Downturn doesn’t spare MarineMax

CLEARWATER, Fla. – Boat dealership chain MarineMax, Inc. (NYSE: HZO) saw sales decline and its net loss widen for the first quarter of fiscal 2008 ended Dec. 31, compared to the same quarter of the previous year.

Revenue was $215.3 million for the quarter ended Dec. 31, compared with $234.0 million for the comparable quarter of the previous year, the company reported in a statement this week. Same-store sales declined approximately 9 percent, or $20.0 million, compared with a 14-percent increase in the comparable quarter last year. Revenue from stores recently opened or closed that were not eligible for inclusion in the same-store sales base increased $1.3 million, according to the company.

The net loss for the first quarter of fiscal 2008 was $6.4 million, or $0.35 per diluted share, compared with a net loss of $3.8 million, or $0.21 per diluted share, for the first quarter of fiscal 2007, MarineMax reported.

“As we indicated in our January 16, 2008 release, broader economic pressures, including the soft real estate and credit markets as well as the decline in consumer confidence and retail industry sales, contributed to further erosion in marine retail conditions,” said William H. McGill, Jr., chairman, president and CEO. “We are disappointed in our first quarter results but continue to believe that our performance has outpaced our competitors. While we have limited visibility into the remainder of fiscal 2008, initial results of the boat show season, industry data and our experience lead us to believe that marine retail sales have weakened even further. We have yet to see evidence that declining interest rates, stabilizing fuel costs, or proposed economic stimuli have had a positive effect on current marine retail conditions, which appear to be at levels not experienced since the early 1990s.”

McGill continued, “Planned reductions in purchases from our manufacturers resulted in a decrease in inventory dollars over the prior year. We will continue to monitor and adjust future purchases as dictated by market conditions. We are diligently focusing on controlling our costs while working to drive sales and gain market share. Our strong balance sheet provides a significant competitive advantage to MarineMax, which in previous downturns has enabled us to expand opportunistically as well as afforded us the ability to invest in growing our market share. We believe that our leading customer-centric business model and financial strength will benefit us when the market recovers, as we are confident it will, and we will emerge with an even stronger competitive position.”

Analysts from RBC Capital Markets noted that the company has seen “a mix shift toward larger, lower gross margin boats, as the 50-foot plus boat segment increased year over year while other categories dropped substantially.”

“Stable margins on core products, good cost control on the SG&A line (headcount reduced by 10 percent) and initial progress with inventory (down year over year for the first time since 2002) were bright spots in an otherwise weak quarter,” RBC analysts added.

During its analyst conference call, the company suggested that weakness in the second quarter will likely translate into a further decline in boat orders.

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