until we have more definitive signals for improved demand. Feedback from recent boat shows has been positive, with good attendance and solid interest from buyers.”
“From a macro perspective, our industry welcomed recent interest rate cuts by the Fed, but the rate outlook appears unclear with mixed signals for further relief in the near-term. These cuts helped lower floor plan carrying costs for dealers and financing costs for consumers, but buying conviction still appears modest from both groups. This has been a difficult year for the industry, but we are proud of our model year 2025 product launches and lineup improvements and our ability to exit the year in a very strong financial position. We can comfortably fund our internal growth projects, capital investments and dividends, as we continue to look for the right M&A opportunity to drive value for our shareholders,” concluded Palmer.
4Q:24 Consolidated Financial Results: Year-Over-Year (versus 4Q:23)
Net sales were $47.8 million, down 33%. The decrease in net sales was primarily due to a 39% decrease in the number of boats sold during the quarter, partially offset by positive price/mix of 6%. 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 steadily improved throughout 2024 (full year sales declined 38%) and 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.
Gross profit was $9.2 million, down 32%. Gross margin was 19.2%, up 20 basis points. The year-over-year gross margin improvement reflected effective manufacturing cost controls as well as a favorable comparison to the impact of reinstituting promotional programs in last year’s fourth quarter. Production schedules and labor costs have been adjusted to more closely align with reduced demand.
Selling, general and administrative expenses were $5.6 million, down 28%, and represented 11.6% of net sales, up 70 basis points versus prior year. The decrease in SG&A expenses was largely due to costs that vary with sales and profitability, such as incentive compensation, sales commissions and warranty expense.
Interest income of $512 thousand decreased due to lower cash balances as a result of the Company’s special dividend paid during the second quarter of 2024, coupled with lower interest rates.
Income tax benefit was $71 thousand, primarily due to tax credits related to the solar panel installation at the Company’s manufacturing site applied against the Company’s tax liability.
Net income and diluted EPS were $4.3 million and $0.12, respectively, down from $5.4 million and $0.16, respectively, in 4Q:23. Net income margin was 8.9%, up 120 basis points, primarily due to the favorable tax credit.
EBITDA was $4.4 million, down from $6.5 million. EBITDA margin was 9.2%, consistent with last year’s fourth quarter.
Balance Sheet, Cash Flow and Capital Allocation
Cash and cash equivalents were $52.4 million at the end of 2024, with no outstanding borrowings under the Company’s $20 million revolving credit facility.
