OneWater(US:ONEW)2025-08-01 21:07Cautionary Statement Regarding Forward-Looking Statements This section outlines important disclaimers and risks associated with forward-looking statements made in the report PART I – FINANCIAL INFORMATION Item 1. Condensed Consolidated Financial Statements (Unaudited) This section presents the unaudited condensed consolidated financial statements and notes for OneWater Marine Inc. for the interim periods ended June 30, 2025 Condensed Consolidated Balance Sheets Presents the company's financial position, including assets, liabilities, and equity, as of June 30, 2025, and September 30, 2024 Condensed Consolidated Balance Sheets (June 30, 2025 vs. September 30, 2024) | Metric (in thousands) | June 30, 2025 | September 30, 2024 | | :-------------------- | :------------ | :----------------- | | Total Assets | $1,540,429 | $1,589,989 | | Total Liabilities | $1,147,200 | $1,199,236 | | Total Stockholders' Equity | $393,229 | $390,753 | Condensed Consolidated Statements of Operations Details the company's revenues, expenses, and net income for the three and nine months ended June 30, 2025, and 2024 Condensed Consolidated Statements of Operations (Three Months Ended June 30) | Metric (in thousands) | June 30, 2025 | June 30, 2024 | | :-------------------- | :------------ | :------------ | | Total Revenues | $552,864 | $542,441 | | Income from Operations | $30,379 | $39,999 | | Net Income (Loss) | $10,715 | $16,714 | | Net Earnings Per Share (Diluted) | $0.65 | $0.99 | Condensed Consolidated Statements of Operations (Nine Months Ended June 30) | Metric (in thousands) | June 30, 2025 | June 30, 2024 | | :-------------------- | :------------ | :------------ | | Total Revenues | $1,412,199 | $1,394,775 |\ | Income from Operations | $44,677 | $60,325 | | Net Income (Loss) | $(3,272) | $4,235 | | Net Earnings Per Share (Diluted) | $(0.10) | $0.24 | Condensed Consolidated Statements of Comprehensive Income (Loss) Reports the company's comprehensive income or loss, including other comprehensive income, for the specified interim periods Condensed Consolidated Statements of Stockholders' Equity Outlines changes in stockholders' equity for the three and nine months ended June 30, 2025, and 2024 Condensed Consolidated Statements of Cash Flows Summarizes cash inflows and outflows from operating, investing, and financing activities for the nine months ended June 30, 2025, and 2024 Condensed Consolidated Statements of Cash Flows (Nine Months Ended June 30) | Metric (in thousands) | June 30, 2025 | June 30, 2024 | | :-------------------- | :------------ | :------------ |\ | Net cash provided by operating activities | $81,820 | $7,507 | | Net cash (used in) provided by investing activities | $(8,741) | $17,576 | | Net cash used in financing activities | $(18,462) | $(66,464) | | Net change in cash and restricted cash | $54,569 | $(41,380) | Notes to the Condensed Consolidated Financial Statements Provides detailed explanations and disclosures supporting the condensed consolidated financial statements 1. Description of Company and Basis of Presentation Describes the company's business operations and the basis for preparing the condensed consolidated financial statements 2. Summary of Significant Accounting Policies Outlines the key accounting principles and methods used in preparing the financial statements 3. New Accounting Pronouncements Discusses recently issued accounting standards and their potential impact on the company's financial reporting 4. Accounts Receivable Details the composition and accounting treatment of the company's accounts receivable 5. Inventories Provides information on the company's inventory valuation methods and balances 6. Goodwill and Intangible Assets Explains the accounting for goodwill and other intangible assets, including impairment considerations 7. Notes Payable — Floor Plan Details the company's floor plan financing arrangements for inventory purchases 8. Long-term Debt and Line of Credit Describes the company's long-term debt obligations and available credit facilities 9. Derivative and Hedging Instruments Explains the company's use of derivative instruments for hedging purposes and their accounting treatment 10. Stockholders' Equity Provides further details on the components of stockholders' equity and related transactions 11. Fair Value Measurements Discusses the fair value hierarchy and methods used for measuring financial instruments 12. Restructuring and Impairment Details any restructuring activities or impairment charges recognized by the company 13. Income Taxes Provides information on the company's income tax provisions, deferred taxes, and effective tax rates 14. Commitments and Contingencies Outlines the company's contractual commitments and potential contingent liabilities 15. Leases Details the company's lease arrangements and their impact on the financial statements 16. Related Party Transactions Discloses transactions between the company and its related parties 17. Segment Information Presents financial information disaggregated by the company's operating segments 18. Subsequent Events Reports significant events that occurred after the balance sheet date but before the financial statements were issued Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's financial condition, operational results, and key performance drivers for the periods ended June 30, 2025, including non-GAAP measures and liquidity - OneWater Marine Inc. is one of the largest and fastest-growing marine retailers in the United States, operating 97 dealerships, 9 distribution centers/warehouses, and multiple online marketplaces as of June 30, 2025144 - The company operates through two reportable segments: Dealerships (93% of revenues) and Distribution (7% of revenues)146147 - Acquisitions are a key growth strategy, with 82 additional dealerships and 12 distribution centers/warehouses acquired since 2014. The company plans to continue strategic acquisitions148150 - Non-boat sales (finance & insurance, service, parts & other) contributed 18.2% of revenue but 42.1% of gross profit for the three months ended June 30, 2025, highlighting their higher margin profile157 Overview Provides a general introduction to the company's business and financial performance Trends and Other Factors Impacting Our Performance Discusses key industry trends and external factors influencing the company's operational and financial results Critical Accounting Estimates Highlights the significant accounting judgments and estimates that require management's most difficult, subjective, or complex judgments How We Evaluate Our Operations Explains the key metrics and methodologies management uses to assess the company's operational performance Summary of Acquisitions Summarizes recent acquisition activities and their strategic rationale Results of Operations Analyzes the company's financial performance for the reported periods, detailing revenue and expense drivers Three Months Ended June 30, 2025, Compared to Three Months Ended June 30, 2024 Compares the company's financial results for the three months ended June 30, 2025, against the prior year period Nine Months Ended June 30, 2025, Compared to Nine Months Ended June 30, 2024 Compares the company's financial results for the nine months ended June 30, 2025, against the prior year period Comparison of Non-GAAP Financial Measures Reconciles and discusses non-GAAP financial measures used by management to evaluate performance Adjusted EBITDA Presents the calculation and reconciliation of Adjusted EBITDA, a key non-GAAP performance metric Adjusted Net Income (Loss) Attributable to OneWater Marine Inc. and Adjusted Diluted Earnings (Loss) Per Share Details the calculation and reconciliation of adjusted net income and diluted earnings per share Seasonality Explains the seasonal patterns and their impact on the company's revenues and profitability Liquidity and Capital Resources Analyzes the company's ability to generate and manage cash, including debt, credit facilities, and share repurchases Overview Provides a general overview of the company's liquidity position and capital structure Cash Flows Analyzes the company's cash flow activities from operations, investing, and financing Share Repurchase Program Details the company's share repurchase activities and remaining authorization Debt Agreements Summarizes the terms and conditions of the company's various debt agreements Notes Payable Provides specific information regarding the company's notes payable obligations Tax Receivable Agreement Explains the terms and financial implications of the company's tax receivable agreement Recent Accounting Pronouncements Discusses the impact of recently adopted or issued accounting standards on the company's financial reporting Item 3. Quantitative and Qualitative Disclosure about Market Risk This section details the company's exposure to market risks, primarily interest rate and foreign currency risks, and mitigation strategies - The company is exposed to interest rate risk from its Inventory Financing Facility and A&R Credit Facility, with interest rates tied to SOFR and Term SOFR259260 Interest Rate Sensitivity (as of June 30, 2025) | Facility | Uncovered Balance (in millions) | Impact of 100 bps change in interest expense (in millions) | | :---------------------- | :------------------------------ | :------------------------------------------------------- | | Inventory Financing Facility | $235.8 | ~$2.4 | | A&R Credit Facility | $222.7 | ~$2.2 | - To mitigate interest rate risk, the company has two interest rate swap agreements with a combined notional amount of $400.0 million, maturing in September 2027261 Interest Rate Risk Analyzes the company's exposure to interest rate fluctuations and its hedging strategies Foreign Currency Risk Discusses the company's exposure to foreign currency exchange rate fluctuations from international transactions Item 4. Controls and Procedures Management evaluated the effectiveness of disclosure controls and procedures, confirming their efficacy with no material changes in internal control - Disclosure controls and procedures were evaluated and deemed effective as of June 30, 2025264 - No material changes in internal control over financial reporting occurred during the three months ended June 30, 2025265 Disclosure Controls and Procedures Describes the company's controls designed to ensure timely and accurate disclosure of financial information Changes in Internal Control Over Financial Reporting Reports any material changes in the company's internal control over financial reporting during the period PART II – OTHER INFORMATION Item 1. Legal Proceedings The company is involved in various legal proceedings, which management believes will not materially adversely affect its financial position - Management assesses that pending litigation, disputes, or claims are not reasonably probable to have a material adverse effect on financial condition, results of operations, or cash flows as of June 30, 2025268 Item 1A. Risk Factors This section highlights new risks related to international trade policies, including tariffs and their potential impact on costs and supply chains - New risk factor identified: Risks associated with international trade policies, including tariffs and other restrictions270 - Tariffs or governmental actions could increase procurement/manufacturing costs, delay deliveries, and limit inventory availability for both the Dealership and Distribution segments271 - Uncertainty in U.S. trade policy may create pricing volatility or supply chain disruptions, potentially impacting gross margins and profitability272 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds Details the company's share repurchase program, including authorization, shares repurchased, and remaining availability - Share repurchase program authorized for up to $50 million of Class A common stock273 - No shares were repurchased during the three months ended June 30, 2025273 - $48.1 million remains available under the share repurchase program as of June 30, 2025273 Item 3. Defaults Upon Senior Securities No defaults upon senior securities were reported Item 4. Mine Safety Disclosures This item is not applicable to the company's operations Item 5. Other Information No other material information was reported under this item Item 6. Exhibits This section lists all exhibits filed with the Form 10-Q, including key agreements and certifications