What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-04-24 compared with 2025-01-23 · 66 added, 42 removed, 127 unchanged (46% of the section changed)

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environmental conditions;

the imposition of tariffs and their potential impacts on our operations and the broader economy;

inclement weather;

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and the Company’s ability to manage growth effectively.

Actual results could differ materially from those

currently anticipated as a result of a number of factors, including those set forth under “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended September 30, 2024.

Actual results could differ materially from those currently anticipated as a result of a number of factors, including those set forth under “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended September 30, 2024.

All references to the “Company,” “MarineMax,” “we,” “us,” and “our” mean, as a combined company, MarineMax, Inc.

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In October 2023, we acquired a controlling interest of AGY, a luxury charter management agency based in Athens, Greece.

In March 2024, we acquired Williams Tenders USA, a premier distributor and retailer for UK-based Williams Jet Tenders Ltd., the world’s leading manufacturer of rigid inflatable jet tenders for the luxury yacht market.

In March 2024, we acquired Williams Tenders USA, a premier distributor and retailer for UK-based Williams Jet Tenders Ltd., the world’s leading manufacturer of

rigid inflatable jet tenders for the luxury yacht market.

In March 2024, we also acquired Native Marine, a boat dealer based in Islamorada, Florida.

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In January 2025, we acquired the service and parts departments at our retail location in Panama City Beach, Florida.

In March 2025, we acquired Shelter Bay Marina in Marathon, Florida.

MarineMax was incorporated in January 1998 (and reincorporated in Florida in March 2015).

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As a result of these and other factors, a number of potential acquisitions that from time to time appear likely to occur do not result in binding legal agreements and are not consummated.

We completed three acquisitions in the fiscal year ending September 30, 2024, and two acquisitions to date in fiscal 2025.

We completed three acquisitions in the fiscal year ending September 30, 2024, and three acquisitions to date in fiscal 2025.

General economic conditions and consumer spending patterns can negatively impact our operating results.

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As a result, an economic downturn or inflation could impact us more than certain of our competitors due to our strategic focus on a higher end of our market.

However, the Federal Reserve has recently cut interest rates but future decreases or increases are uncertain.

While the Federal Reserve cut interest rates in late 2024, it has since kept interest rates stable and future decreases or increases are uncertain.

Additionally, the current U.S.

administration recently announced significant tariff actions on imports from a broad set of countries, including countries that produce certain of our products.

In response to these tariffs, U.S.

trading partners have imposed, or are likely to impose, their own tariffs.

The effects of these tariffs and reciprocal tariffs are uncertain, but they are likely to increase production and supply chain costs for certain of our products and some experts predict an increased chance of an economic recession as a result of the disruption of international trade.

We continue to analyze the impacts of these tariffs on our business and action we can take to minimize their impact.

Although we have expanded our operations during periods of stagnant or modestly declining industry trends, the cyclical nature of the recreational boating industry or the lack of industry growth may adversely affect our business, financial condition, and results of operations.

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Although past economic conditions have adversely affected our operating results, we believe during and after such conditions we have capitalized on our core strengths to substantially outperform the industry, resulting in market share gains.

Our ability to capture

such market share supports the alignment of our retailing strategies with the desires of consumers.

Our ability to capture such market share supports the alignment of our retailing strategies with the desires of consumers.

We believe the steps we have taken to address weak market conditions in the past have yielded, and we believe are likely to yield in the future, an increase in revenue.

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We expect our core strengths and retailing strategies, including our digital platform, will position us to capitalize on growth opportunities as they occur and will allow us to emerge with greater earnings potential.

As of December 31, 2024, the Retail Operations segment includes the activity of over 70 retail locations in Alabama, California, Connecticut, Florida, Georgia, Illinois, Maryland, Massachusetts, Michigan, Minnesota, Missouri, New Jersey, New York, North Carolina, Ohio, Oklahoma, Rhode Island, South Carolina, Texas, Washington and Wisconsin, where we sell new and used recreational boats, including pleasure and fishing boats, with a focus on premium brands in each segment.

As of March 31, 2025, the Retail Operations segment includes the activity of over 70 retail locations in Alabama, California, Connecticut, Florida, Georgia, Illinois, Maryland, Massachusetts, Michigan, Minnesota, Missouri, New Jersey, New York, North Carolina, Ohio, Oklahoma, Rhode Island, South Carolina, Texas, Washington and Wisconsin, where we sell new and used recreational boats, including pleasure and fishing boats, with a focus on premium brands in each segment.

We also sell related marine products, including engines, trailers, parts, and accessories.

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Fraser Yachts Group and Northrop & Johnson, leading superyacht brokerage and luxury yacht services companies with operations in multiple countries, are also included in this segment.

Through IGY Marinas, which is also included in this segment, we maintain a network of strategically positioned luxury marinas situated in yachting and sport fishing destinations around the world.

Through IGY Marinas, which is also included in this segment, we maintain a network of strategically positioned luxury

marinas situated in yachting and sport fishing destinations around the world.

The Retail Operations segment includes the majority of all corporate costs.

As of December 31, 2024, the Product Manufacturing segment includes activity of Cruisers Yachts and Intrepid Powerboats, both wholly-owned MarineMax subsidiaries.

As of March 31, 2025, the Product Manufacturing segment includes activity of Cruisers Yachts and Intrepid Powerboats, both wholly-owned MarineMax subsidiaries.

Cruisers Yachts manufactures sport yacht and yachts with sales through our select retail dealership locations and through independent dealers.

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Intrepid Powerboats produces customized boats.

Intrepid Powerboats follows a direct-to-consumer distribution model and has received many awards and accolades for its innovations and high-quality craftsmanship that create industry leading products in their categories.

Intrepid Powerboats has received many awards and accolades for its innovations and high-quality craftsmanship that create industry leading products in their categories.

Application of Critical Accounting Policies

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Consolidated Results of Operations

The following discussion compares the three months ended December 31, 2024, with the three months ended December 31, 2023 and should be read in conjunction with the Unaudited Condensed Consolidated Financial Statements, including the related notes thereto, appearing elsewhere in this report.

Three Months Ended December 31, 2024 Compared with Three Months Ended December 31, 2023

Revenue decreased $58.8 million, or 11.2%, to $468.5 million for the three months ended December 31, 2024, from $527.3 million for three months ended December 31, 2023.

The decrease was due to a decrease of $57.0 million or 11% in comparable-store sales in addition to a $1.8 million net decrease primarily from manufacturing revenue, which is not included in comparable retail store sales, partially offset by revenue from new locations that are not eligible for inclusion in comparable-store sales.

The comparable-store decrease was primarily driven by declines in new boat revenue resulting from challenging economic trends and the lingering impact of Hurricanes Helene and Milton.

The following discussion compares the six months ended March 31, 2025, with the six months ended March 31, 2024 and should be read in conjunction with the Unaudited Condensed Consolidated Financial Statements, including the related notes thereto, appearing elsewhere in this report.

Three Months Ended March 31, 2025 Compared with Three Months Ended March 31, 2024

Revenue increased $48.6 million, or 8.3%, to $631.5 million for the three months ended March 31, 2025, from $582.9 million for three months ended March 31, 2024.

The increase was due to an increase of $63.0 million or 11% in comparable-store sales, partially offset by a $14.4 million net decrease primarily from closed stores that are not eligible for inclusion in comparable-store sales.

The comparable-store increases were primarily driven by increases in new and used boat revenue along with contributions from our other higher margin businesses.

Gross Profit.

Gross profit decreased $5.8 million, or 3.3%, to $169.7 million for the three months ended December 31, 2024, from $175.5 million for the three months ended December 31, 2023.

Gross profit as a percentage of revenue increased to 36.2% for the three months ended December 31, 2024, from 33.3% for the three months ended December 31, 2023.

The increase in gross profit as a percentage of revenue was attributable to the promotional environment, mix of sales, and increased contribution from our higher-margin businesses.

Gross profit decreased $0.9 million, or 0.5%, to $189.5 million for the three months ended March 31, 2025, from $190.4 million for the three months ended March 31, 2024.

Gross profit as a percentage of revenue decreased to 30.0% for the three months ended March 31, 2025, from 32.7% for the three months ended March 31, 2024.

The decrease in gross profit as a percentage of revenue was primarily a result of lower boat margins due to the challenging retail environment.

Selling, General, and Administrative Expenses.

Selling, general, and administrative expenses decreased $25.8 million, or 16.5% to $130.7 million for the three months ended December 31, 2024, from $156.5 million for the three months ended December 31, 2023.

The decrease in selling, general, and administrative expenses was primarily the result of changes in the fair value of contingent consideration liabilities and cost-saving initiatives implemented in the prior fiscal year.

Selling, general, and administrative expenses decreased $2.2 million, or 1.3% to $166.8 million for the three months ended March 31, 2025, from $169.0 million for the three months ended March 31, 2024.

The decrease in selling, general, and administrative expenses was primarily the result of cost-saving initiatives implemented in fiscal 2024 and fiscal 2025.

Interest Expense.

Interest expense increased $0.3 million to $18.7 million for the three months ended December 31, 2024, from $18.4 million for the three months ended December 31, 2023.

The increase in interest expense was primarily the result of increased borrowings from higher inventory levels.

Interest expense decreased $1.2 million to $18.2 million for the three months ended March 31, 2025, from $19.4 million for the three months ended March 31, 2024.

The decrease in interest expense was primarily the result of lower interest rates.

Income Taxes.

Income tax increased $2.3 million to $2.1 million, for the three months ended December 31, 2024, from a benefit of $0.2 million for the three months ended December 31, 2023.

The effective income tax rate for the three months ended December 31, 2024 and 2023 before discrete items was 25.1% and 26.4%, respectively.

Income tax increased $0.8 million to $1.4 million, for the three months ended March 31, 2025, from $0.6 million for the three months ended March 31, 2024.

The effective income tax rate for the three months ended March 31, 2025 and 2024 was 30.7% and 28.5%, respectively.

Six Months Ended March 31, 2025 Compared with Three Months Ended March 31, 2024

Revenue decreased $10.2 million, or 0.9%, to $1.100 billion for the six months ended March 31, 2025, from $1.110 billion for six months ended March 31, 2024.

The decrease was due to a $16.3 million net decrease primarily from closed stores and manufacturing revenues which are not included in comparable retail store sales, partially offset by an increase of $6.1 million or 1%, in comparable-store sales.

The comparable-store increase came primarily from increases in used boat revenue along with contributions from our other higher margin businesses.

Gross Profit.

Gross profit decreased $6.7 million, or 1.8%, to $359.2 million for the six months ended March 31, 2025, from $365.9 million for the six months ended March 31, 2024.

Gross profit as a percentage of revenue decreased to 32.7% for the six months ended March 31, 2025, from 33.0% for the six months ended March 31, 2024.

The decrease in gross profit as a percentage of revenue was primarily a result of lower boat margins due to the challenging retail environment.

Selling, General, and Administrative Expenses.

Selling, general, and administrative expenses decreased $28.0 million, or 8.6% to $297.5 million for the six months ended March 31, 2025, from $325.5 million for the six months ended March 31, 2024.

Interest Expense.

Interest expense decreased $0.8 million to $36.9 million for the six months ended March 31, 2025, from $37.7 million for the six months ended March 31, 2024.

The decrease in interest expense was primarily the result of lower interest rates.

Income Taxes.

Income tax expense increased $3.1 million, to $3.5 million for the six months ended March 31, 2025, from $0.4 million for the six months ended March 31, 2024.

The effective income tax rate for the six months ended March 31, 2025 and 2024 was 14.1% and 13.8%, respectively.

Liquidity and Capital Resources

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We cannot predict the length of prevailing economic or financial conditions.

We regularly monitor the aging of our inventories and current market trends (including supply chain issues) to evaluate our current and future inventory needs.

We regularly monitor the aging of our inventories and current market trends (including supply chain issues and tariffs) to evaluate our current and future inventory needs.

We also use this evaluation in conjunction with our review of our current and expected operating performance and expected business levels to determine the extent of our financing needs.

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Any turmoil in the credit markets and weakness in the retail markets may interfere with our ability to remain in compliance with the covenants of the Amended Credit Facility and therefore affect our ability to utilize the Amended Credit Facility to fund operations.

As of December 31, 2024, we were in compliance with all covenants under the Amended Credit Facility.

As of March 31, 2025, we were in compliance with all covenants under the Amended Credit Facility.

We currently depend upon dividends and other payments from our businesses and the Amended Credit Facility to fund our current operations and meet our cash needs.

As the majority owner of each of our businesses, we determine the amounts of such distributions subject to applicable law, and currently, no agreements exist that restrict this flow of funds from our businesses.

For the three months ended December 31, 2024 and 2023, cash used in operating activities was approximately $146.1 million and $89.1 million, respectively.

For the three months ended December 31, 2024, cash used in operating activities was primarily related to increases in inventory, decreases in accounts payable, decreases in contract liabilities (customer deposits), partially offset by our net income adjusted for non-cash expenses and gains such as depreciation and amortization expense, deferred income tax provision, and stock-based compensation expense.

For the three months ended December 31, 2023, cash used in operating activities was primarily related to increases in inventory, increases in accounts receivable, decreases in accounts payable, decreases in in contract liabilities (customer deposits), partially offset by our net income adjusted for non-cash expenses and gains such as depreciation and amortization expense, deferred income tax provision, and stock-based compensation expense.

For the three months ended December 31, 2024 and 2023, cash used in investing activities was approximately $6.5 million and $17.3 million, respectively.

For the three months ended December 31, 2024, cash used in investing activities was primarily used to purchase property and equipment associated with improving existing retail facilities, partially offset by proceeds from the sale of property and equipment and other assets and proceeds from the acquisition of a trade name.

For the three months ended December 31, 2023, cash used in investing activities was primarily used to purchase property and equipment associated with improving existing retail facilities, partially offset by proceeds from insurance settlements.

For the three months ended December 31, 2024 and 2023, cash provided by financing activities was approximately $74.7 million and $114.3 million, respectively.

For the three months ended December 31, 2024, cash provided by financing activities was primarily attributable to net increases in short-term borrowings, which solely consisted of the Floor Plan, and net proceeds from issuance of common stock under incentive compensation and employee purchase plans, partially offset by payments on long-term debt and payments on tax withholdings for equity awards.

For the three months ended December 31, 2023, cash provided by financing activities was primarily attributable to net increases in short-term borrowings, which solely consisted of the Floor Plan, and net proceeds from issuance of common stock under incentive compensation and employee purchase plans, partially offset by payments on long-term debt, contingent acquisition consideration payments and payments on tax withholdings for equity awards.

For the six months ended March 31, 2025 and 2024, cash used in operating activities was approximately $73.6 million and $111.2 million, respectively.

For the six months ended March 31, 2025, cash used in operating activities was primarily related to increases in inventory, increases in accounts receivable, decreases in accounts payable, decreases in contract liabilities (customer deposits), decreases in accrued expenses and other liabilities, partially offset by our net income adjusted for non-cash expenses and gains such as depreciation and amortization expense, changes in fair value of contingent consideration, deferred income tax provision, and stock-based compensation expense.

For the six months ended March 31, 2024, cash used in operating activities was primarily related to increases in inventory, increases in accounts receivable, decreases in accounts payable, decreases in contract liabilities (customer deposits), partially offset by increases in our net income adjusted for non-cash expenses and gains such as depreciation and amortization expense, deferred income tax provision, and stock-based compensation expense.

For the six months ended March 31, 2025 and 2024, cash used in investing activities was approximately $25.7 million and $49.9 million, respectively.

For the six months ended March 31, 2025, cash used in investing activities was primarily used to purchase property and equipment associated with improving existing retail facilities, partially offset by proceeds from the sale of property and equipment and other assets, proceeds from the acquisition of a trade name, and proceeds from insurance settlements.

For the six months ended March 31, 2024, cash used in investing activities was primarily used to purchase property and equipment associated with improving existing retail facilities, partially offset by proceeds from insurance settlements.

For the six months ended March 31, 2025 and 2024, cash provided by financing activities was approximately $79.4 million and $175.4 million, respectively.

For the six months ended March 31, 2025, cash provided by financing activities was primarily attributable to net increases in short-term borrowings, which solely consisted of the Floor Plan (as defined below), and net proceeds from issuance of common stock under incentive compensation and employee purchase plans, partially offset by payments on long-term debt, payments on tax withholdings for equity awards, contingent consideration payments from acquisitions, and purchases of treasury stock.

For the six months ended March 31, 2024, cash provided by financing activities was primarily attributable to net increases in short-term borrowings, which solely consisted of the Floor Plan, and net proceeds from issuance of common stock under incentive compensation and employee purchase plans, partially offset by payments on long-term debt, contingent consideration payments from acquisitions, and payments on tax withholdings for equity awards.

We are party to the Amended Credit Facility with Manufacturers and Traders Trust Company as Administrative Agent, Swingline Lender, and Issuing Bank, Wells Fargo Commercial Distribution Finance, LLC, as Floor Plan Agent, and the lenders party thereto.

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Advances on used inventory will mature 361 days from the date we acquire the used inventory.

Each advance is subject to a curtailment schedule, which requires that we pay down the balance of each advance on a periodic basis starting six months

after receiving such advance.

is subject to a curtailment schedule, which requires that we pay down the balance of each advance on a periodic basis starting six months after receiving such advance.

The curtailment schedule varies based on the type and value of the inventory.

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None of our real estate has been pledged for collateral for the Amended Credit Agreement.

As of December 31, 2024, our indebtedness associated with our short-term borrowings, which solely consisted of the Floor Plan, and our long-term debt, totaled approximately $795.2 million and $347.3 million, respectively.

As of December 31, 2024, short-term borrowings, which solely consisted of the Floor Plan, and long-term debt recorded on the Unaudited Condensed Consolidated Balance Sheets included unamortized debt issuance costs of approximately $1.2 million and $1.4 million, respectively.

As of March 31, 2025, our indebtedness associated with our short-term borrowings, which solely consisted of the Floor Plan, and our long-term debt, totaled approximately $821.7 million and $339.1 million, respectively.

As of March 31, 2025, short-term borrowings, which solely consisted of the Floor Plan, and long-term debt recorded on the Unaudited Condensed Consolidated Balance Sheets included unamortized debt issuance costs of approximately $1.1 million and $1.3 million, respectively.

Refer to Note 10 of the Notes to the Consolidated Financial Statements for disclosure of borrowing availability, interest rates, and terms of our short-term borrowings (Floor Plan) and long-term debt.

Except as specified in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and in the Unaudited Condensed Consolidated Financial Statements in the “Financial Statements (Unaudited)”, we have no material commitments for capital for the next 12 months.

Based on the information currently available to us (including the potential re-emergence of or increase in inflation, the effects of potentially higher interest rates, and potential recession, all of which are uncertain), we believe that the cash generated from sales and our existing capital resources will be adequate to meet our liquidity and capital requirements for at least the next 12 months, and thereafter for the foreseeable future, except in the case of possible significant acquisitions.

Based on the information currently available to us (including the potential re-emergence of or increase in inflation, the effects of potentially higher interest rates, the effects of new, increased or reciprocal tariffs and potential recession, all of which are uncertain), we believe that the cash generated from sales and our existing capital resources will be adequate to meet our liquidity and capital requirements for at least the next 12 months, and thereafter for the foreseeable future, except in the case of possible significant acquisitions.

Impact of Seasonality and Weather on Operations

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For example, a hypothetical 100 basis point, 200 basis point, or 300 basis point increase in the interest rate would result in an increase of approximately $11.5 million, $23.0 million, or $34.5 million, respectively, in annual pre-tax interest expense.

These estimated increases are based upon the outstanding balance of our short-term borrowings and long-term debt as of December 31, 2024 and assumes no mitigating changes by us to reduce the outstanding balances and no additional interest assistance that could be received from vendors due to the interest rate increase.

These estimated increases are based upon the outstanding balance of our short-term borrowings and long-term debt as of March 31, 2025 and assumes no mitigating changes by us to reduce the outstanding balances and no additional interest assistance that could be received from vendors due to the interest rate increase.

Foreign Currency Exchange Rate Risk

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis