Good morning, and welcome to the MarineMax Inc. Fiscal 2025 First Quarter Conference Call. Today's call is being recorded. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. I would like to turn the call over to Scott Solomon of the Company's Investor Relations Sharon Merrill Advisors. Please go ahead, sir.

Good morning, and thank you for joining us. Hosting today's call are Brett McGill, MarineMax's Chief Executive Officer and President; 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 associated with today's announcement can be found at investor.marinemax.com. With that, I'll turn the call over to Mike. Mike?

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 are 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. 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 our Form 10-K and other filings with the securities and Exchange Commission. Also in today's call, we will make comments referring to non-GAAP financial measures. We believe that the inclusion of these financial measures helps investors gaining 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 Marine Max and other companies on both a GAAP and a non-GAAP basis. The reconciliation of non-GAAP financial measures to the most directly comparable GAAP measures is available in today's earnings release. With that, let me turn the call over to Brett. Brett?

Thank you Mike. Good morning everyone and thank you for joining us. Before we get into the details of the quarter, let me take a moment to commend our team for their exceptional commitment to serving our customers across every aspect of our business. We ended our fiscal year focused on the cleanup and restoration of many of our locations from Hurricane Helene and spent a fair portion of the first quarter of fiscal 2025 repeating the process as a result of the Hurricane Milton. We are grateful for the extraordinary efforts our team has demonstrated even as many continue to navigate the disruptions caused by the storms in their own lives and communities. Operationally, the December quarter revenue was strained with the combination of the hurricanes and the soft retail demand across the outdoor recreation space. While the top line was a bit lighter than we had anticipated, it isn't surprising that the shortfall largely came from the disruption to the entire state of Florida. Having said that, it does seem that potential new boat buyers have remained on the sidelines given the mixed economic data, persistent inflation uncertainty and a tenuous geopolitical climate. It's difficult to dissect precisely how much of the 11% decrease in same store sales in Q1 was the result of the hurricanes versus the macroeconomic environment, except to say that both were impactful. Although the premium segment of the retail boat market was not immune from those headwinds, our strong presence in this high value category sets us apart. This segment, characterized by more resilient demand and customer loyalty, often recovers faster during market improvements. By providing exclusive brands, top tier products and tailored services to our premium customers, we are strategically positioned to navigate these challenges effectively and take advantage of growth opportunities…

Thank you Brett, and good morning again everyone. I want to echo Brett's sentiments about the resilience of our team in navigating the challenges of the current market and the storms. As Brett noted, our top line performance reflected both the impact from two hurricanes and the softer retail environment. The industry registration data for each month in the quarter continued to reflect the challenges we are facing, although we did see increased retail activity following the storms and in November on a sequential basis, December retail was less than expected resulting in a softer close to the quarter. Our same store sales were down 11% while units were down in the mid-single digit range, meaning our AUP was also down. Not surprisingly, lower sales in Florida, which typically are larger in nature, was the biggest driver of the AUP decline, while gross profit declined in absolute dollars due to lower revenue. As Brett pointed out, our gross margin was healthy, reflecting the benefits from our strategy of expanding into higher margin businesses. As we go through the income statement, keep in mind that our GAAP Results include a $25.8 million gain from an adjustment to the fair value of contingent consideration. Much of the gain is from the earnout reconciliation related to IGY. As we have said on prior calls, IGY continues to perform well and we are very pleased with our overall performance. However, contingent consideration liabilities can fluctuate based on the achievement of certain predefined qualitative and quantitative milestones. Excluding the items noted in the press release in both periods, adjusted SG&A in the quarter decreased year-over-year to $149.4 million. As part of our strategic cost reduction initiatives and to align our footprint with the current market environment, we consolidated or sold three locations during the quarter…

Thanks, Mike. While economic conditions in the recreational marine industry have been challenging, we anticipate that the pace of activity will improve as we move into the spring selling season. Early activity at this year's retail boat shows has been encouraging and we believe that our position within the premium category of the segment will enable us to achieve meaningful growth and outperform the industry as market conditions recover. As a leader in the recreational marine market, our strategic advantage centers on the diverse yet complementary nature of our portfolio. All of the pieces are related and we continue to leverage the synergies. Every aspect of our business, from retail locations to marinas, superyacht services, finance and insurance operations and manufacturing is interconnected with each component, strengthening and supporting the others to drive overall success. We are confident in our ability to execute our growth strategy by focusing on innovation, enhancing customer experiences and further expanding our higher margin businesses. And with that, Mike and I will be happy to take your questions. Operator, please open up the line for Q&A.

Thank you. [Operator Instructions] Our first question comes from the line of Joe Altobello with Raymond James. Please proceed with your question.

Thanks. Hey guys, good morning. This question was on SG&A. Trying to get a sense for where you guys see SG&A this year. I think on the last earnings call you seem to imply about 50 basis points of leverage with the animalization of, 20 million to 25 million of cuts. But you're also seeing some creep in other costs. So given what we saw in Q1, what's a good realistic number for SG&A this year?

Hey Joe, it's Mike. Good question. We said last call that we were aiming to get back SG&A as a percentage of revenue equal or approximating where it was in 2023, which at the time was about a hundred basis point overall reduction. But because of the inflationary cost increases that we are seeing, we probably alluded to something less than 100. But that's still our target for this year. When the year wraps up on a full year basis, obviously as a percentage it jumps around quarter to quarter based on how strong retail activity is. But that's what we're shooting for, I think. I again said in the prepared remarks that we do see inflation still in certain parts of the business that we're challenged with, but we're not giving up our overall goal of improving the operational efficiencies of the company.

Got it. Helpful. Maybe just to follow up on that, can you speak to the insurance market in Florida either for boats and or marinas? Have you seen any material uptick in premiums for example, or seeing insurers leaving the market?

Another good question. As of now on the retail insurance like for people who are buying boats from us, we have not experienced an increase from the people who insure boats in Florida. It wouldn't surprise me if there is something in the future once the dust all settles. Likewise, when you think about just the nature of the storms and also even the fires all the way out west, unfortunately for the people out there, you would think that the storms and the fires would have some type of an impact on the insurance market. For when it comes to companies ensuring the risks that we have, the property risks that we have, we haven't seen any specific increases yet, but we're, we're mindful that there could be some and those are some of the inflationary pressures I mentioned on our last earnings call specific to insurance. So we're waiting and seeing right now, I guess is what I'd say on both.

Okay, just one last one, if I could. Given the onetime benefit in Q1, what are you expecting for a full year tax rate?

We guided to 26.5%. I haven't changed that in the overall guidance and actually I'll just comment on that, Joe. So the, the benefit in Q1 is about $0.12 in the quarter. So if we're $0.17 on a GAAP basis because of the effective rate adjustment, that's about a $0.12 impact in that quarter in the scheme of a whole year. I didn't think it was material enough to adjust the overall guidance yet. We'll keep watching that to see if we need to bring the effective rate down a little bit for the full year.

Okay, thank you.

Thanks, Joe.

Our next question comes from the line of Drew Crum with Stifel. Please proceed with your question.

Okay, thanks. Hey guys. Good morning. So just a question on the adjusted gross margin. I think the 36% plus for the quarter would seem to be pacing ahead of where you thought it might be for the year, which I believe was closer to 32%, 33% range. Do you see upside to your original gross margin assumption based on the fiscal 1Q performance or should we expect this to fall in subsequent quarters and if so, what would be the drivers for that? Thanks.

Hey, Drew, good question. I comment it's Mike. Margins do change throughout the year. Typically when you get into the higher volume quarters like March and June, they are lower gross margins when you look kind of historically in our company. So obviously we're pleased with the overall. By the way, that's not an adjusted gross margin. That is the gross margin. And I know we have a couple different adjusted numbers in there, but we're pleased with where the 36% is in the quarter. And hopefully as we move through the year there's an opportunity to talk about improved margins. But I think at this point we keep the margin guidance in that low 30% range as we mentioned.

And I'll add, Drew, that when you have the sales, when we had the loss of the sales in the quarter from hurricanes and other factors, that obviously puts a higher percentage comes from the higher margin businesses. So that's part of the contribution to that higher margin. You see.

Got it. Okay. And then maybe this one housekeeping item on the interest expense line, it was up a little bit on a dollar basis and as a percentage of revenue year-on-year, obviously a lot of moving pieces here. But how do you see that moving around over the balance of the year?

Thanks, Drew. Yes, it's up primarily because inventory is up and the related financing of inventory is up. I think it's so I think the press release says our prepared remarks says inventory is elevated higher than we would have expected it to be. When we work through the and typically the December quarter or the March quarter is peak inventory. Hopefully as we move through the March quarter, it's going to prove out that we that December was peak inventory. And as inventories come down hopefully somewhat in March and then again in June seasonally and then end the year a little bit lower interest expense, we have an opportunity to begin to reduce accordingly. We are getting the benefit, we are getting the benefit now of 100 basis points in total in terms of reduction. Not all. That's for the full fiscal year. The two most recent cuts obviously are just for the remaining nine months of the year, which will be beneficial.

Okay. All right, Helpful. Thanks guys.

Thanks.

Our next question comes from the line of Mike Swartz with Truist. Please proceed with your question.

Hey guys, good morning. Maybe just to start, I'm just wondering, across your business, Florida is a seasonally larger piece of the business. And for the industry in the December quarter, I'm just wondering, were there regional disparities between the retail volume that you saw, in other words, outside of Florida, would it have been better than down 11?

You're saying that kind of the difference between out in Florida and non-Florida stores revenue, Is that what you're asking, Mike?

Yes.

I think that I'll categorize. Mike, help me out here. I believe that our non-Florida revenue was pretty flat, like almost exactly flat. And the variation tended to come from Florida. Almost completely correct.

Yes.

Brett's prepared remarks actually said that the decline in revenue was heavily weighted towards Florida during the quarter.

And just to clarify, on a comparable store basis, was it?

I mean you're going to get, I'm sure when you break it apart, you're going to have regions that were up or down, but in total outside of Florida's business was flat to last year in the quarter.

Okay, that's helpful. I appreciate that. And then just in terms of a -- lot of moving pieces to gross profit margin and understanding seasonality as part of the equation with a lot of the non-boat sale or boat businesses being a larger portion of sales in December. But is there any way of looking at just kind of stripping all that out, what boat margins were relative to last year?

Yes, I can comment on that, Joe. I think for those of you who have followed us for a long time, you'll remember that last year's December quarter, we sensed softness in the industry and we got very aggressive from a promotional perspective. I think on this call last year, we talked about that. We pretty much went alone. A lot of the manufacturing partners were. They typically don't. They typically had not started with all their incentives yet. Given the cycle coming out of 2023 in the current quarter, the manufacturing partners are doing what they normally would be doing in an environment like we're in. So there is additional support coming from manufacturers, but it's really more normal support, I would stress, coming from them. So while we're going to market more aggressively, we have some additional help from the manufacturing partners this quarter versus last year.

Okay, helpful. Thank you.

Our next question comes from the line of Fred Wightman with Wolfe Research. Please proceed with your question.

Hey, guys. Good morning. I'm just hoping from a very high level, if we think about some of the puts and takes for the top line, I mean, rates are probably higher than you would have thought they would have been three or four months ago. You've talked about a choppy retail environment. December was weak and inventories are above plan. So when you put all that together, what is driving the cautious optimism for 2025? Where is the offset on the top line to keep the full year outlook unchanged?

I could take a stab then. Brett can repair anything that I say. But when we came out of the storms, we had good retail activity in Lauderdale. There were a couple of press releases that certain manufacturers put out that largely reflected what we did. The month of November was honestly a pretty decent month. Now, it's always hard to say how much of that is makeup from the storms, how much of that is retail activity. December was softer. We're in boat shows right now that generally are going, they're not all 100% great, but they're generally going pretty, pretty good. And we feel at least there's clarity in terms of the political environment. And I think the expectation is that with that clarity and with things settling down, hopefully there'll be improved retail activity.

Yes, I think I'll add to it that December was much tougher than we had anticipated. Like we said, November was great, but really, when you dig down, Mike said it, we probably were just getting business that didn't happen because of the hurricanes in October. So you pushed. December was rough. I think you'll hear that across a lot of industries, probably. And then January, Mike commented that we're things are looking up for January and I know we comment it's a small month, but it's important month leading into these boat shows. So it is up right now.

That's helpful, thanks. And then I think entering the fiscal year, you guys had alluded to the timing of the recovery for the Florida market as probably being the biggest unknown entering the year. And I'm wondering if that's still a fair characterization and if you could maybe update us on how you see the broader Florida market recovering versus plan.

Yes, I think you got to probably break it down into a couple parts. Right. There was stores that were disrupted because of the storm, meaning preparing, they might get hit, but they never did get hit. So that was just very disruptive. Call it October, and that's. They picked up that business, those stores. I'd say they're all back up and running and rocking and rolling. And then there's stores that were damaged by the storm, the communities were damaged, the docks, the people's homes. I don't even know the timeline on some of that. I know our stores, our teams are resilient and we put mobile trailers up, computers are working and we're engaged in business and we're selling boats. But people's homes and docks and their life has to get back in order too. So it's. I don't have a timeline for it other than I'm impressed with what the team's doing under the circumstances.

Okay, thanks a lot.

Thanks, Fred.

Our next question comes from the line of John Healy with Northcoast Research. Please proceed with your question.

Great. Thanks for taking my question, Mike. I wanted to spend just a minute on the gross margins a little bit more detailed. In the release you talked about three or four things that kind of help that improvement. I was wondering if you could maybe give a little bit more granularity on the contribution of each and then thinking about the go forward, just the ultimate contribution that some of those items can have and maybe where you kind of see a more steady state gross margin profile for the business. Thanks.

Thanks, John. Good question. I tell you, I think the biggest driver of the business is the growth in our higher margin businesses that we've expanded with and improved upon. They all grew in absolute dollars over prior year. The higher margins as a percentage. I think last year we were probably in this quarter something like 25%, 26%. This year we're over 30% now. Part of that, what Brett said, when you have a decline in revenue in the neighborhood of 60 million year-over-year, your higher margin businesses are going to expand, but I do still think on a full year basis, the low 30s is kind of the right number to be thinking about. I think long-term, as we continue to think about the business and even as we continue to complete acquisitions, we're pretty focused on adding businesses that have a profile with higher margins for the reasons you see this quarter. They tend to be more stable, a little more resilient, help support the overall operations, the EBITDA and cash flows of the organization. I think long term there'll be another discussion about where margins go to. But today I think the low 30s is probably the right number to be thinking about.

Thank you very much.

Thanks, John.

Our next question comes from the line of Brandon Rolle with DA Davidson. Please proceed with your question.

Good morning. Thank you for taking my questions. First, on retail, I think you had mentioned flattish retail expectations for the remainder of the year. Do those expectations bake in any share gains versus the industry where maybe you're expecting the industry to be down year-over-year?

Actually, that's a really good question, Brandon. Normally, as you guys know, we typically do outperform the industry. I think when we did our guidance for 2025, we were a little cautious about that only because of the impact to our stores on the west coast of Florida. And that is a significant part of our business. I think I said last call it was, roughly 25% of our business. So we haven't changed that. I mean, typically we would outperform the industry. So our flattish sales are consistent with what we said about the industry, which is flattish. So hopefully as the year goes on, there could be some upside in that if the industry is in fact flat and our stores have recovered and we can beat that.

Okay, great. And then on inventory, I think you in the press release mentioned being a little bit of being a little bit elevated in some areas. I'd imagine you're in a better position than other industry participants. Could you talk about maybe, maybe pressure points in your own inventory and then maybe what you're seeing for the broader industry. Thank you.

Brandon. This is Brett. I'll comment first. I think our focus on our aged product and working with the manufacturers to get the orders right and get those boats out. We feel good about where our inventory is at from a quality, less age. Still some work to do there. We're laser focused here at the boat shows in this winter season to get those, any last bits of those cleaned up. So Mike, you want to add anything?

It's just elevated. We expected higher sales. And so when you have less sales and you have the product that you were hoping to sell, you have a little higher inventory. But I feel pretty comfortable that as we move through 2025, inventories will improve and come in check overall, yes.

Okay. And for the broader industry.

A broader industry, the data that we keep seeing and hearing is just that there continues to be an aging problem and they're far more aged than we are, more noncurrent, more older product than we have. I suspect as we go through 2025 that will also improve for the overall industry too.

Okay, great. Thank you.

Thanks, Brandon.

Our next question comes from the line of Mike Albanese with the Benchmark Company. Please proceed with your question.

Yes, good morning, guys. Thanks for taking my questions here. First one, as it relates to expense reduction, I'm just trying to get a sense of white space or I guess what levers you can pull. I mean, you close three stores on the core quarter, were these, more one off kind of portfolio optimization situations or how can we think about really your unit count as we move throughout the year? Kind of taking your, I guess, retail assumptions as, flat retail.

Yes, I think, we don't have a ton of other stores that we can close. I think we, I think we roughly closed 10 retail locations in the last three or four quarters. Most of those were duplicated where there's another store nearby where we're not really going to miss the revenue. The other expense initiatives I think we mentioned on the last call, we certainly have looked at our number of team members, our resources, and made adjustments where it makes sense for the current environment. Ourselves and our team really going line by line in the P&L and looking at every expense that we have and contracts that we write and recurring expenses in the current quarter, we've had nice reductions, really in a lot of other areas in the business, marketing, other areas, T&E, etcetera, in the quarter. Unfortunately, you have some inflation coming in though, that helps to offset some of that. But we're going to stay focused on it and continue to look for areas to improve the overall operational profile of the company.

Got it. That's helpful. Thanks. And then just one more. If I could go back and ask about kind of the promotional and discounting activity. Inventory is up a little bit on the quarter, but I think across the, the industry barring, some certain segments that need a little bit more of a destock, channel inventories are a bit tighter. You're in a good position. Less aged product. And you kind of quoted more normal support from OEMs. I mean, so is your expectation then, as we move into selling season again, holding your assumptions is true, that we'll start to see more relief and kind of stay within that normal cadence. Are you expecting the promotional activity to remain significant kind of throughout the year?

I think, Mike, this is Brett. I think we're going to continue to see some aggressive promotional activity from manufacturers, dealers across the country, especially during this winter boat show season to get inventory levels and the aging. Everything you just pointed out, we got to get that right. Right.

Right.

But I think we're in a good position with all those manufacturers. We're lined up and ready for it, and we have a lot of product that's fresh and new and those bring higher margins with new innovation. So there's a good balance between those.

Okay, that's helpful. Thanks, guys.

Thanks Mike.

Our next question comes from the line of James Hardiman with Citi. Please proceed with your question.

Hey, good morning, guys. So, wanted to quickly circle. Wanted to circle back to the inventory conversation. So just looking at the balance sheet, I think inventory dollars right, are up 18% year-over-year, I guess. First question, is that an apples to apples number? Oftentimes there's some M&A in there. I don't know if there's some ASP in there. Just trying to get sort of a clean, apples to apples. How much are units up in terms of your inventory year-over-year? And then as I think about the go forward, it sounds like you expect orders to be significantly less than retail going to bring that number down. How long is that going to last? And what does that inventory number look like year-over-year as we work our way through the year?

Yes, there's really nothing from an anomaly perspective in the comparison year-over-year, other than last year, there were still categories where we were lean in inventory and we did expect. And then we did articulate that we were expecting to have inventory up this December versus last year's December. It just finished higher because of the lighter sales than we had actually achieved. On a unit over unit basis, I actually don't recall what it's up year-over-year, James. I typically go back and look at where were we versus 2019 because a lot of people historically had asked that question. And we're way down from 2019 as the industry is, which doesn't surprise you. And then the tweaking of the orders and stuff that I mentioned on our prepared remarks. It is just that it's fine tuning around the edges where it makes sense with our manufacturing partners. And we, quite frankly, we always do that. We're always adjusting up or down where based on retail activity. We said on our call last quarter that we expect the year inventory dollars to finish around where they were last year, if not a little bit below. And that is still where we're targeting. Obviously, it's all subject to retail activity, but that's still what we're targeting for the full year.

And James, I'll add that I think with December usually being a bigger boat selling month for sure and that being off, I think our ASP on inventory jumped a touch for sure. And then that's why I made the comment about promotional activity. We're going to press the pedal to bring the inventory down here, especially in these winter boat show events.

Got it. That's helpful. And then curious what you think drove the January improvement. Sounds like December was pretty bad. January sounds like it was pretty good. I know it was a small month, but is that, Florida getting better? ASP is getting better. Boats, non boats. What's driving improvement in January? And then I guess in the context of the full year guide. Right. Same store sales in the -- in the December quarter were a little worse than expected, but you still expect to get to flattish same store sales, which would imply, presumably some growth during the remaining three quarters. I guess I'm trying to figure out how we get there and what that looks like. Originally, I think a lot of us had modeled sort of a slower first half and then a pickup in the second half. But then January's up. So just help us, in terms of at least how you guys are thinking about that flow through the year.

Well, I definitely comment that we watch things daily and weekly from some of the high technology investments we've made. They can tell us a lot so we can drive things quickly. December was just tough to get people in and so we had to make some adjustments. So I'll give a little credit to our pretty innovative technology that we have to be able to drive some business in January. But I would also say there's a feeling of a different consumer sentiment, so to speak, of putting in leads and us being able to convert those leads or get the people in the showroom. So there's just. I'll summarize it down to a little bit of a traffic uptick for January.

Do you. Let me ask you this way. Do you think, again, in the context of your full year flattish same store sales, the rest of the year would need to be up at least modestly. Right. It's not a big quarter, obviously, the December quarter, but do you think the second quarter can and will be up in terms of same store sales?

Hey, James, it's Mike. So when I think about. Actually, I was going to chime in, but I apologize. So I was going to say what you just said. The December quarter is a small quarter. The back half of the year is. Or the back three quarters of the year are all much bigger. We do have easier comps, for sure, in the September quarter, assuming there's no other hurricanes, because we were down 5% in September of 2024. So we have an easier comp there. March quarter is easier. The June comps relative to what we normally have done in this organization, the 4% in June is not all that tough relative to what we've comped. So I think the back half of the year gives us an opportunity to have flattish comps for the whole year.

Got it. That's helpful. Thanks, guys.

Thanks, James.

Our final question comes from the line of David McGregor with Longbow Research. Please proceed with your question.

Yes, good morning, everyone. I just wanted to follow up, Mike, on your commentary around the revenue outlook for 2025. You mentioned that you'd closed 10 locations over the last three to four quarters. What does that loss of revenue represent as a headwind within the mix of factors going into that guidance?

Good question, David. So what I commented is really almost all those locations are duplicated, meaning there's a hub store in the same marketplace or at least adjacent to it. And then in a couple cases where we've actually maybe left the market, the larger boat revenue that may have been recorded in the stores that were in that market is largely going to be recorded by us anyhow. Because of the way we structure our dealer agreements with manufacturers, we have very large territories. So we're not expecting really any headwinds from the locations that we've closed to date or.

Very slight.

Yes, very slight. Very slight headwind. But we would have adjusted our guidance if we were concerned about that. So it's a good question. But it's really just closing primarily duplicate of locations. David.

Okay, thanks for that. I guess somebody has to ask the obligatory question around tariffs. How do you think about your exposure there?

Good question. When I think about our business, we do import product, the biggest region we import product from that's decent size is Europe outside of Europe, we don't. Nothing's real material overall in terms of the percentage of revenue. And with Europe, I guess if there is a tariff on Europe, with the strength in the dollar today, where the. Europe's dang near at parity. For most of our existence, we've brought boats in from Europe at a much higher euro. So at least in theory, a reasonable level of tariff. Nobody wants it. We don't want it. It's something we could probably navigate between us and our manufacturing partners. So we're watching it like everybody else is. We're trying to see what's going to come about. We would prefer none in terms of what we import, but we think we can navigate it.

Mike, is there any way you could quantify kind of the magnitude of that in dollar terms of what that European purchase would represent?

Europe is probably something like. Yes, it's probably greater than 10, less than 15 or around 15. It's probably. I'll stick with my first answer. Greater than 10, less than 15% of total revenue.

That works. That works. And then last question for me is just, I guess, on capital allocation and you've got a strong balance sheet, maybe your inventory is a little bit higher right now, but your plan is for that to come down and, and certainly good cash position, lots of credit availability. How do you think about the opportunity right now as you survey the market to make acquisitions of distressed sellers? And if so, how do you think about prioritization of that initiative?

Yes, David, that's a good question. We obviously are continuing to talk to a lot of different acquisition candidates to be able to keep that on list. We're really bouncing against our overall strategy, whether it's marinas and super yacht services or even the boat retail business and the boat retail business, where it makes sense that they have storage and marina and the higher margin components of the business. So. And then within our markets that we have, there's additional expansion opportunities with, with maybe new locations that add storage and revenue streams there. So keep an eye on all of that and, and trying to be opportunistic if that comes up.

Right. Great. Well, thanks very much. Good luck.

Thank you, David.

Thank you.

Thank you. We have reached the end of the question-and-answer session. Mr. McGill, I'd like to turn the floor back over to you for closing comments.

Well, thank you everybody for joining us today. We're in full swing at all the winter boat shows, including the New York show this week as well. We're gearing up for the Miami show in February, and we hope to see some of you at some of these shows. So have a great day.

Ladies and gentlemen, this does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation, and have a wonderful day.