v3.26.1
Derivative and Hedging Instruments
 9 Months Ended
Jun. 30, 2026
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, 2026:
Inception DateHedged RateNotional Value at Inception (in thousands)Maturity Date
September 2024SOFR$200,000 September 2027
September 2024Term SOFR$200,000 September 2027
The fair value of the cash flow swaps is calculated using an income approach. The income approach involves using the quoted price for economically equivalent inputs or valuation methodologies, assumptions and inputs, which in the case of projected future cash flows, discount such cash flows to a single net present value amount. The following table provides information regarding the fair value of the interest rate swap agreements and the impact on the unaudited condensed consolidated balance sheets at ($ in thousands):
Balance Sheet LocationJune 30, 2026September 30, 2025
Prepaid expenses and other current assets$1,630 $532 
Other long-term assets385 — 
Other long-term liabilities— (1,448)
Net asset (liability)$2,015 $(916)
The interest rate swaps qualify for cash flow hedge accounting treatment. The interest rate swaps are marked to market each reporting date and any unrealized gains or losses, and the related income tax effects, are included in accumulated other comprehensive income (loss) and reclassified into earnings in the same period during which the hedged transactions affect earnings.
Information about the effect of the interest swap agreements in the accompanying unaudited condensed consolidated statements of operations and unaudited condensed consolidated statements of comprehensive income (loss) for the three months ended June 30, 2026 and 2025, is as follows ($ in thousands):
For the three months ended June 30,Gain or (Loss) Recognized in Accumulated Other Comprehensive Income (Loss) (effective Portion)Location of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) to EarningsGain or (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) to Earnings
2026$1,440 Interest expense – other and Interest expense – floor plan$156 
2025$(1,188)Interest expense – other and Interest expense – floor plan$814 
Location and Amount of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) to Earnings
For the three months ended June 30,Interest expense – otherInterest expense – floor plan
2026$105 $51 
2025$408 $406 
Information about the effect of the interest swap agreements in the accompanying unaudited condensed consolidated statements of operations and unaudited condensed consolidated statements of comprehensive income (loss) for the nine months ended June 30, 2026 and 2025, is as follows ($ in thousands):
For the nine months ended June 30,Gain or (Loss) Recognized in Accumulated Other Comprehensive Income (Loss) (effective Portion)Location of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) to EarningsGain or (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) to Earnings
2026$3,865 Interest expense – other and Interest expense – floor plan$937 
2025$4,463 Interest expense – other and Interest expense – floor plan$2,952 
Location and Amount of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) to Earnings
For the nine months ended June 30,Interest expense – otherInterest expense – floor plan
2026$456 $481 
2025$1,395 $1,557 
As of June 30, 2026, the amount expected to be reclassified out of accumulated other comprehensive income (loss) into earnings during the next 12 months is a gain of $1.7 million. The ultimate amount recognized will vary based on fluctuations of interest rates through the maturity dates.