Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2021 | Apr. 23, 2021 | |
Document and Entity Information | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Mar. 31, 2021 | |
Entity File Number | 1-16263 | |
Entity Registrant Name | MARINE PRODUCTS CORPORATION | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 58-2572419 | |
Entity Address, Address Line One | 2801 | |
Entity Address, City or Town | Atlanta | |
Entity Address, State or Province | GA | |
Entity Address, Postal Zip Code | 30329 | |
City Area Code | 404 | |
Local Phone Number | 321-7910 | |
Title of 12(b) Security | Common stock | |
Trading Symbol | MPX | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 33,993,885 | |
Entity Central Index Key | 0001129155 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
ASSETS | ||
Cash and cash equivalents | $ 35,016 | $ 31,573 |
Accounts receivable, net of allowance for doubtful accounts of $12 in 2021 and $16 in 2020 | 7,727 | 4,706 |
Inventories | 45,929 | 42,310 |
Income taxes receivable | 551 | |
Prepaid expenses and other current assets | 2,161 | 1,947 |
Total current assets | 91,384 | 80,536 |
Property, plant and equipment, net of accumulated depreciation of $30,514 in 2021 and $30,066 in 2020 | 14,727 | 14,938 |
Goodwill | 3,308 | 3,308 |
Other intangibles, net | 465 | 465 |
Deferred income taxes | 3,917 | 4,075 |
Other assets | 16,364 | 16,100 |
Total assets | 130,165 | 119,422 |
LIABILITIES AND STOCKHOLDERS' EQUITY | ||
Accounts payable | 10,847 | 6,079 |
Accrued expenses and other liabilities | 16,583 | 15,583 |
Total current liabilities | 27,430 | 21,662 |
Pension liabilities | 13,209 | 12,524 |
Other long-term liabilities | 791 | 717 |
Total liabilities | 41,430 | 34,903 |
Common stock | 3,399 | 3,387 |
Retained earnings | 87,269 | 83,079 |
Accumulated other comprehensive loss | (1,933) | (1,947) |
Total stockholders' equity | 88,735 | 84,519 |
Total liabilities and stockholders' equity | $ 130,165 | $ 119,422 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
CONSOLIDATED BALANCE SHEETS | ||
Allowance for doubtful accounts | $ 12 | $ 16 |
Accumulated depreciation, property plant and equipment | $ 30,514 | $ 30,066 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
CONSOLIDATED STATEMENTS OF OPERATIONS | ||
Net sales | $ 78,375 | $ 59,119 |
Cost of goods sold | 59,913 | 47,012 |
Gross profit | 18,462 | 12,107 |
Selling, general and administrative expenses | 8,437 | 7,253 |
Operating income | 10,025 | 4,854 |
Interest income | 8 | 61 |
Income before income taxes | 10,033 | 4,915 |
Income tax provision | 1,936 | 707 |
Net income | $ 8,097 | $ 4,208 |
Earnings per share | ||
Basic | $ 0.24 | $ 0.12 |
Diluted | 0.24 | 0.12 |
Dividends paid per share | $ 0.10 | $ 0.12 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ||
Net income | $ 8,097 | $ 4,208 |
Other comprehensive income, net of taxes: | ||
Pension adjustment | 14 | 119 |
Comprehensive income | $ 8,111 | $ 4,327 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands | Common Stock | Capital in Excess of Par Value | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Total |
Balance at Dec. 31, 2019 | $ 3,387 | $ 76,573 | $ (2,748) | $ 77,212 | |
Balance (in shares) at Dec. 31, 2019 | 33,870 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Stock issued for stock incentive plans, net | $ 18 | $ 558 | 576 | ||
Stock issued for stock incentive plans, net (in shares) | 175 | ||||
Stock purchased and retired | $ (8) | (558) | (489) | (1,055) | |
Stock purchased and retired (in shares) | (73) | ||||
Net income | 4,208 | 4,208 | |||
Pension adjustment, net of taxes | 119 | 119 | |||
Dividends declared | (4,074) | (4,074) | |||
Balance at Mar. 31, 2020 | $ 3,397 | 76,218 | (2,629) | 76,986 | |
Balance (in shares) at Mar. 31, 2020 | 33,972 | ||||
Balance at Dec. 31, 2020 | $ 3,387 | 83,079 | (1,947) | 84,519 | |
Balance (in shares) at Dec. 31, 2020 | 33,869 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Stock issued for stock incentive plans, net | $ 18 | 535 | 553 | ||
Stock issued for stock incentive plans, net (in shares) | 189 | ||||
Stock purchased and retired | $ (6) | $ (535) | (509) | (1,050) | |
Stock purchased and retired (in shares) | (64) | ||||
Net income | 8,097 | 8,097 | |||
Pension adjustment, net of taxes | 14 | 14 | |||
Dividends declared | (3,398) | (3,398) | |||
Balance at Mar. 31, 2021 | $ 3,399 | $ 87,269 | $ (1,933) | $ 88,735 | |
Balance (in shares) at Mar. 31, 2021 | 33,994 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
OPERATING ACTIVITIES | ||
Net income | $ 8,097 | $ 4,208 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 447 | 536 |
Stock-based compensation expense | 553 | 576 |
Deferred income tax provision | 154 | 528 |
(Increase) decrease in assets: | ||
Accounts receivable | (3,021) | (2,563) |
Inventories | (3,620) | (4,393) |
Prepaid expenses and other current assets | (214) | 614 |
Income taxes receivable | (551) | 174 |
Other non-current assets | (232) | 1,087 |
Increase (decrease) in liabilities: | ||
Accounts payable | 4,768 | 5,917 |
Accrued expenses and other liabilities | 999 | 553 |
Other long-term liabilities | 747 | (1,183) |
Net cash provided by operating activities | 8,127 | 6,054 |
INVESTING ACTIVITIES | ||
Capital expenditures | (236) | (665) |
Net cash used for investing activities | (236) | (665) |
FINANCING ACTIVITIES | ||
Payment of dividends | (3,398) | (4,074) |
Cash paid for common stock purchased and retired | (1,050) | (1,055) |
Net cash used for financing activities | (4,448) | (5,129) |
Net increase in cash and cash equivalents | 3,443 | 260 |
Cash and cash equivalents at beginning of period | 31,573 | 19,804 |
Cash and cash equivalents at end of period | 35,016 | $ 20,064 |
Supplemental information: | ||
Income tax payments, net | $ 2,534 |
GENERAL
GENERAL | 3 Months Ended |
Mar. 31, 2021 | |
GENERAL | |
GENERAL | 1. GENERAL The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of management, all adjustments (all of which consisted of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three months ended March 31, 2021 are not necessarily indicative of the results that may be expected for the year ending December 31, 2021. The consolidated balance sheet at December 31, 2020 has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. For further information, refer to the consolidated financial statements and footnotes thereto included in the annual report of Marine Products Corporation (“Marine Products,” the “Company” or “MPC”) on Form 10-K for the year ended December 31, 2020. A group that includes the Company’s Chairman of the Board, Gary W. Rollins, and certain companies under his control, controls in excess of fifty percent of the Company’s voting power. |
RECENT ACCOUNTING STANDARDS
RECENT ACCOUNTING STANDARDS | 3 Months Ended |
Mar. 31, 2021 | |
RECENT ACCOUNTING STANDARDS | |
RECENT ACCOUNTING STANDARDS | 2. RECENT ACCOUNTING STANDARDS The FASB issued the following Accounting Standards Updates (ASUs): Recently Adopted Accounting Standards: Accounting Standards Update (ASU) No. 2019-12 — Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. The amendments in this ASU simplify the accounting for income taxes by removing the exceptions to the incremental approach for intra-period tax allocation in certain situations, requirement to recognize a deferred tax liability for a change in the status of a foreign investment, and the general methodology for computing income taxes in an interim period when year-to date loss exceeds the anticipated loss for the year. The amendments also simplify the accounting for income taxes with regard to franchise tax, evaluation of step up in the tax basis goodwill in certain business combinations, allocating current and deferred tax expense to legal entities that are not subject to tax and enacted change in tax laws or rates. The Company adopted these provisions in the first quarter of 2021 and the adoption did not have a material impact on its consolidated financial statements. Recently Issued Accounting Standards Not Yet Adopted: ASU No. 2020-04 — Reference Rate Reform (Topic 848). The amendments in this ASU, provides optional guidance for a limited time to ease the impact of the reference rate reform on financial reporting. The amendments, which are elective, provide expedients to contract modifications, affected by reference rate reform if certain criteria are met. The amendments apply only to contracts and hedging relationships that reference LIBOR or other reference rate that is expected to be discontinued due to reference rate reform. This ASU is effective as of March 12, 2020 through December 31, 2022 and may be applied to contract modifications and hedging relationships from the beginning of an interim period that includes or is subsequent to March 12, 2020. The Company will adopt these provisions when LIBOR is discontinued and does not expect adoption to have a material impact on its consolidated financial statements. |
NET SALES
NET SALES | 3 Months Ended |
Mar. 31, 2021 | |
Net Sales | |
Net Sales | .3. NET SALES Accounting Policy: MPC’s contract revenues are generated principally from selling: (1) fiberglass motorized boats and accessories and (2) parts to independent dealers. Revenue is recognized when obligations under the terms of a contract with our customer are satisfied. Satisfaction of contract terms occur with the transfer of title of our boats and accessories and parts to our dealers. Net sales are measured as the amount of consideration we expect to receive in exchange for transferring the goods to the dealer. The amount of consideration we expect to receive consists of the sales price adjusted for dealer incentives. The expected costs associated with our base warranties continue to be recognized as expense when the products are sold as they are deemed to be assurance-type warranties (see Note 6). Incidental promotional items that are immaterial in the context of the contract are recognized as expense. Fees charged to customers for shipping and handling are included in net sales in the accompanying consolidated statements of operations and the related costs incurred by the Company are included in cost of goods sold. Nature of goods: MPC’s performance obligations within its contracts consist of: (1) boats and accessories and (2) parts. The Company transfers control and recognizes revenue on the satisfaction of its performance obligations (point in time) as follows: ● Boats and accessories (domestic sales) – upon delivery and acceptance by the dealer ● Boats and accessories (international sales) – upon delivery to shipping port ● Parts – upon shipment/delivery to carrier Payment terms: For most domestic customers, MPC manufactures and delivers boats and accessories and parts ahead of payment - i.e., MPC has fulfilled its performance obligations prior to submitting an invoice to the dealer. MPC invoices the customer when the products are delivered and typically receives the payment within seven ten When the Company enters into contracts with its customers, it generally expects there to be no significant timing difference between the date the goods have been delivered to the customer (satisfaction of the performance obligation) and the date cash consideration is received. Accordingly, there is no financing component to the Company’s arrangements with its customers. Significant judgments: Determining the transaction price The transaction price for MPC’s boats and accessories is the invoice price adjusted for dealer incentives. Key inputs and assumptions in determining variable consideration related to dealer incentives include: ● Inputs: Current model year boat sales, total potential program incentive percentage, prior model year results of dealer incentive activity (i.e., incentive earned as a percentage of total incentive potential). ● Assumption: Current model year incentive activity will closely reflect prior model year actual results, adjusted as necessary for dealer purchasing trends or economic factors. Other: Our contracts with dealers do not provide them with a right of return. Accordingly, we do not have any obligations recorded for returns or refunds. Disaggregation of revenues: The following table disaggregates our sales by major source (in thousands): Three months ended (in thousands) March 31, 2021 March 31, 2020 Boats and accessories $ 77,259 $ 58,222 Parts 1,116 897 Net sales $ 78,375 $ 59,119 The following table disaggregates our revenues between domestic and international (in thousands): Three months ended (in thousands) March 31, 2021 March 31, 2020 Domestic $ 74,364 $ 55,732 International 4,011 3,387 Net sales $ 78,375 $ 59,119 Timing of revenue recognition for each of the periods presented is shown below: Three months ended (in thousands) March 31, 2021 March 31, 2020 Products transferred at a point in time $ 78,375 $ 59,119 Products transferred over time — — Net sales $ 78,375 $ 59,119 Contract balances: Amounts received from international and certain domestic dealers toward the purchase of boats are classified as deferred revenue and are included in accrued expenses and other liabilities on the Consolidated Balance Sheets. March 31, December 31, (in thousands) 2021 2020 Deferred revenue $ 1,405 $ 1,245 Substantially all of the amounts of deferred revenue disclosed above were recognized as sales during the immediately following quarters, respectively, when control transferred. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 3 Months Ended |
Mar. 31, 2021 | |
EARNINGS PER SHARE | |
EARNINGS PER SHARE | 4. EARNINGS PER SHARE Basic and diluted earnings per share are computed by dividing net income by the weighted average number of shares outstanding during the respective periods. In addition, the Company has periodically issued share-based payment awards that contain non-forfeitable rights to dividends and are therefore considered participating securities. Restricted shares of common stock (participating securities) outstanding and a reconciliation of weighted average shares outstanding is as follows: Three months ended March 31, (In thousands) 2021 2020 Net income available for stockholders: $ 8,097 $ 4,208 Less: Adjustments for earnings attributable to participating securities (158) (93) Net income used in calculating earnings per share $ 7,939 $ 4,115 Weighted average shares outstanding (including participating securities) 33,958 33,940 Adjustment for participating securities (671) (775) Shares used in calculating basic and diluted earnings per share 33,287 33,165 |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 3 Months Ended |
Mar. 31, 2021 | |
STOCK-BASED COMPENSATION | |
STOCK-BASED COMPENSATION | 5. STOCK-BASED COMPENSATION The Company reserved 3,000,000 shares of common stock under the 2014 Stock Incentive Plan with a term of ten years expiring in April 2024. This plan provides for the issuance of various forms of stock incentives, including among others, incentive and non-qualified stock options and restricted shares. As of March 31, 2021, there were approximately 1,379,950 shares available for grant. Stock-based compensation for the three months ended March 31, 2021 and 2020 were as follows: Restricted Stock Three months ended March 31, (in thousands) 2021 2020 Pre – tax cost $ 553 $ 576 After tax cost $ 431 $ 449 The following is a summary of the changes in non-vested restricted shares for the three months ended March 31, 2021: Weighted Average Grant-Date Shares Fair Value Non-vested shares at December 31, 2020 678,220 $ 12.89 Granted 189,750 16.55 Vested (194,400) 10.26 Non-vested shares at March 31, 2021 673,570 $ 14.68 The total fair value of shares vested was approximately $3,168,000 during the three months ended March 31, 2021 and approximately $3,234,000 during the three months ended March 31, 2020. Other Information As of March 31, 2021, total unrecognized compensation cost related to non-vested restricted shares was approximately $9,557,000. This cost is expected to be recognized over a weighted-average period of 4.0 years. For the three months ended March 31, 2021, approximately $285,000 of excess tax benefit for stock-based compensation awards has been recorded as a discrete tax adjustment and classified within operating activities in the consolidated statements of cash flows compared to approximately $287,000 for the three months ended March 31, 2020. |
WARRANTY COSTS AND OTHER CONTIN
WARRANTY COSTS AND OTHER CONTINGENCIES | 3 Months Ended |
Mar. 31, 2021 | |
WARRANTY COSTS AND OTHER CONTINGENCIES | |
WARRANTY COSTS AND OTHER CONTINGENCIES | 6. WARRANTY COSTS AND OTHER CONTINGENCIES Warranty Costs: For its Chaparral and Robalo products, Marine Products provides a lifetime limited structural hull warranty and a transferable one-year limited warranty to the original owner. Chaparral also includes a five-year limited structural deck warranty. Warranties for additional items are provided for periods of one The manufacturers of the engines, generators, and navigation electronics included on our boats provide and administer their own warranties for various lengths of time. An analysis of the warranty accruals for the three months ended March 31, 2021 and 2020 is as follows: (in thousands) 2021 2020 Balance at beginning of period $ 5,030 $ 5,410 Less: Payments made during the period (923) (767) Add: Warranty provision for the period 922 721 Changes to warranty provision for prior periods 124 50 Balance at March 31 $ 5,153 $ 5,414 The warranty accruals are reflected in accrued expenses and other liabilities on the consolidated balance sheets. Repurchase Obligations: The Company is a party to various agreements with third party lenders that provide floor plan financing to qualifying dealers whereby the Company guarantees varying amounts of debt on boats in dealer inventory. The Company’s obligation under these guarantees becomes effective in the case of a default under the financing arrangement between the dealer and the third-party lender. The agreements provide for the return of repossessed boats to the Company in new and unused condition subject to normal wear and tear as defined, in exchange for the Company’s assumption of specified percentages of the debt obligation on those boats, up to certain contractually determined dollar limits by the lenders. The Company had no material repurchases under the contractual agreements during the three months ended March 31, 2021 and March 31, 2020. Management continues to monitor the risk of defaults and resulting repurchase obligations based in part on information provided by third-party floor plan lenders and will adjust the guarantee liability at the end of each reporting period based on information reasonably available at that time. The Company currently has an agreement with one of the floor plan lenders whereby the contractual repurchase limit is based on a specified percentage of the amount of the average net receivables financed by the floor plan lender for our dealers less repurchases during the prior 12 month period, which was a net $7.0 million as of March 31, 2021. The Company has contractual repurchase agreements with additional lenders with an aggregate maximum repurchase obligation of $2.6 million with various expiration and cancellation terms of less than one year, for an aggregate repurchase obligation with all floor plan financing institutions of $9.6 million as of March 31, 2021. |
BUSINESS SEGMENT INFORMATION
BUSINESS SEGMENT INFORMATION | 3 Months Ended |
Mar. 31, 2021 | |
BUSINESS SEGMENT INFORMATION | |
BUSINESS SEGMENT INFORMATION | 7. BUSINESS SEGMENT INFORMATION The Company has one reportable segment, its powerboat manufacturing business; therefore, the majority of segment-related disclosures are not relevant to the Company. In addition, the Company’s results of operations and its financial condition are not significantly reliant upon any single customer or product model. |
INVENTORIES
INVENTORIES | 3 Months Ended |
Mar. 31, 2021 | |
INVENTORIES | |
INVENTORIES | 8. INVENTORIES Inventories consist of the following: March 31, December 31, (in thousands) 2021 2020 Raw materials and supplies $ 22,651 $ 21,754 Work in process 12,349 11,378 Finished goods 10,929 9,178 Total inventories $ 45,929 $ 42,310 |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Mar. 31, 2021 | |
INCOME TAXES | |
INCOME TAXES | 9. INCOME TAXES The Company determines its periodic income tax provision based upon the current period income and the annual estimated tax rate for the Company adjusted for discrete items including tax credits and changes to prior year estimates. The estimated tax rate is adjusted, if necessary, as of the end of each successive interim period during the fiscal year to the Company’s current annual estimated tax rate. Income tax provision for the first quarter of 2021 reflects an effective tax rate of 19.3 percent, compared to an effective rate of 14.4 percent for the comparable period in the prior year. The increase in the effective rate is primarily due to higher pre-tax income for the three months ended March 31, 2021, together with lower beneficial permanent items as well as an unfavorable adjustment related to state tax liabilities, recorded as a discrete item. The effective rate in both periods includes the effect of beneficial discrete adjustments related to vesting of restricted stock and restricted stock dividends. |
EMPLOYEE BENEFIT PLANS
EMPLOYEE BENEFIT PLANS | 3 Months Ended |
Mar. 31, 2021 | |
EMPLOYEE BENEFIT PLANS | |
EMPLOYEE BENEFIT PLANS | 10. EMPLOYEE BENEFIT PLANS The Company participates in a multiple employer Retirement Income Plan, sponsored by RPC, Inc. (“RPC”). The following represents the net periodic cost (benefit) and related components for the plan for the three months ended March 31, 2021 and 2020. Three months ended March 31, (in thousands) 2021 2020 Interest cost $ 37 $ 58 Expected return on plan assets (72) (73) Amortization of net losses 18 24 Net periodic cost (benefit) $ (17) $ 9 The Company did not contribute to this plan during the three months ended March 31, 2021 and March 31, 2020. In October 2020, RPC amended the Retirement Income Plan to add a limited lump-sum payment window for vested terminated participants who had terminated employment before July 1, 2020 and for active employees who reached age 59 ½ The Company permits selected highly compensated employees to defer a portion of their compensation into a non-qualified Supplemental Executive Retirement Plan (“SERP”). The Company maintains certain securities primarily in mutual funds and company-owned life insurance (“COLI”) policies as a funding source to satisfy the obligation of the SERP that have been classified as trading and are stated at fair value totaling approximately $10,851,000 as of March 31, 2021 and $10,622,000 as of December 31, 2020. Trading gains related to the SERP assets totaled approximately $63,000 during the three months ended March 31, 2021, compared to trading losses of approximately $1,078,000 during the three months ended March 31, 2020. The SERP assets are reported in other non-current assets on the consolidated balance sheets and changes to the fair value of the assets are reported in selling, general and administrative expenses in the consolidated statements of operations. The SERP liabilities include participant deferrals net of distributions and are stated at fair value of approximately $13,209,000 as of March 31, 2021 and $12,524,000 as of December 31, 2020. The SERP liabilities are reported on the consolidated balance sheets in long-term pension liabilities and any change in the fair value is recorded as compensation cost within selling, general and administrative expenses in the consolidated statements of operations. Changes in the fair value of the SERP liabilities represented unrealized gains of approximately $163,000 during the three months ended March 31, 2021, compared to unrealized losses of approximately $1,427,000 during the three months ended March 31, 2020. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 3 Months Ended |
Mar. 31, 2021 | |
FAIR VALUE MEASUREMENTS | |
FAIR VALUE MEASUREMENTS | 11. FAIR VALUE MEASUREMENTS The various inputs used to measure assets at fair value establish a hierarchy that distinguishes between assumptions based on market data (observable inputs) and the Company’s assumptions (unobservable inputs). The hierarchy consists of three broad levels as follows: 1. Level 1 – Quoted market prices in active markets for identical assets or liabilities. 2. Level 2 – Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities. 3. Level 3 – Unobservable inputs developed using the Company’s estimates and assumptions, which reflect those that market participants would use. Trading securities are comprised of SERP assets, as described in Note 10, and are recorded primarily at their net cash surrender values calculated using their net asset values, which approximate fair value, as provided by the issuing insurance company or investment company. Trading securities were $10,851,000 as of March 31, 2021 and $10,622,000 as of December 31, 2020. Significant observable inputs, in addition to quoted market prices, were used to value the trading securities. The Company’s policy is to recognize transfers between levels at the beginning of quarterly reporting periods. For the three months ended March 31, 2021 there were no significant transfers in or out of levels 1 , 2 or 3 . The carrying amount of other financial instruments reported in the balance sheet for current assets and current liabilities approximate their fair values because of the short-term maturity of these instruments. The Company currently does not use the fair value option to measure any of its existing financial instruments and has not determined whether or not it will elect this option for financial instruments it may acquire in the future. |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE LOSS | 3 Months Ended |
Mar. 31, 2021 | |
ACCUMULATED OTHER COMPREHENSIVE LOSS | |
ACCUMULATED OTHER COMPREHENSIVE LOSS | 12. ACCUMULATED OTHER COMPREHENSIVE LOSS Accumulated other comprehensive loss consists of the following: Pension (in thousands) Adjustment Total Balance at December 31, 2020 $ (1,947) $ (1,947) Change during the period ended March 31, 2021: Before-tax amount — — Tax provision — — Reclassification adjustment, net of taxes Amortization of net loss (1) 14 14 Total activity for the period 14 14 Balance at March 31, 2021 $ (1,933) $ (1,933) (1) Reported as part of selling, general and administrative expenses. Accumulated other comprehensive loss consists of the following: Pension (in thousands) Adjustment Total Balance at December 31, 2019 $ (2,748) $ (2,748) Change during the period ended March 31, 2020: Before-tax amount 128 128 Tax provision (28) (28) Reclassification adjustment, net of taxes Amortization of net loss (1) 19 19 Total activity for the period 119 119 Balance at March 31, 2020 $ (2,629) $ (2,629) (1) Reported as part of selling, general and administrative expenses. (2) Reported as part of interest income. |
SUBSEQUENT EVENT
SUBSEQUENT EVENT | 3 Months Ended |
Mar. 31, 2021 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENT | 13. SUBSEQUENT EVENT On April 27, 2021, the Board of Directors declared a regular quarterly cash dividend of $0.12 per share payable June 10, 2021 to common stockholders of record at the close of business May 10, 2021 . |
RECENT ACCOUNTING STANDARDS (Po
RECENT ACCOUNTING STANDARDS (Policies) | 3 Months Ended |
Mar. 31, 2021 | |
SIGNIFICANT ACCOUNTING POLICIES | |
RECENT ACCOUNTING STANDARDS | The FASB issued the following Accounting Standards Updates (ASUs): Recently Adopted Accounting Standards: Accounting Standards Update (ASU) No. 2019-12 — Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. The amendments in this ASU simplify the accounting for income taxes by removing the exceptions to the incremental approach for intra-period tax allocation in certain situations, requirement to recognize a deferred tax liability for a change in the status of a foreign investment, and the general methodology for computing income taxes in an interim period when year-to date loss exceeds the anticipated loss for the year. The amendments also simplify the accounting for income taxes with regard to franchise tax, evaluation of step up in the tax basis goodwill in certain business combinations, allocating current and deferred tax expense to legal entities that are not subject to tax and enacted change in tax laws or rates. The Company adopted these provisions in the first quarter of 2021 and the adoption did not have a material impact on its consolidated financial statements. Recently Issued Accounting Standards Not Yet Adopted: ASU No. 2020-04 — Reference Rate Reform (Topic 848). The amendments in this ASU, provides optional guidance for a limited time to ease the impact of the reference rate reform on financial reporting. The amendments, which are elective, provide expedients to contract modifications, affected by reference rate reform if certain criteria are met. The amendments apply only to contracts and hedging relationships that reference LIBOR or other reference rate that is expected to be discontinued due to reference rate reform. This ASU is effective as of March 12, 2020 through December 31, 2022 and may be applied to contract modifications and hedging relationships from the beginning of an interim period that includes or is subsequent to March 12, 2020. The Company will adopt these provisions when LIBOR is discontinued and does not expect adoption to have a material impact on its consolidated financial statements. |
NET SALES | MPC’s contract revenues are generated principally from selling: (1) fiberglass motorized boats and accessories and (2) parts to independent dealers. Revenue is recognized when obligations under the terms of a contract with our customer are satisfied. Satisfaction of contract terms occur with the transfer of title of our boats and accessories and parts to our dealers. Net sales are measured as the amount of consideration we expect to receive in exchange for transferring the goods to the dealer. The amount of consideration we expect to receive consists of the sales price adjusted for dealer incentives. The expected costs associated with our base warranties continue to be recognized as expense when the products are sold as they are deemed to be assurance-type warranties (see Note 6). Incidental promotional items that are immaterial in the context of the contract are recognized as expense. Fees charged to customers for shipping and handling are included in net sales in the accompanying consolidated statements of operations and the related costs incurred by the Company are included in cost of goods sold. |
NET SALES (Tables)
NET SALES (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Net Sales | |
Schedule of disaggregation of sales by major source | Three months ended (in thousands) March 31, 2021 March 31, 2020 Boats and accessories $ 77,259 $ 58,222 Parts 1,116 897 Net sales $ 78,375 $ 59,119 |
Schedule of revenue by geographic region | Three months ended (in thousands) March 31, 2021 March 31, 2020 Domestic $ 74,364 $ 55,732 International 4,011 3,387 Net sales $ 78,375 $ 59,119 |
Schedule of timing of revenue recognition | Three months ended (in thousands) March 31, 2021 March 31, 2020 Products transferred at a point in time $ 78,375 $ 59,119 Products transferred over time — — Net sales $ 78,375 $ 59,119 |
Schedule of contract balances | March 31, December 31, (in thousands) 2021 2020 Deferred revenue $ 1,405 $ 1,245 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
EARNINGS PER SHARE | |
Schedule of reconciliation of weighted average shares outstanding | Three months ended March 31, (In thousands) 2021 2020 Net income available for stockholders: $ 8,097 $ 4,208 Less: Adjustments for earnings attributable to participating securities (158) (93) Net income used in calculating earnings per share $ 7,939 $ 4,115 Weighted average shares outstanding (including participating securities) 33,958 33,940 Adjustment for participating securities (671) (775) Shares used in calculating basic and diluted earnings per share 33,287 33,165 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
STOCK-BASED COMPENSATION | |
Schedule of stock-based compensation | Restricted Stock Three months ended March 31, (in thousands) 2021 2020 Pre – tax cost $ 553 $ 576 After tax cost $ 431 $ 449 |
Schedule of summary of the changes in non-vested restricted shares | Weighted Average Grant-Date Shares Fair Value Non-vested shares at December 31, 2020 678,220 $ 12.89 Granted 189,750 16.55 Vested (194,400) 10.26 Non-vested shares at March 31, 2021 673,570 $ 14.68 |
WARRANTY COSTS AND OTHER CONT_2
WARRANTY COSTS AND OTHER CONTINGENCIES (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
WARRANTY COSTS AND OTHER CONTINGENCIES | |
Schedule of analysis of warranty accruals | (in thousands) 2021 2020 Balance at beginning of period $ 5,030 $ 5,410 Less: Payments made during the period (923) (767) Add: Warranty provision for the period 922 721 Changes to warranty provision for prior periods 124 50 Balance at March 31 $ 5,153 $ 5,414 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
INVENTORIES | |
Schedule of inventories | March 31, December 31, (in thousands) 2021 2020 Raw materials and supplies $ 22,651 $ 21,754 Work in process 12,349 11,378 Finished goods 10,929 9,178 Total inventories $ 45,929 $ 42,310 |
EMPLOYEE BENEFIT PLANS (Tables)
EMPLOYEE BENEFIT PLANS (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
EMPLOYEE BENEFIT PLANS | |
Schedule of net periodic cost (benefit) | Three months ended March 31, (in thousands) 2021 2020 Interest cost $ 37 $ 58 Expected return on plan assets (72) (73) Amortization of net losses 18 24 Net periodic cost (benefit) $ (17) $ 9 |
ACCUMULATED OTHER COMPREHENSI_2
ACCUMULATED OTHER COMPREHENSIVE LOSS (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
ACCUMULATED OTHER COMPREHENSIVE LOSS | |
Schedule of accumulated other comprehensive loss | Pension (in thousands) Adjustment Total Balance at December 31, 2020 $ (1,947) $ (1,947) Change during the period ended March 31, 2021: Before-tax amount — — Tax provision — — Reclassification adjustment, net of taxes Amortization of net loss (1) 14 14 Total activity for the period 14 14 Balance at March 31, 2021 $ (1,933) $ (1,933) (1) Reported as part of selling, general and administrative expenses. Accumulated other comprehensive loss consists of the following: Pension (in thousands) Adjustment Total Balance at December 31, 2019 $ (2,748) $ (2,748) Change during the period ended March 31, 2020: Before-tax amount 128 128 Tax provision (28) (28) Reclassification adjustment, net of taxes Amortization of net loss (1) 19 19 Total activity for the period 119 119 Balance at March 31, 2020 $ (2,629) $ (2,629) (1) Reported as part of selling, general and administrative expenses. (2) Reported as part of interest income. |
GENERAL (Details)
GENERAL (Details) | 3 Months Ended |
Mar. 31, 2021 | |
Chairman of Board and Director | |
Ownership control | |
Voting power (in percent) | 50.00% |
NET SALES - Payment Terms (Deta
NET SALES - Payment Terms (Details) | 3 Months Ended |
Mar. 31, 2021 | |
Minimum | |
Net sales: | |
Revenue satisfaction period | 7 days |
Maximum | |
Net sales: | |
Revenue satisfaction period | 10 days |
NET SALES - Disaggregate sales
NET SALES - Disaggregate sales by major source (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Disaggregation of revenue: | ||
Net sales | $ 78,375 | $ 59,119 |
Boats and accessories | ||
Disaggregation of revenue: | ||
Net sales | 77,259 | 58,222 |
Parts | ||
Disaggregation of revenue: | ||
Net sales | $ 1,116 | $ 897 |
NET SALES - Disaggregate revenu
NET SALES - Disaggregate revenue by location (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Disaggregation of revenue: | ||
Net sales | $ 78,375 | $ 59,119 |
Domestic | ||
Disaggregation of revenue: | ||
Net sales | 74,364 | 55,732 |
International | ||
Disaggregation of revenue: | ||
Net sales | $ 4,011 | $ 3,387 |
NET SALES - Timing of revenue r
NET SALES - Timing of revenue recognition (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Disaggregation of revenue: | ||
Net sales | $ 78,375 | $ 59,119 |
Products transferred at point in time | ||
Disaggregation of revenue: | ||
Net sales | 78,375 | 59,119 |
Products transferred over time | ||
Disaggregation of revenue: | ||
Net sales | $ 0 | $ 0 |
NET SALES - Deferred revenue (D
NET SALES - Deferred revenue (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Accrued expenses and other liabilities | ||
Disaggregation of revenue: | ||
Deferred revenue | $ 1,405 | $ 1,245 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
EARNINGS PER SHARE | ||
Net income available for stockholders | $ 8,097 | $ 4,208 |
Less: Adjustments for earnings attributable to participating securities | (158) | (93) |
Net income used in calculating earnings per share | $ 7,939 | $ 4,115 |
Weighted average shares outstanding (including participating securities) | 33,958 | 33,940 |
Adjustment for participating securities | (671) | (775) |
Shares used in calculating basic and diluted earnings per share | 33,287 | 33,165 |
STOCK-BASED COMPENSATION (Detai
STOCK-BASED COMPENSATION (Details) - shares | 1 Months Ended | |
Apr. 30, 2014 | Mar. 31, 2021 | |
STOCK-BASED COMPENSATION | ||
Stock authorized (in shares) | 3,000,000 | |
Term (in years) | P10Y | |
Available for grant (in shares) | 1,379,950 |
STOCK-BASED COMPENSATION - Comp
STOCK-BASED COMPENSATION - Compensation expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
STOCK-BASED COMPENSATION | ||
Pre - tax cost | $ 553 | $ 576 |
After tax cost | $ 431 | $ 449 |
STOCK-BASED COMPENSATION - Non
STOCK-BASED COMPENSATION - Non vested RSU's (Details) - Restricted Stock | 3 Months Ended |
Mar. 31, 2021$ / sharesshares | |
Shares | |
Non-vested shares at beginning | shares | 678,220 |
Granted | shares | 189,750 |
Vested | shares | (194,400) |
Non-vested shares at ending | shares | 673,570 |
Weighted Average Grant-Date Fair Value | |
Non-vested shares at beginning | $ / shares | $ 12.89 |
Granted | $ / shares | 16.55 |
Vested | $ / shares | 10.26 |
Non-vested shares at ending | $ / shares | $ 14.68 |
STOCK-BASED COMPENSATION - Fair
STOCK-BASED COMPENSATION - Fair value (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Restricted Stock | ||
Stock-based compensation | ||
Fair value, shares vested | $ 3,168,000 | $ 3,234,000 |
STOCK-BASED COMPENSATION - Othe
STOCK-BASED COMPENSATION - Other Information (Details) - Restricted Stock - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Stock-based compensation | ||
Unrecognized compensation cost related to non-vested restricted shares | $ 9,557,000 | |
Unrecognized compensation cost related to non-vested restricted shares recognized period | 4 years | |
Tax benefits for compensation tax deductions in excess of compensation expense | $ 285,000 | $ 287,000 |
WARRANTY COSTS AND OTHER CONT_3
WARRANTY COSTS AND OTHER CONTINGENCIES - Warranty Costs (Details) | 3 Months Ended |
Mar. 31, 2021 | |
Warranty Costs: | |
Warranty Term (in years) | 1 year |
Termination period after date of purchase (in years) | 5 years |
Second subsequent owner | |
Warranty Costs: | |
Warranty Term (in years) | 1 year |
Hull warranty term (in years) | 5 years |
Minimum | |
Warranty Costs: | |
Additional items warranty term (in years) | 1 year |
Maximum | |
Warranty Costs: | |
Additional items warranty term (in years) | 5 years |
Chaparral | |
Warranty Costs: | |
Structural deck warranty term (in years) | 5 years |
Termination period after date of purchase (in years) | 5 years |
WARRANTY COSTS AND OTHER CONT_4
WARRANTY COSTS AND OTHER CONTINGENCIES - Analysis of warranty accruals (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Warranty accruals: | ||
Balance at beginning of period | $ 5,030 | $ 5,410 |
Less: Payments made during the year | (923) | (767) |
Add: Warranty provision for the current year | 922 | 721 |
Changes to warranty provision for prior years | 124 | 50 |
Balance at March 31 | $ 5,153 | $ 5,414 |
WARRANTY COSTS AND OTHER CONT_5
WARRANTY COSTS AND OTHER CONTINGENCIES- Repurchase Obligations (Details) $ in Millions | Mar. 31, 2021USD ($) |
Repurchase obligations | |
Total purchase obligation | $ 9.6 |
Floor plan lender one | |
Repurchase obligations | |
Total purchase obligation | 7 |
Additional floor plan lenders | |
Repurchase obligations | |
Total purchase obligation | $ 2.6 |
BUSINESS SEGMENT INFORMATION (D
BUSINESS SEGMENT INFORMATION (Details) | 3 Months Ended |
Mar. 31, 2021segment | |
BUSINESS SEGMENT INFORMATION | |
Number of reportable segments | 1 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
INVENTORIES | ||
Raw materials and supplies | $ 22,651 | $ 21,754 |
Work in process | 12,349 | 11,378 |
Finished goods | 10,929 | 9,178 |
Total inventories | $ 45,929 | $ 42,310 |
INCOME TAXES (Details)
INCOME TAXES (Details) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
INCOME TAXES | ||
Effective tax rate (as a percent) | 19.30% | 14.40% |
EMPLOYEE BENEFIT PLANS - Compon
EMPLOYEE BENEFIT PLANS - Components of net periodic cost (benefit) (Details) - Retirement Income Plan - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
EMPLOYEE BENEFIT PLANS | ||
Interest cost | $ 37 | $ 58 |
Expected return on plan assets | (72) | (73) |
Amortization of net losses | 18 | 24 |
Net periodic cost (benefit) | $ (17) | $ 9 |
EMPLOYEE BENEFIT PLANS (Details
EMPLOYEE BENEFIT PLANS (Details) - USD ($) | 1 Months Ended | 3 Months Ended | ||
Oct. 31, 2020 | Mar. 31, 2021 | Dec. 31, 2020 | Mar. 31, 2020 | |
Defined Benefit Plan Disclosure [Line Items] | ||||
Vested balance age | 59 years 6 months | |||
SERP | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Defined Benefit Plan, Net Periodic Benefit Cost (Credit), Gain (Loss) Due to Settlement | $ 600,000 | |||
Fair value of plan assets | $ 10,851,000 | 10,622,000 | ||
Trading (losses) gains related to the SERP assets | 63,000 | $ 1,078,000 | ||
Pension And Other Postretirement Defined Benefit Plans Liabilities Deferrals Net of Distribution Stated at Fair Value | (13,209,000) | |||
Liabilities deferrals net of distribution stated at fair value | $ 12,524,000 | |||
Change in fair value of liability unrealized gains | $ 163,000 | |||
Change in fair value of retirement plan liability of unrealized gains (loss)" | $ (1,427,000) |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Dec. 31, 2020 | |
Fair value transfers between levels | ||
Transfers from Level 1 to Level 2 | $ 0 | |
Transfers from Level 2 to Level 1 | 0 | |
Transfers into Level 3 | 0 | |
Transfers out of Level 3 | 0 | |
SERP | ||
Fair value transfers between levels | ||
Fair value of plan assets | $ 10,851,000 | $ 10,622,000 |
ACCUMULATED OTHER COMPREHENSI_3
ACCUMULATED OTHER COMPREHENSIVE LOSS (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
AOCI Roll Forward | ||
Balance | $ (1,947) | $ (2,748) |
Change during the period ended | ||
Before-tax amount | 128 | |
Tax provision | (28) | |
Reclassification adjustment, net of taxes | ||
Amortization of net loss | 14 | 19 |
Total activity for the period | 14 | 119 |
Balance | (1,933) | (2,629) |
Pension Adjustment | ||
AOCI Roll Forward | ||
Balance | (1,947) | (2,748) |
Change during the period ended | ||
Before-tax amount | 128 | |
Tax provision | (28) | |
Reclassification adjustment, net of taxes | ||
Amortization of net loss | 14 | 19 |
Total activity for the period | 14 | 119 |
Balance | $ (1,933) | $ (2,629) |
SUBSEQUENT EVENT (Details)
SUBSEQUENT EVENT (Details) - Subsequent Event | Apr. 27, 2021$ / shares |
Subsequent Event. | |
Regular cash dividend Payable, Amount Per Share | $ 0.12 |
Dividends payable, date declared | May 10, 2021 |
Dividend payable, date to be payable | Jun. 10, 2021 |