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Five analysts and top management from sixteen sector firms examine the Leisure Goods & Services sector in this special 89-page issue from The Wall Street Transcript, available at (212/952-7433) or http://www.twst.com/info/info384.htm

TWST: Let’s go back to the single thread that you referred to that ties these subsegment together — consumers’ discretionary income. What do you expect the consumer to be doing in the second half of 2001 and further out into 2002?

Mr. Barry: That’s certainly a very topical question right now. Like many others, we think the macroeconomic outlook hinges on what happens in the second half with regard to consumer spending. We’re actually fairly constructive on consumer spending, particularly when it comes to spending on leisure. Leisure spending across the board has been fairly resilient during the recent macroeconomic contraction, although each subsegment has been impacted to varying degrees, and we anticipate it will continue to hold up into the second half of the year. One of the things that we’ve found, particularly when it comes to the vacation travel segment, is that time as a currency has become equally as important to the consumer as money. By that I mean that scarce leisure time has become increasingly valuable to the consumer. For instance, here in the United States we have about 13 vacation days a year. And we’re finding that even in a downturn, consumers are still going to take their vacations, and they’re still going to spend. That’s not to say that you don’t see consumers become more value-conscious, and in fact that’s exactly what we’ve been seeing. But we’re still seeing spending, particularly in the vacation travel segments.

TWST: Moving from the cruise lines to the boat builders, an area that many people would consider to be highly sensitive to the economy. Do you agree with that?

Mr. Barry: Yes, it is highly sensitive to the economy. Among the six subsegments of our leisure coverage universe, the boating industry has been hit the hardest by the economic contraction. The boat buy is a classic deferrable purchase. The boat industry, for the past nine months, has been seeing mid- to high single-digit declines in unit volume. Looking on the bright side, the downturn has thus far not been nearly as severe as what the boating industry has experienced in the last couple of cycles. Structurally, one of the things that we find exciting about the boating industry on a going-forward basis is the emergence of some professional management on the retailing end of the business. We firmly believe the boating industry has historically been somewhat underserved at retail. In particular, I would point out a company we cover called MarineMax (NYSE:HZO). What MarineMax is doing is similar to what Harley-Davidson (NYSE:HDI) has had so much success with in the motorcycle segment. MarineMax doesn’t define its business as selling boats. They view their product as the entire boating experience, or the boating lifestyle, and this strategy has proven hugely successful for them. They eliminate, really, all the hassles of boat ownership, and this strategy plays right into several powerful leisure trends, including the maximization of scarce leisure time. We believe MarineMax’s consolidation and re-engineering of the retail end of the boat business is a very positive source of change and an interesting development to watch over the next three to five years.

TWST: Is MarineMax a stock to buy today?

Mr. Barry: Absolutely. It’s undervalued. It’s unfortunately a micro-cap name that is extremely illiquid, but we view the company as a real diamond in the rough. It’s highly undervalued and really comes under the radar screen of most institutional investors because of the liquidity issue. But certainly from a retail investor’s standpoint, we think MarineMax is a fresh money buy today.

This special issue includes:

1) Leisure Goods & Services - In an in-depth (4,100 words) Analyst Interview, Timothy Conder, Vice President at A.G. Edwards & Sons, Inc., examines the outlook for the sector and shares specific stock recommendations.

2) Leisure Industry Overview - In an in-depth (3,700 words) Analyst Interview, Hayley Kissel, Director of Merrill Lynch's Global Securities Research and Economics Division, examines the outlook for the sector and shares specific stock recommendations.

3) Outlook for Leisure Stocks - In an in-depth (3,900 words) Analyst Interview, Scott Barry, Director in Credit Suisse First Boston's Equity Research group, examines the outlook for the sector and shares specific stock recommendations.

4) Cruise Lines & Motor Sports - In an in-depth (2,600 words) Analyst Interview, Joseph Hovorka, Senior Analyst at Raymond James & Associates, examines the outlook for the sector and shares specific stock recommendations.

5) Outlook for Cruise Lines - In an in-depth (4,100 words) Analyst Interview, Robin Farley, Executive Director in the equity research division of UBS Warburg, examines the outlook for the sector and shares specific stock recommendations.

6) CEO interviews (average 2,500 words). Top management of sixteen sector firms examine the outlook for their firm and the sector.