Skip to main content

Better weather boosts bottom lines

Following a late spring, some of the quarterly earnings news was good for boatbuilders, though maybe less so for dealers.

A theme running through the April-July earnings reports is that demand is so strong for new products that manufacturers have been unable to keep pace. Yet the CEOs of the parent companies of Sea Ray and Chaparral cautioned investors and analysts in conference calls that they will not ramp up production hastily, but will increase it only as quality standards allow. That was less than favorable news for MarineMax, which relies heavily on the Sea Ray brand and is facing a backlog. However, the company still grew sales and remains committed to the brand.

Most companies noted a turnaround after a lingering and chilly spring, though not all of them said sales had bounced back altogether.

Here are highlights from the reports:

Brunswick Corp.

Capacity of bigger Brunswick Corp. boat models has been constrained because the company is in ramp-up mode for its new large models, such as the Sea Ray 650. “The biggest issue we have around the boat business in the second half is not demand. It’s our ability to get products out in the field,” Brunswick CEO Dustan McCoy told analysts during a conference call. “We have significant ramp-ups to do.” Market analysts peppered McCoy with questions about ability to meet demand during a conference call that came on the heels of a MarineMax call that addressed the lag time between sale and delivery of some new Sea Ray products.

“We’re going to be careful getting this new product into the marketplace, especially with big Sea Ray product,” McCoy said. “If we ever err, it will be on being slower, making sure it’s right, rather than pushing it out trying to get revenue.”

Second-quarter sales at Brunswick increased 4 percent from last year, to $1.14 billion, up from $1.1 billion in the 2013 quarter, reflecting growth in outboard boats and engines, as well as parts and accessories for the marine segment. Those gains were partially offset by revenue declines in fiberglass sterndrive and inboard boats and engines, McCoy said.


MarineMax revenue grew about 22 percent, or $39 million, to $214.4 million in its third quarter and same-store sales grew 22 percent on top of 16 percent growth in the quarter last year. The company’s focused efforts resulted in market share growth as it capitalized on momentum that carried over from March into its historically busiest selling season, according to CEO Bill McGill.

MarineMax saw reduced margins in the June quarter because the company “largely didn’t have the new models to sell,” according to CFO Mike McLamb. However, the company was able to realize one of its best unit growth quarters since before the recession with encouraging gains in sterndrive sales. “If we’d had new products … two years ago, the company would look entirely different today,”McGill said. “But we made a conscious decision to stick with the No. 1 brand in the world called Sea Ray and new products take time to do. Decisions to not invest in new product that were made years back — we’ve had to pay the price for that. But that being said, we’re going to get all the rewards when we do get new products.”

Marine Products Corp.

Marine Products Corp., the builder of Chaparral and Robalo boats, announced a 13.6 percent second-quarter sales increase, citing higher unit sales and more sales of larger boats. Net sales reached $48 million for the quarter that ended June 30, compared with $42.2 million in the 2013 period. Gross profit for the quarter was $9.4 million, or 19.7 percent of net sales, a 28.9 percent increase from $7.3 million, or 17.3 percent of net sales, in the quarter last year. As a percentage of net sales, gross profit increased because of efficiencies from higher unit sales volumes and a favorable model mix.

Sales of Robalo’s larger sportfishing and bay boats increased despite encountering “a real struggle” in regions affected by bad weather, said CEO Richard Hubbell. Jetboats also continue to be a bright spot.

West Marine

Revenue at West Marine dropped slightly, compared with last year, to $236.5 million, and comparable-store sales decreased by 0.7 percent in the second quarter, prompting the company to lower its 2014 guidance. The retailer now expects pretax income to be in the $8.5 million to $11 million range — $7 million lower than previously forecast — compared with $15.3 million in 2013.

“We were disappointed by second-quarter sales, which were about flat to last year,” said CEO Matt Hyde. “At the product level we saw the strongest increases in our merchandise expansion categories, including paddle sports and women’s clothing, but sales of core products were soft. During the second half of the year we’ll continue to reduce operating expenses to drive nearer-term profitability while continuing our careful investments in our strategic initiatives.”

The company reported a profit of $18.3 million, or 75 cents a share, for the quarter that ended June 28, compared with $22.2 million, or 90 cents a share, in the quarter last year. Net revenue for the 26-week period that ended June 28 was $349.8 million, a decrease of 0.3 percent from $351 million for the 26-week-period that ended June 29 last year.

FLIR Systems

Electronics conglomerate FLIR Systems saw revenue decline 5 percent, to $369.4 million, and operating income drop to $59.4 million from $70.3 million in the second quarter. The maritime segment saw revenue grow 1 percent from 2013, to $55.2 million.

“Strength from the Raymarine products, particularly multifunction displays, sonars and autopilots, was offset by weaknesses from FLIR-branded thermal cameras, due in large part to reduced deliveries to the municipal first-responders market,” FLIR COO Thomas Surran told investors and analysts during a conference call. “Maritime operating margins increased slightly, compared to Q2 2013, as gross margins improved as a result of our new products having higher margins than prior-generation products.”

Second-quarter 2014 net income was $44.8 million, or 31 cents a diluted share, compared with $50.2 million, or 35 cents a share, in the quarter a year earlier.

Garmin Ltd.

Garmin saw improvements in gross and operating profits, driven largely by fitness and aviation, with total revenue of $778 million for the second quarter. The marine segment saw a 1 percent gain in revenue from the 2013 quarter, with $73,780 earned in the second quarter this year, although the company said the segment saw increases in gross margins. “Our great start to 2014 continued with a second consecutive quarter of revenue, operating income and pro forma EPS growth,” Garmin president and CEO Cliff Pemble said.

The marine segment posted revenue growth of 1 percent, compared to the “strong performance” the company achieved in the second quarter of 2013.

This article originally appeared in the September 2014 issue.



NMRA Sets Scholarship Deadline

Students pursuing education in the marine trades can apply for the National Marine Representatives Association awards until April 1.


Marine Products Reports Record Q4

The builder of Chaparral and Robalo boats reported net sales were up 42% for the quarter and 28% for fiscal year 2022.


Shurhold Appoints COO

Forrest Ferrari has years of management, business development, IT and quality-assurance experience.


RBFF, Pure Fishing Partner for a First Catch Center

Pure Fishing will equip a mobile trailer with tackle and gear to bring fishing experiences to areas of South Carolina where participation is low.


An Oft-Overlooked Sales Opportunity

A recent report from the Recreational Boating & Fishing Foundation showed that women comprise 37% of all anglers. If you haven’t tapped this segment, you’re missing out.

1. 2023 new boat retail outlook

Too Many High-Priced Boats

To wrap up 2022, marine retailers reported lower demand, expressed more negative sentiment and voiced concerns about rising inventory. Boat prices and the economy remained top of mind for dealers in December.

Soundings Nov 2022

New-Boat Registrations Continue to Slide

As the gaudy sales figures from the pandemic continue to return to more realistic numbers, the main segments of the recreational boating industry saw new-model registrations of 4,421 in November, a 30.3% drop from 6,340 during the same time in 2021. .

1_thumbnail_Darren Vaux Headshet 2022

ICOMIA President Darren Vaux sees common pressures facing worldwide boating industry

Founded in 1966, the International Council of Marine Industry Associations is a global organization composed of national boating federations and other bodies involved in the recreational marine industry. ICOMIA works on such issues as breaking down trade barriers, improving boating safety and promoting recreational boating worldwide.


Clearing the Waterways

In Florida, in the aftermath of Hurricane Ian, it was estimated that there were 6,000 derelict boats in southwest part of the state. In most cases, boat owners don’t know resources are available to remove them because until recently there weren’t many.