MC Chapter 11 ???

Hey All, Sorry if this has already come up. Ran in to an industry insider today and was told the rumor is MC will be filing for chapter 11 protection after the boat shows conclude.

I love my MC, but given the economic climate, I would not be surprised if they (and others) are not suffering.

Hope its not true.....

That would be sad news.

Damn 300.....

Can't verify that particular rumor,but I know CorrectCraft is down to 2 days a week building boats. It doesn't look good for the industry at all.

that sucks

I call BS

So two months before the shows slow down we would know that MC already has plans to file under Chapter 11?
I think, if there were any truth to that, about 3 people in the world would be privy to the info and it wouldn't get leaked here very easily. I'm with Darren.

Sounds like BS to me too. Makes you wonder who this "industry insider" is that would leak such a rumour.

I would think if this rumor is true then others are gonna be right there with em'. Wouldn't you think. Especially smaller companies like Centurion, Tige, Ski Supreme, MB, etc.

Are you sure this isn't what you heard about?

http://washington.bizjournals.com/washington/stories/2006/05/15/daily68.html

Mike... Smaller companies could actually have a better chance to survive this economic climate. It all depends on the Balance Sheet and Cash Flow. If a smaller company has lower overhead and less or no debt... then they require less cash flow to keep things afloat. Bigger companies, who have taken on large sums of debt to expand in a shrinking market have some serious re-structuring to do. But it may be too late.

Overall it is tough for everyone out there!

i think lou found the real master craft that is going under

Does anyone know how Pouschine Cook Capital Management is doing? I guess they could always find a buyer for MC if they need to start unloading. I am guessing Mastercraft's balance sheet is less than desirable in this market. I don't think Chapter 11 would be that bad for them. A little restructure with good guidance could put them in a better place when the economy becomes more favorable for the water sports industry. When ever that is...

BS, remember Penske owns MC

well that sucks if its true... they have nice boats but really expensive.

READ LOU (FERRAL'S) LINK PEOPLE. its not the boat company

(Message edited by Ponte_06_x2 on February 02, 2009)

Does anyone know what Mastercraft's investor break down is? Penske does not seem to have a lot of diversity outside the transportation industry from what I have could find.

Pouschine Cook

Penske / Transportation Resource Partners

Google "Mastercraft bankruptcy" sometime. The one that Lou points out is from 2006.

There are others too, Mastercraft Printers, American Mastercraft Inc., & various boat dealers who have reorganized or gone out of business.

In this economy it would be safe to say that any and all wakeboard/waterski boat companies are considering chapter 11 filing. There are just too many unsold 2008 boats still on the market. The market did not adjust quick enough, now we have a glut of product available, maybe enough 2008 boats to fill the small 2009 market without building a single boat in 2009? It seems that every boat dealer that is still in business has a lot full of boats, most are leftover 2008 boats. Keep in mind that the majority of boats purchased in the past 10 years were likely financed with the help of home equity. Now that home equity loans have become scarce, the cheap and easy finance source is gone. The market must adjust.

The possible mastercraft boats bankruptcy would not be indexed by Google without a press release, rumor mill forum string or an actual filing with the SEC. I have heard rumors circulating in the industry not pertaining to a Google search for "Mastercraft bankruptcy".

I hate to hear rumors like this but I don't think a manufacturer with a product like MasterCraft would ever see closed doors.

I agree with Mikeski.

Like I said, it was a "rumor" that came from inside the wakeboard boating community, not from google. I agree there is a fair amount of left over 08 and early 09's. I wouldn't be surprised to learn that MC and others have or will be suspending manufacturing.

Mike, I was just trying to be a smartass, the article I found was from 2006. I'd agree, if there is any truth to the rumor, google would most likely not know about it. Maybe it wouldn't be such a bad thing if some of the big guys went through chapter 11. It might help them wake up to the fact that prices became way overinflated in the last few years. With cheap easy financing gone, they are pricing themselves right out of business. House prices have dropped, what about 30+ percent over the last 2-3 years? Yet boat prices have continued to go up. I think we've reached the point where most of the people who were buying all the boats can no longer afford them (or in many cases never could afford them in the first place, just too easy to get a loan).

^^^These boats are high end luxury itmes, not every average Joe is entilted to have one.

I guess porsche's are overpriced too.

^^^These boats are high end luxury itmes, not every average Joe is entilted to have one.

I guess porsche's are overpriced too.

I agree with Sam. Luxury items like these have a premium, when the overall economy turns around they'll be able to sell their boats for their overinflated prices again. Its like a lexus vs toyota. Lexus LX runs 85K while a similar Toyota Sequoia is about half that price. This is the perfect climate for price point boats like the Axis and Moomba.

I disagree you can't finance a Porshe for 20years. I do agree that they are luxury items but entitled? No

Porsche is hurting as well, the HELOC bawlers drove all of this! Now the market will adjust, or get bailed out.

Just finished our boatshow. Heard all the rumors. MC going bankrupt. Malibu shutting down TN factory. CC only producing 2 boats a week. Rumors!

i heard that two dudes found Bigfoot in Georgia...?

anyone else heard that?

lots of rumors floating around...

If everyone talks doom and gloom, then doom and gloom will happen!

Believe in the economy and support your local businesses..

and buy Bigfoot memorabilia

Mike- You can take Tige off that list. They're holding strong. Unlike most of the boat manufactures out there they didn't load their dealers up with inventory over the past couple years so they're still building boats on a little slower than normal pase. I'm not saying that they're popping them out like crazy but they're not down to a couple days a week.

I agree Greg. I think just a little of this mess has been self-prophesizing.

Well, the berry crop was down in Washington last season so maybe Bigfoot is just looking for a better locale.

I wonder if the White House press secretary is going to come to my defense with "nobody's perfect" when I "forget" to pay $120,000 in taxes.

Message sent by our government: failure to pay your taxes is not that big of a deal as long as you say it's was an honest mistake. Sad.

I think what the gov. is saying is that taxes is not that big of a deal compared to what has been going on the last 8 years.

Ryan. Also, Tige owns their factory, which keeps the overhead down.

Ryan,

Tige is not doing bad because they are giving boats away free...see the "buy one get one free" thread.

^^^ That isn't Tige doing it. It's the boat store offering that deal. $.02

Owns their factory free and clear or making payments on it. Big difference. I doubt the former because they just built it not too long ago.

(Message edited by lionel on February 03, 2009)

(Message edited by lionel on February 03, 2009)

We will all find out soon enough but I have heard the same thing. Penske is sick and tired of dumping money into something that is not making any revenue right now. They need to stop building so many boats per day and follow through with the tough times.

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quote:

I wonder if the White House press secretary is going to come to my defense with "nobody's perfect" when I "forget" to pay $120,000 in taxes.

Message sent by our government: failure to pay your taxes is not that big of a deal as long as you say it's was an honest mistake. Sad.

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Oops, looks like I posted that in the wrong thread!

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quote:

I think what the gov. is saying is that taxes is not that big of a deal compared to what has been going on the last 8 years.

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Wow, talk about twisting your ethics into a pretzel to make it fit your agenda! Again sad.

Well, for sure Malibu saw this coming and did a sale/lease of back their facilities last year in order to raise liquidity. Owning your facilities is great, but cash is king.

The sale/leaseback credit company is now offering the properties for sale to the public. Here's your chance if you really believe...

http://www.spiritfinance.com/SpiritFlyers/CA,%20Merced%20Malibu%20Boats.pdf

I'm pretty sure Tige owns their factory outright. No payments.

^^^ Has nothing to do with ethics...has to do with political opinion.

Great timing for an information leak of this sort. Sounds like BS to me, to scare buyers into helping drain inventory from other manufacturers.

I have no idea if the rumors have any merit, but with the big 3 auto makers all going belly up without the bailout, I would not be surprised at all if the big 3 boat makers struggle mightily as well. We are sure to see some of the big boat makers file chapter 11. This does not mean they will go away, they will have more time to gain liquidty, find investors or sadly liquidate.

Bryan- lets just say the city of Abilene took care of Tige. I can't say exactly what they pay on it but its a 0 interest payback and they have as long as they want to pay it off. They pay almost nothing on it its so low. They're in much better shoes than all the other manufactures are as far as their factory payments go.

David, I had two employees who the federal government threatened to take their houses for tax mistakes of less than $5000 each. It's interesting that this guy is essentially getting off. It doesn't appear they are getting buried with penalties like an average Joe.

I guess it has nothing to do with ethics, just political opinion!

Did we loose Master Craft during the short hi-jack.

Now you are getting it Dave... I have not been alive for an ethical administration so what made you think this was any different.

I don't believe it is fair to compare the boat manufactures with the big three - at least without having more information. Note that only the Big 3 are at risk of failing - and this is essentially because of excessive leverage (along with unions and poor product mix). All automakers are hurting - but you don't hear of Toyota, Honda, Nissan, or Hyundai, talking about failing. These companies don't carrry the massive debt that the american companies do - so they don't have to pay interest on the debt and they don't have a couple of 100m in loans that need to be refinanced. Since none of the inboard companies are public - it is difficult to impossible to get accurate information on their balance sheet. The companies that manage debt in a responsible manner will be fine - production will be cut and layoff will occur - but they will make it. If you need to refinance your factory this year, good luck.

I agree with you Chuck, I was just tying to point out that those that claim it is impossible for these companies to be in such trouble that they would have to file chapter 11, just need to look around to see that it is very possible if things don't improve in the near future.

Good move to shift the focus of this thread from MC to Tige!

Back OT, can someone logically explain how it's BS that MC might be doing bad, and if they are, everyone else must be doing worse?

I don't believe there is any arguement that all boat companies are dealing with a major drop in sales, my point is does anyone know what the capital position of these companies are? This is what will require you to file for bankruptcy.

TigeMike,

MC has one of largest market shares of any boat company, these companies rely on sales to maintain their cash position. I doubt any of these boat companies stock piled cash under their pillow. So if their revenue relies on cash flow from sales then they are hurting. If they are hurting then it is fair to infer that many of the others are hurting as bad if not worse. Just because company X is gaining market share doesn't mean they are gaining overall sales. Just because they own their facility doesn't mean they are doing well, that just means that what ever cash they did have they chose to invest in a fixed long term asset that is not liquid. So in essence owning your own plant could potentially be worse. (That address Ryan's point above also)

Ummm,

I was the first to predict that Chaperral would become the next Pro Wakeboard Tour sponsor in the Chap thread....maybe, just maybe, my prediction will come true. Can't wait to see the Chaperral Wakesurfing Championships. I am sure that if MC is in trouble, so is Centurion. This is a great opportunity for Chap to become the head sponsor of the largest tours in both of their newly positioned markets (wakeboarding and surfing).

Seriously though, Ryan I wasn't saying anything negative about your beloved company Tige. Geez, I was just stating that if these rumors become reality, I would be very concerned that other companies would be following suite very quickly. I just threw Tige out there as an example.

Carry On.

(Message edited by ponyh8r on February 03, 2009)

Chaperral/Robalo's 4th quarter numbers were off 61.4 percent vs. last year....don't look to them as the Savior of the boating world...they are in just as much trouble as any other.

They lost 1.8 million in Q4 2008...I doubt there's a bunch of Sponsorship dollars on the table at this point.

About the only indicator's in this industry on financials is Chaparral, Brunswick (Mercury, Sea-Ray etc), Fountain and Marine Max (dealer).

Chaparral: http://finance.yahoo.com/q?s=MPX

Brunswick: http://finance.yahoo.com/q?s=BC

Fountain: http://finance.yahoo.com/q?s=fpb

Marine Max: http://finance.yahoo.com/q?s=HZO

Other than that its speculation. If you take the time to read up, none of them are optimistic....

Mike- I didn't take it as being a negative comment. I just didn't want people to think that Tige was hurting as bad as the other manufactures. No harm done.

Just finished our boatshow. Heard all the rumors. MC going bankrupt. Malibu shutting down TN factory. CC only producing 2 boats a week. Rumors!

My post stated that CC was producing boats 2 days a week,not 2 boats a week. Didn't know if you were quoting me on this statement or not. To the best of my knowledge my info is 100%accurate. Boats 2 days a week,on the job training 2 days a week to keep employees there enough to maintain benefits. I haven't heard anything verifiable about MC or BU so I can't comment on that.

As far as all dealers being loaded down with 08 stock, not true, I know we are not loaded down with 08's.

I would have to disagree. all i have heard from any of my companies other than crownline and mercury (which mercury has been havin problems the past couple of years anyway) is that yeah, things aint great but we have seen worse if they have been around longer than 25 years or so.

I dont know about other dealers, but we just came out of probably the best boat show we have ever been in. everything sold well. and im sure that the manufacturers are starting to see the same things we are too now.

Ryan,

Cool, I understand what you meant now.

Meathead, it was a joke.

^^^^^
Sorry, I missed the sarcasm in your post, Mike.

As an industry guy.....it ain't pretty. More will fail before this thing turns around, I'm afraid.

Jeff. My local CC dealer isn't loaded down with 08s either. They actually have quite a few 09s on the floor. Sold two of those this past weekend at the boat show.

MikeS
I wasn't quoting you. I was repeating rumors we heard at our show. I know they are building more than 2 boats a week.
Wakeboard boats are still selling in KY at least. Sterndrives.....that's another story. I think we'll see a few of them fold up before the inboard companies falter

No prob Boatworks. Local CC dealer says wakeboats are selling up here also,albeit on a smaller scale. I think alot of people who can buy will buy this year. Lots of deals out there.
I'm assuming your a dealer? Hang in there.

It's not Mastercraft Boats filing chapter 11 it is Mastercraft Upholstery they just go by Mastercraft and everyone thought it was Mastercraft Boats. They are slow like everyone but have made cuts to pull threw the slow economic times. This is not the first time that times have been tough and I am sure it will not be the last. People who really love the sport still find ways to do what the love.

ll Ive heard concerning MC at all was the one of the owners of Copes cannot be found! haha hes probably runnin' wild in his skinnys

Check out www.secfilings.com or www.sec.gov/edgar

I haven't taken the time to sign up with secfilings.com but I hear they give a lot of up to date info.

I've heard within the next 30 days chap. 11 for MC. Which isn't really that bad

I LOVE Rumor control here on WW

You guys start em then spread em

MC going Chap 11...what a joke

Chaparral sponsoring a wakeboard / wakesurf tour?!?!? Dude, you and Phelps need to put down the bong and get a little fresh air. There is no way that prediction will EVER come true. If there ever comes a day that a sterndrive company is the title sponsor of a watersports tour or championship, that will be the day that all the wakeboarders & wakesurfers on this site, should burn their boards in repugnance and commit mass suicide! That would signal the end of it all.
Seriously though, as someone who has been in the inboard segment of the industry for well over a decade, I can tell you that this is a very tough time for EVERY manufacturer. Luckily, the inboard segment is doing marginally better (on a percentage basis) than other segments of the industry, but they are still hurting nonetheless. There is no standout, no shining star, they are ALL on the edge and unless something positive happens in this economy, there will more than likely be multiple companies that will go the way of chapter 11. Companies such as Malibu and MasterCraft are going to appear stronger in this market than they really are simply because they both continue to market aggressively (as compared to smaller independents) and unfortunately perception is reality. But don't be fooled, they both are sitting on some of the highest non-current inventory levels in their company's history and until those boats are thinned out and retailed, future production will be stagnant to non existent.
This is by far the best time to ever buy a wakeboard boat in terms of pricing. You can absolutely steal a boat right about now. Wanna help support your industry, upgrade your current boat if it is financially feasible. Support your local shop!

I am a dealer for wakecraft boats. I get my one 09 on monday. I take it to the Boston boat show and a few others. If somebody wants to go for a ride I take them. If they want to buy one then they pick their colors and wakecraftboats builds one. Seems to me, that in this economy, that is the way to go. If I don't sell one I have a kickass ride for the season.

Adam,

Read the whole thread buddy, it was a joke homie