MarineMax (HZO) 27 Jul 232023 Q3 Earnings call transcript

Good morning, and welcome to the MarineMax, Inc. Fiscal 2023 Third Quarter Conference Call. Today's call is being recorded. [Operator Instructions]. At this time, I would like to turn the call over to Mr. company's firm, the Merrill. of Solomon Investor Sharon Relations Scott Please sir. go ahead,

happy and management Thank good Brett Brett concluding joining Officer Brett and will and highlights, Financial you, results. company's will company's you will McLamb, McGill, questions. of and to the Mike comments, morning, Executive discuss are Thank financial Officer. take call take some everyone. for your you will Chief the MarineMax; be make today's us. Chief then operating the President Mike Hosting through

now, should earnings you. to IR copy today. please By you copy a have of e-mailed our release If received the e-mail team a and be issued at hboinvestorrelations.com, that was will not,

I'll the With to that, Mike. turn over call

this that Commission. expectations. to company's risks on or to by that of statements and defined other Reform Thank actual as from other you, Scott. XXXX. of numerous Good global certain by uncertainties morning, Litigation our grow XX-K level forward-looking with cause market in conditions everyone, Form involve risks limited forward-looking I'd joining spending, the seasonality reminding and start These impact and capitalize filings call. materially include, statements weather, economic not you but and Securities the consumer Act results and Any share and could of to, ability differ Exchange comments to for the of the are of statements our are thank its Securities and opportunities factors as today. identified the These only Private like speak you

in measures investors GAAP of reconciliation today's measures. We between to comments available comparable make of gain will comparisons companies a in most the to metrics believe these company's the we help operating non-GAAP A the directly both changes earnings basis. and and make other who financial inclusion understanding to call, wish measures non-GAAP core on results. can of financial a non-GAAP today's on also GAAP Also MarineMax meaningful is that a the help investors These release. financial referring measures

me that, Brett? turn Brett. to let over With the call

and Thank you, Mike, us. and for joining morning, good thank you everyone,

As boating we've customer thanking by staying years our $XXX consistently success efforts of our marinas team world, world strong our performance. strong by the record built to great experience. third and the including that revenue new whose contributed locations, mission financial central our to to embodies world's to driven pleasure all service quarterly XX the million, Across a the secret more our always, reputation close I'd past teams quarter for over a of operational like and begin around our the MarineMax relationships The is around our to than been delivering XX best The customers. have MarineMax.

our X from of proud keeping outstanding happy, our I our begin our while to morning, point, I'm team's with like Promoter the Score. to continually raise most our of customers Net performance. am This as by I'd proud key that To ability accomplishments, financial QX bar takeaways in evidenced

margin profile MarineMax's acquisitions higher-margin we First, business. through enhance strategy to expansion our delivering and on structurally are into

owned well is IGY platform growth positioned already to short growth. as potential the Marinas, in its Second, a has we've demonstrate to and time drive begun it

for confident from global the MarineMax market the and strong are lifestyle. and while affect economic from world's with that passion highly such upgrading we third, quarter-to-quarter, we results that both are factors are long-term seasonality fueling perspective, our a boating in And as conditions may And the our trends lens. position

that company's not premium X of and continues the history sales These months strongest specifics to a in the had but clear Turning prior to brand our June. in quarter, is Even anticipated, margins. to suggested strategic the through that strategy, drive favorable were of returning biggest were we began the calls. to trend industry only line the quarter But further declines in modest see we to becoming seasonality, is the activities, gains higher it's industry to as in the moves that while in gratifying achieve marketing with and market our outperform sustaining strong able the we we growth the customer-centric to other May -- drive share is end margin top on other segments. and revenue consolidated

higher. of gross point, that XXth the marked To or margins, QX quarter consecutive XX%

unquestionably areas yacht service, of While super services, reduced have and and our year, our other to all cyclicality solid so IGY manufacturing of margin which business performance revenue diversify stream. marinas, of our contributed including the has of business, this lines our

Our other percentage of sales our as continue boat revenue a categories to grow business. outside of

is C&C During Minnesota's business generational works, we understood example dealerships in in type to cash a of acquired is quarter, a boat higher into in XX which of that they a importance the third undoubtedly capability. than fish of certainly run white addition This chain acquire. over annually boats great to a the storage, lakes. were XXX marina family the margins It's C&C seek flows. important reason for more well diversifying boat and stores their Boat business years. of dealer big C&C drive we great helps

strategy. financial pipeline identifying to higher-margin potential priorities, M&A active, that and in continue our be advance the opportunistic our to operational businesses industry is focused including The have we and

With our and to number active. around the superyacht very increasing, superyachts be steadily services the continue size of organizations world,

superyacht to organizations our synergies produce stronger those for are and IGY benefits Additionally, and clientele. working

some world's global closest to will expanding been We waterfront this superyacht in to To taking development new at network and IGY that the with customers. are announced superyacht become community and be This the the island Marina luxury Europe for operate destination superyacht a scratch a be platform. will point, but of Sea. collection which adding ultra-prime Sindala, our marinas prestigious NEO, Red a in destination. the yachting help exciting Marinas surface shape growth in another iconic of our marina a Mediterranean, just June, Marina has opportunities. develop for not and partnership will is the destination beginning an further the best IGY world's of a IGY those simply of engaged gigaproject's and

We customer capitalize a to are on this alliance set for expertise Neon experience. premium we IGY's the unique benchmark Sindala help about excited as new and

model are for new announced enthusiasm, largest very been Swansburg, be boats also I'll with time, announcement detailed on has comments operation. exceeding our ahead and both ever. pleased Intrepid long building with the We a are for, larger companies. boats, times provide the And cruisers we'll the update, of Intrepid XX-foot has waiting model Mike been progress power to just Intrepid, for and It's begin Carolina will with at expectations. North a Their flagship which Intrepid the tremendous yacht our ask that something the Mike? exciting Nation more quarter. greeted that

quarter in for $X Thank clearly our another the well. $XXX you, revenue things when our was Brett. The for record demand To to with I ago over was million team producing billion. in long around and annual alive thank put perspective, is it revenue. also boating want not that lifestyle

revenue our which on April, in strategic accelerate While earnings in the and helped strongest ended as the June, being up Brett call, moves history. X our we quarter March months business the opened mentioned quarter the May noted with down

acquisitions. which both the grew seasonal as was and in future. boats Geographically, bright surprisingly, other we to the growth foreseeable spot, supports Midwest commentary. the recent like Florida trend markets performed for expect a Not a well, continue a as yachts cruiser Revenue in sales Intrepid reflecting the same-store well quarter the and primarily addition increase modest X%, about power of in IGY,

pontoon Our tow was sluggishness and April unit volume down boat in industry double sales. given digits in the low softness and continued

and brands But many showed May in our of June, premium growth.

premium strong focus, revenue, gross on $XXX rise. to margin combined continues strength XX.X%. of our profit our price increased with selling a Given to the of average unit million Gross healthy

offset to costs decline as As we planned $XXX have while efficient margins, our our well where we inflationary for to as combined our expenses provide the to customers. on of of for by the impacting ways possible for experiences businesses other to primarily boat SG&A not over modest environment. IGY. with a anticipated service acquired, companies, increased Like we more and other reduce the and outstanding addition we to be continue last ability look addition and million due IGY in indicated partially call,

Interest plan last interest floor expense higher the rates IGY in more to related had interest the of million, year. debt increased long-term we $X and reflecting $XX.X basically higher costs million increase X quarter, by to than inventory. In compared

net On the bottom share of year. line, million we or $XX million share $XX of or generated income per last net income $X.XX diluted $X.XX to per compared GAAP diluted over

expense. compared with net Adjusted $XXX million higher the diluted primarily was interest the income basis, year, with a On million for On per $XX as year, million about share for year-to-date last an million $X.XX was income share year. with difference. adjusted of $XX due diluted or EBITDA quarter was floor well to million million $XX adjusted net $XX EBITDA compared interest lower basis, or $XXX per plan the as million $X.XX plan making compared floor up last with last $XXX quarter

X% the balance more XXXX million, of down On increased was inventories are modest ended with of XX% a Inventories the to than at unit which from same-store end June We the Moving more $XXX quarter expected. in with up of cash sheet. on to this than a bit million. basis, quarter levels. $XXX March, we is neighborhood compared

XXXX, for inventory and While some like more to use we'd than brands models today. be lower could it we

showing increased the timing to $XX very at million, Customer lifestyle. Looking rose largely liabilities, of due boating demand the high deposits and for short-term of the be inventories strength historically payments. our borrowings continue at to

deposits to as time We meet more gradually expect modestly customer to allowing quickly builds decline over us inventory demand.

remains strong. liquidity position Our

additional quarter available form and less the liquidity $XXX of inventory than plus debt credit lines that of we have to was net EBITDA totaled At one, in cash million. of unlevered end,

historical facility for Additionally, This announced according of as needed of is consistent our in plan million earlier our floor agreement. adding by credit the our floor feature capacity this $XXX we practice month, increase of growth. as with we part increased

easily the facility a our fundamentals and our and strong relationships debt market partners. have more lending sheet, smoothly is underlying strength our of we built of despite the a increase the balance challenging with to ability Our reflection

Based are Turning XXXX our on we to guidance. year-to-date adjusting guidance. results, our

macroeconomic has been on a forecast noted this given combined to the year seasonality prior return As to Fed-driven challenging industry's with the uncertainty. calls,

same-store industry which results will unit strength includes retail significant industry the the the year, XXXX the the in the will double did year year, digits. declines This April. saw expectation year uptick industry, that through our our fiscal range. For despite December believe around be sales mid-single-digit in last our mind, units fiscal still be as fiscal Keep we our this in down quarter down in recent year

seen concentration us. premium date, have we benefit to our to product As continue should

decline modest IGY a to margins to higher-margin fiscal guidance, partially for with expect We be was business offset our the consistent mid-XXs. and moderation in still by margin XXXX past other due which product but

are is as to well as also inventories expense higher We due assuming elevated rates. year-over-year interest

the year earnings, we moved will annual and As have approach we tax idea have a pretax through XXXX believe XX%. our of for sources rate better the

low end range of raising expect end our XX.X a year the shares. assumes our We same. share are the to $X.XX. count million share we adjusted range guidance to now per the the of leaving earnings in Accordingly, of XXXX $X.XX This top and guidance be fiscal

In of $XXX to we million. in EBITDA range adjusted to are addition, $XXX the forecasting be XXXX million

said July I'll trends, work Having Brett? looking to call turn that, to the of same-store much the rest with that, over the With the Brett sales Looking finish closing the through rest of to quarter. boaters growth for back are ahead at comments. have we current enjoy as summer. positive is forecasted

been the impact being freedom with on booming. on more recreational globe, more U.S. industry final XXXX pronounced the of of recreational than based entered And Thanks, economic the fiscal fundamentals voting our across despite At and more the the annual the billion, customers seasonality business in the enjoyment the of marine and out quarter partners the positive our with interactions across never strong. Mike. We $XXX industry, the has momentum of remain is robust. water

reduces seasonality. time, to a Our income over exposure provide higher-margin the stream businesses diversified industry that

important, put global please a generate to footing sustained competitive as assets growth. on Just with that, up long-term like line open the And for us operator, IGY questions.

[Operator Instructions].

Hardiman from James question first from is Citi. Our

be a Could you -- really then a same-store break you maybe number? AUP, us specific would in is out be And I more the give unique number bit said this was you sales specific just can there? it little think helpful. that

Yes. even Thanks, up, to it's but round Yes, X%. James. it doesn't

So it's X. above

digits. were it's our especially low units So to was. a of down nice down have say did like being with bit And we growth, the little in double it April

positive get have sales, you're double AUP they digits, going same-store you that. an to growth So of if to will, have

ones, units, in I Yes, sluggish you some -- pontoons quarter. said in we're -- were clarity. hope the other think we So the which

digits I Okay. quarter. the Helpful. sure like with full to if the sounds low double was quarter wasn't that's say it it

Okay. think the you there? you Is I said And still same. mid-single-digit a industry revised I down then what's number, guys of take sort ASPs sales And you function single better digits. about of were high that? the assuming think should think on bridge even a commentary as what that though guidance, is How the same-store is now sort previously driving I

in a industry It's to mid-single-digit stronger look we first year X months the the being modestly of June the down anticipated you bake quarter high. now you versus at with how we year when stronger, range performed get the really assumptions, for rest the and of the than had

So March that the it's comment we the of quarter. fine-tuning made at just the end

Okay.

I down think mid-single-digit units decline, be more meaningfully something about to if are so than still that expected And that.

saying expect meaningfully you're to first quarters. in be think the you pretty X for still ASP case year. been and obviously I that's the Obviously, the

the ASP the that fiscal to -- growth and people we units industry that units, be industry our Yes, talk about be what going because to is be digits. a we up. always the double-digit down year sales confused mid-single in bit And in same-store probably believe, for our supposed little to is continue is going in year the to do the will we our

unit as a perspective, from unit the won't premium we our average price growth to continue focus migration down product. industry far the of be have we our will quite because as the selling well, on of in So larger

to the it July? units commentary, like a then into Got same-store pricing Were Can same? say primarily be we basis. up that on you July expect sounds up it. Or lastly, sales it actually And method? was the a to

AUP, know now, You specifically comment on is much right or what, can't be really over, to prior the forecasted units is over it not the so up I just but year.

[indiscernible] Stifel. is with next question from Our

And mentioned on can And trend few Mike, the IGY next inventory your from partnership NEOM. if you historical there's any between line? build then at the how comment across and quarters? stores maybe, deviation you the the over you're looking Brett,

plans sense Just Beyond longer is to Sindal here what destination trying marinas does pipeline look the like? what a to get the a set the for term at for as new opportunity for

-- I thank you, Drew. can

inventory. the good one, especially On the perspective, of because from the find year-over-year. a end, a I is the inventory on I kind we're question, down to industry it's there's trying And right XX% premium think still, level unit of said

where you the or inventories September. go if end grew couple -- bit quarter if we're ago, back back but little to years that just of flat a would a the in June probably trend we quarter the at either maybe in to of fall June the are had the quarter. an be one they Typically, So finished, inventories unusual quarter fall modestly traditionally

again, actually lot begin be March. build all off unit and get where think build from on can to perspective, we in assuming actually you when December, end because the depends inventories of they drop the June strength in sometimes the as perspective quarter And build the and that a inventories then way March at seasonality September, quarter quarter. it will always from are into the retailing they a more of given significant the inventories stay modestly build pretty might end March the I taper a of industry, all to the

in will the and So maybe quite quarter. next June December March through would if through then year, bit build assume fall now seasonal patterns a from inventories and I we more assume

question Yes. platform. view and it. comment. IGY for We the Yes. the did Andrew, growth part we about it as there. a Thanks why growth I'll That's of

of at also We adding effect in like recognized looked it there future network the with Marina Sandalas you've and here. the

a an the of there. marinas that, look. in on lot we're Another relates be things destinations pretty, going do continue pipeline growth superyachts, on and varying opportunistic effect and to have and out It's pretty platform, of trying an clearly, the cost but that point capital world destination the for exciting. right the it to now are to But as active of opportunities our

Our with Joe James. is next question from Altobello Raymond

more big that? gotten to trends Is little just maybe seasonality? much on this is the question, both I a retail like of more doesn't something the backdrop normal there over what's the guess, a sort couple color that's and picture improved of has drive Or macro months, bit yourselves driving helping industry. It past the better. else for seem

March after to retail think much quarter, work we more kind meaning requiring I discounting, promotional can't some it's and a said just back that Joe, demand programs, activity. of and seasonality out when is tell go applied was there's of some of think is. -- I you we natural, but struggled when some like -- needle. quarter we this we We We manufacturers, clearly, really in the each QX, think the et getting it past Not things the activity, promotional softness. Yes, lot more all I good move we cetera, with more there, our how

really see So northern it to our markets along boating It's the together so the the it put and was plans with season exciting work in and right? seasonality, on team on. that

small headwinds year boat And loan still So get -- boats ago. just is we there. a as the cost not to but it's -- the you're pressure. Interest putting out that reported right, there's rates, a in

across to the -- come effort more get it's the lot to sales for a little sales more to effort across a to So required get the the come board.

it. Got

of discussion a on year for as lot well. 'XX? we pricing, terms on this industry there's then do of Okay. about I guess, and And How affordability in emotions. gross guess others model basis, in think maybe net pricing about been point, and I that a

lectures? say you pricing, pricing When mean you do inflation-based the like and

Yes. Yes.

an it last for I'd industry couple model from is with relative year few XXXX of is the to manufacturers nice which low is what exceptions, increases historically from what very environment hearing to say the we're most saw inflationary-based very close single-digit years.

definitely working the of on. the the can We're for concern kind doing but of our inflation they They're it's what on slow all to with down models. way a growth working try we're find a the that manufacturers newer clearly industry to to

B. Riley Eric Our with next question is from Securities. Wold

talked one, categories, the going Two questions. and point segments? something those on out that you the weakness the I guess of specific price else been recently the you've called driven of pontoon you some towboat. in demographic around boating the is quarter about income there those kind target? Or of within categories mainly and by

Yes.

look think go, a boats I the because categories feeling things entry as that as effect But call sell the segments tech, year categories all on when payments, that like a boat. started lot and product not of it's across XXX,XXX end you -- of is are buyer. just at a pontoon the when quicker say level, other insurance far more, think we it, the that, down, pontoon lower ago, you lower-priced the pressure some I'll I of that of quicker

an So pontoon. it's expensive

segment just lower versus priced somewhat both. it's level related So or entry

last whatever bit just used about of give delta know then does. talked us boat of margin normalized Are room the Do new doing to everything to new know marketing Where new stronger margin, you That's sales things now for the those right. the are of is there? to environment a kind about recently. you some think point this sales? more at those a year's period. margins right from for it's Yes, news better decline where sense for and a try it to you quarter incorporate you seasonally the in there just versus further quarter and on I little And talked of drive sustainable kind or you're to I seeing gross a you and kind boats? promotions

the IGY the high. but used period, year down are this as ago obviously, a where strong. are do you of year, math and I year change -- something the have They margins which what's there higher-margin expect and had still really negative margins, historically moderation contributing IGY, other grew as still we going through guidance not sales And shrink grown, on of the to On which to you had negative I level comment. our growth, XXXX. also is you'll new from the see and a businesses as pricing we where continue our we year, your... in going product pretty we can were coming the this sales a same-store points XXXX margins of which -- meant quarter bit. north as expected little probably you margin they're haven't XXX developed some build, it's consolidated basis year-over-year. percentage. I for But all way all have sat mean the just a if the you higher-margin have would last XXXX, businesses down Brett, through inventories But

hot have we out Yes. drive products? this to to plays to call out now, just to seasonal needle. as the it new season, the on some pun a see going go We'll into, Right get also the do there to what there, fall. that promotions But we here we trying need no back how No, seasonality, and do but What think heat off move -- some during on sales? to market, we do is it, thinking apply I through right? this

question Our Fred from Wightman with next is Wolfe Research.

big quarter feel it on range. pretty a is seems the get high wide why maybe Wondering would the guidance, end to fourth swing factors be Just and the biggest such like appropriate to versus a low range like what end? the implied you

years having backlogs, never case few I I'll just industry. off were which just of in the massive the start it of quick. come we've a some mean

you're new of creating every quarter, So kind business.

or it So go some ahead. Mike, today of

is adjusted prudent X out obviously we that lot uncertainty and of had the -- range still guidance, there's a uncertainty. quarters just given down we've where there, and I think we

return is to is is events. how of a the macroeconomic seasonality, it how -- makes what difficult much much of it it Given

the it for to for felt leave like we -- range was wide just Fred. that the QX, So prudent

think the That's few then And you Okay. you've across you some And when the that? sort fair. activity touched just the competitors dealers that if and seeing you at match industry times, and level of look promo are different about of a other of mirror on peers are overall about sort everybody industry, sort will of that, we picking you in move just of think into through Or the you in up channel off the clear worried as and where the the inventory are is season? we from inventory promos do season?

each I'm concern Well, the do, right things, isn't worried an stay eye we I game think our the sure to through word, making the pressure there. inventories watching, industry, on It continue depends on the of competitors probably effect keeping on build as some will watching us the for that have competitive will sure. with. But an pressures how we're that which could deal because manufacturers create

question Michael next Swartz from Securities. Our is with Truist

from shows market talk This your in year years? the plans I to if and just Anything is could changing boat Lucas on invest wondering you was for about previous in ahead. Mike.

with shows there's and to we've with which been which very question. back, disciplined going attended. It's inventories shows to right? shows, make additional a then probably be And going ones no more cetera. cost, some attendance pandemic been you require for will still Good coming Yes. into reasons but started competitive pressures, et cases. when a We're except we've approach careful with shows, and that then Pre-pandemic couldn't attend. go And in then the boat wild you almost ride

but and I probably careful, to would say plays that -- we're out. shows return but measuring to not going we'll levels, but even it it we're how So historical see year, last back being carefully, maybe to more just

Davidson. from DA is Rolle with question next Our Brandon

on right had quarter. of quick I in the then Could you quick availability talk Congratulations the within And you're on just now. pricing follow-up had a about inventory seeing market? as market the question terms I strong well. used a what used and

pretty we good. them the pricing And on visibility late real darn use highly margins sought our and be to to Our is on take. trades continue model trades are them obviously after

Our after keep the doesn't an highly overall that always in there big product. really late from of any the view, kind are there ours used be And trades is seem were industry mind, perspective. out sought models similar to issues taken. on It's industry are just real

Okay.

And Could you're just support you're Great. retail? what incremental on promotional to versus support you maybe about maybe then the OEM promotional in providing talk activity. seeing terms Okay. of help promotional

Brandon. question, Great Yes.

was that manufacturers and us every in quarter help think move partnering market can discount, do magic can our the all how achieve to needed, need kind selectively promote the we of to saying, they to market, through. for manufacturer what as models we with market got of we do help, and by what's to together right I obviously, maybe how the

was that to a seemed So work. good and so costs, that partnership shared speak, to

from with is John next question Our Research. Northcoast Healy

Just ask kind of wanted business. the of question to kind of a outside of the operations

there that to us disclosure strategy? capital topics the reviewing or know maybe be late topic, a that a of. filed, I might through of the on the M&A think there, hasn't but can maybe dialogue getting of how guys help Or of confidentiality been either there you kind about and think of kind I But can, XXD understand what was in like degree elements ton dialogue? some and openness was we probably May, it might kind I think if you updates of there thinking of I of there's the you on of to kind structure think kind are about

I'll obviously, comment. Yes. -- can filing. XXD you the a The read make

than no investor conversations that discussions discussions have we core with different and investor. drill are with really and conversations any other Our

than really have with So than there's what their filing, everybody else. with other no and the difference in we the them questions interaction

you June? and way wanted the ask of magnitude, any just magnitude appreciate I just difficult back terms color to maybe of some the the I Okay. that. and was May And April just in give could bounce us how in

last April but did in it And comment going have down same-store how was, on Yes, that, And we're exactly negative for me or don't mind, now negative but it then of is the sales keep April was I you for obviously, right our the we or really which it to were that tell flat the and negative. was. of down, remember just don't in be And far of something front top were call like now recall year, I assume magnitude. I year-over-year, the on kind negative, the quarter quarter. in that

June good were pretty May So months. and

time can I generally think You industry that industry improving reflects which also. an the see data, during period

there at no I As this would back like to closing the McGill Brett floor further comments. are to for over Mr. questions time, turn

questions. great to everybody a the for you you the for us Thank next day, great. on Well, and great call. Have joining and we'll today all talk

today's your concludes you for participation. This teleconference. Thank

disconnect You may lines. now your