Military and industrial aluminum boat builder SeaArk Marine announced it will temporarily suspend acceptance of new boat orders until further notice.
SeaArk Boats, the recreational aluminum boat builder, currently enjoys steady sales and is unaffected by SeaArk Marine’s decision. Each company serves different product markets with separate sales and distribution methods, the company said.
Because of sporadic and extremely low new construction sales figures for nearly 24 straight months, Sea Ark Marine said it will begin an overhead reduction plan in an attempt to “ride out” the effects of the current market until improvement in the government and industrial marine sector becomes more apparent.
Monticello, Ark.-based SeaArk Marine is not completely shutting down its operations, the company said. It has several boats on order that will continue in construction until they are completed and delivered with factory support and full warranty coverage. The company also will continue to fulfill spare parts orders indefinitely.
New orders for repair/refurbish work with short turnaround cycles will continue to be accepted until Jan. 1, 2012.
“Obviously, this is a very emotional decision for everyone concerned,” president and CEO John McClendon said in a statement. “We have recently worked our way down to the minimum amount of fixed overhead we could and still properly serve the market that we compete in. Typical construction time for our products can be fairly long – up to a year or more for some of the larger vessels. This means that very small contracts and ones that continue to be stretched far apart have the potential to keep pushing cash consumption further and further out, eventually beyond financially sound limits.”
McClendon also said SeaArk Marine has no debt and has the ability to pay its employees and vendors.
“We wanted to be able to continue that position and control those elements long before it became any sort of crisis to manage. Company ownership has struggled with this decision for some time, but this sales downturn is the most severe experienced in the company’s 52-year history, and despite our sales team’s monumental efforts, the increasing uncertainty of various opportunities developing recently created serious doubts that it will reverse significantly within the next year,” he added.