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Significant top- and bottom-line growth fueled by record demand and strong execution

  

Fiscal Year 2021 Highlights

 

Fiscal Fourth Quarter 2021 Results

Revenue for the fiscal fourth quarter 2021 was $280.3 million, an increase of 3.4% compared to $271.0 million in fiscal fourth quarter 2020. Industry-wide supply chain challenges slowed sales of new and pre-owned boats in the fiscal fourth quarter 2021, compared to the prior year. Finance & insurance income was up 25.0% compared to the prior year and service, parts and other sales was up 33.3% as a result of the Company’s strategic focus on expanding the high margin, less cyclical service and parts business.

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During the fiscal fourth quarter 2021 same-store sales decreased 8%, following a 25% increase in the fourth quarter 2020 and is the result of the industry-wide inventory shortages. Absent the inventory challenges, same-store sales would have been positive.

Fiscal fourth quarter 2021 selling, general and administrative expenses totaled $55.4 million, or 19.8% of revenue, compared to $39.8 million, or 14.7% of revenue, in the fiscal fourth quarter of 2020. The increase in selling, general and administrative expenses as a percentage of revenue was due mainly to higher variable personnel costs and increased costs given the current personnel and supply chain environment.

Net income for the fiscal fourth quarter of 2021 totaled $22.5 million, compared to $6.0 million in the fiscal fourth quarter of 2020. The significant increase was primarily due to the heightened level of gross profit for the period, partially offset by changes in SG&A and other expenses. Earnings per diluted share for the fiscal fourth quarter of 2021 was $1.35 per diluted share, compared to $0.30 per diluted share in 2020.

Fiscal fourth quarter 2021 Adjusted EBITDA increased 46% to $33.6 million, compared to $22.9 million for the fiscal fourth quarter of 2020 (see reconciliation of Non-GAAP financial measures).

Fiscal Year Ended September 30, 2021 Results

Record revenue for the fiscal year ended September 30, 2021, increased 20.1% to $1,228.2 million from $1,023.0 million for the fiscal year ended September 30, 2020, driven by an increase in average unit price of new and pre-owned boats and a 52.0% increase in service, parts and other sales compared to the prior year. Same store sales increased 10% compared to the prior year.

Gross profit totaled $357.5 million for the fiscal year 2021, compared to $235.5 million for the fiscal year 2020. Gross profit margin of 29.1% increased 610 basis points compared to the prior year primarily due to the increase in the margin achieved on boat sales and increases in higher margin finance & insurance income and service, parts & other gross profit.

Fiscal year 2021 selling, general and administrative expenses totaled $199.0 million, or 16.2% of revenue, compared to $143.6 million, or 14.0% of revenue in fiscal year 2020. 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 and supply chain environment.

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Net income for fiscal year 2021 totaled $116.4 million compared to $48.5 million in fiscal year 2020, an increase of 140.0%. The increase is primarily due to the increase in sales and gross margins in 2021. Earnings per diluted share for the fiscal year of 2021 was $6.96 per diluted share, compared to $2.77 per diluted share in 2020.

Fiscal 2021 Adjusted EBITDA increased 87.6% to $155.8 million, compared to $83.1 million in fiscal year 2020 (see reconciliation of non-GAAP financial measures).

As of September 30, 2021, the Company’s cash and cash equivalents balance was $62.6 million, a decrease of $3.5 million compared to $66.1 million as of September 30, 2020. Total inventory as of September 30, 2021, increased sequentially to $143.9 million compared to $116.9 million on June 30, 2021. As expected, the Company was able to start building inventory levels following a robust summer selling season. Total long-term debt at September 30, 2021 was $114.4 million, less cash and cash equivalents yields net debt of $51.8 million.

Fiscal Year 2022 Guidance

Conference Call and Webcast

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ONEWATER MARINE INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

($ in thousands except per share data)

(Unaudited)

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ONEWATER MARINE INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

($ in thousands, except par value and share data)

(Unaudited)

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ONEWATER MARINE INC.

Reconciliation of Non-GAAP Financial Measures

(amounts in thousands, except per share data)

(Unaudited)

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About OneWater Marine Inc.

OneWater Marine Inc. is one of the largest and fastest-growing premium recreational boat retailers in the United States. OneWater operates 71 stores throughout 11 different states, eight 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, parts and accessories, finance and insurance products, maintenance and repair services and ancillary services such as boat storage.

Non-GAAP Financial Measures and Key Performance Indicators

Adjusted EBITDA

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 the fair value of warrant liability, gain (loss) on 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 fair value adjustment of the warrants, gain or loss on 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.

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.

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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.