Marine Products Corporation (NYSE:MPX) Q4 2022 Earnings Call Transcript

Craig Kennison: Yes, maybe lastly, I was curious, where are you still seeing supply chain surprises, if you will?

Ben Palmer: It’s a great question, and we talk about it often, and it really varies. It’s kind of maybe not day to day, but it’s week to week. Sometimes it can be day to day, but it’s the same old things, sometimes it’s engines, wiring harnesses and controls, gauges…

Jim Landers: Windshields.

Mike Schmit: Windshields.

Ben Palmer: Windshields. It’s a lot of the same sort of things, but it’s just not constant, which is what makes it really challenging. And I’m sure you’ve heard stories from other people as well. There’s not really anything new that’s come along and all the things that have been a problem from time to time continue to creep up. I think, toilets has been an issue.

Jim Landers: Yes.

Ben Palmer: So

Jim Landers: We had a glue shortage, but that’s now resolved.

Ben Palmer: Yes, that’s right, a little problem there.

Jim Landers: Yes, adhesive.

Ben Palmer: Right.

Craig Kennison: Got it.

Ben Palmer: Kind of more of the same old, same old, unpredictable.

Craig Kennison: Unpredictable. Yes. Well, it seems like you’re making progress there, which is great. I guess, one more question, if I could. Since dealers have struggled to get inventory of your boats and, frankly, every other brand out there, I imagine you’ve not been pursuing the addition of additional distribution. And so, I’m wondering like as your production starts to normalize, as dealers start to rebuild inventories, those core dealers become happy and they’re set. Is there an opportunity for you to expand your dealer network? Is that something that may be a dormant strategy that could reignite as production normalizes?

Ben Palmer: Well, let me answer or provide the following. We’ve been very straightforward with our dealers and our strategy has been — our team has adopted the strategy, which I think is very, very smart that we have not tried — we have not catered to particular dealers. We said we like our dealer network. It’s key to us. It’s important to us. They’re all important to us in the geographic regions where they are. So, we have allocated our production, right? We have the amount of production we’re able to generate and we’re working with the dealers to allocate that production out, and it’s very, very similar to what historical deliveries have been from a percentage basis to those dealers. So, we have not taken away from our smaller dealers and tried to direct significantly more production to the larger dealers.

We think that’s fair and appropriate. I think that has served us well and I think that will serve us well into the future. Your question is a good one, and you’re right. We have — we are always, where necessary, where we have a dealer that bows out or whatever, we are normally prepared to with another dealer to insert into an open spot from a geographic perspective. So — but our dealers are loyal to us and we try to be loyal to them. And allocating out our production is just one example of that loyalty that I think has and will serve as well.

Mike Schmit: And, I guess, I’d just add, our main focus right now is to take care of our existing dealer network. So, we don’t really have a focus on expanding that at this time. So right now, just getting through the remaining supply chain issues, making sure their inventories are up. So that’s really our main focus right now, taking care of our existing dealer network.

Ben Palmer: Yes, until there’s — until — if and until there’s any pushback from dealers saying, I have enough, right, and if we can’t redirect those to other existing dealers, so until existing dealers says, no more, then we have to decide, is there additional geographic areas, and there’s not significant ones, but there may be very selected opportunities to direct some available production. But at this point in time, our dealers are saying, send me as many as you can.