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MarineMax reports 2Q results

MarineMax today reported a slight decrease in revenue for the second quarter ending March 31, but a smaller decline in same-store sales than was reported in the same period last year.

Revenue was $110.1 million for the quarter, compared with $129.6 million for the comparable quarter last year. Same-store sales declined approximately 5 percent compared with a 41 percent decline in the comparable quarter last year.

During the quarter, the company operated with 56 stores - 18 fewer than in the prior year. At its peak in 2007, the company had 93 stores.

The net loss for the second quarter of fiscal 2010 was $6.3 million, or 29 cents per share, compared with a net loss of $20.3 million, or $1.09 per share, for the comparable quarter last year.

Included in the second-quarter fiscal 2009, net loss was approximately $900,000, or 5 cents per share, associated with store-closing costs. Additionally, during the same quarter, the company incurred losses and increased its inventory reserves for expected losses associated with brands it no longer represents, which reduced gross profit by $4.1 million, or 22 cents per share.

On March 31, inventory was $173.7 million compared with $399.1 million on March 31, 2009, a $225.4 million or 56 percent decline.

"With our successful efforts to substantially reduce our inventory levels behind us, gross margins returned to more typical levels. The margin expansion, combined with the initiatives we implemented to streamline our store base and to significantly lower our overall cost structure resulted in a greatly reduced quarterly loss when compared with the comparable quarter last year," said William H. McGill Jr., chairman, president and CEO, in a statement.

"However, our same-store sales decline is indicative of the challenging industry and economic conditions that we continue to face, reminding us that the industry recovery may likely be gradual. Poor weather also adversely affected our business during the quarter in key markets," McGill added.

In a conference call this morning with analysts, McGill said that the company is seeing higher margins more consistently and is in much better shape in that area than a year ago.

With reports that 1,400 marine dealers have failed in the last 18 months, McGill said MarineMax continues to gain market share and is a "more significant player" in the industry than it was before the recession hit.

Store traffic is up, and while the sense of urgency to buy is not there on the part of consumers, their passion for boating remains high, McGill said.

MarineMax's stock opened this morning at $11.02 per share. The retailer's 52-week high and low were $12.57 and $2.96, respectively.

Revenue was $210.6 million for the six months ending March 31, compared with $229.8 million for the comparable period last year. Same-store sales increased approximately 3 percent compared with a 46 percent decline in the comparable period last year.

Net income for the six months ending March 31 was $3.8 million, or 17 cents per diluted share, compared with a net loss of $34.6 million, or $1.87 per share, for the comparable period last year.

"We are optimistic about the future. The steps we have taken to reduce inventory and its related financing as well as our improved working capital position have resulted in a balance sheet with very strong ratios and increased flexibility," McGill said.

"This financial position and the failure of other boat retailers provides us with a competitive advantage and should allow us to capitalize on opportunities as they arise," he added. "There are signs the economy is generally improving. In addition, retail sales in many industries appear to be increasing, although the improvement has yet to be felt in the high-end, big-ticket segment."

— Beth Rosenberg

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