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Sea Ray put up for sale by Brunswick

Discussion in 'Sea Ray Yacht' started by PacBlue, Dec 6, 2017.

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  1. PacBlue

    PacBlue Senior Member

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    Off target on the model mix as of today.

    But the reinvent will flip to the OB world and a smaller loa than you may expect. They will get to a point where SR will not be allowed to compete against the new golden child, BW, mark my word!
  2. Capt J

    Capt J Senior Member

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

    Pascal Senior Member

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    SR will probably stick to OB powered bow riders and cruisers while BW will continue in the fishing oriented market
  4. PacBlue

    PacBlue Senior Member

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    Or since BW, the new favored son, has already jumped into the 35 and 38' cross-over OB market, they will be allowed to continue that journey to 40' and more, with SR kept at a ceiling under 35' for the "reinvent".

    https://www.bostonwhaler.com/family-overview/realm-boat-models/
  5. olderboater

    olderboater Senior Member

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    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.
  6. PacBlue

    PacBlue Senior Member

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    This exactly highlights the difficulty they face in their ongoing "love" triangle with the Brunswick Boat Group/MarineMax/Sea Ray. Each has their motivations and SR is operating in the middle and has the most difficult position.

    Case in point - MM has partnered with Aquila for a nice Catamaran line. There is no reason that this type of product could not have been partnered and developed through SR. Produced in Florida. But who calls the shots for development in the BBG? Who has the leadership and vision? After owning SR for 32 years, what type of leadership and innovation culture exists in SR? Is all the innovation focused somewhere else - Mercury and BW? The Sundancer line is really the only innovative product that comes to mind with SR. Not saying that some of their other product are not top notch. But they had that line when SR sold to Brunswick. They built thousands, maybe tens of thousands, but what else really defines SR in the last 20 years?

    The L-Series was to be a step towards innovation - but it appears as the biggest feature of the L-Series was determined by the BBG experts to be the buying 'experience". Selling the "experience" over the product, what a great road to success - not! After the inevitable let down of the "experience", you are still left with the boat, and if it does not achieve against its' benchmarks in performance and quality, you are left with an empty money sack.
  7. olderboater

    olderboater Senior Member

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    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.
  8. PacBlue

    PacBlue Senior Member

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    Incredible design minus incredible execution = unhappy customer regardless of the buying "experience".

    The old SR dealer network, family value based, were a pretty cool group of entrepreneurs. Have worked with a few of them, all enjoyable experiences.

    Trying to follow your numbers: MM loses 10% of its annual rolling revenue (assuming for new boat sales) due to closing of Sport Yachts and Yachts, and given the 2017 Total Sales numbers for SR of $225M in the Brunswick presentation, this seems to be a pretty small $225M/2 = $112.5M x 10% = $11.25M loss?

    Obviously they did not have a lot of Sport Yacht and Yacht sales in 2017, doesn't seem to be a lot for MM to make-up, no sweat on their back. Another way to look at it - SR at $112.5M was only 23% of MM annual rolling revenue for new boat sales, MM total new boat sales revenue guestimate of $489M? ($112.5M/$489M = 23%).

    As far as percentages, given all things equal, if MM had up to 50% of SR total sales in 2017, and this represented only 23% of MM 2017 boat sales, and with the loss of Sport Yachts and Yachts represents 10% drop in sales to MM, how can they jump to 60% of SR's total? If the other dealers lose the same ratio of Sport Yachts and Yachts, they would still be at 50% of SR production. If the MM mix was weighted more heavily towards Sport Yachts and Yachts then the other dealers, they would be less than 50%?
  9. olderboater

    olderboater Senior Member

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    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.
  10. Capt Ralph

    Capt Ralph Senior Member

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    Dam good question.
    I'm afraid it's really going to hurt that Product. I have not noticed it on much else.
    I feel it's been a confusing product anyway not well supported.
  11. Cruz

    Cruz Member

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    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.
  12. cleanslate

    cleanslate Senior Member

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    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....
  13. PacBlue

    PacBlue Senior Member

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    Not true.
    Not the same hulls stretched from small to big. They did maintain a look throughout the line, but the more aggressive bow drop on the bigger boats aged quickly.
    They pioneered the Sundancer model when they went to v-drives and tucked a stateroom below the helm deck. I can spot a Cobalt or Chapparral or Monterey or Formula Etc. A mile away, old or new, they all have their family look.
    Some of the SR bow riders and sport boats where class leaders, as well as their sun deck models.
    It really came down to a failure of management, period.
  14. Capt J

    Capt J Senior Member

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    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...…..
  15. olderboater

    olderboater Senior Member

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    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.
  16. cleanslate

    cleanslate Senior Member

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    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.
  17. olderboater

    olderboater Senior Member

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

    cleanslate Senior Member

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    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.
  19. PacBlue

    PacBlue Senior Member

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    Interesting comments today in the Soundings Trade Only Press on Marine Max selling off their SR inventory:

    "MarineMax was working to sell 60 Sea Ray yachts and sport yachts when the builder announced it would discontinue those models, but it had fewer than 20 at the end of its fiscal year, incoming MarineMax CEO Brett McGill told investors during a conference call to discuss fourth quarter and fiscal year 2018 results.

    MarineMax will likely carry a few of those into the March quarter, which is fewer than projected when Sea Ray parent company Brunswick Corp. announced it would take brand off the market after a year of being for sale.


    “The demand for the last sport yachts and yachts has been better than probably anybody anticipated,” said MarineMax CFO Mike McLamb.

    MarineMax had already increased orders of Galeon and Azimut yachts because Sea Ray was for sale, but it had “additional work to do with both manufacturers” when Sea Ray stopped building larger boats, McLamb said.

    “Manufacturers of both Galeon and Azimut have stepped it up and made available models for us and product for us to fill the void from Sea Ray. … And in many cases the product is either on the ground or coming,” he said.



    “Both of them have been very flexible and have in some cases changed proportion and changed models to better align their product with the U.S. market. And they have done it very rapidly, which has been fantastic,” McLamb said. “They’ve kept the quality up and everything else that you would expect, but now both have laid out their production capabilities.”

    MarineMax stores have seen a “good cadence” of Galeon and Azimut sales, McGill said, and sales staff have steered would-be Sea Ray buyers into those brands, rather than losing their business.

    The company has sent sales team members to the Galeon factory in Poland and the Azimut factory in Italy so they can better understand the boats, McGill said.


    “Some of these customers who bought three, four, five, 10 boats from us over their lifetime of boating — we want to keep that going,” he said."