QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
(State or other jurisdiction of incorporation or organization)
|
(IRS Employer Identification No.)
|
|
(Address of principal executive offices)
|
(Zip code)
|
Title of Each Class
|
Trading Symbol(s)
|
Name of Each Exchange on Which Registered
|
||
|
|
|
Large accelerated filer
|
☐
|
|
Non-accelerated filer
|
☐
|
Smaller reporting company
|
Emerging growth company
|
|
|
|
3
|
||
5 |
||
Item 1.
|
5 |
|
|
5 |
|
|
6 |
|
Condensed Consolidated Statements of Comprehensive Income for the Three Months Ended December 31, 2022 and December 31, 2021 | 7 |
|
|
8 |
|
|
9 |
|
|
10 |
|
Item 2.
|
24 |
|
Item 3.
|
36 |
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Item 4.
|
37 |
|
37 | ||
Item 1.
|
37 | |
Item 1A.
|
37 | |
Item 2.
|
37 | |
Item 3.
|
37 | |
Item 4.
|
37 | |
Item 5.
|
37 | |
Item 6.
|
38 |
•
|
general economic conditions, including changes in employment levels, rates of inflation, consumer demand, preferences and confidence levels, fuel prices, levels of discretionary income, consumer spending patterns and uncertainty
regarding the timing, pace and extent of an economic recovery in the United States;
|
•
|
economic conditions in certain geographic regions in which we primarily generate our revenue;
|
•
|
credit markets and the availability and cost of borrowed funds;
|
•
|
our business strategy, including acquisitions and Dealership same-store growth;
|
•
|
our ability to integrate acquisitions;
|
•
|
competition;
|
•
|
our ability to maintain our relationships with manufacturers, including meeting the requirements of our dealer agreements and receiving the benefits of certain manufacturer incentives;
|
•
|
demand for our products and our ability to maintain acceptable pricing for our products and services, including financing, insurance and extended service contracts;
|
•
|
effects of an inflationary environment on the cost of the products we sell and personnel and other expenses that are incurred within our operations;
|
•
|
our ability to finance working capital and capital expenditures;
|
•
|
our operating cash flows, the availability of capital and our liquidity;
|
•
|
our future revenue, Dealership same-store sales, income, financial condition, and operating performance;
|
•
|
our ability to sustain and improve our utilization, revenue and margins;
|
•
|
seasonality and inclement weather such as hurricanes, severe storms, fire and floods, generally and in certain geographic regions in which we primarily generate our revenue;
|
•
|
any potential tax savings we may realize as a result of our organizational structure;
|
•
|
our future operating results and profitability;
|
•
|
our ability to integrate the operations of Ocean Bio-Chem, Inc. (“Ocean Bio-Chem”) with our existing operations and fully realize the expected synergies of the Ocean Bio-Chem acquisition or on the expected timeline; and
|
•
|
plans, objectives, expectations and intentions contained in this Form 10-Q that are not historical.
|
•
|
decline in demand for our products and services;
|
•
|
the effects of the novel coronavirus (“COVID-19”) pandemic on the Company’s business;
|
•
|
other risks associated with the COVID-19 pandemic including, among others, the ability to safely operate our locations, access to inventory and customer demand;
|
•
|
the seasonality and volatility of the boat industry;
|
•
|
global public health concerns, including the COVID-19 pandemic;
|
•
|
general domestic and
international political and regulatory conditions, including changes in tax or fiscal policy and the effects of current restrictions on various commercial and economic activities in response to the COVID-19 pandemic;
|
•
|
environmental conditions and real or perceived human health or safety risks;
|
•
|
our acquisition strategies and our ability to integrate additional marine retailers;
|
•
|
effects of industry wide supply chain challenges and our ability to manage our inventory;
|
•
|
our ability to retain key personnel and the effects of labor shortages;
|
•
|
the inability to comply with the financial and other covenants and metrics in our credit facilities;
|
•
|
cash flow and access to capital;
|
•
|
the timing of development expenditures; and
|
•
|
the other risks described under “Risk Factors” and discussed elsewhere in our Annual Report on Form 10-K for the year ended September 30, 2022 and discussed elsewhere in this Quarterly Report on Form 10-Q.
|
Item 1. |
Condensed Consolidated
Financial Statements (Unaudited)
|
December 31,
2022
|
September 30,
2022 |
|||||||
Assets
|
||||||||
Current assets:
|
||||||||
Cash
|
$
|
|
$
|
|
||||
Restricted cash
|
|
|
||||||
Accounts receivable, net
|
|
|
||||||
Inventories, net
|
|
|
||||||
Prepaid expenses and other current assets
|
|
|
||||||
Total current assets
|
|
|
||||||
Property and equipment, net
|
|
|
||||||
Operating lease right-of-use assets |
||||||||
Other assets:
|
||||||||
Other assets
|
|
|
||||||
Deferred tax assets, net
|
|
|
||||||
Intangible assets, net
|
|
|
||||||
Goodwill
|
|
|
||||||
Total other assets
|
|
|
||||||
Total assets
|
$
|
|
$
|
|
||||
Liabilities and Stockholders’ Equity
|
||||||||
Current liabilities:
|
||||||||
Accounts payable
|
$
|
|
$
|
|
||||
Other payables and accrued expenses
|
|
|
||||||
Customer deposits
|
|
|
||||||
Notes payable – floor plan
|
|
|
||||||
Current portion of operating lease liabilities
|
||||||||
Current portion of long-term debt, net
|
|
|
||||||
Current portion of tax receivable agreement liability
|
|
|
||||||
Total current liabilities
|
|
|
||||||
Long-term Liabilities:
|
||||||||
Other long-term liabilities
|
|
|
||||||
Tax receivable agreement liability
|
|
|
||||||
Noncurrent operating lease liabilities | ||||||||
Long-term debt, net
|
|
|
||||||
Total liabilities |
||||||||
Stockholders’ Equity:
|
||||||||
Preferred stock, $
|
|
|
||||||
Class A common stock, $
|
|
|
||||||
Class B common stock, $
|
|
|
||||||
Additional paid-in capital
|
|
|
||||||
Retained earnings
|
|
|
||||||
Accumulated other comprehensive income (loss) |
( |
) | ||||||
Total stockholders’ equity attributable to OneWater Marine Inc.
|
|
|
||||||
Equity attributable to non-controlling interests
|
|
|
||||||
Total stockholders’ equity
|
|
|
||||||
Total liabilities and stockholders’ equity
|
$
|
|
$
|
|
Three Months Ended
December 31,
|
||||||||
2022
|
2021
|
|||||||
Revenues
|
||||||||
New boat
|
$ | $ | ||||||
Pre-owned boat
|
||||||||
Finance & insurance income
|
||||||||
Service, parts & other
|
||||||||
Total revenues
|
||||||||
Cost of sales (exclusive of depreciation and amortization shown separately below)
|
||||||||
New boat
|
||||||||
Pre-owned boat
|
||||||||
Service, parts & other
|
||||||||
Total cost of sales
|
||||||||
Selling, general and administrative expenses
|
||||||||
Depreciation and amortization
|
||||||||
Transaction costs
|
||||||||
Change in fair value of contingent consideration
|
( |
) | ||||||
Income from operations
|
||||||||
Other expense (income)
|
||||||||
Interest expense – floor plan
|
||||||||
Interest expense – other
|
||||||||
Other (income) expense, net
|
( |
) | ||||||
Total other expense, net
|
||||||||
Income before income tax expense
|
||||||||
Income tax expense
|
||||||||
Net income
|
||||||||
Less: Net income attributable to non-controlling interests |
( |
) | ||||||
Less: Net income attributable to non-controlling interests of One Water Marine Holdings, LLC
|
( |
) | ( |
) | ||||
Net income attributable to OneWater Marine Inc.
|
$ | $ | ||||||
Earnings per share of Class A common stock – basic
|
$ | $ | ||||||
Earnings per share of Class A common stock – diluted
|
$ | $ | ||||||
Basic weighted-average shares of Class A common stock outstanding
|
||||||||
Diluted weighted-average shares of Class A common stock outstanding
|
For the Three Months Ended
December 31,
|
||||||||
2022
|
2021
|
|||||||
Net income
|
$
|
|
$
|
|
||||
Other comprehensive income:
|
||||||||
Foreign currency translation adjustment
|
|
|
||||||
Comprehensive income
|
|
|
||||||
Less: Net income attributable to non-controlling interests
|
(
|
)
|
|
|||||
Less: Net income attributable to non-controlling interests of One Water Marine Holdings, LLC
|
(
|
)
|
(
|
)
|
||||
Foreign currency translation adjustment attributable to non-controlling interest of One Water Marine Holdings, LLC
|
(
|
)
|
|
|||||
Comprehensive income attributable to One Water Marine Holdings, Inc.
|
$
|
|
$
|
|
Class A Common Stock
|
Class B Common Stock
|
|||||||||||||||||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
Additional Paid-in Capital
|
Retained Earnings
|
Non-controlling Interest
|
Accumulated Other
Comprehensive Income (Loss) |
Total Stockholders’ Equity
|
||||||||||||||||||||||||||||
Balance at September 30, 2022
|
|
$
|
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$ | ( |
) |
$
|
|
|||||||||||||||||||
Net income
|
-
|
|
-
|
|
|
|
|
|
||||||||||||||||||||||||||||
Distributions to members
|
-
|
|
-
|
|
|
(
|
)
|
(
|
)
|
(
|
)
|
|||||||||||||||||||||||||
Shares issued upon vesting of equity-based awards, net of tax withholding
|
|
|
|
|
(
|
)
|
|
|
(
|
)
|
||||||||||||||||||||||||||
Equity-based compensation
|
-
|
|
-
|
|
|
|
|
|
||||||||||||||||||||||||||||
Currency translation adjustment
|
- | - | ||||||||||||||||||||||||||||||||||
Balance at December 31, 2022
|
|
$
|
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$ |
$
|
|
Class A Common Stock
|
Class B Common Stock
|
|||||||||||||||||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
Additional Paid-in Capital
|
Retained Earnings
|
Non-controlling Interest
|
Accumulated Other
Comprehensive Income (Loss) |
Total Stockholders’ Equity
|
||||||||||||||||||||||||||||
Balance at September 30, 2021
|
|
$
|
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$ |
$
|
|
|||||||||||||||||||||
Net income
|
-
|
|
-
|
|
|
|
|
|
||||||||||||||||||||||||||||
Distributions to members
|
-
|
|
-
|
|
|
(
|
)
|
(
|
)
|
(
|
)
|
|||||||||||||||||||||||||
Non-controlling interest in subsidiary
|
-
|
|
-
|
|
|
|
|
|
||||||||||||||||||||||||||||
Exchange of B shares for A shares
|
|
|
(
|
)
|
(
|
)
|
|
|
(
|
)
|
|
|||||||||||||||||||||||||
Establishment of liabilities under tax receivable agreement and related changes to deferred tax assets associated with increases in tax basis
|
-
|
|
-
|
|
(
|
)
|
|
|
(
|
)
|
||||||||||||||||||||||||||
Shares issued upon vesting of equity-based awards, net of tax withholding
|
|
|
|
|
(
|
)
|
|
|
(
|
)
|
||||||||||||||||||||||||||
Shares issued in connection with a business combination
|
||||||||||||||||||||||||||||||||||||
Equity-based compensation
|
-
|
|
-
|
|
|
|
|
|
||||||||||||||||||||||||||||
Balance at December 31, 2021
|
|
$
|
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$ |
$
|
|
For the Three Months Ended December 31
|
2022
|
2021 | ||||||
Cash flows from operating activities
|
||||||||
Net income
|
$
|
|
$
|
|
||||
Adjustments to reconcile net income to net cash used in operating activities:
|
||||||||
Depreciation and amortization
|
|
|
||||||
Equity-based awards
|
|
|
||||||
Loss (gain) on asset disposals
|
|
(
|
)
|
|||||
Non-cash interest expense
|
|
|
||||||
Deferred income tax provision
|
|
|
||||||
Change in fair value of contingent consideration
|
( |
) | ||||||
Loss on equity investment
|
||||||||
(Increase) decrease in assets:
|
||||||||
Accounts receivable
|
(
|
)
|
|
|||||
Inventories
|
(
|
)
|
(
|
)
|
||||
Prepaid expenses and other current assets
|
|
|
||||||
Other assets
|
(
|
)
|
(
|
)
|
||||
Increase (decrease) in liabilities:
|
||||||||
Accounts payable
|
(
|
)
|
|
|||||
Other payables and accrued expenses
|
(
|
)
|
(
|
)
|
||||
Tax receivable agreement liability
|
||||||||
Customer deposits
|
(
|
)
|
|
|||||
Net cash used in operating activities
|
(
|
)
|
(
|
)
|
||||
Cash flows from investing activities
|
||||||||
Purchases of property and equipment and construction in progress
|
(
|
)
|
(
|
)
|
||||
Proceeds from disposal of property and equipment
|
|
|
||||||
Cash used in acquisitions, net of cash acquired
|
(
|
)
|
(
|
)
|
||||
Net cash used in investing activities
|
(
|
)
|
(
|
)
|
||||
Cash flows from financing activities
|
||||||||
Net borrowings from floor plan
|
|
|
||||||
Proceeds from long-term debt
|
|
|
||||||
Payments on long-term debt
|
(
|
)
|
(
|
)
|
||||
Payments of debt issuance costs
|
|
(
|
)
|
|||||
Payments of contingent consideration |
( |
) | ||||||
Payments of tax withholdings for equity-based awards
|
(
|
)
|
( |
) | ||||
Distributions to members
|
(
|
)
|
(
|
)
|
||||
Net cash provided by financing activities
|
|
|
||||||
Effects of exchange rate changes on cash and restricted cash |
||||||||
Net change in cash
|
(
|
)
|
|
|||||
Cash and restricted cash at beginning of period
|
|
|
||||||
Cash and restricted cash at end of period
|
$
|
|
$
|
|
||||
Supplemental cash flow disclosures
|
||||||||
Cash paid for interest
|
$
|
|
$
|
|
||||
Cash paid for income taxes
|
|
|
||||||
Noncash items
|
||||||||
Acquisition purchase price funded by seller notes payable
|
$
|
|
$
|
|
||||
Acquisition purchase price funded by contingent consideration
|
|
|
||||||
Accrued purchase consideration |
||||||||
Acquisition purchase price funded by issuance of Class A common stock
|
||||||||
Purchase of property and equipment funded by long-term debt
|
|
|
||||||
Right-of-use assets obtained in exchange for new operating lease liabilities | ||||||||
Acquisition purchase price funded by affiliate financing |
||||||||
Settlement of affiliate financing with proceeds from sale and leaseback |
1. |
Description of Company and Basis of Presentation
|
2. |
Summary of Significant Accounting Policies
|
($ in thousands)
|
Three Months Ended
December 31, 2022
|
|||
Beginning contract liability
|
$
|
|
||
Revenue recognized from contract
liabilities included in the beginning balance
|
(
|
)
|
||
Increases due to business combinations
and cash received, net of amounts recognized in revenue during the period
|
|
|||
Ending contract liability
|
$
|
|
Three Months Ended
December 31, 2022
|
Three Months Ended
December 31, 2021
|
|||||||
Goods and services transferred at a point
in time
|
|
%
|
|
%
|
||||
Goods and services transferred over time
|
|
%
|
|
%
|
||||
Total Revenue
|
|
%
|
|
%
|
3. |
New Accounting Pronouncements
|
4. |
Acquisitions
|
•
|
On October 1, 2022, Taylor Marine Centers with locations in Maryland and Delaware
|
•
|
On December 1, 2022, Harbor View Marine with locations in Alabama and Florida
|
Summary of Assets Acquired and Liabilities Assumed
($ in thousands)
|
Total Acquisitions
|
|||
Accounts receivable
|
$
|
|
||
Inventories
|
|
|||
Prepaid expenses
|
|
|||
Property and equipment
|
|
|||
Operating lease right-of-use assets
|
|
|||
Identifiable intangible assets
|
|
|||
Goodwill
|
|
|||
Accounts payable
|
(
|
)
|
||
Accrued expenses
|
(
|
)
|
||
Customer deposits
|
(
|
)
|
||
Notes payable - floor plan | ( |
) | ||
Operating lease liabilities
|
(
|
)
|
||
Aggregate acquisition date fair value
|
$
|
|
||
Consideration transferred
|
$
|
|
Three Months Ended
December 31, 2022
|
Three Months Ended
December 31, 2021
|
|||||||
($ in thousands) | ||||||||
(Unaudited)
|
||||||||
Pro forma revenue
|
$ |
$
|
|
|||||
Pro forma net income
|
$ |
$
|
|
5.
|
Accounts Receivable
|
($ in thousands)
|
December 31, 2022
|
September 30, 2022
|
||||||
Trade accounts receivable
|
$
|
|
$
|
|
||||
Contracts in transit
|
|
|
||||||
Manufacturer receivable
|
|
|
||||||
Total accounts receivable
|
|
|
||||||
Less – allowance for credit losses
|
(
|
)
|
(
|
)
|
||||
Total accounts receivable, net
|
$
|
|
$
|
|
6. |
Inventories
|
($ in thousands)
|
December 31, 2022
|
September 30, 2022
|
||||||
New vessels
|
$
|
|
$
|
|
||||
Pre-owned vessels
|
|
|
||||||
Work in process, parts and accessories
|
|
|
||||||
$
|
|
$
|
|
7. |
Goodwill and Other Identifiable Intangible Assets
|
($ in thousands)
|
Goodwill
Unamortized
|
Trade Names
Unamortized
|
Developed technologies Amortized |
Customer Relationships
Amortized
|
Domain Names Amortized |
Internally Developed
Software Amortized |
Total
Intangible
Assets, net
|
|||||||||||||||||||||
Net balance as of September 30, 2022
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Acquisitions during the three months ended December 31, 2022
|
|
|
|
|
||||||||||||||||||||||||
Accumulated amortization for the three months ended December 31, 2022
|
-
|
-
|
( |
) |
(
|
)
|
( |
) | ( |
) |
(
|
)
|
||||||||||||||||
Net balance as of December 31, 2022
|
$
|
|
$
|
|
$ |
$
|
|
$ |
$ |
$
|
|
2023 (excluding the three months ended December 31, 2022)
|
$
|
|
||
2024
|
|
|||
2025
|
|
|||
2026
|
|
|||
2027
|
|
|||
Thereafter
|
|
|||
$
|
|
8. |
Notes Payable — Floor Plan
|
9. |
Long-term Debt and Line of Credit
|
($ in thousands)
|
December 31,
2022
|
September 30,
2022
|
||||||
Term note payable to Truist Bank, secured
and bearing interest at
|
$
|
|
$
|
|
||||
Revolving note payable for an amount up
to $
|
|
|
||||||
Notes payable to commercial vehicle
lenders secured by the value of the vehicles bearing interest at rates ranging from
|
|
|
||||||
Note payable to Tom George Yacht Group,
unsecured and bearing interest at
|
|
|
||||||
Note payable to Norfolk Marine Company,
unsecured and bearing interest at
|
|
|
||||||
Total debt outstanding
|
|
|
||||||
Less current portion (net of debt
issuance costs)
|
(
|
)
|
(
|
)
|
||||
Less unamortized portion of debt issuance
costs
|
(
|
)
|
(
|
)
|
||||
Long-term debt, net of current portion and
unamortized debt issuance costs
|
$
|
|
$
|
|
10. |
Stockholders’ and Members’ Equity
|
Restricted Stock Unit Awards
|
||||||||
Number of
Shares
|
Weighted Average
Grant Date Fair Value
($)
|
|||||||
Unvested at September 30, 2022
|
|
$
|
|
|||||
Awarded
|
|
|
||||||
Vested
|
(
|
)
|
|
|||||
Forfeited
|
(
|
)
|
|
|||||
Unvested at December 31, 2022
|
|
$
|
|
Earnings per share:
|
Three Months Ended
December 31, 2022
|
Three Months Ended
December 31, 2021
|
||||||
Numerator:
|
||||||||
Net income attributable to OneWater Inc.
|
$
|
|
$
|
|
||||
Denominator:
|
||||||||
Weighted-average number of unrestricted
outstanding common shares used to calculate basic net income per share
|
|
|
||||||
Effect of dilutive securities:
|
||||||||
Restricted stock units
|
|
|
||||||
Employee Stock Purchase Plan | ||||||||
Diluted weighted-average shares of Class A
common stock outstanding used to calculate diluted earnings per share
|
|
|
||||||
Earnings per share of
Class A common stock – basic
|
$
|
|
$
|
|
||||
Earnings per share of
Class A common stock – diluted
|
$
|
|
$
|
|
Three Months Ended
December 31, 2022
|
Three Months Ended
December 31, 2021
|
|||||||
Class B common stock
|
|
|
||||||
Restricted Stock Units
|
|
|
||||||
|
|
2022
|
||||
Dividend yield
|
|
%
|
||
Risk-free interest rate
|
|
%
|
||
Volatility
|
|
%
|
||
Expected life
|
|
11. |
Fair Value Measurements
|
December 31, 2022
|
||||||||||||||||
Level 1
|
Level 2
|
Level 3
|
Total
|
|||||||||||||
($ in thousands)
|
||||||||||||||||
Assets: | ||||||||||||||||
Investment in Equity Securities
|
$ | $ | $ | $ | ||||||||||||
Liabilities:
|
||||||||||||||||
Contingent Consideration
|
|
|
|
|
September 30, 2022
|
||||||||||||||||
Level 1
|
Level 2
|
Level 3
|
Total
|
|||||||||||||
($ in thousands)
|
||||||||||||||||
Assets: | ||||||||||||||||
Investment in Equity Securities
|
$ | $ | $ | $ | ||||||||||||
Liabilities:
|
||||||||||||||||
Contingent Consideration
|
|
|
|
|
|
|
|
|
($ in thousands)
|
Three Months Ended
December 31, 2022
|
|||
Net losses recognized during the period on equity securities
|
$
|
|
||
Less net losses recognized during the period on equity securities sold during the period
|
|
|||
Unrealized losses recognized during the reporting period on equity securities still held at the reporting date
|
$
|
|
($ in thousands)
|
Contingent Consideration
|
|||
Balance as of September 30, 2022
|
$
|
|
||
Additions from acquisitions
|
|
|||
Settlement of contingent consideration
|
(
|
)
|
||
Change in fair value, including accretion
|
(
|
)
|
||
Balance as of December 31, 2022
|
$
|
|
12. |
Income Taxes
|
13. |
Contingencies and
Commitments
|
14. |
Leases
|
15. |
Related Party Transactions
|
16.
|
Segment Information
|
As of and for the Three Months Ended December 31, 2022
|
||||||||||||
($ in thousands)
|
Dealerships
|
Distribution
|
Total
|
|||||||||
Revenue
|
$
|
|
$
|
|
$
|
|
||||||
Income (loss) from operations
|
|
(
|
)
|
|
||||||||
Depreciation and amortization
|
|
|
|
|||||||||
Transaction costs
|
|
|
|
|||||||||
Change in fair value of contingent consideration
|
(
|
)
|
|
(
|
)
|
|||||||
Total assets
|
|
|
|
Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
•
|
Effective October 1, 2022, we acquired Taylor Marine Centers, a full-service marine retailer with locations in Maryland and Delaware.
|
•
|
Effective December 1, 2022, we acquired Harbor View Marine, a full-service marine retailer with locations in Florida and Alabama.
|
•
|
Effective October 1, 2021, we acquired Naples Boat Mart, a full-service marine retailer with one location in Florida.
|
•
|
Effective November 30, 2021, we acquired T-H Marine, a leading provider of branded marine parts and accessories for OEMs and the aftermarket, with locations in Alabama, Florida, Illinois, Indiana, Oklahoma and Texas.
|
•
|
Effective December 1, 2021, we acquired Norfolk Marine Company, a full-service marine retailer with one location in Virginia.
|
•
|
Effective December 31, 2021, we acquired a majority interest in Quality Boats, a full-service marine retailer with three locations in Florida.
|
•
|
Effective February 1, 2022 we acquired JIF Marine, a leading supplier of stainless steel ladders, dock products and other accessories which is based in Tennessee.
|
•
|
Effective March 1, 2022, we acquired YakGear, a leading supplier of kayak equipment, paddle sport accessories and boat mounting accessories which is based in Texas.
|
•
|
Effective April 1, 2022, we acquired Denison Yachting, a leader in yacht and superyacht sales as well as ancillary yacht services, with 20 retail locations.
|
•
|
Effective August 9, 2022, we acquired Ocean Bio-Chem, including Star Brite Europe, Inc., a leading supplier and distributor of appearance, cleaning and maintenance products for the marine industry and the automotive, powersports,
recreational vehicles, and outdoor power equipment markets with locations in Alabama and Florida.
|
•
|
OneWater Inc. is subject to U.S. federal, state and local income taxes as a corporation. Our accounting predecessor, OneWater LLC, was and is treated as a partnership for U.S. federal income tax
purposes, and as such, was generally not subject to U.S. federal income tax at the entity level. Rather, the tax liability with respect to its taxable income is passed through to its members. Accordingly, the financial data
attributable to our predecessor contains no provision for U.S. federal income taxes or income taxes in any state or locality. OneWater Inc.’s effective tax rates were 22.8% and 17.2% for the three months ended December 31, 2022 and
2021, respectively.
|
•
|
As we further implement controls, processes and infrastructure applicable to companies with publicly traded equity securities, it is likely that we will incur additional selling, general, and
administrative expenses relative to historical periods. Our future results will depend on our ability to efficiently manage our combined operations and execute our business strategy.
|
|
For the three months
ended December 31, 2022
|
For the three months
ended December 31, 2021
|
||||||||||||||||||||||
|
Amount
|
% of Revenue
|
Amount
|
% of Revenue
|
$ Change
|
% Change
|
||||||||||||||||||
($ in thousands)
|
||||||||||||||||||||||||
Revenues
|
||||||||||||||||||||||||
New boat
|
$
|
232,405
|
63.4
|
%
|
$
|
236,198
|
70.2
|
%
|
$
|
(3,793
|
)
|
-1.6
|
%
|
|||||||||||
Pre-owned boat
|
55,778
|
15.2
|
%
|
53,449
|
15.9
|
%
|
2,329
|
4.4
|
%
|
|||||||||||||||
Finance & insurance income
|
8,934
|
2.4
|
%
|
9,307
|
2.8
|
%
|
(373
|
)
|
-4.0
|
%
|
||||||||||||||
Service, parts and other
|
69,542
|
19.0
|
%
|
37,318
|
11.1
|
%
|
32,224
|
86.3
|
%
|
|||||||||||||||
Total revenues
|
366,659
|
100.0
|
%
|
336,272
|
100.0
|
%
|
30,387
|
9.0
|
%
|
|||||||||||||||
Gross Profit
|
||||||||||||||||||||||||
New boat
|
57,147
|
15.6
|
%
|
60,302
|
17.9
|
%
|
(3,155
|
)
|
-5.2
|
%
|
||||||||||||||
Pre-owned boat
|
15,474
|
4.2
|
%
|
14,079
|
4.2
|
%
|
1,395
|
9.9
|
%
|
|||||||||||||||
Finance & insurance
|
8,934
|
2.4
|
%
|
9,307
|
2.8
|
%
|
(373
|
)
|
-4.0
|
%
|
||||||||||||||
Service, parts & other
|
28,433
|
7.8
|
%
|
17,277
|
5.1
|
%
|
11,156
|
64.6
|
%
|
|||||||||||||||
Total gross profit
|
109,988
|
30.0
|
%
|
100,965
|
30.0
|
%
|
9,023
|
8.9
|
%
|
|||||||||||||||
Selling, general and administrative expenses
|
77,838
|
21.2
|
%
|
59,096
|
17.6
|
%
|
18,742
|
31.7
|
%
|
|||||||||||||||
Depreciation and amortization
|
5,693
|
1.6
|
%
|
1,749
|
0.5
|
%
|
3,944
|
225.5
|
%
|
|||||||||||||||
Transaction costs
|
1,330
|
0.4
|
%
|
3,045
|
0.9
|
%
|
(1,715
|
)
|
-56.3
|
%
|
||||||||||||||
Change in fair value of contingent consideration
|
(1,409
|
)
|
-0.4
|
%
|
5,746
|
1.7
|
%
|
(7,155
|
)
|
-124.5
|
%
|
|||||||||||||
Income from operations
|
26,536
|
7.2
|
%
|
31,329
|
9.3
|
%
|
(4,793
|
)
|
-15.3
|
%
|
||||||||||||||
Interest expense - floor plan
|
4,779
|
1.3
|
%
|
877
|
0.3
|
%
|
3,902
|
444.9
|
%
|
|||||||||||||||
Interest expense - other
|
7,584
|
2.1
|
%
|
1,529
|
0.5
|
%
|
6,055
|
396.0
|
%
|
|||||||||||||||
Other (income) expense, net
|
(639
|
)
|
-0.2
|
%
|
548
|
0.2
|
%
|
(1,187
|
)
|
-216.6
|
%
|
|||||||||||||
Income before income tax expense
|
14,812
|
4.0
|
%
|
28,375
|
8.4
|
%
|
(13,563
|
)
|
-47.8
|
%
|
||||||||||||||
Income tax expense
|
3,384
|
0.9
|
%
|
4,889
|
1.5
|
%
|
(1,505
|
)
|
-30.8
|
%
|
||||||||||||||
Net income
|
11,428
|
3.1
|
%
|
23,486
|
7.0
|
%
|
(12,058
|
)
|
-51.3
|
%
|
||||||||||||||
Less: Net income attributable to non-controlling interests
|
(1,365
|
)
|
-
|
|||||||||||||||||||||
Less: Net income attributable to non-controlling interests of One Water Marine Holdings, LLC
|
(1,163
|
)
|
(3,467
|
)
|
||||||||||||||||||||
Net income attributable to One Water Marine Inc.
|
$
|
8,900
|
$
|
20,019
|
Three months ended December 31,
|
||||||||
Description
|
2022
|
2021
|
||||||
($ in thousands)
|
||||||||
Net income
|
$
|
11,428
|
$
|
23,486
|
||||
Interest expense – other
|
7,584
|
1,529
|
||||||
Income tax expense
|
3,384
|
4,889
|
||||||
Depreciation and amortization
|
6,182
|
1,749
|
||||||
Change in fair value of contingent consideration
|
(1,409
|
)
|
5,746
|
|||||
Transaction costs
|
1,330
|
3,045
|
||||||
Other (income) expense, net
|
(639
|
)
|
548
|
|||||
Adjusted EBITDA
|
$
|
27,860
|
$
|
40,992
|
Three Months ended December 31, | ||||||||||||
Description
|
2022
|
2021
|
Change
|
|||||||||
($ in thousands)
|
||||||||||||
Net cash used in operating activities
|
$
|
(138,050
|
)
|
$
|
(22,825
|
)
|
$
|
(115,225
|
)
|
|||
Net cash used in investing activities
|
(34,980
|
)
|
(282,220
|
)
|
247,240
|
|||||||
Net cash provided by financing activities
|
170,280
|
305,865
|
(135,585
|
)
|
||||||||
Effect of exchange rate changes on cash and restricted cash
|
11
|
-
|
11
|
|||||||||
Net change in cash
|
$
|
(2,739
|
)
|
$
|
820
|
$
|
(3,559
|
)
|
Item 3. |
Quantitative and Qualitative Disclosure about Market Risk
|
Item 4. |
Controls and Procedures
|
Item 1. |
Legal Proceedings
|
Item 1A. |
Risk Factors
|
Item 2. |
Unregistered Sales of Equity Securities and Use of Proceeds
|
Item 3. |
Defaults Upon Senior Securities
|
Item 4. |
Mine Safety Disclosures
|
Item 6. |
Exhibits
|
Exhibit No.
|
Description
|
Second Amended and Restated Certificate of Incorporation of OneWater Marine Inc. (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K, File No. 001-39213, filed with
the Commission on February 24, 2022).
|
|
Second Amended and Restated Bylaws of OneWater Marine Inc. (incorporated by reference to Exhibit 3.2 to the Registrant’s Current Report on Form 8-K, File No. 001-39213, filed with the Commission on
February 24, 2022).
|
|
Certification of the Chief Executive Officer required by Rule 13a-14(a) or Rule 15d-14(a).
|
|
Certification of the Chief Financial Officer required by Rule 13a-14(a) or Rule 15d-14(a).
|
|
Certification of the Chief Executive Officer required by Rule 13a-14(b) or Rule 15d-14(b) and 18 U.S.C. 1350.
|
Certification of the Chief Financial Officer required by Rule 13a-14(b) or Rule 15d-14(b) and 18 U.S.C. 1350.
|
|
101.INS(a)
|
Inline XBRL Instance Document.
|
101.SCH(a)
|
Inline XBRL Schema Document.
|
101.CAL(a)
|
Inline XBRL Calculation Linkbase Document.
|
101.DEF(a)
|
Inline XBRL Definition Linkbase Document.
|
101.LAB(a)
|
Inline XBRL Labels Linkbase Document.
|
101.PRE(a)
|
Inline XBRL Presentation Linkbase Document.
|
104
|
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).
|
*
|
Filed herewith.
|
**
|
Furnished herewith.
|
ONEWATER MARINE INC.
|
||
(Registrant)
|
||
By:
|
/s/ Philip Austin Singleton, Jr.
|
|
Philip Austin Singleton, Jr.
|
||
Chief Executive Officer
|
||
By:
|
/s/ Jack Ezzell
|
|
Jack Ezzell
|
||
Chief Financial Officer
|
||
February 3, 2023
|