Optimizing Costs and Inventory, Well-positioned Entering Fiscal Year 2025
Fiscal Year 2024 Highlights
- Revenue decreased 8% to $1.78 billion
- Same-store sales decreased 7%
- Gross profit margin of 24.5%
- GAAP net loss of $6 million, or $(0.39) per diluted share and adjusted diluted earnings per share1 of $0.98
- Adjusted EBITDA1 was $82 million
"Our team demonstrated remarkable resilience and execution amidst a challenging retail environment as consumer behavior and industry inventory reset in fiscal 2024. Our revenue and brand diversification, coupled with our geographic reach, helped mitigate the impact of macroeconomic uncertainty and severe weather, underscoring the strength of our business model,” commented Austin Singleton, Chief Executive Officer at OneWater.
"As we closed out the fiscal year, Hurricane Helene struck the West Coast of Florida, causing extensive damage. Our thoughts remain with those affected, and we are actively supporting local recovery efforts. In preparation for the storm we temporarily closed several stores, and insurance companies halted writing new policies, disrupting sales during the last 10 days of the month and significantly impacting our fourth quarter results. Currently, all retail locations are operational, and we are ready to assist customers as they resume their boat buying journey.”
"Looking to fiscal 2025, we expect a slower start to the year given the ongoing impacts from Hurricanes Helene and Milton; however, we are cautiously optimistic in our full year outlook. Customers are active, our inventory positioning remains healthy, and we expect our recent cost actions to continue to benefit us as we move through the year.”
| For the Three Months Ended September 30 | 2024 | 2023 | $ Change | % Change | ||||||||
| Revenues | (unaudited, $ in thousands) | |||||||||||
| New boat | $ | 216,740 | $ | 264,357 | $ | (47,617 | ) | (18.0)% | ||||
| Pre-owned boat | 73,373 | 91,836 | (18,463 | ) | (20.1)% | |||||||
| Finance & insurance income | 11,472 | 13,039 | (1,567 | ) | (12.0)% | |||||||
| Service, parts & other | 76,270 | 81,749 | (5,479 | ) | (6.7)% | |||||||
| Total revenues | $ | 377,855 | $ | 450,981 | $ | (73,126 | ) | (16.2)% | ||||
Revenue for fiscal fourth quarter 2024 was $377.9 million, a decrease of 16.2% compared to $451.0 million in fiscal fourth quarter 2023. Same-store sales decreased 17%. New boat revenue decreased 18.0%, driven by a decrease in units sold. Pre-owned boat revenue decreased 20.1%, driven by the decrease in units sold and average price per unit. Prior to the threats of the hurricane, same-store sales were trending in line with the Company's expectations. Finance & insurance income increased slightly as a percentage of total boat sales. Service, parts & other sales were down 6.7% compared to the prior year quarter. Excluding the impact from the dispositions that occurred in the fourth quarter of 2023, dealership segment service, parts and other sales were positive. Distribution segment service, parts, and other sales were lower due to reduced production by boat manufacturers.
Gross profit totaled $90.7 million for fiscal fourth quarter 2024, down $28.3 million from $119.0 million for fiscal fourth quarter 2023. Gross profit margin of 24.0% decreased 240 basis points compared to the prior year period, driven by new and pre-owned boat pricing, including the impact of select brands the Company is exiting. Excluding charges related to brands being exited, new boat margins were flat sequentially.
Fiscal fourth quarter 2024 selling, general and administrative expenses totaled $79.5 million, or 21.0% of revenue, compared to $84.7 million, or 18.8% of revenue, in fiscal fourth quarter 2023. The increase in selling, general and administrative expenses as a percentage of revenue was driven by lower revenues. On a dollar basis, selling, general and administrative expenses declined 6.1% due to previous cost reduction actions, ongoing expense management and lower personnel costs.
Net loss for fiscal fourth quarter 2024 totaled $(10.4) million, compared to net loss of $(110.9) million in fiscal fourth quarter 2023. The net loss in the prior year period was driven by a $147.4 million non-cash impairment charge related to certain intangible assets. The Company reported net loss per diluted share for fiscal fourth quarter 2024 of $(0.63), compared to net loss per diluted share of $(6.89) in 2023. Adjusted diluted loss per share1 for fiscal fourth quarter 2024 was $(0.36), compared to adjusted diluted earnings per share1 of $0.42 in 2023.
Fiscal fourth quarter 2024 Adjusted EBITDA1 decreased 73.7% to $7.8 million compared to $29.8 million for fiscal fourth quarter 2023.
| For the Twelve Months Ended September 30 | 2024 | 2023 | $ Change | % Change | ||||||||
| Revenues | (unaudited, $ in thousands) | |||||||||||
| New boat | $ | 1,118,292 | $ | 1,223,691 | $ | (105,399 | ) | (8.6)% | ||||
| Pre-owned boat | 312,193 | 334,477 | (22,284 | ) | (6.7)% | |||||||
| Finance & insurance income | 51,494 | 56,325 | (4,831 | ) | (8.6)% | |||||||
| Service, parts & other | 290,651 | 321,817 | (31,166 | ) | (9.7)% | |||||||
| Total revenues | $ | 1,772,630 | $ | 1,936,310 | $ | (163,680 | ) | (8.5)% | ||||
Fiscal Year Ended September 30, 2024 Results
Revenue for the fiscal year ended September 30, 2024 decreased 8.5% to $1,772.6 million from $1,936.3 million for the fiscal year ended September 30, 2023, driven by a decrease in new and pre-owned unit sales and a 9.7% decrease in service, parts & other sales compared to the prior year. Same-store sales decreased 7% compared to the prior year. Prior to the threats of the hurricane, same-store sales were trending down mid-single digits, in line with the Company's expectations. Excluding the impact from the dispositions that occurred in the fourth quarter of 2023, dealership segment service, parts and other sales were positive. Distribution segment service, parts, and other sales were lower due to reduced production by boat manufacturers.
Gross profit totaled $435.1 million for fiscal year 2024, compared to $535.1 million for fiscal year 2023. Gross profit margin of 24.5% decreased 310 basis points compared to the prior year, primarily due to moderated boat pricing as a result of the industry normalization following the COVID-era environment.
Fiscal year 2024 selling, general and administrative expenses totaled $332.7 million, or 18.8% of revenue, compared to $345.5 million, or 17.8% of revenue in fiscal year 2023. The increase in selling, general and administrative expenses as a percentage of revenue was due primarily to lower revenues, but selling, general and administrative expenses decreased 3.7% on a dollar basis as a result of previous cost reduction actions and the Company's variable cost structure.
Net loss for fiscal year 2024 totaled $(6.2) million compared to net loss of $(39.1) million in fiscal year 2023, an increase of $32.9 million. The increase was primarily due to a $147.4 million non-cash impairment charge related to certain intangible assets during the fourth quarter of 2023. The Company reported a net loss per diluted share for fiscal year 2024 of $(0.39), compared to net loss per diluted share of $(2.69), in 2023. Adjusted earnings per diluted share1 for fiscal year 2024 were $0.98 per diluted share, compared to $5.10 per diluted share in 2023. Adjusted EBITDA1 decreased 53.2% to $82.5 million, compared to $176.4 million in fiscal year 2023.
As of September 30, 2024, the Company's cash and cash equivalents balance was $16.8 million and total liquidity, including cash and availability under credit facilities, was approximately $30 million. Total inventory as of September 30, 2024, decreased to $590.8 million, compared to $598.6 million on June 30, 2024. Inventory was down slightly due to the continued focus on matching inventory levels with market demand. Total long-term debt as of September 30, 2024 was $422.8 million, and adjusted long-term net debt (net of $16.8 million cash)1 was 4.9 times trailing twelve-month Adjusted EBITDA1.
Fiscal Year 2025 Guidance
For fiscal full year 2025, OneWater anticipates revenue to be in the range of $1.7 billion to $1.85 billion and dealership same-store sales to be up low single digits. Adjusted EBITDA2 is expected to be in the range of $80 million to $110 million and Adjusted Diluted Earnings Per Share is expected to be in the range of $1.00 to $2.00.
Conference Call and Webcast
OneWater will host a conference call to discuss its fiscal fourth quarter and full-year earnings on Thursday, November 14th, at 8:30 am Eastern time. To access the conference call via phone, participants can dial 1-833-630-0581 or 1-412-317-1814 (International).
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.
A telephonic replay will also be available through November 28th, 2024 by dialing 1-877-344-7529 (US Toll Free), 855-669-9658 (Canada Toll Free), or 1-412-317-0088 (International Toll), by entering access code 9583839.
- See reconciliation of Non-GAAP financial measures below.
- See reconciliation of Non-GAAP financial measures below for a discussion of why reconciliations of forward-looking Adjusted EBITDA and adjusted earnings per diluted share are not available without unreasonable effort.
| ONEWATER MARINE INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands except per share data) (Unaudited) | |||||||||||||||
| Three Months Ended September 30, | Twelve Months Ended September 30, | ||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||
| Revenues: | |||||||||||||||
| New boat | $ | 216,740 | $ | 264,357 | $ | 1,118,292 | $ | 1,223,691 | |||||||
| Pre-owned boat | 73,373 | 91,836 | 312,193 | 334,477 | |||||||||||
| Finance & insurance income | 11,472 | 13,039 | 51,494 | 56,325 | |||||||||||
| Service, parts & other | 76,270 | 81,749 | 290,651 | 321,817 | |||||||||||
| Total revenues | 377,855 | 450,981 | 1,772,630 | 1,936,310 | |||||||||||
| Gross profit | |||||||||||||||
| New boat | 35,403 | 54,902 | 196,886 | 268,469 | |||||||||||
| Pre-owned boat | 14,060 | 18,210 | 64,125 | 75,953 | |||||||||||
| Finance and insurance | 11,472 | 13,039 | 51,494 | 56,325 | |||||||||||
| Service, parts & other | 29,718 | 32,856 | 122,558 | 134,379 | |||||||||||
| Total gross profit | 90,653 | 119,007 | 435,063 | 535,126 | |||||||||||
| Selling, general and administrative expenses | 79,511 | 84,652 | 332,680 | 345,524 | |||||||||||
| Depreciation and amortization | 5,216 | 6,588 | 19,401 | 23,898 | |||||||||||
| Transaction costs | 564 | 171 | 1,530 | 1,839 | |||||||||||
| Change in fair value of contingent consideration | 330 | (2,367 | ) | 4,248 | (1,604 | ) | |||||||||
| Restructuring and impairment | 539 | 147,402 | 12,386 | 147,402 | |||||||||||
| Net income (loss) from operations | 4,493 | (117,439 | ) | 64,818 | 18,067 | ||||||||||
| Other expense (income): | |||||||||||||||
| Interest expense - floor plan | 8,460 | 7,393 | 34,087 | 25,080 | |||||||||||
| Interest expense - other | 9,698 | 9,292 | 37,050 |
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