Southern Q4 2023 Earnings Call Transcript

Quartr
Provided by Quartr
October 26, 2023

There are 11 speakers on the call.

Operator

Good morning, and welcome to the MarineMax, Inc. Fiscal 2023 4th Quarter and Full Year Conference Call. Today's call is being recorded. At this time, I would like to turn the call over to Scott Solomon of the company's Investor Relations firm, Sharon Merrill, please go ahead, sir.

Speaker 1

Good morning and thank you for joining us. Hosting today's call are Brett McGill, MarineMax's President and Chief Executive Officer and Mike McLamb, the company's Chief Financial Officer. Brett will begin the call by discussing MarineMax's operating highlights, Mike will review the financial results, and then management will be happy to take your questions. The earnings release and supplemental presentation can be found at investor. Marinemax.com.

Speaker 1

With that, I'll turn the call over to Mike.

Speaker 2

Thank you, Scott. Good morning, everyone, and thank you for joining this call. I'd like to start by reminding you that certain of our comments Our forward looking statements as defined by the Private Securities Litigation Reform Act of 1995. Any forward looking statements speak only as of today. These statements involve risks and uncertainties that could cause actual results to differ materially from expectations.

Speaker 2

These risks include, but are not limited to, the impact of seasonality and weather, global 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 Form 10 ks and other filings with the Securities and Exchange Commission. Also on today's call, we will make comments referring to non GAAP financial measures. We believe that the inclusion of these financial measures helps investors gain a meaningful understanding of the changes in the company's core operating results. These metrics can also help investors who wish to make comparisons between MarineMax and other companies on both a GAAP and a non GAAP basis. A reconciliation of non GAAP financial measures to the most directly comparable GAAP measures is available in today's earnings release.

Speaker 2

With that, let me turn the call over to Brett.

Speaker 3

Fred? Thank you, Mike. Good morning, everyone, and thank you for joining us. I want to begin by thanking the Haier MarineMax team, whose outstanding customer service contributed to strong top line growth in fiscal 2023. As evidenced by our record 4th quarter and full year revenue, demand for the boating lifestyle remains strong.

Speaker 3

From our 81 retail locations to our manufacturing facilities, marinas and superyacht operations worldwide, Our team is focused on one mission, to provide the world's best pleasure boating experience. Through strategic acquisitions, we are broadening our presence Well beyond retail dealerships to higher margin segments of the industry that encompasses all aspects of the boat ownership lifecycle and enables us to build deep customer relationships. Today, Mike and I are speaking to you from the Fort Lauderdale International Boat Show. We're here representing all of our premium product lines as well as large displays for Fraser Yachts, Northrop and Johnson and IGY Marinas. We anticipate robust attendance and we are particularly excited about the demand we continue to see in the premium segment, one of the critical drivers of our long term growth strategy.

Speaker 3

Turning to our 4th quarter performance, we saw continued momentum from our strategic marketing and customer engagement initiatives, which drove an 8% increase in same store sales. New and used boat sales were up in dollars and units with the premium categories again performing well. However, we also saw better strength in categories that were lagging earlier in the year like pontoons and towboats. Solid revenue gains in our higher margin businesses like Service and Finance and Insurance contributed to the same store sales increase. IGY Marinas, which we acquired last October, contributed meaningfully to our revenue growth for the quarter and full year.

Speaker 3

From a cadence perspective, as we noted on our July call, the quarter started strong and generally stayed active through the entire quarter with a strong close to September. Although our full year adjusted EPS and adjusted EBITDA were in line with our most recent guidance, There's some additional work we need to do. We are looking specifically at SG and A expenses to evaluate more fully 2, we have to reduce costs in areas that do not impact the customer experience. Clearly, inflation has affected operating costs, But we believe cost synergies do exist and we will work to offset some of that inflation going forward. Given rising inventory levels across the industry and a return to seasonality, we had anticipated some retail margin erosion in the quarter.

Speaker 3

However, we were pleased to see gross margins remain in the mid-30s. Plus for the full year, our gross margins are flat at about 35%. That speaks to our businesses' increasing diversification and resilience across market cycles as well as our strategy of adding higher margin businesses. Sophisticated data and analytics are adding more precision to our marketing initiatives. For example, we are using intelligent customer and inventory tools to monitor demand in real time.

Speaker 3

These tools enable us to drive marketing demand and Inventory alignment. Our expanded strategic marketing capabilities are clearly driving improved retail results and driving market share growth. We're also gaining momentum with NewWave innovation. More and more marine dealerships are registering to use boatzymes.com, Our digital retailing marine platform. In much the same way technology has streamlined the process of buying a car, Bozan is simplifying the customer experience of purchasing a boat.

Speaker 3

While still in the start up phase, we expect a bright future for Bozan. Turning to other recent highlights. This month, Fraser Yachts completed the previously announced very strategic acquisition of Ad Atlanta Golden Yachts or AGY. Based in Athens, AGY is one of Greece's leading charter management companies. The addition of AGY is consistent with our strategy of adding high quality businesses that enhance our margin profile.

Speaker 3

AGY complements and greatly expands our Superyacht Services business in Greece, a major charter destination and home to one of the largest superyacht fleets in the world. Our M and A pipeline remains active and we continue to evaluate A number of investors have asked us about the near term industry outlook in light of the current economic environment. From a macro perspective, we are approaching fiscal 2024 with appropriate caution, but are encouraged by how 2023 ended. Nonetheless, we realized much uncertainty faces the world. That said, we continue to focus on the areas within our control by reviewing expenses, deploying our capital wisely and capturing revenue synergies.

Speaker 3

As we look ahead to 2024, we are excited to build upon this foundation and deliver on our commitment to providing unparalleled boating and yachting experiences to a growing number of customers worldwide. With that update, let me turn the call over to Mike for a financial recap. Mike?

Speaker 2

Thank you, Brett. I also want to thank our team for their efforts, which produced a strong Q4 and record revenue in fiscal 2023. In the quarter, we grew revenue 11% to $595,000,000 driven by an 8% increase in same store sales. The same store improvement was driven roughly fifty-fifty by units and average unit selling price growth. Consistent with our commentary all year, our Premium brands continue to outshine any price point categories.

Speaker 2

However, as Brett noted, we did see Additional strength this quarter from traditional seasonal boats like pontoons and towboats, 2 categories that lagged earlier in the year. Geographically, we saw positive trends in most markets with particular strength in Florida and the Midwest. Gross profit of $204,000,000 was up $7,000,000 from last year, while gross margin was down year over year to 34.3%. As expected, product margins moderated as inventory levels in the industry have increased. Generally, product margins approached Pre pandemic levels, while our consolidated margins remain in the mid-30s.

Speaker 2

As Brett said, the Strength of our consolidated margins is a testament to our strategy of adding higher margin businesses. SG and A expenses were up 16% to $169,000,000 well over half the dollar increase was from the IGY, Midcoast, Boatson and C&C Acquisitions we completed this year. However, we did see increases from Various categories such as health insurance, property insurance, inventory maintenance and marketing to name a few. Clearly, some of the costs drove top line growth, but as Brett mentioned, we are exploring various opportunities to improve synergies internally as well as areas for cost savings while not impacting the experience of the customer. Interest expense increased by $14,800,000 reflecting rising interest rates, increased inventory and higher long term debt associated with IGY.

Speaker 2

Given the increase in rates floorplan interest was incrementally higher than we expected. On the bottom line, We generated GAAP net income of more than $15,000,000 or $0.67 per diluted share compared with net income of $38,400,000 or $1.73 per diluted share last year. Our adjusted EBITDA for the quarter was $43,000,000 compared with $68,000,000 last year, primarily due to lower net income and higher floor plan interest expense, which accounted for nearly $8,000,000 of the difference. For the full year, GAAP net income was $109,000,000 or $4.87 per diluted share, and we generated adjusted net income of $117,000,000 or $5.21 per diluted share in line with our guidance. Our full year adjusted EBITDA was in line with guidance at $239,000,000 compared with $310,000,000 last year with floorplan interest expense accounting for roughly $25,000,000 of the difference.

Speaker 2

Our balance sheet remains healthy as we ended the year with more than $200,000,000 in cash. Inventories at year end increased $813,000,000 which as expected was up sequentially from June. On a same store basis, unit inventories are in the neighborhood of down a little over 30% compared with September 2019 levels. Looking at liabilities, our short term borrowings, which is our floor plan financing, rose largely due to increased inventories and the timing of payments. As expected, customer deposits declined sequentially from June to $82,000,000 reflecting our ability to better meet demand as inventory becomes available.

Speaker 2

Our liquidity position remains strong. At year end, debt to EBITDA net of cash was less than 1. We have additional liquidity in the form of unlevered inventory plus available lines of credit that totaled approximately 200,000,000 Turning to guidance, I will comment first on our thoughts regarding the industry unit trends for our fiscal year 2024. For many months of the upcoming year, the year over year unit trends are relatively easy comparisons in terms of the industry's ability to post either unit growth or a minimal decline. Assuming no significant economic downturn, but also no major improvements, We believe the industry will be flattish to up slightly in our fiscal year.

Speaker 2

We also believe that the premium end will continue to outperform price point segments. We expect the industry to be back in full seasonal mode for all of fiscal 2024. This means the December quarter will be by far the smallest quarter of the year followed by seasonally stronger quarters through the selling season. We also expect inventory to modestly build seasonally as it has historically. Based on our industry unit expectations, We expect low to mid single digit same store sales growth in 2024.

Speaker 2

At the same time, we do expect product margins to moderate as we continue to reap the long term benefits of the higher margin strategy we have successfully executed. It It's also worth noting that in the December 2022 March 23 quarters, we had lower interest costs driven by lower rates and lower inventory than we will have in the same quarters this fiscal year. Factoring all this in, we expect our adjusted net income per share to be in the range of $4.50 to $5 per diluted share for fiscal 2024 with adjusted EBITDA to be in the range of $225,000,000 to 250,000,000 Higher depreciation and stock based compensation as well as additional shares in the denominator adversely impacts EPS versus adjusted EBITDA. We are using an expected tax rate of approximately 27% and a share count of 23,100,000 shares in our assumptions. Looking at current trends, October last year was aided by boats that pushed from September due to Hurricane Ian.

Speaker 2

This year October currently looks to be flattish to that strong comparison as people continue to seek the boating lifestyle. With that, I'll turn the call back over to Brett for closing comments. Brett?

Speaker 3

Thanks, Mike. Despite a challenging market environment, we executed well in fiscal 2023, delivering record revenue and strong gross margins. While the retail boating industry continues to see a return to historical seasonality, our diversified revenue stream and our position in the premium segment of the retail market creates a sustainable competitive advantage for MarineMax. Our strategic initiatives over the past several years continues to improve our long term margin profile and generate new growth opportunities. MarineMax is a diversified global marine company providing an international customer base with the products, services and experiences to enrich their journey on the water.

Speaker 3

We remain committed to maintaining MarineMax's financial strength and building long term shareholder value by pursuing opportunities to drive profitable growth. And with that, operator, let's open up the call for questions.

Operator

Ladies and gentlemen, we will now be conducting a question and answer Ladies and gentlemen, in the interest of time, please limit yourself Our first question comes from James Hardiman with Citi. Please go ahead.

Speaker 4

Hey, good morning. Thanks for taking my call. So Mike, You talked about the comparisons. Maybe walk us through, it seems like maybe, the December quarter should It should see maybe the best growth of the year, maybe that's it's easiest to predict because it's most current. But That full year low to mid single digit same store sales, how do you think about that progression over the course of the year?

Speaker 5

Yes. Great question, James. The yes, for sure, from an industry perspective, the December quarter does appear to be the easiest comparison with the Unit declines on a year over year basis. But even if you go all the way into January, February, March, April and even In May, the comparisons are relatively easy. Then they're mixed when you go through the rest of our fiscal year, June, July, August September.

Speaker 5

As I said on the call, it sure seems like absent a recession, many of those months have the ability to post positive unit gains. And Historically, if the industry has unit growth, we traditionally outperformed the industry. And then you get a migration of Average unit selling price, which is kind of the basis of our same store sales growth for 2024.

Speaker 4

Got it. That's helpful. And then on the inventory question,

Speaker 6

I think you touched

Speaker 4

on a little bit of this in the prepared remarks, but can you just bridge Last year's inventory number and this year's inventory number, specifically as we think about sort of acquired inventory, but then also units versus dollars. And as we think about how you're thinking about ordering patterns and inventory going forward, Are we at a place where you would generally think about a unit in and a unit out, right, wholesale equaling retail? Or do you anticipate lowering inventories on a like for like basis or building inventories on a like for like basis?

Speaker 5

So let me try to take all those questions if I can remember. On a year over year basis, there really isn't a whole lot of acquired In terms of acquisitions, the CNC acquisition was a smaller one, so there's some from that. A little bit, I guess, from In terms of the balance sheet inventory from IGY that has fuel and stuff like that, but the bulk of the growth is Building of inventories from last year, which was a relatively low level skewed by dollar growth, quite So as I said, the units on a same store basis are still down 30% from 2019 levels. It's probably not surprising that we have some categories in some areas that are think that we have some categories in some areas that are heavier in inventory than we necessarily need. You've seen what's gone on in the industry with pontoons and tows.

Speaker 5

Towboats, we're working very closely with all of our manufacturers in those categories and they're all very receptive to the dialogue about Products that we need and how we're trying to get inventories in line. But likewise, there's categories where we're still pretty far below and where we need And some of the real premium larger center console outboards and even some of the larger product that we sell. So it's an interesting time right now as the industry is Rebuilding to some level of healthy inventory, all the dealers are trying to stay at a very healthy inventory. Actually, I think all the manufacturers are Recognizing that it's important to stay at that level too. So while we'll probably have some seasonal build, I think we'll be In a pretty good place overall from a unit inventory perspective as we go through 2024.

Speaker 4

Got it. So your base case is effectively Wholesale equals retail from a unit perspective over the next year?

Speaker 5

I actually think in some categories, it's probably not the case where we need product, but certainly not to speak out of both sides of my mouth, there's other categories where, yes, we need to retail more than we're bringing in, in time periods. And some of the categories have been softer during the year.

Speaker 4

Got it. That's helpful. Appreciate it.

Speaker 5

Thanks, James.

Operator

Thank you. Our next question comes from Drew Fromm with Stifel. Please go ahead.

Speaker 6

Okay, thanks. Hey guys, good morning. So on your fiscal 'twenty four guidance, just at a high level, can you comment on what type of macroeconomic outlook you're assuming? In other words, does your forecast embed a recession scenario or any other incremental macro headwinds? And then I have a follow-up.

Speaker 5

No, Drew, that's actually a good question. We're not embedding a recession in our forecast. We commented that Generally, status quo and what we've been experiencing over the last couple of quarters on a go forward basis, we You look at how we ended fiscal 2024, which was a real strong close to the year, and we were up against pretty tough comparisons in the September quarter last year, we had 11% same store sales growth and we posted 8% same store sales growth this quarter. So it's clear The number of people that are still seeking the boating lifestyle is fairly active out there through our Q4.

Speaker 6

Got it. Okay. And then just maybe a housekeeping item. Can you tell us where maintenance, repair, storage and P and A revenue ended up for the quarter and the year. And on a related note, as you think about adjusted gross margin and its impact On fiscal 2024, do you see this line sustaining in the mid-30s range?

Speaker 6

Or is it reasonable to assume that it slips a little bit Year on year. Thanks.

Speaker 5

Yes. Good questions. Yes. So on a revenue mix perspective, so new and used boat sales were Around 75% of our mix for Q4, but for the full year they're down to around 72%. So The higher margin businesses actually have grown as we expected they would to around 28% for all of fiscal 2023.

Speaker 5

And then on your last point about margins, I did not comment as to what do we really think margins are going to do for 2024, but we do think product margins On the full year basis, we'll moderate some as they did in the 4th quarter, The year that the quarter we just ended, but we think overall we'd still say consolidated margins are going to be in that mid-thirty range. I realize mid is a range of numbers, but we'll be in the mid-thirty range for 2024. We do expect Growth in finance and insurance, service, other higher margin categories that we have Within our numbers, which is traditionally what's happened over time.

Speaker 6

Yes. Okay. Very helpful. Thanks, guys.

Speaker 5

Thanks, Bill.

Operator

Thank you. Our next question comes from Joe Altobello with Raymond James. Please go ahead.

Speaker 1

Hey guys, good morning. Appreciate the question. I guess first, I want to follow-up Mike on your commentary there regarding margins. With respect to promotional activity, where do we stand today versus 2019? It may seem like things heat up quite a bit during the summer.

Speaker 1

So would you expect that to continue? Or has your premium categories been a little bit more immune to some of those promotional pressures?

Speaker 5

I would comment that the promotional activity seems to be back in the industry at reasonable levels, Probably still not quite as aggressive overall. There are some categories that are certainly back to historic times. But I'd say in general, promotional activities have Been back now for sure the last two quarters, starting maybe in the March quarter. Mike, go ahead. A As well, because you're introducing new products and new innovations that's really helped as well.

Speaker 1

Got it. And maybe just to follow-up on that. In terms of the credit environment, are you seeing lenders getting a little more cautious with respect consumer loans? And have you seen the percentage of cash buyers in your business tick up at all?

Speaker 5

Good question, Joe. We get that several times a year. And really, the way the banks look at the creditworthiness of the buyers Really hasn't changed. Obviously, the rate environment has changed. There was a period in this year where we certainly saw The percentage of cash buyers ticking up, but really the last couple of quarters, it seems like I know the public maybe is getting a little they don't like the rates, but a little more accustomed to the rates perhaps.

Speaker 5

And the percentage of Buyers is receding still a little higher than it would have otherwise been, but receding.

Speaker 1

Got it. Thank you.

Speaker 5

Thank you.

Operator

Thank you. Our next question comes from Brandon Rolla with D. A. Davidson. Please go ahead.

Speaker 2

Good morning. Thank you for taking my question. Just a quick one on your higher margin businesses. Could you talk about your outlook

Speaker 5

So generally when you have relatively lower same store sales growth, which is what our forecast is, it gives those higher margin Business has a chance to catch up quite frankly. And over the last 3 or 4 years, we've had some pretty good same store sales growth in different periods Where the base of the revenue got to a certain level because other businesses have been trying to catch up and when you have back to back years like 2023 2024 With relatively low same store sales growth, finance and insurance, service, brokerage, other portions Our store operations that are in the higher margin businesses have a chance to catch up, not to mention the ability of Northrop and Johnson and Frasier and IG Wire and the other businesses we own too also continue to grow in 2024. Demand in the service side of the business Seems really strong still, a lot of people, parts and accessories. And then Marina revenue and Marina slips at all of our locations, It's hard to find a flip and rates are holding strong.

Speaker 2

Great. And just one follow-up. You guys are reporting from the Fort Lauderdale Show. Any early takeaways from what you've seen in terms of demand? I know it just started yesterday, but any early takeaways?

Speaker 2

Thank you.

Speaker 5

Great traffic at the show for a 1st day. A little breeze helped the weather, so that's good. But yes, generally seems good. That very first It's always hard to get a good full read until you get deep into the weekend. But generally, I think it's a good feel of the show.

Speaker 4

Great. Thank you. Thanks, Brandon.

Operator

Thank you. Our next question comes from Eric Wold with B. Riley Securities. Please go ahead.

Speaker 7

Thanks. Good morning. Just a couple of questions. I guess, one, you talked about your M and A pipeline being robust. Maybe talk about Where you're seeing opportunities, obviously, we're not getting specific, kind of what areas you're looking at?

Speaker 7

What is the competitive environment for those acquisitions? I know it's getting It's increased recently, but what are you seeing just a competitive wise when you're looking at targets and maybe who else is involved there? Is there a lot of other parties you intend to still be the

Speaker 5

I can start off and make a comment. I mean, the types of companies that we're looking at are Consistent really with what we've looked at in the past. To a degree, there's dealerships. We're really focused on higher margin dealerships though, which would be those with a Storage component, good management, good brands, all of that. And so we're still in discussions with dealerships.

Speaker 5

We still are looking at the superyacht services sector. We acquired AGY to begin this fiscal year, which is a great This is to help grow our overall business in Greece, marinas in the U. S. And also internationally, Where they make sense and where they have a reasonable return from a for a company like us. And just other businesses that are Involved in marine to have a higher margin profile with a good team and a good strategy that makes sense to kind of bring into our family.

Speaker 7

And the competitive environment for those?

Speaker 5

Obviously, when you're talking about marinas, there's A lot of people around the world that are attracted to marinas with the dealerships that we're looking at in terms of the premium end and The relationships usually is not a very competitive environment. It's usually we've known the folks for a long, long time. And this is the case that it's always been this way. And same with some of the other businesses where we've developed a reputation as a good place to for A team and a company to belong and to become a part of whereas in some of these acquisitions where We're talking to companies. There's not a crowded field of people that we're talking to that are also talking to them.

Speaker 7

Dan, follow-up question. Obviously, you noted a lot of pressure from higher interest rates and interest costs in the floor plan. If you think back to kind of where you were a couple of years ago, in the midst of pandemic, you actually got Do you use your cash balance to take floorplan financing basically down or floorplan balance basically down to 0? You're sitting on a healthy cash Sounds now you have been for the last few quarters $200,000,000 What's the kind of the appropriate level of cash to keep on hand relative to what you want to have Leverage your floor plan on the inventory side?

Speaker 5

Good question, Eric. I mean, obviously, you can imagine, I mean, we're a net debtor And actually we have been for most of our 26 years that we've been public. And as a net debtor, throughout the quarters, this is not a surprise probably to anybody on the phone, Our cash is 0. We paid down our floor plan and save all the interest on that. And then at quarter end, like every other company does, We had to cash the balance sheet, so everybody realizes we have a lot of liquidity, which we do.

Speaker 5

But we're paying down debt every single day all the time except for right at quarter And so we're taking advantage of the cash that we've generated.

Speaker 7

Got it. Helpful. Thanks, Mike.

Speaker 4

Thank you, Eric.

Operator

Thank you. Our next question comes from the line of Michael Swartz with Truist Securities. Please go ahead.

Speaker 8

Hey, guys. Good morning. This is Lucas on for Mike. Could you talk a little bit about the your expected cadence of average selling price in fiscal 2024?

Speaker 5

Yes. In 2024, we overall in the guidance, we commented that we expect the industry to have, Call it modest unit growth, flattish to slight unit growth, and we would have low single digit to maybe as much as mid single digit same store sales growth. You can assume that The same store sales growth is roughly fifty-fifty between maybe units and AUP or could lean more towards AUP. We've had Nice AUP growth for a number of years. And with the new models that Brett talked about and with what our manufacturing Side and a more premium side, which does drive the AUP higher over time.

Speaker 8

Okay, perfect. And then, just you also commented on driving savings in SG and A. Any additional color share there maybe some quantification or where it's coming from? That's all I had. Thank you.

Speaker 5

No. The commentary in the script are we're Digging in and analyzing opportunities for savings. We I will comment we did have in the quarter a handful of categories that increased Slightly. 1 was up more than slightly. That was health care insurance, just a number of unfortunate claims that hit our stop loss Maximums, but we're digging into things and trying to see where we can get some synergies in the organization and also some potential cost savings, but we don't have any answer today.

Speaker 8

Okay. Thank you. That's all I had.

Speaker 5

Thank you.

Operator

Thank you. Our next question comes from the line of John Healy with Northcoast Research. Please go ahead.

Speaker 9

Thanks for taking my question guys and congrats on the strong close of the year. Just one question for me, just on the SG and A side. I think you mentioned during the prepared remarks that were looking at some opportunities there to improve the customer experience, but you're looking at SG and A opportunities outside of things that would impact the customer experience. Is there a way you can maybe texturalize that a bit for us, kind of maybe what some of the bigger opportunities are there? How much runway there is on that?

Speaker 9

And Is it more in the traditional business or is it more on the Marina side and some of these kind of adjacencies that you've extended to recently?

Speaker 5

Yes, I'll comment first just at a high level. There's clearly an opportunity with our super yacht IGY in that segment to create more synergy, which does cost saving synergies in a lot of case, which we're Digging into aggressively right now. And then just from the day to day operations of all of our stores that have been around a long time, there's always things to dig into. But there is inflation in all of that, which is some of that can be mitigated and some can't. Mike, you want That was good.

Speaker 5

We don't have all the answers today, but generally, where Brett just said is what we're looking into.

Speaker 10

Great. Thank you.

Operator

Thank you. Our next question comes from the line of David MacGregor with Longbow Research. Please go ahead.

Speaker 10

Good morning. This Joe Nolan on for David. I just have one quick one for you guys. Just wondering about the used boat market. Just wondering what you guys are seeing in terms of values and in terms of demand there?

Speaker 5

Yes. Used boat markets Strong holding up well. We don't see any significant wild action on price changes. Pricing is holding up well in the marketplace. New boats are higher and higher in prices, so that helps.

Speaker 5

So it's been a good part Our business and continue to focus on it.

Speaker 10

And any notable trends within mix within the Usbo market?

Speaker 5

No, not that I can call out. For us, our used boats are just trades that we're taking, we don't speculatively buy a ton of used boats. And there was a time period over the last couple of years where there just wasn't a whole lot of people trading boats in and it's nice that we're getting some additional trades down. We expect that business is going to be sort of back to historical performance levels going forward.

Speaker 10

Got it. All right. That's all for me. Thanks.

Speaker 5

Thank you.

Operator

Thank you. As there are no further questions, I would now hand the conference over to Mr. Brett McGill for closing comments.

Speaker 5

Well, thank you, everybody, for joining us today, and we'll update you on our next call. And if you're in the Lauderdale area, please come on down to the show and take a look at some of the great products

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