Sea Ray put up for sale by Brunswick

That's pretty hard to do considering Boston Whaler starts at 11'. Unless Searay is going to start making waverunners.

All center console manufacturers have been picking up a lot of weekend family boaters. Robalo saved Chaparral from the downslide of stern drives and became family boats. Bayliner has picked up business from Sea Ray as well.

Even Cobalt added their first 3 outboards. Chaparral has added a couple but leaves it mostly to their brother, Robalo. Glastron sells far more outboards than stern drives now. They were among the first to reintroduce outboards and actually go back to their heritage and classics.

Jets have eaten into the stern drive business greatly too. Yamaha took huge business away from Sea Ray and Bayliner. Then Chaparral and Glastron introduced jets.

Still, Cobalt and Chaparral have held on to a significant stern drive business while Sea Ray and others have lost huge market percentages. Watching Marine Max acquire more Sea Ray dealers with huge acquisitions they've made the last couple of years has opened doors for Cobalt and Chaparral.

A very small subtlety I'll try to express. You once had dealers committed to selling Sea Rays, all the Sea Rays they possibly could. Now, you have Marine Max, committed to selling boats, all the boats they possibly can but they couldn't care less whether they're Sea Rays or another brand they carry.

Today, Sea Ray's competition has a far better small boat dealer network.

The L 650 was an incredibly designed boat. We went out on one for several hours, tested it thoroughly, loved it. Was dealing with the owner of a prior Sea Ray dealership, since acquired by MarineMax. It fit our needs extremely well and checked off far more boxes than anything else we'd been on. However, seeing the number of those lined up at the factory to get problems fixed, talking even to satisfied customers and seeing their voluminous punch list of issues, and the owner talking to the head of his service department, was enough to scare us far away.

Now, we were dealing with this dealer based on knowing him for decades and the fact we would not buy from MarineMax.

If Sea Ray were a standalone, public company, their audit report would have long ago carried a lot of red flags. Concentration of your business with one customer to the extent they have it is a death knell. The only appropriate owner for Sea Ray at this time is MarineMax because they do have the power already to control the brand. Who has the power when MarineMax is 50-60% of Sea Ray's business and Sea Ray is only 10% of MarineMax's business?

As to where the innovation is focused. Let's start at the top. Is Brunswick a boat company? No. Marine Engines $2.6 million, Boats $1 million, Fitness $1 million, in sales. Operating Earnings, Marine Engines $407 million, Boats $71 million, Fitness $94 million restructuring costs, $64 million after.

So, clearly they're a Marine Engine business first and foremost. The sport yachts and yachts never made sense to Brunswick, based on that. Boats that sell engines do. The initial moves into boats were in large part a battle against OMC and then Genmar as well as Bayliner and their engines.

If I was a buyer looking to own boat builders, no way I would consider Sea Ray with their MarineMax relationship.

MM had over 50% of sales. The sales increase would come from a loss of all or part or export sales. Let's say 53% of worldwide sales with 15% of sales exports, that makes it 63% of US sales so a drop in export sales pushes it higher than the 50% or 53% number.

Whether it's 50% or 70% it's dangerously too high. That's a business pattern I've seen lead to disaster way too often. Many have failed after their business was mainly to Sears and then later mainly to Walmart. All it takes is MM saying "I won't pay any increase in price this year or I'll take on other lines."

Things can and probably will change. But as of this day, Sea Ray's export business is dead or nearly so and their domestic business is controlled by MarineMax. Maybe that's fine with Brunswick, using them as a vehicle for selling motors and engines to MarineMax.

From Brunswick's 2018 Q2 Report:

Boat Segment

The Boat segment, which manufactures and distributes recreational boats, reported net sales of $394.9 million for the second quarter of 2018, a decrease from $412.1 million in the second quarter of 2017.

Net sales included $19.9 million and $53.1 million of Sea Ray sport yacht and yacht sales in the second quarter of 2018 and 2017, respectively. International sales, which represented 29 percent of total segment sales in the quarter, increased by 4 percent compared to the prior year period.

For the second quarter of 2018, the Boat segment reported operating losses of $32.2 million, which included $33.5 million of restructuring, exit, integration, and impairment charges and losses of $27.4 million related to the Sport Yacht and Yacht operations in excess of restructuring charges.

This compares with operating earnings of $24.7 million in the second quarter of 2017, which included $3.4 million of operating losses in the Sport Yacht and Yacht operations and $1.2 million of restructuring, exit, integration, and impairment charges.

The Boat segment's revenue comparisons included the significant declines in Sea Ray Sport Yacht and Yacht operations noted above, along with solid growth in the aluminum freshwater and recreational fiberglass boat businesses, as well as Boston Whaler.

The decrease in segment operating earnings was primarily the result of the items discussed in the previous paragraph. Excluding these charges, operating earnings declined slightly, reflecting less favorable plant efficiencies at certain of our boat facilities due in part to new product integrations and the benefit from higher net sales.

Sea Ray....when did they start up 1970/1?...to now 2018. Same Hull, same look since the start. They even managed to make that 1970 hull design go from 19ft and stretch the same hull to 55ft over the years. All with various cabin tops. They all look the same. Great in the beginning , but it just got tired and they did not change or modernize there look/identity. I/O's always stunk too...either your engine is in or it's out on any power boat. I've owned them all.

The other builders have and seem to often. Just like car builders. Everyone wants the own special looking boat. Not a "dime a dozen" boat.

This is strictly my opinion, which is always right! HaHa....

I agree and will further add that it came down to Brunswicks bean counting. Same with Cabo (with Cabo they moved them from a VERY efficient plant/people to a situation that was no longer efficient enough for them to compete in their price range and be profitable). Brunswick during the recession solely focused on cutting costs. They laid off tons of people from Searay…...well, then when only a few years later demand started ramping up, they couldn't re-hire those very qualified people back...….so that then led to all of the quality issues which left a lot of very loyal searay former owners with a bad taste in their mouth.....along with an L series that really missed the boat with it's cave-like dark interiors...…..

There was really nothing remarkable or difficult to understand about any of Brunswick's moves when you understand the only reason for boats in their world is to sell engines and motors.

What about Pool Tables? Same Brunswick? Lol.

I learning a lot from all of you. I enjoy the boat talk with the many knowledgeable people.

Same Brunswick, which they're spinning off the "Fitness" Business which includes pool tables.

Ok , I got it. They need to build a Sea Ray big enough to house a bowling lane, work out room, a gimbal mounted pool table and four 300hp Mercury outboards . That could have moved Brunswick stuff....lol.

Any way very interesting.