Q1 2022 OneWater Marine Inc Earnings Call
Good day, and thank you for standing by welcome to the one water Marine fiscal first quarter 2022 earnings conference call. At this time all participants are in a listen only mode. After the speaker presentation.
Speaker 1: Good day and thank you for sending by. Welcome to the one-water marine fiscal first quarter, 2022, earnings conference call.
Speaker 2: At this time, all participants are not listening only mode. After the speaker presentation, there will be a question and suggestion. As a question during a session, you will need to press star one on your telephone. If you require any further assistance,
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Speaker 3: Please press star zero. I want to add a conference over to your speaker today, Jack Azale, Chief Financial Officer. Please go ahead.
And the conference over to your Speaker today, Jack Xu Chief Financial Officer. Please go ahead.
Speaker 4: Good morning and welcome to One Water Marines, fiscal first quarter, 2022, earnings conference call. I am joined on the call today by Austin Singleton, Chief Executive Officer, and Anthony asked with President and Chief Operating Officer.
Good morning, and welcome to one water Marine fiscal first quarter 2022 earnings Conference call I am joined on the call today by Austin, Singleton, Chief Executive Officer, and Anthony Asquith, President and Chief operating Officer.
Speaker 5: Before we begin, I'd like to remind you that certain statements made by management in this morning's conference call regarding one water marine and its operations may be considered forward-looking statements under security's law and involve a number of risk and uncertainties.
Before we begin I'd like to remind you that certain statements made by management in this morning's conference call regarding one water marine and its operations may be considered forward looking statements under securities law and involve a number of risks and uncertainties. As a result, the company cautions you that there are number of factors many of which are beyond the.
Speaker 6: As a result, the company cautioned you that there are a number of factors, many of which are beyond the company's control, which could cause actual results and events to differ materially from those described in the forward-looking state.
Company's control, which could cause actual results and events to differ materially from those described in the forward looking statements.
Speaker 7: Factors that might affect future results are discussed in the company's earnings release, which can be found on the Investor Relations section of the company's website, and in its filings with the SEC.
Factors that might affect future results are discussed in the company's earnings release, which can be found on the investor Relations section of the company's website and in its filings with the SEC.
Speaker 8: The company describes any obligation or undertaking to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements are made except as required by law. And with that, I'd like to turn the call over to Austin Singleton, who will begin with a few opening remarks. Austin? Thanks, Shaq. And thank you.
The company disclaims any obligation or undertaking to update forward looking statements to reflect circumstances or events that occur. After the date. The forward looking statements are made except as required by law.
With that I'd like to turn the call over to Austin, Singleton, who will begin with a few opening remarks Austin.
Thanks, Jack and thank you everyone for joining today's call.
Speaker 9: Across the board, we delivered exceptional results for the first quarter of 2022, highlighting the strength of our team and our ability to outform the more.
Across the board, we delivered exceptional results for the first quarter of 2022, highlighting the strength of our team and our ability to outperform the market.
Revenue for the first quarter increased 57% to $336 million and even in the face of an ongoing industry wide supply chain constraints. We increased same store sales by 28% on top of an incredible 38% comp in the prior year.
Speaker 10: Revenue for the first quarter increased 57% to $336 million, and even in the face of an ongoing industry-wide supply chain constraints, we increased same-source sales by 28% on top of an incredible 38% comp in the prior year.
Speaker 11: These same store sales gains are significantly above reports on the industry growth, which suggests we are achieving market share gains.
These same store sales gains are significantly above reports on the on industry growth, which suggests we are achieving market share gains.
Speaker 12: As a part of our incredible increase in same store sales, we also saw a significant increase in our higher margin service parts and other revenue. And in the end, we delivered a Jeff and Eva da 41 million, an increase of 146%.
As a part of our incredible increase in same store sales. We also saw a significant increase in our higher margin service parts and other revenue and in the end, we delivered adjusted EBITDA of $41 million an increase of 146%.
Speaker 13: As we come up on tough same-source sales comps over the next quarter, we should see the strength of the stable revenue stream shine for us.
As we come up on tough same store sales comps over the next quarter, we should see the strength of the stable revenue stream schon for it.
Speaker 14: While we expect lower inventories to persist over the next few quarters, we're extremely confident in the prospects for the business.
While we expect lower inventories to persist over the next few quarters, we're extremely confident in the prospects for the business.
Speaker 15: We continue to see robust demand and pre-sold inventory remains elevated through yet another court.
We continue to see robust demand and pre sold inventory remains elevated through yet another quarter.
We also saw our service parts and other sales up 111% in the quarter significantly outpacing growth of both sales. This increase was driven by our recent acquisitions of parts view.
Speaker 16: We also saw our service parts and other sales of 111% in the quarter significantly outpacing growth of both.
Speaker 17: This increase was driven by recent acquisitions of parts view and TH marine that led to further diversification of our revenue.
Th marine that led to further diversification of our revenue.
Speaker 18: We expect service parts and other revenue growth to continue to outpace boat sales as we integrate these acquisitions.
We expect service parts and other revenue growth to continue to outpace boat sales as we integrate these acquisitions.
Speaker 19: And these higher margin revenue streams will also support our overall growth profit margin in the future.
And these higher margin revenue streams will also support our overall gross profit margin in the future.
We were extremely active with M&A to start the year closing three new dealership transactions and adding a significant piece to our parts and service business.
Speaker 20: We were extremely active with M&A to start the year, closing three new dealership transactions, and adding a significant piece to our parts and service business.
The dealer transactions are one waters bread and butter expand in our geographical reach for new and pre owned boat sales finance and insurance income.
Speaker 21: The deeper transactions are one-waters bread and butter. Explain in our geographical reach for new and pre-owned boat sales, finance and insurance income, and serve
Service parts and other sales these transactions will leverage <unk> expertise and platform to put.
Speaker 22: These transactions will leverage one-water expertise and platform to push newly integrated dealers to even greater height.
<unk> newly integrated dealers to even greater heights.
Earlier this week, we announced the closing of a tuck in acquisition in the parts and service space JF Marine provides complementary products and establishes us as a market leader in stainless steel ladders and docking products.
Speaker 23: Earlier this week we announced the closing of a Tuckian acquisition in the Parks and Service.
Speaker 24: JIF Marine provides complimentary products and establishes us as a market leader in stainless steel ladders and docking products.
Speaker 25: We are very excited about the synergies and opportunities to expand this less cyclical part of our business.
We are very excited about the synergies and opportunities to expand this less cyclical part of our business. We also believe there is a significant opportunity for us to grow in the future through additional parts and service tuck in acquisitions.
Speaker 26: We also believe there is a significant opportunity for us to grow in the future through additional ports and service tuck-in acquisition.
Speaker 27: Accordingly, as part of our corporate acquisition and diversification strategy, we are establishing a target to complete two to four parts and service acquisitions per year. This is an addition to our target of completing four to six dealership acquisitions.
Accordingly, as part of our corporate acquisition and diversification strategy, we are establishing a target to complete 2% to four parts and service acquisitions per year.
This is in addition to our target of leading 4% to six dealership acquisitions per year.
Speaker 28: Looking ahead, our acquisition pipeline for 2022 is robust and will continue to be a core component of our overall strength.
Looking ahead, our acquisition pipeline for 2022 is robust and will continue to be a core component of our overall strategy.
Speaker 29: While the opportunities are plentiful, we are committed to our disciplined approach selecting targets that meaningfully drive growth, diversification, and are in line with our goals. We believe our acquisition strategy significantly adds to the earning potential of the company.
While the opportunities are plentiful, we're committed to our disciplined approach selecting targets that meaningfully drive growth diversification and are in line with our goals. We believe our acquisition strategy significantly adds to the earning potential of the company.
Speaker 30: In summary, our first quarter results drove the expansion of both the top and bottom line.
In summary, our first quarter results drove the expansion of both the top and bottom line.
Speaker 31: We look forward to continuing to capture the momentum of the unrelenting customer demand and feel confident about our position to manage through the supply chain and there are no other NATO members who are inside orbit error and labelled for the serviceman.
Look forward to continuing to capture the momentum of the.
We're leaning customer demand and feel confident about our position to manage through the supply chain constraints.
Speaker 32: Our M&A activities will continue to fuel growth as we integrate market leading dealers and expand higher margin revenues.
Our M&A activities will continue to fuel growth as we integrate market, leading dealers and expand higher margin revenue streams supporting expansion of the business and enhancing the overall quality of our earnings. We believe these efforts will further extend our market share and generate meaningful value to our shareholders.
supporting expansion of the business and enhancing the overall quality of our
We believe these efforts will further extend our market share and generate meaningful value to our shareholders.
With that, I will turn it over to Anthony to discuss business operations.
With that I will turn it over to Anthony to discuss business operations.
Thanks Austin.
Thanks, Austin. The strong levels of demand from fiscal year 2021 carried into the first quarter when demand typically slows during the winter months. Our customers are happy.
Strong levels of demand from fiscal year 2021 carried into the first quarter when demand typically slows during the winter months, our customers are happy and they're out shopping.
putting money down for their next vote with no signs of demand slowing.
Putting money down for their next boat with no signs of demand slowing.
Presolid inventory remains elevated and customer deposits more than doubled in the quarter compared to prior year highlighted the continued strong customer domain
Pre sold inventory remains elevated and customer deposits more than doubled in the quarter compared to prior year highlighted by continued strong customer demand.
These no-sales were stronger than anticipated and the cooler climates as pre-silled units delivered. And in the south, the sales of big boats were particularly strong in the first quarter.
Those sales were stronger than anticipated in the cooler climates as pre sold units delivered and in the south of the sales of big boats were particularly strong in the first quarter.
We continue to see strength across the board in ski wakes, pontoons, saltwater fish, runabouts, and yachts, with all categories and all geographies performing well.
We continue to see strength across the board in ski wakes antunes saltwater fish run abouts and yachts with all categories and all geographies performing well.
The team continues to do a great job of effectively using our superior inventory management tools to sell inventory from any location across our portfolio. This asset-like model reduces our inflowing costs and consequently supports a higher margin profile, marked by a 550-point basis point improvement in gross margin this quarter compared to prior year periods.
The team continued to do a great job of effectively using our superior inventory management tools to sell inventory from any location across the portfolio.
Asset light model reduces our borrowing costs.
Consequently supports a higher margin profile marked by a 550 point basis point improvement in gross margin this quarter compared to prior year period.
Improvement of our inventory levels continues to be a focus as we prepare for the summer-shelling free activity, taking off and pallet are available and we are entering to the economy, instill, allocation of week-end activities as now are going to be conducted on
Improvement in our inventory levels continues to be a focus as we prepare for the summer selling season.
We experienced an increase in inventory during the quarter, which is partially attributed to our numerous acquisitions.
We experienced an increase in inventory during the quarter, which is partially attributed to our numerous numerous acquisitions.
coming online. The supply chain continues to pose challenges for OEMs. However,
Coming online the supply chain continues to pose challenges for Oems. However.
Our exclusive technology and strong vendor relationships allows us to navigate the environment in an extraordinary manner.
Our exclusive technology and strong vendor relationships allows us to navigate the environment in an extraordinary manner.
We are leveraging these resources and our expertise to put us in the position to continue to outperform the industry and we feel good about where we stay.
We are leveraging these resources and our expertise to put us in a position to continue to outperform the industry and we feel good about where we stand.
At some point the supply chain environment will normalize and the overall.
At some point, the supply chain environment will normalize, and the overall industry will begin to build back inventory to a new level of normal. It is still unclear.
Industry will begin to build back inventory to new level of normal.
It is still unclear exactly when this will happen.
However, we have the team and the tools to make sure. We can operate successfully in this environment.
However, we have the team and the tools to make sure we can operate successfully in this environment.
I am also proud of the success, we've had in our service parts and other lines of businesses.
I am also proud of the success we have had in our service parts and other lines of business.
Our dedicated team takes great pride in meeting our customers' parts and service needs so they can get back on the water, enjoying their boat, and making memories that will keep them boating for years to come. We will continue to service their existing boat and stand ready to help them find their next boat of their dreams when the time comes.
Our dedicated team takes great pride in meeting our customers' parts and service needs. So they can get back on the water enjoying their boat and making memories that will keep them voting for years to come.
We will continue to service their existing boat and stand ready to help them find their next photo of their dreams when the time comes.
Moving on to our marketing activities, we continued our balanced strategy between boat shows and local dealer-sponsored events. While some shows were canceled due to COVID-19, we participated in other shows throughout the quarter and saw the same level of activity that we are seeing at our local personalized events. Customers are out. They're happy. They're excited about the product innovation, and they're buying boats.
Moving onto our marketing activities, we continued our balanced strategy between boat shows and local dealer sponsored events. While some shows were canceled due to COVID-19, we participated in other shows throughout the quarter and so all the same level of activity that we're seeing at our local personalized events customers.
We're out there happy they're excited about the product innovation and Theyre buying boats.
And with that, I'll turn the call over to Jack to go over the financials in more detail.
And with that I'll turn the call over to Jack to go over the financials in more detail.
Thanks, Anthony. Fiscal first quarter of 2022 revenue increased 57% to $336 million from $214.1 million in the prior year quarter, which was fueled by a 28% same-source sales increase.
Thanks, Anthony physical first quarter of 2022 revenue increased 57% to $336 million from $214 1 million in the prior year quarter, which was fueled by a 28% same store sales increase <unk>.
Newboat sales grew 56% to 236 million in the physical first quarter of 2022, and pre-o-boat sales increased 39% to 53.4 million.
<unk> sales grew 56% to $236 million in the fiscal first quarter of 2022 and pre owned boat sales increased 39% to $53 4 million.
We continue to realize the benefits of our diversification strategy in growing the higher margin parts of our business, which contributed meaningful to our results in the quarter.
We continue to realize the benefits of our diversification strategy and growing the higher margin parts of our business, which contributed meaningful to our results in the quarter.
Finance and insurance revenue increased 56% to $9 3 million in the first quarter of 'twenty, two and service parts and other sales increased 111% to $37 3 million driven by our same store sales growth and businesses recently acquired.
Finance and insurance revenue increased 56% to $9.3 million in the first quarter of 2022, and service parts and other sales increased 111% to $37.3 million, driven by our same source sales growth and businesses recently acquired.
Gross profit increased 93% to $101 million in the first quarter compared to $52.4 million in the prior year, primarily driven by the increase in gross margins of new and pre-owned boat sales and an increase in the higher margin service parts and other sales. Gross profit margin increased 550 basis points to 30% compared to 24.5% in the prior year.
Gross profit increased 93% to $101 million in the first quarter compared to $52 4 million in the prior year, primarily driven by the increase in gross margins of new and pre owned boat sales and an increase in the higher margin service parts and other sales gross profit margin increased 550 <unk>.
This points to 30% compared to 24, 5% in the prior year.
First quarter of 2020 to selling general and administrative expenses increased to $59 1 million from $34 9 million SG&A as a percentage of sales increased to 18% from 16% in the prior year.
First quarter of 2022, selling general and administrative expenses increased to $59.1 million from $34.9 million. SG&A as a percentage of sales increased to 18% from 16% in the prior year.
the increase in SG&A as a percentage of sales was mainly due to higher variable personnel costs driven by the increased level of profitability compared to the prior year quarter.
The increase in SG&A as a percentage of sales was mainly due to higher variable personnel costs driven by the increased level of profitability compared to the prior year quarter.
Operating income climbed 95% to $31 3 million compared to $16 million in the prior year.
Operating income climb 95% to 31.3 million compared to 16 million in the prior year. Driven by the increased gross profit and partially offset by higher SGNA expenses, and as a result, adjusted EBITDA increase to 41 million compared to 16.7 million in the prior year.
Driven by the increased gross profit, partially offset by higher SG&A expenses and as a result, adjusted EBITDA increased to $41 million compared to $16 7 million in the prior year.
Net income for the fiscal first quarter totaled $23.5 million or $1.45 per diluted share, up 99% from $11.8 million or $0.71 per diluted share in the prior year.
Net income for the fiscal first quarter totaled $23 5 million or $1 45 per diluted share up 99% from $11 8 million or <unk> 71 per diluted share in the prior year.
For both periods charges related to transaction costs and contingent consideration adversely impacted diluted earnings per share.
For both periods, charges related to transaction costs and contingent consideration adversely impacted diluted earnings per share.
These amounts tax-affected at 25% were $0.41 per share in the first quarter of 2022 and $0.03 per share in the first quarter of 2021.
These amounts tax effected at 25%.
<unk> 41 per share in the first quarter of 'twenty two.
<unk> <unk> per share in the first quarter of 2021.
Looking ahead for the full year fiscal 2022, we are raising our outlook for adjusted EBITDA to be in the range of $210 million to $220 million and earnings per diluted share to be in the range of $8 to $8 40 per share.
Looking ahead for the full year, fiscal 2022, we are raising our outlook for adjusted EBITDA to be in the range of $210 million to $220 million and earnings for diluted share to be in the range of $8 to $8.40 per share.
We maintain our anticipation for same-source sales to be high single digits despite the ongoing inventory challenges.
We maintain our anticipation for same store sales to be up high single digits. Despite the ongoing inventory challenges.
These projections include the acquisitions completed during the first quarter and the recently announced <unk> Marine transaction, but excludes any additional acquisitions that may be completed during the year.
These projections include the acquisitions completed during the first quarter and the recently announced JIF marine transaction, but exclude any additional acquisitions that may be completed during the year.
With regard to our capital allocation, we remain focused on accelerating organic growth.
With regard to our capital allocation, we remain focused on accelerating organic growth.
Executing on strategic M&A opportunities and leveraging synergies.
By executing these strategies on a longer-term basis, we believe we can increase our adjusted EBITDA run rate by 15% to 25% per year, with our M&A strategy contributing 10% to 15% and existing operations contributing 5% to 10% aligned with their long-term same-source sales expectations.
By executing these strategies on a longer term basis. We believe we can increase our adjusted EBITDA run rate by 15% to 25% per year with our M&A strategy contributing 10% to 15% and existing operations contributing 5% to 10% aligned with their long term same store sales expectations.
<unk>.
For this year, we believe we'll exceed these amounts, with the low end of our guidance range yielding adjusted EBITDA growth in excess of 30% before any additional acquisitions we may complete this year.
For this year, we believe we will exceed these amounts with the low end of our guidance range, yielding adjusted EBITDA growth in excess of 30% before any additional acquisitions, we may complete this year.
Following through on the math, this basically gets you to a 50% increase in adjusted EBITDA by 2024 and a run rate in excess of $300 million.
Following through on the math that basically gets you to a 50% increase in adjusted EBITDA by 2024, and our run rate in excess of $300 million.
Needless to say, we are working hard for shareholders to execute on completing additional acquisitions implement our proven strategies across newly acquired dealerships and enhancing our earnings by growing our higher margin businesses.
Needless to say, we are working hard for shareholders to execute on completing additional acquisitions, implement our proven strategies across newly acquired dealerships, and enhancing our earnings by growing our higher margin business.
This concludes our prepared remarks. Operator, will you please open the line for questions?
This concludes our prepared remarks, operator would you. Please open the line for questions.
Yes.
In order to ask a question at this time, please press star 1 on your telephone. And to withdraw your question, just press the pound key. Once again, that's star 1 for questions, 1-1 for questions.
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To withdraw your question just press the pound key once again Thats star one for questions one more quick questions.
Our first question will come from the line of Drew Crum from Stiefel. Your line is open.
Our first question will come from the line of drew.
Drew Crum from Stifel. Your line is open.
Okay. Thanks, Hey, guys good morning.
Okay, thanks, guys. Good morning. The 28% seems for sale, so you're, I think, was better than anyone expected.
8% same store sales figure I think was better than anyone expected.
Understanding the fiscal 1Q is seasonally less important. Any thoughts around what the shape of the year should look like for same-store sales?
Understanding that fiscal <unk> is seasonally less important any thoughts around what the shape of the year should look like for same store sales.
And then separately, Austin, you talked about targeting two to four parts and services businesses on an annual basis going forward. How did the economics and purchase price multiples of these deals compare to your dealership transactions?
And then separately Austin, you talked about targeting two to four parts and services businesses on an annual basis going forward.
Do the economics in purchase price multiples of these deals compare to your dealership transactions. Thanks.
Yes, Jack, do you want to jump in on the scene for a second? Yeah, I'm going to. I can see.
Yes.
Yes, Jack do you want to jump in on the same.
So we're still I should say.
Go ahead go ahead.
I was just going to say, you know, a little bit of that, you know, this quarter is our lightest quarter. I do think we had some deals that should have probably been captured in the last year that just, you know, got pushed into this quarter. And I've spoken about this on the last couple of calls that, you know, really the last seven to ten days of each quarter are probably the most important for us because it can shift the quarter. And that's why we've been kind of not really...
I was just going to say a little bit of that.
This quarter is our lightest quarter.
I do think we had some deals that should have probably been captured into last year that just.
Got pushed into this quarter and I've spoken about this on the last couple of calls that really the last seven to 10 days of each quarter are probably the most important for us because it can shift a quarter and that's why we've been kind of not really.
Same source sales on a quarterly basis is going to be very choppy for us. Year-end, having that high single-digit projection or guidance is very doable, and we're comfortable with that.
Same store sales on a quarterly basis is going to be very choppy for us year, and having that high single digit.
Projection or guidance is very doable and we're comfortable with that.
and this quarter just happened to probably have some deals push out.
In this quarter just happened to probably have some deals push out.
And then the boats came in early because everybody kind of took some Christmas time. So we didn't have as much dependence on the last, you know, 7 to 10 days that between Christmas and New Year's was not as, we weren't as dependent on that as we would be like the last 10 days of March. That'll be extremely busy so it can sway a little bit. So.
And then the boats came in early because everybody kind of took some Christmas time. So we didn't have as much dependence on the last.
Seven to 10 days between Christmas and new year's.
Not if we werent as dependent on that as we would be like the last 10 days of March.
That will be extremely busy so it can sway a little bit so same store sales.
We had a great quarter. We knew we were getting the boats, kind of like what we've got coming into this quarter. We know when the boats are supposed to come in, and so as long as there's no more disruptions or slowdowns...
We had a great quarter, we knew we were getting the boats kind of like what we've got coming into this quarter. We know when the boats are supposed to come in and so as long as there is no more disruptions or slowdowns, we're pretty confident in where we sit and know kind of what it's going to look like for the next several quarters, but then again the last 10 days of what's mattered to Jackie.
We're pretty confident in where we sit, and know kind of what it's gonna look like for the next several quarters, but then again, the last 10 days are what's mattered. Jack, you wanna add anything to that before I talk about the part stuff?
To add anything to that for him to talk about the port stuff yes.
Yeah, I just think it's important to understand. Last year, Q2, we had a 58%, a 57% comp, that'll be a tough number to overcome. But then Q3 and Q4 were up against a negative comp. So I think the comps certainly get a little bit easier, although those are our largest quarters. So I think...
I just think it's important to understand last last year Q2, we had a 58% 7% comp that'll be a tough number to overcome but then Q3 Q4, we're up against a negative comp. So I think the comps certainly get a little bit easier, although those are our largest quarter.
<unk>.
So I think it's like this is Scott.
It's going to be a little bit challenging to get the.
It's going to be a little bit challenging to get the forecast perfect for the year. I will say that even though Q2 is a big comp we're going up again.
The forecast perfect for the.
For the year I will say that even though Q2 is a is a big comp we're going up against.
You know, we're not expecting, you know, a major reduction, right? We're not expecting a 30% reduction in the same source sales. You know, I also wouldn't expect a 30% increase in same source sales, right? So I think it, I think we'll be able to be in and around the number from last year and then just like Austin said, it's going to depend on how those flow at the, at the end of the quarter. And then, and then, Drew.
We're not expecting.
A major reduction right, we're not we're not expecting a 30% reduction in same store sale.
Also wouldn't expect a 30% increase in same store sales right. So I think I think we'll be able to be in and around that.
The number from last year, and then just like Austin said.
Depending on how those flow at the at the end of the quarter.
And then drew just to answer on the parts the parts side of it.
the part side of it. You know, when we did the TH and re-endeal part of one of the things that was intriguing to us.
We did the th marine deal part of one of the things that was intriguing to us when we were looking to do that with his pipeline and the opportunity that he had.
when we were looking at that was with his pipeline and the opportunity that he had so
His pipeline is probably as good or maybe even better than mine because...
His pipeline is probably as good or maybe even better than mine because.
you know, it's not a solution. Kind of already knows everybody. So as we started to get ramped up and get them folded in and once they got integrated, you know, we sat down with Jeff and David at P.H. and they were like, here are all the opportunities. And we were like, well, let's get going and let's start addressing those.
It's not as fluid you kind of already knows everybody. So as we started to get ramped up and get them folded in and once they got integrated we sat down with Jeff and David Th. They were like here all of the opportunities and we were like well, let's let's get going and let's start addressing those so its pipeline is pretty robust.
economics are a little bit different than ours. I mean, he's probably closer to a four to seven times on a training.
The economics are.
A little bit different than ours.
He is probably closer to a 4% to seven times.
On a trailing 12.
And the synergies, the business is a little bit more...
And the synergies there.
The business is a little bit more.
A little bit more I would say stable.
a little bit more, I would say stable, because it's less cyclical, so stable is probably not the right word. It's just less cyclical, so there's not as much peaks and valleys as you look back over the years. So the multiple is probably going to average into the, I would say, between five and six. On the aqua.
Because it's less cyclical so stable is probably not the right word it's just less cyclical so theres not as much peaks and valleys as you look back over the years. So the multiple is probably going to average into the I would say between five and six on the acquisitions.
Um, and they're a little bit smaller and then the synergies aren't quite as big. I mean, we're not buying anything on the part side that's going to double in 24 months. It's going to be a little bit more, you know, we're going to pick
And they are a little bit smaller and then the synergies aren't quite as big I mean, we're not finding anything on the parts side. This is going to double in 24 months, it's going to be a little bit more we're going to pick up some synergies on margin, some SG&A stuff and stuff like that.
some synergies on margin, some SG&A stuff, and stuff like that, so the...
The increase of the upside we're gonna have to build into additional revenues. And so when we start looking at these, what we're trying to do is take the ones that really fold the end, that complement-
The increase of the upside we're going to have to build into.
It's an additional revenues and so when we start looking at fees. What we're trying to do is take the ones that really fold in the complement and have the ability to use the parts view side of it to either expand revenues or either as we bring them in the th side expand margin.
and have the ability to use the parts used side of it.
to either expand revenues or either as we bring them in the TH side, expands more. So I think that's today's to your question.
I think that should have answered your questions.
Yes, thanks, guys appreciate it.
Our next question will come from the line of Craig Kennisson from Berg. Your line is open.
Our next question will come from the line of Craig Kennison from Baird. Your line is open.
Very good morning. Thanks for taking my questions. I think you mentioned that deposits were up. I'm wondering if you could just characterize how you're handling the demand that you can't currently satisfy because you lack inventory.
Hey, good morning, Thanks for taking my questions. I think you mentioned that deposits were up I'm wondering if you could just characterize how you are handling the demand that you can't currently satisfied because you lack inventory.
I'll let Anthony jump in on this, right? But let me just say, I don't think we're missing deals. I mean, the consumer has kind of been conditioned over the last year and a half to understand they're pretty much having to wait on everything. So what I think we're seeing and why those deposits are double where they were, is I think people are preparing a lot more in advance.
Yes.
I'll, let Anthony Anthony jump in on this but let me just say I don't think we're missing we're <unk>.
Missing deals I mean, the consumer is kind of being conditioned over the last year and a half to understand theyre pretty much having to wait on everything.
But I think we're seeing and why those deposits are double where they were is that people are preparing a lot more in advance so the people that.
So the people that, you know, are planning on doing something, you know, for spring or summer, they jumped out this fall knowing that they were going to have to wait and get what they wanted. But I'll let Anthony probably, it'll be better. I'll talk about that.
We're planning on doing something.
For spring or summer they jumped out this fall knowing that they were going to have to wait and get what they want it but I'll, let anthony probably it'll be better about that.
I think the customers are a little more specific on what they want and there's so many new models that are coming out that are manufacturers, drill and what so that the consumer is willing to wait for what they want and they're paying for it and we're not having any issues with it. So I don't feel as though we're missing anything. They're just getting exactly what they want.
Greg I think the customers are a little more.
Vivek unless there.
And there are so many new models that are coming out.
Our manufacturers drilling.
The consumers.
For what they want.
And they are paying for it and we're not having any issues with it.
Don't feel as though we're missing anything they're just getting exactly what they want.
It's a really good environment really to be a dealer and you're able to price for the kind of features that consumers want. You're a large dealer. Are you having any conversations with your OEM partners to figure out how you might be able to preserve...
It's a really.
Good environment really to be a dealer and you are you able to price for the kind of features that consumers want.
Youre, a large deal or are you, having any conversations with your OEM partners.
To figure out how you might be able to preserve some of this I guess scarcity dynamic where the customer comes in do you expect to pay full price.
I guess scarcity dynamic where the customer comes in, it's back to pay full price, and they just wanna choose the features they want.
And they just want to choose the features they want.
daily we have those conversations with our OEMs. It's something that I think that my views are that.
Daily we have those conversations with our Oems.
It's something that I think that.
Our views are that.
the old model of having two turns a year, like most dealers do. We were always much higher, but you know.
The old model.
Having two turns a year like most dealers do we were always much higher but.
Ordering the right boats and using the technology that we have to make sure that the boats that we have and stock the what everybody wants.
Ordering the right boats and using the technology that we have to.
To make sure that the boats that we have in stock what everybody wants.
Instead of, you know, I've used this example in the past, you know, for manufacturer builds, 14 different models, you don't put all 14 different models in a market. If it takes a year to sell, you know, two of those models. So, you know, ordering better real time inventory, sharing inventory between them and just using the data that we collect to make sure that we have the right both of the right places at the right time. And that's where we're getting better and better. So, I don't really ever see us going back to having you know.
Instead of.
I've used this example in the past.
For manufacturer builds 14 different models, you don't put all 14 different models in a market. If it takes a year to so two of those models so ordering better.
Real time inventory sharing of inventory between.
Using the data that we collect to make sure that we have the right both of the right places at the right time.
We're getting better and better so I didn't really ever see us.
Going back to having.
over a bunch of both on our yard if we order correct.
Overabundance of both on our yard.
Order correctly.
And a crazy on top of that, I think the manufacturers that have also, you know,
And Greg on top of that I think the manufacturers.
Also.
when we had 2008 and 2009, there wasn't an opportunity for the manufacturer to understand how a flattened production schedule where there's not peaks and valleys in their production schedule, make them much more efficient, make the dealers healthier, it creates turns, it creates margin. And so I think most of the manufacturers
Seen this when we had when we had 2008 and 2009.
There wasn't an opportunity for the manufacturer to understand how a flattened production schedule, where theres not peaks and valleys in their production schedule and make them much more efficient make the dealers healthier. It creates turns it creates margin and so I think most of the manufacturers, especially in the short term.
especially in the short term, you know, it's gonna take, still take us a couple of years to catch up in inventory and then probably a couple of years after that, there'll be a discipline where manufacturers are not gonna say they're not gonna, they're gonna create scarcity by not producing boats. I just don't think they're gonna ramp up.
It's going to take still take US a couple of years to catch up in inventory and then probably a couple of years after that there'll be a discipline, where manufacturers I am not going to say, they're not going to predict they're going to create scarcity by not producing boats I just don't think they're going to ramp up to over produces start flooding.
to overproduces start flooding the inventory field. Because one, I don't think the dealers want it. I don't think the floor plane company wants it. And now I don't think the manufacturers want it. I don't think they want these old peaks and valleys of inefficiency and production. I think that they've realized that. So I think that because of where we are from an inventory perspective.
Inventory.
Because one I don't think the dealers want it I don't think the Floorplan company wants it and now I don't think the manufacturers wanted I don't think they want these old peaks and valleys of the inefficiency in production I think that they've realized that so I think that because of where we are from an inventory perspective, some of the things that everybody has.
Some of the things that we, everybody's able to see now that we weren't able to see in 08, 9 and 10 because we were cleaning out the inventory channel.
To see now that we werent able to see in eight nine and 10, because we were cleaning out the inventory channel.
is brought light to everybody and I think everybody's kind of getting on the same page and I think that's just going to give us more years ahead of us where not only are we going to have to work through the supply chain and get him in towards back to a new normal but I think there'll be a discipline for a period of time after that. Now eventually Greed sets in, people start stuff in the channel but you know I honestly think that that's five to six years out.
As brought light to everybody and I think everybody is kind of getting on the same page and I think that's just going to give us more years ahead of us where not only are we going to have to work through the supply chain and get inventories back to a new normal, but I think there'll be a disciplined for a period of time after that now eventually Greece at the end people start stuff.
And the channel but.
I honestly think that Thats five years to six years out.
And so we do have conversations along with them about how some of the tools that we have, we don't need to hog them as one water tools. Some of the inventory tool will make the whole entire industry healthier, and it'll help our manufacturers even out that production line. And so there's some opportunities there that we're looking at on how we can take the tools that we have and push those out to other people for their use to help them manage filled them.
And so we do have conversations along with them about how some of the tools that we have we don't need to haul them as one water tools some of that inventory to make the whole entire industry healthier and it will help our manufacturers even out that production line and so there's some opportunities there that we're looking at on.
How we can take the tools that we have and push those out to to other people for their use to help them manage field inventory.
And then just to follow up, what's the customer experience like? How do you have to manage the information flow? So as a customer, if I put money down and I have some uncertain future about when I might get my boat, are you doing things to keep customers?
And then just to follow up.
What's the customer experience like how do you have to I guess manage the information flow so as a customer if I put money down and I have some uncertain future about when I might get my boat are you doing things to keep customers.
prized of progress along the way so that customer feels engaged and pleased with the experience even though you know it's hard to know what to deliver. Yeah Greg the through our CRM we are a constant communication with the consumer and it's the way we train our employees to continue to have those touches even though the vote may be a year away or nine months away that we're continually touching the customer.
<unk> of <unk>.
<unk> along the way so that customer feels engaged and pleased with the experience even though.
It's hard to know what's delivered through.
Through our CRM.
Constant communication with the consumer and the way we train our employees to continue to have though.
Touches even though the about maybe a year away or nine months away, we're continually touching the customer.
Great.
Just real quick we don't have customers coming in like if you came in today and it doesn't matter. What you ordered you said disposal, we're not saying, okay, well that bode is going to be 300 Grand give us a 30000 dollar deposit and we will let you know.
Just real quick, we don't have customers coming in. Like if you came in today, and it doesn't matter what boat you ordered, you said, well, I want this boat. We're not saying, okay, well, that boat is gonna be 300 grand. Give us a $30,000 deposit and we'll let you know.
I mean, we're able to, through our tools and working with the manufacturers, if you come in and just pick any boat, you can pick an R5 Cobalt, a Barletta, a Sunseeker, it doesn't matter. We're going to give you an estimated delivery date that's going to be within, you know, 10 days.
We're able to through our tools and working with the manufacturers. If you come in and just pick any boat you can pick an archive cobalt barletta sunseeker. It doesn't matter, we're going to give you an estimated delivery date, that's going to be within.
10 days before or after that date. The boat is going to be delivered it's not a big unknown like we don't have a clue I mean, we have a really good idea over the next because of the production plots slots that we have when that both should deliver now there's all kinds of things that shift that delivery date like I said 10 days earlier 10 days.
for after that date the both can be delivered it's not a big unknown like we don't have a clue we have a really good idea over the next because of the production spot slots that we have when that boat should deliver now there's all kinds of things that shift that delivery date like I said 10 days earlier 10 days later but it's not this you know well
Later, but it is not this.
Well, we'll give it to you when we can.
So, you know, we're able to set the expectation, and then like Anthony said, the CRM tool is very powerful for our sales associates to really do through things through email text, they do do phone calls. I mean, to keep those touches going, just to stay in front of them, that's why, you know, one of the things everybody talks about was, oh, people aren't gonna wait, they're gonna want their deposits back. We feel that our stuff is extremely sticky, because it's an emotional...
So.
We're able to set the expectation and then like Anthony said the CRM tool is very powerful for our sales associates to really do two things through email text. They do do phone calls to keep those touches go in just to stay in front of them. That's why one of the things that everybody talks about was old people aren't going away, they're going to want there.
We feel that our stuff is extremely sticky because this is an emotional purchase and once they make the purchase and they put the money down I mean, the fallout that we have on deposit at boats is not somebody changing their mind.
And once they make the purchase and they put the money down, I mean, the fallout that we have on deposited boats.
is not somebody changing their mind. It's a life changing circumstance. They get relocated, there's a death, or something like that. That's about, you know, the...
Life changing circumstance they get relocated there is a death or something like that that's about.
half a dozen or dozen yearly, you know, backups that we have is all something like that once we get at the faucet.
Half a dozen or dozen yearly.
<unk> that we have is off something like that once we get a deposit.
Great Hey, thank you.
Our next question will come from the line Joe <unk> from Raymond James You May begin.
Our next question will come from the line of Joe Altabetto from Raymond James. You may begin.
Thanks. Hey, guys. Good morning. I guess first question maybe for Jack, a clarification on the guide. So you raised the EBITDA guide by $40 to $45 million. By our math, the acquisitions that are now included, which is, I guess, TH, Norfolk, Quality, and GIS, I think those represent about $30 to $35 million of that EBITDA. So is my math right and the base business went up by about $10 million or so for this year?
Thanks, Hey, guys good morning.
I guess first question maybe for Jack clarification on the guidance you raised the EBITDA guide.
By $40 million to $45 million.
By our math the acquisitions that are now included which is I guess th Norfolk quality ntis.
I think those represent about 30% to $35 million of that EBITDA. So is my math right at the base business went up by about $10 million or so for this year.
Yes, I think you got it.
Yeah, I think you gotta look at the acquisitions. Be careful when you look at the acquisitions, right? Because on a full-year basis.
Look at the acquisitions be careful when youre looking at acquisitions right because on a full year basis, they're going to contribute probably closer to $40 million. So you've got to make sure you're adjusting it down for the partial period.
you know, they're going to contribute probably closer to $40 million. And so you've got to make sure you're adjusting it down for the partial period. You know, one thing that wasn't mentioned earlier when we were talking about JIF, right, is that that's a smaller business. It's about $5 million in annual revenues.
One thing one thing that wasn't mentioned earlier when we're talking about JF writers is that.
Smaller business, it's about $5 million in annual revenues.
and about a million, a little under a million dollars of EBITDA. So it wasn't a real big deal, but you know, just you got to scale it in that way. And yeah, I think you're thinking about it right as long as you're.
And about about $1 million, all under $1 million of EBITDA. So it wasn't.
It wasn't a real big deal but.
You got to scale it in that way and.
Yes, I think youre thinking about it right as long as you are.
you know, backing down a portion of the cost.
Backing down a portion of the costs a portion of the projected EBITDA for those acquisitions on a pro rata basis for the year.
a portion of the projected EBITDA for those acquisitions on a pro-rata basis for the year.
Okay. That's helpful. And then secondly in terms of the million dollar plus run rate that you guys talked about this morning for fiscal 'twenty four I guess first.
Okay, that's helpful. And then secondly, in terms of the $300 million plus run rate that you guys talked about.
I guess first, what's the similar run rate, oh, I guess I can figure it out, right? If you're adding $40 million to the 210 to 220, that's your run rate for this year. But what are the assumptions around future acquisitions? Are you assuming, you know, call it a couple of parts and service acquisitions and maybe, you know, four or five dealer acquisitions?
What's the similar run rate.
I guess I can figure it out right, if youre, adding $40 million to the 210 to $2 20 that your run rate for this year.
But what are the assumptions around future acquisitions are you assuming.
Call. It a couple of parts and service acquisitions in maybe four or five.
<unk> acquisition.
Yeah, yeah. Well, real quick, and one thing I want to point out, Joe, that run rate is based off historical numbers. That's historical numbers. That's no synergy.
Yes, yes.
Well real quick on one thing I want to point out Joe that run rate is based off historical numbers.
Historical numbers, that's no synergies.
Yes.
That's pre-synergies, and I think another thing that's important to do is we were ultra-conservative when we were kind of planning out that run rate. Jack, I mean, you can talk to him about what we kind of put in as base case for acquisitions. We have a historical record of doubling acquisitions on the dealership side inside 24 months, and we by no means put any of that in.
And so that's pre synergies and I think another thing thats important to do.
As we were ultra conservative when we were kind of planning out that run rate Jack I mean, you can talk to them about what we kind of.
In his base case for for acquisitions, and then we have a historical record of doubling acquisitions on the dealership side inside 24 months and we bought no no means putting any of that yet.
Yeah.
Yeah, so we're, you know, again, if you look at a modest growth on the base business, if you, you know, you think about it right now, we're looking at a total cadence of about eight acquisitions a year. It's kind of the, you know, say three on the, on the part side, five on the
Yes. So were again, if you look at our modest growth on the base business.
If you think about it right now we're looking at a total cadence of about eight acquisitions a year, that's kind of the phase III on the on the parts side five on the.
on the dealership side, right, just kind of taking that midpoint, you know, that that's probably going to generate, you know, twenty five million dollars worth of EBITDA. And, you know, it's it's.
On the dealership tried right just kind of taking that midpoint.
That that's probably going to generate $25 million worth of EBITDA.
And.
It's it's very powerful is very powerful.
It's very powerful, it's very powerful how it adds to the growth of the company. You know, then like Austin said, you know, we do have a good history of improving those dealership acquisitions by implementing our tools. And so I think, you know, there's probably even upside, decent amount of upside, you know, from that $300 million.
Adds to the.
The growth of the company.
Then like Austin said, we do have a gig.
History of improving those dealership acquisitions by implementing our tools and so I think there's probably even upside decent amount of upside from that $300 million.
Okay. That's helpful and then maybe if I could squeeze in one more.
That's helpful. And maybe if I could squeeze in one more. In terms of the price environment, obviously, the comp plus 28, very strong, mostly pricing driven. This may sound like a bit of a silly question, but is there any chance we start to see discounting at all?
In terms of the price environment, obviously, the comp plus 28, very strong mostly pricing driven.
Maybe talk a bit of a silly question, but is there any chance you can start to see discounting at all in 2022 or given where inventories are really not the point.
22, or given where inventories are, that's really not possible.
Yeah, I don't see I don't see discounting, especially not till the end of the season. Now, do you get to the end of the season and have some pocket?
Yes.
I don't see I don't see discounting.
Especially not till the end of the season now do you get to the end of the season and have some pockets in the country that have had some weather issues I mean, we've seen this in the past where you'll have a really wet.
in the country that have had some you know weather issues. I mean we've seen this in the past where you'll have a really wet midwest
Midwest.
you know, start to the season, in some cases I've seen it where a lot of people couldn't vote until the end of June in the Midwest just because their lakes were flooded. So if you get some sort of dynamic like
Start to the season.
And some in some cases I've seen where a lot of people could vote until the end of June in the Midwest just because they are relationship were flooded. So can you give us some sort of dynamic like that.
And then you come out towards the end of the end of this year, you might see some discounting from some of the smaller dealers that just don't want to have any carryover inventory. But from an inventory perspective,
And then you come out towards the end of the end of this year you might see some discounting from some of the smaller dealers, who just don't want to have any carryover inventory from an inventory perspective.
If you look at the country as a whole, it's going to take us a while to get back to this new normal, so I don't expect to see any massive discounting. Where you do see discounting will really be on the low-end super value side, not on the high-end premium side where we operate. I don't see that coming any time soon, like no time soon.
If you look at the country as a whole it's going to take us a while to get back to this new normal. So I don't expect to see any massive discounting and where you do see discounting really be on the low end supervalu side.
Not on the high end premium side, where we mainly.
We operate I don't see that coming anytime soon.
That's going to be isolated.
This year, Yeah, and then one other thing I'd like to point out and tell me if I'm wrong, but.
Yeah. And one other thing I'd like to point out, and Jack, tell me if I'm wrong, but, you know, Joe, you said, you know, the 28% comp, I mean, a lot of that was driven not just by new boat sales or pricing of new boats. A lot of that was driven, you know, on those insular businesses, you know, our parks and service, you know, was a huge contributor to that.
You said, the 28% comp I mean, a lot of that was driven not just by new boat sales are pricing of new boats a lot of that was driven.
On those ancillary businesses, our parts and service.
It was a huge contributor to that.
That's a good point.
You guys.
Thanks, Joe.
Our next question is from Fred Whiteman from Wolf Research. You may begin. Hey, guys. Good morning. Do you have the organic inventory number? Just sort of try to parse out what is the impact of the acquisitions on that inventory number on the balance sheet. Yeah, I don't have it in front of me, but it's up slightly. The majority of it is driven by acquisitions.
Our next question comes line of Fred Wightman from Wolfe Research, maybe you can add.
Hey, guys good morning.
Do you have the organic inventory number.
Just sort of try to parse out what is the impact of the acquisitions on that inventory number on the balance sheet.
I don't have it in front of me, but it's flat to up slightly.
Up slightly.
Majority of it is driven by.
Acquisitions.
Okay. And when you say flat to up, that's on a year-over-year basis, right? Year-over-year basis, yes. Sequentially, it's up a lot more just because of the seasonality of the business and you tend to build inventory through the winter. But yeah, on a year-over-year basis.
Okay, and when you say flat to up that's on a year over year basis right year over year basis, yes sequentially. It's up a lot more just because of the seasonality of the business and they tend to fill.
Build inventory through the winter, but yet on a year over year basis.
Sure. Okay, that makes sense. And could you just give a little bit more detail on sort of the margin performance across the new and the used segments that you saw in the quarter? I mean, still a lot big on a year-over-year basis, but that growth rate looks like it might have ticked down a bit versus last quarter. So are we sort of at a steady-state margin here for those two categories going forward? Do you think it could sort of fluctuate a bit given seasonality? How should we think about that?
Okay that makes sense and could you just give a little bit more detail on sort of the margin performance across the new and the used segments that you saw in the quarter I mean, it's still a big on a year over year basis, but that growth rate looks like it might have ticked down a bit versus last quarter. So are we sort of at a steady state margin here for those two categories going forward do you think it could fluctuate a bit given the seasonality.
How should we think about that.
Yeah, I think what you also have going on here is a seasonal trend. You tend to have, you know, bigger boats sold in the winter months.
Yes, I think what you what you also have gone on here is a.
And they'll trend you tend to have bigger.
Bigger boats sold in the in the winter months.
that were in town, and so that typically the December quarter tends to be a lower margin quarter, and so I think that's a little bit at what's play here. We certainly, we're going to see our larger boat business perform very well in this quarter.
And so that typically.
Remember quarter tends to be a lower margin quarter, and so I think thats a little bit at what's play here, we certainly.
We'll see a larger base business performed very well in this quarter.
Makes sense. And then just within that high single-digit comp number that you guys are still guiding to, has the unit assumption changed? Are you planning for – I mean, said differently, do you think that the deliveries from OEMs is going to be better or worse versus when you sort of put that out there last quarter?
It makes sense and then just within that high single digit comp number that you guys are still guiding to has been unit assumption changed are you planning for.
Said differently do you think that the deliveries from Oems is going to be better or worse versus when you sort of put that out there last quarter.
Yes, I think it's I think it's still a little early to tell I mean, there is.
Yeah, I think it's still a little early to tell. I mean, there's, you know, we're optimistic about the supply chain. But, you know, we are expecting some unit growth. But, you know, it's a balance there between price and growth.
We're optimistic about the supply chain, but.
We are expecting some.
Some unit growth but.
And is it is a balance there between pricing and growth.
Perfect. Thanks, guys.
Yes.
Once again, that's star one for questions. Our next question comes from Ryan of Mike's Whips from Truer Securities. You may begin.
Once again Thats star one for questions. Our next question comes from the line of Mike slips from tourists Securities you may begin.
Hey, good morning, guys. Maybe a question for Jack just around the cadence of acquisitions on the part side and unveiling that number, kind of target number for acquisitions annually. I guess how should we think about that relative to return on invested capital or just working capital intensity? Are these businesses much more working capital intensive than dealerships?
Hey, good morning, guys.
Maybe question for Jack just around the cadence of acquisitions on the parts side unveiling.
Or kind of targeted number.
For acquisitions annually I guess, how should we think about that relative to return on invested capital or just working capital.
<unk> business is much more working capital intensive than dealerships.
Yeah, they are. I mean, typically, you know, the various businesses have funded working capital through, you know, either cash or, you know, some sort of revolver. As of right now, we, you know, they don't have the floor plan facility like the boat dealerships do. So, there certainly will be a little more, a little additional working capital, right? But a lot of them, you know, as well, these aren't massive businesses. You know, quite so often, we can, you know, integrate them into our existing operations and, you know, absorb some of that working capital need, reduce some of their, you know, fixed costs.
Yes, they are.
Typically.
They are various businesses have funded working capital through.
Either cash or.
Some sort of revolver as of right now we so they don't have the the floor plan facility like the boat dealerships too. So there certainly will be a little more a little additional working capital right, but a lot of them as well. These these aren't these.
These aren't massive businesses.
Quite so often we can integrate them into our existing operations.
And.
Absorb some of that working capital need and reduce some of their fixed costs.
you know, to improve and cover that cost.
Two to improve and cover that cost.
Okay. And then just kind of similar lines in the service parts and other sects, reporting sections.
Okay.
Just kind of similar lines in the service parts and others.
Good morning.
Now that you've made a couple acquisitions there, I guess, how should we think about the margin shaking out, you know, in a steady state environment, you know, understanding parts tend to be diluted relative to service. So, is there a way to think about that?
Now that you've made a couple of acquisitions there I guess, how should we think about the margin shaking out in a steady state environment understanding parts tend to be.
Diluted relative to service. So is there a way to think about that.
Yeah, I mean, you saw it this quarter where we saw our margin for service parts and other, you know, come down a little bit. I think on a, you know, more steady state, you know, depending on the cadence of the acquisitions, you know, that margin will probably fall closer to a, you know, closer to like a 40% number, you know, but which will still contribute positively to our overall margins as, you know, that is higher than boat sales. But you're 100% correct. You know, parts tend to be in and around 30, 32, you know, 33%, you know, your service labor tends to be, you know, closer to 60, so we'll kind of, you know, we'll blend down kind of in the middle there in that 40 range.
You saw it this quarter when we saw our margin for our service parts and other.
Come down a little bit I think I think on a more.
<unk> steady state.
Depending on the cadence of the acquisitions.
That margin will price fall closer to a.
Closer to like a 40% number.
But it will still contribute positively to our overall margins as that is higher than both sales, but but youre, 100% correct parts tend to be in and around $30 32.
33%.
Your service labor tends to be closer to <unk>, we'll kind of.
We'll blend down kind of in the middle there in that <unk> 40 range.
Okay, Great. That's helpful. That's all for me. Thank you.
Thanks, Mike.
And that will conclude our Q&A for today. I have no further questions in the queue.
Thank you and that will conclude our Q&A for today I have no further questions in the queue.
and this will conclude today's conference as well. Thank you for your participation. You may now disconnect. Everyone, have a great day.
And this will conclude today's.
Conference as well.
Thank you for your participation you may now disconnect everyone have a great day.
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