OneWater Marine Inc.

Good morning and welcome to the One Water Marine Fiscal Third Quarter 2024 conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your touchtone phone. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Jack Ezell, Chief Financial Officer. Please go ahead.

Good morning and welcome to One Water Marines Fiscal Third Quarter 2024 Earnings Conference Call. I'm joined on the call today by Austin Singleton, Chief Executive Officer, and Anthony Askwith, President and Chief Operating Officer. Before we begin, I would like to remind you that certain statements made by management in this morning's conference call regarding One Water Marine and its operations may be considered forward-looking statements under security law 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 would 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. 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 also note that all comparisons of our third quarter 2024 results are made against the third quarter of 2023, unless otherwise noted. And with that, I'd like to turn the call over to Austin Singleton, who will begin with a few opening remarks. Austin?

Thanks, Jack, and thank you, everyone, for joining today's call. When we spoke to you last, we noted same-store sales trended slightly positive in April and May trended slightly down. However, towards the end of May and into June, the sales decline got progressively worse. Also, in Texas, one of our key markets, we saw significant negative impact from severe weather throughout the quarter. In the end, third quarter results were below our expectations. Recent industry data indicated that the categories we participate in were down approximately 23% in June and 15% for the quarter, whereas our unit sales were down approximately 14 and 6%, respectively, including the impact from the adverse weather in Texas. Excluding Texas, our unit sales were only down 2% for the quarter. I am proud of the team for delivering results in a challenging environment that continue to outperform the industry data. On a same-store sales basis, sales were down 8% for the quarter. We are encouraged to see July sales today changing course and trending flat to positive, so we remain cautiously optimistic about the fourth quarter. While we cannot control market conditions or the weather, we continue to focus on efficient inventory management and proactive cost optimization, both of which improved during the quarter. Importantly, we made further headway on sequentially reducing our inventory in terms of dollars and weeks on hand, despite lower revenues for the quarter. This is due to our focused effort to end the summer selling season with clean inventory both in terms of units and model mix, and ensure that we are aligned with market demand as we prepare for fiscal year 2025. While we continue to outperform the industry in this area, we are encouraged to see weeks on hand inventory decline sequentially for the broader industry as the market adjusts to this dynamic environment. We also maintain a proactive approach to expense management that we expect to pay off considerably for fiscal year 2025. Last quarter, we implemented a number of cost optimization initiatives and are beginning to realize the benefits. Importantly, our flexible cost structure enables us to accelerate these cost actions when necessary. Turning to M&A, the deal pipeline remains active and we are spending considerable time on strategic initiatives. We are a patient and experienced management team, and we will pursue the right deal when the timing, price, and strategic fit are aligned with our objectives. OneWater will continue to prioritize thoughtful capital allocation and maintain appropriate levels of leverage while evaluating strategic opportunities, supporting the long-term viability of our business. We believe that acquisitional growth is a key part of our story, just as much as it has been for the last two decades. On the fundamentals of the industry, I am pleased to report that we have been very encouraged by the turnaround that we've seen in July. However, given the industry wide decline that we saw this quarter and the weather related impact in Texas, we are lowering our full year outlook. Despite the lowered guidance, our focus remains on factors within our control. including our ongoing strategic inventory management, the cost cutting measures, and the green shoots we have seen in the distribution business. These have positioned us very well as we prepare to turn the page into fiscal year 2025. With that, I will turn it over to Anthony to discuss business operations.