Fiscal Second Quarter 2020 Highlights:         
Revenue increased 5.1% to $190.0 millionSame-store sales declined 2.7%, driven by the effects of COVID-19 late in the quarterPre-owned boat sales increased 19.4% to $43.0 millionFinance & insurance income increased 27.2% to $8.1 millionNet income increased $5.9 million to $3.0 millionAdjusted EBITDA¹ of $9.9 million, flat compared to prior yearBUFORD, Ga., May 07, 2020 (GLOBE NEWSWIRE) — OneWater Marine Inc. (NASDAQ: ONEW) (“OneWater” or the “Company”) today announced results for its fiscal second quarter ended March 31, 2020.“Rising second quarter sales and a proven, adaptable business model contributed to a strong fiscal second quarter. Same-store sales through mid-March outpaced the prior year delivering approximately 10% growth year-over-year, but slowed significantly in the last two weeks of March as the COVID-19 pandemic spread across the U.S. Further, robust growth in finance & insurance income and pre-owned boat sales underscores the resiliency of our diversified portfolio,” commented Austin Singleton, Chief Executive Officer of OneWater. “Through the end of April, we have outperformed our expectations despite this unprecedented environment, as nearly all of our dealerships have remained open in some capacity. Our sales team quickly pivoted their selling strategies leveraging our proprietary technology tools, virtual walkthroughs and one-on-one appointments while adhering to social distancing guidelines, to deliver solid April boat sales, ahead of previous years.”Mr. Singleton continued, “Our top priority remains the health and safety of our team members and customers as we navigate through this difficult environment. We have taken decisive actions to align our cost structure and remain focused on adapting to our new normal to meet shifting consumer demand. We believe while some form of social distancing will be with us through the summer months, boating provides a wonderful opportunity for people to get outdoors with their families while staying safe, which we believe will support continued boat sales, whether new or pre-owned. We believe we are well-positioned to take advantage of new opportunities in our markets as they present themselves and emerge from this crisis stronger.”
Second Quarter 2020 ResultsRevenue for the fiscal second quarter 2020 was $190.0 million, an increase of 5.1% compared to $180.8 million in fiscal second quarter 2019, primarily driven by strong sales of pre-owned units and finance & insurance. During the fiscal second quarter 2020 we realized a 19.4% increase in pre-owned boat sales to $43.0 million from $36.0 million, in the prior year, and an increase of 27.2% in finance & insurance income to $8.1 million from $6.4 million, in the prior year period. Sales from stores recently acquired contributed to the fiscal second quarter increase in revenues but were partially offset by a 2.7% decrease in same-store sales.Gross profit totaled $44.6 million for the fiscal second quarter 2020, compared to $39.7 million for the fiscal second quarter 2019, driven by the increased pre-owned unit sales and higher finance & insurance income. Gross profit margin of 23.5% increased 150 basis points compared to the prior year due primarily to a shift in the mix and size of boat models sold, the margin profile of recently acquired locations and the Company’s emphasis on expanding gross profit margins.Fiscal second quarter 2020 selling, general and administrative expenses totaled $32.1 million, or 16.9% of sales, compared to $27.5 million, or 15.2% of sales, in the second quarter of 2019. The increase in selling, general and administrative expenses as a percentage of sales was due mainly to the acquired stores in the back half of fiscal year 2019.Net income for the fiscal second quarter of 2020 totaled $3.0 million, compared to net loss of $3.0 million, in the fiscal second quarter of 2019. The increase is primarily due to the timing of a $12.3 million reduction in income related to the non-cash change in fair value of warrants recognized in the prior year, partially offset by higher interest expense, income taxes and transaction costs in the current year. Post-IPO, OneWater’s share count changed dramatically as a result of the stock split and share offering. Additionally, the warrant liability and redeemable preferred interest were also converted and repaid, respectively, at the IPO.Fiscal second quarter 2020 Adjusted EBITDA (see reconciliation of Non-GAAP financial measures) was essentially flat at $9.9 million, compared to the fiscal second quarter of 2019.At March 31, 2020, the Company’s cash and cash equivalents balance was $20.4 million, an increase of $4.9 million compared to $15.5 million at March 31, 2019 and nearly double the balance at December 31, 2019. The Company also had $10.0 million of availability on its revolving line of credit at March 31, 2020. Total inventory at March 31, 2020 increased to $333.4 million compared to $298.5 million at March 31, 2019, primarily due to the inventory related to the dealerships we acquired during the second half of fiscal year 2019.2020 GuidanceIn light of the significant uncertainty that exists as a result of the COVID-19 pandemic, on March 26, 2020, OneWater announced it withdrew its fiscal year 2020 guidance.Conference Call and WebcastOneWater will host a conference call to discuss its fiscal second quarter 2020 earnings on Thursday, May 7, 2020 at 7:30 am Eastern time. The conference call may be accessed by dialing (866) 220-5793 in the U.S./Canada or (615) 622-8064 for participants outside the U.S./Canada using the Conference ID #3618958. This call is being webcast and 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.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 63 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 IndicatorsThis press release and our related earnings call contain certain non-GAAP financial measures, including Adjusted EBITDA as a measure 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 non‐GAAP forward-looking measures to their corresponding GAAP measures because certain items that impact these measures are unavailable or cannot be reasonably predicted without unreasonable efforts.Adjusted EBITDAWe define Adjusted EBITDA as net income (loss) before interest expense – other, income taxes, depreciation and amortization and other expense (income), further adjusted to eliminate the effects of items such as the change in the fair value of warrants, contingent consideration and transaction costs.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 settlement contingent consideration 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. 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 SalesWe 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 StatementsThis 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: decline in demand for our products and services, the seasonality and volatility of the boat industry, our acquisition 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 on the Company’s business, 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 the prospectus filed in connection with our initial public offering. 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
[email protected]¹ See reconciliation of Non-GAAP financial measures below.
_____________________________(1) Consists of transaction costs related to the Company’s fiscal year 2019 acquisitions and costs related to the Company’s initial public offering (“IPO”).
(2) Represents the non-cash expense recognized during the period for the change in the fair value of the warrants, which were exercised at the IPO, that were previously accounted for as a liability on our balance sheets.
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