Good morning. My name is Sergio, and I will be your conference operator today. At this time, I would like to welcome everyone to the OneWater Marine, Inc. Fiscal Third Quarter 2025 Conference Call. [Operator Instructions] I would now like to turn the conference over to Jack Ezzell, Chief Financial Officer. Please go ahead. Jack P.

Good morning, and welcome to OneWater Marine, Fiscal Third Quarter 2025 Earnings Conference Call. I am joined on the call today by Austin Singleton, Chief Executive Officer; and Anthony Asquith, President and Chief Operating Officer. Before we begin, I'd like to remind you that certain statements made by management in this morning's conference call regarding OneWater Marine and its operations may be considered forward-looking statements under securities law 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, which could cause actual results and events to differ materially from those described in the forward-looking statements. Factors that might affect the 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 the forward-looking statements are made, except as required by law. Please also note that all comparisons of our third quarter 2025 results are made against the third quarter 2024, unless otherwise noted. And with that, I'd like to turn the call over to Austin, who will begin with a few opening remarks. Austin?

Thank you all for joining us today. OneWater delivered solid results in the third quarter with total revenue increasing 2% to $553 million. Our same-store sales also grew by 2% despite the challenging market conditions facing our broader industry, which saw declines in excess of 15% in the categories where we participate. In a highly competitive environment, we continue to deliver for our customers, win business, capture market share and outperform the broader industry. Although May and June are typically peak selling months, the industry saw double-digit declines, while our strategic positioning and strong execution led to positive results. This resilience highlights our team's ability to adapt and succeed in a dynamic operating environment. Gross margins remain under pressure, mainly due to the heightened promotional activity across the industry. The declines also reflect the impact of our strategic brand exits and shifts in new boat model mix. Despite these headwinds, we are being intentional in our pricing strategy, which is aimed at driving sales while preserving margin where we can. Our strategy will continue to adapt to market conditions, and we are confident in our current positioning. With all of the tariff uncertainty we saw in the quarter, we are pleased that price increases from our manufacturing partners for model year 2026 have been moderate and are within the normal levels. Early customer feedback on new models has also been positive. Owners are responding well to the latest innovations, and we are excited to continue rolling out these new models in the coming months. Turning to our inventory management initiatives, I am pleased to report on the significant progress we have made year-to-date in our strategic efforts to optimize the portfolio. Total inventory is down 14% year-over-year as we continue to prioritize healthy inventory levels. We remain on track to end the fiscal year with inventory down 10% to 15%, a target we had increased last quarter. Supporting this inventory reduction is our brand rationalization strategy, where we are also on schedule to complete the exit of selected brands by the end of the year. This allows us to focus our efforts on our highest performing brands and most profitable relationships, strengthening our foundation. As we push towards these inventory goals, we also look to have sufficient inventory to meet anticipated market demand. This balanced approach remains central to our long-term strategy, enabling us to capture sales while optimizing our working capital efficiency. As the marine industry continues to face headwinds, we are centered on 3 key areas: First, working towards a healthy inventory of high-performing brands and completing our brand rationalization strategy; second, executing disciplined cost management as we monitor the changing retail environment; and third, leveraging our scale and operational expertise to continue outperforming broader industry trends. Looking ahead, we are confident in our long-term positioning. We have built a flexible operating model with diverse revenue streams, including our growing preowned boat sales and our resilient reoccurring revenue businesses. Our teams are working hard to close deals, and we are managing factors within our control. With that, I will turn it over to Anthony to discuss business operations.

Thank you, Austin. Traffic at the dealership level remained steady during the quarter, which is encouraging given the broader industry headwinds. While the customer purchase cycle has normalized post-COVID, tariff uncertainty continues to raise questions in the mind of some boaters. However, customers are actively visiting our dealerships and are shopping for their next boat. Our sales teams remain proactive, working hard to convert interest into sales. Although new boat unit sales declined year-over-year, the average selling price increased, highlighting continued strength in the premium segment. Preowned boat sales grew for the third consecutive quarter, driven by higher volume and average unit price, more than offsetting the decline in new boat sales. As we've noted in recent quarters, customers are trading in and trading up as availability and the pre-owned market continues to improve. We're encouraged to see buyers moving into new categories and larger boats. While the strength in higher value units across both new and pre-owned sales add some pressure on margins, it's a healthy level of churn and a positive indicator for the business. Finance and insurance revenue was in line with prior year as we maintained healthy penetration rates across our product offerings. Our F&I team continues to execute, leveraging our competitive suite of financial products and services to meet customer needs. In our parts and service businesses, revenue declined 2% compared to the prior year period. Our distribution segment remains challenged by lower product levels from boat manufacturers. However, our dealership service and parts and other sales remain resilient. Our broad dealership offerings remain a key differentiator, supporting our customers' acquisition and retention as more boaters seek a one-stop shop experience. Thanks to our prior investments in business and technical expertise, we are well positioned to meet customer needs. Our parts and service businesses remain a core pillar of our business model. I'd like to turn the call over to Jack now to discuss the financials.

Thanks, Anthony. Fiscal third quarter revenue increased 2% to $553 million in 2025 from $542 million in the prior year. New boat sales were down 2% to $326 million in the third quarter, while pre-owned boat sales increased 18% to $126 million. Overall, same-store sales were up 2% against an industry backdrop that SSI data showed was down in excess of 15% in the categories which we compete. Revenue from service parts and other sales for the quarter decreased 2% to $83 million. The decrease was driven by lower production from boat manufacturers, which continue to weigh on sales in our Distribution segment, partially offset by growth in our Dealership segment. Finance and insurance revenue remained flat as a percentage of sales as customers continue to finance a portion of their purchase through our programs. Gross profit declined to $129 million in 2025 compared to $133 million in the prior year. This was primarily due to lower new boat volumes, product mix and the promotional environment. Third quarter 2025 selling, general and administrative expenses increased 6% to $92 million. SG&A as a percentage of sales was 17%, up 70 basis points as the benefits from our previous cost reduction actions were more than offset by higher personnel and selling expenses to drive sales in addition to other inflationary pressures given the current operating environment. Operating income decreased to $30 million and adjusted EBITDA was $33 million. Net income for the fiscal third quarter totaled $11 million or $0.65 per diluted share compared to net income of $17 million or $0.99 per diluted share in the prior year. Adjusted earnings per diluted share was $0.79 compared to adjusted earnings per diluted share of $1.05 in the prior year. Turning now to the balance sheet. On June 30, total liquidity was in excess of $85 million, including cash on hand and additional availability under our credit facilities. Total inventory on June 30, 2025, decreased to $517 million compared to $599 million on June 30, 2024. This decline reflects our ongoing strategic inventory positioning and brand rationalization throughout the year. Total long-term debt as of June 30, 2025, was $419 million and net of cash resulted in a net leverage of 5.8x trailing 12 months adjusted EBITDA. As we move forward, reducing leverage remains a priority in our capital allocation strategy. Based on our performance through the third quarter and current market conditions, we are updating our full year guidance. For fiscal year 2025, we are raising our total revenue outlook to be in the range of $1.8 billion to $1.85 billion and now anticipate same-store sales to be up in the low single digits for the year despite an industry that's expected to show double-digit declines. We now expect adjusted EBITDA to be in the range of $65 million to $80 million and adjusted earnings per diluted share to be in the range of $0.50 to $0.75. Our outlook considers several key factors, including persistent macroeconomic uncertainty and a competitive selling environment that continues to pressure margins. While we continue to manage through these headwinds, we are progressing well on our inventory management strategy and are cautiously optimistic given the additional clarity on tariff impacts. July performance has been encouraging, and we remain focused on the disciplined execution as we close out the year. This concludes our prepared remarks. Operator, we open the line for questions.

[Operator Instructions] Your first question comes from the line of Craig Kennison from Baird.

To double-click on the tariff noise and the market correction, just some of the macro factors that hit in the quarter. Have you seen any change in behavior as maybe there's clarity on tax policy, clarity on tariff policy to some extent and the market back?

Jack, why don't you take that one?

Yes. I wouldn't say -- during the quarter, I wouldn't say we got a lot of that clarity. I think a lot of -- during the quarter, there was more confusion, more -- a lot of noise in and around that. I'd say subsequent to the quarter, it feels like you're seeing a little less concern about the tariffs, the tariff impacts. We certainly are relieved that we finally worked through our manufacturers, work through new model year. We're seeing the price increase coming in, in that low mid-single digits, which is kind of, I'll say, a normal price increase. And so I think that's settling with the customer. I think that the customer -- like we said, July results were positive, and we'll just have to wait a little while longer to see if that's a trend that continues.

I just want to add that real quick, Craig, just to add to that, just like what Jack was saying, the trend probably during the quarter was just not something that you could really pick up on, but you definitely could feel it going into July. July was a good month and so we've not been really concerned with the tariff issues as far as the pricing of the boats. It's more of what the tariff and what it's doing to consumer confidence and where that leads. I would tell you that it seems like the premium customer where we operate mostly in is pretty resilient and this extra clarity that's kind of coming about showed through in July. Now we just got to hope that, that trend continues.

Great. If I could ask on used. I mean, 18% growth is surprisingly strong. Is that a function of better access to supply? Or is there a trade-down effect that I'm missing on?

Yes, it's not a trade-down effect. It's really just more people coming in that are trading their boats in. I think our -- Anthony can jump in. I think the trade-ins are just higher today than they were 6 months ago than they were 12 months ago, and it's really because there's an adequate amount of field inventory out there, so the consumer doesn't have these huge lead times or lags when they come in to get a new boat and have the time to really sell it on their own. I would say we're being super aggressive like we always have been on purchasing boats outright, but it's really just a function of more people are trading in today versus selling it on their own than they were 6, 8, 12 months ago. Anthony, do you want to add to that or that pretty much covers it?

Yes, that pretty much covers it.

Well, I think just the follow-up [indiscernible] I'll add is, right, it's a continued focus of the business, right? We have used boat stand-alone stores. It is a priority of the company to invest in that category. And so I think we'll continue to see outpaced results as we're focusing it on it.

And when you say trade-ins, are they trading in and then buying another boat at the same ratio as always? Or is this -- is there an increase in people trading in but not replacing?

Well, you can't really -- we don't really -- a trade-in would be if you purchased a new boat, it would be an outright purchase. So it's trade-in and upgrading. And I think that's why you saw a little bit of a skew in the model mix to larger boats. Most people are, especially in that premium space, they're upgrading to bigger stuff. So there's a trickle-down effect and just to be -- if you buy a 40-foot boat, you're usually trading in, and this is just an example, a 30-foot boat. So that 30-foot boat sells pre-owned to somebody that's usually trading in a 28-foot boat and the 26-foot, we picked up more in that trickle-down trade-in effect because the boats are skewing higher on the new sale.

[Operator Instructions] Your next question comes from Joe Altobello from Raymond James. Please go ahead. There are no further questions at this time. This concludes today's conference call. You may now...