What's going on at Sea Ray?

I think Brunswick is making the attempt in all their lines to eliminate any non-profitable items or segments. That included selling Cabo and Hatteras. It included eliminating Bayliner cruisers. I think those consumer segments are weak but also the Sea Ray dealers weren't seeing the need. Look at the dominant dealer, Marine Max. Look at all the lines they carry and the number of yachts to fill that 50' and up range. You're talking a range of boats too big for most lake purchasers and, at the same time, not likely to be the choice of most coastal purchasers. I can easily imagine Marine Max saying, "This is what we feel we can stock" and the line narrowed accordingly.

Probably also important to remind ourselves that Brunswick's profits are and have been coming from the motor side of things, especially the outboard side. Boats have dragged them down. The lines doing ok have been the aluminum brands and pontoons. Their main value internally in having the Sea Ray and Bayliner lines is that as the sole supplier of I/O's they benefit. They don't get that benefit in the larger boats either.

My gut feeling tells me that Meridian will be the designated Sedan Bridge line, and those other gaps will represent new product opportunities for SR.

Up to SR's zenith in 2006 (about $1.2BIL USD total says), SR was highly profitable and in my opinion carried much of the Brunswick Boat portfolio, including big names like Hatteras. It has been a struggle ever since, but SR remains the best opportunity for the boating business segment to capture profits. Over time, SR has certainly carried its fair share of non-performers in the Brunswick Boating group....

Since Brunswick sold the Merritt Island, FL plant to Bertram, they don't have a facility that they can build a large sedan bridge in.

They had also a project of 75 euro looking yacht a couple years ago which seems to have never have materialized.
Still if Brunswick follows its dealers, IMO with Sea Ray it is missing a boat in cruisers and yachts from 40 to 60 feet. The 510 Sundancer has been a very good seller apparently so they know the potential of this market.
Marinemax has Azimut in that segment, I know that in some years Azimut sold 100 plus boats a year in US alone, and its sizes always started from 38-39 feet.

Brunswick/SR never actually built finished boats at the plant that Bertram occupies now, (they called it the Canaveral Plant). The Sykes Creek plant on Merritt Island was producing vessels up to 65', but this has shifted to the Palm Coast plant to build whatever they choose, but there are some limitations on the building heights/openings.

And that's the "rub", as SR needs to build a line of Azimut/Sunseeker/Ferretti competitors, but how does that work when MarineMax sells lines that would directly compete with that strategy - who runs who?????

Which is exactly why they cannot build the 51' and 58' Sedan Bridge. The Palm Coast plant simply doesn't have the height to finish the boats or build them there......as was told to me by a higher up from SeaRay.

The Palm Coast Plant has built "traditional" Sedan Bridges up to the 520 model, and it was a tight fit for sure.

Since they are building Meridian Sedan Bridges and SR product, including new 51/65 Fly models, I would suspect they have found away around it.

Sea Ray Boats in Palm Coast Continues to Benefit from Plant Closures Elsewhere, With Cautions | FlaglerLive - Your News Service for Flagler County News Palm Coast News Bunnell Flagler Beach Beverly Beach and Marineland

Someone above cited a former volume of sales. Well, let's get to more current. The entire boat group of Brunswick is in the range of just over $1 billion. The fiberglass stern drive and inboard part of that group is in the range of $400 million. I don't know the split between the brands but it would appear Sea Ray is somewhere just under $200 million. Of that the 50' and up sales are a very, very small part. Just as Brunswick has reduced brands and streamlined things in that regard, they're doing the same within those brands. Bayliner in the US no longer has cruisers over 33'. Meridian has four models, all sedans with the largest 54'. Sea Ray has a 51', 54' and 58'. Boats over 50' are very peripheral to the Brunswick boat group. They have retreated from that area rapidly. Will the 65 ever make it to market or go the way of the 75? Either way it's not a boat essential to their business, but a boat for show.

These restructuring moves are part of the reason Brunswick stock is significantly up at this time. Brunswick once had 58 brands. n the fiberglass stern drive and inboard segments gone are brands like Hatteras, Cabo, Robalo, Baja, Cobra, Maxum, and Arriva.

An essential part of the evaluation of the Bayliner and Sea Ray brands is the intercompany sales of inboard outboard engines and drives. This doesn't apply to the larger boat segments. We're talking about a segment that has shrunk dramatically and Brunswick has cut their investment way back and is focusing on the part of that segment they feel they can be profitable in.

They just won't miss the Sedans. Leaner is the byword, whether it's a short sighted view or not. Another factor in their larger boats too was that they have virtually no European sales in that segment.

Follow too other actions by them. Jets. Jumping in. Called off. Why? A big reason was it wasn't their own propulsion. Made no sense to add SKU's on it then. The volume they felt they would have done wouldn't have been significant to them. But let's read a statement made at that time, “Sea Ray has concluded that the brand promise can be better met by putting resources into developing exceptional small sport boats, both in sterndrive and outboard configurations."

Will things turn at some point and Brunswick decide to push back upward size wise? Perhaps. But anything is possible. There has long been an internal disagreement over being in the boat business. As it gives them a guaranteed customer for their engines, it also has impacted quite negatively their ability to sell engines to other boat manufacturers. However, the prevailing thought is that while it may have led to other engine manufacturers cutting into their market share, divesting themselves of boat manufacturers would not help them pick share back up, but would actually further reduce their share.

At one time Sea Ray and Bayliner were the envy of every other small boat manufacturer. That is who everyone wished they could be. Well, things got bloated and when the market fell, they were left with problems. Now, they're inclined to look at someone like Marine Products and their profitability.

Meanwhile there are plenty of manufacturers remaining who concentrate in the 50' and up segments, who provide large offerings, and for whom that market is an essential part of their business. They depend on those sales. Sea Ray did not.

This is very interesting but Azimut had sales of close to 1 billion in the 2007 - 08, and same goes for the Ferretti Group. I do imagine FG turn over nos to be a bit shorter to those of Azimut, cause of the various brands they had have. (only Apreamare left the portfolio since then)
Today the Beneteau Group has those sales for the most part building boats.

Sometimes what Brunswick ends up doing with the brands I never much understand. How about the purchase of Albemarle, Cabo, and Hatteras, when tooling a line of small Hatteras alone could have done that trick. Also are (where) not Cabo and Albemarle direct competitors. Then the move of Cabo to NC....
Brunswick in my book is just a giant eating the competition for greed in my book, with no real plan on sight.

Anyways many of the moves Brunswick done in the past did not seem to be very clever. Sometimes a brand was changed to much, and other times the value on resale was like zero. Maxum is such an example and Bayliner is not far away from it. Would be sad to sea Sea Ray in the same position because in my book so far they have just managed to get save in this.

For a better financial perspective, read last years annual report:

Brunswick Corporation - AnnualReports.com

Engines out perform boat sales by about 2:1, and it certainly is an outboard world in todays market. You will also see the amount of non-US sales in the mix plus a few boat companies that you may not recognize. Did you know that not all old SR sport boats necessarily go out to "pasture" but are recycled and refreshed for Central/European and Asian markets????

In my opinion, having larger SR product is the proper way to diversify this boat portfolio, especially with Hatteras out of the mix. Even though you can sell a lot of "hamburgers" it is still nice to have a "steakhouse" to go to for when the market picks up. Going the "Fly" route (and not the Sedan Bridge route) seems like a good move to me, and certainly offers opportunities to increase revenue and gain market share in a new (to SR) segment.

As far as to stock price/value, who the hell knows what Wall Street is really up to on any given day......

Brunswick was way too greedy in acquiring brands, then is too bean counter-ish to keep them successful. Which is going to bite them in the behind when things turn around because they don't have the capacity if it does. For example, Cabo was profitable in 2010 in it's own plant, and became very unprofitable once move to New Bern. Searay's sale of the Merritt Island location was not a wise decision. Another bean counter move is they started putting plastic seacocks on SeaRay's and Boston Whaler's.......I know a guy that bought a new 51' Searay in 2007 and was not happy about finding that out..... Then they started putting those ****** U-line drawer refrigerators in Cabo's (and searay's) to save money that have flimsy drawers and don't cool well.....which also happened to be on expensive models......kind of like selling bentleys with fake leather seats......

Actually the Bayliner acquisition was brilliant and a perfect situation for both seller and purchaser. They took the number one selling boat brand but got far more benefit in doing so than anyone else could. They got to switch a 0%Mercury/Mercruiser boat line to 100%. The problem ultimately is that Brunswick struggled in figuring out how to handle so many different brands. Even their aluminum lines lost much of their uniqueness and just blended together. Sometimes they thought because they operated one successful boat brand then they were obviously knowledgeable enough to do the same with others. Cabo, Hatteras and Baja are three major examples. Hatteras and Sea Ray might just as well be entirely separate industries for how different the two businesses are. Now while the economy was great, Sea Ray and Bayliner could carry a lot of others. But the moment things turn then each has to stand on it's own.

Now ultimately I think they did make some mistakes with Bayliner but the acquisition clearly met the designed purposes. What I saw was them failing to keep a clear differentiation in the Bayliner versus Sea Ray market and letting the same dealer sell both. Sea Ray seemed, and I'm talking runabouts, to become more Bayliner like and Bayliner did pick up some things from Sea Ray. So, I think the two did erode the sales of each other. Glastron and Four Winns have done a very similar thing under a single management and made in the same plant by Rec Boat Holdings. Oh and look at what happened to Wellcraft and to Hydra-Sports. So Brunswick isn't alone in their mistakes. They and OMC then Genmar seemed determine to slug it out. Ever tried to compete with a competitor that isn't geared toward profitability?

I look at the task ahead for those three brands and I'm not sure which of them will ever be successful. I just look at Hatteras as an example. For the east coast they are now sold by Marinemax and Bluewater. Do you see either of those really building their sales. Bluewater has Viking and Princess to promote. These lines have just been tossed into a basket with many others. Look at how the Hatteras line has been cut down.

Forgetting the Yacht business for a moment where Sea Ray just hasn't been a major player, let's look at smaller boats a moment. The management of the Sea Ray and Bayliner lines has really opened a lot of possibilities to others. Lines like Chaparral have taken advantage.

I know the Sea Ray Sedans will not be missed by Sea Ray or Brunswick. Frankly, I don't believe, but this is just opinion, they'll be missed much by consumers either as they just weren't selling that much today.

AFAIK Bluewater did not use to sell Hatteras, all this came by when they merged with brokerage wing of Jarrett Bay.
Yes it is a messy situation, if I was Hatteras I would for example tell the dealer to take a pick.
I do not agree Bayliner was a good move, it was for Mercruiser, but as a brand and boat builder today it is a shadow of what it used to be.
Yes both OMC and Genmar did the same mistake, oh Corporations and Bean Counters never really work well.

Looking only at today's sales in the current market condition is a short sighted view. Even the Annual Report has a broader 5 year approach and the 5 years prior to that tell a different story as well.

Saying SR was not a major player in yachts (call it > 50') is just not true, especially if you have been to the Sykes Creek plant over the last 10 years. I have seen that facility loaded and just knocking out product like you can't imagine. They have had success in US/Canadian and European/Middle East/Australian markets, even in Russia and I can assure you that many people would like to have that sales success back. They are going in the right direction with the new "Fly" line, just a bit late in my opinion.

Even in our harbor in Dana Point they have put more yachts here in the last 5 years than the prior 30.

As far as Brunswick goes, like I have said before, being #1 gives you a big target on your back. To their credit, they did not pull the shenanigans that Genmar did, and came out of this last recession mess still standing. Did the boat group always have a handle on things? No, but they did a better job with Hatteras than Genmar and other holders of that brand before them did. They courted Cabo for years as someone really wanted that acquisition bad, and where played by the owners who sold at the right time. It obviously was not a good fit, as the joint venture with Cummins Mercruiser Diesel could only support a small segment of that brand. Other private boat companies that sold their brands to the group did not really have any other potential for the kind of windfalls they recieved for starting/building their own companies - who else was going to give them that kind of "cash out"?

With all those boat brand acquistions, they finally realized that they had purchased way too much production capacity, on the order of 15 - 20 times what the market could bear. So all the difficult (and painfull to many) adjustments today have reset that capacity to about 2 - 3 times market capacity, which gives them plenty of margin for growth.

But the motivating factor wasn't really the boat brand. It was engines. Still it remained the number one selling boat for years. Just I think ultimately they failed to maintain it's distinction from Sea Ray in the management of it.

I think the biggest issue with the larger Searay's not selling well in the past 5 years is the change in styling as much as it is the economy.....That 55' they made, the rake on the front deck going to the bow, must be -20 degrees......they ventured too far away from their last styling in not a good way. They did a lot of nice changes on the interior, but the exterior.....yeah well......

..... +1