☑ |
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐ |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
(State or other jurisdiction of incorporation or organization)
|
83-4330138
(IRS Employer Identification No.)
|
6275 Lanier Islands Parkway
Buford, Georgia
(Address of principal executive offices)
|
30518
(Zip code)
|
Title of Each Class
|
Trading Symbol(s)
|
Name of Each Exchange on Which Registered
|
||
Class A common stock, par value $0.01 per share
|
ONEW
|
The Nasdaq Global Market
|
Large accelerated filer
|
☐ |
Accelerated filer
|
☐ |
Non-accelerated filer
|
☒ |
Smaller reporting company
|
☒ |
Emerging growth company
|
☒ |
Page
|
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3 | ||
5 | ||
Item 1. | 5 | |
5 |
||
6 | ||
7 | ||
8 |
||
9 |
||
Item 2. | 25 | |
Item 3. |
42 |
|
Item 4. |
42 |
|
43 |
||
Item 1. |
43 |
|
Item 1A. |
43 | |
Item 2. |
43 | |
Item 3. |
43 | |
Item 4. |
43 |
|
Item 5. |
43 | |
|
||
Item 6. |
44 |
• |
the impact of COVID-19 on our business and results of operations;
|
• |
general economic conditions, including changes in employment levels, consumer demand, preferences and confidence levels, fuel prices, levels of discretionary income, consumer spending patterns, and uncertainty regarding the timing, pace
and extent of an economic recovery in the United States;
|
• |
economic conditions in certain geographic regions in which we primarily generate our revenue;
|
• |
credit markets and the availability and cost of borrowed funds;
|
• |
our business strategy, including acquisitions and same-store growth;
|
• |
our ability to integrate acquired dealer groups;
|
• |
our ability to maintain our relationships with manufacturers, including meeting the requirements of our dealer agreements and receiving the benefits of certain manufacturer incentives;
|
• |
our ability to finance working capital and capital expenditures;
|
• |
general domestic and international political and regulatory conditions, including changes in tax or fiscal policy and the effects of current restrictions on various commercial and economic activities in response to the COVID-19 pandemic;
|
• |
global public health concerns, including the COVID-19 pandemic;
|
• |
demand for our products and our ability to maintain acceptable pricing for our products and services, including financing, insurance and extended service contracts;
|
• |
our operating cash flows, the availability of capital and our liquidity;
|
• |
our future revenue, same-store sales, income, financial condition, and operating performance;
|
• |
our ability to sustain and improve our utilization, revenue and margins;
|
• |
competition;
|
• |
seasonality and inclement weather such as hurricanes, severe storms, fire and floods, generally and in certain geographic regions in which we primarily generate our revenue;
|
• |
our ability to manage our inventory and retain key personnel;
|
• |
environmental conditions and real or perceived human health or safety risks;
|
• |
any potential tax savings we may realize as a result of our organizational structure;
|
• |
uncertainty regarding our future operating results and profitability;
|
• |
other risks associated with the COVID-19 pandemic including, among others, the ability to safely operate our stores, access to inventory and customer demand; and
|
• |
plans, objectives, expectations and intentions contained in this Quarterly Report on Form 10-Q that are not historical.
|
Item 1. |
Condensed Consolidated Financial Statements (Unaudited)
|
December 31,
2020
|
September 30,
2020
|
|||||||
Assets
|
||||||||
Current assets:
|
||||||||
Cash
|
$
|
25,952
|
$
|
66,087
|
||||
Restricted cash
|
3,984
|
2,066
|
||||||
Accounts receivable, net
|
14,499
|
18,479
|
||||||
Inventories
|
196,114
|
150,124
|
||||||
Prepaid expenses and other current assets
|
13,307
|
15,302
|
||||||
Total current assets
|
253,856
|
252,058
|
||||||
Property and equipment, net
|
62,833
|
18,442
|
||||||
Other assets:
|
||||||||
Deposits
|
392
|
350
|
||||||
Deferred tax assets
|
14,690
|
12,854
|
||||||
Identifiable intangible assets
|
74,004
|
61,304
|
||||||
Goodwill
|
146,562
|
113,059
|
||||||
Total other assets
|
235,648
|
187,567
|
||||||
Total assets
|
$
|
552,337
|
$
|
458,067
|
||||
Liabilities and Stockholders’ Equity
|
||||||||
Current liabilities:
|
||||||||
Accounts payable
|
$
|
10,545
|
$
|
12,781
|
||||
Other payables and accrued expenses
|
17,880 |
24,221
|
||||||
Customer deposits
|
23,386
|
17,280
|
||||||
Notes payable – floor plan
|
170,320
|
124,035
|
||||||
Current portion of long-term debt
|
10,481
|
7,419
|
||||||
Total current liabilities
|
232,612
|
185,736
|
||||||
Long-term Liabilities:
|
||||||||
Other long-term liabilities
|
6,220 |
1,482
|
||||||
Tax receivable agreement liability
|
17,556
|
15,585
|
||||||
Long-term debt, net of current portion and unamortized debt issuance costs
|
111,466
|
81,977
|
||||||
Total liabilities
|
367,854
|
284,780
|
||||||
Stockholders’ Equity:
|
||||||||
Preferred stock, $0.01 par value, 1,000,000 shares authorized, none issued and outstanding as of December 31, 2020 and September 30, 2020
|
-
|
-
|
||||||
Class A common stock, $0.01 par value, 40,000,000 shares authorized, 10,867,291 shares issued and outstanding as of December 31, 2020 and 10,391,661 issued and outstanding as of September
30, 2020
|
109
|
104
|
||||||
Class B common stock, $0.01 par value, 10,000,000 shares authorized, 4,108,007 shares issued and outstanding as of December 31, 2020 and 4,583,637 issued and outstanding as of September 30,
2020
|
41
|
46
|
||||||
Additional paid-in capital
|
111,859
|
105,947
|
||||||
Retained earnings
|
24,545
|
16,757
|
||||||
Total stockholders’ equity attributable to OneWater Marine Inc.
|
136,554
|
122,854
|
||||||
Equity attributable to non-controlling interests
|
47,929
|
50,433
|
||||||
Total stockholders’ equity
|
184,483
|
173,287
|
||||||
Total liabilities and stockholders’ equity
|
$
|
552,337
|
$
|
458,067
|
Three Months Ended
December 31,
|
||||||||
2020
|
2019
|
|||||||
Revenues
|
||||||||
New boat sales
|
$
|
151,828
|
$
|
102,852
|
||||
Pre-owned boat sales
|
38,580
|
33,071
|
||||||
Finance & insurance income
|
5,963
|
4,325
|
||||||
Service, parts & other sales
|
17,712
|
13,450
|
||||||
Total revenues
|
214,083
|
153,698
|
||||||
Cost of sales (exclusive of depreciation and amortization shown separately below)
|
||||||||
New boat
|
122,532
|
85,955
|
||||||
Pre-owned boat
|
30,452
|
27,866
|
||||||
Service, parts & other
|
8,663
|
7,688
|
||||||
Total cost of sales
|
161,647
|
121,509
|
||||||
Selling, general and administrative expenses
|
34,860
|
28,305
|
||||||
Depreciation and amortization
|
963
|
760
|
||||||
Transaction costs
|
200
|
437
|
||||||
Loss on contingent consideration
|
377
|
-
|
||||||
Income from operations
|
16,036
|
2,687
|
||||||
Other expense (income)
|
||||||||
Interest expense – floor plan
|
920
|
2,659
|
||||||
Interest expense – other
|
924
|
1,853
|
||||||
Change in fair value of warrant liability
|
-
|
(771
|
)
|
|||||
Other (income) expense, net
|
(94
|
)
|
13
|
|||||
Total other expense, net
|
1,750
|
3,754
|
||||||
Income (loss) before income tax expense
|
14,286
|
(1,067
|
)
|
|||||
Income tax expense
|
2,511
|
-
|
||||||
Net income (loss)
|
11,775
|
(1,067
|
)
|
|||||
Less: Net income attributable to non-controlling interests
|
(247
|
) |
||||||
Net loss attributable to One Water Marine Holdings, LLC
|
$
|
(1,314
|
)
|
|||||
Less: Net income attributable to non-controlling interests of One Water Marine Holdings, LLC
|
(3,987
|
)
|
||||||
Net income attributable to OneWater Marine Inc
|
$
|
7,788
|
||||||
Earnings per share of Class A common stock – basic
|
$
|
0.72
|
||||||
Earnings per share of Class A common stock – diluted
|
$
|
0.71
|
||||||
Basic weighted-average shares of Class A common stock outstanding
|
10,776
|
|||||||
Diluted weighted-average shares of Class A common stock outstanding
|
10,986
|
Class A Common Stock
|
Class B Common Stock
|
|||||||||||||||||||||||||||||||||||||||
Redeemable Preferred Interest in Subsidiary
|
Members’ Equity
|
Shares
|
Amount
|
Shares
|
Amount
|
Additional Paid-in Capital
|
Retained Earnings
|
Non-controlling Interest
|
Total Stockholders’ and Members’ Equity
|
|||||||||||||||||||||||||||||||
Balance at September 30, 2020
|
$
|
-
|
$
|
-
|
10,392
|
$
|
104
|
4,583
|
$
|
46
|
$
|
105,947
|
$
|
16,757
|
$
|
50,433
|
$
|
173,287
|
||||||||||||||||||||||
Net income
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
7,788
|
3,987
|
11,775
|
||||||||||||||||||||||||||||||
Distributions to members
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(1,319
|
)
|
(1,319
|
)
|
||||||||||||||||||||||||||||
Effect of September offering, including underwriter exercise of option to purchase shares
|
-
|
-
|
387
|
4
|
(387
|
)
|
(4
|
)
|
4,146
|
-
|
(4,256
|
)
|
(110
|
)
|
||||||||||||||||||||||||||
Exchange of B shares for A shares
|
-
|
-
|
88
|
1
|
(88
|
)
|
(1
|
)
|
916
|
-
|
(916
|
)
|
-
|
|||||||||||||||||||||||||||
Establishment of liabilities under tax receivable agreement and related changes to deferred tax assets associated with increases in tax basis
|
-
|
-
|
-
|
-
|
-
|
-
|
(228
|
)
|
-
|
-
|
(228
|
)
|
||||||||||||||||||||||||||||
Equity-based compensation
|
-
|
-
|
-
|
-
|
-
|
-
|
1,078
|
-
|
-
|
1,078
|
||||||||||||||||||||||||||||||
Balance at December 31, 2020
|
$
|
-
|
$
|
-
|
10,867
|
$
|
109
|
4,108
|
$
|
41
|
$
|
111,859
|
$
|
24,545
|
$
|
47,929
|
$
|
184,483
|
Class A Common Stock
|
Class B Common Stock
|
|||||||||||||||||||||||||||||||||||||||
Redeemable Preferred Interest in Subsidiary
|
Members’ Equity
|
Shares
|
Amount
|
Shares
|
Amount
|
Additional Paid-in
Capital
|
Retained Earnings
|
Non-
controlling Interest
|
Total Stockholders’ and Members’ Equity
|
|||||||||||||||||||||||||||||||
Balance at September 30, 2019
|
$
|
86,018
|
$
|
31,770
|
-
|
$
|
-
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
6,199
|
$
|
37,969
|
||||||||||||||||||||||
Net (loss) income
|
-
|
(1,314
|
)
|
-
|
-
|
-
|
-
|
-
|
-
|
247
|
(1,067
|
)
|
||||||||||||||||||||||||||||
Distributions to members
|
(1,310
|
)
|
(189
|
)
|
-
|
-
|
-
|
-
|
-
|
-
|
(732
|
)
|
(921
|
)
|
||||||||||||||||||||||||||
Accumulated unpaid preferred returns
|
2,183
|
(2,183
|
)
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(2,183
|
)
|
||||||||||||||||||||||||||||
Accretion of redeemable preferred and issuance costs
|
162
|
(162
|
)
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(162
|
)
|
||||||||||||||||||||||||||||
Equity-based compensation
|
-
|
39
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
39
|
||||||||||||||||||||||||||||||
Balance at December 31, 2019
|
$ |
87,053
|
$ |
27,961
|
-
|
$ |
-
|
-
|
$ |
-
|
$ |
-
|
$ |
-
|
$ |
5,714
|
$ |
33,675
|
Three Months Ended December 31,
|
||||||||
2020
|
2019
|
|||||||
Net income (loss)
|
$
|
11,775
|
$
|
(1,067
|
)
|
|||
Adjustments to reconcile net income (loss) to net cash used in operating activities:
|
||||||||
Depreciation and amortization
|
963
|
760
|
||||||
Equity-based awards
|
1,078
|
39
|
||||||
Gain on asset disposals
|
(102
|
)
|
(143
|
)
|
||||
Change in fair value of long-term warrant liability
|
-
|
(771
|
)
|
|||||
Non-cash interest expense
|
191
|
1,721
|
||||||
Deferred income tax provision
|
(94
|
)
|
-
|
|||||
Payment of acquisition contingent consideration
|
(5,520
|
)
|
-
|
|||||
(Increase) decrease in assets:
|
||||||||
Accounts receivable
|
4,089
|
5,720
|
||||||
Inventories
|
(40,576
|
)
|
(36,499
|
)
|
||||
Prepaid expenses and other current assets
|
2,013
|
70
|
||||||
Deposits
|
(42
|
)
|
-
|
|||||
Increase (decrease) in liabilities:
|
||||||||
Accounts payable
|
(2,799
|
)
|
64
|
|||||
Other payables and accrued expenses
|
(4,362
|
)
|
(1,472
|
)
|
||||
Customer deposits
|
4,771
|
2,855
|
||||||
Net cash used in operating activities
|
(28,615
|
)
|
(28,723
|
)
|
||||
Cash flows from investing activities
|
||||||||
Purchases of property and equipment and construction in progress
|
(2,423
|
)
|
(1,997
|
)
|
||||
Proceeds from disposal of property and equipment
|
91
|
235
|
||||||
Cash used in acquisitions
|
(77,631
|
)
|
-
|
|||||
Net cash used in investing activities
|
(79,963
|
)
|
(1,762
|
)
|
||||
Cash flows from financing activities
|
||||||||
Net borrowings from floor plan
|
42,269
|
39,105
|
||||||
Proceeds from long-term debt
|
30,000
|
-
|
||||||
Payments on long-term debt
|
(211
|
)
|
(2,504
|
)
|
||||
Payments of debt issuance costs
|
(252
|
)
|
(79
|
)
|
||||
Payments of initial public offering costs
|
-
|
(3,547
|
)
|
|||||
Payments of September offering costs
|
(540
|
)
|
-
|
|||||
Payment of acquisition contingent consideration
|
-
|
(1,040
|
)
|
|||||
Distributions to redeemable preferred interest members
|
-
|
(1,310
|
)
|
|||||
Distributions to members
|
(905
|
)
|
(921
|
)
|
||||
Net cash provided by financing activities
|
70,361
|
29,704
|
||||||
Net change in cash
|
(38,217
|
)
|
(781
|
)
|
||||
Cash and restricted cash at beginning of period
|
68,153
|
11,492
|
||||||
Cash and restricted cash at end of period
|
$
|
29,936
|
$
|
10,711
|
||||
Supplemental cash flow disclosures
|
||||||||
Cash paid for interest
|
$
|
1,653
|
$
|
2,791
|
||||
Cash paid for income taxes
|
6,613
|
-
|
||||||
Noncash items
|
||||||||
Acquisition purchase price funded by seller notes payable
|
$
|
2,056
|
-
|
|||||
Acquisition purchase price funded by contingent consideration
|
4,766
|
-
|
||||||
Accrued purchase consideration
|
3,719
|
- |
||||||
Purchase of property and equipment funded by long-term debt
|
833
|
419
|
||||||
Distributions, declared not yet paid
|
414
|
-
|
1. |
Description of Company and Basis of Presentation
|
2. |
Summary of Significant Accounting Policies
|
($ in thousands)
|
Three Months
Ended December
31, 2020
|
|||
Beginning contract liability
|
$
|
17,280
|
||
Revenue recognized from contract liabilities included in the beginning balance
|
(11,647
|
)
|
||
Increases due to cash received, net of amounts recognized in revenue during the period
|
17,753
|
|||
Ending contract liability
|
$
|
23,386
|
Three Months
Ended December
31, 2020
|
||||
Goods and services transferred at a point in time
|
93.1
|
%
|
||
Goods and services transferred over time
|
6.9
|
%
|
||
Total Revenue
|
100.0
|
%
|
3. |
New Accounting Pronouncements
|
4. |
Acquisitions
|
Summary of Assets Acquired and Liabilities Assumed
|
($ in thousands)
|
|||
Tangible assets
|
$
|
5,794
|
||
Identifiable intangible assets
|
2,940
|
|||
Goodwill
|
6,854
|
|||
Liabilities assumed
|
(5,341
|
)
|
||
Total purchase price
|
$
|
10,247
|
Summary of Assets Acquired
|
($ in thousands)
|
|||
Tangible assets
|
$
|
474
|
||
Identifiable intangible assets
|
8,230
|
|||
Goodwill
|
23,643
|
|||
Total purchase price
|
$
|
32,347
|
Summary of Assets Acquired and Liabilities Assumed
|
($ in thousands)
|
|||
Property and equipment
|
$
|
41,300
|
||
Other tangible assets
|
88
|
|||
Identifiable intangible assets
|
1,530
|
|||
Goodwill
|
3,005
|
|||
Liabilities assumed
|
(346
|
)
|
||
Total purchase price
|
$
|
45,577
|
5. |
Inventories
|
($ in thousands)
|
December
31, 2020
|
September
30, 2020
|
||||||
New vessels
|
$
|
160,723
|
$
|
120,012
|
||||
Pre-owned vessels
|
24,478
|
21,262
|
||||||
Work in process, parts and accessories
|
10,913
|
8,850
|
||||||
Total inventories
|
$
|
196,114
|
$
|
150,124
|
6. |
Goodwill and Other Identifiable Intangible Assets
|
($ in thousands)
|
Goodwill
|
|||
Balance as of September 30, 2020
|
$
|
113,059
|
||
Goodwill acquisitions during the year
|
33,503
|
|||
Balance as of December 31, 2020
|
$
|
146,562
|
($ in thousands)
|
Identifiable Intangible Assets
|
|||
Balance as of September 30, 2020
|
$
|
61,304
|
||
Identifiable intangible assets acquisitions during the year
|
12,700
|
|||
Balance as of December 31, 2020
|
$
|
74,004
|
7. |
Notes Payable — Floor Plan
|
8. |
Long-term Debt and Line of Credit
|
($ in thousands)
|
December
31, 2020
|
September
30, 2020
|
||||||
Term note payable to Truist Bank, secured and bearing interest at 2.75% at December 31, 2020 and 3.0% September 30, 2020. The note requires quarterly principal payments
commencing on March 31, 2021 and maturing with a full repayment on July 22, 2025
|
$
|
80,000
|
$
|
80,000
|
||||
Revolving note payable for an amount up to $30.0 million to Truist Bank, secured and bearing interest at 4.5% at December 31, 2020. The revolver requires quarterly interest
payments commencing on March 31, 2021 and maturing with a full repayment on July 22, 2025
|
30,000
|
-
|
||||||
Note payable to commercial vehicle lenders secured by the value of the vehicles bearing interest at rates ranging from 0.0% to 8.9% per annum. The note requires monthly
installment payments of principal and interest ranging from $100 to $5,600 through January 2026
|
3,076
|
2,454
|
||||||
Note payable to Central Marine Services, Inc., unsecured and bearing interest at 5.5% per annum. The note requires monthly interest payments, with a balloon payment of
principal due on February 1, 2022
|
2,164
|
2,164
|
||||||
Note payable to Tom George Yacht Sales, Inc., unsecured and bearing interest at 5.5% per annum. The note requires quarterly interest payments, with a balloon payment of
principal due on December 1, 2023
|
2,056
|
-
|
||||||
Note payable to Ocean Blue Yacht Sales, unsecured and bearing interest at 5.0% per annum. The note requires quarterly interest payments, with a balloon payment of principal
due on February 1, 2022
|
1,920
|
1,920
|
||||||
Note payable to Lab Marine, Inc., unsecured and bearing interest at 6.0% per annum. The note requires annual interest payments, with a balloon payment of principal due on
March 1, 2021
|
1,500
|
1,500
|
||||||
Note payable to Slalom Shop, LLC, unsecured and bearing interest at 5.0% per annum. The note requires quarterly interest payments, with a balloon payment of principal due on
December 1, 2021
|
1,271
|
1,271
|
||||||
Note payable to Bosun’s Marine, Inc., unsecured and bearing interest at 4.5% per annum. The note requires annual interest payments with a balloon payment due on June 1, 2021
|
1,227
|
1,227
|
||||||
Note payable to Rebo, Inc., unsecured and bearing interest at 5.5% per annum. The note requires annual interest payments with a balloon payment due on April 1, 2021
|
1,000
|
1,000
|
||||||
Total debt outstanding
|
124,214
|
91,536
|
||||||
Less current portion (net of current debt issuance costs)
|
(10,481
|
)
|
(7,419
|
)
|
||||
Less unamortized portion of debt issuance costs
|
(2,267
|
)
|
(2,140
|
)
|
||||
Long-term debt, net of current portion of unamortized debt issuance costs
|
$
|
111,466
|
$
|
81,977
|
9. |
Stockholders’ and Members’ Equity
|
Restricted Stock Unit Awards
|
||||||||
Number of
Shares
|
Weighted Average
Grant Date Fair
Value ($)
|
|||||||
Unvested at September 30, 2020
|
301,643
|
$
|
15.78
|
|||||
Awarded
|
141,020
|
20.49
|
||||||
Vested
|
-
|
-
|
||||||
Forfeited
|
-
|
-
|
||||||
Unvested at December 31, 2020
|
442,663
|
$
|
17.28
|
Earnings per share:
|
Three Months
Ended December
31, 2020
|
|||
Numerator:
|
||||
Net income attributable to OneWater Inc
|
$
|
7,788
|
||
Denominator:
|
||||
Weighted-average number of unrestricted outstanding common shares used to calculate basic net income per share
|
10,776
|
|||
Effect of dilutive securities:
|
||||
Restricted stock units
|
210
|
|||
Diluted weighted-average shares of Class A common stock outstanding used to calculate diluted net income per share
|
10,986
|
|||
Earnings per share of Class A common stock – basic
|
$
|
0.72
|
||
Earnings per share of Class A common stock – diluted
|
$
|
0.71
|
Three Months
Ended December
31, 2020
|
||||
Class B common stock
|
4,199
|
|||
Restricted stock units
|
206
|
|||
4,405
|
10. |
Redeemable Preferred Interest in Subsidiary
|
11. |
Income Taxes
|
12. |
Contingencies and Commitments
|
13. |
Related Party Transactions
|
14. |
Subsequent events
|
Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
•
|
On December 1, 2020, Tom George Yacht Group with two locations in Florida
|
•
|
On December 31, 2020, Walker Marine Group with five locations in Florida
|
•
|
On December 31, 2020, Roscioli Yachting Center with one location in Florida
|
•
|
Effective December 1, 2020, we acquired Tom George Yacht Sales, Inc, a full-service marine retailer based in Florida with two stores.
|
•
|
Effective December 31, 2020, we acquired Walker Marine Group, Inc., a full-service marine retailer based in Florida with five stores.
|
•
|
Effective December 31, 2020, we acquired Roscioli Yachting Center, Inc., a full-service marina and yachting facility located in Florida, including the related real estate and in-water slips.
|
•
|
OneWater Inc. is subject to U.S. federal, state and local income taxes as a corporation. Our accounting predecessor, OneWater LLC, was and is treated as a partnership for U.S. federal income tax purposes, and as
such, was generally not subject to U.S. federal income tax at the entity level. Rather, the tax liability with respect to its taxable income is passed through to its members. Accordingly, the financial data attributable to our predecessor
contains no provision for U.S. federal income taxes or income taxes in any state or locality. OneWater Inc. was subject to U.S. federal, state and local taxes at an estimated blended statutory rate of 24.2% of pre-tax earnings for the
three months ended December 31, 2020.
|
•
|
As we further implement controls, processes and infrastructure applicable to companies with publicly traded equity securities, it is likely that we will incur additional SG&A expenses relative to historical
periods. See ‘‘—Post-Offering Taxation and Public Company Costs.’’
|
|
For the three months ended December 31, 2020
|
For the three months ended December 31, 2019
|
||||||||||||||||||||||
|
Amount
|
% of Revenue
|
Amount
|
% of Revenue
|
$ Change
|
% Change
|
||||||||||||||||||
|
($ in thousands)
|
|||||||||||||||||||||||
Revenues
|
||||||||||||||||||||||||
New boat sales
|
$
|
151,828
|
70.9
|
%
|
$
|
102,852
|
66.9
|
%
|
$
|
48,976
|
47.6
|
%
|
||||||||||||
Pre-owned boat sales
|
38,580
|
18.0
|
%
|
33,071
|
21.5
|
%
|
5,509
|
16.7
|
%
|
|||||||||||||||
Finance & insurance income
|
5,963
|
2.8
|
%
|
4,325
|
2.8
|
%
|
1,638
|
37.9
|
%
|
|||||||||||||||
Service, parts and other sales
|
17,712
|
8.3
|
%
|
13,450
|
8.8
|
%
|
4,262
|
31.7
|
%
|
|||||||||||||||
Total revenues
|
214,083
|
100.0
|
%
|
153,698
|
100.0
|
%
|
60,385
|
39.3
|
%
|
|||||||||||||||
|
||||||||||||||||||||||||
Gross Profit
|
||||||||||||||||||||||||
New boat gross profit
|
29,296
|
13.7
|
%
|
16,897
|
11.0
|
%
|
12,399
|
73.4
|
%
|
|||||||||||||||
Pre-owned boat gross profit
|
8,128
|
3.8
|
%
|
5,205
|
3.4
|
%
|
2,923
|
56.2
|
%
|
|||||||||||||||
Finance & insurance gross profit
|
5,963
|
2.8
|
%
|
4,325
|
2.8
|
%
|
1,638
|
37.9
|
%
|
|||||||||||||||
Service, parts & other gross profit
|
9,049
|
4.2
|
%
|
5,762
|
3.7
|
%
|
3,287
|
57.0
|
%
|
|||||||||||||||
Total gross profit
|
52,436
|
24.5
|
%
|
32,189
|
20.9
|
%
|
20,247
|
62.9
|
%
|
|||||||||||||||
|
||||||||||||||||||||||||
Selling, general and administrative expenses
|
34,860
|
16.3
|
%
|
28,305
|
18.4
|
%
|
6,555
|
23.2
|
%
|
|||||||||||||||
Depreciation and amortization
|
963
|
0.4
|
%
|
760
|
0.5
|
%
|
203
|
26.7
|
%
|
|||||||||||||||
Transaction costs
|
200
|
0.1
|
%
|
437
|
0.3
|
%
|
(237
|
)
|
-54.2
|
%
|
||||||||||||||
Gain on contingent consideration
|
377
|
0.2
|
%
|
-
|
0.0
|
%
|
377
|
100.0
|
%
|
|||||||||||||||
|
||||||||||||||||||||||||
Income from operations
|
16,036
|
7.5
|
%
|
2,687
|
1.7
|
%
|
13,349
|
496.8
|
%
|
|||||||||||||||
|
||||||||||||||||||||||||
Interest expense - floor plan
|
920
|
0.4
|
%
|
2,659
|
1.7
|
%
|
(1,739
|
)
|
-65.4
|
%
|
||||||||||||||
Interest expense - other
|
924
|
0.4
|
%
|
1,853
|
1.2
|
%
|
(929
|
)
|
-50.1
|
%
|
||||||||||||||
Change in fair value of warrant liability
|
-
|
0.0
|
%
|
(771
|
)
|
-0.5
|
%
|
771
|
-100.0
|
%
|
||||||||||||||
Other (income) expense, net
|
(94
|
)
|
0.0
|
%
|
13
|
0.0
|
%
|
(107
|
)
|
-823.1
|
%
|
|||||||||||||
Income before income tax expense
|
14,286
|
6.7
|
%
|
(1,067
|
)
|
-0.7
|
%
|
15,353
|
-1438.9
|
%
|
||||||||||||||
Income tax expense
|
2,511
|
1.2
|
%
|
-
|
0.0
|
%
|
2,511
|
100.0
|
%
|
|||||||||||||||
Net income (loss)
|
11,775
|
5.5
|
%
|
(1,067
|
)
|
-0.7
|
%
|
12,842
|
-1203.6
|
%
|
||||||||||||||
Less: Net income attributable to non-controlling interest
|
-
|
(247
|
)
|
247
|
-100.0
|
%
|
||||||||||||||||||
Net loss attributable to One Water Marine Holdings, LLC
|
$
|
(1,314
|
)
|
|||||||||||||||||||||
Less: Net income attributable to non-controlling interests of One Water Marine Holdings, LLC
|
(3,987
|
)
|
||||||||||||||||||||||
Net income attributable to One Water Marine Inc.
|
$
|
7,788
|
Three months ended
December 31,
|
|||||||||
Description
|
2020
|
2019
|
|||||||
($ in thousands)
|
|||||||||
Net income (loss)
|
$
|
11,775
|
$
|
(1,067
|
)
|
||||
Interest expense – other
|
924
|
1,853
|
|||||||
Income tax expense
|
2,511
|
-
|
|||||||
Depreciation and amortization
|
963
|
760
|
|||||||
Loss on contingent consideration
|
377
|
-
|
|||||||
Transaction costs
|
200
|
437
|
|||||||
Change in fair value of warrant liability
|
-
|
(771
|
)
|
||||||
Other (income) expense, net
|
(94
|
)
|
13
|
||||||
Adjusted EBITDA
|
$
|
16,656
|
$
|
1,225
|
Three Months ended December 31,
|
||||||||||||
Description
|
2020
|
2019
|
Change
|
|||||||||
($ in thousands)
|
||||||||||||
Net cash used in operating activities
|
$
|
(28,615
|
)
|
$
|
(28,723
|
)
|
$
|
108
|
||||
Net cash used in investing activities
|
(79,963
|
)
|
(1,762
|
)
|
(78,201
|
)
|
||||||
Net cash provided by financing activities
|
70,361
|
29,704
|
40,657
|
|||||||||
Net change in cash
|
$
|
(38,217
|
)
|
$
|
(781
|
)
|
$
|
(37,436
|
)
|
Item 3. |
Quantitative and Qualitative Disclosure about Market Risk
|
Item 4. |
Controls and Procedures
|
Item 1A. |
Risk Factors
|
Exhibit No.
|
Description
|
Amended and Restated Certificate of Incorporation of OneWater Marine Inc. (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K, File No. 001-39213, filed with the Commission on February 18, 2020).
|
|
Amended and Restated Bylaws of OneWater Marine Inc. (incorporated by reference to Exhibit 3.2 to the Registrant’s Current Report on Form 8-K, File No. 001-39213, filed with the Commission on February 18, 2020).
|
|
Second Amendment to Sixth Amended and Restated Inventory Financing Agreement, dated as of December 10, 2020, between Wells Fargo Commercial
Distribution Finance, LLC as Agent for the several financial institutions that may from time to time become party thereto and Dealers that may from time to
time become party thereto.
|
|
10.2¥ |
Incremental Amendment No. 1, dated February 2, 2021, by and among One Water Assets & Operations, LLC, One Water Marine Holdings, LLC, OneWater Marine Inc., each of the other Guarantors from time to time party thereto, the Lenders
party thereto and Truist Bank, as Administrative Agent (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K, File No. 001-39213, filed with the Commission on February 4, 2021).
|
Certification of the Chief Executive Officer required by Rule 13a-14(a) or Rule 15d-14(a).
|
|
Certification of the Chief Financial Officer required by Rule 13a-14(a) or Rule 15d-14(a).
|
|
Certification of the Chief Executive Officer required by Rule 13a-14(b) or Rule 15d-14(b) and 18 U.S.C. 1350.
|
|
Certification of the Chief Financial Officer required by Rule 13a-14(b) or Rule 15d-14(b) and 18 U.S.C. 1350.
|
|
101.INS(a)
|
XBRL Instance Document.
|
101.SCH(a)
|
XBRL Schema Document.
|
101.CAL(a)
|
XBRL Calculation Linkbase Document.
|
101.DEF(a)
|
XBRL Definition Linkbase Document.
|
101.LAB(a)
|
XBRL Labels Linkbase Document.
|
101.PRE(a)
|
XBRL Presentation Linkbase Document.
|
* |
Filed herewith.
|
** |
Furnished herewith.
|
¥
|
Certain schedules and exhibits to this agreement have been omitted in accordance with Item 601(a)(5) of Regulation S-K. A copy of any omitted schedule and/or exhibit will be furnished to the Securities and Exchange Commission on
request.
|
ONEWATER MARINE INC.
|
||
(Registrant)
|
||
By:
|
/s/ Philip Austin Singleton, Jr.
|
|
Philip Austin Singleton, Jr.
|
||
Chief Executive Officer
|
||
By:
|
/s/ Jack Ezzell
|
|
Jack Ezzell
|
||
Chief Financial Officer
|
||
February 11, 2021
|
ONEWATER MARINE INC.
|
||
ONE WATER MARINE HOLDINGS, LLC, and
|
||
ONE WATER ASSETS & OPERATIONS, LLC
|
||
By:
|
/s/ Philip Austin Singleton, Jr.
|
|
Name:
|
Philip Austin Singleton, Jr.
|
|
Title:
|
Chief Executive Officer
|
LEGENDARY ASSETS & OPERATIONS, LLC,
|
||
SINGLETON ASSETS & OPERATIONS, LLC,
|
||
SOUTH FLORIDA ASSETS & OPERATIONS, LLC,
|
||
MIDWEST ASSETS & OPERATIONS, LLC,
|
||
SOUTH SHORE LAKE ERIE ASSETS & OPERATIONS, LLC, and
|
||
BOSUN’S ASSETS & OPERATIONS, LLC
|
||
By:
|
/s/ Philip Austin Singleton, Jr.
|
|
Name:
|
Philip Austin Singleton, Jr.
|
|
Title:
|
Manager
|
/s/ Philip Austin Singleton, Jr.
|
/s/ Anthony Aisquith |
|
Philip Austin Singleton, Jr., as Guarantor
|
Anthony Aisquith, as Guarantor
|
WELLS FARGO COMMERCIAL DISTRIBUTION
|
FINANCE, LLC, as Agent and Lender
|
By:
|
/s/ Thomas M. Adamski |
Name:
|
Thomas M. Adamski |
Title:
|
Vice President Credit |
1. |
I have reviewed this Quarterly Report on Form 10-Q of OneWater Marine Inc. (the “registrant”) for the quarter ended December 31, 2020;
|
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to the period covered by this report;
|
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations
and cash flows of the registrant as of, and for, the periods presented in this report;
|
4. |
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e))
for the registrant and have:
|
a. |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b. |
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures,
as of the end of the period covered by this report based on such evaluation; and
|
c. |
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal
quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5. |
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit
committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a. |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s
ability to record, process, summarize and report financial information; and
|
b. |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
By:
|
/s/ Philip Austin Singleton, Jr.
|
|
Philip Austin Singleton, Jr.
|
||
Chief Executive Officer
|
||
(Principal Executive Officer)
|
1. |
I have reviewed this Quarterly Report on Form 10-Q of OneWater Marine Inc. (the “registrant”) for the quarter ended December 31, 2020;
|
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to the period covered by this report;
|
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations
and cash flows of the registrant as of, and for, the periods presented in this report;
|
4. |
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e))
for the registrant and have:
|
a. |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b. |
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures,
as of the end of the period covered by this report based on such evaluation; and
|
c. |
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal
quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5. |
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit
committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a. |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s
ability to record, process, summarize and report financial information; and
|
b. |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Dated: February 11, 2021
|
By:
|
/s/ Jack Ezzell
|
Jack Ezzell
|
||
Chief Financial Officer
|
||
(Principal Financial Officer)
|
1. |
the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
2. |
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Dated: February 11, 2021
|
By:
|
/s/ Philip Austin Singleton, Jr.
|
Philip Austin Singleton, Jr.
|
||
Chief Executive Officer
|
||
(Principal Executive Officer)
|
1. |
the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
2. |
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Dated: February 11, 2021
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By:
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/s/ Jack Ezzell
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Jack Ezzell
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Chief Financial Officer
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(Principal Financial Officer)
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