OneWater Marine (ONEW) 14 Nov 242024 Q4 Earnings call transcript

Good day, and welcome to the OneWater Marine Fiscal Fourth Quarter and Full Year 2024 Conference Call. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Jack Ezzell, Chief Financial Officer. Please go ahead.

Good morning, and welcome to OneWater Marine’s fiscal Q4 and full year 2024 earnings conference call. I am joined on the call today by Austin Singleton, Chief Executive Officer; and Anthony Aisquith, President and Chief Operating Officer.

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

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

Hurricane followed and the This Hurricane year our our communities. October, Coast team, disruption Thanks, early late Tragically, our Jack, everyone for damage Helene of challenging West extensive by and has industry, been today's struck you, Florida. across in joining September, past thank Milton causing for and call. in

are with remain and storms. Most affected only safe that prayers most teams our importantly, I’m and minor the our damage. of pleased sustained to report stores thoughts by Our those

the resilience to team's few been during incredibly locations are communities these operational. and retail and hardships, has while have of customers docks the under support still remarkable. times. today, dedication fully our of Despite our reopened and communities a within the As difficult are I'm repair, all these proud

expect, Hurricane from our you Helene As significantly fourth disruption quarter would impacted results. the

disclosed previously insurance temporarily several September, on imposed preparation writing a for closed and in stores in release storm we our late the As companies new press in as moratorium policies.

disrupted As us. sales a selling result, for were typically a during period strong

are rebuild when pricing reset prepared claims of sales insurance number the closed year the they is as October, them when norms. it predict for and While deliver. Customers difficult ready. to in marine their serve starting are challenging This are demand teams settle and were remaining historical sales our industry past and to lives to will the to was

revenue, Our expense focused We our model and our team's disciplined operational geographic operating these and keeping strong on with brand mitigate remain current execution challenges. line us in with helped diversity along management demand.

As service executed a in serve and the fourth consolidating to further parts facilities customers. saving our brands cost more efficiently rationalizing including and certain result, additional measures we quarter,

implemented similar results, for year restructuring coming the already period. fourth in the in in earlier in to to are We our expenses actions SG&A expect benefit the these prior we Although, We yielding see this margins year. XXXX. the in reflected positions impact lower that year us believe compared quarter, actions as success

the sales Same-store full broader reflecting marine down results. were within year to Turning X%, market. recreational softer demand

of Hurricane that of only worth Helene. target, our August, fell down noting our expectations sales before through the it's this slightly were impact aligning short with While X%, same-store

are in selling with inventory plan rates align remain executing the right on as and our well-positioned progress head and made with parts we the were proud service tracking with in also and we've direction. I higher current segment we inventory am our the environment, year XXXX the throughout negatively into strategy, Distribution demand. retail to for other our manufacturers. With sales impacted managing inventory by focused production floor we Our lower on interest

active. Turning capital but continue and to with M&A. remains years, We a transactions were relatively quiet attractive Opportunistic outlay in to to compared be XXXX minimal [indiscernible]. pipeline the as prior

market We are also disciplined pursuing actively targets our while monitoring objectives. that the supporting and criteria, financial our meet strategic

what us weather. As of we and have environment. offering look This complex enabled challenges geographic our the streams, remains uncertainty has year, and back diverse revenue reach to operating adverse on macroeconomic the strategic us brand helped some from navigate a offset

we we into XXXX. cautious, optimistic hold While move as an view

and March expense strategically Anthony and rate As cost reduction are shortly, September on and our carrying from our cuts optimization working. active inventory our we reduce interest and interest inventory are costs. have managing and will touch overall efforts is helped the customer Recent

into While tailwinds not future to interest the additional guidance, I it cuts rate should business our business. With our that, will embedded Anthony discuss operations. to provide over to turn

demand The Austin. in line of increasingly the with Thanks, sales started pace month August. for June quarter with slightly the in

Helene September will the first to Hurricane on September Coast impacted October Hurricane customers as have was disruptions effect an and and due for by However, sales to West half year These impacted rebuild. challenged further Milton. of Florida the continue of was the for

are voting and We to with election record customer the in time. year. sustained strong at despite economy the prior Fort for overall activity uncertainty pleased appetite the boat report a compared sales Lauderdale the unit up highlights a to show The double-digits

unveiled to manufacturer Our a partners new the XXXX of and excitement demand. variety adding driving models,

sales has to regardless out the been customer, brand right manufacturers ensuring across theme offering for a have Promotional advantage, industry inventory and robust, aged boat competitive levels been portfolio common activity we every significant the clean the their year. have location. this remains with inventory. Elevated of support diverse drive Our consistently

of seasonal typically in fourth as a the increase inventory we quarter part Although, build.

our inventory slightly Our was sequentially to due down optimization efforts.

strategy XX% redefine expect we our As year. to decrease inventory we another phase brands, product certain next out and

composition, XXXX with mix models. the comfortable current XXXXs our inventory Regarding we of are and

a slower replaced than year. pace have We being at model reduced year orders are XXXX our for prior and

Customers financed remained the detail. strong insurance OneWater. And over finance I'll within target to improving environment, financials Our boats even interest appreciated more slightly the a so options lower them, range. should economics the make in rate cut go the that, future our over rate more through attractive and to penetration to Jack call any while well have and with of also turn financing

Anthony. Thanks,

fourth revenues. our were million XXXX. quarter Hurricane revenue XX% million closure mentioned, impacted the by from $XXX insurance As XXXX fourth results to and directly to $XXX Helene. in in our The decreased quarter prior markets affected stores of storm Fiscal

boat XX% down the to this quarter from New share service on fourth totaled million from million. X% was and the general to as of in diluted sales loss percentage by share million to the per million of boat up sales. $XX $XX costs and $XX decreased expectations. Fourth XXXX and share. million was our administrative other $XX personnel fourth decreased $XX the compared for expense Distribution dealership of Driving in sales selling, On for to million. Revenue increases the quarter, sales were quarter fiscal in the SG&A a X% insurance million. $XXX but to XX% segment, was were fiscal reduction pre-owned ‘XX, and an our quarter, fourth $XX while fourth $XX which XX% per increased sales reduction in management revenue adjusted quarter Helene. points decreased $X.XX million and million. of decreased or expenses the the total included share and higher net was slightly within margins of the compared are with our gross Finance Hurricane percentage declined, impact XX% per SG&A million profit income quarter partially margins to segment. parts in we margin $X on gross profit was and to XXXX. the to adjusted adjusted $X.XX return XXX a loss was charges diluted June of brands compared on $XX charges absent and line cost was a or as Sequentially, lower of sales, per decreased cost sales. Gross of diluted these amounts In boat to sales. from of with but in on was XXXX, fiscal boat $X.XX. $XXX in driven actions to XX%, in earnings cost This down a restructuring was dollar affected by Net $XXX previous ongoing due quarter and diluted a exiting, $X million sales, basis profit EBITDA restructuring Again, pre-COVID basis, by lower $XXX million million to to offset compared loss million sales the quarter. Operating $X.XX significantly loss a lower

by a decreased Turning to related the driven sold pre-owned. results. Same-store retail compared million closures. and units for XXXX, environment to a X% to in the X% fiscal $X.X XXXX decrease and for sales Total impacted new year, was revenue in which prior both by weather decreased softer QX

to profit segment, million, partially as expand by and Full XXXX, and from driven in $XXX XX.X%. Selling, customers. as fiscal a distribution service in XX% XX% general $XXX for XXXX up million and offset increases expenses this or gross was in which revenue XXXX. lower other our administrative as or selling, decreased $XXX Additionally, our by revenues. XX.X% sales XXXX dealership in fiscal administrative fiscal service segment, and part XXXX by year-over-year expenses million to a important The XX.X% parts revenue fiscal business we our result of for was of sales lower our revenue decreased from decreased driven to of was year revenue of of changing million general from $XXX profit percentage dynamics, margin market increase gross and

cost reduction SG&A made and we variable to moderate cost actions cost basis. in September our actions a structure SG&A. lower overall support our However, continue dollar will and The targeted on March

a management arise. Full due XXXX. actions flexibility million for during to a for to earnings to of or adjusted share related $X.XX the prior compared EBITDA assets per The Net to million as operating income cost generated $XX fourth per fiscal of $X.XX continue compared share compared adjusted certain prior fiscal to loss and net year intangible should the expense to will non-cash necessary accelerate impairment XXXX of the operating $X primarily $X.XX share the $XX XXXX million, in million the $X.XX $XX charge year We per diluted share and need to have year XXXX. or grew $XX proactive diluted loss to quarter year. diluted share year business the income practice per in per million of diluted was of XXXX

was to the $XX million to availability inventory additional XXXX. on XX, XXXX, million including $XXX on was sheet. million now credit $XXX Total facilities. balance our million compared and under XXXX cash September total XX, On Turning June liquidity XX, of $XX September

a in as trailing XX further XX, the from inventory Florida an benefit leverage will times We hurricane net reduce our EBITDA. reduction. Total brand rationalizations, was X.X in are debt The $XXX million incremental Coast XXXX our leverage we our we business resulting of expect execute in our higher on on have and back mix but long-term net current as September with the our aging the expectation, pushed comfortable leverage impacts of month as adjusted XXXX. than of of half West recovers, we

we Helene through ahead to and Hurricane seasonal $X.XX with sales as the as are the Milton with the billion we in same-store Looking in softer to first demand sales We of total be quarter. to XXXX, cautiously cycles. low-single fluctuate a in of start up billion expect the digits, traditional impacts noting range work anticipate we the year and to optimistic $X.X

to and changing adjusted to as adapt the optimizing inventory and adjusted to be $X million focus in $XXX market costs, EBITDA the conclude, on be $XX range the range we we to $X. To million share continue in expect We earnings of our dynamics. levels per of to debt to

have please prepared taken to XXXX actions we and concludes will look XXXX. This open our While the for success Operator, questions? forward OneWater challenging you was line position to a year, remarks.

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

Good morning. guys. Hey, Thanks.

if First us, you could impact guess, EBITDA for question from for Helene? what the and you, on quantify Jack. quarter revenue was in the I

But was range. we're The It's a of Joe. plus from little tough a in out time to one over it time, on. number estimating specific $XX million really it's quarter Yeah. period that probably Thanks, week's a very a end. actually get

open were it, deals on some markets we insurance to able right of impacted. Coast up had of Florida, Some which like on the get XX. wasn't East We some

in So but it's real range. it, I'll fluid, that all somewhere call that,

guidance thinking the Milton, And Helene quarter in assume in then, how of maybe your terms And lost for over the any helpful. you're those help first of you expectation recoup sales understand Okay, and of us about the EBITDA? the of balance that does year? terms

would next there's some out. a It's Florida. difficult to see up of know, expect further rebound half will Yeah. some back expectation significantly. going cars, be for that don't the businesses next our when fourth you recovery right, will us hurricane, unfortunately I overcome it's But 'XX list. see be that homes, quarter just from expectations of exactly West and is do Joe, to to having just customers think are day. Many very and as people Coast a to -- comp see But how play the Obviously, the the the to down you have the boat replace easy

take months it to XX boat. Sometimes they're can purchase before ready the

some So hurricane think certain market back after results. ever the had event, monitoring coming mixed you will and a six-month spike active. But really from customers we're expect post don't period, but West do big in we we've be a Coast, the

Clearwater me, XX span Tampa in down Fort tracking there. are others. stores let's that and better it, about But to excuse Some we Myers store, call stores that, have XX than

number stores a impacted So the in of area.

question with Baird. Kennison next the Craig from comes And

good to positive. point ask is my the of you view question. taking on whether to to Lauderdale predict, boat the mentioned difficult Show, you your which Austin, the state We've love it's give got environment Thanks Fort for I'd Hey, morning. of just consumer.

assume got boat somewhat that consumer. information then And that digest outlook? I how trends all industry? You've negative the of is you and other you've election do result, to got boat in of unpack a the a provide the But friendly are that towards lot which

because I'll it It seemed a days, that was but Anthony know, mean, rephrase, jump expecting. We was that's the pretty great, the And look like he docks of kind a was were it was the good different. don't I that wasn't the were Lauderdale at if like, on mean, let breath better one. it on of month. kind Yeah. was great dadgum I couple the just a the if Like, just but mean, on of me bit, and unknown over, was tough because a to continue weather was this show. -- of I we in fresh too [ a you relief lot Lauderdale, I But let first air. good pretty ] was a election a expecting than it -- was October it of there

just Now, you last comment on mean, September, to just felt and of what we make was we've from to Anthony, it that you want pull -- just hard just different. in -- some jump the the in but I forward it's just nine but and vibe the a felt was months. it than explain, that? tone completely different seen

boat very of so and it the usually business was moved personally. accordingly older where a didn't customers. also was waiting of something. to aggressively. inventory, lot it They a were it a pretty the feels rate We Yeah. conversations negative have the of boats created they interest lot stir Everybody lot for and were We -- didn't felt have some back and conversations where priced with me positive to good

lot you you if more pushback sensitive And on rates. it on just customer sensitive that's and consumer be that, have on seeing didn't do rate a you how a get Were so, might interest the not sounds of follow-up thinking? just any rates? to like And to comment affluent

one we of have work of we from I it's a to really is, want do that the those we years. to penetration range that I still fluency look and we're standpoint. perspective, in kind think financing our continues of hard a increase years, work -- this in mean, from just when staying last just hard and for of really what we've seen customer you it five our and seven the things at that

the mean, margin. more XX But getting ago. definitely just it yeah, than was Now to because of people its customer exciting is is got more lot just churn. to it I affluent the a to and that we which years spread access water increases water,

as industry for a good to the overloaded a thing scarcity a forward. by move more the So that's access churn is of fluency water we

Drew next And with the Crum comes Stifel. from question

guys. Hey, morning. Thanks. Good Okay.

or same-store quarter, the follow-up. other it And So you loss? any in there simply appeared I contributed to are industry. Florida then geographic lag think the the the share it concentration have a sales on your to factors for Is

-- Yeah, XXX%, kind stores many Gulf have we I of think Coast. it on was so the that

think I we than when in, was that think slightly you industry I the factor the so that we worse XX%. the And participate in were XX%, other, segments around

were storm to stores Keys Because obviously, mode. certainly that we the Gulf the all when brewing coastal worse in every So a we Florida store couple of Gulf, points a on right? But from of Orange much those heavier in that than was concentration Beach, that. Coast, preparation Alabama, had have

so And of water, our boats water, out retail doing service out work. hatches. down department of the down. We're not We're customer right getting shut the battening boats the the

weighted that over a So little probably I bit. think

Got it.

then Okay. can of that, and flexibility around be at kind 'XX leverage expect Thanks, got times, you of end? pipeline a Thanks, forma you I guys. your mentioned fiscal guess Austin. pro what with I you've you think M&A And uses do approaching X specifically, full year to And cash? have you where entering address

Yeah. to No, it's I think we acquisitions. at look continue

be a of a And deals before they're minimal Some been done prices. deals last There's are of couple such. their to of we've where earnings. think kind And going capital in pipe with that have realistic also larger of the they're normalization some them outlay. that they number to anniversary process still I there's going them of through purchase have

of our all forward. forward business reducing alignment take of the took our that at. the brand where and we of simplify go debt things number helps reducing we're towards and to cost conscious profitability business, actions the that of as we strengthen brands, We're increase that the working we're we with So and with driving

Wolfe Wightman question from comes with Research. Fred the next And

morning. just hoping Good some was us guys. particularly you a it expectations, to little margins. comes gross out bit segment the with Hey, level I help of could when

of are promo where You boats to pre-COVID the from new perspective, mentioned back but market. lot a sort that in of they there's also were a

up, of you do So fiscal expect sort think should think be down, 'XX, we about that as that? How you about sideways?

into get dated Let will of me on aggressive should you or is, and sort of the some boats season, how little be to those overall Jack. going and and overall because us. we to can cautiously the be we and the Is that get down see margin, XXXX. is till margin get as to bit backfilled dated go be get interest margin optimistic there's you this comes see -- some got field of into I'm relief half? point? the be April, when as the gross it going point? we to but an flushing how inventory just still think the don't of to get May it still at look everybody I What rid margin you into gut straight deals still in, from with it, industry out a it half field determined, a flushing inventory. of inventory you interesting But upside. Is a have out help that I'm or away to till to old jump some inventory Is be a a move reduction point That's a of on dollars those fast a promo not you I paying this boat, in through new

just payoffs all up, we like closer, time closer. like and along some keep through some better better that it's to [indiscernible] only other in months like do not this but just and continue just And it getting with and system. three feels running to than also I Boat these a while trends, flush getting it's stuff. we're that, nation every to dealers, week but than was we calls quicksand. of But -- see from And we're little this for through to yesterday, today across we good the we increased was takes positive got month and chugging are. It they've inventory bump just expecting I'm So the with Show think it like the Lauderdale talked I've to seen it's It got the ago. earlier

So and into be the just year. direction, back a the see we margin seem and that. in of right of to should and easier little to half need going doing next lighter kind We bit of bump keep move things we as

because a new to had seem get things, little cost point change those percent same I'll that you hit XX%, When there's boats. and back in we XX%. consolidated in out down restructuring Fred. number we ticked right warehouses some and charges, out then will two that thing new to there some XX%. boat it charges But parts, ongoing service that other, the restructuring of restructuring be right? boat on And new on of below down some below and XX% We So sales, charges some back plants, an basis, we brought down bit. above tick just some charges

well. that expect We as

think we I pressure we're But we as some brands margin of ‘XX the exiting, that quarter we're that on. little bit some product also some we have full of there. look margin exciting see getting into these could with first

it be balance. So a will

in And that in help is that expected heading sort think sense. will what all then I the remind I benefits makes next of just did us just know That or of we for into there then an the action back us the cost that? you tailwind with on saves, were is as XX%. Okay. benefit the and sort all some year, actions think But September what you about too. into from in guys March SG&A

been We in actually sales trim interesting. increasing We've some months. seen unit cases It's many wanted Yeah. in recent costs. to

having we're keep support staffing of have want make our to we So to of, customers. kind balance this to we adequate sure to keep

made at will we so into year, in. $X cuts. that baked that now was dollars bake took then, the around of March about And we've is so, in The cut million, $XX half million some 'XX end And the about another of

with next question from Truist Securities. the Swartz comes Michael And

down the drill sense ‘XX Maybe industry little the more little comparable Give growth sales us etc.? to your share fiscal gains, a guys. digit there? and on for store just embedding of a drivers year are low-single your you guidance, expectation. your benefit What's any from the Hey, morning. pricing, outlook Good bit during

embedding gain. Yeah. definitely I share some would say, we're

will digit we're negative. low-single I the industry think outpace we digit low-single positive, If industry. probably the is

a some -- that sales uncertainty how think think same-store us I to there's on particular guide and it's for in impact Coast Florida, and the that rebounds well. respect I as exactly quickly West with is the of what

As some well as exiting brands have we that we're pushing out.

We the have will out this some we that did store closures come of year. earlier base that

a year. on And so it's noisy, are but little positive we the

helping Okay. Consolidating satellite quick mother to all that. Jack? our that It's like that's of real have with down closing We cheap It's convenient really from was satellite we back just lease. ship anything has lose off XX personnel like We’re a and it's stuff need spoken is It mean, that clarify Hang away got the just Jack, costs miles that make closings. on. or any business. substance we of major hub not locations. because any it. sense. it store do that won't a and not to one stores really the us I just doesn't

closing didn't like that right. we're So stores. I sound to it's want don't not that

But sounds on Austin. the did it? trying a get noise, and fiscal Okay. of like EBITDA how obviously of negative Thanks back get quarter. just to quarter, for you finer put business it mean, the of lot there's maybe out quarter? you the disruption And should a to to be of point in a sense I'm fourth first that model a we I expect some maybe would clarification, then shifted lot just first the

me surprise negative. if it It was wouldn't slightly

guys. Okay. Wonderful. Thanks,

Coast, with combined these think brands just XXXXs I hard clearing exiting then West we're out with to and of on it's of you kind XXXX. and actions see and of model the calendar year some aggressive Yes. unknown the some

perspective well. when I look quarter, the December a as just as tends lower gross slightly you quarter from at it a think right seasonality when to typically, be as well margin

And next Markets. comes KeyBanc Zatzkin the Noah Capital from question with

Hi, taking thanks question. for my

of Just there wondering of any Thanks. the any kind market, you're seeing trends ‘XX? thinking thoughts of you kind if around state could how give the and you're about pre-owned

We say, the enough I the today. mean, ever as that's times changed would steady thing I market. And always to use as is pre-owned only seem about of that that's or many could doesn't them. X industry case the only we Yeah. the out change thing there There's have. really pretty not still

that it's a just that's lack of it's part important our available. it and to and we put a a we and something of business emphasis So our tougher inventory lot of part on on it's continue -- business just an of focus the of because that's

Thank you.

That is Thank has concluded. you session. now our today's the end question-and-answer The of attending conference for presentation.

now You disconnect. may