OneWater Marine Inc. (NASDAQ:ONEW) Q1 2024 Earnings Call Transcript

Then you start performing bad from a service perspective to the customer and that just doesn’t work. So we’re watching that really good and we feel we have a lot of levers, but there are several levers that just automatically pull themselves based off the performance of the business. So we’re confident in our ability, if things were to dramatically shift from a macro standpoint or something that’s completely outside of our control. We have a pretty good game plan in place and ready to deploy that if we’re needed. As far as, manufacturer’s incentives, I can’t answer that for the manufacturers. I think that if things slow up, they’re going to have to. I mean, because again, you’re looking at a dealer network that’s out there and I’m really talking about the single off, one off dealerships that have interest on their floor plan that they’ve never seen before.

It’s a big number. And if they got a lot of carried over inventory, those curtailments eat a lot of cash flow. I’ve heard — once somebody reached out to me about a curtailment holiday and they were like what does that mean to you and I’m like, well — I’ve never heard that but a curtailment holiday is probably something that could be needed if it softens up because that sucks cash out of a dealer’s cash flow for operations. So when you look at a slowing up, I mean, I sit today and I look, the dealers probably cannot afford to take any more promotional activity on their P&L. And that if they have to, are we going to lose some? I think so. When you look at the increased floor plan, all the other just incremental increases, but then you look at the cash flow that curtailments are sucking out of there also, and they’re not making any margin if they have too many 23s and they’re not getting a blend of 23s and 24s, that could be very devastating to a one-off dealership.

One of the blessings that we have and one of the things that have been a fundamental competitive advantage that we think we have is that we can move inventory between a lot of different stores. So you can have one market that’s hot, one that’s not, we’re moving product to the hot market. And so, that’ll help us as we go through. But I would suspect, and — but I can’t speak for them, but if they slow up dramatically, the manufacturers are going to have to step up or they’re going to lose a lot of their dealers.

Noah Zatzkin: Very helpful. Thank you.

Operator: This concludes our question and answer session. Thank you for attending today’s presentation. You may now disconnect.