Marine Products Corporation

Third-quarter sales increased 7% year over year. Gross profit was $10.2 million, up 11%, and gross margin was 19.2%, up 80 basis points from last year. SG&A was $7.4 million, up 31%, and SG&A was 13.9% of sales, up 260 basis points. Diluted EPS was $0.07 versus $0.10 last year, and EBITDA was $3.7 million versus $4.3 million last year. Year-to-date operating cash flow was $11.7 million, free cash flow was $10.8 million, CapEx was about $968,000, dividends paid were $14.7 million, and the company finished the quarter with $47.4 million of cash and no debt. For full-year CapEx, management expects approximately $1 million to $1.5 million. In the fourth quarter, the company expects to pay about $3 million of net cash related to liquidation of its terminated supplemental executive retirement plan and record a discrete tax adjustment increasing its effective tax rate.

Ben Palmer said the quarter showed a meaningful turning point as channel destocking appears mostly behind the company and demand is normalizing. He emphasized cautious optimism, citing positive dealer feedback on new and upgraded Chaparral and Robalo models, better inventory discipline, and supportive reactions to financing and marketing efforts. He also noted macro and tariff uncertainty remain, but said lower interest rates could help reluctant finance buyers and that the company will continue investing in brands and selective growth opportunities.

Mike Schmit highlighted that the 7% sales increase was driven by a 7% net increase in price and mix, partially offset by slightly fewer boats sold. Gross profit rose to $10.2 million and gross margin expanded to 19.2% due to better margins on larger boats and improved manufacturing cost absorption as production stabilized. He said SG&A increased to $7.4 million because of new product R&D timing, compensation-related accruals, and warranty adjustments, while the tax rate was 19.9% and likely higher for the rest of the year. He also noted year-to-date operating cash flow of $11.7 million, free cash flow of $10.8 million, $47.4 million cash, no debt, and expected year-end CapEx of $1 million to $1.5 million, plus a roughly $3 million net cash outflow tied to the SERP liquidation.

There was no analyst Q&A on the call, so no additional concerns or follow-up topics were raised. The main management commentary centered on channel inventory normalization, demand sensitivity to interest rates, tariff uncertainty, and the company’s plan to keep supporting dealers in a more targeted way.