Analysts see MarineMax weathering weak market

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Analysts were not surprised by MarineMax’s earnings report released Thursday, with one saying the company was managing well despite weak market conditions.

“We think MarineMax is managing well through the industry downturn, which we expect to continue into 2009, albeit at a lesser rate than 2008,” said Laura Richardson of BB&T Capital Markets, who maintained the hold rating on MarineMax stock, which has “potential for patient investors.”

Factoring in store closings and other information, BB&T maintained its fourth quarter 2008 earnings per share estimate at 15 cents.

“With steps in process to manage expenses and inventories, we think investor concern about MarineMax losing financing should be greatly lessened,” Richardson wrote. “In tangible book value, we think strengths in MarineMax’s financial position are more apparent to investors now, as we think they have been to lenders.”

Revenue at MarineMax declined by more than $108 million in the third quarter, which ended June 30, compared to the same period of 2007.

Revenue was $271.3 million for the quarter, compared with $379.8 million for the comparable quarter last year. Same-store sales declined about 27 percent compared with a 9 percent decrease in the comparable quarter last year.

Net loss for the quarter was $113.3 million, or $6.15 a share.

RBC Capital Markets estimates a fiscal 2008 earnings per share loss of 29 cents versus a loss of 44 cents previously anticipated. The fiscal 12009 forecast is unchanged at a loss of 13 cents.

“Trading at a 50 percent discount to tangible book, we believe this is a cheap stock,” wrote RBC’s Ed Aaron. “However, we need to see negative trends stop accelerating and inventory improve before revisiting (MarineMax) as a 12-month investment idea.”

On Thursday’s conference call with analysts, MarineMax president, chairman and CEO William McGill, Jr. called the economic climate “one of the most challenging periods on record.”

MarineMax outlined plans Thursday to close seven stores, in addition to three previously closed this year. Officials said they did not anticipate market share being affected, as these closings would strengthen the position of neighboring stores.

While the company plans to order about 40 percent fewer 2009 models from its manufacturers, it noted that the 2009 models have been slow to come in because of plant shutdowns. This has helped MarineMax move some older inventory, officials said.

— Beth Rosenberg
b.rosenberg@tradeonlytoday.com

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