OneWater(US:ONEW)2022-08-06 06:50Financial Data and Key Metrics Changes - Revenue increased 41% to $569 million compared to $404 million in the prior year quarter [5][23] - Adjusted EBITDA rose 45% to $95 million from $66 million in the prior year [5][27] - Net income for the fiscal third quarter totaled $65 million or $3.86 per diluted share, up 25% from $52 million or $3.04 per diluted share in the prior year [27][28] - Gross profit increased 45% to $184 million, with gross profit margin rising 90 basis points to 32.3% [25][27] Business Line Data and Key Metrics Changes - New boat sales grew 31% to $377 million [24] - Pre-owned boat sales increased 38% to $98 million [24] - Service parts and other sales climbed 153% to $75 million, driven by contributions from recently acquired businesses [24] Market Data and Key Metrics Changes - Same-store sales increased 12%, outperforming the industry which reportedly declined 10% to 20% [6][15] - Customer deposits increased nearly 50% compared to the prior year, indicating strong demand [16] Company Strategy and Development Direction - The company continues to leverage its aggressive acquisition strategy, with a focus on higher-margin revenue streams [9][10] - The integration of acquired companies has significantly improved EBITDA and contributed to overall growth [11][12] - The company aims to maintain a disciplined approach to acquisitions while also considering share repurchases as a means to return value to shareholders [31][32] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in a strong finish to the fiscal year, raising the outlook for adjusted EBITDA to $240 million to $250 million [33][34] - The company anticipates same-store sales to be up low-double digits for the year despite ongoing inventory challenges [34] - Management noted that demand remains robust, with presold inventory at record levels [16][20] Other Important Information - Total inventory as of June 30, 2022, was $269 million, down $24 million from the previous quarter [17][29] - The company has completed its acquisition guidance for the year and has a robust pipeline for future acquisitions [12][34] Q&A Session Summary Question: How much of a factor is supply chain in inventory normalization? - Management indicated it is a combination of supply chain improvements and strong consumer demand [38][39] Question: Is the acquisition strategy still reasonable in the current environment? - Management stated they will evaluate the best return on capital but do not plan to lower the acquisition cadence [40][44] Question: What was the breakdown of the 12% same-store sales increase? - Management noted that unit growth was essentially flat, with the increase driven more by price [47] Question: Why is the customer less impacted by macro headwinds? - Management attributed this to selling high-end products and ongoing consumer excitement due to innovative new products [48][50] Question: Are new boat margins expected to stabilize? - Management indicated that margin variations are due to seasonality and product mix, with a robust margin environment expected [55][56] Question: Does the new guidance include the Ocean Bio-Chem acquisition? - Management confirmed that the new guidance does not include this acquisition, which is expected to close in the fiscal fourth quarter [64] Question: Are there any changes in demand trends across different geographies? - Management has not observed any significant changes in demand trends among geographies at this time [66]