Marinemax Inc 10-Q for FY2021 Q3

Marinemax Inc (HZO)

10-Q 2021-07-27 For: 2021-06-30

Added on April 10, 2026

About this 10-Q

Marinemax Inc filed this 10-Q on July 27, 2021, covering the quarter ended June 30, 2021 (FY2021 Q3).

Headline figures

Quarter ended June 30, 2021, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $666.33M; up 33.7% from $498.3M a year earlier
Net income: $59.62M; up 70.7% from net income of $34.93M a year earlier
Diluted EPS: $2.59; up 63.9% from $1.58 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, 2020 and 2021	3
	Condensed Consolidated Statements of Comprehensive Income for the Three and Nine Months Ended June 30, 2020 and 2021	4
	Condensed Consolidated Balance Sheets as of September 30, 2020 and June 30, 2021	5
	Condensed Consolidated Statements of Shareholders’ Equity for the Nine Months Ended June 30, 2020 and 2021	6
	Condensed Consolidated Statements of Cash Flows for the Nine Months Ended June 30, 2020 and 2021	8
	Notes to Condensed Consolidated Financial Statements	9

2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21

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	26
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	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
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,
	2020		2021		2020		2021
Revenue	$	498,304	$	666,328	$	1,110,951	$	1,600,947
Cost of sales		374,851		461,654		828,704		1,116,066
Gross profit		123,453		204,674		282,247		484,881

Selling, general, and administrative expenses		74,838		123,766		208,284		319,120
Income from operations		48,615		80,908		73,963		165,761

Interest expense		2,133		639		8,490		2,999
Income before income tax provision		46,482		80,269		65,473		162,762

Income tax provision		11,555		20,651		16,422		40,609
Net income	$	34,927	$	59,618	$	49,051	$	122,153

Basic net income per common share	$	1.62	$	2.69	$	2.28	$	5.53

Diluted net income per common share	$	1.58	$	2.59	$	2.23	$	5.33

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

Basic		21,499,408		22,132,915		21,491,117		22,100,190
Diluted		22,045,900		23,037,679		21,965,355		22,922,526

	September 30,			June 30,
	2020			2021
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	155,493		$	200,121
Accounts receivable, net		40,195			60,195
Inventories, net		298,002			209,418
Prepaid expenses and other current assets		9,637			18,316
Total current assets		503,327			488,050
Property and equipment, net of accumulated depreciation of $86,270 and $95,706		141,934			166,058
Operating lease right-of-use assets, net		37,991			104,641
Goodwill and other intangible assets, net		84,293			186,691
Other long-term assets		7,774			10,650
Total assets	$	775,319		$	956,090
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable	$	37,343		$	28,741
Contract liabilities (customer deposits)		31,821			86,704
Accrued expenses		52,123			89,696
Short-term borrowings		144,393			2,861
Current maturities on long-term debt		—			3,293
Current operating lease liabilities		6,854			10,275
Total current liabilities		272,534			221,570
Long-term debt, net of current maturities		7,343			48,374
Noncurrent operating lease liabilities		33,473			96,830
Deferred tax liabilities, net		4,509			8,419
Other long-term liabilities		2,063			8,126
Total liabilities		319,922			383,319
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 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 June 30, 2021, respectively		28			28
Additional paid-in capital		280,436			288,923
Accumulated other comprehensive income		829			1,264
Retained earnings		277,699			399,852
Treasury stock, at cost, 6,267,021 and 6,556,844 shares held as of September 30, 2020 and June 30, 2021, respectively		(103,595	)		(117,296	)
Total shareholders’ equity		455,397			572,771
Total liabilities and shareholders’ equity	$	775,319		$	956,090

					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
Net income		—		—		—			—			38,935		—			38,935
Shares issued upon vesting of equity awards, net of minimum tax withholding		9,899		—		(154	)		—			—		—			(154	)
Shares issued upon exercise of stock options		15,333		—		186			—			—		—			186
Stock-based compensation		1,597		—		2,399			—			—		—			2,399
Other comprehensive loss		—		—		—			(644	)		—		—			(644	)
BALANCE, March 31, 2021		28,420,539		28		285,532			1,105			340,234		(103,595	)		523,304
Net income		—		—		—			—			59,618		—			59,618
Purchase of treasury stock		—		—		—			—			—		(13,701	)		(13,701	)
Shares issued pursuant to employee stock purchase plan		38,412		—		838			—			—		—			838
Shares issued upon exercise of stock options		4,500		—		71			—			—		—			71
Stock-based compensation		913		—		2,482			—			—		—			2,482
Other comprehensive income		—		—		—			159			—		—			159
BALANCE, June 30, 2021		28,464,364	$	28	$	288,923		$	1,264		$	399,852	$	(117,296	)	$	572,771

	Nine Months Ended June 30,
	2020			2021
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	49,051		$	122,153
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		9,454			11,579
Deferred income tax provision		2,869			3,910
Gain on sale of property and equipment		(822	)		—
Proceeds from insurance settlements		703			941
Stock-based compensation expense		5,524			6,894
(Increase) decrease in, net of effects of acquisitions —
Accounts receivable, net		(27,722	)		(13,452	)
Inventories, net		163,372			157,036
Prepaid expenses and other assets		(1,799	)		(5,329	)
(Decrease) Increase in, net of effects of acquisitions —
Accounts payable		5,721			(13,316	)
Contract liabilities (customer deposits)		5,801			47,110
Accrued expenses and other liabilities		9,181			12,088
Net cash provided by operating activities		221,333			329,614
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment		(8,234	)		(18,473	)
Cash used in acquisition of businesses, net of cash acquired		(1,400	)		(111,709	)
Purchases of investments		—			(2,250	)
Proceeds from insurance settlements		—			1,080
Proceeds from sale of property and equipment		2,410			247
Net cash used in investing activities		(7,224	)		(131,105	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net payments for short-term borrowings		(165,016	)		(183,737	)
Proceeds from long-term debt		—			46,375
Payments for long-term debt		—			(1,539	)
Payments for debt issuance costs		—			(910	)
Contingent acquisition consideration payments		(148	)		(1,000	)
Purchase of treasury stock		(631	)		(13,701	)
Net proceeds from issuance of common stock under incentive compensation and employee purchase plans		1,618			2,619
Payments on tax withholdings for equity awards		(1,703	)		(2,178	)
Net cash used in financing activities		(165,880	)		(154,071	)
Effect of exchange rate changes on cash		179			190
NET INCREASE IN CASH AND CASH EQUIVALENTS		48,408			44,628
CASH AND CASH EQUIVALENTS, beginning of period		38,511			155,493
CASH AND CASH EQUIVALENTS, end of period	$	86,919		$	200,121
Supplemental disclosures of cash flow information:
Cash paid for:
Interest	$	11,663		$	3,830
Income taxes		4,904			31,299
Non-cash items:
Initial operating lease right-of-use assets for adoption of ASU 2016-02		42,070			—
Initial current and noncurrent operating lease liabilities for adoption of ASU 2016-02		43,953			—
Contingent consideration liabilities from acquisitions		—			8,200

	Retail Operations						Product Manufacturing
	Three Months Ended						Three Months Ended
	June 30, 2020			June 30, 2021			June 30, 2020		June 30, 2021
Goods and services transferred at a point in time		94.1	%		92.4	%		-		100.0	%
Goods and services transferred over time		5.9	%		7.6	%		-		-
Total revenue		100.0	%		100.0	%		-		100.0	%

	(Amounts in thousands)
2021	$	4,110
2022		15,373
2023		14,116
2024		11,960
2025		9,966
Thereafter		97,233
Total lease payments		152,758
Less: interest		(45,653	)
Present value of lease liabilities	$	107,105

(Amounts in thousands)	As of September 30, 2020		As of June 30, 2021
New and used boats, motors, and trailers	$	289,291	$	177,743
Parts, accessories, and other		8,711		11,838
Work-in-process		-		10,108
Raw materials		-		9,729
Total inventories	$	298,002	$	209,418

	(Amounts in thousands)
Consideration:
Fair value of total consideration transferred	$	61,448

Recognized amounts of identifiable assets acquired and liabilities assumed:
Current assets, net of cash acquired of $5,933	$	29,869
Property and equipment		12,126
Intangible assets		4,602
Current liabilities		(25,283	)
Total identifiable net assets acquired:		21,314
Goodwill	$	40,134
Total	$	61,448

	(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)	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%). Requires monthly principal and interest payments with a balloon payment of approximately $4.0 million due August 2027.	$	7,025
Mortgage facility payable to Seacoast National Bank bearing interest at 3.00% (greater of 3.00% 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 2.63% (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 3.20%.		27,584
Revolving mortgage facility with FineMark National Bank & Trust bearing interest at 3.00% (base minus 25 basis points with a floor of 3.00%). Facility matures in September 2027. Current available borrowings under the facility were approximately $26.1 million at June 30, 2021.		—
		52,284
Less current portion		(3,293	)
Less unamortized portion of debt issuance costs		(617	)
	$	48,374

	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 cancelled/forfeited/expired		10,000			(10,000	)		-		-
Options exercised		-			(75,579	)		-		-
Restricted stock awards issued		(337,616	)		-			-		-
Restricted stock awards forfeited		6,175			-			-		-
Additional shares of stock issued		(4,287	)		-			-		-
Balance as of June 30, 2021		949,687			110,750		$	4,085	$	11.49		1.9
Exercisable as of June 30, 2021					110,750		$	4,085	$	11.49		1.9

	Three Months Ended		Nine Months Ended
	June 30,		June 30,
	2020	2021	2020	2021
Dividend yield	0.0%	0.0%	0.0%	0.0%
Risk-free interest rate	0.1%	0.0%	0.8%	0.1%
Volatility	80.9%	68.7%	70.3%	69.5%
Expected life	Six Months	Six Months	Six Months	Six Months

	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		337,616		$	30.13
Awards vested		(165,825	)	$	17.26
Awards forfeited		(6,175	)	$	19.82
Non-vested balance as of June 30, 2021		1,068,247		$	22.28

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, 2021 - April 30, 2021		-	$	-		-		9,919,764
May 1, 2021 - May 31, 2021		-		-		-		9,919,764
June 1, 2021 - June 30, 2021		289,823		47.27		289,823		9,629,941
Total		289,823	$	47.27		289,823		9,629,941

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		Stock Purchase Agreement, dated May 2, 2021, by and between Kenneth C. Stock, Georgia Stock and the Kenneth C. Stock and Georgia Stock 2020 Trust; Kenneth C. Stock, as the representative of the Sellers; and MarineMax Products, Inc.

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.

July 27, 2021	By:	/s/ Michael H. McLamb

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


Asset Class	Purchase Price Allocation Methodology
1.Class I Assets (cash, demand deposits and similar accounts in financial institutions)	Amount reflected in Closing Date Net Working Capital
2.Class II Assets (certificates of deposit, U.S. Government securities, readily marketable stock or securities (other than stock of affiliates) and foreign currency)	Amount reflected in Closing Date Net Working Capital
3.Class III Assets (debt instruments including accounts receivable)	Amount reflected in Closing Date Net Working Capital
4.Class IV Assets (inventory)	Amount reflected in Closing Date Net Working Capital
5.Class V Assets (all assets that are not Class I, II, III, IV, VI or VII assets)	Fair market value, but not to exceed $15,000,000 in the aggregate.
6.Class VI Assets (all Code Section 197 intangibles other than goodwill and going concern value, including designs, patterns, know-how, formulas, customer-based intangibles, supplier-based intangibles, franchises, trademarks, and trade names)	Fair market value, but the amounts allocated to the restrictive covenants set forth in Article VI of the Agreement shall not exceed $100,000 in the aggregate.
7.Class VII Assets (goodwill and going concern value)	Residual

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

Date: July 27, 2021


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

Date: July 27, 2021