OneWater Marine Inc. (ONEW) - Q1 2026 10-Q Summary
Business Context and Reporting Period
This report covers the quarterly period ended December 31, 2025 (Fiscal Q1 2026). OneWater Marine Inc. is one of the largest recreational marine retailers in the United States, operating 95 retail locations and 8 distribution centers across 18 states. The company operates through two segments: Dealerships (91% of revenue) and Distribution (9% of revenue). The company recently completed the sale of its Ocean Bio-Chem subsidiary in February 2026.
Key Financial Metrics
| Metric | Q1 2026 | Q1 2025 |
|---|---|---|
| Total Revenues | $380.6 million | $375.8 million |
| Gross Profit | $89.4 million | $84.1 million |
| Gross Margin | 23.5% | 22.4% |
| Net Loss | $(7.7) million | $(13.6) million |
| Net Loss Per Share (Diluted) | $(0.47) | $(0.81) |
| Adjusted EBITDA | $3.6 million | $1.9 million |
| Cash & Restricted Cash | $42.4 million | $36.6 million |
| Inventory | $601.5 million | $540.0 million |
| Total Debt (Floor Plan + Long-Term) | $895.7 million | $835.6 million |
Material Changes vs. Prior Period
- Revenue Mix Shift: Total revenue increased 1.3% year-over-year. This was driven by a 24.0% increase in pre-owned boat sales ($70.4M) and a 10.3% increase in service, parts, and other sales ($68.0M), which offset a 5.9% decline in new boat sales ($233.3M).
- Profitability Improvement: Net loss narrowed by 43.4% to $7.7 million, primarily due to an $8.1 million increase in income tax benefit and improved gross margins (up 110 basis points).
- Restructuring Charges: The company recorded $7.4 million in restructuring and impairment charges, a significant increase from $0.9 million in the prior year. This was largely due to the impairment of assets held for sale in the Distribution segment.
- Inventory Build: Inventory levels increased by $61.7 million to $601.5 million, reflecting seasonal buildup and higher average sales prices.
- Debt Levels: Floor plan borrowings increased to $491.2 million (from $419.7 million) to support higher inventory levels. Total long-term debt decreased slightly to $399.4 million (net of current portion).
Outlook, Risks, and Unusual Items
- Subsequent Event: On February 2, 2026, the company sold its equity interests in Ocean Bio-Chem for an estimated $50.0 million in net proceeds. These proceeds were used to repay the A&R Credit Facility.
- Debt Amendments: In November 2025, the company amended its A&R Credit Facility and Inventory Financing Facility, extending maturity dates to 2027 and adjusting financial covenants. The company remains in compliance with all covenants.
- Seasonality: The company notes that Q1 is typically a low-revenue, high-inventory period. Revenue is expected to increase in Q3 and Q4.
- Risks: Key risks include general economic conditions, rising interest rates impacting floor plan costs, supply chain challenges, and the seasonality of the boating industry. The company also faces exposure to foreign currency fluctuations and potential tariff impacts.
- Share Repurchase: The company has $48.1 million remaining under its $50 million share repurchase program but made no repurchases during the quarter.
Investor Verification Checklist
- Inventory Aging: Verify the aging of the $601.5 million inventory balance, as aging inventory reduces borrowing capacity under the floor plan facility.
- Debt Covenants: Confirm continued compliance with the amended leverage and liquidity covenants following the Q1 inventory buildup.
- Asset Disposal: Monitor the completion of the Ocean Bio-Chem sale and the final accounting impact of the $7.4 million impairment charge on the Distribution segment.
- New Boat Demand: Assess the sustainability of the 5.9% decline in new boat sales and whether it reflects broader industry headwinds or specific brand mix issues.
- Cash Flow: Review the $76.3 million cash used in operating activities, driven largely by inventory purchases, against the company's liquidity position.