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 March 31, 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	March 31, 2025		September 30, 2024
Prepaid expenses and other current assets	$	1,787	$	1,560
Other long-term liabilities	(340)		(3,626)
Net asset (liability)	$	1,447	$	(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 March 31,	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	$	(2,922)	Interest expense – other and Interest expense – floor plan	$	854
2024	$	—	Interest expense – other and Interest expense – floor plan	$	—


For the six months ended March 31,	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	$	5,651	Interest expense – other and Interest expense – floor plan	$	2,138
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 six months ended March 31, 2025 and 2024 ($ in thousands):


	Three Months Ended March 31, 2025				Three Months Ended March 31, 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	$	419	$	435	$	—	$	—


	Six Months Ended March 31, 2025				Six Months Ended March 31, 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	$	987	$	1,151	$	—	$	—

As of March 31, 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 $1.8 million. The ultimate amount recognized will vary based on fluctuations of interest rates through the maturity dates.