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#We haven't quantified the EPS impact in the March quarter.
We did sell and deliver some boats.
I guess you could argue it contributed some, but when you take out the elevated marketing costs and setup of the brand, it would be negligible in the quarter.
It's really more of a future opportunity for the Company and not a massive driver of EPS in 2016, moreso a contributor in 2017 and certainly in 2018.
And an interesting point about Galleon, David, is we do not see it as being cannibalistic to our core brands of Azimut and Sea Ray.
And actually what we're seeing is that the sales that we are making and the boats that are sold that are on order are really hurting the competition.
And so we are taking share from others that had taken it away.
So it's a complementary brand that is in addition to our stores, and I mentioned in the script that it makes it a one-stop shop.
So as people come in we've eliminated some of the competition out there and so they are buying from MarineMax, and so products are different from the Sea Ray or an Azimut, and so as such they are staying with MarineMax and we are taking share as a result of it.
It will show up in the market share reports as they start to come in, in future dates.
I'll take a stab at it, maybe <UNK> can add into it.
What we are taking in on trade ---+ being a new boat dealer you tend to take trades on anything that's in the high 20s or above 30 feet.
And that's true today, it's true last year or the year before.
We are certainly bringing more new people into boating with the introduction of some of the new smaller Sea Rays, which ---+ by definition, someone buying a 19- or 20-foot may be new to boating.
And we're selling a lot of those and taking share, which is good.
And the percentages really haven't changed.
If you look at the larger boats, probably 75-80% are given as a trade.
You look at the smaller boats and it's a much smaller percentage.
As far as average age is concerned of the trades, we are seeing some newer boats that are trading, especially like with Sea Ray, where we have got some hot new models, with the SLXs and the 40-footers and the 45s and, of course, the 59s and 65s.
And so it's bringing some of the people that bought boats two or three years ago back to say, hey, I like this new boat that they've just come out with.
So I don't think we'll have as much of the ageing issue we had where people were trading 15- , 18-year-old notes to us for the last 10 years.
They haven't been trading up until just more recently.
So we are a little more encouraged than we were at this time last year.
And as <UNK> mentioned, we feel very comfortable with our used and the quality that's there.
And we are in a better position than we have been historically.
Thanks, <UNK>, a good question ---+ no, we have not changed the leverage assumptions.
So we typically say we get 15% leverage out of the pretax line.
Of course, that's a range of 12% to 17%.
It can be higher.
We are using more like the 12% range until we get through this June quarter.
So no, we have not modified that at all.
I'd say that if the things that we can control in looking at our Company, we feel pretty optimistic about this year.
But there's so much external that we just don't have the control over.
We are in an election year.
You've got the noise going on with the Feds, etc.
, etc.
And so we just don't want to try to predict the future, based upon what we are seeing and hearing from the customers because it could change pretty rapidly, depending on what happens with all the noise that's on the news and going on in the world and the economy.
But, all in all, we are encouraged by what we're seeing.
We understand we've only delivered a small part of the year, even though it has been very positive.
And we've still got a lot of runway ahead of us and we are ---+ as we mentioned, April is a bigger month than March, and May gets larger and June is our largest month and right in the peak of the season.
So, we've still got some time ahead of us and we've got a bunch of boats to get delivered and see how it goes.
I think, ultimately, when you get through the full year, our inventories should not grow in excess of same store sales.
We should be looking at modestly improving terms throughout the year.
There's very little Galleon in our inventory today.
There's some but very little.
And your commentary around Russo is accurate.
That's a good way to estimate what their inventory levels are.
But the elevated amount ---+ I won't even say elevated.
The amount of inventory we have today ---+ it's really driven by Sea Ray, Azimut and Whaler inventory that we strategically worked with the manufacturers to have in place in time for the season.
So, in the back half of the year, that begins to taper down a little bit as you and our fiscal year.
If you look at 2015, we needed more new product from Sea Ray and Boston Whaler, and so, when we got the ability to build a little bit of an inventory, especially in some of our regions, and didn't see the new inventory last year, we've taken this opportunity to do something.
And so, that's probably the biggest increase as to why the inventory is up is we want to give our other regions and stores the opportunity to sell some of this new product.
To do that, you've got to have it.
My commentary was around the backlog when we started the June quarter, which would obviously include April, May, June.
There is some sales all the way out into the future, going all the way out into January of 2017 in there.
And as a percentage it's much more meaningfully up than what our same-store sales is up, which is a very good sign.
And you see our customer deposits up.
The backlog trend has been tracking higher since 2012, maybe even late 2011.
And so it's definitely good to see.
In terms of brands, and it's really all of our brands are contributing to the backlog.
I hate to be such a generalist like that, but Sea Ray is doing well.
We've got a lot of sold on order in Sea Ray, sold available products, stuff that we have in inventory.
Azimut is doing well, Alexander, Whaler, Galleon ---+ anything that is relatively new is selling well in our backlog.
I don't think in the near term there will be much of a drag.
I think, number one, they run a good business.
We are very glad to have them onboard.
I think in the future you're going to see the ability to expand their topline by selling inventory that we have other places in the country and helping even grow share further, which will then leverage their cost structure more.
There are certainly some synergistic costs along the way, whether it's interest or insurance or things of that nature that we always have.
We always focus more on just that topline growth that we think we can help them with.
But the ability to offer to the good customers and clients that they have in the Boston market, Ocean Alexander and larger Azimuts ---+ that's all a wonderful opportunity and it adds to their business and our business at the same time.
We did not, but it's several hundred thousand dollars.
If you do the Miami boat show display, West Palm Beach project is, some marketing materials ---+
Training.
---+ Yes, training, stuff like that, it would be upwards of $500,000.
Well, you would have sales to offset.
You would have more leverage.
And you are right; you would not have that big of a chunk repeating itself.
So you have both ---+ one, reductions; and then, two, you start having more deliveries coming in.
For the June quarter, yes, I'd say those are pretty good estimates of how the June quarter falls.
It may not be quite 50% anymore at June and I think may pick up a little bit more.
But June is the biggest month.
April would typically be the smallest.
And then it has a crescendo effect just before July 4.
Yes, the earn-out would include increased productivity from us being involved.
They have still got to sell the product, take care of the consumer and do all that stuff with each of the opportunities that we would bring to the table.
And if you look at real synergies and the ability to access to the inventory, both new and used, all across MarineMax for Russo is a huge synergy.
We may have a 42-foot Boston Whaler that is available four to six months earlier than it would be that it would be if they could do as a private dealership.
Obviously, leveraging the brands primarily initially here, the larger Azimuts and (multiple speakers) Ocean Alexander will be huge.
If you look at finance and insurance, we have New Coast Finance as well as the finance and insurance operations within our stores.
And so the ability to get customers financed ---+ we have a real competitive advantage over almost any dealer that's out there in the marketplace today.
And of course, that becomes an advantage for Russo.
I can tell you that they have some business practices and things that they are doing which will be an advantage to all of MarineMax.
There's things that they are doing that we will learn from, and so they will be part of our team.
And as we get our general managers, which are our store managers, and regional presidents together, which is actually occurring in a couple weeks, they will be part of that.
And one plus one equals three when you get good minds together.
So, there's a lot of synergistic opportunities.
And we can't say it enough; there is no culture change that's needed here.
They are very good people.
They take excellent care of your customers.
They understand that boating changes people's lives as well as our team does.
So it's a great addition to the family with almost no hiccups.
We installed our computer system because they were on a different computer system, and that happened prior to the acquisition occurring.
And we had our team in counting inventories and doing that due diligence and training and HR, etc.
, etc.
And it was all part of the family.
So we are very excited.
Moving forward, there's others that we are in discussion with, and similar type cultures and in some great markets.
And when the time is right we will add them to the family as well.
And we could do something almost immediately with a couple of them, but at the end of the day they're in the peak of the season, too.
So we don't want to disrupt business with the transition into being part of the MarineMax family as well.
So we will keep looking at opportunities, and when it makes sense we will deliver.
They are getting to be more meaningfully profitable coming out of the downturn.
That was a crucial thing that had to occur to have more robust discussions with the different levers that we are talking to.
Just like our own earnings have doubled from last year and maybe doubled the year before that, the other dealers are seeing that as well.
So when you start to put a multiple on something there's at least something you can discuss about from a payment perspective, which results in healthier discussions, quite frankly.
And everybody we are talking to believes the future is much brighter than the past.
We all do, with the models that are coming out and with what's going on in the industry.
So there are different discussions around an earnout or some future like an earnout in some of the acquisition discussions that we have going on right now.
But first and foremost, the thing that we look for in an acquisition is the team, the people, because it doesn't work that way.
If you've got the right people with the right culture and it is a good market, it works.
There's acquisitions that we could go and do that wouldn't truly be a merger into MarineMax.
But those can take a long time to fix.
So we're going to stay true to this is about long term, not about short term.
And so if it doesn't make sense we wait a little bit until it does make sense or we look elsewhere.
So we are being very careful because a bad acquisition is not good.
But what we are paying, it's accretive the first year in almost every case.
So we are going to keep doing our due diligence.
And at the end of the day it's about the people more than anything.
And you'll see that with Russo if you were to visit their stores or talked to some of their customers or when <UNK> and I are on roadshows and we're visiting Boston, most everybody we talk to is very familiar with Russo Marine.
And of course now, it's MarineMax Russo Marine.
With Sea Ray, we are probably in the fourth or fifth inning, maybe.
And as far as refresh of the product they are a little further than that.
But availability of that product still has some opportunities but they are coming out with it.
Azimut has been giving us new product all along, and they are well on track with fresh, new products and are really outstanding.
And Boston Whaler ---+ wow ---+ knocked the cover off the ball, and they are ramping up the hot boats.
And they have quite a few, coming out with new models as well.
The same with Scout and Nautique.
I'm an avid water skier every weekend, and my boat is the old fart type of boat where you are out slalom tricking and bare footing.
And that model is being refresh this year.
I haven't seen it yet, but I plus all the other competitive skaters are going to be running to it when it does come out.
So it's new that sells, whether it's Sailfish or Harris or Crest.
And we are getting it from pretty well all of our manufacturers.
And so ---+ a very exciting times because it's really what was missing.
And if you look at the downturn in 2008 and 2009, the thing that we were missing as a company from our primary supplier, Brunswick, was fresh new product.
And it hurt.
If we had had fresh new product during that time, they would have sold even in the downturn.
So, if we have another one or when we have another one, having fresh product at our stores that are hot and fresh and new will serve us well because people are boating and they're going to continue to boat.
Boating is growing.
We are encouraged by what's happening with the manufacturers.
Well, thank you, operator.
And in closing, I'd like to thank all of you for your continued support and interest in MarineMax.
<UNK> and I are available today if you have any additional questions.
Thank you.
