Workflow
OneWater(ONEW) - 2024 Q4 - Earnings Call Transcript
ONEWOneWater(ONEW)2024-11-15 04:38
Filings

Financial Data and Key Metrics Changes - Fiscal Q4 2024 revenue decreased 16% to 378millionfrom378 million from 451 million in Q4 2023, with new boat sales down 18% to 217millionandpre−ownedboatsalesdown20217 million and pre-owned boat sales down 20% to 73 million [24][30] - Gross profit decreased 24% to 91millioninQ42024comparedto91 million in Q4 2024 compared to 119 million in Q4 2023, driven by a return to pre-COVID margins and restructuring charges [26][30] - Full year 2024 net loss totaled 6millionor6 million or 0.39 per diluted share compared to a net loss of 39millionor39 million or 2.69 per diluted share in the prior year [32] Business Line Data and Key Metrics Changes - Same-store sales for the full year 2024 were down 7%, reflecting softer demand in the recreational marine market [12][29] - Revenue from service parts and other sales decreased 10% to 291millionforfiscal2024,drivenbylowersalesfromthedistributionsegment[30]MarketDataandKeyMetricsChanges−Themarineindustryfacedchallengesasdemandandpricingresettohistoricalnorms,withelevatedinventorylevelscommonacrosstheindustry[10][21]−TheFortLauderdaleboatshowreportedrecordunitsalesupdouble−digitscomparedtotheprioryear,indicatingsustainedcustomerappetitedespiteeconomicuncertainties[19]CompanyStrategyandDevelopmentDirection−Thecompanyexecutedcost−savingmeasuresinQ4,includingrationalizingbrandsandconsolidatingservicefacilities,expectingbenefitsin2025[11][35]−Thecompanyremainsfocusedondisciplinedexpensemanagementandaligninginventorywithretaildemand,withexpectationsofa10291 million for fiscal 2024, driven by lower sales from the distribution segment [30] Market Data and Key Metrics Changes - The marine industry faced challenges as demand and pricing reset to historical norms, with elevated inventory levels common across the industry [10][21] - The Fort Lauderdale boat show reported record unit sales up double-digits compared to the prior year, indicating sustained customer appetite despite economic uncertainties [19] Company Strategy and Development Direction - The company executed cost-saving measures in Q4, including rationalizing brands and consolidating service facilities, expecting benefits in 2025 [11][35] - The company remains focused on disciplined expense management and aligning inventory with retail demand, with expectations of a 10% decrease in inventory next year [21][33] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism for 2025, anticipating total sales between 1.7 billion and 1.85billion,withsame−storesalesexpectedtoincreaseinthelow−singledigits[35]−TheimpactofHurricanesHeleneandMiltonisexpectedtoaffectsalesrecovery,withmanagementnotingthatcustomersmaytaketimetoreturntothemarket[39][62]OtherImportantInformation−TotalliquidityasofSeptember30,2024,was1.85 billion, with same-store sales expected to increase in the low-single digits [35] - The impact of Hurricanes Helene and Milton is expected to affect sales recovery, with management noting that customers may take time to return to the market [39][62] Other Important Information - Total liquidity as of September 30, 2024, was 30 million, including 17 million in cash [33] - The company is actively monitoring the M&A market, with a pipeline of opportunistic transactions that meet financial criteria [14][52] Q&A Session Summary Question: What was the impact on revenue and EBITDA in the quarter from Hurricane Helene? - Management estimated the impact to be in the 30 million range, with some sales being recouped on the East Coast of Florida [37] Question: How does management view the state of the boat consumer? - Management noted a positive sentiment at the Fort Lauderdale show, indicating a shift in consumer confidence despite economic uncertainties [44][46] Question: Why did same-store sales lag the industry? - Management attributed the lag to geographic concentration in Florida and the impact of hurricanes, which affected service and retail operations [50] Question: What is the outlook for gross margins in fiscal 2025? - Management expressed cautious optimism for margin improvement as inventory issues are resolved, but noted that promotional activities may still affect margins [54][58] Question: What are the expectations for cash uses and M&A flexibility? - Management indicated that they continue to look for acquisitions with minimal capital outlay while working to reduce debt [51][52]