OneWater Marine Inc

Previous wording

We believe that we are one of the largest and fastest-growing marine retailers in the United States with 95 dealerships,10 distribution centers/warehouses and multiple online marketplaces as of March 31, 2024. Our dealer groups are located within highly attractive markets throughout the Southeast, Gulf Coast, Mid-Atlantic and Northeast, many of which are in the top twenty states for marine retail expenditures. We believe that we are a market leader by volume in sales of premium boats in many of the markets in which we operate. In addition to boat sales, we also generate sales from related products including finance & insurance and service, parts & other sales. The acquisitions of T-H Marine Supplies, LLC (“T-H Marine”) and Ocean Bio-Chem, LLC (f/k/a Ocean Bio-Chem, Inc. ("Ocean Bio-Chem")) significantly expanded our sales of marine parts and accessories. The combination of our significant scale, diverse inventory, access to premium boat brands, access to a broad array of parts and accessories, and meaningful brand equity enables us to provide a consistently professional experience as reflected in the number of our repeat customers and Dealership same-store sales growth.

Current wording

We believe that we are one of the largest and fastest-growing marine retailers in the United States with 98 dealerships,10 distribution centers/warehouses and multiple online marketplaces as of June 30, 2024. Our dealer groups are located within highly attractive markets throughout the Southeast, Gulf Coast, Mid-Atlantic and Northeast, many of which are in the top twenty states for marine retail expenditures. We believe that we are a market leader by volume in sales of premium boats in many of the markets in which we operate. In addition to boat sales, we also generate sales from related products including finance & insurance and service, parts & other sales. The acquisitions of T-H Marine Supplies, LLC (“T-H Marine”) and Ocean Bio-Chem, LLC (f/k/a Ocean Bio-Chem, Inc. ("Ocean Bio-Chem")) significantly expanded our sales of marine parts and accessories. The combination of our significant scale, diverse inventory, access to premium boat brands, access to a broad array of parts and accessories, and meaningful brand equity enables us to provide a consistently professional experience as reflected in the number of our repeat customers and Dealership same-store sales growth.

Previous wording

As of March 31, 2024, the Dealerships segment includes operations of 95 dealerships in 18 states including Florida, Texas, Alabama and Georgia, among others, and represents approximately 92% of revenues for the three and six months ended March 31, 2024, respectively. The Dealerships segment engages in the sale of new and pre-owned boats, arranges financing and insurance products, performs repairs and maintenance services, offers marine-related parts and accessories and offers slip and storage accommodations in certain locations. In fiscal year 2023, we sold over 10,000 new and pre-owned boats, many of which were sold to customers who had a trade-in or with whom we otherwise had established relationships. The combination of our significant scale, diverse inventory and revenue streams, access to premium boat brands and meaningful brand equity enables us to provide a consistently professional experience as reflected by the number of our repeat customers and Dealership same-store sales growth.

Current wording

As of June 30, 2024, the Dealerships segment includes operations of 98 dealerships in 16 states including Florida, Texas, Alabama and Georgia, among others, and represents approximately 92% of revenues for the three and nine months ended June 30, 2024, respectively. The Dealerships segment engages in the sale of new and pre-owned boats, arranges financing and insurance products, performs repairs and maintenance services, offers marine-related parts and accessories and offers slip and storage accommodations in certain locations. In fiscal year 2023, we sold over 10,000 new and pre-owned boats, many of which were sold to customers who had a trade-in or with whom we otherwise had established relationships. The combination of our significant scale, diverse inventory and revenue streams, access to premium boat brands and meaningful brand equity enables us to provide a consistently professional experience as reflected by the number of our repeat customers and Dealership same-store sales growth.

Previous wording

As of March 31, 2024, the Distribution segment includes the activity of three of our fully-owned businesses, PartsVu, Ocean Bio-Chem, T-H Marine and their subsidiaries, which together operate 10 distribution centers/warehouses in Alabama, Florida, Oklahoma, Indiana and Tennessee and represents approximately 8% of revenues for the three and six months ended March 31, 2024, respectively. The Distribution segment engages in the manufacturing, assembly and distribution of primarily marine-related products for sale to distributors, big box retailers, online retailers and direct to consumers. We offer a wide array of branded parts and accessories including jack plates, rigging parts, plumbing components, LED lighting, storage systems, and appearance, cleaning, and maintenance products for the marine and ancillary industries. All revenue for the Distribution segment is reported in service, parts & other in our consolidated statements of operations.

Current wording

As of June 30, 2024, the Distribution segment includes the activity of three of our fully-owned businesses and their subsidiaries, which together operate 10 distribution centers/warehouses in Alabama, Florida, Oklahoma, Indiana and Tennessee and represents approximately 8% of revenues for the three and nine months ended June 30, 2024, respectively. The Distribution segment engages in the manufacturing, assembly and distribution of primarily marine-related products for sale to distributors, big box retailers, online retailers and direct to consumers. We offer a wide array of branded parts and accessories including jack plates, rigging parts, plumbing components, LED lighting, storage systems, and appearance, cleaning, and maintenance products for the marine and ancillary industries. All revenue for the Distribution segment is reported in service, parts & other in our consolidated statements of operations.

Previous wording

We were formed in 2014 as OneWater LLC through the combination of Singleton Marine and Legendary Marine, which created a marine retail platform that collectively owned and operated 19 dealerships. Since the combination in 2014, we have acquired a total of 80 additional dealerships, 12 distribution centers/warehouses and multiple online marketplaces through 33 acquisitions. Our current portfolio as of March 31, 2024 consists of multiple brands which are recognized on a local, regional or national basis. Because of this, we believe we are one of the largest and fastest-growing marine retailers in the United States based on number of dealerships and total boats sold. While we have opportunistically opened new dealerships in select markets, or launched additional parts and accessory products, we believe that it is generally more effective economically and operationally to acquire existing businesses with experienced staff and established reputations.

Current wording

We were formed in 2014 as OneWater LLC through the combination of Singleton Marine and Legendary Marine, which created a marine retail platform that collectively owned and operated 19 dealerships. Since the combination in 2014, we have acquired a total of 81 additional dealerships, 12 distribution centers/warehouses and multiple online marketplaces through 34 acquisitions. Our current portfolio as of June 30, 2024 consists of multiple brands which are recognized on a local, regional or national basis. Because of this, we believe we are one of the largest and fastest-growing marine retailers in the United States based on number of dealerships and total boats sold. While we have opportunistically opened new dealerships in select markets, or launched additional parts and accessory products, we believe that it is generally more effective economically and operationally to acquire existing businesses with experienced staff and established reputations.

Previous wording

We are a highly acquisitive company. Since the combination of Singleton Marine and Legendary Marine in 2014, we have acquired 80 additional dealerships through 28 dealer group acquisitions. Our team remains focused on expanding our dealership growth in regions with strong boating cultures, enhancing the customer experience and generating value for our shareholders. In addition to dealership acquisitions, the Company has strategically acquired parts and accessories companies as part of our growth and diversification strategy. We have acquired 12 distribution centers and warehouses through the acquisition of 5 parts and accessories companies. We plan to continue to strategically evaluate and complete acquisitions moving forward.

Current wording

We are a highly acquisitive company. Since the combination of Singleton Marine and Legendary Marine in 2014, we have acquired 81 additional dealerships through 29 dealer group acquisitions. Our team remains focused on expanding our dealership growth in regions with strong boating cultures, enhancing the customer experience and generating value for our shareholders. In addition to dealership acquisitions, the Company has strategically acquired parts and accessories companies as part of our growth and diversification strategy. We have acquired 12 distribution centers and warehouses through the acquisition of 5 parts and accessories companies. We plan to continue to strategically evaluate and complete acquisitions moving forward.

Previous wording

The COVID-19 pandemic and its related effects positively impacted our sales and gross profit margins as more customers desired to engage in outdoor recreational activities in a socially distanced manner. However, the COVID-19 pandemic also caused significant supply chain challenges as suppliers were faced with business closures and shipping delays. This led to an industry wide inventory shortage of boats, engines and certain marine parts. As of March 31, 2024, we have seen considerable improvements in the supply chain and believe we are returning to the more traditional seasonal cycles of our business which has led to the normalization of our inventory levels and gross profit margins in line with pre-COVID seasonal metrics.

Current wording

The COVID-19 pandemic and its related effects positively impacted our sales and gross profit margins as more customers desired to engage in outdoor recreational activities in a socially distanced manner. However, the COVID-19 pandemic also caused significant supply chain challenges as suppliers were faced with business closures and shipping delays. This led to an industry wide inventory shortage of boats, engines and certain marine parts. As of June 30, 2024, we have seen considerable improvements in the supply chain and believe we have returned to the more traditional seasonal cycles of our business which has led to the normalization of our inventory levels and gross profit margins in line with pre-COVID seasonal metrics.

Previous wording

We have a diversified revenue profile that is comprised of new boat sales, pre-owned boat sales, finance & insurance products, repair and maintenance services, and parts and accessories sales. During different phases of the economic cycle, consumer behavior may shift away from new boats; however, we are well-positioned to generate revenue from pre-owned boats, repair and maintenance services, and parts and accessories, which have all historically increased during periods of economic uncertainty. We generate pre-owned sales from boats traded-in for new and pre-owned boats, boats purchased from customers, brokerage transactions, consignment sales and wholesale sales. We continue to focus on all aspects of our business including non-boat sales of finance & insurance products, repair and maintenance services, and parts and accessories. Although non-boat sales contributed 16.9% and 17.9% to revenue in the three months ended March 31, 2024 and 2023, respectively, and 17.8% and 19.3% to revenue in the six months ended March 31, 2024 and 2023, respectively, due to the higher gross margin on these product and service lines, non-boat sales contributed 36.9% and 33.6% to gross profit in the three months ended March 31, 2024 and 2023, respectively, and 37.4% and 33.7% to gross profit in the six months ended March 31, 2024 and 2023, respectively. We have also diversified our business across geographies, dealership types (e.g., fresh water and salt water), and product offerings (e.g., focus on parts and accessories businesses through PartsVu, T-H Marine and Ocean Bio-Chem) in order to reduce the effects of seasonality and cyclicality of our business. In addition to seasonality, revenue and operating results may be significantly affected by quarter-to-quarter changes in economic conditions, manufacturer incentive programs, adverse weather conditions and other developments outside of our control.

Current wording

We have a diversified revenue profile that is comprised of new boat sales, pre-owned boat sales, finance & insurance products, repair and maintenance services, and parts and accessories sales. During different phases of the economic cycle, consumer behavior may shift away from new boats; however, we are well-positioned to generate revenue from pre-owned boats, repair and maintenance services, and parts and accessories, which have all historically increased during periods of economic uncertainty. We generate pre-owned sales from boats traded-in for new and pre-owned boats, boats purchased from customers, brokerage transactions, consignment sales and wholesale sales. We continue to focus on all aspects of our business including non-boat sales of finance & insurance products, repair and maintenance services, and parts and accessories. Although non-boat sales contributed 18.9% and 18.7% to revenue in the three months ended June 30, 2024 and 2023, respectively, and 18.2% and 19.1% to revenue in the nine months ended June 30, 2024 and 2023, respectively, due to the higher gross margin on these product and service lines, non-boat sales contributed 40.4% and 36.5% to gross profit in the three months ended June 30, 2024 and 2023, respectively, and 38.6% and 34.8% to gross profit in the nine months ended June 30, 2024 and 2023, respectively. We have also diversified our business across geographies, dealership types (e.g., fresh water and salt water), and product offerings (e.g., focus on parts and accessories businesses through our Distribution segment) in order to reduce the effects of seasonality and cyclicality of our business. In addition to seasonality, revenue and operating results may be significantly affected by quarter-to-quarter changes in economic conditions, manufacturer incentive programs, adverse weather conditions and other developments outside of our control.

Previous wording

We define Adjusted EBITDA as net income (loss) before interest expense – other, income tax (benefit) expense, depreciation and amortization and other (income) expense, further adjusted to eliminate the effects of items such as the change in fair value of contingent consideration, loss on extinguishment of debt, transaction costs, stock-based compensation and restructuring and impairment. See ‘‘—Comparison of Non-GAAP Financial Measure’’ for more information and a reconciliation of Adjusted EBITDA to net income (loss), the most directly comparable financial measure calculated and presented in accordance with GAAP.

Current wording

We define Adjusted EBITDA as net income (loss) before interest expense – other, income tax (benefit) expense, depreciation and amortization and other (income) expense, further adjusted to eliminate the effects of items such as the change in fair value of contingent consideration, loss on extinguishment of debt, transaction costs, stock-based compensation and restructuring and impairment. See ‘‘—Comparison of Non-GAAP Financial Measure’’ for more information and a reconciliation of Adjusted EBITDA to net income, the most directly comparable financial measure calculated and presented in accordance with GAAP.

Previous wording

We define Adjusted Net (Loss) Income Attributable to OneWater Marine Inc. as Net Income (Loss) Attributable to OneWater Marine Inc. before transaction costs, intangible amortization, change in fair value of contingent consideration, restructuring and impairment and other expense (income), all of which are then adjusted for an allocation to the non-controlling interest of OneWater LLC. Each of these adjustments are subsequently adjusted for income tax at an estimated effective tax rate. Management also reports Adjusted Diluted (Loss) Earnings Per Share which presents all of the adjustments to net income attributable to OneWater Marine Inc. on a per share basis. See ‘‘—Comparison of Non-GAAP Financial Measure’’ for more information and a reconciliation of Adjusted Net (Loss) Income Attributable to OneWater Marine Inc. and Adjusted Diluted (Loss) Earnings Per Share to net income (loss) and net (loss) earnings per share, respectively, the most directly comparable financial measures calculated and presented in accordance with GAAP.

Current wording

We define Adjusted Net Income Attributable to OneWater Marine Inc. as Net Income Attributable to OneWater Marine Inc. before transaction costs, intangible amortization, change in fair value of contingent consideration, restructuring and impairment and other (income) expense, all of which are then adjusted for an allocation to the non-controlling interest of OneWater LLC. Each of these adjustments are subsequently adjusted for income tax at an estimated effective tax rate. Management also reports Adjusted Diluted Earnings Per Share which presents all of the adjustments to net income attributable to OneWater Marine Inc. on a per share basis. See ‘‘—Comparison of Non-GAAP Financial Measure’’ for more information and a reconciliation of Adjusted Net Income Attributable to OneWater Marine Inc. and Adjusted Diluted Earnings Per Share to net income and net earnings per share, respectively, the most directly comparable financial measures calculated and presented in accordance with GAAP.

Previous wording

We refer to the fiscal year 2023 acquisitions described above collectively as the “2023 Acquisitions.” The acquisition of Taylor Marine Centers is fully reflected in our unaudited Condensed Consolidated Statements of Operations for the three and six months ended March 31, 2023. The acquisition of Harbor View Marine is fully reflected in our unaudited Condensed Consolidated Statements of Operations for the three months ended March 31, 2023 and partially reflected for the six months ended March 31, 2023. The acquisition of Harbor Pointe Marina is not reflected in our unaudited Condensed Consolidated Statements of Operations for the three and six months ended March 31, 2023.

Current wording

We refer to the fiscal year 2023 acquisitions described above collectively as the “2023 Acquisitions.” The acquisition of Taylor Marine Centers is fully reflected in our unaudited Condensed Consolidated Statements of Operations for the three and nine months ended June 30, 2023. The acquisition of Harbor View Marine is fully reflected in our unaudited Condensed Consolidated Statements of Operations for the three months ended June 30, 2023 and partially reflected for the nine months ended June 30, 2023. The acquisition of Harbor Pointe Marina is not reflected in our unaudited Condensed Consolidated Statements of Operations for the three and nine months ended June 30, 2023.

Previous wording

•There were no dispositions during the six months ended March 31, 2024.

Current wording

•There were no dispositions during the nine months ended June 30, 2024.

Previous wording

We refer to the fiscal year 2023 dispositions described above collectively as the “2023 Dispositions.” The 2023 Dispositions are fully reflected in our consolidated financial statements for the three and six months ended March 31, 2023.

Current wording

We refer to the fiscal year 2023 dispositions described above collectively as the “2023 Dispositions.” The 2023 Dispositions are fully reflected in our consolidated financial statements for the three and nine months ended June 30, 2023.

Previous wording

Overall, revenue decreased by $36.0 million, or 6.9%, to $488.3 million for the three months ended March 31, 2024 from $524.3 million for the three months ended March 31, 2023. Revenue decreased due to the sale of Roscioli Yachting Center and Lookout Marine in September 2023. Additionally, the decrease was related to the continued normalization of seasonality following the COVID-19 pandemic, as well as a decrease in sales to original equipment manufacturers ("OEMs") in our Distribution segment as OEM production has slowed. Overall the revenue decline was attributable to a $28.0 million decrease innew boat sales and a $10.7 million decrease in service, parts & other sales, partially offset by a $3.3 million increase in pre-owned boat sales for the three months ended March 31, 2024 compared to the three months ended March 31, 2023.

Current wording

Overall, revenue decreased by $51.9 million, or 8.7%, to $542.4 million for the three months ended June 30, 2024 from $594.3 million for the three months ended June 30, 2023. Revenue decreased due to the sale of Roscioli Yachting Center and Lookout Marine in September 2023, partially offset by the increase in revenue due to the 2024 Acquisitions. Additionally, the decrease was related to the continued normalization of consumer demand following the COVID-19 pandemic, as well as a decrease in sales to original equipment manufacturers ("OEMs") in our Distribution segment as OEM production has slowed. Overall the revenue decline was attributable to a $38.5 million decrease innew boat sales, a $7.7 million decrease in service, parts & other sales, and a $4.6 million decrease in pre-owned boat sales for the three months ended June 30, 2024 compared to the three months ended June 30, 2023.

Previous wording

New boat sales decreased by $28.0 million, or 7.9%, to $327.3 million for the three months ended March 31, 2024 from $355.3 million for the three months ended March 31, 2023. The decrease was primarily attributable to the decrease in average sales price resulting from a shift in sales mix and a decrease in the unit sales resulting from the continued normalization of seasonality following the COVID-19 pandemic.

Current wording

New boat sales decreased by $38.5 million, or 10.4%, to $333.2 million for the three months ended June 30, 2024 from $371.6 million for the three months ended June 30, 2023. The decrease was primarily attributable to the decrease in average sales price resulting from a shift in sales mix and a decrease in the unit sales resulting from the continued normalization of consumer demand following the COVID-19 pandemic.

Previous wording

Pre-owned boat sales increased by $0.8 million, or 0.6%, to $131.9 million for the six months ended March 31, 2024 from $131.2 million for the six months ended March 31, 2023. We sell a wide range of brands and sizes of pre-owned boats under different types of sales arrangements (e.g., trade-ins, brokerage, consigned and wholesale), which causes periodic and seasonal fluctuations in the average sales price. The increase in pre-owned boat sales was primarily attributable to the increase in pre-owned sales from trade in resulting from the increase in average sales price, partially offset by the decrease in brokerage and consignment sales.

Current wording

Pre-owned boat sales decreased by $4.6 million, or 4.1%, to $106.9 million for the three months ended June 30, 2024 from $111.5 million for the three months ended June 30, 2023. We sell a wide range of brands and sizes of pre-owned boats under different types of sales arrangements (e.g., trade-ins, brokerage, consigned and wholesale), which causes periodic and seasonal fluctuations in the average sales price. The decrease in pre-owned boat sales was primarily attributable to the decrease in consignment and brokerage sales from the continued normalization of consumer demand following the COVID-19 pandemic, partially offset by the increase in the pre-owned boat average unit price.

Previous wording

We generate revenue from arranging finance & insurance products, including financing, insurance and extended warranty contracts, to customers through various third-party financial institutions and insurance companies. Finance & insurance income decreased by $0.6 million, or 3.9%, to $14.7 million for the three months ended March 31, 2024 from $15.3 million for the three months ended March 31, 2023. The decrease was primarily due to the decline in new boat sales. We remain very focused on improving sales of finance & insurance products throughout our dealer network and implementing best practices at acquired dealer groups and existing dealerships. Finance & insurance income is recorded net of related fees, including fees charged back due to any early cancellation of loan or insurance contracts by a customer. Since finance & insurance income is fee-based, we do not incur any related cost of sale.

Current wording

We generate revenue from arranging finance & insurance products, including financing, insurance and extended warranty contracts, to customers through various third-party financial institutions and insurance companies. Finance & insurance income decreased by $1.1 million, or 5.8%, to $17.9 million for the three months ended June 30, 2024 from $19.0 million for the three months ended June 30, 2023. The decrease was primarily due to the decline in new and pre-owned boat sales. We remain very focused on improving sales of finance & insurance products throughout our dealer network and implementing best practices at acquired dealer groups and existing dealerships. Finance & insurance income is recorded net of related fees, including fees charged back due to any early cancellation of loan or insurance contracts by a customer. Since finance & insurance income is fee-based, we do not incur any related cost of sale.

Previous wording

Service, parts & other sales decreased by $10.7 million, or 13.7%, to $67.6 million for the three months ended March 31, 2024 from $78.3 million for the three months ended March 31, 2023. The decrease in service, parts & other sales is primarily due to a reduction in parts and accessories sold to OEMs as boat manufacturers have cut significantly back on production. Additionally, our 2023 Dispositions, specifically Roscioli Yachting Center, contributed to the decline. Revenues for the Distribution segment are reported in service, parts & other sales and totaled $38.2 million and $46.0 million for the three months ended March 31, 2024 and 2023, respectively.

Current wording

Service, parts & other sales decreased by $7.7 million, or 8.4%, to $84.5 million for the three months ended June 30, 2024 from $92.2 million for the three months ended June 30, 2023. The decrease in service, parts & other sales is primarily due to a reduction in parts and accessories sold to OEMs as boat manufacturers have cut significantly back on production. Additionally, our 2023 Dispositions, specifically Roscioli Yachting Center, contributed to the decline. Revenues for the Distribution segment are reported in service, parts & other sales and totaled $44.8 million and $51.2 million for the three months ended June 30, 2024 and 2023, respectively.

Previous wording

Overall, gross profit decreased by $26.3 million, or 18.0%, to $120.4 million for the three months ended March 31, 2024 from $146.7 million for the three months ended March 31, 2023. This decrease was primarily due to industry normalization of margins following the COVID-19 pandemic. Overall gross margins decreased 340 basis points to 24.6% for the three months ended March 31, 2024 from 28.0% for the three months ended March 31, 2023 due to the factors noted below. Gross profit margin forthe three months ended March 31, 2024 is tracking in line with pre-COVID seasonal metrics.

Current wording

Overall, gross profit decreased by $26.8 million, or 16.8%, to $132.6 million for the three months ended June 30, 2024 from $159.4 million for the three months ended June 30, 2023. This decrease was primarily due to continued industry normalization of margins following the COVID-19 pandemic as well as a decrease in total revenues. Overall gross margins decreased 240 basis points to 24.4% for the three months ended June 30, 2024 from 26.8% for the three months ended June 30, 2023 due to the factors noted below. Gross profit margin forthe three months ended June 30, 2024 is tracking in line with pre-COVID seasonal metrics.

Previous wording

New boat gross profit decreased by $20.2 million, or 25.1%, to $60.1 million for the three months ended March 31, 2024 from $80.3 million for the three months ended March 31, 2023. This decrease was due to both the decrease in new boat gross profit margin and new boat sales. New boat gross profit margin was 18.4% for the three months ended March 31, 2024 as compared to 22.6% in the three months ended March 31, 2023. The decrease in new boat gross profit and gross profit margin is due primarily to the continued normalization of new boat pricing following the COVID-19 pandemic. Gross profit margin for the three months ended March 31, 2024 is tracking in line with pre-COVID seasonal metrics.

Current wording

New boat gross profit decreased by $19.4 million, or 25.5%, to $56.7 million for the three months ended June 30, 2024 from $76.2 million for the three months ended June 30, 2023. This decrease was due to both the decrease in new boat gross profit margin and new boat sales. New boat gross profit margin was 17.0% for the three months ended June 30, 2024 as compared to 20.5% in the three months ended June 30, 2023. The decrease in new boat gross profit margin is due primarily to the continued normalization of new boat pricing following the COVID-19 pandemic as well as efforts to ensure inventory levels are healthy as we transition towards the non-peak season. Gross profit margin for the three months ended June 30, 2024 is tracking in line with pre-COVID seasonal metrics.

Previous wording

Pre-owned boat gross profit decreased by $1.3 million, or 7.8%, to $15.9 million for the three months ended March 31, 2024 from $17.2 million for the three months ended March 31, 2023. The decrease in pre-owned boat gross profit was primarily driven by a decrease in brokerage sales, as well as the decrease in pre-owned boat gross profit margin as a result of continued normalization of pre-owned boat pricing following the COVID-19 pandemic. Pre-owned boat gross profit margin was 20.2% and 22.8% for the three months ended March 31, 2024 and 2023, respectively. Gross profit margin for the three months ended March 31, 2024 is tracking in line with pre-COVID seasonal metrics.

Current wording

Pre-owned boat gross profit decreased by $2.8 million, or 11.1%, to $22.3 million for the three months ended June 30, 2024 from $25.1 million for the three months ended June 30, 2023. The decrease in pre-owned boat gross profit was primarily driven by the decrease in pre-owned boat gross profit margin as a result of continued normalization of pre-owned boat pricing following the COVID-19 pandemic as well as a decrease in brokerage sales. Pre-owned boat gross profit margin was 20.8% and 22.5% for the three months ended June 30, 2024 and 2023, respectively. Gross profit margin for the three months ended June 30, 2024 is tracking in line with pre-COVID seasonal metrics.

Previous wording

Finance & insurance gross profit decreased by $0.6 million, or 3.9% to $14.7 million for the three months ended March 31, 2024 from $15.3 million for the three months ended March 31, 2023. Finance & insurance income is fee-based revenue for which we do not recognize incremental cost of sales.

Current wording

Finance & insurance gross profit decreased by $1.1 million, or 5.8% to $17.9 million for the three months ended June 30, 2024 from $19.0 million for the three months ended June 30, 2023. Finance & insurance income is fee-based revenue for which we do not recognize incremental cost of sales.

Previous wording

Service, parts & other gross profit decreased by $4.2 million, or 12.4%, to $29.7 million for the three months ended March 31, 2024 from $33.9 million for the three months ended March 31, 2023. The decrease in gross profit was primarily the result of our 2023 Dispositions, specifically Roscioli Yachting Center, as well as a reduction in sales in our Distribution segment. These reductions were partially offset by the slight increase in service, parts & other gross profit margin. The slight increase in gross profit margin was due to a shift in mix of parts sales towards a higher concentration of aftermarket customers as compared to OEMs. Service, parts & other gross profit margin was 43.9% and 43.3% for the three months ended March 31, 2024 and 2023, respectively.

Current wording

Service, parts & other gross profit decreased by $3.5 million, or 8.9%, to $35.7 million for the three months ended June 30, 2024 from $39.2 million for the three months ended June 30, 2023. The decrease in gross profit was primarily the result of our 2023 Dispositions, specifically Roscioli Yachting Center, as well as a reduction in sales in our Distribution segment. Service, parts & other gross profit margin was 42.3% and 42.5% for the three months ended June 30, 2024 and 2023, respectively.

Previous wording

Selling, general and administrative expenses decreased by $3.7 million, or 4.1%, to $86.5 million for the three months ended March 31, 2024 from $90.2 million for the three months ended March 31, 2023. This decrease was primarily due to our variable cost structure, including a decrease in commissions, as a result of declining gross margins. Selling, general and administrative expenses as a percentage of revenue increased to 17.7% from 17.2% for the three months ended March 31, 2024 and 2023, respectively, and was driven by lower revenues.

Current wording

Selling, general and administrative expenses decreased by $5.8 million, or 6.2%, to $87.1 million for the three months ended June 30, 2024 from $92.8 million for the three months ended June 30, 2023. This decrease was primarily due to our variable cost structure, including a decrease in commissions, as a result of declining gross margins and the cost savings resulting from the 2024 restructuring activities. Selling, general and administrative expenses as a percentage of revenue increased to 16.0% from 15.6% for the three months ended June 30, 2024 and 2023, respectively, and was driven by lower revenues.

Previous wording

Depreciation and amortization expense decreased $0.8 million, or 13.6%, to $4.9 million for the three months ended March 31, 2024 compared to $5.6 million for the three months ended March 31, 2023. The decrease in depreciation and amortization expense for the three months ended March 31, 2024 compared to the three months ended March 31, 2023 was primarily attributable to a reduction in intangible assets due to the prior year impairment charge as well as a reduction in property and equipment related to the 2023 Dispositions. These decreases were partially offset by the increase in property and equipment during the three months ended March 31, 2024 to support operations.

Current wording

Depreciation and amortization expense decreased $0.9 million, or 14.9%, to $5.1 million for the three months ended June 30, 2024 compared to $6.0 million for the three months ended June 30, 2023. The decrease in depreciation and amortization expense for the three months ended June 30, 2024 compared to the three months ended June 30, 2023 was primarily attributable to a reduction in intangible assets due to the prior year impairment charge as well as a reduction in property and equipment related to the 2023 Dispositions. These decreases were partially offset by the increase in property and equipment during the three months ended June 30, 2024 to support operations.

Previous wording

The decrease in transaction costs of $0.1 million, or 39.8%, to $0.1 million for the three months ended March 31, 2024 compared to $0.2 million for the three months ended March 31, 2023 was primarily attributable to a reduction in acquisition activity during the second quarter of the current year compared to the previous year.

Current wording

The increase in transaction costs of $0.1 million, or 149.5%, to $0.2 million for the three months ended June 30, 2024 compared to $0.1 million for the three months ended June 30, 2023 was primarily attributable to the acquisition of Garden State Yacht Sales during the third quarter of the current year.

Previous wording

During the six months ended March 31, 2024, we recognized a loss of $3.7 million related to updated forecasts and accretion of contingent consideration liabilities related to acquisitions completed in fiscal years 2021 and 2022.

Current wording

During the three months ended June 30, 2024, we recognized a loss of $0.2 million related to accretion of contingent consideration liabilities related to acquisitions completed in fiscal year 2022.

Previous wording

Income from operations decreased $35.0 million, or 71.7%, to $13.9 million for the three months ended March 31, 2024 compared to $48.9 million for the three months ended March 31, 2023. The decrease was primarily attributable to the $26.3 million decrease in gross profit for the three months ended March 31, 2024 as compared to the three months ended March 31, 2023 and the $11.8 million in restructuring and impairment expenses during the three months ended March 31, 2024, partially offset by a $3.7 million decrease in selling, general and administrative expenses during the same periods.

Current wording

Income from operations decreased $20.1 million, or 33.4%, to $40.0 million for the three months ended June 30, 2024 compared to $60.1 million for the three months ended June 30, 2023. The decrease was primarily attributable to the $26.8 million decrease in gross profit for the three months ended June 30, 2024 as compared to the three months ended June 30, 2023, partially offset by a $5.8 million decrease in selling, general and administrative expenses during the same periods.

Previous wording

Interest expense – floor plan increased $3.1 million, or 55.8%, to $8.5 million for the three months ended March 31, 2024 compared to $5.5 million for the three months ended March 31, 2023. Floor plan related interest expense increased primarily due to an increase in the average inventory for the three months ended March 31, 2024 compared to the three months ended March 31, 2023, as well as an increase in interest rates.

Current wording

Interest expense – floor plan increased $1.9 million, or 24.9%, to $9.3 million for the three months ended June 30, 2024 compared to $7.4 million for the three months ended June 30, 2023. Floor plan related interest expense increased primarily due to an increase in the average inventory for the three months ended June 30, 2024 compared to the three months ended June 30, 2023, as well as an increase in interest rates.

Previous wording

Income tax (benefit) expense changed by $9.8 million, or 123.2%, to a $1.8 million income tax benefit for the three months ended March 31, 2024 compared to $8.0 million of income tax expense for the three months ended March 31, 2023. The change was primarily attributable to the 118.2% decrease in income before income tax expense for the three months ended March 31, 2024 as compared to the three months ended March 31, 2023.

Current wording

Income tax expense decreased by $3.6 million, or 36.0%, to $6.3 million for the three months ended June 30, 2024 compared to $9.9 million for the three months ended June 30, 2023. The change was primarily attributable to the 46.6% decrease in income before income tax expense for the three months ended June 30, 2024 as compared to the three months ended June 30, 2023.

Previous wording

Overall, revenue decreased by $38.7 million, or 4.3%, to $852.3 million for the six months ended March 31, 2024 from $891.0 million for the six months ended March 31, 2023. Revenue decreased primarily due to the sale of Roscioli Yachting Center and Lookout Marine in September 2023, the continued normalization of seasonality following the COVID-19 pandemic and a decrease in sales to OEMs in our Distribution segment as OEM production has slowed. Overall the revenue decline was attributable to a $17.9 million decrease in service, parts & other sales and a $19.3 million decrease in new boat sales for the six months ended March 31, 2024 compared to the six months ended March 31, 2023.

Current wording

Overall, revenue decreased by $90.6 million, or 6.1%, to $1,394.8 million for the nine months ended June 30, 2024 from $1,485.3 million for the nine months ended June 30, 2023. Revenue decreased primarily due to the sale of Roscioli Yachting Center and Lookout Marine in September 2023, the continued normalization of seasonality and consumer demand following the COVID-19 pandemic and a decrease in sales to OEMs in our Distribution segment as OEM production has slowed. Overall the revenue decline was attributable to a $25.7 million decrease in service, parts & other sales and a $57.8 million decrease in new boat sales for the nine months ended June 30, 2024 compared to the nine months ended June 30, 2023.

Previous wording

New boat sales decreased by $19.3 million, or 3.3%, to $568.4 million for the six months ended March 31, 2024 from $587.7 million for the six months ended March 31, 2023. The decrease was primarily attributable to the decrease in unit sales resulting from the continued normalization of seasonality following the COVID-19 pandemic.

Current wording

New boat sales decreased by $57.8 million, or 6.0%, to $901.6 million for the nine months ended June 30, 2024 from $959.3 million for the nine months ended June 30, 2023. The decrease was primarily attributable to the decrease in unit sales resulting from the continued normalization of seasonality and consumer demand following the COVID-19 pandemic.

Previous wording

Pre-owned boat sales increased by $3.3 million, or 4.3%, to $78.6 million for the three months ended March 31, 2024 from $75.4 million for the three months ended March 31, 2023. We sell a wide range of brands and sizes of pre-owned boats under different types of sales arrangements (e.g., trade-ins, brokerage, consigned and wholesale), which causes periodic and seasonal fluctuations in the average sales price. The increase in pre-owned boat sales was primarily attributable to the increase in pre-owned sales from trade-ins and consignment sales, partially offset by the decrease in brokerage sales.

Current wording

Pre-owned boat sales decreased by $3.8 million, or 1.6%, to $238.8 million for the nine months ended June 30, 2024 from $242.6 million for the nine months ended June 30, 2023. We sell a wide range of brands and sizes of pre-owned boats under different types of sales arrangements (e.g., trade-ins, brokerage, consigned and wholesale), which causes periodic and seasonal fluctuations in the average sales price. The decrease in pre-owned boat sales was primarily attributable to the decrease in brokerage and consignment sales partially offset by the increase in pre-owned sales from trade in.

Previous wording

We generate revenue from arranging finance & insurance products, including financing, insurance and extended warranty contracts, to customers through various third-party financial institutions and insurance companies. Finance & insurance income decreased by $2.2 million, or 8.9%, to $22.1 million for the six months ended March 31, 2024 from $24.3 million for the six months ended March 31, 2023. The decrease was primarily due to declining income earned on loans placed given the current high interest-rate environment. We remain very focused on improving sales of finance & insurance products throughout our dealer network and implementing best practices at acquired dealer groups and existing dealerships. Finance & insurance income is recorded net of related fees, including fees charged back due to any early cancellation of loan or insurance contracts by a customer. Since finance & insurance income is fee-based, we do not incur any related cost of sale.

Current wording

We generate revenue from arranging finance & insurance products, including financing, insurance and extended warranty contracts, to customers through various third-party financial institutions and insurance companies. Finance & insurance income decreased by $3.3 million, or 7.5%, to $40.0 million for the nine months ended June 30, 2024 from $43.3 million for the nine months ended June 30, 2023. The decrease was primarily due to declining income earned on loans placed given the current high interest-rate environment as well as a decrease in major unit sales. We remain very focused on improving sales of finance & insurance products throughout our dealer network and implementing best practices at acquired dealer groups and existing dealerships. Finance & insurance income is recorded net of related fees, including fees charged back due to any early cancellation of loan or insurance contracts by a customer. Since finance & insurance income is fee-based, we do not incur any related cost of sale.

Previous wording

Service, parts & other sales decreased by $17.9 million, or 12.1%, to $129.9 million for the six months ended March 31, 2024 from $147.9 million for the six months ended March 31, 2023. The decrease in service, parts & other sales is primarily due to a reduction in parts and accessories sold to OEMs as boat manufacturers have cut significantly back on production. Additionally, our 2023 Dispositions, specifically Roscioli Yachting Center, contributed to the decline. Revenues for the Distribution segment are reported in service, parts & other sales and totaled $70.6 million and $85.9 million for the six months ended March 31, 2024 and 2023, respectively.

Current wording

Service, parts & other sales decreased by $25.7 million, or 10.7%, to $214.4 million for the nine months ended June 30, 2024 from $240.1 million for the nine months ended June 30, 2023. The decrease in service, parts & other sales is primarily due to a reduction in parts and accessories sold to OEMs as boat manufacturers have cut significantly back on production. Additionally, our 2023 Dispositions, specifically Roscioli Yachting Center, contributed to the decline. Revenues for the Distribution segment are reported in service, parts & other sales and totaled $115.4 million and $137.0 million for the nine months ended June 30, 2024 and 2023, respectively.

Previous wording

Overall, gross profit decreased by $44.9 million, or 17.5%, to $211.8 million for the six months ended March 31, 2024 from $256.7 million for the six months ended March 31, 2023. This decrease was primarily due to industry normalization of margins following the COVID-19 pandemic. Overall gross margins decreased 390 basis points to 24.9% for the six months ended March 31, 2024 from 28.8% for the six months ended March 31, 2023 due to the factors noted below.

Current wording

Overall, gross profit decreased by $71.7 million, or 17.2%, to $344.4 million for the nine months ended June 30, 2024 from $416.1 million for the nine months ended June 30, 2023. This decrease was primarily due to industry normalization of margins following the COVID-19 pandemic as well as a decrease in total revenues. Overall gross margins decreased 330 basis points to 24.7% for the nine months ended June 30, 2024 from 28.0% for the nine months ended June 30, 2023 due to the factors noted below.

Previous wording

New boat gross profit decreased by $32.6 million, or 23.8%, to $104.8 million for the six months ended March 31, 2024 from $137.4 million for the six months ended March 31, 2023. This decrease was primarily due to the decrease in new boat gross profit margin. New boat gross profit margin was 18.4% for the six months ended March 31, 2024 as compared to 23.4% in the six months ended March 31, 2023. The decrease in new boat gross profit margin is due primarily to the continued normalization of new boat pricing following the COVID-19 pandemic. Gross profit margin for the six months ended March 31, 2024 is tracking in line with pre-COVID seasonal metrics.

Current wording

New boat gross profit decreased by $52.1 million, or 24.4%, to $161.5 million for the nine months ended June 30, 2024 from $213.6 million for the nine months ended June 30, 2023. This decrease was primarily due to the decrease in new boat gross profit margin as well as a decrease in new boat revenue. New boat gross profit margin was 17.9% for the nine months ended June 30, 2024 as compared to 22.3% in the nine months ended June 30, 2023. The decrease in new boat gross profit margin is due primarily to the continued normalization of new boat pricing following the COVID-19 pandemic. Gross profit margin for the nine months ended June 30, 2024 is tracking in line with pre-COVID seasonal metrics.

Previous wording

Pre-owned boat gross profit decreased by $4.9 million, or 14.9%, to $27.8 million for the six months ended March 31, 2024 from $32.7 million for the six months ended March 31, 2023. The decrease in pre-owned boat gross profit was primarily driven by a decrease in brokerage and consignment sales, as well as the decrease in pre-owned boat gross profit margin as a result of continued normalization of pre-owned boat pricing following the COVID-19 pandemic. Pre-owned boat gross profit margin was 21.1% and 24.9% for the six months ended March 31, 2024 and 2023, respectively. Gross profit margin for the six months ended March 31, 2024 is tracking in line with pre-COVID seasonal metrics.

Current wording

Pre-owned boat gross profit decreased by $7.7 million, or 13.3%, to $50.1 million for the nine months ended June 30, 2024 from $57.7 million for the nine months ended June 30, 2023. The decrease in pre-owned boat gross profit was primarily driven by a decrease in brokerage sales, as well as the decrease in pre-owned boat gross profit margin as a result of continued normalization of pre-owned boat pricing following the COVID-19 pandemic. Pre-owned boat gross profit margin was 21.0% and 23.8% for the nine months ended June 30, 2024 and 2023, respectively. Gross profit margin for the nine months ended June 30, 2024 is tracking in line with pre-COVID seasonal metrics.

Previous wording

Finance & insurance gross profit decreased by $2.2 million, or 8.9% to $22.1 million for the six months ended March 31, 2024 from $24.3 million for the six months ended March 31, 2023. Finance & insurance income is fee-based revenue for which we do not recognize incremental cost of sales.

Current wording

Finance & insurance gross profit decreased by $3.3 million, or 7.5% to $40.0 million for the nine months ended June 30, 2024 from $43.3 million for the nine months ended June 30, 2023. Finance & insurance income is fee-based revenue for which we do not recognize incremental cost of sales.

Previous wording

Service, parts & other gross profit decreased by$5.2 million, or 8.3%, to$57.2 million for thesix months ended March 31, 2024 from$62.3 million for thesix months ended March 31, 2023. The decrease in gross profit was primarily the result of our 2023 Dispositions, specifically Roscioli Yachting Center, as well as a reduction in sales in our Distribution segment. These reductions were partially offset by the increase in service, parts & other gross profit margin. The increase in gross profit margin was due to a shift in mix of parts sales towards a higher concentration of aftermarket customers as compared to OEMs as well as a shift in the overall mix towards labor which is higher margin. Service, parts & other gross profit margin was 44.0% and 42.2% for thesix months ended March 31, 2024 and 2023, respectively.

Current wording

Service, parts & other gross profit decreased by$8.7 million, or 8.6%, to$92.8 million for thenine months ended June 30, 2024 from$101.5 million for thenine months ended June 30, 2023. The decrease in gross profit was primarily the result of our 2023 Dispositions, specifically Roscioli Yachting Center, as well as a reduction in sales in our Distribution segment. These reductions were partially offset by the increase in service, parts & other gross profit margin. The increase in gross profit margin was due to a shift in mix of parts sales towards a higher concentration of aftermarket customers as compared to OEMs as well as a shift in the overall mix towards labor which is higher margin. Service, parts & other gross profit margin was 43.3% and 42.3% for thenine months ended June 30, 2024 and 2023, respectively.

Previous wording

Selling, general and administrative expenses decreased by $1.9 million, or 1.1%, to $166.1 million for the six months ended March 31, 2024 from $168.0 million for the six months ended March 31, 2023. This decrease was primarily due todecreased personnel expenses including lower employee commissions, partially offset by expenses incurred to support maintaining revenues, including increased boat show related expenses. Selling, general and administrative expenses as a percentage of revenue increased to 19.5% from 18.9% for the six months ended March 31, 2024 and 2023, respectively.

Current wording

Selling, general and administrative expenses decreased by $7.7 million, or 3.0%, to $253.2 million for the nine months ended June 30, 2024 from $260.9 million for the nine months ended June 30, 2023. This decrease was primarily due todecreased personnel expenses including lower employee commissions and cost savings resulting from the 2024 restructuring activities, partially offset by expenses incurred to support maintaining revenues, including increased boat show related expenses. Selling, general and administrative expenses as a percentage of revenue increased to 18.2% from 17.6% for the nine months ended June 30, 2024 and 2023, respectively.