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Sea Ray put up for sale by Brunswick

Discussion in 'Sea Ray Yacht' started by PacBlue, Dec 6, 2017.

  1. Capt J

    Capt J Senior Member

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    I don't know about Volvo so cannot comment on that.

    But, Searay has been building expresses and bridge boats in that size for well over 25 years. They always performed as good if not better than their competitors. The 59' is a just a big mismanagement of propulsion. I don't think you can directly correlate that to Brunswick. They sure have sold a lot of the 59's, because I've run 6 different ones myself and none of them directly for Searay or one of it's dealers.
  2. Pascal

    Pascal Senior Member

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    You got be kidding... the 84 lazzara i run does 20.5 kts on 78gph...

    I ve always believed one of reasons Mercury is still in business is because you can't get a new whaler without a black pos on the transom. Maybe this is why Sea Ray's attempt to use outboards on their 30 something cruiser didn't work. But if once free from
    Brunswick they can offer yammies the outcome maybe different

    Brunswick has always played with brands, not for the best. Remember in the early 2000s when they created Meridian by using the larger Maxums and Bayliners?

    Sterndrives are dead. No reasons to use them now that 4 strokes outboards as so quiet and powerful. Sea ray needs to get creative if it wants to survive in the 25/40 cruiser market which has been taken over by center consoles
  3. PacBlue

    PacBlue Senior Member

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    There are people employed in the Brunswick organization that have responsibility for new product portfolio decisions. To not hold them responsible is a fallacy in coroporate organizations. These positions determine the attributes that new products must have, and then sign-off as the process moves forward. They need to be able to bench mark the new model to their expected targets, which are defined by their experience with the dealers, knowledge of competition and their customers. So if they have determined that a 20 - 22 knot cruise is the target for the L Series, that is a huge discrepancy compared to their competition. Someone has missed the boat and you have pointed this out. I am only agreeing with that assessment.
    Now if they asked the SR group to deliver a better cruise and they didn't technically achieve this metric, that is a separate issue in Design and Product Development but someone still agreed to release the boat with the current propulsion options. A slow cruise for a boat of this type is not an enviable market position. An executive in Brunswick would clearly demand an explanation and they have moved people Because of it.
    For many , a 20 - 22 knot cruise is not so bad.With a core group of SR loyal customers they have found many buyers who can accept it, as the L line has always been marketed more about a "Luxury Buying Experience" than put an out performance. Maybe they knew this ahead of product release.
    My guess - If the L Series would have hit all its metrics, including quality, there is a good chance that this sale would never have been announced.
  4. PacBlue

    PacBlue Senior Member

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    Sea Ray put up the following numbers for 2017:

    upload_2018-2-1_13-23-4.png
  5. Capt J

    Capt J Senior Member

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    I'll address both Pascal and Pacblue

    Pascal- The Mercury Verado's have actually gotten very good ever since 2011. I manage a couple of sets and they've been pretty darn reliable with little to no issues. Also they integrate everything perfectly together, steering, controls etc. Yamaha still has it's issues of weak castings, blocked rotted out mid section exhaust port, the 350 yamaha's are a reliability disaster. At this point in the game I'd actually lean towards a Verado over a Yamaha on some HP segments and most all HP segments.

    Pacblue- Searay's cruise speed target has always been 25 knots. The 2000s boats all cruised 25 knots regardless of size. The 58' sedan bridge the L replaced actually cruised at 28.5 knots all day long. So for the new L to cruise 21-22 knots, is a performance disaster and the fuel burn is as well. They just wanted a joystick boat and could only choose 3-600 HP cummins whereas 2 900HP Volvo's would have been 4-5 knots faster and given it the performance and fuel burn it should have.
  6. olderboater

    olderboater Senior Member

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    Takes real skill to lose $17 million on sales of $387 million and that's what they reported. By comparison, Marine Products Corporation had sales of $267 million and profits of $21 million. Even at their reduced size, Sea Ray still has more than enough business base to be profitable if operated intelligently.
  7. PacBlue

    PacBlue Senior Member

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    Well it all comes down to accounting, 36 million in impairment losses, charge offs and other book keeping tricks. The Brunswick Boatgroup is over $1billion for 2017 with SR, there is more behind the story to sell off 35% of your revenue, maybe looking for some cash?

    Heard there are some quality names interested in the purchase of SR, will see what the final number will be, a good time to sell if you ask me.
  8. Capt J

    Capt J Senior Member

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    From what I've heard, they're really restricted in building bigger boats since they sold the other factory in Merritt Island. They cannot get it back since Ocean Alexander is building boats there. I really don't know why they're selling it.

    I was having a discussion along the same lines with the Sales Manager of another larger size range boat builder. Let's say 45-105'. He was telling me well it's great to be selling 75-105' yachts, the build time is such, that you need to still focus on the say 45-75' range and sell lots of those so the light bills get paid every month since the build time is so much longer on the large ones. Sea Ray IMO really had a lot of bread and butter in the under 45' range and they let a lot of this market share get eaten up for various reasons.
  9. olderboater

    olderboater Senior Member

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    Yes, but the numbers I quoted were operating, before the impairment. Basically, they're indicating they're going to sell it for $35-40 million less than it's current book value too. That's a big write-down and doesn't speak well of how they think the sale is going to go.

    My major point in the comparison I made was that don't talk about market shifts and all that. You still had companies in the same market with less sales making very nice profits.
  10. PacBlue

    PacBlue Senior Member

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    So the more appropriate comparison then would be the Brunswick Boat Group numbers versus the Marine Products Corporation as you are talking multi-brand lines. MPC Woould be about a third of the BBG even with the exit of SR.

    I would be willing to bet the $17M operating loss for 2017 is not an insurmountable obstacle for the next owner, especially after they address the L Line issues. They have a perfect opportunity to scale the business as it makes sense and create the new products to move in that direction. I am expecting SR to fetch a decent price given todays market.
  11. olderboater

    olderboater Senior Member

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    No, Marine Products vs Sea Ray is a fair comparison. Marine Products was Chaparral. They added Robalo as a small part of their business. However, they saw the shift to outboards and really built the Robalo line. Sea Ray didn't respond to outboards as that was left to Bayliner. Marine Products has always been a very well run company. Cobalt also has remained successful, as another Sea Ray competitor, now acquired.

    I do believe Sea Ray can be turned into a profitable company if someone is willing to invest heavily in it.
  12. PacBlue

    PacBlue Senior Member

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    There was no restriction because SR never built a boat at the Canaveral Plant. They pissed off County/City authorities by not revealing they were carving out a dock/launch basin when they built the place and in retaliation where not allowed to keep a boat in the water for more than 24 hours. They were never allowed to install fenders/rubber dock protection and all the docks available were concrete only, not too friendly to brand new hulls.

    The facility was used for major warranty repairs on big projects like a few wet hulls, like the older 510 Sundancers. I was there about 10 years ago and they had a mock-up of a new 70, Fly that would have been built down the street at the Sykes Creek facility they still have today. They also had a few Brunswick corporate types in the offices over time.

    It was a great facility that never met its potential under SR. SR will be a great fit for a boat group that has the 75 - 105’ range covered.

    As far as historical cruise speed targets go, for SR it was always given as 30 mphwhich is 26 knots for minimum targets, unless they were after certain competitors, then they were usually higher as you have observed. They always spoke in mph instead of knots as the larger number was “sexier” for the execs.
  13. PacBlue

    PacBlue Senior Member

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    No because MPC does not have a yacht line and a parent corporation who influenced product development. You are not including the big picture .
  14. olderboater

    olderboater Senior Member

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    I'm simply stating an opinion that it's ridiculous for any small boat builder with $387 million sales to lose $17 million. It's simply lousy management. Now, I'm not saying which managers. But that's a poorly run operation to do that. Marine Products is well run as are some other companies around. Sea Ray's "yacht line" is minimal. They have cruisers but that isn't the majority of their business either. Let's not ignore the essence of Sea Ray which is small to medium size family boats leading up into small cruisers.
  15. PacBlue

    PacBlue Senior Member

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    The difficulty is trying to determine what is the contribution of the “essence” of Sea Ray. They clearly were focused on the 35’ plus market in new product over the last ten years. And that is where they do not compare to MPC. The mix is significantly broader and the production sites are vastly different when you factor in the larger boats.

    Brunswick run SR shut down small boat product like the Laguna, Amberjack and Pechanga lines for SR as well as older Jet Boat lines. And then they burdened SR with Meridian prouduction until that failed. They could juggle the product lines as they wished, based on a Mercruiser preference for boat lines that would exclusively use their product.

    So if you would bundle a SR with say Boston Whaler, a better two brand vs two brand comparison, MPC numbers would not be as industry leading as you are led to believe.
  16. olderboater

    olderboater Senior Member

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    None of what you say makes the performance of Sea Ray any less deplorable. You have one of the most well known and liked lines and you do that with it. Incompetence.
  17. PacBlue

    PacBlue Senior Member

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    No question that those at the helm of SR and BBG failed. Understanding the failure will be key to the turnaround.
  18. Capt J

    Capt J Senior Member

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    Several things led Searay into this direction. They failed to focus on their small boat lines. When was the last time you saw a sub 28' Searay out on the water. Searay and (MarineMax) used to be the kings of retaining customers as they traded up from small boat to the next size and the next size and the next size, every 3 years. 10 years ago, you'd run across Searay owners everywhere.......that this was their 5th new Searay and they now have a 54' etc. etc.

    Their reliance on sticking with stern drives heavily is also a big issue. Nobody wants them, nobody sure as hell wants to service them in the tight places they are usually installed. Searay could've easily stuck Verado's on the back of most of their boats, but I believe Brunswick put a strong push on them to keep the stern drive lines going at Mercury which softened Searay's sales in that size.

    I agree losing money on $387 million in sales is disasterous. Also there are some quality issues with the L line from what I have heard. I have run a few 59's, a few hundred NM each and have had no issues. But I hear lots of other owners with different experiences.
  19. PacBlue

    PacBlue Senior Member

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    Well I guess we have the answer for the moment, not what I expected: https://boatingindustry.com/news/2018/06/25/brunswick-to-retain-reinvent-sea-ray-brand/

    Looks like the iconic Sundancer line will go away with the closing of the Sport Yacht and Yacht lines, feel bad for the Palm Coast and Sykes Creek plants closing and losing 825 jobs.

    Puts an exclamation point that Brunswick really has no clue beyond Outboards and gas inboards....
  20. Capt J

    Capt J Senior Member

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    Nothing comes up on the link except wells fargo ads on the sides of the page.

    Brunswick does a great job at ruining great boat builders......Searay, Cabo etc. etc.