This Management's Discussion and Analysis of Financial Condition and Results of
Operations contains "forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. These forward-looking statements
include statements relating to our plans to resume our growth through
acquisitions and new store openings when more normal economic conditions return;
our ability to capitalize on our core strengths to substantially outperform the
industry and result in market share gains; our ability to align our retailing
strategies with the desire of consumers; our belief that the steps we have taken
to address weak market conditions will yield an increase in future revenue; and
our expectations that our core strengths and retailing strategies will position
us to capitalize on growth opportunities as they occur and will allow us to
emerge from the current challenging economic environment with greater earnings
potential. Actual results could differ materially from those currently
anticipated as a result of a number of factors, including those set forth under
"Risk Factors" in our Annual Report on Form 10-K for the fiscal year ended
September 30, 2011.
General
We are the largest recreational boat retailer in the United States with fiscal
2011 revenue in excess of $480 million. Through our current 54 retail locations
in 19 states and the British Virgin Islands, we sell new and used recreational
boats and related marine products, including engines, trailers, parts, and
accessories. We also arrange related boat financing, insurance, and extended
service contracts; provide boat repair and maintenance services; offer yacht and
boat brokerage services; and, where available, offer slip and storage
accommodations. We recently implemented programs to increase substantially our
sale over the Internet of used boats and a wide range of boating parts,
accessories, supplies, and products; the sale at various offsite locations of
used boats, boating parts, and accessories, as well as the offer of finance and
insurance, or F&I, products; and the charter of power and sailing yachts. None
of these recently implemented programs have had a material effect on our
condensed consolidated financial statements.
MarineMax was incorporated in January 1998. We commenced operations with the
acquisition of five independent recreational boat dealers on March 1, 1998.
Since the initial acquisitions in March 1998, we have acquired 21 recreational
boat dealers, two boat brokerage operations, and two full-service yacht repair
facilities. As a part of our acquisition strategy, we frequently engage in
discussions with various recreational boat dealers regarding their potential
acquisition by us. Potential acquisition discussions frequently take place over
a long period of time and involve difficult business integration and other
issues, including, in some cases, management succession and related matters. As
a result of these and other factors, a number of potential acquisitions that
from time to time appear likely to occur do not result in binding legal
agreements and are not consummated. We did not complete any significant
acquisitions during the fiscal years ended September 30, 2008, 2009, 2010, or
2011, or to date in fiscal 2012.
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, particularly
Florida in which we generated 45%, 54%, and 50% of our revenue during fiscal
2009, 2010, and 2011, respectively, can have a major impact on our operations.
Local influences, such as corporate downsizing, military base closings,
inclement weather, environmental conditions, and specific events, such as the BP
oil spill in the Gulf of Mexico, also could adversely affect 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. Although we have expanded our operations during periods of stagnant
or modestly declining industry trends, the cyclical nature of the recreational
boating industry or the lack of industry growth may adversely affect our
business, financial condition, and results of operations. Any period of adverse
economic conditions or low consumer confidence has a negative effect on our
business.
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Lower consumer spending resulting from a downturn in the housing market and
other economic factors adversely affected our business in fiscal 2007 and
continued weakness in consumer spending resulting from substantial weakness in
the financial markets and depressed economic conditions had a very substantial
negative effect on our business in fiscal 2008, 2009, 2010, 2011, and to date in
fiscal 2012. These conditions caused us to defer 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. Acquisitions and new store openings
remain important strategies to our company, and we plan to resume our growth
through these strategies when more normal economic conditions return. However,
we cannot predict the length or severity of these unfavorable economic or
financial conditions or the extent to which they will continue to adversely
affect our operating results nor can we predict the effectiveness of the
measures we have taken to address this environment or whether additional
measures will be necessary.
Although economic conditions have adversely affected our operating results, we
have capitalized on our core strengths to substantially outperform the industry,
resulting in market share gains. Our ability to capture such market share
supports the alignment of our retailing strategies with the desires of
consumers. We believe the steps we have taken to address weak market conditions
will yield an increase in future revenue. As general economic trends improve, we
expect our core strengths and retailing strategies will position us to
capitalize on growth opportunities as they occur and will allow us to emerge
from this challenging economic environment with greater earnings potential.
Application of Critical Accounting Policies
We have identified the policies below as critical to our business operations and
the understanding of our results of operations. The impact and risks related to
these policies on our business operations is discussed throughout Management's
Discussion and Analysis of Financial Condition and Results of Operations when
such policies affect our reported and expected financial results.
In the ordinary course of business, we make a number of estimates and
assumptions relating to the reporting of results of operations and financial
condition in the preparation of our financial statements in conformity with
accounting principles generally accepted in the United States. We base our
estimates on historical experiences and on various other assumptions that we
believe are reasonable under the circumstances. The results form the basis for
making judgments about the carrying values of assets and liabilities that are
not readily apparent from other sources. Actual results could differ
significantly from those estimates under different assumptions and conditions.
We believe that the following discussion addresses our most critical accounting
policies, which are those that are most important to the portrayal of our
financial condition and results of operations and require our most difficult,
subjective, and complex judgments, often as a result of the need to make
estimates about the effect of matters that are inherently uncertain.
Revenue Recognition
We recognize revenue from boat, motor, and trailer sales and parts and service
operations at the time the boat, motor, trailer, or part is delivered to or
accepted by the customer or the service is completed. We recognize deferred
revenue from service operations and slip and storage services on a straight-line
basis over the term of the contract or when service is completed. We recognize
commissions earned from a brokerage sale at the time the related brokerage
transaction closes. We recognize commissions earned by us for placing notes with
financial institutions in connection with customer boat financing when we
recognize the related boat sales. We recognize marketing fees earned on credit
life, accident, disability, gap, and hull insurance products sold by third-party
insurance companies at the later of customer acceptance of the insurance product
as evidenced by contract execution or when the related boat sale is recognized.
We also recognize commissions earned on extended warranty service contracts sold
on behalf of third-party insurance companies at the later of customer acceptance
of the service contract terms as evidenced by contract execution or recognition
of the related boat sale.
Certain finance and extended warranty commissions and marketing fees on
insurance products may be charged back if a customer terminates or defaults on
the underlying contract within a specified period of time. Based upon our
experience of terminations and defaults, we maintain a chargeback allowance that
was not material to our financial statements taken as a whole as of March 31,
2012. Should results differ materially from our historical experiences, we would
need to modify our estimate of future chargebacks, which could have a material
adverse effect on our operating margins.
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Vendor Consideration Received
We account for consideration received from our vendors in accordance with FASB
Accounting Standards Codification 605-50, "Revenue Recognition - Customer
Payments and Incentives" ("ASC 605-50"). ASC 605-50 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 605-50, amounts
received by us under our co-op assistance programs from our manufacturers are
netted against related advertising expenses.
Inventories
Inventory costs consist of the amount paid to acquire inventory, net of vendor
consideration and purchase discounts, the cost of equipment added,
reconditioning costs, and transportation costs relating to acquiring inventory
for sale. We state new and used boat, motor, and trailer inventories at the
lower of cost, determined on a specific-identification basis, or market. We
state parts and accessories at the lower of cost, determined on an average cost
basis, or market. We utilize our historical experience, the aging of the
inventories, and our consideration of current market trends as the basis for
determining a lower of cost or market valuation allowance. As of September 30,
2011 and March 31, 2012, our lower of cost or market valuation allowance was
$3.4 million and $3.5 million, respectively. If events occur and market
conditions change, causing the fair value to fall below carrying value, the
lower of cost or market valuation allowance could increase.
Impairment of Long-Lived Assets
FASB Accounting Standards Codification 360-10-40, "Property, Plant, and
Equipment - Impairment or Disposal of Long-Lived Assets" ("ASC 360-10-40"),
requires that long-lived assets, such as property and equipment and purchased
intangibles subject to amortization, be reviewed for impairment whenever events
or changes in circumstances indicate that the carrying amount of an asset may
not be recoverable. Recoverability of the asset is measured by comparison of its
carrying amount to undiscounted future net cash flows the asset is expected to
generate. If such assets are considered to be impaired, the impairment to be
recognized is measured as the amount by which the carrying amount of the asset
exceeds its fair market value. Estimates of expected future cash flows represent
our best estimate based on currently available information and reasonable and
supportable assumptions. Any impairment recognized in accordance with ASC
360-10-40 is permanent and may not be restored. As of March 31, 2012, we had not
recognized any impairment of long-lived assets in connection with ASC 360-10-40,
during fiscal 2012.
Income Taxes
We account for income taxes in accordance with FASB Accounting Standards
Codification 740, "Income Taxes" ("ASC 740"). Under ASC 740, we recognize
deferred tax assets and liabilities for the future tax consequences attributable
to temporary differences between the financial statement carrying amounts of
existing assets and liabilities and their respective tax basis. We measure
deferred tax assets and liabilities using enacted tax rates expected to apply to
taxable income in the years in which we expect those temporary differences to be
recovered or settled. We record valuation allowances to reduce our deferred tax
assets to the amount expected to be realized by considering all available
positive and negative evidence.
Pursuant to ASC 740, we must consider all positive and negative evidence
regarding the realization of deferred tax assets, including past operating
results and future sources of taxable income. Under the provisions of ASC
740-10, we determined that our net deferred tax asset needed to be fully
reserved given recent earnings and industry trends.
Stock-Based Compensation
We account for our stock-based compensation plans following the provisions of
FASB Accounting Standards Codification 718, "Compensation - Stock Compensation"
("ASC 718"). In accordance with ASC 718, we use the Black-Scholes valuation
model for valuing all stock-based compensation and shares purchased under our
Employee Stock Purchase Plan. We measure compensation for restricted stock
awards and restricted stock units at fair value on the grant date based on the
number of shares expected to vest and the quoted market price of our common
stock. For restricted stock units with market conditions, we utilize a Monte
Carlo simulation embedded in a lattice model to determine the fair value. We
recognize compensation cost for all awards in earnings, net of estimated
forfeitures, on a straight-line basis over the requisite service period for each
separately vesting portion of the award.
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Consolidated Results of Operations
The following discussion compares the three and six months ended March 31, 2012
with the three and six months ended March 31, 2011 and should be read in
conjunction with the unaudited condensed consolidated financial statements,
including the related notes thereto, appearing elsewhere in this report.
Three Months Ended March 31, 2012 Compared with Three Months Ended March 31,
2011
Revenue. Revenue increased $28.2 million, or 24.4%, to $144.0 million for the
three months ended March 31, 2012 from $115.8 million for the three months ended
March 31, 2011. Of this increase, $29.5 million was attributable to a 25.9%
increase in comparable-store sales, which was partially offset by a decline of
$1.3 million related to stores opened or closed that were not eligible for
inclusion in the comparable-store base for the three months ended March 31,
2012. The increase in our comparable-store sales was due to incremental
increases in new boat sales, partly attributable to new brands, and incremental
increases in used boat sales, brokerage services, F&I products, and service,
parts and accessories products. Improving industry conditions resulting from
improved economic conditions contributed to our comparable-store sales growth.
Gross Profit. Gross profit increased $7.6 million, or 28.3%, to $34.4 million
for the three months ended March 31, 2012 from $26.8 million for the three
months ended March 31, 2011. Gross profit as a percentage of revenue increased
to 23.9% for the three months ended March 31, 2012 from 23.2% for the three
months ended March 31, 2011. The increase in gross profit was primarily
attributable to the increase in comparable-store sales and incrementally
increased margins on new boat sales due to improving industry inventory
conditions.
Selling, General, and Administrative Expenses. Selling, general, and
administrative expenses increased $548,000, or 1.8%, to $31.0 million for the
three months ended March 31, 2012 from $30.4 million for the three months ended
March 31, 2011. Selling, general, and administrative expenses as a percentage of
revenue decreased to 21.5% for the three months ended March 31, 2012 from 26.3%
for the three months ended March 31, 2011. The decrease in selling, general, and
administrative expenses as a percentage of revenue was primarily attributable to
expense leverage obtained through our reported comparable-store sales increase.
Interest Expense. Interest expense increased $367,000, or 43.8%, to $1.2 million
for the three months ended March 31, 2012 from $836,000 for the three months
ended March 31, 2011. Interest expense as a percentage of revenue increased to
0.8% for the three months ended March 31, 2012 from 0.7% for the three months
ended March 31, 2011. The increase was primarily the result of increased
borrowings under our credit facilities due to increased inventories.
Income Tax Benefit. We had an income tax benefit of $116,000 for the three
months ended March 31, 2012 compared with no income tax expense or benefit for
the three months ended March 31, 2011. Our effective income tax rate was low for
both the three months ended March 31, 2012 and 2011, primarily due to the
limitations on our net operating loss carryback, which limited the tax benefit
we were able to record and changes in our valuation allowances associated with
our deferred tax assets.
Six Months Ended March 31, 2012 Compared with Six Months Ended March 31, 2011
Revenue. Revenue increased $27.9 million, or 13.4%, to $235.8 million for the
six months ended March 31, 2012 from $207.9 million for the six months ended
March 31, 2011. Of this increase, $31.6 million was attributable to a 15.6%
increase in comparable-store sales, which was partially offset by a decline of
$3.7 million related to stores opened or closed that were not eligible for
inclusion in the comparable-store base for the six months ended March 31, 2012.
The increase in our comparable-store sales was due to incremental increases in
new boat sales, partly attributable to new brands, and incremental increases in
used boat sales, brokerage services, F&I products, and service, parts and
accessories products. Improving industry conditions resulting from improved
economic conditions contributed to our comparable-store sales growth.
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Gross Profit. Gross profit increased $9.6 million, or 19.0% to $60.0 million for
the six months ended March 31, 2012 from $50.4 million for the six months ended
March 31, 2011. Gross profit as a percentage of revenue increased to 25.4% for
the six months ended March 31, 2012 from 24.2% for the six months ended
March 31, 2011. The six months ended March 31, 2011 included a favorable
resolution of approximately $700,000 of inventory repurchases from a
manufacturer whose brands we no longer carry, which benefited gross margins
approximately 0.4%. The increase in gross profit was primarily attributable to
the increase in comparable-store sales and incrementally increased margins on
new boat sales due to improving industry inventory conditions.
Selling, General, and Administrative Expenses. Selling, general, and
administrative expenses increased $1.7 million, or 2.9%, to $59.6 million for
the six months ended March 31, 2012 from $57.9 million for the six months ended
March 31, 2011. Selling, general, and administrative expenses as a percentage of
revenue decreased approximately 2.5% to 25.3% for the six months ended March 31,
2012 from 27.8% for the six months ended March 31, 2011. The six months ended
March 31, 2011 included a benefit of approximately $700,000 from a favorable
resolution of accounts receivable from a manufacturer whose brands we no longer
carry. Excluding this item, selling, general, and administrative expenses
decreased as a percentage of revenue approximately 2.9% to 25.3% for the six
months ended March 31, 2012 from 28.2% for the six months ended March 31, 2011.
The decrease in selling, general, and administrative expenses (with such
adjustment) as a percentage of revenue was primarily attributable to expense
leverage obtained through our reported comparable-store sales increase.
Interest Expense. Interest expense increased $741,000, or 44.1%, to $2.4 million
for the six months ended March 31, 2012 from $1.7 million for the six months
ended March 31, 2011. Interest expense as a percentage of revenue increased to
1.0% for the six months ended March 31, 2012 from 0.8% for the six months ended
March 31, 2011. The increase was primarily the result of increased borrowings
under our credit facilities due to increased inventories.
Income Tax Benefit. We had an income tax benefit of $116,000 for the six months
ended March 31, 2012 compared with no income tax expense or benefit for the six
months ended March 31, 2011. Our effective income tax rate was low for both the
six months ended March 31, 2012 and 2011, primarily due to the limitations on
our net operating loss carryback, which limited the tax benefit we were able to
record and changes in our valuation allowances associated with our deferred tax
assets.
Liquidity and Capital Resources
Our cash needs are primarily for working capital to support operations,
including new and used boat and related parts inventories, off-season liquidity,
and growth through acquisitions and new store openings. Acquisitions and new
store openings remain important strategies to our company, and we plan to resume
our growth through these strategies when more normal economic conditions return.
However, we cannot predict the length or severity of these unfavorable economic
or financial conditions. We regularly monitor the aging of our inventories and
current market trends to evaluate our current and future inventory needs. We
also use this evaluation in conjunction with our review of our current and
expected operating performance and expected business levels to determine the
adequacy of our financing needs. These cash needs have historically been
financed with cash generated from operations and borrowings under our credit
facilities. Our ability to utilize our credit facilities to fund operations
depends upon the collateral levels and compliance with the covenants of the
credit facilities. Turmoil in the credit markets and weakness in the retail
markets may interfere with our ability to remain in compliance with the
covenants of the credit facilities and therefore our ability to utilize the
credit facilities to fund operations. At March 31, 2012, we were in compliance
with all covenants under our credit facilities. We currently depend upon
dividends and other payments from our dealerships and our credit facilities to
fund our current operations and meet our cash needs. As 100% owner of each of
our dealerships, we determine the amounts of such distributions, and currently,
no agreements exist that restrict this flow of funds from our dealerships.
For the six months ended March 31, 2012 and 2011, cash provided by operating
activities was approximately $10.4 million and $12.6 million, respectively. For
the six months ended March 31, 2012, cash provided by operating activities was
primarily related to a decrease of inventory driven by timing of boats received
and our comparable-store sales and partially offset by an increase in accounts
receivable as a result of our strong March close. For the six months ended
March 31, 2011, cash provided by operating activities was primarily related to a
decrease in accounts receivable from our manufacturers, an increase in accounts
payable and accrued expenses, an increase in customer deposits as large yachts
were placed on order, partially offset by our net loss.
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For the six months ended March 31, 2012 and 2011, cash used in investing
activities was approximately $2.4 million and $4.4 million, respectively. For
the six months ended March 31, 2012, cash used in investing activities was
primarily used to purchase property and equipment associated with improving
existing retail facilities. For the six months ended March 31, 2011, cash used
in investing activities was primarily used in a business acquisition and to
purchase property and equipment associated with improving existing retail
facilities. Of the $4.4 million, approximately $2.3 million was used in the
business acquisition to acquire inventory and equipment.
For the six months ended March 31, 2012, cash provided by financing activities
was approximately $1.6 million and was primarily attributable to an increase in
short-term borrowings as a result of increased average inventory levels. For the
six months ended March 31, 2011, cash used in financing activities approximated
$3.3 million and was primarily attributable to net payments on our short-term
borrowings.
In June 2011, we entered into an amendment to our Inventory Financing Agreement
(the "Credit Facility"), originally entered into in June 2010 with GE Commercial
Distribution Finance Company ("GECDF"), as amended in December 2010. The June
2011 amendment, among other things, modified the amount of borrowing
availability, interest rate, and maturity date of the Credit Facility. The
amended Credit Facility provides a floor plan financing commitment up to $150
million, up from the previous limit of $100 million, subject to borrowing base
availability resulting from the amount and aging of our inventory. The amended
Credit Facility matures in June 2014, subject to extension for two one-year
periods, with the approval of GECDF.
The amended Credit Facility has certain financial covenants as specified in the
agreement. The covenants include provisions that our leverage ratio must not
exceed 2.75 to 1.0 and that our current ratio must be greater than 1.2 to 1.0.
At March 31, 2012, we were in compliance with all of the covenants under the
amended Credit Facility. The interest rate for amounts outstanding under the
amended Credit Facility is 383 basis points above the one-month London
Inter-Bank Offering Rate ("LIBOR"). There is an unused line fee of ten basis
points on the unused portion of the amended Credit Facility.
Advances under the amended Credit Facility are initiated by the acquisition of
eligible new and used inventory or are re-advances against eligible new and used
inventory that have been partially paid-off. Advances on new inventory mature
1,081 days from the original invoice date. Advances on used inventory mature
361 days from the date we acquire the used inventory. Each advance is subject to
a curtailment schedule, which requires that we pay down the balance of each
advance on a periodic basis starting after six months. The curtailment schedule
varies based on the type and value of the inventory. The collateral for the
amended Credit Facility is all of our personal property with certain limited
exceptions. None of our real estate has been pledged for collateral for the
amended Credit Facility.
In September 2011, we entered into an extension through August 31, 2012 to our
Inventory Financing Agreement (the "CGI Facility"), originally entered into in
October 2010 with CGI Finance, Inc. The CGI Facility provides a floor plan
financing commitment of $30 million and is designed to provide financing for our
Azimut inventory needs. The CGI Facility has an approximate one-year term, which
is typical in the industry for similar floor plan facilities; however, each
advance under the CGI Facility can remain outstanding for 18 months. The
interest rate for amounts outstanding under the CGI Facility is 350 basis points
above the one-month LIBOR.
Advances under the CGI Facility are initiated by the acquisition of eligible new
and used inventory or are re-advances against eligible new and used inventory
that has been partially paid-off. Advances on new inventory mature 550 days from
the advance date. Advances on used inventory mature 366 days from the advance
date. Each advance is subject to a curtailment schedule, which requires that we
pay down the balance of each advance on a periodic basis, starting after six
months for used inventory and one year for new inventory. The curtailment
schedule varies based on the type of inventory.
The collateral for the CGI Facility is our entire Azimut inventory financed by
the CGI Facility with certain limited exceptions. None of our real estate has
been pledged as collateral for the CGI Facility. We must maintain compliance
with certain financial covenants as specified in the CGI Facility. The covenants
include provisions that our leverage ratio must not exceed 2.75 to 1.0 and that
our current ratio must be greater than 1.2 to 1.0. At March 31, 2012, we were in
compliance with all of the covenants under the CGI Facility. The CGI Facility
contemplates that other lenders may be added by us to finance other inventory
not financed under the CGI Facility, if needed.
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At March 31, 2012, our indebtedness associated with financing our inventory and
working capital needs totaled approximately $120.1 million. At both March 31,
2011 and 2012, the interest rate on the outstanding short-term borrowings was
approximately 4.0%. At March 31, 2012, our additional available borrowings under
our amended Credit Facility and CGI Facility were approximately $34.1 million
based upon the outstanding borrowing base availability. The aging of our
inventory limits our borrowing capacity as defined curtailments reduce the
allowable advance rate as our inventory ages.
We issued a total of 150,314 shares of our common stock in conjunction with our
Incentive Stock Plans and Employee Stock Purchase Plan during the six months
ended March 31, 2012 for approximately $458,000 in cash. Our Incentive Stock
Plans provide for the grant of incentive and non-qualified stock options to
acquire our common stock, the grant of restricted stock awards and restricted
stock units, the grant of common stock, the grant of stock appreciation rights,
and the grant of other cash awards to key personnel, directors, consultants,
independent contractors, and others providing valuable services to us. Our
Employee Stock Purchase Plan is available to all our regular employees who have
completed at least one year of continuous service.
Except as specified in this "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and in the attached unaudited condensed
consolidated financial statements, we have no material commitments for capital
for the next 12 months. We believe that our existing capital resources will be
sufficient to finance our operations for at least the next 12 months, except for
possible significant acquisitions.
Impact of Seasonality and Weather on Operations
Our business, as well as the entire recreational boating industry, is highly
seasonal, with seasonality varying in different geographic markets. 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 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 business could become substantially more
seasonal if we acquire dealers that operate in colder regions of the United
States or close retail locations in warm climates.
Our business is also subject to weather patterns, which may adversely affect our
results of operations. For example, drought conditions (or merely reduced
rainfall levels) or excessive rain, may close area boating locations or render
boating dangerous or inconvenient, thereby curtailing customer demand for our
products and services. 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. 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.
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