Fiscal First Quarter 2023 Highlights
- Revenue increased 9% to
$367 million , a new fiscal first quarter record - Service, parts & other revenue surged 86% to
$70 million - Same-store sales decreased 14% as seasonality returns
- Gross profit margin of 30%, remains strong as expected
- Net income was
$11 million in the quarter or$0.61 per diluted share - Adjusted EBITDA1 of
$28 million - Completed two strategic dealership acquisitions
“Our first quarter results came in largely as we anticipated as the industry experienced a return to more normalized seasonality, with revenue growing high-single digits, on top of a 57% increase in the prior year. Notably, our high margin service, parts and other sales grew 86%, driven by strategic acquisitions over the last 18-months, strengthening our overall gross margins as expected,” commented
“Over the past two years, OneWater has successfully executed on our growth and diversification strategy, adding 38 dealership locations and building out our parts and service platform. As the industry returns to historical seasonal cycles, we believe our flexible and diversified operating model positions us to continue to outperform the market and return value to our shareholders.”
For the Three Months Ended | 2022 | 2021 | $ Change | % Change | |||||||||
Revenues | (unaudited, $ in thousands) | ||||||||||||
New boat | $ | 232,405 | $ | 236,198 | $ | (3,793 | ) | (1.6 | %) | ||||
Pre-owned boat | 55,778 | 53,449 | 2,329 | 4.4 | % | ||||||||
Finance & insurance income | 8,934 | 9,307 | (373 | ) | (4.0 | )% | |||||||
Service, parts & other | 69,542 | 37,318 | 32,224 | 86.3 | % | ||||||||
Total revenues | $ | 366,659 | $ | 336,272 | $ | 30,387 | 9.0 | % | |||||
Fiscal First Quarter 2023 Results
Revenue for fiscal first quarter 2023 was
New boat revenue decreased 1.6%, driven by a decrease in unit sales, muted by an increase in average unit price. Pre-owned boat revenue increased 4.4% compared to the prior year quarter, driven by an increase in unit sales. Finance & insurance income decreased 4.0% compared to the prior year quarter. Service, Parts and other sales were up 86.3% compared to the prior year quarter, largely as a result of the Company’s strategic focus on expanding its high margin, less cyclical revenue streams.
Gross profit totaled
Fiscal first quarter 2023 selling, general and administrative expenses totaled
Net income for fiscal first quarter 2023 totaled
Fiscal first quarter 2023 Adjusted EBITDA1 decreased 32.0% to
As of
Total long-term debt as of
Fiscal Year 2023 Guidance
The Company’s is updating its previously issued fiscal full year 2023 outlook. For fiscal full year 2023, OneWater now anticipates same store sales to be flat to up mid-single digits. Adjusted EBITDA2 is expected to be in the range of
Conference Call and Webcast
OneWater will host a conference call to discuss its fiscal first quarter earnings on
https://register.vevent.com/register/BI7ed348a781b44352aadaa744402ac065
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.
1 See reconciliation of Non-GAAP financial measures below.
2 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.
CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||||
($ in thousands except per share data) (Unaudited) | |||||||||||||
Three Months Ended | |||||||||||||
2022 | 2021 | ||||||||||||
Revenues | |||||||||||||
New boat | $ | 232,405 | $ | 236,198 | |||||||||
Pre-owned boat | 55,778 | 53,449 | |||||||||||
Finance & insurance income | 8,934 | 9,307 | |||||||||||
Service, parts & other | 69,542 | 37,318 | |||||||||||
Total revenues | 366,659 | 336,272 | |||||||||||
Gross Profit | |||||||||||||
New boat | 57,147 | 60,302 | |||||||||||
Pre-owned boat | 15,474 | 14,079 | |||||||||||
Finance and insurance | 8,934 | 9,307 | |||||||||||
Service, parts & other | 28,433 | 17,277 | |||||||||||
Total gross profit | 109,988 | 100,965 | |||||||||||
Selling, general and administrative expenses | 77,838 | 59,096 | |||||||||||
Depreciation and amortization | 5,693 | 1,749 | |||||||||||
Transaction costs | 1,330 | 3,045 | |||||||||||
Change in fair value of contingent consideration | (1,409 | ) | 5,746 | ||||||||||
Income from operations | 26,536 | 31,329 | |||||||||||
Other expense (income) | |||||||||||||
Interest expense – floor plan | 4,779 | 877 | |||||||||||
Interest expense – other | 7,584 | 1,529 | |||||||||||
Other (income) expense, net | (639 | ) | 548 | ||||||||||
Total other expense, net | 11,724 | 2,954 | |||||||||||
Income before income tax expense | 14,812 | 28,375 | |||||||||||
Income tax expense | 3,384 | 4,889 | |||||||||||
Net income | 11,428 | 23,486 | |||||||||||
Less: Net income attributable to non-controlling interests | (1,365 | ) | - | ||||||||||
Less: Net income attributable to non-controlling interests of | (1,163 | ) | (3,467 | ) | |||||||||
Net income attributable to | $ | 8,900 | $ | 20,019 | |||||||||
Earnings per share of Class A common stock – basic | $ | 0.62 | $ | 1.50 | |||||||||
Earnings per share of Class A common stock – diluted | $ | 0.61 | $ | 1.45 | |||||||||
Basic weighted-average shares of Class A common stock outstanding | 14,297 | 13,380 | |||||||||||
Diluted weighted-average shares of Class A common stock outstanding | 14,587 | 13,761 |
CONSOLIDATED BALANCE SHEETS | ||||||
($ in thousands, except par value and share data) | ||||||
(Unaudited) | ||||||
2022 | 2021 | |||||
Assets | ||||||
Current assets: | ||||||
Cash | $ | 43,535 | $ | 67,908 | ||
Restricted cash | 14,673 | 6,861 | ||||
Accounts receivable, net | 63,613 | 37,643 | ||||
Inventories, net | 527,023 | 248,212 | ||||
Prepaid expenses and other current assets | 61,548 | 34,321 | ||||
Total current assets | 710,392 | 394,945 | ||||
Property and equipment, net | 114,802 | 74,638 | ||||
Operating lease right-of-use assets | 126,760 | 118,054 | ||||
Other assets: | ||||||
Other assets | 3,844 | 539 | ||||
Deferred tax assets, net | 7,248 | 32,956 | ||||
Intangible assets, net | 311,579 | 121,244 | ||||
397,468 | 419,675 | |||||
Total other assets | 720,139 | 574,414 | ||||
Total assets | $ | 1,672,093 | $ | 1,162,051 | ||
Liabilities and Stockholders’ Equity | ||||||
Current liabilities: | ||||||
Accounts payable | $ | 25,859 | $ | 33,262 | ||
Other payables and accrued expenses | 44,835 | 30,096 | ||||
Customer deposits | 60,084 | 56,986 | ||||
Notes payable – floor plan | 425,368 | 195,638 | ||||
Current portion of operating lease liabilities | 13,410 | 11,173 | ||||
Current portion of long-term debt, net | 29,247 | 19,420 | ||||
Current portion of tax receivable agreement liability | 2,363 | 915 | ||||
Total current liabilities | 601,166 | 347,490 | ||||
Long-term Liabilities: | ||||||
Other long-term liabilities | 19,850 | 29,617 | ||||
Tax receivable agreement liability | 43,991 | 45,290 | ||||
Noncurrent operating lease liabilities | 114,601 | 107,452 | ||||
Long-term debt, net | 434,670 | 327,008 | ||||
Total liabilities | 1,214,278 | 856,857 | ||||
Stockholders’ Equity: | ||||||
Preferred stock, | - | - | ||||
Class A common stock, | 143 | 139 | ||||
Class B common stock, | 14 | 14 | ||||
Additional paid-in capital | 182,113 | 166,411 | ||||
Retained earnings | 213,770 | 94,529 | ||||
Accumulated other comprehensive income | 3 | - | ||||
Total stockholders’ equity attributable to | 396,043 | 261,093 | ||||
Equity attributable to non-controlling interests | 61,772 | 44,101 | ||||
Total stockholders’ equity | 457,815 | 305,194 | ||||
Total liabilities and stockholders’ equity | $ | 1,672,093 | $ | 1,162,051 |
Reconciliation of Non-GAAP Financial Measures (amounts in thousands, except per share data) (Unaudited) | ||||||||||||
Three months ended | Trailing twelve months ended | |||||||||||
2022 | 2021 | 2022 | ||||||||||
Net income | $ | 11,428 | $ | 23,486 | $ | 140,553 | ||||||
Interest expense – other | 7,584 | 1,529 | 19,256 | |||||||||
Income tax expense | 3,384 | 4,889 | 41,720 | |||||||||
Depreciation and amortization | 6,182 | 1,749 | 20,730 | |||||||||
Change in fair value of contingent consideration | (1,409 | ) | 5,746 | 3,225 | ||||||||
Loss on extinguishment of debt | - | - | 356 | |||||||||
Transaction costs | 1,330 | 3,045 | 6,009 | |||||||||
Other (income) expense, net | (639 | ) | 548 | 2,606 | ||||||||
Adjusted EBITDA | $ | 27,860 | $ | 40,992 | $ | 234,455 | ||||||
About
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 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 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 fair value of contingent consideration, gain (loss) on extinguishment of debt 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 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 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.
Dealership Same-Store Sales
We define Dealership 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 Dealership 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: 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 and related governmental actions or restrictions 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
Investor or Media Contact:
Chief Financial Officer
IR@OneWaterMarine.com
Source:
2023 GlobeNewswire, Inc., source