OneWater Marine Inc. Announces Record Fiscal Fourth Quarter and Full-Year 2022 Results

Robust demand and improved diversification deliver another outstanding fiscal year

Fiscal Year 2022 Highlights

•

Record revenue increased 42% to $1.74 billion

•

Same-store sales increased 12%

•

Gross profit margin expanded 260 basis points to 31.7%

•

Record Net income increased 31% to $153 million

•

Net income per diluted share attributable to OneWater increased 31% to $9.13

•

Record Adjusted EBITDA1 increased 59% to $248 million

 

Revenue for fiscal fourth quarter 2022 was $397.5 million, an increase of 41.8% compared to $280.3 million in fiscal fourth quarter 2021. The growth was primarily attributable to both sales of acquired businesses, with strong contribution from acquired revenues related to service, parts and other sales, as well as an increase in same-store sales. During fiscal fourth quarter 2022 same-store sales increased 4% compared to fiscal fourth quarter 2021, primarily as a result of the continued strong demand environment. Hurricane Ian, which hit late in the fourth quarter, negatively impacted sales by approximately $25 million.

Fiscal fourth quarter 2022 Adjusted EBITDA¹ increased 35.3% to $45.4 million compared to $33.6 million for fourth quarter 2021.

Fiscal Year Ended September 30, 2022 Results

Gross profit totaled $553.6 million for the fiscal year 2022, compared to $357.5 million for the fiscal year 2021. Gross profit margin of 31.7% increased 260 basis points compared to the prior year primarily due to the shift in the mix and size of boats sold, dynamic pricing and the significant increase in higher margin service, parts & other income.

Fiscal year 2022 selling, general and administrative expenses totaled $302.1 million, or 17.3% of revenue, compared to $199.0 million, or 16.2% of revenue in fiscal year 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 in the fiscal year and increased costs given the current personnel environment.

As of September 30, 2022, the Company’s cash and cash equivalents balance was $42.1 million and total liquidity, including cash and availability under credit facilities, was in excess of $100.0 million. Total inventory as of September 30, 2022, increased sequentially to $373.0 million compared to $269.4 million on June 30, 2022, as industry-wide supply chain constraints began to ease during the fourth quarter and also due to inventory contributions from recently completed acquisitions.

Total long-term debt as of September 30, 2022, was $442.8 million, and adjusted long-term net debt (net of $42.1 million cash)¹ was 1.6 times trailing twelve-month Adjusted EBITDA¹.

Fiscal Year 2023 Guidance

Conference Call and Webcast

¹ See reconciliation of Non-GAAP financial measures below.

² 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.
CONSOLIDATED STATEMENTS OF OPERATIONS

ONEWATER MARINE INC.

CONSOLIDATED BALANCE SHEETS

(amounts in thousands, except per share data)

(Unaudited)

About OneWater Marine Inc.

OneWater Marine Inc. is one of the largest and fastest-growing premium marine retailers in the United States. OneWater operates a total of 98 retail locations, 12 distribution centers / warehouses and multiple online marketplaces in 20 different states, several of which are in the top twenty states for marine retail expenditures. OneWater offers a broad range of products and services and has diversified revenue streams, which include the sale of new and pre-owned boats, finance and insurance products, parts and accessories, maintenance, repair and other services.

Non-GAAP Financial Measures and Key Performance Indicators

This press release and our related earnings call contain certain non-GAAP financial measures, including Adjusted EBITDA and Adjusted Long-Term Net Debt, as measures of our operating performance. Management believes these measures may be useful in performing meaningful comparisons of past and present operating results, to understand the performance of the Company’s ongoing operations and how management views the business. Reconciliations of reported GAAP measures to adjusted non-GAAP measures are included in the financial schedules contained in this press release. These measures, however, should not be construed as an alternative to any other measure of performance determined in accordance with GAAP. Because our non-GAAP financial measures may be defined differently by other companies, our definition of these non-GAAP financial measures may not be comparable to similarly titled measures of other companies, thereby diminishing its utility. We have not reconciled non‐GAAP forward-looking measures, including Adjusted EBITDA guidance, to their corresponding GAAP measures due to the high variability and difficulty in making accurate forecasts and projections, particularly with respect to acquisition contingent consideration and transaction costs. Acquisition contingent consideration and transaction costs are affected by the acquisition, integration and post-acquisition performance of our acquirees which is difficult to predict and subject to change. Accordingly, reconciliations of forward-looking Adjusted EBITDA is not available without unreasonable effort.

 

We define Adjusted EBITDA as net income (loss) before interest expense – other, income tax expense, depreciation and amortization and other (income) expense, further adjusted to eliminate the effects of items such as the change in fair value of contingent consideration, gain (loss) on extinguishment of debt and transaction costs. See reconciliation above.

Our board of directors, management team and lenders use Adjusted EBITDA to assess our financial performance because it allows them to compare our operating performance on a consistent basis across periods by removing the effects of our capital structure (such as varying levels of interest expense), asset base (such as depreciation and amortization) and other items (such as the change in fair value of contingent consideration, gain or loss on extinguishment of debt and transaction costs) that impact the comparability of financial results from period to period. We present Adjusted EBITDA because we believe it provides useful information regarding the factors and trends affecting our business in addition to measures calculated under GAAP. Adjusted EBITDA is not a financial measure presented in accordance with GAAP. We believe that the presentation of this non-GAAP financial measure will provide useful information to investors and analysts in assessing our financial performance and results of operations across reporting periods by excluding items we do not believe are indicative of our core operating performance.

Adjusted Long-Term Net Debt

Same-Store Sales

We define same-store sales as sales from our stores excluding new and acquired stores. New and acquired stores become eligible for inclusion in the comparable store base at the end of the store’s thirteenth month of operations under our ownership and revenues are only included for identical months in the same-store base periods. Stores relocated within an existing market remain in the comparable store base for all periods. Additionally, amounts related to closed stores are excluded from each comparative base period. We use same-store sales to assess the organic growth of our revenue on a same-store basis.  We believe that our assessment on a same-store basis represents an important indicator of comparative financial results and provides relevant information to assess our performance.

 

This press release and statements made during the above referenced conference call may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including regarding our strategy, future operations, financial position, prospects, plans and objectives of management, growth rate and its expectations regarding future revenue, operating income or loss or earnings or loss per share. In some cases, you can identify forward-looking statements because they contain words such as “may,” “will,” “will be,” “will likely result,” “should,” “expects,” “plans,” “anticipates,” “could,” “would,” “foresees,” “intends,” “target,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential,” “outlook” or “continue” or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans or intentions. These forward-looking statements are not guarantees of future performance, but are based on management's current expectations, assumptions and beliefs concerning future developments and their potential effect on us, which are inherently subject to uncertainties, risks and changes in circumstances that are difficult to predict. Our expectations expressed or implied in these forward-looking statements may not turn out to be correct.