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ONEW Onewater Marine

Participants
Jack Ezzell Chief Financial Officer
Austin Singleton Chief Executive Officer
Anthony Aisquith President and Chief Operating Officer
Brett Andress KeyBanc Capital Markets
Drew Crum Stifel
Joe Altobello Raymond James
Mike Swartz Truist Securities
Call transcript
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Operator

Good day and thank you for standing by. Welcome to the OneWater Marine, Inc. Fiscal Second Quarter 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. now today, hand Officer. Jack would to conference I speaker your Ezzell, Instructions] like the to over [Operator Chief Financial go ahead. Please

Jack Ezzell

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

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

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

Austin Singleton

growth increased XX% XXX% Adjusted record part our increased Jack, million. and We XXXX the today's quarter delivered every call. and EBITDA same-store incredible of for with for thank increased second $XXX to sales joining Revenues Thanks, results XX%. of business. a everyone, you, across

the our and finance growth. in emphasized remain adding OneWater other parts and of all of doubled move stable beyond The service am environment. our our significantly of our Importantly, to revenue we these to dynamic and is fast-paced, insurance I proud continued pre-owned revenue businesses expansion streams long-term strength strategy XX%, extremely agile revenue. on cylinders grew today's for and by ability also boat new sales, and firing team's higher-margin our

Our investment out market not possible. also desire in boats technologies the to in sell water. ourselves capture but to the customer right and us quick limitless bolster to to as our differentiate right the seamlessly boats, continue as customers, on only technologies enable get the to the These sell ability

slowing our profit for no Importantly, OneWater extending our With digital across remain solutions believe boaters experienced the this service heightened level demand our of industry. capabilities. efficiencies indications robust operational down, of and business, premium of to maximizing boats new and advantage come we throughout drive competitive arsenal and as our will

and the During exciting had a we months, several last announcements number developments. of have

buy/sell big Yacht launch soft and our the financing suffice our a Yachting growth. further pad Roscioli we creation of the us. unifies offerings expansion be and Center. Group, time, At opportunity announced potential as we same OneWater launch the and for having presence for yachting to a a provides OneWater's amplified at repair executed we Anthony to Further, and see which our platform this the platform First, compare all-inclusive of offerings. about insurance today, part of more boats easy in a but business virtual his and that this provides small remarks, we while say to talk BoatsForSale.com, to access will service

the agreement, proven the portfolio globe. our across in luxury of eastern strong enhance the kind premium distributor its under OneWater has Sunseeker throughout network further a will our This we yacht other U.K. statement based manage And it sole yachts was Sunseeker across we to dealer say agreement been named geographic OneWater a U.S. us as premier in seaboard. dealer for customers now most the manufacturer U.S. of leading the week in to and last is with the first key terms Group exciting partnerships. Yacht allow that of announced and market. for the Sunseeker Additionally, the yachts, will of is presence execution and least, the brands It to markets reach our the a of expand

our Tom of well integration with the Finally, Marine George in three proven are Walker Yacht Group, Roscioli's playbook. alignment and progressing acquisitions, and our

an our approach prudent markets and integration dealers our and disciplined position Our top to flawless high-performing identify as in industry advance continues to leader.

well, acquisitions year to expect complete we next six to for now per four integrating these typical With years. the several

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

Anthony Aisquith

investments categories technology Thanks, our Customer tremendous drive incredible boats continues an all Austin. generation. enthusiasm with high. is for sales at across all-time customer lead supporting to demand The

team have state-of-the-art by supporting remained within industry. further operational sales Our dashboards, utilizing agile the our outperformance

an boaters continues be boating pressured. experience lifestyle, the OneWater and levels focused and about the new family of enthusiastic remain at historically to are low veteran as to to supply foundational for Inventories the We selling keep providing come. dealerships exceptional on chain years layer of

the recognize relations, sufficient has demand challenge. to planning that will we given a season, inventory will selling us it have tools, our OEM inventory be although Our prime throughout meet strong confidence we

with a supply communication expecting constant chain barring we the and disruption, manufacturers in year. any are our finish further to strong are We

can footprint, August this sold consumer, store services. an we boats the As insurance per Austin second launched marketplace and X removing is their in meets boats, potential adding sale boats the immediately desire search including they person the their pre-owned for as of seller-focused boats. country what a exact we the finance we listed the when and or during Nearly our way BoatsForSale.com. parameters. of million new, people person increase receive are new mentioned buyers sell that for the platform and Utilizing of parameters and call their XXXX, reach change that the or and we completely boatification quarter, extension sellers the to boat developed year turn, In will aggressively a serves Along across believe listed with of acquisition domain the list site, can a boats, a notification even boat buyers.

build Importantly, boat inventory and the boat us site cash seller a offer. also enables by our to on pre-owned listed a offering bidding the

the since early reach. and growth including its the are our encouraged geographic created While that our ability in this opportunities very innovative customer by through broaden we be can to launch, days marketplace,

year. is it will for but believe create for boats piece mentioned, Austin goal small talk financials expect the the additional to revenue-generating OneWater. in Therefore, avenue a more an today, As have modest platform fiscal fiscal by the the the term, to to end starting see Jack, XXXX. I about will who platform of growth our over incremental of call would a XX,XXX in the Near on over will now this business turn we detail. is

Jack Ezzell

Anthony. Thanks,

extent, driven boats and the XX% in sold. Second in the million average of increase primarily unit in increase of of selling to total new was sold XXXX, sales an This million revenue fueled $XXX.X quarter $XXX from XX%. lesser increase an XXXX new average increase increased the in to sales in a by price price pre-owned and by same-store boats

to $XX.X of increased $XXX.X to sales sales fiscal parts in other second insurance and XXX% quarter to million. in XX% XXXX size XX% prior XXXX. increased on And and new grew year. at in the by the doubled unit sales from boat nearly quarter million sold and to prior $XX.X $XX.X in million the revenue the price. the pre-owned boat well of and compared increased million quarter boat million Finance shift second XX% in a to the models $XX.X to million and New revenue service, model compared sales, mix increase in second profit average the the as increase as Gross in to an year, the pre-owned driven $XX.X margin of

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

sales rose sales sharply reduction income selling, shows. a primarily businesses The of decline by of $XX.X by the to the and general expanded percent expenses offset in as the driven certain $XX.X of prior higher million, in across administrative increase expenses, from a SG&A. million and XX% Operating by as While the from to was boat including in and from higher $X.X gross percentage the year, million the to SG&A in cancellation driven profit, year. decreased partially million $XX.X sales sales of prior the increased SG&A XX.X%

quarter second per million to XXXX, As the in Net a $X.X share to per income the or diluted in fiscal share $X.XX adjusted in million $XX.X million EBITDA million from year. up prior the year. $XX.X compared result, prior $X.XX or totaled rose $X diluted of

balance the sheet. to Turning

$XXX excess our plan As of on XXXX, revolving million availability million was credit March of and facility. to March increase and are to a chain perspective, the balance under million, to of $XXX our compared in sheet, inventory availability $XXX XX, Total line at under March floor XX, including total liquidity at was as we combined substantial constraints. discussed. supply with growth opportunities capital XX, strategic The XXXX. From industry-wide allocation business in the have decrease accelerate focusing was the reinvesting we in sales on due M&A experienced the quarters, recent cash organic

capital allocation strategies to increase continue return. will we addition, other that In evaluate shareholder

year fiscal we are in to our fiscal increasing the mid teens, be outperformance half of full broad-based Looking ahead, for XXXX. the given sales XXXX, approximately for same-store first upper to the guidance up year the

range all $X.XX million to additional year. to the completed our outlook the range This during back the and in Additionally, $X that half excludes diluted the have per of to per raised adjusted we $XXX earnings EBITDA be of $XXX any of share. be acquisitions to in million, for be share may diluted

would pace Our This can face industry-wide elevated in our prepared Operator, line current the assumes supply the challenges. open and chain the at the of for guidance meet maintain you manufacturers concludes please questions. remarks. OneWater demand production

Operator

Andress question Our with comes Markets. Brett Instructions] first [Operator Capital KeyBanc from

Brett Andress

ask the Sunseeker agreement. I about wanted to

works? be part also? is can flow the mean, economics that only the more And details separately, Sunseeker U.S.? to any agreement the of exactly how dealer then do I of plan Just the eventually mean, you the share in how around management I that

Austin Singleton

Yes.

in being out good run the don't it the do us a There's distributors, I all So that dealer. the couple coming a will U.S. guys kind Sunseeker near we're midterm really the putting of into other see the or so job. We're future together. OneWater. United still there only of States through boats all

One about and operations. U.S. to kind things show because have that them consolidate of that of the base do is space able at for we being and to Roscioli we're a the excited having

that Midwest really that's don't the we this. and could come might customer really interested But down in a be have all. So interested stores any them see in

Of Coast. course, out there's West the great dealer on a

we'll want of looking I I from some wild little get over be comes prior just the little us sub-dealers, it a was when don't bit all to was boats bit it west. up it So but for to place. a into doing really set how in. were more but control wild, mean, this, what a us coming gives

So and we in through marketing all come it choose then, boat States customer the that professional just do we'll if boats course, and United setup events more for print stuff. that, gives oversee little displays, U.S. responsible marketing of a flow. for bit and the And be to how show the

So expense. that comes an with

to deal, boat. But plan percentage every that, comes the off put for are, because we it's is it have anytime already just we dealers of in that soon. really a good really and go where be to a there complete we think that because together to some So good to additive gives country of have find will a ability intention can no where OneWater the we

we're good So it's deal a overall excited. and

Brett Andress

Got it.

if But at sense. Austin, dealers compete markets, look mean yours? just of broader the and drivers look the season. And that to to with right out to the question. among how that more behind now smaller high-level have just Makes industry dealers, Okay. industry a be compared I will was wonder the situation your in then that does a their taking you And imagine I you as target of year. six inventory one that up I I selling the pain some M&A there to mean, four there

Austin Singleton

No. in don't change strategy. that was M&A I the the think

and it -- to on last call. I I earnings the think spoke

getting moving on the and on our And the been has side. not everything it's heels It's been of Achilles up integration. over. acquisition for integration One lined front our CDK training

softwares, speed little or out, you getting of on the the all the working DockMaster If and correctly, have employees because these Well, move it's this a a it. they're ControlX, acquisition, deal go a do they're have great, if is up pretty CDK, exactly inputted it's same to their so and the over. bit and But on of deal we then kind to heel that one other slots. mapped easy software, want getting and it's just slow said, been we of would but a far we so on plan we not way information

deals, last that we've them, we've now. them on because basically it point our kind doing with it and done gotten own. we've but we're still We have couple the of So all the eliminated still helping issue where of us integration, to taken that use in-house

wanted was cash other on flow or years ability do increase this free the one is and than lot And it So to two always to three free better a our said Plus, years ago. cadence thing we a deals the the confidence of flow. us the with two that -- gives or probably we it was this year. cash ago

a there's just So combination.

kind where a an they really in represent I time I are fixing that amount office what's couple I of the understanding be think day boat, calling And there don't kind this is to be you manufacturer screaming mean of follow-up. going customers, from where is taking They perspective, to pop, they're a they more boat?" of that of When them, can to I we into bone. the customer when to challenging. with coming, I yelling think on other of at that out where all -- coming. my themselves and working think "Where's every shine quarters inventory It's sit it's "Okay, and is of have they're That's when us forecasting for is off the or the of every just care mean mom deal and boat?" problems. the information go, single next their when

our think going one where to is cadence to digital know able So us to the the acquisition yield, probably it's need, I tools have doesn't inventory do but increasing. really what that anything we with that being the going, is forecast help and thing on

Operator

Drew with Crum Our from next question comes Stifel.

Drew Crum

or creation and both going the you forward? a gross up how those expansion your pre-owned rank rise boats. to Is that the forward? the do lot see more then see as in So Yacht of it With moving and during mentioned ASP margin of the the with you And you quarter. Group, industry? of the new various improvement the inflation separately, we for in accelerate order the that pieces see going importance for boats Can and should being drivers trending sustainable likely you ASP line

Jack Ezzell

Yes.

our lot because margin. had service, improvements revenue business us it's non-boat the on in large driven the overall addition new part we're But increase streams. of for would term. to with because question, on see that's we a as revenue, long sales of portion So increase first obviously gives that up I margin boat equally But revenue that Roscioli's say probably parts sustainable feel in results. that in sales, the greatest such excited impact and of sustainable more good XXX%, like And the being to that's recurring by a the

hope overall Yacht larger the it a put projecting that some yacht little within as answer George mix and that and feel put a OneWater larger acquisitions a in can the will December, shifts far Yes. We that pressure But margin us there's mix challenge. have two Walker saw margins boats through, helps margins. a of to large which typically always little and of did mix bit a mix shift, as percentage. As the -- come as boats, help I Tom doing question. on you lower the with bit margin we make Group boats lot we're like shift margin have shift improve gross some will we Even a that Marine, percentage.

Drew Crum

forward. to question on And just then your ASP, just the Yes. expectations on follow-up going

Jack Ezzell

-- Yes, out we growth, same-store ASP of from We we as put get and look growth. from it probably ASP, to half project half unit sales for there a are look of we right, model, -- number. it

that's think internally. things I modeling how looking so things And we're at and

Operator

Joe question Raymond with next from comes Our Altobello James.

Joe Altobello

hard I quarter? I on of inventory guess, quibble lack here. guys the it's with comp feel A of couple because questions. know first to a and sales like lost of a inventory, you XX% do you But any in

Anthony Aisquith

at all. sir.Not No,

Joe Altobello

obviously. mean, Okay. I

Anthony Aisquith

the heavily. outpacing pretty We're industry

don't I tools -- to we that have been have utilizing all So that contact we've ensure in available. and boats we the

Jack Ezzell

alluded remember, manufacturer. up they I you're as of dealer, We have, orders also XX kind mom-and-pop that manufacturer. earlier, Austin maybe think same it's to orders let's with Joe, XXX maybe have when say, a with to against important, the

having our tools, to the And customer get the orders and insight it ability to XXX it digital our so from is the on with those it location shift tremendous. to want where other to one

Joe Altobello

a seasonality, I is QX typically draw guess you inventory. quarter you where down in where build is helpful. terms of quarter typically That's QX inventory. a

sounds it see that to probably go we're quarter. number like the even inventory lower So June going in

I'm normalizes? do to So again? expect think growing And you maybe start when do when it you inventory curious,

Austin Singleton

time. them to it they're it really volume, Well, over kind X% time before for let of after or all slow X% -- manufacturers, more but is, the produce lean XX% a a keeps to the going would starts to I continues get where Door would and compound and jump speak, more or of be this. you XX% month boats. they're inventory. to strong. stuff it's flip say very doing in, that I on they building be tell I in to at very, we going And Anthony if a right like It's start ramp-up I'll demand switch the Joe. can pace to long swings, just June, don't

and So But boats two gauge four have carrying Anthony? coming in great weeks are that inventory on weeks dynamic great is from this. inventory and it's out Anthony better way now, my now, we're cost opinion a my not to a now, from dynamic will it's be for a weeks the selling in because six from opinion, from down.

Anthony Aisquith

much would probably carrying say too we were pre-pandemic, I that Yes. probably, inventory.

increase to continue I utilize would So what our inventory more the get -- a we we back want When normal, back to tools those I think levels, to that normal, the to turns. we don't get is have, to our is going question. be to it

say a So having I so from to everything and that. and recurring we're with order would have is interest full inventory. But like year our always boats the to lots or away done of else continue things timely right costs lower goal

So it's year, over whatever the a we'll normal I normalized be have inventory. going think, before to is new -- of

Joe Altobello

it. Got

Okay.

Just one last one me. for

the In quality are with terms asking rework, quality, get door, slip struggling coming out seeing product of Or at those are you seeing for cetera? you to all? OEMs customers and product et back

Anthony Aisquith

say we've finished, rigging of -- if of poor you quality. with that kind that been the our seeing last will, we're always assembling It's the I piece build, the stuff. and wouldn't boats all

see boats going the of I the anything no. or like So that, quality don't backwards

Austin Singleton

and issue. getting of just building It's challenge think cushion worse it's missing it XX got and to today it's months ago. of that's it's than XX month. It's I like it's ago, thing more on not completely months going it, a boat a up were or one there a they're they them sit than for quality complete finished they this missing that sea one a boat

you it. go, potty's. not the enter week, it's So really customer, mean, can like it "I I comes, They're porta agree but don't So mean that I boat." thing porta a going one look, the in doesn't your boat have potty like, a " "Hey, we care, to I next want get Anthony. I you if with boat,

quality more versus with it's of I issue. they're the complete boats struggling think more getting a a --

Operator

with comes Truist Securities. question Mike Swartz from next Our

Mike Swartz

so Austin, color you backlog maybe April, this any fiscal I far your can missed store but third or any if thus the seeing provide? your comments, Jack Sorry your you're quarter, metrics trends or or comparable in sales on in prepared maybe

Jack Ezzell

Yes. I go would Austin. say ahead, --

Austin Singleton

one. say, just in me I talk get was going that to let that Jack so Mike, will about trouble, I'll

Jack Ezzell

up big year. I the really obviously, the comp a and against we're half quarter Yes. the back mean, of for

positive. back Austin I look projecting if it's think elevated. interest good you is have, are we in, guide, Leads same-store low retail as And continue half. coming door demand. very our comps at single-digit to mentioned, swings the Customer in all

So we've we levels just the sales same-store the from increase demand half continued back seen feel so with of of far. just and with year that what the for comfortable

Mike Swartz

to the Okay. that out Great. on that, guidance, $XXX which EBITDA EBITDA, $XXX to basically And in would are to think add maybe in called million I just with half dollars but of million you half and flat acquisitions you're fiscal some pretty you've speaking, seasonally year, talking the year. the about your the should here that comparable in growth got of strong back store back be imply

So offsets what flat to to get what are -- the number? that guess, I

Jack Ezzell

Yes.

numbers, I the at the from think to increase consensus but I'd -- my is double up have that. digits I half numbers, back double-check think

Anthony Aisquith

numbers are those correct. Yes,

Jack Ezzell

Yes.

Mike Swartz

probably numbers That's It's then. my fair. versus just

go then, Mike, just And ahead. Okay. --

Jack Ezzell

No, I that just that you ours. I to think the I was in don't stock might your numbers comp have say in put you we give going

Mike Swartz

final for that question And just makes No, me. right. sense. Right,

that that a in costs near Just to bigger Roscioli or Group overhead obviously, and business Sunseeker, investment going to Yacht into about the there have any you're Are about new the think you're term? building any with you're there. talking presence out. much going And costs

Austin Singleton

whole Not going No, not our anything the Roscioli normal because was big a turnkey. on impact was CapEx, of that's a anything. thing. really the really make out that to

getting have So anyway. put Anthony, this of correct boat if wrong, on we're costs most going the me that I'm be into would additional the to but

Anthony Aisquith

Correct.

Austin Singleton

Yes.

Jack Ezzell

increased expect type those expand brand off it profitability some to originally said expect over sales. the SG&A what the the absorb on With of think to perspective, to time. is we and but we those costs marketing back with goes incremental I Yes, Sunseeker from costs level having a

Austin Singleton

boat, about the it's I And an Sunseeker one Yes. things build sold. real and beautiful the mean, incredible I mean, globally quick, is, of thing they other

of mean, I mean, going are boats to fixing So this. it's then. It more incrementally not things. XX a from they're how it We we months? huge see like Anthony, I when over will -- don't if out is that mean, time years into the they're you come we and expect trickle this long those increase out, these on XX? in presell available impact to as slots. today I to mean, are two six want Does

Anthony Aisquith

months. XX months. XX

Austin Singleton

months. XX

mean, have it's But share sudden, I customers States. all million some us size. come about out worth one place build intrigues not a we're We'll with a it on to low pre-sold whole risk. floor of And across the We're million of not boats is through $XXX network mean, the look going plan. we're it things, United So have need like things that in stuff way $XXX slots. really going to of inventory with And our incredible ground inventory tomorrow. for be to sitting looking us going an that that continue it to we one in. these of the the at gets we this I have will these lot dealer A out up our that's all we're on to a to the move of hopefully

Operator

in conference questions for the are there And other no call. you participating. This concludes Thank today's you. queue. Thank

now may disconnect. You