MarineMax grows revenue over 33% in Q1 fiscal 2017 results, plans further acquisitions
MarineMax, Inc. (NYSE:HZO) announced results for its first quarter ended Dec.31, 2016.
Revenue grew more than 33 percent to $226.9 million for the quarter ended Dec. 31, 2016 from $169.5 million for the comparable quarter last year. Same-store sales increased 28 percent, building upon the 8 percent same-store sales growth in the same period last year.
“I would like to thank the MarineMax team for all their hard work and continued commitment to our customer-centric approach, which is – evidenced by our results – resonating with boating enthusiasts,” said William H. McGill, Jr., chairman, president, and chief executive officer in a webcast detailing the results. “We attribute the continued strength in our business to a combination of our team’s talent and focus on our strategies, the flow of innovation into new products and our balance sheet that can support the growth initiatives we have in place.”
The December quarter is typically the company’s smallest revenue quarter of the year and is usually a loss quarter for most marine dealers, including MarineMax. The company produced a profitable first quarter with net income of $2.6 million or $0.11 per diluted share for the quarter ended Dec.31, 2016, compared to $688,000 or $0.03 per diluted share for the comparable quarter last year.
“Our strong same-store sales growth was supported by an increase in larger yacht sales, which traditionally carry lower gross margins, impacting our consolidated margins. Historically, when this has occurred, we get good operating expense leverage, resulting in strong earnings growth, like we experienced this quarter,” said McGill.
In addition to the strong start to the year, MarineMax says it is positioned to benefit from an enhanced presence in the strong Southeastern boating region of North and South Carolina along with Georgia as a result of the recent acquisition of Hall Marine. This acquisition complements MarineMax’s 2016 acquisition of Russo Marine in the New England area.
“Beyond the enhanced opportunities to increase market share, we have added considerable talent to our team through these acquisitions. As we enter the important boat show season, consumer confidence remains near recent highs, our backlog remains above last year and we have more new models for our team to sell and deliver,” McGill said. “This provides us with growing confidence as we look out to the remainder of 2017. With our passionate team, ongoing innovative new products and a substantial balance sheet, MarineMax should continue to build on its market share gains as we move ahead.”
McGill noted in the webcast that these acquisitions have continued to perform well, in particular Russo Marine, which exceeded expectations on all fronts. MarineMax expects Hall Marine Group to contribute meaningfully now and in the future.
“MarineMax will continue to maintain our disciplined approach to acquisitions, focused on creative dealers in strong markets with strong teams, and most important, similar cultures,” said McGill.
When asked if there were more acquisitions in the pipeline for MarineMax, McGill answered with a strong affirmative, noting the company takes its time determining whether or not the cultures are right for the company. He pointed out the seamless assimilation of Russo Marine and Hall Marine Group into the MarineMax family as proof of why this is necessary for the company.
“We’re not out doing acquisitions just for territory or to grow the company. We want to make sure the business will continue and the people will continue,” said McGill. “We’re interested in the senior people in the company and management.”
The company was further asked about whether MarineMax was seeing increased competition for deals, due to increased merger & acquisition activity in the marina and boat dealer segments. McLamb confirmed the marina segment has seen an increase in competition due to a few large players, but said the company has not run into competition on the dealer front with the companies it is targeting.
“There is a little bit of increased activity out there, but for the type of dealers we are looking at and with the succession planning they’re doing, and the planning for their teams and who they want their teams to be working for, we haven’t run into any competition for the dealers we’re talking to,” he said.
2017 guidance updated
Based on current business conditions, retail trends and other factors, the company is raising its annual guidance expectations for fully taxed earnings per diluted share to be in the range of $1.14 to $1.24 for fiscal 2017 from its previous guidance of $1.04 to $1.14. These expectations do not take into account, or give effect for, future material acquisitions that may be completed by the company during the fiscal year or other unforeseen events.
“We now expect to deliver same-store sales growth for the full fiscal year of approximately 10 to 11 percent, with the potential to exceed that. This is up from the 10 plus-our-minus range we provided in our prior earnings calls,” said Michael McLamb, chief financial officer at MarineMax.
For more information, visit www.marinemax.com.
