OneWater(US:ONEW)2022-11-15 15:43Financial Data and Key Metrics Changes - Full year 2022 revenue increased 42% to $1.7 billion, following a 20% growth in 2021 [5][25] - Adjusted EBITDA for full year 2022 was $248 million, a nearly 60% increase [6][27] - Fiscal fourth quarter revenue rose 42% to $398 million from $280 million in the prior year quarter [21] - Net income for the fiscal fourth quarter totaled $22 million or $1.28 per diluted share, flat compared to the prior year [24] Business Line Data and Key Metrics Changes - Service, parts, and other sales increased 164% year-over-year to $255 million for fiscal 2022 [5][25] - In the fourth quarter, revenue from service, parts, and other sales increased 201% to $81 million [22][16] - New boat sales grew 22% to $236 million in the fiscal fourth quarter of 2022 [21] Market Data and Key Metrics Changes - Same-store sales growth for the full year was 12%, marking the fifth consecutive year of double-digit growth [5][25] - Inventory levels improved but remained below pre-COVID levels, with total inventory at $373 million as of September 30, 2022 [28] Company Strategy and Development Direction - The company is focused on diversifying its revenue streams, particularly in higher-margin service and parts sales [5][16] - The acquisition strategy remains a priority, with four dealership acquisitions completed in 2022 and plans for more in 2023 [7][31] - Partnerships with Forza X1 and The Sport Fishing Championship were established to enhance customer engagement and brand visibility [10] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges from Hurricane Ian, estimating a $25 million revenue impact due to delayed sales [18][21] - The company expects robust demand to moderate to traditional seasonal cycles in 2023, with same-store sales anticipated to increase in low to mid-single digits [30] - Management remains cautious about the M&A market, indicating a prudent approach to acquisitions in the current environment [40][41] Other Important Information - Total long-term debt stands at $443 million, with a net debt to adjusted EBITDA ratio of 1.6x [29] - The company reported $2 million in expenses related to Hurricane Ian, with ongoing recovery efforts in affected locations [44] Q&A Session Summary Question: Product mix impact on gross margin - Management indicated that the demand for larger boats (40 feet and above) remains strong, while smaller boats are seeing easing demand [34] Question: Inventory status compared to 2019 - Current inventory levels are around 11 to 12 weeks on hand, compared to 20 to 22 weeks in 2019, indicating room for growth [37][39] Question: M&A market outlook for 2023 - Management plans to monitor the macro environment closely and will be prudent in pursuing acquisitions, focusing on those with significant upside potential [40][41] Question: Costs associated with Hurricane Ian - Estimated costs related to Hurricane Ian are around $2 million, with ongoing recovery efforts at impacted locations [44] Question: Promotional activity and market dynamics - Currently, there is limited promotional activity, with some dealers discounting last year's models as inventory remains in good shape [46][47]