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Fiscal First Quarter 2021 Highlights

  • Revenue increased 39% to $214.1 million
  • Same-store sales increased 38%
  • Net income increased to $11.8 million, or $0.71 per diluted share
  • Adjusted EBITDA1   increased to $16.7 million
  • Completed three of the largest acquisitions in company history

BUFORD, Ga., Feb. 04, 2021 (GLOBE NEWSWIRE) — OneWater Marine Inc. (NASDAQ: ONEW) (“OneWater” or the “Company”) today announced results for its fiscal first quarter ended December 31, 2020.         “The OneWater team delivered outstanding results in the fiscal first quarter, in what is seasonally the lowest sales quarter of our fiscal year, which highlights the agility of our sales and marketing team and the power of our digital platform. Our VIP and other in-house marketing events were well attended and highly successful, absent select organized boat shows, increasing sales nearly 40% year-over-year as boaters secured new boats in preparation for the upcoming boating season. With tight inventory across the industry, we worked to ensure customers had access to our nationwide inventory to select the boat they desired,” commented Austin Singleton, Chief Executive Officer at OneWater.

“We’ve had an eventful start to fiscal 2021 including closing on three of the largest acquisitions in OneWater history. These acquisitions historically generated in excess of $125 million in revenue on an annual basis and we are focused on integrating these businesses into the OneWater family and leveraging our successful post-acquisition playbook to implement improvements and introduce best practices. Our liquidity is strong, and we remain committed to executing our multi-tiered growth strategy through acquisitions and the expansion of our high-margin business, further driving long-term shareholder value,” Mr. Singleton concluded.

                 
For the Three Months Ended December 30     2020     2019   $ Change   % Change
     
    (unaudited, $ in thousands)
Revenues                
New boat sales   $ 151,828   $ 102,852   $ 48,976   47.6 %
Pre-owned boat sales     38,580     33,071     5,509   16.7 %
Finance & insurance income     5,963     4,325     1,638   37.9 %
Service, parts & other sales     17,712     13,450     4,262   31.7 %
Total revenues   $ 214,083   $ 153,698   $ 60,385   39.3 %
                 

Fiscal First Quarter 2021 Results

Revenue for the fiscal first quarter 2021 was $214.1 million, an increase of 39.3% compared to $153.7 million in fiscal first quarter 2020, due primarily to a significant increase in new unit sales and a modest increase in the average unit price of new and pre-owned boats. During the fiscal first quarter 2021 same-store sales increased 38% on top of a 17% increase in the comparable period of 2020.

Gross profit totaled $52.4 million for the fiscal first quarter 2021, compared to $32.2 million for the fiscal first quarter 2020. Gross profit margin of 24.5% for the three months ended December 31, 2020 increased 360 basis points compared to the prior year primarily due to a shift in the mix and size of boat models sold, the Company’s focus on dynamic pricing, increases in service, parts & other sales and finance & insurance.

Fiscal first quarter 2021 selling, general and administrative expenses (“SG&A”) totaled $34.9 million, or 16.3% of revenue, compared to $28.3 million, or 18.4% of revenue, in the fiscal first quarter of 2020. The decrease in selling, general and administrative expenses as a percentage of revenue was primarily due to the Company’s ability to leverage its existing expense structure to support the increase in revenue, reduction in selling expenses, including boat shows, partially offset by an increase in public company expenses.

Net income for the fiscal first quarter of 2021 increased sharply to $11.8 million, compared to a net loss of $1.1 million in the fiscal first quarter of 2020. The significant increase was primarily due to higher sales and gross margins on boats sold in the period, an increase in SG&A and a reduction in interest expense.

Fiscal first quarter 2021 Adjusted EBITDA (see reconciliation of Non-GAAP financial measures below) increased to $16.7 million, compared to $1.2 million for the fiscal first quarter of 2020.

As of December 31, 2020, the Company’s cash and cash equivalents balance was $26.0 million, an increase of $15.5 million compared to $10.5 million as of December 31, 2019.

The combined $83.9 million in total purchase price for the recent acquisitions, including the real estate associated with Roscioli Yachting Center, was funded by $47.6 million of cash, $30.0 Million from the Company’s revolving line of credit, $2.1 million in seller notes payable and $4.2 million in estimated acquisition contingent consideration. Subsequent to quarter-end, the Company expanded its Term Loan credit facility by $30 million and used the proceeds to pay down the revolving line of credit. In addition to cash and its revolving line of credit, the Company had additional liquidity under the floor plan credit facility. Total inventory as of December 31, 2020 increased sequentially to $196.1 million compared to $150.1 million on September 30, 2020, primarily due to the anticipated seasonal increase and manufacturer replenishments.

Fiscal Year 2021 Guidance

For fiscal full year 2021, OneWater anticipates same store sales to increase by mid-single digits. Including the three acquisitions that closed in the fiscal first quarter of 2021, the Company now expects Adjusted EBITDA for the full fiscal year to be in the range of $95 million to $100 million and diluted earnings per share to be in the range of $4.00 to $4.20, excluding any additional acquisitions that might be completed during the year.

Conference Call and Webcast

OneWater will host a conference call to discuss its fiscal first quarter earnings on Thursday, February 4, 2021 at 8:30 am Eastern time. The conference call may be accessed by dialing (866) 220-5793 in the U.S./Canada or (615) 622-8064 for participants outside the U.S./Canada using the Conference ID #8459613. This call is being webcast and 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.

About OneWater Marine Inc.

OneWater Marine Inc. is one of the largest and fastest-growing premium recreational boat retailers in the United States. OneWater operates 69 stores throughout 10 different states, seven 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, parts and accessories, finance and insurance products, maintenance and repair services and ancillary services such as boat storage.

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 as a measure 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 acquisition contingent consideration and transaction costs. Acquisition 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 is not available without unreasonable effort.

Adjusted EBITDA

We define Adjusted EBITDA as net income (loss) before interest expense – other, income tax expense, depreciation and amortization and other (income) expense, further adjusted to eliminate the effects of items such as the change in the fair value of warrant liability, gain (loss) on contingent consideration, gain (loss) on extinguishment of debt and transaction costs. See reconciliation below.

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 fair value adjustment of the warrants, gain or loss on contingent consideration, gain or loss on extinguishment of debt 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.

Same-Store Sales

We define same-store sales as sales from our stores 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 revenue on a same-store basis. 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: changes in demand for our products and services, the seasonality and volatility of the boat industry, our acquisition 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, 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, 2020, filed with the SEC on December 3, 2020. 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

1 See reconciliation of Non-GAAP financial measures below.

Net income (loss) attributable to common interest holders        
ONEWATER MARINE INC.CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
($ in thousands except per share data)(Unaudited)
 
    For the three months ended December 31,
      2020       2019  
Revenues        
New boat sales   $ 151,828     $ 102,852  
Pre-owned boat sales     38,580       33,071  
Finance & insurance income     5,963       4,325  
Service, parts & other sales     17,712       13,450  
Total revenues     214,083       153,698  
         
Gross Profit        
New boat     29,296       16,897  
Pre-owned boat     8,128       5,205  
Finance & insurance     5,963       4,325  
Service, parts & other     9,049       5,762  
Total gross profit     52,436       32,189  
         
Selling, general and administrative expenses     34,860       28,305  
Depreciation and amortization     963       760  
Transaction costs     200       437  
Loss on contingent consideration     377        
Income from operations     16,036       2,687  
         
Other expense (income)        
Interest expense – floor plan     920       2,659  
Interest expense – other     924       1,853  
Change in fair value of warrant liability           (771)  
Other (income) expense, net     (94)       13  
Total other expense, net     1,750       3,754  
Income (loss) before income tax expense     14,286       (1,067)  
Income tax expense     2,511        
Net income (loss)     11,775       (1,067)  
Less: Net income attributable to non-controlling interests         247  
Net loss attributable to One Water Marine Holdings, LLC       $ (1,314)  
Less: Net income attributable to non-controlling interests of One Water Marine Holdings, LLC     (3,987)      
Net income attributable to OneWater Marine Inc   $ 7,788      
         
Earnings per share of Class A common stock – basic   $ 0.72      
Earnings per share of Class A common stock – diluted   $ 0.71      
         
Basic weighted-average shares of Class A common stock outstanding     10,776      
Diluted weighted-average shares of Class A common stock outstanding     10,986      
         
ONEWATER MARINE INC.CONDENSED CONSOLIDATED BALANCE SHEETS
($ in thousands, except par value and share data)(Unaudited)
         
    December 31, 2020   December 31, 2019
Cash   $ 25,952     $ 10,461
Restricted cash     3,984       250
Accounts receivable, net     14,499       9,574
Inventories     196,114       313,837
Prepaid expenses and other current assets     13,307       11,945
Total current assets     253,856       346,067
         
Property and equipment, net     62,833       17,489
         
Other assets:        
Deposits     392       345
Deferred tax assets     14,690      
Identifiable intangible assets     74,004       61,304
Goodwill     142,274       113,059
Total other assets     231,360       174,708
Total assets   $ 548,049     $ 538,264
         
Accounts payable   $ 10,545     $ 5,610
Other payables and accrued expenses     14,161       14,188
Customer deposits     23,386       7,736
Notes payable – floor plan     170,320       264,481
Current portion of long-term debt     10,481       6,823
Total current liabilities     228,893       298,838
         
Other long-term liabilities     5,651       1,569
Warrant liability           50,116
Tax receivable agreement liability     17,556      
Long-term debt, net of current portion and unamortized debt issuance costs…………………………………………………….………………..     111,466       67,013
Total liabilities     363,566       417,536
         
Redeemable preferred interest in subsidiary           87,053
         
Members’ equity           27,961
Preferred stock, $0.01 par value, 1,000,000 shares authorized,      none issued and outstanding as of December 31, 2020 and      December 31, 2019          
Class A common stock, $0.01 par value, 40,000,000 shares authorized,     10,867,291 shares issued and outstanding as of December 31, 2020     and none issued and outstanding as of December 31, 2019     109      
Class B common stock, $0.01 par value, 10,000,000 shares authorized,     4,108,007 shares issued and outstanding as of December 31, 2020     and none issued and outstanding as of December 31, 2019     41      
Additional paid-in capital     111,859      
Retained earnings     24,545      
Total stockholders’ equity attributable to OneWater Marine Inc. and members’ equity     136,554       27,961
Equity attributable to non-controlling interests     47,929       5,714
Total stockholders’ and members’ equity     184,483       33,675
Total liabilities, stockholders’ and members’ equity   $ 548,049     $ 538,264
         
ONEWATER MARINE INC.Reconciliation of Net Income to Adjusted EBITDA
($ in thousands)(Unaudited)
    For the three months ended December 31,
Description     2020       2019  
Net income (loss)   $ 11,775     $ (1,067)  
Interest expense – other     924       1,853  
Income tax expense     2,511        
Depreciation and amortization     963       760  
Loss on contingent consideration     377        
Transaction costs     200       437  
Change in fair value of warrant liability           (771)  
Other (income) expense, net     (94)       13  
Adjusted EBITDA   $ 16,656     $ 1,225  
         

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Source: OneWater Marine Inc.



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