MarineMax says it's poised for sustained recovery

MarineMax’s top executives are proud of their company’s second-quarter performance, but they’re cautiously optimistic when they talk about what might happen during the rest of the year.

In 2011, the debate about the U.S. national debt and the financial crisis in Europe hurt consumer confidence, dealing a blow to a promising year at the nation’s largest recreational boat retailer, chief financial officer Michael McLamb said Thursday during a conference call after the company released its results for the quarter.

“We believe it will take a few quarters of sustainable improvement before we will be able to conclude that not only is our business poised for ongoing recovery, but our economy is heading in a direction that will produce growth quarter after quarter for the foreseeable future,” McLamb said.

Clearwater, Fla.-based MarineMax swung from a second-quarter loss last year of $5.5 million, or 20 cents a share, to a profit of $2.3 million, or 10 cents a share, for the quarter that ended March 31.

Revenue was $144 million, compared with $115.8 million a year earlier, and same-store sales increased about 26 percent, compared with a 5 percent increase last year.

“While our results cause us to have a greater sense of optimism, we need to have a sustained [economic] recovery to feel significantly better about the industry and our results,” chairman, president and chief executive William McGill Jr. said during the conference call.

McLamb said that about one-fourth of the company’s same-store sales growth in the second quarter was from new brands that McGill said the company began to offer during the downturn in the economy.

“Our experience is that it takes a few years for new brands to gain momentum,” McGill said. “These brands should continue to contribute to our growth as they ramp, especially as business continues to improve.”

McLamb said the company is comfortable with its $206 million inventory “as we head into what has historically been our strongest selling season.” Inventories were up year over year, primarily because of the company adding new brands and the timing of the receipt of product from manufacturers.

In a statement accompanying the second-quarter results, McGill said he was proud of what the company achieved.

“We have now put together six consecutive quarters of new-boat sales unit growth, capitalizing on the improvements we have made in our business over the past few years as we navigated the persistent challenges faced by our industry,” he said. “The increase in gross margin also reflected our continued growth in our higher-margin businesses of service, parts, accessories, finance and insurance. We also demonstrated meaningful expense leverage, which will result in strong cash flow and earnings growth when our sales further recover."

McGill also said he is “cautiously optimistic” that the initial improvement in the industry is sustainable.

For the six-month period that ended March 31, revenue at MarineMax increased $27.9 million, to $235.8 million, compared with $207.9 million in the comparable period last year. Same-store sales increased about 16 percent, compared with a 1 percent decrease in the comparable period last year.

The company reduced its net loss by $7.3 million for the six-month period, to $1.9 million, or 8 cents a share, compared with a net loss of $9.2 million, or 41 cents a share, for the comparable period last year.

— Jack Atzinger


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