Marinemax Inc 10-Q for FY2020 Q2

Marinemax Inc (HZO)

10-Q 2020-04-29 For: 2020-03-31

Added on April 10, 2026

About this 10-Q

Marinemax Inc filed this 10-Q on April 29, 2020, covering the quarter ended March 31, 2020 (FY2020 Q2).

Headline figures

Quarter ended March 31, 2020, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $308.48M; up 1.6% from $303.59M a year earlier
Net income: $5.07M; down 4.5% from net income of $5.3M a year earlier
Diluted EPS: $0.23; unchanged from $0.23 a year earlier

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Florida	59-3496957
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification Number)

2600 McCormick Drive, Suite 200
Clearwater, Florida	33759
(Address of Principal Executive Offices)	(ZIP Code)


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $.001 per share	HZO	New York Stock Exchange


Large accelerated filer	☐	Accelerated filer	☒
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

Item No.		Page

PART I. FINANCIAL INFORMATION
1.	Financial Statements (Unaudited):
	Condensed Consolidated Statements of Operations for the Three and Six Months Ended March 31, 2019 and 2020	3
	Condensed Consolidated Statements of Comprehensive Income for the Three and Six Months Ended March 31, 2019 and 2020	4
	Condensed Consolidated Balance Sheets as of September 30, 2019 and March 31, 2020	5
	Condensed Consolidated Statements of Stockholders’ Equity for the Six Months Ended March 31, 2019 and 2020	6
	Condensed Consolidated Statements of Cash Flows for the Six Months Ended March 31, 2019 and 2020	8
	Notes to Condensed Consolidated Financial Statements	9

2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	19

3.	Quantitative and Qualitative Disclosures About Market Risk	25

4.	Controls and Procedures	26

PART II. OTHER INFORMATION		27
1.	Legal Proceedings	27
1A.	Risk Factors	27
2.	Unregistered Sales of Equity Securities and Use of Proceeds	27
3.	Defaults Upon Senior Securities	27
4.	Mine Safety Disclosures	27
5.	Other Information	27
6.	Exhibits	28
SIGNATURES		29

EX – 31.1
EX – 31.2
EX – 32.1
EX – 32.2
EX – 101 INSTANCE DOCUMENT
EX – 101 SCHEMA DOCUMENT
EX – 101 CALCULATION LINKBASE DOCUMENT
EX – 101 DEFINITION LINKBASE DOCUMENT
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	Three Months Ended				Six Months Ended
	March 31,				March 31,
	2019		2020		2019		2020
Revenue	$	303,586	$	308,475	$	545,523	$	612,647
Cost of sales		229,384		229,699		407,843		453,853
Gross profit		74,202		78,776		137,680		158,794

Selling, general, and administrative expenses		63,976		69,060		118,468		133,446
Income from operations		10,226		9,716		19,212		25,348

Interest expense		3,033		3,013		5,549		6,357
Income before income tax provision		7,193		6,703		13,663		18,991

Income tax provision		1,890		1,638		3,450		4,867
Net income	$	5,303	$	5,065	$	10,213	$	14,124

Basic net income per common share	$	0.23	$	0.24	$	0.45	$	0.66

Diluted net income per common share	$	0.23	$	0.23	$	0.44	$	0.64

Weighted average number of common shares used in computing net income per common share:

Basic		22,836,571		21,520,215		22,807,756		21,486,995
Diluted		23,417,688		21,960,285		23,408,873		21,925,105

	September 30,			March 31,
	2019			2020
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	38,511		$	64,406
Accounts receivable, net		42,398			35,814
Inventories, net		477,468			506,887
Prepaid expenses and other current assets		10,206			9,369
Total current assets		568,583			616,476
Property and equipment, net of accumulated depreciation of $77,798 and $83,065		144,298			143,168
Operating lease right-of-use assets, net		-			40,566
Goodwill and other intangible assets, net		64,077			65,139
Other long-term assets		7,125			7,755
Total assets	$	784,083		$	873,104
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable	$	33,674		$	15,259
Customer deposits		24,305			26,794
Accrued expenses		42,849			34,634
Current operating lease liabilities		-			6,850
Short-term borrowings		312,065			362,898
Total current liabilities		412,893			446,435
Noncurrent operating lease liabilities		-			35,639
Deferred tax liabilities, net		1,142			2,821
Other long-term liabilities		1,229			1,132
Total liabilities		415,264			486,027
SHAREHOLDERS' EQUITY:
Preferred stock, $.001 par value, 1,000,000 shares authorized, none issued or outstanding as of September 30, 2019 and March 31, 2020		—			—
Common stock, $.001 par value, 40,000,000 shares authorized, 27,508,473 and 27,717,663 shares issued and 21,321,688 and 21,470,642 shares outstanding as of September 30, 2019 and March 31, 2020, respectively		28			28
Additional paid-in capital		269,969			273,809
Accumulated other comprehensive loss		(669	)		(513	)
Retained earnings		202,455			217,189
Treasury stock, at cost, 6,186,785 and 6,247,021 shares held as of September 30, 2019 and March 31, 2020, respectively		(102,964	)		(103,436	)
Total shareholders’ equity		368,819			387,077
Total liabilities and shareholders’ equity	$	784,083		$	873,104

					Additional			Accumulated Other								Total
	Common Stock				Paid-in			Comprehensive			Retained		Treasury			Shareholders’
	Shares		Amount		Capital			Earnings			Earnings		Stock			Equity
BALANCE, September 30, 2019		27,508,473	$	28	$	269,969		$	(669	)	$	202,455	$	(102,964	)	$	368,819
Net income		—		—		—			—			9,059		—			9,059
Purchase of treasury stock		—		—		—			—			—		—			-
Shares issued pursuant to employee stock purchase plan		38,352		—		505			—			—		—			505
Shares issued upon vesting of equity awards, net of minimum tax withholding		123,993		—		(476	)		—			—		—			(476	)
Shares issued upon exercise of stock options		13,000		—		111			—			—		—			111
Stock-based compensation		2,946		—		1,513			—			—		—			1,513
Foreign currency translation adjustments, net of tax		—		—		—			606			—		—			606
Cumulative effect of change in accounting principle - leases, net after tax		—		—		—			—			610		—			610
BALANCE, December 31, 2019		27,686,764	$	28	$	271,622		$	(63	)	$	212,124	$	(102,964	)	$	380,747
Net income		—		—		—			—			5,065		—			5,065
Purchase of treasury stock		—		—		—			—			—		(472	)		(472	)
Shares issued pursuant to employee stock purchase plan		—		—		—			—			—		—			—
Shares issued upon exercise of stock options		28,167		—		414			—			—		—			414
Stock-based compensation		2,732		—		1,773			—			—		—			1,773
Foreign currency translation adjustments, net of tax		—		—		—			(450	)		—		—			(450	)
BALANCE, March 31, 2020		27,717,663	$	28	$	273,809		$	(513	)	$	217,189	$	(103,436	)	$	387,077

	(Amounts in thousands)
2020	$	9,923
2021		8,535
2022		6,920
2023		5,989
2024		4,072
Thereafter		28,790
Total lease payments		64,229
Less: interest		(21,740	)
Present value of lease liabilities	$	42,489

	(Amounts in thousands)
2020		9,480
2021		8,148
2022		6,906
2023		6,329
2024		5,003
Thereafter		29,111
Total	$	64,977

	For the Six Months Ended
	March 31,
	2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	5,152
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	817

	Shares Available for Grant			Options Outstanding			Aggregate Intrinsic Value (in thousands)		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life
Balance as of September 30, 2019		715,590			484,031		$	1,569	$	12.42		3.7
Shares authorized		1,000,000			-			-		-
Options granted		-			-			-		-
Options cancelled/forfeited/expired		-			-			-		-
Options exercised		-			(41,167	)		-		12.76
Restricted stock awards issued		(418,771	)		-			-		-
Restricted stock awards forfeited		7,150			-			-		-
Additional shares of stock issued		(5,678	)		-			-		-
Balance as of March 31, 2020		1,298,291			442,864		$	402	$	12.39		3.2

Exercisable as of March 31, 2020					441,197		$	402	$	12.37		3.2

	Shares/ Units			Weighted Average Grant Date Fair Value
Non-vested balance as of September 30, 2019		779,627		$	18.71
Changes during the period
Awards granted		418,771		$	16.53
Awards vested		(152,625	)	$	16.35
Awards forfeited		(7,150	)	$	18.96
Non-vested balance as of March 31, 2020		1,038,623

Period	Total Number of Shares Purchased (1)		Average Price Paid per share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Maximum Number of Shares that may be Purchased Under the Plans or Programs
January 1, 2020 - January 31, 2020		-		-		-		626,831
February 1, 2020 - February 29, 2020		-		-		-		626,831
March 1, 2020 - March 31, 2020		60,236		7.83		60,236		9,939,764
Total		60,236	$	7.83		60,236		9,939,764

3.1		Articles of Incorporation of MarineMax, Inc., a Florida corporation. (1)

3.2		Bylaws of MarineMax, Inc., a Florida corporation. (1)

4.1		Form of Common Stock Certificate. (1)

10.1		Amended 2008 Employee Stock Purchase Plan.(2)

10.2		2011 Stock-Based Compensation Plan.(3)

31.1		Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a), promulgated under the Securities Exchange Act of 1934, as amended.

31.2		Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a), promulgated under the Securities Exchange Act of 1934, as amended.

32.1		Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2		Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

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		MARINEMAX, INC.

April 29, 2020	By:	/s/ Michael H. McLamb

		Michael H. McLamb
		Executive Vice President,
		Chief Financial Officer, Secretary, and Director
		(Principal Accounting and Financial Officer)

	Six Months Ended
	March 31,
	2019			2020
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	10,213		$	14,124
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation and amortization		5,576			6,150
Deferred income tax provision		1,504			1,469
Loss (gain) on sale of property and equipment		42			(824	)
Proceeds from insurance settlements		475			703
Stock-based compensation expense		3,188			3,286
(Increase) decrease in —
Accounts receivable, net		(12,257	)		5,898
Inventories, net		(78,038	)		(29,419	)
Prepaid expenses and other assets		(3,109	)		(41	)
Increase (decrease) in —
Accounts payable		(11,508	)		(18,427	)
Customer deposits		16,324			2,489
Accrued expenses and other liabilities		5,389			(4,016	)
Net cash used in operating activities		(62,201	)		(18,608	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment		(7,931	)		(6,135	)
Proceeds from insurance settlements		280			—
Net cash used in acquisition of businesses		—			(1,400	)
Proceeds from sale of property and equipment		104			2,410
Net cash used in investing activities		(7,547	)		(5,125	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net borrowings on short-term borrowings		84,581			50,833
Net proceeds from issuance of common stock under incentive compensation and employee purchase plans		1,826			1,030
Contingent acquisition consideration payments		(129	)		(148	)
Payments on tax withholdings for equity awards		(1,525	)		(1,674	)
Purchases of treasury stock		(229	)		(472	)
Net cash provided by financing activities		84,524			49,569
Effect of exchange rate changes on cash		—			59
NET INCREASE IN CASH AND CASH EQUIVALENTS		14,776			25,895
CASH AND CASH EQUIVALENTS, beginning of period		48,822			38,511
CASH AND CASH EQUIVALENTS, end of period	$	63,598		$	64,406
Supplemental Disclosures of Cash Flow Information:
Cash paid for:
Interest	$	6,282		$	8,173

	Three Months Ended						Six Months Ended
	March 31,						March 31,
	2019			2020			2019			2020
Goods and services transferred at a point in time		92.4	%		92.1	%		90.6	%		91.5	%
Goods and services transferred over time		7.6	%		7.9	%		9.4	%		8.5	%
Total Revenue		100.0	%		100.0	%		100.0	%		100.0	%

	Three Months Ended		Six Months Ended
	March 31,		March 31,
	2019	2020	2019	2020
Dividend yield	0.0%	0.0%	0.0%	0.0%
Risk-free interest rate	2.4%	1.8%	2.4%	1.8%
Volatility	52.2%	52.4%	52.2%	52.4%
Expected life	Six months	Six months	Six months	Six months