Marinemax Inc 10-Q for FY2020 Q1

Marinemax Inc (HZO)

10-Q 2020-01-30 For: 2019-12-31

Added on April 10, 2026

About this 10-Q

Marinemax Inc filed this 10-Q on January 30, 2020, covering the quarter ended December 31, 2019 (FY2020 Q1).

Headline figures

Quarter ended December 31, 2019, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $304.17M; up 25.7% from $241.94M a year earlier
Net income: $9.06M; up 84.5% from net income of $4.91M a year earlier
Diluted EPS: $0.41; up 95.2% from $0.21 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, 2018 and 2019	3
	Condensed Consolidated Statements of Comprehensive Income for the Three Months Ended December 31, 2018 and 2019	4
	Condensed Consolidated Balance Sheets as of September 30, 2019 and December 31, 2019	5
	Condensed Consolidated Statements of Stockholders’ Equity for the Three Months Ended December 31, 2018 and 2019	6
	Condensed Consolidated Statements of Cash Flows for the Three Months Ended December 31, 2018 and 2019	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	24

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

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
	December 31,
	2018		2019
Revenue	$	241,937	$	304,172
Cost of sales		178,459		224,154
Gross profit		63,478		80,018

Selling, general, and administrative expenses		54,492		64,386
Income from operations		8,986		15,632

Interest expense		2,516		3,344
Income before income tax provision		6,470		12,288

Income tax provision		1,560		3,229
Net income	$	4,910	$	9,059

Basic net income per common share	$	0.22	$	0.42

Diluted net income per common share	$	0.21	$	0.41

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

Basic		22,779,567		21,453,914
Diluted		23,400,685		21,890,065

	September 30,			December 31,
	2019			2019
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	38,511		$	35,985
Accounts receivable, net		42,398			36,118
Inventories, net		477,468			493,943
Prepaid expenses and other current assets		10,206			11,009
Total current assets		568,583			577,055
Property and equipment, net of accumulated depreciation of $77,798 and $80,823		144,298			144,756
Operating lease right-of-use assets, net		-			41,335
Goodwill and other intangible assets, net		64,077			64,479
Other long-term assets		7,125			7,781
Total assets	$	784,083		$	835,406
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable	$	33,674		$	18,159
Customer deposits		24,305			20,198
Accrued expenses		42,849			35,436
Current operating lease liabilities		-			6,898
Short-term borrowings		312,065			334,085
Total current liabilities		412,893			414,776
Noncurrent operating lease liabilities		-			36,325
Deferred tax liabilities, net		1,142			2,413
Other long-term liabilities		1,229			1,145
Total liabilities		415,264			454,659
SHAREHOLDERS' EQUITY:
Preferred stock, $.001 par value, 1,000,000 shares authorized, none issued or outstanding as of September 30, 2019 and December 31, 2019		—			—
Common stock, $.001 par value, 40,000,000 shares authorized, 27,508,473 and 27,686,764 shares issued and 21,321,688 and 21,499,979 shares outstanding as of September 30, 2019 and December 31, 2019, respectively		28			28
Additional paid-in capital		269,969			271,622
Accumulated other comprehensive loss		(669	)		(63	)
Retained earnings		202,455			212,124
Treasury stock, at cost, 6,186,785 and 6,186,785 shares held as of September 30, 2019 and December 31, 2019, respectively		(102,964	)		(102,964	)
Total shareholders’ equity		368,819			380,747
Total liabilities and shareholders’ equity	$	784,083		$	835,406

					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

	(Amounts in thousands)
2020	$	9,619
2021		8,436
2022		6,965
2023		6,161
2024		4,562
Thereafter		28,320
Total lease payments		64,063
Less: interest		(20,840	)
Present value of lease liabilities	$	43,223

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

	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
Options granted		-			-			-		-
Options cancelled/forfeited/expired		-			-			-		-
Options exercised		-			(28,667	)		-		11.42
Restricted stock awards issued		(417,021	)		-			-		-
Restricted stock awards forfeited		2,450			-			-		-
Additional shares of stock issued		(2,946	)		-			-		-
Balance as of December 31, 2020		298,073			455,364		$	1,932	$	12.49		3.5

Exercisable as of December 31, 2019					449,697		$	1,928	$	12.43		3.5

	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		417,021		$	16.53
Awards vested		(152,625	)	$	16.35
Awards forfeited		(2,450	)	$	19.96
Non-vested balance as of December 31, 2019		1,041,573

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, 2019 - October 31, 2019		-		-		-		626,831
November 1, 2019 - November 30, 2019		28,632	$	16.61		-		626,831
December 1, 2019 - December 31, 2019		-		-		-		626,831
Total		28,632	$	16.61		-		626,831

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†		Second Amendment to Fourth Amended and Restated Inventory Financing, Fifth Amended and Restated program Terms Letter, and Fourth Amended and Restated [**********], executed on November 8, 2019, 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.

101.INS		XBRL Instance Document - The instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document

101.SCH		XBRL Taxonomy Extension Schema Document

101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF		XBRL Taxonomy Extension Definition Linkbase Document

101.LAB		XBRL Taxonomy Extension Label Linkbase Document

101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document

		MARINEMAX, INC.

January 30, 2020	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,
	2018			2019
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	4,910		$	9,059
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation and amortization		2,775			3,007
Deferred income tax provision		683			1,061
Loss on sale of property and equipment		84			24
Proceeds from insurance settlements		475			—
Stock-based compensation expense		1,448			1,513
(Increase) decrease in —
Accounts receivable, net		7,817			6,345
Inventories, net		(68,946	)		(16,475	)
Prepaid expenses and other assets		(5,013	)		(1,687	)
Increase (decrease) in —
Accounts payable		(11,294	)		(15,559	)
Customer deposits		4,065			(4,107	)
Accrued expenses and other liabilities		(2,093	)		(2,479	)
Net cash used in operating activities		(65,089	)		(19,298	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment		(3,025	)		(4,398	)
Proceeds from sale of property and equipment		43			—
Net cash used in investing activities		(2,982	)		(4,398	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net (payments) borrowings on short-term borrowings		57,766			22,020
Net proceeds from issuance of common stock under incentive compensation and employee purchase plans		1,818			616
Payments on tax withholdings for equity awards		(1,525	)		(1,674	)
Purchase of treasury stock		(229	)		—
Net cash provided by financing activities		57,830			20,962
Effect of exchange rate changes on cash		—			208
NET DECREASE IN CASH AND CASH EQUIVALENTS		(10,241	)		(2,526	)
CASH AND CASH EQUIVALENTS, beginning of period		48,822			38,511
CASH AND CASH EQUIVALENTS, end of period	$	38,581		$	35,985
Supplemental Disclosures of Cash Flow Information:
Cash paid for:
Interest	$	2,711		$	4,093
Income taxes		—			161
Non-cash items:
Initial operating lease right-of-use assets for adoption of ASU 2016-02	$	-		$	42,070

	Three Months Ended
	December 31,
	2018			2019
Goods and services transferred at a point in time		88.3	%		90.8	%
Goods and services transferred over time		11.7	%		9.2	%
Total Revenue		100.0	%		100.0	%

	Three Months Ended
	December 31,
	2018	2019
Dividend yield	0.0%	0.0%
Risk-free interest rate	2.4%	1.8%
Volatility	52.2%	52.4%
Expected life	Six months	Six months