Marine Products Corp (NYSE:MPX) Q2 2020 Earnings Conference Call - Final Transcript

Jul 29, 2020 • 08:00 am ET

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Marine Products Corp (NYSE:MPX) Q2 2020 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Good morning, and thank you for joining us for Marine Products Corporation's Second Quarter 2020 Financial Earnings Conference Call. Today's call will be hosted by Rick Hubbell, President and CEO, and Ben Palmer, Chief Financial Officer. Also present is Jim Landers, Vice President of Corporate Finance.

[Operator Instructions]

Jim will get us started by reading the forward-looking disclaimer.

Executive
James C. Landers

Thanks, Amy, and good morning.

Before we get started today, I'd like to remind everyone that some of the statements that we will make on this call may be forward looking in nature and reflect a number of known and unknown risks. I'd like to refer you to our press release issued today, our 2019 10-K and other SEC filings that outline those risks, all of which are available on our website at marineproductscorp.com. If you've not received our press release, please visit our website, again, at marineproductscorp.com for a copy.

We'll make a few comments about the quarter and then we'll be available for your questions. Now I will turn the call over to our President and CEO, Rick Hubbell.

Executive
Richard Hubbell

Jim, thanks.

We issued our earnings press release for the second quarter of 2020 this morning. Ben Palmer, our CFO, will discuss the financial results in more detail in a moment. At this time, I will briefly discuss our operational highlights. We temporarily suspended our manufacturing operations for five weeks during the quarter as a precautionary measure to protect our employees, their families and our community during the shelter-in-place order relating to COVID-19 pandemic. As a result, our unit sales during the second quarter declined by almost 58%, which led to lower operating and net income. We maintained profitability by reducing expenses across the board, but our second quarter net income declined significantly compared to last year's record quarterly financial results.

We resumed operations on May 6 at higher production levels than during the first quarter in response to an increase in dealer and consumer demand that we noticed in late March. Our dealers sold a great deal of their inventory during the second quarter. And at the end of June, our order backlog was the highest it has been in a number of years. As we reviewed -- as we review our market share at the end of the second quarter, I am pleased to report that Chaparral continues to be a market share leader in its sterndrive recreational boat category. Robalo also continues to be a market share leader in the outboard category. And the combination of Chaparral and Robalo outboard models held the highest outboard boat market share in their size categories.

We announced this morning that our Board of Directors yesterday declared a regular quarterly dividend of $0.08 per share, the same as our regular quarterly dividend in the previous quarter.

With that overview, I will turn it over to our CFO, Ben Palmer.

Executive
Ben Palmer

Thank you, Rick.

Net sales for the second quarter of 2020 were $40.8 million, a 54% decrease compared to the second quarter of last