Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Mar. 31, 2022 | Apr. 28, 2022 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2022 | |
Current Fiscal Year End Date | --09-30 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q2 | |
Document Transition Report | false | |
Entity File Number | 001-39213 | |
Entity Registrant Name | OneWater Marine Inc. | |
Entity Central Index Key | 0001772921 | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 83-4330138 | |
Entity Address, Address Line One | 6275 Lanier Islands Parkway | |
Entity Address, City or Town | Buford | |
Entity Address, State or Province | GA | |
Entity Address, Postal Zip Code | 30518 | |
City Area Code | 678 | |
Local Phone Number | 541-6300 | |
Title of 12(b) Security | Class A common stock, par value $0.01 per share | |
Trading Symbol | ONEW | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Common Class A [Member] | ||
Entity Common Stock, Shares Outstanding | 14,133,130 | |
Common Class B [Member] | ||
Entity Common Stock, Shares Outstanding | 1,429,940 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2022 | Sep. 30, 2021 |
Current assets: | ||
Cash | $ 83,030 | $ 62,606 |
Restricted cash | 5,927 | 11,343 |
Accounts receivable, net | 82,725 | 28,529 |
Inventories | 293,170 | 143,880 |
Prepaid expenses and other current assets | 50,926 | 34,580 |
Total current assets | 515,778 | 280,938 |
Property and equipment, net | 77,658 | 67,114 |
Operating lease right-of-use assets | 119,675 | 89,141 |
Other assets: | ||
Deposits | 572 | 526 |
Deferred tax assets | 31,152 | 29,110 |
Identifiable intangible assets, net | 231,124 | 85,294 |
Goodwill | 313,460 | 168,491 |
Total other assets | 576,308 | 283,421 |
Total assets | 1,289,419 | 720,614 |
Current liabilities: | ||
Accounts payable | 43,858 | 18,114 |
Other payables and accrued expenses | 46,909 | 27,665 |
Customer deposits | 63,514 | 46,610 |
Notes payable - floor plan | 254,853 | 114,234 |
Current portion of operating lease liabilities | 11,660 | 9,159 |
Current portion of long-term debt | 17,294 | 11,366 |
Current portion of tax receivable agreement liability | 915 | 482 |
Total current liabilities | 439,003 | 227,630 |
Long-term Liabilities: | ||
Other long-term liabilities | 26,060 | 14,991 |
Tax receivable agreement liability | 45,290 | 39,622 |
Noncurrent operating lease liabilities | 108,683 | 80,464 |
Long-term debt, net of current portion and unamortized debt issuance costs | 321,448 | 103,074 |
Total liabilities | 940,484 | 465,781 |
Stockholders' Equity: | ||
Preferred stock, $0.01 par value, 1,000,000 shares authorized, none issued and outstanding as of March 31, 2022 and September 30, 2021 | 0 | 0 |
Additional paid-in capital | 168,095 | 150,825 |
Retained earnings | 130,560 | 74,952 |
Total stockholders' equity attributable to OneWater Marine Inc. | 298,808 | 225,928 |
Equity attributable to non-controlling interests | 50,127 | 28,905 |
Total stockholders' equity | 348,935 | 254,833 |
Total liabilities and stockholders' equity | 1,289,419 | 720,614 |
Class A Common Stock [Member] | ||
Stockholders' Equity: | ||
Common stock | 139 | 133 |
Class B Common Stock [Member] | ||
Stockholders' Equity: | ||
Common stock | $ 14 | $ 18 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Mar. 31, 2022 | Sep. 30, 2021 |
Stockholders' Equity: | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 1,000,000 | 1,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Class A Common Stock [Member] | ||
Stockholders' Equity: | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 40,000,000 | 40,000,000 |
Common stock, shares issued (in shares) | 13,879,290 | 13,276,538 |
Common stock, shares outstanding (in shares) | 13,879,290 | 13,276,538 |
Class B Common Stock [Member] | ||
Stockholders' Equity: | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Common stock, shares issued (in shares) | 1,429,940 | 1,819,112 |
Common stock, shares outstanding (in shares) | 1,429,940 | 1,819,112 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Mar. 31, 2022 | Mar. 31, 2021 | |
Revenues | ||||
Total revenues | $ 442,127 | $ 329,611 | $ 778,399 | $ 543,694 |
Cost of sales (exclusive of depreciation and amortization shown separately below) | ||||
Total cost of sales | 299,585 | 240,825 | 534,892 | 402,472 |
Selling, general and administrative expenses | 75,492 | 48,348 | 134,588 | 83,208 |
Depreciation and amortization | 4,727 | 1,378 | 6,476 | 2,341 |
Transaction costs | 776 | 368 | 3,821 | 568 |
Change in fair value of contingent consideration | 2,158 | 0 | 7,904 | 377 |
Income from operations | 59,389 | 38,692 | 90,718 | 54,728 |
Other expense (income) | ||||
Interest expense - floor plan | 1,048 | 330 | 1,925 | 1,250 |
Interest expense - other | 3,097 | 1,215 | 4,626 | 2,139 |
Other expense (income), net | 109 | 5 | 657 | (89) |
Total other expense, net | 4,254 | 1,550 | 7,208 | 3,300 |
Income before income tax expense | 55,135 | 37,142 | 83,510 | 51,428 |
Income tax expense | 12,781 | 6,550 | 17,670 | 9,061 |
Net income | 42,354 | 30,592 | 65,840 | 42,367 |
Less: Net income attributable to non-controlling interests | 1,011 | 0 | 1,011 | 0 |
Less: Net income loss attributable to noncontrolling interest of OneWater Marine Holdings LLC | 5,046 | 10,117 | 8,513 | 14,104 |
Net income attributable to OneWater Marine Inc | 36,297 | 20,475 | 56,316 | 28,263 |
New Boat [Member] | ||||
Revenues | ||||
Total revenues | 290,020 | 239,654 | 526,218 | 391,482 |
Cost of sales (exclusive of depreciation and amortization shown separately below) | ||||
Total cost of sales | 208,606 | 187,147 | 384,502 | 309,679 |
Pre-Owned Boat [Member] | ||||
Revenues | ||||
Total revenues | 75,854 | 56,082 | 129,303 | 94,662 |
Cost of sales (exclusive of depreciation and amortization shown separately below) | ||||
Total cost of sales | 55,959 | 42,548 | 95,329 | 73,000 |
Finance & Insurance [Member] | ||||
Revenues | ||||
Total revenues | 14,948 | 11,789 | 24,255 | 17,752 |
Service, Parts & Other [Member] | ||||
Revenues | ||||
Total revenues | 61,305 | 22,086 | 98,623 | 39,798 |
Cost of sales (exclusive of depreciation and amortization shown separately below) | ||||
Total cost of sales | $ 35,020 | $ 11,130 | $ 55,061 | $ 19,793 |
Class A Common Stock [Member] | ||||
Other expense (income) | ||||
Earnings per share, Basic (in dollars per share) | $ 2.62 | $ 1.88 | $ 4.14 | $ 2.61 |
Earnings per share, Diluted (in dollars per share) | $ 2.54 | $ 1.83 | $ 4.02 | $ 2.55 |
Basic weighted-average shares outstanding (in shares) | 13,864 | 10,901 | 13,619 | 10,838 |
Diluted weighted-average shares outstanding (in shares) | 14,272 | 11,171 | 14,017 | 11,083 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands | Common Stock [Member]Class A Common Stock [Member] | Common Stock [Member]Class B Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Non-controlling Interest [Member] | Total |
Beginning balance at Sep. 30, 2020 | $ 104 | $ 46 | $ 105,947 | $ 16,757 | $ 50,433 | $ 173,287 |
Beginning balance (in shares) at Sep. 30, 2020 | 10,392 | 4,583 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | $ 0 | $ 0 | 0 | 7,788 | 3,987 | 11,775 |
Distributions to members | 0 | 0 | 0 | 0 | (1,319) | (1,319) |
Effect of September offering, including underwriter exercise of option to purchase shares | $ 4 | $ (4) | 4,146 | 0 | (4,256) | (110) |
Effect of September offering, including underwriter exercise of option to purchase shares (in shares) | 387 | (387) | ||||
Exchange of B shares for A shares | $ 1 | $ (1) | 916 | 0 | (916) | 0 |
Exchange of B shares for A shares (in shares) | 88 | (88) | ||||
Establishment of liabilities under tax receivable agreement and related changes to deferred tax assets associated with increases in tax basis | $ 0 | $ 0 | (228) | 0 | 0 | (228) |
Adjustment to adopt Topic 842 | 0 | 0 | 0 | 1,073 | 0 | 1,073 |
Equity-based compensation | 0 | 0 | 1,078 | 0 | 0 | 1,078 |
Ending balance at Dec. 31, 2020 | $ 109 | $ 41 | 111,859 | 25,618 | 47,929 | 185,556 |
Ending balance (in shares) at Dec. 31, 2020 | 10,867 | 4,108 | ||||
Beginning balance at Sep. 30, 2020 | $ 104 | $ 46 | 105,947 | 16,757 | 50,433 | 173,287 |
Beginning balance (in shares) at Sep. 30, 2020 | 10,392 | 4,583 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 42,367 | |||||
Ending balance at Mar. 31, 2021 | $ 110 | $ 41 | 113,088 | 46,032 | 57,348 | 216,619 |
Ending balance (in shares) at Mar. 31, 2021 | 10,968 | 4,071 | ||||
Beginning balance at Dec. 31, 2020 | $ 109 | $ 41 | 111,859 | 25,618 | 47,929 | 185,556 |
Beginning balance (in shares) at Dec. 31, 2020 | 10,867 | 4,108 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | $ 0 | $ 0 | 0 | 20,475 | 10,117 | 30,592 |
Distributions to members | 0 | 0 | 0 | (61) | (140) | (201) |
Exchange of B shares for A shares | $ 0 | $ 0 | 558 | 0 | (558) | 0 |
Exchange of B shares for A shares (in shares) | 37 | (37) | ||||
Establishment of liabilities under tax receivable agreement and related changes to deferred tax assets associated with increases in tax basis | $ 0 | $ 0 | (6) | 0 | 0 | (6) |
Shares issued upon vesting of equity-based awards, net of tax withholding | $ 1 | $ 0 | (450) | 0 | 0 | (449) |
Shares issued upon vesting of equity-based awards, net of tax withholding (in shares) | 64 | 0 | ||||
Equity-based compensation | $ 0 | $ 0 | 1,127 | 0 | 0 | 1,127 |
Ending balance at Mar. 31, 2021 | $ 110 | $ 41 | 113,088 | 46,032 | 57,348 | 216,619 |
Ending balance (in shares) at Mar. 31, 2021 | 10,968 | 4,071 | ||||
Beginning balance at Sep. 30, 2021 | $ 133 | $ 18 | 150,825 | 74,952 | 28,905 | 254,833 |
Beginning balance (in shares) at Sep. 30, 2021 | 13,277 | 1,819 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | $ 0 | $ 0 | 0 | 20,019 | 3,467 | 23,486 |
Distributions to members | 0 | 0 | 0 | (442) | (177) | (619) |
Non-controlling interest in subsidiary | 0 | 0 | 0 | 0 | 19,311 | 19,311 |
Exchange of B shares for A shares | $ 4 | $ (4) | 7,405 | 0 | (7,405) | 0 |
Exchange of B shares for A shares (in shares) | 389 | (389) | ||||
Establishment of liabilities under tax receivable agreement and related changes to deferred tax assets associated with increases in tax basis | $ 0 | $ 0 | (283) | 0 | 0 | (283) |
Shares issued upon vesting of equity-based awards, net of tax withholding | $ 1 | $ 0 | (469) | 0 | 0 | (468) |
Shares issued upon vesting of equity-based awards, net of tax withholding (in shares) | 53 | 0 | ||||
Shares issued in connection with a business combination | $ 1 | $ 0 | 6,833 | 0 | 0 | 6,834 |
Shares issued in connection with a business combination (in shares) | 133 | 0 | ||||
Equity-based compensation | $ 0 | $ 0 | 2,100 | 0 | 0 | 2,100 |
Ending balance at Dec. 31, 2021 | $ 139 | $ 14 | 166,411 | 94,529 | 44,101 | 305,194 |
Ending balance (in shares) at Dec. 31, 2021 | 13,852 | 1,430 | ||||
Beginning balance at Sep. 30, 2021 | $ 133 | $ 18 | 150,825 | 74,952 | 28,905 | 254,833 |
Beginning balance (in shares) at Sep. 30, 2021 | 13,277 | 1,819 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 65,840 | |||||
Ending balance at Mar. 31, 2022 | $ 139 | $ 14 | 168,095 | 130,560 | 50,127 | 348,935 |
Ending balance (in shares) at Mar. 31, 2022 | 13,879 | 1,430 | ||||
Beginning balance at Dec. 31, 2021 | $ 139 | $ 14 | 166,411 | 94,529 | 44,101 | 305,194 |
Beginning balance (in shares) at Dec. 31, 2021 | 13,852 | 1,430 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | $ 0 | $ 0 | 0 | 36,297 | 6,057 | 42,354 |
Distributions to members | 0 | 0 | 0 | (266) | (605) | (871) |
Exchange of B shares for A shares | $ 0 | $ 0 | (574) | 0 | 574 | 0 |
Exchange of B shares for A shares (in shares) | 0 | 0 | ||||
Shares issued upon vesting of equity-based awards, net of tax withholding | $ 0 | $ 0 | (455) | 0 | 0 | (455) |
Shares issued upon vesting of equity-based awards, net of tax withholding (in shares) | 27 | 0 | ||||
Equity-based compensation | $ 0 | $ 0 | 2,713 | 0 | 0 | 2,713 |
Ending balance at Mar. 31, 2022 | $ 139 | $ 14 | $ 168,095 | $ 130,560 | $ 50,127 | $ 348,935 |
Ending balance (in shares) at Mar. 31, 2022 | 13,879 | 1,430 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Cash flows from operating activities | ||
Net income | $ 65,840 | $ 42,367 |
Adjustments to reconcile net income to net cash used in operating activities: | ||
Depreciation and amortization | 6,541 | 2,341 |
Equity-based awards | 4,813 | 2,205 |
Gain on asset disposals | (14) | (136) |
Non-cash interest expense | 626 | 393 |
Deferred income tax provision | 3,463 | 1,787 |
Loss on change in fair value of contingent consideration | 7,904 | 0 |
(Increase) decrease in assets: | ||
Accounts receivable | (44,119) | (22,417) |
Inventories | (113,879) | (30,551) |
Prepaid expenses and other current assets | (14,189) | 1,083 |
Deposits | (50) | (128) |
Increase (decrease) in liabilities: | ||
Accounts payable | 26,363 | 12,971 |
Other payables and accrued expenses | 4,810 | (126) |
Tax receivable agreement liability | 313 | 0 |
Customer deposits | 8,156 | 20,792 |
Net cash (used in) provided by operating activities | (43,422) | 30,581 |
Cash flows from investing activities | ||
Purchases of property and equipment and construction in progress | (7,993) | (5,126) |
Proceeds from disposal of property and equipment | 22 | 118 |
Cash used in acquisitions | (288,894) | (85,499) |
Net cash used in investing activities | (296,865) | (90,507) |
Cash flows from financing activities | ||
Net borrowings from floor plan | 140,619 | 55,751 |
Proceeds from long-term debt | 240,000 | 30,000 |
Payments on long-term debt | (13,842) | (3,334) |
Payments of debt issuance costs | (4,053) | (653) |
Payments of September 2020 offering costs | 0 | (540) |
Payments of contingent consideration | (53) | 0 |
Payments of tax withholdings for equity-based awards | (923) | (449) |
Distributions to members | (6,453) | (1,520) |
Net cash provided by financing activities | 355,295 | 79,255 |
Net change in cash | 15,008 | 19,329 |
Cash and restricted cash at beginning of period | 73,949 | 68,153 |
Cash and restricted cash at end of period | 88,957 | 87,482 |
Supplemental cash flow disclosures | ||
Cash paid for interest | 5,925 | 2,996 |
Cash paid for income taxes | 6,310 | 7,480 |
Noncash items | ||
Acquisition purchase price funded by seller notes payable | 1,126 | 2,056 |
Acquisition purchase price funded by contingent consideration | 15,321 | 5,482 |
Acquisition purchase price funded by issuance of Class A common stock | 6,834 | 0 |
Purchase of property and equipment funded by long-term debt | 529 | 1,280 |
Initial operating lease right-of-use assets for adoption of Topic 842 | 0 | 71,835 |
Right-of-use assets obtained in exchange for new operating lease liabilities | $ 36,174 | $ 17,131 |
Description of Company and Basi
Description of Company and Basis of Presentation | 6 Months Ended |
Mar. 31, 2022 | |
Description of Company and Basis of Presentation [Abstract] | |
Description of Company and Basis of Presentation | 1. Description of Company and Basis of Presentation Description of the Business OneWater Marine Inc. (“OneWater Inc.”) was incorporated in Delaware on April 3, 2019 and was a wholly-owned subsidiary of One Water Marine Holdings, LLC (“OneWater LLC”). Pursuant to a reorganization on February 11, 2020 into a holding company structure for the purpose of facilitating an initial public offering (the “IPO”) and related transactions in order to carry on the business of OneWater LLC and its subsidiaries (together with OneWater Marine Inc., the “Company”), OneWater Inc. is the holding company and its sole material asset is the equity interest in OneWater LLC. OneWater LLC was organized as a limited liability company under the law of the State of Delaware in 2014 and is the parent company of One Water Assets & Operations (“OWAO”), and its wholly-owned and majority-owned subsidiaries. The Company is one of the largest recreational boat retailers in the United States. The Company engages primarily in the retail sale, brokerage, and service of new and pre-owned boats, motors, trailers, the sale of marine parts and accessories, and offers slip and storage accommodations in certain locations. The Company also arranges related boat financing, insurance, and extended service contracts for customers with third-party lenders and insurance companies. As of March 31, 2022, the Company operated a total of 75 retail locations, 10 distribution centers/warehouses and multiple online marketplaces in sixteen states, several of which are in the top twenty states for marine retail expenditures. Operating results are generally subject to seasonal variations. Demand for products is generally highest during the third and fourth quarters of the fiscal year and, accordingly, revenues are generally expected to be higher during these periods. General economic conditions and consumer spending patterns can negatively impact the Company’s operating results. Unfavorable local, regional, national, or global economic developments, global public health concerns, including the COVID-19 pandemic, or uncertainties could reduce consumer spending and adversely affect the Company’s business. Consumer spending on discretionary goods may also decline as a result of lower consumer confidence levels, even if prevailing economic conditions are otherwise favorable. Economic conditions in areas in which the Company operates stores, particularly in the Southeast, can have a major impact on the Company’s overall results of operations. Local influences such as corporate downsizing, inclement weather such as hurricanes and other storms, environmental conditions, and other events could adversely affect the Company’s operations in certain markets and in certain periods. Any extended period of adverse economic conditions or low consumer confidence is likely to have a negative effect on the Company’s business. Sales of new boats from the Company’s top ten brands represent approximately 43.8% and 39.8% of total sales for the six months ended March 31, 2022 and 2021, respectively, making them major suppliers of the Company. Of this amount, Malibu Boats, Inc., including its brands Malibu, Axis, Cobalt, Pursuit, Maverick, Hewes, Cobia and Pathfinder accounted for 15.1% and 15.7% of our consolidated revenue for the six months ended March 31, 2022 and 2021, respectively. As is typical in the industry, the Company contracts with most manufacturers under renewable annual dealer agreements, each of which provides the right to sell various makes and models of boats within a given geographic region. Any change or termination of these agreements, or the agreements discussed above, for any reason, or changes in competitive, regulatory, or marketing practices, including rebate or incentive programs, could adversely affect results of operations. Pre-owned boats are usually trade-ins from retail customers who are purchasing a boat from the Company. Principles of Consolidation As the sole managing member of OneWater LLC, OneWater Inc. operates and controls all of the businesses and affairs of OneWater LLC, and through OneWater LLC and its wholly-owned subsidiaries as well as majority-owned subsidiaries over which the Company exercises control, conducts its business. As a result, OneWater Inc. consolidates the financial results of OneWater LLC and its subsidiaries and reports non-controlling interests related to the portion of units of OneWater LLC (the “OneWater LLC Units”) not owned by OneWater Inc., which will reduce net income (loss) attributable to OneWater Inc.’s Class A stockholders. As of March 31, 2022, OneWater Inc. owned 90.7% of the economic interest of OneWater LLC. Commencing December 31, 2021, the Company owns 80% of the economic interest of Quality Assets and Operations, over which the Company exercises control and the minority interest in this subsidiary has been recorded accordingly. See Note 4 for additional information regarding the acquisition. Basis of Financial Statement Preparation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial statements, which do not include all the information and notes required by such accounting principles for annual financial statements. The unaudited condensed consolidated financial statements should be read in conjunction with OneWater Inc.’s Annual Report on Form 10-K for the year ended September 30, 2021. All adjustments, consisting of only normal recurring adjustments considered necessary for fair presentation, have been reflected in these unaudited condensed consolidated financial statements. All intercompany transactions have been eliminated in consolidation. The Company operates on a fiscal year basis with the first day of the fiscal year being October 1, and the last day of the year ending on September 30. Additionally, since there are no differences between net income and comprehensive income, all references to comprehensive income have been excluded from the accompanying unaudited condensed consolidated financial statements. COVID-19 Pandemic In March 2020, the Company began seeing the impact of the COVID-19 global pandemic on its business. During the subsequent months the Company followed the guidance of local governments and health officials, we temporarily closed or reduced staffing at certain departments and locations. All locations have reopened and the Company has implemented cleaning and social distancing techniques at each of its locations. In light of the current environment, the Company’s sales team members are providing customers with the option of in-person or virtual walkthroughs of inventory and/or private, at home or on water showings. The duration and related impact on the Company’s consolidated financial statements is currently uncertain, and it is possible that the pandemic, including the resurgence of COVID-19 in certain geographic areas or the emergence of variant strains of the virus, may negatively impact the Company’s future results of operations. The impact of COVID-19 on our suppliers and the recent increase in demand for marine retail products has led to industry-wide supply chain constraints. The Company is monitoring and assessing the situation and preparing for implications to the business, including the ability to safely operate its stores, access to inventory and customer demand. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Mar. 31, 2022 | |
Summary of Significant Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Fair Value of Financial Instruments The Company’s financial instruments include cash and cash equivalents, accounts receivable, accounts payable, other payables and accrued expenses, floor plan notes payable, term note payable and revolving note payable with Truist Bank, seller notes payable and company vehicle notes payable. The carrying values approximate their fair values because of the nature of their terms and current market rates of these instruments. Inventories Inventories are stated at the lower of cost or net realizable value. The cost of the new and pre-owned boat inventory is determined using the specific identification method. In assessing lower of cost or net realizable value, the Company considers the aging of the boats, historical sales of a brand and current market conditions. The cost of manufactured and assembled parts and accessories is determined using standard costing. The cost of acquired parts and accessories is determined using the weighted average cost method. Goodwill and Other Identifiable Intangible Assets Goodwill and intangible assets are accounted for in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 350, ‘‘Intangibles - Goodwill and Other’’ (‘‘ASC 350’’), which provides that the excess of cost over the fair value of the net assets of businesses acquired, including other identifiable intangible assets, is recorded as goodwill. Goodwill is an asset representing operational synergies and future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized. In accordance with ASC 350, Goodwill is tested for impairment at least annually, or more frequently when events or circumstances indicate that impairment might have occurred. ASC 350 also states that if an entity determines, based on an assessment of certain qualitative factors, that it is more likely than not that the fair value of a reporting unit is greater than its carrying amount, then a quantitative goodwill impairment test is unnecessary. Identifiable intangible assets consist of trade names, design libraries and customer relationships related to the acquisitions the Company has completed. The Company has determined that trade names have an indefinite life, as there are no economic, contractual or other factors that limit their useful lives and they are expected to generate value as long as the trade name is utilized by the dealer group, and therefore, are not subject to amortization. Design libraries and customer relationships are amortized over their estimated useful lives of ten years and are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. Intangible asset amortization expense was approximately $2.6 million for the three and six months ended March 31, 2022. No expense was recorded for the three and six months ended March 31, 2021. Sales Tax The Company collects sales tax on all of the Company’s sales to nonexempt customers and remits the entire amount to the states that imposed the sales tax on and concurrent with specific sales transactions. The Company’s accounting policy is to exclude the tax collected and remitted to the states from revenues and cost of sales. Revenue Recognition Revenue is recognized from the sale of products and commissions earned on new and pre-owned boats (including used, brokerage, consignment and wholesale) when ownership is transferred to the customer, which is generally upon acceptance or delivery. At the time of acceptance or delivery, the customer is able to direct the use of, and obtain substantially all of the benefits at such time. We are the principal with respect to revenue from new, pre-owned and consignment sales and such revenue is recorded at the gross sales price. With respect to brokerage transactions, we are acting as an agent in the transaction, therefore the fee or commission is recorded on a net basis. Revenue from parts and accessories sold directly to a customer (not on a repair order) are recognized when control of the items is transferred to the customer, which is typically upon shipment. Revenue from parts and service operations (boat maintenance and repairs) are recorded over time as services are performed. Satisfaction of this performance obligation creates an asset with no alternative use for which an enforceable right to payment for performance to date exists within our contractual agreements. Each boat maintenance and repair service is a single performance obligation that includes both the parts and labor associated with the service. Payment for boat maintenance and repairs is typically due upon the completion of the service, which is generally completed within a period of one year or less from contract inception. The Company recorded contract assets in prepaid expenses and other current assets of $4.1 and $2.3 million as of March 31, 2022 and September 30, 2021, respectively. Certain parts and service transactions require the Company to perform shipping and handling activities after the transfer of control to the customer (e.g., when control transfers prior to delivery). They are considered fulfillment activities, and accordingly, the costs are accrued when the related revenue is recognized and are included in selling, general and administrative expenses. Revenue from storage and marina operations is recognized on a straight-line basis over the term of the contract as services are completed. Revenue from arranging financing, insurance and extended warranty contracts to customers through various third-party financial institutions and insurance companies is recognized when the related boats are sold. We do not directly finance our customers’ boat, motor or trailer purchases. We are acting as an agent in the transaction, therefore the commission is recorded on a net basis. Subject to our agreements and in the event of early cancellation, prepayment or default of such loans or insurance contracts by the customer, we may be assessed a chargeback for a portion of the commission paid by the third-party financial institutions and insurance companies. We reserve for these chargebacks based on our historical experience with repayments or defaults. Chargebacks were not material to the unaudited condensed consolidated financial statements for the three and six months ended March 31, 2022 and 2021. Contract liabilities consist of deferred revenues from marina and storage operations and customer deposits and are classified in customer deposits in the Company’s unaudited condensed consolidated balance sheets. Deposits received from customers are recorded as a liability until the related sales orders have been fulfilled by us and control of the vessel or part/accessory is transferred to the customer. The activity in customer deposits for the three and six months ended March 31, 2022 is as follows: ($ in thousands) Three Months Ended March 31, 2022 Six Months Ended Beginning contract liability $ 56,986 $ 46,610 Revenue recognized from contract liabilities included in the beginning balance (30,334 ) (37,251 ) Increases due to cash received, net of amounts recognized in revenue during the period 36,862 54,155 Ending contract liability $ 63,514 $ 63,514 The following tables set forth percentages on the timing of revenue recognition for the three and six months ended March 31, 2022 and 2021. Three Months Ended March 31, 2022 Three Months Ended March 31, 2021 Goods and services transferred at a point in time 95.2 % 94.5 % Goods and services transferred over time 4.8 % 5.5 % Total Revenue 100.0 % 100.0 % Six Months Ended March 31, 2022 Six Months Ended March 31, 2021 Goods and services transferred at a point in time 94.3 % 94.2 % Goods and services transferred over time 5.7 % 5.8 % Total Revenue 100.0 % 100.0 % Income Taxes OneWater Inc. is a corporation and as a result, is subject to U.S. federal, state and local income taxes. We account for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events included in the consolidated financial statements. Under this method, we determine deferred tax assets and liabilities on the basis of the differences between the book value and tax bases of assets and liabilities by using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period in which the enactment date occurs. We recognize deferred tax assets to the extent we believe these assets are more-likely-than-not to be realized. In making such a determination, we consider all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies and recent results of operations. OneWater LLC is treated as a partnership for U.S. federal income tax purposes and therefore does not pay U.S. federal income tax on its taxable income. Instead, the OneWater LLC members are liable for U.S. federal income tax on their respective shares of the Company’s taxable income reported on the members’ U.S. federal income tax returns. When there are situations with uncertainty as to the timing of the deduction, the amount of the deduction, or the validity of the deduction, the Company adjusts the financial statements to reflect only those tax positions that are more-likely-than-not to be sustained. Positions that meet this criterion are measured using the largest benefit that is more than 50% likely to be realized. Interest and penalties related to income taxes are included in the benefit (provision) for income taxes in the consolidated statements of operations. Vendor Consideration Received Consideration received from vendors is accounted for in accordance with FASB Accounting Standards Codification 330, ‘‘Inventory’’ (‘‘ASC 330’’). Pursuant to ASC 330, manufacturer incentives based upon cumulative volume of sales and purchases are recorded as a reduction of inventory cost and related cost of sales when the amounts are probable and reasonably estimable. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities as of the date of the financial statements, and the reported amounts of revenues and expenses during the periods presented. Actual results could differ materially from these estimates. Estimates and assumptions are reviewed periodically, and the effects of any revisions are reflected in the consolidated financial statements in the period they are determined to be necessary. Significant estimates made in the accompanying unaudited condensed consolidated financial statements include, but are not limited to, those relating to inventory mark downs, certain assumptions related to intangible and long-lived assets, share based compensation, valuation of acquisition contingent consideration and accruals for expenses relating to business operations. Segment Information As of March 31, 2022 and September 30, 2021, the Company had one operating segment, marine retail. The marine retail segment consists of the sale of new and pre-owned boats, arrangement of finance and insurance products, performance of repair and maintenance services and offering marine related parts and accessories. The marine retail business has discrete financial information and is regularly reviewed by the Company’s chief operating decision maker (“CODM”) to assess performance and allocate resources. The Company has identified its Chief Executive Officer as its CODM. The Company has determined its marine retail operating segment is its reporting unit and is also the reportable segment. |
New Accounting Pronouncements
New Accounting Pronouncements | 6 Months Ended |
Mar. 31, 2022 | |
New Accounting Pronouncements [Abstract] | |
New Accounting Pronouncements | 3. New Accounting Pronouncements In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Topic 740) – Simplifying the Accounting for Income Taxes”. The pronouncement is effective for a public company’s annual reporting periods beginning after December 15, 2020, and interim periods within those annual periods. The Company adopted the new guidance in fiscal first quarter 2022. The adoption of the guidance did not have a material impact on the Company’s financial statement. In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform”, which provides temporary optional guidance to companies impacted by the transition away from the London Interbank Offered Rate (“LIBOR”). The guidance provides certain expedients and exceptions to applying GAAP in order to lessen the potential accounting burden when contracts, hedging relationships, and other transactions that reference LIBOR as a benchmark rate are modified. The guidance is effective upon issuance and expires on December 31, 2022. The Company is currently assessing the impact of the LIBOR transition and this ASU on the Company’s financial statements. In October 2021, the FASB issued ASU 2021-08, “Business Combinations (Topic 805) – Accounting for Contract Assets and Contract Liabilities from Contracts with Customers”, which is intended to improve the accounting for acquired revenue contracts with customers in a business combination by addressing diversity in practice and inconsistency related to the recognition of an acquired contract liability and payment terms and their effect on subsequent revenue recognized by the acquirer. The pronouncement is effective for a public company’s annual reporting periods beginning after December 15, 2022, and interim periods within those annual periods. The Company is currently evaluating the impact that this standard will have on the consolidated financial statements. The Company plans to adopt the pronouncement in fiscal year 2024. |
Acquisitions
Acquisitions | 6 Months Ended |
Mar. 31, 2022 | |
Acquisitions [Abstract] | |
Acquisitions | 4. Acquisitions The results of operations of acquisitions are included in the accompanying unaudited condensed consolidated financial statements from the acquisition date. The purchase price of acquisitions is allocated to identifiable tangible assets and intangible assets acquired based on their estimated fair values at the acquisition date, with the excess being allocated to goodwill. Under the acquisition method of accounting, the purchase price is allocated to the tangible and intangible assets acquired and liabilities assumed based on information currently available. For acquisitions of Quality Boats and YakGear, the valuation of tangible assets, assumed liabilities and identifiable intangible assets are preliminary as the acquisitions are subject to certain customary closing and post-closing adjustments and certain valuations are not complete. Any changes to the value of identifiable intangible assets will be reclassified from goodwill upon the completion of the valuations. For the six months ended March the Company completed the following transactions: • On October 1, 2021, Naples Boat Mart with one location in Florida • On November 30, 2021, T-H Marine, a leading provider of branded marine parts and accessories, with locations in Alabama, Florida, Illinois, Indiana, Oklahoma and Texas • On December 1, 2021, Norfolk Marine Company with one location in Virginia • On December 31, 2021, a majority interest in Quality Boats with three locations in Florida. The sellers retained a 20% economic interest in Quality Boats. The Company has the exclusive right, but not obligation, to acquire the remaining 20% interest at any time before January 1, 2027. • On February 1, 2022, JIF Marine, a leading supplier of stainless steel ladders, dock products and other accessories which is based in Tennessee • On March 1, 2022, YakGear, a leading supplier of kayak equipment, paddle sports accessories and boat mounting accessories which is based in Texas Consideration paid for the acquisitions was $312.2 million with $288.9 million paid at closing (net of cash acquired), $1.1 million financed through a note payable to the sellers bearing interest at a rate of 4.0% per year, estimated payments of $15.3 million in contingent consideration and the remaining $6.8 million with the issuance of shares of Class A common stock. The notes are payable in one lump sum on December 1, 2024, with interest payments due quarterly. The estimated payments of contingent consideration are part of multiple earnouts varying from the achievement of certain post-acquisition increases in adjusted EBITDA to the generation of acquisition leads for the Company. The acquisition contingent consideration was developed using weighted average projections based on the Company’s historical experience, current forecasts for the industry and current expectations of the ability to generate viable acquisition leads. The minimum payout on acquisition contingent consideration is $5.9 million and the maximum payout is $24.7 million. The table below summarizes the fair values (Quality Boats and YakGear are preliminary) of the assets acquired and liabilities assumed at the acquisition date, including the goodwill recorded as a result of the transactions: Summary of Assets Acquired and Liabilities Assumed ($ in thousands) T-H Marine Quality Boats Other Acquisitions Total Acquisitions Accounts receivable $ 8,955 $ - $ 1,122 $ 10,077 Inventories 19,856 5,937 9,618 35,411 Prepaid expenses 1,547 54 370 1,971 Property and equipment 3,896 803 1,227 5,926 Operating lease right-of-use assets 5,960 428 218 6,606 Identifiable intangible assets 105,500 31,700 11,276 148,476 Goodwill 51,694 78,682 14,594 144,970 Accounts payable (3,876 ) - (471 ) (4,347 ) Accrued expenses (1,697 ) - (553 ) (2,250 ) Customer deposits (394 ) (5,047 ) (3,307 ) (8,748 ) Operating lease liabilities (5,960 ) (428 ) (218 ) (6,606 ) Aggregate acquisition date fair value $ 185,481 $ 112,129 $ 33,876 $ 331,486 Consideration transferred $ 185,481 $ 92,818 $ 33,876 $ 312,175 Fair value of non-controlling interests - 19,311 - 19,311 Aggregate acquisition date fair value $ 185,481 $ 112,129 $ 33,876 $ 331,486 Included in our results for the three and six months ended March 31, 2022, the acquisitions contributed $72.4 million and $86.6 million to our consolidated revenue and $12.2 million and $13.3 to our income before income tax expense, respectively. Costs related to acquisitions are included in transaction costs and primarily relate to legal, accounting, valuation and other fees, which are charged directly to operations in the accompanying consolidated statements of operations as incurred in the amount of $0.7 million and $3.7 million for the three and six months ended March 31, 2022, respectively. Comparatively, we recorded $0.4 million and $0.6 million in acquisition related transaction costs for the three and six months ended March 31, 2021, respectively. The following unaudited pro forma summary presents consolidated information as if all acquisitions in the three and six month periods ended March 31, 2022 and 2021 had occurred on October 1, 2020: Three Months Ended March 31, 2022 Three Months Ended March 31, 2021 ($ in thousands) (Unaudited) Pro forma revenue $ 443,901 $ 413,583 Pro forma net income $ 42,583 $ 40,468 Six Months Ended March 31, 2022 Six Months Ended March 31, 2021 ($ in thousands) (Unaudited) Pro forma revenue $ 821,412 $ 734,457 Pro forma net income $ 66,257 $ 58,019 The amounts have been calculated by applying our accounting policies and estimates. Certain acquired entities completed acquisitions during the periods presented, prior to our acquisition of the business. Their acquisitions are included in the results of their operations from the acquisition date forward but were not included on a pro forma basis. Pro forma net income has been tax affected based on the Company’s effective tax rate in the historical periods presented. We expect substantially all of the goodwill related to completed acquisitions to be deductible for federal income tax purposes. |
Inventories
Inventories | 6 Months Ended |
Mar. 31, 2022 | |
Inventories [Abstract] | |
Inventories | 5. Inventories Inventories consisted of the following at: ($ in thousands) March 31, 2022 September 31, 2021 New vessels $ 213,420 $ 105,625 Pre-owned vessels 32,532 22,906 Work in process, parts and accessories 47,218 15,349 $ 293,170 $ 143,880 |
Goodwill and Other Identifiable
Goodwill and Other Identifiable Intangible Assets | 6 Months Ended |
Mar. 31, 2022 | |
Goodwill and Other Identifiable Intangible Assets [Abstract] | |
Goodwill and Other Identifiable Intangible Assets | 6. Goodwill and Other Identifiable Intangible Assets Our acquisitions have resulted in the recording of goodwill and other identifiable intangible assets. Goodwill is an asset representing operational synergies and future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized. Identifiable intangible assets consist of trade names, design libraries and customer relationships related to the acquisitions the Company has completed. The changes in goodwill and identifiable intangible assets are as follows: ($ in thousands) Goodwill Trade Names Design Libraries Customer Relationships Total Identifiable Intangible Assets, net Unamortized Unamortized Amortized Amortized Net balance as of September 30, 2021 $ 168,491 $ 85,294 $ - $ - $ 85,294 Acquisitions during the six months ended March 31, 2022 144,969 66,571 14,050 67,855 148,476 Accumulated amortization for the six months ended March 31, 2022 - - (454 ) (2,192 ) (2,646 ) Net balance as of March 31, 2022 $ 313,460 $ 151,865 $ 13,596 $ 65,663 $ 231,124 Amortization expense was $2.6 million for the three and six months ended March 31, 2022 and is recorded in depreciation and amortization expense in the unaudited condensed consolidated statements of operations. The following table summarizes the expected amortization expense for fiscal years 2022 through 2026 and thereafter (Dollars in thousands): 2022 (excluding the six months ended March 31, 2022) $ 4,095 2023 8,190 2024 8,190 2025 8,190 2026 8,190 Thereafter 42,404 $ 79,259 |
Notes Payable - Floor Plan
Notes Payable - Floor Plan | 6 Months Ended |
Mar. 31, 2022 | |
Notes Payable - Floor Plan [Abstract] | |
Notes Payable - Floor Plan | 7. Notes Payable — Floor Plan The Company maintains an ongoing wholesale marine products inventory financing program with a syndicate of banks. The program is administered by Wells Fargo Commercial Distribution Finance, LLC (“Wells Fargo”). On December 29, 2021, the Company and certain of its subsidiaries entered into the Seventh Amended and Restated Inventory Financing Agreement (as amended, the “Inventory Financing Facility”) with Wells Fargo and the other financial institutions party thereto to increase the maximum borrowing amount available to $500.0 million. The Inventory Financing Facility expires on December 1, 2023. The outstanding balance of the facility was $254.9 million and $114.2 million, as of March 31, 2022 and September 31, 2021, respectively. Effective October 1, 2021, interest on new boats and for rental units is calculated using the Adjusted 30-Day The Inventory Financing Facility has certain financial and non-financial covenants as specified in the agreement. The financial covenants include requirements to comply with a maximum Funded Debt to EBITDA Ratio (as defined in the Inventory Financing Facility) as well as a minimum Fixed Charge Coverage Ratio (as defined in the Inventory Financing Facility). In addition, certain non-financial covenants could restrict the Company’s ability to sell assets (excluding inventory in the normal course of business), engage in certain mergers and acquisitions, incur additional debt and pay cash dividends or distributions, among others. The Company was in compliance with all covenants at March 31, 2022. The collateral for the Inventory Financing Facility consists primarily of our inventory that is financed through the Inventory Financing Facility and related assets, including accounts receivable, bank accounts and proceeds of the foregoing, and excludes the collateral that underlies the term note payable to Truist Bank. |
Long-term Debt and Line of Cred
Long-term Debt and Line of Credit | 6 Months Ended |
Mar. 31, 2022 | |
Long-term Debt and Line of Credit [Abstract] | |
Long-term Debt and Line of Credit | 8. Long-term Debt and Line of Credit On November 30, 2021, the Company and certain of its subsidiaries entered into an Incremental Amendment No. 2 (the “Second Amendment”) to the Credit Facility (as defined below) with Truist Bank. The Second Amendment amends the Credit Facility to, among other things, provide for an incremental term loan (the “Incremental Term Loan) in an aggregate principal amount equal to $200.0 million, which will be added to, and constitute part of, the existing $110.0 million term loan and will be on the same terms applicable to the existing term loan under the Credit Facility. Additionally, the Second Amendment further provides a $20.0 million increase in the revolving commitment, which will be added to, and constitute part of, the existing $30.0 revolving commitment. The Credit Facility is collateralized by certain real and personal property (including certain capital stock) of the Company and its subsidiaries. The collateral does not include inventory or certain other assets of the Company’s subsidiaries financed under the Inventory Financing Facility. The Credit Facility is subject to certain financial covenants related to the maintenance of a minimum fixed charge coverage ratio and a maximum consolidated leverage ratio. The Credit Facility also contains non-financial covenants and restrictive provisions that, among other things, limit the ability of the Company to incur additional debt, transfer or dispose of all of its assets, make certain investments, loans or payments and engage in certain transactions with affiliates. The Company was in compliance with all covenants as of March 31, 2022. Long-term debt consisted of the following at: ($ in thousands) March 31, 2022 September 30, 2021 Term note payable to Truist Bank, secured and bearing interest at 3.0 March 31, 2022 2.75 September 30, 2021 July 22, 2025 $ 297,930 $ 105,875 Revolving note payable for an amount up to $ 50.0 3.0 March 31, 2022 July 22, 2025 40,000 - Note payable to commercial vehicle lenders secured by the value of the vehicles bearing interest at rates ranging from 0.0 8.9 monthly 100 5,600 July 2028 3,234 3,248 Note payable to Tom George Yacht Sales, Inc., unsecured and bearing interest at 5.5 December 1, 2023 2,056 2,056 Note payable to Norfolk Marine Company, unsecured and bearing interest at 4.0 December 1, 2024 1,126 - Note payable to Central Marine Services, Inc., unsecured and bearing interest at 5.5 - 2,164 Note payable to Ocean Blue Yacht Sales, unsecured and bearing interest at 5.0 - 1,920 Note payable to Slalom Shop, LLC, unsecured and bearing interest at 5.0 - 1,271 Total debt outstanding 344,346 116,534 Less current portion (net of debt issuance costs) (17,294 ) (11,366 ) Less unamortized portion of debt issuance costs (5,604 ) (2,094 ) Long-term debt, net of current portion of unamortized debt issuance costs $ 321,448 $ 103,074 |
Stockholders' and Members' Equi
Stockholders' and Members' Equity | 6 Months Ended |
Mar. 31, 2022 | |
Stockholders' and Members' Equity [Abstract] | |
Stockholders' and Members' Equity | 9. Stockholders’ and Members’ Equity Equity-Based Compensation We maintain the OneWater Marine Inc. Omnibus Incentive Plan (the “LTIP”) to incentivize individuals providing services to OneWater Inc. and its subsidiaries and affiliates. The LTIP provides for the grant, from time to time, at the discretion of the board of directors of OneWater Marine Inc. (the “Board”) or a committee thereof, of (1) stock options, (2) stock appreciation rights, (3) restricted stock, (4) restricted stock units, (5) stock awards, (6) dividend equivalents, (7) other stock-based awards, (8) cash awards, (9) substitute awards and (10) performance awards. The total number of shares reserved for issuance under the LTIP that may be issued pursuant to incentive stock options (which generally are stock options that meet the requirements of Section 422 of the Code) is 1,530,923. The LTIP is and will continue to be administered by the Board, except to the extent the Board elects a committee of directors to administer the LTIP. Class A common stock subject to an award that expires or is cancelled, forfeited, exchanged, settled in cash or otherwise terminated without delivery of shares (including forfeiture of restricted stock awards) and shares withheld to pay the exercise price of, or to satisfy the withholding obligations with respect to, an award will again be available for delivery pursuant to other awards under the LTIP. During the six months ended March 31, 2022, the Board approved the grant of 52,227 performance-based restricted stock units, which represents 100% of the target award. Performance-based restricted stock units provide an opportunity for the recipient to receive a number of shares of our common stock based on our performance during fiscal year 2022 as measured against objective performance goals as determined by the Board. The actual number of units earned may range from 0% to 200% of the target number of units depending upon achievement of the performance goals. Performance-based restricted stock units vest in three equal annual installments, commencing on September 30, 2022. Upon vesting, each performance-based restricted stock unit equals one share of common stock of the Company. As of March 31, 2022, the Company estimated achievement of the performance targets at 200%. During the six months ended March 31, 2022, the Board approved the grant of 108,346 time-based restricted stock units. 13,062 restricted stock units fully vest on September 30, 2022 and the remaining 95,284 restricted stock units vest in three equal annual installments commencing on September 30, 2022. The following table further summarizes activity related to restricted stock units for the six months ended March 31, 2022: Restricted Stock Unit Awards Number of Units Weighted Average Grant Date Fair Value ($) Unvested at September 30, 2021 545,094 $ 22.68 Awarded 160,573 40.44 Vested (100,872 ) 16.99 Forfeited - - Unvested at March 31, 2022 604,795 $ 28.34 As of March 31, 2022, the total unrecognized compensation expense related to outstanding equity awards was $10.8 million , which the Company expects to recognize over a weighted-average period of 1.4 years. We issue shares of our Class A common stock upon the vesting of performance-based restricted stock units and time-based restricted stock units. These shares are issued from our authorized and not outstanding common stock. In addition, in connection with the vesting of restricted stock units, we repurchase a portion of shares issued equal to the amount of employee income tax withholding. Earnings Per Share Basic and diluted earnings per share of Class A common stock is computed by dividing net income attributable to OneWater Inc. by the weighted-average number of Class A common stock outstanding during the period. Diluted earnings per share is computed by giving effect to all potentially dilutive shares. e. The following table sets forth the calculation of earnings per share for the three months ended March 31, 2022 and 2021 (in thousands, except per share data): Earnings per share: Three Months Ended March 31, 2022 Three Months Ended March 31, 2021 Numerator: Net income attributable to OneWater Inc. $ 36,297 $ 20,475 Denominator: Weighted-average number of unrestricted outstanding common shares used to calculate basic net income per share 13,864 10,901 Effect of dilutive securities: Restricted stock units 408 270 Diluted weighted-average shares of Class A common stock outstanding used to calculate diluted earnings per share 14,272 11,171 Earnings per share of Class A common stock – basic $ 2.62 $ 1.88 Earnings per share of Class A common stock – diluted $ 2.54 $ 1.83 The following table sets forth the calculation of earnings per share for the six months ended March 31, 2022 and 2021 (in thousands, except per share data): Earnings per share: Six Months Ended March 31, 2022 Six Months Ended March 31, 2021 Numerator: Net income attributable to OneWater Inc. $ 56,316 $ 28,263 Denominator: Weighted-average number of unrestricted outstanding common shares used to calculate basic net income per share 13,619 10,838 Effect of dilutive securities: Restricted stock units 398 245 Diluted weighted-average shares of Class A common stock outstanding used to calculate diluted earnings per share 14,017 11,083 Earnings per share of Class A common stock – basic $ 4.14 $ 2.61 Earnings per share of Class A common stock – diluted $ 4.02 $ 2.55 Shares of Class B common stock and unvested restricted stock units do not share in the income (losses) of the Company and are therefore not participating securities. As such, separate presentation of basic and diluted earnings per share under the two-class method has not been presented. The following number of weighted-average potentially dilutive shares were excluded from the calculation of diluted earnings per share because the effect of including such potentially dilutive shares would have been antidilutive upon conversion (in thousands): Three Months Ended March 31, 2022 Three Months Ended March 31, 2021 Class B common stock 1,430 4,108 Restricted Stock Units 199 143 1,629 4,251 Six Months Ended March 31, 2022 Six Months Ended March 31, 2021 Class B common stock 1,625 4,154 Restricted Stock Units 217 173 1,842 4,327 Employee Stock Purchase Plan At the Company’s 2021 Annual Meeting of Stockholders (the “Annual Meeting”), held on February 23, 2021, the Company’s stockholders approved the OneWater Marine Inc. 2021 Employee Stock Purchase Plan (the “ESPP”), which was approved and adopted by the Board as of January 13, 2021 (the “Adoption Date”), subject to stockholder approval at the Annual Meeting. The effective date of the ESPP is February 23, 2021, and, unless earlier terminated, the ESPP will expire on the twentieth anniversary of the Adoption Date. The ESPP will be administered by the Board or by one or more committees to which the Board delegates such administration. The ESPP enables eligible employees to purchase shares of the Company’s Class A common stock at a discount through participation in discrete offering periods. The ESPP is intended to qualify as an employee stock purchase plan under section 423 of the Internal Revenue Code of 1986, as amended. Up to a maximum of 299,505 shares of the Company’s Class A common stock may be issued under the ESPP, subject to certain adjustments as set forth in the ESPP. On the first day of each fiscal year during the term of the ESPP, beginning on October 1, and ending on (and including) September 30, the number of shares of Class A common stock that may be issued under the ESPP will increase by a number of shares equal to the least of (i) 1% of the outstanding shares on the Adoption Date, or (ii) such lesser number of shares (including zero) that the administrator determines for purposes of the annual increase for that fiscal year. The number of shares of Class A common stock that may be granted to any single participant in any single option period will be subject to certain limitations set forth in the plan. As of March 31, 2022, there has not yet been an offering period under the ESPP. Distributions During the six months ended March 31, 2022 and 2021, the Company made distributions to OneWater Unit Holders for certain permitted tax payments. |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Mar. 31, 2022 | |
Fair Value Measurements [Abstract] | |
Fair Value Measurements | 10. Fair Value Measurements In determining fair value, the Company uses various valuation approaches including market, income and/or cost approaches. FASB standard ‘‘Fair Value Measurements’’ (Topic 820) establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from independent sources. Unobservable inputs are those that reflect the Company’s expectation of the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The hierarchy is broken down into three levels based on the reliability of inputs as follows: Level 1 – Valuations based on quoted prices in active markets for identical assets or liabilities that the Company has the ability to access. Assets utilizing Level 1 inputs include marketable securities that are actively traded. Level 2 – Valuations based on quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly. Level 3 – Valuations based on inputs that are unobservable and significant to the overall fair value measurement. Asset and liability measurements utilizing Level 3 inputs include those used in estimating fair value of non-financial assets and non-financial liabilities in purchase acquisitions, those used in assessing impairment of property, plant and equipment and other intangibles, those used in the reporting unit valuation in the annual goodwill impairment evaluation and those used in the valuation of contingent consideration. The availability of observable inputs can vary and is affected by a wide variety of factors. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment required in determining fair value is greatest for assets and liabilities categorized in Level 3. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement is disclosed is determined based on the lowest level input that is significant to the fair value measurement. Fair value measurements can be volatile based on various factors that may or may not be within the Company’s control. The following tables summarize the Company’s financial liabilities measured at fair value in the accompanying unaudited condensed consolidated balance sheets as of March 31, 2022 and September 30, 2021: March 31, 2022 Level 1 Level 2 Level 3 Total ($ in thousands) Liabilities: Contingent Consideration $ - $ - $ 35,243 $ 35,243 September 30, 2021 Level 1 Level 2 Level 3 Total ($ in thousands) Liabilities: Contingent Consideration $ - $ - $ 12,072 $ 12,072 There were no transfers between the valuation hierarchy Levels 1, 2, and 3 for the three or six months ended March 31, 2022. We estimate the fair value of contingent consideration using a probability-weighted discounted cash flow model based on forecasted future earnings or forecasted probabilities of producing acquisition leads. The acquisition contingent consideration liability has been accounted for based on inputs that are unobservable and significant to the overall fair value measurement (Level 3). The contingent consideration balance is recorded in other payables and accrued expenses and other long-term liabilities in the unaudited condensed consolidated balance sheets. Changes in fair value and net present value of contingent consideration are included in change in fair value of contingent consideration in the unaudited condensed consolidated statements of operations. The fair value of contingent consideration is reassessed on a quarterly basis. The following table sets forth the changes in fair value of our contingent consideration for the three and six months ended March 31, 2022: ($ in thousands) Three Months Ended March 31, 2021 Balance as of December 31, 2021 $ 33,139 Additions from acquisitions - Settlement of contingent consideration (53 ) Change in fair value, including accretion 2,157 Balance as of March 31, 2022 $ 35,243 ($ in thousands) Six Months Ended March 31, 2021 Balance as of September 30, 2021 $ 12,072 Additions from acquisitions 15,321 Settlement of contingent consideration (53 ) Change in fair value, including accretion 7,903 Balance as of March 31, 2022 $ 35,243 |
Income Taxes
Income Taxes | 6 Months Ended |
Mar. 31, 2022 | |
Income Taxes [Abstract] | |
Income Taxes | 11. Income Taxes Our effective tax rates of 23.2% and 21.2% for the three and six months ending March 31, 2022, respectively, differ from statutory rates primarily due to earnings allocated to non-controlling interests . Th e Company recognizes deferred tax assets to the extent it believes these assets are more-likely-than-not to be realized. In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing temporary differences, projected future taxable income, tax planning strategies and recent results of operations. Based on our cumulative earnings history and forecasted future sources of taxable income, we believe that we will fully realize our deferred tax asset in the future. The Company has not recorded a valuation allowance. As of March 31, 2022 and September 30, 2021, the Company has not recognized any uncertain tax positions, penalties, or interest as management has concluded that no such positions exist. The Company is subject to examination in the US Federal and certain state tax jurisdictions for the tax years beginning with the year ended September 30, 2020. The Company is not currently under an income tax audit in any U.S. or state jurisdiction for any tax year. Tax Receivable Agreement In connection with the IPO, the Company entered into a tax receivable agreement (the “Tax Receivable Agreement”) with certain of the owners of OneWater LLC. As of March 31, 2022 and September 30, 2021, our liability under the Tax Receivable Agreement was $46.2 million and $40.1 million, respectively, representing 85% of the calculated net cash savings in U.S. federal, state and local income tax and franchise tax that OneWater Inc. anticipates realizing in future years from the result of certain increases in tax basis and certain tax benefits attributable to imputed interest as a result of OneWater Inc.’s acquisition of OneWater LLC Units pursuant to an exercise of the Redemption Right or the Call Right (each as defined in the amended and restated limited liability company agreement of OneWater LLC (the “OneWater LLC Agreement”)) The projection of future taxable income involves significant judgment. Actual taxable income may differ from our estimates, which could significantly impact our ability to make payments under the Tax Receivable Agreement. We have determined it is more-likely-than-not that we will be able to utilize all of our deferred tax assets subject to the Tax Receivable Agreement; therefore, we have recorded a liability under the Tax Receivable Agreement related to the tax savings we may realize from certain increases in tax basis and certain tax benefits attributable to imputed interest as a result of OneWater Inc.’s acquisition of OneWater LLC Units pursuant to an exercise of the Redemption Right or Call Right (each as defined in the OneWater LLC Agreement). If we determine the utilization of these deferred tax assets is not more-likely-than-not in the future, our estimate of amounts to be paid under the Tax Receivable Agreement would be reduced. In this scenario, the reduction of the liability under the Tax Receivable Agreement would result in a benefit to our consolidated statements of operations. |
Contingencies and Commitments
Contingencies and Commitments | 6 Months Ended |
Mar. 31, 2022 | |
Contingencies and Commitments [Abstract] | |
Contingencies and Commitments | 12. Contingencies and Commitments Employment Agreements The Company is party to employment agreements with certain executives, which provide for compensation, other benefits and severance payments under certain circumstances. The Company also has consulting and noncompete agreements in place with previous owners of acquired companies. Claims and Litigation The Company is involved in various legal proceedings as either the defendant or plaintiff. Due to their nature, such legal proceedings involve inherent uncertainties including, but not limited to, court rulings, negotiations between the affected parties and other actions. Management assesses the probability of losses or gains for such contingencies and accrues a liability and/or discloses the relevant circumstances as appropriate. In the opinion of management, it is not reasonably probable that the pending litigation, disputes or claims against the Company, if decided adversely, will have a material adverse effect on its financial condition, results of operations or cash flows. Additionally, based on the Company’s review of the various types of claims currently known, there is no indication of a material reasonably possible loss in excess of amounts accrued. The Company currently does not anticipate that any known claim will materially adversely affect our financial condition, liquidity, or results of operations. However, the outcome of any matter cannot be predicted with certainty, and an unfavorable resolution of one or more matters presently known or arising in the future could have a material adverse effect on the Company’s financial condition, liquidity or results of operations. Risk Management The Company is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions and natural disasters for which the Company carries commercial insurance. There have been no significant reductions in coverage from the prior year and settlements have not exceeded coverage in the past years. |
Leases
Leases | 6 Months Ended |
Mar. 31, 2022 | |
Leases [Abstract] | |
Leases | 13. Leases The Company leases real estate and equipment under operating lease agreements. Leases with an initial term of 12 months or less are not recorded on the balance sheet. We recognize lease expense for these leases on a straight-line basis over the lease term. For leases with terms in excess of 12 months, we record a right-of-use (“ROU”) asset and lease liability based on the present value of lease payments over the lease term. We do not have any significant leases that have not yet commenced that create significant rights and obligations for us. The Company has elected the practical expedient not to separate lease and non-lease components for all leases that qualify. Our real estate and equipment leases often require payment of maintenance, real estate taxes and insurance. These costs are generally variable and based on actual costs incurred by the lessor. These amounts are not included in the consideration of the contract when determining the ROU asset and lease liability but are reflected as variable lease payments. Most leases include one or more options to renew, with renewal terms that can extend the lease from one ten Certain of our lease agreements include rental payments based on percentage of retail sales over contractual levels and others include rental payments adjusted periodically based on index rates. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Mar. 31, 2022 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 14. Related Party Transactions In accordance with agreements approved by the Board, the Company received fees from certain entities and individuals affiliated with common members of the Company for goods and services. Total fees recorded under these arrangements were $4.8 million and $1.3 million for the three months ended March 31, 2022 and 2021, respectively, and $4.9 million and $1.4 million for the six months ended March 31, 2022 and 2021, respectively. In connection with transactions noted above, the Company owed $0.4 million and $1.0 million as recorded within accounts payable as of March 31, 2022 and September 30, 2021, respectively. Additionally, the Company was due $0.8 million and $32,368 as recorded within accounts receivable as of March 31, 2022 and September 30, 2021, respectively. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Mar. 31, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events | 15. Subsequent Events On April 1, 2022, the Company completed the acquisition of Denison Yachting pursuant to the terms of the purchase agreement. The aggregate consideration for the purchase included approximately $35.6 million in cash consideration and 253,840 shares of Class A common stock of the Company, with a value of approximately $9.7 million. The aggregate consideration is subject to customary post-closing adjustments. |
Description of Company and Ba_2
Description of Company and Basis of Presentation (Policies) | 6 Months Ended |
Mar. 31, 2022 | |
Description of Company and Basis of Presentation [Abstract] | |
Description of the Business | Description of the Business OneWater Marine Inc. (“OneWater Inc.”) was incorporated in Delaware on April 3, 2019 and was a wholly-owned subsidiary of One Water Marine Holdings, LLC (“OneWater LLC”). Pursuant to a reorganization on February 11, 2020 into a holding company structure for the purpose of facilitating an initial public offering (the “IPO”) and related transactions in order to carry on the business of OneWater LLC and its subsidiaries (together with OneWater Marine Inc., the “Company”), OneWater Inc. is the holding company and its sole material asset is the equity interest in OneWater LLC. OneWater LLC was organized as a limited liability company under the law of the State of Delaware in 2014 and is the parent company of One Water Assets & Operations (“OWAO”), and its wholly-owned and majority-owned subsidiaries. The Company is one of the largest recreational boat retailers in the United States. The Company engages primarily in the retail sale, brokerage, and service of new and pre-owned boats, motors, trailers, the sale of marine parts and accessories, and offers slip and storage accommodations in certain locations. The Company also arranges related boat financing, insurance, and extended service contracts for customers with third-party lenders and insurance companies. As of March 31, 2022, the Company operated a total of 75 retail locations, 10 distribution centers/warehouses and multiple online marketplaces in sixteen states, several of which are in the top twenty states for marine retail expenditures. Operating results are generally subject to seasonal variations. Demand for products is generally highest during the third and fourth quarters of the fiscal year and, accordingly, revenues are generally expected to be higher during these periods. General economic conditions and consumer spending patterns can negatively impact the Company’s operating results. Unfavorable local, regional, national, or global economic developments, global public health concerns, including the COVID-19 pandemic, or uncertainties could reduce consumer spending and adversely affect the Company’s business. Consumer spending on discretionary goods may also decline as a result of lower consumer confidence levels, even if prevailing economic conditions are otherwise favorable. Economic conditions in areas in which the Company operates stores, particularly in the Southeast, can have a major impact on the Company’s overall results of operations. Local influences such as corporate downsizing, inclement weather such as hurricanes and other storms, environmental conditions, and other events could adversely affect the Company’s operations in certain markets and in certain periods. Any extended period of adverse economic conditions or low consumer confidence is likely to have a negative effect on the Company’s business. Sales of new boats from the Company’s top ten brands represent approximately 43.8% and 39.8% of total sales for the six months ended March 31, 2022 and 2021, respectively, making them major suppliers of the Company. Of this amount, Malibu Boats, Inc., including its brands Malibu, Axis, Cobalt, Pursuit, Maverick, Hewes, Cobia and Pathfinder accounted for 15.1% and 15.7% of our consolidated revenue for the six months ended March 31, 2022 and 2021, respectively. As is typical in the industry, the Company contracts with most manufacturers under renewable annual dealer agreements, each of which provides the right to sell various makes and models of boats within a given geographic region. Any change or termination of these agreements, or the agreements discussed above, for any reason, or changes in competitive, regulatory, or marketing practices, including rebate or incentive programs, could adversely affect results of operations. Pre-owned boats are usually trade-ins from retail customers who are purchasing a boat from the Company. |
Principles of Consolidation | Principles of Consolidation As the sole managing member of OneWater LLC, OneWater Inc. operates and controls all of the businesses and affairs of OneWater LLC, and through OneWater LLC and its wholly-owned subsidiaries as well as majority-owned subsidiaries over which the Company exercises control, conducts its business. As a result, OneWater Inc. consolidates the financial results of OneWater LLC and its subsidiaries and reports non-controlling interests related to the portion of units of OneWater LLC (the “OneWater LLC Units”) not owned by OneWater Inc., which will reduce net income (loss) attributable to OneWater Inc.’s Class A stockholders. As of March 31, 2022, OneWater Inc. owned 90.7% of the economic interest of OneWater LLC. Commencing December 31, 2021, the Company owns 80% of the economic interest of Quality Assets and Operations, over which the Company exercises control and the minority interest in this subsidiary has been recorded accordingly. See Note 4 for additional information regarding the acquisition. |
Basis of Financial Statement Preparation | Basis of Financial Statement Preparation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial statements, which do not include all the information and notes required by such accounting principles for annual financial statements. The unaudited condensed consolidated financial statements should be read in conjunction with OneWater Inc.’s Annual Report on Form 10-K for the year ended September 30, 2021. All adjustments, consisting of only normal recurring adjustments considered necessary for fair presentation, have been reflected in these unaudited condensed consolidated financial statements. All intercompany transactions have been eliminated in consolidation. The Company operates on a fiscal year basis with the first day of the fiscal year being October 1, and the last day of the year ending on September 30. Additionally, since there are no differences between net income and comprehensive income, all references to comprehensive income have been excluded from the accompanying unaudited condensed consolidated financial statements. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Mar. 31, 2022 | |
Summary of Significant Accounting Policies [Abstract] | |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company’s financial instruments include cash and cash equivalents, accounts receivable, accounts payable, other payables and accrued expenses, floor plan notes payable, term note payable and revolving note payable with Truist Bank, seller notes payable and company vehicle notes payable. The carrying values approximate their fair values because of the nature of their terms and current market rates of these instruments. |
Inventories | Inventories Inventories are stated at the lower of cost or net realizable value. The cost of the new and pre-owned boat inventory is determined using the specific identification method. In assessing lower of cost or net realizable value, the Company considers the aging of the boats, historical sales of a brand and current market conditions. The cost of manufactured and assembled parts and accessories is determined using standard costing. The cost of acquired parts and accessories is determined using the weighted average cost method. |
Goodwill and Other Identifiable Intangible Assets | Goodwill and Other Identifiable Intangible Assets Goodwill and intangible assets are accounted for in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 350, ‘‘Intangibles - Goodwill and Other’’ (‘‘ASC 350’’), which provides that the excess of cost over the fair value of the net assets of businesses acquired, including other identifiable intangible assets, is recorded as goodwill. Goodwill is an asset representing operational synergies and future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized. In accordance with ASC 350, Goodwill is tested for impairment at least annually, or more frequently when events or circumstances indicate that impairment might have occurred. ASC 350 also states that if an entity determines, based on an assessment of certain qualitative factors, that it is more likely than not that the fair value of a reporting unit is greater than its carrying amount, then a quantitative goodwill impairment test is unnecessary. Identifiable intangible assets consist of trade names, design libraries and customer relationships related to the acquisitions the Company has completed. The Company has determined that trade names have an indefinite life, as there are no economic, contractual or other factors that limit their useful lives and they are expected to generate value as long as the trade name is utilized by the dealer group, and therefore, are not subject to amortization. Design libraries and customer relationships are amortized over their estimated useful lives of ten years and are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. Intangible asset amortization expense was approximately $2.6 million for the three and six months ended March 31, 2022. No expense was recorded for the three and six months ended March 31, 2021. |
Sales Tax | Sales Tax The Company collects sales tax on all of the Company’s sales to nonexempt customers and remits the entire amount to the states that imposed the sales tax on and concurrent with specific sales transactions. The Company’s accounting policy is to exclude the tax collected and remitted to the states from revenues and cost of sales. |
Revenue Recognition | Revenue Recognition Revenue is recognized from the sale of products and commissions earned on new and pre-owned boats (including used, brokerage, consignment and wholesale) when ownership is transferred to the customer, which is generally upon acceptance or delivery. At the time of acceptance or delivery, the customer is able to direct the use of, and obtain substantially all of the benefits at such time. We are the principal with respect to revenue from new, pre-owned and consignment sales and such revenue is recorded at the gross sales price. With respect to brokerage transactions, we are acting as an agent in the transaction, therefore the fee or commission is recorded on a net basis. Revenue from parts and accessories sold directly to a customer (not on a repair order) are recognized when control of the items is transferred to the customer, which is typically upon shipment. Revenue from parts and service operations (boat maintenance and repairs) are recorded over time as services are performed. Satisfaction of this performance obligation creates an asset with no alternative use for which an enforceable right to payment for performance to date exists within our contractual agreements. Each boat maintenance and repair service is a single performance obligation that includes both the parts and labor associated with the service. Payment for boat maintenance and repairs is typically due upon the completion of the service, which is generally completed within a period of one year or less from contract inception. The Company recorded contract assets in prepaid expenses and other current assets of $4.1 and $2.3 million as of March 31, 2022 and September 30, 2021, respectively. Certain parts and service transactions require the Company to perform shipping and handling activities after the transfer of control to the customer (e.g., when control transfers prior to delivery). They are considered fulfillment activities, and accordingly, the costs are accrued when the related revenue is recognized and are included in selling, general and administrative expenses. Revenue from storage and marina operations is recognized on a straight-line basis over the term of the contract as services are completed. Revenue from arranging financing, insurance and extended warranty contracts to customers through various third-party financial institutions and insurance companies is recognized when the related boats are sold. We do not directly finance our customers’ boat, motor or trailer purchases. We are acting as an agent in the transaction, therefore the commission is recorded on a net basis. Subject to our agreements and in the event of early cancellation, prepayment or default of such loans or insurance contracts by the customer, we may be assessed a chargeback for a portion of the commission paid by the third-party financial institutions and insurance companies. We reserve for these chargebacks based on our historical experience with repayments or defaults. Chargebacks were not material to the unaudited condensed consolidated financial statements for the three and six months ended March 31, 2022 and 2021. Contract liabilities consist of deferred revenues from marina and storage operations and customer deposits and are classified in customer deposits in the Company’s unaudited condensed consolidated balance sheets. Deposits received from customers are recorded as a liability until the related sales orders have been fulfilled by us and control of the vessel or part/accessory is transferred to the customer. The activity in customer deposits for the three and six months ended March 31, 2022 is as follows: ($ in thousands) Three Months Ended March 31, 2022 Six Months Ended Beginning contract liability $ 56,986 $ 46,610 Revenue recognized from contract liabilities included in the beginning balance (30,334 ) (37,251 ) Increases due to cash received, net of amounts recognized in revenue during the period 36,862 54,155 Ending contract liability $ 63,514 $ 63,514 The following tables set forth percentages on the timing of revenue recognition for the three and six months ended March 31, 2022 and 2021. Three Months Ended March 31, 2022 Three Months Ended March 31, 2021 Goods and services transferred at a point in time 95.2 % 94.5 % Goods and services transferred over time 4.8 % 5.5 % Total Revenue 100.0 % 100.0 % Six Months Ended March 31, 2022 Six Months Ended March 31, 2021 Goods and services transferred at a point in time 94.3 % 94.2 % Goods and services transferred over time 5.7 % 5.8 % Total Revenue 100.0 % 100.0 % |
Income Taxes | Income Taxes OneWater Inc. is a corporation and as a result, is subject to U.S. federal, state and local income taxes. We account for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events included in the consolidated financial statements. Under this method, we determine deferred tax assets and liabilities on the basis of the differences between the book value and tax bases of assets and liabilities by using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period in which the enactment date occurs. We recognize deferred tax assets to the extent we believe these assets are more-likely-than-not to be realized. In making such a determination, we consider all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies and recent results of operations. OneWater LLC is treated as a partnership for U.S. federal income tax purposes and therefore does not pay U.S. federal income tax on its taxable income. Instead, the OneWater LLC members are liable for U.S. federal income tax on their respective shares of the Company’s taxable income reported on the members’ U.S. federal income tax returns. When there are situations with uncertainty as to the timing of the deduction, the amount of the deduction, or the validity of the deduction, the Company adjusts the financial statements to reflect only those tax positions that are more-likely-than-not to be sustained. Positions that meet this criterion are measured using the largest benefit that is more than 50% likely to be realized. Interest and penalties related to income taxes are included in the benefit (provision) for income taxes in the consolidated statements of operations. |
Vendor Consideration Received | Vendor Consideration Received Consideration received from vendors is accounted for in accordance with FASB Accounting Standards Codification 330, ‘‘Inventory’’ (‘‘ASC 330’’). Pursuant to ASC 330, manufacturer incentives based upon cumulative volume of sales and purchases are recorded as a reduction of inventory cost and related cost of sales when the amounts are probable and reasonably estimable. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities as of the date of the financial statements, and the reported amounts of revenues and expenses during the periods presented. Actual results could differ materially from these estimates. Estimates and assumptions are reviewed periodically, and the effects of any revisions are reflected in the consolidated financial statements in the period they are determined to be necessary. Significant estimates made in the accompanying unaudited condensed consolidated financial statements include, but are not limited to, those relating to inventory mark downs, certain assumptions related to intangible and long-lived assets, share based compensation, valuation of acquisition contingent consideration and accruals for expenses relating to business operations. |
Segment Information | Segment Information As of March 31, 2022 and September 30, 2021, the Company had one operating segment, marine retail. The marine retail segment consists of the sale of new and pre-owned boats, arrangement of finance and insurance products, performance of repair and maintenance services and offering marine related parts and accessories. The marine retail business has discrete financial information and is regularly reviewed by the Company’s chief operating decision maker (“CODM”) to assess performance and allocate resources. The Company has identified its Chief Executive Officer as its CODM. The Company has determined its marine retail operating segment is its reporting unit and is also the reportable segment. |
New Accounting Pronouncements (
New Accounting Pronouncements (Policies) | 6 Months Ended |
Mar. 31, 2022 | |
New Accounting Pronouncements [Abstract] | |
Adoption of New Accounting Standards | In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Topic 740) – Simplifying the Accounting for Income Taxes”. The pronouncement is effective for a public company’s annual reporting periods beginning after December 15, 2020, and interim periods within those annual periods. The Company adopted the new guidance in fiscal first quarter 2022. The adoption of the guidance did not have a material impact on the Company’s financial statement. In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform”, which provides temporary optional guidance to companies impacted by the transition away from the London Interbank Offered Rate (“LIBOR”). The guidance provides certain expedients and exceptions to applying GAAP in order to lessen the potential accounting burden when contracts, hedging relationships, and other transactions that reference LIBOR as a benchmark rate are modified. The guidance is effective upon issuance and expires on December 31, 2022. The Company is currently assessing the impact of the LIBOR transition and this ASU on the Company’s financial statements. In October 2021, the FASB issued ASU 2021-08, “Business Combinations (Topic 805) – Accounting for Contract Assets and Contract Liabilities from Contracts with Customers”, which is intended to improve the accounting for acquired revenue contracts with customers in a business combination by addressing diversity in practice and inconsistency related to the recognition of an acquired contract liability and payment terms and their effect on subsequent revenue recognized by the acquirer. The pronouncement is effective for a public company’s annual reporting periods beginning after December 15, 2022, and interim periods within those annual periods. The Company is currently evaluating the impact that this standard will have on the consolidated financial statements. The Company plans to adopt the pronouncement in fiscal year 2024. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Mar. 31, 2022 | |
Summary of Significant Accounting Policies [Abstract] | |
Contract Liabilities | Contract liabilities consist of deferred revenues from marina and storage operations and customer deposits and are classified in customer deposits in the Company’s unaudited condensed consolidated balance sheets. Deposits received from customers are recorded as a liability until the related sales orders have been fulfilled by us and control of the vessel or part/accessory is transferred to the customer. The activity in customer deposits for the three and six months ended March 31, 2022 is as follows: ($ in thousands) Three Months Ended March 31, 2022 Six Months Ended Beginning contract liability $ 56,986 $ 46,610 Revenue recognized from contract liabilities included in the beginning balance (30,334 ) (37,251 ) Increases due to cash received, net of amounts recognized in revenue during the period 36,862 54,155 Ending contract liability $ 63,514 $ 63,514 |
Percentages on Timing of Revenue Recognition | The following tables set forth percentages on the timing of revenue recognition for the three and six months ended March 31, 2022 and 2021. Three Months Ended March 31, 2022 Three Months Ended March 31, 2021 Goods and services transferred at a point in time 95.2 % 94.5 % Goods and services transferred over time 4.8 % 5.5 % Total Revenue 100.0 % 100.0 % Six Months Ended March 31, 2022 Six Months Ended March 31, 2021 Goods and services transferred at a point in time 94.3 % 94.2 % Goods and services transferred over time 5.7 % 5.8 % Total Revenue 100.0 % 100.0 % |
Acquisitions (Tables)
Acquisitions (Tables) | 6 Months Ended |
Mar. 31, 2022 | |
Acquisitions [Abstract] | |
Summary of Assets Acquired and Liabilities Assumed | The table below summarizes the fair values (Quality Boats and YakGear are preliminary) of the assets acquired and liabilities assumed at the acquisition date, including the goodwill recorded as a result of the transactions: Summary of Assets Acquired and Liabilities Assumed ($ in thousands) T-H Marine Quality Boats Other Acquisitions Total Acquisitions Accounts receivable $ 8,955 $ - $ 1,122 $ 10,077 Inventories 19,856 5,937 9,618 35,411 Prepaid expenses 1,547 54 370 1,971 Property and equipment 3,896 803 1,227 5,926 Operating lease right-of-use assets 5,960 428 218 6,606 Identifiable intangible assets 105,500 31,700 11,276 148,476 Goodwill 51,694 78,682 14,594 144,970 Accounts payable (3,876 ) - (471 ) (4,347 ) Accrued expenses (1,697 ) - (553 ) (2,250 ) Customer deposits (394 ) (5,047 ) (3,307 ) (8,748 ) Operating lease liabilities (5,960 ) (428 ) (218 ) (6,606 ) Aggregate acquisition date fair value $ 185,481 $ 112,129 $ 33,876 $ 331,486 Consideration transferred $ 185,481 $ 92,818 $ 33,876 $ 312,175 Fair value of non-controlling interests - 19,311 - 19,311 Aggregate acquisition date fair value $ 185,481 $ 112,129 $ 33,876 $ 331,486 |
Unaudited Pro Forma Results of Operations | The following unaudited pro forma summary presents consolidated information as if all acquisitions in the three and six month periods ended March 31, 2022 and 2021 had occurred on October 1, 2020: Three Months Ended March 31, 2022 Three Months Ended March 31, 2021 ($ in thousands) (Unaudited) Pro forma revenue $ 443,901 $ 413,583 Pro forma net income $ 42,583 $ 40,468 Six Months Ended March 31, 2022 Six Months Ended March 31, 2021 ($ in thousands) (Unaudited) Pro forma revenue $ 821,412 $ 734,457 Pro forma net income $ 66,257 $ 58,019 |
Inventories (Tables)
Inventories (Tables) | 6 Months Ended |
Mar. 31, 2022 | |
Inventories [Abstract] | |
Inventories | Inventories consisted of the following at: ($ in thousands) March 31, 2022 September 31, 2021 New vessels $ 213,420 $ 105,625 Pre-owned vessels 32,532 22,906 Work in process, parts and accessories 47,218 15,349 $ 293,170 $ 143,880 |
Goodwill and Other Identifiab_2
Goodwill and Other Identifiable Intangible Assets (Tables) | 6 Months Ended |
Mar. 31, 2022 | |
Goodwill and Other Identifiable Intangible Assets [Abstract] | |
Changes in Goodwill and Identifiable Intangible Assets | The changes in goodwill and identifiable intangible assets are as follows: ($ in thousands) Goodwill Trade Names Design Libraries Customer Relationships Total Identifiable Intangible Assets, net Unamortized Unamortized Amortized Amortized Net balance as of September 30, 2021 $ 168,491 $ 85,294 $ - $ - $ 85,294 Acquisitions during the six months ended March 31, 2022 144,969 66,571 14,050 67,855 148,476 Accumulated amortization for the six months ended March 31, 2022 - - (454 ) (2,192 ) (2,646 ) Net balance as of March 31, 2022 $ 313,460 $ 151,865 $ 13,596 $ 65,663 $ 231,124 |
Expected Amortization Expense | The following table summarizes the expected amortization expense for fiscal years 2022 through 2026 and thereafter (Dollars in thousands): 2022 (excluding the six months ended March 31, 2022) $ 4,095 2023 8,190 2024 8,190 2025 8,190 2026 8,190 Thereafter 42,404 $ 79,259 |
Long-term Debt and Line of Cr_2
Long-term Debt and Line of Credit (Tables) | 6 Months Ended |
Mar. 31, 2022 | |
Long-term Debt and Line of Credit [Abstract] | |
Long-term Debt and Line of Credit | Long-term debt consisted of the following at: ($ in thousands) March 31, 2022 September 30, 2021 Term note payable to Truist Bank, secured and bearing interest at 3.0 March 31, 2022 2.75 September 30, 2021 July 22, 2025 $ 297,930 $ 105,875 Revolving note payable for an amount up to $ 50.0 3.0 March 31, 2022 July 22, 2025 40,000 - Note payable to commercial vehicle lenders secured by the value of the vehicles bearing interest at rates ranging from 0.0 8.9 monthly 100 5,600 July 2028 3,234 3,248 Note payable to Tom George Yacht Sales, Inc., unsecured and bearing interest at 5.5 December 1, 2023 2,056 2,056 Note payable to Norfolk Marine Company, unsecured and bearing interest at 4.0 December 1, 2024 1,126 - Note payable to Central Marine Services, Inc., unsecured and bearing interest at 5.5 - 2,164 Note payable to Ocean Blue Yacht Sales, unsecured and bearing interest at 5.0 - 1,920 Note payable to Slalom Shop, LLC, unsecured and bearing interest at 5.0 - 1,271 Total debt outstanding 344,346 116,534 Less current portion (net of debt issuance costs) (17,294 ) (11,366 ) Less unamortized portion of debt issuance costs (5,604 ) (2,094 ) Long-term debt, net of current portion of unamortized debt issuance costs $ 321,448 $ 103,074 |
Stockholders' and Members' Eq_2
Stockholders' and Members' Equity (Tables) | 6 Months Ended |
Mar. 31, 2022 | |
Stockholders' and Members' Equity [Abstract] | |
Summary of Restricted Stock Units Activity | The following table further summarizes activity related to restricted stock units for the six months ended March 31, 2022: Restricted Stock Unit Awards Number of Units Weighted Average Grant Date Fair Value ($) Unvested at September 30, 2021 545,094 $ 22.68 Awarded 160,573 40.44 Vested (100,872 ) 16.99 Forfeited - - Unvested at March 31, 2022 604,795 $ 28.34 |
Calculation of Earnings per share | The following table sets forth the calculation of earnings per share for the three months ended March 31, 2022 and 2021 (in thousands, except per share data): Earnings per share: Three Months Ended March 31, 2022 Three Months Ended March 31, 2021 Numerator: Net income attributable to OneWater Inc. $ 36,297 $ 20,475 Denominator: Weighted-average number of unrestricted outstanding common shares used to calculate basic net income per share 13,864 10,901 Effect of dilutive securities: Restricted stock units 408 270 Diluted weighted-average shares of Class A common stock outstanding used to calculate diluted earnings per share 14,272 11,171 Earnings per share of Class A common stock – basic $ 2.62 $ 1.88 Earnings per share of Class A common stock – diluted $ 2.54 $ 1.83 The following table sets forth the calculation of earnings per share for the six months ended March 31, 2022 and 2021 (in thousands, except per share data): Earnings per share: Six Months Ended March 31, 2022 Six Months Ended March 31, 2021 Numerator: Net income attributable to OneWater Inc. $ 56,316 $ 28,263 Denominator: Weighted-average number of unrestricted outstanding common shares used to calculate basic net income per share 13,619 10,838 Effect of dilutive securities: Restricted stock units 398 245 Diluted weighted-average shares of Class A common stock outstanding used to calculate diluted earnings per share 14,017 11,083 Earnings per share of Class A common stock – basic $ 4.14 $ 2.61 Earnings per share of Class A common stock – diluted $ 4.02 $ 2.55 |
Antidilutive Securities Excluded From Calculation | The following number of weighted-average potentially dilutive shares were excluded from the calculation of diluted earnings per share because the effect of including such potentially dilutive shares would have been antidilutive upon conversion (in thousands): Three Months Ended March 31, 2022 Three Months Ended March 31, 2021 Class B common stock 1,430 4,108 Restricted Stock Units 199 143 1,629 4,251 Six Months Ended March 31, 2022 Six Months Ended March 31, 2021 Class B common stock 1,625 4,154 Restricted Stock Units 217 173 1,842 4,327 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Mar. 31, 2022 | |
Fair Value Measurements [Abstract] | |
Financial Liabilities Measured at Fair Value | The following tables summarize the Company’s financial liabilities measured at fair value in the accompanying unaudited condensed consolidated balance sheets as of March 31, 2022 and September 30, 2021: March 31, 2022 Level 1 Level 2 Level 3 Total ($ in thousands) Liabilities: Contingent Consideration $ - $ - $ 35,243 $ 35,243 September 30, 2021 Level 1 Level 2 Level 3 Total ($ in thousands) Liabilities: Contingent Consideration $ - $ - $ 12,072 $ 12,072 |
Changes in Fair Value of Contingent Consideration | The following table sets forth the changes in fair value of our contingent consideration for the three and six months ended March 31, 2022: ($ in thousands) Three Months Ended March 31, 2021 Balance as of December 31, 2021 $ 33,139 Additions from acquisitions - Settlement of contingent consideration (53 ) Change in fair value, including accretion 2,157 Balance as of March 31, 2022 $ 35,243 ($ in thousands) Six Months Ended March 31, 2021 Balance as of September 30, 2021 $ 12,072 Additions from acquisitions 15,321 Settlement of contingent consideration (53 ) Change in fair value, including accretion 7,903 Balance as of March 31, 2022 $ 35,243 |
Description of Company and Ba_3
Description of Company and Basis of Presentation, Description of the Business (Details) | 6 Months Ended | |
Mar. 31, 2022StateCenterBrandLocation | Mar. 31, 2021 | |
Description of the Business [Abstract] | ||
Number of retail locations operating | Location | 75 | |
Number of distribution centers | Center | 10 | |
Number of states in which business operating | State | 16 | |
Number of top brands | Brand | 10 | |
Sales Revenue [Member] | Product Concentration Risk [Member] | Top Ten Brands [Member] | ||
Description of the Business [Abstract] | ||
Concentration risk percentage | 43.80% | 39.80% |
Sales Revenue [Member] | Product Concentration Risk [Member] | Malibu Boats, Inc [Member] | ||
Description of the Business [Abstract] | ||
Concentration risk percentage | 15.10% | 15.70% |
Description of Company and Ba_4
Description of Company and Basis of Presentation, Principles of Consolidation (Details) | Mar. 31, 2022 | Dec. 31, 2021 |
Principles of Consolidation [Abstract] | ||
Economic interest of quality assets and operations | 80.00% | |
OneWater LLC [Member] | ||
Principles of Consolidation [Abstract] | ||
Ownership interest in subsidiaries | 90.70% |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies, Goodwill and Other Identifiable Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Mar. 31, 2022 | Mar. 31, 2021 | |
Goodwill and Other Identifiable Intangible Assets [Abstract] | ||||
Estimated useful lives of assets | 10 years | |||
Amortization expense for intangible assets | $ 2,600 | $ 0 | $ 2,646 | $ 0 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies, Revenue Recognition (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Mar. 31, 2022 | Mar. 31, 2021 | Mar. 31, 2022 | Mar. 31, 2021 | Sep. 30, 2021 | |
Contract Asset [Abstract] | |||||
Contract asset | $ 4,100 | $ 4,100 | $ 2,300 | ||
Contract Liability [Abstract] | |||||
Beginning contract liability | 56,986 | 46,610 | |||
Revenue recognized from contract liabilities included in the beginning balance | (30,334) | (37,251) | |||
Increases due to cash received, net of amounts recognized in revenue during the period | 36,862 | 54,155 | |||
Ending contract liability | $ 63,514 | $ 63,514 | |||
Timing of Revenue [Abstract] | |||||
Percentage on Timing of Revenue Recognition | 100.00% | 100.00% | 100.00% | 100.00% | |
Goods and Services Transferred at a Point in Time [Member] | |||||
Timing of Revenue [Abstract] | |||||
Percentage on Timing of Revenue Recognition | 95.20% | 94.50% | 94.30% | 94.20% | |
Goods and Services Transferred Over Time [Member] | |||||
Timing of Revenue [Abstract] | |||||
Percentage on Timing of Revenue Recognition | 4.80% | 5.50% | 5.70% | 5.80% |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies, Segment Information (Details) - Segment | 6 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Sep. 30, 2021 | |
Segment Information [Abstract] | ||
Number of operating segments | 1 | 1 |
Acquisitions (Details)
Acquisitions (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | |||||
Mar. 31, 2022USD ($)Location | Mar. 31, 2021USD ($) | Mar. 31, 2022USD ($)Location | Mar. 31, 2021USD ($) | Dec. 01, 2021Location | Oct. 02, 2021Location | Sep. 30, 2021USD ($) | |
Acquisition [Abstract] | |||||||
Cash paid for acquisition | $ 288,900 | ||||||
Note payable to seller | 1,100 | ||||||
Payment of contingent consideration | $ 15,300 | 15,300 | |||||
Issuance of shares of Class A common stock | 6,800 | ||||||
Minimum payout due of contingent consideration | 5,900 | 5,900 | |||||
Maximum payout due of contingent consideration | 24,700 | 24,700 | |||||
Summary of Assets Acquired and Liabilities Assumed [Abstract] | |||||||
Goodwill | 313,460 | 313,460 | $ 168,491 | ||||
Consideration transferred | 312,200 | 312,200 | |||||
Revenue | 442,127 | $ 329,611 | 778,399 | $ 543,694 | |||
Income before income tax expense | 55,135 | 37,142 | 83,510 | 51,428 | |||
Costs related to acquisition | 700 | 400 | 3,700 | 600 | |||
Unaudited Pro Forma Results of Operations [Abstract] | |||||||
Pro forma revenue | 443,901 | 413,583 | 821,412 | 734,457 | |||
Pro forma net income | $ 42,583 | $ 40,468 | $ 66,257 | $ 58,019 | |||
Notes Payable [Member] | |||||||
Acquisition [Abstract] | |||||||
Interest rate | 4.00% | 4.00% | |||||
Naples Boat Mart [Member] | |||||||
Acquisition [Abstract] | |||||||
Number of stores | Location | 1 | ||||||
Norfolk Marine [Member] | |||||||
Acquisition [Abstract] | |||||||
Number of stores | Location | 1 | ||||||
T-H Marine [Member] | |||||||
Summary of Assets Acquired and Liabilities Assumed [Abstract] | |||||||
Accounts receivable | $ 8,955 | $ 8,955 | |||||
Inventories | 19,856 | 19,856 | |||||
Prepaid expenses | 1,547 | 1,547 | |||||
Property and equipment | 3,896 | 3,896 | |||||
Operating lease right-of-use assets | 5,960 | 5,960 | |||||
Identifiable intangible assets | 105,500 | 105,500 | |||||
Goodwill | 51,694 | 51,694 | |||||
Accounts payable | (3,876) | (3,876) | |||||
Accrued expenses | (1,697) | (1,697) | |||||
Customer deposits | (394) | (394) | |||||
Operating lease liabilities | (5,960) | (5,960) | |||||
Aggregate acquisition date fair value | 185,481 | 185,481 | |||||
Consideration transferred | 185,481 | 185,481 | |||||
Fair value of non-controlling interests | $ 0 | $ 0 | |||||
Quality Boats [Member] | |||||||
Acquisition [Abstract] | |||||||
Number of stores | Location | 3 | 3 | |||||
Percentage of economic interest retained by sellers | 20.00% | 20.00% | |||||
Percentage of remaining economic interest | 20.00% | 20.00% | |||||
Summary of Assets Acquired and Liabilities Assumed [Abstract] | |||||||
Accounts receivable | $ 0 | $ 0 | |||||
Inventories | 5,937 | 5,937 | |||||
Prepaid expenses | 54 | 54 | |||||
Property and equipment | 803 | 803 | |||||
Operating lease right-of-use assets | 428 | 428 | |||||
Identifiable intangible assets | 31,700 | 31,700 | |||||
Goodwill | 78,682 | 78,682 | |||||
Accounts payable | 0 | 0 | |||||
Accrued expenses | 0 | 0 | |||||
Customer deposits | (5,047) | (5,047) | |||||
Operating lease liabilities | (428) | (428) | |||||
Aggregate acquisition date fair value | 112,129 | 112,129 | |||||
Consideration transferred | 92,818 | 92,818 | |||||
Fair value of non-controlling interests | 19,311 | 19,311 | |||||
Other Acquisitions [Member] | |||||||
Summary of Assets Acquired and Liabilities Assumed [Abstract] | |||||||
Accounts receivable | 1,122 | 1,122 | |||||
Inventories | 9,618 | 9,618 | |||||
Prepaid expenses | 370 | 370 | |||||
Property and equipment | 1,227 | 1,227 | |||||
Operating lease right-of-use assets | 218 | 218 | |||||
Identifiable intangible assets | 11,276 | 11,276 | |||||
Goodwill | 14,594 | 14,594 | |||||
Accounts payable | (471) | (471) | |||||
Accrued expenses | (553) | (553) | |||||
Customer deposits | (3,307) | (3,307) | |||||
Operating lease liabilities | (218) | (218) | |||||
Aggregate acquisition date fair value | 33,876 | 33,876 | |||||
Consideration transferred | 33,876 | 33,876 | |||||
Fair value of non-controlling interests | 0 | 0 | |||||
Total Acquisitions [Member] | |||||||
Summary of Assets Acquired and Liabilities Assumed [Abstract] | |||||||
Accounts receivable | 10,077 | 10,077 | |||||
Inventories | 35,411 | 35,411 | |||||
Prepaid expenses | 1,971 | 1,971 | |||||
Property and equipment | 5,926 | 5,926 | |||||
Operating lease right-of-use assets | 6,606 | 6,606 | |||||
Identifiable intangible assets | 148,476 | 148,476 | |||||
Goodwill | 144,970 | 144,970 | |||||
Accounts payable | (4,347) | (4,347) | |||||
Accrued expenses | (2,250) | (2,250) | |||||
Customer deposits | (8,748) | (8,748) | |||||
Operating lease liabilities | (6,606) | (6,606) | |||||
Aggregate acquisition date fair value | 331,486 | 331,486 | |||||
Consideration transferred | 312,175 | 312,175 | |||||
Fair value of non-controlling interests | 19,311 | 19,311 | |||||
Revenue | 72,400 | 86,600 | |||||
Income before income tax expense | $ 12,200 | $ 13,300 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Sep. 30, 2021 |
Component of Inventory [Abstract] | ||
Inventories | $ 293,170 | $ 143,880 |
New Vessels [Member] | ||
Component of Inventory [Abstract] | ||
Inventories | 213,420 | 105,625 |
Pre-owned Vessels [Member] | ||
Component of Inventory [Abstract] | ||
Inventories | 32,532 | 22,906 |
Work in Process, Parts and Accessories [Member] | ||
Component of Inventory [Abstract] | ||
Inventories | $ 47,218 | $ 15,349 |
Goodwill and Other Identifiab_3
Goodwill and Other Identifiable Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Mar. 31, 2022 | Mar. 31, 2021 | |
Goodwill [Abstract] | ||||
Net balance - beginning of period | $ 168,491 | |||
Goodwill acquisitions during the period | 144,969 | |||
Net balance - end of period | $ 313,460 | 313,460 | ||
Identifiable Intangible Assets [Abstract] | ||||
Net balance - beginning of period | 85,294 | |||
Acquisitions during the period | 148,476 | |||
Accumulated amortization during the period | (2,600) | $ 0 | (2,646) | $ 0 |
Net balance - end of period | 231,124 | 231,124 | ||
Expected Amortization Expense [Abstract] | ||||
2022 (excluding the six months ended March 31, 2022) | 4,095 | 4,095 | ||
2023 | 8,190 | 8,190 | ||
2024 | 8,190 | 8,190 | ||
2025 | 8,190 | 8,190 | ||
2026 | 8,190 | 8,190 | ||
Thereafter | 42,404 | 42,404 | ||
Finite-Lived Intangible Assets, Net | 79,259 | 79,259 | ||
Trade Names [Member] | ||||
Identifiable Intangible Assets [Abstract] | ||||
Net balance - beginning of period | 85,294 | |||
Acquisitions during the period | 66,571 | |||
Net balance - end of period | 151,865 | 151,865 | ||
Design Libraries [Member] | ||||
Identifiable Intangible Assets [Abstract] | ||||
Net balance - beginning of period | 0 | |||
Acquisitions during the period | 14,050 | |||
Accumulated amortization during the period | (454) | |||
Net balance - end of period | 13,596 | 13,596 | ||
Customer Relationships [Member] | ||||
Identifiable Intangible Assets [Abstract] | ||||
Net balance - beginning of period | 0 | |||
Acquisitions during the period | 67,855 | |||
Accumulated amortization during the period | (2,192) | |||
Net balance - end of period | $ 65,663 | $ 65,663 |
Notes Payable - Floor Plan (Det
Notes Payable - Floor Plan (Details) - Inventory Financing Facility [Member] - USD ($) $ in Millions | 6 Months Ended | ||
Mar. 31, 2022 | Dec. 29, 2021 | Sep. 30, 2021 | |
Line of Credit Facility [Abstract] | |||
Maximum borrowing capacity | $ 500 | ||
Outstanding balance of facility | $ 254.9 | $ 114.2 | |
Credit facility, available borrowing capacity | $ 245.1 | $ 278.3 | |
New Inventory [Member] | Minimum [Member] | |||
Line of Credit Facility [Abstract] | |||
Credit facility, interest rate | 3.02% | 3.08% | |
New Inventory [Member] | Maximum [Member] | |||
Line of Credit Facility [Abstract] | |||
Credit facility, interest rate | 5.27% | 5.33% | |
Pre-owned Inventory [Member] | Minimum [Member] | |||
Line of Credit Facility [Abstract] | |||
Credit facility, interest rate | 3.27% | 3.33% | |
Pre-owned Inventory [Member] | Maximum [Member] | |||
Line of Credit Facility [Abstract] | |||
Credit facility, interest rate | 5.52% | 5.58% | |
Boat Rate [Member] | New Boats [Member] | |||
Line of Credit Facility [Abstract] | |||
Debt instrument, variable interest rate | 0.25% | ||
SOFR [Member] | |||
Line of Credit Facility [Abstract] | |||
Debt instrument, term of variable rate | 30 days | ||
SOFR [Member] | New Boats [Member] | Minimum [Member] | |||
Line of Credit Facility [Abstract] | |||
Debt instrument, variable interest rate | 2.75% | ||
SOFR [Member] | New Boats [Member] | Maximum [Member] | |||
Line of Credit Facility [Abstract] | |||
Debt instrument, variable interest rate | 5.00% | ||
Wells Fargo [Member] | |||
Line of Credit Facility [Abstract] | |||
Percentage of finance provided of vendor invoice price | 100.00% |
Long-term Debt and Line of Cr_3
Long-term Debt and Line of Credit (Details) - USD ($) $ in Thousands | Nov. 30, 2021 | Mar. 31, 2022 | Sep. 30, 2021 | Jul. 22, 2020 |
Long-term Debt and Line of Credit [Abstract] | ||||
Long-term debt, gross | $ 344,346 | $ 116,534 | ||
Less current portion (net of debt issuance costs) | (17,294) | (11,366) | ||
Less unamortized portion of debt issuance costs | (5,604) | (2,094) | ||
Long-term debt, net of current portion of unamortized debt issuance costs | $ 321,448 | $ 103,074 | ||
Revolving Credit Facility [Member] | ||||
Long-term Debt and Line of Credit [Abstract] | ||||
Aggregate principal amount | $ 30,000 | |||
Increase in revolving commitment | $ 20,000 | |||
Incremental Term Loan [Member] | ||||
Long-term Debt and Line of Credit [Abstract] | ||||
Aggregate principal amount | $ 200,000 | |||
Term Loan [Member] | ||||
Long-term Debt and Line of Credit [Abstract] | ||||
Aggregate principal amount | $ 110,000 | |||
Term Note Payable to Truist Bank, Secured and Bearing Interest at 3.0% at March 31, 2022 and 2.75% at September 30, 2021. The Note Requires Quarterly Principal Payments, Maturing with a Full Repayment on July 22, 2025 [Member] | ||||
Long-term Debt and Line of Credit [Abstract] | ||||
Interest rate | 3.00% | 2.75% | ||
Maturity date | Jul. 22, 2025 | |||
Long-term debt, gross | $ 297,930 | $ 105,875 | ||
Revolving Note Payable for an Amount up to $50.0 Million to Truist Bank, Secured and Bearing Interest at 3.0% at March 31, 2022. The Note Requires Full Repayment on July 22, 2025 [Member] | ||||
Long-term Debt and Line of Credit [Abstract] | ||||
Aggregate principal amount | $ 50,000 | |||
Interest rate | 3.00% | |||
Maturity date | Jul. 22, 2025 | |||
Long-term debt, gross | $ 40,000 | 0 | ||
Note Payable to Commercial Vehicle Lenders Secured by the Value of the Vehicles Bearing Interest at Rates Ranging from 0.0% to 8.9% Per Annum. The Notes Require Monthly Installment Payments of Principal and Interest Ranging from $100 to $5,600 through July 2028 [Member] | ||||
Long-term Debt and Line of Credit [Abstract] | ||||
Maturity date | Jul. 31, 2028 | |||
Frequency of periodic payment | monthly | |||
Long-term debt, gross | $ 3,234 | 3,248 | ||
Note Payable to Commercial Vehicle Lenders Secured by the Value of the Vehicles Bearing Interest at Rates Ranging from 0.0% to 8.9% Per Annum. The Notes Require Monthly Installment Payments of Principal and Interest Ranging from $100 to $5,600 through July 2028 [Member] | Minimum [Member] | ||||
Long-term Debt and Line of Credit [Abstract] | ||||
Interest rate | 0.00% | |||
Monthly installment payment amount | $ 100 | |||
Note Payable to Commercial Vehicle Lenders Secured by the Value of the Vehicles Bearing Interest at Rates Ranging from 0.0% to 8.9% Per Annum. The Notes Require Monthly Installment Payments of Principal and Interest Ranging from $100 to $5,600 through July 2028 [Member] | Maximum [Member] | ||||
Long-term Debt and Line of Credit [Abstract] | ||||
Interest rate | 8.90% | |||
Monthly installment payment amount | $ 5,600 | |||
Note Payable To Tom George Yacht Sales, Inc., Unsecured and Bearing Interest At 5.5% Per Annum. The Note Requires Quarterly Interest Payments, With a Balloon Payment of Principal Due On December 1, 2023 [Member] | ||||
Long-term Debt and Line of Credit [Abstract] | ||||
Interest rate | 5.50% | |||
Maturity date | Dec. 1, 2023 | |||
Long-term debt, gross | $ 2,056 | 2,056 | ||
Note Payable to Norfolk Marine Company, Unsecured and Bearing Interest at 4.0% Per Annum. The Note Requires Quarterly Interest Payments, with a Balloon Payment of Principal Due on December 1, 2024 [Member] | ||||
Long-term Debt and Line of Credit [Abstract] | ||||
Interest rate | 4.00% | |||
Maturity date | Dec. 1, 2024 | |||
Long-term debt, gross | $ 1,126 | 0 | ||
Note Payable to Central Marine Services, Inc., Unsecured and Bearing Interest at 5.5% Per Annum. The Note was Repaid in Full [Member] | ||||
Long-term Debt and Line of Credit [Abstract] | ||||
Interest rate | 5.50% | |||
Long-term debt, gross | $ 0 | 2,164 | ||
Note Payable to Ocean Blue Yacht Sales, Unsecured and Bearing Interest at 5.0% Per Annum. The Note was Repaid in Full [Member] | ||||
Long-term Debt and Line of Credit [Abstract] | ||||
Interest rate | 5.00% | |||
Long-term debt, gross | $ 0 | 1,920 | ||
Note Payable to Slalom Shop, LLC, Unsecured and Bearing Interest at 5.0% Per Annum. The Note was Repaid in Full [Member] | ||||
Long-term Debt and Line of Credit [Abstract] | ||||
Interest rate | 5.00% | |||
Long-term debt, gross | $ 0 | $ 1,271 |
Stockholders' and Members' Eq_3
Stockholders' and Members' Equity, Equity-Based Compensation (Details) $ / shares in Units, $ in Millions | Oct. 01, 2022shares | Sep. 30, 2022shares | Mar. 31, 2022USD ($)$ / sharesshares | Mar. 31, 2021USD ($) | Mar. 31, 2022USD ($)Intallment$ / sharesshares | Mar. 31, 2021USD ($) | Feb. 11, 2020shares |
Equity-Based Compensation [Abstract] | |||||||
Percentage of expected performance targets to be achieved target award | 200.00% | 200.00% | |||||
Class A Common Stock [Member] | |||||||
Equity-Based Compensation [Abstract] | |||||||
Total number of shares reserved for issuance (in shares) | 1,530,923 | ||||||
Restricted Stock Units (RSUs) [Member] | |||||||
Equity-Based Compensation [Abstract] | |||||||
Compensation expense | $ | $ 2.7 | $ 1.1 | $ 4.8 | $ 2.2 | |||
Number of Shares [Abstract] | |||||||
Beginning balance (in shares) | 545,094 | ||||||
Awarded (in shares) | 160,573 | ||||||
Vested (in shares) | (100,872) | ||||||
Forfeited (in shares) | 0 | ||||||
Ending balance (in shares) | 604,795 | 604,795 | |||||
Weighted Average Grant Date Fair Value [Abstract] | |||||||
Beginning balance (in dollars per share) | $ / shares | $ 22.68 | ||||||
Awarded (in dollars per share) | $ / shares | 40.44 | ||||||
Vested (in dollars per share) | $ / shares | 16.99 | ||||||
Forfeited (in dollars per share) | $ / shares | 0 | ||||||
Ending balance (in dollars per share) | $ / shares | $ 28.34 | $ 28.34 | |||||
Unrecognized compensation expense | $ | $ 10.8 | $ 10.8 | |||||
Weighted-average period of recognition | 1 year 4 months 24 days | ||||||
Time-Based Restricted Stock Units [Member] | |||||||
Equity-Based Compensation [Abstract] | |||||||
Number of equal annual installments for vesting | Intallment | 3 | ||||||
Number of Shares [Abstract] | |||||||
Awarded (in shares) | 108,346 | ||||||
Time-Based Restricted Stock Units [Member] | Plan [Member] | |||||||
Number of Shares [Abstract] | |||||||
Awarded (in shares) | 13,062 | 95,284 | |||||
Performance Share Unit [Member] | |||||||
Equity-Based Compensation [Abstract] | |||||||
Percentage of target award granted | 100.00% | ||||||
Number of equal annual installments for vesting | Intallment | 3 | ||||||
Number of shares of common stock consisted in each unit (in shares) | 1 | ||||||
Compensation expense | $ | $ 1.7 | $ 0.4 | $ 2.7 | $ 0.7 | |||
Number of Shares [Abstract] | |||||||
Awarded (in shares) | 52,227 | ||||||
Performance Share Unit [Member] | Minimum [Member] | |||||||
Equity-Based Compensation [Abstract] | |||||||
Percentage of actual number of unit earned | 0.00% | ||||||
Performance Share Unit [Member] | Maximum [Member] | |||||||
Equity-Based Compensation [Abstract] | |||||||
Percentage of actual number of unit earned | 200.00% |
Stockholders' and Members' Eq_4
Stockholders' and Members' Equity, Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Mar. 31, 2022 | Mar. 31, 2021 | Mar. 31, 2022 | Mar. 31, 2021 | Mar. 30, 2022 | Sep. 30, 2021 | |
Stockholders' and Members' Equity [Abstract] | ||||||
Share repurchase program authorized amount | $ 50,000 | |||||
Share repurchase under program (in shares) | 0 | |||||
Numerator [Abstract] | ||||||
Net income attributable to OneWater Inc. | $ 36,297 | $ 20,475 | $ 56,316 | $ 28,263 | ||
Common Class A [Member] | ||||||
Earnings (loss) per unit attributable to common interest holders [Abstract] | ||||||
Common stock, shares outstanding (in shares) | 13,879,290 | 13,879,290 | 13,276,538 | |||
Denominator [Abstract] | ||||||
Weighted-average number of unrestricted outstanding common shares used to calculate basic net income per share (in shares) | 13,864,000 | 10,901,000 | 13,619,000 | 10,838,000 | ||
Effect of dilutive securities [Abstract] | ||||||
Restricted stock units (in shares) | 408,000 | 270,000 | 398,000 | 245,000 | ||
Diluted weighted-average shares of Class A common stock outstanding used to calculate diluted earnings per share (in shares) | 14,272,000 | 11,171,000 | 14,017,000 | 11,083,000 | ||
Earnings per share of Class A common stock - basic (in dollars per share) | $ 2.62 | $ 1.88 | $ 4.14 | $ 2.61 | ||
Earnings per share of Class A common stock - diluted (in dollars per share) | $ 2.54 | $ 1.83 | $ 4.02 | $ 2.55 | ||
Common Class B [Member] | ||||||
Earnings (loss) per unit attributable to common interest holders [Abstract] | ||||||
Common stock, shares outstanding (in shares) | 1,429,940 | 1,429,940 | 1,819,112 |
Stockholders' and Members' Eq_5
Stockholders' and Members' Equity, Antidilutive Securities (Details) - shares shares in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Mar. 31, 2022 | Mar. 31, 2021 | |
Antidilutive Securities [Abstract] | ||||
Antidilutive securities excluded from computation of diluted weighted average shares (in shares) | 1,629 | 4,251 | 1,842 | 4,327 |
Restricted Stock Units [Member] | ||||
Antidilutive Securities [Abstract] | ||||
Antidilutive securities excluded from computation of diluted weighted average shares (in shares) | 199 | 143 | 217 | 173 |
Common Class B [Member] | ||||
Antidilutive Securities [Abstract] | ||||
Antidilutive securities excluded from computation of diluted weighted average shares (in shares) | 1,430 | 4,108 | 1,625 | 4,154 |
Stockholders' and Members' Eq_6
Stockholders' and Members' Equity, Employee Stock Purchase Plan (Details) - Common Class A [Member] | Feb. 23, 2021shares |
Employee Stock Purchase Plan [Abstract] | |
Percentage of outstanding shares, ESPP issuance | 1.00% |
Maximum [Member] | |
Employee Stock Purchase Plan [Abstract] | |
ESPP shares issuance (in shares) | 299,505 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2022 | Sep. 30, 2021 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Transfers between valuation hierarchy levels | $ 0 | $ 0 | |
Transfers between valuation hierarchy levels | 0 | 0 | |
Fair Value [Member] | |||
Liabilities [Abstract] | |||
Contingent consideration | 35,243 | 35,243 | $ 12,072 |
Fair Value [Member] | Level 1 [Member] | |||
Liabilities [Abstract] | |||
Contingent consideration | 0 | 0 | 0 |
Fair Value [Member] | Level 2 [Member] | |||
Liabilities [Abstract] | |||
Contingent consideration | 0 | 0 | 0 |
Fair Value [Member] | Level 3 [Member] | |||
Liabilities [Abstract] | |||
Contingent consideration | 35,243 | 35,243 | $ 12,072 |
Contingent Consideration [Member] | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Beginning balance | 33,139 | 12,072 | |
Additions from acquisitions | 0 | 15,321 | |
Settlement of contingent consideration | (53) | (53) | |
Change in fair value, including accretion | 2,157 | 7,903 | |
Ending balance | $ 35,243 | $ 35,243 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2022 | Sep. 30, 2021 | |
Effective Income Tax Rate Reconciliation [Abstract] | |||
Effective tax rate | 23.20% | 21.20% | |
Tax receivable agreement liability | $ 46.2 | $ 46.2 | $ 40.1 |
Percentage of net cash savings | 85.00% |
Leases (Details)
Leases (Details) | 6 Months Ended |
Mar. 31, 2022 | |
Leases [Abstract] | |
Renewal term of lease | 1 year |
Extended renewal term of lease | 10 years |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Mar. 31, 2022 | Mar. 31, 2021 | Mar. 31, 2022 | Mar. 31, 2021 | Sep. 30, 2021 | |
Related Party Transactions [Abstract] | |||||
Due to related parties | $ 400,000 | $ 400,000 | $ 1,000,000 | ||
Due from related parties | 800,000 | 800,000 | $ 32,368 | ||
Affiliated Entities [Member] | |||||
Related Party Transactions [Abstract] | |||||
Purchase of inventories | 25,000,000 | $ 21,300,000 | 58,200,000 | $ 36,400,000 | |
Expenses incurred | 600,000 | 500,000 | 1,300,000 | 1,100,000 | |
Affiliated Entities and Individuals [Member] | |||||
Related Party Transactions [Abstract] | |||||
Fees received for goods and services | $ 4,800,000 | 1,300,000 | 4,900,000 | 1,400,000 | |
Payments and fees, related party | $ 100,000 | $ 100,000 | $ 100,000 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ in Millions | Apr. 01, 2022 | Mar. 31, 2022 |
Business Combination [Abstract] | ||
Cash consideration | $ 288.9 | |
Issuance of common stock | $ 6.8 | |
Subsequent Event [Member] | Denison Yachting [Member] | ||
Business Combination [Abstract] | ||
Cash consideration | $ 35.6 | |
Subsequent Event [Member] | Class A Common Stock [Member] | Denison Yachting [Member] | ||
Business Combination [Abstract] | ||
Shares issued (in shares) | 253,840 | |
Issuance of common stock | $ 9.7 |