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RS Sailing 2021 - LEADERBOARD

OneWater Marine Inc. announces Fiscal Second Quarter 2022 Results

by OneWater Marine 5 May 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

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