HZO - Earnings call transcript Q3 2021

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Operator

Good morning, and welcome to the MarineMax, Incorporated 2021 Fiscal Third Quarter Conference Call. Today's conference is being recorded. At this time, I would like to turn the call over to Dawn Francfort of ICR, Investor Relations for MarineMax. Please go ahead.

Dawn Francfort

Thank you, operator. thank quarter joining XXXX and MarineMax's discussion everyone, third 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 ahead, Mike? go Please

Michael McLamb

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

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

Brett McGill

you call. for Mike. the thank you, everyone, joining and Thank Good morning,

will share growth from color Today, will record outlook. our discuss financial Our their in quarter Mike our detail updated margins, of scores. to shareholder record sales, and plan, more results Then, XXXX record of on and and create third results the in XXXX on value our very promoter and I'd profit quarter like highlights financial productive team discuss provide and which produced beyond. continue net then continues strategic They set our exception. was to records with that, no third performance the record to our top

results Let our quarter MarineMax performance. our both and which of and touching strategic our sales a team third the key in to the me traction about proud continue and expectations, continuing gain excited on with resonate for by with level quarter high of especially exceeding execution start initiatives, on I'm I'm customers. extremely earnings

was We have X% a along and we consumer boating sales lifestyle. a same-store a top consumer demand perspective, record the a sales is driven same-store by on growth, ago. capitalized a on solid sales top same-store favorable of spending a with backdrop XX% seeking XX% continued nine-month delivered sales of up robust earnings The and growth on growth which ago. XX% From was growth year year

utilization and Our significant with our growth. digital platform sustained the of driving product is diversification along geographic effective

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

from are Given industry we of and our continue benefiting share global believe scale, market on available we the our growing to data, position, market and share. gain we based

strength into leverage gross sales our over year, insurance, most our technology, attributable and have half accelerated the ability margin execute and This first strategy, quarter's against the brands to June driving of produced to brokerage. the storage, quarter XX%. categories profitability. to on focusing converted services are on that including to The which we directly built our revenue products to leads parts, the is our investments and margin operating prior across growth continue and in performance is We XX.X%. meaningful higher of being marinas, increased our enhanced We and margin in finance and profitability businesses in gross

quarter, expect expansion to acquisitions; of Marine Cruisers of contributing operating gross and $X.XX. share expense aligned earnings two and control are record In and outstanding the to further margin acquisitions have to we leverage contribute and expansion Nisswa Yachts to over our the XX% with led recent Additionally, of and our strategy margin performed per good most well this our growth.

Now, and long-term let value the me our beyond. shareholder XXXX in strategy to and growth discuss sustained confidence that will create continue we have

vision significant We products best creating exceptional making services, progress of are on customer through our technology. experiences and

remained teams these sales resulting initiatives, in Our strong on and focused margins.

uniquely this positioned We are come. growth to for to years drive

disciplined on We and valuable investments, company Supported inventory culture. will our locations, the premium by one finally, global to presence, has service, a service-related grow market of acquisition brands, a well-capitalized as industry-leading businesses storage, allow will services broad adding strongest estate in and us customer balance will being and of technology to continue by in having offerings, strategic ways a accomplish continued make this management, marinas, many we industry, in acquisitions, asset-light presence, through our allowed strategic real commitment exceptional such and manner. build The manufacturing additional combination sheets the super-yacht businesses. geographic our strong accretive dealers, global to

to into competitive visibility our remainder The strong the shared advantage is have growing and as our leverage well-positioned customers. we XXXX. confidence fiscal backlog support demand-driven outperform to scale added XXXX there well as a inventory our the relationships, size deep nationwide our Also, of to with our and no serve sheer demand. us that strong balance of manufacturing question to sheet we should provide for continues we are continue and that We

with are the our the operating the on combination coupled in sustained we reflects have the third-quarter strong in fiscal to result significant that start flow will And in business results, later call, demand, I'll quarter leverage update, the the growth to full-year more the This confidence we and new well discuss to great the and XXXX quarter. and based that look in flow Mike build will and we on on raising our beyond. again believe guidance. of detailed ahead consumer our product another backlog we with generating cash Mike? comments as driving ask We future. provide As will XXXX

Michael McLamb

fifth which significantly outstanding everyone. good to year's our for last again, And morning consecutive Brett. producing thanking quarter, I'd by June quarter. start Thank record like topped you, a team

For on the a to our top was over demand-driven Johnson Northrop $XXX of growth has the strong SkipperBud's, ago, & Overall, XX% generally been acquisitions all of results and X%, plus grew quarter, revenue which the we from to due Yachts. Cruisers largely of same-store namely, across growth products. XX% million completed have sales segments year

year. reduced expected, resulted chain which low to in As supply challenges the versus led our unit have record industry sales inventory, overall last

our and increased However, approach categories. drive production resulted broad with unit price. selling backlog growth This product partners, from in our with of greatly a double-digit were insights positioned key portfolio we coupled in manufacturing our many of visibility, our to average expansion

strategy believe to well, continue work we as ahead. also will this We move

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

the global our years insurance is improvement well last from with Margins boats, higher-margin Our multiple as starting initiatives services of & and margin to business, over used contributions clearly Johnson segments and and the with Europe. businesses, the finance, rose would and drive our storage, several as working. including growth charter We business brokerage super-yacht to Northrop is Yachts. Fraser that reopening see businesses, super-yacht note new

September much-improved expect we to continues, charter and August would compared reopening year. last season a the Assuming

related the commissions, was trends sales track. increase again rising Regarding SG&A, due of are expense the and Generally, recent combined on acquisitions. majority with the to

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

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

For the the first of few just months nine a will make I year, comments.

exceed Gross by margins Our increase in XX%. comparable store driven revenue exceeds sales. XX% a $X.X billion,

operating Our XX%. leverage is around

nine Our EPS is months. at impressive over EBITDA very is and million, $X.XX a our $XXX

our to balance on Moving sheet.

We quarter-end. with to cash build $XXX million over continue at

inventory at $XXX million. Our was quarter-end

a SkipperBud's our Excluding and is near relative basis. inventory Yachts, low levels Cruisers historically on

this to growth visibility manufacturing from have with coupled backlog, efforts reasonable it we to However, our reiterate we our us partners. like allows quarter. drive important that That, to direct our did is

sharply Looking $XX and we due at borrowings decreased due as the the generation. million a to lower new setting cash liabilities, inventory to Customer our tripled almost as well record. over are to increase financing, deposits in demand related seeing, short-term

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

$XXX is worth million. net tangible Our

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

trends high-single-digits. the for quarter June expectations The XXXX. guidance in estimates exceeded Industry industry strong. for is to remained and Turning unit growth retail XXXX

annual comments our same-store This teens. be sales expect growth quarter. last in We our the high with to generally consistent is

earnings the in year, rise the guidance the our we in which of per by share our bit In gets as around Given higher do shares, visibility, results the outstanding to $X.XX to in range strength which for estimates to the a fourth a June $X.XX. quarter of guidance rate range. tax are earnings higher we this and quarter, demand-driven pretax summary, dampened of well as XX% earnings expect raising EPS

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

an updated in Our implies XXXX level excess of $XXX guidance million. EBITDA well

Turning with backlog is to same-store current at growth sales and July will our positive record trends, levels. close

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

the fiscal year, I'd While we XXXX. look would current additional to some provide share fiscal not we context typically perspective to beyond out like as

side with and partners anticipate of same-store we our demand we growth backlog, in the have remaining very and strong, XXXX. business manufacturing with With sales our the do visibility

back Brett, I'll color turn for closing those this to more around Brett? comments, on our some quarter provide will fourth comments. We call. call With the over

Brett McGill

Mike. Thank you,

are we pleased to momentum. our to business results, today's build see in evidenced As continue

sales. promoter team's customer Record coming to approach in and underway, to high performance realized of impressive satisfaction We is show true even which with same-store through aligned to of work committed fiscal Our the drive high show exceptional is products services, continues and remain performance that included our a excellent repeat to execution and business. fully years. quarters still on experiences, be in teams, the last customer-centric months our levels year, net of technology. creating top our first scores XXXX strategic record very of Much nine the benefit

for to call let's up focused that, will questions. brand create long-term will We the opportunities strengthen significant businesses on staying with strategy shareholder expansions while our business, to that overall for value. continue and higher our uncover margin operator, open And

Operator

question-and-answer now with Joe Instructions] James. session. Raymond [Operator ahead. first from will question begin Please Altobello The We the comes go

Joseph Altobello

Hey thanks. good Great, guys, morning.

are it on you positive comp growth is, I how with and next glad comp July about going normalizing higher you're year margins lowering that And hopefully expecting potentially a with like of concerned side inventories? costs as positive. year motion very flip the next guess levels higher, So sounds hear well. to

Brett McGill

say Did promotional? with you

Joseph Altobello

do. Normalizing they year. assuming next Yes,

Michael McLamb

getting think for a - very the we're if don't from to Inventory the - industry next fiscal prior manufacturing is see with low XXXX, it's continuing returns is we incremental. environment We again be a inventory to different going that I partners, take the to growth levels. coupled it levels our anybody to past while through and demand, runway see return year, XXXX. promotional lean a very same-store but expecting insight year the sales very to be for are than with to

Joseph Altobello

super. follow so we're the seen you it's Okay, then And And just number. canceling an impacting customers so, that impacting to afternoon in the cancellations? really lack of someone sales? Have is inventory pick come hearing does I that uptick order up about mean, that if effectively, orders. overall anecdotally, to not in up, order

Michael McLamb

we any locked really cancellations are in. at all. haven't Joe, Yes. People in uptick seen

Now, let's go better for people past, I upgraded in think I saying boat the we season looking larger boat for now hey, right. next are there on if boat, people dynamic right? order the looking past, people a in our out that and and always want have we think next at boats, - is day it want boaters one season. say, They get a there it would

patients hook order and no to - proactive and as some on So canceling all. that's the future them in we're of people figuring out being their keep a at there is purchase are it creating more itself, about way but

Brett McGill

But even of your first was, think sales answer think that I the question higher, yes. do to be I that part with is,

that. I dealer think you would every tell

the our today. strength of customer and look backlog, demand our at deposits just You

that of the So trends if I some chain stronger challenges wasn't the - be supply industry it's it seen. even think would for

Joseph Altobello

Okay, you, great. guys. Thank

Michael McLamb

Joe. Thanks,

Operator

Hardiman comes Securities. ahead. from Wedbush Jamie with go The next question Please

James Hardiman

Hey, good morning.

similar much finish like seeing Are little trend is of third expect declines pricing? to So quarter. The I function there? any sales, pricing, positive. like-for-like is, the but was price you boats. - drill in you through for price are double-digit then in the that how really we right? growth wanted the higher the in how you're AUP bit a think Should big customers walk versus you to meaning going it down saw units us increases? to customers said lower that strong Maybe on of the in at walk - you're the July boat trends a much And mix, what price said that that And seeing was I some quarter, same-store we of

Brett McGill

the expensive tell James. product. was of terms great it I product, look from from at question, the which which also same-store overall helping dampening and drove quarter, up to what used May. mix in the you, incremental an environment be And trajectory, Hey, XX% are part, thinking right, increase. the then, perspective on to I if to in July more for seeing, current if new pricing margins, X% industry around sales, your but would be you all of X%. were overwhelming industry, product, that the perspective. is They demand a currently, industry of it'd were doesn't comment of on up a part units And - to April, in was the think small the I the change XX% seem about majority my at The pricing that in And drive we commentary, larger remember

posted get I and going is of units with think there published, supply, in when to be July. print negative supply, - think I of a probably June, June because because on

sales so, AUP would teens, in still yes, high same-store increases And we still be the targeting in July. we're high expecting in then

James Hardiman

me a Do growing actually respect with primarily think the on sort function that or primarily I it. drill little roll grow - AUP? XXXX the is that units have forward, that just a that bit. that let can Got in confidence same-store sold down by in confidence you sales XXXX. you really And of maybe guess, then of momentum in question encouraged to

Brett McGill

our on partners more from next Great sitting feedback quarter. our all into call And get insight manufacturing the on and here today, we'll we question. obviously based and looks on But which is can have this There's in news. our pieces next it growth unit of based a year we like what like, have that's moving but that lot look manufacturing partners. that, great it does

James Hardiman

Really encouraging.

I'll thanks queue. guys. hop Okay, in the

Brett McGill

you. Thank

Operator

Please with from question The Wold next Riley B. ahead. comes go Eric Securities.

Eric Wold

Thanks, guys. good morning

how the shifting ability on of to one, kind to kind would in-person. like cost great your if you that your like capacity and and We in down side, boating kind couple guess, kind of I managing like I a of or of get approach guess the situation, normal questions kind you get you look full somewhat? spending to Just again, we of it guys to pre-pandemic, involvement versus clearly in look items back environment, a all season purchase back the job pre-pandemic. was you expect boat if shows where be as will. going of I did a to to desire open, would scaled pandemic we that in large online did people and

Brett McGill

mention detail, first. Now, more I'll I'll a little Mike comment let but

manufacturers show more to with much a working really way a the back we're shows to promoters than different out in way. think I cost to effective figure get and the

don't definitely in general want That's the old of expense don't comment. want allow lot lot back there time, we going a a of structure. to to for to that's So a return it just reasons. take to get to work but to We

you can just Mike, add? So

Michael McLamb

the an I - after top SG&A sure. incremental back remember year for fall, and last major the No. remember the that Lauderdale other in be side to really I at in quarter head. no of marketing things, up would show we increase going my there But December can a shows did Fort start if right, shows, we and in the If

would it the in if there is of be probably half year. back the impact, So any

Eric Wold

way more speak, of that moved about going category to savings from in it? or cost pocketed, If effective is cost And the cost savings spend? of so different a

Brett McGill

costly got events different Just be now and it like are safer. just it year, in towards Getaways marketing events to more holding wasn't We you other much just and/or past in-house put efforts, because this pocketed. all

So to all not but of put the money it. we work,

Eric Wold

to plan was the question. of no strategy until for are your on you And around a What then, cash meantime, the to years? to quarter, now what come business the XX months, million forward next got inventory start the catch but strong does floor flow the Obviously there going what much bucks. assuming financing over last prior couple the with that did books is will finance back up kind of obviously in strategy the XX inventory like the in around end, you be your versus of how

Michael McLamb

Well, you we a may have release seen, week. out last put

even facility period that I build. our was see amend years. not time time in it to that going to mean, they're for did do we beginning flexibility I'm three build give think we we I finance the I another to period. in before, and think place to to don't in that wanted levels sure like the were think we the facility inventories I but how that have back business. the it they us with

industry - the plan us. very returning reasonable kind and are accounts which So, I I financing to overall see some us I a basically would payable, is for flexible, see A financing facilities very floor facility attractive level. of

it. like we So

not of the So but there'll to be that much it be while. for some there's of future, a going

Eric Wold

Sounds good.

Okay.

Brett McGill

you. Thank

Operator

MacGregor go The Please ahead. with Longbow next from comes question Research. David

Joe Nolan

Hi, for this Joe David on Nolan is MacGregor.

Brett McGill

Hey, Joe.

Joe Nolan

top recent would a just of other vertical in direction what prioritizing? the you that; just boat acquisition OEMs? was segments whole on and wondering, integration of I could so, the planning your are Hi. talk and of boating any Is company? strategic into be you plays acquire also if you that then, to just plans just Cruisers the the about Yachts, And that

Brett McGill

business built joined MarineMax that talked rates sea releases Yachts when a and Yachts came the We're decision about lined Cruisers that, other along the with with the was our for at the an proud Cruisers. production just fact went the of here a away product family. in big that We've do have opportunity segment had that on of with in opportunity impact really that available to on that question Great and future and cruisers up, levels secure our a the the way the to substantial could Cruisers grow in American to it. we

a pattern great opportunities with other far at look high acquisition growth, they from - upward great us. priority not And but are strategic a there, as So, as for manufacturers, see will it's we out there Cruisers. is that you'll opportunity

will they opportunities we as come look some However, up. at

Joe Nolan

that. Thanks on gross for margins, just just could And gone If understand then a it. wondering Got prices boats. talk quite also about have up the used we bit. I

Just wondering how business. that's margins impacting the in

Michael McLamb

Yes.

it's just pricing and margins. product new on had used. side it's on and used increased demand new is has third I and If margin probably our a which increased increase, helping So, boat our of estimated the

increase other the the margin changes in business The around F&I, the made is we've storage. to really

that made add acquisitions that all our these Some margin. of we've to

So and we the are new increases. used from getting margin some benefit

Joe Nolan

Got I'll it it, pass thanks. along.

Michael McLamb

Thank you, Joe.

Brett McGill

Thank you.

Operator

ahead. question with is The Please from James Wedbush go next Hardiman Securities.

James Hardiman

It back on. I'm looks like

questions. than in looks versus margins just a manufacturing And quarter, think year? margin couple operation. retail in how better of modeling about over overall we of it had do the - it business? of So, course third like sort operating that The expect should margin we the business, gross Is that that full

Michael McLamb

question. Great

are retail I the the within manufacturing that there operations costs gets segment other think could additional our associated XX-Q with the some reported segment. language be filed, are around

the bit so And queue. in more explain will a little it's that what -

the like high the typically are manufacturers going perspective. from EBITDA to an be Cruisers So in single-digit

it's the as perspective, - grow a somewhat margin plans to some you lower forward start operating those the back will a a their margin are historically, and from margin when business stores of plant coming down business stream what - and of the we Obviously, earnings that looking happens getting when new sells from one little up than well. that of our growth. you online percentage Cruisers. of their So, plans That's our to that. GAAP our you that's the with get, look with a as earnings end manufacturing basis, getting a From as

get the, So, retail the the we'll margin. then within get our margin we'll manufacturing obviously, store,

a that So the do like we doubling kind on business get the of of from Cruisers. we margin

the similar I probably the way will few consolidated in I margins. industry your side recognized. that our Margins questions, of is dealers range, be all which sure in but will answered to a what so And our overall tend XX% if overall I'm think. on them, the had manufacturing - to not help

James Hardiman

Yes, you did.

to margin? And both so, should EBIT being, guess and I the on this a I margin gross about accretive think full-year the basis,

Michael McLamb

That's correct, yes.

James Hardiman

as And about about acquired, business? to rate that, $XX I similar a revenue, margin you million we how think say guys that question that you Okay. similar recent deal organic Nisswa, should well? seasonality the think in then, at is similar your And growing XXXX if that structure in a there

Michael McLamb

ahead. Go

Brett McGill

business. I'll Nisswa, great of to higher part it really things. team. addition storage is of on margin dealership, good are what their good component you made They our remind that their And focused

can So, comment - growth we to bring we more. they're very of improve let see other synergies But that's insurance But other hope and would dealer some like Mike finance and business. pieces the seeing helpful. every and they

Michael McLamb

they a guys in of And good low, business. to Yes. a their in mid-single-digit above They - you Minnesota. in that. running business. to These probably breaking that asked maybe obviously, great historically the be have storage typical pretax, sometimes Great, good they is run going about from were very team. dealer, a because seasonality, high-single-digit, even profile, here really been But are

going more summertime, XX% they're to is going in of So seasonal to in or be will and to than be quarters. They be going wintertime MarineMax. March is the the more year be XX% December - the

James Hardiman

you, guys. perfect. it, Got Thank

Michael McLamb

Thanks, James.

Operator

closing any the over concludes Mr. our McGill to remarks. would session. back This question-and-answer I like turn to conference for

Brett McGill

today, available future updating the joining and for quarterly I questions any both our And Mike if the on great a look Have forward you call. on are additional have progress you again we next to you, everybody. Thank call and day.

Operator

attending today's Thank The presentation. for conference now has concluded. you

now You may disconnect.

MarineMax (HZO) 22 Jul 212021 Q3 Earnings call transcript