MarineMax(HZO) - 2019 Q2 - Quarterly Report

PART I. FINANCIAL INFORMATION Financial Statements (Unaudited) Presents unaudited condensed consolidated financial statements for Q1 and H1 2019 and 2018, including key financial statements and notes Condensed Consolidated Statements of Operations Highlights (Unaudited) | Metric | Three Months Ended March 31, 2019 (in millions, except per share data) | Three Months Ended March 31, 2018 (in millions, except per share data) | Six Months Ended March 31, 2019 (in millions, except per share data) | Six Months Ended March 31, 2018 (in millions, except per share data) | | :--- | :--- | :--- | :--- | :--- | | Revenue | $303.6 | $270.6 | $545.5 | $507.5 | | Gross Profit | $74.2 | $69.3 | $137.7 | $128.5 | | Income from Operations | $10.2 | $10.6 | $19.2 | $19.6 | | Net Income | $5.3 | $6.2 | $10.2 | $10.4 | | Diluted Net Income per Share | $0.23 | $0.27 | $0.44 | $0.46 | Condensed Consolidated Balance Sheets Highlights (Unaudited) | Metric | March 31, 2019 (in millions) | September 30, 2018 (in millions) | | :--- | :--- | :--- | | Total Current Assets | $572.5 | $465.3 | | Total Assets | $749.0 | $640.5 | | Total Current Liabilities | $379.6 | $286.0 | | Total Liabilities | $380.5 | $287.4 | | Total Shareholders' Equity | $368.5 | $353.1 | Condensed Consolidated Statements of Cash Flows Highlights (Unaudited) | Metric | Six Months Ended March 31, 2019 (in millions) | Six Months Ended March 31, 2018 (in millions) | | :--- | :--- | :--- | | Net cash used in operating activities | $(62.2) | $(19.4) | | Net cash used in investing activities | $(7.5) | $(8.5) | | Net cash provided by financing activities | $84.5 | $43.0 | | Net increase in cash and cash equivalents | $14.8 | $15.2 | Notes to Condensed Consolidated Financial Statements Explains company background, accounting policies, and key financial items including revenue, inventory, credit, and stock compensation - MarineMax is the largest recreational boat and yacht retailer in the United States, operating through 64 retail locations in 16 states as of March 31, 2019[23] - Sales of new boats from Brunswick Corporation accounted for approximately 40% of the company's fiscal 2018 revenue, with successful replacement of revenue from discontinued Sea Ray models[24][25] - The company adopted the new revenue recognition standard (ASC 606) on October 1, 2018, using the modified retrospective approach, which resulted in a net after-tax cumulative effect adjustment to retained earnings of $0.399 million[38] - In October 2018, the credit facility borrowing limit increased to $400.0 million, with total short-term borrowings at $297.5 million and an interest rate of approximately 6.0% as of March 31, 2019[53][56] - As of March 31, 2019, approximately $10.0 million of total unrecognized compensation cost for non-vested restricted stock awards is expected to be recognized over a weighted average period of 2.3 years[71] Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses Q1 and H1 2019 financial performance, including revenue, margins, expenses, liquidity, and seasonality Three-Month Performance vs. Prior Year (Ended March 31) | Metric | Q2 2019 (in millions) | Q2 2018 (in millions) | Change | | :--- | :--- | :--- | :--- | | Revenue | $303.6 | $270.6 | +12.2% | | Comparable-Store Sales | - | - | +12.2% | | Gross Profit | $74.2 | $69.3 | +7.1% | | Gross Margin | 24.4% | 25.6% | -1.2 p.p. | Six-Month Performance vs. Prior Year (Ended March 31) | Metric | YTD 2019 (in millions) | YTD 2018 (in millions) | Change | | :--- | :--- | :--- | :--- | | Revenue | $545.5 | $507.5 | +7.5% | | Comparable-Store Sales | - | - | +6.7% | | Gross Profit | $137.7 | $128.5 | +7.1% | | Gross Margin | 25.2% | 25.3% | -0.1 p.p. | - The decrease in gross profit margin for the quarter was primarily due to increased used boat sales, which typically carry lower margins[101] - Selling, general, and administrative (SG&A) expenses increased due to recent acquisitions, new store openings, reestablishing the British Virgin Islands' Charter business, and expanded marketing investments[102][108] - As of March 31, 2019, the company was in compliance with all covenants under its Amended Credit Facility, with approximately $44.9 million in additional available borrowings[112][119] Quantitative and Qualitative Disclosures About Market Risk Outlines company exposure to market risks, primarily interest rate risk and foreign currency exchange rate risk - A hypothetical 100 basis point (1%) increase in the interest rate on the company's short-term debt would result in an approximate $3.0 million increase in annual pre-tax interest expense[123] - The company faces foreign currency exchange rate risk as U.S. dollar fluctuations can impact the retail price and competitiveness of boats purchased from European and Chinese manufacturers, with no current foreign currency hedging activities[125] Controls and Procedures Management concluded disclosure controls were effective as of March 31, 2019, with no material changes to internal controls - The CEO and CFO concluded that the company's disclosure controls and procedures were effective at the reasonable assurance level as of the period end[127] - No material changes occurred in the company's internal control over financial reporting during the quarter ended March 31, 2019[128] PART II. OTHER INFORMATION Legal Proceedings The company is involved in various legal actions, but does not expect a material adverse effect on its financials - The company is party to various legal actions but does not believe they will have a material adverse effect on its financial condition or operations[132] Risk Factors No new or updated risk factors are reported for the quarter - The report states "None," indicating no new or updated risk factors for the period[133] Unregistered Sales of Equity Securities and Use of Proceeds No unregistered sales of equity securities or use of proceeds reported for the period - The report states "None"[134] Defaults Upon Senior Securities No defaults upon senior securities reported - The report states "None"[135] Mine Safety Disclosures This section is not applicable to the company's business - The report states "Not applicable"[136] Other Information No other information reported for the period - The report states "None"[137] Exhibits Lists exhibits filed with the 10-Q report, including bylaws, CEO/CFO certifications, and XBRL data files - Key exhibits filed with the report include CEO and CFO certifications (Exhibits 31.1, 31.2, 32.1, 32.2) and XBRL interactive data files[138]