OneWater Marine Inc. announces Fiscal Second Quarter 2022 Results
by OneWater Marine 5 May 2022 08:23 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 second quarter ended March 31, 2022.
"We had another exceptional quarter, delivering 34% revenue growth, expanding gross margins by 530 basis points and driving EPS up 39% year-over-year. In the fiscal second quarter, we also completed the acquisitions of JIF Marine and YakGear, accelerating our parts and services revenue that saw a 178% increase, while at the same time further diversifying our business," commented Austin Singleton, Chief Executive Officer at OneWater. "Cycling an incredible quarter last year, we also saw an increase of 8% in same store sales, demonstrating the strength of our team, platform and inventory management tools."
"During the quarter, we announced our inaugural share repurchase program, highlighting the Board's conviction of our strategy and long-term value creation opportunity. Combining a strong foundation with our multi-pronged, tried and true acquisition playbook, we continue to work towards driving returns for our shareholders for many years to come," concluded Mr. Singleton.
| For the Three Months Ended March 31 |
|
2022 |
|
2021 |
|
$ Change |
|
% Change |
| |
|
(unaudited, $ in thousands) |
| Revenues |
|
|
|
|
|
|
|
|
| New boat |
|
$ |
290,020 |
|
$ |
239,654 |
|
$ |
50,366 |
|
21.0 |
% |
| Pre-owned boat |
|
|
75,854 |
|
|
56,082 |
|
|
19,772 |
|
35.3 |
% |
| Finance & insurance income |
|
|
14,948 |
|
|
11,789 |
|
|
3,159 |
|
26.8 |
% |
| Service, parts & other |
|
|
61,305 |
|
|
22,086 |
|
|
39,219 |
|
177.6 |
% |
| Total revenues |
|
$ |
442,127 |
|
$ |
329,611 |
|
$ |
112,516 |
|
34.1 |
% |
____________
* See reconciliation of Non-GAAP financial measures below.
Fiscal Second Quarter 2022 Results
Revenue for fiscal second quarter 2022 was $442.1 million, an increase of 34.1% compared to $329.6 million in fiscal second quarter 2021, and was primarily due to our increase in same-store sales and revenue from acquired businesses, with strong contribution from acquired revenues related to service, parts and other sales. During fiscal second quarter 2022 same-store sales increased 8%, following a 57% increase in second quarter 2021, as a result of the continued strong demand environment. New and pre-owned boat revenue increased 21.0% and 35.3%, respectively, driven by a significant increase in the average unit price of new boats and a modest increase in the average unit price of pre-owned boats. Finance & insurance income was up 26.8% compared to the prior year and service, parts and other sales was up 177.6% as a result of the Company's acquisition activity to expand the higher margin, less cyclical service, parts & other revenues.
Gross profit totaled $142.5 million for fiscal second quarter 2022, up $53.8 million from $88.8 million for fiscal second quarter 2021. Gross profit margin of 32.2% increased 530 basis points compared to the prior year period driven by the shift in the mix and size of boats sold, dynamic pricing and the sharp increase in higher margin service, parts & other sales during the quarter.
Fiscal second quarter 2022 selling, general and administrative expenses totaled $75.5 million, or 17.1% of revenue, compared to $48.3 million, or 14.7% of revenue, in fiscal second quarter 2021. 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.
Net income for fiscal second quarter 2022 totaled $42.4 million, compared to $30.6 million in fiscal second quarter 2021. The significant increase was primarily due to the elevated gross profit and significant increase in service, parts and other income during the period.
Earnings per diluted share for fiscal second quarter 2022 was $2.54 per diluted share, compared to $1.83 per diluted share in 2021. For fiscal second quarter 2022, charges related to transaction costs and contingent consideration adversely impacted diluted earnings per share. This amount, tax effected at 25%, was $0.13 per share.
Fiscal second quarter 2022 Adjusted EBITDA increased 64.7% to $66.1 million, compared to $40.1 million for fiscal second quarter 2021 (see reconciliation of non-GAAP financial measures).
As of March 31, 2022, the Company's cash and cash equivalents balance was $83.0 million, an increase of $6.3 million compared to $76.7 million as of March 31, 2021. Total inventory as of March 31, 2022, increased sequentially to $293.2 million compared to $248.2 million on December 31, 2021. As expected, the Company was able to start building inventory levels ahead of the summer selling season despite continued challenges in the supply chain. Total long-term debt as of March 31, 2022, was $338.7 million, and adjusted long-term net debt (net of $83.0 million cash)* is 1.2 times trailing twelve-month Adjusted EBITDA.
Subsequent Events
Subsequent to March 31, 2022, the Company completed the acquisition of Denison Yachting, ranked #1 in superyacht sales for three consecutive years (based on data provided by Boat International), expanding the Company's presence into the superyacht category and ancillary yacht service offerings, in addition to yacht brokerage and new boat sales. The transaction adds 20 locations across 7 states and is expected to immediately add to top-line growth and operating margin and be accretive to diluted earnings per share.
Fiscal Year 2022 Guidance
The Company is raising its fiscal full year 2022 outlook for Adjusted EBITDA1 to be in the range of $230 million to $240 million and earnings per diluted share to be in the range of $8.60 to $9.00, both of which includes the previously completed acquisitions, including the acquisition of Denison Yachting but excludes any other acquisitions that may be completed during the year. For the fiscal year 2022, OneWater maintains its anticipation that same store sales will be up high-single digits, despite an expected challenging inventory environment.
Conference Call and Webcast
OneWater will host a conference call to discuss its fiscal second quarter earnings on Thursday, May 5th, 2022, at 8:30 am Eastern time. The conference call may be accessed by dialing (877) 270-2148 in the U.S. or (412) 902-6510 for participants outside the U.S. A passcode is not required for the call. This call is being webcast and can be accessed through the "Events" section of the Company's website at investor.onewatermarine.com where it will be archived for one year.
* See reconciliation of non-GAAP financial measures below for a discussion of why reconciliations of forward looking Adjusted EBITDA are not available without unreasonable effort.
ONEWATER MARINE INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
($ in thousands except per share data)
(Unaudited) |
| |
Three Months Ended March 31, |
|
Six Months Ended March 31, |
| |
2022 |
|
2021 |
|
2022 |
|
2021 |
| Revenues |
|
|
|
|
|
| New boat |
$ |
290,020 |
|
$ |
239,654 |
|
$ |
526,218 |
|
$ |
391,482 |
| Pre-owned boat |
|
75,854 |
|
|
56,082 |
|
|
129,303 |
|
|
94,662 |
| Finance & insurance income |
|
14,948 |
|
|
11,789 |
|
|
24,255 |
|
|
17,752 |
| Service, parts & other |
|
61,305 |
|
|
22,086 |
|
|
98,623 |
|
|
39,798 |
| Total revenues |
|
442,127 |
|
|
329,611 |
|
|
778,399 |
|
|
543,694 |
| |
|
|
|
|
|
|
|
| Cost of sales (exclusive of depreciation and amortization shown separately below) |
|
|
|
|
|
|
|
| New boat |
|
208,606 |
|
|
187,147 |
|
|
384,502 |
|
|
309,679 |
| Pre-owned boat |
|
55,959 |
|
|
42,548 |
|
|
95,329 |
|
|
73,000 |
| Service, parts & other |
|
35,020 |
|
|
11,130 |
|
|
55,061 |
|
|
19,793 |
| Total cost of sales |
|
299,585 |
|
|
240,825 |
|
|
534,892 |
|
|
402,472 |
| |
|
|
|
|
|
|
|
| Selling, general and administrative expenses |
|
75,492 |
|
|
48,348 |
|
|
134,588 |
|
|
83,208 |
| Depreciation and amortization |
|
4,727 |
|
|
1,378 |
|
|
6,476 |
|
|
2,341 |
| Transaction costs |
|
776 |
|
|
368 |
|
|
3,821 |
|
|
568 |
| Change in fair value of contingent consideration |
|
2,158 |
|
|
- |
|
|
7,904 |
|
|
377 |
| Income from operations |
|
59,389 |
|
|
38,692 |
|
|
90,718 |
|
|
54,728 |
| |
|
|
|
|
|
|
|
| Other expense (income) |
|
|
|
|
|
|
|
| Interest expense – floor plan |
|
1,048 |
|
|
330 |
|
|
1,925 |
|
|
1,250 |
| Interest expense – other |
|
3,097 |
|
|
1,215 |
|
|
4,626 |
|
|
2,139 |
| Other expense (income), net |
|
109 |
|
|
5 |
|
|
657 |
|
|
(89) |
| Total other expense, net |
|
4,254 |
|
|
1,550 |
|
|
7,208 |
|
|
3,300 |
| Income before income tax expense |
|
55,135 |
|
|
37,142 |
|
|
83,510 |
|
|
51,428 |
| Income tax expense |
|
12,781 |
|
|
6,550 |
|
|
17,670 |
|
|
9,061 |
| Net income |
|
42,354 |
|
|
30,592 |
|
|
65,840 |
|
|
42,367 |
| Less: Net income attributable to non-controlling interests |
|
1,011 |
|
|
- |
|
|
1,011 |
|
|
- |
| Less: Net income attributable to non-controlling interests of One Water Marine Holdings, LLC |
|
5,046 |
|
|
10,117 |
|
|
8,513 |
|
|
14,104 |
| Net income attributable to OneWater Marine Inc. |
$ |
36,297 |
|
$ |
20,475 |
|
$ |
56,316 |
|
$ |
28,263 |
| |
|
|
|
|
|
|
|
| Earnings per share of Class A common stock – basic |
$ |
2.62 |
|
$ |
1.88 |
|
$ |
4.14 |
|
$ |
2.61 |
| Earnings per share of Class A common stock – diluted |
$ |
2.54 |
|
$ |
1.83 |
|
$ |
4.02 |
|
$ |
2.55 |
| |
|
|
|
|
|
|
|
| Basic weighted-average shares of Class A common stock outstanding |
|
13,864 |
|
|
10,901 |
|
|
13,619 |
|
|
10,838 |
| Diluted weighted-average shares of Class A common stock outstanding |
|
14,272 |
|
|
11,171 |
|
|
14,017 |
|
|
11,083 |
ONEWATER MARINE INC.
CONDENSED CONSOLIDATED BALANCE SHEETS |
($ in thousands, except par value and share data)
(Unaudited) |
| |
|
|
|
| |
March 31, 2022 |
|
March 31, 2021 |
| Cash |
$ |
83,030 |
|
$ |
76,713 |
| Restricted cash |
|
5,927 |
|
|
10,769 |
| Accounts receivable, net |
|
82,725 |
|
|
41,005 |
| Inventories |
|
293,170 |
|
|
186,089 |
| Prepaid expenses and other current assets |
|
50,926 |
|
|
14,383 |
| Total current assets |
|
515,778 |
|
|
328,959 |
| |
|
|
|
| Property and equipment, net |
|
77,658 |
|
|
64,612 |
| Operating lease right-of-use assets |
|
119,675 |
|
|
85,105 |
| |
|
|
|
| Other assets: |
|
|
|
| Deposits |
|
572 |
|
|
479 |
| Deferred tax assets |
|
31,152 |
|
|
12,765 |
| Identifiable intangible assets |
|
231,124 |
|
|
74,004 |
| Goodwill |
|
313,460 |
|
|
151,417 |
| Total other assets |
|
576,308 |
|
|
238,665 |
| Total assets |
$ |
1,289,419 |
|
$ |
717,341 |
| |
|
|
|
| Accounts payable |
$ |
43,858 |
|
$ |
25,931 |
| Other payables and accrued expenses |
|
46,909 |
|
|
21,904 |
| Customer deposits |
|
63,514 |
|
|
39,395 |
| Notes payable – floor plan |
|
254,853 |
|
|
183,802 |
| Current operating lease liabilities |
|
11,660 |
|
|
8,367 |
| Current portion of long-term debt |
|
17,294 |
|
|
13,995 |
| Current portion of tax receivable agreement liability |
|
915 |
|
|
306 |
| Total current liabilities |
|
439,003 |
|
|
293,700 |
| |
|
|
|
| Other long-term liabilities |
|
26,060 |
|
|
7,209 |
| Tax receivable agreement liability, net of current portion |
|
45,290 |
|
|
17,560 |
| Noncurrent operating lease liabilities |
|
108,683 |
|
|
77,174 |
| Long-term debt, net of current portion and unamortized debt issuance costs |
|
321,448 |
|
|
105,079 |
| Total liabilities |
|
940,484 |
|
|
500,722 |
| |
|
|
|
| Preferred stock, $0.01 par value, 1,000,000 shares authorized, none issued and outstanding as of March 31, 2022 and March 31, 2021 |
|
- |
|
|
- |
| Class A common stock, $0.01 par value, 40,000,000 shares authorized, 13,879,290 shares issued and outstanding as of March 31, 2022 and 10,968,152 shares issued and outstanding as of March 31, 2021 |
|
139 |
|
|
110 |
| Class B common stock, $0.01 par value, 10,000,000 shares authorized, 1,429,940 shares issued and outstanding as of March 31, 2022 and 4,070,872 shares issued and outstanding as of March 31, 2021 |
|
14 |
|
|
41 |
| Additional paid-in capital |
|
168,095 |
|
|
113,088 |
| Retained earnings |
|
130,560 |
|
|
46,032 |
| Total stockholders’ equity attributable to OneWater Marine Inc |
|
298,808 |
|
|
159,271 |
| Equity attributable to non-controlling interests |
|
50,127 |
|
|
57,348 |
| Total stockholders’ equity |
|
348,935 |
|
|
216,619 |
| Total liabilities and stockholders’ equity |
$ |
1,289,419 |
|
$ |
717,341 |
ONEWATER MARINE INC.
Reconciliation of Non-GAAP Financial Measures |
(amounts in thousands, except per share data)
(Unaudited) |
| |
|
|
|
| |
Three months ended
March 31, |
|
Trailing twelve
months ended
March 31, |
| Description |
2022 |
|
2021 |
|
2022 |
| Net income |
$ |
42,354 |
|
$ |
30,592 |
|
$ |
139,886 |
| Interest expense – other |
|
3,097 |
|
|
1,215 |
|
|
6,831 |
| Income tax expense |
|
12,781 |
|
|
6,550 |
|
|
34,411 |
| Depreciation and amortization |
|
4,791 |
|
|
1,378 |
|
|
9,610 |
| Change in fair value of contingent consideration |
|
2,158 |
|
|
- |
|
|
10,776 |
| Loss on extinguishment of debt |
|
- |
|
|
- |
|
|
- |
| Transaction costs |
|
776 |
|
|
368 |
|
|
4,122 |
| Other expense (income), net |
|
109 |
|
|
5 |
|
|
498 |
| Adjusted EBITDA |
$ |
66,066 |
|
$ |
40,108 |
|
$ |
206,134 |
| |
|
|
|
|
|
| Long-term debt (including current portion) |
|
|
|
|
$ |
338,742 |
| Less: Cash |
|
|
|
|
|
83,030 |
| Adjusted long-term net debt |
|
|
|
|
$ |
255,712 |
| |
|
|
|
|
|
| Pro forma adjusted net debt leverage ratio |
|
|
|
|
1.2x |