HZO – Marinemax

Lynvesty guidance: hold/reduce (due to low inventory of boats avaible for sale)

Eps guidance: range of $7.60 to $8 (by HZO in Q1 2022 – EPS in 2021 $7,33, estimated gorwth of 3,6-9,14%)

Revenue guidance: our average unit selling price should provide annual same-store sales growth around the mid single digits, including the remainder of the Cruisers and Nisswa acquisitions along with Intrepid and Texas MasterCraft, we expect total annual revenue growth in the mid teens.


Q1 2022 Investors Presentation

source: First Quarter 2022 Investor Presentation

MarineMax, Inc. (HZO) CEO Brett McGill on Q1 2022 Results

Best quotes

Q1 results were a great achievement given the extremely lean inventory and well-documented supply chain issues. With the peak selling season ahead we expect to build on the strong start to our fiscal year and remain confident that we will continue to enhance long-term shareholder value.

Let me touch on the December quarter where we generated 15% revenue growth, record gross margins of 35% and record earnings per share of $1.59. I’m extremely pleased that our diversified model enabled us to again exceed expectations as we produce robust margins and earnings growth.

For the quarter, we are particularly pleased with our strong same-store sales growth, which rose to 9%. Its important to note that our same-store sales growth was primarily driven by an increase in unit sales, which is notable given the industry-wide supply chain challenge.

From a cadence perspective, the supply chain headwinds improved as we move through the quarter, benefiting our ability to fulfill customer orders. As many experts in the industry are forecasting, the supply chain environment will most likely stay choppy and not improved materially until late in fiscal 2022.

This quarter we increased our operating margin by 220 basis points over last year’s record to 10%, quite an accomplishment in our historically smallest quarter.

The combination of gross margin expansion and focused expense management resulted in a record $1.59 of EPS for the quarter. In the December quarter we added Texas MasterCraft and Intrepid Powerboats to our family. These acquisitions combined generated over $100 million in revenue in 2020.

Our gross profit dollars increased over $43 million, while our gross margin rose 540 basis points to over 35%. Our record gross margin was due to several factors. Among these are improving margins on new and used boat sales, impressive service parts and storage performance, expansion in a higher margin finance, insurance and brokerage business as well as growth in our global superyacht services organizations of Northrop & Johnson and Fraser Yachts.

Moving on to our industry-leading balance sheet, we continued to build cash with over $216 million at quarter end versus $121 million a year ago. Our inventory at quarter end was down 14% to $325 million from last year, but excluding the acquisitions our inventory is down closer to 25%.

Today, given what we are being told from our various manufacturing partners, we continue to expect retail unit growth in 2022. However, it is also clear that uncertainty exists in the ultimate visibility due to the supply chain challenges. As such, we think it’s prudent to continue to expect flattish unit growth.

This combined with increases in our average unit selling price should provide annual same-store sales growth around the mid single digits, including the remainder of the Cruisers and Nisswa acquisitions along with Intrepid and Texas MasterCraft, we expect total annual revenue growth in the mid teens.

Given the inflationary pressures in the marketplace as noted on our last call, we do expect modest gross margin pressure. We have leverage to mitigate these pressures, but believe it’s prudent to include in our expectations for now. Our guidance is also before any other acquisitions that we may complete.

Using the low end of our historical leverage range plus a modest share increase in a tax rate of 25% results in an earnings per share guidance range of $7.60 to $8. This implies fiscal 2022 EBITDA of over $260 million.

And so, the only little thing out there that we watch and this is just common, is some really hot models that have an extremely long time frame to wait to get a boat. I would call those cooled off, because if you can’t get a boat for two years, that model. But I would tell you, we still have activity around some of those models, it’s striking. So we watch that a little bit. So, to finally answer your question in summary is demand and traffic everything continues to be very strong.

 And I said it during my prepared remarks that our customer deposits are up 300% from a year ago and the 12 months leading from then till now were a pretty good 12 month period for the marine industry and for us and our deposits are up 300% going forward. Our deposits are up about 50% from September. So just from three months ago our deposits are up 50%, during a quarter where we actually produced same-store sales growth. So we think about how that math works. Deposits are leaving the balance sheet as we’re delivering the boats. We’re adding deposits to actually build the deposit line by 50% in one quarter and also have 9% same-store sales growth. I think should let people know demand is still pretty good in the recreational marine retail environment.

What’s also in that number are deposits, because as our customers are paying us deposits, we do pay some manufacturers deposits for boats that are coming a year from now or 18 months from now. So that’s in there. So that’s not something we can deliver today. 

We own a lot of real estate. We actually bought some more this quarter. And we do think the fair value greatly exceeds what it’s on our books for.  So, I think you’ll see us continue to buy great unique waterfront properties especially if we can do storage on them. 

Q: Mike, maybe just on guidance, I think you had mentioned your guidance is predicated upon operating leverage kind of in that more historical range. I think you’ve talked about maybe 12 to the mid teens historically. You did 26% this quarter. I think over the past five or six quarters you’ve averaged something around 20%. So, I think its just a sense of why you think that 12 to maybe mid teens is more correct going forward relative to what we’ve seen of late?

Then fundamentally, as we finish the second year, let’s say, we finish 2022 with strong margins and we’re looking at the different acquisitions we’ve done, we’ve got to start thinking, okay, does that 12% to 17% actually now, has it changed because of — I think Brett said it. The margin profile of the company I think is changing, even if you take away the upside that we’re seeing today on new and used product, I think each quarter I say, something like of our margin improvement around a third-ish has been new and used, which means two-thirds have been coming from the changes we’ve made in the business, whether it’s growing up an high end storage or some of the acquisitions that we’ve done that have a higher profile.

. So, a lot less shows that we’re going to this year because there’s no inventory and pipelines full, all the reasons you know.

Q: Great. Thank you. Good morning. I was interested in model year price increases, like-for-like price increases on existing models. And then, if that is up, I assume it is. How confident are you about consumers ability to pay higher prices going into 2022?

A:  I’d say, high single digit in some cases there’s maybe a double digit increase on it. If you’re looking at kind of what’s selling like in June versus — like June 2022 versus June 2021. And the demand that we’re continue to see, I’ll make a comment on our backlog, obviously, what we’re writing contracts today is on product that has price increases. And the — I think the demand for the boating lifestyle and to get out there and enjoy things with your — boating with your family and friends is today stronger than what the price increases I’ve seen. So, it continues to be strong.

For the fourth quarter I would confirm that we delivered probably a greater percentage of a smaller product and it really has to do with people have been waiting on their boats and it’s just when that, when we got them from the manufacturer. So on a year-over-year basis we did deliver a greater percentage of smaller product than we typically do.

source: https://seekingalpha.com/article/4482226-marinemax-inc-hzo-ceo-brett-mcgill-on-q1-2022-results-earnings-call-transcript