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Robert Trigaux

At MarineMax Inc., trying to bail with a thimble



Wake up and good morning. Poor MarineMax Inc. CEO Bill McGill must feel like he's bailing out his boating business with a thimble in a perfect storm. How else can you characterize the Clearwater company -- the recreational boat industry's biggest retailer -- reporting an $11-million quarterly loss and a $134-million loss for the year? Its stock price of $1.50 a share will get you a vending machine soda and maybe a quarter's change.

Listen here to the quarterly earnings conference or read it in its entirety here. Let me save you the time and get to the 5 top reasons MarineMax has a big fight ahead of it, and why it may come out okay.

1. The already difficult marine industry environment grew increasingly challenging as the September quarter progressed due primarily to the Wall Street meltdown and credit crunch.

2. Multiple hurricanes threatened many MarineMax markets. That caused a delay in the ability to close a boat sale since a consumer cannot secure insurance when a named storm approaches land. In turn, a lender will not finance the boat sale. IN turn, MarineMax can’t deliver it. You see the domino effect.

3. The end result was a 45-percent decline... let's pause and absorb, that's an astounding drop... in same-store sales (stores open at least one year) and greater losses than anticipated.

4. The good news is that boat dealers have broad territories, which minimizes the competitive threat of other players pushing in and undercutting prices.

5. Unlike many other industries, like housing, the marine industry is not big on securitizing boat loans, which has helped it to avoid a least some of the blunt force trauma on Wall Street. Says McGill: "Today consumers that can afford a boat can get financing, the same as before. Sure, the banks are more cautious but they are clearly lending with similar down payments and amortization terms as before as retail financing of premium boats has one of the lowest default rates."

Brave talk? All bluster? The luxury market is starting to suffer so boating may yet feel more pain. Still, there is no denying the remarkable love of many a Floridian for fishing and recreational boating.

But there's a reason this boating joke endures: "My second best day of my life is buying a boat, and my best day is when I sold it.”

-- Robert Trigaux, Times Business Columnist

[Last modified: Tuesday, June 1, 2010 11:22am]


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