OneWater Marine Inc. announced results for its fiscal second quarter ended March 31, 2020.
“Rising second quarter sales and a proven, adaptable business model contributed to a strong fiscal second quarter. Same-store sales through mid-March outpaced the prior year delivering approximately 10% growth year-over-year, but slowed significantly in the last two weeks of March as the COVID-19 pandemic spread across the U.S. Further, robust growth in finance & insurance income and pre-owned boat sales underscores the resiliency of our diversified portfolio,” said OneWater CEO Austin Singleton.
Revenue for the fiscal second quarter 2020 was $190.0 million, an increase of 5.1% compared to $180.8 million in fiscal second quarter 2019, which the company said was primarily driven by strong sales of pre-owned units and finance & insurance. During the fiscal second quarter 2020 OneWater experienced a 19.4% increase in pre-owned boat sales to $43.0 million from $36.0 million, in the prior year, and an increase of 27.2% in finance & insurance income to $8.1 million from $6.4 million, in the prior year period. Sales from stores recently acquired contributed to the fiscal second quarter increase in revenues, but were partially offset by a 2.7% decrease in same-store sales.
Gross profit totaled $44.6 million for the fiscal second quarter 2020, compared to $39.7 million for the fiscal second quarter 2019, driven by the increased pre-owned unit sales and higher finance & insurance income. Gross profit margin of 23.5% increased 150 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 expanding gross profit margins.
Fiscal second quarter 2020 selling, general and administrative expenses totaled $32.1 million, or 16.9% of sales, compared to $27.5 million, or 15.2% of sales, in the second quarter of 2019. The increase in selling, general and administrative expenses as a percentage of sales was due mainly to the acquired stores in the back half of fiscal year 2019.
Net income for the fiscal second quarter of 2020 totaled $3.0 million, compared to net loss of $3.0 million, in the fiscal second quarter of 2019. The increase is primarily due to the timing of a $12.3 million reduction in income related to the non-cash change in fair value of warrants recognized in the prior year, partially offset by higher interest expense, income taxes and transaction costs in the current year. Post-IPO, OneWater’s share count changed dramatically as a result of the stock split and share offering. Additionally, the warrant liability and redeemable preferred interest were also converted and repaid, respectively, at the IPO.
“Through the end of April, we have outperformed our expectations despite this unprecedented environment, as nearly all of our dealerships have remained open in some capacity," Singleton said. "Our sales team quickly pivoted their selling strategies leveraging our proprietary technology tools, virtual walkthroughs and one-on-one appointments while adhering to social distancing guidelines, to deliver solid April boat sales, ahead of previous years.”
As of March 26, 2020, OneWater has withdrawn from its fiscal year 2020 guidance.
Singleton continued, “Our top priority remains the health and safety of our team members and customers as we navigate through this difficult environment. We have taken decisive actions to align our cost structure and remain focused on adapting to our new normal to meet shifting consumer demand. We believe while some form of social distancing will be with us through the summer months, boating provides a wonderful opportunity for people to get outdoors with their families while staying safe, which we believe will support continued boat sales, whether new or pre-owned. We believe we are well-positioned to take advantage of new opportunities in our markets as they present themselves and emerge from this crisis stronger.”