MarineMax, Inc. (HZO)

HZO 
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MarineMax, Inc. (HZO)

F4Q 2012 Earnings Conference Call

November 1, 2012 10:00 ET

Executives

Brad Cohen - ICR

Bill McGill - Chairman, President and Chief Executive Officer

Mike McLamb - Chief Financial Officer

Analysts

Jimmy Baker - B. Riley & Company

Peter Mahon - Dougherty & Company

Joe Hovorka - Raymond James

Presentation

Operator

Good day, and welcome to the MarineMax Fourth Quarter and Year End Earnings Conference Call. Today’s call is being recorded.

At this time, I'd like to turn the call over to Mr. Brad Cohen at ICR. Please go ahead.

Brad Cohen - ICR

Thank you, operator. Good morning, everyone. And thank you for joining this discussion of MarineMax’s 2012 fiscal fourth quarter and year end results. I am sure that you have 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 e-mail one to you directly.

I would now like to introduce the management team of MarineMax, Bill McGill, Chairman, President and Chief Executive Officer; and Mike McLamb, Chief Financial Officer of the company. Management will make some comments and then will be available for your questions. With that, I'll turn the call to Mike. Mike?

Mike McLamb - Chief Financial Officer

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’ll turn the call over to Bill.

Bill McGill - Chairman, President and Chief Executive Officer

Thank you, Mike and good morning everyone. Let me start by saying for those of you who are impacted by Hurricane Sandy, our thoughts and our prayers are with you and also your communities. I will comment more on the storm later.

We are pleased with our fourth quarter and fiscal 2012 results as we improved earnings $12.6 million over 2011 and reported a profitable year. Our team put forth exceptional efforts in a still challenged industry, and we ended the year with a revenue increase of about $44 million. This is more than a 9% increase from less stores driven by a double-digit annual same-store sales growth of over 11%. It is encouraging that we ended the year with a strong fourth quarter as revenues rose over $17 million, with an 18% increase in same-store sales. And for the eighth quarter in a row, our overall new boats unit sales grew.

It is great to see growing number of reports that indicate that the industry health is improving given the soft economic recovery. To be clear though, the strength in the industry has primarily been in segments, where we have not historically been heavily concentrated. The growing segments are aluminum, almost anything with an outboard engine and jet boats, as well as certain segments of our core products.

As a reminder, the bulk of our revenue comes from the stern-drive and inboard-powered boats. And as we have seen these other segments in the industry recover, we expanded our presence in those areas, such as pontoon products and more outboard products in select markets, where it makes sense. I am also very pleased to see that our core suppliers are broadening their offerings to include jet boats as well as more outboard-powered product for 2013, which should help drive sales and also market share.

Also the initial reports that emerged as the September quarter closed indicated that our core traditional products are also starting to see some strength. Our stern-drive and inboard boat owners are still boating, and with the age of their boats increasing every year, opportunities for us should improve going forward. While it's way too early to get too excited, it's much better news than a few years ago.

From an inventory and operating perspective, we continue to make improvements. We are comfortable with our current inventory levels and that speaks well to the strategies we have put in place to make sure we have the right models in our storage to meet our customers' demand for the selling season. Additionally, the cost reduction strategies we have put in place several years ago allowed us to grow our annual sales by over 9% and gross profit dollars by over 11%, while our expenses remained unchanged.

The operating leverage that we indicated we would be able to achieve is now beginning to show up in our results. We are very focused on maintaining a lean and effective expense structure. However, as I’ve noted in the past we will not reduce our efforts to service our customers or help to ensure that they are enjoying the boating lifestyle. These efforts include our Getaway trips, mobile service, our educational classes and our captains that teach our customers how to really use their boat. As the industry recovery continues, we want to build on our investments in the long-term which we’re focused on over the past four years. Our team is proving we can succeed in controlling the elements that are within our control as indicated by our improved results.

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