Q2 2024 Marine Products Corp Earnings Call
Good morning, and thank you for joining us for Marine Products Corporation's 2nd Quarter 2024 Financial Earnings Conference Call.
Operator: for this session's 2nd Quarter 2024 Financial Earnings Conference Call. Today's call will be hosted by Ben Palmer, President and CEO, and Mike Schmit, Chief Financial Officer. At this time, all participants are in listen-only mode. Following the presentation, we will conduct a question-and-answer session. Instructions will be provided at the time for you to queue up for your questions. I would like to advise everyone that this conference call is being recorded. I will now turn the call over to Mr. Schmit.
Speaker Change: Today's call will be hosted by Ben Palmer, President and CEO , and Mike Schmit, Chief Financial Officer.
Speaker Change: At this time, all participants are in listen-only mode. Following the presentation, we will conduct a question and answer session. Instructions will be provided at the time for you to queue up for your questions.
Speaker Change: I would like to advise everyone that this conference call is being recorded. I will now turn the call over to Mr. Schmit.
Michael L. Schmit: Thank you and good morning. Before we begin, I want to remind you that some of the statements that will be made on this call could be forward-looking in nature and reflect a number of known and unknown risks. Please refer to our press release issued today, along with our 2023 10-K and other public filings that outline these changes, all of which can be found at MarineProductsCorp.com. In today's earnings release and conference call, we'll be referring to several non-GAAP measures of operating performance and liquidity.
Michael L. Schmit: We believe these non-gap measures allow us to compare performance consistently over various periods. Our press release issued today and our website contain reconciliations of these non-GAAP measures to the most directly comparable GAAP measures. I will now turn the call over to our President and CEO, Ben Palmer, and thank you all.
Michael L. Schmit: Thank you and good morning.
Michael L. Schmit: Before we begin, I want to remind you that some of the statements that will be made on this call could be forward-looking in nature and reflect a number of known and unknown risks.
Michael L. Schmit: Please refer to our press release issued today, along with our 2023 10-K and other public filings that outline those risks, all of which can be found at MarineProductsCorp.com.
Michael L. Schmit: In today's earnings release and conference call, we'll be referring to several non-GAAP measures of operating performance and liquidity.
Michael L. Schmit: We believe these non- GAAP measures allow us to compare performance consistently over various periods.
Michael L. Schmit: Our press release issued today and our website contain reconciliations to these non- GAAP measures to the most directly comparable GAAP measures .
Michael L. Schmit: I will now turn the call over to our President and CEO , Ben Palmer. Thank you, Mike.
Ben M. Palmer: And thank you all for joining our call. Second quarter results were again stable from a sequential standpoint compared to first quarter, but they remained negative compared to the prior year as we had anticipated. Key themes and headwinds for the boat manufacturing industry remain the same, and Marine Products is no exception. We and our competitors are still grappling with dealer hesitation to aggressively order boats as they attempt to clear inventory from their showroom floor.
Ben M. Palmer: And thank you all for joining our call. Second quarter results were again stable from a sequential standpoint compared to first quarter, however remained negative compared to prior year as we had anticipated.
Speaker Change: The key themes and headwinds for the boat manufacturing industry remain the same and Marine Products is no exception.
Ben M. Palmer: We and our competitors are still grappling with dealer hesitation to aggressively order boats as they attempt to clear inventory from their showroom floors. Compounding the excess inventory issue are interest rates that remain relatively high, keeping up with pressure on dealer carrying costs.
Ben M. Palmer: Compounding the excess inventory issue are interest rates that remain relatively high, keeping up with pressure on dealer carrying costs. We are being proactive in managing costs and production schedules during this soft period, but simply put, we believe these challenges will continue to hamper our financial results in the near future. As we said last quarter, we've reduced our production schedules to align with lower demand. We continue to use this time to undertake projects to improve plant operations so that we will operate even more efficiently once normalized demand returns.
Ben M. Palmer: We are being proactive in managing costs and production schedules during this soft period. But simply put, we believe these challenges will continue to hamper our financial results in the near term.
Ben M. Palmer: As we said last quarter, we've reduced our production schedules to align with lower demand. We continue to use this time to undertake projects to improve plant operations so that we will operate even more efficiently once normalized demand returns.
Ben M. Palmer: With regard to dealer inventory, I'll echo my comments from last quarter that we remain comfortable with the level of our products in the field. But we continue to hear that high inventories are still an issue for many dealers, often in categories where we do not compete. After several quarters of increasing field inventories, we were pleased that our field inventory declined over 15% in the second quarter.
Ben M. Palmer: With regard to dealer inventory, I'll echo my comments from last quarter, that we remain comfortable with the level of our products in the field, but we continue to hear that high inventories are still an issue for many dealers, often in categories where we do not compete.
Ben M. Palmer: After several quarters of increasing field inventories, we were pleased our field inventory declined over 15% in the second quarter.
Ben M. Palmer: We continue to support our dealers with promotions to help them stimulate demand, and we have extended our programs as we believe maintaining these incentives is crucial to motivate consumers in light of elevated financing. As many of you are closely watching the interest rate outlook, we are encouraged that recent economic commentary suggests we are nearing some interest rate relief. While we don't believe a single Fed move to cut rates will have a dramatic impact on demand, it would be a first step towards potential additional future cuts, and Improved Cinema believes that financing costs could trend lower.
Ben M. Palmer: We continue to support our dealers with promotions to help them stimulate demand and we have extended our programs as we believe maintaining these incentives are crucial to motivate consumers in light of elevated financing costs.
Ben M. Palmer: As many of you are closely watching the interest rate outlook, we are encouraged that recent economic commentary suggests we are nearing some interest rate relief.
Ben M. Palmer: While we don't believe a single Fed move to cut rates will have a dramatic impact on demand, it would be a first step towards potential additional future cuts and improved sentiment that financing costs could trend lower.
Ben M. Palmer: As we are launching our 2025 model year, we're excited to host our dealers at our annual conference in Key Largo in August. This year we have particular cause for celebration as we will mark the Chaparral brand's 60th anniversary. Chaparral has been a leading pleasure boat brand for decades, and we believe its reputation for innovation, design, customer satisfaction, and value is second to none. We can't wait to celebrate with our dealers, connect with them to see how we can support their businesses in the year ahead, and introduce some exciting changes for the new model.
Speaker Change: As we are launching our 2025 model year, we're excited to host our dealers at our annual conference in Key Largo in August . This year we have particular calls for celebration as we will mark the Chaparral brand's 60th anniversary.
Speaker Change: Japperell has been a leading pleasure boat brand for decades and we believe its reputation for innovation, design, customer satisfaction, and value are second to none.
Speaker Change: We can't wait to celebrate with our dealers, connect with them to see how we can support their businesses in the year ahead, and introduce some exciting changes for the new model year.
Ben M. Palmer: Without stealing the thunder from our conference, we can surely say we are bringing forth a host of incremental improvements and options and new models for both Chaparral and Rabaulo boats as a result of our consistent R&D and innovation program. We take great pride in our efforts to listen to consumer and dealer feedback when designing our boats. We approach each model year as a new opportunity to refine our offerings and give customers features, colors, options, materials, and designs that maintain the high standards they are accustomed to from our brand. Again, to our dealers out there listening to the call, we look forward to seeing you in August and continuing our collaborative partnership. Now, Mike will provide an overview of the financial results.
Speaker Change: Without stealing the thunder from our conference we can surely say we're bringing forth a host of incremental improvements and options and new models for both Chaparral and Ravallo boats as a result of our consistent ROD and innovation programs.
Speaker Change: We take great pride in our efforts to listen to consumer and dealer feedback when designing our boats.
Speaker Change: We approach each model year as a new opportunity to refine our offerings and give customers features, colors, options, materials, and designs that maintain the high standards they are accustomed to from our brands.
Speaker Change: Again, to our dealers out there listening to the call, we look forward to seeing you in August and continuing our collaborative partnerships.
Speaker Change: Now Mike will provide an overview of the financial results.
Michael L. Schmit: For the second quarter of 2024, compared to the second quarter of 2023, sales were down 40% to $69.5 million, driven by a 41% decrease in both sold, price, and mix netted to a positive 1%. Of note, last year's second quarter sales of $116 million were the second highest in the company's history.
Michael L. Schmit: Thanks, Ben.
Michael L. Schmit: For the second quarter of 2024 compared to the second quarter of 2023, sales were down 40% to $69.5 million, driven by a 41% decrease in votes sold. Price and mix netted to a positive 1%.
Michael L. Schmit: Of note, last year's second quarter sales of $116 million were the second highest in the company's history.
Michael L. Schmit: While we typically focus on year-over-year comparisons, I'd also like to note that sales were sequentially stable with the first quarter of 2024.
Michael L. Schmit: I'd also like to note that sales were sequentially stable with the first quarter of 2024. Gross profit decreased 54% to $13.2 million, with a gross profit margin of 18.9%, down 580 basis points versus last year's very strong results. Despite significant cost reduction efforts and paring back production schedules to minimize variable costs, we are being impacted by underabsorption of certain fixed costs. SG&A expenses were $7.4 million in the quarter, down 39% or $4.7 million compared to last year's second quarter. These expenses are due to costs that vary with sales and profitability, such as incentive compensation, sales commissions, and warranty expenses.
Michael L. Schmit: Gross profit decreased 54% to $13.2 million with a gross profit margin of 18.9% down 580 basis points versus last year's very strong results.
Michael L. Schmit: Despite significant cost reduction efforts and paring back production schedules to minimize variable costs, we are being impacted by underabsorption of certain fixed costs.
Michael L. Schmit: SG&A expenses were $7.4 million in the quarter, down 39% or $4.7 million compared to last year's second quarter.
Michael L. Schmit: These expenses decreased due to costs that vary with sales and profitability, such as incentive compensation, sales commissions, and warranty expenses.
Michael L. Schmit: Diluted EPS was $0.14 in the second quarter, down from $0.42 last year. The reported EPS of $0.14 is $0.02 lower for the second quarter than if you simply divided net income by the average share outstanding. This difference is a result of our calculating EPS under the two-class method, which is required by GAAP, and was primarily triggered by our second quarter special dividend.
Michael L. Schmit: Diluted EPS was $0.14 in the second quarter, down from $0.42 last year.
Speaker Change: The reported EPS of $0.14 is $0.02 lower for the second quarter than if you simply divided net income by the average shares outstanding.
Speaker Change: This difference is a result of our calculating EPS under the two-class method which is required by GAAP and was primarily triggered by our second quarter special dividend.
Michael L. Schmit: This is footnoted in our earnings release table. EBITDA was $6.5 million, down from $17.1 million, with the EBITDA margin decreasing 540 basis points to 9.3%. While this margin was down versus the prior year, it did increase sequentially from 8.5% in the first quarter of 2020. Year-to-date, we have generated operating cash flow of $20 million, and free cash flow of $18 million. CAPEX was $1.7 million and is expected to pick up in the second half of the year with our planned solar panel installation at our manufacturing facility in South Georgia. We expect CAPEX to be approximately $5 million for the full year. I'll now turn it back over to Ben for a few closing remarks. Thanks, Mike.
Speaker Change: This is footnoted in our earnings release table.
Speaker Change: EBITDA was $6.5 million, down from $17.1 million, with EBITDA margin decreasing 540 basis points to 9.3%.
Speaker Change: While this margin was down versus prior year, it did increase sequentially from 8.5% in the first quarter of 2024.
Speaker Change: Year-to-date, we have generated operating cash flow of $20 million and free cash flow of $18 million.
Speaker Change: CAPEX was $1.7 million and is expected to pick up in the second half of the year with our planned solar panel installation at our manufacturing facility in South Georgia.
Speaker Change: We expect CapEx to be approximately $5 million for the full year. I'll now turn it back over to Ben for a few closing remarks. Thanks, Mike.
Ben M. Palmer: I want to acknowledge that Marine Products and the rest of the marine industry are going through a challenging period following recent years of unparalleled industry demand. We know these declines have presented significant hurdles for our employees, dealers, and, of course, shareholders.
Ben M. Palmer: I want to acknowledge that Marine Products and the rest of the marine industry are going through a challenging period following recent years unparalleled industry demand.
Ben M. Palmer: We know these declines have presented significant hurdles for our employees, dealers, and of course, shareholders.
Ben M. Palmer: We want to assure all our stakeholders that we are taking actions to preserve the health of our business, managing conservatively and with discipline, and making sure Marine Products is positioned for success when market demand improves. As we navigate this environment, we have remained debt-free and accumulated significant cash. As a result, we have returned a substantial amount of cash to our investors here today through both our regular $0.14 per share dividends and the $0.70 special dividend we paid out in the second quarter.
Ben M. Palmer: We want to assure all our stakeholders we are taking actions to preserve the health of our business, managing conservatively and with discipline, and making sure Marine Products is positioned for success when market demand improves.
Ben M. Palmer: As we navigate this environment, we have remained debt-free and accumulated significant cash.
Ben M. Palmer: As a result, we have returned a substantial amount of cash to our investors here today through both our regular $0.14 per share dividends and the $0.70 special dividend we paid out in the second quarter.
Ben M. Palmer: Even following these distributions, we ended the second quarter with over $55 million in cash on the balance. This ensures ample liquidity to weather the current difficult patch in this cycle, make organic investments in the business, and maintain the flexibility to pursue strategic acquisitions. However, as we noted last quarter, over time, we do not execute on transactions. If we do not execute on transactions, we will look at further actions to return capital to our investors.
Ben M. Palmer: Even following these distributions, we ended the second quarter with over $55 million in cash on the balance sheet.
Ben M. Palmer: This ensures ample liquidity to weather the current difficult patch in this cycle, make organic investments in the business, and maintain the flexibility to pursue strategic acquisitions.
Ben M. Palmer: However, as we noted last quarter, over time we do not execute on transactions. If we do not execute on transactions, we will look at further actions to return capital to our investors.
Ben M. Palmer: So before we turn the call over to questions, I'd like to thank our employees for their contributions every day and our dealers who continue to partner with us for mutual success. We're excited about model year 2025 and looking forward to our upcoming dealer conference in August. With that, Operator, please open the line for questions.
Speaker Change: So before we turn the call over for questions, I'd like to thank our employees for their contributions every day and our dealers who continue to partner with us for mutual success. We're excited about model year 2025 and looking forward to our upcoming dealer conference in August .
Speaker Change: With that, operator, please open the line for questions.
Operator: Thank you so much, Mr. Palmer. We are now opening the floor to questions and answers. If you'd like to ask a question, please press star 1. Again, that's star 1.
Speaker Change: So much, Mr. Palmer. We are now opening the floor for question and answer session. If you'd like to ask a question, please press star 1. Again, that's star 1. We will pause for a brief moment to wait for the questions to come in.
Operator: We will pause for a brief moment to wait for the questions to come in. We have our first question from Griffin Bryan from DA Davidson. Your line is now open.
Speaker Change: We have our first question from Griffin Bryan from DA Davidson. Your line is now open.
Ben M. Palmer: Yeah, good morning, guys. Can you kind of talk about the cadence of retail throughout the quarter and why maybe we saw such a big drop in June, and then maybe speak to whether those trends we saw in June are carrying over into July.
Griffin Bryan: Yeah, good morning guys. So can you just kind of talk about the cadence of retail throughout the quarter and why maybe we saw such a big drop in June and then maybe speak to if those trends we saw in June are carrying over into July .
Ben M. Palmer: Griffin, this is Ben. We, as we indicated, our field inventory dropped during the second quarter. You know, there are reporting delays between actual sales and when those get reported with registration information and things like that, but it wasn't necessarily apparent from our perspective, of course, we're one removed from the actual retail sale, but we saw that it, you know, it did have strength relative to the first quarter, which is quite typical.
Speaker Change: Griffin, this is Ben. We, as we indicated, our field inventory dropped.
Speaker Change: During the second quarter, you know, there's there there are reporting delays between actual sales and when those get reported with registration information and things like that, but, but it was.
Speaker Change: We didn't necessarily see, from our perspective, of course, you know, one removed from the actual retail sale.
Speaker Change: But we saw that it's...
Ben M. Palmer: And we did see that we did, as I indicated again, repeating myself, we did see our field inventory decline. Obviously, there was a difference between the amount of boats that were going out of retail versus the number of boats that we were shipping to our dealer. So, we were pleased with that, and the normal pattern is that sales begin to moderate, you know, after the spring and early summer selling season. So, we would expect that to be a normal pattern, but we haven't seen any, for our results. We haven't seen a significant, unusual change in the sales data.
Speaker Change: It did have strength relative to the first quarter, which is quite typical, and we did see that. We did, as I indicated again, repeating myself, we did see our field inventory decline. Obviously, there was a difference between the amount of...
Speaker Change: votes that were going out at retail versus the number of votes that we were shipping to our dealers. So we were pleased with that.
Speaker Change: You know, and the normal pattern is that sales begin to moderate, you know, after the spring and early summer selling season. So, we would expect that to be a normal pattern, but we haven't seen any.
Speaker Change: For our results, we haven't seen a significant, unusual change in the sales data.
Ben M. Palmer: Got it. And then, you know, what are you guys hearing from dealers regarding their appetite to take on some of the new model year 25 units? You know, obviously, there's still quite a bit of de-stocking that needs to happen within the industry. So I'm just kind of curious what the strategy is there for both, you know, you guys and the dealers.
Speaker Change: Got it. And then, you know, what are you guys hearing from dealers regarding their appetite to take on some of the new model year 25 units? You know, obviously, there's still quite a bit of de-stocking that needs to happen within the industry. So I'm just kind of curious what the strategy is there for both, you know, you guys and the dealers.
Ben M. Palmer: Well, we are following our consistent policy of, you know, working with our dealer partners to we have various order points during the year that help us and the dealers communicate and collaborate to collect orders for the coming few weeks, several weeks, and a few months so that we can plan our production. So we continue to follow that process.
Speaker Change: Well, we are following our consistent policy of working with our dealers. We have various order points during the year that help us and the dealers communicate and collaborate. For more information visit www.marineproducts.com
Speaker Change: to collect orders for the coming few weeks, several weeks, and a few months so that we can plan our production.
Ben M. Palmer: We are building only two firm orders from dealers, so that's going well from that perspective, but we're not building boats on spec or anything like that. So our cadence of production is tied to the number of orders we have in hand. Our dealers, I think they would love to order more of the 25 model year boats, but we understand they're mindful of their inventory that they already have in place, so we're all trying to work to balance that out appropriately between now and next spring selling season.
Speaker Change: We continue to follow that process. We are...
Speaker Change: We are building only two firm orders from dealers, so that's going well from that perspective, but we're not, you know, we're not building.
Speaker Change: Votes on spec or anything like that. So our cadence of production is tied to the number of orders we have in hand. Our dealers are, you know, would, I think they would love to order.
Speaker Change: Oh.
Speaker Change: More of the 25 model year boats, but, you know, and we understand, you know, they're mindful of their inventory that they already have in place. So, so we're all trying to work to.
Speaker Change: balance that out appropriately between now and next spring selling season.
Ben M. Palmer: So we understand that, but we're working closely with the dealers. They've been, as always, great to work with, and they understand our model and approach. So far, so good, but we'll just have to be patient and let demand pick up, take care of the overall inventory that they have in the field, and hopefully, in the coming months, we'll be able to return to a little bit more of a normal order pattern and, therefore, more of a normal production level.
Speaker Change: We understand that, but we're working closely with the dealers.
Speaker Change: They've been, as always, great to work with.
Speaker Change: They understand our model and approach and...
Speaker Change: So far so good, but we'll just have to be patient and let the man pick up take care of overall inventory that they have in the field and
Speaker Change: And hopefully in the coming months, we'll be able to return to a little bit more of a normal order pattern and therefore more of a normal production levels.
Ben M. Palmer: Got it. And then, in terms of promotions, is there a possibility that these could get even more aggressive? Or is it more just kind of extending the timeline of these offerings?
Speaker Change: Got it. And then in terms of promotions, is there a possibility that these could get even more aggressive or is it more just kind of extending the timeline of these offerings?
Ben M. Palmer: We, from time to time, will tweak the programs, but we think the program is appropriate and attractive. That's a balancing act.
Speaker Change: We, from time to time, will tweak the programs, but we think the program is appropriate and attractive. That's a balancing act. We at this point aren't panicking and feel that we need to do anything extraordinary. We just think it will take some time for it to work through.
Ben M. Palmer: We at this point aren't panicking and feel that we need to do anything extraordinary. We just think it will take some time for it to work through. And we think we're at a reasonable, steady state right now, offering those programs to support sales, obviously focused on the older model year boats, but we're comfortable with where they are right now.
Speaker Change: And we think we're at a reasonable, steady state right now, and we are continuing the program. We will continue to
Speaker Change: offer those programs to support sales obviously focused at the at the older model year boats but we're comfortable with with where they are right now
Ben M. Palmer: Great, well then, what data points would give you guys confidence to bring back production to a more normalized level, and is that something that's even possible this year?
Speaker Change: Great, well then, you know, what data points would give you guys confidence to bring back production to a more normalized level? And, you know, is that something that's even possible this year?
Ben M. Palmer: Yeah I think you know we don't do spec boats so for us the data point would be getting the orders and from our dealers so yeah I think when we meet with our dealers next month at our dealer conference we'll get a lot of great data points from them on how things are going and what they're seeing and we typically get a lot of orders for the new models at that conference and we're expecting it to be a really large successful conference as we celebrate the 60th anniversary of the Chaparral brand this year so we're expecting there to be a lot of enthusiasm around some of the models and we're expecting to get more orders then as well so you know it's really just the orders we get directly from the dealers rather than you know anything else.
Speaker Change: Yeah, I think, you know, we don't do spec boats, so for us, the data point would be getting the orders in from our dealers. So, you know, I think when we meet with our dealers next month at our dealer conference, we'll get a lot of great data points from them.
Speaker Change: on how things are going and what they're seeing. And we typically get a lot of orders for the new models at that conference. And we're expecting it to be a really large successful conference as we celebrate the 60th anniversary of the Chaparral Brand this year. So.
Speaker Change: We're expecting there to be a lot of enthusiasm around some of the models and we're expecting to get more orders then as well. So, you know, it's really just the orders we get directly from the dealers rather than, you know, anything else.
Ben M. Palmer: Obviously, the third and fourth calendar quarters are a seasonally slower period, so I'm not expecting at this point that retail demand is going to pick up during that period. So it's going to be dealers projecting forward, looking at the status of their current inventory and projecting forward to next spring. We all work collaboratively to try to smooth out our production somewhat over a particular model year. They realize, we realize, and they realize that all the boats that are needed for next spring and summer can't be delivered in the first quarter or very early in the second quarter. So it has to be smoothed out. They understand that.
Speaker Change: Obviously, the third and fourth calendar quarters are a seasonally slower period, so I'm not expecting at this point that retail demand is going to pick up during that period. So it's going to be dealers projecting forward, looking at the status of their current inventory.
Speaker Change: and projecting forward to next spring.
Speaker Change: We all work collaboratively to try to smooth out our production somewhat over a particular model year.
Speaker Change: So, they realize, we realize, and they realize that all the boats that are needed for next spring and summer can't be delivered.
Speaker Change: in the first quarter or very early in the second quarter, so it has to be smoothed out. They understand that. We have long
Ben M. Palmer: We have long relationships with the dealers, so they will have to do their projections on what they see for the selling season in the future, and we'll work together with them, accumulate up the orders we have in hand, and set our production levels accordingly. So it's a reasonable question, but we'll just have to wait and see. It's difficult to see that everybody's going to have a clear view of what next spring is going to look like in the near term. With interest rate cuts, hopefully, there'll be some enthusiasm, but I expect that people will remain somewhat conservative for the time being.
Speaker Change: relationships with the dealers, so.
Speaker Change: So...
Speaker Change: They will have to do their projections on what they see.
Speaker Change: for the selling season in the future, and, you know, we'll work together with them, accumulate up the orders we have in hand, and set our production levels accordingly. So we'll just have to, it's a reasonable question, but we'll just have to wait and see.
Speaker Change: It's going to be difficult to see that everybody's going to have a clear view of what next spring is going to look like in the near term, right? With interest rate cuts, hopefully there'll be some enthusiasm.
Speaker Change: But I expect that people will remain somewhat, you know, conservative for the time being.
Ben M. Palmer: Makes sense. Then this last one for me, you know, in terms of capital allocation, what are you guys seeing in the M&A environment, and is that something you guys would still be interested in participating in at this point in the cycle?
Speaker Change: Makes sense. Then this last one for me, you know, in terms of capital allocation, what are you guys seeing in the M&A environment, and is that something you guys would still be interested in participating in at this point in the cycle?
Ben M. Palmer: Yeah, we're definitely interested. There just aren't a lot of good companies out there that are looking to sell. I mean, I think everyone saw the valuations of a couple years ago when sales were great and, you know, wanted to give and get a high valuation, and now the projections of the overall industry are much lower. And so it's going to take some time to kind of settle in on what the new reality is and what the new kind of steady state is going forward.
Speaker Change: Yeah, we're definitely interested. There just hasn't been a lot of good companies out there that are looking to sell. I mean, I think everyone saw the valuations of a couple years ago when sales were great and, you know, wanted to give...
Speaker Change: get a high valuation, and now the projections of the overall industry are much lower. And so it's going to take some time to kind of settle in on what the new reality is and what the new...
Ben M. Palmer: So, you know, we're definitely looking. That's why we've still maintained a strong cash balance. We would love to do some M&A, but we're not going to do it for the sake of doing it. We want to make sure it's the right brand and right category for us. So we're definitely looking. There just hasn't been a lot of movement in M&A in this space.
Speaker Change: Michael Schmit, MD, MSWordDoc Word.Document.8
Speaker Change: category for us. So we're definitely looking. There just hasn't been a lot of movement in M&A in this space.
Griffin Bryan: Great, thanks guys. Best of luck in the quarter. Thank you.
Speaker Change: Great. Thanks, guys. Best of luck in the quarter.
Operator: If you'd like to ask a question, please press star 1. Again, that's star 1. Thank you. As of right now, we don't have any questions. I'd now like to hand over to Mr. Ben Palmer for final remarks.
Speaker Change: Thank you.
Speaker Change: If you'd like to ask a question, please press star 1. Again, that's star 1. Thank you.
Speaker Change: As of right now, we don't have any questions. I'd now like to hand back over to Mr. Ben Palmer for final remarks.
Ben M. Palmer: Well, thank you, everybody, for calling in and listening in and for your questions there, Griffin. Everybody I hope you have a good day and we'll hopefully connect soon. Take care.
Ben M. Palmer: Well, thank you, everybody, for calling in and listening in and for your questions there, Griffin. Everybody, hope you have a good day, and we'll hopefully connect soon. Take care.
Operator: Thank you. This concludes today's call. The conference call will be replayed on MarineProductsCorp.com within two hours following the completion of the call. You may now disconnect. Have a wonderful day.
Speaker Change: Thank you. This concludes today's call. The conference call will be replayed on MarineProductsCorp.com within two hours following the completion of the call. You may now disconnect. Have a wonderful day.