What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-07-24 compared with 2025-04-24 · 92 added, 54 removed, 139 unchanged (51% of the section changed)

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These forward-looking statements include statements relating to market risks such as interest rate risk and foreign currency exchange rate risk;

economic and industry conditions and corresponding effects on consumer behavior and our operating results;

economic and industry conditions and corresponding effects on

consumer behavior and our operating results;

environmental conditions;

the imposition of tariffs and their potential impacts on our operations and the broader economy;

inclement weather;

inclement weather and our ability to mitigate impacts of adverse weather conditions through geographic diversity;

certain specific and isolated events;

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and its subsidiaries.

We believe we are the world’s largest recreational boat, yacht and superyacht services company.

We believe we are the world’s largest recreational boat and yacht retailer, marina operator and superyacht services company.

Through our over 70 retail locations in 21 states, we sell new and used recreational boats and related marine products, including engines, trailers, parts, and accessories.

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In October 2023, we acquired a controlling interest of AGY, a luxury charter management agency based in Athens, Greece.

In March 2024, we acquired Williams Tenders USA, a premier distributor and retailer for UK-based Williams Jet Tenders Ltd., the world’s leading manufacturer of

rigid inflatable jet tenders for the luxury yacht market.

In March 2024, we acquired Williams Tenders USA, a premier distributor and retailer for UK-based Williams Jet Tenders Ltd., the world’s leading manufacturer of rigid inflatable jet tenders for the luxury yacht market.

In March 2024, we also acquired Native Marine, a boat dealer based in Islamorada, Florida.

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Consumer spending on luxury goods also may decline as a result of lower consumer confidence levels, even if prevailing economic conditions are favorable.

Additionally, the Federal Reserve's prior increases of its benchmark interest rate have resulted in significantly higher long-term interest rates, which may continue to negatively impact our customers’ willingness or desire to purchase our products.

As a result, an economic downturn or inflation could impact us more than certain of our competitors due to our strategic focus on a higher end of our market.

While the Federal Reserve cut interest rates in late 2024, it has since kept interest rates stable and future decreases or increases are uncertain.

Additionally, the Federal Reserve's prior increases of its benchmark interest rate have resulted in significantly higher long-term interest rates, which have negatively impacted, and may continue to negatively impact, our customers’ willingness or desire to purchase our products.

As a result, an economic downturn or inflation could impact us more than certain of our competitors due to our strategic focus on the higher end of our market.

While the Federal Reserve cut interest

rates in late 2024, it has since kept interest rates stable and future decreases or increases are uncertain.

Additionally, the current U.S.

administration recently announced significant tariff actions on imports from a broad set of countries, including countries that produce certain of our products.

administration has imposed and may continue to impose, significant tariff actions on imports from a broad set of countries, including countries that produce certain of our products.

In response to these tariffs, U.S.

trading partners have imposed, or are likely to impose, their own tariffs.

The effects of these tariffs and reciprocal tariffs are uncertain, but they are likely to increase production and supply chain costs for certain of our products and some experts predict an increased chance of an economic recession as a result of the disruption of international trade.

We continue to analyze the impacts of these tariffs on our business and action we can take to minimize their impact.

Although we have expanded our operations during periods of stagnant or modestly declining industry trends, the cyclical nature of the recreational boating industry or the lack of industry growth may adversely affect our business, financial condition, and results of operations.

Further, U.S.

and international tariff policies remain uncertain and difficult to predict.

Due to the uncertainty in the retail environment caused by the tariffs, we have experienced decreased revenues and profits.

Additional effects of these tariffs and reciprocal tariffs are uncertain, but the tariffs are likely to increase production and supply chain costs for certain of our products and some experts predict an increased chance of an economic recession and/or inflation as a result of the disruption of international trade.

Although we have previously expanded our operations during periods of stagnant or modestly declining industry trends, the cyclical nature of the recreational boating industry or the lack of industry growth may adversely affect our business, financial condition, and results of operations.

Any period of adverse economic conditions, low consumer confidence or inflation is likely to have a negative effect on our business.

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We expect our core strengths and retailing strategies, including our digital platform, will position us to capitalize on growth opportunities as they occur and will allow us to emerge with greater earnings potential.

As of March 31, 2025, the Retail Operations segment includes the activity of over 70 retail locations in Alabama, California, Connecticut, Florida, Georgia, Illinois, Maryland, Massachusetts, Michigan, Minnesota, Missouri, New Jersey, New York, North Carolina, Ohio, Oklahoma, Rhode Island, South Carolina, Texas, Washington and Wisconsin, where we sell new and used recreational boats, including pleasure and fishing boats, with a focus on premium brands in each segment.

As of June 30, 2025, the Retail Operations segment includes the activity of over 70 retail locations in Alabama, California, Connecticut, Florida, Georgia, Illinois, Maryland, Massachusetts, Michigan, Minnesota, Missouri, New Jersey, New York, North Carolina, Ohio, Oklahoma, Rhode Island, South Carolina, Texas, Washington and Wisconsin, where we sell new and used recreational boats, including pleasure and fishing boats, with a focus on premium brands in each segment.

We also sell related marine products, including engines, trailers, parts, and accessories.

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Fraser Yachts Group and Northrop & Johnson, leading superyacht brokerage and luxury yacht services companies with operations in multiple countries, are also included in this segment.

Through IGY Marinas, which is also included in this segment, we maintain a network of strategically positioned luxury

marinas situated in yachting and sport fishing destinations around the world.

Through IGY Marinas, which is also included in this segment, we maintain a network of strategically positioned luxury marinas situated in yachting and sport fishing destinations around the world.

The Retail Operations segment includes the majority of all corporate costs.

As of March 31, 2025, the Product Manufacturing segment includes activity of Cruisers Yachts and Intrepid Powerboats, both wholly-owned MarineMax subsidiaries.

As of June 30, 2025, the Product Manufacturing segment includes activity of Cruisers Yachts and Intrepid Powerboats, both wholly-owned MarineMax subsidiaries.

Cruisers Yachts manufactures sport yacht and yachts with sales through our select retail dealership locations and through independent dealers.

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See Part II, Item 7, “Application of Critical Accounting Policies” in our Annual Report on Form 10-K for the fiscal year ended September 30, 2024.

There have been no material changes to our critical accounting policies since our Annual Report on Form 10-K for the fiscal year ended September 30, 2024.

There have been no material changes to our critical accounting policies since our Annual Report on Form 10-K for the fiscal year ended September 30, 2024, with the exception of a critical accounting policy originally contained in the Form 10-K, which is set forth, as modified, below.

We account for acquisitions in accordance with FASB ASC 805, “Business Combinations” (“ASC 805”), and goodwill in accordance with ASC 350, “Intangibles — Goodwill and Other” (“ASC 350”).

For business combinations, the excess of the purchase price over the estimated fair value of net assets acquired in a business combination is recorded as goodwill.

In accordance with ASC 350, we test goodwill for impairment at least annually and whenever events or changes in circumstances indicate that the carrying value may not be recoverable.

Our annual impairment test is performed during the third fiscal quarter.

If the carrying amount of a reporting unit’s goodwill exceeds its fair value we recognize an impairment loss in accordance with ASC 350.

When required to be performed, a quantitative goodwill impairment test compares the carrying value of a reporting unit to its fair value, and a goodwill impairment charge results when the reporting unit’s carrying value exceeds its fair value.

The performance of a quantitative goodwill impairment test requires management to apply significant estimates and judgment – particularly to estimate the fair value of the Company and each of our reporting units.

The Company has three reporting units:

Retail Dealerships, Superyacht Services, and IGY Marinas, which are included in the Retail Operations reportable segment, and one reporting unit, Product Manufacturing, which is its own reportable segment.

When performing a quantitative goodwill impairment test, the Company utilizes the income approach (discounted cash flow method) corroborated by the market approach (guideline public company method).

Under the income approach, the Company projects its future cash flows and discounts these cash flows to reflect their relative risk.

The cash flows used are consistent with those the Company uses in its internal planning, which reflects actual business trends experienced and its long-term business strategy.

Under the market approach, the Company uses the guideline company method to develop valuation multiples and compare the Company’s reporting unit to similar publicly traded companies.

In order to further validate the reasonableness of fair value as determined by the income and market approaches described above, a reconciliation to market capitalization is then performed by estimating a reasonable control premium and other market factors.

Impairment testing requires the assessment of both qualitative and quantitative factors, including, but not limited to whether there has been a significant or adverse change in the business climate that could affect the value of an asset and/or significant or adverse changes in cash flow projections or earnings forecasts.

These assessments require management to make judgements, assumptions and estimates regarding the macroeconomic and industry conditions, our financial performance, and other factors and are often interdependent;

therefore, they do not change in isolation.

Factors and assumptions that management must estimate include, among others, revenue, margin, operating expense growth rates, discount rates, terminal growth rates, comparable public companies and historical transactions, market multiples, tax rates, capital spending, and customers’ financial condition.

The estimates and assumptions used in these tests are evaluated and updated as appropriate.

The variability of these factors depends on a number of conditions, including uncertainty about future events, and thus our accounting estimates may change from period to period.

If other assumptions and estimates had been used when these tests were performed, impairment charges could have changed.

During the three months ended June 30, 2025, the Company performed a quantitative impairment assessment of goodwill at each of our four reporting units.

As a result of the declining performance of the product manufacturing reporting unit and segment the Company recognized a non-cash, pre-tax goodwill impairment charge of $69.1 million related to the product manufacturing reporting unit and segment during the three and nine months ended June 30, 2025, which was included in goodwill impairment in the Unaudited Condensed Consolidated Statements of Operations.

There was no remaining carrying value of the goodwill for the product manufacturing reporting unit and segment as of June 30, 2025 as a result of the goodwill impairment.

No impairments were recorded for the reporting units:

Retail Dealerships, Superyacht Services, or IGY Marinas, which are included in the Retail Operations reportable segment, for the three and nine months ended June 30, 2025 as these reporting units all had fair values greater than their carrying values.

The excess of fair values as compared to carrying values for the Retail Operations reportable segment reporting units ranged from 4% to 15%.

Changes in the judgments, assumptions and estimates, including but not limited to:

revenue, margin, operating expense growth rates, discount rates, terminal growth rates, and other assumptions, that are used in the impairment testing for goodwill, could result in significantly different estimates of fair value for our reporting units and potentially result in additional material non-cash impairment charges.

Recent Accounting Pronouncements

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Consolidated Results of Operations

The following discussion compares the six months ended March 31, 2025, with the six months ended March 31, 2024 and should be read in conjunction with the Unaudited Condensed Consolidated Financial Statements, including the related notes thereto, appearing elsewhere in this report.

Three Months Ended March 31, 2025 Compared with Three Months Ended March 31, 2024

Revenue increased $48.6 million, or 8.3%, to $631.5 million for the three months ended March 31, 2025, from $582.9 million for three months ended March 31, 2024.

The increase was due to an increase of $63.0 million or 11% in comparable-store sales, partially offset by a $14.4 million net decrease primarily from closed stores that are not eligible for inclusion in comparable-store sales.

The comparable-store increases were primarily driven by increases in new and used boat revenue along with contributions from our other higher margin businesses.

The following discussion compares the nine months ended June 30, 2025, with the nine months ended June 30, 2024 and should be read in conjunction with the Unaudited Condensed Consolidated Financial Statements, including the related notes thereto, appearing elsewhere in this report.

Three Months Ended June 30, 2025 Compared with Three Months Ended June 30, 2024

Revenue decreased $100.5 million, or 13.3%, to $657.2 million for the three months ended June 30, 2025, from $757.7 million for three months ended June 30, 2024.

The decrease was due to a decrease of $67.0 million or 9% in comparable-store sales and a $33.5 million net decrease from closed stores and manufacturing revenue that are not eligible for inclusion in comparable-store sales.

The comparable-store decreases were primarily driven by decreases in new boat revenue as a result of the challenging retail environment, ongoing economic uncertainty, evolving trade policies and geopolitical tensions.

Gross Profit.

Gross profit decreased $0.9 million, or 0.5%, to $189.5 million for the three months ended March 31, 2025, from $190.4 million for the three months ended March 31, 2024.

Gross profit as a percentage of revenue decreased to 30.0% for the three months ended March 31, 2025, from 32.7% for the three months ended March 31, 2024.

Gross profit decreased $42.5 million, or 17.6%, to $199.6 million for the three months ended June 30, 2025, from $242.1 million for the three months ended June 30, 2024.

Gross profit as a percentage of revenue decreased to 30.4% for the three months ended June 30, 2025, from 32.0% for the three months ended June 30, 2024.

The decrease in gross profit as a percentage of revenue was primarily a result of lower boat margins due to the challenging retail environment.

Selling, General, and Administrative Expenses.

Selling, general, and administrative expenses decreased $2.2 million, or 1.3% to $166.8 million for the three months ended March 31, 2025, from $169.0 million for the three months ended March 31, 2024.

Selling, general, and administrative expenses decreased $9.0 million, or 5.0% to $172.1 million for the three months ended June 30, 2025, from $181.1 million for the three months ended June 30, 2024.

The decrease in selling, general, and administrative expenses was primarily the result of cost-saving initiatives implemented in fiscal 2024 and fiscal 2025.

Goodwill impairment.

Goodwill impairment increased $69.1 million for the three months ended June 30, 2025, as compared to the three months ended June 30, 2024, as a result of recording the non-cash, pre-tax goodwill impairment charge of $69.1 million related to the product manufacturing reporting unit and segment.

Interest Expense.

Interest expense decreased $1.2 million to $18.2 million for the three months ended March 31, 2025, from $19.4 million for the three months ended March 31, 2024.

Interest expense decreased $1.3 million to $16.9 million for the three months ended June 30, 2025, from $18.2 million for the three months ended June 30, 2024.

The decrease in interest expense was primarily the result of lower interest rates.

Income Taxes.

Income tax increased $0.8 million to $1.4 million, for the three months ended March 31, 2025, from $0.6 million for the three months ended March 31, 2024.

The effective income tax rate for the three months ended March 31, 2025 and 2024 was 30.7% and 28.5%, respectively.

Six Months Ended March 31, 2025 Compared with Three Months Ended March 31, 2024

Revenue decreased $10.2 million, or 0.9%, to $1.100 billion for the six months ended March 31, 2025, from $1.110 billion for six months ended March 31, 2024.

The decrease was due to a $16.3 million net decrease primarily from closed stores and manufacturing revenues which are not included in comparable retail store sales, partially offset by an increase of $6.1 million or 1%, in comparable-store sales.

The comparable-store increase came primarily from increases in used boat revenue along with contributions from our other higher margin businesses.

Income taxes decreased $17.6 million to a benefit of $6.5 million, for the three months ended June 30, 2025, from a provision of $11.1 million for the three months ended June 30, 2024 primarily as a result of the goodwill impairment.

The effective income tax rate for the three months ended June 30, 2025 and 2024 was 11.1% and 25.9%, respectively.

Nine Months Ended June 30, 2025 Compared with Three Months Ended June 30, 2024

Revenue decreased $111.0 million, or 5.9%, to $1.757 billion for the nine months ended June 30, 2025, from $1.868 billion for nine months ended June 30, 2024.

The decrease was due to a decrease of $60.9 million or 3% in comparable-store sales and a $50.1 million net decrease from closed stores and manufacturing revenue that are not eligible for inclusion in comparable-store sales.

Gross Profit.

Gross profit decreased $6.7 million, or 1.8%, to $359.2 million for the six months ended March 31, 2025, from $365.9 million for the six months ended March 31, 2024.

Gross profit as a percentage of revenue decreased to 32.7% for the six months ended March 31, 2025, from 33.0% for the six months ended March 31, 2024.

Gross profit decreased $49.2 million, or 8.1%, to $558.8 million for the nine months ended June 30, 2025, from $608.0 million for the nine months ended June 30, 2024.

Gross profit as a percentage of revenue decreased to 31.8% for the nine months ended June 30, 2025, from 32.5% for the nine months ended June 30, 2024.

The decrease in gross profit as a percentage of revenue was primarily a result of lower boat margins due to the challenging retail environment.

Selling, General, and Administrative Expenses.

Selling, general, and administrative expenses decreased $28.0 million, or 8.6% to $297.5 million for the six months ended March 31, 2025, from $325.5 million for the six months ended March 31, 2024.

Selling, general, and administrative expenses decreased $37.0 million, or 7.3% to $469.6 million for the nine months ended June 30, 2025, from $506.6 million for the nine months ended June 30, 2024.

The decrease in selling, general, and administrative expenses was primarily the result of changes in the fair value of contingent consideration liabilities and cost-saving initiatives implemented in fiscal 2024 and fiscal 2025.

Goodwill impairment.

Goodwill impairment increased $69.1 million for the nine months ended June 30, 2025, as compared to the nine months ended June 30, 2024, as a result of recording the non-cash, pre-tax goodwill impairment charge of $69.1 million related to the product manufacturing reporting unit and segment.

Interest Expense.

Interest expense decreased $0.8 million to $36.9 million for the six months ended March 31, 2025, from $37.7 million for the six months ended March 31, 2024.

Interest expense decreased $2.1 million to $53.9 million for the nine months ended June 30, 2025, from $56.0 million for the nine months ended June 30, 2024.

The decrease in interest expense was primarily the result of lower interest rates.

Income Taxes.

Income tax expense increased $3.1 million, to $3.5 million for the six months ended March 31, 2025, from $0.4 million for the six months ended March 31, 2024.

The effective income tax rate for the six months ended March 31, 2025 and 2024 was 14.1% and 13.8%, respectively.

Income taxes decreased $14.5 million, to a benefit of $3.0 million for the nine months ended June 30, 2025, from a provision of $11.5 million for the nine months ended June 30, 2024 primarily as a result of the goodwill impairment.

The effective income tax rate for the nine months ended June 30, 2025 and 2024 was 8.9% and 25.2%, respectively.

Liquidity and Capital Resources

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Any turmoil in the credit markets and weakness in the retail markets may interfere with our ability to remain in compliance with the covenants of the Amended Credit Facility and therefore affect our ability to utilize the Amended Credit Facility to fund operations.

As of March 31, 2025, we were in compliance with all covenants under the Amended Credit Facility.

As of June 30, 2025, we were in compliance with all covenants under the Amended Credit Facility.

We currently depend upon dividends and other payments from our businesses and the Amended Credit Facility to fund our current operations and meet our cash needs.

As the majority owner of each of our businesses, we determine the amounts of such distributions subject to applicable law, and currently, no agreements exist that restrict this flow of funds from our businesses.

For the six months ended March 31, 2025 and 2024, cash used in operating activities was approximately $73.6 million and $111.2 million, respectively.

For the six months ended March 31, 2025, cash used in operating activities was primarily related to increases in inventory, increases in accounts receivable, decreases in accounts payable, decreases in contract liabilities (customer deposits), decreases in accrued expenses and other liabilities, partially offset by our net income adjusted for non-cash expenses and gains such as depreciation and amortization expense, changes in fair value of contingent consideration, deferred income tax provision, and stock-based compensation expense.

For the six months ended March 31, 2024, cash used in operating activities was primarily related to increases in inventory, increases in accounts receivable, decreases in accounts payable, decreases in contract liabilities (customer deposits), partially offset by increases in our net income adjusted for non-cash expenses and gains such as depreciation and amortization expense, deferred income tax provision, and stock-based compensation expense.

For the six months ended March 31, 2025 and 2024, cash used in investing activities was approximately $25.7 million and $49.9 million, respectively.

For the six months ended March 31, 2025, cash used in investing activities was primarily used to purchase property and equipment associated with improving existing retail facilities, partially offset by proceeds from the sale of property and equipment and other assets, proceeds from the acquisition of a trade name, and proceeds from insurance settlements.

For the six months ended March 31, 2024, cash used in investing activities was primarily used to purchase property and equipment associated with improving existing retail facilities, partially offset by proceeds from insurance settlements.

For the six months ended March 31, 2025 and 2024, cash provided by financing activities was approximately $79.4 million and $175.4 million, respectively.

For the six months ended March 31, 2025, cash provided by financing activities was primarily attributable to net increases in short-term borrowings, which solely consisted of the Floor Plan (as defined below), and net proceeds from issuance of common stock under incentive compensation and employee purchase plans, partially offset by payments on long-term debt, payments on tax withholdings for equity awards, contingent consideration payments from acquisitions, and purchases of treasury stock.

For the six months ended March 31, 2024, cash provided by financing activities was primarily attributable to net increases in short-term borrowings, which solely consisted of the Floor Plan, and net proceeds from issuance of common stock under incentive compensation and employee purchase plans, partially offset by payments on long-term debt, contingent consideration payments from acquisitions, and payments on tax withholdings for equity awards.

For the nine months ended June 30, 2025 cash provided by operating activities was $11.4 million.

For the nine months ended June 30, 2024, cash used in operating activities was approximately $24.9 million.

For the nine months ended June 30, 2025, cash provided by operating activities was primarily related to net income adjusted for non-cash expenses and gains such as depreciation and amortization expense, changes in fair value of contingent consideration, goodwill impairment, and stock-based compensation expense, partially offset by increases in inventory, increases in accounts receivable, decreases in accounts payable, decreases in contract liabilities (customer deposits), decreases in accrued expenses and other liabilities.

For the nine months ended June 30, 2024, cash used in operating activities was primarily related to increases in inventory, increases in accounts receivable, decreases in accounts payable, decreases in contract liabilities (customer deposits), partially offset by our net income adjusted for non-cash expenses and gains such as depreciation and amortization expense, deferred income tax provision, and stock-based compensation expense.

For the nine months ended June 30, 2025 and 2024, cash used in investing activities was approximately $42.1 million and $64.8 million, respectively.

For the nine months ended June 30, 2025, cash used in investing activities was primarily used to purchase property and equipment associated with improving existing retail facilities, acquisitions, and issuance of notes receivable, partially offset by proceeds from the sale of property and equipment and other assets, proceeds from the acquisition of a trade name, and proceeds from insurance settlements.

For the nine months ended June 30, 2024, cash used in investing activities was primarily used to purchase property and equipment associated with improving existing retail facilities and acquisitions, partially offset by proceeds from insurance settlements.

For the nine months ended June 30, 2025 cash used in financing activities was $43.1 million.

For the nine months ended June 30, 2024 cash provided by financing activities was approximately $130.1 million.

For the nine months ended June 30, 2025, cash used in financing activities was primarily attributable to payments on long-term debt, payments on tax withholdings for equity awards, contingent consideration payments from acquisitions, and purchases of treasury stock, partially offset by net increases in short-term borrowings, which solely consisted of the Floor Plan (as defined below), proceeds from long-term debt, and net proceeds from issuance of common stock under incentive compensation and employee purchase plans.

For the nine months ended June 30, 2024, cash provided by financing activities was primarily attributable to net increases in short-term borrowings, which solely consisted of the Floor Plan (as defined below), and net proceeds from issuance of common stock under incentive compensation and employee purchase plans, partially offset by payments on long-term debt, contingent acquisition consideration payments, purchases of treasury stock, and payments on tax withholdings for equity awards.

We are party to the Amended Credit Facility with Manufacturers and Traders Trust Company as Administrative Agent, Swingline Lender, and Issuing Bank, Wells Fargo Commercial Distribution Finance, LLC, as Floor Plan Agent, and the lenders party thereto.

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Advances under the Floor Plan are initiated by the acquisition of eligible new and used inventory or are re-advanced against eligible new and used inventory that have been partially paid-off.

Advances on new inventory will generally mature 1,080 days from the original invoice date.

Advances on new inventory will generally mature 1,080 days from

the original invoice date.

Advances on used inventory will mature 361 days from the date we acquire the used inventory.

is subject to a curtailment schedule, which requires that we pay down the balance of each advance on a periodic basis starting six months after receiving such advance.

Each advance is subject to a curtailment schedule, which requires that we pay down the balance of each advance on a periodic basis starting six months after receiving such advance.

The curtailment schedule varies based on the type and value of the inventory.

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None of our real estate has been pledged for collateral for the Amended Credit Agreement.

As of March 31, 2025, our indebtedness associated with our short-term borrowings, which solely consisted of the Floor Plan, and our long-term debt, totaled approximately $821.7 million and $339.1 million, respectively.

As of March 31, 2025, short-term borrowings, which solely consisted of the Floor Plan, and long-term debt recorded on the Unaudited Condensed Consolidated Balance Sheets included unamortized debt issuance costs of approximately $1.1 million and $1.3 million, respectively.

As of June 30, 2025, our indebtedness associated with our short-term borrowings, which solely consisted of the Floor Plan, and our long-term debt, totaled approximately $735.2 million and $365.1 million, respectively.

As of June 30, 2025, short-term borrowings, which solely consisted of the Floor Plan, and long-term debt recorded on the Unaudited Condensed Consolidated Balance Sheets included unamortized debt issuance costs of approximately $0.9 million and $1.6 million, respectively.

Refer to Note 10 of the Notes to the Consolidated Financial Statements for disclosure of borrowing availability, interest rates, and terms of our short-term borrowings (Floor Plan) and long-term debt.

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For example, a hypothetical 100 basis point, 200 basis point, or 300 basis point increase in the interest rate would result in an increase of approximately $10.9 million, $21.8 million, or $32.7 million, respectively, in annual pre-tax interest expense.

These estimated increases are based upon the outstanding balance of our short-term borrowings and long-term debt as of March 31, 2025 and assumes no mitigating changes by us to reduce the outstanding balances and no additional interest assistance that could be received from vendors due to the interest rate increase.

These estimated increases are based upon the outstanding balance of our short-term borrowings and long-term debt as of June 30, 2025 and assumes no mitigating changes by us to reduce the outstanding balances and no additional interest assistance that could be received from vendors due to the interest rate increase.

Foreign Currency Exchange Rate Risk

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In certain cases, we may enter into foreign currency cash flow hedges to reduce the variability of cash flows associated with forecasted purchases of boats and yachts from European-based and Chinese-based manufacturers.

We are not currently engaged in foreign currency exchange hedging transactions to manage our foreign currency exposure.

We are not currently engaged in foreign currency exchange hedging transactions to manage our foreign currency

If and when we do engage in foreign currency exchange hedging transactions, there can be no assurance that our strategies will adequately protect our operating results from the effects of exchange rate fluctuations.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis