MarineMax, Inc. (
FQ2 2011 Earnings Call Transcript
April 29, 2011 10:00 p.m. ET
Kate Messmer - ICR
Michael McLamb - CFO
Bill McGill - President and CEO
James Hardiman - Longbow Research
Greg Mckinley - Dougherty
Chrisitan Buss - Thinkequity
Jimmy Baker - B. Riley & Co.
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Good day everyone and welcome to the MarineMax Incorporated second quarter 2011 earnings conference call. Please note, today’s conference is being recorded. At this time for opening remarks and introductions, I would like to turn the call over to Ms Kate Messmer. Please go ahead ma’am.
Thank you, Operator. Good morning everyone and thank you for joining this discussion of MarineMax's 2011 fiscal second quarter results. I'm sure that you've all received a copy of the press release that went out this morning, but if you have not, please call Linda Cameron at 727-531-1700, and she will fax or email one for you.
I would now like to introduce the management team of MarineMax, Bill McGill, Chairman, President and CEO and Mike McLamb, CFO of the company. Management will make some comments and then will be available for your questions. Mike?
Thank you, Kate. Good morning everyone and thank you for joining this call. Before I turn the call over to Bill, I would like to tell you that certain of our comments are forward-looking statements as defined in the Private Securities Litigation Reform Act.
These statements involve risks and uncertainties that may cause actual results to differ materially from expectations. These risks include but are not limited to, the impact of seasonality and weather, general economic conditions and the level of consumer spending, the company's ability to capitalize on opportunities or grow its market share, and numerous other factors identified in our Form 10-K and other filings with the Securities and Exchange Commission.
With that in mind, I’d like to turn the call over to Bill.
Thank you Mike and good morning everyone. We are pleased to be reporting our second in a row with positive growth in new boat sales. While most report still shows that the industry experienced declining unit sales for the quarter overall; recent reports are starting to show that the industry appears to be beginning to turn the corner.
We view and these recent reports as another positive sign that the industry has indeed reached bottom and is in the early stages of recovery.
Our product margins improved compared to the prior year, due to several factors including the decrease in pressure for bank repos, our improved inventory (inaudible) and our streamline one-price selling process.
These combined with a focus on expenses allowed us to report a smaller loss in the prior year, as we work towards regaining profitability.
Preliminary industry reports for the March quarter, specifically those that track state registration, suggest that in the segment in which operate, new units sales were down in the high single digits as consumer confidence remained choppy. However, our new unit sales were up more than 10%, which again signals our progress in gaining market share.
We believe this has been achieved not only through our leading retailing strategy, but also the additions we have made over the past years to strengthen and broaden our portfolio to appeal to a wider segment of customers.
As a reminder, since the beginning of 2009 despite industry challenges, we expanded with as much in Florida, Tennessee, Georgia and the Carolinas. We added Meridian in Baltimore and San Diego. We added Nautique in Minnesota and Atlanta, and Malibu in Arizona. We also added Cabo and Hatteras in New Jersey and New York; and Boston Whaler to our Naples and Fort Myers markets.
During the March quarter, we announced several key development to even further improve our brand offering and expand our geographic footprint.
First we added Bayline to our product offerings in many of our market. We also formed a strategic alliance with Marinas International and operated 27 Marinas with over 15,000 clips across the country, which will provide us with the opportunity to establish sales brokerage office in their Marians, while supplying them increased traffic and occupancy.
We also announced strategic partnerships with Sea Tow and Marinalife. They have partnered with us in our MarineMax Rewards Club offering. Additionally, we expanded our geographic footprint for the first time since 2006, adding our 57
location with the acquisition of Treasure Island Marina retail sales and brokerage operation in Panama City, Florida.
This is a market we wanted to be in to for a long time. We continue to evaluate additional opportunities to differ expand, but we’ll remain selective in opportunistic in our approach.
Moving over to discussion of our March quarter results; we experienced a modest decline in used boat sales due to less available inventories. Keep in mind that the bulk of a dealers used inventories boats are the trade that they take on their new sales.
Accordingly with two quarters in a row of increased new unit sales, we are moving down the road towards reestablishing a more typical revenue pattern that we and the industry have experienced for years.
Last quarter we discussed how the industry was facing a situation, where the availability of late model used boat inventory at [corrective] prices had diminished. The stabilization of the used boat market is also positive for new boat sales.
As the pricing of used inventories increased with tighter inventory levels, consumer are increasing their consideration of new boats, when making their purchase; and they are also more willing to train in their boats, when they can realize higher training values.