ONEW - Earnings call transcript Q2 2024

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Operator

Good day, and welcome to the OneWater Marine Inc., Second Quarter 2024 Earnings Conference Call. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Mr. Jack Ezzell, Chief Financial Officer. to over and you, you. Thank Mr. Ezzell, please. Mr. Ezzell?

Jack Ezzell

and and Second Fiscal morning, call by Executive OneWater Operating and joined Marine's XXXX Earnings today Officer; Chief Singleton, to Quarter Austin Aisquith, Conference Officer. the President Chief Good on welcome Anthony Call. am I

uncertainties.As a cautions occur the by those which number to OneWater filings from events events will company are with be in of results its forward-looking begin, future to found affect the undertaking obligation SEC.The to update made which the a the a or Marine and number and discussed the you materially that risks Investor operations forward-looking control, are result, be would in I'd circumstances can are forward-looking considered might And earnings and a described that section in of under statements could to certain with company's opening that, statements call disclaims I required by of after except who morning's that results the company law. differ securities involve this with date there or Relations like the in we remarks. to Austin? remind release, turn are cause the actual its any in Austin which website factors, Before the company's reflect Singleton, made, over the as few forward-looking that and many begin conference company's statements to law Factors beyond you of like statements. statements management call regarding may

Philip Singleton

for everyone, and thank Thanks, joining today's you, call. Jack,

at in of line Our year. start second the the quarter with our were expectations results

the cycles, were industry of anticipated, to return stabilize X.X% As and seasonality. normalized more towards the as we demand same-store environment see sales historical considering the down continue

grow second as which with where typical will our for we peaking more line continued increasingly to Thus, penetration finance through is build trends.Year-to-date, However, market expected and with outperformed and first in have year indicates fluctuating dynamics OneWater normalized patterns Sales in from we sell we headed the continue holding, market industry. competitive are quarter and continue we a moderate, we and half today, largely March.From was seasonality down quarter environment. industry, sentiment year through an and the customer stand standards. into boats the an selling seasonal we first pricing, the all Pricing the buying data more significantly experienced in of XX% in to which solid share. the consumer carried typical historical we believe insurance near towards February, inventory

summer levels coming the build in year with preparation reminder, for a the model inventory winter the volumes From boats. summer expect months, there, to through next appropriate work to during the selling ] we we As inventory down season.Through ramp, boat winter months. [ historically and shows an starting the level

our is business with we we the metrics, reinforcing in of and strength seasonal where As business the pre-COVID are model. tracking yearly with this cycle, performance our line durability in assess

our us the and allowed solid As focus year, first and expense half higher variable manage structure reset on cost have to we baseline better our of align what expenses of we strategic through with prudently the we management. integration saw have had our the than continue We our significantly said we a our ongoing market to to we acquisitions strong before, pre-COVID, XXXX expect since normalizes, result, with SG&A grown business playbook.As demand. as though a execution industry

year. in went reduce expect the but proactively take the see found the we effect to in quarter, action further we it given actions costs.These degree of prudent in uncertainty of into However, results the to the late back to half marketplace,

are flexibility have in it, remain our previously retail optimistic we we Accordingly, activity. expense for and guidance. adjust We our we need changes cautiously to and structure continue additional maintaining to monitor issued should

Garden for Turning announced State to location. we Yacht press Stone M&A, complements acquisition presence we the Sales, in low-cost parts The through deal the our market bolsters monitor marina opportunities the the continue and have a yesterday's facility. of objectives.As service growth support our that transaction premium active, that remains sales, pipeline in low-risk, release, U.S. Mid-Atlantic our acquisition and closed and to on a Harbor

are and trajectory we proven year, on acquisition.As the our believe this business. strong work the the we We potential move half integration playbook are our we through right excited for of of upside capitalize to on back put to the

While we With over that, we business it cycles. through confident track I continue navigating economic OneWater's extend of to to monitor I'm turn discuss will operations. to various Anthony various record will macroeconomic successfully headwinds,

Anthony Aisquith

Austin. Thanks,

confident into continue move start environment patterns February, promotional holding selling The season. in as the position to We a buying on see is pace, and following good the are year. fiscal the with we inventory our in of peaking summer we steady

the offerings and during larger it. be holding Credit typical healthy With Demand mix continues stabilizing. the months. that winter is of I using and our pre-owned appear sales to and be boat remains as for seasonality, line insurance boat in return are expected. are available seen customers to finance well, and sales am new the pleased up with

penetration north have customers. mentioned boat finance targeted of of historically new XX% we we As before, have

move above continue out impact and of factoring tracking last still this parts and in environment.Our well, businesses are range, operating giving to the us sales other we of service the confidence We forward this do businesses disposed as year. we

up. other and Our segment, dealership parts are service sales

to have by inventory for who throughout continues segment XXXX manufacturers response challenged sales industry. excess lower distribution the in production dealer reduced to boat to Our be

of encouraged lifestyle wave installed has last year.For this to embraced results the the of long we the a pressure boaters large the to continue boating expect for remainder new We our are several base as over the term, by years.

and ] expanded for breadth come. of all a offerings, [ of I'll look customers providing April needs. we're is were our financials their this benefit sell we we so positive, consumer forward to Leveraging the And same-store for the good to for over from years tailwind expect off to the detail. many to We the COVID era go we holding sales to boats. with Jack solutions products to and is and turn what that, traffic start call to more in best do do over quarter. solid, tight, to The our continue

Jack Ezzell

from Thanks, quarter. Anthony. revenue XXXX year Fiscal decreased $XXX in prior second million the to in X% quarter million $XXX

expected decline more split New Revenue X% and of in service million pleased boat between seasonality new from quarter and year units boat year. return readily were to compared inventory both for to the a the The we XX% million. fiscal pre-owned X% comparable $XX up was an the fact from in increase XXXX, down in as we the are same-store million to while were prior saw price, to parts in $XXX quarter.While increased of to boat decrease other sales second that and available. decreased the strong sales sales the becomes pre-owned against see due quarter $XX the sales we sales prior sales boat to sales

sold. up. reduced with to driven dealership in and manufacturer boat distribution to but decreased Center percentage year, in the to insurance disposal total segment the Gross Excluding from $XX occurred were sales The XX% second in parts profit and year Roscioli production.Finance were the as million revenue quarter, quarter segment normalization and other which Marine, sales boats on in Yachting XXXX, prior prior of compared was X% second gross service fourth of service by due the parts in million to other and million line the boat $XXX the Lookout impact of the a sales. the decreased $XXX continued of the quarter margins lower

to million sales.As part to abandoning sales a and percentage quarter points prior on on from $XX IT XXXX certain expenses are sales Administrative actions mentioned, operating improving a These our Austin reduction the Selling, took discontinuing management no Second of XX.X%, reduce as costs in retail longer million. that up we the focus leverage. ongoing $XX year considered locations, from count, strategic. of as lower XX decreased our quarter our certain head projects during satellite included closing brands General was actions and basis of expense and SG&A

we While to the flexibility prior the million further, and year which period, decreased in impacted nature, aforementioned to need restructuring were with impairment in have these should arise.Operating $XX flex the was our a cost costs income proactive by from the initiatives $XX actions. associated charge million

separate During the in significantly approximately recorded impact to operations. tornado expenses million X EFX of that events impacted due we quarter, our the other $X

the the by Our path Ohio of Beach communities location are has outside Point, rallied was be tornado ready to upcoming was for together selling tornado.The team the the a Russell's rebuilding directly with the just City season. in impacted location and Panama and

share for prior to million the million quarter income year compared excess of $X.XX, XXXX, diluted year. adjusted our the $X credit to our diluted March in XXXX, of EBITDA million Net at the gross the to diluted or For XXXX.Turning On cash per million in compared The $XX $X.XX liquidity fiscal net was period. was earnings the loss to $XX availability inventory primarily $XX balance share In $XX to under sheet. quarter. the to prior quarter, EBITDA per $XXX $XX million in quarter. due second share of profit per $XXX XX, at share the December of second the $X.XX lower compared including million, decline earnings compared in million was adjusted total per fiscal adjusted in in and adjusted additional was XX, or $X.XX facilities. quarter, diluted totaled million March now was Total

position with down are remainder year. continue levels of to the We our fiscal working the expect comfortable and inventory throughout inventory our

our our fiscal guidance. are to Now outlook, turning maintaining we XXXX

optimistic We stabilization are have pricing a we of around margins. demand environment and cautiously feel level about reached and the

to of outside end seasonal us the could ranges. push However, lower fluctuations of trends our

We are earnings are to the the and progress be our we digits, and to EBITDA in we be up, a objectives. have to million in per pleased to share To sales conclude, range mid-single adjusted diluted made we range with expect still the low a adjusted strategic $XXX $X.XX. to same-store of towards million $XXX $X.XX be to of anticipating

to sticking please you our our are remarks. the OneWater for We This positioning questions? any concludes in would environment. for prepared Operator, success open proven line playbook in

Operator

you. Thank

momentarily pause time, will session. [Operator take Crum to We will a from We'll now assemble the roster. begin question this with our Stifel. At Instructions] we Drew question-and-answer

Andrew Crum

for reported in would I anticipate second And that's out down versus only the bps assuming further wonder on comment XX.X% what correct, this drivers? you margin. was quarter the we XX XQ. Should your half? could if be in expectations the gross leveling

Jack Ezzell

Yes, right, think Drew. I that's

margins plan feel we think they on -- boat I seeing stabilizing. they're like

trades. less ever slightly bit mix fluctuated sales were than brokerage just and quarter, so the boat little pre-owned with last in between New consignment a

margins. our drives largely that think I so And

So, we as I to of range. that in them we'll expect move kind mid-XX% think forward, see

Andrew Crum

then Yacht your Austin, the more mentioned to to company? in the of for updated And Garden thoughts appetite seeing State the your valuations? sense in what a do terms you Sales us And acquisition. M&A What just you in are are this preamble, your close is deals give of as concerning environment? What

Philip Singleton

get sort to what of cadence out things X deals. the a we're just of to new we're kind months there. got then COVID over about margins has normal? as and we time We've during stabilized. been And back seem -- going this doing to probably similar at, of to have concerned lot XX had that back some that's the It's at? stabilize looking we margins get or last Margins to What's -- the pre-COVID have stuff the to inventory where been have glut were

And want so of everything we to be. kind that where it gets

we also to for still challenges really that, The standpoint, and perspective, got we're out that they've that manufacturers noise of felt we when there, have from they're some was.So whole encouraged. what quarter good baked hangover of at time a just And it. off backed kind XX, steadfast and an but of do doing that. over from continuing all this been with the production -- there's was great promotional finished COVID a This kind the of trailing inventory you then quarter look out you COVID last a

got kind the I've into change what to needs those Fargo kind been were were be to to I X where done were time on waiting year So into the there Wells get M&A. now, doing we but of we comfortable excuses, I'm model look to of use things to as so of things doing wouldn't bored. were pushing that it's start side. it. from That's And before those we is we everybody go to -- the hearing our get fall.So is kind inventory we really some what at forward as right those M&A

shortly. at So back we'll be it

Operator

for today's conference The presentation. concluded. Instructions] has [Operator Thank attending now you

You may disconnect. now

OneWater Marine (ONEW) 2 May 242024 Q2 Earnings call transcript