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MarineMax Inc. Reports Operating Results (10-Q)

February 08, 2011 | About:
10qk

10qk

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MarineMax Inc. (HZO) filed Quarterly Report for the period ended 2010-12-31.

Marinemax Inc. has a market cap of $209.5 million; its shares were traded at around $8.81 with and P/S ratio of 0.5. Hedge Fund Gurus that owns HZO: Jim Simons of Renaissance Technologies LLC. Mutual Fund and Other Gurus that owns HZO: Arnold Schneider of Schneider Capital Management, Chuck Royce of Royce& Associates, Chuck Royce of Royce& Associates, Mario Gabelli of GAMCO Investors.

Highlight of Business Operations:

Revenue. Revenue decreased $8.2 million, or 8.2%, to $92.2 million for the three months ended December 31, 2010 from $100.4 million for the three months ended December 31, 2009. Of this decrease, $7.6 million was attributable to a decline in comparable-store sales and $600,000 was attributable to stores opened or closed that were not eligible for inclusion in the comparable-store base for the three months ended December 31, 2010. Our retail sales continued to be adversely impacted due to the ongoing economic pressure on our industry caused by the widely reported difficult economy. Additionally, the decline in our comparable-store sales was due to a decline in used boat sales, as our used boat inventories have contracted substantially from prior year levels, offset by an increase in new boat sales in the quarter.

Gross Profit. Gross profit increased $1.6 million, or 7.3%, to $23.6 million for the three months ended December 31, 2010 from $22.0 million for the three months ended December 31, 2009. Gross profit as a percentage of revenue increased to 25.6% for the three months ended December 31, 2010 from 21.9% for the three months ended December 31, 2009. The increase in gross profit as a percentage of revenue was primarily a result of the actions we have taken to reduce inventory levels and improve inventory aging. We achieved a modest improvement in margins in our service and parts business. In addition, we had a favorable resolution of inventory repurchases from a manufacturer whose brands we no longer carry, which benefited gross margins approximately 0.8% during the three months ended December 31, 2010.

Selling, General, and Administrative Expenses. Selling, general, and administrative expenses decreased $2.2 million, or 7.4%, to $27.4 million for the three months ended December 31, 2010 from $29.6 million for the three months ended December 31, 2009. The reduction in the dollar level of selling, general, and administrative expenses was attributable to our efforts to reduce expenses as well as the favorable resolution of accounts receivable from a manufacturer whose brands we no longer carry, which reduced expenses by approximately $700,000. Selling, general, and administrative expenses as a percentage of revenue increased approximately 0.3% to 29.8% for the three months ended December 31, 2010 from 29.5% for the three months ended December 31, 2009. This increase in selling, general, and administrative expenses as a percentage of revenue was primarily attributable to the reported comparable-store sales decline, which resulted in a reduction in our ability to leverage our expense structure.

Interest Expense. Interest expense decreased $619,000, or 42.3%, to $843,000 for the three months ended December 31, 2010 from $1.5 million for the three months ended December 31, 2009. The decrease was primarily a result of decreased borrowings under our credit facility coupled with a lower interest rate on our new floor plan credit facilities with GECDF and CGI. Interest expense as a percentage of revenue decreased to 0.9% for the three months ended December 31, 2010 from 1.5% for the three months ended December 31, 2009 because of the reductions in average borrowings on our credit facility.

Income Tax Benefit. We had no income tax expense for the three months ended December 31, 2010 compared to a income tax benefit $19.3 million for the three months ended December 31, 2009. The decrease in our tax benefit resulted from the enactment of the Worker, Homeownership, and Business Assistance Act of 2009, which was signed into law in November 2009. The act allowed us to carryback our 2009 net operating loss, which had a valuation allowance recorded against the entire amount and which we were not able to carryback under the prior tax law. The additional carryback generated a tax refund of $19.2 million. The tax refund was recorded as income tax benefit during the quarter ended December 31, 2009, the period the act was enacted. We filed a carryback claim with the Internal Revenue Service, and we received a $19.2 million refund in the quarter ended March 31, 2010.

As of December 31, 2010, our indebtedness associated with financing our inventory and working capital needs totaled approximately $94.6 million. At December 31, 2009 and 2010, the interest rate on the outstanding short-term borrowings was approximately 5.1% and 4.0%, respectively. At December 31, 2010, our additional available borrowings under our Credit Facility and CGI Facility were approximately $19.0 million.

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