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Onewater Marine (ONEW)

Participants
Jack Ezzell Chief Financial Officer
Austin Singleton Chief Executive Officer
Anthony Aisquith President and Chief Operating Officer
Craig Kennison Baird
Joe Altobello Raymond James
Mike Swartz Truist Securities
Call transcript
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Operator

Ladies and gentlemen, thank you for standing by and welcome to the OneWater Marine Inc. Fiscal First Quarter 2021 Earnings Conference Call. [Operator Instructions] I would now like to hand the conference over to your host today, Jack Ezzell, Chief Financial Officer. Please go ahead.

Jack Ezzell

Good morning and welcome to the OneWater Marine fiscal first quarter 2021 earnings conference call. the Anthony by Operating Aisquith, on Executive Singleton, Officer. joined and Officer President am call Austin today Chief I and Chief

certain securities OneWater uncertainties. Marine Before remind its risks operations in would and I forward-looking and involve morning’s statements statements a considered that of under this regarding we management and made call like conference maybe by law begin, you to number

the that are The after company’s there which As filings over and Relations or which of events are to website remarks. might of statements. would update in to its circumstances discussed cautions a with a company’s release, are the Investor result, that, results of the date statements begin few the who Factors in results factors, from the the Austin in earnings like that actual section are cause which you beyond with by materially the except undertaking those control, Austin? on company’s I company to would many call opening will the with that or disclaims differ obligation be the can future the number to affect described forward-looking found turn reflect statements as to required made, forward-looking law. occur And Singleton any company SEC. forward-looking

Austin Singleton

in sales efficient key process, last on increased XX%, prior across while boat a our increase We Same-store the results we’ve relationships in grew gross earnings. in tremendous XX% delivered innovative market realized the new quarter. year XX% sales expanding pre-owned digital and increase compared Leveraging and XX% Jack XX% a boat and call. prior Year-over-year of increase segments. and all significantly XX%. of manufacturers, increased for you increased growth with platform in sales the thank our XXXX, quarter today’s Thanks, quarter, margins to sales year, including joining everyone first top the revenue a

year. saw also tremendous basis and with highly the digital strong other quarter surged during our income be to XX% parts platform, insurance and rose and innovative in finance gross sales The margin revenue margin all service, prior process. our XX%, investment XXX growth high ongoing effective attributed categories. growth Our Overall, the margins of CRM across to and increases can points, compared

Additionally, combination pricing future and inventory for lay continue outperformance. foundation our the of management dynamic systems the strategy to

On our more and largest a M&A the history very the start year, OneWater’s acquisitions million had front, we shareholders. busy than to putting fiscal three completing in for work $XX the to of

times EBITDA. implementing This are As increasing the have and successfully into sales tested focused we many in laser past, on playbook. done we our and tried translates integration

briefly Let these recap me dealerships. new

West well but established Yacht Walker brokerage First, service margin and strategy, finance with certainly Tom parts. our acquisition presence of yacht to company’s in history, pre-owned Florida Group Marine boat and and as on Coast new Group and X expands sales, in Florida enhances Southwest our serve as retail the locations service and marks insurance George the dealership adding services. and repair the company’s diversification not including boat the as presence parts, and customer category, new pre-owned offerings. lastly growing Roscioli well supporting our and expanded as service And sales, its higher Center and least, yachting Yachting base largest in quality

expect a our these remain opportunistic. be to full which future. to able into the U.S. kept have year. of in results on Since the we two the last impact three to we doing March, our We M&A pipeline acquisitions, pandemic fiscal and XXXX significant line hit fortunate to deals our acquisitions have four expectations completed with in have and were We frontload long per

and over the investment higher our long-term our continued further business recent in I segments, to through digital that business the of M&A our will turn meaningful integration confident shareholders. With margin it a strategy, and that, Anthony continue value we will evolution for market growth our execute growth technology are share to activity, As drive sustain to we discuss of on our we innovative operations.

Anthony Aisquith

agility drove higher sales teams our than quarter. the and for Austin. The normal Thanks, marketing of first sales

Our a team of the At hosted intimate several sales able events our models with interaction by smaller these launched events, stores saltwater ski boats, of we boat and runabouts where categories, were the exciting models team customers VIP including The partners. and manufacturer shows. the incredible several key fishing, and in to in and at boats. have absence introduced showcased more wake product new our multiple pontoon organized new

all new capabilities, design these have customers. our by of All well and innovative were models received and they

on We seasonally the lowest for the quarter focusing also used by what across preparing attending instead the shows This significantly locally in resulted selling advantage to of boat higher our in is our and country. year. multiple boats sales absence fiscal shows of of

boats and the that We have our want. relationships slowly strong inventory do normalize ensure should our XXXX continue we expectation nationwide to to to to start the early We expect in on with inventory partners it lean with customers that manufacturing build our through XXXX.

across system Our inventory locations. a advantage the is into sales competitive as where team tools pre-sell boats dashboards great industry, and continue what operational give and to the us exactly business our located. order coming OneWater is available, boats in and has With inventory including us visibility any on production. digital and inventory inbound inventory available, that or are to or the on significant our tight with the engage to provide our customers inventory, of our This with management intelligence allows

and Additionally, a carrying costs. the plan general turns floor and maintenance higher interest, reduction of inventory inventory result in levels lower

to changing platform the in art state to we sales. of remained provide the on impacting While boat lever sales January intelligence of how seasonality the are digital our continue elevated, dynamics

Jack financials detail. call use will to moving and benefit more turn will to who shareholders. continuously this about now drive strategy for over We our the the of while intelligence will outperforming improving forward help talk all I the in

Jack Ezzell

sales with boats primarily exceptional $XXX.X delivered to increase which in quarter a in well an of XX%, modest results and by million pre-owned first of price in total an average Thanks, unit as driven in the sales generated the XX% increase increasing This in revenue unit as was Anthony. same-store new XXXX. million new from $XXX.X sold. XXXX increase in We

We continue see water. increased off to the returning demand the from previous even boaters during to season

New the quarter other from the boat to year. new outperform XX% the all parts further share prior average revenue $XX.X market shift on and year, XXXX, first and insurance to a of sales as and pre-owned and increase fiscal to into mix prior the million the move year. by service, increased unit additional industry focused Gross XX% to of boats in million sales, million increased grew the XX% in increased XX% the profit price. of first driven business margin aspects sales further quarter seize $XX.X remain increased in and million compared the in model XX% to $XX.X in to compared the million pre-owned sales first the in million. growing the of size to and boat higher the We on $XXX.X Finance in sold to revenue and we XXXX, $XX.X $X quarter

compared service, gross prior of Gross to insurance, XXX and XX.X% the and a year. percentage as profit. contributed profit to to parts increased increased in finance basis higher other the sales XX.X% Additionally, sales meaningfully points

administrative increased first quarter $XX.X $XX.X from the in of expenses XXXX, sales general in selling, increase to the million With and million.

And quarter including profit in the prior ability expenses, a year the our higher $X.X is increased expense million in rose to in as expanding as per $XX.X in a gross structure loss percentage sales, as in to driven shows, by The to public the primarily $X.XX from was performance or SG&A, offset XXXX income the a to marketing prior compared increase million adjusted in million to by Net from the sales year. compared to million existing year. increase the and sales Operating diluted EBITDA to the driven first in company. to support operating selling in event-based and prior declined percentage SG&A expenses. income XX.X% boat XXX a surged totaled SG&A the The points revenue fiscal our partially $XX.X net company due of the However, of mentioned. result, by million of year. $X.X of of $X.X million, previously XX.X% share, basis decline reduction and $XX.X prior as leverage

expansion these facility. at $XX revolving compared achieved line to was $XX.X recent and increase fund Turning and estate proceeds XXXX. primarily XXXX, inventory This pandemic. facility acquisitions the real the note estimated decrease $XXX.X in as credit $XX.X the million combined we the additional $X.X as to the expanded million December associated and was by the that availability in with payable its cash to in with to due the a balance $X.X sales This manufacturing future of the substantial delays end, XX, to of million cash, result and last credit, company on December million the a Total of million under of off floor revolving acquisitions. quarter the from was of the million Subsequent to addition pay XX, during the company’s Center million $XX.X completed consideration. quarter, liquidity, to $XX.X company sheet million company’s plan of provides XXXX COVID-XX contingent included the million used in combined we was term credit with loan price Yachting the $XX utilized of year, funded $XXX the million XX, seller by line Roscioli purchase December

result the up September ended of from seasonality, and XX% XX, a quarter million improving was inventory As or manufacturing sequentially environment $XX XXXX.

chain leveraging our advantage prioritize to management normalizing manufacturers continue We stemming with key technology. and inventory utilizing leading by industry competitive from relationships the our our supply

robust, remains Austin mentioned, even M&A three our completing December. As in after pipeline acquisitions

transactions back excited focused OneWater phenomenal these the pre-IPO to be into of cadence on on family. are businesses are and regular our integrating We

$XXX of to This earnings that remarks. to range the year to any for single-digits. completed million continue the year and excluding to the be to mid that now million might be open closed the during same-store our for Looking Operator, prepared of share you to XXXX significantly up $X.XX, ahead, contribute year. diluted in $X.XX The expect line concludes $XX and additional please quarter we the will be full acquisitions approximately full the sales results anticipate be to the will XXXX, three in first of per EBITDA fiscal in adjusted questions? we range acquisitions

Operator

the of Craig you. with comes Instructions] Our [Operator question Thank line Baird. first from Kennison

is open. line Your now

Craig Kennison

taking your the was XX%. my sales Hey, good you for Thanks same-store mentioned just first questions. quarter, up morning. Jack, guidance in

are going am you same-store mean, negative a you sales are of some unfold? mid I quarters really rate face off a that single-digit to you in to just any am in starting have will how year the the rate for rest second half. to full see I wondering still wondering like growth might if I where challenging You the feel get note. on comps you of such year. high the order

Jack Ezzell

Yes.

– I I wouldn’t be to and nice it’s to up forecasting got you probably June quarter we comps. quarter that’s we compared are we a spoken smallest We the continues, negative also, the quarter. top have a about significantly being on business to quarter, should of. more this in quarter, I – quarter the if of have go suspect is that remember, the flat XX% next year. comp this June have quarter And just the times many to but say am

that comp roll is numbers comp. out the you half, a last so comps any quarter easier back quarter the to up and negative. single-digits think then March in think us and the mid lower when comps going I you We’re I against X% you the without some and half the you in negative good – have certainly to But in comp for if get year, first

Craig Kennison

can all then as for QX? any that outlay to Thank the paid were of Or acquisitions, in helpful. relates That’s acquisitions you. it cash there was just in QX? the fiscal And confirm you

Jack Ezzell

so was Yes. No, and Marine closed and out all on XX. It and the then was December December closed of December, the Walker it was all on Roscioli X George cash of December. both Tom The in QX. as XX,

Craig Kennison

the like you then now. in deals you Got days say, integrating do Austin, are need given achieve three move of us integration let’s probably how those are to it. you’ve team target? ongoing is? all an to that of integrated next your XXX you integrations today, first, stretched until what before you And then Could just three the integration and your remind process such got to consolidation wait you What on is

Austin Singleton

Well, I Yachts George done December mean, Tom was on X.

stuff. start things Continuing starting the far we as it system F&I, to of when CRM and synergies all process, and X the December the Tom table. with just was integrated now to on So ramping up the on bring can we it’s as – processes fully the get that the that George,

in shape. really that is So, good one

now. really So Roscioli boat have have only service don’t yard we is three more because Walker of We ongoing storage right a really area.

So it’s right system now. a different on

bringing that be bit over different it’s just but done that a will to to current We we animal. our is some different. a platform, do There to it’s have tweaking because little

are having we not – stretched people business not in is integrating. only is work these internal are So stretched. team also any always our they’re do with improvements there that our always can because acquisitions, we They but not when

in we’re a good pretty bit Jack So more are little want if good in a spot. we more, on expand can but that you some spot. a Craig, probably

Jack Ezzell

we seasonally also a are One is in I’d Yes. point time. thing slower out

staff our right dip Lightspeed. transitions. integrating do have point system in of who would I they were are and service Walker’s, staff Tom of just heavily these and to assist that they with parts on the time both some ERP George admin our involved also often acquisitions, So with who now out

– them the is because system. on easier to use how training transition for them so not the bit we’re And a it’s

a volume just converting maybe traditional a all building we oil volume is on paint and a are dollar, $XXX,XXX aren’t actively working But system system. that the of just coming little here doesn’t they order. process them, in that facility. different, at very lower in back a We’re type for have $XXX necessarily People fortunately Roscioli’s in will integrated They so team over with coming and dealership. on it transactions. Austin the have up more service are them like mentioned. our job higher for change But their bit short

Craig Kennison

Thanks. I in queue. the will Great. bank get

Operator

you. Thank

of Altobello Our next with quest line comes the Joe James. from Raymond

now is open. Your line

Joe Altobello

guys. Good morning. Great. Hey,

mid on to last you since guidance as was wanted up the year’s done, of Just to circle your acquisitions. guidance prior million, for three a $XX low you’ve EBITDA back second so off single-digits mentioned, then,

us the business? year from growth you acquisitions? to mid-singles So it and break base could the incremental out for still this impact for outlook those low Is the what’s

Jack Ezzell

Yes.

higher I great a this organizing And has of it’s side low point, that a leaning December The supplement the of as quarter boat full shows. team think year. I to we’ve is the of done absence the quarter to probably such more towards events – think small of mid. the done in job

altered And seasonality lack to we I And question base so because we’re such having? that and to just a I think so events year we’re big year there’s more shows little to of the a business of as the of comp. the seasonality; keeping be think have the the boat going do because the is

top not business be conservative amount to performance keep just QX the projections. trying rolling reasonable with base on growth Just of and and a of just necessarily prior

Joe Altobello

Got it.

line, digital quarter that go? it I’m in go towards typically shows in or And impact into terms those was marketing? think you there in of March the maybe the money of the this drop amount comps. for of and But sales year, Does occur does bottom cadence a Okay. curious mentioned lack June very secondly, the it about shows how Where slip fair a quarter. shows. obviously two? shows, spend boat of That’s the your of be money of that thereof, helpful. boat boat at that just you it And terms you to on boat lack Could versus June? Thanks. guys March helpful Does mix

Austin Singleton

boat a the a The expense good there. boat times, spend for They impact kind big That’s field is them. jump our about bit question. after a a I’ve the It’s X it’s point normal part just year. of I’d goes training all of We hit – it. show late to shows, not year, shows. part the digitally. just our a you And not spend first had with shot is playing this go it little of we very do last One come biggest dealers. then total still And you shows pretty I’m preparing. it’s then Anthony and fan entire lot bit a hotel, you a And second I weeks of a of and subpar on part nights. market show, of a is think said to part to a the ground of the thanks good preparing much boat that’s level little year, our plan the when and team. the it’s only the out learning really of for we how the for I boat out team. events the we’re year. into right these first Joe taxing whole want you going their – boat many this in P&L. October, mean, quarter. November on in just up boat show, of great and Anthony thing running January, at December the But to It’s effect that came in I That

were for we’ve first spent so shows, selling deals. instead we selling. And of preparing this And quarter boat

is I year. move we off tell a of forward that the need start. the to think as I understand we good into you it’s to impact will that – January

things but are in done versus this right a in We’re said done, understand know we going we’re, time QX need just and we – we in build, the But where what definitely continue bit part just good by in feeling direction. really to year, little year. the about like don’t selling it’s preparing that, are the and we But we has hope. lower the Jack to of have to just more going

Joe Altobello

looking you was could January on that, I follow-up Austin, if And it. mentioned good. just Got

color, wanted in you comps you to of If any all? line add with QX in slowdown what or any kind saw are at

Austin Singleton

that we leads expand more can – little bit to definitely a it keep on waiting leads for that ahead. slow on Jack, I down. go where just would Well, but than starting I can are you probably tell the you it’s – day –

Jack Ezzell

around was kind kind down, weeks quarter. last recall, No, things of year timing was we, were really and things February then think shut just in shut to the time, last I and I strong and if rewind pandemic say January back down really months, first if you when you that of fell going it X just back March off very the of the

So against we we’re analysis, you double-digit we comps are so on you haven’t – January. I the through closing some And tell would are tell double-digits through up so working we’re – comps. and done but I certainly the books, gone still far that would an

Joe Altobello

Perfect. Thank you, guys.

Operator

[Operator from the Our you. of Swartz Mike Securities. question Truist next comes Thank line Instructions] with

Your now line is open.

Mike Swartz

Good guys. A morning. here. of Hey, questions couple

release, said is combined press made I the that in from you about $XXX think the the in X you million acquisitions revenue. benefit annualized

that’s think of Are like that or year looks sense out on a that single-digit what assuming you XXXX? that kind a month us mid business? grows I the in are underlying for calling in of the basis. give XX-trailing that Maybe core fiscal you range

Jack Ezzell

probably $XXX is mark looking you year. contribution full I on say million would would that year basis this at Yes. and the that a for something around be

Mike Swartz

as Okay. well. year some Right, fall it fiscal assume XXXX into because of I

Jack Ezzell

Correct. Correct.

Mike Swartz

the to while you’re used product on quarter just to okay. noticing else the – Okay, commentary or about availability XX% on what everything maybe there in gain inventory then XX%, boats the there? just XX% pre-owned doing grew access year-over-year, And and sense. boats pre-owned of makes that grew any That

Austin Singleton

really just that’s you. Anthony, That’s Yes. for – really was to say I about

Anthony Aisquith

daily their that only. something with is we buyers we buyers buy that is – and it’s to Yes, employees are all job boats. employed do That’s on to Mike focused

at it’s growth we manufacturers a just the not but it concentrate It’s just continue challenging on It’s but up is innovations our is everyday. of part to great job for So with something think keeping with. – still new we are driving to the to used because growth that I we’re of some are get up a it. inventory, that amount great doing really tied coming us, getting

Jack Ezzell

Yes.

increase sales, other I’d think little as bit said brokerage I saw too, out, sales brokerage thing the is and just a but we point a the net behind in significant revenue. numbers you

if you – don’t much necessarily the So up unit. an you quite it’s was actual it dollars pick see revenue used as would as

Mike Swartz

that. sense. business maybe Austin. that maybe That for Got makes final to the the And it. a Thanks about and about next think Maybe how then centers service months? question just XX standalone contributing over for talk are how

Austin Singleton

numbers, got that to Anthony in But mean, the can saw in operational Right. good and you that. is a you increase that’s like of we obviously I do more parts There an service, connected Anthony, again, and question. some see day-to-day comments? any

Anthony Aisquith

an us opportunity for the just world. It service continues be in parts to and

we’ve As we service-only opened quarter, last X spoke facilities. to

this We’re service we a open There’s more are which seeing. point, looking standalone demand for tremendous to centers. at that

Mike Swartz

Okay, great. Thanks a lot.

Operator

Thank this questions you. concludes further time. and at participation. call. There conference today’s for Ladies gentlemen, no are Thank this your you

You disconnect. may now