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Derivative and Hedging Instruments
 12 Months Ended
Sep. 30, 2024
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative and Hedging Instruments Derivative and Hedging Instruments
The Company is subject to interest rate risk as a result of the Inventory Financing Facility and A&R Credit Facility required interest payments. In September 2024, the Company entered into two interest rate swap agreements which are designed to provide a hedge against changes in variable rate cash flows regarding fluctuations in the SOFR and Term SOFR rates which are used in calculating interest payments. The following table provides information on the attributes of each swap as of September 30, 2024:
Inception DateHedged RateNotional Value at Inception (in thousands)Maturity Date
September 2024SOFR$200,000 September 2027
September 2024Term SOFR$200,000 September 2027
The fair value of the cash flow swaps is calculated using an income approach. The income approach involves using the quoted price for economically equivalent inputs or valuation methodologies, assumptions and inputs, which in the case of projected future cash flows, discount such cash flows to a single net present value amount. The following table provides information regarding the fair value of the interest rate swap agreements and the impact on the consolidated balance sheets at ($ in thousands):
Balance Sheet LocationSeptember 30, 2024September 30, 2023
Prepaid expenses and other current assets$1,560 $— 
Other long-term liabilities(3,626)— 
Net asset (liability)$(2,066)$— 
The interest rate swaps qualify for cash flow hedge accounting treatment. The interest rate swaps are marked to market each reporting date and any unrealized gains or losses are included in accumulated other comprehensive (loss) income and reclassified into interest expense in the same period during which the hedged transactions affect earnings. Information about the effect of the interest swap agreements in the accompanying consolidated statements of operations and consolidated statements of comprehensive income (loss), is as follows ($ in thousands):
Year Ended September 30,Results Recognized in Accumulated Other Comprehensive (Loss) Income (effective Portion)Location of Results Reclassified from Accumulated Other Comprehensive Income (Loss) to EarningsResults Reclassified from Accumulated Other Comprehensive Income (Loss) to Earnings
2024$(2,066)Interest expense – other and Interest expense – floor plan$— 
As of September 30, 2024, the amount expected to be reclassified out of accumulated other comprehensive (loss) income into earnings during the next 12 months is gains of $1.6 million. The ultimate amount recognized will vary based on fluctuations of interest rates through the maturity dates.