HZO - Earnings call transcript Q1 2022

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Operator

Good morning and welcome to the MarineMax Inc. 2022 Fiscal First Quarter Conference Call. Today's conference call is being recorded. At this time, I'd like to turn the call over to Dawn of ICR, Investor Relations for MarineMax. Please go ahead.

Dawn Francfort

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

Mike McLamb

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

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

Brett McGill

this Mike. and And joining you call. you, Thank good everyone morning for thank

these of achievement the MarineMax many all, the record is record level in I'd thanking future hit great and years as to on profitability. the supply the Customer balance by quarter, a for earnings given it by Promoter most our new drove strategically chain and financial another discussion detail our Net of of how from we well-documented drive season, sales, in results followed year. Satisfaction and On were approaching greater record. start the highlights plan. will the Then, our results like a peak the me flow, Mike sales achievement important Today, which inventory of touch some color top of selling financial our extremely will quarter. discussed This and are lean of continued cash issues. QX on strategic results Let and important first team their growth focus record provide share the commitment, great growth results,

selling continue we year expect build fiscal that peak the on strong confident long-term and season With the to ahead will we start to remain value. enhance to shareholder our

the and revenue December margins we our growth, per pleased enabled of XX% model that produce and $X.XX. share I'm growth. gross margins robust Let where we me quarter generated again earnings exceed extremely on expectations diversified as to record XX% touch record us earnings of

strong to with growth unit driven was same-store particularly chain in supply given our quarter, Its challenge. which industry-wide our to is For that note pleased X%. primarily growth, sales, by notable increase the are rose which the important we sales same-store sales an

the boating across on industry and which embracing customer demand strong same-store by of a This million to all lifestyle. growth. region. geographic expansion top categories meaningful sales our The drove sequentially experience grew highlighted Marine we Additionally, $XXX strong continues is and essentially environment consumers exceed brands deposit,

as platform. geographic we we we consumers we on broad continues through to actively data diversification believe headwinds industry on orders. improved Our scale, our benefiting quarter, our product boating a From perspective, customer presence, the team Based to capitalize supply gain ability as move continue the share. digital the to lifestyle leverage chain available cadence seeking fulfill and

up-to-date materially and manufacturing XXXX. will work Accordingly, most information continue the the late strong forecasting, the to stay likely with while in experts improved our not working to we closely many best supply demand. fiscal As are until environment choppy the satisfy in industry partners chain for

let Now, peak important how season. the to we approaching selling are me turn

changed customer COVID and serve customers. our aspects all to of are expectations prepared including We well-positioned has boat shows.

leverages Our generating capabilities adapted our and exceptional stores that team refocus with and results. our has marketing online experience spend greater digital

manufacturing inventory Many continue brand competitive our relationships and to mature shared continue edge. deep future nationwide give Our a driving incremental accelerate and should which expansions our growth. us within model, retailing to of keep

underscore margins. ahead, deliver strong the build With fiscal exceptional gains, the also and customer share want we on growth largest selling and experiences. sustained market plan how year revenue to and expanding it our to season company-wide to our start strategic I propels expect growth

to basis execute by our points we XXX point, To record increased an our performance our This strategy operating gross is quarter directly accomplishment historically smallest to to year's the over has growing quite of operations businesses. have our of quarter. that strategic service, higher These margin structural last our expansion enhancements finance substantial our higher our XX%, ability many industry. with This gross margin to margin acquisitions attributable in our margin typical recent in than and profile. resulted acquisitions our and insurance, had storage a of profile is improvements gross in brokerage in combined

and December gross point in of in resulted businesses record combination over product in we XX%. and to levels gross aligned Powerboats generated and the margin in higher quarter margins best with quarter. the very meaningful the produced they family. acquisitions bolstered strategy and we These SG&A of expansion one margin by revenue over the the as contributing the well drove of integrate our our that operating quarter our perspective From combined strong The are of profitability EPS To an added controlled elements leverage Additionally, was Intrepid record management increased operating a acquisition, margin impressive our quarter expense the once margins million continue XX% expansion perform margin quarter. In Texas The $XXX margin in leverage for quarter. the a that focused expansion. and $X.XX significant again to MasterCraft at to XXXX. expansion of in MarineMax's our was

opportunities into best businesses and many these growth to sharing practices believe in ahead. integrating exist even years seamlessly and drive the resources for greater MarineMax are We

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

make to record experiences creating Promoter is comments. on best products our our I through technology. continue exceptional evidenced services, by my significant vision Satisfaction This scores customer opening We Customer and Net in progress of mentioned that

remains focused team strong Our and in demand initiatives on these resulting margin.

in estate valuable by acquisition culture. one strategic make our will build a actively We premium industry industry-leading will we investments, unwavering manner. market through of real our technology in finally, accomplish sheets to the strategic strongest exceptional service, this customer presence, management Supported strong global inventory and acquisitions, company accretive commitment brands, our disciplined on locations, the balance

cash Our marinas allow allowed and manufacturing broad by service will grow additional businesses. sustained global on consumer leverage more result dealers, to and continue in geographic asset-light and and will strong to the quarter. with I'll We well And ask offerings, adding operating beyond. the related significant coupled with fiscal detailed Mike demand into storage, to generating growth XXXX comments combination believe Mike? driving presence provide flow has that of update, us

Mike McLamb

sales our record I'd again quarter And start driven strong growth, expansion Thank leverage. same-store like gross thanking operating by morning also good great for another margin and team to everyone. producing you, by Brett.

to grew our from revenue million various quarter, contribution to XX% due the the growth sales recent same-store largely of acquisitions. and $XXX For X%

is of the industry-wide quarter has primarily takeaway unit chain our strong Overall, demand of sales our by growth results which our continued growth, products to post impressive was generally same-store already from is driven supply X% top this driven market. challenges. all been and big on comps. every Our across very global segments given growth A strong comps ability

X% years, this were of XX% Our on last also the quarter which unit XX% largely growth driven. top was and two

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

margin boat Northrop and margins new to these organizations was higher several in Yachts. superyacht factors. gross performance, storage Johnson record as our of brokerage a as in are & parts Among margin business and sales, finance, Our expansion services and used impressive growth global due and insurance on well Fraser improving service

Only in The including was our of a margin of acquisition and businesses. a the strategy. from margins. for Our our margin new focus ours of remainder businesses improvement have third expansion some came higher margin been about higher growth quarter used time in our

Regarding on pressures track generally due commissions increase the the to sales annual with and the overall in an SG&A carefully. of majority combined related but again is the the believe on increase we inflationary was recent SG&A, watch basis, acquisitions. We will

pre-tax Our operating leverage quarterly which in $XX the million over strong smallest very of earnings quarter earnings setting quarter. about XX%, in our growth with historically milestone was another drove

the limited quarter. income versus contribution completed December XX% two a share in These net results we in acquisitions record earnings from a include year ago. $X.XX quarter the and both rise a EPS $X.XX over Our generating per saw

million Moving balance versus we cash over on with at to end our to ago. $XXX a industry-leading year million continued quarter sheet, build $XXX

million to inventory Our but down XX%. at $XXX excluding the from to is XX% acquisitions our end closer inventory last quarter was down year,

predictor XX% around generation. to cash while lower Intrepid. to orders liabilities, Customer as the with at deposits, borrowings our strong $XXX Looking in sales over to and due inventory near-term a the timing as and sequentially contribution million increase related September well of due increased of the short-term financing, along not XX% decreased demand best from from

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

net Our is million. worth tangible $XXX

a formidable been advantage as today continues ever capital to strategic providing in expansion for more balance it the uncertain has and Our always arise. while protect times sheet than us opportunities

industry continue remains to for retail are around outlook for chain. Today, we in Turning quarter challenge supply our December to remains from the exceeded trend told The partners, XXXX. we fiscal what given The expectations strong. expect and growth assumptions XXXX. unit manufacturing various being XXXX certainly in the our demand

clear the challenges. it exists also that due in visibility is the ultimate supply However, to uncertainty chain

Texas mid in growth through with single coming same-store and expect As seasonal two, to the supply of prudent as flattish annual move able combined This We price increases we teens. successfully total around expect will including and do chain mid selling quarters. in unit the growth. the through the unit MasterCraft, annual quarters. remainder it's are hope digits, improve have Cruisers to we Intrepid acquisitions we the us Nisswa upside growth should the continue move to revenue along we to allow our such, average and sales provide with more think And

the do the inflationary as gross call, on we our expect noted marketplace margin pressure. modest in pressures last Given

to our but expectations for prudent in it's We to believe mitigate now. have include pressures, leverage these

also earnings in $X.XX plus per to complete. modest low leverage share $X. is historical a rate may a $XXX before other range we million. our of over guidance XX% of results acquisitions share This end of XXXX EBITDA Our an implies range tax of that any Using in guidance increase the fiscal

with end same-store sales to Turning growth to our positive forecasted current trends, record at is and levels. January is backlog

Brett? As Brett back generally industry some we remains demand elevated those comments, and we over said levels. the for have closing I'll to comments. strong With are outperforming call turn these

Brett McGill

Thank the MarineMax continues surge embrace benefit capitalize you, desire the Mike. boating on and and lifestyle. to of consumers demand to in the

fiscal shown create team's execution, a boating. has the dedicated a continued very building the same-store lifestyle to top Our the sales year experience team to that of and of on a original of customer passion ago. for to is excellent vision impressive was performance a The better by start even creation MarineMax year

brand margin hard success long-term strategy financial questions. And open additional is remain company the work create that, to strength shareholder this of let's the our with up and the continue call will value. higher model. support to committed expansions our and the operator, long-term to to for to this deliver pursue businesses We We and on of

Operator

with Our Wolf from question proceed [Operator comes Instructions] Fred with Research. first Whiteman the line you. your Thank Please question. of

Fred Whiteman

just can on But a guys. delivery Could unit around the tough which question. moved unit you included about Hey, touch -- of just you morning. I Thanks Good for January positive. sales predict you the that talk It's same-store guess to to be Maybe number sort that's it's expecting to the commentary, lot. start. that in cycle. are

that? should we think how about So,

Mike McLamb

positive, we know growth January Yes. tell closes Good would really the to actually a going had growth quarter. I good right I as really I is don't chain on up. -- we some activity some quarter which had supply it's give we're question, say if that now, sales unit month-by-month we in to the that do the had And have don't same-store recall Fred. going be how We down. we've up in or But December you basis.

each think the different any different message manufacturer. and out However, with still it that is, some is I like seems it's there there's day problem given choppiness on a

seasonal probably these with I we the think get most more move year the uncertainty. of flattish think quarters, I makes until our we through So, sense into number until further guidance the

Fred Whiteman

sort comments of of set here And that guys on sort the the sense. long-term had and Okay. M&A this buy-back I the on the have could medium on performed, positive you And and lean I of been into business. for active both the That that's front. guys think know to But makes especially historically just the year. the outlook sort to expire stock you valuation touch the just potential since March has of in given how you

So would any be thoughts that helpful?

Mike McLamb

Yes.

would You our XXbX current prices buying a would we before board about drop. aware it plan can And expires. in imagine as And we're have least when that reactivating it be be expires. to talking we plan place that plan the at

been periods management teams. in long and little however that, been term good I'd bring about of look it into company a the share should good been dates. those businesses in gets there's public buybacks. those strong do dislocated we've valuation a to our always time into be And the where the active the for of and time aware with from more we're company continue to strong say at reality. what So, times We other long we've

right as long to trying now perspective, well So, the term. we're it's take a happening company balance of a what's from valuation where as

we'll it term. and buy be opportunities with our and Obviously think makes long I expand at to So, to stock both back grow discussions going the looking business avenues. different the for some continuing sense

Fred Whiteman

Thanks Great. guys.

Mike McLamb

welcome. You're

Operator

the Wold with your proceed Eric line with Riley from of B. next comes Please question Securities. Our question.

Eric Wold

dealer requests around of the boaters of kind kind Obviously, supply numbers kind you sequentially. chain be traffic, seeing anything influenced orders as in it kind where deposit great pause past you. of are sales, deposits. growth give up. Good would of Mike. by somewhat gave cycle? of of mix delivered of dealerships, I and time to opens morning, mean, real obviously the anything just anecdotally, same-store you're kind Brett, by Thank into which can in great terms coming first-time market satisfying choppiness, Maybe Maybe stock getting terms OEMs in that we a of OEM, demand

Brett McGill

We okay, if, settle we numbers this is new see of which Yes. we're the very for website monitor it's little those it demand buying daily when into first news Eric, percentage. still It's a people close to Brett. is a boating. lead going be you is on And to and it website watch all great and a look down time will the to But basis, everything almost great on literally traffic, kind that question remains watching bit. boats. which a still those continue listed strong. -- things to strong, generation, We watch industry, coming MarineMax high, just

get if only the wait I would really to you, boat. watch a is is model. so, of a it's activity there to get extremely for tell some out long we some would boat that call And still time little models, common, just that But hot can't thing that and an those I have models around frame you have cooled two years, we striking. off, those because this

watch So little bit. a we that

So, to traffic question to is in your summary demand answer be finally strong. very everything and continues

Mike McLamb

marine deposits the up actually forward. I XX the a I'll from now are for what deposits good till remarks XXX% XX month our - customer ago that from us during And for and and year our to it my were Brett let saying. leading add prepared industry a are said comment I'll then period XXX% one going pretty and up months

up XX% are about from Our September. deposits

we quarter growth. a three from months up actually are just deposits where our ago sales produced same-store XX%, So during

about the delivering by one Deposits actually we math sales line how X% that think build So have to are balance deposits boats. sheet leaving as we're adding works. XX% the and growth. also quarter We're deposit same-store in the

retail in should let pretty the good recreational environment. think marine still I know is demand people

Eric Wold

already Perfect. was inventory sheet getting Is that you your the Inventories percent stock hit transitory final basis up of And of inventories back question. that kind would floor? like on to that your out then of of balance of this frame where are them kind Are quarter? on How kind XX-ish sequentially. just inventory a kind to kind of versus be? floor boat going kind purchased you'd where percentage you buyers maybe in

Mike McLamb

I add our of actually up was expecting is question that sequentially, a from so you some, Yes. or locations. about very inventory when but I'll there say, -- in building increases all modest

a inventory that more deposits that year from now have pay deposits, are ground manufacturers we do a months for or bit also now. as because our customers What's us on number from We some coming seasonally paying the little are deposits, are XX boats today. in

So that's in there.

today. from something technically, can we boats you're we December not that's So coming right, the had suppliers. quarter, international Then deliver in

on So hopefully but in -- that quarter, to oceans ocean. delivery is coming they're then, that out actually the are March they're can't the and because deliver literally again us for right you products so during the

it -- like because it in we environment. it's of actually stores, pretty may me, our things was trust those still lean in inventory So, the handful look made more have store

Brett McGill

When on for there -- sell each maybe showroom floors but -- and look northern in maybe more -- you market. what's available the there's it call other not boats them then I'd store. they'll at entry shy break pontoon entry Yes. less level, in say, of that some down That the boats

Eric Wold

guys. Thanks helpful. Very

Brett McGill

Thank you, Eric.

Operator

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

Joe Altobello

morning. guys. Good Hey, Thanks.

Eric's regarding First question inventory. the follow-up is on

inventory end flattish? you year or versus Given your XXXX with revenue up guys to expect the guide for can XXXX,

Brett McGill

what saying, people a what -- are industry of I've talking do question. I kind with is that. about good the It’s gone

get chain sometime is summer the expectation the the better. issues think will supply during hopefully I

really really Although, if knows. sure anybody not I'm

think I going better guidance seeing chain better the if up be you kind out. But backlog yes, I one supply end inventory, little more the some inventory what to think better unit bit end. lean at on gets it the any extremely answer as in I -- just supply then but with does the have inventory going think would gets of maybe I be and technically locations. here of a and chain think going we growth to little a it our technically fast if our hunting be we'll is more till could if the ground. But there everybody about probably walk as and just still And get bit if

Joe Altobello

Okay.

raise the about What's baked In terms of that that Doest Texas in EPS guide you in MasterCraft by midpoint in the old Intrepid $X.XX. guide? for the number? and wasn't

Brett McGill

year. question. at There's a they that analysts those the baked And a we've used look Good think $X.XX and the was little two businesses make out $X.XX put mergers, there when couple the are from have to full out you to MasterCraft's well. Texas numbers more in Both for seasonal. $X.XX. come Yes. performing I for both around cash

months glad board. asking there given acquire little bit comment did So them the have Intrepid's was for thanks had the less to in quarter, quarter, were asking to also a just of and but contribution and we thanks on it the doing in a nickel, But And them that costs I certainly Joe. both, for two the quarter. than that. of for yes, some that from great

Joe Altobello

last could. if Got just I it. And one one

know of that done you're any to But well it's of fair well And portion monetize do have standpoint. price and waterfront to as that. beyond? real you've more a you amount XXXX a aware estate. plans very do started in I a You of own guys Florida from

Brett McGill

actually I a in -- how constantly look we the different place. sheet at wouldn't say, at there's are we best company, plan we exploring always hardcore and look our leverage What ideas. balance some we're how own But of And We more think is a what bought it's your on value for. lot accurate. real point this quarter. greatly fair exceeds books we our do We estate. the

business. we very for long-term -- a we're great that's So strategy this think

that's to all we're tied is on buy properties a capital waterfront going of see us -- been at try the unique see to necessarily get buy them. think and lot to market. not right going which estate potential I property have a of real you'll valuation, we not storage properties capital And continue a you'll at top I us -- there's We'll up lot that's the great can of of for in ours to do But we our especially So, we're sure. think if what believe.

Joe Altobello

Okay. Got it. you guys. Thank

Brett McGill

you. Thank

Operator

comes question from the with next of Our proceed Truist Securities. with Please Swartz line question. Mike your

Mike Swartz

morning. Good Hey, guys.

Brett McGill

Mike. Hey,

Mike Swartz

maybe just more kind your you think upon had range. is that guidance Mike, guidance, historical predicated leverage of operating I in mentioned on

I the maybe teens to talked mid about historically. think you've XX

did XX% quarter. You this

five I past six quarters averaged think over around the something or you've XX%.

think of is to a So, sense we've late? you mid maybe teens just forward I its that XX of correct think to relative going why seen more what

Mike McLamb

breakout we of your Well, has is a our through strong including margins through I as on late go and Really be if this fundamentally was where model of it point from this flow been arise as went quarter. should margins you XX% overall XXXX - our year update the really through year there. accurate. we hope that think late, business, which more flow is a the we'll mean, be perspective can of guidance successful

to And we we year, able finish different to done of thinking, actually margin changes up storage Then in let's upside just because means which third-ish XX% the used, certainly away done, the higher prudent that like margin finish target as Brett the looking -- of product, have we've think be The and say, early margins on as and does I our I each been been we've quarter changed say, an have that has now, strong XXXX it. it's take has around hope second we're from we company XX% a fundamentally, growing the being acquisitions think that move that to high okay, new little think and made update today we're the start that the business, seeing the in year. of coming probably is to at even it with since year. some whether we improvement I profile. I a if used said got new changing, or of we've I a profile two-thirds acquisitions we're the you think we've throughout end something the

and the to. trying guidance around we're guys to Is changing in what's XX% be able and model evaluate it flow to to So, you all direct that XXXX. give through

So, done. part of some acquisitions to updating through kind it's hope of that of in early years. these we we've we the and this And in year next as be move

Mike Swartz

Okay, quarter, term, year. maybe And and great. on just away, a weeks that a occur related the topic near couple obviously in very didn't shows Miami current the last

So that we I'm costs think year to adding show? relative from how should wondering maybe just just about some last back

Brett McGill

It's incremental the a be point. mean, going yes, think for shows attending. that but country that we're a lot would have there not right on of good we I costs, also around I now marketing some

I So, what think on a we're different we've to. put going on things tried to balance

know. to that this and because a there's full, shows all reasons no inventory you less pipelines going we're year the So, lot

Mike Swartz

great. Okay, you. Thank

Brett McGill

Mike. you, Thank

Operator

next Our line Capital the proceed Please your from Markets. comes question BMO Johnson with with question. of Gerrick

Gerrick Johnson

I was is. ability up, XXXX? How on year consumers assume like-for-like then, are in higher to into I you if models. increases, Good going price Thank Great. model you. that is confident interested price existing prices And it pay increases about morning.

Brett McGill

question. great a It's

on it. this I'd on touched I a in digit on calls. increase times single maybe digit some say, think cases high couple we've double there's a

demand comment is XXXX demand to we're kind And June continue the like backlog, XXXX. on selling June boating at on and that friends contracts what's we're price enjoy that versus there boating versus our of product family like see, out and has in lifestyle I'll today the writing get with -- increases. what price obviously, the looking you're your your make If June things -- a the today what is than seen. And to I and I've the for -- stronger with think increases

continues to it be So, strong.

Mike McLamb

it closely. if our watch prices pricing. sensitive volume We see to Yes. about increase. any watch decrease We as very there's some very We're

and for is the carry. one we good a so it. within we'll And can models boating brands same news there's Even fulfill customer. so, that The many watch need models brand the the

XX-footer they same they a of benefits. maybe wanted features years the -- lot So a and has two XX-footer, ago a great

so, evolve But consumer as closely. the price the years with. we're Just comfortable watching product it hit feels to got point we've whatever enough

Gerrick Johnson

Okay. and single seeing price Then, realize But your same-store sales basically I you're digit this are X% simplistic. increases. if be might units, overly up high

more it be quarter? you're to boats selling So, the priced safe in lower assume would fourth

Brett McGill

technically mix. What a it's it's --

For we the fourth when I waiting of that, we product smaller would that really just boats a greater been them the with quarter it confirm probably on do and it's and have a to their from delivered got has manufacturer. people percentage when

so where take markets Minnesota recognize Florida, in northern consumer matter today delivery their if So on a boat if typically greater it and coming doesn't larger they the down. a and year-over-year If cool as a primarily manufacturer, March basis by the we out of to is quarter we the a degree is. than product of percentage and at smaller typically skewed quarter we it's December But or available is did deliver quarter finished they're The product sale. Florida do. a the then that is is

So, the the as boats some kind the coming smoothed are of line. maybe -- of it's out seasonal some pattern off of the

Gerrick Johnson

Okay. Great. I see. you Thank very much.

Mike McLamb

Thanks.

Operator

are queue. call management no the for back questions like to remarks. There hand I'd closing further in to the

Brett McGill

today. both call all and Thank for I all And joining are day. Mike you the available

questions, Have you talking we with you day. call. next to have our to reach forward great free feel out. a at look any And If

Operator

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

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

MarineMax (HZO) 27 Jan 222022 Q1 Earnings call transcript