Company: ONEW
Filing Date: 2025-08-01
Form Type: 10-Q
Source: 0001772921-25-000040
Chunk: 87

Company: OneWater Marine Inc.
Filing Date: 2025-08-01
Form: 10-Q
Item: Part I, Item 1
Chunk 87
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 an acceleration, where applicable, we generally expect the accelerated payments due under the Tax Receivable Agreement to be funded out of the proceeds of the change of control transaction giving rise to such acceleration. OneWater Inc. intends to account for any amounts payable under the Tax Receivable Agreement in accordance with ASC Topic 450, Contingencies. 

Recent Accounting Pronouncements 

See Note 3 of the Notes to the Condensed Consolidated Financial Statements.

Item 3.    Quantitative and Qualitative Disclosure about Market Risk

Interest Rate Risk 

Our Inventory Financing Facility exposes us to risks caused by fluctuations in interest rates. The interest rate on our Inventory Financing Facility for major unit inventory is calculated using SOFR plus an applicable margin. Based on the $235.8 million balance under the Inventory Financing Facility that is not covered by interest rate swaps as of June 30, 2025, a change of 100 basis points in the underlying interest rate would cause a change in interest expense of approximately $2.4 million. This hypothetical change does not take into account a corresponding increase to the programs that we may receive from our manufacturers or management’s ability to curtail inventory and related floor plan balances, both of which would reduce the impact of the interest rate increase.

Our A&R Credit Facility exposes us to risks caused by fluctuations in interest rates. The interest rate on our A&R Credit Facility is calculated using Term SOFR (with a 0.00% floor) plus an applicable margin. Based on the $222.7 million outstanding balance that is not covered by interest rate swaps as of June 30, 2025, a change of 100 basis points in the underlying interest rate would cause a change in interest expense of approximately $2.2 million.

As part of our strategy to mitigate the exposure risk to fluctuations in interest rates for our Inventory Financing Facility and A&R Credit Facility, we may enter into various interest rate swap agreements. As of June 30, 2025, we had two interest rate swap agreements with a combined notional amount of $400.0 million. The swaps are designed to provide a hedge against the changes in variable cash flows regarding fluctuations in the SOFR and Term SOFR rates which are used in calculating interest payments. All of our interest rates swaps qualify for cash flow hedge accounting. The following table provides information regarding our interest rate swaps as of June 30, 2025:

Inception DateHedged RateNotional Value at Inception (in thousands)Maturity DateSeptember 2024SO