Good day, ladies and gentlemen. Welcome to the MarineMax Incorporated second quarter fiscal 2010 earnings conference call. One note that today's call is being recorded. At this time for opening remarks and introductions, I would like to turn the conference over to Kate Messmer with ICR. Please go ahead.

Thank you, Operator. Good morning everyone and thank you for joining this discussion of MarineMax's 2010 fiscal second quarter results. I'm sure that you've 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 fax or e-mail one to you. I would now like to introduce the management team of MarineMax, Bill McGill, Chairman, President and CEO and Mike McLamb, CFO of the company. Management will make some comments and then will be available for your questions. Mike?

Thank you, Kate. Good morning everyone and thank you for joining this call. Before I turn the call over to Bill, I would 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 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. The results of our team’s efforts over the past year to substantially reduce our inventory levels and improve its aging, rationalize our store count, reduce our overall expense structure, were all evident in our March quarter as our net loss and balance sheet improved significantly compared to the prior year. From a top line standpoint, we were hoping to continue our first quarter trend of positive same-store sales. While we do believe we took additional market share we did face the challenges of unfavorable weather in many of our markets that dampened our results, as well as the continued softness in the overall industry demand. As you may have seen, some industry sources indicate that unit sales were down in the 20% range for January and February. While our boat shows were generally encouraging during that time, the data suggest that the marine industry recovery is likely to be gradual. From a positive standpoint, we've been able to produce more consistent gross margins now that our inventory levels and those of the industry have come down substantially. In that regard, the industry is in much better shape than a year ago. Inventory aging has dramatically improved and a good portion of our sales were from more current products which carry higher gross margins. Thus for each incremental sale, we are generating more gross profit dollars than we were in prior quarters when we had to sacrifice our margins to drive revenue as we reduced inventory. Even with our same-store sales under pressure, we were able to further reduce our inventory levels in the March quarter when compared to the December quarter and the prior year. Normally as we prepare for the summer selling season inventory builds in the March quarter, but our efforts…

Thank you Bill, and good morning, again, everyone. For the three months ended March 31, 2010, our revenue was $110 million, down from approximately $130 million in the prior year. Our same-store sales declined approximately 5% compared with a 41% decrease in the same quarter last year. Revenue from store closures that are no longer eligible for inclusion in the same-store sales base was about $13 million. Gross profit as a percentage of revenue increased to approximately 22% in the quarter from 15.2% in the prior-year quarter. As a result, as Bill touched upon, we were able to generate a large increase gross profit dollars during the quarter despite our revenue declining by 15%. With the substantial progress we made reducing our inventory and improving its aging, we believe our margins have the potential to continue improving as we move to the seasonally higher volume months from April through September. Our selling, general and administrative expenses decreased approximately 18.5% or $6.7 million during the quarter as the initiatives we have implemented to reduce our cost structure allowed us to leverage expenses even on a decline in sales. As a percentage of revenue, SG&A expenses declined by approximately 115 basis points compared to the prior year. We have two quarters behind us each with SG&A below the $30 million range, which is a substantial expense run rate reduction from our 2009 level. Interest expense decreased approximately 72% to $1.1 million as a result of reduction in our average borrowings on our line of credit due to the inventory reductions. Regarding income taxes, we did not recognize a meaningful tax benefit in the quarter as we have already carried back our losses as far as permitted by current tax law. You should not be modeling a meaningful tax benefit or expense until…

Thank you, Mike. Today we are a much more significant player in the boating industry than we were prior to the recession. Overall, we are controlling our inventory levels and expenses and operating more efficiently as a company than we did in the past. We have also significantly strengthened our balance sheet, which Mike talked about in detail, which provides us with a competitive advantage that will allow us to capitalize on growth opportunities as they arise. We are reviewing opportunities as we speak, including non-competitive brand expansions, and will continue to seek opportunities which make sense for the near and long-term. Many boat retailers have failed as a result of this economic condition that we are in, which has and will only continue to improve our competitive position, especially after distressed inventory has worked its way through the system. While it may be a long road to a full recovery, we remain convinced that as our industry conditions rebound we will start to see sales from the pent-up demand from those customers who have either delayed their purchase or the next boat to be purchased by a potential customer. Our customers remain passionate about the boating lifestyle and MarineMax is well positioned to serve their boating needs with our superior customer service and access to capital. We are encouraged by our increasing store traffic and other customers’ excitement to be involved in our getaway events with their families. Our team and customers had not lost their passion and enthusiasm for the MarineMax lifestyle of boating and we will continue to teach them, service them and show them how to have fun with their families. And with that operator we will open the call up for questions.

(Operator instructions) And we will go first to Hayley Wolff with Rochdale Securities. Hayley Wolff – Rochdale Securities: Hello?

Hi, Hayley.

Good morning, Hayley Hayley Wolff – Rochdale Securities: First, you talked about Florida being up in the quarter and what percent of your sales is that in the second quarter?

Annually, Hayley, Florida is normally 40. I mean to say – Hayley Wolff – Rochdale Securities: I thought that’s 15, okay.

So normally, annually it's around 40, a little bit over 40. In the March quarter, it would be greater than that. It may be approaching 50 in the March quarter. Hayley Wolff – Rochdale Securities: So then what areas were disproportionately down to offset further?

I can add. Florida was up slightly as Bill mentioned. It was up – the Northeast was up; most of the regions were down. No one was down significant. But everybody was down slightly enough to take the whole company down 5%, even with Florida and the Northeast being up. Hayley Wolff – Rochdale Securities: And in the third quarter, does anything change in the geographic distribution that gives you more optimism? I assume it's more Northeast weighted.

It's more out of the Sun Belt weighted. All of other markets do much more business during the June quarter. And I think as all those customers come out of the wintertime obviously everybody is hopeful and optimistic that they're going to return to boating and purchase their new boat or trade up into another boat.

In previous years, Hayley, before the times that we are in, normally in the Northern markets there is an excitement to go ahead and get the boat and to be ready for spring, and that urgency is just not there with the customer in the current economic environment that we are in. And so I think that’s part of what we are seeing. Weather was an impact. It’s hard to get it excited in the Northeast when you’re having floods and severe weather as well as Florida. As you know, I do a lot of water skiing and normally through March I would have been out on the water from January through March, maybe 8 to 10 times. And I was out one weekend; it’s the only weekend that it was even possible for me to get out either due to the cold weather or the wind. And a lot of our customers are in that same boat because I spoke with many of them that say, “My gash, normally this time of year, I’d have 20, 30 hours on my boat, and I’ve got two or none.” Hayley Wolff – Rochdale Securities: Okay. Any progress on the sales of some of the closed dealers or leasing over the underlying land?

I would say there is progress. But nothing has happened yet, Hayley. We’ve got interested parties on a couple of our facilities, namely the ones out in California. But nothing has been agreed to yet from us. Hayley Wolff – Rochdale Securities:

In one case, there was a zoning delay to make sure that the new company's business can effectively utilize the property. And I don't think it's cleared up yet, but we don't expect that to be an issue. And I will add, based on what we are and who we’re in discussions with, either if we leased it or if we sell it the sales would be above book value and the leasing terms seem to make sense. Hayley Wolff – Rochdale Securities: Another question, there's always been concern that with all the discounting from the past, let’s say 18 months, has pulled forward some buyers. And if you look at the sales number this quarter, particularly compared to the prior quarter what's your confidence that the buyer is just not very price sensitive now and isn't interested in kind of fuller priced model in your 2010. They just want the discount and stuff.

Well, first of all, there are a lot of our customers that are wanted that new boat with the Axius or the Zeus or the new model or whatever – and there is a reluctance on their part right now. But I guess, call it, fear of the unknown of what’s going to happen in this country and even though there is some positive signs. And so there is – that reluctance is there, but also they are wanting the new product. As far as did we pull business forward earlier, maybe a little but not a lot because most of the people that we are buying the products that we were throwing out at distressed prices almost were people that were not our existing customers. And so that’s probably some good news there. We are seeing the store traffic up Hayley. So we are seeing some very positive signs. We appear to be working a lot more deals. There has been a reluctance or it’s a difficult task to convince potential buyers today that if they don’t buy this boat it’s going to be a while before they get one because they’re still believing that there is a glut of inventory out there which is not the case. And so we are having to work our way through that. We believe and hope, it’s not a strategy, but we do believe that with the active getaway participation as this season has began and finally led our performance as an example that it will create even more urgency and desire from the customers’ perspective. Retail financing is not a big issue right now. We can pretty well get it done with anybody that’s got good credit. And so the banks have freed that up some and so it’s just a matter of getting everybody convinced that now is the good time to go ahead and move, and that we are on the way to a economic improvement.

I think the bigger issue than the price issue Hayley is just the consumer confidence, just the overall – how does the buyer feel. We did sell a lot of boats in the quarter even though our same-store sales, there was a lot of boats that we sold 2010, some 2009 at pretty decent margins. Hayley Wolff – Rochdale Securities: Okay, one last question. Do you have a target for inventory turns?

I can say that we used to be 3 turns and we would like to be back to 3 turns or maybe greater, maybe greater may be difficult. But I think with the way the manufacturers have changed along with the dealers how you look at forecasting and how they’re trying to build more to what’s selling at retail, which I think they can do now because where the capacity is in the plant, I think that’s helping turns right now for all dealers.

And with our current inventory levels which are such that we should be able to get back to higher turns, there is a very good possibility that turns have come up this year. We just got a little help with positive news out there. Hayley Wolff – Rochdale Securities: It's amazing at how low your inventories are, and your credit line?

Yes.

Hayley Wolff – Rochdale Securities: You won't even need one soon. You won't have to renegotiate it.

Right. Some of our lenders are probably listens. So we like them to think that we need it and keep them as a partner. Hayley Wolff – Rochdale Securities: All right. Thanks a lot guys.

Thanks.

Thanks, Hayley.

(Operator instructions) We will go to Greg McKinley with Dougherty. Greg McKinley – Dougherty: Yes, thank you. Guys, could you just talk a little bit about, I know you are mentioning potential proceeds from either a sale or a lease of some owned facilities, can you give us a sense for the magnitude of that potential transaction in terms of cash flow to the company?

The lease would be really insignificant. It would be a monthly lease. We agreed to some number of years. It would not really even show up on the radar screen with the stores. We only have I think three stores considering selling right now. Greg McKinley – Dougherty: And where are those located?

Two in California.

One in Utah.

No, one at Vegas, our Las Vegas store. The cumulative book value Greg at those three properties, and this is an educated guess I don’t have it in front of me, is probably less than $4 million. Greg McKinley – Dougherty: Okay.

Yes, it’s not a huge number. Most of our real estate is still in use that we own and we have no intention of selling it. Greg McKinley – Dougherty: Okay. Speaking about inventory, talking with some dealers the last or so, occasionally for the first time and forever I've sort of heard this notion that maybe we've swung a little, the pendulum a little too far in the other direction in terms of us getting too tight with current-year product. Do you feel like that is happening to a degree? Has there been over-correction or is this where you want to be. You feel like you’ve got the product you need when you need it.

Greg, I would say that maybe with a few specific models, we could use some more but overall we feel comfortable with our inventory level and the ability to be able to satisfy the consumers’ needs. I think most of our industry has gotten pretty well used to the thing and you need two or three or four of each model in the store versus sometimes – not sometimes, but almost always, product in demand commands higher margins and also creates greater urgency. So we do not see it as an over-correction at this point in time.

Greg, what you maybe hearing is these dealers including some of our on-locations, when you walk in to them there is a significant reduction in inventories sitting in the store. But that’s what’s needed at retail. And you may hear from some people just that it just feels low because of what their store looks like because they have these massive stores with 50 boats in them.

But it's not a bad thing, Greg. I remember times going way back where we didn’t had any inventory in the stores hardly, and we were calling up customers and saying, if you bring your boat in I will give you free detail and do some things for you if you will give us something to show. We're doing a little right now in specific models because we're really watching it. But supply and demand curve works when it’s in demand. That helps the whole equation. Greg McKinley – Dougherty: Mike, real quickly can you share you D&A and CapEx levels here in the quarter?

CapEx would be very small. D&A is around $2 million in the quarter. I would say CapEx was $500,000, $600,000 something like that. Greg, I don’t have that right in front of me. But it would be not have been very significant. Greg McKinley – Dougherty: Okay. And then finally, you talked a little bit about a slow start to April. Could you give us some context around that? What does that mean? Is that similar to March quarter trends or did we see additional deterioration? I'm guessing, the reason I'm asking is I would think the month of April was much more important to the fiscal year than any other first three months of the year. And just want to understand the order of magnitude what a slow April means.

Greg, March was de-accelerating is probably the best way to explain it and we think a lot of that was to weather because it just kept getting worse and worse, not better. And April has been accelerating. When you move from March where there wasn’t lot of activity going on where there should have been. To create the enthusiasm and excitement again, it takes a little bit to get it build back up. And so therefore I think that’s what we are – the reason we are seeing more of an acceleration in April. But this week was better than last week and it was better than the week before. So those are all positive signs. Greg McKinley – Dougherty: Thank you.

Thank you, Greg.

And from RBC Capital Markets, Ed Aaron. Ed Aaron – RBC Capital Markets: Thanks. Good morning, guys.

Hi, Ed. How are you? Ed Aaron – RBC Capital Markets: I am great. Thanks. I wanted to get your take on what's happening in the pre-owned market because it's been a lot of pretty good condition, recent model year used boats that are floating through the system. I am wondering kind of what you are seeing through your stores in that part of the business.

Ed, I tell you our used boat business is doing well. I think what you are seeing in the industry, you also saw in the auto industry and the motorcycle industry, the used boat pricing was probably beaten up with re-processions, with the jump in unemployment and all that type of stuff, if you go back a year but the pricing on used boats has actually stabilized and actually moving north right now.

Which is good, it’s very good. With our ability to make trades, the values and everything else increasing is a positive thing, Ed. But there were some one-time opportunities there on some repo boats and things that we were more concerned about make sure that we got our inventories aligned, which we did for the future and long term. But those deals that were out there are gone now. There is very, very few of them if any and of course we look at, I mean if something makes sense we will jump in and buy them as well. Ed Aaron – RBC Capital Markets: Okay. Thanks. And then you mentioned I think that you generally feel pretty good about your ability to get the supply boats that you need. But at times, like there might be a couple of pockets where perhaps you could use a bit more inventory. What segments of the market would that be, where you might be seeing that?

Mostly in the 17 to 23 feet. Ed Aaron – RBC Capital Markets: So boats that you would typically – more stocking boats, boats that you would typically kind of carry more inventory or everybody would carry more inventory in this time of the season it's just, in a more build-to-order market you're just not seeing the supply as even?

Ed Aaron – RBC Capital Markets: Okay. Thank you.

Thanks, Ed.

Thank you, Ed.

And ladies and gentlemen, that is all the time that we have for questions today. Mr. McGill, I’ll turn things back to you for any closing or additional comments.

Well, thank you everyone for your continued interest in supporting MarineMax. I'd also like to thank our team members for their hard work and passion for our business especially during these challenging times. It is truly due to their efforts that we can call ourselves the leading boat retailer in the country. Mike and I are available today, if you have any calls. And thank you for your participation.

Ladies and gentlemen, that does conclude today's conference. We thank you for your participation.