OneWater Marine Inc. Reports Mixed Fiscal Q1 2024 Results Amidst Market Challenges
Revenue: Slight decrease of 0.7% to $364 million in Q1 2024 from $366.7 million in Q1 2023.
Same-Store Sales: Achieved a 2% increase despite a more competitive sales environment.
Gross Profit Margin: Declined to 25.1%, a decrease of 490 basis points from the previous year.
Net Loss: Reported a GAAP net loss of $(8) million, or $(0.49) per diluted share.
Adjusted EBITDA: Decreased significantly by 76.6% to $7.1 million.
Liquidity: Total liquidity, including cash and availability under credit facilities, was over $65.0 million.
Inventory: Increased to $706.8 million, reflecting traditional seasonal inventory buildup.
On February 1, 2024, OneWater Marine Inc (NASDAQ:ONEW) released its 8-K filing, detailing the fiscal first quarter results for the period ending December 31, 2023. The company, a prominent recreational marine retailer in the United States, operates across two segments: Dealerships and Distribution, with a revenue profile that includes new and pre-owned boat sales, finance and insurance products, and repair and maintenance services.
Financial Performance and Market Position
OneWater Marine Inc (NASDAQ:ONEW) reported a marginal revenue decline of 0.7% year-over-year, amounting to $364 million in the fiscal first quarter of 2024. This slight decrease is attributed to various factors, including a competitive sales environment and a shift in consumer preferences towards larger boat offerings during the winter months. Despite these challenges, the company managed to achieve a 2% increase in same-store sales, signaling resilience and an ability to gain market share.
However, the company faced a contraction in gross profit margin, which fell to 25.1% from the previous year's figure, primarily due to a shift in the volume and mix of boats sold, as well as lower revenue from higher margin businesses. Selling, general, and administrative expenses also increased as a percentage of revenue, driven by efforts to maintain revenues, including heightened boat show-related expenses.
Challenges and Adjusted Financial Metrics
The fiscal first quarter saw OneWater Marine Inc (NASDAQ:ONEW) post a GAAP net loss of $(8) million, or $(0.49) per diluted share, a stark contrast to the net income of $11.4 million, or $0.61 per diluted share, reported in the same quarter of the previous year. The adjusted diluted loss per share stood at $(0.38), reflecting the impact of a less favorable competitive environment on finance and insurance income, as well as decreased sales in pre-owned boats and service, parts, and other segments.
Adjusted EBITDA experienced a significant decline, dropping 76.6% to $7.1 million, compared to $30.4 million in the prior year's quarter. This metric is crucial as it provides insight into the company's operational efficiency and ability to generate profits from its core business operations, excluding non-recurring items and financial structure impacts.
Liquidity, Debt, and Inventory
As of December 31, 2023, OneWater Marine Inc (NASDAQ:ONEW) maintained a healthy liquidity position, with cash and cash equivalents of $44.6 million and total liquidity exceeding $65.0 million. Inventory levels rose to $706.8 million, reflecting the seasonal pattern of building inventory during the winter months. The company's long-term debt stood at $439.8 million, with adjusted long-term net debt at 2.6 times the trailing twelve-month Adjusted EBITDA.
The company's fiscal year 2024 guidance remains unchanged, with dealership same-store sales expected to rise by low to mid-single digits and Adjusted EBITDA projected to be between $130 million and $155 million. Earnings per diluted share are anticipated to range from $3.25 to $3.75.
Conclusion
OneWater Marine Inc (NASDAQ:ONEW) continues to navigate a challenging market landscape, marked by competitive pressures and a return to traditional seasonal patterns. While the company has demonstrated an ability to grow same-store sales, the decline in gross profit margin and net loss underscore the need for strategic adjustments. Investors and stakeholders will be closely monitoring the company's performance in the coming quarters, as it strives to maintain its market position and deliver on its financial objectives.
For more detailed information, investors are encouraged to review the full 8-K filing and listen to the conference call hosted by OneWater Marine Inc (NASDAQ:ONEW).
Explore the complete 8-K earnings release (here) from OneWater Marine Inc for further details.
This article first appeared on GuruFocus.
