CLEARWATER, Fla. – MarineMax, Inc. has posted record results for its fourth quarter of fiscal 2006, the company said in a press release yesterday.
Revenue grew more than 41 percent to $323.6 million, for the quarter ended Sept. 30, 2006, from $228.6 million for the comparable quarter last year. Same-store sales increased 14 percent, following a 24 percent increase in the comparable quarter last year, a result of stores opened or acquired that are not eligible for inclusion in the same-store sales base. Net income increased 24.1 percent to $12.6 million, or $0.66 per diluted share, from net income of $10.2 million, or $0.54 per diluted share, for the fourth quarter of fiscal 2005.
For the fiscal year ended Sept. 30, 2006, MarineMax’s revenue grew 28 percent to $1.2 billion, compared with $947.3 million for fiscal 2005. Same-store sales increased 7 percent in fiscal 2006 on top of a 23 percent increase in fiscal 2005. The remaining growth came from stores opened or acquired that are not eligible for inclusion in the same-store sales base. Net income for fiscal 2006 grew to $39.4 million, or $2.08 per diluted share, compared with net income of $33.8 million, or $1.88 per diluted share, for last fiscal year.
The company’s results for the fiscal year ended Sept. 30, 2006, include after-tax expenses of approximately $700,000, or $0.04 per diluted share, for direct costs incurred during the first quarter associated with Hurricane Wilma. Additionally, beginning with fiscal year 2006, the company began expensing stock options as required by Statement of Financial Accounting Standards No. 123R, “Share-Based Payment.” During the quarter and fiscal year ended Sept. 30, MarineMax recorded compensation expense for stock options of approximately $900,000 and $2.8 million respectively, both after-tax, or $0.05 and $0.15 per diluted share, respectively. In the fourth quarter of fiscal 2005, the company recorded an after-tax charge of approximately $1.0 million or approximately $0.06 per diluted share, related to a single litigation matter that is under appeal. Excluding these charges in the respective periods, net income for the fourth quarter of fiscal 2006 would have increased 20.6 percent and net income for fiscal 2006 would have been up 23.2 percent.
“Given the challenging environment in which we are operating, marked by cautious consumer spending, I am pleased with our team's abilities to once again deliver very strong same-store sales growth and solid overall earnings growth albeit at the low end of our expectations,” said William H. McGill, Jr., MarineMax chairman, president and CEO. “I am confident our same-store sales growth has resulted in market share gains for MarineMax. As planned, we adopted a more aggressive marketing strategy that helped to generate strong sales growth. This increased our costs, but it also gave us a larger customer base that will likely result in additional sales, as our customers trade-up, thereby driving future revenue growth.”
Based on current business conditions, retail trends and other factors, MarineMax is updating its fiscal 2007 guidance to the range of $2.05 to $2.15 per share from $2.15 to $2.25. The company’s 2007 guidance assumes same-store sales growth in the mid single digits and excludes the impact from any potential material acquisitions that it may complete.
Analyst calls results disappointing
Despite strong same-store sales, the aggressive marketing strategy McGill noted caused MarineMax to fall short of earnings estimates, according to analysis by RBC Capital Markets.
“Results were disappointing overall, but were not indicative of incremental change,” said Edward Aaron, RBC equity research vice president. “We knew going into the earnings release that the boating cycle had turned for the worse, and that MarineMax needed to reduce inventory.”
The company’s inventories did show some improvement, which RBC expects to continue.
“We think the next surprise may be more positive,” Aaron said. “Fiscal Q1 and Q2 are seasonally slower quarters, in which the mix of sales is more heavily weighted toward larger boats. The larger boat category continues to hold up relatively well, and we think sales are tracking favorably in the current quarter.”
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