Special Factors Make For Good Business for West Marine, Brunswick

Hmmm. Perhaps the boating market isn't in thin waters any more. Two industry players report smooth sailing in the second quarter 2010.

West Marine reported on July 30, 2010, a second quarter revenue gain of 11.5 percent. Earnings per share for the second quarter was $1.52 compared to $1.46 for the same period last year.

CEO Geoff Eisenberg said the company benefited by last year's closure of competitor Boaters World and by good boating weather in the northeast.

Full story at MercuryNews.com.

It pays to be global for Brunswick Corporation who reported on July 29, 2010, a second quarter revenue gain of 41 percent to $1.015 billion. Net earnings for the quarter was $13.7 million, or $0.15 per share, compared to a loss of $163.7 million, or -$1.83 per share, in the same period last year.

Brunswick is the nation's largest manufacturer of recreational boats under about a dozen brands including SeaRay, Hatteras and Bayliner as well as Mercury and Mariner boat engines.

In it's conference call with investors, Brunswick pointed to continued industry weakness in fiberglass inboard and outboard boat sales. US Inboard demand was down 29 percent in the second quarter, following a 23 percent decline in first quarter 2010 and a 33 percent fall in the fourth quarter 2009. US demand for outboards fell 16 percent in the second quarter, following declines of 22 percent in the first quarter and 29 percent in the fourth quarter 2009.

Brunswick was helped by the overseas market. Boat sales outside the US was up 64 percent for the quarter while engines sales outside the US jumped 28 percent.

Profit in the boat segment was helped by less need for discounting to push retail sales out the door. However, Brunswick reported 27 weeks of inventory in its pipeline. That can't be healthy for a seasonal business.

While the outlook for the US boat market is still grim, Brunswick can count on its bowling, billiards and exercise equipment to pick up the slack. The company's business results were a surprise to analysts and its stock is up over 200 percent from last year.

For the earnings call transcript, go to seekingalpha.com.

West Marine gains by less competition and Brunswick gains from bowling ball sales and demand in Europe. Good if you can get it, but special factors only work once. Demand has to be stronger for the industry to get healthier..

My IBM background tells me to issue some disclaimers here. So I disclaim any expertise as a stock analyst. This report is not a recommendation to buy or sell stock in these or any other company. If this were a recommendation, you should do the opposite of whatever I say. I have a proven talent for buying high and selling low because, like most laymen, I tend to hold on to stocks for too long, then won't sell until it "comes back." Which explains why I'm not running my boat these days--nor in the market for a new one.

Want stock advice? See an expert. Want to talk about the hobby? Stick around. Want to talk boating education or boating safety? Join your local Power Squadron.

Photo credit: Mercury Marine

The Potomac River Is...Clean

Well, cleaner and clearer that it was than when I was growing up way back in 19 none-ya-business.

Rob Hedelt's story on Fredericksburg.com tells how much better the river has become (Trip on the river reveals differences).

Hedelt accompanied two Chesapeake Bay Foundation naturalists on a 44 mile cruise up the Potomac from Aquia Creek to D.C. The naturalists were there to measure differences in water quality of the river in Stafford County, Virginia and Washington.

Water clarity is one difference, ranging from one fathom down river to about nine inches around the Wilson Bridge.

The naturalists attribute much of that to the presence of water grasses, with more of it from Mount Vernon down river, less in the waters around urbanized Washington. Sea grass filter particulates from the water and form a nursery for the tasty Blue Crabs we so love in these parts.

The effort to clean the Potomac has been lengthy and not always successful. Thought it never sunk to level of the Cuyahoga River, Washington residents were once prohibited from contact with the Potomac, much less eat the fish caught there.

These days, governments cooperate more or less on improving water quality. An army of volunteers work to clean out the trash along the Potomac watershed. One of those people is Potomac River Squadron's P/C Howard Gasaway whose involvement in the Anacostia River Clean-Up predates his membership in the Power Squadrons.

Cleaner water means better fishing. That, and the new National Harbor, will reestablish the Potomac as a premier boating destination as time goes on.

That has to be good for the Potomac River Power Squadron. We lost a lot of energy as members moved their boats to the Chesapeake and joined yacht clubs located there.

Photo Credit: (cc) richmanwisco on flickr.com

Are Your Charts Outdated, Captain?

My instructor in the Piloting class told me something astounding. I am supposed to navigate my boat using paper charts and that round thing on the dash covered by that glass bowl. What is it called? Oh yeah. The compass.

This is the Age of Technology. We don't convey messages by pen and paper. Most boaters don't pay much attention to chart books, if they even have one on-board.

For the longest time, United States Power Squadrons treated Global Positioning Systems (GPS) as back-up to nautical charts and the skills to read them. Not that they were being old fashioned. How's a recreational boat captain to know where to go if the GPS conks out?

USPS adapted to trends and boater preferences to treat GPS as the primary navigation tool, without backing away from paper charts (every boater should have the chart on board of the waters they ply).

Now the challenge is to get captains to check the accuracy of their nav tools from time to time. It turns out that is something of a problem.

A survey of boaters by the Alliance for Safe Navigation found that only one-third of respondents regularly undated their on-board navigational data.

“Unfortunately, these survey results indicate that boaters simply are not aware of how often conditions change and how those changes can affect their safety,” explains President Ron Walz of OceanGrafix, a founding member of the alliance. “The truth is that waters do change—and inaccurate chart information can turn a safe and enjoyable cruise into a dangerous situation.”

Highway surfaces do not change, except for the damned potholes. Water always change. Wind, current and tide works its magic both on the surface and the sea floor.

So yes, it really does help to swap out those old paper and electronic charts for more current ones and to glance at the Coast Guard Notice to Mariners from time to time. If you are a thorough captain who plots your course on paper before transferring it to your GPS, be sure you've set the GPS to the same datum as on the paper chart.

If you don't know what I just said, schedule yourself for a Piloting class or GPS seminar offered by your local Power Squadron.

If you don't know where you are going, you'll run aground when you get there. Put more bluntly, boating's a bitch when you are lost on the water. Don't get lost because of outdated information.

Full disclosure: United States Power Squadrons is a member of the The Alliance For Safe Navigation as is Jeppsen, Sea Tow, BoatUS, and OceanGrafix. The Power Squadrons and BoatUS would have you avoid incidents on the water. Jeppsen and OceanGrafix would like to sell you stuff that enables you to know where you are--and avoid hazards--on the water. If you have to call Sea Tow...well, you probably weren't paying enough attention to the other four.

USPS members are offered discounts on navigation products offered by Jeppsen and OceanGrafix and receive discounted membership in BoatUS.

Boating Education Saves Lives

You get into a lot when you get into a boat. Too

many recreational boat captains do not appreciate how tricky the water can be until they get into a jam. What they do then may cost them their lives, or save it.

So Many Lessons In Tragedy

Anthony Brown of Silver Spring, Maryland, commander of Potomac River Power Squadron, suspects that less experienced power boaters think of their vessel the way they think of their car. That thought occurred to him when he read Nick Schuyler's account of the tragic accident that took the lives of two NFL players as told in Schuyler's book Not Without Hope. Victims of the February 2009 Gulf of Mexico accident were pro football players Marquis Cooper and Corey Smith, and Will Bleakley, a friend of Schuyler. Cooper was the owner and skipper of the 21-foot boat.

Cooper's anchor snagged on something on the seabed. Unable to get it up, the group tied the anchor line to the stern of the boat and tried to pull the anchor free. That's a big no-no, according to Brown. The dangers of tying off the anchor to the stern of a boat is one of the early lessons students are taught in the Power Squadron's Seamanship course. In Cooper's case, the anchor did not give way. Instead, the stern was pulled under water swamping the boat. The four men were thrown overboard as the boat capsized.

Brown suspects that the group thought of the boat as a tow truck. Faced the same situation a week before the accident, Cooper did one of the smartest things a skipper can do when an anchor can't be unsnagged. He cut the line, sacrificing the anchor for the safety of the boat and passengers. Schuyler says Cooper was determined not to lose another anchor.

Boat Handling Is A Skill

Chris Pickwick, of Adelphi, Maryland, a squadron past commander and boating instructor, says the incident forcefully illustrates the need for safe boat education and how to handle unexpected boating situations even when on a simple fish

ing trip.

"The United States Power Squadrons and a number of other private and state organizations offer safe boating education. This training would have been helpful for the four football players aboard a 21 foot boat who experienced a boating accident 75 miles from shore in the middle of Winter.

"After taking such a course, these boaters would have known that four big men on a small boat might have at least made the boat unstable if not overloaded according to the boat's U.S. Coast Guard Maximum Capacities Vessel Plaque. They would also have been aware that standing on the boat’s rear deck would contribute to its instability as would surging the engine. They would also have known not to anchor from the stern as this also drags down the lowest part of the boat. These boaters would have known the proper way to free the anchor, and the need to make a float plan in case of emergency.

"Other courses offered by the Power Squadrons such as Seamanship, Piloting, Advanced Piloting, and Weather would have offered them further instruction them on how to plan a safe trip, how to handle the boat in heavy weather, the need to monitor the weather and to call for help before it was too late and the best way to manage hypothermia once in the cold water."

Schuyler is the lone survivor of the accident and the only one with a first-hand description of what happened. He is not an experienced boater, so Brown is not sure that Schuyler has the best grasp of Cooper's action. But the story itself is a cautionary tale for recreational boaters.

What's A Recreational Boat Captain To Do?

Recreational boat captains have fewer hours on the water than commercial captains or watermen. They are not required to meet commercial certification nor even have nautical charts on board. Sooner or later says Brown, every skipper must decide whether he is a boat driver or pilot.

For Brown, that was easy. He was looking for a way to reassure his non-boating, non-swimming passengers that it would be OK cruise with him. He took the Power Squadron's Safe Boating and Seamanship course before operating his boat. "I spent the equivalent an hour of class room time for every two hours of on-water time in my first year boating."

Organizations like the Coast Guard Auxiliary, community colleges and State authorities offer boating safety courses. Commercial schools go beyond that, but target their offerings to those who want a commercial captains license. The Power Squadrons may be the only group that certifies recreational boat skippers as having a body of knowledge in piloting and seamanship.

Skippers who take the Power Squadron curriculum from Seamanship, Piloting, Advanced Piloting to Navigation would be able to plot a course anywhere in the world as long as they have the proper charts, a sextant and a GPS. They would also be exposed to what can go wrong during a voyage and how to cope with it.

Know Before You Go

"All of boating is based on maritime practices and traditions" says Eugene Roberson, Mitchellville, Maryland, Potomac River's safety officer. Roberson points out that the captain of the Titanic was an experienced seaman, yet he sunk his ship. Boating is fun, but anything can happen on the water.

There's more to learn than safe boating, adds Roberson. Boating demands more self-sufficiency than does driving. The captain needs to know his mechanical and electronic systems. There's no pulling over if your boat breaks down in the middle of the Chesapeake Bay. "Boating education saves money as well as lives."

About The Power Squadrons

Potomac River Power Squadron is one of over 450 local affiliates of United States Power Squadrons, the world's oldest and largest non-profit volunteer boating organizations. Potomac River Power Squadron was founded in Washington, D.C. in 1915 and is a 501c(3) non-profit educational organization. It's members volunteer their time on boating safety and education as a civic service. Most members boat on the Chesapeake Bay or Potomac River, but live in suburban Maryland or the District of Columbia.

Potomac River is one of four squadrons active in the Washington, D.C. metropolitan area. The others are based in Rockville, Maryland, Northern Virginia and Mid-Potomac, centering on the Occoquan and Potomac Rivers.

The Power Squadrons offer a safe boating course that meets the requirements of the National Association of State Boating Law Administrators. The squadrons offer advanced classroom courses on boating. Its members volunteer to offer courtesy Vessel Safety Checks for non-commercial boats and perform other civic services around boating. United States Power Squadrons has been honored by four U.S. presidents for its boating safety and education programs.