U.S. markets open in 7 hours 7 minutes
  • S&P Futures

    -11.75 (-0.23%)
  • Dow Futures

    -82.00 (-0.21%)
  • Nasdaq Futures

    -80.50 (-0.44%)
  • Russell 2000 Futures

    -8.30 (-0.40%)
  • Crude Oil

    -0.49 (-0.62%)
  • Gold

    -2.90 (-0.14%)
  • Silver

    +0.02 (+0.10%)

    -0.0008 (-0.08%)
  • 10-Yr Bond

    0.0000 (0.00%)
  • Vix

    +0.38 (+2.90%)

    -0.0015 (-0.12%)

    +0.0460 (+0.03%)
  • Bitcoin USD

    +3,385.34 (+5.31%)
  • CMC Crypto 200

    0.00 (0.00%)
  • FTSE 100

    -42.17 (-0.55%)
  • Nikkei 225

    +186.83 (+0.47%)

OneWater Marine Inc. (ONEW) Faces Fiscal Challenges Despite Revenue Growth in FY 2023

  • OneWater Marine Inc. (NASDAQ:ONEW) reports an 11% increase in revenue for FY 2023, reaching $1.94 billion.

  • Despite revenue growth, a significant non-cash impairment charge leads to a GAAP net loss of $(39) million.

  • Adjusted EBITDA stands at $167 million, with a forecast of dealership same-store sales growth in fiscal 2024.

  • ONEW's aggressive inventory management strategy is set to navigate the expected challenging macroeconomic environment.

On November 16, 2023, OneWater Marine Inc. (NASDAQ:ONEW) released its 8-K filing, disclosing its fiscal fourth quarter and full-year 2023 results. The company achieved an 11% increase in revenue, amounting to $1.94 billion, and a 3% rise in same-store sales. However, a substantial non-cash impairment charge of $147 million in the fourth quarter resulted in a GAAP net loss of $(39) million, or $(2.69) per diluted share. Adjusted diluted earnings per share stood at $5.10.

Fiscal Fourth Quarter 2023 Performance

For the fiscal fourth quarter of 2023, ONEW reported a revenue of $451.0 million, marking a 13.4% increase compared to the same period in the previous year. This growth was primarily driven by robust pre-owned boat sales and a significant uptick in new boat revenue. Despite these gains, gross profit margin experienced a decline, settling at 26.4%, a 570 basis point decrease from the prior year, mainly due to the normalization of boat pricing.

Annual Financial Highlights and Challenges

Throughout the fiscal year, ONEW faced several challenges, including moderated boat pricing and increased selling, general, and administrative expenses, which rose to 17.8% of revenue. The net loss for the fiscal year was a stark contrast to the net income of $152.6 million reported in the previous year, largely attributable to the impairment charge and the aforementioned challenges.

Balance Sheet and Cash Flow Insights

As of September 30, 2023, ONEW's cash and cash equivalents balance stood at $84.6 million, with total liquidity exceeding $100.0 million. Inventory levels rose to $609.6 million, up from $373.0 million the previous year, reflecting supply chain normalization and recent acquisitions. Total long-term debt reached $457.8 million, with adjusted long-term net debt at 2.2 times trailing twelve-month Adjusted EBITDA.

Looking Ahead: Fiscal Year 2024 Guidance

Looking forward, ONEW anticipates dealership same-store sales to increase in the low to mid-single digits for fiscal 2024, with Adjusted EBITDA projected to be between $130 million and $155 million. Earnings per diluted share are expected to range from $3.25 to $3.75, assuming no major economic downturn or recovery.

Management Commentary

"Our team delivered record revenue, solid gross margins and strong cash generation in fiscal 2023, despite a dynamic operating environment," said Austin Singleton, Chief Executive Officer at OneWater. "Moving into fiscal 2024, our proactive and aggressive approach to inventory management positions us well as we enter the seasonally slower winter months. We have reinvigorated our deal activity in-line with our strategic priorities and remain focused on executing our proven strategy to continue outperforming the industry and driving value for our shareholders."

ONEW's management remains committed to executing its strategic priorities and is poised to navigate through the anticipated challenging macroeconomic environment with a focus on inventory management and value creation for shareholders.

Investor and Analyst Considerations

Value investors and analysts may find ONEW's ability to generate revenue growth in a challenging environment noteworthy, despite the impact of the non-cash impairment charge on net income. The company's proactive inventory management and strategic focus on high-margin service areas may offer potential for resilience and growth in the coming fiscal year.

For more detailed financial information and the full earnings report, interested parties can access the 8-K filing on the SEC website or visit OneWater Marine Inc.'s investor relations page.

Explore the complete 8-K earnings release (here) from OneWater Marine Inc for further details.

This article first appeared on GuruFocus.