of opportunities as they arise.” — Ben Palmer, CEO .

Q&A Highlights

• The transcript contains prepared remarks and call conclusion without a recorded analyst Q&A session; clarifying points were provided in prepared remarks, including S-3 registration context and tax-rate outlook .
• CFO clarified the S-3 registration includes Rollins family Control Group shares and is viewed as “good corporate housekeeping,” not altering the supportive relationship with the Board .
• CFO indicated the tax rate in Q1 was 27.8% and is likely slightly below this level for the remainder of the year .

Estimates Context

• S&P Global consensus estimates for Q1 2025 EPS and revenue were not available; thus, beat/miss vs Street cannot be determined. Actual revenue was $59.0M and diluted EPS $0.06 from company disclosures .
• Given stabilization signals (sequential sales up 23%) and margin pressure from volumes, near-term estimate revisions may focus on back-half revenue recovery scenarios and gross margin improvement contingent on tariff outcomes and dealer replenishment pace .
• Values retrieved from S&P Global; consensus detail unavailable for MPX Q1 2025 at time of publication.*

Key Takeaways for Investors

• Sequential improvement (+23% vs Q4) alongside continued YoY pressure suggests early stabilization, but visibility remains limited; monitor dealer order trends into summer and MY2026 rollout pacing .
• Margin compression driven by lower volumes/fixed-cost absorption; upside hinges on demand recovery and disciplined production scheduling .
• Tariff trajectory is a key swing factor for input costs and pricing; management signals potential model price increases if tariffs materialize, implying near-term elasticity risk .
• Balance sheet strength (cash $57.1M, no debt) supports dividend continuity and optionality for strategic acquisitions; FCF remains healthy [$10.7M] .
• H2 2025 potential for YoY sales growth is reiterated; watch for evidence via channel inventory normalization and boat show demand indicators .
• Tax rate expected to be slightly below Q1’s 27.8% through year-end; modest EPS tailwind if realized .
• Trading lens: stock narrative likely to react to tariff headlines, dealer inventory updates, and any concrete signals of H2 demand acceleration; near-term focus on margin trajectory and order flow anecdotes from the dealer network .