• Revenue: Decreased 16% to $378 million in Q4 2024 from $451 million in Q4 2023.
• New Boat Sales: Down 18% to $217 million in Q4 2024.
• Pre-Owned Boat Sales: Decreased 20% to $73 million in Q4 2024.
• Service, Parts, and Other Sales: Decreased 7% to $76 million in Q4 2024.
• Finance and Insurance Revenue: Decreased 12% to $11 million in Q4 2024.
• Gross Profit: Decreased 24% to $91 million in Q4 2024.
• SG&A Expenses: Decreased to $80 million from $85 million in Q4 2023.
• Operating Income: Increased to $4 million from a loss of $117 million.
• Net Loss: $10 million or $0.63 per diluted share in Q4 2024.
• Adjusted EBITDA: $8 million in Q4 2024.
• Same Store Sales: Decreased 7% for fiscal 2024.
• Total Revenue for 2024: Decreased 8% to $1.8 billion.
• Gross Profit Margin for 2024: 24.5%.
• Total Inventory: $591 million as of September 30, 2024.
• Total Long Term Debt: $423 million as of September 30, 2024.
• Net Leverage: 4.9 times trailing 12-month adjusted EBITDA.

• Warning! GuruFocus has detected 5 Warning Signs with ONEW.

Release Date: November 14, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• OneWater Marine Inc (NASDAQ:ONEW) reported a record Fort Lauderdale Boat Show with unit sales up double digits compared to the prior year, indicating strong customer demand.
• The company successfully reopened all retail locations after hurricanes with minimal damage, showcasing resilience and operational recovery.
• Cost-saving measures and restructuring actions have been implemented, which are expected to benefit margins in 2025.
• Inventory optimization efforts have led to a slight decrease in inventory levels, positioning the company well for future demand.
• The company has a diverse brand portfolio, which provides a competitive advantage and ensures a wide range of options for customers.

Negative Points

• Hurricanes Helene and Milton significantly disrupted sales, particularly impacting the fourth quarter results.
• Fiscal fourth-quarter revenue decreased by 16% compared to the previous year, with new boat sales down 18% and pre-owned boat sales down 20%.
• Same-store sales were down 7% for the full year, reflecting softer demand in the recreational marine market.
• The company experienced a net loss for the fiscal fourth quarter, driven by lower sales and restructuring charges.
• High inventory levels across the industry and promotional activities have pressured margins, with expectations of continued challenges in the near term.

Q & A Highlights

Q: Can you quantify the impact of Hurricane Helene on revenue and EBITDA for the quarter? A: It's challenging to pinpoint an exact number, but we estimate the impact to be in the $30 million range. Some deals were closed on the east coast of Florida, which wasn't affected, but overall, the disruption was significant.

Q: How do you expect the impact of Hurricanes Helene and Milton to affect the first quarter of 2025, and does your guidance assume recouping lost sales? A: We anticipate some recovery in the back half of 2025, but it's difficult to predict exact timing. Customers often prioritize other needs before replacing boats, so it may take up to 18 months for full recovery. We expect a significant improvement in the fourth quarter of 2025.

Q: What is your perspective on the current state of the boat consumer market, considering recent trends and the election results? A: The Fort Lauderdale Boat Show was a positive indicator, showing strong customer interest despite economic uncertainties. The consumer sentiment seemed more optimistic post-election, and we didn't encounter much resistance regarding interest rates.

Q: Your same-store sales for the quarter seemed to lag the industry. Is this due to geographic concentration in Florida, or are there other factors? A: The geographic concentration in Florida, particularly on the Gulf Coast, was a significant factor. Many stores were in preparation mode for the hurricane, impacting sales and service operations.

Q: With pro forma leverage approaching five times, what flexibility do you have regarding cash usage, particularly for M&A? A: We continue to pursue acquisitions with minimal capital outlay. Some larger deals are still normalizing earnings, but we are focused on reducing debt and enhancing profitability through cost actions and brand alignment.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.