FYAugust 31, 2027September 30,
2031November 30, 2027September 30, 2031October 31,
20270false0200010570602024-07-31November 30, 20272024-07-31August
31,
20270--09-300001057060us-gaap:MortgagesMember2021-09-3000010570602022-01-012022-09-300001057060us-gaap:AssetPledgedAsCollateralWithoutRightMemberus-gaap:LetterOfCreditMember2022-09-300001057060hzo:CreditFacilityMember2021-10-012022-09-300001057060us-gaap:SalesRevenueNetMemberhzo:BrunswickCorporationMemberus-gaap:ProductConcentrationRiskMember2021-10-012022-09-300001057060hzo:InTransitInventoryAndDepositsMember2021-09-300001057060hzo:RetailOperationsMember2022-09-300001057060us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-10-012022-09-300001057060hzo:RevolvingMortgageFacilityWithFineMarkNationalBankTrustMemberus-gaap:MortgagesMember2020-10-012021-09-300001057060us-gaap:TreasuryStockMember2019-10-012020-09-300001057060hzo:RetailOperationsMemberus-gaap:TransferredAtPointInTimeMember2021-10-012022-09-300001057060us-gaap:RevolvingCreditFacilityMemberhzo:NewCreditAgreementMember2022-08-310001057060srt:MaximumMemberus-gaap:BuildingAndBuildingImprovementsMember2021-10-012022-09-300001057060us-gaap:TreasuryStockMember2021-10-012022-09-300001057060us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-09-300001057060hzo:RetailOperationsMemberus-gaap:SalesRevenueNetMemberhzo:UsedBoatSalesMemberus-gaap:ProductConcentrationRiskMember2019-10-012020-09-300001057060hzo:RevolvingMortgageFacilityWithFineMarkNationalBankTrustMemberus-gaap:InterestRateFloorMemberus-gaap:MortgagesMember2022-09-300001057060hzo:RetailOperationsMemberhzo:NewBoatSalesMemberus-gaap:SalesRevenueNetMemberus-gaap:ProductConcentrationRiskMember2021-10-012022-09-3000010570602019-09-300001057060us-gaap:CustomerRelationshipsMember2022-09-300001057060hzo:RevolvingMortgageFacilityWithFineMarkNationalBankTrustMemberus-gaap:MortgagesMember2022-09-300001057060hzo:IslandGlobalYachtingLlcMemberus-gaap:SubsequentEventMember2022-10-030001057060us-gaap:SecuredDebtMemberhzo:CreditFacilityMember2021-07-310001057060hzo:RetailOperationsMember2020-10-012021-09-300001057060us-gaap:PrimeRateMemberhzo:MortgageFacilityPayableToFlagshipBankMemberus-gaap:MortgagesMember2021-10-012022-09-300001057060hzo:RetailOperationsMemberus-gaap:SalesRevenueNetMemberhzo:BrokerageSalesMemberus-gaap:ProductConcentrationRiskMember2020-10-012021-09-300001057060srt:CumulativeEffectPeriodOfAdoptionAdjustmentMemberus-gaap:AccountingStandardsUpdate201409Member2020-09-300001057060us-gaap:BuildingAndBuildingImprovementsMember2022-09-300001057060hzo:RevolvingMortgageFacilityWithFineMarkNationalBankTrustMemberus-gaap:InterestRateFloorMemberus-gaap:MortgagesMember2021-09-300001057060us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-09-300001057060us-gaap:MachineryAndEquipmentMember2022-09-300001057060hzo:ProductManufacturingMemberus-gaap:TransferredAtPointInTimeMember2020-10-012021-09-300001057060us-gaap:SecuredDebtMember2022-09-300001057060us-gaap:BuildingAndBuildingImprovementsMember2021-09-300001057060us-gaap:FairValueInputsLevel3Member2022-09-300001057060us-gaap:FairValueInputsLevel3Memberhzo:ContingentConsiderationLiabilitiesMember2020-09-300001057060hzo:IntrepidAndTexasMasterCraftMember2021-11-300001057060hzo:RetailOperationsMemberus-gaap:SalesRevenueNetMemberus-gaap:ProductConcentrationRiskMember2021-10-012022-09-300001057060us-gaap:AdditionalPaidInCapitalMember2021-10-012022-09-300001057060hzo:ProductManufacturingMember2021-09-300001057060us-gaap:FairValueInputsLevel2Member2021-09-300001057060us-gaap:RestrictedStockMember2021-09-300001057060hzo:RetailOperationsMemberus-gaap:TransferredAtPointInTimeMember2020-10-012021-09-300001057060us-gaap:SalesRevenueNetMemberhzo:BrunswickBostonWhalerBoatsMemberhzo:BrunswickCorporationMemberus-gaap:ProductConcentrationRiskMember2021-10-012022-09-300001057060hzo:SkipperBudsMember2020-10-310001057060us-gaap:AdditionalPaidInCapitalMember2020-10-012021-09-300001057060us-gaap:AdditionalPaidInCapitalMember2019-09-300001057060hzo:MortgageFacilityPayablesToFlagshipBankMemberus-gaap:CarryingReportedAmountFairValueDisclosureMember2022-09-300001057060hzo:MortgageFacilityPayableToHancockWhitneyBankMemberus-gaap:MortgagesMember2021-10-012022-09-300001057060us-gaap:RevolvingCreditFacilityMembersrt:MinimumMember2022-09-300001057060hzo:ProductManufacturingMember2020-10-012021-09-300001057060hzo:RetailOperationsMemberus-gaap:OperatingSegmentsMember2021-10-012022-09-300001057060hzo:OtherAccrualsMember2022-09-300001057060hzo:SalesAndOtherTaxesPayableMember2021-09-300001057060us-gaap:RetainedEarningsMember2021-09-300001057060srt:MinimumMemberus-gaap:BuildingAndBuildingImprovementsMember2021-10-012022-09-300001057060hzo:RetailOperationsMemberhzo:NewBoatSalesMemberus-gaap:SalesRevenueNetMemberus-gaap:ProductConcentrationRiskMember2019-10-012020-09-300001057060hzo:CreditFacilityMember2021-07-012021-07-310001057060hzo:RevolvingMortgageFacilityWithFineMarkNationalBankTrustMemberus-gaap:MortgagesMember2021-10-012022-09-300001057060hzo:RetailOperationsMemberus-gaap:SalesRevenueNetMemberhzo:FinanceAndInsuranceProductsMemberus-gaap:ProductConcentrationRiskMember2019-10-012020-09-300001057060us-gaap:VehiclesMembersrt:MaximumMember2021-10-012022-09-300001057060srt:MaximumMemberus-gaap:StateAndLocalJurisdictionMember2021-10-012022-09-300001057060hzo:IncentiveStockPlanTwoThousandTwentyOneMember2021-10-012022-09-300001057060us-gaap:FurnitureAndFixturesMember2022-09-300001057060hzo:SkipperBudsMember2021-10-012022-09-300001057060hzo:InTransitInventoryAndDepositsMember2022-09-300001057060us-gaap:RetainedEarningsMember2019-09-300001057060us-gaap:EmployeeStockOptionMember2021-10-012022-09-300001057060hzo:RetailOperationsMemberus-gaap:SalesRevenueNetMemberhzo:FinanceAndInsuranceProductsMemberus-gaap:ProductConcentrationRiskMember2020-10-012021-09-300001057060hzo:RetailOperationsMemberus-gaap:SalesRevenueNetMemberhzo:FinanceAndInsuranceProductsMemberus-gaap:ProductConcentrationRiskMember2021-10-012022-09-300001057060hzo:MortgageFacilityPayableToFlagshipBankMemberus-gaap:MortgagesMember2021-10-012022-09-300001057060us-gaap:VehiclesMember2022-09-300001057060us-gaap:EmployeeStockOptionMember2019-10-012020-09-300001057060us-gaap:LandMember2022-09-300001057060hzo:RetailOperationsMemberus-gaap:SalesRevenueNetMemberhzo:MaintenanceRepairStorageRentalAndCharterServicesMemberus-gaap:ProductConcentrationRiskMember2021-10-012022-09-300001057060us-gaap:CommonStockMember2019-09-3000010570602022-11-140001057060hzo:RetailOperationsMemberus-gaap:SalesRevenueNetMemberhzo:UsedBoatSalesMemberus-gaap:ProductConcentrationRiskMember2020-10-012021-09-300001057060hzo:MortgageFacilityPayableToSeacoastNationalBankMemberus-gaap:MortgagesMember2020-10-012021-09-300001057060hzo:DelayedDrawTermLoanFacilityMembersrt:MaximumMemberhzo:NewCreditAgreementMember2022-08-310001057060hzo:RetailOperationsMember2019-10-012020-09-300001057060us-gaap:SellingGeneralAndAdministrativeExpensesMember2020-10-012021-09-300001057060srt:MinimumMember2021-10-012022-09-300001057060srt:MinimumMemberus-gaap:FurnitureAndFixturesMember2021-10-012022-09-300001057060us-gaap:CommonStockMember2022-09-300001057060us-gaap:CarryingReportedAmountFairValueDisclosureMemberhzo:MortgageFacilityPayablesToSeacoastNationalBankMember2022-09-300001057060us-gaap:LandMember2021-09-300001057060hzo:RetailOperationsMemberus-gaap:SalesRevenueNetMemberhzo:UsedBoatSalesMemberus-gaap:ProductConcentrationRiskMember2021-10-012022-09-300001057060us-gaap:TreasuryStockMember2020-10-012021-09-3000010570602020-03-310001057060us-gaap:SalesRevenueNetMemberhzo:UsedBoatSalesMemberus-gaap:ProductConcentrationRiskMember2021-10-012022-09-300001057060us-gaap:TreasuryStockMember2020-09-300001057060us-gaap:FairValueInputsLevel3Memberhzo:ContingentConsiderationLiabilitiesMember2021-09-300001057060hzo:RetailOperationsMemberus-gaap:OperatingSegmentsMember2020-10-012021-09-300001057060us-gaap:SalesRevenueNetMemberhzo:PartsAndAccessoriesMemberus-gaap:ProductConcentrationRiskMember2021-10-012022-09-300001057060hzo:CustomerAndStorageAccrualsMember2021-09-300001057060hzo:ProductManufacturingMember2021-10-012022-09-300001057060us-gaap:SalesRevenueNetMemberhzo:MaintenanceRepairStorageRentalAndCharterServicesMemberus-gaap:ProductConcentrationRiskMember2020-10-012021-09-300001057060srt:MaximumMemberus-gaap:FurnitureAndFixturesMember2021-10-012022-09-300001057060us-gaap:OperatingSegmentsMember2019-10-012020-09-300001057060hzo:MortgageFacilityPayableToHancockWhitneyBankMemberus-gaap:MortgagesMember2022-09-300001057060us-gaap:CarryingReportedAmountFairValueDisclosureMemberhzo:MortgageFacilityPayablesToHancockWhitneyBankMember2022-09-300001057060us-gaap:EstimateOfFairValueFairValueDisclosureMemberhzo:MortgageFacilityPayablesToHancockWhitneyBankMember2021-09-300001057060hzo:StockPurchasePlanMember2022-09-300001057060us-gaap:SellingGeneralAndAdministrativeExpensesMember2019-10-012020-09-300001057060us-gaap:SellingGeneralAndAdministrativeExpensesMember2021-10-012022-09-300001057060srt:MaximumMember2021-10-012022-09-300001057060us-gaap:InterestRateFloorMemberhzo:MortgageFacilityPayableToFlagshipBankMemberus-gaap:MortgagesMember2021-09-300001057060us-gaap:EmployeeStockOptionMember2020-10-012021-09-300001057060us-gaap:PrimeRateMemberhzo:MortgageFacilityPayableToHancockWhitneyBankMemberus-gaap:MortgagesMember2020-10-012021-09-300001057060hzo:RetailOperationsMemberus-gaap:SalesRevenueNetMemberhzo:PartsAndAccessoriesMemberus-gaap:ProductConcentrationRiskMember2020-10-012021-09-300001057060hzo:CruisersYachtsMember2021-05-012021-05-310001057060hzo:OtherAccrualsMember2021-09-300001057060hzo:RetailOperationsMemberhzo:NewBoatSalesMemberus-gaap:SalesRevenueNetMemberus-gaap:ProductConcentrationRiskMember2020-10-012021-09-3000010570602019-10-012020-09-300001057060us-gaap:SecuredDebtMemberhzo:CreditFacilityMember2021-10-012022-09-300001057060us-gaap:SalesRevenueNetMemberhzo:BrokerageSalesMemberus-gaap:ProductConcentrationRiskMember2021-10-012022-09-300001057060hzo:RetailOperationsMemberus-gaap:SalesRevenueNetMemberhzo:PartsAndAccessoriesMemberus-gaap:ProductConcentrationRiskMember2021-10-012022-09-300001057060us-gaap:SalesRevenueNetMemberhzo:ProductManufacturingMemberus-gaap:ProductConcentrationRiskMember2020-10-012021-09-300001057060hzo:IntrepidAndTexasMasterCraftMember2021-11-012021-11-300001057060hzo:PayrollAccrualsMember2021-09-300001057060us-gaap:RestrictedStockMembersrt:MinimumMember2021-10-012022-09-300001057060us-gaap:DomesticCountryMember2022-09-300001057060hzo:NewBoatSalesMemberus-gaap:SalesRevenueNetMemberhzo:ProductManufacturingMemberus-gaap:ProductConcentrationRiskMember2020-10-012021-09-300001057060hzo:MortgageFacilityPayableToFlagshipBankMemberus-gaap:MortgagesMember2021-09-300001057060us-gaap:PrimeRateMemberhzo:MortgageFacilityPayableToFlagshipBankMemberus-gaap:MortgagesMember2020-10-012021-09-300001057060us-gaap:CommonStockMember2020-10-012021-09-300001057060hzo:SkipperBudsMember2020-10-012020-10-310001057060us-gaap:SalesRevenueNetMemberus-gaap:ProductConcentrationRiskMember2019-10-012020-09-300001057060hzo:NewBoatSalesMemberus-gaap:SalesRevenueNetMemberus-gaap:ProductConcentrationRiskMember2021-10-012022-09-300001057060us-gaap:RetainedEarningsMember2019-10-012020-09-300001057060hzo:NewBoatSalesMemberus-gaap:SalesRevenueNetMemberus-gaap:ProductConcentrationRiskMember2020-10-012021-09-300001057060us-gaap:RestrictedStockMember2021-10-012022-09-300001057060srt:MaximumMemberus-gaap:MachineryAndEquipmentMember2021-10-012022-09-3000010570602021-10-012022-09-300001057060hzo:RetailOperationsMemberus-gaap:SalesRevenueNetMemberhzo:PartsAndAccessoriesMemberus-gaap:ProductConcentrationRiskMember2019-10-012020-09-300001057060us-gaap:CommonStockMember2021-10-012022-09-300001057060srt:MinimumMemberus-gaap:StateAndLocalJurisdictionMember2021-10-012022-09-300001057060hzo:RetailOperationsMemberus-gaap:SalesRevenueNetMemberhzo:MaintenanceRepairStorageRentalAndCharterServicesMemberus-gaap:ProductConcentrationRiskMember2020-10-012021-09-300001057060us-gaap:CarryingReportedAmountFairValueDisclosureMemberhzo:MortgageFacilityPayablesToHancockWhitneyBankMember2021-09-300001057060us-gaap:SalesRevenueNetMemberhzo:FinanceAndInsuranceProductsMemberus-gaap:ProductConcentrationRiskMember2020-10-012021-09-300001057060hzo:RetailOperationsMemberus-gaap:SalesRevenueNetMemberhzo:MaintenanceRepairStorageRentalAndCharterServicesMemberus-gaap:ProductConcentrationRiskMember2019-10-012020-09-300001057060hzo:RetailOperationsMember2021-10-012022-09-300001057060hzo:RetailOperationsMember2020-09-300001057060hzo:RevolvingMortgageFacilityWithFineMarkNationalBankTrustMemberus-gaap:MortgagesMember2021-09-300001057060us-gaap:TradeNamesMember2022-09-300001057060us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-10-012020-09-300001057060hzo:SubjectToAwardMemberhzo:IncentiveStockPlanTwoThousandTwentyOneMember2022-09-300001057060hzo:RetailOperationsMemberus-gaap:SalesRevenueNetMemberhzo:BrokerageSalesMemberus-gaap:ProductConcentrationRiskMember2021-10-012022-09-300001057060us-gaap:CustomerRelationshipsMemberhzo:CruisersYachtsMember2021-05-012021-05-310001057060hzo:StockPurchasePlanMember2021-10-012022-09-300001057060hzo:MortgageFacilityPayableToSeacoastNationalBankMemberus-gaap:MortgagesMember2021-10-012022-09-300001057060hzo:RetailOperationsMemberus-gaap:TransferredOverTimeMember2021-10-012022-09-300001057060us-gaap:SalesRevenueNetMemberhzo:UsedBoatSalesMemberus-gaap:ProductConcentrationRiskMember2020-10-012021-09-300001057060us-gaap:SalesRevenueNetMemberhzo:BrunswickCorporationMemberhzo:BrunswickSeaRayBoatMemberus-gaap:ProductConcentrationRiskMember2021-10-012022-09-300001057060hzo:RetailOperationsMember2021-09-300001057060hzo:StockPurchasePlanMember2020-10-012021-09-300001057060hzo:MortgageFacilityPayablesToFlagshipBankMemberus-gaap:CarryingReportedAmountFairValueDisclosureMember2021-09-300001057060hzo:MortgageFacilityPayableToFlagshipBankMemberus-gaap:MortgagesMember2020-10-012021-09-300001057060us-gaap:EmployeeStockOptionMember2022-09-300001057060hzo:RevolvingMortgageFacilityWithFineMarkNationalBankTrustMemberus-gaap:MortgagesMemberus-gaap:BaseRateMember2021-10-012022-09-300001057060hzo:MortgageFacilityPayablesToSeacoastNationalBankMemberus-gaap:EstimateOfFairValueFairValueDisclosureMember2022-09-300001057060srt:CumulativeEffectPeriodOfAdoptionAdjustmentMemberus-gaap:AccountingStandardsUpdate201602Member2019-10-010001057060us-gaap:RetainedEarningsMember2022-09-300001057060hzo:RetailOperationsMemberus-gaap:SalesRevenueNetMemberus-gaap:ProductConcentrationRiskMember2019-10-012020-09-300001057060hzo:RetailOperationsMemberus-gaap:SalesRevenueNetMemberus-gaap:ProductConcentrationRiskMember2020-10-012021-09-300001057060hzo:NewCreditAgreementMember2021-10-012022-09-300001057060us-gaap:FairValueInputsLevel3Memberhzo:ContingentConsiderationLiabilitiesMember2020-10-012021-09-300001057060us-gaap:AdditionalPaidInCapitalMember2020-09-300001057060hzo:RetailOperationsMemberus-gaap:TransferredAtPointInTimeMember2019-10-012020-09-300001057060us-gaap:SalesRevenueNetMemberus-gaap:ProductConcentrationRiskMember2021-10-012022-09-300001057060us-gaap:OperatingSegmentsMember2021-10-012022-09-300001057060hzo:NewCreditAgreementMembersrt:MaximumMember2022-01-012022-09-300001057060hzo:NineteenNinetyEightEmployeeStockPurchasePlanMember2022-09-300001057060us-gaap:EstimateOfFairValueFairValueDisclosureMemberhzo:MortgageFacilityPayablesToHancockWhitneyBankMember2022-09-300001057060us-gaap:OperatingSegmentsMemberhzo:ProductManufacturingMember2020-10-012021-09-300001057060hzo:NewBoatSalesMemberus-gaap:SalesRevenueNetMemberus-gaap:ProductConcentrationRiskMember2019-10-012020-09-300001057060us-gaap:SalesRevenueNetMemberhzo:PartsAndAccessoriesMemberus-gaap:ProductConcentrationRiskMember2020-10-012021-09-300001057060hzo:CustomerAndStorageAccrualsMember2022-09-300001057060us-gaap:FairValueInputsLevel3Memberhzo:ContingentConsiderationLiabilitiesMember2022-09-300001057060us-gaap:RetainedEarningsMember2020-10-012021-09-300001057060hzo:IncentiveStockPlanTwoThousandSevenOrTwoThousandElevenMember2022-09-300001057060us-gaap:IntersegmentEliminationMember2021-10-012022-09-3000010570602022-03-310001057060hzo:PartsAccessoriesAndOtherMember2022-09-300001057060us-gaap:VehiclesMember2021-09-300001057060us-gaap:SalesRevenueNetMemberhzo:MaintenanceRepairStorageRentalAndCharterServicesMemberus-gaap:ProductConcentrationRiskMember2021-10-012022-09-300001057060hzo:ProductManufacturingMemberus-gaap:TransferredAtPointInTimeMember2021-10-012022-09-300001057060us-gaap:PrimeRateMemberhzo:MortgageFacilityPayableToHancockWhitneyBankMemberus-gaap:MortgagesMember2021-10-012022-09-300001057060hzo:NewAndUsedBoatsMotorsAndTrailersMember2021-09-300001057060us-gaap:AdditionalPaidInCapitalMember2021-09-300001057060hzo:NewCreditAgreementMember2022-08-310001057060hzo:ProductManufacturingMember2022-09-300001057060us-gaap:AccountingStandardsUpdate201602Member2019-10-010001057060us-gaap:CommonStockMember2021-09-300001057060us-gaap:RevolvingCreditFacilityMembersrt:MaximumMember2022-09-300001057060us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-09-300001057060us-gaap:IntersegmentEliminationMember2020-10-012021-09-300001057060hzo:MortgageFacilityPayableToSeacoastNationalBankMemberus-gaap:MortgagesMember2021-09-300001057060us-gaap:MachineryAndEquipmentMember2021-09-300001057060us-gaap:SalesRevenueNetMemberus-gaap:ProductConcentrationRiskMemberhzo:AzimutBenettiGroupsAndYachtsMember2021-10-012022-09-300001057060us-gaap:CustomerRelationshipsMember2021-09-300001057060hzo:MortgageFacilityPayablesToFlagshipBankMemberus-gaap:EstimateOfFairValueFairValueDisclosureMember2021-09-300001057060us-gaap:AdditionalPaidInCapitalMember2022-09-300001057060hzo:CruisersYachtsMember2021-10-012022-09-300001057060hzo:PartsAccessoriesAndOtherMember2021-09-300001057060hzo:NewCreditAgreementMemberhzo:DelayedDrawMortgageLoanFacilityMember2022-08-012022-08-3100010570602022-09-300001057060us-gaap:SalesRevenueNetMemberhzo:FinanceAndInsuranceProductsMemberus-gaap:ProductConcentrationRiskMember2019-10-012020-09-300001057060hzo:SalesAndOtherTaxesPayableMember2022-09-300001057060us-gaap:SalesRevenueNetMemberhzo:BrokerageSalesMemberus-gaap:ProductConcentrationRiskMember2020-10-012021-09-300001057060hzo:DelayedDrawTermLoanFacilityMemberhzo:NewCreditAgreementMember2022-08-012022-08-310001057060us-gaap:SalesRevenueNetMemberhzo:BrokerageSalesMemberus-gaap:ProductConcentrationRiskMember2019-10-012020-09-300001057060hzo:StockPurchasePlanMember2019-10-012020-09-300001057060srt:MinimumMemberus-gaap:MachineryAndEquipmentMember2021-10-012022-09-300001057060us-gaap:EmployeeStockOptionMember2020-10-012021-09-300001057060hzo:StockPurchasePlanMember2019-02-012019-02-280001057060us-gaap:TreasuryStockMember2022-09-300001057060us-gaap:OperatingSegmentsMember2020-10-012021-09-300001057060hzo:NewCreditAgreementMember2022-09-300001057060us-gaap:SecuredDebtMember2021-10-012022-09-300001057060hzo:RetailOperationsMemberus-gaap:SalesRevenueNetMemberhzo:BrokerageSalesMemberus-gaap:ProductConcentrationRiskMember2019-10-012020-09-300001057060us-gaap:CarryingReportedAmountFairValueDisclosureMemberhzo:MortgageFacilityPayablesToSeacoastNationalBankMember2021-09-300001057060us-gaap:EmployeeStockOptionMember2021-10-012022-09-300001057060us-gaap:MortgagesMember2022-09-300001057060us-gaap:RetainedEarningsMembersrt:CumulativeEffectPeriodOfAdoptionAdjustmentMemberus-gaap:AccountingStandardsUpdate201409Member2020-09-300001057060us-gaap:FairValueInputsLevel2Member2022-09-300001057060hzo:MortgageFacilityPayableToHancockWhitneyBankMemberus-gaap:MortgagesMember2021-09-300001057060hzo:CruisersYachtsMember2021-05-310001057060us-gaap:GeographicConcentrationRiskMemberus-gaap:SalesRevenueNetMemberstpr:FL2019-10-012020-09-300001057060us-gaap:TradeNamesMember2021-09-300001057060us-gaap:SalesRevenueNetMemberus-gaap:ProductConcentrationRiskMember2020-10-012021-09-300001057060us-gaap:SecuredDebtMember2021-09-300001057060us-gaap:SalesRevenueNetMemberhzo:PartsAndAccessoriesMemberus-gaap:ProductConcentrationRiskMember2019-10-012020-09-300001057060us-gaap:TreasuryStockMember2021-09-300001057060us-gaap:SalesRevenueNetMemberhzo:UsedBoatSalesMemberus-gaap:ProductConcentrationRiskMember2019-10-012020-09-300001057060us-gaap:AdditionalPaidInCapitalMember2019-10-012020-09-3000010570602020-10-012021-09-300001057060us-gaap:InterestRateFloorMemberhzo:MortgageFacilityPayableToHancockWhitneyBankMemberus-gaap:MortgagesMember2021-09-300001057060hzo:RetailOperationsMemberus-gaap:TransferredOverTimeMember2019-10-012020-09-300001057060hzo:MortgageFacilityPayablesToSeacoastNationalBankMemberus-gaap:EstimateOfFairValueFairValueDisclosureMember2021-09-300001057060hzo:IslandGlobalYachtingLlcMemberus-gaap:SubsequentEventMember2022-10-032022-10-030001057060srt:MinimumMemberhzo:TermLoanFacilityMember2022-09-300001057060us-gaap:RestrictedStockMember2022-09-300001057060hzo:NewCreditAgreementMemberhzo:DelayedDrawMortgageLoanFacilityMember2022-08-310001057060hzo:MortgageFacilityPayableToHancockWhitneyBankMemberus-gaap:MortgagesMember2020-10-012021-09-300001057060us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-09-300001057060hzo:TexasMasterCraftMember2021-11-300001057060us-gaap:GeographicConcentrationRiskMemberus-gaap:SalesRevenueNetMemberstpr:FL2021-10-012022-09-300001057060hzo:RetailOperationsMemberus-gaap:TransferredOverTimeMember2020-10-012021-09-300001057060us-gaap:EmployeeStockOptionMember2021-09-300001057060us-gaap:SalesRevenueNetMemberhzo:FinanceAndInsuranceProductsMemberus-gaap:ProductConcentrationRiskMember2021-10-012022-09-300001057060us-gaap:RetainedEarningsMember2021-10-012022-09-300001057060us-gaap:OperatingSegmentsMemberhzo:ProductManufacturingMember2021-10-012022-09-300001057060us-gaap:FairValueInputsLevel3Memberhzo:ContingentConsiderationLiabilitiesMember2021-10-012022-09-300001057060hzo:NewBoatSalesMemberus-gaap:SalesRevenueNetMemberhzo:ProductManufacturingMemberus-gaap:ProductConcentrationRiskMember2021-10-012022-09-300001057060us-gaap:SalesRevenueNetMemberhzo:ProductManufacturingMemberus-gaap:ProductConcentrationRiskMember2021-10-012022-09-300001057060us-gaap:SecuredDebtMember2020-10-012021-09-300001057060us-gaap:VehiclesMembersrt:MinimumMember2021-10-012022-09-300001057060hzo:NisswaMarineIncMember2021-07-012021-07-310001057060us-gaap:GeographicConcentrationRiskMemberus-gaap:SalesRevenueNetMemberstpr:FL2020-10-012021-09-300001057060hzo:IslandGlobalYachtingLlcMemberus-gaap:SubsequentEventMemberhzo:TermLoanFacilityMember2022-10-030001057060us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-10-012021-09-300001057060us-gaap:CommonStockMember2019-10-012020-09-300001057060us-gaap:InterestRateFloorMemberhzo:MortgageFacilityPayableToFlagshipBankMemberus-gaap:MortgagesMember2022-09-300001057060hzo:RetailOperationsMemberus-gaap:OperatingSegmentsMember2019-10-012020-09-300001057060us-gaap:RestrictedStockMembersrt:MaximumMember2021-10-012022-09-300001057060us-gaap:RetainedEarningsMember2020-09-300001057060srt:MaximumMemberhzo:TermLoanFacilityMember2022-09-300001057060hzo:NewAndUsedBoatsMotorsAndTrailersMember2022-09-300001057060hzo:MortgageFacilityPayableToSeacoastNationalBankMemberus-gaap:MortgagesMember2022-09-300001057060us-gaap:SalesRevenueNetMemberhzo:MaintenanceRepairStorageRentalAndCharterServicesMemberus-gaap:ProductConcentrationRiskMember2019-10-012020-09-300001057060us-gaap:PrimeRateMemberhzo:MortgageFacilityPayableToSeacoastNationalBankMemberus-gaap:MortgagesMember2021-10-012022-09-300001057060us-gaap:FairValueInputsLevel3Member2021-09-300001057060us-gaap:CommonStockMember2020-09-300001057060hzo:PayrollAccrualsMember2022-09-300001057060us-gaap:TreasuryStockMember2019-09-300001057060us-gaap:FurnitureAndFixturesMember2021-09-300001057060hzo:MortgageFacilityPayablesToFlagshipBankMemberus-gaap:EstimateOfFairValueFairValueDisclosureMember2022-09-300001057060hzo:MortgageFacilityPayableToHancockWhitneyBankMemberus-gaap:InterestRateFloorMemberus-gaap:MortgagesMember2022-09-300001057060hzo:MortgageFacilityPayableToFlagshipBankMemberus-gaap:MortgagesMember2022-09-3000010570602021-09-3000010570602020-09-30xbrli:purexbrli:shareshzo:Feethzo:Locationhzo:Segmentiso4217:USDhzo:Marinaiso4217:USDxbrli:shareshzo:RetailDealership
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Form
10-K
☑
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended
September 30,
2022
Commission File Number
1-14173
MarineMax, Inc.
(Exact Name of Registrant as Specified in Its Charter)
|
|
|
Florida
|
|
59-3496957
|
(State of Incorporation)
|
|
(I.R.S. Employer Identification No.)
|
2600 McCormick Drive
Suite 200,
Clearwater,
Florida
33759
(727)
531-1700
(Address, including zip code, and telephone number, including area
code, of principal executive offices)
Securities registered pursuant to Section 12(b) of the
Act:
|
|
|
Title of Each Class
|
Trading Symbol
|
Name of Each Exchange on Which Registered
|
Common Stock, par value $.001 per share
|
HZO
|
New York Stock Exchange
|
Securities registered pursuant to Section 12(g) of the
Act:
None
Indicate by check mark if the registrant is a well-known seasoned
issuer, as defined in Rule 405 of the Securities Act. Yes
☐
No
☑
Indicate by check mark if the registrant is not required to file
reports pursuant to Section 13 or Section 15(d) of the Act.
Yes
☐
No
☑
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements
for the past 90 days.
Yes
☑
No
☐
Indicate by check mark whether the registrant has submitted
electronically every Interactive Data File required to be submitted
pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter)
during the preceding 12 months (or for such shorter period that the
registrant was required to submit such files).
Yes
☑
No
☐
Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated filer,
smaller reporting company, or an emerging growth company. See the
definitions of “large accelerated filer,” “accelerated filer,”
“smaller reporting company,” and “emerging growth company” in Rule
12b-2 of the Exchange Act.
|
|
|
|
|
Large accelerated filer
|
☑
|
|
Accelerated filer
|
☐
|
Non-accelerated filer
|
☐
|
|
Smaller reporting company
|
☐
|
|
|
|
Emerging growth company
|
☐
|
If an emerging growth company, indicate by check mark if the
registrant has elected not to use the extended transition period
for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange
Act.
☐
Indicate by check mark whether the registrant has filed a report on
and attestation to its management’s assessment of
the effectiveness of its internal control over financial reporting
under Section 404(b) of the Sarbanes-Oxley Act (15
U.S.C.
7262(b)) by the registered public accounting firm that prepared or
issued its audit report.
☑
Indicate by check mark whether the registrant is a shell company
(as defined in Rule 12b-2 of the Act). Yes
☐
No
☑
The aggregate market value of common stock held by non-affiliates
of the registrant (21,095,025 shares) based on the closing price of
the registrant’s common stock as reported on the New York Stock
Exchange on March 31, 2022,
which was the last business day of the registrant’s most recently
completed second fiscal quarter, was $849,285,707.
For purposes of this computation, all officers and directors of the
registrant are deemed to be affiliates. Such determination should
not be deemed to be an admission that such officers and directors
are, in fact, affiliates of the registrant.
As of November 14, 2022,
there were outstanding
21,718,893
shares of the registrant’s common stock, par value $.001 per
share.
Documents Incorporated by Reference
Portions of the registrant’s definitive proxy statement for the
2023 Annual Meeting of Shareholders are incorporated by reference
into Part III of this report.
|
|
|
|
|
|
Auditor Firm Id:
|
185
|
Auditor Name:
|
KPMG LLP
|
Auditor Location:
|
Tampa, Florida
|
MARINEMAX, INC.
ANNUAL REPORT ON FORM 10-K
Fiscal Year Ended September 30, 2022
TABLE OF CONTENTS
Statement Regarding Forward-Looking Information
The statements contained in this report on Form 10-K that are not
purely historical are forward-looking statements within the meaning
of applicable securities laws. Forward-looking statements include
statements regarding our “expectations,” “anticipations,”
“intentions,” “plans,” “beliefs,” or “strategies” regarding the
future. Forward-looking statements also include statements
regarding revenue, margins, expenses, and earnings for fiscal 2023
and thereafter; our belief that our practices enhance our ability
to attract more customers, foster an overall enjoyable boating
experience, and offer boat manufacturers stable and professional
retail distribution and a broad geographic presence; our assessment
of our competitive advantages, including our hassle-free sales
approach, prime retail locations, premium product offerings,
extensive facilities, strong management and team members, and
emphasis on customer service and satisfaction before and after a
boat sale; our belief that our core values of customer service and
satisfaction and our strategies for growth and enhancing our
business, including without limitation, our acquisition strategies
and pursuit of contract manufacturing and vertical integration,
will enable us to achieve success and long-term growth as economic
conditions continue to recover; our belief that our retailing
strategies are aligned with the desires of consumers; and the scope
and duration of the COVID-19 pandemic and its impact on global
economic systems, our employees, sites, operations, customers,
suppliers and supply chain, managing growth effectively. All
forward-looking statements included in this report are based on
information available to us as of the filing date of this report,
and we assume no obligation to update any such forward-looking
statements. Our actual results could differ materially from the
forward-looking statements. Among the factors that could cause
actual results to differ materially are the factors discussed under
Item 1A, “Risk Factors.”
Unless expressly indicated or the context requires otherwise, the
terms “MarineMax,” “Company,” “we,” “us,” and “our” in this
document refer to MarineMax, Inc. and its subsidiaries.
PART
I
Item 1.
Business
Introduction
Our Company
MarineMax is the world’s largest recreational boat and yacht
retailer, selling new and used recreational boats, yachts, and
related marine products and services. MarineMax has over 120
locations worldwide, including 78 retail dealership locations, some
of which include marinas. Collectively, with the IGY acquisition,
MarineMax owns or operates 57 marinas worldwide. Through Fraser
Yachts and Northrop & Johnson, the Company also is the largest
superyacht services provider, operating locations across the globe.
Cruisers Yachts manufactures boats and yachts with sales through
our select retail dealership locations and through independent
dealers. Intrepid Powerboats manufactures powerboats and sells
through a direct-to-consumer model. MarineMax provides finance and
insurance services through wholly owned subsidiaries and operates
MarineMax Vacations in Tortola, British Virgin Islands. The Company
also owns Boatyard, an industry-leading customer experience digital
product company.
As of September 30, 2022, the Retail Operations segment included
the activity of 78 retail locations in Alabama, California,
Connecticut, Florida, Georgia, Illinois, Maryland, Massachusetts,
Michigan, Minnesota, Missouri, New Jersey, New York, North
Carolina, Ohio, Oklahoma, Rhode Island, South Carolina, Texas,
Washington and Wisconsin, where we sell new and used recreational
boats, including pleasure and fishing boats, with a focus on
premium brands in each segment. We also sell related marine
products, including engines, trailers, parts, and accessories. In
addition, we provide repair, maintenance, and slip and storage
services; we arrange related boat financing, insurance, and
extended service contracts; we offer boat and yacht brokerage sales
and yacht charter services. In the British Virgin Islands we offer
the charter of power catamarans, through MarineMax Vacations.
Fraser Yachts Group and Northrop & Johnson, leading superyacht
brokerage and luxury yacht services companies with operations in
multiple countries, are also included in this segment.
As of September 30, 2022, the Product Manufacturing segment
included activity of Cruisers Yachts, a wholly-owned MarineMax
subsidiary, manufacturing sport yacht and yachts with sales through
our select retail dealership locations and through independent
dealers, and Intrepid Powerboats. Cruisers Yachts is recognized as
one of the world’s premier manufacturers of premium sport yacht and
yachts, producing models from 33’ to 60’ feet. Intrepid Powerboats,
also a wholly-owned MarineMax subsidiary, is a producer of
customized boats, which incorporate the desires of each individual
owner. Intrepid Powerboats follows a direct-to-consumer
distribution model and has received many awards and accolades for
its innovations and high-quality craftsmanship that create industry
leading products in their categories.
In October 2022, we completed the acquisition of IGY Marinas. IGY
Marinas maintains a network of strategically positioned luxury
marinas situated in yachting and sport fishing destinations around
the world. IGY Marinas has created standards for service and
quality in nautical tourism around the world. It offers a global
network of marinas in the Americas, the Caribbean, and Europe,
delivering year-round accommodations. IGY Marinas caters to a wide
variety of luxury yachts, while also being exclusive home ports for
some of the world’s largest megayachts.
We are the largest retailer of Sea Ray and Boston Whaler
recreational boats which are manufactured by Brunswick Corporation
(“Brunswick”). Sales of new Brunswick boats accounted for
approximately 23% of our revenue in fiscal 2022. Sales of new Sea
Ray and Boston Whaler boats, both divisions of Brunswick, accounted
for approximately 11% and 9%, respectively, of our revenue in
fiscal 2022. Brunswick is a world leading manufacturer of marine
products and marine engines. We have agreements with Brunswick
covering Sea Ray products and Boston Whaler products and are the
exclusive dealer of Sea Ray and Boston Whaler boats in almost all
of our geographic markets. Additionally, we are the exclusive
dealer for Harris aluminum boats, a division of Brunswick, in many
of our geographic markets. We also are the exclusive dealer for
Italy-based Azimut-Benetti Group, or Azimut, for Azimut and Benetti
mega-yachts, yachts, and other recreational boats for the United
States. Sales of new Azimut boats and yachts accounted for
approximately 8% of our revenue in fiscal 2022. Additionally, we
are the exclusive dealer for certain other premium brands that
serve certain industry segments in our markets as shown by the
table on page three.
We also are involved in other boating-related activities. We sell
used boats at our retail locations, online, and at various
third-party marinas and other offsite locations; we sell marine
engines and propellers, primarily to our retail customers as
replacements for their existing engines and propellers; we sell a
broad variety of parts and accessories at our retail locations and
at various offsite locations, and through our print catalog; we
offer maintenance, repair, and slip and storage services at most of
our retail locations; we offer finance and insurance products at
most of our retail locations and at various offsite locations and
to our customers and independent boat dealers and brokers; we offer
boat and yacht brokerage sales at most of our retail locations and
at various offsite locations; and we conduct a charter business,
which is based in the British Virgin Islands, in which we offer
customers the opportunity to charter third-party and Company owned
power catamarans.
1
MarineMax commenced operations as a result of the March 1, 1998
acquisition of five previously independent recreational boat
dealers. Since that time, we have acquired 32 additional previously
independent recreational boat dealers, multiple marinas, five boat
brokerage operations, two superyacht service companies, two
full-service yacht repair operations, and two boat and yacht
manufacturers. We attempt to capitalize on the experience and
success of the acquired companies in order to establish a high
standard of customer service and responsiveness in the highly
fragmented retail boating industry. As a result of our emphasis on
premium brand boats, our average selling price for a new boat in
fiscal 2022 was approximately $256,000, an increase from
approximately $227,000 in fiscal 2021, compared with the industry
average selling price for calendar 2021 of approximately $71,000
based on industry data published by the National Marine
Manufacturers Association. We consider a store to be one or more
retail locations that are adjacent or operate as one entity or a
superyacht services region. Same-store sales include all stores
that were open and operated throughout both the current and
comparative prior period. Our same-store sales increased 25% in
fiscal 2020, increased 13% in fiscal 2021, and increased 5% in
fiscal 2022.
The U.S. recreational boating industry generated approximately
$56.7 billion in retail sales in calendar 2021, which is above the
former peak of $49.4 billion in calendar 2020. The retail sales
include sales of new and used boats; marine products, such as
engines, trailers, equipment, and accessories; and related
expenditures, such as fuel, insurance, docking, storage, and
repairs. Retail sales of new and used boats, engines, trailers, and
accessories accounted for approximately $45.7 billion of these
sales in 2021 based on industry data from the National Marine
Manufacturers Association. The highly-fragmented retail boating
industry generally consists of small dealers that operate in a
single market and provide varying degrees of merchandising,
professional management, and customer service. We believe that many
small dealers find it increasingly difficult to make the managerial
and capital commitments necessary to achieve higher customer
service levels and upgrade systems and facilities as required by
boat manufacturers and often demanded by customers. We also believe
that many dealers lack an exit strategy for their owners. We
believe these factors contribute to our opportunity to gain a
competitive advantage in current and future markets, through market
expansions and acquisitions.
Material Updates to Our Strategy
Since the last discussion of our strategy in our Form 10-K for our
fiscal year ended September 30, 2021, our primary goal remains to
enhance our position as the leading recreational boat and yacht
retailer and preeminent superyacht services company. Pursuant to
this strategy, we have completed recent acquisitions including
Fraser Yachts Group, Northrop & Johnson, Skipper Marine
Holdings, Inc. and certain affiliates (collectively,
"SkipperBud’s"), KCS International Holdings, Inc. and certain
affiliates ("Cruisers Yachts"), Intrepid Powerboats, Texas
MasterCraft, and IGY Marinas. Our acquisitions of Fraser Yachts
Group, Northrop & Johnson, SkipperBud’s, and IGY Marinas
increases our superyacht brokerage and luxury yacht services and
marina/storage services. Additionally, IGY Marinas’ scale and
strategic geographic footprint enables it to provide vertically
integrated services to superyacht customers as they travel to
popular destinations. Our acquisition of IGY Marinas offers a
global network of marinas in the Americas, the Caribbean, and
Europe, delivering year-round accommodations. IGY Marinas caters to
a wide variety of luxury yachts, while also being exclusive home
ports for some of the world’s largest megayachts.
In addition, we continue to broaden and strengthen our digital
initiatives. Our digital services are always available and offer
our full selection of boats, yachts and charters, as well as our
expert team to answer customers’ questions and help them find a
boat virtually. Additionally, our Boatyard digital platform allows
marine businesses effective and customized digital solutions
delivering great customer experiences by enabling customers to
interact through a personalized experience tailored to their
needs.
Development of the Company; Expansion of Business
Since our initial acquisitions in March 1998, we have acquired 32
additional previously independent recreational boat dealers,
multiple marinas, five boat brokerage operations, two superyacht
service companies, two full-service yacht repair operations, and
two boat and yacht manufacturers. Acquired dealers operate under
the MarineMax name.
We continually attempt to enhance our business by providing a full
range of services, offering extensive and high-quality product
lines, maintaining prime retail locations, pursuing the MarineMax
One Price hassle-free sales approach, and emphasizing a high level
of customer service and satisfaction.
We also from time to time evaluate opportunities to expand our
operations by potentially acquiring recreational boat dealers to
expand our geographic scope, expanding our product lines, opening
new retail locations within or outside our existing territories,
and offering new products and services for our customers and by
potentially acquiring companies to pursue contract manufacturing or
vertical integration strategies.
Apart from acquisitions and our superyacht service locations, we
have opened 35 new retail locations in existing territories,
excluding those opened on a temporary basis for a specific purpose.
We also monitor the performance of our retail locations and close
retail locations that do not meet our expectations. Based on these
factors and previous depressed economic conditions, we have closed
76 retail locations since March 1998 which includes the 2008
financial crisis, excluding those opened on a temporary basis for a
specific purpose and including 4 during the last three fiscal
years.
2
The following table sets forth information regarding the businesses
that we have acquired and their geographic regions since fiscal
year 2011.
|
|
|
|
|
Acquired Companies
|
|
Acquisition Date
|
|
Geographic Region
|
Treasure Island Marina, LLC
|
|
February 2011
|
|
Florida Panhandle
|
Bassett Marine, LLC
|
|
September 2012
|
|
Connecticut, Rhode Island and Western Massachusetts
|
Parker Boat Company
|
|
March 2013
|
|
Central Florida
|
Ocean Alexander Yachts
|
|
April 2014
|
|
Eastern United States
|
Bahia Mar Marina
|
|
January 2016
|
|
Florida Panhandle
|
Russo Marine
|
|
April 2016
|
|
Eastern Massachusetts and Rhode Island
|
Hall Marine Group
|
|
January 2017
|
|
North Carolina, South Carolina and Georgia
|
Island Marine Center
|
|
January 2018
|
|
New Jersey
|
Tera Miranda
|
|
April 2018
|
|
Oklahoma
|
Bay Pointe Marina
|
|
September 2018
|
|
Massachusetts
|
Sail & Ski Center
|
|
April 2019
|
|
Texas
|
Fraser Yachts Group
|
|
July 2019
|
|
Worldwide
|
Boatyard, Inc.
|
|
February 2020
|
|
Worldwide
|
Northrop & Johnson
|
|
July 2020
|
|
Worldwide
|
Private Insurance Services
|
|
July 2020
|
|
Worldwide
|
SkipperBud’s & Silver Seas Yachts
|
|
October 2020
|
|
Great Lakes region and West Coast United States
|
Cruisers Yachts
|
|
May 2021
|
|
Worldwide
|
Nisswa Marine
|
|
July 2021
|
|
Minnesota
|
Intrepid Powerboats
|
|
November 2021
|
|
Worldwide
|
Texas MasterCraft
|
|
November 2021
|
|
Texas
|
Superyacht Management, S.A.R.L.
|
|
April 2022
|
|
France
|
Endeavour Marina
|
|
August 2022
|
|
Texas
|
IGY Marinas
|
|
October 2022
|
|
Worldwide
|
In addition to acquiring recreational boat dealers, superyacht
service companies, boat manufacturers, marinas, and opening new
retail locations, we also add new product lines to expand our
operations. The following table sets forth certain of our current
product lines that we have added to our existing locations during
the years indicated.
3
|
|
|
|
|
Product Line
|
|
Fiscal Year
|
|
Current Geographic Regions
|
Boston Whaler
|
|
1998
|
|
West Central Florida, Stuart, Florida, and Dallas, Texas
|
Grady-White
|
|
2002
|
|
Houston, Texas
|
Boston Whaler
|
|
2004-2005
|
|
North and South Carolina (2004), Houston, Texas (2005)
|
Azimut
|
|
2006
|
|
Northeast United States from Maryland to Maine
|
Boston Whaler
|
|
2006
|
|
New York
|
Grady-White
|
|
2006-2010
|
|
Pensacola, Florida (2006), Jacksonville, Florida (2010)
|
Azimut
|
|
2008
|
|
Florida
|
Boston Whaler
|
|
2009-2012
|
|
Southwest Florida (2009), Pompano Beach, Florida (2012)
|
Harris
|
|
2010
|
|
Missouri, Minnesota, and New Jersey
|
Nautique by Correct Craft
|
|
2010
|
|
West Central Florida and Minnesota
|
Harris
|
|
2011-2012
|
|
West Central Florida (2011), Alabama (2012), North and Southwest
Florida (2012), and Texas (2012)
|
Crest
|
|
2011-2018
|
|
Georgia (2011), Oklahoma (2012), North Carolina and South Carolina
(2012), New Jersey (2015), Florida (2018)
|
Azimut
|
|
2012
|
|
United States other than where previously held
|
Scout
|
|
2012
|
|
Southeast Florida, Maryland, and New Jersey
|
Sailfish
|
|
2013
|
|
Connecticut, New Jersey, North Carolina, Ohio, and Rhode
Island
|
Ocean Alexander Yachts
|
|
2014
|
|
Eastern United States
|
Scout
|
|
2014
|
|
Texas, New York
|
Aquila
|
|
2014
|
|
Worldwide, excluding China
|
Galeon
|
|
2015
|
|
North America, Central America, and South America
|
Grady-White
|
|
2016
|
|
Miami, Florida
|
Boston Whaler
|
|
2016
|
|
Parts of Massachusetts, Connecticut, and Rhode Island
|
Yamaha Jet Boats
|
|
2017
|
|
Georgia, North Carolina, and South Carolina
|
Bennington
|
|
2017
|
|
South Carolina
|
Mastercraft
|
|
2018-2021
|
|
South Carolina (2018), Wisconsin and Illinois (2021)
|
NauticStar
|
|
2018
|
|
Panama City, Florida, Oklahoma, Missouri, Minnesota, North Carolina
and South Carolina
|
Tigé
|
|
2018-2019
|
|
Orlando, Florida, Oklahoma, Georgia, and North Carolina
|
Benetti
|
|
2019
|
|
United States and Canada
|
Aviara
|
|
2019
|
|
United States
|
MJM Yachts
|
|
2019
|
|
Florida
|
ATX Surf Boats
|
|
2020
|
|
Orlando, Florida, Oklahoma, Georgia, and North Carolina
|
Barletta
|
|
2021
|
|
Wisconsin, Illinois, Detroit, and Michigan
|
Four Winns
|
|
2021
|
|
Wisconsin, Illinois, Ohio and Detroit, Michigan
|
Harris
|
|
2021
|
|
Wisconsin, Illinois, Grand Rapids, Michigan and Ohio
|
Sea Ray
|
|
2021
|
|
Wisconsin, Illinois, Michigan, and Ohio
|
Starcraft
|
|
2021
|
|
Wisconsin, Illinois & Michigan
|
Sylvan
|
|
2021
|
|
Wisconsin, Illinois, & Eastern Michigan
|
Tiara
|
|
2021
|
|
Wisconsin, Illinois, Michigan, California & Ohio
|
Princess
|
|
2021
|
|
California and Seattle, Washington
|
Cruisers Yachts (1)
|
|
2021
|
|
Worldwide
|
Chapparral, Chris-Craft, Moomba
|
|
2021
|
|
Minnesota
|
Premier, Robalo, Supra
|
|
2021
|
|
Minnesota
|
Boston Whaler
|
|
2022
|
|
Minnesota
|
Intrepid Powerboats (1)
|
|
2022
|
|
Worldwide
|
Mastercraft
|
|
2022
|
|
North Texas
|
Wider Yachts
|
|
2022
|
|
North America
|
4
(1)
Product line owned by MarineMax
We add brands with the intent to either offer a migration path for
our existing customer base or fill a gap in our product offerings.
As a result, we believe that new brands we offer are generally
complementary and do not negatively impact the business generated
from our other prominent brands. We also discontinue offering
product lines from time to time, primarily based upon customer
preferences.
We strive to maintain our core values of high customer service and
satisfaction and plan to continue to pursue strategies that we
believe will enable us to achieve long-term success and growth. We
believe our expanded product offerings have strengthened our
same-store sales growth. We plan to further expand our business
through both acquisitions in new territories and new store openings
in existing territories. In addition, we plan to continue to expand
our other traditional services, including conducting used boat
sales at our retail locations, at offsite locations, and digitally;
selling related marine products, including engines, trailers,
parts, and accessories at our retail locations and at various
offsite locations; providing maintenance, repair, and storage
services at most of our retail locations; offering our customers
the ability to finance new or used boat purchases and to purchase
extended service contracts and arrange insurance coverage,
including boat property, disability, undercoating, gel sealant,
fabric protection, trailer tire and wheel protection, and casualty
insurance coverage; offering boat and yacht brokerage sales at most
of our retail locations and at various offsite locations; offering
boat storage; conducting our yacht charter business; and
manufacturing sport yacht and yachts. Our expansion plans will
depend, in large part, upon economic and industry
conditions.
U.S. Recreational Boating Industry
The U.S. recreational boating industry generated approximately
$56.7 billion in retail sales in calendar 2021, which is above the
former peak of $49.4 billion in calendar 2020. The retail sales
include sales of new and used recreational boats; marine products,
such as engines, trailers, parts, and accessories; and related
boating expenditures, such as fuel, insurance, docking, storage,
and repairs. Retail sales of new and used boats, engines, trailers,
equipment, and accessories accounted for approximately $45.7
billion of such sales in calendar 2021. To provide historical
perspective, annual retail recreational boating sales were $17.9
billion in 1988, but declined to a low of $10.3 billion in 1992
based on industry data published by the National Marine
Manufacturers Association. We believe this decline was attributable
to several factors, including a recession, the Gulf War, and the
imposition throughout 1991 and 1992 of a luxury tax on boats sold
at prices in excess of $100,000. The luxury tax was repealed in
1993, and retail boating sales increased each year thereafter
except for 1998, 2003, and 2007 through 2010. We believe
recreational boating has a natural appeal to consumers, along with
other outdoor activities, and will continue to grow in favorable
economic conditions absent any unusual industry headwinds (see Risk
Factors).
The recreational boat retail market remains highly fragmented with
little consolidation having occurred to date and consists of
numerous boat retailers, most of which are small companies owned by
individuals that operate in a single market and provide varying
degrees of merchandising, professional management, and customer
service. We believe that many boat retailers are encountering
increased pressure from boat manufacturers to improve their levels
of service and systems, increased competition from larger national
retailers in certain product lines, and, in certain cases, business
succession issues.
Products and Services
We offer new and used recreational boats and related marine
products, including engines, trailers, parts, and accessories.
While we sell a broad range of new and used boats, we focus on
premium brand products. In addition, we assist in arranging related
boat financing, insurance, and extended service contracts; provide
boat maintenance and repair services; offer slip and storage
accommodations; provide boat and yacht brokerage sales; and conduct
a yacht charter business.
New Boat Sales
We primarily sell recreational boats, including pleasure boats and
fishing boats. A number of the products we offer are manufactured
by Brunswick, a leading worldwide manufacturer of recreational
boats and yachts, including Sea Ray pleasure boats, Boston Whaler
fishing boats, and Harris aluminum boats. Sales of new Brunswick
boats accounted for approximately 23% of our revenue in fiscal
2022. Sales of new Sea Ray and Boston Whaler boats accounted for
approximately 11% and 9%, respectively, of our revenue in fiscal
2022. Certain of our dealerships also sell luxury yachts, fishing
boats, and pontoon boats provided by other manufacturers, including
Italy-based Azimut. Sales of new Azimut boats and yachts accounted
for approximately 8% of our revenue in fiscal 2022. Cruisers
Yachts, a wholly-owned MarineMax subsidiary, manufactures sport
yacht and yachts with sales through our select retail dealership
locations and through independent dealers. Intrepid Powerboats, a
MarineMax company, manufactures powerboats and sells through a
direct-to-consumer model. During fiscal 2022, new boat sales,
including sales of Cruisers Yachts and Intrepid Powerboats,
accounted for approximately 73.2% or $1.689 billion of our
revenue.
5
We offer recreational boats in most market segments, but have a
particular focus on premium quality pleasure boats and yachts as
reflected by our fiscal 2022 average new boat sales price of
approximately $256,000 an increase from approximately $227,000 in
fiscal 2021, compared with an estimated industry average selling
price for calendar 2021 of approximately $71,000 based on industry
data published by the National Marine Manufacturers Association.
Given our locations in some of the more affluent, offshore-oriented
boating areas in the United States and emphasis on high levels of
customer service, we sell a relatively higher percentage of large
recreational boats, such as mega-yachts, yachts, and sport
cruisers. We believe that the product lines we offer are among the
highest quality within their respective market segments, with
well-established trade-name recognition and reputations for
quality, performance, and style.
The following table is illustrative of the range and approximate
manufacturer suggested retail price range of new boats that we
currently offer, but is not all inclusive.
|
|
|
|
|
Product Line and Trade Name
|
|
Overall Length
|
|
Manufacturer Suggested
Retail Price Range
|
E-Power Yachts
|
|
|
|
|
Wider Yachts
|
|
40’ to 120’+
|
|
12,000,000 to 35,000,000+
|
Motor Yachts
|
|
|
|
|
Azimut
|
|
40’ to 120’+
|
|
$800,000 to $16,000,000+
|
Ocean Alexander Yachts
|
|
45’ to 155’+
|
|
1,500,000 to 35,000,000+
|
Benetti
|
|
30M to 145M
|
|
12,000,000 to 24,000,000+
|
Princess
|
|
35' to 95'
|
|
700,000 to 10,000,000
|
Pleasure Boats
|
|
|
|
|
Sea Ray
|
|
19’ to 40’
|
|
50,000 to 1,100,000
|
Aquila
|
|
28’ to 72’
|
|
290,000 to 6,500,000+
|
Galeon
|
|
32’ to 80’
|
|
750,000 to 6,000,000+
|
NauticStar
|
|
19’ to 28’
|
|
30,000 to 300,000
|
MJM Yachts
|
|
35’ to 50’+
|
|
800,000 to 2,000,000+
|
Aviara
|
|
32’ to 40’
|
|
400,000 to 800,000+
|
Cruisers Yachts (1)
|
|
33’ to 60’
|
|
300,000 to 2,500,000+
|
Tiara
|
|
34' to 53'
|
|
400,000 to 2,500,000
|
Four Winns
|
|
19' to 35'
|
|
45,000 to 550,000
|
Intrepid Powerboats (1)
|
|
25' to 48'
|
|
200,000 to 1,500,000
|
Pontoon Boats
|
|
|
|
|
Harris
|
|
19’ to 27’
|
|
30,000 to 250,000
|
Crest
|
|
20’ to 27’
|
|
40,000 to 175,000
|
Bennington
|
|
17’ to 30’
|
|
30,000 to 300,000
|
Barletta
|
|
20' to 28'
|
|
60,000 to 250,000
|
Starcraft
|
|
18' to 25'
|
|
25,000 to 100,000
|
Sylvan
|
|
18' to 25'
|
|
25,000 to 100,000
|
Fishing Boats
|
|
|
|
|
Boston Whaler
|
|
13’ to 42’
|
|
20,000 to 2,000,000
|
Grady White
|
|
18’ to 45’
|
|
70,000 to 1,800,000
|
Scout
|
|
17’ to 53’
|
|
20,000 to 2,700,000
|
Sailfish
|
|
19’ to 36’
|
|
100,000 to 500,000
|
Ski Boats
|
|
|
|
|
Nautique by Correct Craft
|
|
20’ to 25’
|
|
100,000 to 400,000
|
Tigé
|
|
20’ to 25’
|
|
150,000 to 220,000
|
ATX Surf Boats
|
|
20’ to 24’
|
|
120,000 to 140,000
|
Mastercraft
|
|
20’ to 26’
|
|
110,000 to 260,000
|
Jet Boats
|
|
|
|
|
Yamaha Jet Boats
|
|
19’ to 24’
|
|
40,000 to 100,000
|
Scarab
|
|
16' to 28'
|
|
40,000 to 150,000
|
(1)
Product line owned by MarineMax
E-Power Yachts.
Italian-made Wider Yachts manufactures electric yachts with
performance and exceptional quality in mind. From its line of
superyachts to express cruisers, electric catamarans, and new
builds, Wider Yachts offers a number of features.
Motor Yachts.
Ocean Alexander Yachts, Azimut, Benetti, and Princess are four of
the world’s premier yacht builders. The motor yacht product lines
typically include state-of-the-art designs with live-aboard
luxuries. Azimut yachts are known for their Americanized
6
open layout with Italian design and powerful performance. The
luxurious interiors of Azimut yachts are accented by windows and
multiple accommodations that have been designed for comfort. Ocean
Alexander Yachts are known for their excellent engineering,
performance, and functionality combined with luxuries typically
found on larger mega yachts. Benetti yachts and mega yachts are
known for maintaining high quality standards with excellent
aesthetic and functional results as well as combining fine Italian
tradition and craftsmanship with technology. Princess yachts are a
leading British luxury yacht manufacturer with attention to detail,
design, and performance.
Pleasure Boats.
Sea Ray pleasure boats target both the luxury and the family
recreational boating markets and come in a variety of
configurations designed to suit each customer’s particular
recreational boating style. Sea Ray pleasure boats feature custom
instrumentation that may include an electronics package; various
hull, deck, and cockpit designs that can include a swim platform;
bow pulpit and raised bridge; and various amenities, such as swivel
bucket helm seats, lounge seats, sun pads, wet bars, built-in ice
chests, and refreshment centers. Most Sea Ray pleasure boats
feature Mercury or MerCruiser engines. Galeon specializes in luxury
yacht and motorboats with over thirty years of experience. Galeon
is one of Europe’s leading and premier boat manufacturers. We
believe Galeon yachts combine the latest technology, hand crafted
excellence, attention to detail, superb performance, and great
innovative designs with modern styling and convenience. Aquila
power catamarans provide form, function, and offer practicality and
comfort with innovation. We believe NauticStar provides sport deck
boats that combine comfort, features, economy, and versatility that
make NauticStar a popular choice among experienced boaters. MJM
Yachts combine speed, performance, greater stability, innovative
designs and layouts, along with comforts and space for entertaining
in addition to a patent protected MJM signature look. Aviara is the
newest brand manufactured by MasterCraft focused on the production
of vessels 30-feet and over with the goal of creating an elevated
open water experience by fusing progressive style, comfort, and
luxury. Cruisers Yachts is owned by MarineMax and is continuously
building innovative, quality, hand-crafted, American made sport
yacht and yachts with the stylish and luxurious Cantius series of
boats as well as sleek and powerful outboard models. Tiara Yachts
manufactures handcrafted, American-made luxury yachts designed for
performance and comfort. Four Winns manufactures quality runabouts,
bowriders, yachts and tow sport boats. Intrepid Powerboats uses
advanced composite construction to make each boat unique to its
owner as well as stronger, faster and more fuel-efficient to
deliver a safe, smooth, dry ride on the water.
Pontoon Boats.
Harris is a pontoon industry leader and offers a variety of some of
the most innovative, luxurious, and premium pontoon models to fit
boaters’ needs. Harris is known for exceptional performance
combined with a stable and safe platform. Crest provides a variety
of pontoon models that are designed to provide extreme levels of
quality, safety, style and comfort to meet family recreational
needs. Bennington offers what we believe to be industry leading
design, craftsmanship, and a quiet, smooth, ride. Barletta offers
quality construction, simple yet refined models, and customer
focused amenities. Starcraft is a leading boat manufacturer with a
long history of continuous improvements to fiberglass hull design
and a dedication to providing pontoon, runabouts, and deck boat
models for families and watersport enthusiasts. Sylvan builds
quality, innovative, high performance pontoon boats. With a variety
of designs and options, the pontoon boats we offer appeal to a
broad audience of pontoon boat enthusiasts and existing
customers.
Fishing Boats.
The fishing boats we offer, such as Boston Whaler, Grady-White,
Scout, and Sailfish, range from entry level models to advanced
models designed for fishing and water sports in lakes, bays, and
off-shore waters, with cabins with limited live-aboard capability.
The fishing boats typically feature livewells, in-deck fishboxes,
rodholders, rigging stations, cockpit coaming pads, and fresh and
saltwater washdowns.
Ski Boats.
The ski boats we offer are Nautique by Correct Craft, Tigé, ATX
Surf Boats, and Mastercraft, which range from entry level models to
advanced models and all of which are designed to achieve an
ultimate wake for increased skiing, surfing, and wakeboarding
performance and safety. With a variety of designs and options,
Nautique, Tigé, ATX Surf Boats, and Mastercraft ski boats appeal to
the competitive and recreational user alike.
Jet Boats.
Yamaha jet boats are designed to offer a reliable, high performing,
internal propulsion system with superior handling. Yamaha is a
worldwide leader in jet boats. The Scarab jet boats we offer range
from entry level models to advanced models, all of which are
designed for performance and with exclusive design elements to meet
family recreational needs. With a variety of designs and options,
the jet boats we offer appeal to a broad audience of jet boat
enthusiasts and existing customers.
Used Boat Sales
We sell used versions of the new makes and models we offer and, to
a lesser extent, used boats of other makes and models generally
taken as trade-ins. During fiscal 2022, used boat sales accounted
for 7.3% or approximately $169.0 million of our revenue.
Our used boat sales depend on our ability to source a supply of
high-quality used boats at attractive prices. We acquire
substantially all of our used boat inventory through customer
trade-ins. We strive to increase our used boat business through the
availability of quality used boat trade-ins generated from our new
boat sales efforts, which are well-maintained through our service
initiatives. Additionally, substantially all of our used boat
inventory is posted on our digital properties, which expands the
awareness and availability of our products to a large audience of
boating enthusiasts. We also sell used boats at various marinas and
other offsite locations throughout the country.
7
To further enhance our used boat sales, we offer extended warranty
plans generally available for used boats less than nine years old.
The extended warranty plans apply to each qualifying used boat,
which has passed a 48-point inspection, and provides protection
against failure of most mechanical parts for up to three years. We
believe this type of program enhances our sales of used boats by
motivating purchasers of used boats to complete their purchases
through our dealerships.
Marine Engines, Related Marine Equipment, and Boating Parts and
Accessories
We offer marine engines and equipment, predominantly manufactured
by Mercury Marine, a division of Brunswick, and Yamaha. We sell
marine engines and propellers primarily to retail customers as
replacements for their existing engines or propellers. Mercury
Marine and Yamaha have introduced various new engine models that
are designed to reduce engine emissions to comply with current
United States Environmental Protection Agency (“EPA”) requirements.
See “Business — Governmental Regulations, including Environmental
Regulations.” Industry leaders, Mercury Marine and Yamaha,
specialize in state-of-the-art marine propulsion systems and
accessories. Many of our dealerships have been recognized by
Mercury Marine as “Premier Service Dealers”. This designation is
generally awarded based on meeting certain standards and
qualifications.
We also sell a broad variety of marine parts and accessories at our
retail locations, at various offsite locations, and through our
print catalog. These marine parts and accessories include marine
electronics; dock and anchoring products, such as boat fenders,
lines, and anchors; boat covers; trailer parts; water sport
accessories, such as tubes, lines, wakeboards, and skis; engine
parts; oils; lubricants; steering and control systems; corrosion
control products and service products; high-performance
accessories, such as propellers and instruments; and a complete
line of boating accessories, including life jackets, inflatables,
and water sports equipment. We also offer novelty items, such as
shirts, caps, and license plates bearing the manufacturer’s or
dealer’s logos. In all of our parts and accessories business, we
utilize our industry knowledge and experience to offer boating
enthusiasts high-quality products with which we have
experience.
The sale of marine engines, related marine equipment, and boating
parts and accessories, which are all tangible products, accounted
for approximately 3.3% or $76.7 million of our fiscal 2022
revenue.
Maintenance, Repair, and Storage Services
Providing customers with professional, prompt maintenance and
repair services is critical to our sales efforts and contributes to
our success. We provide maintenance and repair services at most of
our retail locations, with extended service hours at certain of our
locations. In addition, in many of our markets, we provide mobile
maintenance and repair services at the location of the customer’s
boat. We believe that this service commitment is a competitive
advantage in the markets in which we compete and is critical to our
efforts to provide a trouble-free boating experience. To further
this commitment, in certain of our markets, we have opened
stand-alone maintenance and repair facilities in locations that are
more convenient for our customers and that increase the
availability of such services. We also believe that our maintenance
and repair services contribute to strong customer relationships and
that our emphasis on preventative maintenance and quality service
increases the potential supply of well-maintained boats for our
used boat sales.
We perform both warranty and non-warranty repair services, with the
cost of warranty work reimbursed by the manufacturer in accordance
with the manufacturer’s warranty reimbursement program. For
warranty work, most manufacturers, including Brunswick, reimburse a
percentage of the dealer’s posted service labor rates, with the
percentage varying depending on the dealer’s customer satisfaction
index rating and attendance at service training courses. We derive
the majority of our warranty revenue from Brunswick products, as
Brunswick products comprise the largest percentage of our products
sold. Certain other manufacturers reimburse warranty work at a
fixed amount per repair. Because boat manufacturers permit warranty
work to be performed only at authorized dealerships, we receive
substantially all of the warranted maintenance and repair work
required for the new boats we sell. The third-party extended
warranty contracts we offer also result in an ongoing demand for
our maintenance and repair services for the duration of the term of
the extended warranty contract.
Our maintenance and repair services are performed by
manufacturer-trained and certified service technicians. In charging
for our mechanics’ labor, many of our dealerships use a variable
rate structure designed to reflect the difficulty and
sophistication of different types of repairs. The percentage
markups on parts are similarly based on manufacturer suggested
prices and market conditions for different parts.
At many of our locations, we offer boat storage services, including
in-water slip storage and inside and outside land storage. These
storage services are offered at competitive market rates and
include both in-season and out-of-season storage. In October 2022,
we completed the acquisition of IGY Marinas. IGY Marinas maintains
a network of luxury marinas situated in yachting and sport fishing
destinations around the world. IGY Marinas has high standards for
service and quality in nautical tourism around the world. It offers
a global network of marinas in the Americas, the Caribbean, and
Europe, delivering year-round accommodations. IGY Marinas caters to
a wide variety of luxury yachts, while also being exclusive home
ports for some of the world’s largest megayachts.
8
Maintenance, repair, rent, and storage services accounted for
approximately 5.7% or $130.5 million of our revenue during fiscal
2022 of which, approximately 3.3% or $77.1 million related to
repair services, approximately 0.8% or $17.6 million related to
parts and accessories for repairs, and approximately 1.6% or $35.8
million related to income from rent and storage service
rentals.
F&I Products
At each of our retail locations and at various offsite locations
where applicable, we offer our customers the ability to finance new
or used boat purchases and to purchase extended service contracts
and arrange insurance coverage, including boat property,
disability, undercoating, gel sealant, fabric protection, trailer
tire and wheel protection, and casualty insurance coverage
(collectively, “F&I”). We have relationships with various
national marine product lenders under which the lenders purchase
retail installment contracts evidencing retail sales of boats and
other marine products that are originated by us in accordance with
existing pre-sale agreements between us and the lenders. These
arrangements permit us to receive a portion of the finance charges
expected to be earned on the retail installment contract based on a
variety of factors, including the credit standing of the buyer, the
annual percentage rate of the contract charged to the buyer, and
the lender’s then current minimum required annual percentage rate
charged to the buyer on the contract. This participation is subject
to repayment by us if the buyer prepays the contract or defaults
within a designated time period, usually 0 to 180 days. To the
extent required by applicable state law, our dealerships are
licensed to originate and sell retail installment contracts
financing the sale of boats and other marine products.
We also offer third-party extended service contracts under which,
for a predetermined price, we provide all designated services
pursuant to the service contract guidelines during the contract
term at no additional charge to the customer above a deductible.
While we sell all new boats with the boat manufacturer’s standard
hull and engine warranty, extended service contracts provide
additional coverage beyond the time frame or scope of the
manufacturer’s warranty. Purchasers of used boats generally are
able to purchase an extended service contract, even if the selected
boat is no longer covered by the manufacturer’s warranty.
Generally, we receive a fee for arranging an extended service
contract. Most required services under the contracts are provided
by us and paid for by the third-party contract holder. Beginning in
fiscal 2021, we have partnered with a third-party F&I product
provider to offer prepaid maintenance plans for select, new
models.
We also are able to assist our customers with obtaining property
and casualty insurance which covers loss or damage to the vessel.
We provide worldwide yacht insurance programs for brokerage houses,
yacht management groups, and maritime attorneys. We utilize
expertise in complex underwriting, including understanding the
exposure of an owner, captain, crew, guests, tenders and navigation
to provide clients with uniquely designed protection so customers
can cruise confidently.
During fiscal 2022, fee income generated from F&I products
accounted for approximately 3.0% or $69.0 million of our revenue.
We believe that our customers’ ability to obtain competitive
financing quickly and easily at our dealerships complements our
ability to sell new and used boats. We also believe our ability to
provide customer-tailored financing on a “same-day” basis gives us
an advantage over many of our competitors, particularly smaller
competitors that lack the resources to arrange boat financing at
their dealerships or that do not generate sufficient volume to
attract the diversity of financing sources that are available to
us.
Brokerage Sales
Through employees or subcontractors that are licensed boat or yacht
brokers where applicable, we offer boat or yacht brokerage sales at
most of our retail locations. For a commission, we offer for sale
brokered boats or yachts, listing them digitally on various sites,
advising our other retail locations of their availability through
our integrated computer system, and posting them on our
website,
www.MarineMax.com.
Often sales are co-brokered, with the commission split between the
buying and selling brokers. We believe that our access to potential
used boat customers and methods of listing and advertising
customers’ brokered boats or yachts is more extensive than is
typical among brokers. In addition to generating revenue from
brokerage commissions, our brokerage sales also enable us to offer
a broad array of used boats or yachts without increasing related
inventory costs. Also, through Fraser Yachts Group and Northrop
& Johnson, we offer yacht and superyacht brokerage. During
fiscal 2022, brokerage sales commissions accounted for
approximately 5.8% or $133.1 million of our revenue.
Our brokerage customers generally receive the same high level of
customer service as our new and used boat customers. Our waterfront
retail locations enable in-water demonstrations of an on-site
brokered boat. Our maintenance and repair services, including
mobile service, also are generally available to our brokerage
customers. Generally, the purchaser of a boat brokered through us
also can take advantage of MarineMax Getaways!® weekend and day
trips and other rendezvous gatherings and in-water events, as well
as boat operation and safety seminars. We believe that the array of
services we offer are unique in the brokerage business.
Yacht Charter
In 2011 we launched a yacht charter business in which we offer
customers the opportunity to charter catamarans in exotic
destinations, starting with our initial location in the British
Virgin Islands. In this business, we sell specifically designed
yachts to third parties for inclusion in our yacht charter fleet;
enter into yacht management agreements under which yacht owners
enable us to put their
9
yachts in our yacht charter program for a period of several years
for a fixed monthly fee payable by us; provide our services in
storing, insuring, and maintaining their yachts; and charter these
yachts to vacation customers at agreed fees payable to us. The
yacht owners will be able to utilize the yachts for personal use
for a designated number of weeks during the terms of the management
agreement and take possession of their yachts following the
expiration of the yacht management agreements.
In addition to the specific business we launched in the British
Virgin Islands, we also offer yacht charter services. For a fee, we
assist yacht owners in the charter of their vessel by
third-parties. Additionally, through Fraser Yachts Group and
Northrop & Johnson we offer yacht and superyacht chartering,
charter management, yacht management, crew placement, new boat
build oversight services and other luxury yacht services. During
fiscal 2022, the income from rentals of chartering power yachts,
yacht charter fees, and other charter services accounted for
approximately 1.7% or $40.7 million of our revenue. Our facilities
in the British Virgin Islands and yacht charter fleet suffered
damage from Hurricane Irma in September of 2017. Beginning in March
2020, we temporarily closed our facilities in the British Virgin
Islands and yacht charters based on guidance from local government
and health officials as a result of the COVID-19 pandemic. Yacht
charters resumed during fiscal 2021, but the impact of the COVID-19
pandemic and the duration for which it may have an impact cannot be
determined at this time.
Offsite Sales
We sell used boats, offer F&I products, and sell parts and
accessories at various third-party offsite locations, including
marinas.
Product Manufacturing
Cruisers Yachts, a wholly-owned MarineMax subsidiary, manufactures
sport yacht and yachts with sales through our select retail
dealership locations and through independent dealers. Cruisers
Yachts is recognized as one of the world’s premier manufacturers of
premium sport yacht and yachts, producing models from 33’ to 60’
feet. Intrepid Powerboats, also a wholly-owned MarineMax
subsidiary, is recognized as a world class producer of customized
boats, reflecting the unique desires of each individual owner.
Intrepid Powerboats follows a direct-to-consumer distribution
model.
Retail Locations
We sell our recreational boats and other marine products and offer
our related boat services through 78 retail locations in Alabama,
California, Connecticut, Florida, Georgia, Illinois, Maryland,
Massachusetts, Michigan, Minnesota, Missouri, New Jersey, New York,
North Carolina, Ohio, Oklahoma, Rhode Island, South Carolina,
Texas, Washington and Wisconsin. Each retail location generally
includes an indoor showroom (including some of the industry’s
largest indoor boat showrooms) and an outside area for displaying
boat inventories, a business office to assist customers in
arranging financing and insurance, maintenance and repair
facilities, and at certain retail locations boat storage services,
including in-water slip storage and inside and outside land
storage.
Many of our retail locations are waterfront properties on some of
the nation’s most popular boating locations. Our waterfront retail
locations, most of which include marina-type facilities and docks
at which we display our yachts and boats, are easily accessible to
the boating populace, serve as in-water showrooms, and enable the
sales force to give customers immediate in-water demonstrations of
various boat models. Most of our other locations are in close
proximity to water. The following table sets forth certain of our
waterfront properties.
10
|
|
|
State
|
Waterfront properties
|
California
|
Newport Bay
|
San Diego Bay
|
|
Richardson Bay
|
|
Connecticut
|
Norwalk Harbor
|
Westbrook Harbor
|
Florida
|
Intracoastal Waterway
|
Atlantic Ocean
|
|
Boca Ciega Bay
|
Caloosahatchee River
|
|
Naples Bay
|
Tampa Bay
|
|
Pensacola Bay
|
Saint Andrews Bay
|
Georgia
|
Lake Lanier
|
Wilmington River
|
Illinois
|
Lake Michigan
|
Lake Marie
|
Maryland
|
Chesapeake Bay
|
|
Massachusetts
|
Town River
|
|
Michigan
|
Saginaw River
|
Lake St. Clair
|
|
Cass Lake
|
Spring Lake
|
|
Lake Fenton
|
|
Minnesota
|
Lake Minnetonka
|
St. Croix River
|
Missouri
|
Lake of the Ozarks
|
|
New Jersey
|
Barnegat Bay
|
Little Egg Harbor Bay
|
|
Little Egg Harbor Bay
|
Manasquan River
|
New York
|
Huntington Harbor
|
|
North Carolina
|
Masonboro Inlet
|
|
Ohio
|
Lake Erie
|
|
Oklahoma
|
Grand Lake
|
|
Rhode Island
|
Newport Harbor
|
|
South Carolina
|
Lake Wylie
|
|
Texas
|
Clear Lake
|
Lake Lewisville
|
Washington
|
Lake Union
|
|
Wisconsin
|
Sturgeon Bay
|
Lake Mendota
|
|
Kinnickinnic River
|
Lake Butte Des Mortes
|
Additionally, through IGY Marinas we own and manage luxury marinas
situated around the world. The following table sets forth certain
of our owned and managed luxury marinas.
|
|
|
Location
|
Luxury Marinas
|
Colombia
|
Marina Santa Marta
|
|
Costa Rica
|
Marina Bahia Golfito
|
|
England
|
St. Katharine Docks
|
|
France
|
IGY Sète Marina
|
IGY Vieux – Port de Cannes
|
Italy, Sardinia
|
IGY Portisco Marina
|
Marina Di Porto Cervo
|
Mexico
|
Marina Cabo San Lucas
|
|
Panama
|
Red Frog Beach Island Marina
|
|
Providenciales, Turks & Caicos
|
Blue Haven Marina
|
|
Spain
|
IGY Málaga Marina
|
Málaga Marina San Andres
|
St. Maarten
|
Simpson Bay Marina
|
Yacht Club Isle de Sol
|
St. Lucia
|
Rodney Bay Marina
|
|
United States, Florida
|
Yacht Haven Grande Miami at Island Gardens, Miami
|
Maximo Marina, St. Petersburg
|
|
One Island Park Miami Beach
|
|
United States, New York & Maine
|
North Cove Marina at Brookfield Place, New York
|
Fore Points Marina, Maine
|
United States Virgin Islands, Saint Thomas
|
Yacht Haven Grande USVI
|
American Yacht Harbor
|
Operations
Dealership Operations and Management
We have adopted a generally decentralized approach to the
operational management of our dealerships. While certain
administrative functions are centralized at the corporate level,
local management is primarily responsible for the day-to-day
operations of the retail locations. Each retail location is managed
by a general manager, who oversees the day-to-day operations,
personnel, and
11
financial performance of the individual store, subject to the
direction of a regional president or district president, who
generally has responsibility for the retail locations within a
specified geographic region. Typically, each retail location also
has a staff consisting of an F&I manager, a parts manager, a
service manager, sales representatives, maintenance and repair
technicians, and various support personnel.
Sales and Marketing
Our sales philosophy focuses on selling the pleasures of the
boating lifestyle and creating memories of a lifetime with family
and friends. We believe that the critical elements of our sales
philosophy include our appealing retail locations, no-hassle sales
approach, highly trained sales representatives, high level of
customer service, emphasis on educating the customer and the
customer’s family on boating, and providing our customers with
opportunities for boating through our MarineMax Getaways!®. We
strive to provide exceptional customer experiences through the best
services, products, and technology before, during, and after the
sale. Our team and customers are United by Water®.
Each retail location offers the customer the opportunity to
evaluate a variety of new and used boats in a comfortable and
convenient setting. Our full-service retail locations facilitate a
turn-key purchasing process that includes attractive lender
financing packages, extended service agreements, and insurance.
Many of our retail locations are located on waterfronts and
marinas, which attract boating enthusiasts and enable customers to
operate various boats prior to making a purchase
decision.
The brands we offer are diverse in size and use and are spread
across our customer activities of leisure, fishing, watersports,
luxury, and vacations. We believe the transformative qualities of
the water should be shared by everyone, so we created our boat
lineup accordingly. Our promise gives our brands meaning and reason
to exist next to one another on our showroom floor.
We sell our boats at posted MarineMax “One Price” that generally
represent a discount from the manufacturer’s suggested retail
price. Our sales approach focuses on the customer experience by
minimizing customer anxiety associated with price
negotiation.
As a part of our sales and marketing efforts, our digital marketing
capabilities are a competitive advantage, with the majority of
leads originating through our digital properties, including
MarineMax.com. Social media is a growing venue for customer
engagement and communication and has become a strong medium for
connecting with new customers. Additionally, we hold online
experience events including immersive boat tours that allow
participants to explore boats and yachts from multiple
manufactures, segments, and models from nearly any electronic
device including their phone, tablet, or computer.
We participate in boat shows and in-the-water sales events at area
boating locations, typically held in January, February, March, and
toward the end of the boating season, in each of our markets. Boat
shows and other offsite promotions are an important venue for
generating customer engagement. The boat shows also generate a
significant amount of interest in our products resulting in boat
sales after the show. Online we are always available and can offer
our full selection of boats, yachts and charters, as well as our
expert team to answer customers’ questions and help them find a
boat virtually.
We emphasize customer education through one-on-one education by our
sales representatives and, at some locations, our delivery
captains, before and after a sale, and through in-house seminars
for the entire family on boating safety, the use and operation of
boats, and product demonstrations. Typically, one of our delivery
captains or the sales representative delivers the customer’s boat
to an area boating location and thoroughly instructs the customer
about the operation of the boat, including hands-on instructions
for docking and trailering the boat. To enhance our customer
relationships after the sale, we lead and sponsor MarineMax
Getaways!® group boating trips to various destinations, rendezvous
gatherings, and on-the-water organized events that promote the
boating lifestyle and memories of a lifetime. Each
Company-sponsored event, planned and led by a Company employee,
also provides a favorable medium for acclimating new customers to
boating, sharing exciting boating destinations, creating
friendships with other boaters, and enabling us to promote new
product offerings to boating enthusiasts.
As a result of our relative size, we believe we have a competitive
advantage within the industry by being able to conduct an organized
and systematic advertising and marketing effort. Part of our
marketing capabilities include a customer relationship management
system that tracks all customer engagements, evaluates the
customers propensity to buy, automatically generates follow-up
activities, and facilitates Company-wide availability of a
particular boat or other marine products and services desired by a
customer.
Suppliers and Inventory Management
We purchase a substantial portion of our new boat inventory
directly from manufacturers, which allocate new boats to
dealerships based on the amount of boats sold by the dealership and
their market share. We manufacture a portion of our new boat
inventory from our Product Manufacturing segment. We also exchange
new boats with other dealers to accommodate customer demand and to
balance inventory.
In fiscal 2022, sales of new Brunswick and Azimut boats and yachts
accounted for approximately 23% and 8% of our revenue,
respectively. Sales of new Sea Ray and Boston Whaler boats
accounted for approximately 11% and 9%, respectively, of our
revenue in
12
fiscal 2022. No purchases of new boats and other marine related
products from any other manufacturer accounted for more than 10% of
our revenue in fiscal 2022.
We have entered into multi-year agreements with Brunswick covering
Sea Ray and Boston Whaler. We also have a multi-year agreement with
Azimut-Benetti Group for its Azimut product line. We typically deal
with each of our manufacturers, other than Brunswick and
Azimut-Benetti Group, under an annually renewable, non-exclusive
dealer agreement.
The dealer agreements do not restrict our right to sell any product
lines or competing products provided that we are in compliance with
the material obligations of our dealer agreements. The terms of
each dealer agreement appoints a designated geographical territory
for the dealer, which is exclusive to the dealer provided that the
dealer is able to meet the material obligations of its dealer
agreement.
Manufacturers generally establish prices on an annual basis, but
may change prices at their sole discretion. Manufacturers typically
discount the cost of inventory and offer inventory financing
assistance during the manufacturers’ slow seasons, generally
October through March. To obtain lower cost of inventory, we strive
to capitalize on these manufacturer incentives to take product
delivery during the manufacturers’ slow seasons. This permits us to
gain pricing advantages and better product availability during the
selling season. Arrangements with certain other manufacturers may
restrict our right to offer some product lines in certain
markets.
We transfer individual boats among our retail locations to fill
customer orders that otherwise might take substantially longer to
fill from the manufacturer. This reduces delays in delivery, helps
us maximize inventory turnover, and assists in minimizing potential
overstock or out-of-stock situations. We actively monitor our
inventory levels to maintain levels appropriate to meet current
anticipated market demands. We are not bound by contractual
agreements governing the amount of inventory that we must purchase
in any year from any manufacturer, but the failure to purchase at
agreed upon levels may result in the loss of certain manufacturer
incentives or dealership rights.
Inventory Financing
Marine manufacturers customarily provide interest assistance
programs to retailers. The interest assistance varies by
manufacturer and may include periods of free financing or reduced
interest rate programs. The interest assistance may be paid
directly to the retailer or the financial institution depending on
the arrangements the manufacturer has established. We believe that
our financing arrangements with manufacturers are standard within
the industry.
We account for consideration received from our vendors in
accordance with Financial Accounting Standards Board (“FASB”)
Accounting Standards Codification (“ASC”) 606, “Revenue from
Contracts with Customers” (“ASC 606”). ASC 606 requires us to
classify interest assistance received from manufacturers as a
reduction of inventory cost and related cost of sales as opposed to
netting the assistance against our interest expense incurred with
our lenders. Pursuant to ASC 606, amounts received by us under our
co-op assistance programs from our manufacturers are netted against
related advertising expenses.
We are party to a Credit Agreement with Manufacturers and Traders
Trust Company as Administrative Agent, Swingline Lender, and
Issuing Bank, Wells Fargo Commercial Distribution Finance, LLC, as
Floor Plan Agent, and the lenders party thereto (the “New Credit
Agreement”). The New Credit Agreement provides the Company a line
of credit with asset based borrowing availability of up to $750
million and establishes a revolving credit facility in the maximum
amount of $100 million (including a $20 million swingline facility
and a $20 million letter of credit sublimit), a delayed draw term
loan facility to finance the acquisition of IGY Marinas in the
maximum amount of $400 million, and a $100 million delayed draw
mortgage loan facility. The maturity of each of the facilities is
August 2027. The New Credit Agreement is further discussed in the
“Management’s Discussion and Analysis of Financial Condition and
Results of Operations” section of this Annual Report on Form
10-K.
Technology Platform
We believe that our technology platform, which is utilized by our
companies and dealerships and that is continually developed with
the latest capabilities, strategically enhances our ability to
integrate successfully the operations of our companies and future
acquisitions, facilitates the interchange of information, and
enhances cross-selling opportunities throughout our company. The
platform integrates each level of operations on a Company-wide
basis, including but not limited to inventory, financial reporting,
budgeting, and sales management. We manage each company’s
operations with the platform to execute at the highest level,
continually grow, and deliver exceptional customers experiences.
Sales representatives use the platform to gain strategic
competitive insights, automatically generate follow-up activities,
facilitate the availability of Company-wide products and services
and monitor the maintenance and service needs of customers’ boats.
Company representatives also utilize the platform to provide
financing and insurance products, proactively schedule services and
continually communicate with customers. We mitigate cybersecurity
risks by employing extensive measures, including but not limited to
employee training, protective technologies, monitoring and testing,
external assessment services and maintenance of protective systems
and contingency plans.
13
Human Capital Resources
As of September 30, 2022, we had 3,410 employees, 2,301 (67%) of
whom were in store-level operations, 933 (28%) of whom were in the
yacht manufacturing operations, and 176 (5%) of whom were in
corporate administration and management. We are not a party to any
collective bargaining agreements. We consider our relations with
our employees to be excellent.
In managing the business, we devote substantial efforts to recruit
employees that we believe to be exceptionally well qualified for
their position. We also train our employees to understand our core
retail philosophies, which focus on making the purchase of a boat
and its subsequent use as hassle-free and enjoyable as possible.
Through our MarineMax University, or MMU, we teach our retail
philosophies to existing and new employees at various locations and
online, through MMU-online. MMU is a modularized and instructor-led
educational program that focuses on our retailing philosophies and
provides instruction on such matters as the sales process, customer
service, F&I, accounting, leadership, and human resources. We
also have a specialized service training center and program in
Clearwater, Florida where we train our service technicians in best
practices.
Sales representatives receive compensation primarily on a
commission basis. Each general manager is a salaried employee with
incentive bonuses based on the performance of the managed
dealership. Maintenance and repair service managers receive
compensation on a salary basis with bonuses based on the
performance of their departments. Our technology platform provides
each store and department manager with daily financial and
operational information, enabling them to monitor the performance
of their personnel on a daily, weekly, and monthly basis. We have a
uniform, fully integrated technology platform serving each of our
dealerships.
Our philosophy is to pay competitive base salaries to team members
at levels that help us to attract, motivate, and retain highly
qualified team members and reduce turnover. Cash incentive bonuses
are designed to reward individuals based on our Company’s financial
results as well as the achievement of personal and corporate
objectives designed to contribute to our long-term success in
building shareholder value. Grants of stock-based awards under our
2011 Stock-Based Compensation Plan are intended to align
compensation with the price performance of our common stock. Total
compensation levels reflect corporate positions, responsibilities,
and achievement of goals. As a result of our performance-based
compensation philosophy, pay levels may vary significantly from
year to year and among our various team members. Performance
metrics utilized by our cash compensation plans include pretax
income performance bonus, aged inventory, district and regional
financial performance targets, and net promoter score (customer
satisfaction).
Intellectual Property
We have registered tradenames and trademarks, including among other
marks, “MarineMax” and “United by Water” in over 20 countries and
territories. Pursuant to agreements with manufacturers and subject
to restrictions in those agreements, we have the right to use and
display the trademarks and logos of our manufacturer’s brands at
our retail stores as well as in our advertising and promotional
materials. The current registrations of our tradenames and
trademarks are effective for varying periods of time, which we may
renew periodically, provided that we comply with all statutory
maintenance requirements, including continued use of each trademark
in each country.
Seasonality and Weather Conditions
Our business, as well as the entire recreational boating industry,
is highly seasonal, with seasonality varying in different
geographic markets. Over the three-year period ended September 30,
2022, the average revenue for the quarters ended December 31, March
31, June 30 and September 30 represented approximately 20%, 24%,
32%, and 24%, respectively, of our average annual revenues. With
the exception of Florida, we generally realize significantly lower
sales and higher levels of inventories and related short-term
borrowings, in the quarterly periods ending December 31 and March
31. The onset of the public boat and recreation shows in January
generally stimulates boat sales and typically allows us to reduce
our inventory levels and related short-term borrowings throughout
the remainder of the fiscal year. Our expansion into boat storage
may act to reduce our seasonality and cyclicality.
Our business is also subject to weather patterns, which may
adversely affect our results of operations. For example, prolonged
winter conditions, drought conditions (or merely reduced rainfall
levels) or excessive rain, may limit access to area boating
locations or render boating dangerous or inconvenient, thereby
curtailing customer demand for our products. In addition,
unseasonably cool weather and prolonged winter conditions may lead
to a shorter selling season in certain locations. Hurricanes and
other storms could result in disruptions of our operations or
damage to our boat inventories and facilities, as has been the case
when Florida and other markets were affected by hurricanes, such as
Hurricane Ian in 2022. Although our geographic diversity is likely
to reduce the overall impact to us of adverse weather conditions in
any one market area, these conditions will continue to represent
potential, material adverse risks to us and our future financial
performance.
Governmental Regulations, including Environmental
Regulations
Our operations are subject to extensive regulation, supervision,
and licensing under various foreign, federal, state, and local
statutes, ordinances, and regulations. While we believe that we
maintain all requisite licenses and permits and are in compliance
with
14
all applicable federal, state, and local regulations, there can be
no assurance that we will be able to maintain all requisite
licenses and permits. The failure to satisfy those and other
regulatory requirements could have a material adverse effect on our
business, financial condition, and results of operations. The
adoption of additional laws, rules, and regulations could also have
a material adverse effect on our business. Various foreign,
federal, state, and local regulatory agencies, including the
Occupational Safety and Health Administration (“OSHA”), the EPA,
and similar foreign, federal, state, and local agencies, have
jurisdiction over the operation of our dealerships, repair
facilities, and other operations with respect to matters such as
consumer protection and privacy, workers’ safety, and laws
regarding protection of the environment, including air, water, and
soil.
The EPA has various air emissions regulations for outboard marine
engines that impose more strict emissions standards for two-cycle,
gasoline outboard marine engines. The majority of the outboard
marine engines we sell are manufactured by Mercury Marine. Mercury
Marine’s product line of low-emission engines, including the
Verado, SeaPro, Pro XS, and other four-stroke outboards, have
achieved the EPA’s mandated 2006 emission levels. While we remain
committed to supporting sustainable manufacturing and a sustainable
environment for all boaters, any increased costs of producing
engines resulting from EPA standards, or the inability of our
manufacturers to comply with EPA requirements, could have a
material adverse effect on our business.
Certain of our facilities own and operate underground storage tanks
(“USTs”) and above ground storage tanks (“ASTs”) for the storage of
various petroleum products. The USTs and ASTs are generally subject
to federal, state, and local laws and regulations that require
testing and upgrading of tanks and remediation of contaminated
soils and groundwater resulting from leaking tanks. In addition, if
leakage from Company-owned or operated tanks migrates onto the
property of others, we may be subject to civil liability to third
parties for remediation costs or other damages. Based on historical
experience, we believe that our liabilities associated with tank
testing, upgrades, and remediation are unlikely to have a material
adverse effect on our financial condition or operating
results.
As with boat dealerships generally, and parts and service
operations in particular, our business involves the use, handling,
storage, and contracting for recycling or disposal of hazardous or
toxic substances or wastes, including environmentally sensitive
materials, such as motor oil, waste motor oil and filters,
transmission fluid, antifreeze, freon, waste paint and lacquer
thinner, batteries, solvents, lubricants, degreasing agents,
gasoline, and diesel fuels. Accordingly, we are subject to
regulation by federal, state, and local authorities establishing
requirements for the use, management, handling, and disposal of
these materials and health and environmental quality standards, and
liability related thereto, and providing penalties for violations
of those standards. We are also subject to laws, ordinances, and
regulations governing investigation and remediation of
contamination at facilities we operate to which we send hazardous
or toxic substances or wastes for treatment, recycling, or
disposal.
We do not believe we have any material environmental liabilities or
that compliance with environmental laws, ordinances, and
regulations will, individually or in the aggregate, have a material
adverse effect on our business, financial condition, or results of
operations. However, soil and groundwater contamination has been
known to exist at certain properties owned or leased by us. We have
also been required and may in the future be required to remove USTs
and ASTs containing hazardous substances or wastes. As to certain
of our properties, specific releases of petroleum have been or are
in the process of being remedied in accordance with state and
federal guidelines. We are monitoring the soil and groundwater as
required by applicable state and federal guidelines. In addition,
the shareholders of certain of the acquired dealers have
indemnified us (and such indemnification is continuing) for
specific environmental issues identified on environmental site
assessments performed by us as part of the acquisitions. We
maintain insurance for pollutant cleanup and removal. The coverage
pays for the expenses to extract pollutants from land or water at
the insured property, if the discharge, dispersal, seepage,
migration, release, or escape of the pollutants is caused by or
results from a covered cause of loss. We also have additional
storage tank liability insurance and Superfund coverage where
applicable. In addition, certain of our retail locations are
located on waterways that are subject to federal or state laws
regulating navigable waters (including oil pollution prevention),
fish and wildlife, and other matters.
Three of the properties we own were historically used as gasoline
service stations. Remedial action with respect to prior historical
site activities on these properties has been completed or is being
completed in accordance with federal and state law. We do not
believe that any of these environmental issues will result in any
material liabilities to us.
Additionally, certain states have required or are considering
requiring a license in order to operate a recreational boat. While
such licensing requirements are not expected to be unduly
restrictive, regulations may discourage potential first-time
buyers, thereby limiting future sales, which could adversely affect
our business, financial condition, and results of
operations.
Environmental Responsibility
We operate many retail locations near or on bodies of water that
are acutely susceptible to the risks associated with climate
change. Such risks include those related to the physical impacts of
climate change, such as possibly more frequent and severe weather
events, rising sea levels, and/or long term shifts in climate
patterns, and risks related to the transition to a lower-carbon
economy, such as reputational, market and/or regulatory risks. Our
commitment to environmental responsibility and initiatives to
reduce our environmental footprint are outlined in our
“Environmental Policy.” Our Environmental Policy can be found on
the Investor Relations section of our website at
www.MarineMax.com
under Governance Documents (for the avoidance of doubt, our
Environmental Policy and other information contained on or
accessible through our website is not incorporated into, and does
not form a part of, this Annual Report or
15
any other report or document we file with the Securities and
Exchange Commission). Our Environmental Policy and associated
climate related risks and opportunities are reviewed by our Board
of Directors on an annual basis or more frequently as
needed.
We have engaged in many efforts to mitigate and adapt to climate
change. For example, we seek out, to the extent feasible,
manufacturers committed to the highest levels of sustainability,
environmental stewardship, and low-emissions as demonstrated by
Mercury Marine. Mercury Marine’s commitment to sustainability and
successes are detailed in its 2021 Sustainability Report. Mercury
Marine’s accomplishments include winning the 2020 Energy Efficiency
Excellence Award from Wisconsin’s Focus on Energy program, 2019
Sustainable Process Award from the Wisconsin Sustainable Business
Council for its sustainable use of aluminum, winning the 2018
Sustainable Product of the Year from the Wisconsin Sustainable
Business Council for its Active Trim technology, and winning the
2018 Business Friend of the Environment Award for their new V6 and
V8 outboard engines. For the 11th
consecutive year, the Wisconsin Sustainable Business Council
awarded Mercury Marine a “Green Masters” designation, a program
measuring a broad range of sustainability issues including energy
and water conservation, waste management, community outreach, and
education. Mercury Marine has improved energy efficiency by
implementing energy‑reducing projects, promoting best practices in
energy management and employing new energy technologies, such as
using the latest and most energy efficient HVAC systems, LED
lighting, top-rated insulation, passive (natural) lighting,
weather-stripping around windows and doors, double-door vestibules,
automatic and timer-activated doors, and plans to build
roof-mounted solar arrays where applicable.
Additionally, Azimut Yachts was awarded ISO 14001 certification,
for its consistent and effective management system aimed at
reducing the environmental impact of its operations. In addition,
to maximize the eco-compatible standards of their yachts, Azimut
Yachts adopted RINA (an organization specializing in
classification, certification, testing, and inspection) principles
to achieve RINA Green Plus notation. Also, MasterCraft's
manufacturing facilities operate in alignment with the ISO 14001
Environmental Management Systems Standard, the ISO 9001 Quality
Management Systems standard, and the OHSAS 18001 International
Occupational Health and Safety Management System standard.
MasterCraft's largest facility, the MasterCraft brand facility, is
certified in all three standards. MasterCraft believes it is the
only boat manufacturer to achieve all three of these prestigious
ISO certifications across production and product development
systems.
Further, as opportunities arise we have made targeted investments
to support new technology, innovations, and research in the marine
industry to reduce emissions, provide environmental stewardship,
and support a sustainable environment for all boaters. The Fraser
Yachts Group has become the first yacht company to sign the Pact
for Energy Transition with the Monaco Government. The energy
transition pact was created by the Monaco government to improve
energy efficiency and promote renewable energy sources, with the
target to reducing greenhouse gas emissions, by allowing residents,
workers, businesses, institutions and associations to contribute to
the energy transition effort.
We take pride in maintaining our retail locations and marinas for
the benefit of the local communities and boaters we serve. We
strive to execute a proactive strategy related to environmental,
health, and safety laws and regulations, and environmental
stewardship, which includes investing significant resources in
maintaining and developing our retail locations and marinas for the
long term. Additionally, several of our marinas have been
designated as Clean Marinas. The Clean Marina Program recognizes
facilities engaging in environmental best practices and exceeding
regulatory requirements in and around waterways.
Corporate Social Responsibility
Our commitment to social responsibility is outlined in our “Human
Rights Policy.” Our Human Rights Policy can be found on the
Investor Relations section of our website at
www.MarineMax.com
under Governance Documents (for the avoidance of doubt, our
Environmental Policy and other information contained on or
accessible through our website is not incorporated into, and does
not form a part of, this Annual Report or any other report or
document we file with the Securities and Exchange Commission). Our
Human Rights Policy is reviewed by our Board of Directors on an
annual basis or more frequently as needed. We strive to conduct our
business in an ethical and socially responsible way, and are
sensitive to the needs of the environment, our customers, our
shareholders, our team members and our communities. Our ethical and
social responsibility is guided by our MarineMax culture and values
which are honesty, trust, loyalty, professionalism, consistency,
always do what is right, treat others as we want to be treated, and
always consider the long term. Our culture, values, and mission are
shared and reinforced with our team members through daily stand up
meetings, team events, and online communications. We pride
ourselves in supporting our local communities both on and off the
water. One way in which our presence is felt within the local
community is by providing our team members time to volunteer and
assist with Habitat for Humanity housing projects in addition to
making charitable donations to Habitat for Humanity. In addition,
we support humanitarian aid to countries in need through
organizations such as the Red Cross. We also partner with the
American Cancer Society to support Breast Cancer Awareness Month
across all of our retail operations.
Product Liability
The products we sell or service may expose us to potential
liabilities for personal injury or property damage claims relating
to the use of those products. Historically, the resolution of
product liability claims has not materially affected our business.
Manufacturers of the products we sell generally maintain product
liability insurance. We also maintain third-party product liability
insurance that we
16
believe to be adequate. We may experience claims that are not
covered by, or that are in excess of, our insurance coverage. The
institution of any significant claims against us could subject us
to damages, result in higher insurance costs, and harm our business
reputation with potential customers.
Executive Officers
The following table sets forth information concerning each of our
executive officers as of November 15, 2022:
|
|
|
|
|
Name
|
|
Age
|
|
Position
|
William H. McGill Jr.
|
|
78
|
|
Executive Chairman of the Board and Director
|
William Brett McGill
|
|
54
|
|
Chief Executive Officer, President and Director
|
Michael H. McLamb
|
|
57
|
|
Executive Vice President, Chief Financial Officer,
Secretary, and Director
|
Charles A. Cashman
|
|
59
|
|
Executive Vice President and Chief Revenue Officer
|
Anthony E. Cassella, Jr
|
|
53
|
|
Vice President and Chief Accounting Officer
|
Shawn Berg
|
|
52
|
|
Executive Vice President and Chief Digital Officer
|
Kyle G. Langbehn
|
|
48
|
|
Executive Vice President and President of Retail
Operations
|
William H. McGill Jr.
has served as the Executive Chairman of the Board since October
2018. Mr. McGill served as Chief Executive Officer of MarineMax
from January 23, 1998 to September 30, 2018 and as the Chairman of
the Board and as a Director of the Company since March 6, 1998. Mr.
McGill served as the President of the Company from January 23, 1988
until September 8, 2000 and re-assumed the position from July 1,
2002 to October 1, 2017. Mr. McGill was the principal owner and
president of Gulfwind USA, Inc., one of our operating subsidiaries,
from 1973 until its merger with us in 1998.
William Brett McGill
has served as Chief Executive Officer since October 2018, as
President since October 2017, and as a Director since February 21,
2019. Mr. McGill served as President and Chief Operating Officer of
MarineMax from October 2017 to October 2018. Mr. McGill served as
Executive Vice President and Chief Operating Officer from October
2016 to October 2017, Executive Vice President Operations of the
Company from October 2015 to September 2016, as Vice President of
West Operations of the Company from May 2012 to September 2015, and
was appointed as an executive officer by our Board of Directors in
November 2012. Mr. McGill served as one of our Regional Presidents
from March 2006 to May 2012, as Vice President of Information
Technology, Service and Parts of the Company from October 2004 to
March 2006, and as Director of Information Services from March
1998. Mr. McGill began his professional career with a software
development firm, Integrated Dealer Systems, prior to joining
MarineMax in 1996. William Brett McGill is the son of William H.
McGill, Jr.
Michael H. McLamb
has served as Executive Vice President of MarineMax since October
2002, as Chief Financial Officer since January 23, 1998, as
Secretary since April 5, 1998, and as a Director since November 1,
2003. Mr. McLamb served as Vice President and Treasurer of the
Company from January 23, 1998 until October 22, 2002. Mr. McLamb, a
certified public accountant, was employed by Arthur Andersen LLP
from December 1987 to December 1997, serving most recently as a
Senior Manager.
Charles A. Cashman
has served as Executive Vice President and Chief Revenue Officer of
MarineMax since October 2016. Mr. Cashman served as Executive Vice
President Sales, Marketing, and Manufacturer Relations of the
Company from October 2015 to September 2016, served as Vice
President of East Operations from May 2012 to September 2015, and
was appointed as an executive officer by our Board of Directors in
November 2012. Mr. Cashman served as Regional President of East
Florida from October 2008 to May 2012, and as District Manager of
the East Coast of Florida from March 2007 to October 2008. Mr.
Cashman served several other positions of increasing
responsibility, including Sales Consultant, Sales Manager, and
General Manager, since joining MarineMax in 1992.
Anthony E. Cassella, Jr.
has served as Vice President of MarineMax since February 2016,
Chief Accounting Officer since October 2014, and Vice President of
Accounting and Shared Services since February 2011. Mr. Cassella
served as Director of Shared Services from October 2007 until
February 2011 and Regional Controller from March 1999 until October
2007. Mr. Cassella was the Controller of Merit Marine which the
Company acquired in March 1999. Mr. Cassella, a certified public
accountant, worked in public accounting from June 1991 to February
1998, serving most recently as Manager.
Shawn Berg
has served as Chief Digital Officer since April 2019 overseeing the
Company's Technology, Marketing, and Digital Business operations.
Mr. Berg was appointed as an executive officer of MarineMax by our
Board of Directors in October 2022. Previously he served as Vice
President of Technology after joining MarineMax in 2017. Mr. Berg
has over 30 years of experience, including multiple officer-level
positions, delivering strategic business growth to companies across
the marine, auto, and retail industries. In addition, Mr. Berg has
extensive experience in finance, insurance, distribution,
servicing, and supply chain operations.
Kyle G. Langbehn
has served as President of Retail Operations since July 2020,
responsible for MarineMax’s retail operations. Mr. Langbehn was
appointed as an executive officer of MarineMax by our Board of
Directors in October 2022. Previously he served as
17
Vice President of Operations beginning in October of 2018. Mr.
Langbehn has excelled in numerous positions of increasing
responsibility including Sales Consultant, Sales Manager, General
Sales Manager, General Manager, and Regional President since
joining MarineMax in 2002.
Item 1A. Risk
Factors
Risks Related to Competition, Economic, and Industry
Conditions
Our success depends to a significant extent on the well-being, as
well as the continued popularity and reputation for quality of the
boating products, of our manufacturers, particularly Brunswick’s
Sea Ray and Boston Whaler boat lines and Azimut-Benetti Group’s
Azimut products. The failure to obtain a high quality and desirable
mix of competitively priced products that our customers demand
could have a material adverse effect on our business, financial
condition, and results of operations.
Approximately 23% of our revenue in fiscal 2022 resulted from sales
of new boats manufactured by Brunswick, including approximately 11%
from Brunswick’s Sea Ray division, 9% from Brunswick’s Boston
Whaler division, and approximately 3% from Brunswick’s other
divisions. Additionally, approximately 8% of our revenue in fiscal
2022 resulted from sales of new boats manufactured by
Azimut-Benetti Group. The remainder of our fiscal 2022 revenue from
new boat sales resulted from sales of products from a limited
number of other manufacturers, none of which accounted for more
than 10% of our revenue.
We depend on our manufacturers to provide us with products that
compare favorably with competing products in terms of quality,
performance, safety, and advanced features, including the latest
advances in propulsion and navigation systems. Any adverse change
in the production efficiency, product development efforts,
technological advancement, expansion of manufacturing footprint,
supply chain and third-party suppliers, marketplace acceptance,
marketing capabilities, ability to secure adequate access to
capital, and financial condition of our manufacturers, particularly
Brunswick (including Mercury Marine, a division of Brunswick) and
Azimut-Benetti Group, given our reliance on Sea Ray, Boston Whaler,
Mercury Marine engines, and Azimut, would have a substantial
adverse impact on our business. Any difficulties encountered by any
of our manufacturers, particularly Brunswick and Azimut-Benetti
Group, resulting from economic, financial, supply chain, or other
factors, such as the COVID-19 pandemic, could adversely affect the
quality and amount of products that they are able to supply to us
and the services and support they provide to us.
Any interruption or discontinuance of the operations of Brunswick,
Azimut-Benetti Group or other manufacturers could cause us to
experience shortfalls, disruptions or delays with respect to needed
inventory. Although we believe in our brand, our product
diversification and that adequate alternate sources would be
available that could replace any manufacturer other than Brunswick
and Azimut-Benetti Group as a product source, those alternate
sources may not be available at the time of any interruption, and
alternative products may not be available at comparable quality and
price.
Boat manufacturers exercise substantial control over our
business.
We depend on our dealer agreements. We have dealer agreements with
Brunswick covering Sea Ray and Boston Whaler products. Most of our
retail locations have a multi-year dealer agreement which provides
for the lowest product prices charged by the Sea Ray division of
Brunswick or Boston Whaler, as applicable, from time to time to
other domestic Sea Ray or Boston Whaler dealers, as applicable.
These terms are subject to:
•
the dealer meeting all the requirements and conditions of the
manufacturer’s applicable programs; and
•
the right of Brunswick in good faith to charge lesser prices to
other dealers
•
to meet existing competitive circumstances;
•
for unusual and non-ordinary business circumstances;
or
•
for limited duration promotional programs.
Each dealer agreement designates a specific geographical territory
for the dealer, which is exclusive to the dealer provided that the
dealer is able to meet the material obligations of its dealer
agreement.
We are the exclusive dealer for Azimut-Benetti Group’s Azimut
product line for the United States. The Azimut dealer agreement
provides a geographic territory to promote the product line and to
network with the appropriate clientele through various independent
locations designated for Azimut retail sales. Our dealer agreement
is a multi-year term but requires us to be in compliance with its
terms and conditions.
As is typical in the industry, we generally deal with
manufacturers, other than Sea Ray, Boston Whaler, and Azimut, under
renewable annual dealer agreements. These agreements do not contain
any contractual provisions concerning product pricing or
required
18
purchasing levels. Pricing is generally established on a model year
basis, but is subject to change in the manufacturer’s sole
discretion. Any change or termination of these arrangements for any
reason could adversely affect product availability and cost and our
financial performance.
Through these dealer agreements, boat manufacturers (particularly
Brunswick and Azimut) exercise significant control over their
dealers, restrict them to specified locations, and retain approval
rights over changes in management and ownership, among other
things. Failure to meet the customer satisfaction, market share
goals, and other conditions set forth in any dealer agreement could
have various consequences, including the following:
•
the termination of the dealer agreement;
•
the imposition of additional conditions in subsequent dealer
agreements;
•
limitations on boat inventory allocations;
•
reductions in reimbursement rates for warranty work performed by
the dealer;
•
loss of certain manufacturer to dealer incentives;
•
denial of approval of future acquisitions; or
•
the loss of exclusive rights to sell in the geographic
territory.
These events could have a material adverse effect on our
competitive position and financial performance.
Our business, as well as the entire recreational boating industry,
is highly seasonal, with seasonality varying in different
geographic markets.
Over the three-year period ended September 30, 2022, the average
revenue for the quarterly periods ended December 31, March 31, June
30 and September 30 represented approximately 20%, 24%, 32%, and
24%, respectively, of our average annual revenue. With the
exception of Florida, we generally realize significantly lower
sales and higher levels of inventories and related short-term
borrowings in the quarterly periods ending December 31 and March
31. The onset of the public boat and recreation shows in January
typically stimulates boat sales and allows us to reduce our
inventory levels and related short-term borrowings throughout the
remainder of the fiscal year. Our business could become
substantially more seasonal if we acquire dealers that operate in
colder regions of the United States, which are generally closed or
experience lower volume in the winter months.
The failure to receive rebates and other dealer incentives
(interest assistance and co-op assistance) on inventory purchases
or retail sales could substantially reduce our margins.
We rely on manufacturers’ programs that provide incentives for
dealers to purchase and sell particular boat makes and models or
for consumers to buy particular boat makes or models. Any
eliminations, reductions, limitations, or other changes relating to
rebate or incentive programs that have the effect of reducing the
benefits we receive, whether relating to the ability of
manufacturers to pay or our ability to qualify for such incentive
programs, could increase the effective cost of our boat purchases,
reduce our margins and competitive position, and have a material
adverse effect on our financial performance.
Other recreational activities, poor industry perception, and
potential health risks from environmental conditions can adversely
affect the levels of boat purchases.
Demand for our products can be adversely affected by competition
from other activities that occupy consumers’ time, including other
forms of recreation as well as religious, cultural and community
activities. In addition, real or perceived health risks from
engaging in outdoor activities and local environmental conditions
in the areas in which we operate dealerships could adversely affect
the levels of boat purchases. Further, as a seller of high-end
consumer products, we must compete for discretionary spending with
a wide variety of other recreational activities and consumer
purchases. In addition, perceived hassles of boat ownership and
customer service and lack of customer education throughout the
retail boat industry, which has traditionally been perceived to be
relatively poor, represent impediments to boat
purchases.
We face intense competition.
We operate in a highly competitive environment. In addition to
facing competition generally from recreation businesses seeking to
attract consumers’ leisure time and discretionary spending dollars,
the recreational boat industry itself is highly fragmented,
resulting in intense competition for customers, quality products,
boat show space, and suitable retail locations. We rely to a
certain extent on boat shows to generate sales.
19
We compete primarily with single-location boat dealers and, with
respect to sales of marine parts, accessories, and equipment, with
national specialty marine parts and accessories stores, online
catalog retailers, sporting goods stores, and mass merchants.
Competition among boat dealers is based on the quality of available
products, the price and value of the products, and attention to
customer service. There is significant competition both within
markets we currently serve and in new markets that we may enter. We
compete in each of our markets with retailers of brands of boats
and engines we do not sell in that market. In addition, several of
our competitors, especially those selling marine equipment and
accessories, are large national or regional chains that have
substantial financial, marketing and other resources. Private sales
of used boats represent an additional source of
competition.
Due to various matters, including environmental concerns,
permitting and zoning requirements, and competition for waterfront
real estate, some markets in the United States have experienced an
increased waiting list for marina and storage availability. In
general, the markets in which we currently operate are not
experiencing any unusual difficulties. However, marine retail
activity could be adversely affected in markets that do not have
sufficient marine and storage availability to satisfy
demand.
Timing of large boat and yacht sales and failure to adequately
anticipate consumer preference and demand may have an adverse
impact on our business.
Forecasting optimal inventory levels is difficult to predict based
on, among other things, changes in economic conditions, consumer
preferences, delivery of new models from manufacturers, and timing
of large boat and yacht sales. Failure to adequately anticipate
consumer demand and preferences could negatively impact our
inventory management strategies, inventory carrying costs, and our
operating margins.
Economic conditions and consumer spending patterns can have a
material adverse effect on our business, financial condition, and
results of operations.
General economic conditions and consumer spending patterns can
negatively impact our operating results. Unfavorable local,
regional, national, or global economic developments or
uncertainties regarding future economic prospects could reduce
consumer spending in the markets we serve and adversely affect our
business. Economic conditions in areas in which we operate
dealerships, such as corporate downsizing, military base closings,
and inclement weather such as hurricanes or other storms,
environmental conditions, and specific events, such as the BP oil
spill in the Gulf of Mexico in 2010, or Hurricane Ian in 2022, also
could adversely affect, and in certain instances have adversely
affected, our operations in certain markets.
In an economic downturn, consumer discretionary spending levels
generally decline, at times resulting in disproportionately large
reductions in the sale of luxury goods. Consumer spending on luxury
goods also may decline as a result of lower consumer confidence
levels, even if prevailing economic conditions are favorable. As a
result, an economic downturn could impact us more than certain of
our competitors due to our strategic focus on a higher end of our
market.
Unfavorable economic conditions can cause us to reduce our
acquisition program, delay new store openings, reduce our inventory
purchases, engage in inventory reduction efforts, close a number of
our retail locations, reduce our headcount, and amend and replace
our credit facility, and could also interfere with our supply of
certain brands by manufacturers, reduce marketing and other support
by manufacturers, decrease revenue, put additional pressures on
margins, and result in our failure to satisfy covenants under our
credit agreement.
More recently, inflation has increased in the United States and
throughout the world. This has affected the prices manufacturers
charge us, as well as the prices that we charge our customers. To
the extent such inflation continues, increases, or both, it may
reduce our margins and have a material adverse effect on our
financial performance.
Our sales have been, and may further be adversely impacted by
recent increases, and likely future increases, in interest rates
and adverse changes in fiscal policy or credit market
conditions.
Fiscal and monetary policy have had a material adverse impact on
worldwide economic conditions, the financial markets, and
availability of credit and, consequently, have negatively affected,
and may further negatively affect, our industries, businesses, and
overall financial condition. Recent changes by the Federal Reserve
to raise its benchmark interest rate has resulted in significantly
higher long-term interest rates, which has negatively impacted, and
may further negatively impact, our customers’ willingness or desire
to purchase our products. While credit availability is currently
adequate to support demand, if credit conditions worsen and
adversely affect the ability of customers to finance potential
purchases at acceptable terms and interest rates, it could result
in a decrease in sales and materially impact our financial
condition or results of operations.
20
Risks Related to Our Strategies
Failure to implement strategies to enhance our performance or our
strategies could have a material adverse effect on our business and
financial condition.
We are increasing our efforts to grow our financing and insurance,
parts and accessories, service, yacht charter, brokerage, and boat
storage businesses to better serve our customers and thereby
increase revenue and improve profitability as a result of these
higher margin businesses. In addition, we have implemented programs
to increase the lead capture and digital sales of used boats,
parts, accessories, and a wide range of boating supplies and
products. These efforts and programs are designed to increase our
revenue and reduce our dependence on the sale of new boats. We are
also pursuing certain acquisitions as discussed in the immediately
following Risk Factors. These business initiatives have required,
and will continue to require, us to add personnel, invest capital,
enter businesses in which we do not have extensive experience, and
encounter substantial competition. As a result, our strategies to
enhance our performance may not be successful and we may increase
our expenses or write off such investments if not
successful.
Our success depends, in part, on our ability to continue to make
successful acquisitions at attractive or fair prices and to
integrate the operations of acquired dealers and each dealer we
acquire in the future.
Since March 1, 1998, we have acquired 32 additional previously
independent recreational boat dealers, multiple marinas, five boat
brokerage operations, two superyacht service companies, two
full-service yacht repair operations, and two boat and yacht
manufacturers. Each acquired dealer and entity operated
independently prior to its acquisition by us. Our success depends,
in part, on our ability to continue to make successful acquisitions
at attractive or fair prices that align with our culture and focus
on customer service and to integrate the operations of acquired
dealers, including centralizing certain functions to achieve cost
savings and pursuing programs and processes that promote
cooperation and the sharing of opportunities and resources among
our dealerships. We may not be able to oversee the combined entity
efficiently, realize anticipated synergies, or implement
effectively our growth and operating strategies. To the extent that
we successfully pursue our acquisition strategy, our resulting
growth will place significant additional demands on our management
and infrastructure. Our failure to pursue successfully our
acquisition strategies or operate effectively the combined entity
could have a material adverse effect on our rate of growth and
operating performance.
We may pursue acquisition strategies in new lines of
business.
We have historically pursued strategic acquisitions to capitalize
upon the consolidation opportunities in the highly fragmented
recreational boat dealer industry by acquiring additional dealers
and related operations and improving their performance and
profitability through the implementation of our operating
strategies. We have also recently pursued, and may continue to
pursue, potential contract manufacturing, vertical integration
strategies, yacht charter and brokerage, marinas, boat storage, or
other acquisitions as opportunities arise. To the extent we are
successful in pursuing one or more of these strategies, we will
face certain risks in addition to those that exist with
acquisitions more closely related to our historical business,
including potential inexperience in a line of business that is
either new to us or that has become materially more significant to
us as a result of a transaction, the potential difficulty of
presenting a unified corporate image, greater uncertainties in the
financial benefits and potential liabilities associated with this
expanded base of acquisitions, different types of legal and
operational risks, and different types of applicable financial
metrics and goals. Our failure to pursue successfully our
acquisition strategies in new lines of business, operate
effectively the combined entity, and/or mitigate any potential new
risks, could have a material adverse effect on our rate of growth
and operating performance.
Unforeseen expenses, difficulties, and delays frequently
encountered in connection with expansion through acquisitions could
inhibit our growth and negatively impact our
profitability.
The acquisition of additional recreational boat dealers, boat
storage facilities, yacht brokerage operations, and marinas, which
is one of our growth strategies, and vertical integration
strategies, all involve significant risks. This strategy entails
reviewing and potentially reorganizing acquired business
operations, corporate infrastructure and systems, and financial
controls. Unforeseen expenses, difficulties and delays frequently
encountered in connection with expansion through acquisitions could
inhibit our growth and negatively impact our profitability. We may
be unable to identify suitable acquisition candidates or to
complete the acquisitions of candidates that we identify. Increased
competition for acquisition candidates or increased asking prices
by acquisition candidates may increase purchase prices for
acquisitions to levels beyond our financial capability or to levels
that would not result in expected returns required by our
acquisition criteria to be in the best interest of shareholders.
Acquisitions also may become more difficult or less attractive in
the future as we acquire more of the most attractive dealers that
best align with our culture and focus on customer service. In
addition, we may encounter difficulties in integrating the
operations of acquired dealers with our own operations,
difficulties in retaining employees, potential risks of losing
customers, suppliers, or other business relationships, and
difficulties in managing acquired dealers profitably without
substantial costs, delays, or other operational or financial
problems.
21
Our ability to continue to grow through acquisitions depends upon
various factors, including the following:
•
the availability of suitable acquisition candidates at attractive
purchase prices;
•
the ability to compete effectively for available acquisition
opportunities;
•
the availability of cash on hand, borrowed funds or stock with a
sufficient value to complete the acquisitions;
•
the ability to obtain any requisite manufacturer or governmental
approvals;
•
the ability to obtain approval of our lenders under our current
credit agreement; and
•
the absence of one or more manufacturers attempting to impose
unsatisfactory restrictions on us in connection with their approval
of acquisitions.
If we finance future acquisitions in whole or in part through the
issuance of common stock or securities convertible into or
exercisable for common stock, existing shareholders will experience
dilution in the voting power of their common stock and earnings per
share could be negatively impacted. Any borrowings made to finance
future acquisitions or for operations could make us more vulnerable
to a downturn in our operating results, a downturn in economic
conditions, or increases in interest rates on borrowings that are
subject to interest rate fluctuations.
We may be required to obtain the consent of Brunswick and various
other manufacturers prior to the acquisition of other
dealers.
In determining whether to approve acquisitions, manufacturers may
consider many factors, including our financial condition and
ownership structure. Manufacturers also may impose conditions on
granting their approvals for acquisitions, including a limitation
on the number of their dealers that we may acquire. Our ability to
meet manufacturers’ requirements for approving future acquisitions
will have a direct bearing on our ability to complete acquisitions
and effect our growth strategy. There can be no assurance that a
manufacturer will not terminate its dealer agreement, refuse to
renew its dealer agreement, refuse to approve future acquisitions,
or take other action that could have a material adverse effect on
our acquisition program.
Our internal growth and operating strategies of opening new
locations and offering new products involve risk.
In addition to pursuing growth by acquiring boat dealers, we intend
to continue to pursue a strategy of growth through opening new
retail locations and offering new products in our existing and new
territories. This strategy may entail obtaining additional
distribution rights from our existing and new manufacturers. We may
not be able to secure additional distribution rights or obtain
suitable alternative sources of supply if we are unable to obtain
such distribution rights. The inability to expand our product lines
and geographic scope by obtaining additional distribution rights
could have a material adverse effect on the growth and
profitability of our business.
Accomplishing these goals for expansion will depend upon a number
of factors, including the following:
•
our ability to identify new markets in which we can obtain
distribution rights to sell our existing or additional product
lines;
•
our ability to lease or construct suitable facilities at a
reasonable cost in existing or new markets;
•
our ability to hire, train, and retain qualified
personnel;
•
the timely and effective integration of new retail locations into
existing operations;
•
our ability to achieve adequate market penetration at favorable
operating margins without the acquisition of existing dealers;
and
•
our financial resources.
Our dealer agreements with Brunswick require Brunswick’s consent to
open, close, or change retail locations that sell Sea Ray or Boston
Whaler products as applicable, and other dealer agreements
generally contain similar provisions. We may not be able to open
and operate new retail locations or introduce new product lines on
a timely or profitable basis. Moreover, the costs associated with
opening new retail locations or introducing new product lines may
adversely affect our profitability.
As a result of these growth strategies, we expect to continue to
expend significant time and effort in opening and acquiring new
retail locations, improving existing retail locations in our
current markets, and introducing new products. Our systems,
procedures, controls, financial resources, and management and
staffing levels may not be adequate to support expanding
operations. The inability to manage our growth effectively could
have a material adverse effect on our business, financial
condition, and results of operations.
22
In addition to our traditional repeat and referral business in our
physical locations, digital channels are increasingly significant
in serving our existing customer base and reaching new customers.
Our continued expansion and success will be negatively impacted if
we are not able to fully exploit these channels.
Our digital channels are subject to a number of risks and
uncertainties that are beyond our control, including the
following:
•
changes in consumer willingness to conduct business electronically,
including increasing concerns with consumer privacy and risk and
changing laws, rules, and regulations, such as the imposition of or
increase in taxes;
•
technology or security impediments that may inhibit our ability to
electronically market our products and services;
•
changes in applicable international, federal, state and commercial
regulation;
•
failure of our service providers, suppliers or service partners to
perform their services properly and in a timely and efficient
manner;
•
failure to adequately respond to customers, process orders or
deliver services;
•
our failure to assess and evaluate our digital product and service
offerings to ensure that our products and services are desired by
boating enthusiasts; and
•
the potential exposure to liability with respect to third-party
information, including but not limited to copyright, trademark
infringement, or other wrongful acts of third parties; false or
erroneous information provided by third parties; or illegal
activities by third parties, such as the sale of stolen boats or
other goods.
Further, we may also be vulnerable to competitive pressures from
the growing electronic commerce activity in our market, both as
they may impact our own on-line business, and as they may impact
the operating results and investment values of our existing
physical locations.
Various operations in multiple countries around the world expose us
to international political, economic, foreign currency, and other
risks.
Our operations involve certain international activities, including
our sales of yachts produced by the Azimut-Benetti Group in Italy,
yachts produced by Galeon in Poland, and power catamarans for our
charter fleet produced by Sino Eagle in China, as well as our
Fraser Yachts Group and Northrop & Johnson operations. These
activities in multiple countries around the world expose us to
international political, economic, foreign currency, and other
risks. Some of our sales and purchases of inventory are denominated
in a currency other than the U.S. dollar. Consequently, a strong or
weak U.S. dollar may adversely affect reported revenues and our
profitability. We may hedge certain foreign currency exposures to
lessen and delay, but not to completely eliminate, the effects of
foreign currency fluctuations on our financial results. Our future
financial results could be significantly affected by the value of
the U.S. dollar in relation to the foreign currencies in which we
conduct business. The degree to which our financial results are
affected for any given time period will depend in part upon the
success and extent of our hedging activities.
Furthermore, the geopolitical and economic uncertainty and/or
instability that may result from changes in the relationship among
the United States, Taiwan and China, may, directly or indirectly,
materially harm our business, financial condition and financial
performance. For example, certain of our suppliers are dependent on
products sourced from Taiwan. Greater restrictions and/or
disruptions of our suppliers’ ability to operate facilities and/or
do business in and with Taiwan may increase the cost of certain
materials and/or limit the supply of products sourced from Taiwan.
This may result in deterioration of our profit margins, a potential
need to increase our pricing and, in so doing, may decrease demand
for our products and thereby adversely impact our financial
performance.
Additionally, protectionist trade legislation in the United States,
the European Union, Poland, or China, such as a change in current
tariff structures, export or import compliance laws, or other trade
policies could adversely affect our ability to import yachts from
these foreign suppliers under economically favorable terms and
conditions. There have been recent changes and additional changes
may occur in the future, to United States and foreign trade and tax
policies, including heightened import restrictions, import and
export licenses, new tariffs, trade embargoes, government
sanctions, and trade barriers. Any of these restrictions could
prevent or make it difficult or more costly for us to import yachts
from foreign suppliers under economically favorable terms and
conditions. Increased tariffs could require us to increase our
prices which likely could decrease demand for our products. In
addition, other countries may limit their trade with the United
States or retaliate through their own restrictions and/or increased
tariffs which would affect our ability to export products and
therefore adversely affect our sales. Many of these challenges,
particularly tariffs, are present in commerce with China, a market
from which we purchase products. While such tariffs may be delayed
or cancelled before coming into effect and we believe we have taken
steps to mitigate their potential effects, such tariffs would
likely increase our costs for our Chinese suppliers.
23
Our international operations create a number of logistical and
communications challenges. The economic, political and other risks
we face resulting from these operations include the
following:
•
compliance with U.S. and local laws and regulatory requirements,
including labor, tax, and environmental, health and safety, as well
as changes in those laws and requirements;
•
transportation delays or interruptions and other effects of less
developed infrastructures;
•
effects from the voter-approved exit of the United Kingdom from the
European Union (often referred to as Brexit), including any
resulting deterioration in economic conditions, volatility in
currency exchange rates, or adverse regulatory
changes;
•
limitations on imports and exports;
•
adverse foreign exchange rate fluctuations;
•
imposition of restrictions on currency conversion or the transfer
of funds;
•
withdrawal from or revision to international trade
agreements;
•
national and international conflicts, including foreign policy
changes, political or economic instability, or terrorist
acts;
•
the effects of issued or threatened government sanctions, tariffs
and duties, trade barriers or economic restrictions;
•
maintenance of quality standards; and/or
•
possible employee turnover or labor unrest.
The intended benefits of the IGY Marinas acquisition may not be
realized.
The IGY Marinas acquisition poses risks for our ongoing operations,
including, among others:
•
the possibility that we will incur unexpected costs and
liabilities;
•
the possibility that expected synergies and value creation will not
be realized or will not be realized within the expected time
period;
•
difficulties recruiting and retaining team members
•
the financing for the acquisition of IGY Marinas may limit our
ability to finance future acquisitions or obtain favorable terms on
future credit agreements;
•
IGY Marinas may not perform as well as anticipated;
and
•
unforeseen difficulties may arise in integrating operations in
various countries into our company.
As a result of the foregoing, we cannot assure you that the IGY
Marinas acquisition will be accretive to us in the near term or at
all. Furthermore, if we fail to realize the intended benefits of
the IGY Marinas acquisition, the market price of our common stock
could decline to the extent that the market price reflects those
benefits.
The Ukraine crisis could have a significant adverse effect on our
business, results of operations, financial condition, and cash flow
in the future.
The Ukraine crisis raises a host of potential threats and risk
factors to consider even though we do not conduct significant
business directly in Ukraine or Russia. Sanctions brought against
Russia will impact the import, export, sale, and supply of goods
and services with companies located in the U.S. and other regions.
Many companies have ceased all operations in Russia with
significant expected short-term and long-term losses. This has had,
will likely continue to have, a negative impact on the global
economy and has affected, and will likely continue to affect,
economic and capital markets. A downturn in the economy could
adversely affect our financial performance.
The ongoing conflict between Russia and Ukraine has impacted global
energy markets, particularly in Europe, leading to high volatility
and increasing prices for crude oil, natural gas and other energy
supplies. Higher energy costs result in increases in operating
expenses at our manufacturing facilities, in the expense of
shipping raw materials to our facilities, and in the expense of
shipping products to our customers. In addition, increases in
energy costs may adversely affect the pricing and availability of
petroleum-based raw materials, such as resins and foams that are
used in manufacturing.
24
Risks Related to Our Operations
The availability and costs of borrowed funds can adversely affect
our ability to obtain adequate boat inventory and the ability and
willingness of our customers to finance boat purchases.
The availability and costs of borrowed funds can adversely affect
our ability to obtain and maintain adequate boat inventory and the
holding costs of that inventory as well as the ability and
willingness of our customers to finance boat purchases. We rely on
the New Credit Agreement to purchase and maintain our inventory of
boats. The New Credit Agreement provides the Company a line of
credit with asset based borrowing availability of up to $750
million and establishes a revolving credit facility in the maximum
amount of $100 million, a delayed draw term loan facility to
finance the acquisition of IGY Marinas in the maximum amount of
$400 million, and a $100 million delayed draw mortgage loan
facility. None of our real estate has been pledged for collateral
for the New Credit Agreement. As of September 30, 2022, we were in
compliance with all of the covenants under the New Credit Agreement
and our additional available borrowings under the New Credit
Agreement was approximately $65.8 million based upon the
outstanding borrowing base availability.
Our ability to borrow under the New Credit Agreement depends on our
ability to continue to satisfy our covenants and other obligations
under the New Credit Agreement and the ability for our
manufacturers to be approved vendors under our New Credit
Agreement. The variable interest rate under our New Credit
Agreement will fluctuate with changing market conditions and,
accordingly, our interest expense will increase as interest rates
rise. A significant increase in interest rates could have a
material adverse effect on our operating results. The aging of our
inventory limits our borrowing capacity as defined provisions in
the New Credit Agreement reduce the allowable advance rate as our
inventory ages. Depressed economic conditions, weak consumer
spending, turmoil in the credit markets, and lender difficulties,
among other potential reasons, could interfere with our ability to
maintain compliance with our debt covenants and to utilize the New
Credit Agreement to fund our operations. Any inability to utilize
the New Credit Agreement or the acceleration of amounts owed,
resulting from a covenant violation, insufficient collateral, or
lender difficulties, could require us to seek other sources of
funding to repay amounts outstanding under the New Credit Agreement
or replace or supplement the New Credit Agreement, which may not be
possible at all or under commercially reasonable terms.
Similarly, decreases in the availability of credit and increases in
the cost of credit adversely affect the ability of our customers to
purchase boats from us and thereby adversely affect our ability to
sell our products and impact the profitability of our finance and
insurance activities.
Higher energy, costs and availability of raw materials, parts,
components, and fuel costs along with adequate supply may adversely
affect our business.
All of the recreational boats we sell are powered by diesel or
gasoline engines. Consequently, an interruption in the supply, or a
significant increase in the price or tax on the sale of fuel on a
regional or national basis could have a material adverse effect on
our sales and operating results. Increases in fuel prices
negatively impact boat sales. The supply of fuels may be
interrupted, rationing may be imposed, or the price of or tax on
fuels may significantly increase in the future, adversely impacting
our business. Also, increases in energy costs can adversely affect
the pricing and availability of petroleum-based raw materials such
as resins and foam that are used in many of the marine products
produced by boat manufacturers, including Cruisers Yachts and
Intrepid Powerboats, increasing our cost of inventory.
Additionally, higher fuel prices may also have an adverse effect on
demand for our parts and accessories business because higher fuel
prices increase the cost of boat ownership and possibly affect
product use.
Boat manufacturers, including Cruisers Yachts and Intrepid
Powerboats, rely on third parties to supply raw materials used in
the manufacturing process, including oil, aluminum, copper, steel,
and resins, as well as product parts and components. The prices for
these raw materials, parts, and components fluctuate depending on
market conditions and, in some instances, commodity prices or trade
policies, including tariffs. Substantial increases in the prices of
raw materials, parts, and components would increase our product and
operating costs, and could reduce our profitability if we are
unable to recoup the increased costs through higher product prices
or improved operating efficiencies. Similarly, if a critical
supplier were to close its operations, cease manufacturing, or
otherwise fail to deliver an essential component necessary to our
manufacturing operations, that could detrimentally affect our
ability to purchase or manufacture and sell products, resulting in
an interruption in business operations and/or a loss of
sales.
In addition, some components used in the boat manufacturing
processes, including certain engine components, furniture,
upholstery, and boat windshields, are available from a sole
supplier or a limited number of suppliers. Operational and
financial difficulties that these or other suppliers may face in
the future could adversely affect their ability to supply us with
the parts and components we and our boat manufacturers need, which
could significantly disrupt our operations. It may be difficult to
find a replacement supplier for a limited or sole source raw
material, part, or component without significant delay or on
commercially reasonable terms. In addition, an uncorrected defect
or supplier's variation in a raw material, part, or component,
either unknown to us or incompatible with our manufacturing
process, could jeopardize our ability to manufacture
products.
Some additional supply risks that could disrupt our operations,
impair our ability to deliver products to customers, and negatively
affect our financial results include:
25
•
an outbreak of disease or facility closures due to the COVID-19
pandemic, or similar public health threat;
•
a deterioration of our relationships with suppliers;
•
events such as natural disasters, power outages, or labor
strikes;
•
financial pressures on our suppliers due to a weakening economy or
unfavorable conditions in other end markets;
•
supplier manufacturing constraints and investment requirements;
or
•
disruption at major global ports and shipping hubs.
These risks are exacerbated in the case of single-source suppliers,
and the exclusive supplier of a key component could potentially
exert significant bargaining power over price, quality, warranty
claims, or other terms.
Substantially all of our products are powered with outboard engines
from Mercury Marine, Yamaha, and inboard engines from Volvo, which
makes us reliant on these companies for the supply of
engines.
The availability and cost of engines for our boats and yachts is
critical. If we are required to replace Mercury Marine, Yamaha, or
Volvo as our engine suppliers for any reason, it could cause a
decrease in products available for sale or an increase in our cost
of sales, either of which could adversely affect our business,
financial condition and results of operations. If we experience an
interruption to our engine supply, then this could cause a decrease
in products available for sale or an increase in our cost of sales,
either of which could adversely affect our business, financial
condition and results of operations.
The availability of boat insurance is critical to our
success.
The ability of our customers to secure reasonably affordable boat
insurance that is satisfactory to lenders that finance our
customers’ purchases is critical to our success. Any difficulty of
customers to obtain affordable boat insurance could impede boat
sales and adversely affect our business.
Elements of our yacht charter and charter brokerage businesses
expose us to certain risks.
Our yacht charter business entails the sale of specifically
designed yachts to third parties for inclusion in our yacht charter
fleet; a yacht management agreement under which yacht owners enable
us to put their yachts in our yacht charter program for a period of
several years for a fixed monthly fee payable by us; our services
in storing, insuring, and maintaining their yachts; and the charter
by us of these yachts to vacation customers at agreed fees payable
to us. Our failure to find purchasers for yachts intended for our
charter fleet will increase our boat inventory and related
operating costs; lack of sales into our charter fleet may result in
increased losses due to market adjustments of our yacht charter
inventory; and our failure to generate a sufficient number of
vacation charter customers will require us to absorb all the costs
of the monthly fees to the yacht owners as well as other operating
costs.
Customers consider safety and reliability a primary concern in
selecting a yacht charter provider. The yacht charter business may
present a number of safety risks including, but not limited to,
catastrophic disaster, adverse weather and marine conditions, such
as Hurricane Ian in 2022, mechanical failure and collision, and
health issues such as the COVID-19 pandemic. If we are unable to
maintain acceptable records for safety and reliability, our ability
to retain current customers and attract new customers may be
adversely affected. Additionally, any safety issue encountered
during a yacht charter may result in claims against us as well as
negative publicity. These events could have a material adverse
effect on the competitive position and financial performance of
both our yacht charter business and our core retail sales
business.
The yacht charter business is also highly fragmented, consisting
primarily of local operators and franchisees. Competition among
charter operators is based on location, the type and size of yachts
offered, charter rates, destinations serviced, and attention to
customer service. Yacht charters also face competition from other
travel and leisure options, including, but not limited to, cruises,
hotels, resorts, theme parks, organized tours, land-based casino
operators, and vacation ownership properties. We therefore risk
losing business not only to other charter operators, but also to
vacation operators that provide such alternatives.
We depend on income from financing, insurance and extended service
contracts.
A portion of our income results from referral fees derived from the
placement or marketing of various finance and insurance products,
consisting of customer financing, insurance products, and extended
service contracts, the most significant component of which is the
participation and other fees resulting from our sale of customer
financing contracts.
The availability of financing for our boat purchasers and the level
of participation and other fees we receive in connection with such
financing depend on the particular agreement between us and the
lender and the current rate environment. Lenders may impose terms
in their boat financing arrangements with us that may be
unfavorable to us or our customers. Laws or regulations may be
enacted
26
nationally or locally which could result in fees from lenders being
eliminated or reduced, materially impacting our operating results.
If customer financing becomes more difficult to secure, it may
adversely impact our business.
Changes, including the lengthening of manufacturer warranties, may
reduce our ability to offer and sell extended service contracts
which may have a material adverse impact on our ability to sell
F&I products.
The reduction of profit margins on sales of F&I products or the
lack of demand for or the unavailability of these products could
have a material adverse effect on our operating margins.
Our continued success is dependent on positive perceptions of our
MarineMax brand which, if impaired, could adversely affect our
sales.
We believe that our MarineMax brand is one of the reasons our
customers choose to come to us for their boating needs. To be
successful, we must preserve our reputation. Reputational value is
based in large part on perceptions, and broad access to social
media makes it easy for anyone to provide public feedback that can
influence perceptions of us. It may be difficult to control
negative publicity, regardless of whether it is accurate. While
reputations may take decades to build, any negative incidents can
quickly erode trust and confidence, particularly if they result in
significant negative mainstream and/or social media publicity,
governmental investigations, or litigation. Additionally, an
isolated business incident at a single retail location could
materially adversely affect our other stores, retail brands,
reputation and sales channels, particularly if such incident
results in significant adverse publicity, governmental
investigations or litigation. Negative incidents, such as quality
and safety concerns or incidents related to our manufacturers’
products, could lead to tangible adverse effects on our business,
including lost sales or team member retention and recruiting
difficulties. In addition, vendors and others with whom we choose
to do business may affect our reputation.
Our operations are dependent upon key personnel and team
members.
Our success depends, in large part, upon our ability to attract,
train and retain, qualified team members and executive officers, as
well as the continuing efforts and abilities of team members and
executive officers. Although we have employment agreements with
certain of our executive officers and management succession plans,
we cannot ensure that these or other executive personnel and team
members will remain with us, or that our succession planning will
adequately mitigate the risk associated with key personnel
transitions. As a result of our decentralized operating strategy,
we also rely on the management teams of our businesses. In
addition, we likely will depend on the senior management of any
significant businesses we acquire in the future.
The products we sell, or services we provide, may expose us to
potential liabilities for personal injury or property damage claims
relating to the use of those products.
Manufacturers of the products we sell generally maintain product
liability insurance. We also maintain third-party product liability
insurance that we believe to be adequate. We may experience claims
that are not covered by, or that are in excess of, our insurance
coverage. The institution of any significant claims against us
could subject us to damages, result in higher insurance costs, and
harm our business reputation with potential customers.
We manufacture and sell products that create exposure to potential
claims and litigation.
Our manufacturing operations and the products we produce could
result in product quality, warranty, personal injury, property
damage, and other issues, thereby increasing the risk of litigation
and potential liability, as well as regulatory fines. Historically,
the resolution of such claims has not had a materially adverse
effect on our business, and we maintain what we believe to be
adequate insurance coverage to mitigate a portion of these risks.
However, we may experience material losses in the future, incur
significant costs to defend claims or issue product recalls,
experience claims in excess of our insurance coverage or that are
not covered by insurance, or be subjected to fines or penalties.
Our reputation may be adversely affected by such claims, whether or
not successful, including potential negative publicity about our
products. We record accruals for known potential liabilities, but
there is the possibility that actual losses may exceed these
accruals and therefore negatively impact earnings.
We have a fixed cost base that can affect our profitability if
demand decreases.
The fixed cost levels of operating a boat and yacht manufacturer
can put pressure on profit margins when sales and production
decline. Our profitability depends, in part, on our ability to
spread fixed costs over a sufficiently large number of products
sold and shipped, and if we make a decision to reduce our rate of
production, gross or net margins could be negatively affected.
Consequently, decreased demand or the need to reduce production can
lower our ability to absorb fixed costs and materially impact our
financial condition or results of operations.
27
Adverse federal or state tax policies can have a negative effect on
us.
Changes in federal and state tax laws, such as an imposition of
luxury taxes on new boat purchases, increases in prevailing federal
or state tax rates, and removal of certain interest deductions,
also influence consumers’ decisions to purchase products we offer
and could have a negative effect on our sales. For example, during
1991 and 1992, the federal government imposed a luxury tax on new
recreational boats with sales prices in excess of $100,000, which
coincided with a sharp decline in boating industry sales from a
high of more than $17.9 billion in 1988 to a low of $10.3 billion
in 1992.
In addition, increases in the United States corporate income tax
rates (as currently being contemplated by the legislative and
federal branches) would have an
adverse effect on our financial performance and financial
condition.
Further, related increases in capital gains rates, personal income
tax rates or both could have an adverse effect on the buying power
of potential customers and therefore an adverse effect on our
financial performance and financial condition.
Marinas may not be readily adaptable to other uses.
Marinas are specific-use properties and may contain features or
assets that have limited alternative uses. These properties may
also have distinct operational functions that involve specific
procedures and training. If the operations of any of our marinas
become unprofitable due to industry competition, operational
execution or otherwise, then it may not be feasible to operate the
property for another use, and the value of certain features or
assets used at the property, or the property itself, may be
impaired, this would have a material adverse effect on our
financial performance.
We may be unable to obtain, renew or maintain permits, licenses and
approvals necessary for the operation of our marinas.
Governmental bodies control much of the land located beneath and
surrounding many of our marinas and lease such land to MarineMax
and IGY Marinas under leases that typically range from five to 50
years. As a result, it is unlikely that we can obtain fee-simple
title to the land on or near these marinas. If these governmental
authorities terminate, fail to renew, or interpret in ways that are
materially less favorable any of the permits, licenses and
approvals necessary for operation of these properties, this would
have a material adverse effect on our financial
performance.
Some marinas must be dredged from time to time to remove silt and
mud that collect in harbor-areas in order to assure that boat
traffic can safely enter the harbor. Dredging and disposing of the
dredged material can be very costly and require permits from
various governmental authorities. If the permits necessary to
dredge marinas or dispose of the dredged material cannot be timely
obtained after the acquisition of a marina, or if dredging is not
practical or is exceedingly expensive, this would have a material
adverse effect on our financial performance.
Risks Related to the Environment and Geography
Weather and environmental conditions may adversely impact our
business.
Weather and environmental conditions may adversely impact our
operating results. For example, drought conditions, reduced
rainfall levels, excessive rain and environmental conditions, and
hurricanes may force boating areas to close or render boating
dangerous or inconvenient, thereby curtailing customer demand for
our products. While we traditionally maintain a full range of
insurance coverage for any such events, there can be no assurance
that such insurance coverage is adequate to cover losses that we
sustain as a result of such disasters. In addition, unseasonably
cool weather and prolonged winter conditions may lead to shorter
selling seasons in certain locations. Many of our dealerships sell
boats to customers for use on reservoirs, thereby subjecting our
business to the continued viability of these reservoirs for boating
use. Although our geographic diversity and any future geographic
expansion should reduce the overall impact on us of adverse weather
and environmental conditions in any one market area, weather and
environmental conditions will continue to represent potential
material adverse risks to us and our future operating
performance.
Demand for wet slip storage increases during the summer months in
our northern markets as customers contract for the summer boating
season. Demand for dry storage increases during the winter season
as seasonal weather patterns in certain geographies require boat
owners to store their vessels on dry docks and within covered
racks. Our results on a quarterly basis can fluctuate due to this
cyclicality and seasonality.
Additionally, to the extent unfavorable weather conditions are
exacerbated by global climate change, regardless of the cause,
resulting in environmental changes including, but not limited to,
severe weather, changing sea levels, poor water conditions, or
reduced access to water, which could disrupt or negatively affect
our business.
28
Environmental and climate changes could affect our
business.
We operate many retail locations near or on bodies of water that
are acutely susceptible to the risks associated with climate
change. Such risks include those related to the physical impacts of
climate change, such as more frequent and severe weather events,
rising sea levels, and/or long term shifts in climate patterns, and
risks related to the transition to a lower-carbon economy, such as
reputational, market and/or regulatory risks. Climate change and
climate events could result in social, cultural and economic
disruptions in these areas, including supply chain disruptions, the
disruption of local infrastructure and transportation systems that
could limit the ability of our team members and our customers to
access our retail locations. These events could also compound
adverse economic conditions and impact consumer confidence and
discretionary spending.
A significant amount of our boat sales are from the State of
Florida.
Economic conditions, weather and environmental conditions,
competition, market conditions, and any other adverse conditions
impacting the State of Florida in which we generated approximately
54%, 50% and 51% of our dealership revenue during fiscal 2020,
2021, and 2022, respectively, could have a major impact on our
operations.
Environmental and other regulatory issues may impact our
operations.
Our operations are subject to extensive regulation, supervision,
and licensing under various federal, state and local statutes,
ordinances and regulations, such as those relating to finance and
insurance, consumer protection, consumer privacy, escheatment,
anti-money laundering, environmental, emissions, health or safety,
U.S. trade sanctions, the U.S. Foreign Corrupt Practices Act and
employment practices. With respect to employment practices, we are
subject to various laws and regulations, including complex federal,
state and local wage and hour and anti-discrimination laws. The
failure to satisfy those and other regulatory requirements could
have a material adverse effect on our business, financial
condition, and results of operations, as well as potentially the
assessment of damages, the imposition of penalties, changes to our
processes, or a cessation of our operations, and/or damage to our
image and reputation.
Various federal, state, and local regulatory agencies, including
OSHA, EPA, and similar federal and local agencies, have
jurisdiction over the operation of our dealerships, repair
facilities, and other operations, with respect to matters such as
consumer protection, workers’ safety, and laws regarding protection
of the environment, including air, water, and soil. The EPA
promulgated emissions regulations for outboard marine engines that
impose stricter emissions standards for two-cycle, gasoline
outboard marine engines. It is possible that environmental
regulatory bodies (including state regulatory bodies) may impose
higher emissions standards in the future for these and other marine
engines. Any increased costs of producing engines resulting from
current or potentially higher EPA or state standards in the future
could be passed on to our company, or could result in the inability
or potential unforeseen delays of our manufacturers to comply with
current and future EPA or state requirements, and these potential
consequences could have a material adverse effect on our
business.
Certain of our facilities own and operate USTs, and ASTs for the
storage of various petroleum products. USTs and ASTs are generally
subject to federal, state and local laws and regulations that
require testing and upgrading of tanks and remediation of
contaminated soils and groundwater resulting from leaking tanks. In
addition, we may be subject to civil liability to third parties for
remediation costs or other damages if leakage from our owned or
operated tanks migrates onto the property of others.
Our business involves the use, handling, storage, and contracting
for recycling or disposal of hazardous or toxic substances or
wastes, including environmentally sensitive materials, such as
motor oil, waste motor oil and filters, transmission fluid,
antifreeze, freon, waste paint and lacquer thinner, batteries,
solvents, lubricants, degreasing agents, gasoline and diesel fuels.
Accordingly, we are subject to regulation by federal, state and
local authorities establishing investigation and health and
environmental quality standards, and liability related thereto, and
providing penalties for violations of those standards.
Our Product Manufacturing segment is regulated by federal, state
and local environmental laws governing our use, transport and
disposal of substances and control of emissions. While we are
unaware of any failure to comply with these laws or any
contamination at our facilities, the costs of compliance, including
remediations of any discovered issues and any changes to our
operations mandated by new or amended laws, may be significant, and
any failures to comply could result in material expenses, delays or
fines.
We also are subject to laws, ordinances, and regulations governing
investigation and remediation of contamination at facilities we
operate or to which we send hazardous or toxic substances or wastes
for treatment, recycling or disposal. In particular, the
Comprehensive Environmental Response, Compensation and Liability
Act (“CERCLA” or “Superfund”) imposes joint, strict, and several
liability on:
•
owners or operators of facilities at, from, or to which a release
of hazardous substances has occurred;
•
parties that generated hazardous substances that were released at
such facilities; and
•
parties that transported or arranged for the transportation of
hazardous substances to such facilities.
29
A majority of states have adopted Superfund statutes comparable to
and, in some cases, more stringent than CERCLA. If we were to be
found to be a responsible party under CERCLA or a similar state
statute, we could be held liable for all investigative and remedial
costs associated with addressing such contamination. In addition,
claims alleging personal injury or property damage may be brought
against us as a result of alleged exposure to hazardous substances
resulting from our operations. In addition, certain of our retail
locations are located on waterways that are subject to federal or
state laws regulating navigable waters (including oil pollution
prevention), fish and wildlife, and other matters.
Soil and groundwater contamination has been known to exist at
certain properties owned or leased by us. We have also been
required and may in the future be required to remove USTs and ASTs
containing hazardous substances or wastes. As to certain of our
properties, specific releases of petroleum have been or are in the
process of being remediated in accordance with state and federal
guidelines. We are monitoring the soil and groundwater as required
by applicable state and federal guidelines. We also may have
additional storage tank liability insurance and Superfund coverage
where applicable. Environmental laws and regulations are complex
and subject to frequent change. Compliance with amended, new or
more stringent laws or regulations, more strict interpretations of
existing laws, or the future discovery of environmental conditions
may require additional expenditures by us, and such expenditures
may be material.
Additionally, certain states have required or are considering
requiring a license in order to operate a recreational boat. These
regulations could discourage potential buyers, thereby limiting
future sales and adversely affecting our business, financial
condition, and results of operations.
Risks Related to Cybersecurity
Increased cybersecurity requirements, vulnerabilities, threats and
more sophisticated and targeted computer crime could pose a risk to
our systems, networks, data and our third-party service providers.
Our business operations could be negatively impacted by an outage
or breach of our informational technology systems or a
cybersecurity event.
Our business is dependent upon the efficient operation of our
technology platform. The platform facilitates the interchange of
information and enhances cross-selling opportunities throughout our
company. The platform integrates each level of operations on a
Company-wide basis, including but not limited to inventory,
financial reporting, budgeting, marketing, sales management, as
well as to prepare our consolidated financial and operating data.
The failure of our technology platform to perform as designed or
the failure to maintain and enhance or protect the integrity of our
technology platform and those of our third-party service providers,
could disrupt our business operations, impact sales and the results
of operations, expose us to customer or third-party claims, or
result in adverse publicity.
Increased global cybersecurity vulnerabilities, threats and more
sophisticated and targeted cyber-related attacks (including
ransomware) pose a risk to the security of our and our customers’,
suppliers’ and third-party service providers’ products, systems and
networks and the confidentiality, availability and integrity of our
data. Unauthorized parties may also attempt to gain access to our
systems or facilities, or those of third parties with whom we do
business, through fraud, trickery or other forms of deceiving our
team members, contractors, vendors, and temporary staff. While we
attempt to mitigate these risks by employing extensive measures,
including employee training, systems, monitoring and testing, and
maintenance of protective systems and contingency plans, we remain
potentially vulnerable to additional known or unknown
threats.
We may also have access to sensitive, confidential or personal data
or information that is subject to privacy, security laws, and
regulations. Despite our efforts to protect sensitive, confidential
or personal data or information, we and our third-party service
providers may be vulnerable to security breaches, theft, misplaced
or lost data, programming errors, employee errors and/or
malfeasance that could potentially lead to the compromising of
sensitive, confidential or personal data or information, improper
use of our systems, unauthorized access, use, disclosure,
modification or destruction of information, and operational
disruptions.
It is possible that we or our third-party service providers might
not be aware of a successful cyber-related attack on our systems
until well after the incident. In addition, a cyber-related attack
could result in other negative consequences, including damage to
our reputation or competitiveness, remediation or increased
protection costs, litigation or regulatory action, and could
adversely affect our business, financial condition, and results of
operations. Depending on the nature of the information compromised,
we may have obligations to notify customers and/or employees about
the incident, and we may need to provide some form of remedy, such
as a subscription to a credit monitoring service, for the
individuals affected by the incident, which could result in
material reputational damage to us. While we traditionally maintain
a full range of insurance coverage for any such events, there can
be no assurance that such insurance coverage is adequate to cover
losses that we sustain as a result of an outage or breach of our
technology platform or a cybersecurity event.
We are also subject to laws and regulations in the United States
and other countries concerning the handling of personal
information, including laws that require us to notify governmental
authorities and/or affected individuals of data breaches involving
certain personal information. These laws and regulations include,
for example, the European General Data Protection
Regulation,
30
effective May 2018, and the California Consumer Privacy Act,
effective January 2020. Regulatory actions or litigation seeking to
impose significant penalties could be brought against us in the
event of a data breach or alleged non-compliance with such laws and
regulations.
Risks Related to Our Common Stock
The timing and amount of our share repurchases are subject to a
number of uncertainties.
The Company maintains a stock repurchase plan authorizing the
Company to purchase up to 10 million shares of its commons stock
through March 2024. There is no guarantee that our stock repurchase
plans will be able to successfully mitigate the dilutive effect of
stock options and stock-based grants. The success of our stock
repurchase plans is based upon a number of factors, including the
price and availability of the Company’s stock, general market
conditions, the nature of other investment opportunities available
to us from time to time, and the availability of cash.
We do not pay cash dividends.
We have never paid cash dividends on our common stock and we have
no current intention to do so for the foreseeable
future.
If securities analysts do not publish research or reports about our
company, or if they issue unfavorable commentary about us or our
industry or downgrade our common stock, the price of our common
stock could decline.
The trading market for our common stock depends in part on the
research and reports that third-party securities analysts publish
about our company and our industry. We may be unable or slow to
attract research coverage and if one or more analysts cease
coverage of our company, we could lose visibility in the market. In
addition, one or more of these analysts could downgrade our common
stock or issue other negative commentary about our company or our
industry. As a result of one or more of these factors, the trading
price of our common stock could decline.
Certain activist shareholder actions could cause us to incur
expense and hinder execution of our strategies.
We actively engage in discussions with our shareholders regarding
further strengthening our Company and creating long-term
shareholder value. This ongoing dialogue can include certain
divisive activist tactics, which can take many forms. Some
shareholder activism, including potential proxy contests, could
result in substantial costs, such as legal fees and expenses, and
divert management's and our Board's attention and resources from
our business and strategic plans. Additionally, public shareholder
activism could give rise to perceived uncertainties as to our
future, adversely affect our relationships with suppliers or
customers, make it more difficult to attract and retain qualified
personnel, and cause our stock price to fluctuate based on
temporary or speculative market perceptions or other factors that
do not necessarily reflect the underlying fundamentals and
prospects of our businesses. These risks could adversely affect our
financial performance.
None.
Item 2.
Properties
The Retail Operations segment includes our leased corporate offices
in Clearwater, Florida. We also lease 48 properties under leases in
the United States and British Virgin Islands, many of which contain
multi-year renewal options and some of which grant us right of
first refusal to purchase the property at fair value. In most
cases, we pay a fixed rent at negotiated rates. In substantially
all of the leased locations, we are responsible for taxes,
utilities, insurance, and routine repairs and maintenance. We own
36 properties associated with the retail locations we operate.
Additionally, we own four retail locations that are currently
leased to a third-party or available for lease as noted below. A
store is considered one or more retail locations that are adjacent
or operate as one entity. Fraser Yachts Group and Northrop &
Johnson lease offices in the United States and Europe.
The following table reflects the status, approximate size, and
facilities of the various retail locations in the United States and
British Virgin Islands we operate as of the date of this
report.
31
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Location
|
|
Location Type
|
|
Square
Footage(1)
|
|
|
Facilities at Property
|
|
Operated
Since(2)
|
|
|
Waterfront
|
|
Alabama
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gulf Shores
|
|
Company owned
|
|
|
4,000
|
|
|
Retail and service
|
|
1998
|
|
|
|
—
|
|
California
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Newport Beach
|
|
Third-party lease
|
|
|
1,000
|
|
|
Retail only, 4 wet slips
|
|
2020
|
|
|
Newport Bay
|
|
San Diego
|
|
Third-party lease
|
|
|
1,400
|
|
|
Retail only, 12 wet slips
|
|
2020
|
|
|
San Diego Bay
|
|
Sausalito
|
|
Third-party lease
|
|
|
2,000
|
|
|
Retail and service; 6 wet slips
|
|
2020
|
|
|
Richardson Bay
|
|
Connecticut
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Norwalk
|
|
Third-party lease
|
|
|
9,000
|
|
|
Retail and service; 56 wet slips
|
|
1994
|
|
|
Norwalk Harbor
|
|
Westbrook
|
|
Third-party lease
|
|
|
4,200
|
|
|
Retail and service
|
|
1998
|
|
|
Westbrook Harbor
|
|
Florida
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cape Haze
|
|
Company owned
|
|
|
18,000
|
|
|
Retail only, 8 wet slips
|
|
|
—
|
|
|
Intracoastal Waterway
|
|
Clearwater
|
|
Company owned
|
|
|
42,000
|
|
|
Retail and service; 20 wet slips
|
|
1973
|
|
|
Tampa Bay
|
|
Cocoa
|
|
Company owned
|
|
|
15,000
|
|
|
Retail and service
|
|
1968
|
|
|
|
—
|
|
Dania
|
|
Company owned
|
|
|
32,000
|
|
|
Repair and service; 16 wet slips
|
|
1991
|
|
|
Port Everglades
|
|
Fort Walton Beach
|
|
Company owned
|
|
|
3,000
|
|
|
Repair and service; 83 wet slips
|
|
2019
|
|
|
Choctawhatchee Bay
|
|
Fort Myers
|
|
Company owned
|
|
|
60,000
|
|
|
Retail, service, and storage; 64 wet slips
|
|
1983
|
|
|
Caloosahatchee River
|
|
Jacksonville
|
|
Third-party lease
|
|
|
9,000
|
|
|
Retail and service
|
|
2016
|
|
|
Intracoastal Waterway
|
|
Key Largo
|
|
Third-party lease
|
|
|
8,900
|
|
|
Retail and service; 6 wet slips
|
|
2002
|
|
|
Card Sound
|
|
Miami
|
|
Company owned
|
|
|
7,200
|
|
|
Retail and service; 15 wet slips
|
|
1980
|
|
|
Little River
|
|
Miami
|
|
Company owned
|
|
|
5,000
|
|
|
Service only; 11 wet slips
|
|
2005
|
|
|
Little River
|
|
Naples
|
|
Company owned
|
|
|
19,600
|
|
|
Retail and service; 14 wet slips
|
|
1997
|
|
|
Naples Bay
|
|
North Palm Beach
|
|
Third-party lease
|
|
|
1,000
|
|
|
Retail only
|
|
2016
|
|
|
Intracoastal Waterway
|
|
Orlando
|
|
Third-party lease
|
|
|
18,400
|
|
|
Retail and service
|
|
1984
|
|
|
|
—
|
|
Panama City
|
|
Third-party lease
|
|
|
10,500
|
|
|
Retail only; 8 wet slips
|
|
2011
|
|
|
Saint Andrews Bay
|
|
Pensacola
|
|
Company owned
|
|
|
52,800
|
|
|
Retail, service, and storage; 60 wet slips
|
|
2016
|
|
|
Pensacola Bay
|
|
Pompano Beach
|
|
Company owned
|
|
|
23,000
|
|
|
Retail and service; 16 wet slips
|
|
1990
|
|
|
Intracoastal Waterway
|
|
Pompano Beach
|
|
Company owned
|
|
|
5,400
|
|
|
Retail and service; 24 wet slips
|
|
2005
|
|
|
Intracoastal Waterway
|
|
Sarasota
|
|
Third-party lease
|
|
|
26,500
|
|
|
Retail, service, and storage; 15 wet slips
|
|
1972
|
|
|
Sarasota Bay
|
|
St. Petersburg
|
|
Company owned
|
|
|
15,000
|
|
|
Retail and service; 20 wet slips
|
|
2006
|
|
|
Boca Ciega Bay
|
|
Stuart
|
|
Company owned
|
|
|
29,100
|
|
|
Retail and service; 66 wet slips
|
|
2002
|
|
|
Intracoastal Waterway
|
|
Venice
|
|
Company owned
|
|
|
62,000
|
|
|
Retail, service, and storage; 90 wet slips
|
|
1972
|
|
|
Intracoastal Waterway
|
|
Georgia
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Buford (Atlanta) (3)
|
|
Company owned
|
|
|
13,500
|
|
|
Retail and service
|
|
2001
|
|
|
|
—
|
|
Cumming (Atlanta)
|
|
Third-party lease
|
|
|
13,000
|
|
|
Retail and service; 50 wet slips
|
|
1981
|
|
|
Lake Lanier
|
|
Savannah
|
|
Third-party lease
|
|
|
50,600
|
|
|
Retail, marina, service and storage; 36 wet slips
|
|
2017
|
|
|
Wilmington River
|
|
Illinois
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Praire Harbor
|
|
Third-party lease
|
|
|
3,500
|
|
|
Marina, 140 wet slips
|
|
2020
|
|
|
Lake Michigan
|
|
32
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sequoit Harbor Antioch
|
|
Third-party lease
|
|
|
85,300
|
|
|
Retail, marina, service and storage; 208 wet slips
|
|
2020
|
|
|
Lake Marie
|
|
Winthrop Harbor
|
|
Third-party lease
|
|
|
319,100
|
|
|
Retail, marina, service and storage; 53 wet slips
|
|
2020
|
|
|
Lake Michigan
|
|
Maryland
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Baltimore
|
|
Third-party lease
|
|
|
7,600
|
|
|
Retail and service; 17 wet slips
|
|
2005
|
|
|
Baltimore Inner Harbor
|
|
Kent Island
|
|
Third-party lease
|
|
|
30,500
|
|
|
Retail, service, and storage
|
|
2021
|
|
|
Kent Narrows
|
|
Joppa (3)
|
|
Company owned
|
|
|
28,400
|
|
|
Retail, service, and storage; 294 wet slips
|
|
1966
|
|
|
Gunpowder River
|
|
Massachusetts
|
|
|
|
|
|
|
|
|
|
|
|
|
|