OneWater Marine Inc. (NASDAQ: ONEW) (“OneWater” or the “Company”)
today announced results for its fiscal first quarter ended December
31, 2023.
“We delivered same store sales growth of 2%
despite an increasingly competitive landscape with more moderated
pricing. As expected, the return to traditional seasonal patterns
and mix shift impacted results, with a preference towards our
larger boat offerings during the historically slower winter months.
While margins continue to stabilize, we are cautiously optimistic
that we are nearing a new normal across the industry,” commented
Austin Singleton, Chief Executive Officer at OneWater.
“We have had a wild ride in our first four years as a public
company. Through it all, our team adapted quickly, which enabled
significant growth and expansion. As we move forward in this more
normalized environment, we remain focused on executing on our
strategic growth objectives, while continuing to outperform the
industry and drive enhanced value for our shareholders.”
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For the Three Months
Ended December 31 |
2023 |
|
2022 |
|
$ Change |
|
% Change |
Revenues |
(unaudited, $ in thousands) |
New boat |
$ |
241,084 |
|
$ |
232,405 |
|
$ |
8,679 |
|
|
3.7 |
% |
Pre-owned boat |
|
53,283 |
|
|
55,778 |
|
|
(2,495 |
) |
|
(4.5 |
)% |
Finance & insurance
income |
|
7,360 |
|
|
8,934 |
|
|
(1,574 |
) |
|
(17.6 |
)% |
Service, parts &
other |
|
62,286 |
|
|
69,542 |
|
|
(7,256 |
) |
|
(10.4 |
)% |
Total revenues |
$ |
364,013 |
|
$ |
366,659 |
|
$ |
(2,646 |
) |
|
(0.7 |
)% |
|
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Fiscal First Quarter 2024
Results
Revenue for fiscal first quarter 2024 was $364.0
million, a decrease of 0.7% compared to $366.7 million in fiscal
first quarter 2023. Same-store sales increased 2%.
New boat revenue increased 3.7%, driven by an
increase in average price per unit, partially offset by a slight
decrease in units sold. Finance & insurance income decreased
17.6% compared to the prior year quarter due to less favorable
rates in the increasingly competitive environment, but supported by
typical finance penetration. Pre-owned boat revenue decreased 4.5%
driven by the decrease in brokerage and consignment sales,
partially offset by the increase in pre-owned sales from trade-ins.
Service, parts & other sales were down 10.4% compared to the
prior year quarter, primarily due to a reduction in parts and
accessories sold to original equipment manufacturers and the
disposal of Roscioli Yachting Center and Lookout Marine.
Gross profit totaled $91.4 million for fiscal
first quarter 2024, down $18.5 million from $110.0 million for
fiscal first quarter 2023. Gross profit margin of 25.1% decreased
490 basis points compared to the prior year period, driven by the
seasonal shift in volume, mix, and size of boats sold, as well as
lower revenue from higher margin businesses.
Fiscal first quarter 2024 selling, general and
administrative expenses totaled $79.6 million, or 21.9% of revenue,
compared to $77.8 million, or 21.2% of revenue, in fiscal first
quarter 2023. The increase in selling, general and administrative
expenses as a percentage of revenue was driven by expenses incurred
to support maintaining revenues, including increased boat show
related expenses, partially offset by decreased personnel
expenses.
Net loss for fiscal first quarter 2024 totaled
$(8.0) million, compared to net income of $11.4 million in fiscal
first quarter 2023. The Company reported a net loss per diluted
share for fiscal first quarter 2024 of $(0.49), compared to net
income per diluted share of $0.61 in 2023. Adjusted diluted loss
per share1 for fiscal first quarter 2024 was $(0.38), compared to
adjusted diluted earnings per share of $0.73 in 2023.
Fiscal first quarter 2024 Adjusted EBITDA1
decreased 76.6% to $7.1 million compared to $30.4 million for
fiscal first quarter 2023.
As of December 31, 2023, the Company’s cash and
cash equivalents balance was $44.6 million and total liquidity,
including cash and availability under credit facilities, was in
excess of $65.0 million. Total inventory as of December 31, 2023,
increased to $706.8 million compared to $609.6 million on September
30, 2023, primarily driven by the return of traditional seasonal
cycles where the Company builds inventory in the winter months.
Total long-term debt as of December 31, 2023 was $439.8 million,
and adjusted long-term net debt (net of $44.6 million cash)1 was
2.6 times trailing twelve-month Adjusted EBITDA1.
Fiscal Year 2024 Guidance
The Company is maintaining its previously issued
fiscal full year 2024 outlook. For fiscal full year 2024, OneWater
anticipates dealership same-store sales to be up low to mid-single
digits. Adjusted EBITDA2 is expected to be in the range of $130
million to $155 million and earnings per diluted share is expected
to be in the range of $3.25 to $3.75.
OneWater will host a conference call to discuss
its fiscal first quarter earnings on Thursday, February 1, at 8:30
am Eastern time. To access the conference call via phone,
participants can dial 1-833-630-0581 or 1-412-317-1814
(International).
Alternatively, a live webcast of the conference
call can be accessed through the “Events” section of the Company’s
website at https://investor.onewatermarine.com/ where it will be
archived for one year.
A telephonic replay will also be available
through February 15th, 2024 by dialing 1-877-344-7529 (US Toll
Free), 855-669-9658 (Canada Toll Free), or 1-412-317-0088
(International Toll), and entering access code 4301831.
- See reconciliation of Non-GAAP
financial measures below.
- See reconciliation of Non-GAAP
financial measures below for a discussion of why reconciliations of
forward-looking Adjusted EBITDA are not available without
unreasonable effort.
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ONEWATER MARINE INC.CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS(In thousands except per
share data)(Unaudited) |
|
|
Three Months EndedDecember
31, |
|
2023 |
|
2022 |
Revenues: |
|
|
|
New boat |
$ |
241,084 |
|
|
$ |
232,405 |
|
Pre-owned boat |
|
53,283 |
|
|
|
55,778 |
|
Finance & insurance
income |
|
7,360 |
|
|
|
8,934 |
|
Service, parts &
other |
|
62,286 |
|
|
|
69,542 |
|
Total revenues |
|
364,013 |
|
|
|
366,659 |
|
|
|
|
|
Gross profit |
|
|
|
New boat |
|
44,681 |
|
|
|
57,147 |
|
Pre-owned boat |
|
11,937 |
|
|
|
15,474 |
|
Finance and insurance |
|
7,360 |
|
|
|
8,934 |
|
Service, parts &
other |
|
27,465 |
|
|
|
28,433 |
|
Total gross profit |
|
91,443 |
|
|
|
109,988 |
|
|
|
|
|
Selling, general and
administrative expenses |
|
79,599 |
|
|
|
77,838 |
|
Depreciation and
amortization |
|
4,222 |
|
|
|
5,693 |
|
Transaction costs |
|
579 |
|
|
|
1,330 |
|
Change in fair value of
contingent consideration |
|
572 |
|
|
|
(1,409 |
) |
Net income from
operations |
|
6,471 |
|
|
|
26,536 |
|
|
|
|
|
Other expense (income): |
|
|
|
Interest expense – floor
plan |
|
7,812 |
|
|
|
4,779 |
|
Interest expense – other |
|
9,152 |
|
|
|
7,584 |
|
Other (income) expense,
net |
|
(247 |
) |
|
|
(639 |
) |
Total other expense, net |
|
16,717 |
|
|
|
11,724 |
|
Net (loss) income before
income tax expense |
|
(10,246 |
) |
|
|
14,812 |
|
Income tax (benefit)
expense |
|
(2,276 |
) |
|
|
3,384 |
|
Net (loss) income |
|
(7,970 |
) |
|
|
11,428 |
|
Net (income) attributable to
non-controlling interests |
|
(119 |
) |
|
|
(1,365 |
) |
Net loss (income) attributable to non-controlling interests of One
Water Marine Holdings, LLC |
|
919 |
|
|
|
(1,163 |
) |
Net (loss) income attributable
to OneWater Marine Inc. |
$ |
(7,170 |
) |
|
$ |
8,900 |
|
|
|
|
|
Net (loss) earnings per share
of Class A common stock – basic |
$ |
(0.49 |
) |
|
$ |
0.62 |
|
Net (loss) earnings per share
of Class A common stock – diluted |
$ |
(0.49 |
) |
|
$ |
0.61 |
|
|
|
|
|
Basic weighted-average shares
of Class A common stock outstanding |
|
14,540 |
|
|
|
14,297 |
|
Diluted weighted-average
shares of Class A common stock outstanding |
|
14,540 |
|
|
|
14,587 |
|
|
|
|
|
|
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ONEWATER MARINE INC.CONDENSED CONSOLIDATED
BALANCE SHEETS(In thousands, except par value and
share data)(Unaudited) |
|
|
|
|
|
December 31, 2023 |
|
December 31, 2022 |
ASSETS |
|
|
|
Cash |
$ |
44,569 |
|
$ |
43,535 |
Restricted cash |
|
9,584 |
|
|
14,673 |
Accounts receivable, net |
|
47,885 |
|
|
63,613 |
Inventories, net |
|
706,805 |
|
|
527,023 |
Prepaid expenses and other
current assets |
|
78,469 |
|
|
61,548 |
Total current assets |
|
887,312 |
|
|
710,392 |
Property and equipment,
net |
|
83,221 |
|
|
114,802 |
Operating lease right-of-use
assets |
|
133,699 |
|
|
126,760 |
Other long-term assets |
|
7,827 |
|
|
3,844 |
Deferred tax assets, net |
|
33,239 |
|
|
7,248 |
Intangible assets, net |
|
211,173 |
|
|
311,579 |
Goodwill |
|
336,602 |
|
|
397,468 |
Total assets |
$ |
1,693,073 |
|
$ |
1,672,093 |
|
|
|
|
LIABILITIES |
|
|
|
Accounts payable |
$ |
18,897 |
|
$ |
25,859 |
Other payables and accrued
expenses |
|
42,918 |
|
|
44,835 |
Customer deposits |
|
50,977 |
|
|
60,084 |
Notes payable – floor
plan |
|
562,815 |
|
|
425,368 |
Current portion of operating
lease liabilities |
|
14,843 |
|
|
13,410 |
Current portion of long-term
debt, net |
|
6,125 |
|
|
29,247 |
Current portion of tax
receivable agreement liability |
|
2,447 |
|
|
2,363 |
Total current liabilities |
|
699,022 |
|
|
601,166 |
Other long-term
liabilities |
|
13,967 |
|
|
19,850 |
Tax receivable agreement
liability |
|
40,688 |
|
|
43,991 |
Long-term operating lease
liabilities |
|
121,404 |
|
|
114,601 |
Long-term debt, net |
|
433,682 |
|
|
434,670 |
Total liabilities |
|
1,308,763 |
|
|
1,214,278 |
|
|
|
|
STOCKHOLDERS’ EQUITY |
|
|
|
Total stockholders’ equity
attributable to OneWater Marine Inc. |
|
352,987 |
|
|
396,043 |
Equity attributable to
non-controlling interests |
|
31,323 |
|
|
61,772 |
Total stockholders’ equity |
|
384,310 |
|
|
457,815 |
Total liabilities and stockholders’ equity |
$ |
1,693,073 |
|
$ |
1,672,093 |
|
|
|
|
|
|
ONEWATER MARINE INC.Reconciliation of
Non-GAAP Financial Measures(In thousands, except
per share data)(Unaudited) |
|
|
|
Three Months EndedDecember
31, |
|
2023 |
|
2022 |
Net (loss) income attributable to OneWater Marine Inc. |
$ |
(7,170 |
) |
|
$ |
8,900 |
|
Transaction costs |
|
579 |
|
|
|
1,330 |
|
Intangible amortization |
|
1,579 |
|
|
|
3,292 |
|
Change in fair value of
contingent consideration |
|
572 |
|
|
|
(1,409 |
) |
Other (income) expense,
net |
|
(247 |
) |
|
|
(639 |
) |
Net (loss) income attributable
to non-controlling interests of One Water Marine Holdings, LLC
(1) |
|
(223 |
) |
|
|
(234 |
) |
Adjustments to income tax
(benefit) expense (2) |
|
(520 |
) |
|
|
(538 |
) |
Adjusted net (loss) income
attributable to OneWater Marine Inc. |
|
(5,430 |
) |
|
|
10,702 |
|
|
|
|
|
Net (loss) earnings per share
of Class A common stock - diluted |
$ |
(0.49 |
) |
|
$ |
0.61 |
|
Transaction costs |
|
0.04 |
|
|
|
0.09 |
|
Intangible amortization |
|
0.11 |
|
|
|
0.23 |
|
Change in fair value of
contingent consideration |
|
0.04 |
|
|
|
(0.10 |
) |
Other (income) expense,
net |
|
(0.02 |
) |
|
|
(0.04 |
) |
Net (loss) income attributable
to non-controlling interests of One Water Marine Holdings, LLC
(1) |
|
(0.02 |
) |
|
|
(0.02 |
) |
Adjustments to income tax
(benefit) expense (2) |
|
(0.04 |
) |
|
|
(0.04 |
) |
Adjusted (loss) earnings per
share of Class A common stock - diluted |
$ |
(0.38 |
) |
|
$ |
0.73 |
|
|
|
|
|
(1) Represents an
allocation of the impact of reconciling items to our
non-controlling interest. |
(2) Represents an
adjustment of all reconciling items at an estimated effective tax
rate. |
|
ONEWATER MARINE INC.Reconciliation of
Non-GAAP Financial Measures(In thousands, except
per share data)(Unaudited) |
|
|
|
|
|
Three Months EndedDecember
31, |
|
Trailing twelve months ended December 31, |
|
2023 |
|
2022 |
|
2023 |
Net (loss) income |
$ |
(7,970 |
) |
|
$ |
11,428 |
|
|
$ |
(58,509 |
) |
Interest expense – other |
|
9,152 |
|
|
|
7,584 |
|
|
|
36,125 |
|
Income tax (benefit)
expense |
|
(2,276 |
) |
|
|
3,384 |
|
|
|
(9,072 |
) |
Depreciation and
amortization |
|
4,906 |
|
|
|
6,182 |
|
|
|
25,512 |
|
Stock-based compensation |
|
2,392 |
|
|
|
2,573 |
|
|
|
8,781 |
|
Change in fair value of
contingent consideration |
|
572 |
|
|
|
(1,409 |
) |
|
|
377 |
|
Transaction costs |
|
579 |
|
|
|
1,330 |
|
|
|
1,088 |
|
Loss on impairment |
|
— |
|
|
|
— |
|
|
|
147,402 |
|
Other (income) expense,
net |
|
(247 |
) |
|
|
(639 |
) |
|
|
1,345 |
|
Adjusted EBITDA |
$ |
7,108 |
|
|
$ |
30,433 |
|
|
$ |
153,049 |
|
|
|
|
|
|
|
Long-term debt (including
current portion) |
|
|
|
|
$ |
439,807 |
|
Less: cash |
|
|
|
|
|
(44,569 |
) |
Adjusted long-term net
debt |
|
|
|
|
$ |
395,238 |
|
|
|
|
|
|
|
Pro forma adjusted net debt
leverage ratio |
|
|
|
|
2.6 x |
|
|
|
|
|
|
About OneWater Marine Inc.
OneWater Marine Inc. is one of the largest and
fastest-growing premium marine retailers in the United States.
OneWater operates a total of 98 retail locations, 10 distribution
centers / warehouses and multiple online marketplaces in 18
different states, several of which are in the top twenty states for
marine retail expenditures. OneWater offers a broad range of
products and services and has diversified revenue streams, which
include the sale of new and pre-owned boats, finance and insurance
products, parts and accessories, maintenance, repair and other
services.
Non-GAAP Financial Measures and Key
Performance Indicators
This press release and our related earnings call contain certain
non-GAAP financial measures, including Adjusted EBITDA, Adjusted
Net (Loss) Income Attributable to OneWater Marine Inc., Adjusted
Diluted (Loss) Earnings Per Share and Adjusted Long-Term Net Debt,
as measures of our operating performance. Management believes these
measures may be useful in performing meaningful comparisons of past
and present operating results, to understand the performance of the
Company’s ongoing operations and how management views the business.
Reconciliations of reported GAAP measures to adjusted non-GAAP
measures are included in the financial schedules contained in this
press release. These measures, however, should not be construed as
an alternative to any other measure of performance determined in
accordance with GAAP. Because our non-GAAP financial measures may
be defined differently by other companies, our definition of these
non-GAAP financial measures may not be comparable to similarly
titled measures of other companies, thereby diminishing its
utility. We have not reconciled non-GAAP forward-looking measures,
including Adjusted EBITDA guidance, to their corresponding GAAP
measures due to the high variability and difficulty in making
accurate forecasts and projections, particularly with respect to
change in fair value of contingent consideration and transaction
costs. Change in fair value of contingent consideration and
transaction costs are affected by the acquisition, integration and
post-acquisition performance of our acquirees which is difficult to
predict and subject to change. Accordingly, reconciliations of
forward-looking Adjusted EBITDA are not available without
unreasonable effort.
Adjusted EBITDA
We define Adjusted EBITDA as net income (loss)
before interest expense – other, income tax (benefit) expense,
depreciation and amortization and other (income) expense, further
adjusted to eliminate the effects of items such as the change in
fair value of contingent consideration, gain (loss) on
extinguishment of debt, loss on impairment, stock-based
compensation and transaction costs. See reconciliation above.
Our board of directors, management team and
lenders use Adjusted EBITDA to assess our financial performance
because it allows them to compare our operating performance on a
consistent basis across periods by removing the effects of our
capital structure (such as varying levels of interest expense),
asset base (such as depreciation and amortization) and other items
(such as the change in fair value of contingent consideration, gain
or loss on extinguishment of debt, income tax (benefit) expense,
loss on impairment, stock-based compensation and transaction costs)
that impact the comparability of financial results from period to
period. We present Adjusted EBITDA because we believe it provides
useful information regarding the factors and trends affecting our
business in addition to measures calculated under GAAP. Adjusted
EBITDA is not a financial measure presented in accordance with
GAAP. We believe that the presentation of this non-GAAP financial
measure will provide useful information to investors and analysts
in assessing our financial performance and results of operations
across reporting periods by excluding items we do not believe are
indicative of our core operating performance.
Adjusted Net (Loss) Income Attributable to
OneWater Marine Inc. and Adjusted Diluted (Loss) Earnings Per
Share
We define Adjusted Net (Loss) Income
Attributable to OneWater Marine Inc. as Net Income (Loss)
Attributable to OneWater Marine Inc. before transaction costs,
intangible amortization, change in fair value of contingent
consideration, loss on impairment and other expense (income), all
of which are then adjusted for an allocation to the non-controlling
interest of OneWater Marine Holdings, LLC. Each of these
adjustments are subsequently adjusted for income tax at an
estimated effective tax rate. Management also reports Adjusted
Diluted (Loss) Earnings Per Share which presents all of the
adjustments to net income attributable to OneWater Marine Inc.
noted above on a per share basis. See reconciliation above.
Our board of directors, management team and
lenders use Adjusted Net (Loss) Income Attributable to OneWater
Marine Inc. and Adjusted Diluted (Loss) Earnings Per Share to
assess our financial performance because it allows them to compare
our operating performance on a consistent basis across periods by
removing the effects of unusual or one time charges and other items
(such as the change in fair value of contingent consideration,
intangible amortization, loss on impairment and transaction costs)
that impact the comparability of financial results from period to
period. We present these metrics because we believe they provide
useful information regarding the factors and trends affecting our
business in addition to measures calculated under GAAP. Adjusted
Net (Loss) Income Attributable to OneWater Marine Inc. and Adjusted
Diluted (Loss) Earnings Per Share are not financial measures
presented in accordance with GAAP. We believe that the presentation
of these non-GAAP financial measures will provide useful
information to investors and analysts in assessing our financial
performance and results of operations across reporting periods by
excluding items we do not believe are indicative of our core
operating performance.
Adjusted Long-Term Net Debt
We define Adjusted Long-Term Net Debt as
long-term debt (including current portion) less cash. We consider,
and we believe certain investors and analysts consider, adjusted
long-term net debt, as well as adjusted long-term net debt divided
by trailing twelve-month Adjusted EBITDA, to be an indicator of our
financial leverage.
Same-Store Sales
We define same-store sales as sales from our
Dealership segment, excluding new and acquired stores. New and
acquired stores become eligible for inclusion in the comparable
store base at the end of the store’s thirteenth month of operations
under our ownership and revenues are only included for identical
months in the same-store base periods. Stores relocated within an
existing market remain in the comparable store base for all
periods. Additionally, amounts related to closed stores are
excluded from each comparative base period. We use same-store sales
to assess the organic growth of our Dealership segment revenue. We
believe that our assessment on a same-store basis represents an
important indicator of comparative financial results and provides
relevant information to assess our performance.
Cautionary Statement Concerning
Forward-Looking Statements
This press release and statements made during
the above referenced conference call may contain “forward-looking
statements” within the meaning of the Private Securities Litigation
Reform Act of 1995, including regarding our strategy, future
operations, financial position, prospects, plans and objectives of
management, growth rate and its expectations regarding future
revenue, operating income or loss or earnings or loss per share. In
some cases, you can identify forward-looking statements because
they contain words such as “may,” “will,” “will be,” “will likely
result,” “should,” “expects,” “plans,” “anticipates,” “could,”
“would,” “foresees,” “intends,” “target,” “projects,”
“contemplates,” “believes,” “estimates,” “predicts,” “potential,”
“outlook” or “continue” or the negative of these words or other
similar terms or expressions that concern our expectations,
strategy, plans or intentions. These forward-looking statements are
not guarantees of future performance, but are based on management’s
current expectations, assumptions and beliefs concerning future
developments and their potential effect on us, which are inherently
subject to uncertainties, risks and changes in circumstances that
are difficult to predict. Our expectations expressed or implied in
these forward-looking statements may not turn out to be
correct.
Important factors, some of which are beyond our
control, that could cause actual results to differ materially from
our historical results or those expressed or implied by these
forward-looking statements include the following: effects of
industry wide supply chain challenges including a heightened
inflationary environment and our ability to maintain adequate
inventory, changes in demand for our products and services, the
seasonality and volatility of the boat industry, fluctuation in
interest rates, adverse weather events, our acquisition and
business strategies, the inability to comply with the financial and
other covenants and metrics in our credit facilities, cash flow and
access to capital, effects of the COVID-19 pandemic on the
Company’s business, risks related to the ability to realize the
anticipated benefits of any proposed acquisitions, including the
risk that proposed acquisitions will not be integrated
successfully, the timing of development expenditures, and other
risks. More information on these risks and other potential factors
that could affect our financial results is included in our filings
with the Securities and Exchange Commission, including in the “Risk
Factors” and “Management’s Discussion and Analysis of Financial
Condition and Results of Operations” sections of our Annual Report
on Form 10-K for the fiscal year ended September 30, 2023 and in
our subsequently filed Quarterly Reports on Form 10-Q, each of
which is on file with the SEC and available from OneWater Marine’s
website at www.onewatermarine.com under the “Investors” tab, and in
other documents OneWater Marine files with the SEC. Any
forward-looking statement speaks only as of the date as of which
such statement is made, and, except as required by law, we
undertake no obligation to update or revise publicly any
forward-looking statements, whether because of new information,
future events, or otherwise.
Investor or Media Contact:Jack
EzzellChief Financial OfficerIR@OneWaterMarine.com
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