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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

FORM 10-Q

 

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2024.

Commission File Number. 1-14173

 

MARINEMAX, INC.

(Exact Name of Registrant as Specified in Its Charter)

 

 

Florida

59-3496957

(State or Other Jurisdiction of Incorporation or Organization)

(I.R.S. Employer Identification Number)

 

 

2600 McCormick Drive, Suite 200

 

Clearwater, Florida

33759

(Address of Principal Executive Offices)

(ZIP Code)

727-531-1700

(Registrant’s Telephone Number, Including Area Code)

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, par value $.001 per share

HZO

New York Stock Exchange

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

 

 

Accelerated filer

 

Non-accelerated filer

 

 

Smaller reporting company

 

 

 

 

 

Emerging growth company

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes No

The number of outstanding shares of the registrant’s Common Stock on April 22, 2024 was 22,301,435.

 

 

 


 

MARINEMAX, INC. AND SUBSIDIARIES

Table of Contents

 

Item No.

Page

 

PART I. FINANCIAL INFORMATION

 

1.

Financial Statements (Unaudited):

 

 

Condensed Consolidated Statements of Operations for the Three and Six Months Ended March 31, 2023 and 2024

3

 

Condensed Consolidated Statements of Comprehensive Income for the Three and Six Months Ended March 31, 2023 and 2024

 

4

 

Condensed Consolidated Balance Sheets as of September 30, 2023 and March 31, 2024

5

 

Condensed Consolidated Statements of Shareholders’ Equity for the Six Months Ended March 31, 2023 and 2024

6

 

Condensed Consolidated Statements of Cash Flows for the Six Months Ended March 31, 2023 and 2024

7

 

Notes to Condensed Consolidated Financial Statements

8

 

 

2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

22

 

 

3.

Quantitative and Qualitative Disclosures About Market Risk

27

 

 

4.

Controls and Procedures

27

 

 

PART II. OTHER INFORMATION

28

1.

Legal Proceedings

28

1A.

Risk Factors

28

2.

Unregistered Sales of Equity Securities and Use of Proceeds

28

3.

Defaults Upon Senior Securities

28

4.

Mine Safety Disclosures

28

5.

Other Information

28

6.

Exhibits

29

SIGNATURES

 

30

 

 

 

 

2


 

PART I. FINANCIAL INFORMATION

ITEM 1. Financial Statements

MARINEMAX, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Operations

(Amounts in thousands, except share and per share data)

(Unaudited)

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

 

March 31,

 

 

March 31,

 

 

 

 

2023

 

 

2024

 

 

2023

 

 

2024

 

 

Revenue

 

$

570,340

 

 

$

582,892

 

 

$

1,078,267

 

 

$

1,110,166

 

 

Cost of sales

 

 

369,431

 

 

 

392,471

 

 

 

690,461

 

 

 

744,264

 

 

Gross profit

 

 

200,909

 

 

 

190,421

 

 

 

387,806

 

 

 

365,902

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general, and administrative expenses

 

 

145,504

 

 

 

169,020

 

 

 

295,901

 

 

 

325,502

 

 

Income from operations

 

 

55,405

 

 

 

21,401

 

 

 

91,905

 

 

 

40,400

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

13,280

 

 

 

19,374

 

 

 

22,764

 

 

 

37,739

 

 

Income before income tax provision

 

 

42,125

 

 

 

2,027

 

 

 

69,141

 

 

 

2,661

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income tax provision

 

 

12,201

 

 

 

578

 

 

 

19,230

 

 

 

367

 

 

Net income

 

 

29,924

 

 

 

1,449

 

 

 

49,911

 

 

 

2,294

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Less: Net (loss) income attributable to non-controlling interests

 

 

(111

)

 

 

(138

)

 

 

186

 

 

 

(223

)

 

  Net income attributable to MarineMax, Inc.

 

$

30,035

 

 

$

1,587

 

 

$

49,725

 

 

$

2,517

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic net income per common share

 

$

1.37

 

 

$

0.07

 

 

$

2.28

 

 

$

0.11

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted net income per common share

 

$

1.35

 

 

$

0.07

 

 

$

2.23

 

 

$

0.11

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of common shares used in computing
   net income per common share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

21,853,557

 

 

 

22,299,599

 

 

 

21,804,326

 

 

 

22,247,587

 

 

Diluted

 

 

22,314,262

 

 

 

22,999,229

 

 

 

22,268,183

 

 

 

22,903,840

 

 

 

See accompanying Notes to Condensed Consolidated Financial Statements.

 

 

3


 

MARINEMAX, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Comprehensive Income

(Amounts in thousands)

(Unaudited)

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

March 31,

 

 

March 31,

 

 

 

2023

 

 

2024

 

 

2023

 

 

2024

 

 

Net income

$

29,924

 

 

$

1,449

 

 

$

49,911

 

 

$

2,294

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other comprehensive income (loss), net of tax:

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustments

 

1,224

 

 

 

(1,607

)

 

 

6,310

 

 

 

1,619

 

 

Interest rate swap contract

 

(182

)

 

 

61

 

 

 

(251

)

 

 

(225

)

 

Total other comprehensive income (loss), net of tax

 

1,042

 

 

 

(1,546

)

 

 

6,059

 

 

 

1,394

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Comprehensive income (loss)

 

30,966

 

 

 

(97

)

 

 

55,970

 

 

 

3,688

 

 

Less: comprehensive (loss) income attributable to non-controlling interests

 

(72

)

 

 

(324

)

 

 

426

 

 

 

(57

)

 

Comprehensive income attributable to MarineMax, Inc.

$

31,038

 

 

$

227

 

 

$

55,544

 

 

$

3,745

 

 

 

See accompanying Notes to Condensed Consolidated Financial Statements.

 

4


 

MARINEMAX, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(Amounts in thousands, except share data)

(Unaudited)

 

 

September 30,

 

 

March 31,

 

 

 

2023

 

 

2024

 

ASSETS

 

 

 

 

 

 

CURRENT ASSETS:

 

 

 

 

 

 

Cash and cash equivalents

 

$

201,456

 

 

$

216,684

 

Accounts receivable, net

 

 

85,780

 

 

 

121,639

 

Inventories

 

 

812,830

 

 

 

932,607

 

Prepaid expenses and other current assets

 

 

23,110

 

 

 

21,996

 

Total current assets

 

 

1,123,176

 

 

 

1,292,926

 

Property and equipment, net of accumulated depreciation of $144,259 and $156,827

 

 

527,552

 

 

 

536,175

 

Operating lease right-of-use assets, net

 

 

138,785

 

 

 

140,882

 

Goodwill

 

 

559,820

 

 

 

590,344

 

Other intangible assets, net

 

 

39,713

 

 

 

39,174

 

Other long-term assets

 

 

32,259

 

 

 

31,488

 

Total assets

 

$

2,421,305

 

 

$

2,630,989

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

 

 

CURRENT LIABILITIES:

 

 

 

 

 

 

Accounts payable

 

$

71,706

 

 

$

61,339

 

Contract liabilities (customer deposits)

 

 

81,700

 

 

 

79,095

 

Accrued expenses

 

 

112,746

 

 

 

124,332

 

Short-term borrowings (Floor Plan)

 

 

537,060

 

 

 

736,717

 

Current maturities on long-term debt

 

 

33,767

 

 

 

33,766

 

Current operating lease liabilities

 

 

10,070

 

 

 

10,359

 

Total current liabilities

 

 

847,049

 

 

 

1,045,608

 

Long-term debt, net of current maturities

 

 

389,231

 

 

 

372,624

 

Noncurrent operating lease liabilities

 

 

123,789

 

 

 

126,224

 

Deferred tax liabilities, net

 

 

56,927

 

 

 

58,156

 

Other long-term liabilities

 

 

85,892

 

 

 

87,919

 

Total liabilities

 

 

1,502,888

 

 

 

1,690,531

 

COMMITMENTS AND CONTINGENCIES

 

 

 

 

 

 

SHAREHOLDERS’ EQUITY:

 

 

 

 

 

 

Preferred stock, $.001 par value, 1,000,000 shares authorized, none issued or outstanding
   as of September 30, 2023 and March 31, 2024

 

 

 

 

 

 

Common stock, $.001 par value, 40,000,000 shares authorized, 29,374,724 and
   
29,566,620 shares issued and 22,107,703 and 22,299,599 shares outstanding as of
   September 30, 2023 and March 31, 2024, respectively

 

 

29

 

 

 

29

 

Additional paid-in capital

 

 

323,218

 

 

 

334,939

 

Accumulated other comprehensive income

 

 

1,303

 

 

 

2,531

 

Retained earnings

 

 

739,949

 

 

 

742,466

 

Treasury stock, at cost, 7,267,021 shares held as of September 30, 2023
   and March 31, 2024

 

 

(148,656

)

 

 

(148,656

)

Total shareholders’ equity attributable to MarineMax, Inc.

 

 

915,843

 

 

 

931,309

 

Non-controlling interests

 

 

2,574

 

 

 

9,149

 

Total shareholders’ equity

 

 

918,417

 

 

 

940,458

 

   Total liabilities and shareholders’ equity

 

$

2,421,305

 

 

$

2,630,989

 

 

See accompanying Notes to Condensed Consolidated Financial Statements.

 

 

5


 

MARINEMAX, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Shareholders’ Equity

(Amounts in thousands, except share data)

(Unaudited)

 

 

 

 

 

 

 

 

Additional

 

 

Accumulated
Other

 

 

 

 

 

 

 

 

 

 

 

Total

 

 

 

Common Stock

 

 

Paid-in

 

 

Comprehensive

 

 

Retained

 

 

Treasury

 

 

Non-controlling

 

 

Shareholders’

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Income (loss)

 

 

Earnings

 

 

Stock

 

 

Interests

 

 

Equity

 

BALANCE, September 30, 2023

 

 

29,374,724

 

 

$

29

 

 

$

323,218

 

 

$

1,303

 

 

$

739,949

 

 

$

(148,656

)

 

$

2,574

 

 

$

918,417

 

Net income (loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

930

 

 

 

 

 

 

(85

)

 

 

845

 

Non-controlling interests in subsidiaries from acquisitions

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

6,655

 

 

 

6,655

 

Distributions to non-controlling interests

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(23

)

 

 

(23

)

Shares issued pursuant to employee stock purchase plan

 

 

55,375

 

 

 

 

 

 

1,353

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,353

 

Shares issued upon vesting of equity awards, net of minimum tax withholding

 

 

128,065

 

 

 

 

 

 

(1,116

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1,116

)

Shares issued upon exercise of stock options

 

 

5,000

 

 

 

 

 

 

81

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

81

 

Stock-based compensation

 

 

1,875

 

 

 

 

 

 

5,419

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

5,419

 

Other comprehensive income

 

 

 

 

 

 

 

 

 

 

 

2,588

 

 

 

 

 

 

 

 

 

352

 

 

 

2,940

 

BALANCE, December 31, 2023

 

 

29,565,039

 

 

$

29

 

 

$

328,955

 

 

$

3,891

 

 

$

740,879

 

 

$

(148,656

)

 

$

9,473

 

 

$

934,571

 

Net income (loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,587

 

 

 

 

 

$

(138

)

 

 

1,449

 

Stock-based compensation

 

 

1,581

 

 

 

 

 

 

5,984

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

5,984

 

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

(1,360

)

 

 

 

 

 

 

 

 

(186

)

 

 

(1,546

)

BALANCE, March 31, 2024

 

 

29,566,620

 

 

$

29

 

 

$

334,939

 

 

$

2,531

 

 

$

742,466

 

 

$

(148,656

)

 

$

9,149

 

 

$

940,458

 

 

 

 

 

 

 

 

 

 

Additional

 

 

Accumulated
Other

 

 

 

 

 

 

 

 

 

 

 

Total

 

 

 

Common Stock

 

 

Paid-in

 

 

Comprehensive

 

 

Retained

 

 

Treasury

 

 

Non-controlling

 

 

Shareholders’

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Income (loss)

 

 

Earnings

 

 

Stock

 

 

Interests

 

 

Equity

 

BALANCE, September 30, 2022

 

 

28,939,846

 

 

$

29

 

 

$

303,432

 

 

$

(2,806

)

 

$

630,667

 

 

$

(148,656

)

 

$

-

 

 

$

782,666

 

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

19,690

 

 

 

 

 

 

297

 

 

 

19,987

 

Non-controlling interests in subsidiaries from acquisitions

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2,208

 

 

 

2,208

 

Shares issued pursuant to employee stock purchase plan

 

 

49,572

 

 

 

 

 

 

1,255

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,255

 

Shares issued upon vesting of equity awards, net of minimum tax withholding

 

 

126,552

 

 

 

 

 

 

(1,059

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1,059

)

Shares issued upon exercise of stock options

 

 

1,000

 

 

 

 

 

 

7

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

7

 

Stock-based compensation

 

 

1,507

 

 

 

 

 

 

4,845

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4,845

 

Other comprehensive income

 

 

 

 

 

 

 

 

 

 

 

4,816

 

 

 

 

 

 

 

 

 

201

 

 

 

5,017

 

BALANCE, December 31, 2022

 

 

29,118,477

 

 

$

29

 

 

$

308,480

 

 

$

2,010

 

 

$

650,357

 

 

$

(148,656

)

 

$

2,706

 

 

$

814,926

 

Net income (loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

$

30,035

 

 

 

 

 

$

(111

)

 

 

29,924

 

Stock-based compensation

 

 

2,101

 

 

 

 

 

 

5,368

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

5,368

 

Other comprehensive income

 

 

 

 

 

 

 

 

 

 

 

1,003

 

 

 

 

 

 

 

 

 

39

 

 

 

1,042

 

BALANCE, March 31, 2023

 

 

29,120,578

 

 

$

29

 

 

$

313,848

 

 

$

3,013

 

 

$

680,392

 

 

$

(148,656

)

 

$

2,634

 

 

$

851,260

 

 

See accompanying Notes to Condensed Consolidated Financial Statements.

 

6


 

MARINEMAX, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(Amounts in thousands)

(Unaudited)

 

 

Six Months Ended March 31,

 

 

 

2023

 

 

2024

 

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

 

 

Net income

 

$

49,911

 

 

$

2,294

 

Adjustments to reconcile net income to net cash used in operating
   activities:

 

 

 

 

 

 

Depreciation and amortization

 

 

17,972

 

 

 

21,897

 

Deferred income tax provision, net of effects of acquisitions

 

 

11,460

 

 

 

1,229

 

Loss (Gain) on sale of property and equipment and assets held for sale

 

 

277

 

 

 

(41

)

Gain on previously held equity investment upon acquisition of the entire business

 

 

(5,129

)

 

 

 

Stock-based compensation expense

 

 

10,213

 

 

 

11,403

 

(Increase) decrease in, net of effects of acquisitions —

 

 

 

 

 

 

Accounts receivable, net

 

 

(59,866

)

 

 

(35,791

)

Inventories

 

 

(254,210

)

 

 

(116,021

)

Prepaid expenses and other assets

 

 

2,631

 

 

 

1,757

 

(Decrease) increase in, net of effects of acquisitions —

 

 

 

 

 

 

Accounts payable

 

 

(2,473

)

 

 

(10,582

)

Contract liabilities (customer deposits)

 

 

(32,787

)

 

 

(2,635

)

Accrued expenses and other liabilities

 

 

11,479

 

 

 

15,308

 

Net cash used in operating activities

 

 

(250,522

)

 

 

(111,182

)

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

 

 

Purchases of property and equipment

 

 

(25,905

)

 

 

(28,508

)

Cash used in acquisition of businesses, net of cash acquired

 

 

(498,610

)

 

 

(21,955

)

Proceeds from insurance settlements

 

 

177

 

 

 

494

 

Proceeds from sale of property and equipment and assets held for sale

 

 

92

 

 

 

80

 

Net cash used in investing activities

 

 

(524,246

)

 

 

(49,889

)

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

 

 

Net borrowings on short-term borrowings (Floor Plan)

 

 

366,295

 

 

 

197,723

 

Proceeds from long-term debt

 

 

400,000

 

 

 

 

Payments of long-term debt

 

 

(8,743

)

 

 

(16,883

)

Contingent acquisition consideration payments

 

 

(7,000

)

 

 

(2,632

)

Net proceeds from issuance of common stock under incentive compensation and
   employee purchase plans

 

 

1,262

 

 

 

1,434

 

Payments on tax withholdings for equity awards

 

 

(2,962

)

 

 

(4,198

)

Net cash provided by financing activities

 

 

748,852

 

 

 

175,444

 

Effect of exchange rate changes on cash

 

 

1,981

 

 

 

855

 

NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS

 

 

(23,935

)

 

 

15,228

 

CASH AND CASH EQUIVALENTS, beginning of period

 

 

228,274

 

 

 

201,456

 

CASH AND CASH EQUIVALENTS, end of period

 

$

204,339

 

 

$

216,684

 

Supplemental disclosures of cash flow information:

 

 

 

 

 

 

Cash paid for:

 

 

 

 

 

 

Interest

 

$

13,444

 

 

$

39,271

 

Income taxes

 

$

24,347

 

 

$

5,957

 

Non-cash items:

 

 

 

 

 

 

Contingent consideration liabilities from acquisitions

 

$

77,380

 

 

$

1,313

 

 

See accompanying Notes to Condensed Consolidated Financial Statements.

 

7


 

MARINEMAX, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

 

1.
COMPANY BACKGROUND:

We believe we are the world’s largest recreational boat and yacht retailer, selling new and used recreational boats, yachts, and related marine products and services. As of March 31, 2024, we have over 130 locations worldwide, including 83 retail dealership locations, some of which include marinas. Collectively, with the IGY acquisition, as of September 30, 2023, we own or operate 66 marina and storage locations worldwide. Through Fraser Yachts and Northrop & Johnson, we believe we are the largest superyacht services provider, operating locations across the globe. Cruisers Yachts manufactures boats and yachts with sales through our select retail dealership locations and through independent dealers. Intrepid Powerboats manufactures powerboats and sells through a direct-to-consumer model. MarineMax provides finance and insurance services through wholly owned subsidiaries and operates MarineMax Vacations in Tortola, British Virgin Islands. The Company, through a wholly owned subsidiary New Wave Innovations, also owns Boatyard, an industry-leading customer experience digital product company, and Boatzon, a boat and marine digital retail platform.

We are the largest retailer of Sea Ray and Boston Whaler recreational boats which are manufactured by Brunswick Corporation (“Brunswick”). Sales of new Brunswick boats accounted for approximately 24% of our revenue in fiscal 2023. Sales of new Sea Ray and Boston Whaler boats, both divisions of Brunswick, accounted for approximately 11% and 11%, respectively, of our revenue in fiscal 2023. Brunswick is a world leading manufacturer of marine products and marine engines.

We have dealership agreements with Sea Ray, Boston Whaler, Harris, and Mercury Marine, all of which are subsidiaries or divisions of Brunswick. We also have dealer agreements with Italy-based Azimut-Benetti Group’s product line for Azimut and Benetti yachts and mega yachts. These agreements allow us to purchase, stock, sell, and service these manufacturers’ boats and products. These agreements also allow us to use these manufacturers’ names, trade symbols, and intellectual properties in our operations. The agreements for Sea Ray and Boston Whaler products, respectively, appoint us as the exclusive dealer of Sea Ray and Boston Whaler boats, respectively, in our geographic markets. In addition, we are the exclusive dealer for Azimut Yachts for the entire United States. Sales of new Azimut yachts accounted for approximately 11% of our revenue in fiscal 2023. We believe non-Brunswick brands offer a migration for our existing customer base or fill a void in our product offerings, and accordingly, do not compete with the business generated from our other prominent brands.

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, and Europe, 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 Construction Enterprises, LLC (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.

As is typical in the industry, we deal with most of our manufacturers, other than Sea Ray, Boston Whaler, and Azimut Yachts, under renewable annual dealer agreements, each of which gives us the right to sell various makes and models of boats within a given geographic region. Any change or termination of these agreements, or the agreements discussed above, for any reason, or changes in competitive, regulatory or marketing practices, including rebate or incentive programs, could adversely affect our results of operations. Although there are a limited number of manufacturers of the type of boats and products that we sell, we believe that adequate alternative sources would be available to replace any manufacturer other than Sea Ray, Boston Whaler, and Azimut as a product source. These alternative sources may not be available at the time of any interruption, and alternative products may not be available at comparable terms, which could adversely affect operating results.

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, inclement weather such as Hurricanes Harvey and Irma in 2017 and Hurricane Ian in 2022, 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 an economic downturn, consumer discretionary spending levels generally decline, at times resulting in disproportionately large reductions in the sale of luxury goods. Consumer spending on luxury goods also may decline as a result of lower consumer confidence

 

8


 

levels, even if prevailing economic conditions are favorable. As a result, an economic downturn would likely impact us more than certain of our competitors due to our strategic focus on a higher end of our market. Although we have expanded our operations during periods of stagnant or modestly declining industry trends, the cyclical nature of the recreational boating industry or the lack of industry growth may adversely affect our business, financial condition, and results of operations. Any period of adverse economic conditions or low consumer confidence is likely to have a negative effect on our business.

Historically, in periods of lower consumer spending and depressed economic conditions, we have, among other things, substantially reduced our acquisition program, delayed new store openings, reduced our inventory purchases, engaged in inventory reduction efforts, closed a number of our retail locations, reduced our headcount, and amended and replaced our credit facility. Acquisitions remain an important strategy for us, and, subject to a number of conditions, including macro-economic conditions and finding attractive acquisition targets, we plan to continue to explore opportunities through this strategy.

 

2.
BASIS OF PRESENTATION:

These Unaudited Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information, the instructions to Quarterly Report on Form 10-Q, and Rule 10-01 of Regulation S-X and should be read in conjunction with our Annual Report on Form 10-K for the fiscal year ended September 30, 2023. Accordingly, these Unaudited Condensed Consolidated Financial Statements do not include all of the information and note disclosures required by accounting principles generally accepted in the United States for complete financial statements. All adjustments, consisting of only normal recurring adjustments considered necessary for fair presentation, have been reflected in these Unaudited Condensed Consolidated Financial Statements. The operating results for the six months ended March 31, 2024, are not necessarily indicative of the results that may be expected in future periods.

The preparation of Unaudited Condensed Consolidated Financial Statements in conformity with accounting principles generally accepted in the United States requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the Unaudited Condensed Consolidated Financial Statements and the reported amounts of revenue and expenses during the reporting periods. Significant estimates made by us in the accompanying Unaudited Condensed Consolidated Financial Statements include valuation allowances, valuation of goodwill and intangible assets, valuation of long-lived assets and valuation of contingent consideration liabilities. Actual results could differ from those estimates.

All references to the “Company,” “we,” “us,” and “our” mean, as a combined company, MarineMax, Inc. and its subsidiaries.

In order to provide comparability between periods presented, certain amounts have been reclassified from the previously reported consolidated financial statements to conform to the consolidated financial statement presentation of the current period. Specifically, goodwill was moved into a separate caption on the balance sheets. This reclassification had no impact on net income or retained earnings in either period presented. The Unaudited Condensed Consolidated Financial Statements include our accounts and the accounts of our subsidiaries. All significant intercompany transactions and accounts have been eliminated.

 

 

3.
NEW ACCOUNTING PRONOUNCEMENTS:

In September 2022, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2022-04 — Liabilities — Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations which is intended to enhance the transparency surrounding the use of supplier finance programs. The guidance requires companies that use supplier finance programs to make annual disclosures about the program’s key terms, the balance sheet presentation of related amounts, the confirmed amount outstanding at the end of the period and associated roll forward information. Only the amount outstanding at the end of the period must be disclosed in interim periods. The guidance does not affect the recognition, measurement or financial statement presentation of supplier finance program obligations. The guidance becomes effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, except for the roll forward information, which is effective for fiscal years beginning after December 15, 2023. We adopted this ASU during the first quarter of fiscal 2024 and the adoption did not have an impact on our consolidated financial statement disclosures.

In November 2023, the FASB issued ASU 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures,” which improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The guidance in this update is effective for all public entities for fiscal years beginning after December 15, 2023, which for the Company would be the fiscal year ending September 30, 2025, with early adoption permitted. The Company is currently evaluating the ASU to determine its impact on the Company's disclosures.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which includes amendments that further enhance income tax disclosures, primarily through standardization and disaggregation of rate reconciliation categories and income taxes paid by jurisdiction. The amendments in this ASU are effective for annual periods beginning after December 15, 2024, which for the Company would be the fiscal year ending September 30, 2026. Early adoption is permitted and

 

9


 

the amendments should be applied on a prospective basis. Retrospective application is permitted. The Company is currently evaluating the ASU to determine its impact on the Company's disclosures.