MARINEMAX INC, 10-Q filed on 7/26/2019
Quarterly Report
v3.19.2
Document and Entity Information - shares
9 Months Ended
Jun. 30, 2019
Jul. 26, 2019
Document And Entity Information [Abstract]    
Document Type 10-Q  
Amendment Flag false  
Document Period End Date Jun. 30, 2019  
Document Fiscal Year Focus 2019  
Document Fiscal Period Focus Q3  
Trading Symbol HZO  
Entity Registrant Name MARINEMAX INC  
Entity Central Index Key 0001057060  
Current Fiscal Year End Date --09-30  
Entity Filer Category Accelerated Filer  
Entity Current Reporting Status Yes  
Entity Emerging Growth Company false  
Entity Small Business false  
Entity Common Stock, Shares Outstanding   27,350,901
Entity Shell Company false  
Entity File Number 1-14173  
Entity Tax Identification Number 593496957  
Entity Address, Address Line One 2600 McCormick Drive  
Entity Address, Address Line Two Suite 200  
Entity Address, City or Town Clearwater  
Entity Address, State or Province Florida  
Entity Address, Postal Zip Code 33759  
City Area Code 727  
Local Phone Number 531-1700  
v3.19.2
Condensed Consolidated Statements of Operations (Unaudited) - USD ($)
$ in Thousands
3 Months Ended 9 Months Ended
Jun. 30, 2019
Jun. 30, 2018
Jun. 30, 2019
Jun. 30, 2018
Income Statement [Abstract]        
Revenue $ 383,494 $ 361,254 $ 929,017 $ 868,780
Cost of sales 285,784 270,567 693,627 649,551
Gross profit 97,710 90,687 235,390 219,229
Selling, general, and administrative expenses 68,968 64,089 187,436 172,994
Income from operations 28,742 26,598 47,954 46,235
Interest expense 2,936 2,499 8,485 7,881
Income before income tax provision 25,806 24,099 39,469 38,354
Income tax provision 6,719 6,723 10,169 10,582
Net income $ 19,087 $ 17,376 $ 29,300 $ 27,772
Basic net income per common share $ 0.86 $ 0.78 $ 1.30 $ 1.25
Diluted net income per common share $ 0.84 $ 0.75 $ 1.26 $ 1.21
Weighted average number of common shares used in computing net income per common share:        
Basic 22,243,895 22,399,079 22,619,802 22,185,736
Diluted 22,821,202 23,182,546 23,212,983 22,944,581
v3.19.2
Condensed Consolidated Balance Sheets (Unaudited) - USD ($)
$ in Thousands
Jun. 30, 2019
Sep. 30, 2018
CURRENT ASSETS:    
Cash and cash equivalents $ 71,618 $ 48,822
Accounts receivable, net 49,104 34,003
Inventories, net 434,729 377,074
Prepaid expenses and other current assets 11,221 5,392
Total current assets 566,672 465,291
Property and equipment, net of accumulated depreciation of $72,013 and $79,363 143,318 138,716
Goodwill and other long-term assets, net 45,417 33,123
Deferred tax assets, net   3,408
Total assets 755,407 640,538
CURRENT LIABILITIES:    
Accounts payable 31,601 23,134
Customer deposits 24,262 17,006
Accrued expenses 37,359 32,926
Short-term borrowings 289,842 212,949
Total current liabilities 383,064 286,015
Deferred tax liabilities 1,284  
Other long-term liabilities 1,273 1,431
Total liabilities 385,621 287,446
SHAREHOLDERS' EQUITY:    
Preferred stock, $.001 par value, 1,000,000 shares authorized, none issued or outstanding as of September 30, 2018 and June 30, 2019
Common stock, $.001 par value, 40,000,000 shares authorized, 27,141,267 and 27,355,635 shares issued and 22,670,536 and 21,657,638 shares outstanding as of September 30, 2018 and June 30, 2019, respectively 27 27
Additional paid-in capital 269,554 262,250
Retained earnings 195,770 166,071
Treasury stock, at cost, 4,470,731 and 5,697,997 shares held as of September 30, 2018 and June 30, 2019, respectively (95,565) (75,256)
Total shareholders’ equity 369,786 353,092
Total liabilities and shareholders’ equity $ 755,407 $ 640,538
v3.19.2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($)
$ in Thousands
Jun. 30, 2019
Sep. 30, 2018
Statement Of Financial Position [Abstract]    
Property and equipment, accumulated depreciation $ 79,363 $ 72,013
Preferred stock, par value $ 0.001 $ 0.001
Preferred stock, shares authorized 1,000,000 1,000,000
Preferred stock, shares issued 0 0
Preferred stock, shares outstanding 0 0
Common stock, par value $ 0.001 $ 0.001
Common stock, shares authorized 40,000,000 40,000,000
Common stock, shares issued 27,355,635 27,141,267
Common stock, shares outstanding 21,657,638 22,670,536
Treasury stock, shares 5,697,997 4,470,731
v3.19.2
Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($)
$ in Thousands
Total
Common Stock [Member]
Additional Paid-in Capital [Member]
Retained Earnings [Member]
Treasury Stock [Member]
Beginning Balance at Sep. 30, 2017 $ 302,198 $ 26 $ 249,974 $ 126,759 $ (74,561)
Beginning Balance, Shares at Sep. 30, 2017   26,314,066      
Net income 4,212     4,212  
Purchase of treasury stock (695)       (695)
Shares issued pursuant to employee stock purchase plan 435 $ 1 434    
Shares issued pursuant to employee stock purchase plan, Shares   30,822      
Shares issued upon vesting of equity awards, net of minimum tax withholding (118)   (118)    
Shares issued upon vesting of equity awards, net of minimum tax withholding, Shares   13,129      
Shares issued upon exercise of stock options 1,917   1,917    
Shares issued upon exercise of stock options, Shares   181,696      
Stock-based compensation 1,507   1,507    
Stock-based compensation, Shares   2,689      
Ending Balance at Dec. 31, 2017 309,456 $ 27 253,714 130,971 (75,256)
Ending Balance, Shares at Dec. 31, 2017   26,542,402      
Beginning Balance at Sep. 30, 2017 302,198 $ 26 249,974 126,759 (74,561)
Beginning Balance, Shares at Sep. 30, 2017   26,314,066      
Net income 27,772        
Ending Balance at Jun. 30, 2018 341,622 $ 27 262,320 154,531 (75,256)
Ending Balance, Shares at Jun. 30, 2018   26,983,074      
Beginning Balance at Dec. 31, 2017 309,456 $ 27 253,714 130,971 (75,256)
Beginning Balance, Shares at Dec. 31, 2017   26,542,402      
Net income 6,184     6,184  
Shares issued upon exercise of stock options 1,595   1,595    
Shares issued upon exercise of stock options, Shares   155,894      
Stock-based compensation 1,702   1,702    
Stock-based compensation, Shares   2,352      
Ending Balance at Mar. 31, 2018 318,937 $ 27 257,011 137,155 (75,256)
Ending Balance, Shares at Mar. 31, 2018   26,700,648      
Net income 17,376     17,376  
Shares issued pursuant to employee stock purchase plan 516   516    
Shares issued pursuant to employee stock purchase plan, Shares   36,365      
Shares issued upon exercise of stock options 3,141   3,141    
Shares issued upon exercise of stock options, Shares   243,774      
Stock-based compensation 1,652   1,652    
Stock-based compensation, Shares   2,287      
Ending Balance at Jun. 30, 2018 341,622 $ 27 262,320 154,531 (75,256)
Ending Balance, Shares at Jun. 30, 2018   26,983,074      
Beginning Balance at Sep. 30, 2018 $ 353,092 $ 27 262,250 166,071 (75,256)
Beginning Balance, Shares at Sep. 30, 2018 27,141,267 27,141,267      
Net income $ 4,910     4,910  
Purchase of treasury stock (229)       (229)
Shares issued pursuant to employee stock purchase plan 507   507    
Shares issued pursuant to employee stock purchase plan, Shares   30,650      
Shares issued upon vesting of equity awards, net of minimum tax withholding, Shares   35,000      
Shares issued upon exercise of stock options 1,311   1,311    
Shares issued upon exercise of stock options, Shares   108,275      
Stock-based compensation 1,448   1,448    
Stock-based compensation, Shares   2,135      
Cumulative effect of change in accounting principle - revenue recognition, net after tax 399     399  
Ending Balance at Dec. 31, 2018 361,438 $ 27 265,516 171,380 (75,485)
Ending Balance, Shares at Dec. 31, 2018   27,317,327      
Beginning Balance at Sep. 30, 2018 $ 353,092 $ 27 262,250 166,071 (75,256)
Beginning Balance, Shares at Sep. 30, 2018 27,141,267 27,141,267      
Net income $ 29,300        
Ending Balance at Jun. 30, 2019 $ 369,786 $ 27 269,554 195,770 (95,565)
Ending Balance, Shares at Jun. 30, 2019 27,355,635 27,355,635      
Beginning Balance at Dec. 31, 2018 $ 361,438 $ 27 265,516 171,380 (75,485)
Beginning Balance, Shares at Dec. 31, 2018   27,317,327      
Net income 5,303     5,303  
Shares issued upon exercise of stock options 8   8    
Shares issued upon exercise of stock options, Shares   1,000      
Stock-based compensation 1,740   1,740    
Stock-based compensation, Shares   2,900      
Ending Balance at Mar. 31, 2019 368,489 $ 27 267,264 176,683 (75,485)
Ending Balance, Shares at Mar. 31, 2019   27,321,227      
Net income 19,087     19,087  
Purchase of treasury stock (20,080)       (20,080)
Shares issued pursuant to employee stock purchase plan 515   515    
Shares issued pursuant to employee stock purchase plan, Shares   31,637      
Stock-based compensation 1,775   1,775    
Stock-based compensation, Shares   2,771      
Ending Balance at Jun. 30, 2019 $ 369,786 $ 27 $ 269,554 $ 195,770 $ (95,565)
Ending Balance, Shares at Jun. 30, 2019 27,355,635 27,355,635      
v3.19.2
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)
$ in Thousands
9 Months Ended
Jun. 30, 2019
Jun. 30, 2018
CASH FLOWS FROM OPERATING ACTIVITIES:    
Net income $ 29,300 $ 27,772
Adjustments to reconcile net income to net cash provided by operating activities:    
Depreciation and amortization 8,466 7,853
Deferred income tax provision 4,555 5,674
Loss (gain) on sale of property and equipment (287) 78
Gain on insurance settlements   (1,082)
Proceeds from insurance settlements 475 2,342
Stock-based compensation expense 4,963 4,861
(Increase) decrease in —    
Accounts receivable, net (15,500) (19,833)
Inventories, net (41,591) 24,386
Prepaid expenses and other assets (5,777) (417)
Increase (decrease) in —    
Accounts payable 7,909 (5,686)
Customer deposits 6,761 1,794
Accrued expenses and other long-term liabilities 5,167 4,636
Net cash provided by operating activities 4,441 52,378
CASH FLOWS FROM INVESTING ACTIVITIES:    
Purchases of property and equipment (13,365) (10,839)
Proceeds from insurance settlements 280 685
Net cash used in acquisition of businesses, primarily property and equipment and inventory (13,260) (2,433)
Proceeds from sale of property and equipment 965 168
Net cash used in investing activities (25,380) (12,419)
CASH FLOWS FROM FINANCING ACTIVITIES:    
Net (payments) borrowings on short-term borrowings 63,357 (23,568)
Net proceeds from issuance of common stock under incentive compensation and employee purchase plans 2,341 7,604
Contingent acquisition consideration payments (129) (3,026)
Payments on tax withholdings for equity awards (1,525) (118)
Purchase of treasury stock (20,309) (695)
Net cash (used in) provided by financing activities 43,735 (19,803)
NET INCREASE IN CASH AND CASH EQUIVALENTS 22,796 20,156
CASH AND CASH EQUIVALENTS, beginning of period 48,822 41,952
CASH AND CASH EQUIVALENTS, end of period 71,618 62,108
Cash paid for:    
Interest 9,937 9,530
Income taxes 3,965 $ 4,608
Non-cash items:    
Contingent consideration liabilities from acquisitions $ 640  
v3.19.2
Company Background
9 Months Ended
Jun. 30, 2019
Accounting Policies [Abstract]  
Company Background

1.

COMPANY BACKGROUND:

We are the largest recreational boat and yacht retailer in the United States.  We engage primarily in the retail sale, brokerage, and service of new and used boats, motors, trailers, marine parts and accessories and offer slip and storage accommodations in certain locations.  In addition, we arrange related boat financing, insurance, and extended service contracts.  We also offer the charter of power yachts in the British Virgin Islands.  As of June 30, 2019, we operated through 67 retail locations in 16 states, consisting of Alabama, Connecticut, Florida, Georgia, Maryland, Massachusetts, Minnesota, Missouri, New Jersey, New York, North Carolina, Ohio, Oklahoma, Rhode Island, South Carolina and Texas. Our MarineMax Vacations operation maintains a facility in Tortola, British Virgin Islands.

We are the nation’s largest retailer of Sea Ray and Boston Whaler recreational boats and yachts, which are manufactured by Brunswick Corporation (“Brunswick”). Sales of new Brunswick boats accounted for approximately 40% of our revenue in fiscal 2018.  Sales of new Sea Ray and Boston Whaler boats, both divisions of Brunswick, accounted for approximately 21% and 17%, respectively, of our revenue in fiscal 2018. Brunswick is a world leading manufacturer of marine products and marine engines. We believe our sales represented approximately 42% of Brunswick’s Sea Ray boat sales, during our fiscal 2018.

In June 2018, Brunswick announced it was discontinuing Sea Ray sport yacht and yacht models.  Sea Ray sport yacht and yacht models represented approximately 10% of revenue during fiscal year 2018. Through the period ended June 30, 2019, our brand and product diversification allowed us to replace the Sea Ray sport yacht and yacht revenue.

We have dealership agreements with Sea Ray, Boston Whaler, Harris, and Mercury Marine, all subsidiaries or divisions of Brunswick. We also have dealer agreements with Italy-based Azimut-Benetti Group’s product line for Azimut Yachts. These agreements allow us to purchase, stock, sell, and service these manufacturers’ boats and products. These agreements also allow us to use these manufacturers’ names, trade symbols, and intellectual properties in our operations.

We have multi-year dealer agreements with Brunswick covering Sea Ray products that appoint us as the exclusive dealer of Sea Ray boats in our geographic markets. We are the exclusive dealer for Boston Whaler through multi-year dealer agreements for many of our geographic markets. In addition, we are the exclusive dealer for Azimut Yachts for the entire United States through a multi-year dealer agreement. Sales of new Azimut boats accounted for approximately 11% of our revenue in fiscal 2018. We believe non-Brunswick brands offer a migration for our existing customer base or fill a void in our product offerings, and accordingly, do not compete with the business generated from our other prominent brands.

As is typical in the industry, we deal with most of our manufacturers, other than Sea Ray, Boston Whaler, and Azimut Yachts, under renewable annual dealer agreements, each of which gives us the right to sell various makes and models of boats within a given geographic region.  Any change or termination of these agreements, or the agreements discussed above, for any reason, or changes in competitive, regulatory, or marketing practices, including rebate or incentive programs, could adversely affect our results of operations.  Although there are a limited number of manufacturers of the type of boats and products that we sell, we believe that adequate alternative sources would be available to replace any manufacturer other than Sea Ray and Azimut as a product source.  These alternative sources may not be available at the time of any interruption, and alternative products may not be available at comparable terms, which could affect operating results adversely.

General economic conditions and consumer spending patterns can negatively impact our operating results.  Unfavorable local, regional, national, or global economic developments or uncertainties regarding future economic prospects could reduce consumer spending in the markets we serve and adversely affect our business.  Economic conditions in areas in which we operate dealerships, particularly Florida, in which we generated approximately 55%, 55%, and 51% of our revenue during fiscal 2016, 2017, and 2018, respectively, can have a major impact on our operations.  Local influences, such as corporate downsizing, military base closings, inclement weather such as Hurricane Sandy in 2012 or Hurricanes Harvey and Irma in 2017, environmental conditions, and specific events, such as the BP oil spill in the Gulf of Mexico in 2010, also could adversely affect, and in certain instances have adversely affected, our operations in certain markets.

In an economic downturn, consumer discretionary spending levels generally decline, at times resulting in disproportionately large reductions in the sale of luxury goods.  Consumer spending on luxury goods also may decline as a result of lower consumer confidence levels, even if prevailing economic conditions are favorable.  As a result, an economic downturn could impact us more than certain of our competitors due to our strategic focus on a higher end of our market.  Although we have expanded our operations during periods of stagnant or modestly declining industry trends, the cyclical nature of the recreational boating industry or the lack of industry growth may adversely affect our business, financial condition, and results of operations.  Any period of adverse economic conditions or low consumer confidence is likely to have a negative effect on our business.

Historically, in periods of lower consumer spending and depressed economic conditions, we have, among other things, substantially reduced our acquisition program, delayed new store openings, reduced our inventory purchases, engaged in inventory reduction efforts, closed a number of our retail locations, reduced our headcount, and amended and replaced our credit facility.  Acquisitions and new store openings remain important strategies to our company, and we plan to accelerate our growth through these strategies as industry conditions continue to improve.  

 

v3.19.2
Basis of Presentation
9 Months Ended
Jun. 30, 2019
Accounting Policies [Abstract]  
Basis of Presentation

2.

BASIS OF PRESENTATION:

These unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information, the instructions to Quarterly Report on Form 10-Q, and Rule 10-01 of Regulation S-X and should be read in conjunction with our Annual Report on Form 10-K for the fiscal year ended September 30, 2018. Accordingly, these unaudited condensed consolidated financial statements do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. All adjustments, consisting of only normal recurring adjustments considered necessary for fair presentation, have been reflected in these unaudited condensed consolidated financial statements. As of June 30, 2019, our financial instruments consisted of cash and cash equivalents, accounts receivable, accounts payable, customer deposits, and short-term borrowings. The carrying amounts of our financial instruments reported on the balance sheet as of June 30, 2019, approximated fair value due either to length to maturity or existence of variable interest rates, which approximate prevailing market rates.  The operating results for the three and nine months ended June 30, 2019, are not necessarily indicative of the results that may be expected in future periods.

The preparation of unaudited condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the unaudited condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting periods. Significant estimates made by us in the accompanying unaudited condensed consolidated financial statements include valuation allowances, valuation of goodwill and intangible assets, valuation of long-lived assets, and valuation of accruals. Actual results could differ from those estimates.

Unless the context otherwise requires, all references to “MarineMax” mean MarineMax, Inc. prior to its acquisition of five previously independent recreational boat dealers in March 1998 (including their related real estate companies) and all references to the “Company,” “our company,” “we,” “us,” and “our” mean, as a combined company, MarineMax, Inc. and the 29 recreational boat dealers, two boat brokerage operations, and two full-service yacht repair operations acquired as of June 30, 2019 (the “acquired dealers,” and together with the brokerage and repair operations, “operating subsidiaries” or the “acquired companies”).

In order to provide comparability between periods presented, certain amounts have been reclassified from the previously reported unaudited condensed consolidated financial statements to conform to the unaudited condensed consolidated financial statement presentation for the current period. The unaudited condensed consolidated financial statements include our accounts and the accounts of our subsidiaries, all of which are wholly owned. All significant intercompany transactions and accounts have been eliminated.

v3.19.2
New Accounting Pronouncements
9 Months Ended
Jun. 30, 2019
Accounting Changes And Error Corrections [Abstract]  
New Accounting Pronouncements

3.

NEW ACCOUNTING PRONOUNCEMENTS:

In May 2014, the FASB issued Accounting Standards Update No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” (“ASU 2014-09”), a converged standard on revenue recognition.  The new pronouncement requires revenue recognition to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.  The guidance also specifies the accounting for some costs to obtain or fulfill a contract with a customer, as well as enhanced disclosure requirements. The FASB also subsequently issued several amendments to the standard, including clarification on principal versus agent guidance, identifying performance obligations, and immaterial goods and services in a contract.

The new accounting standard update must be applied using either of the following transition methods: (i) a full retrospective approach reflecting the application of the standard in each prior reporting period with the option to elect certain practical expedients, or (ii) a modified retrospective approach with the cumulative effect of initially adopting the standard recognized at the date of adoption (which requires additional footnote disclosures).

The new accounting standard is effective for reporting periods beginning after December 15, 2017. We adopted the accounting standard effective October 1, 2018, using the modified retrospective approach applied only to contracts not completed as of the date of adoption, with no restatement of comparative periods. Therefore, the comparative information has not been adjusted and continues to be reported under ASC Topic 605. We recognized a net after-tax cumulative effect adjustment to retained earnings of $399,000 as of the date of adoption. The details and quantitative impacts of the significant changes are described below.

 

We previously recognized revenue for parts and service operations (boat maintenance and repairs) when the services were completed and recorded amounts due to us as receivables. Under ASC Topic 606, performance obligations associated with parts and service operations are satisfied over time, which results in the acceleration of revenue recognition, and amounts due to us are reflected as a contract asset until the right to such consideration becomes unconditional, at which time amounts due to us are reclassified to receivables.

 

Consolidated Balance Sheet Line Items

 

 

 

Impact of changes in accounting policies

 

 

 

 

 

 

 

Balances without

 

 

Impact of

 

 

 

 

 

 

 

adoption of ASC

 

 

adoption

 

June 30, 2019

 

As Reported

 

 

Topic 606

 

 

Higher/(Lower)

 

Inventories, net

 

$

434,729

 

 

$

435,032

 

 

$

(303

)

Prepaid expenses and other current assets

 

 

11,221

 

 

 

8,386

 

 

 

2,835

 

     Accounts payable

 

 

31,601

 

 

 

31,555

 

 

 

46

 

     Accrued expenses

 

 

37,359

 

 

 

35,563

 

 

 

1,796

 

     Deferred tax liabilities

 

 

1,284

 

 

 

1,147

 

 

 

137

 

     Retained earnings

 

$

195,770

 

 

$

195,217

 

 

$

553

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated Statements of Operations Line Items

 

 

 

Impact of changes in accounting policies

 

 

 

 

 

 

 

Balances without

 

 

Impact of

 

 

 

 

 

 

 

adoption of ASC

 

 

adoption

 

Three Months Ended June 30, 2019

 

As Reported

 

 

Topic 606

 

 

Higher/(Lower)

 

Revenue

 

$

383,494

 

 

$

383,040

 

 

$

454

 

Cost of sales

 

 

285,784

 

 

 

285,530

 

 

 

254

 

Income from operations

 

 

28,742

 

 

 

28,542

 

 

 

200

 

     Income before income tax provision

 

 

25,806

 

 

 

25,606

 

 

 

200

 

Income tax provision

 

 

6,719

 

 

 

6,673

 

 

 

46

 

Net Income

 

$

19,087

 

 

$

18,933

 

 

$

154

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Impact of changes in accounting policies

 

 

 

 

 

 

 

Balances without

 

 

Impact of

 

 

 

 

 

 

 

adoption of ASC

 

 

adoption

 

Nine Months Ended June 30, 2019

 

As Reported

 

 

Topic 606

 

 

Higher/(Lower)

 

Revenue

 

$

929,017

 

 

$

929,069

 

 

$

(52

)

Cost of sales

 

 

693,627

 

 

 

693,879

 

 

 

(252

)

Income from operations

 

 

47,954

 

 

 

47,754

 

 

 

200

 

     Income before income tax provision

 

 

39,469

 

 

 

39,269

 

 

 

200

 

Income tax provision

 

 

10,169

 

 

 

10,123

 

 

 

46

 

Net Income

 

$

29,300

 

 

$

29,146

 

 

$

154

 

 

Consolidated Statements of Cash flows

 

 

 

Impact of changes in accounting policies

 

 

 

 

 

 

 

Balances without

 

 

Impact of

 

 

 

 

 

 

 

adoption of ASC

 

 

adoption

 

Nine Months Ended June 30, 2019

 

As Reported

 

 

Topic 606

 

 

Higher/(Lower)

 

Net income

 

$

29,300

 

 

$

29,146

 

 

$

154

 

(Increase) decrease in —

 

 

 

 

 

 

 

 

 

 

 

 

Inventories, net

 

 

(41,591

)

 

 

(41,339

)

 

 

(252

)

Prepaid expenses and other assets

 

 

(5,777

)

 

 

(4,033

)

 

 

(1,744

)

Increase (decrease) in —

 

 

 

 

 

 

 

 

 

 

 

 

Accounts payable

 

 

7,909

 

 

 

7,863

 

 

 

46

 

Accrued expenses and other long-term liabilities

 

$

5,167

 

 

$

3,371

 

 

$

1,796

 

 

In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842)” (“ASU 2016-02”).  This update requires organizations to recognize lease assets and lease liabilities on the balance sheet and also disclose key information about leasing arrangements. ASU 2016-02 is effective for annual reporting periods beginning on or after December 15, 2018, and interim periods within those annual periods. Earlier application is permitted for all entities as of the beginning of an interim or annual period.  While we are continuing to evaluate the impact of the adoption of ASU 2016-02 on our unaudited condensed consolidated financial statements, we believe the adoption of ASU 2016-02 will have a significant and material impact to our unaudited condensed consolidated balance sheet given our current lease agreements for our leased retail locations.  We are continuing to evaluate the impact the adoption of ASU 2016-02 will have on our other unaudited condensed consolidated financial statements.  Based on our current assessment, we expect that most of our operating lease commitments will be subject to the new guidance and recognized as operating lease liabilities and right-of-use assets upon adoption, resulting in a material increase in the assets and liabilities recorded on our unaudited condensed consolidated balance sheet.

 

A subsequent amendment to the standard provides an additional and optional transition method that allows entities to initially apply the new standard at the adoption date and recognize a cumulative effect adjustment to the opening balance of retained earnings in the period of adoption. Consequently, an entity’s reporting for the comparative periods presented in the financial statements in which it adopts the new leases standard will continue to be in accordance with current GAAP (ASC Topic 840) if the optional transition method is elected. While we are still evaluating the method of adoption, we currently anticipate adopting the standard using the optional transition method with no restatement of comparative periods and a cumulative effect adjustment, if any, recognized as of the date of adoption. We are continuing our assessment, which may identify additional impacts this standard will have on our unaudited condensed consolidated financial statements and related disclosures and internal control over financial reporting. We plan to adopt ASU 2016-02 in fiscal 2020.

.

v3.19.2
Revenue Recognition
9 Months Ended
Jun. 30, 2019
Revenue From Contract With Customer [Abstract]  
Revenue Recognition

4.

REVENUE RECOGNITION:

The majority of our revenue is from contracts with customers for the sale of boats, motors, and trailers. We recognize revenue from boat, motor, and trailer sales upon transfer of control of the boat, motor, or trailer to the customer, which is generally upon acceptance or delivery to the customer. At the time of acceptance or delivery, the customer is able to direct the use of, and obtain substantially all of the benefits of the boat, motor, or trailer at such time. We recognize commissions earned from a brokerage sale when the related brokerage transaction closes upon transfer of control of the boat, motor, or trailer to the customer, which is generally upon acceptance or delivery to the customer.

We do not directly finance our customers’ boat, motor, or trailer purchases. In many cases, we assist with third-party financing for boat, motor, and trailer sales. We recognize commissions earned by us for placing notes with financial institutions in connection with customer boat financing when we recognize the related boat sales. Pursuant to negotiated agreements with financial institutions, we are charged back for a portion of these fees should the customer terminate or default on the related finance contract before it is outstanding for a stipulated minimum period of time.  We base the chargeback allowance, which was not material to the unaudited condensed consolidated financial statements taken as a whole as of June 30, 2019, on our experience with repayments or defaults on the related finance contracts. We recognize variable consideration from commissions earned on extended warranty service contracts sold on behalf of third-party insurance companies at generally the later of customer acceptance of the service contract terms as evidenced by contract execution or recognition of the related boat sale. We also recognize variable consideration from marketing fees earned on insurance products sold by third-party insurance companies at the later of customer acceptance of the insurance product as evidenced by contract execution or when the related boat sale is recognized.

We recognize revenue from parts and service operations (boat maintenance and repairs) over time as services are performed. Each boat maintenance and repair service is a single performance obligation that includes both the parts and labor associated with the service. Payment for boat maintenance and repairs is typically due upon the completion of the service, which is generally completed within a short period of time from contract inception. We satisfy our performance obligations, transfer control, and recognize revenue over time for parts and service operations because we are creating a contract asset with no alternative use and we have an enforceable right to payment for performance completed to date. Contract assets primarily relate to our right to consideration for work in process not yet billed at the reporting date associated with maintenance and repair services. We use an input method to recognize revenue and measure progress based on labor hours expended to satisfy the performance obligation at average labor rates. We have determined labor hours expended to be the relevant measure of work performed to complete the maintenance and repair service for the customer. As a practical expedient, since repair and maintenance service contracts have an original duration of one year or less, we do not consider the time value of money, and we do not disclose estimated revenue expected to be recognized in the future for performance obligations that are unsatisfied (or partially unsatisfied) at the end of the reporting period or when we expect to recognize such revenue. Contract assets, recorded in Prepaid expenses and other current assets, totaled approximately $2.7 million and $2.8 million as of October 1, 2018 (beginning of the period of adoption of ASC 606) and June 30, 2019, respectively.  

We recognize deferred revenue from service operations and slip and storage services over time on a straight-line basis over the term of the contract as our performance obligations are met. We recognize income from the rentals of chartering power and sailing yachts over time on a straight-line basis over the term of the contract as our performance obligations are met.

The following table sets forth percentages on the timing of revenue recognition for the three and nine months ended June 30, 2019.

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2019

 

 

2019

 

Goods and services transferred at a point in time

 

 

91.1

%

 

 

90.8

%

Goods and services transferred over time

 

 

8.9

%

 

 

9.2

%

     Total Revenue

 

 

100.0

%

 

 

100.0

%

 

v3.19.2
Inventories
9 Months Ended
Jun. 30, 2019
Inventory Disclosure [Abstract]  
Inventories

5.

INVENTORIES:

Inventory costs consist of the amount paid to acquire inventory, net of vendor consideration and purchase discounts, the cost of equipment added, reconditioning costs, and transportation costs relating to acquiring inventory for sale. We state new and used boat, motor, and trailer inventories at the lower of cost, determined on a specific-identification basis, or net realizable value.  We state parts and accessories at the lower of cost, determined on an average cost basis, or net realizable value.  We utilize our historical experience, the aging of the inventories, and our consideration of current market trends as the basis for determining a lower of cost or net realizable value valuation allowance.  As of September 30, 2018 and June 30, 2019, our lower of cost or net realizable value valuation allowance for new and used boat, motor, and trailer inventories was $1.5 million and $1.8 million, respectively. If events occur and market conditions change, causing the fair value to fall below carrying value, the lower of cost or net realizable value valuation allowance could increase.

v3.19.2
Impairment of Long-Lived Assets
9 Months Ended
Jun. 30, 2019
Asset Impairment Charges [Abstract]  
Impairment of Long-Lived Assets

6.

IMPAIRMENT OF LONG-LIVED ASSETS:

FASB Accounting Standards Codification 360-10-40, “Property, Plant, and Equipment - Impairment or Disposal of Long-Lived Assets” (“ASC 360-10-40”), requires that long-lived assets, such as property and equipment and purchased intangibles subject to amortization, be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of the asset is measured by comparison of its carrying amount to undiscounted future net cash flows the asset is expected to generate. If such assets are considered to be impaired, the impairment to be recognized is measured as the amount by which the carrying amount of the asset exceeds its fair market value. Estimates of expected future cash flows represent our best estimate based on currently available information and reasonable and supportable assumptions. Any impairment recognized in accordance with ASC 360-10-40 is permanent and may not be restored. The analysis is performed at a regional level for indicators of permanent impairment given the geographical interdependencies among our locations. Based upon our most recent analysis, we believe no impairment of long-lived assets existed as of June 30, 2019.

v3.19.2
Income Taxes
9 Months Ended
Jun. 30, 2019
Income Tax Disclosure [Abstract]  
Income Taxes

7.

INCOME TAXES:

We account for income taxes in accordance with FASB Accounting Standards Codification 740, “Income Taxes” (“ASC 740”). Under ASC 740, we recognize deferred tax assets and liabilities for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. We measure deferred

tax assets and liabilities using enacted tax rates expected to apply to taxable income in the years in which we expect those temporary differences to be recovered or settled.  We record valuation allowances to reduce our deferred tax assets to the amount expected to be realized by considering all available positive and negative evidence.  As of September 30, 2018 and June 30, 2019, we had a valuation allowance on our deferred tax assets of $119,000.

 

During each of the three months ended June 30, 2018 and 2019 we recognized an income tax provision of $6.7 million. During the nine months ended June 30, 2018 and 2019, we recognized an income tax provision of $10.6 million and $10.2 million, respectively. The effective income tax rate for the three months ended June 30, 2018 and 2019 was 27.9% and 26.0%, respectively. The effective income tax rate for the nine months ended June 30, 2018 and 2019 was 27.6% and 25.8%, respectively. Due to the passage of the Tax Cuts and Jobs Act legislation in December 2017 which lowered the federal corporate tax rate from 35% to 21% (among other changes), our deferred tax assets were re-measured as of December 31, 2017 resulting in an approximately $889,000 reduction in our beginning deferred tax assets and corresponding increase in our income tax provision for the nine months ended June 30, 2018, partially offset by the utilization of Hurricane Irma and Hurricane Harvey Employee Retention credits in fiscal 2018.

 

v3.19.2
Short-Term Borrowings
9 Months Ended
Jun. 30, 2019
Debt Disclosure [Abstract]  
Short-Term Borrowings

8.

SHORT-TERM BORROWINGS:

In October 2018, we amended and restated our Inventory Financing Agreement (the “Amended Credit Facility”), originally entered into in June 2010, as subsequently amended, with Wells Fargo Commercial Distribution Finance LLC (formerly GE Commercial Distribution Finance Corporation). The October 2018 amendment and restatement extended the maturity date of the Credit Facility to October 2021, and the Amended Credit Facility includes two additional one-year extension periods, with lender approval. The October 2018 amendment and restatement, among other things, modified the amount of borrowing availability and maturity date of the Credit Facility. The Amended Credit Facility provides a floor plan financing commitment of up to $400.0 million, an increase from the previous limit of $350.0 million, subject to borrowing base availability resulting from the amount and aging of our inventory.

The Amended Credit Facility has certain financial covenants as specified in the agreement. The covenants include provisions that our leverage ratio must not exceed 2.75 to 1.0 and that our current ratio must be greater than 1.2 to 1.0. The interest rate for amounts outstanding under the Amended Credit Facility is 345 basis points above the one-month London Inter-Bank Offering Rate (“LIBOR”). There is an unused line fee of ten basis points on the unused portion of the Amended Credit Facility.

 

Advances under the Amended Credit Facility are initiated by the acquisition of eligible new and used inventory or are re-advances against eligible new and used inventory that have been partially paid-off. Advances on new inventory will generally mature 1,080 days from the original invoice date. Advances on used inventory will mature 361 days from the date we acquire the used inventory. Each advance is subject to a curtailment schedule, which requires that we pay down the balance of each advance on a periodic basis starting after six months. The curtailment schedule varies based on the type and value of the inventory.  The collateral for the Amended Credit Facility is all of our personal property with certain limited exceptions. None of our real estate has been pledged for collateral for the Amended Credit Facility.

As of June 30, 2019, our indebtedness associated with financing our inventory and working capital needs totaled approximately $289.8 million. As of June 30, 2018 and 2019, the interest rate on the outstanding short-term borrowings was approximately 5.1% and 5.9%, respectively. As of June 30, 2019, our additional available borrowings under our Amended Credit Facility were approximately $37.6 million based upon the outstanding borrowing base availability.

As is common in our industry, we receive interest assistance directly from boat manufacturers, including Brunswick. The interest assistance programs vary by manufacturer, but generally include periods of free financing or reduced interest rate programs. The interest assistance may be paid directly to us or our lender depending on the arrangements the manufacturer has established. We classify interest assistance received from manufacturers as a reduction of inventory cost and related cost of sales as opposed to netting the assistance against our interest expense incurred with our lenders.

The availability and costs of borrowed funds can adversely affect our ability to obtain adequate boat inventory and the holding costs of that inventory as well as the ability and willingness of our customers to finance boat purchases. As of June 30, 2019, we had no long-term debt. However, we rely on our Amended Credit Facility to purchase our inventory of boats. The aging of our inventory limits our borrowing capacity as defined curtailments reduce the allowable advance rate as our inventory ages. Our access to funds under our Amended Credit Facility also depends upon the ability of our lenders to meet their funding commitments, particularly if they experience shortages of capital or experience excessive volumes of borrowing requests from others during a short period of time. Unfavorable economic conditions, weak consumer spending, turmoil in the credit markets, and lender difficulties, among other potential reasons, could interfere with our ability to utilize our Amended Credit Facility to fund our operations. Any inability to

utilize our Amended Credit Facility could require us to seek other sources of funding to repay amounts outstanding under the credit agreements or replace or supplement our credit agreements, which may not be possible at all or under commercially reasonable terms.

Similarly, decreases in the availability of credit and increases in the cost of credit adversely affect the ability of our customers to purchase boats from us and thereby adversely affect our ability to sell our products and impact the profitability of our finance and insurance activities.

 

v3.19.2
Stock-Based Compensation
9 Months Ended
Jun. 30, 2019
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]  
Stock-Based Compensation

9.

STOCK-BASED COMPENSATION:

We account for our stock-based compensation plans following the provisions of FASB Accounting Standards Codification 718, “Compensation — Stock Compensation” (“ASC 718”).  In accordance with ASC 718, we use the Black-Scholes valuation model for valuing all stock-based compensation and shares purchased under our Employee Stock Purchase Plan. We measure compensation for restricted stock awards and restricted stock units at fair value on the grant date based on the number of shares expected to vest and the quoted market price of our common stock. We recognize compensation cost for all awards in operations, net of estimated forfeitures, on a straight-line basis over the requisite service period for each separately vesting portion of the award.

During the three months ended June 30, 2018 and 2019, we recognized stock-based compensation expense of approximately $1.7 million and $1.8 million, respectively, and for the nine months ended June 30, 2018 and 2019, we recognized stock-based compensation expense of approximately $4.9 million and $5.0 million, respectively, in selling, general, and administrative expenses in the unaudited condensed consolidated statements of operations.

Cash received from option exercises under all share-based compensation arrangements and the employee stock purchase plan for the three months ended June 30, 2018 and 2019, was approximately $3.7 million and $0.5 million, respectively and for the nine months ended June 30, 2018 and 2019, was approximately $7.6 million and $2.3 million, respectively. We currently expect to satisfy share-based awards with registered shares available to be issued.

v3.19.2
The Incentive Stock Plans
9 Months Ended
Jun. 30, 2019
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]  
The Incentive Stock Plans

10.

THE INCENTIVE STOCK PLANS:

During February 2017, our shareholders approved a proposal to amend the 2011 Stock-Based Compensation Plan (“2011 Plan”) to increase the 2,200,456 share threshold by 1,000,000 shares to 3,200,456 shares.  During January 2011, our shareholders approved a proposal to authorize our 2011 Plan, which replaced our 2007 Incentive Compensation Plan (“2007 Plan”). Our 2011 Plan provides for the grant of stock options, stock appreciation rights, restricted stock, stock units, bonus stock, dividend equivalents, other stock related awards, and performance awards (collectively “awards”), that may be settled in cash, stock, or other property. Our 2011 Plan is designed to attract, motivate, retain, and reward our executives, employees, officers, directors, and independent contractors by providing such persons with annual and long-term performance incentives to expend their maximum efforts in the creation of shareholder value. Subsequent to the February 2017 amendment described above, the total number of shares of our common stock that may be subject to awards under the 2011 Plan is equal to 3,000,000 shares, plus: (i) any shares available for issuance and not subject to an award under the 2007 Plan, which was 200,456 shares at the time of approval of the 2011 Plan; (ii) the number of shares with respect to which awards granted under the 2011 Plan and the 2007 Plan terminate without the issuance of the shares or where the shares are forfeited or repurchased; (iii) with respect to awards granted under the 2011 Plan and the 2007 Plan, the number of shares that are not issued as a result of the award being settled for cash or otherwise not issued in connection with the exercise or payment of the award; and (iv) the number of shares that are surrendered or withheld in payment of the exercise price of any award or any tax withholding requirements in connection with any award granted under the 2011 Plan or the 2007 Plan. The 2011 Plan terminates in January 2021, and awards may be granted at any time during the life of the 2011 Plan. The dates on which awards vest are determined by the Board of Directors or the Plan Administrator. The Board of Directors has appointed the Compensation Committee as the Plan Administrator. The exercise prices of options are determined by the Board of Directors or the Plan Administrator and are at least equal to the fair market value of shares of common stock on the date of grant. The term of options under the 2011 Plan may not exceed ten years. The options granted have varying vesting periods. To date, we have not settled or been under any obligation to settle any awards in cash.

The following table summarizes activity from our incentive stock plans from September 30, 2018 through June 30, 2019:

 

 

 

Shares

Available

for Grant

 

 

Options Outstanding

 

 

Aggregate

Intrinsic Value

(in thousands)

 

 

Weighted

Average

Exercise

Price

 

 

Weighted

Average

Remaining Contractual

Life

 

Balance as of September 30, 2018

 

 

1,047,247

 

 

 

611,223

 

 

$

5,544

 

 

$

12.18

 

 

 

4.4

 

Options granted

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

 

 

Options cancelled/forfeited/expired

 

 

7,917

 

 

 

(7,917

)

 

 

-

 

 

 

5.23

 

 

 

 

 

Options exercised

 

 

-

 

 

 

(109,275

)

 

 

-

 

 

 

12.07

 

 

 

 

 

Restricted stock awards issued

 

 

(319,624

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

 

 

Restricted stock awards forfeited

 

 

9,550

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

 

 

Additional shares of stock issued

 

 

(7,806

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

 

 

Balance as of June 30, 2019

 

 

737,284

 

 

 

494,031

 

 

$

2,069

 

 

$

12.32

 

 

 

3.9

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Excercisable as of June 30, 2019

 

 

 

 

 

 

492,364

 

 

$

2,069

 

 

$

12.29

 

 

 

3.9

 

 

No options were granted for the nine months ended June 30, 2019. The weighted average grant date fair value of options granted during the three months ended June 30, 2018 was $8.42. The total intrinsic value of options exercised during the nine months ended June 30, 2018 and 2019, was $6.2 million and $1.3 million, respectively. The total fair value of options vested during the nine months ended June 30, 2018 and 2019, was approximately $1.3 million and $0, respectively.

 

We used the Black-Scholes model to estimate the fair value of options granted. The expected term of options granted is estimated based on historical experience. Volatility is based on the historical volatility of our common stock. The risk-free rate for periods within the contractual term of the options is based on the U.S. Treasury yield curve in effect at the time of grant.

 

The following are the weighted average assumptions used for each respective period:

 

 

Three Months Ended

 

Nine Months Ended

 

 

June 30,

 

June 30,

 

 

2018

 

 

2019

 

2018

 

 

2019

Dividend yield

 

0.0%

 

 

-

 

0.0%

 

 

-

Risk-free interest rate

 

2.7%

 

 

-

 

2.7%

 

 

-

Volatility

 

45.4%

 

 

-

 

45.4%

 

 

-

Expected life

 

5.0 years

 

 

-

 

5.0 years

 

 

-

v3.19.2
Employee Stock Purchase Plan
9 Months Ended
Jun. 30, 2019
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]  
Employee Stock Purchase Plan

11.

EMPLOYEE STOCK PURCHASE PLAN:

During February 2019, our shareholders approved a proposal to amend our 2008 Employee Stock Purchase Plan (“Stock Purchase Plan”) to increase the number of shares available under that plan by 500,000 shares. The Stock Purchase Plan as amended provides for up to 1,500,000 shares of common stock to be available for purchase by our regular employees who have completed at least one year of continuous service. In addition, there were 52,837 shares of common stock available under our 1998 Employee Stock Purchase Plan, which have been made available for issuance under our Stock Purchase Plan. The Stock Purchase Plan provides for implementation of annual offerings beginning on the first day of October in each of the years 2008 through 2027, with each offering terminating on September 30 of the following year. Each annual offering may be divided into two six-month offerings. For each offering, the purchase price per share will be the lower of: (i) 85% of the closing price of the common stock on the first day of the offering or (ii) 85% of the closing price of the common stock on the last day of the offering. The purchase price is paid through periodic payroll deductions not to exceed 10% of the participant’s earnings during each offering period. However, no participant may purchase more than $25,000 worth of common stock annually.

We used the Black-Scholes model to estimate the fair value of options granted to purchase shares issued pursuant to the Stock Purchase Plan. Volatility is based on the historical volatility of our common stock. The risk-free rate for periods within the contractual term of the options is based on the U.S. Treasury yield curve in effect at the time of grant.

The following are the weighted average assumptions used for each respective period:

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2018

 

 

2019

 

 

2018

 

 

2019

 

Dividend yield

 

0.0%

 

 

0.0%

 

 

0.0%

 

 

0.0%

 

Risk-free interest rate

 

1.9%

 

 

2.5%

 

 

1.6%

 

 

2.4%

 

Volatility

 

48.8%

 

 

45.3%

 

 

49.9%

 

 

48.2%

 

Expected life

 

Six months

 

 

Six months

 

 

Six months

 

 

Six months

 

 

As of June 30, 2019, we had issued 922,822 shares of common stock under our Stock Purchase Plan.

 

v3.19.2
Restricted Stock Awards
9 Months Ended
Jun. 30, 2019
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]  
Restricted Stock Awards

12.

RESTRICTED STOCK AWARDS:

We have granted non-vested (restricted) stock awards (“restricted stock”) and restricted stock units (“RSUs”) to employees and officers pursuant to the 2011 Plan and the 2007 Plan. The restricted stock awards and RSUs have varying vesting periods, but generally become fully vested between two and four years after the grant date, depending on the specific award, performance targets met for performance based awards granted to officers, and vesting period for time based awards. Officer performance based awards are granted at the target amount of shares that may be earned and the actual amount of the award earned generally could range from 0% to 200% of the target number of shares based on the actual specified performance target met. We accounted for the restricted stock awards granted using the measurement and recognition provisions of ASC 718. Accordingly, the fair value of the restricted stock awards, including performance based awards, is measured on the grant date and recognized in earnings over the requisite service period for each separately vesting portion of the award.

The following table summarizes restricted stock award activity from September 30, 2018 through June 30, 2019:

 

 

 

Shares/ Units

 

 

Weighted

Average Grant

Date Fair Value

 

Non-vested balance as of September 30, 2018

 

 

704,326

 

 

$

17.61

 

Changes during the period

 

 

 

 

 

 

 

 

Awards granted

 

 

319,824

 

 

$

20.89

 

Awards vested

 

 

(35,000

)

 

$

20.40

 

Awards forfeited

 

 

(9,550

)

 

$

18.56

 

Non-vested balance as of June 30, 2019

 

 

979,600

 

 

 

 

 

 

As of June 30, 2019, we had approximately $8.4 million of total unrecognized compensation cost, assuming applicable performance conditions are met, related to non-vested restricted stock awards. We expect to recognize that cost over a weighted average period of 2.2 years.

v3.19.2
Net Income Per Share
9 Months Ended
Jun. 30, 2019
Earnings Per Share [Abstract]  
Net Income Per Share

13.

NET INCOME PER SHARE:

The following table presents shares used in the calculation of basic and diluted net income per share:

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2018

 

 

2019

 

 

2018

 

 

2019

 

Weighted average common shares outstanding used in

   calculating basic income per share

 

 

22,399,079

 

 

 

22,243,895

 

 

 

22,185,736

 

 

 

22,619,802

 

Effect of dilutive options and non-vested restricted stock

   awards

 

 

783,467

 

 

 

577,307

 

 

 

758,845

 

 

 

593,181

 

Weighted average common and common equivalent shares

   used in calculating diluted income per share

 

 

23,182,546

 

 

 

22,821,202

 

 

 

22,944,581

 

 

 

23,212,983

 

 

For the three months ended June 30, 2018 and 2019, there were 110 and 10,068 weighted average shares related to options outstanding and non-vested restricted stock awards, respectively, that were not included in the computation of diluted income per share because the options’ exercise prices or assumed proceeds per share were greater than the average market price of our common

stock, and therefore, would have an anti-dilutive effect. For the nine months ended June 30, 2018 and 2019, there were 1,193 and 5,168 weighted average shares related to options outstanding and non-vested restricted stock awards, respectively, that were not included in the computation of diluted income per share because the options’ exercise prices or assumed proceeds per share were greater than the average market price of our common stock, and therefore, would have an anti-dilutive effect.

 

v3.19.2
Commitments and Contingencies
9 Months Ended
Jun. 30, 2019
Commitments And Contingencies Disclosure [Abstract]  
Commitments and Contingencies

14.

COMMITMENTS AND CONTINGENCIES:

We are party to various legal actions arising in the ordinary course of business. While it is not feasible to determine the actual outcome of these actions as of June 30, 2019, we believe that these matters should not have a material adverse effect on our unaudited condensed consolidated financial condition, results of operations, or cash flows.

 

v3.19.2
Basis of Presentation (Policies)
9 Months Ended
Jun. 30, 2019
Accounting Policies [Abstract]  
Fair Value of Financial Instruments The carrying amounts of our financial instruments reported on the balance sheet as of June 30, 2019, approximated fair value due either to length to maturity or existence of variable interest rates, which approximate prevailing market rates.
Use of Estimates

The preparation of unaudited condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the unaudited condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting periods. Significant estimates made by us in the accompanying unaudited condensed consolidated financial statements include valuation allowances, valuation of goodwill and intangible assets, valuation of long-lived assets, and valuation of accruals. Actual results could differ from those estimates.

Consolidation

In order to provide comparability between periods presented, certain amounts have been reclassified from the previously reported unaudited condensed consolidated financial statements to conform to the unaudited condensed consolidated financial statement presentation for the current period. The unaudited condensed consolidated financial statements include our accounts and the accounts of our subsidiaries, all of which are wholly owned. All significant intercompany transactions and accounts have been eliminated.

New Accounting Pronouncements

In May 2014, the FASB issued Accounting Standards Update No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” (“ASU 2014-09”), a converged standard on revenue recognition.  The new pronouncement requires revenue recognition to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.  The guidance also specifies the accounting for some costs to obtain or fulfill a contract with a customer, as well as enhanced disclosure requirements. The FASB also subsequently issued several amendments to the standard, including clarification on principal versus agent guidance, identifying performance obligations, and immaterial goods and services in a contract.

The new accounting standard update must be applied using either of the following transition methods: (i) a full retrospective approach reflecting the application of the standard in each prior reporting period with the option to elect certain practical expedients, or (ii) a modified retrospective approach with the cumulative effect of initially adopting the standard recognized at the date of adoption (which requires additional footnote disclosures).

The new accounting standard is effective for reporting periods beginning after December 15, 2017. We adopted the accounting standard effective October 1, 2018, using the modified retrospective approach applied only to contracts not completed as of the date of adoption, with no restatement of comparative periods. Therefore, the comparative information has not been adjusted and continues to be reported under ASC Topic 605. We recognized a net after-tax cumulative effect adjustment to retained earnings of $399,000 as of the date of adoption. The details and quantitative impacts of the significant changes are described below.

 

We previously recognized revenue for parts and service operations (boat maintenance and repairs) when the services were completed and recorded amounts due to us as receivables. Under ASC Topic 606, performance obligations associated with parts and service operations are satisfied over time, which results in the acceleration of revenue recognition, and amounts due to us are reflected as a contract asset until the right to such consideration becomes unconditional, at which time amounts due to us are reclassified to receivables.

 

Consolidated Balance Sheet Line Items

 

 

 

Impact of changes in accounting policies

 

 

 

 

 

 

 

Balances without

 

 

Impact of

 

 

 

 

 

 

 

adoption of ASC

 

 

adoption

 

June 30, 2019

 

As Reported

 

 

Topic 606

 

 

Higher/(Lower)

 

Inventories, net

 

$

434,729

 

 

$

435,032

 

 

$

(303

)

Prepaid expenses and other current assets

 

 

11,221

 

 

 

8,386

 

 

 

2,835

 

     Accounts payable

 

 

31,601

 

 

 

31,555

 

 

 

46

 

     Accrued expenses

 

 

37,359

 

 

 

35,563

 

 

 

1,796

 

     Deferred tax liabilities

 

 

1,284

 

 

 

1,147

 

 

 

137

 

     Retained earnings

 

$

195,770

 

 

$

195,217

 

 

$

553

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated Statements of Operations Line Items

 

 

 

Impact of changes in accounting policies

 

 

 

 

 

 

 

Balances without

 

 

Impact of

 

 

 

 

 

 

 

adoption of ASC

 

 

adoption

 

Three Months Ended June 30, 2019

 

As Reported

 

 

Topic 606

 

 

Higher/(Lower)

 

Revenue

 

$

383,494

 

 

$

383,040

 

 

$

454

 

Cost of sales

 

 

285,784

 

 

 

285,530

 

 

 

254

 

Income from operations

 

 

28,742

 

 

 

28,542

 

 

 

200

 

     Income before income tax provision

 

 

25,806

 

 

 

25,606

 

 

 

200

 

Income tax provision

 

 

6,719

 

 

 

6,673

 

 

 

46

 

Net Income

 

$

19,087

 

 

$

18,933

 

 

$

154

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Impact of changes in accounting policies

 

 

 

 

 

 

 

Balances without

 

 

Impact of

 

 

 

 

 

 

 

adoption of ASC

 

 

adoption

 

Nine Months Ended June 30, 2019

 

As Reported

 

 

Topic 606

 

 

Higher/(Lower)

 

Revenue

 

$

929,017

 

 

$

929,069

 

 

$

(52

)

Cost of sales

 

 

693,627

 

 

 

693,879

 

 

 

(252

)

Income from operations

 

 

47,954

 

 

 

47,754

 

 

 

200

 

     Income before income tax provision

 

 

39,469

 

 

 

39,269

 

 

 

200

 

Income tax provision

 

 

10,169

 

 

 

10,123

 

 

 

46

 

Net Income

 

$

29,300

 

 

$

29,146

 

 

$

154

 

 

Consolidated Statements of Cash flows

 

 

 

Impact of changes in accounting policies

 

 

 

 

 

 

 

Balances without

 

 

Impact of

 

 

 

 

 

 

 

adoption of ASC

 

 

adoption

 

Nine Months Ended June 30, 2019

 

As Reported

 

 

Topic 606

 

 

Higher/(Lower)

 

Net income

 

$

29,300

 

 

$

29,146

 

 

$

154

 

(Increase) decrease in —

 

 

 

 

 

 

 

 

 

 

 

 

Inventories, net

 

 

(41,591

)

 

 

(41,339

)

 

 

(252

)

Prepaid expenses and other assets

 

 

(5,777

)

 

 

(4,033

)

 

 

(1,744

)

Increase (decrease) in —

 

 

 

 

 

 

 

 

 

 

 

 

Accounts payable

 

 

7,909

 

 

 

7,863

 

 

 

46

 

Accrued expenses and other long-term liabilities

 

$

5,167

 

 

$

3,371

 

 

$

1,796

 

 

In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842)” (“ASU 2016-02”).  This update requires organizations to recognize lease assets and lease liabilities on the balance sheet and also disclose key information about leasing arrangements. ASU 2016-02 is effective for annual reporting periods beginning on or after December 15, 2018, and interim periods within those annual periods. Earlier application is permitted for all entities as of the beginning of an interim or annual period.  While we are continuing to evaluate the impact of the adoption of ASU 2016-02 on our unaudited condensed consolidated financial statements, we believe the adoption of ASU 2016-02 will have a significant and material impact to our unaudited condensed consolidated balance sheet given our current lease agreements for our leased retail locations.  We are continuing to evaluate the impact the adoption of ASU 2016-02 will have on our other unaudited condensed consolidated financial statements.  Based on our current assessment, we expect that most of our operating lease commitments will be subject to the new guidance and recognized as operating lease liabilities and right-of-use assets upon adoption, resulting in a material increase in the assets and liabilities recorded on our unaudited condensed consolidated balance sheet.

 

A subsequent amendment to the standard provides an additional and optional transition method that allows entities to initially apply the new standard at the adoption date and recognize a cumulative effect adjustment to the opening balance of retained earnings in the period of adoption. Consequently, an entity’s reporting for the comparative periods presented in the financial statements in which it adopts the new leases standard will continue to be in accordance with current GAAP (ASC Topic 840) if the optional transition method is elected. While we are still evaluating the method of adoption, we currently anticipate adopting the standard using the optional transition method with no restatement of comparative periods and a cumulative effect adjustment, if any, recognized as of the date of adoption. We are continuing our assessment, which may identify additional impacts this standard will have on our unaudited condensed consolidated financial statements and related disclosures and internal control over financial reporting. We plan to adopt ASU 2016-02 in fiscal 2020.

.

Revenue Recognition

The majority of our revenue is from contracts with customers for the sale of boats, motors, and trailers. We recognize revenue from boat, motor, and trailer sales upon transfer of control of the boat, motor, or trailer to the customer, which is generally upon acceptance or delivery to the customer. At the time of acceptance or delivery, the customer is able to direct the use of, and obtain substantially all of the benefits of the boat, motor, or trailer at such time. We recognize commissions earned from a brokerage sale when the related brokerage transaction closes upon transfer of control of the boat, motor, or trailer to the customer, which is generally upon acceptance or delivery to the customer.

We do not directly finance our customers’ boat, motor, or trailer purchases. In many cases, we assist with third-party financing for boat, motor, and trailer sales. We recognize commissions earned by us for placing notes with financial institutions in connection with customer boat financing when we recognize the related boat sales. Pursuant to negotiated agreements with financial institutions, we are charged back for a portion of these fees should the customer terminate or default on the related finance contract before it is outstanding for a stipulated minimum period of time.  We base the chargeback allowance, which was not material to the unaudited condensed consolidated financial statements taken as a whole as of June 30, 2019, on our experience with repayments or defaults on the related finance contracts. We recognize variable consideration from commissions earned on extended warranty service contracts sold on behalf of third-party insurance companies at generally the later of customer acceptance of the service contract terms as evidenced by contract execution or recognition of the related boat sale. We also recognize variable consideration from marketing fees earned on insurance products sold by third-party insurance companies at the later of customer acceptance of the insurance product as evidenced by contract execution or when the related boat sale is recognized.

We recognize revenue from parts and service operations (boat maintenance and repairs) over time as services are performed. Each boat maintenance and repair service is a single performance obligation that includes both the parts and labor associated with the service. Payment for boat maintenance and repairs is typically due upon the completion of the service, which is generally completed within a short period of time from contract inception. We satisfy our performance obligations, transfer control, and recognize revenue over time for parts and service operations because we are creating a contract asset with no alternative use and we have an enforceable right to payment for performance completed to date. Contract assets primarily relate to our right to consideration for work in process not yet billed at the reporting date associated with maintenance and repair services. We use an input method to recognize revenue and measure progress based on labor hours expended to satisfy the performance obligation at average labor rates. We have determined labor hours expended to be the relevant measure of work performed to complete the maintenance and repair service for the customer. As a practical expedient, since repair and maintenance service contracts have an original duration of one year or less, we do not consider the time value of money, and we do not disclose estimated revenue expected to be recognized in the future for performance obligations that are unsatisfied (or partially unsatisfied) at the end of the reporting period or when we expect to recognize such revenue. Contract assets, recorded in Prepaid expenses and other current assets, totaled approximately $2.7 million and $2.8 million as of October 1, 2018 (beginning of the period of adoption of ASC 606) and June 30, 2019, respectively.  

We recognize deferred revenue from service operations and slip and storage services over time on a straight-line basis over the term of the contract as our performance obligations are met. We recognize income from the rentals of chartering power and sailing yachts over time on a straight-line basis over the term of the contract as our performance obligations are met.

The following table sets forth percentages on the timing of revenue recognition for the three and nine months ended June 30, 2019.

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2019

 

 

2019

 

Goods and services transferred at a point in time

 

 

91.1

%

 

 

90.8

%

Goods and services transferred over time

 

 

8.9

%

 

 

9.2

%

     Total Revenue

 

 

100.0

%

 

 

100.0

%

Inventories

Inventory costs consist of the amount paid to acquire inventory, net of vendor consideration and purchase discounts, the cost of equipment added, reconditioning costs, and transportation costs relating to acquiring inventory for sale. We state new and used boat, motor, and trailer inventories at the lower of cost, determined on a specific-identification basis, or net realizable value.  We state parts and accessories at the lower of cost, determined on an average cost basis, or net realizable value.  We utilize our historical experience, the aging of the inventories, and our consideration of current market trends as the basis for determining a lower of cost or net realizable value valuation allowance.  As of September 30, 2018 and June 30, 2019, our lower of cost or net realizable value valuation allowance for new and used boat, motor, and trailer inventories was $1.5 million and $1.8 million, respectively. If events occur and market conditions change, causing the fair value to fall below carrying value, the lower of cost or net realizable value valuation allowance could increase.

Impairment of Long-Lived Assets

FASB Accounting Standards Codification 360-10-40, “Property, Plant, and Equipment - Impairment or Disposal of Long-Lived Assets” (“ASC 360-10-40”), requires that long-lived assets, such as property and equipment and purchased intangibles subject to amortization, be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of the asset is measured by comparison of its carrying amount to undiscounted future net cash flows the asset is expected to generate. If such assets are considered to be impaired, the impairment to be recognized is measured as the amount by which the carrying amount of the asset exceeds its fair market value. Estimates of expected future cash flows represent our best estimate based on currently available information and reasonable and supportable assumptions. Any impairment recognized in accordance with ASC 360-10-40 is permanent and may not be restored. The analysis is performed at a regional level for indicators of permanent impairment given the geographical interdependencies among our locations. Based upon our most recent analysis, we believe no impairment of long-lived assets existed as of June 30, 2019.

v3.19.2
New Accounting Pronouncements (Table)
9 Months Ended
Jun. 30, 2019
Accounting Standards Update 2014-09 [Member]  
Revenue Initial Application Period Cumulative Effect Transition [Line Items]  
Schedule of Impact of Adoption of New Revenue Standard

 

Consolidated Balance Sheet Line Items

 

 

 

Impact of changes in accounting policies

 

 

 

 

 

 

 

Balances without

 

 

Impact of

 

 

 

 

 

 

 

adoption of ASC

 

 

adoption

 

June 30, 2019

 

As Reported

 

 

Topic 606

 

 

Higher/(Lower)

 

Inventories, net

 

$

434,729

 

 

$

435,032

 

 

$

(303

)

Prepaid expenses and other current assets

 

 

11,221

 

 

 

8,386

 

 

 

2,835

 

     Accounts payable

 

 

31,601

 

 

 

31,555

 

 

 

46

 

     Accrued expenses

 

 

37,359

 

 

 

35,563

 

 

 

1,796

 

     Deferred tax liabilities

 

 

1,284

 

 

 

1,147

 

 

 

137

 

     Retained earnings

 

$

195,770

 

 

$

195,217

 

 

$

553

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated Statements of Operations Line Items

 

 

 

Impact of changes in accounting policies

 

 

 

 

 

 

 

Balances without

 

 

Impact of

 

 

 

 

 

 

 

adoption of ASC

 

 

adoption

 

Three Months Ended June 30, 2019

 

As Reported

 

 

Topic 606

 

 

Higher/(Lower)

 

Revenue

 

$

383,494

 

 

$

383,040

 

 

$

454

 

Cost of sales

 

 

285,784

 

 

 

285,530

 

 

 

254

 

Income from operations

 

 

28,742

 

 

 

28,542

 

 

 

200

 

     Income before income tax provision

 

 

25,806

 

 

 

25,606

 

 

 

200

 

Income tax provision

 

 

6,719

 

 

 

6,673

 

 

 

46

 

Net Income

 

$

19,087

 

 

$

18,933

 

 

$

154

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Impact of changes in accounting policies

 

 

 

 

 

 

 

Balances without

 

 

Impact of

 

 

 

 

 

 

 

adoption of ASC

 

 

adoption

 

Nine Months Ended June 30, 2019

 

As Reported

 

 

Topic 606

 

 

Higher/(Lower)

 

Revenue

 

$

929,017

 

 

$

929,069

 

 

$

(52

)

Cost of sales

 

 

693,627

 

 

 

693,879

 

 

 

(252

)

Income from operations

 

 

47,954

 

 

 

47,754

 

 

 

200

 

     Income before income tax provision

 

 

39,469

 

 

 

39,269

 

 

 

200

 

Income tax provision

 

 

10,169

 

 

 

10,123

 

 

 

46

 

Net Income

 

$

29,300

 

 

$

29,146

 

 

$

154

 

 

Consolidated Statements of Cash flows

 

 

 

Impact of changes in accounting policies

 

 

 

 

 

 

 

Balances without

 

 

Impact of

 

 

 

 

 

 

 

adoption of ASC

 

 

adoption

 

Nine Months Ended June 30, 2019

 

As Reported

 

 

Topic 606

 

 

Higher/(Lower)

 

Net income

 

$

29,300

 

 

$

29,146

 

 

$

154

 

(Increase) decrease in —

 

 

 

 

 

 

 

 

 

 

 

 

Inventories, net

 

 

(41,591

)

 

 

(41,339

)

 

 

(252

)

Prepaid expenses and other assets

 

 

(5,777

)

 

 

(4,033

)

 

 

(1,744

)

Increase (decrease) in —

 

 

 

 

 

 

 

 

 

 

 

 

Accounts payable

 

 

7,909

 

 

 

7,863

 

 

 

46

 

Accrued expenses and other long-term liabilities

 

$

5,167

 

 

$

3,371

 

 

$

1,796

 

 

v3.19.2
Revenue Recognition (Tables)
9 Months Ended
Jun. 30, 2019
Revenue From Contract With Customer [Abstract]  
Summary of Percentage on Timing of Revenue Recognition

The following table sets forth percentages on the timing of revenue recognition for the three and nine months ended June 30, 2019.

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2019

 

 

2019

 

Goods and services transferred at a point in time

 

 

91.1

%

 

 

90.8

%

Goods and services transferred over time

 

 

8.9

%

 

 

9.2

%

     Total Revenue

 

 

100.0

%

 

 

100.0

%

v3.19.2
The Incentive Stock Plans (Tables)
9 Months Ended
Jun. 30, 2019
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]  
Incentive Stock Plans Activity

The following table summarizes activity from our incentive stock plans from September 30, 2018 through June 30, 2019:

 

 

 

Shares

Available

for Grant

 

 

Options Outstanding

 

 

Aggregate

Intrinsic Value

(in thousands)

 

 

Weighted

Average

Exercise

Price

 

 

Weighted

Average

Remaining Contractual

Life

 

Balance as of September 30, 2018

 

 

1,047,247

 

 

 

611,223

 

 

$

5,544

 

 

$

12.18

 

 

 

4.4

 

Options granted

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

 

 

Options cancelled/forfeited/expired

 

 

7,917

 

 

 

(7,917

)

 

 

-

 

 

 

5.23

 

 

 

 

 

Options exercised

 

 

-

 

 

 

(109,275

)

 

 

-

 

 

 

12.07

 

 

 

 

 

Restricted stock awards issued

 

 

(319,624

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

 

 

Restricted stock awards forfeited

 

 

9,550

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

 

 

Additional shares of stock issued

 

 

(7,806

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

 

 

Balance as of June 30, 2019

 

 

737,284

 

 

 

494,031

 

 

$

2,069

 

 

$

12.32

 

 

 

3.9

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Excercisable as of June 30, 2019

 

 

 

 

 

 

492,364

 

 

$

2,069

 

 

$

12.29

 

 

 

3.9

 

Weighted Average Assumptions of Incentive Stock Plans

The following are the weighted average assumptions used for each respective period:

 

 

Three Months Ended

 

Nine Months Ended

 

 

June 30,

 

June 30,

 

 

2018

 

 

2019

 

2018

 

 

2019

Dividend yield

 

0.0%

 

 

-

 

0.0%

 

 

-

Risk-free interest rate

 

2.7%

 

 

-

 

2.7%

 

 

-

Volatility

 

45.4%

 

 

-

 

45.4%

 

 

-

Expected life

 

5.0 years

 

 

-

 

5.0 years

 

 

-

v3.19.2
Employee Stock Purchase Plan (Tables)
9 Months Ended
Jun. 30, 2019
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]  
Weighted Average Assumptions of Employee Stock Purchase Plan

The following are the weighted average assumptions used for each respective period:

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2018

 

 

2019

 

 

2018

 

 

2019

 

Dividend yield

 

0.0%

 

 

0.0%

 

 

0.0%

 

 

0.0%

 

Risk-free interest rate

 

1.9%

 

 

2.5%

 

 

1.6%

 

 

2.4%

 

Volatility

 

48.8%

 

 

45.3%

 

 

49.9%

 

 

48.2%

 

Expected life

 

Six months

 

 

Six months

 

 

Six months

 

 

Six months

 

v3.19.2
Restricted Stock Awards (Tables)
9 Months Ended
Jun. 30, 2019
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]  
Restricted Stock Award Activity

The following table summarizes restricted stock award activity from September 30, 2018 through June 30, 2019:

 

 

 

Shares/ Units

 

 

Weighted

Average Grant

Date Fair Value

 

Non-vested balance as of September 30, 2018

 

 

704,326

 

 

$

17.61

 

Changes during the period

 

 

 

 

 

 

 

 

Awards granted

 

 

319,824

 

 

$

20.89

 

Awards vested

 

 

(35,000

)

 

$

20.40

 

Awards forfeited

 

 

(9,550

)

 

$

18.56

 

Non-vested balance as of June 30, 2019

 

 

979,600

 

 

 

 

 

v3.19.2
Net Income Per Share (Tables)
9 Months Ended
Jun. 30, 2019
Earnings Per Share [Abstract]  
Basic and Diluted Net Income Per Share

The following table presents shares used in the calculation of basic and diluted net income per share:

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2018

 

 

2019

 

 

2018

 

 

2019

 

Weighted average common shares outstanding used in

   calculating basic income per share

 

 

22,399,079

 

 

 

22,243,895

 

 

 

22,185,736

 

 

 

22,619,802

 

Effect of dilutive options and non-vested restricted stock

   awards

 

 

783,467

 

 

 

577,307

 

 

 

758,845

 

 

 

593,181

 

Weighted average common and common equivalent shares

   used in calculating diluted income per share

 

 

23,182,546

 

 

 

22,821,202

 

 

 

22,944,581

 

 

 

23,212,983

 

v3.19.2
Company Background - Additional Information (Detail)
12 Months Ended
Sep. 30, 2018
Sep. 30, 2017
Sep. 30, 2016
Jun. 30, 2019
Store
State
Concentration Risk [Line Items]        
Number of retail locations | Store       67
Number of states wherein retail locations are established | State       16
Product Concentration Risk [Member] | Brunswick [Member] | Sales [Member]        
Concentration Risk [Line Items]        
Revenue percentage from sale of boats 40.00%      
Product Concentration Risk [Member] | Brunswick Sea Ray Boat [Member] | Brunswick [Member] | Sales [Member]        
Concentration Risk [Line Items]        
Revenue percentage from sale of boats 21.00%      
Product Concentration Risk [Member] | Brunswick Boston Whaler Boats [Member] | Brunswick [Member] | Sales [Member]        
Concentration Risk [Line Items]        
Revenue percentage from sale of boats 17.00%      
Product Concentration Risk [Member] | Brunswick Sea Ray Sport Yacht and Yacht Models [Member] | Brunswick [Member] | Sales [Member]        
Concentration Risk [Line Items]        
Revenue percentage from sale of boats 10.00%      
Product Concentration Risk [Member] | Azimut Benetti Groups | Sales [Member]        
Concentration Risk [Line Items]        
Revenue percentage from sale of boats 11.00%      
Supplier Concentration Risk [Member] | Brunswick [Member] | Sales [Member]        
Concentration Risk [Line Items]        
Revenue percentage from sale of boats 42.00%      
Geographic Concentration Risk [Member] | Sales [Member] | Florida [Member]        
Concentration Risk [Line Items]        
Revenue percentage from sale of boats 51.00% 55.00% 55.00%  
v3.19.2
Basis of Presentation - Additional Information (Detail)
9 Months Ended
Jun. 30, 2019
Dealer
Operations
Organization Consolidation And Presentation Of Financial Statements [Abstract]  
Previously independent recreational boat dealers | Dealer 5
Recreational boat dealers | Dealer 29
Boat brokerage operations | Operations 2
Full-service yacht repair operations | Operations 2
v3.19.2
New Accounting Pronouncements - Additional Information (Detail) - USD ($)
Jun. 30, 2019
Oct. 01, 2018
Sep. 30, 2018
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]      
Cumulative effect adjustment to retained earnings, net of tax as a result of adopting new standard $ 195,770,000   $ 166,071,000
Accounting Standards Update 2014-09 [Member] | Difference between Revenue Guidance in Effect before and after Topic 606 [Member]      
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]      
Cumulative effect adjustment to retained earnings, net of tax as a result of adopting new standard $ 553,000 $ 399,000  
v3.19.2
New Accounting Pronouncements - Schedule of Impact of Adoption of New Revenue Standard on Consolidated Balance Sheet Line Items (Detail) - USD ($)
Jun. 30, 2019
Oct. 01, 2018
Sep. 30, 2018
Revenue Initial Application Period Cumulative Effect Transition [Line Items]      
Inventories, net $ 434,729,000   $ 377,074,000
Prepaid expenses and other current assets 11,221,000   5,392,000
Accounts payable 31,601,000   23,134,000
Accrued expenses 37,359,000   32,926,000
Deferred tax liabilities 1,284,000    
Retained earnings 195,770,000   $ 166,071,000
Balances without adoption of ASC Topic 606 [Member] | Accounting Standards Update 2014-09 [Member]      
Revenue Initial Application Period Cumulative Effect Transition [Line Items]      
Inventories, net 435,032,000    
Prepaid expenses and other current assets 8,386,000    
Accounts payable 31,555,000    
Accrued expenses 35,563,000    
Deferred tax liabilities 1,147,000    
Retained earnings 195,217,000    
Impact of adoption Higher/(Lower) [Member] | Accounting Standards Update 2014-09 [Member]      
Revenue Initial Application Period Cumulative Effect Transition [Line Items]      
Inventories, net (303,000)    
Prepaid expenses and other current assets 2,835,000    
Accounts payable 46,000    
Accrued expenses 1,796,000    
Deferred tax liabilities 137,000    
Retained earnings $ 553,000 $ 399,000  
v3.19.2
New Accounting Pronouncements - Schedule of Impact of Adoption of New Revenue Standard on Consolidated Statements of Operations Line Items (Detail) - USD ($)
$ in Thousands
3 Months Ended 9 Months Ended
Jun. 30, 2019
Mar. 31, 2019
Dec. 31, 2018
Jun. 30, 2018
Mar. 31, 2018
Dec. 31, 2017
Jun. 30, 2019
Jun. 30, 2018
Revenue Initial Application Period Cumulative Effect Transition [Line Items]                
Revenue $ 383,494     $ 361,254     $ 929,017 $ 868,780
Cost of sales 285,784     270,567     693,627 649,551
Income from operations 28,742     26,598     47,954 46,235
Income before income tax provision 25,806     24,099     39,469 38,354
Income tax provision 6,719     6,723     10,169 10,582
Net income 19,087 $ 5,303 $ 4,910 $ 17,376 $ 6,184 $ 4,212 29,300 $ 27,772
Balances without adoption of ASC Topic 606 [Member] | Accounting Standards Update 2014-09 [Member]                
Revenue Initial Application Period Cumulative Effect Transition [Line Items]                
Revenue 383,040           929,069  
Cost of sales 285,530           693,879  
Income from operations 28,542           47,754  
Income before income tax provision 25,606           39,269  
Income tax provision 6,673           10,123  
Net income 18,933           29,146  
Impact of adoption Higher/(Lower) [Member] | Accounting Standards Update 2014-09 [Member]                
Revenue Initial Application Period Cumulative Effect Transition [Line Items]                
Revenue 454           (52)  
Cost of sales 254           (252)  
Income from operations 200           200  
Income before income tax provision 200           200  
Income tax provision 46           46  
Net income $ 154           $ 154  
v3.19.2
New Accounting Pronouncements - Schedule of Impact of Adoption of New Revenue Standard on Consolidated Statements of Cash Flows (Detail) - USD ($)
$ in Thousands
9 Months Ended
Jun. 30, 2019
Jun. 30, 2018
Revenue Initial Application Period Cumulative Effect Transition [Line Items]    
Net income $ 29,300 $ 27,772
(Increase) decrease in —    
Inventories, net (41,591) 24,386
Prepaid expenses and other assets (5,777) (417)
Increase (decrease) in —    
Accounts payable 7,909 (5,686)
Accrued expenses and other long-term liabilities 5,167 $ 4,636
Balances without adoption of ASC Topic 606 [Member] | Accounting Standards Update 2014-09 [Member]    
Revenue Initial Application Period Cumulative Effect Transition [Line Items]    
Net income 29,146  
(Increase) decrease in —    
Inventories, net (41,339)  
Prepaid expenses and other assets (4,033)  
Increase (decrease) in —    
Accounts payable 7,863  
Accrued expenses and other long-term liabilities 3,371  
Impact of adoption Higher/(Lower) [Member] | Accounting Standards Update 2014-09 [Member]    
Revenue Initial Application Period Cumulative Effect Transition [Line Items]    
Net income 154  
(Increase) decrease in —    
Inventories, net (252)  
Prepaid expenses and other assets (1,744)  
Increase (decrease) in —    
Accounts payable 46  
Accrued expenses and other long-term liabilities $ 1,796  
v3.19.2
Revenue Recognition - Additional Information (Detail) - USD ($)
$ in Millions
9 Months Ended
Jun. 30, 2019
Oct. 01, 2018
Revenue From Contract With Customer [Abstract]    
Contract assets recorded in prepaid expenses and other current assets $ 2.8 $ 2.7
Revenue remaining obligation description As a practical expedient, since repair and maintenance service contracts have an original duration of one year or less, we do not consider the time value of money, and we do not disclose estimated revenue expected to be recognized in the future for performance obligations that are unsatisfied (or partially unsatisfied) at the end of the reporting period or when we expect to recognize such revenue.  
v3.19.2
Revenue Recognition - Summary of Percentage on Timing of Revenue Recognition (Details)
3 Months Ended 9 Months Ended
Jun. 30, 2019
Jun. 30, 2019
Disaggregation Of Revenue [Line Items]    
Total Revenue 100.00% 100.00%
Goods and Services Transferred at a Point in Time [Member]    
Disaggregation Of Revenue [Line Items]    
Total Revenue 91.10% 90.80%
Goods and Services Transferred Over Time [Member]    
Disaggregation Of Revenue [Line Items]    
Total Revenue 8.90% 9.20%
v3.19.2
Inventories - Additional Information (Detail) - USD ($)
$ in Millions
Jun. 30, 2019
Sep. 30, 2018
Inventory Disclosure [Abstract]    
Inventories valuation allowance, net realizable value $ 1.8 $ 1.5
v3.19.2
Impairment of Long-Lived Assets - Additional Information (Detail)
9 Months Ended
Jun. 30, 2019
USD ($)
Asset Impairment Charges [Abstract]  
Impairment charges $ 0
v3.19.2
Income Taxes - Additional Information (Detail) - USD ($)
3 Months Ended 9 Months Ended
Jun. 30, 2019
Jun. 30, 2018
Dec. 31, 2017
Jun. 30, 2019
Jun. 30, 2018
Sep. 30, 2018
Income Taxes [Line Items]            
Valuation allowance on deferred tax assets $ 119,000     $ 119,000   $ 119,000
Income tax provision $ 6,719,000 $ 6,723,000   $ 10,169,000 $ 10,582,000  
Effective income tax rate 26.00% 27.90%   25.80% 27.60%  
Federal corporate tax rate     35.00% 21.00%    
Tax Cuts and Jobs Act [Member]            
Income Taxes [Line Items]            
Reduction in beginning deferred tax assets         $ 889,000  
Increase in income tax provision         $ 889,000  
v3.19.2
Short-Term Borrowings - Additional Information (Detail) - USD ($)
9 Months Ended
Jun. 30, 2019
Jun. 30, 2018
Oct. 31, 2018
May 31, 2017
Line Of Credit Facility [Line Items]        
Additional borrowings $ 37,600,000      
Long-term debt $ 0      
Minimum [Member]        
Line Of Credit Facility [Line Items]        
Current ratio 1.20%      
Borrowing Base Amount and Aging Inventory [Member]        
Line Of Credit Facility [Line Items]        
Inventory and working capital needs $ 289,800,000      
Interest rate on short-term borrowings 5.90% 5.10%    
Amended Credit Facility [Member]        
Line Of Credit Facility [Line Items]        
Additional extension for two one-year periods Oct. 31, 2021      
Interest rate for amounts outstanding under the Amended Credit Facility 3.45%      
Amended Credit Facility [Member] | Borrowing Base Amount and Aging Inventory [Member]        
Line Of Credit Facility [Line Items]        
Amount of borrowing availability     $ 400,000,000.0 $ 350,000,000.0
Line of Credit Facility, Description The October 2018 amendment and restatement extended the maturity date of the Credit Facility to October 2021, and the Amended Credit Facility includes two additional one-year extension periods, with lender approval.      
Leverage ratio 2.75%      
Credit Facility interest rate description The interest rate for amounts outstanding under the Amended Credit Facility is 345 basis points above the one-month London Inter-Bank Offering Rate (“LIBOR”).      
Debt instrument, covenant compliance The covenants include provisions that our leverage ratio must not exceed 2.75 to 1.0 and that our current ratio must be greater than 1.2 to 1.0.      
Unused line fee on the unused portion of the amended Credit Facility 0.10%      
Advances on new inventory mature date 1080 days      
Advances on used inventory maturity period 361 days      
Advance is subject to a curtailment schedule, periodic basis 6 months      
Real estate property pledged for collateral $ 0      
v3.19.2
Stock-Based Compensation - Additional Information (Detail) - USD ($)
$ in Thousands
3 Months Ended 9 Months Ended
Jun. 30, 2019
Jun. 30, 2018
Jun. 30, 2019
Jun. 30, 2018
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]        
Net proceeds from issuance of common stock under incentive compensation and employee purchase plans $ 500 $ 3,700 $ 2,341 $ 7,604
Selling, General, and Administrative Expenses [Member]        
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]        
Stock-based compensation expense, approximately $ 1,800 $ 1,700 $ 5,000 $ 4,900
v3.19.2
The Incentive Stock Plans - Additional Information (Detail) - USD ($)
1 Months Ended 3 Months Ended 9 Months Ended
Feb. 28, 2017
Jun. 30, 2018
Jun. 30, 2019
Jun. 30, 2018
Jan. 31, 2011
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]          
Options granted       0  
Weighted average grant fair value of options granted   $ 8.42      
Total intrinsic value of options exercised     $ 1,300,000 $ 6,200,000  
Fair value of options vested     $ 0 $ 1,300,000  
Incentive Stock Plan 2011 [Member]          
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]          
Common stock, shares authorized         2,200,456
Additional common shares authorized 1,000,000        
Expiration of Plan 2011     2021-01    
Contractual term of plan 2011     10 years    
Incentive Stock Plan 2011 [Member] | Subject To Award [Member]          
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]          
Common stock, shares authorized     3,000,000    
Incentive Stock Plan 2011 [Member] | Maximum [Member]          
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]          
Common stock, shares authorized 3,200,456        
Incentive Stock Plan 2007 [Member]          
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]          
Number of Common stock shares available     200,456    
v3.19.2
The Incentive Stock Plans - Summary of Option Activity (Detail) - USD ($)
$ / shares in Units, $ in Thousands
9 Months Ended 12 Months Ended
Jun. 30, 2019
Jun. 30, 2018
Sep. 30, 2018
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]      
Options granted, Options Outstanding   0  
Stock Options [Member]      
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]      
Shares Available for Grant, Beginning Balance 1,047,247    
Options cancelled/forfeited/expired, Shares Available for Grant 7,917    
Restricted stock awards issued, Shares Available for Grant (319,624)    
Restricted stock awards forfeited, Shares Available for Grant 9,550    
Additional shares of stock issued, Shares Available for Grant (7,806)    
Shares Available for Grant, Ending Balance 737,284   1,047,247
Options Outstanding, Beginning Balance 611,223    
Options cancelled/forfeited/expired, Options Outstanding (7,917)    
Options exercised, Options Outstanding (109,275)    
Options Outstanding, Ending Balance 494,031   611,223
Excercisable as of June 30, 2019, Options Outstanding 492,364    
Aggregate Intrinsic Value $ 2,069   $ 5,544
Excercisable as of June 30, 2019, Aggregate Intrinsic Value $ 2,069    
Weighted Average Exercise Price, Beginning Balance $ 12.18    
Options cancelled/forfeited/expired, Weighted Average Exercise Price 5.23    
Options exercised, Weighted Average Exercise Price 12.07    
Weighted Average Exercise Price, Ending Balance 12.32   $ 12.18
Excercisable as of June 30, 2019, Weighted Average Exercise Price $ 12.29    
Weighted Average Remaining Contractual Life 3 years 10 months 24 days   4 years 4 months 24 days
Excercisable as of June 30, 2019, Weighted Average Remaining Contractual Life 3 years 10 months 24 days    
v3.19.2
The Incentive Stock Plans - Weighted Average Assumptions of Incentive Stock Plans (Detail) - Incentive Stock Plans
3 Months Ended 9 Months Ended
Jun. 30, 2018
Jun. 30, 2018
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]    
Dividend yield 0.00% 0.00%
Risk-free interest rate 2.70% 2.70%
Volatility 45.40% 45.40%
Expected life 5 years 5 years
v3.19.2
Employee Stock Purchase Plan - Additional Information (Detail) - USD ($)
1 Months Ended 9 Months Ended
Feb. 28, 2019
Jun. 30, 2019
Sep. 30, 2018
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]      
Common stock, shares issued   27,355,635 27,141,267
Stock Purchase Plan [Member]      
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]      
Additional common shares authorized 500,000    
Common stock available for issuance   1,500,000  
Stock Purchase Plan, requisite continuous service   1 year  
Annual offerings description   implementation of annual offerings beginning on the first day of October in each of the years 2008 through 2027, with each offering terminating on September 30 of the following year.  
Closing price of common stock on the first and last day of the offering   85.00%  
Percentage not exceeding to periodic payment of purchase price   10.00%  
Maximum common stock value purchased by participant annually   $ 25,000  
Common stock, shares issued   922,822  
1998 Employee Stock Purchase Plan [Member]      
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]      
Additional Common Shares Authorized   52,837  
v3.19.2
Employee Stock Purchase Plan - Weighted Average Assumptions of Employee Stock Purchase Plan (Detail) - Stock Purchase Plan [Member]
3 Months Ended 9 Months Ended
Jun. 30, 2019
Jun. 30, 2018
Jun. 30, 2019
Jun. 30, 2018
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]        
Dividend yield 0.00% 0.00% 0.00% 0.00%
Risk-free interest rate 2.50% 1.90% 2.40% 1.60%
Volatility 45.30% 48.80% 48.20% 49.90%
Expected life 6 months 6 months 6 months 6 months
v3.19.2
Restricted Stock Awards - Additional Information (Detail) - Restricted Stock Awards [Member]
$ in Millions
9 Months Ended
Jun. 30, 2019
USD ($)
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]  
Unrecognized compensation cost related to non-vested restricted stock awards $ 8.4
Weighted average period unrecognized compensation costs related to non-vested restricted awards are expected to be recognized 2 years 2 months 12 days
Minimum [Member]  
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]  
Vesting periods of restricted stock award 2 years
Percentage of actual amount of award earned based on actual specified performance target met 0.00%
Maximum [Member]  
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]  
Vesting periods of restricted stock award 4 years
Percentage of actual amount of award earned based on actual specified performance target met 200.00%
v3.19.2
Restricted Stock Awards - Restricted Stock Award Activity (Detail) - Restricted Stock Awards [Member]
9 Months Ended
Jun. 30, 2019
$ / shares
shares
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]  
Shares/ Units, Non-vested beginning balance 704,326
Shares/ Units, Awards granted 319,824
Shares/ Units, Awards vested (35,000)
Shares/ Units, Awards forfeited (9,550)
Shares/ Units, Non-vested ending balance 979,600
Weighted Average Grant Date Fair Value, Non-vested beginning balance | $ / shares $ 17.61
Weighted Average Grant Date Fair Value, Awards granted | $ / shares 20.89
Weighted Average Grant Date Fair Value, Awards vested | $ / shares 20.40
Weighted Average Grant Date Fair Value, Awards forfeited | $ / shares $ 18.56
v3.19.2
Net Income Per Share - Basic and Diluted Net Income Per Share (Detail) - shares
3 Months Ended 9 Months Ended
Jun. 30, 2019
Jun. 30, 2018
Jun. 30, 2019
Jun. 30, 2018
Earnings Per Share [Abstract]        
Weighted average common shares outstanding used in calculating basic income per share 22,243,895 22,399,079 22,619,802 22,185,736
Effect of dilutive options and non-vested restricted stock awards 577,307 783,467 593,181 758,845
Weighted average common and common equivalent shares used in calculating diluted income per share 22,821,202 23,182,546 23,212,983 22,944,581
v3.19.2
Net Income Per Share - Additional Information (Detail) - shares
3 Months Ended 9 Months Ended
Jun. 30, 2019
Jun. 30, 2018
Jun. 30, 2019
Jun. 30, 2018
Stock Options and Non-Vested Restricted Stock Awards [Member]        
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]        
Anti-dilutive securities excluded from earnings per share calculation 10,068 110 5,168 1,193