Orders and deposits for MarineMax at the Fort Lauderdale International Boat Show were up double digits on top of “good growth last year.”
However, getting new products from all of the company’s manufacturers, particularly core supplier Sea Ray, has remained challenging as the large supplier undergoes “a very large reinvigoration” of models and products, MarineMax CFO Mike McLamb said during a conference call discussing the company’s fiscal fourth-quarter earnings report on Tuesday.
MarineMax CEO Bill McGill told analysts that the company’s growth at the show, which ended Monday, was spread across all size ranges and manufacturers, but he said most of the 2014 sales had been of older products, which affected margins.
“If you look at most of the sales that we get in 2014, most all of it was not the new products,” McGill said. “I mean, take Sea Ray as a manufacturer. There’s like 13 new models that we’ll be seeing throughout this year. We saw a few of them last year, but most of what we were selling and we needed were products that hadn’t been refreshed for quite a few years.”
“The pressure, as you work your way through models that haven’t been refreshed for a while, it does hit margins,” McGill said.
New Sea Ray products, which have been well received at shows, as well as depletion of used and brokerage models, helped drive the turnover and increased margins on used products, McGill said.
“Because we don’t have a lot of the new stuff come in yet from our core supplier, Sea Ray, you can expect margin pressure similar to what we either had this quarter or somewhat we saw in the June quarter,” McLamb said.
As the company gets into its March quarter, it expects to have more new products to sell.
“This is a normal thing for us to be having the older models leave with the newer models coming in. We just happen to have a very large supplier who is going through a very significant reinvigoration of its models,” McLamb said.
“So far, all the models that we’ve seen have been very well received by the customers, including the product that we sold just at Fort Lauderdale,” McGill said.
Sea Ray’s new 19- and 21-footers, the 270 Sundeck Outboard and sterndrive models, the new 470, the 59 and 650 were well received, McLamb said.
“We’re seeing it everywhere,” McLamb said. “Whaler, I mean you could hardly walk down the aisles. The reception of Whaler’s new 42-footer was absolutely incredible, a $750,000-plus 42-footer. And so new sales, as we start to get the product to a greater extent, I think we’ll really see some significant improvement in our business. However, it will remain challenging for new product from pretty well all of our manufacturers because they’re running wide open to try to get them out to us as we’re selling. But the interest is there and demand is there and the backlog is still there.”
The smaller Sea Ray products should arrive by the spring, although orders on larger Sea Rays are into fiscal 2016, McGill said.
“The 65s and the new 59 will remain challenged because we got a bunch of them sold and the demand is there, and of course you don’t manufacture a 65-foot boat in just a short period,” McGill said, adding that Azimut also will be pressured to meet demand.
The company also said it was in serious discussions with different dealers to acquire.