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‘Challenging quarter’ drives down MarineMax results

By By Tom Kaiser

In a presentation dominated by the negative effects of the potent winter season, MarineMax announced a 16 percent drop in same-store sales and a net loss of $20 million during its second quarter fiscal 2014 results.

Revenue was $136.6 million for the quarter ended March 31, 2014 compared with approximately $160.0 million for the comparable quarter last year. Same-store sales declined approximately 16 percent, primarily due to weather, following two consecutive March quarters of double-digit percentage same-store sales growth on a year-over-year basis. The company reported a net loss of less than $2.0 million, or $0.08 per share for the quarter compared to a net income of $344,000, or $0.01 per share, for the comparable quarter last year.

Chairman, president and CEO Bill McGill, Jr., opened the call by saying “for sure, this turned out to be a lot more challenging quarter than we expected.” He added that the previous winter season’s weather conditions negatively impacted sales and deliveries.

MarineMax’s revenue decreased 5 percent to $246.2 million for the six months ended March 31 compared with $259.1 million for the comparable period last year. Same-store sales decreased approximately 6 percent as compared to a 10 percent increase in the comparable period last year. The company’s net loss for the six months ended March 31, 2014 was $5.3 million, or $0.22 per share, compared with a net loss of $3.8 million, or $0.17 per share, for the comparable period last year.

Looking ahead to the next quarter, McGill predicted that a healthy inventory might aid the company if the previous quarter’s pent-up demand translates into higher sales during the coming months.

“Despite the shortfall in closing deals of lager boats, we still maintain that larger boats are gaining momentum and should help drive additional sales for us,” he said. “We saw strong interest in boat shows and left the Miami show in February with a post-recession record show. We also continue to see demand in just about anything that is new, somewhat innovative and is priced about right. In some cases demand for new models is stronger than I’ve seen it in my 41-years in the industry.”

MarineMax CFO Mike H. McLamb echoed McGill’s statements about the impact of weather on the company’s results.

“During the March quarter, we had more days where our stores were closed than in the prior 16-year history of our company,” he said. “Generally, southern markets were stronger than northern markets, but we did see growth in markets such as New Jersey and New York.”

In its quarterly results release, McGill said, “While we worked hard to overcome challenging weather conditions that impacted not only our entire industry, but many consumer facing businesses, we were pleased with our team’s ability to continue to drive margin expansion despite our need to aggressively promote the business this past quarter. We believe that many of the potential sales that did not close in the second quarter, have likely been deferred to later quarters. We expect to benefit from our broad selection of brand offerings and recent brand additions, and believe that our strong balance sheet, strategically placed inventory and improving market conditions position us well for the future.”

Mr. McGill continued, “We are confident in the long term industry recovery cycle and the significant upside that exists for MarineMax. As we head into the prime boating season, we believe our team is poised to increase market share, grow margins and deliver the best possible experience to our passionate customers. We also believe we have a strong foundation in place and are well positioned to drive positive cash flow growth as consumer confidence returns.”

The full release, including supplemental data, is available at www.marinemax.com/investor-relations.aspx.

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