UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549



FORM 8-K



CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 
Date of report (Date of earliest event reported): August 4, 2022


OneWater Marine Inc.
(Exact name of registrant as specified in its charter)



Delaware
001-39213
83-4330138
(State or other jurisdiction of incorporation)
(Commission File Number)
(IRS Employer Identification No.)

6275 Lanier Islands Parkway
Buford, Georgia

30518
(Address of principal executive offices)

(Zip Code)

Registrant’s Telephone Number, including Area Code:  (678) 541-6300



Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:


Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)


Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)


Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))


Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934:

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

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐



Item 2.02
Results of Operations and Financial Condition.

On August 4, 2022, OneWater Marine Inc. (the “Company”) issued a press release announcing the Company’s operating and financial results for the quarter ended June 30, 2022. A copy of the press release is furnished as Exhibit 99.1 to this report and incorporated into this Item 2.02 by reference.

The information furnished pursuant to this Item 2.02, including Exhibit 99.1, shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and will not be incorporated by reference into any filing under the Securities Act unless specifically identified therein as being incorporated therein by reference.

Item 9.01
Financial Statements and Exhibits.

(d)
Exhibits.

Exhibit
Number

Description
   99.1*

Press Release issued by OneWater Marine Inc., dated August 4, 2022.
104

Cover Page Interactive Data File (embedded within the Inline XBRL document).

*
Furnished herewith.

2

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


ONEWATER MARINE INC.



By:
/s/ Jack Ezzell

Name:
Jack Ezzell

Title:
Chief Financial Officer
Dated: August 4, 2022


3


Exhibit 99.1


OneWater Marine Inc. Announces Record Fiscal Third Quarter 2022 Results
Robust acquisition strategy and strong organic growth delivering continued momentum
 
Fiscal Third Quarter 2022 Highlights

Revenue increased 41% to $569 million

Same-store sales increased 12%

Gross profit margin expanded 90 basis points to 32.3%

Net income increased 25% to $64 million

Net income per diluted share attributable to OneWater increased 27% to $3.86

Adjusted EBITDA1 increased 45% to $95 million
 
BUFORD, GA – August 4, 2022 – OneWater Marine Inc. (NASDAQ: ONEW) (“OneWater” or the “Company”) today announced results for its fiscal third quarter ended June 30, 2022.

"The business is firing on all cylinders, significantly exceeding our expectations. We delivered record results in the fiscal third quarter, with revenues increasing 41% and Adjusted EBITDA1 rising 45%. Our performance was bolstered by strength across the business, diversity in our model, and a powerful, multi-faceted acquisition engine,” commented Austin Singleton, Chief Executive Officer at OneWater. “Through a broad network of high-caliber stores, our dealers are leveraging OneWater’s scale, inventory and expanded offerings, while mitigating challenges presented by a constrained production environment. At the same time, we are rapidly growing the business and further positioning OneWater as a leader in the industry. Our announced acquisition of Ocean Bio-Chem, Inc. late in the quarter provides yet another example of our M&A prowess to support long-term profitable growth.”
 
“As we enter the final quarter of our fiscal year, we have maintained our momentum and the consumer demand has been robust,” continued Mr. Singleton. “Since entering the public markets more than two years ago, we have delivered strong earnings results for our shareholders quarter after quarter, and we believe we have strategies in place for long-term value creation. Through our expanded footprint, diversified business model and best-in-class integration playbook, we believe we are well-positioned for outperformance throughout the coming years.”

For the Three Months
Ended June 30
 
2022
   
2021
   
$ Change
   
% Change
 
   
(unaudited, $ in thousands)
 
Revenues
                       
New boat
 
$
376,886
   
$
288,222
   
$
88,664
     
30.8
%
Pre-owned boat
   
98,181
     
71,116
     
27,065
     
38.1
%
Finance & insurance income
   
18,979
     
15,238
     
3,741
     
24.6
%
Service, parts & other
   
74,854
     
29,631
     
45,223
     
152.6
%
Total revenues
 
$
568,900
   
$
404,207
   
$
164,693
     
40.7
%

1 See reconciliation of Non-GAAP financial measures below.


Fiscal Third Quarter 2022 Results

Record revenue for fiscal third quarter 2022 was $568.9 million, an increase of 40.7% compared to $404.2 million in fiscal third quarter 2021 and was primarily due to our increase in same-store sales and revenue from acquired businesses, with strong contribution from acquired revenues related to service, parts and other sales. During fiscal third quarter 2022 same-store sales increased 12% compared to fiscal third quarter 2021, primarily as a result of the continued strong demand environment.

New and pre-owned boat revenue increased 30.8% and 38.1%, respectively, compared to the prior year, driven by a significant increase in the average unit price of new boats and a significant increase in the unit sales of pre-owned boats. Finance & insurance income was up 24.6% and service, parts and other sales was up 152.6%, both compared to the prior year, as a result of the Company’s acquisition activity to expand the higher margin, less cyclical service, parts & other revenues.

Gross profit totaled $183.9 million for fiscal third quarter 2022, up $57.0 million from $127.0 million for fiscal third quarter 2021. Gross profit margin of 32.3% increased 90 basis points compared to the prior year period driven by our strategic acquisitions of companies focused on higher margin, less cyclical service, parts & other revenues and brokerage revenues, as well as the shift in the mix and size of boats sold and local pricing strategies.
 
Fiscal third quarter 2022 selling, general and administrative expenses totaled $87.9 million, or 15.4% of revenue, compared to $60.5 million, or 15.0% of revenue, in fiscal third quarter 2021. The increase in selling, general and administrative expenses as a percentage of revenue was due mainly to higher marketing expenses, as well as higher administrative costs.

Net income for fiscal third quarter 2022 totaled $64.5 million, compared to $51.6 million in fiscal third quarter 2021. The increase was primarily due to the elevated gross profit and significant increase in service, parts and other sales during the period.

Earnings per diluted share for fiscal third quarter 2022 was $3.86 per diluted share, compared to $3.04 per diluted share in 2021. For fiscal third quarter 2022, charges related to transaction costs and contingent consideration adversely impacted diluted earnings per share. This amount, tax effected at 25%, was $0.20 per diluted share.

Fiscal third quarter 2022 Adjusted EBITDA1 increased 45.2% to $95.1 million, compared to $65.5 million for fiscal third quarter 2021.

As of June 30, 2022, the Company’s cash and cash equivalents balance was $95.7 million and total liquidity, including cash and availability under credit facilities, was in excess of $125.0 million. Total inventory as of June 30, 2022, decreased sequentially to $269.4 million compared to $293.2 million on March 31, 2022. As expected, inventories declined as the summer selling season ramped up during the quarter.

Total long-term debt as of June 30, 2022, was $335.8 million, and adjusted long-term net debt (net of $95.7 million cash)1 is 1.0 times trailing twelve-month Adjusted EBITDA.1

Fiscal Year 2022 Guidance

The Company is raising its fiscal full year 2022 outlook for Adjusted EBITDA2 to be in the range of $240 million to $250 million and earnings per diluted share to be in the range of $9.20 to $9.60, both of which include previously completed acquisitions but excludes any other acquisitions that may be completed during the remainder of the year. For the fiscal year 2022, OneWater now anticipates that same store sales will be up low-double digits, despite an expected challenging inventory environment.

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.


Conference Call and Webcast

OneWater will host a conference call to discuss its fiscal third quarter earnings on Thursday, August 4, 2022, at 8:30 am Eastern time.  To access the conference call via phone, participants will need to register using the following link where they will be provided a phone number and access code:  
https://register.vevent.com/register/BI090ad2b5267948ff8f51a123d06a4699
Alternatively, a live webcast of the conference call can be accessed through the “Events” section of the Company’s website at https://investor.onewatermarine.com/ where it will be archived for one year. 
 

ONEWATER MARINE INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
($ in thousands except per share data)
(Unaudited)

   
Three Months Ended June 30,
   
Nine Months Ended June 30,
 
   
2022
   
2021
   
2022
   
2021
 
Revenues
                 
New boat
 
$
376,886
   
$
288,222
   
$
903,104
   
$
679,704
 
Pre-owned boat
   
98,181
     
71,116
     
227,484
     
165,778
 
Finance & insurance income
   
18,979
     
15,238
     
43,234
     
32,990
 
Service, parts & other
   
74,854
     
29,631
     
173,477
     
69,429
 
Total revenues
   
568,900
     
404,207
     
1,347,299
     
947,901
 
                                 
Cost of sales (exclusive of depreciation and amortization shown separately below)
                               
New boat
   
274,544
     
211,141
     
659,046
     
520,820
 
Pre-owned boat
   
68,749
     
52,566
     
164,078
     
125,566
 
Service, parts & other
   
41,668
     
13,548
     
96,729
     
33,341
 
Total cost of sales
   
384,961
     
277,255
     
919,853
     
679,727
 
                                 
Selling, general and administrative expenses
   
87,867
     
60,476
     
222,455
     
143,685
 
Depreciation and amortization
   
4,073
     
1,475
     
10,549
     
3,816
 
Transaction costs
   
1,337
     
65
     
5,158
     
633
 
Change in fair value of contingent consideration
   
3,118
     
-
     
11,022
     
377
 
Income from operations
   
87,544
     
64,936
     
178,262
     
119,663
 
                                 
Other expense (income)
                               
Interest expense – floor plan
   
1,131
     
956
     
3,056
     
2,206
 
Interest expense – other
   
3,311
     
1,083
     
7,937
     
3,222
 
Other (income) expense, net
   
(166
)
   
(158
)
   
491
     
(247
)
Total other expense, net
   
4,276
     
1,881
     
11,484
     
5,181
 
Income before income tax expense
   
83,268
     
63,055
     
166,778
     
114,482
 
Income tax expense
   
18,785
     
11,498
     
36,455
     
20,559
 
Net income
   
64,483
     
51,557
     
130,323
     
93,923
 
Less: Net income attributable to non-controlling interests
   
(959
)
   
-
     
(1,970
)
   
-
 
Less: Net income attributable to non-controlling interests of One Water Marine Holdings, LLC
   
(7,547
)
   
(17,054
)
   
(16,060
)
   
(31,158
)
Net income attributable to OneWater Marine Inc.
 
$
55,977
   
$
34,503
   
$
112,293
   
$
62,765
 
                                 
Earnings per share of Class A common stock – basic
 
$
3.96
   
$
3.14
   
$
8.14
   
$
5.77
 
Earnings per share of Class A common stock – diluted
 
$
3.86
   
$
3.04
   
$
7.90
   
$
5.63
 
                                 
Basic weighted-average shares of Class A common stock outstanding
   
14,133
     
10,976
     
13,791
     
10,884
 
Diluted weighted-average shares of Class A common stock outstanding
   
14,512
     
11,341
     
14,205
     
11,143
 


ONEWATER MARINE INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
($ in thousands, except par value and share data)
(Unaudited)
 
   
June 30,
2022
   
June 30,
2021
 
Cash
 
$
95,690
   
$
113,249
 
Restricted cash
   
16,209
     
7,437
 
Accounts receivable, net
   
80,495
     
37,748
 
Inventories, net
   
269,430
     
116,873
 
Prepaid expenses and other current assets
   
57,389
     
32,311
 
Total current assets
   
519,213
     
307,618
 
                 
Property and equipment, net
   
80,235
     
66,206
 
Operating lease right-of-use assets
   
126,433
     
82,992
 
                 
Other assets:
               
Deposits
   
823
     
504
 
Deferred tax assets
   
32,585
     
18,620
 
Identifiable intangible assets, net
   
245,659
     
74,004
 
Goodwill
   
342,605
     
151,564
 
Total other assets
   
621,672
     
244,692
 
Total assets
 
$
1,347,553
   
$
701,508
 
                 
Accounts payable
 
$
51,199
   
$
24,909
 
Other payables and accrued expenses
   
54,725
     
55,688
 
Customer deposits
   
65,520
     
43,114
 
Notes payable – floor plan
   
217,338
     
108,160
 
Current operating lease liabilities
   
12,788
     
8,253
 
Current portion of long-term debt
   
19,450
     
11,858
 
Current portion of tax receivable agreement liability
   
915
     
482
 
Total current liabilities
   
421,935
     
252,464
 
                 
Other long-term liabilities
   
25,766
     
6,904
 
Tax receivable agreement liability, net of current portion
   
45,290
     
25,594
 
Noncurrent operating lease liabilities
   
114,545
     
75,184
 
Long-term debt, net of current portion and unamortized debt issuance costs
   
316,349
     
103,885
 
Total liabilities
   
923,885
     
464,031
 
                 
Preferred stock, $0.01 par value, 1,000,000 shares authorized, none issued and outstanding as of June 30, 2022 and June 30, 2021
   
-
     
-
 
Class A common stock, $0.01 par value, 40,000,000 shares authorized, 14,133,130 shares issued and outstanding as of June 30, 2022 and 11,661,575 shares issued and outstanding as of June 30, 2021
   
141
     
117
 
Class B common stock, $0.01 par value, 10,000,000 shares authorized, 1,429,940 shares issued and outstanding as of June 30, 2022 and 3,377,449 shares issued and outstanding as of June 30, 2021
   
14
     
34
 
Additional paid-in capital
   
178,347
     
123,643
 
Retained earnings
   
186,536
     
60,029
 
Total stockholders’ equity attributable to OneWater Marine Inc
   
365,038
     
183,823
 
Equity attributable to non-controlling interests
   
58,630
     
53,654
 
Total stockholders’ equity
   
423,668
     
237,477
 
Total liabilities and stockholders’ equity
 
$
1,347,553
   
$
701,508
 


ONEWATER MARINE INC.
Reconciliation of Non-GAAP Financial Measures
(amounts in thousands, except per share data)
(Unaudited)
 
   
Three months ended
June 30,
   
Trailing twelve
months ended
June 30,
 
Description
 
2022
   
2021
   
2022
 
Net income
 
$
64,483
   
$
51,557
   
$
152,813
 
Interest expense – other
   
3,311
     
1,083
     
9,059
 
Income tax expense
   
18,785
     
11,498
     
41,698
 
Depreciation and amortization
   
4,274
     
1,475
     
12,409
 
Change in fair value of contingent consideration
   
3,118
     
-
     
13,894
 
Loss on extinguishment of debt
   
-
     
-
     
-
 
Transaction costs
   
1,337
     
65
     
5,394
 
Other (income) expense, net
   
(166
)
   
(158
)
   
490
 
Adjusted EBITDA
 
$
95,142
   
$
65,520
   
$
235,757
 
                         
Long-term debt (including current portion)
                 
$
335,799
 
Less: Cash
                   
(95,690
)
Adjusted long-term debt
                 
$
240,109
 
                         
Adjusted net debt leverage ratio
                   
1.0x
 

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 96 retail locations, 10 distribution centers/warehouses and multiple online marketplaces in 19 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 nonGAAP 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.


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 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

We defined adjusted long-term net debt as long-term debt (including current portion) less cash. We consider, and we believe certain investors and analysts consider, adjusted long-term net debt, as well as adjusted long-term net debt divided by trailing twelve-month Adjusted EBITDA, to be an indicator of our financial leverage.

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.

Cautionary Statement Concerning Forward-Looking Statements

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.
 

Important factors, some of which are beyond our control, that could cause actual results to differ materially from our historical results or those expressed or implied by these forward-looking statements include the following: effects of industry wide supply chain challenges and our ability to maintain adequate inventory, changes in demand for our products and services, the seasonality and volatility of the boat industry, our acquisition and business strategies, the inability to comply with the financial and other covenants and metrics in our credit facilities, cash flow and access to capital, effects of the COVID-19 pandemic and related governmental actions or restrictions on the Company’s business, risks related to the ability to realize the anticipated benefits of any proposed acquisitions, including the risk that proposed acquisitions will not be integrated successfully, the timing of development expenditures, and other risks. More information on these risks and other potential factors that could affect our financial results is included in our filings with the Securities and Exchange Commission, including in the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of our Annual Report on Form 10-K for the fiscal year ended September 30, 2021 and in our subsequently filed Quarterly Reports on Form 10-Q, each of which is on file with the SEC and available from OneWater Marine’s website at www.onewatermarine.com under the “Investors” tab, and in other documents OneWater Marine files with the SEC. Any forward-looking statement speaks only as of the date as of which such statement is made, and, except as required by law, we undertake no obligation to update or revise publicly any forward-looking statements, whether because of new information, future events, or otherwise.
 
Investor or Media Contact:
Jack Ezzell
Chief Financial Officer
IR@OneWaterMarine.com