CLEARWATER — MarineMax sales took an even deeper nosedive in the first quarter, but there's more to the boat-buying slump than consumers afraid to make a big-ticket buy.
Bill McGill, chief executive officer of the nation's largest boat retailer, said the banks are nixing deals left and right.
"Normally, about 15 to 20 percent of our contracts fall apart because the buyer can't get financing," he said in a call with analysts. "Now it's approaching half. It's gotten harder to keep our staff spirits up."
Banks are getting pickier about lending to people with adjustable-rate mortgages with balloon payments lurking. They want boat down payments up to 40 percent. Meanwhile, used boat prices are falling because of a flurry of bank repossessions.
Well into a two-year tailspin, MarineMax gets a double hit. Commissions for landing successful financing and insurance deals earns MarineMax a fatter profit margin than boats.
For the quarter ended March 31, the company — debt-free except for its $105 million inventory — reported losing $20 million, or $1.09 cents a share, down from a loss of $3.5 million, or 19 cents a share, a year ago.
Revenue dropped to $130 million, just more than half the $233 million of a year ago. Sales in stores open more than a year crashed 41 percent, compared with a 28 percent sales drop in the same quarter a year ago.
After earnings were released Thursday, MarineMax stock dropped 30 percent, the biggest decline on the New York Stock Exchange. After hitting bottom at $3.54, the stock recovered to close at $3.95, down $1.66 percent. The market valued the company at $73 million.
Mark Albright can be reached at email@example.com or (727) 893-8252.