MarineMax, Inc. ( HZO)

F4Q 2011 Earnings Conference Call

November 3, 2011 10:00 AM ET


Brad Cohen – Senior Managing Director, ICR Inc.

Michael McLamb – EVP, CFO and Secretary

William McGill – Chairman, CEO and President


Greg McKinley – Dougherty

Joseph Hovorka – Raymond James



Welcome to the MarineMax Incorporated Fourth Quarter 2011 Earnings Conference Call. Today’s call is being recorded.

At this time, for opening remarks and introductions, I’d like to turn the call over to Mr. Brad Cohen. Please go ahead, sir

Brad Cohen

Thank you very much, operator. Good morning, everyone, and thank you for joining this discussion of MarineMax’s 2011 fiscal fourth 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 can fax or e-mail one to you.

I’d now like to introduce the management team of MarineMax; Mr. Bill McGill, Chairman, President and Chief Executive Officer; Mr. Mike McLamb, Chief Financial Officer of the company. Management will make some comments and then will be available for your questions. Mike?

Michael McLamb

Thank you, Brad. Good morning, everyone, and thank you for joining this call. Before I turn the call over to Bill, I’d 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.

William McGill

Thank you, Mike, and good morning, everyone. As we look at fiscal 2011 we made progress in many areas of our business, but late in our fourth quarter sales got off track for a profitable year. Business trends were encouraging but slowed as the second half of the quarter progressed. There is no question our business was impacted by the confluence of market volatility and the negative news flow from around the world.

The sharp decline in consumer confidence, which hit new lows in August, certainly impacted our results for the quarter. However, as I said earlier, we did make progress with market share gains and expanding margins during this quarter. We actually had solid new boat unit growth for the fourth consecutive albeit at a slower pace than our first three quarters.

Our growth is in contrast to the preliminary industry data that suggest fiberglass, stern drive and inboard boat sales, which are really the core of our business. We’re down nearly double-digits for the quarter. Our better than industry sales results suggest that our market share gains are continuing and we incrementally grew our product margins despite facing the challenges brought about by the softer environment.

We also saw a pickup in used boat sales in the fourth quarter, as availability of our used inventory improved due to the increase in trades we took from a new unit growth in the past four quarters.

At the beginning of the fiscal year, we commented that we believe we hit bottom in the summer of 2010. Four quarters in a row of new unit sales growth reaffirms that believe, we believe the industry is in much better shape today than in 2008 and 2009 from an inventory pipeline standpoint.

Inventory in the industry is at low levels, which is helping our margins and that of the overall industry. Nonetheless, we believe the industry’s recovery will be at a slow pace and accordingly we must keep our operations and our inventory and our cost aligned.

During the year we strategically expanded with key brands in select markets. These brands provide us with incremental opportunities to satisfy even more customers with boats that are different from our core brands.

Some of the brands we expanded with like Bayliner and Mako helped us better address the increasing desires of a new family of customers who want to spend less yet enjoy the boating lifestyle.

We also expanded with aluminum products in select market for the same reason. We added Nautique and Malibu in several markets for customers with the Wake and Ski passion. Additionally, we expanded our geographic footprint with many of our existing brands which helps us to better leverage our cost structure and marketing dollars.

During 2011, we completed key geographic acquisition in Florida. Specifically, we added Panama City and the surrounding area to compliment the rest of our presence in the Panhandle. This acquisition is proving successful and strengthens our presence in Florida. Florida is the number one dollar volume state for boating and is showing signs of recovery.

We also felt it was prudent to revisit our expense structure, in addition to reviewing every major expense category for potential reductions, we also revisited our store footprints. After considering store performance, store cost, market share, proximity to other stores and other variables, we determined we should trim our store count. We concluded to close three smaller stores as we ended the summer selling season, bringing our store count to 54.

We also further analyzed our inventory and orders and determined we should trim and delay incremental income in boats until we see the results from water boat show season, which is just beginning. While we cannot control the weather, the economy or consumer confidence, we are committed to managing those areas of the business which we can control.

Read the rest of this transcript for free on