MarineMax Reports Fiscal 2024 First Quarter Results
- None.
- None.
Insights
The reported 4% same-store sales growth by MarineMax in a difficult retail environment suggests effective operational strategies in place, possibly involving inventory management and marketing efforts. However, the decrease in gross profit margin by 350 basis points indicates significant pressure on profitability. This could be attributed to a combination of discounting practices and a shift in sales mix towards larger boats with inherently lower margins. The long-term impact of these lower margins on profitability will be critical to monitor, especially if the promotional environment persists.
Moreover, the updated fiscal 2024 guidance, with a reduction in both adjusted net income and adjusted EBITDA forecasts, reflects the company's recalibration of expectations in light of current market conditions. The nearly 50% increase in interest expense is also noteworthy, as it underscores the effect of rising interest rates on companies with significant inventory levels, like MarineMax. This financial leverage, while beneficial in low-interest-rate environments, can pose a risk when rates climb, as it impacts the cost of carrying inventory and could potentially squeeze margins further.
MarineMax's strategic acquisition of Williams Tenders USA could be a pivotal move to enhance its high-margin product offerings, indicating a focus on niche market expansion and customer base diversification. This acquisition aligns with the growth in the yacht and luxury yacht markets, which MarineMax expects to act as a tailwind for its business. The emphasis on expanding its portfolio in the luxury segment may also be a strategic hedge against the softer retail environment impacting the broader boating industry.
The company's mention of a 'reasonably strong start to the winter boat show season' alongside 'increased support from industry leading manufacturing partners' suggests potential for a rebound in consumer interest and sales. This could be a positive sign for the industry, hinting at resilience in consumer spending within the luxury goods sector despite broader economic headwinds.
MarineMax's first-quarter performance and guidance update must be contextualized within the broader economic landscape marked by inflationary pressures and shifting consumer spending patterns. The company's ability to generate record revenue in the first quarter, despite a challenging retail environment, may indicate underlying consumer confidence in the luxury goods sector or a non-discretionary spending pattern among its customer demographic.
However, the company's increased discounting and the resulting decline in profitability could reflect elastic demand for luxury boats, where sales are sensitive to price changes. This situation may be exacerbated by inflation and rising interest rates, which typically lead to more conservative spending behaviors. As MarineMax adjusts its fiscal 2024 projections, it suggests prudence in the face of economic uncertainties and potential shifts in consumer discretionary spending.
~ Drove Record December Quarter Revenue and
~ Updates Fiscal 2024 Guidance ~
~ Hosts Earnings Conference Call at 10:00 a.m. ET Today ~
Fiscal 2024 First Quarter Summary
-
Record December quarter revenue of
$527.3 million -
Same-store sales increase of
4% -
Gross profit margin of
33.3% -
Net income of
$0.9 million $0.04 $0.19 -
Adjusted EBITDA1 of
$26.6 million
CEO & President Commentary
“I’m proud of our team’s ability to drive a strong close to the December quarter, generating the highest first quarter revenue in our history. This growth came despite a challenging retail environment which required us to take more aggressive pricing actions than expected,” said Brett McGill, Chief Executive Officer and President of MarineMax. “Our pricing actions did result in lower gross margins and profitability. This was primarily due to increased discounting on certain boat models in response to the softer retail environment, as well as a greater mix of larger boats, which historically carry a lower gross margin than other product categories.”
“However, with the seasonally smallest quarter of the year behind us, we are cautiously encouraged by the reasonably strong start to the winter boat show season, along with the increased support from our industry leading manufacturing partners. Our healthy balance sheet and strong cash position allow us to continue to execute on our long-term growth plans. In fiscal 2024, we are focused on capturing further synergies and increasing the earnings power of MarineMax imbedded in the acquisitions we completed over the past several years. In addition, we continue to expand our portfolio of higher-margin product and service offerings that complement our business model,” McGill said. “This month, we announced the planned acquisition of Williams Tenders
Fiscal 2024 First Quarter Results
Revenue in the fiscal 2024 first quarter increased to
Gross profit decreased
Selling, general, and administrative expenses totaled
Interest expense was
Net income in the first quarter was
Fiscal 2024 Guidance
Based on results to date, current business conditions, retail trends and other factors, the Company is updating its fiscal year 2024 Adjusted net income1,2 guidance to a range of
Conference Call Information
MarineMax will discuss its fiscal 2024 first quarter financial results on a conference call starting at 10:00 a.m. ET today. The conference call can be accessed via the “Investors” section of the Company's website: www.marinemax.com, or by dialing 877-407-0789 (
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 81 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,
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 the cautious encouragement related to the remainder of fiscal 2024, the Company’s position to continue to execute on its long-term growth plans, the potential for expansion and synergies within our superyacht services and luxury yacht offerings and our fiscal 2024 guidance. These statements are based on current expectations, forecasts, risks, uncertainties, and assumptions that may cause actual results to differ materially from expectations as of the date of this release. These risks, assumptions, and uncertainties include the Company’s abilities to reduce inventory, manage expenses and accomplish its goals and strategies, the quality of the new product offerings from the Company’s manufacturing partners, the performance and integration of the recently-acquired businesses, general economic conditions, as well as those within the Company's industry, the liquidity and strength of our bank group partners, the level of consumer spending, 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.
____________________
1 This is a non-GAAP measure. See below for an explanation and quantitative reconciliation of each non-GAAP financial measure.
2 See “Non-GAAP Financial Measures” below for a discussion of why reconciliations of forward-looking Adjusted Net Income and Adjusted EBITDA are not available without unreasonable effort.
MarineMax, Inc. and Subsidiaries Condensed Consolidated Statements of Operations (Amounts in thousands, except share and per share data) (Unaudited) |
|||||||
|
|
Three Months Ended |
|||||
|
|
December 31, |
|||||
|
|
2023 |
|
2022 |
|||
Revenue |
|
$ |
527,274 |
|
|
$ |
507,927 |
Cost of sales |
|
|
351,793 |
|
|
|
321,030 |
Gross profit |
|
|
175,481 |
|
|
|
186,897 |
|
|
|
|
|
|||
Selling, general, and administrative expenses |
|
|
156,482 |
|
|
|
150,397 |
Income from operations |
|
|
18,999 |
|
|
|
36,500 |
|
|
|
|
|
|||
Interest expense |
|
|
18,365 |
|
|
|
9,484 |
Income before income tax (benefit) provision |
|
|
634 |
|
|
|
27,016 |
|
|
|
|
|
|||
Income tax (benefit) provision |
|
|
(211 |
) |
|
|
7,029 |
Net income |
|
|
845 |
|
|
|
19,987 |
|
|
|
|
|
|||
Less: Net (loss) income attributable to non-controlling interests |
|
|
(85 |
) |
|
|
297 |
Net income attributable to MarineMax, Inc. |
|
$ |
930 |
|
|
$ |
19,690 |
|
|
|
|
|
|||
Basic net income per common share |
|
$ |
0.04 |
|
|
$ |
0.91 |
|
|
|
|
|
|||
Diluted net income per common share |
|
$ |
0.04 |
|
|
$ |
0.89 |
|
|
|
|
|
|||
Weighted average number of common shares used in computing net income per common share: |
|
|
|
|
|||
|
|
|
|
|
|||
Basic |
|
|
22,196,141 |
|
|
|
21,756,165 |
Diluted |
|
|
22,809,017 |
|
|
|
22,223,173 |
MarineMax, Inc. and Subsidiaries Condensed Consolidated Balance Sheets (Amounts in thousands) (Unaudited) |
||||||||
|
|
|
|
|
||||
|
|
December 31, |
|
December 31, |
||||
|
|
|
2023 |
|
|
|
2022 |
|
ASSETS |
|
|
|
|
||||
CURRENT ASSETS: |
|
|
|
|
||||
Cash and cash equivalents |
|
$ |
210,323 |
|
|
$ |
177,773 |
|
Accounts receivable, net |
|
|
94,601 |
|
|
|
68,514 |
|
Inventories |
|
|
876,233 |
|
|
|
605,369 |
|
Prepaid expenses and other current assets |
|
|
24,864 |
|
|
|
21,715 |
|
Total current assets |
|
|
1,206,021 |
|
|
|
873,371 |
|
Property and equipment, net |
|
|
532,492 |
|
|
|
501,589 |
|
Operating lease right-of-use assets, net |
|
|
140,785 |
|
|
|
138,592 |
|
Goodwill |
|
|
575,850 |
|
|
|
527,718 |
|
Other intangible assets, net |
|
|
38,958 |
|
|
|
38,794 |
|
Other long-term assets |
|
|
32,401 |
|
|
|
33,220 |
|
Total assets |
|
$ |
2,526,507 |
|
|
$ |
2,113,284 |
|
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
|
||||
CURRENT LIABILITIES: |
|
|
|
|
||||
Accounts payable |
|
$ |
43,957 |
|
|
$ |
43,373 |
|
Contract liabilities (customer deposits) |
|
|
74,636 |
|
|
|
119,889 |
|
Accrued expenses |
|
|
112,417 |
|
|
|
101,799 |
|
Short-term borrowings |
|
|
664,858 |
|
|
|
341,212 |
|
Current maturities on long-term debt |
|
|
33,766 |
|
|
|
32,449 |
|
Current operating lease liabilities |
|
|
10,372 |
|
|
|
10,480 |
|
Total current liabilities |
|
|
940,006 |
|
|
|
649,202 |
|
Long-term debt, net of current maturities |
|
|
380,972 |
|
|
|
415,263 |
|
Noncurrent operating lease liabilities |
|
|
125,550 |
|
|
|
121,045 |
|
Deferred tax liabilities, net |
|
|
57,939 |
|
|
|
37,807 |
|
Other long-term liabilities |
|
|
87,469 |
|
|
|
75,041 |
|
Total liabilities |
|
|
1,591,936 |
|
|
|
1,298,358 |
|
SHAREHOLDERS' EQUITY: |
|
|
|
|
||||
Preferred stock |
|
|
— |
|
|
|
— |
|
Common stock |
|
|
29 |
|
|
|
29 |
|
Additional paid-in capital |
|
|
328,955 |
|
|
|
308,480 |
|
Accumulated other comprehensive income |
|
|
3,891 |
|
|
|
2,010 |
|
Retained earnings |
|
|
740,879 |
|
|
|
650,357 |
|
Treasury stock |
|
|
(148,656 |
) |
|
|
(148,656 |
) |
Total shareholders’ equity attributable to MarineMax, Inc. |
|
|
925,098 |
|
|
|
812,220 |
|
Non-controlling interests |
|
|
9,473 |
|
|
|
2,706 |
|
Total shareholders’ equity |
|
|
934,571 |
|
|
|
814,926 |
|
Total liabilities and shareholders’ equity |
|
$ |
2,526,507 |
|
|
$ |
2,113,284 |
|
MarineMax, Inc. and Subsidiaries Segment Financial Information (Amounts in thousands) (Unaudited) |
||||||||
|
|
Three Months Ended |
||||||
|
|
December 31, |
||||||
|
|
|
2023 |
|
|
|
2022 |
|
Revenue: |
|
|
|
|
||||
Retail Operations |
|
$ |
524,085 |
|
|
$ |
502,386 |
|
Product Manufacturing |
|
|
46,128 |
|
|
|
56,326 |
|
Elimination of intersegment revenue |
|
|
(42,939 |
) |
|
|
(50,785 |
) |
Revenue |
|
$ |
527,274 |
|
|
$ |
507,927 |
|
Income from operations: |
|
|
|
|
||||
Retail Operations |
|
$ |
14,806 |
|
|
$ |
36,728 |
|
Product Manufacturing |
|
|
3,970 |
|
|
|
6,502 |
|
Intersegment adjustments |
|
|
223 |
|
|
|
(6,730 |
) |
Income from operations |
|
$ |
18,999 |
|
|
$ |
36,500 |
|
MarineMax, Inc. and Subsidiaries Supplemental Financial Information (Amounts in thousands, except share and per share data) (Unaudited) |
||||||||
|
|
|
||||||
|
|
Three Months Ended |
||||||
|
|
December 31, |
||||||
|
|
|
2023 |
|
|
|
2022 |
|
Net income attributable to MarineMax, Inc. |
|
$ |
930 |
|
|
$ |
19,690 |
|
Transaction costs (1) |
|
|
3,106 |
|
|
|
6,036 |
|
Intangible amortization (2) |
|
|
1,734 |
|
|
|
1,705 |
|
Change in fair value of contingent consideration (3) |
|
|
219 |
|
|
|
1,047 |
|
Hurricane (recoveries) expenses |
|
|
(289 |
) |
|
|
1,494 |
|
Tax adjustments for items noted above (4) |
|
|
(1,259 |
) |
|
|
(2,704 |
) |
Adjusted net income attributable to MarineMax, Inc. |
|
$ |
4,441 |
|
|
$ |
27,268 |
|
|
|
|
|
|
||||
Diluted net income per common share |
|
$ |
0.04 |
|
|
$ |
0.89 |
|
Transaction costs (1) |
|
|
0.13 |
|
|
|
0.27 |
|
Intangible amortization (2) |
|
|
0.08 |
|
|
|
0.08 |
|
Change in fair value of contingent consideration (3) |
|
|
0.01 |
|
|
|
0.05 |
|
Hurricane (recoveries) expenses |
|
|
(0.01 |
) |
|
|
0.07 |
|
Tax adjustments for items noted above (4) |
|
|
(0.06 |
) |
|
|
(0.12 |
) |
Adjusted diluted net income per common share |
|
$ |
0.19 |
|
|
$ |
1.24 |
|
(1) Transactions costs relate to acquisition transaction and integration costs in the period. (2) Represents amortization expense for acquisition-related intangible assets. (3) Represents expenses to record contingent consideration liabilities at fair value. (4) Adjustments for taxes for items are calculated based on the effective tax rate for each respective period presented, the jurisdiction of the adjustment and before discrete items. |
||||||||
|
|
Three Months Ended |
||||||
|
|
December 31, |
||||||
|
|
|
2023 |
|
|
|
2022 |
|
Net income attributable to MarineMax, Inc. |
|
$ |
930 |
|
|
$ |
19,690 |
|
Interest expense (excluding floor plan) |
|
|
7,756 |
|
|
|
6,366 |
|
Income tax (benefit) provision |
|
|
(211 |
) |
|
|
7,029 |
|
Depreciation and amortization |
|
|
10,932 |
|
|
|
9,118 |
|
Stock-based compensation expense |
|
|
5,419 |
|
|
|
4,845 |
|
Transaction costs |
|
|
3,106 |
|
|
|
6,036 |
|
Change in fair value of contingent consideration |
|
|
219 |
|
|
|
1,047 |
|
Hurricane (recoveries) expenses |
|
|
(289 |
) |
|
|
1,494 |
|
Foreign currency |
|
|
(1,216 |
) |
|
|
(2,430 |
) |
Adjusted EBITDA |
|
$ |
26,646 |
|
|
$ |
53,195 |
|
Non-GAAP Financial Measures
This press release, along with the above Supplemental Financial Information table, contains “Adjusted net income” and “Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization” (“Adjusted EBITDA”), which are non-GAAP financial measures as defined under applicable securities legislation. In determining these measures, the Company excludes certain items which are otherwise included in determining the comparable GAAP financial measures. The Company believes these non-GAAP financial measures are key performance indicators that improve the period-to-period comparability of the Company’s results and provide investors with more insight into, and an additional tool to understand and assess, the performance of the Company's ongoing core business operations. Investors and other readers are encouraged to review the related GAAP financial measures and the above reconciliation and should consider these non-GAAP financial measures as a supplement to, and not as a substitute for or as a superior measure to, measures of financial performance prepared in accordance with GAAP.
In addition, we have not reconciled our fiscal year 2024 Adjusted earnings and Adjusted EBITDA guidance to net income (the corresponding GAAP measure for each), which is not accessible on a forward-looking basis due to the high variability and difficulty in making accurate forecasts and projections, particularly with respect to acquisition contingent consideration and acquisition costs. Acquisition contingent consideration and acquisition costs, which are likely to be significant to the calculation of net income, are affected by the integration and post-acquisition performance of our acquirees, which is difficult to predict and subject to change. Accordingly, reconciliations of forward-looking Adjusted earnings and Adjusted EBITDA are not available without unreasonable effort.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240124477777/en/
Investors: Mike McLamb
Chief Financial Officer
MarineMax, Inc.
727-531-1700
Scott Solomon or Laura Resag
Sharon Merrill Advisors
investors@marinemax.com
Source: MarineMax, Inc.
FAQ
What was MarineMax, Inc.'s (HZO) December quarter revenue?
What was the same-store sales increase for MarineMax, Inc. (HZO)?
What was the CEO's commentary on the performance of MarineMax, Inc. (HZO)?
What were the reasons for lower gross margins and profitability for MarineMax, Inc. (HZO)?
What are the fiscal 2024 guidance updates for MarineMax, Inc. (HZO)?
