Dealers report break-even profits in 2009

SIOUX FALLS, S.D. — The average dealer tracked by Spader Business Management broke even during the 12-month period ended Dec. 31, the company reported in a recent statement.

“For the 12 months ending December 31, 2009, the average dealer reported a net profit of 0.1% of sales (basically a break even),” Spader said. “With a break even through December, I would expect some lean winter months until the spring activity begins.”

The training and consulting firm tracks North American boat dealers, both large and small, to compile an average profile, then compares year-over-year trends in a number of different categories.

New boat sales were down by 33.2 percent and total dealership sales were down by 20.7 percent for the average dealer for 2009, compared to the prior year.

The average dealer reported year-to-date new boat sales of $3,151,619 and average total dealership sales of $7,332,433 for 2009. This compares to the average new boat sales of $4,720,630 and the average total dealership sales of $9,245,905 reported for 2008.

Pre-owned boat sales for the average dealer tracked by Spader Business Management brought in $997,258 during 2009, down only 1.3 percent when compared to 2008, according to Spader.

New boat inventory levels were down 26.7 percent — from $3,276,533 to $2,402,679. Spader reported pre-owned boat inventory was down 11.7 percent to $378,997 during this period, resulting in a total inventory decline of 24.9 percent.

F&I revenue fell 34.9 percent and service revenue dropped 9.0 percent for the period, while parts and accessories revenue was down 5.3 percent, marina revenue was down 9.5 percent and other department sales fell 60.2 percent. Dealers trimmed their spending by 16 percent during the 2009 year. All expense categories were reduced, with the biggest cuts coming in advertising and semi-fixed expenses.

The total dealership gross margin percentage was up by 1.4 percentage points – likely due to higher margin revenues (service, parts, marina) making up a bigger portion of dealership revenue, according to Spader. Unit gross margin percentages were down by 1.6 percentage points to 15.1 percent, compared to 2008.

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