XML 37 R20.htm IDEA: XBRL DOCUMENT v3.23.3
Stockholders' Equity
 12 Months Ended
Sep. 30, 2023
Equity [Abstract]  
Stockholders' Equity Stockholders’ Equity
Equity-Based Compensation
We maintain the OneWater Marine Inc. Omnibus Incentive Plan (the “LTIP”) to incentivize individuals providing services to OneWater Inc and its subsidiaries and affiliates. The LTIP provides for the grant, from time to time, at the discretion of the Board of Directors of OneWater Marine Inc. (the “Board of Directors”) or a committee thereof, of (1) stock options, (2) stock appreciation rights, (3) restricted stock, (4) restricted stock units, (5) stock awards, (6) dividend equivalents, (7) other stock-based awards, (8) cash awards, (9) substitute awards and (10) performance awards. The total number of shares reserved for issuance under the LTIP that may be issued pursuant to incentive stock options (which generally are stock options that meet the requirements of Section 422 of the Code) is 1,585,007. The LTIP is and will continue to be administered by the Board of Directors, except to the extent the Board of Directors elects a committee of directors to administer the LTIP. Class A common stock subject to an award that expires or is cancelled, forfeited, exchanged, settled in cash or otherwise terminated without delivery of shares (including forfeiture of restricted stock awards) and shares withheld to pay the exercise price of, or to satisfy the withholding obligations with respect to, an award will again be available for delivery pursuant to other awards under the LTIP.
2023 Awards
During the fiscal year ended September 30, 2023, the Board of Directors approved the grant of 137,057 time-based restricted stock units. Of this amount, 22,550 restricted stock units fully vest on October 1, 2023 and the remaining 114,507 restricted stock units vest in three equal annual installments commencing on October 1, 2023.
During the fiscal year ended September 30, 2023, the Board of Directors approved the grant of 88,018 performance-based restricted stock units, which represents 100% of the target award. Performance-based restricted stock units provide an opportunity for the recipient to receive a number of shares of our common stock based on our performance goals. A performance-based restricted stock unit equals one share of common stock to the Company. Of this amount, 13,288 performance-based restricted stock units fully vest on October 1, 2023 and the remaining 74,730 restricted stock units vest in three equal annual installments commencing on October 1, 2023. As of September 30, 2023, the Company achieved 100% of the performance target for the units fully vesting on October 1, 2023. As of September 30, 2023, the Company achieved 40% of the performance target for the awards with units vesting in three equal annual installments commencing on October 1, 2023.
Compensation cost for time-based restricted stock units is based on the closing price of our common stock on the date immediately preceding the grant and is recognized on a graded basis over the applicable vesting periods. Compensation cost for performance share units is based on the closing price of our common stock on the date immediately preceding the grant and the ultimate performance level achieved and is recognized on a graded basis over the applicable vesting period. The Company recognized $8.2 million, $9.8 million and $5.7 million of compensation expense for the fiscal years ended September 30, 2023, 2022 and 2021, respectively, which includes $3.5 million, $5.4 million, and $2.6 million of compensation expense for the fiscal years ended September 30, 2023, 2022 and 2021, respectively, for performance-based units.
The following table further summarizes activity related to restricted stock units for the years ended September 30, 2023 and 2022:
Restricted Stock Unit Awards
Number of Shares Weighted Average
Grant Date Fair
Value ($)
Unvested at September 30, 2021545,094$22.68 
Awarded225,92440.01 
Vested(211,225)27.10 
Forfeited—— 
Unvested at September 30, 2022559,79328.01 
Awarded225,07530.08 
Vested(257,082)27.98 
Forfeited(3,001)35.81 
Unvested at September 30, 2023524,785$28.86 
As of September 30, 2023, the total unrecognized compensation expense related to outstanding equity awards was $3.3 million, which the Company expects to recognize over a weighted-average period of 1.1 years.
We issue shares of our Class A common stock upon the vesting of performance-based restricted stock units and time-based restricted stock units. These shares are issued from our authorized and not outstanding common stock. In addition, in connection with the vesting of restricted stock units, we repurchase a portion of shares equal to the amount of employee income tax withholding.
Net (Loss) Earnings Per Share
Basic and diluted net (loss) earnings per share of Class A common stock is computed by dividing net (loss) income attributable to OneWater Inc by the weighted-average number of shares of Class A common stock outstanding during the period. Diluted net (loss) earnings per share is computed by giving effect to all potentially dilutive shares.
The following table sets forth the calculation of net (loss) earnings per share for the years ended September 30, 2023, 2022, and 2021 (in thousands, except per share data):
Net (loss) earnings per share:202320222021
Numerator:
Net (loss) income attributable to OneWater Inc$(38,592)$130,944 $79,059 
Denominator:
Weighted-average number of unrestricted outstanding common shares used to calculate basic net (loss) income per share14,32813,87711,087
Effect of dilutive securities:
Restricted stock units—457272
Employee Stock Purchase Plan —3—
Diluted weighted-average shares of Class A common stock outstanding used to calculate diluted net (loss) income per share14,32814,33711,359
Net (loss) earnings per share of Class A common stock – basic$(2.69)$9.44 $7.13 
Net (loss) earnings per share of Class A common stock – diluted$(2.69)$9.13 $6.96 
On March 30, 2022, the Board of Directors approved a share repurchase program up to $50.0 million. During the year ended September 30, 2023, the Company repurchased and retired 63,353 shares of Class A common stock under the repurchase program for a purchase price of approximately $1.6 million. As of September 30, 2023 the Company has repurchased and retired 73,487 shares of Class A common stock under the repurchase program for a purchase price of approximately $1.9 million. As of September 30, 2023, approximately $48.1 million remained available for future purchase under the repurchase program. The repurchase program does not have a predetermined expiration date.
Shares of Class B common stock and unvested restricted stock units do not share in the income (losses) of the Company and are therefore not participating securities. As such, separate presentation of basic and diluted net (loss) earnings per share of Class B common stock under the two-class method has not been presented.
The following number of weighted-average potentially dilutive shares were excluded from the calculation of diluted net (loss) earnings per share because the effect of including such potentially dilutive shares would have been antidilutive upon conversion (in thousands):
Year Ended
September 30, 2023 		Year Ended
September 30, 2022 		Year Ended
September 30, 2021
Class B common stock1,4301,5273,931
Restricted stock units598219232
Employee Stock Purchase Plan4——
2,0321,7464,163
Employee Stock Purchase Plan
At the Company’s 2021 Annual Meeting of Stockholders (the “Annual Meeting”), held on February 23, 2021, the Company’s stockholders approved the OneWater Marine Inc. 2021 Employee Stock Purchase Plan (the “ESPP”), which was approved and adopted by the Board of Directors as of January 13, 2021 (the “Adoption Date”), subject to stockholder approval at the Annual Meeting. The effective date of the ESPP is February 23, 2021, and, unless earlier terminated, the ESPP will expire on the twentieth anniversary of the Adoption Date. The ESPP will be administered by the Board of Directors or by one or more committees to which the Board of Directors delegates such administration.
The ESPP enables eligible employees to purchase shares of the Company’s Class A common stock at a discount through participation in discrete offering periods. The ESPP is intended to qualify as an employee stock purchase plan under section 423 of the Internal Revenue Code of 1986, as amended. Up to a maximum of 449,257 shares of the Company’s Class A common stock may be issued under the ESPP, subject to certain adjustments as set forth in the ESPP. On the first day of each fiscal year during the term of the ESPP, beginning on October 1, and ending on (and including) September 30, the number of shares of Class A common stock that may be issued under the ESPP will increase by a number of shares equal to the least of (i) 1% of the outstanding shares on the Adoption Date, or (ii) such lesser number of shares (including zero) that the administrator determines for purposes of the annual increase for that fiscal year. The number of shares of Class A common stock that may be granted to any single participant in any single option period will be subject to certain limitations set forth in the plan.
The Company recorded equity-based compensation for the ESPP of $0.7 million and $0.2 million during the years ended September 30, 2023 and 2022, respectively. As of September 30, 2023 and 2022, we had current liabilities of $0.4 million and $0.5 million. respectively, for future purchases of shares under the ESPP. During the year ended September 30, 2023, 86,050 shares were issued under the ESPP at an average price per share of $24.31. No purchases were made under the ESPP during the year ended September 30, 2022.
We used a Black-Scholes model to estimate the fair value of the options granted to purchase shares issued pursuant to the ESPP. Volatility is based on the historical volatility in our common stock. The risk-free rate for periods within the contractual term of the options is based on the U.S. Treasury yield curve in effect at the time of grant.
The following are the assumptions used for the fiscal years ended September 30, 2023 and 2022:
20232022
Dividend yield0.0 %0.0 %
Risk-free interest rate
4.8 - 5.5%
2.5 %
Volatility
37.6 - 45.6%
57.4 %
Expected lifeSix monthsSix months
Distributions
During the fiscal years ended September 30, 2023, 2022 and 2021, the Company made distributions to OneWater Unit Holders for certain permitted tax payments.
Dividends
Dividends paid to holders of Class A common stock, distributions paid to OneWater Unit Holders and dividends payable to restricted stock unit holders are referred to herein collectively as “dividends”. Dividends declared are reported as a reduction of retained earnings. Dividends paid to OneWater Unit Holders are recorded as a reduction in non-controlling interest. On June 17, 2021, the Board of Directors declared a special cash dividend of $1.80 per share. The cash dividend of approximately $27.1 million was paid on July 19, 2021 to holders of Class A common stock and OneWater Unit Holders. Additionally, a $1.0 million cash dividend for restricted stock unit holders was accrued for payment to holders upon future vesting of restricted stock unit awards outstanding on the date the dividend was declared. During the years ended September 30, 2023 and 2022, $0.3 million and $0.2 million, respectively, of the previously accrued balance was paid to restricted stock unit holders. The remaining $0.5 million is recorded in Other payables and accrued expenses in the consolidated balance sheet as of September 30, 2023.
Non-Controlling Interest
As discussed in Note 1, OneWater Inc consolidates the financial results of OneWater LLC and its subsidiaries and reports a non-controlling interest related to the portion of OneWater LLC owned by the holders of OneWater LLC Units (the “OneWater Unit Holders”). OneWater Unit Holders may exchange their LLC Units, together with an equal number of shares of Class B common stock of OneWater Inc, for shares of Class A common Stock of OneWater Inc on a one-for-one basis or, at OneWater LLC’s election, cash. Changes in ownership interest in OneWater LLC, while OneWater Inc retains its controlling interest, will be accounted for as equity transactions. Future direct exchanges of OneWater LLC units will result in a change in ownership and reduce the amount recorded as a non-controlling interest and increase additional paid-in-capital. As of September 30, 2023, OneWater Inc owned 91.0% of the economic interest of OneWater LLC with the OneWater Unit Holders owning the remaining 9.0%.
As discussed in Note 4, the Company acquired an 80% economic interest in Quality Boats during the year ended September 30, 2022. The Company has the exclusive right, but not obligation, to acquire the remaining 20% economic interest at any time before January 1, 2027. On November 1, 2023, the Company exercised the right to acquire the remaining 20% economic interest in Quality Boats. See Note 20 for additional information.