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Financial report summary
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MarinemaxRisks
- General economic conditions and consumer spending patterns can have a material adverse effect on our business, financial condition and results of operations.
- Inflation could adversely affect our financial results.
- Our sales may be adversely affected by a material increase in interest rates and adverse changes in fiscal policy or credit market conditions.
- Our success depends to a significant extent on our manufacturers, and the loss of certain manufacturers could have an adverse effect on our business, financial condition, and results of operations.
- Boat manufacturers exercise control over our business.
- Manufacturer recall campaigns could adversely affect our business.
- Our business, as well as the entire retail marine industry, is highly seasonal, with seasonality varying in different geographic markets.
- The failure to receive rebates and other manufacturer incentives on inventory purchases or retail sales could substantially reduce our margins.
- Other recreational activities, poor industry perception, real or perceived human health or safety risks, changing consumer attitudes and environmental conditions can adversely affect the levels of boat purchases.
- We face intense competition.
- Failure to implement strategies to enhance our performance could have a material adverse effect on our business and financial condition.
- Our success depends, in part, on our ability to continue to make successful acquisitions at attractive or fair prices and to integrate the operations of acquired marine retailers and each marine retailer we acquire in the future.
- Unforeseen expenses, difficulties and delays frequently encountered in connection with expansion through acquisitions could inhibit our growth and negatively impact our profitability.
- We are required to obtain the consent of our manufacturers prior to the acquisition of other dealers.
- Our internal growth and operating strategies of opening new dealerships and offering new products involve risk.
- Our growth strategy may require us to secure significant additional capital, the amount of which will depend upon the size, timing and structure of future acquisitions and our working capital and general corporate needs.
- With our growth and diversification strategy into marine related parts, products and accessories, we now import, assemble and/or manufacturer marine parts, products and accessories, which could expose us to potential increased costs and certain additional risks.
- The availability and costs of borrowed funds can adversely affect our ability to obtain adequate boat inventory, the ability and willingness of our customers to finance boat purchases and our ability to fund future acquisitions.
- Increases in fuel prices may adversely affect our business.
- The availability of boat insurance is critical to our success.
- Our failure to successfully order and manage our inventory to reflect consumer demand and to anticipate changing consumer preferences and buying trends, or the lack or excess of inventory in the industry, generally, could have a material adverse effect on our business, financial condition and results of operations.
- We depend on our ability to attract and retain customers.
- We depend on income from financing, insurance and extended service contracts.
- Our operations are dependent upon key personnel and team members.
- The products we sell or service may expose us to potential liability for personal injury, product liability or property damage claims relating to the use of those products.
- If we cannot dispose of pre-owned boats acquired through our trade-in or direct purchase processes at prices that allow us to recover its costs, our profitability will be adversely affected.
- Our sales of boats and other products produced by certain foreign manufacturers expose us to international political, economic, and other risks.
- We have established online marketplaces and a failure in such online operations, security breaches and cybersecurity risks could disrupt our business and lead to reduced sales and growth prospects and reputational damage.
- We may be unable to adequately maintain, enforce, and protect our intellectual property rights and we may be accused of infringing the intellectual property rights of third parties, which could have a material adverse effect on our business, financial condition, and operations.
- Changes in the assumptions used to calculate our acquisition related contingent consideration liabilities could have a material adverse impact on our financial results.
- An impairment in the carrying value of long-lived assets, goodwill and identifiable intangible assets could negatively impact our financial results and net worth.
- Our Dealership same-store sales may fluctuate and may not be a meaningful indicator of future performance.
- We primarily lease our locations. If we are unable to maintain those leases or locate alternative sites for our locations in our target markets and on terms that are acceptable to us, our revenues and profitability could be adversely affected.
- Because we use various materials and substances in manufacturing our chemical products, our production facilities are subject to operating hazards that could cause personal injury and loss of life, severe damage to, or destruction of, property and equipment.
- Climatic events may adversely impact our operations, disrupt the business of our third party vendors on whom we rely upon for products and services, and may not be adequately covered by our insurance.
- A significant amount of our boat sales are from the Southeast and Gulf Coast regions.
- Environmental and other regulatory issues impact our operations from time to time.
- Our operations are subject to risks arising out of the threat of climate change, which could result in increased operating costs and reduced demand for the products that we and the retail recreational boat industry provide.
- OneWater Inc. is a holding company. OneWater Inc.’s only material asset is its equity interest in OneWater LLC directly or indirectly through its equity ownership in other wholly owned subsidiaries, and OneWater Inc. is accordingly dependent upon distributions from OneWater LLC to pay taxes, make payments under the Tax Receivable Agreement and cover OneWater Inc.’s corporate and other overhead expenses.
- The requirements of being a public company, including compliance with the reporting requirements of the Exchange Act, and the requirements of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), may strain our resources, increase our costs and distract management, and we may be unable to comply with these requirements in a timely or cost-effective manner.
- If we experience any material weaknesses in the future or otherwise fail to develop or maintain an effective system of internal controls in the future, we may not be able to accurately report our financial condition or results of operations, which may adversely affect investor confidence in us and, as a result, the value of our Class A common stock.
- An active, liquid and orderly trading market for our Class A common stock may not develop or be maintained, and our stock price may be volatile.
- Our Legacy Owners own a significant amount of our voting stock, and their interests may conflict with those of our other stockholders.
- Certain of our executive officers and directors have significant duties with, and spend significant time serving, entities that may compete with us in seeking business opportunities and, accordingly, may have conflicts of interest in allocating time or pursuing business opportunities.
- Our certificate of incorporation and bylaws, as well as Delaware law, contain provisions that could discourage acquisition bids or merger proposals, which may adversely affect the market price of our Class A common stock and could deprive our investors of the opportunity to receive a premium for their shares.
- Our certificate of incorporation designates the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders and our bylaws designate the federal district courts of the United States shall be the sole and exclusive forum for the resolution of causes of action arising under the Securities Act of 1933. These designations could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, employees or agents.
- While the Board of Directors declared a one-time special cash dividend of $1.80 per share on June 17, 2021, we do not intend to pay cash dividends on our Class A common stock, and our Credit Facilities place certain restrictions on our ability to do so. Consequently, your only opportunity to achieve a return on your investment is if the price of our Class A common stock appreciates.
- Future sales or issuances of our Class A common stock in the public market, or the perception that such sales or issuances may occur, could reduce our stock price, and any additional capital raised by us through the sale or issuance of equity or convertible securities may dilute your ownership in us.
- OneWater Inc. is required to make payments under the Tax Receivable Agreement for certain tax benefits that it may claim, and the amounts of such payments could be significant.
- In certain cases, payments under the Tax Receivable Agreement may be accelerated and/or significantly exceed the actual benefits, if any, OneWater Inc. realizes in respect of the tax attributes subject to the Tax Receivable Agreement.
- In the event that OneWater Inc.’s payment obligations under the Tax Receivable Agreement are accelerated upon certain mergers, other forms of business combinations or other changes of control, the consideration payable to holders of OneWater Inc.’s Class A common stock could be substantially reduced.
- OneWater Inc. will not be reimbursed for any payments made under the Tax Receivable Agreement in the event that any tax benefits are subsequently disallowed.
- If OneWater LLC were to become a publicly traded partnership taxable as a corporation for U.S. federal income tax purposes, OneWater Inc. and OneWater LLC might be subject to potentially significant tax inefficiencies, and OneWater Inc. would not be able to recover payments previously made by it under the Tax Receivable Agreement even if the corresponding tax benefits were subsequently determined to have been unavailable due to such status.
- Changes to applicable tax laws and regulations or exposure to additional income tax liabilities could affect our business and future profitability.
- We may issue preferred stock whose terms could adversely affect the voting power or value of our Class A common stock.
- If we were deemed to be an investment company under the Investment Company Act of 1940, as amended (the “1940 Act”), as a result of our ownership of OneWater LLC, applicable restrictions could make it impractical for us to continue our business as contemplated and could have a material adverse effect on our business, financial condition and results of operations.
- If securities or industry analysts cease publishing research or reports about our business, if they adversely change their recommendations regarding our Class A common stock or if our operating results do not meet their expectations, our stock price could decline.
- Our business operations could be negatively impacted by an outage or breach of our informational technology systems or a cybersecurity event.
- We are subject to laws, rules, regulations and policies regarding data privacy and security, and may be subject to additional related laws and regulations in jurisdictions in which we operate or expand. Many of these laws and regulations are subject to change and reinterpretation, and any real or perceived failure to comply with such obligations could result in claims, changes to our business practices, monetary penalties, increased cost of operations or other harm to our business.
- We may be named in litigation, which may result in substantial costs and reputational harm and divert management’s attention and resources.
- Changes in accounting standards could significantly affect our results of operations and the presentation of those results.
- Adverse federal or state tax policies or changes in law could have a negative effect on us.
- Our business could be materially adversely impacted by the widespread outbreak of a contagious disease.
Management Discussion
- •Effective October 31, 2023, we exercised our right to acquire the remaining 20% economic interest in Quality Assets and Operations, LLC. Subsequent to the acquisition, the Company now owns 100% of the economic interest in Quality Assets and Operations, LLC.
- 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 months ended December 31, 2022. The acquisition of Harbor View Marine is partially reflected in our unaudited Condensed Consolidated Statements of Operations for the three months ended December 31, 2022. The acquisition of Harbor Pointe Marina is not reflected in our unaudited Condensed Consolidated Statements of Operations for the three months ended December 31, 2022.
- •There were no dispositions during the three months ended December 31, 2023.