Brunswick Corp. secured a new $400 million revolving credit facility in December to ensure more liquidity and financial flexibility.
The revolving credit commitment should help calm liquidity fears, according to an analyst who covers the company.
“Although the company does not have any outstanding borrowings on this facility, the amendment provides added financial flexibility,” wrote Edward Aaron, of RBS Capital Markets.
“We believe the amount available under this facility, combined with the cash on our balance sheet as well as recent and future cost-savings efforts, should provide us the necessary liquidity to manage effectively through these difficult market and economic conditions,” said Brunswick chairman and CEO Dustan McCoy, in a statement.
Brunswick shares were trading at $4.47 on Jan. 12. Its 52-week high and low are $19.63 and $1.82.
As part of the amended agreement with its lenders, Brunswick’s facility was converted into a secured asset-based facility. The facility contains a minimum fixed-charges coverage covenant, which is effective when borrowing is within $60 million of capacity available.
There are presently no borrowings under the facility; however, there are previously issued letters of credit, which total approximately $88 million. The amendment to the facility, which remains in place through May 2012, was led by J.P. Morgan Securities Inc.
Cruisers sheds 60 jobs, extends 68 other layoffs
KCS International, which operates Cruisers Yachts, is permanently laying off 60 workers and extending a layoff of 68 others, according to several media reports in Wisconsin.
The company, based in Oconto, Wis., blames “the current unanticipated and dramatic major economic downturn” for the job cuts, according to paperwork filed with the state’s Department of Workforce Development.
Goetz Custom Sailboats goes into receivership
Eric Goetz Custom Sailboats of Bristol, R.I., was petitioned into receivership, effective Jan. 6.
The receivership is the result of ongoing cash flow problems resulting from an inability to obtain refinancing and by the termination of a construction contract by an international customer, according to the company.
In order to preserve its assets and to protect its work force, the company laid off some 30 workers Dec. 31. The company employs some 72 people, general manager Guy Gauvin told Soundings Trade Only.
“We continue to work on ongoing projects, while Eric Goetz is working with several lenders and investors to put together a group and obtain funding to purchase the assets of Eric Goetz Custom Sailboats Inc. and/or to create a new company,” the company said in a statement. A new company would “continue in the custom boat market,” and develop “other marine-related semicustom projects and high-end commercial composite products,” the statement said.
Sailboats boost turnout at St. Pete boat show
Buoyed by the addition of sailboats for the first time, the Dec. 4-7 St. Petersburg Boat Show & Strictly Sail enjoyed a 30 percent increase in attendance from the previous show, organizers say.
“Our new joint show has been an outstanding success, bringing in record-breaking gate attendance as well as quality buyers for sail, power and booth exhibitors,” says Dane Graziano, Show Management senior vice president and chief operating officer.
The four-day boating festival took place in sunny weather at the Mahaffey Theater Yacht Basin, as visitors climbed aboard more than 500 boats. Models ranged from dinghies and inflatables to a 77-foot Horizon and 75-foot Hatteras.
Hunter, Beneteau, Island Packet, Catalina Yachts and Jeanneau America were among the sailboat builders showing boats on the docks.
Kelly Nuttall of True North Yachts in Warren, R.I., says True North expected to sell four yachts from the show, valued at more than $600,000 each.
Industry lobbyists fight N.Y. luxury tax proposal
Lobbyists for the marine industry in New York have launched a grassroots effort to fight a proposed new tax on boats and other luxury items.
“We have to educate the governor’s office on what this will do to business in New York,” Chris Squeri, executive director of the New York Marine Trades Association, told Soundings Trade Only.
Gov. David A. Paterson wants to raise the sales taxes on boats and other luxury items to fill a budget deficit of nearly $15 billion. The luxury tax provision would levy an additional 5 percent tax on boats costing more than $200,000.
Squeri says the tax will do nothing to increase the state’s coffers because consumers will simply buy fewer boats or purchase them out of state. That will hurt everyone — from dealers to marinas and other waterfront businesses, he says.
“It’s a domino that’s just going to be horrible,” Squeri says.
After hearing about the proposed tax, Squeri organized a meeting at the New York National Boat Show to inform dealers. He also called lobbyists from the National Marine Manufacturers Association to gather statistics on how the federal luxury tax of the early 1990s hurt the industry.
Squeri and his staff at NYMTA plan to set up a Web site to familiarize boaters with the tax proposal and tell them how to lobby their representatives to vote against it. www.NoLuxuryBoat TaxNY.com.
Megayachts tie up for new marina opening
The new full-service, five-star Marina Papagayo welcomed several megayachts, averaging 110 feet, to its docks Dec. 15 in Costa Rica during its official opening.
Brandy Marine International of Sarasota, Fla., has been involved in Marina Papagayo since the initial planning and design phases in 2003. Brandy Marine is managing the marina — the nautical centerpiece of the luxury resort Peninsula Papagayo in the northwestern province of Guanacaste.
“Marina Papagayo will be the finest marina on the Pacific coast of Central America,” says Brandy Marine president and CEO Bruce H. Blomgren. “The immediate response has exceeded our expectations.”
The marina has an initial 180 wet slips. At build-out, anticipated by 2012, the $15 million facility will have 350 wet slips for yachts ranging from 35 to 240 feet. www.marinapapagayo.com
N.J. firm buys half stake in Vectorworks Marine
EPS Corp. of Tinton Falls, N.J., acquired a 50 percent stake in Vectorworks Marine, a Titusville, Fla.-based builder of composite vessels.
Terms were not disclosed.
“EPS is pleased to join Vectorworks as a partner,” EPS chairman and CEO Francesco Musorrafiti said in a statement. “We have, from Day One, been highly impressed with Vectorworks, its engineering capabilities, its professionalism, and the quality of its production and vessel manufacturing facilities.”
Vectorworks specializes in boats for recreational, sport, military and commercial use. It is building the first of two EPS M-10 Hovercraft vessels for delivery this year to the Saudi Arabian Ministry of the Interior, for use by the Saudi naval guard.
EPS is an engineering, intelligence and telecommunications company with government, military and commercial contracts.
Naval architect volume on sale in updated form
The Society of Naval Architects and Marine Engineers released the newest edition of “Principles of Naval Architecture: Strength of Ships and Ocean Structures.”
The society says the volume, a revision of the book’s fourth chapter, addresses several topics of ship strength in greater depth, bringing much of the material up to date and introducing some new subjects. Revisions of the other eight chapters will be released over the next two years.
The book costs $75 ($65 for SNAME members and $60 for student members). Visit www.sname.org or call (800) 798-2188.
Group wants to pump up S.C. Clean Marina effort
The South Carolina Marine Association is working to revive the state’s Clean Marina Program, with three newly designated companies recognized at the organization’s annual meeting in December.
“The program has stagnated for the last couple of years,” SCMA president Bob Pilcher said in a statement. “SCMA got together with the Department of Health and Environmental Control and the Department of Natural Resources to revitalize it with a new guidebook and checklist. This first round was a learning curve for both the committee and the applicants.”
The South Carolina Clean Marina program awarded certification to Lighthouse Marina in Chapin and Port Royal Landing Marina in Port Royal. The state’s first clean boatyard certification was awarded to Charleston City Boatyard in Wando. This brings the state’s total number of Clean Marina facilities to 12.
Clean Marina designations must be recertified every five years. SCMA plans to next recertify existing Clean Marinas. The program was opened to new applicants in January.
AMI alerting marinas to diesel labeling rules
The Association of Marina Industries is warning marina owners to make sure certain diesel fuel pumps are properly labeled.
The AMI says a marina operator recently was fined more than $27,000 for not having the proper decals posted on pumps.
The fine was $10 for each gallon of diesel fuel in the storage tank, but the marina could have been fined $10 for each gallon sold during the entire period the pumps were not properly labeled.
That fine could have totaled more than $1 million, the AMI says.
Although the marina had a label on the pump indicating the fuel was dyed and for off-highway use only, which complies with EPA requirements, an Internal Revenue Service regulation also requires a label that indicates dyed diesel fuel is tax exempt, and there’s a penalty for taxable use.
For information, visit www.marinaassociation.org.
Seattle marina adds 11 megayacht slips
The new megayacht marina at Seattle’s Wards Cove recently opened as part of the Lake Union waterfront development project.
“Finding moorage for yachts over 75 feet within Seattle’s city limits is extremely challenging,” said Bill Weisfield, CEO of Wards Cove Packing Co., in a statement.
Using Bellingham Marine’s Unifloat system, designed for megayachts, the marina has installed 11 slips measuring 95 to 100 feet. Nine of them already have been leased.
Each slip is equipped with 200-amp dedicated power, telephone, Internet and television services, pumpout, freshwater systems and wash-water treatment posts with a phosphate cartridge and sediment filter to prevent spotting.
Wards Cove on Lake Union is a new waterfront community comprising 12 floating home sites and 14,500 square feet of office space.
Bombardier further cuts its work force
Bombardier Recreational Products, manufacturer of Evinrude outboards and Sea-Doo personal watercraft, announced sweeping changes in December to deal with the recession, including the elimination of jobs and an overall cutback in production.
The Quebec-based company said about 550 administrative and professional jobs will be eliminated. Some 80 percent of the cuts were to take place immediately and the remainder during the next nine months.
Of the jobs lost, 139 will be in the United States, BRP spokeswoman Johanne Denault told Soundings Trade Only, with the majority of the layoffs at the company’s Sturtevant, Wis., operation. Of the jobs lost in Wisconsin, 20 are white-collar positions and 78 involve temporary layoffs of hourly employees.
BRP previously had laid off about 370 factory employees in its third quarter, ended Oct. 31, and another 430 blue-collar employees received temporary layoff notices in the fourth quarter, the company said in a statement.
The work force reduction involves all BRP divisions.
“These are very difficult decisions to make, but we must take appropriate preventive measures considering the seriousness of the situation,” said José Boisjoli, president and CEO, in a statement.
Genmar introduces entry-level VEC boat
Genmar is introducing its first 17-foot VEC close-molded fiberglass entry-level fishing boat — the FinCraft — in time to ship to dealers for the early spring selling season, company chairman Irwin Jacobs announced in a letter to dealers.
Jacobs had previously said the company would be re-entering the aluminum boat business, but that wasn’t entirely accurate, according to the announcement.
“Rather, it is our intention to capture the market share of the aluminum segment of the entry-level boating market with our new FinCraft line,” Jacobs said.
Genmar planned to unveil hull No. 1 of the FinCraft at the Jan. 21-25 Minneapolis Boat Show. The 17-footer will include as standard equipment a 50-hp, 2-stroke outboard (a variety of engine options will be offered), trailer, Minn Kota trolling motor and Lowrance depth finder.
The nationally advertised price in the U.S. will be $13,995, plus freight and prep. Additionally, Genmar will offer a $1,000 introductory cash rebate during winter and early spring shows. This will put the FinCraft at $1,000 to $3,000 less than current entry-level 17-foot aluminum or fiberglass boats, according to Jacobs.
The FinCraft line will be offered to Genmar dealers and, in markets without an existing Genmar dealer, to existing successful dealers of Lund, Crestliner, Lowe, Tracker, Alumacraft and G3 boats.
Morris Yacht founder had a unique vision
Thomas Morris, the founder of Morris Yachts, died Dec. 7 of cancer at his home in Southwest Harbor, Maine, just days after his 68th birthday. His company, formed in 1972, had built nearly 200 bluewater yachts of the highest quality by 2001, when he retired and was succeeded by his son, Cuyler.
Looking for a new line of work, Morris saw an opportunity in the bare fiberglass hulls of the legendary Friendship Sloop builder Jarvis Newman. He completed his first Pemaquid 25 in 1973.
But Morris wanted to build a boat that was uniquely his, and about this time he heard of a young designer who had just gone into business for himself.
“[Morris] contacted me through a mutual friend,” says Chuck Paine. “I went to Southwest Harbor with a half model and drawings. He looked at the half model and said, ‘That’s the one.’ ”
Thus began a collaboration between the two men that lasted until Morris’ retirement.
Customer and friend Mark Ellman was looking for “an oh-my-God quality boat that was capable of going offshore but I could sail myself,” he says. It was 1989 and Ellman had a crew ready to enter the next race to Bermuda if Morris could deliver the boat on time.
“I built my first boat with Tom on a handshake,” Ellman says. He took Morris Yachts’ slogan — each one an owner’s original — to heart. At Ellman’s request, Morris cut 4,000 pounds from the boat’s structure, redesigned the rig with a carbon fiber mast and gave the boat a deep keel.
On the way to Bermuda, Ellman encountered 55-knot winds in the Gulf Stream, and after the race he discovered that the chain locker bulkhead — to which the inner forestay was attached — had delaminated.
Morris’s response, says Ellman: “We built it. We’ll fix it. He, with his own hands, fixed the boat.”
Ellman calls Morris a “phenomenal sailor” with an exhaustive knowledge of boats, despite his lack of formal training in marine engineering. Following his retirement, Morris completed his first trans-Atlantic voyage on a Paine-designed Morris 46. Ellman says his friend recently sailed a Morris 42 single-handed from Maine to Florida.
“I will miss him,” Ellman says. “He was a special guy.”
This article originally appeared in the February 2009 issue.