Core Viewpoint - OneWater Marine (ONEW) has received a Zacks Rank 2 (Buy) upgrade, indicating a positive trend in earnings estimates, which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Price Movement - The Zacks rating system emphasizes the correlation between changes in earnings estimates and stock price movements, suggesting that revisions in earnings estimates can lead to significant price changes [4][6]. - The recent upgrade for OneWater Marine reflects an improvement in its earnings outlook, which is expected to positively impact its stock price [3][5]. Earnings Estimate Revisions - OneWater Marine is projected to earn $1.57 per share for the fiscal year ending September 2025, representing a year-over-year increase of 60.2% [8]. - Over the past three months, the Zacks Consensus Estimate for OneWater Marine has increased by 9%, indicating a positive trend in earnings estimates [8]. Zacks Rank System - The Zacks Rank system categorizes stocks based on earnings estimate revisions, with only the top 20% of stocks receiving a 'Strong Buy' or 'Buy' rating, highlighting their potential for market-beating returns [9][10]. - OneWater Marine's upgrade to Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, suggesting a favorable outlook for the stock in the near term [10].

Revenue Performance - Total revenues for the three months ended December 31, 2024, increased to $375.814 million, up from $364.013 million in the same period of 2023, representing a growth of 2.4%[18] - New boat sales revenue reached $247.997 million, compared to $241.084 million in the prior year, reflecting an increase of 2.5%[18] - Sales from the top ten brands accounted for approximately 45.7% of total sales for the three months ended December 31, 2024, down from 48.9% in the same period of 2023[28] - The company recognized revenue from contract liabilities of $38.41 million for the three months ended December 31, 2024, compared to $31.38 million for the same period in 2023, indicating a year-over-year increase of approximately 22.5%[46] - Revenue from goods and services transferred at a point in time accounted for 92.6% of total revenue for the three months ended December 31, 2024, slightly down from 92.7% in the same period of 2023[47] Financial Losses - The net loss attributable to OneWater Marine Inc. for the quarter was $11.971 million, compared to a net loss of $7.170 million in the same quarter of 2023, indicating a deterioration in performance[18] - For the three months ended December 31, 2024, OneWater Marine Inc. reported a net loss of $13,612,000, compared to a net loss of $7,970,000 for the same period in 2023, indicating a year-over-year increase in losses of approximately 71.5%[23] - Net loss increased by $5.6 million to $13.6 million for the three months ended December 31, 2024, compared to $8.0 million for the same period in 2023[176] - Adjusted net loss attributable to OneWater Marine Inc. was $8.0 million for the three months ended December 31, 2024, compared to $5.4 million for the same period in 2023, indicating a decrease of $2.54 million[190] Cash Flow and Assets - The company’s cash position improved to $22.711 million as of December 31, 2024, compared to $16.849 million at the end of September 2024, an increase of 34.8%[16] - Total current assets increased to $797.474 million as of December 31, 2024, up from $777.366 million at the end of September 2024, marking a rise of 2.8%[16] - Total cash and restricted cash at the end of the period was $36,558,000, down from $54,153,000 at the end of December 2023, reflecting a decrease of 32.5%[23] - Net cash used in operating activities decreased by $72.6 million to $37.4 million for the three months ended December 31, 2024, compared to $110.0 million for the same period in 2023[199] - Net cash used in investing activities was $2.8 million for the three months ended December 31, 2024, a decrease of $42.6 million from net cash provided by investing activities of $39.8 million in 2023[200] Expenses and Liabilities - Selling, general and administrative expenses for the quarter were $79.060 million, slightly down from $79.599 million in the same quarter of 2023, a decrease of 0.7%[18] - The interest expense on floor plan financing was $7.026 million for the quarter, down from $7.812 million in the same period of 2023, a decrease of 10.1%[18] - Total liabilities rose to $1.227928 billion as of December 31, 2024, compared to $1.199236 billion at the end of September 2024, reflecting an increase of 2.4%[16] - The company reported depreciation and amortization expenses of $6,037,000 for the three months ended December 31, 2024, compared to $4,905,000 in the same period of 2023, reflecting an increase of 23.0%[23] Inventory and Receivables - The company’s inventory levels increased to $636.676 million as of December 31, 2024, compared to $590.838 million at the end of September 2024, an increase of 7.8%[16] - The company experienced a significant increase in accounts receivable, totaling $16,357,000 for the three months ended December 31, 2024, compared to $20,240,000 in the prior year, representing a decrease of 19.0%[23] - Total accounts receivable as of December 31, 2024, was $57.44 million, down from $73.82 million as of September 30, 2024, reflecting a decrease of approximately 22%[63] - New vessels inventory increased to $481.06 million as of December 31, 2024, from $442.83 million as of September 30, 2024, reflecting an increase of approximately 8.6%[64] Acquisitions and Growth Strategy - OneWater Marine Inc. acquired the remaining 20% of Quality Assets and Operations, LLC on October 31, 2023, resulting in full ownership as of December 31, 2024[30] - The company aims to acquire dealerships at attractive EBITDA multiples, typically less than 4.0x EBITDA on a trailing twelve-month basis[137] - The company expects to continue strategic acquisitions to enhance dealership growth and expand its parts and accessories business[136] - The company has completed 34 acquisitions since its formation in 2014, including 81 additional dealerships and 12 distribution centers[134] Market Presence - OneWater Marine Inc. operated 96 retail locations and 10 distribution centers/warehouses across 19 states as of December 31, 2024, maintaining a strong presence in key markets[26] - The company operates 96 dealerships across 17 states, positioning itself as one of the largest marine retailers in the U.S.[130] - The Dealerships segment accounted for approximately 93% of revenues, with over 9,500 new and pre-owned boats sold in fiscal year 2024[132] Financial Compliance and Standards - The Company was in compliance with all financial and non-financial covenants for the reporting period ended December 31, 2024[70] - The company plans to adopt new accounting standards related to segment reporting and income tax disclosures in fiscal years 2025 and 2026, respectively, which may impact future financial reporting[56][57] - The company was in compliance with all covenants under the A&R Credit Facility and the Inventory Financing Facility for the reporting period ended December 31, 2024[195]

Core Viewpoint - OneWater Marine Inc. reported first-quarter fiscal 2025 results with earnings and revenues exceeding expectations, although the bottom line showed a decline compared to the previous year [1][4]. Financial Performance - The company reported an adjusted loss per share of 54 cents, which was better than the Zacks Consensus Estimate of a loss of 94 cents, but worse than the prior year's loss of 38 cents [4]. - Quarterly revenues reached $375.8 million, surpassing the Zacks Consensus Estimate of $335 million, marking a 3.2% year-over-year increase driven by new unit sales and a 4% growth in same-store sales [4]. - New boat revenues increased by 2.9% year over year to $248 million, while finance and insurance income rose by 27.7% to $9.4 million [5]. - Pre-owned boat revenues grew by 6.6% year over year to $56.8 million, supported by higher unit sales and average prices [5]. - Service, parts, and other sales declined by 1.1% year over year to $61.6 million [5]. Operational Highlights - Selling, general, and administrative expenses as a percentage of total revenues decreased to 21% from 21.9% in the prior year, attributed to lower personnel costs and ongoing expense management [6]. - Gross profit for the quarter was $84.1 million, down from $91.4 million in the prior year, with gross margins contracting by 270 basis points to 22.4% [7]. - Adjusted EBITDA was reported at $1.9 million, significantly lower than the $7.1 million from the previous year [7]. Balance Sheet - As of December 31, 2024, cash totaled $22.7 million, down from $44.6 million a year earlier [8]. - Inventory decreased to $636.7 million from $706.8 million in the prior year [8]. - Net long-term debt was reduced to $412.6 million from $433.7 million in the previous quarter [8]. Fiscal Outlook - For fiscal 2025, the company anticipates revenues between $1.7 billion and $1.85 billion, with dealership same-store sales expected to rise in the low single digits [9]. - Adjusted EBITDA is projected to be between $80 million and $110 million, with adjusted earnings per share expected to range from $1 to $2 [9].

Financial Data and Key Metrics Changes - Revenue increased by 3% to $376 million from $364 million in the prior year [17] - Same-store sales were up 4%, driven by an increase in new unit sales despite a 14% decline in industry unit sales [18] - Gross profit decreased by 8% to $84 million compared to $91 million in the previous year [19] - Net loss for the first quarter totaled $14 million or $0.81 per diluted share, compared to a net loss of $8 million or $0.49 per diluted share in the prior year [21] - Adjusted loss per diluted share was $0.54 compared to $0.38 in the prior year [21] Business Line Data and Key Metrics Changes - New boat sales increased by 3% to $248 million, while pre-owned boat sales rose by 7% to $57 million [17] - Finance and Insurance revenue increased by 28% to $9 million, higher as a percentage of total boat sales [18] - Revenue from service parts and other sales decreased by 1% to $62 million [18] Market Data and Key Metrics Changes - Sales in the impacted areas due to Hurricane Helene and Milton were down mid-single digits compared to the prior year [8] - Overall inventory decreased by 10% year-over-year, with total inventory at $637 million compared to $707 million a year prior [22] Company Strategy and Development Direction - The company is focused on executing its inventory strategy in preparation for the summer selling season while remaining nimble to respond to market changes [11] - The company aims to reduce leverage in the latter half of 2025 and is maintaining its fiscal 2025 guidance with total sales expected to be between $1.7 billion and $1.85 billion [24][23] - The company is actively looking for strategic acquisitions in key boating markets but is being cautious and selective [95] Management's Comments on Operating Environment and Future Outlook - Management remains cautiously optimistic about 2025 despite the industry facing uncertainty after a challenging 2024 [10] - The company has not seen significant market changes that would alter its outlook for the year [11] - Management highlighted the importance of cleaning up inventory to improve margins and operational efficiency [71] Other Important Information - Selling, general and administrative expenses decreased by 1% to $79 million, with SG&A as a percentage of sales down 90 basis points [19] - The company is experiencing a promotional environment with manufacturing partners to support sales initiatives [15] Q&A Session Summary Question: Can you discuss the cadence of the quarter and any month-to-month updates? - Management noted that October and November were strong, while December was flat due to seasonal factors [28][30] Question: What are the expectations for margins going forward, especially with exiting brands? - Management indicated that margins may continue to face pressure in the second quarter but could improve as exiting brands are phased out [36][34] Question: What is the current state of inventory and targets for the fiscal year? - The target is to reduce inventory by over 10% year-over-year by September 2025, with current inventory down 9% [50][51] Question: How is the pre-owned market performing? - The pre-owned market remains limited in inventory, with an increase in trade-ins noted [77][86] Question: What is the outlook for finance and insurance revenue? - Management emphasized ongoing efforts to increase finance and insurance penetration, which has been successful [92] Question: What is the status of the M&A pipeline? - The M&A pipeline is active, but the company is being cautious and selective in its approach [95][94]

Group 1 - OneWater Marine reported revenue of $375.81 million for the quarter ended December 2024, reflecting a 3.2% increase year-over-year and surpassing the Zacks Consensus Estimate of $335.03 million by 12.17% [1] - The company's EPS was -$0.54, which is a decline from -$0.38 in the same quarter last year, but it exceeded the consensus EPS estimate of -$0.94 by 42.55% [1] - Over the past month, OneWater Marine's shares have returned -11.7%, contrasting with the Zacks S&P 500 composite's increase of 1.2%, and the stock currently holds a Zacks Rank 5 (Strong Sell) [3] Group 2 - Revenue from new boats was $248 million, exceeding the average estimate of $220.63 million by analysts, representing a year-over-year increase of 2.6% [4] - Revenue from service, parts, and other was $61.62 million, slightly above the estimated $59.80 million, but showed a year-over-year decline of 1.1% [4] - Finance and insurance income generated $9.40 million, significantly higher than the estimated $6.77 million, marking a 27.7% increase year-over-year [4] - Revenue from pre-owned boats was $56.80 million, surpassing the average estimate of $50.60 million, with a year-over-year increase of 6.6% [4] - Gross profit from new boats was $36.88 million, exceeding the estimate of $35.25 million [4] - Gross profit from service, parts, and other was $26.56 million, above the estimate of $25.85 million [4] - Gross profit from finance and insurance income was $9.40 million, compared to the estimate of $6.75 million [4] - Gross profit from pre-owned boats was $11.22 million, exceeding the estimate of $10.35 million [4]

Company Performance - OneWater Marine reported a quarterly loss of $0.54 per share, which was better than the Zacks Consensus Estimate of a loss of $0.94, representing an earnings surprise of 42.55% [1] - The company posted revenues of $375.81 million for the quarter ended December 2024, exceeding the Zacks Consensus Estimate by 12.17% and showing an increase from $364.01 million year-over-year [2] - Over the last four quarters, OneWater Marine has surpassed consensus EPS estimates only once and has topped consensus revenue estimates just once [2] Stock Outlook - OneWater Marine shares have declined approximately 11.7% since the beginning of the year, contrasting with the S&P 500's gain of 2.7% [3] - The current consensus EPS estimate for the upcoming quarter is $0.38 on revenues of $483.47 million, and for the current fiscal year, it is $1.33 on revenues of $1.8 billion [7] - The estimate revisions trend for OneWater Marine is currently unfavorable, resulting in a Zacks Rank 5 (Strong Sell), indicating expected underperformance in the near future [6] Industry Context - The Leisure and Recreation Products industry, to which OneWater Marine belongs, is currently ranked in the bottom 23% of over 250 Zacks industries, suggesting a challenging environment [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact OneWater Marine's stock performance [5]

Revenue Performance - Fiscal first quarter 2025 revenue was $375.8 million, a 3.2% increase from $364.0 million in the same quarter of 2024[4] - New boat revenue increased by 2.9% to $248.0 million, while pre-owned boat revenue rose by 6.6% to $56.8 million[4] - Finance and insurance income grew by 27.7% to $9.4 million, contributing positively to overall revenue[3] - The company maintains its fiscal year 2025 revenue guidance of $1.7 billion to $1.85 billion, with same-store sales expected to increase in low single digits[9] Profitability and Expenses - Gross profit for the quarter was $84.1 million, down from $91.4 million, resulting in a gross profit margin of 22.4%, a decrease of 270 basis points year-over-year[5] - Selling, general and administrative expenses were $79.1 million, representing 21.0% of revenue, down from 21.9% in the prior year[6] - The net loss for the quarter was $(13.6) million, compared to a net loss of $(8.0) million in the same quarter of 2024, with a diluted loss per share of $(0.81)[7] - Adjusted EBITDA decreased to $1.9 million from $7.1 million in the prior year quarter[8] Inventory Management - Total inventory decreased by 9.9% to $636.7 million, down from $706.8 million a year earlier, due to effective inventory management[8] Debt and Financial Leverage - As of December 31, 2024, total long-term debt was $428.3 million, with an adjusted long-term net debt leverage ratio of 5.2 times trailing twelve-month Adjusted EBITDA[9] - Adjusted Long-Term Net Debt is defined as long-term debt minus cash, which is used to assess financial leverage[27] Operational Insights - OneWater Marine Inc. operates 96 retail locations and 10 distribution centers across 19 states, focusing on premium marine retail[21] - The company utilizes Adjusted EBITDA as a key performance indicator, which excludes interest, taxes, depreciation, and other non-operational expenses[22][23] - Adjusted Net Income attributable to OneWater Marine Inc. is calculated by excluding transaction costs and other unusual expenses, providing a clearer view of operational performance[25][26] - Same-store sales are used to measure organic growth, excluding new and acquired stores until they have been operational for 13 months[28] Future Outlook and Risks - Forward-looking statements indicate management's expectations regarding future revenue and operating income, but these are subject to uncertainties and risks[29][30] - Key risks include demand fluctuations, supply chain challenges, and the impact of global events on business operations[31] - Management's strategy includes potential acquisitions and market expansion, although integration risks are acknowledged[31] Revenue Diversification - The company has a diversified revenue stream, including sales of new and pre-owned boats, financing, and maintenance services[21] - The company emphasizes the importance of non-GAAP measures for investors to assess financial performance across reporting periods[24][26]

Core Insights - OneWater Marine Inc. reported fiscal first quarter 2025 results with revenues of $375.8 million, a 3.2% increase from $364.0 million in the same quarter of 2024, driven by higher unit sales in both new and pre-owned boat categories [4][10] - The company experienced a net loss of $(13.6) million for the quarter, compared to a net loss of $(8.0) million in the prior year, with adjusted diluted loss per share of $(0.54) [7][21] - Gross profit decreased to $84.1 million, down from $91.4 million year-over-year, resulting in a gross profit margin of 22.4%, a decline of 270 basis points [5][8] Revenue Breakdown - New boat revenue reached $248.0 million, up 2.9% from $241.1 million, while pre-owned boat revenue increased by 6.6% to $56.8 million [4][13] - Finance and insurance income rose significantly by 27.7% to $9.4 million, contributing positively to overall revenue despite a slight decline in service, parts, and other sales [4][8] - Same-store sales increased by 4.2%, indicating organic growth within the dealership segment [4][10] Cost Management and Expenses - Selling, general, and administrative expenses totaled $79.1 million, representing 21.0% of revenue, a decrease from 21.9% in the previous year, attributed to cost reduction initiatives [6][8] - The company is focused on ongoing cost reduction efforts to enhance its financial profile as it navigates inventory management challenges [3][10] Financial Position - As of December 31, 2024, OneWater's cash and cash equivalents stood at $22.7 million, with total liquidity exceeding $40.0 million [8][9] - Total inventory decreased by 9.9% to $636.7 million compared to $706.8 million a year earlier, reflecting effective inventory management [9][10] - Long-term debt was reported at $428.3 million, with an adjusted long-term net debt leverage ratio of 5.2 times trailing twelve-month Adjusted EBITDA [9][10] Future Outlook - The company maintains its fiscal full year 2025 guidance, projecting revenues between $1.7 billion and $1.85 billion, with dealership same-store sales expected to increase in low single digits [10][11] - Adjusted EBITDA is anticipated to range from $80 million to $110 million for the fiscal year [10][11]

Company Overview - OneWater Marine Inc. is one of the largest and fastest-growing premium marine retailers in the United States, operating 96 retail locations and 10 distribution centers across 19 states [3] - The company offers a diverse range of products and services, including new and pre-owned boat sales, finance and insurance products, parts and accessories, as well as maintenance and repair services [3] Upcoming Financial Results - OneWater Marine Inc. will release its first quarter 2025 financial results on January 30, 2025, before the market opens [1] - Following the release, the management team will host a conference call at 8:30 a.m. Eastern Time to discuss the results [1] - The conference call will be accessible via phone and will also be available as a live webcast on the company's Investor Relations website [1] Telephonic Replay Information - A telephonic replay of the conference call will be available until February 6, 2025, with specific dialing instructions provided for participants [2]

Financial Position and Performance - Total revenues for 2024 decreased to $1,772,630, down 8.5% from $1,936,310 in 2023[576] - Net loss attributable to OneWater Marine Inc. for 2024 was $(5,705), compared to a net loss of $(38,592) in 2023[576] - Total current assets decreased to $777,366, down 11.8% from $881,899 in 2023[573] - Total liabilities decreased to $1,199,236, down 5.9% from $1,275,081 in 2023[573] - Cash balance as of September 30, 2024, was $16,849, a significant decrease from $84,648 in 2023[573] - New boat revenue for 2024 was $1,118,292, a decrease of 8.6% from $1,223,691 in 2023[576] - Service, parts & other revenue decreased to $290,651, down 9.7% from $321,817 in 2023[576] - Selling, general and administrative expenses decreased to $332,680, down 3.6% from $345,524 in 2023[576] - Comprehensive loss attributable to OneWater Marine, Inc. for 2024 was $(7,603), compared to $(38,584) in 2023[578] - The company reported a net loss of $6,176,000 for the year ended September 30, 2024, compared to a net loss of $39,111,000 in the previous year[584] Cash Flow and Investments - Operating activities generated net cash of $34,839,000, a significant recovery from the cash used in operating activities of $129,760,000 in the prior year[585] - The company invested $25,918,000 in property and equipment, an increase from $21,251,000 in the previous year[585] - Cash used in acquisitions net of cash acquired was $5,712,000, down from $28,882,000 in the previous year[585] - Cash paid for interest during the fiscal year was $75.96 million, compared to $49.51 million in the previous year[1] - For the fiscal year ended September 30, 2024, total cash and restricted cash at the end of the period was $27.34 million, down from $93.31 million at the beginning of the period, reflecting a net change of $(65.97) million[1] Debt and Financing - The outstanding balance under the Inventory Financing Facility not covered by interest rate swaps is $243.4 million, with a potential interest expense change of approximately $2.4 million for a 100 basis point increase in interest rates[557] - The A&R Credit Facility has an outstanding balance of $226.6 million not covered by interest rate swaps, which could lead to a change in interest expense of about $2.3 million for a 100 basis point increase in interest rates[558] - The company made payments of $78,381,000 on long-term debt, compared to $18,338,000 in the previous year[585] - As of September 30, 2024, total debt outstanding was $430.3 million, a decrease from $465.1 million as of September 30, 2023, representing a reduction of approximately 7.5%[688] - The principal repayment requirements of long-term debt for the year ending September 30, 2025, are $10.7 million, with total principal payments of $430.3 million due[689] Acquisitions and Goodwill - The company acquired the remaining 20% of the economic interest in Quality Assets and Operations, LLC on October 31, 2023, resulting in 100% ownership as of September 30, 2024[1] - The total consideration paid for the acquisitions in fiscal year 2023 was $42.0 million, with $28.9 million paid at closing[650] - The acquisitions in fiscal year 2023 contributed $60.9 million to consolidated revenue and $6.3 million to net income before income tax expense[654] - The total consideration for the acquisitions in fiscal year 2022 was $490.6 million, with $459.5 million paid at closing[656] - The company recorded goodwill of $15.9 million and $173.2 million for the fiscal years 2023 and 2022, respectively[661] Impairments and Restructuring - The company recognized a $57.7 million impairment for goodwill for the year ended September 30, 2023[1] - The Company recognized a $46.7 million impairment for definite-lived intangible assets for the year ended September 30, 2023[616] - The company recognized $15.3 million in charges related to the 2024 Restructuring, with $12.4 million recorded in restructuring and impairment[731] - The 2023 Impairment resulted in a loss of $147.4 million, primarily impacting the Dealerships and Distribution reporting segment[733] Tax and Compliance - The effective income tax rate for the year ended September 30, 2024, was 2.4%, a significant decrease from 8.0% in 2023 and 22.0% in 2022[736] - The company has a liability under the Tax Receivable Agreement of $40.6 million as of September 30, 2024, down from $43.1 million in 2023[742] - The company has not recognized any uncertain tax positions, penalties, or interest as of September 30, 2024[741] Risk Factors - The company may face risks related to demand for products and services, seasonality, and supply chain challenges[18] - The company’s future operating results and profitability are subject to various risks and uncertainties, including economic conditions and competition[16] - The company is exposed to foreign currency risk due to purchasing inventories from foreign manufacturers, which may affect competitive pricing in the U.S.[560] Accounting and Compliance - The company’s financial statements for the years ended September 30, 2024, 2023, and 2022 present fairly its financial position and results of operations in accordance with U.S. GAAP[566] - The company has no critical audit matters arising from the current period audit of the financial statements[570] - The company’s management is responsible for the financial statements, while the independent auditor expresses an opinion based on the audits conducted[568] - The Company plans to adopt new accounting pronouncements in fiscal years 2025 and 2026, which may impact consolidated financial statements[641][642] Stockholder Equity and Compensation - Total stockholders' equity attributable to OneWater Marine Inc. increased slightly to $360,810 from $358,609 in 2023[573] - Total stockholders' equity as of September 30, 2024, was $390,753,000, an increase from $414,078,000 in the previous year[582] - The Company achieved 74% of the performance target for performance-based restricted stock units as of September 30, 2024[699] - Compensation expense for performance-based units was $2.9 million for the fiscal year ended September 30, 2024[700] - The Company recognized $7.9 million of total compensation expense for the fiscal year ended September 30, 2024, down from $8.2 million in 2023[700]