Brunswick sees boost from better Sea Ray sales

A lengthy backlog on larger new Sea Ray products has made money for Sea Ray dealers and parent company Brunswick Corp.
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A lengthy backlog on larger new Sea Ray products, such as the 650 Fly flagship boat introduced at the Yacht & Brokerage Show in Miami Beach in 2014, has made money for Sea Ray dealers and parent company Brunswick Corp.

Brunswick CEO Dustan E, McCoy told analysts Wednesday afternoon during the 16th annual B. Riley Investor Conference in Los Angeles that a “white space product” such as the 65-foot boat has been successful for both dealers and the builder, in part because of the backlog.

Though the boat was introduced in February 2014 at the Miami show, the company didn’t start building them until May 2014.

“During that interim period we sold a lot of boats,” McCoy said during the meeting, which was available to stream live via the Internet. “In fact, we sold about a year and half worth of boats and we hadn’t made the first one.”

That prompted some to ask why the company didn’t raise the price. “Our view was we had the boats priced appropriately for the market,” McCoy said.

“We and the dealers were going to do very, very well with the market arrangement in the following sense: The customer is not having to take a stock boat and they’re getting exactly what they want when they order the boat; the dealer is not having to discount the boat one penny to get it sold, nor is the dealer having to use any of his floorplan space in order to take the boat on because it’s sold at retail; and obviously from our perspective, we don’t have to do any discounting to anybody, and we make the customer a lot happier when we move it through,” McCoy said.

“So while there’s been a lot written about our inability to keep up with demand, we thought it was about perfect and we’re all making more money living that arrangement,” McCoy said.

The company also addressed the non-marine markets it plans to enter.

Brunswick president and COO Mark Schwabero, McCoy’s successor as CEO, told analysts there are “a number of significant technologies” that Mercury has patented to prevent corrosion and to preserve structural integrity when water debris comes into contact with engines.

The company is working and testing to marry some of the needs of marine with the growing needs of the automotive industry.

“As the automotive industry is looking at other places to take aluminum vehicles, they’re looking for more structural parts, rather than just sheet metal,” Schwabero said. “We have good solid significant things going on. We are still proceeding very nicely on schedule with work and testing. You should hear more information when we’re together in November to do our next three-year outline. It’s proceeding very nicely.”

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