Brad Cohen – Investor Relations William McGill Jr. – Chairman, President and Chief Executive Officer Michael McLamb – Chief Financial Officer.

Seth Woolf – Northcoast Research James Hardiman – Wedbush Securities Jimmy Baker – B. Riley & Company Joe Altobello – Raymond James Brandon Rolle – Longbow Research Fred – Citi Michael Swartz – SunTrust Greg Palm - Craig-Hallum.

Good day and welcome to the MarineMax Incorporated Second Fiscal Quarter 2017 Earnings Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Brad Cohen, ICR. Please go ahead, sir..

Thank you, operator, and good morning. Thank you for joining this discussion of MarineMax's 2017 fiscal second quarter results. I am sure that you have all received a copy of the release that went out this morning, but if you have not, please call Linda Cameron at 727-531-1700 and she will e-mail you one right away.

I would now like to introduce the management team of MarineMax, Mr. Bill McGill, Chairman, President and Chief Executive Officer, and Mr. 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 Mr.

Mike McLamb, Mike?.

Thank you, Brad. 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 by 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 and 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 would like to turn the call over to Bill..

Thank you, Mike, and good morning everyone. While I am quite proud of our team effort of producing sales that grew over 23% on top of our strong December quarter sales of 33%, we did expect when we generate even more revenue during the March quarter.

For our very strong boat show performance of almost all of our winner shows including late March West Palm Beach show, as well as solid trend each month, we anticipate closing additional sales in the quarter. Given our backlog of business entrance, we believe most of the business will be captured in this quarter.

Industry trends and our customers' outlook are healthy. Therefore, we have built MarineMax for larger overall sales growth. We turned our incremental profitability in the quarter due to the timing of the closings.

Having said this, our 13% same-store sales increase combined with our December quarter performance has produced a first half start to the year with 20% same-store sales growth and 70% improvement in net income.

Given a strong start to fiscal 2017 which is on top of many years of sustained sales growth, it is clear that the industry is continuing its recovery. It is also clear that consumers are embracing the new innovative products, and the benefit of boating with MarineMax.

Our first half same-store sales growth for the last three years which is 20%, 12% and 35%, additionally our same-store sales increase of 28% in the December quarter, followed by 13% this quarter illustrates the difficulty and forecasting one quarter versus another.

Based on the timing of the business, which is why we have always focused on annual results. Today we did reaffirm our annual guidance based on trends in business we see. And Mike will give you more detail later.

The takeaway is that while there will be volatility and earnings quarter-over-quarter over the course of the year, we have delivered not only industry leading, but some of the strongest sales and earnings results as it relates to many other consumer related businesses.

To that point, let me thank our MarineMax team for producing such sustained strong results, while ensuring that our customers are happy. Our stores and our team continue to deliver the boating dream, while helping our customers enjoyed the boating lifestyle. As we move forward, we should be well positioned develop on the firs, half start to 2017.

The March quarter results include the addition of nine stores that we operate as a result in the April 2016 in January 2017 acquisitions of Russo marine and Hall marine. Fundamentally, both acquisitions are going very well.

However, seasonally the March quarter is one where their expenses rise as the percentage of sales as they get ready for this boating season.

Beyond the addition of these stores based on the sustained growth in the last three years, we have invested in the future as we had team members in both sales and service, and this quarter we increased our marketing efforts. We believe these investments should enable us to capture additional business and market share gains for the long term.

Once again, we believe our results outpaced that of the industries as we gain market share in the categories that we participate. We continue to also benefit from the consolidated brand and segment expansion, we executed bond which started back in 2008.

We now carry more complimenting brands and segments in our stores in before, offering our customers a one stop shopping experience. This coupled with the increasing strength and improved the outboard proportion demand is helping us to drive our growth.

With a healthy trend in the industry, demand for products from our manufacturing partners and improve aging, we did see margins rise in the quarter in many categories and brands we carry. This led to improve consolidated margins in the quarter.

We expect to continue to build on our position as the largest retailer in the industry, given our customer centric approach and its many attributes which include our experience leadership, our stores and our boat shows, our unique offerings with premium manufacturers, our getaway in events with our customers, as well as ongoing training and education for our team and our customs.

And with that update, I'll ask Mike to provide more detailed comments on the quarter. Mike..

Thank you Bill, and good morning again everyone. For the March quarter, revenue group almost 23% to $245 million which was on top of 33% growth and $227 million in December quarter.

In addition, the revenue added from the two acquisitions, we also had a very healthy 13% increase in same-store sales, which was on top of 16% in the March quarter last year.

What is interesting about a 30% growth this quarter, it was virtually 100% driven by units? Our unit growth imply as we are gaining market share, and the unit growth in the industry was not that strong. It also says the new models for manufacturing partners are hitting the mark with the consumers.

Lastly, it clearly indicates that we saw great growth trends in the quarter, and that the industry is doing well. Geographically, Florida again was strong, but we saw a good improvement at most boat shows in many regions across the country. From a cadence perspective, building on the strong first quarter, January started and ended strong.

February was solid, but due to the timing of boat shows was not as strong as January. March although has finished lighter than we were expecting, but still a strong month. One additional data point is that we ended the March quarter with one of the highest levels of customer deposits we have ever had at this time of year.

Well we are always caution that a deposit line can be lumpy, it doesn't least provide a bit of window as you're trying this. Our gross profit dollar has increased 24.5%, as our gross margin percentage also improved 35 basis points to 24.9%. On a brand-by-brand basis, gross margins generally did well in the quarter.

Selling, general and administrative expenses as mentioned earlier are elevated by the addition of the nine stores we added from the two acquisitions, and the investments we have made based on our expectations of greater revenue. Specifically, we've added costs in payroll and marketing to accommodate and drive demand.

We continue to review each line item and look for savings as we move forward, but we do feel these investments are needed in the current growth environment. Interest expense increased to $2 million due to the additional borrowings to support our inventory required by our growth.

From an income tax perspective, as we said in last call, we do not expect to pay any material factor until we absorb our remaining NOLs and other deductions, which approximated $21 million in fiscal 2017 started.

Based on trends in our expectations, we do think that the NOLs will be absorbed before the end of 2017 and we will play some level in taxes. We do provide for income tax provision and our annual ongoing rates should be about 38.5% until a corporate tax reform that may happen.

For the March quarter, pretax profit increased to $4.2 million, while earnings per diluted share were $0.11. Turning to our balance sheet, we ended the quarter with about $52 million in cash, and we have substantial cash in the form of unlevered inventory.

Our inventory was about $405 million, which is up 17% from last year which is below our year-to-date overall growth of 28%, and our same-store sales growth of 20% which means their terms are improving. The age and mix of our inventory remains an appropriate at improving levels.

Our property and equipment increase due to investments in certain of the marinas that we own, normal maintenance CapEx and the two acquisitions we completed since last March. Turning to liabilities, our short-term borrowings were up about 21% to $266 million, which was primarily due to the increased inventory of the timing of payoffs.

As mentioned earlier, our customer deposits continue to be substantially up year-over-year up over 31% at quarter end. We ended the quarter with the current ratio of 1.43 and total liabilities to tangible net worth ratio of 1.19, both of these are very strong ratios. Our tangible net worth is about $295 million or $11.74 per diluted share.

We own almost half of our locations, which are all debt free and we have no additional debt other than our inventory financing. Now, let's turn to guidance. Let me remind everybody that we only give annual guidance.

Clearly, we started the year-off well and produced a very profitable December quarter, even though it is historically our smallest quarter and a loss quarter with that. We increased guidance following that quarter.

While the March quarter came in with less revenue than we anticipated, we believe based on our backlog customer deposits, industry feedback entrance that we should deliver same-store sales growth for the full fiscal year in the range of 13% to 16%, which is up from the 10% to 11% range we last indicated.

This does imply second half internal growth in addition to the remaining added revenue from the Hall acquisition. As a reminder, we are up against the 44% comp growth in the June quarter and a 12% comp growth in the September quarter. Our second half internal growth would more likely be September quarter waited.

We are not assuming any gross margin or leverage improvement in the back half versus the back half of fiscal year 2016 and 2015. The main variables are revenue assumptions.

Given these assumptions, we are reiterating that we still expect fully taxed diluted earnings per share to range from $1.14 to $1.24, which was up from our initial 2017 guidance of $1.04 to $1.14. This compares to a non-GAAP, but adjusted fully taxed deluded per share of $0.87 in fiscal 2016 and $0.47 from fiscal 2015. A word to about current trends.

Given that each months and last year's June quarter was strong, and with overall 44% same-store sales growth, we are up against the tough comp in April. Today, April is projected to be up, and we have a solid backlog moving into May. Having said this, we have much business to create at the busy summer selling season is upon us.

With that update, I'll turn the call back over to Bill..

Thank you, Mike. As we look ahead, we have great opportunity to welcome new boaters to the MarineMax family, and to find new boats for many longtime customers that are ready to try out some of our new innovative products that are coming to market.

This is historically is our busiest three months of the year, and thus far, we have seen a lot of enthusiasm in our showroom and at our events. Our team is getting many seasoned boaters and new boaters add on the water as we focus on driving our customer centric approach, doing hand sliced by delivering a boating grain to our customers.

To that end, last weekend we had two major events at Sarasota, Florida boat show, and in Azimut the yachting event in Southeast Florida. The boat show and major selling event for that market saw a considerable unit and dollar growth. The Azimut events, which had record RSVP from customers and a very strong turnout despite some bad weather.

MarineMax through the strength of our balance sheet remains in discussions with dealers about potential acquisitions. As we have done in the past, we will maintain our discipline acquisition strategy and expand when the terms and the culture are aligned.

In the interim, we will focus on the continued brand and segment expansion that have curtailed our revenue growth through this recovery. Underlying the execution of our business is our ongoing commitment to building our teams' talent affective.

As you have heard me say, it's all about the people, delivering the boating dream to our family and customers. And we had the best team in the industry, executing on our strategies.

We must continue to evolve our strategy as the market and the consumers' desires change, ensuring that our manufacturing partners are continuing to innovate and deliver new products, while maintaining a balance sheet that will support our growth initiatives.

For 2017, MarineMax remains well positioned to produce industry leading sales growth and results. This is supported by the strength of the industry, positive boat show results are growing backlog and building entries from our customers.

We have the right inventory and our team is poised to continue to build on our past successes and further enhance our profitability as we work to create additional value for our shareholders. And with that, operator, we'd like to open the call up for questions..

Thank you. [Operator Instruction] And we'll take our first question from Seth Woolf with Northcoast Research..

Hi. Good morning everyone. Thanks for taking my question..

Good morning, Seth..

Good morning, Seth..

So, very solid results in case continue to comp against tough comps, but I just wanted to first thank you for the color you gave on the cadence of first quarter same-store sales trends. I was wondering if you could dive a little bit deeper.

Specifically, you said that you thought they were going to be a little bit higher than we actually ended up seeing? I was wondering if they lagged your expectations in every month of the quarter or was it something that kind of popped up in March..

It would say it was really more of a March lag, January was strong. We figured February will be a light because the timing of shows, and then March was no way crescendo affect in the quarters. It's always is big as January, February combined and it was again this year..

And Seth, I think we were – at the December quarter we were little surprised at some of the business. Hall ended in December quarter that perhaps could have occurred in the March quarter.

So, I don't think we realized maybe how much in the very beginning, but at the end of the day, as we said is based upon a few boats here and there to make all the difference in the world when a few boats which they did got pushed into April. That's when we found ourselves coming up a little shorter on the earnings for this quarter..

Okay. That's helpful. And then just going forward, you talked about being able to realize some of these sales that for whatever reasons that probably will take place in April as appose to March.

Can you give us a sense for between how many sales are being push forward between the deferrals that you kind of have been able to identify? And then if you think about – not mistaken the Palm Beach show took place a little later in the month, and I am assuming you write some deals and you get residual benefits as the weeks go on.

So, is there any sense for what the magnitude of sales shift into the June quarter might be?.

Bill talked about a handful of boat shipped, it's a handful of boat that shipped, and so there's some large one and small ones. We don't typically quantify what actually shifted from one month to another from our own expectations, but I'll just give you an example.

This is an example, I am not trying to say what actually shifted, but $12 million to $13 million additional revenue in March which we certainly were expecting at least that. And our earnings look a lot better and actually our SG&A leverage ratio looks a lot better all of that.

And given the strength we've seen in April right now which is certainly benefited from some of the deals that shifted from March into April..

That's helping. In your point about the Palm Beach show is exactly right, perhaps a little bit latter and we had a very good show. And if it is then a week earlier, perhaps it would mean with more sales into the March quarter..

Okay. Well, thanks for the additional color. I guess, if I could speak one last one. Can you just talk about some of the OpEx? It sounds like you made some investments to support a larger company and then the seasonality with Russo and Hall have an impact in the March quarter. Does it look more normalized going forward? And then I hop back in the queue.

Thank you..

Yeah. I think based on our expectations for growth in the industry, other than perhaps some of the additional marketing spends that we in the quarter. I would think our operating expenses are more normalized, subject to the marketing costs that despite in the quarter.

As we said in a press release and I think we said in our prepared remarks, we do feel pretty good about where the industry is going from a growth perspective..

And I'll comment on the marketing. We are feeling very good about where our business is right now and how the consumers are responding, and their confidence that they have been and that's moving forward with the economy and everything. And as such, our boat show expenses, we've committed more to them because we are seeing the dividend is being paid.

And so, that's part of that spent..

For our next question, we'll go to James Hardiman from Wedbush Securities..

Hi. Good morning. Thanks for taking my questions. So, I just wanted to clarify. You're actually raising the same-store sales guidance for the year. You're at 10% to 11%, now you're at 13% to 16%, and yet the EPS guidance is unchanged. So, I should take that to mean that the investments that you made as of three months ago weren't anticipated in that.

They're basically offsetting the better sales outlook.

How should I think of all that?.

Yeah. I think some of that is true in our guidance. We also recognize that we are below where the streets, once again we don't give any quarterly guidance, but we are below where the street was, but we feel very good about the industry overall and our ability to drive sales based on our backlog entrance..

Okay. And then, one clarification, and then I want to ask about ASP.

13% to 16% store-sales growth, what is that translate into for overall top line given the incremental Russo and Hall stuff that we're going to see?.

So, there is no more incremental Russo stuff, the incremental Hall stuff is $35 million. I actually don't have the handy the total number when he added all together, it get closer to $1 billion to the overall..

Got it. And then, on ASPs, so you talked about ASP being basically nothing in the quarter or flat year-over-year in the first quarter in the December quarter if memory serves, if you got a really big lift, a double digit ASP lift in that quarter.

Help us to understand what's going on there that's a pretty massive swing over the course of just three months? And I guess more importantly, how should we think about pricing over the second half of the year?.

I think the ASP growth that we had in the December quarter is primarily because we had a handful of very large boats that close and what historically in a small quarter. Bill said if some of those boats would close in the March quarter, we probably would have added ASP increase right now.

I think fundamentally what you want to look for is unit growth, and so – when we look at all the new models that we have coming out, I do think our same-store sales growth is going to be waited to units, exactly what it is like this quarter is basically 100% units.

The December quarter was on an annual basis is probably going to be something like 60% unit growth, 40% ASP. It is a little bit difficult to produce quarter-by-quarter basis, but I think fundamentally units will be the main driver of our same-store sales growth..

Okay. Just to clarify, the 60%, 40% units to ASP, we've already gotten the majority of that delta in the December quarter, so which should be almost all units in the back half.

Is that how we should think about that?.

Well, typically it is in the back half. Typically the summertime is more of a – it's not when real large product sells, which is what drove the ASP growth at the December quarter. They'll be some natural ASP growth just from the migration of product as well.

I would believe that in the summertime it's going to be more waited too unit growth as well, balancing out at the whole year to something like 60%, 40%..

Excellent. Thanks guys..

Thank you, James..

[Operator Instruction] We'll take our next question from Jimmy Baker with B. Riley & Company..

Good morning, Mike. Good morning, Bill..

Good morning..

Good morning, Jimmy..

First, actually I just have a few follow-ups that most my questions were asked.

Was your new boat revenue growth in the quarter pretty comparable to the same-store sales growth?.

Yes..

Okay. And then just flipping to the guidance revision, so not to belabor at this point, but just following up to your response to James question. Let me ask it differently. If I am doing the math right, the same-store sales guidance is about a $38 million increased to your top line expectation.

So, I guess why is the incremental margin on that $38 million effectively zero..

So, when we started the year, we talked about using what I'll call relatively low leveraging in our guidance numbers, which is what we've stuck with from a guidance perspective.

And so, we feel pretty good about the top half of the year – I am sorry, the revenue lines for the second half of the year based on the trends – you could argue or probably maybe a little conservative until we see our investments pay off, but we just finished the March quarter.

We had increased investments without the best flow through, and so we're sticking to a low leverage ratio in the back half of the year. My comments in the prepared remarks were that we're not changing the leverage from what we had experienced in fiscal 2015 and 2016, which if you do all that math, you'll get between about $1.14 to $0.24..

Okay. I understood. And then maybe you could just remind us by month where you are facing the toughest comps within the June quarter.

And if you exclude these deals that that slipped from March to April that the sales that ended up closing in April, would you still be up in the month of April?.

Sitting here today based on what's projected to close, we would still be up in April. The comps are very hard at really every month of the quarter that we had a very strong months, April, May and June last year. Size wise April is the smallest, and then May, and then May and June are similar, but June usually the biggest.

So, percentage wise they're all going to be tough. Delta-wise it gets tougher as we move into the quarter..

Okay. Last and I'll pass it off. You saw some gross margin improvement in the quarter. I was just hoping you could speak to product margins, mixed factors that contributed. How you're thinking about that for the balance of the year? Thanks..

I made the comments that really on a brand-by-brand basis. Our products did pretty well. We've got a great line up of new model for manufacturers and there is good demand in the marketplace that we've been able incrementally make more gross margins..

We will go next to Joe Altobello with Raymond James..

Thanks. Hi, guys. Good morning..

Good morning, Joe..

First question, I just want to go back to incremental margins for this year. I mean obviously a little bit of a tough quarter here on that front.

But doesn't sound like you're expecting much in a way of improvement at least year-over-year in the back half? And I am curious, why not given the shift in revenue that you saw, plus the timing of investments which seem to have been earlier in the year..

We're really sticking consistent with our guidance. When we came out with our guidance for fiscal 2017, we had two back to back years of fiscal 2015 and 2016 with suboptimal leverage in the business, and yes, we're all working real hard to get leverage in the business.

But until we actually start seeing it, we're not going to take that into our results and into our guidance. So, again we just finished the March quarter with suboptimal leverage.

Although, we would have been better if we have got these deals, but they were in the corner, and so we are sticking with basically the back half leverage that we incurred in 2016 and 2015 combined which is about the same type of flow through and that's how we are coming up with our guidance range with $1.14 to $1.24.

Now obviously, we are all at the management team doing all we can to get more to the gross margin line, to get more from the investments that we make, and to improve the leverage, but until we see it, we're going to keep our guidance using the same philosophy that will start the year..

Okay. You also mentioned the marketing spend was up in the quarter.

Maybe you could just quantify how much it was up and what you're expecting the increase to be for the full year? And what does that say to serve the environment in terms of competition and promotion et cetera?.

I'll tell you, when we left the December quarter which was a great quarter, yeah we had some big unit that helped drive sales, but also just fundamentally units were good. We said let's get after the boat shows. So incrementally we spend a little bit more at just about every major show.

The dollar amounts over $1 million and $1.2 million or something like that. I feel very confident that on an annual basis when we get to the end of 2017, marketing as a percentage of revenue will come in line. And I say that, we've done this before over the time that we've been here and we've invested heavily in boat shows. We generate all the leads.

We generate all the deposits. We generate the backlog. And by the way the March quarter is the single biggest spend quarter, because all the boat shows been over the course of the summertime.

Marketing comes in line as a percentage of sales, which I think will be the same thing of what happened this year especially with our outlook for the back half of the year..

And June is all about getting customers out on water and doing demonstrations, and getting them into stores in much less about budget..

Just one last one if I could. You did mention that the second half in terms of comps, September quarter waited and you're obviously aware of that. You're lagging a pretty tough comparing the June quarter.

So would you expect comps to be up this quarter?.

That's always our goal. I can say that's always our goal, right. My cautionary language was, as you're modeling the business and thinking about expectations, I would wait it heavy towards September from an expectation perspective. Everybody in our stores and everybody at MarineMax is going to do all they can to drive a positive comp.

I would say, most retailers would say it's going to be negative following a 44% same-store sales growth, negative is not really in our DNA..

Okay. Great. Thank you, guys..

Thank you, Joe..

We'll go next to David MacGregor with Longbow Research..

Good morning. This is Brandon Rolle on for David MacGregor.

I was just want to ask you, what was your breakdown between new and used boats during the quarter? And to follow-up on that, could you also talk about used boat pricing trends that you're seeing?.

Yeah. The exact percentage I don't have in front of me Brandon, but we did a good used boat quarter as well, they've been slightly higher than new boat sales in the quarter.

As you probably know, the industry used boats are short supply and late model, so pricing is rising which is giving people a better ability to trade into a new boat, and so, margins from an industry perspective are improving on used boats..

I will comment, we've had a topic on these calls before about the amount of wholesale boats that we've taken entry that we then wholesale out to a third party right away which has due to margin. That's still elevated from historical levels.

It is incrementally coming down from where it was in 2015, 2016, but it's still elevated from historical leverage, which does pressure our consolidated use margins versus where we may have operated historically, but that's getting better and better with each month that goes on..

And little explanation on that is what we do for our customers as far as after the sale with events and noble service, and all the benefits that we offer them. It's hard to do that on a much older boat.

So we trace their owner, we typically will wholesale them because we really can't deliver the right experience to the customer with the agent product..

Right.

And just one more, could you also talk about the progress you're seen with Galeon Yachts and kind of that are I guess luxury, you got segment there?.

So, we'll remain very excited about the brand that is doing very well for us, the quality and warrantee is very low. They are high on the quality and very low on the warranty issue. So, customers are happy and we're pleased with the brand. It's a great addition to our portfolio..

We'll take our next question from Greg Gregory Badishkanian with Citi..

Hi, guys. This is actually Fred on for Greg. Just two quick follow-ups. I don't remember if you actually addressed the competitive and promotional environment in response to one of the earlier questions, and then just as you're thinking about the broader industry.

Where do you sort of see that shaking out for the year?.

I tell you it's a healthy environment. It is not a lot of deep discounting here and [indiscernible] so forth out there. It's a good time to be in the business that we're in.

I think from purely competitive perspective, I think we're seeing as you guys already know about more and more people from Europe where we're going to try to sell their products that typically is going to impact the largest product, but overall it's still a healthy environment in the industry..

Thanks..

Okay, got it. Thank you, Fred..

We'll take our next question from Michael Swartz with SunTrust..

Good morning, guys..

Good morning..

Good morning..

I just wanted to touch on the backlog commentary and understand you had a bit of revenue shift from March into the third fiscal quarter.

Could you maybe give us a sense of what the backlog stands that? I mean, if I look at consumer deposits they're up 30% plus and I know all the puts and takes to that that statistic, but should we think of backlog been up a similar amount?.

Our backlog has increased year-over-year even without the deal that shifted from March to April. The point is we talked a lot about our backlog because it's a trend indicator. And the fact the backlog is up which is somewhat being kind of through that our customer deposits is very, very good.

However, as we start any quarter, the amount of our backlog is usually a small fraction with the overall quarter. So, I think talking about the dollar level of it is that real meaningful.

I think what's more meaningful is the magnitude – it's up materially – it gives us very good feelings about the business, gives us good feelings about the June quarter..

At this point in time, we are feeling very good about April, so that's an indicator as well..

Correct..

Okay, great.

And then just, I think one of the points you touch on and one of the things in the quarter that elevated SG&A a bit was just – some of these acquisitions and maybe are modeling of them, but just understanding some of the seasonality there with Russo and Hall and understanding, if Russo now were calendarizing that transaction, but how we think about the seasonality from both the revenue and maybe a cost perspective with those two acquisition relative to the legacy business?.

A good point, I would say that 60% of the revenue comes from April through September and probably about 60% of their costs come from April through September as well, maybe not like that. In a quarter like March, a quarter like December, northern dealers would typically lose little bit of money.

In a quarter like March, they probably break even and so they really make all their money in the June quarter and these September quarter. I could tell you specifically from Hall, because that's new to everybody as you are modeling that.

Hall in the back half of the year is – I think we've disclosed is about a $50 million dealership, so if I just said 60%, so let say that is $30 million to $35 million of additive revenue coming in the back half of the year and that's probably going to be weighted 60-40 for the June quarter, so $30 million to $35 million, 60% in the June quarter, 40% in the September quarter something like that, would be probably in the ballpark..

So more of the leverage from the acquisition and I guess just one acquisition that hasn't been calendarized will be in the third quarter?.

That's correct..

Okay. Okay. That's all from me. Thanks guys..

Yeah. Thanks..

Our next question, we'll go to Steve Dyer with Craig-Hallum..

Good morning, it's Greg Palm on for Steve today. So, wanted to ask about the same store sales, you are coming off of back to back years of 20% plus, you are guiding 13% to 16% you know this year.

I guess the question is, how sustainable is this sort of level? I mean, you are outperforming industry sales by obviously a pretty wide margin, so would be interested in getting your thoughts there?.

I can comment again because we have history on side. If you go back you know to the formation of the company back in 1998, I mean we had a long track record of double digit same-store sales growth which was definitely up outperforming the industry.

If the industry is projected to be a 5% to 6% unit grower, we're going to grow more than that in units for sure, because of our strategies, our team our products, our markets, all of that stuff.

So, le say you get up into the high single digit, you put some ADP on there, right away you are getting into the low teens and given our track record already to-date, its' going to be harder not be in the 13% to 16% range on an annual basis.

So, we've consistently shown that we can do and outperform the industry and we are continuing to do that right now..

And you know for the March quarter specifically, you know doesn't even seem like ASPs contributed that much I mean slow outperform by pretty wide margin.

Can you sort of bucket the various factors, what's most important?.

I'll tell you, as we talked about the marketing spend, I'll say a chunk of it was probably our success with the boat shows, which is why we feel the spend has benefited us, now but also into the futures, great product coming from our manufacturing partners, outstanding high performing team, I mean all of the above really..

And you know our inventory turns are looking real good, so we feel comfortable about our inventory and Mike mentioned the new products and you know new sales and so we're getting it from almost all of our manufacturers and that's contributing to give the customers a reason to jump in.

In speaking with many of our store managers and in fact most of our store managers and regional presidents, they are feeling good about the consumer right now and their desire to make a purchase in the future. So, we put all that together and we're going to continue to outperform the market as far as gains and that means market share..

As it relates to inventory, any comment there specifically as it relates to your availability of some of the newer models?.

We feel very comfortable with the inventory level and the mix, the aging is inline, in fact improved and so everything is very positive. We see our self at a competitive advantage by having some of the inventory especially the larger products and as such, you know when people are hot, they are hot and when they want it, they want it now.

And so, we have that product and it's fresh and new in many, many cases..

Last one on gross margin. It was the best quarterly amount in quite some time. So, I guess the question is, is this a good level going forward, and I think historically that's kind of 25% to 26% and it's been high end of the range.

Is that still the case or is there little room there to maybe improve beyond that?.

So, I'll go back to our guidance comment or guidance does not have gross margin improvement baked into it for the back half. It's similar to – I refer to fiscal 2015 and 2016 kind of combined.

We certainly think there is opportunities for gross margins to head north in the current environment with the product that we have with our manufacturers, the aging inventory all of that, but until we again have more than an quarter like March, we had to have several back to back quarter then we can start talking about putting the – our guidance higher to reflect that.

But there is certainly is opportunity which is what your question was of margins have the ability to go higher..

Sounds good. Thanks for the color. Appreciate it. .

We'll take our last question from Seth Woolf with Northcoast Research..

Thanks guys. Appreciate you sneaking me in here at the end again. Just want to follow-up on the answer you gave to Jimmy about the first four weeks of April. I think you said it was still positive. So, just think about the normal seasonality within the June quarter.

Would that not imply that those sales you expect to shift from March into April, your comps are running up, mid – low double digits at the very lease maybe even into the mid-teens? Do you….

We always get a careful one and sometimes – we always got to be careful about how much you save current trends sitting here today. Sitting here today, we feel very, very good about the June quarter..

Thank you Mike, you saved me. .

The math that you are doing and what you are saying is mathematically, I understand – I'm noticing how you are getting there, but the point that I'll remind everybody on the call is we got a lot of boats to sell, lot of business to create in the next two months and one week, whatever is left of April.

So, we got a lot to – lot of deals to close, lot of revenue to book, lot of margins to create and so forth..

We have one more come in. We'll take our next question from James Hardiman with Wedbush Securities..

Thanks for taking my follow-up and I don't think you've answered this. If you have, I apologize. But I just wanted to make sure, we're all in the same page in terms of what happened between revenues and cost in March quarter versus the outlook.

The quarter was worse on the top-line, the quarter was worse than you expect and yet for the year, your guidance is going up and I get the timing of why the first quarter was worse than expected, but what are you seeing that gives you confidence to say that your revenue outlook is going to be even better than it was three months ago?.

Our performance to-date is better than it was three months ago. We're 20% same-store sales growth grew six month. When the year started, we were – we were 10% plus or minus was our first guidance. And second guidance after December was 10% to 11% or 20% for the six months.

Because of the 13 week, this quarter was higher than where the street had modeled, that's talking about the street. We had anticipated to be even higher and that's our anticipation grew to the quarter. And so based on boat show traffic, a reduction was set, which hit the record as Bill said including the West Palm Beach Boat Show.

Based on the boat show traffic, our boat show sales, our contracts written, our customer deposits, our backlog, trends today, April trends, Seth just mentioned, and it's almost – you almost have a significant decline in the back half of the year to not increase your same store sales guidance for the full year in May..

So, although you expected that, it was too early to bake it in to your guidance, is that right? Basically, if you hit your expectations, you expected that you….

Yeah, but we gave our guidance last. We were feeling better, but we had not gone into the Miami Boat Show which is a massive show and some of the other big shows. I think were about to enter into New York, as an example, which ended up being a modern era record show.

So, a lot of those big shows were close to our guidance and the level of sales in the level of activity following that. It's been fairly strong, especially running units which fundamentally is what tells you the industry is doing well..

Okay.

And then secondly, is the increased same-store sales number dependent on the increase investment spend? I guess I am trying to figure out if the earnings impact is neutral, why is it necessarily worth it to ramp up your costs? And maybe the answer is that you're sizing your business for potential even more upside to revenues, but how should I think about all that?.

You just answered..

Yes..

We believe that we're looking at a – we've already delivered. We've already grown the business quite substantially. We believe we needed their technicians and sales team members, other folks into the organization to capture as much market share, and given the demand that's out there..

Excellent. Thanks.

Thank you..

That concludes today's question-and-answer session. At this time, I'll turn the conference back to Mr. McGill for any closing remarks..

Thank you, operator. You've all heard me say that, it's all about the people and in our business it's relationships selling. So therefore, having the right people in place is absolutely essential. So 25 years ago, I made a hiring decision, brought someone in our company that's now our Chief Revenue Officer, Chuck Cashman.

So, I'd like to thank Chuck for his 25 incredible years and what he is doing to drive revenues in our company and marketing, and so doing a super job. And in closing, I'd like to thank all of you for your continued support and interest in MarineMax. Mike and I are available day if you have any additional questions. Thank you..

This does conclude today's conference. Thank you for your participation. You may now disconnect..