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OneWater Marine Inc. provides COVID-19 business update

by Jack Ezzell 28 Mar 09:55 PDT
OneWater Marine Inc. updates on its business operations © OneWater Marine Inc.

OneWater Marine Inc. (NASDAQ: ONEW) ("OneWater") has shared an update on its business operations in response to the global COVID-19 pandemic.

"The uncertainty as a result of COVID-19, and the ultimate impact on the macro-economic environment, is unlike anything we have ever seen. In this moment, the health and safety of our employees, dealers and customers remains our top priority," Austin Singleton, Chief Executive Officer of OneWater Marine commented. "The OneWater team is adapting quickly, and we are, of course, monitoring the situation closely and making any necessary adjustments in our operations to ensure we are following guidelines issued by the World Health Organization (WHO), the Centers for Disease Control and Prevention (CDC) and federal, state or local authorities. In light of the current environment, our service departments are working hard to deliver boats and keep customers on the water, while our sales team members are fully engaged with customers and providing them with virtual walkthroughs of inventory and/or private, at home or on water, showings."

"Prior to the last two weeks, our fiscal second quarter 2020 results were tracking in-line with our expectations, as same-store sales growth remained strong in January and February. That said, we are still selling and delivering boats, just not at the same pace as earlier this month. We are now expecting total revenue for the quarter ended March 31, 2020 to be roughly flat versus the prior year. As we have previously discussed, our business model supports cycle resilience, and our team has moved quickly to ensure we are taking prudent actions to mitigate changing market conditions as they materialize. In addition, we believe we are financially strong, with financial flexibility and a seasoned management team to withstand a downturn cycle scenario."

"While we are facing uncertain times, we have taken immediate actions, according to our 2008 playbook, to reduce expenses and mitigate the impact from this disruption. We are focused on maintaining positive relationships with our boat manufacturing partners and providing best-in-class service to our customers. As we continue to navigate through this challenging business environment, we remain committed to driving value for OneWater shareholders over the long-term," Singleton concluded.

Financial Strength and Flexibility

As of March 24, 2020, OneWater had cash on hand of approximately $10 million and $10 million of available borrowings on its revolver. In addition, at any given time, the Company has additional liquidity of approximately $5 to $10 million in the form of unlevered inventory. In March 2020, OneWater also invoked its option to defer payment of interest on its Senior Term Loan Facility for a period of 12 months, which will reduce annual cash interest payments by approximately $8.5 million. There are no principal payments due on the Senior Term Loan Facility until March 2022.

Fiscal Year 2020 Outlook

In light of the significant uncertainty that exists as a result of the COVID-19 virus, OneWater has withdrawn its fiscal year 2020 guidance provided on the Company's fiscal first quarter 2020 earnings call on February 27, 2020. The Company expects to provide additional updates on its fiscal second quarter 2020 earnings call.

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