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Onewater Marine announces fiscal third quarter 2021 results

by OneWater Marine 30 Jul 07:57 PDT
OneWater Marine Inc. updates on its business operations © OneWater Marine Inc

OneWater Marine Inc. (NASDAQ: ONEW) ("OneWater" or the "Company") today announced results for its fiscal third quarter ended June 30, 2021.

  • Revenue of $404.2 million, despite industry-wide inventory challenges
  • Gross profit margin expands more than 800 basis points to 31%
  • Record Net income increased 27% to $51.6 million, or $3.04 per diluted share
  • Record Adjusted EBITDA1 increased 33% to $65.5 million
  • Announced special dividend of $1.80 per share Class A Common Stock

"The OneWater team delivered strong third quarter results, expanding gross margin by more than 800 basis points and growing earnings per diluted share to $3.04, despite the lean inventory environment. Our sales associates have done an outstanding job meeting the heightened customer demand by effectively utilizing our powerful digital inventory tools to drive sales. Additionally, we made tremendous progress on building our higher margin service, parts and other business which further supported our growth in the quarter," commented Austin Singleton, Chief Executive Officer at OneWater.

"Our operational efficiencies and superior execution to date further underscore OneWater's resiliency. We continue to deliver on our multi-faceted growth strategy through strategic acquisitions and growing our higher margin, less cyclical service, parts and other business to expand market share and drive long-term shareholder value," Mr. Singleton concluded.

Fiscal Third Quarter 2021 Results

Revenue for the fiscal third quarter 2021 was $404.2 million, a decrease of 1.0% compared to $408.3 million in fiscal third quarter 2020. Industry-wide inventory challenges hampered sales of new and pre-owned boats in the fiscal third quarter 2021, compared to the prior year. Finance & insurance income was down in-line with boat sales. Partially offsetting this was a 58% increase in service, parts & other sales which grew $10.9 million in the fiscal third quarter 2021 as a result of the Company's intensified focus on expanding this high margin, less cyclical business.

During the fiscal third quarter 2021 same-store sales decreased 11%, following a 44% increase in the third quarter 2020 and is the result of the industry-wide supply-chain challenges. Same store sales for the third quarter and year-to-date 2021 when compared to the comparable periods in 2019 were 14% and 26%, respectively.

Gross profit totaled $127.0 million for the fiscal third quarter 2021, up $32.3 million from $94.7 million for the fiscal third quarter 2020. Gross profit margin of 31.4% increased 822 basis points compared to the prior year driven by the mix of boats sold and the sharp increase in high margin service, parts & other sales during the quarter.

Fiscal third quarter 2021 selling, general and administrative expenses totaled $60.5 million, or 15.0% of revenue, compared to $43.1 million, or 10.6% of revenue, in the fiscal third quarter of 2020. The increase in selling, general and administrative expenses as a percentage of revenue was due mainly to higher variable personnel costs driven by the increased level of profitability in the current year.

Net income for the fiscal third quarter of 2021 totaled $51.6 million, compared to $40.6 million in the fiscal third quarter of 2020. The significant increase was primarily due the mix of boats sold, the heightened level of gross profit during the quarter and the increase in service, parts & other sales.

Fiscal third quarter 2021 Adjusted EBITDA (see reconciliation of Non-GAAP financial measures) increased to $65.5 million, compared to $49.3 million for the fiscal third quarter of 2020.

As of June 30, 2021, the Company's cash and cash equivalents balance was $113.2 million, an increase of $25.3 million compared to $88.0 million as of June 30, 2020. Total inventory as of June 30, 2021 decreased sequentially to $116.9 million compared to $186.1 million on March 31, 2021, due to the supply-chain shortages across the industry. Total long-term debt at June 30, 2021 was $115.7 million, less cash and cash equivalents yield net debt of $2.5 million, before the July 19, 2021 dividend payment.

Fiscal year 2021 guidance

The Company is raising its fiscal full year 2021 outlook for Adjusted EBITDA to be in the range of $150 million to $155 million and diluted earnings per share to be in the range of $6.60 to $6.80, excluding any acquisitions that may be completed later in the year. However, based on continued broad-based inventory challenges in the industry near-term, OneWater now expects same store sales to increase approximately 10%. This outlook assumes OneWater's manufacturers can maintain production at the current pace allowing us to deliver presold units and build inventory, in the face of industry-wide supply chain constraints.

Conference call and webcast

OneWater will host a conference call to discuss its fiscal first quarter earnings on Thursday, July 29, 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 #8777164. This call is being webcast and can be accessed through the "Events" section of the Company's website at investor.onewatermarine.com where it will be archived for one year.

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