Archive for » October 29th, 2013«

Any ferry findings appreciated



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Our ferries are sailing into a foggy future, and that’s not good enough for communities that rely on those boats.

MLAs, we’re told, are out and about this autumn talking to British Columbians, but one Island MLA has decided to buck the trend and go talk to Americans. Claire Trevena, the NDP’s transportation critic, is out at sea this week in and around Washington State on an information-gathering tour of that ferry systerm.

She may be well-intentioned, but she’s sure to have packed along some partisanship, too, and will remind anyone who’s willing to listen about B.C. Ferries’ executive bonuses. (The fat cats are an easy target, but considering the corporation’s finances, criticisms are justified.)

So what will Trevena see aboard the MV Issaquah as it navigates Puget Sound? Fact finding on the Washington ferries isn’t a new idea. It was less than two years ago that the B.C. Ferry Commission released its Review of the Coastal Ferry Act. That report looked at ferry models around the world and included analysis of Washington State Ferries. It concluded what Trevena and the NDP already know – ferry fares there are cheaper, executive pay is lower and bonuses are nonexistent.

There’s a tradeoff – B.C. is further ahead in vessel procurement and upkeep; we have renovated terminals and better amenities on our ships.

Absolutely, ferry rides here are becoming unaffordable. But it may be that both systems are unsustainable in their present forms. In both jurisdictions, ferry rates are rising, ridership is down, and the reports basically just recommend increasing government subsidies.

Can we find answers in America? It should be noted that Washington State Ferries, when it conducted its most recent report, did its fact finding in B.C.

The portholes there might be just as foggy as the ones here, but it’s incumbent upon us to keep peering out in search of answers, anyway. Island communities depend on it.


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A Rising Tide Will Lift These Boating Companies

Powerboat sales rose 18% in September, marking the third consecutive month of double-digit gains. This is great news for the boating industry and boating stocks. On the back of these tailwinds, it’s time to dig a little deeper and see what the investment landscape looks like.

More than just a boat manufacturer
Brunswick  (NYSE: BC  )  has operations in marine engines, boating, fitness equipment, bowling and billiards. Its brands include Mercury, Bayliner, Boston Whaler, Sea Ray, Life Fitness and Brunswick. Brunswick was founded in 1845 and has been traded on the New York Stock Exchange for more than 85 years.

In the second quarter, revenues increased 4%. Revenue growth was led by outboard marine products, marine parts and accessories, fitness equipment and U.S. retail bowling. Revenue declines were seen in fiberglass sterndrive/inboard boats and in bowling products. Gross margin increased by 60 basis points, while earnings per share increased by 18% to $1.23.

In the next quarter, Brunswick will be increasing its capital spending by $25 million versus the prior year to $61 million. This will include $20 million to expand Mercury’s manufacturing capacity in Wisconsin. The company is also investing in RD for Mercury with a new 17,000 square foot facility that will house two new 18,000 gallon testing tanks for Mercury products.

Brunswick is also transitioning its pontoon manufacturing to a new facility in Indiana that is twice the size of the old one. This new facility is expected to be up and running in August. In terms of bowling, the company is opening two new locations to test its new retail bowling concept in Atlanta. Lastly, Life Fitness has a new cloud-based website and app that users can connect to while using Life Fitness machines.

In looking at its shares, Brunswick trades at a forward P/E of 16. Its enterprise value/EBITDA is 10. The company has $472 million in debt, but that is offset by $330 million in cash. The company pays a very small dividend of $0.05 per share. The company has done a great job paying down debt. In addition, the dividend payout ratio is only 8%. I see it increasing its payout ratio in the near future. Brunswick will also likely look at divesting some of its brands just like it did with the recent sale of its Hatteras and CABO brands.

The ultimate boat dealer
Marinemax  (NYSE: HZO  )  sells new and used recreational boats. It is the world’s largest boat dealer with 54 locations. Its top sellers include boats from manufacturers Sea Ray, Azimut, Boston Whaler, Bayliner, Hatteras, Meridian and Nautique.

In the third quarter, revenues grew 16% to $175.8 million, which compares to last year’s sales of $151.3 million in the third quarter. Net income came in at $0.56 per share compared to $0.20 per share last year. Same-store sales increased 16%. This increase comes after an impressive 12% increase in same-store sales in the second quarter.

Going forward, Marinemax will benefit from the increase in boat sales. In terms of margins, new boat sales have the lowest margins for the company. It sees higher margins in the ancilliary businesses of finance, insurance, parts, service and storage. As more customers came to Marinemax for their purchases, those same customers will go back to Marinemax for the additional services.

Another driver of growth for Marinemax will be in its New York and New Jersey markets. That area is still dealing with the aftermath of Hurricane Sandy. Consumers are focused on repairing their homes and not on purchasing their next boat. According to CEO Bruce McGill on the company’s earnings call:

Based upon feedback from our customers, we believe there will be significant pent up demand in the state of New Jersey starting in 2014.

In looking at its shares, Marinemax trades at forward P/E of 29 and has a PEG ratio of 1.46. Book value per share is $9.21.

The store for your boating supplies and accessories
West Marine  (NASDAQ: WMAR  )  is the largest specialty retailer of boating supplies and accessories. The company has 294 company-operated stores in 38 states, Puerto Rico, and Canada, and five franchised stores in Turkey.

In the second quarter, revenues decreased 2.8% compared to last year. Comparable store sales decreased by 2.7%. Net income came in at $0.91 per share compared to $0.95 per share last year. Among the bright spots were a 12% increase in e-commerce sales and a 4.3% increase in merchandise sales. While customers were buying boats at Marinemax from Brunswick, the adverse weather kept their boats on dry dock, so they didn’t need boating supplies from West Marine.

Even though West Marine posted a weak first half, there are items going forward that I like. The company remains debt-free and increased its cash position by $8.7 million to $45.8 million. The company decreased its inventories by 2.3%. West Marine is also opening two new flagship stores in the boating communities of Newport Beach, California and Virginia Beach, Virginia. West Marine also just opened a new flagship store in Portland, Oregon. In the first weekend alone, sales were triple that of last year’s same weekend.

In looking at its shares, West Marine trades with a forward P/E of 16. It actually trades just slightly above its book value per share of $12.21. Its enterprise value/EBITDA is only 7.

Foolish assessment
I think the overall industry tailwinds are enough to keep these boating stocks afloat. Each company has strong market share in its respective category and these companies are the go-to destinations for boating enthusiasts. Of the three, I like West Marine for its low enterprise value/EBITDA and because the shares trade near book value.


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Outdoors notebook: Sailors pack Jensen for fleet racing regatta

The U.S. Sailing Center of Martin County hosted 29 varsity and junior varsity high school sailing teams from across the state Saturday in a South Atlantic Interscholastic Sailing Association sanctioned Fleet Racing Regatta.

The races took place in the Indian River Lagoon out of Indian RiverSide Park in Jensen Beach.

The event is the second of the 2013-2014 SAISA South Points regattas which are qualifiers for the Fleet Racing Championship. Fleet racing is sailed double-handed meaning there are two sailors per boat.

Two boats per school sailed in A and B divisions.

RESULTS

Area sailing teams

12. Jensen Beach High School

15. South Fork High School

18. Martin County High School

23. Clark Advanced Learning Center

24. The Pine School

26. Fort Pierce Westwood Marine and Oceanographic Academy

Top finishers were

1. Pine View High School, Osprey

2. Fort Lauderdale St. Thomas Aquinas

3. Miami Ransom Everglades

4. St. Petersburg Shorecrest

5. Sarasota High School

CASTERS JUNIORS

The Junior Division of the Treasure Coast Casters fishing club fished Sunday at Harbour Pointe Park in Fort Pierce.

Kids between the ages of 5 and 11 fished from shore for free, competing for trophies. Dean Buxton caught and released two redfish including the largest fish of the day to win the event.

The next scheduled Treasure Coast Casters Junior Division tournament is Dec. 29. For more information find Treasure Coast Casters on Facebook or visit www.treasurecoastcasters.org.

RESULTS

1. Dean Buxton, Fairlawn Elementary, Fort Pierce

2. Michael Rochedieu, St. Anastasia, Fort Pierce

3. Brayden Adams, F.K. Sweet Elementary, Fort Pierce

O.K. CORRAL HOSTS EXPERT SHOOTER

Tim Bradley, Benelli exhibition shooter, will have two shows at the O.K. Corral Gun Club in Okeechobee on Nov. 9. Bradley’s shows will take place at 11 a.m. and 2:30 p.m. with Bradley performing a variety of difficult shots. The shows are free and reservations are not required.

Visitors will be able to test Benelli and Beretta shotguns on O.K. Coral’s sporting clay ranges and check out the Club’s new 8,000-square-foot Events Center and Pro Shop. There will be snacks and refreshments.

O.K. Corral Gun Club is at 9449 48th Street N.E. in Okeechobee.

For more information call 863-357-2226, like them on Facebook or visit www.okcorralgunclub.com.


Similar news:

A Rising Tide Will Lift These Boating Companies

Powerboat sales rose 18% in September, marking the third consecutive month of double-digit gains. This is great news for the boating industry and boating stocks. On the back of these tailwinds, it’s time to dig a little deeper and see what the investment landscape looks like.

More than just a boat manufacturer
Brunswick  has operations in marine engines, boating, fitness equipment, bowling and billiards. Its brands include Mercury, Bayliner, Boston Whaler, Sea Ray, Life Fitness and Brunswick. Brunswick was founded in 1845 and has been traded on the New York Stock Exchange for more than 85 years.

In the second quarter, revenues increased 4%. Revenue growth was led by outboard marine products, marine parts and accessories, fitness equipment and U.S. retail bowling. Revenue declines were seen in fiberglass sterndrive/inboard boats and in bowling products. Gross margin increased by 60 basis points, while earnings per share increased by 18% to $1.23.

In the next quarter, Brunswick will be increasing its capital spending by $25 million versus the prior year to $61 million. This will include $20 million to expand Mercury’s manufacturing capacity in Wisconsin. The company is also investing in RD for Mercury with a new 17,000 square foot facility that will house two new 18,000 gallon testing tanks for Mercury products.

Brunswick is also transitioning its pontoon manufacturing to a new facility in Indiana that is twice the size of the old one. This new facility is expected to be up and running in August. In terms of bowling, the company is opening two new locations to test its new retail bowling concept in Atlanta. Lastly, Life Fitness has a new cloud-based website and app that users can connect to while using Life Fitness machines.

In looking at its shares, Brunswick trades at a forward P/E of 16. Its enterprise value/EBITDA is 10. The company has $472 million in debt, but that is offset by $330 million in cash. The company pays a very small dividend of $0.05 per share. The company has done a great job paying down debt. In addition, the dividend payout ratio is only 8%. I see it increasing its payout ratio in the near future. Brunswick will also likely look at divesting some of its brands just like it did with the recent sale of its Hatteras and CABO brands.

The ultimate boat dealer
Marinemax  sells new and used recreational boats. It is the world’s largest boat dealer with 54 locations. Its top sellers include boats from manufacturers Sea Ray, Azimut, Boston Whaler, Bayliner, Hatteras, Meridian and Nautique.

In the third quarter, revenues grew 16% to $175.8 million, which compares to last year’s sales of $151.3 million in the third quarter. Net income came in at $0.56 per share compared to $0.20 per share last year. Same-store sales increased 16%. This increase comes after an impressive 12% increase in same-store sales in the second quarter.

Going forward, Marinemax will benefit from the increase in boat sales. In terms of margins, new boat sales have the lowest margins for the company. It sees higher margins in the ancilliary businesses of finance, insurance, parts, service and storage. As more customers came to Marinemax for their purchases, those same customers will go back to Marinemax for the additional services.

Another driver of growth for Marinemax will be in its New York and New Jersey markets. That area is still dealing with the aftermath of Hurricane Sandy. Consumers are focused on repairing their homes and not on purchasing their next boat. According to CEO Bruce McGill on the company’s earnings call:

Based upon feedback from our customers, we believe there will be significant pent up demand in the state of New Jersey starting in 2014.

In looking at its shares, Marinemax trades at forward P/E of 29 and has a PEG ratio of 1.46. Book value per share is $9.21.

The store for your boating supplies and accessories
West Marine  is the largest specialty retailer of boating supplies and accessories. The company has 294 company-operated stores in 38 states, Puerto Rico, and Canada, and five franchised stores in Turkey.

In the second quarter, revenues decreased 2.8% compared to last year. Comparable store sales decreased by 2.7%. Net income came in at $0.91 per share compared to $0.95 per share last year. Among the bright spots were a 12% increase in e-commerce sales and a 4.3% increase in merchandise sales. While customers were buying boats at Marinemax from Brunswick, the adverse weather kept their boats on dry dock, so they didn’t need boating supplies from West Marine.

Even though West Marine posted a weak first half, there are items going forward that I like. The company remains debt-free and increased its cash position by $8.7 million to $45.8 million. The company decreased its inventories by 2.3%. West Marine is also opening two new flagship stores in the boating communities of Newport Beach, California and Virginia Beach, Virginia. West Marine also just opened a new flagship store in Portland, Oregon. In the first weekend alone, sales were triple that of last year’s same weekend.

In looking at its shares, West Marine trades with a forward P/E of 16. It actually trades just slightly above its book value per share of $12.21. Its enterprise value/EBITDA is only 7.

Foolish assessment
I think the overall industry tailwinds are enough to keep these boating stocks afloat. Each company has strong market share in its respective category and these companies are the go-to destinations for boating enthusiasts. Of the three, I like West Marine for its low enterprise value/EBITDA and because the shares trade near book value.


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Upwind blast was 'great adventure' say sailors

The PIC Insurance Brokers Coastal Classic has concluded for 2013. With it came new energy and commitment from an enthusiastic major sponsor and a family of supporters, a growing fleet, and the fun, games and challenge that traditionally marks Labour Weekend and launches the season of summer sailing in New Zealand.

There are one of two things that can happen when entrants in the PIC Insurance Brokers Coastal Classic hear that a Northerly is forecast. One is that they decide to drive to Russell to take part in the race festivities. But most take the challenge on the chin and march on, knowing it might not be comfortable, but steadfast in their determination to get their boat over the line, and to have a great adventure in the process.

For the 151 starters, a march is exactly what it was, for the first ten hours or so at least. Parts were hard, parts were easy, but there was only one option: to keep going.

The gun fired at 1000hrs on Friday 25 October 2013 off Devonport Wharf in Auckland, which saw a short reach the few hundred metres to the eastern end of North Head, but from there it was onward and upward for the 119 nautical mile stretch to Russell.

Most boats in all three divisions opted to sail the shorter distance, starting the race at the wharf end of the line and braving the famous North Head wind shadow. Some were able to hoist reaching sails and get legs that way, and others – like Taeping and Stealth Mission – started well down to leeward in clear air and at impressive speed.

The North Westerly held on for most of the day on Friday, with a relatively easy-going sea state that meant the boats which are designed to excel at upwind sailing, could come to the fore.

“It wasn’t an ultra difficult race, but it was a challenging one,” says Race Director Matthew Flynn. “Wind and sea conditions with strongish coastal breezes made it tactically difficult, there were a lot of fluctuations, and a lot of sail changes on some boats.”

He says there was a split down the coast between the onshore and offshore breezes, and a North-East tide versus a North-West breeze, and the tacticians needed to position their boats close to the coast, but not too close.

The three titans on the race course – the 60 foot trimarans TeamVodafone and Team Australia, and the Volvo 70 Giacomo – took an easy, early lead, with match racing style lead changes between the trimarans eventually sorted out when Team Australia picked up a new breeze line south of Rodney, sailing past TeamVodafone to a convincing lead of more than 30 minutes.

Giacomo, on its first major race in New Zealand, arrived in Russell at 2141hrs, and the large catamaran, and former race winner, Taeping, at 2158hrs.

Charleston was the first finisher to surprise race watchers: the 28 foot catamaran proved that size does not necessarily equal might in an upwind race, arriving fifth, at 2222hrs. The five fifty footers, led by Georgia at 2254hrs, crossed the finish line within an hour of each other, and the new multihull entrant, Dragon, crossed at 2331hrs.

A wet and squally front passed through right on time on Friday evening, after which the breeze backed off, leaving the remaining competitors wondering when – and if – it was ever going to come back. For some, like Ash Rogers and her all-girls crew on Strider, it came too late, and they were unable to finish.

“The most frustrating moment, not having any wind and being so close but so far! We are still trying, we got speed up to 3.5 knots on a good course, but unless we get some good winds on the other side [of Cape Brett] and this side, we definitely won’t be making it. We need a miracle at this point!”, Ash reported in at 1225hrs on Saturday.

Taniwha, also on its maiden voyage with a new crew, lost its rudder and after having limited success steering with a spinnaker pole, was eventually towed to safety by a fishing charter boat, where they caught up with the crew of Tongue Twister and Pacific Icon, for a beach-side spit roast with some local residents.

For about 20% of the fleet, the race took more than 24 hours – one of the longest in a number of years, and 29 boats did not finish the race – either retiring, or still on the course at the cut off.

“Congratulations to everyone on their seamanship and safety,” says Matthew Flynn. “People sailed really well. They slowed down when it got rough, and looked after their crew.”

He said that more than any other year, this year seemed like a great adventure, that people really enjoyed, and as soon as the sailors were ashore, showered and fed, they were talking about next year. Even Sean Langman promised in his victory speech, that Team Australia would be back in 2014.

Being the first upwind race since 2008, a new set of boats were rewarded for the efforts: Omega 8, owned by Scott McLaren and representing the Royal New Zealand Yacht Squadron, took top handicap honours from amongst the mononull fleet, winning the brand new North Sails trophy for its efforts. Spitfire won Division 2 on handicap, RnB took the double in Division 3, and the modified Ross 930 No Worries, in Division 4. Sigma 2 won Division 5 on PHRF. Fruition was the first multihull on handicap, and Cotton Blossom II the first Bay of Islands boat to arrive home. Elevation was the smallest boat to finish.

At the prizegiving in Russell, the skipper of Lawless had the opportunity to win the Audi A1 – but was ultimately unsuccessful – and tens of thousands of dollars worth of prizes and spot prizes were given away by the family of race sponsors: Musto, Jack Tar, PredictWind.com, Elf Oil, Mount Gay Rum, Burnsco, Jackson Electrical, Dirty Dog, Railblaza, and Yamaha.

The New Zealand Multihull Yacht Club thanks the Royal New Zealand Yacht Squadron for its extensive support of the event. Once the trophies have been engraved with this year’s winners, they can be viewed in the Dinghy Locker at the RNZYS.


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