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MP

MARINE PRODUCTS CORP (MPX)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 net sales declined 3% year over year to $67.7M, but rose approximately 15% sequentially versus Q1, with gross margin improving 20 bps to 19.1%; diluted EPS was $0.12, down from $0.14 in Q2 2024 .
  • Management highlighted stabilizing demand, sequential shipment growth, and field inventory down ~11% year over year; price/mix contributed +10% offsetting a 13% unit decline .
  • Guidance tone: cautious but constructive; potential to deliver sales growth versus prior year in H2 2025; CapEx remains low (~$3M FY), regular quarterly dividend maintained at $0.14 per share .
  • Key risks remain tariffs and interest rates; suppliers’ pricing for MY 2026 is set but could change with tariff policy shifts; tax rate in Q2 was 21.3%, with CFO expecting slightly higher for the remainder of the year .
  • Notable discrepancy: CFO verbally cited year-to-date operating cash flow at “$92.2M,” while the press release shows $9.2M year to date; we anchor to filed press release figures .

What Went Well and What Went Wrong

What Went Well

  • Sequential demand improvement: shipments and sales “grew sequentially again” with Q2 sales rising vs Q1; field inventories at more balanced levels support production stability .
  • Price/mix strength: price/mix up +10% year over year, substantially offsetting unit declines; gross margin up 20 bps to 19.1% on manufacturing cost efficiencies .
  • Balance sheet resilience: ~$50.2M cash, no debt; Board declared a regular quarterly dividend of $0.14 per share, signaling ongoing capital return capacity .

What Went Wrong

  • Unit volumes: number of boats sold decreased 13% year over year, driving lower net sales despite pricing/mix tailwinds .
  • Profitability compression: net income down 25% year over year to $4.2M, EPS to $0.12; EBITDA down 13% to $5.6M and margin down 100 bps to 8.3% .
  • SG&A deleverage: SG&A rose 9% to $8.1M and 12.0% of sales (+130 bps) on higher R&D and incentive timing; tax rate increased to 21.3% (+560 bps) .

Financial Results

Trend Comparison (oldest → newest)

MetricQ4 2024Q1 2025Q2 2025
Revenue ($USD Millions)$47.8 $59.0 $67.7
Diluted EPS ($USD)$0.12 $0.06 $0.12
Gross Margin (%)19.2% 18.6% 19.1%
EBITDA ($USD Millions)$4.382 $3.402 $5.598
EBITDA Margin (%)9.2% 5.8% 8.3%
Operating Income ($USD Millions)$3.684 $2.613 $4.811
Cash and Equivalents ($USD Millions)$52.379 $57.103 $50.171

Q2 2025 vs Prior Year, Prior Quarter, and Estimates

MetricQ2 2024Q1 2025Q2 2025Consensus (Q2 2025)Beat/Miss
Revenue ($USD Millions)$69.5 $59.0 $67.7 Unavailable*N/A
Diluted EPS ($USD)$0.14 $0.06 $0.12 Unavailable*N/A
Gross Margin (%)+20 bps YoY delta 18.6% 19.1% Unavailable*N/A
EBITDA ($USD Millions)$6.452 $3.402 $5.598 Unavailable*N/A
EBITDA Margin (%)9.3% 5.8% 8.3% Unavailable*N/A

*Estimates retrieved from S&P Global; unavailable for MPX Q2 2025 via our query.

KPIs

KPIQ2 2025Prior Period/Context
Units sold YoY change (%)-13% Price/mix +10% YoY
Field unit inventory YoY change (%)-11% Dealers remain cautious
SG&A ($USD Millions)$8.1 12.0% of sales; +130 bps YoY
Interest income ($USD Thousands)$476 Lower cash post special dividend
Tax rate (%)21.3% Up 560 bps YoY
Operating Cash Flow YTD ($USD Millions)$9.165 Free Cash Flow YTD $8.642

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
CapEx ($USD)FY 2025≈$3M ≈$3M; expected to pick up in H2 and track $2–$3M Maintained
DividendQ3 2025 paymentRegular quarterly dividend $0.14/share (maintained in Q1) Regular quarterly dividend $0.14/share; payable Sep 10, 2025 Maintained
Tax rateFY 2025 (rest of year)N/A“Likely slightly higher than” Q2’s 21.3% New qualitative
Sales trajectoryH2 2025Near-term YoY “generally flat”; potential growth in H2 2025 Potential to deliver sales growth vs prior year in H2 2025 Maintained qualitative

Earnings Call Themes & Trends

TopicPrevious Mentions (Q-2: Q4 2024; Q-1: Q1 2025)Current Period (Q2 2025)Trend
Tariffs/macroRate cuts welcomed; uncertainty persists; dealers cautious Tariffs “top of mind”; supplier pricing set but could revalue with tariff changes; interest rate outlook cloudy; market expects cuts Persistent headwind; slightly more constructive on rates
Inventory/channelManaged destocking; cautious dealers Field inventory -18% YoY in Q1; conservative MY 2026 rollout Field inventory -11% YoY; sequential shipments/sales up
Product roadmapProud of MY 2025 launches Conservative approach to MY 2026; maintain innovation “Excited” about MY 2026 introductions; portfolio enhancements
CapEx/projectSolar project completed; cost savings/effects FY 2025 CapEx ≈$3M CapEx ≈$3M; H2 pickup to $2–$3M for year
Pricing/mixFavorable vs 4Q:23 Price/mix +4% YoY Price/mix +10% YoY
M&A/portfolioSeeking “right M&A opportunity” —Evaluating acquisitions; “buyer of choice” stance

Management Commentary

  • “Second quarter results reflected a stabilization of demand and a more balanced environment… shipments and sales grew sequentially again… excited about our model year 2026 introductions.” — Ben M. Palmer, CEO .
  • “Sales were down 3%… 13% decrease in number of boats sold, partially offset by +10% price/mix… 15% sales increase over the first quarter… gross margin 19.1%, up 20 bps.” — Mike Schmit, CFO .
  • “Tariffs and macro risks remain top of mind… supplier cost increases manageable thus far… interest rate outlook cloudy although market expects rate cuts later this year.” — Ben M. Palmer, CEO .
  • “We will demonstrate [MY 2026] models at our August dealer meeting… evaluate acquisition opportunities… balance sheet and operations make us a buyer of choice for high-quality assets.” — Ben M. Palmer, CEO .

Q&A Highlights

  • The call featured no analyst Q&A; operator reported “no questions at this time” and concluded the call. No guidance clarifications beyond prepared remarks .

Estimates Context

  • Wall Street consensus (S&P Global) for Q2 2025 EPS and revenue was unavailable for MPX at the time of review; we could not retrieve any EPS or revenue estimate counts for Q2 2025, only actuals post-reporting. Estimates may be sparse due to limited coverage for MPX. Values retrieved from S&P Global*.
  • For forward context, management indicated potential sales growth versus prior year in H2 2025; absent formal numeric guidance, sell-side models may modestly raise H2 topline while keeping margins conservative given SG&A investment and tariff/rate uncertainty .

Key Takeaways for Investors

  • Sequential recovery: Revenue up ~15% vs Q1 with margin stabilization; price/mix strength (+10%) offsetting unit declines — constructive for H2 set-up .
  • Inventory normalization: Field inventory down ~11% YoY and production aligned to demand; reduces risk of future discounting and supports margin resilience .
  • Capital discipline: Low CapEx (~$3M FY), robust cash ($50.2M), no debt, and dividend continuity at $0.14/share; supports optionality for M&A and R&D .
  • Watch tariffs and rates: Supplier pricing for MY 2026 could shift with tariff changes; interest rate cuts could improve retail demand but lag effects are likely — monitor policy developments .
  • H2 2025 potential: Management sees potential to deliver sales growth vs prior year; absent numeric guidance, track dealer orders and August dealer meeting feedback for confirmation .
  • Model implications: Consider modest revenue uplift in H2, stable gross margin near ~19%, SG&A mix elevated from R&D/incentives; FCF generation intact given low CapEx .
  • Note discrepancy: Anchor to filed press release for cash flow (YTD OCF $9.2M) vs CFO verbal “$92.2M” transcription; use SEC-filed figures for models .