Market share gains are MarineMax’s silver lining

CLEARWATER, Fla. – Boat retailer MarineMax, Inc. (NYSE: HZO) may have reported a first quarter net loss, but the company isn’t letting that get it down.

“As we indicated in our January 8, 2007 release, we believe our relative performance is greatly outpacing the industry, resulting in significant market share gains,” commented William H. McGill, Jr., MarineMax chairman, president and CEO. “We believe these gains will lead to meaningful revenue and earnings growth when the industry recovers. While we are disappointed that the challenging macro economic environment adversely impacted our results and required additional spending to secure sales, I am proud of our team’s execution and remain confident in our strategies.”

In an earnings conference call, McGill also hinted that more acquisitions may be ahead this year, stating that while some companies are reluctant to sell during a downturn, “we continue to be opportunistic.”

MarineMax revenue increased approximately 30 percent to $234.7 million from $181.2 million for the comparable quarter last year. This increase was driven by same-store sales growth of 14 percent and $28.7 million from stores that were opened or acquired that are not eligible for inclusion in the same-store sales base, the company reported.

Operating margins were negatively impacted by additional team member and product incentives, and higher marketing and promotional costs, which the company said were necessary to drive sales.

The net loss for the first quarter of fiscal 2007 was $3.8 million, or $0.21 per diluted share, compared with net income of $664,000, or $0.04 per diluted share, for the first quarter of fiscal 2006.

Inventories at December 31, 2006, were $545.3 million including approximately $117.6 million associated with the acquisitions of the Port Arrowhead Group and Surfside-3 Marina completed during the March 2006 quarter and approximately $13.6 million associated with the addition of the Cabo Yachts product line which the company added in late September 2006, according to MarineMax.

The company said it’s reiterating its recently updated fiscal 2007 guidance to the range of $1.40 to $1.50 per share on a fully diluted basis. This guidance assumes same-store sales will be in the mid-single digits and excludes the impact from any potential material acquisitions that it may complete, MarineMax stated.

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