Marinemax Inc 10-Q for FY2020 Q3

Marinemax Inc (HZO)

10-Q 2020-07-28 For: 2020-06-30

Added on April 10, 2026

About this 10-Q

Marinemax Inc filed this 10-Q on July 28, 2020, covering the quarter ended June 30, 2020 (FY2020 Q3).

Headline figures

Quarter ended June 30, 2020, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $498.3M; up 29.9% from $383.49M a year earlier
Net income: $34.93M; up 83.0% from net income of $19.09M a year earlier
Diluted EPS: $1.58; up 88.1% from $0.84 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 Nine Months Ended June 30, 2019 and 2020	3
	Condensed Consolidated Statements of Comprehensive Income for the Three and Nine Months Ended June 30, 2019 and 2020	4
	Condensed Consolidated Balance Sheets as of September 30, 2019 and June 30, 2020	5
	Condensed Consolidated Statements of Stockholders’ Equity for the Nine Months Ended June 30, 2019 and 2020	6
	Condensed Consolidated Statements of Cash Flows for the Nine Months Ended June 30, 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		26
1.	Legal Proceedings	26
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
EX – 101 LABEL LINKBASE DOCUMENT
EX – 101 PRESENTATION LINKBASE DOCUMENT

	Three Months Ended				Nine Months Ended
	June 30,				June 30,
	2019		2020		2019		2020
Revenue	$	383,494	$	498,304	$	929,017	$	1,110,951
Cost of sales		285,784		374,851		693,627		828,704
Gross profit		97,710		123,453		235,390		282,247

Selling, general, and administrative expenses		68,968		74,838		187,436		208,284
Income from operations		28,742		48,615		47,954		73,963

Interest expense		2,936		2,133		8,485		8,490
Income before income tax provision		25,806		46,482		39,469		65,473

Income tax provision		6,719		11,555		10,169		16,422
Net income	$	19,087	$	34,927	$	29,300	$	49,051

Basic net income per common share	$	0.86	$	1.62	$	1.30	$	2.28

Diluted net income per common share	$	0.84	$	1.58	$	1.26	$	2.23

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

Basic		22,243,895		21,499,408		22,619,802		21,491,117
Diluted		22,821,202		22,045,900		23,212,983		21,965,355

	September 30,			June 30,
	2019			2020
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	38,511		$	86,919
Accounts receivable, net		42,398			69,478
Inventories, net		477,468			314,096
Prepaid expenses and other current assets		10,206			11,133
Total current assets		568,583			481,626
Property and equipment, net of accumulated depreciation of $77,798 and $86,362		144,298			141,897
Operating lease right-of-use assets, net		-			39,279
Goodwill and other intangible assets, net		64,077			65,404
Other long-term assets		7,125			7,754
Total assets	$	784,083		$	735,960
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable	$	33,674		$	39,441
Customer deposits		24,305			30,106
Accrued expenses		42,849			47,775
Current operating lease liabilities		-			7,262
Short-term borrowings		312,065			147,049
Total current liabilities		412,893			271,633
Noncurrent operating lease liabilities		-			34,248
Deferred tax liabilities, net		1,142			4,221
Other long-term liabilities		1,229			833
Total liabilities		415,264			310,935
SHAREHOLDERS' EQUITY:
Preferred stock, $.001 par value, 1,000,000 shares authorized, none issued or outstanding as of September 30, 2019 and June 30, 2020		—			—
Common stock, $.001 par value, 40,000,000 shares authorized, 27,508,473 and 27,798,415 shares issued and 21,321,688 and 21,531,394 shares outstanding as of September 30, 2019 and June 30, 2020, respectively		28			28
Additional paid-in capital		269,969			276,606
Accumulated other comprehensive loss		(669	)		(130	)
Retained earnings		202,455			252,116
Treasury stock, at cost, 6,186,785 and 6,267,021 shares held as of September 30, 2019 and June 30, 2020, respectively		(102,964	)		(103,595	)
Total shareholders’ equity		368,819			425,025
Total liabilities and shareholders’ equity	$	784,083		$	735,960

					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
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 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
Net income		—		—		—			—			34,927		—			34,927
Purchase of treasury stock		—		—		—			—			—		(159	)		(159	)
Shares issued pursuant to employee stock purchase plan		56,389		—		499			—			—		—			499
Shares issued upon vesting of equity awards, net of minimum tax withholding		9,985				(29	)										(29	)
Shares issued upon exercise of stock options		10,000		—		89			—			—		—			89
Stock-based compensation		4,378		—		2,238			—			—		—			2,238
Foreign currency translation adjustments, net of tax		—		—		—			383			—		—			383
BALANCE, June 30, 2020		27,798,415	$	28	$	276,606		$	(130	)	$	252,116	$	(103,595	)	$	425,025

	(Amounts in thousands)
2020	$	9,857
2021		8,054
2022		6,671
2023		5,589
2024		3,663
Thereafter		27,999
Total lease payments		61,833
Less: interest		(20,323	)
Present value of lease liabilities	$	41,510

	(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 Nine Months Ended
	June 30,
	2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	7,560
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	1,670

	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		-			(51,167	)		-		12.00
Restricted stock awards issued		(458,771	)		-			-		-
Restricted stock awards forfeited		7,150			-			-		-
Additional shares of stock issued		(10,056	)		-			-		-
Balance as of June 30, 2020		1,253,913			432,864		$	4,188	$	12.47		3.0

Exercisable as of June 30, 2020					432,864		$	4,188	$	12.47		3.0

	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		458,771		$	16.84
Awards vested		(165,825	)	$	16.65
Awards forfeited		(7,150	)	$	18.96
Non-vested balance as of June 30, 2020		1,065,423

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
April 1, 2020 - April 30, 2020		20,000		7.96		20,000		9,919,764
May 1, 2020 - May 31, 2020		-		-		-		-
June 1, 2020 - June 30, 2020		-		-		-		-
Total		20,000		7.96		20,000		9,919,764

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†		Loan and Security Agreement, dated May 20, 2020, by and among MarinMax, Inc. and its subsidiaries, Wells Fargo Commercial Distribution Finance, LLC, M&T Bank, Bank of the West, and Truist Bank.

10.2†		Sixth Amended and Restated Program Terms Letter, dated May 20, 2020, by and among MarineMax, Inc. and its subsidiaries, as Borrowers, and Wells Fargo Commercial Distribution Finance LLC.

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.

DATE July 28, 2020	By:	/s/ Michael H. McLamb

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

	Nine Months Ended
	June 30,
	2019			2020
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	29,300		$	49,051
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		8,466			9,454
Deferred income tax provision		4,555			2,869
Gain on sale of property and equipment		(287	)		(822	)
Proceeds from insurance settlements		475			703
Stock-based compensation expense		4,963			5,524
(Increase) decrease in, net of effects of acquisitions —
Accounts receivable, net		(15,500	)		(27,722	)
Inventories, net		(41,591	)		163,372
Prepaid expenses and other assets		(5,777	)		(1,799	)
Increase in, net of effects of acquisitions —
Accounts payable		7,909			5,721
Customer deposits		6,761			5,801
Accrued expenses and other liabilities		5,167			9,181
Net cash provided by operating activities		4,441			221,333
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment		(13,365	)		(8,234	)
Proceeds from insurance settlements		280			—
Cash used in acquisition of businesses, net of cash acquired		(13,260	)		(1,400	)
Proceeds from sale of property and equipment		965			2,410
Net cash used in investing activities		(25,380	)		(7,224	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net borrowings on short-term borrowings		63,357			(165,016	)
Net proceeds from issuance of common stock under incentive compensation and employee purchase plans		2,341			1,618
Contingent acquisition consideration payments		(129	)		(148	)
Payments on tax withholdings for equity awards		(1,525	)		(1,703	)
Purchases of treasury stock		(20,309	)		(631	)
Net cash provided by (used in) financing activities		43,735			(165,880	)
Effect of exchange rate changes on cash		—			179
NET INCREASE IN CASH AND CASH EQUIVALENTS		22,796			48,408
CASH AND CASH EQUIVALENTS, beginning of period		48,822			38,511
CASH AND CASH EQUIVALENTS, end of period	$	71,618		$	86,919
Supplemental Disclosures of Cash Flow Information:
Cash paid for:
Interest	$	9,937		$	11,663

	Three Months Ended						Nine Months Ended
	June 30,						June 30,
	2019			2020			2019			2020
Goods and services transferred at a point in time		91.1	%		94.1	%		90.8	%		92.6	%
Goods and services transferred over time		8.9	%		5.9	%		9.2	%		7.4	%
Total Revenue		100.0	%		100.0	%		100.0	%		100.0	%

	Three Months Ended		Nine Months Ended
	June 30,		June 30,
	2019	2020	2019	2020
Dividend yield	0.0%	0.0%	0.0%	0.0%
Risk-free interest rate	2.5%	0.1%	2.4%	0.8%
Volatility	45.3%	80.9%	48.2%	70.3%
Expected life	Six Months	Six Months	Six Months	Six Months