MarineMax benefits from focus on big boats

CLEARWATER, Fla. – Boat retail giant MarineMax, Inc. (NYSE: HZO) is beating analysts’ expectations with its second quarter results, announced yesterday. And since then, it has been breaking its own stock value records.

“MarineMax Inc. gapped up Thursday morning and has climbed higher in the last 20 minutes,” reported yesterday. “The stock is now up 3.14 at $36.12 and has broken out of a one-month range to set a new high for the year.”

The company reported that revenue grew 25.8 percent to $287.4 million for the quarter ended March 31 from $228.4 million for the comparable quarter last year. Same-store sales increased 14.4 percent, or $32.7 million, following an 11.4-percent increase in the same quarter last year. Net income increased over 22.5 percent to $8.6 million, or $0.46 per diluted share, from net income of $7.0 million, or $0.39 per diluted share, for the second quarter of fiscal 2005, according to MarineMax.

Its six-month results were also strong. Revenue grew 13.6 percent to $468.6 million for the six-month period ended March 31, compared to the same period of 2005. Same-store sales increased 6.3 percent on top of a 13.6 percent increase in the year ago period. However, net income was $9.3 million, or $0.50 per diluted share, compared with net income of $9.8 million, or $0.57 per diluted share, for the comparable period last year.

In an interview with the Associated Press, William H. McGill, Jr., chairman, president and CEO, said the overall growth was due in part to a tighter concentration on selling the larger boats it carries vs. its smaller boat models.

MarineMax said its results for the six-month period include after-tax expenses of approximately $700,000, or $0.04 per diluted share, for direct costs associated with Hurricane Wilma. These costs exclude the indirect costs associated with inefficiencies, lost productivity and downtime also caused by the hurricane, according to the company. Additionally, during this same period, the company began expensing stock options as required by Statement of Financial Accounting Standards No. 123R, “Share-Based Payment” and recorded compensation expense for stock options of approximately $1.2 million after-tax, or $0.07 per diluted share.

“The ongoing success MarineMax has achieved shows that we are building one of the strongest brands in the recreational industry,” said McGill in the company statement. “Our results validate our belief that buyers of premium products are resilient and want a full service approach to enhance their boating experience.”

He added that the Surfside-3 Marina acquisition, completed on March 31, allows it to “enter the sizable New York market and expand the MarineMax North-South connection from New England to Florida.”

Based on current business conditions, retail trends, other factors and the recently announced acquisition of Surfside-3 Marina, Inc., MarineMax is updating its previously announced fiscal 2006 guidance to a range of $2.05 to $2.13 per diluted share from $1.89 to $2.01, both of which include an estimated charge of $0.10 per diluted share, based on current assumptions related to stock-based compensation expense as required by Statement of Financial Accounting Standards No. 123R, “Share-Based Payment.”

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