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Cover Update: Stay Afloat

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  • | 6:00 p.m. January 4, 2008
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Cover Update: Stay Afloat

The national boating industry tumbled in 2007, brought down partially by a softer economy.

But two of the largest boat dealers in the country - Clearwater-based MarineMax and Anna Maria Island-based Galati Yacht Sales - took the down year as a chance to tinker with company strategies in an effort to gain more market share. Galati even scored a major victory in 2007, moving from number two to number one in Boating Industry magazine's annual top dealer rankings, one of the most prestigious designations in the industry.

Being number one is a position MarineMax is well versed in, so much so that the magazine permanently removed it from its list in 2006, as the company, with nearly 100 dealerships and $1.2 billion in revenues, was so far ahead of the competition the race was really for second place.

As a publicly traded company, MarineMax's struggles have been the most visible and significant in the industry. Its shares have fallen as much as 50% over the year and its revenues and net income have dropped consistently, too.

One of the company's low points came in its fiscal fourth quarter, reported Nov. 1. On that day, MarineMax said it would have quarterly net income of $6.6 million or $0.35 a share, down from $12.6 million, or $0.66 a share in the previous year's fourth quarter. Quarterly revenues declined as well, from $323.6 million to $318.2 million.

"Fiscal 2007 has been a challenging year for the marine industry, with a widely reported double digit drop in retail unit sales," MarineMax's chief executive officer Bill McGill says in an earnings statement.

"We have capitalized on our strengths to substantially outperform the industry and deliver significant market share gains through an increase in unit sales," McGill says.

What's more, the company says a return to better days isn't imminent, projecting "a low single digit decline in same-store sales on an annual basis" in 2008.

Meanwhile, Galati is growing, if not significantly in sales, then in locations and employees. Over the last year, the $200 million family-run business, which counts five siblings as company executives and managers, hired new sales and service employees, expanded a store in Orange Beach, Ala. and opened a retail store in Houston.

Carmine Galati, who runs the company's markets from Anna Maria Island south to Naples, says the recent coronation from Boating Industry was really a recognition for thriving, not just surviving, the market downturn. The company continues to invest heavily in training and employee retention, which it considers paramount to reaching its constant goal of providing top customer service.

-Mark Gordon


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