MarineMax Announces New Stock Repurchase Program

Rhea-AI Summary

MarineMax, Inc. (NYSE: HZO) announces a new $100 million stock repurchase plan, replacing the 2020 plan. The company aims to repurchase shares to mitigate dilution effects and for general corporate purposes.

Insights

Financial Analyst

MarineMax's announcement of a new stock repurchase plan signifies a strategic move that could potentially enhance shareholder value. Stock buybacks are often employed by companies with a surplus of cash as a method to return capital to shareholders, effectively increasing the value of remaining shares by reducing the total number in circulation. This can lead to an improved earnings per share (EPS) ratio, a key metric for investors.

From a financial perspective, the decision to replace the 2020 plan with a new repurchase program extending to 2026 suggests confidence in the company's long-term financial stability and liquidity. The repurchase of $100 million worth of common stock is a substantial commitment and it's crucial to consider the impact on the company's balance sheet. The timing and volume of these buybacks will be critical, as they should ideally occur when the stock is undervalued to maximize gains for the company and its shareholders.

Market Research Analyst

MarineMax's repurchase plan must be evaluated within the context of the recreational boating industry's market dynamics. The industry is sensitive to economic cycles and consumer discretionary spending. If consumer confidence and disposable income are high, sales and profitability in this sector tend to increase, potentially leading to a more favorable condition for stock repurchases.

Moreover, the company’s intention to mitigate the dilutive effect of restricted stock indicates a proactive approach to managing its capital structure. By repurchasing shares, MarineMax may be aiming to optimize its stock price performance, which can be an attractive signal to investors. This move could also be interpreted as a lack of viable investment opportunities within the company's core operations or potential acquisitions, leading the company to opt for stock repurchases as an alternative use of funds.

Economist

The broader economic implications of a stock repurchase program such as MarineMax's must be considered. Such corporate actions can reflect underlying economic conditions; when a company buys back stock, it may indicate that the management believes the market has undervalued the company's shares. However, it is also essential to analyze the opportunity cost of this capital allocation. The funds used for stock buybacks are not being invested in new projects or expansion efforts, which could stimulate economic growth and employment.

In the long-term, the effectiveness of the repurchase plan in delivering value will depend on the company's ability to maintain profitability and growth. An economic downturn could impact the recreational boat industry significantly, making it more challenging to justify the allocation of capital to share repurchases over other investments that could secure the company's market position during adverse economic conditions.

CLEARWATER, Fla.--(BUSINESS WIRE)-- MarineMax, Inc. (NYSE: HZO), the world’s largest recreational boat, yacht and superyacht services company, today announced that its Board of Directors approved a new stock repurchase plan. Under the plan, the Company is authorized to repurchase up to $100 million of its common stock during the period beginning today and ending March 31, 2026. This plan replaces the March 2020 plan (the “2020 plan”), as amended, which authorized the repurchase of up to 10 million shares and which was set to expire on March 31, 2024. Approximately 1,080,000 shares had been repurchased under the 2020 plan as of March 5, 2024.

The new stock repurchase program allows MarineMax to purchase common stock from time to time in the open market or in privately negotiated block purchase transactions. The number of shares purchased and the timing of any purchases will depend upon a number of factors, including the price and availability of the Company’s stock and general market conditions. The Company intends to repurchase shares to mitigate the dilutive effect of restricted stock, and shares repurchased may be reserved for later reissue in connection with employee benefit plans and other general corporate purposes.

As of March 5, 2024, the Company had 22,299,588 shares of common stock outstanding.

About MarineMax
As the world’s largest lifestyle retailer of recreational boats and yachts, as well as yacht concierge and superyacht services, MarineMax (NYSE: HZO) is United by Water. We have over 130 locations worldwide, including 83 dealerships and 66 marina and storage facilities. Our integrated business includes IGY Marinas, which operates luxury marinas in yachting and sport fishing destinations around the world; Fraser Yachts Group and Northrop & Johnson, leading superyacht brokerage and luxury yacht services companies; Cruisers Yachts, one of the world’s premier manufacturers of premium sport yachts and motor yachts; and Intrepid Powerboats, a premier manufacturer of powerboats. To enhance and simplify the customer experience, we provide financing and insurance services as well as leading digital technology products that connect boaters to a network of preferred marinas, dealers, and marine professionals through Boatyard and Boatzon. In addition, we operate MarineMax Vacations in Tortola, British Virgin Islands, which offers our charter vacation guests the luxury boating adventures of a lifetime. Land comprises 29% of the earth’s surface. We’re focused on the other 71%. Learn more at www.marinemax.com.

Forward Looking Statement
Certain statements in this press release are forward-looking as defined in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements include those regarding the Company’s potential repurchases of its common stock and the means by which such repurchases are made. These statements involve certain risks and uncertainties that may cause actual results to differ materially from expectations as of the date of this release. These risks include significant changes in the price and availability of the Company’s stock, general economic conditions, as well as those within our industry, and numerous other factors identified in the Company’s Form 10-K for the fiscal year ended September 30, 2023 and other filings with the Securities and Exchange Commission. The Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240308070512/en/

Investors:

Michael H. McLamb

Chief Financial Officer

727-531-1700

investors@marinemax.com

Scott Solomon or Laura Resag

Sharon Merrill Advisors

investors@marinemax.com

617-542-5300

Media:

Abbey Heimensen

Abbey.Heimensen@marinemax.com

Source: MarineMax, Inc.

FAQ

What did MarineMax announce regarding its stock repurchase plan?

MarineMax announced a new stock repurchase plan authorizing the repurchase of up to $100 million of its common stock until March 31, 2026.

What was the previous stock repurchase plan by MarineMax?

The previous stock repurchase plan, known as the 2020 plan, authorized the repurchase of up to 10 million shares and was set to expire on March 31, 2024.

How many shares were repurchased under the 2020 plan as of March 5, 2024?

Approximately 1,080,000 shares had been repurchased under the 2020 plan as of March 5, 2024.

What factors will determine the number of shares purchased under the new stock repurchase program?

The number of shares purchased and the timing of any purchases will depend upon factors such as the price and availability of the Company’s stock and general market conditions.

What is the purpose of repurchasing shares according to MarineMax?

MarineMax intends to repurchase shares to mitigate the dilutive effect of restricted stock, and shares repurchased may be reserved for later reissue in connection with employee benefit plans and other general corporate purposes.