MarineMax Reports Fiscal 2023 Third Quarter Results

July 27, 2023

~ Posts Record Revenue and Strong Margins on Continued Execution of Growth Strategy ~

~ Updates Fiscal 2023 Guidance ~

~ Q3 Earnings Conference Call at 10:00 a.m. ET Today ~

MarineMax, Inc. (NYSE: HZO), the world’s largest recreational boat, yacht, and superyacht services company, today announced results for its fiscal third quarter ended June 30, 2023.

Fiscal 2023 Third Quarter Highlights

  • Record revenue of $721.8 million
  • Strong gross margin of 33.8%
  • Net income of $44.4 million, or diluted EPS of $1.98; Adjusted diluted EPS of $2.07
  • Adjusted EBITDA of $83.5 million
  • IGY Marinas contributes to Company growth
  • Completes acquisition of C&C Boat Works

CEO & President Commentary

“Our Team outperformed our expectations in the third quarter, highlighted by record revenue, solid earnings, and strong cash flows. Robust consumer demand and enthusiasm for boating, particularly in the premium segment, fueled new and used boat revenue and resulted in a modest increase in same-store sales in the quarter,” stated MarineMax Chief Executive Officer and President Brett McGill. “We continue to execute on our strategy to structurally enhance our margin profile through premium products, services and experiences that enable customers to enjoy the boating lifestyle. While the marine industry is seeing a return to seasonality that led to incrementally more aggressive retail pricing during the quarter, our margins remained healthy, strengthened by the more profitable business lines in our integrated marine portfolio, as well as strategic acquisitions such as IGY Marinas.

“The addition of IGY Marinas is significantly enhancing our worldwide reach while creating opportunities for synergies with our other superyacht services offerings,” Mr. McGill continued. “Capitalizing on our strong balance sheet, in the quarter we also added C&C Boat Works of Minnesota to the MarineMax family. With C&C’s significant storage capabilities, combined with our nearby existing operations, we are better able to serve the vibrant Minnesota boating community.”

Fiscal 2023 Third Quarter Results

Revenue in the fiscal 2023 third quarter increased to a record $721.8 million from $688.5 million in the comparable period last year. The 4.8% top-line growth was driven primarily by the acquisition of IGY Marinas, which the Company acquired in October 2022, increased manufacturing revenue and stronger new and used boat revenue. Same-store sales increased slightly in the third quarter compared with a decline of 5% a year ago. IGY Marinas and boat manufacturing revenue are not included in the same-store sales comparison.

Gross profit increased 3.1% to $243.8 million from $236.5 million in the prior-year period. Gross profit margin of 33.8% decreased 50 basis points from 34.3% in the fiscal 2022 third quarter, primarily due to revenue mix.

Selling, general, and administrative expenses totaled $169.2 million, or 23.4% of revenue, in the third quarter compared with $141.2 million, or 20.5% of revenue, for the same period last year, primarily reflecting the addition of IGY Marinas.

Interest expense increased to $14.8 million in the third quarter from $1.0 million in the prior-year period, reflecting higher interest rates as well as the increase in long-term debt associated with the IGY Marinas acquisition and greater inventory.

Net income in the third quarter was $44.4 million, or $1.98 per diluted share, compared with net income of $70.2 million, or $3.17 per diluted share, in the same period last year.

Adjusted net income1 in the third quarter was $46.5 million, or $2.07 per diluted share, compared with $71.5 million, or $3.23 per diluted share, in the prior-year period. Adjusted EBITDA1 for the quarter ended June 30, 2023 was $83.5 million, compared with $105.5 million for the same period last year.

Fiscal 2023 Guidance

Based on results to date, current business conditions, retail trends and other factors, the Company is narrowing its fiscal year 2023 guidance for Adjusted earnings2 to a range of $5.10 to $5.50 per diluted share, compared with a prior range of $4.90 to $5.50 per diluted share. The Company also is narrowing its fiscal year 2023 guidance for Adjusted EBITDA2 to a range of $225 million to $245 million, compared with a prior range of $220 million to $245 million. These expectations do not consider, or give effect for, among other things, material acquisitions that may be completed by the Company during fiscal 2023 or other unforeseen events, including changes in global economic conditions.

Conference Call Information

MarineMax will discuss its fiscal 2023 third quarter results and outlook 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 (U.S. and Canada) or 201-689-8562 (International). An online replay will be available within one hour of the conclusion of the call and will be archived on the website for one year.

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 130 locations worldwide, including 78 dealerships and 59 marinas. 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 our strategy to structurally enhance our margin profile and our fiscal 2023 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, 2022 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 earnings 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

 

 

Nine Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Revenue

 

$

721,844

 

 

$

688,537

 

 

$

1,800,111

 

 

$

1,771,334

 

Cost of sales

 

 

478,036

 

 

 

452,064

 

 

 

1,168,497

 

 

 

1,162,347

 

Gross profit

 

 

243,808

 

 

 

236,473

 

 

 

631,614

 

 

 

608,987

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general, and administrative expenses

 

 

169,227

 

 

 

141,173

 

 

 

465,128

 

 

 

394,702

 

Income from operations

 

 

74,581

 

 

 

95,300

 

 

 

166,486

 

 

 

214,285

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

14,798

 

 

 

1,008

 

 

 

37,562

 

 

 

2,299

 

Income before income tax provision

 

 

59,783

 

 

 

94,292

 

 

 

128,924

 

 

 

211,986

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income tax provision

 

 

15,455

 

 

 

24,113

 

 

 

34,685

 

 

 

52,357

 

Net income

 

 

44,328

 

 

 

70,179

 

 

 

94,239

 

 

 

159,629

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Less: Net (loss) income attributable to non-controlling interests

 

 

(88

)

 

 

 

 

 

98

 

 

 

 

Net income attributable to MarineMax, Inc.

 

$

44,416

 

 

$

70,179

 

 

$

94,141

 

 

$

159,629

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic net income per common share

 

$

2.03

 

 

$

3.26

 

 

$

4.31

 

 

$

7.34

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted net income per common share

 

$

1.98

 

 

$

3.17

 

 

$

4.22

 

 

$

7.11

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of common shares used in computing net income per common share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

21,885,400

 

 

 

21,524,315

 

 

 

21,831,350

 

 

 

21,761,811

 

Diluted

 

 

22,427,443

 

 

 

22,173,273

 

 

 

22,321,269

 

 

 

22,455,828

 

MarineMax, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(Amounts in thousands)

(Unaudited)







 

 

 

June 30,

 

 

June 30,

 

 

 

2023

 

 

2022

 

ASSETS

 

 

 

 

 

 

CURRENT ASSETS:

 

 

 

 

 

 

Cash and cash equivalents

 

$

226,134

 

 

$

281,351

 

Accounts receivable, net

 

 

95,018

 

 

 

61,863

 

Inventories

 

 

739,114

 

 

 

374,217

 

Prepaid expenses and other current assets

 

 

24,881

 

 

 

18,566

 

Total current assets

 

 

1,085,147

 

 

 

735,997

 

Property and equipment, net

 

 

521,637

 

 

 

226,647

 

Operating lease right-of-use assets, net

 

 

135,452

 

 

 

100,127

 

Goodwill

 

 

562,277

 

 

 

236,713

 

Other intangible assets, net

 

 

40,968

 

 

 

11,481

 

Other long-term assets

 

 

34,814

 

 

 

9,104

 

Total assets

 

$

2,380,295

 

 

$

1,320,069

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

 

 

CURRENT LIABILITIES:

 

 

 

 

 

 

Accounts payable

 

$

47,202

 

 

$

56,533

 

Contract liabilities (customer deposits)

 

 

97,785

 

 

 

138,375

 

Accrued expenses

 

 

118,576

 

 

 

97,088

 

Short-term borrowings

 

 

514,023

 

 

 

107,222

 

Current maturities on long-term debt

 

 

32,409

 

 

 

3,028

 

Current operating lease liabilities

 

 

9,967

 

 

 

10,323

 

Total current liabilities

 

 

819,962

 

 

 

412,569

 

Long-term debt, net of current maturities

 

 

399,229

 

 

 

45,834

 

Noncurrent operating lease liabilities

 

 

119,759

 

 

 

92,774

 

Deferred tax liabilities, net

 

 

54,449

 

 

 

17,805

 

Other long-term liabilities

 

 

84,539

 

 

 

8,347

 

Total liabilities

 

 

1,477,938

 

 

 

577,329

 

SHAREHOLDERS' EQUITY:

 

 

 

 

 

 

Preferred stock

 

 

 

 

 

 

Common stock

 

 

29

 

 

 

29

 

Additional paid-in capital

 

 

320,383

 

 

 

300,411

 

Accumulated other comprehensive income (loss)

 

 

3,245

 

 

 

(1,351

)

Retained earnings

 

 

724,808

 

 

 

592,307

 

Treasury stock

 

 

(148,656

)

 

 

(148,656

)

Total shareholders’ equity attributable to MarineMax, Inc.

 

 

899,809

 

 

 

742,740

 

Non-controlling interests

 

 

2,548

 

 

 

Total shareholders’ equity

 

 

902,357

 

 

 

742,740

 

Total liabilities and shareholders’ equity

 

$

2,380,295

 

 

$

1,320,069

 

MarineMax, Inc. and Subsidiaries

Segment Financial Information

(Amounts in thousands)

(Unaudited)







 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

Retail Operations

 

$

687,168

 

 

$

657,930

 

 

$

1,707,049

 

 

$

1,690,172

 

Product Manufacturing

 

 

51,884

 

 

 

48,802

 

 

 

164,959

 

 

 

129,804

 

Elimination of intersegment revenue

 

 

(17,208

)

 

 

(18,195

)

 

 

(71,897

)

 

 

(48,642

)

Revenue

 

$

721,844

 

 

$

688,537

 

 

$

1,800,111

 

 

$

1,771,334

 

Income from operations:

 

 

 

 

 

 

 

 

 

 

 

 

Retail Operations

 

$

68,050

 

 

$

90,655

 

 

$

158,514

 

 

$

204,124

 

Product Manufacturing

 

 

5,089

 

 

 

5,903

 

 

 

17,834

 

 

 

13,733

 

Intersegment adjustments

 

 

1,442

 

 

 

(1,258

)

 

 

(9,862

)

 

 

(3,572

)

Income from operations

 

$

74,581

 

 

$

95,300

 

 

$

166,486

 

 

$

214,285

 

MarineMax, Inc. and Subsidiaries

Supplemental Financial Information

(Amounts in thousands, except share and per share data)

(Unaudited)







 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Net income attributable to MarineMax, Inc.

 

$

44,416

 

 

$

70,179

 

 

$

94,141

 

 

$

159,629

 

Acquisition costs (1)

 

 

111

 

 

 

939

 

 

 

6,227

 

 

 

1,456

 

Intangible amortization (2)

 

 

1,925

 

 

 

630

 

 

 

5,524

 

 

 

1,769

 

Change in fair value of contingent consideration (3)

 

 

1,211

 

 

 

141

 

 

 

3,441

 

 

 

375

 

Hurricane expenses (recoveries)

 

 

(452

)

 

 

 

 

 

(644

)

 

 

 

Gain on acquisition of equity investment (4)

 

 

 

 

 

 

 

 

(5,129

)

 

 

 

Tax adjustments for items noted above (5)

 

 

(724

)

 

 

(438

)

 

 

(2,534

)

 

 

(889

)

Adjusted net income attributable to MarineMax, Inc.

 

$

46,487

 

 

$

71,451

 

 

$

101,026

 

 

$

162,340

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted net income per common share

 

$

1.98

 

 

$

3.17

 

 

$

4.22

 

 

$

7.11

 

Acquisition costs (1)

 

 

 

 

 

0.04

 

 

 

0.28

 

 

 

0.06

 

Intangible amortization (2)

 

 

0.09

 

 

 

0.03

 

 

 

0.25

 

 

 

0.08

 

Change in fair value of contingent consideration (3)

 

 

0.05

 

 

 

0.01

 

 

 

0.15

 

 

 

0.02

 

Hurricane expenses (recoveries)

 

 

(0.02

)

 

 

 

 

 

(0.03

)

 

 

 

Gain on acquisition of equity investment (4)

 

 

 

 

 

 

 

 

(0.23

)

 

 

 

Tax adjustments for items noted above (5)

 

 

(0.03

)

 

 

(0.02

)

 

 

(0.11

)

 

 

(0.04

)

Adjusted diluted net income per common share

 

$

2.07

 

 

$

3.23

 

 

$

4.53

 

 

$

7.23

 

(1) Acquisition costs relate to acquisition transaction 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) Represents gain on a previously held equity investment upon acquisition of the entire business.

(5) Adjustments for taxes for items are calculated based on the effective tax rate for each respective period presented and the jurisdiction of the adjustment.

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Net income attributable to MarineMax, Inc.

 

$

44,416

 

 

$

70,179

 

 

$

94,141

 

 

$

159,629

 

Interest expense (excluding floor plan)

 

 

7,485

 

 

 

749

 

 

 

20,669

 

 

 

1,374

 

Income tax provision

 

 

15,455

 

 

 

24,113

 

 

 

34,685

 

 

 

52,357

 

Depreciation and amortization

 

 

9,419

 

 

 

4,948

 

 

 

27,391

 

 

 

14,252

 

Stock-based compensation expense

 

 

5,490

 

 

 

3,935

 

 

 

15,703

 

 

 

11,110

 

Acquisition costs

 

 

111

 

 

 

939

 

 

 

6,227

 

 

 

1,456

 

Gain on acquisition of equity investment

 

 

 

 

 

 

 

 

(5,129

)

 

 

 

Change in fair value of contingent consideration

 

 

1,211

 

 

 

141

 

 

 

3,441

 

 

 

375

 

Hurricane expenses (recoveries)

 

 

(452

)

 

 

 

 

 

(644

)

 

 

 

Foreign currency

 

 

352

 

 

 

508

 

 

 

(2,451

)

 

 

549

 

Adjusted EBITDA

 

$

83,487

 

 

$

105,512

 

 

$

194,033

 

 

$

241,102

 

Non-GAAP Financial Measures

This press release, along with the above Supplemental Financial Information table, contains “Adjusted net income,” “Adjusted diluted EPS” 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 guidance for fiscal year 2023 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.

Investor Contacts:
Mike McLamb
Chief Financial Officer
MarineMax, Inc.
727-531-1700

Scott Solomon or Laura Resag
Sharon Merrill Associates, Inc.
857-383-2409
investors@marinemax.com

Source: MarineMax, Inc.