HZO - Earnings call transcript Q2 2021

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Operator

Good morning, and welcome to the MarineMax, Inc. 2021 Fiscal Second Quarter Conference Call. Today's Conference call is being recorded. At this time, I'd like to turn the call over to Dawn Francfort of ICR, investor relations for MarineMax.

Dawn Francfort

Thank you, Operator. thank Quarter joining XXXX and MarineMax's discussion everyone, Second Fiscal Conference morning, you this for of Good Call. if out I'm a sure she morning, will went right to XXX-XXX-XXXX, copy received call but this away. of the email Cameron that press release and you've at not, please all you Linda one that would like introduce management the to now I team MarineMax. of Mr. and Mr. and Chief Officer; Executive President McGill, Brett Chief the Financial McLamb, Mike company. Officer of for about comments the and your few questions. a available make will Management then quarter be let mind, in And turn the Mike. that with to over me call Mike?

Michael McLamb

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

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

Brett McGill

today. joining you, everyone, Mike, for thank us thank Well, and morning, good you and

into and over I the continuing June and XXXX provide value year. as growth also for and some I in the will review the an call, boating. highlights On of detail on the results and the positioning shareholder opportunities call beyond. the to the will on Then meaningful balance for Mike financial quarter as greater the MarineMax color in to our create will turn to share enthusiasm important long-term our discuss touch provide quarter from update on second well I

I that From after ongoing the proud we consumer our successfully we and the We a anticipated their our prioritizing pandemic behavior onset in results. customers families important while ability economy. in well than record share am a the quarter boating to changed welfare of this local our one to the produce navigate effectively to capitalize world. want health these quarter. how of ago of through the well-being achieved It's sustained on changes results I of First, results year and of record would be team, to note as that as the of team's pivoted resulting our more beneficiaries pandemic, consistent and

new that customers newer future. upgrade to to embracing confidence be continue and and and bonds growth with friends. by is new This life us everyday and for to see continue increasing escape Boating long-term replacement team, such to well continues that XX% us. recent demand supported a the of technology evidenced strengthen of about multiple while into new We in is the EPS to is providing boating existing our The more to lead also great customers upgrades, taking passionate These the as going boats to and larger offerings. out sustained lifestyle between boating the has outstanding, sevenfold able excited and layer created advantage growth an and and way same-store the of product ahead the I'm opportunities of March customers. than development stresses service I'm sales devoted family a cycle the product that growth to upgrade and honored be new and quarter. and by be are play driving foundational

X% which growth, quarter. was primary new the from growth by we same-store top driver, XX% earnings delivered a were same-store sales growth highlights few The sales of growth a ago. our underscore the robust that It's record important note provides driven to is and for me our unit sales. foundation Let March sales year on which future

Our driven touch unit increasing consolidated of and businesses, on March expansion higher-margin which the I'll record margins by our quarter margins of shortly. a XX% hit

and Our utilization driven platform significant geographic of growth and and the product the several digital our enabled years. diversification have effective our over past

Additionally, the industry continues to significant customers. acceleration new marine experience in a

driving XX% top margin meaningful geographic technology, We our leads into being and profitability. they up are categories brands, continue a regions point, leverage enhanced from sales on our across realized new we gains high continue The quarter, available Part of data, believe all us share. of well our to in demand sales product industry year is to strength in job as to investments continue our the and coming scale was From future higher-margin same-store our in To with X-month ago. growth in produced based manufacturers XX% that businesses. quarter support used these Given had and Profitability-wise, growth resurgence delivering global is success and last gained basis improvement We our gains new continued we great converted to years. we this relationships product XX%. position, a to market which and and voters gross benefit of period. due into this the March the points incremental XXX doing expect the we and strength to as these increasing margins are to the perspective, during on

and growth drive Fraser & company, last acquisitions global margin contributing helped expansion. the services greater our expansion. revenue; Northop its superyacht overall are the revenue, our while Johnson, to of SkipperBud's, X with Additionally, the our brokerage all contributed to margin of to service storage mix

parts contributed. and and as Additional service finance in well incremental also as insurance improvements

the even record about significant years acquisition, share of generally with resources good per expansion the the earnings leverage synergies associated expense the the margin operating earnings come. and to of XX% the and Regarding very sharing we and practices, to led SkipperBud's, and including $X.XX. greater best the brands in remain excited control of growth quarter, In drive to

for on experience exceptional laser-focused Our our an mission customers. remains being creating

We in technology, in our invest any prefer service to using our stores. flexible in model customers our continue digitally way they to or

which a for experience continues drive created customers, share our gains. seamless has market model Our to

let touch position will of important our the ongoing in believe drive beyond business attributes June Now growth quarter. share me the and we model and on the

of season should provides off fiscal have with visibility are and sheer important and this kicked size XXXX. the that confidence and we with outperform our We second The boating strong customers. backlog added into serve well to of positioned our for half XXXX prepared us

question can is as a demand inventory across also and strong shared we nationwide our remaining from deep While our competitive and do by impacted manufacturing see demand. product, timing the that perspective leverage we scale this support the advantage growing ability very There is be no deliver a to to our relationships industry.

shareholder create value culture. driving remains focused disciplined to strategy line building operating top leverage, on growth, capital management Our long-term strong our on and

with provide fiscal year Mike balance of growth visibility comments we market effectively our the sustained operating believe on into ,, approach, detailed service more our supported committed the strategy, generating technology. to We model premium of our investments the global presence, ask execute on growth. model locations, to ahead. and to growth will strategic as flow leverage significant that exceptional Mike? in customer our XXXX driving remain by and multifaceted continue support We the brands and ongoing in And into move business and strong I'll We quarter. update, combination cash

Michael McLamb

also and everyone. the good by their start Thank that for revenue X produced morning, you, our again, strong of Brett, to through the team and I'd year. first like efforts thanking record earnings months

comparable largely million revenue same-store the larger mix by due strong to to XX% grew XX% growth $XXX to of growth of quarter, over For and unit boats. exceptional new growth XX%. This was driven a sales

the acquisitions well Johnson & Northrop SkipperBud's Additionally, our also recent performed of and quarter. in

million dollars points to rose increased $XX over XX%. our while gross margin XXX profit gross Our basis

boat margins in the including gross factors. these and a categories; service margin record and sales in increased record new higher-margin was businesses, has of SkipperBud's, Growth impressive long demand; Our our handful to and brokerage finance, which due storage due at these to improving Among performance track on are performance a insurance and We used of Hopefully, we see global with Nonetheless, note businesses. from are the the Yachts. Fraser near pleased contributions & current of has that would services around improvements the our vaccine remained impacted rollouts, future. organizations these charter superyacht will bans we globe. superyacht the Johnson in business travel adversely by with Northrop

was quarter borrowings a reduction due rising Regarding again have commissions SG&A, to acquisitions increase the X lower cash once we rates given improved recently and the in interest related of combined completed. Interest short-term we majority and due to in the generated. sales with the the expense the

the $XX leverage which in was growth, with million. pretax quarter earnings another record Our strong setting drove very XX%, earnings of about quarterly operating

EPS in share net income both ago. Our more record generating year March and $X.XX quarter than rise seven-fold, $X.XX per earnings a saw versus

million. For Gross revenue months the year, of our $XXX margins XX%. are the X first exceeds

around operating leverage Our XX%. is

is our Our earnings an per EBITDA impressive start over and to the share year. $XX is at $X.XX million

on Moving balance our to sheet.

continue $XX with $XXX build ago. at a million quarter to versus end million We about cash year

sizable opportunities did some As discussed capitalize and rate to portfolio. on previously, of explored in slight interest a rate secure positions environment, development. estate mortgages further attractive we us real portion given arbitrage, the on our Besides it

was end at million. inventory Our $XXX quarter

Excluding SkipperBud's, inventory basis. is levels our relative near on a historic

historically same-store proven low I pivoted strong environment various our this by how strategy of sales lean to success the does is inventory as and has reiterate our speak again well it in levels of believe this very a partners. inventory. quarter also However, shared to team growth our selling of important unit-driven the manufacturing despite to quarter inventory strength It the

involved lumpy demand or financing size as a sales not can an predictor deposits borrowings contribution decreased of are to the related due seeing cash Looking best we and and whether the liabilities. because due deposits, over inventory at of Short-term rose they Customer a well to near-term increase as trade the and to be lower our not, in from XXX% due sharply while Skipper's. is generation.

is our at X.XX, Both impressive X.XX. net balance to ratio these Our current ratio very metrics. total tangible are of worth sheet liabilities and stands

$XXX was worth net tangible Our million.

expansion and ever, always capital has balance more strategic Our can formidable opportunities today been arise. a it sheet the provide than advantage, for as

be remain we up The to up now digits. expectations outperform units annual is high March high expect earlier to to to in and industry expected in growth the trends from guidance. the we digits guided sales our mid-single the the XXXX the We December quarter basis, an our the single year. usually This we digits and Industry digits single strong. in estimates the on from Since to rise grow are to now retail industry teens. AUP quarter high to Turning for guided high single annual mid- same-store exceeded and from the

$X.XX in to we per our previous despite our after in tax in above year, strength Given improvement $X.XX expecting the EPS we leverage the share in for quarter. Accordingly, operating also of of earnings second to from which in our $X.XX shares rise summary, earnings March, December the to the and guidance. guidance to assumes guidance results range guided we raising earnings the that our increases In XXXX are range guidance to $X effective our the pretax both outstanding rate. are half

excludes potential we complete. the that guidance acquisitions any may impact Our from

As needed we progress the will updates guidance. through to provide as we our year,

shares about XX.X% Our and a of million guidance XX versus rate last last uses XX% year, million over effective a little an XX share count tax of year. versus

in was the with September. remainder toughest our comparisons more the at Looking meaningful of and of summer quarters easiest June our quarter March XXXX, comparison the

levels, our will backlog with same-store current year. and visibility growth to into providing close next trends. Turning record strong April is fiscal at positive sales

generally levels. As these remained trends we have are and outperforming strong, we said, industry elevated

to visibility. enter important the continue selling solid with as we feel We good seasons

us of size the half provides for backlog to over back the Brett some As added fiscal discussed, outperform those the XXXX with our that Brett XXXX. comments. I'll sheer Brett? closing turn should With for back we and confidence comments, into call of

Brett McGill

Mike. you, Thank

fiscal the through and show for products performance continues exceptional even of our very to year team's months customer services, focused remain ago. We execution, of excellent Our on XXXX teams, experiences sales first top a impressive same-store technology. creating X on

customers new ensure and opportunity customer-centric approach the in see continues significant boating the joining expansion of the needs brand differentiated will to lifestyle, meet Our higher-margin we businesses. to will and continue many MarineMax our

staying active focused are while acquisition long-term business investment our opportunities with and that strategy. strengthen We should on our overall

open our building Looking remain value. long-term focused ahead, for call and that, executing culture, with strong creating let's strategy we operator, shareholder questions. on focusing on team the And growth up our

Operator

[Operator Instructions].

Wolfe line comes Research. Our first question the with from Wightman Fred of

Frederick Wightman

Brett, you and which previously. the mid-single-digit you industry expecting demand had remain mentioned single-digit growth than that number industry about think talked strong, you're is I better for high this that to the year,

both last frame comparison year, of start lap and sounds into industry, we some the But it shake could us As just should like see positive then of are summer you we also help positive? negative we numbers? you Could or months, move that set as some guys all they seeing How sort an to still the the expectations does as out? tougher guys remain you trends. industry

Brett McGill

I'll in Like there'll things visibility comment Internet all it. of the on we quite and traffic, seeing I'll said, us give let then traffic, customer growth. those Mike deposits fact we bit confidence of touch have, we're the the floor different demand and stores, a that some in be the

say, tough and come on... comps do growth. However, up you against I want like we're Mike, to

Michael McLamb

continues we're growth think looking be be just the now -- say, more about, to the we'll and of would that demand along the I overall is Yes, strong. I talking Yes. XXXX industry of talking very for lines

is at you unit same-store that But our June growth. the tough is it there's so unit I a is you also look at potential it's think I September XX%, quarter, indicate which strong sure. quarter our us, And comp which which X-year the there's the if for growth even XX% to stack, X-year growth is potential that for that's dollar half comp, there look if comp in know or does for Specifically, expectations in stack growth more back versus sales a that do.

Frederick Wightman

on just I basis. to just that a XX% the inventory said you Makes levels That through I running quarter. was commentary on you relative would sense. And was think, close inventory, you mind made? historic it down, that Again, last think organic

I quarter. to historic basis. last -- relative was you is on levels was down, where said So think think, it close a That XX% I

of is like-for-like a inventory sort So where basis? on

Michael McLamb

XX% XX% ability for And it at our in probably to year-over-year environment. in environment keep had us sales think inventory Skipper's, had getting strong lean our Difficulty]. our in of which a on September basis. is continue the driving product I or the in inventory in and speaks neighborhood same-store inventory XX% can We [Technical inventory is a down sell that we lower ability keeping to December. also our lean But levels. We manufacturers to XX% to Without keep growth.

We have is the environment which XX% in leanest in. operated we've March,

So product. team's great, I job manufacturers doing getting us our think keep our working a good

Operator

Joe question Raymond next James. comes Altobello from of the Our with line

Joseph Altobello

I'm your and get relationships $XXX more over process up million over over Just just for want buyers to that much X not I I curious changed understand your look year. at just boat buying If locations year-over-year. selling year-over-year, follow on or I see they the inventory. the is they revenues And physically certainly that a how results, has your down I past and multiple see up $XXX may million are But can't touch weeks? comfortable having X OEM inventory helps.

Brett McGill

saying a can talk you We've customer they're to you through that sell about our right? things we team, And over both right and lot for maybe when us. keep powerful sales out boat then XX on Joe. but months the a That can't have we've process training enjoying XX helped that, or invested a technology process, have on sales happened, know the you of, in that X I have future days you a years change in slot away, can cases, which tool. now, days, miss in invested slightly away. even future the that, the of process a -- a Two Yes, to some it's them order.

-- season customers left. to is is team on a the great accept miss finding are want boating out job don't they our whatever to way doing a So and

manufacturers to quick. products, a And doing they're the good us our So job are and we're getting turning willing them wait.

Joseph Altobello

you could Got the that And stays gross it. That's first 'XX? not into in to is discounting, of with margin. persist? or maybe and structural half gross of the note, is the helpful. I'm And due much just context. guys curious fiscal another on you margin favorable XX% that how if may may in much which put How

Brett McGill

Yes, Joe.

been mean, and sales have growing about tougher. as growing, We've -- I go our it were for long which well, made kept of talking strategy higher-margin been back those we boat businesses time, you we and a If look, but

we're as has strategy that that acquisition well. in shown focused Our area

-- we want strategy. some there's to So But normal love the to pricing if don't a our in a know environment, our normal comment have you our wants this Mike, really on from get tailwinds a I in that? we'd that's in environment, range, in strategy and that demand to right now. see market clearly, pricing-discounting margins

Michael McLamb

and information and businesses. our higher-margin all It's the & quarter-over-quarter is is is the on it that's in Fraser probably X/X last this coming the Johnson. around before. it's strategies pricing It's the the asking of coming Northrop It's of the basis gave rest have quarter used contributing, increase new quarters components The X/X about, a from we We've from it's what said, Yes. which Roughly future. Brett margins you're higher the roughly Joe. sustainable into SkipperBud's, pricing.

Joseph Altobello

Okay.

changed hasn't it. it Got So

Operator

next the line Our comes Michael of Swartz from with question Truist.

Michael Swartz

Mike, in the know we I of guidance this first quarter. like sort on you've the margin. around gross implying commentary in And the I It wanted through of slowdown incremental at half done we pretty just you're half had year. every to year, does the of look just and the go margins fiscal some touch back then But in know your as what look guidance. much I

puts and about to of in half? a the of half takes are then So guidance? the the first in sense of that maybe us back to relative give And year how -- the incrementals what some think what

Michael McLamb

Yes.

season our still part of ahead think of we've us. is biggest got selling it summer I

when we margin sitting strong done flow-through. here year, Also, today you're quarter. modeling team's last intention the a the is driving strong comparisons margin way I our think tougher you X prudent Obviously, looking the back business, prudent probably think months. at our of September So perspective next intention guidance against gross we're half do keep sure gross growth, we've somewhat in our from look as being get or at what up though, in to But for I guidance. and the it's X the

Michael Swartz

presold of just Okay. how looks at of us yet. secondly, maybe granularity. your maybe to transacted sense out a haven't just is that Great. maybe backlog that a and much being how well. little year as I units give been And sold Maybe more inventory today, mean last on relative versus this time that

Michael McLamb

good No, March. of year last obviously, when was question. Well, we million I inventory -- had think ended we $XXX

more much on now. ground had that be we the So would we sold do than

in, But our out. staying So more of communicated boats teams not coming. it's dates again, our scheduling presold and great doing as with their when as come they are stores, but they're coming deliveries, fast manufacturers our a getting boats are job in, in the customers really as the the going

so Inventory sold, of it's is frankly. And goes in comes quite out. it a model, and kind healthy

for than in on sold greater on the be is order a coming no, today. given So sure to inventory is going percentage ground, where just

Operator

[Operator Instructions].

Our final Wedbush with of Hardiman James from line the question comes Securities.

James Hardiman

of demand notably be I risk year. Great of a numbers supply think it strong growth by the what of you're sort coming in back on similar for Does think half that I shipments issues be Really right, to couple if the the year's really about your to there does that is to comp that of Does to step-up? up sort to encouraged going the And there growth positive up seen chain to that. of assume in the incoming able guess it do is any top comp? last put guidance little system? is what come versus in pace comp you've doubt comp, that quarter. What ability of last to the door it assume quarters? manufacturers assume the you shipments most going

Michael McLamb

And that's them look a things. with We're we the transfers such our great along to communicating really at data have a with question. clear Yes, regularly, manufacturers. visibility to

bots sale, they literally will sight land clear some built we for on being when customers day. for have a stock, for are that the to So these

time I'd getting have and so boats we But factors seen watch it And those we like those boats them couple that of visibility the products. delivered affect say arrive always frame, customers. on we here. close. in great quarters, The could to get outside last to within There's risks we've that

we arrival say I'd the dates. have great to So visibility

to risk factors. Some outside

James Hardiman

of come? XX% more Do inventory? you that feel would you the that knock on as hard does be got quarters to sales number But you even think bigger I do if inventory become higher a out result in like it's mean, the sales losing lack you're growth. same-store of difficult to you wanted? And that a

Brett McGill

sold about even probably lot people team trained, more we that's Yes. this more in we're for out, really talked I some in transact mean incoming. a have right we another X boat their and today. have And our meets right say, clearly, just if as notion like period, is might a can inventory needs of we And to And wanted a boats every had But I of let's like sales a cases, about, year, there's boats now that well. boat high-demand months looks getting you'd sale preconceived they it get.

to people boat like them. for And great something so move to Still a that. able we're

Michael McLamb

you at industry doing growth, you is it so manufacturers, higher trends we're better and growth is if we're better our that's the considerably our from -- our at And getting rate -- and which specifically, look look would categories, I you team the tell think delivering product if key industry's the and more. than handling

losing a someone just sale think the So to I down street. necessarily don't we're

So probably position, we're I better think in quite frankly a

James Hardiman

And for last it. just Got question then me.

I Obviously, A, acquisitions you've Well, total some us you the give two the what's -- a sales -- guidance had sales assumed? can total sales year. past same-store high-teen guess this about think I As in questions. number

here think was about first serves, what's I number? was guidance in the it about does And for quarter. in was the a benefit memory what total I for should sales growth? quarter, the the growth headwind X% think So ASP think that that but how I component sales ASP same-store If -- second year? assumed a the it to full

Michael McLamb

sales Yes. day. at to going I number Actually, driven mean, the my units be be end sales high-teens a growth right overall have that's it'd total don't now, at right by fingertips of be the there's tough -- a there. be going of that continuing that speaking the a to demand is exact mix to AUP it's component to see that's going to the little same-store the which But rate but of unit-driven, out I to predict. we're

Operator

comes West Our of the from Research. final question line Colton with Longbow

Colton West

the Congrats quarter. on strong

Brett McGill

Colton. Thanks,

Colton West

back were to I do to able with, if the next that the meet out that getting would Is start be sort place to And you level XXXX few there? see happen be XXX,XXX guess, required of in to get that retail there capacity sufficient in industry if to level the units so, years. demand to of of annually?

Brett McGill

That's actually a great question.

people mean, back we boating I think on So question. the there's there good manufacturers does that see That's industry the that a have Does does. so the those gone question. been getting and I offline. believe the and families industry and forth. We you in capacity? We what I yes, friends is boating. don't see anybody believe have the to see their a tell that, it levels. the see many I for to It's going out we demand. industry water good

expensive molds to to that that time manufacturing Obviously, physical takes stuff that I get facilities. terms the But the think a it. question. build all does and facilities believe don't to it up will it boat right and/or open boats. So team of it in and it's add great the the I

Colton West

Okay. really matter of Leads, like around, you're even more And doesn't all even you growth. tough the what look where like? mentioned then to much traffic, mean, really XXXX year, that I same-store you it when levels sales web I against of comp pretty mean, these gives about right? you comps confidence able But you strong the sustain going quarters, is and to what think next look. guys demand

Michael McLamb

more drive their There's waterways, on layer in it's a really guess. upgrade. waterways a that Florida the There's getting Yes. are lifestyle. it's where It's it alternative family for enjoy boating people and That's the friends are as of be close basic to seeing The many boating. there if long and and their with truly in open, canal, basic have to boat, to using by are their But it's we they're then new just a customers great -- that lifestyle, sees involved. but weren't out lot. course, They're People And it's a using as seeing. real we're stay of start boats want will they're packed. and loving everybody to what that canal and people answer, a as turning boat, how wondering out new you stay? infectious. a the this people home And

Colton West

March maybe come see Or that to able was months, Yes. I pretty market come to see maybe starting that off-season And retail little inventory then XXXX, in is back the those now bit a are buyer? but that who buy first-time buyers in momentum quickly. didn't reverse still being the fueled number the primarily you up by to probably

Brett McGill

little. It does move around a

that buyers order in buy have on level remains they got had are wanting. that didn't remains a those new of boat and had was It of high. some finally been they what -- But boaters We still the high. XXXX pretty coming seeing in what

Operator

remarks. for back closing the I'd like management to to turn call

Brett McGill

speaking And thank both next everybody, you questions, out. to reach call forward free look are on any joining available and feel you Mike I for the Well, our quarter. you, to have all if day with we'll today. And

Operator

gentlemen, this teleconference. conclude you for and Thank does Ladies today's your participation.

wonderful and day. You may disconnect time, your have at lines a this

MarineMax (HZO) 23 Apr 212021 Q2 Earnings call transcript