Correct Craft CEO Bill Yeargin has overseen the company’s expansion through some new acquisitions that have led it to grow exponentially. The parent company of Nautique has been on an acquisition streak, having bought fishing boat brands Bass Cat and Yar-Craft in March and engine builders PCM Marine Engines and Crusader Engines last October. (Yeargin says Correct Craft will be buying another boatbuilder in the coming months.)
In 2012, Correct Craft began buying cable wake park complexes under its Aktion Parks brand, and it has reorganized to help manage the growing company. Yeargin will remain CEO of the umbrella company, as well as Nautique, but will yield day-to-day operations at Nautique to new president Greg Meloon, the founder’s great-grandson.
Correct Craft increased its work force by 58 percent between 2010 and 2013. The company also has stepped up its philanthropic efforts, sending employees on missions that include Habitat for Humanity, Haiti relief efforts and service trips to El Salvador. Employees have said the trips were life-changing experiences, and Yeargin says the outreach efforts continue to make the group function more tightly when they return.
We caught up with Yeargin to discuss the company, see where he might be leading its future growth and discuss his efforts on Capitol Hill on behalf of the industry.
Q: Can you give us a rundown or your background and history? Where did you grow up, and what got you into boating?
A: I grew up in West Palm Beach and loved the Florida lifestyle, including being around the water and boating. I stayed in South Florida for college, getting a degree in accounting and becoming a CPA. I went to work for the world’s largest CPA firm but realized quickly that was not for me, so I went back to get my M.B.A. In the meantime I went to work for one of my clients, Rybovich, in the marine industry.
In the early ’90s, after speaking at a marine industry conference, I was invited to begin writing on leadership and management and have been published over 200 times, including dozens of times in Soundings Trade Only. The columns resulted in me being invited to speak at conferences all over the globe [as a Rybovich employee] and eventually to me being offered the CEO role at Correct Craft in late 2006. That’s the short version.
Q: You seem to have a close family. How many kids do you have? Do you all spend time on the water together when the opportunity arises?
A: I do have a close family. I have been married 31 years and have two daughters and a son-in-law. I know people expect me to say this, but I honestly believe a big part of the reason we have a close family is boating. We have spent thousands of hours on the water over the years. We still do.
Q: Acquisitions — you guys have had many in recent years. Can you talk about the strategy and where you might be headed next?
A: First let me give you a little background. When I arrived at Correct Craft over eight years ago, our branding was a complete mess. No one knew if we were Correct Craft or Nautique. We had several different logos, and different boats were branded differently. I knew we needed to fix that, and we did. Part of that fix was a focus on Nautique being the boat brand and Correct Craft being the parent company.
After setting Correct Craft up as the parent company, we began to view it in a new way. We saw Correct Craft as a vehicle to grow our company and invite others to join our family. So we started to look for opportunities, though initially we did not have much luck. It was shortly after the Great Recession, and the companies we wanted to buy didn’t want to sell. On the other extreme we had people who wanted to give us their companies — however, we were not interested — and they all went out of business.
So we changed our focus, and instead of working to acquire other boat companies, we directed our attention to cable parks, forming Aktion Parks. Aktion Parks first acquired Orlando Watersports Complex, and we just opened Miami Watersports Complex. Both provide the option to enjoy watersports on the cable or behind one of our Nautique boats.
While our focus was directed to the parks, we still wanted to grow through acquisition. Last year I met with Paul Fletcher, who then owned Pleasurecraft Marine, the company that builds PCM, Crusader and Levitator engines. Paul was looking for someone to buy his company who he trusted to well manage his legacy and take care of his employees. We already had a high trust level, so after we started talking, the deal went fast, and we closed it last year.
Our most recent deal, acquiring Bass Cat and Yar-Craft, was a similar situation. The previous owners, the Pierce family, were looking for someone who would be a good steward of their company, legacy and employees. I’m honored that they chose us, and we intend to do our best to live up to their expectations.
With these new members of our family we now have manufacturing in Florida, Arkansas and South Carolina, we have boat and cable parks in Florida, and we distribute to nearly 70 countries around the globe. In terms of revenue, I suspect we may be the third-largest company in the marine industry.
Q: Can you give us any hints on where you might look to grow next?
A: We have another deal in the works that we hope to close in the next couple months. We are staying in the marine industry.
Q: The most recent announcement was of two lines, Bass Cat and Yar-Craft, that are playing in a new space for you. Can you talk about that decision and where you plan to go from here in the fishing segment? What attracted you there?
A: We were not specifically looking to go into the fishing markets because of some long-term concerns I have related to saltwater fishing. I think our industry has some big issues to face in the years ahead as fish stocks dwindle and more governments implement fishing bans.
However, as you know, both Bass Cat and Yar-Craft are freshwater fishing boat manufacturers. Even more important to us is that they build very high-quality boats and offer excellent customer service. When J.D. Power surveyed boating customers, Bass Cat won their award year after year. As I have spoken to customers from both companies, I have been incredibly impressed at how they rave about the service the companies offer. And finally, as I met the Bass Cat and Yar-Craft teams I quickly realized that they are really good people. That was all we needed to know. We were in.
Q: Can you talk more to me about the fishing issue you touched on? Do you think the industry is having a hard time balancing conservation with fishing interests?
A: No, I don’t think this is a problem with our industry. I am more worried on a big-picture level that the fish stocks drop so low that either there are government bans on fishing or fishermen lose interest.
Q: The industry seems to be making headway in distinguishing recreational fishing quotas from commercial fishing regulations. Do you think this helps?
A: Absolutely. However, if there are minimal fish in an area, it is much less fun.
Q: Anything else you can tell us regarding future purchases?
A: We are still looking to grow. We are assertively looking for new boat and cable parks and expect to eventually have them all over the globe. We have one more boat company acquisition in the works now that will be significant. Then we may take a break from acquiring manufacturers to focus on integrating and optimizing. However, even during that time we will still be open to the right deal.
Q: Can you tell us about the recent reorganization and explain why the shift? Will your focus shift? In what way?
A: The reorganization impacted our Nautique subsidiary, but it was driven by the growth at Correct Craft. Until recently I have held the titles of president and CEO of both Correct Craft, the parent company, and Nautique, our biggest subsidiary. As Correct Craft has grown, I wanted to spend time with all of our companies, in addition to leading the [merger-and-acquisition] effort. It was hard to do that and give Nautique all the attention it deserved.
And, importantly, I wanted to ensure that we did not lose focus on Nautique. We have had so much success at Nautique the past eight years. We have had significant market share increases, we have won all of our industry’s top product and innovation awards — Boat of the Year, Most Innovative Product and many others — and in a state with over 18,000 manufacturers, we were selected as [Florida’s] Manufacturer of the Year. To make sure we did not lose any of this great momentum, it was important to reorganize.
So while I have maintained the Nautique CEO title, for several months I have also been working to extract myself from the day-to-day operations.
Greg Meloon, the great-grandson of our founder, has taken over all responsibility for Nautique product development, marketing and sales and will have the title president. Angela Pilkington is our new COO, with responsibility for manufacturing, quality, supply chain and all [general and administrative] functions.
As CEO of Correct Craft, I will be involved with the strategic and executive decisions at all of our companies.
Q: In a year following the recession we saw the number of dealers shrink to about half, but that was not the case with manufacturers. Any thoughts on why that might be?
A: We did see some manufacturers go out of business, but not many. It is really hard to kill a brand. Even if the company does go out of business, someone will buy the brand and start over, trying to leverage whatever brand equity is left.
I think our industry has a number of owners who are looking to transition to a new stage of life and will soon be looking for a liquidity event. So while I think we will see more changes, I am not sure it is part of a trend, other than owners are getting older and ready to divest what in many cases is by far their biggest asset.
Q: You have been doing a lot of work in Washington, D.C. How did you get into that, what have you done and how does this work impact the marine industry?
A: Really, it all started with a trip to Korea, where I met with government officials. After the trip I received a call from the Korean Embassy, indicating that the Korean ambassador to the U.S. would like to come visit me in Orlando. He did, and we developed a great rapport, which resulted in me being invited to join him in an Oval Office meeting with President Obama before the signing of the U.S./Korea Free Trade Agreement.
After [that] meeting, I started getting invited to other events and even spoke at the welcoming ceremony for the next Korean ambassador. Eventually it ended up with me being asked to serve on a council of business leaders who advise U.S. Secretary of Commerce Penny Pritzker.
My first couple of years working on the council, I focused on innovation and what U.S. businesses could do to be more innovative and competitive. We made recommendations regarding many different issues, including the disconnect between government and academic research and the private sector, the imbalance in U.S. research focus on product development versus manufacturing, and the need for better collaboration and connection throughout the national supply chain.
Currently I am co-chairing the Trade and Tax Policy Committee, focusing on tax issues that disadvantage U.S. companies and trade opportunities throughout the global marketplace. All of the issues directly impact the marine industry.
Q: What types of recommendations and reforms are you working on? How specifically will they benefit the marine industry?
A: We have been working on lots of things but have identified four primary areas of focus.
The first is work force. We are focusing on providing recommendations related to the current and future skilled worker shortage. Economic growth and demographic changes, with baby boomers retiring, are both going to make this problem worse in the years ahead. We also need to focus on programs to help workers develop skills.
Another area of focus is energy. Many experts believe the United States is at the beginning of a significant energy windfall, brought on by new ways to extract oil and the quick advancement of photovoltaic or solar technology. We want to figure out how to export this energy in the form of manufactured goods instead of just exporting barrels of oil.
Innovation is another area where I focused most of my attention the past couple of years. We worked on ways to get government and academic research into the hands of the industry. We also focused on how we can direct as much attention to R&D of manufacturing techniques as we do to product development. We also [worked] on developing more collaboration within the supply chain.
And just recently I agreed to co-chair the Tax and Trade Policy group.
The marine industry is impacted in all of these areas. We need workers with good employability skills. Energy impacts our industry in several ways, and if we can use the energy windfall to lower the price of our raw materials, it will make us more competitive on the global stage. We know that innovation has a huge impact on our sales. Finally, tax and trade policy has a big impact on our industry.
Q: The cable parks seem to provide an emerging access point for people interested in wakesurfing and boarding. Is that what you had in mind with these?
A: When we first entered the cable park business, some people thought I was crazy. They asked why would we support the growth of a less expensive alternative to boating, but we saw it [as doing] just the opposite. Cable and boat parks are a small but very important part of our business; they are a long-term investment with significant potential. I believe cable will bring many people into boating, but we don’t invest in a park solely to develop boat customers. Each park has to stand on its own, and we have specific investment return expectations.
However, once we justify a park on its own merit, there is significant synergy with our other businesses. Cable park customers tend to be families, which we love. Parents bring their kids to the parks and either watch the fun or ride the cable themselves. They are really fun places to be. I enjoy time on the cable regularly, and I have met many, many people who have gotten into boating after spending time at one of our parks. Boating is a whole different experience, and cable will never replace time with your friends and family on a boat.
Q: Can you talk about access and boating? How far has the industry come in providing access points for new or young boaters, and where does it need to be?
A: Many times when discussing access, people bring up the cost, and, yes, boating can be expensive. We have to demonstrate value. What would people pay to have a close family? My daughters are adults now, but we had a very close family when they were growing up and still do today. I attribute a big part of that to the thousands of hours we have spent boating together the past 20 years.
As an industry we need to get people on the water and demonstrate how much fun it is. Also, we need a global focus on developing customers. Around 95 percent of the world’s consumers live outside the U.S., and there are many who can afford to boat.
Q: Have these events translated into real sales, or do you think of them more as planting the seeds?
A: They plant a lot of seeds, but they also definitely result in sales. Normally the events will entail time on land with food and drinks to introduce people to our product. And more importantly, we will spend a lot of time on the water with prospective customers.
Q: The ski segment has done relatively well in recovering. Why do you think that is?
A: I am often asked about the ski and wake segment and the perception that it is doing so well. What people don’t realize is that, while the segment has grown since the Great Recession, it is still just about 50 percent of where it was a few years ago with the same number of competitors. It is still a tough segment.
However, the ski/wake segment has done a great job of being innovative and developing brand loyalty. Our buyer tends to be the family with a couple of kids, which makes for interesting marketing. We have to sell and market to the buyer, usually the parent, and the influencer — often the teenager.
Q: Can you speak to some opportunities in this segment among millennials?
A: I think boating can be attractive to all age groups, including millennials. Our industry needs to demonstrate how much fun boating is and how relationships with friends and family are built through boating.
Q: Correct Craft does a lot of philanthropic work around the world. How did you start moving in that direction and what have you learned?
A: In recent years we have purchased three homes for Habitat for Humanity in central Florida, and our employees volunteered time to help build them. We have taken employees all over the globe to serve in places like India, Ethiopia, Kenya, Uganda, the Dominican Republic, Guatemala, Nicaragua, Mexico, El Salvador and on the Apache reservation right here in the U.S. Most recently, we chartered a plane, and a dozen of us delivered 3,400 pounds of food to Haiti. This work has become a big part of who we are.
This article originally appeared in the June 2015 issue.