Wall Street Journal 20 Aug 1999 Pg. B-10 By James P. MillerGenmar Holdings Inc., the Minneapolis boat maker that corporate investor Irwin Jacobs took private 11 years ago, disclosed plans to go public through a $100 million initial offering.
In preliminary U.S. Securities and Exchange Commission documents, Genmar says it is operating at full capacity, and wants to use proceeds from the planned initial offering to fund construction of additional production facilities.
Genmar says it wants to exploit proprietary technology that will allow it to produce boats faster. That technology, co-developed with a smaller company that Genmar recently acquired, has "positioned us to enter new markets and substantially increase our market share," the company said.
Genmar, citing a strong economy and positive demographic forces that have created a strong upturn in the cyclical boat market, listed an order backlog of $228.4 million as of June 30, up sharply from the year-earlier $118.8 million backlog.
Genmar, which makes power boats under such brand names as Aquasport, Crestliner and Lund, is one of two principal rivals to industry leader Brunswick Corp., the maker of Sea-Ray and Bayliner models. The other member of the industry's top three is closely held Outboard Marine Corp., which produces boats under the Chris-Craft and Grumman nameplates.
Genmar's filing shows that revenue for the year ended June 30 rose 20%, to $704.7 million, and operating profit for the period rose 37% to $37.5 million. Those results include the contribution of Genmar's Hatteras luxury-yacht operation, which the closely held company said it intends to spin off to its existing holders prior to the initial public offering.
Excluding the Hatteras business, the document says, revenue for the year ended June 30 was $614.4 million, and operating profit was $35.9 million.
Mr. Jacobs is chairman of Genmar, and is considered to be its largest single stockholder, although the preliminary offering documents don't spell out ownership stakes. The Minneapolis investor, now 58 years old, loomed large on the financial scene in the early 1980s, when he was known as "Irv the Liquidator."
Mr. Jacobs made big profits in that junk-bond era by making hostile runs at such big companies as Walt Disney Co., Avon Products Inc., ITT Corp., and BorgWarner Corp. He frequently bought minority stakes in companies, agitated for changes, and then agreed to sell his stake for a profit -- either to the target company or another, more-determined investor.
The company now known as Genmar was a publicly traded boat maker known as Minstar in the 1980s; Mr. Jacobs, who controlled the company, used it as a vehicle for some of his acquisition efforts. Minstar acquired AMF Corp. in 1985, for example, and while the investor sold off numerous AMF operations, AMF's Hatteras yacht business has remained with the boat company.
Dow Jones News Wire 19 Aug 1999
Issuer: Genmar Holdings Inc. Description: Makes motorized recreational boats Location: Minneapolis Offering: $100 million in stock Shares Outstanding After Offering: N/A Price talk: N/A Market Cap: N/A Underwriters: Stephens Inc., U.S. Bancorp Piper Jaffray Proceeds: To repay debt, build and equip new manufacturing facility, and for general corporate purposes, working capital and capital expenditures. Proposed Symbol: GNMR Dividend: None planned. ---Earnings--- Year June 30 a-1999 1998 Revenue $704,656,000 $585,943,000 Net income 40,945,000 2,858,000 Note: Figures in parentheses reflect losses. a. Fiscal 1999 pro forma results were net income of $45.4 million on revenue of $614.4 million. Those figures reflect the planned spinoff of the Hatteras luxury-yacht unit and reduced interest expense from debt refinancing and repayment of $20 million of debt using spin-off proceeds. ---Risk Factors---
Risks include increases in a cyclical industry; need for company to successfully develop the Roplene closed rotational mold and Virtual Engineered Composites and technologies; need to protect intellectual property; competition; dependence on third-party engine suppliers; vulnerability to fluctuations in the cost and supply or raw materials; potential liability and warranty claims; regulation; seasonality; dependence on key executives; control by certain officers, directors and shareholders; increases in fuel prices or taxes; year 2000 issues; company's guarantee of certain Hatteras obligations; dilution; future stock sales by existing shareholders; and lack of a prior market for the stock.
---Management--- Name Age Position Irwin L. Jacobs 58 Chairman Grant E. Oppegaard 56 President, chief executive Roger R. Cloutier II 46 Chief financial officer, executive vice president Biographies:
JACOBS has been chairman of the company and its predecessors since 1982 and was chief executive from April 1994 through December 1995. He was president and chief executive of Minstar from 1982 to 1994. He has been president and a director of Jacobs Management Corp., a management company, since 1981; chairman of Watkins, a direct marketer of household and health products, since 1978; chairman of Jacobs Trading Co., a wholesaler and retailer sale of closeout merchandise, since 1989; and chairman of Operation Bass Inc., a tournament fishing management company, since July 1996.
OPPEGAARD has held his current positions since January 1996, having previously worked for the company as a consultant, president of Sam's Club Boat Buying Program, and vice chairman. Before 1995, he served as executive vice president and senior operations officer of Fingerhut Inc., a direct marketing company. He also worked as a consultant and chief operating officer for MEI Diversified Inc. (MEIIQ).
CLOUTIER has held his current positions since February 1996. Since April 1990, he has been senior vice president of Jacobs Management Corp. From 1992 through 1999, he was vice president of Jacobs Investors Inc. and actively managed IMR Fund's investments in portfolio companies. From May 1994 to October 1996, he was a director and eventually chairman of Accent Software International Ltd. (ACNTF). He began his career with Arthur Andersen & Co.
---Shareholders--- Shareholder Shrs Before Offer After Offer (percent owned) Irwin L. Jacobs -b N/A N/A RDV Capital Mgmt LP II N/A N/A State of Wisconsin Invest Bd N/A N/A Orekron Holding AB N/A N/A Roger R. Cloutier II N/A N/A Grant E. Oppegaard N/A N/A
b. Also includes Jacobs Industries Inc., Jacobs Management Corp. and Watkins Inc. unit. Of the shares owned by Jacobs Industries, part of the shares are attributed to Mr. Jacobs and to the Pohlad Group, consisting of Carl Pohlad, Robert C. Pohlad, William Pohlad, PEP-SQ Limited Partnership.
Note: All of the above material has been taken from documents the company filed with the Securities and Exchange Commission. - Beth Mantz; 201-938-
RBBI Comment: Hmmmm, kind of wonder if coming back into the fold of the NMMA was related to knowing this was coming up???? Kind of a coincidence the dust has just settled from that skirmish isn't it. Being part of NMMA should help stock price.
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