MarineMax Lost at Sea: Fool by Numbers

On July 26, MarineMax (NYSE: HZO  ) released third-quarter earnings for the period ended June 30.

• The company felt the impact of the soft housing market, as consumers shifted away from purchasing big-ticket items. As a result, sales declined 9.9%, mainly from the 9% drop in comps.
• The large drop in sales left the balance sheet full of excess inventory, with inventory levels rising nearly 13%.
• MarineMax faced rising interest rates, as interest rate expenses increased $7.5 million. Additionally, the company's extra borrowings from acquisitions last year contributed to the increase.
• Putting it all together, the bottom line fell 18.9%.

(Figures in millions, except per-share data)

Income Statement Highlights

	Q3 2007	Q3 2006	Change
Sales	$379.8	$421.3	(9.9%)
Net Profit	$13.9	$17.5	(20.7%)
EPS	$0.73	$0.90	(18.9%)
Diluted Shares	19.0	19.4	(2.0%)

Get back to basics with a look at the income statement.

Margin Checkup

	Q3 2007	Q3 2006	Change*
	23.3%	23.8%	(0.5)
	6.6%	8.3%	(1.7)
	3.7%	4.2%	(0.5)

*Expressed in percentage points.

Margins are the earnings engine. See how they work.

Balance Sheet Highlights

Assets	Q3 2007	Q3 2006	Change
Cash + ST Invest.	$25.3	$28.2	(10.2%)
Accounts Rec.	$72.0	$80.5	(10.6%)
Inventory	$491.7	$435.7	12.9%

Liabilities	Q3 2007	Q3 2006	Change
Accounts Payable	$30.6	$34.2	(10.4%)
Long-Term Debt	$27.5	$33.8	(18.5%)

Learn the ways of the balance sheet.

Cash Flow Highlights

Just like you should always wear a lifejacket when boating, management should always include a cash flow statement in the press release.

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• West Marine Still Afloat
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• Boat Makers Batten Down, Part 2

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