Boating Industry Index dips slightly

In the first quarter of 2004, the performace of the Boat Industry Stock Index was comparable to most major national stock indices, which took a tumble with reports of soft factory orders and a slowdown in job creation in the Midwest.
Although overall business activity was up for the 11th-straight month in March in the closely followed Chicago area, the rate was slower than expected. The employment component of the Chicago Purchasing Manager’s Index was down sharply, below 50, a position that indicates contraction.
“There was some disappointment in the Purchasing Managers’ survey and factory orders,” said Senior Economic Strategist Milton Ezrati at Lord Abbett & Co. “It wasn’t bad data, but it was disappointing, and reinforces any economic bears out there.”
Despite the overall downward trend of the Boating Industry Stock Index, most companies in the index enjoyed a positive quarter for the maiden voyage of our index ended March 31, 2004. The index slipped 35.70 points, and ended at 2197.24, a loss of 1.60 percent. However, of the 10 stocks tracked in our index, advancing issues outweighed declining issues by an 8–2 count. The NASDAQ Composite endured its first quarter in the red since the third quarter of 2003, and the Dow Industrials were off for the first time since the initial quarter of 2002.
Optimism reigned at Brunswick Corp., which saw a 9.00-point increase in its shares for the quarter. Brunswick added 28.28 percent to close at 40.83, and was our top dollar gainer this session. It complete the acquisition of Crestliner, Lowe and Lund aluminum boat lines from privately held Genmar Holdings, Inc. for a total of $191 million in cash in the second quarter.
Marine Max has been on a tear this year, and announced an expansion and extension of a $280 line of credit. This credit facility replaces the company’s previous facility and adds an additional lender to the current six lenders the company already works with.
“The strength of our balance sheet enabled the company to secure this new $280 million credit facility,” says Marine Max CFO Michael McLamb. “The expansion and extension of our borrowing abilities is an important step in our growth strategy. It provides us greater financial capacity and flexibility, allowing us to focus on our core business and take advantage of new opportunities as they arise.”
Marine Max added 7.14 points, or 36.75 percent, and ended the session at 26.57.
Shares of West Marine added heft this session after the company reported a 14-percent increase in February sales as compared to the same month last year. The company upped its guidance, saying it expects net sales to improve by $2 million in its first quarter, to $133 million. The company also expects a reduction in its first quarter loss to negative numbers between $0.16 and $0.14 per share, compared to a loss of $0.32 per share in the same quarter last year. West Marine improved 4.35 points, or 15.82 percent, and ended at 31.85.
Despite a robust fourth quarter and a positive outlook for 3M, shares of the company took a dive this quarter, falling 3.16 points, or 3.72 percent to end at 81.87. Buckingham Research upgraded 3M to “accumulate” from “neutral.” Recommendation trends are on the upswing for the company, with five analysts suggesting a “strong buy” for the company, up from three analysts last quarter. Eight analysts have issued a recommendation of “buy” for 3M, ahead of five analysts’ recommendations of “buy” three months ago. 3M was our top dollar and percentage loser.
— Margot D. Crabtree is a financial data provider specializing in producing customized stock market indices and commentaries for trade and industry publications. You may reach her at margotc@indra.com.