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What changed in MARINE PRODUCTS CORP's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of MARINE PRODUCTS CORP's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+217 added−211 removedSource: 10-K (2025-02-28) vs 10-K (2024-02-28)

Top changes in MARINE PRODUCTS CORP's 2024 10-K

217 paragraphs added · 211 removed · 144 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

66 edited+36 added−43 removed14 unchanged
Biggest changeAccording to estimates provided by Statistical Surveys, Inc. during the latest reported period ended September 30, 2023, the top five outboard model manufacturers, which includes Marine Products Corporation’s brands, have a combined market share of approximately 36%, consistent with the same period in the prior year.
Biggest changeFor illustrative purposes, the Company estimates overall its (and other leading companies’) U.S. market share by key categories and sizes as follows, according to Statistical Surveys, Inc. during the latest reported year ended September 30, 2024): ● The top five sterndrive model manufacturers of boats in lengths from 21 to 34 feet, which includes Marine Products’ Chaparral brand, have a combined market share of approximately 85%; Marine Products’ Chaparral brand was the second largest of these brands with a share of approximately 23% of this category. ● The top five outboard model manufacturers of boats in lengths from 18 to 36 feet, which includes Marine Products’ Robalo and Chaparral (outboard only) brands, have a combined market share of approximately 35%; Robalo is the fourth largest brand of outboard boats in the United States with a market share of 4.3%, and when combined with Chaparral outboards, the Company holds the fourth highest position in the outboard market of this size range, with a market share of approximately 6%.
Item 1. Business Marine Products manufactures fiberglass motorized boats distributed and marketed through its independent dealer network. Marine Products’ product offerings include Chaparral sterndrive and outboard pleasure boats and Robalo outboard sport fishing boats. Organization and Overview Marine Products is a Delaware corporation incorporated on August 31, 2000, in connection with a spin-off from RPC, Inc. (NYSE: RES) (“RPC”).
Item 1. Business Marine Products manufactures fiberglass motorized boats distributed and marketed through its independent dealer network. Marine Products’ product offerings include Chaparral sterndrive and outboard pleasure boats and Robalo outboard sport fishing boats. Organization & Overview Marine Products is a Delaware corporation incorporated on August 31, 2000, in connection with a spin-off from RPC, Inc. (NYSE: RES) (“RPC”).
The Occupational Safety and Health Administration (“OSHA”) standards limit the number of emissions to which an employee may be exposed without the need for respiratory protection or upgraded plant ventilation. Marine Products’ manufacturing facilities are regularly inspected by OSHA and by state and local inspection agencies and departments.
The Occupational Safety and Health Administration (“OSHA”) standards limit the number of emissions to which an employee may be exposed without the need for respiratory protection or upgraded plant 12 ​ ventilation. Marine Products’ manufacturing facilities are regularly inspected by OSHA and by state and local inspection agencies and departments.
In that event, all repurchase agreements of all manufacturers supplying a defaulting dealer are generally invoked regardless of the boat or boats with respect to which the dealer has defaulted. Unlike Marine Products’ obligation to repurchase boats repossessed by qualified lenders, Marine Products is under no obligation to repurchase boats directly from dealers.
In that event, all repurchase agreements 9 ​ of all manufacturers supplying a defaulting dealer are generally invoked regardless of the boat or boats with respect to which the dealer has defaulted. Unlike Marine Products’ obligation to repurchase boats repossessed by qualified lenders, Marine Products is under no obligation to repurchase boats directly from dealers.
We provide competitive financial benefits such as a 401(k) retirement plan with a company match, and generally grant awards of restricted stock for certain of our salaried employees.
We provide 13 ​ competitive financial benefits such as a 401(k) retirement plan with a company match, and generally grant awards of restricted stock for certain of our salaried employees.
Availability of Filings Marine Products makes available free of charge on its website, MarineProductsCorp.com, the annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and all amendments to those reports on the same day as they are filed with the Securities and Exchange Commission. 13 ​
Availability of Filings Marine Products makes available free of charge on its website, MarineProductsCorp.com, the annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and all amendments to those reports on the same day as they are filed with the Securities and Exchange Commission. 14 ​
However, the Company believes the cost of boat ownership has risen enough to impact retail demand. Therefore, it will be more difficult to raise prices in the future to compensate for increased costs of raw materials and components, which could impact the Company’s sales and profit margins.
However, the Company believes the cost of boat ownership has risen enough to impact retail demand. Therefore, it may be more difficult to raise prices in the future to compensate for increased costs of raw materials and components, which could impact the Company’s sales and profit margins.
The Company currently has an agreement with one of the floor plan lenders whereby the contractual repurchase limit is based on the highest of the following criteria: (i) a specified percentage of the amount of the average net receivables financed by the floor plan lender for our dealers, (ii) the total average net receivables financed by the floor plan lender for our two highest dealers during the prior three month period, or (iii) $8.0 million, less repurchases during the prior 12 month period.
The Company currently has an agreement with one of the floor plan lenders whereby the contractual repurchase limit is based on the highest of the following criteria: (i) a specified percentage of the amount of the average net receivables financed by the floor plan lender for our dealers, (ii) the total average net receivables financed by the floor plan lender for our two highest dealers for the three highest monthly receivables balances during the past twelve months, or (iii) $8.0 million, less repurchases during the prior 12 month period.
The following table provides a brief description of our product lines and their particular market focus: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Number ​ ​ ​ Approximate ​ ​ ​ of ​ Overall ​ Retail ​ Product Line Models Length Price Range Description Chaparral – SSi Sport Boats ​ 7 ​ 19′-23′ ​ $48,000 - $107,000 ​ Fiberglass sterndrive and outboard powered sport boats marketed as high value runabout for smaller to larger groups.
The following table provides a brief description of our product lines and their particular market focus: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Number ​ ​ ​ Approximate ​ ​ ​ Of ​ Overall ​ Retail ​ Product Line Models Length Price Range Description Chaparral – SSi Sport Boats ​ 7 ​ 20′-23′ ​ $48,500 - $105,000 ​ Fiberglass sterndrive and outboard powered sport boats marketed as high value runabout for smaller to larger groups.
Marketed as high value, luxury runabouts for family groups. ​ ​ ​ ​ ​ ​ ​ ​ ​ Chaparral – Surf Series 5 21′-30′ ​ $76,000 - $338,000 This model line features a forward-facing sterndrive engine. Fiberglass multipurpose bowriders, the Surf Series models are marketed to both experienced and value-conscious buyers.
Marketed as high value, luxury runabouts for family groups. ​ ​ ​ ​ ​ ​ ​ ​ ​ Chaparral – Surf Series 5 21′-30′ ​ $80,000 - $352,000 This model line features a forward-facing sterndrive engine. Fiberglass multipurpose bowriders, the Surf Series models are marketed to both experienced and value-conscious buyers.
The Explorer series features extra seating options. ​ ​ ​ ​ ​ ​ ​ Robalo – Cayman Bay Boats 6 20′-26′ ​ $55,000 - $227,000 Fiberglass outboard powered sport fishing boats for large freshwater lakes or coastal saltwater use. Marketed to experienced fishermen wanting inshore and offshore capabilities.
The Explorer series features extra seating options. ​ ​ ​ ​ ​ ​ ​ Robalo – Cayman Bay Boats 6 20′-26′ ​ $57,000 - $233,000 Fiberglass outboard powered sport fishing boats for large freshwater lakes or coastal saltwater use. Marketed to experienced fishermen wanting inshore and offshore capabilities.
Higher interest rates also impact our dealers, as their boat purchases are financed and they bear much of the carrying costs of holding inventories. Lastly, the Company incurs higher costs from rising interest rates because we often pay a portion of dealer floor plan interest costs.
Higher interest rates also impact our dealers, as their boat purchases are financed and they bear much of the carrying costs of holding inventories. Lastly, the Company incurs higher costs from rising interest rates because we often pay a portion of dealer floor plan interest costs as part of our dealer sales incentive programs.
During 2021 and 2022, however, extraordinarily high dealer and consumer demand combined with the Company’s production delays resulting from supply chain disruptions caused dealer inventories to fall to historic lows.
During 2021 and 2022, however, 10 ​ extraordinarily high dealer and consumer post-pandemic demand combined with the Company’s production delays resulting from supply chain disruptions caused dealer inventories to fall to historic lows.
Human Capital The table below shows the number of employees at December 31, 2023 and 2022: ​ ​ ​ ​ ​ At December 31, 2023 2022 Employees 690 935 ​ The recreational boating industry is cyclical and therefore headcount is subject to change based on production levels which are a function of dealer and consumer demand.
Human Capital The table below shows the number of employees at December 31, 2024 and 2023: ​ ​ ​ ​ ​ At December 31, 2024 2023 Employees 617 690 ​ The recreational boating industry is cyclical and therefore headcount is subject to change based on production levels which are a function of dealer and consumer demand.
Design features include handling of a runabout, style of a sportboat and open concept layout. Select models offer Ski & Fish options to meet specific needs.
Design features include handling of a runabout, style of a sport boat and open concept layout. Select models offer Ski & Fish options to meet specific needs.
In general, when a dealer purchases and takes delivery of a boat pursuant to a floor plan financing arrangement, it draws against its line of credit and the lender pays the invoice cost of the boat directly to Marine Products generally within ten business days.
In general, when a dealer purchases and takes delivery of a boat pursuant to an FPF arrangement, it draws against its line of credit and the lender pays the invoice cost of the boat directly to Marine Products, generally within ten business days.
When the dealer in turn sells the boat to a retail customer, the dealer repays the lender, thereby restoring its available credit line. Each dealer’s floor plan credit facilities are secured by the dealer’s inventory, letters of credit, and perhaps other personal and real property.
When the dealer in turn sells the boat, the dealer repays the lender, restoring its available credit line. Each dealer’s floor plan credit facilities are secured by the dealer’s inventory, letters of credit, and perhaps other personal and real property.
Compliance with these EPA regulations has increased Marine Products’ cost and may also reduce Marine Products’ net sales, because the increased cost of owning a boat may force consumers to buy a smaller or less expensive boat.
These regulations have increased the cost to manufacture the majority of the Company’s boat products. Compliance with these EPA regulations has increased Marine Products’ cost and may also reduce Marine Products’ net sales, because the increased cost of owning a boat may force consumers to buy a smaller or less expensive boat.
Accordingly, the aggregate repurchase obligation with all financing institutions was approximately $26.6 million as of December 31, 2023. In the event that a dealer defaults on a credit line, the qualified lender may then invoke the manufacturer’s repurchase obligation with respect to that dealer.
Accordingly, the aggregate repurchase obligation with all financing institutions was approximately $25.0 million as of December 31, 2024. In the event that a dealer defaults on a credit line, the qualified lender may then invoke the manufacturer’s repurchase obligation with respect to that dealer.
Competition The recreational boat industry is highly fragmented, resulting in intense competition for customers, dealers and boat show exhibition space. There is significant competition both within markets we currently serve and in new markets that we may enter. Marine Products’ brands compete with several large national or regional manufacturers that have substantial financial, marketing and other resources.
Our highly fragmented industry has intense competition for customers, dealers and boat show exhibition space. There is significant competition both within geographic and product/category markets we currently serve and in new markets that we may enter. Marine Products’ brands compete with several large national or regional manufacturers that have substantial financial, marketing and other resources.
All models marketed with a trailer at national fixed retail prices. ​ ​ ​ ​ ​ ​ ​ Robalo – Dual Consoles 2 20′-31′ ​ $61,000 - $363,000 Multi-purpose fiberglass outboard powered sport fishing boats for large freshwater lakes or saltwater use.
All models marketed with a trailer at national fixed retail prices. ​ ​ ​ ​ ​ ​ ​ Robalo – Dual Consoles 3 20′-31′ ​ $64,000 - $372,000 Multi-purpose fiberglass outboard powered sport fishing boats for large freshwater lakes or saltwater use.
Plugs are used to create a mold from which prototype boats can be built. Adjustments are made to the plug design until acceptable parameters are met. The final plug is used to create the necessary number of production molds. Molds are used to produce the fiberglass hulls and decks.
Plugs (used to create a mold from which prototype boats can be built) are constructed in the research and development phase from designs. Adjustments are made to the plug design until acceptable parameters are met. The final plug is used to create the necessary number of production molds, which are then used to produce the fiberglass hulls and decks.
The contractual agreements that Marine Products or its subsidiaries have with these qualified lenders contain the Company’s assumption of specified percentages of the debt obligation on repossessed boats, up to certain contractually determined dollar limits negotiated with the lender.
The contractual agreements that we have with these qualified lenders contain the Company’s assumption of specified percentages of the debt obligation on repossessed boats, up to certain contractually determined dollar limits negotiated with the lender.
A proprietary and patented feature available on many Chaparral sterndrive models is the Infinity Power Step TM . This mechanical feature allows a portion of the stern to automatically descend underwater, creating a “step-down” staircase effect, giving boaters the ability to step down from the stern into the water. The step also functions as seating, creating a semi-submerged bench.
As an innovation example, a proprietary and patented feature available on many Chaparral sterndrive models is the Infinity Power Step TM . This mechanical feature allows a portion of the stern to automatically descend underwater, creating a “step-down” staircase effect, giving boaters the ability to step down from the stern into the water.
We believe that dealer inventories of our boat models as of December 31, 2023 are sufficient to meet the current level of retail customer demand. The sales order backlog as of December 31, 2023 was 1,243 boats with estimated net sales of approximately $92.3 million. This represents an approximate 20.7 week backlog based on recent production levels.
We believe that dealer inventories of our boat models as of December 31, 2024 are sufficient to meet the current level of retail customer demand. The sales order backlog as of December 31, 2024 was 655 boats with estimated net sales of approximately $53.4 million. This represents an approximate 11.7 week backlog based on recent production levels.
As defined by the agreement, the repurchase limit for this lender was $18.9 million as of December 31, 2023. The Company has contractual repurchase agreements with additional lenders with an aggregate maximum repurchase obligation of $7.7 million, with various expiration and cancellation terms of less than one year.
As defined by the agreement, the repurchase limit for this lender was $19.6 million as of December 31, 2024. The Company has contractual repurchase agreements with additional lenders with an aggregate maximum repurchase obligation of $5.4 million, with various expiration and cancellation terms of less than one year.
In support of its new product development efforts, Marine Products incurred research and development costs of $757 thousand in 2023, $437 thousand in 2022, and $776 thousand in 2021.
In support of new product development efforts, Marine Products incurred research and development costs of $762 thousand in 2024, $757 thousand in 2023, and $437 thousand in 2022.
Our dedicated team of employees work toward a common purpose. We provide employment in a small community which we have supported as the largest employer since 1976 under the same management. Our company is strong in its values, relationships and consistency in management.
We provide employment in a small community which we have supported as the largest employer since 1976 under the same management. Our company is strong in its values, relationships and consistency in management.
These boats are designed to enhance the wake of the boat to accommodate the popular sport of wake surfing. ​ ​ ​ ​ ​ ​ ​ Chaparral – OSX Sport Boats 4 25′-30′ ​ $140,000 - $483,000 Fiberglass, multipurpose sport boats with outboard power featuring plentiful seating and entertaining areas, cabin and bathroom accommodations, excellent performance, and luxury finishes. ​ ​ ​ ​ ​ ​ ​ ​ ​ Robalo – Center Consoles 11 18′-36′ ​ $46,000 - $654,000 Fiberglass outboard sport fishing boats for large freshwater lakes or saltwater use.
These boats are designed to enhance the wake of the boat to accommodate the popular sport of wake surfing. ​ ​ ​ ​ ​ ​ ​ Chaparral – OSX Sport Boats 4 26′-32′ ​ $145,000 - $487,000 Fiberglass, multipurpose sport boats with outboard power featuring plentiful seating and entertaining areas, cabin and bathroom accommodations, excellent performance, and luxury finishes. ​ ​ ​ ​ ​ ​ ​ ​ ​ Robalo – Center Consoles 12 16′-36′ ​ $36,000 - $688,000 Fiberglass outboard sport fishing boats for large freshwater lakes or saltwater use.
The Company believes that the recent increase in interest rates (which is generally linked to higher inflation) has reduced retail demand for smaller boats, since purchasers of smaller boats are typically more sensitive to increases in the cost of boat ownership.
The Company believes that the 2022 and 2023 increases in interest rates (which is generally linked to higher inflation) have reduced retail demand for smaller boats, since purchasers of smaller boats are typically more sensitive to increases in the cost of boat ownership and typically finance their purchases.
The combination of low inventory levels and high demand through the first half of 2023 forced the Company to allocate its production to dealers to fulfill as many orders as possible and rebuild dealer inventories. Beginning in the second half of 2023, demand moderated and inventories were fully replenished.
The combination of low inventory levels and high demand through the first half of 2023 forced the Company to allocate its production to dealers to fulfill as many orders as possible and rebuild dealer inventories. Beginning in the second half of 2023, demand began softening and inventories were replenished, quickly resulting in excess channel inventory heading into 2024.
All marketed with national fixed retail prices. ​ ​ ​ ​ ​ ​ ​ Chaparral – SSX Sport Boats ​ 5 ​ 24′-34′ ​ $128,000 - $564,000 ​ Fiberglass sterndrive and outboard powered models that combine features of sportboats and bowriders.
All marketed with national fixed retail prices. ​ ​ ​ ​ ​ ​ ​ Chaparral – SSX Sport Boats ​ 4 ​ 24′-30′ ​ $132,000 - $326,000 ​ Fiberglass sterndrive and outboard powered models that combine features of sport boats and bowriders.
The five-year transferable hull warranty terminates five years after the date of the original retail purchase. Claim costs related to components are generally absorbed by the original component manufacturer. The manufacturers of the engines, generators, and navigation electronics included on our boats provide and administer their own warranties for various lengths of time.
Warranties for additional items are provided for periods of one to five years and are not transferable. Claim costs related to components are generally absorbed by the original component manufacturer. The manufacturers of the engines, generators, and navigation electronics included on our boats provide and administer their own warranties for various lengths of time.
The sales order backlog as of December 31, 2022 was 1,544 boats with estimated net sales of approximately $115.0 million. This represented an approximate 16.6 week backlog based on production levels at that time.
The sales order backlog as of December 31, 2023 was 1,243 boats with estimated net sales of approximately $92.3 million. This represented an approximate 20.7 week backlog based on production levels at that time.
Except for the Chaparral and Robalo trademarks, Marine Products is not dependent upon any single trademark or trade name or group of trademarks or trade names. The Chaparral and Robalo trademarks are currently registered in the United States.
Proprietary Matters Marine Products owns several trademarks, trade names and patents that it believes are important to its business. Except for the Chaparral and Robalo trademarks, Marine Products is not dependent upon any single trademark or trade name or group of trademarks or trade names. The Chaparral and Robalo trademarks are currently registered in the United States.
Marine Products does not manufacture the engines installed in its boats. Engines are generally specified by the dealers at the time of ordering a boat, usually based on anticipated customer preferences or actual customer orders.
The Company does not manufacture the engines installed in its boats. Engines are generally specified by the dealers at the time of ordering a boat, usually based on anticipated customer preferences or actual customer orders. Sterndrive engines are purchased from Mercury Marine and Volvo Penta, under annually negotiated purchase agreements.
The Company will continue to monitor the number of boats in dealer inventories and adjust its production levels as it deems necessary to manage dealer inventory levels. The Company typically does not manufacture a significant number of boats for its own inventory.
The Company will continue to monitor the number of boats in dealer inventories and adjust its production levels as it deems necessary to manage dealer inventory levels. Floor Plan Financing.
The remaining dealers finance their boat inventory with smaller regional financial institutions in local markets or self-finance. Under these established arrangements with qualified lending institutions, a dealer establishes a line of credit with one or more of these lenders for the purchase of boat inventory for sales to retail customers in their showroom or during boat show exhibitions.
Under these FPF arrangements, a dealer establishes a line of credit with one or more of these lenders for the purchase of boat inventory for sales to retail customers in their showroom or during boat show exhibitions.
Most of our dealers also inventory and sell boat brands manufactured by other companies, including some that compete directly with our brands. The territories served by any dealer are not exclusive to the dealer; however, Marine Products uses discretion in establishing relationships with new dealers in an effort to protect the mutual interests of the existing dealers and the Company.
The territories served by our dealers are not exclusive to the dealer; however, Marine Products uses discretion in establishing relationships with new dealers in an effort to protect the mutual interests of the existing dealers and the Company.
In connection with a dealer’s floor plan financing arrangements with a qualified lending institution, Marine Products or its subsidiaries have agreed to repurchase inventory which the lender repossesses from a dealer and returns to Marine Products in a “new and unused” condition subject to normal wear and tear, as defined.
In connection with a dealer’s FPF arrangements, Marine Products has agreed to repurchase inventory which the lender repossesses from a dealer and returns to Marine Products in a “new and unused” condition subject to normal wear and tear.
These programs help to stabilize Marine Products’ manufacturing between the peak and off-peak periods and promote sales of certain models. For the 2024 model year (which commenced July 1, 2023), Marine Products offered its dealers several sales incentive programs based on dollar volume and timing of dealer purchases.
For the 2025 model year (which commenced July 1, 2024), Marine Products offered its dealers several sales incentive programs based on dollar volume and timing of dealer purchases.
We estimate that the boat manufacturing industry includes fewer than 15 sterndrive manufacturers and approximately 75 outboard boat manufacturers with significant unit production, with a large number representing small, privately held companies with varying degrees of professional management and manufacturing skill.
We estimate that the U.S. boat manufacturing industry includes nearly 100 sport/pleasure boat producers with significant unit production, with a large number representing small, privately held companies with varying degrees of professional management and manufacturing skill.
Management believes that the five largest states for boat sales at the present time are Florida, Texas, Michigan, North Carolina and Minnesota. Marine Products has dealers in each of these states.
Marine Products has six independent field sales representatives who manage relationships with existing dealers and develop new dealer relationships. 8 ​ Management believes that the five largest states for boat sales at the present time are Florida, Texas, Michigan, North Carolina and Minnesota. The Company has dealers in each of these and many other states across the country.
In addition, boats manufactured for sale in the European Community must be compliant with the International Organization for Standardization requirements which specify standards for the design and construction of powerboats. All boats sold by Marine Products meet these standards. In addition, safety of recreational boats is subject to federal regulation under the Boat Safety Act of 1971.
Recreational powerboats sold in the United States must be manufactured to meet the standards of certification required by the United States Coast Guard. In addition, boats manufactured for sale in the European Community must be compliant with the International Organization for Standardization requirements which specify standards for the design and construction of powerboats.
We believe that this program improves employee well-being by facilitating their access to health care. Safety - Marine Products monitors several safety measures and reports them to senior operational management on a regular basis. Management reviews safety incidents, and the Company works to remediate operational issues that may be potential causes of any frequent incidents.
Safety - Marine Products monitors several safety measures and reports them to senior operational management on a regular basis. Management reviews safety incidents, and the Company works to remediate operational issues that may be potential causes of any frequent incidents. In addition, the Company awards safety bonuses to the drivers of its company-owned vehicles based on their driving records.
The Company continues to assess demand and dealer inventories to manage production levels. Approximately 71% of Marine Products’ domestic shipments are made pursuant to “floor plan financing” programs in which Marine Products’ subsidiaries participate on behalf of their dealers with major third-party financing institutions.
Approximately 69% of Marine Products’ domestic shipments are made pursuant to “floor plan financing” (or “FPF”) programs in which Marine Products’ subsidiaries participate on behalf of their dealers with major third-party financing institutions. The remaining dealers finance their boat inventory with smaller regional financial institutions or self-finance.
The engines used in Marine Products’ Chaparral and Robalo product lines are subject to these regulations. These regulations are similar to regulations adopted by the California Air Resources Board in 2007 but apply to all U.S. states and territories. These regulations have increased the cost to manufacture the majority of the Company’s boat products.
These regulations also require, among other things, that the engine manufacturer provides a warranty that the engine meets EPA emission standards. The engines used in Marine Products’ Chaparral and Robalo product lines are subject to these regulations. These regulations are similar to regulations adopted by the California Air Resources Board in 2007 but apply to all U.S. states and territories.
Marine Products offers both dealer and retail sales incentive programs generally designed to promote early replenishment of the stock in dealer inventories depleted throughout the prime spring and summer selling seasons, and to promote the sales of older 7 ​ models in dealer inventory and particular models during specified periods.
Marine Products offers both dealer and retail sales incentive programs to promote dealer inventory replenishment following the prime spring and summer selling seasons, and to promote the sales of older models in dealer inventory. These programs also help to stabilize the Company’s manufacturing schedules between the peak and off-peak periods.
We do not currently anticipate that any material expenditure will be required to continue to comply with existing environmental or safety regulations in connection with our existing manufacturing facilities. 11 ​ Recreational powerboats sold in the United States must be manufactured to meet the standards of certification required by the United States Coast Guard.
Marine Products believes that its facilities comply in all material aspects with these regulations. We do not currently anticipate that any material expenditure will be required to continue to comply with existing environmental or safety regulations in connection with our existing manufacturing facilities.
The Company provides a health insurance option that includes a local primary care physician who provides immediate care or medical consultation to its employees at a reduced or no cost, as well as certain maintenance medications at a reduced or no cost. 12 ​ Under this program, an employee with a health concern visits the physician’s office, which is close to our manufacturing facilities, and either receives care or is referred to another facility for testing or additional care.
Under this program, an employee with a health concern visits the physician’s office, which is close to our manufacturing facilities, and either receives care or is referred to another facility for testing or additional care. We believe that this program improves employee well-being by facilitating their access to health care.
The Company sells its products to a network of 203 domestic and 87 international independent authorized dealers. Marine Products’ mission is to enhance its customers’ boating experience by providing them with high quality, innovative powerboats. The Company intends to remain a leading manufacturer of recreational powerboats for sale to a broad range of consumers worldwide.
The Company sells its products to a network of 202 domestic and 88 international independent authorized dealers. Marine Products’ mission is to enhance its customers’ boating experience by providing them with high quality, innovative powerboats. The Company’s two brands are Chaparral (sport boats) and Robalo (fishing boats): Chaparral was founded in 1965 in Ft. Lauderdale, Florida.
The Boat Safety Act requires boat manufacturers to recall products for replacement of parts or components that have demonstrated defects affecting safety. Marine Products has from time to time instituted recalls for defective component parts produced by other manufacturers. None of the recalls has had a material adverse effect on Marine Products.
Marine Products has from time to time instituted recalls for defective component parts produced by other manufacturers. None of the recalls has had a material adverse effect on Marine Products. The EPA has adopted regulations stipulating that many marine propulsion engines meet an air emission standard that requires fitting a catalytic converter to the engine.
The Company has historically aimed to 9 ​ grow its boat sales, net sales and market share by differentiating our product lines through industry-leading feature innovations and designs.
Strategy The Company has historically aimed to grow its boat sales, net sales and market share by differentiating our product lines through industry-leading feature innovations and designs. To achieve these objectives, we plan to execute strategic investments, both organic and potential M&A, that we believe will increase our scale, enhance our product offering, and improve our profitability and cash flow.
This provided Chaparral an opportunity to obtain additional manufacturing space and access to a trained workforce. With over 58 years of boatbuilding experience, Chaparral continues to expand the range of its offerings through insightful, innovative product design and quality manufacturing processes in order to reach an increasingly discerning recreational boating market.
Both Chaparral and Robalo have long expanded the range of their offerings through insightful, innovative product design and quality manufacturing processes in order to reach an increasingly discerning recreational boating market.
Additionally, Marine Products, with the combination of Robalo and Chaparral outboards, holds the third highest position in the outboard market of this size range, with a market share of 6.2%. 4 ​ Products Marine Products distinguishes itself by offering a wide range of products to the family recreational markets through its Chaparral brands and to the sport fishing market through its Robalo brands.
At the time of the acquisition, Robalo was a struggling brand, which Marine Products has since grown to a leading fishing boat manufacturer. ​ 6 ​ Products Marine Products distinguishes itself by offering a wide range of products to the family recreational markets through its Chaparral brands and to the sport fishing market through its Robalo brands.
Historically, dealers have in most cases taken delivery of all their orders. In a typical ordering, production and delivery cycle, the Company monitors dealer inventory levels in order to inform its production scheduling and to ensure that dealers do not hold excess inventory.
The Company does not typically maintain a significant inventory of finished boats. In a typical ordering, production and delivery cycle, the Company monitors dealer inventory levels in order to inform its production scheduling to keep manufacturing in line with end-market demand, and to ensure that dealers are carrying the appropriate levels of inventory.
Marketed with national fixed retail prices to experienced fishermen and families looking for both fishing and cruising features. ​ ​ ​ ​ ​ ​ ​ ​ 5 ​ Manufacturing Marine Products’ manufacturing facilities located in Nashville, Georgia are utilized to manufacture interiors, design new models, create fiberglass hulls and decks, and assemble various end products.
Marketed with national fixed retail prices to experienced fishermen and families looking for both fishing and cruising features. ​ ​ ​ ​ ​ ​ ​ ​ 7 ​ Manufacturing Marine Products’ manufacturing facilities are located in Nashville, Georgia, in what management believes is the largest single-site sport boat production plant in the U.S.
In the event of a sudden and extended interruption in the supply of engines from any of these suppliers, our sales and profitability could be negatively impacted. See Item 1A Risk Factors below. Marine Products uses other raw materials in its manufacturing processes. Among these are resins, made from hydrocarbon feedstocks, as well as copper and steel.
Outboard engines are purchased from Yamaha under a multi-year joint marketing agreement and from Mercury Marine under an annually negotiated purchase agreement. In the event of a sudden and extended interruption in the supply of engines from any of these suppliers, our sales and profitability could be negatively impacted. See Item 1A Risk Factors below. Customers & Distribution Dealer Network.
After curing, the hull and deck are removed from the molds and are trimmed and prepared for final assembly, which includes the installation of electrical and plumbing systems, engines, upholstery, accessories and graphics. Product Warranty For our Chaparral and Robalo products, Marine Products provides a lifetime limited structural hull warranty and a transferable one-year limited warranty to the original owner.
After curing, the hull and deck are removed from the molds and are trimmed and prepared for final assembly, which includes the installation of electrical and plumbing systems, engines, upholstery, accessories and graphics. When fully assembled and inspected, the boats are loaded onto either Company-owned trailers or third-party marine transport trailers for delivery to dealers.
Beginning in the second half of 2023, the Company adjusted its production levels and employee headcount in response to lower dealer and retail demand. The Company’s key human capital management objectives are focused on fostering talent in the following areas: Diversity and Equality - The Company’s workforce reflects the diversity of the community in which it operates.
The Company’s key human capital management objectives are focused on fostering talent in the following areas: Workplace Inclusion - The Company’s workforce reflects the diversity of the community in which it operates. Our dedicated team of employees work toward a common purpose.
The benefit of this innovation is more deck space, better planing performance and a more comfortable ride. Although the basic hull designs are similar, the Company has historically introduced a variety of new models each year and periodically replaces, updates or discontinues existing models. Another hull design is the Hydro Lift TM used on the Robalo boat models.
Although the basic hull designs are similar from year to year, the Company has historically introduced a variety of new models each year and periodically replaces, updates or discontinues existing models, as well as introduces new features, designs and color options (both exterior and interior/upholstery colors).
Industry Overview The recreational marine market in the United States is a mature market, with 2022 retail expenditures of approximately $59.3 billion spent on new and used boats, motors and engines, trailers, accessories and other associated costs as estimated by the National Marine Manufacturers Association (“NMMA”).
Industry Overview & Key Themes The recreational marine market in the United States is mature, with sales of new and used boats (consisting of outboard, inboard, sterndrive, jet drive, sailboats and personal watercraft) as well as motors and engines, trailers, accessories and other associated costs varying by year and typically correlated with economic cycles in the U.S.
Suppliers Marine Products’ three most significant cost components used in manufacturing its boats are engines, resins and fiberglass. For each of these, there is currently an adequate supply available in the market. While supply chains were constrained following the COVID-19 pandemic, by late 2022, many shortages and delays began to ease.
Suppliers Marine Products’ three most significant cost components used in manufacturing its boats are engines, resins and fiberglass. Each are currently adequately supplied and available in the market, however the costs of these components and commodities (including copper and steel) can fluctuate in response to changes in global economic conditions.
Additionally, Marine Products faces general competition from all other recreational businesses seeking to attract consumers’ leisure time and discretionary spending dollars. According to Statistical Surveys, Inc., the following is a list of the top ten (largest to smallest) outboard boat manufacturers in the United States based on retail unit sales in 2023.
We compete on the basis of responsiveness to customer needs, the quality and range of models offered, and the competitive pricing of those models. Additionally, Marine Products faces general competition from all other recreational businesses seeking to attract consumers’ leisure time and discretionary spending dollars.
The costs of these commodities fluctuate in response to changes in global economic conditions. Sales and Distribution Domestic sales are generated through our independent dealer network of approximately 64 Chaparral dealers, 49 Robalo dealers and 90 dealers that sell both brands located in markets throughout the United States. Marine Products also has 87 international dealers.
Domestic sales are generated through our independent dealer network of approximately 202 U.S. dealers, of which 64 are Chaparral dealers, 47 are Robalo dealers and 91 dealers sell both brands. Marine Products also has 88 international dealers. As a percentage of our total net sales, international sales represented 5.6% in 2024, 5.9% in 2023 and 6.7% in 2022.
However, we believe that our corporate infrastructure and marketing and sales capabilities, in addition to our financial strength, and our nationwide presence, enable us to compete effectively against these companies. In each of our markets, Marine Products competes on the basis of responsiveness to customer needs, the quality and range of models offered, and the competitive pricing of those models.
Such competitors include Brunswick Corporation, Sea Hunt Boats, Malibu Boats, Inc., Mastercraft Boat Holdings, Inc. and Regal Marine Industries, Inc. However, we believe that our corporate financial strength and infrastructure, 11 ​ combined with our design, production, and marketing capabilities and nationwide sales presence enable us to compete effectively against these companies.
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Chaparral was founded in 1965 in Ft. Lauderdale, Florida. Chaparral’s first boat was a 15-foot tri-hull design with a retail price of less than $1,000. Over time Chaparral grew by offering exceptional quality and consumer value. In 1976, Chaparral moved to Nashville, Georgia, where a manufacturing facility of a former boat manufacturing company was available for purchase.
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In 1976, Chaparral moved its operations to a Nashville, Georgia manufacturing site, which had been the previous location of another boat producer. This move provided the business an opportunity to expand manufacturing space and access to a trained workforce, and set the stage for decades of innovation, growth and industry leadership. In 1986, RPC acquired Chaparral.
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The Company manufactures Chaparral sterndrive pleasure boats including SSi and SSX models, and the Chaparral Surf Series. The Company also manufactures Chaparral outboard pleasure boats which include OSX Luxury Sportboats and SSi outboard models.
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Robalo was founded in 1969 and was acquired by Marine Products in 2001, in conjunction with the spin-off from RPC as referenced above.
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Marine Products’ Chaparral brand was the second largest manufacturer of sterndrive boats in lengths from 21 to 34 feet during the 12-month period ended September 30, 2023 and its share of the market during this period was approximately 26.9%. In addition to the outboard models manufactured by Chaparral, the Company also manufactures Robalo outboard sport fishing boats.
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At this location, we design and test new models, create fiberglass hulls and decks, manufacture interiors, and assemble various end products. Quality control is conducted throughout the manufacturing process, which begins with the design of a product to meet dealer and customer needs.
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Robalo was founded in 1969 and its first boat was a 19-foot center console salt-water fishing boat, among the first of this type of boat to have an “unsinkable” hull. The models manufactured under the Robalo name include center consoles, dual consoles and Cayman Bay Boats.
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Of note, boat manufacturing is labor-intensive and remains largely unautomated. Most components, both large and small, are best suited for manual production and assembly processes.
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The most recent available industry statistics [source: Statistical Surveys, Inc. report dated September 30, 2023] indicate that Robalo is the third largest manufacturer of outboard boats in lengths from 18 to 36 feet in the United States with a market share of 4.5%.
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Unlike large-scale automotive production, the lack of mass volume production, the customization required for each boat, and the high standard of craftsmanship to support our brands’ reputation lend themselves to a manual process with a highly skilled workforce.
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Quality control is conducted throughout the manufacturing process. When fully assembled and inspected, the boats are loaded onto either Company-owned trailers or third-party marine transport trailers for delivery to dealers. The manufacturing process begins with the design of a product to meet dealer and customer needs. Plugs are constructed in the research and development phase from designs.
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The Company prides itself on the experience and quality of our production staff and believe low plant turnover is a key differentiator for Marine Products in the marketplace. Product Warranty For our Chaparral and Robalo products, Marine Products provides a lifetime limited structural hull warranty and a transferable one-year limited warranty to the original owner.
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Chaparral also includes a five-year limited structural deck warranty. Warranties for additional items are provided for periods of one to five years and are not transferable. Additionally, as it relates to the first subsequent owner, a five-year transferable hull warranty and the remainder of the original one-year limited warranty on certain components are available.
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Of note, no single dealer nor any group of dealers owned by the same parent company accounted for 10% or more of net sales during 2024, 2023 or 2022. Most of our dealers also sell boat brands manufactured by other companies, including some that compete directly with our brands.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThese risks could harm our reputation and our relationships with customers, suppliers, employees and other third parties, and may result in claims against us. These risks could have a material adverse effect on our business, consolidated results of operations and consolidated financial condition. ​ General Risks Marine Products’ Stock Price Has Been Volatile.
Biggest changeThese risks could have a material adverse effect on our business, consolidated results of operations and consolidated financial condition. ​ General Risks Marine Products’ Stock Price Has Been Volatile. Historically, the market price of common stock of companies engaged in the discretionary consumer products industry has been highly volatile.
Increased focus on ESG and related decision-making may negatively impact us as customers, investors and other stakeholders may choose to not work with us or reallocate capital or decline to make an investment as a result of their assessment of our ESG practices.
Increased focus on ESG and related decision-making may negatively impact us as customers, investors and other stakeholders may choose not to work with us or reallocate capital or decline to make an investment as a result of their assessment of our ESG practices.
The Company has elected the “Controlled Corporation” exemption under Section 303A of the New York Stock Exchange (“NYSE”) Listed Company Manual. The Company is a “Controlled Corporation” because a group that includes Gary W. Rollins, Pamela R. Rollins, Amy Rollins Kreisler and Timothy C.
The Company has elected the “Controlled Corporation” exemption under Section 303A of the New York Stock Exchange (“NYSE”) Listed Company Manual. The Company is a “Controlled Corporation” because a group that includes Gary W. Rollins, Pamela R. Rollins, Amy R. Kreisler and Timothy C.
While such licensing requirements are not expected to be unduly restrictive, regulations may discourage potential first-time buyers, thereby reducing future sales. 16 ​ Risks Related to our Labor Force Marine Products’ Success Will Depend on its Key Personnel, and the Loss of any Key Personnel may Affect its Powerboat Sales.
While such licensing requirements are not expected to be unduly restrictive, regulations may discourage potential first-time buyers, thereby reducing future sales. Risks Related to our Labor Force Marine Products’ Success Will Depend on its Key Personnel, and the Loss of any Key Personnel may Affect its Powerboat Sales.
The failure to satisfy these and other regulatory requirements could cause Marine Products to incur fines or penalties or could increase the cost of operations. The adoption of additional laws, rules and regulations could also increase Marine Products’ costs. The U.S. Environmental Protection Agency (EPA) has adopted regulations affecting many marine propulsion engines.
The failure to satisfy these and other regulatory requirements could cause Marine Products to incur fines or penalties or could increase the cost of operations. The adoption of additional laws, rules and regulations could also increase Marine Products’ costs. 17 ​ The U.S. Environmental Protection Agency (EPA) has adopted regulations affecting many marine propulsion engines.
In addition, the availability of Marine Products common stock to the investing public is limited to the extent that shares are not sold by the executive officers, directors and their affiliates, which could negatively impact the trading price of Marine Products’ common stock, increase volatility and affect the ability of minority stockholders to sell their shares.
In addition, the availability of 19 ​ Marine Products common stock to the investing public is limited to the extent that shares are not sold by the executive officers, directors and their affiliates, which could negatively impact the trading price of Marine Products’ common stock, increase volatility and affect the ability of minority stockholders to sell their shares.
Catastrophic weather, civil unrest, natural disasters or other unanticipated events beyond our control may disrupt both our and our suppliers’ ability to conduct manufacturing operations or transport our finished boats to our dealer network. We do not own or have access to alternate manufacturing locations.
Catastrophic weather, civil unrest, fires, natural disasters or other unanticipated events beyond our control may disrupt both our and our suppliers’ ability to conduct manufacturing operations or transport our finished boats to our dealer network. We do not own or have access to alternate manufacturing locations.
Future sales by executive officers, directors and their affiliates of all or a portion of their shares could also negatively affect the trading price of our common stock. The Controlling Group Could Take Actions That Could Negatively Impact Our Results of Operations, Financial Condition or Stock Price.
Future sales by executive officers, directors and their affiliates of all or a portion of their shares could also negatively affect the trading price of our common stock. 18 ​ The Controlling Group Could Take Actions That Could Negatively Impact Our Results of Operations, Financial Condition or Stock Price.
The Company’s results can be negatively affected if a dealer defaults because Marine Products or its subsidiaries may be contractually required to repurchase inventory up to certain limits, although for business reasons, the Company may decide to purchase additional boats in excess of this contractual obligation. 14 ​ Marine Products’ Sales are Affected by Weather Conditions, Which May Involve Long-term Impact from Global Warming.
The Company’s results can be negatively affected if a dealer defaults because Marine Products or its subsidiaries may be contractually required to repurchase inventory up to certain limits, although for business reasons, the Company may decide to purchase additional boats in excess of this contractual obligation. 15 ​ Marine Products’ Sales are Affected by Weather Conditions, Which May Involve Long-Term Impact from Global Warming.
While dealer floor plan credit is currently available for many of our dealers during the 2024 model year, the Company’s sales and profitability could be adversely affected in the event of a decline in floor plan financing availability, or if financing terms change unfavorably. Interest Rates and Fuel Prices Affect Marine Products’ Sales.
While dealer floor plan credit is currently available for many of our dealers during the 2025 model year, the Company’s sales and profitability could be adversely affected in the event of a decline in floor plan financing availability, or if financing terms change unfavorably. Interest Rates and Fuel Prices Affect Marine Products’ Sales.
We use these technologies and services for internal purposes, including data storage, processing and transmissions, as well as in our interactions with customers and suppliers. Digital technologies are subject to the risk of cyber-attacks, both from internal and external threats.
We use these technologies and services for internal purposes, including data storage, processing and transmissions, and manufacturing robotics, as well as in our interactions with customers and suppliers. Digital technologies are subject to the risk of cyber-attacks, both from internal and external threats.
Once integrated, acquired operations may not achieve anticipated levels of sales or 15 ​ profitability, or otherwise perform as expected.
Once integrated, acquired operations may not achieve anticipated levels of sales or 16 ​ profitability, or otherwise perform as expected.
Marine Products’ executive officers, directors and their affiliates hold directly or through indirect beneficial ownership, in the aggregate, approximately 71% of Marine Products’ outstanding shares of common stock. As a result, these stockholders effectively control the operations of Marine Products, including the election of directors and approval of significant corporate transactions such as acquisitions.
Marine Products’ executive officers, directors and their affiliates hold directly or through indirect beneficial ownership, in the aggregate, approximately 70% of Marine Products’ outstanding shares of common stock as of February 14, 2024. As a result, these stockholders effectively control the operations of Marine Products, including the election of directors and approval of significant corporate transactions such as acquisitions.
Marine Products maintains product liability insurance that it believes to be adequate. However, there can be no assurance that Marine Products will not experience legal claims in excess of its insurance coverage or that claims will be covered by insurance. Furthermore, any significant claims against Marine Products could result in negative publicity, which could cause Marine Products’ sales to decline.
However, there can be no assurance that Marine Products will not experience legal claims in excess of its insurance coverage or that claims will be covered by insurance. Furthermore, any significant claims against Marine Products could result in negative publicity, which could cause Marine Products’ sales to decline.
Future sales by executive officers, directors and their affiliates of all or a substantial portion of their shares could also negatively affect the trading price of Marine Products’ common stock.
Future sales by executive officers, directors and their affiliates of all or a substantial portion of their shares could also negatively affect the trading price of Marine Products’ common stock. ​ Item 1B. Unresolved Staff Comments None. ​
In the event the Controlling Group were to engage in any of these actions, our common stock price could be negatively impacted, such actions could cause volatility in the market for our common stock or could have a material adverse effect on our results of operations and our financial condition. 17 ​ Provisions in Marine Products’ Certificate of Incorporation and Bylaws may Inhibit a Takeover of Marine Products.
In the event the Controlling Group were to engage in any of these actions, our common stock price could be negatively impacted, such actions could cause volatility in the market for our common stock or could have a material adverse effect on our results of operations and our financial condition.
Risk Management Risks Marine Products Has Potential Liability for Personal Injury and Property Damage Claims. The products or services we sell may expose Marine Products to potential liabilities for personal injury or property damage claims relating to the use of those products. Historically, the resolution of product liability claims has not materially affected Marine Products’ business.
The products or services we sell may expose Marine Products to potential liabilities for personal injury or property damage claims relating to the use of those products. Historically, the resolution of product liability claims has not materially affected Marine Products’ business. Marine Products maintains product liability insurance that it believes to be adequate.
Marine Products’ manufacturing operations are conducted in a single location in Nashville, Georgia. To support our operations, several of our suppliers have also established facilities close to our manufacturing facility to provide timely delivery of fabricated components.
Marine Products’ Single Operational Location Creates Risk for its Sales, Profits and the Value of its Assets. Marine Products’ manufacturing operations are conducted in a single location in Nashville, Georgia. To support our operations, several of our suppliers have also established facilities close to our manufacturing facility to provide timely delivery of fabricated components.
In addition, unseasonably cool weather and prolonged winter conditions may lead to a shorter selling season in some locations. Hurricanes and other storms could cause disruptions of our operations or damage to our boat inventories and manufacturing facilities. Marine Products’ Single Operational Location Creates Risk for its Sales, Profits and the Value of its Assets.
In addition, unseasonably cool weather and prolonged winter conditions may lead to a shorter selling season in some locations. Hurricanes and other storms could cause disruptions to our operations or damage to our boat inventories and manufacturing facilities. Global warming may continue to worsen the impact of extreme weather conditions.
Historically, the market price of common stock of companies engaged in the discretionary consumer products industry has been highly volatile. Likewise, the market price of our common stock has varied significantly in the past.
Likewise, the market price of our common stock has varied significantly in the past.
Marine Products’ certificate of incorporation, bylaws and other documents contain provisions including advance notice requirements for stockholder proposals and director nominations, and staggered terms of office for the Board of Directors. These provisions may make a tender offer, change in control or takeover attempt that is opposed by Marine Products’ Board of Directors more difficult or expensive.
These provisions may make a tender offer, change in control or takeover attempt that is opposed by Marine Products’ Board of Directors more difficult or expensive.
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We currently have an effective Form S-3 registration statement on file with the Securities and Exchange Commission that would allow the sale of significant blocks of our common stock by us and certain of our largest shareholders. ​
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Marine Products purchases materials and components for boat production, as well as conducts business internationally; these aspects of our business could be affected by tariffs. ​ Boat production entails the purchase of fiberglass and other raw materials, as well as electrical components, small parts, and aluminum trailers to transport boats.
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These purchases are often made from international suppliers, from distributors who procure these items overseas, or from domestic manufacturers who rely on imported raw materials to manufacture their products.
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Potential implementation of tariffs on US trade partners could cause the prices of the items and materials to increase, which could result in us raising prices to our customers, and those efforts may or may not be successful.
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Marine Products also sells boats to dealers in other countries, including Canada, and a tariff-related trade war with retaliatory tariffs could make our products more expensive in those markets or cause delays in ordering our products. Risk Management Risks Marine Products Has Potential Liability for Personal Injury and Property Damage Claims.
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Provisions in Marine Products’ Certificate of Incorporation and Bylaws may Inhibit a Takeover of Marine Products.
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Marine Products’ certificate of incorporation, bylaws and other documents contain provisions including advance notice requirements for stockholder proposals and director nominations, and staggered terms of office for the Board of Directors, unless the shareholders approve the proposed Charter amendment to declassify the Board at the upcoming shareholders meeting.
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These risks could harm our reputation and our relationships with customers, suppliers, employees and other third parties, and may result in claims against us.
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In addition, we may not have adequate insurance coverage to compensate for losses from any of the risks listed herein, our existing insurance coverage may not continue to be available on acceptable terms or at all, and our insurers may deny coverage as to any future claims.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeWhile the Company is currently self-insured for cybersecurity risks, we are evaluating a cyber liability insurance policy that may provide coverage for expenses, business losses, business interruption, and fines and penalties associated with a data breach or other similar incident. The Company has a periodic touchpoint with all third-party information technology service providers to identify materials risks from cybersecurity threats.
Biggest changeThe Company has a periodic touchpoint with all third-party information technology service providers to identify materials risks from cybersecurity threats. The Company maintains a cyber liability insurance policy that is designed to cover certain expenses, business losses, business interruption, and fines and penalties associated with data breach or other similar incidents.
To help guide its overall program, the Company uses the Center for Internet Security (CIS) Controls framework to provide best practices for securing IT systems and data. We have implemented a majority of version 8.0 of the CIS Controls which supports a Zero Trust architecture. The Company has several security policies that are published and accessible to all employees.
To help guide its overall program, the Company uses the Center for Internet Security (“CIS”) Controls framework to provide best practices for securing IT systems and data. We have implemented a majority of version 8.0 of the CIS Controls which supports a Zero Trust architecture. The Company has several security policies that are published and accessible to all employees.
Item 1C. Cybersecurity Risk Management and Strategy 18 ​ Marine Products approaches cybersecurity as an enterprise-wide risk and has created a Cybersecurity Risk and Compliance Program that outlines governance programs in place and outlines efforts undertaken to mitigate cyber risks. We have implemented policies and processes designed to detect, prevent, and respond to cybersecurity incidents.
Item 1C. Cybersecurity Risk Management and Strategy Marine Products approaches cybersecurity as an enterprise-wide risk and has created a Cybersecurity Risk and Compliance Program that outlines governance programs in place and outlines efforts undertaken to mitigate cyber risks. We have implemented policies and processes designed to detect, prevent, and respond to cybersecurity incidents.
All these policies are reviewed annually and updated as needed to address emerging risks or gaps in compliance. Marine Products has not experienced a material cybersecurity incident to date. If a material cybersecurity breach occurs, the incident will be reviewed to determine whether further escalation is appropriate.
All these policies are reviewed annually and updated as needed to address emerging risks or gaps in compliance. Marine Products has not experienced a material cybersecurity incident to date. If a material cybersecurity breach occurs, the incident will be reviewed to determine if further escalation is appropriate.
The Company periodically engages a third-party service provider to perform an external vulnerability scan of the Company network to identify known threats and to date no critical vulnerabilities have been identified during these assessments. ​ 19 ​
The Company periodically engages a third-party service provider to perform an external vulnerability scan of the Company network to identify known threats and to date no critical vulnerabilities have been identified during these assessments. ​
In addition, the Audit Committee receives reports summarizing threat detection and mitigation plans, audits of internal controls, training and certification, and other cyber priorities and initiatives, as well as timely updates from senior leaders on material incidents relating to information systems security, including cybersecurity incidents. The Audit Committee includes members with experience in risk management including cybersecurity.
In addition, the Audit Committee receives reports summarizing threat detection and mitigation plans, audits of internal controls, training and certification, and other cyber priorities and initiatives, as well as timely updates from senior leaders on material incidents relating to information systems security, including cybersecurity incidents.
The Information Technology department is comprised of professionals with extensive expertise and led by its manager with over 20 years of experience in various aspects including cybersecurity. The manager is continuously monitoring trends and stays current with the various cybersecurity threats and related mitigation opportunities.
The Information Technology department is comprised of professionals with extensive expertise and led by its manager with over 20 years of experience in network security, cybersecurity and enterprise risk management. The manager is continuously monitoring trends and stays current with the various cybersecurity threats and related mitigation opportunities.
Role of Management Company management has established a Cybersecurity Governance Committee that is comprised of the Information Technology Manager and senior members of management. The Committee meets periodically to discuss cybersecurity program updates and challenges, watch for potential threats from both external and internal sources, monitor compliance in existing or emerging business practices, and respond to stakeholder inquiries.
The Committee meets periodically to discuss cybersecurity program updates and challenges, watch for potential threats from both external and internal sources, monitor compliance in existing or emerging business practices, and respond to stakeholder inquiries.
Any incident assessed as potentially being or becoming material will immediately be escalated for further assessment and reported to designated members of our executive leadership team and if deemed necessary, the Board of Directors.
Any incident assessed as potentially being or becoming material will immediately be escalated for further assessment and reported to designated members of our executive leadership team and if deemed necessary, the Board of Directors, outside legal counsel and our independent registered public accounting firm, as appropriate, including on materiality analyses and disclosure matters, to make the final materiality determination regarding disclosure and other compliance decisions.
For more information on our cybersecurity related risks see Item 1A Risk Factors of this Annual Report on Form 10-K.
For more information on our cybersecurity related risks see Item 1A Risk Factors of this Annual Report on Form 10-K. Governance Role of the Board On an annual basis, the Board reviews and approves the overall enterprise risk management approach and processes implemented by management to identify, assess, manage, and mitigate risk.
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We plan to consult with outside counsel as appropriate, including on materiality analysis and disclosure matters, and make the final materiality determination regarding disclosure and other compliance decisions. We also plan to keep our independent public accounting firm informed of such incidents as appropriate.
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Cyber liability insurance also provides coverage in the event of a ransomware attack. Our cyber risk coverage includes assistance in the timely remediation of material cyberattacks and incidents.
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Governance Role of the Board The Board is responsible for overseeing overall risk management for the Company, including review and approval of the enterprise risk management approach and processes implemented by management to identify, assess, manage, and mitigate risk, at least annually.
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The Audit Committee includes members with experience in risk management including cybersecurity. 20 ​ Role of Management Company management has established a Cybersecurity Governance Committee that is comprised of the Information Technology Manager and senior members of management.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. Properties Marine Products’ corporate offices are in Atlanta, Georgia. These offices are currently shared with RPC and are leased. The monthly rent paid is allocated between Marine Products and RPC. Under this arrangement, Marine Products pays approximately $4,300 per month in rent. Marine Products may cancel this arrangement at any time after giving a 30-day notice.
Biggest changeItem 2. Properties Marine Products’ corporate offices are in Atlanta, Georgia. These offices are currently shared with RPC and are leased. The monthly rent paid is allocated between Marine Products and RPC. Under this arrangement, Marine Products pays approximately $4,500 per month in rent. Marine Products may cancel this arrangement at any time after giving a 30-day notice.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. Legal Proceedings Marine Products is involved in litigation from time to time in the ordinary course of its business. Marine Products does not believe that the ultimate outcome of such litigation will have a material adverse effect on its liquidity, financial condition or results of operations. ​
Biggest changeItem 3. Legal Proceedings Marine Products is involved in litigation from time to time in the ordinary course of its business. Marine Products does not believe that the ultimate outcome of such litigation will have a material adverse effect on its liquidity, financial condition or results of operations. ​ Item 4. Mine Safety Disclosures Not applicable. ​ PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe companies in the Peer Group are Brunswick Corporation, MarineMax, Inc., Malibu Boats, Inc. and Mastercraft Boat Holdings, Inc. 20 ​ The Russell 2000 is used because the Company is a component of the Russell 2000, and because the Russell 2000 is a stock index representing small capitalization U.S. stocks.
Biggest changeThe companies in the Peer Group are Brunswick Corporation, MarineMax, Inc., Malibu Boats, Inc. and Mastercraft Boat Holdings, Inc. The Company was a component of the Russell 2000 during 2024. The Russell 2000 is a stock index measuring the performance of the small-cap segment of the US equity universe.
The indices included in the following graph are the Russell 2000 Index (“Russell 2000”) and a peer group which includes companies that are considered peers of the Company (“Peer Group”). The companies included in the Peer Group have been weighted according to each respective issuer’s stock market capitalization at the end of each year.
The indices included in the following graph are the Russell 2000 Index (“Russell 2000”) and a peer group which includes companies that are considered peers of the Company (“Peer Group”). The companies included in the Peer Group have been weighted 21 ​ according to each respective issuer’s stock market capitalization at the end of each year.
Issuer Purchases of Equity Securities The Company has a stock buyback program initially adopted in 2001 and subsequently amended in 2013 and 2019 that authorized the repurchase of 8,250,000 shares, in the aggregate, in the open market. The Company did not repurchase any shares under this program in 2023 and 2022.
Issuer Purchases of Equity Securities The Company has a stock buyback program initially adopted in 2001 and subsequently amended in 2013 and 2019 that authorized the repurchase of 8,250,000 shares, in the aggregate, in the open market. The Company did not repurchase any shares under this program in 2024 and 2023.
There are 1,570,428 shares that remain available for repurchase as of December 31, 2023. The program does not have a predetermined expiration date.
There are 1,570,428 shares that remain available for repurchase as of December 31, 2024. The program does not have a predetermined expiration date.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Marine Products’ common stock is listed for trading on the New York Stock Exchange under the symbol “MPX.” As of February 20, 2024, there were 34,682,949 shares of common stock outstanding and approximately 6,400 beneficial holders of our Company’s common stock.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Marine Products’ common stock is listed for trading on the New York Stock Exchange under the symbol “MPX.” As of February 14, 2025, there were 34,961,460 shares of common stock outstanding and approximately 7,800 beneficial holders of our Company’s common stock.
The graph below assumes the value of $100.00 invested on December 31, 2018. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, Company/Index ​ 2018 ​ 2019 ​ 2020 ​ 2021 ​ 2022 ​ 2023 ​ ​ Base Period ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Marine Products Corporation Common Stock ​ 100 ​ 88 ​ 92 ​ 81 ​ 80 ​ 77 Peer Group ​ 100 ​ 126 ​ 161 ​ 228 ​ 162 ​ 205 Russell 2000 Index ​ 100 ​ 123 ​ 146 ​ 166 ​ 131 ​ 147 ​ ​
The graph below assumes the value of $100.00 invested on December 31, 2019. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, Company/Index ​ 2019 ​ 2020 ​ 2021 ​ 2022 ​ 2023 ​ 2024 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Marine Products Corporation Common Stock ​ 100 ​ 104 ​ 92 ​ 91 ​ 92 ​ 83 Peer Group ​ 100 ​ 138 ​ 183 ​ 132 ​ 168 ​ 117 Russell 2000 Index ​ 100 ​ 120 ​ 138 ​ 110 ​ 128 ​ 143 ​ ​ Item 6.
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The components of the index had a weighted average market capitalization in 2024 of $3.6 billion, and a median market capitalization of $987 million. The Russell 2000 is used because the Company is a component of the Russell 2000, and because the Russell 2000 is a stock index representing small capitalization U.S. stocks.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeThe net favorable change in other components of our working capital was primarily a result of a decrease in accounts receivable of $2.9 million consistent with a decrease in sales during the fourth quarter of 2023, partially offset by a net decrease in accounts payable and accrued expenses consistent with the decline in production levels during the fourth quarter of 2023 compared to the same period in the period year.
Biggest changeWorking capital was a source of cash in 2024 due primarily to a net favorable change of $11.7 million in inventory, partially offset by a net unfavorable change in other components of working capital. The net favorable change in inventory during 2024 was due primarily to the decrease in production during 2024 in comparison to the prior year.
The Company believes that of its significant accounting policies and estimates, the following may involve a higher degree of judgment and complexity. 25 ​ Sales incentives and discounts The Company sells its boats through its network of independent dealers and recognizes revenues from contracts with its customers based on the consideration received in exchange for the goods sold.
The Company believes that of its significant accounting policies and estimates, the following may involve a higher degree of judgment and complexity. Sales incentives and discounts The Company sells its boats through its network of independent dealers and recognizes revenues from contracts with its customers based on the consideration received in exchange for the goods sold.
Impact of Recent Accounting Pronouncements: See note titled Significant Accounting Policies in the Notes of the Consolidated Financial Statements for a description of recent accounting pronouncements, including the expected dates of adoption and expected effects on results of operations and financial condition, if known.
Impact of Recent Accounting Pronouncements: See the note titled Significant Accounting Policies in the Notes to the Consolidated Financial Statements for a description of recent accounting pronouncements, including the expected dates of adoption and expected effects on results of operations and financial condition, if known.
Subject to industry conditions and Marine Products’ earnings, financial condition, and other relevant factors, the Company expects to continue to pay regular quarterly cash dividends to common stockholders.
Subject to industry conditions and Marine 26 ​ Products’ earnings, financial condition, and other relevant factors, the Company expects to continue to pay regular quarterly cash dividends to common stockholders.
The agreements provide for the return of repossessed boats to the Company in new and unused condition, subject to normal wear and tear, in exchange for the Company’s assumption of the debt obligation on those boats, as contractually defined by each lender. The Company had no material repurchases of dealer inventory under contractual agreements during 2023 and 2022.
The agreements provide for the return of repossessed boats to the Company in new and unused condition, subject to normal wear and tear, in exchange for the Company’s assumption of the debt obligation on those boats, as contractually defined by each lender. The Company had no material repurchases of dealer inventory under contractual agreements during 2024 and 2023.
The revolving credit facility includes a full and unconditional guarantee by the Company and its consolidated domestic subsidiaries and is subject to certain financial and other customary covenants. As of December 31, 2023, the Company had no outstanding borrowings under the revolving credit agreement.
The revolving credit facility includes a full and unconditional guarantee by the Company and its consolidated domestic subsidiaries and is subject to certain financial and other customary covenants. As of December 31, 2024, the Company had no outstanding borrowings under the revolving credit agreement.
As of December 31, 2023, the Company believes the fair value of its guarantee liability is immaterial. See further information regarding repurchase obligations in note titled Commitments and Contingencies in the Notes of the Consolidated Financial Statements.
As of December 31, 2024, the Company believes the fair value of its guarantee liability is immaterial. See further information regarding repurchase obligations in the note titled Commitments and Contingencies in the Notes of the Consolidated Financial Statements.
Critical Accounting Policies and Estimates The consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America, which require significant judgment by management in selecting the appropriate assumptions for calculating accounting estimates.
Critical Accounting Estimates The consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America, which require significant judgment by management in selecting the appropriate assumptions for calculating accounting estimates.
Effective October 1, 2023, the Company began recording short-term cash incentive compensation expense to selected employees in an annual amount equal to nine percent of pre-tax profit (PTP incentive), defined as pretax income before goodwill adjustments and certain allocated corporate expenses.
Effective October 1, 2023, the Company began recording short-term cash incentive compensation expense to certain non-executive employees in an annual amount equal to nine percent of pre-tax profit (PTP incentive), defined as pretax income before goodwill adjustments and certain allocated corporate expenses.
Warranty expense as a percentage of net sales was 1.5% in 2023, 1.5% in 2022 and 1.2% in 2021. A 0.10 percentage point increase in the estimated warranty expense as a percentage of net sales during 2023 would have increased selling, general and administrative expenses and reduced operating income by approximately $0.4 million.
Warranty expense as a percentage of net sales was 1.5% in 2024, 1.5% in 2023 and 1.5% in 2022. A 0.10 percentage point increase in the estimated warranty expense as a percentage of net sales during 2024 would have increased selling, general and administrative expenses and reduced operating income by approximately $0.2 million.
The Company currently has an agreement with one of the floor plan lenders whereby the contractual repurchase limit is based on the highest of the following criteria: (i) a specified percentage of the amount of the average net receivables financed by the floor plan lender for our dealers, (ii) the total average net receivables financed by the floor plan lender for our two highest dealers during the prior three month period, or (iii) $8.0 million, less repurchases during the prior 12 month period.
The Company currently has an agreement with one of the floor plan lenders whereby the contractual repurchase limit is based on the highest of the following criteria: (i) a specified percentage of the amount of the average net receivables financed by the floor plan lender for our dealers, (ii) the total average net receivables financed by the floor plan lender for our two highest dealers for the three highest monthly receivables balances during the past twelve months, or (iii) $8.0 million, less repurchases during the prior 12 month period.
Related Party Transactions See note titled Related Party Transactions in the Notes of the Consolidated Financial Statements for a description of related party transactions.
Related Party Transactions See the note titled Related Party Transactions in the Notes to the Consolidated Financial Statements for a description of certain related party transactions.
A 0.25 percentage point change in cost of incentives as a percentage of gross sales during 2023 would have increased or decreased net sales, gross margin and operating income by approximately $0.9 million.
A 0.25 percentage point change in cost of incentives as a percentage of gross sales during 2024 would have increased or decreased net sales, gross margin and operating income by approximately $0.5 million.
Our financial results during 2024 will depend on a number of factors, including economic trends, demand for discretionary products, the impact of interest rates on consumer financing options and dealer inventory carrying costs, the effectiveness of the Company’s incentive programs, the success of new model launches, and the Company’s ability to manage manufacturing costs in light of lower production levels compared to early 2023.
Our financial results during 2025 will depend on a number of factors, including economic trends, demand for discretionary products, the impact of interest rates on consumer financing options and dealer inventory carrying costs, the effectiveness of the Company’s incentive programs, the success of new model launches, and the Company’s ability to manage manufacturing costs in light of reduced production levels.
Accordingly, the aggregate repurchase obligation with all financing institutions was approximately $26.6 million as of December 31, 2023. Although the Company has these agreements with financial institutions, in certain situations, the Company may decide for business reasons to repurchase boats in excess of these contractual amounts.
Accordingly, the aggregate repurchase obligation with all financing institutions was approximately $25.0 million as of December 31, 2024. Although the Company has these agreements with financial institutions, in certain situations, the Company may decide for business reasons to repurchase boats in excess of these contractual amounts.
For additional information with 24 ​ respect to MPC’s contractual obligations , see notes titled Notes Payable to Banks and Leases in the Notes of the Consolidated Financial Statements .
For additional information with respect to MPC’s contractual obligations , see notes titled Notes Payable to Banks, Commitments and Contingencies, and Leases in the Notes to the Consolidated Financial Statements .
As defined by the agreement, the repurchase limit for this lender was $18.9 million as of December 31, 2023. The Company has contractual repurchase agreements with additional lenders with an aggregate maximum repurchase obligation of $7.7 million, with various expiration and cancellation terms of less than one year.
As defined by the agreement, the repurchase limit for this lender was $19.6 million as of December 31, 2024. The Company has contractual repurchase agreements with additional lenders with an aggregate maximum repurchase obligation of $5.4 million, with various expiration and cancellation terms of less than one year.
The Company regularly analyzes the historical incentive trends and adjusts recorded liabilities for changes in trends and terms of incentive programs. Total cost of incentives recorded in net sales as a percentage of gross sales was 7.3% in 2023, 5.6% in 2022, and 5.8% in 2021.
Settlement of the incentives generally occurs from three to twelve months after the sale. The Company regularly analyzes the historical incentive trends and adjusts recorded liabilities for changes in trends and terms of incentive programs. Total cost of incentives recorded in net sales as a percentage of gross sales was 9.2% in 2024, 7.3% in 2023, and 5.6% in 2022.
Marine Products generated interest income primarily from investments of excess cash in money market funds. Additionally, interest expense is recorded for the revolving credit facility, primarily related to fees on the unused portion of the facility. Income Tax Provision. The income tax provision decreased to $10.4 million in 2023 compared to $11.8 million in 2022.
Interest Income, net. Interest income, net was unchanged at $2.9 million in both 2024 and 2023. Marine Products generated interest income from investments of excess cash in money market funds. Additionally, interest expense is recorded for the revolving credit facility, primarily related to fees on the unused portion of the facility. 24 ​ Income Tax Provision.
The Company believes that the liquidity provided by existing cash, cash equivalents, its overall strong capitalization, cash generated by operations and the Company’s ability to sell up to approximately $150 million in shares of its common stock under the Company’s shelf registration statement will be sufficient to meet the Company’s requirements for at least the next twelve months.
The Company believes that the liquidity provided by existing cash, cash equivalents, its overall strong capitalization and cash generated by operations will be sufficient to meet the Company’s requirements for at least the next twelve months.
The following table sets forth the historical cash flows for the twelve months ended December 31: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, (in thousands) 2023 2022 2021 Net cash provided by operating activities ​ $ 56,846 ​ $ 49,348 ​ $ 457 Net cash used for investing activities ​ (7,871) ​ (2,500) ​ (1,248) Net cash used for financing activities ​ (20,194) ​ (17,779) ​ (16,680) ​ Cash provided by operating activities in 2023 increased $7.5 million compared to 2022.
The following table sets forth the historical cash flows for the twelve months ended December 31: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, (in thousands) 2024 2023 2022 Net cash provided by operating activities ​ $ 29,526 ​ $ 56,846 ​ $ 49,348 Net cash used for investing activities ​ (4,433) ​ (7,871) ​ (2,500) Net cash used for financing activities ​ (44,666) ​ (20,194) ​ (17,779) ​ Cash provided by operating activities in 2024 decreased by $27.3 million compared to 2023, primarily due to the decrease in net income.
These arrangements are subject to maximum repurchase amounts and the associated risk is mitigated by the value of the boats repurchased. The Company had no material repurchases of dealer inventory in 2023 and 2022. See further information regarding repurchase obligations in note titled Commitments and Contingencies in the Notes of the Consolidated Financial Statements.
These arrangements are subject to maximum repurchase amounts and the associated risk is mitigated by the value of the boats repurchased. The Company had no material repurchases of dealer inventory in 2024 and 2023.
Cash Requirements Management expects that capital expenditures during 2024 will be approximately $5.0 million. The Company participated in a multiple employer Retirement Income Plan (“Plan” ), sponsored by RPC. During 2023, the Plan was fully terminated through a liquidation of the assets held in a trust.
The Company participated in a multiple employer Retirement Income Plan (“Plan”), sponsored by RPC. During 2023, the Plan was fully terminated through a liquidation of the assets held in a trust.
Outlook We believe that the strong retail demand for new recreational boats which began in 2020 with the onset of the COVID-19 pandemic has subsided and has now normalized. In addition, consumers are returning to pre-pandemic routine lifestyles and rising interest rates are contributing to higher costs of boat ownership.
Outlook We believe that the strong retail demand for new recreational boats which began in 2020 with the onset of the COVID-19 pandemic has subsided and has now normalized. Higher selling prices for boats following rapid inflation and rising interest rates have also both contributed to higher costs of boat ownership, further curbing consumer demand.
Discussions of 2022 items and year-to-year comparisons of 2022 and 2021 that are not included in this Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2022, which Item is incorporated herein by reference.
Discussions of 2023 items and year-to-year comparisons of 2023 and 2022 that are not included in this Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2023, which Item is incorporated herein by reference. 22 ​ Overview Consolidated net sales decreased 38.4% to $236.6 million in 2024 due primarily to a 40% decrease in unit sales to dealers partially offset by a positive price/mix of 2%.
The factors that complicate estimating the cost of incentives are the ability to estimate incentive payments of the Company, the volume and timing of inventory financed by specific dealers, and the notification of boats sold subject to certain incentives. Settlement of the incentives generally occurs from three to twelve months after the sale.
In addition, the Company offers at various times other time-specific or model-specific incentives. 28 ​ The factors that complicate estimating the cost of incentives are the ability to estimate incentive payments of the Company, the volume and timing of inventory financed by specific dealers, and the notification of boats sold subject to certain incentives.
These incentives are designed to encourage timely replenishment of dealer inventories after peak selling seasons, stabilize manufacturing volumes throughout the year, and improve production model mix. The dealer incentive programs are a combination of annual volume commitment discounts, and additional discounts at time of invoice for those dealers who do not finance their inventory through specified floor plan financing agreements.
The dealer incentive programs are a combination of annual volume commitment discounts, and additional discounts at the time of invoice for those dealers who do not finance their inventory through specified floor plan financing agreements. The annual dealer volume discounts are primarily based on July 1 through June 30 model year purchases.
Management expects this reduction to continue to favorably impact operating cash flow in future periods. The Company has a stock buyback program initially adopted in 2001 and subsequently amended in 2013 and 2019 that authorizes the aggregate repurchase of 8,250,000 shares in the open market. The Company did not repurchase any shares under this program in 2023 and 2022.
The Company has a stock buyback program initially adopted in 2001 and subsequently amended in 2013 and 2019 that authorized the aggregate repurchase of 8,250,000 shares in the open market. The Company did not repurchase any shares under this program in 2024 and 2023. There are 1,570,428 shares that remain available for repurchase as of December 31, 2024.
The Supplemental Executive Retirement Plan (“SERP”) investments are measured at net asset value, which is computed using inputs such as cost, discounted future cash flows, independent appraisals and market based comparable data or net asset values calculated by the investment fund which are not publicly available.
The Supplemental Executive Retirement Plan (“SERP”) investments are measured at net asset value, which is computed using inputs such as cost, discounted future cash flows, independent appraisals and market based comparable data or net asset values calculated by the investment fund which are not publicly available. 27 ​ Off Balance Sheet Arrangements To assist dealers in obtaining financing for the purchase of their boats for inventory, the Company has entered into agreements with various third-party floor plan lenders whereby the Company guarantees varying amounts of debt for qualifying dealers on boats in dealer inventory.
On January 23, 2024, the Board of Directors approved a quarterly cash dividend of $0.14 per common share payable March 11, 2024 to stockholders of record at the close of business on February 9, 2024.
The Company is currently evaluating its funding options and timing to distribute participant balances. On January 28, 2025, the Board of Directors declared a regular quarterly cash dividend of $0.14 per common share payable March 10, 2025 to stockholders of record at the close of business on February 10, 2025.
As a percentage of net sales, cost of goods sold increased to 76.4% in 2023 compared to 75.4% in 2022 primarily due to higher 22 ​ promotional costs coupled with manufacturing inefficiencies as boat demand moderated and dealer orders decreased in the current year compared to the prior year. Selling, General and Administrative Expenses .
As a percentage of net sales, cost of goods sold increased to 80.8% in 2024 compared to 76.4% in 2023 primarily due to lower sales volumes and associated manufacturing cost inefficiencies, as well as higher promotional expenses compared to the prior year. Production schedules and labor costs have been adjusted to more closely align with reduced demand.
Net income increased to $41.7 million, from $40.3 million in the prior year, as higher interest income offset the decline in operating income. Diluted earnings per share was $1.21 in 2023, up from $1.18 in 2022.
Gross profit decreased to $45.5 million in 2024, from $90.4 million in 2023. Operating income decreased to $18.3 million in 2024, from $49.2 million in the prior year. Net income decreased to $17.9 million in 2024, from $41.7 million in the prior year. Diluted earnings per share was $0.50 for 2024, down from $1.21 for 2023.
There are 1,570,428 shares that remain available for repurchase as of December 31, 2023. The program does not have a predetermined expiration date. The Company has entered into agreements with third-party floor plan lenders where it has agreed, in the event of default by a qualifying dealer, to repurchase MPC boats repossessed from the dealer.
Management expects this reduction to continue to favorably impact operating cash flow in future periods. The Company has entered into agreements with third-party floor plan lenders where it has agreed, in the event of default by a qualifying dealer, to repurchase MPC boats repossessed from the dealer.
Gain on disposition of assets, net for 2023 was $2.0 million due primarily to a $1.8 million gain related to a real estate transaction recorded during the third quarter of 2023. Interest Income, net. Interest income, net increased to $2.9 million in 2023 compared to $338 thousand in 2022 due to higher cash balances and higher investment yields.
Selling, general and administrative expenses were 11.6% of net sales in 2024 compared to 11.3% in 2023. Gain on disposition of assets, net. Gain on disposition of assets, net for 2024 was $144 thousand compared to $2.0 million for 2023. In 2023, gains on disposition of assets included a $1.8 million gain related to a real estate transaction.
Marine Products’ net sales increased slightly by $2.7 million or 0.7% in 2023 compared to 2022. The increase was primarily due to a 7.3% increase in the average gross selling price per boat, partially offset by increased promotional costs and a 4.4% decrease in the number of boats sold.
Marine Products’ net sales decreased by $147.2 million, or 38.4% ,to $236.6 million in 2024 compared to $383.7 million in 2023. The change in net sales in 2024 compared to the prior year was primarily due to a 40% decrease in unit sales volume partially offset by a positive price/mix change of 2%.
Selling, general and administrative expenses as a percentage of net sales were 11.3% in 2023 compared to 11.0% in 2022. As a percentage of net sales, warranty expense was 1.5% in both 2023 and 2022. The Company incurred lower incentive compensation costs in 2023 compared to 2022 due to lower profitability for the full year.
This decrease was primarily due to costs that vary with sales and profitability, such as incentive compensation, sales commissions and warranty expense, as well as a decrease in pension expense in comparison to the prior year. In 2023, selling, general and administrative expenses also included a non-cash pension settlement charge of $2.4 million.
In 2023, international net sales were $22.5 million, a decrease of 12.2% compared to the prior year. Cost of Goods Sold . Cost of goods sold increased 2.1% in 2023 compared to 2022 due to higher materials and labor costs.
Cost of goods sold decreased 34.9% in 2024 compared to 2023 due to lower materials expense and labor costs.
Removed
Overview Consolidated net sales increased slightly in 2023 compared to 2022 due to a 7.3% increase in the average gross selling price per boat due to model mix, partially offset by increased promotional costs and a 4.4% decrease in unit sales to dealers.
Added
These results reflected lower demand as our dealers sought to reduce inventories after strong demand immediately after Covid-19. While the Company made significant efforts in 2023 and 2024 to reduce costs and align production to a lower demand level, profit margins contracted due to increased promotional expenses and the negative impact of fixed costs coupled with the sales decline.
Removed
Management will continue to monitor retail demand among the various segments in the recreational boat market, the actions of our competitors, dealer inventory levels and the availability of dealer and consumer financing for the purchase of our products and adjust our production levels as deemed appropriate.
Added
We have adjusted production levels to more closely align with expected demand, however this reduction has resulted in reduced fixed cost absorption and negatively impacted our profit margins.
Removed
Gross profit decreased to $90.4 million in 2023, from $93.7 million in 2022 due to higher 21 ​ promotional costs coupled with manufacturing cost inefficiencies as boat demand moderated and dealer orders decreased year-over-year. Operating income decreased to $49.2 million, from $51.8 million in the prior year.
Added
While interest rates have begun to decrease, the Company believes it may take further interest rate relief to drive increased consumer appetite for new boat purchases. The Company is actively monitoring dealer inventories and order patterns for an uptick in demand, at which point we may increase production schedules.
Removed
Since some buyers of recreational boats finance their purchases, higher interest rates may discourage them from the purchase of a boat. In light of the normalization of demand and higher interest rates, we have reinstituted certain retail incentives and other allowances to attract more consumers to address lower demand compared to the first half of 2023.
Added
Management believes sales comparisons to the prior year could begin to turn positive in the second half of 2025. How We Evaluate our Operations ​ We use Earnings per share, Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA), EBITDA margin and Free cash flow, non-GAAP financial measures, to evaluate and analyze the Company’s operating performance.
Removed
We have adjusted production levels to more closely align with expected demand. During the past three model years, Marine Products has produced a smaller number of boat designs than in previous years to increase production efficiency.
Added
We believe that presenting EBITDA and EBITDA margin enables a comparison of our operating performance consistently over various time periods without regard to changes in our capital structure. In addition, we believe that free cash flow, which measures our ability to generate additional cash from our business operations, is an important financial measure for use in evaluating Marine Products’ liquidity.
Removed
In addition, the average size of the models the Company is producing has increased in response to evolving retail demand, and this trend is expected to continue. The Company intends to continue its focus on larger boats given this trend, higher associated price points and higher margins.
Added
Marine Products’ definition of free cash flow is limited, in that it does not represent residual cash flows available for discretionary expenditures, since the measure does not deduct the payments required for debt service and other contractual obligations or payments made for business acquisitions, if any . ​ EBITDA and EBITDA margin have limitations as analytical tools and should not be considered as an alternative to net income, operating income, net income margin, or any other measure of financial performance presented in accordance with accounting principles generally accepted in the United States of America (GAAP).
Removed
Due to strong demand across the recreational sector following the COVID-19 pandemic, key materials and components had been in tight supply. Supply chain disruptions and constraints negatively impacted our operations in 2022 and early 2023 including our production volumes and manufacturing inefficiencies, however, these issues have improved and are no longer impacting production.
Added
Similarly, free cash flow should be considered in addition to, rather than as a substitute for, GAAP presentation of net cash provided by operating, investing and financing activities, as a measure of our liquidity. ​ See section titled Non-GAAP Financial Measures for a reconciliation of EBITDA to net income and EBITDA margin to net income margin, the most directly comparable financial measures calculated and presented in accordance with GAAP and a reconciliation of Free Cash Flow to Operating Cash Flow, the most directly comparable financial measure calculated and presented in accordance with GAAP. 23 ​ Results of Operations ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, (in thousands, except per share and number of boats sold) ​ 2024 ​ 2023 ​ 2022 ​ Net sales ​ $ 236,555 ​ $ 383,729 ​ $ 380,995 ​ Cost of goods sold ​ ​ 191,057 ​ ​ 293,350 ​ ​ 287,278 ​ Selling, general and administrative expenses ​ ​ 27,376 ​ ​ 43,213 ​ ​ 41,921 ​ Gain on disposition of assets, net ​ ​ (144) ​ ​ (2,036) ​ ​ — ​ Interest income, net ​ ​ 2,876 ​ ​ 2,860 ​ ​ 338 ​ Income tax provision ​ ​ 3,289 ​ ​ 10,367 ​ ​ 11,787 ​ Net income ​ $ 17,853 ​ $ 41,695 ​ $ 40,347 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income margin ​ ​ 7.5 % ​ 10.9 % ​ 10.6 % Earnings per share ​ $ 0.50 ​ $ 1.21 ​ $ 1.18 ​ Cash flow from operating activities ​ $ 29,526 ​ $ 56,846 ​ $ 49,348 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total number of boats sold ​ 2,492 ​ 4,139 ​ 4,331 ​ Average gross selling price per boat ​ $ 85.7 ​ $ 82.4 ​ $ 76.8 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Non-GAAP financial measures: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ EBITDA ​ $ 21,052 ​ $ 51,618 ​ $ 53,701 ​ EBITDA margin ​ ​ 8.9 % ​ 13.5 % ​ 14.1 % Free cash flow ​ $ 24,930 ​ $ 46,672 ​ $ 46,848 ​ ​ Year Ended December 31, 2024 Compared to Year Ended December 31, 2023 Net Sales.
Removed
Results of Operations ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, ​ ​ 2023 ​ 2022 ​ 2021 ​ Total number of boats sold ​ 4,139 ​ 4,331 ​ 4,165 Average gross selling price per boat (in thousands) ​ $ 82.4 ​ $ 76.8 ​ $ 62.1 ​ Net sales (in thousands) ​ $ 383,729 ​ $ 380,995 ​ $ 298,014 ​ Gross profit margin percent ​ 23.6 % 24.6 % 22.9 % Percentage of selling, general and administrative expenses to net sales ​ ​ 11.3 % ​ 11.0 % ​ 10.7 % Operating income (in thousands) ​ $ 49,202 ​ $ 51,796 ​ $ 36,392 ​ Warranty expense (in thousands) ​ $ 5,829 ​ $ 5,903 ​ $ 3,702 ​ ​ Year Ended December 31, 2023 Compared to Year Ended December 31, 2022 Net Sales.
Added
Dealers continued to tightly manage their inventories in the face of elevated floor plan carrying costs and soft consumer demand. The Company’s quarterly sales decreases in the current year compared to the prior year became less pronounced as 2024 progressed.
Removed
Unit sales decreased in most of our Chaparral models as well as many Robalo models during 2023 compared to the prior year. Unit sales during 2023 in comparison to the prior year were negatively impacted by a normalization of demand relative to high post-COVID levels and higher interest rates.
Added
Management expects year-over-year sales comparisons to be generally flat in the near-term, with potential for growth in the second half of 2025. In 2024, net sales outside of the United States accounted for 5.6% of net sales compared to 5.9% of net sales in the prior year. Cost of Goods Sold .
Removed
Average selling prices increased compared to the prior year primarily due to a favorable model mix partially offset by an increase in retail incentive costs for a new program announced during the fourth quarter of 2023. Domestic net sales were $361.2 million, an increase of 1.7% compared to the prior year.
Added
The Company intends to monitor order patterns and maintain these reduced production levels until more definitive signs of increased demand develop. Selling, General and Administrative Expenses . Selling, general and administrative expenses decreased by $15.8 million or 36.6% in 2024 compared to 2023.
Removed
Selling, general and administrative expenses increased by $1.3 million or 3.1% in 2023 compared to 2022. The increase was primarily due to higher non-cash settlement losses recorded of $2.4 million in 2023 compared to $1.2 million in 2022 related to the termination of the defined benefit pension plan.
Added
The income tax provision decreased to $3.3 million in 2024 from $10.4 million in 2023. The effective tax rate reflects an income tax provision of 15.6% in 2024 compared to 19.9% in 2023.
Removed
Management expects the reduction in anticipated incentive compensation to be paid to selected non-executive employees described in the Notes to the Consolidated Financial Statements in note titled Commitments and Contingencies, to favorably impact selling, general and administrative expenses for future periods.
Added
The decrease in the 2024 effective tax rate is primarily due to the stronger impact of favorable permanent and discrete adjustments on a decreased pretax income, coupled with increased tax credits, including credits related to the Company’s solar panel installation at its manufacturing site in Nashville, Georgia. Net income and diluted earnings per share.
Removed
The effective tax rate decreased to 19.9% in 2023 from 22.6% in 2022. The decrease in the 2023 effective tax rate is primarily due to favorable permanent and beneficial discrete adjustments compared to unfavorable permanent and detrimental discrete adjustments in 2022.
Added
Net income decreased to $17.9 million in 2024, or $0.50 diluted earnings per share, from net income of $41.7 million in 2023, or $1.21 diluted earnings per share. Net income margin was 7.5% in 2024 compared to 10.9% in 2023.
Removed
Liquidity and Capital Resources Cash and Cash Flows The Company’s cash and cash equivalents were $72.0 million at December 31, 2023, $43.2 million at December 31, 2022 and $14.1 million at December 31, 2021.
Added
The decline in 2024 was primarily due to lower revenues and gain of disposition of assets, net. ​ EBITDA and EBITDA margin. EBITDA was $21.1 million in 2024 compared to $51.6 million in 2023. EBITDA margin was 8.9% in 2024 compared to 13.5% in 2023. ​ Net cash provided by operating activities and Free cash flow.
Removed
The net cash provided by operating activities in 2023 includes net income of $41.7 million and an adjustment for a non-cash pension settlement loss of $2.4 million, coupled with a net favorable change in inventory of $11.4 million.
Added
Net cash provided by operating activities and Free cash flow decreased in 2024 primarily due to lower net income partially offset by favorable working capital changes. Free cash flow was also positively impacted by a decrease in capital expenditures in 2024 compared to the prior year.
Removed
These favorable changes are coupled with a net favorable change in other components of our working capital (including accounts receivable less accounts payable and accrued expenses) totaling $1.8 million, partially offset by an unfavorable change in other non-current assets.
Added
Non -GAAP Financial Measures Reconciliation of GAAP and non-GAAP Financial Measures Marine Products has disclosed non-GAAP financial measures of EBITDA, EBITDA margin and free cash flow in the Results of Operations section above.
Removed
The net favorable change in inventory during 2023 was primarily due to clearing inventory of partially completed boats as supply chain disruptions of critical components improved during 2023 in comparison to the prior year.
Added
These measures should not be considered in isolation or as a substitute for performance or liquidity measures prepared in accordance with GAAP. ​ A non-GAAP financial measure is a numerical measure of financial performance, financial position or cash flows that either 1) excludes amounts, or is subject to adjustments that have the effect of excluding amounts, that are included in the most directly comparable measure calculated and presented in accordance with GAAP in the statement of operations, balance sheet or statement of cash flows, or 2) includes amounts, or is subject to adjustments that have the effect of including amounts, that are excluded from the most directly comparable measure so calculated and presented. ​ The following are reconciliations of these non-GAAP measures with their most directly comparable GAAP measures. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (Unaudited) ​ Years ended December 31, (in thousands) 2024 2023 2022 Reconciliation of Net Income to EBITDA ​ ​ ​ ​ Net income ​ $ 17,853 ​ $ 41,695 ​ $ 40,347 ​ Adjustments: ​ ​ ​ ​ ​ Add: Income tax provision ​ 3,289 ​ 10,367 ​ 11,787 ​ Add: Depreciation and amortization ​ ​ 2,786 ​ ​ 2,416 ​ ​ 1,905 ​ Less: Interest income, net ​ 2,876 ​ 2,860 ​ 338 ​ EBITDA ​ $ 21,052 ​ $ 51,618 ​ $ 53,701 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net sales ​ $ 236,555 ​ $ 383,729 ​ $ 380,995 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income margin (1) ​ ​ 7.5 % ​ 10.9 % ​ 10.6 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ EBITDA margin (1) ​ ​ 8.9 % ​ 13.5 % ​ 14.1 % (1) Net income margin is calculated as net income divided by net sales.
Removed
The net unfavorable change in other non-current assets is due primarily to an employer contribution of $4.0 million during 2023 to the supplemental retirement plan.
Added
EBITDA margin is calculated as EBITDA divided by net sales. 25 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (Unaudited) ​ Years ended December 31, (in thousands) 2024 ​ 2023 2022 Reconciliation of Operating Cash Flow to Free Cash Flow ​ ​ ​ ​ ​ ​ ​ ​ Net cash provided by operating activities ​ $ 29,526 ​ $ 56,846 ​ $ 49,348 ​ Capital expenditures ​ ​ (4,596) ​ ​ (10,174) ​ ​ (2,500) ​ Free cash flow ​ $ 24,930 ​ $ 46,672 ​ $ 46,848 ​ Liquidity and Capital Resources Cash and Cash Flows The Company’s cash and cash equivalents were $52.4 million at December 31, 2024, $72.0 million at December 31, 2023 and $43.2 million at December 31, 2022.
Removed
Cash used for investing activities in 2023 increased $5.4 million in comparison to the same period in 2022 due to higher capital expenditures including transportation equipment and warehouse space partially offset by proceeds from sale of assets. 23 ​ Cash used for financing activities in 2023 increased $2.4 million compared to 2022 primarily due to increased dividends paid to common shareholders, coupled with an increase in the cost of stock repurchases related to the vesting of restricted shares.
Added
In addition, working capital was a source of cash of $6.0 million in 2024 compared to a source of cash of $13.7 million in the prior year.
Removed
Off Balance Sheet Arrangements To assist dealers in obtaining financing for the purchase of their boats for inventory, the Company has entered into agreements with various third-party floor plan lenders whereby the Company guarantees varying amounts of debt for qualifying dealers on boats in dealer inventory.
Added
The changes in the other components of working capital were consistent with the decrease in net sales and lower production levels as well as the timing of payments and receipts. ​ Cash used for investing activities in 2024 decreased $3.4 million in comparison to 2023 due to lower capital expenditures in 2024.
Removed
The annual dealer volume discounts are primarily based on July 1 through June 30 model year purchases. In addition, the Company offers at various times other time-specific or model-specific incentives.
Added
Key capital investment projects in 2024 included the solar panel installation at the Company’s production site, and in 2023 included warehouse expansions and transportation equipment purchases.
Added
Cash used for financing activities in 2024 increased $24.5 million compared to 2023 primarily due to higher dividends paid to common shareholders, including a special dividend of $0.70 per share ($24 million) paid during the second quarter of 2024. Cash Requirements Management expects that capital expenditures during 2025 will be approximately $3.2 million.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeAs of December 31, 2023, there were no outstanding interest-bearing advances under our credit facility which bore interest at a floating rate. ​ Marine Products holds no derivative financial instruments which could expose the Company to significant market risk. Marine Products maintains investments primarily in money market funds which are not subject to material interest rate risk exposure.
Biggest changeAs of December 31, 2024, there were no outstanding interest-bearing advances under our credit facility which bore interest at a floating rate. ​ Marine Products has no derivative financial instruments which could expose the Company to significant market risk. Marine Products maintains investments primarily in money market funds which are not subject to material interest rate risk exposure.
Marine Products does not expect any material changes in market risk exposures or how those risks are managed. ​ ​ 26 ​
Marine Products does not expect any material changes in market risk exposures or how those risks are managed. ​ ​ 29 ​

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