Company: ONEW
Filing Date: 2025-05-02
Form Type: 10-Q
Source: 0001772921-25-000025
Chunk: 125

Company: OneWater Marine Inc.
Filing Date: 2025-05-02
Form: 10-Q
Item: Part I, Item 8
Chunk 125
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 and parts and accessories. Although non-boat sales contributed approximately 17.4% and 16.9% to revenue in the three months ended March 31, 2025 and 2024, respectively, and 18.1% and 17.8% to revenues in the six months ended March 31, 2025 and 2024, respectively, due to the higher gross margin on these product and service lines, non-boat sales contributed 40.1% and 36.9% to gross profit in the three months ended March 31, 2025 and 2024, respectively, and 41.3% and 37.4% to gross profit in the six months ended March 31, 2025 and 2024, respectively. We have also diversified our business across geographies, dealership types (e.g., fresh water and salt water), and product offerings (e.g., focus on parts and accessories businesses through our Distribution segment) in order to reduce the effects of seasonality and cyclicality of our business. In addition to seasonality, revenue and operating results may be significantly affected by quarter-to-quarter changes in economic conditions, manufacturer incentive programs, adverse weather conditions and other developments outside of our control.

Gross Profit

We calculate gross profit as revenue less cost of sales. Cost of sales consists of actual amounts paid for products, costs of services (primarily labor), transportation costs from manufacturers to our dealerships and vendor consideration. Gross profit excludes the majority of our depreciation and amortization, which is presented separately in our consolidated statements of operations.

Gross Profit Margin

Our overall gross profit margin varies with our revenue mix. Sales of new and pre-owned boats, which have comparable margins, generally result in a lower gross profit margin than our non-boat sales. As a result, when revenue from non-boat sales increases as a percentage of total revenue, we expect our overall gross profit margin to increase.

Selling, General and Administrative Expenses

Selling, general and administrative expenses consist primarily of base salaries and incentive-based compensation, advertising, rent, insurance, utilities, and other customary operating expenses. A portion of our cost structure is variable (such as sales commissions and incentive compensation), or controllable (such as advertising), which we believe allows us to adapt to changes in the retail environment over the long term. We typically evaluate our variable expenses, selling expenses and all other selling, general and administrative expenses in the aggregate as a percentage of total revenue.

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