CLEARWATER, Fla. -- MarineMax, Inc., the nation’s largest recreational boat retailer, reported another quarter of double-digit growth, as the weather brightened up midway through the quarter.
Revenue grew approximately 22 percent or $39.0 million to $214.4 million for the quarter ended June 30, 2014 compared with $175.8 million for the comparable quarter last year. Same-store sales increased approximately 22 percent.
Bill McGill, Jr., chairman, president, and CEO, said the growth was a good indicator for all boating stakeholders.
“It is great to see the 22 percent growth that our team created in the most meaningful quarter of the year,” said McGill. “Our 22 percent same-store sales growth was on top of 16 percent growth last year and is evidence of continuing industry recovery.”
He said the results are especially exciting coming out of the grueling economic downturn.
“What is most exciting: it was one of the best unit growth quarters we’ve seen since before the recession began,” said McGill, adding that sterndrives were finally bouncing back as well. “Of all the categories in which we operate, we saw the greatest unit strength in stern drive boats; which has been lagging other industry categories during the recovery. It certainly would be nice to see this trend continue”
He said as winter stuck around and the rainy spring slowed sales, MarineMax changed some of its tactics.
“With the impact of weather hanging over our results, we made a decision to be more aggressive with marketing and to a degree with pricing, both contributing greatly to our results,” said McGill.
A large settlement from the Deepwater Horizon disaster also helped drive operating costs down, allowing them to be even more aggressive with sales.
During the comparable quarter last year, the Company recovered $7.0 million, net, or $0.29 per diluted share, from the Deepwater Horizon Settlement Program for damages it suffered as a result of the Deepwater Horizon oil spill in 2010. The recovery was reflected as a reduction to the Company’s selling, general and administrative expenses, lowering expenses from $40.0 million to $33.0 million.
McGill said during an investor conference call that they started the quarter in good shape, but two markets performed especially well.
“We started with the quarter with a good sales backlog and as the quarter progressed we were able to produce meaningful unit growth with Florida and New Jersey being the top performers,” said McGill. “A year after Hurricane Sandy, New Jersey seems to be making a meaningful recovery and momentum is building.”
Income before taxes for the quarter ended June 30, 2014, was $11.5 million growing more than 100 percent compared with $5.6 million for the comparable quarter last year.
When asked about the low inventory numbers, McGill said they were making a safe bet on new products.
“We feel like we have enough inventory. We’re anxiously awaiting the new products from Sea Ray,” said McGill. “We’re very encouraged by the new products that are coming, so we’ve been clearing the decks of the old inventory.”
He said new offerings like the Sea Ray 350SLX are driving interest and will keep the next quarter looking great.
“Our trends in July would be in line, with mid double-digits in growth,” said McGill who noted that Q2 revenue would have been even better if the new products were in the shop. “ We made a conscientious decision to stick with the number one brand, Sea Ray, and new products take time.”
He said the 350SLX is already selling well, and providing a great profit.
“We’re getting incredible margins on the product – it’s in demand,” said McGill. “We’ve got about 60 sold, and we’ve gotten 20 of them.”
He told attendees of an investor conference call that things will be even more fun in the near future.
“Once we get those new Sea Rays,” said McGill. “Life for us will be a lot more fun, and these calls will be a lot more fun.”