What changed in this filing

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Item 1A. Risk Factors

2025-12-15 compared with 2024-12-10 · 164 added, 179 removed, 610 unchanged (36% of the section changed)

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Investing in our Class A common stock involves risks.

Before making any investment decision, you should carefully consider the information in this Form 10-K, including the risks described below, the matters addressed under “Special Note Regarding Forward-Looking Statements,” our consolidated financial statements and the related notes, and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Some of these risks include:

Before making any investment decision, you should carefully consider the information in this Annual Report on Form 10-K, including the risks described below, the matters addressed under “Special Note Regarding Forward-Looking Statements,” our consolidated financial statements and the related notes, and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Some of these risks include:

• General economic conditions and consumer spending patterns can have a material adverse effect on our business, financial condition and results of operations.

• Severe weather events, including hurricanes, floods, and other natural disasters, can disrupt our operations, damage inventory or facilities, impact customer demand, and materially and adversely affect our business, financial condition, and results of operations.

• Changes in geopolitical conditions—including fluctuations in tax laws, the imposition or increase of tariffs, trade restrictions, international supply chain disruptions, and other governmental policies—can increase our costs, limit product availability, and adversely affect consumer demand and our overall operating performance.

• The availability and costs of borrowed funds can adversely affect our ability to obtain adequate boat inventory, the ability and willingness of our customers to finance boat purchases and our ability to fund future acquisitions.

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is a holding company.

OneWater Inc.’s only material asset is its equity interest in OneWater LLC, and OneWater Inc.

OneWater Inc.’s only material asset is its direct and indirect equity interest in OneWater LLC, and OneWater Inc.

is accordingly dependent upon distributions from OneWater LLC to pay taxes, make payments under the Tax Receivable Agreement and cover OneWater Inc.’s corporate and other overhead expenses.

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• We may be unable to adequately maintain, enforce, and protect our intellectual property rights and we may be accused of infringing the intellectual property rights of third parties, which could have a material adverse effect on our business, financial condition, and operations.

• Climatic events may adversely impact our operations, disrupt the business of our third party vendors on whom we rely upon for products and services, and may not be adequately covered by our insurance.

Our business, financial condition and results of operations could be materially adversely affected by any of these risks or uncertainties discussed herein.

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General economic conditions and consumer spending patterns can have a material adverse effect on our business, financial condition and results of operations.

General economic conditions, including changes in employment levels, consumer demand, preferences and confidence levels, the availability and cost of credit, fuel prices, levels of discretionary personal income, interest rates, periods of economic or political instability, public health crises, inflation, and consumer spending patterns can negatively impact our operating results.

General economic conditions, including changes in employment levels, consumer demand, preferences and confidence levels, the availability and cost of credit, fuel prices, levels of discretionary personal income, interest rates, periods of economic or political instability, public health crises, inflation, international trade policies, and consumer spending patterns can negatively impact our operating results.

Unfavorable local, regional, national or global economic developments or uncertainties regarding future economic prospects could reduce or defer consumer spending in the markets we serve and adversely affect our business.

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In addition, such an increase or adverse change could reduce the availability or increase the costs of obtaining new debt and refinancing existing indebtedness or negatively impact the market price of our Class A common stock.

We are subject to risks associated with international trade policies, including tariffs and other restrictions, which could increase our costs, disrupt our supply chain, or otherwise adversely affect our business, financial condition and results of operations.

We source certain boats, components, and parts used in both the sale and service of boats from foreign manufacturers and suppliers, either directly or through our manufacturer partners.

This includes fully assembled boats manufactured outside of the United States, component parts integrated into boats manufactured domestically, and parts used in post-sale servicing, warranty work, and aftermarket sales.

Our Distribution segment, which includes the sale of marine parts and accessories through our network of retail and wholesale channels, also sources a portion of its inventory from international suppliers or contains components manufactured abroad.

As a result, our business and operations are subject to risks associated with international trade, including changes in U.S.

or foreign government policies, tariffs, duties, import restrictions, export restrictions, sanctions, or other trade barriers.

Tariffs or other governmental actions that limit trade with certain foreign countries, particularly those that supply boats, components, or aftermarket parts, could increase our procurement and manufacturing costs, delay delivery timelines, and limit the availability of critical inventory.

For example, tariffs imposed on boats manufactured in Europe or parts sourced from Asia could materially increase the cost of certain units or product categories or render specific product lines less competitive in the U.S.

Even where boats are manufactured in the U.S., many rely on imported components, and tariffs on those inputs could increase costs for our manufacturing partners, which may in turn be passed on to us through price increases.

Likewise, our Distribution segment could experience similar margin compression or inventory shortfalls if costs increase or global supply chain availability declines.

Additionally, uncertainty surrounding U.S.

trade policy, including the potential for retaliatory tariffs or escalating trade disputes, may create volatility in pricing or lead to disruptions in the flow of goods.

If our suppliers are unable to absorb increased costs or if we are unable to pass those costs on to customers without negatively impacting demand, our gross margins and overall profitability could be adversely affected.

Any material disruption to our ability to source boats, components, or parts in a timely or cost-effective manner—whether for new sales, warranty obligations, or aftermarket and distribution operations—could have a material adverse effect on our business, financial condition and results of operations.

Risks Related to Our Industry and Competition

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We depend on our manufacturers for the sale of new boats.

Sales of new boats from our top ten brands represents approximately 41.7%, 39.4% and 41.8% of total sales for the fiscal years ended September 30, 2024, 2023 and 2022, respectively, making them major suppliers of our company.

Of this amount, Malibu Boats, Inc., including its brands Malibu, Axis, Cobalt, Pursuit, Maverick, Hewes, Cobia and Pathfinder accounted for 13.1%, 13.9% and 15.6% of our consolidated revenue for the fiscal years ended September 30, 2024, 2023 and 2022, respectively.

Sales of new boats from our top ten brands represents approximately 40.8%, 41.7% and 39.4% of total revenues for the fiscal years ended September 30, 2025, 2024 and 2023, respectively, making them major suppliers of our company.

Of this amount, Malibu Boats, Inc., including its brands Malibu, Axis, Cobalt, Pursuit, Maverick, Hewes, Cobia and Pathfinder accounted for 12.2%, 13.1% and 13.9% of our total revenues for the fiscal years ended September 30, 2025, 2024 and 2023, respectively.

Any adverse change in the reputation, product development efforts, technological advancement, manufacturing capabilities, supply chain and third-party suppliers and financial condition of our manufacturers and their respective brands, would have a substantial adverse impact on our business.

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We also enter into renewable annual dealer agreements with manufacturers, and there is no guarantee that we will be able to renew such dealer agreements in the future.

We may not be able to easily replace the loss of certain manufacturers or brands, including at the necessary quantity, quality or price, and the loss of certain manufacturers or brands may therefore have an adverse material effect on our business, results of operations and financial condition.

We may not be able to easily replace the loss of certain manufacturers or brands,

including at the necessary quantity, quality or price, and the loss of certain manufacturers or brands may therefore have an adverse material effect on our business, results of operations and financial condition.

Boat manufacturers exercise control over our business.

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Over the three-year period ended September 30, 2025, the average revenue for the quarterly periods ended December 31, March 31, June 30 and September 30 represented approximately 20%, 27%, 30% and 23%, respectively, of our average annual revenue.

With the exception of Florida, we generally realize significantly lower sales and higher levels of inventories, and related floor plan borrowings, in the quarterly periods ending December 31 and March 31.

With the exception of Florida, we generally realize lower sales and higher levels of inventories, and related floor plan borrowings, in the quarterly periods ending December 31 and March 31.

Revenue generated from our dealerships in Florida serves to offset generally lower winter revenue in our other states and enables us to maintain a more consistent revenue stream.

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In connection with these discussions, we and each potential acquisition candidate exchange confidential operational and financial information, conduct due diligence inquiries and consider the structure, terms, and conditions of the potential acquisition.

In certain cases, the prospective acquisition candidate agrees not to discuss a potential acquisition with any other party for a specific period of time, grants us an option to purchase the prospective marine businesses for a designated price during a specific time period, and agrees to take other actions designed to enhance the possibility of the acquisition, such as preparing audited financial information and converting its accounting system to the system specified by us.

certain cases, the prospective acquisition candidate agrees not to discuss a potential acquisition with any other party for a specific period of time, grants us an option to purchase the prospective marine businesses for a designated price during a specific time period, and agrees to take other actions designed to enhance the possibility of the acquisition, such as preparing audited financial information and converting its accounting system to the system specified by us.

Potential acquisition discussions frequently take place over a long period of time and involve difficult business integration and other issues, including in some cases management succession and related matters.

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If we finance future acquisitions in whole or in part through the issuance of common stock or securities convertible into or exercisable for common stock, existing stockholders will experience dilution in the voting power of their common stock and earnings per share could be negatively impacted.

The extent to which we will be able and willing to use our Class A common stock or membership interests in OneWater LLC for acquisitions will depend on the market value of our Class A common stock and the willingness of potential sellers to accept our Class A common stock or membership interests in OneWater LLC as full or partial consideration.

Our inability to use our Class A common stock or membership interests in OneWater LLC as consideration, to generate cash from operations or to obtain additional funding through debt or equity financings in order to pursue our acquisition program could materially limit our growth.

The extent to which we will be able and willing to use our Class A common stock for acquisitions will depend on the market value of our Class A common stock and the willingness of potential sellers to accept our Class A common stock as full or partial consideration.

Our inability to use our Class A common stock as consideration, to generate cash from operations or to obtain additional funding through debt or equity financings in order to pursue our acquisition program could materially limit our growth.

Any borrowings made to finance future acquisitions or for operations could make us more vulnerable to a downturn in our operating results, a downturn in economic conditions, or increases in interest rates on borrowings that are subject to interest rate fluctuations.

If our cash flow from operations is insufficient to meet our debt service requirements, we could be required to sell additional equity securities, refinance our obligations or dispose of assets in order to meet our debt service requirements.

In addition, our credit arrangements contain financial covenants and other restrictions with which we must comply, including limitations on the incurrence of additional indebtedness.

In addition, our credit arrangements contain financial covenants and other restrictions with which we must comply, including limitations on the incurrence of additional indebtedness and cash liquidity requirements.

Adequate financing may not be available if and when we need it or may not be available on terms acceptable to us.

The failure to obtain sufficient financing on favorable terms and conditions could have a material adverse effect on our growth prospects and our business, financial condition and results of operations.

For additional information relating to our credit arrangements, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Debt Agreements” in this Form 10-K.

We import, assemble and/or manufacturer marine parts, products and accessories, which could expose us to potential increased costs and certain additional risks.

Our business includes the import, assembly, manufacture and sale of marine parts and accessories.

We may invest considerable resources to develop, import, warehouse and distribute new and existing parts, products and accessories, and there is no assurance that they will be successful.

Consequently, we might curtail or abandon them at any time, which could result in asset impairments and inventory write-downs.

Factors that could cause us to curtail or abandon one of such products include unexpected or increased costs or tariffs, delays in development or manufacturing, excessive demands on management resources, legal or regulatory constraints, changes in consumer demands, preferences and shopping patterns regarding boat parts and accessories, or a determination that consumer demand no longer supports the product.

Additional risks relating to such product offerings include product liability and product recalls for which we do not have third-party indemnification and contractual rights or remedies;

increasing costs for labor or raw materials used to manufacture products;

our ability to successfully protect our proprietary rights (e.g., defending against counterfeit or otherwise unauthorized goods) and intellectual property rights;

our ability to successfully navigate and avoid claims related to the proprietary rights of third parties;

and our ability to successfully administer and comply with obligations under license agreements that we have with third-party licensors of certain brands.

For additional information relating to our credit arrangements, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Debt Agreements” in this Annual Report on Form 10-K.

Risks Related to Our Operations

The availability and costs of borrowed funds can adversely affect our ability to obtain adequate boat inventory, the ability and willingness of our customers to finance boat purchases and our ability to fund future acquisitions.

OneWater LLC and certain of its subsidiaries are parties to the Inventory Financing Facility, which consists of uncommitted inventory floorplan financing of up to $595.0 million as of November 13, 2024 .

OneWater LLC and certain of its subsidiaries are parties to the Inventory Financing Facility, which consists of uncommitted inventory floorplan financing of up to $497.1 million in addition to overtrade capacity availability of up to $38.7 million as of November 17, 2025.

Failure to extend or source alternative financing arrangements could adversely impact our business.

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We rely on the Inventory Financing Facility to purchase and maintain our inventory of boats.

For additional information relating to the terms of our Inventory Financing Facility including the entrance into the Consent, Waiver and Second Amendment to Eighth Amended and Restated Inventory Financing Agreement on November 14, 2023, please see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Debt Agreements—Inventory Financing Facility.”

For additional information relating to the terms of our Inventory Financing Facility, please see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Debt Agreements—Inventory Financing Facility.”

Effective August 9, 2022, we entered into the A&R Credit Facility (together with the Inventory Financing Facility, the “Credit Facilities”), which provides for, among other things, (i) a single tranche of Revolving Commitments in an amount equal to $65.0 million (the “Revolving Facility”) and (ii) a single tranche of Initial Term Loans in an aggregate principal amount equal to $445.0 million (the “Term Facility”).

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Any inability to utilize the Credit Facilities or the acceleration of amounts owed, resulting from a covenant violation, insufficient collateral or lender difficulties, could require us to seek other sources of funding to repay amounts outstanding under the Credit Facilities or replace or supplement the Credit Facilities, which may not be possible at all or under commercially reasonable terms.

As of September 30, 2024, we were not in compliance with all of the covenants under our Credit Facilities;

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 and 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.

For additional information relating to Amendment No.

6 and the November 2024 Inventory Financing Amendment, please see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Debt Agreements.” Our additional available borrowings under the Credit Facilities as of September 30, 2024, prior to the 2024 Inventory Financing Amendment which decreased the capacity on the Inventory Financing Facility by $55.0 million, were approximately $218.9 million in the aggregate based upon the outstanding borrowings and maximum facility amounts.

As of September 30, 2025, we were in compliance with all of the covenants under our Credit Facilities.

The interest rates on the Credit Facilities are calculated using SOFR and Term SOFR (as further described in the Credit Facilities).

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Historically, affordable boat insurance has been available.

However, as a severe storm approaches land,

insurance providers cease underwriting until the storm passes.

However, as a severe storm approaches land, insurance providers cease underwriting until the storm passes.

This loss of insurance prevents or delays lenders from lending.

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Further, the retail consumer industry, by its nature, is volatile and sensitive to numerous economic factors, including consumer preferences, competition, market conditions, general economic conditions and other factors outside of our control.

For example, the impact of the novel coronavirus ("COVID-19") on our suppliers and subsequent increase in demand for marine retail products led to industry-wide supply chain constraints.

We experienced inventory shortages in marine retail products in fiscal year 2021, and it is possible that further shortages could occur.

We experienced inventory shortages in marine retail products in fiscal year 2021 during a period of high demand, and it is possible that shortages could occur again in the future.

We cannot predict consumer preferences with certainty, and consumer preferences often change over time.

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Online marketplaces may also increase our access to sensitive, confidential or personal data or information that is subject to data privacy and information security laws and regulations.

Our failure to successfully respond to these risks and uncertainties could reduce our online sales, increase our costs, diminish our growth prospects, damage our brands, and subject us to regulatory fines or investigations, which could negatively impact our operations and stock price.

Our failure to successfully manage or respond to these risks and uncertainties could reduce our online sales, increase our costs, diminish our growth prospects, damage our brands, and subject us to regulatory fines or penalties, investigations or judgments, which could negatively impact our operations and stock price.

In addition, there is no guarantee that we will be able to successfully expand our online platforms.

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Our long-lived assets, such as property and equipment, are required to be reviewed for impairment whenever events or changes in circumstance indicate that the carrying value of an asset may not be recoverable.

As of September 30, 2024, we have approximately $93.2 million of property and equipment, net of accumulated depreciation, recorded on our consolidated balance sheet.

As of September 30, 2025, we had approximately $91.6 million of property and equipment, net of accumulated depreciation, recorded on our consolidated balance sheet.

Recoverability of an asset is measured by comparison of its carrying amount to undiscounted future net cash flows the asset is expected to generate.

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While we do not believe there is currently a reasonable likelihood that there will be a change in the judgments and assumptions used in our assessments of goodwill and long-lived assets which would result in a material effect on our operating results, we cannot predict whether events or circumstances will change in the future that could result in non-cash impairment charges that could adversely impact our financial results and net worth.

During the year ended September 30, 2024, we evaluated our operations and underwent 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-process information and technology related projects.

As a result of the 2024 Restructuring, we recognized $15.3 million of restructuring charges during the fiscal year ended September 30, 2024.

If we undergo additional restructuring plans in the future, we may take additional, potentially material, restructuring charges related to, among other things, employee termination or exit costs, which could have a material negative impact on our operating results and related financial statements.

In addition, workforce changes can also temporarily reduce workforce productivity.

We may not achieve or sustain the expected cost savings or other benefits of the 2024 Restructuring, or do so in a timely manner.

We have undertaken restructuring and cost-reduction initiatives in the past, and any such initiatives—whether previously implemented or undertaken in the future—may not achieve their intended results.

From time to time, we evaluate our operations and implement restructuring plans, cost-cutting measures, or strategic realignments that may include reductions in workforce, consolidation or closure of retail locations, cancellation or modification of dealer relationships, and the discontinuation or reprioritization of information technology or other projects.

These initiatives can result in material restructuring charges, including employee-related costs, facility exit costs, contract termination fees, and asset impairments, and may adversely affect our operating results and financial condition.

Workforce reductions and organizational changes can also temporarily disrupt operations and reduce productivity.

There is no assurance that any restructuring or cost-reduction efforts will achieve or sustain the expected cost savings, operational efficiencies, or other anticipated benefits, or that such benefits will be realized within the expected timeframes.

We primarily lease our locations.

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We are dependent on the continued operation of our Kinpak facility to blend various chemicals.

This facility is subject to hazards associated with the manufacture, handling, storage and transportation of chemical materials and products, including natural disasters, mechanical failure, unscheduled downtime, labor difficulties, transportation interruptions, and environmental hazards, such as spills, discharges or release of toxic or hazardous substances and remediation complications.

This facility is subject to hazards associated with the manufacture, handling, storage and transportation of chemical materials and products, including natural disasters,

mechanical failure, unscheduled downtime, labor difficulties, transportation interruptions, and environmental hazards, such as spills, discharges or release of toxic or hazardous substances and remediation complications.

These hazards can cause personal injury and loss of life, severe damage to, or destruction of, property and equipment and business interruption and could adversely affect our financial condition.