Good day, and thank you for standing by. Welcome to the OneWater Marine Acquisition of T-H Marine call. At this time, all participants are in listen-only mode. If you require operator assistance during the call, please press star then zero. After the presentation, there will be a question and answer session. To ask a question during the session, you will need to press star then one. I'd now like to hand the conference over to your host today, Mr. Jack Ezzell, Chief Financial Officer. Please go ahead. Good morning, everyone, and welcome to OneWater Marine's call to discuss our acquisition of T-H Marine. I'm joined on the call today by Austin Singleton, 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 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 statement. Factors that might affect future results are discussed in the company's press release and slides, which can be found on the investor relations section of 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 of the forward-looking statements are made, except as required by law. During this call, we will not be discussing or entertaining questions regarding our fiscal year 2021 fourth quarter financial results. We plan to discuss those results on our regularly scheduled earnings call in November. With that, I'd like to turn the call over to Austin Singleton, CEO, who will begin with a few opening remarks. Austin? Thank you, Jack. Good morning, and thank you all for joining us on this call. This morning, we announced that we reached an agreement to acquire T-H Marine, an industry-leading provider of marine branded products. This is a strategic transaction for OneWater as it significantly enhances our growth and diversification strategy and is expected to more than double the size of our service, parts, and other sales with a highly complementary product portfolio of aftermarket and OEM marine parts and accessories. Since its founding in 1975, the T-H Marine team has established an industry-leading platform and a comprehensive product portfolio. From its roots as an OEM supplier, the team has transformed itself into a premier omni-channel platform serving the rapidly growing recreational boating market. T-H Marine has a proven ability to acquire and integrate niche products and categories and leverage its strong reputation for innovation. It has expanded its aftermarket parts and accessories through its e-commerce site, various marine and big box retail sites, and through marine distribution channels. Today, T-H Marine maintains over 5,000 SKUs, and you will find their products on nearly all recreational boats under 35 ft manufactured in the U.S., with many of its products written into the manufacturing specifications. Even more interesting is aftermarket products today only accounts for half of T-H Marine's revenue mix. As I mentioned, T-H Marine represents a strong natural fit to our service, parts, and other sales and offers an additional platform from which to grow. The combination will provide an opportunity to gain more share of the wallet through a more robust product offering while at the same time enhancing profitability. Additionally, the acquisition of T-H Marine will further diversify our business away from new boat sales while at the same time reducing our exposure to typical marine cycles, a core tenet of our long-term strategy. To put a finer point on this, in fiscal year 2020, our service, parts, and other sales was roughly 16% of total sales. With the addition of T-H Marine, it expands to 16%, and we believe this can further grow over time. Jeff Huntley and his team will join the OneWater family post-close. Their strong track record for both organic and acquisitional growth, e-commerce expertise, and strategic vision for the business will undoubtedly benefit our own vision for expansion into these higher margin areas of our business. Together, we will continue to foster a culture of award-winning innovation marked by over 25 patents and 75 trademarks in an extensive product development pipeline. Looking forward, T-H Marine is well positioned to capture a sustainable momentum in the more than $6 billion marine aftermarket product and accessories market, supported by net growth of the large installed boat base of over 10.5 million boats on the OEM front. T-H Marine's strong lean assembly capabilities will allow them to capitalize on the new boat inventory replenishment cycle that we believe will continue through 2023. We're thrilled to welcome Jeff and his team to the OneWater Marine family. This transaction marks a significant milestone in the execution of our diversification strategy. We are poised to drive further growth for OneWater and unlock significant value for our shareholders. I would now turn to Jack, our Chief Financial Officer, to review the financial details of this transaction. Thanks, Austin. Good morning, everyone. As Austin announced, we signed a definitive agreement to acquire T-H Marine for $185 million. The transaction is subject to customary closing conditions as well as regulatory review and approval and is expected to close in the fourth quarter of calendar 2021. T-H Marine has consistently delivered strong financial performance, supported by attractive fundamentals to deliver near and long-term shareholder value. The transaction is expected to be immediately accretive to growth, operating margins, and earnings per share. For calendar year 2021, T-H Marine is anticipated to deliver revenues of approximately $115 million and adjusted EBITDA in the range of $19 million-$20 million, continuous track record of growth. Further, we anticipate double-digit revenue compound annual growth and mid to high double-digit adjusted EBITDA growth for the period through 2023. The transaction offers significant and immediate growth to our parts and aftermarket accessories business. As Austin mentioned, our service parts and other sales in fiscal 2020 was 6% of total sales and expected to increase that number to 16% post-transaction and has the ability to grow over time. This transaction will also integrate well with our recently completed PartsVu acquisition as we look forward to leveraging T-H Marine's management team sourcing expertise and relationships while expanding this cycle-resilient business model. The acquisition of T-H Marine provides us with a large suite of products added to our portfolio and helps us to become a one-stop shop so that customers can come to OneWater for all their marine product needs. We are excited about this opportunity that will also give us key insights into customers' needs and wants. The transaction is expected to be financed through a combination of cash and approximately $7 million worth of stock. For the debt component, we have received a commitment letter from Truist Securities to expand our current term loan facility by $200 million. At closing, we anticipate net debt to adjusted EBITDA leverage to be in the range of 1.2x to 1.7x. We are very comfortable with this leverage level given our ability to generate strong free cash flows and pay down debt. We will provide more detailed financial information and formalized guidance during our fourth quarter fiscal 2021 earnings call in November and post-closing of this transaction. This transaction is a major step forward in our growth and diversification strategy and provides us with an additional platform for growth. We are excited to welcome T-H Marine and are confident in our ability to integrate the company as we open new doors for growth and value creation for shareholders. This concludes our prepared remarks. Operator, will you please open the line for questions? Our first question comes from Fred Wightman with Wolfe Research. Hey, guys. Good morning. I was wondering if you could just give a little bit of historical context for the revenue number that's quoted, the EBITDA performance, sort of what those growth rates have looked like, and then also just how that OEM versus aftermarket SKU has trended over the past few years. I will also note that we did put out a small deck that might have some additional information that you'd be interested in. It's with the call details. The company's performance has trended up significantly in recent years. It's a platform for growth. They've done 14 acquisitions in recent years, so that's helping them grow over time, in some years having very significant growth. The OEM to aftermarket split of their revenue is about 50/50 today. We think that the aftermarket is an area that we can work to expand in the future. I believe I maybe hit on all your questions. I guess just the follow-up was sort of how that 50/50 split. I know it's in the deck. That's sort of a point in time in what these guys are doing. Has that been sort of consistent over the past few years? Has aftermarket been outpacing OEM? I would think that's sort of the case. How has that looked? Aftermarket has been significantly outpacing OEM. It started as an OEM only, and over time has transitioned into that 50/50 split today. Perfect. I guess you guys sort of alluded to this in the prepared remarks, but any big material exposures to keep in mind for them? Do they have stuff contracted forward? Sort of how have they been pricing in the current environment? In the current environment, they have their challenges like everybody in the industry with supply chain. I would say that it's what we've seen similar on the boat side. It's been fairly reasonable. We're not seeing exorbitant pricing coming from any particular category. Great. Thank you. Our next question comes from Michael Swartz with Truist Securities. Hey. Good morning, guys. Maybe help us understand, I think you said that you anticipate double-digit revenue growth, and I think you said mid to high double-digit EBITDA growth through 2023. I guess just a point of clarification, what does mid to high double-digit EBITDA growth mean? Is that mid to high teens or something above that? Yes. Thanks. Sorry about that. Okay. I did say teens. I meant to. Nope. That's helpful. I see that one of their channels of distribution is through dealers. Were you a customer of theirs before? If so, were there that $115 million in revenue that's anticipated for this year, does that include any eliminations that would come from doing business with them? Yeah. It may include some eliminations, but I think with some of the recent acquisitions and whatnot, we'll still see a significant amount of growth. We're working through the synergy side of what parts are we buying elsewhere that we can buy direct and working out that model. Today, I think there's just a great opportunity on that aftermarket side beyond the OneWater dealerships. Yeah. Okay. Michael Swartz, one thing on that is, they do a lot of private branding. From the marine, I don't think we'll see a lot of eliminations. Because it's almost private branded for particular locations and stuff or their dealerships, so that'll continue. It will not be significant, or it'll pretty much be moot. Okay. Just one last from me. I see that they own manufacturing assets and just, given the nature of this business, maybe can you qualify or talk about the working capital intensity of the business maybe relative to the core dealership business? Yeah. Well, I would tell you it's maybe a little bit more than the core dealership business. It is. You're right. It's more distribution. I'll call it more assembly versus true hardcore intensive manufacturing. There's definitely some products that they manufacture A to Z. I'd probably put it more in a warehousing and assembly type model versus detailed manufacturing. Okay, great. Thank you. Our next question comes from Craig Kennison with Baird. Hey, thanks for taking my question. I'd be curious how you think this fits with your acquisition of PartsVu. Oh, man. It's a great fit. There's a lot of things that PartsVu is going to be able to offer now that come basically direct from TH instead of going through a wholesaler. There's just a lot of avenues for additional SKUs that PartsVu didn't have access to or had to really pay up to get. The margin profile should be accretive. It shouldn't affect T-H Marine at all, but it should be accretive on the PartsVu side. Jack, you want to add anything to that? It's a big deal. Yeah, it's a big deal. It also gives us, I say, expanded capabilities in the importing section, the area where we can look to import and have a different brand to put additional parts out there. Thanks. When we look at your overall strategy and the desire to diversify the business, you've acquired this large platform business. Do you see a need to acquire any other platform-like businesses to realize your strategic vision here? Or will future acquisitions likely tuck into the platforms you have today? The main thing is still the dealership roll-up. This is a separate platform that has a very similar opportunity that the dealership model has. A fragmented mom-and-pop industry, low purchased EBITDA, multiples against that, very similar to what we're doing in the dealership, and that was one of the intriguing pieces of this. I don't think there's another platform out there that tags into this, or tags into our strategy at all. We've really focused on our higher margin businesses. When we started doing the service own facilities, this continues to be accretive to that or will be accretive to the service-only facilities. This parts thing is something that the e-commerce parts side of this is something that we know is a great business to be in. I don't think there's another platform out there that really fits into our current strategy that I can think of. Jack, there's not really anything. No. Nothing that comes to mind today, but we certainly would be opportunistic should something present itself. Got it. Hey, thank you so much. Our next question comes from Drew Crum with Stifel. Okay, thanks. Hey, guys. Good morning. Just maybe a clarification or enhancement on an earlier question with respect to the sales growth. Is that organic or is that assuming further M&A for T-H Marine? Separately, Austin, can you talk about how this influences or impacts your acquisition strategy for fiscal 2022? It's a fairly large deal. I know in the past you've targeted four to six acquisitions per fiscal year. Does that take the number down in 2022? Thanks. Jack, you want to tackle the first part of that, or you want me to do them all? Yeah. No, I would tell you it does not include acquisitional growth. It does include the acquisitions that they've completed during the year, full annualization of those results. Yeah. On the acquisition front, it really doesn't affect anything, Drew. Our pipeline is as solid and as good as it's ever been. We continue to look forward to closing on those or on the cadence that we had provided, the updated cadence of four to six deals in a year. Yep. Got it. Okay. Thanks, guys. As a reminder, if you'd like to ask a question at this time, that is star, then one. Our next question comes from Joseph Altobello with Raymond James. Thanks. Hey, guys. Good morning. First question, what's the rough margin delta between OEM and aftermarket for this business? Yeah, Joe, I don't have that number right here in front of me. I know as you think about margins, their margins are certainly a lot higher than our boat margins. We anticipate getting a nice lift in our overall margins by having this higher margin business added to our consolidated results. Yeah, as the business skews more toward aftermarket, I would think you would get an even further lift from that. Right figure out what that lift would be. Right. I think that's something that we'll continue to share our anticipation and guidance with respect to margins as we move forward in time, as we work to integrate the acquisition and develop out those strategies. Okay. Maybe a few modeling questions for you. How much incremental D&A is involved with TH, and what's the borrowing rate on your term facility? The borrowing rate is roughly 3% today. It has a sliding scale based on our leverage ratios. Right in that low 3%-3.25% range. From a D&A perspective, their depreciation expense is fairly I'd say maybe their CapEx spend is a little bit higher than ours. We average 0.5% of sales. I think they're more in the 1% of sales range. Not horribly, not massive numbers. D&A is probably in the range of $500,000 a year. Okay. Got it. One last one for you. I think in the press release, you mentioned your net leverage ratio at closing should be somewhere between 1.2x and 1.7x. Yep awfully wide. Right. Can you help us understand why there's a lack of precision there? Well, first of all, let's remember, we haven't provided 2022 guidance. We're not pre-announcing 2021 results. It's kind of difficult to provide a precise adjusted EBITDA number. We'll certainly update once we issue our annual results. We'll certainly get you some updates. Just keep in mind too, the timing of close. We expect it to be in the fourth quarter given where we're at. As you think about the seasonality of the quarter, we're moving into the seasonal slowest time. We're also moving into a period where seasonally you see an increase in working capital traditionally. However, this year with inventory supply, that's a pretty big variable as to what that impact is going to be on cash and working capital. Just finally, just remember we deployed a significant amount of capital in the fourth quarter with the acquisition of Stone Harbor Marina, PartsVu, and Naples Boat Mart. We're working on generating cash and replenishing balances. I understand it's a pretty wide range, and I'll commit to giving you a much tighter range or an actual number as we get to our full year earnings call. Okay, great. Thanks, guys. Our next question comes from Fred Wightman with Wolfe Research. Hey, guys. Just one follow-up. Could you give us a sense for any backlog that they have, whether it's dollars or months, however you want to sort of quantify it? Yeah. I don't know that they have a significant amount of backlog. They're working to, on the OEM side, get that product when they need it, as well as then on the retail side, it's not really something that generates a backlog. I wouldn't say it's a significant component of their business today. Great. Thank you. Fred, it's a pretty consistent rollout. They do things in same time, real time for the manufacturers to keep their product or to keep TH product rolling out, to keep that assembly line moving. It's not like a manufacturer comes in and they're building 2,000 boats next year, and they order 2,000 of these things to go sit at the warehouse. It's more in line with the production schedule of the manufacturers. They're not really having a huge or a significant or even a meaningful supply chain issue right now. They're pretty consistent on meeting the manufacturers on the OEM side, their demand in that timely manner to keep their boat lines moving forward. Like Jack Ezzell said, P&A. Yeah, go ahead. Yeah, I would say that's a great point because when you look at their business, it's much less seasonal than OneWater has been traditionally. To some degree, it's counter seasonal to OneWater's typical business where they'll have greater sales in our fiscal Q1 and Q2 versus Q3 and Q4. Their Q1 and Q2, manufacturers are loading up for the model year. They're providing them some increased sales, and then that dies off as the model year dies off, and then they prep for the next model year. Yeah. Their business is fairly consistent over Yeah. Yeah. They do a fantastic job. Jeff and team have done a fantastic job of keeping things streamlined and keeping the momentum matching what the manufacturers need on their production level, which was pretty impressive. Great. Thank you. I'm showing no further questions in queue at this time. Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect. Everyone, have a great day.