OneWater Marine Inc. (NASDAQ: ONEW) announced results for its fiscal first quarter ended Dec. 31, 2019.
“Following a successful initial public offering earlier this month, we are thrilled to report a strong start to our fiscal year 2020. Since its inception in 1987, OneWater has executed a strategy that blends organic growth and strategic acquisitions. We believe that this strategy, coupled with an excellent customer experience, has positioned OneWater well to meet the demands of a large and growing boating market,” commented Austin Singleton, chief executive officer of OneWater.
On February 11, 2020, OneWater successfully completed its IPO of 5,307,693 shares of its Class A Common Stock at a price of $12.00 per share, which includes the exercise in full by the underwriters of their option to purchase an additional 692,308 shares of Class A Common Stock. The net proceeds received by OneWater from the offering (after deducting underwriting discounts and commissions) were approximately $59.2 million. OneWater contributed the net proceeds to its subsidiary, One Water Marine Holdings, LLC (“OneWater LLC”) in exchange for limited liability company units in OneWater LLC.
Revenue for the fiscal first quarter 2020 was $153.7 million, an increase of 49% compared to $103.3 million in fiscal first quarter 2019, which the company said was primarily driven by strong sales of both new and pre-owned units.
Stores recently acquired contributed to the increase in first quarter sales and same-store sales for the fiscal first quarter increased 17%, comprised of a balanced increase in both units sold and price per unit. Fiscal first quarter 2020 finance & insurance income increased to $4.3 million from $2.2 million in the prior year period.
Gross profit totaled $32.2 million for the fiscal first quarter 2020, compared to $23.3 million for the fiscal first quarter 2019, driven by the increased new and pre-owned unit sales and higher finance & insurance income. Gross margin of 20.9% declined 170 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 generating strong same-store sales.
“During the fiscal first quarter, positive consumer sentiment and favorable retail boat trends drove our same-store sales growth of 17 percent, with increased sales across all of our boat categories, particularly in ski and wake, as well as runabouts," Singleton said. "Feedback from the start of the 2020 boat season suggests continued momentum and optimism across our network. In fact, our sales at several major boat shows, such as Atlanta, grew beyond our high single-digit expectations. Furthermore, through our focused efforts and training, we doubled our high-margin finance & insurance income in the fiscal first quarter of 2020 compared to the prior year. We also delivered positive adjusted EBITDA in our seasonally lowest sales quarter.”
Fiscal first quarter 2020 selling, general and administrative expenses totaled $28.4 million, or 18.5% of sales, compared to $21.6 million, or 20.9% of sales, in the first quarter of 2019. The reduction in selling, general and administrative expenses as a percentage of sales was due to leverage from the incremental same-store sales increase, according to a news release from the company.
“As we look to the remainder of fiscal 2020, while we anticipate that solid consumer retail trends will continue, the agility of our team and operations allow us to react quickly to any change in macroeconomic disruptions and their potential impact on marine retail sales," Singleton said. "We also believe the pipeline of high-quality dealerships to add to the OneWater family remains robust. The successful completion of our IPO further solidifies OneWater’s position as a market leader in the marine industry and sets us up for further expansion and growth in 2020 and beyond."