0000950153-98-000635.txt : 19980602 0000950153-98-000635.hdr.sgml : 19980602 ACCESSION NUMBER: 0000950153-98-000635 CONFORMED SUBMISSION TYPE: S-1/A PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 19980601 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: MARINEMAX INC CENTRAL INDEX KEY: 0001057060 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-AUTO & HOME SUPPLY STORES [5531] IRS NUMBER: 593496957 STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: S-1/A SEC ACT: SEC FILE NUMBER: 333-47873 FILM NUMBER: 98640001 BUSINESS ADDRESS: STREET 1: 18167 US 19 N STREET 2: SUITE 499 CITY: CLEARWATER STATE: FL ZIP: 33764 BUSINESS PHONE: 8135311700 MAIL ADDRESS: STREET 1: 18167 US 19 N STREET 2: SUITE 499 CITY: CLEARWATER STATE: FL ZIP: 33764 S-1/A 1 S-1/A 1 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 1, 1998 REGISTRATION NO. 333-47873 ================================================================================ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------------------ AMENDMENT NO. 3 TO FORM S-1 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ------------------------ MARINEMAX, INC. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) DELAWARE 5551 59-3496957 (STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NUMBER) WILLIAM H. MCGILL JR., CHAIRMAN OF THE BOARD 18167 U.S. 19 NORTH, SUITE 499 CLEARWATER, FLORIDA 33764 (813) 531-1700 (ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES) Copies to: ROBERT S. KANT, ESQ. CHRISTOPHER T. JENSEN, ESQ. MICHELLE S. MONSEREZ, ESQ. MORGAN, LEWIS & BOCKIUS LLP O'CONNOR, CAVANAGH, ANDERSON, 101 PARK AVENUE KILLINGSWORTH & BESHEARS, P.A. NEW YORK, NEW YORK 10178 ONE EAST CAMELBACK (212) 309-6000 PHOENIX, ARIZONA 85012-1656 (602) 263-2400 (NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF REGISTRANT'S AGENT FOR SERVICE) ================================================================================ 2 INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE. SUBJECT TO COMPLETION, DATED JUNE 1, 1998 PROSPECTUS 4,780,569 SHARES [MARINEMAX LOGO] COMMON STOCK ------------------ Of the 4,780,569 shares of common stock, par value $.001 per share (the "Common Stock"), offered hereby, 3,515,824 shares are being sold by MarineMax, Inc. (the "Company") and 1,264,745 shares are being sold by certain stockholders (the "Selling Stockholders"). See "Principal and Selling Stockholders." The Company will not receive any of the proceeds from the sale of shares by the Selling Stockholders. Prior to the offering, there has not been a public market for the Common Stock of the Company. It is currently estimated that the initial public offering price per share will be between $14.00 and $16.00. See "Underwriting" for information relating to the factors to be considered in determining the initial public offering price. Application has been made to list the Common Stock on the New York Stock Exchange under the symbol "HZO." Of the 3,515,824 shares of Common Stock being offered by the Company, 1,861,200 shares are being offered to Brunswick Corporation ("Brunswick") at a price per share equal to the Per Share Proceeds to Company set forth in the table below. See "Sale of Shares to Brunswick." SEE "RISK FACTORS" BEGINNING ON PAGE 9 FOR A DISCUSSION OF CERTAIN RISK FACTORS THAT SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS OF THE COMMON STOCK OFFERED HEREBY. ------------------ THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

==================================================================================================================== UNDERWRITING PRICE TO DISCOUNTS AND PROCEEDS TO PROCEEDS TO PUBLIC(1) COMMISSIONS(2) COMPANY(3) SELLING STOCKHOLDERS - -------------------------------------------------------------------------------------------------------------------- Per Share $ $ $ $ - -------------------------------------------------------------------------------------------------------------------- Total(4) $ $ $ $ ====================================================================================================================

(1) The shares to be sold to Brunswick will be at a price per share equal to the Per Share Proceeds to Company. (2) No underwriting discounts or commissions will be paid or received by the Underwriters on any sale of shares of Common Stock to Brunswick. See "Sale of Shares to Brunswick." For information regarding indemnification of the several Underwriters, see "Underwriting." (3) Before deducting expenses payable by the Company estimated at $2,500,000. (4) The Selling Stockholders have granted the Underwriters a 30-day option to purchase up to 437,905 additional shares of Common Stock solely to cover over-allotments, if any. See "Underwriting." If such option is exercised in full, the total Price to the Public, Underwriting Discounts and Commissions, and Proceeds to Selling Stockholders will be $ , $ , and $ , respectively, and the total Proceeds to Company will not change. ------------------ The shares of Common Stock being offered by the Underwriters as described herein are being offered by the several Underwriters named herein, subject to prior sale, when, as and if accepted by them and subject to certain conditions. It is expected that certificates for the shares of Common Stock offered hereby will be available for delivery on or about , 1998 at the office of Smith Barney Inc., 333 West 34th Street, New York, New York 10001. ------------------ SALOMON SMITH BARNEY WILLIAM BLAIR & COMPANY June , 1998 3 NO PERSON IS AUTHORIZED IN CONNECTION WITH ANY OFFERING MADE HEREBY TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR BY ANY UNDERWRITER. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY TO ANY PERSON IN ANY JURISDICTION IN WHICH IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION TO SUCH PERSON. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY OFFER OR SALE MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCE IMPLY THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY DATE SUBSEQUENT TO THE DATE HEREOF. TABLE OF CONTENTS

PAGE ---- Prospectus Summary.................. 3 Risk Factors........................ 8 Formation of the Company............ 21 Use of Proceeds..................... 24 Dividend Policy..................... 24 Capitalization...................... 25 Dilution............................ 26 Selected Financial Data............. 27 Management's Discussion and Analysis of Financial Condition and Results of Operations..................... 28

PAGE ---- Business............................ 33 Management.......................... 50 Principal and Selling Stockholders...................... 56 Certain Transactions................ 58 Description of Capital Stock........ 60 Shares Eligible for Future Sale..... 63 Underwriting........................ 64 Sale of Shares to Brunswick......... 65 Legal Opinions...................... 65 Experts............................. 65 Additional Information.............. 66 Index to Financial Statements....... F-1

UNTIL , 1998 (25 DAYS AFTER THE COMMENCEMENT OF THE OFFERING), ALL DEALERS EFFECTING TRANSACTIONS IN THE COMMON STOCK, WHETHER OR NOT PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS. THIS IS IN ADDITION TO THE OBLIGATIONS OF DEALERS TO DELIVER A PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR SUBSCRIPTIONS. CERTAIN PERSONS PARTICIPATING IN THE OFFERING MAY ENGAGE IN TRANSACTIONS THAT STABILIZE, MAINTAIN, OR OTHERWISE AFFECT THE PRICE OF THE COMMON STOCK, INCLUDING STABILIZING BIDS, SYNDICATE COVERING TRANSACTIONS, AND THE IMPOSITION OF PENALTY BIDS. FOR A DISCUSSION OF THESE ACTIVITIES, SEE "UNDERWRITING." THIS PROSPECTUS INCLUDES TRADEMARKS OF COMPANIES OTHER THAN THE COMPANY. THESE TRADEMARKS ARE THE PROPERTY OF THEIR HOLDERS. All industry statistics referenced in this Prospectus (including those set forth under "Business -- U.S. Recreational Boating Industry") as well as statements in the Prospectus that the Company is the largest recreational boat dealer in the United States; that the Company is the nation's largest retailer of Sea Ray, Boston Whaler, and other boats manufactured by Brunswick Corporation ("Brunswick"); that Brunswick is the world's largest manufacturer of recreational boats; that the Company represented approximately 20% of all new Sea Ray boat sales and approximately 5% of all Brunswick marine product sales during calendar 1997; and that each of the Merged Companies ranks in the top 25 Sea Ray dealers in the United States are based on the belief of the Company, which takes into account the experience (averaging more than 21 years) of the Company's senior executives in the recreational boat industry and available industry data. 4 PROSPECTUS SUMMARY The following summary is qualified in its entirety by, and should be read in conjunction with, the more detailed information and the financial statements, including the notes thereto, appearing elsewhere in this Prospectus. Unless the context otherwise requires, all references to "MarineMax" mean MarineMax, Inc. prior to the effectiveness of the Mergers and Property Acquisitions (collectively, the "Combination Transactions"), and all references to the "Company" mean, as a combined company, MarineMax, Inc., the six recreational boat dealers (the "Merged Companies") acquired by MarineMax in separate merger transactions (the "Mergers"), and the property companies (the "Property Companies") acquired by MarineMax in separate contribution transactions (the "Property Acquisitions") and which own real properties used in the operations of the Merged Companies. Unless otherwise indicated, the information set forth herein assumes no exercise of the Underwriters' over-allotment option. THE COMPANY The Company is the largest recreational boat dealer in the United States in terms of revenue. Through 28 retail locations in Florida, Texas, California, Georgia, and Arizona, the Company sells new and used recreational boats, including pleasure boats (such as sport boats, sport cruisers, sport yachts, and yachts), fishing boats, bass boats, pontoon boats, and high-performance boats, with a focus on premium brands in each segment. The Company also sells related marine products, including engines, trailers, parts, and accessories. In addition, the Company arranges related boat financing, insurance, and extended service contracts; provides repair and maintenance services; and offers boat brokerage services. See "Business." The Company is the nation's largest retailer of Sea Ray, Boston Whaler, and other boats manufactured by Brunswick Corporation ("Brunswick"), which is the world's largest manufacturer of recreational boats. Sales of new Brunswick boats accounted for 84% of the Company's new boat sales in calendar 1997, which the Company believes represented approximately 20% of all new Sea Ray boat sales and approximately 5% of all Brunswick marine product sales during that period. The Company acquired five of the Merged Companies and the Property Companies on March 1, 1998 and acquired the sixth Merged Company on April 30, 1998. See "Formation of the Company." Each Merged Company is a party to a 10-year dealer agreement with Brunswick covering Sea Ray products. For the 12 months ended December 31, 1997, the Company had pro forma revenue of approximately $233,779,000, pro forma operating income of approximately $22,353,000, and pro forma net income of approximately $13,377,000 (assuming the adjustments described herein had occurred as of January 1, 1997). MarineMax itself, however, had no operations and generated no operating revenue prior to its March 1, 1998 acquisition of five of the Merged Companies. The Company's same-store sales increased by approximately 19% in calendar 1997, following 16% and 15% increases in calendar 1996 and 1995, respectively. The combination of the six Merged Companies permits the Company to capitalize on the experience and success of each of the Merged Companies in order to establish a new national standard of customer service and responsiveness in the highly fragmented retail boating industry. The Merged Companies were organized between 1946 and 1983, and each is the exclusive dealer of Sea Ray boats in its geographic market and ranks in the top 25 Sea Ray dealers in the United States. See "Formation of the Company." While the average new boat retailer generated less than $3 million in annual sales in 1997, the retail locations of the Merged Companies averaged $10 million in annual sales in 1997. As a result of the Company's emphasis on premium brand boats, the Company's average selling price for a new boat in 1997 was approximately $39,000 compared to the industry average selling price of approximately $14,000. The senior executives of the Merged Companies have an average of more than 21 years of experience in the recreational boat industry and have maintained long-term business and personal relationships with each other. The Company is adopting the best practices of the Merged Companies as appropriate to enhance its ability to attract more customers, foster an overall enjoyable boating experience, and offer boat manufacturers stable and professional retail distribution. The Company believes that its prime retail locations, extensive facilities, full range of services, MarineMax Value-Price sales approach, and emphasis on customer service and satisfaction before and after a boat sale are competitive advantages and enable it to be more responsive to the needs of existing and prospective customers. See "Business -- General." 3 5 The recreational boating industry generated approximately $19.3 billion in retail sales in 1997, including sales of new and used boats; marine products, such as engines, trailers, equipment, and accessories; and related expenditures, such as fuel, insurance, docking, storage, and repairs. Retail sales of new boats, engines, and trailers accounted for approximately $10.0 billion of such sales in 1997. The Company estimates that the boat retailing industry includes more than 4,000 boat retailers, most of which are small retailers that operate in a single market and provide varying degrees of merchandising, professional management, and customer service. Based on the knowledge, experience, and relationships of its senior executives as operators of privately owned dealers, the Company believes that many dealers are finding it increasingly difficult to make the managerial and capital commitments necessary to achieve higher customer service levels and upgrade systems and facilities as required by boat manufacturers, particularly during a period of stagnant industry growth. The Company also believes that many dealers lack an exit strategy for their owners. See "Business -- U.S. Recreational Boating Industry." The Company's executive offices are located at 18167 U.S. 19 North, Suite 499, Clearwater, Florida 33764, and its telephone number is (813) 531-1700. The Company was incorporated in the state of Delaware in January 1998. STRATEGY The Company's goal is to enhance its position as the leading operator of recreational boat dealerships. Key elements of the Company's operating and growth strategies include the following: Operating Strategies Implementing Best Practices. The Company is implementing the "best practices" of each of the Merged Companies as appropriate throughout its dealerships. In particular, the Company is phasing in throughout its dealerships the MarineMax Value-Price sales approach, recently implemented at certain of its dealerships. Under the MarineMax Value-Price approach, the Company sells its boats at posted prices, generally representing a discount from the manufacturer's suggested retail price, without further price negotiation, thereby eliminating the anxieties of price negotiations that occur in most boat purchases. In addition, the Company will adopt, where beneficial, the best practices of each Merged Company in terms of location design and layout, product purchases, maintenance and repair services (including extended service hours and mobile or dockside services), product mix, employee training, and customer education and services. Achieving Operating Efficiencies and Synergies. The Company plans to increase the operating efficiencies of and achieve certain synergies among its dealerships in order to enhance internal growth and profitability. The Company is centralizing certain administrative functions at the corporate level, such as accounting, finance, insurance coverage, employee benefits, marketing, strategic planning, legal support, purchasing and distribution, and management information systems. Centralization of these functions should reduce duplicative expenses and permit the dealerships to benefit from a level of scale and expertise that would otherwise be unavailable to each dealership individually. The Company expects to realize cost savings from reduced inventory carrying costs as a result of purchasing boat inventories on a national level and directing boats to dealership locations that can more readily sell such boats; lower financing costs through new credit facilities; and volume purchase discounts and rebates for certain marine products, supplies, and advertising. Emphasizing Customer Satisfaction and Loyalty. The Company seeks to achieve a high level of customer satisfaction and establish long-term customer loyalty by creating an overall enjoyable boating experience beginning with the negotiation-free purchase process. The Company further enhances and simplifies the purchase process by offering financing and insurance at its retail locations with competitive terms and streamlined turnaround. The Company provides the customer with a thorough in-water orientation of boat operation as well as ongoing boat safety, maintenance, and use seminars and demonstrations for the customer's entire family. The Company continues its customer service after the sale by leading and sponsoring Getaways! group boating trips to various destinations, rendezvous gatherings, and on-the-water organized events to provide its customers with pre-arranged opportunities to enjoy the pleasures of the boating lifestyle. 4 6 The Company also endeavors to provide superior maintenance and repair services, often at the customer's wet slip and with extended service department hours, to minimize the hassles of boat maintenance. Operating with Decentralized Management. The Company has adopted a decentralized approach to the operational management of its dealerships. The decentralized management approach takes advantage of the extensive experience of local managers, enabling them to implement policies and make decisions, including the appropriate product mix, based on the needs of the local market. Local management authority also fosters responsive customer service and promotes long-term community and customer relationships. In addition, the centralization of certain administrative functions at the corporate level enhances the ability of local managers to focus their efforts on day-to-day dealership operations. Utilizing Technology Throughout Operations. The Company believes that its management information system, which was being utilized by each Merged Company prior to the Mergers and was developed over the past six years through cooperative efforts with a common vendor, enhances the Company's ability to integrate successfully the operations of the Merged Companies and future acquired dealers. The system facilitates the interchange of information and enhances cross-selling opportunities throughout the Company. The system integrates each level of operations on a Company-wide basis, including purchasing, inventory, receivables, financial reporting and budgeting, and sales management. The system also enables management to monitor each retail location's operations on a daily basis in order to identify quickly areas requiring additional focus. Growth Strategies Pursuing Strategic Acquisitions. The Company intends to capitalize upon the significant consolidation opportunities available in the highly fragmented recreational boat dealer industry by acquiring additional dealers and improving their performance and profitability through the implementation of the Company's operating strategies. The primary acquisition focus will be on well-established, high-end recreational boat dealers in geographic markets not currently served by the Company, particularly geographic markets with strong boating demographics, such as the coastal states and the Great Lakes region. The Company also may seek to acquire boat dealers that, while located in attractive geographic markets, have not been able to realize favorable market share or profitability and that can benefit substantially from the Company's systems and operating strategies. The Company may expand its range of product lines and its market penetration by acquiring dealers that distribute recreational boat product lines different from those currently offered by the Company. The Company believes it will be regarded as an attractive acquiror by boat dealers because of (i) the Company's historical performance and the experience and reputation of its management team within the industry; (ii) the Company's decentralized operating strategy, which enables the managers of an acquired dealer to continue their involvement in dealership operations; (iii) the ability of management and employees of an acquired dealer to participate in the Company's growth and expansion through potential stock ownership and career advancement opportunities; and (iv) the ability to offer liquidity to the owners of acquired dealers through the receipt of Common Stock or cash. The Company's acquisition strategy depends on the consent of Brunswick and possibly other manufacturers to the acquisitions of their dealers. See "Risk Factors -- Necessity for Manufacturers' Consent to Dealer Acquisitions and Market Expansion." Brunswick has agreed to cooperate in good faith with the Company and not to unreasonably withhold its consent to the acquisition by the Company each year of Sea Ray boat dealers with aggregate total revenue not exceeding 20% of the Company's revenue in its prior fiscal year to the extent such dealers desire to be acquired by the Company. Brunswick consented to the acquisition of Stovall Marine, Inc. ("Stovall") by the Company (the "Stovall Acquisition") on April 30, 1998 and agreed that the Stovall Acquisition would not count against the 20% benchmark. See "Business -- Brunswick Agreement Relating to Acquisitions." The Company has no current or pending agreements, arrangements, plans, understandings, or negotiations with respect to any material acquisitions. Opening New Facilities. The Company intends to establish additional retail facilities in its existing and new territories. The Company believes that the demographics of its existing geographic territories support the opening of additional facilities and has opened two new retail locations since the Mergers that occurred in March 1998. The Company also plans to reach new customers by expanding various innovative retail formats developed by the Merged Companies, such as mall stores and floating retail facilities. The Company currently 5 7 operates one mall store and four floating retail facilities, and plans to open a new mall store in 1998. Costs to open a new retail facility depend on many factors, including whether the facility is leased or purchased and the location of the facility. The Company has no current or pending plans, agreements, arrangements, or negotiations with respect to opening any additional new facilities. The Company's Dealer Agreements with Brunswick require Brunswick's consent to open, close, or change retail locations that sell Sea Ray products, which consent cannot be unreasonably withheld, and other dealer agreements generally contain similar provisions. See "Risk Factors -- Risks Related to Internal Growth and Operating Strategies; Management of Growth" and "Business -- Dealer Agreements With Brunswick." Offering Additional Product Lines and Services. The Company plans to offer throughout its existing and acquired dealerships product lines that have been offered only at certain of its locations. The Company also may obtain additional product lines through the acquisition of distribution rights directly from manufacturers and the acquisition of dealerships with distribution rights. In addition, the Company plans to increase its used boat sales and boat brokerage services through an increased emphasis on these activities and cooperative efforts among its dealerships. The Company also plans to offer enhanced financing and insurance packages designed to better serve customers and thereby increase sales and improve profitability. FORMATION AND STRUCTURE OF THE COMPANY MarineMax was founded in January 1998 to acquire five businesses that operated in the recreational boat industry under their principal owners for an average of more than 21 years. MarineMax itself, however, conducted no operations until the acquisition of five of the Merged Companies on March 1, 1998. The Company acquired the sixth Merged Company on April 30, 1998. See "Formation of the Company." The Merged Companies consist of Bassett Boat Company of Florida (which operates four retail locations in Florida); Louis DelHomme Marine (which operates seven retail locations in Texas); Gulfwind USA, Inc. (which operates three retail locations in Florida); Gulfwind South, Inc. (which operates two retail locations in Florida); Harrison's Boat Center, Inc. and Harrison's Marine Centers of Arizona, Inc. (which operate eight retail locations in California and Arizona); and Stovall Marine, Inc. (which operates four retail locations in Georgia). The Merged Companies are continuing their operations as wholly owned subsidiaries of the Company. See "Formation of the Company -- The Merged Companies and the Property Companies." The senior executives of the Merged Companies have entered into five-year, full-time employment agreements with the Company, and senior executives constitute a majority of the Company's Board of Directors and executive officers. The senior executive of each Merged Company will continue to be responsible for the day-to-day operations of such Merged Company. See "Formation of the Company," "Management," "Principal and Selling Stockholders," and "Certain Transactions." THE OFFERING Common Stock offered by the Company........................... 3,515,824 shares(1) Common Stock offered by the Selling Stockholders.............. 1,264,745 shares(2) Common Stock to be outstanding after the Offering................ 13,200,000 shares(3) Use of proceeds................... To repay indebtedness, to enhance the Company's management information system, and to provide working capital and funds for future acquisitions. See "Use of Proceeds." Proposed New York Stock Exchange symbol................. HZO - --------------- (1) Includes 1,861,200 shares being offered to Brunswick. See "Sale of Shares to Brunswick." (2) Assumes the Underwriters' over-allotment option is not exercised. See "Underwriting." (3) Does not include (a) 1,980,000 shares of Common Stock reserved for issuance under the Company's 1998 Incentive Stock Plan, or (b) 500,000 shares of Common Stock reserved for issuance under the Company's 1998 Employee Stock Purchase Plan. See "Management -- 1998 Incentive Stock Plan" and "Management -- Employee Stock Purchase Plan." RISK FACTORS The Common Stock offered hereby involves a high degree of risk. See "Risk Factors." 6 8 SUMMARY CONSOLIDATED FINANCIAL DATA (Dollars in thousands, except per share data)

NINE MONTHS ENDED YEAR ENDED DECEMBER 31, SEPTEMBER 30, ----------------------------------------- ----------------------------------- PRO FORMA AS ADJUSTED 1993 1994 1995 1996 1996 1997 1997(1) -------- -------- -------- -------- -------- --------- ------------ STATEMENT OF OPERATIONS DATA: Revenue................................. $111,543 $127,729 $152,889 $175,060 $136,325 $ 169,675 $ 188,419 Cost of sales........................... 86,799 98,295 116,896 132,641 101,993 127,418 141,287 -------- -------- -------- -------- -------- --------- ---------- Gross profit............................ 24,745 29,434 35,992 42,419 34,332 42,257 47,131 Selling, general, and administrative expenses............... 19,637 22,925 28,374 34,449 22,035 25,723 25,032 Settlement obligation(3)................ -- -- -- -- -- -- -- -------- -------- -------- -------- -------- --------- ---------- Income (loss) from operations........... 5,108 6,510 7,619 7,970 12,297 16,535 22,099 Interest expense, net................... 1,140 392 949 1,268 1,006 1,381 353 -------- -------- -------- -------- -------- --------- ---------- Income (loss) before tax provision......................... 3,968 6,118 6,670 6,702 11,290 15,154 21,746 Income tax provision (benefit).......... 1 1 (49) 21 527 411 8,430 -------- -------- -------- -------- -------- --------- ---------- Net income (loss)....................... $ 3,967 $ 6,117 $ 6,719 $ 6,681 $ 10,763 $ 14,743 $ 13,316 ======== ======== ======== ======== ======== ========= ========== Net income (loss) per share: Basic............................................................ $ 1.89 $ 1.01 ========= ========== Weighted average number of shares: Basic...................................................... 7,799,844 13,200,000 ========= ========== OTHER DATA: Number of stores(4)..................... 15 17 20 19 19 20 Sales per store(5)...................... $ 8,004 $ 8,353 $ 8,706 $ 9,438 $ 7,113 $8,952 Same-store sales growth(6).............. 12% 12% 15% 16% 8% 22%

SIX MONTHS ENDED MARCH 31, ---------------------------------- PRO FORMA AS ADJUSTED 1997 1998 1998(2) ------- --------- ------------ STATEMENT OF OPERATIONS DATA: Revenue................................. $87,779 $ 103,510 $ 111,154 Cost of sales........................... 68,531 80,438 86,662 ------- --------- ---------- Gross profit............................ 19,247 23,072 24,493 Selling, general, and administrative expenses............... 20,075 24,032 20,796 Settlement obligation(3)................ -- 15,000 15,000 ------- --------- ---------- Income (loss) from operations........... (828) (15,960) (11,303) Interest expense, net................... 525 1,000 165 ------- --------- ---------- Income (loss) before tax provision......................... (1,353) (16,961) (11,468) Income tax provision (benefit).......... (485) (4,581) (4,506) ------- --------- ---------- Net income (loss)....................... $ (868) $ (12,380) $ (6,962) ======= ========= ========== Net income (loss) per share: Basic...... $ (1.54) $ (0.53) ========= ========== Weighted average number of shares: Basic 8,036,947 13,200,000 ========= ========== OTHER DATA: Number of stores(4)..................... 21 24 Sales per store(5)...................... $ 4,592 $ 5,149 Same-store sales growth(6).............. 24% 19%

MARCH 31, 1998 ------------------------------------------ PRO FORMA ACTUAL PRO FORMA(7) AS ADJUSTED(8) -------- ------------ -------------- BALANCE SHEET DATA: Working capital............................................. $ 1,191 $ 1,215 $ 39,171 Total assets................................................ 108,275 124,171 130,348 Long-term debt (including current portion).................. 10,657 10,657 1,899 Total stockholders' equity.................................. 4,863 11,066 57,612

- --------------- (1) Pro forma as adjusted 1997 gives effect to (a) the Stovall Acquisition, (b) certain pro forma adjustments to the historical financial statements, and (c) the consummation of the Offering. See the Pro Forma Consolidated Financial Statements and notes thereto for a description of the pro forma adjustments. (2) Pro forma as adjusted 1998 gives effect to (a) the Stovall Acquisition, (b) certain pro forma adjustments to the historical financial statements, and (c) the consummation of the Offering. See the Pro Forma Consolidated Financial Statements and notes thereto for a description of the pro forma adjustments. (3) Consists of Brunswick settlement obligation. See "Risk Factors -- Necessity for Manufacturers' Consent to Dealer Acquisitions and Market Expansion." (4) Includes only those stores open at period end. (5) Includes only those stores open for the entire preceding 12-month period. (6) New stores are included in the comparable base at the beginning of the store's thirteenth month of operations. (7) The pro forma balance sheet has been adjusted to give effect to (a) the Stovall Acquisition, and (b) certain pro forma adjustments to the historical financial statements. See the Pro Forma Consolidated Financial Statements and notes thereto for a description of the pro forma adjustments. (8) Adjusted to reflect the consummation of the Offering and the application of the estimated net proceeds to the Company therefrom. See "Use of Proceeds" and the Pro Forma Consolidated Financial Statements and notes thereto for a further description of the application of the net proceeds. 7 9 RISK FACTORS An investment in shares of Common Stock offered hereby involves a high degree of risk. Prospective investors should consider carefully the following risk factors, in addition to the other information contained in this Prospectus, in evaluating an investment in shares of Common Stock offered hereby. This Prospectus contains forward-looking statements that involve risks and uncertainties and address, among other things, the Company's acquisition and expansion strategy, use of proceeds, capital expenditures, liquidity, third-party contractual arrangements, cost-reduction strategy, integration of acquired companies, and product demand. Actual results may differ materially from those discussed in forward-looking statements as a result of various factors, including those set forth below. RECENTLY COMBINED OPERATIONS; RISKS OF INTEGRATION MarineMax was founded in January 1998 to acquire five businesses that operated in the recreational boat industry under their principal owners for an average of more than 21 years, but MarineMax itself conducted no operations and generated no sales or revenue until the acquisitions of five of the Merged Companies on March 1, 1998. The Merged Companies operated independently prior to the Mergers, and the Company may not be able to integrate these businesses successfully on an economic basis. The pro forma consolidated financial results of MarineMax cover periods when MarineMax and the Merged Companies were not under common management or control and are not necessarily indicative of the results that would have been achieved if MarineMax and the Merged Companies had been operated on an integrated basis or the results that may be realized on a consolidated basis in the future. The Company had revenue of approximately $22.2 million for the month of March 1998. The success of the Company will depend, in part, on the Company's ability to integrate the operations of the Merged Companies and other dealerships it acquires, including centralizing certain functions to achieve cost savings and pursuing programs and processes that promote cooperation and the sharing of opportunities and resources among its dealerships. The Company's senior executives have operated independently in the recreational boat industry and have been assembled only recently as a management team. Management may not be able to oversee the combined entity efficiently or to implement effectively the Company's growth and operating strategies. To the extent that the Company is able to implement successfully its acquisition strategy, the resulting growth of the Company will place significant additional demands on the Company's management and infrastructure. The Company's failure to implement successfully its strategies or operate effectively the combined entity could have a material adverse effect on the Company's business, financial condition, and results of operations. These effects could include lower revenue, higher cost of sales, increased selling, general, and administrative expenses, and reduced margins on a consolidated basis. See "Formation of the Company," "Business -- Strategy," and "Management." RELIANCE ON BRUNSWICK AND OTHER KEY MANUFACTURERS Approximately 84% of the Company's revenue in calendar 1997 was derived from sales of products manufactured by Brunswick, including 83% from Brunswick's Sea Ray division. The remainder of the Company's revenue from new boat sales in calendar 1997 was derived from sales of products from a limited number of other manufacturers, none of which accounted for more than 10% of the Company's revenue. The Company's success depends to a significant extent on the continued popularity and reputation for quality of the boating products of its manufacturers, particularly Brunswick's Sea Ray boat lines. In addition, any adverse change in the financial condition, production efficiency, product development, and management and marketing capabilities of the Company's manufacturers, particularly Brunswick's Sea Ray division given the Company's reliance on Sea Ray, would have a substantial impact on the Company's business. To ensure adequate inventory levels to support the Company's expansion, it may be necessary for Brunswick and other manufacturers to increase production levels or allocate a greater percentage of their production to the Company. In the event that the operations of Brunswick or the Company's other manufacturers were interrupted or discontinued, the Company could experience inventory shortfalls, disruptions, or delays with respect to unfilled purchase orders then outstanding. Although the Company believes that adequate alternate sources would be available that could replace any manufacturer other than Brunswick as a product source, 8 10 there can be no assurance that such alternate sources will be available at the time of any such interruption or that alternative products will be available at comparable quality and prices. Through the Merged Companies, the Company maintains Dealer Agreements with Brunswick covering Sea Ray products. The Dealer Agreement with each of the Merged Companies has a 10-year term and provides for the lowest product prices charged by the Sea Ray division of Brunswick from time to time to other domestic Sea Ray dealers, subject to the dealer meeting all the requirements and conditions of Sea Ray's applicable programs and the right of Brunswick in good faith to charge lesser prices to other dealers to meet existing competitive circumstances, for unusual and non-ordinary business circumstances, or for limited duration promotional programs. The agreements do not give the Company the exclusive right to sell Sea Ray product lines within any particular territory or restrict the Company from selling competing products. See "Business -- Dealer Agreements With Brunswick." As is typical in the industry, the Company deals with each of its manufacturers, other than the Sea Ray division of Brunswick, pursuant to renewable dealer agreements. These agreements do not contain any contractual provisions concerning product pricing or required purchasing levels. Pricing is generally established on a model year basis, but is subject to change at the manufacturer's sole discretion. In the event these arrangements were to change or terminate for any reason, including changes in competitive, regulatory, or marketing practices, the Company's business, financial condition, and results of operations could be adversely affected. In addition, the timing, structure, and amount of manufacturer sales incentives and rebates could impact the timing and profitability of the Company's sales. See "Risk Factors -- Boat Manufacturers' Control Over Dealers" and "Business -- Operations -- Suppliers and Inventory Management." Brunswick's dealer agreement with each Merged Company by its terms required the dealer to obtain Brunswick's consent to any change in the ownership of the dealer. Brunswick and the Company disputed the applicability of the change in control provisions to the March 1998 Mergers. In order to avoid a long, costly, and disruptive dispute, the Company and Brunswick entered into a Settlement Agreement on March 12, 1998 under which Brunswick consented to the changes in the ownership of five of the Merged Companies resulting from the Mergers and the Company agreed to pay Brunswick $15.0 million, together with accrued interest, no later than December 31, 1998. In April 1998, Brunswick consented to the Stovall Acquisition. In the absence of the Settlement Agreement, Brunswick could have terminated the dealer agreement with each Merged Company. As a result of the Settlement Agreement, Brunswick will no longer have the right to institute a legal action to terminate the dealer agreements as a result of a change in control. See "Formation of the Company -- The Mergers and Property Acquisitions." IMPACT OF GENERAL ECONOMIC CONDITIONS; DISCRETIONARY CONSUMER SPENDING; AND CHANGES IN TAX LAWS The Company's operations depend upon a number of factors relating to or affecting consumer spending for luxury goods, such as recreational boats. The Company's operations may be adversely affected by unfavorable local, regional, or national economic developments or by uncertainties regarding future economic prospects that reduce consumer spending in the markets served by the Company. Consumer spending on luxury goods can also be adversely affected as a result of declines in consumer confidence levels, even if prevailing economic conditions are favorable. In an economic downturn, consumer discretionary spending levels generally decline, often resulting in disproportionately large reductions in the sale of luxury goods. Similarly, rising interest rates could have a negative impact on consumers' ability or willingness to finance boat purchases, which could also adversely affect the ability of the Company to sell its products. Local influences, such as corporate downsizing and military base closings, also could adversely affect the Company's operations in certain markets. There can be no assurance that the Company could maintain its profitability during any such period of adverse economic conditions or low consumer confidence. Changes in federal and state tax laws, such as an imposition of luxury taxes on certain new boat purchases, also could influence consumers' decisions to purchase products offered by the Company and could have a negative effect on the Company's sales. For example, during 1991 and 1992 the federal government imposed a luxury tax on new recreational boats with sales prices in excess of $100,000, which coincided with a sharp decline in boating industry sales from a high of more than $17.9 billion in the late 1980s to a low of $10.3 billion in 1992. See "Business -- U.S. Recreational Boating Industry." 9 11 INDUSTRY FACTORS The recreational boating industry is cyclical and has been stagnant in terms of overall revenue growth over the last 10-year period. General economic conditions, consumer spending patterns, federal tax policies, and the cost and availability of fuel can impact overall boat purchases. See "Risk Factors -- Impact of General Economic Conditions; Discretionary Consumer Spending; and Changes in Tax Laws" and "Risk Factors -- Fuel Prices and Supply." Industry sources attribute the lack of increase in overall boat purchases to increased competition from other recreational activities, perceived hassles of boat ownership, and relatively poor customer service and education throughout the retail boat industry. Although the Company's strategy addresses many of these industry factors and the Company has achieved significant growth during the period of stagnant industry growth, there can be no assurance that the cyclical nature of the recreational boating industry or the lack of industry growth will not adversely affect the Company's business, financial condition, or results of operations in the future. See "Business -- U.S. Recreational Boating Industry." RISKS ASSOCIATED WITH ACQUISITION STRATEGY The Company intends to grow significantly through the acquisition of additional recreational boat dealers. This strategy will entail reviewing and potentially reorganizing acquired business operations, corporate infrastructure and systems, and financial controls. Unforeseen expenses, difficulties, and delays frequently encountered in connection with rapid expansion through acquisitions could inhibit the Company's growth and negatively impact profitability. There can be no assurance that suitable acquisition candidates will be identified, that acquisitions of such candidates will be consummated, or that the operations of any acquired businesses will be successfully integrated into the Company's operations and managed profitably without substantial costs, delays, or other operational or financial difficulties. In addition, increased competition for acquisition candidates may increase purchase prices for acquisitions to levels beyond the Company's financial capability or to levels that would not result in the returns required by the Company's acquisition criteria. As of the date of this Prospectus, the Company has no current or pending agreements, arrangements, plans, understandings, or negotiations with respect to any material acquisitions. The Company may issue Common Stock or incur substantial indebtedness in making future acquisitions. See "Risk Factors -- Future Capital Needs; Debt Service Requirements; Possible Dilution Through Issuance of Stock," "Formation of the Company -- The Mergers and Property Acquisitions," and "Certain Transactions -- The Mergers and Property Acquisitions -- Terms of the Agreements." The size, timing, and integration of any future acquisitions may cause substantial fluctuations in operating results from quarter to quarter. Consequently, operating results for any quarter may not be indicative of the results that may be achieved for any subsequent quarter or for a full fiscal year. These fluctuations could adversely affect the market price of the Common Stock. See "Risk Factors -- No Prior Market and Possible Volatility of Stock Price." The Company's ability to continue to grow through the acquisition of additional dealers will depend upon (i) the availability of suitable acquisition candidates at attractive purchase prices, (ii) the Company's ability to compete effectively for available acquisition opportunities, and (iii) the availability of funds or Common Stock with a sufficient market price to complete the acquisitions. See "Business -- Strategy." The Company's future growth through acquisitions also will depend upon its ability to obtain the requisite manufacturer approvals. Alternatively, one or more manufacturers may attempt to impose further restrictions on the Company in connection with their approval of acquisitions. See "Risk Factors -- Necessity for Manufacturers' Consent to Dealer Acquisitions and Market Expansion." NECESSITY FOR MANUFACTURERS' CONSENT TO DEALER ACQUISITIONS AND MARKET EXPANSION Brunswick's dealer agreement with each Merged Company by its terms required the dealer to obtain Brunswick's consent to any change in the ownership of the dealer. Brunswick and the Company disputed the applicability of the change in control provisions to the March 1998 Mergers. In order to avoid a long, costly, and disruptive dispute, the Company and Brunswick entered into a Settlement Agreement on March 12, 1998 under which Brunswick consented to the changes in the ownership of five of the Merged Companies resulting from the Mergers and the Company agreed to pay Brunswick $15.0 million, together with accrued interest, no 10 12 later than December 31, 1998. In April 1998, Brunswick consented to the Stovall Acquisition. See "Formation of the Company -- The Mergers and Property Acquisitions." The Company may be required to obtain the consent of Brunswick and various other manufacturers prior to the acquisition of other dealers. In determining whether to approve acquisitions, manufacturers may consider many factors, including the financial condition and ownership structure of the Company. Further, manufacturers may impose conditions on granting their approvals for acquisitions, including a limitation on the number of such manufacturers' dealers that may be acquired by the Company. The Company's ability to meet manufacturers' requirements for approving future acquisitions will have a direct bearing on the Company's ability to complete acquisitions and effect its growth strategy. There can be no assurance that a manufacturer will not terminate its dealer agreement, refuse to renew its dealer agreement, refuse to approve future acquisitions, or take other action that could have a material adverse effect on the Company's acquisition program. The Company's growth strategy also entails expanding its product lines and geographic scope by obtaining additional distribution rights from its existing and new manufacturers. While the Company believes it will be successful in obtaining such distribution rights, there can be no assurance that such distribution rights will be granted to the Company or that it can obtain suitable alternative sources of supply if the Company is unable to obtain such distribution rights. The inability of the Company to expand its product lines and geographic scope by obtaining additional distribution rights could have a material adverse effect on the Company's business, financial condition, and results of operations. On April 28, 1998, the Company and Brunswick entered into an agreement providing for Brunswick to cooperate in good faith and not to unreasonably withhold its consent to the acquisitions each year by the Company of Sea Ray boat dealers with aggregate total revenue not exceeding 20% of the Company's revenue in its prior fiscal year. The Stovall Acquisition will not count against the 20% benchmark. Any acquisitions in excess of the 20% benchmark will be at Brunswick's discretion. In the event that the Company's sales of Sea Ray boats exceed 49% of the sales of Sea Ray boats by all Sea Ray boat dealers (including the Company) in any fiscal year of Brunswick, the agreement provides that Company and Brunswick will negotiate in good faith the standards for acquisitions of Sea Ray boat dealers by the Company during Brunswick's next succeeding fiscal year, but that Brunswick may grant or withhold its consent to any such acquisition in its sole discretion for as long as the Company's Sea Ray boat sales exceed the 49% benchmark. BOAT MANUFACTURERS' CONTROL OVER DEALERS Historically, boat manufacturers, including Brunswick, have exercised significant control over their dealers, restricted them to specified locations, and retained approval rights over changes in management and ownership. The continuation of the Company's dealer agreements with most manufacturers, including Brunswick, is contingent upon, among other things, the Company's achieving stated goals for customer satisfaction ratings and market share penetration in the market served by the applicable dealership. Failure to meet the customer satisfaction and market share goals set forth in any dealer agreement could result in the imposition of additional conditions in subsequent dealer agreements, termination of such dealer agreement by the manufacturer, limitations on boat inventory allocations, reductions in reimbursement rates for warranty work performed by the dealer, or denial of approval of future acquisitions. See "Business -- Dealer Agreements With Brunswick." The Company's dealer agreements with manufacturers, including Brunswick, generally do not give the Company the exclusive right to sell those manufacturers' products within a given geographical area. Accordingly, a manufacturer, including Brunswick, could authorize another dealer to start a new dealership in proximity to one or more of the Company's locations, or an existing dealer could move a dealership to a location that would be directly competitive with the Company. Such an event could have a material adverse effect on the Company and its operations. See "Business -- Dealer Agreements With Brunswick." The Company's dealer agreements, including those with Brunswick, provide for termination for a variety of causes. The Company believes that it has been and is in material compliance with all of its dealer agreements. The Company currently believes that it will be able to renew all of the dealer agreements upon 11 13 expiration, but no such assurance can be given. See "Business -- Operations -- Suppliers and Inventory Management" and "Business -- Dealer Agreements With Brunswick." Each dealer agreement with Brunswick requires the dealer to (i) promote, display, advertise, and sell Sea Ray boats at each of its retail locations in accordance with the agreement and applicable laws; (ii) purchase and maintain sufficient inventory of current Sea Ray boats to meet the reasonable demand of customers at each of its locations and to meet the minimum inventory requirements applicable to all Sea Ray dealers; (iii) maintain at each retail location, or at another acceptable location, a service department to service Sea Ray boats promptly and professionally and to maintain parts and supplies to service Sea Ray boats properly on a timely basis; (iv) perform all necessary installation and inspection services prior to delivery to purchasers and perform post-sale services of all Sea Ray products sold by the dealer or brought to the dealer for service; (v) furnish purchasers with Sea Ray's limited warranty on new products and with information and training as to the sale and proper operation and maintenance of Sea Ray boats; (vi) assist Sea Ray in performing any product defect and recall campaigns; (vii) maintain complete product sales and service records; (viii) achieve annual sales performance in accordance with fair and reasonable sales levels established by Sea Ray, after consultation with the dealer, based on factors such as population, sales potential, local economic conditions, competition, past sales history, number of retail locations, and other special circumstances that may affect the sale of products or the dealer, in each case consistent with standards established for all domestic Sea Ray dealers selling comparable products; (ix) provide designated financial information; (x) conduct its business in a manner that preserves and enhances the reputation of Sea Ray and the dealer for providing quality products and services; (xi) maintain the financial ability to purchase and maintain on hand required inventory levels; (xii) indemnify Sea Ray against any claims or losses resulting from the dealer's failure to meet its obligations to Sea Ray; (xiii) maintain customer service ratings sufficient to maintain Sea Ray's image in the marketplace; and (xiv) achieve within designated time periods and thereafter maintain master dealer status (which is Sea Ray's highest performance status) for the locations designated by Sea Ray and the dealer. See "Business -- Dealer Agreements With Brunswick." FUTURE CAPITAL NEEDS; DEBT SERVICE REQUIREMENTS; POSSIBLE DILUTION THROUGH ISSUANCE OF STOCK The Company's future capital requirements will depend upon the size, timing, and structure of future acquisitions and its working capital and general corporate needs. A substantial portion of the proceeds of the Offering will be applied to discharge certain liabilities of the Merged Companies and the Property Companies outstanding at the effectiveness of the Mergers and the Property Acquisitions, including $8.8 million of long-term indebtedness. To the extent that the Company finances future acquisitions in whole or in part through the issuance of Common Stock or securities convertible into or exercisable for Common Stock, existing stockholders will experience a dilution in the voting power of their Common Stock and earnings per share could be negatively impacted. The extent to which the Company will be able or willing to use the Common Stock for acquisitions will depend on the market value of its Common Stock from time to time and the willingness of potential sellers to accept Common Stock as full or partial consideration. The inability of the Company to use its Common Stock as consideration, to generate cash from operations, or to obtain additional funding through debt or equity financings in order to pursue its acquisition program could materially limit the Company's growth. Any borrowings made to finance future acquisitions or for operations could make the Company more vulnerable to a downturn in its operating results, a downturn in economic conditions, or increases in interest rates on borrowings that are subject to interest rate fluctuations. If the Company's cash flow from operations is insufficient to meet its debt service requirements, the Company could be required to sell additional equity securities, refinance its obligations, or dispose of assets in order to meet its debt service requirements. In addition, it is likely that any credit arrangements will contain financial and operational covenants and other restrictions with which the Company must comply, including limitations on capital expenditures and the incurrence of additional indebtedness. There can be no assurance that such financing will be available if and when needed by the Company or will be available on terms acceptable to the Company. The failure to obtain sufficient financing on favorable terms and conditions could have a material adverse effect on the Company's growth prospects and its business, financial condition, and results of operations. 12 14 The Company has a three-year, $105 million revolving line of credit, which the Company believes is sufficient for its anticipated needs and reflects competitive terms and conditions. Certain of the Company's assets, principally boat inventories, are pledged to secure the line of credit and other debt. While the Company believes it will continue to obtain adequate financing from lenders, there can be no assurance that such financing will be available to the Company. See "Management's Discussion and Analysis of Financial Condition and Results of Operations -- Liquidity and Capital Resources" and "Business -- Strategy." The Company does not itself incur credit risk in connection with its participation in financing the boat purchases of its customers. Instead, the Company originates these contracts for sale to independent financial institutions that provide credit for the Company's boat purchasers in a timely and efficient manner and at competitive rates in accordance with existing pre-sale agreements between the Company and such financial institutions. RISKS RELATED TO INTERNAL GROWTH AND OPERATING STRATEGIES; MANAGEMENT OF GROWTH In addition to pursuing growth by acquiring boat dealers, the Company intends to continue to pursue a strategy of growth through opening new retail locations and offering new products in its existing and new territories. Accomplishing these goals for expansion will depend upon a number of factors, including the identification of new markets in which the Company can obtain distribution rights to sell its existing or additional product lines, the Company's financial capabilities, the hiring, training, and retention of qualified personnel, and the timely integration of new retail locations into existing operations. The strategy of growth through opening new retail locations will further depend upon the Company's ability (i) to obtain the reliable data necessary to determine the size and product preferences of such potential markets in which the Company believes it can obtain adequate market penetration at favorable operating margins without the acquisition of an existing dealer, and (ii) to locate or construct suitable facilities at a reasonable cost in those new markets. Costs to open a new retail facility depend on many factors, including whether the facility is leased or purchased and the location of the facility. The Company has no current or pending plans, agreements, arrangements, or negotiations with respect to opening any additional new facilities. The Company's Dealer Agreements with Brunswick require Brunswick's consent to open, close, or change retail locations to sell Sea Ray products, which consent cannot be unreasonably withheld, and other dealer agreements generally contain similar provisions. See "Business -- Dealer Agreements With Brunswick." There can be no assurance that the Company will be able to open and operate new retail locations or introduce new product lines on a timely or profitable basis. Moreover, the costs associated with opening new retail locations or introducing new product lines may adversely affect the Company's profitability. As a result of these growth strategies, the Company expects that management will expend significant time and effort in opening and acquiring new retail locations and introducing new products. There can be no assurance that the Company's systems, procedures, controls, or financial resources will be adequate to support the Company's expanding operations. The inability of the Company to manage its growth effectively could have a material adverse effect on the Company's business, financial condition, and results of operations. The Company's planned growth also will impose significant added responsibilities on members of senior management and require it to identify, recruit, and integrate additional senior level managers. There can be no assurance that suitable additions to management can be identified, hired, or retained. See "Risk Factors -- Necessity for Manufacturers' Consent to Dealer Acquisitions and Market Expansion" and "Business -- Strategy." IMPACT OF SEASONALITY AND WEATHER ON OPERATIONS The Company's business, as well as the entire recreational boating industry, is highly seasonal, with seasonality varying in different geographic markets. During the two-year period ended December 31, 1997, the average net sales for the quarterly periods ended March 31, June 30, September 30, and December 31 represented 23%, 31%, 25%, and 21%, respectively, of the Company's average annual net sales. With the exception of Florida, the Company generally realizes significantly lower sales in the quarterly period ending December 31 with boat sales generally improving in January with the onset of the public boat and recreation 13 15 shows. The Company's current operations are concentrated in the more temperate regions of the United States, and its business could become substantially more seasonal if it acquires dealers that operate in colder regions of the United States. The Company's business is also significantly affected by weather patterns, which may adversely impact the Company's operating results. For example, drought conditions or reduced rainfall levels, as well as excessive rain, may force boating areas to close or render boating dangerous or inconvenient, thereby curtailing customer demand for the Company's products. Although the Company's geographic diversity and its future geographic expansion will reduce the overall impact on the Company of adverse weather conditions in any one market area, such conditions will continue to represent potential material adverse risks to the Company and its future operating performance. Many of the Company's dealerships sell boats to customers for use on reservoirs, thereby subjecting the Company's business to the continued viability of these reservoirs for boating use. As a result of the foregoing and other factors, the Company's operating results in some future quarters could be below the expectations of stock market analysts and investors. In such event, there could be an immediate and significant adverse effect on the trading price of the Common Stock. See "Risk Factors -- No Prior Market and Possible Volatility of Stock Price," "Management's Discussion and Analysis of Financial Condition and Results of Operations -- Quarterly Data and Seasonality," and "Business -- Seasonality." COMPETITION The Company operates in a highly competitive environment. In addition to facing competition generally from non-boating recreation businesses seeking to attract discretionary spending dollars, the recreational boat industry itself is highly fragmented, resulting in intense competition for customers, product distribution rights, and suitable retail locations, particularly on or near waterways. Such competition is intensified during periods of stagnant industry growth, such as currently exists. The Company competes primarily with single-location boat dealers and, with respect to sales of marine parts, accessories, and equipment, with national specialty marine parts and accessories stores, catalog retailers, sporting goods stores, and mass merchants. Competition among boat dealers is based on the quality of available products, the price and value of the products, and attention to customer service. There is significant competition both within markets currently being served by the Company and in new markets that the Company may enter. The Company competes in each of its markets with retailers of brands of boats and engines not sold by the Company in that market. In addition, several of the Company's competitors, especially those selling marine equipment and accessories, are large national or regional chains that have substantial financial, marketing, and other resources. Private sales of used boats represent an additional source of competition. See "Business -- Competition." INCOME FROM FINANCING, INSURANCE, AND EXTENDED SERVICE CONTRACTS A portion of the Company's income results from referral fees derived from the placement of customer financing, insurance products, and extended service contracts (collectively, "F&I products"), the most significant component of which is the participation and other fees resulting from the Company's sale of customer financing contracts. The Company does not act as an insurance broker or agent nor does it issue insurance policies on behalf of insurers. During 1997, F&I products accounted for approximately 2.3% of revenue. The availability of financing for the Company's boat purchasers and the level of participation and other fees received by the Company in connection with such financing depend on the particular agreement between the Company and the lender. These lenders may impose terms in their boat financing arrangements with the Company that may be unfavorable to the Company or its customers, resulting in reduced demand for its customer financing programs and lower participation and other fees. The reduction of profit margins on sales of F&I products or the lack of demand for or the unavailability of these products could have a material adverse effect on the Company's business, financial condition, and results of operations. Furthermore, under optional extended service contracts with customers, the Company may experience significant warranty claims that, in the aggregate, may be material to the Company's business. See "Business -- Products and Services -- F&I Products." 14 16 DEPENDENCE ON KEY PERSONNEL The Company believes its success depends, in large part, upon the continuing efforts and abilities of its key management personnel, including William H. McGill Jr., Richard R. Bassett, Louis R. DelHomme Jr., Richard C. LaManna Jr., and Paul Graham Stovall, each of whom is a director and officer of the Company and the senior executive of one of the Merged Companies. Although the Company has a five-year employment agreement with each of these members of key management, the Company cannot assure that such individuals will remain with the Company throughout the term of the agreements, or thereafter. As a result of the Company's decentralized operating strategy, the Company also relies on these individuals and their management teams to continue the operations of the Merged Companies. In addition, the Company likely will depend on the senior management of any significant dealers it acquires in the future. The loss of the services of one or more of these key employees before the Company is able to attract and retain qualified replacement personnel could adversely affect the Company's business. The Company maintains a key-man life insurance policy on Mr. McGill in the amount of $6.0 million. See "Management." PRODUCT AND SERVICE LIABILITY RISKS Products sold or serviced by the Company may expose it to potential liability for personal injury or property damage claims relating to the use of those products. Historically, the resolution of product liability claims has not materially affected the Company. Manufacturers of the products sold by the Company generally maintain product liability insurance. The Company also maintains third-party product liability insurance that it believes to be adequate. There can be no assurance, however, that the Company will not experience claims that are not covered by or that are in excess of its insurance coverage. The institution of any significant claims against the Company could adversely affect the Company's business, financial condition, and results of operations as well as its business reputation with potential customers. See "Business -- Product Liability." IMPACT OF ENVIRONMENTAL AND OTHER REGULATORY ISSUES The Company's operations are subject to extensive regulation, supervision, and licensing under various federal, state, and local statutes, ordinances, and regulations. While the Company believes that it maintains all requisite licenses and permits and is in compliance with all applicable federal, state, and local regulations, there can be no assurance that the Company will be able to maintain all requisite licenses and permits. The failure to satisfy those and other regulatory requirements could have a material adverse effect on the Company's business, financial condition, and results of operations. The adoption of additional laws, rules, and regulations could also have a material adverse effect on the Company's business. Various federal, state, and local regulatory agencies, including the Occupational Safety and Health Administration ("OSHA"), the United States Environmental Protection Agency (the "EPA"), and similar federal and local agencies, have jurisdiction over the operation of the Company's dealerships, repair facilities, and other operations, with respect to matters such as consumer protection, workers' safety, and laws regarding protection of the environment, including air, water, and soil. The EPA recently promulgated emissions regulations for outboard marine engines that impose stricter emissions standards for two-cycle, gasoline outboard marine engines. Emissions from such engines must be reduced by approximately 75% over a nine-year period beginning with the 1998 model year. Costs of comparable new engines, if materially more expensive than previous engines, or the inability of the Company's manufacturers to comply with EPA requirements, could have a material adverse effect on the Company's business, financial condition, and results of operations. See "Business -- Products and Services -- Marine Engines and Related Marine Equipment." Certain of the Company's facilities own and operate underground storage tanks ("USTs") for the storage of various petroleum products. The USTs are generally subject to federal, state, and local laws and regulations that require testing and upgrading of USTs and remediation of contaminated soils and groundwater resulting from leaking USTs. In addition, if leakage from Company-owned or operated USTs migrates onto the property of others, the Company may be subject to civil liability to third parties for remediation costs or other damages. Based on historical experience, the Company believes that its liabilities associated with UST testing, 15 17 upgrades and remediation are unlikely to have a material adverse effect on its financial condition or operating results. As with boat dealerships generally, and parts and service operations in particular, the Company's business involves the use, handling, storage, and contracting for recycling or disposal of hazardous or toxic substances or wastes, including environmentally sensitive materials, such as motor oil, waste motor oil and filters, transmission fluid, antifreeze, freon, waste paint and lacquer thinner, batteries, solvents, lubricants, degreasing agents, gasoline, and diesel fuels. Accordingly, the Company is subject to regulation by federal, state, and local authorities establishing investigation and health and environmental quality standards, and liability related thereto, and providing penalties for violations of those standards. The Company also is subject to laws, ordinances, and regulations governing investigation and remediation of contamination at facilities it operates or to which it sends hazardous or toxic substances or wastes for treatment, recycling, or disposal. In particular, the Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA" or "Superfund") imposes joint, strict, and several liability on (i) owners or operators of facilities at, from, or to which a release of hazardous substances has occurred; (ii) parties who generated hazardous substances that were released at such facilities; and (iii) parties who transported or arranged for the transportation of hazardous substances to such facilities. A majority of states have adopted Superfund statutes comparable to and, in some cases, more stringent than CERCLA. If the Company were to be found to be a responsible party under CERCLA or a similar state statute, the Company could be held liable for all investigative and remedial costs associated with addressing such contamination. In addition, claims alleging personal injury or property damage may be brought against the Company as a result of alleged exposure to hazardous substances resulting from the Company's operations. In addition, certain of the Company's retail locations are located on waterways that are subject to federal or state laws regulating navigable waters (including oil pollution prevention), fish and wildlife, and other matters. The Company believes that it does not have any material environmental liabilities and that compliance with environmental laws, ordinances, and regulations will not, individually or in the aggregate, have a material adverse effect on the Company's business, financial condition, or results of operations. However, soil and groundwater contamination has been known to exist at certain properties owned or leased by the Company. The Company has also been required and may in the future be required to remove aboveground and underground storage tanks containing hazardous substances or wastes. As to certain of the Company's properties, specific releases of petroleum have been or are in the process of being remediated in accordance with state and federal guidelines. The Company has completed or is in the process of completing the remedial actions required by law regarding known contamination, including conducting investigations to determine whether further remedial action is necessary. In addition, the shareholders of the Merged Companies and Property Companies have indemnified the Company for specific environmental issues identified on certain environmental site assessments performed by the Company as part of the Combination Transactions. The Company maintains insurance for pollutant cleanup and removal. The coverage pays for the expenses to extract pollutants from land or water at the insured property if the discharge, dispersal, seepage, migration, release or escape of the pollutants is caused by or results from a covered cause of loss. The Company also may have additional storage tank liability insurance and "Superfund" coverage where applicable. Environmental laws and regulations are complex and subject to frequent change. There can be no assurance that compliance with amended, new or more stringent laws or regulations, stricter interpretations of existing laws or the future discovery of environmental conditions will not require additional expenditures by the Company, or that such expenditures would not be material. One of the properties owned by the Company was historically used as a gasoline service station. Remedial action with respect to prior historical site activities on this property has been completed in accordance with federal and state law. Also, one of the Company's properties is within the boundaries of a Superfund site, although the Company's property has not been and is not expected to be identified as a contributor to the contamination in the area. The Company, however, does not believe that these environmental issues will result in any material liabilities to the Company. Additionally, certain states have required or are considering requiring a license in order to operate a recreational boat. While such licensing requirements are not expected to be unduly restrictive, regulations may 16 18 discourage potential first-time buyers, thereby limiting future sales and adversely affecting the Company's business, financial condition, and results of operations. See "Business -- Environmental and Other Regulatory Issues." FUEL PRICES AND SUPPLY All of the recreational boats sold by the Company are powered by diesel or gasoline engines. Consequently, an interruption in the supply, or a significant increase in the price or tax on the sale, of such fuel on a regional or national basis could have a material adverse effect on the Company's sales and operating results. At various times in the past, diesel or gasoline fuel has been difficult to obtain, and there can be no assurance that the supply of such fuels will not be interrupted, that rationing will not be imposed, or that the price of or tax on such fuels will not significantly increase in the future. See "Business -- U.S. Recreational Boating Industry." AMORTIZATION OF INTANGIBLE ASSETS The Stovall Acquisition resulted in goodwill of approximately $5.6 million, which will be amortized over a period of 40 years. Goodwill is an intangible asset that represents the difference between the aggregate purchase price for the net assets acquired and the amount of such purchase price allocated to such net assets for purposes of the Company's pro forma balance sheet. The Company is required to amortize the goodwill from acquisitions accounted for as purchases over a period of time, with the amount amortized in a particular period constituting an expense that reduces the Company's net income for that period. A reduction in net income resulting from the amortization of goodwill may have an adverse impact upon the market price of the Company's Common Stock. CONFLICTS RELATING TO TRANSACTIONS WITH AFFILIATES Certain of the Merged Companies and Property Companies incurred indebtedness (including $10.7 million of long-term indebtedness) prior to the Combination Transactions, substantially all of which was subject to personal guarantees of their stockholders or owners and remained outstanding at the effectiveness of the Combination Transactions. The guarantors (and the amount guaranteed) include William H. McGill Jr., Chairman, President, and a principal stockholder of the Company ($6,248,000); Jerry L. Marshall, a principal stockholder of the Company ($1,071,000); and Richard C. LaManna Jr., a director, officer, and principal stockholder of the Company, Richard C. LaManna III, an executive officer and principal stockholder of the Company, and Darrell C. LaManna, an executive officer and principal stockholder of the Company ($2,138,000). The Company intends to use a portion of the net proceeds from the Offering to repay or refinance a substantial portion of this indebtedness, including the indebtedness guaranteed by its stockholders, directors, and officers. The Company leases two retail locations from an irrevocable trust of which relatives of Louis R. DelHomme Jr., a director, officer, and principal stockholder of the Company, are the beneficiaries; and four retail locations from partnerships in which Paul Graham Stovall, a director, officer, and principal stockholder, is an owner. The foregoing arrangements were not negotiated on an arms'-length basis. While the Company intends to enter into any future related party transactions on terms no less favorable than those the Company could obtain from unrelated third parties, the interests of directors or officers of the Company or holders of more than 5% of its Common Stock, in their individual capacities or capacities with related third-party entities, may conflict with the interests of such persons in their capacities with the Company. The Company's senior executives will be released from personal guarantees under the Company's line of credit upon the completion of the Offering. See "Business -- Operations -- Inventory Financing" and "Certain Transactions." CONTROL BY OFFICERS, DIRECTORS, AND CERTAIN STOCKHOLDERS Upon completion of the Offering, the Company's directors, executive officers, and persons associated with them will own beneficially an aggregate of approximately 52.8% of the issued and outstanding shares of Common Stock (approximately 50.2% if the Underwriters' over-allotment option is exercised in full). As a result of such ownership, such persons will have the power effectively to control the Company, including the election of directors, the determination of matters requiring stockholder approval, and other matters pertaining 17 19 to corporate governance. This concentration of ownership also may have the effect of delaying or preventing a change in control of the Company. See "Principal and Selling Stockholders." The Company, Brunswick, and the senior executive officers of the Company are parties to a Stockholders' Agreement, and the Company and Brunswick are parties to a Governance Agreement, each dated April 28, 1998. Subject to certain limitations, the Stockholders' Agreement provides various rights of first refusal on the sale of shares of Common Stock by the parties to the agreement, particularly in the event that Brunswick does not own its Targeted Investment Percentage of 19% of the Company's Common Stock at the time of the proposed sale or in the event the proposed sale is to a competitor of Brunswick. The Governance Agreement provides for various terms and conditions concerning Brunswick's participation in the corporate governance of the Company. Among other provisions and subject to certain conditions, the Governance Agreement requires Brunswick and the senior executives to vote their Common Stock for nominees of the Board of Directors in the election of directors and to vote their Common Stock in favor of all proposals and recommendations approved by the Company's Board of Directors and submitted to a vote of the Company's stockholders. As a result, the Stockholders' Agreement and the Governance Agreement will have the effect of increasing the control of the Company's directors, executive officers, and persons associated with them and may have the effect of delaying or preventing a change in control of the Company. See "Description of Capital Stock -- Stockholders' and Governance Agreements." NO PRIOR MARKET AND POSSIBLE VOLATILITY OF STOCK PRICE There has been no public trading market for the Company's Common Stock prior to the Offering. The initial public offering price of the Common Stock will be determined through negotiations between the Company and the Representatives of the Underwriters based on factors described under "Underwriting" and may not be indicative of the price at which the Common Stock will trade after the Offering. The Company has applied to list the Common Stock on the New York Stock Exchange. However, there can be no assurance that the listing application will be approved or, if approved, that an active trading market will develop and continue after completion of the Offering or that the market price of the Common Stock will not decline below the initial public offering price. It is anticipated that there will be limited float in the market as a result of the relatively low number of shares to be offered to the public, and fluctuations in the market price for the Common Stock could be significant. Recent market conditions for newly public companies are likely to result in significant fluctuations in the market price for the Common Stock. In addition, the Company's quarterly operating results in some future quarters could be below the expectations of stock market analysts and investors as a result of variations in operating results due to seasonality and other factors. See "Risk Factors -- Impact of Seasonality and Weather on Operations." Future announcements concerning the Company, including announcements regarding acquisitions, litigation, and changes in earnings estimates published by analysts, as well as announcements concerning governmental regulations, the recreational boat industry, or the Company's suppliers or competitors may cause the market price of the Common Stock to fluctuate significantly. Moreover, the stock market in the past has experienced significant price and volume fluctuations, which have not necessarily been related to corporate operating performance. The volatility of the market could adversely affect the market price of the Common Stock and the ability of the Company to raise equity in the public markets. These fluctuations, as well as general economic, political, and market conditions, such as recessions, may adversely affect the market price of the Common Stock. See "Underwriting." IMMEDIATE AND SUBSTANTIAL DILUTION Purchasers of Common Stock in the Offering will experience immediate and substantial dilution in the pro forma as adjusted net tangible book value of their shares in the amount of $10.01 per share for Brunswick and $11.06 per share for all other investors. If the Company issues additional Common Stock in the future, including shares which may be issued pursuant to option grants and future acquisitions, purchasers of Common Stock in the Offering may experience further dilution in the net tangible book value per share of the Common Stock. The Board of Directors of the Company has the legal power and authority to determine the terms of an offering of shares of the Company's capital stock (or securities convertible into or exchangeable 18 20 for such shares) to the extent of the Company's shares of authorized and unissued capital stock. See "Dilution" and "Description of Capital Stock." SHARES ELIGIBLE FOR FUTURE SALE Upon completion of the Offering, there will be 13,200,000 shares of Common Stock outstanding. The 4,780,569 shares sold in the Offering will be freely tradable without restriction or further registration under the Securities Act, unless acquired by an "affiliate" of the Company, as that term is defined in Rule 144 promulgated under the Securities Act ("Rule 144"); shares held by affiliates of the Company will be subject to the resale limitations of Rule 144 described below. All of the 8,419,431 remaining outstanding shares of Common Stock will be available for resale beginning one year after the respective dates of the Combination Transactions, which occurred on March 1, 1998 and April 30, 1998, and subject to compliance with the provisions of Rule 144 under the Securities Act. See "Shares Eligible for Future Sale." Further, the 1998 Incentive Stock Plan provides for the grant of stock options for up to 1,980,000 shares of Common Stock and the 1998 Employee Stock Purchase Plan provides for the purchase of 500,000 shares of Common Stock by the Company's employees. The Company intends to file registration statements with respect to the shares of Common Stock issuable upon the exercise of all such options granted under the 1998 Incentive Stock Plan or offered under the 1998 Employee Stock Purchase Plan. See "Management -- 1998 Incentive Stock Plan" and "Management -- Employee Stock Purchase Plan." In addition, the Company may issue additional shares of Common Stock as part of any acquisition it may complete in the future. In connection with its intention to consummate acquisitions, the Company intends to register 5,000,000 shares of Common Stock under the Securities Act during 1998 for use in connection with future acquisitions. Pursuant to Rule 145 under the Securities Act, these shares generally will be freely tradable after their issuance by persons not affiliated with the Company or the acquired companies; however, sales of these shares during the Lockup Period (as defined below) would require the prior written consent of Smith Barney Inc. See "Business -- Strategy." Sales of substantial amounts of Common Stock, or the perception that such sales could occur, could adversely affect prevailing market prices of the Common Stock. The Company, its officers and directors, the holders of substantially all of the Common Stock, and Brunswick have agreed that, until 180 days following the date of this Prospectus ("Lockup Period"), they will not, without the prior written consent of Smith Barney Inc., sell, offer to sell, solicit any offer to buy, contract to sell, grant any option to purchase, or otherwise transfer or dispose of any shares of Common Stock, or any securities convertible into, or exercisable or exchangeable for, Common Stock, except that the Company may grant options under the 1998 Incentive Stock Plan and may issue shares of Common Stock (i) in connection with acquisitions, (ii) pursuant to the 1998 Employee Stock Purchase Plan, and (iii) pursuant to the exercise of options granted under the 1998 Incentive Stock Plan. See "Underwriting." HOLDING COMPANY STRUCTURE The Company is a holding company, the principal assets of which are the shares of the capital stock of its subsidiaries, including the Merged Companies. As a holding company without independent means of generating operating revenue, the Company depends on dividends and other payments from its subsidiaries to fund its obligations and meet its cash needs. Expenses of the Company include salaries of its executive officers, insurance, professional fees, and service of indebtedness that may be outstanding from time to time. Financial covenants under future loan agreements of the Company's subsidiaries may limit such subsidiaries' ability to make sufficient dividend or other payments to permit the Company to fund its obligations or meet its cash needs, in whole or in part. DIVIDEND POLICY The Company has never declared or paid cash dividends on its Common Stock and does not anticipate paying cash dividends in the foreseeable future. Moreover, the Company's financing covenants under certain of the Company's loan agreements restrict its ability to pay dividends. See "Dividend Policy." 19 21 ANTI-TAKEOVER EFFECT OF CERTIFICATE AND BYLAW PROVISIONS, DELAWARE LAW, AND CONTRACT PROVISIONS Certain provisions of the Company's Restated Certificate of Incorporation and Bylaws and Delaware law may make a change in the control of the Company more difficult to effect, even if a change in control were in the stockholders' interest or might result in a premium over the market price for the shares held by the stockholders. The Company's Restated Certificate of Incorporation and Bylaws divide the Board of Directors into three classes of directors elected for staggered three-year terms. The Restated Certificate of Incorporation also provides that the Board of Directors may authorize the issuance of one or more series of preferred stock from time to time and may determine the rights, preferences, privileges, and restrictions and fix the number of shares of any such series of preferred stock, without any vote or action by the Company's stockholders. The Board of Directors may authorize the issuance of preferred stock with voting or conversion rights that could adversely affect the voting power or other rights of the holders of Common Stock. The Restated Certificate of Incorporation also allows the Board of Directors to fix the number of directors in the Bylaws with no minimum or maximum number of directors required and to fill vacancies on the Board of Directors. The Company also is subject to the anti-takeover provisions of Section 203 of the Delaware General Corporation Law, which prohibit the Company from engaging in a "business combination" with an "interested stockholder" for a period of three years after the date of the transaction in which the person became an "interested stockholder," unless the business combination is approved in a prescribed manner. The senior executives of the Merged Companies are exempted from the application of Section 203. See "Management" and "Description of Capital Stock -- Delaware General Corporation Law and Certain Charter Provisions." Certain of the Company's dealer agreements could also make it difficult for a third party to attempt to acquire a significant ownership position in the Company. See "Risk Factors -- Boat Manufacturers' Control Over Dealers" and "Business -- Operations -- Suppliers and Inventory Management." In addition, the Stockholders' Agreement and Governance Agreement will have the effect of increasing the control of the Company's directors, executive officers, and persons associated with them and may have the effect of delaying or preventing a change in control of the Company. See "Description of Capital Stock -- Stockholders' and Governance Agreements." YEAR 2000 COMPLIANCE Many currently installed computer systems and software products are coded to accept only two-digit entries to represent years in the date code field. Computer systems and products that do not accept four-digit year entries will need to be upgraded or replaced to accept four-digit entries to distinguish years beginning with 2000 from prior years. The Company believes that its management information system complies with the Year 2000 requirements, and the Company currently does not anticipate that it will experience any material disruption to its operations as a result of the failure of its management information system to be Year 2000 compliant. There can be no assurance, however, that computer systems operated by third parties, including customers, vendors, credit card transaction processors, and financial institutions, with which the Company's management information system interface will continue to properly interface with the Company's system and will otherwise be compliant on a timely basis with Year 2000 requirements. The Company currently is developing a plan to evaluate the Year 2000 compliance status of third parties with which its system interfaces. Any failure of the Company's management information system or the systems of third parties to timely achieve Year 2000 compliance could have a material adverse effect on the Company's business, financial condition, and operating results. 20 22 FORMATION OF THE COMPANY MARINEMAX MarineMax was incorporated in Delaware in January 1998. On March 1, 1998 and April 30, 1998, MarineMax acquired in the Combination Transactions the Merged Companies, each of which operates recreational boat dealerships, and the affiliated Property Companies that own real properties used in the operations of the Merged Companies. See "Certain Transactions -- The Mergers and Property Acquisitions." As a result, the Company became the largest recreational boat dealer in the United States. Upon the consummation of the March 1998 Combination Transactions, the Company commenced the integration of the Merged Companies by centralizing certain administrative functions at the corporate level, such as accounting, finance (including inventory financing), insurance coverage, employee benefits, marketing, strategic planning, legal support, purchasing and distribution, and management information systems. The Company believes that this integration also provides career advancement opportunities to incentivize and retain key employees, mitigates the impact of local or regional economic downturns or poor weather conditions by geographic diversity, creates marketing and sales synergies among its dealerships, enables each dealership to offer its customers enhanced product offerings and financing and insurance products, and improves financial, managerial, and other resources. THE MERGERS AND PROPERTY ACQUISITIONS On March 1, 1998, MarineMax acquired in separate merger transactions all of the issued and outstanding capital stock of five of the Merged Companies in exchange for shares of Common Stock. Simultaneously with the Mergers, MarineMax acquired in separate contribution transactions all of the beneficial interests of each of the Property Companies in exchange for shares of Common Stock. In connection with these Combination Transactions, MarineMax issued an aggregate of 9,191,869 shares of Common Stock to the stockholders of the Merged Companies and the owners of the Property Companies. On April 30, 1998, the Company acquired in a separate merger transaction all of the issued and outstanding stock of Stovall, the sixth Merged Company, for 492,306 shares of the Company's Common Stock, at which time Stovall became a wholly owned subsidiary of the Company, and the Company and affiliates of Stovall entered into leases for the four retail locations of Stovall. Immediately prior to the Mergers, each of the Merged Companies that was an S corporation incurred a distribution payable to its stockholders in an amount anticipated to approximate the related income tax obligations of such stockholders for the period from January 1, 1998 through the date of the Mergers. As a result of the consummation of the Mergers and Property Acquisitions, the aggregate long-term indebtedness of the Company includes $10.7 million of indebtedness of the Merged Companies and Property Companies that was outstanding at the time of the Combination Transactions. Except for the Stovall Acquisition, the Combination Transactions have been accounted for under the "pooling-of-interests" accounting method. The Stovall Acquisition is being accounted for under the "purchase" accounting method. The number of shares of Common Stock issued to the stockholders of each Merged Company and Property Company was determined based on negotiations between MarineMax and those companies. No third-party valuation or appraisal was conducted, other than an appraisal of the properties of the Property Companies, regarding the Merged Companies. The factors considered by the parties in determining the number of shares of Common Stock issued in connection with each of the Mergers consisted of historical cash flows and pro forma operating results, and the number of shares issued in connection with each of the Property Acquisitions was based on the appraised values of the respective properties of the Property Companies. With the exception of the number of shares of Common Stock issued in connection with each Combination Transaction, the acquisition of each Merged Company and each Property Company was subject to substantially the same terms and conditions as those to which the acquisition of each other Merged Company and each other Property Company, respectively, was subject. See "Certain Transactions -- The Mergers and Property Acquisitions -- Terms of the Agreements" for a description of the terms and conditions of the merger agreements between MarineMax and the Merged Companies (the "Merger Agreements") and of the contribution agreements between MarineMax and the Property Companies (the "Contribution Agreements"). Brunswick's dealer agreement with each Merged Company by its terms required the Merged Company to obtain Brunswick's consent to any change in the ownership of the Merged Company. Brunswick and the 21 23 Company disputed the applicability of the change in control provisions to the March 1998 Mergers. In order to avoid a long, costly, and disruptive dispute, the Company and Brunswick entered into a Settlement Agreement on March 12, 1998 under which Brunswick consented to the changes in the ownership of five of the Merged Companies resulting from the Mergers and the Company agreed to pay Brunswick $15.0 million, together with accrued interest, no later than December 31, 1998. On April 28, 1998, Brunswick consented to the acquisition of the sixth Merged Company. The following table sets forth information concerning the Common Stock issued in connection with the Combination Transactions and the approximate long-term indebtedness of the Merged Companies and Property Companies outstanding at the time of the Combination Transactions:

SHARES OF COMMON LONG-TERM STOCK OUTSTANDING DEBT --------- ---------------------- (DOLLARS IN THOUSANDS) MERGED COMPANIES: Bassett..................................................... 2,686,295 $ 0 DelHomme (includes DelHomme Realty, Inc.)................... 1,329,266 0 Gulfwind USA................................................ 2,032,913 6,248 Gulfwind South.............................................. 808,172 171 Harrison's.................................................. 943,197 148 Stovall..................................................... 492,306 --------- ------- Total............................................. 8,292,149 $ 6,567 --------- ------- PROPERTY COMPANIES: Bassett Boat Company........................................ 51,921 $ 0 Bassett Realty, L.L.C....................................... 1,074,870 0 Gulfwind South Realty, L.L.C................................ 19,242 2,100 Harrison's Realty, L.L.C.................................... 113,409 900 Harrison's Realty California, L.L.C......................... 132,584 1,090 --------- ------- Total............................................. 1,392,026 4,090 --------- ------- Total Consideration in Combination Transactions............. 9,684,176 $10,657 ========= =======

THE MERGED COMPANIES AND PROPERTY COMPANIES Bassett Boat Company of Florida, Bassett Realty, L.L.C., and Bassett Boat Company ("Bassett") Founded in 1979, Bassett operates recreational boat dealerships at four retail locations in Miami, Palm Beach, Pompano Beach, and Stuart, Florida, and has approximately 95 employees. Bassett offers Sea Ray pleasure boats and Boston Whaler fishing boats. Bassett's revenue for the 12 months ended December 31, 1997 was approximately $60.5 million. In connection with the Bassett merger, the Company acquired the five properties used in Bassett's operations by acquiring all of the stock of Bassett Boat Company and all of the beneficial interest in Bassett Realty, L.L.C., affiliates of Bassett that own such properties. See "Business -- Properties" for a description of such properties. Richard R. Bassett, the president and owner of Bassett, also entered into a five-year covenant not to compete and a five-year employment agreement with the Company and became a director and Senior Vice President of the Company. See "Management -- Employment Agreements" and "Certain Transactions -- The Mergers and Property Acquisitions -- Terms of the Agreements." 11502 Dumas, Inc. d/b/a Louis DelHomme Marine ("DelHomme") Founded in 1971, DelHomme operates recreational boat dealerships at seven retail locations in Fort Worth, Lewisville (Dallas), League City, Montgomery, and Houston, Texas, and has approximately 75 employees. DelHomme offers Sea Ray pleasure boats; Baja high-performance boats; Sea Hunt, Sea Pro, 22 24 Century, and Challenger fishing boats; and Smokercraft pontoon boats. DelHomme's revenue for the 12 months ended December 31, 1997 was approximately $39.7 million. As part of the DelHomme merger, the Company acquired a floating facility used as a retail facility in DelHomme's League City operations. In addition, the Company leases three properties used in DelHomme's Houston operations (including two retail facilities and one warehouse facility) from affiliates of Mr. DelHomme. See "Business -- Properties" for a description of such properties. Louis R. DelHomme Jr., the president and principal owner of DelHomme, also entered into a five-year covenant not to compete and a five-year employment agreement with the Company and became a director and Senior Vice President of the Company. See "Management -- Employment Agreements," "Certain Transactions -- The Mergers and Property Acquisitions -- Terms of the Agreements," and "Certain Transactions -- Leases of Real Properties from Affiliates." Gulfwind USA, Inc. ("Gulfwind USA") Founded in 1973, Gulfwind USA operates recreational boat dealerships at three retail locations in Tampa and Clearwater, Florida, and has approximately 82 employees. Gulfwind USA offers Sea Ray pleasure boats and Boston Whaler fishing boats. Gulfwind USA's revenue for the 12 months ended December 31, 1997 was approximately $45.2 million. As part of the Gulfwind USA merger, the Company acquired two of the properties used in Gulfwind USA's operations that were owned by Gulfwind USA prior to the Merger. See "Business -- Properties" for a description of such properties. William H. McGill Jr., the president and principal owner of Gulfwind USA and President and Chief Executive Officer of the Company, also entered into a five-year covenant not to compete and a five-year employment agreement with the Company and became Chairman of the Board of Directors of the Company. See "Management -- Employment Agreements" and "Certain Transactions -- The Mergers and Property Acquisitions -- Terms of the Agreements." Gulfwind South, Inc. and Gulfwind South Realty, L.L.C. ("Gulfwind South") Founded in 1983, Gulfwind South operates recreational boat dealerships at two locations in Fort Myers and Naples, Florida and has approximately 43 employees. Gulfwind South offers Sea Ray pleasure boats. Gulfwind South's revenue for the 12 months ended December 31, 1997 was approximately $28.5 million. In connection with the Gulfwind South merger, the Company acquired one of the properties used in Gulfwind South's operations by acquiring all of the beneficial interest in Gulfwind South Realty, L.L.C., an affiliate of Gulfwind South that owns such property. See "Business -- Properties" for a description of such property. See "Certain Transactions -- The Mergers and Property Acquisitions -- Terms of the Agreements." Harrison's Boat Center, Inc. and Harrison's Marine Centers of Arizona, Inc. ("Harrison's") and Harrison's Realty, L.L.C. and Harrison's Realty California, L.L.C. Founded in 1978, Harrison's operates recreational boat dealerships at eight retail locations in Oakland, Oakley, Redding, Santa Rosa, and Sacramento, California, and Tempe, Arizona, and has approximately 158 employees. Harrison's offers Sea Ray pleasure boats, Malibu ski boats, Starcraft and Boston Whaler fishing boats, Starcraft pontoon boats, Baja high-performance boats, Bombardier Sea Doo and Yamaha personal watercraft, and Gregor and Generation 3 aluminum boats. Harrison's revenue for the 12 months ended December 31, 1997 was approximately $46.2 million. In connection with the Harrison's merger, the Company acquired three of the properties used in Harrison's operations by acquiring all of the beneficial interest in Harrison's Realty L.L.C. and Harrison's Realty California, L.L.C., affiliates of Harrison's that own such properties. See "Business -- Properties" for a description of such properties. Richard C. LaManna Jr., the president and principal owner of Harrison's, also entered into a five-year covenant not to compete and a five-year employment agreement with the Company and became a director and Senior Vice President of the Company. Each of the two other stockholders of Harrison's, Richard C. LaManna III, the secretary and treasurer of Harrison's, and Darrell C. LaManna, the vice president of Harrison's, entered into a five-year covenant not to compete and a five-year employment agreement with the Company. In addition, each of Richard C. LaManna III and Darrell C. LaManna 23 25 became Vice President of the Company. See "Management -- Employment Agreements" and "Certain Transactions -- The Mergers and Property Acquisitions -- Terms of the Agreements." Stovall Marine, Inc. Founded in 1946, Stovall operates recreational boat dealerships at four retail locations in Kennesaw (Atlanta), Augusta, Forest Park (Atlanta), and Lake Lanier, Georgia, and has approximately 64 employees. Stovall offers Sea Ray pleasure boats, Boston Whaler and SeaPro fishing boats, and Challenger bass boats. Stovall's revenue for the 12 months ended December 31, 1997 was approximately $19.7 million. See the Pro Forma Consolidated Financial Statements and the notes thereto. In connection with the Stovall Acquisition, Paul Graham Stovall, president of Stovall, entered into a five-year covenant not to compete and a five-year employment agreement with the Company. Upon consummation of the Stovall Acquisition, the Company entered into leases for the four properties used in Stovall's operations from affiliates of Stovall, at fair market rental values. See "Business -- Properties" for a description of such properties and "Certain Transactions -- Leases of Real Properties From Affiliates." USE OF PROCEEDS The net proceeds to the Company from the sale of the 3,515,824 shares of Common Stock offered by the Company hereby, after deducting estimated underwriting discounts and expenses, are estimated to be approximately $46.5 million, assuming an initial public offering price of $15.00 per share. The Company expects to use $19.2 million to repay term indebtedness and amounts owed to related parties of the Merged Companies and Property Companies existing at the effectiveness of the Mergers and Property Acquisitions, $1.5 million to enhance its management information system, and the remainder for working capital and general corporate purposes, including acquisitions and opening new retail facilities. See "Formation of the Company -- The Mergers and Property Acquisitions," "Certain Transactions -- The Mergers and Property Acquisitions -- Terms of the Agreements," "Underwriting," and "Sale of Shares to Brunswick." The Company believes that undertaking the Offering at this time will facilitate the Company's ability to grow through the acquisition of additional recreational boat dealers and the opening of new retail facilities and, as stated above, plans to use a significant portion of the net proceeds of the Offering, as well as its Common Stock, for these purposes. As of the date of this Prospectus, however, the Company has no current or pending agreements to effect any acquisitions or open any new facilities. Accordingly, management will have substantial discretion in the use of a large portion of the net proceeds of the Offering to be received by the Company. The acquisitions of dealers and the opening of new retail facilities also generally require the consent of applicable manufacturers. See "Risk Factors -- Necessity for Manufacturers' Consent to Dealer Acquisitions and Market Expansion." As a result of these and other factors, there can be no assurance that any dealer acquisitions or facility openings will be completed or, if completed, will be completed on terms favorable to the Company. Pending application of the net proceeds as described above, the Company intends to invest the net proceeds in short-term, interest-bearing, investment grade securities. See "Business -- Strategy." The Company will not receive any of the net proceeds from the sale of shares of Common Stock by the Selling Stockholders. See "Principal and Selling Stockholders." DIVIDEND POLICY The Company currently intends to retain its earnings to support the growth and development of its business and has no present intention of paying any dividends on its Common Stock in the foreseeable future. Any future declaration of dividends will be subject to the discretion of the Board of Directors of the Company and will depend on the Company's financial condition, operating results, capital requirements, contractual restrictions with respect to the payment of dividends, and such other factors as the Board of Directors deems relevant. 24 26 CAPITALIZATION The following table sets forth the Company's capitalization at March 31, 1998 (i) on a historical basis; (ii) on a pro forma basis giving effect to the Stovall Acquisition; and (iii) as adjusted to reflect the sale of the shares of Common Stock offered by the Company hereby at an assumed initial offering price of $15.00 per share and the application of the estimated net proceeds therefrom as described in "Use of Proceeds." This table should be read in conjunction with the financial statements, including the notes thereto, included elsewhere in this Prospectus.

MARCH 31, 1998 ----------------------------------------- PRO FORMA ACTUAL PRO FORMA(1) AS ADJUSTED(2) ------- ------------ -------------- Short-term debt (including current portion of long-term debt)................................................ $19,418 $19,418 $15,048 Long-term debt, excluding current portion.............. 10,440 10,440 1,851 ------- ------- ------- Stockholders' equity: Preferred Stock, $.001 par value, 5,000,000 shares authorized; none outstanding...................... -- -- -- Common Stock, $.001 par value, 40,000,000 shares authorized; 9,191,870 shares issued and outstanding before the Offering; 9,684,176 shares issued and outstanding pro forma; 13,200,000 shares issued and outstanding pro forma as adjusted(3)....................................... 9 10 13 Additional paid-in capital........................... 7,117 13,319 59,862 Retained earnings.................................... (2,263) (2,263) (2,263) ------- ------- ------- Total stockholders' equity........................... 4,863 11,066 57,612 ------- ------- ------- Total capitalization................................... $34,721 $40,924 $74,511 ======= ======= =======

- --------------- (1) Reflects pro forma adjustments giving effect to the Stovall Acquisition and certain other pro forma entries as described in the Pro Forma Consolidated Financial Statements and the notes thereto. (2) Reflects pro forma adjustments giving effect to the Offering and the application of the estimated net proceeds therefrom as described in "Use of Proceeds." Short-term debt includes the Brunswick settlement obligation until its maturity on December 31, 1998. (3) Does not include (a) 1,980,000 shares of Common Stock reserved for issuance under the Company's 1998 Incentive Stock Plan, or (b) 500,000 shares of Common Stock reserved for issuance under the Company's 1998 Employee Stock Purchase Plan. See "Management -- 1998 Incentive Stock Plan" and "Management -- Employee Stock Purchase Plan." 25 27 DILUTION The pro forma net tangible book value of the Company at March 31, 1998 was $5.5 million, or $.57 per share of Common Stock. "Pro forma net tangible book value per share" is the pro forma tangible net worth (total tangible assets less total liabilities) of the Company divided by the number of shares of Common Stock outstanding without giving effect to the sale of shares of Common Stock sold in connection with the Offering. After giving effect to the sale of the shares of Common Stock offered by the Company in the Offering at an assumed initial public offering price of (a) $13.95 per share to Brunswick (see "Sale of Shares to Brunswick"), and (b) $15.00 per share (before deducting underwriting discounts) to all other new investors (the "Other Investors") and the application of the net proceeds therefrom (after deducting underwriting discounts and estimated offering expenses) as described under "Use of Proceeds," the combined net tangible book value of the Company at March 31, 1998 would have been $52.0 million or $3.94 per share, representing an immediate increase in net tangible book value of $3.37 per share to existing stockholders and an immediate dilution of $10.01 and $11.06 per share to Brunswick and the Other Investors, respectively. The following table illustrates this dilution on a per share basis:

OTHER BRUNSWICK INVESTORS --------- --------- Assumed initial public offering price per share............. $13.95 $15.00 Pro forma net tangible book value per share as of March 31, 1998............................................... .57 .57 Increase in pro forma net tangible book value per share attributable to shares sold in the Offering............ 3.37 3.37 ------ ------ Pro forma as adjusted net tangible book value per share after the Offering........................................ 3.94 3.94 ------ ------ Pro forma as adjusted dilution in net tangible book value per share................................................. $10.01 $11.06 ====== ======

The following table sets forth at March 31, 1998, after giving effect to the sale of the Common Stock offered hereby, (i) the number of shares of Common Stock purchased by existing stockholders from the Company and the total consideration (including the fair value of the shares of Common Stock issued to the owners of the Merged Companies and Property Companies) and the average price per share paid to the Company for such shares; (ii) the number of shares of Common Stock purchased from the Company by Brunswick and the Other Investors in the Offering and the total consideration and the price per share paid by them for shares purchased from the Company; and (iii) the percentage of shares purchased from the Company by existing stockholders, Brunswick, and the Other Investors and the percentages of consideration paid to the Company for such shares by existing stockholders, Brunswick, and the Other Investors (dollars in thousands, except per share amounts).

TOTAL CONSIDERATION AVERAGE SHARES PURCHASED TO COMPANY PRICE