MarineMax Inc. (HZO, Financial) filed Quarterly Report for the period ended 2009-12-31.
Marinemax Inc. has a market cap of $224.03 million; its shares were traded at around $10.22 with and P/S ratio of 0.38. Marinemax Inc. had an annual average earning growth of 8.7% over the past 10 years.HZO is in the portfolios of Arnold Schneider of Schneider Capital Management, Chuck Royce of ROYCE & ASSOCIATES.
Selling, General, and Administrative Expenses. Selling, general, and administrative expenses decreased $9.2 million, or 23.8%, to $29.6 million for the three months ended December 31, 2009 from $38.9 million for the three months ended December 31, 2008. The overall decrease in selling, general, and administrative expenses resulted from the strategic store reductions that we enacted throughout our 2009 fiscal year. We operated 75 locations at the end of December 2008 compared to 55 locations at the end of December 2009. Additionally, with reductions in workforce, we have reduced personnel costs, commissions, and manager bonuses along with reductions in marketing, travel, and entertainment expenses. The December 31, 2008 period contained approximately $ 400,000 in store closing costs. Selling, general, and administrative expenses as a percentage of revenue decreased approximately 9.3% to 29.5% for the three months ended December 31, 2009 from 38.8% for the three months ended December 31, 2008, as a result of our reduced cost structure.
Interest Expense. Interest expense decreased $2.6 million, or 64.0%, to $1.5 million for the three months ended December 31, 2009 from $4.1 million for the three months ended December 31, 2008. The decrease was primarily a result of decreased borrowings on our credit facility coupled with a more favorable interest rate environment. Interest expense as a percentage of revenue decreased to 1.5% for the three months ended December 31, 2009 from 4.1% for the three months ended December 31, 2008 due to the reductions in the average borrowings on our credit facility.
Income Tax Benefit. Our income tax benefit for the three months ended December 31, 2009 was $19.3 million compared to $4.8 million for the three months ended December 31, 2008. The increase in our tax benefit is due to the enactment of the Worker, Homeownership, and Business Assistance Act of 2009 (the Act), which was signed into law in November 2009. The Act allowed us to carryback the fully valued 2009 net operating loss, 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.
As amended, our credit facility provides for a line of credit with asset-based borrowing availability up to approximately $215 million, stepping down to $175 million by September 30, 2010, with interim decreases between such dates. The amended facility has certain financial covenants as specified in the agreement. The covenants include provisions that our leverage ratio not exceed 2.75 to 1; that our current ratio must be greater than 1.25 to 1 or 1.20 to 1 depending on the time of year; and that our maximum EBITDA loss and annual EBITDA, both as defined in the agreement, comply with certain thresholds as described below. The EBITDA covenant requires that we do not exceed the allowable cumulative negative EBITDA, as defined in the agreement, which is $22 million for the three months ended December 31, 2009 and the six months ended March 31, 2010 and $15 million for the nine months ended June 30, 2010. We are required to have a cumulative EBITDA greater than or equal to our interest expense for the fiscal year ending September 30, 2010. EBITDA, as defined in the agreement, is our earnings before interest, taxes, depreciation, and amortization plus an add back for stock-based compensation expense and 50% of the proceeds of our September 2009 stock offering or approximately $10 million. The amended facility provides for a variable interest rate margin of LIBOR plus 490 basis points through September 30, 2010 and thereafter at LIBOR plus 150 to 400 basis points, depending upon our financial and operating performance. The amended facility matures in May 2011, but includes two one-year renewal options, subject to lender approval. As of December 31, 2009, we were in compliance with all of the credit facility covenants.
As of December 31, 2009, our indebtedness totaled approximately $102 million associated with financing our inventory and working capital needs. At December 31, 2008 and 2009, the interest rate on the outstanding short-term borrowings was 5.7% and 5.1%, respectively. At December 31, 2009, our additional available borrowings under our credit facility were approximately $73 million.
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Marinemax Inc. has a market cap of $224.03 million; its shares were traded at around $10.22 with and P/S ratio of 0.38. Marinemax Inc. had an annual average earning growth of 8.7% over the past 10 years.HZO is in the portfolios of Arnold Schneider of Schneider Capital Management, Chuck Royce of ROYCE & ASSOCIATES.
Highlight of Business Operations:
Gross Profit. Gross profit decreased $1.7 million, or 7.3%, to $22.0 million for the three months ended December 31, 2009 from $23.7 million for the three months ended December 31, 2008. Gross profit as a percentage of revenue decreased to 21.9% for the three months ended December 31, 2009 from 23.7% for the three months ended December 31, 2008. The decrease in gross profit as a percentage of revenue was driven by the current market conditions and our efforts to sell aged inventory. We achieved a modest improvement in margins in our service and parts business.Selling, General, and Administrative Expenses. Selling, general, and administrative expenses decreased $9.2 million, or 23.8%, to $29.6 million for the three months ended December 31, 2009 from $38.9 million for the three months ended December 31, 2008. The overall decrease in selling, general, and administrative expenses resulted from the strategic store reductions that we enacted throughout our 2009 fiscal year. We operated 75 locations at the end of December 2008 compared to 55 locations at the end of December 2009. Additionally, with reductions in workforce, we have reduced personnel costs, commissions, and manager bonuses along with reductions in marketing, travel, and entertainment expenses. The December 31, 2008 period contained approximately $ 400,000 in store closing costs. Selling, general, and administrative expenses as a percentage of revenue decreased approximately 9.3% to 29.5% for the three months ended December 31, 2009 from 38.8% for the three months ended December 31, 2008, as a result of our reduced cost structure.
Interest Expense. Interest expense decreased $2.6 million, or 64.0%, to $1.5 million for the three months ended December 31, 2009 from $4.1 million for the three months ended December 31, 2008. The decrease was primarily a result of decreased borrowings on our credit facility coupled with a more favorable interest rate environment. Interest expense as a percentage of revenue decreased to 1.5% for the three months ended December 31, 2009 from 4.1% for the three months ended December 31, 2008 due to the reductions in the average borrowings on our credit facility.
Income Tax Benefit. Our income tax benefit for the three months ended December 31, 2009 was $19.3 million compared to $4.8 million for the three months ended December 31, 2008. The increase in our tax benefit is due to the enactment of the Worker, Homeownership, and Business Assistance Act of 2009 (the Act), which was signed into law in November 2009. The Act allowed us to carryback the fully valued 2009 net operating loss, 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.
As amended, our credit facility provides for a line of credit with asset-based borrowing availability up to approximately $215 million, stepping down to $175 million by September 30, 2010, with interim decreases between such dates. The amended facility has certain financial covenants as specified in the agreement. The covenants include provisions that our leverage ratio not exceed 2.75 to 1; that our current ratio must be greater than 1.25 to 1 or 1.20 to 1 depending on the time of year; and that our maximum EBITDA loss and annual EBITDA, both as defined in the agreement, comply with certain thresholds as described below. The EBITDA covenant requires that we do not exceed the allowable cumulative negative EBITDA, as defined in the agreement, which is $22 million for the three months ended December 31, 2009 and the six months ended March 31, 2010 and $15 million for the nine months ended June 30, 2010. We are required to have a cumulative EBITDA greater than or equal to our interest expense for the fiscal year ending September 30, 2010. EBITDA, as defined in the agreement, is our earnings before interest, taxes, depreciation, and amortization plus an add back for stock-based compensation expense and 50% of the proceeds of our September 2009 stock offering or approximately $10 million. The amended facility provides for a variable interest rate margin of LIBOR plus 490 basis points through September 30, 2010 and thereafter at LIBOR plus 150 to 400 basis points, depending upon our financial and operating performance. The amended facility matures in May 2011, but includes two one-year renewal options, subject to lender approval. As of December 31, 2009, we were in compliance with all of the credit facility covenants.
As of December 31, 2009, our indebtedness totaled approximately $102 million associated with financing our inventory and working capital needs. At December 31, 2008 and 2009, the interest rate on the outstanding short-term borrowings was 5.7% and 5.1%, respectively. At December 31, 2009, our additional available borrowings under our credit facility were approximately $73 million.
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