Marine Products Corporation (NYSE:MPX) Q4 2023 Earnings Call Transcript

Page 3 of 3

Craig Kennison: Great, thank you. And then I think you had mentioned your strong balance sheet and the desire to expand the portfolio if acquisition opportunities become available. I’m curious where you see, I guess, holes in your portfolio or opportunities to expand your portfolio, are there boat categories where you have particular interest?

Ben Palmer: Yeah, when we think about — so many factors that go into that decision. Certainly, we want a good company, a good manufacturer, a quality manufacturer. We certainly want to do something that’s complementary. We don’t want to overlap significantly somebody that we could leverage our really strong and dealer network that would appeal to that dealer network. Obviously, we don’t have an aluminum product. That’s something that I think would be attractive to us and attractive to our dealer network. We have the opportunity to leverage that and create some benefits. And then on the fiberglass side, certainly in terms of sizes, we could do some larger boats. I don’t know that our first choice would be to go significantly larger, but we think we’re nicely positioned in the offshore market, perhaps a larger offshore brand.

That would probably be the two primary ones that I think, again, would both allow us to leverage our dealer network and utilize some of the cash that we have, and take advantage of the fact that we are able to generate a lot of cash. So we do want to invest that prudently. And again, as we indicated, if we’re not able to find something, we’ll return cash to shareholders in some form or fashion.

Mike Schmit: And more specifically on the aluminum pontoons, is one that we see a lot of progress that would be — there’s recent — in recent months demand slowed, but just kind of historically over the last five, 10 years demand for pontoons seems to be increasing at a higher rate than the rest of the industry. So that’s a very interesting area.

Craig Kennison: Thank you. And just looking at your balance sheet, a lot of cash, no debt. How much debt are you willing to take on while you’re still comfortable with your cash flow profile?

Ben Palmer: We are “Not afraid of debt”. And we would have other options. Obviously, we could raise equity through secondary, so forth. But we have sales today over the last 12 months, approaching $400 million. So I think we could easily, just to pick a number, I mean, we could — $100 million or $200 million I think would not be a problem with our balance sheet and our cash flow generating capability and adding a quality company that’s generating cash itself, it would not be a problem at all to initially fund an acquisition if it needed to be funded with cash. Or depend on the size of the acquisition, right, that we were doing. But $100 million or $200 million would not be a problem.

Craig Kennison: Great. Hey, thank you.

Ben Palmer: Thank you, Greg.

Operator: [Operator Instructions] There are no further questions at this time. I would like to turn the call back over to our CEO, Ben Palmer.

Ben Palmer: Okay. Well, thank you very much, everyone, for being on the call, and look forward to catching up with you later. Take care.

Operator: Ladies and gentlemen, that concludes today’s call. Thank you all for joining. You may now disconnect.

Follow Marine Products Corp (NYSE:MPX)

Page 3 of 3