HZO - Earnings call transcript Q2 2018

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Operator

Ladies and gentlemen, thank you for standing by. Good day, and welcome to the MarineMax, Incorporated Fiscal Second Quarter 2018 Earnings Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Brad Cohen at ICR. Please go ahead, sir.

Brad Cohen

Operator. you, Thank and MarineMax' everyone, for this joining Good fiscal thank second of XXXX quarter discussion morning, you results. this I'm sure press out the copy the morning. that you've release all that received of went one Cameron not, if XXX-XXXX, will away. please Linda to And at right you call and (XXX) she e-mail I would management introduce to team Mr. MarineMax, now like the of McGill, Chief Officer; Executive Bill Mr. Chairman and Brett Officer of Financial McGill, McLamb, Michael Chief President and and Chief company. Operating Officer; the questions. be a few comments the available The for then your management make will quarter about and let the turn to that, over with And me Mike. call

Michael McLamb

you, joining Brad. Good you Thank morning, everyone, this thank and for call.

conditions like ability to or Before but and I'd statements consumer weather, and I turn of that impact uncertainties are actual results that Litigation and mind, include other Form general Reform materially level the call seasonality of XX-K the Securities market its the are filings Private identified grow to capitalize over certain you could expectations. forward-looking cause our Act. the comments These differ risks over of Bill, to other that not to call These in risks tell share, involve and our I'd the from Commission. and economic With and turn Bill. to Exchange factors the by in Securities numerous defined company's to limited on with as to like the spending, opportunities statements

Bill McGill

Thank you, Mike, and everyone. good morning,

me passionate experience they and for a starts for in the taking our the Let enjoying while great strong me the products, combined they great customers, begin our producing best March lifestyle, industry's very stress, of with ensuring team providing quarter. boating the growth by our team deliver. MarineMax with focus earnings care quarter. all let the it customer overall that Their on thanking are But propelled

the drove further weather a proud more As boating industry strong team, team further gross And in unit our the was Certainly, will in drove sales I a MarineMax company's best Brett validating March that alive one detail produced that quarter. in core remains and this, our XX% goals. the of quarter, the am in We our the is gross on of margin margin quarter adverse combination expansion was provide power history. but strategies more for factors of a despite levels. expansion. we quarter. discounting this later, for our evidence but the results of new that mixed on to of I the It and this improvement and of further increase opportunity registration Clearly, margin top margin year, a with high see for environment, like would well. last this are in also models demand comment to allows great very at quarter not good and remains

season, summer moving into As continues to selling the build. we are confidence our

that meaningful flow-through that sustained coupled another We in even accomplished combined better. to ability healthy for have To flow-through for the growth, due implies consumer us very increased the ever-growing with expense this a in good foreseeable as our job future. net margin resulted expansion, care our in increase, we allowed execute that flow-through, the environment. should would with controlling is our we've unit with for team the with quarter quarter. and strong are industry produced robust gross even that costs provides quarter, flow growing Our confidence confidence seeing, this this absent did consecutive This earnings. a point, and health support in cash to been $XXX,XXX which, claims in of a mid-teens about What rise

operating should continue team's leverage dials margins, improving moving to structure, worked maintaining sharp in has along positioned right, exactly gross easy the on never with positive it's expense focus While ahead. and a the keep all to well-controlled result

Clearly, innovative have from industry. also recovery, our those manufacturing unit we boaters existing to to new boaters entrants, and from and boating. only stimulate added new products. demand the over many the build well and as what simulate enjoying this models into our to one the new is the family this customers, up the they industry-leading a seen on time, reasons ultimately, lifestyle well to The the models not the but we become on throughout for partners is New replacement of item. more and with should our continue This interest food call growth have future. we MarineMax positioned is cycle comfortable to water, share trading market and, boating -- of larger That's new

in On the me comment devastation for still created let season. beaches, recovering the a expected, launched destination of is The Now charter we the a our great related customers. note, in busy, is we specifically very bars creating active demand very as Vacation and and in hurricane snorkeling, the of Aquila catamaran on for XXXX for fishing, the remains our business which MarineMax our is our high Yet BVI. fleet BVI's vacation charter charter from dreams business. and see. are to brand the

Demand in boats very team mentioned award recently, I Year brands. XX strong Achilles a received past, a by prestigious very we industry-leading much the out multihull just of of been have demand built pleased for use proud beating few strong, for has larger the am the and short years. and a the also catamarans the some U.S. in have we what in is private of the internationally. from Aquila for Boat boat, the our As

the the it seeing worldwide. should a our in future, not are While major brand in we yet given demand that P&L, be

know one announcement to the Ray, process is our ongoing. intent most we of the sell Brunswick's Sea important on brands, Regarding

expect Sea be, Ray the that maintain whoever owner of that, the we still and will brand Beyond will the improve legacy. upon future they

fact Given long are Ray's process. that to the the portion major the Sea continue our distribution, a we monitor of and history we closely

the be build, legacy arguably the future We brand brand, in terms consumer in of industry best are bright. confident will the that of the

boating heights the are two year. the quarters enter upon of of first to ready fiscal strong season, our the we we As build

product the the is our level execute and focused root We inventory right service of success. We remain highest our Everything and philosophy. to that starts ends on also the which to position sustained sales and have approach, the delivering of disciplined service customers. our with fine-tuned have team our and on

MarineMax I'd We comments Brett? few to to the with update, a maximize ensure Brett work on and And make boating will continue each additional experience quarter. of that the to choice. retailer ask remains

Brett McGill

everyone. Bill, morning, you, Thank and good

diversity such increases of team our I product came and the the the in strengths in Let unit provide also elaborate thank some offering, products. producing to me brand strong for first of downturn, growth. of to it We the saw significant in you significant mix second continues to quarter. on the of MarineMax XXXX. the we results stems and a broad want big drove from the expansion drive a our quarter, segment we in from which undertook The half

to for industry premium outboard growing higher-end and major Specifically, been has be which nicely. also the boat, has will of a This units price to the well has powered, been are average years unit driver segment and the continue fishing and our expansion grown revenue. of

boats to boats revenue pontoon helped into with our well. drive A they has unit similar very Additionally, as and growth. markets exists in inboard are and popular wake expansion story where ski

of and like service, team Additionally, our to certainly over on our parts importance have F&I, we the we storage, in and higher margin businesses brokerage, had those the continue years. accessories success areas train and

now that improvement our order we and Most the to However, in is the are few our improvement search also It's gross enhanced overall we boat sales maintaining we to a areas efficiently. the these their of few this our encouraging to brands discipline contributing to has we our innovation. improvement. incorporate cost ways commitment drive demonstrated another innovation improvement. to gross pricing additional margin, margin our opportunities ability total this into in a toward consecutive the that important, management. have our still job margin is long-term. arena on to years. margin intent their exist. improvement while the our Like is opportunities have operating to What proactive healthy to over management committed approach results sustain margin drive better growth helps Critical new stepped growth. team we focus to maintain led me These Finding years, believe and quarter. past of additional our business past margin Further are carry demand. drive in up is regarding over incrementally new our margin market efforts our for Certainly, as products doing across and execution overall through manufacturers execution technology doing we to disciplined to are is is our in and inventory quarter incremental saw supporting better, Clearly,

will to to and internal drive our focus continue We training process improvement.

proactive team's service, boating events to demand. to broad stimulate for should Our continue customers and product, our array approach our commitment of our to

XXXX; let in on area of the Boston most January planned. the few Now Carolinas Hall are of of in Island than in in completed and the XXXX; better over Russo The recent, are going have starting January of the very we well, acquisitions Jersey going Marine each years. touch past integrations the me in New XXXX, Marine with all in April

all while for by sharing as advantage great taking available embracing are to of that and additional principals and of are MarineMax management All customers. practices and products involved the the their contributing have They now greatly ideas, they best inventory ours the well. their

been welcome countless update, and success such cultures ask quarter. am in I provide the will MarineMax have aligned, When continue. family. It's to integrate, are experience to rewarding And great detailed We on with, Mike that more the Mike? and regard, with follows. success merge confident to that businesses and comments stories I'll teams of they a

Michael McLamb

experience. morning an quarter, you, MarineMax need praise again, the see I team add thank the Brett, great to for and and certainly Thank good to and to everyone. outstanding

growth For last increased to nearly XX% strong over the $XXX quarter revenue XX% same the million. is XX% The top on of in year. a improvement quarter,

which growth we grew is strong, sales up last XX% year. over given same-store that were Importantly, X%, against

larger pounded news. XX% generally unit but some Bill end outstanding that by flat to a having unit which would price that the selling XX% across always Geographically, our of the on At winter unit generally, due does our increased the From dropped the drop not our larger of primarily greatly strong strongest are As perspective, day, strong mentioned, slightly choppiness unit industry Clearly, our with weather. did of percentage board. data experience basis were add the a taking we areas would suggest we markets I share. the demand, growth is up. market overall average worst growth, is boat growth in boats, are growth, we which overall unit a tell that to about you denominator. The had X%. we very

northeast, the profit quarter I record that to March March. coming from all each the York Specifically, their month in add and the Most strong very healthy Gross XX.X%. which the quarter was markets, including Massachusetts, markets Florida, other hit Minnesota performed boost from very New own. includes regions the a of with well. solid, pretty held could

on includes the expansion businesses. of add While a the lot let driven about the Brett almost up of $XX.X million administrative the was improvement and margin quarter, care added health X%, equally color our the March higher-margin which that me general margin by by product Selling, year-over-year expenses drivers, rise were for of costs. and

increased and generally additional $X.X million, on to mostly controlling costs. Interest borrowings expense rose Our environment to higher to executed the due team due well rate inventory. has

for about income XX.X% drop rate year next annual approximate and As should this to year. our XX% taxes, effective

and However, the can by for certain eligible Hurricanes our the we cause any credits by $X.XX. about Harvey current quarter, Irma. provided impacted rate tax In companies vary. areas Those certain credits to are items given at benefited EPS quarter, and to

sales we in to than with strong for that only net after very are in up The yielding the million; the growth this the Expenses diluted $XX.X over the XXX% X% following first great comments surfaced net $X.X tax increase earnings more to pre-tax income XX% the made, in quarter. to other are Overall, this to have will points. the produced quarter. a year. Gross $X.XX a the tax $X.X credits. million; I doubling Same-store share in income few XXX% $X.XX months. eliminating $X.XX is XX% line, increase six we XX% of EPS make difference per factoring margins credit. acquisitions diluted increase million, in about recurring rate all generally a pretax normal due up XXX basis per of in in increase X% are removing Certainly, and a to earnings, items to EPS share after a start increase in

balance cash. had Moving $XX on At in we million sheet. to our quarter-end, approximately

form of in have substantial cash we unlevered inventory. Additionally, the

$XXX inventory million. quarter-end Our at was

few have quarters, As the past inventory ended XXXX to said with in due choppiness. big we we boat the elevated

line XXXX, should improve. on through inventory while X%, trends. work inventory so to we growth fall see is season, inventory we about make beginning progress we with about as revenue As X%, work in turns summer up more will selling less is more revenue Year-to-date staying while the in focused regard we Again, through margins. this at healthy are

Turning to our liabilities.

we Our not. were at increased fiscal of line as potential primarily at or as due of business, the to year-over-year. lumpy the in trade to inventories. to the short-term gets about share the we past, up attention some Customer and deposits $XXX was have a down end million deposits, whether completed read the borrowings involved which which repurchase on future item, is a quarter-end, year due last significant size is tend said This be and

it unit the However, growth line also through up Keep mind, X% a our when item XX% comp quarter, from sales same-store the December we March down after at last produced a looking against was backlog, in were we XX% up. is quarter. And year. at growth XX% this

up now in against trends in healthy. the an seem comp We backlog. are generally, a with XX% industry increase And

at These and total are is tangible sheet Our X.XX, net balance metrics. very X.XX. good current worth stands liabilities all ratio to our ratio

half which of per net are from is locations, long-term million we is have We our debt. debt-free, about all tangible diluted $XXX and December. which worth own or Our no additional $X.XX up almost share, $XX.XX

to fiscal guidance. Turning annual XXXX

to from the the to to prior the and reform. and from We $X.XX at share expectations per of range $X.XX are $X.XX to $X.XX, the start raising initial to $X.XX earnings tax range from $X.XX range the up of up prior year of

to assumes XX% still fiscal X% the sales for same-store guidance Our growth of year.

critical up compared reminder, using we As leverage still the in first modestly last we of against specifically back two through comps the of Despite the March, reason is given X% easier the better and a year to at how are as for the we The seasonality, than the generally the this half the June improvement but EPS, far, is. thus main importance half. fiscal years. quarter are leverage to are

additional and acquisitions Our excludes guidance we the uses the complete. million XX impact share from any may count shares of material

current is that larger last finish expect of on backlog May are that year. mind, we up. and year, the June April Let business. Keep April months our last me a mentioned ahead we briefly good in and then touch May said June. quarter. I in had just that, our critical will of and experienced Today, Having boat softness

Nonetheless, business, about back up work good during have Bill. to I'll that, our cut feel we while this the So over with for quarter. is challenge. this call know for we us out team And the our turn we

Bill McGill

Yes. Thank Mike. you,

markets. all Mike season As busy virtually selling the our of we're mentioned, in summer in now

of with ensure look the educate have to they're we to enjoying their planned events fullest. We the to boating embrace and our service as lifestyle customers hundreds each families month

at that's Certainly, stronger start team, positions in year MarineMax long I our great the premier this, our have well our see a It's It's great call, market balance as it and of the company. because we every strong the day. As the have we've our see. growing industry. marine very sheet, is remained but a years, that working the best I strategy really to our over a in challenges time. am of share proud strategies presence for to and of had retailer team for XXth in the public our very combined anniversary of with what accomplished we said simple

healthy. As ahead, industry is we the look

as robust, will when and aligned. the Our is acquisition always, all the culture, pipeline are market, the we team, execute only but valuation, the

thank move many our growth considerable always let closing, focus acquisitions growth. We our ready thank While very as value for of see our brands strategy, brands, team to forward. shareholders. continue driver as have long-term allowing the will dream our customers questions. markets we MarineMax and on In cases, that, we be our to segments of over for for with have and the a expansion the up the me the near-term expansion we of largest large we a open part as deliver time. In boating with building operator, our call the we team is And we today

Operator

Thank you. we'll take with from Instructions]. FBR. B. And our question Riley [Operator first Eric Wold

Eric Wold

sense push-through especially in quarter guess, March great industry in of a impressions great weaker outside of the noise created what how it. weather results your question you. operations? to Any first kind been morning. whatnot, from how guess Thank and was pushed importantly, Any -- I terms you what have more there. kind and through? of in the data are drove Florida. lot that your obviously, Appreciate might some Good end of there kind of of out the there And I concerns on and quarter?

Bill McGill

going reason focus to Yes, ultimate probably book, measure an satisfaction industry Net which on say, to do as done the Score the on probably could in by in the Promoter We our question, as that company. we're buying contrarian what be customer. biggest customer the And the example. was is was I'd we our

winter the Minnesota, of not there BVIs the to with though it's events things We islands, doing events. we're in them And the Even when we're that Keys, do various to cases, we're for how the some taking We to customers them our taking -- them to boating Bahamas, take in we're our doing so we're we we it's the and getaway invite customers. taking care today looking the trips. boating that are really even and people changing of as more end probably this differentiators. about that's the those And lives day, their their the a are customers I important people's it's the family. as think being about and during much lifestyle able for winter more it's And to do as escape and time. -- experience anything. are with them -- At is

the And I would reason give. so that's

Eric Wold

Thank boats to you. And larger mentioned slightly then were flat up. you obviously

of, the boats inventory of margin through in into of mix backlog a greater quarter, how of positioned them obviously, around side. boats I a seasons, So you're sense definitely guess, the looks mix peak the Maybe your heading flowing non-large of a kind us how which give this. helped and with kind on

Bill McGill

No it's Eric, that coming But that, now. boats did other it did backlog had around healthy. data broad-based June quarter mean we in study XX% into industry fairly I had, and big was and well that concerns, broad-based we similar, playing it's real the no fairly well. we when into the concerns quarter growth the it's is is in call. not -- our I than choppy. the well But as category as shows the are again, right

Eric Wold

All just And right. question. final

cash And through mentality obviously season? kind right for once probably look into environment heading kind benefit What's is You what Are acquisition a about the of the peak to of constructive kind hold a of the during environment for talked to get be and strong maybe could seller's like to still it? out kind how of that kind typical kind of dialogues season you somewhat. your of outlook and expectation from attractive now? on

Bill McGill

be exit probably it's approach, if of their strategy be their time, a taking of of time -- I taking that's type good, cases, selling. most could customers. of think a it its, long-term team, of But care more good. of -- times there. they In an look They a some look are to care it's more the at as Eric,

family. "Hey, strategy our as And the because make rise and ships it as a join tide It's does the so got they family to it when up. as, we that run," and people called sense, the joining not we've vacay that's and see our rise all don't comes

-- is try strategy not and revenues not adding get our to not acquisition. improve is of the our portfolio to to sake buy so for from And to our dealers. buying strategy our a the bump for It's

be that members team cultures the can even deliver find our and let's help experience need to is, aligned. to customers, better the Ours

Operator

Wedbush Securities. [Operator Instructions]. to go moving on, And Hardiman we'll James with

Sean Wagner

is this Sean, James. on Hi, for

quick. new that that a you on kind do real Just I have backup Ray have assurances to in meaningfully plan spoken any guess place offering? product Sea offering? Or for manufacturers? you buyer do any Have won't the of you other the shrink

Bill McGill

Ray. is the portfolio not our is Well, -- majority not Sea

up of understands Ray fact big feet brand. strategy draw it bunch not used it's so is really a feet the XX is not the to Brunswick still legacy one for XX ago. from or the customers brand And got We've it right assurances be because the percentage through our and the be to Sea the could years importance that To Ray of Sea take destroy the brand. the that broken

are dealers brand the And take and do that Brunswick well. the us of so the care thing independent we other and confident as will right for

Sean Wagner

maybe And guys -- the have guess the performed you on worst, of hardest-hit some as I whether for and color the as any Okay. best industry do states why and to you regions well?

Brett McGill

and I have to the want some show of newer when this a Sean, think show results opens. each Yes, get boat, some paid strategy, ready off. products, buy had sales that the in innovation Yes, a with boat boat, we I with some People markets, delivery of the for and spring a think it those northern Brett. hotter of those a entered great is

it -- boats good I I also, it's with executed And was think the it's result. -- show think a some marketing. then So a

Sean Wagner

the you insurance great. of paying claims Has Okay, of And out it? that give expected, from want slower, on kind however any think you as faster, then, fall? color gone about kind lastly, last or can just

Michael McLamb

it least people track have like. specifically do our in -- coming checks. hear We We increases it. We with insurance looks seen in certainly at don't

the event be what the of underlying replacement But it given on insurance happening because It's unit cycle an our than in back is were long. tie fundamentally, that We so the we're the things seen, really we've the have strength just growth think of seeing, -- takes to impacted. impacted hard generally, markets. driver think directly side in service might the through industry sometimes, I the it businesses markets in to a -- bigger I a trends the

Bill McGill

But needs that the the you in of type people's to product Sean, Florida, a new little in take Southern be that -- that markets. if -- in it thing to bit so still infrastructure being return that docks is and said and slower still there's those back Keys rebuilt

And the it Sean, our to still customers And a business takes attraction very lot so move it just passion active. probably and that's it. that most takes that thing, I while, that but to mean, lot the important a boating is of is this have for boating, a

over or I've I've most whether called continues years or thing have And customers genie business, the -- it's very the to off all whatever recreation mean, tax back that -- to resilient, Arabs this family very, be our I whether are it the families and be important is. been so water it their seen bottle. XX it luxury XXXXs, it in oil the in the was cutting would

Operator

Michael Swartz on, to we'll moving SunTrust. go with And

Michael Swartz

maybe the Just to a operating specifically, I seeing SG&A went drivers the think can of the gross here. of line And some give leverage, improvements in But some wanted where margin. of touch through sense us for little and SG&A. you we're on Brett

back are you're lot per the the if year, we leverage or I of half a structural of efficiencies in should just incremental more nature, wondering, some why in to leverage the expect of there. of guidance? the the And your seeing there slow getting You're changes mean, some

Michael McLamb

be. to June we some really, for so I size end stayed conservative is the there, there do the continue of caution more fundamentally and the probably quarter the this well the weekly, do zero-based And direction, prudent fiscal this, just going to of the guidance were reviewing try of it around healthy you can at I teams items, see just like budget, all way with spent at working it challenged with how of we're to quarter, way through each of where executing we we're But the But executing look Obviously, creep versus way. this areas. range on something a years, couple time that the think to could last always honestly, we back major expenses getting importance little and to pretty given to -- up part the we're And the on future, at I very quarterly do, now. to we cost take continue guidance and or that lot and And containment continue. But numbers rest a year the execute, a think chime involved, just maybe footnote jumping Brett this the if in. we potential budget the wrong this like year. just and of creep the and monthly, line our it quickly, figuring our cost said just can areas the abundance working we in and of through the I the out -- out begins manage of of a fiscal more maybe teams. are business -- in teams, where we I into

Brett McGill

to lot So time out affects boating. in was want our right this cost here, contained keep our They're and expensive very approach how going the weather upcoming -- have this everybody's our very a the our past bringing of models expenses deliver that this be compresses that. the that quickly quarter said, that's if quarter very and at you staffing a everything. and work I strategic boat specific we those, It's a to strategic of took do at we boats, keeping Mike very effective. areas team as so people approach also and to shows you to -- volume are have lot and a and us, these very think But But and successful shows. levels that when can

Michael Swartz

sense, Ray. around just from on with a any angst pushback, you get Okay, that's in going brand Sea obviously, that consumers right seen brand? process trying then limbo kind on, with helpful. have of that touching just any I'm And to now, the sales

Bill McGill

some seen -- -- We -- That in would people. the it larger we've delay. way in I products, especially is the state the the

$X the company If it to out million, words. boat for to use can going to some the it million, $X and your owner's there's to X been you're cause in for sale, hasn't around who million it, or a buy and angst, dollars, up going be and uncertainty is

sure, in it that -- heading smaller larger path so But go the it, a and announced Sea Ray we impacted We're the for thing down will expanded think good our there the not the this business. trigger. Rays. with larger customers has in we're gets I products. it seeing boat Sea pull And But ahead definitely once and

Michael Swartz

guidance, Then That's had include exclude the Mike, of tax that of first the helpful. guidance the kind nonrecurring one or in one-time range, year? we've does EPS items follow-up, Okay. two the new quarters or just just housekeeping.

Michael McLamb

includes it's guess, it that included -- the big way Mike. So deal it, I'd $X.XX, one technically it. done. we and math It's way how all only was or I of it not another. it, it did a the not It's, was But answer

Operator

next, Bookbinder Securities. IFS with to And Ronald we'll go

Ronald Bookbinder

on and the the to start great year. morning congratulations Good

Bill McGill

Thanks, Ron.

Brett McGill

you, Ron. Thank

Ronald Bookbinder

are they are have you Are I Or they seen what just far? up? trading the replacing was actually wondering, on so replenishment, they what had? people --

Brett McGill

that It's our been and it's just it's higher specifically. or It's little it of Brett. demand I a boats just measure is on -- both. hard kind people able service to it track But being think repaired. in hard a this out there of such seeing pace tell. trickle, to some with up slow We're to a seeing of Ronald, we're to departments replacement, be slow bit some directly trading

Ronald Bookbinder

value the own value? And in your how real again, remarks, estate of half you And estate your book market real the prepared does your to rise locations. mentioned with compare your on you Okay. how of

Michael McLamb

have to bought book done We of and, XXXX, came we've when many once on interest a out the it. $X bunch a country, store like the which a accounting I today. in of appraisals rules which in and seen fantastic whoever old Bill's million mean, have over value really do or haven't basis. Clearwater, gone back property you properties means clearly historical $XXX,XXX you of transaction, anything allowed piece pooling boat the board But the we example of gave across, here books on some on and we time, of is into a it's at Florida, a who merged it. with million And $X our came have probably the I

think estate. examples And some of purchases bunch the of we've smart then like a years have great real we that. we over made So

And so be above the value. value it is definitely I'd be as above clearly but is, book book it'd value. to guessing what

Bill McGill

It on up, be debt it. no there's any would and of substantially

Michael McLamb

Right.

Ronald Bookbinder

up outboards? just become what entry the towards of the part an boat is eventually people trade driving they And will that family? is Okay. these trend MarineMax as of more And it

Brett McGill

little I it that bit -- smoke. just outboards Yes, they X-stroke a think it the out, have didn't came of much quieter, probably the started with that

just to a more outboard think became and then And boat became as just trends those the started I the pleasurable lot back. to a it outboard so fishing for And more family. off, have boats that of on that's less take maybe about

really to have boats things audience. shade get more there's and seating, just places broader the better and there's more their evolved innovation in a appeal that So to

Bill McGill

lot discussion And And to drive being market end the I market for around the recognizing, going to the think that's the the down, a reason it's of there's stern down. But of Ron. being shift as what you're outboards. been day, drive at stern

have Brett's and an a work point, as it say, in boating, today been look at previously shift outboard wow it's they so we're and and didn't works and And -- people it as perceived well. to

Michael McLamb

drive. stern about talking Bill's

was an for received. today, certainly, marketplaces, being And has everything Sea already And So in single well it. I on don't that's four had engineered our years beaten ago, Ray that they're outboard. already down a believe boat outboards

so us very received. right for to from and outboard business has over well shifted And drive just stern the

Ronald Bookbinder

is a the cost, health going be care lastly, event? to that going many basis this was was forward? Or onetime quarter? it And in the Okay. How points

Michael McLamb

the last in say, was the It that in so this is going When what claims this have hard net go not. quarter. those before. of it's up at increase of is And from it the actuaries to one look some or some us to for forward to companies up it It's limits. now. $XXX,XXX incremental claims, And was heard it kind It do, -- have an our not have of you. folks or three in And followed who a popped while should happened. the you time But And time. back again then XXXX, get it self-insured, years then most usually, size, to it it can two shouldn't was think time up. comes subsides. from I it It's you And we're anomaly. of be hurt bunch loss does. when happening, stop like a And but it

to just of mentioning in even it improve expecting leverage look the continue for was as we're better leverage to clients. looking the wouldn't if So we just it it -- business, because wasn't noteworthy thought

Bill McGill

weren't that things innovative we add care health doing would been our it a Ron, coverage, lot with $X.X more And million. some than have I'd very if

health doing are, being and with ahead what members' we most embraced company. lot are of say, their money a so I'd things self-insured to plans save And are we're other and our of with team have the also companies

a an the big wasn't child lot the a we're the which and the on was million $X.XX claims So for of other it's we're this, I But Mike exposure pleased one with more. of with important the couple claims, on adult thing, there's and it a large think hook some said first happened, very coverage. that

Ronald Bookbinder

prime you and great. into we head much the Okay, luck season. good very as Thank

Bill McGill

Thanks, Ron.

Brett McGill

you. Thank

Operator

final our will David MacGregor Longbow from come with And Research. question

David MacGregor

talk strength. the some There's of just been kind behind drivers about

come starting talk You and kind to and to demand in that's which reform the Texas of extent addressed may replacement tax about could But Florida. the you through?

Michael McLamb

mean, and businesses especially there doing got high. base, about consumer driving today. people The chime believe, confidence good say, healthy. People business an a tend sentiment, all-time lot feel very business I I'll high. is Small know, out small the of revenue. I to customer our it's to in larger I is be at

be coming my doubt taxes bigger So lower, going "Hey, it's and got [indiscernible]. to people say, I be buy in are Brett boat." to that are helping. to going a so I'm year this

Brett McGill

feeling and of are to want small it's like and they just family who owners, consumers, feel to it's good out up them a time good think a just that sentiment by get lot I their our business and upgrade. in the with water

them a so... of their to boat have Some upgrade while waited

Bill McGill

that business probably and -- about is of owner the they're about out economy, saw the are the driven the that so. And to and middle do happy people by growth some will that continue is that probably is better tax we feeling class and cuts, America coming unit

David MacGregor

talking And business terms their encouraging. of sales just That's of you is a and what manufacturers they secondly, you inflation just are -- to on But what pass-through? possible recover costs model. about from yours their in hearing raw seek as to they're materials, more

Michael McLamb

to X% they're say There's with drop. being long increase spike, may consistent no a in close It's no each There's consistent. There's X%. of a change no some the time, or always year, on I'd level for that what it been do. be they flat to depending always price really manufacturer, David.

to perspective. So they're from pass passing on on our and we're it able

David MacGregor

But here, of from terms of given you guess, later inflecting you're to going think -- that? that sense inflation year, you're what secondly, get demand to around you're expect hearing of in do hear pass back boat anecdotally you're that the them your pricing all elasticity markets you parabolically, trying kind in And then have Just exist I a going might upwards how this do of to what more are that through? sometime some suppliers. to pronounced

Michael McLamb

XX our not in today, In we've been boating. all with higher of that taking looking and the know Based water other inputs were environments at where what based change. the at We're they on And what in starts said, suppliers all certainly, major it been keeping successful our our from continuing any years, hearing customers, care changes grow. could prices. to today on we've that things Bill on any know they inflation of over there up times,

we're no a be there environment, the perspective So to out winner matter what. from going we share believe in any

David MacGregor

used last just used X-year getting regarding Just at the model right availability question Or X trade-ins you're for is recent understand me the Okay. help that what dynamic you for you the in? people on tranche getting boats and are -- quality boats? Are coming around just the boat are me boats. boats of in And more now. to is trading new

Brett McGill

selling reflective new. some of that say that we to we're you mean, trade-ins are premium some more sell tend -- what of to in, like we boats. what lend said, newer I of is Let's our fresher customers trading see our on products

what are in historically, maybe we demand. nature real but don't somewhat, nothing than get. a They're have trade products. selling, of new. old some in seeing less specific. see boats we're of it's But by really certain hard So the lot we we're Used to In markets cases,

David MacGregor

a the Just sales around, that one shortage boats. recent just of drivers new of that's good been the the is strength available there's boat year of discussed model

asked I the I question. And why so that's guess

Bill McGill

Pricing it which per share. marketplace, moved allows to up the -- easier in boating trade makes

David MacGregor

reflecting Just used? of the scarcity year recent model

Bill McGill

happened in a of Yes. The auto same industry couple ago. thing the years

David MacGregor

you And versus used year this how boat for gross they did compare a quarter, margins ago?

Brett McGill

They product were our margins incrementally up. of were. Most

Operator

for I'll And McGill it back comments. to Mr. closing turn

Bill McGill

you I'd thank continued available you And Thank We're MarineMax. to today you, support in if and interest have for Thank closing, your you. of your like any all Operator. in additional questions.

Brett McGill

you. Thank

Operator

their to conference. like thank That does We'd participation. today's for everyone conclude

You may now disconnect.

MarineMax (HZO) 27 Apr 182018 Q2 Earnings call transcript