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 ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ 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 ~~and post~~ 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"~~company” in Rule 12b-2 of the Exchange Act.

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).

The number of outstanding shares of the ~~registrant's~~registrant’s Common Stock on ~~January 26, 2018~~July 24, 2023 was ~~26,576,661.~~21,910,499.

Three Months Ended

December 31,

2016

2017

Revenue

$
226,875

$
236,921

Cost of sales

173,737

177,672

Gross profit

53,138

59,249

Selling, general, and administrative expenses

47,095

50,246

Income from operations

6,043

9,003

Interest expense

1,569

2,542

Income before income tax provision

4,474

6,461

Income tax provision

1,831

2,249

Net income

$
2,643

$
4,212

Basic net income per common share

$
0.11

$
0.19

Diluted net income per common share

$
0.11

$
0.19

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

Basic

24,249,739

21,986,981

Diluted

24,923,125

22,712,648

See accompanying ~~notes~~Notes to ~~condensed consolidated financial statements.~~Condensed Consolidated Financial Statements.

September 30,

December 31,

2017

2017

ASSETS

CURRENT ASSETS:

Cash and cash equivalents

$
41,952

$
35,566

Accounts receivable, net

24,661

28,726

Inventories, net

401,301

440,720

Prepaid expenses and other current assets

5,842

6,615

Total current assets

473,756

511,627

Property and equipment, net of accumulated depreciation of $69,485 and $71,609

127,160

127,407

Goodwill and other long-term assets, net

30,305

30,404

Deferred tax assets, net

8,769

7,471

Total assets

$
639,990

$
676,909

LIABILITIES AND SHAREHOLDERS’ EQUITY

CURRENT LIABILITIES:

Accounts payable

$
26,432

$
10,366

Customer deposits

21,032

19,622

Accrued expenses

33,046

26,940

Short-term borrowings

254,177

307,739

Total current liabilities

334,687

364,667

Long-term liabilities

3,105

2,786

Total liabilities

337,792

367,453

SHAREHOLDERS' EQUITY:

Preferred stock, $.001 par value, 1,000,000 shares authorized, none issued or outstanding
   as of September 30, 2017 and December 31, 2017

—

—

Common stock, $.001 par value, 40,000,000 shares authorized, 26,314,066 and
   26,542,402 shares issued and 21,887,579 and 22,071,671 shares outstanding as of
   September 30, 2017 and December 31, 2017, respectively

26

27

Additional paid-in capital

249,974

253,714

Retained earnings

126,759

130,971

Treasury stock, at cost, 4,426,487 and 4,470,731 shares held as of September 30, 2017
   and December 31, 2017, respectively

(74,561
)

(75,256
)
Total shareholders’ equity

302,198

309,456

Total liabilities and shareholders’ equity

$
639,990

$
676,909

See accompanying ~~notes~~Notes to ~~condensed consolidated financial statements.~~Condensed Consolidated Financial Statements.

Additional

Total

Common Stock

Paid-in

Retained

Treasury

Shareholders’

Shares

Amount

Capital

Earnings

Stock

Equity

BALANCE, September 30, 2017

26,314,066

$
26

$
249,974

$
126,759

$
(74,561
)

$
302,198

Net income

-

-

-

4,212

-

4,212

Purchase of treasury stock

-

-

-

-

(695
)

(695
)
Shares issued pursuant to employee stock purchase
plan

30,822

1

434

-

-

435

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

13,129

-

(118
)

-

-

(118
)
Shares issued upon exercise of stock options

181,696

-

1,917

-

-

1,917

Stock-based compensation

2,689

-

1,507

-

-

1,507

BALANCE, December 31, 2017

26,542,402

$
27

$
253,714

$
130,971

$
(75,256
)

$
309,456

See accompanying ~~notes~~Notes to ~~condensed consolidated financial statements.~~Condensed Consolidated Financial Statements.

Three Months Ended

December 31,

2016

2017

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income

$
2,643

$
4,212

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

Depreciation and amortization

2,155

2,461

Deferred income tax provision

1,236

1,298

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

32

(21
)
Gain on insurance settlements

—

(82
)
Proceeds from insurance settlements

—

906

Stock-based compensation expense

2,058

1,507

(Increase) decrease in —

Accounts receivable, net

1,629

(5,035
)
Inventories, net

(41,644
)

(39,419
)
Prepaid expenses and other assets

(779
)

(872
)
Increase (decrease) in —

Accounts payable

(116
)

(16,066
)
Customer deposits

(7,358
)

(1,410
)
Accrued expenses and long-term liabilities

(3,099
)

(3,663
)
Net cash used in operating activities

(43,243
)

(56,184
)
CASH FLOWS FROM INVESTING ACTIVITIES:

Purchases of property and equipment

(4,353
)

(2,724
)
Proceeds from insurance settlements

—

146

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

774

101

Net cash used in investing activities

(3,579
)

(2,477
)
CASH FLOWS FROM FINANCING ACTIVITIES:

Net borrowings on short-term borrowings

46,960

53,562

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

785

2,352

Contingent acquisition consideration payments

—

(2,826
)
Payments on tax withholdings for equity awards

(87
)

(118
)
Purchase of treasury stock

(2,342
)

(695
)
Net cash provided by financing activities

45,316

52,275

NET DECREASE IN CASH AND CASH EQUIVALENTS

(1,506
)

(6,386
)
CASH AND CASH EQUIVALENTS, beginning of period

38,585

41,952

CASH AND CASH EQUIVALENTS, end of period

$
37,079

$
35,566

Supplemental Disclosures of Cash Flow Information:

Cash paid for:

Interest

$
1,616

$
2,841

Income taxes

100

—

Non-cash items:

Accrued acquisition of property and equipment

—

364

See accompanying ~~notes~~Notes to ~~condensed consolidated financial statements.~~Condensed Consolidated Financial Statements.

1.	~~COMPANY BACKGROUND:~~

COMPANY BACKGROUND:

We believe we are the world’s largest recreational boat and yacht retailer, ~~in the United States. We engage primarily in the retail sale, brokerage, and service of~~selling new and used recreational boats, ~~motors, trailers,~~yachts, and related marine ~~parts~~products and ~~accessories and offer slip~~services. As of June 30, 2023, we have over 125 locations worldwide, including 78 retail dealership locations, some of which include marinas. Following the October 2022 acquisition of IGY Marinas, MarineMax owns or operates 59 marina and storage ~~accommodations in certain locations. In addition,~~locations worldwide. Through Fraser Yachts and Northrop & Johnson, we ~~arrange related boat financing,~~believe we are the largest superyacht services provider, operating locations across the globe. Cruisers Yachts, a MarineMax company, manufactures boats and yachts with sales through our select retail dealership locations and through independent dealers. Intrepid Powerboats, a MarineMax company, manufactures powerboats and sells through a direct-to-consumer model. MarineMax provides finance and insurance services through wholly owned subsidiaries and extended service contracts. We also offer the charter of power and sailing yachts in the British Virgin Islands. As of December 31, 2017, we operated through 60 retail locations in 16 states, consisting of Alabama, Connecticut, Florida, Georgia, Maryland, Massachusetts, Minnesota, Missouri, New Jersey, New York, North Carolina, Ohio, Oklahoma, Rhode Island, South Carolina and Texas. Ouroperates MarineMax Vacations ~~operation maintains a facility~~ in Tortola, British Virgin Islands. We also own Boatyard, an industry-leading customer experience digital product company, and Boatzon, a boat and marine digital retail platform.

We are the ~~nation’s~~ largest retailer of Sea Ray and Boston Whaler recreational boats ~~and yachts,~~ which are manufactured by Brunswick Corporation (“Brunswick”). Sales of new Brunswick boats accounted for approximately ~~42%~~23% of our revenue in fiscal ~~2017.~~2022. Sales of new Sea Ray and Boston Whaler boats, both divisions of Brunswick, accounted for approximately ~~23%~~11% and ~~17%~~9%, respectively, of our revenue in fiscal ~~2017.~~2022. Brunswick is a world leading manufacturer of marine products and marine engines. ~~We believe we represented approximately 55% of Brunswick’s Sea Ray boat sales, during our fiscal 2017.~~

We have dealership agreements with Sea Ray, Boston Whaler, Harris, ~~Meridian,~~ and Mercury Marine, all subsidiaries or divisions of Brunswick. We also have dealer agreements with Italy-based Azimut-Benetti Group’s product line for Azimut ~~Yachts.~~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.

~~We have multi-year dealer~~ The agreements ~~with Brunswick covering~~for Sea Ray and Boston Whaler products, ~~that~~respectively, appoint us as the exclusive dealer of Sea Ray ~~boats in our geographic markets. We are the exclusive dealer for~~and Boston Whaler ~~through multi-year dealer agreements for many of~~boats, respectively, in our geographic markets. In addition, we are the exclusive dealer for Azimut Yachts for the entire United ~~States through a multi-year dealer agreement.~~States. Sales of new Azimut ~~boats~~yachts accounted for approximately 9%8% of our revenue in fiscal ~~2017.~~2022. 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 recently formed technology entity, New Wave Innovations. In June 2023, we acquired C&C Boat Works, a full-service boat dealer in Crosslake, Minnesota.

As is typical in the industry, we deal with most of our manufacturers, other than Sea Ray, Boston Whaler, ~~Meridian,~~ 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 adversely.~~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 ~~53%~~54%, ~~55%,~~50% and ~~55%~~51% of our dealership revenue during fiscal ~~2015, 2016,~~2020, 2021, and ~~2017,~~2022, respectively, can have a major impact on our operations. Local influences, such as corporate downsizing, military base closings, inclement weather such as ~~Hurricane Sandy in 2012 or~~ 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.

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.

~~Lower consumer spending resulting from a downturn~~Historically, in ~~the housing market and other economic factors adversely affected our business in fiscal 2007, and continued weakness in~~periods of lower consumer spending and depressed economic conditions, ~~had a substantial negative effect on our business and industry for several years after fiscal 2007. These conditions caused us to~~we have, among other things, substantially ~~reduce~~reduced our acquisition program, ~~delay~~delayed new store openings, ~~reduce~~reduced our inventory purchases, ~~engage~~engaged in inventory reduction efforts, ~~close~~closed a number of our retail locations, ~~reduce~~reduced our headcount, and ~~amend~~amended and ~~replace~~replaced our credit facility. Acquisitions remain an important strategy for us, and, ~~new store openings remain important strategies~~subject to ~~our company,~~a number of conditions, including macro-economic conditions and finding attractive acquisition targets, we plan to ~~accelerate our growth through these strategies as economic conditions~~ continue to improve. However, we cannot predict the length of unfavorable economic or industry conditions or the extent to which they will continue to adversely affect our operating results nor can we predict the effectiveness of the measures we have taken to addressexplore opportunities through this ~~environment.~~strategy.

2.	~~BASIS OF PRESENTATION:~~

BASIS OF PRESENTATION:

These ~~unaudited condensed consolidated financial statements~~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, ~~2017.~~2022. Accordingly, these ~~unaudited condensed consolidated financial statements~~Unaudited Condensed Consolidated Financial Statements do not include all of the information and ~~footnotes~~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. As of December 31, 2017, our financial instruments consisted of cash and cash equivalents, accounts receivable, accounts payable, customer deposits, and short-term borrowings. The carrying amounts of our financial instruments reported on the balance sheet as of December 31, 2017, approximated fair value due either to length to maturity or existence of variable interest rates, which approximate prevailing market rates.Unaudited Condensed Consolidated Financial Statements. The operating results for the ~~three~~nine months ended ~~December 31, 2017,~~June 30, 2023, are not necessarily indicative of the results that may be expected in future periods.

The preparation of ~~unaudited condensed consolidated financial statements~~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~~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~~Unaudited Condensed Consolidated Financial Statements include valuation allowances, valuation of goodwill and intangible assets, valuation of long-lived assets and valuation of ~~accruals.~~contingent consideration liabilities. Actual results could differ from those estimates.

~~Unless~~Effective May 2, 2021, our reportable segments changed as a result of the ~~context otherwise requires, all references to “MarineMax” mean MarineMax, Inc. prior to its~~Company’s acquisition of ~~five~~Cruisers Yachts, which changed management’s reporting structure and operating activities. We report our operations through two reportable segments: Retail Operations and Product Manufacturing. The change in reportable segments had no impact on the Company’s previously ~~independent recreational boat dealers~~reported historical consolidated financial statements. Where applicable, all prior periods presented have been revised to conform to the change in ~~March 1998 (including their related real estate companies) and all~~reportable segments. See Note 17.

All references to the “Company,~~” “our company,~~” “we,” “us,” and “our” mean, as a combined company, MarineMax, Inc. and the 27 recreational boat dealers, two boat brokerage operations, and two full-service yacht repair operations acquired as of December 31, 2017 (the “acquired dealers,” and together with the brokerage and repair operations, “operating subsidiaries” or the “acquired companies”).its subsidiaries.

In order to provide comparability between periods presented, certain amounts have been reclassified from the previously reported ~~unaudited condensed~~ consolidated financial statements to conform to the ~~unaudited condensed~~ consolidated financial statement presentation ~~for~~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~~Unaudited Condensed Consolidated Financial Statements include our accounts and the accounts of our ~~subsidiaries, all of which are wholly owned.~~subsidiaries. All significant intercompany transactions and accounts have been eliminated.

3.	3. NEW ACCOUNTING PRONOUNCEMENTS:

In ~~May 2014,~~September 2022, the ~~FASB~~Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. ~~2014-09, “Revenue from Contracts with Customers (Topic 606)” (“ASU 2014-09”), a converged standard on revenue recognition. The new pronouncement requires revenue recognition~~2022-04 — Liabilities — Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations which is intended to ~~depict~~enhance the ~~transfer~~transparency surrounding the use of ~~promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.~~supplier finance programs. The guidance ~~also specifies~~requires companies that use supplier finance programs to make annual disclosures about the ~~accounting for some costs to obtain~~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 ~~fulfill a contract with a customer, as well as enhanced disclosure requirements. ASU 2014-09 is~~financial statement presentation of supplier finance program obligations. The guidance becomes effective for ~~annual reporting periods~~fiscal years beginning after December 15, ~~2017,~~2022, including interim ~~reporting~~ periods within ~~that reporting period. Early adoption~~those fiscal years, except for the roll forward information, which is ~~permitted~~effective for ~~annual reporting periods~~fiscal years beginning after December 15, 2016. While we are continuing to evaluate the impact the adoption of ASU 2014-09 will have on our unaudited condensed consolidated financial statements, we currently do not believe the adoption of this standard will have a material impact on our unaudited condensed consolidated financial statements, or will cause a significant change to our current accounting policies or internal control over financial reporting for revenue recognition on boat, motor, and trailer sales, parts and service operations, brokerage commissions, slip and storage services, charter rentals, and fee income generated from finance and insurance products.2023. We plan to adopt ASU ~~2014-09~~2022-04 in fiscal ~~2019.~~

In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842)” (“ASU 2016-02”). This update requires organizations to recognize lease assets and lease liabilities on the balance sheet and also disclose key information about leasing arrangements. ~~ASU 2016-02 is effective for annual reporting periods beginning on or after December 15, 2018, and interim periods within those annual periods.~~ Earlier application is permitted for all entities as of the beginning of an interim or annual period. While we are continuing to evaluate the impact of the adoption of ASU 2016-02 on our unaudited condensed consolidated financial statements, we believe the adoption of ASU 2016-02 may have a significant and material impact to our unaudited condensed consolidated balance sheet given our current lease agreements for our leased retail locations.2024. We are currently evaluating the impact ~~the adoption of ASU 2016-02 will have on our other unaudited condensed consolidated financial statements. Based on a preliminary assessment, we expect~~ that most of our operating lease commitments will be subject to the new guidance and recognized as operating lease liabilities and right-of-use assets upon adoption, resulting in a material increase in the assets and liabilities recorded on our unaudited condensed consolidated balance sheet. We are continuing our assessment, which may identify additional impacts this standard will have on our consolidated financial ~~statements~~statements.

The Company currently has no other material accounting pronouncements recently adopted or yet to be adopted as of June 30, 2023.

REVENUE RECOGNITION:

The majority of our revenue is from contracts with customers for the sale of boats, motors, and trailers. We recognize revenue from boat, motor, and trailer sales upon transfer of control of the boat, motor, or trailer to the customer, which is generally upon acceptance of the boat, motor, and ~~parts~~trailer by the customer and ~~service operations~~the satisfaction of our performance obligations. The transaction price is determined with the customer at the time of sale. Customers may trade in a used boat to apply toward the purchase of a new or used boat. The trade-in is a type of noncash consideration measured at fair value, based on external and internal observable and unobservable market data and applied as payment to the contract price for the purchased boat. At the time of acceptance, the customer is able to direct the use of, and obtain substantially all of, the benefits of the boat, motor, ~~trailer,~~ or part is delivered to or accepted by the customer or the service is completed. We recognize deferred revenue from service operations and slip and storage services on a straight-line basis over the term of the contract as services are completed.trailer. We recognize commissions earned from a brokerage sale ~~at the time~~when the related brokerage transaction ~~closes. We recognize income from the rentals~~closes upon transfer of ~~chartering power and sailing yachts on a straight-line basis over the term~~control of the ~~contract as services are completed.~~boat, motor, or trailer to the customer, which is generally upon acceptance by the customer.

We do not directly finance our customers’ boat, motor, or trailer purchases. In many cases, we assist with third-party financing for boat, motor, and trailer sales. We recognize commissions earned by us for placing notes with financial institutions in connection with customer boat financing when we recognize the related boat sales. Pursuant to negotiated agreements with financial institutions, we are charged back for a portion of these fees should the customer terminate or default on the related finance contract before it is outstanding for a stipulated minimum period of time. We base the chargeback allowance, which was not material to the Unaudited Condensed Consolidated Financial Statements taken as a whole as of June 30, 2023, on our experience with repayments or defaults on the related finance contracts. We recognize variable consideration from commissions earned on extended warranty service contracts sold on behalf of third-party insurance companies at generally the later of customer acceptance of the service contract terms as evidenced by contract execution or recognition of the related boat sale. We also recognize marketing fees earned on ~~credit, life, accident, disability, gap, and hull~~ insurance products sold byon behalf of third-party insurance companies at the later of customer acceptance of the insurance product as evidenced by contract execution or when the related boat sale is recognized. ~~Pursuant~~

We recognize revenue from parts and service operations (boat maintenance and repairs) over time as services are performed. Each boat maintenance and repair service is a single performance obligation that includes both the parts and labor associated with the service. Payment for boat maintenance and repairs is typically due upon the completion of the service, which is generally completed within a short period of time from contract inception. We satisfy our performance obligations, transfer control, and recognize revenue over time for parts and service operations because we are creating a contract asset with no alternative use and we have an enforceable right to ~~negotiated~~payment for performance completed to date. Contract assets primarily relate to our right to consideration for work in process not yet billed at the reporting date associated with maintenance and repair services. We use an input method to recognize revenue and measure progress based on labor hours expended to satisfy the performance obligation at average labor rates. We have determined labor hours expended to be the relevant measure of work performed to complete the maintenance and repair service for the customer. As a practical expedient, because repair and maintenance service contracts have an original duration of one year or less, we do not consider the time value of money, and we do not disclose estimated revenue expected to be recognized in the future for performance obligations that are unsatisfied (or partially unsatisfied) at the end of the reporting period or when we expect to recognize such revenue. Contract assets, recorded in prepaid expenses and other current assets, totaled approximately $5.9 million and$7.0 million as of September 30, 2022 and June 30, 2023, respectively.

We recognize revenue from the sale of our manufactured boats and yachts when control of the boat or yacht is transferred to the dealer or customer, which is generally upon acceptance by the dealer or customer. At the time of acceptance, the dealer or customer is able to direct the use of, and obtain substantially all of the benefits of, the boat or yacht. We have elected to record shipping and handling activities that occur after the dealer or customer has obtained control of the boat or yacht as a fulfillment activity.

We recognize lessor common area charges, utility sales, food and beverage sales and other ancillary goods and services. Performance obligations include performing common area maintenance and providing utilities, food and beverages, and other ancillary goods and services when goods are transferred or services are performed. Payment terms typically align with when the goods and services are provided.

Contract liabilities primarily consist of customer deposits. We recognize contract liabilities as revenue at the time of acceptance and the transfer of control to the customers.

We recognize revenue from service operations and slip and storage services over time on a straight-line basis over the term of the contract as our performance obligations are met. We recognize revenue from the rentals of chartering power yachts over time on a straight-line basis over the term of the contract as our performance obligations are met.

The following table sets forth percentages on the timing of revenue recognition:


	Retail Operations						Product Manufacturing
	Three Months Ended						Three Months Ended
	June 30,						June 30,
	2022			2023			2022			2023
Goods and services transferred at a point in time		91.2	%		88.1	%		100.0	%		100.0	%
Goods and services transferred over time		8.8	%		11.9	%		—			—
Revenue		100.0	%		100.0	%		100.0	%		100.0	%


	Retail Operations						Product Manufacturing
	Nine Months Ended						Nine Months Ended
	June 30,						June 30,
	2022			2023			2022			2023
Goods and services transferred at a point in time		90.5	%		86.9	%		100.0	%		100.0	%
Goods and services transferred over time		9.5	%		13.1	%		—			—
Revenue		100.0	%		100.0	%		100.0	%		100.0	%

The following tables set forth our revenue disaggregated into categories that depict the nature, amount, timing, and uncertainty of revenue and cash flows affected by economic factors.


	Three months ended June 30, 2022									Three months ended June 30, 2023
	Retail Operations			Product Manufacturing			Total			Retail Operations			Product Manufacturing			Total
New boat sales		72.3	%		94.8	%		73.5	%		69.3	%		93.1	%		70.8	%
Used boat sales		8.0	%		3.7	%		7.6	%		8.1	%		5.3	%		7.7	%
Maintenance, repair, storage, rental, and charter services		7.2	%		—			6.9	%		10.4	%		—			9.9	%
Finance and insurance products		3.2	%		—			3.1	%		2.9	%		—			2.8	%
Parts and accessories		3.8	%		0.8	%		3.6	%		4.5	%		0.9	%		4.2	%
Brokerage sales		5.5	%		0.7	%		5.3	%		4.8	%		0.7	%		4.6	%
Revenue		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%


	Nine months ended June 30, 2022									Nine months ended June 30, 2023
	Retail Operations			Product Manufacturing			Total			Retail Operations			Product Manufacturing			Total
New boat sales		72.3	%		96.2	%		73.5	%		68.5	%		95.6	%		69.9	%
Used boat sales		7.9	%		2.7	%		7.5	%		7.0	%		3.1	%		6.6	%
Maintenance, repair, storage, rental, and charter services		7.6	%		—			7.3	%		12.0	%		—			11.5	%
Finance and insurance products		3.1	%		—			3.0	%		2.9	%		—			2.8	%
Parts and accessories		3.3	%		0.7	%		3.1	%		5.0	%		0.6	%		4.8	%
Brokerage sales		5.8	%		0.4	%		5.6	%		4.6	%		0.7	%		4.4	%
Revenue		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%

The following table sets forth our maintenance, repair, storage, rental, charter services and parts and accessories revenue for our Retail Operations by location type.


	Three months ended		Three months ended
	June 30, 2022		June 30, 2023
	(Amounts in thousands)
Marina/storage locations	$	50,514	$	79,793
Locations without marina/storage		21,310		22,537
Maintenance, repair, storage, rental, charter services, parts and accessories revenue	$	71,824	$	102,330

	Nine months ended		Nine months ended
	June 30, 2022		June 30, 2023
	(Amounts in thousands)
Marina/storage locations	$	107,843	$	206,249
Locations without marina/storage		76,495		84,759
Maintenance, repair, storage, rental, charter services, parts and accessories revenue	$	184,338	$	291,008

LEASES:

Lessee

Substantially all of the leases that we enter into are real estate leases. We lease numerous facilities relating to our operations, including showrooms, display lots, marinas, service facilities, slips, offices, equipment and our corporate headquarters. Leases for real property have terms, including renewal options, ranging from one to in excess of twenty-five years. In addition, we lease certain charter boats for our yacht charter business. As of June 30, 2023, the weighted-average remaining lease term for our leases was approximately 22 years. All of our leases are classified as operating leases, which are included as right-of-use (“ROU”) assets and operating lease liabilities in the accompanying Unaudited Condensed Consolidated Balance Sheets. For the three months ended June 30, 2022 and 2023,

operating lease expenses recorded in selling, general, and administrative expenses were approximately $6.0 million and $8.2 million, respectively. For the nine months ended June 30, 2022 and 2023, operating lease expenses recorded in selling, general, and administrative expenses were approximately $17.6 million and $22.5 million, respectively. Our lease agreements ~~with financial~~do not contain any material residual value guarantees or material restrictive covenants. We do not have any significant leases that have not yet commenced but that create significant rights and obligations for us. We have elected the practical expedient under ASC Topic 842 to not separate lease and nonlease components.

Our real estate and equipment leases often require that we pay maintenance in addition to rent. Additionally, our real estate leases generally require payment of real estate taxes and insurance. Maintenance, real estate taxes, and insurance ~~institutions, we~~payments are ~~charged back for~~generally variable and based on actual costs incurred by the lessor. Therefore, these amounts are not included in the consideration of the contract when determining the ROU asset and lease liability but are reflected as variable lease expenses.

Substantially all of our lease agreements include fixed rental payments. Certain of our lease agreements include fixed rental payments that are adjusted periodically by a ~~portion~~fixed rate or changes in an index. The fixed payments, including the effects of ~~these fees should~~changes in the ~~customer terminate~~fixed rate or ~~default on~~amount, and renewal options reasonably certain to be exercised, are included in the measurement of the related ~~finance~~lease liability. Most of our real estate leases include one or ~~insurance contract before~~more options to renew, with renewal terms that can extend the lease term from one to five years or more. The exercise of lease renewal options is at our sole discretion. If it is ~~outstanding~~reasonably certain that we will exercise such options, the periods covered by such options are included in the lease term and are recognized as part of our right of use assets and lease liabilities. The depreciable life of assets and leasehold improvements are limited by the expected lease term, which includes renewal options reasonably certain to be exercised.

For our incremental borrowing rate, we generally use a portfolio approach to determine the discount rate for leases with similar characteristics. We determine discount rates based upon our hypothetical credit rating, taking into consideration our short-term borrowing rates, and then adjusting as necessary for the appropriate lease term. As of June 30, 2023, the weighted-average discount rate used was approximately 6.4%.

As of June 30, 2023, maturities of lease liabilities by fiscal year are summarized as follows:


	(Amounts in thousands)
2023 (remaining)	$	3,486
2024		16,860
2025		14,241
2026		13,385
2027		12,944
Thereafter		269,512
Total lease payments		330,428
Less: interest		(200,702	)
Present value of lease liabilities	$	129,726

Supplemental cash flow information related to leases was as follows:


	Nine Months Ended
	June 30,
	2022		2023
	(Amounts in thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	12,128	$	13,088
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	4,143	$	35,941

Lessor

The Company enters into certain agreements as a ~~stipulated minimum period~~lessor under which it rents buildings to third parties. Initial terms of ~~time. We base~~our real estate leases are generally three to five years, exclusive of options to renew, which are generally exercisable at our sole discretion for one term of five years. These leases meet all of the ~~chargeback allowance, which was not material to~~criteria of an operating lease and are accordingly recognized straight line over the lease term.

The following table summarizes the amount of operating lease income and other income included in total revenues in the accompanying unaudited condensed consolidated ~~financial~~ statements ~~taken~~of operations:


	Nine Months Ended
	June 30,
	2022		2023
	(Amounts in thousands)
Operating leases:
Operating lease income	$	964	$	6,857
Variable lease income	$	632	$	470
Total rental income	$	1,596	$	7,327

As of June 30, 2023, future minimum payments to be received during the next five years and thereafter are as ~~a whole as of December 31, 2017, on our experience with repayments or defaults on the related finance or insurance contracts.~~follows:


	(Amounts in thousands)
2023 (remaining)	$	2,284
2024		8,002
2025		5,307
2026		3,889
2027		2,866
Thereafter		1,166
Total lease payments	$	23,514

~~We also recognize commissions earned on extended warranty service contracts sold on behalf of third-party insurance companies~~

INVENTORIES:

Inventories are stated at the ~~later~~lower of ~~customer acceptance~~cost or net realizable value. The cost of the service contract terms as evidenced by contract execution or recognition of the related boat sale. We are charged back for a portion of these commissions should the customer terminate or default on the service contract prior to its scheduled maturity. We determined the chargeback allowance, which was not material to the unaudited condensed consolidated financial statements taken as a whole as of December 31, 2017, based uponinventories purchased from our ~~experience with terminations or defaults on the service contracts.~~

5.	~~INVENTORIES:~~

~~Inventory costs~~vendors consist of the amount paid to acquire the inventory, net of vendor consideration and purchase discounts, the cost of equipment added, reconditioning costs, inventory deposits, and transportation costs relating to acquiring inventory for sale. ~~We state new~~Trade-in used boats are initially recorded at fair value and adjusted for reconditioning and other costs. The cost of inventories that are manufactured by the Company consist of material, labor, and manufacturing overhead. Unallocated overhead and abnormal costs are expensed as incurred. New and used ~~boat, motor,~~boats, motors, and ~~trailer~~trailers inventories ~~at the lower of cost, determined~~are accounted for on a ~~specific-identification basis, or net realizable value. We state~~specific identification basis. Raw materials and parts, accessories, and ~~accessories at the lower of cost, determined~~other inventories are accounted for on an average cost ~~basis, or net realizable value.~~basis. We utilize our historical experience, the aging of the inventories, and our consideration of current market trends as the basis for determining a lower of cost or net realizable ~~value valuation allowance. As of September 30, 2017 and December 31, 2017, our~~value. We do not believe there is a reasonable likelihood that there will be a change in the future estimates or assumptions we use to calculate the lower of cost or net realizable ~~value valuation allowance for new and used boat, motor, and trailer inventories was $1.8 million and $2.6 million, respectively.~~value. If events occur and market conditions change, ~~causing~~ the ~~fair value to fall below carrying value, the lower of cost or~~ net realizable value ~~valuation allowance~~of our inventories could ~~increase.~~change.

Inventories consisted of the following as of:


	September 30, 2022		June 30, 2023
	(Amounts in thousands)
New and used boats, motors, and trailers	$	272,422	$	558,144
In transit inventory and deposits		117,268		106,228
Parts, accessories, and other		17,143		20,268
Work-in-process		21,691		25,281
Raw materials		25,835		29,193
Inventories	$	454,359	$	739,114

GOODWILL:

6.	~~IMPAIRMENT OF LONG-LIVED ASSETS:~~

We account for acquisitions in accordance with FASB ~~Accounting Standards Codification 360-10-40, “Property, Plant, and Equipment - Impairment or Disposal of Long-Lived Assets”~~ASC 805, “Business Combinations” (“ASC ~~360-10-40”~~805”), ~~requires that long-lived~~and goodwill in accordance with ASC 350, “Intangibles — Goodwill and Other” (“ASC 350”). For business combinations, the excess of the purchase price over the estimated fair value of net assets ~~such~~acquired in a business combination is recorded as ~~property~~goodwill.

In June 2023, we acquired C&C Boat Works, a full-service boat dealer in Crosslake, Minnesota.

In January 2023, we acquired Boatzon, a boat and ~~equipment and~~marine digital retail platform, through our recently formed technology entity, New Wave Innovations.

In December 2022, we acquired Midcoast Marine Group, a leading full-service marine construction Company based on Central Florida's Gulf Coast.

In October 2022, we purchased ~~intangibles~~all of the outstanding equity of IGY Marinas for an aggregate purchase price of $480,000,000, subject to ~~amortization,~~certain customary closing and post-closing adjustments, and net working capital adjustments including certain holdbacks. In addition, the former equity owners of IGY Marinas (“IGY Sellers”) have the opportunity to earn additional consideration as part of a contingent consideration arrangement subject to the achievement of certain performance metrics. The maximum amount of consideration that can be ~~reviewed~~paid under the contingent consideration arrangement is $100.0 million. The fair value of $67.7 million of the contingent

consideration arrangement was estimated with the assistance of a third-party valuation expert by applying an income valuation approach and is included in other long-term liabilities. The earnout was estimated based on certain performance metrics as a base scenario (among other assumptions) subject to a Monte Carlo simulation. The IGY Sellers are subject to certain customary post-closing covenants and indemnities. The acquisition of IGY Marinas expands the Company’s marina footprint and superyacht services offerings and strengthens its position as the global leader in superyacht and luxury marina destinations in the United States of America, the Caribbean, Mexico and Europe.

The following table summarizes the consideration paid for IGY Marinas and the preliminary allocation of the purchase consideration to the estimated fair value of the assets acquired and liabilities assumed at the acquisition date.


	(Amounts in thousands)
Consideration:
Cash purchase price and net working capital adjustments, net of cash acquired of $28,075	$	482,998
Contingent consideration arrangement		67,700
Noncontrolling interests in consolidated subsidiaries		2,208
Fair value of total consideration transferred	$	552,906

Recognized amounts of identifiable assets acquired and liabilities assumed:
Net working capital, net of cash acquired of $28,075		(22,386	)
Property and equipment		240,190
Operating lease right-of-use assets		39,720
Intangible assets		30,446
Equity method investments		14,098
Other long-term assets		6,973
Operating lease liabilities		(29,416	)
Other liabilities		(1,301	)
Deferred tax liabilities, net		(20,777	)
Total identifiable net assets acquired:		257,547
Goodwill	$	295,359
Total	$	552,906

The fair value of current assets acquired includes accounts receivable and other current assets of approximately $4.5 million and $4.1 million, respectively. The fair value of current liabilities assumed includes contract liabilities of approximately $13.3 million, tax contingency reserves of approximately $8.0 million and accrued expenses of approximately $6.6 million. We recorded approximately $295.4 million in goodwill and approximately $30.4 million of other identifiable intangibles, composed of indefinite-lived trade names and customer relationships, in connection with the IGY Marinas acquisition, however, purchase price allocations are preliminary pending receipt of final valuation analyses of certain assets from our valuation advisor. The goodwill represents the assembled workforce, our enhanced geographic reach, and global brand infrastructure. Goodwill of approximately $138.1 million is expected to be deductible for tax purposes. As of the acquisition date, the customer relationships have a weighted average useful life of approximately 4.5 years. For the nine months ended June 30, 2022 and 2023, IGY Marinas revenue was approximately $78.3 and $91.1 million, respectively. For the nine months ended June 30, 2022 loss before taxes was approximately $1.0 million. For the nine months ended June 30, 2023 income before taxes was approximately $17.0 million. Income before taxes does not include parent level corporate costs. The determination of fair value of assets acquired and liabilities assumed requires estimates and assumption that can change as a result of new information obtained about facts and circumstances that existed as of the acquisition date. As such, the Company will make any necessary adjustments to goodwill in the period identified within one year of the acquisition date. Adjustments outside of that range are recognized currently in earnings. Through one of the subsidiaries that it acquired in the IGY Marinas acquisition, the Company has an investment in certain entities that own a marina asset in Cannes, France, which is accounted for under the equity method, as well as a series of notes receivable due from these entities, with a total balance of approximately $6.4 million as of June 30, 2023.

In April 2022, through Northrop & Johnson, we acquired Superyacht Management, S.A.R.L., better known as SYM, a superyacht management company based in Golfe-Juan, France.

In November 2021, we completed acquisitions for Intrepid, a premier manufacturer of powerboats, and Texas MasterCraft, a watersports dealer in Northern Texas, for aggregate consideration of approximately $67.2 million (net of cash acquired of $9.4 million), including estimated contingent consideration of $6.0 million. Tangible assets acquired, net of liabilities assumed and cash acquired, totaled approximately $20.3 million; intangible assets acquired totaled $7.3 million; and total goodwill recognized was approximately $39.6 million. The goodwill represents the assembled workforce, acquired capabilities, and future economic benefits resulting from the acquisitions. Approximately $10.7 million of goodwill related to the acquisitions, wholly attributable to Texas MasterCraft, is deductible for tax purposes.

In July 2021, we purchased Nisswa Marine a full-service dealer located in Nisswa, Minnesota. In May 2021, we purchased Cruisers Yachts, a manufacturer of sport yacht and yachts with sales through our select retail dealership locations and through independent dealers. In October 2020, we purchased SkipperBud’s, one of the largest boat sales, brokerage, service and marina/storage groups in the United States.

In total, current and previous acquisitions have resulted in the recording of $246.5 million and $603.2 million in goodwill and other intangible assets as of September 30, 2022 and June 30, 2023, respectively. In accordance with ASC 350, we test goodwill for impairment at least annually and whenever events or changes in circumstances indicate that the carrying ~~amount of an asset~~value may not be recoverable. ~~Recoverability of~~Our annual impairment test is performed during the ~~asset is measured by comparison of its carrying amount to undiscounted future net cash flows the asset is expected to generate.~~third fiscal quarter. If ~~such assets are considered to be impaired, the impairment to be recognized is measured as the amount by which~~ the carrying amount of ~~the asset~~a reporting unit’s goodwill exceeds its fair ~~market value. Estimates of expected future cash flows represent our best estimate based on currently available information and reasonable and supportable assumptions. Any~~value we recognize an impairment ~~recognized~~loss in accordance with ASC ~~360-10-40 is permanent~~350. As of June 30, 2023, and ~~may not be restored. The analysis is performed at a regional level for indicators of permanent impairment given the geographical interdependencies among our locations. Based~~based upon our most recent analysis, ~~which excludes fixed assets classified as held for sale which~~we determined through our qualitative assessment that it is not “more likely than not” that the fair values of our reporting units are ~~recorded at fair value,~~less than their carrying values. As a result, we ~~believe no~~did not perform a quantitative goodwill impairment test.

The following table sets forth the changes in carrying amount of ~~long-lived assets existed as of December 31, 2017.~~goodwill by reportable segment during the nine months ended June 30, 2023:


	Retail Operations		Product Manufacturing		Total
	(Amounts in thousands)
Balance as of September 30, 2022	$	166,551	$	69,034	$	235,585
Goodwill acquired		322,289		—	$	322,289
Foreign currency translation		4,403		—	$	4,403
Balance as of June 30, 2023	$	493,243	$	69,034	$	562,277

7.	~~INCOME TAXES:~~

INCOME TAXES:

We account for income taxes in accordance with FASB ~~Accounting Standards Codification~~ASC 740, “Income Taxes” (“ASC 740”). Under ASC 740, we recognize deferred tax assets and liabilities for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. We measure deferred tax assets and liabilities using enacted tax rates expected to apply to taxable income in the years in which we expect those temporary differences to be recovered or settled. We record valuation allowances to reduce our deferred tax assets to the amount expected to be realized by considering all available positive and negative evidence. ~~As of September 30, 2017 and December 31, 2017, we had a valuation allowance on our deferred tax assets of $246,000 and $299,000, respectively.~~

During the three months ended ~~December 31, 2016~~June 30, 2022 and ~~2017~~2023, we recognized an income tax provision of ~~$1.8~~$24.1 million and ~~$2.2~~$15.5 million, respectively. During the nine months ended June 30, 2022 and 2023, we recognized an income tax provision of $52.4 and $34.7 million, respectively. The effective income tax rate for the three months ended ~~December 31, 2016~~June 30, 2022 and ~~2017~~2023 was ~~40.9%~~25.6% and ~~34.8%~~25.9%, ~~respectively. Due to the passage of the Tax Cuts and Jobs Act legislation in December 2017 which lowered the federal corporate~~respectively. The effective income tax rate from 35% to 21% (among other changes), our deferred tax assets were re-measured as of December 31, 2017 resulting in an approximately $889,000 reduction in our beginning deferred tax assets and corresponding increase in our income tax provision for the ~~three~~nine months ended ~~December 31, 2017. The final impact of the Tax Cuts~~June 30, 2022 and ~~Jobs Act legislation may differ due to, among other things, changes in interpretations, our assumptions used, issuance of additional guidance,~~2023 was 24.7% and ~~actions~~26.9%, respectively.

10.

SHORT-TERM BORROWINGS AND LONG-TERM DEBT:

Short-term Borrowings

In August 2022, we ~~may take as a result of the new legislation.~~

8.	~~SHORT-TERM BORROWINGS:~~

~~In May 2017, we amended and restated our Inventory Financing Agreement (the “Amended Credit Facility”), originally~~ entered into ~~in June 2010,~~a Credit Agreement with Manufacturers and Traders Trust Company (“M&T Bank”) as ~~subsequently amended, with~~Administrative Agent, Swingline Lender, and Issuing Bank, Wells Fargo Commercial Distribution Finance, LLC, ~~(formerly GE Commercial Distribution Finance Corporation)~~as Floor Plan Agent, and the lenders party thereto (the “New Credit Agreement”). The ~~May 2017 amendment and restatement extended~~New Credit Agreement provides the ~~maturity date~~Company short-term borrowing in the form of ~~the Credit Facility to October 2020, and the Amended Credit Facility includes two additional one-year extension periods,~~a line of credit with ~~lender approval. The May 2017 amendment and restatement, among other things, modified the amount of~~asset-based borrowing availability ~~and maturity date of the Credit Facility. The Amended Credit Facility provides a floor plan financing commitment~~(Floor Plan) of up to ~~$350.0~~$750 million ~~an increase from~~and establishes a revolving credit facility in the ~~previous limit~~maximum amount of ~~$300.0~~$100 million ~~subject~~(including a $20 million swingline facility and a $20 million letter of credit sublimit). The New Credit Agreement also provides long-term debt in the form of a delayed draw term loan facility to ~~borrowing~~finance the acquisition of IGY Marinas in the maximum amount of $400 million, and a $100 million delayed draw mortgage loan facility. The maturity of each of the facilities is August 2027.

The interest rate is (a) for amounts outstanding under the Floor Plan, 3.45% above the one month secured term rate as administered by the CME Group Benchmark Administration Limited (CBA) (“SOFR”), (b) for amounts outstanding under the revolving credit facility or the term loan facility, a range of 1.50% to 2.0%, depending on the total net leverage ratio, above the one month, three month, or six month term SOFR rate, and (c) for amounts outstanding under the mortgage loan facility, 2.20% above the one month, three month, or six month term SOFR rate. The alternate base ~~availability resulting from~~rate with a margin is available for amounts outstanding under the ~~amount~~revolving credit, term, and ~~aging of our inventory.~~mortgage loan facilities and the Euro Interbank Offered Rate plus a margin is available for borrowings in Euro or other currencies other than dollars under the revolving credit facility.

The ~~Amended~~New Credit ~~Facility~~Agreement has certain financial covenants as specified in the agreement. The covenants include provisions that our leverage ratio must not exceed ~~2.75~~3.35 to 1.0 and that our ~~current~~consolidated fixed charge coverage ratio must be greater than ~~1.2~~1.10 to 1.0. As of June 30, 2023, we were in compliance with all covenants under the New Credit Agreement. The New Credit Agreement is secured by the Company’s personal property assets, including inventory and related accounts receivable. The mortgage loans will also be secured by the real estate pledged as collateral for such loans.

In May 2020, we entered into a Loan and Security Agreement (the “Credit Facility”), with Wells Fargo Commercial Distribution Finance LLC, M&T Bank, Bank of the West, and Truist Bank. In July 2021, we amended the Credit Facility to increase the borrowing availability to $500 million, extend the term to expire by one year to July 2024, with two one-year options to renew, subject to lender approval, and modify certain provisions to provide additional liquidity to the Company. The Credit Facility provided the Company a line of credit with asset-based borrowing availability of up to $500 million for working capital and inventory financing, with the amount permissible pursuant to a borrowing base formula. The Credit Facility was set to expire in July 2024, subject to extension for two one-year periods, with lender approval. The Credit Facility was replaced by the New Credit Agreement.

As of June 30, 2023, our indebtedness associated with financing our inventory and working capital needs totaled approximately $515.6 million. As of June 30, 2023, our short-term borrowings, which solely consisted of the Floor Plan, included unamortized debt issuance costs of approximately $1.6 million. As of June 30, 2022, our indebtedness associated with financing our inventory and working capital needs totaled approximately $107.5 million and included unamortized debt issuance costs of approximately $0.3 million.

As of June 30, 2022 and 2023, the interest rate on the outstanding short-term borrowings, which solely consisted of the Floor Plan, was approximately 4.2% and 6.7% respectively. As of June 30, 2023, our additional available borrowings under our New Credit Agreement were approximately $10.5 million based upon the outstanding borrowing base availability. As of June 30, 2023, no amounts were withdrawn on the revolving credit facility or the delayed draw mortgage loan facility.

As is common in our industry, we receive interest assistance directly from boat manufacturers, including Brunswick. The interest assistance programs vary by manufacturer, but generally include periods of free financing or reduced interest rate programs. The interest assistance may be paid directly to us or our lender depending on the arrangements the manufacturer has established. We classify interest assistance received from manufacturers as a reduction of inventory cost and related cost of sales.

The availability and costs of borrowed funds can adversely affect our ability to obtain adequate boat inventory and the holding costs of that inventory as well as the ability and willingness of our customers to finance boat purchases. However, we rely on our New Credit Agreement to purchase our inventory of boats. The aging of our inventory limits our borrowing capacity as defined curtailments reduce the allowable advance rate as our inventory ages. Our access to funds under our New Credit Agreement also depends upon the ability of our lenders to meet their funding commitments, particularly if they experience shortages of capital, experience excessive volumes of borrowing requests from others during a short period of time or otherwise experience liquidity issues of their own as other lending institutions have recently experienced. Unfavorable economic conditions, weak consumer spending, turmoil in the credit markets, and lender difficulties, among other potential reasons, could interfere with our ability to utilize our New Credit Agreement to fund our operations. Any inability to utilize our New Credit Agreement could require us to seek other sources of funding to repay amounts outstanding under the credit agreements or replace or supplement our credit agreements, which may not be possible at all or under commercially reasonable terms.

Similarly, decreases in the availability of credit and increases in the cost of credit adversely affect the ability of our customers to purchase boats from us and thereby adversely affect our ability to sell our products and impact the profitability of our finance and insurance activities.

Long-term Debt

The below table summarizes the Company's long-term debt.


	September 30, 2022			June 30, 2023
	(Amounts in thousands)
Mortgage facility payable to Flagship Bank bearing interest at 7.25% as of June 30, 2023 (prime minus 100 basis points with a floor of 2.00%). Requires monthly principal and interest payments with a balloon payment of approximately $4.0 million due August 2027.	$	6,403		$	6,031
Mortgage facility payable to Seacoast National Bank bearing interest at 7.63% as of June 30, 2023 (greater of 3.00% or prime minus 62.5 basis points). Requires monthly interest payments for the first year and then monthly principal and interest payments with a balloon payment of approximately $6.0 million due September 2031.		17,098			17,060
Mortgage facility payable to Hancock Whitney Bank bearing interest at 7.63% as of June 30, 2023 (prime minus 62.5 basis points with a floor of 2.25%). Requires monthly principal and interest payments with a balloon payment of approximately $15.5 million due November 2027. 50% of the outstanding borrowings are hedged with an interest rate swap contract with a fixed rate of 3.20%.		25,192			23,757
Revolving mortgage facility with FineMark National Bank & Trust bearing interest at 8.00% as of June 30, 2023 (base minus 25 basis points with a floor of 3.00%). Facility matures in October 2027. Current available borrowings under the facility were approximately $23.2 million at June 30, 2023.		—			—
Term loan payable to M&T Bank bearing interest at 6.67% as of June 30, 2023. Requires quarterly principal and interest payments. Facility matures in August 2027.		—			385,000
Loan payable to TRANSPORT S.a.s di Taula Vittorio & C. bearing interest at 6.55% as of June 30, 2023. Requires quarterly principal and interest payments. Facility matures in December 2030.		—			1,496
Total long-term debt		48,693			433,344
Less: current portion		(2,882	)		(32,409	)
Less: unamortized portion of debt issuance costs		(510	)		(1,706	)
Long-term debt, net current portion and unamortized debt issuance costs	$	45,301		$	399,229

11.

STOCK-BASED COMPENSATION:

We account for our stock-based compensation plans following the provisions of FASB ASC 718, “Compensation — Stock Compensation” (“ASC 718”). In accordance with ASC 718, we use the Black-Scholes valuation model for valuing all options granted (Note 13) and shares purchased under our Amended 2008 Employee Stock Purchase Plan (“Stock Purchase Plan”). We measure compensation for restricted stock awards and restricted stock units (Note 14) at fair value on the grant date based on the number of shares expected to vest and the quoted market price of our common stock. We recognize compensation cost for all awards in operations on a straight-line basis over the requisite service period for each separately vesting portion of the award.

During the three months ended June 30, 2022 and 2023, we recognized stock-based compensation expense of approximately $3.9 million and $5.5 million,respectively, and for the nine months ended June 30, 2022 and 2023, we recognized stock-based compensation expense of approximately $11.1 million and $15.7 million, respectively, in selling, general, and administrative expenses in the accompanying Unaudited Condensed Consolidated Statements of Operations.

Cash received from option exercises under all share-based compensation arrangements for the three months ended June 30, 2022 and 2023, was approximately $1.0 million and $1.1 million, respectively. Cash received from option exercises or the Stock Purchase Plan under all share-based compensation arrangements for the nine months ended June 30, 2022 and 2023, was approximately $2.1 million and $2.4 million, respectively. We currently expect to satisfy share-based awards with registered shares available to be issued from the Stock Purchase Plan.

12.

THE INCENTIVE STOCK PLANS:

In February 2023, our shareholders approved a proposal to amend our 2021 Plan, to increase the total number of available shares by 1,300,000. In February 2022, our shareholders approved a proposal to authorize our 2021 Stock-Based Compensation Plan (“2021 Plan”), which replaced our 2011 Stock-Based Compensation Plan (“2011 Plan”). Our 2021 Plan provides for the grant of stock options, stock appreciation rights, restricted stock, stock units, bonus stock, dividend equivalents, other stock related awards, and performance awards (collectively “awards”), that may be settled in cash, stock, or other property. Our 2021 Plan is designed to attract, motivate, retain, and reward our executives, employees, officers, directors, and independent contractors by providing such persons with annual

and long-term performance incentives to expend their maximum efforts in the creation of shareholder value. The total number of shares of our common stock that may be subject to awards under the 2021 Plan is equal to 2,300,000 shares, plus: (i) any shares available for issuance and not subject to an award under the 2007 Plan or the 2011 Plan, which was 545,729 in aggregate at the time of the approval of the 2021 Plan; (ii) the number of shares with respect to which awards granted under the 2021 Plan, the 2011 Plan or the 2007 Plan terminate without the issuance of the shares or where the shares are forfeited or repurchased; (iii) with respect to awards granted under the 2021 Plan, the 2011 Plan and the 2007 Plan, the number of shares that are not issued as a result of the award being settled for cash or otherwise not issued in connection with the exercise or payment of the award; and (iv) the number of shares that are surrendered or withheld in payment of the exercise price of any award or any tax withholding requirements in connection with any award granted under the 2021 Plan, the 2011 Plan or the 2007 Plan. The 2021 Plan terminates in February 2032, and awards may be granted at any time during the life of the 2021 Plan. The dates on which awards vest are determined by the Board of Directors or the Plan Administrator. The Board of Directors has appointed the Compensation Committee as the Plan Administrator. The exercise prices of options are determined by the Board of Directors or the Plan Administrator and are at least equal to the fair market value of shares of common stock on the date of grant. The term of options under the 2021 Plan may not exceed ten years. The options granted have varying vesting periods. To date, we have not settled or been under any obligation to settle any awards in cash.

The following table summarizes activity from our incentive stock plans from September 30, 2022 through June 30, 2023:


	Shares Available for Grant			Options Outstanding			Aggregate Intrinsic Value (Amounts in thousands)		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life
Balance as of September 30, 2022		1,536,094			62,750		$	893	$	17.62		2.3
Shares authorized		1,300,000			—					—
Options granted		(5,000	)		5,000					31.22		2.0
Options cancelled/forfeited/expired		10,000			(10,000	)				7.48
Options exercised		—			(3,000	)				13.06
Restricted stock awards granted		(839,453	)		—					—
Restricted stock awards forfeited		50,325			—					—
Additional shares of stock issued		(3,608	)		—					—
Balance as of June 30, 2023		2,048,358			54,750		$	746	$	20.96		2.7
Exercisable as of June 30, 2023					49,749		$	740	$	19.35		2.1

During the nine months ended June 30, 2023, 5,000 options were granted. No options were granted for the nine months ended June 30, 2022. The weighted average grant date fair value of options granted during the three and nine months ended June 30, 2023 was $15.53. The total intrinsic value of options exercised during the nine months ended June 30, 2022 and 2023, was $1.1 million and $0.1 million, respectively.

We used the Black-Scholes model to estimate the fair value of options granted. The expected term of options granted is estimated based on historical experience. Volatility is based on the historical volatility of our common stock. The risk-free rate for periods within the contractual term of the options is based on the U.S. Treasury yield curve in effect at the time of grant.

14.

RESTRICTED STOCK AWARDS:

We have granted non-vested (restricted) stock awards (“restricted stock”) and restricted stock units (“RSUs”) to employees, directors, and officers pursuant to the 2021 Plan, the 2011 Plan, and the 2007 Plan. The restricted stock awards and RSUs have varying vesting periods, but generally become fully vested between two and four years after the grant date, depending on the specific award, performance targets met for performance-based awards granted to officers, and vesting period for time-based awards. Officer performance-based awards are granted at the target amount of shares that may be earned and the actual amount of the award earned generally could range from 0% to 175% of the target number of shares based on the actual specified performance target met. We accounted for the restricted stock awards granted using the measurement and recognition provisions of ASC 718. Accordingly, the fair value of the restricted stock awards, including performance-based awards, is measured on the grant date and recognized in earnings over the requisite service period for each separately vesting portion of the award.

The following table summarizes restricted stock award activity from September 30, 2022 through June 30, 2023:


	Shares/ Units			Weighted Average Grant Date Fair Value
Non-vested balance as of September 30, 2022		934,517		$	35.23
Changes during the period:
Awards granted		839,453		$	32.15
Awards vested		(149,764	)	$	30.46
Awards forfeited		(50,325	)	$	31.98
Non-vested balance as of June 30, 2023		1,573,881		$	34.14

As of June 30, 2023, we had approximately $30.0 million of total unrecognized compensation cost, assuming applicable performance conditions are met, related to non-vested restricted stock awards. We expect to recognize that cost over a weighted average period of 2.1 years.

15.

NET INCOME PER SHARE:

The following table presents shares used in the calculation of basic and diluted net income per share:


	Three Months Ended				Nine Months Ended
	June 30,				June 30,
	2022		2023		2022		2023
Weighted average common shares outstanding used in calculating basic net income per share		21,524,315		21,885,400		21,761,811		21,831,350
Effect of dilutive options and non-vested restricted stock awards		648,958		542,043		694,017		489,919
Weighted average common and common equivalent shares used in calculating diluted net income per share		22,173,273		22,427,443		22,455,828		22,321,269

For the three months ended June 30, 2022 and 2023, there were 89,518 and 11,089 weighted average shares of options and non-vested restricted stock outstanding, respectively, that were not included in the computation of diluted net income per share because the options’ exercise prices or non-vested restricted stock prices were greater than the average market price of our common stock, and therefore, their effect would be anti-dilutive. For the nine months ended June 30, 2022 and 2023, there were 71,455 and 12,639 weighted average shares of options and non-vested restricted stock outstanding, respectively, that were not included in the computation of diluted net income per share because the options’ exercise prices or non-vested restricted stock prices were greater than the average market price of our common stock, and therefore, their effect would be anti-dilutive.

16.

COMMITMENTS AND CONTINGENCIES:

We are party to various legal actions arising in the ordinary course of business. While it is not feasible to determine the actual outcome of these actions as of June 30, 2023, we believe that these matters should not have a material adverse effect on our unaudited condensed consolidated financial condition, results of operations, or cash flows.

17.

SEGMENT INFORMATION:

Change in Reportable Segments

Effective May 2, 2021, our operating segments changed as a result of the Company’s acquisition of Cruisers Yachts, which changed management’s reporting structure and operating activities. We report our operations through two operating segments, which are also reporting segments: Retail Operations and Product Manufacturing.

Reportable Segments

The Company’s operating segments are defined by management’s reporting structure and operating activities. Our chief operating decision maker (“CODM”) is our Chief Executive Officer. Our CODM reviews operational income statement information by segment for purposes of making operating decisions, assessing financial performance, and allocating resources. The CODM is not provided asset information by segment. The Company’s reportable segments are the following:

Retail Operations. The Retail Operations segment includes the sale of new and used recreational boats, including pleasure and fishing boats, with a focus on premium brands in each segment. We also sell related marine products, including engines, trailers, parts, and accessories. In addition, we provide repair, maintenance, and slip and storage services; we arrange related boat financing, insurance, and extended service contracts; we offer boat and yacht brokerage sales; and we offer yacht charter services. In the British Virgin Islands we offer the charter of catamarans, through MarineMax Vacations. Fraser Yachts Group and Northrop & Johnson, leading superyacht brokerage and luxury yacht services companies with operations in multiple countries, are also included in this segment. We also maintain a network of strategically positioned luxury marinas situated in yachting and sport fishing destinations around the word through IGY Marinas. The Retail Operations segment includes the majority of all corporate costs.

Product Manufacturing. The Product Manufacturing segment includes activity of Cruisers Yachts and Intrepid. Cruisers Yachts, a wholly-owned MarineMax subsidiary, manufacturing sport yacht and yachts with sales through our select retail dealership locations and through independent dealers. Cruisers Yachts is recognized as one of the world’s premier manufacturers of premium sport yacht and yachts, producing models from 33’ to 60’ feet. Intrepid, also a wholly-owned MarineMax subsidiary, is recognized as a world class producer of customized boats, carefully reflecting the unique desires of each individual owner. Intrepid follows a direct-to-consumer distribution model and has received many awards and accolades for its innovations and high-quality craftsmanship that create industry leading products in their categories.

Intersegment revenue represents yachts that were manufactured in our Product Manufacturing segment and were sold to our Retail Operations segment. The Product Manufacturing segment supplies our Retail Operations segment along with various independent dealers.

The following table sets forth revenue and income from operations for each of the Company’s reportable segments:


	Three Months Ended						Nine Months Ended
	June 30,						June 30,
	2022			2023			2022			2023
	(Amounts in thousands)						(Amounts in thousands)
Revenue:
Retail Operations	$	657,930		$	687,168		$	1,690,172		$	1,707,049
Product Manufacturing		48,802			51,884			129,804			164,959
Elimination of intersegment revenue		(18,195	)		(17,208	)		(48,642	)		(71,897	)
Revenue	$	688,537		$	721,844		$	1,771,334		$	1,800,111
Income from operations:
Retail Operations	$	90,655		$	68,050		$	204,124		$	158,514
Product Manufacturing		5,903			5,089			13,733			17,834
Intersegment adjustments		(1,258	)		1,442			(3,572	)		(9,862	)
Income from operations	$	95,300		$	74,581		$	214,285		$	166,486

18. SUBSEQUENT EVENT:

Amended Credit Facility

On July 12, 2023, the Company executed the Amended Credit Facility to amend its existing Credit Facility to expand its floor plan facility from $750 million to $950 million as provided by the accordion feature of the New Credit Agreement. The Amended Credit Facility will be used to finance the purchase of new and used boat and yacht inventory. Other than the increased capacity of the floor plan facility, all other terms of the Company’s senior secured credit facilities remain unchanged, including the maturity date of August 2027.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This Management’s Discussion and Analysis of Financial Condition and Results of Operations contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include statements regarding our “expectations,” “anticipations,” “intentions,” “plans,” “beliefs,” or “strategies” regarding the future. These forward-looking statements include statements relating to market risks such as interest rate risk and foreign currency exchange rate risk; economic and industry conditions and corresponding effects on consumer behavior and operating results; environmental conditions; inclement weather; certain specific and isolated events; our future estimates, assumptions and judgments, including statements regarding whether such estimates, assumptions and judgments could have a material adverse effect on our operating results; the impact of changes in accounting policy and standards; our plans to accelerate our growth through acquisitions and new store openings; our belief that our existing capital resources will be sufficient to finance our operations for at least the next 12 months, except for possible significant acquisitions; the seasonality and cyclicality of our business and the effect of such seasonality and cyclicality on our business, financial results and inventory levels; and the Company’s ability to manage growth effectively. Actual results could differ materially from those currently anticipated as a result of a number of factors, including those set forth under “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended September 30, 2022.

We believe we are the largest recreational boat and yacht retailer and superyacht services company in the world. Through our current 78 retail locations in 21 states, we sell new and used recreational boats and related marine products, including engines, trailers, parts, and accessories. We also arrange related boat financing, insurance, and extended service contracts; provide boat repair and maintenance services; offer yacht and boat brokerage sales; and, where available, offer slip and storage accommodations. In the British Virgin Islands we offer the charter of catamarans, through MarineMax Vacations. We also own Fraser Yachts Group, a leading superyacht brokerage and luxury yacht services company with operations in multiple countries, Northrop & Johnson, another leading superyacht brokerage and services company with operations in multiple countries, SkipperBud’s, one of the largest boat sales, brokerage, service and marina/storage groups in the United States, and Cruisers Yachts, a manufacturer of sport yacht and yachts with sales through our select retail dealership locations and through independent dealers. In November 2021, we acquired Intrepid Powerboats, a

manufacturer of powerboats, and Texas MasterCraft, a watersports dealer in Northern Texas. In April 2022, through Northrop & Johnson, we acquired Superyacht Management, S.A.R.L., better known as SYM, a superyacht management company based in Golfe-Juan, France. In August 2022, we expanded our presence in Texas by acquiring Endeavour Marina in Seabrook. In October 2022, we completed the acquisition of IGY Marinas. In December 2022, we acquired 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 recently formed technology entity, New Wave Innovations. In June 2023, we acquired C&C Boat Works, a full-service boat dealer in Crosslake, Minnesota.

MarineMax was incorporated in January 1998. We commenced operations with the acquisition of five independent recreational boat dealers on March 1, 1998. Since the initial acquisitions in March 1998, we have acquired 33 recreational boat dealers, five boat brokerage operations, two full-service yacht repair operations, and two boat and yacht manufacturers. As a part of our acquisition strategy, we frequently engage in discussions with various recreational boat dealers regarding their potential acquisition by us. Potential acquisition discussions frequently take place over a long period of time and involve difficult business integration and other issues, including, in some cases, management succession and related matters. As a result of these and other factors, a number of potential acquisitions that from time to time appear likely to occur do not result in binding legal agreements and are not consummated. We completed four acquisitions in the fiscal year ending September 30, 2022, and four acquisitions to date in fiscal 2023.

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 54%, 50%, and 51% of our dealership revenue during fiscal 2020, 2021, and 2022, 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 levels, even if prevailing economic conditions are favorable. Additionally, the Federal Reserve’s increases of its benchmark interest rate, along with potential future increases and/or market expectations of such increases, have resulted in, and may further result in significantly higher long-term interest rates and a downturn in the overall economy, each of which may negatively impact our customers’ willingness or desire to purchase our products. As a result, an economic downturn or inflation could 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, low consumer confidence or inflation 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.

Although past economic conditions have adversely affected our operating results, we believe during and after such conditions we have capitalized on our core strengths to substantially outperform the industry, resulting in market share gains. Our ability to capture such market share supports the alignment of our retailing strategies with the desires of consumers. We believe the steps we have taken to address weak market conditions in the past have yielded, and we believe are likely to yield in the future, an increase in revenue. 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 explore opportunities through this strategy. We expect our core strengths and retailing strategies including our digital platform, will position us to capitalize on growth opportunities as they occur and will allow us to emerge with greater earnings potential.

Effective May 2, 2021, our reportable segments changed as a result of the Company’s acquisition of Cruisers Yachts, which changed management’s reporting structure and operating activities. We report our operations through two reportable segments: Retail Operations and Product Manufacturing. See Note 17 of the Notes to Unaudited Condensed Consolidated Financial Statements.

As of June 30, 2023, the Retail Operations segment includes the activity of 78 retail locations in Alabama, California, Connecticut, Florida, Georgia, Illinois, Maryland, Massachusetts, Michigan, Minnesota, Missouri, New Jersey, New York, North Carolina, Ohio, Oklahoma, Rhode Island, South Carolina, Texas, Washington and Wisconsin, where we sell new and used recreational boats, including pleasure and fishing boats, with a focus on premium brands in each segment. We also sell related marine products, including engines, trailers, parts, and accessories. In addition, we provide repair, maintenance, and slip and storage services; we arrange related boat financing, insurance, and extended service contracts; and we offer boat and yacht brokerage sales, and yacht charter services. In the British Virgin Islands, we offer the charter of catamarans, through MarineMax Vacations. Fraser Yachts Group and Northrop & Johnson, leading superyacht brokerage and luxury yacht services companies with operations in multiple countries, are also included in this

segment. We also maintain a network of luxury marinas situated in yachting and sport fishing destinations around the word through IGY Marinas.

As of June 30, 2023, the Product Manufacturing segment includes activity of Cruisers Yachts and Intrepid Powerboats. Cruisers Yachts, a wholly-owned MarineMax subsidiary, manufacturing sport yacht and yachts with sales through our select retail dealership locations and through independent dealers. Cruisers Yachts is recognized as one of the world’s premier manufacturers of premium sport yacht and yachts, producing models from 33’ to 60’ feet. Intrepid Powerboats, also a wholly-owned MarineMax subsidiary, is a producer of customized boats. Intrepid Powerboats follows a direct-to-consumer distribution model and has received many awards and accolades for its innovations and high-quality craftsmanship that create industry leading products in their categories.

See Part II, Item 7, “Application of Critical Accounting Policies” in our Annual Report on Form 10-K for the fiscal year ended September 30, 2022 There have been no material changes to our critical accounting policies since our Annual Report on Form 10-K for the fiscal year ended September 30, 2022.

See Note 3 of the Notes to Unaudited Condensed Consolidated Financial Statements.

The following discussion compares the three and nine months ended June 30, 2023, with the three and nine months ended June 30, 2022 and should be read in conjunction with the Unaudited Condensed Consolidated Financial Statements, including the related notes thereto, appearing elsewhere in this report.

Revenue. Revenue increased $33.3 million, or 4.8%, to $721.8 million for the three months ended June 30, 2023, from $688.5 million for three months ended June 30, 2022. The increase is due to a $2.9 million or 0.4% increase in comparable-store sales, in addition to a $30.4 million increase from acquired operations, primarily IGY Marinas, that are not eligible for inclusion in the comparable-store base as well as Intrepid & Cruisers manufacturing revenue which are not included in comparable retail store sales. The comparable-store increase came primarily from increases in new boat revenue, used boat revenue, marina revenue, service revenue, and super yachts group revenue due to improved retail conditions in the quarter.

Gross Profit. Gross profit increased $7.3 million, or 3.1%, to $243.8 million for the three months ended June 30, 2023, from $236.5 million for the three months ended June 30, 2022. Gross profit as a percentage of revenue decreased to 33.8% for the three months ended June 30, 2023, from 34.3% for the three months ended June 30, 2022. The decrease in gross profit as a percentage of revenue was primarily the result of lower new and used boat margins, partially offset by the acquisition of IGY Marinas, a higher margin business.

Selling, General, and Administrative Expenses. Selling, general, and administrative expenses increased $28.0 million, or 19.8% to $169.2 million for the three months ended June 30, 2023, from $141.2 million for the three months ended June 30, 2022. The increase in selling, general, and administrative expenses was primarily the result of the acquisition of IGY Marinas.

Interest Expense. Interest expense increased $13.8 million to $14.8 million for the three months ended June 30, 2023, from $1.0 million for the three months ended June 30, 2022. The increase in interest expense was primarily the result of increased interest rates, increased inventory and increases in long-term debt related to the IGY Marinas acquisition, and increased borrowings from increased inventory.

Income Taxes. Income tax expense decreased $8.6 million, or 35.7%, to $15.5 million for the three months ended June 30, 2023, from $24.1 million for the three months ended June 30, 2022. The effective income tax rate for the three months ended June 30, 2022 and 2023 was 25.6% and 25.9%, respectively. The increase in the effective income tax rate was primarily as a result of reduced taxable income which increases the impact of permanent tax differences, as well as IGY Marinas’ foreign operations acquired and increases in state tax rates.

Revenue. Revenue increased $29.0 million, or 1.6%, to $1.800 billion for the nine months ended June 30, 2023, from $1.771 billion for nine months ended June 30, 2022. The increase is due to a $107.8 million increase from acquisitions that are not eligible for inclusion in the comparable-store base, as well as changes in revenue for Intrepid & Cruisers manufacturing revenue which are not

included in comparable retail store sales, partially offset by a $78.8 million or 4.7% decrease in comparable-store sales. The comparable-store decrease was primarily driven by decreases in new boat revenue, used boat revenue, brokerage revenue, and super yachts group revenue, due to softer demand through the first six months of the fiscal year, more seasonal sales trends, and macroeconomic uncertainty.

Gross Profit. Gross profit increased $22.6 million, or 3.7%, to $631.6 million for the nine months ended June 30, 2023, from $609.0 million for the nine months ended June 30, 2022. Gross profit as a percentage of revenue increased to 35.1% for the nine months ended June 30, 2023, from 34.4% for the nine months ended June 30, 2022. The increase in gross profit as a percentage of revenue was primarily the result of the acquisition of IGY Marinas, a higher margin business.

Selling, General, and Administrative Expenses. Selling, general, and administrative expenses increased $70.4 million, or 17.8% to $465.1 million for the nine months ended June 30, 2023, from $394.7 million for the nine months ended June 30, 2022. The increase in selling, general, and administrative expenses was primarily the result of the acquisition of IGY Marinas.

Interest Expense. Interest expense increased $35.3 million to $37.6 million for the nine months ended June 30, 2023, from $2.3 million for the nine months ended June 30, 2022. The increase in interest expense was primarily the result of increased interest rates, increases in long-term debt related to the IGY Marinas acquisition, and increased borrowings from increased inventory.

Income Taxes. Income tax expense decreased $17.7 million, or 33.8%, to $34.7 million for the nine months ended June 30, 2023, from $52.4 million for the nine months ended June 30, 2022. The effective income tax rate for the nine months ended June 30, 2022 and 2023 was 24.7% and 26.9%, respectively. The increase in the effective income tax rate was primarily as a result of reduced taxable income which increases the impact of permanent tax differences, as well as IGY Marinas’ foreign operations acquired and increases in state tax rates.

Our cash needs are primarily for working capital to support operations, including new and used boat and related parts inventories, off-season liquidity, and growth through acquisitions. Acquisitions remain an important strategy for us, and we plan to continue our growth through this strategy in appropriate circumstances. We cannot predict the length of economic or financial conditions. We regularly monitor the aging of our inventories and current market trends (including supply chain issues) to evaluate our current and future inventory needs. We also use this evaluation in conjunction with our review of our current and expected operating performance and expected business levels to determine the extent of our financing needs.

These cash needs historically have been financed with cash generated from operations and borrowings under the New Credit Agreement (described below). Our ability to utilize the New Credit Agreement to fund operations depends upon the collateral levels and compliance with the covenants of the New Credit Agreement. Any turmoil in the credit markets and weakness in the retail markets may interfere with our ability to remain in compliance with the covenants of the New Credit Agreement and therefore our ability to utilize the New Credit Agreement to fund operations. As of June 30, 2023, we were in compliance with all covenants under the New Credit Agreement. We currently depend upon dividends and other payments from our locations and the New Credit Agreement to fund our current operations and meet our cash needs. As the majority owner of each of our locations, we determine the amounts of such distributions subject to applicable law, and currently, no agreements exist that restrict this flow of funds from our locations.

For the nine months ended June 30, 2023, cash used in operating activities was approximately $196.9 million. For the nine months ended June 30, 2022, cash provided by operating activities was approximately $123.0 million. For the nine months ended June 30, 2023, cash used in operating activities was primarily related to increases in inventory, increases in accounts receivable, partially offset by decreases in customer deposits increases in accrued expenses, and our net income adjusted for non-cash expenses and gains such as depreciation and amortization expense, deferred income tax provision, stock-based compensation expense, and gain on acquisition of previously held equity investment. For the nine months ended June 30, 2022, cash provided by operating activities was primarily related to increases in contract liabilities (customer deposits), increases in accrued expenses and other liabilities, increases in accounts payable, and our net income adjusted for non-cash expenses such as depreciation and amortization expense and stock-based compensation expense, partially offset by increases in inventory (excluding acquired operations) and increases in accounts receivable.

For the nine months ended June 30, 2023 and 2022, cash used in investing activities was approximately $564.1. million and $113.2 million, respectively. For the nine months ended June 30, 2023, cash used in investing activities was primarily used for the acquisition of IGY Marinas, and to purchase investments, purchase property and equipment associated with improving existing retail facilities, partially offset by proceeds from insurance settlements and proceeds from investments. For the nine months ended June 30, 2022, cash used in investing activities was primarily used for acquisitions, to purchase property and equipment associated with improving existing retail facilities, to purchase property and equipment from locations formerly leased, and to purchase investments, partially offset by proceeds from investments.

For the nine months ended June 30, 2023 and 2022, cash provided by financing activities was approximately $756.8 million and $50.9 million, respectively. For the nine months ended June 30, 2023, cash provided by financing activities was primarily attributable to proceeds from long term debt, net increases in short-term borrowings, which solely consisted of the Floor Plan, and net proceeds from

issuance of common stock under incentive compensation and employee purchase plans, partially offset by payments on long-term debt, contingent acquisition consideration payments and payments on tax withholdings for equity awards. For the nine months ended June 30, 2022, cash provided by financing activities was primarily attributable to net increases in short-term borrowings, which solely consisted of the Floor Plan, and net proceeds from issuance of common stock under incentive compensation and employee purchase plans, partially offset by purchase of treasury stock, payments on tax withholdings for equity awards, and contingent acquisition consideration payments.

In August 2022, we entered into a Credit Agreement with Manufacturers and Traders Trust Company as Administrative Agent, Swingline Lender, and Issuing Bank, Wells Fargo Commercial Distribution Finance, LLC, as Floor Plan Agent, and the lenders party thereto (the “New Credit Agreement”). The New Credit Agreement provides the Company a line of credit with asset based borrowing availability (Floor Plan) of up to $750 million and establishes a revolving credit facility in the maximum amount of $100 million (including a $20 million swingline facility and a $20 million letter of credit sublimit), a delayed draw term loan facility to finance the acquisition of IGY Marinas in the maximum amount of $400 million, and a $100 million delayed draw mortgage loan facility. The maturity of each of the facilities is August 2027.

The interest rate is (a) for amounts outstanding under the ~~Amended Credit Facility is 345 basis points~~Floor Plan, 3.45% above the ~~one-month London Inter-Bank Offering Rate~~one month secured term rate as administered by the CME Group Benchmark Administration Limited (CBA) (“~~LIBOR”~~SOFR”)~~. There is an unused line fee~~, (b) for amounts outstanding under the revolving credit facility or the term loan facility, a range of ~~ten basis points~~1.50% to 2.0%, depending on the ~~unused portion of~~total net leverage ratio, above the ~~Amended Credit Facility.~~one month, three month, or six month term SOFR rate, and (c) for amounts outstanding under the mortgage loan facility, 2.20% above the one month, three month, or six month term SOFR rate. The alternate base rate with a margin is available for amounts outstanding under the revolving credit, term, and mortgage loan facilities and the Euro Interbank Offered Rate plus a margin is available for borrowings in Euro or other currencies other than dollars under the revolving credit facility.

Advances under the ~~Amended~~New Credit ~~Facility~~Agreement are initiated by the acquisition of eligible new and used inventory or are re-advances against eligible new and used inventory that have been partially paid-off. Advances on new inventory will generally mature 1,080 days from the original invoice date. Advances on used inventory will mature 361 days from the date we acquire the used inventory. Each advance is subject to a curtailment schedule, which requires that we pay down the balance of each advance on a periodic basis starting after six months. The curtailment schedule varies based on the type and value of the inventory. The collateral for the ~~Amended~~New Credit ~~Facility~~Agreement is ~~all of our personal property with certain limited exceptions.~~primarily the Company’s inventory that is financed through the New Credit Agreement and related accounts receivable. None of our real estate has been pledged for collateral for the ~~Amended~~New Credit ~~Facility.~~Agreement.

As of ~~December 31, 2017,~~June 30, 2023, our indebtedness associated with ~~financing~~ our ~~inventory~~short-term borrowings, which solely consisted of the Floor Plan, and ~~working capital needs~~our long-term debt totaled approximately ~~$307.7 million.~~ $515.6 million and $433.3 million, respectively. As of ~~December 31, 2016~~June 30, 2023, short-term borrowings, which solely consisted of the Floor Plan, and ~~2017, the interest rate~~long-term debt recorded on the ~~outstanding~~Unaudited Condensed Consolidated Balance Sheets included unamortized debt issuance costs of approximately $1.6 million and $1.7 million, respectively. Refer to Note 10 of the Notes to Unaudited Condensed Consolidated Financial Statements for disclosure of borrowing availability, interest rates, and terms of our short-term borrowings ~~was approximately 4.0% and 4.7%, respectively.~~ ~~As of December 31, 2017, our additional available borrowings under our Amended Credit Facility were approximately $17.0 million based upon the outstanding borrowing base availability.~~

The availability and costs of borrowed funds can adversely affect our ability to obtain adequate boat inventory and the holding costs of that inventory as well as the ability and willingness of our customers to finance boat purchases. As of December 31, 2017, we had no long-term debt. However, we rely on our Amended Credit Facility to purchase our inventory of boats. The aging of our inventory limits our borrowing capacity as defined curtailments reduce the allowable advance rate as our inventory ages. Our access to funds under our Amended Credit Facility also depends upon the ability of our lenders to meet their funding commitments, particularly if they experience shortages of capital or experience excessive volumes of borrowing requests from others during a short period of time. Unfavorable economic conditions, weak consumer spending, turmoil in the credit markets, and lender difficulties, among other potential reasons, could interfere with our ability to utilize our Amended Credit Facility to fund our operations. Any inability to utilize our Amended Credit Facility could require us to seek other sources of funding to repay amounts outstanding under the credit agreements or replace or supplement our credit agreements, which may not be possible at all or under commercially reasonable terms.

During the three months December 31, 2016 and 2017, we recognized stock-based compensation expense of approximately $2.1 million and $1.5 million, respectively, in selling, general, and administrative expenses in the unaudited condensed consolidated statements of operations.

Cash received from option exercises under all share-based compensation arrangements and the employee stock purchase plan for the three months ended December 31, 2016 and 2017, was approximately $785,000 and $2.4 million, respectively. We currently expect to satisfy share-based awards with registered shares available to be issued.

During February 2017, our shareholders approved a proposal to amend the 2011 Stock-Based Compensation Plan (“2011 Plan”) to increase the 2,200,456 share threshold by 1,000,000 shares to 3,200,456 shares. During January 2011, our shareholders approved a proposal to authorize our 2011 Plan, which replaced our 2007 Incentive Compensation Plan (“2007 Plan”). Our 2011 Plan provides for the grant of stock options, stock appreciation rights, restricted stock, stock units, bonus stock, dividend equivalents, other stock related awards, and performance awards (collectively “awards”), that may be settled in cash, stock, or other property. Our 2011 Plan is designed to attract, motivate, retain, and reward our executives, employees, officers, directors, and independent contractors by providing such persons with annual(Floor Plan) and long-term ~~performance incentives to expend their maximum efforts~~debt.

Except as specified in the creation of shareholder value. Subsequent to the February 2017 amendment described above, the total number of shares of our common stock that may be subject to awards under the 2011 Plan is equal to 3,000,000 shares, plus: (i) any shares available for issuance and not subject to an award under the 2007 Plan, which was 200,456 shares at the time of approval of the 2011 Plan; (ii) the number of shares with respect to which awards granted under the 2011 Plan and the 2007 Plan terminate without the issuance of the shares or where the shares are forfeited or repurchased; (iii) with respect to awards granted under the 2011 Plan and the 2007 Plan, the number of shares

that are not issued as a result of the award being settled for cash or otherwise not issued in connection with the exercise or payment of the award; and (iv) the number of shares that are surrendered or withheld in payment of the exercise price of any award or any tax withholding requirements in connection with any award granted under the 2011 Plan or the 2007 Plan. The 2011 Plan terminates in January 2021, and awards may be granted at any time during the life of the 2011 Plan. ~~The dates on which awards vest are determined by the Board of Directors or the Plan Administrator.~~ The Board of Directors has appointed the Compensation Committee as the Plan Administrator. The exercise prices of options are determined by the Board of Directors or the Plan Administrator and are at least equal to the fair market value of shares of common stock on the date of grant. ~~The term of options under the 2011 Plan may not exceed ten years.~~ ~~The options granted have varying vesting periods.~~ ~~To date, we have not settled or been under any obligation to settle any awards in cash.~~

~~The following table summarizes activity from our incentive stock plans from September 30, 2017 through December 31, 2017:~~

Shares
Available
for Grant

Options Outstanding

Aggregate
Intrinsic Value
(in thousands)

Weighted
Average
Exercise
Price

Weighted
Average
Remaining Contractual
Life

Balance as of September 30, 2017

1,386,561

1,207,504

$
5,737

$
11.81

5.3

Options authorized

-

-

-

-

Options granted

-

-

-

-

Options cancelled/forfeited/expired

7,250

(7,250
)

-

15.73

Options exercised

-

(181,696
)

-

10.55

Restricted stock awards issued

(341,517
)

-

-

-

Restricted stock awards forfeited

16,189

-

-

-

Additional shares of stock issued

(2,689
)

-

-

-

Balance as of December 31, 2017

1,065,794

1,018,558

$
7,022

$
12.01

5.1

Exercisable as of December 31, 2017

1,006,891

$
6,987

$
11.96

5.1

No options were granted for the three months ended December 31, 2016 and 2017. The total intrinsic value of options exercised during the three months ended December 31, 2016 and 2017 was $330,000 and $1.9 million, respectively.

As of December 31, 2016 and 2017, there was approximately $472,000 and $4,000, respectively, of unrecognized compensation costs related to non-vested options that are expected to be recognized over a weighted average period of 0.8 years and 0.5 years, respectively. The total fair value of options vested during the three months ended December 31, 2016 and 2017 was approximately $2.5 million and $1.3 million, respectively.

We used the Black-Scholes model to estimate the fair value of options granted. The expected term of options granted is derived from the output of the option pricing model and represents the period of time that options granted are expected to be outstanding. Volatility is based on the historical volatility of our common stock. The risk-free rate for periods within the contractual term of the options is based on the U.S. Treasury yield curve in effect at the time of grant.

During February 2012, our shareholders approved a proposal to amend our 2008 Employee Stock Purchase Plan (“Stock Purchase Plan”) to increase the number of shares available under that plan by 500,000 shares. The Stock Purchase Plan as amended provides for up to 1,000,000 shares of common stock to be available for purchase by our regular employees who have completed at least one year of continuous service. In addition, there were 52,837 shares of common stock available under our 1998 Employee Stock Purchase Plan, which have been made available for issuance under our Stock Purchase Plan. The Stock Purchase Plan provides for implementation of up to 10 annual offerings beginning on the first day of October starting in 2008, with each offering terminating on September 30 of the following year. Each annual offering may be divided into two six-month offerings. For each offering, the purchase price per share will be the lower of: (i) 85% of the closing price of the common stock on the first day of the offering or (ii) 85% of the closing price of the common stock on the last day of the offering. The purchase price is paid through periodic payroll deductions not to exceed 10% of the participant’s earnings during each offering period. However, no participant may purchase more than $25,000 worth of common stock annually.

We used the Black-Scholes model to estimate the fair value of options granted to purchase shares issued pursuant to the Stock Purchase Plan. The expected term of options granted is derived from the output of the option pricing model and represents the period

of time that options granted are expected to be outstanding. Volatility is based on the historical volatility of our common stock. The risk-free rate for periods within the contractual term of the options is based on the U.S. Treasury yield curve in effect at the time of grant.

~~The following are the weighted average assumptions used for each respective period:~~

~~As of December 31, 2017, we had issued 824,170 shares of common stock under our Stock Purchase Plan.~~

We have granted non-vested (restricted) stock awards (“restricted stock”) and restricted stock units (“RSUs”) to employees and officers pursuant to the 2011 Plan and the 2007 Plan. The restricted stock awards and RSUs have varying vesting periods, but generally become fully vested between two and four years after the grant date, depending on the specific award, performance targets met for performance based awards granted to officers, and vesting period for time based awards. Officer performance based awards are granted at the target amount of shares that may be earned and the actual amount of the award earned generally could range from 0% to 200% of the target number of shares based on the actual specified performance target met. We accounted for the restricted stock awards granted using the measurement and recognition provisions of ASC 718. Accordingly, the fair value of the restricted stock awards, including performance based awards, is measured on the grant date and recognized in earnings over the requisite service period for each separately vesting portion of the award.

~~The following table summarizes restricted stock award activity from September 30, 2017 through December 31, 2017:~~

As of December 31, 2017, we had approximately $12.2 million of total unrecognized compensation cost, assuming applicable performance conditions are met, related to non-vested restricted stock awards. We expect to recognize that cost over a weighted average period of 2.5 years.

~~The following is a reconciliation of the shares used in the denominator for calculating basic and diluted net income per share:~~

For the three months ended December 31, 2016 and 2017, there were 52,435 and 116,844 weighted average shares related to options outstanding and non-vested restricted stock awards, respectively, that were not included in the computation of diluted income per share because the options’ exercise prices or assumed proceeds per share were greater than the average market price of our common stock, and therefore, would have an anti-dilutive effect.

We are party to various legal actions arising in the ordinary course of business. While it is not feasible to determine the actual outcome of these actions as of December 31, 2017, we believe that these matters should not have a material adverse effect on our unaudited condensed consolidated financial condition, results of operations, or cash flows.

~~ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF~~ ~~FINANCIAL CONDITION AND RESULTS OF OPERATIONS~~

~~This Management’s~~this “Management’s Discussion and Analysis of Financial Condition and Results of Operations contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include statements regarding our “expectations,” “anticipations,” “intentions,” “beliefs,” or “strategies” regarding the future. These forward-looking statements include statements relating to market risks such as interest rate risk and foreign currency exchange rate risk; economic and industry conditions and corresponding effects on consumer behavior and operating results; environmental conditions; inclement weather; certain specific and isolated events; our future estimates, assumptions and judgments, including statements regarding whether such estimates, assumptions and judgments would have a material adverse effect on our operating results; the impact of changes in accounting policy and standards; our plans to accelerate our growth through acquisitions and new store openings; our belief that our existing capital resources will be sufficient to finance our operations for at least the next 12 months, except for possible significant acquisitions; and the seasonality and cyclicality of our business and the effect of such seasonality and cyclicality on our business, financial results and inventory levels. Actual results could differ materially from those currently anticipated as a result of a number of factors, including those set forth under “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended September 30, 2017.

We are the largest recreational boat and yacht retailer in the United States with fiscal 2017 revenue in excess of $1 billion. Through our current 62 retail locations in 16 states (as of the filing of this Quarterly Report on 10-Q), we sell new and used recreational boats and related marine products, including engines, trailers, parts, and accessories. We also arrange related boat financing, insurance, and extended service contracts; provide boat repair and maintenance services; offer yacht and boat brokerage sales; and, where available, offer slip and storage accommodations, as well as the charter of power and sailing yachts in the British Virgin Islands.

MarineMax was incorporated in January 1998 (and reincorporated in Florida in March 2015). We commenced operations with the acquisition of five independent recreational boat dealers on March 1, 1998. Since the initial acquisitions in March 1998, we have, as of the filing of this Quarterly Report on 10-Q, acquired 27 recreational boat dealers, two boat brokerage operations, and two full-service yacht repair facilities. As a part of our acquisition strategy, we frequently engage in discussions with various recreational boat dealers regarding their potential acquisition by us. Potential acquisition discussions frequently take place over a long period of time and involve difficult business integration and other issues, including, in some cases, management succession and related matters. As a result of these and other factors, a number of potential acquisitions that from time to time appear likely to occur do not result in binding legal agreements and are not consummated. We completed three in the fiscal year ended September 30, 2016, one acquisition in the fiscal year ended September 30, 2017, and one acquisition to date in fiscal 2018.

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 53%, 55%, and 55% of our revenue during fiscal 2015, 2016, and 2017, respectively, can have a major impact on our operations. Local influences, such as corporate downsizing, military base closings, and inclement weather such as hurricanes and other storms, 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.

Lower consumer spending resulting from a downturn in the housing market and other economic factors adversely affected our business in fiscal 2007, and continued weakness in consumer spending and depressed economic conditions had a substantial negative effect on our business and industry for several years after fiscal 2007. These conditions caused us to substantially reduce our acquisition program, delay new store openings, reduce our inventory purchases, engage in inventory reduction efforts, close a number of our retail locations, reduce our headcount, and amend and replace our credit facility. Acquisitions and new store openings remain important strategies to our company, and we plan to accelerate our growth through these strategies as economic conditions continue to

~~improve.~~ However, we cannot predict the length of unfavorable economic or industry conditions or the extent to which they will continue to adversely affect our operating results nor can we predict the effectiveness of the measures we have taken to address this environment.

Although economic conditions have adversely affected our operating results, we believe we have capitalized on our core strengths to substantially outperform the industry, resulting in market share gains. Our ability to capture such market share supports the alignment of our retailing strategies with the desires of consumers. We believe the steps we have taken to address weak market conditions have yielded, and will yield in the future, an increase in revenue. If general economic trends continue to improve, we expect our core strengths and retailing strategies will position us to capitalize on growth opportunities as they occur and will allow us to emerge from the current economic environment with greater earnings potential.

We have identified the policies below as critical to our business operations and the understanding of our results of operations. The impact and risks related to these policies on our business operations are discussed throughout Management's Discussion and Analysis of Financial Condition and Results of Operations when such policies affect our reported and expected financial results.

In the ordinary course of business, we make a number of estimates and assumptions relating to the reporting of results of operations and financial condition in the preparation of our financial statements in conformity with accounting principles generally accepted in the United States. We base our estimates on historical experiences and on various other assumptions (including future earnings) that we believe are reasonable under the circumstances. The results of these assumptions form the basis for making judgments about the carrying values of assets and liabilities, including contingent assets and liabilities such as contingent consideration liabilities from acquisitions, which are not readily apparent from other sources. Actual results could differ significantly from those estimates under different assumptions and conditions. We believe that the following discussion addresses our most critical accounting policies, which are those that are most important to the portrayal of our financial condition and results of operations and require our most difficult, subjective, and complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain.

We recognize revenue from boat, motor, and trailer sales and parts and service operations at the time the boat, motor, trailer, or part is delivered to or accepted by the customer or the service is completed. We recognize deferred revenue from service operations and slip and storage services on a straight-line basis over the term of the contract as services are completed. We recognize commissions earned from a brokerage sale at the time the related brokerage transaction closes. We recognize income from the rentals of chartering power and sailing yachts on a straight-line basis over the term of the contract as services are completed. We recognize commissions earned by us for placing notes with financial institutions in connection with customer boat financing when we recognize the related boat sales. We recognize marketing fees earned on credit, life, accident, disability, gap, and hull insurance products sold by third-party insurance companies at the later of customer acceptance of the insurance product as evidenced by contract execution or when the related boat sale is recognized. We recognize income from the rentals of chartering power and sailing yachts on a straight-line basis over the term of the contract or when service is completed. We also recognize commissions earned on extended warranty service contracts sold on behalf of third-party insurance companies at the later of customer acceptance of the service contract terms as evidenced by contract execution or recognition of the related boat sale.

Certain finance and extended warranty commissions and marketing fees on insurance products may be charged back if a customer terminates or defaults on the underlying contract within a specified period of time. Based upon our experience of terminations and defaults, we maintain a chargeback allowance that was not material to our financial statements taken as a whole as of December 31, 2017. Should results differ materially from our historical experiences, we would need to modify our estimate of future chargebacks, which could have a material adverse effect on our operating margins. We do not believe there is a reasonable likelihood that there will be a change in the future estimates or assumptions we use to calculate our estimate of future chargebacks which would result in a material effect on our operating results.

We account for consideration received from our vendors in accordance with FASB Accounting Standards Codification 605-50, “Revenue Recognition - Customer Payments and Incentives” (“ASC 605-50”). ASC 605-50 requires us to classify interest assistance received from manufacturers as a reduction of inventory cost and related cost of sales as opposed to netting the assistance against our interest expense incurred with our lenders. Pursuant to ASC 605-50, amounts received by us under our co-op assistance programs from our manufacturers are netted against related advertising expenses. Our consideration received from our vendors contains uncertainties because the calculation requires management to make assumptions and to apply judgment regarding a number of factors,

including our ability to collect amounts due from vendors and the ability to meet certain criteria stipulated by our vendors. We do not believe there is a reasonable likelihood that there will be a change in the future estimates or assumptions we use to calculate our vendor considerations which would result in a material effect on our operating results.

Inventory costs consist of the amount paid to acquire inventory, net of vendor consideration and purchase discounts, the cost of equipment added, reconditioning costs, and transportation costs relating to acquiring inventory for sale. We state new and used boat, motor, and trailer inventories at the lower of cost, determined on a specific-identification basis, or net realizable value. We state parts and accessories at the lower of cost, determined on an average cost basis, or net realizable value. We utilize our historical experience, the aging of the inventories, and our consideration of current market trends as the basis for determining a lower of cost or net realizable value valuation allowance. Our lower of cost or net realizable value valuation allowance contains uncertainties because the calculation requires management to make assumptions and to apply judgment regarding the amount at which the inventory will ultimately be sold which considers forecasted market trends, model changes, and new product introductions. With the exception of inventory of $7.6 million in the British Virgin Islands damaged as a result of Hurricane Irma as of September 30, 2017, we do not believe there is a reasonable likelihood that there will be a change in the future estimates or assumptions we use to calculate our lower of cost or net realizable value valuation allowance which would result in a material effect on our operating results. With respect to the inventory in the British Virgin Islands, given the damage from Hurricane Irma, we have estimated the net realizable value of the inventory as of December 31, 2017, however, we cannot be certain we have quantified the complete negative effects of the damage sustained, nor can we be certain that further damage will not be incurred upon the passage of time as repair work is performed. As of September 30, 2017 and December 31, 2017, our lower of cost or net realizable value valuation allowance for new and used boat, motor, and trailer inventories was $1.8 million and $2.6 million, respectively. If events occur and market conditions change, causing the fair value to fall below carrying value, the lower of cost or net realizable value valuation allowance could increase.

We account for goodwill in accordance with FASB Accounting Standards Codification 350, “Intangibles - Goodwill and Other” (“ASC 350”), which provides that the excess of cost over net assets of businesses acquired is recorded as goodwill. In January 2017, we purchased Hall Marine Group, a privately owned boat dealer in the Southeast United States with locations in North Carolina, South Carolina, and Georgia, resulting in the recording of $16.0 million in goodwill. In total, current and previous acquisitions have resulted in the recording of $25.9 million in goodwill. In accordance with ASC 350, we review goodwill for impairment at least annually and whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Our annual impairment test is performed during the fourth fiscal quarter. If the carrying amount of goodwill exceeds its fair value we would recognize an impairment loss in accordance with ASC 350. As of December 31, 2017, and based upon our most recent analysis, we determined through our qualitative assessment that it is not “more likely than not” that the fair values of our reporting units are less than their carrying values. As a result, we were not required to perform the two-step goodwill impairment test. The qualitative assessment requires us to make judgments and assumptions regarding macroeconomic and industry conditions, our financial performance, and other factors. We do not believe there is a reasonable likelihood that there will be a change in the judgments and assumptions used in our qualitative assessment which would result in a material effect on our operating results.

FASB Accounting Standards Codification 360-10-40, “Property, Plant, and Equipment - Impairment or Disposal of Long-Lived Assets” (“ASC 360-10-40”), requires that long-lived assets, such as property and equipment and purchased intangibles subject to amortization, be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of the asset is measured by comparison of its carrying amount to undiscounted future net cash flows the asset is expected to generate. If such assets are considered to be impaired, the impairment to be recognized is measured as the amount by which the carrying amount of the asset exceeds its fair market value. Estimates of expected future cash flows represent our best estimate based on currently available information and reasonable and supportable assumptions. Our impairment loss calculations contain uncertainties because they require us to make assumptions and to apply judgment in order to estimate expected future cash flows. Any impairment recognized in accordance with ASC 360-10-40 is permanent and may not be restored. The analysis is performed at a regional level for indicators of permanent impairment given the geographical interdependencies among our locations. Based upon our most recent analysis, which excludes fixed assets classified as held for sale which are recorded at fair value, we believe no impairment of long-lived assets existed as of December 31, 2017. We do not believe there is a reasonable likelihood that there will be a change in the future estimates or assumptions used to test for recoverability which would result in a material effect on our operating results.

We account for our stock-based compensation plans following the provisions of FASB Accounting Standards Codification 718, “Compensation — Stock Compensation” (“ASC 718”). In accordance with ASC 718, we use the Black-Scholes valuation model for valuing all stock-based compensation and shares purchased under our Employee Stock Purchase Plan. We measure compensation for restricted stock awards and restricted stock units at fair value on the grant date based on the number of shares expected to vest and the quoted market price of our common stock. We recognize compensation cost for all awards in operations, net of estimated forfeitures, on a straight-line basis over the requisite service period for each separately vesting portion of the award. Our valuation models and generally accepted valuation techniques require us to make assumptions and to apply judgment to determine the fair value of our awards. These assumptions and judgments include estimating the volatility of our stock price, expected dividend yield, employee turnover rates and employee stock option exercise behaviors. We do not believe there is a reasonable likelihood that there will be a change in the future estimates or assumptions we use to calculate our stock-based compensation which would result in a material effect on our operating results.

We account for income taxes in accordance with FASB Accounting Standards Codification 740, “Income Taxes” (“ASC 740”). Under ASC 740, we recognize deferred tax assets and liabilities for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. We measure deferred tax assets and liabilities using enacted tax rates expected to apply to taxable income in the years in which we expect those temporary differences to be recovered or settled. We record valuation allowances to reduce our deferred tax assets to the amount expected to be realized by considering all available positive and negative evidence.

Pursuant to ASC 740, we must consider all positive and negative evidence regarding the realization of deferred tax assets. ASC 740 provides for four possible sources of taxable income to realize deferred tax assets: 1) taxable income in prior carryback years, 2) reversals of existing deferred tax liabilities, 3) tax planning strategies and 4) projected future taxable income. As of December 31, 2017, we have no available taxable income in prior carryback years, limited reversals of existing deferred tax liabilities or prudent and feasible tax planning strategies. Therefore, the recoverability of our deferred tax assets is dependent upon generating future taxable income.

The determination of releasing valuation allowances against deferred tax assets is made, in part, pursuant to our assessment as to whether it is more likely than not that we will generate sufficient future taxable income against which benefits of the deferred tax assets may or may not be realized. Significant judgment is required in making estimates regarding our ability to generate income in future periods.

During the fourth quarter of fiscal 2017, the Company recorded a net tax benefit of $1.8 million primarily pertaining to a worthless stock deduction. The tax benefit of this deduction was primarily based on the write-off of the Company’s investment in its British Virgin Islands subsidiary for US tax purposes.

During the first quarter of fiscal 2018, the Company recorded a reduction of our beginning deferred tax assets of approximately $889,000 and a corresponding increase in our income tax provision as a result of the Tax Cuts and Jobs Act legislation passed in December 2017 which lowered the federal corporate tax rate from 35% to 21%, among other changes. The final impact of the Tax Cuts and Jobs Act legislation may differ due to, among other things, changes in interpretations, our assumptions used, issuance of additional guidance, and actions we may take as a result of the new legislation.

The application of income tax law is inherently complex. Laws and regulations in this area are voluminous and are often ambiguous. Under ASC 740, the impact of uncertain tax positions taken or expected to be taken on an income tax return must be recognized in the financial statements at the largest amount that is more likely than not to be sustained upon audit by the relevant taxing authority. An uncertain income tax position will not be recognized in the financial statements unless it is more likely than not of being sustained. As such, we are required to make subjective assumptions and judgments regarding our effective tax rate and our income tax exposure. Our effective income tax rate is affected by changes in tax law in the jurisdictions in which we currently operate, tax jurisdictions of new retail locations, our earnings, and the results of tax audits. We believe that the judgments and estimates discussed herein are reasonable.

In May 2014, the FASB issued Accounting Standards Update No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” (“ASU 2014-09”), a converged standard on revenue recognition. The new pronouncement requires revenue recognition to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects

to be entitled in exchange for those goods or services. The guidance also specifies the accounting for some costs to obtain or fulfill a contract with a customer, as well as enhanced disclosure requirements. ASU 2014-09 is effective for annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. Early adoption is permitted for annual reporting periods beginning after December 15, 2016. While we are continuing to evaluate the impact the adoption of ASU 2014-09 will have on our unaudited condensed consolidated financial statements, we currently do not believe the adoption of this standard will have a material impact on our unaudited condensed consolidated financial statements, or will cause a significant change to our current accounting policies or internal control over financial reporting for revenue recognition on boat, motor, and trailer sales, parts and service operations, brokerage commissions, slip and storage services, charter rentals, and fee income generated from finance and insurance products. ~~We plan to adopt ASU 2014-09 in fiscal 2019.~~

In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842)” (“ASU 2016-02”). This update requires organizations to recognize lease assets and lease liabilities on the balance sheet and also disclose key information about leasing arrangements. ASU 2016-02 is effective for annual reporting periods beginning on or after December 15, 2018, and interim periods within those annual periods. Earlier application is permitted for all entities as of the beginning of an interim or annual period. While we are continuing to evaluate the impact of the adoption of ASU 2016-02 on our unaudited condensed consolidated financial statements, we believe the adoption of ASU 2016-02 may have a significant and material impact to our unaudited condensed consolidated balance sheet given our current lease agreements for our leased retail locations. We are currently evaluating the impact the adoption of ASU 2016-02 will have on our other unaudited condensed consolidated financial statements. Based on a preliminary assessment, we expect that most of our operating lease commitments will be subject to the new guidance and recognized as operating lease liabilities and right-of-use assets upon adoption, resulting in a material increase in the assets and liabilities recorded on our unaudited condensed consolidated balance sheet. We are continuing our assessment, which may identify additional impacts this standard will have on our consolidated financial statements and related disclosures and internal control over financial reporting. We plan to adopt ASU 2016-02 in fiscal 2020.

In January 2017, the FASB issued ASU 2017-04, “Simplifying the Test for Goodwill Impairment (Topic 350)” (“ASU 2017-04”). This update removes the requirement to compare the implied fair value of goodwill with its carrying amount as part of step 2 of the goodwill impairment test. As a result, under ASU 2017-04, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount and should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the impairment loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. This guidance is effective prospectively for fiscal years beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed after January 1, 2017. The adoption of ASU 2017-04 is not expected to have a significant impact on the Company’s unaudited condensed consolidated financial statements or internal control over financial reporting.

The following discussion compares the three months ended December 31, 2017, with the three months ended December 31, 2016 and should be read in conjunction with the unaudited condensed consolidated financial statements, including the related notes thereto, appearing elsewhere in this report.

~~Three Months Ended December 31, 2017 Compared with Three Months Ended December 31, 2016~~

~~Revenue.~~ Revenue increased $10.0 million, or 4.4%, to $236.9 million for the three months ended December 31, 2017, from $226.9 million for the three months ended December 31, 2016. Of this increase, $10.8 million was attributable to stores acquired that were not eligible for inclusion in the comparable-store base, which was partially offset by an approximate $770,000 decrease in comparable-store sales. Comparable-store sales increased 28% in the three months ended December 31, 2016. The increase in our store revenue was due primarily to increases in new and used boats sales.

~~Gross Profit.~~ Gross profit increased $6.1 million, or 11.5%, to $59.2 million for the three months ended December 31, 2017, from $53.1 million for the three months ended December 31, 2016. Gross profit as a percentage of revenue increased to 25.0% for the three months ended December 31, 2017 from 23.4% for the three months ended December 31, 2016. The increase in gross profit as a percentage of revenue was primarily the result of improved margins on new and used boat sales. The increase in gross profit dollars was primarily attributable to the increase in our gross margins. Additionally, our higher margin brokerage, finance and insurance products, service, and storage services increased as a percentage of revenue, contributing to our overall margins increasing accordingly.

~~Selling, General, and Administrative Expenses.~~ Selling, general, and administrative expense increased $3.2 million, or 6.7%, to $50.2 million for the three months ended December 31, 2017, from $47.1 million for the three months ended December 31, 2016. Selling, general, and administrative expenses as a percentage of revenue increased to 21.2% for the three months ended December 31, 2017 from 20.8% for the three months December 31, 2016. ~~The increase in selling, general, and administrative expenses was primarily attributable to recent acquisitions.~~

~~Interest Expense.~~ Interest expense increased $973,000, or 62.0%, to $2.5 million for the three months ended December 31, 2017 from $1.6 million for the three months ended December 31, 2016. Interest expense as a percentage of revenue increased to 1.1% for the three months ended December 31, 2017 from 0.7% for the three months ended December 31, 2016. The increase in interest expense was primarily the result of increased borrowings and increases in interest rates.

~~Income Taxes.~~ ~~Income tax expense increased $418,000, or 22.8%, to $2.2 million for the three months ended~~ ~~December 31, 2017~~ from $1.8 million for the three months ended December 31, 2016. Our effective income tax rate decreased to 34.8% for the three months ended December 31, 2017 from 40.9% for three months ended December 31, 2016. The decrease was mainly due to the passage of the Tax Cuts and Jobs Act legislation in December 2017 which lowered the federal corporate tax rate from 35% to 21%, partially offset by the re-measurement of our beginning deferred tax assets and liabilities which resulted in an additional charge to income tax expense for the period of $889,000.

Our cash needs are primarily for working capital to support operations, including new and used boat and related parts inventories, off-season liquidity, and growth through acquisitions and new store openings. Acquisitions and new store openings remain important strategies to our company, and we have recently completed certain acquisitions, and we plan to accelerate our growth through these strategies. However, we cannot predict when unfavorable economic or financial conditions will return or the duration of such conditions. We regularly monitor the aging of our inventories and current market trends to evaluate our current and future inventory needs. We also use this evaluation in conjunction with our review of our current and expected operating performance and expected business levels to determine the adequacy of our financing needs.

These cash needs have historically been financed with cash generated from operations and borrowings under the Amended Credit Facility. Our ability to utilize the Amended Credit Facility to fund operations depends upon the collateral levels and compliance with the covenants of the Amended Credit Facility. Any turmoil in the credit markets and weakness in the retail markets may interfere with our ability to remain in compliance with the covenants of the Amended Credit Facility and therefore our ability to utilize the Amended Credit Facility to fund operations. As of December 31, 2017, we were in compliance with all covenants under the Amended Credit Facility. We currently depend upon dividends and other payments from our dealerships and the Amended Credit Facility to fund our current operations and meet our cash needs. As 100% owner of each of our dealerships, we determine the amounts of such distributions subject to applicable law, and currently, no agreements exist that restrict this flow of funds from our dealerships.

~~For the three months ended December 31, 2017 and 2016, cash used in operating activities was approximately $56.2 million and $43.2 million, respectively.~~ ~~For the~~ ~~three~~ months ended December 31, 2017, cash used in operating activities was primarily related to an increase of inventory driven by timing of boats received, increases in accounts receivable, decreases in accounts payable, seasonal declines in accrued expenses and customer deposits, partially offset by insurance proceeds received as a result of Hurricane Irma and ~~our net income adjusted for non-cash expenses such as depreciation and amortization expense, deferred income tax provision, and stock-based compensation expense. For the~~ ~~three~~ months ended December 31, 2016, cash used in operating activities was primarily related to an increase of inventory driven by timing of boats received and seasonal declines in customer deposits and accrued expenses, partially offset by ~~our net income adjusted for non-cash expenses such as depreciation and amortization expense along with stock-based compensation expense~~.

~~For the three months ended December 31, 2017 and 2016, cash used in investing activities was approximately $2.5 million and $3.6 million, respectively. For the three months ended December 31, 2017,~~ cash used in investing activities was primarily used to purchase property and equipment associated with improving existing retail facilities and making capital improvements as a result of Hurricane Irma~~. For the three months ended December 31, 2016,~~ ~~cash used in investing activities was primarily used to purchase inventory and property and equipment associated with improving existing retail facilities~~.

For the three months ended December 31, 2017 and 2016, cash provided by financing activities was approximately $52.3 million and $45.3 million, respectively. For the three months ended December 31, 2017, cash provided by financing activities was primarily attributable to net short-term borrowings as a result of increased inventory levels and proceeds from the issuance of common stock from our stock based compensation plans, partially offset by the repurchase of common stock under the share repurchase program and contingent consideration payments from acquisitions. For the three months ended December 31, 2016, cash provided by

financing activities was primarily attributable to net short-term borrowings as a result of increased inventory levels and proceeds from the issuance of common stock from our stock based compensation plans, partially offset by the repurchase of common stock under the share repurchase program.

In May 2017, we amended and restated our Inventory Financing Agreement (the “Amended Credit Facility”), originally entered into in June 2010, as subsequently amended, with Wells Fargo Commercial Distribution Finance LLC (formerly GE Commercial Distribution Finance Corporation). The May 2017 amendment and restatement extended the maturity date of the Credit Facility to October 2020, and the Amended Credit Facility includes two additional one-year extension periods, with lender approval. The May 2017 amendment and restatement, among other things, modified the amount of borrowing availability and maturity date of the Credit Facility. The Amended Credit Facility provides a floor plan financing commitment of up to $350.0 million, an increase from the previous limit of $300 million, subject to borrowing base availability resulting from the amount and aging of our inventory.

The Amended Credit Facility has certain financial covenants as specified in the agreement. The covenants include provisions that our leverage ratio must not exceed 2.75 to 1.0 and that our current ratio must be greater than 1.2 to 1.0. The interest rate for amounts outstanding under the Amended Credit Facility is 345 basis points above the one-month LIBOR. There is an unused line fee of ten basis points on the unused portion of the Amended Credit Facility.

Advances under the Amended Credit Facility are initiated by the acquisition of eligible new and used inventory or are re-advances against eligible new and used inventory that have been partially paid-off. Advances on new inventory will generally mature 1,080 days from the original invoice date. Advances on used inventory will mature 361 days from the date we acquire the used inventory. Each advance is subject to a curtailment schedule, which requires that we pay down the balance of each advance on a periodic basis starting after six months. The curtailment schedule varies based on the type and value of the inventory. The collateral for the Amended Credit Facility is all of our personal property with certain limited exceptions. None of our real estate has been pledged for collateral for the Amended Credit Facility.

As of December 31, 2017, our indebtedness associated with financing our inventory and working capital needs totaled approximately $307.7 million. As of December 31, 2016 and 2017, the interest rate on the outstanding short-term borrowings was approximately 4.0% and 4.7%, respectively. As of December 31, 2017, our additional available borrowings under our Amended Credit Facility were approximately $17.0 million based upon the outstanding borrowing base availability. The aging of our inventory limits our borrowing capacity as defined curtailments reduce the allowable advance rate as our inventory ages.

~~Except as specified in this "Management's Discussion and Analysis of Financial Condition and Results of Operations"~~Operations” and in the ~~attached unaudited condensed consolidated financial statements,~~Unaudited Condensed Consolidated Financial Statements in the “Financial Statements (Unaudited)”, we have no material commitments for capital for the next 12 months. WeBased on the information currently available to us (including the impacts on consumer demand of the current supply chain and inventory challenges, inflation, higher interest rates, and potential recession, all of which are uncertain), we believe that the cash generated from sales and our existing capital resources will be ~~sufficient~~adequate to ~~finance~~meet our ~~operations~~liquidity and capital requirements for at least the next 12 months, except for possible significant acquisitions.

Our business, as well as the entire recreational boating industry, is highly seasonal, with seasonality varying in different geographic markets. With the exception of Florida, we generally realize significantly lower sales, ~~and~~ higher levels of inventories, and related short-term borrowings, which solely consisted of the Floor Plan, in the quarterly periods ending December 31 and March 31. The onset of the public boat and recreation shows in January generally stimulates boat sales and typically allows us to reduce our inventory levels and related short-term borrowings, which solely consisted of the Floor Plan, throughout the remainder of the fiscal year. Our ~~business could become substantially more seasonal if we acquire dealers that operate in colder regions of the United States or close retail locations in warm climates.~~expansion into boat storage may act to reduce our seasonality and cyclicality.

Our business is also subject to weather patterns, which may adversely affect our results of operations. For example, prolonged ~~or severe~~ winter conditions, drought conditions (or merely reduced rainfall levels) or excessive rain, may limit access to area boating locations or render boating dangerous or inconvenient, thereby curtailing customer demand for our ~~products and services.~~products. In addition, unseasonably cool weather and prolonged ~~or severe~~ winter conditions may lead to a shorter selling season in certain locations. Hurricanes and other storms could result in disruptions of our operations or damage to our boat inventories and facilities, as has been the case when Florida and other markets were affected by ~~hurricanes.~~hurricanes, such as Hurricanes Harvey and Irma in 2017 and Hurricane Ian in 2022. Although our geographic diversity is likely to reduce the overall impact to us of adverse weather conditions in any one market area, these conditions will continue to represent potential, material adverse risks to us and our future financial performance.

ITEM 3. QUANTITATIVE AND ~~QUALITATIVE~~QUALITATIVE DISCLOSURES ABOUT MARKET RISK

~~As of December 31, 2017, all of~~We are exposed to risk from changes in interest rates on our ~~short-term debt bore interest at a variable rate, tied to LIBOR as a reference rate.~~outstanding indebtedness. Changes in the underlying ~~LIBOR~~ interest ~~rate~~rates on our short-term borrowings, which solely consisted of the Floor Plan, and long-term debt, which have variable interest rates, could affect our earnings. For example, a hypothetical 100 basis point, 200 basis point, or 300 basis point increase in the interest rate ~~on our short-term debt~~ would result in an increase of approximately ~~$3.1~~$9.0 million, $18.1 million, or $27.1 million in annual pre-tax interest expense. ~~This~~These estimated ~~increase is~~increases are based upon the outstanding balance of our short-term borrowings, which solely consisted of the Floor Plan, and long-term debt as of ~~December 31, 2017~~June 30, 2023 and assumes no mitigating changes by us to reduce the outstanding balances and no additional interest assistance that could be received from vendors due to the interest rate increase.

Products purchased from European-based and Chinese-based manufacturers are transacted in U.S. dollars. Fluctuations in the U.S. dollar exchange rate may impact the retail price at which we can sell foreign products. Accordingly, fluctuations in the value of other currencies compared with the U.S. dollar may impact the price points at which we can profitably sell such foreign products, and such price points may not be competitive with other products in the United States. Thus, such fluctuations in exchange rates ultimately may impact the amount of revenue, cost of goods sold, cash flows and earnings we recognize for such foreign products. We cannot predict the effects of exchange rate fluctuations on our operating results. In certain cases, we may enter into foreign currency cash flow hedges to reduce the variability of cash flows associated with forecasted purchases of boats and yachts from European-based and Chinese-based manufacturers. We are not currently engaged in foreign currency exchange hedging transactions to manage our foreign currency exposure. If and when we do engage in foreign currency exchange hedging transactions, there can be no assurance that our strategies will adequately protect our operating results from the effects of exchange rate fluctuations.

Additionally, the Fraser Yachts Group, Northrop & Johnson, and IGY Marinas have transactions and balances denominated in currencies other than the U.S. dollar. Most of the transactions or balances for Fraser Yachts Group are denominated in euros. Net revenues recognized whose functional currency was not the U.S. dollar were less than 2% of our total revenues in fiscal 2022.

We maintain disclosure controls and procedures that are designed to ensure that material information required to be disclosed by us in Securities Exchange Act reports is recorded, processed, summarized, and reported within the time periods specified in the ~~Securities and Exchange Commission’s~~SEC’s rules and forms, and that such information is accumulated and communicated to our management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

Our Chief Executive Officer and Chief Financial Officer have evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) as of the end of the period covered by this report. Based on such evaluation, such officers have concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were effective at the reasonable assurance level.

During the quarter ended ~~December 31, 2017,~~June 30, 2023, there were no changes in our internal control over financial reporting that materially affected, or were reasonably likely to materially affect, our internal control over financial ~~reporting.~~reporting, except as described in the following sentence. On October 1, 2022, we acquired IGY Marinas. As we proceed with integration, we are implementing various accounting processes and internal controls over financial reporting for this reporting subsidiary.

Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and procedures and internal control over financial reporting will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Although our disclosure controls and procedures are designed to provide reasonable assurance of achieving their objectives, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the ~~company~~Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override

of the control. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, a control may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

Exhibits 31.1 and 31.2 are the Certifications of the Chief Executive Officer and Chief Financial Officer, respectively. The Certifications are required in accordance with Section 302 of the Sarbanes-Oxley Act of 2002 (the “Section 302 Certifications”). This Item of this report, which you are currently reading is the information concerning the Evaluation referred to in the Section 302 Certifications and this information should be read in conjunction with the Section 302 Certifications for a more complete understanding of the topics ~~presented~~.presented.

We are party to various legal actions arising in the ordinary course of business. While it is not feasible to determine the actual outcome of these actions as of ~~December 31, 2017,~~June 30, 2023, we do not believe that these matters will have a material adverse effect on our unaudited condensed consolidated financial condition, result of operations, or cash flows.

~~The following table presents information with respect to our repurchase of our common stock during the three months ended December 31, 2017.~~None.

~~Not applicable.~~Insider trading arrangements and policies. During the three months ended June 30, 2023, none of the Company’s officers or directors adopted or terminated any contract, instruction or written plan for the purchase or sale of Company securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any “non-Rule 10b5-1 trading arrangement,” as defined in Item 408(c) of Regulation S-K.


3.1		Articles of Incorporation of MarineMax, Inc., a Florida corporation. (1)

3.2		Bylaws of MarineMax, Inc., a Florida corporation. (1)

4.1		Form of Common Stock Certificate. (1)

10.1		First Amendment and Consent to Credit Agreement, dated June 15, 2023, by and among MarineMax, Inc., the other loan parties thereto, the lenders party thereto, Manufacturers and Traders Trust Company as Administrative Agent, Swingline Lender and Issuing Bank and Wells Fargo Commercial Distribution Finance, LLC, as Floor Plan Agent.
~~31.1~~
31.1		Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a), promulgated under the Securities Exchange Act of 1934, as amended.

31.2		Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a), promulgated under the Securities Exchange Act of 1934, as amended.

32.1		Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2		Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS		Inline XBRL Instance Document - The instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document

101.SCH		Inline XBRL Taxonomy Extension Schema Document

101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document

104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

(1)

Incorporated by reference to Registrant’s Form 8-K as filed March 20, 2015.

~~(1)~~

~~Incorporated by reference to Registrant’s Form 8-K as filed March 20, 2015.~~

~~SIGNATURES~~

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


		MARINEMAX, INC.

~~January 31, 2018~~July 27, 2023	By:	/s/ Michael H. McLamb

		Michael H. McLamb
		Executive Vice President,
		Chief Financial Officer, Secretary, and Director
		(Principal Accounting and Financial Officer)


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)


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


Large accelerated filer	☐	Accelerated filer	☒
Non-accelerated filer	☐ ~~(Do not check if a smaller reporting company)~~	Smaller reporting company	☐
		Emerging growth company	☐


Item No.	Item No.	Page	Item No.	Page

PART I. FINANCIAL INFORMATION	PART I. FINANCIAL INFORMATION		PART I. FINANCIAL INFORMATION
1.	Financial Statements (Unaudited):		Financial Statements (Unaudited):
			Condensed Consolidated Statements of Operations for the Three and Nine Months Ended June 30, 2022 and 2023	3
	Condensed Consolidated Statements of Operations for the Three Months Ended December 31, 2016 and 2017	3	Condensed Consolidated Statements of Comprehensive Income for the Three and Nine Months Ended June 30, 2022 and 2023	4
	Condensed Consolidated Balance Sheets as of September 30, 2017 and December 31, 2017	4	Condensed Consolidated Balance Sheets as of September 30, 2022 and June 30, 2023	5
	Condensed Consolidated Statement of Stockholders’ Equity for the Three Months Ended December 31, 2017	5	Condensed Consolidated Statements of Shareholders’ Equity for the Nine Months Ended June 30, 2022 and 2023	6
	Condensed Consolidated Statements of Cash Flows for the Three Months Ended December 31, 2016 and 2017	6	Condensed Consolidated Statements of Cash Flows for the Nine Months Ended June 30, 2022 and 2023	8
	Notes to Condensed Consolidated Financial Statements	7	Notes to Condensed Consolidated Financial Statements	9

2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	15	Management’s Discussion and Analysis of Financial Condition and Results of Operations	24

3.	Quantitative and Qualitative Disclosures About Market Risk	22	Quantitative and Qualitative Disclosures About Market Risk	29

4.	Controls and Procedures	22	Controls and Procedures	29

PART II. OTHER INFORMATION	PART II. OTHER INFORMATION		PART II. OTHER INFORMATION	30
1.	Legal Proceedings	24	Legal Proceedings	30
1A.	Risk Factors	24	Risk Factors	30
2.	Unregistered Sales of Equity Securities and Use of Proceeds	24	Unregistered Sales of Equity Securities and Use of Proceeds	30
3.	Defaults Upon Senior Securities	24	Defaults Upon Senior Securities	30
4.	Mine Safety Disclosures	24	Mine Safety Disclosures	30
5.	Other Information	24	Other Information	30
6.	Exhibits	25	Exhibits	31
SIGNATURES	SIGNATURES	26	SIGNATURES	32

EX – 31.1	EX – 31.1		EX – 31.1
EX – 31.2	EX – 31.2		EX – 31.2
EX – 32.1	EX – 32.1		EX – 32.1
EX – 32.2	EX – 32.2		EX – 32.2
EX – 101 INSTANCE DOCUMENT	EX – 101 INSTANCE DOCUMENT		EX – 101 INSTANCE DOCUMENT
EX – 101 SCHEMA DOCUMENT	EX – 101 SCHEMA DOCUMENT		EX – 101 SCHEMA DOCUMENT
EX – 101 CALCULATION LINKBASE DOCUMENT	EX – 101 CALCULATION LINKBASE DOCUMENT		EX – 101 CALCULATION LINKBASE DOCUMENT
EX – 101 DEFINITION LINKBASE DOCUMENT	EX – 101 DEFINITION LINKBASE DOCUMENT		EX – 101 DEFINITION LINKBASE DOCUMENT
EX – 101 LABEL LINKBASE DOCUMENT	EX – 101 LABEL LINKBASE DOCUMENT		EX – 101 LABEL LINKBASE DOCUMENT
EX – 101 PRESENTATION LINKBASE DOCUMENT	EX – 101 PRESENTATION LINKBASE DOCUMENT		EX – 101 PRESENTATION LINKBASE DOCUMENT


	Three Months Ended						Nine Months Ended
	June 30,						June 30,
	2022			2023			2022			2023
Net income	$	70,179		$	44,328		$	159,629		$	94,239

Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments		(1,679	)		120			(2,715	)		6,430
Interest rate swap contract		181			114			716			(137	)
Total other comprehensive income (loss), net of tax		(1,498	)		234			(1,999	)		6,293

Comprehensive income		68,681			44,562			157,630			100,532
Less: comprehensive income (loss) attributable to non-controlling interests		—			(86	)		—			340
Comprehensive income attributable to MarineMax, Inc.	$	68,681		$	44,648		$	157,630		$	100,192


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED ~~DECEMBER 31, 2017.~~JUNE 30, 2023.

	Three Months Ended
	December 31,
	2016		2017
Revenue	$	226,875	$	236,921
Cost of sales		173,737		177,672
Gross profit		53,138		59,249

Selling, general, and administrative expenses		47,095		50,246
Income from operations		6,043		9,003

Interest expense		1,569		2,542
Income before income tax provision		4,474		6,461

Income tax provision		1,831		2,249
Net income	$	2,643	$	4,212

Basic net income per common share	$	0.11	$	0.19

Diluted net income per common share	$	0.11	$	0.19

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

Basic		24,249,739		21,986,981
Diluted		24,923,125		22,712,648


	September 30,			June 30,
	2022			2023
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	228,274		$	226,134
Accounts receivable, net		50,287			95,018
Inventories		454,359			739,114
Prepaid expenses and other current assets		21,077			24,881
Total current assets		753,997			1,085,147
Property and equipment, net of accumulated depreciation of $111,274 and $135,614		246,011			521,637
Operating lease right-of-use assets, net		96,837			135,452
Goodwill		235,585			562,277
Other intangible assets, net		10,886			40,968
Other long-term assets		9,455			34,814
Total assets	$	1,352,771		$	2,380,295
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable	$	34,342		$	47,202
Contract liabilities (customer deposits)		144,427			97,785
Accrued expenses		89,402			118,576
Short-term borrowings		132,026			514,023
Current maturities on long-term debt		2,882			32,409
Current operating lease liabilities		9,693			9,967
Total current liabilities		412,772			819,962
Long-term debt, net of current maturities		45,301			399,229
Noncurrent operating lease liabilities		89,657			119,759
Deferred tax liabilities, net		15,401			54,449
Other long-term liabilities		6,974			84,539
Total liabilities		570,105			1,477,938
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS’ EQUITY:
Preferred stock, $.001 par value, 1,000,000 shares authorized, none issued or outstanding as of September 30, 2022 and June 30, 2023		—			—
Common stock, $.001 par value, 40,000,000 shares authorized, 28,939,846 and 29,171,101 shares issued and 21,672,825 and 21,904,080 shares outstanding as of September 30, 2022 and June 30, 2023, respectively		29			29
Additional paid-in capital		303,432			320,383
Accumulated other comprehensive (loss) income		(2,806	)		3,245
Retained earnings		630,667			724,808
Treasury stock, at cost, 7,267,021 shares held as of September 30, 2022 and June 30, 2023		(148,656	)		(148,656	)
Total shareholders’ equity attributable to MarineMax, Inc.		782,666			899,809
Non-controlling interests		—			2,548
Total shareholders’ equity		782,666			902,357
Total liabilities and shareholders’ equity	$	1,352,771		$	2,380,295


					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		—		—		—			—		$	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
Net income		—		—		—			—		$	44,416		—		$	(88	)		44,328
Shares issued pursuant to employee stock purchase plan		45,328		—		1,090			—			—		—			—			1,090
Stock-based compensation		2,140		—		5,490			—			—		—			—			5,490
Shares issued upon vesting of equity awards, net of minimum tax withholding		3,055		—		(45	)		—			—		—			—			(45	)
Other comprehensive income		—		—		—			232			—		—			2			234
BALANCE, June 30, 2023		29,171,101	$	29	$	320,383		$	3,245		$	724,808	$	(148,656	)	$	2,548		$	902,357


	Nine Months Ended June 30,
	2022			2023
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	159,629		$	94,239
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization		14,252			27,391
Deferred income tax provision, net of effects of acquisitions		4,553			18,271
(Gain) loss on sale of property and equipment and assets held for sale		(148	)		248
Gain on previously held equity investment upon acquisition of the entire business		—			(5,129	)
Stock-based compensation expense		11,110			15,703
(Increase) decrease in, net of effects of acquisitions —
Accounts receivable, net		(11,831	)		(39,877	)
Inventories		(117,531	)		(275,196	)
Prepaid expenses and other assets		(1,599	)		(1,429	)
(Decrease) increase in, net of effects of acquisitions —
Accounts payable		29,388			87
Contract liabilities (customer deposits)		20,401			(49,532	)
Accrued expenses and other liabilities		14,812			18,287
Net cash provided by (used in) operating activities		123,036			(196,937	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment		(43,091	)		(48,769	)
Cash used in acquisition of businesses, net of cash acquired		(70,885	)		(515,913	)
Proceeds from investments		2,250			513
Purchases of investments		(1,750	)		(2,486	)
Proceeds from insurance settlements		—			2,425
Proceeds from sale of property and equipment and assets held for sale		315			165
Net cash used in investing activities		(113,161	)		(564,065	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net borrowings on short-term borrowings		79,849			381,671
Proceeds from long-term debt		—			400,000
Payments of long-term debt		(2,223	)		(16,845	)
Contingent acquisition consideration payments		(3,000	)		(7,400	)
Purchase of treasury stock		(21,292	)		—
Net proceeds from issuance of common stock under incentive compensation and employee purchase plans		2,124			2,352
Payments on tax withholdings for equity awards		(4,590	)		(3,007	)
Net cash provided by financing activities		50,868			756,771
Effect of exchange rate changes on cash		(1,584	)		2,091
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		59,159			(2,140	)
CASH AND CASH EQUIVALENTS, beginning of period		222,192			228,274
CASH AND CASH EQUIVALENTS, end of period	$	281,351		$	226,134
Supplemental disclosures of cash flow information:
Cash paid for:
Interest	$	1,791		$	35,321
Income taxes	$	40,047		$	27,068
Non-cash items:
Contingent consideration liabilities from acquisitions	$	7,350		$	77,380


	June 30, 2023
	Level 1		Level 2		Level 3		Total
	(Amounts in thousands)
Assets:
Interest rate swap contract	$	—	$	1,358	$	—	$	1,358
Liabilities:
Contingent consideration liabilities	$	—	$	—	$	88,628	$	88,628


Unobservable Input:		June 30, 2023
Net operating income projected growth rates		23% - 25%
Discount rate		11.0%


	September 30, 2022				June 30, 2023
	Fair Value		Carrying Value		Fair Value		Carrying Value
	(Amounts in thousands)
Mortgage facility payable to Flagship Bank	$	6,355	$	6,403	$	5,271	$	6,031
Mortgage facility payable to Seacoast National Bank		16,681		17,098	$	12,874	$	17,060
Mortgage facility payable to Hancock Whitney Bank		24,977		25,192	$	20,708	$	23,757

	Shares Available for Grant			Options Outstanding			Aggregate Intrinsic Value (in thousands)		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life
Balance as of September 30, 2017		1,386,561			1,207,504		$	5,737	$	11.81		5.3
Options authorized		-			-			-		-
Options granted		-			-			-		-
Options cancelled/forfeited/expired		7,250			(7,250	)		-		15.73
Options exercised		-			(181,696	)		-		10.55
Restricted stock awards issued		(341,517	)		-			-		-
Restricted stock awards forfeited		16,189			-			-		-
Additional shares of stock issued		(2,689	)		-			-		-
Balance as of December 31, 2017		1,065,794			1,018,558		$	7,022	$	12.01		5.1

Exercisable as of December 31, 2017					1,006,891		$	6,987	$	11.96		5.1

Period	Total Number of Shares Purchased (1)		Average Price Paid per share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Maximum Number of Shares that may be Purchased Under the Plans or Programs
October 1, 2017 - October 31, 2017		44,244	$	15.72		44,244		342,885
November 1, 2017 - November 30, 2017		-		-		-		342,885
December 1, 2017 - December 31, 2017		-		-		-		342,885
Total		44,244	$	15.72		44,244		342,885