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OneWater Marine announces fiscal fourth quarter and full-year 2021 results

by OneWater Marine 19 Nov 2021 11:46 PST
OneWater Marine Inc. updates on its business operations © OneWater Marine Inc

Fiscal Year 2021 Highlights

  • Record revenue of $1.23 billion increased 20%
  • Gross profit margin expanded 610 basis points to 29%
  • Net income increased 140% to $116 million
  • Net income per diluted share attributable to OneWater was $6.96
  • Adjusted EBITDA1 increased 88% to $156 million
  • Completed 5 strategic acquisitions with 3 additional expected to close in the first quarter 2022

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

"The OneWater team delivered record revenue and earnings in fiscal year 2021 despite a challenging supply chain environment that limited production at OEMs. In fact, customer demand has continued at historic levels with no signs of slowing, which we expect will support further growth well into the coming year," commented Austin Singleton, Chief Executive Officer at OneWater.

"At the same time, we are realizing tremendous growth in our higher-margin areas of the business and our acquisition strategy has maintained an accelerated pace including the notable addition of PartsVu, as well as the pending acquisition of T-H Marine. Based on our attractive M&A pipeline, we expect 2022 to be another robust deal year. We have clearly hit our stride, which is reflected in the dedication and commitment across the team and will continue to position OneWater to outperform the market."

Fiscal fourth quarter 2021 results

Revenue for the fiscal fourth quarter 2021 was $280.3 million, an increase of 3.4% compared to $271.0 million in fiscal fourth quarter 2020. Industry-wide supply chain challenges slowed sales of new and pre-owned boats in the fiscal fourth quarter 2021, compared to the prior year. Finance & insurance income was up 25.0% compared to the prior year and service, parts and other sales was up 33.3% as a result of the Company's strategic focus on expanding the high margin, less cyclical service and parts business.

During the fiscal fourth quarter 2021 same-store sales decreased 8%, following a 25% increase in the fourth quarter 2020 and is the result of the industry-wide inventory shortages. Absent the inventory challenges, same-store sales would have been positive.

Gross profit totaled $89.3 million for the fiscal fourth quarter 2021, up $25.2 million from $64.1 million for the fiscal fourth quarter 2020. Gross profit margin of 31.9% increased 830 basis points compared to the prior year driven by the shift in the mix and size of boats sold and the sharp increase in high margin service, parts & other sales during the quarter.

Fiscal fourth quarter 2021 selling, general and administrative expenses totaled $55.4 million, or 19.8% of revenue, compared to $39.8 million, or 14.7% of revenue, in the fiscal fourth quarter of 2020. The increase in selling, general and administrative expenses as a percentage of revenue was due mainly to higher variable personnel costs and increased costs given the current personnel and supply chain environment.

Net income for the fiscal fourth quarter of 2021 totaled $22.5 million, compared to $6.0 million in the fiscal fourth quarter of 2020. The significant increase was primarily due to the heightened level of gross profit for the period, partially offset by changes in SG&A and other expenses. Earnings per diluted share for the fiscal fourth quarter of 2021 was $1.35 per diluted share, compared to $0.30 per diluted share in 2020.

Fiscal fourth quarter 2021 Adjusted EBITDA increased 46% to $33.6 million, compared to $22.9 million for the fiscal fourth quarter of 2020 (see reconciliation of Non-GAAP financial measures).

Fiscal year ended September 30, 2021 results

Record revenue for the fiscal year ended September 30, 2021, increased 20.1% to $1,228.2 million from $1,023.0 million for the fiscal year ended September 30, 2020, driven by an increase in average unit price of new and pre-owned boats and a 52.0% increase in service, parts and other sales compared to the prior year. Same store sales increased 10% compared to the prior year.

Gross profit totaled $357.5 million for the fiscal year 2021, compared to $235.5 million for the fiscal year 2020. Gross profit margin of 29.1% increased 610 basis points compared to the prior year primarily due to the increase in the margin achieved on boat sales and increases in higher margin finance & insurance income and service, parts & other gross profit.

Fiscal year 2021 selling, general and administrative expenses totaled $199.0 million, or 16.2% of revenue, compared to $143.6 million, or 14.0% of revenue in fiscal year 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 fiscal year and increased costs given the current personnel and supply chain environment.

Net income for fiscal year 2021 totaled $116.4 million compared to $48.5 million in fiscal year 2020, an increase of 140.0%. The increase is primarily due to the increase in sales and gross margins in 2021. Earnings per diluted share for the fiscal year of 2021 was $6.96 per diluted share, compared to $2.77 per diluted share in 2020.

Fiscal 2021 Adjusted EBITDA increased 87.6% to $155.8 million, compared to $83.1 million in fiscal year 2020 (see reconciliation of non-GAAP financial measures).

As of September 30, 2021, the Company's cash and cash equivalents balance was $62.6 million, a decrease of $3.5 million compared to $66.1 million as of September 30, 2020. Total inventory as of September 30, 2021, increased sequentially to $143.9 million compared to $116.9 million on June 30, 2021. As expected, the Company was able to start building inventory levels following a robust summer selling season. Total long-term debt at September 30, 2021 was $114.4 million, less cash and cash equivalents yields net debt of $51.8 million.

Fiscal Year 2022 Guidance

For fiscal full year 2022, OneWater anticipates same store sales to be up high-single digits, despite an expected challenging inventory environment. Adjusted EBITDA is expected to be in the range of $170 million to $175 million and earnings per diluted share to be in the range of $7.20 to $7.50, both of which exclude the previously announced T-H Marine and Norfolk Marine acquisitions and others that may be completed during the year.

Conference Call and Webcast

OneWater will host a conference call to discuss its fiscal first quarter earnings on Thursday, November 18, 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 #7528439. 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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