Onewater Marine (ONEW)

Jack Ezzell CFO & Secretary
Austin Singleton Founder, CEO & Director
Anthony Aisquith President, COO & Director
Joe Altobello Raymond James
Mike Swartz Truist Securities
Craig Kennison Baird
Fred Wightman Wolfe Research
Call transcript
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Good day, ladies and gentlemen, and welcome to the OneWater Marine, Inc. Fiscal Fourth Quarter and Full Year 2021 Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session and instructions will given at that time. [Operator Instructions] As a reminder, this call is being recorded. now Jack turn Ezzell, would to call I host, your Chief Instructions] like the to over [Operator Financial Officer. ahead. go Please

Jack Ezzell

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

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

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

Austin Singleton

challenges continue XX% $X.XX growth compared expectations. our in our results like areas efforts our delivered and relentless for in while and highlighted call. team year. execution. same-store I thank grew service, by line parts the us, XXXX, plenty be growth record effects. increased in sales on would of Full sales ahead. another will XX,XXX-foot for At throughout of pandemic thank the of the strategy year and with the billion OneWater to top their other everyone, higher-margin strong XX% revenue XXXX view of the all growth you, its We after presented surging. business Jack, Taking XX% time, is These today's to and Thanks, by our proven the to the year increased major XX%, the we business, to incredible prior and years focus runway see same a an for of by for joining

business our adjusted year doubled execution and million EBITDA strong Our this superior $XXX full model. nearly largely again due of to XXXX year

acquire Importantly, a targets success. successfully our to for M&A ability find, and integrate continues strong be to recipe

we While have we since a not itself our think path year. previous full-service welcome X acquisitions, that expand have the our that their of with growth its diversify them Marine, was into in with completed definitive We our presence end, forward XXXX, and deals in falls supporting couldn't family-owned acquired has dealer to XXXX stores with realize expand line which to operation. experience own years on its forward of of and continues and U.S. to significantly of transformed cultural look our XX Norfolk brands success better as acquire doing we first great offerings, sharing agreement In to Virginia a We Norfolk premier will in in X dealer. per Norfolk fit a third-generation further X and our as calculations, Norfolk we results. boating guidance to lineup line strategy. our the reached To into operated growth mid-Atlantic a same-store and that our synergies provides a from recent business able to sales been contributed we factoring announced the

deal pending Naples the completed announced a Norfolk with already have we XXXX, Mart and Marine. For Boat acquisition

continue X anticipate completing in to few South. to a year larger ones dealership We this acquisitions traditional with X

of leading we T-H a Marine, marine branded of products. acquisition announced the Additionally, provider

reduces supports future parts springboard service, discussed, T-H the cyclicality. OEM transaction was in strengths strategic revenue. sales other of now have to enhance our double we sales premier and and and this supplier create As and and aftermarket is that an T-H a ultimately its parts our Marine evolved and it built growth transaction on further sales, us, which additional business. half accessory to accounts a boat It the acquisitional Marine provide profitability. as The of for its for also omnichannel size platform industry for exposure an has will will

anticipate As we we accessory in XXXX. acquisitions Marine, tuck-in integrate and would T-H completing parts complementary

for excited of are open for more doors you will strategy. component can a the remains been us. opportunities it many core this have plentiful. We opportunity our see, And M&A the as and

taking Going are we remain and forward, growth. we in M&A will of approach, environment disciplined goals advantage but drive to robust advance our our a

with that, efforts in are and growth excited approach believe year coupled deal operations. forward proven of our discuss position improvements strong the of the opportunities drive In our meaningful of support these to we expansion turn to leadership proud we systematically value on over continue M&A future. into and incredibly The year another our our our executing higher-margin will to enhance to advancing capitalizing for continuation synergies, our will of strong I full the our ahead. to quality with team will and Anthony market. while revenue activity And summary, business to in shareholders it the and execution the look further expect our the long XXXX are We in We earnings. streams, results, of

Anthony Aisquith

have fierce we waning. the of in year quarter of no demand with Thanks, signs over continue that fourth Austin. seen the The levels past

provide are the as to quality well. to continue the On for hot can't the about get the other out we categories select product out side, brands pontoons, have that are boaters strength wait on all saltwater products new customers models wake, performing already across And the yacht seeing are and board, water. Certain fish, runabout XXXX. sold brands ski excited

under On the recurring the demand side, continue from X see cycle X to customer of customer continue purchase strong we existing years. operate base our to to who

very business. We seeing of former customers enhancements boaters boating Regardless advanced also service service, quality operations, continued amazed how the years. focus provide hard make these all services our willing also and parts provide it, customers Marine return for aspects upgrade of us allow about these particular our needs. we the meet years boat ready to sales. OneWater they and sales the and boating maintenance the up to business to and heels and set experienced stay of opportunity our of and Revenue and as are support it. are These other the want, continue accessories of worked product higher-margin lifestyle are manufacturers also T-H wow. willing that very further and stay returning to are our fiscal a will over needed. to strong come, and from and These improving further of the at boat year bolster the on is very which services and about categories, sales. what I'm our PartsVU services. excited customers increased on margin team and are reoccurring for pay they boaters lifestyle. and to has other product to for to of who to acquisitions, of expansion customer Many products Many sales the XX% the their in for they're parts Many provide for wait which another continue customers they to repair customers customers say, these maintenance influx repair with to we growth overall they XXXX. sticky The presents parts Throughout

our and opportunities committed to the available service our business we to penetration expanding offerings on, touched and and improve additional parts the to Austin product customers. diversity on As remain rates of exploring

inventories. to on Moving

quarter, are at are pleased able they during remain to management the environment. amidst increase chain see We incredible have leverage That tools we the said, seeing. low to advanced been levels our historically on challenging we inventory capitalize them the being to demand supply an but

newly or inbound including engage production. one have the pre-sell inventory Our matter and of any inventory no the boat with can whether locations location. dealerships our is to located, to broader access our in is that pull where customer it Every the order on dealerships, acquired from pool, is

many a recently in We there show, record a Fort pre-pandemic remains and maintenance above As margins improvement were saw well highly of sales to encouraged enhanced on attended savings and by boat result, person in This norms. and our by year and not the XX% and The percentage inventory gross has Boat marked has underway customer sales. to our in basis point sales but presold profit We well show over Show of what last of the was to events. the also remains deliver above demand number prior costs. returned process enormous future that our own is Lauderdale brands plan the season as quarter, increased Insight interest, creates saw, customers allowed inventory process general a and a strong. we attendance. XXX floor from carrying year us only sales attended where the efficient increase

and forward. a continue to boat maintaining personalized to moving We we attend in-store events, are events show select shift more our

And at more allowed us relationship-based I'll that, with in a has cost-efficient turn go our call to to to level. and directly ability with Our over customers market Jack detail. been financials personal the both customers over engage to more the and to

Jack Ezzell

year Fourth our customers. revenue from dampened $XXX prior the $XXX.X chain quarter quarter. Thanks, to million deliver XXXX in in Ongoing supply boats to Anthony. to challenges million ability increased X.X%

New X.X% quarter boat XXXX, X.X% the pre-owned to of decreased to fiscal million. in $XX.X boat $XXX fourth sales while sales grew million

compared focus million XX.X% diversification to unit points in increased on the Finance profit meaningful basis the which the $XX.X million XXXX, XX.X% in fourth personnel in pre-owned increased general continue Fourth profit higher percentage as XX% high-margin a The to to strategy, of million sales increase parts sales to for the $X.X $XX.X XX.X% mainly service, year the supply from $XX.X higher to prior to XX.X% of SG&A increase driven high-margin million expenses with service, fourth compared SG&A XX% chain and in to gross the new and of we to the increase a and increased XXX by revenue million by increased labor costs sales and year, compared variable Operating an part to increased price million. expenses. business, million in driven sales in and to as and to to sales. prior increased current margin profit, due driven the average from $XX.X the quarter selling, costs compared of and the by the and $XX.X was profitability prior As prior and Gross year, SG&A the of contributed quarter offset results insurance our by year. other administrative quarter revenue year. prior in Gross of to compared million XX.X% in to from parts associated income increased increased prior the environment. increased other quarter. XXXX parts percentage XX.X% to quarter level year. of $XX the climbed in $XX.X our partially the growing

totaled As to share. per results, per year. XXX.X% to compared or million last Net fourth $XX.X an $X.XX $X XX% diluted total increase from $X.XX million supply Same-store quarter the revenue driven and up historic prior boats average environment. of share, inventory a diluted Building year's year increased income an $X.XX EBITDA despite $XX.X new adjusted upon price XXXX challenging unit very compared result, for in $XX.X chain climbed XX.X% increased of to the million or sold. sales fiscal prior the billion, million pre-owned for in by year, a the full to and increase

$XXX.X parts Growth We increased in strategic be less of Full in XXXX increase income of year in XX.X% been and and business profit XX% the a XXXX and income insurance fiscal level increase SG&A million our costs personnel prior million, environment. compared increase million as $XXX.X $XXX.X of sales of with increased Gross to gross double a has margin expenses sales higher the to parts XXXX. The margin higher fiscal increase margin, the variable administrative operating and also XX.X% and in of service, in will XXXX $XX.X and basis and of cyclical OneWater. revenue surged operating Selling, new other service, higher-margin profit to aspects focus revenue. saw other to associated fiscal nearly costs or the current general for a continue increased in by from fiscal year these revenue was to chain profit. points XXX Full gross profitability and and in XX.X%, mainly year of supply income due driven labor XX% in finance significant boat of pre-owned XXXX percentage $XXX on to million. an the was or XXXX. million, a with increase and increase

As $XXX.X $X.XX for of to a per to net to per diluted XXXX increased $X.XX million. XX.X% or compared result, adjusted Net EBITDA fiscal income climbed $XX.X income year $XXX.X million or XXX% diluted share. million share

at June XXXX. stands turning to Now and to XX, inventory of $XXX.X XX, at our September balance revolving under $XXX.X XXXX, debt sheet. $XX XXXX, currently at long-term million million XX, was million. availability line $XX.X cash XXXX, XX, credit. had $XXX.X million September million Total On the of on we and million Total of $XXX.X September compared

is EBITDA range expected T-H gave for at adjusted X.XX very Our net post-transaction to to our call, debt a net low the EBITDA of times. Marine. adjusted On we ratio ratio debt last

While the final at approximately this times. based net debt EBITDA will change X.X ratio amounts to closing, expect be on ratio to adjusted we the

ahead to We environment to continue. demand Looking ongoing inventory expect challenges. single-digits be despite a the sales high strong same-store up we XXXX, to anticipate

of continuing We range to $X.XX share $X.XX. earnings $XXX and the accelerating our acquisitions in adjusted we strategic and growth diluted be be on to M&A and EBITDA projections the announced range acquisitions expect be the in allocation, Marine of may million regard With year. completed exclude opportunities. $XXX to that per Norfolk previously during on the These Marine organic million to focused T-H other and remain to capital

additional the Marine's of provides is us for complementary other We our time, platform parts service, our concludes mentioned, strategy history Operator, to plan profitability further As very acquisition questions. the model, At pipeline would same and enhancing on for forward remarks. prepared cadence open accretive we and business proven M&A our look offerings. our Austin grow business. and and robust, strategies our our proven newly revenue, with dealerships our across dealership diversifying to T-H growth scaling acquired please you continuing This of another transactions. line


Our first James. from Joe line Altobello of Raymond with comes [Operator question the Instructions]

line Your open. is now

Joe Altobello


to I'm curious 'XX. half thinking fiscal half assume does for mostly the second a So first, half how comp guess, comps? trend year? outlook, I couple first you're single-digit of expecting second the on questions I high that growth about that Jack, you're be throughout versus weighted. how

Jack Ezzell

for over I the of Yes, a I changes. little you're around of said business sure. way bit, with we've kind that shifted through the been think seasonality of mean, the has couple a times seeing the last and some COVID of kind year has demand

being quarter comp. your then quarter smallest makes that With back the a against against is But the dollars, the negative comp. we're comp. to in up it December terms we easiest But half, our in of right probably point were QX it up XX% in

the a lot half, the back So particular in easier I first certainly second to or quarter. would see half definitely comp than

Joe Altobello

look If margins, boat high-teens, secondly, in fiscal ago. the in at on the in mid-XX were And your 'XX, margins. you're s you that not I then long

margins think how environment, the trending given environment in we're 'XX, the that inventory we So should promotional about in boat today? fiscal given

Jack Ezzell

Yes. margins. had prior we're I now, really leveling we cycling elevated start I where mean, mean I I the years think over boat they'll think, off.

them move as to start see we you'll So think the year. through I level off

the will they'll from impacted And They'll we can hold. certainly extent customer, the manufacturers' as impacted recapture us. those the push throughout those So cost right? costs I to they the year, margins costs incremental that think potentially remain by -- be elevated, to


comes Our the Swartz with from of Mike Truist next Securities. line question

open. now is line Your

Mike Swartz

may, with I if outlook 'XX question, guess, that FY about the volume single-digit Jack, you on the for you're high guidance. of year, can another between how mix? ASP sense and store a I maybe unit comparable us thinking Maybe give

Jack Ezzell

'XX, price. units see volume we think Yes. think more to driven get to back driving pace been as 'XX I start truck you an start uptick and unit of by move and has Certainly, both as about into or to of 'XX, a maybe price really normal we'll

Mike Swartz

us million. million -- think And help was on the just your EBITDA $XXX $XXX to guidance with I

include of a give that in looks T-H Just and what we number? that Norfolk us sense maybe like if

Jack Ezzell

Yes. performance. exactly, year. in acquisitions when remainder subject to it's expect their $XX get I million probably have road, be give something year for But the the down about those of we'll of updated close mean, range contribute their some the And them year. to going for the you to partial the I'd certainly we as that's guidance but

year. year. somewhere the $XX So for it's their But around $XX full million, million not

Mike Swartz

price the you're calendar and the customers heard of order that the by extent And fourth have of enacted Jack, price we've having Maybe us in to and also conversations that were mentioned give sense the aren't just the every with a all being boats protected. through almost by quarter increases you OEM. price passed OEMs, backlogs increases the the who on

demand -- so? sticky -- past I looked over the or what's I guess, how is mean, the that month Just

Austin Singleton

and change price $X people issue with to on the talking increases, historically, XX to us looking the more you're converting financing, more years, backlogs with are people that's seeing or in, out X I'm really if pretty much that your it with is But correct meaningful saying have don't manufacturer. Anthony, nothing pushed this Where a and month of way lock sure more because financing wrong, price there a me payment. the And even to not that $XX price consumer. not in I'm with a I'm more X almost and we for an we not that the last there's hadn't. every at about locked.

difficult don't a that it's with see and of lot issue just that. just So pass not on to that

increases we've it have take make might just of that But double-digit out could them you don't at market. noncompetitive midyear price I out on manufacturers the coming if or of coming absorbed. with see top increases already the that price Now

Anthony Aisquith

That's correct.


comes of the Craig line with Our question from Kennison next Baird.

Your line is open. now

Craig Kennison

I understand buyers feel up the I followed you me, lifelong opportunity like some is boats. convert with buyer I them wanted buyers they to you've boaters? an used those, you for say, this will get guess, any first-time what more I'm bit a or look, if experience better. guess, pandemic not for gives Or their been to a sell may wondering to and little of has but to it pandemic whether of think

early, any of if -- Just that wondering you still data. I'm captured but it's

Austin Singleton

Anthony. I Yes. I mean -- go ahead,

Anthony Aisquith

The the coming in were majority of boating. got them, right, are out of boaters that in And past. they

As in the the years boat. the boats only was XX, changed XX past ago, of the thing the color that on

and in back available was just something years, showrooms, And blown our out would staff year, on boats one God; been -- where into every are that the So manufacturers say, the X keep every they're our past, or dramatically up with of my coming generally they've driven and away there. every X Oh change. with it

making they're really comes enjoy these boating technology to driver, boating -- boat will, continue you with out that keep is you have great -- past. going So in boating, in in that the to if were to a don't keep be the the people to

boaters Sure. that as not first But can the buyers past. nearly as were So many do? there's in the people

Austin Singleton

to seeing out typically, of one in like not thing want you we're seasons. add, that, space just that when Craig, marine stuff heard is that we've rumblings in come I RV and Yes.

weather weather. So slower drops really boating season. and the School season we're because of going just into the

of slow schools you So leaf except and off off, trees, swing, some maybe full now. as start start starts everything Florida from, really things Texas, down to to take boating falling cool in

been mean, for seasons. first boating who if buyers almost And now X and a essentially XXXX so this have time for I boating XXXX boat -- there's XXXX. full time ever

enough were the from unloading find that down, pre-owned if You out, And our the they're would last that and kick getting carrying they be can't used enjoyment. when just costs you because now sales in have still we now quarter look think both. no would they at if it's you

ski were the they're So speaks lot boat when of not their they for where boat. a move then a lateral bigger our time stickiness that's and reverse year, some far, sticky this went because the of they coming a and pandemic pontoon pontoon in -- lateral new they used -- there consumer at buying stickiness, selling extremely console, to a those from was to boat. family into make pretty boat or well, and saw the we a kind not bit said, has buyers went exist. we did been see drive They first moves its And but They're from XXXX are the a year to and console time We to or center in that's high, of boats. that little need that them of this really no from there. movement, don't the bought not they so they a came the first center

Craig Kennison

it -- of relates like as geographies deal you attractiveness to the Or will itself? then And dealership would your penetrate? really are M&A that depend just there on pipeline, flow the will to you the

Austin Singleton

just Yes. We we've that, times move, good want upside I is. to off the like we else it's brands. the just But We're opportunity under important past, us not of really, afraid home people. -- the is do afraid mean, but make we're Extreme We're areas. what We concentrating in checking kind that's We're dealership past, people once boxes. really sure would has of Coast. most opportunistic look everything and that opportunity at people. we to of areas. and the the certain the a the stay areas think we the to new from course, that to got best thing based We're close We not many the find strictly of is but said I West Northeast. and a like we're not said mean, to we And afraid principle keep in really where concentrate in, the I good find love this opportunistic. of


Wolfe the from Fred question next line of with comes Research. Wightman Our

line now is open. Your

Fred Wightman

doesn't the new? to like sequential pickup would you all that you saw. Anything inventories sound us that give improved that a hoping lot. was It in guys on of availability sort could size be you Was used helpful. unpack I could

Anthony Aisquith

I will Jack, in in first you fill the blank. here, jump can

just buildup timing build certain when It huge coming I see here. a up think some will about were to from it's all of we but so going the be presold. the is presales as stuff the in first of move coming going will forward that half to A I strong. expect in. are we -- don't things XXXX into it be lot of

And as so coming as the not inventory is in much it did.

think just correct that allowed timing wrong, us aspect I side. new what Jack, to I'm I've the on build was a it if on said. me

Jack Ezzell

Yes, it fast. inventory where a expect build our say and at. turning to December the you really quarter. would look is little bit somewhat at expected But it into further We're I can build to inventory we

that's And at times looking the what -- -- X on together, than talking calculation what put new X some more do I have but the You're do. normal don't where double the side the would historically. quite at boat numbers, just you're times, would honestly, looking dealer rough we

the turning stuff the tools customers it to locations, model yet coming our speaks getting And our Things inventory to right just ability door. then staying We're -- of the in. so the And are and it's out I think of quickly. larger, inventory to flat. to get but and we're

Fred Wightman

think so forward. thinking I little going more shows that been how you're have Has boat just role anything or And not? you've going a about changed far skeptical sense. a touched Show, you Fort would bit little on guys forward Makes that the but that about you've the Lauderdale seen bit

Austin Singleton

No. for those of shows. bigger shows, some do the boat with I mean, we it's have with think very to boats, important bigger consistent I the that especially been us always

I and the think model for when zero more that was those several an these there burner were our out regional not did But shows. more intimate the back think the still incredible for more bigger there. store to moving will forward. shows be customer that into team probably forward. bigger order in the and that's It's were The really going events sure his And year great pulling job shows customers atmosphere it that Anthony last we're it to we doing doing take regional shows the is us, value sell. shows doesn't a important years. more in these we and


Instructions] Drew from next of Stifel. Crum with question Our [Operator comes line the

now Your line is open.

Unidentified Analyst

does I the level This pre-owned just your guys had about How the pandemic? over outlook? into separately, management wanted inventory. inventory make for that on have follow-up of fiscal the is going forward, are the boat inventory Drew. to to of you David all you play on moves 'XX thinking And given this how course

Jack Ezzell

Yes. I we inventory would pre-owned as remaining we to the say look access at I anticipate 'XX think challenge. outlook, a

those marinas that a for lot out and them there We flip retail. and then have docks that just at pre-owned are scouring of buyers looking sell boats we can buy and directly

little happening is their part have we can manage retail, of management there, what's of And a a again, bit But can I same-store with get easier think to output, forward things bit in we're retail. mean We they going certainly as I a supply how it as inventory gets of good lines chain the certainly I'd manufacturers say, that, along amount mean, I in our their think I expect growth -- it's more model. consistent forward it's and to at regular sales need out number. So the seeing we it little consistent What of stabilize models production expectations, more they get working more, smooths and more of, so manufacturers. in contact with easier. them in and at less our we're things make what going

Austin Singleton

we're to go stays go continues a to on were to the too, can going forward, to is it that, is. to than like take it norm a want on. this really new add to like for This tightened lot of longer and what long build demand today, trying feel I If up is inventory going time good we thinking.

instead And more where so of these where get level month flat a month. schedule this look more I in up are valleys anything of the of then line to at as getting feel it's of production kind get manufacturers and and don't we to we peaks this loaded it, a

So as going of efficient. this new it's more us normal a make lot comes around, to think I both

things the have more that more COVID, the hit I industry, had of of or think the is kind not to OneWater, a reset of the chance One us as to but level production it schedule, all manufacturers button get we makes turns. tailwinds a an because only of we way have, think I the because will at

perspective. carrying an cost this go and So it makes industry down, is this from

bit a I more if many demand we're they're gets now, more precise little how and going to think like a then level. little they're continually And battle for stays heighten They this manufacturer bit every is how to building if it a earlier, shipping. on get years. all extremely little a on also turns, lowers efficient stay probably period keep softens we like higher I allows us longer our time. and which Anthony to still carrying lowers said bit, it But for think that margin have our cost of


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

may great disconnect. You a have day. Everyone, now