Good morning. My name is Angelie, and I will be your conference operator today. At this time, I would like to welcome everyone to the conference call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. I would like to turn the conference over to Jack Ezzell, Chief Executive Officer and Chief Operating Officer. Please go ahead.

Good morning, and welcome to OneWater Marine Inc.'s fiscal fourth quarter and full year 2025 earnings conference call. I am joined on the call today by Austin Singleton, Executive Chairman of the Board, and Anthony Aisquith, Chief Executive Officer. Before we begin, I would like to remind you that certain statements made in this morning's conference call regarding OneWater Marine Inc. and its operations may be considered forward-looking statements under securities laws and involve a number of risks and uncertainties. As a result, the company cautions you that there are a number of factors, many of which are beyond the company's control, described in the forward-looking statements, which could cause actual results and events to differ materially from those. Factors that might affect future results are discussed in the company's earnings release, which can be found in the Investor Relations section of the company's website and in its filings with the SEC. The company disclaims any obligation or undertaking to update forward-looking statements to reflect circumstances or events that occur after the date they are made, except as required by law. Please note that all comparisons of our fourth quarter or fiscal year 2025 results are made against the fourth quarter or fiscal year 2024 unless otherwise noted. With that, I'd like to turn the call over to Austin Singleton, who will begin with a few opening remarks.

Good morning, everyone, and thank you for joining us today. We finished 2025 with solid results and meaningful progress on our strategic priorities. Industry conditions remain challenging as retail demand continued to normalize from pandemic highs, promotional activity increased, and multiple hurricanes created disruption in key Florida markets. Against that backdrop, our team executed with discipline and focus. We delivered 6% same-store sales growth for the year, outperforming the broader industry in the categories where we compete. New boat sales were strong in the fourth quarter, and pre-owned sales remained a standout throughout the year, contributing to solid full-year results. This performance demonstrates our strength and resilience in our model and the depth of our retail network. We also took thoughtful cost actions and leveraged our flexible operating model to align expenses with demand and protect margins, finishing the year with positive momentum headed into 2026. Maintaining a disciplined approach to inventory has been a top priority, and our teams executed exceptionally well. We exited this year with the cleanest inventory levels we've seen in years, giving us a significant competitive advantage as we enter 2026. This enables us to respond quickly to shifting retail conditions and support a healthier balance between price and volume. We also completed our strategic exit from discontinued brands, allowing us to sharpen our focus on our core portfolio with high-performing brands. While this transition created some margin pain during the year, it laid the groundwork for meaningful long-term margin improvement as we move through 2026 and beyond. Looking ahead, we are encouraged by signs that channel inventories across the industry are returning to healthier levels and OEM production is beginning to normalize. We believe these factors, combined with our flexible operating model and strong customer relationships, position us well to capture demand and drive profitable growth as the industry stabilizes. Early boat show feedback has been positive from our manufacturing partners, highlighting strong customer interest and innovative new features and fresh models. At one of our largest events of the year, the Fort Lauderdale Boat Show, sales were up year over year. Unit sales were lower, reflecting the impact of the brands we exited in 2025 as well as the liquidation of excess inventory in the prior year. The good news is that we are beginning to see improvements in overall new boat gross margins. We are excited to build on this momentum through the winter boat show season. Finally, I want to thank our entire OneWater team for their hard work, resilience, and dedication to our customers throughout the year. I'm confident we have the right people, structure, and strategy in place to continue delivering long-term shareholder value. With that, I will turn it over to Anthony to discuss the business operations.

Thanks, Austin. Good morning, everyone. I'd like to start by echoing Austin's comments and thanking our team for their dedication throughout the year. Despite a challenging marine market, our focus on serving customers drove another year of positive same-store sales growth and continued market share gains. New boat demand normalized after several years of outsized growth, and our team drove strong pre-owned sales by effectively leveraging a rebound in trade-in activity, which reached historic lows during the pandemic. We entered the year focused on rightsizing inventory and exited with one of the cleanest positions we've seen. That disciplined execution allowed us to begin rebuilding inventory in the fourth quarter, slightly ahead of typical seasonal patterns. Our inventory aging has significantly improved compared to a year ago, and early response to the new model year has been encouraging. Finance and insurance penetration remained healthy and continues to be a key strength. Further interest rate cuts should support customer affordability and enhance unit economics for boats financed through OneWater. Service parts and other sales were solid for the year despite modestly lower sales in our distribution segment due to reduced OEM production. As inventory levels reset across the industry and OEM output normalizes, we believe there is growth opportunity heading into 2026. I'd like to turn the call over to Jack to discuss the financials.

Thanks, Anthony. Fiscal fourth quarter 2025 revenue increased 22% to $460 million compared to $378 million in the prior year period, which was significantly affected by hurricane-related disruptions along the West Coast of Florida. New boat sales were up 27% to $275 million in the fourth quarter, while pre-owned sales increased 25% to $91 million. Overall, store sales were up 23%. Revenue from service parts and other sales for the quarter increased 7% to $81 million, driven by steady retail service activity in our dealership segment and modest growth in our distribution segment. Finance and insurance revenue increased year over year on a dollar basis but declined slightly as a percentage of total sales. Gross profit increased to $104 million in 2025 compared to $91 million in the prior year, primarily driven by higher new boat volumes as a result of the hurricane-related disruptions on the West Coast of Florida in the prior year. Fourth quarter selling, general, and administrative expenses increased 6% to $84 million, down 270 basis points, primarily driven by higher revenues in the quarter. Fourth quarter operating loss was $130 million, and adjusted EBITDA was $18 million. Net loss for the fiscal fourth quarter totaled $113 million or $6.9 per diluted share compared to a net loss of $10 million or $0.63 per diluted share in the prior year. The decrease was largely due to non-cash goodwill and intangible asset impairments of $146 million, driven principally by the decline in our market capitalization relative to the book value. As a reminder, this adjustment does not impact cash flow, liquidity, or operational flexibility. Adjusted diluted earnings per share was less than $0.1 compared to an adjusted diluted loss per share of $0.36 in the prior year. Turning to our full-year results, total revenue for 2025 increased 6%…

Thank you. At this time, I would like to remind everyone in order to ask a question, your first question comes from the line of Craig Kennison with Baird. Please go ahead.

Hey, good morning. Thanks for taking my question. Jack, I wanted to follow up on your inventory comment. I'm not sure if you quantified the change year over year in dollars. I think last quarter, it was down 14%. So could you share that figure?

Yeah. We're down roughly 8.5%, $50 million year over year. You know, when we had originally said our goal was down 10 to 15, and we had been tracking that throughout the year. However, with the timing of some model year 26 boats, we started that build a little earlier this year because some of our stores were actually getting a little light on inventory. So again, we're really pleased with where the inventory is at.

Thank you. And given your outlook for flat retail, what's the right assumption for inventory for fiscal 2026?

Yeah. I would expect it to be up modestly just with price increases and some things like that. I think just one thing to note is that on that flat retail, we expect that from the exiting brands. We have a headwind of, let's call it, around 5%. And so while we'll look to capture some of that with our continuing brands, those two will kind of offset. So, we think the business, if I pro forma out last year, the exiting brands, we think the business will be up mid-single digits. But when you kind of the two will kind of net out to get you to that flat.

That's really helpful. That was my next question. Then maybe, Jack, lastly, just on your interest rate expense outlook for 2026, just want to make sure we have a feel for that given the term note and interest rate changes.

Yeah. I mean, I'm a little bit scarred from this past year because we had a lot of cuts in our model. And so, I think we have another 50 basis points of cuts in the model going this year, but I'm kind of hesitant on that number. When we think about year over year, I think floor plan interest will be, let's call it, flattish to up slightly. And then, our term interest will be down some just as we continue to make amortization payments, etc., on that. But it's down in the 5 to 10% range.

Great. Thank you both.

Thank you. The next question comes from Joe Altobello with Raymond James. Please go ahead.

Thanks. Hey, guys. Good morning. First question, on interest rates. You mentioned rates coming down could be a tailwind to demand in fiscal 2026. Have you started to see consumer rates come down in a meaningful way yet?

Yeah. What's meaningful? They've come down. I mean, they haven't dropped a point. But they move with every rate cut, start to move down. So, yeah, we're starting to see that, and a little bit of that interest rate cuts probably led into a good October and a good Fort Lauderdale boat show.

Got it. Which is where I was going to go next. The optimism that cuts. Right? That we're going in the right direction and that while a 25 basis points doesn't make a difference on someone buying a million-dollar boat, it certainly does a lot for their confidence and their projection of where they see things trending.

Got it. Okay. And then Austin, you mentioned Fort Lauderdale. Could you kind of quantify how much your sales were up at the show?

Yeah. I mean, we were almost up 20% for the show, just slightly under that compared to last year, which is really good. But the most important thing, I think, was that we started to see that margin pressure go away, which is exciting. I mean, when you come out of this quarter with the same-store sales comp that we had for the quarter, a little bit of that was due to the hurricane last year. So going into October, it was a nice surprise to see that held up. And October turned out really good, and then the Fort Lauderdale Boat Show continued. November is looking pretty decent right now. So we feel like last quarter, the summer, was kind of like at the bottom, and we started to turn, but it's just it's probably going to be a slow creep up from here, but every little bit helps. Momentum seems to be pretty decent right now.

And just last question. Go, but I

As you know, right, that increase in Fort Lauderdale boat shows don't all hit in the December quarter. Right? Those sales are spread out.

Oh, yeah. For sure. Yep. Absolutely. Okay. Margin, it's like you guys are a little more optimistic on margin this year. Obviously, last year and liquidating a lot of the smaller brands. But how do you see the promo environment playing out in fiscal 2026?

Well, I mean, I think the manufacturers are still kind of compressed from a manufacturing standpoint. I mean, they all want to kind of produce more boats. I mean, when you talk to Wells Fargo on the floor plan side, inventory levels for the industry are really low right now. If you kind of see any kind of bump in the spring, you know, we're going to have to really work hard next year to manage, and that's one of the things we've got to do is manage inventory going up because the manufacturers can't just go in one day and increase production 20%. It's a slow grind for them to increase because the majority of that increase is probably going to be based in labor. And so you really got to work on managing your inventory. And it'll be a slow grind for the increase. We're excited about that in a way because that helps with margin. So, I mean, I think the promotional environment is going to stay put until the manufacturers start feeling the industry dealers like us start getting where we're ordering more boats, and I don't know if that comes in January, if that comes in March, or that comes in June. So the same old story we've said many times, I think as we get into the summer season in the back half of the year, you're going to start to see more green shoots take place if the momentum we're seeing today continues.

Got it. Okay. Thank you.

Thank you. Again, if you would like to ask a question, press star then the number one on your telephone keypad. The next question comes from Noah Zatzkin with KeyBanc Capital Markets. Please go ahead.

I guess first, on the pre-owned side, obviously really strong results during the quarter. Have you continued to see kind of an increase trade-in dynamic? And how are you thinking about that playing out next year? Thanks.

Yeah. I mean, that momentum has kind of continued on. I mean, the dynamic of why that dropped during the middle of COVID and on the back end of COVID was just the lead time to get boats from manufacturers. So it gave the consumer a lot more free time or their own time to sell their boat. And so with inventory a little bit more on hand, the ordering cycle because the manufacturers have compressed production right now, and so it doesn't take as long to get a boat. We are seeing more trades than we saw pre-COVID. I wouldn't say there's more trades or there's more used boats out there than there's been. It's just that they're not selling it on their own, and they're running it through the dealerships.

Got it. That's helpful. And then maybe just kind of an update on the M&A side, what you're seeing out there and how you're thinking about that next year?

Yeah. I mean, we're staying extremely disciplined on that. I mean, we're really focused on the debt right now. And, you know, one of the good things that we have that works for us is time's on our side. So, you know, it's not like the deals are going to somebody else or they're leaving or they're disappearing. So we can be very methodical, very disciplined, and just take them, you know, be very picky as we move forward. But I think for the short term or at least till we get into boat season next year, as we run into the winter months, we'll probably be pretty disciplined and focused mainly on the debt.

Thank you.

Thanks, Don.

Thank you. There are no further questions at this time. This concludes today's conference call. You may now disconnect.