MarineMax (HZO) 26 Oct 232023 Q4 Earnings call transcript

Good morning, and welcome to the MarineMax, Inc. Fiscal 2023 Fourth Quarter and Full Year Conference Call. Today's call is being recorded. [Operator Instructions].

At this time, I would like to turn the call over to Scott Solomon of the company's Investor Relations firm, Sharon Merrill. sir. ahead, go Please

review results, that, be will thank McGill, can Mike. joining Mike over Executive MarineMax's the Officer. to Mike and investor.marinemax.com. MarineMax's management by call With happy operating turn Officer; Hosting and are McLamb, Brett Financial Chief Brett President company's found will the the you morning, call to presentation will us. discussing highlights. for today's and begin Good and your and questions. supplemental then be I'll call take The the financial earnings release at Chief

Securities morning, statements expectations. Thank are results Reform you, differ comments could you involve Any XXXX. Scott. These for and speak Act Good by cause that certain actual like that everyone, forward-looking I'd statements this as of to reminding Litigation start of statements joining today. Private from forward-looking risks call. as our you only to uncertainties defined of and thank the by materially

today's Brett. most to With GAAP between are the A measures operating is comparisons other GAAP the ability These to that, the directly measures the include, and grow a consumer help results. believe helps Form factors company's wish the me basis. risks identified global a a in numerous impact who spending, release. financial metrics in and the over on the on measures these turn non-GAAP we non-GAAP and core level in reconciliation call limited opportunities conditions changes of share let company's weather, and understanding but XX-K its capitalize also or economic the These comparable filings to other financial available seasonality [indiscernible] and make of and meaningful other of Brett? not both market to earnings of that investors of our MarineMax to, inclusion gain investors companies can

by thanking us. for XXXX. in whose team fiscal the to Good outstanding begin want and entire contributed thank growth customer I Mike. to everyone, morning, line you service MarineMax you, joining Thank top strong

best enables world's our for operations remains evidenced experience. we relationships. all focused pleasure X are the our From locations industry our quarter higher-margin our ownership acquisitions, Marinas fourth of mission retail yacht super full team and boating lifestyle well retail us broadening our boating dealerships deep to is revenue, the build XX demand As on and strong. beyond worldwide, aspects strategic by . Through manufacturing to customer boat to cycle of segments and encompasses life record year provide that the presence facilities, the to

Today, Mike premium the and particularly about representing we line demand our Johnson of Fraser I growth we are Yachts, robust here continue our Lauderdale Marinas. Show, product segment, International speaking the to attendance, Fort see as the strategy. and anticipate large IGY all displays you are for excited well from in and Northrop & as we drivers are the premium long-term of of to X We critical Boat

increase strategic from performance. in and drove engagement same-store customer our which fourth We X% saw to quarter initiatives, our an momentum Turning sales. continued marketing

New were again the and in used well. and performing with dollars boat up units sales premium categories

However, in earlier pontoons lagging like categories and we strength also year towboats. that better saw the in were

finance and Solid to sales our service higher-margin revenue businesses gains like same-store increase. in and the insurance, contributed

quarter with entire quarter strong contributed active perspective, the call, October, quarter on our as IGY revenue through and cadence to noted year. last we strong meaningfully and we the acquired a to Marinas, September. a which the close From our generally full growth started for stayed July

to additional recent do. we Although our need work guidance, there's adjusted line full in with were most year EBITDA adjusted EPS some and our

do not at latitude have in experience. we the to to areas fully the SG&A reduce We costs expenses are more that looking customer specifically evaluate impact

costs. we inflation operating will going affected do but forward. work of some cost has that and believe synergies to inflation exist, offset we Clearly,

seasonality, retail return rising industry a and anticipated we the some across margin inventory quarter. erosion levels Given to in the

However, the XX%. for Plus see gross full flat That we our are cycles across adding at year, market strategy our well about as margins increasing businesses. were as mid-XXs. and margins gross the remain speaks pleased business' in of to to resilience our diversification higher-margin

marketing precision Sophisticated data adding more and are analytics our to initiatives.

inventory intelligent For tools enable example, real inventory to marketing tools demand demand we and These are time. in customer and to monitor alignment. drive using us

marine are clearly growth. ships Our also and driving expanded our purchasing use the results of more market a the process driving car, same marine streamlined More are Boatzon gaining buying and a of much platform. We're way simplifying improved retail the In with experience Wave Innovation. boat. customer to strategic marketing share digital registering retailing momentum dealer boatzon.com, capabilities New technology has is

the we for in still start-up While a bright phase, future expect Boatzon.

with the completed major other addition Yachts consistent superyacht previously of AGY. the and on management Fraser to Turning strategy greatly profile. high-quality X of to highlights. month, recent fleet home services charter complements our charter largest AGY Athene, Atlanta leading Greece's our destination X enhance and world. AGY is in strategic company. or superyacht that business the AGY margin adding of our in the This expands businesses of Greece, Based a is announced Golden Yachts, The of very acquisition

our we and to Our align that evaluate opportunities with M&A priorities. pipeline strategic continue remains potential active,

ended. XXXX control revenue areas wisely and realize continue capital capturing expenses, the number reviewing the asked we appropriate we are economic uncertainty with our have encouraged we on are investors fiscal approaching perspective, deploying said, synergies. industry by our the much about current Nonetheless, focus near-term the outlook by how in world. light a but caution, faces From XXXX us A macro That of within environment. to of

financial and a recap. we for worldwide. commitment As update, growing are ahead number experiences the to of to and foundation to on me deliver excited XXXX, Mike? turn that customers to we yachting build to upon boating look this providing over With unparalleled let our call Mike a

a XX-XX sales. same-store and selling record was continue point our improvement quarter you, their and by . Consistent same-store which our by also revenue in Thank roughly I driven to produced unit XXXX. an fiscal fourth grew revenue in we $XXX million X% want commentary the quarter, thank Brett. efforts, In to strong to categories. driven team XX% with brands average premium The outshine in our price growth. price increase year, all for units

noted, in Brett strength as this earlier that we see year. like from categories boats additional seasonal However, did pontoons towboats, lagged traditional X and the quarter

last markets most Geographically, was particular positive $XXX the in Gross and was down from strength year-over-year saw while gross profit million we trends Midwest. margin million XX.X%. Florida in year, to $X up of with

inventory in levels, have industry product Generally, margins mid-XXs. levels the our remain consolidated product the margins pre-pandemic increased. approached expected, as As moderated while margins in

of acquisitions As the a was from the this adding CMC IGY, Brett our testament and our up million, higher-margin to year. is businesses. were to margins expenses SG&A Boatzon well over dollar $XXX of Midcoast, strength strategy we XX% said, half increase consolidated the completed

inventory did few. marketing, we name see However, various categories a property from maintenance increases insurance, and such health to insurance, as

inventory the million, cost customer. the long-term synergies some debt Brett Interest higher we as various of expense by costs for $XX.X internally reflecting opportunities not experience to But while as line drove growth. areas increased impacting IGY. of and improve well associated top savings the Clearly, interest mentioned, as rates, increased with rising exploring are

higher we the than expected. Given in increase was interest rates, incrementally floor plan

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

plan for floor primarily lower due expense, interest EBITDA net higher for $X $XX adjusted $XX accounted to Our million the quarter income compared million nearly and the million with difference. was last of year, which

was income net generated or our diluted diluted million GAAP share, year, income $XXX $X.XX in per line share, per $XXX million full guidance. the adjusted and net For we with or of $X.XX

of in for compared EBITDA the with was adjusted at million line year expense $XXX guidance year $XX million interest with difference. full roughly accounting floor with Our last plan $XXX million

we ended sequentially more Our balance remains $XXX June. cash. in $XXX from than to year million was million, year-end expected, as healthy sheet up Inventories with at which increased the as

of basis, the XX% XXXX a inventories are compared unit September levels. in a little On same-store with over neighborhood down

is borrowings, to plan inventories our financing our largely short-term liabilities, rose the at and Looking payments. floor increased timing of which due

declined as better sequentially to expected, from to June ability million demand our deposits becomes reflecting As available. meet inventory customer $XX

remains A was debt less year-end X. EBITDA to of strong. cash net Our than liquidity position

in We million. the approximately inventory unlevered liquidity form of available have additional that $XXX totaled plus lines credit of

comment will I guidance. regarding the trends for on to our unit industry year fiscal first Turning thoughts XXXX. our

of post either the upcoming industry's comparisons or the months a growth many relatively minimal unit For in to are decline. unit of trends terms easy ability year, the year-over-year

we no year. also to economic our but no believe slightly the will Assuming downturn, major fiscal in flattish significant be up improvements, industry

believe that price the end outperform segments. also to will We continue premium point

December all quarter year, be quarter seasonally through full in the back be stronger XXXX. to industry far the selling This by the seasonal of of for fiscal expect season. means by the smallest mode followed the quarters We will

to as seasonally We it modestly historically. also build inventory has expect

Based strategy we do same-store that on continue December year. inventory our to same reap to by the interest At and quarters, It's costs growth lower time, we fiscal expect product lower executed. industry successfully have unit low driven as had rates the benefits we to we long-term the and in also expectations, quarters in than expect worth in will lower have the we moderate XXXX. we same the sales margins of mid-single-digit higher-margin noting 'XX 'XX March this

as in of net income to adversely $XXX depreciation per we in to Factoring range per stock-based $X.XX for in additional million. XXXX Higher diluted the expect impacts versus and all denominator adjusted range $X EPS the fiscal compensation EBITDA million in, shares with adjusted share this $XXX EBITDA. share the of our as be to adjusted to well be

count an and assumptions. We of XX.X XX% share our in approximately million tax rate expected of are shares using a

by October seek for boats flattish This Hurricane to that, boating was closing pushed Looking last to back Brett looks continue call comments. as I'll year, September year turn at people to to October current over With Ian. currently that due strong aided the comparison to be from lifestyle. Brett? trends, the that

delivering gross in margins. and Thanks, challenging a record environment, strong Mike. XXXX, executed we revenue market well Despite fiscal

diversified of position historical see sustainable and retail the While continues advantage market MarineMax. competitive premium our retail boning revenue industry the creates for the to seasonality, segment in return stream a a to our

services international profile several experiences our MarineMax products, opportunities. diversified long-term Our and a strategic and base an generate is providing with company, initiatives continues new growth over to marine global the the enrich past up years and margin growth. customer to to remain profitable for let's the questions. on open strength And We pursuing by water. building committed maintaining MarineMax's operator, with value to call long-term that, journey shareholder the their drive opportunities financial improve

Hardiman [Operator question Citi. Instructions] comes from Our with James first

low So like that's Maybe to year. mid-single-digit it's quarter -- walk year? us seems year maybe most you talked that about the because think you But progression Mike, How see easiest maybe of sales. comparisons. over it's it the should about predict the of do the same-store growth December that the through, the Maybe current. best full to course

the into even the Yes, go comparisons then year-over-year for if into great February, James. May, they're when an September. declines appear and perspective, easiest question, easy. the on year, way But from you you relatively be July, The go yes, sure, does of April to quarter December And comparison fiscal a the with March, the -- our the mixed unit even industry and all rest January, June, are August through basis.

get industry kind many said for ability unit the industry historically, and on growth, And post has of same-store of to seems migration is unit you of which growth sure we recession, gains. like a the the as XXXX. basis I price, the unit those selling then have call, months our of positive if average traditionally the absent So a outperformed it sales

acquired then little anticipate remarks, then this are prepared I a number, specifically inventories a a in we out, inventory inventory a basis? think dollars. going That's a also versus the building retail just question, or units it. on year's patterns And but the think but as bit unit you sort bridge -- how number inventories think we you about unit ordering do about of and you last on equaling we Got would on as a inventory can helpful. think inventory basis And or you about year's Wholesale touched or right? thinking like-for-like at where lowering and you're about on in generally forward, place inventory, like-for-like

remember. there isn't try a acquired year-over-year in all growth I a whole So CNC one. of can a let acquisitions. if The acquisition those of me terms to basis, take really lot was smaller questions, On

which bit, was of stuff just dollar little A building growth sheet terms year, IGY that. last from some in the there's skewed -- of So has guess, from a quite level, that from inventories balance like But from inventory is by the fuel I frankly. relatively that. bulk of growth, the and low

heavier are surprising we I still have levels. on a probably units and inventory not are some basis some said, than same-store It's XX% down categories So XXXX need. necessarily areas in the from as that that we

line. You've categories, and and trying and and towboats. on product far about still some the and below that and But going to industry in sell. where products center with those we very manufacturers we very premium larger we're dialogue we're seen closely We're in pretty products what's inventories get receptive that all outboards of how to the need there's likewise, we the some larger with in even they're pontoons where working of real console of need the our categories all

a dealers all time healthy as the manufacturers level, it's at too. trying industry interesting stay that the to now Actually, are at all stay inventory. right recognizing important to think I the So inventory, level rebuilding is very to it's some healthy of are that an

while we'll think seasonal probably unit place from be some we inventory as in pretty have we'll So I XXXX. good through the build, go overall perspective a

Got it.

case effectively year? equals retail your the unit perspective is over So from next wholesale a base

out, it's categories and we're to not year. in some retail But need that need but probably during in to speak out yes, case there's where, we in have think actually both where categories, the we I bringing periods softer of the categories than more certainly, other time been some of the not product. sides,

That's helpful. Appreciate it.

from question Crum Next Stifel. comes Drew with

of at you're comment In incremental just scenario assuming. headwinds? can recession fiscal your forecast type then macroeconomic words, other I what you have a on does outlook or macro your on level, So embed a high any guidance, 'XX other And a follow-up.

the -- embedding We're We against in our Drew, go-forward recession that of at to we we ended that been over fiscal experiencing X% and a on last we've basis. comparisons XX% No, year, status quarter. how couple were September generally that's not forecast. real the a sales quarters look which we last XXXX, good question. you was growth the up growth We a what close tough actually a quo quarter commented strong had we sales in to year, pretty posted this same-store same-store

still clear quarter. seeking it's lifestyle our So number of the through fairly are boating people fourth the there out that active is

Got it.

-- and a you and quarter tell revenue us Okay. Can ended where just And for and then maybe maintenance on item. related as repair, storage up a housekeeping you the P&A note, the mid-XXs assume about line see adjusted gross little reasonable margin Or impact think slips bit its a is it on 'XX, to fiscal and do you year-on-year? this sustaining range? that in it the year

Yes. Good Yes. question.

revenue XX% our so sales new for they're used QX. for XX%. and were year, around down But the to boat on perspective, of So a mix around mix full

we So to XX% expected of the actually XXXX. grown around businesses as for higher-margin they have all would fiscal

the product what they XXXX. do year basis we on think range. margins still margins in about to ended, And in moderate do as then in we on but as are for we to -- to quarter range did margins full are going we'd some that the point realize the a for XXXX. will your did range last mid comment be going say but really I we margins, But we'll not I think mid-XX numbers, the is just of consolidated overall, mid-XX% fourth be think quarter

is service, insurance, in other what's growth we time. numbers, over higher-margin expect have finance and do traditionally that within our We which categories happened

Our Altobello Raymond from with next comes question Joe James.

to quite today promotional seem do may during a respect Mike, summer. your there like XXXX? bit to versus things up, heated margins. activity, where commentary wanted I the up we first, [indiscernible] on stand regarding follow With And

premium promotional Or a to has of been more your bit immune you category has expect would that those little pressures? continue? So some to

activity industry now general, the as starting X sure I have promotional comment quarters, the times. seems quite to levels, at last that would reasonable some probably be the for activities certainly are in There that maybe categories back say in in promotional overall. quarter. March I'd to back historic are not been the in back But aggressive still

all manufacturers. [indiscernible] new come as that that's products preserve new different innovations margin of helped new because model really you're innovations, by and And a well. well to as out introducing these continue lot helps really

maybe on a And it. Got just that. follow-up

terms seen more a In to getting environment, credit you up lenders with you cash And the all? at seeing percentage consumer in little are buyers respect of the have cautious loans? of pick business your

of couple banks really -- the a of a question, changed. higher ticking creditworthiness the We would a the in rate, is certainly seems way look receding. like the percentage times the they it at the the has perhaps But Joe. cash really, rates receding, of this up. saw and more changed. And but There don't have little still accustomed Good getting get quarters, was buyers really, year percentage is the the of that the hasn't Obviously, rate public little period cash where it last been, environment buyers the otherwise . maybe we several buyers to like but a than year.

Our next with Rolle Davidson. D.A. from question comes Brandon

Just Could categories about higher in your you talk higher-margin outlook margin for throughout year on X some businesses. a of your 'XX? quick fiscal your growth

for growth. Just the outlook

the same-store store base growth other So to quite businesses last growth, service, gives insurance, have brokerage, our the up. Johnson the to got generally, years, same-store have a trying that but and had revenue forecast other and catch those we've growth, mention have some with good catch XXXX X not XXXX. or to the portions XXXX where years too periods, chance IGY the to back-to-back when been to like & in also businesses you you in our a is X of the are businesses sales different finance higher-margin sales we operations those And continue other and in Northrop higher-margin pretty level, low Fraser catch chance same-store and is, have lower to of grow sales what it up, certain which own businesses frankly. ability a when relatively And up, of relatively over

our the rates service all business of strong. revenue lot side slips hard and in to seems slip, Demand still. And and the a it's Marina accessories. strong and really of holding parts Marina at then are A people, find of locations,

just And X follow-up. Great.

know in you've I terms reporting takeaways are but Lauderdale guys any early from takeaways? yesterday, You the show, early from demand? just Fort seen of started any what it

the little breeze into first good. at show until the helped a so show. it I always day. traffic weather, good. generally, you at deep But weekend. get generally get the seems the deal yes, day for to good very A Great full is hard that's it's read a good But . Yes. think first That a

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

know Obviously, guess, of talked I is What involved at? couple And when else I talk at one, competitive-wise are a acquisitions? getting Just seeing lot or not who what specific, opportunities? you're what seeing maybe there Maybe of is targets? -- your but about there? competitive a looking about the those you're it's the questions. table? you're getting areas Is you it's being pipeline recently, for robust. you other increased where M&A kind looking [indiscernible] of environment

with we're at dealerships the focused making degree, are management, of types I and the the component, consistent dealerships. off good good be which brands, a to past on those there's start We're higher-margin looked a can mean, really in though, what storage that. at I we've looking companies really with all would of comment. that

make a return that that bring good are they like profile acquired for which a important in us the the U.S. kind sense an still looking overall this ad to our they marine great sense to have sector. where dealerships. year, also margin services actually and family. just internationally at grow good of makes a reasonable AGY a to Greece. strategy begin We a a in and our help company fiscal into business and to team higher business where in businesses with and . Marinas in still super involved so is with we're We are other And have discussions business,

And the those? for environment competitive

there's marinas, Again a that world of lot attracted obviously, when people around you're are to the marinas. talking about

become that of It's time. people a we've With we're -- of -- it's some this premium competitive other the same of good that where to in we've to where to team acquisitions, environment. dealerships long crowded with the a we're of a are for not as not businesses at And the to reputation where developed to -- a very always terms some case and place way. a looking we're And a this company of talking usually companies, for belong a there's field a to long, relationships, the been folks talking that them. these talking and part and usually also is known end the in it's the

a a And higher from floor and interest question. plan. of in follow-up noted interest the costs lot rates pressure Obviously, you

-- where your If were you of financing down takes you use got X down a couple to of think actually back made some do basically to you kind X. you and basically you cash dynamics, balance, years ago [indiscernible] plan it

on on healthy kind hand cash to few the in floor in the balance sitting last appropriate down to of of a you leverage on [indiscernible]. had plan of level quarters, want inventory You're what the the kind have side? you keep relative to What's cash

is you for a end, on cash probably the all pay save of have at quarter is every plan on surprise net our XX the company does, And add And to debtor. the X, mean, other anybody our obviously, not interest our years balance sheet. we've And like imagine, floor that. been cash down phone, or net the to we can we I and throughout then Eric. the we're been question, Good actually, quarters, I in a this as that mean public. debt most we

paying do. down end. time, we except rate quarter of at we a lot everybody debt day But realizes So all single every have a which the liquidity, we're

So we're . taking we've of advantage the cash generated. that

the Michael from with Truist comes of Our Securities. next line question Swartz

about the of -- 'XX? cadence Mike. fiscal for bit selling little This price you average your talk a is on expected in Lucas Could

we growth, have Yes. we AUP. sales growth and or as expect growth, more guidance, roughly we commented in could is lean towards same-store maybe assume growth, mid-single-digit the overall, maybe that -- and In to [indiscernible] have, call same-store it, between single-digit sales you unit that XXXX, XX-XX as to flattish low industry modest ADP much the we units can the would

growth had number there's also about more AUP maybe a to We've Brett nice partners providing which over premium talked models larger options time. tend manufacturing for with more the higher side And years. of new on product. and with the does the what great the They side, have our and that are a little drive AUP bit and

it's Okay. Perfect. from? Any maybe to And then on all savings SG&A. just color share quantification where commented you I . driving had That's there, also some or in additional coming

No. trying cost just for see we're stop claims and comment, But insurance, we savings. handful unfortunate up commentary in have our of loss organization slightly we that healthcare some also in the more did opportunities in can to we're answer hit categories potential synergies and was . don't have some analyzing in will into the maximums. the an savings, digging than of but a The quarter increased today. where number script a digging things and I those slightly, we are X that get

question next Northcoast of with comes Research. Our line from Healy the John

the of close strong year. the on Congrats

just me, for on side. SG&A X the Just question

there the that maybe if experience. textualize impact mentioned some of is think -- you customer extended and of opportunities look more there? at runway to in at some some outside the during that kind you're these experience. opportunities looking opportunities is Is much How on bigger remarks the business? is But a are it it improve way of you've the a Kind us? the that? that things traditional customer would there I for what side that bit recently? And SG&A you you maybe can Or adjacencies of prepared that more marina of on there to

synergies a just at just create that high a cost first, which in digging were superyacht an IGY into in our of to things does operations level. of lot of synergy, more opportunity inflation that, of And comment saving right cases, all dig then have of time, Mike, segment mitigated I'll into want There's Yes, can't. clearly and aggressively with in to that been now. from is a always there's can some you around to the be some long do is all stores day-to-day there our but . which which

what we what No, just don't into. generally, today, looking have but is There's answers the . that Brett said -- all was we're good.

Your next question Longbow line comes the David of from Research. MacGregor with

This is quick I X have guys. Joe for Nolan just on David. X for you

boat wondering the market. Just about used

Just in terms and of there? of wondering are you demand what guys terms in seeing values

We higher higher any markets action marketplace, boat holding the don't strong, in is used Yes. price up see holding well. prices. wild new are significant on well up pricing changes, boats and

So that helps.

our of and So it's part good on a to been continue business, focus it. .

And within any notable market? trends mix within boat the used

can call I out. Not that No.

taking. speculatively [indiscernible] trades was that a are of a We we're whole there buy And down. ton used years people For boats of boats the it's nice just some lot over the period last we're of a time where that don't used getting trades us, boats. additional there just wasn't our couple trading

is performance business going levels to historical to of . be forward. that going sort back expect We

questions, to no Mr. over hand McGill there Brett As comments. are further the now conference I for would closing

Well, our everybody, thank on and you, update joining call. for us next today, we'll you

look in we . area, talk down on you're take a some We'll to the have. at to show of please Lauderdale you soon. great the the and come If products

participation. you. The of concluded. your now has MarineMax, for Inc. conference you Thank Thank

may lines. your You disconnect now