MarineMax Inc (HZO) 2021 Q1 法說會逐字稿

Greetings, and welcome to the MarineMax Fiscal First Quarter 2021 Earnings Conference Call. (Operator Instructions) As a reminder, this conference is being recorded.

It is now my pleasure to turn the call over to Dawn Francfort, Head of Investor Relations. Please go ahead.

Thank you, operator. Good morning, everyone, and thank you for joining this discussion of MarineMax's Fiscal First Quarter 2021 Conference Call. I'm sure that you've all received a copy of the press release that went out this morning. But if not, please call Linda Cameron at (727) 531-1712, and she will e-mail one to you right away.

I now would like to introduce the management team of MarineMax, Mr. Brett McGill, President and Chief Executive Officer; and Mr. Mike McLamb, Chief Financial Officer of the company.

Management will make a few comments about the quarter and then be available for your questions.

And with that in mind, let me turn the call over to Mike McLamb. Mike?

Thank you, Dawn. Good morning, everyone, and thank you for joining this call. Before I turn the call over to Brett, I'd like to tell you that certain of our comments are forward-looking statements as defined by the Private Securities Litigation Reform Act. These statements involve risks and uncertainties that could cause actual results to differ materially from expectations. These risks include, but are not limited to, the impact of seasonality and weather, general economic conditions and the level of consumer spending, the company's ability to capitalize on opportunity or grow its market share, and numerous other factors identified in our Form 10-K and other filings with the Securities and Exchange Commission.

With that in mind, I'd like to turn the call over to Brett. Brett?

Thank you, Mike, and good morning, everyone. Let me start by thanking the MarineMax team for their focus and commitment, which drove our record-setting results to start fiscal 2021. We have worked hard over the years to build the most experienced industry-leading team, and I am very proud of their results.

Today, I would like to start by reviewing a few of our first quarter highlights. Then I will touch on how we are strategically approaching the important peak selling season as well as discussing the meaningful opportunities in front of us to create growth and long-term shareholder value. And finally, Mike will review the financial results in greater detail and provide some color on the balance of the year.

Let me start by reviewing the first quarter. Our top priority continues to be the health and safety of our team, customers and community, as we serve our customers' boating needs. We are pleased that our first quarter results greatly exceeded the very impressive results last year. A year ago, we had very strong growth in the December quarter and set a record for revenue and earnings. The MarineMax team significantly outperformed those results and raised the bar yet again. We further strengthened our financial position during the quarter while completing the very strategic acquisition of SkipperBud's, the largest acquisition for the company to date. As we indicated on our last earnings call in October, we finished fiscal 2020 with the highest revenue and earnings in the company's history. That momentum in industry demand has continued, as shown by our results. Our record results continue to demonstrate our team's ability to evaluate customers' need, act quickly and implement the right changes in how we operate our business. For the quarter, we are particularly pleased with our continued solid performance in same-store sales, which increased over 20%, which is on top of 24% same-store sales growth a year ago. Importantly, our new unit growth was even stronger at 35%. Furthermore, in the quarter, we had meaningful growth across essentially all brands, category and geographic region. The marine industry continues to experience a significant acceleration in new customers. This new foundational layer of customers to the boating lifestyle is comprised of a combination of new first-time buyers and people that decided to go -- get back into boating, which should help support future growth as they migrate to larger or different types of products in the coming years. Our team remains energized by the shift. And given our scale, we should continue to significantly benefit from this resurgence.

During the quarter, we also leveraged our investments in technology, driving leads in marketing analytics, which is converting into sales. We continue to make investments in world-class customer engagement tools that improve our team's efficiency and effectiveness and help us to take share and lead the industry. In the quarter, we added SkipperBud's and its affiliate, Silver Seas Yachts, to our family. The acquisition added 20 locations, including 11 marina and storage operations. We have successfully integrated the business and believe many opportunities exist to share best practices, brands and resources to drive even greater growth in the years to come. From a profitability perspective, one of the best elements of the quarter was strong gross margin. We benefited from increases in product margins, growth in our storage and service businesses, our asset-light Fraser and Northrop & Johnson global charter businesses and our finance and insurance businesses. Expanding our margins has been a long-term strategic focus and recent acquisitions have contributed to that strategy. The combination of gross margin expansion and focused expense management resulted in considerable leverage and a record $1.04 of EPS for the quarter. But even more impressive is that we believe there is incremental growth ahead.

So now let me touch on how we are approaching the important peak selling season. We are well positioned and prepared to serve our customers. COVID has changed all aspects of customer expectations, including the historically important boat shows. Our team has adapted with greater digital capabilities and refocused marketing spend that leverages our stores and our online experience, generating exceptional results. Beyond leaner industry inventory, we continue to invest in training and tools to ensure our team is able to pivot to continue to meet the needs of our customers digitally. Our deep manufacturing relationships and nationwide shared inventory give us a competitive edge. With the largest selling season ahead, we expect to build on the strong start to our fiscal year and deliver exceptional customer experiences. Our strategy to create long-term shareholder value is focused on driving top-line growth, operating leverage, disciplined capital management and building on our strong culture. We continue to effectively execute on our multifaceted growth strategy supported by our global market presence, premium brands, exceptional customer service and ongoing investments in technology. Our focus on driving margins and improving costs continues to unlock significant leverage in our model. Our performance illustrates the power of our business model, specifically our scale, premium location and cash flow generating capabilities. MarineMax is a well-disciplined operator with a strong foundation from which to grow.

With that update, I will ask Mike to provide more detailed comments on the quarter. Mike?

Thank you, Brett, and good morning, again, everyone. I would also like to start by thanking our team for their tremendous efforts that produced record revenue and earnings to start the year. For the quarter, revenue grew 35% to over $411 million due largely to same-store sales growth of 20%. This exceptional growth was driven by even greater comparable new unit growth that exceeded 35%. While our AUP declined in the quarter from seasonally very strong sales of smaller products, the demand for larger product is also robust. A big takeaway from our results this quarter is our ability to post very strong comps on top of already strong comps. Our gross profit dollars increased over $43 million, while our gross margin rose 370 basis points to 30%.

Our record gross margin was due to a handful of factors. Among these are improving margins on new and used boat sales, impressive service and storage performance at SkipperBud's, which has a long track record of performance in these categories, growth in our higher-margin finance and insurance businesses and growth in our brokerage business, including our global superyacht services organizations of Northrop & Johnson and Fraser Yachts. We would note that the superyacht charter business has remained adversely impacted by travel bans around the globe. Our higher-margin businesses have been a focus of ours for some time, including our acquisition strategy, which is helping to drive these results. Regarding SG&A, the majority of the increase was due to the increase in sales and the related commissions, combined with the 2 mergers we have recently completed, SkipperBud's and Northrop & Johnson. Interest expense dropped in the quarter due to lower interest rates and a sizable reduction in short-term borrowings given the cash we have generated. Our operating leverage in the quarter was over 17%, which drove very strong earnings growth, setting another quarterly record with pretax earnings of almost $31 million. Our record December quarter saw both net income and earnings per share more than double, with EPS hitting $1.04, more than twice the level of last year's previous record.

Moving on to our balance sheet. We continue to build cash with about $121 million at quarter end versus $36 million a year ago, even after paying cash for both Northrop & Johnson in July and SkipperBud's October 1. As discussed last quarter, given the attractive interest rate environment, we explored and did secure mortgages on a portion of our sizable real estate portfolio. Besides some slight rate arbitrage, it further positions us to capitalize on opportunities as they develop. Our inventory at quarter end was down 23% to $379 million. However, excluding Skipper's, our inventory is down closer to 36%.

I illustrate this point to show how well our team has pivoted to selling in a lean inventory environment, as proven by the very strong unit-driven same-store sales growth this quarter. Looking at our liabilities, despite added borrowings for Skipper's inventory, short-term borrowings decreased $171 million due largely to a reduction in inventories and an increase in cash generation with a contribution from the roughly $53 million of mortgages that are outstanding. Customer deposits, while not the best predictor of near-term sales because they can be lumpy due to the size of deposits and whether trade is involved or not, nearly tripled in size due to the timing of large yacht orders and more robust sales, along with the contribution from Skipper's for future sales. Our current ratio stands at 1.74, and our total liabilities to tangible net worth ratio is 1.42. Both of these are very impressive balance sheet metrics.

Our tangible net worth was $339 million or about $14.92 per share. Our balance sheet has always been a formidable strategic advantage, and today more than ever, it continues to protect us in uncertain times while providing the capital for expansion as opportunities arise.

Turning to guidance. The December quarter exceeded expectations and the industry trends remain strong. Industry estimates for 2021 retail units are beginning to rise from the low single digits to the mid-single digits. Since we usually outperform the industry and grow our AUP on an annual basis, we now expect our annual same-store sales growth to be in the high single digits. This is up from the mid- to high single digits we guided to earlier in the year. Given the strength in earnings in December, our guidance also assumes modest operating leverage improvement above our previous guidance. This expectation assumes we reach the low end of our historical targeted leverage of 12% to 17%, given we have the bulk of the year still in front of us, along with continued uncertainty. Accordingly, we are raising our earnings per share guidance to the range of $4 to $4.20 for 2021 from our earlier guidance of $3.70 to $3.90.

Our guidance excludes the impact from any potential acquisitions that we may complete. As we progress through the year, we will provide updates as needed to our guidance. Looking at the remainder of 2021, remember that our March quarter is the easiest comparison with our toughest comparisons in the more meaningful summer quarters of June and September. Our guidance uses a share count of about 22.8 million shares and an effective tax rate of 26%. Our tax rate for the December quarter was meaningfully better than this due primarily to equity compensation deductions, which are hard to predict and are not typically forecasted when we give guidance.

Turning to current trends. January will close with positive same-store sales and our backlog is meaningfully higher than last year. As we have said, industry trends remain strong, and we are generally outperforming these elevated levels. We continue to feel good as we enter the important summer selling season, but it's early in the year and a lot of work remains.

With those comments, I'll turn the call back over to Brett for some closing comments. Brett?

Thank you, Mike. MarineMax continues to benefit and capitalize on the surge in demand and the desire of consumers to find a safe recreational activity. Our team's performance to start the fiscal year has shown continued excellent execution, even on top of very impressive same-store sales a year ago. We are creating exceptional customer experiences through our teams, services, products and technology. Most exciting is that we see significant opportunity in our brand expansion and also our higher-margin businesses. With about 30 locations globally, we believe our superyacht services business have considerable upside, including their charter business, which should contribute in a much larger manner. We remain committed to the long-term financial strength of the company by driving cash flow growth. Importantly, our acquisitions are integrated and contributing immediately to our business. Looking forward, we are focused on building our strong team culture. We are focused on executing on our growth strategy, and we are focused on creating long-term shareholder value.

With that, operator, let's open up the call for questions.

(Operator Instructions) Our first question today is coming from Joe Altobello from Raymond James.

First question on the guide for '21. I guess, Mike, you mentioned that you're still looking for flow-through this year to be at the lower end of that 12% to 17%. We just did 17% plus in Q1. So I'm curious why you're still thinking low end of that range? Is it conservatism? Is there something that you're expecting that's going to weigh on margins in the balance of the year?

No. I think it's just, it's early in the year, we have 1 quarter under our belt. We're certainly aiming to achieve higher than that. But like I said, it's early in the year. And we need to get through the March quarter and get into the June quarter and address things at that point in time.

Got it. And just secondly, is there anything to take away from the jump in customer deposits and the lower ASPs, perhaps in terms of the composition of your buyer or the type of boat they're buying? Or is it just noise in a small quarter?

Well, no, I think -- I actually -- customer deposits, we do say they're lumpy, and we've said that for years, and it's hard to kind of see real solid trends from that. But I think it clearly points to everything that we said in the release, and we said in these prepared remarks, I mean, industry trends are and continue to be pretty darn solid. So it does reflect the increased backlog that we have, and this time of the year is seasonally very strong.

And Joe, I'll comment on the average price. I think that's probably just a little bit of noise in the quarter, some volume, closing, timing of the boat deals, those sort of things.

Our next question is coming from James Hardiman from Wedbush Securities.

So obviously another great quarter here. My first question, and I think I probably know the answer to this one, but you increased your guide by about $0.30 at the midpoint. You beat Street numbers by, call it, $0.40 to $0.45. So all else equal, the signal here is that we should be lowering our estimates for the balance of the year. Is that the way that you're actually thinking about it? Obviously, you don't give quarterly guidance. But how are you thinking about adjustments to the balance of the year?

Yes. So really, it's kind of similar to what I said to Joe. It's early in the year, and we have 3 quarters ahead of us. We've completed 1 quarter. We hope to keep updating our guidance and looking at trends as we move through March into June and September quarter. Certainly from an operational perspective, we're driving every day to keep creating more and more business throughout the March quarter and also the summertime.

Okay. That's what I thought. And then obviously, some really great margin performance here. I think one of the challenges across the board with the stock market right now is trying to discern how much is sort of pandemic surge related? And how much of an ongoing benefit there is longer term? Is there any way to think about teasing out, I guess, a, the promotional environment is pretty favorable as we stand here today. So I guess that being number one, huge leverage benefits. But then you've also brought in some higher-margin businesses as well. I guess what I'm trying to figure out is, when all the dust settles versus historical margin level should we be assuming that your sort of sustainable margin number is considerably higher?

I can take a stab and Brett can chime in if he wants to. But I commented about kind of 3 different components that help to drive the gross margin expansion and roughly a little bit less than 1/3 is due to new and used boat pricing in this environment. And then the other 2/3 is due to our efforts, including our acquisition strategy. But our efforts around growing our higher-margin businesses, whether it's our brokerage business internally or by adding Northrop & Johnson and Fraser, or if it's adding SkipperBud's, which does have a bigger element of storage. And of course, we've been adding marinas within the core business of MarineMax, too. But -- and so I'd tell you, at least in the quarter, actually, about 2/3 is unrelated to the -- if you would say, the more robust sales environment.

Okay. So if I think about, I guess, looking specifically at gross margins that over the last decade have been anywhere from 24% to 26%, so call it, mid-20s. Should we now be thinking about that as sort of mid- to high 20s going forward?

I can tell you, we've got a lot of goals internally to keep driving our margin up. I'll tell you, specifically in our guidance other than the benefit that we got in the March quarter, we aren't really tweaking margins up meaningfully in our guidance. We will continue to evaluate margins as we move through the year. But I think that's some potential upside if we execute properly from a margin perspective.

Yes. And James, I'll add that as you can see with our acquisition strategy and the businesses, we're kind of continuing to grow with. Obviously, there's a strategic move to move that upward as well, not just benefiting from low inventory, high margin, low discounting environment. That's helping right now. But when we come out of that, when that may normalize, our strategic moves we're making should continue to help us.

Got it. And then lastly for me. I mean, there's this pervasive bear case, I think, across a lot of big-ticket discretionary categories that a bunch of people will have bought, in this case, boats in 2020 and then get the boat home and somehow say oops and realize that they made a huge mistake. Can you speak at all to just the satisfaction of new boat buyers? Obviously, since you're as close to them as anybody and sort of the likelihood that these people are going to, down the line, bail and ultimately put that boat on the used market a lot more quickly than has historically been the case.

Yes. Good question. We keep getting that same one. But with our strategy for really since -- ever since we formed MarineMax was to service the customer second to none. There's no question and we're ramping up our service efforts, trying to keep people happy. Our Net Promoter Scores reflect that everybody is happy and the ones that need more attention, we're getting that to them, but also our getaways and event strategy. We get them out boating, get them in safe, socially distanced environments where they can enjoy their boat that -- you get them out using their boat, you take good care of them, and then you don't have that scenario that you talked about when they said oops. And that's pretty rare. People -- once they get into the boating lifestyle, they really enjoy it. There clearly could be a cycle when they want out, but those are opportunities for us as well in our brokerage market, but there won't be a flood of people.

Your next question is coming from Eric Wold from B. Riley FBR.

A couple of questions. I guess, one, can you give us a sense of what you would normally spend on boat shows, I guess this quarter specifically and then I guess, maybe overall? And just how much of that is being reinvested into an enhanced virtual experiences or kind of alternative ways to reach customers? I guess, net-net, kind of what could you "save" if there's no loss of sales or delta in sales because of this?

Yes, I can comment and Brett can chime in if you -- also. But I did comment on a call not long ago that we spend double-digit millions in boat shows. It's not a small number. The biggest quarter for that spend is in the March quarter. We are allocating more of those dollars to our digital spend and also the events and experiences and in-store activities, as Brett just alluded to. There certainly is the potential to have some savings that come out -- a net savings that comes out of that. I think it all depends on how well we execute on our strategies and what the results are from the different events and what other events we may need to do. We have not baked into our guidance -- again, other than any savings we may have had in the December quarter. We've not baked in any significant savings from boat show costs in the forward quarters.

Yes, we -- Eric, I'll chime in, we want to realize some savings. There's no question about it. But we also want to continue to keep the excitement up for our customers. So these in-store events, we keep having more private showings over a longer period of days. And those events to hold them socially distanced and have them spread out over several days, those are a little more costly than -- but it doesn't clearly add up to a boat show. But it's hard to quantify because we pull the marketing levers as we need. And we can create an in-store event and have hundreds of customers show up over a couple of weeks. It's pretty powerful.

And do you expect to come out of this as you kind of come out of this boat show season kind of then look towards next year's boat show season, do you expect to come out of this with a different mindset towards how you would tackle physical boat shows? Do some boat shows in certain cities maybe not become relevant anymore? Do you go at them with a smaller footprint? How do you think about that?

I think all shows will look much differently in the future, which will be better for the consumer. I think people that didn't go this year realized they probably didn't need to go. Let's make them real good events to show people what's new in the market and save everybody a little bit of money and actually make a better experience for the customer. So they'll change; what it will look like, we don't know. But we're working hard with the industry to work -- fix that.

Okay. And then just final question. As your cash balance continues to improve, are you using floor financing at the same level that you historically have for new inventory? I guess, is the return on cash better invested in inventory or held for acquisitions or other opportunities? Or is that somewhat irrelevant given the quick turns you're actually seeing in inventory right now, so that decision is kind of made for you?

No. Great question, Eric. And generally, throughout a period, our excess cash is applied against our outstanding floor plan, just to save whatever rate is there as we're looking for other opportunities to get different returns either through acquisitions or investing in our stores. But no, you're right. We do. We take advantage of it and pay down. You can see a pretty substantial savings in interest year-over-year despite paying the cash that we did for SkipperBud's and also Northrop & Johnson and adding the inventory for Skipper's, and that's because of what you're saying. We are taking advantage of the cash and paying down the line.

Our next question is coming from Fred Wightman from Wolfe Research.

Just a quick housekeeping question first. Did you give that customer deposit number on an organic basis? I assume it reflects some SkipperBud's contribution, but do you have that organically?

You know what, I don't have it in front of me. What I could tell you is while Skipper's has a contribution, it would still be catching everybody's attention today. Our customer deposits organically are up substantially.

Okay. That's helpful. And if we go back to last quarter, you talked about the industry potentially growing low single digit to mid-single digit this year. It sounds like you moved that up a little bit and are now sort of in that mid-single-digit range. But if we take a step back and look at what SSI was for 4Q and December specifically, is there a chance that, that target winds up being conservative?

I think -- Fred, I think there's a chance for sure. And I think everybody in the industry is doing all they can to make it conservative. Trends -- the industry is up against pretty good comps in the summertime, but just given where trends have been today. And I'll remind everybody, in the December quarter that we just announced, so last year, MarineMax, not the industry, but MarineMax, had 24% same-store sales growth, driven by 24% unit growth. This year, we had 20% overall same-store sales growth, but our unit growth was 35%. And so I think as we move through the year, it'd be great to be able to update you guys and see unit trends continuing. But I think we've got 1 quarter behind us. There are still 3 quarters in front of us, including some pretty big comps, but let's cross those bridges when we get to them.

Fair. And then just finally on the inventory side, I think you gave the organic number as down 36%, so a little bit better than where you guys were last quarter. But some of the language in the Brunswick release today makes it sound like they think it could be sort of '22 or maybe even later until we're back to whatever a normalized level will be. Do you think that, that time line and time horizon makes sense just from an inventory replenishment and restocking time frame?

Yes. I'll take a stab. Yes. But just given trends and what's happening in the industry, I think that estimate is as good as any. Trends continue to be very strong. Product coming in is going out. I mean, keep in mind, our September quarter, we were down roughly 40% in dollars and roughly 40% in December on an organic basis, yet we still drove really strong unit growth. So the manufacturers, and we think we're working with the best manufacturers, they're getting us the product. It's coming in, sold. It's going out. Our team is doing a really good job.

Demand continues to be good. We watch our lead activity and the activity on our website, and it's at very good levels and increasing, so we like what we're seeing.

Our next question is coming from Scott Stember from CL King & Associates.

Could you maybe talk about the current trends? You said that they're, sound like they're up solidly, up nicely. Last quarter, you talked about how seasonally things were better than normal; even in the North [reaches], it sounds like people don't want to get boxed out of getting a boat this season. But can you maybe just talk about what some of the lead times are? And then also maybe just, yes, talk about how strong seasonally things are?

Yes. I think I'll let Mike talk on lead time specifically. I think we mentioned it a little bit, but our ability to -- with our inventory across the country and the ability to share that inventory and the information we have in front of our sales team to know that a boat's maybe earmarked to head to a Florida store, but a Minnesota customer wants it, we can sell it quickly, route it there. So we're not experiencing that. What we're seeing is if somebody says, look, I want to buy a boat and have it ready for March or April, we can make that happen. And as quick as boats are landing on our showroom floors, they're going out to the customer. So we're finding that's a pretty good thing. There are some really hot models out there that are sold out for way out in advance, and that's a good thing. But people seem to be willing to wait, and it also seems like we're willing to hit their time frames of when they want their new boat.

Yes. I was going to comment on the hot models. You already covered that. And then it does seem like consumers are aware of how the industry sits, and they do almost come in with more of a mindset of let me get in the line to get the boat. And depending on the boat, we may be able to meet their needs a lot sooner, but it just depends on the model.

Okay. And just the last question. I appreciate you guys are -- obviously want to be conservative for the back half of the year primarily, but the second quarter coming up. How should we be thinking about that as far as -- since you already talked about January being very strong, maybe contextualize it versus a year ago or even versus the first quarter?

Yes. I can give you a little color. I think we probably said this, if you go back and look at our April transcript for the March quarter, we've already said it, that our December quarter was quite strong. Our January and February last year was actually very strong. So we are again comping positively against pretty darn good comps in January last year. Where things really declined was the month of March with COVID. So I think for the overall quarter, I think we're up 1% as a comparison versus last year. So it's the easiest comp. So if you think about just spreading out the year, we're saying high single digit, call it, 9% or 8% or however you guys model it. But my guess is you'll put a good chunk of it in March and then try to spread the rest of it throughout the summertime.

Our next question is coming from Mike Swartz from Truist Securities.

Just maybe touching on SkipperBud's. And I think Mike, you said a number of things just related to the P&L impact in the quarter. I think you said they were accretive to gross margin, but sounds like it's a seasonally small quarter. And obviously, with the overhead of the 20 stores, it sounds like that was somewhat of an offset. So I guess the question is, was Skipper's profitable in the quarter? And then maybe how do we think about the seasonality and the profitability of that business over the next couple of quarters?

Good question. Yes, they were profitable in the quarter. It is their smallest quarter, which is true for the industry. And they generally follow the industry trends, if -- you guys all follow the industry, kind of their smallest quarter is December. March quarter is a little bit bigger. June is a very big quarter, and September is a decent-sized quarter for them. So they're probably a little more seasonal than even the industry data, but that's a pretty good benchmark if you just model that for them.

Okay. Okay. That's great. And then just on backlog. Maybe just help us understand it. I think you said backlog is up, but really, how relevant is backlog right now, just given the lead times, given the backlogs that are out there? Is it relevant to compare this year versus last year from that standpoint?

I think -- actually, I think you're on a really important topic. I think a lot of people do focus on our customer deposits, and I understand why. But I think our commentary is really what people should always listen to, and our commentary is pretty clearly that the industry is pretty strong right now. And the January current trends, I think Scott had just asked about current trends, current trends are very robust. People are still coming into the industry. I know there was some thought from some folks that, gosh, maybe this was a June quarter event last year, September quarter event last year, but just given how strong the industry data was for October, November, December, granted in a small quarter, the commentary that we're saying, probably the commentary that Brunswick's saying, this is much longer than just a poof, summertime of 2021. It's much more sustainable. Word-of-mouth is spreading. Friends are spending time on friends' boats, then that friend wants to buy their own boat. So it's got a grassroots legs to it, which I think is going to help fuel growth for a lot longer than just the near term, but it's very positive for the industry.

And our website traffic and lead traffic is up substantially in January here.

Our final question today is coming from Brandon Rolle from Northcoast Research.

Congrats on the strong quarter. I was going to ask you guys to touch on the SkipperBud's acquisition and just how they've been able to capitalize with their storage business on the surge of new buyers? And if you could also touch on just the availability of used inventory and pricing as we enter the first quarter of the year.

Well, yes, Skipper's was a very strategic acquisition for us for a lot of reasons. They were one of the largest -- they are the largest out there, and joined our family. And they brought to us everything we've been working on, higher-margin businesses, storage, just like you pointed out, and it flowed through properly in the December quarter. It's -- they continue to sell boats and they have storage facilities for those people to take care of them in the winter. So it's playing out just as we had planned and expected. And to your comment on -- or question on used inventory, it's light. It's tough to get a hold of. Our brokerage business is also doing well. So it's -- I think it's a good -- used is going very well. But obviously, right now, you can always handle a few more used boats. And when I say that, we're also getting a lot of customers that are new to boating, so you don't have trades in that case.

Okay. Great. And also just on the new customers, are you seeing people that were first-time buyers this summer coming back to maybe trade up to a larger unit? Or are most people just realizing the backlog's out for many months, and they're just keeping the boat they have at the moment?

We're definitely -- so I don't have any analytical data on that, but we're definitely seeing people already who bought last summer coming back saying, "Hey, maybe I should get something on order that's a little different style of boat or a little bit larger, I can sleep on it now." So it's -- we're seeing more of that than probably people would expect, and that's a good thing.

We've reached end of our question-and-answer session. I'd like to turn the floor back over to management for any further or closing comments.

Well, thank you, everybody, for joining the call and taking the time with us today. And Mike and I will both be available if you have any additional questions today, and we look forward to updating you on our next call.

Thank you. That does conclude today's teleconference. You may disconnect your line at this time, and have a wonderful day. We thank you for your participation today.