MarineMax amends credit agreement

CLEARWATER, Fla. — Boat retailer MarineMax has completed an amendment of its credit and security agreement with its seven lenders, the company reported in a release today.

According to MarineMax, the amendment modifies the amount of borrowing availability and financial covenants of a prior agreement. The amended facility provides a line of credit with asset-based borrowing availability up to $300 million, stepping down to $250 million by Sept. 30, 2009, and $175 million by Sept. 30, 2010, with interim decreases in between.

In order to facilitate a reduction of inventory, the amendment enables MarineMax to incur a cumulative EBITDA (earnings before interest, taxes, depreciation and amortization) loss of up to $40 million for fiscal 2009 plus adjustments for items such as store closing costs and losses on specific brands no longer carried by the company. The amendment also increases the allowable EBITDA loss for the December, March and June quarters of fiscal 2010. The amendment further requires that the company maintain a leverage ratio of not more than 2.75 to 1.

“The amendment to our credit facility is designed to provide us with additional flexibility to operate our business and navigate through these difficult economic conditions,” MarineMax CFO Michael H. McLamb said in a statement. “Specifically, the amendment provides us greater flexibility under our EBITDA covenant for fiscal 2009 and fiscal 2010, compared with the company’s existing covenant, among other changes.”

The amendment provides for a variable interest rate margin of LIBOR plus 490 basis points through mid-November 2010 and thereafter at LIBOR plus 150 to 400 basis points, depending upon the company’s financial and operating performance, MarineMax reported. With the execution of the amendment, MarineMax paid a fee of $1.25 million to the lenders. The amended facility matures in May 2011, but includes two one-year renewal options, subject to lender approval.

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