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Tide Drops Out On MarineMax

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By MICHAEL SASSO

The Tampa Tribune

Published: August 1, 2008

TAMPA - MarineMax, a Clearwater-based recreational boat chain, posted a 29 percent drop in sales for its third quarter amid a steep sales drop in the boating industry, the company said Thursday.

The company, the nation's leading seller of Sea Ray boats, also said it booked a $113.3 million loss in its fiscal third quarter, which ended June 30. By comparison, MarineMax earned a $13.9 million profit during the same quarter of 2007.

The loss was largely because MarineMax took a noncash charge of $122.1 million after it wrote down the value of its "goodwill," essentially the value of the company's reputation, position in the marketplace and other intangible assets.

On Thursday, the company announced that its sales fell to $271.3 million in the third quarter, down 29 percent from its sales of $379.8 million in the third quarter of 2007.

In earnings, the company posted a loss of $6.15 a share in the third quarter, compared with a profit of 73 cents a share in the year-ago quarter. Factoring out the large noncash charge last quarter, the company said it earned 18 cents a share.

Sales at stores open at least a year - a key measurement in the retail industry - fell 27 percent in the quarter ended June 30 when compared with the same quarter a year ago.

In a statement Thursday, Chairman and Chief Executive Officer William McGill Jr. said the company is cutting orders from manufacturers for the 2009 model year.

James Hardiman, a securities analyst who follows MarineMax for FTN Midwest Securities, said the boating industry is suffering because of a sluggish economy.

MarineMax has been in the process of shutting down three dealerships and consolidating seven others, and its biggest boat supplier, Brunswick Corp., is slowing its production.

Despite slow sales, Hardiman said smaller, independent boat dealerships may be faring worse than MarineMax, with some shutting down.

"You can bet if MarineMax is having problems, a lot of independent dealers are, too," Hardiman said.

MarineMax has about 90 stores in about 21 states, including Florida, Georgia and North Carolina. MarineMax stock closed Thursday at $6.58 a share, up 17 cents on the day. For the year, the company's stock is down 58 percent.

Reporter Michael Sasso can be reached at msasso@tampatrib.com or (813) 259-7865.

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