What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2021-07-27 compared with 2021-04-27 · 220 added, 85 removed, 425 unchanged (42% of the section changed)

5 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

Cost of sales

6 unchanged sentences

Diluted net income per common share

Weighted average number of common shares used in

computing net income per common share:

Weighted average number of common shares used in computing

net income per common share:

See accompanying notes to condensed consolidated financial statements.

4 unchanged sentences

Three Months Ended

Six Months Ended

Other comprehensive (loss) gain, net of tax:

Nine Months Ended

Other comprehensive gain (loss), net of tax:

Foreign currency translation adjustments

35 unchanged sentences

Preferred stock, $ .001 par value, 1,000,000 shares authorized, none issued or outstanding

as of September 30, 2020 and March 31, 2021

as of September 30, 2020 and June 30, 2021

Common stock, $ .001 par value, 40,000,000 shares authorized, 28,130,312 and

28,464,364 shares issued and 21,863,291 and 21,907,520 shares outstanding as of

September 30, 2020 and March 31, 2021, respectively

September 30, 2020 and June 30, 2021, respectively

Additional paid-in capital

2 unchanged sentences

Treasury stock, at cost, 6,267,021 and 6,556,844 shares held as of September 30, 2020

and March 31, 2021, respectively

and June 30, 2021, respectively

Total shareholders’ equity

19 unchanged sentences

Stock-based compensation

Other comprehensive income

Other comprehensive loss

BALANCE, March 31, 2021

Purchase of treasury stock

Shares issued pursuant to employee stock purchase plan

Shares issued upon exercise of stock options

Stock-based compensation

Other comprehensive income

BALANCE, June 30, 2021

See accompanying notes to condensed consolidated financial statements

MARINEMAX, INC.

AND SUBSIDIARIES

Condensed Consolidated Statements of Shareholders’ Equity

(Amounts in thousands, except share data)

Comprehensive

7 unchanged sentences

Other comprehensive income

Cumulative effect of change in accounting principle - leases, net after tax

Cumulative effect of change in accounting

principle - leases, net after tax

BALANCE, December 31, 2019

Purchase of treasury stock

Shares issued pursuant to employee stock purchase plan

Shares issued upon exercise of stock options

Stock-based compensation

Foreign currency translation adjustments, net of tax

Other comprehensive loss

BALANCE, March 31, 2020

Purchase of treasury stock

Shares issued pursuant to employee stock purchase plan

Shares issued upon vesting of equity awards, net

of minimum tax withholding

Shares issued upon exercise of stock options

Stock-based compensation

Other comprehensive income

BALANCE, June 30, 2020

See accompanying notes to condensed consolidated financial statements

2 unchanged sentences

Condensed Consolidated Statements of Cash Flows

(Amounts in thousands, Unaudited)

Six Months Ended March 31,

(Amounts in thousands)

Nine Months Ended June 30,

CASH FLOWS FROM OPERATING ACTIVITIES:

Adjustments to reconcile net income to net cash (used in) provided by operating

Adjustments to reconcile net income to net cash provided by operating

Depreciation and amortization

Deferred income tax provision

(Loss) gain on sale of property and equipment

Gain on sale of property and equipment

Proceeds from insurance settlements

8 unchanged sentences

Accrued expenses and other liabilities

Net cash (used in) provided by operating activities

Net cash provided by operating activities

CASH FLOWS FROM INVESTING ACTIVITIES:

6 unchanged sentences

CASH FLOWS FROM FINANCING ACTIVITIES:

Net (payment) borrowings on short-term borrowings

Net payments for short-term borrowings

Proceeds from long-term debt

6 unchanged sentences

Payments on tax withholdings for equity awards

Net cash provided by (used in) financing activities

Net cash used in financing activities

Effect of exchange rate changes on cash

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

NET INCREASE IN CASH AND CASH EQUIVALENTS

CASH AND CASH EQUIVALENTS, beginning of period

15 unchanged sentences

We also offer the charter of power yachts in the British Virgin Islands.

As of March 31, 2021, we operated through 77 retail locations in 21 states, consisting of 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.

Our MarineMax Vacation operation maintains a facility in Tortola, British Virgin Islands.

As of June 30, 2021, we operated through 77 retail locations in 21 states, consisting of 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.

Our MarineMax Vacations operation maintains a facility in Tortola, British Virgin Islands.

We also own Fraser Yachts Group and Northrop & Johnson, leading superyacht brokerage and luxury yacht services companies with operations in multiple countries.

Cruisers Yachts, a wholly-owned MarineMax subsidiary, manufactures boats and yachts with sales through our select retail dealership locations and through independent dealers.

We are the nation’s largest retailer of Sea Ray and Boston Whaler recreational boats which are manufactured by Brunswick Corporation (“Brunswick”).

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We believe non-Brunswick brands offer a migration for our existing customer base or fill a void in our product offerings, and accordingly, do not compete with the business generated from our other prominent brands.

In May 2021, we purchased all of the outstanding equity of KCS International Inc.

(“Cruisers Yachts”).

This acquisition provides us a premium, American built yacht for our product portfolio.

Prior to the acquisition, we were a dealer for Cruiser Yachts.

Cruisers Yachts also operates with independent dealers and is recognized as one of the world’s premier manufacturers of premium yachts.

In October 2020, we purchased all of the outstanding equity of Skipper Marine Corp., Skipper Marine of Madison, Inc., Skipper Marine of Fox Valley, Inc., Skipper Bud’s of Illinois, Inc., Skipper Marine of Chicago-Land, Inc., Skipper Marine of Michigan, Inc., and Skipper Marine of Ohio, LLC, (collectively, “SkipperBud’s”).

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Unfavorable local, regional, national, or global economic developments or uncertainties regarding future economic prospects could reduce consumer spending in the markets we serve and adversely affect our business.

Economic conditions in areas in which we operate dealerships, particularly Florida, in which we generated approximately 51 %, 54 % and 54 % of our revenue during fiscal 2018, 2019, and 2020, respectively, can have a major impact on our operations.

Economic conditions in areas in which we operate dealerships,

particularly Florida , in which we generated approximately 51 %, 54 % and 54 % of our revenue during fiscal 2018, 2019, and 2020, respectively, can have a major impact on our operations.

Local influences, such as corporate downsizing, military base closings, inclement weather such as Hurricane Sandy in 2012 or Hurricanes Harvey and Irma in 2017, environmental conditions, and specific events, such as the BP oil spill in the Gulf of Mexico in 2010, also could adversely affect, and in certain instances have adversely affected, our operations in certain markets.

8 unchanged sentences

These unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information, the instructions to Quarterly Report on Form 10-Q, and Rule 10-01 of Regulation S-X and should be read in conjunction with our Annual Report on Form 10-K for the fiscal year ended September 30, 2020.

Accordingly, these unaudited condensed consolidated financial statements do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements.

Accordingly, these unaudited condensed consolidated financial statements do not include all of the information and footnote disclosures required by accounting principles generally accepted in the United States for complete financial statements.

All adjustments, consisting of only normal recurring adjustments considered necessary for fair presentation, have been reflected in these unaudited condensed consolidated financial statements.

As of March 31, 2021, our financial instruments consisted of cash and cash equivalents, accounts receivable, accounts payable, customer deposits, short-term borrowings, long-term debt, and an interest rate swap contract.

The carrying amounts of our financial instruments reported on the balance sheet as of March 31, 2021, approximated fair value due either to length to maturity or existence of variable interest rates, which approximate prevailing market rates.

As of June 30, 2021, our financial instruments consisted of cash and cash equivalents, accounts receivable, accounts payable, customer deposits, short-term borrowings, long-term debt, and an interest rate swap contract.

The carrying amounts of our financial instruments reported on the balance sheet as of June 30, 2021, approximated fair value due either to length to maturity or existence of variable interest rates, which approximate prevailing market rates.

The interest rate swap contract is reported at fair value and is designated as a cash flow hedge with changes in fair value reported in other comprehensive income.

The operating results for the six months ended March 31, 2021, are not necessarily indicative of the results that may be expected in future periods.

The operating results for the nine months ended June 30, 2021, are not necessarily indicative of the results that may be expected in future periods.

The preparation of unaudited condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the unaudited condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting periods.

1 unchanged sentence

Actual results could differ from those estimates.

Effective May 2, 2021, our reportable segments changed as a result of the Company’s acquisition of Cruisers Yachts, which changed management’s reporting structure and operating activities.

We now report our operations through two new reportable segments:

Retail Operations and Product Manufacturing.

The change in reportable segments had no impact on the Company’s previously reported historical consolidated financial statements.

Where applicable, all prior periods presented have been revised to conform to the change in reportable segments.

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

and the 30 recreational boat dealers, four boat brokerage operations, and two full-service yacht repair operations acquired as of March 31, 2021 (the “acquired dealers,” and together with the brokerage and repair operations, “operating subsidiaries” or the “acquired companies”).

and the 30 recreational boat dealers, four boat brokerage operations, two full-service yacht repair operations, and one manufacturer acquired as of June 30, 2021 (the “acquired dealers,” and together with the brokerage and repair operations, “operating subsidiaries” or the “acquired companies”).

The unaudited condensed consolidated financial statements include our accounts and the accounts of our subsidiaries, all of which are wholly owned.

1 unchanged sentence

NEW ACCOUNTING PRONOUNCEMENTS:

In August 2018, the FASB issued ASU 2018-15, Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract, which aligns the accounting for implementation costs incurred in a cloud computing arrangement that is a service contract with the guidance on capitalizing costs associated with developing or obtaining internal-use software.

In August 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2018-15, Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract, which aligns the accounting for implementation costs incurred in a cloud computing arrangement that is a service contract with the guidance on capitalizing costs associated with developing or obtaining internal-use software.

The guidance amends Accounting Standards Codification (“ASC”) 350 to include in its scope implementation costs of a cloud computing arrangement that is a service contract and clarifies that a customer should apply ASC 350 to determine which implementation costs should be capitalized in such a cloud computing arrangement.

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Pursuant to negotiated agreements with financial institutions, we are charged back for a portion of these fees should the customer terminate or default on the related finance contract before it is outstanding for a stipulated minimum period of time.

We base the chargeback allowance, which was not material to the unaudited condensed consolidated financial statements taken as a whole as of March 31, 2021, on our experience with repayments or defaults on the related finance contracts.

We base the chargeback allowance, which was not material to the unaudited condensed consolidated financial statements taken as a whole as of June 30, 2021, on our experience with repayments or defaults on the related finance contracts.

We recognize variable consideration from commissions earned on extended warranty service contracts sold on behalf of third-party insurance companies at generally the later of customer acceptance of the service contract terms as evidenced by contract execution or recognition of the related boat sale.

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As a practical expedient, because repair and maintenance service contracts have an original duration of one year or less, we do not consider the time value of money, and we do not disclose estimated revenue expected to be recognized in the future for performance obligations that are unsatisfied (or partially unsatisfied) at the end of the reporting period or when we expect to recognize such revenue.

We recognize revenue from the sale of our manufactured yachts when control of the yacht is transferred to the dealer, which is generally upon acceptance or delivery to the dealer.

At the time of acceptance or delivery, the dealer is able to direct the use of, and obtain substantially all of the benefits of the yacht.

We have elected to record shipping and handling activities that occur after the dealer has obtained control of the yacht as a fulfillment activity.

Contract liabilities primarily consist of customer deposits.

We recognize contract liabilities (customer deposits) as revenue at the time of delivery or acceptance by the customers.

Contract assets, recorded in prepaid expenses and other current assets, totaled approximately $ 3.6 million and $ 5.9 million as of March 31, 2020 and March 31, 2021, respectively.

Contract assets, recorded in prepaid expenses and other current assets, totaled approximately $ 2.6 million and $ 6.8 million as of September 30, 2020 and June 30, 2021, respectively.

We recognize deferred revenue from service operations and slip and storage services over time on a straight-line basis over the term of the contract as our performance obligations are met.

We recognize income from the rentals of chartering power yachts over time on a straight-line basis over the term of the contract as our performance obligations are met.

The following table sets forth percentages on the timing of revenue recognition for the three and six months ended March 31,

The following tables set forth percentages on the timing of revenue recognition for the three and nine months ended June 30,

Retail Operations

Product Manufacturing

Three Months Ended

Six Months Ended

Goods and services transferred at a point in time

Three Months Ended

June 30, 2020

June 30, 2021

June 30, 2020

June 30, 2021

Goods and services transferred

at a point in time

Goods and services transferred over time

Total revenue

Retail Operations

Product Manufacturing

Nine Months Ended

June 30, 2020

June 30, 2021

June 30, 2020

June 30, 2021

Goods and services transferred

at a point in time

Goods and services transferred over time

Total revenue

The majority of leases that we enter into are real estate leases.

2 unchanged sentences

In addition, we lease certain charter boats for our yacht charter business.

As of March 31, 2021, the weighted-average remaining lease term for our leases was approximately 13 years .

As of June 30, 2021, the weighted-average remaining lease term for our leases was approximately 13 years .

All of our leases are classified as operating leases, which are included as ROU assets and operating lease liabilities in our unaudited condensed consolidated balance sheet.

For the three months ended March 31, 2020 and March 31, 2021, operating lease expenses recorded in selling, general, and administrative expenses were approximately $ 3.5 million and $ 6.4 million, respectively.

For the six months ended March 31, 2020 and March 31, 2021, operating lease expenses recorded in selling, general, and administrative expenses were approximately $ 6.7 million and $ 12.3 million, respectively.

For the three months ended June 30, 2020 and 2021, operating lease expenses recorded in selling, general, and administrative expenses were approximately $ 3.6 million and $ 6.0 million, respectively.

For the nine months ended June 30, 2020 and 2021, operating lease expenses recorded in selling, general, and administrative expenses were approximately $ 10.3 million and $ 18.3 million, respectively.

Our lease agreements do not contain any material residual value guarantees or material restrictive covenants.

8 unchanged sentences

The fixed payments, including the effects of changes in the fixed rate or amount, and renewal options reasonably certain to be exercised, are included in the measurement of the related lease liability.

Most of our real estate leases include one or more options to renew, with renewal terms that can extend the lease term from one to five years or more.

Most of our real estate leases include one or more options to renew, with renewal terms that can extend the lease term from one to five

years or more.

The exercise of lease renewal options is at our sole discretion.

3 unchanged sentences

We determine discount rates based upon our hypothetical credit rating, taking into consideration our short-term borrowing rates, and then adjusting as necessary for the appropriate lease term.

As of March 31, 2021, the weighted-average discount rate used was approximately 5.7 %.

As of March 31, 2021, maturities of lease liabilities are summarized as follows:

As of June 30, 2021, the weighted-average discount rate used was approximately 5.7 %.

As of June 30, 2021, maturities of lease liabilities by fiscal year are summarized as follows:

(Amounts in thousands)

2 unchanged sentences

Supplemental cash flow information related to leases was as follows (amounts in thousands):

Six Months Ended

Nine Months Ended

Cash paid for amounts included in the measurement of lease liabilities:

7 unchanged sentences

We do not believe there is a reasonable likelihood that there will be a change in the future estimates or assumptions we use to calculate our valuation allowance which would result in a material effect on our operating results.

As of September 30, 2020 and March 31, 2021, our valuation allowance for new and used boat, motor, and trailer inventories was $ 2.4 million and $ 1.3 million, respectively.

As of September 30, 2020 and June 30, 2021, our valuation allowance for new and used boat, motor, and trailer inventories was $ 2.4 million and $ 0.6 million, respectively.

If events occur and market conditions change, causing the fair value to fall below carrying value, the valuation allowance could increase.

Inventories, net consisted of the following:

(Amounts in thousands)

As of September 30, 2020

As of June 30, 2021

New and used boats, motors, and trailers

Parts, accessories, and other

Work-in-process

Raw materials

Total inventories

IMPAIRMENT OF LONG-LIVED ASSETS:

FASB Accounting Standards Codification 360-10-40, “Property, Plant, and Equipment - Impairment or Disposal of Long-Lived Assets” (“ASC 360-10-40”), requires that long-lived assets, such as property and equipment and purchased intangibles subject to amortization, be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

FASB ASC 360-10-40, “Property, Plant, and Equipment - Impairment or Disposal of Long-Lived Assets” (“ASC 360-10-40”), requires that long-lived assets, such as property and equipment and purchased intangibles subject to amortization, be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

Recoverability of the asset (or asset group) is measured by comparison of its carrying amount to undiscounted future net cash flows the asset (or asset group) is expected to generate over the remaining life of the asset (or asset group).

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Any impairment recognized in accordance with ASC 360-10-40 is permanent and may not be restored.

Based upon our most recent analysis, we believe no impairment of long-lived assets existed as of March 31, 2021.

We account for acquisitions in accordance with FASB Accounting Standards Codification (“ASC”) 805, “Business Combinations” (“ASC 805”), and goodwill in accordance with ASC 350, “Intangibles — Goodwill and Other” (“ASC 350”).

Based upon our most recent analysis, we believe no impairment of long-lived assets existed as of June 30, 2021.

We account for acquisitions in accordance with FASB ASC 805, “Business Combinations” (“ASC 805”), and goodwill in accordance with ASC 350, “Intangibles — Goodwill and Other” (“ASC 350”).

For business combinations, the excess of the purchase price over the estimated fair value of net assets acquired in a business combination is recorded as goodwill.

In October 2020, we purchased all of the outstanding equity of SkipperBud’s for an aggregate purchase price of $ 55,000,000 , subject to certain customary closing and post-closing adjustments, and net working capital adjustments including certain holdbacks.

In May 2021, we purchased all of the outstanding equity of Cruisers Yachts for an aggregate purchase price of $ 62.7 million, subject to certain customary closing and post-closing adjustments, and net working capital adjustments including certain holdbacks.

The former owners of Cruisers Yachts are subject to certain customary post-closing covenants and indemnities.

The following table summarizes the consideration paid for Cruisers Yachts and the preliminary allocation of the purchase consideration to the estimated fair value of the assets acquired and liabilities assumed at the acquisition date.

(Amounts in thousands)

Consideration:

Fair value of total consideration transferred

Recognized amounts of identifiable assets acquired and liabilities assumed:

Current assets, net of cash acquired of $ 5,933

Property and equipment

Intangible assets

Current liabilities

Total identifiable net assets acquired:

The fair value of current assets acquired includes accounts receivable and inventory of approximately $ 3.1 million and $ 26.2 million, r espectively.

The fair value of current liabilities assumed includes short-term borrowings of approximately $ 11.7 million, accrued expenses of approximately $ 10.3 million, and accounts payable of approximately $ 3.0 million.

The intangible assets acquired include the trade name and customer relationships.

The purchase price allocations are preliminary pending receipt of final valuation analysis of certain assets from our valuation advisors.

The goodwill represents the assembled workforce, acquired capabilities, and future economic benefits resulting from the acquisition.

The majority of the goodwill is expected to be deductible for tax purposes.

The customer relationships have a weighted average useful life of approximately 2.0 years.

The tradename has an indefinite life.

Our results for the nine months ended June 30, 2021 include results from Cruisers Yachts between May 2, 2021 and June 30, 2021.

Refer to Note 17 for disclosure of the revenues and income from operations.

Cruisers Yachts’ financial information for the nine months ended June 30, 2020 and prior to acquisition on May 2, 2021, was not practical to obtain for comparative purposes and as such is not presented because Cruisers Yachts’ historical monthly internal accounting and reporting processes and practices would not provide complete information sufficient for the purposes of this pro forma disclosure.

In October 2020, we purchased all of the outstanding equity of SkipperBud’s for an aggregate purchase price of $ 55.0 million, subject to certain customary closing and post-closing adjustments, and net working capital adjustments including certain holdbacks.

In addition, the former equity owners of SkipperBud’s (“Skippers Sellers”), have the opportunity to earn additional consideration as part of an earnout subject to the achievement of certain pre-tax earnings levels .

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The earnout was estimated based on forecasted pre-tax earnings as a base scenario (among other assumptions) subject to a Monte Carlo simulation.

The Skippers Sellers are subject to certain customary post-closing covenants and indemnities.

The Skippers Sellers are subject to

certain customary post-closing covenants and indemnities.

The acquisition of SkipperBud’s enhances our sales, brokerage, service and marina/storage presence in the Great Lakes region and West Coast of the Unites States.

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The intangible assets have a weighted average useful life of approximately 3.3 years.

For the six months ended March 31, 2021, SkipperBud’s revenue was approximately $ 108.4 million and estimated income before taxes was approximately $ 7.9 million.

SkipperBud’s financial information for the six months ended March 31, 2020 was not practical to obtain for comparative purposes and as such is not presented because SkipperBud’s historical monthly internal accounting and reporting processes and practices would not provide complete information sufficient for the purposes of this pro forma disclosure.

For the nine months ended June 30, 2021, SkipperBud’s revenue was approximately $ 230.1 million and estimated income before taxes was approximately $ 25.3 million.

SkipperBud’s financial information for the nine months ended June 30, 2020 was not practical to obtain for comparative purposes and as such is not presented because SkipperBud’s historical monthly internal accounting and reporting processes and practices would not provide complete information sufficient for the purposes of this pro forma disclosure.

In July 2020, we purchased Northrop & Johnson, a leading superyacht brokerage and services company.

In March 2020, we purchased Boatyard, a digital platform with an expansive range of on-demand services to streamline the boating experience by qualified service providers from a smartphone.

In total, current and previous acquisitions have resulted in the recording of $ 84.3 million and $ 142.2 million in goodwill and other intangible assets as of September 30, 2020 and March 31, 2021, respectively.

In total, current and previous acquisitions have resulted in the recording of $ 84.3 million and $ 186.7 million in goodwill and other intangible assets as of September 30, 2020 and June 30, 2021, respectively.

In accordance with ASC 350, we test goodwill for impairment at least annually and whenever events or changes in circumstances indicate that the carrying value may not be recoverable.

1 unchanged sentence

If the carrying amount of a reporting unit’s goodwill exceeds its fair value we recognize an impairment loss in accordance with ASC 350.

As of March 31, 2021 , and based upon our most recent analysis, we determined through our qualitative assessment that it is not “more likely than not” that the fair values of our reporting units are less than their carrying values.

As of June 30, 2021 , and based upon our most recent analysis, we determined through our qualitative assessment that it is not “more likely than not” that the fair values of our reporting units are less than their carrying values.

As a result, we were not required to perform a quantitative goodwill impairment .

Effective May 2, 2021, our reportable segments changed as a result of the Company’s acquisition of Cruisers Yachts, which changed management’s reporting structure and operating activities.

We now report our operations through two new reportable segments:

Retail Operations and Product Manufacturing.

As a result, the Company allocated goodwill to its reporting units within the Company’s two reportable segments.

The following table sets forth the changes in carrying amount of goodwill by reportable segment during the nine months ended June 30, 2021:

(Amounts in thousands)

Retail Operations

Product Manufacturing

Balance as of September 30, 2020

Goodwill acquired

Foreign currency translation

Balance as of June 30, 2021

INCOME TAXES:

We account for income taxes in accordance with FASB Accounting Standards Codification 740, “Income Taxes” (“ASC 740”).

We account for income taxes in accordance with FASB ASC 740, “Income Taxes” (“ASC 740”).

Under ASC 740, we recognize deferred tax assets and liabilities for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases.

1 unchanged sentence

We record valuation allowances to reduce our deferred tax assets to the amount expected to be realized by considering all available positive and negative evidence.

During the three months ended March 31, 2020 and 2021, we recognized an income tax provision of $ 1.6 million and $ 12.8 million, respectively.

During the six months ended March 31, 2020 and 2021, we recognized an income tax provision of $ 4.9 million and $ 20.0 million, respectively.

The effective income tax rate for the three months ended March 31, 2020 and 2021 was 24.4 % and 24.8 %, respectively .

The effective income tax rate for the six months ended March 31, 2020 and 2021 was 25.6 % and 24.2 %, respectively

During the three months ended June 30, 2020 and 2021, we recognized an income tax provision of $ 11.6 million and $ 20.7 million, respectively.

During the nine months ended June 30, 2020 and 2021, we recognized an income tax provision of $ 16.4 million and $ 40.6 million, respectively.

The effective income tax rate for the three months ended June 30, 2020 and 2021 was 24.9 % and 25.7 %, respectively .

The effective income tax rate for the nine months ended June 30, 2020 and 2021 was 25.1 % and 24.9 %, respectively

SHORT-TERM BORROWINGS AND LONG-TERM DEBT:

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The Credit Facility has a three-year term and expires in May 2023 , subject to extension for two one-year periods, with lender approval .

Subsequent to June 30, 2021, the Company amended the Credit Facility.

The Credit Facility has certain financial covenants as specified in the agreement.

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There is an unused line fee of ten basis points on the unused portion of the Credit Facility.

As of March 31, 2021, we were in compliance with all covenants under the Credit Facility.

As of June 30, 2021, we were in compliance with all covenants under the Credit Facility.

New inventory borrowing eligibility will generally mature 1,080 days from the original invoice date.

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

As of March 31, 2021, our indebtedness associated with financing our inventory and working capital needs totaled approximately $ 35.8 million.

As of March 31, 2020 and 2021, the interest rate on the outstanding short-term borrowings was approximately 5.0 % and 4.2 %, respectively.

As of March 31, 2021, our additional available borrowings under our Credit Facility were approximately $ 181 million based upon the outstanding borrowing base availability.

As of June 30, 2021, our indebtedness associated with financing our inventory and working capital needs totaled approximately $ 2.9 million.

As of June 30, 2020 and 2021, the interest rate on the outstanding short-term borrowings was approximately 3.9 % and 4.2 %, respectively.

As of June 30, 2021, our additional available borrowings under our Credit Facility were approximately $ 102.9 million based upon the outstanding borrowing base availability.

As is common in our industry, we receive interest assistance directly from boat manufacturers, including Brunswick.

1 unchanged sentence

The interest assistance may be paid directly to us or our lender depending on the arrangements the manufacturer has established.

We classify interest assistance received from manufacturers as a reduction of inventory cost and related cost of sales as opposed to netting the assistance against our interest expense incurred with our lenders.

We classify interest assistance received from manufacturers as a reduction of inventory cost and related cost of sales.

The availability and costs of borrowed funds can adversely affect our ability to obtain adequate boat inventory and the holding costs of that inventory as well as the ability and willingness of our customers to finance boat purchases.

8 unchanged sentences

(Amounts in thousands)

March 31, 2021

June 30, 2021

Mortgage facility payable to Flagship Bank bearing interest at 2.25 % ( prime minus 100 basis points with a floor of 2.00 % ).

7 unchanged sentences

Facility matures in September 2027 .

Current available borrowings under the facility were approximately $ 26.4 million at December 31, 2020.

Current available borrowings under the facility were approximately $ 26.1 million at June 30, 2021.

Less current portion

1 unchanged sentence

STOCK-BASED COMPENSATION:

We account for our stock-based compensation plans following the provisions of FASB Accounting Standards Codification 718, “Compensation — Stock Compensation” (“ASC 718”).

We account for our stock-based compensation plans following the provisions of FASB ASC 718, “Compensation — Stock Compensation” (“ASC 718”).

In accordance with ASC 718, we use the Black-Scholes valuation model for valuing all options granted (Note 12) and shares purchased under our Amended 2008 Employee Stock Purchase Plan (“Stock Purchase Plan”) (Note 13).

1 unchanged sentence

We recognize compensation cost for all awards in operations on a straight-line basis over the requisite service period for each separately vesting portion of the award.

During the three months ended March 31, 2020 and 2021, we recognized stock-based compensation expense of approximately $ 1.8 million and $ 2.4 million, respectively, and for the six months ended March 31, 2020 and 2021, we recognized stock-based compensation expense of approximately $ 3.3 million and $ 4.4 million, respectively, in selling, general, and administrative expenses in the unaudited condensed consolidated statements of operations.

Cash received from option exercises under all share-based compensation arrangements for the three months ended March 31, 2020 and 2021, was approximately $ 0.4 million and $ 0.1 million, respectively and for the six months ended March 31, 2020 and 2021 was approximately $ 1.0 million and $ 1.7 million, respectively.

During the three months ended June 30, 2020 and 2021, we recognized stock-based compensation expense of approximately $ 2.2 million and $ 2.5 million, respectively, and for the nine months ended June 30, 2020 and 2021, we recognized stock-based compensation expense of approximately $ 5.5 million and $ 6.9 million, respectively, in selling, general, and administrative expenses in the unaudited condensed consolidated statements of operations.

Cash received from option exercises under all share-based compensation arrangements for the three months ended June 30, 2020 and 2021, was approximately $ 0.6 million and $ 0.9 million, respectively and for the nine months ended June 30, 2020 and 2021 was approximately $ 1.6 million and $ 2.6 million, respectively.

We currently expect to satisfy share-based awards with registered shares available to be issued from the Stock Purchase Plan.

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(ii) the number of shares with respect to which awards granted under the 2011 Plan and the 2007 Plan terminate without the issuance of the shares or where the shares are forfeited or repurchased;

(iii) with respect to awards granted under the 2011 Plan and the 2007 Plan, the number of shares

that are not issued as a result of the award being settled for cash or otherwise not issued in connection with the exercise or payment of the award;

and (iv) the number of shares that are surrendered or withheld in payment of the exercise price of any award or any tax withholding requirements in connection with any award granted under the 2011 Plan or the 2007 Plan.

(iii) with respect to awards granted under the 2011 Plan and the 2007 Plan, the number of shares that are not issued as a result of the award being settled for cash or otherwise not issued in connection with the exercise or payment of the award;

and (iv) the number of shares that are surrendered or withheld in payment of the exercise price of any award or any tax

withholding requirements in connection with any award granted under the 2011 Plan or the 2007 Plan.

The 2011 Plan terminates in February 2030 , and awards may be granted at any time du ring the life of the 2011 Plan.

5 unchanged sentences

To date, we have not settled or been under any obligation to settle any awards in cash.

The following table summarizes activity from our incentive stock plans from September 30, 2020 through March 31, 2021:

The following table summarizes activity from our incentive stock plans from September 30, 2020 through June 30, 2021:

Options Outstanding

3 unchanged sentences

Balance as of September 30, 2020

Options granted

Options cancelled/forfeited/expired

3 unchanged sentences

Additional shares of stock issued

Balance as of March 31, 2021

Exercisable as of March 31, 2021

No options were granted for the six months ended March 31, 2020 and 2021.

The total intrinsic value of options exercised during the six months ended March 31, 2020 and 2021, was $ 0.2 million and $ 1.6 million, respectively.

Balance as of June 30, 2021

Exercisable as of June 30, 2021

No options were granted for the nine months ended June 30, 2020 and 2021.

The total intrinsic value of options exercised during the nine months ended June 30, 2020 and 2021, was $ 0.4 million and $ 1.8 million, respectively.

We used the Black-Scholes model to estimate the fair value of options granted.

19 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

Dividend yield

1 unchanged sentence

Expected life

As of March 31, 2021, we had issued 1,101,135 shares of common stock under our Stock Purchase Plan.

As of June 30, 2021, we had issued 1,139,547 shares of common stock under our Stock Purchase Plan.

RESTRICTED STOCK AWARDS:

4 unchanged sentences

Accordingly, the fair value of the restricted stock awards, including performance based awards, is measured on the grant date and recognized in earnings over the requisite service period for each separately vesting portion of the award.

The following table summarizes restricted stock award activity from September 30, 2020 through March 31, 2021:

The following table summarizes restricted stock award activity from September 30, 2020 through June 30, 2021:

Shares/ Units

6 unchanged sentences

Awards forfeited

Non-vested balance as of March 31, 2021

As of March 31, 2021, we had approximately $ 14.1 million of total unrecognized compensation cost, assuming applicable performance conditions are met, related to non-vested restricted stock awards.

Non-vested balance as of June 30, 2021

As of June 30, 2021, we had approximately $ 12.0 million of total unrecognized compensation cost, assuming applicable performance conditions are met, related to non-vested restricted stock awards.

We expect to recognize that cost over a weighted average period of 2.2 years.

2 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

Weighted average common shares outstanding used in

3 unchanged sentences

used in calculating diluted income per share

For the three months ended March 31, 2020 and 2021, there were 21,333 and no weighted average shares of options outstanding, respectively, that were not included in the computation of diluted income per share because the options’ exercise prices were greater than the average market price of our common stock, and therefore, their effect would be anti-dilutive.

For the six months ended March 31, 2020 and 2021, there were 21,333 and 104 weighted average shares of options outstanding, respectively, that were not included in the computation of diluted income per share because the options’ exercise prices

were greater than the average market price of our common stock, and therefore, their effect would be anti-dilutive.

For the three months ended June 30, 2020 and 2021, there were 15,000 and no weighted average shares of options outstanding, respectively, that were not included in the computation of diluted income per share because the options’ exercise prices were greater than the average market price of our common stock, and therefore, their effect would be anti-dilutive.

For the nine months ended June 30, 2020 and 2021, there were 29,601 and 578 weighted average shares of options outstanding, respectively, that were not included in the computation of diluted income per share because the options’ exercise prices were greater than the average market price of our common stock, and therefore, their effect would be anti-dilutive.

COMMITMENTS AND CONTINGENCIES:

We are party to various legal actions arising in the ordinary course of business.

While it is not feasible to determine the actual outcome of these actions as of March 31, 2021, we believe that these matters should not have a material adverse effect on our unaudited condensed consolidated financial condition, results of operations, or cash flows.

While it is not feasible to determine the actual outcome of these actions as of June 30, 2021, we believe that these matters should not have a material adverse effect on our unaudited condensed consolidated financial condition, results of operations, or cash flows.

SEGMENT INFORMATION:

Change in Reportable Segments

Effective May 2, 2021, our reportable segments changed as a result of the Company’s acquisition of Cruisers Yachts, which changed management’s reporting structure and operating activities.

We now report our operations through two new reportable segments:

Retail Operations and Product Manufacturing.

Reportable Segments

The Company’s segments are defined by management’s reporting structure and operating activities.

The Company’s reportable segments are the following:

Retail Operations.

As of June 30, 2021, the Retail Operations segment includes the activity of our 77 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.

In addition, we provide repair, maintenance, and slip and storage services;

we arrange related boat financing, insurance, and extended service contracts;

we offer boat and yacht brokerage sales;

yacht charter services;

and we operate a yacht charter business in the British Virgin Islands.

We also own Fraser Yachts Group and Northrop & Johnson, leading superyacht brokerage and luxury yacht services companies with operations in multiple countries.

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

Product Manufacturing.

The Product Manufacturing segment includes activity of Cruisers Yachts, a wholly-owned MarineMax subsidiary, manufacturing boats and yachts with sales through our select retail dealership locations and through independent dealers.

Cruisers Yachts is recognized as one of the world’s premier manufacturers of premium yachts, producing models from 33 ’ to 60 ’ feet.

Intersegment revenue represents yachts that were manufactured in our Product Manufacturing segment and were sold to our Retail Operations segment.

The Product Manufacturing segment supplies our Retail Operations segment along with various independent dealers.

The following table sets forth revenue and income from operations for each of the Company’s reportable segments for the three and nine months ended June 30,

Three Months Ended

Nine Months Ended

(Amounts in thousands)

Retail Operations

Product Manufacturing

Elimination of intersegment revenue

Income from operations:

Retail Operations

Product Manufacturing

Elimination of intersegment income from operations

Income from operations

SUBSEQUENT EVENT:

On July 9, 2021, the Company amended its Credit Facility to increase the borrowing availability to $ 500 million, extend the term to expire by one year to July 2024 , with two one-year options to renew, subject to lender approval, and modify certain provisions to provide additional liquidity to the Company.

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 1. Financial Statements