Good day, and welcome to the MarineMax, Inc. Fiscal 2025 Fourth Quarter and Full Year Conference Call. Today's call is being recorded. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. I would now like to turn the call over to Scott Solomon of the company's Investor Relations firm, Sharon Merrill Advisors. Please go ahead, sir.

Thank you, operator, and good morning, everyone. Hosting today's call are Brett McGill, MarineMax's Chief Executive Officer and President, and Mike McLamb, the company's Chief Financial Officer. Brett will begin the call by discussing MarineMax's operating performance and recent highlights, Mike will review the financial results and provide the company's fiscal 2026 financial guidance. Brett will make some concluding comments and then management will be happy to take your questions. The earnings release and supplemental presentation associated with today's announcement can be found at investor.marinemax.com. And with that, I'll turn the call over to Mike. Mike?

Thank you, Scott. Good morning, everyone, and thank you for joining this call. I'd like to start by reminding you that certain of our comments are forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Any forward-looking statements speak only as of today. These statements involve risks and uncertainties that could cause actual results to differ materially from expectations. These risks include, but are not limited to, the impact of seasonality and weather, global economic conditions, and the level of consumer spending, the company's ability to capitalize on opportunities or grow its market share, and numerous other factors identified in the company's most recently filed 10-Ks and 10-Qs and other filings with the Securities and Exchange Commission. The company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events, or otherwise. On today's call, we will make comments referring to non-GAAP financial measures. We believe that the inclusion of these financial measures helps investors gain a meaningful understanding of the changes in the company's core operating results. These measures can also help investors who wish to make comparisons between MarineMax and other companies on both a GAAP and a non-GAAP basis. The reconciliation to non-GAAP financial measures GAAP measures is available in today's earnings release. With that, let me turn the call over to Brett. Brett?

Thank you, Mike. Good morning, everyone, and thank you for joining us today to discuss our fiscal fourth quarter and full year 2025 performance. Let me begin by recognizing our team's exceptional dedication throughout what has been a challenging year for the recreational boating industry. Elevated interest rates, persistent inflation, and the uncertainty stemming from the trade wars and geopolitical tensions have resulted in many consumers deferring their boat purchases. In the face of these headwinds, our team has remained focused on delivering world-class customer experiences that continue to set us apart as reflected in our industry-leading net Promoter Scores. Our full-year adjusted earnings and adjusted EBITDA were in line with the guidance we gave last quarter. For the fourth quarter, we achieved revenue of over $552 million with same-store sales growth of more than 2%. Despite significant pressure on new boat margins due to the sustained elevated inventory level across the retail industry, our gross margins expanded to 34.7%. Demonstrating the strength of our diversified business model and the benefits of our strategic focus on higher-margin businesses such as finance and insurance, parts and service, superyacht services, and marina operations, including IGY. These diversified revenue sources provide important balance and support our financial resilience through different macroeconomic and industry cycles. We also benefit from cross-selling opportunities between yacht deals, superyacht services, and marina operations, and we are regularly finding new ways to unlock synergies between each of these businesses and deliver greater value for our customers and our shareholders. There are many examples, including a 35-meter Yacht sale at the recent Fort Lauderdale International Boat Show, which resulted from touchpoints across all of these businesses. This is a great example of how we continue to see tangible results across yacht sales, charter bookings, and storage through these connected marketing…

Thank you, Brett. I want to echo Brett's appreciation for our team's outstanding performance during this challenging period. Total revenue for the fourth quarter was over $552 million which was down modestly from last year due to the impact of our store rationalization efforts including the strategic closure of 10 stores since 2024. During the quarter, same-store sales increased over 2% driven by growth in used boat revenue, finance and insurance, parts and service, and contributions from superyacht services, and Marine operations, including IGY. In terms of units, they were down in the quarter as we continue to see a migration to higher average unit prices. Gross profit was over $191 million and our gross margin increased to 34.7%. The increase in gross margin as Brett noted reflects continued growth in our diversified higher-margin businesses and was achieved despite historically low boat margins due to the challenging retail environment. Selling, general and administrative expenses were over $177 million. The increase primarily reflects the greater contribution of service-related revenue which drives gross margin dollars, but does have a higher cost dynamic than retail store operations. Along with increases in targeted marketing investments incurred to maximize sales opportunities in a challenging environment as well as higher foreign currency translation costs. Due to a weaker dollar. Interest expense was down slightly year over year. The reported net loss in the quarter was just under $1 million or $0.04 per share which was the same as the adjusted loss per share. Adjusted EBITDA was $17.3 million in the quarter. For fiscal 2025, revenue was $2.31 billion reflecting a same-store sales decline of just over 2% due to the challenging industry environment while total revenue declined 5% given our strategic store and brand optimization efforts. Our full-year gross margin was 32.5%, down slightly from last…

Thank you, Mike. Although our fiscal 2026 outlook reflects a prudent approach in light of macroeconomic uncertainty and persistent industry headwinds, we remain confident in MarineMax's long-term strategy and growth opportunities. Our management team has guided the company through multiple challenging economic cycles, and we believe that the continued execution of our strategy will drive sustainable and profitable growth for our shareholders. Our diversification across higher-margin businesses, combined with our strong balance sheet, support our resiliency in the face of industry headwinds while also providing us with the flexibility to invest in growth and seize emerging opportunities. We will continue to focus on strategic initiatives and product innovation, digital engagement, and customer experience. Areas that are becoming increasingly valuable as buyers become more discerning. The recreational boating industry is approaching several potentially positive inflection points. Industry-wide, inventories are expected to more normalized levels over the coming quarters, which should provide margin relief. Additionally, interest rate cuts are generally positive for our consumer, and the further rate cuts that many expect to occur over the coming months should support improved customer demand. The fundamentals supporting recreational boating remain exceptionally strong. Interest in the boating lifestyle continues to accelerate. As evidenced by robust activity levels at our marinas, service centers, and at the recent Fort Lauderdale Boat Show. Premium consumers increasingly view boating not as a discretionary purchase but as an essential lifestyle. As macroeconomic conditions improve, our strategy positions us to emerge more resilient, more diversified, and uniquely poised to capture the long-term opportunities in the global recreational marine market. With that, Mike and I will be happy to take your questions. So operator, please open up the line for Q&A. Thank you.

Ladies and gentlemen, we will now begin the question and answer session. If you would like to ask a question, please press star, and one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Ladies and gentlemen, in the interest of time, please limit yourself to one question. One moment, please, while we poll for questions. We take the first question from the line of James Hardiman from Citi. Please go ahead.

Hey. Good morning. Thanks for taking my questions. So obviously, the same-store sales number accelerated nicely from 3Q to 4Q. I was hoping you could help us out just splitting sort of how much of that was units versus ASPs and then I guess similar question on the month of October. I think you said positive same-store sales for October. Are you actually seeing, you know, unit acceleration, into the off-season? Thanks.

Yeah. A great question, James. So, obviously, you guys follow the industry. The industry for the core categories that we're in has seen softness, double-digit declines in July, August, and September. Some categories, 25%, etcetera, from a unit perspective. So we typically outperform the industry. So our units for the quarter are down in the mid-single-digit range, which is better than the industry overall. So the difference from down mid-single-digit to up 2% is the increase in average unit selling price during the quarter. And then on the month of October, you gotta keep in mind the month of October last year, we were dealing with a hurricane in Florida. But our units were up in the month of October and we all did see a modest increase in average unit selling price.

That's really helpful. And then just very briefly, just wanted to dig into the rate environment. Obviously, we've gotten a couple of 25 basis point rate cuts. I think the ten-year is modestly lower than maybe the last time we spoke. Are you seeing that show up in terms of relief from your lenders and, you know, is that having any impact from a consumer perspective as they contemplate, you know, lower payments?

Yes, James. Good I I think, you know, rates for the consumer, obviously, we're kinda dealing in a higher-end segment as we've always talked about. So, you know, monthly payment maybe isn't driving the need to just rush out and buy something. But I've said before, a lot of our customers are small business owners, you know, construction companies, etcetera. And, you know, when there's a rate environment that's more favorable for their business, they get a little more excited and optimistic about things and, you know, they come forward with a boat purchase. So I think both of those things are helping, but, consumer feeling better about the rate, I think, we see some of that, like even at Lauderdale, feeling better about that things are going to come down is, you know, given a positive news that they haven't had in a while.

Got it. That's helpful color. Thanks, guys.

Thanks, James.

We take the next question from the line of Mike Albanese from The Benchmark Company. Please go ahead.

Hey. Good morning, guys. Thanks for taking my question. I just want to ask about gross margins. Obviously, jumped, I think, 34% in the quarter. You've been pretty consistent keeping them above 30% here in tough, you know, market. And, obviously, you know, some of that is mix, but it appears your adjacencies are holding up well. Could you just, you know, kinda tap into that a little bit deeper? And I'd love to kind of understand, you know, how much of that has been kind of strategic initiatives, cross-sell synergies, etcetera versus just sustainable demand within those segments? Thank you.

I can comment. I'll take a first stab that, yeah. In the current environment, boat margins are the second lowest I've seen in twenty-seven years. They're not down as far as they were in the great financial crisis, but they're very low. They're, like, three to 350 basis points below normal. And so hopefully over time, we'll see some upside in boat margins as inventories normalize. But I do think our strategy of expanding in these higher-margin categories, whether it's the marinas, superyacht services, finance and insurance, service, parts, and accessories. A lot there's a lot of different higher-margin components that we've been expanding with. I think, really shines in an environment like this and helps us maintain elevated gross margins overall. It comes through in the quarter. And, Mike, when we set out with this strategy and we're very focused on it with these higher-margin business businesses and the growth we've had in those and the investments we've made in those businesses. It does show through. It shines. And you ask a question. Yeah. Those businesses, you know, have what's close to recurring type revenue as you can get. So you kinda rely on those types of things. Of course, you gotta manage the business. But we're continue to unlock different synergies, cross-selling, know, consumers feeling good about, you know, buying a larger yacht at a MarineMax, you know, Fort Myers location, let's say. Then feeling good about, wow. What if I wanna put that in charter with Fraser Yachts or whatever it might be so that they feel comfortable with that all the way up to, you know, where are they gonna put their boat when they get to The Caribbean through our IGY marina. So we're seeing a lot more of those synergies. And we'll continue to unlock those as well.

Got it. Thank you, guys. Thank you, Mike.

We take the next question from the line of Joseph Altobello from Raymond James. Please go ahead.

Hi, good morning. This is Martin on for Joe. Just wanna take a finer point onto the promotional drag in the quarter. Could you a little bit more color to what that headwind was and sort of what we can expect entering the New Year.

Yeah. If I understand your question right, Martin, good question. So the I'd say this entire fiscal year, we've seen a very challenged environment because of elevated inventory levels. Really across the industry. Certainly true in the current quarter. I just commented a little while ago just how soft boat margins are. When we think about 2026 and in our guidance, we're not expecting much of a lift in boat margins. I think I commented in my prepared remarks that at least through the wintertime when there's a lot of dealers who are, you know, are feeling softer sales and increased pressure, when it comes to carrying costs, etcetera, I think the margin the pressure will still be there. It is thought that later on in the year when you get into the summer selling season as inventories begin to normalize, that we could see some relief on the margin side. But obviously, it won't snap back overnight, but it will potentially begin to improve like in the summertime in the back half of our.

Thank you, Mark. Thank you.

We take the next question from the line of Eric Wold from Texas Capital Securities. Please go ahead.

Thanks. Good morning. Mike, kind of looking at the guidance for fiscal 2026, I guess, your industry assumptions relative to your same-store sales. It looks like, I mean, unless I'm reading this wrong, it looks like you're expecting kinda more in line of performance with the industry versus kind of more of the outperformance that you've had before, especially given the mix towards, you know, higher-end premium boats. Am I reading that wrong? Are you are you trying to take a little more cautious view? On mix, or how should we think about kind of what's embedded in that guided in terms of, you know, relative performance to the industry?

No. Eric, I think you're reading that right. I think the, you know, the first assumption is does the industry get the flattish units from negatives. That's one assumption that's in there. And then, obviously, what happens with mix from our perspective. But I think we're trying to be prudent in terms of our guidance figures because you're right. We typically do outperform what the industry does. But I think we're really trying to see let let's let's get through fiscal 2026. Let's see that the industry really does get back to, you know, first to zero instead of negative and then to slightly positive in the second half of the year.

Got it. And then just quickly, update us on where you are with, you know, rationalizing kinda operating expenses and in general and overhead and kinda what you expect, as you move through fiscal twenty-six?

Well, I commented that we've, we have closed 10 stores now since last year and we've made other cost cuts and savings. There is a current drag that's going on within the business, which is just additional marketing spend, additional inventory maintenance spend, etcetera, really that the whole industry is having with the slower turns that we've had, which would improve. But in our 2026 guidance, we're not baking in any substantial, additional cost savings from what we're seeing in the current levels of 2025.

Got it. Thanks, Mike.

Thanks, Eric.

Thank you, Eric.

Thank you. We take the next question from the line of Anna Glaessgen from B. Riley Securities. Please go ahead.

Hey. Good morning. Thanks for taking my question. I'd like to start on same-store sales cadence. On the one hand, it seems that we're assuming some sequential improvement as we get to the back half in terms of market performance. But then on the other hand, we have some sort of one-time lapse, like, you know, lapping the hurricane in Florida last year, which drove, you know, the easiest comp in one Q. So just trying to understand the puts and takes as we think about the shape of the year.

No. It's a great question. You're right. I mean, the state of Florida was impacted by hurricanes. We were down negative 11% in the December quarter, then up 11 in March. So technically, we do have an easier comparison right now, which is why I said with October being up, it's up against storms. And then when you go out throughout the year, obviously, the quarter with Liberation Day, which is the June quarter, in theory, is another easy comp. We were down 9%. And then it sort of levels off in September. So you do gotta bake all it in from an assumption perspective. I think the point that I was trying to make in my prepared remarks is that when you look at our bottom line financial performance in the December and the March, we exceeded, you know, our thinking in the street and our guidance in those two quarters. From an EBITDA and from an earnings perspective. So when you're modeling out the whole year, factoring in the same-store sales questions that you're asking. We actually have an easier comparison from an earnings perspective in the back half of the year than the front half of the year.

Got it. Thanks. And then turning back to the boat margin question, you know, understanding the seasonal aspects of maybe getting some improvement once we get through the March when we enter the retail selling season. But trying to understand kind of, like, the key drivers of improvement there. Is it getting through some of the aged inventory that maybe competitors feel? Is it improved market performance? Or is it really just, you know, that seasonal aspect that's impacting the first February of the year? Thanks.

Yeah. And I'll comment. Yeah. I think that aged inventory, you know, getting rid of that, getting inventory levels down to a more, you know, manageable level and to kind of balancing the supply-demand side is fundamental to everything. The promotional activity is strong. You know, there's also, I think, a consumer sentiment. You know, boat prices have really increased over the last five years. So there's pressure on, you know, just a consumer feeling like they need a discount. Even if there's, you know, not an age inventory or too much inventory. So just gotta kinda lap through that and let customers, you know, get back to a more normal buying pattern. But inventory levels are definitely gonna help, get the margins squared away. Yeah. Industry levels. Yep.

Great. Thanks, guys.

Thanks, Anna.

Thank you. Ladies and gentlemen, I will now hand the conference over to Mr. McGill for his closing comments.

Well, thank you, everybody, for joining us today, and look forward to keeping you updated on our next call. Have a great day.

Thank you. Ladies and gentlemen, the conference of MarineMax, Inc. has now concluded. Thank you for your participation. You may now disconnect your lines.