Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Dec. 31, 2022 | Jan. 27, 2023 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Period End Date | Dec. 31, 2022 | |
Current Fiscal Year End Date | --09-30 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q1 | |
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 $0.01 per share | |
Trading Symbol | ONEW | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Common Class A [Member] | ||
Entity Common Stock, Shares Outstanding | 14,336,986 | |
Common Class B [Member] | ||
Entity Common Stock, Shares Outstanding | 1,429,940 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2022 | Sep. 30, 2022 |
Current assets: | ||
Cash | $ 43,535 | $ 42,071 |
Restricted cash | 14,673 | 18,876 |
Accounts receivable, net | 63,613 | 57,960 |
Inventories, net | 527,023 | 372,959 |
Prepaid expenses and other current assets | 61,548 | 75,024 |
Total current assets | 710,392 | 566,890 |
Property and equipment, net | 114,802 | 109,713 |
Operating lease right-of-use assets | 126,760 | 123,955 |
Other assets: | ||
Other assets | 3,844 | 3,378 |
Deferred tax assets, net | 7,248 | 8,433 |
Intangible assets, net | 311,579 | 306,471 |
Goodwill | 397,468 | 378,588 |
Total other assets | 720,139 | 696,870 |
Total assets | 1,672,093 | 1,497,428 |
Current liabilities: | ||
Accounts payable | 25,859 | 27,306 |
Other payables and accrued expenses | 44,835 | 55,237 |
Customer deposits | 60,084 | 65,460 |
Notes payable - floor plan | 425,368 | 267,108 |
Current portion of operating lease liabilities | 13,410 | 12,981 |
Current portion of long-term debt, net | 29,247 | 21,642 |
Current portion of tax receivable agreement liability | 2,363 | 2,363 |
Total current liabilities | 601,166 | 452,097 |
Long-term Liabilities: | ||
Other long-term liabilities | 19,850 | 23,174 |
Tax receivable agreement liability | 43,991 | 43,991 |
Noncurrent operating lease liabilities | 114,601 | 112,127 |
Long-term debt, net | 434,670 | 421,162 |
Total liabilities | 1,214,278 | 1,052,551 |
Stockholders' Equity: | ||
Preferred stock, $0.01 par value, 1,000,000 shares authorized, none issued and outstanding as of December 31, 2022 and September 30, 2022 | 0 | 0 |
Additional paid-in capital | 182,113 | 180,296 |
Retained earnings | 213,770 | 204,880 |
Accumulated other comprehensive income (loss) | 3 | (7) |
Total stockholders' equity attributable to OneWater Marine Inc. | 396,043 | 385,325 |
Equity attributable to non-controlling interests | 61,772 | 59,552 |
Total stockholders' equity | 457,815 | 444,877 |
Total liabilities and stockholders' equity | 1,672,093 | 1,497,428 |
Class A Common Stock [Member] | ||
Stockholders' Equity: | ||
Common stock | 143 | 142 |
Class B Common Stock [Member] | ||
Stockholders' Equity: | ||
Common stock | $ 14 | $ 14 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2022 | Sep. 30, 2022 |
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) | 14,297,607 | 14,211,621 |
Common stock, shares outstanding (in shares) | 14,297,607 | 14,211,621 |
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 | 1,429,940 |
Common stock, shares outstanding (in shares) | 1,429,940 | 1,429,940 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Revenues: | ||
Revenues | $ 366,659 | $ 336,272 |
Cost of sales (exclusive of depreciation and amortization shown separately below) | ||
Cost of sales | 256,671 | 235,307 |
Selling, general and administrative expenses | 77,838 | 59,096 |
Depreciation and amortization | 5,693 | 1,749 |
Transaction costs | 1,330 | 3,045 |
Change in fair value of contingent consideration | (1,409) | 5,746 |
Income from operations | 26,536 | 31,329 |
Other expense (income) | ||
Interest expense - floor plan | 4,779 | 877 |
Interest expense - other | 7,584 | 1,529 |
Other (income) expense, net | (639) | 548 |
Total other expense, net | 11,724 | 2,954 |
Income before income tax expense | 14,812 | 28,375 |
Income tax expense | 3,384 | 4,889 |
Net income | 11,428 | 23,486 |
Less: Net income attributable to non-controlling interests | (1,365) | 0 |
Less: Net income attributable to non-controlling interests of One Water Marine Holdings, LLC | (1,163) | (3,467) |
Net income attributable to OneWater Marine Inc. | 8,900 | 20,019 |
New Boat [Member] | ||
Revenues: | ||
Revenues | 232,405 | 236,198 |
Cost of sales (exclusive of depreciation and amortization shown separately below) | ||
Cost of sales | 175,258 | 175,896 |
Pre-Owned Boat [Member] | ||
Revenues: | ||
Revenues | 55,778 | 53,449 |
Cost of sales (exclusive of depreciation and amortization shown separately below) | ||
Cost of sales | 40,304 | 39,370 |
Finance & Insurance [Member] | ||
Revenues: | ||
Revenues | 8,934 | 9,307 |
Service, Parts & Other [Member] | ||
Revenues: | ||
Revenues | 69,542 | 37,318 |
Cost of sales (exclusive of depreciation and amortization shown separately below) | ||
Cost of sales | $ 41,109 | $ 20,041 |
Class A Common Stock [Member] | ||
Other expense (income) | ||
Earnings per share, Basic (in dollars per share) | $ 0.62 | $ 1.5 |
Earnings per share, Diluted (in dollars per share) | $ 0.61 | $ 1.45 |
Basic weighted-average shares outstanding (in shares) | 14,297 | 13,380 |
Diluted weighted-average shares outstanding (in shares) | 14,587 | 13,761 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME [Abstract] | ||
Net income | $ 11,428 | $ 23,486 |
Other comprehensive income: | ||
Foreign currency translation adjustment | 11 | 0 |
Comprehensive income | 11,439 | 23,486 |
Less: Net income attributable to non-controlling interests | (1,365) | 0 |
Less: Net income attributable to non-controlling interests of One Water Marine Holdings, LLC | (1,163) | (3,467) |
Foreign currency translation adjustment attributable to non-controlling interest of One Water Marine Holdings, LLC | (1) | 0 |
Comprehensive income attributable to One Water Marine Holdings, Inc. | $ 8,910 | $ 20,019 |
CONDENSED CONSOLIDATED STATEM_3
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] | Accumulated Other Comprehensive Income (Loss) [Member] | Total |
Beginning balance at Sep. 30, 2021 | $ 133 | $ 18 | $ 150,825 | $ 74,952 | $ 28,905 | $ 0 | $ 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 | 0 | 23,486 |
Distributions to members | 0 | 0 | 0 | (442) | (177) | 0 | (619) |
Non-controlling interest in subsidiary | 0 | 0 | 0 | 0 | 19,311 | 0 | 19,311 |
Exchange of B shares for A shares | $ 4 | $ (4) | 7,405 | 0 | (7,405) | 0 | 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 | 0 | (283) |
Shares issued upon vesting of equity-based awards, net of tax withholding | $ 1 | $ 0 | (469) | 0 | 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 | 0 | 6,834 |
Shares issued in connection with a business combination (in shares) | 133 | 0 | |||||
Equity-based compensation | $ 0 | $ 0 | 2,100 | 0 | 0 | 0 | 2,100 |
Currency translation adjustments | 0 | ||||||
Ending balance at Dec. 31, 2021 | $ 139 | $ 14 | 166,411 | 94,529 | 44,101 | 0 | 305,194 |
Ending balance (in shares) at Dec. 31, 2021 | 13,852 | 1,430 | |||||
Beginning balance at Sep. 30, 2022 | $ 142 | $ 14 | 180,296 | 204,880 | 59,552 | (7) | 444,877 |
Beginning balance (in shares) at Sep. 30, 2022 | 14,212 | 1,430 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | $ 0 | $ 0 | 0 | 8,900 | 2,528 | 0 | 11,428 |
Distributions to members | 0 | 0 | 0 | (10) | (309) | 0 | (319) |
Shares issued upon vesting of equity-based awards, net of tax withholding | $ 1 | $ 0 | (755) | 0 | 0 | 0 | (754) |
Shares issued upon vesting of equity-based awards, net of tax withholding (in shares) | 86 | 0 | |||||
Equity-based compensation | $ 0 | $ 0 | 2,572 | 0 | 0 | 0 | 2,572 |
Currency translation adjustments | 0 | 0 | 0 | 0 | 1 | 10 | 11 |
Ending balance at Dec. 31, 2022 | $ 143 | $ 14 | $ 182,113 | $ 213,770 | $ 61,772 | $ 3 | $ 457,815 |
Ending balance (in shares) at Dec. 31, 2022 | 14,298 | 1,430 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Cash flows from operating activities | ||
Net income | $ 11,428 | $ 23,486 |
Adjustments to reconcile net income to net cash used in operating activities: | ||
Depreciation and amortization | 6,182 | 1,749 |
Equity-based awards | 2,572 | 2,100 |
Loss (gain) on asset disposals | 171 | (37) |
Non-cash interest expense | 2,217 | 200 |
Deferred income tax provision | 1,185 | 1,659 |
Change in fair value of contingent consideration | (1,409) | 5,746 |
Loss on equity investment | 260 | 0 |
(Increase) decrease in assets: | ||
Accounts receivable | (5,466) | 240 |
Inventories | (147,832) | (71,660) |
Prepaid expenses and other current assets | 13,648 | 2,137 |
Other assets | (729) | (14) |
Increase (decrease) in liabilities: | ||
Accounts payable | (1,464) | 13,911 |
Other payables and accrued expenses | (12,437) | (6,414) |
Tax receivable agreement liability | 0 | 313 |
Customer deposits | (6,376) | 3,759 |
Net cash used in operating activities | (138,050) | (22,825) |
Cash flows from investing activities | ||
Purchases of property and equipment and construction in progress | (6,416) | (3,428) |
Proceeds from disposal of property and equipment | 47 | 6 |
Cash used in acquisitions, net of cash acquired | (28,611) | (278,798) |
Net cash used in investing activities | (34,980) | (282,220) |
Cash flows from financing activities | ||
Net borrowings from floor plan | 156,032 | 81,403 |
Proceeds from long-term debt | 20,000 | 240,000 |
Payments on long-term debt | (379) | (5,507) |
Payments of debt issuance costs | 0 | (3,979) |
Payments of contingent consideration | (4,300) | 0 |
Payments of tax withholdings for equity-based awards | (754) | (468) |
Distributions to members | (319) | (5,584) |
Net cash provided by financing activities | 170,280 | 305,865 |
Effect of exchange rate changes on cash and restricted cash | 11 | 0 |
Net change in cash | (2,739) | 820 |
Cash and restricted cash at beginning of period | 60,947 | 73,949 |
Cash and restricted cash at end of period | 58,208 | 74,769 |
Supplemental cash flow disclosures | ||
Cash paid for interest | 10,146 | 2,206 |
Cash paid for income taxes | 2,897 | 702 |
Noncash items | ||
Acquisition purchase price funded by seller notes payable | 0 | 1,126 |
Acquisition purchase price funded by contingent consideration | 2,550 | 9,967 |
Accrued purchase consideration | 0 | 5,353 |
Acquisition purchase price funded by issuance of Class A common stock | 0 | 6,834 |
Purchase of property and equipment funded by long-term debt | 792 | 231 |
Right-of-use assets obtained in exchange for new operating lease liabilities | 6,314 | 31,529 |
Acquisition purchase price funded by affiliate financing | 10,600 | 0 |
Settlement of affiliate financing with proceeds from sale and leaseback | $ 10,600 | $ 0 |
Description of Company and Basi
Description of Company and Basis of Presentation | 3 Months Ended |
Dec. 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 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, 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 December 31, 2022, the Company operated a total of 100 retail locations, 12 distribution centers/warehouses and multiple online marketplaces in 20 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 42.9% and 47.9% of total sales for the three months ended December 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 13.0% and 14.1% of consolidated revenue for the three months ended December 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. Through OneWater LLC and its wholly-owned subsidiaries, as well as majority-owned subsidiaries over which the Company exercises control, OneWater Inc. 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 December 31, 2022, OneWater Inc. owned 90.9% 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, 2022. 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. COVID-19 Pandemic 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 increase in demand for marine retail products has led to industry-wide supply chain constraints and although there are indications that the supply chain constraints are easing, it is unclear when the issue will be fully resolved. The Company is monitoring and assessing the situation and preparing for implications to the business, including the ability to safely operate its locations, access to inventory and customer demand. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Dec. 31, 2022 | |
Summary of Significant Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Cash At times the amount of cash on deposit may exceed the federally insured limit of the bank. Deposit accounts at each of the institutions are insured up to $250,000 by the Federal Deposit Insurance Corporation (FDIC). At December 31, 2022 and September 30, 2022, the Company exceeded FDIC limits at various institutions. The Company has not experienced any losses in such accounts and believes there is little to no exposure to any significant credit risk. Restricted Cash Restricted cash relates to amounts collected for pre-owned sales, in certain states, which are held in escrow on behalf of the respective buyers and sellers for future purchases of boats. Total customer deposits are shown as a liability on the consolidated balance sheets. These liabilities may be more than the applicable restricted cash balances and fluctuate due to timing differences and because in certain states the deposits are not restricted from use. 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 acquired, manufactured and assembled parts and accessories is determined using methods which vary by subsidiary and include both the average cost method and first-in, first-out (“FIFO”). 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, developed technologies, including 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 Company, and therefore, are not subject to amortization. Developed technologies 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. Financial statement risk exists to the extent identifiable intangibles become impaired due to the decrease in the fair value of the identifiable assets. 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 to the customer. 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) is recognized when control of the item 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 $3.7 million as of December 31, 2022 and September 30, 2022. Certain parts and service transactions require the Company to perform shipping and handling activities after the transfer of control to the customer (e.g., when control transfers prior to delivery). They are considered fulfillment activities and are included in selling, general and administrative expenses. Revenue from storage and marina operations is recognized on a straight-line basis over the term of the contract as services are completed. Revenue from arranging financing, insurance and extended warranty contracts to customers through various third-party financial institutions and insurance companies is recognized when the related boats are sold. We do not directly finance our customers’ boat, motor or trailer purchases. We are acting as an agent in the transaction, therefore the commission is recorded on a net basis. Subject to our agreements and in the event of early cancellation, prepayment or default of such loans or insurance contracts by the customer, we may be assessed a chargeback for a portion of the commission paid by the third-party financial institutions and insurance companies. We reserve for these chargebacks based on our historical experience with repayments or defaults. Chargebacks were not material to the unaudited condensed consolidated financial statements for the three months ended December 31, 2022 and December 31, 2021. Contract liabilities consist of deferred revenues from marina and storage operations and customer deposits and are classified in customer deposits in the Company’s unaudited condensed consolidated balance sheets. Deposits received from customers are recorded as a liability until the related sales orders have been fulfilled by us and control of the vessel or part/accessory is transferred to the customer. The activity in customer deposits for the three months ended December 31, 2022 is as follows: ($ in thousands) Three Months Ended December 31, 2022 Beginning contract liability $ 65,460 Revenue recognized from contract liabilities included in the beginning balance (42,496 ) Increases due to business combinations and cash received, net of amounts recognized in revenue during the period 37,120 Ending contract liability $ 60,084 The following tables set forth percentages on the timing of revenue recognition for the three months ended December 31, 2022 and 2021. Three Months Ended December 31, 2022 Three Months Ended December 31, 2021 Goods and services transferred at a point in time 92.8 % 93.2 % Goods and services transferred over time 7.2 % 6.8 % 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 and valuation of contingent consideration. Segment Information Effective August 9, 2022, we completed the acquisition of Ocean Bio-Chem, Inc., and Star Brite Europe, Inc (collectively “Ocean Bio-Chem”), which changed management’s reporting structure and operating activities. We now report our operations through two reportable segments: Dealerships and Distribution. The Dealership segment engages in the sale of new and pre-owned boats, arranges financing and insurance products, performs repairs and maintenance services, offers marine related parts and accessories and offers slip and storage accommodations in certain locations. The Distribution segment engages in the manufacturing, assembly and distribution primarily of marine related products to distributors, big box retailers and online retailers through a network of warehouse and distribution centers. Each reporting segment 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 change in reportable segments had no impact on the Company’s previously reported historical consolidated financial statements. |
New Accounting Pronouncements
New Accounting Pronouncements | 3 Months Ended |
Dec. 31, 2022 | |
New Accounting Pronouncements [Abstract] | |
New Accounting Pronouncements | 3. New Accounting Pronouncements 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. Other than as noted above, there are no new accounting pronouncements that are expected to have a material effect on our consolidated financial statements. |
Acquisitions
Acquisitions | 3 Months Ended |
Dec. 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 the fiscal first quarter 2023 acquisitions, 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 three months ended December the Company completed the following transactions: • On October 1, 2022, Taylor Marine Centers with locations in Maryland and Delaware • On December 1, 2022, Harbor View Marine with locations in Alabama and Florida Consideration paid for the acquisitions was $41.8 million with $28.6 million paid at closing, $10.6 million in non-cash financing and the remaining $2.6 million in estimated payments of contingent consideration. The estimated payments of contingent consideration are part of earnouts related to the achievement of certain post-acquisition increases in adjusted EBITDA of the acquired companies. The acquisition contingent consideration was developed using weighted average projections based on the Company’s historical experience and current forecasts for the industry. There are no minimum or maximum payouts on the acquisition contingent consideration. The table below summarizes the preliminary fair values of the assets acquired and liabilities assumed at the acquisition date, including the goodwill recorded as a result of the transaction: Summary of Assets Acquired and Liabilities Assumed ($ in thousands) Total Acquisitions Accounts receivable $ 188 Inventories 6,232 Prepaid expenses 73 Property and equipment 11,587 Operating lease right-of-use assets 2,952 Identifiable intangible assets 8,400 Goodwill 18,880 Accounts payable (17 ) Accrued expenses (354 ) Customer deposits (1,000 ) Notes payable - floor plan (2,228 ) Operating lease liabilities (2,952 ) Aggregate acquisition date fair value $ 41,761 Consideration transferred $ 41,761 In connection with the acquisition of Harbor View Marine, an entity affiliated with the Company agreed to acquire the real estate for the two acquired locations, in effect providing non-cash financing. The Company has accounted for this transaction as a sale and leaseback of the properties in our unaudited condensed consolidated financial statements. There was no gain or loss recorded as part of the transaction. The leases for the two properties include an initial term of 15 years and two, five-year renewal options. The leases are accounted for as an operating leases and are included in the operating lease right-of-use assets and operating lease liabilities on the unaudited condensed consolidated balance sheet. We expect substantially all of the goodwill related to acquisitions completed during the three months ended December 31, 2022 to be deductible for federal income tax purposes. The fair value of trade name intangible assets as of the acquisition date were determined using the relief from royalty model. Included in our results for the three months ended December 31, 2022, the acquisitions contributed $8.7 million to our consolidated revenue and $0.5 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 $0.8 for the three months ended December 31, 2022. Comparatively, we recorded $3.0 million in acquisition related transaction costs for the three months ended December 31, 2021. The following unaudited pro forma summary presents consolidated information as if all acquisitions in the three-month period ended December 31, 2022 and 2021 had occurred on October 1, 2021: Three Months Ended December 31, 2022 Three Months Ended December 31, 2021 ($ in thousands) (Unaudited) Pro forma revenue $ 369,363 $ 428,136 Pro forma net income $ 11,542 $ 25,916 The amounts have been calculated by applying our accounting policies and estimates. Pro forma net income has been tax affected based on the Company’s effective tax rate in the historical periods presented. |
Accounts Receivable
Accounts Receivable | 3 Months Ended |
Dec. 31, 2022 | |
Accounts Receivable [Abstract] | |
Accounts Receivable | 5. Accounts Receivable Accounts receivable primarily consists of trade accounts receivable, contracts in transit and manufacturer receivables. Trade receivables include amounts due from customers on the sale of boats, parts, service, and storage. Contracts in transit represent anticipated funding from the loan agreement customers execute at the dealership when they purchase their new or pre-owned boat. These finance contracts are typically funded within 30 days. Amounts due from manufacturers represent receivables for various manufacturer incentive programs and parts and service work performed pursuant to the manufacturers’ warranties. The allowance for credit losses is estimated based on past collection experience, current conditions and reasonable and supportable forecasts. The activity for charges and subsequent recoveries is immaterial. Accounts receivable consisted of the following: ($ in thousands) December 31, 2022 September 30, 2022 Trade accounts receivable $ 43,143 $ 37,359 Contracts in transit 15,044 14,543 Manufacturer receivable 6,365 7,224 Total accounts receivable 64,552 59,126 Less – allowance for credit losses (939 ) (1,166 ) Total accounts receivable, net $ 63,613 $ 57,960 |
Inventories
Inventories | 3 Months Ended |
Dec. 31, 2022 | |
Inventories [Abstract] | |
Inventories | 6. Inventories Inventories consisted of the following at: ($ in thousands) December 31, 2022 September 30, 2022 New vessels $ 388,004 $ 243,090 Pre-owned vessels 61,658 51,607 Work in process, parts and accessories 77,361 78,262 $ 527,023 $ 372,959 |
Goodwill and Other Identifiable
Goodwill and Other Identifiable Intangible Assets | 3 Months Ended |
Dec. 31, 2022 | |
Goodwill and Other Identifiable Intangible Assets [Abstract] | |
Goodwill and Other Identifiable Intangible Assets | 7. 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. Intangible assets consist of internally developed software, domain names and other identifiable intangible assets such as trade names, developed technologies, including 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 Unamortized Trade Names Unamortized Developed technologies Amortized Customer Relationships Amortized Domain Names Amortized Internally Developed Software Amortized Total Intangible Assets, net Net balance as of September 30, 2022 378,588 186,779 14,274 101,230 1,970 2,218 306,471 Acquisitions during the three months ended December 31, 2022 18,880 8,400 - - - - 8,400 Accumulated amortization for the three months ended December 31, 2022 - - (386 ) (2,687 ) (104 ) (115 ) (3,292 ) Net balance as of December 31, 2022 $ 397,468 $ 195,179 $ 13,888 $ 98,543 $ 1,866 $ 2,103 $ 311,579 Amortization expense was $3.3 million for the three months ended December 31, 2022, and is recorded in depreciation and amortization expense in the unaudited condensed consolidated statements of operations. No amortization expense was recorded for the three months ended December 31, 2021. The following table summarizes the expected amortization expense for fiscal years 2023 through 2027 and thereafter ($ in thousands): 2023 (excluding the three months ended December 31, 2022) $ 9,877 2024 13,170 2025 13,170 2026 13,170 2027 12,982 Thereafter 54,031 $ 116,400 As of December 31, 2022, the carrying value of goodwill totaled $397.5 million, of which $298.9 million was related to our Dealerships reporting segment and $98.6 million was related to our Distribution reporting segment. As of September 30, 2022, the carrying value of goodwill totaled approximately $378.6 million, of which $280.0 million was related to our Dealerships reporting segment and $98.6 million was related to our Distribution reporting segment. |
Notes Payable - Floor Plan
Notes Payable - Floor Plan | 3 Months Ended |
Dec. 31, 2022 | |
Notes Payable - Floor Plan [Abstract] | |
Notes Payable - Floor Plan | 8. 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 $425.4 million and $267.1 million, as of December 31, 2022 and September 30, 2022, respectively. I 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). 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 December 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 | 3 Months Ended |
Dec. 31, 2022 | |
Long-term Debt and Line of Credit [Abstract] | |
Long-term Debt and Line of Credit | 9. Long-term Debt and Line of Credit On August 9, 2022, the Company and certain of its subsidiaries entered into the Amended and Restated Credit Agreement (the “A&R Credit Facility”) with Truist Bank. The A&R Credit Facility provides for a $65.0 million revolving credit facility (the “A&R Revolving Facility”) that may be used for revolving credit loans (including up to $5.0 million in swingline loans and up to $5.0 million in letters of credit) and a $445.0 million term loan (the “A&R Term Loan”). Subject to certain conditions, the available amount under the revolving credit facility and term loans may be increased by $125.0 million in the aggregate. The A&R Credit Facility bears interest at a rate that is equal to Term SOFR plus an applicable margin ranging from 1.75% to 2.75% based on certain consolidated leverage ratio measures. The A&R Revolving Facility matures on August 9, 2027. The A&R Term Loan is repayable in installments beginning December 31, 2022, with the remainder due on August 9, 2027. The A&R Credit Facility is collateralized by certain real and personal property (including certain capital stock) of the Company and its subsidiaries. The collateral does not include inventory and certain other assets of the Company’s subsidiaries financed under the Inventory Financing Facility. The A&R Credit Facility is subject to certain financial covenants related to the maintenance of a minimum fixed charge coverage ratio and a maximum consolidated leverage ratio. The A&R Credit Facility also contains non-financial covenants and restrictive provisions that, among other things, limit the ability of the Company to incur additional debt, transfer or dispose of all of its assets, make certain investments, loans or payments and engage in certain transactions with affiliates. The Company was in compliance with all covenants at December 31, 2022. Long-term debt consisted of the following at: ($ in thousands) December 31, 2022 September 30, 2022 Term note payable to Truist Bank, secured and bearing interest at 6.72 December 31, 2022 5.31 September 30, 2022 August 9, 2027 $ 445,000 $ 445,000 Revolving note payable for an amount up to $ 65.0 6.72 December 31, 2022 August 9, 2027 20,000 - Notes payable to commercial vehicle lenders secured by the value of the vehicles bearing interest at rates ranging from 0.0 8.4 monthly 100 5,600 July 2028 4,586 4,173 Note payable to Tom George Yacht Group, 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 1,126 Total debt outstanding 472,768 452,355 Less current portion (net of debt issuance costs) (29,247 ) (21,642 ) Less unamortized portion of debt issuance costs (8,851 ) (9,551 ) Long-term debt, net of current portion and unamortized debt issuance costs $ 434,670 $ 421,162 |
Stockholders' and Members' Equi
Stockholders' and Members' Equity | 3 Months Ended |
Dec. 31, 2022 | |
Stockholders' and Members' Equity [Abstract] | |
Stockholders' and Members' Equity | 10. 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 1,572,755. 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 three months ended December 31, 2022, the Board approved the grant of 83,036 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 goals. A performance-based restricted stock unit equals one share of common stock of the Company. Of this amount, 13,288 performance-based restricted stock units fully vest on October 1, 2023 and the remaining 69,748 restricted stock units vest in three equal annual installments commencing on October 1, 2023. As of December 31, 2022, During the three months ended December 31, 2022, the Board approved the grant of 131,113 time-based restricted stock units. Of this amount, 19,928 restricted stock units fully vest on October 1, 2023 and the remaining 111,185 restricted stock units vest in three equal annual installments commencing on October 1, 2023. The following table further summarizes activity related to restricted stock units for the three months ended December 31, 2022: Restricted Stock Unit Awards Number of Shares Weighted Average Grant Date Fair Value ($) Unvested at September 30, 2022 559,793 $ 28.01 Awarded 214,149 30.11 Vested (111,075 ) 24.62 Forfeited (1,000 ) 40.21 Unvested at December 31, 2022 661,867 $ 29.24 As of December 31, 2022, the total unrecognized compensation expense related to outstanding equity awards was $10.3 million , which the Company expects to recognize over a weighted-average period of 1.3 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. The following table sets forth the calculation of earnings per share for the three months ended December 31, 2022 and 2021 (in thousands, except per share data): Earnings per share: Three Months Ended December 31, 2022 Three Months Ended December 31, 2021 Numerator: Net income attributable to OneWater Inc. $ 8,900 $ 20,019 Denominator: Weighted-average number of unrestricted outstanding common shares used to calculate basic net income per share 14,297 13,380 Effect of dilutive securities: Restricted stock units 284 381 Employee Stock Purchase Plan 6 - Diluted weighted-average shares of Class A common stock outstanding used to calculate diluted earnings per share 14,587 13,761 Earnings per share of Class A common stock – basic $ 0.62 $ 1.50 Earnings per share of Class A common stock – diluted $ 0.61 $ 1.45 On March 30, 2022, the Board approved an up to $50 million share repurchase program. As of December 31, 2022 the Company has repurchased and retired 10,134 shares of Class A common stock under the repurchase program for a purchase price of approximately $0.4 million. As of December 31, 2022, approximately $49.6 million remained available for future purchase under the repurchase program. The repurchase program does not have a predetermined expiration date. 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 December 31, 2022 Three Months Ended December 31, 2021 Class B common stock 1,430 1,815 Restricted Stock Units 377 233 1,807 2,048 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 449,257 shares of the Company’s Class A common stock may be issued under the ESPP as of December 31, 2022, 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. The first offering period began on July 1, 2022 and the Company recorded equity-based compensation of $0.2 million during the three months ended December 31, 2022. As of December 31, 2022, we had current liabilities of $1.1 million for future purchases of shares under the ESPP. No purchases have been made under the ESPP as of December 31, 2022. We used a Black-Scholes model to estimate the fair value of the options granted to purchase shares issued pursuant to the ESPP. Volatility is based on the historical volatility in our common stock. The risk-free rate for periods within the contractual term of the options is based on the U.S. Treasury yield curve in effect at the time of grant. The following are the weighted-average assumptions used for the period ended December 31, 2022: 2022 Dividend yield 0.0 % Risk-free interest rate 2.5 % Volatility 57.4 % Expected life Six months Distributions During the three months ended December 31, 2022, the Company made distributions to OneWater Unit Holders for certain permitted tax payments. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Dec. 31, 2022 | |
Fair Value Measurements [Abstract] | |
Fair Value Measurements | 11. 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 assets and liabilities measured at fair value in the accompanying unaudited condensed consolidated balance sheets as of December 31, 2022 and September 30, 2022 December 31, 2022 Level 1 Level 2 Level 3 Total ($ in thousands) Assets: Investment in Equity Securities $ 512 $ - $ - $ 512 Liabilities: Contingent Consideration - - 32,817 32,817 September 30, 2022 Level 1 Level 2 Level 3 Total ($ in thousands) Assets: Investment in Equity Securities $ 772 $ - $ - $ 772 Liabilities: Contingent Consideration - - 37,402 37,402 There were no transfers between the valuation hierarchy Levels 1, 2, and 3 for the three months ended December 31, 2022. We measure all equity investments that do not result in consolidation and are not accounted for under the equity method at fair value with the change in fair value included in other expense (income), net, in the unaudited condensed consolidated statements of operations. The fair value of equity investments is measured using quoted prices in its active markets. The investment in equity securities balance is recorded in other assets in the unaudited condensed consolidated balance sheets and consists of a $0.5 million investment in Forza X1, Inc. The portion of unrealized losses recognized related to equity securities still held as of December 31 consists of the following: ($ in thousands) Three Months Ended December 31, 2022 Net losses recognized during the period on equity securities $ 260 Less net losses recognized during the period on equity securities sold during the period - Unrealized losses recognized during the reporting period on equity securities still held at the reporting date $ 260 There were no unrealized gains or losses recognized for the three months ended December 31, 2021 related to equity securities. 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 months ended December 31, 2022: ($ in thousands) Contingent Consideration Balance as of September 30, 2022 $ 37,402 Additions from acquisitions 2,550 Settlement of contingent consideration (5,726 ) Change in fair value, including accretion (1,409 ) Balance as of December 31, 2022 $ 32,817 |
Income Taxes
Income Taxes | 3 Months Ended |
Dec. 31, 2022 | |
Income Taxes [Abstract] | |
Income Taxes | 12. Income Taxes Our effective tax rates of 22.8% and 17.2% for the three months ending December 31, 2022 and 2021, 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 December 31, 2022 and September 30, 2022, 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. In November 2022, the Company received notification that the IRS intends to commence an audit of the federal income tax return of OneWater LLC’s partnership for the tax year ended December 31, 2020. Audit outcomes and the timing of settlements of asserted income tax liabilities, if any, are subject to significant uncertainty 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 December 31, 2022 and September 30, 2022, our liability under the Tax Receivable Agreement was $46.4 million, 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 | 3 Months Ended |
Dec. 31, 2022 | |
Contingencies and Commitments [Abstract] | |
Contingencies and Commitments | 13. 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 | 3 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
Leases | 14. 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 | 3 Months Ended |
Dec. 31, 2022 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 15. Related Party Transactions In accordance with agreements approved by the Board, the Company received fees from certain entities and individuals affiliated with the Company for goods and services. Total fees recorded under these arrangements were $1.2 million and $0.1 million for the three months ended December 31, 2022 and 2021, respectively. In connection with transactions noted above, the Company owed less than $0.1 million and $2.0 million as recorded within accounts payable as of December 31, 2022 December 31, 2022 |
Segment Information
Segment Information | 3 Months Ended |
Dec. 31, 2022 | |
Segment Information [Abstract] | |
Segment Information | 16. Segment Information As of December 31, 2022, we had two reportable segments: (1) Dealerships and (2) Distribution. See Note 2 for more information about our segments. Reportable segment financial information as of and for the three months ended December 31, 2022 are as follows: As of and for the Three Months Ended December 31, 2022 ($ in thousands) Dealerships Distribution Total Revenue $ 326,773 $ 39,886 $ 366,659 Income (loss) from operations 29,853 (3,317 ) 26,536 Depreciation and amortization 1,886 3,807 5,693 Transaction costs 1,182 148 1,330 Change in fair value of contingent consideration (1,543 ) 134 (1,409 ) Total assets 1,283,821 388,272 1,672,093 The Company identified the change in reportable segments as of August 9, 2022 and as such no financial information is presented as of and for the three months ended December 31, 2021. |
Description of Company and Ba_2
Description of Company and Basis of Presentation (Policies) | 3 Months Ended |
Dec. 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 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, 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 December 31, 2022, the Company operated a total of 100 retail locations, 12 distribution centers/warehouses and multiple online marketplaces in 20 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 42.9% and 47.9% of total sales for the three months ended December 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 13.0% and 14.1% of consolidated revenue for the three months ended December 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. Through OneWater LLC and its wholly-owned subsidiaries, as well as majority-owned subsidiaries over which the Company exercises control, OneWater Inc. 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 December 31, 2022, OneWater Inc. owned 90.9% 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, 2022. 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. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Dec. 31, 2022 | |
Summary of Significant Accounting Policies [Abstract] | |
Cash | Cash At times the amount of cash on deposit may exceed the federally insured limit of the bank. Deposit accounts at each of the institutions are insured up to $250,000 by the Federal Deposit Insurance Corporation (FDIC). At December 31, 2022 and September 30, 2022, the Company exceeded FDIC limits at various institutions. The Company has not experienced any losses in such accounts and believes there is little to no exposure to any significant credit risk. |
Restricted Cash | Restricted Cash Restricted cash relates to amounts collected for pre-owned sales, in certain states, which are held in escrow on behalf of the respective buyers and sellers for future purchases of boats. Total customer deposits are shown as a liability on the consolidated balance sheets. These liabilities may be more than the applicable restricted cash balances and fluctuate due to timing differences and because in certain states the deposits are not restricted from use. |
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 acquired, manufactured and assembled parts and accessories is determined using methods which vary by subsidiary and include both the average cost method and first-in, first-out (“FIFO”). |
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, developed technologies, including 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 Company, and therefore, are not subject to amortization. Developed technologies 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. Financial statement risk exists to the extent identifiable intangibles become impaired due to the decrease in the fair value of the identifiable assets. |
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 to the customer. 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) is recognized when control of the item 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 $3.7 million as of December 31, 2022 and September 30, 2022. Certain parts and service transactions require the Company to perform shipping and handling activities after the transfer of control to the customer (e.g., when control transfers prior to delivery). They are considered fulfillment activities and are included in selling, general and administrative expenses. Revenue from storage and marina operations is recognized on a straight-line basis over the term of the contract as services are completed. Revenue from arranging financing, insurance and extended warranty contracts to customers through various third-party financial institutions and insurance companies is recognized when the related boats are sold. We do not directly finance our customers’ boat, motor or trailer purchases. We are acting as an agent in the transaction, therefore the commission is recorded on a net basis. Subject to our agreements and in the event of early cancellation, prepayment or default of such loans or insurance contracts by the customer, we may be assessed a chargeback for a portion of the commission paid by the third-party financial institutions and insurance companies. We reserve for these chargebacks based on our historical experience with repayments or defaults. Chargebacks were not material to the unaudited condensed consolidated financial statements for the three months ended December 31, 2022 and December 31, 2021. Contract liabilities consist of deferred revenues from marina and storage operations and customer deposits and are classified in customer deposits in the Company’s unaudited condensed consolidated balance sheets. Deposits received from customers are recorded as a liability until the related sales orders have been fulfilled by us and control of the vessel or part/accessory is transferred to the customer. The activity in customer deposits for the three months ended December 31, 2022 is as follows: ($ in thousands) Three Months Ended December 31, 2022 Beginning contract liability $ 65,460 Revenue recognized from contract liabilities included in the beginning balance (42,496 ) Increases due to business combinations and cash received, net of amounts recognized in revenue during the period 37,120 Ending contract liability $ 60,084 The following tables set forth percentages on the timing of revenue recognition for the three months ended December 31, 2022 and 2021. Three Months Ended December 31, 2022 Three Months Ended December 31, 2021 Goods and services transferred at a point in time 92.8 % 93.2 % Goods and services transferred over time 7.2 % 6.8 % 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 and valuation of contingent consideration. |
Segment Information | Segment Information Effective August 9, 2022, we completed the acquisition of Ocean Bio-Chem, Inc., and Star Brite Europe, Inc (collectively “Ocean Bio-Chem”), which changed management’s reporting structure and operating activities. We now report our operations through two reportable segments: Dealerships and Distribution. The Dealership segment engages in the sale of new and pre-owned boats, arranges financing and insurance products, performs repairs and maintenance services, offers marine related parts and accessories and offers slip and storage accommodations in certain locations. The Distribution segment engages in the manufacturing, assembly and distribution primarily of marine related products to distributors, big box retailers and online retailers through a network of warehouse and distribution centers. Each reporting segment 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 change in reportable segments had no impact on the Company’s previously reported historical consolidated financial statements. |
New Accounting Pronouncements (
New Accounting Pronouncements (Policies) | 3 Months Ended |
Dec. 31, 2022 | |
New Accounting Pronouncements [Abstract] | |
New Accounting Pronouncements | 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. Other than as noted above, there are no new accounting pronouncements that are expected to have a material effect on our consolidated financial statements. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Dec. 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 months ended December 31, 2022 is as follows: ($ in thousands) Three Months Ended December 31, 2022 Beginning contract liability $ 65,460 Revenue recognized from contract liabilities included in the beginning balance (42,496 ) Increases due to business combinations and cash received, net of amounts recognized in revenue during the period 37,120 Ending contract liability $ 60,084 |
Percentages on Timing of Revenue Recognition | The following tables set forth percentages on the timing of revenue recognition for the three months ended December 31, 2022 and 2021. Three Months Ended December 31, 2022 Three Months Ended December 31, 2021 Goods and services transferred at a point in time 92.8 % 93.2 % Goods and services transferred over time 7.2 % 6.8 % Total Revenue 100.0 % 100.0 % |
Acquisitions (Tables)
Acquisitions (Tables) | 3 Months Ended |
Dec. 31, 2022 | |
Acquisitions [Abstract] | |
Summary of Assets Acquired and Liabilities Assumed | The table below summarizes the preliminary fair values of the assets acquired and liabilities assumed at the acquisition date, including the goodwill recorded as a result of the transaction: Summary of Assets Acquired and Liabilities Assumed ($ in thousands) Total Acquisitions Accounts receivable $ 188 Inventories 6,232 Prepaid expenses 73 Property and equipment 11,587 Operating lease right-of-use assets 2,952 Identifiable intangible assets 8,400 Goodwill 18,880 Accounts payable (17 ) Accrued expenses (354 ) Customer deposits (1,000 ) Notes payable - floor plan (2,228 ) Operating lease liabilities (2,952 ) Aggregate acquisition date fair value $ 41,761 Consideration transferred $ 41,761 |
Unaudited Pro Forma Results of Operations | The following unaudited pro forma summary presents consolidated information as if all acquisitions in the three-month period ended December 31, 2022 and 2021 had occurred on October 1, 2021: Three Months Ended December 31, 2022 Three Months Ended December 31, 2021 ($ in thousands) (Unaudited) Pro forma revenue $ 369,363 $ 428,136 Pro forma net income $ 11,542 $ 25,916 |
Accounts Receivable (Tables)
Accounts Receivable (Tables) | 3 Months Ended |
Dec. 31, 2022 | |
Accounts Receivable [Abstract] | |
Accounts Receivable | Accounts receivable consisted of the following: ($ in thousands) December 31, 2022 September 30, 2022 Trade accounts receivable $ 43,143 $ 37,359 Contracts in transit 15,044 14,543 Manufacturer receivable 6,365 7,224 Total accounts receivable 64,552 59,126 Less – allowance for credit losses (939 ) (1,166 ) Total accounts receivable, net $ 63,613 $ 57,960 |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Dec. 31, 2022 | |
Inventories [Abstract] | |
Inventories | Inventories consisted of the following at: ($ in thousands) December 31, 2022 September 30, 2022 New vessels $ 388,004 $ 243,090 Pre-owned vessels 61,658 51,607 Work in process, parts and accessories 77,361 78,262 $ 527,023 $ 372,959 |
Goodwill and Other Identifiab_2
Goodwill and Other Identifiable Intangible Assets (Tables) | 3 Months Ended |
Dec. 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 Unamortized Trade Names Unamortized Developed technologies Amortized Customer Relationships Amortized Domain Names Amortized Internally Developed Software Amortized Total Intangible Assets, net Net balance as of September 30, 2022 378,588 186,779 14,274 101,230 1,970 2,218 306,471 Acquisitions during the three months ended December 31, 2022 18,880 8,400 - - - - 8,400 Accumulated amortization for the three months ended December 31, 2022 - - (386 ) (2,687 ) (104 ) (115 ) (3,292 ) Net balance as of December 31, 2022 $ 397,468 $ 195,179 $ 13,888 $ 98,543 $ 1,866 $ 2,103 $ 311,579 |
Expected Amortization Expense | The following table summarizes the expected amortization expense for fiscal years 2023 through 2027 and thereafter ($ in thousands): 2023 (excluding the three months ended December 31, 2022) $ 9,877 2024 13,170 2025 13,170 2026 13,170 2027 12,982 Thereafter 54,031 $ 116,400 |
Long-term Debt and Line of Cr_2
Long-term Debt and Line of Credit (Tables) | 3 Months Ended |
Dec. 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) December 31, 2022 September 30, 2022 Term note payable to Truist Bank, secured and bearing interest at 6.72 December 31, 2022 5.31 September 30, 2022 August 9, 2027 $ 445,000 $ 445,000 Revolving note payable for an amount up to $ 65.0 6.72 December 31, 2022 August 9, 2027 20,000 - Notes payable to commercial vehicle lenders secured by the value of the vehicles bearing interest at rates ranging from 0.0 8.4 monthly 100 5,600 July 2028 4,586 4,173 Note payable to Tom George Yacht Group, 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 1,126 Total debt outstanding 472,768 452,355 Less current portion (net of debt issuance costs) (29,247 ) (21,642 ) Less unamortized portion of debt issuance costs (8,851 ) (9,551 ) Long-term debt, net of current portion and unamortized debt issuance costs $ 434,670 $ 421,162 |
Stockholders' and Members' Eq_2
Stockholders' and Members' Equity (Tables) | 3 Months Ended |
Dec. 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 three months ended December 31, 2022: Restricted Stock Unit Awards Number of Shares Weighted Average Grant Date Fair Value ($) Unvested at September 30, 2022 559,793 $ 28.01 Awarded 214,149 30.11 Vested (111,075 ) 24.62 Forfeited (1,000 ) 40.21 Unvested at December 31, 2022 661,867 $ 29.24 |
Calculation of Earnings per share | The following table sets forth the calculation of earnings per share for the three months ended December 31, 2022 and 2021 (in thousands, except per share data): Earnings per share: Three Months Ended December 31, 2022 Three Months Ended December 31, 2021 Numerator: Net income attributable to OneWater Inc. $ 8,900 $ 20,019 Denominator: Weighted-average number of unrestricted outstanding common shares used to calculate basic net income per share 14,297 13,380 Effect of dilutive securities: Restricted stock units 284 381 Employee Stock Purchase Plan 6 - Diluted weighted-average shares of Class A common stock outstanding used to calculate diluted earnings per share 14,587 13,761 Earnings per share of Class A common stock – basic $ 0.62 $ 1.50 Earnings per share of Class A common stock – diluted $ 0.61 $ 1.45 |
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 December 31, 2022 Three Months Ended December 31, 2021 Class B common stock 1,430 1,815 Restricted Stock Units 377 233 1,807 2,048 |
Weighted Average Assumptions | The following are the weighted-average assumptions used for the period ended December 31, 2022: 2022 Dividend yield 0.0 % Risk-free interest rate 2.5 % Volatility 57.4 % Expected life Six months |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Dec. 31, 2022 | |
Fair Value Measurements [Abstract] | |
Financial Assets and Liabilities Measured at Fair Value | The following tables summarize the Company’s financial assets and liabilities measured at fair value in the accompanying unaudited condensed consolidated balance sheets as of December 31, 2022 and September 30, 2022 December 31, 2022 Level 1 Level 2 Level 3 Total ($ in thousands) Assets: Investment in Equity Securities $ 512 $ - $ - $ 512 Liabilities: Contingent Consideration - - 32,817 32,817 September 30, 2022 Level 1 Level 2 Level 3 Total ($ in thousands) Assets: Investment in Equity Securities $ 772 $ - $ - $ 772 Liabilities: Contingent Consideration - - 37,402 37,402 |
Unrealized Losses Recognized Related to Equity Securities | The portion of unrealized losses recognized related to equity securities still held as of December 31 consists of the following: ($ in thousands) Three Months Ended December 31, 2022 Net losses recognized during the period on equity securities $ 260 Less net losses recognized during the period on equity securities sold during the period - Unrealized losses recognized during the reporting period on equity securities still held at the reporting date $ 260 |
Changes in Fair Value of Contingent Consideration | The following table sets forth the changes in fair value of our contingent consideration for the three months ended December 31, 2022: ($ in thousands) Contingent Consideration Balance as of September 30, 2022 $ 37,402 Additions from acquisitions 2,550 Settlement of contingent consideration (5,726 ) Change in fair value, including accretion (1,409 ) Balance as of December 31, 2022 $ 32,817 |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Dec. 31, 2022 | |
Segment Information [Abstract] | |
Reportable Segment Financial Information | Reportable segment financial information as of and for the three months ended December 31, 2022 are as follows: As of and for the Three Months Ended December 31, 2022 ($ in thousands) Dealerships Distribution Total Revenue $ 326,773 $ 39,886 $ 366,659 Income (loss) from operations 29,853 (3,317 ) 26,536 Depreciation and amortization 1,886 3,807 5,693 Transaction costs 1,182 148 1,330 Change in fair value of contingent consideration (1,543 ) 134 (1,409 ) Total assets 1,283,821 388,272 1,672,093 |
Description of Company and Ba_3
Description of Company and Basis of Presentation, Description of the Business (Details) | 3 Months Ended | |
Dec. 31, 2022 State Center Brand Location | Dec. 31, 2021 | |
Description of the Business [Abstract] | ||
Number of retail locations | Location | 100 | |
Number of distribution centers | Center | 12 | |
Number of states in which business operating | State | 20 | |
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 | 42.90% | 47.90% |
Sales Revenue [Member] | Product Concentration Risk [Member] | Malibu Boats, Inc [Member] | ||
Description of the Business [Abstract] | ||
Concentration risk percentage | 13% | 14.10% |
Description of Company and Ba_4
Description of Company and Basis of Presentation, Principles of Consolidation (Details) | Dec. 31, 2022 | Dec. 31, 2021 |
Principles of Consolidation [Abstract] | ||
Economic interest of quality assets and operations | 80% | |
OneWater LLC [Member] | ||
Principles of Consolidation [Abstract] | ||
Ownership interest in subsidiaries | 90.90% |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies, Cash (Details) - USD ($) | Dec. 31, 2022 | Sep. 30, 2022 |
Cash [Abstract] | ||
Cash deposit | $ 250,000 | $ 250,000 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies, Goodwill and Other Identifiable Intangible Assets (Details) | 3 Months Ended |
Dec. 31, 2022 | |
Goodwill and Other Identifiable Intangible Assets [Abstract] | |
Estimated useful lives of assets | 10 years |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies, Revenue Recognition (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2022 | |
Contract Asset [Abstract] | |||
Contract asset | $ 3,700 | $ 3,700 | |
Contract Liability [Abstract] | |||
Beginning contract liability | 65,460 | ||
Revenue recognized from contract liabilities included in the beginning balance | (42,496) | ||
Increases due to business combinations and cash received, net of amounts recognized in revenue during the period | 37,120 | ||
Ending contract liability | $ 60,084 | ||
Timing of Revenue [Abstract] | |||
Percentage on timing of revenue recognition | 100% | 100% | |
Goods and Services Transferred at a Point in Time [Member] | |||
Timing of Revenue [Abstract] | |||
Percentage on timing of revenue recognition | 92.80% | 93.20% | |
Goods and Services Transferred Over Time [Member] | |||
Timing of Revenue [Abstract] | |||
Percentage on timing of revenue recognition | 7.20% | 6.80% |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies, Segment Information (Details) | 3 Months Ended |
Dec. 31, 2022 Segment | |
Segment Information [Abstract] | |
Number of operating segments | 2 |
Acquisitions (Details)
Acquisitions (Details) $ in Thousands | 3 Months Ended | ||
Dec. 31, 2022 USD ($) Location Renewaloption | Dec. 31, 2021 USD ($) | Sep. 30, 2022 USD ($) | |
Acquisition [Abstract] | |||
Cash paid for acquisition | $ 28,611 | $ 278,798 | |
Payment of contingent consideration | 2,600 | ||
Acquisition purchase price funded by affiliate financing | 10,600 | 0 | |
Minimum payout due of contingent consideration | 0 | ||
Maximum payout due of contingent consideration | $ 0 | ||
Number of retail locations | Location | 100 | ||
Number of lease renewal options | Renewaloption | 2 | ||
Summary of Assets Acquired and Liabilities Assumed [Abstract] | |||
Goodwill | $ 397,468 | $ 378,588 | |
Consideration transferred | 41,800 | ||
Revenue | 366,659 | 336,272 | |
Income before income tax expense | 14,812 | 28,375 | |
Costs related to acquisition | 800 | 3,000 | |
Unaudited Pro Forma Results of Operations [Abstract] | |||
Pro forma revenue | 369,363 | 428,136 | |
Pro forma net income | 11,542 | $ 25,916 | |
Total Acquisitions [Member] | |||
Summary of Assets Acquired and Liabilities Assumed [Abstract] | |||
Accounts receivable | 188 | ||
Inventories | 6,232 | ||
Prepaid expenses | 73 | ||
Property and equipment | 11,587 | ||
Operating lease right-of-use assets | 2,952 | ||
Identifiable intangible assets | 8,400 | ||
Goodwill | 18,880 | ||
Accounts payable | (17) | ||
Accrued expenses | (354) | ||
Customer deposits | (1,000) | ||
Operating lease liabilities | (2,952) | ||
Notes payable - floor plan | (2,228) | ||
Aggregate acquisition date fair value | 41,761 | ||
Consideration transferred | 41,761 | ||
Revenue | 8,700 | ||
Income before income tax expense | $ 500 | ||
Harbor View Marine Acquisition [Member] | |||
Acquisition [Abstract] | |||
Number of retail locations | Location | 2 | ||
Gain (loss) on sale and leaseback transaction | $ 0 | ||
Initial lease contract term | 15 years | ||
Lease renewal option term | 5 years |
Accounts Receivable (Details)
Accounts Receivable (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2022 | Sep. 30, 2022 | |
Accounts Receivable [Abstract] | ||
Finance contracts maximum funding period | 30 days | |
Total accounts receivable | $ 64,552 | $ 59,126 |
Less - allowance for credit losses | (939) | (1,166) |
Total accounts receivable, net | 63,613 | 57,960 |
Trade Accounts Receivable [Member] | ||
Accounts Receivable [Abstract] | ||
Total accounts receivable | 43,143 | 37,359 |
Contracts in Transit [Member] | ||
Accounts Receivable [Abstract] | ||
Total accounts receivable | 15,044 | 14,543 |
Manufacturer Receivable [Member] | ||
Accounts Receivable [Abstract] | ||
Total accounts receivable | $ 6,365 | $ 7,224 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Sep. 30, 2022 |
Component of Inventory [Abstract] | ||
Inventories, net | $ 527,023 | $ 372,959 |
New Vessels [Member] | ||
Component of Inventory [Abstract] | ||
Inventories, net | 388,004 | 243,090 |
Pre-owned Vessels [Member] | ||
Component of Inventory [Abstract] | ||
Inventories, net | 61,658 | 51,607 |
Work in Process, Parts and Accessories [Member] | ||
Component of Inventory [Abstract] | ||
Inventories, net | $ 77,361 | $ 78,262 |
Goodwill and Other Identifiab_3
Goodwill and Other Identifiable Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Goodwill [Abstract] | ||
Net balance - beginning of period | $ 378,588 | |
Acquisitions during the three months ended December 31, 2022 | 18,880 | |
Net balance - end of period | 397,468 | |
Intangible Assets [Abstract] | ||
Net balance - beginning of period | 306,471 | |
Acquisitions during the three months ended December 31, 2022 | 8,400 | |
Accumulated amortization for the three months ended December 31, 2022 | (3,292) | $ 0 |
Net balance - end of period | 311,579 | |
Expected Amortization Expense [Abstract] | ||
2023 (excluding the three months ended December 31, 2022) | 9,877 | |
2024 | 13,170 | |
2025 | 13,170 | |
2026 | 13,170 | |
2027 | 12,982 | |
Thereafter | 54,031 | |
Finite-Lived Intangible Assets, Net | 116,400 | |
Dealerships [Member] | ||
Goodwill [Abstract] | ||
Net balance - beginning of period | 280,000 | |
Net balance - end of period | 298,900 | |
Distribution [Member] | ||
Goodwill [Abstract] | ||
Net balance - beginning of period | 98,600 | |
Net balance - end of period | 98,600 | |
Developed Technologies [Member] | ||
Intangible Assets [Abstract] | ||
Net balance - beginning of period | 14,274 | |
Acquisitions during the three months ended December 31, 2022 | 0 | |
Accumulated amortization for the three months ended December 31, 2022 | (386) | |
Net balance - end of period | 13,888 | |
Customer Relationships [Member] | ||
Intangible Assets [Abstract] | ||
Net balance - beginning of period | 101,230 | |
Acquisitions during the three months ended December 31, 2022 | 0 | |
Accumulated amortization for the three months ended December 31, 2022 | (2,687) | |
Net balance - end of period | 98,543 | |
Domain Names [Member] | ||
Intangible Assets [Abstract] | ||
Net balance - beginning of period | 1,970 | |
Acquisitions during the three months ended December 31, 2022 | 0 | |
Accumulated amortization for the three months ended December 31, 2022 | (104) | |
Net balance - end of period | 1,866 | |
Internally Developed Software [Member] | ||
Intangible Assets [Abstract] | ||
Net balance - beginning of period | 2,218 | |
Acquisitions during the three months ended December 31, 2022 | 0 | |
Accumulated amortization for the three months ended December 31, 2022 | (115) | |
Net balance - end of period | 2,103 | |
Trade Names [Member] | ||
Intangible Assets [Abstract] | ||
Net balance - beginning of period | 186,779 | |
Acquisitions during the three months ended December 31, 2022 | 8,400 | |
Net balance - end of period | $ 195,179 |
Notes Payable - Floor Plan (Det
Notes Payable - Floor Plan (Details) - Inventory Financing Facility [Member] - USD ($) $ in Millions | 3 Months Ended | ||
Dec. 31, 2022 | Sep. 30, 2022 | Dec. 29, 2021 | |
Line of Credit Facility [Abstract] | |||
Maximum borrowing capacity | $ 500 | ||
Outstanding balance of facility | $ 425.4 | $ 267.1 | |
Credit facility, available borrowing capacity | $ 74.6 | $ 232.9 | |
New Inventory [Member] | Minimum [Member] | |||
Line of Credit Facility [Abstract] | |||
Credit facility, interest rate | 6.93% | 5.33% | |
New Inventory [Member] | Maximum [Member] | |||
Line of Credit Facility [Abstract] | |||
Credit facility, interest rate | 9.18% | 7.58% | |
Pre-owned Inventory [Member] | Minimum [Member] | |||
Line of Credit Facility [Abstract] | |||
Credit facility, interest rate | 7.18% | 5.58% | |
Pre-owned Inventory [Member] | Maximum [Member] | |||
Line of Credit Facility [Abstract] | |||
Credit facility, interest rate | 9.43% | 7.83% | |
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% | ||
Boat Rate [Member] | New Boats [Member] | |||
Line of Credit Facility [Abstract] | |||
Debt instrument, variable interest rate | 0.25% | ||
Wells Fargo [Member] | |||
Line of Credit Facility [Abstract] | |||
Percentage of finance provided of vendor invoice price | 100% |
Long-term Debt and Line of Cr_3
Long-term Debt and Line of Credit (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Aug. 09, 2022 | Dec. 31, 2022 | Sep. 30, 2022 | |
Long-term Debt and Line of Credit [Abstract] | |||
Long-term debt, gross | $ 472,768 | $ 452,355 | |
Less current portion (net of debt issuance costs) | (29,247) | (21,642) | |
Less unamortized portion of debt issuance costs | (8,851) | (9,551) | |
Long-term debt, net of current portion and unamortized debt issuance costs | $ 434,670 | $ 421,162 | |
A&R Term Loan [Member] | |||
Long-term Debt and Line of Credit [Abstract] | |||
Aggregate principal amount | $ 445,000 | ||
Term Note Payable to Truist Bank, Secured and Bearing Interest at 6.72% at December 31, 2022 and 5.31% at September 30, 2022. The Note Requires Quarterly Principal Payments Commencing on December 31, 2022 and Maturing with a Full Repayment on August 9, 2027 [Member] | |||
Long-term Debt and Line of Credit [Abstract] | |||
Interest rate | 6.72% | 5.31% | |
Maturity date | Aug. 09, 2027 | ||
Long-term debt, gross | $ 445,000 | $ 445,000 | |
Revolving Note Payable for an Amount up to $65.0 Million to Truist Bank, Secured and Bearing Interest at 6.72% at December 31, 2022. The Note Requires Full Repayment on August 9, 2027 [Member] | |||
Long-term Debt and Line of Credit [Abstract] | |||
Aggregate principal amount | $ 65,000 | ||
Interest rate | 6.72% | ||
Maturity date | Aug. 09, 2027 | ||
Long-term debt, gross | $ 20,000 | 0 | |
Notes Payable to Commercial Vehicle Lenders Secured by the Value of the Vehicles Bearing Interest at Rates Ranging from 0.0% to 8.4% 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 | $ 4,586 | 4,173 | |
Notes Payable to Commercial Vehicle Lenders Secured by the Value of the Vehicles Bearing Interest at Rates Ranging from 0.0% to 8.4% 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% | ||
Monthly installment payment amount | $ 100 | ||
Notes Payable to Commercial Vehicle Lenders Secured by the Value of the Vehicles Bearing Interest at Rates Ranging from 0.0% to 8.4% 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 | 8.40% | ||
Monthly installment payment amount | $ 5,600 | ||
Note Payable To Tom George Yacht Group, Unsecured and Bearing Interest At 5.5% Per Annum. The Note Requires Monthly 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. 01, 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% | ||
Maturity date | Dec. 01, 2024 | ||
Long-term debt, gross | $ 1,126 | $ 1,126 | |
A&R Credit Facility [Member] | |||
Long-term Debt and Line of Credit [Abstract] | |||
Aggregate principal amount | 65,000 | ||
Increase in revolving commitment | $ 125,000 | ||
Maturity date | Aug. 09, 2027 | ||
A&R Credit Facility [Member] | Letter of Credit [Member] | |||
Long-term Debt and Line of Credit [Abstract] | |||
Aggregate principal amount | $ 5,000 | ||
A&R Credit Facility [Member] | Swingline Loans [Member] | |||
Long-term Debt and Line of Credit [Abstract] | |||
Aggregate principal amount | $ 5,000 | ||
A&R Credit Facility [Member] | Term SOFR [Member] | Minimum [Member] | |||
Long-term Debt and Line of Credit [Abstract] | |||
Debt instrument, variable interest rate | 1.75% | ||
A&R Credit Facility [Member] | Term SOFR [Member] | Maximum [Member] | |||
Long-term Debt and Line of Credit [Abstract] | |||
Debt instrument, variable interest rate | 2.75% |
Stockholders' and Members' Eq_3
Stockholders' and Members' Equity, Equity-Based Compensation (Details) $ / shares in Units, $ in Millions | 3 Months Ended | ||||
Oct. 02, 2023 shares | Oct. 01, 2023 Intallment shares | Dec. 31, 2022 USD ($) $ / shares shares | Dec. 31, 2021 USD ($) | Feb. 11, 2020 shares | |
Equity-Based Compensation [Abstract] | |||||
Percentage of expected performance targets to be achieved target award | 100% | ||||
Class A Common Stock [Member] | |||||
Equity-Based Compensation [Abstract] | |||||
Total number of shares reserved for issuance (in shares) | 1,572,755 | ||||
Restricted Stock Units (RSUs) [Member] | |||||
Equity-Based Compensation [Abstract] | |||||
Compensation expense | $ | $ 2.3 | $ 2.1 | |||
Number of Shares [Abstract] | |||||
Beginning balance (in shares) | 559,793 | ||||
Awarded (in shares) | 214,149 | ||||
Vested (in shares) | (111,075) | ||||
Forfeited (in shares) | (1,000) | ||||
Ending balance (in shares) | 661,867 | ||||
Weighted Average Grant Date Fair Value [Abstract] | |||||
Beginning balance (in dollars per share) | $ / shares | $ 28.01 | ||||
Awarded (in dollars per share) | $ / shares | 30.11 | ||||
Vested (in dollars per share) | $ / shares | 24.62 | ||||
Forfeited (in dollars per share) | $ / shares | 40.21 | ||||
Ending balance (in dollars per share) | $ / shares | $ 29.24 | ||||
Unrecognized compensation expense | $ | $ 10.3 | ||||
Weighted-average period of recognition | 1 year 3 months 18 days | ||||
Time-Based Restricted Stock Units [Member] | |||||
Number of Shares [Abstract] | |||||
Awarded (in shares) | 131,113 | ||||
Time-Based Restricted Stock Units [Member] | Plan [Member] | |||||
Equity-Based Compensation [Abstract] | |||||
Number of equal annual installments for vesting | Intallment | 3 | ||||
Number of Shares [Abstract] | |||||
Awarded (in shares) | 19,928 | 111,185 | |||
Performance Share Unit [Member] | |||||
Equity-Based Compensation [Abstract] | |||||
Percentage of target award granted | 100% | ||||
Number of shares of common stock consisted in each unit (in shares) | 1 | ||||
Compensation expense | $ | $ 1.1 | $ 1 | |||
Number of Shares [Abstract] | |||||
Awarded (in shares) | 83,036 | ||||
Performance Share Unit [Member] | Plan [Member] | |||||
Equity-Based Compensation [Abstract] | |||||
Number of equal annual installments for vesting | Intallment | 3 | ||||
Number of Shares [Abstract] | |||||
Awarded (in shares) | 69,748 | 13,288 |
Stockholders' and Members' Eq_4
Stockholders' and Members' Equity, Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Mar. 30, 2022 | |
Numerator [Abstract] | |||
Net income attributable to OneWater Inc. | $ 8,900 | $ 20,019 | |
Effect of dilutive securities [Abstract] | |||
Share repurchase program authorized amount | $ 50,000 | ||
Remaining amount available for future purchase | $ 49,600 | ||
Common Class A [Member] | |||
Denominator [Abstract] | |||
Weighted-average number of unrestricted outstanding common shares used to calculate basic net income per share (in shares) | 14,297 | 13,380 | |
Effect of dilutive securities [Abstract] | |||
Restricted stock units (in shares) | 284 | 381 | |
Diluted weighted-average shares of Class A common stock outstanding used to calculate diluted earnings per share (in shares) | 14,587 | 13,761 | |
Earnings per share of Class A common stock - basic (in dollars per share) | $ 0.62 | $ 1.5 | |
Earnings per share of Class A common stock - diluted (in dollars per share) | $ 0.61 | $ 1.45 | |
Number of shares repurchased and retired (in shares) | 10,134 | ||
Shares repurchased and retired | $ 400 | ||
Common Class A [Member] | Employee Stock Purchase Plan [Member] | |||
Effect of dilutive securities [Abstract] | |||
Restricted stock units (in shares) | 6 | 0 |
Stockholders' and Members' Eq_5
Stockholders' and Members' Equity, Antidilutive Securities (Details) - shares shares in Thousands | 3 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Antidilutive Securities [Abstract] | ||
Antidilutive securities excluded from computation of diluted weighted average shares (in shares) | 1,807 | 2,048 |
Restricted Stock Units [Member] | ||
Antidilutive Securities [Abstract] | ||
Antidilutive securities excluded from computation of diluted weighted average shares (in shares) | 377 | 233 |
Common Class B [Member] | ||
Antidilutive Securities [Abstract] | ||
Antidilutive securities excluded from computation of diluted weighted average shares (in shares) | 1,430 | 1,815 |
Stockholders' and Members' Eq_6
Stockholders' and Members' Equity, Employee Stock Purchase Plan (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Feb. 23, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Employee Stock Purchase Plan [Abstract] | |||
Equity-based compensation | $ 2,572 | $ 2,100 | |
Weighted Average Assumptions [Abstract] | |||
Dividend yield | 0% | ||
Risk-free interest rate | 2.50% | ||
Volatility | 57.40% | ||
Expected life | 6 months | ||
Employee Stock Purchase Plan [Member] | |||
Employee Stock Purchase Plan [Abstract] | |||
Equity-based compensation | $ 200 | ||
Shares purchased under employee stock purchase plan | 0 | ||
Stock to be purchased under ESPP | $ 1,100 | ||
Common Class A [Member] | |||
Employee Stock Purchase Plan [Abstract] | |||
Percentage of outstanding shares, ESPP issuance | 1% | ||
Common Class A [Member] | Maximum [Member] | |||
Employee Stock Purchase Plan [Abstract] | |||
ESPP shares issuance (in shares) | 449,257 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2022 | |
Unrealized Losses Recognized Related to Equity Securities [Abstract] | |||
Net losses recognized during the period on equity securities | $ 260 | $ 0 | |
Less: net losses recognized during the period on equity securities sold during the period | 0 | ||
Unrealized losses recognized during the reporting period on equity securities still held at the reporting date | 260 | ||
Other Assets [Member] | |||
Assets [Abstract] | |||
Investment in Equity Securities | 500 | ||
Fair Value [Member] | |||
Assets [Abstract] | |||
Investment in Equity Securities | 512 | $ 772 | |
Liabilities [Abstract] | |||
Contingent Consideration | 32,817 | 37,402 | |
Fair Value [Member] | Level 1 [Member] | |||
Assets [Abstract] | |||
Investment in Equity Securities | 512 | 772 | |
Liabilities [Abstract] | |||
Contingent Consideration | 0 | 0 | |
Fair Value [Member] | Level 2 [Member] | |||
Assets [Abstract] | |||
Investment in Equity Securities | 0 | 0 | |
Liabilities [Abstract] | |||
Contingent Consideration | 0 | 0 | |
Fair Value [Member] | Level 3 [Member] | |||
Assets [Abstract] | |||
Investment in Equity Securities | 0 | 0 | |
Liabilities [Abstract] | |||
Contingent Consideration | 32,817 | $ 37,402 | |
Contingent Consideration [Member] | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Beginning balance | 37,402 | ||
Additions from acquisitions | 2,550 | ||
Settlement of contingent consideration | (5,726) | ||
Change in fair value, including accretion | (1,409) | ||
Ending balance | $ 32,817 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2022 | |
Effective Income Tax Rate Reconciliation [Abstract] | |||
Effective tax rate | 22.80% | 17.20% | |
Tax receivable agreement liability | $ 46.4 | $ 46.4 | |
Percentage of net cash savings | 85% |
Leases (Details)
Leases (Details) | 3 Months Ended |
Dec. 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 ($) $ in Millions | 3 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2022 | |
Related Party Transactions [Abstract] | |||
Due to related parties | $ 2 | ||
Due from related parties | $ 3.2 | $ 0.2 | |
Maximum [Member] | |||
Related Party Transactions [Abstract] | |||
Due to related parties | 0.1 | ||
Affiliated Entities [Member] | |||
Related Party Transactions [Abstract] | |||
Purchase of inventories | 21.3 | $ 33.3 | |
Expenses incurred | 0.5 | 0.7 | |
Affiliated Entities and Individuals [Member] | |||
Related Party Transactions [Abstract] | |||
Fees received for goods and services | 1.2 | 0.1 | |
Payments and fees, related party | $ 0 | $ 0.1 |
Segment Information (Details)
Segment Information (Details) $ in Thousands | 3 Months Ended | ||
Dec. 31, 2022 USD ($) Segment | Dec. 31, 2021 USD ($) | Sep. 30, 2022 USD ($) | |
Segment Information [Abstract] | |||
Number of reportable segments | Segment | 2 | ||
Revenue | $ 366,659 | $ 336,272 | |
Income (loss) from operations | 26,536 | 31,329 | |
Depreciation and amortization | 5,693 | 1,749 | |
Transaction costs | 1,330 | 3,045 | |
Change in fair value of contingent consideration | (1,409) | $ 5,746 | |
Total assets | 1,672,093 | $ 1,497,428 | |
Operating Segments [Member] | Dealerships [Member] | |||
Segment Information [Abstract] | |||
Revenue | 326,773 | ||
Income (loss) from operations | 29,853 | ||
Depreciation and amortization | 1,886 | ||
Transaction costs | 1,182 | ||
Change in fair value of contingent consideration | (1,543) | ||
Total assets | 1,283,821 | ||
Operating Segments [Member] | Distribution [Member] | |||
Segment Information [Abstract] | |||
Revenue | 39,886 | ||
Income (loss) from operations | (3,317) | ||
Depreciation and amortization | 3,807 | ||
Transaction costs | 148 | ||
Change in fair value of contingent consideration | 134 | ||
Total assets | $ 388,272 |