Marinemax Inc 10-Q for FY2021 Q1

Marinemax Inc (HZO)

10-Q 2021-02-02 For: 2020-12-31

Added on April 10, 2026

About this 10-Q

Marinemax Inc filed this 10-Q on February 2, 2021, covering the quarter ended December 31, 2020 (FY2021 Q1).

Headline figures

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

Revenue: $411.52M; up 35.3% from $304.17M a year earlier
Net income: $23.6M; up 160.5% from net income of $9.06M a year earlier
Diluted EPS: $1.04; up 153.7% from $0.41 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 Months Ended December 31, 2019 and 2020	3
	Condensed Consolidated Statements of Comprehensive Income for the Three Months Ended December 31, 2019 and 2020	4
	Condensed Consolidated Balance Sheets as of September 30, 2020 and December 31, 2020	5
	Condensed Consolidated Statements of Shareholders’ Equity for the Three Months Ended December 31, 2019 and 2020	6
	Condensed Consolidated Statements of Cash Flows for the Three Months Ended December 31, 2019 and 2020	7
	Notes to Condensed Consolidated Financial Statements	8

2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	18

3.	Quantitative and Qualitative Disclosures About Market Risk	24

4.	Controls and Procedures	25

PART II. OTHER INFORMATION		25
1.	Legal Proceedings	25
1A.	Risk Factors	25
2.	Unregistered Sales of Equity Securities and Use of Proceeds	26
3.	Defaults Upon Senior Securities	26
4.	Mine Safety Disclosures	26
5.	Other Information	26
6.	Exhibits	27
SIGNATURES		28

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
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	Three Months Ended
	December 31,
	2019		2020
Revenue	$	304,172	$	411,524
Cost of sales		224,154		288,123
Gross profit		80,018		123,401

Selling, general, and administrative expenses		64,386		91,417
Income from operations		15,632		31,984

Interest expense		3,344		1,268
Income before income tax provision		12,288		30,716

Income tax provision		3,229		7,116
Net income	$	9,059	$	23,600

Basic net income per common share	$	0.42	$	1.07

Diluted net income per common share	$	0.41	$	1.04

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

Basic		21,453,914		22,025,898
Diluted		21,890,065		22,745,125

	September 30,			December 31,
	2020			2020
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	155,493		$	120,939
Accounts receivable, net		40,195			44,001
Inventories, net		298,002			378,863
Prepaid expenses and other current assets		9,637			14,583
Total current assets		503,327			558,386
Property and equipment, net of accumulated depreciation of $86,270 and $89,287		141,934			149,657
Operating lease right-of-use assets, net		37,991			105,633
Goodwill and other intangible assets, net		84,293			143,114
Other long-term assets		7,774			8,098
Total assets	$	775,319		$	964,888
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable	$	37,343		$	22,379
Contract liabilities (customer deposits)		31,821			55,389
Accrued expenses		52,123			67,457
Short-term borrowings		144,393			163,394
Current maturities on long-term debt		—			2,704
Current operating lease liabilities		6,854			9,861
Total current liabilities		272,534			321,184
Long-term debt, net of current maturities		7,343			50,124
Noncurrent operating lease liabilities		33,473			98,220
Deferred tax liabilities, net		4,509			5,911
Other long-term liabilities		2,063			6,867
Total liabilities		319,922			482,306
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS’ EQUITY:
Preferred stock, $.001 par value, 1,000,000 shares authorized, none issued or outstanding as of September 30, 2020 and December 31, 2020		—			—
Common stock, $.001 par value, 40,000,000 shares authorized, 28,130,312 and 28,393,710 shares issued and 21,863,291 and 22,126,689 shares outstanding as of September 30, 2020 and December 31, 2020, respectively		28			28
Additional paid-in capital		280,436			283,101
Accumulated other comprehensive income		829			1,749
Retained earnings		277,699			301,299
Treasury stock, at cost, 6,267,021 and 6,267,021 shares held as of September 30, 2020 and December 31, 2020, respectively		(103,595	)		(103,595	)
Total shareholders’ equity		455,397			482,582
Total liabilities and shareholders’ equity	$	775,319		$	964,888

					Additional			Accumulated Other							Total
	Common Stock				Paid-in			Comprehensive		Retained		Treasury			Shareholders’
	Shares		Amount		Capital			Earnings		Earnings		Stock			Equity
BALANCE, September 30, 2020		28,130,312	$	28	$	280,436		$	829	$	277,699	$	(103,595	)	$	455,397
Net income		—		—		—			—		23,600		—			23,600
Shares issued pursuant to employee stock purchase plan		83,572		—		740			—		—		—			740
Shares issued upon vesting of equity awards, net of minimum tax withholding		121,303		—		(871	)		—		—		—			(871	)
Shares issued upon exercise of stock options		56,746		—		783			—		—		—			783
Stock-based compensation		1,777		—		2,013			—		—		—			2,013
Other comprehensive income		—		—		—			920		—		—			920
BALANCE, December 31, 2020	$	28,393,710	$	28	$	283,101		$	1,749	$	301,299	$	(103,595	)	$	482,582

	(Amounts in thousands)
2021	$	15,640
2022		13,876
2023		12,625
2024		10,754
2025		9,595
Thereafter		93,919
Total lease payments		156,409
Less: interest		(48,328	)
Present value of lease liabilities	$	108,081

	(Amounts in thousands)
Consideration:
Cash purchase price and net working capital adjustments, net of cash acquired of $30,615	$	50,261
Contingent consideration arrangement		8,200
Fair value of total consideration transferred	$	58,461

Recognized amounts of identifiable assets acquired and liabilities assumed:
Current assets, net of cash acquired of $30,615	$	50,688
Property and equipment		4,859
Intangible assets		1,978
Current liabilities		(55,427	)
Total identifiable net assets acquired:		2,098
Goodwill	$	56,363
Total	$	58,461

( amounts in thousands)	December 31, 2020
Mortgage facility payable to Flagship Bank bearing interest at 2.25% (prime minus 100 basis points with a floor of 2.00%). Requires monthly principal and interest payments with a balloon payment of approximately $4.0 million due August 2027.	$	7,272
Mortgage facility payable to Seacoast National Bank bearing interest at 3.0% (greater of 3% or prime minus 62.5 basis points). Requires monthly interest payments for the first year and then monthly principal and interest payments with a balloon payment of approximately $6.0 million due September 2031.		17,675
Mortgage facility payable to Hancock Whitney Bank bearing interest at 2.6% ( prime minus 62.5 basis points with a floor of 2.25%). Requires monthly principal and interest payments with a balloon payment of approximately $15.5 million due November 2027. 50% of the outstanding borrowings are hedged with an interest rate swap contract with a fixed rate of 3.2%.		28,540
Revolving mortgage facility with FineMark National Bank & Trust bearing interest at 3.0% (base minus 25 basis points with a floor of 3%). Facility matures in September 2027. Current available borrowings under the facility were approximately $26.4 million at December 31, 2020.		—
		53,487
Less current portion		(2,704	)
Less unamortized portion of debt issuance costs		(659	)
	$	50,124

	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, 2020		1,275,415			196,329		$	2,636	$	12.12		2.5
Options granted		-			-			-		-
Options cancelled/forfeited/expired		10,000			(10,000	)		-		-
Options exercised		-			(56,746	)		-
Restricted stock awards issued		(336,091	)		-			-		-
Restricted stock awards forfeited		3,000			-			-		-
Additional shares of stock issued		(1,777	)		-			-		-
Balance as of December 31, 2020		950,547			129,583		$	3,116	$	11.71		2.5
Exercisable as of December 31, 2020					129,583		$	3,116	$	11.71		2.5

	Shares/ Units			Weighted Average Grant Date Fair Value
Non-vested balance as of September 30, 2020		902,631		$	18.08
Changes during the period
Awards granted		336,091		$	30.04
Awards vested		(152,625	)	$	17.01
Awards forfeited		(3,000	)	$	17.39
Non-vested balance as of December 31, 2020		1,083,097

Period	Total Number of Shares Purchased (1)(2)		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
October 1, 2020 - October 31, 2020		-		-		-		9,919,764
November 1, 2020 - November 30, 2020		27,822	$	31.30		-		9,919,764
December 1, 2020 - December 31, 2020		-		-		-		9,919,764
Total		27,822	$	31.30		-		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		Sales and Service Agreement, dated October 30, 2020, between Registrant and Boston Whaler, Inc. (2)

10.2		Sales and Service Agreement, dated October 30, 2020, between Registrant and Sea Ray Division of Brunswick Corporation. (2)

10.3		Equity Purchase Agreement dated October 1, 2020, by and among Skipper Marine Holdings, Inc., SSY Holdings, Inc., Michael J. Pretasky, Sr., Michael John Pretasky, Jr. 2014 Trust, Mark Ellerbrock, and Robert Ross Tefft, Jr., Michael J. Pretasky, Jr., and MarineMax, Inc. (2)

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.

February 2, 2021	By:	/s/ Michael H. McLamb

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

	Three Months Ended
	December 31,
	2019			2020
Goods and services transferred at a point in time		90.8	%		90.5	%
Goods and services transferred over time		9.2	%		9.5	%
Total Revenue		100.0	%		100.0	%

	Three Months Ended
	December 31,
	2019	2020
Dividend yield	0.0%	0.0%
Risk-free interest rate	1.8%	0.1%
Volatility	52.4%	70.2%
Expected life	Six Months	Six Months

	/s/ W. BRETT McGILL
	W. Brett McGill
	Chief Executive Officer and President
	(Principal Executive Officer)

Date: February 2, 2021


	/s/ MICHAEL H. MCLAMB
	Michael H. McLamb
	Chief Financial Officer
	(Principal Financial Officer)

Date: February 2, 2021