William H. McGill, Jr. - Chairman, CEO and President Michael H. McLamb - EVP, CFO and Secretary Shannon Devine - ICR, IR.

James Hardiman - Longbow Research Jimmy Baker - B. Riley & Co. Michael Swartz - Suntrust Robinson Humphrey Joseph Hovorka - Raymond James Gregory McKinley - Dougherty & Company.

Good day, and welcome to the MarineMax Fourth Quarter 2014 Earnings Conference Call. Today’s conference is being recorded. At this time, I’d like to turn the call over to Shannon Devine of ICR. You may begin..

Thank you, operator. Good morning, everyone, and thank you for joining this discussion of MarineMax’s 2014 fiscal year-end and fourth quarter results. I am sure that you have all received a copy of the press release that went out this morning.

But if you have not, please call Linda Cameron at 727-531-1700 and she will then fax or email one to you right away. I would now like to introduce the management team of MarineMax. Bill McGill, Chairman, President and Chief Executive Officer; and Mike McLamb, Chief Financial Officer of the company.

Management will make some comments about the quarter and then be available for your questions. With that, let me turn the call over to Mike McLamb.

Mike?.

Thank you, Shannon. Good morning, everyone, and thank you for joining this call. Before I turn the call over to Bill, I’d like to tell you that certain of our comments are forward-looking statements as defined in the Private Securities Litigation Reform Act.

These statements involve risks and uncertainties that may cause actual results to differ materially from expectations.

These risks include, but are not limited to, the impact of seasonality in weather, general economic conditions and the level of consumer spending, the company’s ability to capitalize on opportunities or grow its market share and numerous other factors identified in our Form 10-K and other filings with the Securities and Exchange Commission.

With that in mind, I’d like to turn the call over to Bill..

Thank you, Mike, and good morning, everyone. First, I’d like to thank our team for their efforts and focus on producing a good fiscal 2014 year and a strong fourth quarter led by solid 10% same store sales growth. Keep in mind this double-digit increase follows 7% last year and 18% in 2012, so it’s a healthy three years trend.

The primary driver of our growth was new boat sales. Our pricing strategy, premium brands and the training we do with our teams produced industry-leading results yielding another quarter and a year of market share gains. Over the past several years, we have expanded with important brands, which have certainly contributed to our growth.

During the September quarter and fiscal 2014, we saw not only strength in the brands we added but also from our legacy brands like Sea Ray, Boston Whaler and Azimut. Sea Ray, which is reinvigorating its brand with extensive new model introductions that are expected over the next few years, saw solid growth.

This is especially encouraging since most of this quarter’s sales growth did not come from the new models. We also saw considerable growth in units and in the stern drive segment as well. Overall, we generally had growth across all segments that we operate within.

As we have indicated in the past, almost any product that is fairly new and priced about right is selling well with good margins.

Also, we have noted over the last few years larger products seem to be more resilient and doing better, but now we are also seeing increased traction from smaller models, both outboard and stern drive powered, again an encouraging sign.

As we have discussed previously, our one-price strategy conveys to our customers that we respect their right to our best price and as such we price our boats and yachts at our best and lowest prices, thereby eliminating any negotiation with customers who really just want at the end of the day the best price.

As we have cleared the deck to make way for our new 2015 models, our margins dropped slightly year-over-year in the fourth quarter. However, they remain historically very good.

Our full year margins actually improved over last year and we believe that we have the potential to see modest margin tailwinds on an annual basis in the near term, as pent-up demand is fulfilled during the recovery. Our inventory levels are healthy and aging is in good shape. This positions us well for fiscal 2015.

Our improving charter business modestly added to our rise in inventories we prepared for the strong winter season in the British Virgin Islands. One of the greatest attributes of our business is the customers’ centric approach we take to build relationships and long-term loyalty and ultimately sales growth.

However, our strategies of teaching, servicing and showing our customers how to have fun comes with a cost and one we are committed to ensuring that the boating lifestyle at MarineMax is never compromised. This is a critical customer and validated differentiator for our company and one we will continue to maintain.

Some of these programs include our getaway trips, our mobile service, our educational classes and captains that teach our customer how to use and enjoy their boats. But we are also very cognizant that we need to get even more leverage on our business and so we will remain vigilant in this area.

With that background, I’ll ask Mike to provide more detail on the quarter and our year.

Mike?.

Thank you, Bill, and good morning, again, everyone. For the September quarter, our revenue was approximately 164 million, up about 10% from the prior year, driven by solid same store sales growth. Geographically, while most of our markets were up, Florida and New Jersey again led the way.

Following the devastation from Hurricane Sandy, New Jersey clearly seems to be rebounding well now that much of the infrastructure has been rebuilt. Florida, which has been consistently improving for several years post-recession, should continue that trend into the future. Keep in mind we have about 50% of our business in Florida.

For the quarter, while our gross profit dollars grew, our gross margin decreased slightly from last year. Overall, margins remain healthy at 26.2%. With significant new model introductions by Sea Ray, we try to ensure the replaced models keep moving out as the new models are forecasted to arrive. This can pressure margins.

Plus as boat sales rise, which are the lowest margin of all the products we sell, consolidated margins are also pressured. However, we believe that as the recovery continues and new models become more available to sell, we have the opportunity for margin expansion.

In this quarter, like our fourth quarter in 2013, we benefited from a damage recovery received from BP as a result of the Deepwater Horizon oil spill. We, like many Gulf Coast-based businesses, filed claims to recover damages we incurred from this spill.

In our September quarter this year, we were awarded payments of $600,000 and last year during the September quarter, we were awarded 4.7 million net of taxes and other expenses, which reduced SG&A expenses in each period.

Additionally, in this year’s September quarter, we recognized a gain of approximately $1 million from the sale of our northern Minnesota location, which also offset SG&A expenses. Absent these items, SG&A as a percentage of sales improved to 23.4% from 25.8% last year.

We produced good expense leverage in the business when the unusual items are factored out. Interest expense dropped slightly year-over-year despite an increase in average borrowings on our line, due to the rate decreases that we negotiated twice in the last 18 months.

For the September quarter, we have a tax expense of 91,000 compared to 136,000 last year. As we have said in the past, our effective income tax rate will remain essentially zero for the near term due to the availability of substantial net operating loss carryforwards, which are fully offset by a valuation reserve.

As more certainty unfolds for our industry through a sustained recovery, the company will record a tax provision once our valuation reserve is removed. However, the company will not pay meaningful taxes until over 50 million of taxable income is realized.

Excluding the BP recovery in both periods and the gain on the property sale in 2014, our fourth quarter net income increased significantly to about 3.6 million or $0.15 per diluted share compared with net income of 490,000 or $0.02 per diluted share last year. For the year, I will highlight a few items.

Revenue increased to about 625 million, driven by a 6% increase in same store sales. Like the quarter, the main drivers of the annual growth were existing brands like Sea Ray along with contributions from newer brands. Margins increased reflecting our pricing philosophy and improving industry conditions.

Removing the unusual gains and BP recoveries in both periods will show we achieved good expense leverage resulting in greater earnings growth. On a pre-tax basis, earnings grew substantially for about 2.2 million to 9.8 million for 2014. On to our balance sheet, at year end, we had approximately 28 million in cash.

Keep in mind we have a substantial cash in the form of unlevered inventory. Our inventory at year end was about 244 million, which was up modestly from last year. As Bill mentioned, the aging of our inventory also continues to be healthy as reflected by our historically good margins.

We often get asked questions about the fair value of our real estate versus our book value. The story of Minnesota that I mentioned we sold was acquired in 1998 and it was sold for about five times book value. Certainly, we do not believe such upside applies to all of our property, but it does validate that upside certainly exists.

Other long-term assets increased about 6 million, which reflects our investment in a note receivable as part of a process to secure ownership of a 24-acre on-the-water facility in the fast-growing market of Fort Myers, Florida. Eventually that note will become real estate and it will move to fixed assets.

Turning to our liabilities, our short-term borrowings were about 124 million at year end, which was similar to last year. Customer deposits while not the best indicator of the future given they can be lumpy trended positively with an increase year-over-year. Based on all this, our balance sheet is extremely well positioned.

We ended the year with a current ratio of 1.77 and total liabilities to tangible net worth ratio of 1.69. Both of these are very healthy ratios. Our tangible net worth stands at over 238 million. We own over half of our locations, which are all debt free and we have no additional long-term debt.

Bill will provide color about the Fort Lauderdale Boat Show, which wrapped up yesterday but I would like to indicate that we expect final October results to reflect an increase above last year continuing the trend we saw in the fourth quarter. Additionally, our backlog is currently tracking ahead of the same point in time last year.

All that said, we are up against a 9% increase in same store sales in the December quarter last year and also the typical uncertainty that comes with the seasonal winter months, not to mention other factors. It’s also worth noting that the December quarter is seasonally our smallest quarter of the year. With that, I’ll turn the call back to Bill..

Thank you, Mike. As Mike mentioned the Fort Lauderdale Boat Show, which is typically one of the largest shows in our industry started last Thursday and ended last night. The crowd was larger this year than in the recent past. The consumers’ interest in making purchases at the show and in the short term appears to be improving.

Overall, it was a very good show across all brands and segments that we operate within. The new Sea Ray models were well received and sold as we expected. This show and others that we have attended recently are a further indication that the industry recovery is underway.

We all need to be cautious, however, until it becomes clear that meaningful gains are occurring and ultimately reflected in our results. We are making great progress in driving not only consumer interest but also sales. The unique MarineMax experience is helping us attract repeat customers and new customers alike.

With new and innovative products emerging from the manufacturers and a consumer that is starting to have a bit more confidence in the economy, the company is well positioned to continue to support our MarineMax family of boaters.

Our fair one-price approach and our enhanced customer service and our one-stop solution for boaters’ needs makes our company with stores across the country the natural choice for our owners and prospective buyers.

However, we understand we much earn our customers’ business every single day and our team is committed to not only driving profitable sales, but ensuring that MarineMax experience is provided to each and every customer.

These strategies have proved to be key differentiators for us in the past and will continue to grow our company and expand our brands selectively while seizing on other opportunities as they emerge. As Mike shared with you, our balance sheet is in very good shape. The financial strength we have allows us to consider growth opportunities as they arise.

We are always in serious discussions with potential acquisition candidates but are certainly mindful of the need for accretion and for a return for you, our shareholders. We thank our team who together produced a solid 2014 and look forward to building on a profitable 2015. With that, operator, we’d like to open the call up for any questions..

(Operator Instructions). We’ll take our first question from James Hardiman with Longbow Research..

Hi, guys. Thanks for taking my call. I was hoping maybe you could help us talk about or at least quantify the mix of the new boat models versus some of the older stuff you’re trying to clear out. Bill, I think you mentioned that the majority of the sales are still some of these older models.

So maybe help us quantify the difference in the mix there and then help us think about what that turns into next year between some of the newer models and the older stuff? And then just maybe help us remember the gross margin difference between some of the clear-out stuff versus the newer models?.

Okay, James, and good morning. If you look at most of the sales that we get in 2014, most all of it was not the new products. I mean, take Sea Ray as a manufacturer. There’s like 13 new models that we’ll be seeing throughout this year.

We saw a few of them last year, but most of what we were selling and we needed were products that hadn’t been refresh for quite a few years. And as such had an impact on some of our margins.

The margin opportunity with the new product is substantially better, as we all know, and because the desire is even greater there for that product and there’s a lot of new products coming. Boston Whaler has done an outstanding job with new products and we see it in our margins. However, the whole line can’t be refreshed every year.

And Azimut continues to give us new products as well as well as Scout and Sailfish and others – and Nautique kind of my passion; a lot of new models and they’re doing very, very well. But the pressure as you work your way through models that haven’t been refreshed for a while, it does hit the margin line.

However, if you look at our results, I think we’ve done a good job in maintaining decent margins. But the upside when the new products really start rolling out to even a greater extent should lead to even greater upside potential for us..

That’s helpful.

And so how do we think about that moving forward? Is the majority of sort of the close-out activity behind us? What does that look like in the December quarter and into next calendar year?.

Our aging has substantially improved. We still have some older models that we’ll need to sell through in 2015, but we’ll have a lot more of the newer models that are coming. And so as such, we feel encouraged.

If you look at used, the used margins have improved for us and the pressure from the brokerage and used market appears to be less, because if you go and look back for the last three to five, six years, there weren’t a lot of new boats sold and therefore there’s not a lot of used boats out there.

And James, a lot of people are not going to be looking at a boat much over five, six years old in a lot of cases and so there’s just not many there. So with that is increased margins on the used and of course that helps drive the new business as well..

James, I think realistically, I think we said this on the last call, in the December quarter because we don’t have a lot of the new stuff come in yet from our core supplier, Sea Ray, you can expect margin pressure similar to what we either had this quarter or somewhat we saw in the June quarter.

You get into the March quarter, our expectation is we’ll have more of the newer product to sell, which is what Bill was saying.

And so that’s the expectation that once we get into the March quarter, some of these discussions – this is a normal thing for us to be having the older models leave with the newer models coming in, we just happen to have a very large supplier who is going through a very significant reinvigoration of its models..

Got it. And then how should we think about the backlog? I mean you guys have made it no secret that your sales would have been meaningfully better had you gotten the product that you wanted and to some degree the products you expected.

If you get what you expect this coming year, how much of a sales benefit would that be from just a backlog?.

I think it’s easiest – I think the best way to answer is we’re expecting a meaningful impact from our primary supplier, Sea Ray, our core supplier Sea Ray. The question becomes timing of all the models and so forth that’s hard to put a number or range on it.

We don’t give guidance, but part of it does weigh in on the economic factors and so forth and ultimately the reception of the products in the marketplace. So far all the models that we’ve seen have been very well received by the customers, including the product that we sold just then at Fort Lauderdale that just wrapped up yesterday..

What was interesting about Fort Lauderdale is we had a very good show, very good double-digit increase at Fort Lauderdale over last year and was a good year than last year at Lauderdale. But it was across all the whole product line.

I mean, from Sea Ray's new 19 and 21 footers to the new 270 Sundeck Outboard and stern drive model through the new 470 and they launched a new 59 and of course, the 65s are there and it was a – we’re seeing it everywhere.

Whaler, I mean you can hardly walk down the aisles and the reception of Whaler’s new 42 footer was absolutely incredible, a $750,000 plus 42 footer. And so new sales, as we start to get the product to a greater extent, I think we’ll really see some significant improvement in our business.

However, it will remain challenging for new product from pretty well all of our manufacturers because they’re running wide open to try to get them out to us as we’re selling. But the interest is there and demand is there and the backlog is still there..

Excellent. Thanks for all the color, guys, and good luck..

Thank you, James..

We’ll take our next question from Jimmy Baker with B. Riley & Co..

Hi. Good morning, Bill. Good morning, Mike..

Hi, Jimmy..

Good morning, Jimmy..

So year-end customer deposits here at the highest levels we’ve seen since 2007.

Can you just talk about how reflective that is of your backlog and maybe just kind of parse through that as we know that some of the trade-up orders don’t show up in that figure? And then separately, can you just speak to how long it will take you to recognize the revenue in that backlog?.

Yes, I can make a comment and you can comment as well. I’d tell you we talk about customer deposits a lot. They can be very lumpy. It doesn’t necessarily directly correlate with what’s going to happen to revenue in the near term.

It’s generally a better thing that’s improving, Jimmy, although some times when it drops, you’ve heard me say that I am not that concerned about it.

I think the bigger thing to take notice of is what we’re saying about our backlog and the fact that our backlog is improving, I’ll say, meaningfully and has been for a number of these calls that we’ve had is good underlying support for the future. How far out our backlog goes, I’d probably say the furthest it goes is probably 18 months.

It could go a little further than that. Most of it would be coming in, in fiscal 2015. We don’t have a ton of visibility on any one quarter, any one month. Our team is working hard every day to create our business and take care of our customers, but it at least gives you a sense of kind of how things are trending from a backlog perspective..

Jimmy, you mentioned probably the biggest driver that we do not show in customer deposits is trades and as people are moving up today, as an example, into the new Whalers and to the new Sea Rays, most of them have trades and so the deposit is very small, however, the trade is part of deposit. And it’s not shown as customer deposits.

So it’s hard to look at customer deposits, as Mike said, and get a good flavor of what’s going on. We look at the backlog and we look at deals that are actively in the works and that’s the best indicator for us..

Okay, that’s helpful. And then Mike you mentioned – you’ve gotten a ton of excess liquidity here given not only the cash on the balance sheet but also that amount of unlevered inventory.

Just given your outlook for the industry or more specifically, the momentum you’re seeing in your backlog here, why not use some of that cash to buy back the stock?.

When you look at the company over the history of MarineMax, we’ve been in a position where we’ve had excess cash and we’ve taken – I shouldn’t say excess cash. We’ve been a strong cash position, which we’ve used to make acquisitions. Bill commented on us being in discussions with the different dealers, which we always are.

And so I think you’ll see us use our cash from that perspective. I think once we get a little further away from the trough of the recession and there’s more certainty in our industry, I think that we will be certainly considering share repurchases from a Board perspective.

When you look at our company, though, just to speak openly; 2012 we made a little bit of money, '13 excluding BP we made a little bit of money not a lot. Really the – 2014 we’ve done better, it’s still around 10 million on an apples-to-apples basis excluding the gains.

So we want to make sure that we’re – there’s no surprises coming in the future before we start doing that, Jimmy..

As an example, Jimmy, we bought a defaulted note on a property down in Fort Myers and a very key property that will long term be very beneficial for our company, and we used to be there as an example on that location. And so being able to use cash to do something like that is important for us for the long term.

And so we’re going to keep focusing on what we can do to help the company for the long term and some of that will be acquisitions and some of it will be properties that we mentioned..

Okay, that’s helpful. Last ones from me.

First, just on the big boat side of the market, are you seeing any uptick in Azimut demand as the dollar strengthens or would you expect that to be a nice tailwind for that brand if the $0 trend continues? And then separately on the smaller side, you talked about seeing some broad-based strength here with some of the smaller boat segments picking up as well.

You’ve historically done a great job of retaining that more entry level buyer, growing him or her up through your portfolio.

Can you just talk about the buyer that you’re seeing in the smaller segments? Is it a first-time boat buyer, is it a younger buyer, minority buyer, some of these that the industry maybe just on a – or let’s say struggled to attract in recent years?.

I’ll add. First of all, on your first question there, Azimut has done a very good job with new products and continues to be a very important part of our business. Obviously, if the dollar will continue to strengthen, the euro will continue to drop, that should be an advantage to that brand and also help to drive some sales as well.

We haven’t seen it as of yet, because we pretty well priced the boats to market. And so it may help our partner Azimut a little bit better if the euro strengthens for a while, but there is not a direct correlation in the euro and the prices that we get from the manufacturer.

As far as the entry level is concerned, as we know Sea Ray had made the decision to kind of vacate the very entry level part of the business.

And the good news is the strength of the Sea Ray brand is so incredible and so recognized that now that we have new products and we’re just starting to get them, but now that we have new products, we believe that’s going to take off like a freight train.

I mean, I really do believe that there’s a lot of people that recognize the strength of the brand and the dealerships behind that powerful brand and we’ll continue to grow.

As far as the demographics, yes, they seem younger but there is also a lot of people that have – are wanting to trade the boats that are now getting to be 8, 10, 12 years old that in a lot of cases they’re on a lake and so they don’t need much larger than a 18 to 24-foot boat, and they’ve just been waiting for the new products to come.

So we’re encouraged but not only outboard, but we mentioned on the call that we’ve had growth in stern drives whereas our industry really hasn’t. And I believe probably the biggest reason for that is we just haven’t had a lot of new and innovative product historically and now we’re getting it. And so we’ve got a team that’s really focused.

Without a doubt this year, this spring or the superior winter up north that we encountered had an impact. Take Minnesota, we recovered some but it was costly with what we had there. But that being said, we’re well positioned for a good year next year..

Understood. Well, congrats on a very good year and good luck..

Thank you, Jimmy..

We’ll take our next question from Mike Swartz with Suntrust..

Hi. Good morning, guys..

Good morning, Mike..

Good morning..

Bill, just real quick, can you clarify the comment you made about – I think it was a comment about maybe your order book coming out of Ford Lauderdale.

Did you say that I guess orders or deposits coming out of that show were up double digits versus last year, or did I hear that wrong?.

No, you heard it right. It was really nice. I was there through Sunday evening at the show and it was nice to see the smiles on our team’s faces and also to see the customers even more serious than we’ve seen them for a long time.

I’ve said for a long time, Mike, that when – [hang on] (ph) when consumer confidence gets at 100 plus and we’re in the – I think it’s 94 right now, so I think it’s reflected in what we saw at the show. So we still got in a lot of cases demonstrate the product to the customer, we got to deliver it, we got to get the financing done in some cases.

So there’s still a lot of things to do, but it was a breath of fresh air to see the attitudes and the excitement at the show. Just on a note, we had 13 displays with all the brands we represent.

I think we had 160 team members working and between us and the manufacturers, a couple of hundred boats and so it’s a huge show and it’s a very important show. And this year we saw a lot of people from the Northeast and Midwest and from the lakes, et cetera at the show, and so it’s a positive indicator..

I think, Mike, if you look at all of the fall boat shows, so if you start in a show we were in, in Ohio all the way through to Lauderdale, all the shows have been pretty decent. Obviously, Lauderdale is one that everybody watches and so it gets a lot of attention. But the trends in the industry are percolating in the right direction it seems.

You combine that with the manufacturers coming out with new models and things at least appear more positive going into 2015, but it’s also the beginnings of the December quarter. So we got a ways to go..

No, right, understood.

Just taking a step back and looking a lot at the new product coming out from Sea Ray and others over the next several quarters to years, maybe you could qualify how much of the product that you see is maybe white space product, whether that’s under 30-foot Sea Ray boat without board power versus how much is just a kind of refresh of existing product?.

We really didn’t have outboard product from Sea Ray except for the Ventura and a few Sundecks, historically, and we’re getting a lot of outboard power now and as we all know, there’s been somewhat of a shift to the outboard focus. But most of the new product from Sea Ray is capturing white space.

And not that we didn’t have a 58 Sea Ray before, but we got a wow 59 footer today and our new 270 Sundeck is like nothing like what we had before with our 260 and 280 Sundeck. And of course, as I mentioned a little earlier, the new SPX series, the 19 and 21s in both outboard and stern drive are game changers.

So I call it white space because especially there in the smaller boats, we didn’t have anything that was really what I would call competitive in the market. So lots of opportunity. Now our partners got to get them to us at hopefully the rate that we need them and supply and demand will help drive margins for both..

Just on that comment, in the fourth quarter and really our year, I mean really the only boats that we delivered were really the 35 SLX, which everybody knows….

Which continues to be fairly strong..

Which continues to be a good model and a handful of the 65s. So all the other models are really 2015..

And there’s more coming beyond 2015, so that’s the good news. And if you look at our partner, Azimut, we got a lot of new products this year both with Azimut and Atlantis and we now have Ocean Alexander in our family with boats from 72-feet up to 155-feet and so we are starting to get some traction there as well..

And then maybe just a final question, just taking a step back, we hear a lot about the weakness in fiberglass stern drive and fiberglass boats in general.

And maybe you can talk to what you’re seeing maybe above 30-feet versus what you’re seeing below 30-feet and maybe how you think that plays out over the next year or two?.

Bill’s comments were – we saw good strength below 30-feet as well, and we’ve seen really in our June quarter and our September quarter, our growth of boats below 30-feet was stronger than our same store sales growth in both those quarters and we had 22% growth in the June quarter. And that’s stern drive.

And those of you who follow the industry, you know that stern drive has been down about every month this past year.

And so our strategies of embracing our customers and keeping them closer to us and servicing them and teaching them and showing them how to use the boat seem to be paying off for us in market share gains in height of this very important season of summer..

Mercruiser came out with a new 4.5-liter stern drive and it’s from cast iron block, they built it up into really a marine-focused engine with a great torque and lower weights and the boat just absolutely is quieter and runs better. So a good reason for people to want to continue with stern drive.

And of course, there is still benefits to stern drive in a huge way because you don’t have that engine hanging off the back of the boat like you do with an outboard, but they’re both incredible products. So we believe the stern drive market at least for us is going to continue to grow and do very well. And I mean a perfect example is the 350 SLX.

I mean we’ve had unbelievable sales that continues to be strong on their twin-engine stern drive. And so a new product gives people a reason more to jump in and part of that is this new engine that they’ve got. I think it’s going to be a game changer as well..

All right, great. Thanks for the color..

Thank you, Mike..

We’ll take our next question from Joe Hovorka with Raymond James..

Thanks, guys. A couple of questions.

I got dropped from the call, so I apologize if some of these have been asked already, but did you talk about your comp mix between volume and average selling price? That is, is volume more or less than 10%?.

Yes, not specifically, Joe, but yes, our volume was greater than the same store sales growth.

Again, we’ve been talking for probably three years, maybe longer, about the strength in larger product in the last couple of quarters, maybe as far as a year, we’ve been talking about percolating strength below 30-feet and we saw good business in the June quarter before 30-feet and pretty good business in this quarter below 30-feet which technically drove down our average unit selling price.

Although again the bigger product is very healthy and doing – or continues to gain momentum as well..

And how much more – I mean can you put a number to it? Was your volume up 13% or 14% or was it more than that?.

It was in the mid-teens. I don’t remember if it was 14% or 16%, but it was in the mid-teens..

Okay, great. And then you got a lot of new product, I think you said 13 new models for '15 out of Sea Ray. What is the cadence of that product being introduced as far as that [hinge] (ph) your dealers? I understand somewhat the 19 to 21 or 24 is coming this quarter, but it wasn’t impacted in September.

How’s that rollout look between now and say the spring of next year?.

I think by the spring, a lot of the smaller boats we should be in great shape with probably all the way up through the 270. The 65s and the new 59 will remain challenged, because we got a bunch of them sold and the demand is there and of course you don’t manufacturer a 65-foot boat in just a short period.

But the product is being very well received and the quality is there as you would expect with Sea Ray and I think the demand is going to be there as well.

But we’re going to be a little challenged with some of the bigger stock from Sea Ray throughout the year and even with Azimut because of the demand for some of the products and success we’ve had with some of the sales..

How long are those order books going now for the 65 and the 59?.

They’re on about a year..

Yes, we’re into fiscal 2016..

And then you talked a bit about your strong leverage that you had on the SG&A line in the quarter.

As we look into 2015, will we expect that typical leverage 15%-ish coming to the op margin on every incremental dollar in sales, or could we be a bit better than that in 2015?.

I think the way that the business has always been modeled is that 15% you’re referring to, Joe, I think if we had a quarter that for whatever reason has very strong same store sales, that could be different, it could be greater. Again, if we have a weak quarter then you get the inverse of that.

But the team did a good job in 2014 to get leverage in the business and that’s certainly something we talk about a lot. So that’s what we’re looking to do for the future..

Okay, great. That’s all I got. Thanks..

Thank you, Joe..

We’ll take our next question from Greg McKinley with Dougherty..

Yes, thank you.

I wonder if you could give us a sense, maybe help us quantify the product level margin benefit from, let’s say, some of these fresh new products versus some of the products that’s a little longer in the tooth as you work through older models in September and December just so we can get an order of magnitude of the benefit of the refresh?.

I think we commented on the June call; if you look at the couple of models that we’ve been delivering from Sea Ray in particular, the 35 and the 65, we’re generally recognizing certainly higher margins on those models and on other product and a lot of it is the pent-up demand as much as a couple hundred basis points, a 100 basis points or just all depends on the specific transaction that happens.

The point is, is that new product whether it’s from Sea Ray or Whaler or Azimut or any manufacturer doesn’t have the competition in the marketplace that a product’s been around for a while. So we always recognize greater margins on the new.

And with such a big amount of new product coming, it gives us in theory anyhow a tailwind as a product at the store..

Okay. Thank you. And then you’ve been talking about backlog and sort of comparing and contrasting that versus customer deposits.

Can you quantify backlog and just tell us maybe that’s more of a metric we should be paying attention to in terms of your visibility for '15?.

We don’t quantify it. I think it’s better to just listen to our commentary around the backlog. Again, our backlog on one hand is – we don’t have a ton of visibility into a quarter or a year. And so at any one point in time, the dollar level of the backlog isn’t what’s important, it’s more of the trend that it’s up or it’s down.

And the fact that it’s been up for – honestly for a while now is a positive sign and a data point that the industry is continuing to get its sea legs and moving towards recovery..

Okay. And then we’ve talked a lot about the new products hitting the market whether it’s Sea Ray or Boston Whaler, some of which are selling very strongly due to their size, it’s more of a production issue in terms of when you’d be able to recognize revenue.

But based on what you know today, what are the models that are likely to have the biggest impact to your 2015 sales, the ones that we should really keep an eye on?.

It’s really great. I think more than anything it’s all of them. If you take the 19, 21 SPX, it can have a very significant impact on our business this year because as I mentioned, we were hurting in the entry level and smaller boat segment.

Obviously, the 65s are very important to us and they’re cranking them out than the bigger Azimut, so we got a couple of 84s that are sitting out there that have been ordered for quite a while. The team is really excited about the new outboard sundecks that we’re getting.

As an example, 350 SLX will continue, I think, to be a super strong product for us and the backlog is very good on that product. And Sea Ray is doing everything they can to get them out the door even quicker. So it’s hard to say one or two or three. I think it’s a combination of all of them.

And the new 42 Whaler is an example, I mean it was an unbelievable hit at the show. If you try to write down the features and benefit on that boat, you can’t put it on one sheet of paper and you can see that by you couldn’t get on the boat. I mean customers were all over it.

So, the same with Ocean Alexander; very, very busy on their new 100 that they introduced at the show, just an absolute spectacular boat. To give you an example, at 10-knot cruise, which is in these bigger boats that’s what people like to have their captains doing is run them at 10 knots to take them to their destination.

Only the boat’s burning like 20 gallons an hour total which is just game changing. So we’re real excited about the new products we have and the brands..

Great, thank you. And then maybe just looking back on '14, I know you mentioned earlier on the call, the pressures that are very, very late spring and summer had on the upper Midwest.

Is there any way that you can maybe distinguish regionally how impactful that was and maybe gives us a sense for the opportunity for recovery in that region barring those events next year?.

It wasn’t only Minnesota and Ohio, it was also in New York and New Jersey and we even saw it in panhandle of Florida where there really was not a decent weather and that’s a destination for a lot of people in the winter months to get on the beautiful beaches and water there.

And so it was impactful most everywhere across the country and we even saw it from some of our northern customers that didn’t come south as much as they normally would have because of the weather they were experiencing up north. But I hate to use weather as an excuse. Probably some of the good news is there were deals that were deferred.

People put off the purchasing decision. Like in Minnesota, said, oh my gosh, it’s 4th of July and I still can’t get one like Minnetonka. Some said, I’ll call it a day in my current boat for the season. Well, this coming year they’re going to say, well, that thing’s a little bit older and the boating did get to be very good once it started up there.

So there is some deferred deals that I think will get pushed to this year if we don’t get too extremely clobbered weather-wise in the north and even the southern markets. It snowed in Tennessee, South Carolina and Georgia and we had 45 degrees in Tampa on Saturday morning. So that takes a little wind out of the sales as far as boating.

I [wasn’t in] (ph) town where I could ski this weekend, but I had to use an extra thick wetsuit in this cold market to get out there..

Thank you, guys..

Thanks, Greg..

Thank you, Greg..

That does conclude our question-and-answer session. I’ll turn it back over to Bill McGill for any closing remarks..

Okay. Thank you, operator. In closing, I’d like to thank all of you for your continued interest and support of MarineMax. Mike and I are available today if you have any questions. And one thing you can do is look to your new boat for next spring or this winter. Thank you..

That concludes today’s conference call. We appreciate your participation..