Q4 2023 MarineMax Inc Earnings Call
Good morning, and welcome to the Marine Max Inc. Fiscal 2023 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 brief question and answer session will follow the formal presentation.
At this time I would like to turn the call over to Scott Sullivan of the company's Investor Relations firm.
Got it.
Please go ahead Sir.
Good morning, and thank you for joining us hosting todays call are Brett Mcgill Marine Max as President and Chief Executive Officer, and Mike Mclamb, The Companys Chief Financial Officer.
We will begin the call by discussing Marine Max is operating highlights Mike will review the financial results and then management will be happy to take your questions. The earnings release and supplemental presentation can be found at Investor <unk> Marine Max Dot com with that I'll turn the call over to 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 our Form 10-K, and other filings with the Securities and Exchange Commission.
Also 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.
These metrics can also help investors, who wish to make comparisons between marine Max and other companies on both a GAAP and a non-GAAP basis, a reconciliation of non-GAAP financial measures to the most directly comparable GAAP measures is available in today's earnings release with that let me turn the.
Call over to Bryan Bryan.
Right.
Thank you Mike Good morning, everyone and thank you for joining us.
I wanted to begin by thanking the entire marine Max team, whose outstanding customer service contributed to strong top line growth in fiscal 2023.
As evidenced by our record fourth quarter and full year revenue demand for the boat boating lifestyle remains strong.
From our 81 retail locations to our manufacturing facilities marinas and Super Yacht operations worldwide. Our team is focused on one mission to provide the world's best pleasure boating experience.
Through strategic acquisitions, we are broadening our presence well beyond retail dealerships to higher margin segments of the industry that encompasses all aspects of the boat ownership lifecycle and enables us to build deep customer relationships.
Today, Mike and I are speaking to you from the Fort Lauderdale International boat show, where here, representing all of our premium product line as well as large displays for Fraser yachts, Northland Johnson and I G Y marinas, we anticipate robust for 10 minutes and we are particularly excited about the demand we continue to see them.
Premium segment, one of the critical drivers of our long term growth strategy.
Turning to our fourth quarter performance, we saw continued momentum from our strategic marketing and customer engagement initiatives, which drove an 8% increase in same store sales.
New and used boat sales were up in dollars and units with the premium categories again performing well.
However, we also saw better strength in categories that were lagging earlier in the year like pontoons in tow boats.
Revenue gains in our higher margin businesses like service and finance and insurance contributed to the same store sales increase.
I G Y marinas, which we acquired last October contributed meaningfully to our revenue growth for the quarter and full year.
From a cadence perspective, as we noted on our July call. The quarter started strong and generally stayed active through the entire quarter with a strong close to September.
Although our full year adjusted EPS and adjusted EBITDA were in line with our most recent guidance. There's some additional work we need to do well.
We are looking specifically at SG&A expenses to evaluate more fully the latitude we have to reduce costs in areas that do not impact the customer experience.
Clearly inflation has affected operating costs, but we believe cost synergies do exist and we will work to offset some of that inflation going forward.
Given rising inventory levels across the industry and a return to seasonality we had anticipated some retail margin erosion in the quarter.
However, we were pleased to see gross margins remain in the mid thirties.
For the full year, our gross margins are flat at about 35%.
That speaks to our business is increasing diversification and resilience across market cycles, as well as our strategy of adding higher margin businesses.
Sophisticated data and analytics are adding more precision to our marketing initiatives. For example, we are using intelligent customer and inventory tools to monitor demand in real time.
These tools enable us to drive marketing demand and inventory alignment.
Our expanded strategic marketing capabilities are clearly driving improved retail results in driving market share growth.
We're also gaining momentum with new wave of innovation more and more marine dealerships are registering to use boats on dotcom, our digital retailing marine platform.
In much the same way technology has streamlined the process of buying a car boats on it's simplifying the customer experience of purchasing a boat.
We're still in the startup phase, we expect a bright future for boats.
Turning to other recent highlights this month's Fraser yachts completed the previously announced very strategic acquisition of Atlanta Golden yards or a G y <unk>.
Based in Athens AG why is one of Greece's leading charter management companies. The addition of a G Y is consistent with our strategy of adding high quality businesses that enhance our margin profile.
A G Y complements and greatly expands our super yacht services business in Greece, a major charter destination.
And home to one of the largest super yacht fleet in the world.
Our M&A pipeline remains active and we continue to evaluate potential opportunities that align with our strategic priorities.
A number of investors have asked us about the near term industry outlook in light of the current economic environment.
From a macro perspective, we are approaching fiscal 2024 with appropriate caution.
We are encouraged by how 2023 ended.
Nonetheless, we realize much uncertainty facing the world.
That said, we continue to focus on the areas within our control by reviewing expenses deploying our capital wisely and capturing revenue synergies as we look ahead to 2024, we are excited to build upon this foundation and deliver on our commitment to providing unparalleled voting and yachting experiences.
To a growing number of customers worldwide.
With that update let me turn the call over to Mike for a financial recap Mike.
Thank you Brett I also want to thank our team for their efforts, which produced a strong fourth quarter and record revenue in fiscal 2023.
In the quarter, we grew revenues, 11% to $595 million driven by an 8% increase in same store sales. The same store improvement was driven roughly 50 50 by units and average unit selling price growth.
<unk> with our commentary all year, our premium brands continue to out shine any price point categories.
However, as Bret noted we did see additional strength this quarter from traditional seasonal boats like pontoons in tow boats two categories that lagged earlier in the year.
Geographically, we saw positive trends in most markets with particular strength in Florida and the Midwest.
Gross profit of $204 million was up $7 million from last year, while gross margin was down year over year to 34, 3%.
As expected product margins moderated as inventory levels in the industry have increased gen.
Generally product margins approached pre pandemic levels, while our consolidated margins remain in the mid Thirty's.
As Brett said the strength of our consolidated margins is a testament to our strategy of adding higher margin businesses.
SG&A expenses were up 16% to $169 million well over half. The dollar increase was from the <unk> Midcoast boson and CNC acquisitions. We completed this year. However, we did see increases from various categories, such as health insurance property insurance inventory.
Maintenance and marketing to name a few.
Clearly some of the costs drove top line growth, but as Brent mentioned, we are exploring various opportunities to improve synergies internally as well as areas for cost savings, while not impacting the experience of the customer.
Interest expense increased by $14 8 million, reflecting rising interest rates increased inventory and higher long term debt associated with <unk>.
Given the increase in rates Floorplan interest was incrementally higher than we expected.
On the bottom line, we generated GAAP net income of more than 15 million or <unk> 67 per diluted share compared with net income of $38 4 million or $1 73 per diluted share last year.
Our adjusted EBITDA for the quarter was $43 million compared with 68 million last year, primarily due to lower net income and higher floorplan interest expense, which accounted for nearly $8 million of the difference.
For the full year GAAP net income was $109 million or $4 87 per diluted share and we generated adjusted net income of $117 million or $5 21 per diluted share in line with our guidance.
Our full year adjusted EBITDA was in line with guidance at $239 million compared with $310 million last year.
With floor plan interest expense accounting for roughly $25 million of the difference.
Our balance sheet remains healthy as we ended the year with more than $200 million in cash.
Inventories at year end increased to $813 million, which as expected was up sequentially from June.
On a same store basis unit inventories are in the neighborhood of down a little over 30% compared with September 2019 levels.
Looking at liabilities, our short term borrowings, which is our floorplan financing Roes largely due to increased inventories and the timing of payments.
As expected customer deposits declined sequentially from June to $82 million, reflecting our ability to better meet demand as inventory becomes available.
Our liquidity position remained strong.
A year end debt to EBITDA net of cash was less than one.
We have additional liquidity in the form of Unlevered inventory plus available lines of credit that totaled approximately 200 million.
Turning to guidance I will comment first on our thoughts regarding the industry unit trends for our fiscal year 2024.
For many months of the upcoming year the year over year unit trends are relatively easy comparisons in terms of the industry's ability to post either unit growth or a minimal decline.
Assuming no significant economic downturn, but also no major improvements.
We believe the industry will be flattish to up slightly and our fiscal year.
We also believe that the premium and we will continue to outperform price point segments.
We expect the industry to be back in full seasonal mode for all of fiscal 2024.
This means the December quarter will be by far the smallest quarter of the year, followed by seasonally stronger quarters through the selling season.
We also expect inventory to modestly build seasonally as it has historically.
Based on our industry unit expectation, we expect low to mid single digit same store sales growth in 2024 at.
At the same time, we do expect product margins to moderate as we continue to reap the long term benefits of the higher margin strategy, we have successfully executed.
It's also worth noting that in the December 22, and March 23 quarters, we had lower interest costs driven by lower rates and lower inventory. Then we will have in the same quarters this fiscal year.
Factoring all of this in we expect our adjusted net income per share to be in the range of $4 50 to $5 per diluted share for fiscal 2024 with adjusted EBITDA to be in the range of 225 million to $250 million.
Higher depreciation and stock based compensation as well as additional shares in the denominator adversely impacts EPS versus adjusted EBITDA.
We are using an expected tax rate of approximately 27% and a share count of $23 1 million shares and our assumptions.
Looking at current trends October last year was aided by boats that push from September due to hurricane Ian.
This year October currently looks to be flattish to that strong comparison as people continue to seek the boating lifestyle.
With that I'll turn the call back over to Brett for closing comments right.
Thanks, Mike Despite a challenging market environment, we executed well in fiscal 2023, delivering record revenue and strong gross margins, while the retail boating industry continues to see a return to historical seasonality, our diversified revenue stream and our position in the premium.
Segment of the retail market creates a sustainable competitive advantage for marine Max.
Our strategic initiatives over the past several years continues to improve our long term margin profile and generate new growth opportunities.
<unk> is a diversified global Marine company, providing in the international customer base with the products services and experiences to enrich their journey on the water.
We remain committed to maintaining marine Max financial strength and building long term shareholder value by pursuing opportunities to drive profitable growth.
And with that operator, let's open up the call for questions.
Sure.
Ladies and gentlemen, we will now be conducting a question and answer session.
If you would like to ask a question. Please press star and one on your telephone keypad.
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You May press Star two if you would like to remove your question from the queue.
All participants using speaker equipment, it may be necessary to pick up your handset before pressing the stock east.
Ladies and gentlemen.
In the interest of time, please limit yourself to one question and I'll follow up.
Our first question comes from James Hardiman with Citi. Please go ahead.
Yes.
Hey, good morning, Thanks for taking my call.
You talked about the comparison can you maybe walk us through it seems like maybe.
The December quarter.
To keep maybe the best way every year, maybe that's.
Easy to predict because.
Current.
Right.
That.
Full year low to mid single digit same store sales, how do we think about that progression over the course of the year.
Yes, great question James.
Yes for sure from an industry perspective, the December quarter does appear to be the easiest comparison with the unit declines on a year over year basis, but even if you go all the way into <unk>.
January February March April and even into May.
Saracens are relatively easy and then there are mixed when you go through the rest of our fiscal year June July August and September so.
As I said on the call. It sure seems like absent a recession many of those months have the ability to post positive unit gains in.
Historically the industry is unit growth, we traditionally outperformed the industry and then you get a migration of.
Average unit selling price, which is kind of the basis of our.
Same store sales growth for 2024.
Got it that's helpful. And then on the inventory question I think you've touched on a little bit.
Prepared remarks, but can you just bridge.
Last year's inventory number and if youre getting toward numbers, if you think about.
Sort of acquired inventory, but then also a unit versus $1 <unk>.
We think about how youre thinking about ordering patterns and inventory going forward.
Are we at a place where you would generally think about our unit in a unit out right wholesale equaling retail or did you anticipate.
Lowering inventories on a like for like basis, or we're building inventories on a like for like basis.
So let me let me try to take all of those questions. If I can remember them.
On a year over year basis, there really isn't a whole lot of acquired growth in terms of acquisitions. The <unk> acquisition was a smaller one so there is some from that.
A little bit I guess from.
In terms of the balance sheet inventory from <unk> that has fuel and stuff like that but the bulk of the growth is just building of inventories from last year, which was a relatively low level.
Skewed by dollar growth quite frankly, so that as I said the units on a same store basis are still down 30% from 2019 levels.
It's probably not surprising that we have some categories in some areas that are heavier in inventory than we necessarily need you've seen what's gone on in the industry with pontoons and does <unk>.
We're working very closely with all of our manufacturers in those categories and they are all very receptive to the dialogue about products that we need and how we're trying to get inventories in line, but likewise, there's categories, where we're still pretty far below where we need product in some of the real premium larger center console outboard and even some of the law.
<unk> product that we sell so it's an interesting time right now as the industry is rebid.
Rebuilding to some level of healthy inventory all the dealers are trying to stay at a very healthy inventory actually I think all of the manufacturers are recognizing that it's important to stay at that level too so well.
Well, we'll probably have some seasonal build I think will be a pretty good place overall from a unit inventory perspective, as we go through 2024.
Got it so your base case.
Secondly.
Wholesale retail from a union perspective over the next year.
I actually think in some categories, it's probably not the case, where we need product.
But certainly not to speak out of both sides went out there as other categories, where yes, we need to retail more than we're bringing in time periods.
And some of the categories have been softer during the year.
Got it that's helpful. I appreciate it thanks, Jeff Thanks James.
Thank you.
Next question comes from drew Crum.
Stifel. Please go ahead.
Okay. Thanks, Hey, guys. Good morning, so on your fiscal 'twenty for guidance just at a high level can you comment on what type of macro economic outlook, you're assuming in other words does your forecast embed a recession scenario or any other incremental macro headwinds and then I have a follow up.
No that's actually a good question.
We're not embedding a recession in our forecast we commented that generally status quo to what we've been experiencing over the last couple of quarters on a go forward basis, you look at how we ended fiscal 2024, which was a real strong close to the year and we were up against pretty tough comparisons in the.
Scott Solomon: Good morning, and welcome to the MarineMax Inc, fiscal 2020-4th quarter and full year conference call. Today's call is being recorded. At this time, all participants are in a listen-only mode.
September quarter last year, we had 11% same store sales growth that we posted 8% same store sales growth this quarter.
Unknown Executive: A brief question and answer session will follow the formal presentation.
Clearly the number of people that are still seeking the boating lifestyle is fairly active out there.
Scott Solomon: At this time, I would like to turn the call over to Scott Solomon of the company's investor relations firm, Sharon Merrill. Please go ahead, sir.
Through our fourth quarter.
Got it Okay, and then just maybe a housekeeping item can you tell us where maintenance repair storage and P&A revenue ended up for the quarter and the year.
Scott Solomon: Good morning, and thank you for joining us. Hosting today's call are Brett McGill, MarineMax's president and chief executive officer, and Mike McClam, the company's chief financial officer. Brett will begin the call by discussing MarineMax's operating highlights.
And on a related note as you think about adjusted gross margin and its impact on fiscal 'twenty. Four do you see this line sustaining in the mid <unk> range or is it reasonable to assume that it slips a little bit year on year.
Scott Solomon: Mike will review the financial results, and then management will be happy to take your questions. The earnings release and supplemental presentation can be found at investor.marineMax.com.
Yeah. Good questions, yes, so on a revenue mix perspective, so new and used boat sales were around 75% of our mix for Q4, but for the full year theyre down to around 72%. So the higher margin businesses actually have grown as we expected they would do around 28% for all of fiscal 2020.
Scott Solomon: With that, I'll turn the call over to Mike. Thank you, Scott.
Mike McClam: 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 Security's 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.
And then on your last point about margins.
I did not comment as to what do we really think margins are going to do for 2024, but we do think product margins on that.
On the full year basis will moderate some.
As they did in the fourth quarter of the year. This quarter. We just ended but we think overall, we'd still say consolidated margins are going to be in that mid 30 range I realize mid <unk> is a range of numbers, but will be in the mid 30 range for 2024.
Mike McClam: The company's ability to capitalize on opportunities or grow its market share, and numerous other factors identified in our Form 10K and other filings with the Securities and Exchange Commission. Also 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 metrics can also help investors who wish to make comparisons between MarineMax and other companies on both a GAAP and a non-GAAP basis.
Okay do you expect.
Mike McClam: A reconciliation of non-GAAP financial measures to the most directly comparable GAAP measures is available in today's earnings release.
Growth in finance and insurance service other higher margin categories that we have.
Within our numbers, which is traditionally what's happened over time.
Yes, Okay very helpful. Thanks, guys.
Thanks, Greg.
Thank you.
Our next question comes from Joel I'll Debello with Raymond James. Please go ahead.
Hey, guys. Good morning, I. Appreciate the question I guess first I wanted to follow up Mike on your commentary there regarding margins with respect to promotional activity.
Where do we stand today versus 2019, I mean, it seemed like things heat up quite a bit during the summer.
Brett McGill: With that, let me turn the call over to Brett. Thank you, Mike.
So would you expect that to continue or has your premium category, it's been a little bit more immune to some of those promotional pressures.
Brett McGill: Good morning, everyone, and thank you for joining us. I want to begin by thanking the entire Marine Max team whose outstanding customer service contributed to strong top-line growth in fiscal 2023. As evidenced by a record fourth quarter and full-year revenue, demand for the boating lifestyle remains strong. From our 81 retail locations to our manufacturing facilities, marinas, and super yacht operations worldwide, our team is focused on one mission to provide the world's best pleasure-boating experience.
I would I would comment that the promotional activity seems to be back in the industry at reasonable levels.
Probably still not quite as aggressive overall there are some categories that are certainly back to historic times with.
I would say in general promotional activities had been back down for sure in the last two quarters Star.
Starting maybe in the March quarter.
Mike go ahead.
Brett McGill: Through strategic acquisitions, we are broadening our presence well beyond retail dealerships to higher margin segments of the industry that encompasses all aspects of the boat ownership life cycle, and enables us to build deep customer relationships, relationships. Today, Mike and I are speaking to you from the Fort Lauderdale International boat show, where here representing all of our premium product line, as well as large displays for Frazier yachts, North of Benjonson and IGY Marines.
Yeah, a lot of new model innovations continue to come out by all the different manufacturers and that really helps preserve margin as well because you're introducing new products and new innovation, that's really helped as well.
Got it and maybe just to follow up on that in terms of the credit environment or are you seeing lenders getting a little more cautious with respect to our consumer loans and have you seen the percentage of cash buyers in your business pick up at all.
Brett McGill: We anticipate road bust attendance and we are particularly excited about the demand we continue to see in the premium segment, one of the critical drivers of our long-term growth strategy. Turning to our fourth quarter performance, we saw continued momentum from our strategic marketing and customer engagement initiatives, which drove an 8% increase in same-store sales. New and used both sales were up in dollars and units, with the premium categories again performing well.
Good question, Joe we get that.
Several times, a year and really the way the banks look at the credit worthiness of the buyers really hasnt changed obviously the rate environment has changed.
Brett McGill: However, we also saw better strength in categories that were lagging earlier in the year, like pontoons and turbos. Solid revenue gains in our higher margin businesses, like service and finance and insurance, contributed to the same-store sales increase. IGY Marines, which we acquired last October, contributed meaningfully to our revenue growth for the quarter and full year. From a cadence perspective, as we noted on our July call, the quarter started strong and generally stayed active through the entire quarter, with a strong close to September.
There was a period in this year, where we certainly saw.
The percentage of cash buyers ticking up but really the last couple of quarters. It seems like.
I know the public maybe is getting a little they don't like the rates with a little more accustomed to the rates perhaps in the the.
The percentage of cash buyers is receding still a little higher than it would have otherwise been receding.
Got it thank you.
Thanks, Joe.
Thank you.
Our next question comes from Brandon rollout with D. A Davidson. Please go ahead.
Good morning, Thank you for taking my question.
Just a quick one on your higher margin businesses could you talk about your outlook for growth in some of your higher margin categories throughout fiscal year 'twenty four.
Can I just yet the outlook for growth. So generally when you have relatively lower same store sales growth, which is what our forecast is.
Brett McGill: Although our full year adjusted EPS and adjusted EBITDA were in line with our most recent guidance, there's some additional work we need to do. We are looking specifically at SG&A expenses to evaluate more fully the latitude we have to reduce costs in areas that do not impact the customer experience. Clearly, inflation has affected operating costs, but we believe cost energies do exist and we will work to offset some of that inflation going forward.
It gives those higher margin businesses, a chance to catch up quite frankly over the last three or four years. We've had some pretty good same store sales growth in different periods.
Where the base of the revenue, we got to a certain level with as other businesses have been trying to catch up and when you have back to back years like 2023 and 2024.
With relatively low same store sales growth finance and insurance service brokerage other portions of our store operations that are in the higher margin businesses have a chance to catch up not to mention the ability of nordson, Johnson and Frazier and IAG wire in the other businesses. We owned two also continued to grow in 2024.
Brett McGill: Given rising inventory levels across the industry and a return to seasonality, we had anticipated some retail margin erosion in the quarter. However, we were pleased to see gross margins remain the mid-30s. Plus, for the full year, our gross margins are flat at about 35 percent. That speaks to our businesses' increasing diversification and resilience across market cycles, as well as our strategy of adding higher margin businesses. The sophisticated data and analytics are adding more precision to our marketing initiatives.
Demand in the service side of the business seems really strong still a lot of people parts and accessories, and then Marina revenue in Marina slipped at all of our locations.
Our defined the flip and rates are holding strong.
Great and just one follow up you guys are reporting from the Fort Lauderdale show any early takeaways from what you've seen internally in terms of demand I know it just started yesterday, but.
Brett McGill: For example, we are using intelligent customer and inventory tools to monitor demand in real-time. These tools enable us to drive marketing demand and inventory alignment. Our expanded strategic marketing capabilities are clearly driving improved retail results and driving market share growth. We are also gaining momentum with new wave innovations. More and more marine dealerships are registering to use BoZon.com, our digital retailing marine platform. In much the same way technology has streamlined the process of buying a car, BoZon is simplifying the customer experience of purchasing a boat. While still in the start-up phase, we expect a bright future for BoZon.
Any early takeaways. Thank you.
Yeah, great great traffic at the show for first day.
Little breeds helped the weather so that's good but yes generally seen good that very first day is always hard to get a good full read till you get deep into the weekend, but generally I think it's a good deal of the show.
Great. Thank you.
Thanks Brendan.
Thank you.
Our next question comes from Annick, the vault with B Riley Securities. Please go ahead.
Thanks, Good morning.
Questions I guess, one you talked about your M&A pipeline being robust maybe talk about.
Brett McGill: Turning to other recent highlights. Wightman.
Where youre seeing opportunities obviously.
Brett McGill: This month, Frazier Yacht's completed the previously announced very strategic acquisition of Add Atlanta Golden Yacht's or AGY. Based in Athens, AGY is one of Greece's leading charter management companies. The addition of AGY is consistent with our strategy of adding high quality businesses that enhance our margin profile. AGY complements and greatly expands our super Yacht services business in Greece, a major charter destination and home to one of the largest super Yacht fleets in the world. Our M&A pipeline remains active and we continue to evaluate potential opportunities that align with our strategic priorities.
I think you know kind of what areas you're looking at what is the competitive environment.
Four of those acquisitions I know it's getting.
It's increased recently, but what do you see the competitive wise when youre looking at targets.
Who else is involved there and is there a lot of other parties you tendency will be the only one on the table.
Okay.
I can start off with making a comment I mean, the types of companies that we're looking at are consistent really with what we've looked at in the past to a degree. There's dealerships. We are really focused in higher margin dealerships, though which would be those with a storage component. Good management. Good brands all of that and so we're still in discussions with dealerships.
We still are looking at the Super yacht services sector.
Brett McGill: A number of investors have asked us about the near-term industry outlook and light of the current economic environment. From a macro perspective, we are approaching fiscal 2024 with appropriate caution, but are encouraged by how 2023 ends. Nonetheless, we realize much uncertainty faces the world. That said, we continue to focus on the areas within our control by reviewing expenses, deploying our capital wisely and capturing revenue synergies.
Acquired a July to begin this fiscal year, which is a great business actually an important business to help grow our overall business in Greece.
Marinas.
In the U S and also internationally.
Where they make sense and where they have a re.
Usable returned from a tour a company like us.
And just other businesses that are.
Involved in marine that have a higher margin profile with a good team and a good strategy that makes sense to kind of bring into.
Brett McGill: As we look ahead to 2024, we are excited to build upon this foundation and deliver on our commitment to providing unparalleled voting and yachting experiences to a growing number of customers worldwide.
Our family.
And again the competitive environment for those.
Obviously when you are talking about marine is there is there is.
Mike McClam: With that update, let me turn the call over to Mike for a financial recap. Mike? Thank you, Brett.
A lot of people around the world that are attracted to marinas with the dealerships that were looking at in terms of the premium end and the the relationships usually it's not a very competitive environment. It's usually we've known the folks for a long long time and this is the case that it's always been this way.
Mike McClam: I also want to thank our team for their efforts, which produced a strong fourth quarter and record revenue in fiscal 2023. In the quarter, we grew revenue 11% to 595 million, driven by an 8% increase in same-store sales. The same-store improvement was driven roughly 50-50 by units and average unit selling price growth. Consistent with our commentary all year, our premium brands continue to outshine any price point categories. However, as Brett noted, we did see additional strength this quarter from traditional seasonal boats like pontoons and tow boats, two categories that lag earlier in the year.
And same with some of the other businesses, where we have developed a reputation as a good place to two for a for a team and a company to belong and to become a part of it.
Some of these acquisitions, where we're talking to companies there is not a crowded field of people that we're talking to that are also talking to.
And then as a follow.
Follow up question.
You noted a lot of pressure from higher interest rates and interest costs and a four plant. If you think back to where you were a couple of years ago.
He actually got you use your cash balance it takes four planes Nancy busy down before on a balanced basis down to zero you are sitting on a healthy cash balance now than you had been for the past few quarters, who are familiar what's the kind of the appropriate level of cash to keep on hand relative to what you want to have kind of leveraging floorplan on the inventory side.
Mike McClam: Geographically, we saw positive trends in most markets with particular strength in Florida and the Midwest. Gross profit of 204 million was up 7 million from last year, while gross margin was down year over year to 34.3%. As expected, product margins moderated as inventory levels in the industry have increased. Generally, product margins approached pre-pandemic levels while our consolidated margins remain in the mid-30s. As Brett said, the strength of our consolidated margins is a testament to our strategy of adding higher margin businesses.
Yeah. Good question Derrick I mean, obviously you can imagine we're a net debtor and actually we have been for most of our 26 years that we've been public and has a net debt or throughout the quarters. This is not a surprise probably anybody on the phone.
Cash is zero and pay down our floor plan and save on the interest on that and then at that quarter and like every other company does we.
Mike McClam: S-GNA expenses were up 16% to 169 million. Well over half the dollar increase was from the I-G-Y, mid-coast, boats on, and CNC acquisitions we completed this year. However, we did see increases from various categories such as health insurance, property insurance, inventory maintenance, and marketing to name a few. Andrew. Clearly, some of the costs drove top line growth, but as Brett mentioned, we are exploring various opportunities to improve synergies internally, as well as areas for cost savings, while not impacting the experience of the customer. The interest expense increased by 14.8 million, reflecting rising interest rates, increased inventory, and higher long-term debt associated with IGI. Given the increase in rates, floor play and interest was incrementally higher than we expected.
We add the cash the balance sheet. So everybody realizes we have a lot of liquidity, which we do but we're paying down debt every single day, all the time, except for right at quarter end. So.
We're taking advantage of the.
Of the of the cash that we've generated.
Got it thanks, Mike.
Thank you Eric.
Thank you.
Our next question comes from the line of Michael Swartz with Lewis. Please go ahead.
Hey, guys. Good morning. This is Lucas on for Mike could.
Could you talk a little bit about the your expected cadence of.
Average selling price in our fiscal 'twenty four.
Yeah in 2024.
Overall in the guidance, we commented that we expect the industry to.
Call It modest unit growth flattish to slight unit growth and we would have low single digit.
Mike McClam: On the bottom line, we generated gap net income of more than 15 million, or 67 cents per diluted share, compared with net income of 38.4 million, or $1.73 per diluted share last year. Our adjusted EBITDA for the quarter was 43 million, compared with 68 million last year, primarily due to lower net income and higher floor plan interest expense, which accounted for nearly 8 million of the difference. For the full year, gap net income was 109 million, or $4.87 per diluted share, and we generated adjusted net income of 117 million, or $5.21 per diluted share, in line with our guidance.
Maybe as much as mid single digit same store sales growth you can assume that the same store sales growth was roughly 50 50 between maybe units an ADP or could lean more towards AEP. We've.
We've had nice AEP growth for a number of years and with the new models that Brett talked about and with what our manufacturing partners are providing.
There is a great product they tend to have more options and also maybe a little bit on the larger side in the more premium side, which does drive the AEP higher overtime.
Okay Perfect and then just you also commented on driving savings in SG&A any additional color to share there, maybe some quantification or where it's coming from.
Mike McClam: Our full year adjusted EBITDA was in line with guidance at 239 million, compared with 310 million last year. With floor plan interest expense, accounting for roughly 25 million of the difference. Our balance sheet remains healthy as we ended the year with more than 200 million in cash. Inventories at year end increased 813 million, which as expected was up sequentially from June. On a same-store basis, unit inventories are in the neighborhood of down a little over 30%, compared with September 2019 levels.
All I had thank you.
The commentary in the script, we're digging in and analyzing opportunities for savings I will comment we did have in the quarter of a handful of.
Categories that increased slightly one was up more than slightly those health care insurance just the number of unfortunate claims that hit our stop loss.
Maximums, but.
So we're digging into things and trying to see where we can get some synergies in the organization and also some potential cost savings, but we don't have an answer today.
Mike McClam: Looking at liabilities are short-term borrowings, which is our floor plan financing, rose largely due to increased inventories and the timing of payments. As expected, customer deposits declined sequentially from June to 82 million, reflecting our ability to better meet demand as inventory becomes available. Our liquidity position remains strong. A year end debt to EBITDA net cash was less than one. We have additional liquidity in the form of unlovered inventory plus available lines of credit that totaled approximately 200 million.
Okay. Thank you that's all I had.
Thank you.
Thank you.
Question comes from the line of John Healy with Northcoast Research. Please go ahead.
Thanks for taking my question guys and congrats on the strong close to the year. Just one question from me just on the SG&A side I think you mentioned during the prepared remarks that you were looking at some opportunities there to improve the customer experience but.
You can ask your SG&A opportunities outside of things that would impact the customer experience is there a way you can maybe texture lies that a bit for us kind of maybe what some of the bigger opportunities are there.
Mike McClam: Starting the guidance, I will comment first on our thoughts regarding the industry unit trends for our fiscal year 2024. For many months of the upcoming year, the year-over-year unit trends are relatively easy comparisons in terms of the industry's ability to post either unit growth or a minimal decline. Assuming no significant economic downturn, but also no major improvements, we believe the industry will be flatished to up slightly in our fiscal year. We also believe that the premium end will continue to outperform price point segments.
How much runway there is on that and is it more on the traditional business or is it more on the Marina side and some of these kind of adjacencies that you've extended to recently.
Yes, yes ill comment first just at a high level. There is clearly an opportunity with our Super yacht I G Y in that segment to create more synergy which does it.
Cost savings synergies and a lot of cases, which were digging into <unk>.
Aggressively right now and then just from the day to day operations all of our stores that have been around a long time, there's always things to dig into but there is inflation and all of that which is some of that can be mitigated in some cases it might be one and now that you have.
Mike McClam: We expect the industry to be back in full seasonal mode for all of fiscal 2024. This means the December quarter will be by far the smallest quarter of the year, followed by seasonally strong recorders through the SELEC- season. We also expect inventory to modestly build seasonally as it has historically. Based on our industry unit expectations, we expect low to mid-single digit same-store sales growth in 2024. At the same time, we do expect product margins to moderate as we continue to reap the long-term benefits of the higher margin strategy we have successfully executed. It's also worth noting that in the December 22 and March 23, we had lower interest costs driven by lower rates and lower inventory than we will have in the same quarters this fiscal year.
That was good.
We don't have all the answers today, but generally where Brett just said is what we're looking into.
Alright, thank you.
Thank you.
Question comes from the line of David Macgregor with Longbow Research. Please go ahead.
Yes.
Good morning. This is Joe Nelson on for David I, just have a one quick one for you guys. Just wondering about the used boat market. Just wondering what you guys are seeing in terms of values and in terms of demand there.
Yeah.
Both markets are strong holding up well.
Don't see any significant.
Wild action on price changes and pricing is holding up well.
Mike McClam: Factoring all this in, we expect our adjusted net income for share to be in the range of $4.50 to $5 per deluded share for fiscal 2024 with adjusted EBITDA to be in the range of $225 million to $250 million. Higher depreciation and stock-based compensation as well as additional shares in the denominator adversely impacts EPS versus adjusted EBITDA. We are using an expected tax rate of approximately 27% and a share count of 23.1 million shares in our assumptions.
The marketplace, new boats are higher and higher prices for that helps.
It's been a good part of our business.
Continue to focus on it.
And then any notable trends within mix within the used boat market.
No not that I can.
Call out for us are used boats or just the trades that were taking we don't speculatively buy a ton of used boats.
And there was a time period over the last couple of years, where there just wasn't a whole lot of people trading boats and it's nice that we're getting some additional trades down.
Mike McClam: Looking at current trends, October last year was aided by boats that pushed from September due to Hurricane Ian. This year, October currently looks to be flatish to that strong comparison as people continue to seek the boating lifestyle.
We expect that business is going to be sort of back to historical performance levels going forward.
Got it alright, that's all for me thanks.
Thank you.
Brett McGill: With that, I'll turn the call back over to Brad for closing comments. Brad? Thanks, Mike. Despite a challenging market environment, we executed well in fiscal 2023, delivering record revenue and strong growth margins.
Thank you.
As there are no further questions I will now hand, the conference over to Mr. Brett Mcgill for closing comments.
Well. Thank you everybody for joining us today, and we will update you on our next call and if you are in the Lauderdale area. Please come on down to the show and take a look at some of the great products we have.
Brett McGill: While the retail boating industry continues to see a return to historical seasonality, our diversified revenue stream and our position in the premium segment of the retail market creates a sustainable competitive advantage for Marine Mac. Our strategic initiatives over the past several years continue to improve our long-term margin profile and generate new growth opportunities. Marine Mac is a diversified global marine company providing an international customer base with the products, services, and experiences to enrich their journey on the water. We remain committed to maintaining Marine Mac's financial strength in building long-term shareholder value by pursuing opportunities to drive profitable growth.
Talk to you soon.
Thank you the conference of Marine Max Inc. Has now concluded. Thank you for your participation you may now disconnect your lines.
[music].
Unknown Executive: And with that operator, let's open up the call for questions. Ladies and gentlemen, we will now be conducting a question and answer session. If you would like to ask a question, please press star and watch on your telephone. A confirmation tone will indicate your line is in the question queue. You may press star and two if you would like to remove your question from the 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 and follow up.
James Hardiman: Russell of question, comes from James Hardiman with Sidney, please go ahead. Hey, good morning. Thanks for taking my call. So Mike, you talked about the comparison. Maybe walk us through it seems like maybe the December quarter should, you know, succeed maybe the best growth of the year. Maybe that's it's easiest to predict because it's most current. But that, um, all year loading with single digit, same store sales, how do you think about that progression over the course of the year?
Mike McClam: Yeah, great question, James. The, yeah, for sure, from the industry perspective, the December quarter does appear to be the easiest comparison with the unit declines on a year-over-year basis. But even if you go all the way into January, February, March, April, and even into May, the comparisons are relatively easy, then they're mixed when you go through the rest of our fiscal year, June, July, August and September. So I, you know, as I said on the call, sure seems like, you know, absent a recession, many of those months have the ability to post positive unit gains.
Mike McClam: And, you know, historically, if the industry has unit growth, we traditionally outperform the industry. And then you get a migration of average human selling price, which is, you know, kind of the basis of our, you know, same store sales growth for 2024. Got it. That's helpful.
Mike McClam: And then on the inventory question, I think you touched on a little bit of it in the, in the prepared remarks, but can you just bridge last year's inventory number and this year's inventory number specifically as we think about sort of acquired inventory, but then also units versus dollars. And as we think about how you're thinking about ordering patterns and inventory going forward, are we out of place where, where you would generally think about a unit in and a unit out, right, wholesale, equalling retail.
Mike McClam: Or do you anticipate lowering inventory going to like for like basis or building inventory going to like basis. So, let me, let me try to take all those questions if I can remember in the, on a year or a year basis, there really isn't a whole lot of acquiring growth in terms of acquisition. The CNC acquisition was a smaller one, so there's some from that. A little bit, I guess, from, you know, in terms of the balance you'd inventory from, you know, IGY that has fuel and stuff like that, but the bulk of the growth is just building of inventory from last year, which was a relatively low level.
Mike McClam: So, skewed by dollar growth quite frankly, so the units on the same store basis are still down 30% from 2019 levels. You know, it's probably not surprising that we have some categories in some areas that are heavier inventory than we necessarily need. You've seen what's gone on in the industry with pontoons and toes. Tobas were working very closely with all of our manufacturers and those categories. And they're all very receptive to the dialogue about, you know, products that we need and how we're trying to get inventories in line.
Mike McClam: But likewise, there's categories over still, you know, pretty far below and where we need product and some of the real premium larger center console out the words, even some of the larger product that we sell. So, it's an interesting time right now. The industry is rebuilding to some level of healthy inventory. All the dealers are trying to stay in a very healthy inventory. Actually, I think all the manufacturers are recognizing that it's important to stay at that level too.
Mike McClam: So, while we'll probably have some seasonal build, I think we'll be in a pretty good place overall from the unit inventory perspective as we go through 2024. So your base case is effectively wholesal equals retail from a unit perspective over the next year. You know, I actually think in some categories, it's probably not the case where we need product, but certainly not to speak out of both sides without, there's other categories where yeah, we need to retail more than we're bringing in in time periods and some of the categories have been softer during the year. Yeah, that's helpful. Appreciate it. Thanks, James. Thank you.
drew Crum: My next question, down from Drew Crum, which people, please go ahead. Okay, thanks.
drew Crum: Hey guys, good morning. So on your 24 guidance, just at a high level, can you comment on what type of macroeconomic outlook you're assuming? In other words, is your forecast in bed or recession scenario or any other incremental macro headwomen? And then I have a follow up. Now Drew, that's actually a good question. We're not embedding a recession in our forecast. We commented that in a generally status quo to what we've been experiencing, you know, about the last couple of quarters on a go-forward basis.
drew Crum: You know, you look at how we ended just goal 2024, which was a real strong close to the year. And we were up against pretty tough comparisons in the September quarter last year. We had 11% syncs for sales growth and we posted 8% syncs for sales growth this quarter. So, you know, it's clearly the number of people that are still seeking the building lifestyle is fairly active out there, you know, through our fourth quarter.
Mike McClam: Okay, and then maybe a housekeeping item. Can you tell us where maintenance repair storage and PNA revenue ended up for the quarter in the year? And, you know, on a related note, as you think about adjusted growth margin and its impact on fiscal 24, do you see this line sustaining in the mid-30s range? Or is it reasonable to assume that it slips a little bit year on year? Thanks. Yeah, good questions.
Mike McClam: Yeah, so on a revenue mix perspective, so new and use boat sales were around 75% of our mix were cute for, but for the full year, they're down to around 72%. So, the higher margin businesses actually have grown as we expected, they would do around 28% for all of fiscal 2023. And then on your last point about margins, you know, I did not comment as to what do we really think margins are going to do for 2024, but we do think product margins on the full year basis will moderate some as they did in the fourth quarter, the quarter we descended, but we think overall we'd still say consolidate margins are going to be in that mid-30 range.
Mike McClam: I realize mid is a range of numbers, but we'll be in the mid-30 range for 2024. We do expect growth and finance and insurance service, other higher margin categories that we have within our numbers, which is traditionally what's happened over time. Yep. Okay, very helpful. Thanks, guys. Thanks, Rick.
Unknown Executive: Thank you.
Joe Altobello: Our next question comes from Joe Altobello, with Raymond Chamst, please go ahead. Hey guys, good morning. Appreciate you question.
Mike McClam: I guess first I want to follow up Mike on your commentary there regarding margins. With respect to promotional activity, you know, where do we stand today versus 2019? It may seem like things heat up quite a bit during the summer. So would you expect that to continue or as your premium category has been a little bit more immune to some of those promotional pressures? I would comment that the promotional activity seems to be back in the industry at reasonable levels, probably still not quite as aggressive overall.
Mike McClam: There are some categories that are, you know, certainly back to historic times. But I'd say in general promotional activities have been back now for sure in the last, you know, two quarters, starting maybe in the March quarter. I might do a lot of new model innovations continue to come out by all these different main factors. And that really helps preserve margin as well because you're introducing new products and new innovations. That's really helped as well. Got it.
Mike McClam: And maybe just to follow up on that in terms of the credit environment, are you seeing lenders getting a little more cautious with respect to, you know, consumer loans? And have you seen the percentage of cash buyers in your business pick up at all? Good question, Joe. We get that, you know, several times a year. And really, the way the banks look at the credit worthiness of the buyers really hasn't changed.
Mike McClam: Obviously the rate environment has changed. You know, there was a period in this year where we certainly saw the percentage of cash buyers ticking up. But really the last couple of quarters, it seems like the public maybe is getting a little bit. And they don't like the rate, but the little more custom to the rates perhaps and the percentage of cash buyers is, is receding, you know, still a little higher than it would have otherwise been but receding. Got it. Thank you.
Brandon Roll: Any other questions come from Brandon Rola with DA Davidson. Please go ahead. Good morning. Thank you for taking my question. Just a quick one on your higher margin businesses. Could you talk about your outlook for growth and some of your higher margin categories throughout fiscal year 24? Can I just get the outlook for growth. So generally when you have relatively lower same store sales growth, which is what our forecast is, it gives those higher margin businesses a chance to catch up quite frankly.
Brandon Roll: And you know, the last three or four years, we've had some pretty good same store sales growth in different periods where the base of the revenue got to a certain level with those other businesses have been trying to catch up. And when you have back to back years, like 2023 and 2024, with relatively low same store sales growth finance insurance service brokerage, other portions of our store operations that are in the higher margin businesses have a have a chance to catch up, not to mention the ability of North Open Johnson and Frazier and IG wire and the other businesses.
Brandon Roll: We are to also continue to grow in 2024 and demand in the service side of the business seems really strong still. A lot of people, parks and accessories and then you know, Marina revenue and Marina slips at all of our locations. It's hard to find a flip and rates are holding strong. Great. Just one follow-up you guys are reporting from the Fort Lauderdale Show. Any early takeaways from what you've seen in terms of demand?
Brandon Roll: I know it just started yesterday, but any early takeaways. Thank you. We have great traffic at the show for first day. Little breeze helped the weather, so that's good. But yeah, generally seems good. That very first day is always hard to get a good full read to get deep into the weekend, but generally I think it's a good seal at the show. Great. Thank you.
Eric Wold: Our next question comes from Eric Wold with B. Riley Securities. Please go ahead. Thanks. Good morning. It's a couple of questions. It's one that you talked about your M and A pipeline being robust. Maybe talk about where you're seeing opportunities, obviously, in the specific areas you're looking at. What is the competitive environment for those acquisitions? I know it's increased recently, but what do you see as competitive-wise when you're looking at targets and maybe who else is involved there? Is there a lot of other parts you tend to still be the only one on the table?
Brett McGill: I can start off by making a comment. I mean, the types of companies that we're looking at are consistent really what we looked at in the past two degrees. There's dealerships. We're really focused on higher margin dealerships, though, which would be those with a storage component, you know, good management, good brands, all of that. And so we're still in discussions with dealerships. We still are looking at the super yacht services sector.
Brett McGill: We acquired AGI to begin this fiscal year, which is a great business. Actually an important business to help grow our overall business in Greece. Marinas in the US and also internationally where they make sense and where they have a reasonable return from a company like us. And just other businesses that are involved in marine that have a higher margin profile with a good team and a good strategy that makes sense to kind of bring into our family.
Brett McGill: And a competitive environment for those? You know, obviously when you're talking about marinas, there's a lot of people around the world that are attracted to marinas with the dealerships that we're looking at in terms of the premium and the relationships. Usually it's not a very competitive environment. And then it's usually, you know, we've known the folks for a long, long time. This is the case that it's always been this way. And in saying what some of the other businesses where we've developed a reputation as a good place to for a team and a company to belong and to become a part of. Whereas in some of these acquisitions where we're talking to companies, there's not a crowded field of people that we're talking to or that are also talking to them.
Mike McClam: And then the poll of question. Obviously, you know, a lot of pressure from higher interest rates and interest costs and the floor plan. If you think back to kind of where you work a couple of years ago. In the end of the pandemic, you actually got, you know, to use your cash balance, it takes a floor plan, advancing, basic down or four of that balance, basic down to zero. Paul, you're sitting on a healthy cash balance now and you have it in the last few quarters who are really, what's the kind of the appropriate level of cash to keep on hand relative to what you want to have?
Mike McClam: I'm going to leverage you floor plan on the inventory side. We're going to be able on the interest on that. And then at that quarter end like every other company does, we, you know, we add the cash to the balance sheet so everybody realizes we have a lot of liquidity which we do, but we're paying down that every single day all the time except for right at quarter end. So we're taking advantage of the of the cash that we've generated. Got it. Thanks Mike. Thank you.
Lucas Servera: Our next question comes from the line of Michael Swartz with tourist securities. Please go ahead. Hey guys, good morning. This is Lucas on from Mike. Could you talk a little bit about the expected cadence of average selling price in fiscal 24? Yeah, in 2024, we, overall on the guidance, we, we commented that we expect the industry to have, you know, call it modest unit growth, flytist, like unit growth. And we would have low single digit, you know, to maybe as much as mid single digit, same store sales growth.
Lucas Servera: You can assume that the same store sales growth is roughly 50, 50 between maybe minutes and eight. Or could lean more towards AUP. We've had nice AUP growth for a number of years and with the new models that Brett talked about and with what our manufacturing partners are providing. There's great product. They tend to have more options and also maybe a little bit on the larger side and a more premium side, which does drive the AUP higher over time.
Mike McClam: Okay, perfect. And then just you also commented on driving savings in FGNA, any additional colors to share there, maybe some quantification or words coming from. That's all I had. Thank you. Now, you know, the commentary in the script are we're digging in and analyzing opportunities for savings. We, I will comment we did have in the quarter of the handful of categories that increase. Slightly one was up more than slightly that was healthcare insurance.
Mike McClam: Just a number of unfortunate claims that it are spot loss. Maximums, but now we're digging into things and trying to see where we can get some synergies in the organization and also some potential cost savings, but we don't have any answer today. Okay, thank you.
Unknown Executive: That's all I have. Thank you.
John Healy: Our next question comes from the line of John Healy, but not close to research. Please go ahead. Thanks. Thank you. My question, guys.
Brett McGill: I congrats on the strong close of the year. Just one question from me just on the SGNA side. I think you mentioned during the prepared remarks that you're looking at some opportunities there to improve that customer experience, but you're looking at SGNA opportunities outside of things that would impact the customer experience. Is there a way you can maybe textualize that a bit for us, kind of maybe what some of the bigger opportunities are there, you know, how much runway there is on that? Is it more in the traditional business or is it more on the marine side and some of these kind of adjacencies that you've extended to recently?
Mike McClam: Stanley. Yeah, I'll comment first just at a high level. There's clearly an opportunity with our super yacht, IGY, and that segment to create more synergy, which does, you know, cost-saving synergies, in a lot of cases, which we're digging into, you know, aggressively right now. And then just from the day-to-day operations of all of our stores that have been around a long time, there's always things to dig into. But, you know, there is inflation in all of that, which is, you know, some of that can be mitigated, and some can't. Mike, you want to? No, you, that was good. There's, we don't have all the answers today, but generally, we're just setting up what we're looking into.
Unknown Executive: Great, thank you. Thank you.
David Macgregor: Our next question, done from the line of David MacGregor, but this is all full research. Please go ahead.
David Macgregor: Good morning. This is Joe Nolan on for David. I just have a one quick one for you guys. Just wondering about the used vote markets. Just wondering what you guys are seeing in terms of values and in terms of demand there. Yeah, you know, used vote markets are strong, hold enough well. You know, don't see any significant, you know, wild action on price changes, pricing is hold enough well, you know, in the marketplace, new votes are higher, higher in prices, and that helps.
David Macgregor: So, but it's been a good part of our business and continue to focus on it. And any notable trends within mix within the used vote market? No, not that I can call out, you know, for us, our used votes are just the trades that we're taking. We don't speculatively buy a ton of used votes. And there was a time period of the last couple of years where there just wasn't a whole lot of people trading votes in it. It's nice that we're getting some additional trades down. We expect that business is going to be sort of active, historical, performance levels going forward.
Unknown Executive: Yeah, all right, that's all for me. Thanks.
Unknown Executive: Thank you.
Brett McGill: As there are no further questions, I would now hand the conference over to Mr. Brett McGill for closing comments. Well, thank you everybody for joining us today and we'll update you on our next call if you're in the Lauderdale area. Please come on down to the show and take a look at some of the great products we have. Just talk to you soon. Thank you.
Unknown Executive: The conference of Marine Max Inc has now concluded. Thank you for your participation.
Unknown Executive: You may now disconnect your lines.