What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2024-12-10 compared with 2023-12-14 · 264 added, 241 removed, 839 unchanged (38% of the section changed)

14 unchanged sentences

We have audited the accompanying consolidated balance sheets of OneWater Marine Inc.

(a Delaware corporation) and subsidiaries (the “Company”) as of September 30, 2023 and 2022, the related consolidated statements of operations, comprehensive income (loss), changes in stockholders’ equity, and cash flows for each of the three years in the period ended September 30, 2023, and the related notes (collectively referred to as the “financial statements”).

(a Delaware corporation) and subsidiaries (the “Company”) as of September 30, 2024 and 2023, the related consolidated statements of operations, comprehensive income (loss), stockholders’ equity, and cash flows for each of the three years in the period ended September 30, 2024, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of September 30, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended September 30, 2024, in conformity with accounting principles generally accepted in the United States of America.

12 unchanged sentences

Critical audit matters

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that:

Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Impairment of Distribution Goodwill and Distribution Tradenames

As described in notes 2 and 8 to the consolidated financial statements, goodwill and indefinite-lived intangible assets are assessed for impairment at least annually, or more frequently when events or circumstances indicate that impairment might have occurred.

Goodwill is tested for impairment at the reporting unit level.

The Company first assesses qualitative factors to evaluate whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as the basis for determining whether it is necessary to perform quantitative goodwill and indefinite-lived impairment tests.

The Company may bypass the qualitative assessment in any period and proceed directly with a quantitative analysis.

For the annual impairment testing date of August 31, 2023, management performed a qualitative assessment and then decided to prepare quantitative impairment analyses for reporting units and trade names.

The Company engaged a third-party valuation specialist for the estimation of the fair values of the reporting units and the Distribution trade names.

Management estimates the fair value of reporting units using a combination of income and market approaches and Distribution trade names using the relief from royalty approach.

As a result of the Company’s annual impairment testing, the Company recorded a goodwill impairment charge of $57.7 million associated with its Distribution reporting segment and trade name impairment charges of $36.5 million related to the Distribution reporting segment.

We identified the estimation of the fair values of Distribution reportable unit and Distribution trade names as a critical audit matter.

The principal considerations for our determination that the estimation of the fair values of the Distribution reporting unit and Distribution trade names is a critical audit matter is that there was high estimation uncertainty due to significant judgements with respect to assumptions used to project future cash flows, including revenue growth rates (reporting unit and trade names), EBITDA (reporting unit), as well as the discount rates (reporting unit), royalty rates (trade names), and the valuation methodologies used by the third-party valuation specialist.

Our audit procedures related to the estimation of the fair value of the reporting unit and trade names included the following, among others.

• We obtained an understanding, evaluated the design and tested the operating effectiveness of internal controls relating to the Company’s review of the assumptions used to project future cash flows, the selection of appropriate discount rates and royalty rates, the valuation methodologies applied by the third-party valuation specialist and the review of the Company’s reporting units.

• We utilized an internal valuation specialist to evaluate:

◦ the methodologies used and whether they were acceptable for the underlying assets or operations and applied correctly by performing independent calculations,

◦ the reasonableness of the risk-adjusted discount rates by recalculating the weighted average cost of capital,

◦ the reasonableness of selected royalty rates considering external information used in developing management’s estimate,

◦ the guideline public companies and transactions utilized by the Company by examining financial metrics of the comparable public companies and transactions within the industry and considering market participant guidance and perspective, and

◦ the qualifications of the third-party valuation firm engaged by the Company based on their credentials and experience.

• We evaluated management’s determination of reporting units.

• We tested the reconciliation of the aggregate estimated fair value of the reporting units to the market capitalization of the Company.

• We tested the completeness and accuracy of underlying data used in the estimate by agreeing to underlying accounting records.

• We evaluated the reasonableness of the forecasted cash flows, including revenue growth rates, EBITDA, and EBITDA margins, by assessing the historical accuracy of management’s estimates and the reasonableness of assumptions used by management by comparing to publicly available industry information and comparable companies, including analyzing the sensitivity of changes in significant assumptions and the resulting impact to the estimated fair values.

Impairment of Distribution Segment long-lived intangible assets

As described in notes 2 and 8 to the consolidated financial statements, long-lived assets are evaluated for impairment whenever events or changes in circumstances indicate the carrying value may not be recoverable.

As of August 31, 2023, the Company recorded impairment charges of $38.3 million and $8.3 million associated with customer relationships and developed technologies, respectively, in its Distribution reportable segment.

We identified the estimation of fair value of these long-lived intangible assets as a critical audit matter.

The principal considerations for our determination that the estimation of fair values of the Distribution reportable segment long-lived intangible assets is a critical audit matter is due to the high degree of subjectivity used to project future revenue growth rates, gross margin needed to estimate the recoverability of the underlying asset groups, and to assess the fair value of the intangible assets that indicated they were not recoverable using a relevant income approach.

The significant assumptions include the revenue growth rates, EBITDA, royalty rate, customer attrition rates, and the discount rate used.

Our audit procedures related to the fair value of Distribution segment long-lived intangible assets included the following, among others.

• We obtained an understanding, evaluated the design and tested the operating effectiveness of the Company’s relevant controls to fair value long-lived intangible assets, including the Company’s controls over the selection and review of the appropriateness of revenue growth rates, EBITDA, royalty rates, customer attrition rates, and the discount rate used in determining fair value.

• We utilized an internal valuation specialist to evaluate:

◦ the methodologies used and whether they were acceptable for the underlying assets or operations and applied correctly by performing independent calculations,

◦ the reasonableness of the risk-adjusted discount rates by recalculating the weighted average cost of capital,

◦ the reasonableness of selected royalty rates and customer attrition rates considering the external information used in developing management’s estimate,

◦ the qualifications of the third-party valuation firm engaged by the Company based on their credentials and experience.

• We agreed the carrying value of each asset group to the underlying accounting records.

We determined that there are no critical audit matters.

/s/ GRANT THORNTON LLP

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Accounts receivable, net 73,269 113,175

Inventories, net 609,616 372,959

Inventories 590,838 609,616

Prepaid expenses and other current assets 85,922 65,798

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Tax receivable agreement liability 38,019 40,688

Noncurrent operating lease liabilities 123,310 112,127

Long-term operating lease liabilities 126,001 123,310

Long-term debt, net 414,934 428,439

Total liabilities 1,199,236 1,275,081

COMMITMENTS AND CONTINGENCIES (Note 18)

STOCKHOLDERS' EQUITY

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Retained earnings 159,625 165,432

Accumulated other comprehensive income (loss) 1 ( 7 )

Accumulated other comprehensive (loss) income ( 1,897 ) 1

Total stockholders’ equity attributable to OneWater Marine Inc.

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Total revenues 1,772,630 1,936,310 1,744,822

Cost of sales (exclusive of depreciation and amortization shown separately below):

Cost of sales:

New boat 921,406 955,222 834,026

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Change in fair value of contingent consideration 4,248 ( 1,604 ) 10,380

Loss on impairment 147,402 — —

Restructuring and impairment 12,386 147,402 —

Income from operations 64,818 18,067 217,833

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Loss on extinguishment of debt — — 356

Other expense (income), net 953 3,793 ( 248 )

Total other expense (income), net 60,590 21,997 6,662

Other expense, net 14 953 3,793

Total other expense, net 71,151 60,590 21,997

Net (loss) income before income tax (benefit) expense ( 6,333 ) ( 42,523 ) 195,836

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Foreign currency translation adjustment ( 18 ) 9 ( 8 )

Change in fair value of interest rate swaps ( 2,066 ) — —

Comprehensive (loss) income ( 8,260 ) ( 39,102 ) 152,603

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Foreign currency translation adjustment attributable to non-controlling interest of One Water Marine Holdings, LLC 2 ( 1 ) 1

Comprehensive (loss) income attributable to One Water Marine Holdings, Inc.

Change in fair value of interest rate swaps attributable to non-controlling interest of One Water Marine Holdings, LLC 184 — —

Comprehensive (loss) income attributable to OneWater Marine, Inc.

$ ( 7,603 ) $ ( 38,584 ) $ 130,937

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Distributions to members — — — — — ( 784 ) ( 3,497 ) — ( 4,281 )

Dividends and distributions — — — — — ( 20,777 ) ( 7,328 ) — ( 28,105 )

Effect of September Offering, including underwriter exercise of option to purchase shares 387 4 ( 387 ) ( 4 ) 4,146 — ( 4,256 ) — ( 110 )

Exchange of B shares for A shares 389 4 ( 389 ) ( 4 ) 6,833 — ( 6,833 ) — —

Establishment of liabilities under tax receivable agreement and related changes to deferred tax assets associated with increases in tax basis — — — — ( 4,186 ) — — — ( 4,186 )

Establishment of liabilities under tax receivable agreement and related changes to deferred tax assets associated with increase in tax basis — — — — ( 247 ) — — — ( 247 )

Shares issued upon vesting of equity-based awards, net of tax withholding 169 1 — — ( 1,629 ) — — — ( 1,628 )

Shares issued in connection with a business combination 36 — — — 1,495 — — 1,495

Adjustment to adopt Topic 842 — — — — — 1,073 — — 1,073

Shares issued in connection with business combinations 387 4 — — 14,623 — — — 14,627

Non-controlling interest in subsidiary — — — — — — 19,311 19,311

Equity-based compensation — — — — 10,013 — — 10,013

Repurchase and retirement of Class A common stock ( 10 ) — — — ( 122 ) ( 232 ) — — ( 354 )

Currency translation adjustment — — — — — — ( 1 ) ( 7 ) ( 8 )

Balance at September 30, 2022 14,212 142 1,430 14 180,296 204,880 59,552 ( 7 ) 444,877

Net income — — — — — 130,944 21,667 — 152,611

Net loss — — — — — ( 38,592 ) ( 519 ) — ( 39,111 )

Distributions to members — — — — — ( 38 ) ( 3,565 ) — ( 3,603 )

Exchange of B shares for A shares 389 4 ( 389 ) ( 4 ) 6,833 — ( 6,833 ) — —

Establishment of liabilities under tax receivable agreement and related changes to deferred tax assets associated with increase in tax basis — — — — 4,402 — — — 4,402

Shares issued upon vesting of equity-based awards, net of tax withholding 186 2 — — ( 1,973 ) — — — ( 1,971 )

Shares issued in connection with business combinations 387 4 — — 14,623 — — — 14,627

Non-controlling interest in subsidiary — — — — — — 19,311 19,311

Shares issued as part of employee stock purchase plan 86 1 — — 2,091 — — — 2,092

Equity-based compensation — — — — 8,962 — — — 8,962

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Equity-based compensation — — — — 8,443 — — — 8,443

Repurchase and retirement of Class A common stock ( 64 ) ( 1 ) — — ( 760 ) ( 818 ) — — ( 1,579 )

Purchase of non-controlling interest — — — — 716 — ( 19,556 ) — ( 18,840 )

Currency translation adjustment — — — — — — ( 2 ) ( 16 ) ( 18 )

Change in fair value of cash flow swaps — — — — — — ( 184 ) ( 1,882 ) ( 2,066 )

Balance at September 30, 2024 14,687 $ 147 1,430 $ 14 $ 202,921 $ 159,625 $ 29,943 $ ( 1,897 ) $ 390,753

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Net (loss) income $ ( 6,176 ) $ ( 39,111 ) $ 152,611

Adjustments to reconcile net income to net cash provided by operating activities:

Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities:

Depreciation and amortization 22,187 26,789 16,296

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Loss on disposal of a business — 750 —

Loss on impairment 147,402 — —

Loss on restructuring and impairment 539 147,402 —

Loss on extinguishment of debt — — 356

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Change in fair value of contingent consideration 1,763 ( 1,604 ) 10,380

Loss on equity investments 446 1,228 —

Loss on equity investment 198 446 1,228

(Increase) decrease in assets:

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Customer deposits 12,040 ( 14,825 ) 4,401

Net cash (used in) provided by operating activities ( 129,760 ) 7,447 159,423

Net cash provided by (used in) operating activities 34,839 ( 129,760 ) 7,447

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchases of property and equipment ( 21,251 ) ( 11,403 ) ( 9,896 )

Purchases of property and equipment and construction in progress ( 25,918 ) ( 21,251 ) ( 11,403 )

Proceeds from disposal of property and equipment 757 567 345

1 unchanged sentence

Cash used for additions to intangible assets ( 909 ) ( 2,823 ) ( 4,246 )

Cash used in acquisitions ( 28,882 ) ( 459,540 ) ( 107,467 )

Cash used in acquisitions, net of cash acquired ( 5,712 ) ( 28,882 ) ( 459,540 )

Proceeds from disposal of a business 45,100 788 —

Net cash used in investing activities ( 51,601 ) ( 476,844 ) ( 117,130 )

Net cash provided by (used in) investing activities 13,318 ( 51,601 ) ( 476,844 )

CASH FLOWS FROM FINANCING ACTIVITIES:

Net borrowings (payments) from floor plan 219,688 152,874 ( 23,497 )

Net (payments) borrowings from floor plan ( 45,638 ) 219,688 152,874

Proceeds from long-term debt 43,392 30,000 412,492

1 unchanged sentence

Payments of debt issuance costs ( 2,221 ) — ( 9,095 )

Payments of September Offering costs — — ( 540 )

Payments of contingent consideration ( 5,888 ) ( 12,574 ) ( 371 )

1 unchanged sentence

Payments of tax withholdings for equity-based awards ( 2,641 ) ( 1,971 ) ( 1,628 )

Dividends and distributions — — ( 27,070 )

Distributions to members ( 5,415 ) ( 3,603 ) ( 9,482 )

Purchase of non-controlling interest ( 18,840 ) — —

Repurchase and retirement of Class A common stock — ( 1,579 ) ( 354 )

Net cash provided by (used in) financing activities 213,715 456,403 ( 36,497 )

Effect of exchange rate changes on cash and restricted cash 9 ( 8 ) —

Net cash (used in) provided by financing activities ( 114,112 ) 213,715 456,403

Effects of exchange rate changes on cash and restricted cash ( 18 ) 9 ( 8 )

Net change in cash and restricted cash ( 65,973 ) 32,363 ( 13,002 )

8 unchanged sentences

Acquisition purchase price funded by issuance of Class A common stock — — 14,627

Accrued purchase consideration — — 1,889

Purchase of property and equipment funded by long-term debt 156 1,122 2,087

Dividends payable — — 1,035

Distributions payable — — 4,964

Initial operating lease right-of-use-assets for adoption of Topic 842 — — 71,823

Acquisition purchase price funded by affiliate financing — 10,600 —

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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 subsidiaries.

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 subsidiaries.

The Company is one of the largest recreational marine retailers in the United States.

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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.

General economic conditions, including rising interest rates and consumer spending patterns, can negatively impact the Company’s operating results.

Unfavorable local, regional, national, or global economic developments, global public health concerns, 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, 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.

Local influences such as corporate downsizing, inclement weather such as hurricanes, tornadoes and other storms, environmental conditions, and other events have and 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.

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Pre-owned boats are usually trade-ins from retail customers who are purchasing a boat from the Company.

September Offering

On September 22, 2020, OneWater Inc completed an underwritten public offering (the “September Offering”) of 3,170,868 shares of Class A common stock, at a public offering price of $ 20.00 per share, less underwriting discounts and commissions.

OneWater Inc sold 425,000 shares of Class A common stock, and certain stockholders of the Company (the “Selling Stockholders”) sold 2,745,868 shares of Class A common stock.

In connection with the September Offering, Goldman granted the underwriters a 30 -day option to purchase up to an additional 475,630 shares of the Company’s Class A common stock (the “Optional Shares”).

On September 29, 2020, the underwriters notified OneWater Inc and Goldman of their intent to purchase an additional 387,458 Optional Shares.

The sale of the Optional Shares closed on October 2, 2020.

The Company did not receive any proceeds from the sale of the Optional Shares or the Class A common stock sold by Selling Stockholders.

After deducting underwriting discounts and commissions, OneWater Inc received net proceeds of $ 8.1 million.

OneWater Inc contributed all of the net proceeds of the September Offering received to OneWater LLC in exchange for LLC Units.

OneWater LLC used the net proceeds for general corporate purposes.

Principles of Consolidation

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As of September 30, 2024, OneWater Inc owned 91.1 % of the economic interest of OneWater LLC.

Commencing December 31, 2021, the Company owns 80 % of the economic interest of Quality Assets and Operations, LLC, over which the Company exercises control and the minority interest in this subsidiary has been recorded accordingly.

Commencing December 31, 2021, the Company owned 80 % of the economic interest of Quality Assets and Operations, LLC, over which the Company exercised control and the minority interest in this subsidiary was recorded accordingly.

On October 31, 2023, the Company acquired the remaining 20 % of the economic interest and, as a result, as of September 30, 2024 owned 100 % of Quality Assets and Operations, LLC.

See Note 4 for additional information regarding the acquisition.

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The Company has not experienced any losses in such accounts and believes there is little to no exposure to any significant credit risk.

Total cash and restricted cash shown in the consolidated statements of cash flows is comprised of the amounts reported in cash and restricted cash on the consolidated balance sheets.

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 customers 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.

Restricted cash relates to amounts collected for brokerage sales, in certain states, which are held in escrow on behalf of the respective buyers and sellers for future purchases of boats.

Inventories are stated at the lower of cost or net realizable value.

The cost of inventories consist of amounts paid to acquire the inventory, net of vendor consideration received and purchase discounts, and varying by inventory type, may include the cost of reconditioning, equipment addition, transportation, material, labor and manufacturing overhead.

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”).

The cost of acquired, manufactured and assembled parts and accessories is determined using methods which vary by subsidiary and include the average cost method, standard costs approximating average costs, and first-in, first-out (“FIFO”).

Vendor Consideration Received

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Goodwill and Other Identifiable Intangible Assets

Goodwill and indefinite-lived intangible assets are accounted for in accordance with FASB 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.

Other identifiable intangible assets primarily consist of trade names, developed technologies, including design libraries, and customer relationships related to the acquisitions the Company has

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 .

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.

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Fair value under the market approach is determined for each unit by applying market multiples for comparable public companies to the unit's financial results.

The Company elected a qualitative assessment for our fiscal fourth quarter 2024 goodwill impairment testing and determined that it was more likely than not that the fair value of the reporting units were greater than their carrying amounts, and as a result, no impairment for goodwill was required for the year then ended.

During the year ended September 30, 2023, the Company determined that there were circumstances that indicated impairment may have occurred, including a drop in the Company's market capitalization and declining margins, and performed a quantitative goodwill impairment analysis.

1 unchanged sentence

See Note 8 for more information about the impairment of goodwill.

The Company elected a qualitative assessment for our fiscal fourth quarter 2022 goodwill impairment testing and determined that it was more likely than not that the fair value of the reporting units were greater than their carrying amounts, and as a result, no impairment for goodwill was required for the year then ended.

Identifiable intangible assets primarily consist of trade names, developed technologies, including design libraries, and customer relationships related to the acquisitions the Company has completed.

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 their fair value.

The Company first performs an annual qualitative impairment assessment for indefinite-lived intangible assets to determine if it is more likely than not that the fair values are greater than their carrying amounts.

If it is determined that it is more likely than not that the fair values of the intangible assets are less than their respective carrying amounts, the Company then performs a quantitative impairment analysis by comparing the carrying amount of the indefinite-lived intangible assets to the fair values.

In accordance with ASC 350, the Company first performs an annual qualitative impairment assessment for indefinite-lived intangible assets to determine if it is more likely than not that the fair values are greater than their carrying amounts.

If it is determined that it is more likely than not that the fair values of the indefinite-lived intangible assets are less than their respective carrying amounts, the Company then performs a quantitative impairment analysis by comparing the carrying amount of the indefinite-lived intangible assets to the fair values.

To determine the fair value of the indefinite-lived intangible assets, the Company uses a relief from royalty method for trade names.

In accordance with FASB ASC 360-10, "Property, Plant and Equipment – Impairment or Disposal of Long-Lived Assets" (“ASC 360”), the Company assesses the potential for impairment of its definite-lived assets if facts and circumstances, such as declines in sales, earnings, cash flows or adverse changes in the business climate, suggest that they may be impaired.

The Company performs its assessment by comparing the book value of the asset groups to the estimated future undiscounted cash flows associated with the asset groups.

If any impairment in the carrying value of its definite-lived assets is indicated, the assets would be adjusted to an estimate of fair value.

The Company elected qualitative assessments for our fiscal fourth quarter 2024 indefinite-lived intangible assets impairment testing and determined that it was more likely than not that the fair values of the Company’s indefinite-lived intangible assets were greater than their carrying amounts, and as a result, no impairment was required for the year then ended.

During the year ended September 30, 2023 , the Company performed a quantitative impairment analysis.

As a result, the Company recognized a $ 43.0 million impairment for indefinite-lived intangible assets for the year then ended.

See Note 8 for more information about the impairment of indefinite-live intangible assets.

In accordance with FASB ASC 360-10, "Property, Plant and Equipment – Impairment or Disposal of Long-Lived Assets" (“ASC 360”), the Company assesses the potential for impairment of its definite-lived intangible assets if facts and circumstances, such as declines in sales, earnings, cash flows or adverse changes in the business climate, suggest that they may be impaired.

Definite-lived intangible assets include developed technologies and customer relationships which are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable.

The Compa ny performs its assessment by comparing the book value of the asset groups to the estimated future undiscounted cash flows associated with the asset groups.

If any impairment in the carrying value of its definite-lived intangible assets is indicated, the assets would be adjusted to an estimate of fair value.

To determine the fair value of the definite-lived intangible assets, the Company uses a relief from royalty method for developed technology and discounted cash flows method for customer relationships.

During the year ended September 30, 2024, the Company evaluated the indicators of potential impairment for definite-lived intangible assets and did not identify any potential triggering events, and as a result, no impairment was required for the year then ended .

During the year ended September 30, 2023 , the Company performed a quantitative impairment analysis.

As a result, the Company recognized a $ 89.7 million impairment for identifiable intangible assets for the year then ended.

See Note 8 for more information about the impairment of identifiable intangible assets.

The Company elected qualitative assessments for our fiscal fourth quarter 2022 indefinite-lived intangible assets impairment testing and determined that it was more likely than not that the fair values of the Company’s indefinite-lived intangible assets were greater than their carrying amounts, and as a result, no impairment was required for the year then ended.

Additionally, there were no events or circumstances as of September 30, 2022 that indicated that the carrying amounts may not be recoverable.

Software Development and Cloud Computing Arrangement Implementation Costs

As a result, the Company recognized a $ 46.7 million impairment for definite-lived intangible assets for the year then ended.

See Note 8 for more information about the impairment of definite-lived intangible assets.

Software Development

The Company capitalizes cost for software developed or obtained for internal use, including domain names and internally developed software, and amortizes them over their estimated useful life, which is generally three to five years .

1 unchanged sentence

Capitalization ceases when a software project is substantially complete and ready for its intended use.

Cloud Computing Arrangement Implementation Costs

The Company capitalizes qualifying implementation costs under cloud computing arrangements (“CCA”).

Capitalization ceases once the software is ready for its intended use.

The capitalized CCA implementation cost is allocated between Prepaid expenses and other current assets and Other long-term assets on the accompanying consolidated balance sheets based on the expected amortization to be recognized within one year .

The total capitalized CCA implementation costs was $ 5.4 million and $ 1.7 million as of September 30, 2023 and 2022, respectively.

During the year ended September 30, 2023, the Company recorded $ 0.1 million of expense in Selling, general and administrative expenses on the accompanying consolidated statements of operations related to the amortization of CCA implementation costs.

No expense related to the amortization of CCA implementation costs was recorded during the year ended September 30, 2022.

Capitalized CCA implementation costs are amortized over the term of the implemented software agreement.

Capitalized CCA implementation costs are allocated between prepaid expenses and other current assets and other long-term assets on the accompanying consolidated balance sheets based on the expected amortization to be recognized within one year .

Total capitalized CCA implementation costs were $ 1.7 million and $ 5.4 million, as of September 30, 2024 and 2023, respectively, which are a result of various enterprise resource planning ("ERP") software agreements.

Accumulated amortization of these CCA implementation costs was $ 0.4 million and $ 0.1 million , as of September 30, 2024 and 2023, respectively.

The Company recorded $ 0.3 million and $ 0.1 million of expense during the year ended September 30, 2024 and 2023 , respectively, in selling, general and administrative expenses on the accompanying consolidated statements of operations related to the amortization of CCA implementation costs .

The Company recognized a portion of the previously capitalized CCA implementation costs into expense as part of the 2024 Restructuring discussed in Note 16.

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.

2 unchanged sentences

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.

At the time of acceptance or delivery, the customer is able to direct the use of, and obtain substantially all of the benefits.

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.

1 unchanged sentence

Revenue from parts and accessories sold directly to a customer (not on a repair order) are 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.

Revenue from parts and service operations (boat maintenance and repairs) is 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.

54 unchanged sentences

Loan costs are amortized to interest expense on a straight-line basis over the life of the loan, which approximates the effective interest method.

Derivative and hedging instruments

The Company utilizes derivative financial instruments to manage its interest rate risk.

The types of risks hedged are those relating to the variability of cash flows caused by fluctuations in interest rates.

The Company documents the management strategy and assess hedge effectiveness at inception and throughout the term of the hedging relationship.

Derivatives are reported at fair value on the accompanying consolidated balance sheets.

The changes in fair value on the hedges is reported as a component of accumulated other comprehensive loss on the accompanying consolidated balance sheets, and reclassified to either interest expense – floor plan or interest expense – other in the accompanying consolidated statements of operations based on the nature of the hedged transaction in the period during which the hedged transaction affects earnings.

Cash flows from hedging instruments, including cash receipts and payments, are classified on the consolidated statements of cash flows in the same category as the cash flows resulting from the item being hedged.

Use of Estimates

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Segment Information

Effective August 9, 2022, our reportable segments changed as a result of the Company’s 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:

We report our operations through two reportable segments:

Dealerships and Distribution.

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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

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.

In November 2023, the FASB issued ASU 2023-07, "Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures", which is intended to improve financial reporting by requiring disclosures of incremental segment information on an annual and interim basis.

The pronouncement is effective for a public company's annual reporting periods beginning after December 15, 2023, and interim periods within annual reporting periods beginning after December 15, 2024.

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 2025.

In December 2023, the FASB issued ASU 2023-09, "Income Taxes (Topic 740):

Improvements to Income Tax Disclosures", which is intended to improve the transparency, effectiveness and comparability of income tax disclosures by requiring greater disaggregation of information and additional disclosures.

The pronouncement is effective for a public company's annual reporting periods beginning after December 15, 2024.

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 2026.

Other than as noted above, there are no new accounting pronouncements that are expected to have a material effect on our consolidated financial statements.

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Fiscal Year 2024

For the year ended September 30, 2024, the Company completed the following transaction:

• On May 1, 2024, Garden State Yacht Sales, a full service marine retailer located in New Jersey

The table below summarizes the fair values of the assets acquired and liabilities assumed at the acquisition date:

Summary of Assets Acquired and Liabilities Assumed

($ in thousands) Total Acquisitions

Accounts receivable $ 113

Inventories 6,676

Prepaid expenses 11

Property and equipment 478

Operating lease right-of-use assets 4,360

Accounts payable ( 1,263 )

Accrued expenses ( 36 )

Customer deposits ( 267 )

Operating lease liabilities ( 4,360 )

Aggregate acquisition date fair value $ 5,712

Consideration transferred 5,712

Included in our results for the year ended September 30, 2024, the acquisition contributed $ 7.0 million to our consolidated revenue and income of $ 0.2 million to our net (loss) income before income tax expense.

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 $ 0.1 million for the year ended September 30, 2024.

On October 31, 2023, the Company exercised its right to acquire the remaining 20 % economic interest in Quality Assets and Operations, LLC for consideration totaling $ 18.8 million.

Subsequent to the acquisition, the Company owns 100 % of the economic interest in Quality Assets and Operations, LLC.

Fiscal Year 2023

For the year ended September 30, 2023, the Company completed the following transactions:

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The sellers retained a 20 % economic interest in Quality Boats.

The Company has the exclusive right, but not obligation, to acquire the remaining 20 % interest at any time before January 1, 2027.

The Company had the exclusive right, but not obligation, to acquire the remaining 20 % interest at any time before January 1, 2027 and exercised that right on October 31, 2023.

• On February 1, 2022, JIF Marine, a leading supplier of stainless steel ladders, dock products and other accessories which is based in Tennessee

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• On April 1, 2022, Denison Yachting, a leader in yacht and superyacht sales as well as ancillary yacht services, with 20 locations in 7 states

• On August 9, 2022, Ocean Bio-Chem, a leading supplier and distributor of appearance, cleaning, and maintenance products for the marine industry and the automotive, powersports, recreational vehicles, and outdoor power equipment markets with locations in Alabama and Florida.

• On August 9, 2022, Ocean Bio-Chem, Inc.

(now Ocean Bio-Chem, LLC), and Star Brite Europe, Inc.

(now Star Brite Europe, LLC) (collectively “Ocean Bio-Chem”) , a leading supplier and distributor of appearance, cleaning, and maintenance products for the marine industry and the automotive, powersports, recreational vehicles, and outdoor power equipment markets with locations in Alabama and Florida.

Consideration paid for the consummated acquisitions was $ 490.6 million with $ 459.5 million paid at closing (net of cash acquired), $ 1.1 million financed through a note payable to the sellers bearing interest at a rate of 4.0 % per year, estimated payments of $ 15.3 million in contingent consideration and the remaining $ 14.6 million with the issuance of shares of Class A common stock.

The notes are payable in one lump sum on December 1, 2024, with interest payments due quarterly.

The estimated payments of contingent consideration are part of multiple earnouts varying from the achievement of certain post-acquisition increases in adjusted EBITDA to the generation of acquisition leads for the Company.

The estimated payments of contingent consideration are part of

multiple earnouts varying from the achievement of certain post-acquisition increases in adjusted EBITDA to the generation of acquisition leads for the Company.

The acquisition contingent consideration was developed using weighted average projections based on the Company’s historical experience, current forecasts for the industry and current expectations of the ability to generate viable acquisition leads.

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Significant inputs to the market multiple method include the peer public company group and the financial performance of reporting units related to the peer public company group.

Fiscal Year 2021

For the year ended September 30, 2021, the Company completed the following transactions:

• On December 1, 2020, Tom George Yacht Group a retail marine dealership with two locations in Florida

• December 31, 2020, Walker Marine Group a retail marine dealership with five locations in Florida.

• On December 31, 2020, Roscioli Yachting Center, a full-service marina and yachting facility, with one location in Florida

• On August 1, 2021, Stone Harbor Marina a retail marine dealership with one location in New Jersey

• On September 1, 2021, PartsVu, an online marketplace for OEM marine parts, electronics and accessories with a warehouse in Florida

Consideration paid for the consummated acquisitions was $ 122.1 million with $ 107.5 million paid at closing (net of cash acquired), $ 2.1 million financed through a note payable to the sellers, estimated payments of $ 9.2 million in contingent consideration, $ 1.9 million in accrued purchase consideration and the remaining $ 1.5 million with the issuance of shares of Class A common stock.

The estimated payments of contingent consideration are part of multiple earnouts subject to the achievement of certain post-acquisition increases in adjusted EBITDA.

The acquisition contingent consideration was developed using weighted average projections based on the Company’s historical experience with acquisitions as well as current forecasts for the industry.

The minimum payout on acquisition contingent consideration is $ 0.2 million and the maximum payout is unlimited.

The table below summarizes the fair values of the assets acquired and liabilities assumed at the acquisition date, including the goodwill recorded as a result of the transactions:

($ in thousands) Walker Marine Group Roscioli Yachting Center Other Acquisitions Total Acquisitions

Accounts receivable $ 129 $ — $ 390 $ 519

Inventories 8,481 87 10,476 19,044

Prepaid expenses 39 1 180 220

Property and equipment 503 41,300 700 42,503

Identifiable intangible assets 8,520 1,530 13,940 23,990

Goodwill 26,927 2,993 25,512 55,432

Accounts payable ( 213 ) ( 180 ) — ( 393 )

Accrued expenses — ( 185 ) ( 47 ) ( 232 )

Customer deposits ( 3,033 ) — ( 2,248 ) ( 5,281 )

Notes payable – floor plan ( 7,563 ) — ( 6,134 ) ( 13,697 )

Aggregate acquisition date fair value $ 33,790 $ 45,546 $ 42,769 $ 122,105

Consideration transferred 33,790 45,546 42,769 122,105

The 2023, 2022 and 2021 acquisitions have resulted in the recording of goodwill that is expected to be deductible for tax purposes of $ 15.9 million, $ 173.2 million and $ 55.4 million for the years ended September 30, 2023, 2022 and 2021, respectively.

Included in our results for the year ended September 30, 2022, the acquisitions contributed $ 275.3 million to our consolidated revenue and $ 41.1 million to our income before income tax expense.

Costs related to acquisitions are included in transaction costs and primarily relate to legal, accounting, and valuation fees, which are charged directly to operations in the accompanying consolidated statements of operations as incurred in the amount of $ 7.5 million for the year ended September 30, 2022.

The 2023 and 2022 acquisitions have resulted in the recording of goodwill that is expected to be deductible for tax purposes of $ 15.9 million and $ 173.2 million for the years ended September 30, 2023 and 2022, respectively.

No goodwill was recorded as a result of the 2024 acquisition.

The following unaudited pro forma results of operations for the years ended September 30, 2024, 2023 and 2022 assumes that all acquisitions were completed on October 1, 2021.

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As part of the sale agreement, the Company entered into a lease with the purchasing party for a portion of the location.

The Company has accounted for this transaction as a sale and leaseback of the property in our condensed consolidated financial statements.

The Company has accounted for this transaction as a sale and leaseback of the property in our consolidated financial statements.

There was no gain or loss recorded as part of the transaction.

The lease for the property includes an initial term of 10 years.

The lease is accounted for as an operating lease and is included in the Operating lease right-of-use assets and Operating lease liabilities on the condensed consolidated balance sheet.

The lease is accounted for as an operating lease and is included in the operating lease right-of-use assets and operating lease liabilities on the consolidated balance sheet.

There were no dispositions of business entities during the years ended September 30, 2024 and 2022.

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Amounts due from manufacturers represent receivables for various manufacturer incentive programs and parts and service work performed pursuant to the manufacturers’ warranties.

Accounts receivable as of September 30, 2023 also consists of a receivable resulting from the disposition of Roscioli Yachting Center as the proceeds on disposal were received subsequent to September 30, 2023.

Accounts receivable as of September 30, 2023 also consists of a receivable resulting from the disposition of Roscioli Yachting Center as the proceeds on disposal were received during the year ended September 30, 2024.

The allowance for credit losses is estimated based on past collection experience, current conditions and reasonable and supportable forecasts.

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($ in thousands) September 30, 2024 September 30, 2023

Receivable for proceeds on the disposition of a business $ 45,100 $ —

Trade accounts receivable $ 32,578 $ 32,065

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Manufacturer receivable 11,435 11,288

Income tax receivable 9,370 —

Receivable for proceeds on the disposition of a business — 45,100

Total accounts receivable 73,820 113,878

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Total accounts receivable, net $ 73,269 $ 113,175

Inventories consisted of the following at:

Inventories consisted of the following:

($ in thousands) September 30, 2024 September 30, 2023

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Pre-owned vessels 79,234 61,627

Parts and accessories, work in process, net 76,842 78,262

Total inventories, net $ 609,616 $ 372,959

Parts and accessories, work in process 68,770 76,842

Total inventories $ 590,838 $ 609,616

Property and Equipment

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Acquisitions during the year ended September 30, 2023 18,481 8,800 — — 945 1,878 11,623

Amortization expense for the year ended September 30, 2022 — — ( 1,183 ) ( 6,260 ) ( 104 ) ( 83 ) ( 7,630 )

Net balance as of September 30, 2022 378,588 186,779 14,274 101,230 1,970 2,218 306,471

Acquisitions during the year ended September 30, 2023 18,481 8,800 — — 945 1,878 11,623

Impairment recorded during the year ended September 30, 2023 ( 57,710 ) ( 43,016 ) ( 8,309 ) ( 38,367 ) — — ( 89,692 )

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Net balance as of September 30, 2023 336,602 149,921 4,419 52,114 2,387 3,483 212,324

Acquisitions during the year ended September 30, 2024 — — — — — 909 909

Amortization expense for the year ended September 30, 2024 — — ( 455 ) ( 5,711 ) ( 637 ) ( 1,039 ) ( 7,842 )

Net balance as of September 30, 2024 $ 336,602 $ 149,921 $ 3,964 $ 46,403 $ 1,750 $ 3,353 $ 205,391

During the year ended September 30, 2023 the Company recorded an impairment loss of $ 147.4 million related to the goodwill and identifiable intangible assets in order to adjust carrying value to estimated fair value.

The impairment loss is recorded in restructuring and impairment in the consolidated statements of operations.

Of the $ 147.4 million impairment loss, $ 6.5 million and $ 140.9 million is reported in the Dealerships and Distribution reporting segment, respectively.

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See Note 2 for more information about our annual impairment tests of goodwill and identifiable intangible assets.

Amortization expense was $ 13.4 million and $ 7.6 million for the years ended September 30, 2023 and 2022, respectively, and is recorded in Depreciation and amortization in the consolidated statements of operations.

No amortization expense was recorded for the year ended September 30, 2021.

For acquisitions during the year ended September 30, 2023, the weighted average useful life of total intangible assets is 4.3 years with the weighted average useful lives of acquisitions for domain names and internally developed software being 4.3 and 4.4 years, respectively.

Amortization expense was $ 7.8 million, $ 13.4 million and $ 7.6 million for the years ended September 30, 2024, 2023 and 2022 , respectively, which includes amortization expense of $ 1.0 million , $ 0.6 million and $ 0.1 million for the years ended September 30, 2024, 2023 and 2022 , respectively, for internally developed software.

Amortization expense is recorded in depreciation and amortization in the

consolidated statements of operations.

For internally developed software acquisitions during the year ended September 30, 2024, the weighted average useful life of total intangible assets is 3.6 years.

The following table summarizes the expected amortization expense for the fiscal years 2025 through 2029 and thereafter ($ in thousands):

Thereafter 17,184

As of September 30, 2023, the carrying value of goodwill totaled approximately $ 336.6 million, of which $ 295.3 million was related to our Dealerships reporting segment and $ 41.3 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.

As of September 30, 2024 and 2023, the carrying value of goodwill totaled approximately $ 336.6 million, of which $ 295.3 million was related to our Dealerships reporting segment and $ 41.3 million was related to our Distribution reporting segment.

Other Payables and Accrued Expenses

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The program is administered by Wells Fargo Commercial Distribution Finance, LLC (“Wells Fargo”).

On February 14, 2023, the Company and certain of its subsidiaries entered into the Fourth Amendment to the Seventh Amended and Restated Inventory Financing Agreement (as amended, the “ Seventh Inventory Financing Facility") with Wells Fargo and the other financial institutions party thereto to increase the maximum borrowing amount available under the Seventh Inventory Financing Facility to $ 550.0 million.

The Seventh Inventory Financing Facility was set to expire on December 1, 2023.

On November 14, 2023 the Company entered into the Eighth Amended and Restated Inventory Financing Agreement to, among other things, increase the maximum borrowing amount available to $ 650.0 million and extend the term.

See Note 20 for additional information regarding the new agreement.

On November 14, 2023, the Company and certain of its subsidiaries entered into the Eighth 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 under the Inventory Financing Facility to $ 650.0 million and extend the term.

The Inventory Financing Facility expires on March 1, 2026.

The outstanding balance of the facility was $ 443.4 million and $ 489.0 million, as of September 30, 2024 and 2023, respectively.

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Wells Fargo will finance 100.0 % of the vendor invoice price for new boats, engines, and trailers.

As of September 30, 2023 the interest rate on the Seventh Inventory Financing Facility ranged from 8.18 % to 10.43 % for new inventory and 8.43 % to 10.68 % for pre-owned inventory.

As of September 30, 2022 the interest rate on the Seventh Inventory Financing Facility ranged from 5.33 % to 7.58 % for new inventory and 5.58 % to 7.83 % for pre-owned inventory.

As of September 30, 2024 the interest rate on the Inventory Financing Facility ranged from 8.03 % to 10.28 % for new inventory and 8.28 % to 10.53 % for pre-owned inventory.

As of September 30, 2023 the interest rate on the Inventory Financing Facility ranged from 8.18 % to 10.43 % for new inventory and 8.43 % to 10.68 % for pre-owned inventory.

Borrowing capacity available at September 30, 2024 and September 30, 2023 was $ 206.6 million and $ 61.0 million, respectively.

The Seventh 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 Seventh Inventory Financing Facility).

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 September 30, 2023.

The collateral for the Seventh Inventory Financing Facility consists primarily of our inventory that is financed through the Seventh 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.

The Company was not in compliance with all covenants for the reporting period ended September 30, 2024;

however, the covenant noncompliance was waived pursuant to the Consent, Waiver and Second Amendment to Eighth Amended and Restated Inventory Financing Agreement (the "November 2024 Inventory Financing Amendment") entered into on November 13, 2024 as discussed in Note 22.

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 Credit

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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.

As of September 30, 2024, the A&R Revolving Facility was scheduled to mature on August 9, 2027.

As of September 30, 2024, the A&R Term Loan was 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 Seventh Inventory Financing Facility.

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 September 30, 2023.

The Company was not in compliance with all covenants for the reporting period ended September 30, 2024;

however, the covenant noncompliance was waived pursuant to Amendment No.

to the Amended and Restated Credit Agreement and Waiver and Amendment No.

1 to Pledge and Security Agreement ("Amendment No.

6") entered into on November 13, 2024 as discussed in Note 22.

Long-term debt consisted of the following at:

($ in thousands) September 30, 2023 September 30, 2022

($ in thousands except monthly payment amounts) September 30, 2024 September 30, 2023

Term note payable to Truist Bank, secured and bearing interest at 7.85 % at September 30, 2024 and 7.53 % at September 30, 2023.

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$ 375,469 $ 428,313

Revolving note payable for an amount up to $ 65.0 million to Truist Bank, secured and bearing interest at 7.50 % at September 30, 2023.

Revolving note payable for an amount up to $ 65.0 million to Truist Bank, secured and bearing interest at 7.75 % at September 30, 2024 and 7.50 % at September 30, 2023.

The note requires full repayment on August 9, 2027

51,150 30,000

Notes payable to commercial vehicle lenders secured by the value of the vehicles bearing interest at rates ranging from 0.0 % to 10.8 % per annum.

The notes require monthly installment payments of principal and interest ranging from $ 100 to $ 3,100 through September 2028

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

The notes require monthly installment payments of principal and interest ranging from $ 200 to $ 3,100 through April 2029

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.

Note payable to Tom George Yacht Group, unsecured and bearing interest at 5.5 % per annum.

The note was repaid in full on December 1, 2023.

Total debt outstanding 430,306 465,140

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Debt issuance costs are amortized on a straight-line basis over the life of the loan, which approximates the effective interest method.

During the fiscal year ended 2023, the Company did not capitalize any loan costs.

During the fiscal year ended 2024, the Company capitalized loan costs of $ 2.2 million.

During the fiscal year ended 2023, the Company did not capitalize any loan costs.

In connection with entering into the A&R Credit Facility, the Company wrote off unamortized debt issuance cost of $ 0.4 million which was included in loss on extinguishment of debt in the consolidated statements of operations for the year ended September 30, 2022.

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As of September 30, 2024 and 2023, the Company had $ 1.6 million and $ 0.7 million, respectively, in letters of credit outstanding under the A&R Revolving Facility.

Derivative and Hedging Instruments

The Company is subject to interest rate risk as a result of the Inventory Financing Facility and A&R Credit Facility required interest payments.

In September 2024, the Company entered into two interest rate swap agreements which are designed to provide a hedge against changes in variable rate cash flows regarding fluctuations in the SOFR and Term SOFR rates which are used in calculating interest payments.

The following table provides information on the attributes of each swap as of September 30, 2024 :

Inception Date Hedged Rate Notional Value at Inception (in thousands) Maturity Date

September 2024 SOFR $ 200,000 September 2027

September 2024 Term SOFR $ 200,000 September 2027

The fair value of the cash flow swaps is calculated using an income approach.

The income approach involves using the quoted price for economically equivalent inputs or valuation methodologies, assumptions and inputs, which in the case of projected future cash flows, discount such cash flows to a single net present value amount.

The following table provides information regarding the fair value of the interest rate swap agreements and the impact on the consolidated balance sheets at ($ in thousands):

Balance Sheet Location September 30, 2024 September 30, 2023

Prepaid expenses and other current assets $ 1,560 $ —

Other long-term liabilities ( 3,626 ) —

Net asset (liability) $ ( 2,066 ) $ —

The interest rate swaps qualify for cash flow hedge accounting treatment.

The interest rate swaps are marked to market each reporting date and any unrealized gains or losses are included in accumulated other comprehensive (loss) income and reclassified into interest expense in the same period during which the hedged transactions affect earnings.

Information about the effect of the interest swap agreements in the accompanying consolidated statements of operations and consolidated statements of comprehensive income (loss), is as follows ($ in thousands):

Year Ended September 30, Results Recognized in Accumulated Other Comprehensive (Loss) Income (effective Portion) Location of Results Reclassified from Accumulated Other Comprehensive Income (Loss) to Earnings Results Reclassified from Accumulated Other Comprehensive Income (Loss) to Earnings

2024 $ ( 2,066 ) Interest expense – other and Interest expense – floor plan $ —

As of September 30, 2024, the amount expected to be reclassified out of accumulated other comprehensive (loss) income into earnings during the next 12 months is gains of $ 1.6 million.

The ultimate amount recognized will vary based on fluctuations of interest rates through the maturity dates.

Stockholders’ Equity

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The LTIP provides for the grant, from time to time, at the discretion of the board of directors of OneWater Marine Inc.

(the “Board of Directors”) 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 “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 1,611,664 .

The LTIP is and will continue to be administered by the Board of Directors, except to the extent the Board of Directors elects a committee of directors to administer the LTIP.

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 fiscal year ended September 30, 2023, the Board of Directors approved the grant of 137,057 time-based restricted stock units.

During the fiscal year ended September 30, 2024, the Board approved the grant of 204,557 time-based restricted stock units.

Of this amount, 34,160 restricted stock units fully vest on October 1, 2024 and the remaining 170,397 restricted stock units vest in three equal annual installments commencing on October 1, 2024.

During the fiscal year ended September 30, 2023 , the Board of Directors approved the grant of 88,018 performance-based restricted stock units, which represents 100 % of the target award.

During the fiscal year ended September 30, 2024 , the Board approved the grant of 141,924 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 to the Company.

Of this amount, 13,288 performance-based restricted stock units fully vest on October 1, 2023 and the remaining 74,730 restricted stock units vest in three equal annual installments commencing on October 1, 2023.

As of September 30, 2023, the Company achieved 100 % of the performance target for the units fully vesting on October 1, 2023.

As of September 30, 2023, the Company achieved 40 % of the performance target for the awards with units vesting in three equal annual installments commencing on October 1, 2023.

The performance-based restricted stock units vest in three equal annual installments commencing on October 1, 2024.

As of September 30, 2024, the Company achieved 74 % of the performance target.

Compensation cost for time-based restricted stock units is based on the closing price of our common stock on the date immediately preceding the grant and is recognized on a graded basis over the applicable vesting periods.

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In addition, in connection with the vesting of restricted stock units, we repurchase a portion of shares equal to the amount of employee income tax withholding.

We recognize forfeitures of performance-based restricted stock units and time-based restricted stock units as the forfeitures occur.

Net (Loss) Earnings Per Share

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Net (loss) earnings per share of Class A common stock – diluted $ ( 0.39 ) $ ( 2.69 ) $ 9.13

On March 30, 2022, the Board of Directors approved a share repurchase program up to $ 50.0 million.

During the year ended September 30, 2023, the Company repurchased and retired 63,353 shares of Class A common stock under the repurchase program for a purchase price of approximately $ 1.6 million.

On March 30, 2022, the Board approved a share repurchase program up to $ 50.0 million.

No shares of Class A common stock were repurchased by the Company during the year ended September 30, 2024.

As of September 30, 2024 the Company has repurchased and retired 73,487 shares of Class A common stock under the repurchase program for a purchase price of approximately $ 1.9 million.

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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 of Directors as of January 13, 2021 (the “Adoption Date”), subject to stockholder approval at the Annual Meeting.

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 of Directors or by one or more committees to which the Board of Directors delegates such administration.

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, subject to certain adjustments as set forth in the ESPP.

Up to a maximum of 453,870 shares of the Company’s Class A common stock may be issued under the ESPP as of September 30, 2024, 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 Company recorded equity-based compensation for the ESPP of $ 0.7 million and $ 0.2 million during the years ended September 30, 2023 and 2022, respectively.

The Company recorded equity-based compensation for the ESPP of $ 0.6 million, $ 0.7 million and $ 0.2 million during the years ended September 30, 2024, 2023 and 2022 , respectively.

As of September 30, 2024 and 2023, we had current liabilities of $ 0.3 million and $ 0.4 million.

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During the year ended September 30, 2024, 59,089 shares were issued under the ESPP at an average price per share of $ 25.72 .

No purchases were made under the ESPP during the year ended September 30, 2022 .

During the year ended September 30, 2023, 86,050 shares were issued under the ESPP at an average price per share of $ 24.31 .

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.

Volatility is based on the historical volatility of our common stock.

The risk-free rate for periods within the contractual term of the options is based on the U.S.

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The following are the assumptions used for the fiscal years ended September 30, 2024 and 2023 :

2024 2023 2022

Dividend yield 0.0 % 0.0 % 0.0 %

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Volatility 37.6 - 62.7 %

Expected life Six months Six months

37.6 - 45.6 %

Expected life Six months Six months Six months

Distributions

During the fiscal years ended September 30, 2024, 2023 and 2022, the Company made distributions to OneWater Unit Holders for certain permitted tax payments.

Dividends paid to holders of Class A common stock, distributions paid to OneWater Unit Holders and dividends payable to restricted stock unit holders are referred to herein collectively as “dividends”.

Dividends declared are reported as a reduction of retained earnings.

Dividends paid to OneWater Unit Holders are recorded as a reduction in non-controlling interest.

On June 17, 2021, the Board of Directors declared a special cash dividend of $ 1.80 per share.

The cash dividend of approximately $ 27.1 million was paid on July 19, 2021 to holders of Class A common stock and OneWater Unit Holders.

Additionally, a $ 1.0 million cash dividend for restricted stock unit holders was accrued for payment to holders upon future vesting of restricted stock unit awards outstanding on the date the dividend was declared.

During the years ended September 30, 2023 and 2022 , $ 0.3 million and $ 0.2 million, respectively, of the previously accrued balance was paid to restricted stock unit holders.

The remaining $ 0.5 million is recorded in Other payables and accrued expenses in the consolidated balance sheet as of September 30, 2023.

Non-Controlling Interest

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As discussed in Note 4, the Company acquired an 80 % economic interest in Quality Boats during the year ended September 30, 2022.

The Company has the exclusive right, but not obligation, to acquire the remaining 20 % economic interest at any time before January 1, 2027.

On November 1, 2023, the Company exercised the right to acquire the remaining 20 % economic interest in Quality Boats.

See Note 20 for additional information.

The Company had the exclusive right, but not obligation, to acquire the remaining 20 % economic interest at any time before January 1, 2027.

On October 31, 2023, the Company exercised the right to acquire the remaining 20 % economic interest in Quality Boats.

Retirement Plan

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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.

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:

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Investment in equity securities $ 128 $ — $ — $ 128

Derivative and hedging instruments — 1,560 — 1,560

Contingent consideration — — 15,161 15,161

Derivative and hedging instruments — 3,626 — 3,626

($ in thousands) Level 1 Level 2 Level 3 Total

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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 long-term assets in the consolidated balance sheets and consists entirely of our investment in Forza X1, Inc.

The investment in equity securities balance is recorded in other long-term assets in the consolidated balance sheets.

The portion of unrealized losses recognized related to equity securities still held as of September 30 consists of the following:

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2024 Year Ended September 30,

2023 Year Ended September 30,

Net losses recognized during the period on equity securities $ 198 $ 446 $ 1,228

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Unrealized losses recognized during the reporting period on equity securities still held at the reporting date $ 198 $ 446 $ 1,228

There were no unrealized losses (gains) recognized during the year ended September 30, 2021.

We estimate the fair value of contingent consideration using a probability-weighted discounted cash flow model based on forecasted future earnings or other agreed upon metrics including the production of acquisition leads.

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We determined the carrying value of our cash and cash equivalents, accounts receivable, accounts payable, other payables and accrued expenses, floor plan notes payable, term note payable with Truist Bank, seller notes payable and company vehicle notes payable approximate their fair values because of the nature of their terms and current market rates of these instruments.

Derivative and hedging instruments are recorded at fair value as discussed in Note 12.

Restructuring and Impairment

In March 2024, the Company evaluated its operations and decided to undergo a restructuring plan (the "2024 Restructuring") which resulted in the reduction of headcount and retail locations, cancellation of certain dealer agreements, and the cancellation of certain in-progress information and technology ("IT") related projects.

As a result of the 2024 Restructuring, during the year ended September 30, 2024 the Company recognized $ 15.3 million of charges, of which $ 12.4 million is recorded in restructuring and impairment, $ 1.8 million is recorded in new boat cost of sales and $ 1.1 million is recorded in service, parts & other cost of sales in the consolidated statement of operations.

Of the $ 15.3 million of charges related to the 2024 Restructuring, $ 13.0 million and $ 2.3 million is reported in the Dealerships and Distribution reporting segment, respectively.

No charges related to the 2024 Restructuring were recorded during the years ended September 30, 2023 and 2022.

As of September 30, 2024, $ 1.0 million was recorded in other payables and accrued expenses in the consolidated balance sheet related to the 2024 Restructuring.

No amounts were recorded in the consolidated balance sheet as of September 30, 2023 .

During the year ended September 2023, the Company recorded impairment charges to adjust the carrying value of the goodwill and identifiable intangible assets to fair value (the "2023 Impairment").

As a result of the 2023 Impairment, during the year ended September 30, 2023 the Company recognized a loss of $ 147.4 million , which is recorded in restructuring and impairment on the consolidated statement of operations.

Of the $ 147.4 million impairment loss, $ 6.5 million and $ 140.9 million is reported in the Dealerships and Distribution reporting segment, respectively.

No charges related to the 2023 Impairment were recorded during the years ended September 30, 2024 and 2022.

See note 8 for more information about the impairment of goodwill and identifiable intangible assets.

The Company is a corporation and, as a result is subject to U.S.

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State income taxes, net of federal benefit ( 2.4 ) 3.3 2.9

Non-deductible items ( 23.3 ) — —

Federal and state credits 10.1 — —

Loss on impairment — ( 11.4 ) —

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Net operating loss 1,216 1,557

Other 1,495 —

Total 37,278 35,878

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Deferred tax liabilities:

Investment in partnerships $ — $ 2,410

Fixed assets $ — $ 107

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Deferred tax assets, net $ 37,278 $ 35,066

The Company had federal net operating loss carryforwards from underlying corporate entities of approximately $ 6 million resulting in a deferred tax asset of $ 1.6 million.

The Company had federal net operating loss carryforwards from underlying corporate entities of approximately $ 4.3 million and $ 6.0 million resulting in a deferred tax asset of $ 0.9 million and $ 1.6 million as of September 30, 2024 and 2023, respectively.

federal net operating loss carryforwards have no expiration but can only be used to offset up to 80% of future taxable income annually.

The Company has Alabama net operating loss carryforwards of $ 0.3 million which has no limitation in use and expire in the years 2037 to 2040.

The Company projects to fully utilize the net operating losses during subsequent fiscal years.

The Company has IRC Section 163(j) interest expense carryforward of approximately $ 3.7 million , resulting in a deferred tax asset of $ 0.9 million as of September 30, 2024.

The IRC Section 163(j) interest expense carryforward has no expiration.

The Company recognizes deferred tax assets to the extent it believes these assets are more-likely-than-not to be realized.

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In November 2022, the Company received notification that the IRS intended to commence an audit of the federal income tax return of OneWater LLC’s partnership for the tax year ended December 31, 2020.

The audit is ongoing and the outcome and timing of settlements of asserted income tax liabilities, if any, are subject to significant uncertainty.

The Company received a letter from the IRS in July 2024 noting the audit was complete with no adjustments.

In November 2024, the Company received notification that the Florida Department of Revenue intended to commence a corporate income tax audit of OneWater Inc for the tax years ended September 30, 2021, 2022 and 2023.

The audit is ongoing and the outcome and timing of settlements of asserted income tax liabilities, if any, are uncertain.

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 September 30, 2023 and 2022, our liability under the Tax Receivable Agreement was $ 43.1 million and $ 46.4 million, respectively, representing 85 % of the calculated net cash savings in U.S.

As of September 30, 2024 and 2023, our undiscounted liability under the Tax Receivable Agreement was $ 40.6 million and $ 43.1 million, respectively, representing 85 % of the calculated net cash savings in U.S.

federal, state and local income tax and franchise tax that OneWater Inc anticipates realizing in future years from the result of certain increases in tax basis and certain tax benefits attributable to imputed interest as a result of OneWater Inc’s acquisition of OneWater LLC Units pursuant to an exercise of the Redemption Right or the Call Right (each as defined in the amended and restated limited liability company agreement of OneWater LLC (the “OneWater LLC Agreement”)).

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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.

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

Commitments and Contingencies

Employment Agreements

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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.

In the opinion of management, it is not reasonably probable that the pending litigation, disputes or claims against the Company, as of September 30, 2024 , will have a material adverse effect on its financial condition, results of operations or cash flows.

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.

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Related Party Transactions

In accordance with agreements approved by the Board of Directors, we purchased inventory, in conjunction with our retail sale of the products, from certain entities affiliated with the Company.

In accordance with agreements approved by the Board, we purchased inventory, in conjunction with our retail sale of the products, from certain entities affiliated with the Company.

For the years ended September 30, 2024, 2023 and 2022, $ 124.4 million, $ 94.3 million and $ 84.2 million, respectively, in total purchases were incurred under these arrangements.

In accordance with agreements approved by the Board of Directors, certain entities affiliated with the Company receive fees for rent of commercial property.

In accordance with agreements approved by the Board, certain entities affiliated with the Company receive fees for rent of commercial property.

For the years ended September 30, 2024, 2023 and 2022, $ 2.5 million, $ 2.1 million and $ 2.8 million, respectively, in total expenses were incurred under these arrangements.

Additionally, see Note 4 for information regarding a sale and leaseback transaction with an entity affiliated with the Company in connection with an acquisition by the Company.

In accordance with agreements approved by the Board of Directors, the Company received fees from certain entities and individuals affiliated with the Company for goods and services.

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.

For the years ended September 30, 2024, 2023 and 2022, $ 4.0 million, $ 1.1 million and $ 6.3 million, respectively, were recorded under these arrangements.

In accordance with agreements approved by the Board of Directors, the Company made payments to certain entities and individuals affiliated with the Company for goods and services.

In accordance with agreements approved by the Board, the Company made payments to certain entities and individuals affiliated with the Company for goods and services.

For the years ended September 30, 2024, 2023 and 2022, $ 0.1 million, $ 0.1 million and $ 0.2 million, respectively, were recorded under these arrangements.

In connection with transactions noted above, the Company was due $ 2.0 million, as recorded within accounts receivable as of September 30, 2022.

No amounts were due to the Company as of September 30, 2023.

Additionally, the Company owed $ 4.7 million and $ 0.2 million as recorded within accounts payable at September 30, 2023 and 2022, respectively.

In connection with transactions noted above, the Company owed $ 6.0 million and $ 4.7 million as recorded within accounts payable on the consolidated balance sheets at September 30, 2024 and 2023, respectively.

In connection with the Tax Receivable Agreement, the Company made payments to certain entities and individuals affiliated with the Company.

For the years ended September 30, 2024, 2023 and 2022, $ 2.4 million , $ 2.2 million and $ 0.8 million, respectively, in total payments were made under the agreement.

In connection with the Tax Receivable Agreement, the Company owed $ 36.2 million and $ 38.7

million as recorded within current portion of tax receivable agreement liability and tax receivable agreement liability on the consolidated balance sheets at September 30, 2024 and 2023, respectively.

See further discussion of our Tax Receivable Agreement in Note 17.

Segment Information

Effective August 9, 2022, our reportable segments changed as a result of the Company’s acquisition of Ocean Bio-Chem, which changed managements reporting structure and operating activities.

We now report our operations through two reportable segments:

We report our operations through two reportable segments:

(1) Dealerships and (2) Distribution.

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Revenue $ 1,616,867 $ 156,060 $ ( 297 ) $ 1,772,630

Income from Operations 163,229 ( 145,154 ) ( 8 ) 18,067

Income (loss) from operations 67,613 ( 2,750 ) ( 45 ) 64,818

Depreciation and amortization 12,638 9,549 — 22,187

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Change in fair value of contingent consideration 4,248 — — 4,248

Loss on impairment 6,500 140,902 — 147,402

Restructuring and impairment 13,049 2,269 — 15,318

Total assets 1,357,650 232,351 ( 12 ) 1,589,989

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Revenue $ 1,755,423 $ 181,083 $ ( 196 ) $ 1,936,310

Income (loss) from operations 163,229 ( 145,154 ) ( 8 ) 18,067

Depreciation and amortization 10,731 16,058 — 26,789

Transaction costs 1,587 252 — 1,839

Change in fair value of contingent consideration ( 1,893 ) 289 — ( 1,604 )

Restructuring and impairment 6,500 140,902 — 147,402

Total assets 1,435,023 254,164 ( 28 ) 1,689,159

As of and for the Year Ended September 30, 2022

($ in thousands) Dealerships Distribution Eliminations Total

Revenue $ 1,608,972 $ 135,850 $ — $ 1,744,822

Income from operations 211,401 6,432 — 217,833

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Management evaluated events occurring subsequent to September 30, 2024 and other than as noted below determined that no material recognizable subsequent events occurred.

On October 31, 2023, the Company exercised its right to acquire the remaining 20 % economic interest in Quality Boats and, as a result, the Company now owns 100 % of the economic interest in Quality Boats.

On November 14, 2023, the Company entered into the Eighth Amended and Restated Inventory Financing Agreement (the "Inventory Financing Facility") to, among other things, increase the maximum borrowing amount available to $ 650.0 million.

Loans under the Inventory Financing Facility may be extended from time to time to enable the Company to purchase inventory from certain manufacturers with interest calculated using the Adjusted 30-Day Average SOFR plus an applicable margin.

The other terms of the agreement remained largely unchanged.

The Inventory Financing Facility expires on March 1, 2026.

On November 13, 2024, the Company and certain of its subsidiaries entered into the November 2024 Inventory Financing Amendment, with Wells Fargo and other lenders party thereto.

The November 2024 Inventory Financing Amendment amends the Inventory Financing Facility to, among other things, (i) modify certain definitions, terms and conditions, (ii) adjust the minimum fixed charge coverage ratio, (iii) adjust the maximum funded debt to EBITDA ratio, (iv) establish a new minimum liquidity measure, (v) allow for certain swap transactions to mitigate risk in the ordinary course of business, (iv) reduce the maximum borrowing capacity to $ 595.0 million, and (vii) waive certain covenant compliance requirements, including for the period ended September 30, 2024.

On November 13, 2024, the Company and certain of its subsidiaries entered into Amendment No.

6 with Truist Bank, as administrative agent, and other lenders party thereto.

Amendment No.

6 amended the Amended and Restated Credit Agreement to, among other things, (i) modify certain definitions, terms and conditions, (ii) adjust the minimum fixed charge coverage ratio, (iii) adjust the maximum leverage ratio measures, (iv) adjust the minimum liquidity measure, (v) modify the maturity date to be July 31, 2026, and in connection therewith, the repayment schedule, and (vi) waive certain covenant compliance requirements, including for the period ended September 30, 2024.

Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.

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-K

Item 8. Financial Statements and Supplementary Data