OneWater Marine Q1 2026 OneWater Marine Inc Earnings Call | AllMind AI Earnings | AllMind AI
Q1 2026 OneWater Marine Inc Earnings Call
Speaker #1: Good morning. My name is Julie, and I will be your conference operator today. At this time, I would like to welcome everyone to the OneWater Marine Inc. fiscal first quarter 2026 conference call.
Operator: Good morning. My name is Julie, and I will be your conference operator today. At this time, I would like to welcome everyone to the OneWater Marine Inc. Fiscal First Quarter 2026 Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you'd like to ask a question during this time, press star followed by the number one on your telephone keypad. If you'd like to withdraw your question, please press star two. Thank you. I would now like to turn the conference over to Jack Ezell, Chief Financial Officer. Please go ahead.
Speaker #1: All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. If you'd like to ask a question during this time, press star, followed by the number one on your telephone keypad.
Speaker #1: If you'd like to withdraw your question, please press star two. Thank you. I would now like to end the conference and turn it over to Jack Ezzell.
Speaker #1: Chief Financial Officer, please
Speaker #1: go. Good
Jack Ezell: Good morning, and welcome to OneWater Marine's Fiscal First Quarter 2026 Earnings Conference Call. I'm joined on the call today by Austin Singleton, Executive Chairman, and Anthony Asquith, Chief Executive Officer. Before we begin, I'd like to remind you that certain statements made by management in this morning's conference call regarding OneWater Marine and its operations may be considered forward-looking statements under securities laws and involve a number of risks and uncertainties. As a result, the company cautions 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 statements. Factors that might affect future results are discussed in the company's earnings release, which can be found in the Investor Relations section on the company's website and in its filings with the SEC.
Jack Ezzel: Good morning, and welcome to OneWater Marine's Fiscal First Quarter 2026 Earnings Conference Call. I'm joined on the call today by Austin Singleton, Executive Chairman, and Anthony Asquith, Chief Executive Officer. Before we begin, I'd like to remind you that certain statements made by management in this morning's conference call regarding OneWater Marine and its operations may be considered forward-looking statements under securities laws and involve a number of risks and uncertainties. As a result, the company cautions 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 statements. Factors that might affect future results are discussed in the company's earnings release, which can be found in the Investor Relations section on the company's website and in its filings with the SEC.
Speaker #2: morning and welcome to OneWater Marine's fiscal first quarter 2026 earnings conference call. I'm joined on the call today by Austin Singleton, Executive Chairman and Anthony Aisquith, Chief Executive Officer.
Speaker #2: we begin, I'd like to remind you that certain Before statements made by management in this morning's conference call regarding OneWater Marine and its operations may be considered forward-looking statements under securities laws, and involve a number of risk and uncertainty.
Speaker #2: As a result, the company cautions 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 statements.
Speaker #2: Factors that might affect future results are discussed in the company's earnings release, which can be found in the investor relations section on the company's website and in its filings with the SEC.
Speaker #2: 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.
Jack Ezell: 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. Please note that all comparisons of our fiscal first quarter 2026 results are made against our fiscal first quarter 2025, unless otherwise noted. With that, I'd like to turn the call over to Austin Singleton, who will begin with a few opening remarks. Austin?
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. Please note that all comparisons of our fiscal first quarter 2026 results are made against our fiscal first quarter 2025, unless otherwise noted. With that, I'd like to turn the call over to Austin Singleton, who will begin with a few opening remarks. Austin?
Speaker #2: Please note that all comparisons of our fiscal first quarter 2026 results are made against our fiscal first quarter 2025, unless otherwise noted. With that, I'd like to turn the call over to Austin Singleton, who will begin with a few opening remarks.
Speaker #2: Austin?
Speaker #3: Thank you, Jack. Good morning, everyone, and thank you for joining us today to discuss our first quarter 2026 results. We delivered a solid first quarter in line with expectations, demonstrating the resilience of our business model and continued progress against our strategic priorities.
Austin Singleton: Thank you, Jack. Good morning, everyone, and thank you for joining us today to discuss our first quarter 2026 results. We delivered a solid first quarter in line with expectations, demonstrating the resilience of our business model and continued progress against our strategic priorities. Revenues increased slightly and same-store sales were flat, even with the impact of our strategic inventory initiatives. Importantly, we are pleased with our inventory levels, and despite a highly competitive environment, we believe we are operating from a position of strength. Our inventory mix and age profile are healthy, and our OEM partners continue to be supportive while maintaining disciplined production schedules. This has allowed us to sharpen our focus on disciplined execution as we navigate the current environment and position the business to benefit as industry conditions improve. We successfully completed our strategic brand initiatives last year.
Austin Singleton: Thank you, Jack. Good morning, everyone, and thank you for joining us today to discuss our first quarter 2026 results. We delivered a solid first quarter in line with expectations, demonstrating the resilience of our business model and continued progress against our strategic priorities. Revenues increased slightly and same-store sales were flat, even with the impact of our strategic inventory initiatives. Importantly, we are pleased with our inventory levels, and despite a highly competitive environment, we believe we are operating from a position of strength. Our inventory mix and age profile are healthy, and our OEM partners continue to be supportive while maintaining disciplined production schedules. This has allowed us to sharpen our focus on disciplined execution as we navigate the current environment and position the business to benefit as industry conditions improve. We successfully completed our strategic brand initiatives last year.
Speaker #3: Revenues increased slightly, and same-store sales were flat, even with the impact of our strategic inventory initiatives. Importantly, we are pleased with our inventory levels and, despite a highly competitive environment, we believe we are operating from a position of strength.
Speaker #3: Our inventory mix and age profile are healthy, and our OEM partners continue to be supportive while maintaining disciplined production schedules. This has allowed us to sharpen our focus on disciplined execution as we navigate the current environment and position the business to benefit as industry conditions improve.
Speaker #3: We successfully completed our strategic brand initiatives last year, while the first quarter is typically the smallest from a seasonal standpoint. We are beginning to see the benefits of those brand rationalization efforts reflected in our gross margins.
Austin Singleton: While the first quarter is typically the smallest from a seasonal standpoint, we are beginning to see the benefits of those brand rationalization efforts reflected in our gross margins. First quarter margins were better than expected, also driven in part by a favorable model mix. We expect the positive impact of discontinued brands to be realized in different levels throughout the year, and we remain confident in the long-term benefit of these strategic actions. As part of our ongoing portfolio optimization efforts, we have decided to sell certain distribution segment assets that are no longer core to our long-term strategy. This decision reflects our focus on simplifying the business and allocating capital to areas with the strongest strategic fit. This action is not a reflection of underlying operational performance, but rather an opportunistic step to sharpen our focus and strengthen the balance sheet.
While the first quarter is typically the smallest from a seasonal standpoint, we are beginning to see the benefits of those brand rationalization efforts reflected in our gross margins. First quarter margins were better than expected, also driven in part by a favorable model mix. We expect the positive impact of discontinued brands to be realized in different levels throughout the year, and we remain confident in the long-term benefit of these strategic actions. As part of our ongoing portfolio optimization efforts, we have decided to sell certain distribution segment assets that are no longer core to our long-term strategy. This decision reflects our focus on simplifying the business and allocating capital to areas with the strongest strategic fit. This action is not a reflection of underlying operational performance, but rather an opportunistic step to sharpen our focus and strengthen the balance sheet.
Speaker #3: First quarter margins were better than expected, also driven in part by a favorable model mix. We expect the positive impact of discontinued brands to be realized in different levels throughout the year, and we remain confident in the long-term benefit of these strategic actions.
Speaker #3: As part of our ongoing portfolio optimization efforts, we have decided to sell certain distribution segment assets that are no longer core to our long-term strategy.
Speaker #3: This decision reflects our focus on simplifying the business and allocating capital to areas with the strongest strategic fit. This action is not a reflection of underlying operational performance, but rather an opportunistic step to sharpen our focus and strengthen the balance sheet.
Speaker #3: We expect proceeds from the transaction to enhance financial flexibility and support our capital allocation priorities going forward. With the strategic actions we have taken to optimize our portfolio, improve our cost structure, and enhance our balance sheet, OneWater is well positioned to continue to gain share and expand profitability as conditions normalize.
Austin Singleton: We expect proceeds from the transaction to enhance financial flexibility and support our capital allocation priorities going forward. With the strategic actions we have taken to optimize our portfolio, improve our cost structure, and enhance our balance sheet, OneWater is well positioned to continue gain share and expanding profitability as conditions normalize. With that, I will turn it over to Anthony.
We expect proceeds from the transaction to enhance financial flexibility and support our capital allocation priorities going forward. With the strategic actions we have taken to optimize our portfolio, improve our cost structure, and enhance our balance sheet, OneWater is well positioned to continue gain share and expanding profitability as conditions normalize. With that, I will turn it over to Anthony.
Speaker #3: With that, I will turn it over to
Anthony Asquith: Thanks, Austin, and good morning, everyone. During the quarter, lower unit volumes were offset by pricing and mix as we improved our margin profile. While the first quarter includes the seasonality slower winter months, we were encouraged to see the less price resistance from our customers during the purchase process. This was driven in part by a more stable news environment around tariffs and interest rates, which helped support customer sentiment. The early boat show season has kicked off, and we will continue to stay close to our customers to gather insights as we move into the peak selling season. Inventory across the industry is normalizing, and as Austin mentioned, we entered the calendar year from the position of strength with a healthy mix of new boats across our premium portfolio of brands. Some new and exciting models from our top manufacturers.
Anthony Asquith: Thanks, Austin, and good morning, everyone. During the quarter, lower unit volumes were offset by pricing and mix as we improved our margin profile. While the first quarter includes the seasonality slower winter months, we were encouraged to see the less price resistance from our customers during the purchase process. This was driven in part by a more stable news environment around tariffs and interest rates, which helped support customer sentiment. The early boat show season has kicked off, and we will continue to stay close to our customers to gather insights as we move into the peak selling season. Inventory across the industry is normalizing, and as Austin mentioned, we entered the calendar year from the position of strength with a healthy mix of new boats across our premium portfolio of brands. Some new and exciting models from our top manufacturers.
Speaker #2: Thanks, Austin, and good morning, everyone. During the quarter, although our unit volumes were offset by pricing and mix as we improved our margin profile, while the first quarter includes the seasonality's slower winter months, we were encouraged to see the less price resistance from our customers during the purchase process.
Speaker #2: This was driven in part by a more stable news environment around tariffs and interest rates. Which helped support customer sentiment. The early boat-show season has kicked off, and we will continue to stay close to our customers to gather insights as we move into the peak selling season.
Speaker #2: Inventory across the industry is normalizing. And as Austin mentioned, we entered the calendar year from the position of strength with a healthy mix of new boats across our premium portfolio of brands.
Speaker #2: Some new and exciting models from our top manufacturers. In addition, trade-in availability has continued to improve, supporting continued growth in the pre-owned boat sales.
Anthony Asquith: In addition, trade-in availability has continued to improve, supporting continued growth in the pre-owned boat sales. Gross margins benefited from our strategic initiatives to optimize inventory and enhance profitability, partially offset by a variability of commodity product margins in the distribution segment. We expect the overall positive impact to continue in the quarters ahead, but there will be some variability quarter to quarter. Overall, we expect new boat margins to improve by 100 basis points on the year as a whole. Expanding profitability is a top priority for the year, and we are driving that across dealerships by doing what we do best, taking care of our customers. We have an incredible team leveraging our CRM, advanced inventory management tools, and the best inventory network in the industry to locate and deliver the customers the boat of their dreams.
In addition, trade-in availability has continued to improve, supporting continued growth in the pre-owned boat sales. Gross margins benefited from our strategic initiatives to optimize inventory and enhance profitability, partially offset by a variability of commodity product margins in the distribution segment. We expect the overall positive impact to continue in the quarters ahead, but there will be some variability quarter to quarter. Overall, we expect new boat margins to improve by 100 basis points on the year as a whole. Expanding profitability is a top priority for the year, and we are driving that across dealerships by doing what we do best, taking care of our customers. We have an incredible team leveraging our CRM, advanced inventory management tools, and the best inventory network in the industry to locate and deliver the customers the boat of their dreams.
Speaker #2: Gross margins benefited from our strategic initiatives to optimize inventory and enhance profitability. Partially offset by a variability of commodity product margins in the distribution segment.
Speaker #2: We expect the overall positive impact to continue in the quarters ahead, but there will be some variability quarter to quarter. Overall, we expect new boat margins to improve by 100 basis points on the year as a whole.
Speaker #2: Expanding profitability is a top priority for the year, and we are driving that across dealerships by doing what we do best: taking care of our customers, we have an incredible team leveraging our CRM, advanced inventory management tools, and the best inventory network in the industry to locate and deliver the customers the boat of their dreams.
Speaker #2: And with that, I'd like to turn the call over to
Anthony Asquith: With that, I'd like to turn the call over to Jack.
With that, I'd like to turn the call over to Jack.
Speaker #2: Jack. Thanks, Anthony.
Jack Ezell: Thanks, Anthony. Fiscal first quarter revenue was $381 million, representing a 1% increase compared to the $376 million in the prior year period. New boat sales were down 6% compared to the prior year, and pre-owned boat sales were 24% higher, driven by both increased unit sales and average unit price. Service parts and other revenue grew by 10% compared to the prior year period. This growth demonstrates improvements in our distribution segment, the strength of our service operations, and the loyalty of our customer base, even during periods of softer new boat demand. Finance insurance income decreased slightly as a percentage of total sales due to the mix shift in products sold.... First quarter gross profit increased to $89 million, compared to $84 million in the prior year period.
Jack Ezzel: Thanks, Anthony. Fiscal first quarter revenue was $381 million, representing a 1% increase compared to the $376 million in the prior year period. New boat sales were down 6% compared to the prior year, and pre-owned boat sales were 24% higher, driven by both increased unit sales and average unit price. Service parts and other revenue grew by 10% compared to the prior year period. This growth demonstrates improvements in our distribution segment, the strength of our service operations, and the loyalty of our customer base, even during periods of softer new boat demand. Finance insurance income decreased slightly as a percentage of total sales due to the mix shift in products sold.... First quarter gross profit increased to $89 million, compared to $84 million in the prior year period.
Speaker #1: Fiscal first quarter revenue was $381 million, representing a 1% increase compared to $376 million in the prior year period. New boat sales were down 6% compared to the prior year, and pre-owned boat sales were 24% higher, driven by both increased unit sales and average unit price.
Speaker #1: Service parts and other revenue grew by 10% compared to the prior year period. This growth demonstrates improvements in our distribution segment, the strength of our service operations, and the loyalty of our customer base even during periods of softer new boat demand.
Speaker #1: Finance insurance income decreased slightly as a percentage of total sales due to the mixed shift in products sold. First quarter growth profit increased to $89, compared to $84 in the prior year period.
Speaker #1: Most importantly, our gross profit margin expanded to 23.5%, an improvement of 110 basis points compared to the prior-year quarter. This margin expansion was driven by gross margins on new boats sold, pre-owned boat sales volumes, and the positive impacts of our portfolio optimization efforts.
Jack Ezell: Most importantly, our gross profit margin expanded to 23.5%, an improvement of 110 basis points compared to the prior year quarter. This margin expansion was driven by gross margins on new boats sold, pre-owned boat sales volumes, and the positive impacts of our port portfolio optimization efforts. Selling, General, and Administrative expenses totaled $81 million, compared to $79 million in the prior year period. The increase was due to higher variable expenses, including sales commission, that increased due to the higher gross margins on boats sold. During the quarter, we recognized a $7 million impairment charge related to certain distribution assets classified as held for sale. Net loss for the quarter totaled $8 million, or $0.47 per diluted share, compared to a net loss of $14 million, or $0.81 per diluted share in the prior period.
Most importantly, our gross profit margin expanded to 23.5%, an improvement of 110 basis points compared to the prior year quarter. This margin expansion was driven by gross margins on new boats sold, pre-owned boat sales volumes, and the positive impacts of our port portfolio optimization efforts. Selling, General, and Administrative expenses totaled $81 million, compared to $79 million in the prior year period. The increase was due to higher variable expenses, including sales commission, that increased due to the higher gross margins on boats sold. During the quarter, we recognized a $7 million impairment charge related to certain distribution assets classified as held for sale. Net loss for the quarter totaled $8 million, or $0.47 per diluted share, compared to a net loss of $14 million, or $0.81 per diluted share in the prior period.
Speaker #1: Selling, general, and administrative expenses totaled $81 million compared to $79 million in the prior year period. The increase was due to higher variable expenses, including sales commissions, that increased due to the higher gross margins on boats sold.
Speaker #1: During the quarter, we recognized a $7 million impairment charge related to certain distribution assets classified as held for sale. Net loss for the quarter totaled $8 million, or $0.47 per diluted share, compared to a net loss of $14 million, or $0.81 per diluted share in the prior period.
Speaker #1: This variance was largely driven by a $13 income tax benefit in the quarter compared to a $5 income tax benefit in the prior year period.
Jack Ezell: This variance was largely driven by a $13 million income tax benefit in the quarter, compared to a $5 million income tax benefit in the prior year period. Adjusted loss per diluted share was $0.04, compared to adjusted loss per diluted share of $0.54 in the prior year period. Adjusted EBITDA increased to $4 million, compared to $2 million in the prior year. Now turning to the balance sheet. During the quarter, we classified certain assets and liabilities within our distribution segment as held for sale, following a board-approved plan to divest these operations. These amounts are measured at the lower of carrying value or estimated fair value, less cost to sell. We expect the transaction to close prior to 31 March 2026, with net proceeds applied toward repayment under our credit facility.
This variance was largely driven by a $13 million income tax benefit in the quarter, compared to a $5 million income tax benefit in the prior year period. Adjusted loss per diluted share was $0.04, compared to adjusted loss per diluted share of $0.54 in the prior year period. Adjusted EBITDA increased to $4 million, compared to $2 million in the prior year. Now turning to the balance sheet. During the quarter, we classified certain assets and liabilities within our distribution segment as held for sale, following a board-approved plan to divest these operations. These amounts are measured at the lower of carrying value or estimated fair value, less cost to sell. We expect the transaction to close prior to 31 March 2026, with net proceeds applied toward repayment under our credit facility.
Speaker #1: Adjusted loss per diluted share was $0.04, compared to an adjusted loss per diluted share of $0.54 in the prior year period. Adjusted EBITDA increased to $4 million, compared to $2 million in the prior year.
Speaker #1: Now turning to the balance sheet. During the quarter, we classified certain assets and liabilities within our distribution segment as held for sale, following a board-approved plan to divest of these operations.
Speaker #1: These amounts are measured at the lower of carrying value or estimated fair value, less cost to sell. We expect the transaction to close prior to March 31st, 2026, with net proceeds applied toward repayment under our credit facility.
Speaker #1: There is no impact to the first quarter revenue or adjusted EBITDA from the held-for-sale classification. While these amounts are classified as held for sale at this point, we have not entered into a definitive agreement.
Jack Ezell: There is no impact to the first quarter revenue or Adjusted EBITDA from the held for sale classification. While these amounts are classified as held for sale, at this point, we have not entered into a definitive agreement. Since these negotiations are ongoing, we cannot provide additional comments regarding the potential for completing a transaction. We will provide future updates if a transaction is completed. As of 31 December 2025, we maintained total liquidity of approximately $46 million, including $32 million of cash and cash equivalents, plus availability on our credit facilities. Total inventory decreased to $602 million as of 31 December 2025, compared to $637 million as of 31 December 2024. This reflects inventory reclassified as held for sale and the impacts from our disciplined inventory optimization.
There is no impact to the first quarter revenue or Adjusted EBITDA from the held for sale classification. While these amounts are classified as held for sale, at this point, we have not entered into a definitive agreement. Since these negotiations are ongoing, we cannot provide additional comments regarding the potential for completing a transaction. We will provide future updates if a transaction is completed. As of 31 December 2025, we maintained total liquidity of approximately $46 million, including $32 million of cash and cash equivalents, plus availability on our credit facilities. Total inventory decreased to $602 million as of 31 December 2025, compared to $637 million as of 31 December 2024. This reflects inventory reclassified as held for sale and the impacts from our disciplined inventory optimization.
Speaker #1: Since these negotiations are ongoing, we cannot provide additional comments regarding the potential for completing a transaction. We will provide future updates if a transaction is completed.
Speaker #1: As of December 31, 2025, we maintain total liquidity of approximately $46 million, including $32 million of cash and cash equivalents, plus availability on our credit facilities.
Speaker #1: Total inventory decreased to $602 million as of December 31, 2025, compared to $637 million as of December 31, 2024. This reflects inventory reclassified as held for sale and the impacts from our disciplined inventory optimization.
Speaker #1: Our long-term debt position was $399 million as of the quarter end, and net debt represented 5.1 times our trailing 12 months adjusted EBITDA. Reducing leverage remains our top capital allocation priority in the year, and we are confident in our path forward.
Jack Ezell: Our long-term debt position was $399 million as of the quarter end, and net debt representing 5.1 times our trailing twelve-month Adjusted EBITDA. Reducing leverage remains our top capital allocation priority in the year, and we are confident in our path forward. Based on our solid first quarter performance and current market visibility, we are maintaining our fiscal year 2026 guidance ranges and remain cautiously optimistic. Our outlook is anchored in our expectation that the industry will be flat to down low single digits year-over-year. While we anticipate outperforming the industry, we expect same-store sales to be impacted by brand rationalization headwinds, resulting in flat same-store sales overall.
Our long-term debt position was $399 million as of the quarter end, and net debt representing 5.1 times our trailing twelve-month Adjusted EBITDA. Reducing leverage remains our top capital allocation priority in the year, and we are confident in our path forward. Based on our solid first quarter performance and current market visibility, we are maintaining our fiscal year 2026 guidance ranges and remain cautiously optimistic. Our outlook is anchored in our expectation that the industry will be flat to down low single digits year-over-year. While we anticipate outperforming the industry, we expect same-store sales to be impacted by brand rationalization headwinds, resulting in flat same-store sales overall.
Speaker #1: Based on our solid first quarter performance and current market visibility, we are maintaining our fiscal year 2026 guidance ranges and remain cautiously optimistic. Our outlook is anchored in our expectation that the industry will be flat to down low single digits year over year.
Speaker #1: While we anticipate outperforming the industry, we expect same-store sales to be impacted by brand rationalization headwinds resulting in flat same-store sales overall. We anticipate total sales to be in the range of $1.83 billion to $1.93 billion, and we expect adjusted EBITDA to be in the range of $65 to $85 million, and adjusted earnings per diluted share to be in the range of $25 to $75.
Jack Ezell: We anticipate total sales to be in the range of $1.83 to 1.93 billion, and we expect adjusted EBITDA to be in the range of $65 to 85 million and adjusted earnings per diluted share to be in the range of $0.25 to 0.75. As we move closer to the selling season, our strategic priorities are clear. Driving profitability and reducing balance sheet leverage are the focus for OneWater. As we await signs for a broader marine recovery, we see significant upside potential as the industry recovers and market volumes return towards historical long-term averages. We will continue to execute with precision and position OneWater to emerge from this cycle as even a stronger and more profitable organization. This concludes our prepared remarks. Operator, will you please open the line for questions?
We anticipate total sales to be in the range of $1.83 to 1.93 billion, and we expect adjusted EBITDA to be in the range of $65 to 85 million and adjusted earnings per diluted share to be in the range of $0.25 to 0.75. As we move closer to the selling season, our strategic priorities are clear. Driving profitability and reducing balance sheet leverage are the focus for OneWater. As we await signs for a broader marine recovery, we see significant upside potential as the industry recovers and market volumes return towards historical long-term averages. We will continue to execute with precision and position OneWater to emerge from this cycle as even a stronger and more profitable organization. This concludes our prepared remarks. Operator, will you please open the line for questions?
Speaker #1: As we move closer to the selling season, our strategic priorities are clear. Driving profitability and reducing balance sheet leverage are the focus for OneWater.
Speaker #1: As we await signs for a broader marine recovery, we see significant upside potential as the industry recovers and market volumes return towards historical long-term averages.
Speaker #1: We will continue to execute with precision and position OneWater to emerge from this cycle as even a stronger and more profitable organization. This concludes our prepared remarks.
Speaker #1: Operator, will you please open the line for questions?
Speaker #2: Thank you. At this time, I would like to remind everyone in order to ask a question, press star, then the number one on your telephone keypad.
Operator: Thank you. At this time, I would like to remind everyone, in order to ask a question, press star, then the number one on the telephone keypad. We'll pause for just a moment to compile the Q&A roster. Your first question comes from Joe Altobello from Raymond James. Please go ahead.
Operator: Thank you. At this time, I would like to remind everyone, in order to ask a question, press star, then the number one on the telephone keypad. We'll pause for just a moment to compile the Q&A roster. Your first question comes from Joe Altobello from Raymond James. Please go ahead.
Speaker #2: We'll pause for just a moment to compile the Q&A roster. Your first question comes from Joe Altobello from Raymond James. Please go ahead.
Speaker #3: Thanks. Hey, guys.
Speaker #3: Thanks. Hey, guys. Go ahead. Good morning. I had a quick question on the sort of mix shift you're seeing within your segments. If you look at, obviously, new versus pre-owned, pre-owned significantly outperformed this quarter.
Joe Altobello: Thanks. Hey, guys. Good morning. I had a quick question on the sort of mix shift you're seeing within your segments. If you look at, obviously, new versus pre-owned, you know, pre-owned significantly outperformed this quarter. Is that a shift you're seeing among buyers toward lower-priced units, or is that just better availability of used inventory?
Joe Altobello: Thanks. Hey, guys. Good morning. I had a quick question on the sort of mix shift you're seeing within your segments. If you look at, obviously, new versus pre-owned, you know, pre-owned significantly outperformed this quarter. Is that a shift you're seeing among buyers toward lower-priced units, or is that just better availability of used inventory?
Speaker #3: Is that a shift you're seeing among buyers toward lower-priced units, or is that just better availability of used inventory?
Speaker #4: Yes, definitely better availability. We're just taking in more trades. We've spoken to this in the past, that you had a lot, especially in the peak of COVID and stuff.
Jack Ezell: Yeah, it's definitely better availability. You know, we're just taking in more trades. You know, we've spoken to this in the past, that you had a lot, especially in the peak of COVID and stuff, you had a lot of pre-owned boats that went from person to person instead of running through dealerships because of the time lag. And because there's not really a time lag anymore, we're getting more trades, so we have more to offer to the consumer.
Anthony Asquith: Yeah, it's definitely better availability. You know, we're just taking in more trades. You know, we've spoken to this in the past, that you had a lot, especially in the peak of COVID and stuff, you had a lot of pre-owned boats that went from person to person instead of running through dealerships because of the time lag. And because there's not really a time lag anymore, we're getting more trades, so we have more to offer to the consumer.
Speaker #4: You had a lot of pre-owned boats that went from person to person. Instead of running through dealerships because of the time lag and because there's not really a time lag anymore, we're getting more trades, so we have more to offer to the
Speaker #4: consumer. Got
Joe Altobello: Got it. Okay. And in terms of the outlook for this year, obviously, you kept your, your guidance intact, but your, your industry outlook is a little bit, a little bit softer. How are you thinking about, you know, things like year-end net leverage and year-end inventory, for example?
Joe Altobello: Got it. Okay. And in terms of the outlook for this year, obviously, you kept your, your guidance intact, but your, your industry outlook is a little bit, a little bit softer. How are you thinking about, you know, things like year-end net leverage and year-end inventory, for example?
Speaker #3: Okay. And in terms of the outlook for this year, obviously, you kept your guidance intact, but your industry outlook is a little bit softer.
Speaker #3: How are you thinking about things like year-end net leverage and year-end inventory, for
Speaker #3: example? I
Speaker #4: Well, I think I'll
Jack Ezell: Well, I think I'll let Jack jump in.
Anthony Asquith: Well, I think I'll let Jack jump in.
Speaker #4: let Jack jump in. Yeah, go ahead,
[Company Representative] (OneWater Marine Group): Well, I think-
Jack Ezzel: Well, I think-
Speaker #3: think.
Jack Ezell: We kind of leverage... Yeah, go ahead, Jack.
Anthony Asquith: We kind of leverage... Yeah, go ahead, Jack.
Speaker #4: Jack.
Speaker #5: Yeah. I think from a leverage perspective, right, with the sale of the distribution assets, that should bring our leverage down to almost four times at the end of the March quarter.
[Company Representative] (OneWater Marine Group): Yeah, I think from a leverage perspective, right, with the sale of the distribution assets, that should bring our leverage down to almost 4x at the end of the September, the March quarter, and then under 4x by the year-end. So I think that's going right down the way we'd like and getting to where we want it to be. As far as inventory, inventory is great now, and we're going to manage it, you know, according to what's happening at retail. You know, Q1 SSI data, you know, for the segments we operate in was, I want to say like negative, you know, low double digits, high single digits. So that's just a little softer.
Jack Ezzel: Yeah, I think from a leverage perspective, right, with the sale of the distribution assets, that should bring our leverage down to almost 4x at the end of the September, the March quarter, and then under 4x by the year-end. So I think that's going right down the way we'd like and getting to where we want it to be. As far as inventory, inventory is great now, and we're going to manage it, you know, according to what's happening at retail. You know, Q1 SSI data, you know, for the segments we operate in was, I want to say like negative, you know, low double digits, high single digits. So that's just a little softer.
Speaker #5: And then under four times by the year-end. So I think that's going right down the way we'd like and getting to where we want it to be.
Speaker #5: As far as inventory, inventory is great now, and we're going to manage it according to what's happening at retail. Q1 SSI data for the segments we operate in was, I want to say, like high single digits.
Speaker #5: So that's a little softer, but again, Joe, it's such a weird quarter with the December and the holidays and everything, so we don't want to get too far ahead of it.
[Company Representative] (OneWater Marine Group): But again, Joe, it's, it's such a such a weird quarter with the December and the holidays and everything, so we, we don't want to get too far ahead of it and trying to see what's happening there. If you think about, you know, long-term, you know, long-term numbers, right? We're at, you know, 145,000 units, you know, new units versus a long-term average of, like, 180,000. And, you know, we still expect to kind of start, at some point, start reflecting and turning back towards that long-term average.
But again, Joe, it's, it's such a such a weird quarter with the December and the holidays and everything, so we, we don't want to get too far ahead of it and trying to see what's happening there. If you think about, you know, long-term, you know, long-term numbers, right? We're at, you know, 145,000 units, you know, new units versus a long-term average of, like, 180,000. And, you know, we still expect to kind of start, at some point, start reflecting and turning back towards that long-term average.
Speaker #5: And trying to see what's happening there. If you think about long-term, long-term numbers, right, we're at 145,000 units new units versus a long-term average of like 180, and we still expect to kind of start at some point, start reflecting and turning back towards that long-term
Speaker #5: average. Got it.
[Analyst] (Benchmark Company): Got it. Maybe one last one for me. What are you seeing so far from boat show season?
Joe Altobello: Got it. Maybe one last one for me. What are you seeing so far from boat show season?
Speaker #3: And maybe one last one for me. What do you think so far from both shows?
[Company Representative] (OneWater Marine Group): It's been pretty good. You know, well, let me say, it's been what we thought, flat. You know, it just seems like it's flat, maybe even you could say slightly down, but the enthusiasm is there, the consumer still is there. And I think one of the things that probably shocked us a little bit, and again, we don't want to get out in front of our skis here on the margin, but the margin's better than we expected. Now, a little bit of that comes into model mix, and it comes into, you know, people at the boat shows are typically buying the new hot unit where you don't have as much competition or, you know, it's not as a competitive environment versus just the same old, same old, because it's mostly limited stuff.
Speaker #4: It's been pretty good. Well, let me say, it's been what we thought, flat. It just seems like it's flat, maybe even you could say slightly down, but the enthusiasm is there.
Austin Singleton: It's been pretty good. You know, well, let me say, it's been what we thought, flat. You know, it just seems like it's flat, maybe even you could say slightly down, but the enthusiasm is there, the consumer still is there. And I think one of the things that probably shocked us a little bit, and again, we don't want to get out in front of our skis here on the margin, but the margin's better than we expected. Now, a little bit of that comes into model mix, and it comes into, you know, people at the boat shows are typically buying the new hot unit where you don't have as much competition or, you know, it's not as a competitive environment versus just the same old, same old, because it's mostly limited stuff.
Speaker #4: The consumer still is there. And I think one of the things that probably shocked us a little bit, and again, we don't want to get out in front of our skis here on the margin, but the margin's better than we expected.
Speaker #4: Now, a little bit of that comes into model mix, and it comes in, too. People at the boat shows are typically buying the new hot unit, where you don't have as much competition, or it's not as a competitive environment versus just the same old, same old, because it's mostly limited stuff.
Speaker #4: But it's been good. I think we feel like we've called it pretty good, that this is going to be for us, maybe flat to slightly up in it's really this year could be a margin play why everybody line.
[Company Representative] (OneWater Marine Group): But, you know, it's been good. I, you know, I think we feel like we've called it pretty good, that this is going to be, you know, for us, maybe flat to slightly up. And, you know, it's really this year could be a margin play while everybody else starts to get their inventory in line, and, you know, it could end up being a decent year.
But, you know, it's been good. I, you know, I think we feel like we've called it pretty good, that this is going to be, you know, for us, maybe flat to slightly up. And, you know, it's really this year could be a margin play while everybody else starts to get their inventory in line, and, you know, it could end up being a decent year.
Speaker #4: And it could end up being a decent year.
Operator: Pardon me. Your next question comes from Craig Kennison from Baird. Please go ahead.
Operator: Pardon me. Your next question comes from Craig Kennison from Baird. Please go ahead.
Speaker #2: Pardon me. Your next question comes from Craig Kennison from Baird. Please go
Speaker #2: ahead. Hey, good morning.
Craig Kennison: Hey, good morning. Thanks for taking my question. I wanted to follow up on the question Joe had about the pre-owned market. It, it sounds like availability is much better, and I think, Austin, you mentioned that maybe there are just fewer person-to-person transactions and more, you know, person-to-dealer transactions. But I guess what I'm curious about is, are consumers who are trading a boat trading to buy another boat, or, you know, is that pandemic-era buyer just maybe exiting the industry at a different rate?
Craig Kennison: Hey, good morning. Thanks for taking my question. I wanted to follow up on the question Joe had about the pre-owned market. It, it sounds like availability is much better, and I think, Austin, you mentioned that maybe there are just fewer person-to-person transactions and more, you know, person-to-dealer transactions. But I guess what I'm curious about is, are consumers who are trading a boat trading to buy another boat, or, you know, is that pandemic-era buyer just maybe exiting the industry at a different rate?
Speaker #6: Thanks for taking my question. I wanted to follow up on the question Joe had about the pre-owned market. It sounds like availability is much better.
Speaker #6: And I think, Austin, you mentioned that maybe there are just fewer person-to-person transactions and more person-to-dealer transactions. But I guess what I'm curious about is: are consumers who are trading a boat doing so to buy another boat, or is that pandemic-era buyer just maybe exiting the industry at a different pace?
Speaker #6: rate? Well, I don't think it'd be considered a
[Company Representative] (OneWater Marine Group): Well, I don't think it'd be considered a trade-in if they weren't trading it for something. You know, that would be a downright out sell. And I will tell you, you know, Anthony, how many buyers do we have today?
Austin Singleton: Well, I don't think it'd be considered a trade-in if they weren't trading it for something. You know, that would be a downright out sell. And I will tell you, you know, Anthony, how many buyers do we have today?
Speaker #4: Trade-in if they weren't trading it for something. That would be a downright outsell. And I will tell you, Anthony, how many buyers do we have today?
[Company Representative] (OneWater Marine Group): What do you mean buyers? I'm not understanding.
Anthony Asquith: What do you mean buyers? I'm not understanding.
Speaker #7: What do you mean buyers? I'm not understanding.
[Company Representative] (OneWater Marine Group): Just guys that sit around and buy boats.
Austin Singleton: Just guys that sit around and buy boats.
Speaker #4: Just guys that sit around and dial about boats.
[Company Representative] (OneWater Marine Group): Oh, yeah. Yeah, there's about 12 of them. Yes. That's all we're doing.
Anthony Asquith: Oh, yeah. Yeah, there's about 12 of them. Yes. That's all we're doing.
Speaker #7: Oh, yeah. There's about 12 of them. Yes. That's all we're dealing
Speaker #7: with. Yeah.
[Company Representative] (OneWater Marine Group): Yeah, 12 guys. Their life, their livelihood depends on them buying boats, and they're not being able to buy any more today than they were two years ago. It's still, it's just a tough environment to find that product. I'll go back and, you know, I'm going to be a broken record. Hopefully, it never changes. But again, it's one of the biggest problems we have or biggest issues is there's not enough pre-owned inventory out there. We could take twice what we have. And, you know, you get in there and, you know, it's just a tough environment to really get any kind of meaningful numbers going at it. I mean, we looked at it, and I think we're still, like, 0.5% of the total pre-owned market.
Austin Singleton: Yeah, 12 guys. Their life, their livelihood depends on them buying boats, and they're not being able to buy any more today than they were two years ago. It's still, it's just a tough environment to find that product. I'll go back and, you know, I'm going to be a broken record. Hopefully, it never changes. But again, it's one of the biggest problems we have or biggest issues is there's not enough pre-owned inventory out there. We could take twice what we have. And, you know, you get in there and, you know, it's just a tough environment to really get any kind of meaningful numbers going at it. I mean, we looked at it, and I think we're still, like, 0.5% of the total pre-owned market.
Speaker #4: 12 guys that their livelihood depends on them buying boats, and they're not being able to buy any more today than they were two years ago.
Speaker #4: It's still just a tough environment to find that product. I'll go back and I'm going to be a broken record, hopefully it never changes, but again, it's one of the biggest problems we have or biggest issues is there's not enough pre-owned inventory out there.
Speaker #4: We could take twice what we have. And you get in there and it's just a tough environment to really get any kind of meaningful numbers going at it.
Speaker #4: I mean, we look at it, and I think we're still like one-half of 1% of the total pre-owned market. And so there's a lot of runway there, but the real difference today, than COVID, was the consumer has less time—or they have all the time they want, but the consumer is not, they don't have to wait nine months, 12 months, 16 months to get their new boat.
[Company Representative] (OneWater Marine Group): And, you know, so there's a lot of runway there, but it's the real difference today than COVID was the consumer has less time, or they have all the time they want, but the consumer does not have the they don't have to wait nine months, 12 months, 16 months to get their new boat. Most of the time, we can source it out of our inventory on a new boat side, you know, side of things and get it to them in a couple of weeks. So they don't have that huge amount of time to tell 50 people that they're getting a new boat and somebody go, "What are you doing with your old one?" And that's why we started to see an uptick. You know, the uptick in trade-ins really started last year.
And, you know, so there's a lot of runway there, but it's the real difference today than COVID was the consumer has less time, or they have all the time they want, but the consumer does not have the they don't have to wait nine months, 12 months, 16 months to get their new boat. Most of the time, we can source it out of our inventory on a new boat side, you know, side of things and get it to them in a couple of weeks. So they don't have that huge amount of time to tell 50 people that they're getting a new boat and somebody go, "What are you doing with your old one?" And that's why we started to see an uptick. You know, the uptick in trade-ins really started last year.
Speaker #4: Most of the time, we can source it out of our inventory on a new boat side of things and get it to them in a couple of weeks.
Speaker #4: So they don't have that huge amount of time to tell 50 people that they're getting a new boat and somebody goes, 'What are you doing with your old one?' And that's why we started to see an uptick.
Speaker #4: The uptick in trade-ins really started last year. And it's just because people are being able to get their new boat quicker, and so they're not wanting to they don't have the time to mess around or keep using their old boat and tell people about it.
[Company Representative] (OneWater Marine Group): It's just because people are being able to get their new boat quicker, and so they're not, they don't have the time to mess around or keep using their old boat and tell people about it. I think that's really the only dynamic that's changed.
It's just because people are being able to get their new boat quicker, and so they're not, they don't have the time to mess around or keep using their old boat and tell people about it. I think that's really the only dynamic that's changed.
Speaker #4: I think that's really the only dynamic that's
Speaker #4: I think that's really the only dynamic that's changed. That's
Craig Kennison: That's helpful. Thanks. And then a different question just on inventory. How would you frame the freshness of your inventory, current versus non-current, and how has that trended in the last several quarters?
Craig Kennison: That's helpful. Thanks. And then a different question just on inventory. How would you frame the freshness of your inventory, current versus non-current, and how has that trended in the last several quarters?
Speaker #1: helpful. Thanks. And then a different question, just on inventory. How would you frame the freshness of your inventory current versus non-current, and how has that trended in the last several quarters?
Speaker #4: It is in the best shape that it's been since I can remember being in this business. And it was painful to get there, but we're there.
[Company Representative] (OneWater Marine Group): It is in the best shape that it's been since I can remember being in this business. And it was painful to get there, but we're there. And, you know, we still have some last year models and some stuff we're moving through, but we're in a really, really comfortable place, when it comes to dated or aged inventory. And I... You know, talking with Wells, there's still some cleanup in the industry, but the majority of your premium dealers are in really good shape today, versus where they were 6 months, 9 months, 12 months ago. I think that, you know, there's still a lot of inventory out there that's dated in the industry, but most of that's on the value side.
Austin Singleton: It is in the best shape that it's been since I can remember being in this business. And it was painful to get there, but we're there. And, you know, we still have some last year models and some stuff we're moving through, but we're in a really, really comfortable place, when it comes to dated or aged inventory. And I... You know, talking with Wells, there's still some cleanup in the industry, but the majority of your premium dealers are in really good shape today, versus where they were 6 months, 9 months, 12 months ago. I think that, you know, there's still a lot of inventory out there that's dated in the industry, but most of that's on the value side.
Speaker #4: And we still have some last-year models and some stuff we're moving through, but we're in a really, really comfortable place when it comes to day-to-day aged inventory.
Speaker #4: And talking with Wells, there's still some cleanup in the industry, but the majority of your premium dealers are in really good shape today. Versus where they were six months, nine months, 12 months ago.
Speaker #4: I think that there's still a lot of inventory out there that's dated in the industry, but most of that's on the value side.
Operator: Your next question comes from Michael Albanese from Benchmark Company. Please go ahead.
Operator: Your next question comes from Michael Albanese from Benchmark Company. Please go ahead.
Speaker #2: Your next question comes Craig. from Michael Albanese from Bank Smart. Please go
Speaker #2: Your next question comes Craig. from Michael Albanese from Bank Smart. Please go ahead. Yeah.
[Analyst] (Benchmark Company): Yeah. Hey, good morning, guys. Just wanted to ask if you could comment on any impacts from the storm that have and the cold that's rolled through the country, particularly in some of the states?
Michael Albanese: Yeah. Hey, good morning, guys. Just wanted to ask if you could comment on any impacts from the storm that have and the cold that's rolled through the country, particularly in some of the states?
Speaker #1: Hey, good morning, guys. Just wanted to ask if you could comment on any impacts from the storm and the cold that's rolled through the country.
Speaker #1: Particularly in some of the states.
Speaker #3: Yeah. Luckily for us, that's kind of in a it kind of came through an area that we don't really have a whole lot of representation in.
[Company Representative] (OneWater Marine Group): ... Yeah, luckily for us, that's kind of in an area that we don't really have a whole lot of representation in. You know, the Carolinas got a little bit, but it's, you know, being that we're in January, fixing to roll into February, it's not really boating season. It's boat show season, but not boating season, so we're not really feeling any impact from that right now. You know, I think Texas was an area that we've had historically, we've had some issues with weather in the past, and it just wasn't as bad there as it was through like that northern Mississippi, Tennessee, southern Kentucky, going into, you know, North Carolina, maybe touching South Carolina. Just, that's non-issue for us.
Anthony Asquith: ... Yeah, luckily for us, that's kind of in an area that we don't really have a whole lot of representation in. You know, the Carolinas got a little bit, but it's, you know, being that we're in January, fixing to roll into February, it's not really boating season. It's boat show season, but not boating season, so we're not really feeling any impact from that right now. You know, I think Texas was an area that we've had historically, we've had some issues with weather in the past, and it just wasn't as bad there as it was through like that northern Mississippi, Tennessee, southern Kentucky, going into, you know, North Carolina, maybe touching South Carolina. Just, that's non-issue for us.
Speaker #3: The Carolinas got a little bit, but it's being that we're in January, fixing to roll into February, it's not really boating season. It's boat show season, but not boating season.
Speaker #3: So we're not really feeling any impact from that right now. I think Texas was an area that we've had historically, we've had some issues with weather in the past, and it wasn't as bad there as it was through like that northern Mississippi, Tennessee, southern Kentucky going into the North Carolinas.
Speaker #3: Maybe touching the South Carolina. There's non-issue for
Speaker #3: us.
Speaker #1: What about from
[Analyst] (Benchmark Company): What about from a boat show perspective? Do you think it's impacted traffic?
Michael Albanese: What about from a boat show perspective? Do you think it's impacted traffic?
Speaker #1: a boat show perspective? Do you think it's impacted traffic?
[Company Representative] (OneWater Marine Group): Can't tell you because we don't really operate in any boat shows that would be impacted by that. So I-
Anthony Asquith: Can't tell you because we don't really operate in any boat shows that would be impacted by that. So I-
Speaker #3: Can't tell you because we don't really operate in any boat shows that would be impacted by that. So I don't know. I don't
[Analyst] (Benchmark Company): Fair.
Michael Albanese: Fair.
[Company Representative] (OneWater Marine Group): I don't know. I don't know.
Anthony Asquith: I don't know. I don't know.
Speaker #3: know. Well, I'd say we don't
[Company Representative] (OneWater Marine Group): Well, I'd say we don't operate in a material way, and we have some representation, like in the New York Boat Show, which did have, you know, the last day cut off, but it's a very small show for us.
Jack Ezzel: Well, I'd say we don't operate in a material way, and we have some representation, like in the New York Boat Show, which did have, you know, the last day cut off, but it's a very small show for us.
Speaker #1: operate in a material way, and we have some representation—like in the New York Boat Show, which did have the last day cut off—but it's a very small show for us.
Speaker #3: Okay. Got it.
[Analyst] (Benchmark Company): Okay. Got it. Thanks, guys.
Michael Albanese: Okay. Got it. Thanks, guys.
Speaker #1: Thanks,
Speaker #1: guys. Your next
Operator: Your next question comes from Noah Zatzkin, from KeyBanc Capital Markets. Please go ahead.
Operator: Your next question comes from Noah Zatzkin, from KeyBanc Capital Markets. Please go ahead.
Speaker #2: The question comes from Noah Zetskin from KeyBanc Capital Markets. Please go ahead.
Speaker #2: ahead. Hi.
Noah Zatzkin: Hi, thanks for taking my questions. I guess first, it's just kind of circling back to the comments made about, you know, favorable mix and maybe some like, some less resistance from buyers on price. Any anecdotes you could point to, in terms of, maybe the kind of buyers being - feeling a little bit better or being increasingly, I guess, more agnostic to kind of higher prices?
Noah Zatzkin: Hi, thanks for taking my questions. I guess first, it's just kind of circling back to the comments made about, you know, favorable mix and maybe some like, some less resistance from buyers on price. Any anecdotes you could point to, in terms of, maybe the kind of buyers being - feeling a little bit better or being increasingly, I guess, more agnostic to kind of higher prices?
Speaker #8: Thanks for taking my questions. I guess first, just kind of circling back to the comments made about favorable mix and maybe some less resistance from buyers on price.
Speaker #8: Any anecdotes you could point to in terms of maybe the kind of buyers being feeling a little bit better or being increasingly, I guess, more agnostic to kind of higher prices?
Speaker #8: Any anecdotes you could point to in terms of maybe the kinds of buyers feeling a little bit better, or being increasingly, I guess, more agnostic to kind of higher prices?
Speaker #3: Well, I don't really know if that's the case. I think the way that I would look at it or a way that I could make an example of it is if a customer came in and was looking for a boat nine months ago and it was X brand, just call it X brand, well, we probably had 25 of them in the company across the board.
[Company Representative] (OneWater Marine Group): Well, I don't really know if it's if that's the case. I think, like, the way that I would look at it or a way that I could make an example of it is if a customer came in and was looking for a boat, you know, nine months ago, and it was X brand, just call it X brand. Well, you know, we probably had 25 of them in the company across the board. The guy down the street had six, you know, that was a direct competitor. So instead of, you know, being four or five things to choose from, they had 30 things to choose from, and everybody was in a panic mode.
Jack Ezzel: Well, I don't really know if it's if that's the case. I think, like, the way that I would look at it or a way that I could make an example of it is if a customer came in and was looking for a boat, you know, nine months ago, and it was X brand, just call it X brand. Well, you know, we probably had 25 of them in the company across the board. The guy down the street had six, you know, that was a direct competitor. So instead of, you know, being four or five things to choose from, they had 30 things to choose from, and everybody was in a panic mode.
Speaker #3: The guy down the street had six. That was a direct competitor. So instead of being four or five things to choose from, they had 30 things to choose from, and everybody was in a panic mode.
Speaker #3: And I think what's really kind of more premium brands' inventory is happened is most of the cleaner than it's been, and dealers didn't haven't been ordering a lot.
[Company Representative] (OneWater Marine Group): I think what's really kind of more happened is, most of the premium brands' inventory is cleaner than it's been, and dealers haven't been ordering a lot. Manufacturers haven't been producing. You know, everybody seems to be off 35% to 45%. So the inventory is just cleaner, so there's not as much panic selling or fire selling because inventories are back in line. So it's really more like a discipline. I mean, we're by no means saying the customers coming in, we're giving them on a price, and they're writing us a check. You know, it's still a buyer's market, but instead of, you know, working this to like, you know, there's no meat left on the bone, it's kind of like, here's our best offer.
I think what's really kind of more happened is, most of the premium brands' inventory is cleaner than it's been, and dealers haven't been ordering a lot. Manufacturers haven't been producing. You know, everybody seems to be off 35% to 45%. So the inventory is just cleaner, so there's not as much panic selling or fire selling because inventories are back in line. So it's really more like a discipline. I mean, we're by no means saying the customers coming in, we're giving them on a price, and they're writing us a check. You know, it's still a buyer's market, but instead of, you know, working this to like, you know, there's no meat left on the bone, it's kind of like, here's our best offer.
Speaker #3: Manufacturers haven't producing. Everybody seems to be off 35 to 45 percent. So the inventory is just cleaner, so there's not as much panic selling or fire selling because inventories are back in line.
Speaker #3: So it's really more like a discipline. I mean, by no means are we saying the customers coming in, we're giving them a price and they're writing us a check.
Speaker #3: It's still a buyer's market, but instead of working us to there's no meat left on the bone, it's kind of like, "Here's our best offer," and then when they go to get that guy down the road, everybody's kind of have their floor.
[Company Representative] (OneWater Marine Group): Then when they go to get that guy down the road, everybody's kind of has their floor. So it's just kind of just the-
Then when they go to get that guy down the road, everybody's kind of has their floor. So it's just kind of just the-
Speaker #3: So it's just kind of just the way the industry's come back and a lot of that's just to do with now everybody's not in a panic mode of having too much inventory or having the wrong dated inventory would be probably a better way to say
[Company Representative] (OneWater Marine Group): The way the industry's come back, and a lot of that's just to do with now everybody's not in a panic mode of having too much inventory or having the wrong dated inventory, would be probably a better way to say that.
Noah Zatzkin: Got it.
Noah Zatzkin: Got it.
Jack Ezzel: The way the industry's come back, and a lot of that's just to do with now everybody's not in a panic mode of having too much inventory or having the wrong dated inventory, would be probably a better way to say that.
Speaker #3: that. Got it.
Noah Zatzkin: Got it. That's really helpful. Maybe just one more, to pry a little bit, just around the comments, in terms of kind of realizing margin benefits to different magnitudes throughout the year. Anything, in general, to keep in mind in terms of cadence would be helpful? Thanks.
Noah Zatzkin: Got it. That's really helpful. Maybe just one more, to pry a little bit, just around the comments, in terms of kind of realizing margin benefits to different magnitudes throughout the year. Anything, in general, to keep in mind in terms of cadence would be helpful? Thanks.
Speaker #8: That's really helpful. And maybe just one more to pry a little bit, just around the comments in terms of kind of realizing margin benefits to different magnitudes throughout the year.
Speaker #8: Anything in general to keep in mind in terms of cadence would be helpful. Thanks.
Speaker #3: Well, I think that's really tough for us to pinpoint because what you're going to do is you're going to have the margins going to creep up, but as the margin creeps up and the inventory continues to clean up, we'll start to lose some of those promotional dollars from the manufacturers.
[Company Representative] (OneWater Marine Group): Well, I think that's really tough for us to pinpoint because what you're gonna do is you're gonna have the margin's gonna creep up, but as the margin creeps up and the inventory continues to clean up, we'll start to lose some of those promotional dollars from the manufacturers. You know, so once the inventory... You know, like step one is inventory gets clean. Step two is, you know, retail manages their new inventory really well. They've got new, fresh stuff, margins start to increase. Then if you get any kind of uptick in just macro or just the total industry, then everybody starts ordering boats again. And as soon as people start ordering boats, and the manufacturers aren't 45% down, they're only 20% down, the promotions slide off. So there's a little bit of an offset.
Jack Ezzel: Well, I think that's really tough for us to pinpoint because what you're gonna do is you're gonna have the margin's gonna creep up, but as the margin creeps up and the inventory continues to clean up, we'll start to lose some of those promotional dollars from the manufacturers. You know, so once the inventory... You know, like step one is inventory gets clean. Step two is, you know, retail manages their new inventory really well. They've got new, fresh stuff, margins start to increase. Then if you get any kind of uptick in just macro or just the total industry, then everybody starts ordering boats again. And as soon as people start ordering boats, and the manufacturers aren't 45% down, they're only 20% down, the promotions slide off. So there's a little bit of an offset.
Speaker #3: So once the inventory—like, step one is inventory gets clean. Step two is retail manages their new inventory really well. They've got new, fresh stuff; margins start to increase.
Speaker #3: Then if you get any kind of uptick in just macro or just the total industry, then everybody starts ordering boats again. And as soon as people start ordering boats and the manufacturers aren't 45% down, they're only 20% down, the promotions slide off.
Speaker #3: So there's a little bit of an offset. So that's why there'll be some choppiness as we go through the selling season and we can't just really say, "Okay, it's a point and a half." We look at one water; we feel we gave away at least 1% last year just exiting those brands.
[Company Representative] (OneWater Marine Group): So that's why there'll be some choppiness as we go through the selling season, and we can't just really say, "Okay, it's a point and a half." We look at OneWater. We feel we gave away at least 1% last year, just exiting those brands, and that's done. So you would think-
So that's why there'll be some choppiness as we go through the selling season, and we can't just really say, "Okay, it's a point and a half." We look at OneWater. We feel we gave away at least 1% last year, just exiting those brands, and that's done. So you would think-
Speaker #3: And that's done. So you would think that somewhere around that 1% is just like an absolute lay down. Now, what we're seeing today is we're seeing that it's a little bit better than that just because of the way the consumer is acting.
Noah Zatzkin: Yep
Noah Zatzkin: Yep
[Company Representative] (OneWater Marine Group): ... that, you know, somewhere, somewhere around that 1% is just like an absolute laydown. Now, what we're seeing today, is we're seeing that it's a little bit better than that just because of the way the consumer is acting. But we don't wanna, we don't wanna really get too excited about that because it's such a small sampling. The quarter is so tiny. It's coming out of the, you know, some of the smaller boat shows. This quarter will really tell us how, how that cadence goes in, but I, I think that we've, you know, wanted to be a little bit conservative because there's some unknowns with how the manufacturers are going to react when boats are going to start getting older. But, but 1%, you know, over this year is, is, is very, very, very achievable outside of something macro that we can't control.
Jack Ezzel: ... that, you know, somewhere, somewhere around that 1% is just like an absolute laydown. Now, what we're seeing today, is we're seeing that it's a little bit better than that just because of the way the consumer is acting. But we don't wanna, we don't wanna really get too excited about that because it's such a small sampling. The quarter is so tiny. It's coming out of the, you know, some of the smaller boat shows. This quarter will really tell us how, how that cadence goes in, but I, I think that we've, you know, wanted to be a little bit conservative because there's some unknowns with how the manufacturers are going to react when boats are going to start getting older. But, but 1%, you know, over this year is, is, is very, very, very achievable outside of something macro that we can't control.
Speaker #3: But we don't want to we don't want to really get too excited about that because it's such a small sampling. The quarter is so tiny.
Speaker #3: It's coming out of some of the smaller boat shows. This quarter will really tell us how that cadence goes in, but I think that we've wanted to be a little bit conservative because there's some unknowns with how the manufacturers are going to react when boats are going to start getting over.
Speaker #3: But 1% over this year is very, very, very achievable outside of something macro that we can't
Speaker #3: control. Got it.
Noah Zatzkin: Got it. That's really helpful. Thank you.
Noah Zatzkin: Got it. That's really helpful. Thank you.
Speaker #8: That's really helpful. Thank
Speaker #8: you. Again, if you'd
Operator: Again, if you'd like to ask a question, press star, then the number one on your telephone keypad. Your next question comes from Garrick Johnson, from Seaport Research. Please go ahead.
Operator: Again, if you'd like to ask a question, press star, then the number one on your telephone keypad. Your next question comes from Garrick Johnson, from Seaport Research. Please go ahead.
Speaker #2: like to ask a question, press start, then the number one on your telephone keypad. Your next question comes from Garrick Johnson from Seaport Research.
Speaker #2: Please go ahead.
Speaker #1: Great, thank you. Hey, did you see any adverse impact from the government shutdown in the middle of the quarter?
Garrick Johnson: Great. Thank you. Hey, did you see any adverse impact from the government shutdown in the middle of the quarter?
Gerrick Johnson: Great. Thank you. Hey, did you see any adverse impact from the government shutdown in the middle of the quarter?
[Company Representative] (OneWater Marine Group): No, I would say we did not.
Jack Ezzel: No, I would say we did not.
Speaker #9: No, I would say we did not. Yeah. Yeah, I didn't.
[Company Representative] (OneWater Marine Group): Yeah. Yeah, I don't, I didn't.
Anthony Asquith: Yeah. Yeah, I don't, I didn't.
Speaker #1: Okay. And then during the early season, boat shows, are you seeing any evidence of that monthly payment buyer returning?
Garrick Johnson: ... Okay. And then, during the early season boat shows, are you seeing any evidence of that monthly payment buyer returning?
Gerrick Johnson: ... Okay. And then, during the early season boat shows, are you seeing any evidence of that monthly payment buyer returning?
Speaker #9: That is not a anything that's really a question for you. I would answer it this way, Garrick. A lot of our customers aren't necessarily payment buyers, right, because we're dealing in the premium space.
[Company Representative] (OneWater Marine Group): That is not.
Jack Ezzel: That is not.
[Company Representative] (OneWater Marine Group): I think-
Gerrick Johnson: I think-
[Company Representative] (OneWater Marine Group): That's really a question for you.
Jack Ezzel: That's really a question for you.
[Company Representative] (OneWater Marine Group): I would answer it this way, Garrick. You know, a lot of our customers aren't necessarily payment buyers, right? Because we're dealing in the premium space. But with that said, a lot of our majority of our customers finance. So when I look at, like, some of our show activity and stuff like that, I mean, we're seeing 60+% of customers financing their purchases, right? And that, that's kind of been, you know, we average probably on a normal cadence, you know, 60 to 65% of the customers, you know, finance some portion of their boat with us. And we think that, you know, another, you know, call it 30%, are financing a portion of the sale somewhere, whether that be through their local credit union or something along those lines.
Austin Singleton: I would answer it this way, Garrick. You know, a lot of our customers aren't necessarily payment buyers, right? Because we're dealing in the premium space. But with that said, a lot of our majority of our customers finance. So when I look at, like, some of our show activity and stuff like that, I mean, we're seeing 60+% of customers financing their purchases, right? And that, that's kind of been, you know, we average probably on a normal cadence, you know, 60 to 65% of the customers, you know, finance some portion of their boat with us. And we think that, you know, another, you know, call it 30%, are financing a portion of the sale somewhere, whether that be through their local credit union or something along those lines.
Speaker #9: But with that said, a lot— a majority of our customers finance. So when I look at some of our show activity and stuff like that, I mean, we're seeing 60-plus percent of customers financing their purchases, right?
Speaker #9: And that's kind of been we average probably on a normal cadence, 60 to 65 percent of the customers finance some portion of their boat with us.
Speaker #9: And we think that another call it 30% are financing a portion of the sale somewhere, whether that be through their local credit union or something along those lines.
[Company Representative] (OneWater Marine Group): But I think what you're getting at is more of that low-end consumer, lower-end consumer who's a lot more price sensitive. They tend to go into more of your value product, and we just don't sell a ton of that.
Speaker #9: So but I think what you're getting at is more of that low-end consumer, lower-end consumer who is a lot more price-sensitive. They tend to go into more of your value product and we just don't sell a ton of
But I think what you're getting at is more of that low-end consumer, lower-end consumer who's a lot more price sensitive. They tend to go into more of your value product, and we just don't sell a ton of that.
Speaker #1: Okay. Great. Thank you.
Garrick Johnson: Okay, great. Thank you.
Gerrick Johnson: Okay, great. Thank you.
Speaker #9: No problem.
[Company Representative] (OneWater Marine Group): No problem.
Austin Singleton: No problem.
Operator: There are no further questions at this time. This concludes today's conference call. You may now disconnect. Thank you.
Operator: There are no further questions at this time. This concludes today's conference call. You may now disconnect. Thank you.
