MARINEMAX INC

Previous wording

We believe we are the largest recreational boat and yacht retailer and superyacht services company in the world. Through our current 83 retail locations in 21 states, we sell new and used recreational boats and related marine products, including engines, trailers, parts, and accessories. We also arrange related boat financing, insurance, and extended service contracts; provide boat repair and maintenance services; offer yacht and boat brokerage sales; and, where available, offer slip and storage accommodations. In the British Virgin Islands we offer the charter of catamarans, through MarineMax Vacations. We also own Fraser Yachts Group, a leading superyacht brokerage and luxury yacht services company with operations in multiple countries, Northrop & Johnson, another leading superyacht brokerage and services company with operations in multiple countries, SkipperBud’s, one of the largest boat sales, brokerage, service and marina/storage groups in the United States, and Cruisers Yachts, a manufacturer of sport yacht and yachts with sales through our select retail dealership locations and through independent dealers.

Current wording

We believe we are the world’s largest recreational boat, yacht and superyacht services company. Through our over 75 retail locations in 21 states, we sell new and used recreational boats and related marine products, including engines, trailers, parts, and accessories. We also arrange related boat financing, insurance, and extended service contracts; provide boat repair and maintenance services; offer yacht and boat brokerage sales; and, where available, offer slip and storage accommodations. In the British Virgin Islands we offer the charter of catamarans, through MarineMax Vacations. We also own Fraser Yachts Group, a leading superyacht brokerage and luxury yacht services company with operations in multiple countries, Northrop & Johnson, another leading superyacht brokerage and services company with operations in multiple countries, SkipperBud’s, one of the largest boat sales, brokerage, service and marina/storage groups in the United States, and Cruisers Yachts, a manufacturer of sport yacht and yachts with sales through our select retail dealership locations and through independent dealers.

Previous wording

In November 2021, we acquired Intrepid Powerboats, a manufacturer of powerboats, and Texas MasterCraft, a watersports dealer in Northern Texas. In April 2022, through Northrop & Johnson, we acquired Superyacht Management, S.A.R.L., better known as SYM, a superyacht management company based in Golfe-Juan, France. In August 2022, we expanded our presence in Texas by acquiring Endeavour Marina in Seabrook. In October 2022, we completed the acquisition of IGY Marinas. IGY Marinas maintains a network of luxury marinas situated in yachting and sport fishing destinations around the world. IGY Marinas has created standards for service and quality in nautical tourism. It offers a global network of marinas in the Americas, the Caribbean, Europe, and Asia, delivering year-round accommodations. IGY Marinas caters to a wide variety of luxury yachts, while also being exclusive home ports for some of the world’s largest megayachts. In December 2022, we acquired Midcoast Marine Group, a leading full-service marine construction company based on Central Florida's Gulf Coast. In January 2023, we acquired Boatzon, a boat and marine digital retail platform, through our technology entity, New Wave Innovations. In June 2023, we acquired C&C Boat Works, a full-service boat dealer in Crosslake, Minnesota. In October 2023, we acquired a controlling interest of AGY, a luxury charter management agency based in Athens, Greece. In March 2024, we acquired Williams Tenders USA, a premier distributor and retailer for UK-based Williams Jet Tenders Ltd., the world’s leading manufacturer of rigid inflatable jet tenders for the luxury yacht market.

Current wording

In November 2021, we acquired Intrepid Powerboats, a manufacturer of powerboats, and Texas MasterCraft, a watersports dealer in Northern Texas. In April 2022, through Northrop & Johnson, we acquired Superyacht Management, S.A.R.L., better known as SYM, a superyacht management company based in Golfe-Juan, France. In August 2022, we expanded our presence in Texas by acquiring Endeavour Marina in Seabrook. In October 2022, we completed the acquisition of IGY Marinas. IGY Marinas maintains a network of luxury marinas situated in yachting and sport fishing destinations around the world. IGY Marinas has created standards for service and quality in nautical tourism. It offers a global network of marinas in the Americas, the Caribbean, Europe, and Asia, delivering year-round accommodations. IGY Marinas caters to a wide variety of luxury yachts, while also being exclusive home ports for some of the world’s largest megayachts. In December 2022, we acquired Midcoast Marine Group, a leading full-service marine construction company based on Central Florida's Gulf Coast. In January 2023, we acquired Boatzon, a boat and marine digital retail platform, through our technology entity, New Wave Innovations. In June 2023, we acquired C&C Boat Works, a full-service boat dealer based in Crosslake, Minnesota. In October 2023, we acquired a controlling interest of AGY, a luxury charter management agency based in Athens, Greece. In March 2024, we acquired Williams Tenders USA, a premier distributor and retailer for UK-based Williams Jet Tenders Ltd., the world’s leading manufacturer of rigid inflatable jet tenders for the luxury yacht market.

Previous wording

General economic conditions and consumer spending patterns can negatively impact our operating results. Unfavorable local, regional, national or global economic developments or uncertainties regarding future economic prospects could reduce consumer spending in the markets we serve and adversely affect our business. Economic conditions in areas in which we operate dealerships, particularly Florida in which we generated approximately 50%, 51%, and 53% of our dealership revenue during fiscal 2021, 2022, and 2023, respectively, can have a major impact on our operations. Local influences, such as corporate downsizing, military base closings, and inclement weather such as hurricanes and other storms, environmental conditions, and specific events, such as the BP oil spill in the Gulf of Mexico in 2010, also could adversely affect, and in certain instances have adversely affected, our operations in certain markets.

Current wording

General economic conditions and consumer spending patterns can negatively impact our operating results. Unfavorable local, regional, national or global economic developments or uncertainties regarding future economic prospects could reduce consumer spending in the markets we serve and adversely affect our business. Economic conditions in areas in which we operate dealerships, particularly Florida in which we generated approximately 50%, 51%, and 53% of our dealership revenue during fiscal 2021, 2022, and 2023, respectively, can have a major impact on our operations. Local influences, such as corporate downsizing, military base closings, and inclement weather such as hurricanes and other storms, environmental conditions, and specific events, such as the BP oil spill in the Gulf of Mexico in 2010, also could adversely affect, and in certain instances have adversely affected, our operations in certain markets. In addition, adverse conditions imposed by national, state and/or local governmental bodies, such as the recent seizure of the Cabo Marina, S. de R.L. de C.V. port in Mexico, could adversely affect, and in certain instances, have adversely affected, our operations in certain markets.

Previous wording

As of March 31, 2024, the Retail Operations segment includes the activity of 83 retail locations in Alabama, California, Connecticut, Florida, Georgia, Illinois, Maryland, Massachusetts, Michigan, Minnesota, Missouri, New Jersey, New York, North Carolina, Ohio, Oklahoma, Rhode Island, South Carolina, Texas, Washington and Wisconsin, where we sell new and used recreational boats, including pleasure and fishing boats, with a focus on premium brands in each segment. We also sell related marine products, including engines, trailers, parts, and accessories. In addition, we provide repair, maintenance, and slip and storage rentals; we arrange related boat financing, insurance, and extended service contracts; and we offer boat and yacht brokerage sales, and yacht charter services. In the British Virgin Islands, we offer the charter of catamarans, through MarineMax Vacations. Fraser Yachts Group and Northrop & Johnson, leading superyacht brokerage and luxury yacht services companies with operations in multiple countries, are also included in this segment. Through IGY Marinas, which is also included in this segment, we maintain a network of strategically positioned luxury marinas situated in yachting and sport fishing destinations around the world. The Retail Operations segment includes the majority of all corporate costs.

Current wording

As of June 30, 2024, the Retail Operations segment includes the activity of over 75 retail locations in Alabama, California, Connecticut, Florida, Georgia, Illinois, Maryland, Massachusetts, Michigan, Minnesota, Missouri, New Jersey, New York, North Carolina, Ohio, Oklahoma, Rhode Island, South Carolina, Texas, Washington and Wisconsin, where we sell new and used recreational boats, including pleasure and fishing boats, with a focus on premium brands in each segment. We also sell related marine products, including engines, trailers, parts, and accessories. In addition, we provide repair, maintenance, and slip and storage rentals; we arrange related boat financing, insurance, and extended service contracts; and we offer boat and yacht brokerage sales, and yacht charter services. In the British Virgin Islands, we offer the charter of catamarans, through MarineMax Vacations. Fraser Yachts Group and Northrop & Johnson, leading superyacht brokerage and luxury yacht services companies with operations in multiple countries, are also included in this segment. Through IGY Marinas, which is also included in this segment, we maintain a network of strategically positioned luxury marinas situated in yachting and sport fishing destinations around the world. The Retail Operations segment includes the majority of all corporate costs.

Previous wording

The following discussion compares the three and six months ended March 31, 2024, with the three and six months ended March 31, 2023 and should be read in conjunction with the Unaudited Condensed Consolidated Financial Statements, including the related notes thereto, appearing elsewhere in this report.

Current wording

The following discussion compares the three and nine months ended June 30, 2024, with the three and nine months ended June 30, 2023 and should be read in conjunction with the Unaudited Condensed Consolidated Financial Statements, including the related notes thereto, appearing elsewhere in this report.

Previous wording

Revenue. Revenue increased $12.6 million, or 2.2%, to $582.9 million for the three months ended March 31, 2024, from $570.3 million for three months ended March 31, 2023. The increase was due to an increase of $12.5 million, or 2%, in comparable-store sales, in addition to a $0.1 million net increase from acquisitions (AGY and C&C) that are not eligible for inclusion in comparable-store sales as well as a decrease in manufacturing revenue, which is not included in comparable retail store sales. The comparable-store increase came primarily from increases in new and used boat revenue along with contributions from our other higher margin businesses.

Current wording

Revenue. Revenue increased $35.9 million, or 5.0%, to $757.7 million for the three months ended June 30, 2024, from $721.8 million for the three months ended June 30, 2023. The increase was due to an increase of $27.9 million, or 4%, in comparable-store sales, in addition to an $8.0 million net increase from acquisitions and new locations that are not eligible for inclusion in comparable-store sales. This was partially offset by a decrease in manufacturing revenue, which is not included in comparable retail store sales. The comparable-store increase came primarily from increases in new and used boat revenue along with contributions from our other higher margin businesses.

Previous wording

Gross Profit. Gross profit decreased $10.5 million, or 5.2%, to $190.4 million for the three months ended March 31, 2024, from $200.9 million for the three months ended March 31, 2023. Gross profit as a percentage of revenue decreased to 32.7% for the three months ended March 31, 2024, from 35.2% for the three months ended March 31, 2023. The decrease in gross profit as a percentage of revenue was primarily the result of lower new and used boat margins as we aggressively drove sales during a softer retail environment.

Current wording

Gross Profit. Gross profit decreased $1.7 million, or 0.7%, to $242.1 million for the three months ended June 30, 2024, from $243.8 million for the three months ended June 30, 2023. Gross profit as a percentage of revenue decreased to 32.0% for the three months ended June 30, 2024, from 33.8% for the three months ended June 30, 2023. The decrease in gross profit as a percentage of revenue was primarily the result of lower new and used boat margins as we aggressively drove sales during a softer retail environment.

Previous wording

Selling, General, and Administrative Expenses. Selling, general, and administrative expenses increased $23.5 million, or 16.2%, to $169.0 million for the three months ended March 31, 2024, from $145.5 million for the three months ended March 31, 2023. The increase in selling, general, and administrative expenses was primarily the result of inflation and recent acquisitions.

Current wording

Selling, General, and Administrative Expenses. Selling, general, and administrative expenses increased $11.9 million, or 7.0%, to $181.1 million for the three months ended June 30, 2024, from $169.2 million for the three months ended June 30, 2023. The increase in selling, general, and administrative expenses was primarily the result of inflation and recent acquisitions.

Previous wording

Interest Expense. Interest expense increased $6.1 million to $19.4 million for the three months ended March 31, 2024, from $13.3 million for the three months ended March 31, 2023. The increase in interest expense was primarily the result of increased interest rates and increased borrowings due primarily to higher inventory levels.

Current wording

Interest Expense. Interest expense increased $3.4 million to $18.2 million for the three months ended June 30, 2024, from $14.8 million for the three months ended June 30, 2023. The increase in interest expense was primarily the result of increased interest rates and increased borrowings due primarily to higher inventory levels.

Previous wording

Income Taxes. Income tax expense decreased $11.6 million to $0.6 million, for the three months ended March 31, 2024, from $12.2 million for the three months ended March 31, 2023. The effective income tax rate for the three months ended March 31, 2023 and 2024 was 29.0% and 28.5%, respectively.

Current wording

Income Taxes. Income tax expense decreased $4.4 million to $11.1 million, for the three months ended June 30, 2024, from $15.5 million for the three months ended June 30, 2023. The effective income tax rate for the three months ended June 30, 2023 and 2024 was 25.9%.

Previous wording

Six Months Ended March 31, 2024 Compared with Six Months Ended March 31, 2023

Current wording

Nine Months Ended June 30, 2024 Compared with Nine Months Ended June 30, 2023

Previous wording

Revenue. Revenue increased $32.0 million, or 3.0%, to $1.110 billion for the six months ended March 31, 2024, from $1.078 billion for six months ended March 31, 2023. The increase is due to a $31.6 million, or 3%, increase in comparable-store sales in addition to a $0.4 million net increase from acquisitions (AGY and C&C) that are not eligible for inclusion in comparable-store sales as well as a decrease in manufacturing revenue, which is not included in comparable retail store sales. The comparable-store increase came primarily from increases in new and used boat revenue along with contributions from our other higher margin businesses.

Current wording

Revenue. Revenue increased $68.0 million, or 3.8%, to $1.868 billion for the nine months ended June 30, 2024, from $1.800 billion for the nine months ended June 30, 2023. The increase is due to a $59.8 million, or 3%, increase in comparable-store sales in addition to an $8.2 million net increase from acquisitions and new locations that are not eligible for inclusion in comparable-store sales. This was partially offset by a decrease in manufacturing revenue, which is not included in comparable retail store sales. The comparable-store increase came primarily from increases in new and used boat revenue along with contributions from our other higher margin businesses.

Previous wording

Gross Profit. Gross profit decreased $21.9 million, or 5.6%, to $365.9 million for the six months ended March 31, 2024, from $387.8 million for the six months ended March 31, 2023. Gross profit as a percentage of revenue decreased to 33.0% for the six months ended March 31, 2024, from 36.0% for the six months ended March 31, 2023. The decrease in gross profit was primarily the result of lower new and used boat margins, as we aggressively drove sales during a softer retail environment.

Current wording

Gross Profit. Gross profit decreased $23.6 million, or 3.7%, to $608.0 million for the nine months ended June 30, 2024, from $631.6 million for the nine months ended June 30, 2023. Gross profit as a percentage of revenue decreased to 32.5% for the nine months ended June 30, 2024, from 35.1% for the nine months ended June 30, 2023. The decrease in gross profit was primarily the result of lower new and used boat margins, as we aggressively drove sales during a softer retail environment.

Previous wording

Selling, General, and Administrative Expenses. Selling, general, and administrative expenses increased $29.6 million, or 10.0% to $325.5 million for the six months ended March 31, 2024, from $295.9 million for the six months ended March 31, 2023. The increase in selling, general, and administrative expenses was primarily the result of inflation and recent acquisitions.

Current wording

Selling, General, and Administrative Expenses. Selling, general, and administrative expenses increased $41.5 million, or 8.9% to $506.6 million for the nine months ended June 30, 2024, from $465.1 million for the nine months ended June 30, 2023. The increase in selling, general, and administrative expenses was primarily the result of inflation and recent acquisitions.

Previous wording

Interest Expense. Interest expense increased $14.9 million to $37.7 million for the six months ended March 31, 2024, from $22.8 million for the six months ended March 31, 2023. The increase in interest expense was primarily the result of increased interest rates and increased borrowings due primarily to higher inventory levels.

Current wording

Interest Expense. Interest expense increased $18.4 million to $56.0 million for the nine months ended June 30, 2024, from $37.6 million for the nine months ended June 30, 2023. The increase in interest expense was primarily the result of increased interest rates and increased borrowings due primarily to higher inventory levels.

Previous wording

Income Taxes. Income tax expense decreased $18.8 million, to $0.4 million for the six months ended March 31, 2024, from $19.2 million for the six months ended March 31, 2023. The effective income tax rate for the six months ended March 31, 2023 and 2024 before discrete items was 27.9%.

Current wording

Income Taxes. Income tax expense decreased $23.2 million, to $11.5 million for the nine months ended June 30, 2024, from $34.7 million for the nine months ended June 30, 2023. The effective income tax rate for the nine months ended June 30, 2024 and 2023 was 25.2% and 26.9%, respectively.

Previous wording

For the six months ended March 31, 2024 and 2023, cash used in operating activities was approximately $111.2 million and $250.5 million, respectively. For the six months ended March 31, 2024, cash used in operating activities was primarily related to increases in inventory, increases in accounts receivable, decreases in accounts payable, decreases in in contract liabilities (customer deposits), partially offset by our net income adjusted for non-cash expenses and gains such as depreciation and amortization expense, deferred income tax provision, and stock-based compensation expense. For the six months ended March 31, 2023, cash used in operating activities was primarily related to increases in inventory, increases in accounts receivable, and increases in accrued expenses and other liabilities, partially offset by decreases in customer deposits and our net income adjusted for non-cash expenses and gains such as depreciation and amortization expense, deferred income tax provision, stock-based compensation expense, and gain on acquisition of previously held equity investment.

Current wording

For the nine months ended June 30, 2024 and 2023, cash used in operating activities was approximately $24.9 million and $196.9 million, respectively. For the nine months ended June 30, 2024, cash used in operating activities was primarily related to increases in inventory, increases in accounts receivable, decreases in accounts payable, decreases in in contract liabilities (customer deposits), partially offset by our net income adjusted for non-cash expenses and gains such as depreciation and amortization expense, deferred income tax provision, and stock-based compensation expense. For the nine months ended June 30, 2023, cash used in operating activities was primarily related to increases in inventory and increases in accounts receivable, partially offset by decreases in customer deposits increases in accrued expenses, and our net income adjusted for non-cash expenses and gains such as depreciation and amortization expense, deferred income tax provision, stock-based compensation expense, and gain on acquisition of previously held equity investment.

Previous wording

For the six months ended March 31, 2024 and 2023, cash used in investing activities was approximately $49.9 million and $524.2 million, respectively. For the six months ended March 31, 2024, cash used in investing activities was primarily used to purchase property and equipment associated with improving existing retail facilities, partially offset by proceeds from insurance settlements. For the six months ended March 31, 2023, cash used in investing activities was primarily used for the IGY Marinas acquisition and to purchase property and equipment associated with improving existing retail facilities.

Current wording

For the nine months ended June 30, 2024 and 2023, cash used in investing activities was approximately $64.8 million and $564.1 million, respectively. For the nine months ended June 30, 2024, cash used in investing activities was primarily used to purchase property and equipment associated with improving existing retail facilities and acquisitions, partially offset by proceeds from insurance settlements. For the nine months ended June 30, 2023, cash used in investing activities was primarily used for the acquisition of IGY Marinas, and to purchase investments, property and equipment associated with improving existing retail facilities, partially offset by proceeds from insurance settlements and proceeds from investments.

Previous wording

For the six months ended March 31, 2024 and 2023, cash provided by financing activities was approximately $175.4 million and $748.9 million, respectively. For the six months ended March 31, 2024, cash provided by financing activities was primarily attributable to net increases in short-term borrowings, which solely consisted of the Floor Plan, and net proceeds from issuance of common stock under incentive compensation and employee purchase plans, partially offset by payments on long-term debt, contingent acquisition consideration payments and payments on tax withholdings for equity awards. For the six months ended March 31, 2023, cash provided by financing activities was primarily attributable to proceeds from long term debt and net increases in short-term borrowings, partially offset by payments on long-term debt, contingent acquisition consideration payments and payments on tax withholdings for equity awards.

Current wording

For the nine months ended June 30, 2024 and 2023, cash provided by financing activities was approximately $130.1 million and $756.8 million, respectively. For the nine months ended June 30, 2024, cash provided by financing activities was primarily attributable to net increases in short-term borrowings, which solely consisted of the Floor Plan (as defined below), and net proceeds from issuance of common stock under incentive compensation and employee purchase plans, partially offset by payments on long-term debt, contingent acquisition consideration payments, purchases of treasury stock, and payments on tax withholdings for equity awards. For the nine months ended June 30, 2023, cash provided by financing activities was primarily attributable to proceeds from long term debt, net increases in short-term borrowings, which solely consisted of the Floor Plan, and net proceeds from issuance of common stock under incentive compensation and employee purchase plans, partially offset by payments on long-term debt, contingent acquisition consideration payments and payments on tax withholdings for equity awards.

Previous wording

As of March 31, 2024, our indebtedness associated with our short-term borrowings, which solely consisted of the Floor Plan, and our long-term debt including the current portion totaled approximately $736.7 million and $406.4 million, respectively. As of March 31, 2024, short-term borrowings, which solely consisted of the Floor Plan, and long-term debt recorded on the Unaudited Condensed Consolidated Balance Sheets included unamortized debt issuance costs of approximately $1.4 million and $1.7 million, respectively. Refer to Note 10 of the Notes to the Consolidated Financial Statements for disclosure of borrowing availability, interest rates, and terms of our short-term borrowings (Floor Plan) and long-term debt.

Current wording

As of June 30, 2024, our indebtedness associated with our short-term borrowings, which solely consisted of the Floor Plan, and our long-term debt, including the current portion, totaled approximately $701.2 million and $364.1 million, respectively. As of June 30, 2024, short-term borrowings, which solely consisted of the Floor Plan, and long-term debt recorded on the Unaudited Condensed Consolidated Balance Sheets included unamortized debt issuance costs of approximately $1.4 million and $1.6 million, respectively. Refer to Note 10 of the Notes to the Consolidated Financial Statements for disclosure of borrowing availability, interest rates, and terms of our short-term borrowings (Floor Plan) and long-term debt.

Previous wording

Our business, as well as the entire recreational boating industry, is highly seasonal, with seasonality varying in different geographic markets. With the exception of Florida, we generally realize significantly lower sales, higher levels of inventories, and related short-term borrowings, which solely consisted of the Floor Plan, in the quarterly periods ending December 31 and March 31. The onset of the public boat and recreation shows in January generally stimulates boat sales and typically allows us to reduce our inventory levels and related short-term borrowings, which solely consisted of the Floor Plan, throughout the remainder of the fiscal year. Our expansion into boat storage may act to reduce our seasonality and cyclicality.

Current wording

Our business, as well as the entire recreational boating industry, is highly seasonal, with seasonality varying in different geographic markets. With the exception of Florida, we generally realize significantly lower sales, higher levels of inventories, and increased related short-term borrowings, which solely consisted of the Floor Plan, in the quarterly periods ending December 31 and March 31. The onset of the public boat and recreation shows in January generally stimulates boat sales and typically allows us to reduce our inventory levels and related short-term borrowings, which solely consisted of the Floor Plan, throughout the remainder of the fiscal year. Our expansion into boat storage may act to reduce our seasonality and cyclicality.