Sign of the times. Things are looking worse every day. Not sure if this applies to all plants. Sea Ray halting production for month of July Sea Ray Boats will furlough for the month of July employees who are directly involved in the manufacture of fiberglass boats, a spokesman said today. The furloughs do not affect non-production employees such as administration, marketing, and customer service, said Dan Kubera, spokesman for Sea Ray's parent company, Brunwick Corp.
Hi, I guess the credit crunch has come home to roost for Sea Ray. Interesting to note it only affects the blue collar workers
You just need to listen to the MarineMax May earnings call. Not only is revenue down 25% (and I suspect April might be off 40%) they are cutting back their buying for next year by 20%. MM is probably SeaRay/Brunswick's buyer? I think MM has got to be in a lot of trouble with a large and aging inventory, limited cash, and losing money each month. Personally, I think MM's CEO is not living in the new reality that is facing the boating industry. He talks like it will all come back, that there is just no substitute for boating, and he's seen the down turn before. Perhaps he is right, but I don't think he is working into the equation sustained high oil prices that not only affects fuel but the input costs to boats. I wonder if next year is even the same as this year and not worse, whether MM will still be around as we know it today.
well, it's not a surprise but its not just the credit crunch or housing crisis. What do you get for 500k these days? a 45 footer? Let see... interest (loan or lost income) 30k, insurance 5k, dockage 12k AND depreciation 50k. Total around $100k the first year. Average seasonal use: 20 weekends in a good year thats $5k per weekend. Not counting fuel and transient dockage. What do you get for a $5k weekend for two? a trip to Paris... 4 days on St Barths, a week in Hawai, a week end in london, ... where is the value in boating? New boat prices have gone thru the roof in the past few years in part because of costs but also because builders are loading them with gadgets... I dont' care how many LCDs a 40 footer may have, it's still borderline camping.
All the major automakers do a summer shutdown. While it's non-traditional for the production boatbuilding industry, and may be indicative of slowing sales, a month shutdown is not the end of the world. Are the custom builders seeing similar slowdowns, or planning summer shutdowns?
I think there is a big difference between a regular planned shutdown when employees get a vacation break and still get paid versus a "temporary layoff" in which the company has to send out a press release!
For at least the thirteen years that I was there, Bertram Yacht had a two-week plant shutdown in August during which time tooling was refurbished, a year's worth of hardened resin was scraped off the shop floors, and the worldwide dealer organization arrived in South Florida to attend the Annual Dealer Meeting. I believe Hatteras did pretty much the same.
Marine Max is a Brunswick owned company as well and represents a large part of the US sales territory/market for Searay, Hatteras, Boston Whaler, and Cabo as well as others....... Custom sportfish builders haven't seen any slowdown because they are all still operating on 3 year waiting lists. If one person sells his spot or wants to backout another person on the list can buy it. Bayliss, Merritt, Jim Smith, and others that I know are all operating on a 3yr+ wait at the moment..... so it takes a long time for a bad market to catch them and by the time that happens the market straightens out. The market usually doesn't effect the big money guys.......$100 million or more net worth......
Marine Max is a public company. Ticker: HZO. Unrelated to Brunswick (ticker BC) other than being a customer.
Not true. When 28 Searay dealers formed MarineMax, they issued 4.8 million shares at $12.50 per share forming Marinemax. Brunswick then bought 1.8 million shares of MarineMax (38% ownership) after charging them $15 million merger charge. That is why MarineMax is the dealer of all of Brunswicks brands for most of the east coast of the US. here is the article http://www.rbbi.com/news/stories/mmax.htm The $15 million charge from Brunswick for merging plus Brunswick's agreement to purchase 1.8 million plus shares will make the actual cash exchange minimal.
Fair enough... but that is a 1998 article and IPO shareholders are often long gone (especially since the stock has seen better days). Here is the current listing of top institutional shareholders in Marine Max, so if Brunswick is holding, then it is either a miniscule amount or they are not reporting under their name (which I would highly doubt). Lastly, if Brunswick held more than 20% of MM they would have to report consolidated numbers. Regardless, it is incorrect to call MM a "Brunswick company" even if they are a sharholder, since Brunswick doesn't have a controlling interest. DIMENSIONAL FUND ADVISORS INC 1,579,850 8.60 $19,684,931 31-Mar-08 BARROW, HANLEY MEWHINNEY & STRAUSS, INC. 1,492,300 8.12 $18,594,058 31-Mar-08 RUTABAGA CAPITAL MANAGEMENT, LLC 1,486,586 8.09 $18,522,861 31-Mar-08 TRIVIUM CAPITAL MANAGEMENT, LLC 1,275,000 6.94 $15,886,500 31-Mar-08 WELLINGTON MANAGEMENT COMPANY, LLP 1,088,400 5.93 $13,561,464 31-Mar-08 SCHNEIDER CAPITAL MANAGEMENT, L.P. 1,027,575 5.59 $12,803,584 31-Mar-08 PRICE (T.ROWE) ASSOCIATES INC 991,760 5.40 $12,357,329 31-Mar-08 FMR LLC 2,818,670 15.35 $35,120,628 31-Mar-08 ARTISAN PARTNERS LIMITED PARTNERSHIP 2,295,400 12.50 $28,600,684 31-Mar-08 KORNITZER CAPITAL MANAGEMENT, INC. 1,926,457 10.49 $24,003,654 31-Mar-08 TOP MUTUAL FUND HOLDERS Holder Shares % Out Value* Reported BUFFALO SMALL CAP FUND 1,557,332 8.48 $24,138,646 31-Dec-07 ARTISAN SMALL CAP VALUE FUND 1,202,400 6.55 $18,637,200 31-Dec-07 FIDELITY LOW-PRICED STOCK FUND 890,100 4.85 $13,769,847 31-Jan-08 PRICE (T.ROWE) SMALL CAP STOCK FUND 787,100 4.29 $12,200,050 31-Dec-07 DFA U.S. SMALL CAP VALUE SERIES 659,419 3.59 $8,097,665 29-Feb-08 ROYCE OPPORTUNITY FUND 656,700 3.58 $10,178,850 31-Dec-07 FIDELITY BALANCED FUND 637,746 3.47 $7,946,315 31-Mar-08 JANUS SMALL CAP VALUE FUND 550,000 2.99 $6,853,000 31-Mar-08 FIDELITY SMALL CAP STOCK FUND 528,022 2.87 $8,168,500 31-Jan-08 American Beacon Small Cap Value Fd 353,800 1.93 $5,473,286 31-Jan-08
"Personally, I think MM's CEO is not living in the new reality that is facing the boating industry. He talks like it will all come back, that there is just no substitute for boating, and he's seen the down turn before. Perhaps he is right, but I don't think he is working into the equation sustained high oil prices that not only affects fuel but the input costs to boats." The CEO of MM may not be far off the mark. This is the 2nd time I remember seeing the industry "die" while I've been in the business (early 90's was the first) and I seem to recall it happening in the late 70's as well. It happens with every business, and especially every luxury business whenever the economy falters. In the end a few guy may be shirtless and a few names may disappear, but the boating industry is far from dead. Too many people periodically need to replenish the salt in their veins. With a little luck some of our clogged waterways will be passable and our fishing holes may be accessible for a while, and maybe a few deals can be had.
I agree with that. The boating industry is not going to disappear. But I don't think MM can take a "business as usual" or "just a bump in the road" attitude. You have to listen to the conference call (it is recorded and you can access it online). Given how little cash the business has, it would be surprising to see MM be in the same form it is today, 18 months from now. To that point, I have heard that they are trying to dump their inventory of a certain brand because they are losing the franchise due to lack of sales.
