Q3 2019 Earnings Call
Good morning, and welcome to the Marine Max incorporated 2019 fiscal third quarter earnings Conference call. Today's conference is being recorded.
This time I'd like to turn the call over to Brad Cohen.
Our Investor Relations. Please go ahead Sir.
Thank you operator, good morning, everyone and thanks for joining this discussion of Marine Max This third quarter.
Earnings call Im sure that Youve all received a copy of the press release that went out this morning, but if not please call Linda Cameron at 70, 75 to 117 12, and she will mail one to right away.
I would now like to introduce the management team to Marine Max Mr., Brett Mcgill President and Chief Executive Officer, Mr., Mike Mclamb, Chief financial officers of the company.
Management will make a few comments about the quarter and then be available for your questions and with that let me turn the call over to Mr., Mike Mclamb, Mike.
Thank you Brad good morning, everyone and thank you for joining this call.
Before I turn the call over to Brett I'd like to tell you that certain of our comments are forward looking statements as defined by the private Securities Litigation Reform Act.
These statements involve risks and uncertainties that could cause actual results to differ.
Purely from expectations.
These risks include but are not limited to the impact of seasonality and weather general 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 with that in mind I'd like to turn the call over to Brett right.
Thank you, Mike and good morning, everyone I want to start out by saying how proud I am of our team's ability to produce 3% same store sales growth and even greater unit growth in a quarter in which the industry clearly had its challenges.
The industry data for the month of June which showed a 14% decline combined with the choppy data throughout the quarter is evidence that trends worsened throughout the quarter to generate the top line growth in such an environment required us to be proactive and invest more in promotions and marketing, which drove sales but at a cost.
Early indications are that we continued our long track record of market share gains. Additionally, we did it well incrementally raising gross margins truly a testimony to our strategy teen brand and strong execution.
Heading into this fiscal year industry expectations were for unit growth in the mid single digits.
We built our business plan with that understanding as such we made investments and increased certain cost to drive even greater growth.
Now nine months in the industry is tracking negative 6% through June .
Failing the uncertainty we increased marketing spend even greater provide incremental growth in them in market share, which usually leads to repeat sales in the future.
Because of seasonality, it's challenging to react fast enough when trends decline like they have.
June as a large quarter for the industry and during this busy season are required resources escalate as do sales and deliveries.
As we work through the September quarter, and look to fiscal 2020, we will that we will be better aligning costs with industry conditions.
Despite the challenging environment in the quarter there are many positive things to focus on.
I already mentioned the year over year unit growth, which is outstanding.
Generally we did not see significant discount.
Most dealers and manufacturers, we have spoken to plan to incrementally reduce inventories as we work through 2020.
Our margins were generally solid throughout the quarter.
Additionally, we continue to make improvements in our higher margin businesses like finance and insurance service parts and accessories brokerage and marine.
As we increase those businesses as a percentage of revenue they helped to drive higher consolidated margins.
While we felt the tougher environment, we did create unit growth across many brands segment end markets.
In terms of dollars, Florida continues to shine because of the larger boat business, we generally do in the state.
Another bright spot is that that this is the fourth consecutive quarter of positive same store sales following the discontinuance of the sea Ray larger boats 40 feet in there.
Our team has done an amazing job embracing other brands and categories to drive growth.
Given that those larger sea rays made up over 10% of our revenue combined with the tougher environment. It is especially noteworthy to point out our same store sales growth in this quarter.
Outboard power product is still preferred and most of our markets. It does seem that the more premium the product the larger the product the stronger demand.
The technology around boats, including outboard engines is helping to Pete consumer interest.
Joystick technology integrated dashboards and systems telematics and other enhancements are all making boating more enjoyable.
In this regard innovation that continues to be introduced in the marketplace should be a positive for the industry.
Perhaps the brightest spot is the fact that we delivered earnings growth in this environment and increased our earnings per share to 84 cents.
Along those lines, we produced a significant amount of cash shown by our strong balance sheet.
Regarding inventory, we are comfortable with the mix and age yet acknowledged that we will align the dollar level with industry demand as we work through 2020.
Following up on the mid April acquisition of sale and ski and San Antonio and Austin, Texas. The integration has gone very well.
Their culture and practices were very similar to ours and they are performing well as part of our team.
We recently announced the merger with the Premier Super Yacht Services company in the World Frazier gap, which is based in Monaco.
Frazier, which was owned by the asthma phonetic group provides brokerage charter charter management management improved placement services yacht owners around the world with their two largest operations being in Monaco in Fort Lauderdale.
We are excited to have teamed up with Frazier.
This acquisition is exactly the type of significant opportunity that marine Max can make given our strong balance sheet and proven ability to successfully integrate and source accretive acquisition.
We also are excited to expand our international capabilities and geographic reach potentially unlocking other future opportunity.
We are pleased the entire Frazier.
Remaining in place and will continue to operate and manage its activity.
We believe we can learn from what they do and adopt some of their practices in the rest of our operations to enhance the brokerage services and related activities.
That our stores perform today.
Were also glad to be able to expand with binetti class of yachts, which was executed at the same time as the Frazier merger.
But any class starts generally at 95 feet and goes to 150 feet. If it will provide very good migration choice for our current customers, who outgrow the size of products. We currently offer.
We have the United States Encana is our market, which gives us a strong area to create future sales.
But any class gives us another brand with a very large market from which to operate in addition that gallion Azimut Abbvie, our ocean Alexander and Akila.
Let me share that our focus on service and marinas is an area that continues to gain momentum.
We have seen good progress in our efforts to improve training for our service team, which is being reflected in increased margins and growth.
Additionally, the investments we've made in marina facilities over the last several years, our adding stable storage cash flows while also adding to gross margin expansion.
We will continue to stay focused on both of these opportunities.
And with that update I'll ask Mike to provide more detailed comments on the quarter, Mike. Thank you, Brad and good morning again, everyone.
Let me start by thanking our team for their growth they generated in what was a tough quarter for the industry.
For the quarter, we grew revenue over 6% to 384 million driven by 3% same store sales growth.
This growth was on top of 8% last year.
As Bret mentioned comparable new unit sales were up in the low mid single digits, which means that our same store sales growth was driven by units rather than an increase in our average unit selling price.
We believe we again gained market share in the quarter.
Our larger boat business was fine but units outpaced it.
Our gross margin was up about 40 basis points.
The increase was driven by stable margins on products combined with increases in our higher margin businesses.
Selling general and administrative expenses were up about $6 million.
When removing the non recurring expense item last year.
The dollar level of expenses, partially up because the sales ski merger as well as expectations that we'd be driving even greater revenue plus normal increases given the actual increase in revenue.
As Bret said, we are working to better align expenses with the industry demand.
For the quarter interest expense increased due to increased borrowings from additional inventory.
Our pre tax earnings were up modestly to about $26 million with earnings per diluted share increase and 84 cents, which is up over 6% compared to an adjusted 79 cents last year.
Turning to our balance sheet at quarter end, we had about $72 million in cash.
But as a reminder, we have substantial cash in the form of Unlevered inventory.
Our inventory levels at quarter end were up 15% to $434 million.
About a third of the percentage increase is due to the acquisition of sales ski.
So why the inventories elevated higher than sales trends, it's not as bad as the absolute did increase would indicate.
Nonetheless, as Bret said, we are already working with our manufacturers to align inventory with industry demand.
The aging and mix or of our inventory are in good shape.
Looking at our liabilities, our short term borrowings increased to $290 million due to additional inventory.
Customer deposits went up the best predictor of near term sales because they can be lumpy due to the size of the deposits and whether trade is involved or not are up 6% over last year.
Our current ratio stands at 1.48, and our total liabilities to tangible net worth ratio is 1.16. Both of these are outstanding balance sheet metrics.
Our tangible net worth was $331 million or $14.52 per diluted share.
We own about half of our locations, which are all debt free we have no additional long term debt our balance sheet is a strategic advantage that allows us to capitalize on opportunities as they arise.
Now turning to our annual guidance.
Given the recent worsening of industry trends and the likelihood that challenges in the industry will persist.
We believe it would be prudent to lower our guidance for fiscal 2019 earnings per share to $1.60 to $1.70.
Obviously, we're going to strive to do better.
Our guidance considers that we're up against 22% same store sales growth in our fourth quarter last year and factors and the contribution from our sales ski acquisition made earlier in the year and now includes a few cents from the Fraser acquisition this quarter.
Our guidance now assumes same store sales will be flattish to up slightly on an annual basis.
We believe this further reduction in same store sales expectations makes sense.
Until we start to see industry trends improve going forward for our key categories.
Our guidance uses a share count of around 23 million diluted shares.
It also uses an expected 2019 tax rate of 27% and excludes the impact from other potential acquisitions, we may complete.
As for current trends July should finish up over last year.
Our team continues to outperform.
We are continuing to be aggressive with promotions and marketing efforts to drive sales.
However, we need to produce solid results in the meaningful bones of August and September still.
With those comments I'll turn the call back over to Brad for some closing comments.
Thank you Mike.
As we move forward now as an even more global company with our recent Frazier acquisition.
As a team we are committed and focused to enhance our results.
We will also continue to pursue and evaluate additional opportunities to complement the business long term.
We believe potential pent up demand is still out there and we will utilize unique marine Max event to drive sales to exceed our customer service expectations.
Again, one of the Differentiators of Marine Max is our commitment to ensure our customers are enjoying time in the water with their family and friends.
As we have proven this investment ultimately results in loyalty and future business that yield ongoing market share gains.
Externally, we will pursue opportunities for growth, which includes acquiring great dealers and bringing them into the marine Max family and strategic real estate acquisition, specifically marinas that can help drive our overall business more effectively.
Additionally, we will stay disciplined in order to improve our leverage as we utilize our digital strategy increased efficiency as we more effectively right size, our cost structure in the coming quarters and as we further grow the reach of our higher margin businesses.
Ultimately getting more customers on the water with their friends and family through our differentiated customer approach will help marine Max drive future new customers and will result in even happier existing customers.
So with that operator, let's open up the call for questions.
Thank you, ladies and gentlemen, if you wish to ask a question at this time. Please begin by pressing star one on your telephone keypad. Please ensure the mute function on your telephone is switched off to allow your signal to reach a settlement.
Again, Thats star one to ask a question.
We'll take our first question from Joe Altobello of Raymond James. Please go ahead.
Thanks, Hey, guys good morning.
Yes of course, and I guess, I guess I guess for Brett you mentioned earlier that you don't think the industry.
By and large is discounting mode.
Yes, the number this year looks pretty ugly in the numbers.
Thanks.
Even uglier why don't you think that we're seeing more discounting across the retail landscape.
Yes. Good question, Joe, we're seeing kind of a standard type of incentives as they relate to promotions and activity. So there has been discounting in that regard, but its not we haven't seen it we haven't felt the competitive pressures on that quite yet but.
I sense that they try to bring inventory levels in place we might start seeing that but we're partnered with some of the best.
Brands and manufacturers out there to work through that.
It seems like Joe that post the great recession.
You know our history got pretty hard it seems like manufacturers and dealers alike.
Just do a better job also as trends.
Got softer than the people started making reductions then as well.
Okay understood and then Mitch.
Secondly, just to kind of follow up on that Mike you mentioned.
Much of the inventory increase was due to the acquisitions.
How much does your inventory to come down over the next few quarters here.
Heavy.
So did I and my guess is that sort of comparable with other people out there, which obviously is not that big of an out of balance I think it's pretty easy to start aligning that with manufacturers units.
Ill have to factor into that that's correct Jeff.
That does play into it.
Okay, great. Thank you guys.
Thanks, Joe.
We will now take our next question from Michael Swartz with Suntrust. Please go ahead.
Hey, good morning, guys.
Just to just to follow up on Joe's question around inventory and I think you said up.
The inventory dollars were up about 10%, if you exclude sale and ski.
I guess, what would that mean for units and then when you look at the just mentioned two orders and inventory that need to be made.
Do you.
Is this a one two quarter event or do you think this is something that bleeds into the spring or summer of 2020.
Units are up higher than dollars right now I don't as a percentage I don't have the number right in front of me.
And traditionally in the industry. It takes a couple of quarters that bleed down just because of seasonality it it'd be tough for the manufacturers to swallow the whole reduction.
In one quarter, and then and then ramp up to normal levels normally.
Overall the years, we've been doing as it gets adjusted throughout 2020 as manufacturers kind of level set their production.
Gotcha Okay.
And obviously weather had an impact on on the quarter and on the year to date.
But I guess people are just trying to figure out how much of this is weather versus how much of this is maybe something else is there anything you can do I mean looking around your gear.
The various regions you operate in where the areas that were much stronger than others, maybe that one is weather impacted or was it pretty much across the board softness that you saw.
We we literally saw mix of everything we saw areas that were heavily impacted by weather. We saw areas that we're performing well and we saw some areas that didnt have weather events that were off a little so I hate to put it out like that thats been the thing it's been choppy in their in their is bearing softness.
Okay. Okay. That's helpful. And then just with regards to some of the softness we've seen.
In the industry this year and some of the concerns around inventory et cetera.
Does that change the calculus with M&A.
Does this bring people to the table when there's these kind of.
Areas of concern and if so are you seeing any changes in market valuations.
Well I can comment to just the types of.
Acquisitions and people were looking at or premium type of acquisition. So I think they probably have a pretty resilient.
Business model that yes, it will be more cautious and so will they but I don't think it affects the type that we're looking at.
Mike Yes, it's.
I would agree with you and there are multiple which we pay really.
Does it changes much obviously dealers earnings begin to change and so you effectively.
Could have a reduction in purchase price at times do get tougher.
But.
I think you were also asking if there is like the phone ring more or something like that maybe one of your questions and I think naturally if things are softer you do get more opportunities at least talk to dealers about merging.
Okay, great. That's it from me thanks.
Thanks.
We will now take our next question from Eric Wold from par.
We are writing.
Thanks, guys good morning.
You questions.
I guess, one I guess.
We think about kind of the areas you see softness I know, it's always tough to know why someone doesnt come in in store may be choosing not to buy it but when you're sitting at home I guess the guys that do come in are you seeing less traffic overall in the stores is a function of people getting in there and maybe taking longer from kind of interest to close are they getting more concerned about pricing features they get kind of that.
The bottom line, maybe some sense of what you're seeing from the buyers.
Yes, I think we have noticed.
Slower traffic in the stores, which obviously is what pushed us to.
Initiate some marketing initiatives and additional driving the business, which obviously is more and more online marketing but.
Yes traffic was slower.
Which is why we were innovative with some things like our online both sale and boat show and those sort of things. So it's a.
But yet little softer traffic.
And then in terms of just when people are buying are they any.
You see any more worries around price or features or whatnot that still saying.
At a high level it's been.
We really have not seen that at all I mean that the innovation on the product still is driving people in the door.
Talk to customers regulators of our events just recently at an event and.
People talking about the ease of the joystick operations, just we're not hearing concerns once we get them in the door. They still want to go voting with their family.
Okay, and then lastly.
Coming up.
Two years since the other larger series you're going to have discontinued obviously you worked those through through earlier this year.
We will.
If you think about kind of where you were with those models are going to where you are now kind of replacement as an gallium.
You get the point really business, it's kind of been even Dallas, you still still kind of down to where we were before what do you think you're going to make up that gap and so on.
But we have technically made up the gap each quarter. We've had positive same store sales growth every single quarter.
It's a combination of the asthma gallion brands other segments, we're in and Brett comment on that.
A little bit of everything that was 10% of our revenue at the time, they announced it and sawdust and it gets.
Pretty incredible that.
Through training and other adverse efforts, we've been able to get our team refocused others. The business. So fast I would say, it's not behind US. It's part of the marketing spend its consumers that that bought sea rays for many many years. So just directly replace that is still taking some time.
Okay. Thanks, guys.
Thanks.
We will now take that and take our next question from James Hardiman of.
Bush. Please go ahead.
Hi, This is Sean Wagner on for James.
I was just wondering if you could provide any color on the sales cadence within the quarter did a follow the the industry data that you you pointed to and if so I guess of July is shaping up to be just to finish up over last year kind of what changed is it just all.
Weather related.
Yes, I can comment that I think we said on our April call. We are going to have a good April we had a very good April and I think the industry data reflected decent data may was softer in the industry data I think is consistent what we saw in June was softer a very it was much softer based on the industry data.
And I think we would agree that June was was tougher than we were expecting.
With July .
With our promotions that we've got in place a number we finished up in units in the quarter.
And so.
For us to be up over last year may not be that much of a surprise since we were up.
Through the.
Through the June quarter, as well, so I'm not quite sure what the industry data is going to show.
I do hear some reports that in some markets weather has been better too so to the extent weathers.
Impacted sales, which I think there is clearly an impact to some degree maybe that's got a little better in some markets in July so.
Well have to wait and see what the data shows when it comes out in mid August .
Okay and to that point from a weather perspective are you seeing any kind of waterway or water level issues that are leading the boating restrictions in your markets and if so how long do you think that.
Kind of those issues might be expected to last.
I don't believe we have any today, we did have some of the June quarter, they're all cleared up.
Yes, there are some pressures here and there, but none of our major markets are impacted by that right now.
Okay.
And last question is there any color you can provide on kind of how the individual brands performed I know you talked about the larger and premium brands being the Earth models being the ones that are driving kind of the growth, but is there any kind of individual brand color you can provide.
We don't typically break down within marine Max about our brands I mean, the industry data would show you that.
Certainly certain certain types of aluminum product alumina efficiencies there.
Probably the most soft maybe some pontoon some less expensive center consoles.
Most of everything we carry is premium and premium I think has held up better so.
That comment.
Okay. Thanks, a lot.
Thanks.
We will now take our next question.
Binder Securities. Please go ahead.
Hi, Good morning, Thank you for taking my questions.
You gave some guidance for the year end share count around $23 million, which would indicate.
Some share repurchases.
You you aboard recently announced that it had approved the plan.
Well you were active at all on the share repurchase program during the quarter and.
Given that the drop in the share price would you expect to be active in Q4.
Yes, great question, Ron and good morning.
Yes, we were active.
We have late became very active in it and.
So it all depends on where the share prices throughout the quarter the.
At these prices and below our we have a tenbfive plan in place that would be triggering that would potentially take our average share count down below what weve said from a guidance perspective.
But that were out there we we think its a.
Obviously attractive opportunity at prices, where we're at.
How many shares did you did you buy during the quarter.
What was the cost I don't remember exactly.
Was buying some debt.
At higher prices that fell too, but obviously that if not more.
It's got triggering points I don't remember the told if my memory is.
As of July Onest, we probably had about a million two or three left under the plan.
That would be that would have been buying here of late and we will continue to buy in the fourth quarter.
Okay and.
At the end of last quarter, you still had I believe a couple sea rays left and you were running some promos to to clear it cleared the last of the CB did that impact the gross margin. Despite the doing very well on the gross margin was that a headwind that you had to overcome.
Not so much this quarter I think going through the March quarter was I think Brett brings up a good point, though that there are still trading efforts and costs that are down in the SGN a there associated with the us replacing the sea Ray.
As for yachts in gods.
Well, while he might have some extra costs.
There does galyon and Azimut Kerry.
Like gross margins to sea ray or higher gross margins, how does the gross margin compare on those products.
For the sea Ray provides very good margin opportunities on a on a combined basis as that one guy and should get us to be able to replace the sea ray margins with with additional effort work today. They don't replace at 100% we're working to replace it.
Overall.
Okay, and lastly did you did you calm down in June and I think you said on this call that you were comping up about 5% for July if you come down in June then swung around so much is that just driven by your innovative promotions or.
Have you seen a bit of a shift in the consumer.
June was.
Positive slightly in June it was positive. It was also positive in units I would say, we did drive positive unit growth in the month of June , albeit a little bit, but we were positive.
Given the industry data, it's real testimony to the strategies that we put in.
In place.
Nothing here in July seems much different than in June .
Consumer activity here.
Anything like that we were just to put it all in perspective, Ron So June that we're up against an 8% compare and for the quarter, we did 3% growth.
We're now up against a 22% compare so we're up against a much more meaningful tougher quarter. It is true july's up we just got to really keep producing in August and September that's the.
When you step back and just look at the remainder of this year. That's a challenge ahead of us.
Okay, great. Thank you very much and good luck in the last quarter.
Thank you very much.
We will now take our next question from Steve Dyer of Craig Hallum. Please go ahead.
Hey, guys ready to go on for Steve.
Just following up on kind of the same store sales guidance and it relates to tough comp.
Here in Q4, but by my math, you guys reported kind of a mid single digit same store sales growth through the first nine months July is expected to be up year over year. So that implies some fairly large declines in August and September .
Is that primarily a comp issue I mean industry data has been challenging here.
For the past few months ago, some nicely outperform so any color there would be helpful.
Yes, I think it's just largely looking at the data and how it's gotten.
Meaningfully worse.
As we look into our fourth quarter, because the way the quarter rolls july's it a pretty important.
September's, even a bigger amount do you got a bunch of boat shows it picked back up its.
Two big book ends with September being even bigger and then August tends to be a.
Kind of a law between the two bigger months and so just looking at what we did last year.
It's just a formidable cost to go up against with eroding industry data, yeah, with an overarching industry integration right.
Gotcha.
And then as it relates to the freeze your acquisition. Some nice color that you guys give there, but any additional financial detail that you can give purchase price revenue contribution and then expected annual accretion I know you mentioned the quarter, but that'd be helpful. We'll give we'll give the annual accretion on the October call. It in the in the.
In the place that Frazier plays in that in that space. All that bigger houses are all very confidential about their revenue and about their financial information and so nothing gets disclosed for competitive reasons.
Obviously, given that we are close to $1.2 billion or thereabouts, it's not a real big material revenue driver for us. It's just a very great strategic acquisition that we we think we've continued to grow and so we'll give color on the earnings part of the business as we give our annual guidance in October .
Great last one for me. So you mentioned getting more aggressive on marketing and last quarter, you mentioned being more aggressive than the industry from a pricing standpoint.
Does that marketing related to pricing as well and then do you expect to continue being more aggressive than the industry as far as pricing goes going forward. Thanks. Good luck.
Yes, I think I think our marketing strategy is really around events promotions, keeping customers active driving driving leads and traffic and not so much focused on pricing of course, our pricing strategy is very important but it's not a discounting pricing aggressiveness that were really shooting for.
Great. That's it for me thanks, guys.
Thank you.
We will now take our next question from Mike Swartz with Suntrust. Please go ahead.
Hey, guys have been back in here.
Just a few follow ups and one more of a clarification, Mike when you talk about July being up are you.
Are you, saying your comps are up or just revenue is up year over year.
Based on another week of expected closings I would think our comps are going to be up.
Okay, Okay perfect.
And then maybe for Brad you're talking about maybe.
Realigning costs, just given what you've seen in the end market you'd come into your a little more aggressive on the marketing side I'm just wondering what your commentary now maybe.
Good maybe pulling back is that is that to say that you'd pull back on marketing it doesn't sounds sound like it.
I'm just wondering if that has an impact on your full year outlook with comp.
Comp store sales.
Yes, I think we're going to be.
You know very surgical in how we look at things marketing won't be where we just pull back it will be very strategic in how we think through it.
We're going to look at.
We've ramped our business is up with infrastructure and cost within the stores to support a higher growth rate and we're going to adjust that down that's basically what we're going to do.
Okay. So it sounds like some of this is more of the behind the scenes costs relative to the consumer facing costs.
Correct.
Okay wonderful thank you.
We will now take our next question from David Macgregor of Longbow Research. Please go ahead.
Yeah, good morning, everybody.
Just Mike you offered all the normal caveats around the interpretation of customer deposit numbers, but.
Having said that I wonder if you could just talk about what you're seeing in the way of cancellation trends and are you seeing any kind of an acceleration there.
No. It's a good question David.
I think Brexit that people, who are coming in the door that are talking with us they're very interested in there are buyers and so there is no increase in cancellation trends at all.
Okay, and then I guess, if we see maybe a little more weakness in terms of demand.
Admittedly at lower price points premium still strong do you expect to see more transition towards used boat sales and does that impact your mix and kind of your gross margins as you go forward.
Yes, that's possible you could see that but I would say in a back to some of my comments the innovation of the products and the new models that continue to come out is really driving a lot of business consumers I don't think anybody is really we haven't seen the consumer dropped back into this.
Real value oriented mode, yet, we have people, saying, Oh I've got to have that new boat with the extra technology work, we're still seeing new models and innovation driving driving sales.
Good and then last question from me is just.
I realize you want to hold off until next call to talk about the accretion of freeze your but is there any way you could give us some sense of within that business the mix of.
Service revenues versus transactional brokerage revenues.
Well so its all service revenues, including the brokerage that's all going to be higher margin revenues.
Business to us Likewise, the expense structure is a little higher expense structure relative to marine Max but its net profit is higher than us as well.
I guess, that's about the best I can tell you right now.
Yes, I was trying to get as you were mentioning earlier just the value prop that there maybe just crew servicing and staffing it was it sounds like there's a lot of other services beyond just.
Matching buyers and sellers I'm, just trying to get a sense what that mix might look like.
Competitively they don't disclose that so I like daughter that not disclosed how the revenues broken down sure, but I will say that strategically for us. It's one of the interest is that we're trying to grow these higher margin businesses right. So that fits their strategically for us.
Okay. Thanks very much.
Okay. Thank you.
Ladies and gentlemen. This concludes today's question and answer session. At this time I'd like to turn the conference back to your host for any additional or closing remarks.
Well, thank you operator and.
I know everybody was very busy with a lot of activity today. So thank you for joining our call and being a part of it Mike and I will be available all day for any questions and we'll look forward to updating you on our progress on the next call.
Ladies and gentlemen, this concludes today's call. Thank you for your participation you may now disconnect.