Derivative and Hedging Instruments

9 Months Ended

Jun. 30, 2025

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 required interest payments of the Inventory Financing Facility and A&R Credit Facility. The Company has 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 June 30, 2025:

Inception Date	Hedged Rate	Notional Value at Inception (in thousands)		Maturity Date
September 2024	SOFR	$	200,000	September 2027
September 2024	Term 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 unaudited condensed consolidated balance sheets at ($ in thousands):

Balance Sheet Location	June 30, 2025		September 30, 2024
Prepaid expenses and other current assets	$	1,389	$	1,560
Other long-term liabilities	(1,944)		(3,626)
Net asset (liability)	$	(555)	$	(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, and the related income tax effects, are included in accumulated other comprehensive income (loss) and reclassified into earnings in the same period during which the hedged transactions affect earnings. Information about the effect of the interest swap agreements in the accompanying unaudited condensed consolidated statements of operations and unaudited condensed consolidated statements of comprehensive income (loss), is as follows ($ in thousands):

For the three months ended June 30,	Results Recognized in Accumulated Other Comprehensive Income (Loss) (effective Portion)		Location of Results Reclassified from Accumulated Other Comprehensive Income (Loss) to Earnings	Results Reclassified from Accumulated Other Comprehensive Income (Loss) to Earnings
2025	$	(1,188)	Interest expense – other and Interest expense – floor plan	$	814
2024	$	—	Interest expense – other and Interest expense – floor plan	$	—

For the nine months ended June 30,	Results Recognized in Accumulated Other Comprehensive Income (Loss) (effective Portion)		Location of Results Reclassified from Accumulated Other Comprehensive Income (Loss) to Earnings	Results Reclassified from Accumulated Other Comprehensive Income (Loss) to Earnings
2025	$	4,463	Interest expense – other and Interest expense – floor plan	$	2,952
2024	$	—	Interest expense – other and Interest expense – floor plan	$	—

The following table sets forth the location and amount of gain or (loss) recognized in earnings on cash flow hedging relationships for the three and nine months ended June 30, 2025 and 2024 ($ in thousands):

	Three Months Ended June 30, 2025				Three Months Ended June 30, 2024
	Interest expense – other		Interest expense – floor plan		Interest expense – other		Interest expense – floor plan
Amount of gain (loss) reclassified from accumulated other comprehensive income (loss) to earnings	$	408	$	406	$	—	$	—

	Nine Months Ended June 30, 2025				Nine Months Ended June 30, 2024
	Interest expense – other		Interest expense – floor plan		Interest expense – other		Interest expense – floor plan
Amount of gain (loss) reclassified from accumulated other comprehensive income (loss) to earnings	$	1,395	$	1,557	$	—	$	—

As of June 30, 2025, the amount expected to be reclassified out of accumulated other comprehensive income (loss) into earnings during the next 12 months is a gain of $1.4 million. The ultimate amount recognized will vary based on fluctuations of interest rates through the maturity dates.