IBEX 2009: Dealer Development Days

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MIAMI BEACH - As part of a new Dealer Development Days program, this year's International BoatBuilders' Exhibition & Conference is featuring three free seminars specifically for dealers.

The first, "Dealer Economics: How to Survive," was held Monday, with "Stop Scaring Your Banker: What You Need to Know," set for this afternoon. Wednesday's topic is "Keep Your Dealership a Top-Notch Performer."

Monday's presentation was a sobering look at the difficulties marine dealers are facing in this economic environment.

Calling the economic situation a "catastrophe," attorney Michel Weisz, from Berger Singerman, noted there has been "nothing quite like what we are going through right now."

The market fell at the height of the industry, he said, when production levels where at their highest and credit was easy to obtain. Those days are gone and are not likely to return. Also, he said, people who in the past may have bought boats just because they could likely won't return to the industry.

"The boater wannabes are just not going to come back, at least for now," he said. "This industry, I think, is going to be completely different than what we saw. This industry is probably going to be one of the last segments that recovers."

Steve Zuckerman, director with investment bankers Farlie, Turner & Co., said financing is what's greatly needed to jump-start the industry. There are some programs out there to help, such as the Small Business Administration's dealer floorplan financing program, though it's unclear how many dealers have been able to tap that for assistance.

Some options for dealers needing help to stay in business include debt refinancing, refinancing with the help of investors, balance sheet restructuring, and a merger or sale.

The good news, Zuckerman said, is that much of the government bailout money has been repaid, so hopefully money will soon be available for lending again. Also, there is equity capital available for underperforming businesses, though he acknowledged that dealers with sales of at least $25 million would be more attractive to investors.

Jordi Guso, of Berger Singerman, discussed restructuring, both out of court and in court through Chapter 11.

Out-of-court restructuring is always preferable, he said. It's more flexible, costs less, lets management retain control and is less cumbersome. With Chapter 11, however, an automatic stay goes into effect that prevents creditors from taking legal action.

Whichever route a company decides to take, Guso stressed the importance of working with professionals who are experienced in these matters. Also, he suggested, take action sooner rather than later if you know the company is in trouble and needs help.

"The earlier you reach out, the higher probability of success you will have," Guso said. "The sooner, the better."

— Beth Rosenberg

b.rosenberg@tradeonlytoday.com

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