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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2021.

Commission File Number. 1-14173

MARINEMAX, INC.

(Exact Name of Registrant as Specified in Its Charter)

Florida | 59-3496957 |
(State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification Number)
2600 McCormick Drive, Suite 200 |
Clearwater, Florida | 33759
(Address of Principal Executive Offices) | (ZIP Code)

727-531-1700

(Registrant’s Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class | Trading Symbol(s) | Name of each exchange on which registered
Common Stock, par value $.001 per share | HZO | New York Stock Exchange

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer |  | ☐ |  | Accelerated filer |  | ☒
Non-accelerated filer |  | ☐ |  | Smaller reporting company |  | ☐
|  |  |  | Emerging growth company |  | ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☒

The number of outstanding shares of the registrant’s Common Stock on April 23, 2021 was 22,154,420 .

MARINEMAX, INC. AND SUBSIDIARIES

Table of Contents

Item No. | Page
PART I. FINANCIAL INFORMATION |
1. | Financial Statements (Unaudited): |  |
| Condensed Consolidated Statements of Operations for the Three and Six Months Ended March 31, 2020 and 2021 |  | 3
| Condensed Consolidated Statements of Comprehensive Income for the Three and Six Months Ended March 31, 2020 and 2021 |  | 4
| Condensed Consolidated Balance Sheets as of September 30, 2020 and March 31, 2021 |  | 5
| Condensed Consolidated Statements of Shareholders’ Equity for the Six Months Ended March 31, 2020 and 2021 |  | 6
| Condensed Consolidated Statements of Cash Flows for the Six Months Ended March 31, 2020 and 2021 |  | 7
| Notes to Condensed Consolidated Financial Statements |  | 8
2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |  | 19
3. | Quantitative and Qualitative Disclosures About Market Risk |  | 23
4. | Controls and Procedures |  | 24
PART II. OTHER INFORMATION | 24
1. | Legal Proceedings |  | 24
1A. | Risk Factors |  | 24
2. | Unregistered Sales of Equity Securities and Use of Proceeds |  | 25
3. | Defaults Upon Senior Securities |  | 25
4. | Mine Safety Disclosures |  | 25
5. | Other Information |  | 25
6. | Exhibits |  | 25
SIGNATURES |  | 26
EX – 31.1 |
EX – 31.2 |
EX – 32.1 |
EX – 32.2 |
EX – 101 INSTANCE DOCUMENT |
EX – 101 SCHEMA DOCUMENT |
EX – 101 CALCULATION LINKBASE DOCUMENT |
EX – 101 DEFINITION LINKBASE DOCUMENT |
EX – 101 LABEL LINKBASE DOCUMENT |
EX – 101 PRESENTATION LINKBASE DOCUMENT |

2

PART I. FINANCIAL INFORMATION

ITEM 1. Financial Statements

MARINEMAX, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Operations

(Amounts in thousands, except share and per share data)

(Unaudited)

|  | Three Months Ended |  |  | Six Months Ended |  |
|  | March 31, |  |  | March 31, |  |
|  | 2020 |  |  | 2021 |  |  | 2020 |  |  | 2021 |  |
Revenue |  | $ | 308,475 |  |  | $ | 523,095 |  |  | $ | 612,647 |  |  | $ | 934,618 |  |
Cost of sales |  |  | 229,699 |  |  |  | 366,289 |  |  |  | 453,853 |  |  |  | 654,411 |  |
Gross profit |  |  | 78,776 |  |  |  | 156,806 |  |  |  | 158,794 |  |  |  | 280,207 |  |
Selling, general, and administrative expenses |  |  | 69,060 |  |  |  | 103,936 |  |  |  | 133,446 |  |  |  | 195,354 |  |
Income from operations |  |  | 9,716 |  |  |  | 52,870 |  |  |  | 25,348 |  |  |  | 84,853 |  |
Interest expense |  |  | 3,013 |  |  |  | 1,092 |  |  |  | 6,357 |  |  |  | 2,360 |  |
Income before income tax provision |  |  | 6,703 |  |  |  | 51,778 |  |  |  | 18,991 |  |  |  | 82,493 |  |
Income tax provision |  |  | 1,638 |  |  |  | 12,843 |  |  |  | 4,867 |  |  |  | 19,958 |  |
Net income |  | $ | 5,065 |  |  | $ | 38,935 |  |  | $ | 14,124 |  |  | $ | 62,535 |  |
Basic net income per common share |  | $ | 0.24 |  |  | $ | 1.76 |  |  | $ | 0.66 |  |  | $ | 2.83 |  |
Diluted net income per common share |  | $ | 0.23 |  |  | $ | 1.69 |  |  | $ | 0.64 |  |  | $ | 2.73 |  |
Weighted average number of common shares used in computing net income per common share: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Basic |  |  | 21,520,215 |  |  |  | 22,143,043 |  |  |  | 21,486,995 |  |  |  | 22,083,827 |  |
Diluted |  |  | 21,960,285 |  |  |  | 22,986,061 |  |  |  | 21,925,105 |  |  |  | 22,864,950 |  |

See accompanying notes to condensed consolidated financial statements.

3

MARINEMAX, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Comprehensive Income

(Amounts in thousands)

(Unaudited)

| Three Months Ended |  |  | Six Months Ended |
| March 31, |  |  | March 31, |
| 2020 |  |  | 2021 |  |  | 2020 |  |  | 2021 |
Net income | $ | 5,065 |  |  | $ | 38,935 |  |  | $ | 14,124 |  |  | $ | 62,535 |
Other comprehensive (loss) gain, net of tax: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Foreign currency translation adjustments |  | (450 | ) |  |  | (1,032 | ) |  |  | 156 |  |  |  | 83 |
Interest rate swap contract |  | — |  |  |  | 388 |  |  |  | — |  |  |  | 193 |
Total other comprehensive income, net of tax |  | (450 | ) |  |  | (644 | ) |  |  | 156 |  |  |  | 276 |
Comprehensive income | $ | 4,615 |  |  | $ | 38,291 |  |  | $ | 14,280 |  |  | $ | 62,811 |

See accompanying notes to condensed consolidated financial statements.

4

MARINEMAX, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(Amounts in thousands, except share data)

(Unaudited)

|  | September 30, |  |  | March 31, |
|  | 2020 |  |  | 2021 |
ASSETS |  |  |  |  |  |  |  |
CURRENT ASSETS: |  |  |  |  |  |  |  |
Cash and cash equivalents |  | $ | 155,493 |  |  | $ | 142,888 |
Accounts receivable, net |  |  | 40,195 |  |  |  | 54,489 |
Inventories, net |  |  | 298,002 |  |  |  | 302,979 |
Prepaid expenses and other current assets |  |  | 9,637 |  |  |  | 14,698 |
Total current assets |  |  | 503,327 |  |  |  | 515,054 |
Property and equipment, net of accumulated depreciation of $86,270 and $92,352 |  |  | 141,934 |  |  |  | 151,254 |
Operating lease right-of-use assets, net |  |  | 37,991 |  |  |  | 106,348 |
Goodwill and other intangible assets, net |  |  | 84,293 |  |  |  | 142,152 |
Other long-term assets |  |  | 7,774 |  |  |  | 10,318 |
Total assets |  | $ | 775,319 |  |  | $ | 925,126 |
LIABILITIES AND SHAREHOLDERS’ EQUITY |  |  |  |  |  |  |  |
CURRENT LIABILITIES: |  |  |  |  |  |  |  |
Accounts payable |  | $ | 37,343 |  |  | $ | 23,280 |
Contract liabilities (customer deposits) |  |  | 31,821 |  |  |  | 83,357 |
Accrued expenses |  |  | 52,123 |  |  |  | 84,536 |
Short-term borrowings |  |  | 144,393 |  |  |  | 35,762 |
Current maturities on long-term debt |  |  | — |  |  |  | 2,802 |
Current operating lease liabilities |  |  | 6,854 |  |  |  | 10,439 |
Total current liabilities |  |  | 272,534 |  |  |  | 240,176 |
Long-term debt, net of current maturities |  |  | 7,343 |  |  |  | 49,440 |
Noncurrent operating lease liabilities |  |  | 33,473 |  |  |  | 98,276 |
Deferred tax liabilities, net |  |  | 4,509 |  |  |  | 6,501 |
Other long-term liabilities |  |  | 2,063 |  |  |  | 7,429 |
Total liabilities |  |  | 319,922 |  |  |  | 401,822 |
COMMITMENTS AND CONTINGENCIES |  |  |  |  |  |  |  |
SHAREHOLDERS’ EQUITY: |  |  |  |  |  |  |  |
Preferred stock, $.001 par value, 1,000,000 shares authorized, none issued or outstanding as of September 30, 2020 and March 31, 2021 |  |  | — |  |  |  | — |
Common stock, $.001 par value, 40,000,000 shares authorized, 28,130,312 and 28,420,539 shares issued and 21,863,291 and 22,153,518 shares outstanding as of September 30, 2020 and March 31, 2021, respectively |  |  | 28 |  |  |  | 28 |
Additional paid-in capital |  |  | 280,436 |  |  |  | 285,532 |
Accumulated other comprehensive income |  |  | 829 |  |  |  | 1,105 |
Retained earnings |  |  | 277,699 |  |  |  | 340,234 |
Treasury stock, at cost, 6,267,021 and 6,267,021 shares held as of September 30, 2020 and March 31, 2021, respectively |  |  | (103,595 | ) |  |  | (103,595 | )
Total shareholders’ equity |  |  | 455,397 |  |  |  | 523,304 |
Total liabilities and shareholders’ equity |  | $ | 775,319 |  |  | $ | 925,126 |

See accompanying notes to condensed consolidated financial statements.

5

MARINEMAX, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Shareholders’ Equity

(Amounts in thousands, except share data)

(Unaudited)

|  |  |  |  |  |  |  |  |  | Additional |  |  | Accumulated Other |  |  |  |  |  |  |  |  |  |  | Total |
|  | Common Stock |  |  | Paid-in |  |  | Comprehensive |  |  | Retained |  |  | Treasury |  |  | Shareholders’ |
|  | Shares |  |  | Amount |  |  | Capital |  |  | Earnings |  |  | Earnings |  |  | Stock |  |  | Equity |
BALANCE, September 30, 2020 |  |  | 28,130,312 |  |  | $ | 28 |  |  | $ | 280,436 |  |  | $ | 829 |  |  | $ | 277,699 |  |  | $ | (103,595 | ) |  | $ | 455,397 |
Net income |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 23,600 |  |  |  | — |  |  |  | 23,600 |
Shares issued pursuant to employee stock purchase plan |  |  | 83,572 |  |  |  | — |  |  |  | 740 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 740 |
Shares issued upon vesting of equity awards, net of minimum tax withholding |  |  | 121,303 |  |  |  | — |  |  |  | (871 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (871 | )
Shares issued upon exercise of stock options |  |  | 56,746 |  |  |  | — |  |  |  | 783 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 783 |
Stock-based compensation |  |  | 1,777 |  |  |  | — |  |  |  | 2,013 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 2,013 |
Other comprehensive income |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 920 |  |  |  | — |  |  |  | — |  |  |  | 920 |
BALANCE, December 31, 2020 |  |  | 28,393,710 |  |  |  | 28 |  |  |  | 283,101 |  |  |  | 1,749 |  |  |  | 301,299 |  |  |  | (103,595 | ) |  |  | 482,582 |
Net income |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 38,935 |  |  |  | — |  |  |  | 38,935 |
Shares issued upon vesting of equity awards, net of minimum tax withholding |  |  | 9,899 |  |  |  | — |  |  |  | (154 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (154 | )
Shares issued upon exercise of stock options |  |  | 15,333 |  |  |  | — |  |  |  | 186 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 186 |
Stock-based compensation |  |  | 1,597 |  |  |  | — |  |  |  | 2,399 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 2,399 |
Other comprehensive income |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (644 | ) |  |  | — |  |  |  | — |  |  |  | (644 | )
BALANCE, March 31, 2021 |  |  | 28,420,539 |  |  | $ | 28 |  |  | $ | 285,532 |  |  | $ | 1,105 |  |  | $ | 340,234 |  |  | $ | (103,595 | ) |  | $ | 523,304 |

|  |  |  |  |  |  |  |  |  | Additional |  |  | Accumulated Other |  |  |  |  |  |  |  |  |  |  | Total |
|  | Common Stock |  |  | Paid-in |  |  | Comprehensive |  |  | Retained |  |  | Treasury |  |  | Shareholders’ |
|  | Shares |  |  | Amount |  |  | Capital |  |  | Earnings |  |  | Earnings |  |  | Stock |  |  | Equity |
BALANCE, September 30, 2019 |  |  | 27,508,473 |  |  | $ | 28 |  |  | $ | 269,969 |  |  | $ | (669 | ) |  | $ | 202,455 |  |  | $ | (102,964 | ) |  | $ | 368,819 |
Net income |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 9,059 |  |  |  | — |  |  |  | 9,059 |
Shares issued pursuant to employee stock purchase plan |  |  | 38,352 |  |  |  | — |  |  |  | 505 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 505 |
Shares issued upon vesting of equity awards, net of minimum tax withholding |  |  | 123,993 |  |  |  | — |  |  |  | (476 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (476 | )
Shares issued upon exercise of stock options |  |  | 13,000 |  |  |  | — |  |  |  | 111 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 111 |
Stock-based compensation |  |  | 2,946 |  |  |  | — |  |  |  | 1,513 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 1,513 |
Other comprehensive income |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 606 |  |  |  |  |  |  |  |  |  |  |  | 606 |
Cumulative effect of change in accounting principle - leases, net after tax |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 610 |  |  |  | — |  |  |  | 610 |
BALANCE, December 31, 2019 |  |  | 27,686,764 |  |  |  | 28 |  |  |  | 271,622 |  |  |  | (63 | ) |  |  | 212,124 |  |  |  | (102,964 | ) |  |  | 380,747 |
Net income |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 5,065 |  |  |  | — |  |  |  | 5,065 |
Purchase of treasury stock |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (472 | ) |  |  | (472 | )
Shares issued pursuant to employee stock purchase plan |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | - |
Shares issued upon exercise of stock options |  |  | 28,167 |  |  |  | — |  |  |  | 414 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 414 |
Stock-based compensation |  |  | 2,732 |  |  |  | — |  |  |  | 1,773 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 1,773 |
Foreign currency translation adjustments, net of tax |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (450 | ) |  |  | — |  |  |  | — |  |  |  | (450 | )
BALANCE, March 31, 2020 |  |  | 27,717,663 |  |  | $ | 28 |  |  | $ | 273,809 |  |  | $ | (513 | ) |  | $ | 217,189 |  |  | $ | (103,436 | ) |  | $ | 387,077 |

See accompanying notes to condensed consolidated financial statements.

6

MARINEMAX, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(Amounts in thousands, Unaudited)

|  | Six Months Ended March 31, |
|  | 2020 |  |  | 2021 |
CASH FLOWS FROM OPERATING ACTIVITIES: |  |  |  |  |  |  |  |
Net income |  | $ | 14,124 |  |  | $ | 62,535 |
Adjustments to reconcile net income to net cash (used in) provided by operating activities: |  |  |  |  |  |  |  |
Depreciation and amortization |  |  | 6,150 |  |  |  | 7,481 |
Deferred income tax provision |  |  | 1,469 |  |  |  | 1,992 |
(Loss) gain on sale of property and equipment |  |  | (824 | ) |  |  | 64 |
Proceeds from insurance settlements |  |  | 703 |  |  |  | 941 |
Stock-based compensation expense |  |  | 3,286 |  |  |  | 4,412 |
(Increase) decrease in, net of effects of acquisitions — |  |  |  |  |  |  |  |
Accounts receivable, net |  |  | 5,898 |  |  |  | (10,079 | )
Inventories, net |  |  | (29,419 | ) |  |  | 37,312 |
Prepaid expenses and other assets |  |  | (41 | ) |  |  | (1,848 | )
(Decrease) Increase in, net of effects of acquisitions — |  |  |  |  |  |  |  |
Accounts payable |  |  | (18,427 | ) |  |  | (15,563 | )
Contract liabilities (customer deposits) |  |  | 2,489 |  |  |  | 44,003 |
Accrued expenses and other liabilities |  |  | (4,016 | ) |  |  | 15,390 |
Net cash (used in) provided by operating activities |  |  | (18,608 | ) |  |  | 146,640 |
CASH FLOWS FROM INVESTING ACTIVITIES: |  |  |  |  |  |  |  |
Purchases of property and equipment |  |  | (6,135 | ) |  |  | (12,127 | )
Cash used in acquisition of businesses, net of cash acquired |  |  | (1,400 | ) |  |  | (50,261 | )
Purchases of investments |  |  | — |  |  |  | (2,250 | )
Proceeds from insurance settlements |  |  | — |  |  |  | 213 |
Proceeds from sale of property and equipment |  |  | 2,410 |  |  |  | 165 |
Net cash used in investing activities |  |  | (5,125 | ) |  |  | (64,260 | )
CASH FLOWS FROM FINANCING ACTIVITIES: |  |  |  |  |  |  |  |
Net (payment) borrowings on short-term borrowings |  |  | 50,833 |  |  |  | (139,125 | )
Proceeds from long-term debt |  |  | — |  |  |  | 46,375 |
Payments for long-term debt |  |  | — |  |  |  | (965 | )
Payments for debt issuance costs |  |  | — |  |  |  | (910 | )
Contingent acquisition consideration payments |  |  | (148 | ) |  |  | — |
Purchase of treasury stock |  |  | (472 | ) |  |  | — |
Net proceeds from issuance of common stock under incentive compensation and employee purchase plans |  |  | 1,030 |  |  |  | 1,709 |
Payments on tax withholdings for equity awards |  |  | (1,674 | ) |  |  | (2,178 | )
Net cash provided by (used in) financing activities |  |  | 49,569 |  |  |  | (95,094 | )
Effect of exchange rate changes on cash |  |  | 59 |  |  |  | 109 |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS |  |  | 25,895 |  |  |  | (12,605 | )
CASH AND CASH EQUIVALENTS, beginning of period |  |  | 38,511 |  |  |  | 155,493 |
CASH AND CASH EQUIVALENTS, end of period |  | $ | 64,406 |  |  | $ | 142,888 |
Supplemental Disclosures of Cash Flow Information: |  |  |  |  |  |  |  |
Cash paid for: |  |  |  |  |  |  |  |
Interest |  | $ | 8,173 |  |  | $ | 2,083 |
Income taxes |  |  | 3,815 |  |  |  | 17,328 |
Non-cash items: |  |  |  |  |  |  |  |
Initial operating lease right-of-use assets for adoption of ASU 2016-02 |  |  | 42,070 |  |  |  | — |
Initial current and noncurrent operating lease liabilities for adoption of ASU 2016-02 |  |  | 43,953 |  |  |  | — |
Contingent consideration liabilities from acquisitions |  |  | — |  |  |  | 8,200 |

See accompanying notes to condensed consolidated financial statements.

7

MARINEMAX, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

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 March 31, 2021, we operated through 77 retail locations in 21 states, consisting of Alabama, California, Connecticut, Florida, Georgia, Illinois, Maryland, Massachusetts, Michigan, Minnesota, Missouri, New Jersey, New York, North Carolina, Ohio, Oklahoma, Rhode Island, South Carolina, Texas, Washington, and Wisconsin. Our MarineMax Vacation operation maintains a facility in Tortola, British Virgin Islands. We also own Fraser Yachts Group and Northrop & Johnson, leading superyacht brokerage and luxury yacht services companies with operations in multiple countries.

We are the nation’s largest retailer of Sea Ray and Boston Whaler recreational boats which are manufactured by Brunswick Corporation (“Brunswick”). Sales of new Brunswick boats accounted for approximately 33% of our revenue in fiscal 2020. Sales of new Sea Ray and Boston Whaler boats, both divisions of Brunswick, accounted for approximately 15% and 16%, respectively, of our revenue in fiscal 2020. Brunswick is a world leading manufacturer of marine products and marine engines.

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 and Benetti yachts and mega 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. The agreements for Sea Ray and Boston Whaler products, respectively, appoint us as the exclusive dealer of Sea Ray and Boston Whaler boats, respectively, in our geographic markets. In addition, we are the exclusive dealer for Azimut Yachts for the entire United States. Sales of new Azimut yachts accounted for approximately 9% of our revenue in fiscal 2020. 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.

In October 2020, we purchased all of the outstanding equity of Skipper Marine Corp., Skipper Marine of Madison, Inc., Skipper Marine of Fox Valley, Inc., Skipper Bud’s of Illinois, Inc., Skipper Marine of Chicago-Land, Inc., Skipper Marine of Michigan, Inc., and Skipper Marine of Ohio, LLC, (collectively, “SkipperBud’s”). This acquisition significantly increased our presence in the Great Lakes region and the West Coast of the United States. SkipperBud’s is one of the largest boat sales, brokerage, service and marina/storage groups in the United States.

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.

From March 2020 through June 2020, we temporarily closed certain departments or locations based on guidance from local government or health officials as a result of the COVID-19 global pandemic. We are following guidelines to ensure we are safely operating as recommended. As the COVID-19 pandemic is complex and evolving rapidly with many unknowns, the Company will continue to monitor ongoing developments and respond accordingly. Management expects its business, across all of its geographies, will be impacted to some degree, but the significance of the impact of the COVID-19 pandemic on the Company’s business and the duration for which it may have an impact cannot be determined at this time.

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 51%, 54% and 54% of our revenue during fiscal 2018, 2019, and 2020, 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.

8

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 would likely 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 remain an important strategy for us, and, subject to a number of conditions, including macro-economic conditions and finding attractive acquisition targets, we plan to continue to explore opportunities through this strategy.

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, 2020. 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 March 31, 2021, our financial instruments consisted of cash and cash equivalents, accounts receivable, accounts payable, customer deposits, short-term borrowings, long-term debt, and an interest rate swap contract. The carrying amounts of our financial instruments reported on the balance sheet as of March 31, 2021, approximated fair value due either to length to maturity or existence of variable interest rates, which approximate prevailing market rates. The interest rate swap contract is reported at fair value and is designated as a cash flow hedge with changes in fair value reported in other comprehensive income. The operating results for the six months ended March 31, 2021, 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.

All references to the “Company,” “our company,” “we,” “us,” and “our” mean, as a combined company, MarineMax, Inc. and the 30 recreational boat dealers, four boat brokerage operations, and two full-service yacht repair operations acquired as of March 31, 2021 (the “acquired dealers,” and together with the brokerage and repair operations, “operating subsidiaries” or the “acquired companies”).

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.

9

3.NEW ACCOUNTING PRONOUNCEMENTS:

In August 2018, the FASB issued ASU 2018-15, Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract, which aligns the accounting for implementation costs incurred in a cloud computing arrangement that is a service contract with the guidance on capitalizing costs associated with developing or obtaining internal-use software. The guidance amends Accounting Standards Codification (ASC) 350 to include in its scope implementation costs of a cloud computing arrangement that is a service contract and clarifies that a customer should apply ASC 350 to determine which implementation costs should be capitalized in such a cloud computing arrangement. This guidance is effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2019. We adopted ASU 2018-05 effective October 1, 2020 the first day of fiscal 2021. The adoption of this standard had no impact on our consolidated financial statements.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments — Credit Losses. ASU 2016-13 requires entities to report “expected” credit losses on financial instruments and other commitments to extend credit rather than the current “incurred loss” model. These expected credit losses for financial assets held at the reporting date are to be based on historical experience, current conditions, and reasonable and supportable forecasts. This ASU will also require enhanced disclosures relating to significant estimates and judgments used in estimating credit losses, as well as the credit quality. This guidance is effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2019. We adopted ASU 2016-13 effective October 1, 2020 the first day of fiscal 2021. The adoption of this standard had no impact on our consolidated financial statements.

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. The transaction price is determined with the customer at the time of sale. Customers may trade in boats to apply toward the purchase of a new or used boat. The trade-in is a type of noncash consideration measured at fair value, based on external and internal market data and applied as payment to the contract price for the purchased boat. 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 March 31, 2021, 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, because 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.

10

Contract liabilities primarily consist of customer deposits. We recognize contract liabilities (customer deposits) as revenue at the time of delivery or acceptance by the customers. Contract assets, recorded in prepaid expenses and other current assets, totaled approximately $3.6 million and $5.9 million as of March 31, 2020 and March 31, 2021, 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 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 six months ended March 31,

| Three Months Ended |  |  | Six Months Ended |  |
| March 31, |  |  | March 31, |  |
| 2020 |  |  | 2021 |  |  | 2020 |  |  | 2021 |  |
Goods and services transferred at a point in time |  | 92.1 | % |  |  | 93.1 | % |  |  | 91.5 | % |  |  | 92.0 | % |
Goods and services transferred over time |  | 7.9 | % |  |  | 6.9 | % |  |  | 8.5 | % |  |  | 8.0 | % |
Total Revenue |  | 100.0 | % |  |  | 100.0 | % |  |  | 100.0 | % |  |  | 100.0 | % |

5. | LEASES:

The majority of leases that we enter into are real estate leases. We lease numerous facilities relating to our operations, including showrooms, display lots, marinas, service facilities, slips, offices, equipment and our corporate headquarters. Leases for real property have terms, including renewal options, ranging from one to in excess of twenty-five years. In addition, we lease certain charter boats for our yacht charter business. As of March 31, 2021, the weighted-average remaining lease term for our leases was approximately 13 years. All of our leases are classified as operating leases, which are included as ROU assets and operating lease liabilities in our unaudited condensed consolidated balance sheet. For the three months ended March 31, 2020 and March 31, 2021, operating lease expenses recorded in selling, general, and administrative expenses were approximately $3.5 million and $6.4 million, respectively. For the six months ended March 31, 2020 and March 31, 2021, operating lease expenses recorded in selling, general, and administrative expenses were approximately $6.7 million and $12.3 million, respectively. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. We do not have any significant leases that have not yet commenced but that create significant rights and obligations for us. We have elected the practical expedient under ASC 842 to not separate lease and nonlease components.

Our real estate and equipment leases often require that we pay maintenance in addition to rent. Additionally, our real estate leases generally require payment of real estate taxes and insurance. Maintenance, real estate taxes, and insurance payments are generally variable and based on actual costs incurred by the lessor. Therefore, these amounts are not included in the consideration of the contract when determining the ROU asset and lease liability, but are reflected as variable lease expenses.

A majority of our lease agreements include fixed rental payments. Certain of our lease agreements include fixed rental payments that are adjusted periodically by a fixed rate or changes in an index. The fixed payments, including the effects of changes in the fixed rate or amount, and renewal options reasonably certain to be exercised, are included in the measurement of the related lease liability. Most of our real estate leases include one or more options to renew, with renewal terms that can extend the lease term from one to five years or more. The exercise of lease renewal options is at our sole discretion. If it is reasonably certain that we will exercise such options, the periods covered by such options are included in the lease term and are recognized as part of our right of use assets and lease liabilities. The depreciable life of assets and leasehold improvements are limited by the expected lease term, which includes renewal options reasonably certain to be exercised.

For our incremental borrowing rate, we generally use a portfolio approach to determine the discount rate for leases with similar characteristics. We determine discount rates based upon our hypothetical credit rating, taking into consideration our short-term borrowing rates, and then adjusting as necessary for the appropriate lease term. As of March 31, 2021, the weighted-average discount rate used was approximately 5.7%.

11

As of March 31, 2021, maturities of lease liabilities are summarized as follows:

|  | (Amounts in thousands) |
2021 |  | $ | 16,214 |
2022 |  |  | 14,511 |
2023 |  |  | 13,174 |
2024 |  |  | 10,750 |
2025 |  |  | 9,693 |
Thereafter |  |  | 92,384 |
Total lease payments |  |  | 156,726 |
Less: interest |  |  | (48,011 | )
Present value of lease liabilities |  | $ | 108,715 |

Supplemental cash flow information related to leases was as follows (amounts in thousands):

| Six Months Ended |
| March 31, |
| 2020 |  |  | 2021 |
Cash paid for amounts included in the measurement of lease liabilities: |  |  |  |  |  |  |
Operating cash flows from operating leases | $ | 5,152 |  |  | $ | 8,670 |
Right-of-use assets obtained in exchange for lease obligations: |  |  |  |  |  |  |
Operating leases | $ | 817 |  |  | $ | 70,714 |

6. | 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. We do not believe there is a reasonable likelihood that there will be a change in the future estimates or assumptions we use to calculate our valuation allowance which would result in a material effect on our operating results. As of September 30, 2020 and March 31, 2021, our valuation allowance for new and used boat, motor, and trailer inventories was $2.4 million and $1.3 million, respectively. If events occur and market conditions change, causing the fair value to fall below carrying value, the valuation allowance could increase.

7. | 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 (or asset group) is measured by comparison of its carrying amount to undiscounted future net cash flows the asset (or asset group) is expected to generate over the remaining life of the asset (or asset group). 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 (or asset group) 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. Our impairment loss calculations contain uncertainties because they require us to make assumptions and to apply judgment in order to estimate expected future cash flows. Any impairment recognized in accordance with ASC 360-10-40 is permanent and may not be restored. Based upon our most recent analysis, we believe no impairment of long-lived assets existed as of March 31, 2021.

8. | GOODWILL:

We account for acquisitions in accordance with FASB Accounting Standards Codification (“ASC”) 805, “Business Combinations” (“ASC 805”), and goodwill in accordance with ASC 350, “Intangibles — Goodwill and Other” (“ASC 350”). For business combinations, the excess of the purchase price over the estimated fair value of net assets acquired in a business combination is recorded as goodwill. In October 2020, we purchased all of the outstanding equity of SkipperBud’s for an aggregate purchase price of $55,000,000, subject to certain customary closing and post-closing adjustments, and net working capital adjustments including certain holdbacks. In addition, the former equity owners of SkipperBud’s (“Skippers Sellers”), have the opportunity to earn additional consideration as part of an earnout subject to the achievement of certain pre-tax earnings levels. The maximum amount of consideration that can be paid under the earnout is approximately $9.3 million. The fair value of $8.2 million of the contingent consideration arrangement was estimated by a third party valuation expert by applying an income valuation approach. The earnout was estimated based on forecasted pre-tax earnings as a base scenario (among other assumptions) subject to a Monte Carlo simulation. The Skippers Sellers are subject to certain customary post-closing covenants and indemnities. The acquisition of SkipperBud’s enhances our sales, brokerage, service and marina/storage presence in the Great Lakes region and West Coast of the Unites States.

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The following table summarizes the consideration paid for SkipperBud’s and the preliminary allocation of the purchase consideration to the estimated fair value of the assets acquired and liabilities assumed at the acquisition date.

|  | (Amounts in thousands) |
Consideration: |  |  |  |
Cash purchase price and net working capital adjustments, net of cash acquired of $30,615 |  | $ | 50,261 |
Contingent consideration arrangement |  |  | 8,200 |
Fair value of total consideration transferred |  | $ | 58,461 |
Recognized amounts of identifiable assets acquired and liabilities assumed: |  |  |  |
Current assets, net of cash acquired of $30,615 |  | $ | 50,688 |
Property and equipment |  |  | 4,859 |
Intangible assets |  |  | 1,978 |
Current liabilities |  |  | (55,427 | )
Total identifiable net assets acquired: |  |  | 2,098 |
Goodwill |  | $ | 56,363 |
Total |  | $ | 58,461 |

The fair value of current assets acquired includes accounts receivable and inventory of approximately $5.4 million and $42.3 million, respectively. The fair value of current liabilities assumed includes short-term borrowings of approximately $30.5 million, accrued expenses of approximately $14.6 million, and customer deposits of approximately $7.5 million. We recorded approximately $56.4 million in goodwill and approximately $2.0 million of other identifiable intangibles (trade name and customer relationships) in connection with the SkipperBud’s acquisition. The goodwill represents our enhanced geographic reach and brand infrastructure in the Great Lakes region and West Coast of the Unites States. The majority of the goodwill is expected to be deductible for tax purposes. The intangible assets have a weighted average useful life of approximately 3.3 years. For the six months ended March 31, 2021, SkipperBud’s revenue was approximately $108.4 million and estimated income before taxes was approximately $7.9 million. SkipperBud’s financial information for the six months ended March 31, 2020 was not practical to obtain for comparative purposes and as such is not presented because SkipperBud’s historical monthly internal accounting and reporting processes and practices would not provide complete information sufficient for the purposes of this pro forma disclosure.

In July 2020, we purchased Northrop & Johnson, a leading superyacht brokerage and services company. In March 2020, we purchased Boatyard, a digital platform with an expansive range of on-demand services to streamline the boating experience by qualified service providers from a smartphone.

In total, current and previous acquisitions have resulted in the recording of $84.3 million and $142.2 million in goodwill and other intangible assets as of September 30, 2020 and March 31, 2021, respectively. In accordance with ASC 350, we test goodwill for impairment at least annually and whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Our annual impairment test is performed during the third fiscal quarter. If the carrying amount of a reporting unit’s goodwill exceeds its fair value we recognize an impairment loss in accordance with ASC 350. As of March 31, 2021, and based upon our most recent analysis, we determined through our qualitative assessment that it is not “more likely than not” that the fair values of our reporting units are less than their carrying values. As a result, we were not required to perform a quantitative goodwill impairment.

9. | 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.

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During the three months ended March 31, 2020 and 2021, we recognized an income tax provision of $1.6 million and $12.8 million, respectively. During the six months ended March 31, 2020 and 2021, we recognized an income tax provision of $4.9 million and $20.0 million, respectively. The effective income tax rate for the three months ended March 31, 2020 and 2021 was 24.4% and 24.8%, respectively. The effective income tax rate for the six months ended March 31, 2020 and 2021 was 25.6% and 24.2%, respectively

10.SHORT-TERM BORROWINGS AND LONG-TERM DEBT:

Short-term Borrowings

In May 2020, we entered into a Loan and Security Agreement (the “Credit Facility”), with Wells Fargo Commercial Distribution Finance LLC, M&T Bank, Bank of the West, and Truist Bank. The Credit Facility provides the Company a line of credit with asset based borrowing availability of up to $440 million for working capital and inventory financing, with the amount permissible pursuant to a borrowing base formula. The Credit Facility has a three-year term and expires in May 2023, subject to extension for two one-year periods, with lender approval.

The 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 Credit Facility is 345 basis points plus the greater of 75 basis points or the one-month LIBOR. There is an unused line fee of ten basis points on the unused portion of the Credit Facility. As of March 31, 2021, we were in compliance with all covenants under the Credit Facility.

New inventory borrowing eligibility will generally mature 1,080 days from the original invoice date. Used inventory borrowing eligibility will generally mature 361 days from the date we acquire the used inventory. The collateral for the Credit Facility is all of our personal property with certain limited exceptions. None of our real estate has been pledged for collateral for the Credit Facility.

As of March 31, 2021, our indebtedness associated with financing our inventory and working capital needs totaled approximately $35.8 million. As of March 31, 2020 and 2021, the interest rate on the outstanding short-term borrowings was approximately 5.0% and 4.2%, respectively. As of March 31, 2021, our additional available borrowings under our Credit Facility were approximately $181 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. However, we rely on our 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 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 Credit Facility to fund our operations. Any inability to utilize our 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.

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Long-term Debt

The below table summarizes the Company's long-term debt.

( amounts in thousands) |  | March 31, 2021 |
Mortgage facility payable to Flagship Bank bearing interest at 2.25% (prime minus 100 basis points with a floor of 2.00%). Requires monthly principal and interest payments with a balloon payment of approximately $4.0 million due August 2027. |  | $ | 7,148 |
Mortgage facility payable to Seacoast National Bank bearing interest at 3.0% (greater of 3% or prime minus 62.5 basis points). Requires monthly interest payments for the first year and then monthly principal and interest payments with a balloon payment of approximately $6.0 million due September 2031. |  |  | 17,675 |
Mortgage facility payable to Hancock Whitney Bank bearing interest at 2.6% (prime minus 62.5 basis points with a floor of 2.25%). Requires monthly principal and interest payments with a balloon payment of approximately $15.5 million due November 2027. 50% of the outstanding borrowings are hedged with an interest rate swap contract with a fixed rate of 3.2%. |  |  | 28,062 |
Revolving mortgage facility with FineMark National Bank & Trust bearing interest at 3.0% (base minus 25 basis points with a floor of 3%). Facility matures in September 2027. Current available borrowings under the facility were approximately $26.4 million at December 31, 2020. |  |  | — |
|  |  | 52,885 |
Less current portion |  |  | (2,802 | )
Less unamortized portion of debt issuance costs |  |  | (643 | )
|  | $ | 49,440 |

11. | 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 options granted (Note 12) and shares purchased under our Amended 2008 Employee Stock Purchase Plan (“Stock Purchase Plan”) (Note 13). We measure compensation for restricted stock awards and restricted stock units (Note 14) 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 on a straight-line basis over the requisite service period for each separately vesting portion of the award.

During the three months ended March 31, 2020 and 2021, we recognized stock-based compensation expense of approximately $1.8 million and $2.4 million, respectively, and for the six months ended March 31, 2020 and 2021, we recognized stock-based compensation expense of approximately $3.3 million and $4.4 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 for the three months ended March 31, 2020 and 2021, was approximately $0.4 million and $0.1 million, respectively and for the six months ended March 31, 2020 and 2021 was approximately $1.0 million and $1.7 million, respectively. We currently expect to satisfy share-based awards with registered shares available to be issued from the Stock Purchase Plan.

12. | THE INCENTIVE STOCK PLANS:

During February 2020, our shareholders approved a proposal to amend the 2011 Stock-Based Compensation Plan (“2011 Plan”) to increase the 3,200,456 share threshold by 1,000,000 shares to 4,200,456 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 2020 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 4,000,000 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

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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 February 2030, 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, 2020 through March 31, 2021:

|  | 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, 2020 |  |  | 1,275,415 |  |  |  | 196,329 |  |  | $ | 2,636 |  |  | $ | 12.12 |  |  |  | 2.5 |
Options granted |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  |  |
Options cancelled/forfeited/expired |  |  | 10,000 |  |  |  | (10,000 | ) |  |  | - |  |  |  | - |  |  |  |  |
Options exercised |  |  | - |  |  |  | (71,079 | ) |  |  | - |  |  |  | - |  |  |  |  |
Restricted stock awards issued |  |  | (336,591 | ) |  |  | - |  |  |  | - |  |  |  | - |  |  |  |  |
Restricted stock awards forfeited |  |  | 5,975 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  |  |
Additional shares of stock issued |  |  | (3,374 | ) |  |  | - |  |  |  | - |  |  |  | - |  |  |  |  |
Balance as of March 31, 2021 |  |  | 951,425 |  |  |  | 115,250 |  |  | $ | 4,531 |  |  | $ | 11.66 |  |  |  | 2.2 |
Exercisable as of March 31, 2021 |  |  |  |  |  |  | 115,250 |  |  | $ | 4,531 |  |  | $ | 11.66 |  |  |  | 2.2 |

No options were granted for the six months ended March 31, 2020 and 2021. The total intrinsic value of options exercised during the six months ended March 31, 2020 and 2021, was $0.2 million and $1.6 million, 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.

13. | EMPLOYEE STOCK PURCHASE PLAN:

During February 2019, our shareholders approved a proposal to amend our 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.

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

| Three Months Ended |  |  | Six Months Ended |  |
| March 31, |  |  | March 31, |  |
| 2020 |  |  | 2021 |  |  | 2020 |  |  | 2021 |  |
Dividend yield | 0.0% |  |  | 0.0% |  |  | 0.0% |  |  | 0.0% |  |
Risk-free interest rate | 1.8% |  |  | 0.1% |  |  | 1.8% |  |  | 0.1% |  |
Volatility | 52.4% |  |  | 70.2% |  |  | 52.4% |  |  | 70.2% |  |
Expected life | Six Months |  |  | Six Months |  |  | Six Months |  |  | Six Months |  |

As of March 31, 2021, we had issued 1,101,135 shares of common stock under our Stock Purchase Plan.

14. | RESTRICTED STOCK AWARDS:

We have granted non-vested (restricted) stock awards (“restricted stock”) and restricted stock units (“RSUs”) to employees, Directors, 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 175% 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, 2020 through March 31, 2021:

|  | Shares/ Units |  |  | Weighted Average Grant Date Fair Value |
Non-vested balance as of September 30, 2020 |  |  | 902,631 |  |  | $ | 18.08 |
Changes during the period |  |  |  |  |  |  |  |
Awards granted |  |  | 336,591 |  |  | $ | 30.07 |
Awards vested |  |  | (165,825 | ) |  | $ | 17.26 |
Awards forfeited |  |  | (5,975 | ) |  | $ | 19.79 |
Non-vested balance as of March 31, 2021 |  |  | 1,067,422 |  |  |  |  |

As of March 31, 2021, we had approximately $14.1 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 2.4 years.

15. | NET INCOME PER SHARE:

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

| Three Months Ended |  |  | Six Months Ended |
| March 31, |  |  | March 31, |
| 2020 |  |  | 2021 |  |  | 2020 |  |  | 2021 |
Weighted average common shares outstanding used in calculating basic income per share |  | 21,520,215 |  |  |  | 22,143,043 |  |  |  | 21,486,995 |  |  |  | 22,083,827 |
Effect of dilutive options and non-vested restricted stock awards |  | 440,070 |  |  |  | 843,018 |  |  |  | 438,110 |  |  |  | 781,123 |
Weighted average common and common equivalent shares used in calculating diluted income per share |  | 21,960,285 |  |  |  | 22,986,061 |  |  |  | 21,925,105 |  |  |  | 22,864,950 |

For the three months ended March 31, 2020 and 2021, there were 21,333 and no weighted average shares of options outstanding, respectively, that were not included in the computation of diluted income per share because the options’ exercise prices were greater than the average market price of our common stock, and therefore, their effect would be anti-dilutive. For the six months ended March 31, 2020 and 2021, there were 21,333 and 104 weighted average shares of options outstanding, respectively, that were not included in the computation of diluted income per share because the options’ exercise prices

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were greater than the average market price of our common stock, and therefore, their effect would be anti-dilutive.

16. | 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 March 31, 2021, 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.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This Management’s Discussion and Analysis of Financial Condition and Results of Operations contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include statements regarding our “expectations,” “anticipations,” “intentions,” “plans,” “beliefs,” or “strategies” regarding the future. These forward-looking statements include statements relating to market risks such as interest rate risk and foreign currency exchange rate risk; economic and industry conditions and corresponding effects on consumer behavior and operating results; environmental conditions; inclement weather; certain specific and isolated events; our future estimates, assumptions and judgments, including statements regarding whether such estimates, assumptions and judgments would have a material adverse effect on our operating results; the impact of changes in accounting policy and standards; our plans to accelerate our growth through acquisitions and new store openings; our belief that our existing capital resources will be sufficient to finance our operations for at least the next 12 months, except for possible significant acquisitions; the seasonality and cyclicality of our business and the effect of such seasonality and cyclicality on our business, financial results and inventory levels; and the scope and duration of the COVID-19 pandemic and its impact on global economic systems, our employees, sites, operations, customers, suppliers and supply chain, managing growth effectively. Actual results could differ materially from those currently anticipated as a result of a number of factors, including those set forth under “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended September 30, 2020.

General

In March 2020, the outbreak of COVID-19 caused by a novel strain of the coronavirus was recognized as a pandemic by the World Health Organization, and the outbreak is widespread throughout the United States (including Florida in which we generated approximately 54% of our revenue during both fiscal 2019 and 2020), and in other countries in which we operate. As a result, from March 2020 through June 2020, we temporarily closed certain departments or locations based on guidance from local government or health officials. Currently, virtually all of our stores are fully operational, the effects of COVID-19 (including the related international, federal, state, and local governmental actions and regulations) remain unpredictable. We are following guidelines to ensure we are safely operating as recommended. Where possible, we are offering private personal showings as well as virtual appointments. Our digital platform is serving as an effective solution in this environment with robust online activity. Our experienced teams continue to engage with customers virtually and in our stores to help customers select their boats, and obtain appropriate services.

We are the largest recreational boat and yacht retailer in the United States with fiscal 2020 revenue above $1.5 billion. Through our current 77 retail locations in 21 states, we sell new and used recreational boats and related marine products, including engines, trailers, parts, and accessories. We also arrange related boat financing, insurance, and extended service contracts; provide boat repair and maintenance services; offer yacht and boat brokerage sales; and, where available, offer slip and storage accommodations, as well as the charter of power yachts in the British Virgin Islands. We also own Fraser Yachts Group, a leading superyacht brokerage and luxury yacht services company with operations in multiple countries. In July 2020, we acquired Northrop & Johnson, another leading superyacht brokerage and services company with operations in multiple countries. In October 2020, we purchased all of the outstanding equity of SkipperBud’s. SkipperBud’s is one of the largest boat sales, brokerage, service and marina/storage groups in the United States.

MarineMax was incorporated in January 1998 (and reincorporated in Florida in March 2015). We commenced operations with the acquisition of five independent recreational boat dealers on March 1, 1998. Since the initial acquisitions in March 1998, we have acquired 30 recreational boat dealers, four boat brokerage operations, and two full-service yacht repair facilities. As a part of our acquisition strategy, we frequently engage in discussions with various recreational boat dealers regarding their potential acquisition by us. Potential acquisition discussions frequently take place over a long period of time and involve difficult business integration and other issues, including, in some cases, management succession and related matters. As a result of these and other factors, a number of potential acquisitions that from time to time appear likely to occur do not result in binding legal agreements and are not consummated. We completed two acquisitions in the fiscal year ended September 30, 2019, two acquisitions in fiscal 2020, and one acquisition to date in fiscal 2021.

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 54% of our revenue during both fiscal 2019 and 2020, can have a major impact on our operations. Local influences, such as corporate downsizing, military base closings, and inclement weather such as hurricanes and other storms, 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.

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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.

Although past economic conditions have adversely affected our operating results, we believe during and after such conditions we have capitalized on our core strengths to substantially outperform the industry, resulting in market share gains. Our ability to capture such market share supports the alignment of our retailing strategies with the desires of consumers. We believe the steps we have taken to address weak market conditions in the past have yielded, and we believe will yield in the future, an increase in revenue. Acquisitions remain an important strategy for us, and, subject to a number of conditions, including macro-economic conditions and finding attractive acquisition targets, we plan to explore opportunities through this strategy. We expect our core strengths and retailing strategies including our digital platform, will position us to capitalize on growth opportunities as they occur and will allow us to emerge with greater earnings potential.

Application of Critical Accounting Policies

See Part II, Item 7, "Application of Critical Accounting Policies" in our Annual Report on Form 10-K for the fiscal year ended September 30, 2020. There have been no material changes to our critical accounting policies since our Annual Report on Form 10-K for the fiscal year ended September 30, 2020.

Recent Accounting Pronouncements

See Note 3 of the Notes to Unaudited Condensed Consolidated Financial Statements.

Consolidated Results of Operations

The following discussion compares the three and six months ended March 31, 2021, with the three and six months ended March 31, 2020 and should be read in conjunction with the unaudited condensed consolidated financial statements, including the related notes thereto, appearing elsewhere in this report.

Three Months Ended March 31, 2021 Compared with Three Months Ended March 31, 2020

Revenue. Revenue increased $214.6 million, or 69.6%, to $523.1 million for the three months ended March 31, 2021, from $308.5 million for three months ended March 31, 2020. The increase was due to a net increase of $140.3 million or 45.5% in comparable-store sales and an increase of $74.3 million from stores opened, stores closed, and acquisitions that are not eligible for inclusion in the comparable-store base for the full period. The increase in our comparable-store sales was primarily due to demand driven increases in new and used boat revenue and our higher margin finance and insurance products, brokerage, parts, service, and storage services.

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Gross Profit. Gross profit increased $78.0 million, or 99.0%, to $156.8 million for the three months ended March 31, 2021, from $78.8 million for the three months ended March 31, 2020. Gross profit as a percentage of revenue increased to 30.0% for the three months ended March 31, 2021 from 25.5% for the three months ended March 31, 2020. The increase in gross profit as a percentage of revenue was primarily the result of demand driven increased new and used boat margins and increases in our higher margin businesses, including the additional sales of Northrop & Johnson (which typically carry higher margins), as a percentage of sales. The increase in gross profit dollars was primarily attributable to increased new and used boat sales.

Selling, General, and Administrative Expenses. Selling, general, and administrative expense increased $34.8 million, or 50.4%, to $103.9 million for the three months ended March 31, 2021, from $69.1 million for the three months ended March 31, 2020. Selling, general, and administrative expenses as a percentage of revenue decreased to 19.9% for the three months ended March 31, 2021 from 22.4% for the three months ended March 31, 2020. The decrease in selling, general, and administrative expenses as a percentage of revenue was primarily driven by increased revenue combined with increased efficiencies and operating leverage in the business. The increase in selling, general, and administrative expenses was driven by the increases in revenue from increases in comparable-store sales and acquisitions.

Interest Expense. Interest expense decreased $1.9 million, or 63.3%, to $1.1 million for the three months ended March 31, 2021, from $3.0 million for the three months ended March 31, 2020. Interest expense as a percentage of revenue decreased to 0.2% for the three months ended March 31, 2021 from 1.0% for the three months ended March 31, 2020. The decrease in interest expense was primarily the result of decreased interest rates and decreased borrowings.

Income Taxes. Income tax expense increased $11.2 million, or 700.0%, to $12.8 million for the three months ended March 31, 2021, from $1.6 million for the three months ended March 31, 2020. Our effective income tax rate increased to 24.8% for the three months ended March 31, 2021, from 24.4% for three months ended March 31, 2020. The increase in the effective income tax rate was primarily attributed to minor changes in the allocation of pre-tax income between taxing jurisdictions.

Six Months Ended March 31, 2021 Compared with Six Months Ended March 31, 2020

Revenue. Revenue increased $322.0 million, or 52.6%, to $934.6 million for the six months ended March 31, 2021, from $612.6 million for the six months ended March 31, 2020. The increase was due to a net increase of $201.8 million or 32.9% in comparable-store sales and an increase of $120.2 million from stores opened, stores closed, and acquisitions that are not eligible for inclusion in the comparable-store base for the full period. The increase in our comparable-store sales was primarily due to demand driven increases in new and used boat revenue and our higher margin finance and insurance products, brokerage, parts, service, and storage services.

Gross Profit. Gross profit increased $121.4 million, or 76.4%, to $280.2 million for the six months ended March 31, 2021, from $158.8 million for the six months ended March 31, 2020. Gross profit as a percentage of revenue increased to 30.0% for the six months ended March 31, 2021 from 25.9% for the six months ended March 31, 2020. The increase in gross profit as a percentage of revenue was primarily the result of demand driven increased new and used boat margins and increases in our higher margin businesses, including the additional sales of Northrop & Johnson (which typically carry higher margins), as a percentage of sales. The increase in gross profit dollars was primarily attributable to increased new and used boat sales.

Selling, General, and Administrative Expenses. Selling, general, and administrative expense increased $62.0 million, or 46.5%, to $195.4 million for the six months ended March 31, 2021, from $133.4 million for the six months ended March 31, 2020. Selling, general, and administrative expenses as a percentage of revenue decreased to 20.9% for the six months ended March 31, 2021 from 21.8% for the six months ended March 31, 2020. The decrease in selling, general, and administrative expenses as a percentage of revenue was primarily driven by increased revenue combined with increased efficiencies and operating leverage in the business. The increase in selling, general, and administrative expenses was driven by the increases in revenue from increases in comparable-store sales and acquisitions.

Interest Expense. Interest expense decreased $4.0 million, or 62.5%, to $2.4 million for the six months ended March 31, 2021, from $6.4 million for the six months ended March 31, 2020. Interest expense as a percentage of revenue decreased to 0.3% for the six months ended March 31, 2021 from 1.0% for the six months ended March 31, 2020. The decrease in interest expense was primarily the result of decreased interest rates and decreased borrowings.

Income Taxes. Income tax expense increased $15.1 million, or 308.2%, to $20.0 million for the six months ended March 31, 2021, from $4.9 million for the six months ended March 31, 2020. Our effective income tax rate decreased to 24.2% for the six months ended March 31, 2021, from 25.6% for the six months ended March 31, 2020. The decrease in the effective income tax rate was primarily attributed to excess equity compensation for tax purposes.

Liquidity and Capital Resources

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Our cash needs are primarily for working capital to support operations, including new and used boat and related parts inventories, off-season liquidity, and growth through acquisitions. Acquisitions remain an important strategy for us, and we plan to continue our growth through this strategy in appropriate circumstances. However, we cannot predict the return of, or length of, favorable economic or financial conditions. We regularly monitor the aging of our inventories and current market trends to evaluate our current and future inventory needs. We also use this evaluation in conjunction with our review of our current and expected operating performance and expected business levels to determine the adequacy of our financing needs.

These cash needs historically have been financed with cash generated from operations and borrowings under the Credit Facility (described below). Our ability to utilize the Credit Facility to fund operations depends upon the collateral levels and compliance with the covenants of the Credit Facility. Any turmoil in the credit markets and weakness in the retail markets may interfere with our ability to remain in compliance with the covenants of the Credit Facility and therefore our ability to utilize the Credit Facility to fund operations. As of March 31, 2021, we were in compliance with all covenants under the Credit Facility. We currently depend upon dividends and other payments from our dealerships and the Credit Facility to fund our current operations and meet our cash needs. As 100% owner of each of our dealerships, we determine the amounts of such distributions subject to applicable law, and currently, no agreements exist that restrict this flow of funds from our dealerships.

For the six months ended March 31, 2021, cash provided by operating activities was approximately $146.6 million. For the six months ended March 31, 2020, cash used in operating activities was approximately $18.6 million. For the six months ended March 31, 2021, cash provided by operating activities was primarily related to decreases in inventory (excluding acquisitions), increases in contract liabilities, increases in accrued expenses and other liabilities, partially offset by increases in accounts receivable, increases in prepaid expenses and other assets and decreases in accounts payable, and our net income adjusted for non-cash expenses such as depreciation and amortization expense, deferred income tax provision, and stock-based compensation expense. For the six months ended March 31, 2020, cash used in operating activities was primarily related to increases in inventory, decreases in accounts payable and accrued expenses, partially offset by decreases in accounts receivable, increases in customer deposits, and our net income adjusted for non-cash expenses such as depreciation and amortization expense, deferred income tax provision, and stock-based compensation expense.

For the six months ended March 31, 2021 and 2020, cash used in investing activities was approximately $64.3 million and $5.1 million, respectively. For the six months ended March 31, 2021, cash used in investing activities was primarily used for acquisitions, investments, and to purchase property and equipment associated with improving existing retail facilities. For the six months ended March 31, 2020, cash used in investing activities was primarily used to purchase property and equipment associated with improving existing retail facilities and acquisitions, partially offset by proceeds received from the sale of property and equipment.

For the six months ended March 31, 2021, cash used in financing activities was approximately $95.1 million. For the six months ended March 31, 2020, cash provided by financing activities was approximately $49.6 million. For the six months ended March 31, 2021, cash used in financing activities was primarily attributable to net payments on short-term borrowings, payments on tax withholdings for equity awards, and payments for long-term debt and debt issuance costs, partially offset by proceeds from long-term debt and proceeds from the issuance of common stock from our stock based compensation plans. For the six months ended March 31, 2020, cash provided by financing activities was primarily attributable to net short-term borrowings as a result of increased inventory levels and proceeds from the issuance of common stock from our stock based compensation plans, partially offset by payments on tax withholdings for equity awards and by the repurchase of common stock under the share repurchase program.

In May 2020, we entered into a Loan and Security Agreement (the “Credit Facility”), with Wells Fargo Commercial Distribution Finance LLC, M&T Bank, Bank of the West, and Truist Bank. The Credit Facility provides the Company a line of credit with asset based borrowing availability of up to $440 million for working capital and inventory financing, with the amount permissible pursuant to a borrowing base formula. The Credit Facility has a three-year term and expires in May 2023, subject to extension for two one-year periods, with lender approval.

The 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 Credit Facility is 345 basis points plus the greater of 75 basis points or the one-month LIBOR. There is an unused line fee of ten basis points on the unused portion of the Credit Facility.

Advances under the 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 Credit Facility

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is primarily the Company’s inventory that is financed through the Credit Facility and related accounts receivable. None of our real estate has been pledged for collateral for the Credit Facility.

As of March 31, 2021, our indebtedness associated with financing our inventory and working capital needs totaled approximately $35.8 million. As of March 31, 2020 and 2021, the interest rate on the outstanding short-term borrowings was approximately 5.0% and 4.2%, respectively. As of March 31, 2021, our additional available borrowings under our Credit Facility were approximately $181 million based upon the outstanding borrowing base availability.

As of March 31, 2021 we had approximately $49.4 million in long-term debt, net of current maturities as a result of our mortgage facilities. See Note 10 of the Notes to Unaudited Condensed Consolidated Financial Statements.

Except as specified in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and in the unaudited condensed consolidated financial statements in the “Financial Statements (Unaudited)”, we have no material commitments for capital for the next 12 months. Based on the information currently available to us, the COVID-19 pandemic’s impact on consumer demand is uncertain, however, we believe that the cash generated from sales and our existing capital resources will be adequate to meet our liquidity and capital requirements for at least the next 12 months, except for possible significant acquisitions.

Impact of Seasonality and Weather on Operations

Our business, as well as the entire recreational boating industry, is highly seasonal, with seasonality varying in different geographic markets. With the exception of Florida, we generally realize significantly lower sales and higher levels of inventories, and related short-term borrowings, in the quarterly periods ending December 31 and March 31. The onset of the public boat and recreation shows in January generally stimulates boat sales and typically allows us to reduce our inventory levels and related short-term borrowings throughout the remainder of the fiscal year. Our business could become substantially more seasonal if we acquire additional dealers that operate in colder regions of the United States or close retail locations in warm climates.

Our business is also subject to weather patterns, which may adversely affect our results of operations. For example, prolonged winter conditions, drought conditions (or merely reduced rainfall levels) or excessive rain, may limit access to area boating locations or render boating dangerous or inconvenient, thereby curtailing customer demand for our products. In addition, unseasonably cool weather and prolonged winter conditions may lead to a shorter selling season in certain locations. Hurricanes and other storms could result in disruptions of our operations or damage to our boat inventories and facilities, as has been the case when Florida and other markets were affected by hurricanes, such as Hurricanes Harvey and Irma in 2017. Although our geographic diversity is likely to reduce the overall impact to us of adverse weather conditions in any one market area, these conditions will continue to represent potential, material adverse risks to us and our future financial performance.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest Rate Risk

As of March 31, 2021, all of our short-term debt bore interest at a variable rate, tied to LIBOR as a reference rate. Changes in the underlying LIBOR interest rate on our short-term debt could affect our earnings. For example, a hypothetical 100 basis point increase in the interest rate on our short-term debt would result in an increase of approximately $0.4 million in annual pre-tax interest expense. This estimated increase is based upon the outstanding balance of our short-term debt as of March 31, 2021 and assumes no mitigating changes by us to reduce the outstanding balances and no additional interest assistance that could be received from vendors due to the interest rate increase.

Foreign Currency Exchange Rate Risk

Products purchased from European-based and Chinese-based manufacturers are transacted in U.S. dollars. Fluctuations in the U.S. dollar exchange rate may impact the retail price at which we can sell foreign products. Accordingly, fluctuations in the value of other currencies compared with the U.S. dollar may impact the price points at which we can profitably sell such foreign products, and such price points may not be competitive with other products in the United States. Thus, such fluctuations in exchange rates ultimately may impact the amount of revenue, cost of goods sold, cash flows and earnings we recognize for such foreign products. We cannot predict the effects of exchange rate fluctuations on our operating results. In certain cases, we may enter into foreign currency cash flow hedges to reduce the variability of cash flows associated with forecasted purchases of boats and yachts from European-based and Chinese-based manufacturers. We are not currently engaged in foreign currency exchange hedging transactions to manage our foreign currency exposure. If and when we do engage in foreign currency exchange hedging transactions, there can be no assurance that our strategies will adequately protect our operating results from the effects of exchange rate fluctuations.

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Additionally, the Fraser Yachts Group and Northrop & Johnson have transactions and balances denominated in currencies other than the U.S. dollar. Most of the transactions or balances for Fraser Yachts Group are denominated in euros. Net revenues recognized whose functional currency was not the U.S. dollar were less than 2% of our total revenues in fiscal 2020.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that material information required to be disclosed by us in Securities Exchange Act reports is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

Our Chief Executive Officer and Chief Financial Officer have evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) as of the end of the period covered by this report. Based on such evaluation, such officers have concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were effective at the reasonable assurance level.

Changes in Internal Controls

During the quarter ended March 31, 2021, there were no changes in our internal control over financial reporting that materially affected, or were reasonably likely to materially affect, our internal control over financial reporting, except as described in the following sentence. On October 1, 2020 we acquired SkipperBud’s. As we proceed with integration, the expectation is we are implementing various accounting processes and internal controls over financial reporting for this reporting subsidiary.

Limitations on the Effectiveness of Controls

Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and procedures and internal control over financial reporting will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Although our disclosure controls and procedures are designed to provide reasonable assurance of achieving their objectives, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, a control may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

CEO and CFO Certifications

Exhibits 31.1 and 31.2 are the Certifications of the Chief Executive Officer and Chief Financial Officer, respectively. The Certifications are required in accordance with Section 302 of the Sarbanes-Oxley Act of 2002 (the “Section 302 Certifications”). This Item of this report, which you are currently reading is the information concerning the Evaluation referred to in the Section 302 Certifications and this information should be read in conjunction with the Section 302 Certifications for a more complete understanding of the topics presented.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

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 March 31, 2021, we do not believe that these matters will have a material adverse effect on our unaudited condensed consolidated financial condition, result of operations, or cash flows.

ITEM 1A. RISK FACTORS

None.

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ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

3.1 |  | Articles of Incorporation of MarineMax, Inc., a Florida corporation. (1)
3.2 |  | Bylaws of MarineMax, Inc., a Florida corporation. (1)
4.1 |  | Form of Common Stock Certificate. (1)
10.1 |  | Key Executive Retention Agreement, by and between MarineMax, Inc. and Anthony Cassella, dated February 25, 2021.
10.2 |  | Key Executive Retention Agreement, by and between MarineMax, Inc. and Charles Cashman, dated February 25, 2021.
31.1 |  | Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a), promulgated under the Securities Exchange Act of 1934, as amended.
31.2 |  | Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a), promulgated under the Securities Exchange Act of 1934, as amended.
32.1 |  | Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2 |  | Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS |  | Inline XBRL Instance Document - The instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document
101.SCH |  | Inline XBRL Taxonomy Extension Schema Document
101.CAL |  | Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF |  | Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB |  | Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE |  | Inline XBRL Taxonomy Extension Presentation Linkbase Document
104 |  | Cover Page Interactive Data File (embedded within the Inline XBRL document)

| (1) | Incorporated by reference to Registrant’s Form 8-K as filed March 20, 2015.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

|  |  | MARINEMAX, INC.
April 27, 2021 |  | By: | /s/ Michael H. McLamb
|  |  | Michael H. McLamb
|  |  | Executive Vice President,
|  |  | Chief Financial Officer, Secretary, and Director
|  |  | (Principal Accounting and Financial Officer)

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